Second Circuit rules failure to investigate discrimination complaint not adverse employment action

Second Circuit rules failure to investigate discrimination complaint not adverse employment action
Source: Jackson Lewis LLP. Reproduced with permission. Copyright © 2010, Jackson Lewis. Originally published by Jackson Lewis, LLP, at www.jacksonlewis.com. All rights reserved.

Affirming summary judgment for the employer in a race discrimination and retaliation action, the federal appeals court in New York has held that the employer’s failure to investigate a complaint of alleged employment discrimination is not an adverse employment action taken in retaliation for the filing of the same discrimination complaint. Fincher v. Depository Trust & Clearing Corp., No. 08-5013-cv (2d Cir. May 14, 2010). The Second Circuit has jurisdiction over Connecticut, New York, and Vermont.

The Facts

Cynthia Fincher worked for Depository Trust and Clearing Corporation (“DTCC”) as a Senior Auditor from 2004 until she resigned her employment on June 5, 2006. During that time, Fincher received several critical performance appraisals. In late March 2006, Fincher complained to Charles Smith, the Senior Director of Employee Relations at DTCC, that “black people were set up to fail at [the Auditing] department because they were not provided and given the same training opportunities as the white employees.” Fincher maintained that she asked Smith whether he planned to respond to her complaint, and Smith told her that he would not. In May 2006, Fincher claimed that her manager, Mark Hudson (“Hudson”), admitted to her that she did not receive proper training and that she was “discriminated against.” Fincher subsequently resigned, saying her resignation was due to racial discrimination, including inadequate training.

The Lawsuit

Fincher sued DTCC for, among other things, race discrimination, retaliation, harassment, and constructive discharge under the federal equal rights law (42 U.S.C. § 1981). DTCC moved for and the district court granted summary judgment on all claims. Fincher appealed and argued that: (1) DTCC’s failure to investigate her discrimination complaint constituted retaliation; (2) the failure to investigate her complaint created a hostile work environment; (3) she was constructively discharged based on the alleged hostile environment; and (4) the district court erred in failing to consider her testimony about Hudson’s alleged comment.

Appeals Court Decision

Addressing the retaliation claim, the Court noted that to establish a prima facie case of retaliation under Section 1981, a plaintiff must show that: she engaged in protected activity; the employer was aware of this activity; the employer took adverse action against the plaintiff; and a retaliatory motive played a part in the adverse employment action.

An adverse action is one that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

The Court found that Fincher failed to establish a prima facie case of retaliation because the failure to investigate her alleged complaint was not an adverse action. It noted that “[a]n employee whose complaint is not investigated cannot be said to have thereby suffered a punishment for bringing that same complaint” because the employee is no worse off than she would have been had she not complained or if the employer investigated the complaint and denied it. Accordingly, the Court affirmed summary judgment on Fincher’s retaliation claim.

Turning to the hostile work environment and constructive discharge claims, the Court stated that, to establish a hostile work environment, Fincher “must show that the workplace was so severely permeated with discriminatory intimidation, ridicule, and insult that the terms and conditions of her employment were thereby altered.” Rejecting Fincher’s argument that DTCC’s failure to investigate her alleged complaint created a hostile environment, the Court observed that “the failure to investigate did not by itself alter the terms and conditions of Fincher’s employment; rather, it preserved the very circumstances that were the subject of the complaint” and therefore could not have contributed to a hostile environment. Where “an alleged constructive discharge stems from an alleged hostile work environment,” the Court explained, “a plaintiff must show working conditions so intolerable that a reasonable person would have felt compelled to resign.” Because Fincher failed to establish a hostile work environment, her constructive discharge claim also failed.

Finally, Fincher argued that the district court did not give sufficient consideration to her testimony about Hudson’s alleged admission to her that she was the victim of racial discrimination. The Court noted that district court appeared to discredit her testimony regarding Hudson’s alleged statement even though district courts may not discredit a witness’s testimony on a motion for summary judgment because juries make credibility assessments. Nevertheless, the Court affirmed summary judgment on Fincher’s discrimination claim because the comment, even if true, did not provide an adequate basis to deny summary judgment. Rather, the alleged remarks were a mere “scintilla” of evidence in light of their “offhand, conclusory nature.” It further noted that the alleged remarks were a “purported concession that Fincher was discriminated against; they were not themselves discriminatory.” Accordingly, the Court affirmed summary judgment on this claim, as well.

* *

Jackson Lewis, LLP, comments: This case is a significant win for employers by confirming the failure to investigate an alleged complaint of discrimination is not, in itself, an adverse employment action and cannot serve as the basis for a retaliation claim. Further, the failure to investigate alone is insufficient to create a hostile work environment. The case also highlights a party’s evidentiary burden when attempting to defeat summary judgment, i.e., a “scintilla” of evidence is insufficient. This is highly fact-specific inquiry, however.

