Audits and reports were issued by New York State Comptroller Thomas P. DiNapoli during the week ending September 28, 2018

Audits and reports were issued by New York StateComptroller Thomas P. DiNapoli during the week ending September 28, 2018

Source: Office of the State Comptroller

Click on text highlighted in color to access the full report

 
City University of New York (CUNY): Controls Over CUNY Fully Integrated Resources and Services Tool (Follow-Up) (2018-F-4)
An initial audit released in September 2016 found that CUNY’s processes and controls did not adequately ensure that users had access only to functions that were necessary to meet their needs. In a follow-up, auditors found CUNY officials have made progress in addressing the issues identified in the initial report. Of the nine prior audit recommendations, one was implemented, six were partially implemented, and two were not implemented.

Department of Labor (DOL): Examination of Unemployment Insurance Willful Overpayments (2016-BSE1-02)
DOL did not consistently assess penalties in accordance with law and/or DOL procedures resulting in the failure to assess up to $311,775 in penalties—more than 10 percent of the penalty amount examined. This includes up to 1,679 penalties valued at $307,753 that were not assessed at all and up to 71 penalties valued at $4,022 that were under-assessed by DOL.

State Education Department: Programs for Little Learners (PFLL): Compliance With the Reimbursable Cost Manual (2017-S-87)
For the three fiscal years ended June 30, 2015, auditors identified $66,597 in ineligible costs that PFLL reported for state reimbursement, including $58,481 in personal service costs and $8,116 in other than personal service costs.

Department of Health (DOH) and the Office of Temporary and Disability Assistance (OTDA): Oversight of Hotels and Motels Used for Homeless Mixed-Use Temporary Residency (Follow-Up) (2018-F-12)
An initial audit report released in June 2017 concluded that, of the 80 hotels and motels auditors visited, 24 (30 percent) were in generally unsatisfactory condition, exhibiting problems such as mold; water damage; structural damage; and fire safety issues, such as exposed wiring and missing smoke detectors. Further, OTDA had not provided local Social Services Districts (SSDs) with sufficient guidance about corrective action plans to address unsatisfactory conditions. In a follow-up, auditors found that OTDA and DOH have implemented the joint recommendation contained in the original audit report, while OTDA has implemented two of its three recommendations.

Department of Health: Examination of Island Peer Review Organization (IPRO) (2018-BSE03-01)
DOH entered into a $79 million contract with IPRO to provide services related to Medicaid activities.  This contract and its amendments were not subject to approval by the Comptroller’s Office. IPRO entered into subcontractor agreements with five firms to help perform the services. Auditors found DOH approved payments to IPRO for subcontractor expenses that were not allowable under the contract. As a result of the audit, DOH prevented or recovered more than $133,000 in unallowable expenses. DOH has since strengthened their review of similar contract payments.

Department of Health (DOH): Medicaid Payments to Medicare Advantage Plan Providers (2016-S-54)
Auditors reviewed selected Medicare Advantage plan contracts offered by Fidelis and WellCare and, based on judgmental sampling, determined certain providers reported inflated Medicare Part C cost-sharing liabilities on 7,072 Medicaid claims resulting in overpayments of $770,935. Auditors determined three of the providers were overpaid 58, 74, and 79 percent of the total Medicaid payments they received for claims in the review. Auditors analyzed the remaining Part C cost-sharing claims billed by these providers during the audit period and found – if the rate of overpayment is consistent with the initial review – Medicaid potentially overpaid an additional $562,356 to these providers.

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 150,000 contracts, billions in state payments and public authority data. 

 

The availability of General Municipal Law §50-e(1)(b) rights to "defense and indemnification" to a municipal employees in an action brought in federal court

The availability of General Municipal Law §50-e(1)(b) rights to "defense and indemnification" to a municipal employees in an action brought in federal court

Richard Hardy  v Daley et. al., [New York City police officers in their personal rather than their official capacities], United States Court of Appeals, Second Circuit, C.V. 17‐2906

The United States District Court, Southern District, dismissed Richard Hardy's amended complaint alleging sexual assault, intentional infliction of emotional distress, and failure to intervene federal civil rights claims with prejudice for failure to state a cause of action.

The Circuit Court sustained the district court's ruling with respect to the federal civil rights claims explaining that such a complaint must plead "enough facts to state a claim to relief that is plausible on its face ... and allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."

Hardyʹs federal complaint, however, included New York State law claims, which the district court dismissed "failure to serve a timely notice of claim." The Circuit Court ruled that the district court had err in so doing.

Under New York law, explained the Circuit Court, service of a notice of claim is a condition precedent to tort actions against a municipal entity or its employees and these provision apply "to state law claims even when they are brought in federal court." In contrast, in actions commenced against a municipal employee but not against the employing municipal corporation,* the service of a notice of claim upon the corporation is "required only if the corporation has a statutory obligation to indemnify [the employee]" pursuant to §50-e(1)(b) of the General Municipal Law.

A municipality, however, is required to indemnify its employee only if his or her liability arose as the result of an act or omission constituting conduct "within the scope of his [or her] employment and in the discharge of his [or her] duties." Noting that Hardyʹs state law tort claims against defendants in their individual capacities are founded on alleged conduct that would be well beyond the scope of employment the Circuit Court explained that such allegations "would, by definition, have constituted 'intentional wrongdoing' [whereby] defendants would not have a right to indemnification by their public employer" otherwise available to such employees pursuant to §50-e(1)(b) of the General Municipal Law.

