Determining an individual’s “final average salary” for retirement allowance purposes

Determining an individual’s “final average salary” for retirement allowance purposes

Weingarten v NYC Teachers' Retirement System, Ct. of Appeals, 98 N.Y.2d 575

Rhonda Weingarten was employed in the New York City school system. In addition to receiving her base annual salary, she also received hourly compensation -- referred to as "per session" compensation -- for the additional service she provided to the school district. The issue to be resolved in Weingarten’s lawsuit: may these additional earnings be added to the teachers' pensionable salary base for the purpose of determining their final averages salary for retirement purposes or are they barred by the provisions of Section 431 of the Retirement and Social Security Law?

The collective bargaining agreement between the teachers and the New York City Board of Education defines "per session work" as including such assignments as teaching summer school, teaching evening or adult education classes, or working with various athletic and non-athletic extracurricular programs.

Teachers apply these positions and may participate in only one such activity at a time. The teachers are required to submit separate time sheets for their "per session work" and receive payment for their per session work via checks issued in addition to their regular payroll checks.

In the early 1990s, teachers demanded that their "per session" compensation be included in determining their final average salary. The New York City Teachers' Retirement System [NYCTRS] refused consider per session earnings as pensionable compensation.

Weingarten sued NYCTRS, seeking a court decision holding that the System's exclusion of this income from a teacher's base salary calculation for retirement purposes was contrary to Section 13-554 of the Administrative Code and Sections 443(a), 504 and 604 of the Retirement and Social Security Law.

As the Court of Appeals noted, a critical element in determining a retiree's retirement allowance is the computation of the individual's "final average salary" for the purposes of retirement.

Both a State Supreme Court judge and the Appellate Division agreed with Weingarten, ruling that the teachers were entitled to receive credit all per session compensation earned while NYCTRS members in determining their final average salary for retirement purposes since the inception of this 1998 law suit.

Rejecting NYCTRS's argument that its views were entitled to "great weight," the Court of Appeals said that it was simply being asked to resolve a question "of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent." Accordingly, it said it would consider the matter de novo.

The critical arguments presented by the parties respectively were as follows:

1. NYCTRS contended that per session compensation has been outside the scope of the definition of "annual salary" since the inception of teachers' retirement plans and that subsequent legislative modifications to the retirement system -- which have not specifically addressed per session compensation -- did not adjust benefits to include this type of income.

2. Weingarten argued that per session compensation is a form of regular compensation and therefore should be considered in determining a member’s retirement allowance, primarily because per session income is not covered by the exclusions from "annual salary" set forth in the applicable statutes.

The Court of Appeals said that for the purpose of evaluating whether per session compensation is pensionable, it was "guided by several considerations, including the use of the term ‘salary’ in the progression of NYCTRS statutes and regulations, the legislative intent evidenced in the modifications to the programs and the public policy that precludes artificial inflation of income before retirement."

Observing that the term "annual salary" predated the establishment of the NYCTRS as it was used in a predecessor statute that established the New York City Public School Teachers' Retirement Fund in 1917, the court commented that the 1917 Fund and the NYCTRS were designed to provide an income related to actual earnings during employment, "indicating that pensionable income was intended to include more than just anticipated base salary."

The Court of Appeals pointed out that in response to the former practice of including certain one-time or lump sum items of compensation, such as sick leave payments, over-time payments, termination pay and payments for unused vacation credit to enhance a member's final salary prior to his or her retirement, in 1971 the Legislature enacted Section 431 of the Retirement and Social Security Law [Chapter 503, Laws of 1971].

Section 431 explicitly barred a public retirement system of this State from considering the following in determining a member's final average salary:

1. Lump sum payments for deferred compensation, sick leave, accumulated vacation or other credits for time not worked;

2. Any form of termination pay;

3. Any additional compensation paid in anticipation of retirement; and

4. That portion of compensation earned during any twelve months included in such salary base period that exceeded the total compensation paid to the individual during the preceding twelve months by more than twenty per cent.

Although per session compensation was different from the exclusions listed in the first three categories barred by Section 431, the court said that "[c]ategory four would, however, limit pensionable compensation to the extent that the addition of per session income exceeds the statutory cap" and it was therefore necessary for it to consider this type of exclusion in a manner that "accord[s] respect to the[ir] interlocking and interrelated features."

The court's decision: Since the Legislature's exclusion of particular forms of compensation or payments from the calculation of the individual's final average salary "implicates a long-settled principle of statutory construction" -- where the Legislature lists exceptions in a statute, items not specifically referenced are deemed to have been intentionally excluded. Applying this canon of construction in these circumstances, the court said that by failing to exclude per session compensation when it enacted Section 431, "the Legislature evidenced an intent to allow per session compensation to be includable for pension purposes."

Pointing out that this view is consistent with the treatment of "per session" type payments by the New York State Teachers' Retirement System [TRS], which covers teachers in public schools outside of the City of New York, the decision notes that TRS "treats per session compensation as pensionable." The court said that there was "no reasonable basis justifying the disparate treatment of per session compensation by the NYCTRS and ... TRS."

The Court of Appeals also observed that "the highly regulated nature of per session activities prevents artificial manipulation of total compensation in the pre-retirement period" thereby avoiding the type of abuse that Section 431 seeks to bar.

Dismissing a probationary employee

Dismissing a probationary employee

Weintraub v NYC Board of Education, App. Div., 298 A.D.2d 595, Lv. to appeal denied, 99 N.Y.2d 507

The Weintraub case succinctly sets out what could be characterized as "black letter law" concerning the dismissal of a probationary employee.

The New York City Board of Education dismissed probationary teacher David H. Weintraub. Weintraub sued, only to have his petition summarily dismissed by a State Supreme Court judge.

The Appellate Division affirmed the lower court's ruling, indicating that:

As a probationary employee, [Weintraub] could be terminated without a hearing provided that the termination was not in bad faith, a consequence of constitutionally impermissible reasons, or prohibited by statute or case law.

The probationary employee bears the burden of establishing such bad faith or unlawful reason for his or her termination. However conclusory allegations of bad faith are insufficient to meet this burden and apparently all that Weintraub presented was what the court characterized as "conclusory allegations of bad faith."

