Evaluating the inclusion of "longevity allowance payments" in computing an employee's final average salary for retirement benefit purposes

Evaluating the inclusion of "longevity allowance payments" in computing an employee's final average salary for retirement benefit purposes

Bohlen v DiNapoli,2018 NY Slip Op 05720, Appellate Division, Third Department

In this action Petitioners ask the court to review the Comptroller determination excluding certain compensation from the final average salary in calculating the retirement benefits of 11 long-term, executive level key employees [Petitioners] of the Port Authority of New York and New Jersey [Authority], all members of New York State and Local Employees' Retirement System [System].

After the September 11, 2001 terrorist attack on the World Trade Center that resulted in the destruction of its headquarters, the loss of virtually all of its records and the death of over 70 of its employees, the Authority elected to participate in a temporary retirement incentive program that was passed by the Legislature for employees who were members of the System but advised Petitioners, who were all eligible to retire at that time without penalty, that they would be exempted from the program. Instead, the Authority offered each of them, in addition to their regular salary, a "parity" benefit described as a longevity allowance payment that was based on a percentage of their salary to be paid biweekly, provided that they continued their employment beyond December 31, 2002.

Petitioners each signed memorandum agreements accepting the offer and the Port Authority began making longevity allowance payments to them under what it called an "Employee Retention Program."

In 2012 the System concluded that the longevity allowance payments were not includable  in determining the final average salaries of certain then retiring Petitioners because they were paid "in anticipation of eventual retirement." The System also reevaluated the retirement benefits that were being paid to other of these Petitioners who had earlier retired and came to the same conclusion.

Petitioners challenged the determinations of the Retirement System and requested a hearing. The Hearing Officer found that the System acted reasonably in excluding the longevity allowance payments in computing Petitioners' final average salaries, consistent with the provisions of Retirement and Social Security Law §431. The Comptroller accepted the Hearing Officer's findings and Petitioners initiated a CPLR Article 78 proceeding challenging the Comptroller's decision contending that the longevity allowance payments should have been included in the calculation of their final average salaries.

The Appellate Division agreed with the Petitioners, indicating that:

1. There is no dispute that the 2002 enabling legislation establishing the retirement incentive authorized participating employers to determine which titles would be eligible;

2. The Authority was authorized to determine that Petitioners — all recognized as key employees eligible to retire — would be ineligible for the program;

3. The Authority entered into a memorandum agreement with each Petitioner that provided for a "longevity allowance in consideration of [petitioners] not retiring" (emphasis by the court); and 

4. The "consideration" factor is significant for the Authority was entitled to exclude Petitioners from the retirement incentive without providing any consideration, regardless of whether Petitioners intended to retire at that time.

The memorandum agreement, noted the Appellate Division, indicated that the longevity allowance would make Petitioners' pension calculation "roughly equivalent" to what it would have been under the retirement incentive, provided that they remained employed for three years beyond December 31, 2002. Significantly, said the court, "the additional payments were made on a biweekly basis in the same way as regular salary for services as they were performed."

These payments, in the view of the Appellate Division, "are more appropriately characterized as payments genuinely made to delay [P]etitioners' retirements, not to artificially inflate their final average salary in anticipation of retirement" as they were provided for the primary purposes of [a] retaining key employees following the September 11, 2001 terrorist attack and [b] to adequately compensate Petitioners for their dedication and commitment to remain in their vital positions.

Further, observed the court, there was "neither a lump-sum payment on the eve of retirement nor a disproportionate salary increase designed to artificially inflate a pension benefit that would be properly excluded from the computation of the final average salary."

Although both the System and the Hearing Officer, whose recommendation the Comptroller adopted, characterized the payments as having been made "in anticipation of eventual retirement" (emphasis provided in the decision) the Appellate Division noted that the term "eventual" is not part of the statutory standard and use of the term eventual actually reflects the Comptroller's own recognition that there was no actual retirement date anticipated in the memorandum agreement.

Justice Lynch, in an opinion in which Justices Devine and Pritzker concurred, held that the Comptroller's determination to uphold the System's exclusion of these payments from the computation of Petitioners' pension benefits was not supported by substantial evidence and that the final average salaries of the Petitioners for the purpose of determining their retirement benefits should be recalculated.  Justice Clark wrote a dissenting opinion in which Presiding Justice McCarthy concurred.

These decisions are posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_05720.htm

Determining the economic damage suffered by a victim of unlawful discrimination

Determining the economic damage suffered by a victim of unlawful discrimination
Rensselaer County Sheriff's Dept. v New York State Div. of Human Rights, 2018 NY Slip Op 05719, Appellate Division, Third Department

The Appellate Division reviewed a determination of the Commissioner of Human Rights' award of damages to compensate Lora Abbott Seabury for the pension benefits that she lost due to the Rensselaer County Sheriff's Department [Respondent] discriminatory actions.*

Lora Abbott Seabury, a former correction officer employed by Respondent filed a complaint with State Division of Human Rights [SDHR] alleging that she had been subjected to, among other things, sexual harassment by male coworkers. After holding a hearing, a SDHR Administrative Law Judge [ALJ] found that Seabury proved that she had been sexually harassed by her male coworkers and recommended that Petitioner be ordered to pay Seabury nearly $450,000 in economic damages and $300,000 in noneconomic damages. The ALJ also recommended that Seabury "should be made whole with regard to her pension."

