Employment Law – Page 14 – New York Appellate Digest

THE EMPLOYEE RESTRICTIVE COVENANTS (NONSOLICITATION AGREEMENTS) WERE PROPERLY ENFORCED; NINE OF DEFENDANT INSURANCE COMPANY’S CUSTOMERS FOLLOWED PLAINITFFS AFTER THEIR TERMIINATION; TWO-JUSTICE DISSENT (THIRD DEPT).

The Third Department, over a two-justice partial dissent, determined the defendant insurance company’s motion for summary judgment enforcing the nonsolicitation agreements were properly granted. Nine of defendant’s former customers followed plaintiffs after their termination from defendant’s employ:

… “[T]he application of the test of reasonableness of employee restrictive covenants focuses on the particular facts and circumstances giving context to the agreement” … . While such agreements are generally not favored, they can be “justified by the employer’s need to protect itself from unfair competition by former employees” … . “The employer has a legitimate interest in preventing former employees from exploiting or appropriating the goodwill of a client or customer, which had been created and maintained at the employer’s expense, to the employer’s competitive detriment” … . Here, when plaintiffs joined defendant’s insurance agency, neither had any prior experience in the insurance field, they were not licensed agents, nor did they have any clients or books of business of their own. As to the clients in question here, they were solicited, developed and serviced by defendant. As such, the accounts and clients are the product of defendant’s efforts, financial expenditures and goodwill, all of which defendant has a legitimate interest in protecting. Davis v Marshall & Sterling, Inc., 2023 NY Slip Op 03050, Third Dept 6-8-23

Practice Point: Here nine of the employer’s customers followed plaintiffs after their termination. Supreme Court properly enforced the nonsolicitation agreements. There was a two-justice dissent.

June 8, 2023

Arbitration, Education-School Law, Employment Law

A COURT MUST ACCEPT AN ARBITRATOR’S INTERPRETATION OF CONFLICTING EVIDENCE; BUT THE TERMINATION OF THE TEACHER, WHO HAD AN UNBLEMISHED RECORD, FOR INAPPROPRIATELY RESTRAINING A FEMALE STUDENT, SHOCKED ONE’S SENSE OF FAIRNESS (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the arbitrator’s interpretation of conflicting evidence must be accepted, but termination of the teacher based on the evidence was not warranted. It was alleged the petitioner-teacher inappropriately restrained a female student who was trying to get past him:

“Where, as here, the obligation to arbitrate arises through a statutory mandate (see Education Law § 3020-a), the determination of the arbitrator is subject to ‘closer judicial scrutiny’ under CPLR 7511(b) than it would otherwise receive” … . “An award in a compulsory arbitration proceeding must have evidentiary support and cannot be arbitrary and capricious” … .

Here, there was a rational basis and evidentiary support for the finding that the petitioner committed the conduct with which he was charged by inappropriately restraining a female student who was trying to get past him. Although a video of the incident, which was admitted into evidence at the hearing, could be interpreted in more than one way, this Court must “accept the arbitrator’s credibility determinations, even where there is conflicting evidence and room for choice exists” … .

However, in light of the petitioner’s otherwise unblemished record of approximately 19 years as a teacher with the respondent, the penalty of termination of employment was so disproportionate to the offense as to be shocking to one’s sense of fairness … . Matter of O’Brien v Yonkers City Sch. Dist., 2023 NY Slip Op 03011, Second Dept 6-7-23

Practice Point: In this arbitration pursuant to the Education Law, the court was required to accept the arbitrator’s interpretation of conflicting evidence. But termination of the teacher for inappropriately restraining a female student who was trying to get past him shocked one’s sense of fairness.

June 7, 2023

Contract Law, Employment Law, Municipal Law

“EXEMPT EMPLOYEES” UNDER THE CIVIL SERVICE LAW ARE TERMINABLE AT WILL; A COLLECTIVE BARGAINING AGREEMENT WHICH PURPORTS TO MAKE AN EXEMPT EMPLOYEE TERMINABLE FOR CAUSE IS UNENFORCEABLE (CT APP).

The Court of Appeals, reversing the appellate division, in a full-fledged opinion by Judge Garcia, determined a so-called “exempt employee (here the secretary to the town planning board) whose qualifications cannot be tested by a Civil Service examination is terminable at will. The collective bargaining agreement (CBA) defined the bargaining unit to include the secretary and permitted the town to terminate only for “just cause.” When the secretary was fired the union filed a grievance and sought arbitration. The Court of Appeals held the secretary. as an “exempt employee” was terminable at will and arbitration was therefore not available:

Certain civil service positions are classified as “exempt” when the position is of a confidential nature and requires personal qualities that cannot practicably be tested by an examination. Exempt class employees are therefore terminable at will. In this case, the parties entered into a collective bargaining agreement that purports to provide for-cause termination protection to certain exempt class employees. We hold the agreement unenforceable to the extent it grants such protections, and therefore this dispute over an exempt class employee’s termination is not arbitrable. Matter of Teamsters Local 445 v Town of Monroe, 2023 NY Slip Op 02754, CtApp 5-23-23

Practice Point: A so-called “exempt employee” under the Civil Service Law is one whose skills cannot be tested by a Civil Service exam. Exempt employees are terminable at will. A collective bargaining agreement which purports to make exempt employees terminable for cause is unenforceable.

