Former Savona Mayor arraigned on charges related to defrauding the Village

Former Savona Mayor arraigned on charges related to defrauding the Village

Source: Office of the State Comptroller Thomas P. DiNapoli

Former Savona Mayor Gregge Harrian was arraigned in Steuben County Court on felony charges of five counts of offering a false instrument for filing and five counts of misdemeanor falsifying business records. As Mayor, Harrian allegedly submitted fraudulent vouchers and falsified records to trick the village into paying his personal expenses.*

“Mr. Harrian allegedly abused his authority to deceive the residents he was supposed to serve,” State Comptroller Thomas P. DiNapoli said, “I thank District Attorney Brooks Baker and Sheriff James Allard for bringing Mr. Harrian to justice and for our continued partnership to fight public corruption.”

Harrian, 52, resigned his position and left the state after allegedly submitting dozens of unsupported, false, inaccurate or unfounded mileage and purchase claims, according to the audit and investigation. A second unnamed defendant was indicted for facilitating the alleged crimes. 

The indictment was the result of a joint investigation by Comptroller DiNapoli, Steuben County District Attorney Baker and Steuben County Sheriff Allard.

An earlier State Comptroller’s auditfound that Harrian also appointed his wife as clerk-treasurer under his supervision, in violation of the village employee handbook, and approved her unsubstantiated claims of off-hours work for $21,000 in extra pay.

* N.B. These charges are accusations and the individual is presumed innocent unless and until proven guilty.

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. Review prior cases at http://www.osc.state.ny.us/investigations/index.htm

Administrative due process trumps an employer's claim to a "management right" to summarily terminate an employee for cause

Administrative due process trumps an employer's claim to a "management right" to summarily terminate an employee for cause

Matter of the Arbitration between the Town of Greece Guardians' Club, Local 1170 and the Town of Greece, 2018 NY Slip Op 08775, Appellate Division, Fourth Department

Supreme Court rejected the Guardians' Club, Local 1170's [Local 1170] petition to confirm an arbitration award and granted the Town of Greece's [Town] cross petition to vacate the arbitration award. The Appellate Division unanimously reversed the Supreme Court's ruling "on the law" and confirmed the arbitration award in favor of Local 1170.

The genesis of the demand for arbitration was the Town's chief of police terminating an employee for alleged misconduct without "notice and hearing." Local 1170 filed a grievance on behalf of the employee and ultimately demanded that the matter be submitted to arbitration as provided the Collective Bargaining Agreement [CBA] between the Town and Local 1170.

The arbitrator, noting that the Collective Bargaining Agreement [CBA] between the Town and Local 1170  allowed the Town to terminate the grievant "for cause," opined that the term "for cause" was synonymous with the term "just cause," and that "just cause encompasses some degree of due process." Finding that the grievant's termination fell short of the requirements of due process,* the arbitrator concluded that the grievant "was not provided even rudimentary due process" prior to being terminated and thus the employee's termination "must be found to be without just cause."

Among the defects in failing to provide the grievant with "due process" identified by the arbitrator were the following:

1. The termination letter that the chief of police delivered to the grievant at their meeting was broadly worded and failed to provide her with notice of the charges against her.

2. The grievant was not given an opportunity to respond to the charges of alleged misconduct before the chief of police made the decision to terminate the grievant.

3. The chief of police did not conduct a full and fair investigation inasmuch as he failed to interview a key witness to the alleged misconduct, the grievant herself.

Accordingly, the arbitrator concluded that there was a failure to provide the grievant with "even rudimentary due process" and thus the grievant's "termination must be found to be without just cause" and Local 1170's grievance sustained.

In affirming the arbitrator's decision the Appellate Division noted that "It is well settled that judicial review of arbitration awards is extremely limited", citing Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, cert dismissed 548 US 940, explaining that a ruling by an arbitrator is reviewable only pursuant to CPLR §7511(b), which states in relevant part: "The award shall be vacated on the application of a party who either participated in the arbitration or was served with a notice of intention to arbitrate if the court finds that the rights of that party were prejudiced by . . . an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made."

When does an arbitrator exceed his or her power under the statute? When, said the Appellate Division, "his [or her] award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power", citing Kowaleski, 16 NY3d at 90 [also see Matter of Town of Tonawanda [Town of Tonawanda Salaried Workers Assn.], 160 AD3d 1477,  leave to appeal denied 32 NY3d 908].

Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact. Indeed, notes the decision, "An arbitrator is not bound by principles of substantive law or rules of evidence, and may do justice and apply his or her own sense of law and equity to the facts as he or she finds them to be", citing Matter of NFB Inv. Servs. Corp. v Fitzgerald, 49 AD3d 747. Further, said the Appellate Division, courts lack the power to review the legal merits of the arbitration award, or to substitute the court's judgment for that of the arbitrator, "simply because it believes its interpretation would be the better one."

