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THE UNION’S CLAIM THAT THE COUNTY EMPLOYEE, A SEASONAL EMPLOYEE, SHOULD BE CLASSIFIED AS FULL-TIME BECAUSE HE WORKED 40 HOURS-A-WEEK WAS NOT ARBITRABLE BECAUSE CIVIL SERVICE LAW SECTION 22 PROVIDES THAT RECLASSIFICATION OF A CIVIL SERVICE POSITION CAN ONLY BE DONE BY THE MUNICIPAL CIVIL SERVICE COMMISSION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the grievance filed on behalf of a county employee was not arbitrable because the relief required reclassification of a civil service position:

The respondent Joseph W. Grzymalski began to work for the petitioner, the County of Nassau, on June 28, 2013. He was classified as a seasonal worker and allegedly worked 40 hours per week until his employment was terminated on July 3, 2018.

… [T]he respondent Civil Service Employees Association, AFSCME, Local 1000, AFL-CIO, by its Local 830 (hereinafter CSEA), on behalf of Grzymalski, filed a grievance claiming that because Grzymalski worked 40 hours per week, he was entitled to “full time benefits and status.” …

In determining whether a dispute between a public sector employer and employee is arbitrable, a court must first determine whether “there is any statutory, constitutional or public policy prohibition against arbitration of the grievance” … . …

… [T]he respondents are essentially seeking a reclassification of Grzymalski’s position from seasonal to full time. Since the reclassification of a civil service position can only be accomplished by the municipal civil service commission (see Civil Service Law § 22), the subject grievance is nonarbitrable … . Matter of County of Nassau v Civil Serv. Empls. Assn., Civ. Serv. Empls. Assn., AFSCME, Local 1000, AFL-CIO, 2022 NY Slip Op 01453, Second Dept 3-9-22

Practice Point: Civil Service Law section 22 requires that any reclassification of a public sector employee’s position be done by the municipal civil service commission. Therefore, because there was a statutory prohibition, the request to classify the “seasonal” county employee as a full-time employee was not arbitrable.

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CAUSES OF ACTION ALLEGING BREACH OF FIDUCIARY DUTY DO NOT ACCRUE UNTIL THE FIDUCIARY DUTY IS OPENLY REPUDIATED; CAUSES OF ACTION FOR CONVERSION BASED UPON FRAUD ARE TIMELY SIX YEARS FROM THE CONVERSION OR TWO YEARS FROM DISCOVERY OF THE CONVERSION; THE RELEVANT CAUSES OF ACTION HERE, THEREFORE, SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined causes of action alleging defendant Filardo, plaintiff car dealership’s employee, used fraudulent schemes to steal funds from plaintiff over a period of years, should not have been dismissed on statute of limitations grounds, and/or on the ground the causes of action were not adequately pled:

The plaintiff asserted causes of action against Filardo for breach of fiduciary duty (first cause of action), breach of the duty of loyalty (second cause of action), faithless servant doctrine (third cause of action), conversion (fifth cause of action), fraudulent concealment by fiduciary (sixth cause of action), and promissory estoppel (ninth cause of action), and causes of action against both defendants for aiding and abetting fraud (fourth cause of action), civil conspiracy (seventh cause of action), fraud and deceit (eighth cause of action), unjust enrichment (tenth cause of action), money had and received (eleventh cause of action), and fraud by non-disclosure (twelfth cause of action). …

“The statute of limitations for a cause of action alleging a breach of fiduciary duty does not begin to run until the fiduciary has openly repudiated his or her obligation or the relationship has been otherwise terminated” … Here, the plaintiff alleged that its relationship with Filardo was not terminated until November 2017, and there is no allegation that Filardo openly repudiated his employment obligations prior to that time … .

… [W]hen the allegations of fraud are essential to a cause of action alleging conversion based upon actual fraud, the cause of action is governed by the limitations period for fraud set forth in CPLR 213(8). That statute provides that, in an action based upon fraud, “the time within which the action must be commenced shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it” … .Star Auto Sales of Queens, LLC v Filardo, 2022 NY Slip Op 01476, Second Dept 3-9-22

Practice Point: The statute of limitations for breach of fiduciary duty does not start running until the fiduciary openly repudiates the duty.

