Appointing authority's application for disability retirement filed on behalf of an employee injured on the job rejected

In this action to review a determination of New York State Employees’ Retirement System [NYSERS] denying an appointing authority’s [Petitioner] application for disability retirement benefits Petitioner filed on behalf of a Correction Officer [Officer] injured in the line of duty, the Appellate Division concluded that the NYSLERS determination “finding that [Officer] was not permanently incapacitated from performing the duties of a light-duty assignment” was supported by substantial evidence and thus “it will not be disturbed.”

Officer had sustained various injuries while attempting to subdue an inmate and underwent various surgical procedures. With the exception of performing light-duty work for one year, Officer remained out of work since the date of the incident, during which time Officer collected benefits pursuant to General Municipal Law §207-c. 

Ultimately Petitioner filed an application for disability retirement benefits upon the Officer's behalf.* Although NYSLERS had initially evaluated Petitioners' application based upon whether Officer was permanently incapacitated from performing the full duties of a Correction Officer, following receipt of additional documentation from Petitioners, NYSLERS concluded that Petitioners' application should be assessed under the light-duty standard set forth in 2 NYCRR 364.3 (b). A Hearing Officer reached a similar conclusion, finding, among other things, that denial of petitioners' application was warranted because Officer was capable of performing light-duty work. The Comptroller adopted the Hearing Officer's findings and conclusions, resulting in Petitioner’s filing a CPLR Article 78 proceeding to challenge the Comptroller's determination.

Citing 2 NYCRR 364.3 [b] which provides that in the event an employee "has been continuously assigned to light, limited or restricted duties for at least two years prior to the date [upon which the] application for disability retirement benefits was filed with the Comptroller . . ., the Retirement System shall render its determination on the issue of permanent incapacity on the basis of such light, limited or restricted duty assignment." the Appellate Division rejectected Petitioners argument that application of the cited regulation is arbitrary and capricious given that Officer actually worked in her light-duty assignment for less than one year and “did not work in any capacity after September 21, 2010,” the Comptroller has held that the phrase "continuously assigned" — as applied in the context of 2 NYCRR 364.3 (b) — "does not mean continuous performance and is not interrupted by absence[s] from work while on sick leave."

In other words, said the Appellate Division, “the dispositive inquiry is whether the employee has been continuously assigned to light-duty work — not, as [Petitioners] argue, whether such employee has in fact continuously performed the light duties to which he or she was assigned”.

As the record reflected that Officer was continuously assigned to a light-duty position beginning in October 2009 — even though Officer concededly did not work at all after September 2010 and given the continuous nature of Officer's assignment, the Appellate Division held that the light-duty standard set forth in 2 NYCRR 364.3 (b) was properly applied to Petitioners' application for disability retirement benefits filed on behalf of Officer.

* Petitioners were authorized to file such an application pursuant to General Municipal Law §207-c (2) and Retirement and Social Security Law §605(a)(2).

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00904.htm

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Disability Benefits for fire, police and other public sector personnel - Addresses retirement for disability under the NYS Employees' Retirement System, the NYS Teachers' Retirement System, General Municipal Law Sections 207-a/207-c and similar statutes providing benefits to employees injured both "on-the-job" and "off-the-job." For more information click on:
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Pension boosting offered to encourage retirement or to encourage an individual not to retire may not be “pensionable compensation” for the purposes of the Retirement and Social Security Law

The Court of Appeals sustained the New York State Comptroller’s decision that a New York - New Jersey Port Authority [Authority] compensation adjustment program [Program] that “artificially enhanced certain employees' final average salaries”* were not “pensionable compensation” under Retirement and Social Security Law §431(3).** The Authority’s Program served “to increase ... retirement benefits” for employees and thus, said the Court, "any additional compensation paid in anticipation of retirement" must be excluded from final average salary calculations.”

The Court opined that “[g]overnment pensions are based on employees' regular average salaries. All New York State employees rely on the integrity of the pension system. The protection against its manipulation is one of the Comptroller's primary responsibilities.

The genesis of the Program was a statutory retirement incentive program*** that offered additional pension benefits to certain public employees if they retired before the end of the 2002. The purpose of the retirement incentive was "to achieve cost-savings for public employers and to avoid layoffs of public employees in th[e] time of fiscal need" following the September 11 attacks. However the Authority employees [Petitioners] in this CPLR Article 78 action were key executives of the Authority and  exempted from the Program. As an alternative, the Authority’s Chief Administrative Officer [CAO] recommended "a compensation adjustment program" that would "achieve [an] equivalent level of pension benefit for" employees, including [the CAO] who would be exempted from the retirement incentive.”

