Summaries of, and commentaries on, selected court and administrative decisions and related matters affecting public employers and employees in New York State in particular and possibly in other jurisdictions in general.
Source:
The arbitrator ruled that management unfairly denied a police officer the right
to work secondary employment while he was on FMLA leave due to the birth of a
child.
The arbitrator's rationale: The city did not have any policy prohibiting its police
officers from moonlighting while on FMLA leave. City of
Godfrey v Spano, 2009 NY Slip Op 08474, Decided on November 19, 2009, Court of Appeals [Decided with Lewis v New York State Department of Civil Service]
Plaintiffs in this action are taxpayers challenging directives recognizing
out-of-state same-sex marriages for purposes of public employee health
insurance coverage and other benefits.*
The Court of Appeals held that that plaintiffs' actions were properly dismissed
by the courts below.
Many residents of
In response to this development, several state and county officials issued
general directives relating to the recognition of those out-of-state same-sex
marriages.
This appeal involved challenges to the lawfulness of two such directives: a
Policy Memorandum, Employee Benefits Division Policy Memorandum issued by the
Commissioner of the New York State Department of Civil Service, which became
effective May 1, 2007* and an Executive Order issued by the County Executive of
the County of Westchester, Westchester County Executive Order No. 3 of 2006.**
However, the Court of Appeals commented with respect to the action brought by
Godfrey that it did adopt the Second Department's rationale for affirmance of
the Supreme Court’s ruling, i.e., the Executive Order did not purport to change
the law, because it included language directing recognition of same-sex couples
"to the maximum extent allowed by law."
The high court said that it found such language ambiguous, and it said it
“would not encourage executive officials to try to insulate their orders from
judicial review by this means.” Instead the Court of Appeals sustained the
result “because the Godfrey plaintiffs have failed to allege an unlawful
expenditure of taxpayer funds, they have not stated a cognizable claim under
General Municipal Law §51.”
As to the Lewis plaintiffs, the Court of Appeals noted that the only surviving
causes of action were based on State Finance Law §123-b and the separation of
powers doctrine.
As to Finance Law § 123-b, the court said although a taxpayer may bring suit
under this statute to prevent the unlawful expenditure of state funds
"whether or not such person is or may be affected or specially
aggrieved" (State Finance Law §123-b [1]), there must be some specific
threat of an imminent expenditure. In this instance the Court of Appeals ruled
that “The State Finance Law claim of the Lewis plaintiffs fails to state a
cause of action for the same reason that the General Municipal Law § 51 claim
of the Godfrey plaintiffs fails.
Addressing the Lewis plaintiffs' action based on the separation of powers
doctrine, essentially the complaint alleges that the Department of Civil
Service acted "inconsistently with the Legislature's pronouncements on
spousal benefits" and was thus in violation of Civil Service Law §164. In
the words of the Court of Appeals: “The statute itself refutes plaintiffs'
claim.”
Civil Service Law §161(1) provides that the President of the Civil Service
Commission is "authorized and directed to establish a health insurance
plan for state officers and employees and their dependents and officers"
and provides that every state employee "shall be entitled to have his spouse
and dependent children, as defined by
the regulations of the president, included in the coverage upon
agreeing to pay his contribution, if any, to the cost of such coverage for such
dependents" (emphasis in the original).
Accordingly, said the court, the statute thus expressly gives the President of
the Civil Service Commission the authority to define "spouse."
Moreover, said the court, the statute does not restrict the President's
provision of health insurance to spouses and dependent children. The language
is of entitlement, not restriction.
The Court of Appeals concluded by stating that "in each case the order of
the Appellate Division should be affirmed with costs."
* The decision notes
that “The Memorandum explained that the State had provided eligibility for employee
benefits, including New York State Health Insurance Program benefits, to the
domestic partners of State employees, including same-sex partners, since the
mid-1990s. The coverage, while mandatory for the State, as an employer, itself,
providing such coverage was discretionary for Participating Agencies (PAs) and
Participating Employers (PEs).”
** The New York State Employees’ Retirement System recognized “same-sex
marriages” for retirement benefit purposes if the union was performed in a
jurisdiction where performing a same-sex marriage was lawful. It successfully
defended a lawsuit challenging that policy [Godfrey v DiNapoli, 22 Misc.3d
249]. In the Godfrey case the jurisdiction was
The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08474.htm
Wallon v NYS Teachers' Retirement System, 294 AD2d 644
An employee's final average salary [FAS] is a critical element in determining
the individual's retirement allowance. In the Wallon case the issue before the
court concerned whether or not certain "lump sum payments" should
have been included in determining the retiree's FAS.
When Thomas Wallon retired from his position as an elementary school principal
with the
Initially TRS included these lump sum payments in determining Wallon's FAS for
the purpose of calculating his retirement allowance. Later TRS decided that
neither lump sum payment constituted "compensation" for the purpose
of determining his FAS within the meaning of Education Law Section 501(11).
TRS also determined that the inclusion of these amounts in calculating Wallon's
retirement allowance resulted in a $9,031.63 overpayment of retirement
benefits. This, said TRS, required it to deduct $1,000 from Wallon's monthly
benefits until this overpayment was recouped.
