Attempt to obtain a "judicial reformation" of a provision in a collective bargaining agreement on the ground of "mutual mistake" fails

Attempt to obtain a "judicial reformation" of a provision in a collective bargaining agreement on the ground of "mutual mistake" fails

Source: NYMuniBlog

Attorneys James E. Beyerand Kate L. Hill of Harris Beach writing in NYMuniBlog summarized a Pennsylvania court decision, Matter of A.S. and R.S. v. Office of Dispute Resolution (Quakertown Community School District), that they characterize as “unequivocally a cautionary tale of contract law.” Their summary of the court's ruling is posted on the Internet at http://nymuniblog.com/lessons-in-diligence-reviewing-settlement-agreements-post-negotiation/

It appears that a Pennsylvania school district signed off on a settlement agreement in an Individuals with Disabilities Education Act (IDEA) matter without reviewing a signed copy of the revised original agreement it received from the student’s parents. The parents had amended their copy of the settlement agreement before returning it to the school.

This came to light when parents submitted an invoice for reimbursement for educational services that had been denied during negotiations. The parents argued that the approval of the settlement agreement by the district was the result of the district’s negligence rather than fraud on the part of the parents.

The court agreed with the parents and explained that the district’s fatal error was failing to have its counsel review the agreement [as] the district could have easily discovered the changes if someone compared the two agreements.

Perhaps the classic New York Personnel Law decision illustrating the unintended consequence that may be visited on a party to a contract is the fall-out from a collective bargaining agreement negotiated by a city and its police officers' union. 

A contract provision -- referred to as the "207-c benefits" clause – in the agreement  provided that permanently disabled police officers injured in the line of duty would receive the same benefits provided firefighters receiving an accidental disability retirement allowance pursuant to General Municipal Law §207-a.

In a nutshell, the disabled firefighter’s employer supplements his or her disability retirement allowance whereby the firefighter “shall continue to receive from the municipality or fire district by which he [or she] is employed, until such time as he [or she] shall have attained the mandatory service retirement age applicable to him [or her] or shall have attained the age or performed the period of service specified by applicable law for the termination of his [or her] service, the difference between the amounts received under such allowance or pension and the amount of his[or her] regular salary or wages." Such a salary supplementation is not available to permanently disabled police officer pursuant to GML §207-c.

According to the decision, the employer proposed to include language tracking the “disability” provisions of the General Municipal Law §207-c in the collective bargaining agreement and provided the union with a number of examples, including police contracts that cited GML §207-c as well as the employer's own agreement with its firefighters which cited GML §207-a. The proposed agreement with the police unit was prepared by the employer and included language providing police officers eligible for a GML §207-c benefit would be provided with the same benefit that a disabled firefighter eligible for a GML §207-a(2) salary supplement would receive.

Although the employer subsequently claimed it had discovered the "mistaken inclusion of this [§207-a] benefit" in 1966, the Appellate Division noted that “matters remained essentially dormant until February 4, 1997, when a disabled police officer applied for the supplemental [§207-a salary] payments provided under the parties' 207-c agreement.”

In response to the employer’s refusal to provide the police officer with this “contract benefit,” the union demanded that the matter be submitted to contract arbitration, whereupon the employer filed a petition seeking a judicial stay of the arbitration and for a "reformation of the 207-c agreement on the ground of mutual mistake."

The Appellate Division* ruled that the matter should submitted to arbitration.

Ultimately, the arbitrator, Howard A. Rubenstein, Esq., decided that the language used in the collective bargaining agreement controlled and thus the employer was required to provide its police officers disabled in the performance of their law enforcement duties the benefits provided firefighters mandated by General Municipal Law Section 207-a in accordance with the terms of the agreement.
NYPPL

* The Appellate Division's decision is summarized at http://publicpersonnellaw.blogspot.com/2010/11/claim-of-mistake-does-not-permit-party.html

Computer help desk specialist found guilty of insubordination after ignoring supervisor’s instructions not to answer phone calls with a “robotic voice”

Computer help desk specialist found guilty of insubordination after ignoring supervisor’s instructions not to answer phone calls with a “robotic voice”

OATH Index No. 108/14

A computer specialist employed by the City of New York was charged with insubordination for answering phone calls to the IT Help Desk in a robotic voice and failing to properly and timely process IT Help Desk tickets.

