Arbitrating a grievance alledging the employer failed to fill a vacant position as required by a provision in the collective bargaining agreement

The Appellate Division, noting that the parties in this action were actually involved in two appeals each involving the arbitrability of a grievance alleging that the appointing authority [Employer] failed to fill certain vacancies in accordance with the terms set out in the collective bargaining agreement [CBA], said it was deciding both appeals "herewith."

Essentially the two disputes concerned a CBA provision that required Employer to fill "vacant promotional positions ... from [c]ivil [s]ervice lists within thirty (30) days." One grievance alleged Employer failed to fill two vacant Sergeant positions* and a second grievance alleging Employer failed to fill a vacant Captain position.**

The Sergeant Grievance: One sergeant was promoted to captain and another sergeant retired, leaving two vacant sergeant positions. After the second Sergeant position had been vacant for more than 30 days, the Union filed a grievance alleging that Employer had violated the CBA by failing to timely promote any eligible candidates to the vacant sergeant positions.

The Captain Grievance: Two months after an individual was promoted from the position of captain to assistant chief, leaving a vacant captain position, the Union filed a grievance alleging that Employer violated the CBA when it failed to promote one of the three eligible sergeants to the position of captain within 30 days.

Employer denied the grievances and the Union submitted demands to arbitrate the disputes. Employer then commenced two proceeding pursuant to CPLR §7503 seeking, respectively, court orders permanently staying the arbitrations. Supreme Court denied Employer's applications for the stays of arbitration and granted the Union's cross motions to compel arbitrating the two disputes. Employer appealed the Supreme Court's decisions.

In deciding these appeals the Appellate Division noted:

1. When deciding whether to stay or compel arbitration pursuant to CPLR 7503, courts are "concerned only with the threshold determination of arbitrability, and not with the merits of the underlying claim." 

2. In general, "any doubts as to whether an issue is arbitrable will be resolved in favor of arbitration."

3. Citing Deas v Levitt, 73 NY2d 525 and other decisions, the Appellate Division  opined although "no individual had a vested right to be appointed to a vacant position — not even those whose scores placed them in the top three examinees", in this instance once individuals were appointed, they may have become entitled to damages or other relief based on Employer's alleged contractual breach, i.e., failure to make such appointments within the time frame required by the CBA.

4. "The threshold determination of whether a dispute is arbitrable is well settled. Proceeding with a two-part test, [courts] first ask whether the parties may arbitrate the dispute by inquiring if there is any statutory, constitutional or public policy prohibition against arbitration of the grievance. If no prohibition exists, [courts] then ask whether the parties in fact agreed to arbitrate the particular dispute by examining their collective bargaining agreement".

5. A public employer's promotional practices may lawfully be the subject of collective bargaining and, if agreed upon, may be the subject of arbitration when a related grievance is filed.

6. Article XXV of the CBA at issue, addressing promotions to newly-created and vacant positions, provides that "vacant promotional positions shall be filled from [c]ivil [s]ervice lists within thirty (30) days; provided, however, that if any list would expire prior to that time, the positions will be filled before the expiration of the list in existence at the time the vacancy occurs, or the new position is created."

Employer asserted that Article XXV was contrary to Civil Service Law §61(1). The Appellate Division disagreed, explaining that this is not a situation where the CBA mandates appointing the highest scoring person on the list willing to accept a police officer position rather than applying the "rule of three" - selecting a candidate from among the "top three eligibles" certified for appointment to the position. The court noted that here the Employer retained the discretion to choose from among the top three candidates, but voluntarily agreed to make such choice within a certain period. As Civil Service Law §61 contains no time requirements for making an appointment, the CBA's provision did not violate that statute or any related public policy.

