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Damages in Firefighters’ Discrimination Suit Modified

The Fourth Department modified the Supreme Court’s damages assessment in a case brought by firefighters against the City of Buffalo (and named individuals) “alleging that [the City] discriminated against them by allowing promotional eligibility lists created pursuant to the Civil Service Law to expire solely on the ground that plaintiffs, who were next in line for promotion, were Caucasian.” The order finding the City liable was issued based upon the US Supreme Court’s ruling in Ricci v DeStefano (557 US 557) which held “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious discriminatory action”… .In affirming that order (in a prior appeal), the Fourth Department determined the City “did not have a strong basis in evidence to believe that they would be subject to disparate-impact liability if they failed to take the race-conscious action, i.e., allowing the eligibility lists to expire” … .  The case came before the Fourth Department this time with respect to damages-issues only.  The Fourth Department affirmed the damages for emotional distress, but modified the economic damages finding that Supreme Court had erred in placing the burden of proof on the defendants to establish plaintiffs’ economic damages, and noting that damages for loss of future earnings should be based on the difference between what he or she is now able to earn and what he or she could have earned in the absence of discrimination. The Fourth Department determined some of the expert-findings were too speculative.   Margerum, et al v City of Buffalo, et al, 421, 4th Dept 7-5-13

 

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“Employer” of Independent Contractor Not Liable for Contractor’s Alleged Negligence

The Fourth Department reversed Supreme Court and granted summary judgment dismissing claims which alleged Sirota, who worked as an independent contractor for defendant Ridgeway, was negligent in advising plaintiff to purchase “certain security and investment vehicles.”  The Fourth Department determined Ridgeway was entitled to summary judgment as Ridgeway had demonstrated it owed no duty of care to plaintiff to supervise Sirota (an independent contractor) because it did not direct or control Sirota’s providing investment advice:

…“[O]rdinarily, a principal is not liable for the acts of independent contractors in that, unlike the master-servant relationship, principals cannot control the manner in which the independent contractors’ work is performed”… . Although there are exceptions to that general rule …, we conclude that none apply to the circumstances presented here.  Although plaintiff’s claim sounds in negligent supervision, one of the recognized exceptions…, it is well settled that “the mere retention of general supervisory powers over an independent contractor cannot form a basis for the imposition of liability against the principal”,,,  Wendt v Bent Pyramid Productions, LLC, et al, 448, 4th Dept 7-5-13

 

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Wage Parity Law Which Conditions Medicaid Reimbursement Upon Paying Home Health Services Workers a Minimum Wage Is Constitutional

In a full-fledged opinion by Justice McCarthy, the Third Department determined the Wage Parity Law (Public Health Law section 3614-c), which conditions Medicaid reimbursement upon paying home health services providers a minimum wage as set in New York City’s Living Wage Law, was constitutional. The court rejected arguments that: (1) the Legislature improperly delegated its authority to New York City; (2) the law improperly incorporated the Living Wage Law by reference; (3) extending the New York City law violated the home rule provision of the NY Constitution; and (5) the statute violated the substantive due process requirements.  Matter of Concerned Home Care Providers, Inc v State of New York, 515737, 3rd Dept 7-3-13

 

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Collective Bargaining Agreement Unambiguous—Lifetime Health Benefits Mandated

In concluding the collective bargaining agreement (CBA) unambiguously provided lifetime health insurance coverage to the petitioners pursuant to the CBA in effect upon their retirement, the Third Department wrote:

A  written agreement that is clear and complete on its face must  be  enforced  according  to the  plain meaning  of its terms  …Extrinsic evidence may  be considered to discern the  parties’ intent only  if the  contract is ambiguous,  which  is a question of law for the court to resolve…. In  determining  whether  an  ambiguity  exists, “‘[t]he court  should examine  the  entire contract and  consider the relation of the parties and the circumstances under which it was executed. Particular words  should be  considered, not as if isolated from the context, but in the light of the obligation as a whole  and the intention of the parties as manifested thereby'”… . Pursuant to the CBAs in effect at the time each petitioner retired, an employee who had completed 10 years of service was entitled to health insurance coverage  “in retirement.”    In order to receive that coverage at a rate of 100% per individual and 75% per dependent, the only requirement was that the individual “retire during the term of the contract.”    Matter of Warner, 516038, 3rd Dept 7-3-13

 

