Arbitration award sustained absent proof that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power

Arbitration award sustained absent proof that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power

Shenendehowa Cent. Sch. Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864), 2013 NY Slip Op 00885, Court of Appeals

A school bus driver [Driver] tested positive for marijuana after submitting to a random drug test. This resulted in the School District's terminating Driver from the position, which action was ultimately submitted to arbitration.

The issue presented to the arbitrator: Did the termination of Driver violate the collective bargaining agreement between the parties and, if so, what is the appropriate remedy?

The arbitrator concluded that the School District had violated the agreement and that the penalty imposed on Driver, dismissal, was too severe. The arbitrator directed the School District to reinstate Driver without back pay, subject to certain conditions including an evaluation by a substance abuse professional and a negative drug test.*

The School District filed an CPLR Article 75 petition seeking to vacate that portion of the arbitration award directing that it reinstate Driver to the position of school bus driver and to modify the award by imposing the penalty of termination, contending that Driver had violated the School District’s “zero drug tolerance” policy.

Supreme Court granted the School District’s Article 75 petition seeking to vacate an arbitration award thus  reinstating the School District's decision to terminate Driver's employment with the district.

The Appellate Division vacated the Supreme Court’s ruling, finding that the award was not against public policy, was rational, and in making the award the arbitrator did not exceed his powers, holding that “Supreme Court should have confirmed the arbitration award.” The Appellate Division explained that “If a matter is submitted to arbitration, reviewing courts should not interpret substantive conditions of the agreement or delve into the merits of the dispute.”

Citing Matter of Grasso, 72 AD2d 1463 [Leave to appeal denied, 15 NY3d 703], the court said that "Courts must give deference to an arbitrator's decision and cannot examine the merits of an arbitration award, even if the arbitrator misapplied or misinterpreted the law or facts, but a court may vacate an award [where it] violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power."

Further, the Appellate Division stated that "[W]here an agreement is 'reasonably susceptible of the construction given it by the arbitrator, a court may not vacate the award," citing Matter of Albany County Sheriffs Local 775 of N.Y. State Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO [County of Albany], 27 AD3d 979.

The Court of Appeals agreed with the Appellate Division’s ruling, noting that it has recognized three narrow grounds that may form the basis for vacating an arbitrator's award, repeating the Appellate Division’s criteria that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power, commenting that none of these grounds had been established by the School District in this action.**

Specifically the high court ruled that:

1. The arbitrator's decision did not exceed a specific limitation on his power; nor was it irrational.

2. Contrary to the School District's argument, the parties' agreement did not require the penalty of termination in these circumstances and

3. That the District did not in fact have a zero tolerance policy in place.

According, said the court, the arbitrator’s determination that Driver’s “reinstatement with conditions” was the appropriate penalty did not violate public policy. Although, said the court, “reasonable minds might disagree over what the proper penalty should have been [this] does not provide a basis for vacating the arbitral award or refashioning the penalty...."

Significantly the Court of Appeals noted that the arbitrator “determined that, contrary to the School District's argument, the parties' Taylor Law agreement did not require the penalty of termination in these circumstances and that the District did not in fact have a zero tolerance policy.” This suggests that had the Taylor Law agreement provided for termination in the event the employee tested positive for an unlawful drug or if the School District had a written "Zero Tolerance" drug policy known to Driver in place at the time Driver tested positive for an unlawful drug, the School District would have prevailed.

* The decision notes that “This effectively imposed, at that time, a six-month unpaid suspension” on Driver.

** Article 75 of the CPLR sets out other grounds, not relevant in this action, for a court's vacating an arbitration award.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00885.htm

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The timely filing of a “notice of claim” may be a condition precedent when suing the individual’s public employer

A timely filing of a “notice of claim” may be a condition precedent when suing the individual’s public employer

This action involved a claim of “fraudulent inducement” wherein the employee claimed that she was “induced … to accept a promotion” that resulted in her loss of union protection and other benefits as well as the imposition of a one-year probationary period.

