Retirement Board of Stoneham v. Contributory Retirement Appeal Board

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SJC-12098

RETIREMENT BOARD OF STONEHAM vs. CONTRIBUTORY RETIREMENT

APPEAL BOARD & another.1

Middlesex. October 5, 2016. - December 22, 2016.

Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, &

Budd, JJ.

Retirement. Municipal Corporations, Retirement board. Public

Employment, Retirement. Contributory Retirement Appeal

Board.

Civil action commenced in the Superior Court Department on

February 6, 2014.

The case was heard by Robert L. Ullmann, J., on motions for

judgment on the pleadings.

The Supreme Judicial Court on its own initiative

transferred the case from the Appeals Court.

Douglas S. Martland, Assistant Attorney General, for

Contributory Retirement Appeal Board.

Thomas F. Gibson for Christine DeFelice.

Michael Sacco for the plaintiff.

1

Christine DeFelice.

2

LOWY, J. This case requires us to answer two questions:

(1) whether a municipal retirement board possesses absolute

discretion to terminate a part-time employee's membership in a

retirement system to which that board has granted the employee

membership; and (2) even if such a board does not have the power

to terminate a part-time employee's membership, whether a

"separation from [an employee's] service" under G. L. c. 32, § 3

(1) (a) (i), occurs when a part-time employee working two jobs

for the same municipal employer ceases to work only one of those

jobs. We answer both questions in the negative and reverse the

judgment of the Superior Court.

Background. Christine DeFelice began working on a part-

time basis for the Stoneham school department (department) in

November, 2000. In April, 2001, she took on a second part-time

job with the department to fill a temporary vacancy, increasing

her weekly workload from nineteen and one-half hours per week to

over thirty hours per week for the ensuing nine weeks. At the

end of the nine-week period, DeFelice continued to work for the

department on a part-time basis until at least June, 2009, only

occasionally working more than nineteen and one-half hours per

week.2

2

It is not clear when DeFelice's employment with the

department ended. At oral argument, DeFelice's counsel

indicated that DeFelice was no longer employed with the

department. The last date of employment clearly referred to by

3

In 2009, DeFelice sought retroactive membership in the

Stoneham retirement system as an employee of the department,

based on the nine-week period in 2001 during which she worked

over thirty hours per week. Under the membership eligibility

criteria for part-time employees established by the Stoneham

retirement board (board) that were in effect during 2001,

Stoneham employees were eligible for membership in the

retirement system if they were scheduled to work more than

thirty hours per week for a period of more than seven days.3

Initially, the board denied DeFelice's membership application,

because her increase in hours was temporary. In August, 2010,

the board reconsidered its position and granted DeFelice

retroactive membership in the Stoneham retirement system for the

nine-week period in the spring of 2001, but denied her

membership for the subsequent time during which she remained a

part-time employee of the department. The board concluded that

DeFelice was not eligible following the nine-week period because

her weekly hours did not continue to satisfy the criteria.

the Division of Administrative Law Appeals is June 4, 2009.

Because of the result we reach in this case, the date her

employment with the department ended is not material.

3

The board has since changed its eligibility requirements

so that, as of April, 2010, non-full-time employees must be

"permanently employed" for at least twenty hours per week and

earn at least $5,000 annually in order to qualify for

membership.

4

DeFelice appealed from the board's determination, seeking

membership for the years she continued to work for the

department as a part-time employee.4 The Contributory Retirement

Appeal Board (CRAB) assigned the case to the division of

administrative law appeals (DALA). DALA determined that, once

the board granted DeFelice membership, it could not unilaterally

terminate her membership status. DALA concluded that the

statute governing membership in a public retirement system

precluded the board, in the absence of statutorily specified

exceptions, from terminating the membership of individuals who

had been granted membership and continued working for the same

municipal employer. The board objected, arguing that it

possessed authority to terminate the membership of non-full-time

employees who failed to satisfy its membership criteria. CRAB

adopted DALA's factual findings and affirmed its decision. The

board sought review pursuant to G. L. c. 30A, § 14. A judge in

the Superior Court reversed CRAB's decision, and DeFelice

appealed. We transferred the case here by our own motion, and

now reverse the judgment of the Superior Court.

