New York State's Banking and Insurance Departments to be consolidated into a new Department of Financial Services effective October 3, 2011

New York State's Banking and Insurance Departments to be consolidated into a new Department of Financial Services effective October 3, 2011

Source: Bond, Schoeneck & King, PLPC

As part of the approval of the budget bill on March 31, Governor Andrew M. Cuomo signed into law Chapter 62 of the Laws of 2011 which consolidates the Banking Department and the Insurance Department into a new Department of Financial Services*.

BSK reports that:

“The new law consolidates the Banking and Insurance Departments to establish the Department of Financial Services, which will have a Banking Division and an Insurance Division.

"There will be a Superintendent of Financial Services appointed by the Governor, by and with the consent of the Senate, and who shall hold office at the pleasure of the Governor. The Superintendent of Financial Services is granted enforcement and regulatory authority over financial products and services. The Superintendent of Financial Services shall appoint a Deputy Superintendent who shall be the head of the Banking Division and a Deputy Superintendent who shall be the head of the Insurance Division.

"The Superintendent of Financial Services may remove at will any Deputy Superintendent, except as may be otherwise provided by the New York Civil Service Law.”

* Article V,  §2 of the State's Constitution provides that "There shall be not more than twenty civil departments in the state government, including those referred to in this constitution. The legislature may by law change the names of the departments referred to in this constitution." §3 of Article V of the Constitution provides that." Subject to the limitations contained in this constitution, the legislature may from time to time assign by law new powers and functions to departments, officers, boards, commissions or executive offices of the governor, and increase, modify or diminish their powers and functions. Nothing contained in this article shall prevent the legislature from creating temporary commissions for special purposes or executive offices of the governor and from reducing the number of departments as provided for in this article, by consolidation or otherwise."

Bond, Schoeneck & King’s report concerning this change is posted on the Internet at:

http://www.bsk.com/archives/detail.cfm?archive=publication&ID=1286
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Eligibility for General Municipal Law §207-a benefits and for Workers’ Compensation Benefits are not linked and are to be determined on their own merits

Eligibility for General Municipal Law §207-a benefits and for Workers’ Compensation Benefits are not linked and are to be determined on their own merits
Matter of Davidson v LaGrange Fire District, 2011 NY Slip Op 02666, Appellate Division, Second Department

Deborah A. Davidson filed and Article 78 action “in the nature of mandamus,” seeking an order to compel the LaGrange Fire District to make a final determination regarding her application for medical benefits under General Municipal Law §207-a.

Davidson has sustained an injury on a fire call and the Fire District awarded her salary benefits pursuant to General Municipal Law §207-a. However, Davidson had also asked for certain medical benefits related to her work-connected injury that had been denied by the New York State Insurance Fund, the Fire Districts workers' compensation insurance carrier.

An administrative law judge for the Workers’ Compensation Board had ruled that the State Insurance Fund was liable for the full cost of the Davidson’s surgery but the Fund had filed an application seeking a review by the Workers’ Compensation Appeals Board.

Before a decision was issued by the Board, Davidson filed her CPLR Article 78 petition. The petition, among other things, sought an order in the nature of mandamus, in effect, to compel the respondents to issue a final determination as to the her request for medical benefits under General Municipal Law §207-a.

Supreme Court denied Davidson’s petition ruling that it was premature as she had not exhausted her administrative remedies before the New York State Workers' Compensation Board concerning her claims. The Appellate Division reversed the lower court’s ruling.

The Appellate Division explained that in the event an officer or agency fails or refuses to conduct a hearing or decide a particular matter where there was a mandatory, nondiscretionary duty to do so, mandamus is appropriate to compel performance of the required duty.

Davidson argued that although the Fire District had made a determination that she is entitled to receive benefits under General Municipal Law §207-a, had not made a determination regarding coverage under General Municipal Law §207-a for her medical expenses.

As a determination by the WCB regarding workers' compensation benefits, and a determination by a municipal employer regarding statutory benefits pursuant to General Municipal Law §207-a, are separate and distinct matters, which the Court of Appeals had made clear in Matter of Balcerak v County of Nassau (94 NY2d 253), “[a] municipality's obligation to pay wages and medical costs under General Municipal Law §207-a or § 207-c is in no way dependent upon any determination made by the WCB.”

