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December 21, 2009

Preferred list rights following layoff

Preferred list rights following layoff
Bojarczuk v Mills, 98 NY2d 663

Joseph T. Bojarczuk was excessed when the Utica City School District abolished his position when the Oneida-Herkimer-Madison Board of Cooperative Educational Services (BOCES) took over its Alternative Educational Program. As Bojarczuk was “transferred to BOCES” with his position,
Utica did not include him on its “preferred list” for reemployment with the District should a suitable vacancy occur while his name was on the list.

According to
Utica, Bojarczuk "was afforded seniority rights under section 3014-a," and he had received all the rights to which he was entitled in connection with the layoff. The Commissioner of Education sustained Utica’s actions.

The Court of Appeals, however, disagreed, noting that Education Law Section 3014-a(4) provides that “[t]his section shall in no way be construed to limit the rights of any of such employees set forth in this section granted by any other provision of law.” Accordingly, ruled the court, the fact that Bojarczuk had been provided with Section 3014-a seniority rights did not preclude his having “additional recall rights” in the District under Sections 2510(3) and 3013(3) of the Education Law.

The decision states that a teacher whose position has been abolished during a BOCES takeover of a school district program has the right to be placed on the school district's preferred eligibility list for employment for seven years in accordance with sections 2510(3) and 3013(3), provided the teacher otherwise qualifies for the statutes’ benefits.

As the lower courts had not determined whether or not Bojarczuk qualified for placement on the
Utica School District preferred list, the case was remanded back to Supreme Court for such a determination.

The basic principle expressed by this decision:

If a teacher is excessed and his or her name is placed on a preferred list upon the abolishment of his or her teaching position, he or she is entitled, subject to seniority considerations, to be appointed to the next available vacancy in the school district in the tenure area in which he or she is certified the district decides to fill, unless he or she is found unqualified for that position by the District.

The fact that the teacher may obtain employment in another jurisdiction does not truncate his or her rights to reinstatement from the preferred list by the school district.

Some key considerations concerning preferred lists:

1. A preferred list comes into being when an individual having tenure or permanent status in the title is excessed as the result of the abolishment of a position.

2. Unless otherwise disqualified, an individual's name is continued on the preferred list until (a) he or she is reinstated from the list to the same or a similar position or (b) his or her eligibility for reinstatement from the list expires. Depending of the controlling statute providing for the establishment of the preferred list, an individual’s name may on a preferred list from two years, i.e., a “special military list” [Military Law Section 243.7] to seven years under the Education Law.

3. If additional positions are abolished on a later date, the names of the more recently excessed individuals would be placed on the same preferred list on the basis of seniority as among themselves. In other words, an individual who is first on an existing preferred list would be displaced to a lower rank on the list if the names of an individual having greater employment seniority are placed on the same preferred list at a later date.

4. Preferred lists do not "expire" but continue in existence as long as there is at least one eligible individual qualified for appointment from the list.

To illustrate this last point, assume that Bojarczuk is never reinstated from the preferred list. On the day before the last day of the seventh year from date when Bojarczuk's name was placed on the preferred list another layoff takes place and the name of the individual excessed is placed on the preferred list.

For one day both Bojarczuk name and this second individual's name are on the preferred list, in order of relative seniority as among themselves. If neither is reinstated from the preferred list on the following day, the preferred list continues in existence but thereafter would include only the name of the second individual. The preferred list then continues in existence as long as the second individual continues to be eligible for reinstatement from the preferred list.

Reinstatement from a preferred list, however, may raise other concerns. For example, nepotism. Section 3016 of the Education Law deals with the issue of the employment of a relative by blood or marriage of a member of its school board as a teacher by the district. In essence, it requires that any such appointment must be approved by a two-thirds vote of the board.

Does Section 3016 apply in situations involving the reinstatement of a relative of a school board member as teacher from a preferred list?

