New York State Comptroller DiNapoli releases municipal and school audits

On March 29, 2024, New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.

Click on the text highlighted in color to access both the summary and the complete audit report

 

Village of Cato – Water Financial Operations (Cayuga County)

The board and officials did not effectively manage the financial operations of the water fund, establish adequate reserves or develop long-term financial and capital plans until the Cayuga County Health Department forced the board to submit a plan. In addition, $42,696 in unauthorized billing adjustments were made. Of 464 water bills reviewed (totaling $134,852), 71 had calculation errors totaling $7,903 which included $6,607 that should have been billed and collected and $1,296 in overbillings. Auditors found 27% of the water produced (at a cost of approximately $20,000), or 9.4 million gallons, is considered unauthorized non-revenue water or lost water. In addition, long-term capital water needs were not appropriately planned for. 

Clymer Central School District – Payroll (Chautauqua County)

Employee compensation payments were not always accurate, approved or supported. District officials did not ensure pay rates were accurate or that compensation was paid in compliance with employment agreements. As a result, payroll errors went undetected and resulted in unnecessary and erroneous payroll payments. District officials made compensation errors totaling $28,500 because they used incorrect pay rates or incorrect hours/days worked to calculate 16 employees’ pay and paid five employees a total of $4,792 for retroactive raises that were not authorized by the board of education. Officials also paid 16 employees perfect attendance awards totaling $2,550 that they were not eligible for  and did not require written prior authorization for overtime work. Another 12 overtime payments totaling $1,858 were not supported with evidence of approval.

 

Deer Park Union Free School District – Fuel and Vehicle Inventory (Suffolk County)

District officials did not adequately maintain vehicle inventory or monitor fuel usage. As a result, vehicles and fuel were not properly accounted for. Officials did not maintain accurate inventory records of vehicle additions and disposals, and there were discrepancies with 19 vehicle inventory records. In addition. officials did not obtain board of education approval prior to disposing of vehicles, or promptly remove unused vehicles from insurance, resulting in $17,237 of unnecessary costs. Auditors also found 44,976 gallons of fuel was dispensed without identifying who pumped the fuel.

 

Green Tech High Charter School – Payroll (Albany County)

Officials did not accurately pay salaries and wages to 10 of the 67 employees reviewed and could not support payments made to 54 employees totaling $41,626. Officials made payroll calculation errors totaling $1,210 for 10 salaried employees and did not maintain time sheets or payroll status change forms documenting approved pay rates to support $7,220 in wages paid to three hourly employees reviewed. Official also could not support approvals for miscellaneous payments totaling $16,706 made to seven employees or support class coverage payments totaling $17,700 made to 44 employees.

 

Garden City Union Free School District – Information Technology (IT) Asset Management (Nassau County)

District officials did not properly track or inventory IT assets, maintain complete IT inventory records or safeguard IT assets. As a result, officials cannot assure taxpayers that IT assets are adequately accounted for and would be detected if lost, stolen or misused. Auditors selected 60 IT assets from invoices and device management reports to confirm their location and that they were inventoried and 10 additional IT assets to confirm they were inventoried. They determined that 23% of the assets were not properly accounted for.

 

Inlet Common School District – Claims Processing (Hamilton County)

The claims reviewed were supported and for appropriate purposes but did not have evidence that they were audited and approved before payment. As a result, the district has an increased risk that unauthorized claims could be paid. The board and district officials did not provide effective oversight of claim processing and payment. Board members did not document the date that they authorized claims to be paid. In addition, district officials used a debit card to pay for 60 purchases totaling $6,840 that were not subject to board approval.

 

Lewis County Court and Trust

Auditors reviewed the processes, procedures and records for the receipt and management of court and trust funds as well as estates in the treasurer’s custody and found that the treasurer generally established adequate procedures, maintained appropriate records, and properly reported court and trust funds. However, auditors identified $239 that improperly remained in the treasurer’s custody that should have been turned over to the State Comptroller as abandoned property.

 

Morley Volunteer Fire Company – Misappropriation of Funds (St. Lawrence County)

Company officials did not provide oversight of financial operations to ensure funds were safeguarded. As a result, the former treasurer was able to misappropriate $64,972 of company funds from January 2016 through Dec. 2019. The former treasurer was able to obtain cash totaling $45,400 by making inappropriate automated teller machine and in-bank withdrawals, writing unauthorized checks to herself and receiving cash from company funds presented for deposit and make 178 personal purchases totaling $19,572 using a company debit card. These improper transactions went undetected because company officials did not review monthly bank statements and canceled check images, receive monthly financial reports, audit bills prior to payment or compare cash collections to deposits. The former treasurer was arrested in July 2023 and pleaded guilty to grand larceny in the fourth degree in November 2023. She was sentenced to probation in January 2024 and ordered to pay $50,000 in restitution.

