Selected reports issued by the Office of the State Comptroller during the week ending May 14, 2016

Selected reports issued by the Office of the State Comptroller during the week ending May 14, 2016

Click on text highlighted in color to access the entire report

State Comptroller DiNapoli calls for reforms of certain State fiscal practices

New York State Comptroller Thomas P. DiNapoli called for changes to the state’s fiscal practices, including limiting discretionary lump sum spending, restricting "backdoor spending" by public authorities and imposing a constitutional limit on state debt, among other reforms, to bring increased transparency and accountability to state finances.

http://www.osc.state.ny.us/press/releases/may16/051116.htm?utm_source=weekly+news&utm_medium=email&utm_term=fiscal+reform&utm_content=20160515&utm_campaign=fiscal+oversight

Construction delays in public housing

Problems with the administration of the public housing modernization program run by New York State Homes and Community Renewal have led to years-long delays in projects outside New York City, according to an audit released by State Comptroller Thomas P. DiNapoli.

http://www.osc.state.ny.us/press/releases/may16/051216.htm?utm_source=weekly+news&utm_medium=email&utm_term=housing&utm_content=20160515&utm_campaign=fiscal+oversight

Fast food companies agree to stronger conduct assessments of human rights risks related to labor standards in their operations and supply chains

New York State Comptroller Thomas P. DiNapoli announced that Fortune 500 fast food companies Wendy’s and YUM! Brands, the parent company of Kentucky Fried Chicken, Pizza Hut and Taco Bell, have agreed to conduct assessments of human rights risks related to labor standards in their operations and supply chains. The companies also agreed to publish these risk assessments on their websites later this year.

http://www.osc.state.ny.us/press/releases/may16/051316.htm?utm_source=weekly+news&utm_medium=email&utm_term=corporate+governance&utm_content=20160515&utm_campaign=pension+fund

Municipal Audits released

New York State Comptroller Thomas P. DiNapoli announced his office completed audits of the following municipalities:

Town of East Greenbush, Justice Court Operations

Town of Elizabethtown, Supervisor’s Records and Reports

Lockport Housing Authority, Executive Director’s Compensation

City of Long Beach, Review of the City’s budget

Putnam County, Misappropriation of Cash Receipts

Village of South Glens Falls, Financial condition and budgeting practices

Appellate Division holds that deficiencies in the performance review process of a probationary teacher were not merely technical but undermined the integrity and fairness of the process

Appellate Division holds that deficiencies in the performance review process of a probationary teacher were not merely technical but undermined the integrity and fairness of the process

Taylor v City of New York, 2016 NY Slip Op 03454, Appellate Division, First Department

In lieu of summarizing the Appellate Division’s ruling in Taylor v City of New York, the decision is reproduced below in its entirety as an illustration of what the Appellate Division characterized as a demonstration of the “deficiencies in the performance review process resulting in petitioner's unsatisfactory rating (U-Rating) for the 2012-2013 school year that were not merely technical but undermined the integrity and fairness of the process.”

Taylor v City of New York

2016 NY Slip Op 03454

Decided on May 3, 2016

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 3, 2016
Mazzarelli, J.P., Andrias, Saxe, Moskowitz, Kahn, JJ.

718 100383/14

In re Leslie Taylor, Petitioner-Appellant,

v

City of New York, et al., Respondents-Respondents.

Glass Krakower LLP, New York(Bryan D. Glass of counsel), for appellant.

Zachary W. Carter, Corporation Counsel, New York (Melanie T. West of counsel), for respondents.

Judgment, Supreme Court, New York County (Michael D. Stallman, J.), entered September 25, 2014, insofar as appealed from as limited by the briefs, denying the petition to annul a determination of respondents, dated December 6, 2013, which denied petitioner's appeal of an unsatisfactory performance rating (U-Rating) for the 2012-2013 school year, and dismissing the proceeding brought pursuant to CPLR article 78, unanimously reversed, on the law, without costs, the petition granted, and the matter remanded to respondents for further proceedings.