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Arbitrator Exceeded Powers Afforded by Collective Bargaining Agreement Re: Time Limitations for Filing Grievances

In affirming Supreme Court’s determination that an arbitrator had exceeded a limitation on his power enumerated in the collective bargaining agreement (CBA), the Third Department explained:

It is well established that an arbitrator’s award is largely unreviewable….  However, such an award may be      vacated upon a showing that it “‘violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on  the arbitrator’s power'” ….  Here, Supreme Court properly concluded that the arbitrator exceeded a specifically enumerated limitation on his power by failing to recognize the grievance and arbitration procedures as outlined in the CBA and, more particularly, the time limitation for filing grievances that is contained therein.  Matter of Adirondack Beverages Corporation…, 516022, 3rd Dept 7-3-13

 

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THOSE WHO WORK ON MUNICIPAL VESSELS ARE ENTITLED TO THE PREVAILING WAGE PURSUANT TO LABOR LAW 220 (CT APP)

The Court of Appeals, in a full-fledged opinion by Judge Piggot, determined a municipal vessel is public work entitling those who work on a municipal vessel to the prevailing wage pursuant to Labor Law 220:

We hold that a municipal vessel is a public work within the meaning of Labor Law § 220 and article I, § 17 of the State Constitution—so that workers involved in its construction, maintenance or repair must be paid prevailing wages—if the vessel’s primary objective is to benefit the general public. * * *

We …. conclude that a three-prong test should be applied to determine whether a particular project is subject to the prevailing wage requirements of Labor Law § 220 and article I, § 17 of the State Constitution. First, a public agency must be a party to a contract involving the employment of laborers, workers, or mechanics. Second, the contract must concern a project that primarily involves construction-like labor and is paid for by public funds. Third, the primary objective or function of the work product must be the use or other benefit of the general public. …

… Plaintiffs worked on such vessels as the Staten Island Ferry boats, city fireboats, and municipal garbage barges. A ferry boat is, of course, made for the use of the general public, as is a bus or train. While we recognize that a fireboat, tug or barge is not made to be used by the public, there is no doubt that its function is to serve the general public. For example, a New York City fireboat is used by firefighters for the … benefit of the entire City’s public. There is no justification for making fine distinctions between vessels according to whether or not members of the public have access to them. We have not differentiated buildings used by public employees according to whether there is public access … . The dispositive question is whether their primary function is to serve the general public. De La Cruz v Caddell Dry Dock & Repair Co., Inc., 2013 NY Slip Op 04842 [21 NY3d 530], CtApp 6-27-13

 

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STATE’S USE OF A GPS DEVICE TO TRACK STATE EMPLOYEE’S MOVEMENTS DID NOT REQUIRE A WARRANT, BUT THE SEARCH WAS UNREASONABLE BECAUSE ALL OF THE EMPLOYEE’S MOVEMENTS, EVEN WHEN THE EMPLOYEE WAS ON VACATION, WERE TRACKED, THE GPS EVIDENCE SHOULD HAVE BEEN SUPPRESSED (CT APP).

The Court of Appeals, reversing the Appellate Division, in a full-fledged opinion by Judge Smith, over a three-judge concurrence, determined the evidence obtained about a state employee’s movements by placing a GPS device on the employee’s car should have been suppressed in the Labor Department’s hearing (after which the employee was terminated). The Court of Appeals found that the use of the GPS device did not require a warrant, but the search in this case was unreasonable in scope:

The State of New York, suspecting that one of its employees was submitting false time reports, attached a global positioning system (GPS) device to the employee’s car. Under People v Weaver (12 NY3d 433 [2009]) and United States v Jones (565 US —, 132 S Ct 945 [2012]), the State’s action was a search within the meaning of the State and Federal Constitutions. We hold that the search did not require a warrant, but that on the facts of this case it was unreasonable. * * *

While the search did not require a warrant, it did not comply with either the State or Federal Constitution unless it was a reasonable search. We conclude that the State has failed to demonstrate that this search was reasonable. * * *

Where an employer conducts a GPS search without making a reasonable effort to avoid tracking an employee outside of business hours, the search as a whole must be considered unreasonable. That conclusion concededly requires suppression of the GPS evidence here; the State has disclaimed any reliance on the balancing test that we use when deciding whether to invoke the suppression remedy in administrative proceedings .. . . Matter of Cunningham v New York State Dept. of Labor,
2013 NY Slip Op 04838 [21 NY3d 515], CtApp 6-27-13

