Determining 'Opprobrious' Conduct Under the National Labor Relations Act

An employee who engages in opprobrious conduct can loose protection under the NLRA. An interesting May 30, 2017 NYLJ article explores what is opprobrious conduct, here. The article states in part:

On April 21, 2017, the U.S. Court of Appeals for the Second Circuit decided NLRB v. Pier Sixty , 855 F.3d 115 (2d Cir. 2017), affirming a determination by the National Labor Relations Board (the NLRB) that an employee who directed obscenities at an employer over social media did not lose NLRA protections associated with union-related activity. The court recognized that certain conduct could be so "opprobrious" that it loses the protection of the NLRA. Here, the court ruled that the conduct at issue, while "at the outer-bounds" of protected speech, did not cross the line as unduly opprobrious. In so ruling, the court focused on three key factors that informed its analysis, including the fact that the comments were made on social media.

Employees Regarded As An Untreated Alcoholic May State A Disability Claim

Makinen v. City of New York, ____F.3d____(2d Cir. May 23, 2017), is an important case to be aware of. Technically, the decision certifies the question to the NY Court of Appeals whether an employee regarded as being an untreated alcoholic can state a claim for discrimination under the NYC Human Rights Law. However, in doing so, the court summarizes the law and states that such an individual can bring a claim under federal and NYS law. The court also reviews the relevant statutes and explains that the NYC Human Rights law is often more liberally interpreted than its federal and state counter-parts.

Judge Orders In Camera Inspection In Response to FOIL Request

Matter of Felicio v.  Connetquot Central School District, ____Misc. 3d____(Suffolk Co. May 3, 2017),  is an interesting case concerning the Freedom of Information Law. The President of the teacher's union sought email correspondence between certain District administrators. The Board complied by supplying a redacted copies of the emails. The employer claimed that the redaction was necessary to protect the privacy interests of certain employees and to protect inter-agency documents which were not final decisions. FOIL, of course, is not absolute, and these are two of the exceptions to mandatory disclosure of documents.

The court held that it could not make a determination as to whether the documents were exempt from disclosure and ordered an in camera inspection of the documents so that the court could review the entire set of documents. As the court explained:

It is undisputed that respondent's assertion of exemptions requires a, specific and particularized showing to be successful. As noted above, this Court reviewed the redacted documents produced by respondent. However, the redactions and the subject matter which respondent has sought to protect loom large in this Court's analysis. Contrary to respondent's contention against in camera review of FOIL disclosure, our appellate courts have repeatedly cautioned that the proper procedure for respondent to sustain its burden of establishing concrete support of asserted exemptions in the abstract is to submit the records in question for in camera inspection by the court (see Matter of Gould v. 984 New York City Police Dept., 89 NY2d at 275, Matter of Xerox Corp. v. Town of Webster, 65 NY2d 131 , 133 [1985); Matter of M. Farbman & Sons v. New York City Healtlt & Hosps. Corp., 62 NY2d at 83;Miller v New York State Dept. of Tran.'ip., 58 AD3d 981, 983- 84, 871 NYS2d 489, 493 [3d Dept 20091; see also Thomas v New York City Dept. of Educ. , 103 AD3d 495, 499, 962 NYS2d 29, 33 [1st Dept 20131 [ matter should be remanded to the article 78 court for an in camera inspection of the documents to determine if redaction could strike an appropriate balance between personal privacy and public interests and which material could be properly disclosed]). 

Transgender Employee States A Claim For Discrimination Under the ADA

Blatt v. Cabela Retail, ____F. Supp. 2d ____(E.D.Pa. May 18, 2017), is a major decision concerning the rights of transgender employees. The decision appears to be one of first impression.The Plaintiff alleged that she was terminated in violation of Title VII because of her sex and in violation of the ADA. We focus here on the ADA because the court refused to grant the employer's motion to dismiss and held that the Plaintiff plausibly stated a cause of action.

Of significance is that the ADA EXCLUDES from protection under the statute, "gender identity disorder" and that was the basis of the employer's motion to dismiss. The court, however, read this term narrowly and stated that it refers to condition of identifying with a different gender and that Congress did not intend to exclude from coverage disabling conditions that persons who identify with a different gender may have that substantially limits major life activities of interacting with others, reproducing and occupational functioning.

A New York Law Journal article about this decision is available here.

