Determining the availability of arbitration to resolve a dispute between a public employer and an employee organization

Determining the availability of arbitration to resolve a dispute between a public employer and an employee organization
Town of North Hempstead v  Civil Service Employees Association, Inc., Local 1000, 2018 NY Slip Op 06098, Appellate Division, Second Department

An employee of the Town of North Hempstead was served with nine individual disciplinary notices for various instances of alleged "misconduct and insubordination." Each notice individually proposed a penalty of a five-day suspension without pay in the event the employee was found guilty of the charge[s] and specification[s] set out in that particular notice of discipline.

The employee was found guilty of the charge[s] and the specification[s] set out in each one of the nine notices of discipline and filed grievances appealing each of the nine disciplinary decisions and the penalties imposed by the appointing authority. All of the employee's administrative appeals submitted in accordance with the relevant procedural steps set out in the Collective Bargaining Agreement [CBA] between the parties were denied. Ultimately the employee's collective bargaining representative, the Civil Service Employees Association, Inc., Local 1000, [CSEA] filed a demand to arbitrate the employee's nine disciplinary grievances appealing the nine disciplinary determinations.

In response to CSEA's demand to submit the nine grievances to arbitration, North Hempstead filed a petition pursuant to CPLR Article 75 seeking a permanent stay of arbitration for each of the nine disciplinary decisions and penalties imposed on the employee.

In opposition to North Hempstead's petition, CSEA contended that because the aggregate penalty of all the disciplinary decisions exceeded five days' suspension, resolution of the disputes were controlled by Section XII of the CBA, which set forth the disciplinary procedure for those disputes carrying a penalty of six days' suspension or more and which provided for arbitration of the dispute.

In rebuttal North Hempstead argued that as no single proposed disciplinary penalty exceed a five day suspension Section X of the CBA controlled and Section X did not provided for the arbitration of disputes where the disciplinary action resulted in a penalty of up to, and including, a five days' suspension without pay.

Supreme Court, concluding that because the penalty imposed on the employee resulted in a total of 45 days of suspension without pay, held that the grievances were arbitrable and denied North Hempstead's petition to permanently stay arbitration. North Hempstead appealed.

Reversing the lower court's ruling, the Appellate Division explained that there is a two-step test used to determine "whether a dispute between a public sector employer and an employee organization is arbitrable." Initially the court must determine if there is any statutory, constitutional, or public policy prohibition against arbitrating the dispute. It the court finds that there is no prohibition against arbitration, the court must examine the parties' collective bargaining agreement to determine if the parties, had in fact, agreed to arbitrate the particular dispute at issue.

Noting that North Hempstead did not contend that arbitration of the grievances at issue was prohibited by law or public policy, the Appellate Division said that in this instance the only issue to address was whether the parties had, in fact, agreed to arbitrate these particular grievances.

In contrast to general labor disputes in the private sector involving arbitration, the Appellate Division, citing Matter of Board of Educ. of Valhalla Union Free Sch. Dist. v Valhalla Teachers Assn., 112 AD3d 620, pointed out that the intent of the parties in the public sector to arbitrate alleged violations of provisions set out in a collective bargaining agreement "may not be presumed." Absent "clear, unequivocal agreement to the contrary," the Appellate Division opined that there was a presumption that the parties entering into a collective bargaining agreement in the public sector "did not intend to refer differences which might arise to the arbitration forum."

Contrary to the Union's contention, the Appellate Division found that because the disciplinary notices each carried a penalty of a five-day suspension, "the grievance procedure of Section X of the CBA, which did not permit arbitration, was applicable" notwithstanding the fact that "the aggregate penalty assessed against the employee exceeded five suspension days." In other words, the fact that the aggregate penalty involved exceed "five suspension days" did not place the dispute within the ambit of Section XII of the CBA.*

Further, said the Appellate Division, [1] neither Section X nor Section XII of the CBA provides for any deviation from the respective procedures where an employee may be subject to more than one disciplinary action, and [2] CSEA, by its participation in the administrative grievance procedure, including presenting its appeals to the Labor-Management Committee, "essentially conceded that the dispute fell within the ambit of Section X."

When the grievances "were denied at Step 3," CSEA, in the words of the Appellate Division, "... filed a demand for arbitration, which is not permitted under Section X" of the relevant CBA. As the several grievances at issue were controlled by Section X of the CBA, the Appellate Division held that CSEA "failed to demonstrate that the parties in fact agreed to arbitrate these particular disputes."