As to the appointing authority exercising discretion in selecting an eligible individual for promotion, while in Matter of Professional, Clerical, Tech. Empls. Assn. (Buffalo Bd. of Educ.), 90 NY2d 364, the Court of Appeals held that a public employer could, without violating public policy, agree to forgo its statutory authority to choose any one of three candidates for promotion to clerical and secretarial positions, in  Matter of Buffalo Police Benevolent Assn. [City of Buffalo], 4 NY3d 660, the high court ruled that "[p]ublic policy requires that police departments retain the authority given them by Civil Service Law §61(1) to select one of three candidates for such promotions," thus barring an appointing authority from agreeing, in the course of collective bargaining, to limit its discretion in selecting a candidate for promotion by requiring the appointing authority to follow the so-called "the rule of the list."***

Considering "budget arguments" advanced by the Employer, the Appellate Division opined that although Article XXV would allow Employer to eliminate an open captain position**** and thereby save the expenses related to that position, Employer had "bargained away its ability to keep the position as a line item in the budget but not fill it when it becomes vacant." This "partial limit" on a municipality's power to control its budget, which limit was voluntarily agreed upon by the Employer in the CBA, was not viewed as against public policy by the Appellate Division.

Finding that "[n]o constitutional provision prohibits arbitration here", the Appellate Division concluded its rulings by observing that "considering the broad scope of the CBA's arbitration clause, any argument concerning compliance with the grievance process, including any time limitations thereunder, is likewise a matter for the arbitrator to decide."

An historical note: Prior to 1900 New York State civil service appointments from eligible lists were based on the rule of one, also referred to as "the rule of the list." This rule mandated the appointment of the candidate standing highest on the eligible list certified by the responsible civil service commission. In 1900 the "rule of one" was struck down by the Court of Appeals as unconstitutional. The Court held that "if the civil service commissioners have power to certify to the appointing officer only one applicant of several who are eligible and whom they have, by their own methods, ascertained to be fitted for a particular position, and their decision is final ... then the civil service commission becomes and is the actual appointing power" [People v Mosher, 163 NY 32]. This decision prompted establishment of the so-called "rule of three," currently set out in Section 61.1 of the Civil Service Law and held valid by the Court of Appeals in People v Gaffney, 201 NY 535. 

* See Matter of City of Troy (Troy Police Benevolent & Protective Assn., Inc.), 2021 NY Slip Op 01172, posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2021/2021_01172.htm

** See Matter of City of Troy (Troy Police Benevolent & Protective Assn., Inc.), 2021 NY Slip Op 01170, posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2021/2021_01170.htm

*** The Rule of One, also known as the "Rule of the List." is mandated by Civil Service Law §§81.2 and 81.3 in situations involving an appointment from a preferred list and in situations involving an appointment from a similar list such as a Special Eligible List established pursuant to §243.7 of the State's Military Law while §243.12 of the Military Law provides that appointments from a Military Re-employment List may be made without regard to the selected individual's position on said list.

**** The Attorney General has opined that there must be an actual abolishment of the position in question in contrast to merely “creating a vacancy as the result of a layoff” in order to trigger the relevant statutory layoff procedures [1976 Opinions of the Attorney General 7].

Audits issued by the New York State Comptroller during the week ending March 5, 2021

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued during the week ending March 5, 2021.

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

Department, Authority, Program and Foundation Audits

Department of Health (DOH) Improper Fee-for-Service (FFS) Payments for Services Covered by Managed Care (Follow-Up) (2020-F-8)A prior audit identified over $36 million in improper Medicaid FFS payments for services that should have been covered by the recipients’ managed care plans. In a follow-up audit, auditors found DOH made some progress in addressing the problems identified. However, auditors still identified nearly $7 million in new improper payments.

Department of Health: Improper Payments for Sexual and Erectile Dysfunction (ED) Drugs, Procedures, and Supplies Provided to Medicaid Recipients, Including Sex Offenders (Follow-Up) (2020-F-15) An audit released in June 2019 identified $933,594 in improper payments for drugs, procedures and supplies to treat ED. Of that amount, Medicaid paid $63,301 for 47 sex offenders. Medicaid also made payments of $13.5 million for ED drugs that are approved to also treat other medical conditions. About $11.6 million of the $13.5 million in payments were made without verifying recipient sex offender status through DOH’s system, as required – consequently, auditors found Medicaid paid $285,641 on behalf of 14 sex offenders. In a follow-up, auditors found DOH made some progress in addressing the problems identified in the initial audit report; however, more improvements are needed.