In addition to confirming the lower court's dismissal of Weintraub's petition without a hearing, the Appellate Division commented that "[t]he termination of the petitioner's employment was not in bad faith or illegal."

The court's reference to the bar of termination prohibited by statute or case law includes the prohibition against terminating a probationary employee during his or her minimum period of probation without notice and hearing.

Where a probationary period has been set in terms of a minimum and a maximum period of probation, case law holds that if the appointing authority elected to terminate a probationary  employee during his or her minimum period of probation, such an individual is entitled to a notice and hearing in the same manner as a tenured individual.

In contrast, a probationer terminated after completing his or her minimum period of probation may be terminated without notice and hearing prior to the completion of his or her maximum period of probation.

Changing vacation scheduling not a mandatory subject of collective bargaining

Changing vacation scheduling not a mandatory subject of collective bargaining
Mtr. of NYS Correctional Officers and Police Benevolent Asso. and Elmira Correctional Facility, PERB Case U-23550

The Board reversed the Decision of the ALJ and dismissed NYSCOPBA's improper practice charge that alleged that the State had violated §209-a.1 (d) of the Act by unilaterally changing the manner in which unit employees working vacation relief are scheduled at the Elmira Correctional Facility.

The Board balanced the interests of unit employees in making plans and scheduling events against the State's need to provide corrections service by filling the vacant job openings through vacation leave and any other vacancies and found that the State's interests predominated.

Because the determination as to whether a particular work rule constitutes a mandatory or nonmandatory subject of bargaining involves identifying the subject matter and then balancing the competing interests of the employer and the employees, the Board concluded that the charge dealt with a nonmandatory subject of negotiations

Disqualification for unemployment insurance benefits

Disqualification for unemployment insurance benefits

Rivera v Commissioner of Labor, 298 A.D.2d 673

As a general rule, termination for misconduct will disqualify an applicant for unemployment insurance benefits. In the Rivera case, the New York City Department of Citywide Administrative Services controverted the claim for unemployment insurance filed by one of its former employees, Emerita Rivera, on the grounds that she had been terminated for misconduct.

The Unemployment Insurance Appeal Board agreed, and ruled that Rivera was disqualified from receiving unemployment insurance benefits because she had been terminated due to her own misconduct. The Appellate Division sustained the Board's determination.

The court pointed out that substantial evidence in the record supported the Board's decision. The Appellate Division noted that the record established that, prior to her termination, Rivera:

1. Refused to perform field-monitoring duties associated with her position as a Contract Specialist II despite being warned that she could be discharged for insubordination is she refused to perform her field duties.

2. That although Rivera had been granted a medical leave of absence, she failed to submit any medical documentation substantiating her request to be placed in a "restricted duties" status.

3. When Rivera was examined by the employer's physicians, the physicians concluded that she was medically and psychologically able to perform the duties of her position.

Under these circumstances, said the court, "we find no reason to disturb the Board's decision" and dismissed Rivera's appeal.

Ordering a hiring freeze

Ordering a hiring freeze
Caputo v Halpin, 160 A.D.2d 938; Motion for leave to appeal dismissed, 76 N.Y.2d 773

From time to time a jurisdiction’s chief executive officer places a “hiring freeze” on appointments to vacant positions in departments and agencies in the jurisdiction. Does he or she need an expressed power to do so?

The Caputo decision involved this question: the truncating of the power of an appointing officer to fill vacant positions in his or her department after the Suffolk County Executive issued an order freezing the filling of vacant county positions in order to avoid an expected budget deficit.

The Appellate Division ruled that:

Within this context, it was well within the power of the Soffolk County Executive to delay the approval of the appointments to the vacancies in the anticipation that there will be a budget deficit and that not filling these vacancies for which funds had been appropriated would be a convenient source to realize savings. The statutory provisions dealing with the avoidance of a deficit make the County Executive, as chief budget officer, the overseer of expenditure of budgeted funds.

In affirming the Appellate Division's ruling, the Court of Appeals referred to its decision in Slominski v Rutkowski, 62 NY^2d 781, a case involving a similar challenge to the Erie County Executive ordering a hiring freeze.

The Court said that despite the lack of an express provision granting the Suffolk County Executive authority to order temporary hiring freezes, a statutory power, by contrast, enjoyed by the Erie County chief executive officer, the rationale in Slominski was applicable in the Suffolk County situation. The Court of Appeals held that "the very broad powers granted the Suffolk County Executive are sufficiently similar to those granted the Erie County Executive [considered] in Slominski to render that case essentially indistinguishable."

Other problems are certain to arise in the context of such an anticipated budget deficit. Among them are the following:

1. Compensation: In Abberbock v Nassau County, a State Supreme Court judge decided that the freeze imposed on expected salary increases, as well as the reduction of salaries, of employees designated managerial or confidential [M/C] in the context of a fiscal crisis "cannot be said ... represents an unreasonable course of conduct or that it is unrelated to an active and manifest evil" insofar as employees designated managerial or confidential were concerned. The Appellate Division agreed.

2. Eligible lists: When deciding Lopez v Barrios-Paoli, the Supreme Court, New York County, considered a number of issues that frequently result when there is a hiring freeze, including the "backing up" of eligible lists. Here the court decided that New York City’s personnel director's extension of earlier lists after a subsequent list had been established, thereby requiring the earlier lists to be certified first for appointment to vacancies, was a discretionary act pursuant to Section 56.1 of the Civil Service Law. Section 56.1 permits the extension of any eligible list in the event of a restriction against the filling of vacancies.

3. Leave from a "hold" position: The status of an individual's leave from his or her "hold item" may lead to difficulties, as the decision by the Appellate Divisions in Dworkin v Dept of Environmental Conservation demonstrates. Such employees may erroneously believe that they are protected in the event of termination because a budget problem because they think that they have a "hold item." As the Dworkin decision demonstrates, sometimes such a belief that they are protected by having a "hold position" is illusory!

In addition, the termination of temporary and provisional employees could result in litigation while the layoff of persons holding a permanent appointment pursuant to Section 80 or 80-a of the Civil Service Law creates significant technical difficulties as well as personal problems for the individuals affected. Also, in some instances provisions in collective bargaining agreements may set out procedural elements that must be honored before a layoff may be instituted by the appointing authority.

