New York State Comptroller Thomas P. DiNapoli issued the following audits and examinations during the week ending December 9, 2017

New York State Comptroller Thomas P. DiNapoli issued the following audits and examinations during the week ending December 9, 2017

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Department of Agriculture and Markets: Oversight of Weights and Measures Program (2016-S-98)

Auditors found systemic issues with the quality of data the department relies on to administer the state’s weights and measures program. Inaccuracies and system deficiencies were found in two critical databases. Such deficiencies diminish the department’s ability to conduct useful analyses and to provide meaningful information to the municipalities. Such information could potentially assist municipalities to focus their limited resources on areas of highest risk to consumers and producers. Site visits to seven municipalities also found most of them did not complete all their mandated annual inspections.

City University of New York (CUNY): Central Office: Controls Over Bank Accounts (2015-S-94)

Auditors found multiple internal control weaknesses related to CUNY’s use of bank accounts. These weaknesses impacted various aspects of the banking process, including: opening and properly authorizing accounts; making deposits to accounts; and ensuring all accounts are used for appropriate business purposes. These weaknesses increased the risk of fraud, waste or abuse from unauthorized bank accounts and expenditures. Auditors also found that as of June 30, 2016, CUNY’s Money Market balances of about $163 million were uninsured and uncollateralized beyond the Federal Deposit Insurance Corporation (FDIC) limit of $250,000.

City University of New York: Medgar Evers College (MEC): Controls Over Bank Accounts (Follow-Up) (2017-F-14)

An audit issued in June 2016, found weaknesses in the monitoring of bank accounts, which increase the risk that Medgar Evers College personnel could conduct transactions using unauthorized accounts. In a follow-up, auditors found MEC officials made progress in addressing the issues identified in the initial report. Both of the two prior audit recommendations were partially implemented.

State Education Department (SED): Advanced Therapeutic Concepts Inc., Compliance with the Reimbursable Cost Manual (2016-S-42)

For the three fiscal years ended June 30, 2015, auditors identified $181,938 in reported costs that did not comply with SED requirements and recommended such costs be disallowed. The ineligible costs consisted of $85,104 in personal service costs and $96,834 in other than personal service costs.

State Education Department: Oversight of School Fire Safety Compliance (2017-F-22) (Follow-Up)

An initial audit report, issued in August 2016, concluded that the department did not adequately monitor whether schools are in compliance with all fire safety regulations and accurately report violations. In a follow-up, auditors found SED has made significant progress in correcting the problems identified in the initial report. Of the four prior audit recommendations, two have been implemented and two recommendations have been partially implemented.

Division of State Police: Seized Assets Program (2017-F-21) (Follow-Up)

An initial audit report, which was issued in December 2014, covering the period April 1, 2011 through September 2013, concluded that the division did not properly account for or track seized assets. In a follow-up, auditors found the division has implemented the six recommendations identified in the prior audit report.

A salary reduction upon reassignment to another position in the course of an agency reorganization is not a disciplinary action requiring notice and hearing

A salary reduction upon reassignment to another position in the course of an agency reorganization is not a disciplinary action requiring notice and hearing

Matter of Soriano v Elia, 2017 NY Slip Op 08431, Appellate Division, Third Department

Supreme Court dismissed Charles R. Soriano's CPLR Article 78 petition seeking a review of the Commissioner of Education's dismissing Soriano's challenge to the reduction of his salary and benefits following his reassignment to another position.

Soriano served as the East Hampton Union Free School District's Assistant Superintendent. In 2012 the school board approved a reorganization plan for administrative staff within the school district that resulted in Sorian's being reassigned and appointed to Middle School Principal, a position within his tenure area. This change, however, entailed a reduction in his annual salary from approximately $205,000 to $180,000 in his new position. Although Soriano did not challenge the reassignment, he objected to any reduction in his salary or benefits as a consequence of this reassignment*.

Soriano appealed the school board's action to the Commissioner of Education contending that his annual compensation could not be unilaterally reduced by the school board except as "discipline" pursuant to the procedures set forth in Education Law §3020-a. The Commissioner dismissed the appeal, finding that Soriano "failed to demonstrate that the salary reduction constituted discipline under Education Law §3020-a or that the school board's actions were otherwise arbitrary and capricious.

