Overtime pay provisions set out in a collective bargaining agreement may not be applicable to police officers engaged in off-duty "outside employment”

Overtime pay provisions set out in a collective bargaining agreement may not be applicable to police officers engaged in off-duty "outside employment”

City of Syracuse v Syracuse Police Benevolent Assn., Inc., 2014 NY Slip Op 05251, Appellate Division, Fourth Department*

The Syracuse Police Benevolent Assn., Inc., [PBA] filed two grievances, both alleging that the City of Syracuse had violated the parties' collective bargaining agreement (CBA) by failing to pay overtime wages to its police officers providing security services during their off-duty hours at the Syracuse International Airport. In response to the PBA’s demand for arbitration the City file a petition pursuant to Article 75 of the CPLR seeking permanent stay of arbitration of both grievances.

The first grievance, Grievance 1, alleged that the CBA required the City to pay overtime for security services provided by police officers during their off-duty hours at the Syracuse International Airport. Although the Airport is owned by the City, it is managed by the Syracuse Regional Airport Authority (Authority). The second, Grievance 2, alleged that the CBA required the City to pay overtime to two such off duty police officers providing security at the Syracuse International Airport who were "dispatched" to a motel adjacent to the airport to "investigate a domestic dispute." 

According to the decision, the off-duty officers who provide security services at the airport are not hired to perform that work by the City nor are they hired by the Authority. They are hired by G4S Solutions, Inc. (G4S), a private security firm retained by the Authority.

Supreme Court granted the City’s petition and stayed the arbitration of both Grievances. The Appellate Division agreed with Supreme Court with respect to Grievance 1 but held that Supreme Court erred in staying the arbitration of Grievance 2.

The Appellate Division commenced its analysis of the Supreme Court’s ruling by indicating the basic procedures followed by the courts in deciding an application to stay or compel arbitration requires the court determining if the subject matter of the grievance arbitrable in contrast to the merit of the grievance. In so doing, the courts apply a two-part test:

1. Is there any statutory, constitutional or public policy bar to arbitrating the issue presented?

2. If it is decided that no such bar exists, the court must next determine if the parties, in fact, agreed to arbitrate the particular dispute by examining the relevant collective bargaining agreement.

Where there is specific provision in the CBA providing for submission of the dispute to arbitration, that provision controls. In contrast, where there is a broad arbitration clause, the court must determine if there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA.

As to the existence of a "reasonable relationship," if such a relationship is found to exist it is the role of the arbitrator, rather than the court, to "make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them."

In this instance the court found that the CBA set out a broad arbitration clause and thus it was required to determine if there was a reasonable relationship between the grievance and the alleged violation of the CBA.

In Grievance 1 the PBA alleged that the City violated §8.5 of the CBA which section provided that the City "shall pay for a minimum of four hours' work at overtime rates when an off-duty employee is called in to work ordered overtime for a period of time which is not contiguous to that employee's regular tour of duty."

PBA contended that the off-duty officers working at the airport were entitled to four hours of overtime pay, over and above the hourly rate paid by G4S, each time they perform a "police function," such as "being directed to conduct traffic roadblocks … collect and turn in evidence, investigate suspicious activity and perform other vehicle and traffic duties that only on-duty police officers can perform."

The Appellate Division said that Supreme Court was correct in granting the City’s petition seeking to stay the arbitration “because the grievance is not reasonably related to the subject matter of the parties' CBA.” The grievance, said the court, is based on an alleged violation of §8.5 of the CBA, which relates to compensation for officers who are "called in" to perform "ordered" overtime. Here the off-duty officers working for G4S at the airport are not ordered to work overtime but electe to work for G4S during their off-duty hours.

Further, said the court, the off-duty officers are not "called in" by the City when they make an arrest at the airport or otherwise engage in police functions and PBA conceded that off-duty officers who provide private security services at other venues in the city are not entitled to overtime pay each time they engage in police functions in accordance with the overtime provisions set out in the CBA. The Appellate Division said that it did not perceive any reason to reach a different result with respect to the airport.

