2014 WI 130
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP2466
COMPLETE TITLE: Suzanne Stoker and Wisconsin Federation of
Nurses and
Health Professionals , Local 5001, AFT, AFL-CIO,
Plaintiffs-Respondents,
v.
Milwaukee County,
Defendant-Appellant-Petitioner,
Milwaukee County Pension Board,
Defendant-Co-Appellant-Petitioner.
REVIEW OF A DECISION OF THE COURT OF APPEALS
(Reported at 352 Wis. 2d 125, 841 N.W.2d 532)
(Ct. App. 2013 – Published)
PDC No.: 2013 WI App 144
OPINION FILED: December 19, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: October 1, 2014
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Milwaukee
JUDGE: William S. Pocan
JUSTICES:
CONCURRED:
DISSENTED: BRADLEY, J., ABRAHAMSON, C.J., dissent. (Opinion
filed.)
NOT PARTICIPATING:
ATTORNEYS:
For the defendant-appellant-petitioner, there were briefs
by Alan M. Levy and Lindner & Marsack, S.C., Milwaukee, and oral
argument by Alan M. Levy.
For the defendant-co-appellant-petitioner, there were
briefs by Beth Ermatinger Hanan and Gass Weber Mullins LLC,
Milwaukee, and oral argument by Beth Ermatinger Hanan.
For the plaintiffs-respondents, there was a brief by
Jeffrey P. Sweetland and Hawks Quindel, S.C., Milwaukee. Oral
argument by Jeffrey P. Sweetland.
2
2014 WI 130
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP2466
(L.C. No. 11CV18550)
STATE OF WISCONSIN : IN SUPREME COURT
Suzanne Stoker and Wisconsin Federation of
Nurses and Health Professionals, Local 5001,
AFT, AFL-CIO,
Plaintiffs-Respondents, FILED
v.
DEC 19, 2014
Milwaukee County,
Diane M. Fremgen
Clerk of Supreme Court
Defendant-Appellant-Petitioner,
Milwaukee County Pension Board,
Defendant-Co-Appellant-Petitioner.
REVIEW of a decision of the Court of Appeals. Reversed
and remanded.
¶1 ANNETTE KINGSLAND ZIEGLER, J. This is a review of a
published decision of the court of appeals1 affirming the
Milwaukee County Circuit Court's2 order granting summary judgment
1
Stoker v. Milwaukee Cnty., 2013 WI App 144, 352
Wis. 2d 125, 841 N.W.2d 532.
2
The Honorable William S. Pocan presided.
No. 2012AP2466
and declaratory and injunctive relief to Suzanne Stoker
("Stoker")3 and her labor union, the Wisconsin Federation of
Nurses and Health Professionals, Local 5001, AFT, AFL–CIO ("the
Federation"). The suit was filed against the respondents,
Milwaukee County and the Milwaukee County Pension Board ("the
Pension Board"). We reverse and remand this matter to the
circuit court to dismiss the complaint.
¶2 Milwaukee County calculates pension payments for its
retired employees by multiplying a retiree's final average
salary4 by a certain percentage known as a multiplier, and the
resulting number is then multiplied by the retiree's total years
of county service. When Stoker's county service began, a 1.5%
multiplier applied to her service. In 2000 Milwaukee County
3
Stoker filed this suit on behalf of all similarly situated
Milwaukee County employees. References to Stoker will refer to
this class of employees unless the context clearly indicates
otherwise.
4
Milwaukee County, Wis. General Ordinance ("M.C.G.O.")
§ 201.24(2.8) (2000) provides in relevant part:
Final average salary for a member whose continuous
membership began after January 1, 1982, means the
average annual earnable compensation for the five (5)
consecutive years of service during which the member's
earnable compensation was the highest, or, if he
should have less than five (5) years of service, then
his average annual earnable compensation during such
period of service. However, when a member is employed
by the state but paid partly by the county, his final
average salary with respect to any period of
employment solely by the county shall be the average
earnable compensation for the three (3) or five (5)
consecutive years respectively of such service during
which his earnable compensation was the highest.
2
No. 2012AP2466
passed an ordinance that increased the multiplier from 1.5% to
2% for service rendered on and after January 1, 2001. Milwaukee
County, Wis. General Ordinance ("M.C.G.O.") § 201.24(5.15)(1)(a)
(2000).5 In 2011, consistent with the terms of a collective
bargaining agreement with the Federation, Milwaukee County
passed an ordinance that reduced the multiplier from 2% to 1.6%
for all county service performed on and after January 1, 2012,
the effective date of the ordinance. M.C.G.O.
§ 201.24(5.1)(2)(f) (2011). The 2% multiplier continued to
apply to service rendered by Stoker from 2001 through 2011.
¶3 Stoker argues that this reduction of the multiplier is
a breach of contract because she had a vested right to have the
2% multiplier apply to her post-2011 county service and because
she did not personally consent to the reduction. Milwaukee
County and the Pension Board argue that the reduction is
authorized because Stoker had no vested right to have the 2%
multiplier apply to her post-2011 county service. The Pension
Board further argues that even if she had such a right, the
Federation lawfully consented to the reduction on Stoker's
behalf by ratifying the collective bargaining agreement that
agreed to reduce the multiplier from 2% to 1.6% for post-2011
service.
5
Technically, this ordinance provided a 0.5% multiplier in
addition to the 1.5% multiplier that applied under M.C.G.O.
§ 201.24(5.1). Thus, these two ordinances combined provided a
2% multiplier.
3
No. 2012AP2466
¶4 We conclude that Milwaukee County did not breach the
contract with Stoker when it amended the pension multiplier from
2% to 1.6%. The amendment did not breach Stoker's contractual
right to retirement system benefits earned and vested because it
had prospective-only application to future service credits not
yet earned, specifically, on and after January 1, 2012. We
conclude that the legislature preserved Stoker's rights and
benefits already accrued but also gave Milwaukee County home
rule authority with the flexibility to enact such prospective-
only changes. We conclude that Stoker does not have a vested
right to have the 2% multiplier apply to her then-unearned post-
2011 service. In other words, Milwaukee County could so amend
the formula and apply it prospectively because that prospective
application does not "diminish or impair" benefits accrued from
service credits already earned. Because we conclude that
Milwaukee County did have the ability to make these prospective-
only reductions of the multiplier without Stoker's personal
consent, we need not address whether the Federation lawfully
consented, on Stoker's behalf, to the reduction.
I. FACTUAL BACKGROUND
¶5 The relevant facts are not in dispute. In 1937 the
legislature required counties with populations of 500,000 or
more to develop retirement systems for their employees. Ch.
201, Laws of 1937.6 Pursuant to this law, the Milwaukee County
6
Section 1 of ch. 201, Laws of 1937 provided:
(continued)
4
No. 2012AP2466
Employees' Retirement System ("MCERS") was created on January 1,
1938. On May 14, 1945, the legislature required employee
benefits under MCERS to "be assured by benefit contracts." Ch.
138, Laws of 1945.7 The legislature also provided that "each
RETIREMENT SYSTEM IN POPULOUS COUNTIES;
DEFINITIONS. In each county having a population of
five hundred thousand or more a retirement system
shall be established and maintained for the payment of
benefits to the employes of such county and to the
widows and children of such employes, except employes
who are contributory to, participants in, or
beneficiaries of a pension fund in operation in the
state, or any municipal subdivision thereof. The
funds of the retirement system shall be derived,
administered and disbursed in accordance with the
provisions of this act. Except where the context
plainly requires a different meaning, the following
words and phrases shall have the following
meanings: . . . .
