Florida man alleged to have stolen retirement benefit checks issued to deceased brother

Selected reports issued by the Office of the State Comptroller during the week ending September 3, 2016 
Source: Office of the State Comptroller

[Internet links highlighted in color]

Floridaman alleged to have stolen retirement benefit checks issued to deceased brother

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

New York State Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman announced the unsealing of an indictment charging Robert J. Schusteritsch, 71, of Florida, with the crimes of Grand Larceny in the Second Degree, a class C felony, and Criminal Impersonation in the Second Degree, a class A misdemeanor, in Albany County Court. Schusteritsch is alleged to have stolen over $180,000 in pension benefits issued by the New York State and Local Employees Retirement System to his deceased brother, Martin Petschauer, between July 2008 and September 2015.

http://www.osc.state.ny.us/press/releases/sept16/090116a.htm?utm_source=weekly+news&utm_medium=email&utm_term=corruption&utm_content=20160904&utm_campaign=fiscal+oversight

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online athttp://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

Employer contribution rates to remain almost unchanged for Fiscal 2017-2018

Employer contribution rates for the New York State and Local Retirement System expected to be slightly less in Fiscal Year 2017-18 compared to Fiscal Year 2016-17.

The average contribution rate for the Employees' Retirement System (ERS) will decrease from 15.5 percent of payroll to 15.3 percent of payroll. The average contribution rate for the Police and Fire Retirement System (PFRS) will increase to 24.4 percent from 24.3 percent of payroll.

Employer rates are determined based on actuarial assumptions recommended by the Retirement System's Actuary and approved by DiNapoli.

A copy of the Actuary's report can be found here.

Determining eligibility for "prospective surviving spouse pension benefits"

Determining eligibility for "prospective surviving spouse pension benefits"

Tirado v Board of Trustees of N.Y. City Fire Dept. Pension Fund, Subchapter 2, 2016 NY Slip Op 05925, Appellate Division, Second Department

Judicial review of administrative determinations not made after a quasi-judicial hearing is limited to whether the action taken by the administrative agency was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion.

In resolving this action, which did not involve the review of a ruling made after a quasi-judicial hearing but which required the consideration of a number of issues such as the vacating of a default judgment of divorce, the benefits due surviving minor children of a deceased member of the New York City Fire Department Pension System, and claims that the application for certain retirement benefits was barred by the statute of limitations and the doctrine of laches, Supreme Court annulled the Board of Trustees of the New York City Fire Department Pension Fund, Subchapter 2’s, [Fund] determination denying Sheneque Jackson Tirado’s [Tirado] surviving spouse pension benefits and directed that the Fund commence paying Tirado such pension benefits effective as of August 20, 2012, together with any interest due. 

The Appellate Division affirmed the Supreme Court’s ruling, holding that the Fund’s denial of Tirado’s application for prospective surviving spouse pension benefits was arbitrary and capricious and an abuse of discretion.

Tirado had been separated from her husband, Hector Tirado, Jr. [Hector], a New York City firefighter who died responding to the terrorist attacks on September 11, 2001. After Tirado applied for pension benefits as Hector’s surviving spouse she learned the Hector had obtained a default judgment of divorce against her on March 21, 2001. In April 2002 Tirado filed a petition seeking to vacate the default divorce judgment.*In April 2003, the Supervisor of Pension Payroll of the Fire Department notified her that, as the surviving minor children's guardian, that pension benefits would be paid to the five minor children through their 18th birthdays.

Ultimately the relevant parties entered into an agreement in a Surrogate's Court proceedings to settle the estate whereby Tirado agreed to give the minor children any pension benefits from the Fire Department she received as Hector's surviving spouse in the same manner as the benefits would be distributed if there were no surviving spouse and when the minor children reached an age that they would no longer be eligible to receive pension benefits, Tirado would retain for her own exclusive use and enjoyment any remaining pension benefits until her death. Surrogate's Court vacated the judgment of divorce and in support of the present petition, Tirado’s then-counsel averred that he “notified a representative of the Fund of the vacatur of the divorce judgment and that he believed that he informed the representative about the agreement to defer [Tirado’s] surviving spouse pension benefits.”

The Fund continued to make the retirement payments to the benefit of the minor children. In August and September 2012, Tirado’s counsel wrote three letters to representatives of the Fire Department, noting that the youngest child would attain the age of 18 on August 20, 2012 and none of the children was a full-time student, requesting that "thereafter, the Fund commence paying surviving spouse pension benefits" to Tirado.