Petitioner was hired as a probationary special education teacher. During the first two years of her three-year probationary period, she had an exemplary record, receiving satisfactory ratings and several letters of commendation. In her third year, on November 20, 2012, petitioner participated in an annual review meeting concerning a special education student in her fourth-grade class (the Annual Review). At the meeting, petitioner opposed the position taken by the school's special education coordinator and sided with the student's mother, who had asked that her son be removed from the "Alternate Assessment" program favored by Principal Jennifer Jones-Rogers.

The very next day, November 21, 2012, the principal conducted the first formal observation of petitioner for the 2012-2013 school year. On November 26, 2012, after a post-observation conference, the principal issued an observation report that found petitioner's math lesson unsatisfactory because: (1) "[she] did not model for children what [she] expected them to do"; (2) "[her] [l]esson did not address the problem [she] presented for students to solve"; (3) "[she] did not incorporate rigor in [her] lesson effectively"; and (4) "[she] did not include accountable talk structures in [her] lesson."

The report advised petitioner that a "log of support" would be put in place for her "to grow [her] practice and move toward attaining satisfactory performance." Petitioner submitted a written rebuttal in which she stated that she had conducted the lesson in the exact manner that the principal had outlined in their pre-observation conference and that the post-observation conference focused more on the principal's dissatisfaction with the position petitioner had taken at the Annual Review than on the math lesson in question.

On February 21, 2013, Assistant Principal (AP) Scott Wolfson conducted a formal observation of another of petitioner's math lessons. The post-observation conference was not held until April 16, 2013, at which time petitioner was given an observation report that rated the lesson unsatisfactory because: (1) "[w]hile the children within your group were able to solve the problems that [she] presented to them, it was evident that their solutions indicated algorithmic solution strategies rather than a deeper conceptual understanding of the problems"; (2) "[she] failed to provide opportunities for [her] students to discuss their mathematical thinking with each other"; and (3) the questions that she posed "[did] not serve to develop children's conceptual understanding of mathematics, which should be our goal." The report advised petitioner that "[a]s a result of this lesson, we will continue to implement a log of assistance in order to support you in our mutual goal of attaining a satisfactory rating."

Petitioner submitted a rebuttal stating that "[t]he fact that my [special education] students were able to solve the word problems with algorithmic solution was a huge accomplishment for my students who entered the fourth grade far below grade level" and that "Mr. Wolfson wanted to concentrate on the fact [that] the students struggled with conceptualizing their understanding of mathematics, which was not the goal for my lesson plan for that day." Petitioner added that "Mr. Wolfson and I also planned my lesson together two days before and [he] never mentioned that he wanted to observe how the students conceptualize math."

Meanwhile, on April 10, 2013, petitioner received a "Summons to Disciplinary Conference" from Principal Jones-Rogers. On April 18, 2013, after a conference was held, the principal and the AP issued a letter advising petitioner that: (1) "[she] failed to suggest appropriate modifications to [her] students' IEP's to support their academic needs"; (2) "[i]n the case of [E.G.], [she] failed to provide [E's] parents with a promotion in doubt letter"; and (3) "[she was] negligent in [her] attention to the records and reports required of [her] in [her] capacity as special education teacher."

On April 22, 2013, petitioner received an overall U-Rating for the 2012-2013 school year, even though her performance was rated satisfactory in 14 of the 22 categories considered. The rating form contained a signature by the principal, dated January 19, 2013, recommending "[petitioner's] discontinuance of probationary service." It also contained a signature by the district superintendent, dated January 22, 2013, adopting the recommendation. On April 24, 2013, petitioner received a revised U-Rating that changed the date of the principal's and district superintendent's signatures to April 22, 2013.

The Department of Education discontinued petitioner's probationary employment as of May 29, 2013, a month before the school year ended. In June 2013, petitioner sought to review her personnel file and discovered that all of her satisfactory written formal and informal observations from the 2010-11 and 2011-12 school years were missing. On October 8, 2013, Principal Jones-Rogers resigned.^[FN1] 

An administrative appeal hearing was conducted on December 3, 2013. Principal Jones-Rogers did not appear. At the hearing, petitioner contended that the principal had engineered the two unsatisfactory lesson observations, the disciplinary letter, and the unsatisfactory 2012-2013 annual rating, which led to her termination, to retaliate against her because she opposed the principal's special education policies and had sided with the mother at the Annual Review. As to the disciplinary letter, petitioner maintained that she did not have the authority to unilaterally make the changes to the Individualized Education Plans (IEP[s]) that the principal and the AP faulted her for not making. She also complained that it was not until April that the principal and the AP sent a memo telling her that she had to revise E.G.'s IEP, by which time the deadline to add modified promotional criteria had passed.