7
Chapter 138, Laws of 1945, provided in pertinent part:
Chapter 201, Laws of 1937, section 13a is created
to read:
(Chapter 201, Laws of 1937) Section 13a (1)
LEGISLATIVE POLICY. Employes have been attracted to
and have remained in the public service in counties of
more than 500,000 population despite the prevailing
higher wages in other employments because of the
deferred compensation for their services promised to
them in the form of retirement annuities and death
benefits in the retirement system to which they have
been admitted as contributing members. The purpose of
this act is to strengthen the public service in the
most populous counties of the state by establishing
the security of such retirement and death benefits.
(2) CONTRACTS TO ASSURE BENEFITS. The benefits
of members, whether employes in service or retired as
beneficiaries, and of beneficiaries of deceased
members in the retirement system created by chapter
(continued)
5
No. 2012AP2466
[MCERS] member and beneficiary having such a benefit contract
shall have a vested right to such annuities and other benefits
and they shall not be diminished or impaired by subsequent
legislation or by any other means without his consent." Id.
The legislature further provided that each MCERS member has a
201, laws of 1937, as amended, shall be assured by
benefit contracts as herein provided:
(a) Every such member and beneficiary shall be
deemed to have accepted the provisions of this act and
shall thereby have a benefit contract in said
retirement system of which he is such member or
beneficiary as of the effective date of this act
unless, within a period of 30 days thereafter, he
files with the board administering the system a
written notice electing that this act shall not apply
to him. The annuities and all other benefits in the
amounts and upon the terms and conditions and in all
other respects as provided in the law under which the
system was established as such law is amended and in
effect on the effective date of this act shall be
obligations of such benefit contract on the part of
the county and of the board administering the system
and each member and beneficiary having such a benefit
contract shall have a vested right to such annuities
and other benefits and they shall not be diminished or
impaired by subsequent legislation or by any other
means without his consent.
. . .
(c) Every future entrant who shall become a
member of this retirement system [MCERS] after the
effective date of this act shall have a similar
benefit contract and vested right in the annuities and
all other benefits in the amounts and on the terms and
conditions and in all other respects as provided in
the law under which the retirement system was
established as such law shall have been amended and be
in effect at the date of commencement of his
membership [in MCERS].
6
No. 2012AP2466
"vested right in the annuities and all other benefits in the
amounts and on the terms and conditions and in all other
respects as provided in the law under which [MCERS] was
established as such law shall have been amended and be in effect
at the date of commencement of his membership [in MCERS]." Id.
¶6 In 1957 the legislature provided that a member of
MCERS has a "vested right . . . to all increases in benefits
covered by amendments subsequent to the date his membership [in
MCERS] is effective." § 6, ch. 326, Laws of 1957.
¶7 In 1965 the legislature granted "home rule" authority
to Milwaukee County over MCERS. § 1, ch. 405, Laws of 1965.8
8
Section 1 of ch. 405, Laws of 1965 provided in relevant
part:
Chapter 155, laws of 1937, section 59.137 is
created to read:
(Chapter 155, laws of 1937) 59.137 PENSION STUDY
COMMISSION. (1) For the purpose of best protecting
the employes subject to this act by granting
supervisory authority over each benefit fund created
hereunder to the governmental unit most involved
therewith, it is declared to be the legislative policy
that the future operation of each such benefit fund is
a matter of local affair and government and shall not
be construed to be a matter of state-wide concern.
Each county which is required to establish and
maintain a benefit fund pursuant to this act is hereby
empowered by county ordinance, to make any changes in
such benefit fund which hereafter may be deemed
necessary or desirable for the continued operation of
such benefit fund, but no such change shall operate to
diminish or impair the annuities, benefits or other
rights of any person who is a member of such benefit
fund prior to the effective date of any such change.
7
No. 2012AP2466
This session law provided that "the future operation of each
[county] benefit fund is a matter of local affair and government
and shall not be construed to be a matter of state-wide
concern." Id. This law empowered Milwaukee County "to make any
changes in [its employee] benefit fund which hereafter may be
deemed necessary or desirable for the continued operation of
[MCERS]." Id. However, "no such change shall operate to
diminish or impair the annuities, benefits or other rights of
any person who is a member of [MCERS] prior to the effective
date of any such change." Id.
¶8 On or about December 17, 1981, Milwaukee County passed
an ordinance that applied a 1.5% pension benefit multiplier to
county service performed by an employee whose employment with
the County began after January 1, 1982. M.C.G.O. § 201.24(5.1)
(1981).9 Thus, under this ordinance, the pension payments for an
employee whose employment with the County began after January 1,
1982, were calculated by multiplying 1.5% by the employee's
final average salary, and the resulting number was multiplied by
the employee's total years of service with Milwaukee County.
Id.
9
This ordinance provided in relevant part: "A [MCERS]
member . . . other than a deputy sheriff or elected official,
whose continuous membership began after January 1, 1982, who
meets the requirements for a normal pension shall receive an
amount equal to one and one-half (1 1/2) percent of his final
average salary multiplied by the number of his years of
service . . . ."
8
No. 2012AP2466
¶9 On or about April 13, 1982, Stoker began employment
with Milwaukee County and thereby became a member of MCERS.
Stoker was a Milwaukee County employee and MCERS member
continuously since then and still was both when this lawsuit was
filed.
¶10 On or about November 2, 2000, Milwaukee County
increased the pension multiplier to 2% for county employees,
effective January 1, 2001. M.C.G.O. § 201.24(5.15) (2000).
This 2% multiplier applied to "all pension service credit earned
on and after January 1, 2001." Id. This 2% multiplier also
applied retroactively to eight years of service prior to
January 1, 2001, for each year of service performed after that
date.
¶11 In approximately May 2011, the Federation and
Milwaukee County negotiated the terms of a collective bargaining
agreement for January 1, 2012, through December 1, 2012. Under
the terms of the collective bargaining agreement, a pension
multiplier of 1.6% would apply to "all pension service credit
earned on and after January 1, 2012." On or about May 23, 2011,
the Federation ratified the collective bargaining agreement. On
or about June 23, 2011, Milwaukee County approved the collective
bargaining agreement. On or about July 28, 2011, Milwaukee
County implemented the collective bargaining agreement by
adopting an ordinance, which provided that a 1.6% pension
multiplier would apply to "service . . . rendered on and after
January 1, 2012." M.C.G.O. § 201.24(5.1)(2)(f) (2011). This
ordinance is the subject of this lawsuit.
9
No. 2012AP2466
¶12 By virtue of the ordinance adopted in 2000, the 2%
multiplier applied to all of Stoker's county service through
December 31, 2011. The ordinance at issue changed the
multiplier to 1.6% only with respect to Stoker's future,
unearned service rendered on and after January 1, 2012. To be
clear, the ordinance at issue did not affect the 2% multiplier
that applied to Stoker's vested retirement benefits earned
through December 31, 2011.
II. PROCEDURAL POSTURE
¶13 On December 16, 2011, Stoker and the Federation filed
suit in circuit court against Milwaukee County and the Pension
Board. Stoker sought relief declaring that the 2011 ordinance
that reduced the pension multiplier from 2% to 1.6% with respect
to post-2011 county service is invalid. Stoker also sought
injunctive relief requiring Milwaukee County and the Pension
Board to apply the 2% multiplier to Stoker's county service
performed on and after January 1, 2012, the effective date of
the ordinance. Stoker argued that the 2011 ordinance was a
breach of contract.10 Stoker, Milwaukee County, and the Pension
Board filed motions for summary judgment.
