Public Citizen, Inc. has filed an amicus brief in support of the U.S. Dept. of Labor’s Fiduciary Rule

Public Citizen, Inc. has filed an amicus brief in support of the U.S. Dept. of Labor’s Fiduciary Rule

Chamber of Commerce of the United States of America, et al. v Thomas E. Perez, Secretary of Labor and United States Department of  Labor, USDC, Northern District of Texas, Dallas Division, Civil Action No. 3:16-cv–1476– M; consolidated with 3:16-cv-1530-C and 3:16-cv-1537-N

The U.S. Department of Labor (DOL) issued a new rule – generally referred to as the fiduciary rule*– which seeks to protect workers’ saving and investments for retirement by mandating that their financial advisers act in a fiduciary capacity when providing financial advice for retirement purposes.

The U.S. Chamber of Commerce, the American Council of Life Insurers and a number of other corporate bodies have challenged DOL’s promulgation of its fiduciary rule, and have filed a lawsuit against the DOL in U.S. District Court for the Northern District of Texas. Among their claims is that the DOJ rule constitutes a content-based restriction on the commercial speech of their members and violates the First Amendment.**

On August 26, 2016, Public Citizen*** filed an amicus brief in support of the DOL’s fiduciary rule.

The Public Citizen’s brief argues that Chamber of Commerce’s First Amendment argument should be rejected because the fiduciary rule does not regulate speech; rather, it regulates the terms of a commercial or professional relationship and duties that attach to it.

DOL has indicated that:

1. The rule describes the kinds of communications that would constitute investment advice and then describes the types of relationships in which those communications would give rise to fiduciary investment advice responsibilities.

2. Covered investment advice is defined as a recommendation to a plan, plan fiduciary, plan participant and beneficiary or IRA owner for a fee or other compensation, direct or indirect, as to the advisability of buying, holding, selling or exchanging securities or other investment property, including recommendations as to the investment of securities or other property after the securities or other property are rolled over, transferred or distributed from a plan or IRA.

3. Covered investment advice also includes recommendations as to the management of securities or other investment property, including, among other things, recommendations on investment policies or strategies, portfolio composition, selection of other persons to provide investment advice or investment management services, selection of investment account arrangements (e.g., brokerage versus advisory); or recommendations with respect to rollovers, transfers, or distributions from a plan or IRA, including whether, in what amount, in what form, and to what destination such a rollover, transfer, or distribution should be made.

4. The fundamental threshold element in establishing the existence of fiduciary investment advice is whether a "recommendation" occurred. A "recommendation" is a communication that, based on its content, context, and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. The more individually tailored the communication is to a specific advice recipient or recipients, the more likely the communication will be viewed as a recommendation. 

DOL states that it "has taken an approach to defining 'recommendation' that is consistent with and based upon the approach taken by the Financial Industry Regulatory Authority (FINRA), the independent regulatory authority of the broker-dealer industry, [which is] subject to the oversight of the Securities and Exchange Commission (SEC)."

DOL’s “fact sheet” describing its fiduciary rule is posted on the Internet at:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/dol-final-rule-to-address-conflicts-of-interest

* The Fiduciary Rule requires retirement advisors to act as fiduciaries, putting their clients' retirement needs and interests before their own by acting in the best interest of the party whose assets they are managing. 

** In addition to Chamber of Commerce [its complaint is posted on the Internet at http://www.chamberlitigation.com/sites/default/files/cases/files/16161616/DOL%20Fiduciary%20Rule%20Complaint.pdf, two lawsuits also challenging the Fiduciary Rule have been filed, one in federal district court, Washington D.C. [The National Association for Fixed Annuities, et al, v. Thomas E. Perez et al. Case No. 16-cv-1035 RDM [the National Association of Fixed Annuities  complaint is posted on the Internet at: http://www.investmentnews.com/assets/docs/CI10555363.PDF] and the other by Market Synergy Group [Market Synergy Group v Perez, et al, USDC District of Kansas, Case 5:16-cv-04083]. The Market Synergly complaint is posted on the Internet at: https://www.bloomberglaw.com/public/desktop/document/Market_Synergy_Group_Inc_v_United_States_Department_of_Labor_et_a/1?1472484084]. 

*** Public Citizen, Inc. is a non-profit, consumer rights advocacy group. Founded by Ralph Nader in 1971, its website is at http://www.citizen.org/Page.aspx?pid=183.

