A school district active employee and the district’s retired employee must be provided with identical health insurance benefits

A school district active employee and the district’s retired employee must be provided with identical health insurance benefits 
Anderson v Niagara Falls City School Dist., 2015 NY Slip Op 01098, Appellate Division, Fourth Department 

After the Niagara Falls City School District [Niagara Falls] transferred its retirees from a Blue Cross/Blue Shield Traditional Plan [Traditional Plan] to a Blue Cross/Blue Shield Forever Blue Medicare Plan [Forever Blue Plan] the retirees [Anderson] sued contending that the transfer resulted in a reduction in their health insurance benefits while Niagara Falls failed to effectuate a similar reduction in benefits for its active employees.

The relevant collective bargaining agreement [CBA] did not address what kind of health insurance plan would be available to retirees during retirement but prior to July 1, 2011, the Traditional Plan was available to Anderson. After June 30, 2011 Niagara Falls discontinued offering the Traditional Plan to retirees, including Anderson, and transferred its then retired former employees, Anderson included, to the Forever Blue Plan.

Anderson, a pre-July 1, 2011 retiree, alleged that Niagara Falls' actions were arbitrary, capricious, and unlawful, and in violation of Chapter 504 of the Laws of 2009, the so-called moratorium statute,, and sought to compel the School District to make the Traditional Plan available to Niagara Falls retirees once again.

Niagara Falls, on the other hand, contended that the coverage provided under the Forever Blue Plan was the "exact same coverage" as the Traditional Plan, with the exception of "one difference: there was “a minor increase in the co-pays under the new current plan." In order to compensate the retirees for that increase, Niagara Falls would deposit $600 per year into a medical reimbursement account for each retiree, including Anderson.

Supreme Court granted Anderson’s petition in its entirety and the Appellate Division affirmed the lower court’s ruling.

The Appellate Division explained that although Niagara Falls argued that the Anderson did not have a viable cause of action under the moratorium statute, relying on Kolbe v Tibbets, 22 NY3d 340, the Appellate Division rejected its contention indicating that the moratorium statute relied on by the school district “sets a minimum baseline or ‘floor’ for retiree health benefits, and that ‘floor’ is measured by the health insurance benefits received by the school district’s active employees.”

In other words, said the court, “the moratorium statute does not permit an employer to whom the statute applies to provide [its] retirees with lesser health insurance benefits than [its] active employees.”

Anderson alleged that health insurance benefits available to retirees have been diminished below the "floor" of the corresponding benefits for Niagara Falls’ active employees. This, said the court, is the “precise trigger” that permits Anderson to assert a cause of action under the moratorium statute.

Further, said the court, the issue in Kolbe was whether the employer could reduce or eliminate retiree benefits regardless of the language in the governing CBAs, so long as they made the same modification to active employees, and resolving that issue involved an interpretation of the contractual provisions of the governing CBAs. In rejecting the employer’s position in Kolbe, the Court of Appeals held that the moratorium statute was "not meant to eviscerate contractual obligations."

Here, however, Anderson did not allege that Niagara Falls had violated a provision of the CBA and, thus, no issue of contract interpretation is presented here. In Kolbe the petitioners were “attempting to vindicate the negotiated rights bestowed on them in the governing CBAs” while in this action Anderson is attempting to vindicate the rights bestowed on retirees under the moratorium statute.

As to the merits of the Anderson case, the Appellate Division said that Supreme Court “properly determined that [Niagara City School District’s] actions were arbitrary, capricious, and unlawful, and in violation of the moratorium statute, because there was a substantial reduction in health insurance benefits for the retirees or their dependents without a corresponding reduction of benefits for active employees.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_01098.htm

2015-2016 Proposed Executive Budget Highlights

2015-2016 Proposed Executive Budget Highlights

Source: Office of the State Comptroller

In a report released February 10, 2015 by State Comptroller Thomas P. DiNapoli, the Comptoller reports that proposed 2015-2016 Executive Budget holds down spending and boosts state reserves, according to. At the same time, the proposed budget increases potential out-year gaps and gives the Executive new latitude to move and spend money outside the formal appropriation process, including billions of dollars in financial settlements.

The General Fund is projected to end state fiscal year (SFY) 2014-15 with a closing balance of $7.8 billion. Excluding settlement revenues, the General Fund is expected to end the year with a balance of nearly $2.4 billion, $313 million higher than anticipated when the budget was enacted in March 2014.