¶14 On July 11, 2012, the circuit court granted Stoker's
motion for summary judgment. The circuit court reasoned that,
10
Stoker also argued that the 2011 ordinance was an
impairment of contract and an uncompensated taking of property
in violation of Article I, Sections 12 and 13 of the Wisconsin
Constitution. Stoker later abandoned these arguments, which are
not before this court.
10
No. 2012AP2466
under ch. 138 of the Laws of 1945, Stoker had a vested
contractual right to retirement benefits since her employment
with Milwaukee County began. According to the circuit court,
this right includes the 2% multiplier.
¶15 Milwaukee County and the Pension Board appealed. On
November 14, 2013, the court of appeals affirmed.
III. STANDARD OF REVIEW
¶16 We independently review whether the circuit court
correctly granted summary judgment to Stoker. Tatera v. FMC
Corp., 2010 WI 90, ¶15, 328 Wis. 2d 320, 786 N.W.2d 810 (citing
Racine Cnty. v. Oracular Milwaukee, Inc., 2010 WI 25, ¶24, 323
Wis. 2d 682, 781 N.W.2d 88). Summary judgment "shall be
rendered if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Wis. Stat. § 802.08(2) (2011-
12).11
¶17 This case requires us to interpret county ordinances
and session laws. The rules for statutory interpretation apply
to our interpretation of an ordinance. Marris v. City of
Cedarburg, 176 Wis. 2d 14, 32, 498 N.W.2d 842 (1993) (citing
Cnty. of Columbia v. Bylewski, 94 Wis. 2d 153, 169 n.7, 288
N.W.2d 129 (1980)).
11
All subsequent references to the Wisconsin Statutes are
to the 2011-12 version unless otherwise indicated.
11
No. 2012AP2466
¶18 "Statutory interpretation is a question of law that
this court reviews de novo while benefiting from the lower
courts' analyses." Noffke ex rel. Swenson v. Bakke, 2009 WI 10,
¶9, 315 Wis. 2d 350, 760 N.W.2d 156 (citing Megal Dev. Corp. v.
Shadof, 2005 WI 151, ¶8, 286 Wis. 2d 105, 705 N.W.2d 645).
"[S]tatutory interpretation 'begins with the language of the
statute. If the meaning of the statute is plain, we ordinarily
stop the inquiry.'" State ex rel. Kalal v. Circuit Court for
Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110
(citations omitted). We give statutory language "its common,
ordinary, and accepted meaning, except that technical or
specially-defined words or phrases are given their technical or
special definitional meaning." Id. (citing Bruno v. Milwaukee
Cnty., 2003 WI 28, ¶¶8, 20, 260 Wis. 2d 633, 660 N.W.2d 656;
Wis. Stat. § 990.01(1)). We interpret statutory language in the
context of the statute in which it is used and in relation to
closely-related statutes. Id., ¶46 (citations omitted). We
interpret statutes to avoid absurd or unreasonable results. Id.
(citations omitted). If the statutory language is unambiguous,
we do not consult extrinsic sources of interpretation, such as
legislative history. Id. (citations omitted).
IV. ANALYSIS
¶19 Stoker argues that the Milwaukee County ordinance that
reduced the pension multiplier from 2% to 1.6% for post-2011
service does not apply to her because the County is barred from
making such prospective-only reductions to her vested retirement
benefits without her personal consent. Stoker relies heavily on
12
No. 2012AP2466
the session laws from 1945, 1957, and 1965 to support her
argument. In short, she argues that she is entitled to the most
favorable pension formula available during her employment.
Stoker asserts that when the County amended the formula to
reduce the multiplier from 2% to 1.6% for unearned benefits, it
served to "diminish or impair" her vested benefits.
¶20 Milwaukee County argues that the legislature has
endowed it with home rule authority to enact prospective changes
in the Milwaukee retirement system. The County argues that the
pension formula reduction and its prospective-only application
did not "diminish or impair" benefits already accrued for
pension service credits earned. The County contends that the
change does not "diminish or impair" Stoker's benefits because
any potential future benefit, due to future service, is not
vested until earned. The County asserts that under its home
rule authority, it has the authority to amend its unvested
pension plans with prospective-only application.
¶21 Because Milwaukee County reduced the multiplier only
prospectively, we first determine whether the County has the
legal right to reduce employee benefits on a prospective-only
basis. We next determine whether Stoker has a vested right to
have the 2% multiplier apply to her post-2011 service. Because
we conclude that Milwaukee County may prospectively reduce
unvested employee benefits and that Stoker has no vested right
to have the 2% multiplier apply to her post-2011 service, we do
not consider whether the Federation may consent on Stoker's
behalf to a prospective reduction of her vested benefits.
13
No. 2012AP2466
A. Whether Milwaukee County May Prospectively
Reduce an Employee Benefit
¶22 To determine whether Milwaukee County may
prospectively modify unvested benefits, we turn to the session
laws that govern MCERS. Chapter 138 of the Laws of 1945
provides that every member of MCERS has a "vested right in the
annuities and all other benefits in the amounts and on the terms
and conditions . . . in effect at the date of commencement of
his membership [in MCERS]." Similarly, ch. 326 of the Laws of
1957 provides each MCERS member with a "vested right . . . to
all increases in benefits covered by amendments subsequent to
the date his membership is effective." However, ch. 405 of the
Laws of 1965 gives to Milwaukee County home rule authority "to
make any changes in [its employee] benefit fund which hereafter
may be deemed necessary or desirable for the continued operation
of [MCERS]." Stoker notes that ch. 405 expressly limits this
home rule authority by stating that "no such change shall
operate to diminish or impair the annuities, benefits or other
rights of any person who is a member of [MCERS] prior to the
effective date of any such change."
¶23 Stoker interprets ch. 405 of the Laws of 1965 to allow
Milwaukee County to reduce benefits only with respect to persons
who began employment with Milwaukee County after the reduction
takes effect. Stoker reaches this interpretation by invoking
the canon of statutory construction known as the rule of the
last antecedent, arguing that "prior to the effective date of
any such change" modifies "who is a member" rather than
14
No. 2012AP2466
"annuities, benefits or other rights." Stoker thus argues that
ch. 405 forbids Milwaukee County from reducing a benefit of a
person whose county employment began prior to the effective date
of the reduction. We disagree.
¶24 The principle of interpreting statutes to avoid
unreasonable or absurd results is more compelling in this
instance than the rule of the last antecedent. See Kalal, 271
Wis. 2d 633, ¶46; Chickasaw Nation v. United States, 534 U.S.
84, 94 (2001) (quoting Circuit City Stores, Inc. v. Adams, 532
U.S. 105, 115 (2001)) (holding that canons of construction "'are
often countered . . . by some maxim pointing in a different
direction.'"). Stoker's interpretation of ch. 405 of the Laws
of 1965 would prohibit Milwaukee County from reducing a current
employee's expected, future benefits before they vest. That
interpretation is unreasonable because a right that is unvested,
by definition, can be taken away. See Black's Law Dictionary
1520 (10th ed. 2014) (A "vested right" is a "right that so
completely and definitely belongs to a person that it cannot be
impaired or taken away without the person's consent."); Neiman
v. Am. Nat. Prop. & Cas. Co., 2000 WI 83, ¶14, 236 Wis. 2d 411,
613 N.W.2d 160 ("The concept of vested rights is 'conclusory——a
right is vested when it has been so far perfected that it cannot
be taken away by statute.'") (quoting Charles B. Hochman, The
Supreme Court and the Constitutionality of Retroactive
Legislation, 73 Harv. L. Rev. 692, 696 (1960)). We therefore
conclude that ch. 405's limit on Milwaukee County's home rule
15
No. 2012AP2466
authority allows Milwaukee County to reduce a benefit that has
not vested prior to the effective date of the reduction.
