Employee terminated for failure to posses a valid license required to perform the duties of the position

Employee terminated for failure to posses a valid license required to perform the duties of the position

Matter of Rivera v New York City Dept. of Sanitation, 2016 NY Slip Op 05837, Appellate Division, First Department

Supreme Court granted the Article 78 petition filed by probationary sanitation worker Carlos Rivera  seeking a court order annulling Department of Sanitation’s terminating his employment with the Department.

According to the Appellate Division’s decision, Rivera, during his probationary period, had been arrested and charged with Driving While Intoxicated [DWI]. His commercial driver's license, a requirement for employment as a sanitation worker, was suspended and then revoked as a result. The Department filed several disciplinary complaints against Rivera as a result of this incident and he was subsequently terminated.*

Rivera filed an Article 78 petition in Supreme Court seeking to annul Department terminating his employment, which the court granted in form of a “default judgment” as the result of the City’s failure to file a timely answer to Rivera’s petition. The City then filed a motion to vacate the default judgment on the grounds of “law office failure,” which motion was denied by Supreme Court. The City appealed the Supreme Court's decision.

The Appellate Division explained that a movant seeking to vacate a default judgment must [1] move to do so within one year of entry of the default; [2] show a reasonable excuse for the default; and [3] a meritorious defense. The court found that the City had met all three of these requirements and, further, the Appellate Division noted that Rivera did not oppose the City’s application to vacate the default judgment.

Considering the City’s claim of "law office failure" as a reason for its default, the court said that under certain circumstances, law office failure may provide a reasonable excuse for a default. The City’s excuse: Rivera’s was an “e-filed case” and its law office “failed to regularly check its email and, as a result, was unaware of the motion court's order that gave rise to the default.” The Appellate Division found that the City’s excuse was “sufficiently particularized and there is no evidence of willful or contumacious conduct” on its part.

As to the City’s advancing “a meritorious defense,” the court noted that Rivera [1] was a probationary employee at the time he was arrested and charged with DWI and [2] his commercial driver's license, a requirement for employment as a sanitation worker, was suspended and then revoked as a result of this event.

As a probationary employee, said the Appellate Division, Rivera “may be discharged without a hearing or a statement of reasons, in the absence of a demonstration that [his] termination was made in bad faith, for a constitutionally impermissible purpose, or in violation of statutory or decisional law."**

Finding that the record before it “clearly establishes that there were legitimate reasons for terminating [Rivera’s] employment, specifically, his arrest and the revocation of his license.” Further, said Appellate Division, “[t]his is a valid reason for termination even if the charges for which he was arrested were later withdrawn or dismissed.”

As the City’s failure to timely file an answer was neither willful, nor part of a pattern of dilatory behavior, and Rivera points to no evidence that the three-month period of default caused him to change his position, and he has demonstrated no other prejudice, and “in view of the strong public policy of disposing of cases on their merits, [the Appellate Division ruled that Supreme Court had] improvidently exercised its discretion in denying [the City’s] motion to vacate the default.” The Appellate Division then unanimously reversed the lower court’s rulings “on the law,” vacating the default judgment, denying Rivera’s petition and dismissing the proceeding.

* Termination of an employee for failure to posses a valid license required to perform the duties of the position is not disciplinary in nature and thus was subject to neither the pre-termination disciplinary procedures set out in a  collective bargaining agreement nor the provisions of Civil Service Law §75 [Cravatta v New York State Dept. of Transp., 77 AD3d 1399]. Further, in Meliti v Nyquist, 41 NY2d 183, the Court of Appeals held that the suspension of a teacher without pay was appropriate where the teacher lacked the necessary license or certification to teach. With respect to the existence of a “valid license requirement,” see Martin ex rel Lekkas, 86 AD2d 712.

** There is another limitation on such “summary” termination, however. In the event an appointing authority wishes to dismiss a probationary employee before he or she has completed his or her minimum probationary period formal disciplinary action must be initiated and notice and hearing provided [Challandes v Shew, 275 A.D.2d 369].

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_05837.htm

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Recent postings on Employment Law Notes

Recent postings on Employment Law Notes

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By Brandi O. Brown, J.D.