Employees who leave due to compelling family reasons are eligible for unemployment

Matter of Derfert v. Commissioner of Labor, ____A.D.3d____(3d Dep't. May 18, 2017), is an interesting decision concerning unemployment.
To be eligible for unemployment benefits, the former employee must be ready and willing to work.
But, what if your unavailable because of domestic violence? It turns out that because of a law that was enacted, that individual would be eligible for unemployment. As the court stated:

When the provision was amended to its current form in 2009 (see L 2009, ch 35, §§ 1, 2), the legislative intent remained to ensure that "individuals who are voluntarily separated from employment due to compelling family reasons are eligible for [unemployment insurance] benefits" (Senate Introducer Mem in Support, Bill Jacket, L 2009, ch 35, §§ 1, 2). The Board credited claimant's uncontroverted account that she was the victim of domestic violence, stalking and harassment, as well as her testimony that she was willing and able to work during the period in issue but was prevented from leaving her home to get to work due to her justifiable fear of further violence by her former boyfriend (compare Matter of Okumakpeyi [Commissioner of Labor], 295 AD2d 828, 829 [2002]; Matter of Downie [Commissioner of Labor], 288 AD2d 638, 639 [2001]; see generally Matter of Buckley [Bethlehem Steel Corp.—Catherwood], 31 NY2d 950, 951 [1972]).
To conclude, as did the Board, that an employee who takes a leave from work due to a reasonable fear of domestic violence, a "compelling family reason" under Labor Law § 593 (1) (b), is "unavailable" for or unwilling to work and, therefore, ineligible for unemployment insurance benefits under Labor Law § 591 (2) contradicts the intent underlying the protection afforded to domestic violence victims from disqualification for unemployment insurance benefits. Accordingly, we find that claimant should not have been found to be ineligible for unemployment insurance benefits due to unavailability.

Discharge of Tenured Teacher is Sustained, But Could The Teacher Have Done Something Different?

Morales v. NYC Department of Education, ___A.D.3d___(3rd Dep't. May 11, 2017), is an example of a typical decision sustaining the decision of a Education Law 3020-a Hearing Officer which terminated a tenured teacher's employment. I bring the below language to your attention:

The penalty of termination does not shock the court's sense of fairness (see Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 234 [1974]), given petitioner's teaching deficiencies over the course of three years, the absence of any improvement despite assistance offered by respondent, and her refusal to acknowledge her shortcomings (see Davis, 137 AD3d at 717). (emphasis added).

In my experience most courts and Hearing Officers recognize that teachers and other public employees are human and can make a mistake. Sometimes if they acknowledge their error, a teacher can save her job. Of course, if the teacher or other employee admits to the mistake, they are essentially admitting to the misconduct.

Would the result be different in this case?? We will never know. Also, maybe there was nothing for the teacher to admit to because she did nothing wrong. Maybe the Hearing Officer and the court got it wrong. That happens too. Our system is far from perfect.

Major Law Firm Subject to Sex Discrimination Suit

The New York Law Journal recently reported that a partner at a major law firm suit her firm for discrimination, here. A copy of the complaint, which was filed in the District of Columbia, is available here.
I bring this case to your attention because it presents an interesting legal issue of whether a partner can bring a claim under employment discrimination and other statutes designed to protect "employees". Though not stated in the article, that is likely an issue that is going to be raised.
I wrote a law review article on a similar topic a few years ago. You can download a copy of my article by clicking here.

NYS Divsion of Human Rights Cannot Investigate Broad Policies Without Providing Notice

Matter of MTA Bus Co. v. NYSDHR, ____A.D.3d ____(3rd Dept. May 16, 2017), is an interesting case to be aware of. While investigating an individual case of employment discrimination, the NYSDHR went on to examine certain employer policies which it found to be discriminatory. The problem is that NYSDHR did not give the employer the opportunity to be heard with respect to those employment policies. As the court stated:

The record demonstrates, and respondent determined, that the complainant, a bus operator, was placed on restricted duty for reasons unrelated to his alleged disability of bipolar disorder, namely, his reckless driving record, and that petitioner was justified in terminating him based on his conduct in vandalizing three buses in passenger service. Respondent awarded the complainant no damages. However, rather than dismissing the complaint, it proceeded to conclude that "[b]ecause [petitioner] has a blanket policy disqualifying all employees with bipolar disorder from being appointed to, or remaining in, the Bus Operator position and passenger service, and because [petitioner] does not individually assess the ability of those with bipolar disorder to perform the essential functions of the job, [petitioner's] policy violates the Human Rights Law." In making this determination without notice to petitioner that its policies were going to be reviewed, respondent denied petitioner its right to due process. While, upon its own motion, respondent may investigate and file a complaint alleging discriminatory practices (Executive Law §§ 295[6][b]; 297[1]), it did not do so here. It could not, while investigating the bus operator's complaint, which was filed solely on his behalf, find that he had not been discriminated against "and at the same time, make broad findings and impose broad sanctions pertaining to petitioner['s] over-all operations"

