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 March 31, 2013 [Click on text highlighted in bold to access the full report] 

DiNapoli: Best Buy and Bed Bath & Beyond Agree to Promote Sustainable Business Practices With Suppliers

New York State Comptroller Thomas P. DiNapoli Friday announced agreements with Best Buy and Bed Bath & Beyond to encourage their suppliers to report on workplace safety, human and worker rights and environmental compliance.

DiNapoli: Rensselaer County Employee Stole $200,000

Poor financial controls allowed a county employee to bilk Rensselaer County out of $208,597 over a six–year period, according to an audit released Tuesday by State Comptroller Thomas P. DiNapoli. The former employee was charged in July with grand larceny, falsifying business records and defrauding the government. The extent of her fraud, however, was not determined until county officials contacted DiNapoli’s office requesting a full audit.

State Pension Fund Invests $3.4 Million in Auburn Armature

New York State Comptroller Thomas P. DiNapoli announced Thursday that DeltaPoint Capital Management has acquired a majority stake in Auburn Armature, Inc., an electrical products distributor, manufacturer, and service company in Cayuga County. The New York State Common Retirement Fund is an investor in DeltaPoint through the In–State Private Equity Program.

DiNapoli: State Contractor Underpaid Workers More Than $82,000; CUNY Failed to Monitor Vendor

A vendor with blanket approval to sell audio visual equipment to public entities admitted underpaying its employees at least $82,000 by ignoring prevailing wage laws, according to an audit released Monday by State Comptroller Thomas P. DiNapoli.

ORDA’s Ongoing Fiscal Challenges Prompt DiNapoli Audit

State Comptroller Thomas P. DiNapoli will launch a full financial audit of the Olympic Regional Development Authority after a report by his office found that financial issues persist at a time when its operations have been expanded to include the Catskills–based Belleayre Mountain Ski Center.


Comptroller DiNapoli Releases School Audits

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

the East Moriches Union Free School District;

the Liberty Central School District;

he Rotterdam–Mohonasen Central School District; and,

the Wayne Central School District.

Audits published by New York State's Comptroller Thomas P. DiNapoli

Audits published by New York State's Comptroller Thomas P. DiNapoli 

Issued during the week ending March 29, 2013 [Click on the caption to access the full report]

Department of Health, Medicaid Claims Submitted by Accordis Inc. on Behalf of HHC (2011-S-29)
Healthcare providers submit Medicaid claims to the Department of Health’s eMedNY claims processing system for payment of their services. For various reasons, eMedNY denies payment of many claims. Claims that are denied can be modified and resubmitted to eMedNY for payment. In March 2005, HHC hired Accordis to provide billing services for HHC-affiliated providers. For the three-year period ended Dec. 31, 2010, Accordis submitted 192,296 claims totaling more than $26.2 million on behalf of HHC providers. Auditors found eMedNY does not provide a mechanism for associating a paid claim to its previously denied claim. As a result, auditors could not determine whether changes made by Accordis to previously denied claims were appropriate.

Department of Health, Medicaid Overpayments for Non-Emergency Out-of-State Inpatient Services (Follow-Up) (2012-F-25)
In an initial report, auditors found that for the period May 1, 2002 through April 30, 2009, Medicaid made potential overpayments totaling $9.2 million to out-of-state hospitals. Auditors further identified $10.8 million in claim payments for which DOH had not granted the required prior approvals. In a follow up report, auditors found DOH made progress in addressing those issues.

Office of the Attorney General, Accounts Receivable Collections (2011-S-25)
Auditors determined OAG’s Civil Recoveries Bureau was generally effective in its collection of accounts receivable referred by state agencies. Auditors recommended the bureau enhance its collection actions through computer matches with state and New York City payrolls to locate debtors.