The Appellate Division rejected Soriano's argument that, as a matter of law, the reduction in his salary resulting from his reassignment to Middle School Principal constituted  "discipline" within the meaning of §3020-a and such discipline could not be imposed without notice and hearing.

Noting that "Discipline" is not defined in the Education Law, the court said it must "construe [this] word of ordinary import with [its] usual and commonly understood meaning" and the term is uniformly defined, both in the legal and ordinary sense, as "punishment."

The Appellate Division concluded that the school board's actions with regard to Soriano's  compensation did not constitute discipline under the statute and the uncontradicted evidence submitted by the school board establishes that his reassignment was part of an overall reorganization of the school district's administrative staff and that his compensation was set after consideration of a number of factors, including the salaries being earned by other middle school principals in the surrounding area, salary reductions for other administrative positions within the school district, recent budgetary cuts and the overall financial constraints of the school district.

As there was no evidence to suggest that the reduction in Soriano's compensation was the product of any dissatisfaction with him or his job performance or was otherwise undertaken as a means of punishment, the Appellate Division held that the Commissioner properly concluded that Soriano was not entitled to the procedures set forth in §3020-a prior to the school board's setting his new compensation. Further, said the court, "Nor can we conclude that [Soriano] had a constitutionally protected property interest in the compensation he received while serving as Assistant Superintendent" while serving in his reassigned position.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_08431.htm

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* Although both the term reassignment and the term transfer are used to describe this change, the term "reassignment" is more accurate in this instance. A movement of an individual from one position to a second position subject to the jurisdiction of the same appointing authority is typically described as a "reassignment." In contrast, the movement of an employee from one position to a second position under the jurisdiction of a different appointing authority is characterized as a "transfer."

That said, in the opinion of your editor this personnel change was neither a transfer nor a reassignment. Rather it appears to involve the abolishment of the position of Assistant Superintendent by the school board, resulting in Soriano's being laid off and the placement of his name on a preferred list. Soriano was then reinstated to the position of Middle School Principal, an then existing vacancy or a newly established position within his tenure area. Accordingly, his compensation upon such reinstatement should be determined accordingly.

Challenging an arbitration award

Challenging an arbitration award

2017 NY Slip Op 08382, Appellate Division, Second Department

A county employee [Petitioner] was served with disciplinary charges alleging misconduct for accessing unauthorized websites for non-County use and acting in an immoral manner during working hours, including viewing inappropriate material of a sexually explicit nature. Following a disciplinary hearing on these charges, the arbitrator found Petitioner guilty of misconduct and imposed a penalty of termination. Petitioner then initiated a CPLR Article 75 proceeding seeking to vacate the arbitration award.

Supreme Court dismissed the proceeding and confirmed the award. The Appellate Division sustained the lower courts ruling, explaining that judicial review of an arbitrator's award is extremely limited and the party seeking to vacate an arbitration award "bears a heavy burden[,]' and must establish a ground for vacatur by clear and convincing evidence."

Article 75 of the CPLR provides that an arbitration award may be vacated if the court finds that the rights of a party were prejudiced by (1) corruption, fraud, or misconduct in procuring the award; (2) partiality of an arbitrator; (3) the arbitrator exceeded his or her power; or (4) the arbitrator failed to follow the procedures mandated by Article 75.

In addition, in Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, the Court of Appeals held that an arbitration award may be vacated by the court if it finds that arbitrator's award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power.

Finding that in Petitioner's case the arbitrator's determination was supported by evidence in the record, that nothing in the record indicates that the arbitrator exceeded a specifically enumerated limitation on the arbitrator's powers and that the arbitrator's decision was not irrational, the Appellate Division dismissed Petitioner's challenge to the Supreme Court's decision.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_08382.htm

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Selected reports posted in Employment Law News by WK Workday

Selected reports posted in Employment Law News by WK Workday

Source: Wolters Kulwer

Selected reports posted by WK Workday November  29, 2017

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Employer’s attempt to contractually shorten limitations period on FMLA claim fails

Transgender prof prevails on sex discrimination, retaliation claims in tenure denial

Dramatic uptick in major U.S. companies, law firms advancing LGBTQ nondiscrimination protections

Driver can’t be compelled to arbitrate misclassification claim; he wasn’t party to arbitration clause

Appointing authority imposed a more severe penalty than the one recommended by the hearing officer

Appointing authority imposed a more severe penalty than the one recommended by the hearing officer

OATH Index No. 2230/17

The employer alleged that the employee was absent without leave [AWOL] for two weeks, that the employee falsely attributed her absences to pre-approved leave granted under the Family Medical Leave Act ("FMLA"), that the individual  failed to supervise her subordinates and that the employee failed to attend a mandatory training class.

