Courts will not assume the role of overseers to conform an arbitration award to its sense of justice

In a proceeding pursuant to CPLR Article 75 in which the employer [Village] sought an order vacating an arbitration award, Village appealed Supreme Court's decision denying the Village's petition. The Appellate Division affirmed the Supreme Court's ruling.

Village employs court attendants to work in the Village's Justice Court. Work assignments for court attendants were historically determined through a seniority bidding process. The Village changed the process by which that work was assigned and began assigning shifts to court attendants without regard to seniority.

The employee organization [CSEA] representing the court attendants filed a grievance, alleging that the new process by which the Village determined work assignments for court attendants violated, among other things, the "Maintenance of Standards" provision of the relevant collective bargaining agreement [CBA]. The Maintenance of Standards clause of the relevant CBA provided "Any benefits heretofore enjoyed by an employee shall not be deemed to have been altered, modified or changed unless expressly so modified, altered or changed by this agreement."

Ultimately an arbitrator determined that the Village's new process for assigning work to court attendants violated the CBA's "Maintenance of Standards" provision. Village commenced the instant proceeding pursuant to CPLR Article 75 seeking a court order vacating the arbitration award, contending that the arbitration award was contrary to public policy.

Supreme Court denied the Village's petition and the Village appealed. Citing Matter of New York State Correctional Officers and Police Benevolent Assn. v State of New York, 94 NY2d 321, and other decisions. the Appellate Division affirm the lower court's ruling. The court explained "Collective bargaining agreements commonly provide for binding arbitration to settle contractual disputes between employees and management [, and] [i]n circumstances when the parties agree to submit their dispute to an arbitrator, courts generally play a limited role".

Further, said the Appellate Division, "An application to vacate an arbitration award may be granted only in narrow circumstances, such as where "an arbitrator . . . exceeded his [or her] power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made." Further, opined the court, an arbitrator "exceed[s] [his or her] power within the meaning of the CPLR only when [he or she] issue[s] an award that violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power."

Noting that a party seeking to overturn an arbitration award bears a heavy burden and must establish a ground for vacatur by clear and convincing evidence, the Appellate Division's decision pointed out that "Courts are bound by an arbitrator's factual findings, interpretation of the contract and judgment concerning remedies" and courts may not examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because a court believes its interpretation would be the better one.

Indeed, observed the Appellate Division, even where an arbitrator "makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice", citing Matter of New York State Correctional Officers and Police Benevolent Assn. v State of New York, 94 NY2d at 326; and Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d at 479-480).

Concluding that the Supreme Court properly determined that the arbitrator's award was neither irrational nor violated a strong public policy, and that the arbitrator did not exceed a specifically enumerated limitation on his authority, the Appellate Division ruled that  Supreme Court properly denied the Village's petition to vacate the arbitration award.

Click HERE to access the Appellate Division's decision posted on the Internet.

DiNapoli releases fiscal stress scores

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

On March 22, 2023, State Comptroller Thomas P. DiNapoli announced that five villages were designated in fiscal stress under his Fiscal Stress Monitoring System (FSMS). DiNapoli evaluated all non-calendar year local governments and designated one village in “moderate fiscal stress” and four villages as “susceptible to fiscal stress.”

The village of Coxsackie (Greene County) was classified in “moderate fiscal stress.” The four villages classified as “susceptible to fiscal stress” are: Chateaugay (Franklin County), Canajoharie (Montgomery County), Huntington Bay (Suffolk County), and Mohawk (Herkimer County). No municipalities were designated in the highest category of “significant fiscal stress” in this round of scoring.

“Federal pandemic relief packages provided significant aid to local governments over the past three years, helping to balance their books during unprecedented circumstances,” DiNapoli said. “Now that funding is winding down and local officials will have to closely monitor their financial conditions. I encourage local governments to use our self-assessment tool to help them budget and avoid potential pitfalls in the coming years.”