Supremes Hold That Arbitration Agreements Must Be Treated Like Any Other Contracts

In Kindred Nursing Home v. Clark, ___U.S.___(May 15,2017), the Supreme Court, once again, treated agreements to arbitrate in a favorable fashion.
At issue was whether an individual with power of attorney, could enter into an arbitration agreement. The Kentucky Supreme Court said no, but the U.S. Supreme Court reversed, reasoning in part:

The Act’s key provision, once again, states that an arbitration agreement must ordinarily be treated as “valid, irrevocable, and enforceable.” 9 U. S. C. §2; see supra, at 4. By its terms, then, the Act cares not only about the “enforce[ment]” of arbitration agreements, but also about their initial “valid[ity]”—that is, about what it takes to enter into them. Or said otherwise: A rule selectively finding arbitration contracts invalid because improperly formed fares no better under the Act than a rule selectively refusing to enforce those agreements once properly made. 

Justice Thomas wrote an interesting dissent where he stated that he would hold that the Federal Arbitration Act does not apply in state courts.

NYC Freelance Act Goes Into Effect

Local Law 140 of 2016 takes effect on May 15, 2017.
NYC's web site  describes this new statute as follows:

The law establishes and enhances protections for freelance workers, specifically the right to: •    A written contract•    Timely and full payment•    Protection from retaliation
The law establishes penalties for violations of these rights, including statutory damages, double damages, injunctive relief, and attorney’s fees. 
Individual causes of action will be adjudicated in state court. 
Where there is evidence of a pattern or practice of violations, the Corporation Counsel may bring civil action to recover a civil penalty of not more than $25,000. 

The Press Release the Mayor signed when the law was enacted is available here.

Teacher's Lack of Testimony Can Be Used Against Her in a 3020-a Proceeding

Varriale v. City of New York, ____A.D.____ (1st Dep't. 2017), is an important decision to be aware of.  The court sustained the termination of a teacher with no disciplinary history and thirteen (13) years of seniority for escalating a confrontation with a student, by yelling expletives and threatening violence.  Of significance, is that the teacher did not testify on her own behalf and she did not express remorse for the conduct. The arbitrator was permitted to draw a negative inference because of that. As the court stated:

Petitioner also showed no remorse nor appreciation for the seriousness of her conduct (see e.g. Matter of Villada v City of New York, 126 AD3d 598, 599 [1st Dept 2015]) to support a finding that she would not engage in similar conduct if faced with such circumstances in the future. Petitioner declined to take the stand, and thus, the hearing officer was permitted to draw the strongest inference against her permitted by the record (Matter of Carangelo v Ambach, 130 AD2d 898, 900 [3d Dept 1987], appeal denied 70 NY2d 609 [1987]).

7th Circuit Decides Agency Fee Case That May Wind Up In Supreme Court

In Abood v. Detroit Board of Education, 431 U.S. 209 (1977), the Supreme Court upheld a state law which required public sector employees to pay an amount equal to union dues, but not join the union. This landmark First Amendment decision compromised the right of objectors (by recognizing that they do not have to join the union) as well as the right of unions (by allowing them to collect what are essentially dues because they have the obligation to represent non members).

In a series of cases, the concept of Agency Fee has been under attack. The Supreme Court granted cert and last term, split 4-4 after the death of Justice Scalia.

On March 21, 2017, the 7th Circuit-in an opinion by Judge Posner-decided a case that just may make it to the Supreme Court. Janus v. ASFME, ____F.3d____(7th Cir. March 21, 2017). The outcome of this case was never in doubt because the 7th Circuit was bound to follow Abood.

Will the Supremes grant cert in this case. I think they will. Why? First, Judge Posner is probably one of the most respected circuit judges. Additionally, the case was decided on a motion to dismiss and it presents purely a legal question. Third, the Supremes just split 4-4 on this very issue which by definition illustrates that this case involves an important legal issue.

What will the Supremes do? That is anyone's guess. Though I heard that our new Justice has never ruled on an agency fee issue, he is known to be conservative and he was appointed by let's say, not the most liberal President. So, some public sector unions are in for the fight of their life.

Terminated Teacher Wins Her Job Back By Appealing Her 3020-a Decision

Matter of Mirenberg v. NYC Dept. of Education, Index No. 653846 (N.Y. Co. April 17, 2017), NYLJ at 1 (May 11, 2017), demonstrates that Education Law 3020-a decisions can be appealed and won.

