Employee’s excellent work record and prior service insufficient to mitigate imposing a penalty of termination considering the acts of the misconduct

Employee’s excellent work record and prior service insufficient to mitigate imposing a penalty of termination considering the acts of the misconduct
Matter of Sindoni v County of Tioga, 2009 NY Slip Op 08126, decided on November 12, 2009, Appellate Division, Third Department

Penny Sindoni, a senior typist employed by the County of Tioga was suspended and charged with misconduct and incompetence pursuant to Civil Service Law §75. The charges alleged that Sindoni created a "hostile, intimidating, disruptive, uncomfortable or some or all of the above, work environment" and her alleged violation of the County’s Policy 53.* Sindoni was alleged to have formed a club known as the "I Hate Teena Club," because of her animosity towards that individual.

Following a hearing pursuant to Civil Service Law §75, the Hearing Officer found that Sindoni was a central player in the "I Hate Teena Club," wore a ribbon to demonstrate membership in this club and made threatening and intimidating comments to other coworkers who informed the administration of the existence of such club."

The County adopted the Hearing Officer recommendation that it terminate Sindoni’s employment. Sindoni filed a petition in Supreme Court pursuant to CPLR Article 75 seeking reinstatement to her former position.

The Appellate Division concluded that the Hearing Officer's findings with regard to the six specifications of which Sindoni was found guilty were supported by substantial evidence.

Although the court said that there was evidence that could support a different result from that reached by the Hearing Officer, the court “may not substitute its own judgment for that of the Hearing Officer and, to the extent that conflicting versions of the dispute exist, we defer to the Hearing Officer's credibility determinations.” Further, said the Appellate Division, its review of the record revealed sufficient evidence of Sindoni’s misconduct to support the Hearing Officer's determination sustaining the relevant charges against her.

As to Sindoni’s contention that the penalty recommended by the Hearing Officer, and adopted by the County, -- termination -- was excessive, the Appellate Division said that a penalty will be disturbed only if it is "so disproportionate as to be shocking to one's sense of fairness."

The court noted that the Hearing Officer specifically distinguished Sindoni from the other participants in the activities constituting the misconduct and recommended her dismissal, in part, because she was "the only employee who made threats to the person or property of others." Further, said the court, the Hearing Officer also determined that Sindoni was the main player in the hate club and noted that "she had not expressed any remorse regarding her conduct."

As to possible mitigation with respect to imposing a penalty, Appellate Division said that “Irrespective of her ‘excellent’ work record and 11 years of service, '[Sindoni’s] poor judgment and lack of remorse, the disturbing nature of her comments . . . and [the County’s] strict policy concerns regarding threats of violence’ warrant her termination.”

* Tioga County Policy 53 requires all employees to "maintain a work environment free from violence, threats of harassment, intimidation or coercion," as well as disruption. It also prohibits "[a]ny verbal or physical conduct that has the purpose or effect of substantially interfering with the employee's ability to do his or her job."

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08126.htm

The New York State Retirement System has the authority to investigate potential fraud or illegality concerning the receipt of public pension benefits

The New York State Retirement System has the authority to investigate potential fraud or illegality concerning the receipt of public pension benefits
Matter of Hogan v Cuomo, 2009 NY Slip Op 08105, Decided on November 12, 2009, Appellate Division, Third Department

John B. Hogan was receiving a retirement allowance from the New York State Employees’ Retirement System based on his service as an attorney for multiple school districts between 1967 and 2000. During that time it was alleged that Hogan also maintained a private law practice.

The Retirement System served Hogan with a subpoena duces tecum pursuant to Executive Law §63(12) and State Finance Law §190, demanding production of various documents including billing records, tax statements, and information concerning salary, compensation and pension benefits related to his services for school districts. Hogan asked the court to quash the subpoena Supreme Court denied his motion and Hogan appealed.

