Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit

Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit

Altic v Board of Educ., 2016 NY Slip Op 06315, Appellate Division, Fourth Department

As relevant to this action, §14 of Part B of Chapter 504 of the Laws of 2009  amended Chapter 729 of the Laws of 1994 and made permanent temporary legislation prohibiting a school district, a BOCES, or a vocational education and extension board providing health insurance benefits and employer contributions on behalf  retirees and their dependents that were less than the health insurance benefits and employer contributions it provide on behalf a corresponding group of active employees.*

In this action there was no question that the prescription co-pay benefits for retirees and active employees were identical from June 30, 1994, the effective date of this so-called Moratorium Statute through June 30, 2007. Effective July 1, 2007, pursuant to a collective bargaining agreement [CBA], the prescription co-pay benefit for active employees was reduced. The prescription co-pay benefit for active employees was again reduced pursuant to the terms and conditions of a subsequent CBA, effective September 1, 2013. 

Accordingly, Onondaga-Cortland-Madison Board of Cooperative Educational Services [OCM] reduced its prescription co-pay benefits for its active employees’ as the result of collective bargaining effective September 1, 2013. OCM subsequently reduced its prescription co-pay benefits for its retirees to the same level it paid on behalf of the active employees' for the prescription co-pay benefit effective April 1, 2014.

Nancy Altic, on behalf of herself and other OCM retirees, filed an Article 78 petition challenging OCM’s reduction of its prescription co-payment benefits it made on behalf of its retirees. Supreme Court granted Altic’s petition and annulled OCM’s decision to reduce the OCM’s prescription co-pay benefit for its retired employees to the then same level of its prescription co-pay benefit it made on behalf of its active employees as set out in the collective bargaining agreement. Supreme Court held that OCM had violated certain provisions of Chapter 504 of the Laws of 200.

OCM appealed and the Appellate Division unanimously reversed the Supreme Court’s ruling “on the law” and dismissed Altic’s petition.

The Appellate Division explained that the Moratorium Statute, first enacted in 1994 "sets a minimum baseline or floor for retiree health insurance benefits.” That floor was measured by the health insurance benefits received by active employees.” In other words, said the court, the Moratorium Statute “does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees."

In view of this, the Appellate Division concluded that, “inasmuch as there was a corresponding diminution of  [prescription co-pay] benefits . . . effected [with respect to retired employees] . . . from the present level  … on or after June 30, 1994” to the level of the prescription co-pay benefits being made on behalf of active OCM employees, OCM did not violate the Moratorium Statute.

* §14 of Part B of Chapter 504 of the Laws of 2009 amended §1 of Chapter 729 of the laws of 1994, making permanent temporary legislation addressing the health insurance benefits and contributions to be made on behalf of retired employees of school districts, BOCES and certain other educational entities, to read as follows: “Section 1. From on and after June 30, 1994 [until May 15, 2010,]a school district, board of cooperative educational services, vocational education and extension board or a school district as enumerated in section 1 of chapter 566 of the laws of 1967, as amended, shall be prohibited from diminishing the health insurance benefits provided to retirees and their dependents or the contributions such board or district makes for such health insurance coverage below the level of such benefits or contributions made on behalf of such retirees and their dependents by such district or board unless a corresponding diminution of benefits or contributions is effected from the present level during this period by such district or board from the corresponding group of active employees for such retirees.” 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06315.htm

AELE posts items of special interest to those involved in public safety, law enforcement and firefighting on its LawBlog

Americans for Effective Law Enforcement, Inc. posts items of special interest to those involved in public safety, law enforcement and firefighting on its LawBlog

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Americans for Effective Law Enforcement, Inc. [AELE] offers free access to certain publications. In addition, it has a searchable library of more than 35,000 case digests organized into 700 + indexed topics. Users do not have to preregister and there is no time limit on research sessions. Except for commercial purposes the contents of its online law library may be copied and pasted, saved or printed.

AELE’s current issues of its three publications, back issues since 2000, case digests since 1975, and a search engine are accessible through the Internet and AELE invites everyone to read, print or download AELE publications without charge. The main menu is at: http://www.aele.org/law

Some of the items listed on AELE’s October 2016 LawBlog are: 

AELE Monthly Law Journal article - Overtime Pay Entitlement for Public Safety Employees Under the Fair Labor Standards Act (FLSA) – Part 2.View here.

Law Enforcement Liability Reporter - This issue has cases on assault and battery: flashbangs, dogs, false arrest/imprisonment with and without warrants, firearms related: Second Amendment, public protection: 911 systems, and search and seizure of persons and vehicles. View here.  

