A governmental entity may be subject to the doctrine of estoppel where the injured party has suffered manifest injustice as the result of bureaucratic confusion and deficiencies

Shortly after commencing their employment with the City of New York, the New York City Employees' Retirement System [NYCERS] placed the petitioners [Members] in this CPLR Article 78 action in the Basic Tier 4, 62/5 Retirement Plan [the 62/5 plan] which provided for retirement with full benefits at age 62 after at least 5 years of credited member service.

It was undisputed that the Members' enrollment in the 62/5 plan was in error and that the NYCERS was required by statute to enroll the Members in the Tier 4 57/5 Retirement Plan [the 57/5 plan] which Plan allows for retirement with full benefits at age 57 after at least 5 years of credited member service. The 57/5 Plan also requires greater employee contributions to the NYCERS.* The Members were in the 62/5 plan for more than 20 years, receiving annual statements from NYCERS confirming their membership in that plan.

However, in 2016 NYCERS advised the Members, then respectively 63 and 62 years of age, that their retirement plans were being changed to the 57/5 plan and that they owed additional member contributions because of their belated placement in that plan. The amount respectively due, said NYCERS was $20,198.41 and $24,346.69. This increased employee pension contributions was attributed to required contributions to the 57/5 plan that should have been deducted from their compensation since the time the Members joined NYCERS.

NYCERS also advised the Members that they could pay off their respective deficits "either in a lump sum or through periodic payroll deductions and that any unpaid balance remaining at the time of their retirement would permanently reduce their pension benefits."

The Members commenced this CPLR Article 78 proceeding seeking a court order directing NYCERS to reinstate them in their former 62/5 plan and to reimburse them for any additional pension contributions resulting from their involuntary switch into the 57/5 plan.

Supreme Court found that switching the Members from the 62/5 plan to the 57/5 plan violated Article V, §7 of the New York State Constitution. Further Supreme Court ruled that NYCERS long delay in discovering its error deprived the Members of "any opportunity to retire with full benefits before the age of 62," and it would be "an injustice to require them to make ...  payments when this benefit has been lost," notwithstanding their newly acquired 57/5 members status. NYCERS appealed the Supreme Court's decision.

The Appellate Division, agreeing with NYCERS that the Supreme Court erred in finding that switching the Members from the 62/5 plan to the 57/5 plan violated Article V, §7 of the New York State Constitution, modified the judgment of Supreme Court with respect to the Members' placement in the 57/5 plan in accordance with the applicable statute. The Appellate Division, however, sustained Supreme Court's applying the doctrine of estoppel thus requiring NYCERS to reimburse the Members for any funds collected pursuant to their placement in the 57/5 plan and barring its further collection of any such funds.

Citing Civil Serv. Empls. Assn., Local 1000, AFSCME, AFL-CIO v Regan, 71 NY2d 653 and other decisions, the Appellate Division observed that Article V, §7 "provides in pertinent part that 'membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.'" The Appellate Division then observed that "under the New York State Constitution, '[t]he rights of public employees are . . . fixed as of the time the employee becomes a member of the system,' not at the time of retirement."

Further, opined the Appellate Division:

1. NYCERS is obligated to correct its errors and was required by statute to place the Members in the 57/5 plan;

2. The Members were never were eligible for membership in the 62/5 plan and thus were not entitled to receive benefits hereunder; and

3. The Members were required by law to be placed in the 57/5 plan from the outset of their employment and thus do not possess a constitutionally protected contractual right to be returned to the 62/5 plan.

However, the Appellate Division, noting "the extraordinary circumstances of this case," concluded that the Members had successfully established that NYCERS should be estopped from collecting additional funds resulting from their being placed in the 57/5 plan.

Although the Appellate Division conceded that "[a]s a general rule, estoppel may not be invoked against a governmental body to prevent it from performing its statutory duty or from rectifying an administrative error ... [t]his Court has invoked the doctrine of estoppel against governmental entities where ... 'misleading nonfeasance would otherwise result in a manifest injustice,' such as where the plaintiff has been the victim of bureaucratic confusion and deficiencies."

Pointing out that NYCERS' failure to discover its pension enrollment error for more than 20 years had effectively deprived the Members of any opportunity to avail themselves of the key benefit of early retirement, since they were both older than 62 when they were first advised of the NYCERS' error." The Appellate Division concluded that "[u]nder these circumstances, it would be manifestly unjust to permit NYCERS to collect additional employee contributions from the [Members] after its negligence rendered it impossible for them to obtain the primary benefit of the 57/5 plan."

