Prentice v. Board of Administration – Case Brief Summary (California)

In Prentice v. Board of Administration (2007) 157 Cal.App.4th 983, the Court addressed a situation in which an increase in a manager's salary was not pursuant to a "publicly available pay schedule."

In that case, Prentice was the director of the water department for the City of Corona when in 2001 it asked him to become the general manager of its new department of water and power. (Prentice, supra, 157 Cal.App.4th at p. 987.)

The city gave him a 10.49 percent pay raise because of the new responsibilities in his new position. (Ibid.) In 2003, Prentice retired. (Ibid.) His successor as the general manager of the department of water and power was not paid the 10.49 percent increase in pay that Prentice had received. (Id. at p. 988.)

PERS denied Prentice's request that his final compensation for calculating his retirement benefits include the 10.49 percent pay raise. (Ibid.) On appeal after the trial court denied Prentice's petition for writ of mandate, we reviewed applicable statutes and regulations and concluded:

"In sum, 'calculation of "compensation earnable" is not based on individual efforts . . . .' Rather, both components of 'compensation earnable,' an employee's payrate and special compensation, are measured by the amounts provided by the employer to similarly situated employees. (See § 20636, subds. (b)(1), (2), (c), (e)(2).)" (Prentice, supra, 157 Cal.App.4th at p. 992.)

After finding Prentice was a member of the city's class of managers and assistant managers of city departments, we concluded: "Prentice's 10.49 percent salary increase was not part of his 'payrate' within the meaning of section 20636, subdivision (b)(1). Contrary to Prentice's contention on appeal, his increased pay was never made part of a publicly available pay schedule, as required by the statute." (Prentice, supra, 157 Cal.App.4th at p. 993.)

The pay range for the management group that included Prentice's general manager position did not include the pay increase. (Id. at pp. 993-994.) The fact Prentice's full salary was evident in the city's annual budget did not make that salary available to any other person holding the position of general manager. (Id. at p. 994.) We concluded:

"Because, as we view the entire statutory scheme, the limitations on salary are designed to require that retirement benefits be based on the salary paid to similarly situated employees, PERS acted properly in looking at the published salary range rather than the exceptional arrangement the city made with Prentice and reflected in the city's budget documents. The defect in Prentice's broad interpretation of 'pay schedule' is that it would permit an agency to provide additional compensation to a particular individual without making the compensation available to other similarly situated employees." (Prentice, supra, 157 Cal.App.4th at p. 994.)

In addition to concluding Prentice's salary increase was not part of his "payrate" under section 20636, subdivision (b)(1), we concluded his salary increase also did not constitute "special compensation" under section 20636, subdivision (c)(2), because it was not set forth in a written labor policy or agreement and was not available to all members of his class. (Prentice, supra, 157 Cal.App.4th at pp. 994-996.)

In so concluding, the Court stated:

"The fact his raise was the subject of a written memorandum from the city manager to the human resources department did not satisfy the requirement that it be set forth in a written labor policy or agreement. A written employment agreement with an individual employee is not a labor policy or agreement within the meaning of the regulation i.e., Cal. Code Regs., tit. 2, § 571, subd. (b). . . . Our restricted and more literal reading of the regulation is required because the broad interpretation offered by Prentice would essentially provide no limit on the compensation a local agency could provide to individual employees by way of individual agreements." (Prentice, supra, 157 Cal.App.4th at p. 995.)

Because Prentice's salary increase was not part of his "payrate" or "special compensation," we concluded it was not part of his final compensation for calculating his retirement benefits and affirmed the trial court's judgment. (Id. at p. 996.)