Summaries of, and commentaries on, selected court and administrative decisions and related matters affecting public employers and employees in New York State in particular and in other jurisdictions in general.
June 16, 2010
Tenure by estoppel
Wamsley v East Ramapo Central School District, 281 A.D.2d 633
If a school board neglects to take timely action to discontinue the services of a probationary teacher or administrator, the individual will attain what is termed "tenure by estoppel." The Court of Appeals addressed the issue of an individual obtaining "tenure by estoppel" in the Sewanhaka case [Gould v Sewanhaka Central High School District, 81 NY2d 446].
However, "tenure by estoppel" is not limited to individuals in the unclassified service such as teachers and school administrators -- employees in the classified service also may attain tenure by estoppel as the Wamsley decision demonstrates.
On October 5, 1998, East Ramapo appointed George Wamsley to the position of school bus driver, a classified service position in the noncompetitive class. Wamsley's appointment was subject to his satisfactorily completing a 26-week probationary period.*
On August 18, 1999 the school district's personnel officer wrote to Wamsley advising him that he was to be dismissed because his service during his probationary period had been deemed unsatisfactory by his supervisors. Wamsley was terminated from his position effective August 25, 1999.
Wamsley sued, contending that his probationary term had expired before he was discharged and thus he held a tenured appointment. He also claimed that he was entitled to a "pretermination hearing" because he was an "exempt volunteer firefighter."
The Appellate Division agreed with Wamsley's argument that he was no longer a probationary employee at the time he was discharged.
In the words of the court, Wamsley's "probationary term began on October 5, 1998, and ended 26 weeks later ... as permissibly extended by his days of absence."**
Accordingly, Wamsley's 26-week period, not having otherwise been extended as permitted by the rules of the Rockland Civil Service Commission, "expired long before his employment was terminated."
However, there were other elements to consider concerning Wamsley's claim of a right to a pretermination hearing.
The due process procedures set out in Section 75 of the Civil Service Law are not available to a noncompetitive class employee who has less than five years of continuous service*** unless the individual is a veteran who served in time of war or is an "exempt volunteer firefighter."
According to the Appellate Division, Wamsley claimed, but never established, that he was entitled to the protections of Section 75**** because he was an exempt volunteer firefighter.
The Appellate Division concluded that although clearly Wamsley was not a probationer at the time of is dismissal, he raised a triable issue of fact with respect to his claim of Section 75 rights based on his status as an exempt volunteer firefighter.
According, a hearing on this aspect of this complaint was required and the matter was returned to State Supreme Court "for resolution of that factual issue."
Two technical elements concerning exempt volunteer firefighter status should be noted:
1. The individual claiming exempt volunteer firefighter status has the burden of demonstrating that he or she enjoys such status [People v Hayes, 135 AD 19]; and
2. Notice of the fact that the individual is an exempt volunteer firefighter must be given to the employer prior to the individual's effective date of termination [Badman v Falk, 4 AD2d 149].
* Although decision states that Wamsley "became permanent" after the expiration of his 26-week probationary term, "probationary employees" in fact hold permanent appointments and may enjoy limited tenure rights. For example, courts have ruled that probationers are entitled to notice and hearing if the appointing authority decides to dismiss the individual during his or her minimum period of probation. In contrast, a probationer may be dismissed without notice and hearing after completing his or her minimum period of probation and prior to the expiration of his or her maximum period of probation.
** The Appellate Division said that as Wamsley "was absent, at most, 5 1/2 days during the 26-week period," his maximum period of probationary had ended expired long before his employment was terminated.
*** Section 75(c), in pertinent part, provides that an employee holding a position in the non-competitive class ... who since his last entry into service has completed at least five years of continuous service in the non-competitive class ....
**** Section 75(b), in pertinent part, extends the Section 75 rights available to tenured employees in the competitive class to a permanent employee in the classified service who is an exempt volunteer firefighter as defined in the general municipal law, except when a person described in this paragraph holds the position of private secretary, cashier or deputy of any official or department.
Termination of a probationer
Johnson v City of New York, 281 A.D.2d 322
Elaine Johnson, a probationary employee, challenged her termination from her position as a Caseworker with the New York City Administration for Children's Services [ACS].
According to the decision, Johnson suffered a job-related injury while she was serving as a provisional Caseworker.