Accordingly, the Circuit Court found that Hardyʹs state law tort claims were not procedurally barred for failure to file a notice of claim and remanded the case is "for further proceedings consistent with this ruling."

* Service of the notice of claim upon an officer, appointee or employee of a public corporation shall not be a condition precedent to the commencement of an action or special proceeding against such person. If an action or special proceeding is commenced against such person, but not against the public corporation, service of the notice of claim upon the public corporation shall be required only if the corporation has a statutory obligation to indemnify such person under this chapter or any other provision of law. The defendants are New York City police officers being sued in their personal rather than their official capacities and the City of New York is not a defendant in this action.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/ed1af089-8cc6-4bef-b0d9-6a58e44cfc23/4/doc/17-2906_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/ed1af089-8cc6-4bef-b0d9-6a58e44cfc23/4/hilite/

Appealing summary judgment in favor of the employer in an action involving alleged a racially hostile work environment and retaliation claims

Appealing summary judgment in favor of the employer in an action involving alleged a racially hostile work environment and retaliation claims

Berrie v. Bd. of Educ. of the Port Chester-Rye Union Free Sch. Dist. et al., USCA, Second Circuit, 17-2045-cv

Gregory Tyrone Berrie, the Plaintiff in Action I, alleged that the Port Chester-Rye Union Free School District [Board] had subjected him to a racially hostile work environment and retaliated against him following his filing complaints pursuant to Title VII of the Civil Rights Act of 1964 (“Title VII”) and the New York State Human Rights Law (“NYSHRL”), and against all named defendants pursuant to 42 U.S.C. §§1981 and 1983.

Sustaining the district court's granting the employer's motion for summary judgment dismissing Berrie's action, the Circuit Court of Appeals indicated that, with respect to the issues presented to it on appeal, it would address them "only as necessary to explain [its] decision to affirm" the lower court's disposition of the matter. Among the issues address by the Circuit Court were the following:

1. Consideration to be given to hearsay statements in the record. Although certain statements are hearsay as presented in the record, the court observed that such evidence could be presented in admissible form as live testimony from the students. Thus, said the court, it "could consider them on summary judgment."

2. Failure to address certain references in the record. The court noted that there were references in the record concerning certain incidents that Berrie did not discuss in his briefing and the Circuit Court concluded that "it appears" they are not part of Berry's claims.

3. Hostile work environment claims. As to Berrie’s hostile work environment claims, the Circuit Court said that district court reasoned that Defendants’ conduct was not sufficiently severe or pervasive to constitute a hostile work environment. With respect to the Board, the district court concluded that the Board had met its burden to establish the Faragher/Ellerth affirmative defense.*

As to Berrie’s retaliation claims, the district court concluded that Berrie had shown no adverse employment action against him that was causally related to Berrie’s complaints of discrimination.

Reviewing the district court’s grant of summary judgment de novo, the Circuit Court said that it would “resolve all ambiguities and draw all permissible factual inferences in favor of the non-moving party, and will affirm summary judgment only if the moving party shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Further, the Circuit Court, citing Lyons v. Lancer Ins. Co., 681 F.3d 50, said “[t]he mere existence of a scintilla of evidence in support of the [non-movant’s] position will be insufficient” to defeat summary judgment."

With respect to Barry's "hostile work environment claims, the court explained:

a. “To establish a hostile work environment claim . . . a plaintiff must . . . show that the workplace is permeated with discriminatory intimidation, ridicule, and insult, that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment” and such mistreatment must have occurred “because of [the] employee’s protected characteristic, such as race or national origin,” although the protected characteristic need not be “the only motivating factor.”

b. “A hostile environment claim must be evaluated on the basis of the cumulative effect of the abusive conduct” by examining the totality of the circumstances, including: the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with the victim’s job performance.”

c. The hostile and abusive conduct alleged must be severe or pervasive both subjectively to the plaintiff and objectively to a “reasonable person.”

d. In considering the totality of the circumstances, there must be “some circumstantial or other basis for inferring that incidents [race-]neutral on their face were in fact discriminatory."

The Circuit Court found that "several of Berrie’s most substantial allegations are unsupported by the record evidence, or else not attributable to discriminatory animus."

Accordingly, the court held that summary judgment was warranted on Berrie’s hostile work environment claims.

With respect to Barry's retaliation claims, the Circuit Court said it evaluates retaliation claims under the burden-shifting framework articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792.

4. Unlawful retaliation claims. To establish a prima facie case of unlawful retaliation, “an employee must show that (1) he was engaged in protected activity; (2) the employer was aware of that activity; (3) the employee suffered a materially adverse action; and (4) there was a causal connection between the protected activity and that adverse action.”

A materially adverse action is one that “produces an injury or harm” in that it “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination” and "retaliatory actions need not be a “materially adverse change in the terms and conditions of employment.”

In contrast, the court observed that “trivial harms—i.e., those petty slights or minor annoyances that often take place at work and that all employees experience—are not materially adverse.” Further, “[m]aterial adversity is to be determined objectively, based on the reactions of a reasonable employee.”