A Retirement System member's pension benefit depends upon their final average salary, i.e., "the average salary earned by … a member during any three consecutive years which provide the highest average salary" (Retirement and Social Security Law §443 [a]). The CAO suggested a salary increase to replicate the level of pension benefit that the executive employees would not otherwise be able to receive and the CAO’s proposal was adopted as a "retention program" the Petitioners signed letter agreements acknowledging their exemption from the retirement incentive and their acceptance of the "retention program," which was described as being "designed to provide a limited number of staff members with a parity' benefit" and received “the promised pay raises, which ranged from 4.5% to 11% of salary and were included in biweekly payroll checks, for periods ranging from nine months to ten years.”

Subsequently all Petitioners received determination letters from the New York State and Local Employees Retirement System [ERS], stating that the compensation adjustment payments should have been, or (in the case of the last three) would be, excluded from final average salaries for pension calculation purposes. ERS explained that the allowances were "retention payments made to delay retirement," and constituted "compensation paid in anticipation of eventual retirement." RSSL §431, however, provides that "[i]n any retirement or pension plan to which the state or municipality thereof contributes, the salary base for the computation of retirement benefits shall in no event include … any additional compensation paid in anticipation of retirement" (Retirement and Social Security Law §431 [3].”

The Hearing Officer found that the Authority had given "each of the applicants additional compensation to increase their final average salaries so that their pensions would equal what their pensions would have been had they been eligible for the retirement incentive and taken it in December 2002" and ruled that the ERS had acted reasonably in excluding the allowance payments from final average salary, concluding that ERS "had the authority to determine what payments were excludable as . . . made in anticipation of eventual retirement . . . , whether the applicant joined ERS before or after the effective date of § 431." The Executive Deputy Comptroller adopted these findings and conclusions and denied petitioner employees' applications for reconsideration.

The Appellate Division annulled the Comptroller's determination, granted the petition, and remitted the matter to the Retirement System (164 AD3d 1038 [3d Dept 2018]). The Court concluded that the "payments are more appropriately characterized as . . . made to delay petitioners' retirements, not to artificially inflate their final average salary in anticipation of retirement."****

RSSL §431 provides that "retirement benefits are to be computed on the basis of an employee's regular salary and not on any kind of termination pay or other form of additional compensation paid in anticipation of retirement." The salary base for the computation of retirement benefits “shall in no event include any of the following earned or received, on or after April first, nineteen hundred seventy-two:”

1. Lump sum payments for deferred compensation, sick leave, accumulated vacation or other credits for time not worked;

2. Any form of termination pay;

3. Any additional compensation paid in anticipation of retirement; or

4. That portion of compensation earned during any twelve months included in such salary base period which exceeds that of the preceding twelve months by more than twenty per centum."

However “pension boosting” may be made available to encourage individuals “to retire early” by promising an enhanced pension or may be offered in other contexts, including in exchange for a promise not to retire, as demonstrated by the decision in Thompson v New York State Teachers' Retirement Sys., 78 AD3d 1456.

Finding that the record contains substantial evidence supporting the Comptroller's determination that the Authority provided the compensation adjustments “to artificially increase the executive employees' final average salaries so that, upon retirement, they would receive pension increases roughly equivalent to those they would have received under the retirement incentive program” and supports the conclusion that the compensation, by design, was made in anticipation of petitioner employees' retirement within the meaning of the statute, the Court of Appeals reversed the ruling of by the Appellate Division and dismissed the petition.

* The decision characterizes such employees as “ executive employees” of the Authority.

** The Authority is a participating employer in the New York State and Local Employees Retirement System.

*** See Chapter 69 of the Laws of  2002.

**** See 164 AD3d at 1040.

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2020/2020_00997.htm

Employee alleges employer ignored her sexually hostile work environment and the negligent supervision claims

Plaintiff's claim of negligent supervision was based on, among other things, Office for People with Developmental Disabilities, an agency of  State of New York [collectively "Defendants"]  alleged failure to properly supervise its employees by allowing acts and words of retaliation against her following her report of patient abuse by another supervisor and her assistance in the investigation of that abuse.

