Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Source: OATH

Underperforming assigned tasks

OATH Index No. 2077/17

An associate retirement benefits examiner was charged with incompetence for failing to complete the required daily number of cases. ALJ Noel R. Garcia found that the examiner was required to complete an average of three cases per day, but only averaged less than one case per day over a ten month period. He concluded that the examiner was consistently unable to perform her fundamental responsibilities. 30-day suspension recommended, agency imposed a 25-day suspension

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-2077.pdf

Refusal to obey a supervisor's lawful order

OATH Index No. 926/1

ALJ John B. Spooner recommended a 15-day suspension for a job opportunity specialist who was insubordinate and discourteous towards a supervisor. The employee refused to obey an order to process benefits, and he threw paper and gestured with his fist at the supervisor. This conduct caused the supervisor, who suffered from a stroke-related disability, to request early retirement to avoid similar encounters which could adversely affect her health. 

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-926.pdf

Delay in addressing alleged misconduct denied employee an opportunity to correct his or her conduct

OATH Index No. 1420/17

A sanitation supervisor was charged with failing to carry out his supervisory responsibilities, failing to accurately prepare, record and maintain information, and with failing to cooperate with an official inquiry. ALJ Kara J. Miller found that many of the charges involved incidents that occurred five to six years ago, which ultimately deprived the supervisor of an opportunity to correct his conduct because petitioner did not timely address the alleged misconduct. ALJ Miller sustained some of the charges, finding that the supervisor failed to accept responsibility.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-1420.pdf

Determining the validity of an employee's "release of claims" against an employer

Determining the validity of an employee's "release of claims" against an employer

Charlery v New York City Department of Education, USCA, Second Circuit, Docket No. 17-1888

Jacqueline Charlery filed an action against the City of New York Department of Education, Board of Education of the City School District of the City of New York [Education] alleging claims for unlawful discrimination and retaliation in violation of the Americans with Disabilities Act and the Rehabilitation Act. Education filed a motion for judgment on the pleadings, converted by the district court, after giving notice to the parties, into a motion for summary judgment.

The court then found that Charlery had released her federal discrimination and retaliation claims in an agreement settling an earlier personal injury lawsuit against Education, granted Education's motion and entered judgment in Education's favor. Charlery appealed the district court's action.

With respect to the effect of a "release" entered into in the course of judicial proceeding, the Circuit Court, citing Livingston v Adirondack Beverage Co., 141 F.3d 434, explained that “[T]he validity of a release is a peculiarly fact-sensitive inquiry.”

Noting that in Charlery's alleged release appearing directly above the signature line is language stating “THE UNDERSIGNED HAS READ THE FOREGOING RELEASE AND FULLY UNDERSTANDS IT”, the Circuit Court said that “[w]e employ a ‘totality of the circumstances’ test to determine whether a release of . . . claims is knowing and voluntary,” explaining that the relevant factors courts should consider include:

(1) the plaintiff’s education and business experience,

(2) the amount of time the plaintiff had possession of or access to the agreement before signing it,

(3) the role of plaintiff in deciding the terms of the agreement,

(4) the clarity of the agreement,

(5) whether the plaintiff was represented by or consulted with an attorney, and

(6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law.

The Circuit Court opined that "The district court did not err when assessing these factors and concluding that Charlery’s waiver was knowing and voluntary."

Analyzing the first five factors listed above, the court noted that "Charlery, being a teacher, is a well-educated, trained professional." However, said the court, the time and role she played in deciding its terms - weigh in favor of a finding that the waiver was not knowing and voluntary. Although Charlery stated that she had read the agreement and signed the release the same day she received it and although she was represented by counsel in the settlement of the lawsuit, she played no role in negotiating the terms of the release.

However, continued the Circuit Court, the clarity of the agreement favors a finding that the waiver was knowing and voluntary as the agreement stated that Charlery was releasing Education from “any and all claims” for “any matter, cause or thing whatsoever that occurred through the date” the release was executed as Charlery was represented by counsel in that lawsuit.

The sixth factor, said the court, was inapplicable to this case because Charlery had not claimed that she was entitled by contract or law to receive "benefits" and  the issues involved alleged federal discrimination and retaliation claims.

Balancing the totality of the circumstances, the Circuit Court concluded "as the district court did," that in executing the release Charlery knowingly and voluntary waived her federal discrimination and retaliation claims and held that the district court did not err when it entered summary judgment in favor of Education on Charlery's federal claims.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/doc/17-1888_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/hilite/

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

In  Re Derogatis v Board Of Trustees of the Welfare Fund of The International Union of Operating Engineers Local 15, 15A, 15C & 15D, AFLCIO, et al., USCA, 2nd Circuit, Dockets Nos. 16-977-cv, 16-3549-cv

Emily DeRogatis appealed a District Court ruling awarding summary judgment to the Welfare Fund on her claims for relief asserted under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§1001 et seq. The genesis of these actions were certain "oral miscommunications" by Plan personnel to the DeRogatises before Mr. DeRogatis' death in 2011 involving [1] the Pension Plan governing the benefits payable to Mrs. DeRogatis as a surviving spouse after the death of her husband and [2] the Welfare Plan governing Mrs. DeRogatises’ entitlement to health benefits during and after Mr. DeRogatis' lifetime.

