New York City service contractor held liable for wages, benefits, interest and the payment of a civil penalty for its failure to pay employees prevailing wages and benefits

New York City service contractor held liable for wages, benefits, interest and the payment of a civil penalty for its failure to pay employees prevailing wages and benefits

Office of the City Comptroller v Paramount Security Group, Inc., OATH Index No. 2553/15

Paramount Security Group, Inc., a services contractor admitted to failing to pay prevailing wages and benefits of $1.8 million to 28 security employees working at the Health and Hospitals Corporation (HHC) offices.

It was undisputed that Paramount failed to pay prevailing wages to its security employees from December 2010 to March 2013. Paramount, however alleged that the entire blame for this violation was on HHC, which Paramount insisted prevented compliance with the prevailing wage law by refusing to approve increased wages.

OATH Administrative Law Judge John B. Spooner found that “the notion that Paramount knowingly violated the terms of its contract based upon verbal directions of HHC personnel, without protesting or seeking approval from a higher authority, was highly improbable” as the contract between Paramount and HHC provided, in pertinent part, that during the term of this agreement, “the contractor shall be responsible for paying the prevailing wage rate in New York City to all of its security guards.” The contract also provided that HHC was “not responsible for any type of payroll increase . . . . [e]xcluding prevailing wage requirements” [emphasis supplied].

The ALJ held that the evidence supports a finding that Paramount’s violations of Labor Law §230 were willful was liable for the wages, benefits due the employees, plus interest and a civil penalty. As to interest, Judge Spooner held that the Comptroller was entitled to  maximum interest, at the annual rate of 16%, from the date the wages and benefits were payable and in addition, Paramount should be assessed a civil penalty of 25% of the total violation.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/15_cases/15-2553.pdf

A “deadline” set out in a collective bargaining agreement may be a nonbinding housekeeping rule unless the penalty for noncompliance is set out in the agreement

A “deadline” set out in a collective bargaining agreement may be a nonbinding housekeeping rule unless the penalty for noncompliance is set out in the agreement
Raymond Muller v Government Printing Office, United States Court of Appeals, Federal Circuit, No. 2015–3032

Raymond Muller asked his union to have his grievance against his employer, the Government Printing Office [GPO], submitted to arbitration. The relevant contract provision stated that if the grievance was not resolved to the satisfaction of the parties at the agency level “Arbitration must be invoked within 30 days.” The agreement further provided that “[t]he arbitration hearing will take place within 4 months after filing of the notice of decision to proceed to arbitration, unless the parties mutually agree to an extension of the time limit.”

As the grievance was not resolved at the agency level, a timely demand for arbitration was submitted to GPO. GPO referred the matter to arbitration pursuant provisions set out in the relevant collective bargaining agreement. GPO, four months to the day from the date that arbitration had been invoked, wrote to the union and the arbitrator “to ask that the arbitration be closed for failure to comply with the four-month deadline.” After reviewing briefs submitted by the parties the arbitrator concluded that “[T]here is ample evidence in the record, although none is required contractually, that the union … was the direct and primary cause for the failure of the parties to meet the four-month requirement” and dismissed Muller’s grievance as “not arbitrable,” as the “four-month deadline” for holding a hearing had passed.” The arbitrator's decision was appealed and considered by the U.S. Circuit Court of Appeals, Federal Circuit.

The court unanimously disagreed with the arbitrator's determination, explaining that the relevant contractual provision did not require dismissal of the grievance in the event of noncompliance with the four-month deadline. The court characterized the deadline as “merely a nonbinding housekeeping rule” to encourage timely arbitration and applies to both the arbitrator and the parties involved. Nor, said the court, there was no “past practice” in place requiring dismissal under the circumstances of this case.

The Circuit Court noted that “[c]ourts should be careful not to ‘judicialize’ the arbitration process.” Arbitration typically envisions that each case be decided on its own under the controlling contract as “t]he collective bargaining agreement is the primary tool used in the arbitration process.” Thus, said the Circuit Court, [i]t is therefore up to the negotiating parties to impose any internal deadlines on the arbitration process.” Further, the commented the court, in this instance “it is not within the union's power to ensure compliance with the four-month deadline; and the [relevant contract] provision does not specify dismissal as a sanction for failure to comply with the deadline.”