The decision states that "Simply put, [NYCERS] may not negligently deny the [Members] the benefit of the 57/5 plan while simultaneously demanding from them the additional contributions associated therewith."

Sustaining that part of Supreme Court's determination stopping NYCERS from collecting such additional contributions and directing it to reimburse the Members for any such amounts it has already collected, the Appellate Division said it agreed with the Supreme Court's dismissal of NYCERS' cross motion to dismiss the Members' petition as amended.

* See Retirement and Social Security Law §604-d.

The decision is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_07583.htm

 

Employee terminated for continuing to address disrespectful written statements to coworkers after being told to discontinue such misconduct

A tenured faculty member [Plaintiff], after having several "guidance memoranda" placed in his personnel file concerning disrespectful written statements sent to coworkers, was served with disciplinary charges alleging similar misconduct. The arbitrator, finding that Plaintiff's conduct was unbecoming of a member of the college's faculty, imposed the penalty of a letter of reprimand to be placed in the Plaintiff's personnel file.*

Subsequently Plaintiff was denied promotion to full professor by a select committee and sent an email to committee members stating, in part, "I damn you all to hell-may your bodies and souls burn in eternal fires." 

The college filed disciplinary charges on the Plaintiff, alleging he exhibited "conduct unbecoming a staff member" and proposed his termination as the penalty to be imposed. After an administrative disciplinary hearing, the arbitrator found Plaintiff guilty of the charge and determined that the College had just cause to terminate Plaintiff's employment.

Supreme Court [1] denied the petition filed by Plaintiff  pursuant to CPLR Article 75 seeking to vacate the arbitrator's award and the penalty imposed, termination of Plaintiff's employment, and [2] granted the College's cross motion to dismiss Plaintiff's petition. 

Plaintiff appealed but the Appellate Division unanimously affirmed the Supreme Court's decision.

The Appellate Division sustained the arbitration award and penalty imposed, citing Hackett v Milbank, Tweed, Hadley and McCloy, 86 NY2d 146.

The court explained that an arbitration award may be vacated "only if the court finds that the party's rights were prejudiced by corruption, fraud or misconduct in procuring the award or the partiality of an arbitrator appointed as a neutral; where the arbitrator exceeded his or her power or so imperfectly executed it that a final and definite award was not made; or where the arbitrator failed to follow the procedure set forth in CPLR 7511(b)(1). 

Further, said the court, an arbitration award should not be vacated based on errors of law and fact nor should the court assume the role of overseers to make the award conform to the court's sense of justice.

Here, opined the Appellate Division, "the arbitrator's findings are supported by the record and are not arbitrary, capricious or irrational." 

Addressing the Plaintiff's assertion that the arbitrator was biased against him, the Appellate Division said that Plaintiff's allegation "was not supported by any evidence in the record."

As to the penalty imposed on Plaintiff, dismissal from his position, the Appellate Division acknowledged that "the penalty imposed, which may seem harsh given [Plaintiff's] lengthy and satisfactory service at the college" but, citing Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, Westchester County, 34 NY2d 222, opined that it "was not so disproportionate to the offense as to shock the conscience."

Conceding that Plaintiff acknowledged that his email to the faculty committee members was an error in judgment, the Appellate Division, noting that Plaintiff had "received numerous prior warnings about disrespectful and intemperate writings to staff and coworkers," found that the arbitrator "reasonably concluded that a more lenient penalty was unlikely to change [Petitioner's] unprofessional conduct."

* The letter of reprimand [1] noted the findings of the arbitrator; [2] advised Plaintiff to commit to taking steps necessary to maintain a civil tone with coworkers; and [3] warned Plaintiff that additional such incidents "may lead to further disciplinary action."

** See United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72.

Click here to access the text of the decision.

 

New York State Comptroller's report of the State's Education Department's oversight of career training programs issued

On December 21, 2020 New York State Comptroller Thomas P. DiNapoli issued an audit report focusing on the New York State Education Department [SED] oversight of New York's Career and Technical Education [CTE] programs. 

CTE programs that are intended to prepare high school students for future employment. The audit, however indicates that these CTE programs are often failing to ready students for jobs that are in demand, fast-growing, or pay higher wages.