The Commissioner of Human Rights adjusted the amount of economic damages to approximately $315,000, but otherwise adopted the ALJ's recommendations and, in addition, included an order directing Seabury "to involve" the Office of the State Comptroller and the New York State and Local Retirement System, "presumably [said the court] to have them provide an actual pension to Seabury based on 25 years of service."

The Appellate Division confirmed the determination that Seabury had been subjected to sexual harassment and then remitted the matter to SDHR for the limited purpose of determining the amount of damages that Seabury sustained due to diminishment of her pension benefits, specifically noting that, for the purposes of such a calculation, [1] Seabury's testimony that she planned to work for 25 years was credited, [2] Seabury provided the relevant portions of her collective bargaining agreement and [3] Seabury provided evidence of her wages for the final three full years of her employment, which allows for the computation of her final average salary.**

On remittal, SDHR requested that Petitioner submit documentation demonstrating the monetary award necessary to compensate Seabury for diminution of her pension.

Contending that Seabury was not entitled to any such damages based on the possibility that she would receive disability benefits in an amount greater than the pension that she would have been eligible to receive upon completing 25 years of service, Petitioner submitted a written report from an economist who estimated the total pension benefits that Seabury would have received based on her years of actual service and after 25 years of service. Seabury submitted documentation in rebuttal to Petitioner's submissions, including a written report from an economist who also estimated Seabury's lost pension benefits.

Ultimately the Commissioner ordered Petitioner to pay Seabury $809,507.97 to compensate her for the reduction in her pension that resulted from Petitioner's discriminatory actions.

Petitioner appealed the Commissioner's determination contending that SDHR's calculation of the damages award was both procedurally improper and incorrect while Seabury contended that the damages awarded by the Commissioner did not fully compensate her for the reduction in her pension.

Seabury then requested that Supreme Court either dismiss the petition or transfer the proceeding to the Appellate Division, whereupon Supreme Court transferred the matter to the Appellate Division, resulting in this proceeding.

Explaining that it had remitted explicitly for the limited purpose of requiring SDHR to determine such damages because it had never made an initial determination of such damages, the Appellate Division rejected the Petitioner's claim that SDHR violated the applicable rules of procedure when it afforded both parties the opportunity to make additional submissions on remittal because SDHR was authorized to reopen the record of the proceeding.

The Appellate Division also rejected Petitioner's contention that SDHR erred by failing to reduce the damages awarded for loss of pension benefits to present value. The Court said that although the question of whether the Human Rights Law requires that awards for future damages be discounted to present value is an issue of first impression in the appellate courts of New York, citing Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21, it noted that the Court of Appeals had observed that federal case law is instructive in the employment discrimination context.

Acknowledging that the award for Seabury's lost pension benefits can only be a "rough approximation" of the amount necessary to restore her to the position that she would have occupied had she not been the victim of sexual harassment because neither her lost income stream nor the effect of future price inflation can be predicted with complete confidence, the Appellate Division opined that "One permissible method for approximating damages that arises from a loss of future income - known as the "total offset" method - is to neither consider future salary increases nor discount the damages to present value based on the presumption that future salary increases are offset by the discount rate used to calculate the present value of a damages award."

Thus, said the court, SDHR did not err by adopting the total offset method to determine the value of Seabury's lost pension benefits and confirmed its determination.

* See Executive Law §298.

** Matter of Rensselaer County Sheriff's Dept. v New York State Div. of Human Rights, 131 AD3d 777.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_05719.htm

Employer's termination of a biologically male employee transitioning from male to female held unlawful discrimination on the basis of sex

Employer's termination of a biologically male employee transitioning from male to female held unlawful discrimination on the basis of sex

EEOC v R.G. and G.R. Harris Funeral Home., USCA, 6th Circuit, No. 16-2424

Plaintiff, born biologically male, while living and presenting as a man, worked as a funeral director at R.G. & G.R. Harris Funeral Homes, Inc. [Funeral Home], a closely held for-profit corporation.

In an unlawful discrimination complaint filed with the Equal Employment Opportunity Commission [EEOC] Plaintiff alleged that the Funeral Home terminated her* after she had advised the Funeral Home that she intended to transition from male to female and would commence presenting herself and dress as a woman while at work.

In the course of EEOC investigation of Plaintiff's complaint it found that the Funeral Home provided its male public-facing employees with clothing that complied with the company’s dress code while female public-facing employees received no such allowance.

The EEOC subsequently brought suit against the Funeral Home in which the EEOC charged the Funeral Home with violating Title VII of the Civil Rights Act of 1964 [Title VI] by (1) terminating Plaintiff's employment on the basis of her transgender or transitioning status and her refusal to conform to sex-based stereotypes; and (2) administering a discriminatory-clothing-allowance policy.

In its motion for summary judgment, EEOC argued that it was entitled to judgment as a matter of law on both of its claims.

