Barber v. Cal. State Pers. Bd.

CODRINGTON J.

On October 24, 2014, in Barber I , this court reversed the trial court's decision upholding Barber's termination, and ordered the trial court to issue a peremptory writ of mandate directing SPB to set aside its decision sustaining CDCR's dismissal of Barber and award him "any other relief to which he is entitled." This court concluded that the notice of adverse action did not provide Barber with sufficient notice of the workplace rules he allegedly violated or the specific manner in which the violation occurred. We therefore held in Barber I that, "[w]ithout that notice, he was deprived of his due

CDCR's counsel responded that NLRB and EEOC decisions are inapplicable because they do not involve administrative law, and Barber's case does not involve discrimination. CDCR's attorney further argued that whether Barber incurred increased tax liability was speculative because Barber lacked sufficient evidence proving his claim. In addition, CDCR's attorney argued that section 19584 does not include language allowing for increased tax liability recovery, and there is no supporting case law.

The trial court noted that both parties agreed there was no California case law directly on point. The trial court further noted that Barber's increased tax liability was ascertainable and that, if recoverable as a matter of law, the court could remand the matter to the ALJ for a hearing on the factual issue of the amount recoverable. The trial court took Barber's writ petition under submission and later that day denied it.

The court stated in its minute order that Barber "concedes that there is no binding authority under California case law." The court further stated: "The language of Section 19584 is clear in that increased tax liability is not an

SPB's decision may be reviewed in the trial court by filing a petition for a writ of administrative mandate, which may be brought only "for the purpose of inquiring into the validity of any final administrative order or decision ...." ( Code Civ. Proc., § 1094.5, subd. (a) ; see also State Bd. of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963 , 974, 89 Cal.Rptr.3d 576 , 201 P.3d 457 .) " ' "On review the decisions of [SPB] are entitled to judicial deference. The record must be viewed in a light most

In addition to adding the definition of "salary" in section 19584, the April 1994 legislative bill amending section 19584 deleted overtime compensation as a part of "back salary." (Assem. Com. on Public Employees, Retirement and Social Security, Analysis of Sen. Bill No. 846 (1993-1994 Reg. Sess.) as amended Apr. 28, 1994, p. 2; see Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Sen. Bill No. 846 (1993-1994 Reg. Sess.) Aug. 12, 1994, pp.5-6.) The Legislature did not define what it meant by "compensation." ( Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106 , 1117, 81 Cal.Rptr.2d 471 , 969 P.2d 564 .) "Where different words or phrases are used in the same connection in different parts of a statute, it is presumed the Legislature intended a different meaning." ( Ibid. ) We therefore presume the words "salary" and "compensation" differ in meaning.

The Legislature included in its definition of "salary" "other special salary compensations , if sufficiently predictable." ( § 19584, italics added.) The common meaning of "compensation" is "payment." (Webster's 10th Collegiate Dict. (1993) p. 234.) "[C]ompensation ... earned" means earned payment. ( Martin , supra , 227 Cal.App.4th at p. 1257, 174 Cal.Rptr.3d 471 .) " Section 19584 's use of the word 'compensation' unambiguously sweeps broadly and encompasses all earned payments." ( Id. at p. 1258, 174 Cal.Rptr.3d 471 , italics added.) Increased tax liability is neither earned nor a payment. Therefore, it is not "salary" or "special salary compensation" within the meaning of section 19584.

We disagree with the dissent's broad construction of the section 19548 language, "other special salary compensations," as encompassing gross-up

In addition to the plain meaning of the language in section 19584 not supporting recovery for increased tax liability, the statute's history also does not support such relief. The court in Martin provides a detailed discussion of

The Senate Rules Commission's final bill analysis described the bill amending section 19584 as: "Defines salary for purposes of the law concerning reinstatement of an employee [to] include salary adjustments and shift differential, and other special salary compensation, if sufficiently predictable." (Sen. Rules Com., Off. of Sen. Floor

In reaching its holding, the court in Swepston explained that "historically the term 'salary' has been used in the State Civil Service Act to denominate compensation of a fixed sum for all services rendered. ( § 18000.) With respect to the compensation of state employees for work performed in excess of the normal work week, the Legislature used the phrase 'overtime compensation.' (See § 19844.) We presume that 'salary' was intended to have the same meaning in the State Civil Service Act wherever used. [Citation.] Hence, as used in section 19584, salary is exclusive of 'overtime compensation.' " ( Swepston , supra , 195 Cal.App.3d at pp. 95-96, 240 Cal.Rptr. 470 .)