The Deputy Commissioner for Administration of the Fire Department responded that in November 2001, the Fund had determined that there was "no surviving spouse and that the death benefit was therefore payable to the Hector's minor children." Noting that the Find had not participated in the proceeding leading to the “vacatur of the divorce,”** the Deputy Commissioner said that the death benefit was a mutually exclusive benefit paid to either a surviving spouse or to surviving minor children and that all pension benefits had been paid in full to the minor children and did not revert to Tirado.

Addressing the Fund’s contention that Tirado’s petition was barred by the statute of limitations and laches, the Appellate Division said that Supreme Court correctly held that Tirado’s petition was timely and consistent with New York City’s Administrative Code §13-347(c).*** 

The Appellate Division explained that Tirado had timely commenced her action within four months of the October 2, 2012 communication from the Fund and that this letter “was the first and only unambiguously final decision sent to [Tirado] regarding her claim for surviving spouse pension benefits.” The court pointed out that while Tirado had been notified in 2003 that pension benefits would commence being paid to the minor children, that notification did not advise her “of the Fund's current position that, once such payments to the children began, they could never revert back to [Tirado] even if she obtained vacatur of the default divorce judgment, nor did it address [Tirado's] claim at all.”

Addressing the Fund’s argument that Tirado’s application was barred by the doctrine of laches, the Appellate Division said that having notified the Fund of her claim to entitlement to surviving spouse pension benefits, and her agreement to defer payment in favor of the children until they reached majority, Tirado did not unreasonably delay in seeking to protect her interests. In addition, said the court, as Tirado sought only prospective pension benefits and not recovery of payments which had already been made to the children, the Fund failed to show any prejudice resulting from Tirado’s delay in seeking payments after she obtained vacatur of the default divorce judgment in 2005.

* The vacatur of the default divorce judgment made Tirado Hector’s surviving spouse as if the default divorce judgment had never been entered and the Fund was not a necessary party to the proceeding to vacate the default divorce judgment merely because it administers benefits which flow from Tirado's marital status.

** The Appellate Division observed that the Fund was not a necessary party to the proceeding to vacate the default divorce judgment merely because it administers benefits which flow from Tirado’s marital status and construing the effect of the order and decree vacating the default divorce judgment was a question of law for the court to resolve and did not require deference to the Fund's area of expertise.

*** Administrative Code §13-347(c) provides that pension benefits "shall" be granted to the decedent's surviving spouse for life, or, if there be no surviving spouse, to surviving minor children until they attain the age of 18, or the age of 23 if a student.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_05925.htm

Exceptions to the general rule that only the union or the employer may demand that an issue be submitted to arbitration

Exceptions to the general rule that only the union or the employer may demand that an issue be submitted to arbitration
Sossous v Herricks Union Free Sch. Dist., 2016 NY Slip Op 05924, Appellate Division, Second Department 

The general rule concerning the right to demand that a grievance be submitted to arbitration in accordance with the terms and conditions of a collective bargaining agreement is that only the union or the employer may make such a demand.

In contrast, a unit member could exercise an independent right to demand arbitration if he or she is able to show that the union’s decision not to submit his or her grievance to arbitration was arbitrary, discriminatory, or made in bad-faith and thus demonstrating a breach of the union's duty of fair representation. 

In the absence of such a showing,  however, a union's "decision to conclude the grievance process short of the final step allowed by the contract or law is binding on the employee and precludes resort to additional remedies”.* 

The Sossous decision by the Appellate Division sets out another exception to the general rule.

The grievant, Final Sossous, filed Article 75 petition seeking to compel arbitration involving the terms of a “settlement agreement” entered into by the Herricks Union Free School District and Herricks Teachers' Association. The School Districtasked the court to dismiss Sossous’ petition, contending that “only the Herricks Teachers' Association, and not [Sossous] individually, may seek arbitration of the issues relating to the settlement agreement.** Supreme Court agreed and dismissed Sossous’ petition.

In this case, however, the argument that only the Herricks Teachers' Association and not Sossous, individually, may seek arbitration of the issues relating to the settlement agreement failed.

The Appellate Division vacated the lower court’s ruling explaining that “under the circumstances of this case, the parties charted their own procedural course by entering into a settlement agreement providing that the arbitrator would retain jurisdiction to resolve ‘any dispute that may arise concerning this settlement agreement.’"

The is consistent with judicial rulings holding that questions concerning compliance with a contractual step-by-step grievance process concern matters of procedural arbitrability are to be resolved by an arbitrator.

