Employee alleges employer ignored her sexually hostile work environment and the negligent supervision claims

Plaintiff's claim of negligent supervision was based on, among other things, Office for People with Developmental Disabilities, an agency of  State of New York [collectively "Defendants"]  alleged failure to properly supervise its employees by allowing acts and words of retaliation against her following her report of patient abuse by another supervisor and her assistance in the investigation of that abuse.

Following a trial, a jury found in plaintiff's favor on the sexually hostile work environment and the negligent supervision claims against Defendants and dismissed the sexual harassment claim against a named individual defendant. Plaintiff was awarded $300,000 in damages on her sexually hostile work environment claims and $200,000 in damages on her negligent supervision claim.

Supreme Court denied Defendants' subsequent motion to set aside the jury verdict or, in the alternative, to order a new trial, and partially granted plaintiff's request for counsel fees. Defendants appeals from the judgment entered upon the jury verdict and from the order denying its postverdict motion. Plaintiff cross-appeals from that part of the order as partially denied her request for counsel fees.

Considering Defendants' argument that the jury verdict was unsupported by legally sufficient evidence and against the weight of the evidence the Appellate Division said that "A verdict may be set aside as unsupported by legally sufficient evidence where 'there is simply no valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial.'" In contrast, citing Matter of Grancaric, 68 AD3d 1279 the court explained that a jury verdict will be stricken as against the weight of the evidence "where the proof so preponderated in favor of the unsuccessful party that the verdict could not have been reached on any fair interpretation of the evidence."

Addressing Plaintiff's sexually hostile work environment claims, the decision noted that "an individual plaintiff must show that his or her workplace was permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of [his or her] employment and create an abusive working environment" and all circumstances must be considered, including the frequency of the alleged discriminatory conduct; its severity; whether it was physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfered with [an employee's] work performance.

In addition, the Appellate Division, citing Forrest v Jewish Guild for the Blind, 3 NY3d 298, opined that "the workplace must be both subjectively and objectively hostile" whereby a plaintiff must not only perceive that the conditions of his or her employment were altered because of discriminatory conduct, but the conduct must also "have created an objectively hostile or abusive environment — one that a reasonable person would find to be so."

However, as the Court of Appeals held in State Div. of Human Rights v St. Elizabeth's Hosp., 66 NY2d 684, "An employer cannot be held liable for an employee's discriminatory act unless the employer became a party to it by encouraging, condoning, or approving it." Further, "An employer's calculated inaction in response to discriminatory conduct may, as readily as affirmative conduct, indicate condonation," while an employer may "disprove condonation by a showing that it reasonably investigated complaints of discriminatory conduct and took corrective action.

Rejecting Defendants' argument that the verdict on the hostile work environment claims should have been set aside because it was not based on legally sufficient evidence and was contrary to the weight of the evidence, the Appellate Division held that "the evidence clearly supports the finding that Defendants knew or should have known of [the Plaintiff's coworker's] harassing conduct and failed to take appropriate action" and reached the same conclusion with regard to Plaintiff's negligent supervision claim.

Addressing Defendants' challenge to the amount of damages awarded by the jury, the Appellate Division opined that "a court may set aside a jury award of damages when that award 'deviates materially from what would be reasonable compensation' ... [and a] "A challenge to damages will only be successful where the record evidence preponderates in favor of the moving party to such a degree that the verdict could not have been reached on any fair interpretation of the evidence."

The Appellate Division, considering the jury awarding Plaintiff $300,000 on the hostile work environment claims and $200,000 on the claim against Defendants for negligent supervision, ruled that considering "limited evidence of Plaintiff's psychological trauma and the lack of medical proof as to the effects of the sexual harassment and coworker retaliation upon her" said that the award for damages on the hostile work environment claims should be reduced to $150,000 and the award on the negligent supervision claim should be reduced to $100,000, for a total award of $250,000.