New York City Office of Administrative Trials and Hearings Administrative Law Judge Alessandra F. Zorgniotti recommended dismissal of the AWOL and falsification of leave charges in part, explaining that the employer had failed to show that the employee was AWOL or that she falsely attributed her absences to FMLA for the first week of her absence. The ALJ found that the record supported the employee's claim that her supervisor had approved her request for leave without pay and that that leave was supported by a valid doctor's note.

In contrast, Judge Zorgniotti found that the employer did prove the charges with respect to the second week of the employee's absence. In addition, Judge Zogniotti sustained the charges filed against the employee alleging that she failed to supervise her subordinates and that she had failed to attend the mandatory training class.

The ALJ recommended that the employee be given a penalty of a 60-day suspension without pay. The appointing authority, however, sustained all charges filed against the individual and terminated the individual's employment.

In Gradel v Sullivan Co. Public Works, 257 A.D.2d 972, the Appellate Division sustained the appointing authority's imposing a greater penalty that the one recommended by the hearing officer, explaining that there was ample evidence in the record to support the appointing authority's decision.

As a general rule, courts are reluctant to substitute their judgment for that of the employer on the fairness of penalties, but will do so if the penalty appears grossly unfair -- the standard established in Pell v Board of Education, 34 NY2d 222.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-2230.pdf

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Arbitrator rules that qualified retirees and future retirees to have the same health insurance coverage as the employer's active employees

Arbitrator rules that qualified retirees and future retirees to have the same health insurance coverage as the employer's active employees
Monroe County Deputy Sheriffs' Assn., Inc. (Monroe County), 2017 NY Slip Op 08107, Appellate Division, Fourth Department

Supreme Court granted the Monroe County Deputy Sheriffs' Association's petition to confirm the award rendered in a labor arbitration directing Monroe County and the Monroe County Sheriff to provide qualified retirees and future retirees from the Monroe County Sheriff's Office with the same health insurance coverage - here coverage for the dependent child of a retiree until the child reaches the age of 26 years - that was being  provided to active employees.

The Appellate Division cited the federal Affordable Care Act, 42 USC §300gg-14 [a] and the collective bargaining agreement (CBA) between the parties as the authority for the arbitrator's award.

The court rejected the County's and the Sheriff's claim that the arbitrator exceeded his power in fashioning the award, explaining that "It is well settled that an arbitrator exceeds his or her power within the meaning of CPLR §7511(b)(1) (iii) where the arbitrator's award " clearly exceeds a specifically enumerated limitation on the arbitrator's power."

Further, said the Appellate Division, "To exclude a substantive issue from arbitration . . . generally requires specific enumeration in the arbitration clause itself of the subjects intended to be put beyond the arbitrator's reach." The court then concluded that in this instance "the arbitrator did not exceed a specifically enumerated limitation on his power."

The Appellate Division also rejected the County's and Sheriff's contention that the arbitrator's award was irrational.

Citing Matter of Lackawanna City School District [Lackawanna Teachers Federation], 237 AD2d 945, the court decided that the arbitrator's interpretation of the CBA was not completely irrational and thus his ruling was beyond its power to review because "An arbitration award must be upheld when the arbitrator offer[s] even a barely colorable justification for the outcome reached."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_08107.htm

Procedural considerations when suing for alleged violations of free speech, unlawful employment discrimination and unlawful retaliation complaints

Procedural considerations when suing for alleged violations of free speech, unlawful employment discrimination and unlawful retaliation complaints

2017 NY Slip Op 07985, Appellate Division, Second Department

A New York City Administrative Law Judge [ALJ] commenced this action against the City of New York, her agency and five employees in her agency, alleging causes of action to recover damages for (1) violation of her free speech and petition rights under the New York State Constitution, Article I, §§8 and 9; (2) employment discrimination on the basis of sex and age in violation of the New York City Human Rights Law [NYCHRL] and (3) unlawful retaliation in violation of the NYCHRL for having made complaints of sexual harassment and age discrimination.