As part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, auditors looked at travel expenses for the highest-cost travelers in the state for the following state entities:

State University of New York, The College of Fredonia - Selected Employee Travel Expenses (2012-S-138)
Two of these employees worked at the College at Fredonia and had travel costs totaling $689,762. Auditors also examined other travel expenses including three employees with outliers in air and train fares that totaled $148,505. The travel expenses for the five employees were documented and adhered to state travel rules and regulations.

State University of New York, College at Geneseo - Selected Employee Travel Expenses (2012-S-139)
Three of these employees worked at SUNY Geneseo and had travel costs totaling $252,042. The travel expenses for the three college employees selected for audit were documented and adhered to state travel rules and regulations.

State University of New York, Institute of Technology at Utica/Rome - Selected Employee Travel Expenses (2012-S-146)
One of these employees worked at the State University of New York Institute of Technology (SUNYIT) and had travel costs totaling $101,605. Auditors found that the travel expenses for the SUNYIT employee selected for audit were documented and adhered to state travel rules and regulations.

State University of New York, College at Brockport - Selected Employee Travel Expenses (2012-S-150)
One of these employees worked at the College at Brockport (college) and had travel expenses totaling $143,258.  Auditors found that the employee’s travel expenses were documented and adhered to state travel rules and regulations.

Religious holidays provision in Taylor Law agreement held unconstitutional

Religious holidays provision in Taylor Law agreement held unconstitutional

Board of Education of the Mineola UFSD v Mineola Teachers Assn., 2013 NY Slip Op 02070, Appellate Division, Second Department

The Mineola Teachers Association appealed an order of the Supreme Court, Nassau County that granted the School District’s petition seeking to permanently stay the arbitration of a grievance alleging that the School District breached the “religious holiday” provision set out in the collective bargaining agreement [CBA] between the School District and the Association.

The CBA clause in question provided that “members of the Association” could receive up to five of the religious holidays “designated by the New York State Commissioner of Education” as paid days off, “two of which would not be charged to any other leave.” Although the New York State Commissioner of Education had discontinued designating “religious holidays,” the religious holidays provision in the CBA was not amended and the School District continued to permit Association members who requested time off for religious observance to avail themselves of the religious holidays provision.

In October 2010, the School District advised the Association that it would no longer abide by the religious holidays provision because it was unconstitutional. The Association filed a grievance, which was denied. The Association then demanded that the grievance be submitted to arbitration.

The Appellate Division said that the first issue to be resolved when determining whether a dispute is subject to public sector employment arbitration is "whether the subject of the claim sought to be arbitrated is the type authorized by the Taylor Law” citing Matter of Blackburne, 87 NY2d 660. The court explained that "If a statute, decisional law or public policy precludes the governmental employer and employee from referring the dispute to arbitration, then the answer to this inquiry is no and the claim is not arbitrable."

Noting that "There is no firmer or more settled principle of Establishment Clause jurisprudence than that prohibiting the use of the State's power to force one to profess a religious belief," the Appellate Division said that the clear wording of the religious holidays provision in the CBA rewarded members of the Association who claimed to be religiously observant with more paid days off than those afforded to agnostics, atheists, and members who were less observant.

Similarly, in Port Washington Union Free School Dist. v Port Washington Teachers Assn., 268 AD2d 523, the Appellate Division ruled that a CBA provision that allowed a teacher to be absent with pay on "any of the religious holidays designated by the New York State Commissioner of Education" without charging his or her absence to leave credits violated the Establishment Clause of the First Amendment of the United States Constitution.

In contrast to the language of the provision included in the Port Washington CBA, the Port Washington court noted that many Taylor Law collective bargaining agreements provide for absences with pay charged to "personal leave," which leave may be used for any "personal business" including the observation of religious holidays. Presumably such provisions would pass the “Constitutional test” as they neither favor the "religiously observant" nor penalize "agnostics, atheists, and members who were less observant."

The Appellate Division ruled that Supreme Court properly granted the School District's petition to permanently stay arbitration and denied the Association's motion to compel arbitration.

