Audits issued by the New York State Comptroller during the week ending April 15, 2017 Source: Office of the State Comptroller

Audits issued by the New York State Comptroller during the week ending April 15, 2017
Source: Office of the State Comptroller

Links to material posted on the Internet highlighted in COLOR

Audit finds major problems with City of Rochester School District's payments

The Rochester City School District's payroll processes are disorganized, highly decentralized and not administered uniformly, resulting in errors that are costing taxpayers, according to an auditreleased by State Comptroller Thomas P. DiNapoli.

Auditors also found numerous problems with how the district managed its purchases.

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

Town of Arietta – Budgeting

Buffalo Sewer Authority – Industrial Waste Section

Town of Cheektowaga – Credit Card Purchases

Town of Dover – Fire Protection and Ambulance Services

Village of Ellicottville – Procurement

Genesee County Soil and Water Conservation District – Cash Receipts and Disbursements

Village of Malverne – Procurement

Village of Pelham – Information Technology

Rochester Land Bank Corporation – Monitoring Subcontractor Performance

Schroon Lake Fire District – Cash Disbursements

Village of Speculator – Claims Auditing

and the

Village of Walton – Bio-Digester Capital Plan.

A disciplinary hearing officer may not consider disciplinary charges and specifications not preferred against an employee

A disciplinary hearing officer may not consider disciplinary charges and specifications not preferred against an employee
Nitti v County of Tioga, 2017 NY Slip Op 02868, Appellate Division, Third Department

The appointing authority brought disciplinary charges against an employee [Petitioner]  alleging that she, among other things, made three false statements to a subordinate employee and to the appointing authority about her friend's Medicaid application. 

After a Civil Service Law §75 hearing, a Hearing Officer found that the evidence supported the charges and specifications filed against Petitioner and recommended that she be terminated from employment.

A deputy of the appointing authority adopted the Hearing Officer's findings and recommendations and concluding that termination of Petitioner's employment was the appropriate penalty. Petitioner commenced [1] a proceeding pursuant to CPLR Article 78 contending that the Hearing Officer's findings were not supported by substantial evidence and [2] an action for declaratory judgment seeking, among other things, a court order annulling the deputy's determination.

Although Petitioner initially raised the issue of substantial evidence she subsequently abandoned that argument by failing to raise it in her brief presented to the Appellate Division. Instead Petitioner contended that the Hearing Officer violated her due process rights by finding her guilty of uncharged conduct, i.e., that she deliberately committed fraud by trying to obtain Medicaid benefits for her friend when she knew — and attempted to conceal — that the friend was not financially eligible for the benefits.

While the Appellate Division agreed that it is certainly true that a disciplinary hearing must be limited to the charges and specifications preferred against an employee, the court said that a review of the Hearing Officer's written recommendations revealed that, although he "note[d]" his belief that Petitioner's intent was to submit a fraudulent Medicaid application given her friend's "obvious lack of financial eligibility," the ultimate recommendations of guilt were limited solely to the evidence of Petitioner's charged misconduct.

Indeed, said the court, "the Hearing Officer made clear that his findings of guilt were based upon the evidence that Petitioner lied about who signed the Medicaid application and her 'false representations' to her subordinate and the Commissioner." Accordingly, the Appellate Division said that it could not agree with Petitioner that she was found guilty based upon conduct outside the scope set out in the notice of disciplinary charges served upon her.

Turning to the penalty imposed, termination from her employment, the court said that "in light of the responsibilities inherent in Petitioner's high-level position in which she supervised approximately 45 employees, '[w]e do not find that termination of Petitioner's employment is so disproportionate to the offense[s] as to be shocking to one's sense of fairness.'"

However, as Petitioner also had sought declaratory relief, the Appellate Division observed that such relief is not authorized "in a transferred proceeding pursuant to CPLR 7804(g) to the Appellate Division." There, ruled the Appellate Division, that part of the matter "must be remitted to Supreme Court for the entry of an appropriate judgment thereon."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02868.htm

_____________________

The Discipline Book - A 458 page guide to disciplinary actions involving public officers and employees. For more information click on http://booklocker.com/books/5215.html

_____________________

Employer's reimbursing its retirees' Medicare Part B premiums for 20+ years held to be a past practice within the meaning of the Taylor Law

Employer's reimbursing its retirees' Medicare Part B premiums for 20+ years held to be a past practice within the meaning of the Taylor Law
Albany Police Officers Union, Local 2841, Law Enforcement Officers Union Dist. Council 82, AFSCME, AFL-CIO v New York Pub. Empl. Relations Bd., 2017 NY Slip Op 02719, Appellate Division, Third Department

Since the late 1980s, the City of Albany [City] consistently reimbursed Albany Police Officers Union [Union]members for their Medicare Part B monthly premiums upon their retirement.