The Appellate Division said that "An application to quash a subpoena should be granted only where the futility of the process to uncover anything legitimate is inevitable or obvious or where the information sought is utterly irrelevant to any proper inquiry," citing Anheuser-Busch, Inc. v Abrams, 71 NY2d 327. Further, said the court, the entity challenging a subpoena bears the burden of demonstrating a lack of authority, relevancy or factual basis for its issuance.

Commenting that the Retirement System “has the authority to investigate potential fraud or illegality concerning the receipt of public pension benefits,” the Appellate Division said that the Retirement System “benefits from a presumption that [it] is acting in good faith and, thus, need only show that the documents [it] seeks bear some reasonable relationship to the subject matter of a legitimate investigation.”*

Concluding that the Retirement System “had more than an adequate basis to issue the subpoena here,"** the Appellate Division ruled that Supreme Court properly denied Hogan's motions to quash it.

* The Appellate Division said that subpoena sought information that could clarify Hogan's status as either an employee or independent contractor of the school districts and that this information was relevant to the Retirement System's investigation into Hogan’s receipt of public pension benefits.

** The decisions states that the Retirement System's records disclosed that Hogan was listed as an employee of as many as six school districts at the same time, while also operating a private law office. In the year after he retired as a public employee, Hogan continued supplying the same services to one school district, but as an independent contractor.

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08105.htm

See also Matter of Roemer v Cuomo, 2009 NY Slip Op 08120, also decided on November 12, 2009, by the Appellate Division, Third Department, and posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08120.htm

The terms of a negotiated settlement held a bar to future litigation to confirm a post-settlement arbitration award

The terms of a negotiated settlement held a bar to future litigation to confirm a post-settlement arbitration award
Matter of Troeller v New York City Dept. of Educ., 2009 NY Slip Op 08133, decided on November 12, 2009, Appellate Division, First Department

New York State Supreme Court Judge Eileen A. Rakower denied the petition filed by Robert J. Troeller to confirm an arbitration award. The Appellate Division unanimously affirmed Judge Rakower’s ruling.

The decision notes that the parties “negotiated a settlement” before the arbitration award was issued. Significantly, said the court, the stipulation barred Troeller from initiating any proceeding pursuant to Article 75 of the State’s Civil Practice Law and Rules “except to enforce the stipulation” itself.

By including a “provision relating to the parties' rights to pursue resolution of the jurisdictional issue,” the Appellate Division concluded that it was “clear that the parties intended to preserve their rights to make jurisdictional arguments” should a proceeding such as this one arise in the future.

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08133.htm

Employee terminated after failing to comply with the terms of a §3020-a disciplinary penalty imposed by the hearing officer

Employee terminated after failing to comply with the terms of a §3020-a disciplinary penalty imposed by the hearing officer
Harris v Department of Education of the City of New York, 2009 NY Slip Op 08140, Decided on November 12, 2009, Appellate Division, First Department

The penalty imposed by New York City Department of Education's (DOE) Section 3020-a Disciplinary Hearing Officer on Bruce Harris, a tenured teacher, required Harris to serve a six-month suspension without pay and to complete sexual harassment training before he could be reinstated to his position. When Harris failed to complete “the directed sexual harassment training 10 months later,” the Department terminated him from his position.

Harris initiated a lawsuit pursuant to CPLR Article 78 challenging the termination of his employment, contending that the Hearing Officer’s decision was ambiguous and that, in any event, due process demanded that he be given a pre-termination hearing pursuant to Education Law §3020 before the appointing authority could remove him from his position as a tenured teacher. Harris asked Supreme Court to direct the Department to reinstate him with back pay and benefits.

New York State Supreme Court Judge Sheila Abdus-Salaam dismissed his petition and Harris appealed her ruling.

As to Harris’ contention that the Hearing Officer’s decision was ambiguous, the Appellate Division said that “There is no ambiguity, patent or otherwise” in the decision issued by Hearing Officer. On the contrary, said the court, “the mandate of the decision's language was clear in that [Harris], a tenured teacher, was to both serve his six-month suspension and complete the sexual harassment training before he could be reinstated to his position.