 

Shenendehowa Central School District – Longevity Payments (Saratoga County)

District officials did not ensure longevity payments for employees separating from service were accurate, supported and approved. District officials did not accurately calculate longevity payments for 26 of the 32 (81%) employees reviewed. As a result, 26 employees were underpaid a total of $9,214 in longevity for separation payments. Although employees covered by the Shenendehowa United Supervisors’ Association and Management Confidential collective bargaining agreements receive longevity payments, their agreements do not include language for these payments upon separation.

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Deeming an employee's unauthorized work absences from work "a voluntary resignation"

The employer had deemed the employee's unauthorized work absences from work "a voluntary resignation from his employment" and terminated him from the position. The employee's union demanded the employer's action be submitted to arbitration.

The arbitrator ruled in favor of the employee organization, directing the employee's reinstatement with back salary and benefits. The employer appealed the arbitrator's ruling pursuant to Article 75 of the CPLR. 

The Appellate Division ultimately confirmed the arbitrator's award, reversing so much Supreme Court's decision that vacated the arbitrator's awarding the employee back pay and benefits, thus reinstating and affirming the arbitrator's award as promulgated. The Appellate Division's ruling is set out below.

N.B. Former 4 NYCRR 5.3(d), repealed effective February 27, 1979, provided that a state officer or employee absent for a period of ten or more days without an explanation could be deemed to have resigned from his position. In Bernstein v Industrial Commissioner, 57 AD2d 767, 4 NYCRR 5.3(d) was held to violate the employee's right to due process. See, also, Laurido v Simon, 489 F. Supp. 1169.

Notwithstanding Bernstein, such a provision has been held lawful if the parties had agreed to memorializing such a term or condition of employment in a collective bargaining agreement as a result negotiations within the meaning of Article 14 of the Civil Service Law. Typically the courts will decline to void the provisions of such agreements except in cases involving a violation of a strong public policy. 

 

Matter of County of Albany (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO,  Albany County Local 801)

2023 NY Slip Op 01828

Decided on April 6, 2023

Appellate Division, Third Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered:April 6, 2023

535386

In the Matter of the Arbitration between County of Albany, Respondent, and Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, Albany County Local 801, et al., Appellants.

Calendar Date:February 16, 2023
Before:Egan Jr., J.P., Clark, Pritzker, Ceresia and Fisher, JJ.

Daren J. Rylewicz, Civil Service Employees Association, Inc., Albany (Scott Lieberman of counsel), for appellants.

Eugenia Koutelis Condon, County Attorney, Albany (Yorden C. Huban of counsel), for respondent.

 

Pritzker, J.

Appeal from an order of the Supreme Court (Christina L. Ryba, J.), entered March 14, 2022 in Albany County, which partially granted petitioner's application pursuant to CPLR 7511 to vacate an arbitration award.

Respondent Michael J. Frazier was an employee of petitioner within the Department of General Services. In May 2020, after being absent from work despite not having any accrued sick leave and having not been approved for medical leave under the Family Medical Leave Act (hereinafter FMLA),^[FN1] Frazier was served with a notice of discipline charging him with unauthorized work absences and informing him that such action was interpreted as a violation of the Rules and Regulations of Albany County Employees (hereinafter the rules) and the collective bargaining agreement (hereinafter the CBA) between respondent Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO, Albany County Local 801 (hereinafter CSEA) and petitioner. Considering Frazier's unauthorized work absences and lack of medical certification, petitioner interpreted Frazier's actions as a voluntary resignation from his employment. Thereafter, CSEA filed a grievance on Frazier's behalf, demanding that petitioner arbitrate the terms of Frazier's employment. Following an arbitration hearing, the arbitrator found that Frazier's absence did not constitute just cause for disciplinary action under the CBA.^[FN2] As such, the arbitrator granted CSEA's grievance and awarded Frazier reinstatement as well as back pay and benefits. Petitioner subsequently commenced this proceeding pursuant to CPLR article 75 to vacate the arbitrator's award on the ground that the arbitrator exceeded her authority by awarding Frazier back pay and benefits. Thereafter, respondents joined issue and requested that Supreme Court deny the petition. The court found no basis to disturb the arbitrator's finding that Frazier's actions did not amount to a voluntary resignation yet held that the arbitrator exceeded her authority by awarding Frazier back pay and benefits from the time of his termination to his reinstatement because the imposition of such remedy exceeded the stipulated issue as set forth by the parties. Accordingly, the court partially granted the petition and vacated that portion of the arbitrator's award. Respondents appeal.