Statutory scheme. Massachusetts law permits a municipality

to establish a contributory retirement system for the

municipality's employees. See G. L. c. 32, § 20 (4). The law

4

The parties acknowledged during oral argument that

DeFelice's benefit, upon her retirement, would be proportional

to the service she provided as a part-time employee.

5

further provides for the establishment of municipal retirement

boards to manage the retirement systems in a manner consistent

with applicable laws. G. L. c. 32, § 20 (4) (b), (5) (b).

Municipal retirement boards have the power to make rules and

regulations "consistent with law," subject to approval by the

public employee retirement administration commission. G. L. c.

32, § 20 (5) (b).

General Laws c. 32, § 3 (2), sets forth various criteria

that establish "eligibility" for membership in a retirement

system. For example, individuals who are "employees," and

therefore "regularly employed,"5 are generally eligible for

membership. G. L. c. 32, § 3 (2) (a) (x). However, municipal

retirement boards possess "full jurisdiction" to determine the

eligibility of "part-time, provisional, temporary, temporary

provisional, seasonal or intermittent employment or service of

5

An "employee," as applicable to this case, is a person

"who is regularly employed in the service of," and "whose

regular compensation . . . is paid by," the Commonwealth or a

political subdivision of the Commonwealth. G. L. c. 32, § 1.

See Retirement Bd. of Concord v. Colleran, 34 Mass. App. Ct.

486, 489 (1993) (town employee was "regularly employed" during

three-year period in which she continuously worked three hours

per day). The board does not dispute that DeFelice was

regularly employed throughout her employment with the

department.

6

any employee in any governmental unit."6 G. L. c. 32,

§ 3 (2) (d).

Satisfying the eligibility criteria for membership does not

automatically confer membership upon an employee. See G. L.

c. 32, § 1 (defining "member" as "any employee included in"

retirement system [emphasis added]). See also Manning v.

Contributory Retirement Appeal Bd., 29 Mass. App. Ct. 253, 255

(1990) (non-full-time employee was not member of retirement

system in absence of determination by pertinent retirement

board). Relevant to this case, an employee who is eligible to

become a member, but who fails or chooses not to do so, "may

apply for and be admitted to membership if [the employee is]

under the maximum [entry] age for [the employee's] group on the

date of [the employee's] application; provided, that during [the

employee's] present period of service [the employee] had

previously been eligible for membership" (emphasis added).

G. L. c. 32, § 3 (3). In other words, the employee must have

continued working for the same municipal employer between the

time the employee became eligible for membership and the time

the employee submitted the late application for membership.

Once an eligible employee is included in a city or town's

retirement system, that employee becomes a "member" of the

6

In this opinion, we refer to such employees as "non-full-

time employees," and employees falling outside of the scope of

this provision as "full-time employees."

7

system. G. L. c. 32, § 1. There are two types of membership:

"member in service" and "member inactive." G. L. c. 32,

§ 3 (1) (a). A member in service, the only membership type

relevant in this case, is "[a]ny member who is regularly

employed in the performance of [the member's] duties." G. L.

c. 32, § 3 (1) (a) (i). Once designated a member in service,

the member remains a member in service "until [the member's]

death or until [the member's] prior separation from the service

becomes effective by reason of [the member's] retirement,

resignation, . . . removal or discharge from [the member's]

office," or another statutorily specified circumstance.7 Id.

Standard of review. Because this case involves the meaning

of G. L. c. 32, § 3, a pure question of law, we exercise de novo

review of CRAB's interpretation. Rotondi v. Contributory

Retirement Appeal Bd., 463 Mass. 644, 648 (2012). See Rosing v.