ACS permanently appointed Johnson to the position of Caseworker while she was on leave. Her permanent appointment was subject to her satisfactory completion of a one-year probationary period. Still on leave, Johnson was terminated from her position before completing her probationary period.
The Appellate Division upheld Johnson's termination, rejecting her allegation that she was terminated in retaliation for a complaint she had made while a provisional employee concerning her supervisors' communication skills.
The court said that there was "ample evidence of [Johnson's] unacceptable work performance as a provisional that her supervisors began to document before she made her complaint about them."
However, there are some troublesome aspects to this case.
According to the ruling, Johnson never actually performed any services as a Caseworker while a probationer -- she was absent on an authorized leave prior to and following her permanent appointment. ACS, said the court, relied on her "performance as a provisional in making its decision to terminate her permanent appointment.
Typically, a probationary period is extended if the individual is absent during his or her probationary period.
As to actually being evaluated on his or her performance while a probationer in contrast to his or her performance while serving in some other capacity -- i.e., as a temporary or provisional employee -- in Matter of DeCecca, 25 Misc2d 425, the court ruled that a probationary employee may not be dismissed until he or she has been given an opportunity to demonstrate his or her capacity to satisfactorily perform the duties of the position.
Finally, in York v McGuire, 63 NY2d 760, the Court of Appeals set out the basic rule concerning the dismissal of probationary employees as follows:
After completing his or her minimum period of probation and prior to completing his or her maximum period of probation, a probationary employee can be dismissed without a hearing and without a statement of reasons, as long as there is no proof that the dismissal was done for a constitutionally impermissible purpose, or in violation of statutory or decisional law, or made in bad faith.
The York decision is viewed as authority for requiring that a probationary employee be given administrative due process in the form of providing the employee with "notice and hearing" if the appointing authority decides to terminate the individual during his or her minimum period of probation.
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/
June 15, 2010
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
June 14, 2010
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
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
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
December 21, 2009
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.
December 01, 2009
Recognizing out-of-state same-sex marriages for purposes of public employee health insurance coverage and other benefits ruled lawful
Recognizing out-of-state same-sex marriages for
purposes of public employee health insurance coverage and other benefits ruled
lawful
Godfrey v Spano, 2009 NY Slip Op 08474, Decided on November 19, 2009, Court of
Appeals [Decided with Lewis v New York State Department of Civil Service]
Plaintiffs in this action are taxpayers challenging directives recognizing
out-of-state same-sex marriages for purposes of public employee health
insurance coverage and other benefits.* The Court of Appeals held that that
plaintiffs' actions were properly dismissed by the courts below.
Many residents of New York State in a same-gender relationship have traveled to Massachusetts, Connecticut, Iowa and Vermont, jurisdictions permitting same-gender marriage,
for the purpose of marrying.
In response to this development, several state and county officials issued
general directives relating to the recognition of those out-of-state same-sex
marriages.
This appeal involved challenges to the lawfulness of two such directives: a
Policy Memorandum, Employee Benefits Division Policy Memorandum issued by the
Commissioner of the New York State Department of Civil Service, which became
effective May 1, 2007* and an Executive Order issued by the County Executive of
the County of Westchester, Westchester County Executive Order No. 3 of 2006.**
However, the Court of Appeals commented with respect to the action brought by
Godfrey that it did adopt the Second Department's rationale for affirmance of
the Supreme Court’s ruling, i.e., the Executive Order did not purport to change
the law, because it included language directing recognition of same-sex couples
"to the maximum extent allowed by law."
The high court said that it found such language ambiguous, and it said it
“would not encourage executive officials to try to insulate their orders from
judicial review by this means.” Instead the Court of Appeals sustained the
result “because the Godfrey plaintiffs have failed to allege an unlawful
expenditure of taxpayer funds, they have not stated a cognizable claim under
General Municipal Law §51.”
As to the Lewis plaintiffs, the Court of Appeals noted that the only surviving
causes of action were based on State Finance Law §123-b and the separation of
powers doctrine.
As to Finance Law § 123-b, the court said although a taxpayer may bring suit
under this statute to prevent the unlawful expenditure of state funds
"whether or not such person is or may be affected or specially
aggrieved" (State Finance Law §123-b [1]), there must be some specific
threat of an imminent expenditure. In this instance the Court of Appeals ruled
that “The State Finance Law claim of the Lewis plaintiffs fails to state a
cause of action for the same reason that the General Municipal Law § 51 claim
of the Godfrey plaintiffs fails.