In October 2008, the City sent a notice to all retirees of various changes to the City's available health plans. As to Medicare Part B reimbursements, the notice advised the retirees that "[u]nder the City's current policy, the City will reimburse you the Medicare Part B premium on a monthly basis."

A separate notice of the same date was distributed to the active members similarly advising them of various changes to the offered health plans but did not mention anything about Medicare Part B reimbursements.

In October 2009, the City sent a notice to all retirees advising them again of changes to the offered health plans. This notice, however, further stated that, as of December 31, 2009, "the City would no longer reimburse Medicare Part B premiums whose effective date for Part B was January 1, 2010." In addition in October 2009 a notice was sent to all active members in the negotiating unit that also advised them of changes to the offered health plans but, once again, omitted any reference to Medicare Part B premium reimbursements.

The Union filed an improper practice charge with the Public Employment Relations Board (PERB) alleging that the City violated Civil Service Law §209-a(1)(d) by, among other things, unilaterally discontinuing the practice of reimbursing Medicare Part B monthly premiums to retirees.

After a hearing, a PERB Administrative Law Judge (ALJ) dismissed the charge holding that no violation of the Civil Service Law had occurred because "retirees are not covered by the [Public Employees' Fair Employment Act] and the City has made no announcement to current bargaining unit members of its intention to cease . . . and/or terminate certain Medicare Part B premium reimbursements."

PERB sustained the ALJ's determination, but on different grounds, concluding that the Union failed to carry its burden of establishing the existence of past practice. PERB said that the October 2008 notices "eliminated or altered various plans and benefits" and, therefore, interrupted any past practice of reimbursement of Medicare Part B monthly premiums.

In addition, PERB also found that the phrase, "under the City's current policy," as provided in the October 2008 notice to retirees, "served to provide notice that such policy [of reimbursing Medicare Part B premiums] could not be relied upon to continue indefinitely."

The Union appealed PERB's ruling.

Addressing the merits of the Union's appeal, the Appellate Division said "whether the reimbursement of Medicare Part B premiums was a past practice depends on whether such 'practice was unequivocal and was continued uninterrupted for a period of time under the circumstances to create a reasonable expectation among the affected unit employees that the practice would continue.'" The Appellate Division then explained that "[T]he expectation of the continuation of the practice is something that may be presumed from its duration with consideration of the specific circumstances under which the practice has existed."

Reviewing PERB's decision to ascertain if it was supported by substantial evidence, the court concluded that a rational basis does not exist to support PERB's determination that the claimed "past practice" had been interrupted.

The City, said the Appellate Division, has been reimbursing the retirees for their Medicare Part B monthly premiums for over 20 years. At the hearing before PERB, several witnesses testified as to their understanding and expectation that the City would reimburse them for their Medicare Part B monthly premiums upon their retirement and "that such reimbursements would continue for the rest of their life."

The court's decision also noted that one witness testified that in the course of collective bargaining with the City, the issue of reimbursement for Medicare Part B monthly premiums was raised but the City felt it was unnecessary to formalize such benefit into the collective bargaining agreement "because everyone knew that it would last "forever."

In contrast, PERB, relying on the notices sent to retirees and to the active members of the Union by the City, determined that a past practice of reimbursements did not exist based on the documentary evidence in the record. The Appellate Division disagreed, concluding that such documentary evidence did not provide "a rational basis to support the findings upon which [PERB's] determination is predicated."

The court pointed that although the October 2008 notice that was sent specifically to active members advised them of various changes to the health plans offered by the City, it was entirely silent as to the reimbursement of Medicare Part B premiums. Furthermore, said the court, the October 2008 sent to the retirees could not have apprised union's active members that the reimbursement of Medicare Part B monthly premiums would not continue indefinitely because this notice was sent only to retirees, a group of former employees not represented by the Union.

Thus, ruled the Appellate Division, PERB's conclusion that the Union never objected to the City's proposed modifications of Medicare Part B reimbursements lacks evidentiary support inasmuch as the Union's active members did not have notice of any potential changes to which an objection could be lodged.