The latest round of fiscal scores evaluated local governments with fiscal years ending between Feb. 28 and July 31. DiNapoli’s office evaluated the fiscal health of 519 villages, which predominantly have a fiscal year ending on May 31, based on self-reported data for 2022. The scores also cover the 17 cities with non-calendar fiscal years, including the “Big 4” cities of Buffalo, Rochester, Syracuse and Yonkers, each of which have fiscal years ending on June 30.

In total, 95 local governments, including the cities of Lackawanna, Olean, Rensselaer, Salamanca and Syracuse, did not file their data in time to receive a FSMS score, a date that is at least three months past their statutory filing deadline. This is a significant increase of 30% from last year. Salamanca and Rensselaer have not filed their data in time to receive fiscal stress scores since 2015 and 2013 respectively.

DiNapoli’s office continues to make sure local governments are aware of both the statutory filing deadlines, as well as the critical filing dates for receiving a fiscal stress score.

“It is important that local officials file timely financial reports disclosing to the public the information they are using to make financial decisions, but we are seeing an increasing number that do not,” DiNapoli said. “When a local government fails to keep this legally required financial information current and accessible, it undermines confidence and accountability in a local government’s finances and forgoes an opportunity to learn of future risks from our early warning system.”

DiNapoli noted the city of Amsterdam in Montgomery County was classified in “moderate fiscal stress” last year and is now classified as “no designation,” while the city of Long Beach in Nassau County was classified in “susceptible to fiscal stress” last year and is now classified as “no designation.”

The system, which has been in place since 2012, assesses levels of fiscal stress in local governments using financial indicators including year-end fund balance, cash position, short-term cash-flow borrowing and patterns of operating deficits. It generates overall fiscal stress scores, which ultimately drive final classifications. The system also analyzes separate environmental indicators to help provide insight into the health of local economies and other challenges that might affect a local government’s or school district’s finances. This information includes population trends, poverty and unemployment.

DiNapoli’s office has a self-assessment tool that allows local officials to calculate fiscal stress scores based on current and future financial assumptions. Officials can use this tool to assist in budget planning, which is especially helpful during periods of revenue and expenditure fluctuations.

In January, DiNapoli released fiscal stress scores for school districts. In September, his office will release scores for municipalities with a calendar-year fiscal year, which includes all counties, towns, most cities and a few villages.

List of Villages and Cities in Fiscal Stress Municipalities in Fiscal Stress

List of Villages and Cities that Failed to File Financial Information Municipalities that Failed to File or Inconclusive List

Complete List of Fiscal Stress Scores Data Files

FSMS Search Tool Tool

 

A reasonable penalty under the circumstances is to be imposed on an employee found guilty of disciplinary charges

In this case the Appellate Division applied the lesson set out in the Court of Appeals' decision in Pell v Board of Educucation of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 222, typically referred to as the Pell Doctrine: the disciplinary penalty imposed on a individual found guilty of disciplinary charges must be proportionate to the offense.

The School Board [Board] filed disciplinary charges against one of its employees, a custodial worker, pursuant to §75 of the Civil Service Law alleging incompetence and misconduct. The hearing officer found the employee [Petitioner] guilty of incompetence, insubordination, and misconduct and recommended that the Petitioner be terminated from his position. The Board accepted the hearing officer's findings and recommendation and terminated Petitioner.

Petitioner appealed and the Appellate Divisions, noted that its review of an administrative determination in an employee disciplinary proceeding made after a hearing pursuant to §75 of the Civil Service Law is limited to considering whether the Board's determination "was supported by substantial evidence."*

The Appellate Division concluded that there was substantial evidence in the record supporting the determination that the Petitioner was guilty of incompetence, insubordination, and misconduct. The court's decision reports that "The record indicates, inter alia, that [Petitioner] discovered a knife and pepper spray under a radiator and left them there for approximately three hours knowing that there were students and other staff in the building, and that the [Petitioner] gave two students $25 each after betting that one of the students would win in a basketball game against the other."

Citing Branam v Simons, 300 AD2d 973, the court said that although "a finding of incompetence ... only requires evidence of some dereliction or neglect of duty," in light of all the circumstances, including the Petitioner's length of service and lack of a prior disciplinary record, "the penalty of termination was so disproportionate to the offense as to be shocking to one's sense of fairness."**.