Here, a Education Law Section 3020-a terminated a teacher for excessive absences and because she submitted fraudulent doctor notes. Significantly, if the teacher used her accumulated leave, she would not have needed to submit doctors notes. Evidence was also submitted that the teacher had a anxiety disorder.

The court held the fact that the teacher may have been entitled to this leave anyway may ameliorate that fraud and denied the DOE's motion to dismiss the petition, reasoning:

The Hearing Officer nowhere concludes that, if excessive absences were removed from his analysis,petitioner's dishonesty alone would warrant termination of his employment. As petitioner urges, the very fact that he did not need the physician's notes to obtain paid leave, as the complete record will disclose accumulated vacation leave to cover all the days for which he used the notes, shows that a disorder affected his judgment, negates any dishonest derivation of compensation, and otherwise ameliorates his dishonesty. Therefore the penalty imposed, if no longer based on the excessive absences, may be disproportionate.

Attorneys Fees Available Under NYS Law In Sex Discrimination Case Against The State

Kimmel v. State of New York, ____N.Y.3d _____(May 9, 2017), is an important case to be aware of.
A divided Court of Appeals held that the Equal Access to Justice Act contained in CPLR Article 86 permits the award of attorneys fees and costs under the NYS Human Rights Law for sex discrimination by a state agency.

Significantly, this case also held that under this statute, attorneys fees were not available in connection with administrative agency proceedings that preceded court review. Note, that in 2015, the law was amended to allow for an award of attorneys fees in sex discrimination cases under state law. This case arose before that amendment.

The case also reaffirmed in footnote 5, that discrimination cases are not tort cases and therefore, a Notice of Claim does not have to be filed

The plaintiff in this case, a state trooper, recovered over $700,000 in damages, which included $87,000 for pain and suffering. The plaintiff was also earlier awarded $76,000 in attorneys fees because of the the State's overly aggressive tactics and the court struck the State's answer because of their failure of comply with discovery and earlier court orders.

Public Employee Successfully Wins Article 78 Proceeding And Gets His Job Back

Sullivan v. County of Rockland, ___A.D.3d___(3d Dept. May 3, 2015), is an interesting case.  An employee was terminated for making a false entry into the employer's computer system. While the finding of guilt was upheld, the court found that termination was too harsh of a penalty. As the court explained:

An administrative penalty must be upheld unless it is so disproportionate to the offense as to be shocking to one's sense of fairness, thus constituting an abuse of discretion as a matter of law (see Matter of Waldren v Town of Islip, 6 NY3d 735, 736; Matter of Kreisler v New York City Tr. Auth., 2 NY3d 775, 776; Matter of Harp v New York City Police Dept., 96 NY2d 892, 894; Matter of Sassi v City of Beacon, 145 AD3d 789). A result is shocking to one's sense of fairness if the sanction imposed is so grave in its impact on the individual subject to it that it is disproportionate to the misconduct, incompetence, failure, or turpitude of the individual, or the harm or risk of harm to the agency or institution, or to the public generally visited or threatened by the derelictions of the individuals (see Kelly v Safir, 96 NY2d 32, 38; Matter of Tomczak v Board of Educ., Eastchester Union Free Sch. Dist., 144 AD3d 1165, 1166; Matter of Smith v Tuckahoe Hous. Auth., 111 AD3d 642, 643).
Here, the penalty imposed is so grave in its impact on the petitioner that it is disproportionate to the misconduct, or the risk of harm to DSS or the public. Under the circumstances of this case, the penalty of termination of employment for a single incident is so disproportionate to the offense as to be shocking to one's sense of fairness, and constitutes an abuse of discretion as a matter of law (see Matter of Diefenthaler v Klein, 27 AD3d 347, 348; Matter of Murray v Ilion Water Commn., 9 AD3d 903, 904; Matter of Lewandowski v Port Auth. of N.Y. & N.J., 229 AD2d 360, 361; Matter of Allman v Koehler, 161 AD2d 114, 115). The petitioner's actions were not so egregious or of such moral turpitude as to justify termination of his employment in light of his previously unblemished record (cf. Matter of Douglas v New York City Bd./Dept. of Educ., 87 AD3d 856, 857; Matter of Brais v Board of Educ. of Massena Cent. School Dist., 92 AD2d 706, 707).

