Distinguishing between a covered employee and an independent contractor for the purposes of eligibility for unemployment insurance benefits

Distinguishing between a covered employee and an independent contractor for the purposes of eligibility for unemployment insurance benefits

2015 NY Slip Op 04550, Appellate Division, Third Department

A law firm [Firm] appealed a decision of the Unemployment Insurance Appeal Board [Board] which assessed Firm for additional unemployment insurance contributions after ruling that a claimant [Lawyer] for unemployment insurance benefits for eligible for such benefits.

Lawyer had been retained as a "contract attorney" by the Firm to perform document review services in conjunction with the litigation of a class action lawsuit. After his assignment ended, Lawyer applied for unemployment insurance benefits and . The Unemployment Insurance Appeal Board ruled that Lawyer was the Firm’s employee and assessed it for additional unemployment insurance contributions as a result.

The Appellate Division affirmed the Board’s decision explaining that "Whether an employer-employee relationship exists is a factual determination for the Board, and its decision will be upheld if supported by substantial evidence." Citing Matter of LaValley, 120 AD2d 1498, the court said that "in cases where the rendering of professional services is involved, an employment relationship can be found where there is substantial evidence of control over important aspects of the services performed other than results or means."

The decision indicates that Lawyer:

1. was paid an agreed-upon hourly rate and required to work at least 45 hours a week, but not more than 50 hours per week;

2. was given specified hours each day to report to his assigned work station;

3. was required to take a daily unpaid 30 minute lunch break and was occasionally required to report to work on weekends;

4. was allowed to take unpaid days off, provided that he requested the time off in advance;

5. received daily assignments from an associate attorney employed by the Firm and who supervised Lawyer’s work; and

6. assisted in the litigation by providing written memoranda summarizing deposition testimony, work that included Lawyer's attendance at meetings with attorneys from other firms involved in the litigation.

These elements, said the Appellate Division, constituted “substantial evidence” supporting the Board's decision that the Firm retained sufficient overall control of Lawyers services to establish an employment relationship, despite evidence in the record that could support a contrary conclusion.

Significantly, the court commented that “The fact that [Lawyer] signed a written agreement designating him as an independent contractor does not compel a different result, citing Matter of Joyce, 116 AD3d 1132.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04550.htm

Anatomy of an unlawful discrimination complaint

Anatomy of an unlawful discrimination complaint

2015 NY Slip Op 04601, Appellate Division, Second Department

The Plaintiff commenced this action seeking to recover damages for alleged unlawful discrimination and retaliation within the meaning of 42 USC §§1981 and 1983, the “Civil Rights Act” and for alleged violation of Executive Law §296, the State’s Human Rights Law, in connection with his employment at a State agency [Agency].  Supreme Court granted the Agency’s motion for summary judgment dismissing the complaint and Plaintiff appealed.

In considering Plaintiff’s appeal the Appellate Division said:

1. Aplaintiff alleging discrimination in employment has the initial burden to establish a prima facie case of discrimination; and

2. To meet this burden, the plaintiff must show that (1) he or she is a member of a protected class; (2) he or she was qualified to hold the position; (3) he or she was terminated from employment or suffered another adverse employment action; and (4) the discharge or other adverse action occurred under circumstances giving rise to an inference of discrimination.

If the plaintiff is able to satisfy each of these requirements, said the Appellate Division, the burden then shifts to the employer "to rebut the presumption of discrimination by clearly setting forth, through the introduction of admissible evidence, legitimate, independent, and nondiscriminatory reasons to support its employment decision."

If the employer is able to do so, the burden of going forward shifts to the plaintiff and in order to succeed on his or her claim, "the plaintiff must prove that the legitimate reasons proffered by the defendant were merely a pretext for discrimination by demonstrating both that the stated reasons were false and that discrimination was the real reason."

With respect to Supreme Court granting Agency’s motion for summary judgment dismissing Plaintiff’s complaint, the court said to prevail on a motion for summary judgment in a discriminatory employment action, “a defendant must demonstrate either the plaintiff's failure to establish every element of intentional discrimination, or, having offered legitimate, nondiscriminatory reasons for their challenged actions, the absence of a material issue of fact as to whether their explanations were pretextual.”

In this instance the Appellate Division found that after Agency demonstrated a prima facie entitlement to judgment as a matter of law while Plaintiff failed to raise a triable issue of fact as to whether any adverse employment action he allegedly suffered occurred under circumstances giving rise to an inference of discriminatory motive.

Further, the court noted that the Agency’s setting out “legitimate, nondiscriminatory reasons” for its challenged actions, said that Plaintiff failed to raise a triable issue of fact as to whether the Agency’s explanations were pretextual.

