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PETITIONER, THE PRESIDENT AND MAJORITY STOCK HOLDER OF A CONSTRUCTION COMPANY, WAS THE “PERSON RESPONSIBLE” FOR COLLECTING AND PAYING EMPLOYEE WITHHOLDING TAXES; TWO-JUDGE DISSENT (CT APP). ​

The Court of Appeals, in a full-fledged opinion by Judge Cannataro, over a two-judge dissent, affirming the New York State Tax Tribunal and the Appellate Division, determined petitioner, the president and majority shareholder of a construction company, was the person responsible for the collection and payment of employee withholding taxes:

… [P]etitioner and the dissenters argue that the Tribunal employed an incorrect legal test in making its determination, under Tax Law § 685 (g), that petitioner was a person responsible for the collection and payment of employee withholding taxes on behalf of New England Construction Company, Inc. (NECC), a corporation of which petitioner was president and the majority shareholder, and on behalf of which petitioner had repeatedly held himself out as being responsible for payment of taxes. We conclude that the Tribunal committed no such error. Rather, in resolving the question before it, the Tribunal properly considered whether petitioner had the actual authority and effective power to pay the withholding taxes and, thus, was a “responsible person” under section 685. Moreover, substantial evidence supports the Tribunal’s determination that petitioner willfully failed to pay the withholding taxes. * * *

Under Tax Law § 685 (g), a person may be held liable for the withholding taxes of a corporation if the person is “required to collect, truthfully account for, and pay over the tax imposed” and “willfully fails to collect such tax or . . . willfully attempts in any manner to evade or defeat the tax or the payment thereof.” … [S]ection 685 (g) essentially provides that “a person responsible for collecting and paying taxes withheld from employees’ wages is liable for a 100% civil penalty if [that person] willfully fails to collect and pay over the tax” … . Such a responsible person includes “an officer or employee of a corporation . . . who . . . is under a duty to perform the act in respect of which the violation occurs” … . Under the broad terms of this definition, more than one person can be a responsible person under Tax Law § 685 … . Because section 685 (g) was modeled after 26 USC § 6672 (a) … , the terms in the former are to be interpreted in conformity with the latter unless a different meaning is clearly required … . Matter of Black v New York State Tax Appeals Trib., 2023 NY Slip Op 05961, CtApp, 11-20-23

Practice Point: Tax Law 685 makes the “person responsible” for the collection and payment of employee withholding taxes civilly liable for failure to pay the tax.

 

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THE LOCAL LAW CREATING THE POLICE ACCOUNTABILITY BOARD (PAB) WITH THE POWER TO DISCIPLINE POLICE OFFICERS CONFLICTED WITH THE POLICE UNION’S COLLECTIVE BARGAINING AGREEMENT (CBA); BECAUSE THE UNION NEVER AGREED TO THE TRANSFER OF DISCIPLINARY POWERS TO THE PAB, THE LOCAL LAW WAS INVALID (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Egan, affirming the Appellate Division, over a three-judge dissent, determined the Local Law creating a Police Accountability Board (PAB) with the power to discipline police officers was invalid because the law conflicted with the union’s (the Locust Club’s)  collective bargaining agreement (CBA) and the union had never agreed to the change:

Since the 1980s, the collective bargaining agreement (hereinafter CBA) in place between the City of Rochester and the Rochester Police Locust Club, Inc. (hereinafter the Locust Club), the union representing police officers in the City, has governed the procedure for disciplining police officers. In 2019, the Council of the City of Rochester adopted, the Mayor of the City of Rochester signed, and voters approved via referendum, Local Law No. 2, which created the Police Accountability Board (hereinafter PAB), a body of nine City residents whose powers included the exclusive authority to “investigate and make determinations respecting” any police officer accused of misconduct. That authority included the power to conduct a hearing on the alleged misconduct and to impose disciplinary sanctions, up to and including dismissal, if the officer were found guilty. The City’s police chief was free to impose additional punishment upon that officer, but was obliged at a minimum to implement the sanction determined by the PAB.

