An administrative decision annulled and remanded for a new hearing based on a judicial finding that it is “affected by errors of law”

An administrative decision annulled and remanded for a new hearing based on a judicial finding that it is “affected by errors of law”

DeMaio v DiNapoli, 2016 NY Slip Op 02505, Appellate Division, Third Department

VHB, a correction officer, applied for performance of duty disability retirement benefits alleging that he was injured while escorting an inmate away from an altercation between the inmate and another correction officer. The application was initially denied by the Retirement System and VHB requested a hearing and redetermination.

Following the hearing, the Hearing Officer upheld the initial denial of VHB’s application for duty disability retirement, concluding that VHB had not meet his burden of proof of establishing each and every element necessary to sustain his application and that the initial determination was supported by substantial evidence. The Comptroller accepted the findings and conclusions of the Hearing Officer and VHB initiated a CPLR Article 78 proceeding.

The Appellate Division said that the Hearing Officer's determination, which was adopted by the Comptroller, was affected by errors of law.

The court explained that the Hearing Officer had improperly noted that the applicable standard of review was whether the initial determination was "supported by substantial evidence." Rather than a review of the initial determination, the Appellate Division said that such a hearing is conducted to allow the Comptroller to make a “redetermination” with “the same powers upon such hearing as upon the original application.”

In addition, said the court, “the Hearing Officer's determination misstated the applicable burden.” VHB was required to establish that he is incapacitated from performing his work-related duties “as the natural and proximate result of an injury, sustained in the performance . . . of his or her duties by, or as the natural and proximate result of any act of any inmate” [emphasis supplied by the court].

Further, the Appellate Division said it has repeatedly held that the relevant statute, Retirement and Social Security Law §607-c[a],requires that an applicant for duty disability retirement benefits demonstrate that his or her injuries were “caused by direct interaction with an inmate … and have specified that such injuries must be caused by some ‘affirmative act on the part of the inmate’ … there is no legal support for the Hearing Officer's enhancement of such burden by indicating that VHB was required to demonstrate "an intentional overt act of an inmate” (emphasis supplied by the court).

Accordingly, the court annulled the Comptroller’s determination and remanded the matter to the Comptroller for a new hearing.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_02505.htm

An application for retirement benefits must be timely delivered to and received by the retirement system to be operative

An application for retirement benefits must be timely delivered to and received by the retirement system to be operative

Biscardi v New York State and Local Retirement Sys., 2016 NY Slip Op 03238, Appellate Division, Third Department

Valerie J. Biscardi initially applied for disability retirement benefits pursuant to Retirement and Social Security Law Article 15 in February 2012. She, however, withdrew that application in March 2012 and in September 2012 filed an application for “service retirement.”

In May 2013, Biscardi’s attorney, contending that Biscardi had filed an application for disability retirement on September 19, 2012, inquired about the status of Biscardi’s application for “disability retirement.” The New York State and Local Retirement System [SLRS] advised him that there was no record that [Biscardi] had filed a subsequent application for "disability retirement benefits” on September 19, 2012.

Following an administrative hearing, the Hearing Officer determined that Biscardi had not established that she had filed a timely application for disability retirement benefits as required by Retirement and Social Security Law §605.* The Comptroller adopted the ALJ's determination and Biscardi appealed.

The Appellate Division affirmed the Comptroller’s decision.

An application for disability retirement benefits, said the court, “must be filed, as relevant here, ‘within three months from the last date the member was being paid on the payroll.’” Kathleen Nowak, Director of Disability Services for the Retirement System, testified that a search of the Retirement System's records found Biscardi's February 2012 disability retirement application and the March 2012 withdrawal letter, “but no subsequent disability retirement benefits application.”

Although Biscardi contended that her counsel “timely mailed a second application” to the Retirement System in September 2012, the Appellate Division said that "simply mailing an application does not constitute filing; rather, filing only occurs upon actual delivery to and receipt by [the Retirement System]."

Accordingly, said the court, “substantial evidence supports the Comptroller's determination that [Biscardi] failed to file a timely application and it will not be disturbed.”