The Funeral Home, in contrast, contended that it had not violate Title VII by requiring Plaintiff to comply with a sex-specific dress code that it asserts equally burdens male and female employees, and, in the alternative, that Title VII should not be enforced against the Funeral Home because requiring the Funeral Home owners to employ Plaintiff while she dresses and represents herself as a woman would constitute an unjustified substantial burden upon the Funeral Home’s owner's sincerely held religious beliefs in violation of the Religious Freedom Restoration Act [RFRA].

The federal district granted summary judgment in favor of the Funeral Home on both claims.

The Circuit Court of Appeals reversed, holding that:

[1] the Funeral Home engaged in unlawful discrimination against Plaintiff on the basis of her sex; and 

[2] the Funeral Home has not established that applying Title VII’s proscriptions against sex discrimination to the Funeral Home would substantially burden its owner's exercise of their religious beliefs and, therefore, the Funeral Home was not entitled to a defense under RFRA.

Further, said the Circuit court, (a) even if the Funeral Home's owner's religious exercise were substantially burdened, the EEOC established that enforcing Title VII is the least restrictive means of furthering the government’s compelling interest in eradicating workplace discrimination against Plaintiff and (b) that the EEOC may bring a discriminatory-clothing-allowance claim in this case because such an investigation into the Funeral Home’s clothing-allowance policy was reasonably expected to grow out of the original charge of sex discrimination that Plaintiff submitted to the EEOC.

The Circuit Court issued a judgment to the EEOC on its unlawful-termination claim, and remanded the case to the district court "for further proceedings consistent with this opinion."

* The Circuit Court used female pronouns in its decision in accordance with the preference Plaintiff expressed through her briefing to this court.

The decision is posted on the Internet at:

https://cases.justia.com/federal/appellate-courts/ca6/16-2424/16-2424-2018-03-07.pdf?ts=1520443817

An individual's General Municipal Law §207-c benefits may be discontinued where the decision to do so is supported by substantial evidence

An individual's General Municipal Law §207-c benefits may be discontinued where the decision to do so is supported by substantial evidence

Matter of Cordway v Cayuga County, 2018 NY Slip Op 04873, Appellate Division, Fourth Department

Petitioner, a deputy sheriff, commenced a CPLR article 78 proceeding challenging the determination that terminated the disability benefits the deputy sheriff had been receiving pursuant to General Municipal Law §207-c. The Hearing Officer issued a report recommending that Petitioner's continued receipt of benefits be terminated. Contrary to Petitioner's contention, the Appellate Division found "no basis to disturb the Hearing Officer's determination terminating the benefits."

Although Petitioner presented evidence supporting his contention that his injuries and ailments were causally related to the work-related, the Hearing Officer was entitled to weigh the parties' conflicting medical evidence and to assess the credibility of the witnesses. Where the evidence is conflicting and there is room for a choice, a court may not weigh the evidence or reject the Hearing Officer's decision where his or her determination is supported by substantial evidence

Citing Matter of Park v Kapica, 8 NY3d 302, the court opined that an employer's "initial award of Section 207-c benefits does not require the continuation of such benefits inasmuch as "[t]he continued receipt of Section 207-c disability payments is not absolute."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04873.htm

Audits and reports were issued by New York State Comptroller Thomas P. DiNapoli

Audits and reports were issued by New York State Comptroller Thomas P. DiNapoli during the week ending August 10, 2018

Source: Office of the State Comptroller

Click on text highlighted in color to access the full report

On August 9, 2018 the New York State Comptroller, Thomas P. DiNapoli, announced the following audits and examinations had been issued.

Department of Health (DOH): Medicaid Claims Processing Activity April 1, 2017 through Sept. 30, 2017 (2017-S-23)
Auditors identified approximately $10.2 million in improper Medicaid payments, including: $3.7 million in overpayments for claims that were billed with incorrect information pertaining to other health insurance coverage that recipients had; $3.1 million in overpayments for claims involving Medicare coverage that were incorrectly processed; and $1.3 million in overpayments for improper newborn birth claims. About $4.5 million of the overpayments were recovered by the end of audit fieldwork. Auditors also identified providers in the Medicaid program who were charged with or found guilty of crimes that violated health care programs’ laws or regulations. DOH terminated 42 of 51 providers identified.
       
Department of Health (DOH): Examination of Travel Expenses (2015-BSE1-04B)
In an earlier report, auditors found DOH improperly designated an employee’s official station in calendar years 2013 and 2014, costing the state more than $38,000 in unnecessary travel expenses. After further examination, auditors found DOH paid $22,651.32, $26,556.12 and $6,007.79 in travel expenses for calendar years 2015, 2016 and 2017, respectively, for the employee to commute between his residence and his main work location. DOH could have avoided these costs if officials had properly designated the employee’s main work location as his official station.

Workers' Compensation Board: Annual Audit
The board processed claims totaling nearly $720 million for four sole custody funds in 2017 – the Uninsured Employers Fund, the Special Fund for Disability Benefits, the Second Injury Fund and the Fund for Reopened Cases.  Board staff enter claims data for all special funds claims into the Board’s automated payment system, where the claims are subjected to various system edits and validation checks, approved by the Board and submitted to the Comptroller’s Office for approval prior to payment. Auditors halted inappropriate claims totaling nearly $520,000 that the board approved. 

