California court shortens probation periods for state workers

In a dispute over a promotion, case clarifies when a hire can be voided

California court shortens probation periods for state workers

In a recent decision from California’s Court of Appeals, the probation periods for state workers have effectively been shortened due to a case filed by an employee over a promotion dispute.

In March, the third appellate district ruled that a former employee’s appointment started the day she accepted her position, rather than her start date. The recent ruling would mean California state managers will have “a little less time to fire or demote employees in new jobs,” The Sacramento Bee (TSB) reported.

Before the court’s decision, most state jobs had yearlong probation periods during which a manager may void a hire or promotion. “Since most people don’t start new jobs until several weeks after accepting them, most state probation periods will be that many weeks shorter moving forward,” TSB said.

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The issue stemmed from a dispute by a California Public Employee’s Retirement System (CalPERS) employee’s promotion six years ago. According to the TSB report, Nancy Michaels had worked for CalPERS since 1980. In 2016, her employer offered her a data processing manager II job, and she accepted it.

According to records, Michaels’ official start date was May 5, but months later, an anonymous colleague protested that she didn’t meet the minimum qualifications for her position, which prompted an investigation by the State Personnel Board (SPB).

In 2017, a compliance officer from SPB then called CalPERS to say that Michaels “didn’t have the minimum experience” and urged that her “appointment needed to be voided.” However, the next day, she received a positive performance report “congratulating her on passing her final probation for the position.” Soon after, CalPERS voided her appointment.

Michaels then appealed to the SPB, which rejected her appeal. She then brought the case to the Sacramento County Superior Court, which ruled in her favor. CalPERS filed an appeal to the appellate court, which also affirmed the decision in her favor.

Both courts based their decisions on the “plain language” in state law involving appointments. According to the rulings, a civil service appointment is defined under the law as “the offer to and acceptance by a person of a position in the State civil service.”

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In the TBS report, CalPERS attorneys said the court’s interpretation led to an “absurd result,” arguing that “the point of a probationary period is to give an employer a chance to evaluate a new hire’s performance, which can’t be done before an employee starts the job.”

On the other hand, Michaels’ attorney Patricia Kramer said that “the appellate court came down very clearly and very strongly; she’s been right.” Kramer said her client “had the requisite management experience for the promotion but opted to pursue her court case based on the law’s definition of an appointment.”

Meanwhile, CalPERS reportedly refused to reinstate Michaels. She ultimately resigned in 2019 and is seeking damages, including back pay, lost wages and adjustments to her retirement benefits.

“Nancy Michaels has suffered all types of damage, including but not limited to … anger, frustration, worry, anxiety, professional and personal embarrassment, humiliation, fear, loss of sleep, depression, mental anguish, angst, uncertainty, nervousness, shock and damage to her nervous system, loss of emotional tranquility, physical sickness, related mental and physical injuries and mental/emotional distress and other pain and suffering,” the complaint said in the TBS report.

CalPERS builds retirement and health security for California state, school, and public agency members. It reportedly manages the “largest public pension fund in the country.”

Learn more at Employment Law Masterclass California.

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