ARTIFICIAL INTELLIGENCE [AI] IS NOT USED, IN WHOLE OR IN PART, IN PREPARING NYPPL SUMMARIES OF JUDICIAL AND QUASI-JUDICIAL DECISIONS

November 29, 2021

Employee contributions required of individuals participating in the State University of New York's Optional Retirement Program

In Coller v State Univ. of NY., 80 A.D.2d 166, the Appellate Division considered a claim that certain participants in the State University of New York's Optional Retirement Program* [ORP] were exempt from the provisions of Chapter 890 of the Laws of 1976, which Chapter, in pertinent part, created "a new retirement program for public employees hired on or after July 1, 1976."

The new law made the retirement systems, including optional retirement programs, contributory with respect to employees appointed after July 1, 1976.

Certain State University of New York ORP participants appointed prior to July 1, 1976, [Plaintiffs] had employee contributions for their respective ORP deducted from their compensation effective January 1, 1977. 

Plaintiffs then initiated a CPLR Article 78 action demanding that State be ordered to resume making contributions to their ORP on their behalf as it had done prior to January 1, 1977. Supreme Court rejected Plaintiffs' petition, which decision was affirmed by the Appellate Division. 

In particular, the Appellate Division noted that Petitioners, at the time of their election to participate in a then noncontributory optional retirement plan, consented in writing to their payment of appropriate employee contributions to their ORP provided by the Teachers Insurance and Annuity Association and, or, the College Retirement Equity Fund [TIAA; CREF], if required to do so.**

The text of the Appellate Division's decision is set out below:

Petitioners are employees of the State University of New York (SUNY) and are employed at various colleges which are constituent parts of SUNY. Pursuant to section 393 of the Education Law, eligible employees of SUNY are permitted to elect participation in an optional pension plan selected by SUNY in lieu of the New York State Teachers' Retirement System or the New York State Employees' Retirement System. Here, the optional pension plan selected by SUNY and elected by petitioners was the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF). At the time of its selection by SUNY, membership in TIAA-CREF for electing SUNY employees was noncontributory, with the State underwriting the total cost of membership (Education Law, § 392, subds 1, 2). Article 14 effective January 1, 1977 and article 14-A effective July 1, 1977, specifically sections 500 and 517, were added to the Retirement and Social Security Law (L 1976, ch 890, § 1), thereby creating "a new retirement program for public employees hired on or after July 1, 1976" (Governor's Memorandum, NY Legis Ann, 1976, p 412). The new law made the retirement system, including the optional retirement programs such as TIAA-CREF, contributory with respect to employees appointed after July 1, 1976.

Petitioners, members of TIAA-CREF, by a CPLR article 78 proceeding, demanded (1) that respondents be ordered to resume making contributions to the TIAA-CREF fund as they had done prior to January 1, 1977, (2) that respondents reimburse petitioners for all moneys deducted from their salaries since January 1, 1977, and (3) that petitioners be permitted to proceed with the litigation as a class action. Special Term denied the request for class action relief and dismissed the petition. This appeal ensued.

Turning first to the request by petitioners to proceed with this matter as a class action (CPLR 901), we note that when governmental operations are involved, and when subsequent petitioners will be adequately protected under the principles of stare decisis, class actions are inappropriate (Matter of Jones v Berman, 37 N.Y.2d 42). This is especially true in CPLR article 78 proceedings (Matter of Leone v Blum, 73 A.D.2d 252, 274, mot for lv to app granted 50 N.Y.2d 1042). Accordingly, we affirm that part of the judgment which denied petitioners' motion to prosecute this matter as a class action.

The initial argument advanced by petitioners in opposition to respondents' application of sections 500 and 517 of the Retirement and Social Security Law to themselves and others similarly situated so as to change a noncontributory system to a contributory one, is that such application violates section 7 of article V of the New York State Constitution, which states that membership in a State retirement system is a contractual relationship, "the benefits of which shall not be diminished or impaired." This contention must be rejected. There is nothing in the law or in its application requiring members to make contributions to TIAA-CREF that affects benefits to members in any manner. Next, the contractual relationship which petitioners enjoyed with the State by which the latter paid their contributions to TIAA-CREF was conditioned upon the New York State Teachers' Retirement System continuing its noncontributory status. Subdivision 2 of section 392 of the Education Law reserved to the State the right to end payments made by the State in lieu of employee contributions to the elected optional retirement plan. Therefore, enactment of sections 500 and 517 of the Retirement and Social Security Law triggered that condition and represented an overt act by the State to exercise a reserved power by making the Teachers' Retirement System contributory, thereby terminating the contractual relationship obligating the State to underwrite teacher membership in any optional retirement plan.

Similarly, since any property interest petitioners had in their optional system prior to January 1, 1977 was conditional, such interest was irretrievably lost by the enactment of sections 500 and 517 of the Retirement and Social Security Law in 1976. Furthermore, petitioners, at the time of their election to participate in a noncontributory optional retirement plan, consented in writing to appropriate employee contributions to the TIAA-CREF fund if required to do so.**

Finally, petitioners' remaining contentions, including the point addressed to the constitutionality of sections 500 and 517 of the Retirement and Social Security Law with respect to their effective date causing unequal protection of teachers who joined TIAA-CREF before or after July 1, 1976, are untenable and are rejected. Petitioners have not met their "burden of establishing unconstitutionality beyond a reasonable doubt" (O'Conner v Levitt, 51 A.D.2d 1090).

The judgment should be affirmed, with costs.

Judgment affirmed, with costs.

* §396 of the Education Law, however provided that the "Employer not liable for payment of benefits. Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts." [See, also, Royv Teachers Ins. & Annuity Assn., 878 F.2d 47 [2d Cir 1989] and Matter of Bindler v Goldin. 52 N.Y.2d 1.]

** The form signed by Petitioners stated: "To the Comptroller of the State of New York: You are hereby informed that I have elected the Optional Retirement Program [TIAA-CREF] * * * I do consent and agree to appropriate deductions, when required * * * and payment of salary or compensation less such deductions [which] * * * shall be a full and complete discharge and acquiesce of all my claims * * * for * * * services rendered".