Accordingly, the Appellate Division ruled that Supreme Court should have granted North Hempstead's petition to permanently stay arbitration, reversed the lower court's ruling on the law, with costs, and granted North Hempstead petition to permanently stay arbitration.

* Typically a party in a Section X procedure is able to file a CPLR Article 78 petition challenging a Section X decision and, or, penalty while a party to a Section XII procedure is able to challenge the arbitration award by filing a CPLR Article 75 petition.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_06098.htm

ADDENDUM

This decision appears to be one of first impression.

With respect to the Appellate Division's observation that CSEA's actions in processing these charges  essentially conceded that the dispute fell under the ambit of Section X of the relevant collective bargaining agreement because it actively participated in the disciplinary appeal procedure, presumably [1] two or more of the nine charges were not served on the employee simultaneously and [2] any motion to consolidate two or more of the nine charges served on the employee was denied.

In contrast, had two or more of the charges been either served simultaneously and, or, consolidated and the penalty imposed for the simultaneously served and, or, consolidated charges exceeded a five day suspension without pay, it could be argued that by imposing such a penalty with respect to such  consolidated and, or, simultaneously served  charges the provisions of Section XII were triggered with respect to such charges.

There is some precedent for incorporating a "Section X" and a Section XII type process in a collective bargaining agreement.

Article 7 of the State's Military Law, Code of Military Justice, provides for processing charges and specification for alleged offenses or misconduct by individuals serving in New York State Militia.**

For example, §130.15 of the Military Law "Commanding officer's non-judicial punishment", provides for "commanding officer's non-judicial punishment" whereby a commanding officer may, in addition to or in lieu of admonition or reprimand, impose certain disciplinary punishments for minor offenses without the intervention of a court-martial. A person punished under authority of §130.15 who deems his or her punishment unjust or disproportionate to the offense may, through the proper channel, appeal to the next superior authority. However, the individual subject to the punishment "may in the meantime be required to undergo the punishment adjudged. The officer who imposes the punishment, his successor in command, and superior authority shall have power to suspend, set aside, or remit any part or amount of the punishment and to restore all rights, privileges and property affected.

In contrast, there are several types of "judicial tribunals" - courts-martial - authorized to consider disciplinary initiated against military personnel, There shall be three kinds of courts-martial in each of the forces of the organized militia, (1) a general courts-martial: (2) a special courts-martial, and (3) a summary courts-martial. Each such courts-martial has designated jurisdictions but §130.21 of the Military Law provides that the jurisdiction of courts-martial not exclusive and provisions of Code of Military Justice conferring jurisdiction upon courts-martial shall not be construed as depriving provost courts or other military tribunals of concurrent jurisdiction in respect to offenders or offenses that by statute or by the law of war may be tried by such provost courts or other military tribunals.

The jurisdiction and authority of of courts martial are set out in Part 4 of the Code of Military Justice while §§130.59 - 130.72 of Part 9 of the Code sets out post-trial procedure and review of courts-martial.

** The Militia of the State of New York consists of the Organized Militia, the State Reserve List, the State Retired List and the Unorganized Militia. The Organized Militia is composed of the New York Army National Guard; the New York Air National Guard; the Inactive National Guard; the New York Naval Militia; the New York Guard whenever such a state force shall be duly organized, such additional forces as may be created by the governor and the Unorganized Militia.

Employer failed to prove the disciplinary charges and specifications filed against the employee by a preponderance of the credible evidence

Employer failed to prove the disciplinary charges and specifications filed against the employee by a preponderance of the credible evidence

New York Office of Administrative Trials and Hearings, OATH Index No. 181/18

A correction captain was charged with using unauthorized force against an inmate and making false statements.

The inmate claimed that he was secured and not resisting when the captain jabbed him with his baton; the captain and the escort officer contended that the inmate was unsecured and struggling with the officer when the captain jabbed him. A surveillance video of the incident was not produced at trial because the Department failed to preserve it and it was purged.

The investigator, based upon review of the video and witness statements, concluded that the inmate was not resisting and the force used by the captain was unauthorized.