The Swepston plaintiff conceded that the word "salary" as used in section 19584 did not include compensation for overtime, nor could such a construction of the word be supported. The plaintiff also acknowledged there was no statutory provision for overtime compensation in the statute in effect when the Swepston plaintiff was dismissed and reinstated. Nevertheless, the plaintiff argued he was entitled to overtime compensation under the amendment to section 19584 in 1985, which reflected "an intent to 'make whole' those employees whose adverse action is revoked or modified." ( Swepston , supra , 195 Cal.App.3d at p. 96, 240 Cal.Rptr. 470 .) The Swepston court disagreed, concluding it could not rely on the amendatory language because section 19584 in 1985, did not apply retroactively to the plaintiff. ( Swepston , supra , at p. 97, 240 Cal.Rptr. 470 .) The Swepston court added that, even if the court could rely on the section 19584 amendment, under the ordinary rules of statutory construction, nothing in the amended language of section 19584 authorized SPB to compensate for overtime.

Similarly, in the instant case, we conclude section 19584 does not authorize recovery for increased tax liability resulting from a lump sum award for back pay. We recognize that Swepston is founded on a former version of section 19584. We nevertheless conclude that the Swepston analysis applies here, because section 19584 is fundamentally the same as it was when Swepston was decided, with the exception of adding, for clarification purposes, the definition of "salary." ( Swepston , supra , 195 Cal.App.3d at p. 97, 240 Cal.Rptr. 470 .)

In Martin , the plaintiffs argued that SPB's decision rejecting an overtime offset from the plaintiffs' back pay award should be upheld, because section 19582 grants SPB broad authority to do whatever is "just and proper." The court in Martin disagreed, concluding that " [n]othing in section 19582 permits the Board to exceed the statutory authority granted to it in section 19584 . The portion of section 19582 that [the plaintiffs] rely upon reads: 'Hearings may be held by the board, or by any authorized representative, but the board shall render the decision that in its judgment is just and proper.' (§ 19582, subd. (a.)) The clear meaning of this provision is that even if the hearing is held before an authorized representative rather than the Board, it is the Board that makes the 'just and proper' decision." ( Martin , supra , 227 Cal.App.4th at p. 1258, 174 Cal.Rptr.3d 471 , italics added.) The Martin court thus rejected the proposition that section 19582 provides SPB with broad authority to award relief beyond the statutory constraints and authority provided in section 19584. As in Martin , Barber is not entitled to recovery under section 19582 beyond that which is permitted under section 19584.

EQUITABLE RELIEF UNDER FEDERAL LAW

Barber argues that even if section 19584 does not authorize recovery for increased tax liability, he is nevertheless entitled to such recovery as equitable relief under federal and state case law, based on CDCR's violation of Barber's due process rights. We disagree.

The Clemens court acknowledged that in Dashnaw v. Pena (D.C. Cir. 1994) 12 F.3d 1112 , the D.C. Circuit rejected an award for increased tax liability. The Dashnaw court explained: "Dashnaw also argues that the District Court should have granted him additional compensation to help cover the higher taxes he will have to pay because he will receive his backpay in a lump sum rather than as salary paid out over a period of years. Absent an arrangement by voluntary settlement of the parties, the general rule that victims of discrimination should be made whole does not support 'gross-ups' of backpay to cover tax liability. We know of no authority for such relief, and appellee points to none. Given the complete lack of support in existing case law for tax gross-ups, we decline so to extend the law in this case. We therefore reject Dashnaw's request for additional compensation to cover his tax liability." ( Id . at p. 1116.)

The court in Clemens agreed with the analysis of the Third, Seventh, and Tenth Circuits, holding that the district court may, in its discretion, award an employee gross-up damages for increased tax liability from a lump sum award. ( Clemens , supra , 874 F.3d at p. 1117.) The Clemens court rejected the employer's argument that such monetary relief is legal, not equitable, concluding that the argument is "wrong under Title VII case law." ( Ibid. ; see also Lutz v. Glendale Union High Sch. (9th Cir. 2005) 403 F.3d 1061 , 1068-1069

In rejecting the Graham plaintiff's contention that she was entitled to recovery for increased tax liability arising from her compensatory damages award, the Graham court stated that, "while the Court may have wide discretion in fashioning an equitable award, this discretion does not permit the Court to circumvent the clear intent of Congress. And, here, as explained, Congress has decided not only to treat such damages as taxable income but also to place the burden of paying the necessary taxes on Plaintiff." ( Graham , supra , 2017 WL 5505800 [at p. 4].)