To establish causation, a plaintiff may rely on evidence “that the protected activity was followed closely by discriminatory treatment, or [use] other circumstantial evidence such as disparate treatment of fellow employees who engaged in similar conduct” and/or “evidence of retaliatory animus directed against the plaintiff by the defendant.” However, said the Circuit Court, "[t]emporal proximity alone is generally insufficient after about three months."

Accordingly, the Circuit Court, Berrie did not establish a prima facie case of retaliation, and summary judgment was warranted on Berrie’s retaliation claims.

5. Evidentiary ruling by the federal district court. With respect to Barry's objections to certain evidentiary rulings made by the lower court underlying its granting the Defendant's motion for summary judgment as constituting an "abuse of discretion" the Circuit explained that "[a] district court abuses its discretion when it bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or renders a decision that cannot be located within the range of permissible decisions.”

Under the controlling local rule, Local Rule 56.1(c), a fact asserted in the moving party’s statement “will be deemed admitted unless controverted . . . by the opposing party.”

As the district court noted, Berrie had the opportunity "to take discovery and his counterstatement failed to impugn the motives and counter the testimony of witnesses whose testimony defeated his claims."

Accordingly, the Circuit Court ruled that the district court did not abuse its discretion in deeming admitted facts that Berrie failed to properly dispute.

* This defense takes its name from the two US Supreme Court decisions that created it: Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). Typically Faragher-Ellerth has been relied upon by defendants in action involving claims of hostile work environment sexual harassment but has cited in defending against claims of hostile work environment harassment not alleged to constituted sexual harassment.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/ad835c46-7c98-435f-8b11-09d6d90547f6/1/doc/17-2045_SO.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/ad835c46-7c98-435f-8b11-09d6d90547f6/1/hilite/

How much privacy do public employees actually have?

How much privacy do public employees actually have?

Source: WORKFORCE, a publication of Governing.com

The digital age, new laws and recent events have created tension between government's transparency and the privacy of the people who work for it.

The full text of the article is posted on the Internet at:

http://www.governing.com/topics/workforce/gov-government-public-employee-privacy.html?utm_term=How%20Much%20Privacy%20Do%20Public%20Employees%20Actually%20Have&utm_campaign=LGBT%20Rights%27%20Longtime%20Leader%20Becomes%20Transgender%20Battleground%20State&utm_content=email&utm_source=Act-On+Software&utm_medium=email

Appealing summary judgment in favor of the employer in an action involving alleged a racially hostile work environment and retaliation claims

Appealing summary judgment in favor of the employer in an action involving alleged a racially hostile work environment and retaliation claims

Berrie v. Bd. of Educ. of the Port Chester-Rye Union Free Sch. Dist. et al., USCA, Second Circuit, 17-2045-cv

Gregory Tyrone Berrie, the Plaintiff in Action I, alleged that the Port Chester-Rye Union Free School District [Board] had subjected him to a racially hostile work environment and retaliated against him following his filing complaints pursuant to Title VII of the Civil Rights Act of 1964 (“Title VII”) and the New York State Human Rights Law (“NYSHRL”), and against all named defendants pursuant to 42 U.S.C. §§1981 and 1983.

Sustaining the district court's granting the employer's motion for summary judgment dismissing Berrie's action, the Circuit Court of Appeals indicated that, with respect to the issues presented to it on appeal, it would address them "only as necessary to explain [its] decision to affirm" the lower court's disposition of the matter. Among the issues address by the Circuit Court were the following:

1. Consideration to be given to hearsay statements in the record. Although certain statements are hearsay as presented in the record, the court observed that such evidence could be presented in admissible form as live testimony from the students. Thus, said the court, it "could consider them on summary judgment."

2. Failure to address certain references in the record. The court noted that there were references in the record concerning certain incidents that Berrie did not discuss in his briefing and the Circuit Court concluded that "it appears" they are not part of Berry's claims.

3. Hostile work environment claims. As to Berrie’s hostile work environment claims, the Circuit Court said that district court reasoned that Defendants’ conduct was not sufficiently severe or pervasive to constitute a hostile work environment. With respect to the Board, the district court concluded that the Board had met its burden to establish the Faragher/Ellerth affirmative defense.*

As to Berrie’s retaliation claims, the district court concluded that Berrie had shown no adverse employment action against him that was causally related to Berrie’s complaints of discrimination.

Reviewing the district court’s grant of summary judgment de novo, the Circuit Court said that it would “resolve all ambiguities and draw all permissible factual inferences in favor of the non-moving party, and will affirm summary judgment only if the moving party shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Further, the Circuit Court, citing Lyons v. Lancer Ins. Co., 681 F.3d 50, said “[t]he mere existence of a scintilla of evidence in support of the [non-movant’s] position will be insufficient” to defeat summary judgment."

With respect to Barry's "hostile work environment claims, the court explained:

a. “To establish a hostile work environment claim . . . a plaintiff must . . . show that the workplace is permeated with discriminatory intimidation, ridicule, and insult, that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment” and such mistreatment must have occurred “because of [the] employee’s protected characteristic, such as race or national origin,” although the protected characteristic need not be “the only motivating factor.”

b. “A hostile environment claim must be evaluated on the basis of the cumulative effect of the abusive conduct” by examining the totality of the circumstances, including: the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with the victim’s job performance.”

c. The hostile and abusive conduct alleged must be severe or pervasive both subjectively to the plaintiff and objectively to a “reasonable person.”

d. In considering the totality of the circumstances, there must be “some circumstantial or other basis for inferring that incidents [race-]neutral on their face were in fact discriminatory."