The audit report indicates that during the 2018-19 school year, only 13 percent of students were enrolled in programs that closely aligned with occupations deemed highest in demand, growth and salary. Auditors determined that 57.5 percent of student enrollments were in approved programs geared to high-salary occupations, with the remaining 42.4 percent of students enrolled in programs that align with an occupation with a typical salary below the state average.

Auditors also found SED lacks sufficient employee resources to monitor CTE programming in the state. SED focuses on review of CTE program applications and the administration of federal grants, but does not perform routine visits to program locations or monitor program-level performance. As a result, the report concludes that SED's oversight activities are insufficient for assessing how programs are performing.

DiNapoli’s auditors also found:

a. SED has not established any requirements or issued guidance to address scheduling barriers for students trying to meet educational requirements while also accommodating CTE courses.

b. The majority of locations (78 percent) visited said that attracting, hiring and retaining certified teachers with industry experience to instruct CTE programs is impeded by a prolonged certification application process, inadequate salaries, and stringent educational requirements.

c. Approved program course curriculum and articulation agreements with post-secondary programs are not developed using a centralized approach. There is no single CTE curriculum for comparable programs at different locations, and, as a result, different standards may be required depending on the school district or BOCES where the student takes the CTE program

d. SED cannot accurately determine the number of endorsed graduates each year and does not have assurance that students have met the academic and industry standards of the respective CTE program for which they received an endorsement.

State Comptroller DiNapoli recommended SED take the following actions:

a. Ensure approved and local CTE programs, as well as student enrollments, align with state workforce needs and meet the career goals of secondary school students;

b. Take the steps necessary to monitor CTE program-level performance as well as the accuracy and consistency of data submitted by school districts and BOCES;

c. Assess whether the funding provided for CTE-related activities is sufficient to support high-quality CTE programs;

d. Work with schools to ensure they are adequately promoting, supporting, and teaching CTE programs;

e. Review and update CTE regulations to ensure alignment with state law;

f. Work with schools and BOCES to standardize CTE curriculum; and

g. Provide additional guidance to schools, school districts and BOCES regarding the application of CTE program requirements to ensure there is a clear and consistent process to record and report accurate CTE-related information.

SED, however, generally disagreed with the audit’s findings. SED’s response is included in the audit.

Click here to access the full text of the Audit Report: State Education Department: Oversight of Career and Technical Education Programs in New York State Schools

 

New Regulations and Fact Sheets on New York State's Paid Sick Leave Law

Harris Beach PLLC, a law firm, reports that on December 9, 2020, the New York State Department of Law [DOL] issued proposed regulations that further implement New York's Paid Sick Leave Law.

Harris Beach notes that the regulations are still in "proposed" form and not yet final.

Employers and other members of the public have until February 7, 2021, to submit comments and feedback to the DOL regarding the proposed regulations.

Click here to

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The Doctrines of Collateral Estoppel and Res Judicata bar a party relitigating the same issues involving the same defendant

Reviewing an appeal challenging Supreme Court's granting the defendant's motion to dismiss Plaintiff's complaint, the Appellate Division affirmed the lower court's ruling, explaining:

1. When a party's complaint arises out of the same set of circumstances as his prior CPLR Article 78 proceeding, the second action is barred on the grounds of res judicata; and

2. When a party has been afforded a full and fair opportunity to litigate an issue and loses in a CPLR Article 78 action, collateral estoppel will bar him from litigating the issue a second time.

The Appellate Division observed that both in the instant proceeding and in an earlier Article 78 proceeding, the plaintiff [Petitioner] attacked an administrator's [Defendant] decision to give him an unsatisfactory ["U"] rating and her refusal to allow him to rescind his resignation.

The court also opined that Supreme Court properly granted summary judgment to the Defendant on the merits, finding that the collective bargaining agreement relied upon by Petitioner "could not serve as the basis for a tortious interference with [his] contract claim" because, among other reasons, Petitioner had not properly alleged that "he was party to a contract with a third party."

As to Petitioner's claim for "tortious interference with [his] prospective business relations," the Appellate Division found that Petitioner was unable to show that Defendant directly interfered with any prospective third-party agreement through "wrongful means" nor could he establish that he would have been hired by a third party "but for" Defendant's actions. In the words of the court, "such vague aspirations of future employment are insufficient ...," citing Kickertz v New York Univ., 110 AD3d 268 and Murphy v City of New York, 59 AD3d 301.

The decision is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_07286.htm.