Teachers' Retirement Sys., 458 Mass. 283, 290 (2010). Still, in

reviewing CRAB's decisions, courts "typically defer to CRAB's

expertise and accord '"great weight" to [its] interpretation and

application of the statutory provisions it is charged with

7

The remaining statutory circumstances include effective

prior separation from the member's service by reason of "failure

of re-election or reappointment . . . or by reason of an

authorized leave of absence without pay other than as provided

for in this clause." G. L. c. 32, § 3 (1) (a) (i).

8

administering'" (citation omitted).8 Weston v. Contributory

Retirement Appeal Bd., 76 Mass. App. Ct. 475, 479 (2010). "We .

. . will reverse only if [CRAB's] decision was based on an

erroneous interpretation of law or is unsupported by substantial

evidence." Foresta v. Contributory Retirement Appeal Bd., 453

Mass. 669, 676 (2009). See G. L. c. 30A, § 14 (7) (c), (e).

Discussion. The first question before the court is whether

the board's authority under § 3 (2) (d) to determine the

eligibility of non-full-time employees, such as DeFelice,

supersedes the provision in § 3 (1) (a) (i) establishing that

the status of a member in service "shall continue as such until

[the member's] death or until [the member's] prior separation

from the service becomes effective by reason of" one of the

statutory circumstances. Second, if the board did not have the

absolute discretion to terminate DeFelice's membership, we must

8

Both CRAB and the board argue that their respective

interpretations of § 3 are entitled to deference. As

Massachusetts courts have recognized CRAB's role in

administering G. L. c. 32, and the value of its expertise in the

complicated area of retirement law, we afford greater weight to

CRAB's interpretation in this case. See, e.g., Weston v.

Contributory Retirement Appeal Bd., 76 Mass. App. Ct. 475, 479

(2010); Namay v. Contributory Retirement Appeal Bd., 19 Mass.

App. Ct. 456, 463 (1985). Because "eligibility" is also used in

§ 3 regarding membership criteria that fall outside of the

board's "full jurisdiction" under § 3 (2) (d), adopting the

board's interpretation could have limiting effects on the

meaning of "eligibility" in circumstances outside the board's

jurisdiction. See Commonwealth v. Hilaire, 437 Mass. 809, 816

(2002) ("When the Legislature uses the same term in the same

section, . . . the term should be given a consistent meaning

throughout").

9

determine whether DeFelice was nonetheless separated from her

service as a result of a "removal or discharge" under § 3 (1)

(a) (i) when she stopped working the second job that increased

her weekly hours to a level that initially qualified her for

membership.

1. Interpretation of eligibility. The first question is

whether the board possessed discretion to terminate DeFelice's

membership when she ceased to satisfy the board's eligibility

requirements, even after it had granted her retroactive

membership, effective April 23, 2001. The board contends that

its "full jurisdiction" under § 3 (2) (d) means that it

possesses an "absolute" power to determine the eligibility of

non-full-time employees -- notwithstanding the proscription of

§ 3 (1) (a) (i) -- that once a member is afforded "member in

service status," that status "shall continue" until the employee

dies or one of the specified circumstances leads to the

employee's "separation from . . . service." The board argues

that the "more specific" authority it possesses over the

eligibility of non-full-time employees supersedes § 3 (1) (a)

(i).

CRAB argues that the board's jurisdiction over eligibility

means only jurisdiction to set initial eligibility criteria.

The board's authority, CRAB contends, does not include the

ability to revoke the membership of employees once granted,

10

because § 3 (1) (a) (i) specifies the circumstances pursuant to

which membership can be terminated.

The language of the statute is the starting point for all

questions of statutory interpretation. Rotondi, 463 Mass. at

648, quoting Hoffman v. Howmedica, Inc., 373 Mass. 32, 37

(1977). The effect given to statutory language should be

consistent with its plain language. See id., citing Sullivan v.

Brookline, 435 Mass. 353, 360 (2001). Courts must look to the

statutory scheme as a whole. See Commonwealth v. Raposo, 453

Mass. 739, 745 (2009).

