Hearsay may constitute "substantial evidence" supporting the tribunal's findings in an administrative hearing

Hearsay may constitute "substantial evidence" supporting the tribunal's findings in an administrative hearing
2017 NY Slip Op 05147, Appellate Division, Third Department

An employee [Employee] at a residential facility operated by the Office of People with Developmental Disabilities [OPWDD] was alleged to have physically abused a resident.

An investigator conducted interviews of several witnesses and found the report of physical abuse to be substantiated. After a hearing, Employee's request that report be amended to unsubstantiated and that the report be sealed was rejected and a final determination sustaining the report of physical abuse was made.

Employee then commenced a CPLR article 78 proceeding challenging the determination which was made following an administrative hearing as unsupported by substantial evidence. Supreme Court transferred the proceeding to the Appellate Division.

The Appellate Division found that the final determination was supported by substantial evidence. Addressing Employee's contention that the hearsay statements in the record cannot constitute substantial evidence, the Appellate Division said that "it is well established that, in an administrative hearing, hearsay is admissible and may support a finding of substantial evidence."

Citing Matter of Today's Lounge of Oneonta, Inc. v New York State Liq. Auth., 103 AD3d 1082, the court commented that hearsay evidence may, "under appropriate circumstances, form the sole basis of an agency's determination, unless the hearsay evidence is seriously controverted."

In this instance, said the court, the corroborated description of the incident by the eyewitness was only controverted by Employee's denial.  Consequently, the corroborated description by the eyewitness could be viewed as not seriously controverted and "sufficiently reliable" so as to constitute substantial evidence.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_05147.htm

Disqualifying an employee for employment in the public service and revoking his or her appointment based on a finding of fraud of a substantial nature in his or her application for employment

Disqualifying an employee for employment in the public service and revoking his or her appointment based on a finding of fraud of a substantial nature in his or her application for employment  

2017 NY Slip Op 05151, Appellate Division, Third Department

In 2009 the petitioner [Petitioner] in this Article 78 action had completed an application for employment with a public employer [Employer A] that included the question, "Have you ever resigned from employment rather than face discharge?" Petitioner answered "no" and signed an affirmation that the statements in the application "[were] true under the penalties of perjury and that a material misstatement or fraud may disqualify [her] from appointment." Petitioner was subsequently appointed by Employer A.

In 2015, Employer A issued a notice of charges alleging several acts of misconduct and notifying Petitioner that it would seek her dismissal if she was found guilty after a hearing. After obtaining additional information, the notice of discipline was revised to add a charge that Petitioner had made a false statement in her application for employment.

A disciplinary hearing was conducted and the hearing officer found, among other things, that Petitioner had withheld relevant information regarding her previous employment with another public employer, Employer B. As a result of this additional information, Petitioner was sent a notice of revocation of eligible certification, appointment and termination of employment pursuant to Civil Service Law §50(4). Petitioner requested, and was provided with a due process hearing. Ultimately Petitioner's "eligible certification and appointment" was revoked and Petitioner was terminated from her position.

Petitioner then commenced a proceeding pursuant to CPLR Article 78 seeking a court order annulling Employer A's determination and reinstate to her former position. Supreme Court dismissed Petitioner's action and she appealed the court's determination.

The Appellate Division noted that evidence and hearing testimony resulting Employer A terminating Petitioner revealed that Employer B, her former employer, had issued six disciplinary charges against her in 2008, which carried a maximum penalty of dismissal. After being served with these disciplinary charges, Petitioner had filed various claims against Employer B and her union, including charges with the Public Employment Relations Board. In September 2008, the parties entered into a separation agreement, by which Petitioner agreed to resign from her employment and withdraw her claims and Employer B, among other things, agreed to withdraw the disciplinary charges* against her, to issue a letter of reference using agreed-upon language, and to pay Petitioner $100,000 in settlement of her claims. In addition, the parties agreed not to discuss "the terms of [the agreement] or any fact concerning its negotiation, execution or implementation with anyone," unless "required to do so by law or legal process."

Acknowledging that she had resigned her position with Employer B while the charges were still pending, and that the maximum penalty sought by Employer B was dismissal, Petitioner gave several reasons for her "no" answer to the application question, stating that:

1. She acted upon the advice of counsel;**

2. She believed that she could not discuss the agreement because of its confidentiality provisions, and;

3. She expected to prevail on the disciplinary charges and therefore believed that she was not facing discharge.

Pursuant to the Civil Service Law §50[4], the State Civil Service Commission, with respect employee of the State as the employer and a county civil service department with respect to employers within its jurisdiction, may investigate the background and qualifications of an eligible individual after he or she has been appointed, and may revoke a certificate of appointment and direct the termination of employment, as pertinent here, "upon finding facts which if known prior to appointment, would have warranted his [or her] disqualification, or upon a finding of . . . fraud of a substantial nature in his [or her] application, examination or appointment."

Here, said the Appellate Division, Employer A's Personnel Officer found that Petitioner had resigned her position with Employer B rather than face discharge, that this resignation would have warranted Petitioner's disqualification from eligibility and, in the alternative, that Petitioner's failure to disclose the circumstances of her resignation constituted, as relevant here, a fraud of a substantial nature in her application. The Personnel Officer further found that Petitioner's failure to disclose her resignation had prevented Employer A from inquiring into the circumstances and discovering information material to her qualifications and background, and that her failure to disclose her resignation amounted to fraud.