OATH Administrative Law Judge Joycelyn McGeachy-Kuls, however,  recommended dismissal of the charges, finding that the captain’s testimony was more credible than the inmate’s, which contained unsubstantiated allegations regarding his injuries and of being placed in a chokehold. Further, the ALJ found that the investigator’s report contained significant inconsistencies, inaccuracies and omissions, which called its reliability into question. Judge McGeachy-Kuls viewed the department for failing to preserve the video as a "negative inference"

The employer's failure to preserve the video tape referred to in this decision might be viewed as an aspect of "spoliation of evidence." Spoliation of evidence is the destruction or alteration of evidence that makes it unavailable for use in a judicial or quasi-judicial proceeding. Spoliation is presumed to be damaging to the spoliator's interest with respect to proving its claims or defenses when it is intentionally changed, modified, deleted or destroyed.

In Burke v Queen of Heaven R.C. Elementary Sch., 151 AD3d 1608, the Appellate Division addressed allegations of spoilation of evidence, noting that "Where the evidence is determined to have been intentionally or wil[l]fully destroyed, the relevancy of the destroyed [evidence] is presumed."

In contrast, in Thomas v Mt. Vernon P.D., 249 A.D.2d 483, motion to appeal denied, 94 N.Y.2d 763, the employee contended that the appointing authority  failed to preserve tape recordings of telephone calls that an employee believed would helpful to the employee's defense in a disciplinary hearing.

The Appellate Division found that the record failed to show that the loss of this tape was due to bad faith on the part of the appointing authority and that the tapes in question were routinely reused after 30 days, which was “well before any disciplinary charges were brought against the individual." The court also noted that “contrary to [the employee's] contention that the tape recording was the best evidence as to whether the subject telephone call was ever made, direct evidence on that issue was offered at the hearing from the alleged parties to the conversation."

Addressing the false statement charge brought against the correction captain, the ALJ said that the charge was based upon the captain’s report on the number of jab strikes against the inmate as “one or two” in one instance and “several” in another. At the disciplinary hearing the captain explained that he believed several to mean an unspecified number. ALJ McGeachy-Kuls recommended dismissal of the charge, finding the language to be imprecise, but not false or misleading.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-181.pdf

 

Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Recent decisions by Administrative Law Judges of the New York Office of Administrative Trials and Hearings

Source: OATH

Underperforming assigned tasks

OATH Index No. 2077/17

An associate retirement benefits examiner was charged with incompetence for failing to complete the required daily number of cases. ALJ Noel R. Garcia found that the examiner was required to complete an average of three cases per day, but only averaged less than one case per day over a ten month period. He concluded that the examiner was consistently unable to perform her fundamental responsibilities. 30-day suspension recommended, agency imposed a 25-day suspension

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-2077.pdf

Refusal to obey a supervisor's lawful order

OATH Index No. 926/1

ALJ John B. Spooner recommended a 15-day suspension for a job opportunity specialist who was insubordinate and discourteous towards a supervisor. The employee refused to obey an order to process benefits, and he threw paper and gestured with his fist at the supervisor. This conduct caused the supervisor, who suffered from a stroke-related disability, to request early retirement to avoid similar encounters which could adversely affect her health. 

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-926.pdf

Delay in addressing alleged misconduct denied employee an opportunity to correct his or her conduct

OATH Index No. 1420/17

A sanitation supervisor was charged with failing to carry out his supervisory responsibilities, failing to accurately prepare, record and maintain information, and with failing to cooperate with an official inquiry. ALJ Kara J. Miller found that many of the charges involved incidents that occurred five to six years ago, which ultimately deprived the supervisor of an opportunity to correct his conduct because petitioner did not timely address the alleged misconduct. ALJ Miller sustained some of the charges, finding that the supervisor failed to accept responsibility.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/17_cases/17-1420.pdf

Determining the validity of an employee's "release of claims" against an employer

Determining the validity of an employee's "release of claims" against an employer

Charlery v New York City Department of Education, USCA, Second Circuit, Docket No. 17-1888

Jacqueline Charlery filed an action against the City of New York Department of Education, Board of Education of the City School District of the City of New York [Education] alleging claims for unlawful discrimination and retaliation in violation of the Americans with Disabilities Act and the Rehabilitation Act. Education filed a motion for judgment on the pleadings, converted by the district court, after giving notice to the parties, into a motion for summary judgment.

The court then found that Charlery had released her federal discrimination and retaliation claims in an agreement settling an earlier personal injury lawsuit against Education, granted Education's motion and entered judgment in Education's favor. Charlery appealed the district court's action.

With respect to the effect of a "release" entered into in the course of judicial proceeding, the Circuit Court, citing Livingston v Adirondack Beverage Co., 141 F.3d 434, explained that “[T]he validity of a release is a peculiarly fact-sensitive inquiry.”

