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April 26, 2011

Transfer of functions

Transfer of functions
Metacarpa v Johnston, App. Div., Third Dept., 268 AD2d 938
[decided with Terrusa v Wing, 268 AD2d 938]

In 1997 the Department of Social Services [DSS] was dissolved and its functions were distributed among one existing State agency -- the Department of Health [DOH] and -- and two newly created State agencies -- the Office of Children and Family Services [OCFS] and the Office of Temporary and Disability Assistance [OTDA].

Some of the former DSS employees (the Metacarpa plaintiffs) were transferred to OCFS while others (the Terrusa plaintiffs) were transferred to OTDA.

The basic argument advanced in both actions: because these employees were engaged in Medicaid audit functions, which were transferred to DOH, Civil Service Law Section 70.2 required that they be transferred to Health rather than to other agencies.

The Appellate Division said that the sole issue to be determined was whether the determinations transferring these employees to either OCFS or OTDA were arbitrary, capricious or affected by error of law.

The court commenced its review by stating that the transfer of employees under Section 70(2) of the Civil Service is controlled by the State Department of Civil Service’s State Personnel Management Manual. The manual provides that the agency losing the function [here DSS], after consultation with the gaining agencies [i.e., OCFS and OTDA] and the appropriate control agencies [presumably Civil Service Department and the Division of the Budget], determines which employees in which titles are ‘substantially engaged in the performance of the function’ to be transferred.”

Addressing the objections raised by the Metacarpa and Terrusa plaintiffs with respect to their inclusion on the list of employees to be transferred to OCFS or OTDA and their exclusion from the DOH list, the Appellate Division found that: 

1. DSS employees who worked in defined program units within DSS (2,285 out of the total 4,450 DSS employees) followed those units when entire program units were transferred; and

2. The Metacarpa and Terrusa plaintiffs were determined not to work in a particular program unit because they carried out functions and duties, which supported a variety of programs and thus held “generic administrative support positions.” 

The court took special note of the fact that the Manual stated that “.... interdepartmental titles which primarily provide support of a variety of functions ... shall not generally be considered to be substantially engaged in the function being transferred.”

In other words, the duties of the Metacarpa and Terrusa plaintiffs were not sufficiently limited in scope so as to be deemed “substantially engaged in the functions transferred to Health.

This guideline, said the court, was “not irrational.” Further, the Appellate Division pointed out that former DSS officials making the transfer decisions had determined that the Metacarpa and Terrusa petitioners’ respective expertise and experience relating to Medicaid were not necessary for the continuation and integrity of the Medicaid program, which had been transferred to DOH.

Noting that a number of the plaintiffs “tacitly acknowledge” this point by arguing that the same “could be said” of others transferred to DOH, the Appellate Division decided that the rejection of the Metacarpa and Terrusa plaintiffs’ objection to the administrative decision was neither irrational nor arbitrary. The Supreme Court’s dismissal of the petitions was affirmed.

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