Brewster-Southeast Joint Fire District – Recordkeeping and Procurement (Putnam County)
The treasurer’s accounting records were not accurate as of Dec. 31, 2017. Cash accounts were incorrectly recorded, the operating bank account balance was understated by more than $377,000 and the capital reserve balance was overstated by $200,790. Also, district officials did not always solicit competition when procuring professional services.

Village of Deposit – Disbursements and Real Property Tax Enforcement (Delaware County)
The board did not ensure all disbursements were approved before payment or for proper purposes. In addition, auditors found the village began to effectively enforce the collection of delinquent real property taxes in March 2016, but $172,900 remains outstanding as of Feb. 28, 2018.

Multiple Dwelling Property Inspections (2018MS-01)
Auditors found all six local governments that were reviewed had properties that had never been inspected. Overall, 59 percent of the preventative maintenance inspections and 52 percent of the fire safety inspections were not performed. The cities of White Plains, Schenectady and Lackawanna had limited or non-existent multiple dwelling inspection programs and the city of Utica did not have a feasible program. Although the town of Greece and the village of Hempstead have developed more effective inspection programs, their programs also have opportunities for improvement.

Orleans County Soil and Water Conservation District – Claims Audit (2018M-105)
Auditors examined 72 claims totaling approximately $524,000 paid during the audit period and determined that all of the claims were for appropriate district purposes and adequately supported. The board, however, has not adopted a cash disbursement policy.

City of Yonkers - Fiscal Agent Act Compliance (Westchester County)
The city’s 2018-19 budget relies on nonrecurring revenue of $59.2 million to balance its budget. Police overtime costs could potentially be over budget by as much as $2.5 million and firefighting overtime costs could be over budget by as much as $949,000. The city plans to borrow up to $15 million for tax certiorari settlements and to issue debt of up to $9.8 million for water fund improvements.

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

 

Layoff of seasonal employees constituted a termination of employment for the purposes of Public Authorities Law §2629(2)(a)

Layoff of seasonal employees constituted a termination of employment for the purposes of Public Authorities Law §2629(2)(a)

Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO v Olympic Regional Dev. Auth., 2018 NY Slip Op 04998, Appellate Division, Third Department

The Civil Service Employees Association [CSEA] challenged the Olympic Regional Development Authority [ORDA] determination that certain its employees who had been laid off were no longer members of their previous collective bargaining unit upon their reinstatement. Supreme Court granted CSEA's application, in a combined proceeding pursuant to CPLR Article 78 and action for declaratory judgment, annulling ORDA's action. Supreme Court found that CSEA was "entitled to a declaration that the layoff of seasonal employees [did] not constitute a termination or cessation of their employment resulting in a vacancy for purposes of Public Authorities Law §2629(2)(a)" and granted CSEA's petition, annulling ORDA's determination. ORDA appealed the Supreme Court's decision.

In 2012, the management of the Belleayre Mountain Ski Center was transferred from the Department of Environmental Conservation [DEC] to ORDA, a public benefit corporation.* Pursuant to Public Authorities Law §2629(2)(a), employees then working at Belleayre Mountain, who had been DEC employees and members of CSEA's Operating Services Collective Bargaining Unit [OSU], became employees of ORDA.

In March 2016, ORDA laid off three seasonal employees at Belleayre Mountain who were in OSU. Upon rehiring these employees some two months later to the same positions each had previously held, ORDA determined that each would be placed in ORDA's collective bargaining unit rather than OSU. This resulted in the three seasonal employees experiencing a "significant adverse changes to their benefits" and CSEA brought this action against ORDA contending that ORDA's action was arbitrary and capricious and in violation of §2629(2)(a).

The Appellate Division noted that, as pertinent here, Public Authorities Law §2629(2)(a):

1. Provides that employees affected by the transfer "shall retain their respective civil service classifications, status, salary, wages and negotiating unit, if any...."; and

2.  §2629(2)(a) further provided that "once the employment of any transferred employee ... is terminated or otherwise ceases, by any means, any individual hired to fill such vacancy shall not be placed in the same negotiating unit of the former incumbent but rather shall be placed in [ORDA's] negotiating unit."

ORDA contend that §2629(2)(a) the unambiguous results in the employment of a seasonal employee "terminate[s] or otherwise ceases" when he or she is laid off. Accordingly, ORDA argued, "such an employee may not return to his or her former negotiating unit in the event that he or she is subsequently rehired."

Noting that ORDA's determination was made without a hearing, the Appellate Division said that its review is limited to determining whether ORDA decision was "'arbitrary and capricious, irrational, affected by an error of law or an abuse of discretion." Further, said the court, "We accord no deference to ORDA's statutory interpretation," as the questions raised on appeal depend only upon the "accurate apprehension of legislative intent."

