In the absence of any “expressed” contractual limitations, an arbitrator is free to fashion a fitting and necessary remedy to a contract dispute

In the absence of any “expressed” contractual limitations, an arbitrator is free to fashion a fitting and necessary remedy to a contract dispute
Matter of City of New York v District Council 37 AFSCME, 2010 NY Slip Op 05671, Decided on June 24, 2010, Appellate Division, First Department

An arbitrator ruled that a number of individuals employed as New York City Public Health Advisors (PHAs) by the City’s Department of Health and Mental Hygiene were entitled to $1,800 for each year since the filing of the grievance claiming that they had been performing out-of-title work.

The City appealed, contending that any monetary remedy for the out-of-title work should be “the difference in pay between existing titles covered under the parties' collective bargaining agreement, and not some "new term" of compensation "created" by the arbitrator.” The City argued that the remedy provided by the arbitrator was “in excess of her powers under the collective bargaining agreement and contrary to the public policy that compensation be negotiated.”

Supreme Court dismissed the City’s appeal and the Appellate Division sustained the lower court’s determination.

The Appellate Division said that regardless of any arbitral precedent there might be for such a limitation on the arbitrator's remedy-fashioning powers under collective bargaining agreements like this one, “it plainly can have no application where, as here, there is no dispute that the hybrid out-of-title duties performed by the PHAs do not match the job specifications of any other existing titles.”

Under the circumstances, said the court, “an arbitrator's powers are not limited, as the City appears to argue, to a cease and desist order.”

As there was no “plain and express contractual limitation” in the collective bargaining agreement limiting the powers of the arbitrator, “the arbitrator properly directed the parties to negotiate; when the negotiations reached an impasse, the arbitrator properly invited the parties to submit proof of the value of the out-of-title services performed, including their last best offers; and, on that basis, fashioned fitting and necessary relief.”

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05671.htm

Having a residence in the jurisdiction not always the same as having a domicile in the jurisdiction

Having a residence in the jurisdiction not always the same as having a domicile in the jurisdiction
Matter of Johnson v Town of Amherst, 2010 NY Slip Op 05447, Decided on June 18, 2010, Appellate Division, Fourth Department

The Town of Amherst’s Town Code required its employees to be “domiciliaries of the Town.”

James I. Johnson’s family’s home, however, was in Elba, New York and the evidence in the action showed that he “listed the Elba address on his New York State income tax forms, that he had no intention of moving his family to [Amherst] and that he established residency in [Amherst] solely to comply with the original residency requirements of his employment.”
As a result Johnson was terminated from his position with Amherst for failing to comply with the Code’s requirement that he be a domiciliary of the Town.

Johnson sued and asked the court to annul his termination by the Town of Amherst based on its “residency requirement” that Town employees to be domiciliaries of the Town. Supreme Court sustained the Town’s decision and the Appellate Division affirmed the lower court’s ruling.
The Appellate Division explained that "[D]omicile means living in [a] locality with intent to make it a fixed and permanent home."*

Noting that "[j]udicial review of an administrative determination following a hearing required by law is limited to whether the determination is supported by substantial evidence," the Appellate Division said that the evidence presented at the hearing established that Johnson’s family lived in a home in Elba, and that he established a residency in the Town “solely to comply with the original residency requirements of his employment.”

The court concluded that the determination that Johnson is a domiciliary of Elba rather than the Town is supported by substantial evidence and dismissed his appeal.

The Appellate Division also commented that Johnson was fully apprised of the evidence that the Town would consider in making its determination and that he was given "numerous opportunities to respond and to present his own evidence" to establish that he, in fact, was domiciled in Amherst but that he failed to come forward with such evidence.

* Although an individual may have, and maintain, a number of different residences simultaneously, he or she can have, and maintain, only one domicile at a given time.

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05447.htm

Sovereign immunity

Sovereign immunity
Alston v State of New York, Ct. of Appeals, 97 N.Y.2d 159

The doctrine of sovereign immunity generally shields a state from suit absent its consent. In Alden v Maine, 527 US 706, the Supreme Court of the United States found that State sovereign immunity is "implicit in the constitutional design." States have claimed sover­eign immunity with respect to their being sued in federal court for alleged violation of various acts of Congress including the Fair Labor Standards Act. New York's claim of sovereign immunity was a critical element in resolving the Alston case.