In the words of the Appellate Division, Sossous “raises a question of procedural arbitrability that must be resolved by the arbitrator” as the School Districtand the Association agreed that the arbitrator would retain jurisdiction to resolve "any dispute that may arise concerning this settlement agreement."

Accordingly, said the Appellate Division, the Supreme Court should have granted Sossous’ petition to compel arbitration and denied the School District’s cross motion to dismiss the petition.

* New York City Tr. Auth. v Gorrick, 72 AD3d 518.

** Comack Union Free School District v Ambach, 70 NY2d 501.
 

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2016/2016_05924.htm

California Supreme Court opens door for state reimbursing local agencies for unfunded mandates

California Supreme Court opens door for state reimbursing local agencies for unfunded mandates

Department of Finance v Commission on State Mandates, California Supreme Court, S214855

Source: Meyers Nave Legal Alert

A Meyers Nave Internet Newsletter reports that on August 29, 2016 the California Supreme Court handed a victory to local agencies that are seeking to enforce their constitutional right to reimbursement for unfunded mandates imposed by the State. In Department of Finance v Commission on State Mandates,* the Court ruled in favor of public agencies subject to storm water discharge permits, holding that State-mandated storm water permit provisions exceeding federal law requirements may be reimbursable State mandates under Article XIII B, Section 6, of the California Constitution.

While this case arose in the context of storm water regulation, Meyer Nave suggested that the Court's analysis will apply to many unfunded mandate situations going forward and summarized the genesis of the case and the Court's decision as follows: 

“In California, CaliforniaRegional Water Quality Control Boards issue permits under state and federal law for discharges from municipal separate storm sewer systems (MS4s).  Under the federal Clean Water Act, MS4 permits must require controls to "reduce the discharge of pollutants to the maximum extent practicable."  (33 U.S.C. § 1342(p)(3)(B)(iii).)  States may also impose their own requirements so long as they are not less stringent than required under federal law.  (33 U.S.C. § 1370.) 

“In 2001, the Los Angeles Regional Water Quality Control Board (Regional Board) issued an MS4 permit that, among many other things, required local agencies to inspect commercial and industrial facilities, implement programs to inspect and control runoff from construction sites, and place trash receptacles at all transit stops.  The County of Los Angeles and several cities filed test claims with the Commission on State Mandates (Commission) seeking State reimbursement for these permit provisions because they exceeded the federal "maximum extent practicable" standard.  The Commission found all the provisions were unfunded mandates, but the inspection requirements were not reimbursable because local agencies could levy fees or assessments to pay for them.  However, the trial court overturned the Commission's decision, finding that all the permit provisions were mandates imposed by federal law and were not reimbursable state law mandates.  The court of appeal affirmed, and the Supreme Court granted review.

“The Supreme Court held that the California Constitution "establishes a general rule requiring reimbursement of all state-mandated costs," and if the State argues an exception to that rule, such as the federal mandate exception at issue in this case, it "bears the burden of demonstrating that it applies."  The Court found that the State did not carry this burden, and that "[i]t is clear federal law did not compel the Regional Board to impose these particular requirements."  In doing so, the Court also found that in proceedings before the Commission, the Regional Board was not entitled to deference in its conclusion that the permit requirements at issue were federally mandated.  The Supreme Court reversed the Court of Appeal's judgment and remanded the case to the trial court for further proceedings on additional issues raised by the State and on the permittees' cross-appeal that the inspection requirements are reimbursable state mandates.

“In anticipation of the Supreme Court's decision, the Commission has signaled that it intends to clear its backlog of storm water test claims, with hearings beginning in early 2017.  It is also anticipated that another storm water test claim arising out of San Diego County, which is currently fully briefed and pending before the Third Appellate District Court of Appeal, Case No. C070357, may soon be scheduled for supplemental briefing and oral argument.

“In future Commission proceedings, test claimants may argue that once they establish that a statute or executive order (including permits) impose a new program or higher level of service, the State will bear the burden of proving that an exception applies, including exceptions for mandates allegedly imposed by the courts and federal mandates.  Public agencies should now be more vigilant than ever in pursuing their constitutional right to reimbursement of state mandates.”

For additional information e-mail Gregory Newmark, Esq. at gnewmark@meyersnave.com or John Bakker, Esq., at jbakker@meyersnave.com who appeared as Amici Curiae on behalf of Real Parties in Interest and Appellants.

