Termination for violating the employee’s “last chance agreement” disqualifies individual for unemployment insurance benefits

Termination for violating the employee’s “last chance agreement” disqualifies individual for unemployment insurance benefits

Matter of Brown v Lincoln Ctr. for The Performing Arts, Inc., 2011 NY Slip Op 02982, Appellate Division, Third Department

Gloria Brown worked for as a security guard at a performing arts center for more than nine years. Brown had a history of disciplinary violations and after an incident in which she left her post without authorization, she and Lincoln Center entered into a “last chance agreement” that provided that her employment would be terminated if she committed further disciplinary infractions.

In December 2009, Brown met with representatives of the employer to discuss certain policy violations, including her failure to dress in the appropriate manner and to remain attentive at her post. The meeting was prematurely ended because of Brown’s behavior and another meeting was scheduled for early January 2010 with her union representative was present. Ultimately Brown was terminated and she applied for unemployment insurance benefits.

An Unemployment Insurance Administrative Law Judge concluded that Brown was terminated for misconduct and upheld the initial determination denying her unemployment benefits.

The Unemployment Insurance Appeal Board, however, overruled the Administrative Law Judge and awarded Brown benefits, finding that Lincoln Center “had not enforced the last chance agreement by allowing claimant to commit other disciplinary infractions without consequence prior to the December 2009 meeting.” Lincoln Center appealed and the court vacated the Board’s decision.

Noting that insubordinate behavior and, or, disrespectful conduct toward a supervisor has been held to constitute misconduct disqualifying a claimant from receiving unemployment insurance benefits, the Appellate Division found that the record contained ample evidence that Brown became loud, boisterous and disrespectful toward her supervisor during the December 2009 meeting. This clearly amounted to insubordination violative of the last chance agreement and was the equivalent of disqualifying misconduct.

As to the Board's finding that the Center “had not enforced the last chance agreement,” the Appellate Division said found “the record is devoid of evidence” establishing that the employer neglected to enforce the last chance agreement with respect to disciplinary infractions committed by Brown prior to the December 2009 meeting and that Brown was somehow misled thereby.

Although the Center’s director of human resources testified that Brown committed some minor violations, the nature and extent of them were not disclosed. However, said the Appellate Division, “it was the employer's prerogative” to determine if such acts constituted a level of misconduct warranting termination and the director stated that they did not.

Thus, said the court, substantial evidence does not support the Board's decision awarding Brown unemployment insurance benefits.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_02982.htm

Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual

Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual

Matter of Olick v D'Alessandro, 2011 NY Slip Op 50718(U), Supreme Court, New York County, Judge Manuel J. Mendez [Not selected for publications in the Official Reports]

Alice D. Olick filed petitions pursuant to Article 78 of the Civil Practice Law and Rules in an effort to annul and the determination by the New York Teachers’ Retirement and the New York City Employees’ Retirement Systems that reduced the amount of her retirement allowance and barring deductions from future retirement allowance payments for alleged “overpayments” made to her during the past seven years since her retirement.

For more than seven (7) years since her retirement Olick had been receiving an annual retirement allowance of $62,381. On March 16, 2009 she was advised that she would receive a "revised benefits letter" with a larger Annual Retirement Allowance. In addition in conversations had with NYCERS employees she was advised that she would receive a bulk payment for each of the seven years since her retirement.

In December 2009, however, Olick was advised that her retirement allowance informing her that her pension was not being increased, instead it was being decreased and she was responsible for the return of excess payments in the amount of $32,879.82 made to her over the past seven years.*  The Retirement System attributed the original mistaken pension calculation to "a programming error….”

Olick appealed NYCERS' reduction of her pension, contending, among other things, that the decision was arbitrary and capricious. She also argued that [1] NYCERS failed take into account that in reliance on the original calculation she and her husband had planned and budgeted for their retirement, making life altering decisions relying on the certainty that her pension would be $62,381, plus Social Security and that [2] she paid taxes on this amount and that she received the Annual Pension Allowance for seven years before any alleged error was detected.