Department of Health: Medicaid Program - Improper Medicaid Payments for Individuals Receiving Hospice Services Covered by Medicare (2018-S-71) Auditors identified about $50 million in actual and potential Medicaid overpayments, cost-savings opportunities, and questionable payments for services provided to certain patients enrolled in Medicare-covered hospice. Among the cost savings, auditors recommended DOH review the $5.9 million in actual and potential overpayments and ensure proper recoveries are made. They also recommended DOH improve controls to prevent improper payments in the future. Another $39.8 million was identified as questionable because these expenses may have been eligible for coverage by Medicare.

Homes and Community Renewal - Division of Housing and Community Renewal (DHCR): Administration of Mitchell-Lama Waiting Lists (Follow-Up) (2020-F-19) An initial report issued in August 2017 found that DHCR needed to improve its monitoring of the Mitchell-Lama developments to ensure that affordable units were awarded in compliance with New York Codes, Rules and Regulations. In a follow-up, auditors found DHCR has made some progress in addressing the problems identified in the initial audit report.

Department of Motor Vehicles: Enforcement of Article 19-A of the Vehicle and Traffic Law (Follow-Up) (2020-F-6) An audit issued in February 2019 identified deficiencies in DMV’s policies and procedures that could result in motor carriers operating out of compliance with requirements for school bus drivers with the associated risk that under or unqualified drivers were operating vehicles and potentially jeopardizing safety. In a follow-up, auditors found DMV has implemented four of the five recommendations from the initial audit report, and has partially implemented one recommendation.

New York State Health Insurance Program: CVS Health – Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (Follow-Up) (2020-F-24) An audit issued in June 2019 found that CVS Health did not always invoice drug manufacturers for all rebates, collect all rebates from the manufacturers, or remit all rebate revenue to Civil Service. As a result, Civil Service was due $2,240,798 in rebates. In a follow-up, auditors found CVS Health addressed most of the problems identified in the initial audit.

Niagara Frontier Transportation Authority (NFTA): Use of Vendor-Supported Technology (Follow-Up) (2020-F-28) An initial audit determined that NFTA maintained its technology systems at vendor-supported levels. However, auditors identified unsupported systems used on 66 devices. NFTA officials did not develop policies and procedures to ensure that their systems were regularly reviewed and kept up to date, nor did they maintain a single clear inventory of IT assets to aid in tracking their systems. In a follow-up, auditors found NFTA officials have made significant progress in addressing the problems identified in the initial audit.

Olympic Regional Development Authority (ORDA): Compliance With Executive Order 95 (Open Data) (2020-S-36) ORDA did not begin to take steps to meet the requirements of EO 95 until after auditors started their work. Prior to the audit, ORDA did not have any data items published to Open Data. In addition, it did not designate a data coordinator, complete a comprehensive catalogue of publishable data, submit a master schedule of publishable datasets or incorporate Open Data into its ongoing core business planning and strategies. However, since then, ORDA has taken steps to comply with EO 95.

Research Foundation of the State University of New York (SUNY): Technology Transfer Program and Royalty Payments (Follow-Up) (2020-F-32) An audit issued in January 2020, found that the Research Foundation had taken steps to protect SUNY’s interest in the transfer of technology and royalties for projects developed at SUNY schools, but had not developed monitoring to determine whether licensees was accurately reporting net sales and paying the full royalty owed. Additionally, SUNY Downstate had accumulated $1,019,390 in campus royalty revenues, none of which had been reinvested to support SUNY research programs. In a follow-up, auditors found Research Foundation officials have made progress in addressing the findings identified in the initial report.

Rochester - Genesee Regional Transportation Authority (RGRTA): Compliance With Requirements to Maintain Systems at Vendor-Supported Levels (Follow-Up) (2020-F-30) An initial report found that RGRTA maintained its technology systems at vendor-supported levels. However, auditors did identify unsupported systems used on 14 devices. Additionally, RGRTA had not developed policies and procedures to ensure that its systems were regularly reviewed and kept up to date. In a follow-up, auditors found RGRTA made significant progress in addressing the problems identified in the initial audit.