Noting that in Charlery's alleged release appearing directly above the signature line is language stating “THE UNDERSIGNED HAS READ THE FOREGOING RELEASE AND FULLY UNDERSTANDS IT”, the Circuit Court said that “[w]e employ a ‘totality of the circumstances’ test to determine whether a release of . . . claims is knowing and voluntary,” explaining that the relevant factors courts should consider include:

(1) the plaintiff’s education and business experience,

(2) the amount of time the plaintiff had possession of or access to the agreement before signing it,

(3) the role of plaintiff in deciding the terms of the agreement,

(4) the clarity of the agreement,

(5) whether the plaintiff was represented by or consulted with an attorney, and

(6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law.

The Circuit Court opined that "The district court did not err when assessing these factors and concluding that Charlery’s waiver was knowing and voluntary."

Analyzing the first five factors listed above, the court noted that "Charlery, being a teacher, is a well-educated, trained professional." However, said the court, the time and role she played in deciding its terms - weigh in favor of a finding that the waiver was not knowing and voluntary. Although Charlery stated that she had read the agreement and signed the release the same day she received it and although she was represented by counsel in the settlement of the lawsuit, she played no role in negotiating the terms of the release.

However, continued the Circuit Court, the clarity of the agreement favors a finding that the waiver was knowing and voluntary as the agreement stated that Charlery was releasing Education from “any and all claims” for “any matter, cause or thing whatsoever that occurred through the date” the release was executed as Charlery was represented by counsel in that lawsuit.

The sixth factor, said the court, was inapplicable to this case because Charlery had not claimed that she was entitled by contract or law to receive "benefits" and  the issues involved alleged federal discrimination and retaliation claims.

Balancing the totality of the circumstances, the Circuit Court concluded "as the district court did," that in executing the release Charlery knowingly and voluntary waived her federal discrimination and retaliation claims and held that the district court did not err when it entered summary judgment in favor of Education on Charlery's federal claims.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/doc/17-1888_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/75ced8f5-4a98-4ee5-8d7f-4b505db46141/11/hilite/

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

An employee welfare plan administrator may be held liable for unintentional misrepresentations made concerning the plan by its non-fiduciary agent

In  Re Derogatis v Board Of Trustees of the Welfare Fund of The International Union of Operating Engineers Local 15, 15A, 15C & 15D, AFLCIO, et al., USCA, 2nd Circuit, Dockets Nos. 16-977-cv, 16-3549-cv

Emily DeRogatis appealed a District Court ruling awarding summary judgment to the Welfare Fund on her claims for relief asserted under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§1001 et seq. The genesis of these actions were certain "oral miscommunications" by Plan personnel to the DeRogatises before Mr. DeRogatis' death in 2011 involving [1] the Pension Plan governing the benefits payable to Mrs. DeRogatis as a surviving spouse after the death of her husband and [2] the Welfare Plan governing Mrs. DeRogatises’ entitlement to health benefits during and after Mr. DeRogatis' lifetime.

The Circuit Court agreed with the lower court's ruling that the Pension Fund trustees correctly denied DeRogatis’s request for an augmented survivor benefit following her husband’s death because the Pension Plan’s summary plan description adequately described the eligibility requirements for the benefits in question and thereby satisfied the trustees’ fiduciary duty to provide complete and accurate information to plan participants and beneficiaries and affirmed the lower court's granting the Fund's motion  for summary judgment in Docket No. 16-3549-cv.

Significantly, however the Circuit Court rejected the District Court's holding that "a plan administrator cannot be held liable for unintentional misrepresentations made about the plan’s operation by its non-fiduciary, 'ministerial' agent and on this basis denied the claim."

As to claims involving No. 16-977-cv, noting that the District Court granted summary judgment for defendants on this claim on the same “ministerial employee” ground, the Circuit Court rejected the District Court’s conclusion that the Welfare Plan summary plan description explained clearly its participants’ options to receive post-retirement health benefits."

Rather, said the court, given the evidence that Welfare Fund agents misstated material aspects of those same benefits when communicating with the DeRogatises, the Circuit Court identified as an open question of material fact "whether the Welfare Fund trustees breached their fiduciary duty to provide plan participants with complete and accurate information about their benefits" and vacated the judgment entered in favor of the Welfare Fund defendants by the lower court with respect to No. 16-977-cv.