The court’s analysis of Grievance 2, also based on an alleged violation of §8.5 of the CBA, resulted in a different conclusion – that the subject of the grievance was reasonably related to the CBA and thus Supreme Court erred in staying the arbitration of Grievance 2.*

In Grievance 2 PBA contended that the two identified officers who, while working at the airport, were "dispatched" to a nearby motel to "investigate a domestic dispute," and those officers thereafter prepared a police report concerning the incident.

Noting that the grievance alleged that “the investigation of domestic violence calls has ‘historically been bargaining unit work’ … [and] that the officers in question were ordered to respond to the [motel] by an on-duty police officer, the Appellate Division concluded that Grievance 2 alleged violations reasonably related to the CBA and that it should be left to the arbitrator to "make a more exacting interpretation of the precise scope of the substantive provisions of the [CBA]" and determine "whether the subject matter of the dispute fits within them."

* See City of Syracuse v Syracuse Police Benevolent Assn., Inc., 2014 NY Slip Op 05252
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Whistle blower’s failure to cite any specific law, rule, or regulation allegedly violated by the employer in the complaint not fatal to pleading a viable cause of action

Whistle blower’s failure to cite any specific law, rule, or regulation allegedly violated by the employer in the complaint not fatal to pleading a viable cause of action

2014 NY Slip Op 04889, Appellate Division, Second Department

In an action to recover damages for violation of Labor Law §740, the plaintiff [WB] appealed an order of the Supreme Court that granted the employer's motion to dismiss the complaint for “failure to state a cause of action.”

A cause of action based upon Labor Law §740, commonly known as the "whistleblower statute," is available "to an employee who discloses or threatens to disclose an employer activity or practice which (1) is in violation of a law, rule or regulation, and (2) creates a substantial and specific danger to the public health'"*

The Article 78 petition alleged that the plaintiff [WB] was terminated from her position after she complained to her superiors about certain conduct that the employer engaged in or tolerated. It further alleged that such conduct violated various laws or rules or regulations, and threatened public health.

Although WB’s complaint did not specify any particular law, rule or regulation that the employer allegedly violated, the Appellate Division said that it sufficiently identified the complained-of conduct by the employer and provided the required notice. Therefore, said the court, the failure to specify in the complaint any law, rule, or regulation was not fatal to pleading a viable cause of action pursuant to Labor Law §740.**

Accordingly, said the Appellate Division, that branch of the employer's motion to dismiss the complaint for failure to state a cause of action should have been denied by Supreme Court.

Reversing the Supreme Court’s ruling “on the law,” the Appellate Division denied the employer’s motion to dismiss WB’s complaint for failure to state a cause of action.

* §75-B.2(a) of the Civil Service Law provides, in pertinent part, “A public employer shall not dismiss or take other disciplinary or other adverse personnel action against a public employee regarding the employee's employment because the employee discloses to a governmental body information: (i) regarding a violation of a law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety; or (ii) which the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action.

** On a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the complaint must be construed liberally, the factual allegations deemed to be true, and the nonmoving party must be given the benefit of all favorable inferences.

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The placement of an individual’s name on the NYC Department of Education’s “Ineligible/Inquiry List” essentially bars future employment with the Department

The placement of an individual’s name on the NYC Department of Education’s “Ineligible/Inquiry List” essentially bars future employment with the Department

2014 NY Slip Op 05047, Appellate Division, First Department

As the U.S. Circuit Court of Appeals said in Segal v NYC Department of Education, 459 F3d 207, the placement of an individual’s name on the New York City Department of Education’s “Ineligible/Inquiry List” essentially render the individual ineligible for future employment with the New York City Department of Education [DOE].*

In this Article 78 action Supreme Court denied a former tenured teacher’s [Teacher] petition seeking to, among other things, remove her name from an "ineligible/inquiry list" maintained by the New York City Department of Education (DOE), and dismissed the proceeding. The Appellate Division affirmed the lower court’s ruling.

DOE placed had place Teacher’s name on the "ineligible/inquiry list" after her employment as a tenured school teacher was terminated following a disciplinary hearing pursuant to Education Law §3020-a.