The decision is posted on the Internet at:
http://www.ca2.uscourts.gov/decisions/isysquery/f4c71679-3bf6-43bd-9fcb-b89b9e59afc9/1/doc/08-5013-cv_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/f4c71679-3bf6-43bd-9fcb-b89b9e59afc9/1/hilite/

Withholding payment for accrued leave credits upon separation ruled permitted under the faithless servant doctrine

Withholding payment for accrued leave credits upon separation ruled permitted under the faithless servant doctrine
Bolin v Nassau County Bd. of Coop. Educ. Servs., 2010 NY Slip Op 31420(U), May 27, 2010, Supreme Court, Nassau County, Judge: Michele M. Woodard [Not selected for publication in the Official Reports]

Is an employee entitled to payment of his or her accrued, but unused, vacation credit upon his or her resignation? Typically the answer is yes.*

This was one of the issued presented by Mary Jane Bolin in her Article 78 petition seeking, among other things, a court order directing Nassau County Board of Cooperative Education Services to pay her for certain accrued leave credits.

Bolin had earlier resigned after she entered a plea of guilty to the crime of attempted grand larceny in the second degree** When Bolin asked BOCES to pay her $14,252.80 for her “banked vacation credit,”*** BOCES, in effect, deemed her resignation the equivalent of “termination for cause” and refused to pay her the cash value of such credit.

Judge Woodward, referring to the Appellate Division’s decision in Bolin v Nassau County Board of Cooperative Education Services 52 AD3d 704, said that in that case the Appellate Division distinguished between unused vacation leave and “vested banked vacation leave,” and found that Bolin failed to state a claim that BOCES was required to pay her the cash value of her 34-day vested banked vacation balance.

The court said that under the relevant collective bargaining agreement, BOCES had the discretion to deny such payment where an employee is separated is for cause. Citing Matter of William Floyd UFSD, 61 AD3 856, Judge Woodward commented that “In such instances the courts have found forfeiture of compensation, deferred or otherwise, warranted under the faithless servant doctrine.”

Authority to refuse to pay an individual for their accrued leave credits under similar circumstances is found in the Rules of the New York State Civil Service Commission, which Rules apply to employees of the State as an employer. 4 NYCRR 23.1, “Payment for accruals upon separation,” provides, in pertinent part, that “No employee who is removed from State service as a result of disciplinary action or who resigns after charges of incompetency or misconduct have been served upon him shall be entitled to compensation for vacation credits under the provisions of this Part.”


* Among exceptions to the general rule: 4 NYCRR 23.1 of Rules of the New York State Civil Service Commission, which apply to employees of the State as an employer, provides, in pertinent part, that the appointing authority may require, as a condition for such payment, that written notice of such resignation be given to the appointing authority at least two weeks prior to the last day of work.

** Bolin was sentenced to five years' probation and required to make restitution in the amount of $62,674.

*** Under the collective bargaining agreement, "Unit members who maintain a vacation day account consisting of more than forty (40) days (regular vacation leave days) will be granted a 'vested bank' of vacation days pursuant to the formula hereinafter set forth. . . Such members will be credited with two (2) days of “vested' vacation leave for every full year of Nassau BOCES service …. Upon resignation for purposes of retirement or resignation for purposes of separation other than a separation for cause, the unit member will be paid a cash sum equal to the number of days remaining in the unit member’s vested bank of vacation leave days.”

Judge Woodard’s decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/pdfs/2010/2010_31420.pdf

The decision is Bolin v Nassau County Board of Cooperative Education Services 52 AD3d 704 is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2008/2008_05692.htm

The State's Pension Fund will not be raided to balance State's budget

The State's Pension Fund will not be raided to balance State's budget
Statement by New York State Comptroller Thomas P. DiNapoli

“There have been a number of outrageous and unfounded rumors and erroneous press reports that I will allow a raid of the pension fund to balance the state budget. “Let me be very clear: The pension fund will not be used to balance the budget.

“The Pew Center recognized New York as one of only four fully-funded state pension systems. New York’s strong position has been achieved through long-term, fiscally responsible practices.

"My first job as state comptroller is to protect the one million members, and the rest of New York State taxpayers, from the irresponsibility that has left New Jersey, Illinois, California and dozens of other public pension funds across the nation dangerously under-funded. I will fight any raids on the New York State Common Retirement Fund.

“Shame on those individuals who are playing politics, trying to mislead taxpayers and scare members and retirees who rely on the fund for their financial security. The fund is not a political football.