Judicial review of administrative decisions

Judicial review of administrative decisions
Albano v NYC Fire Pension Fund, Court of Appeals, 98 N.Y.2d 548

What are the controlling rules to be followed by the courts in cases involving challenges to administrative decisions that concern the interpretation or application of a statute? In the Albano case, the Court of Appeals sets out the criteria used by courts in determining the weight to be accorded such administrative determinations.

The basic rule applied in such cases, said the court, is as follows:

In contrast to matters requiring "pure statutory interpretation" of the controlling law by the courts, where the interpretation or application of a statute "involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data" within the expertise of the agency administering the statute, courts accord great deference to the agency's judgment unless it is "irrational or unreasonable"

Here the statute involved was General Municipal Law Section 207-kk, the so-called Cancer Bill.

Section 207-kk provides that:

Notwithstanding any other provisions of this chapter to the contrary, any condition of impairment of health caused by (i) any condition of cancer affecting the lymphatic, digestive, hematological, urinary or prostate systems ... [of a] member of a fire department in a city with a population of one million or more, who successfully passed a physical on entry into the service of such department, which examination failed to reveal any evidence of such condition, shall be presumptive evidence that it was incurred in the performance and discharge of duty unless the contrary be proved by competent evidence.

Section 207-kk was enacted after medical data demonstrated that there was a high incidence of cancer in firefighters, as compared with the average adult population. The statute creates a rebuttable presumption that a firefighter who develops certain enumerated types of cancers, incurred them in the course of performing his or her duties, thereby eliminating the burden of proving causation.

In other words, the "rebuttable presumption" provided by the Section 207-kk permits the disabled firefighter to establish a prima facie case that his or her cancer incurred as the result of his or her performing firefighter duties. The employer may then attempt to rebut this presumption by introducing evidence that establishes that the cancer was the result of some other cause or does not involve the types of cancers described in the statute.

Emil Albano, a New York City firefighter for 30 years, was diagnosed with testicular cancer. He filed an application for an accident disability pension [ADR] on the ground that his cancer had presumptively been caused by the performance of his firefighting duties. The Medical Board of the New York City Fire Department Pension Fund found that Albano was, in fact, disabled, but recommended he be awarded an ordinary disability retirement allowance [ODR] rather than the ADR retirement allowance for which he had applied.

The reasons given by the Medical Board:

Although Albano is disabled from performing full fire duties due to testicular cancer, there was no evidence that Albano's lymphatic or urinary systems were involved as a result of his medical condition.

The Board of Trustees split on the question and, under its longstanding practice in such situations, the recommendation of the Medical Board was adopted: i.e., Albano's application for ADR benefits was denied but the Medical Board's recommendation that Albano be awarded ODR pension benefits was approved.

The issue before the Court of Appeals:

Was the denial of ADR benefits based on the Medical Board's finding that Albano's testicular cancer is not a cancer "affecting the lymphatic, digestive, hematological, urinary or prostate systems" rational and supported by substantial evidence?

The court said that the decision was both rational and supported by substantial evidence. In this instance the court concluded that the resolution of the issue "involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data” and thus the Board's administrative ruling was entitled to great deference because it was not shown to be either irrational or unreasonable.

In contrast, where, the question is one of pure statutory interpretation there is little basis to rely on any special competence or expertise of the administrative agency, courts "need not accord any deference to the agency's determination" and can undertake its function of statutory construction.

In Albano's case, in order to decide whether Albano was entitled to an ADR pension, the Medical Board and the Trustees were called upon to interpret the applicability of the statute in Albano’s case. This interpretation involved its respective expertise in the evaluation of factual data. Accordingly, said the Court of Appeals, the administrative decision is to be afforded deference.

In addition, the court ruled that because testicular cancer is not enumerated as a cancer entitled to the statutory presumption -- the statute offers presumptive coverage for cancers affecting the lymphatic, digestive, hematological, urinary or prostate systems -- the Board was required to use its medical expertise to decide whether testicular cancer "affects the urinary or prostate systems." Again, this question was a question involving the expertise of the Medical Board and the Retirement Board of Trustees.

Concluding that there was a rational basis for the Medical Board's decision, the Court of Appeals dismissed Albano's appeal.

Decisions of interest involving Government and Administrative Law

Decisions of interest involving Government and Administrative Law
Source: Justia October 7, 2011

Bhatti v. Trustees of Boston Univ.

Court: U.S. 1st Circuit Court of Appeals

Docket: 10-2342

October 3, 2011

Judge: Thompson

Areas of Law: Civil Rights, Labor & Employment Law

Plaintiff, a dental hygienist at defendant's dental health center for more than 10 years, claimed that supervisors subjected her to unpaid work hours because she is black and then to selective discipline and other malfeasance in retaliation for questioning her unpaid hours. The district court entered summary judgment for defendant. The First Circuit affirmed. Plaintiff established only "a litany of petty insults, vindictive behavior, and angry recriminations" that are not actionable.

http://j.st/cyt

Rojas v. The Roman Catholic Diocese of Rochester, et al.

Court: U.S. 2nd Circuit Court of Appeals

Docket: 10-4132

October 4, 2011

Judge: Per curiam

Areas of Law: Civil Rights, Constitutional Law, Labor & Employment Law

Plaintiff appealed from the district court's grant of summary judgment in favor of defendants on her claims of sex discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq, and the New York State Human Rights Law, N.Y. Exec. Law 290-301. The district court granted summary judgment after determining that plaintiff had offered "sham evidence" in opposition to defendants' motions for summary judgment. The court held that the district court did not err in concluding that, in light of plaintiff's inconsistent and contradictory testimony, there was no genuine issue of fact to be decided by a jury. Accordingly, the court affirmed summary judgment in favor of defendants.

http://j.st/cts

American Home Assurance Co, et al. v. Cat Tech L.L.C.

