Individuals serving a public entity as independent contractors are not eligible for member service credit in a New York State public retirement system

Petitioner, a member of the New York State and Local Employees' Retirement System [NYSERS], applied for retirement service credit attributed to his alleged employment by Nassau County for a period running from October 15, 1974 to December 19, 1976. His application was rejected. After a hearing, the Hearing Officer found that Petitioner had not established his entitlement to additional member service credit in NYSERS. The Comptroller adopted the Hearing Officer's findings of fact and conclusions of law and Petitioner appealed the Comptroller's determination.

The Appellate Division confirmed the Comptroller's ruling. Citing Matter of DeLuca v New York State & Local Employees' Retirement Sys., 48 AD3d 876, the Appellate Division explained that "[I]t is the Comptroller's duty to determine retirement service credits and his determination will be upheld by this Court if rational and supported by substantial evidence" and it is the claimant's burden to show that he or she is entitled to additional retirement member service credit.

According to the decision, Petitioner had testified that [1] he did work for and was issued checks by Nassau County during the relevant period;* [2] he worked under contract for the now-defunct Tri-State Planning Commission;** and [3] Nassau County was reimbursed through the Commission "for much of the money paid to him."

Although Petitioner "did not recall the exact terms of his relationship with the Commission," the Appellate Division reported that there were indications that the relationship was not one of employer and employee, e.g., [1] Social Security records indicating that Petitioner's 1974-1976 income came from self-employment and [2] Petitioner had previously characterized his work during the relevant period of time as that of an independent contractor.***

These element, said the court, demonstrated that Petitioner was not "on the payroll of a participating employer during the time in question" and constitutes substantial evidence for the Comptroller's decision denying Petitioner the additional member service credit with NYSERS he sought, notwithstanding evidence that might support a different result.

* In addition, Petitioner testified that FICA payroll taxes were not deducted from the checks he received for his service and that he was not on the County payroll.

** The Tri-State Regional Planning Commission was the conduit for a total of about $3 billion in Federal aid to counties and municipalities in New York, New Jersey and Connecticut for more than 20 years and was discontinued in 1982.

*** For additional information concerning the legal status of independent contractors go to:

https://publicpersonnellaw.blogspot.com/2016/02/distinguishing-between-employees-and.html

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01876.htm

Procedures required to be followed by an appointing authority seeking to place an employee on disability leave pursuant to Civil Service Law §72 involuntarily

The basics with respect to placing an employee on ordinary disability leave pursuant to §72 of the Civil Service Law* involuntarily, except where the appointing authority determines that the individual's continued presence at the job site constitutes a danger to the individual or to his or her coworkers or agency clients within the meaning of §72.5 of the Civil Service Law, are as follows:

1. An employee may not involuntarily be place on leave pursuant to §72.1 of the Civil Service Law by an appointing authority until employee has been first examined by a physician designated by the State Department of Civil Service or the municipal civil service commission having jurisdiction;

2. In the event the physician certifies that the individual is unable to perform the duties of his or her position and the appointing authority decides to place the individual on §72.1 leave, the employee must be notified of this decision and of his or her right to appeal the determination before being placed on such leave and,  except as permitted by Section 72.5, the appointing authority may not place the individual on leave pursuant to §72.1 leave until a final determination is made by the appointing authority; and

3. An individual placed on leave pursuant to §72.1 has the right to appeal the appointing authority's "final determination" placing him or her of such leave to the "civil service commission having jurisdiction."

In contrast, in the event the appointing authority deems the employee's continued presence at the job site to be an immediate danger to the individual or to his or her coworkers or agency clients, the employee may be placed involuntarily on disability leave immediately pursuant to §72.5 of the Civil Service Law.

Section 72, however, places “the burden of proving an employee's mental or physical unfitness on the appointing authority alleging it.” To satisfy this burden, the appointing authority must prove, by a preponderance of the evidence, that:

(i) the employee suffers from a disability unrelated to an occupational injury or disease;

(ii) that she or he is unable to competently perform her or his job duties; and

(iii) his or her inability to so perform is caused by his or her disability.

The focus of the §72 proceeding is on “the employee’s current fitness and ability to perform his or her job duties, not on his or her past condition or work performance” and “[p]ast performance is relevant only to the extent that it is probative of employee’s present condition and future conduct."

