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September 17, 2018
Court rules that an employee is not entitled to recover damages for his increased tax liability for having received a lump sum back pay award.
May 20, 2019
The California Court of Appeal - Fourth District - has ruled that Government Code Section 19584 does not allow an employee to recover damages for his increased tax liability for having received a lump sum back pay award. (See, Barber v, State Personnel Board (Department of Corrections and Rehabilitation) - May 17, 2019, Fourth District, 2019 S.O.S. 2393.)
In Barber, the plaintiff/appellant employee was awarded a lump sum back pay award from the California State Personnel Board (SPB), which resulted in the plaintiff employee incurring increased income tax liability. The plaintiff employee subsequently requested recovery for the increased tax liability, which the SPB denied. On appeal, the plaintiff employee argued that he is entitled to recover damages for incurring increased tax liability because his increased tax liability was caused by real party in interest and defendant/respondent, California Department of Corrections and Rehabilitation (CDCR), improperly terminating his employment. The plaintiff employee further argued that awarding him such relief is consistent with the remedial statutory purpose of Government Code section 19584 of making an improperly terminated employee whole by restoring the employee to the financial position he or she would otherwise have occupied had employment not been wrongfully interrupted.
The Court of Appeal disagreed with the plaintiff employee and held that the plaintiff employee is not entitled to increased tax liability recovery under section 19584 or to such recovery as equitable relief, because such relief is not statutorily authorized.