Court: U.S. 5th Circuit Court of Appeals

Docket: 10-20499

October 5, 2011

Judge: Per curiam

Areas of Law: Arbitration & Mediation, Contracts, Insurance Law, Labor & Employment Law

This case arose when Cat Tech sought indemnification from its insurers after Cat Tech damaged several components of a hyrotreating reactor owned by Ergon Refining, Inc. and arbitrators entered an award against Cat Tech for the damage. Insurers subsequently denied the claim, contending, inter alia, that the "your work" exclusion found in the policies precluded coverage for damage to the reactor. The district court found that insurers had no duty to indemnify Cat Tech. The court held that the information contained in the arbitration award was insufficient to properly apply the "your work" exclusion. As such, the court concluded that the district court erred when it relied on the award in granting insurer's summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon's reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech's operations. Accordingly, the judgment was reversed and the case remanded for further proceedings.

http://j.st/pSU

Wesley v. General Drivers, et al.

Court: U.S. 5th Circuit Court of Appeals

Docket: 11-10120

October 5, 2011

Judge: Prado

Areas of Law: Civil Rights, Constitutional Law, Labor & Employment Law

This case involved a claim brought under 42 U.S.C. 1981 by a terminated employee against his former union, which represented him in a grievance hearing in connection with his termination. Plaintiff alleged that defendants discriminated against him on account of his race by failing to argue during the grievance hearing that he was being terminated for a racially discriminatory reason. The court held that plaintiff failed to state a prima facie claim for racial discrimination by the union under section 1981, and therefore the district court was correct to grant defendants' motion for summary judgment.

http://j.st/pJT

Egan v. Freedom Bank

Court: U.S. 7th Circuit Court of Appeals

Docket: 10-1214

October 6, 2011

Judge: WILLIAMS

Areas of Law: Labor & Employment Law

Seven months after the bank recruited plaintiff to serve as a vice presidents, it fired her. She had no performance issues, no attendance problems, and no complaints against her. She had dinner with a member of the board of directors, who told her the fantasies he had about her. She declined his advances and complained to human resources. The board member resigned. Shortly after that, the bank's new president told its then-president that he heard plaintiff had done something that she should have been fired for. About two months after the new president assumed office, plaintiff was fired. The district court entered summary judgment for defendants on her retaliation claims under Title VII, 42 U.S.C. 2000e-3. The Seventh Circuit reversed. A retaliatory discharge case must be tried unless defendant presents unrebutted evidence that it would have taken the adverse employment action against the plaintiff in any case.

http://j.st/p5z

Tactical Stop-Loss, LLC, et al. v. Travelers Casualty and Surety Co.

Court: U.S. 8th Circuit Court of Appeals

Docket: 10-2787

September 30, 2011

Judge: Loken

Areas of Law: Contracts, Insurance Law, Labor & Employment Law

Plaintiffs commenced a diversity action against defendant, asserting claims for breach of the insurance contract and for vexatious refusal to pay. Applying Missouri law, the district court granted defendant summary judgment, concluding that the insurance policy at issue unambiguously excluded losses caused by plaintiffs' CEO, a shareholder, and by plaintiffs' COO, a non-shareholder, acting in collusion with the CEO. The court affirmed and held that the Officer-Shareholder exclusion was consistent with Missouri public policy, and in the alternative, the Officer-Shareholder exclusion was unambiguous and excluded plaintiffs' claim.

http://j.st/cCr

Bledsoe v. U.S. Postal Svc.

Court: U.S. Federal Circuit Court of Appeals

Docket: 11-3054

October 3, 2011

Judge: Linn

Areas of Law: Civil Rights, Government & Administrative Law, Injury Law, Labor & Employment Law

Plaintiff, a mail processing clerk, was injured on-duty in 2005 and received workers' compensation. She partially recovered and, in 2008, the Postal Service provided a modified light duty assignment. In June 2010, pursuant to the National Reassessment Process, the Postal Service informed plaintiff that work within her medical restrictions was no longer available in her commuting area. The Merit Systems Protection Board dismissed her claim under 5 C.F.R. 353.304(c)) of wrongful denial of restoration following partial recovery from a compensable injury. The Federal Circuit affirmed. The Board applied the correct standard in determining its jurisdiction, and its factual determinations were supported by substantial evidence. Plaintiff did not identify any vacant position available within her commuting area that she was able to perform. Plaintiff did not make a non-frivolous allegation that the Service acted arbitrarily in not restoring her, even after the Board ordered her make such a showing and afforded her time to do so.

http://j.st/cyx

Romero v. Dep't of Def.

Court: U.S. Federal Circuit Court of Appeals

Docket: 10-3137

October 3, 2011

Judge: Prost

Areas of Law: Aerospace/Defense, Government & Administrative Law, Labor & Employment Law

In 2006, plaintiff, employed as an auditor at the Department of Defense was removed from his position for failing to maintain his Secret level security clearance. His loss of security clearance was based on his wife's status as a diplomat for Honduras. The Merit Systems Protection Board affirmed. The Federal Circuit affirmed. The DoD complied with its internal procedures in revoking plaintiff's security clearance and the decision was supported by substantial evidence.

http://j.st/cyc

Keane v. Fischetti

Court: Connecticut Supreme Court

Docket: SC18377

March 15, 2011

Judge: Zarella

Areas of Law: Constitutional Law, Injury Law, Labor & Employment Law

These two consolidated appeals arose from the collision of two city fire trucks. As a result of the collision, firefighter John Keane died, and firefighter William Mahoney suffered serious injuries. Monica Keane brought an action against Defendants, the firefighters who drove the trucks, alleging negligence in their operation of the fire trucks and that their negligence caused John Keane's death. In the second case, William and Erin Mahoney filed a complaint against Defendants, two firefighters and the city, alleging that the firefighters were negligent and that their negligence caused William Mahoney to sustain injuries. In both cases, the trial court granted the motions of Defendants to strike all counts of the complaint, concluding that Conn. Gen. Stat. 7-308 barred firefighters who are eligible to receive workers' compensation benefits from bringing negligence actions against other firefighters for their injuries. The Supreme Court affirmed the judgments of the trial court, holding that section 7-308 does not violate equal protection and, therefore, the trial court properly granted Defendants' motions to strike on the ground that the actions were barred by the immunity provision in section 7-308.

http://j.st/cFZ

Mulligan v. Selective HR Solutions, et al.