The Division of the Budget (DOB) projects spending from State Operating Funds in the next fiscal year to total just under $94 billion, an increase of 1.7 percent, or $1.6 billion, from SFY 2014-15. Based on these projections, and after adjusting for prepayments and other proposed changes, DiNapoli estimates that spending would increase under the Executive’s proposal by 3.1 percent.

DOB projects budget surpluses in future years, resulting in part from unspecified actions needed to limit annual growth in State Operating Funds expenditures to 2 percent. Based on projections of revenues and disbursements by DOB, and excluding the unspecified savings in State Operating Funds spending, the Comptroller estimates annual out-year gaps averaging nearly $3.3 billion in SFY 2016-17 through SFY 2018-19. These potential gaps are more than one-third larger than estimates based on the SFY 2014-15 Executive Budget.

The Governor’s spending plan raises the allowable amount that can be deposited into the Rainy Day Reserve Fund and allocates $315 million for the Rainy Day Reserve Fund and the Tax Stabilization Reserve Fund. More robust reserves would improve the state’s ability to respond to fiscal emergencies, as DiNapoli has advocated. However, the budget also allows the state to more easily withdraw reserve money and commit it to other purposes.

DOB forecasts that state tax collections will strengthen in SFY 2015-16, with growth of $3.6 billion, or 5.1 percent, compared to expected growth of 1.7 percent in the current fiscal year. The projected increase results primarily from stronger economic growth and an expected rebound in PIT receipts.

The Executive Budget creates a new Capital Projects Fund which could receive a portion of the nearly $5.7 billion in financial settlements. The Executive has identified various projects to be supported by the fund, including transportation infrastructure, a $500 million broadband initiative and funding for farms and agriculture. However, the proposed budget legislation related to the Dedicated Infrastructure Investment Fund (DIIF) would allow the money to be used for virtually any purpose, including operational costs.

DiNapoli’s report notes that the Executive Budget reduces transparency, accountability and oversight in some areas. For example, the proposal lacks individual public school district funding estimates and includes measures to bypass existing statutory provisions that promote integrity in state procurement, including the elimination of competitive bidding, public notice requirements and State Comptroller review in certain instances. Other provisions would blur lines of functions and responsibilities of state agencies and public authorities, expand DOB’s authority to move funds among state agencies and authorities, and authorize expanded access to New Yorkers’ personal information among state agencies.  

The Executive Budget includes a proposal to authorize the use of backdoor borrowing by state public authorities for all or part of the purposes of the Smart Schools Bond Act approved by voters in November 2014. This proposal would allow up to $2 billion in debt to be issued without all of the controls for issuance, structure and retirement that apply to voter-approved G.O. bonds and could result in higher costs to taxpayers.

The report also finds the Executive Budget:

   Proposes to increase education aid by $1.1 billion, or 4.8 percent, but conditions any increase on legislative enactment of certain statutory changes involving teacher evaluations, governance of struggling schools and other matters;

   Projects overall Medicaid spending in New York, including federal funding and local government expenditures, will total more than $62 billion in SFY 2015-16, an increase of 5.6 percent;

    Increases total spending for state economic development programs by nearly 45 percent, primarily reflecting a $585 million increase in capital spending, to just over $2 billion;

   Increases new debt issuances, outstanding debt and annual debt service payments over the five-year Capital Plan period. Available debt capacity under the State’s statutory cap is now projected to reach a low point of $604 million at the end of SFY 2018-19;

   Proposes to reinstate and expand authorization of design-build and other alternative methods of procurement, after the expiration of the Infrastructure Investment Act in December 2014; and

   Proposes a public campaign finance system for elections to statewide offices and the Legislature, starting in 2018.  Funding would be authorized from a proposed new Campaign Finance Fund check-off program and the transfer of Abandoned Property revenue.

For a copy of the report visit: http://www.osc.state.ny.us/reports/budget/2015/review_of_executive_budget_2015.pdf

As chief fiscal officer for the state, the State Comptroller annually examines the Executive Budget proposal and the enacted budget. DiNapoli also issues monthly reports on the state’s cash position. 

Probationary employee terminated notwithstanding the dismissal of criminal charges

Probationary employee terminated notwithstanding the dismissal of criminal charges 
2015 NY Slip Op 00813, Appellate Division, First Department

Martin v Hearst Corporation, USCA, Second Circuit, Docket #13-3315 

Supreme Court denied the petition filed by an individual, a probationary employee, seeking to have the court annul employer's dismissing her from employment.