* The text of decision is posted on the Internet at http://www.courts.ca.gov/opinions/documents/S214855.PDF

Disability not a defense to charges of excessive absence from work

Disability not a defense to charges of excessive absence from work

New York City Office of Administrative Tribunals and Hearings Index No. 1410/16

New York City’s Department of Environmental Protection filed disciplinary charges against one of its employees, A.M., alleging that A.M. had been excessively absent since 2014. A.M., who had an absenteeism rate of over 50%, contended that as an individual “hired under the Civil Service Law §55-a Program” due to her diabetes,* §55-a “protected” her from such disciplinary charges and, in addition, presented numerous doctors’ notes to support her absences.

OATH Administrative Law Judge Kara J. Miller found that participation in a §55-a** program position was not a defense to excessive absenteeism and A.M.’s medical notes illustrated her habit of visiting different urgent care clinics every few days in order obtain doctor’s notes and avoid returning to work.

Judge Miller recommended termination of A.M. employment.

Excessive absenteeism as a basis for termination was an issue in Cicero v Triborough Bridge and Tunnel Authority, 264 AD2d 334.

The Authority terminated a toll collector, after finding him guilty of a number of charges including excessive absences. The Appellate Division rejected the toll collector’s argument that his absences were approved and medically justified and therefore excused for the purposes of maintaining any disciplinary action against him.

In Dickinson v New York State Unified Ct. Sys, 99 AD3d 569, the Appellate Division unanimously confirmed the termination of an employee found guilty of “certain disciplinary charges” that alleged both misconduct and incompetency due to excessive absenteeism and lateness. As to the penalty imposed, termination, the court said that it did not shock its sense of fairness as “[b]eing present at work is an essential job function” and an employee’s "disability ... may not be used to shield him [or her] from the adverse consequences of inadequate job performance."

* The Americans with Disabilities Act provides that the determination of whether impairment is a disability is to be made without regard to the ameliorative effects of mitigating measures; diabetes is deemed a disability even if insulin, medication, or diet controls a person's blood glucose levels. 

** §55-a of the Civil Service Law provides for the employment of persons with disabilities by municipalities in position in the competitive class having duties which can be performed by physically or mentally disabled persons who are found qualified to perform satisfactorily such duties. Upon such a determination, the position is jurisdictionally reclassified to non-competitive class.

The A.M. decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/16_cases/16-1410.pdf

Public Citizen, Inc. has filed an amicus brief in support of the U.S. Dept. of Labor’s Fiduciary Rule

Public Citizen, Inc. has filed an amicus brief in support of the U.S. Dept. of Labor’s Fiduciary Rule

Chamber of Commerce of the United States of America, et al. v Thomas E. Perez, Secretary of Labor and United States Department of  Labor, USDC, Northern District of Texas, Dallas Division, Civil Action No. 3:16-cv–1476– M; consolidated with 3:16-cv-1530-C and 3:16-cv-1537-N

The U.S. Department of Labor (DOL) issued a new rule – generally referred to as the fiduciary rule*– which seeks to protect workers’ saving and investments for retirement by mandating that their financial advisers act in a fiduciary capacity when providing financial advice for retirement purposes.

The U.S. Chamber of Commerce, the American Council of Life Insurers and a number of other corporate bodies have challenged DOL’s promulgation of its fiduciary rule, and have filed a lawsuit against the DOL in U.S. District Court for the Northern District of Texas. Among their claims is that the DOJ rule constitutes a content-based restriction on the commercial speech of their members and violates the First Amendment.**

On August 26, 2016, Public Citizen*** filed an amicus brief in support of the DOL’s fiduciary rule.

The Public Citizen’s brief argues that Chamber of Commerce’s First Amendment argument should be rejected because the fiduciary rule does not regulate speech; rather, it regulates the terms of a commercial or professional relationship and duties that attach to it.

DOL has indicated that:

1. The rule describes the kinds of communications that would constitute investment advice and then describes the types of relationships in which those communications would give rise to fiduciary investment advice responsibilities.

2. Covered investment advice is defined as a recommendation to a plan, plan fiduciary, plan participant and beneficiary or IRA owner for a fee or other compensation, direct or indirect, as to the advisability of buying, holding, selling or exchanging securities or other investment property, including recommendations as to the investment of securities or other property after the securities or other property are rolled over, transferred or distributed from a plan or IRA.

3. Covered investment advice also includes recommendations as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, selection of other persons to provide investment advice or investment management services, selection of investment account arrangements (e.g., brokerage versus advisory); or recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made.

4. The fundamental threshold element in establishing the existence of fiduciary investment advice is whether a "recommendation" occurred. A "recommendation" is a communication that, based on its content, context, and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. The more individually tailored the communication is to a specific advice recipient or recipients, the more likely the communication will be viewed as a recommendation. 

