Corruption, fraud, or misconduct in procuring an arbitration award

Supreme Court denied a petition to confirm an arbitration award under color of CPLR §7511.  

§7511 of the CPLR provides, in pertinent part, that an "arbitration award shall be vacated if the court finds that the rights of the complaining party were prejudiced by corruption, fraud, or misconduct in procuring the award." Noting that "[a] party seeking to overturn an arbitration award bears a heavy burden and must establish a ground for vacatur by clear and convincing evidence," the Appellate Division affirmed the Supreme Court's decision.

Citing Goldfinger v Lisker, 68 NY2d at 232-233, the Appellate Division explained that there was "clear and convincing evidence" that the arbitrator committed misconduct and that such misconduct "prejudiced the [Responent's] rights or the integrity of the arbitration process."

Respondents had submitted an affirmation executed by the arbitrator in which the arbitrator "averred that almost a year after the end of the arbitration proceeding, he received information from the [Petitioner] and 'others speaking for' the [Petitioner]  concerning the work that was the subject of the arbitration," and "[b]ased on this information," the arbitrator decided to render the award at issue "without first providing the [R]espondents an opportunity to respond to the information."

In the words of the Appellate Division, "The arbitrator's admitted consideration of evidence received from one party, without providing the other party the opportunity to respond, along with evidence in the record of ex parte communications, established by clear and convincing evidence that the arbitrator committed prejudicial misconduct."

Click HEREto access the Appellate Division's decision posted on the Internet.

 

Defendant admits to stealing in excess of $51,000 of her deceased mother’s pension

New York State Comptroller Thomas P. DiNapoli and Orange County District Attorney David M. Hoovler announced that on Thursday, April 14, 2022, Valerie White, 58, of Middletown, pled guilty in Orange County Court to Grand Larceny in the Third Degree. Under the plea agreement announced on the record at the time of the guilty plea, White was ordered to pay restitution in the amount of $51,532.64, which is the total funds that White illegally stole from the state pension system.* 

White’s mother was a pensioner, vested in the New York State and Local Retirement System (NYSLRS). At the time that White’s mother retired in 2000, she elected to receive her pension benefits in full until her death. When White’s mother died in 2017, the death was not reported to NYSLRS and pension benefits continued to be made to an account that White jointly held with her mother. As a result, from 2017 until NYSLRS learned of the pensioner’s death in 2019, over $54,000 were unjustly deposited into the account. While NYSLRS was able to claw back approximately $2,500 of the amount stolen, the remaining was spent by White on personal expenses. At the time of her plea, White admitted to stealing the money and that she knew she did not have permission or authority to take the funds.

“Ms. White thought she could get away with defrauding the New York State and Local Retirement System of over $50,000, but she was wrong,” said New York State Comptroller Thomas P. DiNapoli. “Today’s guilty plea should be a warning sign to anyone attempting to steal state pension benefits that my office will find you and work with law enforcement to hold you accountable. I thank Orange County District Attorney Hoovler for his continued partnership and steadfast commitment to holding those who try to defraud the public accountable.”

District Attorney Hoovler thanked the New York State Comptroller’s Office and the New York State Police for their joint investigation of White that led to her arrest.

“The State pension system is the backbone of the hard-working public servants throughout the State,” said District Attorney Hoovler. “That this defendant would seek to manipulate the system for her own benefit is reprehensible. I am thankful for the dedicated investigation conducted by the Comptroller’s Office together with the New York State Police that ensured this defendant would be held accountable for her actions.”

The case is prosecuted by Assistant District Attorney Tanja Beemer. 

* A criminal charge is merely an allegation by the police that a defendant has committed a violation of the criminal law, and it is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the State of New York’s burden to prove guilt beyond a reasonable doubt.

