The doctrine of res judicata held to bar litigation of employee’s challenge to termination in federal court follow dismissal of State lawsuit

The doctrine of res judicata held to bar litigation of employee’s challenge to termination in federal court follow dismissal of State lawsuit
Sheffield v Sheriff of the Rockland County Sheriffs Department, 08-0840-cv (2nd Cir. 9-22-2010)

Malinda Sheffield was terminated from her employment following a disciplinary proceeding in which the arbitrator found that Sheffield had filed a false workers’ compensation claim and recommended her dismissal.

Sheffield than filed a lawsuit in State Supreme Court alleging that the disciplinary action taken against her was “retaliatory.” She also alleged that the action constituted libel and violated her rights under Title VII. The court dismissed her petition in its entirety.

Prior to the Supreme Court’s issuing its decision, Sheffield filed a similar lawsuit in federal district court.

Following the dismissal of Sheffield’s petition by the federal district court, Sheffield filed an appeal with the Circuit Court of Appeals, contending that neither the doctrine of res judicata nor collateral estoppel applied with respect to her federal action.

The Circuit Court, applying New York State law, said that in New York “res judicata … bars successive litigation [of all claims] based upon the same transactions or series of connected transactions… if (1) there is a judgment on the merits … by a court of competent jurisdiction and (ii) the party against whom the doctrine is invoked was a party to the previous action….”

Considering the events underlying Sheffield’s federal action, the Circuit Court affirmed the district court’s dismissal of her complaint on the ground of res judicata and thus found it unnecessary to consider whether the doctrine of collateral estoppel would also bar her litigating her federal claims.

The Circuit Court’s decision is posted on the Internet at:
http://www.ca2.uscourts.gov/decisions/isysquery/c3b4afe8-5513-4998-88f3-9a6beb0bc6d3/13/doc/08-0840_so.pdf

IRS private letter ruling advises university’s that its tuition reduction plan available certain employees and their dependents is non-discriminatory

Tuition reduction plans

There may be State Constitution issues to be considered and resolved with respect to providing such a benefit to staff members of public universities and colleges in the SUNY system and their dependents. For example, would granting such a type of benefit constitute an unconstitutional gift of public monies within the meaning of Article VII, §8 of the State Constitution?

Article VII, §8.1, in pertinent part, provides: “The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes.”

New York State courts have ruled on a number of cases involving claims that the challenged action constituted an unconstitutional gift of public monies or property including:

1. Gagliardo v Dinkins, 89 N.Y.2d 62. Here the Court of Appeals said that “... the constitutional prohibition on gifts of public funds is not necessarily subject to statutory definitions of terms or conditions of employment for purposes of governing labor-management relations between civil service employees and public or governmental employers under the Taylor Law.”

2. Garber v Board of Trustees of State Univ. of N.Y at Stony Brook, 38 AD3d 833. Garber contended that Stony Brook contract with a private developer for construction of a hotel on the SUNY Stony Brook campus was "illegal" and constituted an unconstitutional gift of State property. The Appellate Division held that "Supreme Court correctly determined, upon review of the documents submitted by the parties, that the proposed hotel construction proceeded in accordance with specific enabling legislation enacted by the Legislature" (see the Laws of 1986, Chapter 830 and the Laws of 1989, Chapter 200).

3. Rampello v. East Irondequoit Cent. School Dist. 236 A.D.2d 797. The Appellate Division found that prior to the employee’s retirement the school district had no obligation under its collective bargaining agreement with the Association of East Irondequoit Administrators to make cash payments for unused accumulated sick days upon an employee's retirement. Accordingly, as the Board did not authorize payment for sick days prior to their accumulation, "there was no legal obligation supporting the retirement incentive and the payment to the employee constituted an unconstitutional gift of public funds."

4. Matter of Mahon v Board of Educ., 171 NY 263. The Court of Appeals ruled that the granting of pension benefits to teachers who had retired before the establishment of a pension system was an unconstitutional gift of public funds.

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Ex parte communications by the hearing officer not permitted while he or she is preparing the final determination in an administrative proceeding

Ex parte communications by the hearing officer not permitted while he or she is preparing the final determination in an administrative proceeding
Meislahn v McCall, App. Div., Third Dept., 264 AD2d 957

The lesson of the Meislahn decision: a hearing officer may not have ex parte* dealings with litigants in an administrative hearing.

A Town of Clarkstown police officer, William Meislahn, filed an application for accidental disability retirement after he fell while at work and injured himself. A hearing was held by the Retirement System. Meislahn’s application was rejected on the ground that “[Meislahn] had not sustained an accident within the meaning of the Retirement and Social Security Law.” Meislahn appealed the ruling, claiming that his right to due process had been violated.