Althought the Circuit Court opined that Welfare Fund defendants "may yet be entitled to summary judgment if they demonstrate that DeRogatis is not entitled to any equitable relief, thereby negating the final element of DeRogatis’s §502(a)(3) claim," the District Court's judgment with respect to No. 16-977-cv was vacated and the matter remanded to the lower court for further proceedings "consistent with this opinion." 

In contrast, the same is not always the rule where the administrative error is to the benefit of the individual. 

In Morley v Arricale, 66 N.Y.2d 665, the Court of Appeals said that "Estoppel is not available against a local government unit for the purpose of ratifying an administrative error ... made without compliance with formally adopted selection standards and procedures while in Galanthay v New York State Teachers' Retirement Sys., 50 NY2d 984, the court held that the retirement system "is obligated to correct errors in the computation of retirement benefits and the recoupment of funds erroneously paid is proper." 

The DeRogatis decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/doc/16-977_16-3549_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/d01ecfd0-e2b2-4c48-bd15-87a0220c26c1/1/hilite/

Complying with New York State mandatory sexual harassment training requirements

Complying with New York State mandatory sexual harassment training requirements*

By October 2018 employers in New York State either must have adopted the State's "Model Sexual Harassment Policy" or a similar policy and training procedure that meet or exceeds the State’s minimum standards.

In the event an employer does not adopt the State's model Sexual Harassment Policy, the policy adopted by the employer must: 

• prohibit sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights
• provide examples of prohibited conduct that would constitute unlawful sexual harassment
• include information concerning the federal and state statutory provisions concerning sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be applicable local laws
• include a complaint form
• include a procedure for the timely and confidential investigation of complaints that ensures due process for all parties
• inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially
• clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue
• clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any investigation or proceeding involving sexual harassment is unlawful

In addition, every employer in New York State is required to provide employees with sexual harassment prevention training. An employer that does not use the model training developed by the Department of Labor and Division of Human Rights must ensure that the training that they use meets or exceeds the following minimum standards.

The training must:

• be interactive
• include an explanation of sexual harassment consistent with guidance issued by the Department of Labor in consultation with the Division of Human Rights
• include examples of conduct that would constitute unlawful sexual harassment 
• include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment
• include information concerning employees’ rights of redress and all available forums for adjudicating complaints
• include information addressing conduct by supervisors and any additional responsibilities for such supervisors

Each employee must receive training on an annual basis, starting October 9, 2018. A number of organizations such as Paragon Compliance, LLC at https://www.paragoncompliancellc.com/, offer online interactive anti-sexual harassment training. 

* See §201-g of the New York State Labor Law.

Also note the following: 

1. New York City has adopted a Local Law, Local Law 96 of 2018, amending the administrative code of the City of New York in relation to anti-sexual harassment training mandating that all private employers with 15 or more employees conduct annual anti-sexual harassment training for all its employees, including supervisors and managerial employees of such employer. See New York City Administrative Code § 8-107 and New York City Charter § 815.1. ;

2. §5-336 of the General Obligations Law provides as follows: 

"Nondisclosure agreements. Notwithstanding any other law to the contrary, no employer, its officers or employees shall have the authority to include or agree to include in any settlement, agreement or other resolution of any claim, the factual foundation for which involves sexual harassment, any term or condition that would prevent the disclosure of the underlying facts and circumstances to the claim or action unless the condition of confidentiality is the complainant's preference. Any such term or condition must be provided to all parties, and the complainant shall have twenty-one days to consider such term or condition. If after twenty-one days such term or condition is the complainant's preference, such preference shall be memorialized in an agreement signed by all parties. For a period of at least seven days following the execution of such agreement, the complainant may revoke the agreement, and the agreement shall not become effective or be enforceable until such revocation period has expired."; and

3. §139-l of the State Finance Law provides, in pertinent part, for the inclusion of a statement on sexual harassment in bids pursuant to which:

"Every bid hereafter made to the state or any public department or agency thereof, where competitive bidding is required by statute, rule or regulation, for work or services performed or to be performed or goods sold or to be sold, shall contain the following statement subscribed by the bidder and affirmed by such bidder as true under the penalty of perjury: 'By submission of this bid, each bidder and each person signing on behalf of any bidder certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that the bidder has and has implemented a written policy addressing sexual harassment prevention in the workplace and provides annual sexual harassment prevention training to all of its employees. Such policy shall, at a minimum, meet the requirements of section two hundred one-g of the labor law.'"