In its defense the Retirement System said that Estoppel is not available against a governmental agency seeking to recoup overpayment of a benefit.

Judge Mendez said that the applicable statute, New York City Administrative Code §13-182 Retirement and Pensions, provides, in pertinent part: "Should any change or error in records result in any member or beneficiary receiving from the retirement system more or less than he or she would have been entitled to receive otherwise, on the discovery of any such error such Board shall correct such error, and as far as practicable, shall adjust the payments in such a manner that the actuarial equivalent of the benefit to which he or she was entitled shall be paid."

Accordingly, in the event an overpayment is made, the agency has authority to recoup the overpayment by withholding or reducing the current pension benefits to which the retiree would otherwise be entitled. As to applying the doctrine of estoppel in this case, Judge Mendez ruled that the doctrine could only be applied against a governmental entity if failure to apply the doctrine would defeat a right legally and rightfully obtained.

Citing Freda v. Board of Education of the City of New York, 224 AD2d 360, Judge Mendez said the statement of an employee of the agency later found to be incorrect, even if relied upon by the employee does not bar the agency from correcting an error later discovered and recouping any overpayment made to the retiree.

The bottom line: as Olick received a greater annual retirement allowance than she was entitled to receive, once the error was discovered, under the statute, NYCERS is entitled to recover the amount paid in excess of what Olick was entitled to receive. 

Further, the overpayment can be recovered by withholding or reducing the current pension benefit Olick is receiving.

  

In an Article 78 proceeding such as this one, the court's function is limited to a determination whether the administrative determination is arbitrary and capricious in that it is "without sound basis in reason and is generally taken without regard to the facts" and unless the decision is arbitrary, the court cannot substitute its judgment, even if it would have reached a different result if presented with the issue in the first instance.

Applying this standard, Judge Mendez denied Olick’s petition.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_50718.htm

* Olick’s monthly gross retirement allowance was reduced by almost $1,000 from $5,264.44 to $4,333.12.  

POSTSCRIPT: 

In his blog, Administrative Law Professor [ http://lawprofessors.typepad.com/adminlaw/ ], Edward M. McClure comments: 

In his New York Public Personnel Law blog, Harvey Randall reviews a case involving one kind of administrative law issue that often darkens an attorney's door: The government has given your client something by mistake and now intends to take it back. But your client, ignorant of the error, has spent the money or made plans or persuaded investors or otherwise reasonably relied on the erroneous decision and doesn't want to pay it back, change plans, return investments, or otherwise reverse course. In the case discussed by Mr. Randall in "Doctrine of Estoppel not available to bar an administrative action to correct an error notwithstanding its adverse impact on the individual", a retired city government lawyer finds out seven years after retirement that she has been overpaid almost $1000 per month, and the New York City Employees' Retirement System is going to deduct 25% of her (reduced) pension until it is repaid. She has spent the money and made all sorts of plans that depend on the original monthly payment. Sounds like a job for Equitable Estoppel!

Not. The opinion from the reviewing court cites to a lot of state precedent, but doesn't really get to the meat of the law here. The City is relying on a N.Y. statute:

Should any change or error in records result in any member or beneficiary receiving from the retirement system more or less than he or she would have been entitled to receive otherwise, on the discovery of any such error such Board shall correct such error, and as far as practicable, shall adjust the payments in such a manner that the actuarial equivalent of the benefit to which he or she was entitled shall be paid.

New York City Administrative Code §13-182 (emphasis added).

According to Mr. Randall,

Accordingly, in the event an overpayment is made, the agency has authority to recoup the overpayment by withholding or reducing the current pension benefits to which the retiree would otherwise be entitled. As to applying the doctrine of estoppel in this case, Judge Mendez ruled that the doctrine could only be applied against a governmental entity if failure to apply the doctrine would defeat a right legally and rightfully obtained.

