Public pension reform effort by the Illinois State Legislature ruled unconstitutional by the Supreme Court of Illinois

Public pension reform effort by the Illinois State Legislature ruled unconstitutional by the Supreme Court of Illinois

In re Pension Reform Litigation, [Doris Heaton, et al,] v Pat Quinn, Governor, State of Illinois, et al, Supreme Court of Illinois, 2015 IL Docket 118585,

In this action the plaintiff contended the Act amending Illinois Pension Code (40 ILCS 5/1-101 et seq.) by reducing retirement annuity benefits for individuals who first became members of four of Illinois’ five State-funded pension systems prior to January 1, 2011 was unconstitutional. Members of the retirement systems affected by Public Act 98-599 and groups representing those members brought five separate actions challenging the validity of the new law on the grounds that it violated numerous provisions of the Illinois Constitution of 1970, including Article XIII, section 5 (Ill. Const. 1970, Art. XIII, § 5), popularly known as the Pension Protection Clause.

The Circuit Court declared Public Act 98-599 to be unconstitutional in its entirety as a violation of the so-called Pension Protection Clause, and permanently enjoined its enforcement. The court rejected Illinois’ claim that “the Act could be upheld, notwithstanding its violation of the Pension Protection Clause, based on the State’s reserved sovereign powers"

As the Circuit Court’s ruling invalidated a statute of the State of Illinois, Illinois could appeal directly to the Illinois Supreme Court.

Illinois has five State-funded Retirement Systems [Systems] for public employees, which Systems provide traditional defined benefit plans under which members earn specific benefits based on their years of service, income and age. All five Systems are subject to the pension protection clause set out in Illinois’ State Constitution, which provides that “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired” [Ill. Const. 1970, art. XIII, § 5].

Concern over ongoing funding deficiencies and the attendant threat to the security of retirees in public pension systems eventually led directly to adoption of Article XIII, section 5, the Pension Protection Clause, when the new Constitution was adopted in 1970 inresponse to “the poor job governmental entities had done in meeting their pension obligations over time” whereby during the past twenty-two “the unfunded accrued liabilities of these pension plans in Illinois have increased from about $359,000,000 to almost $2,500,000,000, and the unfunded accrued liabilities are real and are not theoretical obligations based upon service already rendered.”

The advocates for adopting Article XIII, [see Record of Proceedings, Sixth Illinois Constitutional Convention 2925 (statements of Delegate Green)] argued that “Our language is that language that is in the New York Constitution which was adopted in 1938, really under a similar circumstance. In 1938 you were about at the end of the Depression, but there was a great consideration on the part of the New York General Assembly to really cut out some of the money that they were giving to the pension programs in New York; and it was for this reason that the New York Constitution adopted the language that we are suggesting. Since that time, the state of New York the pension funds for public employees have been fully funded, and so I think we have good reason to believe that this type of language will be a mandate to the General Assembly to do something which they have not previously done in some twenty-two years.”

After a scholarly analysis of the issues relevant to this case, the Supreme Court sustained the Circuit Court’s conclusion that Public Act 98-599 was void and unenforceable in its entirety, thereby holding that the Act was unconstitutional and sustained the Circuit Court’s “permanently enjoining its enforcement.”

The decision is posted on the Internet at:

http://www.illinoiscourts.gov/Opinions/SupremeCourt/2015/118585.pdf

New York State’s Human Rights Law protects unpaid interns in the public and private sectors from unlawful discrimination

New York State’s Human Rights Law protects unpaid interns in the public and private sectors from unlawful discrimination

Source: NYS Division of Human Rights

New York State Division of Human Rights Commissioner Helen Diane Foster has issued a press release reminding public and private sector employers in New York State that interns are protected from discrimination in the workplace under the New York State Human Rights Law. Foster indicated that “Unpaid interns are protected from harassment and other unlawful discrimination based on age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status. “
 
Commissioner Foster said that “The Human Rights Law defines “intern” as a person who performs work for an employer for the purpose of training under certain circumstances. Among them, that the employer is not committed to hire the person performing the work at the conclusion of the internship and that the person performing the work agrees with the employer that they are not entitled to wages for the work performed.  The work performed by the intern is to provide or supplement training that may enhance the intern’s "employability," provide experience for the intern’s benefit, be performed under close supervision of existing staff and not displace regular employees. If an individual is called an ‘intern’ but paid, that person will likely be considered a regular employee under the Human Rights Law.”
 
These provisions explicitly protect interns from sexual harassment, which under the Human Rights Law is considered a form of sex discrimination, as well as other forms of harassment
 
For their part, employers cannot discriminate against interns in selection, retention or terms, conditions and privileges of the internship or when advertising for the internship. It is also unlawful for employers to discriminate against pregnant interns or retaliate against an intern for opposing discriminatory behavior or for filing a complaint.
 