New York State's Comptroller releases fiscal stress scores for certain New York State villages and cities

On April 13, 2022 New York State Comptroller Thomas P. DiNapoli announced that 10 villages and two cities have been designated as being in fiscal stress under his Fiscal Stress Monitoring System. DiNapoli evaluated all non-calendar year local governments and designated one city and two villages in “moderate fiscal stress” and eight villages and one city as “susceptible to fiscal stress.”

While no municipalities were in the highest category of “significant fiscal stress,” the Comptroller noted that 73 villages and cities have not filed their financial information, as required. These scores also largely reflect the period when local governments in New York received federal relief funds to assist them in recovering from the COVID-19 pandemic.

“The financial landscape for many local governments has improved with the infusion of federal aid and stronger economic activity,” DiNapoli said. “The relief funds are temporary, so it is critical that local communities make changes, including carefully managing debt and engaging in long-term planning, that help improve their financial outlook for years down the road.”

The latest round of fiscal scores evaluated local governments with fiscal years ending between Feb. 28 and July 31. DiNapoli’s office evaluated the fiscal health of 522 villages, which predominantly have a fiscal year ending on May 31, based on self-reported data for 2021. The scores also cover the 17 cities with non-calendar fiscal years, including the “Big 4” cities of Buffalo, Rochester, Syracuse and Yonkers, each of which have fiscal years ending on June 30.

Amsterdam (Montgomery County) was the only city in “moderate fiscal stress” with a score of 58.3. Last year, Amsterdam was ranked in “significant fiscal stress” with a score of 75. The villages of Addison (Steuben County) and South Dayton (Cattaraugus County) were also in “moderate fiscal stress.” Both villages were ranked in “susceptible to fiscal stress” last year but jumped in score this year with Addison going from 53.8 to 61.7 and South Dayton going from 47.5 to 55.4.

The system, which has been in place since 2012, assesses levels of fiscal stress in local governments using financial indicators including year-end fund balance, cash position, short-term cash-flow borrowing and patterns of operating deficits. It generates overall fiscal stress scores, which ultimately drive final classifications. The system also analyzes separate environmental indicators to help provide insight into the health of local economies and other challenges that might affect a local government’s or school district’s finances. This information includes population trends, poverty and unemployment.

DiNapoli’s office also has a self-assessment tool that allows local officials to calculate fiscal stress scores based on current and future financial assumptions. Officials can use this tool to assist in budget planning, which is especially helpful during periods of revenue and expenditure fluctuations.

In January, 2022 DiNapoli released fiscal stress scores for school districts. In September, 2022 scores for municipalities with a calendar-year fiscal year, which includes all counties, towns, most cities and a few villages, will be released.

List of Villages and Cities in Fiscal Stress

Municipalities in Fiscal Stress

List of Villages and Cities that Failed to File Financial Information

Municipalities that Failed to File or Inconclusive List

Complete List of Fiscal Stress Scores

Data Files

FSMS Search Tool

Tool

###

Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.

Correcting the "fall-out" resulting from a wrongful termination

A former police officer became ineligible to file for service retirement benefits when she was wrongfully terminated from her position. 

Although the termination was corrected and the former officer was reinstated to her former position, it required the enactment of Chapter 800 of the Laws of 2021 to allow the former officer obtain retirement benefits from the New York State and Local Police and Fire Retirement System.

The bills sponsor explains that through no fault of her own, the police officer was ineligible to file for her service retirement benefit with the New York state and local police as the result of her wrongful termination because at the time of her termination she was ineligible to qualify for a service retirement benefit because she did not have "twenty qualifying years of service credit necessary to retire under her special retirement plan established pursuant to §384-d of the Retirement and Social Security Law. 

The  bill's sponsor, New York State Timothy M. Kennedy, explained that "a grave injustice was corrected" when the police officer's termination was vacated and the police officer was reinstated to her former position, providing her with the necessary twenty years of qualifying service credit required for her to be eligible to qualify for retirement benefits pursuant to Chapter 800.