The Mineola decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02070.htm

Individuals interested in being considered for the Empire State Fellows Class of 2013-2015 must file their application by April 12, 2013

Individuals interested in being considered for the Empire State Fellows Class of 2013-2015 must file their application by April 12, 2013

Source: New York State Department of State

The 2011-2013 class of the Empire State Fellows -- the inaugural class of a program created by Governor Andrew M. Cuomo to prepare a new generation of leaders for policy-making roles in New York State government -- has already made an impact on the administration. From promoting economic development programs to devising strategies to assist needy New Yorkers, the 2011-2013 Empire State Fellows are working closely with officials in the administration and participating in making key policy decisions.

Applications for the next class of Empire State Fellows (2013-2015) are due by Friday, April 12, 2013 at 11:59 p.m. 

To apply, candidates must email a cover letter, resume, personal statement, and two letters of recommendation to fellows@exec.ny.gov. 

Additional information about the 2013-2015 program and the application process is available at http://www.dos.ny.gov/newnyleaders/fellows_app.html.

During the first six months of the program, the Empire State Fellows met and worked with top-level administration officials and participated in intensive government and policy courses at the Rockefeller Institute in Albany. These  Fellows are currently working on challenging and important issues facing New York State and using their knowledge and background to make positive contributions.

Examples of the work the current Fellows have undertaken in the last six months include:

*        Development of financing options for the New York State Environmental Facilities Corporation

*         Minority and Women-Owned Business procurement

*        New York Wine and Beer Summit to promote New York business

*        Superstorm Sandy recovery efforts and New York State Long-Term Disaster Preparedness Initiative

*        New York State Homeownership Repair and Rebuilding Fund

*         Regional Economic Development Councils Opportunity Agenda initiative

To learn more about the current Empire State Fellows class, go to http://www.dos.ny.gov/newnyleaders/fellows.html

Governor Cuomo and Legislative Leaders outline agreement on 2013 -2014 Budget

Governor Cuomo and Legislative Leaders outline agreement on 2013 -2014 Budget

On March 27, 2013 Governor Andrew M. Cuomo, Senate Majority Coalition Co Leaders Dean Skelos and Jeff Klein, and Assembly Speaker Sheldon Silver outlined the agreement on the 2013 -14 Budget.

A summary of the agreement is posted on the Internet at:

http://d2srrmjar534jf.cloudfront.net/6/0a/d/3912/GOVERNOR_CUOMO_AND_LEGISLATIVE_LEADERS_OUTLINE_AGREEMENT_ON_2013.pdf

Establishment of positions in the Classified Service by a political subdivision of the State

Establishment of positions in the Classified Service by a political subdivision of the State

In deciding this Article 78 action, the Appellate Division addressed a number of significant public personnel law issues including the establishment of positions in the Classified Service by a political subdivision of the State, jurisdictional classification of positions in the Classified Service and the impact of a Taylor Law agreement in the event there is layoff of employees in the Labor Class.

According to the decision, the Village of Spring Valley appointed three individuals [petitioners] to classified service positions of “Laborer” in the Labor Class in its Department of Public Works* and that these three individuals had “completed their probationary periods" prior to August 10, 2010.

On August 10, 2010, however, the County of Rockland Department of Personnel, the municipal civil service commission [Commission] having jurisdiction over the Village, advised Spring Valley that it had "no record of employment" for the three petitioners, citing Civil Service Law §22 [Certification for positions] and §97 [Reports of appointing officers; official rosters].

The Commission’s reference to Civil Service Law §22, Certification for positions, suggests that these were new position or existing positions in a jurisdictional class other than the Labor Class in that Section 22 provides that: “Before any new position in the service of a civil division shall be created or any existing position in such service shall be reclassified, the proposal therefor, including a statement of the duties of the position, shall be referred to the municipal commission having jurisdiction and such commission shall furnish a certificate stating the appropriate civil service title for the proposed position or the position to be reclassified. Any such new position shall be created or any such existing position reclassified only with the title approved and certified by the commission.