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Forfeiture of employee retirement contributions made to a New York State public retirement system

Forfeiture of employee's retirement contributions made to a New York State public retirement system

United States v. Stevenson, USCA, 2^ndCircuit, Docket 14-1862

Article V, §7 of the New York State Constitution, sometimes referred to as the “Nonimpairment Clause,” provides, in relevant part, that: “membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.” Such systems are "defined benefit" retirement plans.

One of the issues in the Stevenson case was whether Article V, §7 barred a federal district court from directing the forfeiture of an employee's contributions to a New York State public retirement system* as a "substitute asset."

Eric Stevenson, a former Member of the New York State Assembly, was convicted of accepted three bribes in 2012 and 2013 in the total amount of $22,000 in return for various actions to promote certain adult daycare centers including proposing legislation to the New York State Legislature that would have imposed a moratorium on new adult daycare centers, thus favoring certain interested parties.

The jury found Stevenson guilty on all counts and the Federal District Court judge hearing the case, among other things, entered a preliminary order of forfeiture of Stevenson's assets in the amount of $22,000, representing the amount of the bribes. A final judgment, entered on May 23, 2014, including an order of forfeiture that provided, as a substitute asset for forfeiture purposes, “[a]ny and all contributions, funds, benefits, rights to disbursements, or other property held on behalf of, or distributed to, Eric Stevenson, by the New York State and Local Retirement System, … and all property traceable thereto”** up to $22,000.

Stevenson appealed and with respect to the court's “order of forfeiture,” he contended that identifying his pension plan employee contributions as a substitute asset and permitting seizure up to the amount of $22,000 by the Government was error as those contributions were protected by Article V, Section 7 of the New York State Constitution, which, in pertinent part, provides that such a plan’s benefits “shall not be diminished or impaired.”

The Circuit Court of Appeals disagreed and affirmed the lower court’s ruling with respect to the forfeiture of assets and its designating Stevenson's contributions to the Retirement System a substitute asset for purposes of paying the $22,000 penalty imposed by the court.

The court explained that to the extent that there is "a conflict between New York law providing that the employee's pension  is not to be 'diminished or impaired,' and federal law, which authorizes forfeiture 'irrespective of any provision of State law,' of any property derived from the crime of conviction, [see 21 U.S.C. §853(a)], and, where such property cannot be located or has been transferred, of ‘any other property of the defendant’ in the same amount,” Article V, §7 of the New York State Constitution “is preempted to the extent that it would prevent forfeiture of Stevenson’s contributions to or benefits from a state pension or retirement system up to $22,000, the amount ordered forfeited.”

The Circuit Court then affirmed the lower court’s decision, including the sentence imposed, the forfeiture order, and the order identifying substitute assets by the district court.”

In Matter of D'Agostino v DiNapoli, 24 Misc 3d 1090, one of the relatively few State court decisions that consider the extent of the protections provided by Article V, §7 of New York State Constitution's, the court said that Article V, §7 “merely provides that retirement system benefits are contractual in nature and may not be impaired or diminished by state action. Further, said the court, “Such guarantee does not render an individual retirement system member's benefits inviolate.” Rather, the court, citing Matter of Village of Fairport v Newman, 90 AD2d 293, leave to appeal denied 58 NY2d 1112, said "[t]he purpose of the constitutional provision is 'to insure that pension and retirement benefits [are not] subject to the whim of the Legislature or the caprice of the employer.”

Further, explained the D’Agostino court, “[t]here is no constitutional violation unless the contractual benefits are unilaterally diminished,” presumably as a result of an action by the State Legislature, the State or a political subdivision of the State to truncate a retirement allowance otherwise payable, citing Rosen v New York City Teachers' Retirement Bd., 282 App Div 216,  affd 306 NY 625, and Delaney v Regan, 183 AD2d 981.

* The State University’s Optional Retirement Plan, established pursuant to Article 8-B of the Education Law [and similar defined contribution retirement plans established by law] is not a public retirement systems of the State and, as indicated in §396 of the Education Law, the “Employer [is] not liable for [the] payment of benefits.”

** Stevenson did not have sufficient “years of member service” in the Retirement System to have become a “vested” member of the System but the Federal District Court said that he was entitled to a refund of the “member contributions” that he had made as a member of the System.

The Stevenson decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/0227062b-c942-4ce4-8bb4-82668b8dddf0/1/doc/14-1862_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/0227062b-c942-4ce4-8bb4-82668b8dddf0/1/hilite/