Arbitration award held to be “irrational and defies common sense” for a second time remanded to a different arbitrator

Arbitration award held to be “irrational and defies common sense” for a second time remanded to a different arbitrator

Social Servs. Employees Union Local 371 v City of New York Admin. for Children's Servs., 2012 NY Slip Op 07403, Appellate Division, First Department

A Child Protection Specialist Supervisor II with the New York City Administration for Children's Services (ACS), pleaded guilty to grand larceny in the fourth degree, for filing false income tax returns using confidential ACS client information to fraudulently claim entitlement to state and local tax credits.

This matter was ultimately assigned to disciplinary arbitrator Rose F. Jacobs, who imposed a penalty of suspension, after which employee was to be restored to his former position.

On appeal of the lower court's confirmance, the Appellate Division vacated the arbitrator's award as "irrational and defies common sense" because "[r]einstated to the position of ACS supervisor, [the employee] again would have access to the ACS database from which he extracted the information he used to perpetrate his crime."*

The court remanded the matter to the arbitrator for her reconsideration of the penalty to be imposed. Notwithstanding the clear directive by the Appellate Division not to do so, the arbitrator again restored employee to his former position.

Supreme Court denied Local 371’s CPLR 7510 petition to confirm the second award of the arbitrator reinstating the employee to his former position and granted the City’s cross petition to vacate the award insofar as it orders the reinstatement of the employee.

Local 371 appealed and the Appellate Division unanimously agreed with Supreme Court's ruling. It then remanded the matter to a different arbitrator for reconsideration of the appropriate penalty explaining that it found, “once again and for the same reasons, that the arbitrator's award is irrational and defies common sense,” citing City School District of the City of New York v Campbell, 20 AD3s 313.

Accordingly, the Appellate Division, approving Supreme Court’s “vacated the award reinstating the grievant,” said that it was remanding the matter to a different arbitrator only for reconsideration of the appropriate penalty.

* See 56 AD3d 322, 322 [1st Dept 2008], lv dismissed 12 NY3d 867.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07403.htm

Claims for certain health insurance benefits and the liquidation of sick leave credits upon retirement rejected

Claims for certain health insurance benefits and the liquidation of sick leave credits upon retirement rejected

Decision 1. Suttlehan v Town of New Windsor, 2012 NY Slip Op 07292, Appellate Division, Second Department [re: Health Insurance]

Decision 2. Suttlehan v Town of New Windsor, 2012 NY Slip Op 07293, Appellate Division, Second Department [re: Sick Leave Credits]

Town of New Windsor Town Justice Donald J. Suttlehan sued the Town, contending that it was in breach of contracts when it (1) eliminated his alleged entitlement, upon his retirement, to fully paid lifetime health care benefits for himself and his spouse [Decision 1] and (2) failing to pay him for his unused sick-leave credits upon his retirement [Decision 2].

On January 7, 2009, the Town adopted resolutions prospectively awarding Justice Suttlehan [a] “fully paid lifetime medical benefits for himself and his spouse” upon his retirement and [b] granted certain post-retirement health-care benefits to elected officials with eight years or more of service. On May 6, 2009 the Town adopted a resolution revoking its January 7, 2009 action with respect to providing “lifetime health care benefits” and Town modified its earlier “unused sick-leave” resolution in accordance with a new schedule.

Justice Suttlehan retired in July 2009. He then filed petitions in Supreme Court challenging the Town’s actions that he alleged truncated certain benefits to which he claimed he was entitled upon his retirement..

With respect to his claim to “lifetime medical benefits,” Justice Suttlehan alleged “breach of contract and promissory estoppel….” He argued that, among other things, that the Town’s January 7, 2009 resolution imposed a contractual obligation upon the Town to provide him with lifetime medical benefits or, in the alternative, that, by adopting the resolution, the Town became obligated to provide him with those benefits under the theory of promissory estoppel.

The Appellate Division sustained the Supreme Court’s dismissal of Justice Suttlehan’s petition, holding that the Town had met its “prima facie burden of establishing that [it was] not obligated to provide lifetime medical benefits to the plaintiff and his spouse, and the plaintiff failed to raise a triable issue of fact in opposition.”

The Appellate Division said the resolution dated May 6, 2009, which revised Justice Suttlehan’s health-care benefits only with respect to coverage for claims made, or to be made, subsequent to his separation from Town employment, was not discriminatory as it was applicable to various elected officials -- the Town Supervisor, Town Clerk, Superintendent of Highways, Receiver of Taxes, Town Justices, and members of the Town Board -- as well as to the Town’s judiciary.

Rejecting Justice Suttlehan’s argument that the resolution violated his rights pursuant to the separation of powers doctrine or the compensation clause of the New York Constitution, the Appellate Division noted that the resolution addressed the prospective reduction of a municipal official's health benefits only after his or her retirement, not the reduction in the salary or benefits of a justice during his or her term in office.