The Circuit Court found that "several of Berrie’s most substantial allegations are unsupported by the record evidence, or else not attributable to discriminatory animus."

Accordingly, the court held that summary judgment was warranted on Berrie’s hostile work environment claims.

With respect to Barry's retaliation claims, the Circuit Court said it evaluates retaliation claims under the burden-shifting framework articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792.

4. Unlawful retaliation claims. To establish a prima facie case of unlawful retaliation, “an employee must show that (1) he was engaged in protected activity; (2) the employer was aware of that activity; (3) the employee suffered a materially adverse action; and (4) there was a causal connection between the protected activity and that adverse action.”

A materially adverse action is one that “produces an injury or harm” in that it “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination” and "retaliatory actions need not be a “materially adverse change in the terms and conditions of employment.”

In contrast, the court observed that “trivial harms—i.e., those petty slights or minor annoyances that often take place at work and that all employees experience—are not materially adverse.” Further, “[m]aterial adversity is to be determined objectively, based on the reactions of a reasonable employee.”

To establish causation, a plaintiff may rely on evidence “that the protected activity was followed closely by discriminatory treatment, or [use] other circumstantial evidence such as disparate treatment of fellow employees who engaged in similar conduct” and/or “evidence of retaliatory animus directed against the plaintiff by the defendant.” However, said the Circuit Court, "[t]emporal proximity alone is generally insufficient after about three months."

Accordingly, the Circuit Court, Berrie did not establish a prima facie case of retaliation, and summary judgment was warranted on Berrie’s retaliation claims.

5. Evidentiary ruling by the federal district court. With respect to Barry's objections to certain evidentiary rulings made by the lower court underlying its granting the Defendant's motion for summary judgment as constituting an "abuse of discretion" the Circuit explained that "[a] district court abuses its discretion when it bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or renders a decision that cannot be located within the range of permissible decisions.”

Under the controlling local rule, Local Rule 56.1(c), a fact asserted in the moving party’s statement “will be deemed admitted unless controverted . . . by the opposing party.”

As the district court noted, Berrie had the opportunity "to take discovery and his counterstatement failed to impugn the motives and counter the testimony of witnesses whose testimony defeated his claims."

Accordingly, the Circuit Court ruled that the district court did not abuse its discretion in deeming admitted facts that Berrie failed to properly dispute.

* This defense takes its name from the two US Supreme Court cases that created it: Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). Typically Faragher-Ellerth has been relied upon by defendants in action involving claims of hostile work environment sexual harassment but has cited in defending against claims of hostile work environment harassment not alleged to constituted sexual harassment.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/ad835c46-7c98-435f-8b11-09d6d90547f6/1/doc/17-2045_SO.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/ad835c46-7c98-435f-8b11-09d6d90547f6/1/hilite/

Public employers may prohibit its employees from campaigning for, and holding, elected office subject to its action satisfying the so-called Pickering Balancing Test

Public employers may prohibit its employees from campaigning for, and holding, elected office subject to its action satisfying the so-called Pickering Balancing Test

Matter of Spence v New York State Dept. of Agric. & Mkts., 154 AD3d 1234, Decided October 26, 2017

In the Matter of Wayne Spence, as President of the New York State Public Employees Federation, AFL-CIO, et al. v New York State Department of Agriculture and Markets et al., 2018 NY Slip Op 06071, Court of Appeals, Decided on September 18, 2018

Gregory Kulzer and Ronald Brown were employed as Dairy Product Specialists by the New York State Department of Agriculture and Markets [Department]. Their duties included inspecting and rating milk plants and farms in accordance with state and federal law.

In 2013, Kulzer submitted a request for "approval of outside activities" to the Department to campaign for the elected position of Lewis County Legislator. His request was approved, subject to certain restrictions, and he successfully campaigned for and was sworn in as a Lewis County Legislator in January 2014. Upon expiration of the Department's initial approval, Kulzer submitted a renewed request seeking continued approval to serve as a Lewis County Legislator. In August 2014, the Department disapproved Kulzer's request and subsequently the Commissioner sustained the disapproval on the ground that, among other things, Kulzer's outside activities created the appearance of a conflict of interest.

Brown subsequently submitted a request for approval of outside activities to the Department, seeking approval to campaign for and serve as an Oneida County Legislator. Brown's request was disapproved by the Department, also on the ground that this outside activity would create the appearance of a conflict of interest, and, upon appeal, the Commissioner upheld the disapproval.*

Following these actions the Department revised its Employee Policies Handbook with respect to employees' outside activities providing that "[a]ny employee that holds a position that requires him or her to conduct inspections of regulated parties may not campaign for or hold elected office."*

Wayne Spence, as President of the New York State Public Employees Federation, et al, [Petitioners] initiated a CPLR Article 78 proceeding challenging the Department's disapproval of the requests submitted by Kulzer and Brown to campaign for and serve as county legislators, contending that the Department's determinations and subsequent amendment of its outside-activities policy violated the First Amendment of the Constitution of the United States and were otherwise arbitrary, capricious and without lawful authority.