NYC Passes Local Law Prohibiting Inquires About Prospective Employees Previous Salary

On May 4, 2017, the Mayor signed into law a Bill into law which prohibits inquires about a prospective employees previous salary. A copy of that Local Law, which is only applicable to NYC employers, is available here. The statute provides, in part, as follows:

Section 1. Section 8-107 of the administrative code of the city of New York is amended by adding a new subdivision 25 to read as follows:

25. Employment; inquiries regarding salary history. (a) For purposes of this subdivision, “to inquire” means to communicate any question or statement to an applicant, an applicant’s current or prior employer, or a current or former employee or agent of the applicant’s current or prior employer, in writing or otherwise, for the purpose of obtaining an applicant’s salary history, or to conduct a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history, but does not include informing the applicant in writing or otherwise about the position’s  proposed or anticipated salary or salary range.  For purposes of this subdivision, “salary history” includes the applicant’s current or prior wage, benefits or other compensation. “Salary history” does not include any objective measure of the applicant’s productivity such as revenue, sales, or other production reports.

(b) Except as otherwise provided in this subdivision, it is an unlawful discriminatory practice for an employer, employment agency, or employee or agent thereof:

1. To inquire about the salary history of an applicant for employment; or

2. To rely on the salary history of an applicant in determining the salary, benefits or other compensation for such applicant during the hiring process, including the negotiation of a contract.

(c) Notwithstanding paragraph (b) of this subdivision, an employer, employment agency, or employee or agent thereof may, without inquiring about salary history, engage in discussion with the applicant about their expectations with respect to salary, benefits and other compensation, including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.

(d) Notwithstanding subparagraph 2 of paragraph (b) of this subdivision, where an applicant voluntarily and without prompting discloses salary history to an employer, employment agency, or employee or agent thereof, such employer, employment agency, or employee or agent thereof may consider salary history in determining salary, benefits and other compensation for such applicant, and may verify such applicant’s salary history. 

Stray Comments Not Enough To Establish Sexual Harassment

Johnstone v. Monticello, ____F. Appx.____(2d Cir. April 28, 2017), is an interesting sexual harassment case. Though the facts are a bit unusual, it demonstrates the difficulty in establishing a case of sexual harassment.

The plaintiff, a police officer, arrested the Mayor for driving under the influence. The Mayor allegedly referred to the police officer as a “racist,” a “cracker,” a “white mother fucker,” a “member of the KKK,” and a “Nazi,” and called an African American officer a “sellout,” an “Uncle Tom,” and a “token.” What is unusual is that these alleged remarks occurred while the arrest was being processed and hence, this is not your typical employment case. Nevertheless, the court applied the stray remarks doctrine and dismissed the case, reasoning:

Johnstone fails to plead facts sufficient to establish a hostile work environment claim. Since one consideration is the frequency of the alleged abuse, his reliance on a single incident over the course of a nearly 30-year career weighs heavily against  him, although that alone is not dispositive. More significant is that an abusive tirade by a person arrested for driving under the influence is not sufficient “to alter the conditions,” id. at 373, of Johnstone’s employment. The Supreme Court has cautioned that the Title VII analysis  requires careful consideration of the social context  in which particular behavior occurs and is experienced  by its target. A professional football player’s working environment is not severely or pervasively  abusive, for example, if the coach smacks him on the buttocks as he heads onto the field--even if the same  behavior would reasonably be experienced as abusive  by the coach’s secretary (male or female) back at the office.  Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 81 11 (1998). Jenkins’s alleged comments were severe, but they were not made in the context of an employer addressing an employee in the workplace; they were made by an apparently intoxicated  citizen who was belligerent because he was being taken into  custody and processed for violating the law. Being subjected  to an intoxicated and verbally abusive perpetrator does not alter the conditions of a police officer’s employment or create an actionably hostile work environment, even if the person arrested happens to be the mayor.

Overtime Must Be Paid For Work Beyond 40 Hours Per Week

Edelmann v. Keuka College, ____F. Supp. ____(W.D.N.Y. April 10, 2017)(registration required), is a typical FLSA case. The plaintiff, a senior technical support technician claims that was entitled to overtime even though he was paid on the basis of a salary because he was not an exempt worker under the FLSA.