November 18, 2021

Manager who referred to mask as "KKK hood" lawfully terminated for "cause"

On November 16, 2021, Employment Law News from WK WorkDay posted the following item by Ronald Miller, J.D.

A manager for an automobile repair business, who referred to respiratory masks as a “KKK hood,” and asked a Black employee if he were offended by the name and whether he wanted to try it on, was lawfully terminated under the terms of an employment agreement, a Florida District Court of Appeal ruled. In so ruling, the appeals court reversed a trial court’s award of damages to the employee for improper termination. Contrary to the trial court, the appeals court determined that the employee’s intent was irrelevant since he was also discharged for his conduct. Accordingly, the employer properly exercised its right to terminate the employee under its harassment policy (Master Collision Repair, Inc. dba Gerber Collision v. Waller, November 3, 2021, Roberts, C.).

“KKK hood” reference. The employer is in the automotive collision repair business. It hired the employee as a market manager responsible for the management of several locations. On March 7, 2018, he was in one of the employer’s stores to conduct fit testing for respiratory masks certain employees had to wear when performing tasks like sanding and painting. While there, the employee repeatedly referred to the respiratory mask as a “KKK hood.” He then asked a Black employee, who worked in the front office and was not part of the fit test group, if he would be offended if the mask was referred to as a “KKK hood” and if he wanted to try it on.

Senior management and human resources were made aware of complaints about the employee’s behavior. HR immediately began an investigation and the store’s general manager confirmed that the employee had asked other employees to put on the “KKK hood.” The employee himself admitted referring to the mask as a “KKK hood” and admitted that he asked the Black employee to try it on, but claimed he was joking. A few days later, the Black employee tendered a resignation letter detailing the employee’s conduct and the distress it had caused him.

After determining that the complaints against the employee were substantiated, the employer notified him that he was terminated for cause under his employment agreement.

Breach of contract claim. The employee sued the employer for breach of contract, arguing he was improperly terminated because he had not received written notice and a 30-day cure period under the terms of the employment agreement. Following a bench trial, the trial court entered judgment in favor of the employee and awarded him severance pay and health benefits for a six-month period. This appeal followed.

The appeals court concluded that the trial court erred in finding the employer improperly terminated the employee without first providing him notice and an opportunity to cure. The employment agreement plainly defined “cause” to mean willful failure and/or gross negligence in the performance of duties or the material breach of the terms and conditions of the agreement. Clearly, the employment agreement provided two separate avenues for the employer to terminate an employee for “cause” based upon a violation of the terms and conditions of the employment agreement. The second provision gave the employer leeway to terminate the employee immediately with written notice of the violation of the terms and conditions of the employment agreement without providing an opportunity to cure.

Under the agreement, the employee was responsible for performing his duties in accordance with employer policies, including the harassment policy contained in the employee handbook. Thus, the trial court erred in concluding that the employer failed to properly terminate the employee.

Employee intent. Similarly, the appeals court concluded that the trial court erred in finding that the employer did not conduct a good faith investigation or assess the ability to cure before terminating the employee. The trial court found the employer failed to investigate the employee’s intent, and without intent, his use of the term “KKK hood” might not be racial harassment. This was error. Rather, the record was clear that the employee was not terminated for words alone, but also for his conduct—he invited a Black employee to try on the “KKK” hood. At any rate, the employee’s intent was irrelevant to the employer’s determination that his conduct constituted harassment as defined under the employer’s harassment policy.

Accordingly, the judgment of the trial court was reversed.

November 17, 2021

Woman arrested for allegedly stealing and cashing her deceased sister's NYS Employees' Retirement System retirement benefit checks

On November 16, 2021, New York State Comptroller Thomas P. DiNapoli and Brooklyn District Attorney Eric Gonzalez announced the arrest of Latrenda Dixon for the alleged theft*of some $8,000 in retirement benefits sent to her deceased sister by the New York State Employees' Retirement System. 

Dixon, 52, of the Bronx is charged with illegally cashing 20 checks in Brooklyn for nearly $8,000 issued by the New York State and Local Retirement System to her deceased sister, Linda Dixon. She cashed the checks using her sister’s state employee ID at a check cashing location.

“Ms. Dixon attempted to scam the pension system by allegedly pretending to be her deceased sister,” DiNapoli said. “My thanks to District Attorney Gonzalez for his continued partnership in safeguarding the New York State and Local Retirement System.”

“Stealing from the state pension system is not a victimless crime; law abiding taxpayers end up paying the price,” said Brooklyn District Attorney Gonzalez. “I would like to thank State Comptroller DiNapoli for all of the work his agency did to bring this defendant to justice. We will now seek to hold her accountable for her alleged actions.”

Dixon was charged with grand larceny in the third and fourth degree; scheme to defraud in the first and second degree; identity theft in the first and second degree; 20 counts of criminal possession of a forged instrument in the first degree; 20 counts of criminal possession of a forged instrument in the second degree, and criminal possession of stolen property in the third and fourth degree.

She was arraigned in Kings County court and released without bail on her own recognizance. Dixon is due back in court Nov. 30, 2021.

This case was investigated by the Office of the State Comptroller’s Division of Investigations in partnership with the Brooklyn District Attorney’s Office.

The case is being prosecuted on behalf of the Brooklyn D.A.’s Office by Senior Assistant District Attorney Nicole Manini, of the District Attorney’s Green Zone Trial Bureau, under the Supervision of Assistant District Attorney Glenn Singer, Assistant District Attorney Sara Kurtzberg, and Assistant District Attorney Sasha Pemberton, Green Zone Deputy Bureau Chiefs. 

* N.B. These charges are accusations and the individual is presumed innocent unless and until proven guilty.

 

November 16, 2021

Per diem substitute teacher eligible to receive unemployment insurance benefits despite the school district's claim that she had not worked "the required 20 days as a substitute teacher"

A claimant [Claimant] for unemployment insurance benefits worked as a per diem substitute teacher for the City School District of the City of New York [NYCSD] during the 2017-2018 school year. She was paid only for the days she worked.

