Demoted whistle blower entitled to reinstatement to the higher-level former position or equivalent and lost salary plus “predetermination interest”

Demoted whistle blower entitled to reinstatement to the higher-level former position or equivalent and lost salary plus “predetermination interest”
Tipaldo v Lynn as Commissioner of the NYC Department of Transportation, 2010 NY Slip Op 06467, decided on August 24, 2010, Appellate Division, First Department

In August 1996, John Tipaldo, a long-time manager with the New York City Department of Transportation (DOT), was promoted to the position of Acting Assistant Commissioner for Planning. Tipaldo was earning an annual salary of $55,000 at the time and was advised that he would be given a $25,000 salary increase if his appointment became permanent.

Less than a year later Tipaldo was demoted from the Acting Assistant Commissioner position. As a result of the demotion, Tipaldo appointment to Assistant Commissioner position did not become permanent and he never received the $25,000 increase in salary.

Tipaldo challenged his demotion citing Civil Service Law §75-b, contending the demotion was in retaliation for his having reported to the Department of Investigation that a superior violated bidding rules (see 48 AD3d 361).*

The instant appeal was from an order following a nonjury trial on the issue of damages following the Appellate Division’s earlier ruling. This appeal challenged Supreme Court's awarding Tipaldo $175,000 in back pay, but without interest and the court’s directive that Tipaldo reinstated to the same, or to an equivalent position to the one that he had held before the retaliatory personnel action that gave rise to his initial lawsuit.

The Appellate Division affirmed the lower court’s ruling with respect to Tipaldo’s reinstatement but said that the award of back salary had to be redetermined because:

1. Tipaldo was entitled to an interest award as provided by Civil Service Law section 75-b; and

2. The record supports Tipaldo's request that he be reinstated "to the same position held before the retaliatory personnel action, or to an equivalent position" as provided by Labor Law §740[5][b]).

The Department, objecting to Tipaldo's reinstatement, argued that he was not entitled to such reinstatement as he had declined promotions 2000, 2001 and 2002. The Appellate Division rejected the Department's theory, commenting that the undisputed testimony of his current supervisor was that at the time of those offers of promotion Tipaldo feared that any promotion would be met with retaliatory action by agency personnel.**

As to the amount of back salary awarded by Supreme Court, the Appellate Division noted that Tipaldo had called an economics expert to establish the amount of back pay to which he was entitled. The expert testified that Tipaldo had lost $388,243 in earnings as a direct result of the retaliatory actions taken by defendants. Tipaldo’s expert also testified that, applying the statutory interest rate of 9% to the lost earnings, Tipaldo was owed a total of $662,721.

In contrast, said the Appellate Division, Supreme Court “without any explanation for how it arrived at the figure, awarded Tipaldo $175,000 in back pay” and denied Tipaldo’s request for pre-determination interest.

Significantly, the Appellate Division noted that the Department “chose not to call their own expert to offer an alternative theory of the earnings which plaintiff would have lost had he not been the victim of retaliation, or to explain why plaintiff's expert's analysis was flawed in any respect.” Thus, said the court, “the only expert opinion before us is [Tipaldo's] and we see no reason to disturb it.”

Further, the Appellate Division held that that predetermination interest is generally available to whistle blowers suing pursuant to Civil Service Law §75-b.

* See Tipaldo v. Lynn, 48 AD3d 361 for the Appellate Division’s ruling in this earlier case.

** The Appellate Division indicated that the fact that Tipaldo declined such promotions did not militate against honoring his request for reinstatement to the higher-level position at this time.

The instant decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_06467.htm

The earlier decision, 48 AD3d 361, is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2008/2008_01801.htm
.