The court refused to dismiss the case and rejected the employer's claim that the plaintiff did not allege a violation of the FLSA, reasoning:

Here, Plaintiff alleges that he typically worked 50 hours per week as a salaried employee. ECF No. 1 at ¶31. Plaintiff alleges that, though he had a fixed schedule, he often performed work outside of his predetermined hours. Id. at ¶¶22-27. Specifically, Plaintiff alleges that he was expected to be "on call" from 7 p.m. to 10 p.m. for weeks at a time, id. ¶22, and that he frequently received calls after 10 p.m. Id. at ¶3. Additionally, Plaintiff alleges that he worked college events — like commencements, open houses, and orientations — outside of his normal working hours. Id. at ¶25. Further, Plaintiff alleges that he was required to work Defendant's yearly board meeting, which required him to be available to provide technical support at all times, including overnight. Id. at ¶26.
Those allegations give rise to a plausible inference that Plaintiff worked more than 40 hours in any given workweek. Like the plaintiffs in Nakahata, Plaintiff has not attached time values to each of the instances of extracurricular work that he alleges. See Nakahata, 723 F.3d at 200-201; ECF No. 1 at ¶¶22-27. But unlike the plaintiffs in Nakahata, who might not have had a standard 40-hour schedule in any given week, Plaintiff was a salaried employee who worked fulltime. Compare Nakahata, 723 F.3d at 199 (noting that the plaintiffs alleged "Plaintiffs and Class members regularly worked hours both under and in excess of forty per week") with ECF No. 1 at ¶30 ("Throughout his tenure with [Defendant], [Plaintiff] worked significantly more than 40 hours each and every week."). Plaintiff's allegations are more plausible than the allegations at issue in Lundy for the same reason. Any work performed in addition to his standard, fulltime schedule necessarily adds up to an amount great than 40 hours. Because Plaintiff has alleged that, in addition to his fulltime schedule, he frequently worked evenings and weekends, his allegations give rise to a plausible inference that he worked more than 40 hours per week. See ECF No. 1 at ¶¶22-27.

Court of Appeals Defines Employer For Purposes of State Anti-Discrimination Law

Griffin v. Sirva, Inc., ____N.Y3d____(May 4, 2017), is an important decision to be aware of.
In this case, the Court addressed several certified questions from the 2d Circuit, including who is an employer under the Executive Law. The Court adopted the common law right to control test which it described as follows:

Decades before Gulino, our lower courts applied New York common law to make that determination. In State Div. of Human Rights v GTE Corp., the Appellate Division identified four relevant factors: "'(1) the selection and engagement of the servant; (2) the payment of salary or wages; (3) the power of dismissal; and (4) the power of control of the servant's conduct'" (109 AD2d 1082, 1083 [4th Dept 1985], quoting 36 NY Jur, Master and Servant, § 2). As with the Reid test (endorsed in Darden and Gulino), "'[t]he really essential element of the relationship is the right of control, that is, the right of one person, the master, to order and control another, the servant, in the performance of work by the latter'" (id.).
In light of the foregoing, we answer the second certified question, as reformulated, as follows: common-law principles, as discussed in GTE, determine who may be liable as an employer under section 296 (15) of the Human Rights Law, with greatest emphasis placed on the alleged employer's power "to order and control" the employee in his or her performance of work

Public Employee Does Not Have To File Grievance Over Statutory VIolation

A fundamental part of labor and employment law is that an employee must exhaust his administrative remedies before proceeding in court. Typically, in the public sector the administrative remedy may be a grievance under the collective bargaining agreement.

Matter of PBA v. New York, ____A.D.3d___(3d Dep't. May 4, 2017), is an important case because it stands for the proposition that if the violation is one of law, a grievance does not have to be filed. As the court explained:

We find that the exhaustion of remedies principle is inapplicable and that the matter is ripe for judicial review. "[A] determination made by an administrative agency must first be challenged through every available administrative remedy before it can be raised in a [*2]court of law" (Matter of Hudson Riv. Val., LLC v Empire Zone Designation Bd., 115 AD3d 1035, 1037 [2014] [citations omitted]). However, this rule does not apply where "an administrative challenge would be futile or where the issue to be determined is purely a question of law" (id. at 1038; see Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]).

Commissioner of Education Appeals Must Be Commenced Within 30 Days

Appeal of SUSAN SUDANO, No. 17, 078 (April 20, 2017), is an important decision to be aware of. A tenured teacher sought to challenge her excessing. The Commissioner did not reach the merits of the case because of several procedural problems. With respect to Commissioner appeals, the Commissioner described the applicable statute of limitations as follows:

