International Brotherhood of Electrical Workers v. City of Redding

Local 1245 of the International Brotherhood of Electrical Workers (IBEW) filed a petition for writ of mandate after the City of Redding (City) unilaterally retracted its promise to pay 50 percent of City employees’ medical insurance premiums after retirement. The City demurred, and the superior court sustained the demurrer without leave to amend and dismissed IBEW’s petition, deciding that (1) the right of active employees to receive future medical insurance benefits cannot be vested because it is subject to the collective bargaining process and (2) the memorandum of understanding (MOU) between the parties cannot be deemed to provide vested rights because the MOU remains in force only until its expiration.

After IBEW appealed the superior court’s dismissal of its petition, the California Supreme Court filed its opinion in Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4th 1171 [ 134 Cal.Rptr.3d 779 , 266 P.3d 287 ] (Retired Employees). In that case, the Supreme Court held that “under California law, a vested right to health benefits for retired county employees can be implied under certain circumstances from a county ordinance or…