Practice Point: The statute of limitations for conversion based upon fraud is six years from the conversion or two years from discovery of the conversion.

 

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PLAINTIFF RAISED QUESTIONS OF FACT ABOUT WHETHER SHE WAS THE VICTIM OF GENDER DISCRIMINATION; UPON HER RETURN FROM MATERNITY LEAVE SHE WAS TOLD HER POSITION HAD BEEN ELIMINATED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff’s gender-discrimination action against defendant employer should not have been dismissed. Upon returning from maternity leave, plaintiff was informed her management-level position had been eliminated and replaced by a position for which she was not qualified. Defendant did offer plaintiff a job as a temporary social worker at the same salary:

“Discrimination on the basis of pregnancy is a form of gender discrimination” … . …

… [T]he defendant failed to eliminate triable issues of fact as to whether the position offered to the plaintiff involved a materially adverse change in the terms of her employment, since the social worker position did not involve any of the management responsibilities that the plaintiff had performed … . …

… [T[here were triable issues of fact as to whether the plaintiff’s supervisor, Segree, made remarks [re: her pregnancy] indicative of a discriminatory motive to terminate the plaintiff’s employment … . …

Contrary to the defendant’s contention, it also failed to eliminate triable issues of fact as to whether the proffered explanation for terminating the plaintiff’s employment was a pretext for discrimination … . Although McDonald averred that the plaintiff’s employment was terminated because she had no business education and no sales or marketing experience, he acknowledged that a business education was not required. Lefort v Kingsbrook Jewish Med. Ctr., 2022 NY Slip Op 01294, Second Dept 3-2-22

 

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ELIMINATING THE LONGSTANDING PRACTICE OF REIMBURSING RETIREES’ MEDICARE PART B PREMIUMS IS AN ISSUE THAT MUST BE NEGOTIATED WITH CURRENT EMPLOYEES; PERB DETERMINATION ANNULLED (THIRD DEPT). ​

The Third Department, annulling the determination of the Public Employment Relations Board (PERB), determined eliminating the longstanding practice of reimbursing retirees for Medicare Part B premiums was an issue that must be negotiated with current employees:

In its decision, PERB explicitly found that there was a longstanding practice of reimbursing retirees for their Medicare Part B premiums, rendering negotiation mandatory before the City could make any changes to that past practice for active employees who sought continuation of that benefit. Despite that finding, PERB determined that the improper practice charge must be dismissed because “the City took no action against current employees” since it only notified retirees about the change in the past practice. The fact that PERB only informed retirees of such a change does not mean that it did not affect current employees. PERB’s reasoning in that respect fails to account for the actual hearing testimony, which established that many of petitioner’s witnesses — who were active employees as of January 1, 2010 — either did not receive Medicare Part B reimbursements after that date or were given reason to believe that they would not be so reimbursed in the future despite representations throughout their employment that the practice would continue … . …

Because PERB explicitly found in its decision that “the 25-year[-]long uninterrupted practice” of reimbursing Medicare Part B premiums met the standard of a past practice that was subject to negotiation for active members of petitioner, and there is no dispute that negotiation did not occur between the City and petitioner prior to implementing the change to the reimbursement policy, the matter is remitted to PERB for a final disposition consistent with these findings. Matter of Albany Police Benevolent Assn. v New York Pub. Empl. Relations Bd., 2022 NY Slip Op 01215, Third Dept 2-24-22

 

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PLAINTIFF’S DISCOVERY REQUESTS IN THIS CHILD VICTIM’S ACT ACTION ALLEGING SEXUAL ABUSE BY A CATHOLIC SCHOOL GYM TEACHER WERE PALPABLY IMPROPER (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff’s discovery requests in this Child Victim’s Act action against the Archdiocese of New York were palpably improper and should have been denied (the requests were not described in the decision). Plaintiff alleged sexual abuse by a gym teacher when he was a child in the 1960’s:

