Evaluating a request to place a position in the exempt class of the classified service of the state or a political subdivision of the state

§44 of the Civil Service Law provides, in pertinent part, that "[t]he competitive class ... shall include all positions now existing or hereafter created ... except such positions as are in the exempt class, the non-competitive class or the labor class."

With respect to jurisdictionally classifying a position* as a position in the exempt class, §41.2 of the Civil Service Law provides that "No office or position shall be deemed to be in the exempt class unless it is specifically named in such class in the rules. Upon the occurrence of a vacancy in any position in the exempt class, the state or municipal civil service commission having jurisdiction shall study and evaluate such position and, within four months after the occurrence of such vacancy, shall determine whether such position, as then constituted, is properly classified in the exempt class. Pending such determination, said position shall not be filled, except on a temporary basis."

The New York State Department of Financial Services [DFS] requested that the New York State Civil Service Commission [Commission] place five new Special Assistant positions in the exempt class. The Public Employees Federation [PEF] objected to jurisdictional classification of the positions as DFS had requested.  The Commission considered the views of DFS and PEF with respect to jurisdictionally placing the five positions in the exempt class and ultimately adopted a rule placing the five positions in the exempt class. 

PEF then initiated a CPLR Article 78 proceeding seeking a court order annulling the Commission's determination. Supreme Court dismissed PEF's petition. 

The Appellate Division affirmed the lower court's ruling, explaining "[A]ppointments and promotions within the civil service system must be merit-based and, when practicable, determined by competitive examination". However, continued the court, a position for "which competitive or non-competitive examination may be found to be not practicable shall be designated as exempt."

Noting that a civil service commission's placement of a position in the exempt class is permitted when it determines that the nature of the  position is "confidential;" involves the performance of duties which require the exercise of authority or discretion at a high level; or the need for the appointee to have some expertise or personal qualities "which cannot be measured by a competitive examination," the Appellate Division said that its review of the Commission's determination "is limited to whether it was wholly arbitrary or without a rational basis".

Here, said the court, the record indicates that DFS requested exempt classification of the five positions was based, in part, upon the sensitive and confidential nature of the duties of the incumbent of the position and the ability of Special Assistants to influence policy and which appointees "were required to have a confidential relationship with DFS's superintendent and the full trust of the superintendent."

Noting that the Commission considered, among other factors, DFS summary memorandum explaining the basis for its request and the confidential character and the high-level responsibilities and duties of the incumbents of these five positions, the Appellate Division said that it could not conclude that the Commission's determination was arbitrary or without any rational basis.

* Article 1, §2.10 of the Civil Service Law defines the term "jurisdictional classification" as the assignment of positions in the classified service to the competitive, non-competitive, exempt or labor classes;" to be distinguished from "position classification" which is defined in Article 1, §2.11 of the Civil Service Law as "the grouping together, under common and descriptive titles, of positions that are substantially similar in the essential character and scope of their duties and responsibilities and in the qualification requirements..." for such positions.

Click here to access the text of the Appellate Division's decision.

 

A claimant seeking workers' compensation benefits must show a causal nexus between the accident underlying his claim and his employment

A Chief of Police [Claimant] of a Village in New York State filed for workers' compensation benefits in connection with injuries he sustained in a motor vehicle accident that occurred while he was driving a police vehicle. The Village's workers' compensation carrier controverted the claim. Ultimately the Workers' Compensation Board [Board] awarded Claimant workers' compensation benefits and the Village's workers' compensation insurance carrier [Carrier] appealed the Board's ruling.

The record indicated that Claimant was involved in the accident in the course of his taking a weekend trip, about a 4½ drive from the Village. Claimant had testified that "he carried his work cell phone, that he was on call 24 hours a day and that he drove his police vehicle to his weekend destination so that he could return to the Village if needed." Claimant also testified that:

1. He was not recalled at any point during the weekend;

2. He was not in the course of returning to work at the time of the accident; and

3. He was he attending to any other police matter at the time of the accident. 

After considering some procedural matters, the Appellate Division said that it agreed with the Workers' Compensation Board [Board] that the Carrier was precluded from submitting evidence on the issue of whether Claimant's injuries arose out of and in the course of Claimant's employment having waived such defenses.

