Selected reports and information issued by New York State's Comptroller Thomas P. DiNapoli issued during the week ending August 15, 2015

Selected reports and information issued by New York State's Comptroller Thomas P. DiNapoli issued during the week ending August 15, 2015

[Click on text highlighted in colorto access the full report]

Former Town Supervisor plead guilty to extortion and making false statements

Former Town of Halfmoon Supervisor Melinda Wormuth pled guilty to two felony counts charging her with extortion and making a false statement before Chief U.S. District Court Judge Gary L. Sharpe in federal court in Albany, announced by State Comptroller Thomas P. DiNapoli with United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation along with Attorney General Eric Schneiderman.

http://www.osc.state.ny.us/press/releases/aug15/081015a.htm?utm_source=weeklynews20150816&utm_medium=email&utm_campaign=081015arelease 

NYC Subway “on-time” performance deteriorating

Train delays have increased as the subway system’s on-time performance has steadily deteriorated and the Metropolitan Transportation Authority should do more to fix the underlying causes, many of which are controllable, according to an audit released by New York State Comptroller Thomas P. DiNapoli.

http://www.osc.state.ny.us/audits/allaudits/093015/14s56.pdf

NYS job growth in 2014 continued a four-year trend

New York reached its highest employment level ever of more than 9 million jobs in 2014, after adding 538,000 jobs since 2009, according to a report released by State Comptroller Thomas P. DiNapoli. The overall job growth in 2014 alone was 143,000 – the strongest growth since 2000 – and capped four years of steady gains.

http://www.osc.state.ny.us/reports/economic/employment_trends_nys_2015.pdf 

NYS Common Retirement Funds experienced a challenge during the first quarter of 2015
The New York State Common Retirement Fund’s overall return in the first quarter of the state fiscal year 2015-2016 was 0.52 percent for the three-month period ending June 30, 2015, with an estimated value of $182.5 billion, according to New York State Comptroller Thomas P. DiNapoli.

http://www.osc.state.ny.us/press/releases/aug15/081415.htm?utm_source=weeklynews20150816&utm_medium=email&utm_campaign=081415release

A court’s review of a decision of the Commissioner of Human Rights is not whether the court would have reached the same result but was the Commissioner's determination rational in light of the evidence presented

A court’s review of a decision of the Commissioner of Human Rights is not whether the court would have reached the same result but was the Commissioner's determination rational in light of the evidence presented
Rensselaer County Sheriff's Dept. v New York State Div. of Human Rights, 2015 NY Slip Op 06551, Appellate Division, Third Department

In this appeal to review a determination of the Commissioner of Human Rights [Commissioner] which, among other things, found Rensselaer County Sheriff’s Department [RCSD] guilty of an unlawful discriminatory practice based on gender, the Appellate Division said that when a court is reviewing a determination made by the Commissioner in a matter such as this one, the court’s purview is "extremely narrow" and must focus not on whether the court would have reached the same result as did the Commissioner, but instead on whether the Commissioner's determination was rational in light of the evidence presented.

An Administrative Law Judge, after holding a hearing, found that a woman employed [Employee] at the RCSD had shown that she was sexually harassed by male coworkers and recommended that the Department be ordered to pay the woman nearly $450,000 in economic damages and $300,000 in noneconomic damages. The Commissioner of Human Rights adjusted the amount of economic damages to approximately $315,000, but otherwise adopted the ALJ's recommendations in all pertinent respects.

RCSD appealed in an effort to have the court annul the Commissioner's final determination. 

The Appellate Division noted that "Where, as here, there is a finding of a hostile work environment as a result of sexual harassment, the evidence in the record must establish the pertinent elements, including proof that the discriminatory conduct occurred due to the complainant's gender."

Considering the evidence presented at the hearing, said the court, there is a rational basis for the determination that, but for Employee’s gender, she would not have suffered the harassment that she described and that such harassment altered the conditions of her employment so as to create an abusive work environment. Notably, said the court, the ALJ credited Employee’s testimony and the Appellate Division said that it would defer to that determination.

Relying on that credited testimony, the proof established that the persons harassing Employee were all male members of a group of friends and coworkers who were identified, as a group, by their gender.

The Appellate Division declined to reduce Employee's $300,000 award for noneconomic injuries, explaining that “[a]n award for noneconomic damages will be upheld where it is reasonably related to the wrongdoing, supported by substantial evidence and comparable to other awards for similar injuries.” Employee had testified that the male coworkers' harassment led to extensive psychological trauma that included "suicidal ideations" and required medication. Employee's psychiatrist confirmed such testimony and he testified that he had diagnosed Employee with post-traumatic stress disorder and major depressive disorder. The psychiatrist opined that the causes of such conditions were Employee’s frequent and recurring thoughts regarding the harassment that she suffered at the correctional facility.

Considering Employee's testimony and the medical proof elaborating on the severe effects that the discrimination had on her, the Appellate Division ruled that the award “is reasonably related to the wrongdoing, supported by substantial evidence and comparable to awards for similar injuries.”