In any event, said the Appellate Division, "[a] municipal resolution is, in general, a unilateral action that is temporary in nature and, thus, it does not create any vested contractual rights," citing Aeneas McDonald Police Benevolent Assn. v City of Geneva, 92 NY2d 326.

As to Justice Suttlehan’s cause of action to recover damages for breach of contract with respect to the liquidation of his unused sick-leave credits, Supreme Court held that he was entitled to payment for 397 unused sick days, The Town appealed the court’s decision.

The Appellate Division vacated the Supreme Court’s ruling, holding that "In general, a public employee whose employment has terminated may not recover the monetary value of unused . . . sick time in the absence of statutory or contractual authority."

The Town, said the court, had met its prima facieburden of showing its entitlement to judgment as a matter of law by demonstrating that there was no statutory or contractual authority for the relief sought by Justice Suttlehan and Supreme Court should have dismissed the Justice’s cause of action to recover damages for breach of contract with regard payment for his unused sick-leave credits.

The “health insurance” decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07292.htm

The “sick leave” decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07293.htm

Recommended penalty for firefighter who tested positive for cocaine: termination in a random drug test

Recommended penalty for firefighter who tested positive for cocaine: termination in a random drug test

OATH Index #1350/12

A firefighter who tested positive for cocaine in a random workplace drug test failed to demonstrate that he consumed the cocaine unknowingly.

OATH Administrative Law Judge Tynia D. Richard did not find the firefighter’s explanation – a supposition that three strange women had surreptitiously drugged him while they drank together on a ski vacation in Lake Placid – to be credible.

The firefighter’s testimony concerning injuries that he suffered before and after the positive drug test in an effort to mitigate the proposed penalty failed to persuade the Administrative Law Judge. In the words of Judge Richard: [The Department] seeks [the firefighter’s] termination, citing the Department’s zero-tolerance policy. [The firefighter] seeks to mitigate on the basis of injuries he sustained while working as a firefighter, including some that occurred after his positive drug test while working for the Department on light duty. I did not find such mitigation.”

ALJ Richard recommended termination of his employment.

The decision is posted on the Internet at:

http://archive.citylaw.org/oath/12_Cases/12-1350.pdf

Challenges to the validity of the appointment of hearing officer, consideration of hearsay evidence and allegations of the denial due process

Challenges to the validity of the appointment of hearing officer, consideration of hearsay evidence and allegations of the denial due process
McKenzie v Board of Educ. of the City Sch. Dist. of Albany, 2012 NY Slip Op 07258, Appellate Division, Third Department

The City School District of Albany filed disciplinary charges against one of employees pursuant to §75 of the Civil Service Law alleging that the employee was guilty of "conduct unbecoming a [s]chool [d]istrict employee and misconduct."

The employee was advised of the identity of the Hearing Officer who was appointed to preside over the §75 disciplinary hearing in writing and a disciplinary hearing was conducted by the designated Hearing Officer..

The Hearing Officer found the individual guilty of the charges and specifications filed against him and recommended the individual be terminated from his position. The School District accepted the Hearing Officers findings and recommendation and the individual was terminated.

The employee appealed, contending that [1] the Hearing Officer's appointment was invalid because School District had failed to provide him with the official notice of the Hearing Officer's designation; [2] he was denied due process because he did not receive adequate notice of the charges that had been filed against him; and [3] hearsay evidence was admitted and considered by the Hearing Officer.

Addressing each of the individual’s arguments, the Appellate Division said:

1. Civil Service Law §75(2) requires that a hearing upon charges of misconduct "shall be held by the officer or body having the power to remove the person against whom such charges are preferred, or by a deputy or other person designated by such officer or body in writing for that purpose." The Appellate Division said that these requirements of Civil Service Law §75(2) are satisfied by a written record of such designation, such as . . . a letter to the hearing officer advising him or her that the official designation has taken place," citing. Matter of Arthur v Soares, 95 AD3d 1619.

The court explained that such a letter, along with other exhibits, including the School District’s resolution appointing the Hearing Officer, constituted a written record sufficiently documenting the validity of the Hearing Officer's appointment and satisfied the relevant provisions of Civil Service Law §75(2).

2. As to the individual’s claim that he was denied due process, the Appellate Division said that “Due process requires that ‘a notice of charges must reasonably apprise the accused of the claim being made so that an adequate defense may be mounted,’ and any disciplinary determination must address the accusations as set forth in this statement of charges.” 

The court said that this requirement was satisfied by the written notice charging the individual with misconduct, which stated that the allegations were based on circumstances that resulted in his arrest….” and the seizure by the police of crack cocaine from his person at the time of his arrest.*

3. The court found that the School District’s determination that the individual was guilty of misconduct was supported by substantial evidence and the Appellate Division, citing James v Hoosick Falls Central School District, 93 AD3d at 1133, said “[c]ontrary to petitioner's contention, hearsay evidence is admissible in such administrative proceedings."