Wallon sued, seeking a court order annulling TRS's determinations. Supreme
Court ruled that while the lump sum payment for Wallon's tax deferred annuity
may not be included in determining his FAS, Avon's "payments in lieu of
health insurance was properly included in determining [Wallon's] FAS."
Wallon and TRS both appealed this ruling.
The Appellate Division affirmed the lower court's decision, holding that it had
previously ruled that "payments made near the end of an applicant's career
of benefits which he [or she] accumulated throughout the course of his [or her]
working life will not be included in the ultimate determination of his [or her]
retirement income," citing Martone v New York State Teachers' Retirement
Sys., 105 AD2d 511.
According to the decision, the record did not demonstrate that "the
payments to [Wallon's] annuity were for services performed during the time
period covered by the … collective bargaining agreement."
Turning to the question of including the amount of the lump sum payment in lieu
of health insurance in determining Wallon's FAS, the court noted that although
TRS had included such payments in the FAS of another
The Appellate Division agreed with Supreme Court's conclusion that Wallon and
Letvin "were similarly situated and had to be similarly treated by [TRS]
to avoid being arbitrary and capricious."
Finally, the court sustained the recoupment any overpayments made by TRS to
Wallon, commenting that TRS did not abuse its discretion by demanding such
repayment over a nine-month period since Wallon was on notice for at least 13
months that substantial portions of his FAS were being disputed and that he might
be required to repay any overpayments.
The Appellate Division observed that once Wallon had initiated his lawsuit, TRS
suspended the monthly deduction pending resolution of the litigation, thus
giving Wallon an additional 15-month grace period before resumption of the now
reduced deductions. Accordingly, the court ruled that TRS's recoupment schedule
of repayment over a nine-month period was neither arbitrary nor capricious.
Determining final average salary for retirement
purposes - lump sum payments
Wallon v NYS Teachers' Retirement System,
294 AD2d 644
An employee's final average salary [FAS] is a critical element in determining
the individual's retirement allowance. In the Wallon case the issue before the
court concerned whether or not certain "lump sum payments" should
have been included in determining the retiree's FAS.
When Thomas Wallon retired from his position as an elementary school principal
with the Avon School District, the School District
included its lump sum payments of $21,500 to Wallon's tax-sheltered annuity and
$14,793.43 in lieu of health insurance in reporting his compensation to the New
York State Teachers' Retirement System [TRS]. Both lump sum payments were made
in accordance with the terms of a collective bargaining agreement between the
District and Wallon's collective bargaining unit representative.
Initially TRS included these lump sum payments in determining Wallon's FAS for
the purpose of calculating his retirement allowance. Later TRS decided that
neither lump sum payment constituted "compensation" for the purpose
of determining his FAS within the meaning of Education Law Section 501(11).
TRS also determined that the inclusion of these amounts in calculating Wallon's
retirement allowance resulted in a $9,031.63 overpayment of retirement
benefits. This, said TRS, required it to deduct $1,000 from Wallon's monthly
benefits until this overpayment was recouped.
Wallon sued, seeking a court order annulling TRS's determinations. Supreme
Court ruled that while the lump sum payment for Wallon's tax deferred annuity
may not be included in determining his FAS, Avon's "payments in lieu of
health insurance was properly included in determining [Wallon's] FAS."
Wallon and TRS both appealed this ruling.
The Appellate Division affirmed the lower court's decision, holding that it had
previously ruled that "payments made near the end of an applicant's career
of benefits which he [or she] accumulated throughout the course of his [or her]
working life will not be included in the ultimate determination of his [or her]
retirement income," citing Martone v New York State Teachers' Retirement
Sys., 105 AD2d 511.
According to the decision, the record did not demonstrate that "the
payments to [Wallon's] annuity were for services performed during the time
period covered by the … collective bargaining agreement."
Turning to the question of including the amount of the lump sum payment in lieu
of health insurance in determining Wallon's FAS, the court noted that although
TRS had included such payments in the FAS of another Avon retiree, Richard Letvin, it disallowed similar payments in Wallon's
case. It appears that TRS's decision was based on its finding that Letvin, in
retirement, was covered by his spouse's health insurance while Wallon used his
lump sum payment to purchase health insurance.
The Appellate Division agreed with Supreme Court's conclusion that Wallon and
Letvin "were similarly situated and had to be similarly treated by [TRS]
to avoid being arbitrary and capricious."
Finally, the court sustained the recoupment any overpayments made by TRS to
Wallon, commenting that TRS did not abuse its discretion by demanding such
repayment over a nine-month period since Wallon was on notice for at least 13
months that substantial portions of his FAS were being disputed and that he might
be required to repay any overpayments.
The Appellate Division observed that once Wallon had initiated his lawsuit, TRS
suspended the monthly deduction pending resolution of the litigation, thus
giving Wallon an additional 15-month grace period before resumption of the now
reduced deductions. Accordingly, the court ruled that TRS's recoupment schedule
of repayment over a nine-month period was neither arbitrary nor capricious.
Informal Opinions of the State Comptroller, Op St Comp 80-105
The State Comptroller has issued an opinion indicating that a town may terminate the health insurance coverage of a retired town employee when the retiree becomes qualified for Medicare coverage benefits.
It appears that the view of the Comptroller is limited to local governments which are not participating in the State’s Employees’ Health Insurance Programs. §167-a of the Civil Service Law deals with this issue.