 

Audits and reports issued by the New York State Comptroller during the week ending April 8, 2022

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued during the week ending April 8, 2022:

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

School Districts

George Junior Republic Union Free School District – Website Transparency (Tompkins County) Although school district officials maintain a website, certain financial information was either not posted or comprehensive, resulting in a lack of transparency. Officials did not post external audit reports, original and final annual budgets, or board meeting minutes as required.

Hancock Central School District – Non-Resident Student Tuition (Delaware County) Officials did not establish non-resident tuition (NRT) rates in the best interest of school district taxpayers. The board approved NRT contracts between the district and Wayne Highlands School District without performing a cost-benefit analysis. Over the past three school years, the board approved Wayne Highlands NRT rates that were less than the New York State Education Department’s maximum allowable rates and actual BOCES costs by a total of $1.29 million, or an average of $430,000 each school year.

LaFargeville Central School District – Information Technology (Jefferson County) District officials did not establish adequate IT controls over physical IT assets and non-student user account access to the district’s network. In addition to sensitive IT control weaknesses, auditors found that 235 IT assets costing $108,462 were not recorded in the district’s inventory records, and seven computers, two audio systems, one projector and 10 other electronic components that cost $9,266 could not be found.  

Northport – East Northport Union Free School District – Extra-Classroom Activity Fund (Suffolk County)Extra-classroom activity (ECA) funds were not properly collected, recorded, remitted, deposited, disbursed and reconciled. The district did not have proper procedures or a faculty auditor. Collections totaling $5,767 were not recorded in the accounting records and were not deposited in the bank and collections of $845,258 were missing key support. Records to support transactions totaling $134,449 were missing and 95 payment request forms totaling $66,149 either had no supporting documents or they lacked key information.

Oswego City School District – Separation Payments (Oswego County) District officials did not accurately calculate separation payments or benefits for five of the 10 employees reviewed. Officials made separation payments totaling $38,477 that were inconsistent with language in the employees’ CBA or employment contract. 

Otego-Unadilla Central School District – Information Technology (Otsego County) The board and district officials did not ensure computerized data was safeguarded. In addition to sensitive IT control weaknesses, auditors found the district had 58 unneeded user accounts and officials did not provide IT security awareness training. The board also did not adopt a written IT contingency plan.

Seneca Falls Central School District – Procurement (Seneca County) District officials did not always use a competitive process to procure goods and services to achieve the optimal use of district resources. Auditors reviewed 40 purchases and found 21 lacked competition or documentation to support an exception from competition. District officials did not competitively procure or document an exception from soliciting competition for services provided by six professional service providers that were paid a total of $895,668. The district also did not have written agreements with three professional service providers paid $112,262.

Wilson Central School District – Financial Management (Niagara County) The board and district officials did not properly manage fund balance and reserves. As of June 30, 2021, the recalculated surplus fund balance was $3.3 million, which exceeds the 4% statutory limit by 8 percentage points. District officials improperly restricted more than $1.6 million in the debt reserve fund. Workers’ compensation reserves fund balance of $836,000 can fund the average workers’ compensation expenditures for 26 years. Unemployment reserve balance of about $400,000 is nearly 200 times the average unemployment expenditure. By maintaining surplus funds in excess of the statutory limit and maintaining excess reserves, real property taxes may have been higher than necessary.

Wyandanch Union Free School District – Budget Review (Suffolk County) Auditors found that the significant revenue and expenditure projections in the proposed budget were reasonable. The district’s proposed budget complies with the tax levy limit because it includes a tax levy of $23,105,027, which is within the limits established by law.

Municipal Audits

Town of Coventry – Town Clerk/Tax Collector (Chenango County) The clerk did not record, deposit, remit or report all collections in a timely manner. As a result, the town’s collections were at a greater risk of being lost or misappropriated. The clerk did not accurately record all real property tax collections and deposited some collections and fees months after they were received. As of July 31, 2021, a portion of real property tax penalties collected ($1,601), a taxpayer’s double payment ($1,465), and a portion of clerk fees collected ($1,075) were not remitted or refunded to the appropriate parties. The board did not conduct the required annual audit of the clerk’s records.