In a §72 disability proceeding, while the opinions of medical experts can inform and aid the fact finder in reaching the his or her conclusion, the fact finder is not required to accept the opinions or conclusions of any given expert, but must weigh the evidence in the record and draw his or her own inferences. Weighing the evidence and resolving issues of credibility “is primarily the province of the designated hearing officer, who has had the opportunity to see and hear the witnesses.

The testimony of an expert witness is part of the proof to be considered by the hearing officer and the hearing officer may reject an expert’s opinion if he or she finds the facts to be different from those which form the basis for the expert's opinion.

Absent the employee being immediately place on an involuntary leave pursuant to §72.5 of the Civil Service Law, the employee is continued as an "active employee on the job" until the employee is determined by the appointing authority to be disabled with respect to he or she satisfactorily performing his or her duties of the position. In the event the appointing authority makes a final determination that finds the employee to be disable and unable to satisfactorily perform his or her duties and places the individual on leave pursuant to §72, the appointing authority shall advised the employee of the appointing authority's decision and of the fact that the employee has the right to appeal the appointing authority's decision to the civil service commission having jurisdiction in accordance with §72.3 of the Civil Service Law.**

In this action, adjudicated before the New York City Office of Administrative Trials and Hearings [OATH], the employee had been placed on "pre-trial involuntary leave" pursuant to §72.5 of the Civil Service Law based upon complaints that she failed to perform assigned tasks and engaged in disruptive behavior, including spraying a chemical substance in the air, playing loud music, and singing at her work station. The employee was subsequently examined by a psychiatrist who found her unfit to perform the job due to a mental disability. The employee challenged the finding of medical expert that she was unfit to perform her duties and the need to place her on a "pre-trial involuntary leave."

As OATH Administrative Law Judge Astrid B. Gloade noted, the "complaints" recited by the appointing authority were not "pleading" and the fact that an employee committed the alleged acts "was not an element to be proven at the hearing.”  Rather the employee was diagnosed by the appointing authority's medical expert as having a "delusional disorder" that adversely affected her performance of her duties and the appointing authority was required to prove such "cause and effect."

Explaining that the medical expert's diagnosis introduced by the appointing authority was, in the opinion of the Administrative Law Judge, "unreliable," Judge Gloade observed that even if the appointing authority's evidence satisfied the first prong of its burden, the appointing authority failed to establish a causal connection between the "diagnosed delusional disorder" and employee’s inability to perform her job. In the words of the ALJ, "The fact that an employee may have a psychiatric disorder does not establish that she [or he] is unable to perform the duties of her [or his] position."

With respect to the employee's alleged failed to perform assigned tasks and engaged in alleged disruptive behavior at her work station, the ALJ said that this simply served as written notice of the facts upon which the appointing authority based its determination that the employee is not fit to perform her duties and forms the basis for having the employee medically evaluated.

Turning to the employee having being placed on "Pre-Hearing Suspension" pursuant to §72.5 of the Civil Service Law, the ALJ explained that by having placed employee on an "emergency leave prior to the trial," the appointing authority must further establish that the standard authorizing place the employee on leave under color of §72.5 was satisfied.

§72.5 permits the placement of the employee on involuntary "emergency leave" prior to a hearing only in situations where the agency has probable cause to believe that the continued presence of the employee on the job represents a potential danger to persons or property or would severely interfere with agency operations.

Following a three-day hearing, ALJ Gloade found that the appointing authority  did not prove that the employee was currently unfit to perform her duties or that there was a sufficient basis to place her on "pre-trial involuntary leave." The doctor’s report and testimony, said the ALJ, failed to provide the basis for her conclusion that the employee suffers from a mental disability which precludes her from performing her duties.

Addressing the employee's placement on involuntary pre-trial leave, §72.5 allows such leave only in emergency situations where the agency has probable cause to believe the employee’s continued presence on the job represents a potential danger to persons or property or would severely interfere with operations. Here, said the ALJ, the agency did not prove either justification. Judge Gloade opined that in this instance the standard that would justify placing the employee involuntarily on §72.5 was not met, noting that placing an employee in an involuntary emergency leave status is an “extraordinary measure,” due in part to the financial hardship to the employee because there is no limit to the length of such leave.***

Judge Gloade also noted that the appointing authority failed to demonstrate that the agency had probable cause to believe that the employee was dangerous or that her presence in the workplace would “severely interfere with operations.”