The Circuit Court agreed with the lower court's ruling that the Pension Fund trustees correctly denied DeRogatis’s request for an augmented survivor benefit following her husband’s death because the Pension Plan’s summary plan description adequately described the eligibility requirements for the benefits in question and thereby satisfied the trustees’ fiduciary duty to provide complete and accurate information to plan participants and beneficiaries and affirmed the lower court's granting the Fund's motion  for summary judgment in Docket No. 16-3549-cv.

Significantly, however the Circuit Court rejected the District Court's holding that "a plan administrator cannot be held liable for unintentional misrepresentations made about the plan’s operation by its non-fiduciary, 'ministerial' agent and on this basis denied the claim."

As to claims involving No. 16-977-cv, noting that the District Court granted summary judgment for defendants on this claim on the same “ministerial employee” ground, the Circuit Court rejected the District Court’s conclusion that the Welfare Plan summary plan description explained clearly its participants’ options to receive post-retirement health benefits."

Rather, said the court, given the evidence that Welfare Fund agents misstated material aspects of those same benefits when communicating with the DeRogatises, the Circuit Court identified as an open question of material fact "whether the Welfare Fund trustees breached their fiduciary duty to provide plan participants with complete and accurate information about their benefits" and vacated the judgment entered in favor of the Welfare Fund defendants by the lower court with respect to No. 16-977-cv.

Althought the Circuit Court opined that Welfare Fund defendants "may yet be entitled to summary judgment if they demonstrate that DeRogatis is not entitled to any equitable relief, thereby negating the final element of DeRogatis’s §502(a)(3) claim," the District Court's judgment with respect to No. 16-977-cv was vacated and the matter remanded to the lower court for further proceedings "consistent with this opinion." 

In contrast, the same is not always the rule where the administrative error is to the benefit of the individual. 

In Morley v Arricale, 66 N.Y.2d 665, the Court of Appeals said that "Estoppel is not available against a local government unit for the purpose of ratifying an administrative error ... made without compliance with formally adopted selection standards and procedures while in Galanthay v New York State Teachers' Retirement Sys., 50 NY2d 984, the court held that the retirement system "is obligated to correct errors in the computation of retirement benefits and the recoupment of funds erroneously paid is proper." 

The DeRogatis decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/doc/16-977_16-3549_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/hilite/

Complying with New York State mandatory sexual harassment training requirements

Complying with New York State mandatory sexual harassment training requirements*

By October 2018 employers in New York State either must have adopted the State's "Model Sexual Harassment Policy" or a similar policy and training procedure that meet or exceeds the State’s minimum standards.

In the event an employer does not adopt the State's model Sexual Harassment Policy, the policy adopted by the employer must: 

• prohibit sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights
• provide examples of prohibited conduct that would constitute unlawful sexual harassment
• include information concerning the federal and state statutory provisions concerning sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be applicable local laws
• include a complaint form
• include a procedure for the timely and confidential investigation of complaints that ensures due process for all parties
• inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially
• clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue
• clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any investigation or proceeding involving sexual harassment is unlawful

In addition, every employer in New York State is required to provide employees with sexual harassment prevention training. An employer that does not use the model training developed by the Department of Labor and Division of Human Rights must ensure that the training that they use meets or exceeds the following minimum standards.

The training must:

• be interactive
• include an explanation of sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights
• include examples of conduct that would constitute unlawful sexual harassment 
• include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment
• include information concerning employees’ rights of redress and all available forums for adjudicating complaints
• include information addressing conduct by supervisors and any additional responsibilities for such supervisors

Each employee must receive training on an annual basis, starting October 9, 2018. A number of organizations such as Paragon Compliance, LLC at https://www.paragoncompliancellc.com/, offer online interactive anti-sexual harassment training. 

* See §201-g of the New York State Labor Law.