Following a trial, a jury found in plaintiff's favor on the sexually hostile work environment and the negligent supervision claims against Defendants and dismissed the sexual harassment claim against a named individual defendant. Plaintiff was awarded $300,000 in damages on her sexually hostile work environment claims and $200,000 in damages on her negligent supervision claim.

Supreme Court denied Defendants' subsequent motion to set aside the jury verdict or, in the alternative, to order a new trial, and partially granted plaintiff's request for counsel fees. Defendants appeals from the judgment entered upon the jury verdict and from the order denying its postverdict motion. Plaintiff cross-appeals from that part of the order as partially denied her request for counsel fees.

Considering Defendants' argument that the jury verdict was unsupported by legally sufficient evidence and against the weight of the evidence the Appellate Division said that "A verdict may be set aside as unsupported by legally sufficient evidence where 'there is simply no valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial.'" In contrast, citing Matter of Grancaric, 68 AD3d 1279 the court explained that a jury verdict will be stricken as against the weight of the evidence "where the proof so preponderated in favor of the unsuccessful party that the verdict could not have been reached on any fair interpretation of the evidence."

Addressing Plaintiff's sexually hostile work environment claims, the decision noted that "an individual plaintiff must show that his or her workplace was permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of [his or her] employment and create an abusive working environment" and all circumstances must be considered, including the frequency of the alleged discriminatory conduct; its severity; whether it was physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfered with [an employee's] work performance.

In addition, the Appellate Division, citing Forrest v Jewish Guild for the Blind, 3 NY3d 298, opined that "the workplace must be both subjectively and objectively hostile" whereby a plaintiff must not only perceive that the conditions of his or her employment were altered because of discriminatory conduct, but the conduct must also "have created an objectively hostile or abusive environment — one that a reasonable person would find to be so."

However, as the Court of Appeals held in State Div. of Human Rights v St. Elizabeth's Hosp., 66 NY2d 684, "An employer cannot be held liable for an employee's discriminatory act unless the employer became a party to it by encouraging, condoning, or approving it." Further, "An employer's calculated inaction in response to discriminatory conduct may, as readily as affirmative conduct, indicate condonation," while an employer may "disprove condonation by a showing that it reasonably investigated complaints of discriminatory conduct and took corrective action.

Rejecting Defendants' argument that the verdict on the hostile work environment claims should have been set aside because it was not based on legally sufficient evidence and was contrary to the weight of the evidence, the Appellate Division held that "the evidence clearly supports the finding that Defendants knew or should have known of [the Plaintiff's coworker's] harassing conduct and failed to take appropriate action" and reached the same conclusion with regard to Plaintiff's negligent supervision claim.

Addressing Defendants' challenge to the amount of damages awarded by the jury, the Appellate Division opined that "a court may set aside a jury award of damages when that award 'deviates materially from what would be reasonable compensation' ... [and a] "A challenge to damages will only be successful where the record evidence preponderates in favor of the moving party to such a degree that the verdict could not have been reached on any fair interpretation of the evidence."

The Appellate Division, considering the jury awarding Plaintiff $300,000 on the hostile work environment claims and $200,000 on the claim against Defendants for negligent supervision, ruled that considering "limited evidence of Plaintiff's psychological trauma and the lack of medical proof as to the effects of the sexual harassment and coworker retaliation upon her" said that the award for damages on the hostile work environment claims should be reduced to $150,000 and the award on the negligent supervision claim should be reduced to $100,000, for a total award of $250,000.

Addressing Petitioner's objection to Supreme Court's reduction of counsel fees to 60% of the $344,067.94 of amount requested in fees and expenses, the Appellate Division concluded that there was no basis upon which to disturb the award made by the lower court. However, the Appellate Division's order included a provision for new trial on the issue of damages "unless, within 20 days after service of a copy of the order herein, Plaintiff stipulates to reduce the total award for said claims to $250,000, in which event said judgment and order, as so modified, are affirmed."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00897.htm

Final order

Addressing Petitioner's objection to Supreme Court's reduction of counsel fees to 60% of the $344,067.94 of amount requested in fees and expenses, the Appellate Division concluded that there was no basis upon which to disturb the award made by the lower court. However, the Appellate Division's order included a provision for new trial on the issue of damages "unless, within 20 days after service of a copy of the order herein, Plaintiff stipulates to reduce the total award for said claims to $250,000, in which event said judgment and order, as so modified, are affirmed."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2020/2020_00897.htm