While it is unlawful to retaliate against an employee for opposing discriminatory practices, in order to make out a claim for retaliation, the plaintiff must show that (1) he or she has engaged in protected activity; (2) his or her employer was aware of such activity; (3) he or she suffered an adverse employment action based upon the protected activity; and (4) there is a causal connection between the protected activity and the adverse action.

Again, Agency demonstrated, prima facie, its entitlement to judgment as a matter of law on the causes of action alleging retaliation while Plaintiff, again, failed to raise a triable issue of fact as to whether he engaged in a protected activity or that Agency was aware of any such complaint prior to the date on which Plaintiff sent an email specifically complaining of discrimination.

The Appellate Division decided that Plaintiff did not submit sufficient evidence from which a jury could reasonably find a causal connection between any protected activity in which he engaged and any adverse employment action nor did he rebut the Agency’s evidence that any adverse action taken against him was justified by legitimate, nondiscriminatory reasons.

Accordingly, the court held that Supreme Court had properly granted Agency’s motion for summary judgment dismissing the complaint.

The decision is posted on the Internet at:

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http://www.nycourts.gov/reporter/3dseries/2015/2015_04601.htm

Benefit available members of union pursuant to a "Memorandum of Agreement" was a “vested lifetime benefit”

Benefit available members of union pursuant to a "Memorandum of Agreement" was a “vested lifetime benefit”

Port Auth. of N.Y. and N.J. v Union of Automotive Technicians, 2015 NY Slip Op 05114, Appellate Division, First Department

Due to budget constraints, the Port Authority of New York and New Jersey [Port Authority], effective January 1, 2011, discontinued its free E-Z Pass program available to retired Port Authority employee.

The Appellate Division unanimously affirmed a decision by Supreme Court modifying an arbitration award to rule that the E-Z Pass benefit as encompassed in the parties' 2006-2011 Memorandum of Agreement was a vested lifetime benefit available to retired members of the Union of Automotive Technicians in accordance with the provisions set out in the parties' 2006-2011 Memorandum of Agreement.

The court noted that “In light of our disposition of previous appeals raising the same issue, Supreme Court reached the right result in this matter,” citing Port Authority of New York and New Jersey v Port Authority of New York and New Jersey Police Lieutenants Benevolent Association, 124 AD3d 473, among other relevant decisions.

NYPPL’s summary of the Supreme Court’s ruling in the Lieutenants’ case is posted on the Internet at: http://publicpersonnellaw.blogspot.com/2013/06/article-75-petition-seeking-to-confirm.html

The Automotive Technician decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_05114.htm

Challenging an unsatisfactory annual performance rating

Challenging an unsatisfactory annual performance rating

2015 NY Slip Op 04589, Appellate Division, First Department

A teacher [Teacher] brought an Article 78 action against the New York City Department of Education's (DOE) challenging her annual unsatisfactory rating for the 2011-12 school year, Supreme Court dismissed the petition and Teacher appealed.

The Appellate Division sustained the Supreme Court’s ruling holding that Teacher’s unsatisfactory annual rating was not arbitrary and capricious or contrary to law.

Teacher had contended that her supervisor administered the lesson observation on which the rating was based in an arbitrary and capricious manner. The court held that this claim was not supported by the record.*

As to Teacher’s argument that the annual performance rating was made "in violation of lawful procedure" because DOE failed to follow procedural safeguards set forth in their own guidelines, in that it failed to provide her with “a written warning” that she had to improve her performance, the Appellate Division said that Teacher’s argument “lacks merit,” explaining that DOE's rating handbook did not create “any substantive right to receive a written warning” that failure to improve "may result in an unsatisfactory rating."

The Appellate Division also noted that Teacher “went on terminal leave two months after the unsatisfactory observation report,,” retiring one month later, which precluded DOE’s making a second observation which would normally have been the case.

* The court noted that Teacher’s principal's hearing testimony clarifying the reasoning behind the unsatisfactory annual rating.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04589.htm

Discourteousness, refusal to follow directives and failure to accept work assignments lead to employee’s dismissal from the position

Discourteousness, refusal to follow directives and failure to accept work assignments lead to employee’s dismissal from the position2015 NY Slip Op 04746, Appellate Division, First Department

The New City Commissioner of Police Commissioner terminated the services of a civilian employee [Petitioner] of Police Department after she was found guilty of a number of disciplinary charges.

The Appellate Division sustained the Commissioner’s decision.

The court said that substantial evidence supported the determination that Petitioner had engaged in numerous acts of misconduct, including:

1. Discourteousness to coworkers and supervisors;

2. Refusal to follow the directives of her supervisors; and

3. Failure to accept appropriate work assignments.

Although Petitioner contends that the uniformed police personnel were hostile to her because of her union activities, she admitted making some of the charged statements and refusing to accept work assignments.