This appeal, said the Appellate Division turns on the meaning of the terms "terminated" and "ceases" within the context of §2629(2)(a) and as neither word is defined in the Public Authorities Law and both are words "of ordinary import," the court said it would interpret them in a manner consistent with "their usual and commonly understood meaning." In the words of the Appellate Division, "terminate" is defined as "to bring to an end," "to discontinue the employment of" or "to form the conclusion of," citing the "Merriam-Webster Online Dictionary."

Rejecting CSEA's contention that a layoff is inconsistent with these definitions and merely constitutes a temporary interruption in a career, the Appellate Division explained that "in light of the express statutory provision that an employee whose employment 'is terminated or otherwise ceases, by any mean'" may not return to his or her prior collective bargaining unit upon subsequent rehire" and interpreting §2629(2)(a) as urged by CSEA "would render the phrase 'by any means' superfluous."

The court also rejected CSEA claim that §2629(2)(a) applies only to new employees, opining that the statute states that it is applicable to "any individual" and makes no distinction between employees who are new hires and employees who may have previously worked at Belleayre Mountain.

On one last point, CSEA's contention that the court should adopt its interpretation of §2629 on the basis that it is a remedial statute, the Appellate Division said that "[E]ven a remedial statute must be given a meaning consistent with the words chosen by the Legislature," and courts must "give effect not only to the remedy, but also to the words that delimit the remedy," commenting that CSEA's "interpretation of §2629 could result in the unintended adverse effect of discouraging the rehiring of seasonal employees after layoffs."

Finding that the plain language of §2629(2)(a) barred ORDA from permitting seasonal employees who were laid off and subsequently rehired to remain in OSU, the Appellate Division ruled that CSEA's "petition/complaint should have been dismissed."

* §45 of the Civil Service Law addresses the status of the employees of a private institution or enterprise upon its acquisition by governmental entity for the purpose of operating the private institution or enterprise as a public function.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04998.htm

Delegating the authority to make a final disciplinary decision and the determination of the penalty to be imposed to another

Delegating the authority to make a final disciplinary decision and the determination of the penalty to be imposed to another

Matter of Stukes v City of White Plains, 2018 NY Slip Op 05474, Appellate Division, Second Department

The Executive Director of the Commission [Director] initiated disciplinary charges against his subordinate, an Assistant Director [Assistant] alleging that Assistant had violated policies prohibiting workplace violence following the Assistant's having had an altercation with Director at the workplace. After a hearing before a hearing officer, the hearing officer found Assistant guilty of  "13 of the factual specifications alleged in the charges" served on Assistant and recommended termination of Assistant from his employment with the Commission.

Director disqualified himself from reviewing the hearing officer's recommendations and making a final determination in consideration of the fact that he had preferred the charges against Assistant and designated the Chair of the Commission [Chair] to act in his stead. The Chair adopted the findings of the hearing officer and imposed the recommended penalty of termination of Assistant's employment.

Subsequently Assistant initiated a CPLR Article 78 proceeding seeking to annul the Chair's determination, contending that Chair "was not a duly qualified individual to whom [Director] could properly delegate the power to review the hearing officer's recommendations and make a final determination." Supreme Court found the delegation of the authority to make the challenged decisions  from Director to Chair to be proper, granted the City of White Plain's motion to dismiss Assistant's petition and dismissed the proceeding. Assistant appealed.

The Appellate Division commenced its review of Assistant's appeal by observing that "Civil Service Law §75(2) provides that where, as here, an officer having the power to remove an employee who is the subject of disciplinary proceedings designates someone else to conduct a hearing, the matter shall be referred back to that officer or body for review and decision."

However, said the Appellate Division, although as a general rule the authority to make the final determination as to the charged employee's status may not be delegated, "courts have recognized that the statutory command must yield to an employee's right to a fair and impartial hearing when such an official is personally involved in the proceedings by preferring the charges at issue and testifying at the hearing, or otherwise involving himself or herself extensively in the proceedings."

In the words of the court, "In such circumstances, such an official acts improperly when he or she also renders the final determination." Citing Matter of McComb v Reasoner, 29 AD3d 795, the Appellate Division noted that the Court of Appeals has interpreted Civil Service Law §72(2)  to "require[ ] that the power to discipline be delegated, if necessary, within the governmental department's chain of command" and that the Court of Appeals has further interpreted Civil Service Law §72(2) to:

1. require that the power to discipline be delegated, if necessary, within the governmental department's chain of command (see Matter of Gomez v Stout, 13 NY3d 182); and

2. whether a particular delegation will fall within the affected department's chain of command, and, hence, is permissible appears to turn upon whether the body or official to whom review power is delegated possesses either supervisory authority over the employee at issue or administrative responsibility over the affected department and its personnel" (see Matter of Zlotnick v City of Saratoga Springs, 122 AD3d 1210).

Giving Assistant "the benefit of every favorable inference," the Appellate Division concluded that Supreme Court's determination that the Chair's position with the Commission was within the affected department's chain of command and, thus, the delegation of authority from Director to the Chair was proper.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_05474.htm

Removing a school official for an alleged unauthorized disclosure of confidential information

Removing a school official for an alleged unauthorized disclosure of confidential information

Decisions of the Commissioner of Education, Decision of the Commissioner No. 17,422

This appeal to the Commissioner, among other issues, concerned allegations that confidential information was disclosed and that the alleged wrongdoers should be removed from office.