Stephanie Flummery, the chapter leader at the school, testified on petitioner's behalf. Ms. Flummery stated that one of her duties was to discuss, with the administration, teachers who faced unsatisfactory reviews and that before November 2012 petitioner had never been criticized. In November 2012, petitioner contacted Ms. Flummery because the principal had told her that she needed to rethink her profession after petitioner had not agreed to force a parent to maintain her son on an alternate assessment. Before that, petitioner had always been "a shiny star" [sic] to the principal. After the second observation by the AP, petitioner told her that the principal had fired her. A meeting was then held at which the principal promised that she would "leave [petitioner] alone" and would not discontinue her. However, the principal went back on her word.

After the hearing, by letter dated December 6, 2013, the district superintendent affirmed the discontinuance of petitioner's probationary service.

The record demonstrates deficiencies in the performance review process resulting in petitioner's unsatisfactory rating (U-Rating) for the 2012-2013 school year that were not merely technical but undermined the integrity and fairness of the process (see Matter of Gumbs v Board of Educ. of the City Sch. Dist. of the City of N.Y., 125 AD3d 484 [1st Dept 2015]; Matter of Brown v City of New York, 111 AD3d 426 [1st Dept 2013]). Petitioner was not given an adequate opportunity to improve her performance, and the observation reports did not suffice to alert her that her year-end rating was at risk.

Petitioner's account of the post-observation conference held on November 26, 2012, where the principal allegedly focused on the Annual Review, rather than perceived flaws in petitioner's lesson, was not refuted at the hearing and, when viewed alongside the other evidence presented, raises a factual issue as to whether the principal engineered the U-Rating to force petitioner from her job for refusing to go along with her policy of steering children into special education classes despite parental wishes to the contrary. While the November 26, 2012 observation report stated an intent to assist petitioner in obtaining a satisfactory performance level, certain of the meetings reflected in the support log were not specific to petitioner. A meeting with the math consultant did not address how to develop plans for children with special needs, and the special education coaching sessions listed were optional. At the hearing, AP Wilson acknowledged that petitioner had asked him to model a mathematics lesson and that he did not do it. Further, when asked if he had discussed the comments made by the principal at the November 26 post-observation conference at his December 3, 2012 meeting with petitioner, the AP said he did not recall discussing them.

Although the second observed lesson took place on February 21, 2013, the post-observation conference did not take place until April 16, 2013, almost two months later and only days before petitioner received the unsatisfactory U-Rating. There is nothing in the record that would demonstrate that petitioner received any professional development support after February 28, 2013, the last entry in the support log. The long delay in providing feedback, together with the absence of any remediation after February 28, 2013 and the rapid sequence of events in April 2013, establishes that petitioner was not given an opportunity to remedy the alleged defects and implement the multiple recommendations (see Matter of Brown, 111 AD3d at 427).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MAY 3, 2016

CLERK

Footnotes

Footnote 1: Two months before her resignation, parents, teachers, students and a state senator had held a rally to protest Principal Jones-Rogers' policies, which allegedly included retaliating against teachers who disagreed with her and cramming students into special education classes without parental consent.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03454.htm

Teachers who retired while an expired CBA continued in force under the Triboro Doctrine contend that the expired CBA controls with respect to their health insurance benefits

Teachers who retired while an expired CBA continued in force under the Triboro Doctrine contend that the expired CBA controls with respect to their health insurance benefits

Evans v Deposit Cent. Sch. Dist., 2016 NY Slip Op 03578, Appellate Division, Third Department

The petitioners in this CPLR §3001 action are former Deposit Central School District schoolteachers [Retired Teachers] who retired from their employments with the School District at a time when, pursuant to Civil Service Law §209-a(1)(e), which codified the so-called Triboro Doctrine, the terms of an expired Collective Bargaining Agreement [CBA] remained in effect pending the negotiation of a successor CBA.