Claimant worked a total of 18 days during that school year, often declining per diem assignments due to conflicts with her other part-time job and other reasons. She last worked on June 25, 2018, the final day of school. On July 16, 2018, NYCSD advised Claimant that she was ineligible to serve as a substitute teacher in the 2018-2019 school year as she had not worked the required 20 days as a substitute teacher in the prior school year.

The Department of Labor determined that Claimant was eligible to receive benefits. NYCSD appealed, contending that Claimant "had provoked her discharge for failing to complete the required 20 days of per diem work."

After a hearing, an Administrative Law Judge and, thereafter, the Unemployment Insurance Appeal Board, affirmed the Labor Department's initial determination, finding that, as a per diem employee, Claimant's employment relationship with the school district ended on her last day of work, June 25, 2018. As such, Claimant did not have an employment relationship with at the time that she applied for benefits and thus could not be found to have provoked her discharge or voluntarily quit.

NYCSD appealed the Board's determination but the Appellate Division sustained the Board's ruling, explaining that as there is substantial evidence supporting the Board's determination, it must be affirmed.

The narrow issue presented was whether the Board correctly determined that Claimant, a per diem employee who was last employed by NYCSD on June 25, 2018, did not thereafter cause her discharge or voluntarily quit by not pursuing avenues to renew her per diem eligibility nor did NYCSD establish that it was compelled to discontinue Claimant's status as a per diem teacher on that basis.

Accordingly, the Appellate Division found that Claimant was entitled to the unemployment insurance benefits awarded to her by the Labor Department and that the wages paid to her by NYCSD can be used to establish a future claim for benefits.

Click HEREto access the Appellate Division's ruling.

November 15, 2021

New York State needs to improve cybersecurity support to local governments and public authorities

In a letter dated November 12, 2021, New York State Comptroller Thomas P. DiNapoli advised the New York State's Division of Homeland Security and Emergency Services [DHSE] that his audit of its operation indicates that DHSES cannot assure the critical cybersecurity support they are providing to state agencies, local governments, and public authorities through their Cyber Incident Response Team [CIRT] to achieve the desired outcomes or is targeting the appropriate customers and their needs.

Essentially, the audit reports that the agency responsible for providing cybersecurity help to 2,800 public entities responds to attacks lacks strategies for preventing them.

New York’s Cyber Incident Response Team plays a vital role in safeguarding our infrastructure and critical data against cybersecurity threats,” DiNapoli said. “There are a lack of forward-thinking strategies, widespread training, and specific and measurable objectives that are critical in assessing progress. Additionally, the agency needs to be more proactive. As cybersecurity attacks continue to rise, I encourage the state’s Division of Homeland Security and Emergency Services to take quick action on this urgent issue.”

The recent passage of the federal Infrastructure Investment and Jobs Act underscores how critical strengthening cybersecurity is across New York. The legislation will provide much needed funding for local governments to modernize and protect their networks against future cyberattacks. In New York, cyberattacks have impacted public entities large and small, including reported attacks at state agencies; 911 systems; counties including Albany, Chenango, Erie, Nassau, Schenectady and Schuyler; cities including New York, Buffalo, Yonkers, Long Beach and Olean; towns including Brookhaven, Ulster, Canandaigua and Moreau; as well as school districts like Buffalo Public Schools and Guilderland Central School District.

Cyberattacks pose a fiscal risk and can have significant impacts on the public when they target public authorities and local governments, including water systems, utilities, airports, schools and health care facilities. For example, a 2019 ransomware cyberattack on the City of Albany cost the city roughly $300,000 because of destroyed servers, the cost to upgrade user security software, the purchase of firewall insurance and the performance of other improvements to firm up the city’s systems.

Cybercrimes, including phishing remain on a troubling rise and reach far beyond New York. Between 2019 and 2020, complaints of cyberattacks increased by 110%, from 114,702 in 2019 to 241,342 in 2020, according to the Federal Bureau of Investigation.

The rise in cybercrimes across our state highlight how vulnerable local governments are and presents CIRT with an opportunity to implement solutions ahead of future attacks. Between May 2018 and December 2020, CIRT responded to 122 cyberattacks statewide, including 39 phishing incidents, 23 ransomware attacks and incidents of compromised accounts.

Although it is responding to incidents, CIRT has not made enough progress when it comes to proactively evaluating the cybersecurity needs of the agencies it assists and measuring its progress in improving security. Its activities have only reached a fraction of the 2,800 entities it is responsible for. For example, despite acknowledging the need for specific training on how to detect phishing and prevent ransomware attacks, CIRT only provided five training sessions on phishing emails between July 2020 and March 2021.

Between August 2019 and December 2020, CIRT conducted just 11 risk assessments at counties and other local government entities, upon request by those entities. It also held or participated in 32 training sessions and 13 tabletop exercises, which stimulate discussion of various issues regarding a hypothetical situation, for county Boards of Elections, critical infrastructure, and transportation authorities to test whether they were prepared for a cyber incident emergency. 

DiNapoli’s audit also noted that most of CIRT’s activity is on a by-request basis or when areas of need are identified. Failure to conduct proactive outreach limits the ability to evaluate the needs of the entities in its purview and effectively prevent cyberattacks.

Officials said that they did not do surveys or collect data to see how many of the entities it covers have undertaken their own training. Without clear goals and documentation of security needs and progress officials cannot be assured their work is achieving the desired outcomes, if it is focused where public entities most need help, and if its limited resources are being used to the greatest benefit of the entities it was created to support.

DiNapoli offered several recommendations, including that DHSES:

Develop specific, measurable objectives and quantifiable, attainable goals, along with associated reporting mechanisms, to allow CIRT to evaluate if it is achieving its mission.

Take steps to determine the cybersecurity needs of the agencies, local governments, and public authorities CIRT is charged with supporting.