“The fund is strong. I recently reported that SFY 2009-10 was the third best investment year in the past 20 years. The Pew Report found that our fund is one of the best managed funds in the nation. I will not sacrifice that strength to a dysfunctional budget process.

“The State Comptroller’s office has a long history of protecting the fund from raids. I will protect the fund from any raids under any circumstances.”

Facts about the Fund:

1. Third Highest Return in Last 20 Years: The pension fund posted a 25.9 percent rate of return for the fiscal year ended March 31, 2010, driving the value of fund assets to approximately $132.6 billion.

2. Nationally Recognized for Excellence by Pew Center: In February, the Pew Center on the States issued a report calling New York one of the best managed pension funds in the country. Only four states in the country are fully-funded: New York, Florida, Washington and Wisconsin.

3. Safe, Strong and Secure: The pension fund is one of the best funded public pension funds in the nation and can cover its current and future obligations.

Whistleblower must blow the whistle to claim the whistleblower protection provided by the Whistleblower Statute, Civil Service Law §75-b

Whistleblower must blow the whistle to claim the whistleblower protection provided by the Whistleblower Statute, Civil Service Law §75-b
Hastie v State Univ. of N.Y. Coll. of Agric. & Tech. At Morrisville, 2010 NY Slip Op 04911, Decided on June 10, 2010, Appellate Division, Third Department

Civil Service Law §75-b protects an officer or employee in the event he or she reports what he or she in good faith believes is an improper governmental action to a governmental body.*

James Hastie was employed by SUNY Morrisville. Among his job duties was overseeing SUNY Morrisville’s development program and fundraising efforts. In the course of reviewing an Internal Revenue Service tax form (IRS form 8283) prepared by a third party involving property donated to Morrisville, Hastie became concerned about the truthfulness of statements regarding the property's appraised value.**

Sharing his concerns with Morrisville's president and its vice-president for administrative services, they directed him to sign the form. Hastie refused and his employment was terminated shortly thereafter.

Hastie then sued Morrisville, claiming he had been subjected to “a retaliatory discharge” within the meaning of Civil Service Law §75-b, the so-called the whistleblower statute. Supreme Court, however, granted Morrisville’s motion to dismiss his petition.

The Appellate Division, in reviewing Hastie’s appeal from the Supreme Court’s ruling, said that notwithstanding its accepting Hastie’s allegations in his complaint as true, it must, nevertheless, affirm the Supreme Court’s ruling.

Explaining that although an adverse employment action may not be taken against a public employee based upon his or her disclosure of information "which the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action" to a governmental body, in this instance the alleged wrongdoing consisted of Morrisville’s president and vice-president directing Hastie to sign the receipt section of the IRS form 8283.

Hastie, however, had not reported the alleged improper directive to any governmental body other than the alleged wrongdoers themselves. As §75-b requires that the employee to advise the appointing authority prior to his or her reporting the information to a “governmental body,” the court apparently concluded that neither Morrisville’s president or vice-president qualified as a “governmental body” for the purposes of §75-b in this instance.

Accordingly, the Appellate Division ruled that Hastie had not undertaken “the notification efforts which are a procedural prerequisite to invoke the protections of the statute.”***

In Hastie’s case, the single possible improper governmental action was not the submission of the allegedly flawed tax form by a third party but, rather, “the directives from the alleged wrongdoers, [Morrisville’s] president and vice-president, that [Hastie] sign the receipt section of the form.”

As Hastie had not reported this “directive” to any “governmental body,” he failed to undertake the notification effort that constitutes the procedural prerequisite to his invoking the protections of the statute.

* See, also, Labor Law §740, which essentially applies to employers in the private sector.

** IRS form 8283 required an acknowledgment from Morrisville that it had received the property.

*** Civil Service Law §75-b 2, in pertinent part, provides: “(a) 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.” Further, sub-paragraph (b), in pertinent part, requires that the individual “Prior to disclosing information pursuant to paragraph (a) … shall have made a good faith effort to provide the appointing authority or his or her designee the information to be disclosed and shall provide the appointing authority or designee a reasonable time to take appropriate action….”

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2010/2010_04911.htm

Employee disciplined for failing to wear a vehicle seat belt properly

Employee disciplined for failing to wear a vehicle seat belt properly
Department of Sanitation v Parker, OATH Index #1923/10

The New York City Department of Sanitation sought discipline against Michael Parker, a sanitation worker, for improperly wearing his seatbelt while operating a Department vehicle.

A Sanitation Department safety inspector observed Parker driving with his shoulder belt tucked behind his left arm, and issued a ticket when, the inspector alleged Parker became belligerent after receiving a warning.

ALJ Ingrid Addison found Parker guilty of improperly wearing his seat belt while on duty and recommended that Parker be fined two days' pay.

