Retirement and Social Security Law excludes “large raises having the effect of inflating the members final average salary” in determining the member’s retirement allowance

The Retirement and Social Security Law excludes “large raises having the effect of inflating the members final average salary” in determining the member’s retirement allowance
Chichester v DiNapoli, 2013 NY Slip Op 05283, Appellate Division, Third Department

Gilbert L. Chichester was employed as the Executive Director of the Montgomery-Otsego-Schoharie Solid Waste Management Authority (MOSA) from December 1, 1993 through December 2004 pursuant to a series of employment contracts.

In December 2004, Chichester's then-current employment contract expired without a new agreement in place. MOSA's Board and Chichester entered into an oral agreement providing for Chichester’s continued employment and compensation pending further contract negotiations.

No agreement had been reached as of January 2006 and MOSA's Board adopted a resolution imposing retroactive salary increases for Chichester for 2004, 2005 and 2006. Negotiations, however, continued and, on August 20, 2009, Chichester and MOSA entered into a written employment contract covering the period from January 1, 2005 to August 31, 2009. That contract “retroactively increased Chichester's annual base salary and resulted  in certain lump-sum payments being made to Chichester.* The same day Chichester and MOSA entered into a separate agreement indicating Chichester's intention to resign from his position effective August 31, 2009 and to thereafter retire.

When Chichester submitted his application for service retirement effective September 23, 2009 to the New York State and Local Employees' Retirement System, the System advised him that the retroactive lump-sum payments he received in August 2009 (covering the period from September 1, 2006 to August 31, 2009) would not be included in the calculation of his final average salary for purposes of determining the pension portion of his retirement allowance.

The Retirement System explained that “such payments were not annual compensation but, rather, represented either a form of termination pay or additional compensation paid in anticipation of [Chichester’s] retirement.”

Chichester challenged that administrative decision and following a hearing, the Hearing Officer concluded that the "lump-sum" payments should be included in Chichester’s final average salary. The Comptroller disagreed and excluded such payments from Chichester’s retirement benefit calculation and Chichester filed a petition pursuant to CPLR article 78 challenging the Comptroller’s determination.

The Appellate Division said that its case law makes clear that "the Comptroller is vested with exclusive authority to determine applications for retirement benefits and such determination, if supported by substantial evidence, must be upheld" even if other evidence in the record could support a contrary result.

The Retirement and Social Security Law [RSSL] provides that a member's pension benefit is based upon his or her final average salary, i.e., "the average salary earned by such . . . member during any three consecutive years which provide the highest average salary." However, RSSL §431further provides that to avoid the artificial inflation of that such calculation must exclude "any form of termination pay" or "any additional compensation paid in anticipation of retirement."

The Appellate Division then observed that "In determining what constitutes termination pay or compensation paid in anticipation of retirement, [it] must look to the substance of the transaction and not to what the parties may label it."

Although, noted the court, the arguments advanced by Chichester “arguably militates in favor of a finding that the lump-sum payments at issue indeed were regular salary payments,” the Appellate Division said that it could not overlook the fact that “the underlying employment agreement expired by its own terms as of August 31, 2009 — a mere 11 days after it was signed by [Chichester] and MOSA's chair — and, more to the point, was executed the same day that [Chichester] and MOSA entered into an agreement relative to Chichester's resignation (effective August 31, 2009) and retirement” and, the retroactive salary increases were disproportionate to the salary increases previously enjoyed by Chichester.

Here, said the court, "the timing of [Chichester’s] large raise[s] … had the effect of inflating [Chichester’s] final average salary." Accordingly the Appellate Division ruled that the Comptroller's exclusion of such sums from Chichester‘s final average salary and corresponding retirement benefit calculation was supported by substantial evidence.

* Chichester‘s base salary was increased incrementally from $73,254 as of August 31, 2006 to $115,000 as of August 31, 2009.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_05283.htm

Employee’s claim that employer discharged the employee because of his disability rejected where the record showed that employee had falsified his time sheets

Employee’s claim that employer discharged the employee because of his disability rejected where the record showed that employee had falsified his time sheets

2013 NY Slip Op 02689, Appellate Division, First Department

The New York State Division of Human Rights denied a former employee’s allegation the employer had engaged in “disability discrimination” in terminating his employment. 