Addressing Petitioner's objection to Supreme Court's reduction of counsel fees to 60% of the $344,067.94 of amount requested in fees and expenses, the Appellate Division concluded that there was no basis upon which to disturb the award made by the lower court. However, the Appellate Division's order included a provision for new trial on the issue of damages "unless, within 20 days after service of a copy of the order herein, Plaintiff stipulates to reduce the total award for said claims to $250,000, in which event said judgment and order, as so modified, are affirmed."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00897.htm

Final order

Addressing Petitioner's objection to Supreme Court's reduction of counsel fees to 60% of the $344,067.94 of amount requested in fees and expenses, the Appellate Division concluded that there was no basis upon which to disturb the award made by the lower court. However, the Appellate Division's order included a provision for new trial on the issue of damages "unless, within 20 days after service of a copy of the order herein, Plaintiff stipulates to reduce the total award for said claims to $250,000, in which event said judgment and order, as so modified, are affirmed."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00897.htm

Arbitration award challenged on the grounds the arbitrator exceed his authority and it violated strong public policy

Plaintiff in this CPLR Article 75 appealed of a Supreme Court's denial of her petition to vacate an arbitration award, contending [1] the award violates strong public policy and [2] the arbitrator exceeded his authority as limited by the Demand to Arbitrate.

The Appellate Division, pointing out that CPLR §7511(b) sets forth the statutory grounds for vacating an arbitration award, noted that such statutory grounds an arbitrator exceeded or imperfectly executed his power. However, opined the court, “an award will not be overturned unless the award violates a strong public policy, is totally irrational or exceeds a specifically enumerated limitation on the arbitrator's power” and that the grounds for vacating an arbitration award are narrowly construed.

With respect to vacating an arbitration award on the grounds that it violates strong public policy, the Appellate Division, citing Matter of Reddy v Schaffer, 123 AD3d 935, said that a court will do so "only where [the] court can conclude, without engaging in any extended fact finding or legal analysis, that a law prohibits the particular matters to be decided by arbitration, or where the award itself violates a well defined constitutional, statutory or common law of this state."

Further, the Appellate Division explained that exceeding expressly enumerated limits on an arbitrator's authority “is a separate basis to invalidate an award as an excess of authority” and which authority is typically set out in the arbitration clause of an agreement, in a statute, or in a notice or demand for arbitration. Significantly, the court noted that “[e]ven where a claim is otherwise arbitrable, the scope of the arbitration is still limited to the specific issues presented and may not extend to those that are materially different or legally distinct.

In addition, the decision cited Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Bd. of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, in which the Court of Appeals held that “[a] public policy argument may be raised for the first time on a motion to vacate, and should be considered by the court.”

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2020/2020_00923.htm

STATE COMPTROLLER DiNAPOLI RELEASES ANALYSIS OF EXECUTIVE BUDGET

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New York's State Comptroller encourages transparency during Medicaid redesign team's deliberations, raises concerns about accounting changes.

Despite projections for healthy gains in tax receipts and continued growth in the economy, the State Fiscal Year (SFY) 2020-21 Executive Budget reflects significant fiscal challenges related, in part, to higher than expected spending in the Medicaid program, according to an analysis released today by New York State Comptroller Thomas P. DiNapoli. With a budget deadline soon approaching, more than a third of the Executive’s proposed nearly $7 billion gap-closing plan remains to be identified by the Medicaid Redesign Team (MRT), creating uncertainty for Medicaid beneficiaries, providers, local governments and the state budget.

DiNapoli also raised concerns about transparency and accountability, including proposed statutory changes that could distort the reporting of revenue and spending in the state’s financial statements and allow the Executive to spend beyond the amounts approved by the legislature. Other proposals would weaken oversight.

“New York’s economy is expanding but the state is still facing a serious budget gap. It’s imperative the Medicaid Redesign Team seek broad input on the root causes and options for addressing rising Medicaid costs,” DiNapoli said. “There is limited time for deliberations before the budget deadline. The state needs to identify long-term solutions for the millions of New Yorkers that rely on Medicaid and the taxpayers who will be footing the bill. Failure to effectively solve the Medicaid problem may result in harmful impacts in other areas of the budget this year and going forward.”