In the words of the Appellate Division, quoting Balcerak, "the eligibility determinations for these distinct types of statutory benefits" must "stand and be resolved essentially on their own merits."*

Here, any workers' compensation remedies that may have been available to Davidson were separate from and independent of her request that Fire District provide coverage for the full cost of medial expenses pursuant to General Municipal Law §207-a. Accordingly, said the court, she was not required to exhaust her administrative remedies in the workers' compensation proceeding before pursuing this CPLR Article 78 proceeding against the Fire District.

The matter was remanded to Supreme Court for further proceedings on Davidson’s petition, “and a new determination thereafter.”

* In Balcerak the Court of Appeals held that a determination by the WCB that an injury is work-related does not, by operation of collateral estoppel, automatically entitle an injured employee to benefits under General Municipal Law §207-c [which applies to law enforcement personnel], which ruling presumably would be controlling in a GML §207-a case [which applies to firefighting personnel].

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02666.htm
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Where a collective bargaining agreement sets out a “board agreement to arbitrate,” the arbitrator, rather than the court, is to determine if the grievance is subject to arbitration

Where a collective bargaining agreement sets out a “board agreement to arbitrate,” the arbitrator, rather than the court, is to determine if the grievance is subject to arbitration

Matter of City of Binghamton v Binghamton Police Benevolent Assn., Inc., 2011 NY Slip Op 02109, Appellate Division, Third Department

When the Binghamton chief of police instituted new rules concerning the use of sick leave and subsequently counseled a police officer about an alleged pattern of suspected sick leave abuse and the need to provide a physician’s notes for all future sick leave absences, the Police Benevolent Association filed a grievance alleging a violation of the collective bargaining agreement between the Association and the City. In addition, the Association contended that the new policy constituted “departure from past practices.”

The grievance was denied by both the police chief and a representative of the mayor. The City, in response to the Association demand to submit the grievance to arbitration, filed a petition pursuant to Article 75 of the CPLR seeking a stay of arbitration. Supreme Court denied the petition and the City appealed.

The Appellate Division affirmed the Supreme Court’s determination, noting that the sole issue to be resolved was whether the parties to the CBA agreed to refer disputes in this specific area to arbitration.

In such situation, said the Appellate Division, courts "should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA."

As the parties' broad agreement to arbitrate provided that "[a]ny grievance or dispute which may arise between the parties involving the application, meaning, or interpretation of this [a]greement," the Appellate Division ruled that the subject matter of the dispute bears a reasonable relationship to the articulated contract provisions and, therefore, it is for an arbitrator to decide in the first instance whether the precise scope of those provisions covers the issues presented in the Association’s grievance.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02109.htm

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Ordering a correction officer to submit to a drug test, without more, does not violate the officer’s rights under the Constitution or §75 of the Civil Service Law

Ordering a correction officer to submit to a drug test, without more, does not violate the officer’s rights under the Constitution or §75 of the Civil Service Law

Department of Corrections v Johnson, OATH Index #1303/11

A New York City correction officer who tested positive for illegal drugs argued that the results were obtained in violation of her union and privacy rights. In essence, the officer challenged the legality of a second drug test administered to her after she tested positive in an earlier test on the grounds that the test violated the office’s right to union representation under §75 of the Civil Service Law and her right to be free from unreasonable searches under the Fourth Amendment.

OATH Administrative Law Judge John Spooner rejected the correction officer’s theory and found that the tests had been properly conducted.

Significantly, Judge Spooner found that the procedure did not involve questioning of the officer by a supervisor or anyone else. Rather Johnson was ordered by a captain to report to the toxicology unit and there was directed to provide a hair sample by a civilian staff member. Because the test did not involve questioning, no written notice of a right to union representation was required under Civil Service Law §75(2).

The ALJ recommended that Johnson’s employment be terminated.