The complaint alleged that ALJ and other administrative law judges spoke out internally within the agency and externally to public officials and the press about an alleged agency practice of improperly pressuring administrative law judges to issue recommended decisions in favor of the agency and to impose maximum fines. 

ALJ contended that she was demoted and subjected to other retaliation due to this speech and to her complaints concerning alleged sexual harassment. ALJ's complaint also alleged the existence of a pattern of age discrimination within the agency.

Supreme Court granted the agency's CPLR 3211 motion to dismiss ALJ's complaint, denied her motion to amend her complaint. ALJ appealed these Supreme Court rulings to the Appellate Division.

Among the procedural issues considered by the Appellate Division were the following:

Motion to Dismiss: The Appellate Division said that a complaint "is to be afforded a liberal construction, the facts alleged are presumed to be true, the plaintiff is afforded the benefit of every favorable inference, and the court is to determine only whether the facts as alleged fit within any cognizable legal theory."* The court explained that "Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff [here ALJ] will ultimately be able to prove its claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss" noting that ALJ's allegations were "sufficient to state a cause of action to recover damages for sexual harassment in violation of the NYCHRL."  In the words of the Appellate Division, Supreme Court "erred in determining that the cause of action must be dismissed because the behavior [alleged] constituted no more than petty slights or trivial inconveniences. A contention that the behavior was a petty slight or trivial inconvenience constitutes an affirmative defense which should be raised in the defendants' answer and does not lend itself to a pre-answer motion to dismiss."

Claims of Age Discrimination: The Appellate Division ruled that ALJ's  allegations of disparate treatment of older employees, including herself, and that her demotion was based, in part, on age discrimination, sufficiently stated a cause of action to recover damages for age discrimination in violation of the NYCHR, explaining that "The fact that the individual defendants were approximately the same age as ALJ does not render the cause of action insufficient."

Complaints alleging Sexual Harassment and Age Discrimination: The Appellate Division held that Supreme Court  erred in granting dismissal of the cause of action alleging based on ALJ's complaints of sexual harassment.  ALJ's complaint, however, failed to allege that she had complained about the alleged acts of age discrimination and thus Supreme Court properly granted dismissal of the cause of action alleging unlawful retaliation based on complaints of age discrimination.

Notice of Claim: The Appellate Division also held that Supreme Court had properly granted dismissal of the cause of action alleging violations of the State Constitution because ALJ failed to serve a notice of claim. The court explained that ALJ's action "does not fall within the public interest exception to the notice of claim requirement, since the complaint seeks to vindicate the private rights of [ALJ], and the disposition of the claim will not directly affect or vindicate the rights of others."**

Leave to Amend the Complaint: Here the Appellate Division found that Supreme Court improvidently exercised its discretion in denying ALJ's cross motion for leave to amend her complaint to assert an alternative First Amendment retaliation cause of action pursuant to 42 USC §1983. In the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit said the court.

Unlawful Retaliation: With respect to claims of unlawful retaliation under the NYCHRL, in the First Amendment context, a plaintiff "need only show that the retaliatory conduct in question would deter a similarly situated individual of ordinary firmness from exercising his or her constitutional rights." The Appellate Division found that the allegations that ALJ was demoted following the internal complaints, and that she suffered a campaign of harassment following the external complaints, sufficiently pleaded that the subject speech was a substantial or motivating factor for an adverse employment action. As with unlawful retaliation claims under the NYCHRL, in the First Amendment context, a plaintiff "need only show that the retaliatory conduct in question would deter a similarly situated individual of ordinary firmness from exercising his or her constitutional rights" and Supreme Court should have granted ALJ leave to amend the complaint.

* In addition the Appellate Division noted that Supreme Court may consider affidavits submitted by a plaintiff to remedy any defects in the complaint. 

** In contrast, the Appellate Division noted that a notice of claim was not required with respect to ALJ's perfecting her First Amendment retaliation cause of action pursuant to 42 USC §1983.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_07985.htm