Town of Delhi – Highway Department Leave Records (Delaware County) Town officials did not accurately maintain employee leave records. Leave balances for the former deputy highway superintendent from 2015 through 2019 were overstated by a total of 362 hours valued at almost $8,000. Of this, 272.5 hours was from leave time not being properly recorded, while 89 hours was attributed to the deputy’s failure to use sick leave for lost time due to an occupational injury, which resulted in an overpayment of his health and dental premiums of $6,411. The 2018 and 2019 leave balances of six of the other seven department employees were overstated by 94 hours. Based upon this examination and investigation of discrepancies the former deputy was arrested in September 2020 and charged with grand larceny in the third degree.

Town of Gaines – Town Clerk/Tax Collector (Orleans County) The clerk did not adequately perform her financial duties. The clerk did not deposit collections in a timely manner or perform bank reconciliations. The board also did not perform an annual audit of the clerk’s records, as required by New York State Town Law Section 123.

Town of Morehouse – Records and Reports (Hamilton County) The supervisor did not maintain the town’s accounting records and reports in a complete, accurate, up-to-date or timely manner. The town’s accounting records were not reliable and $2,082,924 in revenues and $673,497 in disbursements were not recorded. Cash balances were understated by about $1.7 million as of June 30, 2021. Federal payroll taxes were not filed timely, resulting in interest and penalties totaling $6,520. The 2012 through 2020 annual update documents (AUDs) were not filed with the Office of the State Comptroller, as required, and bank reconciliations were not performed. Monthly financial reports were not prepared for and submitted to the town board.

Town of Owego – Water Fund Operations (Tioga County) Town officials did not provide adequate oversight of water fund operations. Specifically: 104 of 1,380 water bills tested were not calculated correctly resulting in approximately $70,000 of lost revenue for the town. All 51 water bill adjustments reviewed, totaling $233,400, were not approved by the board. Of those, 28 adjustments totaling approximately $70,100 were also not appropriate. The consolidated water district had operating surpluses of over $465,000 in 2019 and $395,000 in 2020. 28 percent of the water produced, or 138.6 million gallons, is considered unauthorized non-revenue (lost) water, 12 percentage points above the national average.

Sullivan County Funding Corporation – Millennium Revolving Loan Program (2021M-196) Corporation officials did not award all funds from the program in accordance with established guidelines and did not ensure businesses complied with their agreements. The Loan Review Committee approved two loans that exceeded program loan allowances. One loan exceeded the allowance by $37,500, or 100%, and the second by $15,710, or 76%. Officials did not verify businesses’ self-reported job creation and retention numbers and had no procedures for recapture if job creation and retention expectations were not met. Six businesses self-reported they did not meet job creation and retention goals by a total of 24 jobs and seven businesses self-reported they met or exceeded job creation and retention goals by a total of 40 jobs.

Town of Ulysses – Information Technology (Tompkins County) Town officials did not ensure IT systems were adequately secured and protected against unauthorized use, access and loss. The board did not adopt adequate written IT policies or a written IT contingency plan. Officials did not adequately manage local user accounts. The board did not enter into a written service level agreement with the town’s IT service provider. Sensitive IT control weaknesses were communicated confidentially to officials.

---

Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.

 

A probationary firefighter injured while participating in an approved basic firefighter training program is eligible for General Municipal Law §207-a disability benefits

Less than six months after being appointed as a full-time probationary firefighter by the City of Norwich the Plaintiff in the CPLR Article 78 action attended the Binghamton Fire Academy to complete an approved required training program. While practicing for one of the required physical tests, Plaintiff sustained an injury and was unable to complete the training or return to active duty. He subsequently applied for benefits pursuant to General Municipal Law §207-a, but Norwich denied his application contending that Plaintiff's injury did not occur in the course of his  performance of his official duties. 