 

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Orange County Executive Did Not Have Authority to Terminate County Employees Before County Legislature Eliminated Positions

The Second Department reversed Supreme Court and determined the Orange County Executive did not have the authority to terminate county employees before the legislature acted to removed funding for the positions:

The doctrine of “[l]egislative equivalency requires that a position created by a legislative act can only be abolished by correlative legislative act”…. Pursuant to section 2.02(1) of the Orange County Charter and Orange County Administrative Code, the Orange County Legislature possesses sole authority to “establish or abolish positions of employment and titles thereof.” Here, the County Legislature had not taken any action to abolish the subject positions at the time the County Executive terminated the subject employees’ employment. While the Orange County Charter and Orange County Administrative Code give the County Executive the authority to “supervise, direct and control and administer all departments” (Orange County Charter § 3.02[e]; Administrative Code § 3.02[e]), they do not give the County Executive the authority to terminate the employment of civil service employees without a proper abolition of the positions by the County Legislature in accordance with the doctrine of legislative equivalency…. Further, County Charter § 4.10(a) does not authorize the County Executive to undertake any “remedial action” constituting, inter alia, unilateral modification to the budget and/or abolition of legislatively created positions…. Therefore, under these circumstances, the County Executive did not have the authority to terminate the subject employees’ employment for economic reasons, effective October 29, 2010.   Matter of Civil Serv Empls Assn Inc v County of Orange, 2013 NY Slip Op 04798, 2nd Dept 6-26-13

 

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Hospital Can Be Vicariously Liable for Actions of Non-employee Physician Under Apparent or Ostensible Agency Theory

The Second Department explained when a hospital can be held vicariously responsible, under a theory of apparent or ostensible agency, for the actions of non-employee physicians who provide medical services at the hospital:

“A hospital [is] responsible to a patient who sought medical care at the hospital, . . . rather than from any particular physician although the physician whose malpractice caused injury to the patient was not an employee of the hospital”… . To create an apparent or ostensible agency, the plaintiff must reasonably rely on the appearance of authority, based on some misleading words or conduct by the principal, not the agent. Moreover, the plaintiff must accept the services of the agent in reliance upon the perceived relationship between the agent and the principal, and not on reliance on the agent’s skill…. In the context of a medical malpractice action, the patient must have reasonably believed that the physicians treating her were provided by the hospital or acted on the hospital’s… . In evaluating whether a doctor is the apparent agent of a hospital, a court should consider all attendant circumstances to determine whether the patient could properly have believed that the physician was provided by the hospital… .  Loaiza v Lam, 2013 NY Slip Op 04780, 2nd Dept 6-26-13

 

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Starbuck’s Tip-Splitting Policy Analyzed

The Second Circuit asked the Court of Appeals to answer certified questions about how the Labor Law relates to a tip-splitting policy used by Starbucks.  Over two dissents, the Court of Appeals determined, under the Labor Law, limited supervisory duties did not mandate exclusion from the tip pool:

Starbucks maintains a written policy governing the collection, storage and distribution of customer tips. Pursuant to this policy, each Starbucks store places a plexiglass container at the counter where patrons may deposit tips. Once these tip canisters become full, Starbucks requires that they be emptied into a bag and the money is stored in a safe. At the end of each week, the tips are tallied and distributed in cash to two categories of employees — baristas and shift supervisors — in proportion to the number of hours each employee worked. Starbucks does not permit its assistant store managers or store managers to share in the weekly distribution of tips. The company’s decision to include shift supervisors in these tip pools was the impetus for the first lawsuit before us, while its exclusion of assistant store managers underlies the claims in the second action. * * *

…[A]n employee whose personal service to patrons is a principal or regular part of his or her duties may participate in an employer-mandated tip allocation arrangement under Labor Law § 196-d, even if that employee possesses limited supervisory responsibilities. But an employee granted meaningful authority or control over subordinates can no longer be considered similar to waiters and busboys within the meaning of section 196-d and, consequently, is not eligible to participate in a tip pool. * * *

…Starbucks’ decision to exclude assistant store managers from the tip pool is not contrary to Labor Law § 196-d.  Barenboim, et al v Starbucks Corporation, No 122, CtApp 6-26-13

 

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