Not just the authority to recoup the overpayment, but the obligation to recoup the overpayment. The court's opinion does not explain the law behind why estoppel fails in this case, but we can look at what is sometimes termed the first maxim of equity: "Aequitas sequiture legem" - "equity follows the law". 30A C.J.S. Equity § 128 (updated March 2011); Story, Joseph. Commentaries on equity jurisprudence : as administered in England and America (Boston, 1836), §64. This maxim means different things in different contexts. For our purposes in this case, equity will not contradict a statute or common law rule on point (subject to a bunch of exceptions that rarely apply against governments and that don't apply here). Here we have a statutory - a legal - requirement that the City get the money back.

I'm sorry but your client is, ummmm, going to be disappointed.

EMM

Procedure for requesting a disciplinary hearing

Procedure for requesting a disciplinary hearing
Gagnon v Wappingers CSD, 268 AD2d 472

Section 3020-a.2(c) of the Education Law requires the individual against whom disciplinary charges have been filed to advise the district’s clerk or secretary whether or not he or she wishes to provided with a hearing. Such a request must be filed within 10 days of the individual’s receiving the statement of the charges. If the individual fails to notify the clerk or secretary that he or she wishes to have a hearing within this ten-day period, and this defect is “unexcused,” the individual is deemed to have waived his or her right to a hearing.

This was the situation facing Conrad Gagnon. Gagnon had been served with disciplinary charges pursuant to Section 3020-a of the Education Law. He, however, failed to advise the district’s clerk or secretary that he wanted a hearing within the statutory 10-day period allowed for this purpose. The district issued its disciplinary determination without holding a hearing.

Gagnon filed a petition pursuant to Article 78 of the Civil Practice Law and Rules contending that “his failure to make a timely demand for a hearing was excusable” and therefore the district’s refusal to accept his untimely request for a Section 3020-a disciplinary hearing was arbitrary and capricious and an abuse of discretion. A Supreme Court judge was not persuaded and dismissed Gagnon’s petition.

The Appellate Division affirmed the lower court’s ruling, noting that Gagnon “failed to proffer any evidence that he in fact requested permission to file a late demand for a hearing, or to rebut the sworn assertions proffered by the Board that no such request was ever made.” In other words, not only did Gagnon concede that he fail to file a timely request for a disciplinary hearing, he was unable to demonstrate that he had made any request for such a hearing whatsoever.

The decision clearly demonstrates the importance of both the employer and the employee, respectively, establishing what some refer to as a “paper trail” demonstrating that all procedural elements in such cases were complied with.

In contrast to Section 3020-a, Section 75 of the Civil Service Law mandates that a hearing to consider disciplinary charges filed against an individual in the classified service be scheduled and held if discipline is to be imposed on an employee subject to its provisions.

Going forward with the Section 75 disciplinary hearing is not contingent on the employee’s requesting such a proceeding. Although Section 75.2 requires that the employee be allowed not less than eight days to file an answer to the charges and specifications, there is no statutory requirement that he or she do so.*

The appointing authority must hold a Section 75 disciplinary hearing – and prove the charges and specifications filed against the employee -- even if the individual does not submit an answer the charges.

Further, case law indicates that the hearing must go forward, even if the employee fails to appear at, or participate in, the proceeding if the employer wishes to impose discipline on the individual.

* Section 75.2, in pertinent part, provides “A person against whom removal or other disciplinary action is proposed shall have written notice thereof and of the reasons therefore, shall be furnished a copy of the charges preferred against him and shall be allowed at least eight days for answering the same in writing.”

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The Discipline Book, - a concise guide to disciplinary actions involving public employees in New York State is a 1272 page e-book available from the Public Employment Law Press. Click on http://thedisciplinebook.blogspot.com/ for additional information concerning this electronic reference manual.

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Appointing authority may reject a proposed disciplinary settlement

Appointing authority may reject a proposed disciplinary settlement

Tetro v Safir, App. Div., First Dept

It is not uncommon for an employee to offer to, or to agree to, “settle” disciplinary charges that have been filed against him or her.

Is the appointing officer bound to accept the “negotiated settlement?” Not necessarily, as the Tetro decision by the Appellate Division demonstrates.

In Tetro, the Appellate Division affirmed the appointing authority’s rejection of the terms of the settlement of a disciplinary action previously agreed to by the employee and impose a harsher penalty -- termination -- upon the individual.