In November 2013, the District notified the Retired Teachers that a new CBA had been negotiated and ratified and that, under the terms of that contract, the District's contribution toward the cost of the Retired Teachers' health care premiums had been reduced.

The Retired Teachers sought a declaratory judgment that they "are lawfully entitled to receive the same health benefits as all other teachers who retired during the effective term of the [prior CBA]" and reimbursement of the premiums that they paid "under protest" pursuant to the terms of the new CBA. Rather than submitting an answering, the School District moved to dismiss the complaint, asserting that [1] Supreme Court lacked jurisdiction over the matter, [2] the Retired Teachers failed to state a cause of action and [3] the claim was untimely. Supreme Court granted School District's motion and the Retired Teachers appeal.

The Appellate Division reversed the Supreme Court's ruling, explaining that the Retired Teachers’ claim does not fall within the exclusive jurisdiction of the Public Employment Relations Board [PERB] as Civil Service Law §205(5)(d) [the Taylor Law] provides that PERB lacks the "authority to enforce an agreement between an employer and an employee organization and shall not exercise jurisdiction over an alleged violation of such an agreement that would not otherwise constitute an improper employer . . . practice."

Further, said the court "PERB . . . has consistently interpreted that provision to deprive it of jurisdiction ... when the underlying disputes are essentially contractual, favoring that the parties instead resort to the courts to resolve such disputes."

As framed by the Appellate Division, the Retired Teachers “raise, in essence, a contractual dispute as to whether they are entitled to the contribution amount [for health insurance] set by the prior CBA because, although expired, that was the contract that was in effect at the time of their respective retirements” and do not allege that School District committed any act or omission that would constitute a violation of the Taylor Law.  

The parties do not dispute that the provision of health care benefits is a matter plainly addressed in both contracts. Significantly, said the Appellate Division, as the petitioners are now retireed, the School District does not have a statutory duty to bargain with them within the meaning of the Taylor Law, citing Aeneas McDonald Police Benevolent Assn. v City of Geneva, 92 NY2d 326. Thus the Retired Teachers’ claim is contractual in nature and Supreme Court erred in dismissing the complaint for want of subject matter jurisdiction.

Considering the School District’s alternative claim that the Retired Teachers failed to state a cause of action, the Appellate Division said “On a motion to dismiss for failure to state a cause of action, the trial court must construe the complaint liberally, accept the facts alleged in the complaint as true, afford the plaintiffs the benefit of all favorable inferences and determine whether the facts alleged support any legally cognizable theory,” Applying this standard, the Appellate Division concludes that, by alleging that the School District failed to honor a contractual obligation under the prior CBA, the Retired Teachers have stated a legally cognizable claim for breach of contract.

The Appellate Division also held that the Retired Teachers’ claim was timely. Noting that the proper vehicle for seeking damages arising from an alleged breach of contract by a public official or governmental body is an action for breach of contract, not a proceeding pursuant to CPLR Article 78, the court opined that the Retired Teachers’ claim “falls safely within the six-year statute of limitations applicable to breach of contract claims, as [the Retired Teachers] commenced this action less than a year after learning of the ratification of the new CBA and paying their premiums under protest."

Ruling that the grounds raised by School District in its motion to dismiss are “without merit” and Supreme Court erred in dismissing the complaint, the Appellate Division reversed Supreme Court’s order and remitted the matter to the Supreme Court to permit the School District to serve an answer within 20 days of the date of this Court's decision.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03578.htm

An appointing authority’s neglecting to make a timely designation of an individual to serve in lieu of the appointing authority in a §75 disciplinary action is a fatal omission

An appointing authority’s failing to make a timely designation of an individual to serve in lieu of the appointing authority in a §75 disciplinary action is a fatal omission

Bruso v County of Clinton, 2016 NY Slip Op 03576, Appellate Division, Third Department [Bruso I]

Bruso v Clinton County, 2016 NY Slip Op 03577, Appellate Division, Third Department [Bruso II]

Bruso I

Zetra Bruso was employed by the County of Clinton as the head nurse of the Clinton County Nursing Home. In November 2012, Wendie Bishop, the administrator of the nursing home and its appointing authority, placed Bruso on administrative leave pending an investigation into “possible performance issues.” In December 2012, Bishop filed 12 disciplinary charges against Bruso pursuant to §75 of the Civil Service Law alleging 28 specific acts of misconduct and incompetence.