Indeed, said the court, "even if [the Union] or its active members had received adequate notification," the five words — "under the City's current policy" — do not constitute substantial evidence connoting either the absence of a past practice of reimbursing Medicare Part B monthly premiums by the City, especially when the record as a whole demonstrates that there was no formal policy for such reimbursements and the City continually reimbursed the retirees for such monthly premiums for a significant period of time, or that such practice would only be temporary."

Finding that PERB's determination was not supported by substantial evidence, it was  annulled by the Appellate Division.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02719.htm

Circumstantial evidence "raised a reasonable inference" that the employee had violated of New York City Charter §2604(b)2)

Circumstantial evidence "raised a reasonable inference" that the employee had violated of New York City Charter §2604(b)(2)
Oberman v New York City Conflicts of Interest Board, 2017 NY Slip Op 02366, Appellate Division, First Department

The New York City Conflicts of Interest Board, adopting the findings and recommendation as to the penalty to be imposed of an Office of Administrative Trials and Hearings' [OATH] Administrative Law Judge, held that Igor Oberman was guilty of having violated New York City Charter §2604(b)(2)* and 53 RCNY §1-13(a) and (b)**when he "used his public employer's resources for private purposes." The penalty imposed: a civil fine in the amount of $7,500.

Oberman initiated an Article 78 action challenging the Board's determination on the grounds that it was not supported by substantial evidence.  The Appellate Division, unanimously confirmed the Board's action.

The court said that there was no basis to disturb the credibility determinations of the OATH Administrative Law Judge*** as the "strong circumstantial evidence" of records of numerous calls involving Oberman's work telephone and donations to Oberman's political campaign, raised a reasonable inference that had used his public employer's resources for private purposes in violation of Charter §2604(b)2).

The Appellate Division then opined that "penalty is not shockingly disproportionate to the offense, in light of the extent of [Oberman's] misconduct, the warnings he had received against such misconduct, his failure to accept responsibility, and the high ethical standards to which he was held as an attorney." 

* §2604(b)(2) provides that "No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties. 

** 53 RCNY §1-13(a) and (b) provide that:

            (a) Except as provided in subdivision 3 of this section, it shall be a violation of  City Charter §2604(b)(2) for any public servant to pursue personal and private activities during times when the public servant is required to perform services for   the City.

            (b) Except as provided in subdivision 3 of this section, it shall be a violation of City Charter §2604(b)(2) for any public servant to use City letterhead, personnel, equipment, resources, or supplies for any non-City purpose. 

*** See Office of Administrative Trials and Hearing Index #1657/14:
http://archive.citylaw.org/wp-content/uploads/sites/17/oath/14_Cases/14-1657.pdf

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2017/2017_02366.htm

Election of administrative remedies

Election of administrative remedies

Decisions of the Commissioner of Education, Decision #17,062

The Board of Education assigned a teacher to teach five classes following a reduction in her position from a full-time position to a .83 full time equivalent (“FTE”). 

The teacher filed a grievance challenging the Board's action contending that because she continues to teach five classes each day she is "a 1.0 FTE teacher." The teacher's employee organization advised her that it would not be advancing her grievance to arbitration as the information provided did not constitute a violation of any specific provision of the Collective Bargaining Agreement [CBA] between the organizations and the school district.

The teacher then filed an appeal with the Commissioner of Education seeking the same relief she sought in the grievance. The school district object, contending that the prior commencement of an action or proceeding by filing a grievance for the same or similar relief constitutes an election of remedies which precludes the initiation of an appeal to the Commissioner.

After stating that "It would be contrary to the orderly administration of justice for the Commissioner to decide issues that a petitioner has elected to raise in another forum" and the teacher admits that the relief sought in both the grievance and this appeal is the same, the Commissioner said that the record before her shows that teacher alleged that the district was obligated under the CBA to compensate her at a salary commensurate with 1.0 FTE status in her Level I grievance, to the extent that the teacher elected to pursue her claims through the grievance process, such claims must be dismissed. 

However, noted the Commissioner, in her grievance, the teacher included a claim that the district’s actions are in violation of 8 NYCRR §100.2(i) of the Commissioner’s regulations. In its letter to the teacher declining to advance her grievance to arbitration, the Association stated that a claimed violation of statute is not a grievable matter under the CBA as such a claim does not allege a violation of a specific provision of the CBA.