The Appellate Division dismissed the individual’s Article 78 petition. The court said that the Division’s determination that there was no probable cause to believe that individual was subjected to disability-based discrimination was rationally based.

According to the decision, the record showed that the individual had falsified his time sheets to show that he was working during times when he was absent from the office. Citing Costello v St. Francis Hosp., 258 F Supp 2d 144, 155 [ED NY 2003, the Appellate Division noted that "(a)n employee's falsification of a time sheet can constitute a legitimate, nondiscriminatory reason for terminating an employee."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02689.htm

Personality problem held a valid ground for dismissal under the circumstances

Personality problem held a valid ground for dismissal under the circumstances

112 Misc. 2d 10, reversed, 89 A.D.2d 778 

From time to time it becomes necessary for an employer to attempt to resolve what it views as a chronic personality difficulty with an employee. Is discipline appropriate in such a case?

Yes, according to a decision of the Appellate Division.

The employee had been told on many occasions that his conduct and attitude disrupted and interfered with the work of his subordinates, the teaching staff of the school and the administrative staff of the District.

Eventually charges were brought against the employee pursuant to §75 of the Civil Service Law and he was terminated.

Although Supreme Court ruled that the penalty imposed, dismissal, was excessive because the charges only involved matters of personal relationships with other employees and staff members of the School District, the Appellate Division reversed that holding.

The Appellate Division commented that the penalty did not shock its sense of fair treatment and upheld the dismissal of the employee, explaining that although the employee “had a long record of competent service unblemished except for this continuing personality problem and the incidents ... are relatively minor ... they assume an importance out of all proportion because of the disruptive effect such behavior had on the harmonious operation of the school”.

The decision notes that the principal of the school where the employee served was “required to spend a substantial and inordinate amount of time resolving personnel problems arising because of [the employee’s] attitude and conduct”.

The Moreland Commission to Investigate Public Corruption to hold its first round of public hearings across the State

The Moreland Commission to Investigate Public Corruption to hold its first round of public hearings across the State

The Moreland Commission to Investigate Public Corruption has announced the first round of its public hearings to be held across the state. The first three hearing are to be held in New York City, Buffalo, and Albany and will focus on three issues:

1. The adequacy of existing state laws, regulations and procedures involving unethical and unlawful misconduct by public officials.

2. The electoral process.

3. Campaign finance laws

Members of the public, as well as public officials, public policy experts, advocacy organizations and others are invited to testify or attend the hearings and are asked to address these issues.

Individuals unable to present testimony in person may also submit testimony before or after the hearings at: comments@moreland.ny.gov

 .

The New York City Moreland Commission Public Hearing will commence at 6 p.m., Tuesday, September 17, 2013 (Doors open at 5 p.m.) at Pace University, NY Campus - Multipurpose Room, 1 Pace Plaza, NYC

The Western New York Moreland Commission Public Hearing will commence at 6 p.m., Wednesday, September 18, 2013 (Doors open at 5 p.m.) at the Senator Walter J. Mahoney State Office Building – Hearing Room #4 – 65 Court Street, Buffalo

The Capital Region Moreland Commission Public Hearing will commence at 6 p.m., Tuesday, September 24, 2013 (Doors open at 5 p.m.) The Crossings of Colonie Meeting Room, 580 Albany Shaker Road, Loudonville

The Commission said that additional hearings will be announced in the near future.

Areas where the Commission will focus its investigation include but are not limited to:

1. Criminal statutes for corruption and misconduct by public officials, such as bribery laws.

2. Campaign financing including but not limited to contribution limits and other restrictions; disclosure of third-party contributions and expenditures; and the effectiveness of existing campaign finance laws.

3. Compliance of outside organizations and persons with existing lobbying laws, including but not limited to organizations engaged in lobbying and other efforts to influence public policies and elections, and the effectiveness of such laws.

4. Adequacy and enforcement of the State’s election laws and electoral process including: the structure and composition of the State and County Boards of Elections, the Board of Elections’ enforcement, and the effectiveness of and compliance with existing election laws.