Notices for discovery and inspection and interrogatories are palpably improper if they are overbroad or burdensome, fail to specify with reasonable particularity many of the documents demanded, or seek irrelevant or confidential information (see CPLR 3120[2] …). Where the discovery demands are overbroad, the appropriate remedy is to vacate the entire demand rather than to prune it … . “The burden of serving a proper demand is upon counsel, and it is not for the courts to correct a palpably bad one” …

Here, the plaintiff’s discovery demand and interrogatories were palpably improper in that they were overbroad and burdensome, sought irrelevant or confidential information, or failed to specify with reasonable particularity many of the documents demanded … .Fox v Roman Catholic Archdiocese of N.Y., 2022 NY Slip Op 01148

 

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THE TERM “ECONOMIC SECURITY” IN THE NYU FACULTY HANDBOOK DID NOT PROHIBIT A POLICY (THE “REF” POLICY) TYING A TENURED FACULTY MEMBERS’ SALARY-REDUCTION TO THE AMOUNT OF GRANTS PROCURED IN A GIVEN YEAR; THE REF POLICY WAS NOT A DISCIPLINARY PROCEDURE; A SPECIFIC SALARY FIGURE IN A TENURED FACULTY MEMBER’S CONTRACT, HOWEVER, COULD NOT BE REDUCED PURSUANT TO THE REF POLICY (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice OIng, modifying Supreme Court, determined: (1) the term “economic security” in the faculty handbook was prefatory language that did not prohibit the university (NYU) from tying salary reductions for tenured faculty to the amount of grant-money procured by a faculty member (the REF policy); (2) the salary reductions were not part of disciplinary procedure; and (3) the provision in the contract with one of the faculty members, Samuels, setting his salary at a specific amount prohibited the salary reductions tied to grants as to him:

Assuming that the term “economic security” gives rise to contractual rights, we reject the argument advanced by the Professors and amici curiae that “economic security” is an ambiguous term of art and that custom and usage in academia define it as prohibiting retroactive salary reductions pursuant to such policies as the REF Policy. * * *

A faculty member’s failure to comply with the REF Policy is simply not conduct that is subject to discipline. * * *

We find that NYU breached the terms of the “2001 Contract” when it reduced Professor Samuels’s salary pursuant to the REF Policy and that he is entitled to summary judgment on this claim. Monaco v New York Univ., 2022 NY Slip Op 01125, First Dept 2-22-22

 

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ALTHOUGH THE PETITIONER, COUNTY COMMISSIONER OF SOCIAL SERVICES, WAS PROPERLY TERMINATED FROM HER EMPLOYMENT FOR OTHER REASONS, THE FACT THAT SHE TESTIFIED IN FAMILY COURT ABOUT THE PROPER PLACEMENT OF A JUVENILE WHICH WAS NOT AS SEVERE AS THE PLACEMENT ADVOCATED BY THE COUNTY ATTORNEY AND THE PROBATION DEPARTMENT DID NOT CONSTITUTE A BREACH OF LOYALTY (THIRD DEPT).

The Third Department, in this Article 78 action, affirmed the county’s decision to terminate the employment of petitioner, who was Commissioner of Social Services for the county. The allegations of misconduct are too detailed to be summarized here. But the Third Department noted that the fact that the petitioner disagreed with the county attorney and the probation department about the appropriate placement of a juvenile, and so testified in Family Court, was not actionable misconduct:

… [P]etitioner, the Director of Probation and the County Attorney each had defined statutory roles in the Family Court proceeding … . That petitioner opted to promote a less stringent measure than her counterparts does not, as charged by respondents, constitute a breach of loyalty owed to either the County Attorney or the Director of Probation, or vice versa. … [T]o the extent that the Board relied, at all, on the Hearing Officer’s findings with respect to [the relevant] charge … , its determination is not supported by substantial evidence. It therefore follows that so much of the Board’s determination as sustained said specifications are annulled. Matter of Scuderi-Hunter v County of Del., 2022 NY Slip Op 01078, Third Dept 2-17-22

 