There is no dispute that the disciplinary procedures set forth in Local Law No. 2 deviated in significant respects from the agreed-upon procedures set forth in the CBA then in effect and that they were not agreed to by the Locust Club. The Locust Club and others commenced this combined CPLR article 78 proceeding and declaratory judgment action to challenge Local Law No. 2 and, in particular, its transfer of police disciplinary authority to the PAB. Supreme Court ultimately granted the petition in part and held, among other things, that Local Law No. 2 was invalid to the extent that it transferred that authority. Upon the City Council’s appeal, the Appellate Division affirmed … . The Appellate Division held that the City was obliged to negotiate with the Locust Club on the issue of police discipline because in 1985 it had repealed the provision of its charter vesting a local official in charge of the police force with unilateral authority over police discipline and that the City’s effort to revive that authority in Local Law No. 2 necessarily failed under the Municipal Home Rule Law because it was inconsistent with a general law, namely, “the Taylor Law’s mandate of collective bargaining for police discipline” … .  Matter of Rochester Police Locust Club, Inc. v City of Rochester, 2023 NY Slip Op 05959, CtApp 11-21-23

Practice Point: The Local Law creating the Police Accountability Board (PAB) and granting the PAB the power to discipline police officers conflicted with disciplinary provisions in the police union’s collective bargaining agreement (CBA). Because the union never agreed to the transfer of disciplinary powers to the PAB, the Local Law was deemed invalid.

 

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PETITIONER FIREFIGHTER WAS INJURED WHEN HE BECAME DEHYDRATED DURING TRAINING; HE WAS NOT ENTITLED TO ACCIDENTAL DISABILITY RETIREMENT BENEFITS BECAUSE THE INJURY DID NOT OCCUR AS A RESULT OF AN UNEXPECTED EVENT (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined petitioner NYC firefighter was not entitled to accidental retirement (ADR) benefits because he was injured performing routine duties and not when responding to an unexpected event. Petitioner suffered an injury to his leg due to dehydration during training:

ADR benefits are awardable only where the individual’s disability was the natural and proximate result of a service-related accident, i.e., “a ‘sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact'” … . Petitioner’s injury was the result of an incidental — not accidental — event … because the injury was sustained while petitioner was performing routine duties, not as a result of an unexpected event … . Dehydration suffered by petitioner while running in hot weather in heavy gear was a foreseeable risk of the firefighting training exercise … . Matter of Rivera v Board of Trustees of N.Y. Fire Dept., 2023 NY Slip Op 05379, First Dept 10-24-23

Practice Point: Here a NYC firefighter was injured during training, not as a result of an “unexpected event.” Therefore he was not entitled to accidental disability retirement benefits.

 

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PLAINTIFF’S EMPLOYER, VERIZON, THREATENED LEGAL ACTION BASED UPON A NON-COMPETE AGREEMENT SIGNED BY PLAINTIFF IF PLAINTIFF RESIGNED TO WORK FOR WARNERMEDIA; PLAINTIFF’S TORTIOUS-INTERFERENCE-WITH-PROSPECTIVE-BUSINESS-RELATIONS CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant-employer (Verizon) was entitled to summary judgment dismissing the tortious-interference-with-prospective-business-relations cause of action. Plaintiff signed a non-compete agreement. When Verizon learned of plaintiff’s plan to resign and work for WarnerMedia Verizon warned plaintiff that resigning would lead to legal action:

Although plaintiff contends that Verizon wrongfully threatened litigation against him to enforce the noncompete provision, the “wrongful means” element of the cause of action is satisfied only where the threatened lawsuit is frivolous … . In light of the above facts, and considering that Verizon has successfully enforced a similar noncompete provision in the past … , there was an objectively reasonable basis to believe that the provision in its agreement with plaintiff was enforceable. …

Furthermore, the record does not support plaintiff’s argument that Verizon took its legal position solely out of a personal dislike for plaintiff, or solely by a desire to harm him … . On the contrary, the record shows that Verizon’s actions were motivated by economic self-interest … . Lucas v Verizon Communications, Inc., 2023 NY Slip Op 05190, First Dept 10-12-23

Practice Point: In order to support a tortious-interference-with-prospective-business-relations cause of action plaintiff must prove the employer’s threatened action was “wrongful” and was motivated solely by a desire to harm plaintiff. Here the employer threatened only to take legal action to enforce a non-compete agreement. The tortious-interference cause of action should have been dismissed.