We accept CRAB's interpretation, because (1) it is

consistent with the statute's plain language, (2) it is

consistent with use of "eligibility" as applied to full-time

employees in the same subsection of § 3, and (3) it avoids an

unnecessary conflict between § 3 (1) (a) (i) and § (3) (2) (d).

First, the plain language of the statute supports CRAB's

interpretation. Section 3 (1) (a) (i) specifies the

circumstances in which a member's status as a "member in

service" may be terminated. The statute explicitly defines

"member" as "any employee included in" the applicable retirement

system. G. L. c. 32, § 1. The definition of employee does not

distinguish between full-time and non-full-time employees. See

id. A member in service is "[a]ny member who is regularly

employed in the performance of [the member's] duties," and a

11

member's status as a member in service "shall continue" until

the occurrence of a statutorily specified event (emphasis

added). G. L. c. 32, § 3 (1) (a) (i). Section 3 (1) (a) (i)

applies to members, who may be full-time employees eligible for

membership pursuant to statutory criteria, or non-full-time

employees eligible pursuant to the action of a local retirement

board under § 3 (2) (d). See G. L. c. 32, §§ 1 and 3 (1) (a)

(i), (2) (a) and (d). The statutorily enumerated events

supporting the termination of a member's status as a member in

service do not include a member's subsequent failure to satisfy

the eligibility criteria that led to that member's admission.

See G. L. c. 32, § 3 (1) (a) (i). Accordingly, § 3 (1) (a) (i)

limits the board's authority over the continuing membership of

non-full-time employees.

Second, limiting the board's power to the task of

establishing only the initial eligibility criteria of non-full-

time employees avoids interpreting the term "eligibility"

inconsistently within § 3. Section 3 (2) is titled "Eligibility

for Membership,"9 and § 3 (2) (a) sets forth twelve circumstances

establishing a full-time employee's eligibility for membership

in a retirement system. Once a full-time employee becomes

9

Although a heading does not conclusively determine a

statute's proper interpretation, it may nonetheless be a

relevant factor. Cf. Davis v. School Comm. of Somerville, 307

Mass. 354, 358-359 (1940) (rejecting interpretation based on

heading, where heading conflicted with statutory language).

12

eligible under § 3 (2) (a) and then becomes a member in service,

that employee's status as a member in service "shall continue"

until one of the statutorily specified events occurs. See G. L.

c. 32, § 3 (1) (a) (i). Because the statutorily specified

events do not include a subsequent failure to satisfy the

eligibility criteria, a member's status as a member in service

continues even if the member ceases to satisfy the criteria that

initially qualified the member for admission into the retirement

system. See id. Therefore, in § 3 (2) (a), "eligibility" must

refer only to whether an employee satisfies criteria for

membership prior to the employee becoming a member. See G. L.

c. 32, § 3 (1) (a) (i), (2) (a). Eligibility as used in

§ 3 (2) (d), a different paragraph of the same subsection,

should not be given a different meaning. Commonwealth v.

Hilaire, 437 Mass. 809, 816 (2002).

If eligibility means an individual's initial qualification,

the provisions of § 3 (1) (a) (i) do not conflict with the

board's "full jurisdiction" under § 3 (2) (d). The conflict

only arises if one accepts the board's definition that its "full

jurisdiction" over eligibility necessarily encompasses something

more than the eligibility determination prior to the non-full-

time employee's admission to membership. Because such an

interpretation is not required by the statutory language and

would create an unnecessary conflict between § 3 (1) (a) (i) and

13

§ 3 (2) (d), we decline to adopt it. See Raposo, 453 Mass. at

745 (courts must read statutory terms harmoniously); Fireman's

Fund Ins. Co. v. Commissioner of Corps. & Taxation, 325 Mass.

386, 389 (1950) (rejecting statutory construction that would

"bring two provisions of our own statutes into unnecessary

conflict").

The board possesses full jurisdiction to determine when

non-full-time employees become eligible for membership in the

Stoneham retirement system. See G. L. c. 32, § 3 (2) (d). Once

the board confers membership, however, it cannot override the

explicit statutory mandate governing the duration of membership.