As to Harris’ argument that “a second hearing pursuant to Education Law §3020-a was necessary before his employment was terminated,” the Appellate Division said that there was no merit to the claim as “as [Harris] raised no factual issue over the completion of the directed training.”

In the words of the Appellate Division, “… there was no basis to find that [Harris'] due process rights were in any way violated, as the record shows that DOE held a full hearing pursuant to Education Law §3020-a and presented testimony from the complainant and other witnesses; [Harris] also presented evidence, including his own testimony. The Hearing Officer then issued a detailed decision based on the evidence, and the record provides ample support for the Hearing Officer's findings.”

The Appellate Division then affirmed Supreme Court Judge Abdus-Salaam ruling dismissal of Harris’ CPLR Article 78 petition.

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08140.htm

Advisory and binding arbitration

Advisory and binding arbitration
Benjamin Rush Employees United v McCarthy, 76 NY2d 781

The question of whether an arbitrator's determination is either advisory or binding is usually set out in the arbitration clause of the collective bargaining agreement.

In Benjamin Rush Employees United v McCarthy, the Court of Appeals considered some of the conditions under which an arbitrator's determination pursuant to an "advisory arbitration" clause could become binding. The agreement between the union and the employer included an arbitration clause providing that "the decision of the arbitrator shall be advisory unless accepted by both parties, in which case it will become binding.”

The arbitrator sustained a grievance and awarded the employee reinstatement with back pay. The employer refused to implement the arbitration award and the union sought a court order confirming the award pursuant to Article 75 of the Civil Practice Law and Rules. The dismissal of the union’s petition to confirm the award was affirmed by the Court of Appeals.

One of the arguments made by the union was that when the parties submitted the matter to the arbitrator, they converted "advisory arbitration" into "binding arbitration." It contended that asking that the arbitrator fashion a remedy if he or she upheld the grievance was a clear indication that the parties intended to be bound by the arbitrator's ultimate determination of the matter.

The Court of Appeals, in rejecting the union's attempt to have the award confirmed, said "statutory confirmation of an expressly rejected arbitration solution would nullify key provisions of the contract itself [i.e., the decision was advisory unless both of the parties accepted the determination], violating a cardinal rule of construction." The decision notes that "the parties have an express contractual option to accept or reject a decision after the arbitrator renders it."

The court then said that the union's contention that the parties transformed "advisory arbitration" into "binding arbitration" by stating that the arbitrator was to fashion a remedy if he or she sustained the grievance "would render the [contract's arbitration] clause a nullity."

The Court of Appeals then distinguished the Rush Employees situation from the facts in Board of Education v Yonkers Federation of Teachers, 46 NY2d 727, another case involving the issue of advisory arbitration. In Yonkers the arbitration clause was binding only with respect to (1) a specific issue submitted to the arbitrator and (2) the agreement provided that the arbitrator was to be notified of that fact.

The Court said that in Yonkers "the parties waived the advisory nature of the arbitration by requesting a remedy without including any limitation on the arbitrator's power to bind them."
In the Rush Employees situation, said the Court, the clause in the agreement between the union and the employer "made the arbitration undeviatingly advisory unless the parties expressly and affirmatively elected to be bound."

In the Yonkers case, the parties indicated if they were to be bound by the arbitrator's decision before he or she issued the award. In the Rush Employees case, the parties reserved the right to agree to be bound by the arbitrator's award until after it was published by the arbitrator. Further, a Rush Employees type arbitration award was to be "binding" only if both agreed.

Presumably this could be done either before the matter was submitted to the arbitrator or after the award was issued. However merely asking the arbitrator to determine the nature of the remedy were he or she to uphold the grievance does not convert a Rush Employee type "advisory" arbitration procedure into binding arbitration.

