Employee's request for legal representation and attorney fees incurred as the result of a lawsuit brought by a coworker in which she was a named defendant rejected by the employer

Plaintiff commenced this action against the City of New York [City] and one of its employees, [Employee], among others, seeking to recover damages for alleged employment discrimination on the basis of sex and unlawful retaliation in violation of Administrative Code of the City of New York §8-107.

Employee requested that the City's Corporation Counsel to provide her with legal representation in Plaintiff's action but Corporation Counsel denied her request. Employee then retained her own counsel and initiated a cross-claim against the City pursuant to General Municipal Law §50-k seeking, among other things, to recover attorneys' fees and costs she incurred in her defense in Plaintiff's action.

In response City filed a motion for summary judgment dismissing Employee's cross-claim seeking fees and costs incurred in her defense of Plaintiff's action. Supreme Court denied the City's motion and the City appealed. 

The Appellate Division reversed Supreme Court's order dismissing the City's cross-motion for summary judgment with respect to the cross-claim of Employee to recover attorneys' fees and costs incurred in Employee's defense of Plaintiff's action.

In the words of the Appellate Division, "City demonstrated its prima facie entitlement to summary judgment dismissing so much of [Employee's] cross-claim as sought to recover attorneys' fees and costs incurred in her defense of this action by submitting the discipline report, in which [Employee] accepted the OEEO's [Office of Equal Employment Opportunity] substantiated findings, inter alia, that [Employee] subjected a coworker to 'inappropriate touching' on three separate occasions". 

This, said the court, provided a sufficient factual basis for Corporation Counsel's determination that Employee was not entitled to representation or indemnification on the ground that Employee violated one or more of the employer's rules and was not acting within the scope of her employment, citing General Municipal Law §50 and Matter of Williams v City of New York, 64 NY2d at 802.

The Appellate Division then opined  "[Employee] failed to raise a triable issue of fact" and "the Supreme Court should have granted the City's cross-motion for summary judgment dismissing so much of [Employee's] cross-claim as sought to recover attorneys' fees and costs incurred in [Employee's] defense of this action".

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

 

 

New York State Comptroller Thomas P. DiNapoli releases State Department and Agency audits

On February 12, 2024, New York State Comptroller Thomas P. DiNapoli issued the following State Department and Agency audits.

Click on the text highlighted in color to access the item posted on the Internet

Homes and Community Renewal: Housing Trust Fund Corporation – Oversight of the Rural Rental Assistance Program (2023-S-53) The Housing Trust Fund Corporation (HTFC), a component of Homes and Community Renewal, administers the Rural Rental Assistance Program in partnership with the United States Department of Agriculture (USDA). The program provides rental subsidies for low-income elderly and family tenants residing in multi-family properties in rural areas of the State. Overall, auditors determined that HTFC is making program payments to property owners for the correct number of units and that units and projects were maintained properly by project owners, but found opportunities for HTFC to better ensure it receives all the information it should from USDA that would allow HTFC officials to sufficiently monitor individual projects.

Department of Health: Medicaid Program – Impact of Rejected Encounters on the Collection of Drug Rebates (2023-S-2) The Medicaid Drug Rebate Program helps offset the costs of covered outpatient drugs dispensed to Medicaid recipients through rebates received from drug manufacturers. Managed care organizations are required to send the Department of Health (DOH) detailed information about each drug dispensed to managed care recipients on encounter claims to DOH’s encounter system. For the period from January 2018 through March 2023, auditors identified 453,706 pharmacy encounter claims totaling $59.1 million in payments that were rejected by DOH’s encounter system. As a result of these rejections, auditors estimated a total of $31.2 million in missed drug rebates. The encounter system rejected these claims because they could not be validated by system controls, and auditors found that DOH does not have a process for performing detailed reviews of rejected encounter claim data.

Department of Labor: Services to Workers Under the Worker Adjustment and Retraining Notification Act (Follow-Up) (2024-F-22) The Department of Labor (DOL) administers the State’s Worker Adjustment and Retraining Notification Act (WARN Act), which requires covered employers to give at least 90 days’ advance notice of a mass layoff, relocation, or employment loss, with some exceptions. Covered employers must also file a Notice with DOL, local workforce development boards, and certain local officials. A prior audit, issued in June 2023, found weaknesses that impede DOL’s success in meeting the needs of dislocated workers, including issues with oversight of employer compliance with the advance notice requirements, WARN Notices that were not entered into the system DOL used to record related services to employers and affected employees, and late attempts at initial outreach to employers that submitted Notices and to affected employees. DOL officials made substantial progress in addressing the issues identified in the initial audit, implementing three recommendations and partially implementing the fourth.