Significantly, Civil Service Law §44 provides that all positions in the Classified Service are in the competitive class unless placed in a different jurisdictional classification. The Appellate Division's decision, however, makes no reference to these three laborer positions having been placed in the Labor Class by amendment of the Commission's Rules, which rules are subject to the approval of the State Civil Service Commission in accordance with the provisions of Civil Service Law §20.

Accordingly, appears that the three petitioners at the time of their respective “appointment” were provisionally appointed to three “new positions in the competitive class,” and that these appointments should have been so reported to the Commission with Village’s request that the Commission amend its rules to “jurisdictional classify the three positions in the Labor Class.”

The Commission’s August 10, 2010 notification also advised the Village that the "[petitioners] without approval from this office to work must be terminated immediately unless there is a resolution to the situation."

That same day, the Village Board adopted Resolution No. 519 of 2010, unanimously resolving that the individual petitioners "shall be immediately removed” from the Village payroll and informed that they are not employees of the Village.The three individuals then filed a petition pursuant to CPLR Article 78 seeking to annul the Village’s resolution removing them from the Village payroll, to compel the Village to comply with its ministerial duty under the Civil Service Law by submitting the required paperwork to the Commission, and to reinstate them with back pay.

The petitioners also submitted evidence that another employee in the labor class with less seniority had been retained by the Village after their removal from the payroll, an action they alleged violated their “seniority rights under the governing collective bargaining agreement.”**

In response, the Village contended that in the months preceding its adoption of the resolution terminating the three petitioners it had conducted a comprehensive review of its operations and determined that the Department of Public Works "would operate more economically and efficiently by creating three new positions with the title of assistant maintenance mechanic and eliminating all positions in the labor class by attrition and/or layoffs."

In rebuttal, the petitioners submitted evidence that the new title “Assistant Maintenance Mechanic” was proposed on July 27, 2010 and notice of three vacancies in the new class was posted on that date. Accordingly the petitioners contended that the Village had not properly abolished the individual petitioner's positions on August 10, 2010, but had terminated their employment "in violation of the collective bargaining agreement and the Civil Service Law."

The Supreme Court denied the petition and dismissed the proceeding, holding that the Village had properly abolished the individual petitioners' positions for the purpose of economy or efficiency and that the petitioners had failed to allege or establish that the Village had acted in bad faith in abolishing their positions.

The Appellate Division reversed the lower court’s ruling, explaining that the Doctrine of "Legislative equivalency requires that a position created by a legislative act can only be abolished by a correlative legislative act," citing Torre v County of Nassau, 86 NY2d 42.

Here, said the court, it is undisputed that each of the individual petitioners' positions was created by resolution of the Village Board, and thus, another resolution of the Village Board was required to abolish each of those positions. Contrary to the Village's contention, the Appellate Division ruled that three positions in question were not abolished by the Village's Resolution No. 519 of 2010.

The Appellate Division explained that “The misconception of the Village Board that the positions did not exist was premised upon the Village's own failure to comply with the filing requirements of the Civil Service Law pursuant to the notification by the municipal civil service commission." The Village Board had “unanimously resolved to ‘immediately remove[ ]’ the individual petitioners from the Village payroll and to inform them that they ‘are not employees of the Village,’ rather than to remedy their filing and certification violations under the Civil Service Law.” Further, said the court, the plain language of the subject resolution “refutes the [Village's] contention that the Village Board was abolishing positions then in existence.”

Moreover, said the Appellate Division, the record supports the petitioners' contention that although the resolution “immediately removed the individual petitioners from the payroll,” the Village continued to employ another laborer with less seniority. The Appellate Division held that the petitioners established that the positions of the individual petitioners were not abolished and they were laid off in violation of the seniority provisions of the collective bargaining agreement. The court explained that the Village's action in removing the individual petitioners from the payroll was not justified by its proper creation of a new class of employees, with the intention of eliminating the labor class by attrition or layoff.