Public Citizen’s amicus brief is posted on the Internet at:

http://www.citizen.org/documents/Chamber-of-Commerce-Perez-Amicus-Brief.PDF

  

Selected reports issued by the Office of the State Comptroller during the week ending August 28, 2016

Selected reports issued by the Office of the State Comptroller during the week ending August 28, 2016

Source: Office of the State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued:

[Internet links highlighted in color]

City University of New York - Administration of Fellowship Leaves

http://osc.state.ny.us/audits/allaudits/093016/15f5.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

Borough of Manhattan Community College - Controls over bank accounts

http://osc.state.ny.us/audits/allaudits/093016/15s93.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

New York StateInsurance Fund – Examination of outstanding premiums owed to the New York State Insurance Fund

http://osc.state.ny.us/audits/allaudits/bseaudits/bse20160819.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

Office of Information Technology Services - Effectiveness of the Information Technology Transformation

http://osc.state.ny.us/audits/allaudits/093016/15s2.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

State Education Department - Oversight of School Fire Safety Compliance

http://osc.state.ny.us/audits/allaudits/093016/15s86.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight; and the

State Education and Health Departments – Oversight of Student Immunization in Schools

http://www.osc.state.ny.us/audits/allaudits/093016/15s85.pdf?utm_source=weekly+news&utm_medium=email&utm_term=state+audit&utm_content=20160828&utm_campaign=fiscal+oversight

$2.95 Million Settlement With Hospital Group For Improperly Delaying Repayment of Medicaid Funds

Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the New York Field Office of the U.S. Department of Health and Human Services, Office of Inspector General, Eric Schneiderman, New York State Attorney General, and Thomas P. DiNapoli, the New York State Comptroller, announced a $2,950,000 settlement of a civil fraud lawsuit against Beth Israel Medical Center d/b/a Mount Sinai Beth Israel, St. Luke’s-Roosevelt Hospital Center d/b/a Mount Sinai St. Luke’s and Mount Sinai Roosevelt, and Continuum Health Partners, Inc. for willfully delaying repayment of over $ 800,000 in Medicaid overpayments. The settlement resolves claims under the federal False Claims Act and the New York State False Claims Act. The report is posted on the Internet at:

http://www.osc.state.ny.us/press/releases/aug16/082416a.htm?utm_source=weekly+news&utm_medium=email&utm_term=corruption&utm_content=20160828&utm_campaign=fiscal+oversight

State Contract and Payment Actions for July 2016 

State Comptroller Thomas P. DiNapoli announced his office approved 1,462 contracts valued at $1.72 billion and approved more than 1.7 million payments worth nearly $6.3 billion in July. His office also rejected 167 contracts and related transactions valued at $370 million and 1,183 payments valued at more than $5.1 million due to fraud, waste or other improprieties. The report is posted on the Internet at:

http://www.osc.state.ny.us/press/releases/aug16/082316.htm?utm_source=weekly+news&utm_medium=email&utm_term=state+operations&utm_content=20160828&utm_campaign=fiscal+oversight

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  Individuals can report allegations of fraud involving public funds by calling the toll-free Fraud Hotline at 1-888-672-4555, by transmitting an e-mail to investigations@osc.state.ny.us, by filing a complaint online athttp://osc.state.ny.us/investigations/complaintform2.htm or by mailing a complaint to Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

Selected case summaries concerning public employee retirement benefit posted on the Internet by Justia

Selected case summaries concerning public employee retirement benefit posted on the Internet by Justia

Click on text highlighted in color to access full decision

New retirement options offered eligible retirees benefit actuarially equivalent in value to the previous pension 
Lenander v. Dep't of Retirement Sys.,Washington Supreme Court, Docket 92671-9

In 2000, the Department of Retirement Systems (DRS) created a new option for eligible retirees in which the retiree could opt for a pension that would allow a surviving spouse to continue to receive monthly pension benefits at the same amount after the retiree's death. To make this pension actuarially equivalent in value to the previous pension, the DRS provided for a greater reduction in the retiree's monthly benefits.

In 2010, the DRS adopted rules that modified the degree of the actuarial reduction. Appellant Tim Lenander challenged the changes to the reduction, arguing that the changes violated the statutory scheme and impaired his contract right to a lower reduction in his pension payment.

The Supreme Court found Lenander's arguments unavailing, holding that the DRS acted within its authority in amending the survivor benefit actuarial reduction regulations as set forth under former WACs 415-02-380 (2010) and 415-103-215 (2010).

In amending these regulations, the DRS did not violate the contract clause of article I, section 23 of the Washington Constitution. Consequently, the Court held that the DRS did not infringe on Lenander's right to an "actuarial equivalent" survivor benefit, and that Lenander did not suffer substantial impairment to his pension contract rights.