¶25 Indeed, Stoker seems to recognize that ch. 405's grant
of home rule authority allows Milwaukee County to reduce a
current employee's expected, future benefits before they vest.
Specifically, Stoker argues that ch. 405 does not allow
Milwaukee County to reduce the 2% multiplier with respect to her
post-2011 service because her "right to the use of the 2%
multiplier as to future as well as past service was already 'in
existence'" when the multiplier was reduced. Thus, Stoker's
logic seems to acknowledge that ch. 405 would allow a
prospective reduction of the 2% multiplier if she did not have a
vested right to have the 2% multiplier apply to her post-2011
service.
¶26 Because Milwaukee County may prospectively reduce
benefits before they vest, our analysis turns on whether Stoker
has a vested right to the 2% multiplier for post-2011 service.
B. Whether Stoker Has a Vested Right to Have the 2% Multiplier
Apply to Her Post-2011 Service for Milwaukee County
¶27 Having determined that the home rule authority in ch.
405 of the Laws of 1965 allows Milwaukee County to prospectively
reduce benefits before they vest, we now determine whether
Stoker has a vested right to have the 2% multiplier apply to her
post-2011 service.
¶28 An employee benefit may be modified before it vests.
Loth v. City of Milwaukee, 2008 WI 129, ¶¶33-43, 315 Wis. 2d 35,
758 N.W.2d 766. In Loth, prior to 2004, the City of Milwaukee
16
No. 2012AP2466
offered premium-free health insurance to its employees that
reached age 60, were employed by the city for at least 15 years,
and retired. Id., ¶2. In 2002 the city amended this retirement
benefit to provide shared-premium-cost health insurance to
anyone who reached age 60, was employed by the city for at least
15 years, and retired after January 1, 2004. Id. Loth had 15
years of city service in 1999, and in 2005 he reached age 60 and
retired. Id. When Loth received shared-premium-cost health
insurance after retiring, he sued the city, arguing that he was
entitled to premium-free health insurance. Id., ¶3. He
reasoned that he reached 15 years of service when the premium-
free health insurance retirement benefit was in effect, and that
reaching 15 years of city service was the only requirement for
becoming entitled to this benefit. Id.
¶29 We upheld the city's modification of the retiree
health insurance benefit with respect to Loth. Id., ¶¶6-7. We
determined that the city made a unilateral contract offer of
premium-free retiree health insurance benefits, and that the
city modified the benefits before Loth became entitled to them
by accepting the offer. Id., ¶¶6, 14. We focused on the terms
and conditions of the benefits to determine how they could be
accepted by an employee and thus become an entitlement. Id.,
¶31. According to the terms and conditions of the city's health
insurance benefits for retirees, the benefits were accepted and
became an entitlement when an employee fulfilled three
requirements: being employed by the city for 15 years, reaching
age 60, and retiring. Id., ¶¶6, 16-29. Because Loth did not
17
No. 2012AP2466
"perform the requested acts" of reaching age 60 and retiring
while the premium-free health insurance benefit was in effect,
id., ¶14, he had no contractual right to this benefit. Id., ¶6;
see also id., ¶39 (Loth had no right to premium-free health
insurance upon retirement because "he had not fully performed
the services entitling him to such benefits when the City
amended [its] policy . . . ."). We distinguished cases that
rejected employers' attempts to reduce their employees' benefits
after they vested. Id., ¶¶32-46. Thus, Loth stands for the
principle that an employer may modify a benefit that has not
vested because its terms and conditions for entitlement have not
been satisfied.
¶30 To determine whether Milwaukee County reduced a vested
benefit of Stoker, we focus on the terms and conditions of the
multiplier. See id., ¶31; see also ch. 138, Laws of 1945
(stating that MCERS members have a vested right to benefits on
the "terms and conditions" of the benefits). The terms and
conditions of the 2% multiplier are located in Milwaukee County
ordinances and the collective bargaining agreement. The
ordinance that created the 2% multiplier stated that the 2%
multiplier applied to "all pension service credit earned on and
after January 1, 2001." M.C.G.O. § 201.24(5.15)(1)(a) (2000).12
Pension credit service is earned by rendering service for
Milwaukee County. M.C.G.O. App. B. § 301 (1980). The ordinance
12
This ordinance created a 2% multiplier by adding 0.5% to
the existing 1.5% multiplier. See supra note 5.
18
No. 2012AP2466
at issue provided that the 1.6% multiplier applied to
"service . . . rendered on and after January 1, 2012." M.C.G.O.
§ 201.24(5.1)(2)(f) (2011). Likewise, the collective bargaining
agreement adopted in 2011 provided that a 1.6% multiplier would
apply to "all pension service credit earned on and after
January 1, 2012." The plain language of these ordinances and
the collective bargaining agreement shows that the multiplier
accrues over time as county service is rendered, and the
multiplier is directly tied to that service. Because the
multiplier accrues as service is rendered, the home rule power
in ch. 405 of the Laws of 1965 allows Milwaukee County to reduce
the multiplier with respect to Stoker's service rendered after
the effective date of the reduction.
¶31 Other case law also supports our conclusions that the
multiplier accrues over time as service is rendered and that,
therefore, Milwaukee County may reduce the multiplier with
respect to service rendered after the reduction takes effect.
In Loth we discussed the court of appeals' decision in Champine
v. Milwaukee County, 2005 WI App 75, 280 Wis. 2d 603, 696
N.W.2d 245. Loth, 315 Wis. 2d 35, ¶¶44-46. We noted that the
court of appeals in Champine held that a "payout for accrued
sick leave represents a benefit that is 'earned as the work is
performed.' An employee accrues sick allowance (and may earn
the right to receive payout for the accrued sick allowance)
gradually as the employee performs his or her work." Id., ¶46.
¶32 In Champine, prior to 2000, Milwaukee County allowed
its non-union employees to receive the cash value of
19
No. 2012AP2466
approximately 400 hours of their unused sick leave upon
retirement. Champine, 280 Wis. 2d 603, ¶¶2-3. In 2000
Milwaukee County adopted an ordinance that allowed its non-union
employees to receive the cash value of all of their unused sick
leave upon retirement. Id. This ordinance did not have a start
date or end date. Id., ¶2. In February 2002 Milwaukee County
adopted an ordinance that limited non-union employees' sick-
leave payout at retirement to approximately 400 hours of unused
sick leave, effectively reinstating the limit in place prior to
2000. Id., ¶6. This February 2002 ordinance took effect on
March 15, 2002. Id.
¶33 The court of appeals held that the 2002 ordinance
lawfully limited the sick-leave payout benefit with respect to
sick leave that accrued after the limit took effect. Id., ¶¶15-
17. Specifically, the court held that the ordinance's
prospective reduction of the sick-leave payout benefit did not
breach a contract with the non-union employees. Id., ¶14.