The court, however, pointed out that the Carrier's waiver of its defenses did not relieve Claimant of his obligation to come forward with sufficient proof to establish that he suffered a compensable injury in the course of his employment. According, said the court, Claimant had the burden of demonstrating that "a sufficient causal nexus existed between his employment and the motor vehicle accident that caused his injuries" to support of his application for workers' compensation benefits.

The Appellate Division explained that the degree of control exercised by the employer over a claimant's activities at the time of the accident was a critical element "in determining whether the requisite causal nexus exists," a factual question for the Board. Further, the Board's determination regarding the required nexus will be upheld if supported by substantial evidence.

As Claimant offered no other testimony linking his weekend activities to his employment by the Village, the Appellate Division opined that the evidence offered by Claimant "falls short of demonstrating the requisite causal nexus between Claimant's accident and his employment." 

Accordingly, the court held that the Board's decision is not supported by substantial evidence and remitted the matter to the Board for further proceedings.

Click here to access the text of the Appellate Division's decision.

 

Municipal and school district audits released during the week ending January 9, 2021

New York State Comptroller Thomas P. DiNapoli announced that the following local government and school district audits were issued during the week ending January 9, 2021.

Click on the text highlighted in color to access the complete audit report

Local Government Audits

Citizens Hose Company – Board Oversight of Financial Operations (Ontario County) Auditors determined Citizens Hose Company did not have adequate controls in place to ensure that company funds were safeguarded. The company’s bylaws were insufficient because they did not provide detailed guidance for the treasurer or audit committee when collecting and depositing funds, recording cash receipts and disbursements and paying company bills. In addition, the treasurer misappropriated more than $20,000 of company funds. The company secretary also inappropriately used a company credit card for personal purchases of at least $1,100 without detection by officials. As a result of the audit, the former Citizens Hose Fire Company treasurer, pleaded guilty to felony grand larceny and was ordered to repay restitution.

City of Gloversville – City Clerk (Fulton County)Auditors found the former clerk did not properly account for fees. The former clerk waived fees for 249 certified copies of birth certificates totaling $2,490 without a valid reason. The former clerk also did not deposit all fees intact and substituted checks and money orders for cash collections. Auditors did determine that the current clerk was acting properly and accounting for fees as of Oct.1, 2017.

Ethics Oversight (Statewide Unit) This multi-unit audit included 20 individual audits including: 8 Counties: Albany, Chautauqua, Chemung, Genesee, St. Lawrence, Steuben, Suffolk and Tompkins; 8 Towns: Clay, Colonie, Greece, Oyster Bay, Ramapo, Southampton, Tonawanda and Union; and 4 Cities: New Rochelle, Rochester, Troy and Utica. Local governments must comply with New York State General Municipal Law (GML) and should do more to ensure proper ethics oversight.

Oneida-Herkimer-Madison Board of Cooperative Services (Oneida County, Herkimer County and Madison County) Oneida-Herkimer-Madison Board of Cooperative Educational Services (BOCES) officials did not regularly provide formalized information technology (IT) security awareness training. BOCES officials also did not assess computer usage to confirm IT assets were used for appropriate purposes or establish adequate controls to safeguard information contained in the network and financial system. Personal internet use was found on computers. In addition, network and application user accounts were not properly managed. Auditors also determined no disaster recovery plan was developed. Sensitive IT control weaknesses were communicated confidentially to BOCES officials.

Village of Monticello – Financial Condition (Sullivan County) The board did not adequately manage the village’s financial condition. As a result, the village is fiscally stressed. Auditors determined the village’s total fund balance will likely be fully depleted at the end of the 2019-20 fiscal year. The village also has exhausted nearly 100 percent of its constitutional tax limit. In addition, the village has significant infrastructure needs that it lacks the funds to address.

