Vacating an arbitration award

Vacating an arbitration award
Local 756 ex rel Westfall v Cohoes, 263 AD2d 652

The Westfall decision concerned an arbitration award on a ruling involving the denial of Section 207-c benefits. It sets out some of the basic elements considered by courts when they are asked to vacate an arbitration award.

The case also shows the distinction that can be made between a “job related” illness, such as stress, and an injury incurred “in the performance of duty” for the purposes of Section 207-a or Section 207-c.

Cohoes and Local 756 negotiated a Taylor Law provision in which it was agreed that Section 207-a and Section 207-c disputes would be resolved in accordance with the grievance procedures set out in the collective bargaining agreement.

Kenneth Westfall, a police lieutenant employed by the City of Cohoes, filed applications in March 1997 and in June 1997 seeking 207-c benefits. The city rejected both of Westfall’s applications, concluding that Westfall’s injury -- symptoms associated with stress and depression -- was not sustained in the performance of his duties.

The Appellate Division commented that “Westfall suffered from stress and depression as a result of conflicts with a supervisor” and that these episodes of stress and depression led to absences.

The issue was submitted to arbitration in accordance with the grievance procedure set out in the Taylor Law agreement between the city and the union. Further, the parties had stipulated that the question for the arbitrator to resolve was whether Westfall “[s]hould ... receive [General Municipal Law Section] 207-c benefits for [his] illness”.

In the course of the arbitration, there was testimony from three physicians and a clinical psychologist, each of whom had examined Westfall. All agreed that Westfall suffered from depression, but that this illness was not caused by actual police duties but, rather, from an interpersonal conflict with a superior.

Considering “the uniqueness of the hazards faced by police officers,” the arbitrator said that Westfall’s illness, although job related, was not a result of the performance of his police duties and therefore not the type of illness encompassed under the statute. The conclusion: Westfall “should not receive [Section] 207-c benefits.”

Local 756 filed a petition pursuant to Article 75 of the Civil Practice Law and Rules seeking a court order vacating the award. It contended that (1) the award was irrational or, in the alternative, (2) the award violated public policy. The union’s petition was dismissed by the Supreme Court and the local appealed, asking the Appellate Division review the matter.

The Appellate Division agreed that a court may vacate an arbitration award if it finds that the award is violative of a strong public policy or it is totally irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power. The problem here was that the Appellate Division concluded that the arbitrator’s award did not offend any standard.

The Appellate Division also commented that “[t]he power of the courts to intervene is even more restricted when the arbitrator’s interpretation resolves the question submitted, and not merely one aspect of the dispute”.

As to the local’s claim that the award was “irrational,” the Appellate Division said that the arbitrator’s interpretation of the statute, even though the interpretation “may have been erroneous or inconsistent with seemingly relevant decisional authority,” under the standard that the courts must use when considering vacating arbitration awards, “we are unable to conclude that the arbitration award denying General Municipal Law Section 207-c benefits under these circumstance was totally irrational.”

On this point the court, citing Silverman [Benmor Coats], 61 NY2d 299, said that an arbitrator is not bound by principles of substantive law and may do justice as he or she sees fit, applying his or her own sense of law and equity to the facts of the subject dispute.

Turning to the local’s public policy argument, the Appellate Division said that it was not persuaded that the award violates strong public policy, commenting that “the Court of Appeals has repeatedly cautioned that the public policy exception is narrow and an award may be set aside on this ground “[o]nly when the award contravenes a strong public policy, almost invariably involving an important constitutional or statutory duty or responsibility.”

Before a court may intervene by vacating an arbitration award on public policy grounds, it “must be able to examine an arbitration agreement or an award on its face, without engaging in extended fact-finding or legal analysis, and conclude that public policy precludes its enforcement,” quoting Matter of Sprinzen [Nomberg], 46 NY2d 623, 631). Finding that Local 756’s contentions did not satisfy this rigorous standard, it affirmed the lower court’s decision denying the local’s application to vacate the award.
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Workers’ Compensation Leave - Civil Service Law Section 71
House v NYS Office of Mental Health, 262 AD2d 929

Martha I. House, a keyboard specialist at Richard H. Hutchings Psychiatric Center, suffered a work-related injury in December 1991. As a result she was frequently absent from work. The psychiatric center deemed these absences to be pursuant to workers’ compensation leave under Civil Service Law Section 71.