Clearly "A public employer may abolish civil service positions for the purpose of economy or efficiency, as long as the position is not abolished as a subterfuge to avoid statutory protection afforded civil servants before they are discharged."Here, however, the Appellate Division ruled that “although the evidence supported the Village’s contention that it intended to abolish the laborer positions after it had created the new class of assistant maintenance mechanic,” the evidence does not support its contention that the Village actually abolished the individual petitioners' positions in the resolution dated August 10, 2010 [emphasis in the decision].

In any event, said the court, even if the August 10 resolution could be construed to abolish the individual petitioners' positions effective August 10, 2010, the immediate termination of their employment pursuant to that resolution violated a provision in the collective bargaining agreement requiring two weeks notice prior to terminating an employee whose position has been abolished, and thus constituted improper abolishment of a civil service position "to avoid the statutory [in this instance better read “a contractual”] protection afforded civil servants before they are discharged."

The Appellate Division reversed the Supreme Court’s decision, annulled the Village’s August 10 resolution and remitted the case to the Supreme Court, Rockland County for further proceedings “including a calculation of the individual petitioners' pay retroactive to August 10, 2010.”

* The Classified Service consists of four jurisdictional classes: the Competitive Class, the Non-competitive Class; the Exempt Class and the Labor Class.

** N.B. Employees in the Labor Class are not within the ambit of either §80 or §80-a of the Civil Service Law [which sections of law provide certain rights to employees in the competitive and non-competitive classes in the event of a layoff] but employees in the Labor Class may be accorded layoff rights based on “seniority” pursuant to a Taylor Law agreement provided that any such contract right does not adversely affect the statutory layoff rights of other employees [see City of Plattsburgh v Local 788, 108 AD2d 1045].  

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_01826.htm

Employee terminated for having submitted a false application for a mortgage

Employee terminated for having submitted a false application for a mortgage
Kim v Kelly, 2013 NY Slip Op 01905, Appellate Division, First Department

The Appellate Division affirmed the termination of a New York City police officer by the Police Commissioner after the officer was found to have submitted a false mortgage application.

Finding that there was substantial evidence showing that the officer had “falsely listed a company that [the officer] did not work for as his sole source of income, and falsely listed a New Jersey address as his primary residence,” the court said there was no basis to disturb the credibility determinations of the Hearing Officer.

As to the penalty imposed, dismissal from his position, the court, citing Kelly v Safir, 96 NY2d, 32, said that termination did not shock its sense of fairness as the Commissioner "is accountable to the public for the integrity of the Department."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_01905.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 of March 18-24, 2013 [Click on the caption to access the full report]

DiNapoli: PepsiCo to Disclose Lobbying and Trade Association Ties

PepsiCo, a global food and beverage company with annual revenues of $60 billion, has agreed to fully disclose all of its direct lobbying and contributions made to trade associations as well as funds paid to grassroots lobbying and tax-exempt organizations that write and endorse model legislation, according to New York State Comptroller Thomas P. DiNapoli. In response to the agreement, DiNapoli withdrew a shareholder resolution calling for disclosure of shareholder money spent on lobbying and other political spending.

SEC Action Puts Caterpillar Resolution on Sudan up for Shareholder Vote

The New York State Common Retirement Fund’s shareholder resolution calling upon Caterpillar Inc. to take steps to ensure that the company’s foreign subsidiaries are not doing business with the government of Sudan will go before shareholders on June 12, New York State Comptroller Thomas P. DiNapoli announced Thursday. Caterpillar had attempted to block the resolution from appearing on its shareholder proxy statement to be voted upon at its annual meeting by petitioningthe Securities and Exchange Commission to allow its exclusion from the meeting agenda.