Excluding specified items from the calculation of retirement income to avoid inflating income to increase the employee’s retirement allowance 
Marin Ass'n of Pub. Employees v. Marin Cnty. Employees Retirement Ass'n., CaliforniaCourt of Appeals, Docket A139610

To combat the practice known as “pension spiking,” by which public employees use various stratagems to inflate their income and retirement benefits, the County Employees Retirement Law, was amended, effective 2013, to exclude specified items from the calculation of retirement income. The trial court concluded application of the new formula to current employees did not amount to an unconstitutional impairment of the employees’ contracts. The court of appeal affirmed, holding that the Legislature did not act impermissibly by amending Government Code section 31461.

While a public employee does have a “vested right” to a pension, that right is only to a “reasonable” pension; it is not an immutable entitlement to the most optimal formula of calculating the pension.

The Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension, as long as the modifications do not deprive the employee of a “reasonable” pension. The Legislature did not forbid the employer from providing the specified items to an employee as compensation, only the purely prospective inclusion of those items in the computation of the employee’s pension.

The ADA and Internet compliance

The ADA and Internet compliance

Source: United States Department of Justice

Although courts are still in the process of determining if the Americans with Disabilities Act [ADA] applies to material posted on the Internet, the United States Department of Justice (DOJ) has made it clear that it interprets the ADA as applicable to websites.

Many municipalities and school districts have taken the initiative and are making its website “user friendly” for individuals with disabilities and the World Wide Web Consortium, an international developer for open standards for the Web, advocates making websites usable by the disabled even if regulations are still in the drafting stage.

Websites should be accessible to disabled users through features permitting easier navigation and that interface with available assistive technologies such as not limiting access time for activities, oral communication to trigger program functions and appropriate controls for all operations.

It is expected that public entities will soon be required to make certain that its electronic publications are ADA compliant. Advocates for the disable believe that the sooner municipality and school district websites are accessible to the disabled the better.

The Department of Justice has posted information addressing such compliance with the ADA on the Internet at https://www.ada.gov/

Hearing officer considers failed efforts at “progressive discipline” in setting disciplinary penalty

Hearing officer considers failed efforts at “progressive discipline” in setting disciplinary penalty

OATH Index No. 1721/16

The New York City Human Resources Administration (HRA) served disciplinary charges against Carey Bryant, a clerical associate, alleging Bryant was guilty of being late to work excessively, several instances of discourtesy, threatening and disruptive conduct, and making a false statement in a supervisory conference.

OATH Administrative Law Judge ALJ Noel A. Garcia held that HRA proved that Bryant was late on 53 occasions, had engaged in discourteous conduct on three occasions, was disruptive during a training class, and made a false statement during a supervisory conference.

Judge Garcia, however, found that HRA failed to prove its allegations that Bryant had engaged in other instances of discourteous conduct. The ALJ explained that HRA did not provide any corroboration to support the statements it alleged Bryant had made nor did not specify Bryant’s words or actions it alleged were discourtesy or threatening.

The ALJ requested and received Bryant’s personnel history.* The record indicated Bryant had been served with disciplinary charges on a number of occasions resulting, respectively in [1] a 5-day suspension without pay for using obscene and abusive language directed towards a supervisor; [2] a 10-day suspension  without pay for using “obscene and abusive language, oral threats and discourteous conduct; [3] a 45-day suspension without pay for using abusive language, discourteous conduct, making oral threats, insubordination, and failing to comply with time and leave regulations; and, ultimately, [4] a 60-day suspension without pay for using obscene or abusive language, making oral threats, and discourteous conduct.

Judge Garcia found that Bryant had repeatedly engaged in discourteous, threatening and unprofessional conduct. Despite accepting longer and longer suspensions for such behavior, Bryant conduct did not improve. Further, said the ALJ, “Even when [Bryant] admitted at trial to making statements that undermined his superiors, or to making inappropriate comments regarding potential workplace violence, [Bryant] never took any responsibility for any of his actions, or expressed any regret.

According, due to Bryant’s poor disciplinary history and his continued unwillingness to follow agency rules or behave in a professional manner, Judge Garcia recommended Bryant’s termination from his position as the appropriate penalty for his misconduct.

* In Bigelow v Village of Gouverneur, 63 NY2d 470, the Court of Appeals said that such records could be used to determine the penalty to be imposed if [1] the individual is advised that his or her prior disciplinary record would be considered in setting the penalty to be imposed, and [2] the employee is given an opportunity to submit a written response to any material he or she deemed “adverse” contained in the record or an opportunity to offer “mitigating circumstances.”

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/16_cases/16-1721.pdf

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The Discipline Book - A 458 page guide to disciplinary actions involving public officers and employees. For more information click on http://booklocker.com/books/5215.html

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