In view of this, the Commissioner declined to dismiss the teacher’s claim that the school district acted in violation of §100.2(i) of the Commissioner’s regulations.

Turning to the merits of this claim advanced by the teacher, the Commissioner noted that  §100.2(i), relating to teaching assignments, provides that "The number of daily periods of classroom instruction for a teacher should not exceed five.  A school requiring of any teacher more than six teaching periods a day, or a daily teaching load of more than 150 pupils, should be able to justify the deviation from this policy."

Observing that in an appeal to the Commissioner, the petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which the petitioner seeks relief, the Commissioner noted that the teacher did not argue that her number of daily periods of classroom instruction exceeds five nor that . she is assigned a daily teaching load in excess of 150 students.  Rather teacher contends that as §100.2(i) defines a full-time teaching load as five classes, she is entitled to compensation as a full-time teacher. 

The Commissioner explained that §100.2(i) merely establishes a policy that teachers should not be assigned more than five classes or a teaching load of 150 pupils and requires that a board of education be able to justify any such assignment, for the purpose of maintaining quality instruction for students -- it does not define full-time status for purposes of compensation, which as in this case, is a matter governed by the applicable CBA.

The Commissioner then held that the teacher "has not established that [the school district's] actions are in violation of §100.2(i) of the Commissioner’s regulations and dismissed the appeal.

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume56/d17062

Employee organization's authority to expel a member cannot be used to suppress free expression and free political opposition

Employee organization's authority to expel a member cannot be used to suppress free expression and free political opposition

Montero v Police Assn. of the City of Yonkers, Inc., 2017 NY Slip Op 02040, Appellate Division, Second Department

The Police Association of the City of Yonkers, Inc., also known as Yonkers Police Benevolent Association, [PBA], had charged one of its members, Raymond Montero, with providing information to the author of articles published online, providing that author with an email from [the PBA's] president to the member of the PBA, publishing that email online himself, with comments, and "being involved in an altercation with another member." Montero was given notice of these charges and of the date and time of the hearing scheduled to consider these allegations. He elected to not to appear at the hearing and subsequently the PBA expelled Monterofrom its membership.

Montero file an Article 78 petition challenging the PBA's action but Supreme Court  denied the petition and dismissed the proceeding. Montero appealed and the Appellate Division annulled the Supreme Court's ruling and granted Montero's petition.

In Polin v Kaplan, 257 N.Y. 277, the Court of Appeals said "It is well established that where the constitution and by-laws of a voluntary association reasonably set forth grounds for expulsion and provide for a hearing upon notice to the member, judicial review of such proceedings is unavailable, unless the reason for expulsion is not a violation of the constitution or by-laws or is so trivial as to suggest that the action of the association was capricious or corrupt, or unless the association failed to administer its own rules fairly."

The Appellate Division found that in this instance the PBA's determination that Montero was guilty of conduct that was "prejudicial to the welfare of the Association," in violation of its bylaws, was arbitrary and capricious.

The court explained that with respect to the charges filed against Montero concerning the e-mail, there was only one "identified email" in the record. Accordingly, said the court,  there is no basis in the record on which to determine what, if any, other information was provided to the author of the articles by Montero, and whether such unidentified information was detrimental to the PBA.

As to the email in the record, that e-mail was characterized as confidential by the PBA. The Appellate Division, however, observed that there is no reason to conclude that the email, which was sent to all of the PBA's members, was confidential and, in fact, it contained a statement indicating that sharing the email was merely "discouraged."

In any event, said the court, the record provides no support for a determination that Montero's sharing the widely distributed email or making certain online comments about the email, was detrimental to the welfare of the PBA.

Again quoting from the decision in Polin v Kaplan noted above, the Appellate Division said "If there be any public policy touching the government of labor unions, and there can be no doubt that there is, it is that traditionally democratic means of improving their union may be freely availed of by members without fear of harm or penalty. And this necessarily includes the right to criticize current union leadership. . . . The price of free expression and of political opposition within a union cannot be the risk of expulsion or other disciplinary action. In the final analysis, a labor union profits, as does any democratic body, more by permitting free expression and free political opposition than it may ever lose from any disunity that it may thus evidence."

The Appellate Division's decision also ruled that "there is no rational basis for the conclusion that a brief physical altercation between [Montero] and another member "prejudice[d] the welfare" of the [PBA].