The employee denied answering calls in a robotic voice, and asserted that he was following the greeting script provided by his supervisor and speaking slowly and clearly so callers would understand him.

The employee’s supervisor, on the other hand, had sent a number of e-mail to the employee including one in which she stated that “a caller had asked whether there was a new automated answering system, and had hung up when she heard “the robot” answer the phone because she needed to speak to a human about her issue.”

OATH Administrative Law Judge Kara J. Miller found that employee was capable of answering calls in a normal tone but chose to use a robotic voice despite being directed by his supervisor to stop. She found his conduct to be insubordinate, observing that “An employee is obligated to obey the lawful order of a supervisor and, if he disagrees with it or feels it to be improper, to grieve it at a later time through available procedures.”

Judge Miller also found that employee disobeyed his supervisor’s orders by failing to properly and timely process IT tickets.

The ALJ recommended that the employee be suspended without pay for 20 days.

The decision is posted on the Internet at:’

http://archive.citylaw.org/oath/11_Cases/14-108.pdf

New York State Comptroller Thomas P. DiNapoli issues fiscal stress scores for upstate political subdivisions of the State

New York State Comptroller Thomas P. DiNapoli issues fiscal stress scores for upstate political subdivisions of the State
Monitoring System Has Evaluated Nearly 2,300 Local Governments

On May 2, 2014 New York State Comptroller Thomas P. DiNapoli announced fiscal stress rankings for several upstate cities. With today’s announcement, DiNapoli’s office has completed the initial scoring for all local governments and school districts in New York.

The creation of the ‘early warning’ monitoring system is the centerpiece of the Comptroller’s fiscal stress initiative. The Fiscal Stress Monitoring System is based on financial information provided to DiNapoli’s office by local communities and uses financial indicators that include year-end fund balance, cash position and patterns of operating deficits, to create an overall fiscal stress score. The system uses a 100-point scale to classify whether a municipality is in significant fiscal stress (65-100%), in moderate fiscal stress (55-65%), is susceptible to fiscal stress (45-55%), or no designation (below 45%).

Since implementing the system in 2013, the Comptroller’s staff has evaluated the fiscal condition of nearly 2,300 municipalities and school districts across the state.To date, DiNapoli’s monitoring system has identified a total of 142 municipalities in some level of fiscal stress. This includes 16 counties, 18 towns, five cities, 16 villages and 87 school districts.

The fiscal stress scores for 15 cities and villages with fiscal year ends that range from March 31, 2013 to July 3, 2013 announced on May 2, 2014 includes the cities of Batavia (0%), Buffalo (15.8%), Corning (15.8%), Olean (11.7%), Rochester (20.4%), Syracuse (34.2%) and Watertown (9.6%). These municipalities were each classified in the no designation category.

To search for a specific local government’s fiscal stress scores, visit:
http://wwe1.osc.state.ny.us/localgov/fiscalmonitoring/fsi1a.cfm

For an overview of Comptroller DiNapoli’s Fiscal Monitoring System, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm
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Employee benefits available to retirees set out in a "memorandum of agreement" to a collective bargaining agreement

Employee benefits available to retirees set out in a "memorandum of agreement" to a collective bargaining agreement
Port Auth. of N.Y. & N.J. v Local Union No. 3, 2014 NY Slip Op 03025, Appellate Division, First Department

A Memorandum of Agreement (MOA) supplementing the collective bargaining agreement between the parties provided that "During the term of the Agreement [June 4, 2002 through June 3, 2006], employees in the covered membership will continue to be eligible to receive employee commutation passes and personal passes as per the current practice."