The Appellate Division also observed that “The record reflects that testimony of a civilian employee also supported some the allegations of misconduct.”

Finding no basis to disturb the credibility determinations of the Hearing Officer, the court said that the penalty of termination did not shock its sense of fairness in view of the number of incidents involved, and given Petitioner's prior disciplinary record.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04746.htm

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Inappropriate sexual relationship with a minor

Inappropriate sexual relationship with a minor

OATH Index No. 1227/15.

Administrative Law Judge Alessandra F. Zorgniotti found that a correction officer had engaged in an inappropriate relationship with a minor. She did not credit respondent's testimony than he thought the minor was 18 years old, because it was contradicted by more credible testimony from the girl, her mother and her step-father, who testified that the step-father than told respondent that the girl was 16 and that he should leave her alone.

Due to respondent's law enforcement status, his actions of pursuing a 16-year girl, taking her places without her parents' knowledge and against their express wishes, and engaging in sexual contact with her bore a nexus to his job. Termination of employment was recommended.  

Posted on the Internet at: http://archive.citylaw.org/wp-content/uploads/sites/17/oath/15-1227.pdf

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Disclosure of confidential information

Disclosure of confidential information
OATH Index No. 984/15.

Administrative Law Judge John B. Spooner sustained charges that agency attorney had disclosed confidential information through emails to a private attorney representing an inmate in a lawsuit against the City in violation of Department rules and state and city laws.

ALJ Spooner found mitigation in the attorney’s long unblemished service record, his forthrightness when confronted with the emails, his acknowledgment that he made a mistake, his expression of remorse and previously served 30-day pre-hearing suspension.

Posted on the Internet at:http://archive.citylaw.org/wp-content/uploads/sites/17/oath/15_cases/15-984.pdf[Modified on penalty: Commissioner imposed the penalty of termination of employment, finding the attorney had breached the attorney-client privilege and his disclosures rendered him a security risk to the Department.]

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Definition of full day worked for certain employees who contract for other than a 5-day standard work week [I.D. No. AAC-24-15-00004-P] amending 2 NYCRR 315.3(b)(4)(ii)

Definition of full day worked for certain employees who contract for other than a 5-day standard work week [I.D. No. AAC-24-15-00004-P] amending 2 NYCRR 315.3(b)(4)(ii)

Source: New York State Register, June 17, 2015

The purpose of the amendment of 2 NYCRR 315.3(b)(4)(ii), show below in italics, is to define full day worked for certain employees who contract for other than a 5 day standard work week. This is a “Consensus Rule Making Determination” for the sole purpose of defining a full day worked for certain full time employees. This amendment relates to the definition of a full day worked for certain full time employees and it has been determined that no person is likely to object to the adoption of the rule as written.

(ii) A full day worked shall be any day on which the employee performs paid service for at least the standard number of hours required for the position in which such service is rendered. In no event shall less than six hours be considered to be a full day.

For full time employees performing services pursuant to a collective bargaining agreement or contract that provides for other than a five day standard work week paid at straight time, an employer may report them at full time per their payroll cycle, provided the cumulative number of hours equal at least 120 hours a month. A full day worked for such employees shall be a minimum of six hours of accumulated time worked and paid at the straight time rate. The minimum number of hours which shall be reported as days worked, for the purpose of reporting preliminary credit, for a full year of service credit for such employees is 1,560 hours.

Public comment will be received until: 45 days after publication of this notice – June 17, 2015. Views or arguments may be submitted to:

Jamie Elacqua, Office of the State Comptroller, 110 State Street, Albany, NY 12236, (518) 473-4146, 

Email: jelacqua@osc.state.ny.us

Termination a reasonable disciplinary penalty under the circumstances

Termination a reasonable disciplinary penalty under the circumstances
2015 NY Slip Op 04923, Appellate Division, First Department

Holding that substantial evidence supported the determination that the police officer “disobeyed a lawful order of her supervisor and engaged in conduct prejudicial to the good order, efficiency or discipline of the police department,” the Appellate Division said imposing the penalty of dismissal from the police force is not so disproportionate as to shock the conscience, citing Matter of Kelly v Safir, 96 NY2d 32.