The court noted that Employer A appointed Petitioner almost six years before it brought charges against her. Thus, said the Appellate Division, "Supreme Court correctly determined that [Employer A] is time-barred by the three-year statutory limitations period from enforcing Civil Service Law §50 on grounds other than fraud, and the sole issue to be resolved here 'is whether fraud of a substantial nature existed in connection with petitioner's application.'"

In the words of the Appellate Division, [Employer A] has "[w]ide discretion" to determine the fitness of candidates for civil service eligibility and employment and, in the absence of clear abuse, this Court will sustain such a determination."

Further, said the court, "Our review is limited to whether [Employer A's] determination was an abuse of discretion or arbitrary and capricious." Considering the affirmation that the statements in Petitioner's application were true in light of her acknowledgment that she resigned while charges that could have resulted in her dismissal were pending against her, the Appellate Division did not find Employer A's inference that Petitioner acted intentionally to be arbitrary and capricious. As Petitioner's resignation was an express requirement of the agreement by which Employer B agreed to withdraw the charges, "it was not arbitrary and capricious for [Employer B] to discredit Petitioner's assertion that she resigned, not for the purpose of avoiding dismissal, but instead to obtain payment for settling her claims against [Employer B].

The Appellate Division also rejected Petitioner's assertions related to the provisions of the agreement that prohibited her from disclosing its terms and related facts, explaining that the language in the agreement did not preclude her from disclosing the fact that she had resigned pursuant to an agreement. As Supreme Court had noted, said the court, Petitioner could have completed the employment application truthfully while complying with the agreement's confidentiality requirements by answering the question about previous resignations "yes" and indicating in the application's explanatory section that she had resigned from her employment with [Employer B] pursuant to an agreement, but could not disclose its details.

Such an acknowledgment would have allowed Employer A an opportunity to inquire further into circumstances surrounding her resignation, "as it did promptly when it later learned of her resignation." The Appellate Division said it found nothing arbitrary and capricious and no abuse of discretion in Employer A's determination that Petitioner committed fraud of a substantial nature.

* 4 NYCRR 5.3(b), which applies to employees of the State as the employer, in pertinent part, provides that, Resignation, provides: that “… when charges of incompetency or misconduct have been or are about to be filed against an employee, the appointing authority may elect to disregard a resignation filed by such employee and to prosecute such charges and, in the event that such employee is found guilty of such charges and dismissed from the service, his termination shall be recorded as a dismissal rather than as a resignation." Many local civil service commissions have adopted a similar rule.

** Petitioner, said the Appellate Division, clarified that she did not consult with counsel while completing the application, and that her understanding of the issue was based upon a conversation that she had previously had with her counsel when she entered into the separation agreement.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_05151.htm

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The actions of an employee prior to his or her promotion may properly form the basis for terminating the individual prior to the completion of his or her probationary period

The actions of an employee prior to his or her promotion may properly form the basis for terminating the individual prior to the completion of his or her probationary period

2017 NY Slip Op 05145, Appellate Division, Third Department

An individual [Probationer]  serving with the  New York State Department of Corrections and Community Supervision was promoted to a higher grade position subject to his satisfactory completion of a 52-week probationary period. Shortly after Probationer had completed the minimum period of probation he was terminated from his probationary appointment and reinstated to his former, lower grade, position.

Probationer contending that the termination of his probationary period was made in bad faith as the appointing authority "waited to demote him to his former position until just after he completed the eighth week of his probationary period — the minimum probationary service period — to avoid having to establish under Civil Service Law §75 that the demotion was based on incompetence or misconduct," filed an Article 78 petition in Supreme Court seeking reinstatement to the higher grade position with back salary.

Supreme Court dismissed Probationer's petition and he appealed the court's ruling.

The Appellate Division affirmed the lower court's determination, explaining that "An employee's probationary appointment may be terminated without a hearing for any reason or no reason at all, so long as the termination was not "in bad faith or for an improper or impermissible reason."*

To warrant a hearing after completing his or her minimum period of probation, the employee bears the burden of raising a material issue of fact as to whether the termination was made in bad faith or for an impermissible reason; allegations of a conclusory or speculative nature are insufficient to meet this burden.

Here, said the Appellate Division, Probationer's submissions were insufficient to raise a material issue of fact as to whether his discharge from the higher grade position was made in bad faith or based on an improper or impermissible motive.

The court noted that in answering Probationer's petition, the appointing authority submitted, among other things, the affidavit of the Personnel Director "which established that the decision to terminate [Probationer's] probationary promotion was made in good faith." The affidavit of the Personnel Director cited an investigative report in which it was concluded that the most credible version of certain events that occurred prior to Probationer's promotion "pointed to [Probationer] having observed and/or participated in threatening [a] particular inmate and then denying such observation or participation."

In addition, "as found by Supreme Court," the Appellate Division said that Probationer's allegations of bad faith "were too conclusory and speculative to warrant a hearing on the matter" as there was no evidentiary support that the Director waited to demote him to his former position until just after he completed the minimum probationary period.

* "Probationary employees" typically hold permanent appointment in the position and may enjoy limited tenure rights. For example, courts have ruled that probationers are entitled to notice and hearing if the appointing authority seeks to dismiss the individual during his or her minimum period of probation. In contrast, a probationer may be dismissed without notice and hearing after completing his or her minimum period of probation and prior to the expiration of his or her maximum period of probation.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_05145.htm

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