 

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DISMISSAL OF THE HOSTILE WORK ENVIRONMENT CAUSES OF ACTION IN FEDERAL COURT DID NOT COLLATERALLY ESTOP PLAINTIFF’S HOSTILE WORK ENVIRONMENT CAUSE OF ACTION IN STATE COURT PURSUANT TO THE NEW YORK CITY HUMAN RIGHTS LAW (NYCHRL) (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the dismissal of the hostile work environment causes of action by the federal court did not collaterally estop plaintiff’s hostile work environment cause of action in state court pursuant to the New York City Human Rights Law (NYCHRL):

Supreme Court erred in granting dismissal of the cause of action alleging hostile work environment pursuant to CPLR 3211(a)(5). The District Court analyzed the hostile work environment claims under the standards set by Title VII and NYSHRL, and determined that those claims were neither “pervasive” nor “extraordinarily severe.” Under NYCHRL, a claimant must only prove that they were “treated less well than other employees” because of their gender … . As the plaintiff’s allegations of sexual harassment and improper touching could constitute “more than petty slights and trivial inconveniences” without rising to the level of being severe and pervasive, Supreme Court should not have granted dismissal of this cause of action pursuant to the doctrine of collateral estoppel … . Domingo v Avis Budget Group, Inc., 2023 NY Slip Op 04463, Second Dept 8-30-23

Practice Point: The New York City Human Rights Law has less stringent standards for a hostile work environment cause of action than those required by the New York State Human Rights Law.

 

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PLAINTIFF WAS NOT HIRED BECAUSE HE TESTED POSITIVE FOR MARIJUANA WHEN HE WAS UNDER TREATMENT WITH MARIJUANA; THAT STATED A CAUSE OF ACTION FOR EMPLOYMENT DISCRIMINATION (SECOND DEPT). ​

The Second Department determined that refusing to hire plaintiff for testing positive for marijuana when he was being treated with marijuana stated a cause of action for employment discrimination:

We find unavailing the defendant’s contention that the complaint failed to state a cause of action to recover damages for employment discrimination on the basis of disability in violation of the NYCHRL [New York City Human Rights Law] because the defendant chose not to hire the plaintiff based only on his positive drug test and not his disability. Refusing to hire the plaintiff because he tested positive for marijuana while knowing that he was being treated with marijuana by a licensed physician for a medical condition effectively denied the plaintiff the opportunity of a reasonable accommodation, and therefore, under these circumstances, is appropriately recognized as a cognizable cause of action to recover damages for employment discrimination on the basis of disability in violation of the NYCHRL … . Brouillard v Sunrun, Inc., 2023 NY Slip Op 04184, Second Dept 8-9-23

Practice Point: Refusing to hire plaintiff for testing positive for marijuana when plaintiff was under a doctor’s treatment with marijuana stated a cause of action for denying the plaintiff the opportunity of a reasonable accommodation.

 

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LYFT WAS NOT VICARIOUSLY LIABLE FOR THE ALLEGED SEXUAL ASSAULT BY A LYFT DRIVER; THE COMPLAINT DID NOT STATE A CAUSE OF ACTION FOR FRAUD BASED UPON THE ASSURANCES OF SAFETY ON LYFT’S WEBSITE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the vicarious liability and fraud causes of action against defendant Lyft, a livery cab service, should have been dismissed. The complaint alleged infant plaintiff used a mobile app to hire a Lyft driver, Singh, who began masturbating after she got in the car. The complaint failed to allege the driver was acting within the scope of his employment when the alleged sexual assault occurred. The complaint also failed to allege the elements of fraud based on the claim on the Lyft website that its service was safe and the drivers had been screened:

