Two Recent Decisions Show How Discipline Can Complicate Disability Retirement

JASON JASMINE
Founding Partner
Messing Adam Jasmine & Shore, LLP

Industrial disability retirement (IDR) — a benefit available to public safety officers such as peace officers, correctional officers and firefighters who must retire due to a disability — can be a very lucrative benefit. A peace officer can receive up to 50% of their salary tax-free for the rest of their life (and if, upon becoming eligible for a service retirement, that service retirement would be for more than 50% of their salary, then the amount above 50% can still be received, though that portion would be taxed). In some cases, over the course of a peace officer’s post-retirement lifetime, this benefit can be worth millions of dollars.

Two recent decisions, one from the Office of Administrative Hearings and another from the California Court of Appeal, highlight an issue that peace officers occasionally face when discipline and disability retirement collide. Taken together, these decisions illustrate how complicated the interaction between disciplinary separation and IDR can be — and why peace officers should be cautious when making employment decisions while facing discipline.

The first decision involves a former Cal Fire captain/paramedic who resigned after receiving a notice of adverse action (NOAA) proposing termination (Thompson). The firefighter later applied for IDR based on conditions including PTSD and orthopedic injuries. CalPERS canceled the application, arguing that under the long-standing rule in Haywood v. American River Fire Protection District (1998) 67 Cal.App.4th 1292, employees who are terminated for cause, or who effectively separate from employment because of discipline, may be barred from disability retirement.

In that case, the administrative law judge (ALJ) disagreed with CalPERS. The ALJ concluded that because the firefighter resigned before the termination took effect and did not enter into any agreement permanently barring him from returning to Cal Fire, his employment relationship had not been legally severed in the way required by Haywood. As a result, the judge ruled that CalPERS had not met its burden of proving that the firefighter was ineligible even to apply for IDR. The appeal was granted, and the firefighter was allowed to proceed with the disability retirement process.

Viewed in isolation, that decision might suggest that resignation during a disciplinary process does not necessarily eliminate the right to pursue disability retirement. However, that decision is not the final word. The proposed decision is currently being challenged within the CalPERS administrative process, and it remains to be seen whether the CalPERS Board will adopt, modify or reject the ALJ’s reasoning. Until that process plays out, the decision should be viewed as an important but unsettled interpretation of the law.

Further, a second decision, this one from the California Court of Appeal, points in a different direction and will likely carry greater legal weight both because it is the decision of a California Court of Appeal and because it is seemingly more consistent with precedent.

In Monroe v. California Public Employees’ Retirement System (February 18, 2026, B345865) Cal. Ct. App. 2nd Dist., a state parole agent retired while under investigation for misconduct and later sought disability retirement benefits. The Court of Appeal affirmed CalPERS’s denial of the claim, holding that the employee’s retirement while facing discipline constitutes a complete severance of the employment relationship, eliminating the ability to return to service if the disability later resolves. That ability is a key prerequisite for disability retirement.

The court emphasized that disability retirement under the Public Employees’ Retirement Law is premised on the continuing possibility that an employee could be reinstated if they later recover from the disabling condition. When an employee leaves service under circumstances tied to misconduct, that possibility can be extinguished. In those situations, the court held that the employee is no longer eligible to seek disability retirement as a matter of law.

Because Monroe is a published decision from the California Court of Appeal, it will likely be given greater weight than the Thompson proposed decision (even if Thompson is upheld) when CalPERS and courts evaluate similar disputes going forward.

For peace officers, the practical takeaway is that the facts surrounding separation from employment can be decisive. Whether a member resigns, retires, settles a disciplinary case or is terminated can affect whether disability retirement remains available. In particular, resignations or retirements that occur during investigations or disciplinary proceedings may later be characterized as a permanent severance of the employment relationship.

These decisions reinforce a simple but important message: If you are facing discipline while also dealing with a potential work-related medical or psychological condition, involve a representative immediately. The timing and structure of separation from employment can determine whether IDR rights are preserved — or permanently lost.

About the Author

Jason Jasmine is a founding partner of Messing Adam Jasmine & Shore (MAJS). MAJS is a full-service labor firm specializing in the representation of peace officers, whose team includes some of the most experienced industrial disability retirement (IDR) attorneys in the state of California dealing with IDR applications and appeals under the ’37 Act systems, CalPERS and major municipal retirement systems.