The Appellate Division held that Supreme Court “properly found that the proceeding is time-barred, since it was commenced some five months after Teacher received notice of the DOE's determination,” explaining that Teacher is deemed to be on notice of the DOE Chancellor regulation regarding automatic ineligibility for reemployment upon termination.”

Accordingly, Teacher was "aggrieved" for the purposes of the running of the statute of limitations upon notice of her termination and her commencement of her CPLR Article 78 action more than four months later was untimely.

In addition, the Appellate Division pointed out that Teacher’s Article 78 proceeding was also barred by the Doctrine of Collateral Estoppel insofar as Teacher sought to re-litigate issues determined in a prior CPLR Article 75 proceeding challenging the termination of her employment.

In the words of the court, Teacher’s “challenge to her placement on the ineligibility list is, for all intents and purposes, a challenge to her termination, which she already had a full and fair opportunity to litigate.”

* A DOE Chancellor regulation provides that placement of an individual’s name on the list is an automatic consequence of termination and indicates that individual is ineligible for reemployment with the DOE absent express approval by the Chancellor.
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Termination of a firefighter from his position held to be a reasonable disciplinary penalty under the circumstances

Termination of a firefighter from his position held to be a reasonable disciplinary penalty under the circumstances
2014 NY Slip Op 04941, Appellate Division, Second Department

A hearing officer found a firefighter [Firefighter] guilty of misconduct* and imposed the penalty of termination from the Department. Firefighter appealed the penalty imposed by hearing officer.

Supreme Court granted Firefighter’s petition with respect to the penalty imposed by:

[1] annulling so much of the determination as terminated the petitioner's membership in the Department,

[2] reducing the penalty to a suspension for a period of 29 months, with credit for the period of suspension already served, and

[3] directing the Department to reinstate Firefighter as a member of the Department.

The Appellate Division revered the Supreme Court’s decision “on the law” and confirmed the penalty imposed by the hearing officer.

The court noted that an administrative penalty must be upheld unless it "is so disproportionate to the offense . . . as to be shocking to one's sense of fairness," thus constituting an abuse of discretion as a matter of law. Here, said the court, Firefighter’s conduct endangered himself and distracted his coworkers while they were fighting a fire, thus possibly endangering them as well.

Under these circumstances the Appellate Division held that the penalty of termination of membership was not shocking to one's sense of fairness. Thus Supreme Court should have denied that branch of the petition which sought to review the penalty, confirmed the penalty, and dismissed the proceeding on the merits.

* The hearing officer found Firefighter guilty of “verbally abusive conduct directed to fellow firefighters during the course of a fire,” and failing to follow direct orders, including an order directing him to leave the scene of an emergency because he was not attired in proper gear.”

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Free job retraining for high-skilled new Americans in science, technology, engineering and mathematics

Free job retraining for high-skilled new Americans in science, technology, engineering and mathematics

Source: The New York State Office for New Americans (ONA)

On July 14, 2014, the New York State Office for New Americans (ONA), The Cooper Union and  B’nai Zion Foundation opened registration for free professional courses and job placement assistance for high-skilled New Americans for the Fall 2014 semester.

This innovative public-private partnership with the Retraining Program for Immigrant Engineers is part of ONA’s focus on developing and leveraging the professional skills of New Americans and was launched in March of 2013 by Governor Cuomo. ONA is the first statewide office dedicated to assisting New York State's immigrants in their efforts to contribute to the economy and become a part of the family of New York.

Eligible immigrants are able to enroll in introductory and high-technology courses designed to update participants’ engineering, computer programming, and business skills. Classes are taught by The Cooper Union faculty and experts in the field and program offerings are flexible based on demand in the marketplace and needs of students.

All participants must have completed courses of study in their home country and be seeking retraining in the fields of science, technology, engineering, and mathematics (STEM).  Participants must also be permanent residents of the U.S. and have work authorization. 

“These courses are an important vehicle in expanding work opportunities for New Americans who already possess the skills our State’s employer’s need,” said Jorge I. Montalvo, Director of the New York State Office for New Americans. “We encourage eligible New Americans to enroll for these courses in order to maintain self-reliance and economic independence through productive employment in their chosen field relating to any of the STEM disciplines.”