According to the Appellate Division, after the hearing ended the hearing officer sent her decision to the attorney for the Retirement System. She, however, did not send a copy to Meislahn’s attorney. The attorney for the Retirement System then drafted a proposed final determination based on the hearing officer’s decision and sent it to the hearing officer. The hearing officer signed it on behalf of Comptroller and returned it to the attorney for the Retirement System.

The Retirement System’s attorney then sent a copy of the Hearing Officer’s decision and the Comptroller’s determination as signed by the Hearing Officer to Meislahn’s attorney. Meislahn argued that such a procedure violated his right to administrative due process.

Referring to an earlier opinion, Le Pore v McCall, 262 AD2d 919, the Appellate Division said in Le Pore it had concluded that a similar procedure violated State Administrative Procedure Act Section 307(2) and “created such an appearance of impropriety and bias to warrant an annulment of the determination.”

In Le Pore the Appellate Division found that:

Upon the Hearing Officer's request, the Retirement System attorney drafted the findings of fact, conclusions of law and final determination in this matter and sent it back to the Hearing Officer, who then signed it for [Retirement System] on July 25, 1997 and returned the determination to the Retirement System's attorney. It was not until August 29, 1997 that the decision of the Hearing Officer and [Comptroller's] determination were first sent to [Le Pore's] attorney.

The court agreed with Le Pore that he was denied due process by the Hearing Officer's clear and flagrant violation of State Administrative Procedure Act Section 307(2), which prohibits ex parte communications.

As it did in La Pore, the Appellate Division remanded the matter to the Comptroller for a de novo determination based on the record.

* The term ex parte is used to describe situations in which only one of the parties in an action appears before a judge, an arbitrator or a hearing officer without the knowledge of the other party or parties to discuss the case. Such meetings or communications are prohibited to prevent influencing a judicial or quasi-judicial decision as a result of a one-sided or partisan point of view.
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Lawsuit challenging reassignment to another position rule moot because employee retired before trial

Lawsuit challenging reassignment to another position rule moot because employee retired before trial
Cannon v Watervliet, App. Div., Third Dept., 263 AD2d 920, Motion for leave to appeal denied, 94 NY2d 756

The City of Watervliet reassigned John Cannon from the position of investigator to the uniform patrol division. He was continued in his rank of sergeant. Typically the appointing authority has the right to reassign an employee to another position for which he or she is qualified without the individual’s consent.

Cannon sued, seeking to be reinstated as an investigator. Because Cannon had retired before his petition went to trial, Supreme Court dismissed his petition as moot. The Appellate Division affirmed the lower court’s determination. It pointed out that a case that is moot may not be considered by the court unless it falls within the exception to the mootness doctrine:

1. A likelihood of repetition, either between the parties or among other members of the public;

2. A phenomenon typically evading review; and

3. A showing of significant or important questions not previously passed on, i.e., substantial and novel issues.”

The Appellate Division pointed out that Cannon’s retirement clearly rendered his petition moot inasmuch as the primary relief he requested, reinstatement to his former position of investigator, was no longer attainable. Significantly, the court noted that since Cannon retained the rank of sergeant, there is no indication that his salary or benefits were adversely affected.

Additionally, the Appellate Division rejected Cannon’s claim that he was forced to retire, stating that it found no evidence “that the reassignment forced [Cannon] into retirement, [since] there is no evidence of duress or coercion in this record from which we can conclude that his retirement was involuntary.”
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Refusing a light duty assignment

Refusing a light duty assignment
Korczyk v City of Albany, 264 AD2d 908

The Appellate Division’s ruling in the Korczyk case cautions that public employees injured in the line of duty may be required by their employer to accept light duty assignments if medically able to do so or risk losing their workers’ compensation benefits.

A similar result is mandated by Sections 207-a and 207-c of the General Municipal Law. These sections provide benefits to firefighters and police officers injured in the line of duty. Such benefits must be discontinued if the injured firefighter or police officer refuses to accept an appropriate light duty assignment for which he or she is found to be medically qualified.

The case involved Stephanie Korczyk, a mechanic’s helper for the City of Albany. In 1992, Korczyk injured her back while at work.

After initially paying her workers’ compensation benefits for about a year, the city sought to end the payment of such benefits on the theory that Korczyk had “voluntary withdrawn from the labor market.” Its explanation for how it reached that conclusion: Korczyk had refused to accept a light duty assignment it had offered to her.

According to Korczyk, she had discussed the city’s offer of a light duty assignment with her chiropractor, P. J. Leonard in April 1993 and Leonard told her that she was incapable of working the eight-hour day required by the assignment. She told the city that “she would return to work as soon as Leonard released her to do so.”