“[W]here an employee’s actions are taken for wholly personal reasons, which are not job related, the challenged conduct cannot be said to fall within the scope of employment” … . “A sexual assault perpetrated by an employee is not in furtherance of an employer’s business and is a clear departure from the scope of employment, having been committed for wholly personal motives” … . Here, assuming that Singh engaged in the sexual misconduct as alleged in the complaint, it is clear that such conduct was a departure from his duties as a Lyft driver and was committed solely for personal motives unrelated to Lyft’s business. As such, the sexual misconduct cannot be said to have been within the scope of employment … . Accordingly, the Supreme Court should have granted that branch of Lyft’s motion which was to dismiss the cause of action alleging vicarious liability under the doctrine of respondeat superior. …

“The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages” … . “Each of the foregoing elements must be supported by factual allegations containing the details constituting the wrong sufficient to satisfy CPLR 3016(b)” … . “To establish causation, the plaintiff must show that defendant’s misrepresentation induced plaintiff to engage in the transaction in question (transaction causation) and that the misrepresentations directly caused the loss about which plaintiff complains (loss causation)” … .

Here, although the complaint alleges that the plaintiffs were aware of alleged representations on Lyft’s website that the Lyft service was safe to use, it fails to sufficiently specify which statements on Lyft’s website were false, and when those representations were made or accessed by the plaintiffs … . Moreover, the complaint fails to set forth any facts sufficient to show that any alleged misrepresentations on Lyft’s website regarding the safety of Lyft rides directly and proximately caused the plaintiffs’ alleged damages, which were otherwise alleged to have been caused directly by Singh’s sexual misconduct while operating the vehicle … . It is not sufficient to merely allege that the infant plaintiff would not have used the Lyft app but for Lyft’s alleged misrepresentations regarding safety … . Browne v Lyft, Inc., 2023 NY Slip Op 04102, Second Dept 8-2-23

Practice Point: In a complaint alleging the employer is vicariously liable for the acts of its employee, unless it is alleged the employee was acting within the scope of employment the cause of action will be dismissed. Here the alleged sexual assault by defendant Lyft driver was not alleged to be within the scope of the driver’s employment.

Practice Point: Here the plaintiff alleged she was sexually assaulted by defendant Lyft driver. The fraud cause of action alleged the assertions on Lyft’s website that the service was safe and the drivers were screened were false. That was not enough to state a cause of action for fraud.

 

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ALTHOUGH PETITIONER’S USING HIS CELL PHONE WHILE ON DUTY TO SEND EXPLICIT MESSAGES VIOLATED THE EMPLOYEE’S MANUAL AND WARRANTED PUNISHMENT, TERMINATION WAS TOO SEVERE A PENALTY (THIRD DEPT).

The Third Department, modifying Supreme Court, over a dissent, determined that petitioner, a civil service employee, was properly found to have violated the Employee’s Manual by using his cell phone while on duty to send explicit messages. However, termination was deemed too severe a penalty and the matter was remitted. The dissent argued termination was proper:

“Judicial review of an administrative penalty is limited to whether, in light of all the relevant circumstances, the penalty is so disproportionate to the charged offenses as to shock one’s sense of fairness” … . Petitioner was employed by respondent for 21 years at the time of the hearing and had a generally unremarkable disciplinary history….  Further, there is no indication that the messages were disseminated to any of his colleagues or subordinates or that there was a significant impact on the performance of his duties. To the contrary, the record establishes that petitioner consistently received strong evaluations for his work performance. Further, the record establishes that petitioner expressed remorse to respondent’s investigators, noting that he was not proud of his conduct, which he characterized as “unprofessional and even inappropriate.” Under these circumstances, we find that the penalty of termination “is so disproportionate to the offense and shockingly unfair as to constitute an abuse of discretion as a matter of law” and, accordingly, we remit the matter for consideration of a less severe penalty … . Matter of Brooks v New York State Dept. of Corr. & Community Supervision, 2023 NY Slip Op 03962, Third Dept 7-27-23

Practice Point: A civil service employee’s violation of general provisions of the Employee’s Manual, here the employee’s use of his cell phone to send explicit messages while on duty, warranted punishment . But termination was deemed too severe.