The Human Rights Law prohibits discrimination in employment, housing, credit, and other jurisdictions, based on age, race, national origin, sex, sexual orientation, marital status, disability, military status, and other specified classes.

Complaints with the Division must be filed within one year of the most recent incident of discrimination. For more information about the law and the work of the agency, please visit the Division of Human Rights’ website at www.dhr.ny.gov.

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending May 9, 2015

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending May 9, 2015

Click on text highlighted in color to access the full report

Delaware Co. – Vehicle Usage and Disposal

County officials did not perform cost-benefit analyses to support the after-hours locations of vehicles. None of the six departments reviewed adequately monitored vehicle usage.

http://www.osc.state.ny.us/localgov/audits/counties/2015/delawareco.pdf

Fulton County IDA-PILOT Agreements
Seven of the eight payment in lieu of taxes (PILOT) agreements that were active during the audit period did not have a recapture clause to recover benefits from the businesses if they did not meet their projected goals.

http://www.osc.state.ny.us/localgov/audits/ida/2015/fultonco.pdf

Village of Medina – Ambulance Service Billings
The village board did not adequately monitor ambulance billings and amounts collected. Additionally, the village did not send invoices to the three towns for unpaid ambulance bills and administrative billing fees. As a result, the village is owed more than $1 million for ambulance services.

http://www.osc.state.ny.us/localgov/audits/villages/2015/medina.pdf

Village of Nissequogue – Information Technology operations
Village officials have not designated an IT administrator who is independent of the financial recordkeeping. In addition, the board has not developed written policies and procedures, including those for acceptable computer use, password security, data backups and disaster recovery.

http://www.osc.state.ny.us/localgov/audits/villages/2015/nissequogue.pdf

City of Poughkeepsie – Audit Follow-up
Of the seven previous audit recommendations, three recommendations were fully implemented and three recommendations were partially implemented. One recommendation was not implemented. For example, the city has taken steps to reduce the deficit in the general fund and developed a comprehensive plan to reduce outstanding debt.

http://www.osc.state.ny.us/localgov/audits/cities/2015/poughkeepsiefollowup.pdf

Sir William Johnson VFC - Controls over financial activities
Neither the former nor the acting treasurer maintained accurate, complete and up-to-date accounting records. Additionally, neither treasurer consistently performed monthly bank reconciliations or provided the board with monthly and annual financial reports.

http://www.osc.state.ny.us/localgov/audits/firedists/2015/sirwilliamjohnson.pdf

Former Member of the State Assembly pleas guilty of State and Federal charges
State Comptroller Thomas P. DiNapoli, United States Attorney Richard S. Hartunian, New York State Attorney General Eric T. Schneiderman, and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, announced that former Member of the State Assembly William Scarborough, age 69, of Queens, New York, has agreed to enter guilty pleas on federal and state public charges stemming from public corruption investigations.

http://www.osc.state.ny.us/press/releases/may15/050715.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050715release

College Savings Sweepstakes announced
New York State Comptroller Thomas P. DiNapoli announced a $500 sweepstakes to help a lucky New Yorker plan ahead for college. Winnings from the sweepstakes will be put in a new or existing 529 College Savings Program Direct Plan account. The New York 529 College Savings Program, an investment tool designed to help families save for college, is overseen by DiNapoli’s office in partnership with the Higher Education Services Corp.

http://www.osc.state.ny.us/press/releases/may15/050515a.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050515arelease

Woman indicted for alleged stealing pension benefits payable to her deceased mother
New York State Comptroller Thomas DiNapoli and Attorney General Eric T. Schneiderman announced the unsealing of a one count indictment charging Linda Miller, 57, a resident of Englewood, N.J., with grand larceny in the second degree, a class C felony, in Albany County Court. Miller is alleged to have stolen over $162,000 in pension benefits from the New York State and Local Employees Retirement System, payable to her deceased mother, Josephine Miller.

http://www.osc.state.ny.us/press/releases/may15/050415.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050415release

New Jersey resident alleged to have stolen pension benefits payable to his deceased godfather

New York State Comptroller Thomas DiNapoli and Attorney General Eric T. Schneiderman announced the unsealing of a one count indictment before the Honorable Peter Lynch charging Terence Fitzpatrick, 43, a resident of Monmouth County, New Jersey, with the crime of Grand Larceny in the Second Degree, a class C felony, in Albany County Court. Fitzpatrick is alleged to have stolen over $78,000 in pension benefits from the New York State and Local Employees Retirement System, payable to his deceased godfather, Thomas Sullivan.