State University of New York – Determination of Residency for Tuition Purposes (Follow-Up) (2023-F-45) The State University of New York’s (SUNY) Residency Policy (SUNY Policy 7810) establishes proof of residency requirements for students charged the in-state tuition rate. A prior audit, issued in May 2022, found SUNY does not have adequate assurance that, at the graduate level, campuses are making accurate residency determinations and that students are being charged the appropriate tuition rate, with each of the seven SUNY campuses reviewed applying its own interpretation of the policy requirements. From reviews at seven SUNY campuses, auditors also found potential undercharges totaling $1,343,051 for students charged the in-state rate as well as potential overcharges totaling $44,171 for students charged the out-of-state rate. SUNY officials made some progress in addressing the issues identified in the initial audit, implementing one of the four recommendations, partially implementing one, and not implementing one (one recommendation was found to be not applicable).

Department of Health: Medicaid Program – Maximizing Drug Rebates Under the Federal Medicaid Drug Rebate Program (Follow-Up) (2024-F-14) The Medicaid Drug Rebate Program reduces state and federal expenditures for Medicaid prescription drugs. On a quarterly basis, states are required to send rebate invoices to each manufacturer for any rebate-eligible drugs their Medicaid programs paid for. A prior audit, issued in April 2023, identified issues including uncollected drug rebates totaling $183.7 million due to errors in the Department of Health’s (DOH) claim extraction procedures, inaccurate or incomplete claim information submitted by managed care organizations and providers, and claim processing errors made by DOH and the rebate contractor. DOH made progress in addressing the issues identified in the initial audit, with $124.2 million of the $183.7 million in missed rebates invoiced to drug manufacturers. Of the initial audit’s 12 recommendations, two were implemented, eight were partially implemented, and two were not implemented.

Office of Addiction Services and Supports – Oversight of Contract Expenditures of Palladia, Inc. (Follow-Up) (2024-F-29) In 2014, the Office of Addiction Services and Supports (OASAS) entered into a 5-year $45.6 million contract with Palladia, Inc. (Palladia), under which Palladia would provide drug and alcohol addiction treatment services. A prior audit, issued in August 2021, found that OASAS was not effectively monitoring the expenses reported by Palladia and, for the 3 fiscal years ended June 30, 2018, Palladia claimed $2,508,682 in expenses that did not comply with requirements. OASAS made limited progress in addressing the problems identified in the initial audit, partially implementing one recommendation and not implementing the two others.

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New York State Comptroller Thomas P. DiNapoli announced the following local government were issued on February 13, 2025

 Click on the text highlighted in color to access the item posted on the Internet.

Cuddebackville Fire District – Board Oversight (Orange County)

The board did not provide adequate oversight of the district’s financial operations or properly audit claims. As a result, the board hindered their ability to make informed financial decisions. Complete, accurate and reliable accounting records were not maintained. For example, the Dec. 31, 2022 ending bank statement balances differed from the ending cash balances in the accounting records by $638,485. The board also used unrealistic budgetary estimates that resulted in annual operating deficits and a declining fund balance. The board did not ensure the treasurer maintained complete and accurate accounting records, requested or received regular financial reports or ensured claims were properly audited prior to payment. Although the board paid a CPA $6,750 to conduct the 2019 and 2020 audits, the CPA did not complete the 2020 audit and has possession of the district’s financial records. The board was unaware the audit was not completed and took no action.

Town of Clifton Park – Physical Accessibility to Programs and Services (Saratoga County) Of the 562 applicable physical accessibility components reviewed, auditors identified 47(8%) where town officials could consider taking additional steps to increase physical accessibility at selected town facilities.

Town of Trenton – Physical Accessibility to Programs and Services (Oneida County) Of the 144 applicable physical accessibility components reviewed, auditors identified 14(10%) where town officials could consider taking additional steps to increase physical accessibility at the Town Municipal Center.

City of Auburn – Physical Accessibility to Programs and Services (Cayuga County) Of the 538 applicable physical accessibility components reviewed, auditors identified 70(13%) where city officials could consider taking additional steps to increase physical accessibility at selected city facilities.

Town of Woodbury – Physical Accessibility to Programs and Services (Orange County) Of the 595 applicable physical accessibility components reviewed, auditors identified 131(22%) where town officials could consider taking additional steps to increase physical accessibility at selected town facilities.

City of Norwich – Physical Accessibility to Programs and Services (Chenango County) Of the 317 applicable physical accessibility components reviewed, auditors identified 30(9%) where city officials could consider taking additional steps to increase physical accessibility at selected city facilities.