The MRT is charged with identifying savings that can lead to financial sustainability of the program, including meeting the goal of having “zero impact on local governments and zero impact on beneficiaries.” The budget also proposes linking state funding of the local share of certain Medicaid costs to the property tax cap. It is unclear how the budget proposals or any recommendations by the MRT will achieve these potentially conflicting goals.

The Executive budget assumes a second consecutive deferral across fiscal years of $1.7 billion in Medicaid costs. DiNapoli said the deferrals are troubling reminders of historical practices that resulted in a large accumulated structural deficit.

DiNapoli’s analysis also raised concerns about the Medicaid Global Cap. The cap was established in 2011 to promote cost containment efforts, but actions since then have moved various elements of Medicaid spending into or out of the cap. The shifting of the $1.7 billion into SFY 2019-2020, an effort to avoid exceeding the cap, contributed to the ongoing delay in addressing the program’s increasing fiscal challenges.

The financial plan projects SFY 2020-21 total spending at $178 billion, up 1.2 percent. Spending from State Operating Funds is estimated to increase by 1.9 percent. DiNapoli said after adjusting for prepayments and other identifiable budgetary actions, the increase is estimated at 3.1 percent.

The Comptroller urged the Executive to remove language in the 30-day amendment period that seeks to require the comptroller’s cash-basis reports to classify receipts and disbursements in accordance with provisions established by budget legislation. This proposal raises a potential conflict with Article V, Section 1 of the State Constitution, which grants the Comptroller the power to determine accounting methods, and is troubling with respect to transparency and accuracy in financial reporting. Related to this issue, proposed new language would broadly authorize netting of certain revenue against disbursements. Among other concerns, this would cloud the picture of true spending growth and potentially results in significant expenditures beyond the appropriations approved by the legislature.

DiNapoli called the Division of Budget’s plan to deposit $428 million into the Rainy Day Reserve Fund at the end of the current fiscal year a positive step. However, the report noted New York’s rainy day reserves are less than half their authorized levels and no additional deposits are planned. The Comptroller has advanced a proposal to provide a disciplined, consistent approach to building these reserves. This would help ensure that more robust reserves will be available in the event an economic downturn or catastrophic event merits their use. 

The Comptroller’s report also finds:

● School Aid would increase by $826 million, or 3 percent, to $28.5 billion in the coming school year. This increase is less than the 4 percent growth allowable under a statutory limit related to personal income in the state;

● Funding for most local governments aid programs would be held flat, continuing a trend in recent years of decreases or level funding in such areas. These include Aid and Incentives for Municipalities, also known as AIM, the largest unrestricted aid program for local governments, as well as major funding for streets, highways and bridges;

● Total capital spending over the current and next four years is projected at $66.7 billion, little changed from the estimate based on the SFY 2019-20 Enacted Budget. Projected transportation spending is increased $3.3 billion, partly offset by certain unspecified reductions from the previous plan. The budget would appropriate $3 billion for the Metropolitan Transportation Authority’s 2020-2024 capital program, although funding sources are not identified;

● The budget recommends presenting a $3 billion Restore Mother Nature General Obligation (GO) Bond Act to the voters that, if approved, would provide funding to restore habitats, reduce flood risks, improve water quality, protect open space, expand the use of renewable energy and support other environmental projects. DiNapoli said that having voters weigh in on new state debt is a sound approach;

● The budget would authorize an additional $10.3 billion in new state-supported debt, all to be issued by public authorities except the proposed $3 billion Restore Mother Nature GO Bond Act. Outstanding state-supported debt is projected to rise 20.3 percent, and annual debt service 48.4 percent, by SFY 2024-25; and

● The Executive anticipates elimination of 2,500 state prison beds in the coming fiscal year, and a $181.5 million reduction in spending for the Department of Corrections and Community Supervision, partly reflecting budget language that would authorize additional prison closures.