Fire, Police & Corrections Personnel Reporter - This issue has cases on First Amendment, Fair Labor Standards Act: donning and doffing uniforms and equipment, pay disputes, political activity/patronage employment, race/national origin discrimination, retaliatory personnel actions, sex discrimination, sexual harassment, and whistleblower protection. View here.

Jail and Prisoner Law Bulletin - This issue has cases on disability discrimination: prisoners, medical care, dental care, the "three strikes" rule of the Prison Litigation Reform Act, prisoner assault by inmates, prisoner discipline, religion, search of prisoners, and sexual assault. View here.

Discipline and Internal Investigations Seminar - AELE's 2016 seminar on Discipline and Internal Investigations for public safety agencies -police, corrections and the fire services - will be held in Las Vegas on October 24-26. This is a comprehensive 2 and a half day program will address all major aspects of discipline. The program covers both substantive and procedural issues as well as rules and regulations. The program includes the latest hot topics such as cell phones, social media, and constitutional issues. More information is available at http://www.aele.org/menu-disc.html

AELE’s annual seminar on Jail and Prisoner Legal Issues will be held in Las Vegas on January 9-12, 2017. More info at http://www.aele.org/menu-jail.html

Decisions involving an employee’s use of the employer's electronic equipment that resulted in disciplinary action being taken against an employee

Decisions involving an employee’s use of the employer's electronic equipment that resulted in disciplinary action being taken against an employee 

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Sprague v Spokane Valley Fire Department

Sprague v. Spokane Valley Fire Department, summarized by Dave Strausfeld, J.D. concerns a fire department captain who was discharged for sending religious messages to coworkers via the department’s internal email system was unable to prove that his First Amendment free speech rights were violated, held a Washington Court of Appeals, affirming a lower court’s grant of summary judgment. The email system was a nonpublic forum, and limiting its usage to fire department business was reasonable and viewpoint neutral. Judge Lawrence-Berrey filed a separate concurring opinion.

In dissent, Chief Judge Fearing argued the department had opened the email system to religious messages by forwarding newsletters from its health insurer about solving personal problems and living a healthy lifestyle, because the government may not “prefer secular chatter over religious oration” 

The full text of Mr. Srausfeld's summary of the decision is posted on the Internet at:

http://www.employmentlawdaily.com/index.php/news/fired-for-using-internal-email-system-to-send-religious-messages-fire-captain-loses-free-speech-claim/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CCH-Workday+%28WK+WorkDay%29 

N.B. The foregoing summary was posted by Employment Law News, WK WorkDay - A service provided by Wolters Kluwer Legal and Regulatory U.S. No part of the above materials may be copied, photocopied, reproduced, translated, reduced to any electronic medium or machine-readable form, or retransmitted, in whole or in part, without the prior written consent of WK. Any other reproduction in any form without the prior written consent of WK is prohibited. Written consent may be obtained from WK. Please click here for more information.

Other decisions involving an employer’s use of electronic equipment underlying  disciplinary action being taken against the employee include:

Fraser v Nationwide Mutual Insurance Co.
USDC, 135 F. Supp. 2d 623

The court held that an employee using his or her employer's computer equipment for personal business does not enjoy any "right to privacy" barring the employer’s reviewing the employee's e-mail that is stored in its computer system. Federal District Court Judge Anita B. Brody decided that an employer may peruse an employee's e-mail files that are stored in the system without violating either federal or Pennsylvania wiretap laws. On appeal the USCA, Third Circuit, affirmed the District Court's grant of summary judgment in favor of Nationwide on Fraser's wrongful termination claim but vacated and remand the state claims, and his bad-faith claim and forfeiture-for-competition claim for consideration in light of the Pennsylvania Supreme Court's decision in Hess v. Gebhard and Co., Inc., 570 Pa. 148.

Leo Gustafson v Town of N. Castle 
45 A.D.3d 766
The employee, an assistant building inspector with the Town of North Castle, was charged and found guilty of falsifying official records with respect to where he was while on duty. The individual was assigned a town vehicle for the purpose of making field inspections in connection with his employment. The vehicle had a global positioning system installed that transmitted information to the town’s computer reporting the vehicle’s location and movements. Based on this information, the Town charged the employee with falsifying town records as to his whereabouts. This, said the Appellate Division, constituted substantial evidence to support the determination that the employee was guilty of falsifying town records.

Ghita v Department of Education of the City of New York 

2008 NY Slip Op 30706(U), Supreme Court, New York County, Docket Number: 0110481/2007 [Not selected for publications in the Official Reports] 
The employee challenged an arbitrator’s determination terminating his employment with the New York City Department of Education after finding him guilty of downloading a file of pornographic material from his AOL email account and openly viewed such pornographic material from a school computer. Supreme Court rejected the individual’s claim that the arbitrator exceeded his authority under Education Law §3020-a, and the award terminating petitioner's employment is a violation of public policy and New York State Law.