Village of Monticello – Records and Reports (Sullivan County) Auditors determined the treasurer did not maintain accurate, complete and timely accounting records or properly reconcile bank accounts in a timely manner. About $5 million of real property tax revenue was not posted to the accounting records. Bank reconciliations were generally performed two to three months after the statement date. In addition, periodic financial reports were not prepared for the board of trustees or department heads. Annual Update Documents, which are required annual financial reports, constitutional tax limit forms and adopted budgets were not filed in a timely manner, with some filed typically over 200 days late.

School DistrictAudits

Alexandria Central School District – Financial Condition Management (Jefferson County and St. Lawrence County) The district’s budgeted appropriations from 2016-17 through 2018-19 exceeded actual expenditures by $844,261, or 6.4 percent and the district did not need to use most of the appropriated fund balance for operations. The surplus fund balance in the general fund exceeded the 4 percent statutory limit for the past three fiscal years. As of June 30, 2019, surplus fund balance was $1.75 million, or 12.8 percent of the next year’s budget. In addition, district officials have not developed a long-term financial plan or a comprehensive reserve fund policy. Officials also did not implement the recommendations in a prior audit released in March 2016. This audit contains similar findings and recommendations.

Prattsburgh Central School District – Financial Management (Steuben County and Yates County) The board and district officials’ actions to manage financial condition were not transparent and more taxes were levied than necessary to fund operations. The board also appropriated fund balance totaling $1.13 million for fiscal years 2016-17 through 2018-19 but none of the money was used or needed to fund operations. For the last three fiscal years, the district reported that it exceeded the 4 percent statutory surplus fund balance limit, however when unused appropriated fund balance is added back, surplus fund balance exceeded the limit between 11 and 15 percentage points. In addition, the board did not develop written multiyear financial and capital plans.

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When the statutory language is clear and unambiguous, it should be construed so as to give effect to the plain meaning of the words used

This CPLR Article 78 was filed by an individual [Plaintiff] who was initially employed by New York City Health and Hospitals Corporation and subsequently was appointed as a correction officer by the New York City Department of Correction [DOC].

At the time of his appointment by DOC Plaintiff was a "Tier 4 member" of  the New York City Employees' Retirement System [NYCERS]and DOC requested that the NYCERS to place the Plaintiff in the City's CF-20 plan in Tier 3. DOC's request was approved,

Subsequently Plaintiff asked NYCERS about his member status in the System. NYCERS advised him that it had conducted a review of his membership status and had determined that his current retirement plan, CF-20, was incorrect. NYCERS told Plaintiff that it was mandated by law to place him in the Uniformed Correction Force 22 year plan [CF-22]. 

Contending that NYCERS's determination changing Plaintiff's pension benefit plan from CF-20 to CF-22 was arbitrary and capricious, Plaintiff asked Supreme Court to compel NYCERS to reinstate him as a CF-20 Plan member. Supreme Court denied Plaintiff's petition and he appealed the court's ruling.

The Appellate Division sustained Supreme Court's decision, explaining:

1. "NYCERS is the public employee retirement system responsible for administering the retirement programs for employees of the City [of New York] and various [New York] City-related participating employers."

2. Before the effective date of the 2012 amendment to the Retirement and Social Security Law [RSSL], any person who became employed as a uniformed correction officer was eligible to join the CF-20 plan in Tier 3 pursuant to RSSL §504-d as then in effect.

3. In March 2012, the Legislature amended certain provisions of the RSSL, the result of which Plaintiff would be ineligible for CF-20 benefits.

It is undisputed that, when the Plaintiff joined NYCERS in 2004, he joined as a Tier 4 member and was subject to RSSL Article 15 rather than the provisions of RSSL Article 14 until he was appointed as a correction officer.