Town of Penfield – Physical Accessibility to Programs and Services (Monroe County) Of the 679 applicable physical accessibility components reviewed, auditors identified 58(9%) where town officials could consider taking additional steps to increase physical accessibility at selected town facilities.

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The New York's Supreme Courts and the New York's Court of Claims both have jurisdiction to consider claims alleging violation Civil Service Law §75-b or Labor Law §740

Following her resignation from Hutchings Psychiatric Center [HPC] Plaintiff commenced a whistleblower action in Supreme Court against the New York State Office of Mental Health and HPC [Defendants] pursuant to Civil Service Law §75-b and Labor Law §§740 and 741.

Defendants, contending that Supreme Court does not have subject matter jurisdiction over the causes of action set forth in Plaintiff's complaint on the ground that only the Court of Claims has that jurisdiction, moved to dismiss the complaint.

Supreme Court denied Defendants' motion, concluding that it did have subject matter jurisdiction over the causes of action in Plaintiff's complaint. Defendants appealed the Supreme Court's ruling.

Considering Defendants' appeal, the Appellate Division noted that in 2010, the New York State Legislature amended the Court of Claims Act to provide that the Court of Claims "shall have jurisdiction ... [t]o hear and determine a claim of any person against the state for a retaliatory personnel action by its officers or employees pursuant to [Civil Service Law §75-b] or [Labor Law §740]".*

Based on the relevant legislative history, "including the concern raised to the legislature that the proposed language would encourage forum shopping," the legislature, in providing the Court of Claims with jurisdiction, did not strip the Supreme Court of its jurisdiction to hear such cases. Thus, said the Appellate Division, Supreme Court "properly determined that it had subject matter jurisdiction over the causes of action asserted in the complaint" by Plaintiff.

Accordingly, the Appellate Division "unanimously modified" Supreme Court's ruling "on the law" by granting Defendants motion in part and dismissing the Plaintiff's claims advance pursuant to Labor Law §740 and, as modified, the order was affirmed without costs.**

* Court of Claims Act §9[13]

** Defendants alternatively contend on appeal that Plaintiff's cause of action under Labor Law §740 should be dismissed because §740 apply only to private sector employers. Plaintiff did not oppose the dismissal of her cause of action brought under color of Labor Law §740 and the Appellate Division so modified the Supreme Court's order.

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

 

Engaging in a physical altercation and disrupting the workplace

New York City Office of Administrative Trials and Hearings [OATH] Administrative Law Judge [ALJ] Tiffany Hamilton recommended a 60-day suspension for a hospital employee [Employee] found guilty of initiating a physical altercation with a coworker and disrupting the workplace.

The ALJ found Employee had struck the coworker in the face after the coworker demanded an apology from the Employee for behavior the coworker perceived to be disrespectful. Judge Hamilton also found that the witness reports and testimony established that Employee had caused a workplace disruption by yelling, fighting, and knocking over a water dispenser.

The Appointing Authority had sought termination of Employee for the proved charges, but Judge Hamilton found imposing the penalty of dismissal to be excessive. The ALJ noted that while Employee's misconduct was troubling, the principles of progressive discipline and mitigating circumstances, such as Employee’s commendable work history of almost 20 years, his initial attempts to avoid the altercation, and coworker testimony regarding his professionalism, supported a finding that a lesser penalty should be imposed and so recommended the Employee suspended without pay for sixty days and be retained in his position.

Click HERE to access Judge Hamilton's findings and recommendation posted on the Internet.

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A Reasonable Disciplinary Penalty Under the Circumstances - The text of this ebook focuses on determining an appropriate disciplinary penalty to be imposed on an employee in the public service in instances where the employee has been found guilty of misconduct or incompetence. For more information click HERE.

A bill amending the New York Civil Service Law addressing "Teleworking" has been introduced in the New York State Assembly

The proposed legislation, The New  York State Teleworking Expansion Act [Assembly 4850], would amend the New York State Civil Service Law to provide that "each state agency [as defined in §13.2 of the bill] shall establish a policy and program to allow employees to perform all or a portion of their duties through teleworking to the maximum extent possible without diminished employee performance" except that with respect to employees in a collective bargaining unit such policy and, or, program shall be subject to collective bargaining as otherwise provided by Article 14 of the Civil Service Law. 

The bill has been referred to the Committee on Governmental Employees.