The court, noting that criminal charges filed against individual were dismissed, held that the termination of a probationary employee based on an arrest for criminal charges that were subsequently dismissed does not constitute bad faith

The Appellate Division unanimously affirmed the Supreme Court’s ruling, explaining that the individual had failed to demonstrate that employer's termination of her probationary employment was in bad faith.

The Appellate Division also commented that “the record reflects that [individual’s] job performance was considered sub-standard.”

In another action, Martin v Hearst Corporation, et al, USCA, Second Circuit, Docket #13-3315, the U.S. Circuit Court of Appeals, affirmed a federal district court judge’s dismissal of an action brought by an individual under color of Connecticut’s “Erasure Statute” in which she had alleged libel and other publication related claims based the publication of certain reports concerning her arrest .

Although the media reports were factually true when published, she contended that they became false and defamatory when the criminal charges brought against her were “nolled.*”

Under Connecticut’s Criminal Records Erasure Statute, [Conn. Gen. Stat. 54-142a], when charges against an individual are nolled or dismissed, that individual’s criminal records are erased and he or she is deemed to have never been arrested.

The Circuit Court of Appeals concluded “that the Erasure Statute does not render tortious historically accurate news accounts of an arrest” and affirmed the federal district court’s granting the media defendants' motion for summary judgment. 

* Nolle Prosequi -- a unilateral act by a prosecutor which ends the pending proceedings without an acquittal and without placing the defendant in jeopardy. 

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Recent findings and recommendations of OATH Administrative Law Judges

Recent findings and recommendations of OATH Administrative Law Judges

Source: New York City Office of Administrative Trials and Hearings

[Click on text highlighted in color  to access the full text of the determination]

Failure to return lost property to patient

Health & Hospitals Corp. (Henry J. Carter Specialty Hospital) v. Savain, OATH Index No. 217/15

Employee, a hospital institutional aide, was charged with failing to follow protocol for returning found property and with being intoxicated while on duty. Employee took possession of a patient's clock radio that was left behind during a patient move. Employee testified that she placed the radio on her cart for safekeeping, with the intent of giving it to her supervisor at the end of her shift, but that she was confronted by the patient's son before she could do so and she returned it to him. 

ALJ Alessandra F. Zorgniotti recommended dismissal of the charge finding that Employer did not prove that Employee was on notice of a rule or policy mandating the immediate report of lost property to a supervisor. Employee's decision to wait until the end of her shift to bring the radio to housekeeping was not so unreasonable as to be considered negligence. 

As for the intoxication charge, the son's claim that he smelled alcohol on Employee's breath when he walked alongside her was contradicted by surveillance video which showed Employee left the room first and the son followed several paces behind and testimony from Employee's supervisor, who did not smell alcohol. 

Dismissal of the charges recommended. 

Unauthorized absences

Health & Hospitals Corp. (Dr. Susan Smith McKinney Nursing & Rehabilitation Ctr.) v. Ellis, OATH Index No. 1710/14

Employee, a service aide, was charged with five individual absences without authorization, a long-term period of absence without authorization and failing to adhere to two directives to resolve her employment status. 

The charges were established by documentary evidence and the testimony of Employer's witnesses. 

Employee had been previously disciplined for similar wrongdoing and was aware of Employer's policies and procedures. 

ALJ Kara J. Miller recommended termination of Employee's employment.  

Placement on involuntary leave pursuant to §72 of the Civil Service Law

Human Resources Admin. v. M.O., OATH Index No. 173/15

Employer sought to place employee, a clerical associate, on an involuntary leave of absence under §72 of the Civil Service Law, alleging that she is mentally unfit to perform the duties of her position. Employer had directed Employee to undergo psychiatric evaluation after Employee continually exhibited inappropriate, disruptive, and aggressive behavior at work. 

The evaluating psychiatrist offered testimony and a report declaring that Employee suffered from a severe functional psychiatric disorder and that her behavior was incompatible with her work duties. Employee maintained that she was fit to work, submitting a one-paragraph letter from her treating psychiatrist. 

Following a hearing, ALJ Astrid B. Gloade found Employer's proof more persuasive and she recommended that Employee be placed on §72 disability leave.  

To learn of the disposition of the OATH ALJ’s recommendations by the referring agency, please contact OATH's calendar unit at 1-844-628-4692.