However, the court held that non-union employees who retired
after the effective date of the 2002 ordinance were entitled to
receive a retirement payout of all of the sick leave that they
accrued prior to the effective date of the 2002 ordinance. Id.,
¶¶15-17. The court reasoned that the sick-leave payout benefit
is "a form of deferred compensation that is earned as the work
20
No. 2012AP2466
is performed. The benefit can be changed, but only as it is
related to work not yet performed." Id., ¶16.13
¶34 In Pasko v. Milwaukee County, 2013 WI App 91, 349
Wis. 2d 444, 836 N.W.2d 461, two Milwaukee County retirees sued
the County for paying them the cash value of approximately 400
hours of unused sick leave upon retirement. The two plaintiffs
had been union members while Milwaukee County employees, and
their union contracts provided that upon retirement they would
receive a cash payout of all of their unused sick leave. Pasko,
349 Wis. 2d 444, ¶6. Before retiring, the plaintiffs were
promoted to non-union managerial positions, thus subjecting them
to the Milwaukee County ordinance adopted in February 2002,
which limited the sick-leave payout upon retirement for non-
13
Stoker argues that Champine is distinguishable because
the court of appeals stated that "in the absence of a collective
bargaining agreement or employment contract, [Milwaukee County]
should not be bound to continue providing a benefit it now
regrets offering." Champine v. Milwaukee Cnty., 2005 WI App 75,
¶19, 280 Wis. 2d 603, 696 N.W.2d 245. Stoker interprets this
language to mean that Champine involved neither a collective
bargaining agreement nor a contract, unlike the present case.
To the contrary, the court of appeals explained that the 2000
ordinance, which provided a right to a payout of all unused sick
leave upon retirement, was a contract while it was in effect.
Id., ¶14. This quoted language simply meant that the 2000
ordinance did not provide a vested right to the sick-leave
payout with respect to future service. In any event, in a
nearly identical case that involved union contracts with
Milwaukee County, the court of appeals reached the same
conclusion as it did in Champine. See Pasko v. Milwaukee Cnty.,
2013 WI App 91, ¶¶9-14, 349 Wis. 2d 444, 836 N.W.2d 461. Thus,
the fact that Champine did not involve union contracts or
collective bargaining agreements is not a meaningful
distinction.
21
No. 2012AP2466
union employees to approximately 400 hours of unused sick leave.
Id., ¶¶3-6. This ordinance was at issue in Champine. Id., ¶5.
Because the plaintiffs retired as non-union employees, Milwaukee
County argued that, under the 2002 ordinance, they were entitled
to a payout of only approximately 400 hours of unused sick
leave. Id., ¶¶6, 9.
¶35 The court of appeals held that the plaintiffs were
entitled to a payout upon retirement of all of the unused sick
leave that they accrued while they were covered by union
contracts with Milwaukee County. Id., ¶13. Under the union
contracts, the sick-leave hours that the plaintiffs accrued
while they were union members "vested as they were earned."
Id., ¶¶9-13. Thus, the "vesting trigger" of sick leave was the
"day-by-day accrual" of sick leave. Id., ¶12. The court noted
that Milwaukee County could have used, but did not use, a
different vesting trigger in its union contracts so as to
preserve its ability to retroactively reduce the amount it was
required to pay retirees for sick leave already accrued. Id.
¶36 In Valeo v. J. I. Case Co., 18 Wis. 2d 578, 119
N.W.2d 384 (1963), a collective bargaining agreement provided
that employees were eligible for a certain amount of vacation
pay annually and that the right to vacation pay began accruing
each year on June 1. Valeo, 18 Wis. 2d at 579. The employer
terminated the collective bargaining agreement on February 29,
1960, three months before June 1. Id. A strike ensued and
lasted until a new collective bargaining agreement was signed on
September 19, 1960. Id. at 579-80. The employer denied its
22
No. 2012AP2466
employees any vacation pay for the period of June 1, 1959,
through February 29, 1960, arguing that the right to vacation
pay did not vest until June 1 and that the collective bargaining
agreement was terminated before June 1. Id. at 580. An
employee sued the employer, arguing that he was entitled to
vacation pay that accrued during the nine months from June 1,
1959, through February 29, 1960. Id. at 580, 583. This court
held that the employee had a vested right to the vacation pay
that "accrued as services were performed" for the employer
during these nine months. Id. at 585. The court reasoned that
"the nature of vacation pay [is] compensation for work
performed," and the collective bargaining agreement did not
provide that the right to vacation pay vested based on something
besides service rendered. Id.
¶37 Champine, Pasko, and Valeo show that certain employee
benefits, by their nature, accrue as service is rendered unless
a contract or law states otherwise. In the present case, "the
nature" of the pension multiplier is "compensation for work
performed." See id. As we already explained, the relevant
Milwaukee County ordinances and the collective bargaining
agreement expressly state that the multiplier accrues as service
is rendered. See M.C.G.O. §§ 201.24(5.15) (2000), App. B. 301
(1980), 201.24(5.1)(2)(f) (2011). If Milwaukee County wanted to
make the 2% multiplier vest immediately when enacted with
respect to all future service, it could have used a "vesting
trigger" besides "day-by-day accrual," but "[i]t did not." See
Pasko, 349 Wis. 2d 444, ¶12. Thus, the language of the
23
No. 2012AP2466
ordinances and collective bargaining agreement and the nature of
the multiplier show that the multiplier, like vacation pay and
sick leave, accrues over time as service is rendered.
¶38 Because the multiplier is "a form of deferred
compensation that is earned as the work is performed," it "can
be changed, but only as it is related to work not yet
performed." See Champine, 280 Wis. 2d 603, ¶16. See also
Wisconsin Prof'l Police Ass'n v. Lightbourn, 2001 WI 59, ¶¶111-
12, 243 Wis. 2d 512, 627 N.W.2d 807 (holding that statute
governing Wisconsin Retirement System, which stated that
benefits accrued as service is rendered, allows reduction of
benefits with respect to service performed after the
reduction).14
14
The statute in Lightbourn provided in relevant part:
Rights exercised and benefits accrued to an
employee under this chapter for service rendered shall
be due as a contractual right and shall not be
abrogated by any subsequent legislative act. The
right of the state to amend or repeal, by enactment of
statutory changes, all or any part of this chapter at
any time, however, is reserved by the state and there
shall be no right to further accrual of benefits nor
to future exercise of rights for service rendered
after the effective date of any amendment or repeal
deleting the statutory authorization for the benefits
or rights.
(continued)
24
No. 2012AP2466
¶39 Loth, Champine, Pasko, and Valeo show that Stoker's
reliance on ch. 138 of the Laws of 1945, ch. 326 of the Laws of
1957, and ch. 405 of the Laws of 1965 is misplaced. These
chapters state that MCERS members shall have a benefits contract
that protects their vested rights, but these chapters do not
explain whether the 2% multiplier is a vested right with respect
to future service. Indeed, these chapters do not mention this
multiplier at all.15 As we explained, the relevant Milwaukee
County ordinances, the collective bargaining agreement, and
Loth, Champine, Pasko, and Valeo show that Stoker did not have a
vested right to have the 2% multiplier apply to her post-2011
service.
¶40 We note that our conclusion that Milwaukee County may
prospectively modify benefits before they vest is consistent
with the anti-cutback rule of the Employee Retirement Income
Security Act ("ERISA") of 1974.16 The anti-cutback rule allows
Wis. Stat. § 40.19(1) (1997-98). Stoker argues that Lightbourn
is not helpful in the present case because, unlike Wis. Stat.