The court said that the record showed that the officer “failed to obey two orders directing her to go out on assignment and then, by her actions, challenged and threatened her supervisor.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04923.htm

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An administrative agency found to have acted in a manner inconsistent with its own rules and regulations will be deemed to have acted arbitrarily

An administrative agency found to have acted in a manner inconsistent with its own rules and regulations will be deemed to have acted arbitrarily

Matter of Mid Island Therapy Associations., LLC v New York State Educ. Dept., 2015 NY Slip Op 04707, Appellate Division, Third Department

Supreme Court dismissed Mid Island Therapy Association's [Mid Island] Article3 78 application to review a determination of the New York State Education Department’s, [DOE] setting Mid Island’s payment “reconciliation rates” for special education itinerant teacher services to preschool children with disabilities for certain school years. Such payments were to be made pursuant to contracts with the New York City Department of Education (NYCDOE) and the Counties of Westchester, Nassau and Suffolk.

A percentage of the municipalities' payments to Mid Island are reimbursed by DOE based on rates that DOE sets in accordance with its regulations. Where the reconciliation rate differs from the prospective rate that was initially used, a service provider such as Mid Island must pay back funds if it was overpaid and, in the alternative, it receives additional reimbursement if underpaid. This rate is to be calculated after a provider supplies DOE with an independently audited Consolidated Fiscal Report (CFR) and supporting independently audited financial statements.

Mid Island had been paid prospective rates of $49 and $50 per service unit, respectively, for the periods in question and its subsequent CFR and financial data reportedly resulted in reconciliation rates of $50 per service unit for each of the relevant years. DOE calculated the respective reconciliation rates as $49 and $47 per service unit, the key reason for the difference in rates being that DOE used total service units reported by the municipalities.

Mid Island disputed these rates and started the process of reconciling the discrepancies between service units that it had reported and those reported by the municipalities and ultimately challenged the reconciliation rates for the 2008-2009 and 2009-2010 school years, as well as the prospective rate for 2010-2011 and ultimately Supreme Court dismissed its Article 78 petition.

Mid Island appealed, contending that DOE “failed to follow its own regulations and otherwise acted arbitrarily," primarily by relying upon unaudited information from the municipalities, disregarding Mid Island's audited CFR and financial data, and refusing to consider Mid Island's explanation for the discrepancies between its audited information and the municipalities' data.”

The Appellate Division said that a court's review of an administrative agency's determination is limited to "ascertain[ing] whether there is a rational basis for the action in question or whether it is arbitrary and capricious," citing Gilman v New York State Div. of Housing and Community Renewal, 99 NY2d 144. The court also noted that it had “previously recognized that [DOE] has "broad discretion in setting the reconciliation rate."

However, said the Appellate Division, an agency determination arrived at in a manner inconsistent with its own regulations is not supported by a rational basis and although "an agency's interpretation of its own regulation is entitled to deference [citations omitted] courts are not required to embrace a regulatory construction that conflicts with the plain meaning of the promulgated language."

Here, said the court, DOE’s regulations define the reconciliation rate as "a tuition rate that has been calculated using actual program and financial data with the applicable reimbursement methodology applied” [and] the tuition rate "shall be based on financial reports, as prescribed by the commissioner, supported by financial statements certified by a licensed or certified public accountant independent of the program's operation" [and] the "[CFR] certified by a licensed or certified public accountant independent of the program's operation."

The Appellate Division said that the intent of the regulations, “consistent with common sense and good government,” is to gather and use correct data and the regulations provide no authority for DOE relying solely on unaudited information from municipalities. Where a service provider that has adhered to the regulations and provided a CFR and financial statement, both audited, it should be afforded a reasonable opportunity to explain and/or reconcile its information with the unaudited information of a municipality.  DOE, said the court, cannot simply reject audited information by reason of the existence of less reliable information without some articulable rational basis.

Noting that Mid Island “provided independently audited data in compliance with the regulations, the court said that:

1. Information supplied by the municipalities, and particularly NYCDOE, varied from Mid Island’s data;

2. NYCDOE had a history of supplying information that was not correct citing Matter of Mid. Is. Therapy Assoc., LLC v New York State Dept. of Educ., 99 AD3d at 1083 in which it was reporting that the State Comptroller upheld Mid Island's tuition rates for 2007-2008 based on 87,907 service units where NYCDOE had reported 100,669 service units; and

3. DOE made “little effort” to verify the municipalities' information but nonetheless accepted the municipalities' information and disregarded Mid Island’s data.

This, said the Appellate Division, was not an agency simply weighing and choosing between relatively equivalent but conflicting data, “particularly in light of the regulatory primacy for independently audited information,” with which Mid Island had complied, and the lack of regulatory authority for wholesale reliance on other information.

Under all the circumstances the Appellate Division concluded that DOE acted arbitrarily and inconsistent with its own regulations and, accordingly, its determination regarding the 2008-2009 and 2009-2010 reconciliation rates must be annulled.

Further, said the court, the 2010-2011 prospective rate must be annulled as it was based on the 2009-2010 reconciliation rate annulled herein

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_04707.htm