The court also noted that the contract provides that a “failure to meet a deadline will result in the grievance moving to the next step.” Pointing out that the “next step after a hearing” is the decision by the arbitrator, the Court of Appeals characterized such a result as “nonsensical” and that GPO did not contend that “failure to meet the four-month deadline should result in a decision without a hearing.”

Ruling that there was no basis in the text of the master agreement to support the arbitrator's conclusion that noncompliance with the four-month hearing deadline automatically invalidated Muller's claim, the court remanded the matter for a determination of of Muller’s grievance on its merits.

The decision is posted on the Internet at:

http://caselaw.findlaw.com/us-federal-circuit/1723086.html

Disciplinary penalty imposed, termination, held reasonable under the circumstances

Disciplinary penalty imposed, termination, held reasonable under the circumstances

Weinstein v New York State Workers' Compensation Bd., 2016 NY Slip Op 00505, Appellate Division, Second Department

Robert S. Weinstein, a Workers' Compensation Law Judge, was served with a notice of discipline by which the respondent sought to terminate his employment based on three charges of insubordination, two charges of misconduct/incompetence, and three charges of misconduct. The arbitrator found that the Workers’ Compensation Board [Board] had proven seven out of the eight charges and that the penalty of termination was proper.

Weinstein filed an Article 75 petition seeking to vacate the arbitration award. Supreme Court granted the Board's motion to dismiss the petition and, in effect, denied Weinstein’s petition and dismissed the proceeding. Weinstein appealed, contending the penalty imposed, termination, “was unduly harsh and disproportionate.”

The Appellate Division observed that although “the excessiveness of a penalty is not one of the enumerated bases upon which an arbitration award may be vacated,” where an arbitration is compulsory, as is here the case, judicial review under CPLR Article 75 requires that the award be in accord with due process. Citing Russo v NYC Department of Education, 25 NY3d 946, the court rejected the Board’s contention to the contrary and held that “the excessiveness of a penalty is a basis upon which an arbitration award may be vacated.

The court ruled that in this instance “the penalty of termination was not so disproportionate to the offenses as to be shocking to one's sense of fairness, citing the so-called Pell Doctrine, Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, explaining that the arbitrator rationally determined, based on the evidence presented, that Weinstein was insubordinate and failed to complete his assignments in a timely manner, despite several remedial measures undertaken by his employer, and dismissed his appeal.

The decision is posed on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_00505.htm

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The Doctrine of Legislative Equivalency defeats a Mayor’s unilateral decision to abolish a position in the civil service

The Doctrine of Legislative Equivalency defeats a Mayor’s unilateral decision to abolish a position in the civil service

Moser v Tawil, 2016 NY Slip Op 00501, Appellate Division, Second Department

Robert T. Moser was employed by the City of Middletown as a part-time code enforcement officer. On April 27, 2012, the Mayor of Middletown unilaterally decided to abolish that position for economic reasons. Moser filed a CPLR Article 78 petition seeking a court order annulling the Mayor’s decision that resulted in his termination and directing his reinstatement to his former position with back salary.

Following a hearing, Supreme Court determined that the Mayor had exceeded his authority under the Middletown City Charter and granted Moser’s petition.

The Appellate Division commenced its review of Mayor’s appeal by noting that “The questions that may be raised in a CPLR Article 78 proceeding include "whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

Finding that Supreme Court correctly concluded that the Mayor did not have the authority to unilaterally abolish the position of part-time code enforcement officer, the Appellate Division explained that the City Charter “grants the Middletown Board of Estimate and Apportionment the power to create civil service positions in Middletown by providing that it "shall fix the powers and duties and regulate the salaries and compensation of all city officers and employees."

While the City Charter authorizes the Mayor, with certain limitations, to suspend an employee for cause, there is nothing in the City Charter granting the Mayor authority to unilaterally abolish civil service employment positions.

Sometimes referred as the Doctrine of Legislative Equivalency, the court said that the general rule, when not qualified by positive law, is that the power which creates an office may abolish it in its discretion and this rule applies to municipal offices created by the act of some municipal body. Accordingly, “having been granted the power to create civil service employment positions in Middletown, it is the Board of Estimate and Apportionment, and not the Mayor, that is vested with the power to abolish them.”