DOL states that it "has taken an approach to defining 'recommendation' that is consistent with and based upon the approach taken by the Financial Industry Regulatory Authority (FINRA), the independent regulatory authority of the broker-dealer industry, [which is] subject to the oversight of the Securities and Exchange Commission (SEC)."

DOL’s “fact sheet” describing its fiduciary rule is posted on the Internet at:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/dol-final-rule-to-address-conflicts-of-interest

* The Fiduciary Rule requires retirement advisors to act as fiduciaries, putting their clients' retirement needs and interests before their own by acting in the best interest of the party whose assets they are managing. 

** In addition to Chamber of Commerce [its complaint is posted on the Internet at http://www.chamberlitigation.com/sites/default/files/cases/files/16161616/DOL%20Fiduciary%20Rule%20Complaint.pdf, two lawsuits also challenging the Fiduciary Rule have been filed, one in federal district court, Washington D.C. [The National Association for Fixed Annuities, et al, v. Thomas E. Perez et al. Case No. 16-cv-1035 RDM [the National Association of Fixed Annuities  complaint is posted on the Internet at: http://www.investmentnews.com/assets/docs/CI10555363.PDF] and the other by Market Synergy Group [Market Synergy Group v Perez, et al, USDC District of Kansas, Case 5:16-cv-04083]. The Market Synergly complaint is posted on the Internet at: https://www.bloomberglaw.com/public/desktop/document/Market_Synergy_Group_Inc_v_United_States_Department_of_Labor_et_a/1?1472484084]. 

*** Public Citizen, Inc. is a non-profit, consumer rights advocacy group. Founded by Ralph Nader in 1971, its website is at http://www.citizen.org/Page.aspx?pid=183.

Public Citizen’s amicus brief is posted on the Internet at:

http://www.citizen.org/documents/Chamber-of-Commerce-Perez-Amicus-Brief.PDF

  

Selected reports issued by the Office of the State Comptroller during the week ending August 28, 2016

Selected reports issued by the Office of the State Comptroller during the week ending August 28, 2016

Source: Office of the State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued:

[Internet links highlighted in color]

City University of New York - Administration of Fellowship Leaves

http://osc.state.ny.us/audits/allaudits/093016/15f5.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

Borough of Manhattan Community College - Controls over bank accounts

http://osc.state.ny.us/audits/allaudits/093016/15s93.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

New York StateInsurance Fund – Examination of outstanding premiums owed to the New York State Insurance Fund

http://osc.state.ny.us/audits/allaudits/bseaudits/bse20160819.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

Office of Information Technology Services - Effectiveness of the Information Technology Transformation

http://osc.state.ny.us/audits/allaudits/093016/15s2.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

State Education Department - Oversight of School Fire Safety Compliance

http://osc.state.ny.us/audits/allaudits/093016/15s86.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight; and the

State Education and Health Departments – Oversight of Student Immunization in Schools

http://www.osc.state.ny.us/audits/allaudits/093016/15s85.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

$2.95 Million Settlement With Hospital Group For Improperly Delaying Repayment of Medicaid Funds

Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the New York Field Office of the U.S. Department of Health and Human Services, Office of Inspector General, Eric Schneiderman, New York State Attorney General, and Thomas P. DiNapoli, the New York State Comptroller, announced a $2,950,000 settlement of a civil fraud lawsuit against Beth Israel Medical Center d/b/a Mount Sinai Beth Israel, St. Luke’s-Roosevelt Hospital Center d/b/a Mount Sinai St. Luke’s and Mount Sinai Roosevelt, and Continuum Health Partners, Inc. for willfully delaying repayment of over $ 800,000 in Medicaid overpayments. The settlement resolves claims under the federal False Claims Act and the New York State False Claims Act. The report is posted on the Internet at:

http://www.osc.state.ny.us/press/releases/aug16/082416a.htm?utm_source=weekly+news&utm_medium=email&utm_term=corruption&utm_content=20160828&utm_campaign=fiscal+oversight

State Contract and Payment Actions for July 2016 

State Comptroller Thomas P. DiNapoli announced his office approved 1,462 contracts valued at $1.72 billion and approved more than 1.7 million payments worth nearly $6.3 billion in July. His office also rejected 167 contracts and related transactions valued at $370 million and 1,183 payments valued at more than $5.1 million due to fraud, waste or other improprieties. The report is posted on the Internet at:

http://www.osc.state.ny.us/press/releases/aug16/082316.htm?utm_source=weekly+news&utm_medium=email&utm_term=state+operations&utm_content=20160828&utm_campaign=fiscal+oversight