Respondents assert that Supreme Court erred in partially granting the petition and vacating the arbitrator's award of back pay and benefits based upon a determination that said award exceeded the arbitrator's authority because doing so was beyond the scope of the two-part stipulated issue. We agree. Here, the stipulated issue reads as follows: "Did [petitioner] have just cause to discipline [Frazier]? If so, what is the appropriate penalty, if any?" The court interpreted this to mean that the arbitrator could only proceed to the second question and determine a penalty if she found that petitioner did have just cause to discipline Frazier, which the arbitrator determined it did not. Therefore, the court found that the arbitrator acted in excess of her authority. Significantly, petitioner did not submit this theory as a basis for vacating the award; rather, it only asserted that the award of back pay and benefits should be vacated because the arbitrator exceeded her authority based solely on the fact that Frazier wouldn't have been entitled to these benefits if out on FMLA leave, which he was in the process of applying for. As such, because Supreme Court sua sponte reached this dispositive issue, respondents were unable to address it. "The lack of notice and opportunity to be heard implicates the fundamental issue of fairness that is the cornerstone of due process" (Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d 45, 54 [2d Dept 2014]; see Frank M. Flower & Sons, Inc. v North Oyster Bay Baymen's Assn., Inc., 150 AD3d 965, 966 [2d Dept 2017]). Thus, we cannot sustain Supreme Court's partial granting of the petition on this ground (see Matter of Level 3 Communications, LLC v Essex County, 129 AD3d 1255, 1256 [3d Dept 2015], lv denied 26 NY3d 907 [2015]).^[FN3]

Inasmuch as Supreme Court denied back pay and benefits based on a procedural issue, given that the record is fully developed and in the interest of judicial economy, we deem it appropriate to decide that portion of the petition seeking to vacate the award of back pay and benefits on the merits, rather than remitting the matter to Supreme Court (see generally Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d at 56). To that end, "[j]udicial review of arbitral awards is extremely limited. Pursuant to CPLR 7511 (b) (1), a court may vacate an award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power" (Matter of Czerwinski [New York State Dept. of Corr. & Community Supervision], 173 AD3d 1325, 1326 [3d Dept 2019] [internal quotation marks and citations omitted]; see CPLR 7511 [b] [1] [iii]). "Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact" (Matter of Barron [State of N.Y. Off. of Mental Health], 135 AD3d 1111, 1112 [3d Dept 2016] [internal quotation marks and citations omitted], lv denied 27 NY3d 905 [2016]). "[I]t is well settled that an arbitrator has broad discretion to determine a dispute and fix a remedy, and that any contractual limitation on that discretion must be contained, either explicitly or incorporated by reference, in the arbitration clause itself" (Matter of New York State Dept. of Corr. Servs. [New York State Corr. Officers & Police Benevolent Assn., Inc.], 100 AD3d 1066, 1068 [3d Dept 2012] [internal quotation marks and citations omitted]; see Matter of New York State Governor's Off. of Empl. Relations [New York State Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO], 242 AD2d 756, 756 [3d Dept 1997]).

We discern no basis to vacate the arbitrator's award as to back pay and benefits. Notably, the CBA does not contain "a specifically enumerated limitation on the arbitrator's power" (Matter of Barron [State of New York Office of Mental Health], 135 AD3d at 1112). In fact, it does not explicitly limit the arbitrator's authority in any way other than stating that the arbitrator does not have the power to "amend, modify or delete any provision of the CBA," which does not set any limitations on the arbitrator's power to order the remedy that he or she sees fit (see Matter of Shenendehowa Cent. School Dist. Bd. of Educ. [Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864], 90 AD3d 1114, 1117 [3d Dept 2011], affd 20 NY3d 1026 [2013]; compare Matter of Spratley [New York State Dept. of Corr. & Community Supervision], 180 AD3d 1301, 1302 [3d Dept 2020]; Matter of Kocsis [New York State Div. of Parole], 41 AD3d 1017, 1019 [3d Dept 2007]). We find unpersuasive petitioner's argument that an award of back pay and benefits to the date of termination is in excess of the arbitrator's authority because it was ordered for a time period during which Frazier was only entitled to unpaid FMLA leave. Significantly, no proof was set forth regarding the dates, or any other information, as to the FMLA leave, thus any argument regarding such is speculative, at best. Moreover, since FMLA leave had not been granted prior to termination, once Frazier was terminated this issue became irrelevant. Therefore, the arbitrator's award should be confirmed.

Egan Jr., J.P., Clark, Ceresia and Fisher, JJ., concur.

ORDERED that the order is modified, on the law, with costs, by reversing so much thereof as vacated the award of back pay and benefits; said award reinstated and, as so modified, affirmed.

Footnotes

Footnote 1: Frazier had submitted an FMLA application and was required to submit certain medical certification by May 6, 2020, but he did not do so and was placed on unapproved leave status.

Footnote 2: Neither the grievance nor the transcript of the virtual arbitration hearing were submitted to Supreme Court and have not been included in the record on appeal.