Perry v Comm. of Labor 
App. Div. 3rd Dept., 283 A.D.2d 754

An unemployment insurance claimant challenged a determination by the Unemployment Insurance Appeals Board denying him benefits after finding that his employment was terminated due to his misconduct. The nature of the individual's alleged misconduct: his misuse of his employer's computer equipment. The employee, a human resource specialist, was dismissed from his position after his employer discovered that he used his computer terminal to frequently access pornographic websites during working hours.

School audits published issued by the New York State Comptroller during the week ending October 1, 2016

School audits published issued by the New York State Comptroller during the week ending October 1, 2016

Source: Office of the State Comptroller

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Adirondack Central School District– Financial Condition

Purpose of Audit

The purpose of our audit was to assess the District’s financial condition for the period July 1, 2014 through February 29, 2016.

Background

The Adirondack Central School District is located in the Towns of Ohio, Russia and Webb in Herkimer County; the Towns of Lewis, Leyden, Lyonsdale and West Turin in Lewis County; and the Towns of Annsville, Ava, Boonville, Forestport, Lee, Remsen, Steuben and Western in Oneida County. The District, which operates five schools with approximately 1,300 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $28.6 million.

Key Findings

In recent years, the Board has balanced its adopted budgets with appropriations of fund balance and reserves, which has led to planned operating deficits from 2012-13 through 2014-15 and a $2.2 million decline in the general fund balance.

The school lunch fund was not self-sufficient and required advances and subsidies from the general fund to finance its operations.

The Board has not developed a multiyear financial plan to address the declining fund balance and to guide the use of the reserve funds.

Key Recommendations

Carefully consider the amount of available fund balance and reserves appropriated to fund future budgets and ensure that a reasonable amount of unrestricted fund balance is retained.

Take the necessary steps to ensure that the school lunch fund becomes self-sufficient, such as increasing revenue or cutting costs.

Develop and periodically review a comprehensive multiyear financial plan to establish long-term objectives for funding long-term needs, provide a framework for future budgets and guide the District’s management of financial condition.

The text of the audit is posted on the Internet at:

http://www.osc.state.ny.us/localgov/audits/schools/2016/adirondack.pdf 

Greenburgh Central School District– Payroll and Reserve Funds

Purpose of Audit

The purpose of our audit was to examine the District’s payroll procedures and reserve funds for the period July 1, 2014 through March 23, 2016.

Background

The Greenburgh Central School District is located in the Town of Greenburgh, Westchester County. The District, which operates six schools with approximately 2,000 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $65 million.

Key Findings

District officials have not provided employees with written procedures over payroll.

District officials did not adequately segregate payroll duties or establish sufficient compensating controls.

Overtime and leave requests were not preapproved as required.

There was no evidence that the Board periodically assessed four of the six reserves for necessity.

Key Recommendations

Develop written payroll-processing procedures for employees to follow.

Implement compensating controls to address the lack of segregation of duties in the payroll process.

Ensure that leave time is preapproved, that supporting documentation is retained and that overtime is preapproved.

Adopt a reserve fund policy that addresses the funding and use of all reserve funds.

The text of the audit is posted on the Internet at:

http://www.osc.state.ny.us/localgov/audits/schools/2016/greenburgh.pdf 

Greenville Central School District– Information Technology

Purpose of Audit

The purpose of our audit was to evaluate the District’s internal controls over Information Technology for the period July 1, 2014 through January 14, 2016.

Background

The Greenville Central School District is located in the Town of Greenville in Greene County. The District, which operates two schools with approximately 1,200 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $28.7 million.

Key Findings

The District has not updated its acceptable use policy since September 2001.

The Board has not adopted a breach notification policy.

The District’s disaster recovery plan was not kept up to date, properly distributed or tested on a regular basis.

The District’s web filter permitted categories that did not appear to be for educational purposes.

Key Recommendations

Update the District’s acceptable use policy to include the use of personal devices on the

District’s network and acceptable use of District assets when used outside the District’s network.

Develop a policy for breach notification.

Ensure that the disaster recovery policy is periodically updated.

Adjust the web content filtering to ensure that staff and students are in compliance with the District’s acceptable use policy.

The text of the audit is posted on the Internet at:

http://www.osc.state.ny.us/localgov/audits/schools/2016/greenville.pdf 

LaFargeville Central School District– Financial Condition

Purpose of Audit

The purpose of our audit was to assess the District`s financial condition for the period July 1, 2014 through April 30, 2016.

Background

The LaFargeville Central School District is located in the Towns of Alexandria, Clayton, Le Ray, Orleans, Pamelia and Theresa in Jefferson County. The District, which operates one school with approximately 560 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $11 million.

