An arbitration award may not be confirmed by a court if it is in explicit conflict with law, rule or regulation and the relevant policy concerns

In this proceeding brought pursuant to CPLR Article 75 to modify an arbitration award the Nassau Healthcare Corporation[Employer] appealed that portion of an arbitration award that ordered Employer to reinstate three Petitioners* [Employees] to their former positions while the Employee's cross-appealed that part of the arbitration award providing for reinstatement without back pay.

The genesis of this action was the Employees' being terminated by the Employer based upon an incident that occurred during which the Employees allegedly ignored approximately nine minutes of visual and audible alarms signaling that a ventilator-dependent resident was in respiratory distress.

Pursuant to the collective bargaining agreement, the Employees' collective bargaining representative filed a grievance challenging the terminations and the matter ultimately proceeded to arbitration. The Employees elected not to testify at the hearing.**

Following the hearing, the arbitrator issued an award finding that Employer did not sustain its burden of proving that the blaring alarm of the central alarm system throughout the unit, which signaled a respiratory emergency, was triggered. However, based on the employees' failure to testify at the hearing, the arbitrator drew an adverse inference against them on the factual issue of whether the beeping alarm coming from the ventilator machine itself in the patient's room, which did not necessarily signal an emergency, was audible to them at the nursing station.

The arbitrator reinstated the employees to their former positions, but directed that they be reinstated without back pay. Supreme Court confirmed the arbitration award and the Employer appealed.

The Appellate Division granted the Employer's motion to vacate the arbitration and dismissed the Employee's cross-appeal is dismissed as academic. The court also awarded "one bill of costs" to the Employer, payable by the Employees.

The Appellate Division, citing Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, and Matter of Banegas v GEICO Ins. Co., 167 AD3d 873, pointed out that an arbitration award may be vacated if it violates strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on an arbitrator's power.

Considering the public policy exception, the Appellate Division commented that "a court may vacate an arbitral award where strong and well-defined policy considerations embodied in constitutional, statutory or common law prohibits a particular matter from being decided or certain relief from being granted by an arbitrator" and the focus of the analysis is on the award itself." Accordingly, a court may vacate an award on public policy grounds "where the final result creates an explicit conflict with other laws and their attendant policy concerns," quoting from New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d at 327.

Here, opined the Appellate Division, the record reflects that after the employees were indicted on felony charges, OMIG notified the employees that they were excluded "from participation in the New York State Medicaid program based on New York State regulations authorizing the immediate exclusion of a person who has been charged with committing an act which would be a felony under the laws of New York and which relates to or results from," among other things, "the furnishing of or billing for medical care, services or supplies."

Citing 18 NYCRR 515.5(c), the court said that "[a] person who is excluded from the program cannot be involved in any activity relating to furnishing medical care, services or supplies to recipients of medical assistance for which claims are submitted to the program, or relating to claiming or receiving payment for medical care, services or supplies during the period." Further, the regulations also preclude reimbursement for medical care, services, or supplies provided by an excluded person.

Clearly the final result of the arbitrator's award in this case, reinstating the Employees to their former positions, "creates an explicit conflict with the subject regulations and their attendant policy concerns." Accordingly, under the particular circumstances of this case, the Appellate Division concluded that Supreme Court should have granted the Employer's motion to vacate that portion of the award providing for the reinstatement of the Employees, thereby mooting the claim to back salary.

* The three Employees involved were two registered nurses and a nurse aide

**Subsequently the Employees were indicted on several misdemeanor and felony charges, including criminally negligent homicide..

The decision is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_06777.htm

 

Unlawful discrimination complaint dismissed as merely setting out legal conclusions concerning acts alleged to constitute unlawful discrimination

Absent setting out sufficient allegations of unlawful discriminatory acts in the CPLR Article 78 complaint, a petitioner's claim of unlawful discrimination will not survive the defendant's motion to dismiss  

The petitioner [Plaintiff] in this action contended that such acts as her supervisor's adjusting her time card to reflect a late arrival at work, telling Plaintiff that as a probationary employee she could be terminated at any moment and giving the Plaintiff a negative performance review were due to her disability.