As the collective bargaining agreement between the City and Plaintiff's union contained no provision for an administrative appeal of the denial of §207-a benefits, Plaintiff commenced a combined CPLR Article 78 and action for declaratory judgment proceeding seeking a court order annulling the City's determination, contending it was arbitrary and capricious and in violation of General Municipal Law §207-a.

Supreme Court rejected the City's argument that Plaintiff's "alleged injury occurred while training, not as a result of the performance of his duties" and held that the denial of Plaintiff's application for General Municipal Law §207-a benefits was arbitrary and capricious, which ruling the Appellate Division sustained upon Norwich's appeal.*

Explaining that "An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts," the Appellate Division observed that General Municipal Law §207-a provides for the payment of the full amount of regular salary or wages to a firefighter who is injured "in the performance of" or "as a result of" his or her job duties.

Further, said the court, "[t]o be eligible for benefits, a firefighter need only demonstrate 'a direct causal relationship between job duties and the resulting illness or injury" without regard to whether the specific injury-causing activity was one entailing the 'heightened risk' posed to firefighters." The court also noted that General Municipal Law §209-w requires that probationary firefighters, such as Plaintiff, complete an approved basic training program within a proscribed period of time following initial appointment.

Although Plaintiff was injured while practicing for the candidate physical ability test, a mandatory component of the required training and which had not occurred in the course of his actual performance of the required test, the Appellate Division opined that "successful completion of the candidate physical ability test was a necessary requirement of Plaintiff's position." Thus, said the court, Plaintiff "was engaged in the expected and foreseeable task of practicing for that test during a mandatory training program that was part of his duties as a probationary firefighter."**

Noting that §207-a[1] provides that payment of benefits shall be made to "[a]ny paid firefighter which term as used in this section shall mean any paid officer or member of an organized fire company or fire department of a city of less than one million population, ... who is injured in the performance of his or her duties," the Appellate Division concluded that statute applies to "any paid . . . member" of a municipal fire department and draws no distinction between certified and noncertified firefighters." Indeed, observed the Appellate Division, had the Legislature had intended to restrict General Municipal Law §207-a eligibility to only those firefighters who had obtained the required certification of basic training at the time of their injury, "it easily could have and surely would have written the statute to say so."

The bottom line: Benefits provided pursuant to General Municipal Law §207-a are available to both certified and noncertified paid firefighter[s] injured in the performance of their duties, including training required to qualify for the position.

Editor's note: In Cheryl M. Smith v County of Erie, et al., 210 AD2d 933, a probationary police officer injured during training was held eligible for General Municipal Law §207-c disability retirement benefits. 

*As the City of Norwich's administrative determination was made without having conducted an evidentiary hearing otherwise required by law, judicial review is limited to determining whether the City's determination had a rational basis and was not arbitrary and capricious.

**The Appellate Division also noted that Plaintiff "was attending the Fire Academy at the direction of the City that the training was paid for by the City and that [Plaintiff] was receiving full pay for his attendance and participation in the program."

Click HEREto access the Appellate Division's decision posted on the Internet.

Elements considered by courts when addressing a party's effort to vacate an arbitration award

Nassau County initiated a CPLR Article 75 action in Supreme Court in an effort to have the court vacate a contract disciplinary grievance arbitration award won by the Nassau County Investigators Police Benevolent Association, Inc. [PBA]. Nassau contended that the arbitration award "... was irrational, exceeded the arbitrator's powers, and violated public policy."

Supreme Court agreed with the County and denied PBA's petition seeking to confirm the arbitrator's award. The court then remitted the matter for a rehearing and determination before a different arbitrator. PBA appealed Supreme Court's ruling to the Appellate Division.

Citing Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471and other decisions, the Appellate Division explained that judicial review of arbitration awards is extremely limited, and an arbitration award may be vacated by a court only in the event "an arbitrator exceeds his or her power" and arbitrators exceed their power only in the event the award issued "violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power".