In 1991, Benjamin Alston and 102 other State parole officers sued the State, claiming that it had failed to pay them overtime in violation of the Fair Labor Standards Act. In 1997, the United States District Court, Northern District of New York, dismissed the action based on the US Supreme Court's ruling in Seminole Tribe of Florida v Florida, 517 US 44. In Seminole the high court said that Article I of the Constitution did not give Congress the power to defeat a states' Eleventh Amendment sovereign immunity from suits commenced or prosecuted in Federal courts.

Alston appealed to the Second Circuit United States Court of Appeals, but the parties agreed to a voluntary dismissal of the action in view of the fact that the Second Circuit had ruled against other claimants in a similar case.

In 1998, Alston filed the same lawsuit in the New York's State Court of Claims. The Court of Claims dismissed the complaint holding that it lacked subject matter jurisdiction because Alston's petition was untimely.

The Appellate Division affirmed the Court of Claims' ruling. It said that "when New York waived its immunity subject to a six-month Statute of Limitations for FLSA claims brought against it as provided by the Court of Claims Act Section 10 ..., such limitation could not be overridden by the Article I powers delegated to Congress, whereby a two or three-year Statute of Limitations was created for FLSA claims." In other words, Alston should have filed his petition with the Court of Claims within six months of the "accrual of his cause of action." The Court of Appeals sustained the Appellate Division's determination.

In the words of the Court of Appeals:

"The issue before us is whether, under the terms of the waiver of sovereign immunity found in Court of Claims Act Section 8, the State retained its immunity as to these claims because claimants failed to comply with the time limitations set forth in Court of Claims Act Section 10(4), upon which the [State's] waiver was conditioned."

The court's conclusion: the State retained its immunity. Why? Because, explained the court, although Section 8 of the Court of Claims Act provides that "the state hereby waives its immunity from liability and action and hereby assumes liability and consents to have the same determined in accordance with the same rules of law as applied to ac­tions in the supreme court against individuals or corporations, provided the claimant complies with the limitations of this article."

Accordingly, the State's waiver of sovereign immunity was not absolute, but was condi­tioned upon a claimant's compliance with the limitations on the waiver, including the relevant filing deadlines.

The Court of Appeals ruled that "because claimants failed to file their claims in the Court of Claims within six months after their accrual ... and did not timely seek relief from the court under Court of Claims Act 10(6), the State was entitled to dismissal of this claim on sovereign immunity grounds.

Terminating an employee during a disciplinary probation period

Terminating an employee during a disciplinary probation period
Fortner v NYC Dept. of Corrections, 280 A.D.2d 381

In many cases disciplinary charges are "settled" by the employee agreeing to serve a "disciplinary probationary period." The majority of such settlements set out the terms and conditions of the probation and typically provide for the termination of the individual without any further hearing if he or she violates the terms of the settlement.

Steven T. Fortner was serving a disciplinary probation period following the settlement of disciplinary charges that had been filed against him by the New York City Department of Corrections.

The department terminated him, contending that "he violated the terms of his limited probation as set forth in his negotiated plea agreement."

Fortner sued, alleging that he had been terminated in bad faith. The court disagreed, finding that Fortner produced no evidence to support his claim that his dismissal was motivated by bad faith.

Fortner had also asked the court to annul his termination and have the matter remitted to the Department "for reconsideration of the sanction."

The Appellate Division decided that such action was not appropriate under the circumstances since Fortner's termination did not "shock the judicial conscience."

Further, said the court, terminating Fortner for violating the terms of his disciplinary probationary period did not constitute an abuse of discretion on the part of the appointing authority.

The lesson here is that the courts will sustain the termination of an individual serving a disciplinary probation period without a hearing if the employee is discharged for violating or failing to comply with the terms of the disciplinary probation agreed upon.

Suppose the court finds that the employee's termination was inconsistent with the terms and conditions of his or her disciplinary probationary period?

As the Taylor decision indicates [Taylor v Cass, 505 NYS2d 929], in such a situation the individual will be reinstated with back salary.