See G. L. c. 32, § 3 (1) (a) (i). See also Galenski v. Erving,

471 Mass. 305, 311 (2015), quoting Cioch v. Treasurer of Ludlow,

449 Mass. 690, 699 (2007) ("[A] municipality may not enact a

bylaw, policy, or regulation that is inconsistent with State

law").

Lexington Educ. Ass'n v. Lexington, 15 Mass. App. Ct. 749,

752 (1983), is an example of the limitations on a municipality's

otherwise broad discretion in light of an explicit statutory

requirement. In that case, the statute at issue required

municipalities participating in an applicable health insurance

program to "purchase certain group insurance 'covering

employees,'" and defined "employee" to include any person

working at least twenty hours per week for a municipality. Id.

14

at 750-751, citing G. L. c. 32B, §§ 2 (d), 3. Municipalities

had the authority to make a "final" determination of a person's

eligibility to participate in the insurance program. See

Lexington Educ. Ass'n, supra at 752. The Appeals Court

invalidated a municipality's rule that limited participation to

employees working at least twenty-five hours per week, because

the statute required municipalities to include individuals

working at least twenty hours per week. Id. Similarly, the

board's authority to determine when non-full-time employees may

become members in the Stoneham retirement system cannot

supersede § 3 (1) (a) (i)'s requirements regarding the duration

of membership.10

The Manning decision, upon which SRB relies for support, is

not analogous to this case. In that case, the Appeals Court

held that a non-full-time employee did not automatically become

a member of a retirement system pursuant to § 3 (2) (a), and the

retirement board had not made any determination pursuant to

10

The board relies on Shea v. Selectmen of Ware, 34 Mass.

App. Ct. 333, 335-337 (1993), in which the Appeals Court upheld

the authority of a municipality to terminate the ability of

employees working under twenty hours per week to participate in

the same type of health insurance plan at issue in Lexington

Educ. Ass'n, 15 Mass. App. Ct. 749. However, that statute

contained no language comparable to § 3 (1) (a) (i), requiring

that the municipality "shall continue" providing insurance to

such employees until the occurrence of statutorily specified

events. See G. L. c. 32, § 3 (1) (a) (i); Shea, supra (nothing

in text, purpose, or legislative history supported determination

that municipality's decision to provide insurance was

irreversible).

15

§ 3 (2) (d) that the employee was eligible to become a member.

Manning, 29 Mass. App. Ct. at 254-255. Unlike the retirement

board in Manning, the board granted DeFelice membership because

it determined that she satisfied its eligibility requirement,

based on the board's interpretation of its own rule.

CRAB also points out that permitting municipal retirement

boards unilaterally to terminate a non-full-time employee's

membership in a retirement system would subject such employees

to a high degree of uncertainty. Indeed, if the board possessed

the breadth of discretion it claims, non-full-time employees

could lose their membership status whether they decreased their

hours voluntarily or involuntarily, or whenever the board alters

the criteria to exclude some non-full-time employees who had

previously been granted membership. We do not believe that the

Legislature intended to subject non-full-time employees to this

level of unpredictability. See G. L. c. 32, § 3 (1) (a) (i)

(status of member in service "shall continue" until specified

events [emphasis added]). See also Galenski, 471 Mass. at 309,

quoting Hashimi v. Kalil, 388 Mass. 607, 609 (1983) ("The word

'shall' is ordinarily interpreted as having a mandatory or

imperative obligation"). Instead, by establishing the authority

of municipal retirement boards to determine the eligibility of

non-full-time employees at the outset, the Legislature gave such

boards ample power to manage participation by non-full-time

16

employees in municipal retirement systems. See G. L. c. 32, § 3

(2) (d).

Municipal retirement systems may well place systemic strain

on municipal budgets. The existing legislative framework

provides a means for municipalities to address budget issues

prospectively by controlling when and how non-full-time

employees may, if at all, become members of the retirement

systems. Broader public policy decisions concerning municipal

pensions rest with the Legislature.