DHSES generally disagreed with the audit’s recommendations. CIRT officials stated that it has developed a sound and effective cybersecurity program that delivers valuable services to the entities they support. The agency’s full response is included in the audit.

Click HERE to access the Cyber Incident Response Team Report 2020-S-58.

New York State needs to improve cybersecurity support to local governments and public authorities

In a letter dated November 12, 2021, New York State Comptroller Thomas P. DiNapoli advised the New York State's Division of Homeland Security and Emergency Services [DHSE] that his audit of its operation indicates that DHSES cannot assure the critical cybersecurity support they are providing to state agencies, local governments, and public authorities through their Cyber Incident Response Team [CIRT] to achieve the desired outcomes or is targeting the appropriate customers and their needs.

Essentially, the audit reports that the agency responsible for providing cybersecurity help to 2,800 public entities responds to attacks lacks strategies for preventing them.

New York’s Cyber Incident Response Team plays a vital role in safeguarding our infrastructure and critical data against cybersecurity threats,” DiNapoli said. “There are a lack of forward-thinking strategies, widespread training, and specific and measurable objectives that are critical in assessing progress. Additionally, the agency needs to be more proactive. As cybersecurity attacks continue to rise, I encourage the state’s Division of Homeland Security and Emergency Services to take quick action on this urgent issue.”

The recent passage of the federal Infrastructure Investment and Jobs Act underscores how critical strengthening cybersecurity is across New York. The legislation will provide much needed funding for local governments to modernize and protect their networks against future cyberattacks. In New York, cyberattacks have impacted public entities large and small, including reported attacks at state agencies; 911 systems; counties including Albany, Chenango, Erie, Nassau, Schenectady and Schuyler; cities including New York, Buffalo, Yonkers, Long Beach and Olean; towns including Brookhaven, Ulster, Canandaigua and Moreau; as well as school districts like Buffalo Public Schools and Guilderland Central School District.

Cyberattacks pose a fiscal risk and can have significant impacts on the public when they target public authorities and local governments, including water systems, utilities, airports, schools and health care facilities. For example, a 2019 ransomware cyberattack on the City of Albany cost the city roughly $300,000 because of destroyed servers, the cost to upgrade user security software, the purchase of firewall insurance and the performance of other improvements to firm up the city’s systems.

Cybercrimes, including phishing remain on a troubling rise and reach far beyond New York. Between 2019 and 2020, complaints of cyberattacks increased by 110%, from 114,702 in 2019 to 241,342 in 2020, according to the Federal Bureau of Investigation.

The rise in cybercrimes across our state highlight how vulnerable local governments are and presents CIRT with an opportunity to implement solutions ahead of future attacks. Between May 2018 and December 2020, CIRT responded to 122 cyberattacks statewide, including 39 phishing incidents, 23 ransomware attacks and incidents of compromised accounts.

Although it is responding to incidents, CIRT has not made enough progress when it comes to proactively evaluating the cybersecurity needs of the agencies it assists and measuring its progress in improving security. Its activities have only reached a fraction of the 2,800 entities it is responsible for. For example, despite acknowledging the need for specific training on how to detect phishing and prevent ransomware attacks, CIRT only provided five training sessions on phishing emails between July 2020 and March 2021.

Between August 2019 and December 2020, CIRT conducted just 11 risk assessments at counties and other local government entities, upon request by those entities. It also held or participated in 32 training sessions and 13 tabletop exercises, which stimulate discussion of various issues regarding a hypothetical situation, for county Boards of Elections, critical infrastructure, and transportation authorities to test whether they were prepared for a cyber incident emergency. 

DiNapoli’s audit also noted that most of CIRT’s activity is on a by-request basis or when areas of need are identified. Failure to conduct proactive outreach limits the ability to evaluate the needs of the entities in its purview and effectively prevent cyberattacks.

Officials said that they did not do surveys or collect data to see how many of the entities it covers have undertaken their own training. Without clear goals and documentation of security needs and progress officials cannot be assured their work is achieving the desired outcomes, if it is focused where public entities most need help, and if its limited resources are being used to the greatest benefit of the entities it was created to support.

DiNapoli offered several recommendations, including that DHSES:

Develop specific, measurable objectives and quantifiable, attainable goals, along with associated reporting mechanisms, to allow CIRT to evaluate if it is achieving its mission.

Take steps to determine the cybersecurity needs of the agencies, local governments, and public authorities CIRT is charged with supporting.

DHSES generally disagreed with the audit’s recommendations. CIRT officials stated that it has developed a sound and effective cybersecurity program that delivers valuable services to the entities they support. The agency’s full response is included in the audit.

Click HERE to access the Cyber Incident Response Team Report 2020-S-58.

 

November 12, 2021

Deciding an action seeking to reinstate the Petitioner/Plaintiff's decedent to his position

Matter of O'Hara v Board of Educ., Yonkers City Sch. Dist.

2021 NY Slip Op 05703

Decided on October 20, 2021 

Appellate Division, Second Department

In a hybrid proceeding pursuant to CPLR article 78, inter alia, to review a determination of the Board of Education, Yonkers City School District, dated October 12, 2017, which terminated the petitioner/plaintiff's decedent's employment as Director of Transportation, and action pursuant to Civil Service Law §75-b, among other things, to reinstate the petitioner/plaintiff's decedent to the position of Director of Transportation, the petitioner/plaintiff appeals, and the Board of Education, Yonkers City School District, Yonkers City School District, and Luisa Erika Lassi cross-appeal, from an order and judgment (one paper) of the Supreme Court, Westchester County (George E. Fufidio, J.), dated October 31, 2018. The order and judgment, insofar as appealed from, (1) granted that branch of the motion of the Board of Education, Yonkers City School District, Yonkers City School District, and Luisa Erika Lassi which was pursuant to CPLR 3211(a) to dismiss the first cause of action, and dismissed that cause of action, and (2), in effect, dismissed the third cause of action.