Mitchell H. Rubinstein, an Adjunct Professor of Law at St. John’s Law School and New York Law School, recently authored a scholarly article addressing this important public sector labor relations issue.

In his Law Review article Advisory Labor Arbitration Under New York Law: Does it Have a Place in Employment Law?, 79 St. Johns L. Rev. 418, Professor Rubinstein discusses advisory arbitration and contrasts it with the more common final and binding arbitration method of dispute resolution.

The Law Review article is available on the Internet at the following web site: http://findarticles.com/p/articles/mi_qa3735/is_200504/ai_n14900922/

Electing to proceed to arbitration despite an alleged failure to comply with the conditions precedent to arbitration

Electing to proceed to arbitration despite an alleged failure to comply with the conditions precedent to arbitration
Matter of DeMartino v New York City Dept. of Transp., 2009 NY Slip Op 08073, decided on November 10, 2009, Appellate Division, First Department

The Appellate Division affirmed the decision of New York State Supreme Court Judge Joan B. Lobis confirming an arbitration award requiring the New York City Department of Transportation [DOT] to reinstate Gene DeMartino to his former position.

The arbitrator had determined that DOT had violated its “Controlled Substance and Alcohol Abuse Policy for Holders of a Commercial Driver's License” when it terminated DeMartino rather than offer him the opportunity to participate in a substance abuse program.

The arbitrator then issued a determination-requiring DOT to reinstate DeMartino and to offer him the chance to participate in a substance abuse program.

DOT filed an appeal challenging the arbitrator’s determination pursuant to CPLR Article 75. The Appellate Division sustained the arbitration award and dismissed DOT’s petition.

One of the arguments advanced by DOT was that DeMartino failed to comply with the conditions precedent to arbitration* and thus had no right to arbitrate his grievance.

The Appellate Division said that by proceeding to arbitration without moving for a stay, DOT waived their claim that DeMartino failed to comply with the conditions precedent to arbitration, citing Matter of Commerce & Indus. Co. v Nester, 90 NY2d 255 and thus the arbitrator had jurisdiction to decide the dispute.

In response to DOT’s “violation of public policy” argument, the Appellate Division said that the arbitrator's order to reinstate the employee did not violate public policy.

The court said that "[T]he scope of the public policy exception to an arbitrator's power to resolve disputes is extremely narrow" and that "Judicial restraint under the public policy exception is particularly appropriate in arbitrations pursuant to public employment collective bargaining agreements, citing Matter of New York City Tr. Auth. v Transport Workers Union of Am., Local 100, AFL-CIO, 99 NY2d 1.

* CPLR §7511 provides that arbitration award may be vacated if the court finds that the rights of a party were prejudiced by the failure to follow the procedures set out in Article 75, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection [emphasis supplied].

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08073.htm

To be effective, a waiver of a right to NYS Retirement System death benefit must satisfy three tests

To be effective, a waiver of a right to a NYS Retirement System death benefit must satisfy three tests
Rice v DiNapoli, 2009 NY Slip Op 32573(U), November 5, 2009, Supreme Court, Albany County, Docket Number: 1915-09, Judge: Joseph C. Teresi [Not selected for publication in the Official Reports]

Adam Rice, as Administrator of the Estate of Gary Rice, filed a lawsuit seeking a declaration that the death benefit payable by the New York State Employees' Retirement System following the death of Gary Rice is payable 50% to Eva Rice and 50% to him as Administrator of the Estate.

The Retirement System, taking the position that it was merely the stakeholder, advised the Court that the Retirement System "awaits the court's order instructing payment".

Adam moved for summary judgment, which the court granted.

Although Gary’s Retirement System beneficiary designation made Eva the 100% beneficiary. Judge Teresi found that Eva had waived her right to a portion of Gary’s Retirement System death benefit.

According to the ruling, Gary and Eva subsequently entered into a Separation Agreement that provided that “[u]ntil such time as the Domestic Relations Order is signed, and entered, [Gary] agrees to keep [Eva] listed as a 50% beneficiary on his in-service death benefit."

