Vesting health insurance rights

Vesting health insurance rights
Handy v Schoharie County, Appellate Division 244 A.D.2d 842

In the Handy case, the Appellate Division said a legislative body may adopt of a resolution that alters a retiree’s health insurance benefits and that such a change can be legally applied to people who retired prior to the vote to change benefits.

In December 1995, the Schoharie County Board of Supervisors adopted three motions changing its policy with respect to its providing County retirees health insurance benefits.

Under the new policy, any elected County official who completed 10 or more years of service would be entitled to “health insurance” at the County’s expense upon retirement. Prior to this change Schoharie paid the health insurance premiums for the retiree and his or her spouse if the retired employee had completed five years of County service and was receiving a state retirement allowance.

David E. Handy retired from the Board of Supervisors on December 31, 1995, having served as a member since 1978. The Board, however, at its January 19, 1996 meeting rescinded several December 1995 motions relating to health insurance for retirees.

The Board next reinstated its former policy with respect to providing health insurance to its retired employees. Because he was not receiving a state retirement allowance, the County said it would not pay for Handy’s health insurance in retirement.

Handy sued, contending that under the Board’s December 1995 actions he was “entitled to health insurance paid at [Schoharie County’s] expense as [he had] met the requirement of a vested right.”

The Appellate Division disagreed, holding that the County was under no contractual obligation to provide [Handy] with health insurance and, accordingly, it did not act arbitrarily or capriciously in terminating that benefit.

The Handy decision should be contrasted with two other retiree benefits cases: Della Rocco v City of Schenectady and Andriano v City of Schenectady.

The Schenectady cases differed in that they concerned executive action as opposed to legislative action and Taylor Law agreements were involved and held to control.

On August 28, 1997, State Supreme Court Justice Robert E. Lynch ruled that Schenectady must provide fully paid health insurance comparable to that in effect at the time of each retiree’s retirement because the municipality is bound by the Taylor Law agreement in effect when employees retired.

The fact that the Taylor Law agreements had expired did not alter the municipality’s obligations to retirees under them.

The key element was the existence or absence of a contractual obligation to provide retirees a benefit.

The Appellate Division pointed out that an act of a legislative body will be treated as a contract only when the language and the circumstances manifest a legislative intent to create a private right of a contractual nature.

As an illustration, the Court commented that in Cook v City of Binghamton, 48 NY2d 323, the Court of Appeals said that “certain types of legislative acts, including those fixing salaries and compensation ... are not presumed to create a contract.”

Quoting from the U.S. Supreme Court’s ruling in Dodge v Board of Education, 302 US 74 at page 79, the Court of Appeals said that “the presumption is that such a law is not intended to create a private contractual right or vested right but merely declares a policy to be pursued until the [legislative body] shall ordain otherwise.”

The Appellate Division said that it found nothing in the December 1995 actions by the Board that it “intended to fetter its power in the future” with respect to health insurance. “Rather than evincing an intent to create a private contractual or vested right, the motions are more reasonably read as declarations of [the Board’s] policy.”

Notwithstanding the fact that Handy would have enjoyed health insurance benefits at the expense of the County had the December motions not been repealed, the Appellate Division decided that the Board’s December 1995 actions did not create a contractual property right enforceable against Schoharie County.

As to any claim that the Board’s action gave Handy a vested retirement benefit, in Lippman v Sewanhaka Central High School District, 66 NY2d 313, the Court of Appeals decided that health insurance for retirees is not a retirement benefit protected against being diminished or impaired by the State’s Constitution.

Demoted whistle blower entitled to reinstatement to the higher-level former position or equivalent and lost salary plus “predetermination interest”

Demoted whistle blower entitled to reinstatement to the higher-level former position or equivalent and lost salary plus “predetermination interest”
Tipaldo v Lynn as Commissioner of the NYC Department of Transportation, 2010 NY Slip Op 06467, decided on August 24, 2010, Appellate Division, First Department

In August 1996, John Tipaldo, a long-time manager with the New York City Department of Transportation (DOT), was promoted to the position of Acting Assistant Commissioner for Planning. Tipaldo was earning an annual salary of $55,000 at the time and was advised that he would be given a $25,000 salary increase if his appointment became permanent.

Less than a year later Tipaldo was demoted from the Acting Assistant Commissioner position. As a result of the demotion, Tipaldo appointment to Assistant Commissioner position did not become permanent and he never received the $25,000 increase in salary.

Tipaldo challenged his demotion citing Civil Service Law §75-b, contending the demotion was in retaliation for his having reported to the Department of Investigation that a superior violated bidding rules (see 48 AD3d 361).*

The instant appeal was from an order following a nonjury trial on the issue of damages following the Appellate Division’s earlier ruling. This appeal challenged Supreme Court's awarding Tipaldo $175,000 in back pay, but without interest and the court’s directive that Tipaldo reinstated to the same, or to an equivalent position to the one that he had held before the retaliatory personnel action that gave rise to his initial lawsuit.