The order and judgment, insofar as cross-appealed from, (1) denied that branch of the motion of the Board of Education, Yonkers City School District, Yonkers City School District, and Luisa Erika Lassi which was pursuant to CPLR 3211(a) to dismiss the second cause of action, granted that cause of action, annulled the determination, and directed that the petitioner/plaintiff's decedent be reinstated to the position of Director of Transportation as a permanent employee, with back pay and benefits, and (2) denied that branch of their motion which was to dismiss the third cause of action.

ORDERED that the order and judgment is modified, on the law, (1) by deleting the provisions thereof granting that branch of the motion of the Board of Education, Yonkers City School District, Yonkers City School District, and Luisa Erika Lassi which was pursuant to CPLR 3211(a) to dismiss the first cause of action and dismissing that cause of action, and substituting therefor a provision denying that branch of the motion, (2) by deleting the provisions thereof granting the second cause of action, annulling the determination of the Board of Education, Yonkers City School District, and directing that the petitioner/plaintiff's decedent be reinstated to the position of Director of Transportation, as a permanent employee, with back pay and benefits, and (3) by deleting the provision thereof, in effect, dismissing the third cause of action; as so modified, the order and judgment is affirmed insofar as appealed and cross-appealed from, without costs or disbursements, the first and third causes of action are reinstated, and the matter is remitted to the Supreme Court, Westchester County, for the service and filing of an answer and the administrative record within 20 days after the date of this decision and order, and for further proceedings on the petition/complaint consistent herewith.

Shelley A. O'Riley was employed by the Yonkers School District (hereinafter the school district) as its Director of Transportation. After serving in the position on a temporary basis from August 31, 2015, through November 19, 2015, and later on a provisional basis from November 20, 2015, through April 20, 2017, she was eventually appointed to the position by the Board of Education, Yonkers City School District (hereinafter the Board), on April 21, 2017. A probationary period of 26 weeks commenced upon her appointment in April 2017. On October 20, 2017, the Board terminated O'Riley's employment.

O'Riley subsequently commenced this hybrid proceeding against the Board, the school district, and Luisa Erika Lassi, in her official capacity as the Director of Transportation for the Yonkers City School District (hereinafter collectively the respondents), pursuant to CPLR article 78 and Civil Service Law §75-b, inter alia, to annul the Board's determination. In the petition/complaint, as a first cause of action pursuant to CPLR Article 78, O'Riley alleged that the Board's determination was made in violation of law and lawful procedure and was arbitrary and capricious. The second cause of action pursuant to CPLR Article 78 alleged that the Board's determination was made in bad faith and for improper reasons. In the third cause of action pursuant to Civil Service Law §75-b, O'Riley alleged that, by terminating her employment, the respondents retaliated against her after she engaged in protected activity. Prior to answering the petition/complaint, the respondents moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the petition/complaint.

In an order and judgment dated October 31, 2018, the Supreme Court granted that branch of the respondents' motion which was to dismiss the first cause of action, denied that branch of the motion which was to dismiss the second cause of action, granted the second cause of action, annulled the determination, directed that O'Riley be reinstated to the position of Director of Transportation as a permanent employee, with back pay and benefits, and denied that branch of their motion which was to dismiss the third cause of action. However, the court, in effect, dismissed the third cause of action on the ground that it had been rendered academic in light of the relief granted on the second cause of action. O'Riley appeals from so much of the order and judgment as dismissed the first cause of action, and, in effect, dismissed the third cause of action. The respondents cross-appeal from so much of the order and judgment as denied that branch of their motion which was to dismiss the second cause of action, granted the second cause of action, annulled the Board's determination as arbitrary and capricious, directed that O'Riley be reinstated to the position of Director of Transportation as a permanent employee, with back pay and benefits, and denied that branch of their motion which was pursuant to CPLR 3211(a) to dismiss the third cause of action. During the pendency of the appeal, O'Riley died, and the adminstrator of her estate was substituted as appellant-respondent.

"On a motion to dismiss a petition pursuant to CPLR 3211(a)(1), the movant has the burden of providing documentary evidence that utterly refutes the petitioner's factual allegations, conclusively establishing a defense as a matter of law. On a motion to dismiss a pleading pursuant to CPLR 3211(a)(7), the factual allegations in the pleading must be deemed true, and the petitioner must be afforded the benefit of every favorable inference" (Matter of Palmore v Board of Educ. of Hempstead Union Free Sch. Dist., 145 AD3d 1072, 1073 [citations and internal quotation marks omitted]). "When evidentiary material outside the pleading's four corners is considered, and the motion is not converted into one for summary judgment, the question becomes whether the pleader has a cause of action, not whether the pleader has stated one, and unless it has been shown that a material fact as claimed by the pleader is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate" (Matter of Clavin v Mitchell, 131 AD3d 612, 614).

A probationary employee may be discharged without a hearing and without a statement of reasons (see Matter of Griffin v MTA N.Y. City Tr. Auth., 127 AD3d 1083, 1084). "However, this broad discretion is not 'unlimited'" (Matter of Lake v Town of Southold, 189 AD3d 1588, 1591, quoting Matter of Maynard v Monaghan, 284 App Div 280, 283). "The employment of a probationary employee may not be terminated 'in bad faith, for a constitutionally impermissible or an illegal purpose, or in violation of statutory or decisional law'" (Matter of Lake v Town of Southold, 189 AD3d at 1591, quoting Matter of Lane v City of New York, 92 AD3d 786, 786).

Here, the documentary evidence does not utterly refute the allegation that the termination of O'Riley's employment was not in compliance with law and lawful procedure and it does not show that she does not have a cause of action on this basis. Consequently, the Supreme Court should not have granted that branch of the respondents' motion which was to dismiss the first cause of action.

Contrary to the respondents' contention, the Supreme Court properly denied that branch of their motion which was to dismiss the second cause of action, which alleged that the Board's determination was made in bad faith and for improper reasons. The respondents argue that the Board's determination to terminate O'Riley's employment as Director of Transportation was based on her poor job performance. On the evidence submitted, O'Riley has a cause of action pursuant to CPLR Article 78, on the ground that the Board's determination was made in bad faith. The petition/complaint alleges that the determination to terminate O'Riley's employment as Director of Transportation was based on her efforts to have transportation vendors and bus monitors comply with certain laws, with which they had not been required to comply under her predecessor, which angered the Board's president and the president of the Union that represents the school district's bus monitors, both of whom held sway with the school district superintendent.