With respect to the application to the Commissioner seeking the removal of a board member from the School Board "for impermissibly disclosing confidential notes," the Commissioner observed that a member of the board of education or a school officer may be removed from office pursuant to Education Law §306 when it is proven to the satisfaction of the Commissioner that the board member or school officer has engaged in a willful violation or neglect of duty under the Education Law or has willfully disobeyed a decision, order, rule or regulation of the Board of Regents or Commissioner of Education.

Further, explained the Commissioner, "[t]o be considered willful, the board member’s actions must have been intentional and with a wrongful purpose" and   in an appeal or removal application to the Commissioner, the petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which petitioner seeks relief.

School board members, as public officers, take an oath of office to uphold the law and faithfully discharge their duties and, among other things, are responsible for educational standards, budget matters, management issues, and health and safety. In carrying out their duties, school board members individually "have a fiduciary obligation to act constructively to achieve the best possible governance of the school district.

The Commissioner said that General Municipal Law §805-a(1)(b) specifically provides that no municipal officer or employee, including a school board member, shall “disclose confidential information acquired by him [or her] in the course of his [or her] official duties or use such information to further his [or her] personal interests” and within the public school system, the term “confidential,” means “[i]nformation that is meant to be kept secret.”

As to defining the meaning of the word "confidential," it is the "sole province of the Commissioner of Education to define the meaning of the word 'confidential' within the public school system and ensure its uniform application in this context."* Further, said the Commissioner, "[i]t is well-settled that a board member’s disclosure of confidential information which violates General Municipal Law §805-a(1)(b) may constitute grounds for a board member’s removal from office pursuant to Education Law §306.

Jessica Lovinsky and Phee Simpson [Petitioners] in this appeal claim that a board member disclosed “unredacted” notes to a newspaper reporter and buttress their claim with an email from the reporter to counsel for Simpson in which the reporter states that she is “writing an article on the Poughkeepsie district’s graduation investigation and subsequent appeal,” and that, in the article, she planned to “cit[e] records that relate[d] to Phee Simpson. The email also purported to include three attachments that Petitioners have attached, contending that they are copies of these three attachments.

The School District's answer to Petitioners' appeal to the Commissioner denied Petitioners' contentions. 

The Commissioner ruled that Petitioners failed to meet their burden of proving that the School Board, as a body, or any individual school board member was responsible for disclosing the documents in question to the reporter or to anyone else. 

The Commissioner explained that the first element of a claimed disclosure of confidential information is disclosure, and a petitioner must prove that the alleged actor or actors did, in fact, disclosed allegedly confidential information. Here, however, said the Commissioner,  "Petitioners have wholly failed to meet this showing, providing no facts or assertions suggesting that any respondent provided the [newspaper reporter] with the allegedly confidential information."

Accordingly, the Commissioner dismissed Petitioners' application seeking the removal of the board member.

* N.B. In 2005 State Education Department Counsel and Deputy Commissioner for Legal Affairs notified school officials, including school board members, and school attorneys of the Commissioner's decision in Application of Nett and Raby (45 Ed Dept Rep 259, Decision No. 15,315)] that the Commissioner’s views with respect to the term "confidential" differed from the interpretation of the term “confidential” offered by New York State’s Committee on Open Government.

The Commissioner's decision is posted on the Internet at:

 http://www.counsel.nysed.gov/Decisions/volume57/d17422

The doctrine of collateral estoppel bars the relitigation of a legal or factual issue that was previously decided

The doctrine of collateral estoppel bars the relitigation of a legal or factual issue that was previously decided

Washington v NYC Department of Education, USCA, 2nd Circuit, 17-3776-cv

In Grieve v Tamerin, 269 F.3d 149, the Circuit Court of Appeals said that the doctrine of collateral estoppel, also termed issue preclusion, bars re-litigation of a legal or factual issue that was previously decided where:

(1) the issues in both proceedings are identical,

(2) the issue in the prior proceeding was actually litigated and actually decided,

 (3) there was [a] full and fair opportunity to litigate in the prior proceeding, and

(4) the issue previously litigated was necessary to support a valid and final judgment on the merits.”

Further, the opinion continues, “New York courts will give administrative determinations preclusive effect if made in a quasijudicial capacity and with a full and fair opportunity to litigate the issue,” citing Burkybile v. Bd. of Educ. of Hastings-On-Hudson Union Free Sch. Dist., 411 F.3d 306.

In this action Janet Washington [Plaintiff] asserted that §3020-a hearings do not result in the sort of final judgment that can give rise to collateral estoppel in federal court. The Circuit Court of Appeals disagreed, explaining that "it is well-settled that a “[S]ection 3020-a hearing is an administrative adjudication that must be given preclusive effect” when the elements of collateral estoppel are satisfied."