When the cumulative total of her Section 71 absences exceeded one year, the appointing authority elected to terminate her from her position. House was told that she could apply for reinstatement to her former position if she could demonstrate that she was medically fit.*

House submitted a note from her physician stating that she was medically fit. The Psychiatric Center referred her to a physician employed by the State's Employee Health Service for an evaluation. The EHS physician stated that House was “too symptomatic to return to work and perform the full duties of her position.” Based on the EHS physician's evaluation House was terminated from her position.

When House sued seeking reinstatement to her job and back pay a State Supreme Court decided that the Center had not given House “proper notice of the procedure for requesting a post-termination hearing, resulting in the denial of her due process right to an administrative appeal.”

Supreme Court remitted the matter for an administrative hearing on the issue of House’s medical condition and her ability to perform her job-related duties at the time of her termination. It declined, however, to order either House’s reinstatement or back salary at this point in the process.

Both House and the employer appealed. The Appellate Division ruled although House was entitled to a post-termination hearing, until that administrative remedy has been exhausted, a resolution of her other demands would be premature.

The Appellate Division said that once it has been determined by the appointing authority’s physician that an employee is unfit to serve, he or she cannot be restored to employment until there is a finding that the employee is medically fit to perform the duties of the position.

Thus, the Supreme Court’s judgment remitting the matter for an administrative hearing to develop the record regarding petitioner’s medical fitness was appropriate.

N.B. This decision suggests that the due process procedures available to an individual on leave pursuant to Section 71 have been confused with the administrative procedures required to be followed in the event the appointing authority wishes to place the individual on involuntary leave pursuant to Section 72 of the Civil Service Law, i.e., absence due to an injury or disease that is not job-related. Further, if the appointing authority subsequently elects to terminate the employee after he or she has been continuously absent from his or her position for one year or longer pursuant to Section 72, it may due so in accordance with the provisions set out in Section 73 of the Civil Service Law.

Insofar as Section 71 leave is concerned, the appointing authority has the discretion, but is not required, to terminate an employee on Section 71 leave once the individual has been absent from work due to the underlying injury or disease for a cumulative period of at least one year. Presumably the termination is effected while the individual is actually absent from work and on leave pursuant to Section 71.

Section 71 then provides, in pertinent part, that in the event an employee is terminated pursuant to Section 71 of the Civil Service Law "Such employee may, within one year after the termination of such disability, make application to the civil service department or municipal commission having jurisdiction over the position last held by such employee for a medical examination to be conducted by a medical officer selected for that purpose by such department or commission."

Understandably, it is the individual's, rather than the employer's responsibilty to make such an application, as only the individual can determine if his or her disability is no longer an impediment to his or her performing the duties of his or her position.

Section 71 then provides that "If, upon such medical examination, such medical officer shall certify that such person is physically and mentally fit to perform the duties of his or her former position, he or she shall be reinstated to his or her former position, if vacant, or to a vacancy in a similar position or a position in a lower grade in the same occupational field, or to a vacant
position for which he or she was eligible for transfer."

If the medical officer does not certify the individual is physically and mentally fit to perform the duties of the position, presumably the individual could file an Article 78 petition challenging the determination.

In any event, if the individual is not determined to be qualified to return to his or her position, he or she may make additional applications for evaluation thereafter.

* In contrast, Section 72 of the Civil Service Law provides for leaves of absences required because of non-work related injuries or disease. An individual who has been absent for a consecutive one-year period may be terminated pursuant to Section 73 of the Civil Service Law.
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Adjusting a school's annual budget

Adjusting a school's annual budget
Leman v South Orangetown CSD, Decisions of the Commissioner of Education #14166

South Orangetown Central School District’s school superintendent position became vacant April 1, 1998. In preparing its budget for the 1998-99 school year, the district included an appropriation of $131,885 for the superintendent’s salary line as the amount it expected would be required to employ a new superintendent.

The district later entered into a contract with its new superintendent, Eileen Gress, that provided for an annual salary of $142,000 plus benefits. The total amount of Gress’ compensation was disclosed as required by Section 1716 of the Education Law. The district adopted a second, revised budget reflecting Gress’ compensation.

James Leman filed an appeal with the Commissioner of Education contending, among other things, that the board’s actions were improper as they involved “changes ... to aid the central administration portion of the budget.” He asked the Commissioner to void the district’s contract with Gress and to “direct the district to enter into new negotiations to fill the superintendent position.”

