September 23, 2010

Rescinding a letter of retirement

Rescinding a letter of retirementElmira CSD v Newcomb, 266 AD2d 622, Motion for leave to appeal dismissed, 94 NY2d 899

Among the basic general rules applicable to resignation from public service are the following:

1. An individual may rescind his or her letter resignation prior to its delivery to the appropriate authority.

2. The letter of resignation is effective upon delivery to the appointing authority unless an “approval” or “acceptance” of the resignation is mandated by law or a provision in a collective bargaining agreement.

3. Once delivered, the individual cannot withdraw or rescind his or her resignation without the approval of the appointing authority.

4. An appointing authority may elect to ignore a resignation and proceed with disciplinary action against the individual.

Do the same rules apply in cases involving an individual’s submission of a letter indicating his or her intent to retire? In the Newcomb case, the Appellate Division considered the effort of an individual to rescind his notice of his intention to retire.

James E. Newcomb, a tenured guidance counselor employed by the Elmira City School District, told the district that he could not return to his position due to “medical problems.” He was absent for practically all of the Fall 1997 semester.

Eventually Newcomb and the district entered into a “settlement agreement” in lieu of district’s pursuing disciplinary action against Newcomb. Under the terms of the settlement Newcomb agreed to submit his “written notice of retirement,” to take effect February 1, 1998. The district agreed to keep Newcomb on the payroll from December 11, 1997 until January 31, 1998. Newcomb submitted his “retirement letter” in December 1997. For its part, the district continued Newcomb on the payroll.

However, in January 1998 Newcomb sent the district a second letter rescinding his December 1997 letter of retirement. This second letter was delivered to the district before Board of Education had taken formal action on Newcomb’s December retirement letter. The board voted to disregard Newcomb’s attempt to rescind his letter of retirement unless he (1) returned “the previously paid leave funds” and (2) “presented medical documentation certifying his ability to work.” Newcomb failed to comply with either of these conditions and ultimately was deemed “retired” and terminated from the payroll.

When Newcomb sued to void the board action and to reclaim his position, the district countered with a petition asking the court to rule that Newcomb “had no right to unilaterally rescind his retirement letter and that his retirement was effective February 1, 1998.” The district argued that it had acted in reliance of the settlement agreed to by the parties in lieu of its bringing disciplinary action against Newcomb, pursuant to which Newcomb agreed to retire, when it continued him on the payroll as agreed and had hired his replacement. The Supreme Court justice denied Newcomb’s motion for summary judgment and he appealed.

Newcomb’s basic argument:

This is a simple rescission before acceptance case, i.e., I rescinded my retirement letter prior to its acceptance by the Board and thus the district had no authority to terminate my employment.

The district position:

Newcomb’s letter of retirement was not a unilateral act on his part but rather reflected a settlement agreement between the parties and therefore it was not obligated to honor the letter Newcomb submitted in a unilateral effort to rescind his retirement letter.

The Appellate Division commenced its analysis be noting that “authority exists to support the general proposition that a retirement letter may be withdrawn prior to a legally binding acceptance by a board of education,” citing a number of court decision and rulings by the Commissioner of Education. This, according to the ruling, means that although submitting a notice of an intention to retire simultaneously implies a “resignation” from one’s position, delivery of the “retirement letter” is not the operative factor; the appointing authority must take some action to “finalize it.”

The Appellate Division, however, concluded that there were questions of fact that barred the application of this general principle -- a retirement letter must be formally acted upon to be effective -- at this stage of the litigation. Among the issues of fact to be resolved:

1. Was Newcomb’s retirement letter, submitted in compliance with a settlement of a disciplinary action, essentially a term or condition of the settlement and thus he could not unilaterally rescind it notwithstanding the fact that the board had not formally acted on his retirement letter; and, if not,

2. Was the absence of a formal acceptance by the Board fatal in view of the fact that it had indicated its acceptance of the settlement by continuing Newcomb on the payroll and recruiting his replacement?

The Appellate Division, ruling that the Supreme Court was correct in denying Newcomb’s motion for summary judgment, returned the matter to Supreme Court for its consideration of these issues.
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