The Appellate Division affirmed the lower court’s ruling with respect to Tipaldo’s reinstatement but said that the award of back salary had to be redetermined because:

1. Tipaldo was entitled to an interest award as provided by Civil Service Law section 75-b; and

2. The record supports Tipaldo's request that he be reinstated "to the same position held before the retaliatory personnel action, or to an equivalent position" as provided by Labor Law §740[5][b]).

The Department, objecting to Tipaldo's reinstatement, argued that he was not entitled to such reinstatement as he had declined promotions 2000, 2001 and 2002. The Appellate Division rejected the Department's theory, commenting that the undisputed testimony of his current supervisor was that at the time of those offers of promotion Tipaldo feared that any promotion would be met with retaliatory action by agency personnel.**

As to the amount of back salary awarded by Supreme Court, the Appellate Division noted that Tipaldo had called an economics expert to establish the amount of back pay to which he was entitled. The expert testified that Tipaldo had lost $388,243 in earnings as a direct result of the retaliatory actions taken by defendants. Tipaldo’s expert also testified that, applying the statutory interest rate of 9% to the lost earnings, Tipaldo was owed a total of $662,721.

In contrast, said the Appellate Division, Supreme Court “without any explanation for how it arrived at the figure, awarded Tipaldo $175,000 in back pay” and denied Tipaldo’s request for pre-determination interest.

Significantly, the Appellate Division noted that the Department “chose not to call their own expert to offer an alternative theory of the earnings which plaintiff would have lost had he not been the victim of retaliation, or to explain why plaintiff's expert's analysis was flawed in any respect.” Thus, said the court, “the only expert opinion before us is [Tipaldo's] and we see no reason to disturb it.”

Further, the Appellate Division held that that predetermination interest is generally available to whistle blowers suing pursuant to Civil Service Law §75-b.

* See Tipaldo v. Lynn, 48 AD3d 361 for the Appellate Division’s ruling in this earlier case.

** The Appellate Division indicated that the fact that Tipaldo declined such promotions did not militate against honoring his request for reinstatement to the higher-level position at this time.

The instant decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_06467.htm

The earlier decision, 48 AD3d 361, is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2008/2008_01801.htm
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Individual determined to be suffering from a mental disability placed on involuntary Civil Service Law Section 72 leave of absence

Individual determined to be suffering from a mental disability placed on involuntary Civil Service Law Section 72 leave of absence
NYC Administration for Children’s Services v S.B., OATH Index #2425/10

The Administration for Children's Services sought to place a child welfare specialist on involuntary leave pursuant to Civil Service Law Section 72 because of alleged mental disability.

Although S.B. had a satisfactory work history with the Administration, OATH Administrative Law Judge Ingrid Addison found that the evidence, including testimony of S.B.'s colleagues that they felt concerned for their safety, examples of bizarre and rambling emails respondent had sent, and the expert reports of two psychiatrists demonstrated that S.B. was mentally unfit for duty.

Section 72 leave is available to an employee who is unable to perform his or her duties because of a disability other than a disability resulting from an occupational injury or disease as defined in the Workers’ Compensation Law, while Section 71 of the Civil Service Law provides for a leave of absence when the employee is absent due to an occupational injury or disease.

The decision is posted on the Internet at:
http://archive.citylaw.org/oath/10_Cases/10-2425.pdf

Agility tests for firefighters must be validated as job related

Agility tests for firefighters must be validated as job related
Pietras v Farmingdale Fire District, USDC EDNY, 94-CV-0673

U.S. District Court Judge Denis R. Hurley ruled that an agility test for a volunteer firefighter unlawfully discriminated against Victoria Pietras because of her gender.

Pietras, a probationary volunteer firefighter with the Farmingdale Volunteer Fire Department, was required to drag to drag a 280 pound fire hose 150 feet in four minutes. Her best time was four minutes, forty-seven seconds. Rejected for full firefighter status, she sued contending that this portion of the agility test had a disparate impact on women in violation of Title VII of the Civil Rights Act of 1964.

Although Judge Hurley ruled that the Department “established that the contents of the test are job-related” he decided that “the same may not be said of the requirement that it be completed within four minutes.”

How was the four-minute hose drag requirement determined? The Department said that it gave the test to 44 members of the Department, including probationary and junior members. It found that the average time to complete the task was “about three and one half minutes.” It then added an additional half-minute for “leeway,” arriving at the four-minute requirement.

This process, said the Court, was insufficient to establish that “the four-minute time limit is anything other than arbitrary.”

Critical to Judge Hurley’s analysis was his finding that “the purpose of the test was to distinguish competent firefighter candidates from those without the necessary physical abilities to do the job.”

Judge Hurley concluded that to set a standard there had to be some type of job analysis but there was nothing in the record to indicate that such a study had been made, either before administering the test or “after the fact.” This, said the Court, indicated that the standard set by the Department had not been “validated.”

Judge Hurley directed the Department to reinstate Pietras, noting that it could administer another agility test to her as a pre-requisite to her becoming a full member but that any such test had to comply with the relevant federal and state civil rights laws.
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