Early retirement pay plans

Early retirement pay plans
Opinion of the State Comptroller - Opinion 2000 - 4

Early retirement or similar incentives are sometimes offered to employees.

M. Cornelia Cahill, Esq., on behalf of the Hadley-Luzerne Central School District, wrote to the State Comptroller seeking his opinion concerning a district's termination pay program having the following elements:

1. The plan would be established in accordance with the terms of a collective bargaining agreement.

2. The plan would provide an incentive to certain employees to terminate their employment with the school district, i.e., any employee choosing to participate in the program would receive post-separation cash payments of $400 per month for 120 months.

3. Eligible employees electing the plan would be required to agree to separate from service with the school district, but would not be required to commence their retirement benefits or otherwise retire from active employment other than with the school district.

The Comptroller said that a school district could establish such a plan to implement the terms of a collective bargaining agreement where:

1. The program is to provide an incentive to certain employees to separate from service, irrespective of whether the employee begins receiving retirement benefits;

2. Payments are made to employees separating from service who are at a specified minimum salary level or who have a minimum number of years of service; and

3. Periodic payments, in the same fixed amount over the same fixed period of time, would be paid to each qualifying employee.

The Comptroller concluded that neither Section 201(4) of the Civil Service Law nor Sections 113 and 470 of the Retirement and Social Security Law prohibited the district from establishing a program providing for payments to an eligible employee to be made over a period of years rather than as a single lump-sum payment upon separation from service. 

The Comptroller said: There is ... no nexus between an employee's retirement and eligibility for these payments ... the amount and duration of these payments are not open-ended ... [and] although there are threshold years of service and minimum salary criteria, the payments to each qualifying employee who chooses to separate from service are the same, regardless of years of service or level of compensation beyond the threshold.

Unemployment insurance - voluntarily leaving employment

Unemployment insurance - voluntarily leaving employment
LaClair v SUNY Research Foundation, 281 AD2d 677

Veronica A. LaClair challenged a determination by the Unemployment Insurance Appeals Board denying her unemployment insurance benefits on the grounds that she had voluntarily left her employment with the State University Research Foundation without good cause.

LaClair was employed as a part-time. She resigned from her position because she believed the Research Foundation would be unable to assign her a minimum of 20 hours of work per week. The decision notes that LaClair submitted her resignation “despite the employer's request that she delay her resignation while it attempted to adjust her work schedule.”

Affirming the Board's determination rejecting LaClair's application for benefits, the Appellate Division said that it is well settled that “dissatisfaction with the number of hours assigned by one's employer does not constitute good cause for resigning.” 

Vacating an arbitrator's award based on a finding it constituted a violation of public policy

Vacating an arbitrator's award based on a finding it constituted a violation of public policy
Nassau Co. v Sheriff's Officers Association, Supreme Court, Nassau County, Justice Ralph P. Franco, [Not selected for publication in the Official Reports], reversed, 294 AD2d 31

Vacating an arbitrator's award is not an easy task. Article 75 of the Civil Practice Law and Rules sets out the limited basis for overturning an arbitration award as follows:

(i) corruption, fraud or misconduct in procuring the award; or

(ii) partiality of an arbitrator appointed as a neutral, except where the award is by confession; or

(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or

(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of defect and without objection.

In addition, courts have vacated arbitration awards found to violate strong public policy.

This case arose as a result of Gemelli, a Nassau County corrections officer, being found guilty of assaulting an inmate under his care by a federal district court jury.

As a result the Sheriff terminated Gemelli from his position effective March 1, 1999. Gemelli filed a grievance challenging his dismissal and eventually the matter was submitted to arbitration.*

The Arbitrator made the following award:

1. The County's discharge of the grievant, Salvatore Gemelli, was not time barred.

2. The County did not have just cause to discharge Gemelli.

3. Gemelli shall, forthwith, be made whole for any wages and benefits lost, less any interim earnings, for the period of March 1, 1999, until Gemelli's retirement, effective May 27, 1999.

Nassau County brought an Article 75 action in an effort to vacate the arbitrator's award. The Sheriff's Officers Association, on the other hand, asked the court to confirm the award.

Justice Franco, after reading the arbitrator's decision and award, said:

1. An arbitration award shall be vacated where it is totally irrational or violative of strong public policy.

2. The arbitrator's award in this instance conflicts with strong public policy.

The court indicated that Gemelli, in exercising his responsibilities, was required to protect and care for this mentally retarded inmate under his care at the jail.

In contrast to Gemelli's actions, Justice Franco said that “[t]he inmate was to be protected by him, not assaulted by him as the jury found in the Federal trial.”

Turning to the arbitrator's holdings overturning Gemelli's termination, the court ruled that “[a]s his conduct was clearly a violation of public policy, he was justly discharged and is not entitled to be made whole for wages.”

The Appellate Division disagreed, concluding that at issue on this appeal is whether the arbitrator's award in this proceeding pursuant to CPLR Article 75 was violative of public policy. 

Because the petitioner County of Nassau failed in the Supreme Court to sustain its burden of demonstrating a strong and well-defined public policy with which the arbitrator's award conflicts, the Appellate Division reverse the order of the Supreme Court, deny the petition, and grant the cross motion to confirm the arbitrator's award.

* Gemelli retired while the disciplinary arbitration procedure was still  pending.