On July 2, 2013, Governor Andrew M. Cuomo established the Commission under the Moreland Act (Section 6 of the New York State Executive Law) (“Moreland Commission”) and Executive Law Section 63(8) to probe systemic public corruption and the appearance of such corruption in state government, political campaigns and elections in New York State. Executive Order 106 which created the Commission is posted on the Internet at http://www.governor.ny.gov/executiveorder/106

The Commission’s website is www.publiccorruption.moreland.ny.gov

Employer’s termination of probationary employee overturned after its repeated failure to appear before the court

Employer’s termination of probationary employee overturned after its repeated failure to appear before the court

2013 NY Slip Op 05207, Appellate Division, Second Department

The petitioner [Educator] in this action was appointed as a probationary assistant principal at a New York City Department of Education [DOE] middle school. Prior to the end of the Educator’s probationary period the middle school principal informed Educator that DOE intended to discontinue her employment based on an unsatisfactory rating. 

Educator filed a timely Civil Practice Law and Rules Article 78 petition challenging DOE’s determination.

DOE moved to dismiss Educator’s petition for “failure to state a cause of action” 

However when DOE failed to appear before Supreme Court on the return date of its motion, the court granted Educator’s petition and, in effect, denied DOE’s motion.

DOE then filed a motion asking Supreme Court to vacate its order but when DOE failed to answer the “call of the calendar” on the return date of its motion to vacate the earlier order of Supreme Court, the court denied the motion in an order that directed DOE to appear for a contempt hearing.

Ultimately Supreme Court did not hold DOE in contempt and DOE again moved again to vacate the court’s order that, in effect, had granted Educator’s petition.

DOE, however, again failed to appear on the return date of its “renewed” motion and Supreme Court, upon DOE’s default, issued an order dated January 14, 2010 that, in effect, reinstated its initial decision granting Educator’s petition.

DOE yet again asked the court to dismiss Educator’s petition, which motion Supreme Court granted.

Educator appealed and the Appellate Division agreed with her argument that Supreme Court erred in granting DOE’s motion to vacate the court’s initial order, dated May 30, 2006, as it was untimely, having been made more than one year after DOE received actual notice of the order.

In the words of the Appellate Division, this convoluted series of events developed as follows:

1. In a proceeding pursuant to CPLR Article 78 to review a determination of the New York City Department of Education [DOE] made in 2006 discontinuing the Educator's probationary service as an assistant principal,
2. the Educator appeals, as limited by her brief, from so much of an order and judgment (one paper) of the Supreme Court, Kings County dated August 2, 2011,
3. as granted the motion of the DOE, in effect, pursuant to CPLR 5015(a)(1), (a) 3. to vacate an order of the same court dated January 14, 2010,
4. entered upon DOE’s failure to appear on the return date,
5. denying DOE’s motion to vacate an order of the same court, dated May 30, 2006, 
6. also entered upon DOE’s failure to appear on the return date, granting the petition and, in effect,
7. denying that branch of DOE’s motion which was to dismiss the petition pursuant to CPLR 3211(a)(7), and (b) to vacate the order dated May 30, 2006,
8. thereupon granted that branch of DOE’s motion which was to dismiss the petition pursuant to CPLR 3211(a)(7), and, in effect, 
9. dismissed the proceeding brought by Educator

The bottom line: the Appellate Division remitted the matter to the Supreme Court for the entry of a judgment in favor of Educator and against DOE, granting Educator’s petition

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_05207.htm

Abandonment of a position

Abandonment of a position

Ciccarelli v West Seneca Central School District, 107 AD2d 105

In a case challenging a teacher’s alleged abandonment of her position, the Appellate Division rejected a Board of Education’s resolution holding that an educator had abandoned her position and terminating her.

The court said that the burden of proving that the educator had abandoned her tenured teaching position was upon the District. This must be established "by clear and convincing evidence" that a teacher, by a "voluntary and deliberate act" intended to relinquish her teaching position and forfeit her tenure rights. Otherwise, a tenured teacher may be terminated only in accordance with §3020-a of the Education Law.

In a similar situation involving an employee in the classified service [teachers are in the unclassified service] a former rule of the New York State Civil Service Commission [4 NYCRR 5.3(d)] providing that a State employee absent for a period of ten or more days without an explanation would be deemed to have resigned from his or her position was held to violate the employee's right to due process [Bernstein v Industrial Commissioner, 59 AD2d 678]. However, this type of provision has survived in collective bargaining agreements, [see New York State Off. of Mental Health v New York State Div. of Human Rights, 53 A.D.3d 887].