Here, said the Appellate Division, Supreme Court properly granted Nassau County's petition to vacate the arbitration award and properly denied the PBA's cross petition to confirm the award upon the court's finding that that the award was irrational and the arbitrator clearly exceeded a specifically enumerated limitation on his power. 

The relevant Collective Bargaining Agreement [CBA] provided that the arbitrator had no authority to modify the CBA and that the arbitrator "shall onlydecide whether misconduct or incompetence existed and, if so, the appropriate penalty permitted by [the CBA]" [emphasis in the Appellate Division's decision].

The court then explained that "[u]pon vacating an arbitration award, 'the court may order a rehearing and determination of all or any of the issues either before the same arbitrator or before a new arbitrator' [and that] It is within the court's discretion to remit an arbitration matter to the same or a different arbitrator."

Rejecting the PBA's contention to the contrary, the Appellate Division opined that "the Supreme Court providently exercised its discretion" in remitting the arbitration for a hearing before a different arbitrator, citing Matter of O'Flynn [Monroe County Deputy Sheriffs' Assn., Inc.], 141 AD3d at 1099].

Click HEREto access the Appellate Division's decision posted on the Internet.

Judicial consideration of a party's CPLR Article 75 petition seeking a permanent stay of arbitration

Supreme Court denied Nassau County's CPLR Article 75 petition seeking a court order permanently staying an employee organization's demand to submit an employee's grievance to arbitration. Nassau County appealed. The Appellate Division reversed the Supreme Court's ruling, on the law, and granted the County's petition to permanently stay arbitration, denying the employee organization's motion to compel arbitration.

Citing Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d 273, the Appellate Division explained that in determining whether a dispute between a public sector employer and an employee organization is arbitrable "a court must first determine whether 'there is any statutory, constitutional or public policy prohibition against arbitration of the grievance.'" 

If, said the Appellate Division, "there is no prohibition against arbitration," the court must then examine the parties' collective bargaining agreement to determine "whether the parties in fact agreed to arbitrate the particular dispute."

In this instance, said the Appellate Division, the employee organization is essentially seeking a reclassification of a public position in the Classified Service.*

As Civil Service Law §22** mandates that the reclassification of a civil service position in the classified service can only be accomplished by the responsible municipal civil service commission, the Appellate Division opined that the "subject grievance is nonarbitrable.

Thus, said the Appellate Division, Supreme Court should have granted Nassau County's petition "to permanently stay arbitration," rejecting the employee organization's motion to compel arbitration.

* See Civil Service Law §§40-45.

** §22, in pertinent part, provides that "Any such new position shall be createdor any such existing position reclassified only with the title approved and certified by the commission."

Click HERE to access the Appellate Decisions ruling posted on the Internet.

Employer's zero-tolerance policy for workplace violence sustained

The Appellate Division unanimously affirmed Supreme Court's denial of Plaintiff's petition to vacate an arbitration award that found Plaintiff guilty of violating his employer's zero-tolerance policy for workplace violence and imposing a penalty of a 25-day suspension without pay.

The court rejected Petitioner's contention that the arbitration award was irrational because the arbitrator did not explain where Petitioner should have "should have retreated" from the confrontation as "the path of analysis, proof and persuasion by which the arbitrator reached [his] conclusion is beyond judicial scrutiny," citing Matter of New York State Correctional Officers and Police Benevolent Assn. v State of New York,94 NY2d 321.*

The Appellate Division also observed that the arbitration award did not violate public policy as there are "no public policy considerations which would prohibit an arbitrator from deciding if an employee should be disciplined for workplace violence or imposing a 25-day suspension for such violence."

* In Correctional Officers the Court of Appeals held that courts "are not authorized to revisit ... the arbitrator's assessment of the evidence ... or reasoning in fashioning the [arbitration] award".

Click HERE to access the Appellate Division's decision posted on the Internet.