Footnote 3: Were we to address this issue on the merits, we would find that, although awarding Frazier a remedy if the arbitrator found that petitioner did not have just cause to discipline him is not explicitly set forth in the stipulated issue statement, "[n]either the arbitration clause of the [CBA] nor the stipulated submission of issues for arbitration contained a specifically enumerated limitation on the arbitrator's power" (Matter of Barron [State of N.Y. Off. of Mental Health], 135 AD3d 1111, 1112 [3d Dept 2016], lv denied 27 NY3d 905 [2016]). Rather, the issue framing left open the possibility that the arbitrator would find that petitioner lacked just cause, sustain the grievance and thereafter would be "empowered to do justice and the award may well reflect the spirit rather than the letter of the [stipulation and the CBA]" (Matter of Port Washington Union Free School Dist. v Port Washington Teachers Assn., 45 NY2d 411, 418 [1978] [internal quotation marks and citation omitted]). Indeed, it defies logic to have the arbitrator determine that petitioner lacked just case for termination and to not fashion any remedy for Frazier, especially given that the grievance requested that he be "made whole." Moreover, as to the remedy, petitioner is only challenging the back pay and benefits, but not reinstatement, which, given petitioner's current limited view of the stipulated issue statement, would have also been in excess of authority. 

An appointing authority's refusal to participate does not prevent the hearing officer or arbitrator from holding the hearing in absentia and issuing a decision

The New York State Department of Corrections and Community Supervision [DOC] served a notice of discipline on an employee [Individual] setting out five charges against the Individual, each of which centered around the same operative facts -- that the Individual allegedly filed false or misleading incident reports and complaints against her supervisor, with the only difference in the charges being the person or entity to which the Individual's remarks were directed. 

Individual's collective bargaining representative [CSEA] filed a grievance  pursuant to the disciplinary grievance procedure set out in the relevant collective bargaining agreement [CBA]  and the matter was eventually submitted to arbitration, the final step in the contract disciplinary grievance procedure.

CSEA moved to dismiss three of the five charges and a filed a separate motion to preclude certain evidence from being admitted at the disciplinary hearing prior to the arbitration hearing. After allowing the parties to submit their respective arguments in writing, the arbitrator granted CSEA's motion to dismiss in part, dismissing one of the three charges CSEA asked to be withdrawn. The arbitrator also granted CSEA's motion to preclude the introduction of certain evidence in full.

DOC then advised the arbitrator that it would not appear for the hearing unless the arbitrator vacated her earlier decision and reinstate the charge she had dismissed pursuant to CSEA's motion. The arbitrator and DOC subsequently exchanged correspondence over a number of weeks in which DOC reiterated several times that it would not proceed unless all charges — including the charge dismissed by the arbitrator — were heard. Finally DOC move to have the arbitrator recuse herself from the proceeding.

The arbitrator declined to recuse herself, proceeded with the matter notwithstanding the absence of DOC and issued a decision and award without holding an evidentiary hearing. 

The arbitrator dismissed all of the surviving charges and directed that DOC reinstate Employee to her former position "with full back pay and benefits." DOC appealed the arbitrator's award.

The Appellate Division dismissed DOC's appeal, agreeing with the arbitrator that DOC "[did] not meet [its] burden of proof established in the [CBA]" since it "presented no evidence or testimony to prove that [Employee was] guilty of the alleged misconduct identified in the ... notice of discipline."

Finding that DOC "did not waive its right to challenge any of the issues by refusing to participate in the hearing and that the arbitrator exceeded her authority under the relevant CBA provisions by dismissing one charge prior to an evidentiary hearing, Supreme Court granted DOC's cross motion, vacated the arbitration award in its entirety and remanded the matter for "rehearing before a new arbitrator." CSEA appealed Supreme Court's decision.

The Appellate Division reversed the Supreme Court's ruling, holding that the arbitrator acted within her authority and in a manner consistent with the requirements of the CBA and the CPLR. Noting that public policy and the courts have long favored parties' efforts to resolve their disputes by means other than litigation, namely through the alternative submitting the issue to mediation or arbitration, the Appellate Division explained that "[T]he announced policy of this [s]tate favors and encourages arbitration as a means of conserving the time and resources of the courts and the contracting parties," citing Nationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d 91.

Further, declared the Appellate Division, an arbitration award "must be upheld when the arbitrator offers even a barely colorable justification for the outcome reached," although it may be vacated when "it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Thus "[c]ourts must give deference to an arbitrator's decision and cannot examine the merits of an arbitration award, even if the arbitrator misapplied or misinterpreted law or facts," noting the ruling handed down in Shenendehowa Cent. School Dist. Bd. Of Educ. [Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864], 90 AD3d 1114.

The Appellate Division then reversed the Supreme Court's the order "on the law" and granted CSEA's application to confirm the arbitration award while denying DOC's cross motion to vacate the arbitration award.

Another case, Aures v Buffalo Board of Education, 272 A.D.2d 664, presented a similar situation.

In Aures, the employer, the Buffalo City School District, failed to appear at an unemployment insurance hearing as scheduled. The hearing officer proceeded to hold the hearing “in absentia” and awarded unemployment insurance benefits to the claimant seeking unemployment insurance benefits. Rejecting Buffalo’s appeal challenging the award of such benefits, the Appellate Division ruled that the determination of the Unemployment Insurance Administrative Law Judge was binding on the parties.

The decision in Matter of the Arbitration between CSEA and DOC is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_07007.htm.