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online athttp://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

Selected case summaries concerning public employee retirement benefit posted on the Internet by Justia

Selected case summaries concerning public employee retirement benefit posted on the Internet by Justia

Click on text highlighted in color to access full decision

New retirement options offered eligible retirees benefit actuarially equivalent in value to the previous pension 
Lenander v. Dep't of Retirement Sys.,Washington Supreme Court, Docket 92671-9

In 2000, the Department of Retirement Systems (DRS) created a new option for eligible retirees in which the retiree could opt for a pension that would allow a surviving spouse to continue to receive monthly pension benefits at the same amount after the retiree's death. To make this pension actuarially equivalent in value to the previous pension, the DRS provided for a greater reduction in the retiree's monthly benefits.

In 2010, the DRS adopted rules that modified the degree of the actuarial reduction. Appellant Tim Lenander challenged the changes to the reduction, arguing that the changes violated the statutory scheme and impaired his contract right to a lower reduction in his pension payment.

The Supreme Court found Lenander's arguments unavailing, holding that the DRS acted within its authority in amending the survivor benefit actuarial reduction regulations as set forth under former WACs 415-02-380 (2010) and 415-103-215 (2010).

In amending these regulations, the DRS did not violate the contract clause of article I, section 23 of the Washington Constitution. Consequently, the Court held that the DRS did not infringe on Lenander's right to an "actuarial equivalent" survivor benefit, and that Lenander did not suffer substantial impairment to his pension contract rights.

Excluding specified items from the calculation of retirement income to avoid inflating income to increase the employee’s retirement allowance 
Marin Ass'n of Pub. Employees v. Marin Cnty. Employees Retirement Ass'n., CaliforniaCourt of Appeals, Docket A139610

To combat the practice known as “pension spiking,” by which public employees use various stratagems to inflate their income and retirement benefits, the County Employees Retirement Law, was amended, effective 2013, to exclude specified items from the calculation of retirement income. The trial court concluded application of the new formula to current employees did not amount to an unconstitutional impairment of the employees’ contracts. The court of appeal affirmed, holding that the Legislature did not act impermissibly by amending Government Code section 31461.

While a public employee does have a “vested right” to a pension, that right is only to a “reasonable” pension; it is not an immutable entitlement to the most optimal formula of calculating the pension.

The Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension, as long as the modifications do not deprive the employee of a “reasonable” pension. The Legislature did not forbid the employer from providing the specified items to an employee as compensation, only the purely prospective inclusion of those items in the computation of the employee’s pension.

The ADA and Internet compliance

The ADA and Internet compliance

Source: United States Department of Justice

Although courts are still in the process of determining if the Americans with Disabilities Act [ADA] applies to material posted on the Internet, the United States Department of Justice (DOJ) has made it clear that it interprets the ADA as applicable to websites.

Many municipalities and school districts have taken the initiative and are making its website “user friendly” for individuals with disabilities and the World Wide Web Consortium, an international developer for open standards for the Web, advocates making websites usable by the disabled even if regulations are still in the drafting stage.

Websites should be accessible to disabled users through features permitting easier navigation and that interface with available assistive technologies such as not limiting access time for activities, oral communication to trigger program functions and appropriate controls for all operations.

It is expected that public entities will soon be required to make certain that its electronic publications are ADA compliant. Advocates for the disable believe that the sooner municipality and school district websites are accessible to the disabled the better.

The Department of Justice has posted information addressing such compliance with the ADA on the Internet at https://www.ada.gov/

Hearing officer considers failed efforts at “progressive discipline” in setting disciplinary penalty

Hearing officer considers failed efforts at “progressive discipline” in setting disciplinary penalty

OATH Index No. 1721/16

The New York City Human Resources Administration (HRA) served disciplinary charges against Carey Bryant, a clerical associate, alleging Bryant was guilty of being late to work excessively, several instances of discourtesy, threatening and disruptive conduct, and making a false statement in a supervisory conference.

OATH Administrative Law Judge ALJ Noel A. Garcia held that HRA proved that Bryant was late on 53 occasions, had engaged in discourteous conduct on three occasions, was disruptive during a training class, and made a false statement during a supervisory conference.

Judge Garcia, however, found that HRA failed to prove its allegations that Bryant had engaged in other instances of discourteous conduct. The ALJ explained that HRA did not provide any corroboration to support the statements it alleged Bryant had made nor did not specify Bryant’s words or actions it alleged were discourtesy or threatening.