Barbara Gmelch thought it did and asked the Commissioner of Education to remove a school board member from his position because the board member did not advise the board that his daughter was among a number of teachers to be reinstated from a preferred list that resulted from the lay off of a number of teachers and that a two-thirds vote would be required with respect to her employment.*

The Commissioner dismissed Gmelch's appeal, agreeing with the school board Section 2510 mandates the reinstatement of a teacher from a preferred and thus it was required to reinstate the relative of a board member regardless of his or her relationship to the member.

In this instance the Commissioner ruled that reinstating the board member's daughter "was required by law and not within its discretion to decline" [Commissioner of Education Decision #12794].

* The record indicates that the teacher was employed by the district prior to the election of her father to the board.

December 01, 2009

Recognizing out-of-state same-sex marriages for purposes of public employee health insurance coverage and other benefits ruled lawful

Recognizing out-of-state same-sex marriages for purposes of public employee health insurance coverage and other benefits ruled lawful
Godfrey v Spano, 2009 NY Slip Op 08474, Decided on November 19, 2009, Court of Appeals [Decided with Lewis v New York State Department of Civil Service]

Plaintiffs in this action are taxpayers challenging directives recognizing out-of-state same-sex marriages for purposes of public employee health insurance coverage and other benefits.* The Court of Appeals held that that plaintiffs' actions were properly dismissed by the courts below.

Many residents of New York State in a same-gender relationship have traveled to Massachusetts, Connecticut, Iowa and Vermont, jurisdictions permitting same-gender marriage, for the purpose of marrying.

In response to this development, several state and county officials issued general directives relating to the recognition of those out-of-state same-sex marriages.

This appeal involved challenges to the lawfulness of two such directives: a Policy Memorandum, Employee Benefits Division Policy Memorandum issued by the Commissioner of the New York State Department of Civil Service, which became effective May 1, 2007* and an Executive Order issued by the County Executive of the County of Westchester, Westchester County Executive Order No. 3 of 2006.**

However, the Court of Appeals commented with respect to the action brought by Godfrey that it did adopt the Second Department's rationale for affirmance of the Supreme Court’s ruling, i.e., the Executive Order did not purport to change the law, because it included language directing recognition of same-sex couples "to the maximum extent allowed by law."

The high court said that it found such language ambiguous, and it said it “would not encourage executive officials to try to insulate their orders from judicial review by this means.” Instead the Court of Appeals sustained the result “because the Godfrey plaintiffs have failed to allege an unlawful expenditure of taxpayer funds, they have not stated a cognizable claim under General Municipal Law §51.”

As to the Lewis plaintiffs, the Court of Appeals noted that the only surviving causes of action were based on State Finance Law §123-b and the separation of powers doctrine.

As to Finance Law § 123-b, the court said although a taxpayer may bring suit under this statute to prevent the unlawful expenditure of state funds "whether or not such person is or may be affected or specially aggrieved" (State Finance Law §123-b [1]), there must be some specific threat of an imminent expenditure. In this instance the Court of Appeals ruled that “The State Finance Law claim of the Lewis plaintiffs fails to state a cause of action for the same reason that the General Municipal Law § 51 claim of the Godfrey plaintiffs fails.

Addressing the Lewis plaintiffs' action based on the separation of powers doctrine, essentially the complaint alleges that the Department of Civil Service acted "inconsistently with the Legislature's pronouncements on spousal benefits" and was thus in violation of Civil Service Law §164. In the words of the Court of Appeals: “The statute itself refutes plaintiffs' claim.”

Civil Service Law §161(1) provides that the President of the Civil Service Commission is "authorized and directed to establish a health insurance plan for state officers and employees and their dependents and officers" and provides that every state employee "shall be entitled to have his spouse and dependent children, as defined by the regulations of the president, included in the coverage upon agreeing to pay his contribution, if any, to the cost of such coverage for such dependents" (emphasis in the original).

Accordingly, said the court, the statute thus expressly gives the President of the Civil Service Commission the authority to define "spouse."