Guidelines for confirming an award issued pursuant to compulsory interest arbitration

Guidelines for confirming an award issued pursuant to compulsory interest arbitration

Matter of Walker (Read), 2019 NY Slip Op 00340, Appellate Division, Third Department

The collective bargaining agreement [CBA] for uniformed firefighters [Firefighters] employed by the City of Plattsburgh [Plattsburgh], with the exception of the Fire Chief and the Assistant Fire Chief, expired. Since the expiration of that CBA the Firefighters and Plattsburgh had participated in compulsory interest arbitration three times to resolve disputes that arose during their negotiations of successor agreements as provided by Civil Service Law §209[4]).

In 2016 an arbitration award covering the 2012-2013 contract period granted the firefighters a 2% wage increase for 2012 and 2013, carried through 2017, and directed that all retroactive payments be disbursed within 45 days of the award.*  

Plattsburgh, however, failed to implement the mandated wage increases and make the required retroactive payments whereupon Firefighters commenced a CPLR §75.10 proceeding seeking to confirm the arbitration award. Plattsburgh, on the other hand, cross-moved to vacate the award as being "violative of public policy and exceeding the scope of the panel's authority."

Supreme Court granted the Firefighters application to confirm the award and denied Plattsburgh's cross motion, prompting Plattsburgh's appealing the Supreme Court's decision.

As a general policy of supporting and encouraging the resolution of disputes through arbitration (see Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d 880, judicial interference with an arbitration award is confined to narrowly circumscribed circumstances. Courts may vacate an arbitration award if the arbitrator exceeded his or her authority by issuing an award that violates a strong public policy, is irrational or clearly exceeds a specific, enumerated limitation on the arbitrator's power (see Matter of Shenendehowa Cent. Sch. Dist. Bd. of Educ. [Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864], 20 NY3d 1026.**

Addressing Plattsburgh's argument that the arbitration award should be vacated on the basis that it violated public policy, the court said that in granting relief on such grounds "courts must be able to examine [the] arbitration ...  award on its face, without engaging in extended fact-finding or legal analysis, and conclude that public policy precludes its enforcement." In other words, said the Appellate Division, "judicial inquiry is constrained to determining whether 'the actual result of the arbitration process' — without evaluation of the underlying rationale — on its face, and 'because of its reach, . . . violates an explicit law of this [s]tate'."

Plattsburgh contended that the enactment of Chapter 67 of the Laws of 2013 demonstrated that a strong state public policy exists "to control and stabilize the [general] fund balance and real property tax levies of 'fiscally eligible municipalities' who are experiencing ongoing fiscal distress," arguing that the award of a 2% salary increase for 2012 and 2013, carried through 2017, would deepen Plattsburgh's fiscal crisis by requiring it to completely deplete its general fund balance and raise taxes over the tax cap.

The Appellate Division said that Plattsburgh's reliance on such an argument was misplaced, explaining that, as  relevant here, Chapter 67 established a permanent financial restructuring for local governments to "provide a meaningful, substantive avenue for fiscally eligible municipalities to reform and restructure and provide public services in a cost-effective manner," while also setting "new parameters for arbitration awards" involving fiscally eligible municipalities.

Where, as here, the public interest arbitration panel determines that the public employer is a fiscally eligible municipality, the panel must, "first and foremost, consider [the public employer's] ability to pay by assigning [that criterion] a weight of [70%]", while assigning an aggregate weight of 30% to the remaining statutory criteria set out in Civil Service Law §209 subdivisions [4][c][v] and [6][e].

In the view of the Appellate Division, the amendments relied upon by Plattsburgh did not a "reveal strong and well-defined policy considerations prohibiting, in an absolute sense, the relief awarded here — that is, the 2% salary increases and the retroactive payments flowing therefrom" but rather "clearly evince a general policy recognizing the importance of considering, during the arbitration process, the fiscal status of fiscally-distressed municipalities" and the law requires only that, "when resolving a dispute and fashioning an award, the public interest arbitration panel accord a weight of 70% to a fiscally eligible municipality's ability to pay."

Concluding that the arbitration panel had complied with its mandate and the required 70% weighting factor, the Appellate Division said it could not reweigh the statutory factors and substitute its judgment for that of the arbitration panel nor could it engage in the extended fact-finding or legal analysis required by Plattsburgh's argument.

Finding that the arbitration award was not prohibited by a strong and well-defined policy embodied in law, the Appellate Division concluded that there was no basis upon which to invoke the public policy exception to vacate the arbitration award. Further, ruled the court, there was no merit to Plattsburgh's argument that the arbitration award mandated legislative action and in its absence, the panel exceeded the scope of its authority.

* Before issuing this arbitration award, the panel offered the parties an opportunity to consent to an alternate proposed opinion and award granting the panel the authority to issue a determination addressing more than a two-year period and, if agreed to, providing for, among other things, a 1.5% wage increase for 2012, 2013 and 2014 and a 1.75% wage increase for 2015, 2016 and 2017. However, the Common Council of the City of Plattsburgh unanimously rejected this alternate proposed opinion and award. 