The federal decisions allowing for increased tax liability recovery are distinguishable because they are founded on federal legislation that includes language expressly allowing for broad equitable relief. Section 19584 does not include such language. Therefore, Barber is not entitled to equitable relief, where none is authorized.

B. State Case Law Regarding Awards for Constitutional Rights Violations

Barber also cites state case law, including Ofsevit v. Trustees of California State University & Colleges (1978) 21 Cal.3d 763 , 148 Cal.Rptr. 1 , 582 P.2d 88 , Wilkerson v. City of Placentia (1981) 118 Cal.App.3d 435 , 173 Cal.Rptr. 294 , for the proposition the court and SPB have authority to award recovery for increased tax liability as equitable relief based on CDCR's due process violation. These cases are neither dispositive nor on point.

While Ofsevit states that public policy supports making a reinstated employee whole by paying back pay and benefits, there is no mention of requiring payment of recovery for increased tax liability caused by a lump sum back pay award or providing recovery beyond back pay and benefits, which are statutorily authorized. Ofsevit v. Trustees of California State University & Colleges , supra , 21 Cal.3d 763 , 148 Cal.Rptr. 1 , 582 P.2d 88 thus does not resolve the issue raised in the instant case of whether the court or SPB has equitable authority or authority under the state and/or the federal Constitutions to award recovery for increased tax liability caused by a lump sum back pay award. Likewise, the courts in Barber and Wilkerson do not address this issue.

The court in Wilkerson held that the plaintiff employee was entitled to reinstatement and back pay for the city's discharge of the plaintiff without full substantive and procedural due process. ( Wilkerson v. City of Placentia , supra , 118 Cal.App.3d at pp. 443-444, 173 Cal.Rptr. 294 .) "California courts have consistently held that a public employee who has been deprived unlawfully of his position is entitled to recover the full amount of the salary which accrued to him from the date of his unlawful discharge to the date of his reinstatement." (

The state constitutional provision at issue here says that SPB "shall enforce the civil service statutes and, by majority vote of all its members, shall prescribe probationary periods and classifications, adopt other rules authorized by statute, and review disciplinary actions ." ( Cal. Const., art. VII, § 3, subd. (a), italics added; accord, State Personnel Bd. v. Department of Personnel Admin. , supra , 37 Cal.4th at p. 523, 36 Cal.Rptr.3d 142 , 123 P.3d 169 .) SPB's authority is limited by the state Constitution and state statutory law. Statutory law limits relief ordered by SPB to that which is stated in section 19584. The state and federal Constitutions do not provide any authority to provide additional equitable or monetary relief for increased tax liability in the instant case. Barber therefore is not entitled to any relief beyond that which is statutorily authorized in section 19584.

We conclude, as the court in Martin did, that "[t]he federal authorities that [the plaintiffs] cite are not pertinent here. Our task is to construe specific language in a California statute. [The plaintiffs] do not suggest that any of these cases involved an interpretation of statutory language like that in

In this case, for example, Barber was paid all at once for six years of salary and benefits. Though he was not permitted to put on evidence showing how much he paid, he estimates he paid about $ 145,000 more in taxes than he would have paid had he worked steadily through those six years and paid

Dictionaries confirm the point. Compensation means "the act or state of compensating, as by rewarding someone for service or by making up for someone's loss , damage, or injury by giving the injured party an appropriate benefit." (Dictionary.com < https://www.dictionary.com/browse/compensation> [as of May 13, 2019], italics added.) It also means "something given or received as an equivalent for services , debt, loss, injury, suffering , lack, etc.; indemnity." ( Ibid. , italics added.) A dictionary published in 1991, roughly contemporaneous with the amendment that inserted the phrase "special salary compensations," contains the same ideas. Compensation is "something that constitutes an equivalent or recompense," and recompense is "to give something to by way of compensation (as for a service rendered or damage incurred )." (Webster's 9th New Collegiate Dict. (1991) pp. 268, 984, italics added.)

These definitions plainly encompass the idea of income paid for work performed and the idea of payments made to make up for an injury. Black's Law Dictionary agrees, though it breaks the two meanings into separate entries. "1. Remuneration and other benefits received in return for services rendered; esp., salary or wages ... 2. Payment of damages, or any other act that a court orders to be done by a person who has caused injury to another. In theory, compensation makes the injured person whole." (Black's Law Dict. (8th ed. 2004) p. 301.)