Supreme Court granted the Department's motion to dismiss the Petitioners' Article 78 action and Petitioners appealed the Supreme Court's decision to the Appellate Division contending that the lower court had erred when found that the Department's disapproval of Kulzer's and Brown's requests to campaign and hold elected office and the revision of its outside activities policy did not violate the First Amendment.

The Appellate Division, citing Pickering v Board of Education of Township High School District, 391 US 563, noted that although "it is well settled that public employees do not 'relinquish the First Amendment rights [that] they would otherwise enjoy as citizens' as a result of their public employment," nevertheless upon entering government service, "public employees do accept certain restraints or limitations on their free speech rights" as it is recognized that the State has an interests as an employer in regulating the speech of its employees that differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general.**

In the words of the Appellate Division, "[t]he primary issue, therefore, is whether Supreme Court erred when it determined that the Department's interest in reducing potential unethical behavior and preserving the professionalism and integrity of the Department outweighed the interest of Kulzer and Brown to serve dual roles as both government inspectors and candidates for elected office."

Applying the so-called Pickering Balancing Test, courts have made clear that such a balance will tip in the employer's favor so long as "(1) the employer's prediction of the disruption that such speech will cause is reasonable; (2) the potential for disruption outweighs the value of the speech; and (3) the employer took the adverse employment action not in retaliation for the employee's speech, but because of the potential for disruption."

Here the Appellate Division found that Supreme Court had properly determined that the Pickering balance tips in the Department's favor and, therefore, the Department's disapprovals and revised outside activities policy were not unconstitutional. In effect the court decided that the  Department did not act arbitrarily or capriciously when it revised its outside activities policy nor when it disapproved Kulzer's and Brown's requests to campaign for and hold elected office, explaining that "so long as the Department's determinations have 'a rational basis, [they] will be sustained, even if a different result would not be unreasonable.'"

The Court of Appeals, Judges Rivera and Wilson, in a separate opinion, dissenting, sustained the Appellate Division ruling holding that "the challenged policy has not been shown to be unconstitutional."

* Upon disapproval of Kulzer's request to continue serving as Lewis County Legislator, the Department informed Kulzer that, absent his resignation from the County Legislature, he would be subject to disciplinary action. Kulzer did not resign from his position in the County Legislature and, as a result, in May 2015, the Department initiated disciplinary proceedings against him. It appears that said disciplinary proceedings have been held in abeyance pending the outcome of the instant appeal. Matter of Spence v New York State Dept. of Agric. & Mkts., 154 AD3d 1234, Decided October 26, 2017; affirmed, Court of Appeal, 2018 NY Slip Op 06071.

** N.B. The federal Hatch Act bars partisan political activities by certain State and municipal employees

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_07506.htm

Determining the availability of arbitration to resolve a dispute between a public employer and an employee organization

Determining the availability of arbitration to resolve a dispute between a public employer and an employee organization
Town of North Hempstead v  Civil Service Employees Association, Inc., Local 1000, 2018 NY Slip Op 06098, Appellate Division, Second Department

An employee of the Town of North Hempstead was served with nine individual disciplinary notices for various instances of alleged "misconduct and insubordination." Each notice individually proposed a penalty of a five-day suspension without pay in the event the employee was found guilty of the charge[s] and specification[s] set out in that particular notice of discipline.

The employee was found guilty of the charge[s] and the specification[s] set out in each one of the nine notices of discipline and filed grievances appealing each of the nine disciplinary decisions and the penalties imposed by the appointing authority. All of the employee's administrative appeals submitted in accordance with the relevant procedural steps set out in the Collective Bargaining Agreement [CBA] between the parties were denied. Ultimately the employee's collective bargaining representative, the Civil Service Employees Association, Inc., Local 1000, [CSEA] filed a demand to arbitrate the employee's nine disciplinary grievances appealing the nine disciplinary determinations.

In response to CSEA's demand to submit the nine grievances to arbitration, North Hempstead filed a petition pursuant to CPLR Article 75 seeking a permanent stay of arbitration for each of the nine disciplinary decisions and penalties imposed on the employee.

In opposition to North Hempstead's petition, CSEA contended that because the aggregate penalty of all the disciplinary decisions exceeded five days' suspension, resolution of the disputes were controlled by Section XII of the CBA, which set forth the disciplinary procedure for those disputes carrying a penalty of six days' suspension or more and which provided for arbitration of the dispute.

In rebuttal North Hempstead argued that as no single proposed disciplinary penalty exceed a five day suspension Section X of the CBA controlled and Section X did not provided for the arbitration of disputes where the disciplinary action resulted in a penalty of up to, and including, a five days' suspension without pay.

Supreme Court, concluding that because the penalty imposed on the employee resulted in a total of 45 days of suspension without pay, held that the grievances were arbitrable and denied North Hempstead's petition to permanently stay arbitration. North Hempstead appealed.

Reversing the lower court's ruling, the Appellate Division explained that there is a two-step test used to determine "whether a dispute between a public sector employer and an employee organization is arbitrable." Initially the court must determine if there is any statutory, constitutional, or public policy prohibition against arbitrating the dispute. It the court finds that there is no prohibition against arbitration, the court must examine the parties' collective bargaining agreement to determine if the parties, had in fact, agreed to arbitrate the particular dispute at issue.