State Education Department: Oversight of School Safety Planning Requirements (Follow-Up) (2020-F-17) An initial audit determined SED was not sufficiently monitoring school districts’ compliance with the requirements for school safety planning, and did not have assurance that the requirements were being met. In a follow-up, auditors found SED has made significant progress in addressing school safety issues. 

 

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Lawyers: Take a look at these two social media platforms

 

Seeking medical treatment under New York's Compassionate Care Act

A police officer [Claimant] had established two workers' compensation claims. Following years of treatment, which included physical therapy, surgeries and various prescription pain medications, and a subsequent diagnosis of chronic regional pain syndrome of the right upper extremity, a Workers' Compensation Law Judge [ALJ] classified Claimant as permanently partially disabled and apportioned liability for indemnity benefits and medications between the two claims. Claimant continued receiving treatment with varying degrees of success, and his use of prescription pain medications continued to increase.

Ultimately Claimant, after years of treatment with opiate pain medications, began being treated by a pain management specialist [Specialist]. Specialist continued Claimant on his regimen of, among other medications, Oxycontin and Oxycodone to treat his pain but subsequently certified Claimant for use of medical marihuana pursuant to Public Health Law Article 33, Title V-a, also referred to as New York's "Compassionate Care Act."

Specialist then filed a NYS Workers Compensation MG-2 variance form requesting authorization to use medical marihuana to treat Claimant's chronic pain resulting from his work-related injuries. The Employer and its workers' compensation carrier [Carrier] denied the request. Although the Workers' Compensation Board [Board] initially sustained the denial, in response to Claimant's request for further action, the Board rescinded its earlier decision and continued the case for a hearing.

Following a hearing the Worker's Compensation Law Judge approved the variance request for medical marihuana treatment as apportioned, and instructed Carrier to pay for such treatment. Upon administrative review, the Board, among other things, sustained the request for the variance. 

Employer and Carrier appealed the Board's decision,  contending that the requirement that Carrier provide insurance coverage for Claimant's medical marihuana expenses under the Compassionate Care Act conflicted with the Controlled Substances Act and, in light thereof, the Compassionate Care Act was preempted by federal law.

The Appellate Division disagreed, finding that the Board's decision to grant the requested variance to treat Claimant's chronic pain with medical marihuana was supported by substantial evidence and declined to disturb it.

The court explained that the federal preemption doctrine has its roots in the Supremacy Clause of the United States Constitution, and federal preemption of state laws generally can occur in three ways:

1. Where Congress has expressly preempted state law;

2. Where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law; or

3. Where federal law conflicts with state law.

In the eyes of the court, the issue was one of "conflict preemption. Referring to Balbuena v IDR Realty LLC, 6 NY3d 338, the Appellate Division opined that "conflict preemption" occurs "when compliance with both federal and state law is a physical impossibility, or where the state law at issue ... stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."

Noting that neither the Compassionate Care Act nor Workers' Compensation Law §13(a) requires a workers' compensation carrier to manufacture, distribute or possess marihuana, the Appellate Division indicated that all that is required of the Carrier in this instance is its reimbursing Claimant's monetary costs associated with the medical marihuana obtained from his or her medical practitioner, an activity that is not expressly prohibited under the Controlled Substances Act. 

Moreover, opined the Appellate Division, reimbursing a claimant "does not serve to subvert, in any way, the principal purposes of the Controlled Substances Act in combating drug abuse and controlling 'the legitimate and illegitimate traffic in controlled substances,' particularly where, as here, [Claimant] was validly prescribed and authorized to use medical marihuana by his pain management specialist to both treat his chronic pain and reduce his reliance on opiates."

Addressing another conundrum, the Appellate Division pointed out that "even assuming, without deciding, that [Claimant's] procurement and possession of medical marihuana under the Compassionate Care Act is illegal under the Controlled Substances Act, any such criminal transaction in this regard is necessarily completed prior to any request being made for reimbursement from the carrier; thus, as 'one cannot aid and abet a completed crime' ... the [Carrier] cannot be said to be aiding and abetting a crime and/or engaging in a conspiracy to commit same." 