How do we decide which is correct in this statutory provision? I don't believe we need to decide. The term itself is broad and general, as the government parties acknowledge. I conclude the plain meaning of the statute includes both senses of the word compensation. The term is designed as a true catchall. There may be other forms of special salary payments not captured by the specific categories of statutory salary, salary adjustments, and shift deferential pay. The statute allows the award of such payments, if they're predictable. Similarly, there are remedial awards that may help ensure a wronged employee receives the same net salary they would have received if not terminated. A gross-up award to account for increased tax liability falls into the latter bucket, and I believe it is a form of compensation authorized by the statute. The fact that the term is plural-"special salary compensations"-fits neatly with this interpretation.

There's no question Barber suffered a loss to his net salary because of his wrongful termination. So, ordering a gross-up award to make up for that loss is necessary to return him to the position he would have been in had he not been wronged. Interpreting the statute as allowing such an award is therefore preferable because it advances the statute's make-whole purpose. ( Lee v. Hanley (2015) 61 Cal.4th 1225 , 1233, 191 Cal.Rptr.3d 536 , 354 P.3d 334 [" 'Ultimately we choose the construction that comports most closely with the apparent intent of the lawmakers, with a view to promoting rather than defeating the general purpose of the statute' "].) As the U.S. Court

Finally, there's no reason to think proving the amount of a tax liability gross-up award will be speculative. Back pay awards are backwards looking and figuring out the tax consequences is a technical problem, solvable within a reasonable degree of certainty. (See Ireland, Thomas, Journal of Legal Economics 51, Tax Consequences of Lump Sum Awards in Wrongful Termination Cases ,

SPB issued a resolution setting aside its previous April 2011 decision, and ordered CDCR to reinstate Barber and pay Barber all back pay and benefits that would have accrued had he not been terminated in April 2009. SPB further directed that if the parties were not in agreement on the amount of Barber's salary and benefits recovery, the matter was to be referred to the chief administrative law judge (ALJ) for a hearing. In April 2015, Barber was reinstated, and began working again and receiving salary and benefits.

Although as of October 2015, CDCR paid Barber approximately $ 500,000 in back pay (over $ 450,000 in back pay and over $ 230,000 in benefits), in January 2016, Barber submitted a request for additional recovery under section 19584 and a hearing. Barber asserted that, "due to the large lump sum back pay payment [Barber] received in 2015, he is now faced with a significantly greater tax burden than if he had been receiving his salary on a yearly basis and paying his taxes accordingly." Barber maintained that, as a consequence, CDCR had a duty to return Barber to the condition he would have been in had he not been dismissed and, as such, CDCR should reimburse Barber for his increased tax liability from being paid a lump sum back pay award.

At a prehearing/settlement conference, Barber and CDCR disagreed on whether Barber was entitled to additional reimbursement of wages to cover Barber's increased tax liability. The ALJ instructed the parties to brief the issue of whether Barber's increased tax liability was compensable under section 19584.

A. Motion to Allow Increased Tax Liability Recovery

In May 2016, Barber filed a motion to allow recovery for increased tax liability under section 19584 as an element of back pay. The Los Angeles Police Protective League joined Barber's motion as amicus curiae and filed a supporting amicus brief and reply. Barber asserted in his motion that the purpose of section 19584 is to make a wrongfully terminated employee whole. Barber argued that, in making him whole, CDCR was required to pay him for incurring approximately $ 145,000 in increased tax liability, caused by receiving the lump sum back pay award.

Barber noted that, "[p]rior to 1986, it was not uncommon for courts to disallow

CDCR argued in its opposition that section 19584 does not authorize compensation for increased tax liability; SPB did not have jurisdiction to award compensation for increased tax liability; Barber failed to cite any supporting binding case law; and federal NLRB and EEOC case law does not support Barber's position because Barber's case does not involve discrimination and there is a split of nonbinding federal authority on whether damages for increased tax liability are recoverable.

B. June 2, 2016, Hearing on Motion for Increased Tax Liability Recovery

On June 2, 2016, an ALJ heard, telephonically, Barber's motion for increased tax liability recovery. No witness testimony or evidence was presented. Counsel for Barber and CDCR presented oral argument. Barber, through his attorney, argued that section 19584 provided for back pay "salary," in furtherance of making an employee whole after being wrongfully terminated. Barber's attorney acknowledged there was little, if any, state case law on the issue and section 19584 did not include any specific language authorizing broad equitable relief, as is included in Title VII of the Civil Rights Act. Barber's attorney argued that, nevertheless, the intent of section 19584 is to allow for such relief. Barber's attorney noted that Barber's claim was unusual because he received back pay for six years of salary. Usually, back pay is for a relatively short period of time, resulting in minimal increased tax liability. In addition, counsel argued that, before tax laws changed in 1986, receiving a lump sum back pay award was not a problem.

