December 16, 2010

Retirement incentives

Retirement incentives
Bellanca v Grand Island CSD, 275 AD2d 944

Sometimes the retirement incentives promised by the employer are not granted to the individual. This type of situation was the genesis of the Bellanca case.

Peter Bellanca and nine other teachers sued the Grand Island Central School District in an attempt to have the court rescind their having previously decided to elect early retirement. They asked the court to direct their reinstatement to their former positions with back pay and damages.

According to the teachers, the district induced them to accept early retirement by promising them special incentives.

Their complaint: the district did not provide the incentives to them as promised because their final average salary for the purpose of calculating their retirement allowance did not include their severance payment.

Section 431 of the Retirement and Social Security Law provides that after April 1, 1972, the salary base for the computation of retirement benefits paid by a public retirement system of this state shall not include: 1. Lump sum payments for deferred compensation, sick leave, accumulated vacation or other credits for time not worked; 2. Any form of termination pay; 3. Any additional compensation paid in anticipation of retirement: or 4. That portion of compensation earned during any twelve months included in such salary base period which exceeds that of the preceding twelve months by more than twenty per centum.

One of the issues concerned the district’s attempt to have the teachers’ petition dismissed on the theory that they had failed to exhaust their administrative remedies.

According to the district, the teachers should have filed a grievance as provided by collective bargaining agreement. As they had not, district argued that the teachers were barred from litigating claims alleging that the district’s action were negligent or constituted a fraudulent misrepresentation of fact or the parties’ mutual mistake of fact.

The Appellate Division said that none of the teachers failed to exhaust any available administrative remedies. Why not? Because, said the court, their complaints do not allege any violation of the collective bargaining agreement and thus does not fall within the agreement’s definition of a grievance.

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