May 23, 2023

Employment Law, Municipal Law, Retirement and Social Security Law

TIER 3 NYC POLICE OFFICERS CANNOT COUNT YEARS OF NON-POLICE SERVICE TOWARD THE 22 YEARS OF POLICE SERVICE REQUIRED FOR RETIREMENT ELIGIBILITY (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, reversing the appellate division, determined tier 3 police officers may not count prior “non-police” service in computing the 22 years of service required for eligibility for retirement benefits:

… [T]ier 3 officers are eligible for retirement after 22 years of service without regard to their age … . The issue before us is whether a tier 3 police officer’s prior non-police service “qualifies to be counted as credited service pursuant to [Retirement and Social Security Law § 513]” … .

… [W]e conclude that the legislature intended tier 3 officers to receive the same service credit as their tier 2 counterparts, but restricted to the credit available prior to July 1, 1976.

Before July 1, 1976, the Administrative Code provided that a tier 2 officer would not be eligible for retirement until he or she “served in the police force for” the then-minimum period of 20 or 25 years … . This language plainly demonstrates that, prior to July 1, 1976, tier 2 officers could count only prior police service toward their retirement eligibility. Accordingly, tier 3 officers may receive retirement credit only for prior police service. Matter of Lynch v City of New York, 2023 NY Slip Op 02753, CtApp 5-23-23

Practice Point: Tier 3 NYC police officers cannot count years of non-police service toward retirement eligibility.

May 23, 2023

Battery, Employment Law, Workers' Compensation

THE PERSON WHO ASSAULTED PLAINTIFF WAS THE OWNER OF THE LAW FIRM PLAINTIFF WORKED FOR; PLAINTIFF COULD RECOVER WORKERS’ COMPENSATION BENEFITS FROM THE LAW FIRM AND DAMAGES FOR ASSAULT AND BATTERY FROM THE OWNER, WHO WAS A COEMPLOYEE (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined plaintiff could recover for assault and battery against a coemployee (Levoritz) even though plaintiff had been awarded Workers’ Compensation benefits from his employer for the same assault and battery. Plaintiff was employed by defendant law firm at the time of the alleged assault and battery and the law firm was owned by Levortiz:

The Supreme Court, however, erred in granting Levoritz’s motion for summary judgment dismissing the complaint insofar as asserted against him. Contrary to Levoritz’s contention, Workers’ Compensation Law § 29 does not bar an employee who has accepted workers’ compensation benefits from suing a coemployee who has committed an intentional assault against him or her … . Additionally, Levoritz failed to establish, prima facie, that he was acting within the scope of his employment at the time of the incident, and was not engaged in a willful or intentional tort … .

The Supreme Court should have granted that branch of the plaintiff’s cross-motion which was for summary judgment on the issue of liability on the cause of action to recover damages for assault and battery insofar as asserted against Levoritz. The plaintiff established his prima facie entitlement to judgment as a matter of law on the issue of liability on the cause of action to recover damages for assault and battery by showing, through the submission of his affidavit, that there was bodily contact, that the contact was offensive, that Levoritz intended to make the contact without the plaintiff’s consent, and that Levoritz placed the plaintiff in “imminent apprehension of harmful contact” … . In opposition, Levoritz failed to raise a triable issue of fact. Tarasiuk v Levoritz, 2023 NY Slip Op 02698, Second Dept 5-17-23

Practice Point: Here the person who assaulted plaintiff was the owner of the law firm plaintiff worked for. Plaintiff could recover Workers’ Compensation benefits from the law firm and damages from the owner of the firm, who was plaintiff’s coemployee.

May 17, 2023

Civil Procedure, Employment Law, Human Rights Law, Municipal Law

THE HOSTILE WORK ENVIRONMENT AND SEX DISCRIMINATION CLAIMS WERE NOT UNTIMELY BECAUSE A CONTINUING COURSE OF CONDUCT LEADING UP TO THE FILING OF THE COMPLAINT WAS ALLEGED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined plaintiff’s hostile work environment and sex discrimination claims should not have been dismissed as untimely because a continuing pattern was sufficiently alleged:

The allegations supporting plaintiff’s hostile work environment and sex discrimination claims are timely, as she has sufficiently alleged facts comprising “a single continuing pattern of unlawful conduct extending into the [limitations] period immediately preceding the filing of the complaint” … . The complaint alleges that, following Corn’s sexual assault on plaintiff in February 2015, he continued to stare at her, lurked by her desk, made inappropriate, flirtatious comments toward her, disclosed intimate details about his marriage, and frequently pressured her to go out drinking, within the limitations period. It cannot be said that, as a matter of law, these acts were not part of a single continuing pattern of unlawful conduct supporting her hostile work environment and discrimination claims … .