Employer's use of payroll cards to pay workers under investigation by New York State Attorney General Schneierman

Employer's use of payroll cards to pay workers under investigation by New York State Attorney General Schneierman

Marnie E. Smith, Esq., an attorney with Harris Beach's Labor and Employment Law Practice Group, has posted an item on the NYMUNIBLOG reviewing Attorney General Eric T. Schneiderman’s investigation of the use of "payroll cards” by employers.

Ms. Smith observes that “Payroll cards are used as an alternative to the traditional written paycheck or direct deposit” whereby the employee’s wages “are loaded onto a debit card, which avoids having to cash a paycheck and does not require the employee to have a bank account.”

The full text of Ms. Smith’s posting is on the Internet at: http://nymuniblog.com/?p=3349

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 July 13, 2013 [Click on text highlighted in bold to access the full report] 


DiNapoli Finds Millions in Medicaid Overpayments

New York State’s Medicaid program overpaid providers $11.4 million, largely because providers overstated the amounts of Medicare coinsurance charges and incorrect rate changes, according to two audits of the Department of Health released Tuesday by State Comptroller Thomas P. DiNapoli. The state has recovered $3.8 million of these overpayments.

DiNapoli: Long Beach Faces Fiscal Challenges but Moving in Right Direction

Poor budgeting of the prior administration in the city of Long Beach created an $18 million multi–year deficit while also exhausting $21 million in rainy day funds, according to an audit released Thursday by State Comptroller Thomas P. DiNapoli. The audit, which was requested by city officials, was conducted prior to the damage caused Superstorm Sandy.

DiNapoli Releases Bronx Economic Snapshot

The Bronx has made impressive economic gains in recent decades according to a report released Thursday by New York State Comptroller Thomas P. DiNapoli. Population, business and job growth has been strong and the Bronx continued to add jobs even during the Great Recession.

Comptroller DiNapoli Releases Municipal Audits

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

Cattaraugus County;

the Lansing Fire District;

the Town of Fremont; and,

the Middle Island Fire District.

Comptroller DiNapoli Releases School Audits

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

the Child Development Center of the Hamptons Charter School; and,

the Syracuse Academy of Science Charter School.

State Education Department, Rainbow Rhymes Learning Center (Follow-Up) (2012-F-31)

An audit issued in 2010 examined whether selected State Education Department grant payments to Rainbow Rhymes Learning Center were appropriate. Auditors found that Rainbow claimed $473,815 in expenses that were either not adequately supported, not program appropriate or were claimed for a period for which Rainbow was not entitled to receive reimbursement. In a follow-up report, auditors found that of the three prior audit recommendations, one was implemented and two were partially implemented. However, SED has not yet recovered the overpayments.

New York State Thruway Authority, Status of the Board-Approved Capital Plan For 2005-2011 (Follow Up) (2013-F-5)

An audit report issued in 2008 examined the actions taken by the Thruway in monitoring and reporting on the board-approved Capital Plan for 2005-2011. Auditors found the Thruway did not report whether the individual projects were starting and finishing on time and within budget. Furthermore, the authority could not support its decision-making and prioritization of all capital project items. Auditors also found that completing the plan as approved would take longer and cost significantly more than was originally forecast. In a follow-up report, auditors found Thruway officials have made progress in correcting the problems identified. However, additional improvements are needed.

Division of Housing and Community Renewal, Disposal of Electronic Devices (2012-S-101)

Auditors tested a total of 752 electronic devices at both the Albany and the New York City offices. In Albany, two devices still contained general agency information and personal pictures, but none contained personal, private or sensitive information. In New York City, 13 hard drives showed indications that they still contained data. Auditors were unable to locate 17 computer hard drives that had already been removed from computers and were scheduled for shredding. Auditors could also not locate 18 servers listed on the inventory records. Auditors could not locate eight other devices listed on inventory records and found one device recorded as surplus that was still in use.