** Citing Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 NY3d 85, the Appellate Division observed that "Even where an arbitrator has made an error of law or fact, courts generally may not disturb the arbitrator's decision".

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_00340.htm

State Department of Audit and Control holding more than $14 billion in unclaimed funds

State Department of Audit and Control holding more than $14 billion in unclaimed funds

Source: Office of the State Comptroller

New York State Comptroller Thomas P. DiNapoli announced that his office has over $14.5 billion in unclaimed funds and urged New Yorkers to see if any of it belongs to them. In State Fiscal Year 2015-16

DiNapoli’s office set a national record for the third consecutive year for the most unclaimed funds returned in one year totaling $452 million.

Individuals are not the only entities for whom the Comptroller is holding unclaimed funds pursuant to the Abandonded Property Law. The Comptroller is also holding monies that may be claimed by State and local governments such as:

Name	Address	Reported By
SCHOOL DISTRICT ACCOUNTS PAY	C/O SHENENDEHOWA CENTRAL SCH D 5 CHELSEA PL CLIFTON PARK NY 12065	SCHOLASTIC BOOK CLUBS INC
SCHOOL DISTRICT NORT	5355 W TAFT RD N SYRACUSE NY	NEW YORK TELEPHONE CO
SCHOOL DISTRICT OF ALBANY	ACADEMY PARK ELK STREET ATTN ACCTS PAYA BLE ALBANY NY 12207	CDW LLC
VILLAGE OF ALEXANDRIA BAY	P O BOX 367 WATERTOWN NY 13601	W B MASON CO INC
VILLAGE OF ALFRED	WATER DEPARTMENT 7 WEST UNIVERSITY STREE T ALFRED NY 14802	ALFRED UNIVERSITY
VILLAGE OF ALFRED POLICE DEPT	7 W UNIVERSITY ST ALFRED NY 14802	GALLS LLC
TOWN OF BATAVIA	8477 STRINGHAM DR BATAVIA NY 14020	NATIONAL GRID - NIAGARA MOHAWK POWER CORP
TOWN OF BEDFORD JUSTICE	161 BUXTON ROAD BEDFORD HILLS NY 10507	CITIBANK NA NATIONAL COMPLIANCE GRP
TOWN OF BETHEL NY	PO BOX 300 3454 RTE 55 WHITE LAKE NY 12786

CITY OF BUFFALO

CITY HALL ROOM 117 BUFFALO NY 14218

INTEGON INDEMNITY INSURANCE CO

CITY OF NEW YORK	C/O LEOPOLD GROSS & SOMMERS PC BROOKLYN NY 11241	STATE FARM FIRE & CASUALTY CO
CITY OF NEW YORK	CO RAYMOND ZAGAMI 624 6 STREET BROOKLYN NY 11215	CITIBANK NA NATIONAL COMPLIANCE GRP
CITY OF NEW YORK	COMMUNITY SCHOOL DISTRICT 17 19 DURYEA P L BROOKLYN NY 11226	YALE UNIVERSITY

UUP BENEFIT TRUST FUND

800 TROY-SCHENECTADY ROAD #3306628 LATHAM NY 12210

CIGNA HEALTH & LIFE INSURANCE CO

CSEA INC FINANCE DEPT	143 WASHINGTON AVE ALBANY NY 12210	OWEGO ASSOCIATES INC
CSEA LOCAL 350	75 VARICK STREET 7TH FLOOR NEW YORK NY 10013	AUTOMATIC DATA PROCESSING INC
CSEA LOCAL 430	45 MALL DR COMMACK NY 11725	DESMOND HOTEL

There are hundreds of other such governmental jurisdictions and employee organizations listed. Individuals and organizations can search the Comptroller's data base of unclaimed funds to see if the Comptroller is holding any of their property in the Abandoned Property Fund by clicking: https://ouf.osc.state.ny.us/ouf/?wicket-crypt=4mZX_EiLHOw

Arbitration award sustained absent proof that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power

Arbitration award sustained absent proof that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power

Shenendehowa Cent. Sch. Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864), 2013 NY Slip Op 00885, Court of Appeals

A school bus driver [Driver] tested positive for marijuana after submitting to a random drug test. This resulted in the School District's terminating Driver from the position, which action was ultimately submitted to arbitration.

The issue presented to the arbitrator: Did the termination of Driver violate the collective bargaining agreement between the parties and, if so, what is the appropriate remedy?

The arbitrator concluded that the School District had violated the agreement and that the penalty imposed on Driver, dismissal, was too severe. The arbitrator directed the School District to reinstate Driver without back pay, subject to certain conditions including an evaluation by a substance abuse professional and a negative drug test.*

The School District filed an CPLR Article 75 petition seeking to vacate that portion of the arbitration award directing that it reinstate Driver to the position of school bus driver and to modify the award by imposing the penalty of termination, contending that Driver had violated the School District’s “zero drug tolerance” policy.