Imposing a reasonable disciplinary penalty under the circumstances

The Board of Trustees of the Pound Ridge Library District dismissed the Director of the Pound Ridge Library [Plaintiff] after adopting the findings and recommendation of a disciplinary Hearing Officer, made after a hearing finding the Plaintiff "guilty of certain charges of misconduct and incompetence." Plaintiff thereupon initiated a CPLR Article 78 action challenging the Board's action.

Supreme Court transferred the proceeding to the Appellate Division pursuant to CPLR §7804(g). The Appellate Division granted Plaintiff's petition to the extent it annulled so much of the determination as found the Plaintiff guilty of some of the charges and specifications charged, vacated the penalty imposed by the Board, termination, and remitted the matter to the Board for its consideration of a new, and appropriate, penalty to be imposed "under the circumstances."

Upon reconsideration of the matter as the court mandated, the Board voted to impose the penalty of demoting Plaintiff to the position of Librarian I. Plaintiff then commenced the instant proceeding to review the Board's determination to impose the penalty of demotion to Library I. Supreme Court denied Plaintiff's petition seeking to vacate the Board's determination and dismissed the proceeding.

Plaintiff appealed, contending that the penalty imposed "was unlawful since it was based on alleged misconduct with which she had not been charged and/or charges that were dismissed by this Court."

The Appellate Division held that Plaintiffs arguments were "without merit" as they were based "upon mere speculation and is otherwise not supported by the record." Further, opined the Appellate Division, "contrary to [Plaintiff's] contention, the record fails to raise any issues of fact material to the Board's determination which required a trial."

Quoting Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, Westchester County, 34 NY2d 222, the court explained that "[a]n administrative penalty must be upheld unless it 'is so disproportionate to the offense as to be shocking to one's sense of fairness,' thus constituting an abuse of discretion as a matter of law."

The Appellate Division pointed out that it had previously determined that substantial evidence supported the Board's determination that the Plaintiff was guilty of certain charges of misconduct and incompetence but further determined that so much of the determination as found the Plaintiff guilty of the remaining charges was not supported by substantial evidence "and that the penalty of termination of the petitioner's employment for the charges and specifications which were supported by substantial evidence was so disproportionate to the offense as to be shocking to one's sense of fairness," typically referred to as the Pell Doctrine.

Essentially, said the Appellate Division, the matter before the Board was its determining "the appropriate penalty to be imposed" in lieu of dismissal.

In the words of the court "Under the circumstances presented, the penalty of demotion to the position of Librarian I" effective as of the date of the Board's original determination" is not so disproportionate to the offenses which "this Court found to be supported by substantial evidence as to be shocking to one's sense of fairness."

The Appellate Division further concluded that the Board did not violate Civil Service Law §77 in demoting Plaintiff, nor "in basing an award of back pay and benefits commensurate with the position of Librarian I" from the effective date of Plaintiff's demotion, September 26, 2016, citing Matter of DeStefano v Board of Coop. Educ. Servs of Nassau County, 50 AD3d at 899.

Click HEREto access the instant decision by the Appellate Division.

A former employee's right to bring an action alleging a violation of Civil Service Law §75-b, the "whistle blower law," survives the employee's separation from employment

In this CPLR action the Appellate Division rejected a lower court's ruling that Civil Service Law §75-b does not apply to actions taken by a public employer against a former employee prohibited by §75-b after an employee has resigned.

Rather, said the court, Civil Service Law §75-b prohibits a public employer from dismissing or taking any "other disciplinary or other adverse personnel action against a public employee regarding the employee's employment" because the employee discloses information of either:

(1) a violation of rule or law which presents a substantial and specific danger to public health and safety, or 

(2) improper governmental action (see Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 NY3d 85. 

The Appellate Division explained this includes "... blacklisting and providing negative references to an individual's prospective employers in retaliation for prior reports of government misconduct." Such actions may constitute adverse personnel action within the meaning of §75-b in the same way that the State Human Rights Law has been found to cover certain violations of the State Human Rights Law, citing Beckett v Prudential Ins. Co. of Am., 893 F Supp 234."