The Hearing Officer found that substantial evidence supported a majority of the charges and specifications and recommended that Bruso's be terminated from her position. The Clinton County Administrator, Michael E. Zurlo, who had been designated by Bishop to serve in her place upon her disqualifying herself from making the final determination in this disciplinary action, adopted the Hearing Officer's findings and recommendation and terminated Bruso.

Bruso filed an Article 78 petition seeking a court order annulling Zurlo's determination, contending that [1] the Hearing Officer erred in refusing to admit certain evidence at the hearing and [2] Zurlo was not properly designated to serve in the place of the appointing authority.

Addressing Bruso’s claim that erred in refusing to admit into evidence the Civil Service Commission's Manual of Procedure in Disciplinary Actions, the Appellate Division ruled that the Hearing Officer, properly excluded the Commission’s Manual. The court explained that generally “all relevant material and reliable evidence which will contribute to an informed result should be admissible in disciplinary proceedings," here the Hearing Officer had properly excluded the Manual as it “merely acts as a guideline [and] was not relevant to the determination of whether [Bruso] was guilty of the alleged misconduct.”

With respect to the “appointing authority” issue, the Appellate Division noted that Bishop was the  appointing authority and vested with the power to remove Bruso from her employment. As Bishop had filed the charges against Bruso, had appointed the Hearing Officer and had testified at length at the hearing, she was “personally [and] extensively involved in the disciplinary process.” Accordingly, said the court, Bishop had “properly disqualified herself from reviewing the record and the recommendation of the Hearing Officer and rendering a determination on the charges.”

Bishop had designated Zurlo, a person with supervisory authority over Bruso, to act in her place. However, although Zurlo stated in his July 15, 2013 determination terminating Bruso's employment that Bishop had delegated her authority to him, Bishop and Zurlo affirmatively stated in their respective affidavits that the designation had occurred on July 22, 2013, seven days after Zurlo made the determination.

Accordingly, said the Appellate Division, the record did not support the conclusion that Bishop had vested Zurlo with the power to remove Bruso from her employment at the time of he had made his determination.

The court remitted the matter “for a de novo review of the record and the Hearing Officer's recommendation by ‘the officer or body having the power to remove’ [Bruso] from her employment or, if such officer or body is disqualified, a qualified individual to be designated by such officer or body.” However, said the Appellate Division, as Zurlo has already reviewed the record and the findings and recommendation of the Hearing Officer in Bruso I, “we conclude that it would not be appropriate for him to conduct the required de novo review upon remittal” of Bruso I.

In addition, the Appellate Division said although Bruso was entitled to back pay and benefits, “in a decision decided herewith, [Bruso v Clinton County, Bruso II] we have confirmed a July 22, 2013 determination finding [Bruso] guilty of an additional charge brought pursuant to Civil Service Law §75 … and terminating her employment based on that finding …. Under these circumstances, petitioner is entitled to back pay and benefits only for the period from July 15, 2013 through July 21, 2013.”

Bruso II

The genesis of the disciplinary action initiated against Bruso is set out in Bruso I above. At a hearing on those charges, Bruso attempted to admit into evidence a "Medication and Treatment Misadventures Form" [the Form], an internal quality assurance document used by the nursing home to identify and address errors in medicating its residents, as well as a resident's narcotics prescription that was attached to the form. This resulted in the appointing authority, the administrator of the nursing home, filing two additional charges against Bruso in April 2013 alleging three specifications of alleged misconduct and incompetence. In the words of the Appellate Division, “[a]s relevant here, [Bruso] was alleged to have knowingly possessed [a] form and the attached prescription without authorization from the nursing home."

Following a hearing on the April 2013 these charges, a Hearing Officer found that all three specifications were supported by substantial evidence and recommended the  termination of Bruso's employment. Zurlo, who had been designated by the appointing authority to serve in her stead, accepted the Hearing Officer's findings and recommendation and concluded that termination of Bruso’s employment was the appropriate penalty.