Court: Georgia Supreme Court

Docket: S10G1899

October 3, 2011

Judge: Hines

Areas of Law: Injury Law, Labor & Employment Law

The court granted certiorari to the Court of Appeals in order to consider whether the Court of Appeals erred in concluding that the State Board of Worker's Compensation exceeded its authority in promulgating its Rule 205. The court held that, contrary to the analysis and resulting conclusion by the Court of Appeals, Rule 205 was not burden-shifting in the manner found and did not interfere with the substantive rights of the parties. The court also held that there was evidence to support the subject ruling that Mulligan did not sustain a subsequent compensable injury. Therefore, the judgment of the Court of Appeals reversing the order of the superior court interpreting Rule 205 was affirmed.

http://j.st/cFj

Franklin Elec. Co. v. Unemployment Ins. Appeals of the Ind. Dep't of Workforce Dev.

Court: Indiana Supreme Court

Docket: 93S02-1102-EX-89

September 29, 2011

Judge: Shepard

Areas of Law: Business Law, Government & Administrative Law, Insurance Law, Labor & Employment Law

Franklin Electric formed two new subsidiaries and started new unemployment experience accounts with a low introductory contribution rate for each one, which equaled about half the experience rating of Franklin Electric. The Department of Workforce Development later canceled the subsidiaries' experience accounts, and all experience balances and liabilities reverted to Franklin Electric. The Department also demanded back payments, interest, and a ten percent penalty. A liability administrative law judge (LALJ) affirmed the Department's determination that the three entities were a single employer but waived the penalty imposed by the Department. The court of appeals affirmed. The Supreme Court granted transfer and vacated the opinion of the court of appeals and affirmed the determination of the LALJ, holding (1) the new subsidiaries were not new employers because they were not distinct and segregable from Franklin Electric; (2) Franklin Electric's experience rating should have applied to contributions made by the subsidiaries; and (3) because there was no evidence suggesting improper conduct on the part of Franklin Electric, the penalty was not appropriate.

http://j.st/cri

City of North Las Vegas v. State Employee-Mgmt. Relations Bd.

Court: Nevada Supreme Court

Docket: 54849

September 29, 2011

Judge: Cherry

Areas of Law: Contracts, Government & Administrative Law, Labor & Employment Law

Eric Spannbauer, a police officer with the North Las Vegas Police Department, was asked to resign by the City Police Department Association. Spannbauer resigned, signing a letter of agreement prepared by the Department. Spannbauer later filed a complaint with the Employee-Management Relation Board (EMRB) against the Association, the City, and the Department, alleging multiple prohibited practices in violation of Nev. Rev. Stat. 288, including gender discrimination. The EMRB found that the City and Department had committed prohibited labor practices and that the Association had breached its duty of fair representation. The City and the Department petitioned the district court for judicial review, which the district court denied. The City, on behalf of itself and the Department, filed an appeal. The Supreme Court affirmed, holding that there was substantial evidence to support the EMRB's finding that the City and Department discriminated against Sannbauer on the basis of his gender in violation of Nev. Rev. Stat. 288.110(1)(f); and (2) the EMRB appropriately disregarded the resignation agreement, including the covenant not to sue, as there was substantial evidence that the agreement was a culmination of prohibited practices in violation of Nev. Rev. Stat. 288.270(1).

http://j.st/cKj

City of North Las Vegas v. Warburton

Court: Nevada Supreme Court

Docket: 55502

October 6, 2011

Judge: Hardesty

Areas of Law: Government & Administrative Law, Injury Law, Insurance Law, Labor & Employment Law

Mallory Warburton was working for the City of North Las Vegas when she was involved in a car accident and suffered numerous injuries. The City started paying workers' compensation benefits to Warburton at a rate of $10 an hour. At the time of the accident, Warburton was expected to make $12 an hour because of a promotion to manager of one of the City's pools. After an administrative appeal, a hearing officer instructed the City to redetermine Warburton's benefits using the $12-an-hour rate of pay for a pool manager. An appeals officer reversed, concluding Warburton's benefits should be based on the $10-an-hour rate of pay she was actually receiving at the time of the accident. The district court reversed the appeals officer's decision. The Supreme Court affirmed, holding that the appeals officer's conclusion was not supported by substantial evidence and that substantial evidence supported the district court's determination that (1) Warburton's primary job at the time of the accident was that of pool manager, and (2) Warburton's workers' compensation benefits must be determined using an average monthly wage calculation at the $12-an-hour rate of pay.

http://j.st/pTW

State ex rel. Mackey v. Dep't of Educ.

Court: Ohio Supreme Court

Docket: 20101405

September 29, 2011

Judge: Per Curiam

Areas of Law: Government & Administrative Law, Injury Law, Labor & Employment Law

Appellant Cerena Mackey was employed by the Ohio Department of Education when she suffered an industrial injury. After she retired from the workforce, Mackey filed for permanent total disability (PTD) compensation. The Industrial Commission of Ohio granted compensation to Mackey. The Department moved for reconsideration, alleging that the hearing officer had made a clear mistake of law in failing to determine whether Mackey's retirement was voluntary or involuntary. The Commission granted the motion and, after a hearing, vacated the award, finding (1) Mackey's retirement was unrelated to her injuries and was hence voluntary, and (2) Mackey's voluntary retirement foreclosed PTD compensation. Mackey filed a complaint in mandamus in the court of appeals, which the court denied. The Supreme Court affirmed, holding that the Commission did not abuse its discretion in (1) reopening the issue of Mackey's PTD eligibility in order to consider the effect of her retirement upon it, and (2) finding that Mackey's retirement was voluntary.

http://j.st/crd

State ex rel. Cinergy Corp. v. Heber

Court: Ohio Supreme Court

Docket: 20101535

October 4, 2011

Judge: Per Curiam

Areas of Law: Government & Administrative Law, Injury Law, Insurance Law, Labor & Employment Law

In 1970, while working for Employer, Employee was injured. In 1989, Employee retired. In 2008, Employee applied for permanent total disability (PTD) compensation. The Industrial Commission of Ohio concluded that Employee was permanently and totally disabled without ruling on the credibility of the assertion that Employee retired because of his injury or determining whether his retirement was voluntary or involuntary. The court of appeals granted Employer a limited writ of mandamus that vacated the Commission's order and ordered the Commission to reconsider the matter. The Supreme Court affirmed the court of appeals, holding that because a voluntary retirement from the work force prior to asserting PTD precludes the payment of compensation for that disability, the court of appeals was correct in ordering further consideration of whether Employee retired because of his injury and whether his retirement was voluntary.