Supreme Court had vacated the arbitrator's award after it determined that "the arbitrator exceeded a limitation on his power when he determined that the grievance was arbitrable." In the words of the Appellate Division, "Even if the court is correct that the issue of arbitrability was not before the arbitrator, [the Town] conceded on appeal that the grievance was arbitrable. Thus, even assuming, arguendo, that the arbitrator exceeded a limitation on his power, we conclude that [the Town] was not prejudiced by his determination. Absent a showing of prejudice, the court lacks the authority to vacate an arbitration award where, as here, the matter is before the court on the application of a party who participated in the arbitration."**

The Appellate Division said that Supreme Court also erred insofar as it vacated the award on the ground that the arbitrator exceeded a limitation on his power by adding a substantive provision that was not included in the CBA by reason of "the absence of a stand-alone article [in the CBA] pertaining to employee discipline."  However, the "for cause" language set out in the management rights provision relied upon by Supreme Court expressly circumscribed the Town's right to discipline or discharge the grievant and the arbitrator had interpreted that language, consistent with arbitral precedent, as incorporating "a just cause standard that encompasses a right to due process."

Finally the Appellate Division indicated that it had concluded that "the arbitrator merely interpreted and applied the provisions of the CBA, as [he] had the authority to do."

* At the arbitration hearing the chief of police testified that he had made the decision to terminate the employee before meeting with the grievant. In addition, the Town conceded  that the grievant was entitled to notice and a hearing pursuant to Civil Service Law §75, and that the Town had  failed to comply with that statute. 

** The Appellate Division also explained that Supreme Court further erred in determining that the arbitration award was irrational, indicating that "An award is irrational if there is no proof whatever to justify the award". Noting that a court must confirm the award where "the arbitrator offer[ed] even a barely colorable justification for the outcome reached," in this instance the Appellate Division described the arbitration award as a thoughtful, well-reasoned opinion and award based on the hearing testimony of the chief of police and the undisputed evidence in the record, concluding that the arbitrator's award was not irrational.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08775.htm

As a general rule, the determination of whether a person is “qualified” should be made at the time of the alleged discriminatory employment action

As a general rule, the determination of whether a person is “qualified” should be made at the time of the alleged discriminatory employment action

Smith v. Town of Ramapo, USSC, Second Circuit, Docket 18-148-cv*

The single issue before the court in this appeal was whether Raymond K. Smith’s inability to perform the essential functions of his job at the time of the alleged discrimination forecloses his claim of discrimination under §102(a) of the Americans with Disability Act [ADA].   

Due to an injury Smith could no longer work as a police officer and Ramapo approved his disability status under New York General Municipal Law §207-c.** Smith alleged that Ramapo treated him differently than nondisabled officers in violation of the ADA.   

After qualifying for §207-c disability benefits, Smith was not permitted to use vacation days he had previously accrued when working as a police officer; and, while disabled, Smith was unable to accrue new vacation time or to take bereavement leave. The district court concluded that Smith failed to plead a necessary element of his ADA discrimination claim, namely that he was qualified to be a police officer at the time of the alleged discrimination. The Circuit Court agreed, explaining that one of the elements of a claim under the ADA is that an employee was "qualified to perform the essential functions of his job, with or without reasonable accommodation."

Smith’s injury, however, severely limited the use of his arm and shoulder and left him unable to engage in many daily activities and nowhere in his complaint did he claim that following his injury he could have performed the essential duties of a police officer, either with or without a reasonable accommodation. 

Citing Stevens v. Rite Aid Corp., 851 F.3d 224, the Circuit Court noted that where a disability renders an individual unable to perform the essential functions of the job, "that disability renders him or her unqualified.”

Thus Smith’s failure to plead that he was qualified to be a police officer is fatal to his claim. Although Smith cited Castellano v. City of New York, 142 F.3d 58, in contending he was "qualified' to be a police officer at the time he earned certain benefits, and that he is entitled to those benefits under the ADA regardless of his ability to serve as a police officer at the time of the discrimination, the court said that "Smith misreads Castellano, and his claim was properly dismissed," noting that Castellano hold that retired employees who were qualified to perform the essential functions of their jobs while employed remain entitled to receive post-employment benefits. The general rule, said the Circuit Court, is that the determination of whether a person is "qualified" should be made at the time of the discriminatory employment action and Castellano created a narrow exception to the rule for post-employment benefits intended to be used by retirees.   

In any event, the court indicated Smith’s claims were not about post-employment benefits, or any benefit used by a former employee., nor did he allege that he was ultimately deprive of the value of any previously accrued benefit, such as a payout for his accumulated vacation days.   