The Separation Agreement also provided, in pertinent part, that “Each party irrevocably waives surrenders and renounces any and all rights of election under the present or future laws of any jurisdiction regarding the estate of the other ….”

Judge Teresi said that “A named beneficiary to a Retirement System death benefit cannot waive her [or his] rights thereto, unless the waiver is ‘explicit, voluntary and made in good faith.’” An agreement satisfying the “tripartite test may effectuate such waiver.”

The court ruled that the waiver contained in the separation agreement met the required tripartite test. Judge Teresi said that:

1. It is undisputed by the parties that the Separation Agreement was entered voluntarily and in good faith.

2. The Mutual Release portion of the Separation Agreement is a sufficiently "explicit" waiver.

3. Eva waived "relinquishe[d], renounce[d] and release[d] all interest [in]... testamentary substitutes made by [Gary]."

Finding that Gary’s Retirement System beneficiary designation is a "testamentary substitute," Judge Teresi ruled that Eva had explicitly waived her right to it.

The court directed the Retirement System “to correct [Gary’s] Retirement System beneficiary designation … pursuant to Retirement and Social Security Law §803-a to reflect such waiver” and to pay 50% of Gary’s Retirement System death benefit to the Estate of Gary Rice.

§803-a of the Retirement and Social Security Law authorizes the correction of “benefit errors” pursuant to a settlement agreement or court order arising out of a matrimonial or custody action

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/pdfs/2009/2009_32573.pdf

Attorney-Client privilege and e-mail communications

Attorney-Client privilege and e-mail communications
Source: Corporate Counsel e-magazine - November 11, 2009

Corporate Counsel Magazine’s “On-line” edition reports that New York Law Journal has published an article addressing the question of claiming attorney-client privilege for e-mails transmitted to lawyers using employer-provided e-mail and computers.

On the question of the impact of the State’s Freedom of Information Law when an attorney-client privileged is claimed, in advisory opinion FOIL-AO-16526, Assistant Director Camille S. Jobin-Davis, on behalf of the Committee on Open Government, commented that:

“For more than a century, the courts have found that legal advice given by a municipal attorney to his or her clients, municipal officials, is privileged when it is prepared in conjunction with an attorney-client relationship [see e.g., People ex rel. Updyke v. Gilon, 9 NYS 243, 244 (1889); Pennock v. Lane, 231 NYS 2d 897, 898, (1962); Bernkrant v. City Rent and Rehabilitation Administration, 242 NYS 2d 752 (1963), aff'd 17 App. Div. 2d 392]. As such, we believe that a municipal attorney may engage in a privileged relationship with his or her client and that records prepared in conjunction with an attorney-client relationship may be considered privileged under §4503 of the Civil Practice Law and Rules. Further, since the enactment of the Freedom of Information Law, it has been found that records may be withheld when the privilege can appropriately be asserted when the attorney-client privilege is read in conjunction with §87(2)(a) of the Law [see e.g., Mid-Boro Medical Group v. New York City Department of Finance, Sup. Ct., Bronx Cty., NYLJ, December 7, 1979; Steele v. NYS Department of Health, 464 NY 2d 925 (1983)]. Similarly, the work product of an attorney may be confidential under §3101 of the Civil Practice Law and Rules.”

Presumably where such legal advice transmitted by e-mail, the e-mail is privileged.