Supreme Court granted the School District’s Article 75 petition seeking to vacate an arbitration award thus  reinstating the School District's decision to terminate Driver's employment with the district.

The Appellate Division vacated the Supreme Court’s ruling, finding that the award was not against public policy, was rational, and in making the award the arbitrator did not exceed his powers, holding that “Supreme Court should have confirmed the arbitration award.” The Appellate Division explained that “If a matter is submitted to arbitration, reviewing courts should not interpret substantive conditions of the agreement or delve into the merits of the dispute.”

Citing Matter of Grasso, 72 AD2d 1463 [Leave to appeal denied, 15 NY3d 703], the court said that "Courts must give deference to an arbitrator's decision and cannot examine the merits of an arbitration award, even if the arbitrator misapplied or misinterpreted the law or facts, but a court may vacate an award [where it] violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power."

Further, the Appellate Division stated that "[W]here an agreement is 'reasonably susceptible of the construction given it by the arbitrator, a court may not vacate the award," citing Matter of Albany County Sheriffs Local 775 of N.Y. State Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO [County of Albany], 27 AD3d 979.

The Court of Appeals agreed with the Appellate Division’s ruling, noting that it has recognized three narrow grounds that may form the basis for vacating an arbitrator's award, repeating the Appellate Division’s criteria that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power, commenting that none of these grounds had been established by the School District in this action.**

Specifically the high court ruled that:

1. The arbitrator's decision did not exceed a specific limitation on his power; nor was it irrational.

2. Contrary to the School District's argument, the parties' agreement did not require the penalty of termination in these circumstances and

3. That the District did not in fact have a zero tolerance policy in place.

According, said the court, the arbitrator’s determination that Driver’s “reinstatement with conditions” was the appropriate penalty did not violate public policy. Although, said the court, “reasonable minds might disagree over what the proper penalty should have been [this] does not provide a basis for vacating the arbitral award or refashioning the penalty...."

Significantly the Court of Appeals noted that the arbitrator “determined that, contrary to the School District's argument, the parties' Taylor Law agreement did not require the penalty of termination in these circumstances and that the District did not in fact have a zero tolerance policy.” This suggests that had the Taylor Law agreement provided for termination in the event the employee tested positive for an unlawful drug or if the School District had a written "Zero Tolerance" drug policy known to Driver in place at the time Driver tested positive for an unlawful drug, the School District would have prevailed.

* The decision notes that “This effectively imposed, at that time, a six-month unpaid suspension” on Driver.

** Article 75 of the CPLR sets out other grounds, not relevant in this action, for a court's vacating an arbitration award.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00885.htm

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Court of Appeals to consider arbitration award reinstating school bus driver terminated from the position after testing positive for marihuana in a random drug test

Court of Appeals to consider arbitration award reinstating school bus driver terminated from the position after testing positive for marihuana in a random drug test

Shenendehowa Cent. School Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864), 90 AD3d 1114

The Court of Appeals will hear Shenendehowa Central School District’s appeal from the Appellate Division's ruling sustaining an arbitrator’s award that reinstated a school bus driver terminated after testing positive for marihuana in a random drug test.

Motions by New York State School Boards Association, Inc. and by New York State United Teachers for leave to file briefs amicus curiae on the appeal were also granted by the court.

NYPPL summary the Appellate Division’s ruling in this action is posted on the Internet at:

http://publicpersonnellaw.blogspot.com/search?q=Shenendehowa

Zero drug tolerance policy must be consistent with terms of the collective bargaining agreement

Zero drug tolerance policy must be consistent with terms of the collective bargaining agreement

Matter of Matter of Shenendehowa Cent. School Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, 2011 NY Slip Op 08703, Appellate Division, Third Department

The Civil Service Employees Association had filed a grievance challenging the dismissal of one of the employees in the collective bargaining unit it represented was terminated after failing a random test for drug and alcohol test. The issues that the parties jointly presented to the arbitrator were, "Did [the school district] violate Article IV of the Collective Bargaining Agreement [CBA] when it terminated [the employee]? If so, what shall the remedy be?"

The arbitrator determined that employee had tested positive for marijuana, but that the school district had violated the CBA by terminating her. As a remedy, the arbitrator directed that the employee be reinstate, without back pay, but required that she comply with follow-up drug and alcohol testing and an evaluation by a substance abuse professional.

Supreme Court granted the Shenendehowa Central School District’s Article 75 petition seeking vacate an arbitration award thereby “reinstating the employee’s termination.”

The Appellate Division disagreed, ruling that the award was not against public policy was rational, and in making the award the arbitrator did not exceed his powers, holding that “Supreme Court should have confirmed the arbitration award.”

The Appellate Division explained that “If a matter is submitted to arbitration, reviewing courts should not interpret substantive conditions of the agreement or delve into the merits of the dispute.” Citing Matter of Grasso, 72 AD2d 1463 [Leave to appeal denied, 15 NY3d 703], the court said that "Courts must give deference to an arbitrator's decision and cannot examine the merits of an arbitration award, even if the arbitrator misapplied or misinterpreted the law or facts, but a court may vacate an award" where it "violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Further, the Appellate Division stated that "[W]here an agreement is 'reasonably susceptible of the construction given it by the arbitrator, a court may not vacate the award," citing Matter of Albany County Sheriffs Local 775 of N.Y. State Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO [County of Albany], 27 AD3d 979.