The ALJ requested and received Bryant’s personnel history.* The record indicated Bryant had been served with disciplinary charges on a number of occasions resulting, respectively in [1] a 5-day suspension without pay for using obscene and abusive language directed towards a supervisor; [2] a 10-day suspension  without pay for using “obscene and abusive language, oral threats and discourteous conduct; [3] a 45-day suspension without pay for using abusive language, discourteous conduct, making oral threats, insubordination, and failing to comply with time and leave regulations; and, ultimately, [4] a 60-day suspension without pay for using obscene or abusive language, making oral threats, and discourteous conduct.

Judge Garcia found that Bryant had repeatedly engaged in discourteous, threatening and unprofessional conduct. Despite accepting longer and longer suspensions for such behavior, Bryant conduct did not improve. Further, said the ALJ, “Even when [Bryant] admitted at trial to making statements that undermined his superiors, or to making inappropriate comments regarding potential workplace violence, [Bryant] never took any responsibility for any of his actions, or expressed any regret.

According, due to Bryant’s poor disciplinary history and his continued unwillingness to follow agency rules or behave in a professional manner, Judge Garcia recommended Bryant’s termination from his position as the appropriate penalty for his misconduct.

* In Bigelow v Village of Gouverneur, 63 NY2d 470, the Court of Appeals said that such records could be used to determine the penalty to be imposed if [1] the individual is advised that his or her prior disciplinary record would be considered in setting the penalty to be imposed, and [2] the employee is given an opportunity to submit a written response to any material he or she deemed “adverse” contained in the record or an opportunity to offer “mitigating circumstances.”

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/16_cases/16-1721.pdf

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Determining “continuous residency” for the purpose of qualifying for public office or employment

Determining “continuous residency” for the purpose of qualifying for public office or employment
Glickman v Laffin, 2016 NY Slip Op 05842, Court of Appeals

Candidates seeking election to the New York State Senate must meet the five-year New York State residency requirement and the one-year Senate District residency requirement as set out in Article III, §7 of the New York State Constitution. In addition, such candidates must meet the provisions of Election Law §1-104 in which the term "residence" is defined as "that place where a person maintains a fixed, permanent and principal home and to which he [or she], wherever temporarily located, always intends to return.”*

The Court of Appeals said the primary issue presented by this appeal as whether Steven Glickman, a candidate for the office of State Senator, satisfies the State Constitution's five-year residency requirement that candidates for legislative office are required to satisfy.

In view of Glickman's 2014 registration to vote in Washington, D.C., the court said that his Washington, D.C. registration to vote in that jurisdiction “precludes him, as a matter of law, from establishing continuous residency in New York within the meaning of the Constitution” at this time.

The court explained that residency is typically a factual question and depends on the intent of the individual. As was held in Matter of Ferguson v McNab, 60 NY2d 598, the crucial element for electoral residency purposes “is that the individual must manifest an intent, coupled with physical presence ….” Further, said the court, “according to the record of the 1938 Constitutional Convention, the intent behind the residency requirement was to “ensur[e] that legislative representatives have contemporaneous familiarity and involvement with the issues facing the state and the community they represent.’”

The Court of Appeals the observed that although a person is permitted to have more than one residence, he or she is not permitted to have more than one electoral residence. As Washington, D.C. law provides, in part, that an individual “who attests that he or she ‘[h]as maintained a residence in the District for at least 30 days preceding the next election and does not claim voting residence or right to vote in any state or territory’” is a “qualified elector.’”

Accordingly, when Glickman registered to vote in Washington, D.C., he was required to attest that Washington, D.C. was his sole electoral residence and that he did not maintain voting residence in any other state. In the words of the Court of Appeals, “[t]hese factors clearly demonstrate that Glickman broke the chain of New York electoral residency which did not recommence until he registered to vote in New York in 2015.

Thus, concluded the Court of Appeals, Glickman cannot claim continuous New York residency for the past five years as required by the State Constitution.