Additional information, including courses being offered, is posted on the Internet http://www.bnaizion.org/retraining.php.

To schedule an appointment or to determine eligibility, call 212.725.1211, ext. 6245 or 646.485.7982, Monday through Thursday (9:00am to 5:00pm) and Friday (9:00am to 2:00pm). 
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IRS guidance on sick leave plans

IRS guidance on sick leave plans

Source: Internal Revenue Service, Office of Federal, State and Local Governments, July 2014

Government entities have established a variety of employer plans that provide a retirement benefit for employees based on credit for accumulated unused sick leave.

For example, §167.4 of the Civil Service Law provides that upon the retirement of a State employee whose salary is paid directly by the State, the actuarial value of the employee’s sick leave at the time of his or her retirement is to be used to pay all or part of the individual’s health insurance premium for the individual and his or her dependents during retirement while §41.j of the Retirement and Social Security Law provides for the inclusion of unused sick leave for members in the employ of the State as an employer in addition to any other service credit to which he or she is entitled at the rate of one day of additional service credit for each day of accumulated unused sick leave credit which he or she has at time of retirement for service, not to exceed one hundred sixty-five days.

Administrators of a plan with such features, or an appointing authority considering adopting a plan of this type for its employees, should be aware of how different features of such plans may affect the tax treatment of these benefits. The IRS Office of Federal, State and Local Governments [OFSLG] advises:

General Rule for Recognizing Income

In general, all compensation is included in wages at the time the Employees receive it, unless a specific exception applies.

One such exception, Internal Revenue Code Section 106, which provides that employer contributions to a health or hospital insurance plan for employees or former employees, their spouses and dependents, are excludable from the income of employees, and exempt from withholding for income tax, social security, and Medicare purposes.

When is income considered received?

Under IRC Section 451, individuals recognize income as soon as they have effective control over it; that is, when the funds are made available to the taxpayer without substantial limitations. This is known as the “constructive receipt” rule. Employer-provided health insurance benefits under Section 106 are excludable because, when paid directly by the employer, the employees are not considered to have constructive receipt of income through this benefit.

Generally, Section 106 of the Code provides that health and medical benefits can be provided tax-free by an employer. However, if there is an option/choice to receive cash or an other benefit, this may result in taxable wages, even if the employee does not elect to receive the cash [emphasis supplied].

If you have a plan or are considering a plan that provides for such a feature, you may want to review the IRS analysis, discussed below, that addresses whether or not such amounts can be excluded from an employee’s or former employee’s wages.

Note: Section 125 (“cafeteria”) plans provide a partial exception to the constructive receipt rules. These plans provide a choice between cash wages and a salary reduction to receive an excludable benefit. If the benefit is selected, the value is not included in wages. A Section 125, or cafeteria plan, cannot provide for deferred compensation. Only those benefits specifically indicated in Section 125 are eligible for tax-free treatment.

Revenue Ruling 75-539

Revenue Ruling 75-539 addresses the constructive receipt rules with specific reference to plans involving benefits for accumulated sick leave. This ruling remains the basis for the determining the tax treatment of various plans and has been cited many times since it was issued in 1975.

The ruling analyzes and distinguishes two labor contracts.

Situation 1: Upon retirement an employee will receive either a cash payment representing a part of unused sick leave, or may elect to apply to the employee’s share of the cost of participation in a health plan until the funds are exhausted.

The ruling concluded that, because in the employee had a choice to receive the benefit in cash, it was constructively received as income, even if the employee chose not to use the cash option. Therefore, the value of the benefit is included in gross income.

Situation 2: Upon retirement, the value of a portion of accumulated unused sick leave is placed in an escrow account to pay the full premiums of continued participation in the health plan until the funds are exhausted. No funds may be received in cash, and any unused part of the escrow amount reverts to the employer. Because these amounts were not made available to the employee directly, they constituted employer contributions to a health plan and are excludable from income under Section 106.

For additional information contact one of the following OFSLG Specialists for New York State: Dave Coulon [(315) 233-7305]; Jean Redman [(607-378-0069] or Granville Shannon [(212) 436 -1492].