Moreover, said the court, the statute does not restrict the President's provision of health insurance to spouses and dependent children. The language is of entitlement, not restriction.

The Court of Appeals concluded by stating that "in each case the order of the Appellate Division should be affirmed with costs."

* The decision notes that “The Memorandum explained that the State had provided eligibility for employee benefits, including New York State Health Insurance Program benefits, to the domestic partners of State employees, including same-sex partners, since the mid-1990s. The coverage, while mandatory for the State, as an employer, itself, providing such coverage was discretionary for Participating Agencies (PAs) and Participating Employers (PEs).”

** The New York State Employees’ Retirement System recognized “same-sex marriages” for retirement benefit purposes if the union was performed in a jurisdiction where performing a same-sex marriage was lawful. It successfully defended a lawsuit challenging that policy [Godfrey v DiNapoli, 22 Misc.3d 249]. In the Godfrey case the jurisdiction was Canada.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08474.htm

City to pay 100% of the cost of health insurance for retired firefighters

City to pay 100% of the cost of health insurance for retired firefighters
Matter of Gooshaw v City of Ogdensburg, 2009 NY Slip Op 08738, decided on November 25, 2009, Appellate Division, Third Department

Thomas W. Gooshaw, a retired City of Ogdensburg firefighter, was the lead plaintiff in an action that alleged that the City had violated the terms of the collective bargaining agreement [CAB] in place at the time they retired. That agreement provided that the City would pay "100 percent of the cost" of their health insurance plus the employee contribution for health insurance for their dependents.

The City had been paying these premiums for health insurance for all retired firefighters and, in addition, had reimbursed them for any cost incurred in obtaining health coverage under Medicare Part B.

In 2005, petitioners filed a complaint claiming that the City had breached the CBA by refusing to cover the cost of these Medicare Part B premiums and sought a declaratory judgment to the effect that the City, under the CBA, was required to reimburse them for these payments.

Supreme Court, converted the action into a CPLR article 78 proceeding, applied a four-month statute of limitations and dismissed the petition as untimely. Gooshaw appealed.

The Appellate Division said that the principal claim made by Gooshaw was that the City breached the CBA by failing to honor their contractual obligation "to pay for one hundred percent (100%) of the cost of retirees' health insurance, including Medicare Part B premiums."

"[W]here the focus of the controversy is on an agency's breach of an express contractual right,” said the court, a contract action is the recommended remedy. Accordingly, said the court, "The proper vehicle for seeking damages arising from an alleged breach of contract by a public official or governmental body is an action for breach of contract, not a proceeding pursuant to CPLR article 78," citing Kerlikowske v City of Buffalo, 305 AD2d 997. Thus the six-year statute of limitations applies here (see CPLR 213). Therefore, the court erred in granting Ogdensburg’s motion for summary judgment and dismissing the petition as untimely.

In support of their motion, Gooshaw claims that because an arbitrator in an earlier similar grievance found that the CBA required the City to make these payments. In view this earlier determination, Gooshaw contended that the City should be estopped here from denying the existence of this contractual obligation.

The City, on the other hand, argued that “the doctrine of collateral estoppel” did not apply in this instance because the CBA has undergone extensive revisions as a result of ongoing negotiations between the City and the firefighters' union and that the contract that was before the arbitrator was not identical to the CBAs that were in effect when all of the Gooshaw petitioners retired.

The Appellate Division noted that the City was correct: the firefighters had not all retired at the same time and that the provisions of the CBAs in place on the date of their respective retirements were not, in each instance, entirely the same.

However, said the court, while the CBA as renegotiated limited the choice that retired firefighters had regarding their health plan, it did not alter or modify the City's obligation to provide them with a fully funded health insurance program. Further, the arbitrator concluded that the "City payment of Medicare reimbursement did not change with the changed language and for many years, through several contracts, so that the meaning of the contract remained the same after the language change."

