Challenging an arbitration decision and award

The collective bargaining agreement [CBA] at issue provided that in selecting teachers to be transferred within the school district the "[l]ength of teaching experience in the school system" would the controlling factor "where all other factors are substantially equal."

The employee organization [Association] representing the School District's [District] teachers filed grievances on behalf of two of its members in the collective bargaining unit who were passed over for transfers to a particular school in the District in favor of unit members with less seniority. The grievances ultimately were submitted to arbitration and the arbitrator issued opinions finding that the District had not violated the CBA and dismissed the grievances.

The Association subsequently filed a timely CPLR Article 75 petition challenging the arbitrator's decision.  Supreme Court dismissed the petition and the Association again appealed.

The Appellate Division affirmed the Supreme Court's ruling, which in effect confirmed the arbitration award, explaining that the arbitrator here determined that School District did not violate the seniority provision of the CBA with respect to the grievants because "all other factors" were not "substantially equal."

Rejecting the Association's contention that the arbitrator exceeded his power in rendering the award, the Appellate Division, quoting Matter of Board of Educ. of Arlington Cent. School Dist. v Arlington Teachers Assn., 78 NY2d 33, explained that "It is well settled that an arbitrator exceeds his or her power within the meaning of CPLR 7511(b)(1)(iii) where, inter alia,* the arbitration award "is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Further, said the court, "An arbitrator's interpretation may even disregard the apparent, or even the plain, meaning of the words of the contract before him [or her] and still be impervious to challenge in the courts." 

Citing Finger Lakes Region Police Officers Local 195 of Council 82, AFSCME, AFL-CIO [City of Auburn], 103 AD3d 1237, the Appellate Division said that although "a different construction could have been accorded to the subject provision of the [CBA],  ...  it cannot be stated that the arbitrator gave a completely irrational construction to the provision in dispute and, in effect, exceeded [his] authority by making a new contract for the parties."

The Appellate Division also rejected the Association's contention that the arbitrator's award was irrational. An award is irrational, said the court, if there is no proof whatever to justify the award. Otherwise "[a]n arbitration award must be upheld when the arbitrator offer[s] even a barely colorable justification for the outcome reached," opining that in this instance "there is a colorable justification for the arbitrator's determination."

The Appellate Division then affirmed Supreme Court's order denying the Association's petition seeking to vacate the arbitration award and granting School District's request to confirm the arbitration award.

* Latin for "among other things." This phrase is frequently found in legal writings to indicate the reference is but "one example" of many possible examples that could be cited.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_04647.htm

Evaluation of conflicting medical evidence by an appointing authority

A deputy sheriff [Deputy] was injured in a work-related accident and was receiving benefits pursuant to §207-c of the General Municipal Law.* Following the receipt of a report from an orthopedic surgeon indicating that Deputy was capable of returning to work if assigned to work a "light duty position, Deputy was notified by the Sheriff's Department [Department] that [1] his §207-c benefits would be discontinued and [2] he would be place in a light-duty assignment with the Department. Deputy declined the light duty assignment and, as provided for in the relevant collective bargaining agreement, requested a hearing concerning the Department's decision.** 

A hearing was held and the Hearing Officer determined that Deputy's benefits [1] had been improperly terminated and [2] recommended that Deputy's benefits be reinstated retroactively.

The Department rejected the Hearing Officer's determination and recommendation without providing any explanation for its decision and Deputy commenced an Article 78 CPLR proceeding seeking, among other things, a court order annulling the Department's determination.

Citing Matter of Alverson v Albany County, 173 AD3d 1415, the Appellate Division said  that the Department failure to make any findings or otherwise specify any basis for its determinations "deprived the court of the ability to conduct meaningful judicial review." According, the court annulled the Department's determination and remitted the matter to it "to address the procedural issues and develop appropriate factual findings."

Upon remittal, the Department considered the conflicting medical evidence in the record concerning whether Deputy was capable or incapable of performing light-duty work.

Deputy's primary care physician had testified that Deputy's work-related injuries "rendered him wholly incapable of returning to work in any capacity" while a physician assistant working under the primary care physician supervision testified that Deputy would be capable of performing the specific tasks that he would be assigned as part of his light-duty assignment only if he was permitted "to take his prescribed pain medications."

In contrast, the testimony and independent medical examination report of the Department's medical expert supported the conclusion that Deputy was capable of returning to work in a modified or light-duty capacity.