The Circuit Court ruled that Plaintiff's §3020-a hearing satisfies the elements of collateral estoppel and has preclusive effect as the issue of alleged unlawful discrimination was actually litigated and decided, and the arguments raised in the §3020-a hearing were identical to those briefed for the discrimination claim on appeal. Further, said the court,  Plaintiff acknowledges that the hearing officer "ruled decisively and specifically on whether [Plaintiff] suffered disability discrimination after considering the arguments from each side," concluding that Plaintiff's “evidence of actual animus is weak” and that “just cause exists for the termination of [Plaintiff’s] employment”.

In the words of the court, "[t]he Section 3020-a hearing also afforded a full and fair opportunity to litigate the issue of discrimination. Plaintiff was permitted to request the production of material, call and cross-examine witnesses, and present relevant evidence...." The court acknowledged that Plaintiff had challenged certain of the arbitrator’s evidentiary decisions, but opined that "the proceeding is not rendered unfair or incomplete because some evidentiary rulings were unfavorable. "

Holding that the district court correctly concluded that the Plaintiff’s discrimination claims were collaterally estopped by the factual findings of her §3020-a hearing, the Circuit Court affirmed the lower court's ruling.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/112119e1-395f-4de2-89fe-3ac841261b89/1/doc/17-3776_so%20(2).pdf#page=3&zoom=auto,-146,394

Executive Order of the Governor protecting the personal privacy of public sector workers

Executive Order of the Governor protecting the personal privacy of public sector workers

Executive Order No. 183  [8 EO 183]

WHEREAS, the labor movement was born in New York State more than a century ago, when, in the wake of the Triangle Shirtwaist Factory fire New York became the first state to enact laws protecting workers; and

WHEREAS, the labor movement continues to thrive in New York, which today boasts the highest rate of union membership in the country – more than double the national rate;

WHEREAS, as the voice of working people, labor built the middle class and advanced the great progressive achievements that we take for granted today – victories such as the Social Security Act, the Fair Labor Standards Act establishing the 40-hour work week, set ting a minimum wage and prohibiting child labor, the Equal Pay Act banning gender wage discrimination, and the Occupational Safety and Health Act; and

WHEREAS, across New York State and this country, workers’ personal information such as their home addresses and cell phone numbers, are being used to attack, harass, and intimidate them; and

WHEREAS, although today’s decision by the United States Supreme Court in Janus v AFSCME attempts to undermine worker safety and privacy, New York State will not subject public sector workers to the abuse of their personal information as part of a campaign to harass and intimidate workers for any reason, including engaging in union activities or looking to unionize.

NOW, THEREFORE, I, ANDREW M. CUOMO, Governor of the State of New York, by, virtue of the authority vested in me by the Constitution and laws of the State of New York, do hereby order as follows:

A. Definitions

‘‘State entity’’ shall mean (i) all agencies and department s over which the Governor has executive authority, and (ii) all public benefit corporations, public authorities, boards, and commissions, for which the Governor appoints the Chair, the Chief Executive, or the majority of Board members, except for the Port Authority of New York and New Jersey.

B. Responsibilities of State Entities

No State entity, including any of its officers or employees, shall disclose: (a) the home address(es), personal telephone number(s), personal cell phone number(s), personal e-mail address(es) of a public employee, as the term ‘‘public employee’’ is defined in Article 14 of the Civil Service Law, except (i) to an employee organization that, in accordance with Article 14 of the Civil Service Law, is the certified or recognized bargaining representative of a unit of public employees; (ii) to a bona fide employee organization that, in accordance with Article 14 of the Civil Service Law, is legitimately seeking to be certified or recognized as bargaining representative of a unit of public employees solely for purposes of aiding such employee organization in obtaining certification or recognition; or (iii) to the extent compelled to do so by lawful service of process, subpoena, court order, or as otherwise required by law. 

This order shall not apply to work-related, publicly available information such as title, salary, and dates of employment.

(L.S.)

GIVEN under my hand and the Privy Seal of

the State in the City of Albany this twenty-

seventh day of June in the year two thousand

eighteen.

BY THE GOVERNOR

/S/ Andrew M. Cuomo

/s/ Melissa DeRosa

Secretary to the Governo

Executive Order of the Governor protecting the personal privacy of public sector workers

Executive Order of the Governor protecting the personal privacy of public sector workers

Executive Order No. 183  [8 EO 183]

WHEREAS, the labor movement was born in New York State more than a century ago, when, in the wake of the Triangle Shirtwaist Factory fire New York became the first state to enact laws protecting workers; and

WHEREAS, the labor movement continues to thrive in New York, which today boasts the highest rate of union membership in the country – more than double the national rate;

WHEREAS, as the voice of working people, labor built the middle class and advanced the great progressive achievements that we take for granted today – victories such as the Social Security Act, the Fair Labor Standards Act establishing the 40-hour work week, set ting a minimum wage and prohibiting child labor, the Equal Pay Act banning gender wage discrimination, and the Occupational Safety and Health Act; and

WHEREAS, across New York State and this country, workers’ personal information such as their home addresses and cell phone numbers, are being used to attack, harass, and intimidate them; and

WHEREAS, although today’s decision by the United States Supreme Court in Janus v AFSCME attempts to undermine worker safety and privacy, New York State will not subject public sector workers to the abuse of their personal information as part of a campaign to harass and intimidate workers for any reason, including engaging in union activities or looking to unionize.