http://j.st/pom

Evans & Assoc. Utility Svcs. V. Espinoza

Court: Oklahoma Supreme Court

Docket: 108017

October 4, 2011

Judge: Kauger

Areas of Law: Labor & Employment Law, Public Benefits

Petitioner Ruben Espinosa sought permanent partial disability benefits for injuries to his hands, arms, and shoulders. The Workers' Compensation Court awarded benefits, but a three-judge en banc panel reduced the award to account for Petitioner's previously awarded benefits for injuries to other parts of his body. The Court of Civil Appeals vacated the panel, determining that both the trial court and the panel misapplied the applicable statute. The Supreme Court granted certiorari to resolve a conflict between two Court of Civil Appeals' opinions with differing interpretations of the limitations provided in the applicable statute. Upon review, the Supreme Court held that when the Workers' Compensation Court awards compensation for an accidental personal injury or occupational disease, pursuant to 85 O.S. 2001 Sec. 22(7), the sum of all permanent partial disability awards is limited to a total of 100% or 520 weeks (10 years) for any individual, but awards against the Multiple Injury Trust Funds, or awards for amputations and surgeries are excluded from both limitations.

http://j.st/cvU

Goodson v. Public Employees Retirement System

Court: Oregon Supreme Court

Docket: S059056

October 6, 2011

Judge: DeMuniz

Areas of Law: Government & Administrative Law, Labor & Employment Law, Public Benefits

Petitioners sought judicial review of a final order of the Public Employees Retirement Board (PERB). They contested the reduction of their retirement benefits as a result of PERB's efforts to recoup benefit overpayments that Petitioners had received because of an erroneous 20 percent earnings credit for 1999. The Court of Appeals certified the matter to the Supreme Court, and upon review of the applicable legal authority, the Supreme Court affirmed PERB's final order.

http://j.st/pSz

Arken v. City of Portland

Court: Oregon Supreme Court

Docket: S058881

October 6, 2011

Judge: DeMuniz

Areas of Law: Government & Administrative Law, Labor & Employment Law, Public Benefits

This opinion consolidated two cases brought before the Supreme Court on certified appeals from the Court of Appeals. Both cases involved the Public Employees Retirement Board's (PERB or the Board) revision or reduction of benefits with respect to "Window Retirees." These cases involved the Board's efforts to recoup overpayments of benefits to retirees that were predicated on a 20 percent earnings credit for calendar year 1999 that the Board approved by order in 2000. PERB sought to recoup these overpayments to the Window Retirees through an overpayment recovery mechanism set out in ORS 238.715.2. A number of members challenged the statutory mechanism for returning the payments, and the methodology the Board used in making its individualized determinations. Upon review, the Supreme Court determined that the trial court correctly granted summary judgment to the "Arken defendants" on all four of the claims raised by the "Arken plaintiffs." Furthermore, the Court determined that the trial court erred in granting summary judgment to the "Robinson petitioners" on their claims for relief. Because the Court concluded that PERB correctly applied ORS 238.715 to recoup overpayments that were made to the Window Retirees based on the 20 percent earnings credit for 1999, the Court also determined that the trial court erred in denying PERB's cross-motion for summary judgment.

http://j.st/pTE

Workers Comp. Fund v. Argonaut Ins. Co.

Court: Utah Supreme Court

Docket: 20100211

October 4, 2011

Judge: Parrish

Areas of Law: Contracts, Injury Law, Insurance Law, Labor & Employment Law

The underlying dispute in this appeal revolved around the issue of who was contractually obligated to pay workers' compensation benefits to an employee of Employer. The Supreme Court found that Employer's Insurer was required to pay workers' compensation benefits for all of Employer's employees and remanded the case. The district court entered a final judgment. Instead of filing a notice of appeal within thirty days of the district court's judgment, Insurer filed an "objection to judgment." Insurer then filed its notice of appeal within thirty days of the district court's order disposing of that motion. The Supreme Court dismissed the appeal, holding that it lacked jurisdiction to address the appeal as (1) Insurer did not file its notice of appeal within thirty days of the district court's final judgment, and (2) Insurer failed to file a postjudgment motion that would toll the time for appeal or one that the Court had jurisdiction to review.

http://j.st/p5F

Injury on the job may not qualify for accidental disability retirement benefits

Injury on the job may not qualify for accidental disability retirement benefits
Silver-Smith v McCall, 298 AD2d 696

Fred Silver-Smith, a court officer, applied for accidental disability retirement benefits as a result of an injury that he sustained in the course of physically restraining and removing an unruly prisoner from the courtroom where he was working. His application was rejected by the Employees' Retirement System because "the incident involved a risk inherent in [Silver-Smith's] employment and did not constitute a qualifying accident as that term is used in Retirement and Social Security Law Section 605-a."

Quoting from McCambridge v McGuire, 67 NY2d 563, the Appellate Division said that for the purposes of establishing a valid claim for an accidental disability retirement benefit, the individual must demonstrate that he or she was the victim of "a precipitating accidental event ... which was not a risk of the work performed."

Since Silver-Smith's injury was conceded to have occurred as the result of his having restrained a person who was threatening the peace and security of a court proceeding, and this activity was a regular, though infrequent, part of his duties, the court ruled that his injury "resulted from a recognized risk inherent in [Silver-Smith's] normal duties and thus was not an accident within the ambit of the statute."

Although the specific outburst which required Silver-Smith's intervention in this instance was abrupt and unexpected, the court said that the "maintenance of order by restraining unruly persons in the courtroom was a recognized part of his normal duties." Accordingly, the Appellate Division ruled that there is substantial evidence supporting the Comptroller's determination that Silver-Smith did not qualify for accidental disability retirement benefits.