Underlying the school district’s decision to terminate the employee was its assertion that it had “a zero tolerance policy concerning positive drug tests, thereby mandating discharge.” However, said the court, no such written policy was produced in evidence. Rather, the school district’s written drug testing policy states that a violation "shall be grounds for disciplinary action including, but not limited to, fines, suspension and/or discharge."

Here, said the Appellate Division, the arbitrator reasoned that the school district did not have a written zero tolerance policy. When read in conjunction with the CBA, the district’s policy “permitted either suspension without pay or discharge after a positive drug test result.”

The arbitrator, the court found, determined that school district had violated the CBA by refusing to consider the disciplinary options provided for in petitioner's own policy and the CBA, instead imposing the penalty of discharge as if it were mandatory.

According to the decision, if the school district intended to implement a zero tolerance policy, it could and should have negotiated with CSEA to include such mandatory language in the CBA. Not having done so, petitioner must abide by the language actually negotiated for and agreed upon with CSEA.

Having determined that the school district had violated the CBA, the arbitrator — who was permitted by the parties' statement of the issues to determine a remedy — then found the appropriate penalty for respondent to be reinstatement without back pay, which equated to a suspension of approximately six months without pay, a rational result and with the powers granted to the arbitrator.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08703.htm

Unemployment Insurance claims

Unemployment Insurance claims
Prusch v Shenendehowa CSD, 259 AD2d 877, Motion for leave to appeal denied, 93 NY2d 816

As a general rule, criticism of an employee’s job performance by a supervisor or receipt of a negative performance evaluation does not necessarily constitute good cause for leaving employment for the purpose of establishing eligibility for unemployment insurance benefits. The same is true with respect to an individual resigning in anticipation of his or her dismissal.

These are the lessons of the Prusch case.

John E. Prusch was employed by the Shenendehowa Central School District as a teacher of foreign languages. He resigned from his position effective April 25, 1997 and applied for unemployment insurance benefits. Prusch indicated that he resigned because he was “stressed out” and because he had received an unsatisfactory rating on a performance review, which recommended that he not be rehired for the upcoming school year.

The Unemployment Insurance Appeal Board rejected Prusch’s claim, ruling that he was disqualified from receiving benefits because he had voluntarily left his employment without good cause. Prusch appealed only to have the Appellate Division affirm the board’s determination.

Although Prusch alleged that he resigned based upon advice from his psychologist that he quit as soon as possible because of stress caused by his negative evaluation, the court commented that the record indicated that he “nevertheless chose to remain, continuing his employment for another month, and his resignation letter contained no reference to a physician’s recommendation.”
NYPPL

Employment contracts in public education

Employment contracts in public education
Brousseau v Shenendehowa CSD, Decisions of the Commissioner of Education #14193

The Shenendehowa Central School District and its Director of Finance, Susan M. Martin, signed an “employment agreement” for the period May 13, 1998 through June 30, 1999 setting out the terms and conditions of Martin’s employment with the district. The agreement also provided that it could be “renewed annually thereafter.”

Eugene Brousseau challenged the authority of the school board to enter into such an agreement with its Director of Finance. He asked Commissioner of Education Richard P. Mills to rescind the agreement. The district, in support of its action, argued that it had authority under Education Law Section 1709(33) “to enter into employment agreements establishing the terms of employment for its employees.”

The Commissioner commenced his analysis by commenting that “there are a limited number of provisions in the Education Law that expressly authorize a board of education to employ specified individuals” such as librarians, “qualified teachers,” an auditor and a superintendent.

However, said the Commissioner, the fact that there are no express provisions for the employment of individuals other than those specifically provided for by law “does not foreclose a board from employing individuals in such positions as are necessary to operate and maintain the school district, because the employment of such persons is a reasonable and necessary means for the board to fulfill its duty to superintend, manage, and control the affairs of the district pursuant to [Education Law] Section 1709(33).”

The Commissioner dismissed Brousseau’s appeal noting that:

1. The authority to contract with employees is implicit in the act of employing such individuals -- hiring an individual “itself creates a contract, whether express or implied, oral or written;”

2. A board of education, “as a public authority,” has a common-law right to contract with teachers and other necessary personnel;” and

3. A board of education may enter into contracts with its employees “to the extent the contract is not inconsistent with other statutory conditions,” citing Courtemanche v Enlarged City School District of Middletown, 686 F.Supp.2d 1025.

Therefore, the Shenendehowa board’s entering into a contract with Martin concerning the terms and conditions of her employment “is authorized as an implicit, reasonably necessary power of the board ... and in addition is authorized pursuant to the board’s common law right to contract.”
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