NOW, THEREFORE, I, ANDREW M. CUOMO, Governor of the State of New York, by, virtue of the authority vested in me by the Constitution and laws of the State of New York, do hereby order as follows:

A. Definitions

‘‘State entity’’ shall mean (i) all agencies and department s over which the Governor has executive authority, and (ii) all public benefit corporations, public authorities, boards, and commissions, for which the Governor appoints the Chair, the Chief Executive, or the majority of Board members, except for the Port Authority of New York and New Jersey.

B. Responsibilities of State Entities

No State entity, including any of its officers or employees, shall disclose: (a) the home address(es), personal telephone number(s), personal cell phone number(s), personal e-mail address(es) of a public employee, as the term ‘‘public employee’’ is defined in Article 14 of the Civil Service Law, except (i) to an employee organization that, in accordance with Article 14 of the Civil Service Law, is the certified or recognized bargaining representative of a unit of public employees; (ii) to a bona fide employee organization that, in accordance with Article 14 of the Civil Service Law, is legitimately seeking to be certified or recognized as bargaining representative of a unit of public employees solely for purposes of aiding such employee organization in obtaining certification or recognition; or (iii) to the extent compelled to do so by lawful service of process, subpoena, court order, or as otherwise required by law. 

This order shall not apply to work-related, publicly available information such as title, salary, and dates of employment.

(L.S.)

GIVEN under my hand and the Privy Seal of

the State in the City of Albany this twenty-

seventh day of June in the year two thousand

eighteen.

BY THE GOVERNOR

/S/ Andrew M. Cuomo

/s/ Melissa DeRosa

Secretary to the Governo

Claims of absolute privilege and qualified privilege as a defense in lawsuits alleging defamation

Claims of absolute privilege and qualified privilege as a defense in lawsuits alleging defamation

Stega v New York Downtown Hosp., 2018 NY Slip Op 04687, Court of Appeals

Immunity as a defense in lawsuits alleging the plaintiff was defamed by the respondent are well established. In Liberman v Gelstein, 80 NY2d 429, the Court of Appeals noted that the public interest is served by shielding certain communications, though possibly defamatory, from litigation, rather than risk stifling them altogether. The court explained that free speech or the discharge of governmental responsibility "sometimes outweighs the individual's underlying right to a good reputation, the individual's right may have to yield to a privilege granted the speaker barring recovery of damages for the defamatory statements."

Absolute privilege entirely immunizes an individual from liability in a defamation action, regardless of the declarant's motives and is generally reserved for communications made by "individuals participating in a public function, such as judicial, legislative, or executive proceedings."

In contrast, a qualified or conditional privilege may protect a defendant being sued for defamation in situations where "it is fairly made by a person in the discharge of some public or private duty, legal or moral, or in the conduct of his own affairs, in a matter where his [or her] interest is concerned."

However, statements made with "spite or ill will" or reckless disregard of whether they were false or not are not protected by this form of conditional privilege if the plaintiff meets his or her burden of proof by showing malice on the part of the defendant in making the statement.

In the words of the Stega court, "Whether allegedly defamatory statements are subject to an absolute or a qualified privilege 'depend[s] on the occasion and the position or status of the speaker' [and] a complex assessment that must take into account the specific character of the proceeding in which the communication is made [and as a matter of policy] the courts confine absolute privilege to a very few situations."

Those limits were the subject of the primary dispute before the Court of Appeals in this action.

Supreme Court had granted the defendants' motion to dismiss certain aspects of plaintiff's complaint but had permitted the plaintiff's defamation claim against certain defendants to survive, reasoning that the statements at issue were not shielded by an absolute privilege, because the investigation in which they had been made "had none of the indicia of a quasi-judicial proceeding, and in particular lacked safeguards such as an adversarial procedure or a determination subject to review."

Supreme Court also commented that plaintiff was not a "participant[] in the investigation, which was not an adversarial process; nor could [she] challenge the statements made about [her]. That it was an official governmental investigation conducted by a regulatory agency does not by itself make it a quasi-judicial function."

As to whether the statements were instead subject to a qualified or conditional privilege, Supreme Court declared that issue "premature on a motion to dismiss."

Defendants appealed the Supreme Court's ruling. The Appellate Division reversed the lower court's determination but granted plaintiff's leave to appeal, "certifying the question whether its order was properly made."

The Court of Appeals observed that its decision in Rosenberg v Metlife, Inc. (8 NY3d 359, does not shield statements made in an administrative proceeding that allegedly defame a person who has no recourse to challenge the accusations. In the words of the court, "The absolute privilege against defamation applied to communications in certain administrative proceedings is not a license to destroy a person's character by means of false, defamatory statements."

The Appellate Division was reversed, with costs, the defendants' CPLR §3211 motion seeking to dismiss the claim as against them, denied, and the certified question "answered in the negative."

It appears that the matter will be remanded to Supreme Court to consider whether defendants' statements are protected by a "qualified or conditional privilege."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04687.htm