* In Biscardi’s case, RSSL §605[b][2] required that she file her an application for disability retirement benefits "within three months from the last date the member was being paid on the payroll."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03238.htm

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Unemployment insurance benefit denied where off-duty misconduct found to breach the standards of behavior expected of an employee in consideration of his or her duties

Unemployment insurance benefit denied where off-duty misconduct found to breach the standards of behavior expected of an employee in consideration of his or her duties

Hall (Commissioner of Labor), 2016 NY Slip Op 03797, Appellate Division, Third Department

An employee of the Office of Persons with Developmental Disabilities [OPDD], Richard Hall, was arrested at his home for possession of marijuana. When OPDD learned of Hall’s arrest, it placed him on indefinite suspension. While on suspension, Hall applied for unemployment insurance benefits but was disqualified from receiving them based on a finding that he had engaged in disqualifying misconduct.

While on suspension from his position with OPDD, Hall pleaded guilty to criminal possession of marijuana in the fourth degree and, in settlement of the administrative disciplinary charges then pending against him, OPDD reinstated Hall to his position after he had been out of work for 15 months.

With respect to Hall's claim for unemployment insurance benefits, ultimately an Administrative Law Judge [ALJ] ruled, among other things, that Hall’s plea of guilty to the criminal charge amounted to misconduct disqualifying him from receiving benefits. The Unemployment Insurance Appeal Board sustained the ALJ's decision and Hall appealed the Board’s determination.

The Appellate Division affirmed the Board’s ruling.

Citing Matter of Sinker [Sweeney], 89 NY2d 485, the court explained that criminal convictions arising from conduct occurring outside the workplace have been found to constitute disqualifying misconduct where the conduct demonstrates a breach "of the standards of behavior to be reasonably expected by an employer in light of the nature of the employment involved."

Here, said the court, Hall’s job duties included dispensing medications to developmentally disabled individuals. Given the environment in which Hall worked, the Appellate Division said that it was reasonable for OPDD to expect that Hall would not illegally use or possess controlled substances. Clearly, said the court, Hall's criminal conduct posed a risk to his employer's mission and was detrimental to its interests.

Accordingly, the Appellate Division found that substantial evidence supports the Board's finding that Hall had engaged in disqualifying misconduct.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03797.htm

An 18-year delay by the State Division of Human Rights in issuing its determination characterized as being “jurisprudentially intolerable”

An 18-year delay by the State Division of Human Rights in issuing its determination characterized as being “jurisprudentially intolerable”

Matter of New York State Dept. of Correction and Community Supervision v New York State Div. of Human Rights, 137 AD3d 1512, Appellate Division, Third Department

In August 1995 Kenneth W. Howarth filed the first of his two complaints with respondent State Division of Human Rights [SDHR] alleging that the New York State Department of Corrections and Community Supervision [DCCS] had discriminated against him on the basis of a disability.*

In the words of the Appellate Division, “SDHR did not commence hearings on the 1995 and 1997 complaints until 2004. Although the testimony was neither long nor complicated, the hearings were not concluded until 2006. Finally, in 2013, an Administrative Law Judge [ALJ] determined, among other things, that DCCS had granted light-duty assignments to employees with disabilities incurred on the job, whereas employees with disabilities that were not work related—such as Howarth—were denied light-duty assignments. The ALJ also found that DCCS had discriminated against Howarth by placing him on involuntary leave under the Civil Service Law, resulting in the use of leave accruals and leave without pay.”

The ALJ's recommended award directed DCCS to pay to the trustee in bankruptcy** any lost wages and benefits that had not been restored to Howarth for times that he was out of work between July 1994 and August 1997, as well as compensatory damages of $20,000 for mental anguish. To the extent of the "unrestored lost wages and benefits" was not determined, the State Comptroller was ordered to "perform an accounting" to supply this information and determine these amounts. DCCS was also ordered to revise its policy regarding light-duty assignment and provide discrimination prevention training to all of its employees.

The Commissioner of Human Rights adopted the ALJ's recommendations in December 2013, with some modifications not relevant here, and found DCCS guilty of an unlawful discriminatory practice based on disability.

DCCS appealed the Commissioner's determination.

Addressing a procedural issue, the Appellate Division rejected DCSS’s argument that because a public employer has discretion when using Civil Service Law procedures regarding an employee, SDHR did not have jurisdiction over this matter. The court held that where it is alleged that such procedures are used in a discriminatory manner under the Human Rights Law, SDHR does have jurisdiction.

