Don’t Stop the Investigation: Public employers must continue investigating employee’s misconduct despite retirement mid-investigation

Government Code section 7522.76, which took effect January 1, 2026, clarifies that a public employee’s or public officer’s (elected or appointed) retirement is not  a valid reason for public agencies to prematurely terminate an administrative investigation into that person’s alleged misconduct arising out of the performance of their official duties, in pursuit of the office or appointment, or in connection with obtaining salary, disability retirement, service retirement, or other benefits.  Instead, the public agency employer must  continue and finalize the investigation, and, if the investigation indicates the public employee or public officer may have committed a crime, the public agency must report the criminal conduct to law enforcement.

Reasons Underlying Need for Government Code section 7522.76

Government Code section 7522.76 is designed to prevent public employees and officers accused of potentially criminal misconduct from evading forfeiture of their public retirement system benefits by retiring during the investigation. Under existing law, public employees convicted of any state or federal felony for conduct arising from their official duties, their pursuit of the office or appointment, or in connection with their obtaining any benefit (i.e., salary, disability retirement, or service retirement), must forfeit their accrued rights and benefits in any public retirement system.  The convictions also preclude them  from accruing any additional benefits in that retirement system. Similarly, elected public officers convicted of any felony, during or after holding office, that arises directly from their official duties must forfeit their accrued rights, benefits, and membership in any public retirement system of which they are a part. The enumerated list of applicable criminal conduct includes accepting, giving, or offering to give, any bribe; the embezzlement of public money; extortion or theft of public money; perjury; or conspiracy to commit those crimes.

These laws require a conviction in order for the forfeiture of the public retirement system benefits to take effect. Similarly, the California Public Employees’ Retirement System (CalPERS) may only take action to reduce or revoke retirement benefits after felony convictions are secured.   Prior to Government Code section 7522.76, some public employees and officers evaded convictions because the public agency employers did not proceed with or conclude their investigations of alleged potential criminal misconduct and/or did not report the potential criminal misconduct to law enforcement when the public employees and officers accused of the alleged misconduct retired.   

Government Code section 7522.76 seeks to hold the public employees and officer accountable for their misconduct  by requiring public employers to continue their misconduct investigation, even if the subject employee or public officer retires during the process. This obligation ensures that evidence of wrongdoing is documented, and any alleged criminal activity is  referred to law enforcement.  

Key Takeaways for Public Employers:

When a misconduct investigation indicates potential criminal conduct by the public employee or public officer:

• Proceed:  Continue to investigate, even when the public employee or officer has retired during the investigation.
• Report to Law Enforcement: Refer the potential criminal misconduct to the appropriate law enforcement agency before closing the investigation.

Even when a workplace investigation involves other alleged wrongdoing, such as claims of harassment, discrimination, or retaliation, a public agency employer should not discontinue the investigation when the public employee/public official accused of the alleged misconduct retires or resigns.  The law requires employers to conduct prompt, complete and thorough investigations of such allegations.  When an employer does not investigate allegations because the alleged wrongdoer resigned or retired, the employer risks liability for failing to conduct the investigation and taking appropriate corrective action.  In light of these obligations and the requirements under Government Code section 7522.76, public agency employers should be careful to avoid the mistake of not conducting or not concluding a workplace investigation  because the employee or public official who engaged in the alleged misconduct has retired or resigned.

Aleshire & Wynder LLP provides unparalleled legal representation to local communities throughout California.  Our attorneys have been loyally serving public agencies for over 50 years. For further information, please contact Denise Wong of Aleshire & Wynder, LLP’s at dwong@awattorneys.com or visit our website at awattorneys.com.