Addressing the Lewis plaintiffs' action based on the separation of powers
doctrine, essentially the complaint alleges that the Department of Civil
Service acted "inconsistently with the Legislature's pronouncements on
spousal benefits" and was thus in violation of Civil Service Law §164. In
the words of the Court of Appeals: “The statute itself refutes plaintiffs'
claim.”
Civil Service Law §161(1) provides that the President of the Civil Service
Commission is "authorized and directed to establish a health insurance
plan for state officers and employees and their dependents and officers"
and provides that every state employee "shall be entitled to have his spouse
and dependent children, as defined by
the regulations of the president, included in the coverage upon
agreeing to pay his contribution, if any, to the cost of such coverage for such
dependents" (emphasis in the original).
Accordingly, said the court, the statute thus expressly gives the President of
the Civil Service Commission the authority to define "spouse."
Moreover, said the court, the statute does not restrict the President's
provision of health insurance to spouses and dependent children. The language
is of entitlement, not restriction.
The Court of Appeals concluded by stating that "in each case the order of
the Appellate Division should be affirmed with costs."
* The
decision notes that “The Memorandum explained that the State had provided
eligibility for employee benefits, including New York State Health Insurance
Program benefits, to the domestic partners of State employees, including
same-sex partners, since the mid-1990s. The coverage, while mandatory for the
State, as an employer, itself, providing such coverage was discretionary for
Participating Agencies (PAs) and Participating Employers (PEs).”
** The New York State Employees’ Retirement
System recognized “same-sex marriages” for retirement benefit purposes if the
union was performed in a jurisdiction where performing a same-sex marriage was
lawful. It successfully defended a lawsuit challenging that policy [Godfrey v
DiNapoli, 22 Misc.3d 249]. In the Godfrey case the jurisdiction was Canada.
The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08474.htm
City to pay 100% of the cost of health insurance for retired firefighters
City to pay 100% of the cost of health insurance
for retired firefighters
Matter of Gooshaw v City of Ogdensburg, 2009 NY Slip Op 08738, decided on
November 25, 2009, Appellate Division, Third Department
Thomas W. Gooshaw, a retired City of Ogdensburg firefighter, was the lead plaintiff
in an action that alleged that the City had violated the terms of the
collective bargaining agreement [CAB] in place at the time they retired. That
agreement provided that the City would pay "100 percent of the cost"
of their health insurance plus the employee contribution for health insurance
for their dependents.
The City had been paying these premiums for health insurance for all retired
firefighters and, in addition, had reimbursed them for any cost incurred in
obtaining health coverage under Medicare Part B.
In 2005, petitioners filed a complaint claiming that the City had breached the CBA by refusing to cover the cost of these
Medicare Part B premiums and sought a declaratory judgment to the effect that
the City, under the CBA, was required to
reimburse them for these payments.
Supreme Court, converted the action into a CPLR
article 78 proceeding, applied a four-month statute of limitations and
dismissed the petition as untimely. Gooshaw
appealed.
The Appellate Division said that the principal claim made by Gooshaw was that the City breached the CBA by failing to honor their contractual
obligation "to pay for one hundred percent (100%) of the cost of retirees'
health insurance, including Medicare Part B premiums."
"[W]here the focus of the controversy is on an agency's breach of an
express contractual right,” said the court, a contract action is the
recommended remedy. Accordingly, said the court, "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,"
citing Kerlikowske v City of Buffalo,
305 AD2d 997. Thus the six-year statute of limitations applies here (see CPLR 213). Therefore, the court erred in
granting Ogdensburg’s motion for summary
judgment and dismissing the petition as untimely.
In support of their motion, Gooshaw
claims that because an arbitrator in an earlier similar grievance found that
the CBA required the City to make these
payments. In view this earlier determination, Gooshaw
contended that the City should be estopped
here from denying the existence of this contractual obligation.
The City, on the other hand, argued that “the doctrine of collateral estoppel” did not apply in this instance
because the CBA has undergone extensive
revisions as a result of ongoing negotiations between the City and the
firefighters' union and that the contract that was before the arbitrator was
not identical to the CBAs that were in
effect when all of the Gooshaw
petitioners retired.
The Appellate Division noted that the City was correct: the firefighters had
not all retired at the same time and that the provisions of the CBAs in place on the date of their respective
retirements were not, in each instance, entirely the same.