When the employee was terminated from the new position prior to the end of the probationary period, she filed a petition alleging “fraudulent inducement.”* Supreme Court dismissed this allegation, holding that the notice of claim that had been filed pursuant to General Municipal Law §50-e was untimely.

The Appellate disagreed with this result, explaining that “An action based upon fraud accrues for purposes of General Municipal Law §50-e when the fraudulent act is committed or when ‘the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it,’ whichever occurs later,” citing CPLR §213[8].  Otherwise, said the Appellate Division, municipalities would have an incentive to conceal the damages and, or, injuries stemming from a fraudulent act until the 90-day period under §50-e had passed, leaving potential plaintiffs with no recourse aside from an application for leave to serve a late notice of claim.

In this instance, said the court, the petitioner was unable to assert a cause of action for fraudulent inducement until she sustained damages resulting from the fraud, i.e., when she was terminated from her new position during its probationary period. She did, however, timely served her notice of claim within 90 days of her termination.

The court, however, agreed Cayuga’s alternative ground for affirmance of the Supreme Court’s ruling -- the complaint should have been dismissed because plaintiff failed to plead with sufficient particularity the facts underlying her fraudulent inducement claim as required by CPLR 3016(b).

As the plaintiff had, in fact, failed to satisfy the requirements of CPLR 3016(b), the Appellate Division held that Supreme Court “properly dismissed the complaint to the extent that it was not withdrawn by plaintiff,” but noted that "[t]he dismissal . . . [was] without prejudice to an application by plaintiff to Supreme Court for leave to serve an amended complaint with regard to th[e] cause of action [for fraudulent inducement]."

In contrast, a notice of claim pursuant to Education Law §3813(1) is not a condition precedent to an Article 78 proceeding seeking to vindicate a public interest [Matter of Cayuga-Onondaga Counties Bd. of Coop. Educ. Servs., 89 NY2d 395]. As it is well settled that the tenure rights of teachers are a matter of public interest, the notice of claim provisions of Education Law §3813(1) are not applicable to cases seeking to enforce such [Sephton v Board of Educ. of City School Dist. of City of New York, 99 AD2d 509, 510 (2d Dept), appeal denied 62 NY2d 605].

Another aspect of summary termination to consider: in a disciplinary action typically an aggrieved party has a statutory** or Taylor Law contract right to appeal an adverse determination by the appointing authority or an arbitrator or arbitration panel.

A temporary or provisional employee or probationary employee*** who has completed his or her minimum period of probation does not have a statutory right to appeal his or her termination except where he or she alleges the dismissal was in violation of his or her constitutional rights or was unlawfully discriminatory. 

* The plaintiff had withdrawn other causes of action, maintaining only the claim alleging fraudulent inducement.”

** See, for example, §76 of the Civil Service Law and §3202-a.5 of the Education Law. Appeals under §76 may be appealed to the responsible civil service commission [within 30-days of the decision] or as provided by Article 78 of the CPLR while §3202-a.5 appeals are to filed pursuant to Article 75 of the CPLR but must be filed within 10 days of the determination of the arbitrator or the arbitration panel.

*** In some instances a probationary employee may have a contractual right to challenge his or her termination as set out in a Taylor Law agreement.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00840.htm

Some procedural requirements to keep in mind when filing an appeal to the Commissioner of Education

Some procedural requirements to keep in mind when filing an appeal to the Commissioner of Education

Appeal to the Commissioner of Education, Decision No. 16,455

According to the decision, the petition submitted in this appeal to the Commissioner of Education consisted of a request for an investigation. Included with the petition were various exhibits such as “a collection of letters, emails, Facebook postings, petitions, and questions presented to the [school] board.”

Initially the Commissioner noted that a petition must contain “a clear and concise statement of the petitioner’s claim showing that the petitioner is entitled to relief, and shall further contain a demand for the relief to which the petitioner deems himself [or herself] entitled,” citing 8 NYCRR §275.10.