The decision is posted on the Internet at:http://archive.citylaw.org/oath/10_Cases/10-1923.pdf

Preferred list rights following layoff

Preferred list rights following layoff
Bojarczuk v Mills, 98 NY2d 663

Joseph T. Bojarczuk was excessed when the Utica City School District abolished his position when the Oneida-Herkimer-Madison Board of Cooperative Educational Services (BOCES) took over its Alternative Educational Program. As Bojarczuk was “transferred to BOCES” with his position, Utica did not include him on its “preferred list” for reemployment with the District should a suitable vacancy occur while his name was on the list.

According to Utica, Bojarczuk "was afforded seniority rights under section 3014-a," and he had received all the rights to which he was entitled in connection with the layoff. The Commissioner of Education sustained Utica’s actions.

The Court of Appeals, however, disagreed, noting that Education Law Section 3014-a(4) provides that “[t]his section shall in no way be construed to limit the rights of any of such employees set forth in this section granted by any other provision of law.” Accordingly, ruled the court, the fact that Bojarczuk had been provided with Section 3014-a seniority rights did not preclude his having “additional recall rights” in the District under Sections 2510(3) and 3013(3) of the Education Law.

The decision states that a teacher whose position has been abolished during a BOCES takeover of a school district program has the right to be placed on the school district's preferred eligibility list for employment for seven years in accordance with sections 2510(3) and 3013(3), provided the teacher otherwise qualifies for the statutes’ benefits.

As the lower courts had not determined whether or not Bojarczuk qualified for placement on the Utica School District preferred list, the case was remanded back to Supreme Court for such a determination.

The basic principle expressed by this decision:

If a teacher is excessed and his or her name is placed on a preferred list upon the abolishment of his or her teaching position, he or she is entitled, subject to seniority considerations, to be appointed to the next available vacancy in the school district in the tenure area in which he or she is certified the district decides to fill, unless he or she is found unqualified for that position by the District.

The fact that the teacher may obtain employment in another jurisdiction does not truncate his or her rights to reinstatement from the preferred list by the school district.

Some key considerations concerning preferred lists:

1. A preferred list comes into being when an individual having tenure or permanent status in the title is excessed as the result of the abolishment of a position.

2. Unless otherwise disqualified, an individual's name is continued on the preferred list until (a) he or she is reinstated from the list to the same or a similar position or (b) his or her eligibility for reinstatement from the list expires. Depending of the controlling statute providing for the establishment of the preferred list, an individual’s name may on a preferred list from two years, i.e., a “special military list” [Military Law Section 243.7] to seven years under the Education Law.

3. If additional positions are abolished on a later date, the names of the more recently excessed individuals would be placed on the same preferred list on the basis of seniority as among themselves. In other words, an individual who is first on an existing preferred list would be displaced to a lower rank on the list if the names of an individual having greater employment seniority are placed on the same preferred list at a later date.

4. Preferred lists do not "expire" but continue in existence as long as there is at least one eligible individual qualified for appointment from the list.

To illustrate this last point, assume that Bojarczuk is never reinstated from the preferred list. On the day before the last day of the seventh year from date when Bojarczuk's name was placed on the preferred list another layoff takes place and the name of the individual excessed is placed on the preferred list.

For one day both Bojarczuk name and this second individual's name are on the preferred list, in order of relative seniority as among themselves. If neither is reinstated from the preferred list on the following day, the preferred list continues in existence but thereafter would include only the name of the second individual. The preferred list then continues in existence as long as the second individual continues to be eligible for reinstatement from the preferred list.

Reinstatement from a preferred list, however, may raise other concerns. For example, nepotism. Section 3016 of the Education Law deals with the issue of the employment of a relative by blood or marriage of a member of its school board as a teacher by the district. In essence, it requires that any such appointment must be approved by a two-thirds vote of the board.

Does Section 3016 apply in situations involving the reinstatement of a relative of a school board member as teacher from a preferred list?

Barbara Gmelch thought it did and asked the Commissioner of Education to remove a school board member from his position because the board member did not advise the board that his daughter was among a number of teachers to be reinstated from a preferred list that resulted from the lay off of a number of teachers and that a two-thirds vote would be required with respect to her employment.*

The Commissioner dismissed Gmelch's appeal, agreeing with the school board Section 2510 mandates the reinstatement of a teacher from a preferred and thus it was required to reinstate the relative of a board member regardless of his or her relationship to the member.

In this instance the Commissioner ruled that reinstating the board member's daughter "was required by law and not within its discretion to decline" [Commissioner of Education Decision #12794].

* The record indicates that the teacher was employed by the district prior to the election of her father to the board.