For fifty years while it managed the Lawrence Livermore Laboratory, the University of California gave its Livermore employees employment information stating that their health plan benefits would continue after their retirement. In 2007, the federal government removed UC and gave management of the labs to a different entity which also gave employees health plan benefits, but expressly provided that it could terminate those benefits at any time in its sole discretion. Retired former UC lab employees sued UC claiming that it had unconstitutionally impaired their contractual rights to post-retirement health benefits. This decision holds that the trial court erred in decertifying the plaintiff class. To prove that the health benefits were an implied term of the retirees’ employment contract, the retirees do not need to show that they each individually were aware of or relied on that term. Common evidence of UC’s representations of the terms of employment suffices. Also, although proof that a class member has been economically harmed by being shunted into the successor’s health plan would pose a predominant individual issue, the class can establish the needed unconstitutional impairment of their contractual rights based solely on the uniform fact the successor manager’s health plan is terminable at its will, whereas UC’s was not.
California Court of Appeal, First District, Division 5 (Simons, J.); August 1, 2018; 2018 Cal. App. LEXIS 675