Further, cautioned the Commissioner, the statement must be sufficiently clear to advise a respondent of the nature of petitioner’s claim and of the specific act or acts complained of. In the event a petition fails to state a comprehensible claim and fails to identify the specific remedy sought, it will be dismissed

In the event a petitioner is not represented by counsel the Commissioner noted that “a liberal interpretation of this regulation is appropriate absent prejudice to the opposing party.

The Commissioner however dismissed this appeal as untimely. Although the petitioner conceded that she had not filed the appeal within 30 days from the making of the decision or the performance of the act complained of, she asked the Commissioner to excuse her delay contending that “she could not gather documents needed to file her appeal.”

While a delay may be excused by the Commissioner “for good cause shown,” in this instance the Commissioner said that he found “no basis to excuse petitioner’s delay” and ruled that the appeal must be dismissed as untimely.

Commenting on the relief sought, the Commissioner commented that the only relief the petitioner sought was an investigation into the school board's and certain administrators' alleged “inappropriate decisions, actions, and lack of leadership and accountability....”  

However, an appeal to the Commissioner is appellate in nature and does not provide for investigations. Accordingly it appears that even had this appeal been timely filed, it would have been dismissed because, in the words of the Commissioner, “the sole relief sought by petitioner is beyond the authority of the Commissioner to grant."

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume52/d16455.html

Employee’s lack of remorse concerning activities leading to disciplinary action does not always mandate imposing termination as the penalty

Employee’s lack of remorse concerning activities leading to disciplinary action does not always mandate imposing termination as the penalty

City of New York v Organization of Staff Analysts, 2013 NY Slip Op 00806, Appellate Division, First Department

The Appellate Division affirmed Supreme Court’s denial of the City of New York’s petition to vacate an arbitrator’s award imposing a penalty of a one-year suspension without pay rather than termination of the employee.

The employee had been charged with accessing the personnel files of two co-workers.

The Appellate Division said that although and arbitrator’s award “can be overturned where it is directly contrary to a settled public policy,” citing UFT Local 2 v Board of Education, 1 NY3d 72. The court said that imposing a one-year suspension without pay rather than termination did not violate “the policy of protecting confidential information.”

Further, explained the court, the imposition of a penalty short of termination did not render the award irrational, rejecting the City’s argument that there was a possibility that the employee “will re-offend, especially where there has been no criminal conviction and there is a clear, substantial penalty imposed to deter such future conduct.”

The City had cited Binghamton City School District, 46 AD3d 1042, in support of its contention that termination was the appropriate penalty in this instance. In Binghamton the Appellate Division held that a “school teacher's lack of remorse or understanding of moral aspect of inappropriate relationship with teen student required termination until counseling or other remedial steps taken.”

Although the Appellate Division noted “the employee's lack of remorse,” it held that although “relevant to the risk of recidivism,” in this instance such lack of remorse  “did not rise to the level in the cases relied upon by the City.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00806.htm

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week ending February 10, 2013 [Click on text highlighted in bold to access the full report] 

DiNapoli Reaches Agreement with Cabot Oil and Gas to Disclose Policies on Hydraulic Fracturing Fluid

New York State Comptroller Thomas P. DiNapoli announced that Cabot Oil and Gas Corporation has agreed to publicly disclose its policy and procedures for eliminating or minimizing the use of toxic substances in its hydraulic fracturing fluids. As a result of the agreement, DiNapoli has withdrawn his shareholder proposal submitted for the company’s 2013 proxy statement calling for a report on the use of these substances in Cabot’s shale energy operations.

DiNapoli: Special Education Providers Charged Taxpayers for Excessive Salaries and Personal Items

The owners of two Manhattan–based special education providers claimed more than $500,000 in expenses to which they were not entitled, including extra money for their salaries, vehicle costs and personal expenses, as well as bonuses for staff that could not be justified, according to two audits released Thursday by New York State Comptroller Thomas P. DiNapoli. The audit findings are being considered for referral to law enforcement.