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02040.htm

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 8, 2017

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 8, 2017

Source: Office of the State Comptroller

Woman convicted of stealing over $290,000 from the Buffalo Firemen's Pension Fund

Comptroller DiNapoli and A.G. Schneiderman announce felony conviction of woman who stole over $290,000 in deceased mother's benefits from the Buffalo Firemen's Pension Fund. 

Pearlann MacVittie of West Seneca, New York, was conviceted of the crime of Grand Larceny in the Third Degree, a class D felony. MacVittie pleaded guilty before the Hon. Kenneth F. Case in Erie County Court. She admitted that she had stolen benefits from the city of Buffalo Firemen's Pension Fund that were intended for her late mother, who died in 1983.

According to the investigators, Lola Martin, the mother of defendant Pearlann MacVittie, was the widow of Buffalo fireman William J. Martin. After her husband's death, Lola Martin was eligible for his Firemen's Pension Fund benefit from the city of Buffalo during her lifetime. The Buffalo Firemen's Pension Fund is administered by the city of Buffalo and is not part of the New York State and Local Retirement System.

Lola Martin died on September 10, 1983. MacVittie failed to notify the Buffalo Firemen's Pension Fund of her mother's death, and instead continued to collect benefits to which she was not entitled. At the time of Lola Martin's death in 1983, she was receiving a pension benefit of approximately $325 per month from the Buffalo Firemen's Pension Fund. Over the next 33 years, the monthly benefits increased, and by 2016 MacVittie was illegally collecting $935 per month. The total amount stolen by MacVittie from October 1983 through May 2016 was $291,070.

MacVittie's decades-long fraud was uncovered by an audit and investigation conducted by the New York State Comptroller's Office. When confronted with the evidence of her theft, MacVittie admitted that she knew that she was not entitled to the pension benefits after her mother died, and that she had falsely signed her mother's name on yearly Acknowledgments of Pension Benefit forms, making the handwriting look shaky so that it appeared someone older had signed the form.

As part of her plea today to Grand Larceny in the Third Degree, MacVittie signed a confession of judgment for the entire amount stolen. MacVittie, 73, is scheduled to be sentenced to five years' probation on June 22 at 9:30 a.m.

Today's convictions are the result of an investigation conducted by the State Comptroller's Office and the Attorney General's Criminal Enforcement and Financial Crimes Bureau. This case is the latest joint investigation under the Operation Integrity partnership of the Attorney General and Comptroller, which to date has resulted in dozens of convictions and more than $11 million in restitution.

This case is being prosecuted by Assistant Attorney General Diane LaVallee of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Acting Bureau Chief Stephanie Swenton.

The Attorney General's investigation was conducted by Senior Investigator Sandra Migaj, under the supervision of Supervising Investigator Richard Doyle and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by Chief Dominick Zarrella.

The Comptroller's investigation was conducted by the Comptroller's Division of Investigations working with the Division of Local Government and School Accountability.

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

 

Audits of the following jurisdictions completed:

Town of Fulton - Justice Court Operations

Town of Greenport– Town Clerk Operations

Town of Guilderland - Golf Course Collections

Kenilworth Fire District No. 2 - Financial Activities

Sodus Center Fire Department – Financial Activities

Town of Thurman, – Garbage Bag Inventory and Collections

Wading River Fire District– Gasoline Credit Cards

Warren County– Occupancy Tax and Weights and Measures

West Albany Fire District– Credit Card Purchases

Termination of a public officer from his or her position by operation of law

Termination of a public officer from his or her position by operation of law

Munroe v Ponte, 2017 NY Slip Op 02041, Appellate Division, Second Department

The Commissioner of the New York City Department of Correction [Department] summarily terminated Timothy Munroe, a New York City Correction Officer, from his position pursuant to Public Officers Law §30(1)(e) following Munroe's conviction of a misdemeanor, falsifying business records in the second degree.

POL §30(1)(e) provides for the dismissal of a public officer "by operation of law" upon the officer's conviction of a felony, or a crime involving a violation of his oath of office.

Munroe was served with disciplinary charges in March 2009 alleging that he left his assigned post without permission and had "an undue relationship" with an inmate and making "false entries in the . . . enhanced security post logbook." In October 2009, Munroe was indicted on several charges, including falsifying business records in the second degree and attempted assault in the third degree and in 2013 he was convicted of violating Penal Law § 175.05[1], falsifying business records in the second degree.