The Doctrine of Legislative Equivalency, applied by the Court of Appeals in deciding the Torre v County of Nassau, 86 NY2d 421, sets out the principle that a position created by a legislative act can be abolished only by a correlative legislative act.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_00501.htm

In the event there is a conflict between a provision in the County Code and the County Charter, the provision in the County Charter controls

In the event there is a conflict between a provision in the County Code and the County Charter, the provision in the County Charter controls

James Carver v County of Nassau, 2016 NY Slip Op 00466, Appellate Division, Second Department

[See, also, James Carver v County of Nassau, 2016 NY Slip Op 00467, Appellate Division, Second Department]

Prior to 2007, the Nassau County Charter and the Nassau County Administrative Code both provided that the Commissioner of Police had control over the discipline of members of the Nassau County Police Department. In 2007, the Nassau County Legislature amended §8-13.0 of the County Administrative Code by adding subdivision (e), which amendment allowed for the resolution of certain disciplinary matters through binding arbitration.

In 2008, the Police Benevolent Association of the Police Department of the County of Nassau, N.Y., Inc. [PBA] and the County of Nassau entered into a collective bargaining agreement that, in pertinent part, provided that police officers “subject to a fine, penalty, or suspension of 10 or more days without pay, or its monetary equivalent,” had the option of proceeding to binding arbitration in lieu of a departmental disciplinary hearing. 

In 2012, the County Legislature enacted Local Law No. 9-2012 of the County of Nassau, repealing §8-13.0(e) of the County Administrative Code.

PBA challenged this action by the County Legislature seeking a court order declaring that the 2008 agreement was valid and was not altered by Local Law No. 9-2012. In addition, PBA alleged Local Law No. 9-2012, repealing §8-13.0(e) of the County Administrative Code, “did not impact the parties' contractual obligations pursuant to the 2008 agreement and, therefore, [PBA is] entitled to a permanent injunction enjoining the enforcement of Local Law No. 9-2012 of the County of Nassau.”

Supreme Court ruled that as the County Charter vested the power to discipline members of the Nassau County Police Department exclusively with the Commissioner of Police, the County Legislature's attempt to divest the Commissioner of a portion of that disciplinary authority by amending the County Administrative Code to allow for binding arbitration of certain disciplinary matters created a conflict between the Code and the Charter, and, in the face of such a conflict, the Charter controlled.

The Appellate Division agreed, holding that Supreme Court “properly concluded that the County Legislature's enactment of §8-13.0(e) of the Nassau County Administrative Code was invalid and that the subsequent repeal of §8-13.0(e) of the County Administrative Code by Local Law No. 9-2012 of the County of Nassau was proper and should not be enjoined.”

Citing Patrolmen’s Benevolent Association of the City of New York v PERB, 6 NY3d 563 and Town of Wallkill v CSEA, Town of Wallkill Police Department Unit, 19 NY3d 1066, the court said “as the [Nassau] County Legislature expressly committed disciplinary authority over the Nassau County Police Department to the Commissioner of Police, collective bargaining over disciplinary matters was prohibited.”

In the Patrolmen’s case, the Patrolmen's Benevolent Association of the City of New York (NYCPBA) sought to annul a decision by the Public Employment Relations Board (PERB) that the City need not bargain with the PBA over five subjects, even though those subjects had been dealt with in an expired collective bargaining agreement. The Court of Appeals sustained PERB’s ruling, explaining “that the New York City Charter and Administrative Code, as interpreted in Matter of City of New York v MacDonald (201 AD2d 258, 259 [1st Dept 1994]), required that the discipline of New York City police officers be left to the discretion of the Police Commissioner.”

In Wallkill, the Court of Appeals ruled that although for more than a decade collective bargaining agreements (CBA) between the Town of Wallkill (the Town) and the Town of Wallkill Police Officers' Benevolent Association, Inc. (PBA) provided that police officers subject to discipline by the Town had the right to a hearing before a neutral arbitrator, in 2007 the Town adopted Local Law No. 2, which sets forth disciplinary procedures for police officers different than those set out in the CBA.

The Court explained that notwithstanding “the strong and sweeping policy of the State to support collective bargaining under the Taylor Law," police discipline may not be a subject of collective bargaining under the Taylor Law “when the Legislature has expressly committed disciplinary authority over a police department to local officials."

Noting that Civil Service Law §76(4) states that "[n]othing contained in section seventy-five or seventy-six of this chapter shall be construed to repeal or modify any general, special or local" preexisting laws,” the Court of Appeals concluded that “that the Town properly exercised its authority to adopt Local Law No. 2 pursuant to Town Law §155" and that police discipline “is a prohibited subject of collective bargaining between the Town and the PBA.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_00466.htm