DiNapoli: Tax Collections Declined in February; Budget Must Reflect Realistic Revenue Expectations

Total tax collections trailed the latest projections in the amended Executive Budget Financial Plan released last month, according to the February cash reportreleased Wednesday by State Comptroller Thomas P. DiNapoli. Tax collections through February totaled $59.9 billion, 2.6 percent higher than the same period a year ago although collections in the month of February were 5.6 percent lower than collections for the same period last year.

Comptroller DiNapoli Releases Municipal Audits

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

the Town of Deerfield;

the Town of Newstead; and,

the Town of Stratford.

A party is permitted to introduce updated records as evidence upon the resumption of an administrative hearing if an opportunity to respond to such records is provided

A party is permitted to introduce updated records as evidence upon the resumption of an administrative hearing if an opportunity to respond to such records is provided

Coleman v Rhea, 2013 NY Slip Op 01783, Appellate Division, First Department

In resolving this Article 78 petition one of the issues considered by the Appellate Division was whether there was “substantial evidence” to support an administrative determination made after a hearing.

The petitioner, Wanda Coleman, claimed that her right to due process was violated when the hearing officer permitted the New York City Housing Authority [NYCHA] to submit an updated ledger into evidence when an administrative hearing was resumed.

The Appellate Division disagreed, explaining that Coleman was free to testify regarding the updated ledger and the hearing officer kept the hearing record open post-hearing to give Coleman a full opportunity to respond to the updated information.

Indeed, said the court, Coleman had availed herself of this opportunity by submitting documentary evidence. Further, the court ruled that the hearing officer had not violated NYCHA's relevant internal administrative procedures in so doing.

A second issue concerned a procedural matter.

The Appellate Division noted that Supreme Court had denied Coleman’s Article 78 petition seeking to annul NYCHA’s administrative determination. The Appellate Division, however, “unanimously reversed” Supreme Court’s ruling on the law and treated the petition as one transferred to it for a de novo review.

Coleman’s petition, said the court, raised an issue of substantial evidence, and thus, the proceeding should have been transferred to this Court pursuant to CPLR §7804(g). Accordingly, the Appellate Division considered the substantial evidence issue de novo and decided all issues presented as if the proceeding had been properly transferred to it by Supreme Court in the first instance.

The Appellate Division then confirmed NYCHA’s administrative determination as supported by substantial evidence and denied Coleman’s petition, dismissing the proceeding.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_01783.htm

If a past practice involving a mandatory subject of negotiation is established the Taylor Law bars the employer from unilaterally discontinuing that practice

If a past practice involving a mandatory subject of negotiation is established the Taylor Law bars the employer from unilaterally discontinuing that practice

Town of Islip v New York State Pub. Empl. Relations Bd., 2013 NY Slip Op 01562, Appellate Division, Second Department

The Public Employment Relations Board [PERB] affirmed a decision of its administrative law judge that found, after a hearing, that an improper practice charge filed by Local 237, International Brotherhood of Teamsters and United Public Service Employees Union, violated Civil Service Law §209-a(1)(d).

The genesis of Local 237 filing an improper practice charge with PERB was the Town’s unilaterally discontinued an alleged past practice involving the use of Town vehicles by certain unit members to commute. PERB directed the Town to reinstate the practice and to "make whole unit employees for the extra expenses incurred as a result of the unilateral withdrawal of the vehicle assignments, if any, together with interest at the maximum legal rate."

The Town had contended that the practice violated its Code of Ethics and Financial Disclosure Law which, in pertinent part, provided that "[n]o officer or employee shall request or permit the use of Town-owned vehicles, equipment, material or property for personal convenience or profit, except when such services are available to the public generally or are provided as municipal policy for the use of such officer or employee in the conduct of official business. In addition, the Town had a written policy concerning the use of Town vehicles.

According to the decision “For at least 15 years prior to 2007, the policy was frequently ignored with respect to assignments of Town vehicles for permanent use. In late 2007, the Town and a union representing certain Town employees were negotiating two new collective bargaining agreements. In the course of negotiations the Town proposed a provision concerning employee use of Town vehicles, but then withdrew its proposal, contending that the permanent use of Town-owned vehicles was not a mandatory subject of collective bargaining.