Lastly, the arbitrator took specific note of the fact that while these CBAs had been the subject of extensive renegotiation during the 15-year period immediately preceding the arbitration, the City continued its practice of reimbursing retired firefighters for the payment of these premiums, and at no time was a provision included in the CBA to the effect that the City was not obligated to make these payments.

Accordingly, the Appellate Division ruled that the arbitrator's decision and her finding that the City is obligated to reimburse retired firefighters for these payments under the CBA “is dispositive of the claims raised here and the City is estopped from claiming otherwise in this litigation.” The court that Ogdensburg was required to reimburse retired firefighters for Medicare Part B premiums.

NYPPL Comments: A similar issue was considered by the Appellate Division in Myers v. City of Schenectady, 244 A.D.2d 845.

Decided over a decade ago, the decision explains the rational underlying Civil Service Law Section 167-a which provides, in pertinent part for the reimbursement for Medicare premium charges, as follows:

“Upon exclusion from the coverage of the health insurance plan of supplementary medical insurance benefits for which an active or retired employee or a dependent covered by the health insurance plan is or would be eligible under the federal old-age, survivors and disability insurance program, an amount equal to the premium charge for such supplementary medical insurance benefits for such active or retired employee and his dependents, if any, shall be paid monthly or at other intervals to such active or retired employee from the health insurance fund.”

In effect, this transfers to charges associated with providing medical and hospital benefits from the employer’s health insurance carrier to Medicare, which results in a reduction in the cost of providing health insurance directly through the employer’s health insurance plan.”

As the Myers’ court observed:

“Participation in part A of the Medicare program is mandatory at no cost to the retiree. However, participation in part B of the Medicare program is optional and if a retiree opts to participate therein, he or she must pay a premium. The City encouraged plaintiffs' class to enroll in Medicare part B because Medicare then became the retirees' primary insurance and the employer-provided health insurance became secondary, with a resultant reduction in premium cost to the City. If a retiree did not elect to participate in Medicare part B, the City continued to provide the retiree with the same fully paid health insurance coverage as it provided to its eligible employees. On the other hand, if a retiree opted for the Medicare part B coverage, the premium was automatically deducted from his or her social security benefits and the retiree was reimbursed by the City.

”In March 1994, the City unilaterally determined that it only would reimburse its retirees 50% of the cost of Medicare part B coverage and, in June 1994, the City ceased making reimbursements altogether. As a consequence, plaintiffs commenced this action seeking, inter alia, full reimbursement retroactively as a vested contract benefit.”

The court's conclusion:

“In this regard, we agree that the City's own 19-year practice of continuing to provide fully paid health insurance coverage to plaintiffs' class, even after the expiration of the various collective bargaining agreements pursuant to which they obtained such benefits, constitutes very substantial evidence that the provisions in question were intended to provide benefits to retirees for the entire period of their retirement. Clearly, one of the more important aids in the interpretation of a contract is the construction placed upon the agreement by the contracting parties (see, Atwater & Co. v Panama R. R. Co., 255 NY 496, 501; Matter of Mencher [Geller & Sons], 276 App Div 556, 565). As has been observed, " '[t]here is no surer way to find out what parties meant, than to see what they have done' " (Town of Pelham v City of Mount Vernon, 304 NY 15, 23, quoting Insurance Co. v Dutcher, 95 US 269, 273).”

N.B. Although the Gooshaw and other court decisions noted above refer to "renegotiated collective bargaining agreements," the employee organization and the employer could only agree upon the health insurance benefits available to active employees upon their retirement in the context of renegotiated or successor collective bargaining agreement or a "memorandum of understanding." Such discussions could not serve to diminish or impair the health insurance benefits available to those individuals already retired based on earlier collective bargaining agreement or "past practice" as such individuals are not employees for the purposes of the Taylor Law and thus the employee organizations may not represent those already retired in its collective bargaining with the employer.

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