Noting that North Hempstead did not contend that arbitration of the grievances at issue was prohibited by law or public policy, the Appellate Division said that in this instance the only issue to address was whether the parties had, in fact, agreed to arbitrate these particular grievances.

In contrast to general labor disputes in the private sector involving arbitration, the Appellate Division, citing Matter of Board of Educ. of Valhalla Union Free Sch. Dist. v Valhalla Teachers Assn., 112 AD3d 620, pointed out that the intent of the parties in the public sector to arbitrate alleged violations of provisions set out in a collective bargaining agreement "may not be presumed." Absent "clear, unequivocal agreement to the contrary," the Appellate Division opined that there was a presumption that the parties entering into a collective bargaining agreement in the public sector "did not intend to refer differences which might arise to the arbitration forum."

Contrary to the Union's contention, the Appellate Division found that because the disciplinary notices each carried a penalty of a five-day suspension, "the grievance procedure of Section X of the CBA, which did not permit arbitration, was applicable" notwithstanding the fact that "the aggregate penalty assessed against the employee exceeded five suspension days." In other words, the fact that the aggregate penalty involved exceed "five suspension days" did not place the dispute within the ambit of Section XII of the CBA.*

Further, said the Appellate Division, [1] neither Section X nor Section XII of the CBA provides for any deviation from the respective procedures where an employee may be subject to more than one disciplinary action, and [2] CSEA, by its participation in the administrative grievance procedure, including presenting its appeals to the Labor-Management Committee, "essentially conceded that the dispute fell within the ambit of Section X."

When the grievances "were denied at Step 3," CSEA, in the words of the Appellate Division, "... filed a demand for arbitration, which is not permitted under Section X" of the relevant CBA. As the several grievances at issue were controlled by Section X of the CBA, the Appellate Division held that CSEA "failed to demonstrate that the parties in fact agreed to arbitrate these particular disputes."

Accordingly, the Appellate Division ruled that Supreme Court should have granted North Hempstead's petition to permanently stay arbitration, reversed the lower court's ruling on the law, with costs, and granted North Hempstead petition to permanently stay arbitration.

* Typically a party in a Section X procedure is able to file a CPLR Article 78 petition challenging a Section X decision and, or, penalty while a party to a Section XII procedure is able to challenge the arbitration award by filing a CPLR Article 75 petition.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_06098.htm

ADDENDUM

This decision appears to be one of first impression.

With respect to the Appellate Division's observation that CSEA's actions in processing these charges  essentially conceded that the dispute fell under the ambit of Section X of the relevant collective bargaining agreement because it actively participated in the disciplinary appeal procedure, presumably [1] two or more of the nine charges were not served on the employee simultaneously and [2] any motion to consolidate two or more of the nine charges served on the employee was denied.

In contrast, had two or more of the charges been either served simultaneously and, or, consolidated and the penalty imposed for the simultaneously served and, or, consolidated charges exceeded a five day suspension without pay, it could be argued that by imposing such a penalty with respect to such  consolidated and, or, simultaneously served  charges the provisions of Section XII were triggered with respect to such charges.

There is some precedent for incorporating a "Section X" and a Section XII type process in a collective bargaining agreement.

Article 7 of the State's Military Law, Code of Military Justice, provides for processing charges and specification for alleged offenses or misconduct by individuals serving in New York State Militia.**

For example, §130.15 of the Military Law "Commanding officer's non-judicial punishment", provides for "commanding officer's non-judicial punishment" whereby a commanding officer may, in addition to or in lieu of admonition or reprimand, impose certain disciplinary punishments for minor offenses without the intervention of a court-martial. A person punished under authority of §130.15 who deems his or her punishment unjust or disproportionate to the offense may, through the proper channel, appeal to the next superior authority. However, the individual subject to the punishment "may in the meantime be required to undergo the punishment adjudged. The officer who imposes the punishment, his successor in command, and superior authority shall have power to suspend, set aside, or remit any part or amount of the punishment and to restore all rights, privileges and property affected.

In contrast, there are several types of "judicial tribunals" - courts-martial - authorized to consider disciplinary initiated against military personnel, There shall be three kinds of courts-martial in each of the forces of the organized militia, (1) a general courts-martial: (2) a special courts-martial, and (3) a summary courts-martial. Each such courts-martial has designated jurisdictions but §130.21 of the Military Law provides that the jurisdiction of courts-martial not exclusive and provisions of Code of Military Justice conferring jurisdiction upon courts-martial shall not be construed as depriving provost courts or other military tribunals of concurrent jurisdiction in respect to offenders or offenses that by statute or by the law of war may be tried by such provost courts or other military tribunals.

The jurisdiction and authority of of courts martial are set out in Part 4 of the Code of Military Justice while §§130.59 - 130.72 of Part 9 of the Code sets out post-trial procedure and review of courts-martial.

** The Militia of the State of New York consists of the Organized Militia, the State Reserve List, the State Retired List and the Unorganized Militia. The Organized Militia is composed of the New York Army National Guard; the New York Air National Guard; the Inactive National Guard; the New York Naval Militia; the New York Guard whenever such a state force shall be duly organized, such additional forces as may be created by the governor and the Unorganized Militia.