DiNapoli: Court Allows Securities Litigation Class Action Against BP To Move Forward

New York State Comptroller Thomas P. DiNapoli commended a Houston federal judge’s decision to allow a securities class action case against BP plc to go forward. “We are pleased that the New York State Common Retirement Fund’s claims on behalf of BP’s investors will proceed,” DiNapoli said. “Shareholders saw their investments plummet in value following the Deepwater Horizon catastrophe. Now information has come to light that BP was wholly unprepared to respond to the risks of its deep sea operations and incapable of adequately reacting when something went wrong.”

DiNapoli Receives Hubert H. Humphrey Humanitarian Award

State Comptroller Thomas P. DiNapoli received the Hubert H. Humphrey Humanitarian Award in recognition of his lifetime of public service to the state of New York and its citizens. The award was presented at the United Federation of Teachers’ annual Greater Metropolitan New York Social Studies Conference at which DiNapoli delivered the luncheon keynote address.

DiNapoli: Gloversville Faces Fiscal Challenges

Long–term population loss continues to limit economic growth in the city of Gloversville, according to a report issued by State Comptroller Thomas P. DiNapoli. City officials, however, have established critical rainy day funds by controlling the growth in spending, which helped lead to a recent upgrade to the city’s credit rating. The report is the latest in a series of fiscal profiles on cities across the state released by the Comptroller’s office.

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli announced his office completed audits of:

the Town of Bangor;

the Town of Black Brook;

the Town of Florida;

the Jericho Fire District;

the City of Mechanicville;

the Town of Olive; and,

the Watertown Housing Authority.

Evidence that the employee was clearly aware of the employer’s policy defeats argument that the policy was not set out “in writing”

Evidence that the employee was clearly aware of the employer’s policy defeats argument that the policy was not set out “in writing”

Matter of Osborne (Commissioner of Labor), 2013 NY Slip Op 00370, Appellate Division, Third Department

 The Unemployment Insurance Appeal Board ruled that claimant was disqualified from receiving unemployment insurance benefits because his employment was terminated due to misconduct.

The individual had been counseled by his supervisor about having inappropriate relationships in the workplace. Notwithstanding this, he became involved in a relationship and was issued a written disciplinary warning notice at that time, which stated that the relationship was a clear violation of the standards that he was counseled on earlier and that any further infractions in this regard would result in his termination.

Although the individual apparently briefly ended the relationship, it was subsequently resumed and his employment was terminated.

The Appellate Division affirmed the Unemployment Insurance Appeal Board decision disqualifying the individual for unemployment insurance benefits, explaining that "A knowing violation of an employer's established policy or reasonable request may constitute disqualifying misconduct, particularly where, as here, the claimant has received prior warnings about similar behavior."

While the court noted that the employer’s policy in question was not in writing, the individual was clearly aware of the policy as he signed a warning letter affirming his understanding of it.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00370.htm

Employee found guilty of uploading confidential medical information viewed while at work on Facebook terminated

Employee found guilty of uploading confidential medical information viewed while at work on Facebook terminated

The Appellate Division affirmed the dismissal of an Emergency Medical Services Supervisor by the Commissioner of the New York City Fire Department for misconduct, ruling that the Commissioner’s determination that the Supervisor was guilty of violating departmental regulations was supported by substantial evidence.

The EMS Supervisor had admitted photographing a computer terminal’s screen showing confidential and privileged information received during a 911 call concerning a medical emergency, as well as the 911 caller's name, address and telephone number, and then uploading the image to his Facebook account, with the caption "[c]an't make this up."

The decision states that approximately 460 of the Supervior’s Facebook "friends" had access to the posting.

Further, said the Appellate Division, at the time of the posting the EMS Supervisor understood that divulging such patient information was in violation of departmental rules, as well as a serious breach of trust.

Considering the “serious nature” of the Supervisor’s misconduct, the court said that the penalty imposed, dismissal,  did not shock its sense of fairness, citing Kelly v Safir, 96 NY2d 32 and  Berenhaus v Ward, 70 NY2d 436.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00437.htm