 An appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown (8 NYCRR §275.16; Appeal of Lippolt, 48 Ed Dept Rep 457, Decision No. 15,914; Appeal of Williams, 48 id. 343, Decision No. 15,879).  The Commissioner has previously held that an appeal is timely when commenced within 30 days of receiving the determination (Appeal of C.S., 48 Ed Dept Rep 497, Decision No. 15,929; Appeal of M.H. and E.H., 47 id. 274, Decision No. 15,694).  However, where the alleged wrong is that another teacher has been appointed to a position in violation of the petitioner’s preferred eligibility rights, the petitioner does not become aggrieved until the date that another person commences service in the position at issue (Appeal of Gimbrone, 56 Ed Dept Rep, Decision No. 17,036; Appeal of Gordon, 53 id., Decision No. 16,582; Appeal of Dickinson, 50 id., Decision No. 16,082; Appeal of Petkovsek, 48 id. 513, Decision No. 15,933).  The record indicates that petitioner commenced the appeal by serving respondents board and Colabufa within 30 days of the beginning of the school year, the first date on which petitioner became aggrieved.  To the extent petitioner contends that respondent violated Education Law §3013(3) by failing to recall her from the preferred eligibility list to vacant positions that were filled by other teachers, I find that the appeal is timely.  To the extent petitioner contends that she was not the least senior teacher in the remedial reading tenure area and should not have been excessed, I agree with respondent that such claim had to be brought within 30 days of the effective date of the abolition and is untimely. . . 

Education Law 3020-a Decision Finding of Misconduct Bars Unemployment Insurance

Under New York law, if an employee is terminated for misconduct, they generally are not entitled to unemployment insurance. The issue of what constitutes disqualifying misconduct is often litigated.

Matter of Telemaque v. Commissioner of Labor, ____A.D. 3d___(3d Dep't, 2017), addressed the issue of whether a finding of misconduct by a Education Law Section 3020-a hearing officer is conclusive for purposes of Unemployment Insurance and the court held that it is, reasoning:

 Claimant primarily challenges the Hearing Officer's factual and credibility determinations, and argues that evidentiary errors were made at the disciplinary hearing. It does not appear that claimant appealed that disciplinary determination and her challenges to the merits of that determination may not be raised in this unemployment insurance proceeding. Moreover, the record reflects that claimant was represented by an attorney at the hearing who had the opportunity to present evidence and witnesses and to cross-examine the employer's witnesses, and that claimant testified at length with regard to the charges. As claimant had a full and fair opportunity to litigate the charges of misconduct at that hearing, the Board properly gave collateral estoppel effect to the Hearing Officer's factual determinations. . . 

House Passes Bill Authorizing Private Sector Employers To Pay Comp Time Instead of OT

On May 2, 2017, the U.S. House of Representatives passed HR 1180. A CNN news story about that Bill is available here. If the Senate passes the Bill in its current form, President Trump indicated that he will sign it into law.

The Bill amends the 1938 Fair Labor Standards Act with respect to private sector employers only. The Bill authorizes, but does not mandate, private sector employers to provide compensatory time off at time and half for overtime. An employer can only provide compensatory time off under the conditions as stated in Bill as follows:

An employer may provide compensatory time to employees under paragraph (1) only if such time is provided in accordance with—
(A) applicable provisions of a collective bargaining agreement between the employer and the labor organization that has been certified or recognized as the representative of the employees under applicable law; or

(B) in the case of an employee who is not represented by a labor organization that has been certified or recognized as the representative of such employee under applicable law, an agreement arrived at between the employer and employee before the performance of the work and affirmed by a written or otherwise verifiable record maintained in accordance with section 11(c)—
(i) in which the employer has offered and the employee has chosen to receive compensatory time in lieu of monetary overtime compensation; and
(ii) entered into knowingly and voluntarily by such employee and not as a condition of employment. . . .

If enacted into law, I suspect that the highlighted provision above will generate a significant amount of litigation in situations where some employers may mandate that employees agree to compensatory time off in lieu of overtime in order to maintain their jobs.

Court Strictly Construes At-Will Private Sector Employee's Fraud Claim

Connaughton v. Chipotle, ____N.Y.3d ____, (May 2, 2017), is an example of how difficult it is for a private sector employee, employed at will,  to challenge his termination in New York.

As readers to this blog are probably aware, New York is an employment at will state which means that a private sector employer can terminate an employee for any reason so long as it is not an unlawful reason, i.e., employment discrimination.

The plaintiff here, probably aware of this doctrine, sought to challenge his termination on the basis of fraud. Plaintiff claimed that he was fraudulently induced to be employed to work on a certain restaurant concept even though his employer knew he could not work on that concept because of a prior non-compete agreement.

The court strictly construed the elements of a cause of action for fraud and dismissed plaintiff's claim because he could not prove damages, reasoning:

To allege a cause of action based on fraud, plaintiff must assert "a representation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission and injury" (Lama Holding Co. v Smith Barney Inc., 88 NY2d 413, 421 [1996] [internal citation omitted]). Critically, "[a] false representation does not, without more, give rise to a right of action, either at law or in equity, in favor of the person to whom it is addressed. To give rise, under any circumstances, to a cause of action, either in law or equity, reliance on the false representation must result in injury . . . . If the fraud causes no loss, then the plaintiff has suffered no damages" (Sager v Friedman, 270 NY 472, 480-481 [1936]).