Key Findings

The Board and District officials overestimated appropriations when developing budgets for the three fiscal years 2012-13 through 2014-15.

District officials appropriated about $1 million of fund balance in each of the past three

fiscal years but the District experienced operating surpluses each year that averaged about $225,000 annually, and as a result, the District did not use any of the appropriated fund balance.

The Business Manager has developed a long-term planning model used when preparing the District’s annual budget but the Board has not officially adopted this or any other multiyear plan to address the District’s use of its excess fund balance.

Key Recommendations

Adopt budgets that represent the District’s actual needs, based on current information and historical data.

Discontinue the practice of adopting budgets that result in the appropriation of fund balance that will not be used.

Formulate a long-term multiyear capital and operational plan that addresses the use of excess unrestricted fund balance in the general fund in a manner that benefits District residents.

The text of the audit is posted on the Internet at:

www.osc.state.ny.us/localgov/audits/schools/2016/lafargeville.pdf

The conduct of a municipality or government entity may serve to ratify the terms and conditions of an agreement not approved as provided by law

The conduct of a municipality or government entity may serve to ratify the terms and conditions of an agreement not approved as provided by law

Prudenti v County of Suffolk, Appellate Division, 2016 NY Slip Op 06203

On September 20, 2011, the then Suffolk County Executive entered into a Memorandum of Agreement [MOA] with the Suffolk County Deputy Sheriffs Police Benevolent Association [DSPBA] pursuant to which DSPBA agreed to defer the payment of approximately $4 million in retroactive pay increases its members that had been awarded to DSPBA members by an arbitration panel for the period January 2008 through December 2010 until December 2015. In exchange, Suffolk County agreed not to transfer any of the DSPBA members' official duties to other law enforcement officers through December 2017. Suffolk and DSPBA also agreed that any disputes concerning the interpretation and, or, implementation of any provision of the MOA could be submitted to arbitration.

Notwithstanding the “no transfer” provision in the MOA, in September 2012, the successor County Executive and the County entered into an agreement with the Suffolk County Police Benevolent Association [PBA] that provided that the County would transfer certain highway patrol and enforcement work previously assigned to DSPBA members to PBA members.

DSPBA filed a demand for arbitration and subsequently commenced a CPLR Article 75 action seeking a preliminary injunction prohibiting Suffolk County from transferring the highway patrol and enforcement work to members of the PBA pending resolution of the arbitration proceeding and, in addition, for a judgment declaring that the MOA is valid and enforceable.

Suffolk County cross-moved to permanently stay the arbitration proceeding contending [1] that no valid agreement to arbitrate the MOA had been made and [2] that the wage deferral provisions of the MOA were invalid because they called for an additional appropriation of funds that had not been approved by the County Legislature.* The Suffolk County Superior Officers Association [SOA] and PBA joined in the motions to stay the arbitration and to dismiss DSPBA’s complaint.

Supreme Court held that the MOA entered into by the former Suffolk County Executive and the DSPBA was valid and enforceable and rejected motions pursuant to CPLR 7503(b) by Suffolk, the PBA, and the SOA to permanently stay arbitration. The court also directed Suffolk County and DSPBA to proceed to arbitration. Suffolk County, PBA and SOA appealed.

The Appellate Division first ruled that, contrary to the contentions of Suffolk County, the PBA, and the SOA, Supreme Court's declaration upholding the validity of the MOA was procedurally proper.

Addressing the merits of the action, the Appellate Division held that Supreme Court correctly determined that the MOA was valid and enforceable as matter of law, regardless of whether the wage deferral provisions required legislative approval pursuant to Civil Service Law §204-a(1), because the County Legislature had ratified those provisions by its conduct.

The court explained that a contract that is not approved by the relevant municipal or governmental body as required by law, rule, or regulation may be ratified by the municipality or government body by its subsequent conduct. In this instance, said the Appellate Division, it was demonstrated “prima facie” that the County Legislature “accepted the benefits of the MOA and partially performed thereunder with knowledge of its terms in a manner clearly referable to the agreement.”

As the County, the SOA, and the PBA failed to raise a triable issue of fact, the Appellate Division said the Supreme Court properly concluded that the County Legislature had ratified the MOA.

* Civil Service Law §204-a.1 requires that “Any written agreement between a public employer and an employee organization determining the terms and conditions of employment of public employees shall contain the following notice in type not smaller than the largest type used elsewhere in such agreement: "It is agreed by and between the parties that any provision of this agreement requiring legislative action to permit its implementation by amendment of law or by providing the additional funds therefor, shall not become effective until the appropriate legislative body has given approval."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06203.htm