When negotiations were at an impasse in early 2008 on various issues, the Town Board passed a resolution limiting the assignment of "take-home" vehicles. As a result of this action approximately 45 unit members lost their assignments of Town vehicles for their permanent use.

The two unions then representing the affected employees filed an improper practice charge with the PERB contending that the long-extant practice of assigning Town vehicles for permanent use to persons who did not qualify for them under the Town's written policy had given rise to a "past practice" as an economic benefit. Thus, argued the unions, “Any change in that practice … was a 'mandatory' subject of collective bargaining, and the Town's change in policy constituted an improper employment practice."

A PERB administrative law judge determined that the longstanding practice of assigning Town vehicles to employees for permanent use constituted a past practice regarding the terms and conditions of employment, notwithstanding that those permanent assignments were in conflict with the Town's written policy. The Town was directed to restore the vehicles to the employees and compensate the employees for the period during which they were without the vehicles. PERB, in its final determination, affirmed the administrative law judge's decision.

The Appellate Division sustained PERB’s decision, explaining that under the Taylor Law a public employer is obligated to negotiate in good faith with the bargaining representative of its current employees regarding the "terms and conditions of employment" and the failure to do so constitutes an improper employment practice.

Further, said the court, pursuant to this duty to negotiate, where a past practice between a public employer and its current employees is established involving a mandatory subject of negotiation, the Taylor Law bars the employer from discontinuing that practice without prior negotiation, citing Aeneas McDonald Police Benevolent Assn. v City of Geneva, 92 NY2d 326.

As PERB's determination was "made as a result of a hearing held, and at which evidence was taken, pursuant to direction by law," the Appellate Division said that it must determine whether PERB's decision was supported by "substantial evidence." In addition, in light of certain of the Town's contentions,* the Court said that it must also inquire whether the determination "was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

The Appellate Division’s conclusions:

1. The PERB's determination was not affected by an error of law, as the Town could be required to collectively bargain over the issue. The court explained that the Town government was responsible for administering the Ethics Code and for managing its vehicle fleet. Yet, as substantial evidence in the record established, the Town frequently and openly ignored that Code and its policy for managing its vehicle fleet, only to contend later that the Code allowed it to act unilaterally in taking the vehicles away from the employees who had been permanently provided with them. PERB, said the court, was not required to give more effect to the Town Ethics Code than the Town itself gave to it.

2. For similar reasons, the Appellate Division ruled that it cannot be said as a matter of law that it is unreasonable for employees to rely on the administering authority's interpretation and implementation of its policy and Ethics Code. Consequently, the PERB's determination was not affected by an error of law, was not arbitrary and capricious, did not constitute an abuse of discretion.

In the words of the court, “The evidence in the record supported the PERB's determination that the assignment of Town vehicles to the affected employees for permanent use was unequivocal and continued uninterrupted for a period of time which, under the circumstances, created a reasonable expectation among the affected unit employees that the practice would continue.

“The assignment of Town vehicles by Town officials to nonqualifying employees was done openly and without any indication to the employees that it was other than legitimate. The payroll office was notified to deduct a certain amount from the employees' paychecks to account for the value of the benefit. Moreover, the practice continued unabated for many years.

“Consequently, the Appellate Division ruled that PERB properly determined that the assignment of vehicles to the affected employees for permanent use constituted a past practice as to a term or condition of employment, and that the Town engaged in an improper practice by refusing to engage in collective bargaining as to a change to that term or condition.”

* The Town claimed that as its Ethics Code forbids the use of Town vehicles in violation of Town policy, the Town could not be forced to engage in collective bargaining over the issue. In addition, the Town argued that, as a matter of law, the employees could not have a reasonable expectation that the assignment of Town vehicles for permanent use would continue, because such an assignment of vehicles violated the Town Ethics Code. 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_01562.htm