Holding that Carrier can comply with the State's statutory scheme without running afoul of federal law, the Appellate Divisions concluded that it could not find any conflict between the Controlled Substances Act and either the Compassionate Care Act or Workers' Compensation Law §1(a) with regard to Carrier's obligation to reimburse Claimant for his medical marihuana expenses.

Addressing and disposing of additional arguments raised by Employer and Carrier,  the court cited Public Health Law §3368(2), which provides as follows:

Nothing in this title shall be construed to require an insurer or health plan under [the Public Health Law] or the [I]nsurance [L]aw to provide coverage for medical marihuana. Nothing in this title shall be construed to require coverage for medical marihuana under [Public Health Law article 25 (maternal and child health)] or [Social Services Law article 5 (public assistance)].

However, said the Appellate Division, "[a]ccording to its express terms, the provided exemption from coverage for medical marihuana expenses pertains only to three chapters of law: the Public Health Law, the Insurance Law and the Social Services Law. No reference is made in the text of the statute to an exemption from coverage under the Workers' Compensation Law. 

The Appellate Division then observed that "If the Legislature intended for said exemption to apply to workers' compensation insurance carriers, it certainly could have included such language in the text of the statute; it chose not to."

Finding that the Board properly granted Claimant's request for a variance and that the Public Health Law and its accompanying regulations authorize the use of medical marihuana to treat certain enumerated and serious conditions, including - as relevant here - chronic pain, the court observed that the Workers' Compensation Law also requires that treatment be rendered in accordance with its Medical Treatment Guidelines. 

Citing 12 NYCRR 324.2[a], the court explained that in the event a medical provider determines that medical care that varies from the Medical Treatment Guidelines is warranted, he or she "shall request a variance from the insurance carrier" by submitting such request in the prescribed form. Although "the burden of proof to establish that a variance is appropriate for a claimant and medically necessary shall rest on the treating medical provider requesting the variance," if the Board's decision is supported by substantial evidence, the Appellate Division held that it would not be disturb.

In this instance the court determined that the Board's decision to grant the requested variance to treat Claimant's chronic pain with medical marihuana was supported by substantial evidence and sustained it.

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ClickHEREto access the Appellate Division's decision.

 

Resolving a challenge to the denial of an application for accidental disability retirement benefits resulting from a tie vote by the pension fund's Board of Trustees

The New York City's Police Pension Fund [Fund] Medical Board [Medical Board] concluded that the disability of an individual's [Applicant] for accidental disability retirement benefits [ADR] "stemmed from an unsuccessful spinal surgery and not from a line-of-duty incident." As the Fund's Board of Trustees [Trustees] review of the Medical Board's decision resulted in a tie vote, Applicant was denied accidental disability retirement [ADR] pension benefits and was awarded ordinary disability retirement [ODR] benefits instead. 

Applicant then filed a CPLR Article 78 petition seeking a Supreme Court order annulling the Trustee's action and the Medical Board's determination. Supreme Court dismissed the proceeding and the Appellate Division unanimously affirmed the lower court ruling.

Citing Meyer v Board of Trustees of N.Y. City Fire Dept., Art. 1-B Pension Fund, 90 NY2d 139, the Appellate Division explained that in the event the Fund's Trustees' determination is the result of a tie vote, the reviewing court may not set aside the denial of ADR benefits "unless it can be determined as matter of law on the record that the disability was the natural and proximate result of a service-related accident."

Accordingly, said the court, in the event that there some credible evidence which supports the Medical Board's findings, a court may not substitute its judgment for that of the Medical Board, noting the decision by the Court of Appeals in Borenstein v New York City Employees' Retirement Sys., 88 NY2d 756 on this point.

Notwithstanding the Applicant's contentions to the contrary, the Appellate Division said that the record shows that the Medical Board reviewed all of the relevant evidence, including Applicant's medical records. Further, said the court, the Medical Board conducted three separate evaluations of the Applicant before reaching its final determination that ultimately resulting in her being awarded ODR benefits. 

Finding that there was credible evidence in the record to support the Medical Board's determination, the Appellate Division opined that the Trustees' denial of the ADR benefits sought by the Applicant should not be disturbed, affirming the Supreme Court's ruling in this matter.

Click HERE to access the Appellate Division's decision.