Also noted was that the testimony at the hearing indicated that the staff became “very concerned” about the employee’s behavior during the two workdays preceding imposition of the involuntary leave on the employee and additional justification for her placement on leave pursuant to §72.5 were claims that the employee refused to review assigned cases, ignored her supervisor’s instructions, and kept clutter at her desk.

Such behavior, however, was ruled by the ALJ to be insufficient to establish that the employee posed a danger to herself or to others. Nor, said Judge Gloade, did the evidence demonstrate that the employee's behavior would “severely interfere” with the unit’s operations as no evidence was presented by the appointing authority that the employee's conduct during the relevant time period caused any significant disruption to the unit’s functioning sufficient to warrant that she be placed on an involuntary leave pursuant to §72.5.

In the words of the Administrative Law Judge, "In sum, [the appointing authority] lacked probable cause to believe that an emergency leave was warranted between April 26, 2018, and May 29, 2018," and thus the employee was entitled to reinstatement to her position to to the restoration of any lost salary or leave credits used during that period.

Accordingly, ALJ Gloade recommended the appointing authority's petition be dismissed and that the employee be reinstated to her position with back salary, if any was due her, and restoration of any leave accruals the employee used during the period of her pre-trial leave. 

* Employees suffering an occupational injury or disease as defined in the Workers' Compensation Law and are unable to perform the duties of their position are placed on what is commonly referred to as "Worker's Compensation Leave" pursuant to §71 of the Civil Service Law 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 final determination of the civil service commission is binding on both the employee and the appointing authority. Either party, or both, however, may seek review of a final determination of a commission in accordance with the provisions of Article 78 of the Civil Practice Law and Rules.

*** Leave pursuant to §72 is "leave without pay" although an individual on such leave may elect use his or her "accrued leave credits" and other available leave credits until all such leave credits are exhausted in order to remain on the payroll. Further, in addition to involuntarily being placed on §72 leave by the appointing authority, when such an action is not initiated by the appointing authority an employee may request to placed on such leave, the approval of such a request to be granted at the discretion of the appointing authority.

N.B. A decision by the Second Circuit, Tooly v. Schwaller, 17‐3564‐cv, addressing  disability leave pursuant to §72 considered a defenses advanced by one of the defendants -- qualified immunity -- was handed down by the court on March 20, 2019. The text of the ruling is posted on the Internet at: http://www.ca2.uscourts.gov/decisions/isysquery/8e8a8a16-da14-4099-a4c4-311e44cc3be3/1/doc/17-3564_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/8e8a8a16-da14-4099-a4c4-311e44cc3be3/1/hilite/

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/19_cases/19-74.pdf

An employee serving a probationary period bears the burden of establishing that his or her "dismissal was due to causes unrelated to work performance and/or improperly motivated"

In York v McGuire, 63 NY2d 760, the Court of Appeals set out the basic rule concerning the dismissal of probationary employees as follows: “After completing his or her minimum period of probation* and prior to completing his or her maximum period of probation, a probationary employee can be dismissed without a hearing and without a statement of reasons, as long as there is no proof that the dismissal was done for a constitutionally impermissible purpose, or in violation of statutory or decisional law, or the decision was made in bad faith.”

The New York State Office of Children and Family Services [OCFS] had appointed an individual [Probationer] to his position in December subject to his satisfactory completion of a one-year probationary period.** The following November OCFS terminated Probationer without notice and hearing.

Probationer then brought an action pursuant to CPLR Article 78 seeking, among other things, a court order annulling OCFS' decision to terminate his employment. OCFS filed its answer to Probationer's petition and Supreme Court ultimately granted OCFS' motion to dismiss Probationer's petition. Probationer appealed the Supreme Court's ruling.

The Appellate Division affirmed the lower court's decision, explaining "[a] probationary employee ... has no right to challenge his or her [timely] termination of [his or her probationary] employment absent a showing that the dismissal was done in bad faith or for an improper reason." Further, said the court, the probationary employee bears the burden of establishing that his or her "dismissal was due to causes unrelated to work performance and/or improperly motivated."

Further still, the record before the Appellate Division indicates Probationer violated certain policies of the OCFS facility at which he was serving and failed to document an incident when residents at the facility had engaged in prohibited activity and failed to counsel them after the incident. In addition, noted the court, Probationer was rated  unsatisfactory in four out of five categories in a performance evaluation.

The Appellate Division opined that such evidence of Probationer's unsatisfactory performance together with evidence of minor infractions committed by him, indicate that "his termination was made in good faith" and the fact that Probationer "received some favorable recommendations" does not constitute a showing of improper motivation or bad faith by OCFS in its decision to terminate Probationer's employment with it.

