Settlement agreements

Settlement agreements

McLean v Village of Sleepy Hollow, 166 F. Supp. 2d 898

What can an individual do if the terms of a settlement agreement between the employee and the employer fail to provide the benefit or result expected by the employee? In the absence showing that agreement to the settlement was the result of some fraud on the part of the employer, very little, as the McLean decision by a federal district court judge demonstrates.

Gary McLean was a part-time Buildings Code Enforcement Officer in the Village of Sleepy Hollow. He was also employed full time in another position and in view of this, he was permitted to set his own work schedule. McLean was terminated from his position following the election of a new mayor. He sued in federal district court, contending that he had been fired in retaliation for his vocal support of the previous administration.

The Village and McLean settle the case. McLean was to be reinstated with back pay and his attorneys' fees paid -- all the relief to which he would have been entitled had he won his lawsuit. Settlement documents were signed and the Court “so ordered” the Stipulation and Order of Settlement.

The settlement included the following provision:

“IT IS FURTHER AGREED that the plaintiff will be re-employed by the Village of Sleepy Hollow at the annual salary of $10,000 per annum as a part-time Code Enforcement Officer subject to all terms and conditions of employment attendant to that position.”

McLean was told that he could return to work by letter dated June 14, 2000. Prior to this date, however, the Mayor endorsed a recommendation that Building Code Inspectors be required to work between the hours of 9 a.m. and 12 p.m. Mondays through Fridays. As McLean's full time job required that he be at work 7:30 a.m. and 3:30 p.m., he was unable to meet the Village's new work schedule set for his position. The possibility of a new policy changing the work hours of his job was not mentioned to McLean during the settlement negotiations.

Although the Village offered McLean the option of working any three successive hours between 8:30 AM and 4:30 PM on weekdays, this would not solve his problem and he did not return to work as contemplated by the settlement. The Village subsequently filed disciplinary charges against McLean for failure to return to work “as scheduled.” The hearing officer ruled that the Village had acted within its authority when it changed McLean's work schedule and recommended that McLean be dismissed from his position because he failed to report for work.

The Village Board adopted the hearing officer's findings and recommendations and terminated McLean. McLean filed an Article 78 in state supreme court challenging the Village's action. He also asked the federal district court to enforce the terms of the settlement order.

McLean's argument: he would never have settled the case if he had known that he would have to give up his full-time job in order to go back to work as a Building Code Examiner. He contended that the use of the phrase “subject to all the terms and conditions of employment attendant to that position” in the Stipulation and Order means that the Village had to reemploy him on the terms that were in effect at the time he agreed to settle the case.

The district court said that although the “situation is extremely unfortunate” and McLean did not get what he thought he was entitled to under the settlement to which he agreed, it agreed with the Village that his motion must be denied.

Although it is clear that the court has subject matter jurisdiction to enforce the settlement, “subject matter jurisdiction was only the first hurdle to adjudication” in this case. The federal judge pointed out that McLean participated in a civil service disciplinary hearing, where he litigated and lost the issue of the Village's right to dismiss him notwithstanding the terms set out in the settlement agreement.

According to the ruling, whether the hearing officer's finding against McLean bars his obtaining a different interpretation of the meaning of the relevant language in the settlement Stipulation in federal court is a complicated question. While any decision by the New York State Supreme Court in the Article 78 proceeding would be entitled to preclusive effect under the Full Faith & Credit Clause, regardless of whether the Supreme Court ruled on questions of fact or of law, here there is only the administrative determination. Is an administrative hearing officer's unreviewed findings entitled to preclusive effect under the circumstances?

According to the ruling, this depends on whether the challenged elements constitute findings of fact, where preclusive effect is accorded, or findings of law.

The judge said that he did not have to decide if there was any “preclusionary effect” with respect administrative findings of law. Instead the court held that even if McLean could relitigate the meaning of the settlement agreement, he agreed “with the conclusions of the hearing officer.”

McLean conceded that the Village had the right to set the terms and conditions of employment, including the work schedule, of its employees. In the words of the court:

The Village is of course free to waive its rights in this regard, but any such waiver must be apparent from the face of the contract between McLean and Sleepy Hollow. The terms of the Stipulation and Order are artless (at least from McLean's perspective), but the relevant sentence is not ambiguous and cannot be read as a waiver by the Village of its right to alter the terms and conditions of its employees' jobs. The Stipulation does not require the Village to maintain the terms and conditions of McLean's employment as they were at the time the settlement was negotiated. It says only that McLean will be reemployed on the terms and conditions that are “attendant to his position.” While the words “from time to time” do not appear after the word “position,” they do not have to, because the usual rule is that job terms can be changed. McLean's reading of the Stipulation, not the Village's, is the one that departs from the usual rule; thus McLean's reading cannot be adopted unless it is clearly spelled out in the contract. It is not. End of discussion.

This, said the court, leads to a harsh result. However, the fact that McLean and his counsel assumed that everything would go back to the way it was, -- i.e., “that they subjectively intended the settlement would restore the status quo ante” -- is insufficient to bind the Village when that subjective intention is not clear from the objective manifestation of McLean's intent - the words of the Stipulation and Order.

Imprudent action bars accidental disability benefit

Imprudent action bars accidental disability benefit

Sullivan-Dorsey v NYC Police Pension Fund, 288 AD2d 131

The Board of Trustees of the New York City Police Pension Fund rejected the application for accidental disability benefits filed by Laura Sullivan-Dorsey, a New York City police officer. Sullivan-Dorsey appealed, contending that she was injured in the line of duty. She claimed that she was entitled to such disability benefits as a result of her falling from a building ledge while at work.

