Adjunct Law Prof Blog

Editor: Mitchell H. Rubinstein
New York Law School

Friday, January 20, 2017

Legal Malpractice Case Involving Labor Arbitration

I do not usually comment on tort cases. However, I recently came across Westchester Hills Gold Club v. Panken, 2017 N.Y. Slip Op. 30045(U) (New York Co. Jan. 10, 2017), which many readers may find of interest. Download Westchester Hills v. Panken NY County 2017 This is one of a rare set of legal malpractice cases that arose in the context of a labor arbitration.  

In this decision, the court refused to dismiss a legal malpractice case involving advice given by management lawyers in both a disciplinary and contract arbitration. As the court stated in part:

Additionally, this court finds that the complaint sufficiently alleges that defendants' conduct in the
X matter was the proximate cause of plaintiffs damages. The complaint alleges that "but for
[defendants'] malpractice, X's discharge would have been upheld" and that plaintiff would not have
suffered damages in having to pay X back pay for the time during which X was discharged.
Specifically, the complaint alleges that defendants' conduct in failing to enforce the terms of the 2010 final
warning, failing to draft and procure an enforceable LCA, failing to investigate the complaints made about
X's conduct during the August 2013 luncheon in order to meet plaintiffs burden of proving that
X was discharged for "just cause" and failing to call any witnesses to testify at the arbitration hearing
who observed X's conduct proximately caused plaintiffs damages in that plaintiff was required to
reinstate X and pay him back pay based on the arbitrator's determination that X should not have
been discharged. . . .

Of course, on a motion to dismiss, courts view the facts plead in a light most favorable to the Plaintiff. None of the allegations may be true and Plaintiff may not ultimately prevail at trial. 

Mitchell H. Rubinstein

January 20, 2017 in Arbitration Law, Interesting Cases, Lawyers, Litigation | Permalink | Comments (0)

Wednesday, April 8, 2015

Fifth Circuit: Arbitrator's Attorney's Fee Award Reinstated

The Fifth Circuit Court of Appeals reversed a District Court judgment and reinstated an arbitrator's attorney's fees award last week.  The case is Campbell Harrison & Dagley v. Hill, No. 14-10631 (5th Cir., April 2, 2015).

The underlying claim is an attorney's fees dispute that arose after Hill terminated two law firms' litigation services.  The contract between the Hill and each law firm provided for a hybrid-fee agreement with an hourly rate plus a contingency.  Hill later settled his underlying case for "approximately $188 million," and Hill refused to pay the two law firms.  The law firms sued Hill for their unpaid fees.

After the district court referred the case to arbitration as provided by the contract and after a nine day hearing, the arbitrator rejected Hill's defenses and awarded the two firms over $3.3 million in hourly fees plus their 15% contingency -- an additional $25 million.  The firms moved the district court to confirm the award; Hill moved to vacate on evident partiality, unconscionability and public policy grounds.  The district court vacated the contingency portion for unconscionability.

The Fifth Circuit noted the highly deferential consideration given to an arbitrator's award under Texas law.  "Under Texas law," the court wrote, "review of an arbitration award is so limited that an award may not be vacated even if there is a mistake of fact or law."  Further, the court cautioned that a court may not substitute its judgment for the arbitrator's simply because it would have reached a different decision.  The only grounds for vacation an arbitration award are corruption, fraud, evident partiality or the arbitrator exceeding its powers.  An award may also be vacated on common law grounds of "manifest disregard of the law, gross mistake and an award that violates public policy."  In reversing the award, the Fifth Circuit held the district court improperly substituted its judgment for that of the arbitrator.  The panel reversed the district court, rendered judgment on the arbitrator's award and remanded the case to the district court to determine pre-judgment interest.