As to retired negotiating unit employees, the relevant portion of the MOA included the following provision: "Retired employees . . . receive the same allowance to which they would be entitled if their Port Authority service was not interrupted."

An arbitrator ruled that this language in the MOA supported Local Union #3’s contention that the Port Authority may not unilaterally eliminate the "E-ZPass" benefit, i.e., free passage at Port Authority bridges and tunnels, for retirees. 

In addressing the Port Authority's challenge to the arbitration award the Appellate Division said that the arbitrator did not "give a totally irrational construction to the contractual provisions in dispute."

Thus, said the court, the arbitrator’s ruling did not constitute a remaking of the collective bargaining agreement between the parties.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_03025.htm

Employer’s unilateral discontinuing its past practice of paying the full cost of health insurance for its retirees held a violation of §209-a.1(d) of the Taylor Law

Employer’s unilateral discontinuing its past practice of paying the full cost of health insurance for its retirees held a violation of §209-a.1(d) of the Taylor Law

Improper Employer Practice Case No. U-31625 [PERB]

A collective bargaining agreement [CBA] with a term of June 1, 2003 to May 31, 2007, was the last agreement that a former collective bargaining representative negotiated with the Village. Article 15, §4 of that agreement provides that the Village will pay the full cost of health insurance premiums for unit employees hired before December 31,1988, and that employees hired after that date will contribute to the cost of their health insurance premiums if future annual increases exceed a certain amount. Article 15 also authorizes the Village to collect the amount of the employee contribution through payroll deduction. That provision was first included in the 1988-1991 CBA and was continued unchanged in all subsequent agreements, up to and including the 2003-2007 CBA.

Despite the existence and continuation of language set out in the 1988-1991 CBA providing for a contribution to health insurance premiums by post-1988 employees, for seventeen years the Village never sought to require unit employees to pay such contributions. However, on June 1, 2005, the Village began deducting the contractual health insurance contribution from the pay of post-1988 employees.

A contract grievance was filed and the arbitrator, in an award dated June 23, 2006, found that the Village did not violate the CBA when it began collecting the contractual health insurance contribution in 2005.

The first CBA negotiated by a successor collective bargaining representative with the Village had a term of June 1, 2007 to May 31, 2012 and provided for employee contributions for health insurance.   

However, all CBAs up to and including the 2003-2007 agreement were silent with respect to the payment of health insurance benefits to employees during their retirement from the Village and until August 2011, the Village paid the entire cost of health insurance premiums for all unit employees upon and during their retirement. Further, there was testimony in the record in the instant hearing that when the parties were negotiating employee contributions towards health care premiums, they were discussing contributions to be paid by active employees and that as the “offer letter” that resulted in the new CBAs did not contain the word “active,” it was subsequently added “to ensure that the health insurance provision [in the collective bargaining agreement] was not interpreted to apply to retirees.”

The parties stipulated that two post-1988 employees retired in, respectively, April and September, 2004, and that the Village paid the full cost of health insurance for them while they were employed and has continued to do so during their retirement

In August 2011 a unit employee, who had initially commenced his employment with the Village after December 31, 1988, retired. Immediately before his retirement, the employee was contributing towards the  cost of his health insurance premium and the Village was paying the remainder. Upon his retirement, the Village continued to charge the individual a ten percent contribution and to pay the remainder of the cost of his health insurance premium. This individual was the first unit employee who, upon retirement, was required to pay a contribution towards the cost of his health insurance premium.

A Public Employment Relations Board Administrative Law Judge found that the 2007-2012 CBAs, and all prior agreements, “simply does not refer to retirees or what health insurance benefit current employees will receive in retirement.” Further, the ALJ found §4 of Article 15 of the 1988-1991 agreement is appropriately interpreted as silent with respect to the practice here in issue. This finding, said the ALJ, was supported not only by the plain language of that provision but by the fact that "when the parties intended to affect a benefit granted to current employees that continues into retirement, they specifically so state.”