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LABOR LAW 198-B, WHICH PROHIBITS WAGE KICKBACKS, DOES NOT PROVIDE A FREESTANDING PRIVATE RIGHT OF ACTION (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, over an extensive two-judge dissent, determined Labor Law 198-b, which prohibits wage kickbacks, does not provide a freestanding private right of action:

Labor Law § 198-b prohibits “kickbacks” by making it unlawful for any person to “request, demand, or receive” part of an employee’s wages or salary on the condition that “failure to comply with such request or demand will prevent such employee from procuring or retaining employment.” Violation of the statute is a misdemeanor offense (see Labor Law § 198-b [5]). Labor Law § 218 also provides for administrative enforcement of section 198-b by the Commissioner of the Department of Labor. The statute empowers the Commissioner to grant affected employees restitution and liquidated damages in addition to imposing civil penalties. * * *

… [W]e apply a three-factor test to determine whether the legislative intent favors an implied right: “‘(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme'” … . * * *

The statutory scheme … expressly provides two robust enforcement mechanisms, “indicating that the legislature considered how best to effectuate its intent and provided the avenues for relief it deemed warranted” … . Konkur v Utica Academy of Science Charter Sch., 2022 NY Slip Op 00911, CtApp 2-10-22

 

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ANSWERING A CERTIFIED QUESTION FROM THE SECOND CIRCUIT, THE COURT OF APPEALS DETERMINED THE RELEVANT PROVISIONS OF THE CIVIL SERVICE COLLECTIVE BARGAINING AGREEMENTS (CBA’S) DID NOT PROVIDE RETIREES WITH A VESTED RIGHT SUCH THAT THE HEALTH INSURANCE BENEFITS AWARDED AT RETIREMENT WOULD NOT BE REDUCED BY THE PROVISIONS OF SUBSEQUENT CBA’S (CT APP).

The Court of Appeals, addressing certified questions from the US Court of Appeals, Second Circuit, determined the relevant provisions of the civil-service collective bargaining agreements (CBA’s) did not create a vested right in the health insurance benefits afforded retirees. In other words, the CBA’s did not provide that the coverage of health insurance premiums vested at retirement such that reductions in coverage in subsequent CBA’s would not apply:

… [N]one of the CBA provisions identified by the Second Circuit in the first certified question establish a vested right to lifetime fixed premium contributions, either singly or in combination. Donohue v Cuomo, 2022 NY Slip Op 00910, CtApp 2-10-22

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PLAINTIFF’S “INVOLUNTARY RESIGNATION,” HOSTILE WORK ENVIRONMENT AND RETALIATION ACTION PROPERLY SURVIVED SUMMARY JUDGMENT; TWO JUSTICE DISSENT (THIRD DEPT).

The Third Department over a two-justice dissent, determined plaintiff’s employment discrimination and retaliation action properly survived summary judgment. Among the issues presented by the allegations was whether she “involuntarily resigned” because of the intolerably hostile work environment. Plaintiff alleged she was subjected to sexual harassment and was retaliated against after she complained about her treatment:

In our view, the broader account by plaintiff of a hostile work environment, Hawkins’ [plaintiff’s supervisor] behavior in placing plaintiff, but not a similarly situated man, on a PIP [performance improvement plan], and what plaintiff described as a wholly inadequate response by Russo [human resources official] to her August 2017 complaint about the situation reflect questions of fact as to whether plaintiff was subjected to a work environment so hostile that her only alternative was resignation and whether that hostility arose from a discriminatory motive … . Defendants attempted to rebut the presumption of discrimination arising from those facts via the affidavit of Hawkins, who averred in conclusory fashion that the other employee he supervised was performing better than plaintiff at the time she was placed on a PIP and that the other employee was also placed on a PIP at some point. Hawkins, however, gave no detail as to how the other employee compared to plaintiff on the performance metrics, failed to deny that the other employee was also underperforming on those metrics in July 2017 and offered no explanation as to why he did not seek to place both on a PIP at that time. Long v Aerotek, Inc., 2022 NY Slip Op 00915, Third Dept 2-10-22

 

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