But, according to the decision, “Leonard testified that [Korczyk] was able to return to work to some degree in February 1993” and that “[h]is notes did not reflect, and he did not recollect, any discussion with Korczyk about an offer of a light-duty assignment in April 1993.”

Korczyk conceded that she did not ask Leonard whether she could return to work until she took a part-time job in December 1993 while attending college.

After “a full development of the record”, the Workers’ Compensation Board ruled that Korczyk’s refusal of the city’s offer of light-duty work constituted a voluntary withdrawal from the labor market and her workers’ compensation benefits were stopped. Korczyk appealed.

The basic issue: does a claimant’s failure to accept a light-duty assignment constitutes a voluntary withdrawal from the labor market? The Appellate Division said this was an issue for the Workers’ Compensation Board rather than the courts to resolve.

The court sustained the board’s finding that Korczyk voluntarily withdrew from the labor market by refusing a light-duty assignment some eight months before she took the part-time job, noting that the board’s finding was supported by substantial evidence.

Another point: it should be remembered that Section 71 of the Civil Service Law mandates that a public employee in the classified service who has been disabled as a result of an occupational injury or disease as defined in the Workers’ Compensation Law is entitled to leave without pay for at least one year unless the disability is “of such a nature as to permanently incapacitate” the individual for the performance of the duties of the position.

It is expected that the courts would view the right to Section 71 leave and the right to workers’ compensation benefits as independent rights and the loss of eligibility for one would not necessarily have an adverse impact on the individual’s right to the other.

In other words, even if an individual on Section 71 leave is “terminated” after one year of such absence, this action does not result in the automatic discontinuation of his or her workers’ compensation benefits. By the same token, the fact that an individual is declared ineligible for workers’ compensation benefits would not automatically mean that his or her Section 71 leave status ends.

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If you are interested in learning more about General Municipal Law §207-a or §207-c disability benefits and procedures please click here:
http://section207.blogspot.com/2010/03/v-behaviorurldefaultvml-o.html

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A prisoner while assigned to a work crew is not an employee

A prisoner while assigned to a work crew is not an employee
Richel v Village of Angola, Fourth Dept., 265 AD2d 864

Joseph Richel, an inmate at the Gowanda Correctional Facility, was injured in a fall from a scaffold while assigned to a work crew that was spray-painting a building owned by the Village of Angola. He sued, contending that the Village created a dangerous condition by providing unsafe and inadequate equipment in violation of Section 240(1) of the Labor Law.

The Appellate Division, Fourth Department, rejected Richel’s theory, commenting that “[a]s an inmate, [Richel] was not an employee of the Village or the State of New York when he was injured, and thus he is not an employee subject to the protection of Labor Law Section 240(1).”
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Niagara Frontier Transportation Authority (NFTA) police officers alleged to have participated in a “double dipping” scheme

Niagara Frontier Transportation Authority (NFTA) police officers alleged to have participated in a “double dipping” scheme
Source: Office of the State Comptroller

An audit report released on September 27, 2010 by State Comptroller Thomas P. DiNapoli's Division of State Government Accountability alleges that “Numerous Niagara Frontier Transportation Authority (NFTA) police officers systematically abandoned their assigned duty posts to go to work at other jobs while being paid by the authority, a practice that was condoned and participated in by high-ranking officers.”

According to the report, 11 NFTA officers practiced “double dipping” over a three-year period by “cheating the public out of a full-day’s work.” In what the report termed an “egregious” example, one NFTA officer claimed he worked 26 hours during a single day.

Division of State Government Accountability auditors found that NFTA officers worked for other employers “while being signed in for their regular scheduled shifts with the Transportation Authority.” Some of the officers, said the auditors, “signed in for overtime” with the Authority while “on the clock as security officers” with another Erie County agency.

NFTA officials were advised that the Division of State Government Accountability referred its findings to the "Office of the State Comptroller’s Division of Investigations for referral to law enforcement for possible criminal prosecution."

The Comptroller’s retirement division is following up on the audit’s findings to make certain that the officers involved “only receive credit for the service and earnings to which they are entitled.”

The Division of State Government Accountability's complete audit [Report 2010-S-26] is posted on the Internet at http://www.osc.state.ny.us/audits/allaudits/093010/10s26.pdf and includes a letter dated September 13, 2010 describing a number "enhanced internal controls" that NFTA has implemented.

N.B. The Comptroller encourages the public to help fight against fraud and abuse. Allegations of fraud, corruption and abuse of taxpayer money may be reported by calling the toll-free fraud hotline at 1-888-672-4555; filing a complaint online at investigations@osc.state.ny.us , or mailing a complaint to: Office of the State Comptroller Investigations Unit, 110 State Street, 14th floor, Albany, NY 12236.
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