The Commissioner dismissed Leman’s appeal on the merits noting that the “actual figure for the superintendent’s salary and benefits was included in the proposed budget that was made available at the ... public hearing and presented to the voters....”

This, said the Commissioner, complied with the requirements set out in Section 1804.4 of the Education Law.

Section 1804.4 requires the board of a central school district to prepare and present a school budget at a budget hearing “at least 7 but not more than 14 days before the district meeting at which the budget vote will occur.” The record, said the Commissioner, showed that the district met this requirement.
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Applying for disability retirement

Applying for disability retirement
Grossman v McCall, App. Div., Third Dept., 262 AD2d 923, Motion for leave to appeal denied, 94 NY2d 765, Appeal on Constitutional grounds dismissed, 94 NY2d 796

Retirement and Social Security Law Section 62(aa)(2), allows a member of a public retirement system eligible for ordinary disability retirement to file an application for benefits if (1) the member is still in service at the time of the application or (2) the member applies within 90 days from the date of his or her discontinuance of service. The Appellate Division’s decision in the Grossman case illustrates that if an application for ordinary disability retirement is untimely, the application will be rejected -- even if there are extenuating circumstances.

The case arose after the Comptroller disapproved the application for ordinary disability retirement filed on behalf of Herbert E. Grossman by his wife. Grossman, a psychologist with the Bronx Developmental Services, sustained an injury at his home. He was terminated from his position effective July 27, 1990.

More than three years later his wife, Marsha Grossman, acting under a power of attorney, filed an application with the New York State Employees’ Retirement System [ERS] for ordinary disability retirement benefits. Although Mrs. Grossman proved that her husband “was mentally, psychiatrically and neurologically disabled after the accident,” the fact that the application was not filed within the time allowed by Section 62(aa)(2) proved critical. The Appellate Division said that Grossman’s illness did not toll the mandated filing period.

The court also rejected Mrs. Grossman’s contention that her husband had a property interest in the benefit and that the rejection of his application constituted a denial of a property right without due process. The Appellate Division said that filing of a timely application “constitutes a condition precedent to the ripening of any right to these benefits from which a claim of due process can arise.”

The decision also reports that ERS “received a request on [Grossman’s] behalf for an application for benefits by telephone on September 25, 1990 and that an application was sent to his home on October 3, 1990 -- when sufficient time existed for [Grossman] to have filed a timely application.” In addition, said the court, “the record reflects that [Grossman] did, in fact, have sufficient capacity to timely file [for], and therefore receive, social security disability benefits.”
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Employment contracts in public education

Employment contracts in public education
Brousseau v Shenendehowa CSD, Decisions of the Commissioner of Education #14193

The Shenendehowa Central School District and its Director of Finance, Susan M. Martin, signed an “employment agreement” for the period May 13, 1998 through June 30, 1999 setting out the terms and conditions of Martin’s employment with the district. The agreement also provided that it could be “renewed annually thereafter.”

Eugene Brousseau challenged the authority of the school board to enter into such an agreement with its Director of Finance. He asked Commissioner of Education Richard P. Mills to rescind the agreement. The district, in support of its action, argued that it had authority under Education Law Section 1709(33) “to enter into employment agreements establishing the terms of employment for its employees.”

The Commissioner commenced his analysis by commenting that “there are a limited number of provisions in the Education Law that expressly authorize a board of education to employ specified individuals” such as librarians, “qualified teachers,” an auditor and a superintendent.

However, said the Commissioner, the fact that there are no express provisions for the employment of individuals other than those specifically provided for by law “does not foreclose a board from employing individuals in such positions as are necessary to operate and maintain the school district, because the employment of such persons is a reasonable and necessary means for the board to fulfill its duty to superintend, manage, and control the affairs of the district pursuant to [Education Law] Section 1709(33).”

The Commissioner dismissed Brousseau’s appeal noting that:

1. The authority to contract with employees is implicit in the act of employing such individuals -- hiring an individual “itself creates a contract, whether express or implied, oral or written;”

2. A board of education, “as a public authority,” has a common-law right to contract with teachers and other necessary personnel;” and

3. A board of education may enter into contracts with its employees “to the extent the contract is not inconsistent with other statutory conditions,” citing Courtemanche v Enlarged City School District of Middletown, 686 F.Supp.2d 1025.

Therefore, the Shenendehowa board’s entering into a contract with Martin concerning the terms and conditions of her employment “is authorized as an implicit, reasonably necessary power of the board ... and in addition is authorized pursuant to the board’s common law right to contract.”
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