State Insurance Fund penalized for unilaterally discontinuing claimants workers’ compensation benefits

State Insurance Fund penalized for unilaterally discontinuing claimants workers’ compensation benefits

Matter of Gillan v New York State Dept. of Corrections, 2011 NY Slip Op 06959, Appellate Division, Third Department

Dennis Gillan, correction officer employed by the New York State Department of Corrections suffered a work-related injury and was receiving workers’ compensation benefits from the State Insurance Fund [SIF], the Department’s workers' compensation carrier based on a determination that he had a “permanent partial disability.”

SIF, however, subsequently unilaterally stopped paying compensation benefits to Gillan on the basis that a "fraud referral" concerning Gillan had been submitted by the Orange County District Attorney's office. It is undisputed that all criminal charges stemming from this referral were dismissed.

Gillan, alleging that SIF had improperly suspended compensation payments without following proper procedures, was awarded back benefits by a Workers’ Compensation Law Judge and the SIF was penalized the Fund for the unilateral suspension. Ultimately the Law Judge scheduled a hearing on the issue of whether Gillan had fraudulently filed claims for workers’ compensation benefits and found that he had not violated Workers' Compensation Law §114-a. The Workers’ Compensation Board affirmed the Law Judge’s decision and both the Department and SIF appealed that ruling.

In response to the Department’s and SIF’s appeal from the Board’s decision, the Appellate Division held that the Board’s decision regarding an alleged violation of Workers’ Compensation Law §114-a “will not be disturbed if substantial evidence supports it” and dismissed the appeal.

The court found it “significant that the Board, which ‘is the sole arbiter of witness credibility’ credited both [Gillan’s] testimony and the extensive medical proof in the record establishing his partial disability.”

The Appellate Division then examined the Department’s and SIF’s remaining arguments, including their contention that the Board erred in not finding that Gillan voluntarily withdrew from the workforce and their challenge to the denial of the Department’s application for full Board review and found them “to be unpersuasive.”

The court also noted that although SIF was provided with an opportunity to have Gillan reexamined by an independent medical examiner, it did not do so and instead chose to have the medical practitioner review Gillan’s medical file and videotaped surveillance footage. In the absence of an actual physical examination, the Worker’s Compensation Board specifically found the resulting report “to be of little weight” and declined to credit it.

NYSUT not a public employer within the meaning of the Taylor Law

NYSUT not a public employer within the meaning of the Taylor Law
Mtr. of Curtis Birthwright and NYSUT, PERB Case U-26457

The Board affirmed the Decision of the Director of Public Employment Practices and Representation (Director) dismissing as deficient Birthwright's improper practice charge alleging that NYSUT violated §§209-a.1(a), (b) and (c) and 209-a.2(a), (b) and (c) of the Public Employees' Fair Employment Act (Act). The Director dismissed the alleged violations of §209-a.1 of the Act as NYSUT is not a public employer within the meaning of the Act and the §209-a.2 allegations as NYSUT is not a public employee organization and owes no duty of fair representation to Birthwright. The Board reiterated that timely service upon other parties is a component of timely filing and that exceptions that have not been timely served will be denied, even if no objection to failure of service is received from the other parties to the proceeding. Birthwright filed exceptions with the Board on January 31, 2006, however, his exceptions were not served on NYSUT until March 2, 2006. The exceptions, not having been timely served on NYSUT, were denied. 

Judicial review – credibility of a witness

Judicial review – credibility of a witness
Danahy v Kerik, 298 A.D.2d 278

Assuming a public employer follows proper procedure, what must be shown to sustain discipline it invoked under Section 75 of the Civil Service Law? Historically the courts have indicated that as long as there is substantial evidence supporting the finding(s) of fact and that the disciplinary penalty imposed did not violate the Pell standard, they will not disturb the decision of the employing body.

Under the Pell standard, the Court will not substitute its judgment as to appropriate disciplinary action for that of the employing body unless the discipline is so harsh as to "shock one's sense of fairness."

What happens, however, when there is an issue concerning the credibility of a witness's testimony? In Danahy, the Appellate Division reaffirmed its long-standing position that it will not overrule a hearing officer who decides to credit one witness's testimony over another's. In other words, the trier of the case's decision as to creditability will prevail unless the challenging party can demonstrate that such reliance was manifestly improper, a difficult task at best.

Disciplinary charges alleging misconduct were filed against a New York City police officer, Kevin Danahy. The hearing officer found Danahy guilty of the charges -- he used excessive force in making an arrest -- and recommended that Danahy be suspended for 20 days without pay. The Police Commissioner accepting the hearing officer's findings and recommendation.

Danahy had testified that he didn't strike or otherwise injure the complainant, but rather he and the complainant merely fell to the ground while the complainant was flailing his arms in an attempt to avoid being handcuffed. The hearing officer, however, rejected Danahy's version of the event and found him guilty of the charges.

Danahy commenced an Article 78 proceeding challenging the ruling, contending that (1) the decision wasn't supported by substantial evidence and that (2) the discipline imposed violated the Pell Standard. The Court said that it would not disturb the hearing officer's determination as to the credibility of witnesses and that the 20-day suspension did not violate the Pell Standard.

Typically the courts will consistently defer to a hearing officer with respect to the determinations concerning the credibility of the witness testifying in a Section 75 disciplinary hearing. Essentially, where the court determines that there is substantial evidence to support the hearing officer's findings and establish guilt, the critical question becomes whether or not the penalty imposed reasonable under the circumstances.

In this instance the Appellate Division held that a suspension for 20 days without pay "did not shock its sense of fairness" and sustained the Commissioner's determination.

Termination of an employee during a probationary period or traineeship

Termination of an employee during a probationary period or traineeship
Dasey v Anderson, CA1, 304 F.3d 148

What are the rules governing the dismissal of a person permanent appointed to his or her position during his or her probationary period?

Are the same principles applied in cases involving an individual who is required to satisfactorily complete a traineeship as a condition of employment?

The Dasey case provides an opportunity to consider these questions.

The individual was dismissed from his position as a probationary state trooper on the grounds that he made a material misstatement in his employment application.

According to the U.S. Circuit Court of Appeals' decision, the individual had satisfactorily completed his training at the Massachusetts State Police Academy and was enlisted as a probationary uniformed member of the Massachusetts State Police [MSP]. In the course of completing his employment application for State Trooper, the trooper stated that he did not use illegal drugs and, during the preceding five-year period, had not "used, possessed, supplied or manufactured any illegal drugs."