 

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THE PLAINTIFF, A MALE EMT, ALLEGED HE WAS TERMINATED BECAUSE OF HIS INVOLVEMENT IN A TRAFFIC ACCIDENT AND SEVERAL FEMALE EMT’S WERE INVOLVED IN COMPARABLE ACCIDENTS BUT WERE NOT TERMINATED; PLAINTIFF STATED A CAUSE OF ACTION FOR SEX DISCRIMINATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff emergency medical technician (EMT) stated a cause of action for sex discrimination. Plaintiff alleged he was terminated because he was involved in a traffic accident but several female EMT’s were involved in comparable accidents but were not terminated:

The NYSHRL [state human rights law] and the NYCHRL [city human rights law], prohibit discrimination in employment on the basis of sex … . “A plaintiff alleging discrimination in employment in violation of the NYSHRL must establish that (1) she or he is a member of a protected class, (2) she or he was qualified to hold the position, (3) she or he suffered an adverse employment action, and (4) the adverse action occurred under circumstances giving rise to an inference of discrimination” … . “Under the NYCHRL, the plaintiff must establish that she or he was subject to an unfavorable employment change or treated less well than other employees on the basis of a protected characteristic” … . Here, accepting the facts as alleged in the complaint as true, and according the plaintiff the benefit of every possible favorable inference, the complaint sufficiently alleges circumstances which give rise to an inference of sex discrimination, and adequately states a cause of action pursuant to the NYCHRL and the NYSHRL … . Silvers v Jamaica Hosp., 2023 NY Slip Op 03938, Second Dept 7-26-23

Practice Point: Here a male employee alleged he was terminated because he was involved in a traffic accident and several female employees were involved in comparable accidents but were not terminated. That allegation stated a cause of action for sex discrimination. 

 

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THE NEGLIGENCE AND NEGLIGENT SUPERVISION AND HIRING CAUSES OF ACTION AGAINST THE WARREN COUNTY DEFENDANTS IN THIS CHILD VICTIMS ACT CASE ALLEGING ABUSE IN FOSTER CARE SHOULD HAVE BEEN DISMISSED; THE COMPLAINT DID NOT ADEQUATELY ALLEGE THE WARREN COUNTY DEFENDANTS WERE AWARE OF THE DANGER POSED BY PLAINTIFF’S FOSTER FATHER (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, determined the negligence and negligent supervision causes of action against the Warren County defendants in this Child Victims Act case should have been dismissed. The complaint did not adequately allege the Warren County defendants were aware of the danger posed by plaintiff’s foster father:

… [W]e agree with the Warren County defendants that Supreme Court should have dismissed the negligence and negligent hiring, retention, supervision and/or direction causes of action as they relate to the conduct in Warren County. The complaint alleged that, in approximately 1979, plaintiff was placed in a foster home in Warren County, where he was sexually abused by his foster father on numerous occasions. Although we are cognizant that pleadings alleging negligent hiring, retention and supervision need not be pleaded with specificity … , the complaint merely asserts that the Warren County defendants “knew or, in the exercise of reasonable care, should have known” that the foster father “had the propensity to engage in sexual abuse of children.” Unlike in the counties of Albany and Cayuga — where plaintiff alleges that he reported the sexual abuse, thereby providing the municipal defendants with notice of the dangerous condition — the complaint fails to assert any allegations of fact that would have provided the Warren County defendants with notice that the foster father presented a foreseeable harm. Because plaintiff failed to sufficiently plead that the Warren County defendants were provided notice of a dangerous condition present in the Warren County foster home, that claim could not survive a pre-answer motion to dismiss pursuant to CPLR 3211 (a) (7) … , and Supreme Court should have dismissed those claims against the Warren County defendants. Easterbrooks v Schenectady County, 2023 NY Slip Op 03889, Third Dept 7-20-23

Practice Point: In order to adequately plead a county was negligent in placing plaintiff in a foster-care situation where plaintiff was abused, the complaint must allege facts demonstrating the county was aware of the danger posed by the foster parent.

 

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