 

Enforcing the federal Hatch Act 101

Although the federal Hatch Act generally prohibits state and local employeesserving with state or local government entity whose principal employment is in connection with an activity which is financed in whole or in part by loans or grants made by the United States or a Federal agency, from being partisan candidates for elected office, Section 1502(a)(3) of the Act carves out a number of exceptions.

In particular, the provisions set out in subsection (a)(3) of Section 1502 do not apply to the Governor or Lieutenant Governor of a state or an individual authorized by law to act as Governor; the mayor of a city; a duly elected head of an executive department of a state or a municipality of a state who is not classified under a state, municipal, merit or civil-service system; or an individual holding elective office

A number of state, however, are reported to have authorized "partisan elections" in selecting individuals seeking to be elected to the school boards of public elementary and secondary schools district and a number of other states are reported to be considering enacting legislation permitting "partisan elections" to such pubic school boards.

However there are penalties that may be imposed should the federal Merit Systems Protection Board determines that the "partisan election" of an individual to a public school board constitutes a violated the Hatch Act.

For example, 5 USC 1506 provides:

1. In the event the federal Merit Systems Protection Board finds that a state or a local officer or employee has not been removed for his or her office or employment within 30 days after notice of a determination by the Board that he or she has violated §1502 of the Act, "and that the violation warrants removal" of the individual from such office;

or

2. In the event the federal Merit Systems Protection Board finds that the individual "has been appointed within 18 months after his [or her] removal to an office or employment in the same state in a state or local agency ... which does not receive loans or grants from a Federal agency, 

3. the Board shall make and certify to the appropriate Federal agency an order requiring that agency to withhold from its loans or grants to the state or local agency to which notice was given an amount equal to 2 years’ pay at the rate the officer or employee was receiving at the time of the violation."

Further, in the event the state or local agency "to which appointment within 18 months after removal has been made is one that receives loans or grants from a Federal agency, the Board order shall direct that the withholding be made from that state or local agency."

In Matter of Blackburne, 211 AD2d 13, [motion to appeal denied, 86 N.Y.2d 705], the Appellate Division opined that an individual otherwise entitled to an "administrative due process disciplinary hearing” such as one provided by a Taylor Law collective bargaining agreement [CBA] or by state law, may be summarily removed from his or her position under certain conditions. Further, said the court, "the arbitration of this grievance would offend public policy" as might otherwise be required by a collective bargaining agreement" would significantly lessen the efficacy of the Hatch Act and frustrate its purpose and scope, citing Board of Educ. v. Areman, 41 NY2d 527. 

The Appellate Division explaining that the only penalties for violating the Act are either [1] removal from office or employment, or [2] the subsequent loss of Federal funds otherwise available to the employer. In contrast, observed the court, under the CBA an arbitrator typically has a range of disciplinary options that may be imposed on the wrongdoer that are much less severe than termination of employment.

The New York State Bar Association has posted an article by Sung Mo Kim, Esq. addressing the impact of the Merit Systems Protection Board finding violations of the Hatch Act on the Internet, [URL = https://nysba.org/app/uploads/2020/03/HatchActKimMunicipalFall06.pdf ].

Other "Hatch Act" court decisions involving New York public employees include Kraham v Lippman, USCA, 2nd Circuit, 478 F3d 502 [Political party officials, others, barred from receiving court fiduciary appointments] and In the Matter of Wayne Spence, as President of the New York State Public Employees Federation, AFL-CIO, et al. v New York State Department of Agriculture and Markets et al., 154 AD3d 1234, affd., 32 NY3d 99 [Public employers may prohibit its employees from campaigning for, and holding, elected office subject to its action satisfying the so-called Pickering Balancing Test].

Click HEREto access Chapter 15 of the US Code, captioned "Political Activity of Certain State and Local Employees," posted on the Internet.