On September 14, 1999, while the trooper was still in probationary status, MSP's review of a videotape that had been seized by state troopers while executing a search warrant in an unrelated homicide investigation. The videotape "revealed Dasey and others apparently smoking marijuana." MSP deemed Dasey as having made a false material statement when he denied prior drug use during the application process and he was given a "general discharge" from the MSP effective close of business September 14, 1999.

Dasey sued MSP, claiming it had violated federal and state laws by failing to provide him with a pre-termination hearing. A federal district court judge granted MSP's motion for summary judgment dismissing Dasey's petition, explaining that while in probationary status Dasey had no reasonable expectation of continued employment and thus he had no constitutionally protected property interest in his job. The Circuit Court of Appeals affirmed the District Court's ruling.

Dasey also contended that he was entitled to a hearing was based on a provision in the collective bargaining agreement [CBA] negotiated by the MSP and the union. The CBA included a "bargained-for extension of the right to a pre-termination hearing" to all troopers. In response to this argument the Circuit Court of Appeals held that:

Because neither the collective bargaining agreement nor the MSP's customs and practices provided Dasey with a reasonable expectation of continued employment, he had no constitutionally protected property interest in his job. Absent such an interest, he had no right to a pre-termination hearing.

The general rule in New York State is that a permanent appointee whose employment is subject to the disciplinary provisions set out in Section 75 of the Civil Service Law is entitled to notice and hearing before he or she may be terminated for disciplinary reasons. While serving his or her probationary period, however, an individual permanently appointed to such a position may be dismissed without notice and hearing for any lawful reason after he or she has completed the minimum period of probation and prior to the end of his or her maximum period of probation.

In contrast, if the appointing authority wishes to dismiss a probationary employee before he or she has completed the minimum period of probation, the courts have held that the individual is entitled to notice and a pre-termination hearing.

Another factor might be relevant in cases of probationary employment - traineeship requirements.

In Franks v South Beach Psychiatric Center, Supreme Court, Richmond County, the interrelationship between temporary service, permanent appointment, trainee status and probation was considered.

Franks had been appointed as a Mental Hygiene Therapy Aide Trainee. This appointment involved the satisfactory completion of a one-year training period.

Because of outstanding preferred lists, Franks was initially appointed to his position as a temporary employee pending canvass of the preferred lists and he commenced his "traineeship" in the position. On January 21, 1984, some three months later, Franks was "permanently appointed" to the position, subject to the successful completion of a 52-week probationary period.

On January 2, 1985 Franks was terminated from his position without any hearing because of his alleged failure to satisfactorily complete the probationary period.

Franks claimed that his period of probation had to coincide with his training period and since he had completed his training period in October 1984, he was not a probationary employee at the time of his termination. Accordingly, he argued, he could not be discharged without notice and hearing.

The Appellate Division ruled that there was no merit to Franks' argument. Why? Because, explained the court, under the controlling probationary rules, the probationary period for a trainee is from 26 to 52 weeks or the length of the training period, which ever is longer. As Frank's permanent appointment did not become effective until January 21, 1984, (at which time he was still a trainee) his 52-week probationary period would not end until January 20, 1985. Accordingly, his termination without any hearing on January 2, 1985, was made while he was still a probationary employee and was therefore lawful.

The Franks decision supports the proposition that a traineeship and the probationary period are two different conditions of employment For example, a trainee may be serving as a provisional employee, complete the traineeship, and later take and pass the required examination and subsequently be appointed on a permanent basis.

His or her required probationary period pursuant to Section 63 of the Civil Service Law would commence upon the individual's permanent appointment to the position, notwithstanding the fact that he or she may have already successfully completed the required traineeship.

By the same token, if a traineeship extends beyond the probationary period, the individual may be subject to termination without notice and hearing if he or she fails to complete the traineeship satisfactorily.

Another case that distinguishes between probationary status and traineeship status is Sergeants v Brooklyn Developmental Center, 56 NY2d 628.

In Sergeants, a number of probationary employees were terminated at the end of their respective probationary periods. They sued for reinstatement contending that they had not been provided with the 200 hours of training required by department regulations.

Dismissing their appeal, the Court of Appeals first affirmed the principle that "... the employment of a probationary employee may be terminated at the end of the probationary term without a hearing and without specific reasons being stated."

The court then rejected Sergeants' "traineeship argument," commenting that the mandated training involved would not have addressed the particular demonstrations of poor performance leading to their respective terminations. The evidence in the record, said the court, indicated that the poor performance was related "to fitness for the position" rather than job performance elements that the training provided for by regulation could remedy.

Among the examples of poor performance cited by the court were sleeping on the job, habitual lateness, unscheduled absence, failure to perform overtime assignments and similar poor work habits.

The decision also indicated that the only issue for review was whether the appointing officer acted in good faith in terminating the employee.

The lesson here: Satisfactory completion of probation and satisfactory completion of a traineeship are two different requirements that must be met by the appointee and he or she must satisfy both in order for a permanent appointee to be continued in service.

Where the successful completion of a traineeship is required in order to be continued in service, however, that condition should be communicated to the individual in the examination announcement or in the offer of his or her appointment to the position.

As to the authority for requiring the completion of a traineeship, the rules of the State Civil Service Commission concerning traineeships are set out in 4 NYCRR 4.3 and provide as follows:

Section 4.3 Trainee appointments and promotions. The Civil Service Department may require that permanent appointments or promotions to designated positions shall be conditioned upon the satisfactory completion of a term of service as a trainee in such a position or in an appropriate, lower, training title or the completion of specified training or academic courses, or both. The period of such term of training service shall be prescribed by the department. Upon the satisfactory completion of such training term, and of specified courses if required, an appointee shall be entitled to full permanent status in the position for which appointment was made. Any appointment hereunder shall be subject to such probationary period as is prescribed in [Section 4.5 of] these rules. Also, the employment of such person may be discontinued at the end of the term of training service if his conduct, capacity or fitness is not satisfactory, or at any time if he fails to pursue or continue satisfactorily such training or academic courses as may be required.

Many municipal civil service commissions have adopted similar rules concerning traineeships.