Supreme Court granted the defendants-respondents' [Defendants] motion to dismiss Plaintiff Article 78 complaint alleging her employer's hostile work environment as not viable within the meaning of the New York City Human Rights Laws. Supreme Court held that Plaintiff's examples "were not sufficient allegations of discriminatory acts."

Plaintiff appealed the Supreme Court's decision. The Appellate Division unanimously affirmed the lower court's ruling.

Citing Ji Sun Jennifer Kim v Goldberg, Weprin, Finkel, Goldstein, LLP, 120 AD3d 18, the Appellate Division opined that Plaintiff's complaint failed to state a cause of action for hostile work environment under New York City's City Human Rights Law* because it does not allege that Defendants' actions occurred under circumstances that gave rise to an inference of discrimination.

Further, said the court, Plaintiff's complaint did not allege facts that would establish that she was treated less well than similarly situated probationary employees because of her disability. Rather, said the court, Plaintiff's complaint merely "asserts the legal conclusions that the  [Defendants'] actions ... were due to her disability."

In the words of the Appellate Division, "Absent sufficient allegations of discriminatory acts, plaintiff's claim against [the individually named] defendant cannot be sustained pursuant to the City Human Rights Law and was properly dismissed by the Supreme Court."

* See Administrative Code of City of New York §8-107.

The decision is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_06976.htm

 

The Workers' Compensation Board's determination whether a claimant violated §114-a of the Workers' Compensation Law will not be disturbed if supported by substantial evidence

The Workers' Compensation Board [Board] rejected the employer's [Employer] claim the there were procedural errors in its employee's [Claimant] claims for benefits and said that the Board would exercise its discretion to grant review of the application filed by the Claimant in consideration of "Claimant's substantial completion of question number 13 on the application for workers' compensation benefits form." The Board then reversed the decision of the Workers' Compensation Law Judge [WCLJ] holding that that Claimant had violated §114-a Workers' Compensation Law,  finding there was insufficient evidence to support the WCLJ's determination. The employer appealed the Board's decision.

The Appellate Division said that Employer principally argued that Claimant's response to question number 13 was not complete and that the Board therefore lacked the authority and discretion to review Claimant's application for benefits, citing 12 NYCRR 300.13(b).

The court rejected the Employer's argument, holding that the Board has the "authority to adopt reasonable rules consistent with and supplemental to the provisions of the Workers' Compensation Law," and the Chair of the Board may "make reasonable regulations consistent with the provisions of the statutory framework." 

Noting that Employer was correct that 12 NYCRR 300.13 [b] [1] of the Board's regulations require an applicant seeking Board review "to fill out the RB-89 form completely and in the proper format," the Appellate Division said that the Board's regulations "do not mandate denial of an incomplete application for Board review." Rather, the court explained that the regulations provide that such an "application for review maybe denied" [sic]  by the Board, in its discretion, where the application "does not comply with prescribed formatting, completion and service submission requirements."

Considering Claimant's response to question number 13 on her application for Board review, which listed numerous documents in support of her administrative appeal, the Appellate Division held that the Board:

[1] acted within its discretion in granting review of Claimant's application: and

[2] acted within its discretion to excuse any alleged defects relating to the timeliness and proper service of Claimant's application for Board review.

Addressing the merits of Claimant's application for benefits, the Appellate Division pointed out that §114-a(1) of the Workers' Compensation Law provides that a claimant who, for the purpose of obtaining workers' compensation benefits, or to influence any determination related to payment thereof:

1. Knowingly makes a false statement or representation as to a material fact ... shall be disqualified from receiving any compensation directly attributable to such false statement or representation;"

2. For purposes of Workers' Compensation Law §114-a (1), a fact is material "so long as it is significant or essential to the issue or matter at hand;" and

3. An omission of material information "may constitute a knowing false statement or misrepresentation".

However, the Board, declared the Appellate Division, is the sole arbiter of witness credibility and its determination as to whether a claimant violated §114-a Workers' Compensation Law "will not be disturbed if supported by substantial evidence."

After considering the evidence in the record the Appellate Division opined that the Board's finding that Claimant did not make a misrepresentation of a material fact to obtain workers' compensation benefits "is supported by substantial evidence and will not be disturbed."

The decision is posted on the Internet at http://www.nycourts.gov/reporter/3dseries/2020/2020_06832.htm