The Department, after evaluating the testimony of the medical experts, found that Deputy was capable of performing light-duty work and that his §207-c benefits had been properly terminated in accordance with the terms and conditions of collective bargaining agreement. In so doing the Department credited a "work abilities checklist" completed by an orthopedic surgeon and the medical opinion given by its medical expert over the medical evidence presented by Deputy's medical experts.

Based upon that credibility determination, Department found that Deputy was capable of returning to work in a light-duty capacity and Deputy next filed the instant CPLR Article 78 petition challenging the Department's ultimate decision.

The Appellate Division dismissed Deputy's petition, concluding that [1] the Department's resolution of the conflicting medical evidence was rational, fact-based and  supported by the record, and [2] substantial evidence supported the Department's determination to terminate Deputy's §207-c benefits "notwithstanding the existence of evidence that could support a contrary conclusion."

The court, Judge Colangelo, dissenting,*** explained that a "Judicial review of an administrative determination made after a hearing at which evidence is taken pursuant to direction of law is limited to a consideration of whether that determination was supported by substantial evidence upon the whole record," noting that "Substantial evidence consists of 'such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact.'"

In the words of the Appellate Division, "[W]here the medical evidence [is] in conflict, it [is] for the administrative agency to choose between the conflicting opinions, and the courts are not free to reject the choice made by the administrative agency where room for choice exists."

* General Municipal Law §207-c provides for the payment of salary, wages, medical and hospital expenses of law enforcement personnel having injuries or illness incurred in the performance of duty.

** The "stipulated issue" to be addressed at the hearing was whether Deputy's §207-c benefits had been properly terminated.

*** Justice Colangelo opined that "As the majority notes, [Deputy] adduced credible medical evidence — namely, the testimony of his primary care physician and a registered physician assistant — in support of his contention that he was incapable of even light-duty work at the time that [the Department] terminated his General Municipal Law §207-c benefits" and in Judge Colangelo's view the Department's determination was not supported by substantial evidence and he would annul it.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_04621.htm

State agency audits issued by New York State Comptroller Thomas P. DiNapoli

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued during the week ending August 20, 2020.

Click on the text highlighted in color to access the full report.

Office of Children and Family Services (OCFS): Oversight of Runaway and Homeless Youth (2019-S-47) OCFS has generally established controls but is not conducting program and fire safety inspections for certified runaway and homeless youth programs and facilities. Auditors found OCFS did not always conduct inspections within established time frames as 57 of 186 program inspections (31 percent) and 23 of 184 fire safety inspections (13 percent) were late. Additionally, they found various safety conditions needed to be improved. These included missing smoke detectors, missing outlet covers, overloaded power strips, and water damage to ceilings with possible mold. 

Office of General Services: Summit Security Services Inc. (2019-BSE3-001) OGS paid Summit more than $867,000 for 40 individuals provided by Summit’s subcontractor, Bestworth, who did not meet the contract qualifications for security guards. Bestworth’s president acknowledged none of the 40 employees who provided security guard services at the Adam Clayton Powell Jr. State Office Building took a drug test. Furthermore, 27 of these individuals lacked other necessary qualifications, including the required New York State Department of State Security Guard registration. 

Department of Civil Service: New York State Health Insurance Program: CVS Health – Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (2019-S-51) The Department of Civil Service contracted with CVS Health to administer the Empire Plan’s prescription drug program for the period Jan. 1, 2014 through Dec. 31, 2018. CVS Health was required to negotiate agreements with drug manufacturers for rebates, discounts, and other consideration and remit the rebate revenue to Civil Service. Auditors reviewed discrepancies between the drug rebates that CVS Health invoiced versus collected from drug manufacturers and found CVS Health did not always collect and remit all rebate revenue to Civil Service. As a result, Civil Service is due $453,029 in rebates. 

Department of Civil Service: New York State Health Insurance Program – Payments by Empire BlueCross for Hospital Services for Ineligible Members (2019-S-32) The audit identified 3,177 claims totaling $18.2 million that were paid for hospital services provided during periods when members were not eligible. The claims were paid due to various reasons, including retroactive disenrollments. For retroactive disenrollments, it took an average of nearly 400 days to cancel members’ coverage. Empire recovered $11.5 million and $2.1 million was beyond recoverability time frames, leaving $4.6 million to be recovered. 