Further, said the ALJ, “the record evidence regarding the negotiations for the 2003-2007 CBA clearly shows that the parties did not negotiate the issue of what current employees would receive in retirement.”

Addressing the employee organization’s alleged past practice claim, the Administrative Law Judge explained that “To establish an enforceable past practice that cannot be unilaterally changed without negotiation, the charging party must demonstrate that the ‘practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected unit employees that the [practice] would continue.’ In addition, the practice must concern a mandatory subject of negotiation.”

As to the argument advanced by the Village that PERB lacked jurisdiction and the employee organization lacked standing to consider the employee organization's allegations because the complaint pertains to retirees, the ALJ said that the charge filed by the employee organization “makes clear that it is not seeking to enforce the rights of already retired persons, but to enforce the practice with respect to current employees who retire in the future.”

The Village also contended that the subject matter in issue is nonmandatorily and not negotiable because it pertains to retirement benefits,* The ALJ pointed out that although PERB has held that a demand for health insurance benefits for former employees who have already retired is nonmandatory, the subject of health insurance benefits for current employees upon their retirement constitutes a form of deferred compensation and is mandatorily negotiable.

The Administrative Law Judge found that an employer’s unilateral change of an enforceable past practice concerning health care benefits for current employees upon their retirement violates §209-a.1(d) of the Taylor Law.The ALJ also found that the record shows that the unit employees were aware of the practice regarding their receipt of fully paid health insurance during retirement and that they expected the practice to continue.

Holding that the Village violated §209-a.1(d) of the Taylor Law, the Administrative Law Judge ordered the Village to:

1. Rescind its directive that unit employees hired after December 31, 1988, will be required to pay a health insurance contribution during retirement; and

2. Not unilaterally change the past practice of paying the full cost of health insurance premiums for current unit employees during retirement; and

3. Make whole any unit employees who retired during or after August 2011 and who have been required to contribute towards the cost of health insurance.

* In Lippman v Sewanhaka Central High School District, 66 NY2d 313, the court held that health insurance was not a retirement benefit within the meaning of Article 5, Section 7, of the State Constitution.
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Post-hearing conduct of the employee not considered by the hearing officer in making an administrative decision

Post-hearing conduct of the employee not considered by the hearing officer in making an administrative decision

OATH Index No. 1233/14

OATH Administrative Law Judge Tynia D. Richard presided at a Civil Service Law §72 disability proceeding initiated by the appointing authority. The employer alleged that the individual was “mentally unfit to perform the duties of his position.” The employee denied the allegation.

Judge Richard found the evidence supported the medical opinion of a board certified psychiatrist that the individual was unfit to perform the duties of his position due to a psychotic condition, known as delusional disorder of a persecutory nature, that impeded his ability to make basic engagements with reality and recommended that the employee be placed on leave pursuant to Civil Service Law §72.

The employer subsequently submitted an e-mail requested an “expedited decision” based on the employee’s conduct after the hearing had been closed. The employee’s attorney sent an e-mail objecting to the employee’s post hearing conduct being made a part of the record in this case so as to form the basis for expediting a decision.

The ALJ advised the parties that “it was not proper to put additional facts before me as the record of the case is closed.”  Judge Richard also noted the procedure that the parities were to use in seeking an expedited decision. However, said Judge Richard, a formal request for an expedited decision was never filed.

Although Judge Richard entered the e-mails into the record, she advised the parties that she had not taken the new allegations into account in her analysis of the case nor in making her determination.

The determination: Judge Richard found that the employee was unfit to remain in his position and recommended that he be placed on leave pursuant to §72 of the Civil Service Law, which recommendation was adopted by the appointing authority.

The decision is posted on the Internet at:

 http://archive.citylaw.org/oath/11_Cases/14-1233.pdf
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Filing fraudulent documents to obtain a benefit

Filing fraudulent documents to obtain a benefit

OATH Index No. 229/14

A New York City correction officer was charged with tendering fraudulent documents to obtain subsidized housing benefits, establishing residency in another state for purposes of engaging in unauthorized outside employment, and engaging in unauthorized outside employment.