However, the court said it agreed with DCCS’s argument that the complaints should be dismissed because of SDHR's delay in processing them. The controlling statute, said the court, “sets forth time limits, measured in mere days and months, requiring SDHR to promptly consider and determine discrimination complaints.” 

Although the Appellate Division noted it was well aware that [1] the time limits in Executive Law §297 are "directory only," citing Corning Glass Works v Ovsanik, 84 NY2d 619, [a case involving an eight-year delay] and [2] that these time limits "exist for the benefit of complainants and should not be used to shelter those charged with violating the statute unless there is a showing of substantial actual prejudice," the court said that “the time that elapsed here from the initial complaint until the Commissioner issued her final order was more than 18 years” and by an agency “long known for its troublesome and excessive delays.”

In the words of the Appellate Division, “this delay of nearly a generation has plumbed a new depth of administrative inertia that has, in our view, reached the point of being ‘jurisprudentially intolerable.’”

The court noted [1] that Howarth will receive no financial benefit here, inasmuch as the order directs payment to the trustee in bankruptcy; [2] although not in the record, it was represented at oral argument that Howarth is now deceased; [3] SDHR has made no effort to offer any explanation or excuse for its apparently unexplainable and indefensible delay; [4] there is no allegation that DCCS contributed to the delay, and [5] the complaints filed by Howarth presented issues that were relatively simple and straightforward.

In the court’s view, the most difficult part of the matter would have been reconstructing the unrestored lost wages and benefits for the various times that Howarth was out of work. Rather than SDHR making this determination, the Commissioner ordered the State Comptroller to do so.***

As to the Commissioner directing DCCS to draft a new light-duty assignment policy and embark on a discrimination prevention training program for all of its employees, the Appellate Division observed that this directive is based on DCCS's policy in effect two decades ago when the complaints were filed. Its imposition now, without regard to DCCS’s currently evolved policy and subsequent training, lacks support in the record and creates potentially expensive, time-consuming and unnecessary action by DCCS.

Finding that there is substantial prejudice to DCCS occasioned by this "intolerable delay" and that such delay is "an abuse of SDHR's discretion," the Appellate Division annulled SDHR’s determination.

* The second of these complaints filed with SDHR alleged that DCCS had discriminated against Howarth yet again because of disability and it had retaliated against him for having filed his first complaint.

** As a result of being out of work, as well as other factors, Howarth filed for bankruptcy in 1996.

*** Although the Commissioner cited no statutory or other authority giving her the power to order the Comptroller to conduct yet another administrative inquiry to gather the necessary information, the Appellate Division said it need not decide this issue as it was annulling the Commissioner's determination on other grounds.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_02493.htm

A court’s review of a PERB's decision is limited to determining if it was affected by an error of law or it was arbitrary and capricious or an abuse of discretion

A court’s review of a PERB's decision is limited to determining if it was affected by an error of law or it was arbitrary and capricious or an abuse of discretion

Kent v Lefkowitz, 2016 NY Slip Op 03650, Court of Appeals

In response to New York State Racing and Wagering Board* (the Racing Board) reducing per diem wages for its seasonal employees* by 25%, the Public Employees Federation, AFL-CIO [PEF], the certified collective bargaining representative for the Professional, Scientific and Technical Services Unit of New York State employees, which unit includes seasonal track personnel employed by the Racing Board** filed an improper practice charge, alleging that the reduction in wages violated Civil Service Law §209-a(1)(d) with the Public Employment Relations Board [PERB]. PERB dismissed the improper practice charge and PEF appealed contending that PERB’s decisions “was affected by an error of law or was arbitrary and capricious or an abuse of discretion.”

The Appellate Division reversed, with two Justices dissenting, vacated PERB’s determination [119 AD3d 1208]. The majority held that "PERB's determination . . . was arbitrary and capricious" because it "d[id] not believe" that the Side Letter Agreement demonstrated that the Racing Board negotiated the unilateral 25% reduction in wages. The dissent opined that "when PERB's interpretation of the [S]ide [L]etter [A]greement is afforded the deference it is due, its determination that the [Racing] Board met its burden of establishing that it satisfied its duty to negotiate with [PEF] is rational and not arbitrary and capricious."