CDCR's attorney argued section 19584 did not allow for increased tax liability recovery because such relief is not salary or benefits. Counsel further argued the federal case law Barber relied on is inapplicable because it is founded on federal law which, unlike section 19584, contains language expressly allowing for broad equitable relief. CDCR's attorney stated that the legislature could amend the statute to allow for such relief or it could be provided for in the memorandum of understanding, which currently does not provide for increased tax liability recovery. The ALJ took the matter under submission and issued a written decision on June 16, 2016.

The ALJ stated in its June 16, 2016, written decision that section 19584 does not mention recovery for increased tax liability. Furthermore, the terms "salary," "benefits," and " 'special salary compensations' " do not encompass payment for increased tax liability. The ALJ also considered and rejected the proposition that SPB had broad equitable authority to make Barber whole, when section 19584 does not

E. June 16, 2017, Trial Court Hearing on Barber's Writ Petition

On June 16, 2017, the trial court heard oral argument on Barber's writ petition. Barber, in propria persona, argued that his tax documentation showed that his total tax liability, had he received his annual salary during the six years he was dismissed from employment, would have totaled about $ 5,300, whereas his tax liability on his lump sum award is $ 161,000. He therefore must pay approximately $ 155,000 more in income tax. Barber said he made about $ 110,000 a year. As a consequence of his lump sum award, he was taxed at the highest rate, incurring $ 171,000 in state and federal taxes. Barber argued that his increased tax liability was not speculative relief. It could be calculated with sufficient accuracy. Barber added that he should not have to pay increased tax liability caused by CDCR wrongfully terminating him. Barber argued he should

PRINCIPLES OF STATUTORY CONSTRUCTION

In his appeal, Barber challenges the trial court's and SPB's interpretation of section 19584. Both the trial court and SPB construed section 19584 as not allowing recovery for increased tax liability caused by Barber receiving a lump sum back pay award. Our review of the trial court's ruling requires this court to interpret section 19584 de novo. ( Department of Corrections & Rehabilitation v. State Personnel Bd. (2014) 227 Cal.App.4th 1250 , 1256, 174 Cal.Rptr.3d 471 ( Martin ).) We are thus required to apply an independent standard of review to the issue of statutory construction raised in the instant appeal. ( Fisher v. State Personnel Bd. , supra , 25 Cal.App.5th at p. 14, 235 Cal.Rptr.3d 382 .) In doing so, " '[w]e give great deference to the agency's interpretation of statutes affecting issues within its administrative sphere.' [Citation.] However, we 'do not necessarily defer to SPB's interpretations of the governing statutes. [Citation.] The judiciary takes ultimate responsibility for the construction of statutes, although according great weight and respect to the administrative construction such as is appropriate under the circumstances.' [Citation.]" ( Martin , supra , at p. 1256, 174 Cal.Rptr.3d 471 .)

When construing a statute, we apply the following well-settled principles of statutory construction. In discerning the Legislature's intent, " '[t]he statutory language itself is the most reliable indicator, so we start with the statute's words, assigning them their usual and ordinary meanings, and construing them in context. If the words themselves are not ambiguous, we presume the Legislature meant what it said, and the statute's plain meaning governs. On the other hand, if the language allows more than one reasonable construction, we may look to such aids as the legislative history of the measure and maxims of statutory construction. In cases of uncertain meaning, we may also consider the consequences of a particular interpretation, including its impact on public policy.' [Citation.] ' "If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose." [Citation.] ... "a

V.

CONSTRUING SECTION 19584

Barber agrees that increased tax liability recovery is not a benefit within the meaning of section 19584. Instead, Barber argues that increased tax liability recovery is "salary," as defined in section 19584. The current definition of "salary" was added to section 19584 by amendment in 1994 by Senate Bill No. 846 (1993-1994 Reg. Sess.) (Senate Bill 846). (Compare Stats. 1985, ch. 1195, § 6, p. 4051 with Stats. 1994, ch. 814, § 4, p. 4057; see also Martin , supra , 227 Cal.App.4th at p. 1259, 174 Cal.Rptr.3d 471 .)