As the Castellano’s exception does not apply in Smith's situation and because Smith failed to plead that he was able to perform the essential duties of a police officer at the time of the alleged discrimination, the court ruled that he "failed to state a claim for disability discrimination."

Click here to Read a FREE excerpt from Disability Benefits for fire, police and other public sector personnel in New York State.

* The decision noted that it is a "Summary Order" and rulings by summary order do not have precedential effect.

** §207-c  provides for the payment of salary and medical expenses to a police officer who is injured in the performance of his or her official duties.

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/5c82839c-7f0a-452f-8af6-8449599f621b/8/doc/18-148_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/5c82839c-7f0a-452f-8af6-8449599f621b/8/hilite/

An application for retroactive membership in a retirement system must be supported by substantial evidence

A public retirement system's denial of an application for retroactive membership in the System must be supported by substantial evidence

Sears v DiNapoli, 2018 NY Slip Op 08610, Appellate Division, Third Department

§803.a of the Retirement and Social Security Law [RSSL] addresses processing applications for retroactive membership in a public retirement system of New York State and provides, in pertinent part, that "A public retirement system shall have the authority to grant relief from a failure to file an application for membership in that system in connection with service rendered prior to April first, nineteen hundred ninety-three in accordance with the provisions of this [§803]."

Patricia Sears, a permanent employee of the Department of Taxation and Finance from November 1977 until her retirement in July 2015 was enrolled in ERS as a Tier 3 member. Prior thereto her permanent appointment in 1977, Sears had been employed by Tax and Finance as a seasonal employment on two occasions, initially from March 4, 1976 to June 30, 1976 and then again from January 6, 1977 until September 16, 1977. Prior to the commencement of her second temporary period of employment with Tax and Finance Sears signed a waiver dated December 28, 1976 acknowledging her right to join the Retirement System and elected not to do so.*

After RSSL §803 was enacted in 1993, Sears sought, but was denied, retroactive Tier 2 membership in ERS. Shortly before Sears retired in July 2015, she again sought to have her ERS membership in Tier 3 changed to a Tier 2 membership. Although ERS again denied Sears' request for Tier 2 membership, Sears challenged the decision via an administrative hearing and the Hearing Officer recommended Sears' application for retroactive Tier 2 membership be granted. The Comptroller rejected the Hearing Officer's recommendation and Sears filed an Article 78 petition challenging the Comptroller's determination.

The Appellate Division said the ERS conceded, and its review of the record confirms, that the underlying determination denying Sears' application to Tier 2 membership in ERS was not supported by substantial evidence. In words of the court, "As the Hearing Officer aptly observed, the waiver signed by [Sears] in December 1976 cannot be applied retroactively to encompass [Sears'] initial period of seasonal employment from March 1976 to June 1976, and Sears testified without contradiction that she was neither offered an opportunity to join nor declined membership in the Retirement System at that time."

The court explained that there was no information in Sears' personnel file regarding her membership options or opportunities when she was first hired in 1976, nor were there any current employees who could attest to the membership notification procedures that were in place when Sears was initially employed by Tax and Finance. Further, said the court, the documentary proof offered at the hearing was insufficient to establish, among other things, that Sears participated in a procedure that a reasonable person would recognize as an opportunity to join or decline membership in the Retirement System.

Accordingly, the Appellate Division annulled the Comptroller's determination, granted Sears application for retroactive Tier 2 status in ERS and remitted the matter to ERS "further proceedings not inconsistent with this Court's decision."

In contrast, in Schuyler v New York State and Local Employees' Retirement System, 158 AD3d 909, the Appellate Division ruled that a "lack of documentation, coupled with information suggesting that petitioner's services were performed as an independent contractor rather than a state employee, supports the Comptroller's denial of petitioner's request for additional service credit." 

* Frequently employees, other than employees in the Labor Class, eligible for membership in ERS but not required to become a member, declined becoming a member in order to avoid being required to make employee contributions to ERS and participating in Social Security [Federal Insurance Contributions Act (FICA)]. Employees in the Labor Class were required to participate in Social Security regardless of their membership in ERS.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08610.htm

Historical Note: Eligibility to participate in Social Security was made available to public employees of the State of New York pursuant to an agreement between the State and the Social Security Administration as authorized by §1 of Chapter 619 of the Laws of 1953. Members of a public retirement system in service prior to the effective date of the agreement decline to participate in Social Security. As to such individuals wishing to participate in Social Security, the employee could elect to either (a) pay the employee contributions for Social Security in addition to paying the required employee contributions for his or her membership in the retirement system or (b) elect to apply his or her required employee contributions for participation in the retirement system towards paying for his or her required employee contributions for his or her participation in Social Security.