Empire State Development (ESD): Oversight of Select High-Technology Projects (2017-S-60) ESD has provided millions of dollars to private companies in high-tech sectors with the goal of creating jobs and increasing private investment. While ESD has effective practices for monitoring specific programs, it has not adequately monitored other high-tech projects to ensure that taxpayer money is effectively spent and is producing the intended results. 

Homeless Housing and Assistance Corp.: Homeless Housing and Assistance Program (HHAP) – Project Selection and Maintenance (2020-F-14) (Follow-up) An audit issued in January 2019 found that, of the 51 projects that were awarded funding by HHAP during the three-year period ending March 31, 2016, all but one were operational or in the pre-construction or construction phase within two to four years of being awarded funding. Auditors also identified several areas for improvement. In a follow-up, auditors found HHAP has made progress in addressing the problems identified in the initial audit report; however, additional improvements are needed. 

Metropolitan Transportation Authority – New York City Transit (NYCT) – Signal Maintenance, Inspections, and Testing (2019-F-58) (Follow-up) An audit issued in October 2017 found NYCT did not always perform required tests of its signal equipment within required intervals and supervisors were often late in inspecting equipment. NYCT also did not have an inventory system to account for the equipment it maintains. In a follow-up, auditors found NYCT has made progress in addressing the issues identified. Of the 18 prior recommendations, three were implemented, 10 were partially implemented and five were not addressed. 

Office for People With Developmental Disabilities (OPWDD): Controls Over Transportation Services and Transportation-Related Expenses (2019-S-38) Auditors reviewing upstate New York OPWDD transportation services and related expenses found it could improve accountability over transportation expenses and services and doesn’t have controls in place to educate or improve driving skills for employees with frequent driver license interruptions or serious violations (e.g., speeding, disobeying traffic devices, driving while intoxicated). OPWDD could also improve controls to ensure vehicle recalls are repaired in a timely manner. Auditors found that 219 vehicles had 235 unresolved (open) recall notices. Most (201) had been open for over nine months. 

Office for People With Developmental Disabilities (OPWDD): Oversight of Passenger Safety (Follow-Up) (2020-F-1) An audit released in October 2018 found that OPWDD did not analyze traffic violations to identify whether employees in the New York City region needed training or counseling, or if they should be reassigned. The audit also found that four regional Developmental Disabilities Services Offices were not properly identifying drivers whose licenses had been suspended. In addition, repairs related to manufacturer recalls were not being performed in a timely manner or at all. In a follow-up, auditors found OPWDD has made limited progress in addressing the problems identified in the initial audit. 

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The anatomy of a student disciplinary hearing conducted by a public institution of higher education

Following the student's [Student] administrative disciplinary hearing and the Students administrative appeal of the hearing decision, a unit of State University of New York [SUNY] suspended Student  for three years and noted Student's college transcript accordingly. Student initiated a CPLR Article 78 proceeding seeking a court order annulling SUNY's actions.

Among the elements of SUNY's administrative disciplinary procedures challenged by Student, and considered by the Appellate Division, were the following:

1. Due Process: 

Citing Matter of Sharma v State Univ. of N.Y. at Buffalo, 170 AD3d 1565, among other decisions., the Appellate Division concluded that SUNYsubstantially adhered to its procedural rules with respect to the administrative disciplinary proceedings involving Student and that the alleged violations of those rules did not deny Student"the full panoply of due process guarantees to which he was entitled or render ... the finding of responsibility or the sanction imposed arbitrary or capricious".

2. Discovery: 

The Appellate Division rejected Student's contention that SUNY denied him due process with respect to his judicial appeal, explaining that "[i]n a disciplinary proceeding at a public institution of higher education, due process entitles a student accused of misconduct to a statement detailing the factual findings and the evidence relied upon by  [SUNY's] decision-maker in reaching the determination of [Student's] guilt ... and here the record reflects that [Student] was provided with the documents that were relied on by [SUNY]" in making such determinations.

3. Assistance of counsel: 

The court dismissed Student's claim that he was denied the assistance of counsel at his hearing, noting Student was, as authorized by SUNY's administrative hearing procedures, assisted by an attorney advisor throughout the disciplinary process, including such assistance at the hearings.* 

4. Prosecuting an effective appeal: 

Notwithstanding Student's contention to the contrary, the Appellate Division opined that SUNY's written determinations did not violate Student's right to due process as they contained sufficient detail "to permit [Student] to effectively challenge the determination in administrative appeals and in the courts and to ensure that the decision was based on evidence in the record," nor did the record support Student's claim that the determination with respect to his administrative appeal was based on matters outside of the record.