OATH Administrative Law Judge Astrid B. Gloade found that the officer underreported her income to obtain Section 8 housing benefits*and that although this misconduct   occurred when the employee was “off-duty” an employer may discipline an employee for off-duty misconduct where there is sufficient nexus between the conduct to be

sanctioned and the employee’s job position, citing Villanueva v. Simpson, 69 N.Y.2d 1034.

Judge Gloade also found the the employee had an unauthorized job while on a leave of absence from the Department.

The residency charge was dismissed by the ALJ, who found that the employer failed to prove that the correction officer established residency in another state for purposes of engaging in outside employment..

Judge Gloade, however, recommended that the correction officer be terminated from her position on the basis of charges that were proven by the agency.

* The employee “plead guilty to disorderly conduct (Penal Law §240.20) and agreed to pay restitution in the amount of $19,127 to the federal government within one year” with respect to her obtaining Section 8 housing benefits.

The decision is posted on the Internet at:

http://archive.citylaw.org/oath/11_Cases/14-229.pdf

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The doctrine of respondeat superior

The doctrine ofrespondeat superior

Selmani v City of New York, 2014 NY Slip Op 02764, Appellate Division, Second Department

In this action the Appellate Division sets out the basics regarding the doctrine of respondeat superior.

Essentially, said the court, the doctrine of respondeat superior will hold an employer vicariously liable for torts committed by an employee acting within the scope of the individual’s employment. Pursuant to this doctrine, the employer may be liable when the employee acts negligently or intentionally, so long as the tortious conduct is generally foreseeable and a natural incident of the individual’s employment.

The Appellate Division indicated that:

1. "An employee's actions fall within the scope of employment where the purpose in performing such actions is to further the employer's interest, or to carry out duties incumbent upon the employee in furthering the employer's business'.”

2. "An act is considered to be within the scope of employment if it is performed while the employee is engaged generally in the business of the employer, or if the act may be reasonably said to be necessary or incidental to such employment."

3. “Where, however, an employee's actions are taken for wholly personal reasons, which are not job related, the [employee’s] actions cannot be said to fall within the scope of employment.”

4. “In instances where vicarious liability for an employee's torts cannot be imposed upon an employer, a direct cause of action against the employer for its own conduct, be it negligent hiring, supervision, or other negligence, may still be maintained.”

In this actions certain patrons at restaurant alleged that the individual defendants named in their compliant, who were members of the employer’s Fire Department, entered the restaurant with coworkers, including supervisors. The group of firefighters had allegedly come from a Fire Department annual dinner held at another location and continued celebrating and drinking at the restaurant.

One of the injured plaintiffs allegedly accidentally spilled a drink on a firefighter and was allegedly attacked and assaulted by the named defendant-firefighters. The employer moved for summary judgment dismissing the complaint insofar as asserted it. The Supreme Court granted the motion.

The Appellate Division modified the Supreme Court’s order by deleting the provision granting that branch of the employer’s motion for summary judgment dismissing the causes of action alleging negligent hiring, supervision, training, and retention insofar as asserted against them. The court, instead, substituted a provision denying that branch of the motion; as so modified, affirmed the Supreme Court’s order.

The Appellate Division explained that although Supreme Court properly granted” the employer’s motion for summary judgment dismissing the causes of action alleging vicarious liability, as the employer had established its prima facie entitlement to judgment as a matter of law by demonstrating that the tortious conduct of named defendant-firefighters was not within the scope of their employment,* it failed to rebut the plaintiffs’ claims of alleged “negligent hiring, supervision, training, and retention,” and thus the employer did not establish its entitlement to summary judgment as a matter of law on that branch of the plaintiffs' complaint.