Addressing another element in this appeal, the Appellate Division said that by its unambiguous terms, Workers' Compensation Law §29(1) grants a lien without any exception for when an award of damages has already been reduced in recognition of a workers' compensation award. However, said the court, it rejected “the notion that an award that would be subject to such a lien may be reduced at the outset, because such a scheme is inconsistent with Workers' Compensation Law §29(1). 

Accordingly, the Appellate Division found that the Commissioner erred as a matter of law by reducing Employee’s award for past lost wages by $88,200 and her award for future lost wages by $176,400 on the basis of workers' compensation benefits. 

Further, the court said it agreed with Employee that the damages should have properly reflected consideration of “the pension that she would have received absent the harassment,” given that any remedy should "make the victim whole for injuries suffered as a result of discriminatory employment practices," citing Beame v DeLeon, 87 NY2d 289. In Lamot v Gondek, 163 AD2d 678, the court said it had “unambiguously established” that such a remedy includes the consideration of "pension rights [that are] established with reasonable certainty" and ruled that the Commissioner's order that Employee “take steps to involve the Office of the State Comptroller and the New York State and Local Retirement System — presumably to have them provide an actual pension — was an abuse of discretion.” 

The court then remitted the matter for “the limited purpose of resolving the amount of damages that will make [Employee] whole to the extent that her pension has been diminished, in whole or in part."*

Finally, RCSD contended that Employee failed to mitigate damages relating to her pension to the extent that she failed to obtain a collateral offset in the form of disability retirement benefits. The court said that to the extent it is relevant here, RCSD and not Employee bore the burden of establishing its entitlement to a collateral offset* by clear and convincing evidence” that Employee was obligated to mitigate damages by obtaining a collateral offset and RCSD failed to meet its burden in that regard.

The Appellate Division then modified the Commissioner’s determination by (1) increasing the award for past lost wages from $107,558.51 to $195,758.51, (2) increasing the award for future lost wages from $208,837.02 to $385,237.02, and (3) remitting the matter to the New York State Division of Human Rights for a determination of damages related to Employee’s pension.

* The Appellate Division noted that in Weiss v New York State Human Rights Appeal Bd., 102 AD2d 471, the Weiss court had found that the “Commissioner erred in ordering [the] state employer to provide the promotion to a victim that the victim would have received absent age discrimination instead of providing a proper award of monetary damages.”

** A collateral source payment that particularly corresponds to a category of loss for which damages are awarded .

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_06551.htm

NYS Comptroller DiNapoli releases state audits

NYS Comptroller DiNapoli releases state audits

Source: Office of the State Comptroller

On August 13, 2015 New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued [Click on text highlighted in color to access the full report]:

Development Authority of North Country [DNAC]

Auditors determined that DANC officials have provided appropriate oversight for procurements and the loan programs, having established policies and procedures and maintained sufficient monitoring systems. However, auditors did identify areas where DANC could improve its operations, specifically in terms of procurement reporting and determining reasonable cost.

http://osc.state.ny.us/audits/allaudits/093015/15s3.pdf

NYS Energy Research and Development Authority [NYSERDA]

Auditors found that although NYSERDA has policies and procedures governing the contract award process, certain policies and procedures were not always followed for 19 of the 69 contracts reviewed. NYSERDA did not effectively monitor contract expiration dates to ensure that successor contracts were in place prior to the expiration of the previously existing contracts for similar or related work. NYSERDA also did not adequately document the justification for allocating projects (related to four contracts) to certain contractors when there were nine additional contractors pre-qualified for the same work.

http://osc.state.ny.us/audits/allaudits/093015/15s35.pdf

Office of Temporary and Disability Assistance [OTDA]

Auditors found the OTDA’s internal control system appropriately addresses all five components of internal control. As a result, the office has multiple mechanisms in place for implementing and evaluating the effectiveness of its internal control system.

http://osc.state.ny.us/audits/allaudits/093015/14s49.pdf

State Education Department [SED] – Summit Educational Resources

For the fiscal year ended June 30, 2013, auditors identified $28,176 in other than personal service costs that did not comply with SED’s requirements for reimbursement. The disallowances included $26,754 for consultant services and $1,422 in various other costs that were ineligible for reimbursement. Auditors also questioned another $34,357 in costs for consultant services and information technology procurements that were not obtained through competitive bidding practices.

http://osc.state.ny.us/audits/allaudits/093015/14s49.pdf

State Education Department [SED] – Clinical Associates of the Finger Lakes

Auditors identified $72,401 in costs that did not comply with SED’s requirements for reimbursement. The disallowances included $54,751 in various other-than-personal-service costs, such as property related costs and vehicle expenses, and $17,650 in personal service costs.

http://osc.state.ny.us/audits/allaudits/093015/14s61.pdf

State Education Department – Hear 2 Learn, PLLC

For the fiscal year ended June 30, 2013, Hear 2 Learn charged $20,851 in costs that did not comply with SED’s requirements for reimbursement. The disallowances included $10,957 in other than personal service costs and $9,894 in personal service and associated fringe benefit costs that were either non-reimbursable, incorrectly reported, or not properly documented.