The Court of Appeals, [Judge Fahey dissenting in an opinion; Judge Stein taking no part], reversed the Appellate Division’s ruling, thus sustained PERB’s determination.

The genesis of this dispute was a collective bargaining agreement negotiated by PEF and the New York State Governor's Office of Employee Relations [GOER] that was operative from 1995 to 1999. The CBA included a "Memorandum of Interpretation," or side-letter agreement that addressed terms and conditions of the employment of seasonal employees and provided for Compensation wherein Paragraph A provided for lump-sum payments and salary increases for eligible employees; Paragraph B set out the specific fiscal years covered by the CBA; [3] Paragraph C addressed the effect on a seasonal employee's rate of compensation "[i]f during the term of th[e] Agreement the rate of compensation of any employee in a seasonal position [wa]s increased at the discretion of the Director of the Budget for the purpose of making such rate equal to the [f]ederal minimum wage level;" and Paragraph D of the Side Letter Agreement [SLA] expressly made Paragraphs A through C applicable to seasonal employees paid on a per diem basis.

Approximately two months after the Side Letter Agreement was executed, the Racing Board's chair announced a 25% reduction in the per diempay of seasonal track employees, effective with the January 1996 appointments. In response, PEF filed an improper practice charge with PERB, alleging that this reduction violated the Racing Board's duty to negotiate in good faith under Civil Service Law § 209-a (1) (d). The Racing Board answered, raising the affirmative defense of waiver.

After administrative hearings, PERB's Assistant Director rejected the Board’s waiver defense and found a violation of Civil Service Law §209-a(1)(d). The Board filed exceptions to Assistant Director’s decision as did PEF with respect to the relief awarded by the Assistant Director. PERB dismissed the improper practice charge finding that the SLA was "a negotiated limitation upon the State Budget Director's discretion with respect to unilateral adjustments in the rates of compensation for seasonal positions in the unit" and, therefore, the duty to negotiate was satisfied.

Supreme Court dismissed the PEF’s petition challenging PERB's decision. The Appellate Division, however, reversed the Supreme Court’s decision, with two Justices dissenting. The majority held that "PERB's determination . . . was arbitrary and capricious" because it ‘d[id] not believe’ that the Side Letter Agreement demonstrated that the Racing Board negotiated the unilateral 25% reduction in wages.” The dissent, in contrast, opined that "when PERB's interpretation of the [S]ide [L]etter [A]greement is afforded the deference it is due, its determination that the [Racing] Board met its burden of establishing that it satisfied its duty to negotiate with [PEF] is rational and not arbitrary and capricious.

The Court of Appeals ruled that the order of the Appellate Division should be reversed and the judgment of Supreme Court reinstated. The court explained that its scope of review in this context is limited to whether PERB's decision "was affected by an error of law or was arbitrary and capricious or an abuse of discretion." Further, said the court, it has recognized that "PERB is accorded deference in matters falling within its area of expertise," which includes "the resolution of improper practice charges."

The Court of Appeals said that the SLA “was comprehensive in addressing all conditions of employment for seasonal employees for 1996 to 1999,” including specific pay increases for specific years, but not for the fiscal year in which the 25% reduction took effect. Further, the SLA “did not rule out pay reductions and did not impose any conditions precedent to pay reductions.”

Accordingly, said the court, PERB's conclusion that it was "reasonably clear" that both sides intended the SLA "to act as a negotiated limitation upon the State Budget Director's discretion" as to compensation for seasonal employees was not arbitrary and capricious. 

Reading the Side Letter Agreement as a whole, the Court of Appeals concluded that the language of the SLA "implicitly demonstrate[s] that the parties had reached accord" with respect to any limitations on the discretionary authority of the Budget Director to change the per diem compensation of seasonal employees, noting that “[e]ach of the compensation sections of the Side Letter Agreement demonstrates negotiation with respect to the statutorily authorized discretion."

* Effective February 1, 2013, the Racing Board merged into the New York State Gaming Commission, a newly created entity.
 

** Seasonal track employees are in the exempt class [Civil Service Law §41] and are appointed each year by the chair of the Racing Board to work during a specific season from opening date until closing date.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03650.htm