http://www.osc.state.ny.us/press/releases/may15/050415a.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050415arelease

Former Town HighwaySuperintendent found guilty of having stolen $65,000 from the Town
Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman announced that Roger Burlew, the former Highway Superintendent for the town of Erin who stole $65,000 from the town, has been sentenced to serve six months in jail and five years of probation. As part of Burlew’s sentence, he must also pay full restitution to the town of Erin. In the event that Burlew fails to pay restitution, he faces up to fifteen years in state prison.

http://www.osc.state.ny.us/press/releases/may15/050515.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050515release

Legislative spending for travel and per diems to reported quarterly
State Comptroller Thomas P. DiNapoli announced that his office will report on legislative spending for travel and per diems on a quarterly basis. DiNapoli also announced his office approved 2,178 contracts valued at $2.9 billion and approved more than 2.8 million payments worth more than $19.7 billion in March. His office also rejected 230 contracts and related transactions valued at $364.5 million and nearly 5,000 payments valued at more than $12.3 million due to fraud, waste or other improprieties.

http://www.osc.state.ny.us/press/releases/may15/050515b.htm?utm_source=weeklynews20150510&utm_medium=email&utm_campaign=050515brelease

Computerized monitoring system records deemed substantial evidence of guilt in a disciplinary proceeding

Computerized monitoring system records deemed substantial evidence of guilt in a disciplinary proceeding

2015 NY Slip Op 03919, Appellate Division, First Department

An employee [Petitioner] was found guilty of the disciplinary charges filed against him alleging that he failed to follow standard that resulted in an injury to an individual using an “out of service” building elevator. Both elevators in the building were “in inspection mode and not in service when the injury occurred”

The penalty imposed: termination of the Petitioner from his position.

Petitioner filed an Article 78 action challenging the appointing authority’s decision and the penalty imposed. The Appellate Division, citing Pell v Board of Educ. of Union Free School Dist. No. 1, 34 NY2d 222, sustained the appointing authority’s decision.

The court explained that substantial evidence in the record supported the appointing officer’s action. The evidence in the record included:

1. The applicable written standard safety measures to be undertaken during elevator repair and/or outages, i.e., the appropriate and necessary warning notice had not been posted by Petitioner

2. Evidence that both elevators being out of service at the same time warranted the standard safety measures of posting out-of-service notices at the elevator banks and securing the elevators so that the public could not use them;

3. Evidence that Petitioner failed to follow these standard procedures;

4. A computerized elevator monitoring system printout and testimony interpreting the data; and

5. Recorded 911 calls.

The Appellate Division explained that notwithstanding Petitioner's arguments to the contrary, the hearing record contained substantial evidence supporting the appointing authority’s decision finding Petitioner [1] guilty of the charges filed against him and [2] the penalty imposed.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_03919.htm

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Applying the doctrine of estoppel against a governmental entity

Applying the doctrine of estoppel against a governmental entity

2015 NY Slip Op 02551, Appellate Division, Third Department

In Owens v McGuire, 121 AD2d 292, the Appellate Division said that the doctrine of estoppel can only be applied “against a governmental entity if failure to apply the doctrine would defeat a right legally and rightfully obtained.”

In 2004 representatives of the New York State and Local Retirement System [System] told an individual [Member] that he was eligible to receive member service credit in the System for his employment with the Legal Aid Society of Westchester County from 1973 to 1975.

In January 2011, Member filed an application for a retirement allowance. However the System then determined that the Legal Aid Society was not a participating employer in the Retirement System and thus Member was not entitled to member service credit for the period during which he served with the Legal Aid Society. Member, seeking a reversal of the System’s determination, requested, and was given a hearing

In the course of the hearing a number of Retirement System employees testified that the Legal Aid Society was not a participating employer and the Hearing Officer denied Member's application for member service credit for the period during which he was employed by the Legal Aid Society. The Comptroller adopted the hearing officer’s ruling and Member appealed.

The Appellate Division sustained the Comptroller’s decision, explaining that a “petitioner has the burden of proof to establish his [or her] entitlement to retirement [member] service credit.” Here, noted the court, Member had testified that he had no evidence that the Legal Aid Society was ever a participating employer in the Retirement System.

Accordingly, said the court, inasmuch as the record reflects that Member was not employed by a participating employer during the period in question, the Comptroller’s denial of the retirement service credit was supported by substantial evidence.

Member had also contended that the System was estopped from denying the retirement member service credit based on the earlier misinformation provided to him by employees of the Retirement System. The court disagreed and rejected this branch of Member’s appeal.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_02551.htm