The text of Assembly 4850 is set out below:

                STATE OF NEW YORK

        ________________________________________________________________________

                                          4850

                                2025-2026 Regular Sessions

                    IN ASSEMBLY

                                     February 6, 2025

                                       ___________

        Introduced  by  M.  of  A.  ROZIC,  COLTON,  SIMON,  ROSENTHAL, LUPARDO,

          FORREST, BRONSON, SANTABARBARA, MAMDANI, BORES, FALL, KELLES,  SIMONE,

          SEAWRIGHT,  ALVAREZ  --  read  once  and  referred to the Committee on

          Governmental Employees

        AN ACT to amend the civil service law, in relation to enacting the  "New

          York state teleworking expansion act"

          The  People of the State of New York, represented in Senate and Assem-

        bly, do enact as follows:

     1    Section 1. Short title. This act shall be known and may  be  cited  as

     2  the "New York state teleworking expansion act".

     3    §  2.  The  civil service law is amended by adding a new section 13 to

     4  read as follows:

     5    § 13. Teleworking programs.  1. Each state agency  shall  establish  a

     6  policy  and  program  to  allow employees to perform all or a portion of

     7  their duties  through teleworking to the maximum extent possible without

     8  diminished  employee performance. Each state agency  shall  designate  a

     9  "telework  coordinator" to be responsible for overseeing the implementa-

    10  tion of teleworking programs.

    11    2. For the purposes of this section, the term:

    12    (a) "telework" shall mean to perform normal and regular work functions

    13  on  a  workday that ordinarily would be performed at the state  agency's

    14  principal location at  a  different  location,  thereby  eliminating  or

    15  substantially reducing the physical commute to and from such state agen-

    16  cy's principal location; and

    17    (b)  "state  agency"  shall  mean any state department, board, bureau,

    18  division, commission, committee, public authority, public benefit corpo-

    19  ration, council, office,  or  other  governmental  entity  performing  a

    20  governmental or proprietary function for the state.

    21    3. No agency shall establish a policy pursuant to this section for any

    22  employee  that  is  subject  to a collective bargaining agreement unless

    23  such policy has been mutually agreed  to  between  the  agency  and  the

2

     1  employee  organization that is certified or recognized to represent such

     2  employees, within the meaning  of  article  fourteen  of  this  chapter,

     3  pursuant to a collective bargaining agreement.

     4    §  3.  This  act shall take effect on the ninetieth day after it shall

     5  have become a law.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets

                              [ ] is old law to be omitted.

An audit of New York State's Medicaid System by New York State Comptroller Thomas P. DiNapoli finds improperly paid claims

New York State Department of Health’s eMedNY computer system improperly paid $16.2 million in Medicaid claims during a six-month period that started in October 2023, according to an audit released by State Comptroller Thomas P. DiNapoli. 

“My office pays close attention to Medicaid because it’s critical for so many New Yorkers and a big driver of state spending," DiNapoli said. “Errors can be costly. My office's latest audit found areas where the Department of Health can do better and avoid improper and wasteful spending of taxpayer dollars. By acting swiftly on the audit's recommendations DOH has already recovered millions of dollars.” 

Overall, the audit found 370 million claims were processed between October 2023 through March 2024, totaling nearly $49.6 billion. 

The bulk of the improper payments, $11.8 million, went to pay 27,480 Medicaid managed care premiums for recipients who were ineligible for managed care coverage because they had comprehensive third-party insurance and should’ve been enrolled in Medicaid fee-for-service instead. As a result of the audit, more than $2.8 million in improper payments have already been recovered. 

Some of the other key findings in the audit include: 

            $2 million was paid for fee-for-service inpatient claims that should have been paid by managed care.

            $1.3 million was paid for newborn birth and maternity claims that contained inaccurate information, such as low newborn birth weights that increased reimbursements.

            $964,333 was paid for inpatient, pharmacy, referred ambulatory, and clinic claims that did not comply with Medicaid policies.

            $126,786 was paid for claims where Medicaid was incorrectly designated as the primary payer instead of another insurer.

            $35,441 was paid for managed care premiums on behalf of incarcerated recipients whose managed care coverage should have been suspended.

The audit also identified 10 Medicaid providers who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs. In response to the findings, DOH removed nine of the providers from the Medicaid program and had not yet resolved the program status of the remaining provider.

The audit made 10 recommendations, including informing hospitals to accurately report to and bill Medicaid, along with identifying where financial recoveries should be made.

The Department of Health’s response included highlighting its actions regarding the audit’s findings as well as noting the Office of the Medicaid Inspector General’s investigative and audit process to ensure Medicaid providers and recipients are complying with the laws and regulations.

Click Medicaid Program: Claims Processing Activity October 1, 2023 Through March 31, 2024 to access the Comptroller's audit posted on the Internet.