The State Civil Service Act (§ 18500 et seq.) provides for compensation of employees who have been wrongfully discharged from state service. ( Swepston v. State Personnel Bd. (1987) 195 Cal.App.3d 92 , 95, 240 Cal.Rptr. 470 ( Swepston ).) Section 19584 provides, in relevant part: "Whenever the board revokes or modifies an adverse action and orders that the employee be returned to his or her position, it shall direct the payment of salary and all interest accrued thereto, and the reinstatement of all benefits that otherwise would have normally accrued. 'Salary' shall include salary, as defined in Section 18000, salary adjustments and shift differential, and other special salary compensations, if sufficiently predictable."

Section 18000 provides: "The salary fixed by law for each state officer, elective or appointive, is compensation in full for that office and for all services rendered in any official capacity or employment whatsoever, during his or her term of office, and he or she shall not receive for his or her own use any fee or perquisite for the performance of any official duty."

In addition, California Code of Regulations, Title 2, section 51.2 (regulation 51.2) states that "(A) 'Back pay' means the compensation Appellant would have received from Respondent if Appellant had not been subject to an adverse action, ... or termination ..., less any compensation Appellant earned or might reasonably have earned in private or public employment during the period the action or rejection was improperly in effect. [¶] (B)

Back pay serves to make an employee whole for the employer's wrongdoing. ( Davis v. Los Angeles Unified School Dist. Personnel Com. (2007) 152 Cal.App.4th 1122 , 1133, 62 Cal.Rptr.3d 69 .) " ' "The appropriate standard for the measurement of a back pay award is to take the difference between the actual wages earned and the wages the individual would have earned in the position that, but for the [employer's wrongful conduct], the individual would have [held]." ' " (

Even though the term, "compensation," alone, can be construed broadly to include compensation that is not salary, we conclude the legislature intended to limit the scope of the term used within the section 19584 definition of salary by preceding the term, "compensation," with the limiting terms, "special salary." By doing so, the statute narrows the category of recoverable compensation to income paid for work performed. We therefore conclude section 19584, as currently written, does not allow gross-up recovery for increased tax liability as a recoverable category of damages. Furthermore, it is not within this court's authority to add to section 19584 this additional category of recoverable compensation, because it is not encompassed by the statutory language, "other special salary compensation."

We also disagree with the dissent's view that Barber's increased tax liability constitutes "sufficiently predictable" salary compensation. ( § 19584.) Barber's increased tax liability is not "predictable." We recognize that it is foreseeable that back pay awards will be taxed, and there normally is no tax exemption or ability to spread tax liability beyond the year the lump sum

The legislative history shows that section 19584 was amended in 1994 for the purpose of clarifying the meaning of "salary" and the scope of back pay recovery. The Assembly Commission on Public Employees' analysis described Senate Bill 846, amending section 19584 as: "Defines 'back salary' to mean [such] compensation items as merit salary adjustments, shift differentials and other special differentials or compensation if the back pay is sufficiently predictable. The current version of this bill deletes overtime compensation as a part of 'back salary.' " (Assem. Com. on Public Employees, Retirement and Social Security, Analysis of Sen. Bill No. 846, supra , as amended Apr. 28, 1994, p. 2; see Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Sen. Bill No. 846, supra , Aug. 12, 1994, pp. 5-6; see also Martin , supra , 227 Cal.App.4th at p. 1260, 174 Cal.Rptr.3d 471 .)

The Assembly Ways and Means Commission analysis of Senate Bill 846 added that, "[e]xpanding the definition of benefits to include back pay for employees who win adverse action appeals would not result in significant new costs . This would merely codify current practice." (Analysis of Sen. Bill No. 846, supra , as amended Apr. 28, 1994, italics added; see also Martin , supra , 227 Cal.App.4th at p. 1260, 174 Cal.Rptr.3d 471 .) Because significant new costs were not anticipated, it is unlikely the Legislature contemplated or intended that the new language defining "salary" would include increased tax liability recovery. Otherwise, the legislative budgetary analysis would likely have mentioned the anticipated increased cost of allowing increased tax liability recovery.