Notified in February 2014 that his employment was terminated pursuant to Public Officers Law §30(1)(e), in August 2014 Munroe initiated a CPLR Article 78 action alleging, among other things, that his termination was arbitrary and capricious. The Department moved to dismiss the petition on the grounds that the petition failed to state a cause of action and that the proceeding was time-barred.

Supreme Court granted the Department's motion on the ground that the proceeding was time-barred, and dismissed the proceeding. The Appellate Division affirmed Munroe's termination but "on a different ground than that relied upon by the Supreme Court."

After explaining why Munroe's Article 78 action was not untimely, the Appellate Division ruled that "[p]ursuant to Public Officers Law §30(1)(e), an office is deemed vacant upon an officer's "conviction of a felony, or a crime involving a violation of his [or her] oath of office".]*

Citing Feola v Carroll, 10 NY3d at 573, the Appellate Division said that "Summary dismissal is . . . justified in circumstances where [a] misdemeanor for which the officer is convicted demonstrat[es] a lack of moral integrity,' namely, one that involves a willful deceit or a calculated disregard for honest dealings.'"  In this instance, said the court, Munroe was convicted of falsifying business records in the second degree, a class A misdemeanor, an offense involving willful deceit, and which resulted in the "automatic vacatur of his position pursuant to Public Officers Law §30(1)(e)."

The Appellate Division ruled that under the circumstances in this case Munroe's Article 78 petition failed to set forth allegations sufficient to make out a claim that his termination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion.

* Although not all public employees are public officers, all public officers are public employees.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02041.htm

____________________

The Discipline Book - A 458 page guide to disciplinary actions involving public officers and employees. For more information click on http://booklocker.com/books/5215.html

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Public policy prohibits an employer from bargaining away its right to remove employees meeting the plain and clear statutory requisites for termination

Public policy prohibits an employer from bargaining away its right to remove employees meeting the plain and clear statutory requisites for termination
Enlarged City Sch. Dist. of Middletown N.Y. v Civil Serv. Empls. Assn., Inc., 2017 NY Slip Op 02421, Appellate Division, Second Department

In this appeal the issue concerned the court's granting of a permanent stay of arbitration of a grievance alleged to have violated a term or condition of the controlling collective bargaining agreement pursuant to CPLR Article 75.

The geneses of the grievance was the termination of an employee pursuant to §71 of the Civil Service Law. §71 provides for Workers' Compensation Leave and authorizes the termination of an individual on such leave after he or she has been "... out of work for a cumulative period of one year or longer.*  The employee, a member of the collective bargaining unit represented by the Civil Service Employees Association [CSEA] contended that his termination while on §71 leave violated certain terms and conditions of the collective bargaining agreement. Ultimately CSEA demanded that the employee's grievance be submitted to arbitration.

Supreme Court denied the school district's petition seeking a permanent stay of the arbitration. The district appealed, contending that submitting the subject matter of the dispute to arbitration was prohibited by public policy. The Appellate Division granted the school district a temporary stay of the arbitration proceeding and ultimately held that "the Supreme Court should have granted the district's petition to permanently stay arbitration."

The Appellate Division explained that although the general policy with respect to collective bargaining agreements favors the resolution of disputes by arbitration, some matters, because of competing considerations of public policy, cannot be heard by an arbitrator and "[p]reemptive judicial intervention in the arbitration process is warranted where the arbitrator [cannot] grant any relief without violating public policy."

Citing Economico v Village of Pelham, 50 NY2d 120 [overruled on other grounds, Matter of Prue v Hunt, 78 NY2d 364], the Appellate Division considered the allegation that the employee's termination was in contravention of his rights under a collective bargaining agreement.

In Economico the issue concerned the termination of a permanent employee on the Civil Service Law §72, Leave for Ordinary Disability, pursuant to §72.4  of the Civil Service Law.  §72.4  provides for such termination at the discretion of the appointing authority in accordance with the provisions of §73 of the Civil Service Law. The Court of Appeals held that "public policy prohibits an employer from bargaining away its right to remove those employees satisfying the plain and clear statutory requisites for termination" set out in §72 pursuant to §73.

While §72.4 provides that an employee continuously absent from work for one year or longer pursuant to §72 as the result of a non-work related disability or disease, §71 provides that a public employer may terminate an employee who is absent due to an occupational disability for a cumulative period of one year**  or longer at the discretion of the appointing authority if the employee is physically or mentally unable to return to work.