The Taylor court determined that under the terms of Taylor's disciplinary probation, he could be terminated without any hearing if, in the opinion of his superior, Taylor's job performance was "adversely affected" by his "intoxication on the job."

The court said the appointing authority gave two reasons for it terminating Taylor for violating the terms of his disciplinary probationary period:

1. Taylor's "failing to give a fair day's work"; and

2. Taylor's "sleeping during scheduled working hours."

However, the court found that Taylor's termination was improper because Taylor was not terminated for the sole reason specified in the settlement: his intoxication on the job adversely affecting his performance of the job.

Sometimes the disciplinary probation established resulting from the settlement of the disciplinary action does not limit the appointing authority's discretion in terminating the employee. The Wright case demonstrates such a situation.

In Wright v City of New York, 596 NYS2d 372, the Appellate Division ruled that an employee who had agreed to a disciplinary probation in settlement of disciplinary charges filed against him that provided that his probation status would be the same as any other probationary employee was not entitled to a pre-termination hearing when he was dismissed because of subsequent incidents.

In other words, under the terms of Wright's disciplinary probation he was treated as a "new employee" and he could be summarily terminated for any lawful reason.

Governor Paterson accepts final report of Task Force on Public Retiree Health Insurance

Governor Paterson accepts final report of Task Force on Public Retiree Health Insurance
Source: Office of the Governor

On June 23, 2101 Governor David A. Paterson accepted the final report of the Task Force on Public Employee Retirement Health Care Benefits. Established by Executive Order No. 15.

The Task Force was tasked with reviewing issues such as the level and cost of benefits received by New York State public employees and retirees, the degree to which those benefits have been impacted by difficult fiscal times, the current legal framework governing retiree health benefits, potential avenues for addressing rising health care costs, and various proposals for reform.

The Task Force included representatives of various executive agencies, the Comptroller, the Legislature, local governments, labor and retiree groups. It was chaired by Richard Berman, who has previously served as director of the New York State Office of Health Systems Management, Director of the Division of Housing and Community Renewal, chair of the Westchester Medical Center, and President of Manhattanville College.

Governor Paterson said that the Task Force made the following recommendations:

• Encourage employer coalitions with labor participation pursuant to Article 47 of the Insurance Law.

• Permit the establishment of State administered prescription drug carve out plans for retired public employees.

• Implement a co-payment structure which encourages primary and preventative care by reducing financial barriers to managing disease.

• Provide a premium contribution to plan members who live outside of the service area of the employer's plan for other coverage of the retired employee's choosing.

• Continue to provide, where appropriate, incentives for providers and consumers to implement electronic medical records.

• No payment by retiree health plans, coupled with a prohibition of balance billing by providers, for "never events."

• Build relationships with and encourage use of health education and disease self management programs that promote healthy behaviors such as exercise, smoking cessation and other evidence based chronic disease self management programs.

• Require that insurers and plan administrators provide claims experience, consistent with statutory privacy protections, to local governments on request, thereby providing employers with greater audit authority.

• Actively pursue third party liability (e.g., coordination of benefits, subrogation).

• Encourage employers to provide information and assistance to retired public employees to enable them to fully leverage Medicare benefits such as health screenings and to make informed decisions about coverage.

• Establish a State insurance exchange including, but not limited to retired public employees with no coverage.

• Provide jurisdiction to the Insurance Department for oversight of the reserves and solvency of self-funded government plans.

• Encourage employers to allow retired employees who meet the plan's eligibility requirements to enroll in the employer's plan regardless of whether they were covered as an active employee.

• Implement more aggressive oversight of health care costs by the State and Federal governments.

• Create a standing task force which would represent in a fair and balanced manner the interests of retired public employees, their former employers, taxpayers and the public at large.

The Governor reported that the Task Force was unable to reach a consensus on the best approach to reform proposals that would limit the ability of public employers to diminish public retiree health benefits. Instead, it includes three position papers that set forth varying recommendations of particular Task Force participants.

A copy of the Final Report is available on the Internet at:
http://www.ny.gov/governor/reports/pdf/HealthCareRetiree.html