Finding that the penalty imposed — termination — was not "so disproportionate to the offense . . . as to be shocking to one's sense of fairness," the Appellate Division dismissed the appeal commenting “other incidents of misconduct that occurred during the 10-year period he was employed by the school district, including numerous arrests … provided ample justification for the decision that he be terminated.

* The court also noted that although evidence was presented at the hearing regarding the individual's past criminal record and other employment issues, “that evidence was relevant to determine the penalty to be imposed if petitioner was found guilty of the charges filed against him.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07258.htm

The “continuing jurisdiction” of the arbitrator once a final determination is made is not automatic

The “continuing jurisdiction” of the arbitrator once a final determination is made is not automatic

New York State Dept. of Corr. Servs. (New York State Corr. Officers & Police Benevolent Assn., Inc.), 2012 NY Slip Op 07242, Appellate Division, Third Department

Upon the conclusion of a disciplinary arbitration the arbitrator found the employee guilty of certain charges and made an “interim award,” imposing a penalty of suspension without pay for 45 days and directing that the employee “otherwise be made whole.”

The final award mirrored the arbitrator's interim award but further provided that the arbitrator was "maintain[ing] jurisdiction . . . in the event that any dispute [arose] between the parties over the implementation of [the] [a]ward."

After the employee returned to work he filed a grievance alleging that the Department of Correctional Services*had not restored all of the back pay, time accruals and other benefits due him as directed by arbitration award.

Ultimately it appears that the employee’s union, the New York State Corr. Officers & Police Benevolent Assn. [NYSCOPBA] asked the arbitrator to reopen the arbitration to ascertain whether employee had been made whole pursuant to the terms of his award. A hearing date was scheduled, but the Department, contending that the arbitrator was powerless to, among other things, reopen, modify or explain the prior award, objected.

Notwithstanding the Department’s objection, the arbitrator conducted a hearing in which only NYSCOPBA participated and subsequently awarded the employee approximately $4,000 in vacation and holiday accruals.

The Department filed a petition pursuant to Article 75 of the Civil Practice Law and Rules seeking to vacate the award upon the ground that the arbitrator exceeded his power in reopening the proceeding. In rebuttal, NYSCOPBA argued that the Department had waived its right to seek vacatur of the award and cross-moved to confirm the award.

Supreme Court granted the Department’s application, vacating the award whereupon NYSCOPBA appealed contending that the Department “waived [its] opportunity to vacate the [challenged] arbitration award by, among other things, failing to challenge the arbitrator's assertion of continuing jurisdiction and/or participating in the [challenged] arbitration hearing."

The Appellate Division affirmed the Supreme Court’s ruling, rejecting NYSCOPBA’s argument that the Department had waived any of its rights. The court explained that the Department was “not immediately aggrieved by the arbitrator's purported retention of jurisdiction, the exercise of which admittedly was conditioned upon a future … entirely theoretical dispute between the parties as to the subsequent implementation of the award.”

Further, said the Appellate Division, while NYSCOPBA is correct that "a party that participates in the arbitration may not later seek to vacate the award by claiming it never agreed to arbitrate the dispute in the first place," here the Department expressly objected to the proposed hearing in writing, and it is undisputed that it did not attend in the hearing. Accordingly, the Appellate Division said that it was satisfied that the Department did not "actively participate [in the arbitration]."

As to merits of NYSCOPBA’s appeal, the court said that it is well settled “that an arbitrator has broad discretion to determine a dispute and fix a remedy, and that any contractual limitation on that discretion must be contained, either explicitly or incorporated by reference, in the arbitration clause itself.’

The Appellate Division said that the controlling provision of the collective bargaining agreement between the parties specifically provides that “[d]isciplinary arbitrators shall confine themselves to determinations of guilt or innocence and the appropriateness of proposed penalties . . . [and] shall neither add to, subtract from nor modify the provisions of [the CBA]." Further, said the court, the CBA agreement further provides that "[t]he disciplinary arbitrator's decision with respect to guilt[,] innocence [or] penalty . . . shall be final and binding upon the parties," which language “evidences a clear agreement by the parties to the CBA to ‘limit the discretion of disciplinary arbitrators.’"

While there may be circumstances where an arbitrator's retention of jurisdiction will be deemed permissible, in this instance the Appellate Division concluded that “such circumstances cannot — in light of the restrictive language of the underlying CBA — be said to exist here.”

Accordingly, court ruled that arbitrator's retention of jurisdiction in this matter "clearly exceed[ed] a specifically enumerated limitation [upon his] power” and the arbitrator's authority over the issues submitted to him ended once he rendered his decision.

* The Department of Correctional Services is now known as the Department of Corrections and Community Supervision.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07242.htm