* This definition demonstrates that the distinction between an individual’s “residence or residences” and that individual’s “domicile.” Frequently the term residence is used when domicile would be the accurate descriptive term. Although an individual may have, and maintain, a number of different residences simultaneously, he or she can have but one domicile at a given time, regardless of he or she actually is living at such domicile, until the individual designates another place as his or her domicile [see Matter of Newcomb, 192 NY 238 at 250 (1908)]. "It is the fixed and permanent home of the elector from which the Constitution, as well as the Election Law, contemplates that the elector shall register and vote." As the court indicated in Weiss v Teachout, 120 AD3d 701, as used in the Election Law, and presumably in the State Constitution, the term ‘residence' is being used to denote an individual's legal status that is more accurately described as his or her “domicile."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_05842.htm

Challenging the employer’s decision to terminate a probationary teacher

Challenging the employer’s decision to terminate a probationary teacher
Muller v New York City Dept. of Educ., 2016 NY Slip Op 05813, Appellate Division, Second Department

Andrea Muller was appointed by the New York City Department of Education [DOE] as an elementary school teacher subject to her satisfactory completion of a three-year probationary period commencing in August 2008.

During the 2010-2011 school year Muller received unsatisfactory ratings on several observation reports. At the end of the school year, she agreed to waive her rights to tenure and to continue as a probationary teacher for another year. At the end of the 2011-2012 school year Muller again agreed to waive her rights to tenure and to continue as a probationary teacher for another school year.

During the 2012-2013 school year, two of the Muller's three formal observations were rated unsatisfactory while one of her informal observations was rated unsatisfactory. Ultimately her performance was declared unsatisfactory for the school year. As a result, DOE did not give Muller [1] a certification of satisfactory completion of probation and [2] discontinued her probationary employment. DOE also recommended that Muller’s teaching license be terminated.

Muller then sought judicial review of DOE’s actions, contending that its determinations were illegal, arbitrary and capricious, were made in bad faith and were in violation of her constitutional, statutory, and contractual rights. In addition Muller alleged that she was “entitled to a hearing under Education Law §3020-a pursuant to the provisions of her union's collective bargaining agreement.”

DOE, on the other hand, asserted that the Muller had failed to file a grievance under the terms of the CBA to address her claim that she was entitled to a hearing under Education Law §3020-a, thereby failing to exhaust her administrative remedies under the CBA. DOE argued that this omission barred her from raising this contention in the Article 78 proceeding. Muller, in rebuttal, contended that DOE should be equitably estopped from raising the exhaustion of administrative remedies defense because it had misled her into believing that the only administrative process available to her for the review of DOE's action was an internal review procedure.

The Supreme Court denied Muller’s petition and dismissed the proceeding without a hearing. Muller appealed the Supreme Court’s decision.

The Appellate Division, in sustaining the Supreme Court’s ruling, said that “[i]t is a basic policy” that the responsibility for selecting probationary teachers and evaluating them for appointment on tenure [sic] should lie with the Board of Education upon appropriate recommendation of its professional administrators.”

Further, said the court, an educator "may be terminated during his or her probationary period for any reason, or no reason at all, and without a hearing, unless the teacher establishes that his or her employment was terminated for a constitutionally impermissible purpose, in violation of a statutory proscription, or in bad faith” and in such situations “[t]he petitioner bears the burden of establishing bad faith or illegal reasons by competent evidence."

Addressing Muller’s assertion that she was not given a chance to conduct discovery to acquire evidence to support her allegations with respect DOE’s alleged acts of unlawful discrimination, the Appellate Division said this claim was without merit as Muller did not move for leave to conduct discovery.

As to Muller’s theory that DOE should be equitably estopped from asserting that she did not exhaust her administrative remedies, the Appellate Division explained that estoppel is generally not available against a municipal defendant with respect to the exercise of its governmental functions or its correction of an administrative error.

Although the court noted that exceptions to this general rule were triggered where "wrongful or negligent conduct" of a governmental entity, or its "misleading nonfeasance … induces a party relying thereon to change his [or her] position to his [or her] detriment" resulting in "manifest injustice" was involved, the Appellate Division said that Muller failed to establish that DOE engaged in wrongful or negligent conduct or misleading nonfeasance that resulted in manifest injustice to her such that the doctrine of equitable estoppel should be invoked against it.

The Appellate Division concluded that the evidence in the record that Muller received unsatisfactory ratings on several observation reports supported both DOE’s decision to terminated Muller’s probationary employment and its recommendation that her license to teach be terminated and that such decisions were made in good faith, were rationally based and were not arbitrary and capricious.

Finally, the Appellate Division ruled that Supreme Court properly determined that Muller was not entitled to a hearing under Education Law §3020-a pursuant to the terms of the CBA because she failed to avail herself of the grievance procedure set forth in the CBA. The court observed that the CBA provides that “[A]n aggrieved union member whose employment is subject to the terms of a collective bargaining agreement entered into by his [or her] union and employer must first avail himself [or herself] of the grievance procedure set forth in the agreement before he [or she] can commence an action in court."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_05813.htm