Department of Corrections and Community Supervision, Seventeen Years of Fraud by the Former Director of the Department of Correctional Services' Food Production Center (Follow-Up) (2012-F-7)

An audit issued in 2010 identified longstanding fraudulent practices committed by former Director of the Food Production Center in Oneida County, Howard Dean. He failed to work on Fridays for 17 years although he claimed to be working a five-day week on his time and attendance records. He also submitted fraudulent travel vouchers and hotel invoices for days he did not stay at a hotel in Rome, N.Y. These practices cost the taxpayers more than a quarter-million dollars. Another quarter million in improper payments occurred because DOCCS failed in its responsibilities to operate in the best interest of the state. In a follow-up report, auditors found DOCCS officials have made progress in addressing the problems we identified in our initial report. Of the five recommendations, three have been implemented and two have been partially implemented.

Tuition Assistance Program - Higher Education Services Corporation, College of Mount Saint Vincent (2011-T-3)

Auditors determined the College of Mount Saint Vincent was overpaid $319,468 because school officials incorrectly certified students as eligible for TAP awards.

Statewide Travel Audits:

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 Upstate Medical Center, Selected Travel Expenses (2012-S-147)

Auditors examined the travel expenses for two individuals paid by SUNY Center with outliers in the area of mileage; one of these individuals also had reimbursements of more than $100,000. In total, auditors examined $175,618 in travel costs associated with these two individuals. Auditors found the travel expenses for the two individuals selected for audit were documented and adhered to state travel rules and regulations.

Res judicata bars the granting of a wage increase awarded in a second arbitration after the initial arbitration award addressing the same issue involving the same parties was vacated by the Court of Appeals “in its entirety”

Res judicata bars the granting of a wage increase awarded in a second arbitration after the initial arbitration award addressing the same issue involving the same parties was vacated by the Court of Appeals “in its entirety”

Buffalo Professional Firefighters Assn., Inc., IAFF Local 282 v Buffalo Fiscal Stability Auth., 2013 NY Slip Op 02931, Appellate Division, Fourth Department

The Buffalo Fiscal Stability Authority [BFSA] prohibited the City of Buffalo from complying with an arbitration award known as “Rinaldo I” that set a wage increase for the collective bargaining agreement. The Rinaldo I arbitration award was vacated in its entirety by the Court of Appeals.*

Subsequently an arbitration award involving the same parties designated “Rinaldo II” was issued by the arbitrator. Rinaldo II provided for a wage increase with respect to the collective bargaining agreement in effect from July 1, 2002 to June 30, 2004 between Local 282 and the City. BFSA determined that the wage freeze applied to the wages awarded in Rinaldo II and adopted a resolution, Resolution 11-05, that froze the wages awarded in Rinaldo II..

Local 282 filed an Article 78 petition challenging the authority of BFSA prohibiting the City from effecting the wage increase awarded by the arbitrator in Rinaldo II. Supreme Court dismissed Local 282’s petition.

The Appellate Division affirmed the lower court’s ruling, explaining that “Supreme Court properly determined that the instant proceeding is barred by res judicata.”

Although Local 282’s petition challenged a resolution of the BFSA that applied to Rinaldo II rather than Rinaldo I, the Appellate Division ruled that both arbitrations were between the same parties in interest and concern the same cause of action, i.e., the application of the wage freeze to wage rates for the same CBA.” Thus, said the court, “the instant action therefore is barred by res judicata.…”

* Matter of Buffalo Professional Firefighters Assn., Inc., Local 282, IAFF, AFL-CIO-CLC [Masiello], 13 NY3d 803.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02931.htm

The lack of a full transcript of a disciplinary hearing for review by the court requires the annulment of the finding of guilt

The lack of a full transcript of a disciplinary hearing for review by the court requires the annulment of the finding of guilt
Farrell v New York State Off. of the Attorney Gen., 2013 NY Slip Op 05014, Appellate Division, Third Department

In this proceeding the Appellate Division reviewed a determination of Commissioner of Corrections and Community Supervision which found a prisoner guilty of violating a prison disciplinary rule.

The prisoner contended that, among other things, a meaningful review of the Commissioner’s decision by the court was precluded because a significant portion of the hearing was not transcribed.

The Appellate Division agreed, explaining that it appeared that only the first side of the audiotape made during the hearing was transcribed by the stenographer. The stenographer had noted that "[s]econd side of tape not audible - runs on fast speed only," and then “abruptly ended the transcript.”

The court said that it could not ascertain what was on the second side of the tape or if it would have been beneficial to the prisoner's defense. Accordingly, it ruled that the Commissioner’s determination must be annulled and remanded the matter for a new hearing.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_05014.htm