However, the Supreme Court improperly awarded O'Riley the ultimate relief sought on the second cause of action. Upon denying the respondents' pre-answer motion to dismiss, the Supreme Court should have permitted the respondents to answer the petition (see CPLR 7804[f]; Matter of NassauBOCES Cent. Council of Teachers v Board of Coop. Educ. Servs., 63 NY2d 100, 102; Matter of Irfan v Vullo, 168 AD3d 733, 734; Matter of Smiler v Board of Educ., 15 AD3d 409, 410). Accordingly, we remit the matter to the Supreme Court, Westchester County, inter alia, for the service and filing of an answer and the administrative record.

Finally, "Civil Service Law §75-b(2)(a)(ii) provides that adverse employment action may not be taken against a public employee based upon his or her disclosure of information 'which the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action'" (Tipaldo v Lynn, 26 NY3d 204, 210-211, quoting Civil Service Law §75-b[2][a][ii]). In light of our determination with respect to the second cause of action, the Supreme Court improperly, in effect, dismissed the third cause of cause of action pursuant to Civil Service Law §75-b on the basis that it had been rendered academic. Moreover, on the merits, the respondents were not entitled to dismissal of the third cause of action pursuant to CPLR 3211(a), since the documentary evidence neither utterly refutes the allegation that O'Riley's employment was terminated in retaliation in violation of Civil Service Law §75-b, nor shows that she does not have a cause of action premised upon this basis (see Lilley v Greene Cent. Sch. Dist., 168 AD3d 1180, 1181).

November 11, 2021

In an appeal to the Commissioner of Education the petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he or she seeks relief

In this appeal to the Commissioner of Education the Petitioner [Doe]* sought the removal of a member of the Board of Education of School District [Respondent], alleging that the Respondent violated Doe's right to gainful employment and his right as a public employee to “engage in political discourse” on several occasions, including during [a] board meeting.  Doe "generally claims that Respondent "has harassed him since he was elected president of a local branch of the National Association for the Advancement of Colored People in 2015 and referenced several incidents between July 2018 and the spring of 2019 which allegedly demonstrate [Respondent's] disparate treatment of African American employees.:

In addition, Doe argued that Respondent “intentionally and wrongfully” divulged confidential information learned in an executive session [of the Board] while the executive session was ongoing."  

For relief, petitioner requests that respondent be removed as a trustee.  Petitioner also requests that respondent be ordered to comply with board policies, the New York State Constitution, and her oath of office. 

Addressing a number of procedural issues, the Commissioner opined:

1. Most of Doe's claims "must be dismissed as untimely", explaining that an appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown, citing 8 NYCRR §275.16.

2. An appeal to the Commissioner pursuant to Education Law §310—or, in this instance, Education Law §306—is not an appropriate forum to adjudicate claims of unlawful employment discrimination and retaliation and such claims “are more appropriately resolved by a fair employment practice agency or a court of competent jurisdiction,” citing Appeal of Moss and Sealy, 60 Ed Dept Rep, Decision No. 18,001.

Turning to the merits of Doe's appeal, the Commissioner said a member of a board of education, as a public officer, takes an oath of office to uphold the law and faithfully discharge his or her duties and a board member must not “disclose confidential information acquired by him [or her] in the course of his [or her] official duties or use such information to further his [or her] personal interests." Further, noted the Commissioner, "It is well settled that a board member's disclosure of confidential information in violation of General Municipal Law §805-a (1) (b) may constitute grounds for such board member's removal from office pursuant to Education Law §306, citing Application of Bd. of Educ. of the City Sch. Dist. of the City of Buffalo, 57 Ed Dept Rep, Decision No. 17,147 and other Decisions of the Commissioner of Education.

That said, the Commissioner noted that in a removal application or an appeal to the Commissioner, a petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he or she seeks relief. Doe, said the Commissioner, did not meet his burden of proving that Respondent disclosed confidential information learned in the course of her duties as a board member.

* Given the confidential nature of the Part 83 referral [Moral Character Actions] described herein, Petitioner has been assigned a pseudonym, Doe.  [See Appeal of Doe, 56 Ed Dept Rep, Decision No. 17,109.]

Click HERE to access the opinion of the Commissioner.

November 10, 2021

Challenging Adverse Personnel Decisions -

A 766-page E-book focusing on appealing penalties imposed following disciplinary action, adverse performance ratings, probationary terminations and the denial of unemployment insurance benefits initiated by officers and employees of New York State as an employer and its political subdivisions. For more information about this electronic handbook click HERE.

November 09, 2021

Appealing a decision of the Workers' Compensation Board denying claimant's request to reopen or rehear a prior Board decision

The Appellate Division reversed a decision by the Workers' Compensation Board which denied the claimant's [Claimant] request to reopen or rehear a prior decision.

Whether to grant an application for reopening or rehearing in the interest of justice is a matter left to the Board's discretion and Appellate Division's review of that decision is limited to whether there was an abuse of that discretion by the Board. In this instance the court found that such discretion was abused by the Board.

The court explained, "Notably, while the Board is free to reject the opinion of an expert where it finds such to be unconvincing or incredible, it may not reject an uncontradicted opinion that is properly rendered." Because the only medical opinion before the Board clearly reflects that claimant suffered a 35% SLU of the left shoulder, the Appellate Division found that the Board's denial of the application to reopen the claim to modify the decision in the interest of justice was an abuse of discretion.

Click HERE to access the full text of the court's decision.