Employer failed to prove the disciplinary charges and specifications filed against the employee by a preponderance of the credible evidence

Employer failed to prove the disciplinary charges and specifications filed against the employee by a preponderance of the credible evidence

New York Office of Administrative Trials and Hearings, OATH Index No. 181/18

A correction captain was charged with using unauthorized force against an inmate and making false statements.

The inmate claimed that he was secured and not resisting when the captain jabbed him with his baton; the captain and the escort officer contended that the inmate was unsecured and struggling with the officer when the captain jabbed him. A surveillance video of the incident was not produced at trial because the Department failed to preserve it and it was purged.

The investigator, based upon review of the video and witness statements, concluded that the inmate was not resisting and the force used by the captain was unauthorized.

OATH Administrative Law Judge Joycelyn McGeachy-Kuls, however,  recommended dismissal of the charges, finding that the captain’s testimony was more credible than the inmate’s, which contained unsubstantiated allegations regarding his injuries and of being placed in a chokehold. Further, the ALJ found that the investigator’s report contained significant inconsistencies, inaccuracies and omissions, which called its reliability into question. Judge McGeachy-Kuls viewed the department for failing to preserve the video as a "negative inference"

The employer's failure to preserve the video tape referred to in this decision might be viewed as an aspect of "spoliation of evidence." Spoliation of evidence is the destruction or alteration of evidence that makes it unavailable for use in a judicial or quasi-judicial proceeding. Spoliation is presumed to be damaging to the spoliator's interest with respect to proving its claims or defenses when it is intentionally changed, modified, deleted or destroyed.

In Burke v Queen of Heaven R.C. Elementary Sch., 151 AD3d 1608, the Appellate Division addressed allegations of spoilation of evidence, noting that "Where the evidence is determined to have been intentionally or wil[l]fully destroyed, the relevancy of the destroyed [evidence] is presumed."

In contrast, in Thomas v Mt. Vernon P.D., 249 A.D.2d 483, motion to appeal denied, 94 N.Y.2d 763, the employee contended that the appointing authority  failed to preserve tape recordings of telephone calls that an employee believed would helpful to the employee's defense in a disciplinary hearing.

The Appellate Division found that the record failed to show that the loss of this tape was due to bad faith on the part of the appointing authority and that the tapes in question were routinely reused after 30 days, which was “well before any disciplinary charges were brought against the individual." The court also noted that “contrary to [the employee's] contention that the tape recording was the best evidence as to whether the subject telephone call was ever made, direct evidence on that issue was offered at the hearing from the alleged parties to the conversation."

Addressing the false statement charge brought against the correction captain, the ALJ said that the charge was based upon the captain’s report on the number of jab strikes against the inmate as “one or two” in one instance and “several” in another. At the disciplinary hearing the captain explained that he believed several to mean an unspecified number. ALJ McGeachy-Kuls recommended dismissal of the charge, finding the language to be imprecise, but not false or misleading.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-181.pdf

 

Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Source: OATH

Underperforming assigned tasks

OATH Index No. 2077/17

An associate retirement benefits examiner was charged with incompetence for failing to complete the required daily number of cases. ALJ Noel R. Garcia found that the examiner was required to complete an average of three cases per day, but only averaged less than one case per day over a ten month period. He concluded that the examiner was consistently unable to perform her fundamental responsibilities. 30-day suspension recommended, agency imposed a 25-day suspension

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-2077.pdf

Refusal to obey a supervisor's lawful order

OATH Index No. 926/1

ALJ John B. Spooner recommended a 15-day suspension for a job opportunity specialist who was insubordinate and discourteous towards a supervisor. The employee refused to obey an order to process benefits, and he threw paper and gestured with his fist at the supervisor. This conduct caused the supervisor, who suffered from a stroke-related disability, to request early retirement to avoid similar encounters which could adversely affect her health. 

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-926.pdf

Delay in addressing alleged misconduct denied employee an opportunity to correct his or her conduct

OATH Index No. 1420/17

A sanitation supervisor was charged with failing to carry out his supervisory responsibilities, failing to accurately prepare, record and maintain information, and with failing to cooperate with an official inquiry. ALJ Kara J. Miller found that many of the charges involved incidents that occurred five to six years ago, which ultimately deprived the supervisor of an opportunity to correct his conduct because petitioner did not timely address the alleged misconduct. ALJ Miller sustained some of the charges, finding that the supervisor failed to accept responsibility.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-1420.pdf

Determining the validity of an employee's "release of claims" against an employer

Determining the validity of an employee's "release of claims" against an employer

Charlery v New York City Department of Education, USCA, Second Circuit, Docket No. 17-1888

Jacqueline Charlery filed an action against the City of New York Department of Education, Board of Education of the City School District of the City of New York [Education] alleging claims for unlawful discrimination and retaliation in violation of the Americans with Disabilities Act and the Rehabilitation Act. Education filed a motion for judgment on the pleadings, converted by the district court, after giving notice to the parties, into a motion for summary judgment.

The court then found that Charlery had released her federal discrimination and retaliation claims in an agreement settling an earlier personal injury lawsuit against Education, granted Education's motion and entered judgment in Education's favor. Charlery appealed the district court's action.