Although the Appellate Division conceded the Plaintiff was correct that certain portions of the legislative history of the amendment indicate that the 2012 amendment would impact members who first become members of NYCERS on or after April 1, 2012, NYCERS successfully argued that the legislative history of the amendment stated that the relevant amendments would apply to new New York City uniformed correction members.

Citing People v Brown, 115 AD3d 155, affirmed 25 NY3d 247, the Appellate Division opined that the plain language of the RSSL §501(25) is clear and unambiguous. The court then indicated that "when the statutory language is clear and unambiguous, it should be construed so as to give effect to the plain meaning of the words used." 

Thus, the court concluded that Plaintiff did not become subject to Article 14 of the RSSL until after April 1, 2012, and NYCERS properly reclassified his retirement system member status from CF-20 to CF-22.

The court rejected Plaintiff's arguments that [1] Article V, §7 of the New York Constitution* and [2] the doctrine of equitable estoppel** barred NYCERS from changing his retirement system member status as NYCERS, itself, initially placed him in the CF-20 plan.

In the words of the Appellate Division, "[i]n securing a public employee's retirement rights, '[t]he Constitution does not, in terms or otherwise, preserve naked pension rights quarights but, rather, the benefits of the contractual relationship ... Thus, we must look to the contract for both the source and the definition of the plaintiff's benefits'".

Noting that Plaintiff became a member of NYCERS as a Tier 4 member subject to RSSL Article 15, the court concluded that "the 2012 amendments at issue in no way diminished or impaired [Plaintiff's]  pension benefits," and agreed with NYCERS that the 2012 amendments, as applied to Plaintiff, did not violate his rights under the Constitution's pension impairment clause.

* Article V, §7 of the New York Constitution, which states 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". 

** See, however, https://publicpersonnellaw.blogspot.com/2020/12/a-governmental-entity-may-be-subject-to.html, a decision by the Appellate Division that addressed an exception to this general rule.

Click here to access the text of the decision.

Click here to access another Appellate Division ruling involving similar issues as presented in this action handed down on the same day. 

 

 

Evaluating an individual's application for accidental disability retirement where a statutory presumption of causation is a factor

A New York City police officer [Plaintiff] filed an application for accidental disability retirement [ADR] benefits based on a heart condition. The Medical Board [Board] concluded that Plaintiff was disabled as a result of various heart ailments but recommended ordinary disability retirement [ODR]* because there was no evidence that Plaintiff had hypertension or any other stress-related heart problems. The Retirement System adopted the Board's recommendation.

Plaintiff filed a petition pursuant to CPLR Article 78 seeking a court order [1] vacating the Retirement System's determination denying Plaintiff 's application for ADR and [2] directing that he be granted retirement with accidental disability benefits. Supreme Court granted Plaintiff's petition and the Retirement System appealed.

The Appellate Division affirmed the Supreme Court's ruling, explaining that the lower court had properly granted the petition based on the presumption of causation set out in General Municipal Law §207-k.**

Conceding that there was some evidence that Plaintiff was diagnosed with "essential hypertension" prior to his retirement, the Appellate Division noted that most of the evidence related to hypertension post-dated his retirement.

Further, said the court, the Board did not express an opinion as to whether Plaintiff's other heart ailments, including his need for a dual chamber pacemaker were causally related to stress or other occupational factors and failed "to address Plaintiff's numerous heart problems and focused only on the absence of hypertension."

The Appellate Division then opined that the Retirement System "cannot deny ADR benefits in a case governed by General Municipal Law §207-k by relying solely on the absence of evidence tying the disability to work-related stress," citing Bitchatchi v Board of Trustees of N.Y. City Police Dept. Pension Fund, Art. II, 20 NY3d 268.

* Ordinary Disability Retirement benefits are typically less generous than Accidental Disability Retirement benefits.

** General Municipal Law §207-k sets out a rebuttable presumption that a  disability resulting from any condition of impairment of health caused by diseases of the heart suffered by an applicant for accidental disability retirement benefits was incurred in the performance and discharge of official duty unless the contrary is proven by competent evidence.

Click here to access the text of the decision.