November 08, 2021

Former town tax collector pleads guilty to offering a false instrument for filing in connection with pension fraud scheme

On November 5, 2021, State Comptroller Thomas P. DiNapoli and Orange County District Attorney David M. Hoovler announced that the former Town of Bethel, Sullivan County, Tax Collector,  Debra Gabriel, pleaded guilty before Judge Peter Feinberg in the Town of Rockland Justice Court to Offering a False Instrument for Filing in the Second Degree, in connection with a scheme to defraud the New York State and Local Retirement System.  Gabriel, 62, had resigned her public office and retired in August 2020.

The case against Gabriel is being prosecuted by Orange County District Attorney David Hoovler, appointed to serve as Special Prosecutor and Orange County Assistants District Attorney Peter Fernandez, Matthew Healy and Pakiza Sajid.

At the time that she pleaded guilty, Gabriel admitted having submitted a false "Record of Activity" with the Town of Bethel for filing with the State Comptroller.  Records of Activity are documents in which certain appointed or elected officials must record a daily detail of their hours worked and duties and certify their accuracy. The information is used to calculate their service time for retirement benefits.

An investigation of Gabriel’s Records of Activity conducted by the New York State Comptroller’s Office and the New York State Police revealed that from April 1, 2009 to Aug.  31, 2019, she falsely claimed credit for full-time work for the Town of Bethel when her actual hours were far less. For example, in 2018 and 2019, she had a full-time job with a private healthcare company, while claiming to also have worked full-time as a Tax Collector for Bethel. Her false claims increased her service credit toward retirement by more than seven years, according to Comptroller DiNapoli.

Gabriel turned over a certified check in the amount of $6,377.46 to prosecutors from the Orange County District Attorney’s Office as restitution to the State of New York for the amount of pension benefits that she was overpaid.

“Ms. Gabriel, as tax collector, was responsible for overseeing the collection of revenue for the town while at the same time she regularly filed false statements with the New York State and Local Retirement System to commit fraud,” said Comptroller DiNapoli. “Now, thanks to my partnership with District Attorney Hoovler and the New York State Police, she has been convicted and repaid the money she stole.”

District Attorney Hoovler thanked the New York State Comptroller’s Office and New York State Police for their investigation and the arrest of the defendant.  

“I thank State Comptroller DiNapoli for all the work his office did in this investigation, as well as the New York State Police who aided in the investigation and arrested the defendant,” said District Attorney David M. Hoovler. “Thefts of public monies are always serious. One of the benefits of public service is the ability to obtain a pension. Those funds will simply not be available to those who earned them if fraudulent practices are tolerated.”

November 05, 2021

Audits and reports issued during the week ending November 5, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued during the week ending November 5, 2021. 

Click on the text highlighted in color to access the complete audit report.

 

STATE DEPARTMENTS AND AGENCIES

New York State Health Insurance Program (NYSHIP): UnitedHealthcare: Improper Payments for Acupuncture and Acupuncture-Related Services (2020-S-7) NYSHIP, administered by the Department of Civil Service, provides health insurance coverage to over 1.2 million active and retired state, participating local government, and school district employees, and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP. Civil Service contracts with UnitedHealthcare Insurance Company of New York (United) to administer the medical/surgical portion of the Empire Plan and process and pay claims submitted by health care providers. We identified $7,331,458 in actual and potential overpayments for services not supported by provider documentation and for duplicate payments during our audit period of the period from Jan. 1, 2015 through Dec. 31, 2019. 

 

Metropolitan Transportation Authority (MTA) - New York City Transit: Maintenance and Inspection of Event Recorder Units (ERUs) (Follow-Up) (2021-F-14) ERUs or “black boxes” are a valuable safety feature that allow for the monitoring of the train equipment and technical analysis of incidents/accidents based on data they record. An audit issued in July 2019, found the MTA was not in compliance with its ERU maintenance and inspection policy. For instance, train car inspections were not always done timely, and for 129 inspections, maintenance personnel did not provide evidence that they downloaded information from ERUs to ensure that they were functioning correctly, as required by work manuals. In a follow-up, auditors found that MTA officials have made progress in addressing the issues identified in the initial report. 

 

Metropolitan Transportation Authority (MTA) - Bridges and Tunnels: Efforts to Collect Tolls and Fees Using License Plate Images and Law Firms (Follow-Up) (2021-F-15) An audit issued in 2018 of the MTA’s collections during the pilot run of Cashless Tolling at the Henry Hudson Bridge found that the MTA did not maximize toll collection because license plate images could not always be processed, resulting in potential lost revenue of $2.4 million. Additionally, the authority’s contracted law firms were not effective in collecting outstanding receivables from persistent toll violators. In a follow-up, auditors determined that MTA officials made progress in addressing the issues identified in the initial report but noted that after the MTA’s system-wide roll out, both the dollars lost through leakage and the percentage of unbilled transactions increased. From September 2019 to June 2021, the MTA had more than six million unbilled tolls, with an estimated loss of $55.7 million.  

 

Multi-Agency: Compliance With Executive Order 95 - Achieving Transparency and Citizen Engagement Through Open Data (2021-D-1) Auditors conducted a series of reports to examine state agencies’ compliance with EO 95 to improve accountability and support continuous improvement of Open Data, increasing its benefits to the public and government entities. OSC audited Open Data compliance at the Department of State, Office of General Services, Olympic Regional Development Authority, Department of Environmental Conservation, and Office of Parks, Recreation and Historic Preservation. Compliance with EO 95 requirements varied across the five agencies audited. OSC determined that most agencies were not in full compliance with EO 95, and that data was not always reliable or easily usable, limiting its value. 

 

State Education Department (SED) (Preschool Special Education Audit Initiative): Omni Childhood Center, Inc. - Compliance With the Reimbursable Cost Manual (2021-S-66) Omni is a New York City-based proprietary organization authorized by SED to provide preschool Special Education Itinerant Teacher services to children with disabilities who are between the ages of 3 and 5 years. For the three fiscal years ended June 30, 2015, auditors identified $1,588,037 in reported costs that did not comply with state requirements for reimbursement. 