The employer, said the court, failed to submit any evidence demonstrating that it did not know or have reason to know of defendant-firefighters’ alleged “propensity for assaultive conduct” nor did the employer submit evidence demonstrating that any such alleged negligence was not a proximate cause of the injured plaintiffs' injuries.

* This finding suggests that the defendant–firefighters can neither claim “defense nor indemnification” from their employer.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_02764.htm

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Civil Service Commission's decision in an appeal to the employer's disciplinary determination is reviewable by the court

Civil Service Commission's decision in an appeal to the employer's disciplinary determination is reviewable by the court

City School District of Lockport v. Cappola, 83 A.D.2d 751, motion for leave to appeal denied, 57 N.Y.2d 607

An employee appealed the employer’s finding that the individual was guilty of certain disciplinary charges it filed against the worker pursuant to §75 of the Civil Service Law and the penalty it imposed, suspension without pay for two days, to the Civil Service Commission as provided by §76.1 of the Civil Service Law.

§76.1, in pertinent part, provides as follows:  “Any officer or employee believing himself aggrieved by a penalty or punishment of demotion in or dismissal from the service, or suspension without pay, or a fine, or an official reprimand, unaccompanied by a remittance of said officer or employee's prehearing suspension without pay, imposed pursuant to the provisions of section seventy-five of this chapter, may appeal from such determination either by an application to the state or municipal commission having jurisdiction, or by an application to the court in accordance with the provisions of article seventy-eight of the civil practice law and rules.”

The Commission vacated the employer’s determination, ruling that there was insufficient evidence in the record to support the findings of the hearing officer.

The Employer appealed the Commission’s determination.

Noting that although the text of the Civil Service Law §76.3 states, in pertinent part, “The decision of such [state or municipal] civil service commission shall be final and conclusive, and not subject to further review in any court.” the Appellate Division ruled that the Commission’s decision was, indeed, reviewable by the court, explaining that “Despite the language which seems to preclude judicial review, a CPLR article 78 proceeding will lie where it is alleged that the Commission's decision was ‘purely arbitrary’ or where the penalty imposed by the Commission is challenged as an abuse of discretion.”

The court then sustained the Commission’s decision as reasonable.

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Complaint alleging violations of the State’s and New York City’s Human Rights Laws dismissed for failure to establish a prima facie case of unlawful discrimination

Complaint alleging violations of the State’s and New York City’s Human Rights Laws dismissed for failure to establish a prima facie case of unlawful discrimination

2014 NY Slip Op 02696, Appellate Division, First Department

State Supreme Court Judge Arthur F. Engoron granted the employer’s motion to dismiss the unlawful discrimination, hostile work environment, and retaliation claims under the State and City Human Rights Laws (HRL) (Executive Law §290 et seq.; Administrative Code of City of NY §8-101 et seq.), filed by one of its employees, [Plaintiff].

Construing the complaint liberally, presuming its factual allegations to be true, and according it the benefit of every possible favorable inference, the Appellate Division sustained the lower court’s ruling explaining that Plaintiff failed to adequately plead that she was subjected to an adverse employment action as none of the allegations set out in her complaint rises to the level of an actionable adverse employment action.

In addition the court found that Plaintiff failed to adequately plead discriminatory animus, which is fatal to both her discrimination and hostile environment claims as her complaint does not contain any allegations of any comments or references to Plaintiff's age or race made by any employee of employer.

Further, said the Appellate Division, Plaintiff’s petition does not contain any factual allegations demonstrating that similarly situated individuals who did not share Plaintiff's protected characteristics were treated more favorably than Plaintiff and her “conclusory allegations of a hostile environment are insufficient to state a claim under either the State or City Human Rights Laws.

Plaintiff’s allegations of “retaliation” faired no better as she failed to plead any facts regarding when the alleged retaliatory incidents occurred or how those incidents were causally connected to any protected activity, nor did she state the substance of her alleged complaints, to whom she allegedly complained, or when such complaints were made.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_02696.htm
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