§ 40.19(1), the session laws governing MCERS do not state that
benefits accrue as service is rendered or allow prospective
reductions of benefits. However, the relevant Milwaukee County
ordinances and collective bargaining agreement state that the
pension multiplier accrues as service is rendered, and ch. 405
of the Laws of 1965 allows prospective reduction of unvested
benefits. Thus, we find helpful the Lightbourn court's
conclusion that a benefit that accrues as service is rendered
may be prospectively reduced.
15
Section 1 of ch. 326, Laws of 1957 mentions a multiplier,
but Stoker does not argue that this multiplier is relevant in
the present case.
16
See 29 U.S.C. § 1054(g).
25
No. 2012AP2466
employers subject to ERISA to modify benefits with respect to
future service because those benefits have not yet accrued.
Cent. Laborers' Pension Fund v. Heinz, 541 U.S. 739, 747 (2004).
The anti-cutback rule prohibits employers subject to ERISA from
adding new conditions to benefits that have accrued for service
rendered. Id. Stoker argues that Milwaukee County may go
beyond the protections under the anti-cutback rule by providing
benefits that vest before service is rendered. However, as we
have explained, the relevant Milwaukee County ordinances and
collective bargaining agreement show that the multiplier is a
benefit that accrues for service rendered.
¶41 Similarly, Stoker's reliance on Welter v. City of
Milwaukee, 214 Wis. 2d 485, 571 N.W.2d 459 (Ct. App. 1997), and
Rehrauer v. City of Milwaukee, 2001 WI App 151, 246 Wis. 2d 863,
631 N.W.2d 644, is also misplaced. In Welter the City of
Milwaukee provided a duty disability retirement allowance to
police officers who became disabled due to injuries suffered in
the course of their employment. Welter, 214 Wis. 2d at 487-88.
At a certain age, known as the conversion age, an officer who
was receiving a duty disability retirement allowance began
receiving a less-generous service retirement allowance instead.
Id. at 488. The City of Milwaukee lowered the conversion age
while the plaintiffs were employed as police officers. Id. The
plaintiffs became disabled and received a duty disability
retirement allowance that was converted to a service retirement
allowance when they reached this lower conversion age. Id. The
plaintiffs sued the city, arguing that they had a vested right
26
No. 2012AP2466
to the higher conversion age that was in effect when they began
employment with the City of Milwaukee. Id. The court of
appeals agreed with the plaintiffs. Id. The court of appeals
reasoned that an officer's right to a disability pension vests
when the officer begins employment with the City of Milwaukee,
rather than when the officer becomes disabled. Id. at 494-95.
The court held that two session laws governing the City of
Milwaukee's retirement system dictated this result. Id.
¶42 Welter is inapposite in the present case. Welter
involved a right that vested when a person began employment. In
the present case, we already determined that Stoker accrues a
right to the pension multiplier as she renders county service.
Further, the multiplier in effect when Stoker began employment
with Milwaukee County was 1.5%, and the multiplier has not been
reduced below that level with respect to any of Stoker's past or
future service.17 Although the court of appeals in Welter relied
solely on two session laws to conclude that a disability pension
vested when employment began, we think the better approach in
the present case is to interpret the relevant ordinances to
determine the extent to which the multiplier was a "vested"
right within the meaning of the session laws governing MCERS.
See Dunn v. Milwaukee Cnty., 2005 WI App 27, ¶¶2, 10-11, 13, 279
Wis. 2d 370, 693 N.W.2d 82 (relying on relevant ordinance to
17
This fact also provides a basis for distinguishing ch.
138 of the Laws of 1945, upon which Stoker heavily relies,
because this chapter applies only to benefits in existence when
a person's county employment began.
27
No. 2012AP2466
determine if Milwaukee County employees had a vested right to
future pay increases); Champine, 280 Wis. 2d 603, ¶¶13-14
(relying on relevant ordinance to determine if Milwaukee County
employees had a vested right to receive a cash payout for all of
their unused sick leave upon retiring); Hussey v. Milwaukee
Cnty., 740 F.3d 1139, 1143 (7th Cir. 2014) (relying on relevant
ordinances to determine if Milwaukee County retirees had a
vested right to premium-free health insurance). Again, these
ordinances provide that the multiplier accrues as service is
rendered.
¶43 In Rehrauer the plaintiffs began their employment as
City of Milwaukee firefighters prior to February 8, 1972.
Rehrauer, 246 Wis. 2d 863, ¶2. When their employment began, the
City of Milwaukee provided limited-term duty disability benefits
to its firefighters who became disabled due to an injury
suffered during the course of employment. Id. A contract in
effect between February 8, 1972, and September 30, 1977,
provided more-generous lifetime duty disability benefits. Id.,
¶¶2, 7. After September 30, 1977, the City of Milwaukee again
offered limited-term duty disability benefits. Id., ¶3 n.3.
The plaintiffs applied for disability benefits after
September 30, 1977, so the City of Milwaukee awarded them
limited-term duty disability benefits in effect at that time.
Id., ¶2. The plaintiffs sued the city, arguing that they gained
a vested contractual right to the lifetime duty disability
benefits established during their employment. Id., ¶5.
28
No. 2012AP2466
¶44 The court of appeals agreed with the firefighters.
Id. The court concluded that "the firefighters gained vested
rights in the highest level of duty disability benefits that
came to be contractually established during their years of
active duty." Id., ¶20. The court reasoned that, "[u]nder
§ 36-13-2-c of the Milwaukee City Charter, [the plaintiffs] have
a 'vested right in the . . . benefits in the amounts and on the
terms and conditions and in all other respects as provided in
the law . . . in effect at the date of commencement of his [or
her] membership and as subsequently amended.'" Id., ¶16
(emphasis added by court of appeals).
¶45 Rehrauer is inapposite in the present case. In
Rehrauer the court of appeals relied on an ordinance that
expressly provided a vested right to an increase in benefits,
and it also relied on the holding in Welter that disability
benefits vest immediately rather than when an employee becomes
disabled. Id., ¶¶13-14, 16. In contrast, the ordinances
relevant in the present case do not state that MCERS members
have a vested right to have an increased multiplier apply in
perpetuity. To the contrary, these ordinances provide that the
multiplier accrues over time as service is rendered. It is true
that the ordinance relied upon in Rehrauer is similar to ch. 326
of the Laws of 1957, which provides each MCERS member with a
"vested right . . . to all increases in benefits covered by
amendments subsequent to the date his membership is effective."
However, as we already discussed, ch. 326 does not explain the
precise nature of the "vested right" it mentions. Because the
29
No. 2012AP2466
multiplier vests over time as service is rendered, the "vested
right" to which ch. 326 refers does not include a vested right
to have the 2% multiplier apply in perpetuity. Rather, the
"vested right" to which ch. 326 refers includes the right to
have the 2% multiplier apply to all service that is rendered
while the 2% multiplier is in effect.