 

Division of State Police: Processing of Sexual Offense Evidence Collection Kits (Follow-Up) (2021-F-19)An audit issued in May 2020 found that from Nov. 28, 2017 to Oct. 31, 2019, state police processed 1,656 kits, but only 356 of them were completed within the time frames prescribed by law. Also, as of Oct. 31, 2019, state police had 1,916 unprocessed kits, and the required processing time frame had elapsed for 1,681 of them. During the audit, the division had taken steps to speed up kit processing; however, it was not able to meet the required time frames. In a follow-up, auditors found the division implemented the recommendation made in the initial report, resulting in significant progress in addressing the issues identified. 

 

Department of Taxation and Finance - Department of Administration and Collection of Real Estate Transfer Taxes (RETT) (Follow-Up) (2021-F-10) An audit issued in January 2019 found that the department had – with certain exceptions – adequate systems and practices in place that allowed it to effectively administer and collect RETT, however, nearly all counties submitted RETT information in hard copy form at the time of the audit, of which only a small portion was entered into an electronic system and capable of being analyzed. Auditors also identified certain RETT errors in one of the department’s internal systems. In a follow-up, auditors found the department has made significant progress in addressing the issues identified. 

 

Department of Taxation and Finance: Sales Tax Vendor Registration Practices (2020-S-40) The state share of sales and use tax collections is the second largest tax amount collected annually. Taxable online sales have been rising with an acceleration of such sales during the pandemic, with large retailers as well as online marketplaces reporting growth. Auditors examined whether the Department of Taxation and Finance has taken steps to ensure that persons who are required to register as sales tax vendors, including those with no physical presence in the state, have done so. Auditors identified vendors that were denied a certificate of authority (COA) to collect sales taxes, yet continued to operate and likely made taxable sales, as well as unregistered vendors that submitted sales tax returns showing taxable sales. For the two samples of 50 and 43 vendors tested in these areas, auditors identified 18 vendors that reported taxable sales, or were potentially making taxable sales, without a valid COA. These 18 vendors may have been subject to penalties totaling up to $180,000. These findings were attributable, in part, to the lack of information-sharing among the department’s divisions and the lack of relevant follow-up. 

 

Department of Transportation (DOT): Controls Over Vehicle Use and Transportation-Related Expenses (2019-S-37)DOT has not established adequate controls to effectively monitor and ensure accountability over maintenance expenses. DOT performs limited to no central monitoring of procurements made through the contractor and has not determined if the contractor is complying with contract terms, despite central office and regional office managers’ concerns. The department could also improve controls over recalls, warranties, and oversight of fuel and mileage usage. 

November 03, 2021

Only evidence admitted at the hearing may be considered by hearing officer, the appointing authority and the courts

A probation officer [Plaintiff] was involved in a domestic incident with his then-girlfriend at their shared residence. This resulted in Plaintiff's arrest. A year later Plaintiff pleaded guilty to a single violation of harassment in the second degree and he was  sentenced to a conditional discharge.

Two days after the incident, however, and one day after Plaintiff's arrest, the appointing authority [Respondent] initiated disciplinary proceeding against Plaintiff pursuant to Civil Service Law §75, alleging misconduct as evidenced by the Respondent's arrest.

A Hearing Officer issued a report finding Plaintiff guilty of all but one specification set out in one of the charges, and recommended the Respondent impose the penalty of termination. Respondent adopted the Hearing Officer's findings and terminated Plaintiff's employment.

Plaintiff then commenced a CPLR Article 78 proceeding, contending that the charges were facially insufficient, Respondent's determination was not supported by substantial evidence and the penalty of termination was shocking to one's sense of fairness.

Supreme Court found that the charges were facially sufficient and, concluding that the remaining arguments raised questions of substantial evidence, transferred the matter to Appellant Division pursuant to CPLR §7804 (g).

The Appellate Division remanded the matter to Supreme Court explaining:

1. The administrative body or officer whose decision is under review is required to file with Supreme Court "a certified transcript of the record of the proceedings under consideration," and that court "may order the body or officer to supply any defect or omission in the . . . transcript" (CPLR 7804 [e]).

2. Where, as here, the substantial evidence issue is raised, Supreme Court "shall first dispose of such other objections as could terminate the proceeding . . . without reaching the substantial evidence issue." (CPLR 7804 [g]).

3. When a CPLR Article 78 proceeding comes before the Appellate Division, it "shall dispose of all issues in the proceeding, or, if the papers are insufficient, it may remit the proceeding, citing CPLR §7804 [g]).

Here, Plaintiff's petition asserted that the Hearing Officer and Respondent improperly considered documents that were neither offered nor accepted as evidence at the hearing. Accordingly, said the court, Supreme Court should have addressed what evidence was properly in the record on review prior to transferring the substantial evidence issue to the Appellate Division.

The Appellate Division then withheld decision and remit the matter to Supreme Court "to settle the record by determining which documents were admitted in evidence before the Hearing Officer," as only evidence admitted at the hearing may be considered by hearing officer, the Respondent and the courts.

Click HERE to access the Appellate Division's opinion.

November 02, 2021

Failure to acquire the jurisdiction of the court fatal to petitioner's cause of action

The Pro Se Petitioner in this action to recover damages for alleged employment discrimination on the basis of race and national origin, served the respondents  [Defendants] by depositing the summons and complaint in a United States Postal Service mailbox.

Typically the court does not have personal jurisdiction over a defendant should a plaintiff fails to properly effect service of process on the defendant. In those instances in which process has not been served upon a defendant, all subsequent proceedings will be rendered null and void.

In this CPLR Article 78 action the Defendants, pursuant to CPLR §3211(a)(8), moved to dismiss the complaint for lack of personal jurisdiction. Supreme Court granted the Defendants' motion and Plaintiff appealed.

The Appellate Division affirmed Supreme Court's ruling, noting that by mailing the summons and complaint via regular mail the Plaintiff failed to properly effectuate service concluding that Supreme Court properly granted Defendants' motion to dismiss the complaint insofar as asserted against them for lack of personal jurisdiction.

Click HEREto access the Appellate Division's ruling.

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New York Public Personnel Law Blog Editor Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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