The New York Law Journal article is posted on the Internet at: http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202435191463&AttorneyClient_Privilege_in_Work_EMails=&src=EMC-Email&et=editorial&bu=Corporate%20Counsel&pt=Corporate%20Counsel%20Daily%20Alerts&cn=cc20091110&kw=Attorney-Client%20Privilege%20in%20Work%20E-Mails

Supplementing a disability retirement allowance

Supplementing a disability retirement allowance
Farber v City of Utica, Court of Appeals, 97 N.Y.2d 476 [see also 1 A.D.3d 942, Aff’d 28 A.D.3d 1198]

Arthur T. Farber, a former City of Utica firefighter, was involuntarily retired after he was disabled in the line of duty. As a result, he was receiving:

1, A "disability pension" pursuant to Section 363-a of the Retirement and Social Security Law [RSSL]:

2. The difference between his RSSL disability pension and the salary of active firefighters paid by the City of Utica pursuant to Section 207-a of the General Municipal Law; and

3. A "cost of living" [COLA] supplemental retirement payments from the retirement system.

Following the passage of legislation providing for a third COLA adjustment [Chapter 390 of the Laws of 1998] Utica reduced the amount it was paying Farber pursuant to Section 207-a by the amount he was receiving as a COLA and attempted to recoup the "overpayments" it had made to him in previous years.

The City's theory: The COLA was part of Farber's State disability pension and therefore its Section 207-a supplements were to be reduced by an amount equal to the COLA payments he was receiving from the retirement system.

A State Supreme Court judge decided that the City could not reduce its Section 207-a supplemental payments to reflect these COLA adjustments and the Appellate Division, Fourth Department agreed. The Court of Appeals, however, reversed the lower courts' rulings.

Tracing the relevant history of Section 207-a, the court said:

In 1977, the Legislature amended General Municipal Law Section 207-a, effecting dramatic changes in the statutory framework governing firefighters' disability and pension payments (Laws of 1977, Chapter 965). As a result of the amendments, local and municipal pensions were discontinued and firefighters mandatorily enrolled in the State pension system. The amendment sought to "substantially reduce the financial burden of municipalities with respect to payments to disabled fire[fighters] and ... allow funds presently used for such payments to be used to hire able fire[fighters] and thereby increase the level of fire protection."

The 1977 amendment, said the Court of Appeals, only partially relieved municipalities of their burden. The municipality's "statutory obligation guarantees the disabled firefighter the `full amount of [his or her] regular salary or wages.'"

Accordingly, said the Court of Appeals, Utica "is liable only for "the difference between the amounts received under such allowance or pension and the amount of his [or her] regular salary or wages."

The basic question resolved by the Court of Appeal:

Does the phrase "amounts received" by the pensioner relative to a retiree's "allowances or pensions" include a "supplemental allowance" to the base pension provided by the retirement system?

The court said "[s]ignificantly, these supplemental [COLA] allowances are not independent pensions. Instead, the supplements are wholly contingent upon payment of a base pension amount and computed accordingly.”

The court's conclusion: the phrase "amounts received" in GML Section 207-a includes, and expressly refers to the RSSL Section 378 cost of living adjustment to State retirement system pensioners. Further, said the court, "not permitting the [municipality] to deduct the supplemental allowance would mean that a disabled firefighter's benefits might exceed an active firefighter's salary -- a result contrary to underlying legislative intent."

Accordingly, the Court of Appeals ruled that Utica "may take into account the Section 378 supplemental allowance, as a portion of the retired disabled firefighter's total "amounts received," in calculating its obligation under General Municipal Law Section 207-a."

In a footnote to its opinion, the Court of Appeals commented that "[e]ffective July 11, 2000, the Legislature enacted an automatic cost of living adjustment" and that "Retirement and Social Security Law Section 378-a applies to "all disability pensioners regardless of age who have been retired for five years." Section 378-a was considered in a similar case, Wise v Jennings, 736 NYS2d 171, decided by the Appellate Division, Third Department, January 10, 2002.

In Wise the Third Department ruled that a municipality could reduce its Section 207-a supplement in consideration of COLA payments made by the retirement system. The Court of Appeals rejected Wise's appeal from the Third Department's ruling.

Significantly, Section 207-c of the General Municipal Law, which applies to law enforcement personnel injured in the line of duty, does not provide for any “salary supplement” to the retirement allowance being received by anyone subject to its provisions.