However, said the court, while the CBA
as renegotiated limited the choice that retired firefighters had regarding
their health plan, it did not alter or modify the City's obligation to provide
them with a fully funded health insurance program. Further, the arbitrator
concluded that the "City payment of Medicare reimbursement did not change
with the changed language and for many years, through several contracts, so
that the meaning of the contract remained the same after the language
change."
Lastly, the arbitrator took specific note of the fact that while these CBAs had been the subject of extensive
renegotiation during the 15-year period immediately preceding the arbitration,
the City continued its practice of reimbursing retired firefighters for the
payment of these premiums, and at no time was a provision included in the CBA to the effect that the City was not
obligated to make these payments.
Accordingly, the Appellate Division ruled that the arbitrator's decision and
her finding that the City is obligated to reimburse retired firefighters for
these payments under the CBA “is dispositive of the claims raised here and the
City is estopped from claiming otherwise
in this litigation.” The court that Ogdensburg
was required to reimburse retired firefighters for Medicare Part B premiums.
NYPPL
Comments: A similar issue was
considered by the Appellate Division in Myers v. City of Schenectady, 244
A.D.2d 845.
Decided over a decade ago, the decision explains the rational underlying Civil
Service Law Section 167-a which provides, in pertinent part for the
reimbursement for Medicare premium charges, as follows:
“Upon exclusion from the coverage of the health insurance plan of supplementary
medical insurance benefits for which an active or retired employee or a
dependent covered by the health insurance plan is or would be eligible under
the federal old-age, survivors and disability insurance program, an amount
equal to the premium charge for such supplementary medical insurance benefits
for such active or retired employee and his dependents, if any, shall be paid
monthly or at other intervals to such active or retired employee from the
health insurance fund.”
In effect, this transfers to charges associated with providing medical and
hospital benefits from the employer’s health insurance carrier to Medicare,
which results in a reduction in the cost of providing health insurance directly
through the employer’s health insurance plan.”
As the Myers’ court observed:
“Participation in part A of the Medicare program is mandatory at no cost to the
retiree. However, participation in part B of the Medicare program is optional
and if a retiree opts to participate therein, he or she must pay a premium. The
City encouraged plaintiffs' class to enroll in Medicare part B because Medicare
then became the retirees' primary insurance and the employer-provided health
insurance became secondary, with a resultant reduction in premium cost to the
City. If a retiree did not elect to participate in Medicare part B, the City
continued to provide the retiree with the same fully paid health insurance
coverage as it provided to its eligible employees. On the other hand, if a
retiree opted for the Medicare part B coverage, the premium was automatically
deducted from his or her social security benefits and the retiree was
reimbursed by the City.
”In March 1994, the City unilaterally determined that it only would reimburse
its retirees 50% of the cost of Medicare part B coverage and, in June 1994, the
City ceased making reimbursements altogether. As a consequence, plaintiffs
commenced this action seeking, inter alia,
full reimbursement retroactively as a vested contract benefit.”
The court's conclusion:
“In this regard, we agree that the City's own 19-year practice of continuing to
provide fully paid health insurance coverage to plaintiffs' class, even after
the expiration of the various collective bargaining agreements pursuant to
which they obtained such benefits, constitutes very substantial evidence that
the provisions in question were intended to provide benefits to retirees for
the entire period of their retirement. Clearly, one of the more important aids
in the interpretation of a contract is the construction placed upon the
agreement by the contracting parties (see, Atwater
& Co. v Panama R. R. Co., 255 NY 496, 501; Matter of Mencher [Geller & Sons], 276 App Div 556,
565). As has been observed, " '[t]here is no surer way to find out what
parties meant, than to see what they have done' " (Town of Pelham v City of Mount Vernon, 304 NY 15, 23,
quoting Insurance Co. v Dutcher, 95 US
269, 273).”
N.B.
Although the Gooshaw and other court decisions noted above refer to
"renegotiated collective bargaining agreements," the employee
organization and the employer could only agree upon the health insurance
benefits available to active employees upon their retirement in the context of
renegotiated or successor collective bargaining agreement or a "memorandum of understanding." Such
discussions could not serve to diminish or impair the health insurance benefits
available to those individuals already retired based on earlier collective
bargaining agreement or "past practice" as such individuals are not
employees for the purposes of the Taylor Law and thus the employee
organizations may not represent those already retired in its collective
bargaining with the employer.
Posted by Public Employment Law Press at Tuesday, December 01, 2009