In November of2005, SHSW&L filed suit in the Los Angeles Superior Court, on behalf of the LAPPOA and fifteen retired LASD employees, against the County of Los Angeles, seeking a legal declaration that LASD's practice of denying excess vacation cashouts to employees who were on a 4850 leave of absence, while allowing this benefit to other employees, illegally discriminated against industrially disabled employees. This case went to trial in April of 2007, after which the court entered judgment in favor of the PPOA and the fifteen individuals.

The suit stemmed from a county code section which provided that any provisions limiting the carryover of vacation shall not apply to employees during the time they are absent under section 4850 of the Labor Code. For the past several years, the LASD erroneously chose to interpret this code section to mean that any provisions allowingfor the cashout of excess vacation shall not apply to employees who are absent under section 4850, even though that is clearly not what the code section states or implies.

LASD's interpretation of this code section had aparticularly harmful effect on employees who were on a 4850 leave of absence during the year immediately prior to their retirement. In such cases, the employees were denied the cashout prior to their retirement, and were therefore deprived of the opportunity to include that payment in their pension base. This was an opportunity that was available to all other employees who had deferred excess vacation at the end of the year prior to their retirement, but who had not been on 4850 leave.

The County argued that it was justified in treating industrially disabled employees unfavorably to all other employess because (1) industrially disabled safety employees receive other benefits (such as 4850 pay) which tend to "equalize" the loss of this cashout benefit, and (2) the COunty is purportedly forced to incur great expense while these employees are on 4850 leave, by hiring replacements for them during their absence, many of whom must be paid on an overtime basis, and thus entitling the County to make up this loss by depriving these employees of the deferred excess vacation cashout to which they are otherwise entitled. The court rejected these arguments, stating thtat the State Legislature has seen fit to confer certain special beenfits on these employees in order to compensate them for the hazardous nature of the work that they undertake on behalf of the public. The Court thus held that the existence of these special benefits does not provide a rational basis for depriving these employees of other benefits that are being provided to everyone else.

Finding in favor of the PPOA and the retirees, the Court declared that (1) all employees with deferred excess vacation are entitled to a cashout at the end of the deferral year, even if that employee was on a 4850 leave that year, and (2) the County must report the value of those payments to the county retirement association as pensionable income.