Anthony Tetro, a New York City police officer, was dismissed from his position after he was found guilty of giving “false testimony at the criminal trial of a former police officer.”

Tetro testified that his partner discovered a gun in their patrol car while he was removing a prisoner from the vehicle.

The evidence showed that Tetro and his partner failed to check underneath the back seat of the patrol car and that other police officers later found the weapon.

Tetro had “negotiated a plea agreement” in order to settle the disciplinary charges filed against him but the Commissioner rejected it and decided that the appropriate penalty to impose was dismissal from the department.

The Appellate Division ruled that Tetro’s “contract rights were not violated” when the Commissioner declined to accept the settlement agreement and imposed a different penalty. The court cited Silverman v McGuire, 51 NY2d 228, in support of its ruling.

Elected official removed from public office for failing to be a domiciliary of the jurisdiction as required by law

Elected official removed from public office for failing to be a domiciliary of the jurisdiction as required by law

Board of Trustees of the Vil. of Sodus, N.Y. v Allen, 2011 NY Slip Op 31035(U), Supreme Court, Wayne County, Docket Number: 71473/2010, Judge Dennis M. Kehoe [Not selected for publication in the Official Reports]

The Village Board of the Town of Sodus filed a petition in Supreme Court seeking to remove Kelley M. Allen from his position of Village Mayor.

The Village Board contended that Allen was not a resident of the Village the time of election in November 2008, nor is he now, and thus ineligible to serve as the Village Mayor, citing Village Law §300(1).

In rebuttal, Allen said that he maintained a residence in an apartment on the second floor of a building located within the Village at 29 West Main Street. The building is owned by Allen’s wife, Tracey L. Fox, Esq., who has maintained her law office at that address for some eleven years.* 

Judge Kehoe, noting that the Village Law does not define the term "resident", said that under Election Law §1-104(22) the term refers to "that place where a person maintains a fixed, permanent and principal home, and to which he, whenever temporarily located elsewhere, intends to return"** of his or her domicile.

The court then said that while “numerous cases have held that it is possible for an individual to maintain more than one bona fide residence, in People v. O'Hara, 96 NY2d 378, the Court of Appeals held that the "crucial" factor in determining the legitimacy of a particular residence under the Election Law is that the individual must manifest an intent to live there, coupled with a physical presence, "without any aura of sham."

Having been reviewed the deposition testimony of Mr Allen and his wife at length and considering all the evidence in the light most favorable to the Allen, Judge Kehoe that the Village Board made a prima facia showing of entitlement to summary judgment as a matter of law, and that the Allen has failed to rebut the showing.

Based on Allen’s deposition testimony that [1] he had rented the upstairs apartment from his wife four days before the election, for an annual rental of $1.00, for a period which extends through December 31, 2012, the date his term as Mayor expires; [2] that the furnishings of the apartment consist of one bed with a crate used as a night table, had no appliances such as a refrigerator, stove, or microwave - and no television or computer; [3] that he did not move his personal belongings to the apartment; and [4] that he regularly ate dinner with his wife and children at the residence in the Town of Sodus; and spent the majority of his nights there, Judge Kehoe said he must conclude that the Allen’s attempt to establish a residence in the Village of Sodus was contrived for the purpose of making him eligible to run for the office of Mayor.

Having not met the criteria necessary to establish himself as a resident of the Village of Sodus, the court granted the Village Board’s motion for summary judgment, citing Public Officers Law §30(1)(d).

Public Officers Law §30(1)(d) provides that a public office becomes vacant if the incumbent of such office ceases to be “an inhabitant of the state, or if he be a local   officer, of the political subdivision, or municipal corporation of which   he is required to be a resident when chosen....”

As the Appellate Division noted in Johnson v Town of Amherst, 74 AD3d 1896, having a residence in a jurisdiction is not always the same as having a domicle in that jurisdiction.