¶46 Accordingly, we are not persuaded by Stoker's argument
that Welter and Rehrauer apply in the present case because they
involved session laws similar to the session laws that govern
MCERS. Disability benefits, unlike the pension multiplier, are
a promise by an employer that is not conditioned on subsequent
action by an employee, such as rendering service. Instead,
disability benefits are a promise to receive coverage for an
unforeseen event that happens at some point in the future. As
we explained, we rely on the relevant Milwaukee County
ordinances and the collective bargaining agreement to determine
the extent to which the 2% multiplier is a vested right within
the meaning of the session laws. In light of these ordinances
and the collective bargaining agreement, we conclude that Stoker
does not have a vested right to have the 2% multiplier apply to
her post-2011 service, which she rendered after the 2%
multiplier was reduced to 1.6%. Because Stoker did not have a
vested right to have the 2% multiplier apply to her post-2011
service, Milwaukee County was free to reduce the multiplier
below 2% for her post-2011 service. See Loth, 315 Wis. 2d 35,
¶¶30-47.
V. CONCLUSION
30
No. 2012AP2466
¶47 We conclude that Milwaukee County did not breach the
contract with Stoker when it amended the pension multiplier from
2% to 1.6%. The amendment did not breach Stoker's contractual
right to retirement system benefits earned and vested because it
had prospective-only application to future service credits not
yet earned, specifically, on and after January 1, 2012. We
conclude that the legislature preserved Stoker's rights and
benefits already accrued but also gave Milwaukee County home
rule authority with the flexibility to enact such prospective-
only changes. We conclude that Stoker does not have a vested
right to have the 2% multiplier apply to her then-unearned post-
2011 service. In other words, Milwaukee County could so amend
the formula and apply it prospectively because that prospective
application does not "diminish or impair" benefits accrued from
service credits already earned. Because we conclude that
Milwaukee County did have the ability to make these prospective-
only reductions of the multiplier without Stoker's personal
consent, we need not address whether the Federation lawfully
consented, on Stoker's behalf, to the reduction.
By the Court.—The decision of the court of appeals is
reversed and remanded.
31
No. 2012AP2466.awb
¶48 ANN WALSH BRADLEY, J. (dissenting). Rather than
addressing the session laws which provide a clear answer to our
inquiry and dictate protection of the employees' benefits, the
majority shifts the focus of its analysis to language in the
Milwaukee County General Ordinance. It is only by repeatedly
ignoring the language of the governing session laws that the
majority is able to conclude that the County may reduce the
pension multiplier, thereby dealing a blow to the rights of the
employees.
¶49 I conclude instead, as did a unanimous court of
appeals, that the session laws mean what they say: employees
have a vested right to their benefits when they accept
employment with the County and the County is not permitted to
diminish or impair those benefits. As such, the County was
without authority to pass an ordinance reducing Stoker's pension
multiplier. Accordingly, I respectfully dissent.
I
¶50 The Milwaukee County Employee Retirement System
[MCERS] was created by the legislature in chapter 138 of the
Laws of 1945. That session law provided that employees shall
have a benefit contract and vested rights to their benefits at
the time each employee commences membership:
Every future entrant who shall become a member of
[MCERS] after the effective date of this act shall
have a similar benefit contract and vested right in
the annuities and all other benefits in the amounts
and on the terms and conditions and in all other
respects as provided in the law under which the
retirement system was established as such law shall
have been amended and be in effect at the date of
commencement of his membership.
1
No. 2012AP2466.awb
Laws of 1945, Ch. 138 (emphasis added). The legislature did not
refer to an employee earning or accruing benefits through
services rendered. Rather, the legislature provided that rights
to benefits "vested" at the "date of commencement of [an
employee's] membership."1 It is hard to imagine how much clearer
the legislature could have been.
¶51 Not surprisingly, Wisconsin courts have previously
concluded that language similar to that used in chapter 138 of
the Laws of 1945 created a vested right to benefits at the time
of hire. In Welter v. City of Milwaukee, 214 Wis. 2d 485, 571
N.W.2d 459 (Ct. App. 1997), the court considered substantially
similar laws relating to police officers' retirement benefits.
The session law at issue provided that:
Every such member . . . shall thereby have a benefit
contract in said retirement system of which he is such
member or beneficiary as of the effective date of this
act . . . . [E]ach member and beneficiary having such
a [retirement system] benefit contract shall have a
vested right to such annuities and other benefits and
they shall not be diminished or impaired by subsequent
legislation or by any other means without [the
officer's] consent. . . . Every future entrant who
shall become a member of this retirement system after
the effective date of this act shall have a similar
benefit contract and vested right in the annuities and
all other benefits . . . .
Laws of 1947, ch. 441, § 30(2). After considering this
language, the court determined that the retirement benefits at
issue vested at the time officers became employees.
1
"Vested" is defined as "[t]hat has become a completed,
consummated right for present or future enjoyment; not
contingent; unconditional; absolute." Black's Law Dictionary
1557 (7th ed. 1999).
2
No. 2012AP2466.awb
¶52 The Welter court reasoned that the language of the
session laws "[is] not ambiguous; [its] meaning is plain."
Welter, 214 Wis. 2d at 491. "Under [the laws at issue],
retirement-plan benefits in effect when a Milwaukee police
officer becomes a member of the retirement system are vested as
to that officer unless the officer agrees to a change." Id.
The court rejected the city's argument that the rights vested at
some later date, stating that "[t]his argument, however, ignores
the legislative command that the critical date is not that of
the duty-related disability but the date the officer becomes a
member of the retirement system——the date he or she was first
employed by the City as a police officer." Id. at 494-95. See
also Rehrauer v. City of Milwaukee, 2001 WI App 151, ¶¶11-13,
246 Wis. 2d 863, 631 N.W.2d 644 (following Welter's conclusion
that the officers' benefits vested at the date of hire).
¶53 The majority attempts to avoid the plain language of
the session laws and the cases interpreting similar language by
shifting its focus to the language of the Milwaukee County
General Ordinance. Majority op., ¶30. It asserts that this is
the proper approach because the session laws do not "explain
whether the 2% multiplier is a vested right with respect to
future service" and thus, the majority implies that the
Ordinance does. Id., ¶39. Pointing to the Ordinance's
statement that 0.5% of the multiplier applies to "service
rendered," the majority concludes that this means "the
3
No. 2012AP2466.awb
multiplier accrues over time." Id., ¶30.2 It then states that
Welter is inapposite because it relied on the language of the
session laws and not an ordinance. Id., ¶42.
¶54 Contrary to the majority's implications, the Ordinance
does not directly address whether the multiplier creates vested
rights with respect to future service. The majority's strained
reasoning on this point conflicts with the common definition of
the word "accrue." The word "accrue" generally means "to
accumulate over time." The American Heritage Dictionary of the
English Language 12 (3d ed. 1992); see also Black's Law
Dictionary 21 (7th ed. 1999) (defining accrue as "[t]o
accumulate periodically").
¶55 Nothing in the Ordinance indicates that the multiplier
grows over time. Under the Ordinance, an employee "shall
receive an amount equal to one and one-half (1½) percent of his
final average salary multiplied by the number of his years of
service rendered." MCGO § 201.24(5.1)(1).
¶56 The Ordinance further provides that "all pension
service credit earned on and after January 1, 2001, shall be
credited in an amount equal to an additional one-half (0.5)
percent of the member's final average salary." MCGO
§ 201.24(5.15). As indicated by the language of the Ordinance,
the multiplier does not grow or accumulate in proportion to the
2
It is unclear why the majority focuses on the language in
the Ordinance creating the additional 0.5% multiplier and not
the language regarding the base 1.5% multiplier, MCGO
§ 201.24(5.1)(1). The two provisions have different language.
4
No. 2012AP2466.awb
years of service rendered. It is the number of pension service
credits that increases over time, not the multiplier. The
multiplier itself does not "accrue."