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Determining when the statute of limitations commences to run with respect to a “quasi-legislative” administrative determination

Determining when the statute of limitations commences to run with respect to a “quasi-legislative” administrative determination
Matter of School Adm'rs Assn. of N.Y. State v New York State Dept. of Civ. Serv., 2015 NY Slip Op 00676, Appellate Division, Third Department

On May 15, 2012, the New York State Department of Civil Service's Employee Benefits Division issued policy memorandum indicating the circumstances under which an employee of an agency participating in the New York State Health Insurance Program [NYSHIP] may decline health insurance enrollment in NYSHIP in exchange for a cash payment or other benefit, which policy was to take effect immediately.. 

Insofar as was relevant in this action, the policy provided that such an employee could “opt out” of NYSHIP coverage in exchange for a monetary payment only if he or she had health insurance coverage available under another employer-sponsored group other than NYSHIP. Significantly, the policy precluded an employee's receiving an opt-out payment if he or she had health insurance coverage as the dependent of a spouse having health insurance through NYSHIP. 

The Brentwood Union Free School District [Brentwood] was a NYSHIP participating employer. Although not contractually obligated to do so, Brentwood had offered a buyout program for a number of years that enabled its employees to decline NYSHIP coverage in exchange for a monetary payment representing 50% of the premium that the District otherwise would have paid to NYSHIP to provide health insurance coverage for such employee. With the promulgation of the May 15, 2012 policy Brentwood would discontinue the “opt-out” payments to its employees having dependent health insurance coverage under his or her spouse’s health insurance coverage through NYSHIP.

On March 4, 2013, the School Administrator’s Association of New York State commenced a combined CPLR Article 78/action for declaratory judgment on behalf of a number of its members employed by Brentwood affected by the May 15, 2012 policy. The Association asked the court, among other things, to declare the policy null and void and to enjoin Brentwood “from discontinuing its past practice of offering the original NYSHIP buyout program.” 

As to the “past-practice” issue involving the Brentwood employees, Supreme Court found that this claim fell within the exclusive jurisdiction of the Public Employment Relations Board and, therefore, dismissed this element of the action “for lack of subject matter jurisdiction.”

As to the Article 78 action, Supreme Court found that the four-month statute of limitations began to run on the effective date of the policy — May 15, 2012 — and, accordingly, dismissed the Association’s proceeding/action as untimely, since it had been fiiled more than four months after the effective date of the policy. The Association appealed the Supreme Court’s ruling with respect to the timeliness of its Article 78 action.

The Appellate Division, noting that the Association had attempted to mitigate the impact of the policy by filing an improper practices charge against Brentwood with the Public Employment Relations Board alleging it had unilaterally altering its buyout program without engaging in collective bargaining, affirmed the Supreme Court’s determination, explaining that this effort did not affect the finality of the Department of Civil Service's determination.

The parties agree that this combined CPLR Article 78 proceeding and action for declaratory judgment was governed by a four-month statute of limitations. Accordingly, said the court, both the statute and case law make clear that the statute of limitations period for a CPLR Article 78 proceeding begins to run when "the determination to be reviewed becomes final and binding upon the petitioner." The Appellate Division said that the administrative action "becomes 'final and binding' when two requirements are met: 

1. Completeness (finality) of the determination; and 

2. Exhaustion of administrative remedies. 

This event is measured by the administrative agency having reached “a definitive position on the issue” that first, allegedly inflicts actual, concrete injury and second, the injury inflicted may not be “significantly ameliorated by further administrative action or by steps available to the complaining party."

In this instance, said the court, the quasi-legislative determinations such as the one at issue here does not require actual notice of the challenged determination but rather the statute of limitations begins to run once the administrative agency's "definitive position on the issue [becomes] readily ascertainable" to the complaining party. The Appellate Division said that the Department of Civil Service had satisfied this notice requirement by, among other things:

1. Mailing copies to the chief executive officers of all participating agencies;

2. Mailing copies to any individual who had requested a copy via the participating agency "Courtesy List;" 

3. Posting the memorandum on a website for health benefit administrators (to which union representatives could request access); and

4. Discussing the memorandum at the NYSHIP participating agency regional meetings hosted by the Department of Civil Service in October 2012.

Under these circumstances, said the court, “we are of the view that [the Association’s] claims accrued — and the statute of limitations began to run — upon the effective date of the policy, i.e., May 15, 2012.”

Further, observed the court, even it “were to defer the triggering of the statute of limitations until the October 2012 [NYSHIP ]regional meetings, the instant proceeding and action — commenced in March 2013 — still would be time-barred.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_00676.htm

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