Craig Estlinbaum


April 8, 2015 in Arbitration Law, Legislation | Permalink | Comments (0)

Sunday, December 8, 2013

2d Circuit Issues Important Decision Arbitration Case Involving Age Discrimination

Beljakovic v. MeLohn Properties, ____F.3d___( 2d Cir. Nov. 20, 2013), is an important case. The court upholds an arbitration agreement involving allegations of age discrimination. In up holding the award, the 2d Circuit again stressed the amount of judicial defererence which is given to arbitration awards. As the court stated:

"The showing required to avoid summary confirmation of an
arbitration award is high." Willemijn Houdstermaatschappij, BV v. Standard
Microsys. Corp., 103 F.3d 9, 12 (2d Cir. 1997). When we review a district
court judgment confirming an arbitration award, we review legal conclusions
de novo, and findings of fact for clear error. See Pike v. Freeman,
266 F.3d 78, 86 (2d Cir. 2001).

Mitchell H. Rubinstein

December 8, 2013 in Arbitration Law | Permalink | Comments (0)

Tuesday, November 12, 2013

Off-duty misconduct

2013 NY Slip Op 06085, Appellate Division, First Department
The Appellate Division unanimously affirmed NYC Police Commissioner Raymond Kelly’s dismissal of a police officer found guilty of discharging his weapon “in the direction of his former girlfriend during an altercation” while off-duty. The court said that there was substantial evidence to support the Commissioner’s finding.
In addition, the Appellate Division noted that the officer was also found guilty of the charges that he was “out of residence while on sick report” and provided false information concerning his absence based on his guilty plea to the allegations.
The police officer’s argument that the hearing officer “improperly placed the burden of proof on him” was rejected by the court as the record indicated that Department satisfied its burden of proving that the officer had committed the acts charged and the hearing officer determined that the officer’s testimony did not rebut the Department’s evidence. 
Citing Featherstone v Franco, 95 NY2d 550, the court said that the penalty of termination did not shock its sense of fairness.
The decision is posted on the Internet at:

Reprinted with permission New York Public Personnel Law

Mitchell H. Rubinstein


November 12, 2013 in Arbitration Law, Public Sector Employment Law | Permalink | Comments (0)

Thursday, October 3, 2013

Court Overturns Firing for Drinking a Beer and Shot

A city employee fired for drinking a beer and a shot during his lunch break on Christmas Eve 2009 won his Article 78 proceeding. Quite simply, the penalty  was too harsh. The case is Application of Peterson v. City of Poughkeepsie, 3428/13, (August 13, 2013).

Read more:



October 3, 2013 in Arbitration Law, Public Sector Employment Law | Permalink | Comments (0)

Sunday, September 22, 2013

Retraining and progressive discipline deemed inappropriate penalties where correction officer was found guilty of using excessive force against an inmate

OATH Index Nos. 731/13 & 1000/13
OATH Administrative Law Judge Alessandra R. Zorgniotti recommended that a correction officer found guilty of using improper force on four occasions be terminated from his position.
The New York City Department of Correction alleged that the correction officer used excessive physical force in dealing with prison inmates such as choking inmates, punching inmates in the head, and slamming one inmate against a wall. Among the charges served on the correction officer was one that alleged that he hit an adult inmate with a radio. 
The correction officer was also charged with making false statements in interviews concerning his conduct. 
ALJ Zorgniotti found that the correction officer’s use of deadly force and his inability to appreciate the seriousness of his misconduct indicated that retraining and progressive discipline were inappropriate penalties.
Accordingly Judge Zorgniotti recommended the individual be dismissed from his position.
The decision is posted on the Internet at:

Reprinted by permission New York Public Personnel Law

Mitchell H. Rubinstein

September 22, 2013 in Arbitration Law | Permalink | Comments (0)

Sunday, August 18, 2013

Dismissal of disciplinary charges recommended because superior condoned the employee's alleged failure to follow department policy