¶57 The majority's refusal to acknowledge the words of the
governing session laws is evident in its reliance on Champine,
Pasko, and Valeo to support its conclusion that the multiplier
accrues as service is rendered. I recognize that each of those
cases determined that under the governing law or contract being
interpreted, the benefit at issue vested as service was
rendered. However, each of those cases also acknowledged that
legislation or a contract could include a different vesting
trigger, such as the commencement of employment. See Champine
v. Milwaukee County, 2005 WI App 75, ¶19, 280 Wis. 2d 603, 696
N.W.2d 245; Pasko v. Milwaukee County, 2013 WI App 91, ¶12, 349
Wis. 2d 444, 836 N.W.2d 461; Valeo v. J. I. Case Co., 18 Wis. 2d
578, 584, 119 N.W.2d 384 (1963).
¶58 In this case, clear language in a governing session
law creates a vesting trigger different from the trigger found
in those cases. Chapter 138 of the Laws of 1945 states that
employees "shall have a similar benefit contract and vested
right in the annuities and all other benefits in the amounts and
on the terms and conditions . . . at the date of commencement of
his membership." In other words, upon acceptance of employment,
employees gain a vested right to benefits on the terms and
5
No. 2012AP2466.awb
conditions of the contract.3 Because one of the terms and
conditions of the pension benefit was that it would be
calculated using a 2% multiplier, there is a vested right to
that multiplier.
¶59 The majority further attempts to distance this case
from the governing session laws by asserting that chapter 138 of
the Laws of 1945 does not apply because that chapter applies
only to benefits in existence when a person's county employment
began and that the multiplier when Stoker began employment was
1.5%, lower than the 1.6% at issue here. Majority op., ¶42
n.17. Again, the majority's narrow focus has led it astray.
¶60 Although chapter 138 of the Laws of 1945 could have
initially been read as the majority posits, a 1957 amendment to
that chapter clarifies that an employee has vested rights to
increases in benefits, not just the benefits available at the
start of employment. Specifically, Chapter 326 of the Laws of
1957 amended the language to read:
3
Citing Loth v. City of Milwaukee, 2008 WI 129, 315 Wis. 2d
35, 758 N.W.2d 766, the majority alludes to the argument that
the session law was a unilateral contract offer that the county
could modify until an employee became entitled to the benefits
by accepting the offer. Majority op., ¶¶29, 46. It is
understandable that the majority does not attempt to directly
embrace the unilateral contract argument. Neither the session
law nor the Ordinance creates eligibility requirements that
employees need to meet before being entitled to the multiplier.
As illustrated above, to the extent the session law can be
viewed as a unilateral contract offer, the only action an
employee need take to accept the offer, and thereby create a
binding contract, is to accept employment. Similarly, under the
Ordinance, an employee is entitled to the multiplier regardless
of how many years of service the employee has rendered.
6
No. 2012AP2466.awb
[E]ach member and beneficiary having such a benefit
contract shall have a vested right to all benefits
stated by the act at the time his membership is
effective and to all increases in benefits covered by
amendments subsequent to the date his membership is
effective and they shall not be diminished or impaired
by subsequent legislation on or by any other means
without his consent.
Ch. 326, Laws 1957, § 6 (emphasis added).
¶61 Nearly identical language was interpreted in Rehrauer,
246 Wis. 2d 863. In that case the ordinance at issue provided
that firefighters have a "vested right in the . . . benefits in
the amounts and on the terms and conditions and in all other
respects as provided in the law . . . in effect at the date of
commencement of his membership and as subsequently amended."
Id., ¶16 (quoting Milwaukee City Charter § 36-13-2-c). Based
on the language of the ordinance and the governing statutes, the
principles set forth in Welter, and the importance of the
attraction and retention of public employees, the court
concluded that "firefighters gained vested rights in the highest
level of duty disability benefits that came to be contractually
established during their years of active duty." Id., ¶20.
Given that the language in this case is nearly identical to that
at issue in Rehrauer, there is little justification for
interpreting it differently.
II
¶62 In contrast to the majority's interpretation, I
conclude that the language of the session law governs: employees
"shall have a vested right to all benefits stated by the act at
the time his membership is effective and to all increases in
benefits covered by amendments subsequent to the date his
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membership is effective." Ch. 326, Laws of 1957, § 6. This
language is unambiguous and is not open to alternative
interpretations. See Madison Teachers, Inc. v. Walker, 2014 WI
99, ¶145, __ Wis. 2d ___, 851 N.W.2d 337 (concluding that
similar provisions in Milwaukee's Charter "unmistakably evince
the clear intention of the Common Council to create a 'vested
and contractual right to the [pension] benefits in the amount
and on the terms and conditions' as provided in [the Charter]").
¶63 Here, upon accepting employment with the County in
1982, Stoker entered into a contract which provided her with a
vested right to a 1.5% pension multiplier. See MCGO
§ 201.24(5.1) (1981). During her employment, that multiplier
was increased to 2%. See MCGO § 201.24(5.15)(1) (enacted 2000).
Under chapter 326 of the Laws of 1957, Stoker had a vested right
to the increase as well.
¶64 Once her rights to the multiplier vested, the County
was unable to reduce it. The legislature's restrictions on the
County's home rule authority with respect to altering employee
benefits are clear. It instructed that "no such change shall
operate to diminish or impair the annuities, benefits or other
rights of any person who is a member of [MCERS] prior to the
effective date of any such change." Ch. 405, Laws 1965. An
ordinance that conflicts with the authority granted by the
session laws is void. See State ex rel. Ziervogel v. Wash.
Cnty. Bd. of Adjustment, 2004 WI 23, ¶38, 269 Wis. 2d 549, 676
N.W.2d 401. Here, the County’s amendment to the Ordinance would
operate to reduce Stoker's pension multiplier to 1.6%, thereby
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conflicting with the Legislature’s mandate that employee rights
and benefits not be diminished. Accordingly, the amendment to
the Ordinance is void.
¶65 In sum, the majority's attempt to avoid the language
of the governing session laws and shift the focus to the
language in the Ordinance is unpersuasive. It turns a blind eye
to the clear language of the session laws which must trump the
amendment to the County Ordinance.
¶66 Although the County offered employment to individuals
with the promise that a certain pension benefit formula would
accompany such employment, the majority erroneously concludes
that the County has unfettered discretion to prospectively
reduce it. As a result, an employee who accepted the offer has
no contractual rights to enforce that formula. Because I
conclude that employees have a vested right to the formula
containing the multiplier and that the County was without
authority to pass an ordinance reducing that multiplier, I would
affirm the unanimous court of appeals' decision.4
4
The same day the court heard argument on this case, we
also heard argument on another case involving when Milwaukee
County employees' benefits become vested. The decision in that
case is still pending. Efforts should be made to make the two
opinions consistent. The core function of courts is, of course,
clear, consistent, and reliable application of the law.
Because of the court's new procedure for opinion
preparation and mandate, I cannot comment on the other decision
at this time given that I want this dissent to be mandated at
the same time as the majority opinion. See State v. Gonzalez,
2014 WI 124, ¶30, ___ Wis. 2d ___, ___ N.W.2d ___ (Abrahamson,
C.J., concurring) (setting forth the new procedure).
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No. 2012AP2466.awb
¶67 For the reasons set forth above, I respectfully
dissent.
¶68 I am authorized to state that Chief Justice SHIRLEY S.
ABRAHAMSON joins this opinion.
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