The Town of Amherst’s Town Code required its employees to be “domiciliaries of the Town.” James I. Johnson’s family’s home, however, was in Elba, New York and the evidence in the action showed that he “listed the Elba address on his New York State income tax forms, that he had no intention of moving his family to [Amherst] and that he established residency in [Amherst] solely to comply with the original residency requirements of his employment.” As a result Johnson was terminated from his position with Amherst for failing to comply with the Code’s requirement that he be a domiciliary of the Town.

The Appellate Division explained that "[D]omicile means living in [a] locality with intent to make it a fixed and permanent home."* and the evidence presented at the hearing established that Johnson’s family lived in a home in Elba, and that he established a residency in the Town “solely to comply with the original residency requirements of his employment.”

The court concluded that the determination that Johnson is a domiciliary of Elba rather than the Town is supported by substantial evidence and dismissed his appeal.

Although an individual may have, and maintain, a number of different residences simultaneously, he or she can have, and maintain, only one domicile at a given time.

The Johnson decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05447.htm 

The Allen decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/pdfs/2011/2011_31035.pdf

* The decision notes that Allen and his wife own a residence located within the Town of Sodus but outside the Village limits, and have lived there with their two children since the year 2000.

The ability of an “in-network” health care provider to sue an ERISA health benefit plan for breach of contract in state court depends on the nature of its claim

The ability of an “in-network” health care provider to sue an ERISA health benefit plan for breach of contract in state court depends on the nature of its claim

Montefiore Med. Ctr. v. Teamsters Local 272, 10-1451-cv, USCA 2^nd Circuit

The question presented in this appeal: May a healthcare provider’s breach of contract and quasi-contract claims against an ERISA health benefit plan were completely preempted by federal law under the two-prong test for preemption established in Aetna Health Inc. v. Davila, 542 U.S. 200?

The Davila two-prong test to determine whether a claim falls “within the scope” of §502(a)(1)(B). provides that claims are completely preempted by ERISA if they are brought:

a. by “an individual [who] at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),”; and

b. under circumstances in which “there is no other independent legal duty that is implicated by a defendant’s actions.”

The Circuit Court noted that the test is conjunctive; i.e., a state-law cause of action is preempted only if both prongs of the test are satisfied.

The Circuit Court of Appeals ruled that:

1. An “in-network” health care provider may receive a valid assignment of rights from an ERISA plan beneficiary pursuant to ERISA §502(a)(1)(B)*;

2. Where a provider’s claim involves the right to payment and not simply theamount or execution of payment, i.e.,  where the claim principally implicates coverage and benefit determinations as set forth by the terms of the ERISA benefit plan, and not simply the contractually correct payment amount or the proper execution of the monetary transfer—that claim constitutes a colorable claim for benefits pursuant to ERISA §502(a)(1)(B).

In this instance, said the court, at least some of Montefiore's claims for reimbursement are completely preempted by federal law. However, the Circuit Court noted, the remaining state-law claims are properly subject to the exercise of the District Court’s supplemental jurisdiction.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/638f47ad-5866-4fe6-b0b7-de8642e536f7/1/doc/10-1451Complete_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/638f47ad-5866-4fe6-b0b7-de8642e536f7/1/hilite/

* 1 Section 502(a)(1)(B) provides, in relevant part: A civil action may be brought -- (1) by a participant or beneficiary -- (B) to recover benefits due to him [or her] under the terms of his [or her] plan, to enforce his [or her] rights under the terms of the plan, or to clarify his [or her] rights to future benefits under the terms of the plan.

Creating and abolishing a temporary position

Creating and abolishing a temporary position

Wilson v Madison-Oneida BOCES, 268 AD2d 625

Frequently a public employer will establish a temporary position to handle a particular need that is expected to be resolved in a relatively short period. The Wilson case addresses the creation and abolishment of temporary positions and the rights of individuals appointed to such temporary positions.

 The Madison-Oneida BOCES appointed Dana Wilson as “temporary clerk of the works” to perform construction oversight services for the Cazenovia Central School District and the Stockbridge Valley Central School District. The item was established as a temporary position in the civil service.*

BOCES initially wrote to Wilson telling him that his appointment was effective February 9, 1996 and would run through June 30, 1996. He was to be compensated at an annual salary rate of $40,000. BOCES later wrote Wilson advising him that he was appointed “temporary clerk of the works” for the period July 1, 1996 through June 30, 1997 at the same rate of compensation.