Accordingly, the Appellate Division granted Petitioner's appeal "to the extent that so much of the determination as terminated the petitioner's employment is annulled" and remanded the matter to the Board "for the imposition of a lesser penalty."

* The court opined that "Substantial evidence has been defined as such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact." 

** Here the Appellate Division refers to the decision of the Court of Appeals in Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 222.

Click HERE to access the Appellate Division's decision posted on the Internet.

 

Accepting the benefits of a settlement agreement deemed ratification and "not lightly cast aside" by the courts

A Village police officer [Officer] was involved in an off-duty accident that rendered him paralyzed from the waist down. Officer filed a notice of claim alleging that the Village discriminated against him after he became disabled. Approximately nine months later, Officer executed a settlement agreement [Agreement] pursuant to which he agreed to withdraw his notice of claim and waive his right to assert certain claims against the Village in exchange for certain benefits, including remaining employed as a police officer for three years until 2016, when his pension rights would vest. The Agreement also provided that Officer would be eligible to continue to be employed by the Village in a different capacity at a reduced rate of pay.

Officer worked in a transitional light-duty police officer position beyond the 2016 deadline established in the Agreement.  In March 2019, however, the Village informed the plaintiff that it would be enforcing the terms of the settlement agreement and instructed him to resign as a police officer as of April 1, 2019. The Village invited Officer to apply for certain lower-paying light duty positions in accordance with the terms of the settlement agreement.

In June 2019, Officer commenced an action to set the Agreement aside. Supreme Court granted a cross-motion to dismiss the complaint, holding that Officer's complaint was subject to dismissal based on Officer's ratification of the Agreement. Subsequent efforts by Officer to vacate the agreement and obtain other relief proved fruitless and ultimately the various efforts made by Officer to set the Agreement aside were considered by the Appellate Division.

The Appellate Division, citing Hallock v State of New York, 64 NY2d 224, said that "Stipulations of settlement between parties are binding contracts enforceable by the court and, as such, they are favored and [are] 'not lightly cast aside' ... especially where, as here, the party seeking to set aside the stipulation was represented by counsel."

Noting that Officer "accepted the benefits of the settlement agreement" continuing to work as a police officer for the Village from 2013 through early 2019, three years beyond the end date he bargained for and did not seek to set aside the Agreement on any of the grounds raised in his complaint at any point before commencing [the instant] action in 2019, the Appellate Division held that the Village was "entitled to dismissal of the complaint on the ground that [Officer] ratified the settlement agreement."

Click HERE to access the Appellate Division's decision posted on the Internet.

Workers' Compensation Board required to address the issues raised by a Claimant for workers' compensation benefits in an administrative appeal to the Board

The Workers' Compensation Board, [Board] found that where, as here, a claim for workers' compensation benefits "was never indexed," the provisions of Workers' Compensation Law §25(2)(b) are inapplicable and ruled that the employer did not file an untimely notice of controversy. Claimant's subsequent application for reconsideration was denied. Claimant appealed the Board's decision.

The Appellate Division held that although the Board concluded that Workers' Compensation Law §25(2)(b) is inapplicable given that the claim was never indexed, the Board did not address the related issue raised upon administrative appeal that the employer's initial FROI-00 form was a binding acceptance of the claim.* Further, said the court, the Board provided "no reasoning or basis for its determination that the notice of controversy was timely filed." 

This, said the Appellate Division , precluded "a meaningful appellate review by this Court".

Citing  Matter of Sequino v Sears Holdings, 206 AD3d 1408 and Matter of Ippolito v NYC Tr. Auth., 203 AD3d 1360, the Appellate Division reversed the Board's decision, concluding that the matter must be remitted to the Board for it "to satisfy its obligation to address the issues raised by claimant on administrative appeal and provide a detailed explanation for its determination."

* Claimant contended that the employer's initial FROI-00 form indicated "L — With Liability" and should be deemed a binding acceptance of the claim with liability. The Appellate Division's decision notes that 12 NYCRR 300.37(c) "dispenses with the need for indexing where a claim is accepted".

Click HERE to access the Appellate Division's decision posted on the Internet.