According to the decision, Sullivan-Dorsey was injured when she fell from a second-story window ledge while attempting to gain access to an adjoining office at the Queens Narcotic District Office.

Sustaining the Board's decision denying her application for accidental disability benefits, the Appellate Division said that Sullivan-Dorsey's injury was not the result of an “accident” within the meaning of City of New York Administrative Code Section 13-252 ... but of her own conscious and highly imprudent decision to attempt to gain entry to an office by means of a window ledge.

Jury’s decision in favor of plaintiff based on speculation rather than logical inference based on the evidence vacated

Jury’s decision in favor of plaintiff based on speculation rather than logical inference based on the evidence vacated
Miller v Nassau County Civ. Serv. Commission, 2011 NY Slip Op 05032, Appellate Division, Second Department

Roberta Miller, claiming that she was laid off in bad faith, sued the Nassau Civil Service Commission and others seeking reinstatement to her former position and back pay.

Although the jury ruled in her favor, Supreme Court set aside the jury’s decision as contrary to the weight of the evidence and directed that a new trial be held.

Nassau appealed, contending that Supreme Court should have dismissed the action against it “as a matter of law.”

The Appellate Division agreed, holding that Supreme Court should have granted Nassau’s motion. The court said that “A finding by the jury that [Miller] was singled out for layoff due to her political affiliation could only have been reached by the jury based upon speculation, rather than logical inferences drawn from the evidence.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_05032.htm

Reassignment pending disciplinary action

Reassignment pending disciplinary action

Gray v Crew, 267 AD2d 98

Prior to the filing of disciplinary charges against Dr. Simpson Gray, the New York City Community Superintendent advised Gray of the charges and “the nature of the complaints against him.” The Superintendent also told Dr. Gray that he would be transferred to the “district office” and reassigned to perform administrative duties pending the determination of the charges to be filed against him.

Gray challenged the transfer and reassignment to administrative duties but a State Supreme Court justice rejected his petition to rescind the superintendent’s decision. The Appellate Division, First Department, sustained the lower court’s dismissal of Gray’s petition.

The relevant law in this situation: subdivisions 7(c) and 8 of Section 2590-j of the Education Law. Subdivision 7(c) requires the community superintendent, “in advance of the filing of charges and specification,” to inform the teacher or administrator and the community board of “the nature of the complaint.” The court said that the community superintendent had complied with this requirement.

The court also noted that Subdivision 8 authorizes the community superintendent to transfer teachers and supervisors within the district without their consent for a number of reasons including “disciplinary action pursuant to subdivision 7....”

The Appellate Division said that “[c]ontrary to [Gray’s] claims” there were no procedural violations and the community superintendent “properly exercised” discretionary authority when Gray was transferred to the District Office pending the determination of disciplinary charges then pending against him.

The court also concluded held that Gray’s right to due process was not violated “since the discretionary transfer to which [Gray] was subject does not implicate due process concerns.”

Gray also argued that the reassignment caused him “irreparable financial or professional harm attributable to the Superintendent’s action.” The Appellate Division disagreed, pointing out “the transfer did not entail any reduction in [Gray’s] pay, and [Gray’s] lawsuit provides the basis for recovery of damages, if any.

The Appellate Division dismissed Gray appeal, setting out the following three reasons for its ruling:

1. Gray failed to show his probability of success on the merits;

2. Gray failed to prove any danger that he would suffer irreparable injury in the absence of the requested relief; and

3. Gray did not demonstrate that the equities balanced in his favor.

Determining the amount of an award by the Division of Human Rights following its finding that an employee suffered discriminatory retaliation

Determining the amount of an award by the Division of Human Rights following its finding that an employee suffered discriminatory retaliation

Matter of Roy C. Bell v New York State Div. of Human Rights, 36 AD3d 1129

Roy Bell was a probationary elementary school physical education teacher employed by the New Paltz Central School District. Denied tenure, Bell filed a complaint with the State Division of Human Rights alleging that he was sexually harassed by his supervisor and was shortly thereafter denied tenure in retaliation for making a complaint to his union representative concerning the matter.

The Commissioner of Human Rights dismissed the sexual harassment charge but sustained the charge that the District had unlawfully retaliated against Bell for complaining to the union by denying him tenure.

The Commissioner awarded Bell $171,491, less withholdings and deductions for federal, state and local income taxes, as damages for back pay for the period between 1990 through 1998. The Commissioner also awarded Bell $25,000 in compensatory damages

Bell appealed the award, contending that the award of back pay was insufficient because, among other things, it failed to include certain stipends that he would have earned had his employment continued.

In reviewing the award, the Appellate Division held that:

● Based on the evidence, there was no reasonable basis to conclude that Bell would not have continued coaching for additional compensation had his employment not ended and, as such, the back pay award must be recalculated to reflect those additional coaching stipends.

● The Commissioner should not direct the District withhold deductions for federal, state and local income taxes as federal courts have held that an employer should not be permitted to pay less in a back pay award simply by deducting the taxes it assumes that the employee will owe on the award, because that would give “a benefit it has not earned [to the employer, who] had the entire use of the money during the litigation” citing Curl v Reavis, 608 F Supp 1265. However, Bell would remain personally responsible for his tax liability for those years, taking into account all applicable allowances or deductions.

● The Commissioner took all relevant factors into account, including the financial difficulties that petitioner experienced upon separation from his employment, and rendered an award “reasonably related to the discriminatory conduct” that the agency found to exist.

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2007/2007_00367.htm