Concluding that Probationer "failed to tender sufficient evidence showing that his termination was due to improper reasons or done in bad faith," the Appellate Division ruled that Supreme Court correctly dismissed Probationer's petition.

* In contrast, should an appointing authority elect to terminate a probationary employee prior to the individual completing his or her minimum probationary period, the employee must be afforded “notice and hearing” in accordance with the terms of the controlling law or the relevant disciplinary procedure set out in a collective bargaining agreement. As the Court of Appeals held in York v McGuire, supra, if the probationer has not yet completed his or her minimum period probation, he or she is entitled to “notice and hearing” as a condition precedent to termination on the theory that the individual is entitled to a minimum period of service to demonstrate his or her ability to satisfactorily perform the duties of the position.

** Typically an employee's probationary period is established at "not less than X months and not more than Y months. If no minimum probationary period is specified and the appointment is simply made subject to the satisfactory completion of the employee's probationary period the only window of opportunity for termination without initiating disciplinary action occurs at the end of the probationary period. As the Appellate Division characterized Probationer's appointment as being "subject to [satisfactory completion of] a one-year probationary period," presumably his probationary period fell within the ambit of 4 NYCRR 4.5(b)(1) by operation of law.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01692.htm

Principles governing judicial review of administrative determinations pursuant to the substantial evidence standard

The Justice Center for the Protection of People with Special Needs [Justice] issued a report setting out an adverse "substantiated finding" involving Petitioner's interactions with an individual with special needs ["Service Recipient"]. Petitioner asked Justice to amend its report to "unsubstantiated" and that it be sealed. The original substantiated finding was sustained by the Justice Center's Administrative Appeals Unit and the matter was referred for a hearing before an Administrative Law Judge [ALJ].

The ALJ conducted two hearings and issued a recommended decision finding that Justice had established by a preponderance of the evidence that Petitioner was guilty of the alleged adverse conduct involving the Service Recipient. A final determination and order was issued adopting the ALJ's recommended decision. The decision denied Petitioner's request to amend and seal the report and directed that Petitioner be permanently placed on the agency's Vulnerable Person's Central Register staff exclusion list. Based on this determination, the New York State Office of Alcoholism and Substance Abuse Services [OASAS] revoked Petitioner's license.

Petitioner filed a CPLR Article 78 proceeding in Supreme Court contending the  determination was not supported by substantial evidence in the record because it was based upon controverted hearsay evidence. As a question of substantial evidence was raised by Petitioner, the proceeding was transferred to the Appellate Division.

Citing Matter of Haug v State Univ. of N.Y. at Potsdam, 32 NY3d 1044, the Appellate Division noted that the Court of Appeals had recently reviewed the principles governing judicial review of administrative determinations under the substantial evidence standard and stated that, as relevant in this action, the high court had emphasized that "the substantial evidence standard is a minimal standard[,] . . . demand[ing] only that a given inference is reasonable and plausible, not necessarily the most probable. . . . [Thus,] [w]here substantial evidence exists, the reviewing court may not substitute its judgment for that of the agency, even if the court would have decided the matter differently."

As to considering hearsay evidence in an administrative hearing, the Appellate Division said that "hearsay is admissible as competent evidence in an administrative proceeding, and if sufficiently relevant and probative may constitute substantial evidence even if contradicted by live testimony on credibility grounds" [see Matter of Watson v New York State Justice Ctr. for the Protection of People with Special Needs, 152 AD3d 1025].*

The Appellate Division opined that the hearsay allegations made by the Service Recipient were sufficiently reliable because they were corroborated by independent evidence and "was consistent with video recordings from the facility's security cameras," noting that the ALJ had also considered evidence regarding the credibility of the Service Recipient and Petitioner.**

With respect to Service Recipient's credibility, Petitioner had argued that the Service Recipient [1] had fabricated her allegations to avoid immediate discharge from the facility based on her previous misconduct and [2] submitted an affidavit that she had executed, recanting her initial allegations. 

The decision reports that the ALJ had disregarded the affidavit because it had been provided to Petitioner's counsel following an interview during which counsel was accompanied by an investigator and the Service Recipient was alone and unrepresented and, further, because the Service Recipient subsequently reconfirmed the truth of her initial allegations in an interview with Justice investigators.  