OATH Index No. 866/13
A New York City juvenile counselor was charged with failing to conduct three inspections during a tour or duty as required. 
At the disciplinary hearing, however, the counselor proved that the ”three inspections” requirement had not been enforced by management for many years. 
OATH Administrative Law Judge Alessandra F. Zorgniotti recommended dismissal of charges.
The counselor admitted that she did not make three tours of inspection and testified that the failure to do so was a regular practice caused by an excessive work load.
Judge Zorgniotti found that the counselor had proved heraffirmative defense of condonation and waiver by showing that her not making three inspections each tour of duty was condoned by supervisors. Further, said the ALJ, the employer did not show that it placed the counselor on notice that the “three inspection” during a tour of duty policy would be enforced
The decision is posted on the Internet at:

Reprinted by permission New York Public Personnel Law

Mitchell H. Rubinstein

August 18, 2013 in Arbitration Law | Permalink | Comments (0)

Tuesday, July 9, 2013

Court Finds That Retiree's Right To Health Insurance Vested At Time of Retirement

Retirees' rights to lifetime health benefits vested on their retirement and thus were subject to benefits cap that union negotiated when retirees were still active employees. Curtis v. Alcoa Inc., ____F.3d____(6th Cir. 2013). 

This is an important issue which courts are all of the map on.

Law review commentary would be most welcome. 

Mitchell H. Rubinstein

July 9, 2013 in Arbitration Law, Labor Law, Law Review Ideas | Permalink | Comments (0)

Thursday, June 27, 2013

Employee terminated following a disciplinary hearing after receiving counseling memoranda regarding serious and specific deficiencies in her job performance

Kuznia v Adams2013 NY Slip Op 03369, Appellate Division, Third Department
An individual [Petitioner] commenced her employment with the County Probation Department in 1979 and in 2004 was named as the Department's deputy director. When the Department’s director retired, Petitioner “effectively was in charge of the Department” until a new director was named in August 2010.

Although prior to serving as the Department's deputy director Petitioner had consistently received positive performance evaluations,* in March 2010 the County Administrator sent Petitioner a "letter of counseling" raising a number of concerns regarding her leadership, supervisory and time-management skills. Petitioner was encouraged to "immediately make every effort to improve [her] management skills" and was warned that her failure to do so could result in a loss of her employment.
In October 2010, Petitioner received a second counseling notification — this time in the form of a memorandum from the newly appointed director. The director noted, among other things, Petitioner's  failure to timely submit various state-mandated reports and surveys to the Department's oversight agency.
Subsequently it was found that there were significant past deficiencies and omissions in the operation of the Department during Petitioner's tenure as deputy director and  was served with disciplinary charges in March 2011 pursuant to Civil Service Law §75 alleging various acts of misconduct. The Hearing Officer sustained the bulk of the charges and specifications filed against Petitioner and recommended Petitioner's "dismissal from service [as] the only viable solution."

The County Administrator adopted the Hearing Officer's findings and recommendation and terminated Petitioner’s employment. Petitioner appealed, challenging the County Administrator’s decision and asked the court to direct her reinstatement as deputy director of the Department with back pay.
The Appellate Division affirmed the County Administrator’s determination, explaining that "[T]he standard of review to be applied in reviewing an administrative determination made pursuant to Civil Service Law §75 is whether the determination is supported by substantial evidence in the record as a whole.”
The Appellate Division noted that [1] Credibility determinations solely within the province of the Hearing Officer and that it may neither substitute its own judgment for that of the Hearing Officer nor weigh the evidence presented and [2] a finding of incompetence only requires evidence of some dereliction or neglect of duty.
As to the issue of penalty, the Appellate Division said that it was “well settled” that it would set aside the penalty imposed "only if it is so disproportionate as to be shocking to one's sense of fairness."
Despite the Appellate Division's considering Petitioner's many years of service and her prior positive performance evaluations, the court said that it did not find the penalty of termination to be shocking to its sense of fairness, explaining that in this instance “the record reflects that although Petitioner twice was warned regarding serious and specific deficiencies in her job performance, she continued to exercise poor professional judgment with respect to, among other things, the management, training and supervision of [Department personnel].
Further said the court, “The record … illustrates that Petitioner's neglect of her duties — particularly with respect to her failure to implement certain policies and/or comply with mandated reporting requirements — not only created what [Department’s director] aptly described as ‘a huge public safety issue,’ but also exposed the County to liability.” 