In New York, as in multiple other states, "'[t]he true measure of damage is indemnity for the actual pecuniary loss sustained as the direct result of the wrong' or what is known as the 'out-of-pocket' rule" (Lama Holding, 88 NY2d at 421, quoting Reno v Bull, 226 NY 546, 553 [1919]). Under that rule, "[d]amages are to be calculated to compensate plaintiffs for what they lost because of the fraud, not to compensate them for what they might have gained . . . . [T]here can be no recovery of profits which would have been realized in the absence of fraud" (id. at 421, citing Foster v Di Paolo, 236 NY 132 [1923], AFA Protective Sys. v American Tel. & Tel. Co., 57 NY2d 912 [1982], and Cayuga Harvester, Inc. v Allis-Chalmers Corp., 95 AD2d 5 [4th Dept 1983]). Moreover, this Court has "consistent[ly] refus[ed] to allow damages for fraud based on the loss of a contractual bargain, the extent, and indeed . . . the very existence of which is completely undeterminable and speculative" (Dress Shirt Sales v Hotel Martinique Assocs., 12 NY2d 339, 344 [1963]). (emphasis added).

This case is very unusual because the defendant employer contracted with the plaintiff to develop a certain restaurant concept which included hiring plaintiff as an employee.

Employee Entitled To Disclosure of Medical Records For Whistleblower Case

McMahon v. New York Organ Donor Network, Inc., ____Misc. 3d____(N.Y. Co., April 6, 2017), is both an interesting and unusual case.

The plaintiff, a transplant coordinator, asserted that he was fired for being a whistleblower in violation of New York Labor Law Section 740 (applicable to private sector employers). He alleged that he disclosed the fact that organs were procured without legally required medical testing and in some cases, were taken from the patient while they were still showing signs of life.

This case is about disclosure of medical records which the plaintiff needed in order to prove his case.

The court ordered the disclosure and rejected the argument that these medical records were protected under HIPPA, reasoning:

HIPAA provides that "[e]xcept as otherwise permitted or required by this subchapter, a covered entity may not use or disclose protected health information without an authorization that is valid under this section" (45 CFR § 164.508[a][1]). Health plans, health care clearinghouses and certain health care providers are identified as 'covered entities' under HIPAA (45 CFR § 160.103). "A covered entity may use or disclose protected health information to organ procurement organizations" (45 CFR §164.512[h]). A covered entity may also disclose health information protected under HIPAA in a judicial proceeding (45 CFR §164.512[e])HIPAA provides that "[e]xcept as otherwise permitted or required by this subchapter, a covered entity may not use or disclose protected health information without an authorization that is valid under this section" (45 CFR § 164.508[a][1]). Health plans, health care clearinghouses and certain health care providers are identified as 'covered entities' under HIPAA (45 CFR § 160.103). "A covered entity may use or disclose protected health information to organ procurement organizations" (45 CFR §164.512[h]). A covered entity may also disclose health information protected under HIPAA in a judicial proceeding (45 CFR §164.512[e]).

The instant motion appears to raise an issue of first impression — whether an OPO that is not covered by HIPAA must produce medical records it obtained from a covered entity because this information is required in order to run its organization. The reason that defendant receives medical records is that it needs the information to process organ donations. Defendant must know certain information about a donor's medical history in order to ensure that a donation is successful.

However, defendant is not a covered entity and, therefore, must turn over the requested information. Defendant failed to identify a federal regulation or case law that would prevent this Court from requiring disclosure. Defendant cites Liew v New York Univ. Med. Ctr. (55 AD3d 566, 865 NYS2d 278 [2d Dept 2008]) in support of its argument that it need not produce the requested medical records. That case, however, is inapposite because in Liew, the defendant, a hospital, sought to compel third-party defendant St. Luke's Hospital to produce medical records of a nonparty organ donor. The Supreme Court's opinion in Liew, which the Second Department affirmed without modification, noted that the "HIPAA Privacy Rule protects the confidentiality of these records" (Liew v New York Univ. Med. Ctr., 2007 WL 6122885 [Sup Ct, Queens County, May 29, 2007]). This suggests that, although not mentioned in the Appellate Division's decision, St. Luke's Hospital was a covered entity HIPAA. Because defendant is not a covered entity, this case is not binding based on the facts of this case.