The Appellate Division concluded that both §71 and §72.4 of the Civil Service Law establish "the point at which injured civil servants may be replaced," as they "strike a balance between the recognized substantial State interest in an efficient civil service and the interest of the civil servant in continued employment in the event of a disability." Thus, said the court, for the same reason that "public policy was implicated in Matter of Economico v Village of Pelham," i.e., the abrogation of the authority granted to a public employer by §72.4 to terminate the disabled employee, "it is implicated in the instant matter," termination of the disabled employee as authorized by Civil Service Law §71.

The Appellate Division said that as an arbitrator would not be able to fashion a remedy that would not violate public policy in this instance, a preemptive stay of arbitration with respect to the employee's grievance is not improper.

N.B. It should be noted that termination pursuant to §71 or §73 is not a pejorative dismissal. An individual terminated from such a leave may, within one year after the termination of his or her disability, apply to the civil service department or municipal commission having jurisdiction over the position last held by the employee for a medical examination to be conducted by a medical officer selected for that purpose by such department or commission and if found medically and physically qualified, he or she is eligible for reinstatement or other relief as provided by law. 

* See Duncan v NYS Developmental Center, 63 NY2d 128

** Where an employee has been separated from the service by reason of a disability resulting from an assault sustained in the course of his or her employment, he or she shall be entitled to a §71 leave of absence for at least two years, unless his or her disability is of such a nature as to permanently incapacitate him or her for the performance of the duties of his or her position.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02421.htm

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The Disability Benefits E-book: - This e-book focuses on disability benefits available to officers and employees in public service pursuant to Civil Service Law §§71, 72 and 73, General Municipal Law §207-a and §207-c, the Retirement and Social Security Law, the Workers’ Compensation Law, and similar provisions of law. For more information click on: http://booklocker.com/3916.html

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Unemployment Insurance Appeal Board entitled to determine reasons for dismissing an employee constituted disqualifying misconduct for purposes of eligibility for unemployment insurance benefits

Unemployment Insurance Appeal Board entitled to determine reasons for dismissing an employee constituted disqualifying misconduct for purposes of eligibility for unemployment insurance benefits

Matter of Telemaque (Commissioner of Labor), 2017 NY Slip Op 02109, Appellate Division, Third Department

Veronica Telemaque, an absent reserve teacher for 20 years, was served with disciplinary charges pursuant to Education Law §3020-a for allegedly engaging in misconduct, conduct unbecoming and, or, insubordination and violating the employer's rules. Based upon the Hearing Officer's findings and recommendation, Telemaque was found guilty of the charges and was terminated from her position.

Telemaque then applied for unemployment insurance benefits but her application for such benefits was rejected by the Unemployment Insurance Appeal Board on the ground that she had lost her employment due to her misconduct. Telemaque appealed the Board's determination to the Appellate Division but the court sustained the Board's ruling,

Indicating that "It does not appear that [Telemaque] appealed that disciplinary determination," the Appellate Division ruled that Telemaque's challenges to the merits of the disciplinary determination resulting in her termination may not be raised in her unemployment insurance proceeding.

Further, said the court, the record indicated that Telemaque was [1]  represented by an attorney at the disciplinary hearing who had the opportunity to present evidence and witnesses and to cross-examine the employer's witnesses, and [2] Telemaque had "testified at length" with regard to the charges filed against her at the disciplinary hearing.

The Appellate Division explained that as Telemaque "had a full and fair opportunity to litigate the charges of misconduct at [the disciplinary] hearing," the Unemployment Insurance Appeal Board "properly gave collateral estoppel effect to the Hearing Officer's factual determinations."

Further, said the court, "having properly taken into account those factual findings with regard to [Telemaque's] misconduct, the Board was entitled to make its own independent conclusions as to whether her behavior constituted disqualifying misconduct for purposes of unemployment insurance benefits."

As actions detrimental to an employer's interests and violating the employer's known policies and threatening behavior have been recognized as disqualifying misconduct, the Appellate Division held that the Board's decision to give collateral estoppel effect to the factual findings in the disciplinary determination was not affected by an error of law and its determination that Telemaque had committed disqualifying misconduct was supported by substantial evidence. Accordingly, said the court, the Board's determination "will not be disturbed."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_02109.htm