* According to the decision, written performance evaluations of the Petitioner ceased after 2004 because the then County Administrator “preferred to personally conduct yearly evaluations in his office.”

The decision is posted on the Internet at:

Reprinted by permission New York Public Personnel Law

Mitchell H. Rubinstein

June 27, 2013 in Arbitration Law, Public Sector Employment Law | Permalink | Comments (0)

Thursday, June 20, 2013

Where there is broad arbitration clause in the collective bargaining agreement, the arbitrator rather than the court is to determine if the subject of the dispute is arbitrable

Ontario County v County Sheriff's Unit 7850-01, CSEA, Local 1000, AFSCME, AFL-CIO), 2013 NY Slip Op 03204, Appellate Division, Fourth Department
The Collective Bargaining Agreement [CBA] between Ontario County and the Ontario County Sheriff's Unit 7850-01 provided that disputes over the meaning or application of the CBA were initially required to be submitted through the contract's grievance process. In the event the employee was "not satisfied" with the result obtained through that process, the Unit could submit the matter to arbitration .
The Ontario County Sheriff's Unit 7850-01 [Unit] filed grievances on behalf of two correction officers whose request for a shift exchange was denied. Contending that the denial "[v]iolated or [i]nvolved" the clause in the CBA that addressed "time exchanged between employees," the Unit informed County of its intent to seek arbitration. 
The County thereupon filed a petition in Supreme Court pursuant to CPLR Article 75 to stay arbitration and the Unit "cross-moved" to compel arbitration.
Supreme Court denied the County’s petition and granted the Unit’s cross motion.
The Appellate Division affirmed the Supreme Court’s ruling, noting that “A grievance may be submitted to arbitration only where the parties agree to arbitrate that kind of dispute, and where it is lawful for them to do so." In this instance,” said the court, “the parties do not challenge the lawfulness of arbitrating the instant dispute and, instead, [the County contends] that there is no valid agreement to arbitrate the grievances at issue inasmuch as the CBA did not contemplate shift exchanges."
The Appellate Division rejected the County’s argument, explaining that in determining whether the parties agreed to arbitrate the dispute at issue a court’s review “is limited to the language of the grievance and the demand for arbitration, as well as to the reasonable inferences that may be drawn therefrom"
In this instance, said the court, there is “a broad arbitration clause and a reasonable relationship between the subject matter of the dispute and the general subject matter of the parties.” Accordingly, the court decided that the was arbitrable and it was left to the arbitrator to make “a more exacting interpretation of the precise scope of the substantive provisions of the [CBA], and whether the subject matter of the dispute fits within them.”
The decision is posted on the Internet at:
Reprinted by permission New York Public Personnel Law
Mitchell H. Rubinstein

June 20, 2013 in Arbitration Law, Public Sector Labor Law | Permalink | Comments (0)

Monday, June 10, 2013

Supremes Reaffirm Deference Due to Arbitrators

The Supreme Court ruled today that an arbitrator did not exceed his authority under the FAA when he found an arbitration agreement allowed class arbitration.  While not a labor case, it follows the Trilogy and a long line of cases deferring to arbitration. Oxford Health v. Sutter, ____U.S.____(June 10, 2013). 

June 10, 2013 in Arbitration Law | Permalink | Comments (0)

Monday, March 11, 2013

Reinstatement of School Bus Driver Who Tested Positive For Pot Does Not Violate Public Policy

The NY Court of Appeals recently issued an important decision concerning public policy and arbitration. The Court holds that an arbitrator's award reinstating a teacher who tested positive for pot did not violate public policy. The Court reasoned:

We have recognized "three narrow grounds that may form the basis for vacating an arbitrator's award — that it violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power" (Matter of New York City Tr. Auth. v Transport Workers Union of Am., Local 100, 14 NY3d 119, 123 [2010] [citations and internal quotation marks omitted]). None of these grounds has been established here.