Also note the following: 

1. New York City has adopted a Local Law, Local Law 96 of 2018, amending the administrative code of the City of New York in relation to anti-sexual harassment training mandating that all private employers with 15 or more employees conduct annual anti-sexual harassment training for all its employees, including supervisors and managerial employees of such employer. See New York City Administrative Code § 8-107 and New York City Charter § 815.1. ;

2. §5-336 of the General Obligations Law provides as follows: 

"Nondisclosure agreements. Notwithstanding any other law to the contrary, no employer, its officers or employees shall have the authority to include or agree to include in any settlement, agreement or other resolution of any claim, the factual foundation for which involves sexual harassment, any term or condition that would prevent the disclosure of the underlying facts and circumstances to the claim or action unless the condition of confidentiality is the complainant's preference. Any such term or condition must be provided to all parties, and the complainant shall have twenty-one days to consider such term or condition. If after twenty-one days such term or condition is the complainant's preference, such preference shall be memorialized in an agreement signed by all parties. For a period of at least seven days following the execution of such agreement, the complainant may revoke the agreement, and the agreement shall not become effective or be enforceable until such revocation period has expired."; and

3. §139-l of the State Finance Law provides, in pertinent part, for the inclusion of a statement on sexual harassment in bids pursuant to which:

"Every bid hereafter made to the state or any public department or agency thereof, where competitive bidding is required by statute, rule or regulation, for work or services performed or to be performed or goods sold or to be sold, shall contain the following statement subscribed by the bidder and affirmed by such bidder as true under the penalty of perjury: 'By submission of this bid, each bidder and each person signing on behalf of any bidder certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that the bidder has and has implemented a written policy addressing sexual harassment prevention in the workplace and provides annual sexual harassment prevention training to all of its employees. Such policy shall, at a minimum, meet the requirements of section two hundred one-g of the labor law.'"

 

Former Croton-On-Hudson village fire department treasurer pleads guilty in theft of fire department funds

Former Croton-On-Hudson village fire  department treasurer pleads guilty in theft of fire department funds

Source: Office of the State Comptroller

Comptroller Thomas P. DiNapoli, Westchester County District Attorney Anthony A. Scarpino, Jr. and Village of Croton-on-Hudson Police Chief Russel H. Harper announced that Gerald Munson, a former Croton-On-Hudson Fire Department Chief and a former Croton-On-Hudson Police Officer who most recently served as the fire department treasurer, has pleaded guilty to Grand Larceny in the Second Degree as a crime of Public Corruption, a class B felony. The charge is related to the theft of more than $300,000 from the Croton-on-Hudson Fire Department.

Munson appeared in Westchester County Court Wednesday before Judge Michael Martinelli. At the time of his plea, he also paid $124,383 in restitution, added to the $25,000 he paid upon arraignment. Munson is scheduled for sentencing Oct. 29, 2018 at which time he is expected to pay the remainder of restitution.

As fire department treasurer, Munson was responsible for maintaining the Croton-on-Hudson Fire Department bank account and financial records despite having no prior qualifications or background in accounting or financial matters. The felony complaint alleges that he used his position as treasurer to steal and conceal his theft of approximately $312,925 from the Fire Department.

The money he stole included portions of the so-called “2 Percent Money” paid annually to the Fire Department by New York State in connection with the State’s two percent tax on fire insurance. For years, Munson was able to conceal his ongoing theft by altering and manipulating the Department’s bank records. Those alterations and manipulations included his underreporting of the amount of “2 Percent Money” received by the Department in order to balance the books and hide what he stole for himself.

In February 2018, members of the Fire Department’s internal Audit Committee discovered that Munson had provided them with false 2017 bank statements. When confronted by the Audit Committee, Munson admitted he had created the false statements on his home computer; that he had stolen money from the Department’s account for his own personal use; and that he had used the Fire Department’s debit card as if it were his own.

Further investigation and analysis conducted jointly by the New York State Comptroller’s Office, the Village of Croton-on-Hudson Police Department and the Westchester County District Attorney’s Office confirmed that between January 2011 and February 2018, the defendant stole approximately $312,925 from the Fire Department. This joint investigation lead to Munson’s arrest and felony charge.

The Village of Croton-on-Hudson Police Department arrested Munson in June 2018.

“Mr. Munson stole more than $312,000 from his fire department and abused his duty to the public. As a former police officer and fire department chief, his behavior is particularly egregious," said Comptroller DiNapoli, thanking Westchester District Attorney Scarpino and the Croton-on-Hudson Police Department for working with his office to bring Mr. Munson to justice.

“Stealing public money is a crime against all of us. It is also a breach of trust that hurts a community and those dedicated to its safety,” said Westchester County District Attorney Anthony A. Scarpino, Jr. “Rooting out corruption takes thorough investigation on the part of many departments. We are proud of this collaboration between our Office, the Village of Croton-on-Hudson Police Department and the New York State Comptroller’s Office which was able to shed light on this misuse of public funds.”

“I want to thank Westchester District Attorney Anthony Scarpino and the Investigations Division Public Integrity Bureau, New York State Comptroller Thomas P. DiNapoli and the Croton Volunteer Fire Department Audit Committee for assisting the Croton Police Department in conducting this investigation. It was through this collaborative effort that justice will be served,” said Village of Croton-on-Hudson Police Chief Russel H. Harper.

Assistant District Attorney Brian Fitzgerald, Deputy Bureau Chief of the Westchester District Attorney’s Office Investigations Division Public Integrity Bureau, is prosecuting the case.

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