The decision is posted on the Internet at:

http://archive.citylaw.org/oath/11_Cases/11-1303.pdf

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Disqualification of candidates for employment as police officers

Disqualification of candidates for employment as police officers

Needleman v Rockland County, 270 A.D.2d 423

The Rockland County Commissioner of Personnel disqualified Seth Needleman, David Oliver and Donna Russo for appointment as patrol officers in the Rockland County Sheriff’s Department. The three applicants sued in an effort to overturn the commissioner’s determination.*

Russo complained that the personnel commissioner had improperly disqualified her from appointment as a patrol officer.

The Appellate Division disagreed, commenting that the commissioner did not act irrationally or arbitrarily in relying upon “the evaluations of two independent psychologists, who used objective tests, to determine that [Russo] was not qualified for the position of patrol officer.”

The standards applied by the court in resolving Russo’s appeal:

1. An appointing authority has wide discretion in determining the fitness of candidates.

2. Such discretion is particularly broad in the hiring of persons for positions in law enforcement, to whom high standards may be applied.

3. The courts will not interfere with the discretion of the appointing authority to determine the qualifications of candidates unless the determination warrants judicial intervention because it is irrational and arbitrary.

Finding that Russo’s disqualification was not an abuse of discretion, the Appellate Division sustained the Supreme Court’s dismissal of her petition.

Section 50.4 of the Civil Service Law provides for the disqualification of applicants or appointees by the state civil service department or the municipal commission having jurisdiction. Among the reasons set out in Section 50.4 for disqualifying an applicant: the applicant lacks any of the established requirements for admission to the examination or for appointment to the position.**

However, in such cases the applicant must be provided with a pre-disqualification opportunity to object to his or proposed disqualification. In the words of Section 50.4:

No person shall be disqualified pursuant to this subdivision unless he [or she] has been given a written statement of the reasons therefore and afforded an opportunity to make an explanation and to submit facts in opposition to such disqualification.

Although a full and formal pre-disqualification hearing is not required, the individual must be advised of his or her right to file a written objection to the disqualification and given a reasonable opportunity to submit the objection to the municipal commission or the state department.

Further, as a general rule, only the responsible municipal civil service commission, or in the case of employment by the State, the State Department of Civil Service may disqualify an applicant for employment in the public service.

Typically, the appointing authority does not have any independent authority to disqualify an individual in contrast to declining to appoint an individual certified for permanent appointment to a position in the competitive class consistent with the so-called Rule of Three [Section 61.1, Civil Service Law.***
 

However, the appointing authority may request a municipal commission or the State Department of Civil Service to initiate action that could lead to the disqualification of the applicant by the commission or by the State Department of Civil Service.

* The court dismissed both Needleman’s and Oliver’s appeals as abandoned and only considered Russo’s challenge her disqualification.

** Section 50.4 permits the disqualification of an applicant or an appointee (a) who is found to lack any of the established requirements for admission to the examination or for appointment to the position for which he applies; or (b) who is found to have a disability which renders him or her unfit to perform in a reasonable manner the duties of the position in which he or she seeks employment, or which may reasonably be expected to render him or her unfit to continue to perform in a reasonable manner the duties of such position; or (d) who has been guilty of a crime; or (e) who has been dismissed from a permanent position in the public service upon stated written charges of incompetency or misconduct, after an opportunity to answer such charges in writing, or who has resigned from, or whose service has otherwise been terminated in, a permanent or temporary position in the public service, where it is found after appropriate investigation or inquiry that such resignation or termination resulted from his incompetency or misconduct, provided, that in cases of dismissal, resignation or termination after written charges of incompetency, the examination or certification in question be for a position that requires the performance of a duty or duties which are the same as or similar to the duty or duties of the position from which the applicant has been dismissed, resigned or terminated on account of incompetency; or (f) who has intentionally made a false statement of any material fact in his application; or (g) who has practiced, or attempted to practice, any deception or fraud in his application, in his examination, or in securing his eligibility or appointment; or (h) who has been dismissed from private employments because of habitually poor performance.

*** Section 61.1, in pertinent part, provides: Appointment and promotion. 1. Appointment or promotion from eligible lists. Appointment or promotion from an eligible list to a position in the competitive class shall be made by the selection of one of the three persons certified by the appropriate civil service commission as standing highest on such eligible list who are willing to accept such appointment or promotion.
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