Moreover, under the New York City Human Rights Law (Administrative Code of City of NY § 8-107) and amended New York State Human Rights Law (Executive Law § 296[h]), the allegations that Corn sexually assaulted plaintiff in 2015 and engaged in a pattern of gender-based misconduct in the workplace, demonstrate that she was subjected to inferior terms, conditions, or privileges of employment on the basis of her gender … . Crawford v American Broadcasting Co., Inc., 2023 NY Slip Op 02611, First Dept 5-16-23

Practice Point: Here the hostile work environment and sex discrimination claims should not have been dismissed as untimely because a continuing course of conduct up until the filing of the complaint was alleged.

May 16, 2023

Corporation Law, Employment Law, Negligence

THE FRANCHISOR, TOYOTA, DID NOT EXERCISE CONTROL OVER THE FRANCHISEE’S, PLAZA TOYOTA’S, DAILY OPERATIONS; THEREFORE TOYOTA COULD NOT BE HELD VICARIOUSLY LIABLE FOR PLAZA TOYOTA’S NEGLIGENCE; HERE A WHEEL FELL OFF PLAINTIFF’S CAR AFTER IT WAS SERVICED AT PLAZA TOYOTA (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the complaint against the franchisor, here Toyota, for the negligence of the franchisee car dealership, Plaza Toyota, should have been dismissed. After the plaintiff’s car was worked on at Plaza Toyota, a front wheel fell off:

Supreme Court erred in denying the Toyota defendants’ cross-motion for summary judgment dismissing the complaint and all cross-claims insofar as asserted against them. “In determining whether a defendant, as a franchisor, may be held vicariously liable for the acts of its franchisee, the most significant factor is the degree of control that the franchisor maintains over the daily operations of the franchisee or, more specifically, the manner of performing the very work in the course of which the accident occurred” … .

Here, affidavits submitted by the Toyota defendants in support of their motion established, prima facie, that they lacked the requisite control over the manner in which Plaza Toyota serviced vehicles … . Caceres v Toyota Motor N. Am., Inc., 2023 NY Slip Op 02492, Second Dept 5-10-23

Practice Point: A franchisor can be held vicariously liable for the negligence of a franchisee only if the franchisor exercises control over the franchisee’s daily operations, not the case here.

May 10, 2023

Contract Law, Employment Law, Negligence, Workers' Compensation

DEFENDANT COULD NOT SEEK INDEMNIFICATION FOR PLAINTIFF’S DAMAGES FROM THIRD-PARTY DEFENDANT BECAUSE PLAINTIFF WAS THE THIRD-PARTY DEFENDANT’S SPECIAL EMPLOYEE FOR WHOM WORKERS’ COMPENSATION WAS THE EXCLUSIVE REMEDY (FIRST DEPT).

The First Department, reversing (modifying) Supreme Count, determined the defendant, TIA, could not seek indemnification for plaintiff’s damages from third-party defendant, Freeman, because plaintiff was Freeman’s special employee for whom Workers’ Compensation is the exclusive remedy:

Supreme Court should have dismissed TIA’s common-law indemnification and contribution claims on the ground that plaintiff was Freeman’s special employee when his accident occurred and therefore, the claims are precluded by the Workers’ Compensation Law. “A worker may be deemed a special employee where he or she is ‘transferred for a limited time of whatever duration to the service of another'” … . “While the mere transfer does not compel the conclusion that a special employment relationship exists, a court is most likely to find that it does where the transferee ‘controls and directs the manner, details and ultimate result of the employee’s work'” … . Carey v Toy Indus. Assn. TM, Inc., 2023 NY Slip Op 02280, First Dept 5-2-23

Practice Point: If plaintiff’s sole remedy against a party is Workers’ Compensation, a defendant cannot seek indemnification from that party. Here plaintiff was the third-party defendant’s special employee so defendant could not seek indemnification from the third-party defendant.

May 2, 2023

Administrative Law, Civil Procedure, Employment Law, Municipal Law

PETITIONER, A CORRECTION OFFICER WHO WAS INJURED MOVING LAUNDRY BAGS BLOCKING A HALLWAY IN THE JAIL, WAS ENTITLED TO GENERAL MUNICIPAL LAW 207-C BENEFITS; ALTHOUGH SUPREME COURT SHOULD NOT HAVE TRANSFERRED THE ARTICLE 78 TO THE APPELLATE DIVISION, THE FOURTH DEPARTMENT CONSIDERED THE MERITS (FOURTH DEPT).