Bruso then initiated a second CPLR Article 78 action seeking, among other things, to annul Zurlo's determination concerning the April 2013 charges. Supreme Court dismissed two of the specifications as untimely under Civil Service Law §75(4) and transferred the proceeding to the Appellate Division.

Bruso contended that the determination should be annulled because the Hearing Officer was biased. The Appellate Division rejected her argument. The court said that “… hearing officers are presumed to be free from bias, an appearance of impropriety is insufficient to set aside an administrative determination; [the] petitioner must provide factual support for his [or her] claim of bias and prove that the outcome flowed from that bias." Conceding that the Hearing Officer presided over the hearing on the December 2012 charges, the court said that Bruso failed to overcome the presumption and establish that the Hearing Officer prejudged the matter. (see Matter of Compasso v Sheriff of Sullivan County, 29 AD3d at 1065).

As to Zurlo’s participation in Bruso II,* the court said that it was satisfied that Zurlo's determination was independent and fully informed. The Appellate Division explained that “[i]n evaluating whether an administrative determination is informed, courts accord the determination a presumption of regularity and will not disturb it absent ‘a clear revelation that the administrative body made no independent appraisal and reached no independent conclusion.’”

In addition, the court noted the record shows that the hearing transcript and exhibits were made available to Zurlo and that he reviewed the posthearing briefs submitted by the parties, as well as the findings, conclusions and recommendation of the Hearing Officer. Addressing Bruso’s assertion that Zurlo did not read the enter record, the Appellate Division, citing Perryman v Village of Saranac Lake, 64 AD3d 830, said the he was not required to read the entirety of the hearing transcript.

Finding that Zurlo's determination that Bruso was guilty of the remaining specification was supported by substantial evidence, the court said that it “will not second guess the credibility determinations of the administrative factfinder.”

Citing the Pell doctrine, Pell v Board of Educ. of Union Free School Dist. No. 1, 34 NY2d 222, the court said that it did not find that termination of Bruso’s employment is so disproportionate to the offense as to be shocking to one's sense of fairness.

* Although in Bruso I the Appellate Division concluded that at the time of his determination of the December 2012 charges Zurlo was not authorized to review the record and the Hearing Officer's recommendation and render a determination on those charges, the court said that “the same concern is not present here, [i.e., in Bruso II] as Zurlo was vested with the power to review the present record and render a determination on the April 2013 charges at the time that he did so.”

The Bruso I decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03576.htm

The Bruso II decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03577.htm

_____________

The Discipline Book - A 458 page guide focusing on New York State laws, rules, regulations, disciplinary grievances procedures set out in collective bargaining agreements and selected court and administrative decisions concerning disciplinary actions involving state and municipal public officers and employees. For more information click on http://booklocker.com/5215.html

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Determining if an employer-employee relationship exists for the purposes of unemployment insurance

Determining if an employer-employee relationship exists for the purposes of unemployment insurance

Ritch (Island Tutoring Ctr., Inc.--Commissioner of Labor), 2016 NY Slip Op 03569, Appellate Division, Third Department

Greene (Syracuse Socy. for New Music, Inc.--Commissioner of Labor), 2016 NY Slip Op 03567, Appellate Division, Third Department

The question of whether an employer-employee relationship exists is a factual question to be resolved by Unemployment Insurance Appeal Board and courts will not disturb its determination when it is supported by substantial evidence in the record. As the Court of Appeals held in Empire State Towing and Recovery Assn. [Commissioner of Labor], 15 NY3d 433, "An employer-employee relationship exists when the evidence shows that the employer exercises control over the results produced or the means used to achieve the results," with the latter the more important element of the test.

The IslandTutoring Center, Inc. Decision

ITC was in the business of providing general and special education tutoring services to school districts, private schools and private clients and retained private tutors to provide these services.

Kathleen Ritch and Alissa Bianco provided educational tutoring services to ITC's clients. When their employment with ITC ended, they filed applications for unemployment insurance benefits. Initially the Labor Department determined that both Ritch and Bianco [Claimants] were employees of ITC and that ITC was liable for unemployment insurance contributions based on remuneration paid to Claimants and other similarly situated tutors working for ITC. ITC objected, contending that Claimants and the other tutors were independent contractors. Following an administrative hearing, an Administrative Law Judge sustained ITC's objection and overruled the Department's determinations.