Until the final August 26, 1994, amendment of Senate Bill 846, the relevant provisions of the bill were described by the Senate Rules Committee under the title,

This legislative history of section 19584 does not indicate that the Legislature intended that section 19584, as amended, include recovery for increased tax liability arising from a lump sum back pay award. While there is mention in the analyses of section 19584 of intent to make a reinstated employee whole by paying back pay and benefits, the language and history of the statute do not support the conclusion that the Legislature intended that making the employee whole included paying the employee's increased tax liability. Had the legislature intended to allow for such recovery, the legislature could have expressly added it.

In effect, Barber urges this court to judicially amend section 19584 to add recovery not provided in section 19584. "Doing so 'invite[s] this court to legislate a statutory amendment by implication in violation of the separation of powers. Courts routinely construe statutes enacted by the Legislature in their role as interpreters of the law.... We may not usurp the function of the Legislature by adopting an amendment to the same statute by implication where no amendment was intended.' " ( Blankenship v. Allstate Ins. Co. (2010) 186 Cal.App.4th 87 , 100, 111 Cal.Rptr.3d 528 , quoting Bullard v. California State Automobile Assn. (2005) 129 Cal.App.4th 211 , 221, 28 Cal.Rptr.3d 225 .) Barber's request for increased tax liability recovery can be more appropriately addressed by the state Legislature by amending section 19584, or by Congress and/or the state Legislature enacting tax laws eliminating income tax liability for lump sum back pay awards, or by the CDCR employees' union and the Department of Personnel Administration, through negotiations, adding increased tax liability recovery to the memorandum of understanding covering CDCR employees.

We conclude Barber was made whole to the extent permissible under section 19584, and SPB was not authorized to provide any additional recovery beyond that, even if it leaves Barber with uncompensated collateral

In Swepston , supra , 195 Cal.App.3d at page 94, 240 Cal.Rptr. 470 , the court held

Barber argues that even if section 19584 does not expressly provide authority for recovery of increased tax liability damages, he nevertheless is entitled to such recovery based on language in section 19582, authorizing SPB to "render the decision that in its judgment is just and proper." ( Martin , supra , 227 Cal.App.4th at p. 1258, 174 Cal.Rptr.3d 471 .) This language

There is a split among the federal courts as to whether a plaintiff is entitled under federal law to increased tax liability recovery resulting from a lump sum award. In the 2017 Ninth Circuit Court of Appeals decision, Clemens , supra , 874 F.3d 1113 , the plaintiff employee prevailed on a Title VII discrimination claim. The plaintiff argued that, in addition to back pay and benefits, he was entitled to be made whole by receiving recovery for increased tax liability from receiving a lump sum back pay award. The Clemens plaintiff asserted that "the taxman's expanded cut effectively denies him what Title VII promises-full relief that puts Clemens where he would be had the unlawful employment discrimination never occurred." ( Id . at p. 1116.) The Clemens court vacated the lower court ruling denying the plaintiff recovery for increased tax liability and remanded the matter for further proceedings. ( Id. at p. 1115.)

The Clemens court noted that it was not the first tribunal to consider whether to award the plaintiff employee damages for increased tax liability. The Third, Seventh, and Tenth Circuits "held that district courts have the discretion to 'gross up' an award to account for income-tax consequences." ( Clemens , supra , 874 F.3d at p. 1116 ; see Sears v. Atchison, Topeka & Santa Fe Ry. Co. (10th Cir. 1984) 749 F.2d 1451 , 1456 [court upheld award for increased tax liability, given a district court's "wide discretion in fashioning remedies to make victims of discrimination whole."]; Eshelman v. Agere Systems, Inc. (3d Cir. 2009) 554 F.3d 426 , 440-441 [terminated employee, who sued employer under the ADA, is entitled to award offsetting increased

In discussing whether the plaintiff in Ofsevit was entitled to back pay, the Supreme Court discussed in a footnote the public policy of making a reinstated employee whole: "We note that a plethora of statutory provisions both in California and elsewhere demonstrates a general policy in favor of full back pay awards even in the absence of constitutional violations. Thus, for example, under the National Labor Relations Act, even an at-will employee who is improperly dismissed is entitled to

Under well-established rules of constitutional construction, we conclude neither federal nor state law provides authority for awarding Barber increased tax liability recovery. "Unlike the federal Constitution, which is a grant of power to Congress, the California Constitution is a limitation or restriction on the powers of the Legislature. [Citations.] Two important consequences flow from this fact. First, the entire law-making authority of the state, except the people's right of initiative and referendum, is vested in the Legislature, and that body may exercise any and all legislative powers which are not expressly or by necessary implication denied to it by the Constitution . [Citations.] In other words, 'we do not look to the Constitution to determine whether the legislature is authorized to do an act, but only to see if it is prohibited.' [Citation.] [¶] Secondly, all intendments favor the exercise of the Legislature's plenary authority : 'If there is any doubt as to the Legislature's power to act in any given case, the doubt should be resolved in favor of the Legislature's action. Such restrictions and limitations [imposed by the Constitution] are to be construed strictly, and are not to be extended to include matters not covered by the language used." (

