Justia Arizona Supreme Court Opinion Summaries

Articles Posted in Labor & Employment Law
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The Supreme Court held that a one-time payout for accrued sick leave does not form part of an employee's compensation for purposes of calculating that employee's pension benefit.The City of Phoenix paid pension benefits to eligible retiring employees, and the amount of that benefit partly depended on the employee's highest average annual compensation paid over a multi-year period. The City also paid employees for unused accrued sick leave upon retirement. Petitioners brought this action alleging that the City violated their constitutional rights by not considering accrued sick leave payouts upon retirement as pensionable compensation. The trial court entered judgment in favor of Petitioners, ruling that Petitioners had common law and constitutional rights to have one-time payouts for accrued sick leave included in the calculation of the employee's average compensation. The Supreme Court reversed, holding that one-time payouts for accrued sick leave upon retirement are not salary or wages because they are not paid annually or at regular intervals. View "Piccioli v. City of Pheonix" on Justia Law

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The Supreme Court held that a one-time payout for unused vacation leave does not form part of an employee's compensation for purposes of calculating that employee's pension benefit.The City of Phoenix paid pension benefits to eligible retiring employees. The amount of that benefit partly depended on the employee's highest average annual compensation paid over a multi-year period, and the City also paid for unused accrued vacation leave upon retirement or separation from employment. Petitioners sued the City alleging that the City violated their constitutional rights by not using one-time accrued vacation leave payouts in calculating employees' final average compensation. The trial court granted summary judgment for the City. The Supreme Court affirmed, holding that one-time payouts for accrued vacation leave are not pensionable salary or wages. View "American Federation of State County & Municipal Employees AFL-CIO Local 2384 v. City of Phoenix" on Justia Law

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At issue in this case was the correct interpretation of Ariz. Rev. Stat. 23-750(E)(5), which provides that income earned by any individual who performed certain services while employed by an entity that provides such services to or on behalf of an "educational institution" cannot be used to qualify for unemployment during breaks between academic terms if that person is guaranteed reemployment.Plaintiffs were employees of Chicanos For La Cause (CPLC), a nonprofit corporation that administered federally funded Early Head Start and Migrant Seasonal Head Start programs and provided services to help school districts comply with their obligations under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. When the summer break began, Plaintiffs applied for unemployment insurance benefits from Arizona Department of Economic Security (ADES), which granted benefits. The ADES Appeals Board reversed. The Supreme Court remanded the case to ADES to award unemployment benefits to two plaintiffs and for further proceedings to resolve the claims of the remaining plaintiffs, holding that section 23-750(E)(5) applies to plaintiffs only if they performed services for CPLC that CPLC supplied to the school districts. View "Rosas v. Arizona Department of Economic Security" on Justia Law

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In this case concerning the administration of the Arizona State Retirement System (ASRS) the Supreme Court held that the requirement to submit a retirement application for receipt of retirement benefits pursuant to Ariz. Rev. Stat. 38-757(A) does not violate Ariz. Const. art. XXIX, 1(D) and that all conditions listed in Ariz. Rev. Stat. 38-764(A) must be satisfied in order to elect a retirement date under the ASRS Plan.Plaintiff began her Plan-qualified employment in 1978 and became eligible for a normal retirement in 2005. In 2016, Plaintiff submitted an application for retirement, listing 2005 as her date for commencing retirement. The ASRS Agency rejected that date and instead used the 2016 date as Plaintiff's retirement date. After unsuccessfully pursuing administrative remedies, Plaintiff sought judicial review in superior court. The court affirmed the Agency's decision. The Supreme Court affirmed, holding (1) the Plan processed Plaintiff's retirement date as provided for in statute and calculated her chosen monthly life annuity benefit as required; and (2) therefore, the Plan complied with section 38-757(A), and no forfeiture, impairment, or diminishment of Plaintiff's normal retirement benefits occurred in violation of article 29, section 1(D) of the Arizona Constitution. View "Lagerman v. Arizona State Retirement System" on Justia Law

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The Supreme Court set aside an administrative law judge's (ALJ) denial of Gilbert Aguirre's workers' compensation claim for benefits, holding that a claimant does not waive appellate review of the legally sufficiency of findings before the Industrial Commission of Arizona (ICA).In Post v. Industrial Commission of Arizona, 160 Ariz. 4, 7-9 (1989), the Supreme Court held that when an ALJ fails to make findings on all material issues necessary to resolve the case the award is legally deficient and must be set aside. In this case, after an ALJ denied Aguirre's claim for benefits he filed a request for administrative review. In his request, Aguirre did not specifically challenge the ALJ's failure to make material findings as required by Post. The ALJ summarily affirmed the award. The court of appeals set aside the award based on the absence of legally-sufficient findings. At issue on appeal was whether, because Aguirre did not challenge the lack of material findings required by Post in his request for review, Appellant waived appellate review on that issue. The Supreme Court disagreed, holding that the ALJ's award was legally deficient and must be set aside regardless of whether Aguirre raised the issue. View "Aguirre v. Industrial Commission of Arizona" on Justia Law

