September 7, 2017

Appellate Court Holds That MOU Does Not Provide Vested Interest in Retiree Medical Benefits

BY: Nate Kowalski, Jorge Luna, Joshua Morrison

A new California appellate court decision affirmed the denial of retiree medical benefits and reinforced a 2011 California Supreme Court ruling that absent clear contractual language or convincing extrinsic evidence of intent, the presumption is that a Memorandum of Understanding (“MOU”) does not create rights that survive the term of the contract.

Specifically, the California Court of Appeal ruled in an unpublished decision, Vallejo Police Officers Association v. City of Vallejo, 2017 WL 3600572, that the MOU between the Vallejo Police Officers Association (“Police Association”) and the City of Vallejo (“City”) did not provide a vested right to retiree medical benefits that covered insurance premiums up to the full cost of a Kaiser health plan. The court determined the Police Association did not sufficiently show that the City intended the promise relating to retiree medical benefits to survive beyond the term of the MOU.

For more detail and insight, please read AALRR’s Alert about the decision.

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Attorney Bio(s)

nkowalski

Nate Kowalski

Partner

562-653-3200

nkowalski@aalrr.com

Nate Kowalski is a Partner in the Cerritos office and Chair of the firm’s Public Entity Labor and Employment Practice Group. He is an accomplished litigator who represents employers in both the private and public sectors. Mr. Kowalski has litigated hundreds of sensitive and complex labor and employment cases in state and federal courts and has achieved remarkable results for his clients in hearings, arbitrations, trials and appeals.

full bio

jluna

Jorge Luna

Partner

562-653-3200

jluna@aalrr.com

Jorge Luna is a partner in the Cerritos office of Atkinson, Andelson, Loya, Ruud & Romo. Mr. Luna has been practicing law since 1996 in a variety of areas, including employment, construction, business litigation, intellectual property and entertainment. For the past 12 years, Mr. Luna has focused his practice exclusively on employment matters, with an emphasis on litigation.

full bio

Joshua Morrison

Joshua Morrison

Senior Counsel

(562) 653-3200

jmorrison@aalrr.com

Joshua Morrison is a senior counsel in the Cerritos office of Atkinson, Andelson, Loya, Ruud & Romo. Mr. Morrison represents California public school districts in all aspects of general education law. His areas of specialty practice include public employee discipline/dismissal, administrative hearings, matters before the Public Employment Relations Board, petitions for writ of mandate, retirement health benefits, PERS/STRS, and school district audit appeals.

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