With respect to the effect of a "release" entered into in the course of judicial proceeding, the Circuit Court, citing Livingston v Adirondack Beverage Co., 141 F.3d 434, explained that “[T]he validity of a release is a peculiarly fact-sensitive inquiry.”

Noting that in Charlery's alleged release appearing directly above the signature line is language stating “THE UNDERSIGNED HAS READ THE FOREGOING RELEASE AND FULLY UNDERSTANDS IT”, the Circuit Court said that “[w]e employ a ‘totality of the circumstances’ test to determine whether a release of . . . claims is knowing and voluntary,” explaining that the relevant factors courts should consider include:

(1) the plaintiff’s education and business experience,

(2) the amount of time the plaintiff had possession of or access to the agreement before signing it,

(3) the role of plaintiff in deciding the terms of the agreement,

(4) the clarity of the agreement,

(5) whether the plaintiff was represented by or consulted with an attorney, and

(6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law.

The Circuit Court opined that "The district court did not err when assessing these factors and concluding that Charlery’s waiver was knowing and voluntary."

Analyzing the first five factors listed above, the court noted that "Charlery, being a teacher, is a well-educated, trained professional." However, said the court, the time and role she played in deciding its terms - weigh in favor of a finding that the waiver was not knowing and voluntary. Although Charlery stated that she had read the agreement and signed the release the same day she received it and although she was represented by counsel in the settlement of the lawsuit, she played no role in negotiating the terms of the release.

However, continued the Circuit Court, the clarity of the agreement favors a finding that the waiver was knowing and voluntary as the agreement stated that Charlery was releasing Education from “any and all claims” for “any matter, cause or thing whatsoever that occurred through the date” the release was executed as Charlery was represented by counsel in that lawsuit.

The sixth factor, said the court, was inapplicable to this case because Charlery had not claimed that she was entitled by contract or law to receive "benefits" and  the issues involved alleged federal discrimination and retaliation claims.

Balancing the totality of the circumstances, the Circuit Court concluded "as the district court did," that in executing the release Charlery knowingly and voluntary waived her federal discrimination and retaliation claims and held that the district court did not err when it entered summary judgment in favor of Education on Charlery's federal claims.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/doc/17-1888_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/hilite/

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

In  Re Derogatis v Board Of Trustees of the Welfare Fund of The International Union of Operating Engineers Local 15, 15A, 15C & 15D, AFLCIO, et al., USCA, 2nd Circuit, Dockets Nos. 16-977-cv, 16-3549-cv

Emily DeRogatis appealed a District Court ruling awarding summary judgment to the Welfare Fund on her claims for relief asserted under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§1001 et seq. The genesis of these actions were certain "oral miscommunications" by Plan personnel to the DeRogatises before Mr. DeRogatis' death in 2011 involving [1] the Pension Plan governing the benefits payable to Mrs. DeRogatis as a surviving spouse after the death of her husband and [2] the Welfare Plan governing Mrs. DeRogatises’ entitlement to health benefits during and after Mr. DeRogatis' lifetime.

The Circuit Court agreed with the lower court's ruling that the Pension Fund trustees correctly denied DeRogatis’s request for an augmented survivor benefit following her husband’s death because the Pension Plan’s summary plan description adequately described the eligibility requirements for the benefits in question and thereby satisfied the trustees’ fiduciary duty to provide complete and accurate information to plan participants and beneficiaries and affirmed the lower court's granting the Fund's motion  for summary judgment in Docket No. 16-3549-cv.

Significantly, however the Circuit Court rejected the District Court's holding that "a plan administrator cannot be held liable for unintentional misrepresentations made about the plan’s operation by its non-fiduciary, 'ministerial' agent and on this basis denied the claim."

As to claims involving No. 16-977-cv, noting that the District Court granted summary judgment for defendants on this claim on the same “ministerial employee” ground, the Circuit Court rejected the District Court’s conclusion that the Welfare Plan summary plan description explained clearly its participants’ options to receive post-retirement health benefits."

Rather, said the court, given the evidence that Welfare Fund agents misstated material aspects of those same benefits when communicating with the DeRogatises, the Circuit Court identified as an open question of material fact "whether the Welfare Fund trustees breached their fiduciary duty to provide plan participants with complete and accurate information about their benefits" and vacated the judgment entered in favor of the Welfare Fund defendants by the lower court with respect to No. 16-977-cv.

Althought the Circuit Court opined that Welfare Fund defendants "may yet be entitled to summary judgment if they demonstrate that DeRogatis is not entitled to any equitable relief, thereby negating the final element of DeRogatis’s §502(a)(3) claim," the District Court's judgment with respect to No. 16-977-cv was vacated and the matter remanded to the lower court for further proceedings "consistent with this opinion." 

In contrast, the same is not always the rule where the administrative error is to the benefit of the individual. 

In Morley v Arricale, 66 N.Y.2d 665, the Court of Appeals said that "Estoppel is not available against a local government unit for the purpose of ratifying an administrative error ... made without compliance with formally adopted selection standards and procedures while in Galanthay v New York State Teachers' Retirement Sys., 50 NY2d 984, the court held that the retirement system "is obligated to correct errors in the computation of retirement benefits and the recoupment of funds erroneously paid is proper." 

The DeRogatis decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/doc/16-977_16-3549_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/hilite/