Explaining that courts "will not weigh conflicting testimony or second guess the credibility determinations of the administrative fact finder" [ see Matter of Stephen FF. v Johnson, 23 AD3d 977], the Appellate Division held that Justice's determination was supported by substantial evidence.

* At the hearing before the ALJ, Justice relied solely upon hearsay testimony to establish the allegations concerning Petitioner.

** The decision indicates that the record also contained evidence relevant to Petitioner's credibility, namely, "his admission that he had violated the facility's code of conduct by maintaining ongoing relationships with former clients after their discharge."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01689.htm

PERB has exclusive jurisdiction to resolve a claim that a public employer committed an improper practice by discontinuing a past practice

In 2008 the City of Albany [Albany] began to implement changes to the health insurance plans it offered to Albany employees. In 2010, the Albany Police Officers Union, Local 2841 [Local 2841], the bargaining representative for police officers and and certain others working for Albany, filed an improper practice charge with the Public Employment Relations Board [PERB] alleging that Albany had changed the health insurance offered to certain retirees by unilaterally discontinuing the practice of reimbursing the retirees their Medicare Part B monthly premiums.

A PERB Administrative Law Judge dismissed the improper practice charge after a hearing. Local 2841 filed an administrative appeal with PERB but PERB sustained the Administrative Law Judge's determination, holding that Local 2841 did not establish that there was a binding past practice with respect to the health insurance benefit claimed by the retirees.

Local 2841 appealed PERB's determination and the Appellate Division, opining  that PERB's determination was not supported by substantial evidence, annulled the determination and granted Local 2841's petition [see Matter of Albany Police Officers Union, Local 2841, Law Enforcement Officers Union Dist. Council 82, AFSCME, AFL-CIO v New York Pub. Empl. Relations Bd., 149 AD3d 1236 [Decision 1]. When Local 2841 asked PERB to "fulfill its statutory duty" and provide a remedy following the Appellate Division's ruling in its favor, PERB declined, taking the position that it did not have an obligation to enter a remedial order because there had been no finding that there was a violation of the Taylor Law.

Local 2841 then commenced this, its second CPLR Article 78 proceeding,  concerning its allegation that Albany had violated Civil Service Law §209-a(1)(d) when it unilaterally discontinuing the practice of reimbursing retirees for their Medicare Part B monthly premiums and asked Supreme Court to compel PERB to issue an appropriate remedial order. PERB, however, contending that Local 2841 had "failed to state a cause of action," asked  Supreme Court to dismiss Local 2841's petition. Supreme Court granted PERB's motion to dismiss the petition and Local 2841 appealed.

Citing Matter of Chenango Forks Cent. Sch. Dist. v New York State Pub. Empl. Relations Bd., 21 NY3d 255, the Appellate Division observed that a binding past practice is established where "the practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected bargaining unit employees that the practice would continue" and PERB has exclusive jurisdiction to resolve a claim that a public employer committed an improper practice by discontinuing a past practice.

As the PERB's decision was made after a mandated hearing, the Appellate Division explained that its review of PERB's ruling in Decision 1 was limited to determining whether PERB's decision was "supported by substantial evidence," and it had found that it was not so supported. In contrast, in this action, said the Appellate Division, Local 2841 is seeking a writ in the nature of mandamus to compel PERB to impose a remedy based on the Appellate Division's holding in Decision 1.

While mandamus may be available to a party to compel the enforcement of a clear legal right where a public official has failed to perform a duty enjoined on the official by law, the Appellate Division said that "... while a mandamus is an appropriate remedy to enforce the performance of a ministerial duty, ... it will not be awarded to compel an act in respect to which the officer may exercise judgment or discretion."

The Appellate Division said that in Decision 1 it granted Local 2841's petition "only to the extent of finding that PERB's determination was not supported by substantial evidence." In contrast, the court stated that it had not found that Albany had violated Civil Service Law §209-a(1)(d) and thus Local 2841 has not established a clear right to mandamus relief directing PERB to issue a remedy.

In other words, the underlying issue -- did Albany engage in an improper practice -- has not been resolved. The Appellate Division then ruled that while Local 2841 had not demonstrated a clear legal right to a remedial order, Local 2841 and Albany "are entitled to a final and binding resolution of this issue" by PERB.

Accordingly, the Appellate Division remanded the matter to PERB and directed PERB to resolve "the 2010 improper practice charge in a manner that is not inconsistent with" the Appellate Division's determination in Decision 1.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01699.htm