For the full Report click on:

State Fiscal Year 2020-21 Executive Budget Analysis

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Determining if benefits set out in a collective bargaining agreement survive the expiration of the agreement

Seven villages entered into "Joint Police Protection Contract" [SVC] establishing a joint police protective service. The SVC was valid for a five-year period and provided that, upon its expiration or upon a village's withdrawal therefrom, each village "remain[ed] obligated to pay its respective pro rata share ... after expiration or withdrawal." It was further provided that such "costs, liabilities and obligations shall include earned termination benefits as described in relevant sections of collective bargaining agreements [CBA] ...."  that provided for certain retiree health insurance benefits, hereinafter referred to as the "2006 agreement." 

Subsequently one village [Respondent] withdrew from the arrangement effective May 31, 2012 and formed its own police force while the remaining six villages [Plaintiffs] extended the SVC for one year, and then executed a new Six Village SVC.

Plaintiffs commenced this action against Respondent to recover damages for an alleged breach of contract, seeking, as its first cause of action, to recover the present value of Respondent's pro rata share of future retiree health care benefits incurred prior to the SVC expiration date, but paid or becoming due after the CBA's expiration date. Plaintiffs moved for summary judgment but Supreme Court granted Respondent's cross motion for summary judgment dismissing that portion of Plaintiff's first cause of action that involved future retiree health care benefits for any time period after May 31, 2012. 

The Appellate Division said the Respondent's met its prima facie burden for summary judgment, dismissing so much of Plaintiff's first cause of action as sought to recover future retiree health care benefits "to the extent such costs are attributable for any time period after its withdrawal from the SVC." The court explained that "As a general rule, contractual rights and obligations do not survive beyond the termination of a collective bargaining agreement." In contrast, opined the Appellate Division, "[r]ights which accrued or vested under the collective bargaining agreement will, as a general rule, survive termination of the agreement".

Further, said the court, although a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms, in determining whether a CBA creates a vested right to future benefits, "courts should not construe ambiguous writings to create lifetime promises" and when a contract is silent as to the duration of retiree benefits, "a court may not infer that the parties intended those benefits to vest for life."

Here, said the Appellate Division, the primary question was whether, by the terms of the controlling SVC, Respondent obligated itself to contribute to the cost of providing health benefits for retired police officers pursuant to the 2006 CBA. As the 2006 CBA is silent as to the duration of the health benefits promised therein, it must be assumed that those benefits were promised only until the expiration of the 2006 agreement. In the words of the Appellate Division, "[a]lthough the parties and the PBA were certainly free to negotiate for continued, enhanced, or reduced benefits in future CBAs," nothing contained in the text of the subsequent CBAs commits Respondent to the payment of any of the benefits in question upon the termination of the 2006 CBA."

Citing Kolbe v Tibbetts, 22 NY3d at page 353, the Appellate Division noted that CBA language in Kolbe provided for retiree benefits "that continued beyond the expiration of the CBA", explaining that the relevant language in the Kolbe CBA provided that "[t]he coverage provided [in retirement] shall be the coverage which is in effect for the unit at such time as the employee retires". 

As there is no comparable language guaranteeing the same level of benefits beyond the expiration of the 2006 CBA, the health care benefits at issue in the instant litigation did not survive beyond the expiration of the 2006 CBA. Further, the fact that Plaintiffs and the PBA may have bargained for equivalent benefits in future CBAs is irrelevant to the discrete issue of Respondent's liability to Plaintiffs under any subsequent SVC. 

Finding that Respondent established, prima facie, that it was not liable for health care benefits beyond the expiration of the 2006 CBA, the Appellate Division sustained Supreme Court's ruling dismissing so much of Petitioner's first cause of action as sought to recover future retiree health care benefits for any time period commencing after May 31, 2012.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00453.htm