Finding that SUNY's determination was supported by substantial evidence, the Appellate Division said it perceived no basis to disturb SUNY's decision. 

* The Appellate Division also rejected Student's claim that he was denied due process as the result of SUNY's alleged failure "to call live witnesses or to accept questions to be asked of such live witnesses."

The decision is posted on the Internet at: 
http://www.nycourts.gov/reporter/3dseries/2020/2020_04628.htm

Defending and indemnifying employees of the City of New York being sued in a civil action

§50-k(3) New York State's General Municipal Law provides that New York City must, if certain conditions are satisfied, defend and, if necessary, indemnify, an employee being sued in a civil action related to the employee's conduct performed in compliance with the rules and regulations of the employee’s agency at the time the plaintiff was injured, so long as the injury to the plaintiff did not result from the employee’s intentional wrongdoing or recklessness.*

Two New York City police officers [jointly Defendants] had arrested an individual [Accused] and charged him with disorderly conduct, harassment, obstruction of governmental administration, and resisting arrest. After obtaining video footage of the incident, prosecutors dismissed all charges.

The Accused then filed a lawsuit pursuant to 42 U.S.C. §1983 alleging false arrest, malicious prosecution, the use of excessive force, denial of the right to a fair trial, a failure of a police officer to intervene in the course of the incident, and First Amendment violations, as well as malicious prosecution in violation of New York state law, against the City of New York [City], the Defendants, and another New York City police officer. A federal district court jury found for the Accused and Defendants appealed.

One of issues raised by Defendants in the district court was the City’s decision not to provide for their defense and indemnification under color of General Municipal Law §50-k(3). The Circuit Court held that "the district court did not err" in denying Defendants’ request for an evidentiary hearing" addressing the City's decision not to provide for Defendants' defense and indemnification.

The Circuit Court held that whether the employee's act or omission was in violation of an agency rule, or was within the employee’s scope of employment was a factual determination to be made in the first instance by the City's Corporation Counsel, whose determinations may be set aside only if they are not supported by the evidence or are in some other sense ‘arbitrary and capricious.” Further, the Circuit Court noted that the City is not required to indemnify a defendant for “intentional wrongdoing or recklessness.

The Circuit Court opined that the fact that Defendants may have certain employment rights meriting a hearing prior to termination** "says nothing of their right to indemnification after trial." The Circuit Court's decision also observed that "Defendants had a full and fair opportunity to present their defense in court, yet failed to convincingly do so." 

In addition, said the court, in any event, the City "maintains discretion to indemnify officers" and, in consideration of the substantial factual support for the City’s decision, "the district court did not err in denying Defendants’ request for an evidentiary hearing. In the words of the Circuit Court, "The City’s assessment of Defendants’ wrongdoing or recklessness was supported by the findings of the City's Civilian Complaint Review Board, the videotape of the incident, and the federal district court's jury’s findings of liability and awarding of punitive damages."

* See, also, Public Officers Law §17 [defense and indemnification of State officers and employees] and Public Officers Law §18 [defense and indemnification of officers and employees of public entities]. Public Officers Law §19.2(a) addresses the duty of the State, as the employer, to pay reasonable attorneys' fees incurred as the result of a State officer or employee appearing before a Grand Jury or in a criminal proceeding arising out of any act which occurred while such individual was acting within the scope of  his public employment or duties.

** Subdivision 5 of §50-k(3) provides that "[i]n the event that the act or omission upon which the court proceeding against the employee is based was or is also the basis of a disciplinary proceeding by the employee's agency against the employee, representation by the corporation counsel and indemnification by the city may be withheld (a) until such disciplinary proceeding has been resolved and (b) unless the resolution of the disciplinary proceeding exonerated the employee as to such act or omission."

The decision is posted on the Internet at:

https://www.ca2.uscourts.gov/decisions/isysquery/59c1a0cd-0da0-4f63-a556-2e35a1e5f76c/1/doc/19-769_so.pdf#xml=https://www.ca2.uscourts.gov/decisions/isysquery/59c1a0cd-0da0-4f63-a556-2e35a1e5f76c/1/hilite/