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At issue was whether Arizona’s automatic assignment provision in Ariz. Rev. Stat. 23-1023(B) applies when an employee receives workers’ compensation benefits under another state’s laws. The Supreme Court held that the law of the state in which the employee’s workers’ compensation is paid determines the assignment rights of the employer and employee, thus reversing the superior court’s grant of summary judgment in favor of the third-party tortfeasor in this case.Plaintiff, a South Carolina resident, was employed as a semi-trick driver with a Nebraska limited liability company, which, in turn, contracted with Defendant, an Arizona company, to provide training for Plaintiff in Arizona. Plaintiff was a passenger in a semi-truck driving by Defendant’s employee was the truck rolled, injuring Plaintiff. Plaintiff received workers’ compensation in Nebraska paid for by the LLC. Plaintiff then filed this personal injury action against Defendant. The Supreme Court granted summary judgment in favor of Defendant, concluding that, pursuant to section 23-1023(B), Plaintiff had no legal interest in the action. The Supreme Court reversed, holding (1) because Plaintiff received workers’ compensation benefits in Nebraska, Nebraska’s law regarding assignment applied to her claims against Defendant in this action; and (2) because Nebraska does not have an automatic assignment provision, Plaintiff had a legal interest in those claims. View "Jackson v. Eagle KMC LLC" on Justia Law

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At issue in this workers’ compensation case was whether, when a worker settles a claim against a third party for less than the limits of the third party’s insurance, the worker may obtain a judicial determination of whether the insurance carrier’s lien should be reduced to account for the employer’s comparative fault.Victor Leija died during the course of his employment. Victor’s family claimed workers’ compensation benefits through Twin City Fire Insurance Company, Victor’s employer’s workers’ compensation carrier. Twin City accepted the claim. The Leijas also filed a negligence action against third parties who allegedly negligently caused Victor’s death. Meanwhile, Twin City asserted its right under Ariz. Rev. Stat. 23-1023(D) to fully enforce a lien against all settlement proceeds to the extent of past and future workers’ compensation benefits. After the Leijas and the third-party defendants settled, Twin City filed this action to fully enforce its lien. The Leijas counterclaimed, requesting that the superior court set a trial to establish the employer’s proportionate fault and the resulting amount of Twin City’s lien. The superior court ruled in Twin City’s favor. The Supreme Court affirmed, holding that a claimant who settles all third-party claims is not entitled to a post-settlement trial to determine the percentage of employer fault solely to reduce or extinguish the insurance carrier’s lien. View "Twin City Fire Insurance Co. v. Leija" on Justia Law

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Proposition 206, “The Fair Wages and Healthy Families Act,” which increased the minimum wage and established earn paid sick leave, does not violate the Arizona Constitution’s Revenue Source Rule, Separate Amendment Rule, or Single Subject Rule.Proposition 206 was approved by the Arizona electorate in the November 2016 election. The Proposition increases Arizona’s minimum wage incrementally over a three-year period and then requires annual increases. It also requires employers to provide mandatory sick leave of one hour for every thirty hours worked. Petitioners filed suit seeking a declaration that Proposition 206 is unconstitutional and also sought to preliminarily enjoin implementation and enforcement of the Proposition. The superior court denied a preliminary injunction. Petitioner subsequently sought special action relief with the Supreme Court. The Supreme Court denied relief, holding that Proposition 206 does not violate the identified provisions in the Arizona Constitution. View "Arizona Chamber of Commerce v. Honorable Daniel J. Kiley" on Justia Law

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In this employment dispute, Employee filed an action in superior court alleging an unjust enrichment claim against Employee. Employee moved to compel arbitration under the parties’ employment contract’s arbitration provision and brought a claim for severance pay. The superior court granted the motion. Employer asserted various counterclaims. The arbitrator ruled in favor of Employer, finding that Employer properly rescinded the contract based on Employee’s underlying misrepresentations and omissions. The final arbitration award fully settled all claims and counterclaims submitted. The superior court confirmed the award but also granted Employer leave to amend its complaint to reassert its counterclaims. The superior court granted Employer’s motion to amend its complaint. The Supreme Court reversed, holding that Employer, having not specifically challenged the contract’s arbitration provision, may not amend its complaint and litigate its various claims against Employee in this action. View "Hamblen v. Honorable Ralph Hatch" on Justia Law

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The Arizona State Retirement System (ASRS) operates a defined-benefit plan for state employees and participating political subdivisions. The City of Chandler operated a deferred-compensation plan in which it contributed money for its employees and permitted employees to defer additional amounts, which were held in trust until distributed to employees, generally at age seventy and one-half. Mary Wade and Marla Paddock, City employees, filed a complaint against ASRS and others on behalf of themselves, arguing that City-contributed payments into the deferred-compensation-plan trust constituted “compensation” for the purpose of calculating ASRS contributions and benefits. The trial court entered summary judgment in favor of the City. The court of appeals reversed, concluding that the term “salary” included the City’s regular contributions to the deferred-compensation-plan. The Supreme Court largely affirmed, holding that the City’s contractually required contributions into the deferred-compensation-plan trust for the benefit of its employees formed part of their salary and was “compensation” under Ariz. Rev. Stat. 38-711(7). View "Wade v. Arizona State Retirement System" on Justia Law