http://osc.state.ny.us/audits/allaudits/093015/14s74.pdf

Tuition Assistance Program, State Financial Aid at Barnard College

Auditors determined that Barnard was overpaid $106,333 because school officials incorrectly certified students as eligible for state financial aid awards. Incorrect certifications include 11 students who received awards but had not met the good academic standing requirements and six students who did not meet the full-time requirements. Additional incorrect certifications include two students who had not met matriculation requirements and one student who had not demonstrated the required academic preparedness.

http://osc.state.ny.us/audits/allaudits/093015/15t1.pdf

An appeal to the Commissioner of Education is not the proper forum to adjudicate issues of constitutional law or the constitutionality of a statute or regulation

An appeal to the Commissioner of Education is not the proper forum to adjudicate issues of constitutional law or the constitutionality of a statute or regulation

Appeal of N.C. on behalf of her son, C.C., Decisions of the Commissioner of Education, Decision #16,805

Among the issues raised in an appeal challenging the decision of the New York City Board of Education [NYC DOE] that a student, C.C., was not entitled to an exemption from the immunization requirements of Public Health Law was N.C.’s allegation that her constitutional rights were violated. N.C. further alleged that “the process by which NYC DOE processed her religious exemption application [was] fraudulent and violated her right to due process.”

The Commissioner said that “an appeal to the Commissioner is not the proper forum to adjudicate novel issues of constitutional law or to challenge the constitutionality of a statute or regulation,” explaining that “[a] novel claim of constitutional dimension should properly be presented to a court of competent jurisdiction.”

Accordingly, the Commissioner declined to consider “such constitutional claims” but ultimately sustained N.C.’s appeal for other reasons.

Based on the record, the Commissioner concluded that the weight of the evidence supported the N.C.’s contentions that her opposition to the vaccine stems from sincerely held religious beliefs and “produced unrebutted evidence of a linkage to the only vaccine at issue.”

The Commissioner also found that NYC DOE failed to adequately explain its rejection of otherwise convincing evidence and admonished NYC DOE “to provide parents with appropriate written communications articulating the specific reasons for the denial of religious exemptions in accordance with the [Department of Education’s] guidance,” which guidance states that “a decision to deny a request for a religious exemption must be in writing” and “the written communication must address the specific reasons for the denial; merely stating that the request does not demonstrate a sincerely held religious belief is not sufficient articulation.”

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume55/d16805

Some proposed settlement agreements may require court or agency approval

Some proposed settlement agreements may require court or agency approval

Cheeks v Freeport Pancake House, Inc., USCA, 2^ndCircuit, Docket 14-299 CV

Dorian Cheeks sued Freeport Pancake House [FPH] seeking to recover overtime wages, liquidated damages and attorneys’ fees under both the Federal Fair Labor Standards Act [FLSA] and New York State’s Labor Law. He also alleged that he was demoted, and ultimately fired, for complaining about FPH’s failure to pay him and other employees the required overtime wage.

After appearing at an initial conference with the district court, the parties agreed on a private settlement of Cheeks’ action  and filed a joint  stipulation  and order  of dismissal with prejudice* pursuant to Federal Rule 41(a)(1)(A)(ii). The federal district court, however, refused to accept the stipulation as submitted, concluding that Cheeks could not agree to a private settlement of his FLSA claims without either the approval of the district court or the supervision of the United Stated Department of Labor [DOL].

The US Circuit Court of Appeals agreed with the district court's holding ruling that in the absence of such approval, parties cannot settle their FLSA claims through a private stipulated dismissal with prejudice and remanded for further proceedings.

Characterizing as “offering useful guidance,” the Second Circuit noted that other circuit courts of appeal have arrived at different results, citing Martin v Spring Break ‘83 Prods., L.L.C., 688  F.3d 247, a 5^th Circuit ruling in which the court concluded that a private settlement agreement containing a release of FLSA claims entered into between a union and an employer waived the employees’ FLSA claims, even without district court approval or DOL supervision, and, in contrast, Lynn’s Food Stores, Inc. v United States Dep’t of Labor, 679 F.2d 1350, an 11^th Circuit ruling in which that court held that there must be a court finding that the proposed settlement “is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”

However, said the Second Circuit, the question before it “asks whether the parties can enter into a private stipulated dismissal of FLSA claims with prejudice without the involvement of the district court or DOL that may later be enforceable?”

Explaining that requiring judicial or DOL approval of such settlements is consistent with what "both the Supreme Court and our Court have long recognized as the FLSA’s underlying purpose: to extend the frontiers of social progress by insuring to all our able-bodied working men and women a fair day’s pay for a fair day’s work,” the Second Circuit concluded that review of the proposed settlement by the district court or DOL was required.

* Dismissal with prejudice means it can never be filed again by the parties to the settlement.

The Cheeks decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/52d5a9a7-8d8f-41f8-be32-a006b7a4c96f/2/doc/14-299_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/52d5a9a7-8d8f-41f8-be32-a006b7a4c96f/2/hilite/