Molina v. Board of Administration, etc – Case Brief Summary (California)

In Molina v. Board of Administration, etc. (2011) 200 Cal.App.4th 53, a former employee filed a wrongful termination action against his former employer. (Id. at p. 56.)

That action was settled seven years later. (Ibid.) Pursuant to the parties' settlement agreement, the former employee was paid $875,000 and rehired for one day for the sole purpose of allowing him to purchase service credits from PERS. (Id. at p. 57.)

PERS denied his subsequent request for it to consider all or part (i.e., $200,000) of his settlement pay as earnable compensation.4 (Molina, supra, 200 Cal.App.4th at p. 58.) The trial court denied his petition for writ of administrative mandate. (Id. at pp. 59-60.)

On appeal, Molina, citing our decision in Prentice, concluded that even if $200,000 of the settlement proceeds was considered "back pay," that would not necessarily increase his retirement benefits because the "payrate" for the position he held was $8,527.98 per month and "was not affected by the settlement payout." (Molina, at p. 66.)

Molina stated: "Because, under PERL, even if a portion of the settlement amount had been labeled back pay and was includible in taxable income, it could not be included in Molina's 'payrate' because there was no evidence that the amount was either (1) paid to similarly situated employees or (2) paid in accordance with a 'publicly available pay schedule . . . for services rendered on a full time basis during normal working hours.' (Gov. Code, § 20636, subd. (b)(1).)" (Id. at p. 67.)