Ultimately the Unemployment Insurance Appeal Board reversed the determinations of the Administrative Law Judge and sustained the Department's initial decision that Claimants were employees and not independent contractors. ITC appealed but the Appellate Division affirmed the Board’s determination.

The court explained that it had previously held that an organization which screens the qualifications of professionals, pays them at a set rate and then offers their services to clients "exercises sufficient control to create an employment relationship."

In this instance, said the court, the record establishes that ITC advertises for tutors to provide tutoring services to its clients, interviews and screens a prospective tutor's résumé and his or her list of references. If employed, the tutor would typically sign a contract indicating that, among other things, the tutor was an independent contractor. When a client contacted ITC to request tutoring services, it would select a tutor from its database and inform that tutor of the area of study or subject to be instructed and the number of tutoring hours required. Although tutors were free to decline assignments, ITC did not permit tutors to provide their own substitutes after accepting an assignment.

Further, ITC required tutors to fill out time sheets and its session report forms in order to receive payment. As to payment, ITC paid its tutors prior to receiving payment from its clients, reimbursed tutors for certain expenses and loaned tutors teaching materials from its library when necessary. ITC also handled its clients' complaints and feedback concerning the performance of its tutors and could remove tutors from assignments if there was a negative complaint.

The Appellate Division held that this constituted substantial evidence supporting the Board's determination that an employer-employee relationship existed and that ITC was liable for contributions on remuneration paid Claimants and to all others determined to be similarly situated to Claimants.

The Syracuse Society for New Music, Inc. Decision

From 1980 to 2011, Linda M. Greene performed as a professional flautist at various new classical music concerts produced by the Syracuse Society for New Music, Inc. [SNM].

In 2012 Greene filed an application for unemployment insurance benefits. The Department of Labor determined that she was an employee — and not an independent contractor — entitled to benefits and that SNM was liable for additional contributions on remuneration paid to Greene and others similarly employed. Following a hearing, an Administrative Law Judge sustained those determinations and, upon administrative appeal, the Unemployment Insurance Appeal Board affirmed. SNM appealed.

The Appellate Division disagreed and reversed the Board’s decision. The court said the record indicated that Greene “was retained only occasionally and sporadically by SNM to perform classical music with an orchestra at various venues; … was paid at a set rate for each concert; was not required to sign a written contract; was permitted to accept or reject any assignments offered; maintained other employment while performing for SNM; and suffered no restrictions of any sort whatsoever upon her ability to perform for other organizations.

Greene testified that she had never missed a performance, but if she had hypothetically needed to be absent, it would be her ethical responsibility to attempt to obtain her own replacement. The treasurer of SNM testified that, assuming circumstances prevented Greene from attending a performance, "it would be a collaboration" to obtain a substitute, although SNM would not generally ask a musician to provide his or her own substitute.

SNM did not provide Greene with equipment nor was she not required to wear a uniform or dress in any particular manner and although the greater portion of the necessary practice for the performances was performed wholly at Greene's discretion, there were necessarily scheduled rehearsals and defined performance dates.

The requirements that Greene rehearse and perform specific pieces of music on set dates at set venues did not, in the court’s view, demonstrate meaningful control but that these requirements were, instead, inescapably inherent in the underlying function, as a concert performance necessarily demands a high level of coordination.

Explaining that a requirement that work be properly performed does not constitute an exercise of control and, in this instance, any alleged control exercised over Greene was necessary to ensure that the work for which she had been retained was carried out properly.

Accordingly, the Appellate Division, Judge Rose dissenting, held that the record lacks substantial evidence demonstrating that SNM exercised overall control over important aspects of Greene's work such as to place her within the ambit of an employer-employee relationship with SNM.

The ITC decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03569.htm

The SNM decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_03567.htm

NOTE: Readers may be interested in participating in a free Internal Revenue Service Webcast Worker Classification: Employee or Independent Contractor? scheduled to be held on Thursday, May 12, 2016. For additional information and the link to register for the Webcast, go to:

http://publicpersonnellaw.blogspot.com/2016/05/worker-classification-employee-or.html