2. Interpretation of separation from service. The board

argues that, even if it does not have the authority to revoke a

non-full-time employee's membership once granted, DeFelice was

"removed" when she stopped working her second job at the end of

the 2000-2001 school year.11 The board contends that "removal"

is a statutorily specified circumstance under § 3 (1) (a) (i),

meaning that it had the authority to terminate DeFelice's

membership. As the facts are not in dispute, the question turns

on the interpretation of § 3 (1) (a) (i). We again start with

the language of the statute, giving due weight to CRAB's

expertise.

11

Although the board raised this issue below, CRAB did not

address it. We resolve the issue because, as the facts are

undisputed, the parties raise an important matter of pure

statutory interpretation.

17

Section 3 (1) (a) (i) provides that a member's status as a

"member in service" continues until the member's "prior

separation from the service becomes effective by reason of,"

among other things, "removal or discharge." The operative event

is the separation from service. Id. A "removal or discharge"

in and of itself does not terminate an individual's member in

service status. See id.

DeFelice remained in service even after she stopped working

her second job after the 2000-2001 school year. "Service" is

generally defined, with no distinction between full-time and

non-full-time employees, as "service as an employee in any

governmental unit for which regular compensation is paid."

G. L. c. 32, § 1. Following the nine-week period establishing

her eligibility, DeFelice remained "in service" of the

department in a non-full-time capacity for at least several

years. See id. Therefore, the statutory requirements for

terminating membership were not satisfied because no "prior

separation from [DeFelice's] service" had occurred. See G. L.

c. 32, §§ 1, 3 (1) (a) (i).

The board's reliance on Retirement Bd. of Attleboro v.

School Comm. of Attleboro, 417 Mass. 24 (1994), is misplaced.

That case involved another provision of G. L. c. 32 containing

18

the phrase "removal or discharge." Id. at 26-27.12 To give

effect to both terms, we concluded that a "removal" must mean

"something less than a complete termination of the employment

relationship" for purposes of certain procedural protections

owed to members in service. Id. at 27. Unlike § 3 (1) (a) (i),

however, the provision in that case did not hinge upon whether

there had been a separation from service. Compare G. L. c. 32,

§ 3 (1) (a) (i) (member in service status "shall continue" until

member's "prior separation from the service becomes effective by

reason of," among other things, "removal or discharge"), with

Retirement Bd. of Attleboro, 417 Mass. at 25 n.3 ("The removal

or discharge of [certain] member[s] in service . . . shall not

become effective unless and until a written notice thereof

containing a fair summary of the facts . . . has been filed with

the board"). Section 3 (1) (a) (i) is not satisfied even if

DeFelice was "removed" when she stopped working her second job

at the end of the 2000-2001 school year, because there was no

separation from service that became "effective by reason of"

that removal.

Conclusion. The board established a low threshold for

membership in its retirement system and decided DeFelice

satisfied that threshold when it granted her membership.

12

The language at issue in Retirement Bd. of Attleboro,

supra, no longer appears in G. L. c. 32, § 16.

19

DeFelice continued working for the department after she received

membership. Therefore, she became a "member in service" and her

status as such "shall continue" until her death or a separation

from service pursuant to one of the statutorily specified

circumstances in G. L. c. 32, § 3 (1) (a) (i). Because she

continued working for the same governmental employer, although

at reduced hours, there was no "separation from [her] service."

See id. As a result, DeFelice remained a member in service

during her continued part-time employment following the 2000-

2001 school year, and was eligible to apply for retroactive

membership. See G. L. c. 32, § 3 (3) (allowing employee to

obtain membership after date on which employee first became

eligible during "present period of service" and if employee

satisfies applicable age requirement).

We conclude that CRAB reasonably interpreted § 3. We

reverse the judgment of the Superior Court. A new judgment is

to be entered affirming the decision of CRAB.

So ordered.