Goyette & Associates Reaches Settlement Agreement with CalHR For Employee Overpayment Collection Claim

Goyette & Associates has reached a settlement agreement with the California Department of Human Resources (CalHR) on behalf of an employee who filed a claim alleging that CalHR wrongfully collected salary earned and collection of an alleged overpayment was unlawfully delayed.

In a typical voluntary transfer from one classification to another, a state employee must complete a probationary period. During that time, an employee may be rejected from the transfer, and returned to his or her prior classification. If the rejection was improper, an employee can appeal, and if successful, he or she will be reinstated. Finally, the state is directed by the Government Code to reimburse that employee salary he or she should have earned, but for the improper rejection.

However, as alleged in the Petition filed by Goyette & Associates attorney Sarah Chesteen, the California Department of Human Resource actually collected from the Petitioner salary he legitimately earned during an improper rejection. In the unusual situation, Petitioner’s transfer was to a lower paying position. CalHR actually collected the surplus salary earned by Petitioner during the improper rejection, claiming that it was “as if” Petitioner had been working the lower paying position the entire time. The Petition argued that CalHR’s collection of salary earned was not authorized in these circumstances, and violated the duty to pay employees as set forth in the salary schedule, as well as the obligation to provide like-pay for like-work, and was a breach of implied contract.

The Petition further argued that the collection was not only unauthorized, but CalHR made a onetime partial collection, then waited five years before collecting the remaining amount. As collection of any alleged overpayments must be initiated within 3 years after the alleged overpayment, the Petition alleged that CalHR violated its duty to collect within a reasonable time pursuant to its own procedures.

CalHR denied liability and a settlement was reached to compromise the disputed claim whereby the Petitioner agreed to dismiss the claim in exchange for full payment of the amount collected, plus a portion of attorney’s fees.

By Sarah Chesteen

Posted in Civil Litigation: Employee Representation, Firm News, G&A's Newsletter, Labor and Employment Law Affecting Public Employee Associations, Sarah Chesteen, Trial Outcomes in State and Federal Court, Wage and Hour Legal Issues Affecting Employees and Employers | Tagged , , , , , , | Comments Off

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