When the work at Cazenovia was nearing completion, Wilson commenced working at Stockbridge. When Stockbridge’s project was shut down due to poor weather conditions, Stockbridge asked BOCES to “adjust its contract” for clerk of the works services. As a result, BOCES abolished Wilson’s position effective January 17, 1997 and discontinued his employment.

Wilson sued, contending that BOCES violated its “employment agreement” to employ him through June 30, 1997 and, in addition, urged that it had terminated him without just cause.

The Supreme Court, treating this as an “Article 78” proceeding rather than as an action for “breach of contract,” dismissed his petition, finding that it was untimely. Wilson appealed.

First, the Appellate Division pointed out that the four-month Statute of Limitations contained in Section 217 of the Civil Practice Law and Rules is applicable to proceedings contesting the abolishment of positions in the public service. It then said that the time period to challenge the decision runs from the date abolition. Agreeing with the lower court, the Appellate Division said that Wilson’s Article 78 petition was untimely.

In an effort to avoid this result, Wilson tried to convince the court that this was a “breach of contract” case and thus his petition was timely as it was subject to a longer Statute of Limitations provision.

The Appellate Division rejected Wilson argument, holding that there was insufficient evidence to demonstrate a formal employment contract between Wilson and BOCES or the school districts. It said that the “employment notices” he relied do not establish the existence of such an agreement.

Thus, said the court, Wilson’s claims involve the abolition of the position of temporary clerk of the works, a matter that may be properly challenged only via an Article 78 proceeding.

According to the ruling, Wilson’s position was officially abolished effective January 17, 1997 at a meeting of BOCES held on February 13, 1997. The Appellate Division concluded that regardless of whether the four-month Statute of Limitations is measured from the date of the BOCES meeting or the effective date of abolition of the position, Wilson’s commencement of the action in January 1998 was untimely.

* The decision refers to Wilson’s temporary position as being in the “civil service” when it would be more accurate to describe it as being in the “classified service.” In New York, the civil service consists of the classified service and the unclassified service. Educators, typically serving in positions in the unclassified service, are also in the civil service. 

Disqualifying misconduct for the purposes of Unemployment Insurance benefits

Disqualifying misconduct for the purposes of Unemployment Insurance benefits

Matter of Jacquelyn M. Cody v Commissioner of Labor, 37 AD3d 920

Jacquelyn M. Cody, a tenured guidance counselor employed by the New York City Department of Education, was served with disciplinary charges pursuant Section 3020-a of the Education Law . The charges set out 42 specifications of misconduct for actions she committed during the 2001-2002 and 2002-2003 school years.

The Section 3020-a hearing panel found Cody guilty of 38 specifications of conduct unbecoming her profession.*

Terminated from her position, Cody applied for unemployment insurance benefits.

Ultimately, the Unemployment Insurance Appeal Board determined that Cody was disqualified from receiving such benefits because she lost her employment due to misconduct. Cody appealed the Board’s decision.

Citing Limoncelli [Commissioner of Labor], 32 AD3d 1066, the Appellate Division sustained the Board’s ruling. The court said that that “An employee's actions that are contrary to established policies and have a detrimental effect upon an employer's interests have been found to constitute disqualifying misconduct.”

Finding that there was substantial evidence in the record that Cody’s behavior represented “a departure from established procedures pertinent to faculty members engaged in similar activities or confronted by like circumstances,” the Appellate Division dismissed her appeal.

The decision is posted on the Internet at:

http://nypublicpersonnellawarchives.blogspot.com/2007/02/disqualifying-misconduct-for-purposes.html

* According to the decision, Cody’s “transgressions include her failure to report the possession of illegal drugs by one of her students, attempts to surreptitiously distribute an unauthorized survey on school property, and 36 instances of improper revisions to student records or transcripts.”