The Fourth Department, reversing the denial of General Municipal Law 207-a benefits in this Article 78 proceeding, determined petitioner, a correction officer, was injured performing her duties when she attempted to move laundry bags blocking the hallway in the jail housing unit. The Fourth Department noted that Supreme Court should not have transferred the Article 78 proceeding to the appellate division because the determination was not based upon a hearing at which evidence was taken “pursuant to direction by law:”

… Supreme Court erred in transferring the proceeding to this Court pursuant to CPLR 7804 (g) on the ground that the petition raised a substantial evidence issue. Respondent’s determination “was not ‘made as a result of a hearing held, and at which evidence was taken, pursuant to direction by law’ (CPLR 7803 [4]). Rather, the determination was the result of a hearing conducted pursuant to the terms of [an] agreement” between petitioner’s union and respondent … . Nevertheless, in the interest of judicial economy, we consider the merits of the petition …. …

Petitioner testified at the hearing that she thought the laundry bags outside the main entrance door were a “safety issue,” particularly because they would block other officers from moving through the hallway quickly and because persons using the hallway may get hurt. She further testified that her training and job responsibilities required her to address safety concerns. Petitioner also submitted documentary evidence that correction officers were under the duty to ensure that laundry bags are not placed on the housing unit floor at any time. Moreover, it is undisputed that there was no policy prohibiting correction officers from moving laundry bags. Although respondent submitted testimony that correction officers should order inmates to move laundry bags, that testimony did not address the location of the laundry bags and the safety hazard posed by laundry bags left in a hallway. We therefore conclude that the determination to deny petitioner’s application for section 207-c benefits was arbitrary and capricious … . Matter of Williams v County of Onondaga, 2023 NY Slip Op 02262, Fourth Dept 4-28-23

Practice Point: A correction officer injured moving laundry bags blocking a jail hallway was performing her duties and was entitled to General Municipal Law 207-c benefits.

Practice Point: An Article 78 proceeding should not be transferred to the appellate division unless evidence was taken at a hearing “pursuant to direction by law.” Here the hearing, which was held pursuant to an agreement between the respondent and petitioner’s union, did not meet that criteria.

April 28, 2023

Employment Law, Municipal Law, Negligence, Vehicle and Traffic Law

A FIRE DISTRICT CANNOT BE HELD VICARIOUSLY LIABLE UNDER A NEGLIGENCE STANDARD FOR THE ACTIONS OF A VOLUNTEER FIREFIGHTER DRIVING A FIRE TRUCK WHERE THE DRIVER DOES NOT VIOLATE THE RECKLESS-DISREGARD STANDARD FOR EMERGENCY VEHICLES (CT APP).

The Court of Appeals, reversing the appellate division, over a two-judge dissent, in a full-fledged opinion by Judge Cannataro, determined a municipality cannot be held vicariously liable under a negligence standard for the actions of a volunteer firefighter driving a firetruck where the driver is protected by the higher reckless-disregard standard for emergency vehicles under the Vehicle and Traffic Law:

Based on undisputed testimony that the firefighter was responding to an alarm of fire, had activated the fire truck’s lights and sirens, stopped the fire truck before entering the intersection, and proceeded slowly through the red light, Supreme Court held that the firefighter had “established prima facie entitlement to the exemption in Vehicle and Traffic Law § 1104,” and that plaintiff had failed to raise a triable issue in opposition as to whether the firefighter acted with reckless disregard. The court therefore granted summary judgment to the firefighter. However, the court reached a different result with respect to the vicarious liability of the District. Relying on General Municipal Law § 205-b, “which states, in part, that ‘fire districts created pursuant to law shall be liable for the negligence of volunteer firefighters,'” the court concluded that questions of fact existed regarding whether the firefighter “was negligent in failing to see plaintiff’s vehicle approaching,” and, thus, the District was not entitled to summary judgment. * * *

… [S]ection 1104 does more than simply immunize firefighters from negligence liability for otherwise privileged conduct … . It modifies their underlying duties in the defined contexts by (i) permitting categories of conduct which would violate other drivers’ ordinary duty of care, (ii) specifying particular safety precautions which must be observed when engaging in such conduct, and (iii) requiring emergency vehicle drivers to avoid recklessness even when engaged in the privileged conduct. When a volunteer firefighter’s actions satisfy all of these conditions and thus are privileged, there is simply no breach of duty or negligence which can be imputed to a fire district under General Municipal Law § 205-b. Anderson v Commack Fire Dist., 2023 NY Slip Op 02028, CtApp 4-20-23

Practice Point: If the volunteer firefighter driving a firetruck does not violate the reckless disregard standard for emergency vehicles, the fire district cannot be held vicariously liable under a negligence standard.

April 20, 2023