Because this is a question of statutory construction, I begin with the language of the provision governing the compensation of reinstated government employees. "Whenever the board revokes or modifies an adverse action and orders that the employee be returned to his or her position, it shall direct the payment of salary and all interest accrued thereto, and the reinstatement of all benefits that otherwise would have normally accrued. 'Salary' shall include salary, as defined in Section 18000, salary adjustments and shift differential, and other special salary compensations, if sufficiently predictable." ( Gov. Code, § 19584, unlabeled statutory citations refer to this code.)

Because "salary" is defined by the statute, we don't apply the ordinary meaning of the term. Instead, following the definition, we treat "salary" as having the following components: salary as defined in section 18000, "salary adjustments," "shift differential," and "other special salary compensations, if sufficiently predictable." Section 18000 defines salary as "[t]he salary fixed by law." Salary adjustments are incremental increases in salary-merit-based, automatic, or discretionary-that an employee may receive within the salary range established for a position. (§§ 19829 [salary ranges]; 19832 [merit salary adjustments]; 19834 [automatic salary adjustments]; 19836 [adjustments to address inequity, recruiting problems, extraordinary qualifications].) Shift differential pay is a premium paid to employees for working certain nonstandard and less desirable shifts. ( Huntington Memorial Hospital v. Superior Court (2005) 131 Cal.App.4th 893 , 898, 32 Cal.Rptr.3d 373 ; Vector Resources, Inc. v. Baker (2015) 237 Cal.App.4th 46 , 51, 187 Cal.Rptr.3d 574 .)

None of these components of salary could, even arguably, extend to allow the kind of gross-up award Barber seeks. Only the category "other special salary compensations" may be broad enough to encompass such relief. Thus, the question we face is whether payments to an employee to compensate them for additional taxes they're required to pay on a lump sum back pay award qualifies as a special salary compensation. My disagreement with the majority reduces to a single word. They interpret "compensations" as referring to payments an employee earns for work . Since gross-up awards are not payments earned through work, but rather payments ordered to compensate for income lost by operation of the tax laws, the majority concludes such awards aren't authorized by the statute.

The majority complains I would expand the court's authority by "add[ing] to section 19584 this additional category of recoverable compensation." (Maj. opn. at p. 483.) This rhetoric is empty and unnecessary. It is our job as a court to interpret statutes in a way that is true to their plain meaning and puts their purpose into effect. ( Searle v. Allstate Life Ins. Co. (1985) 38 Cal.3d 425 , 449, 212 Cal.Rptr. 466 , 696 P.2d 1308 .) Where the text and the purpose support a broad interpretation, we should follow the Legislature's lead. Adopting a hyper-narrow interpretation of such a statutory provision-as the majority does here-isn't a recognition of the limits of our authority, but an erroneous trimming of the statute, in this case one which leaves the purpose of the statute on the cutting room floor.

The government respondents argue allowing gross-up awards would have far-reaching consequences for the state budget. "The statewide implication of imprinting

The majority disagrees tax gross-up awards would be predictable, but only by equivocating. The point of the restriction is to bar recovery for injuries that are too speculative from the point of view of a factfinder at trial. ( Department of Corrections & Rehabilitation v. State Personnel Bd. (2014) 227 Cal.App.4th 1250 , 1264, 174 Cal.Rptr.3d 471 [holding it was sufficiently predictable a reinstated employee would have received merit salary increases to include them in the damages for wrongful termination].) But the majority reads "sufficiently predictable" as limiting recovery to injuries that are foreseeable by the wrongdoer at the time they violate a plaintiff's constitutional rights. That's the wrong focus entirely, and is out of keeping with the general rule in tort recovery that foreseeability is immaterial to tort damages. (6 Witkin, Summary of Cal. Law (11th ed. 2018) Torts, § 1343, p. 649.)

Barber estimated his increased tax liability in proceedings below. However, because neither the SPB nor the trial court adjudicated the matter, I would reverse the order denying Barber's writ of mandate and order the trial court to direct the SPB to hold a hearing on the appropriate amount of a gross-up award in his case.