The arbitrator's decision did not exceed a specific limitation on his power; nor was it irrational. Rather, he determined that, contrary to the School District's argument, the parties' agreement did not require the penalty of termination in these circumstances and that the District did not in fact have a zero tolerance policy. The consequent determination that reinstatement with conditions was the appropriate penalty did not violate public policy (see Eastern Associated Coal Corp. v Mine Workers, 531 US 57 [2000]). "That reasonable minds might disagree over what the proper penalty should have been does not provide a basis for vacating the arbitral award or refashioning the penalty" (City School Dist. of the City of N.Y. v McGraham, 17 NY3d 917, 920 [2011]). 

The decision is Sehnedehowa Central School Dist. v. CSEA, 2013 NY Slip Op. 0085 (Feb. 12, 2013),  Download Matter of Shenendehowa Cent. Sch. Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864) (2013 NY Slip Op 00885)


Mitchell H. Rubinstein

March 11, 2013 in Arbitration Law | Permalink | Comments (0)

Monday, February 25, 2013

20 Day Suspension For Tieing A Noose Does Not Violate Public Policy

An arbitrator's decision to reinstate with a 20-day suspension a Port of Seattle employee who was fired for hanging a noose in the workplace did not violate Washington public policy against employment discrimination, a unanimous state supreme court holds. Int'l Union of Operating Eng'rs Local 286 v. Port of Seattle, (Wash., No. 86739-9, 2/21/13).

February 25, 2013 in Arbitration Law | Permalink | Comments (0)

Wednesday, January 30, 2013

Failing to comply with the notice requirements for filing a demand for arbitration set out in the collective bargaining agreement is a fatal procedural defect

In the Matter of the Arbitration between Livingston County and the Livingston County Civil Serv. Employees Assn., Inc., Local 1000, 2012 NY Slip Op 08985, Appellate Division, Fourth Department
The County and Local 1000 of the Civil Service Employees Association, Inc. were involved in a grievance that was at the various steps set out in the CBA’s contract grievance procedure article. Ultimately the County denied the grievance by a written decision dated October 4, 2011. CSEA then advised the County by a letter dated October 27, 2011 that it intended to submit the grievance to arbitration. The County received CSEA’s letter on October 28, 2011.
The critical provision in the CBA central to this litigation required "[c]ompliance with the time limits for submitting a notice of intent to arbitrate [and such compliance] shall be a condition precedent to arbitration". The CBA also included a provision stating that "Failure to submit a notice of intent to submit a grievance to arbitration . . . shall thus bar the grievance from proceeding to arbitration."
The time limits set out in the CBA required that the party demanding arbitration must notify the other party of its intention to submit the matter to arbitration “no later than 15 working days after a written decision was issued at the second step of the grievance process.”
Livingston County asked Supreme Court to stay arbitration, contending that CSEA’s demand to submit the grievance to arbitration was untimely as it had not been notified of CSEA’s intent to do so within 15 working days of date of its denial of the grievance.
Supreme Court denied the County’s petition; the Appellate Division unanimously reversed the lower court ruling “on the law.”
The Appellate Division explained that although the CBA between the parties sets out a “broad arbitration agreement,” it also contains an express provision establishing a condition precedent to submitting the matter to arbitration and CSEA had not complied with this condition precedent..
The court also noted that where such a condition precedent is expressly made part of the CBA, the issue of compliance with the condition is for the court to decide in the first instance.
Reprinted with permission New York Public Personnel Law
Mitchell H. Rubinstein

January 30, 2013 in Arbitration Law | Permalink | Comments (0)

Monday, January 28, 2013

Court of Appeals to consider arbitration award reinstating school bus driver terminated from the position after testing positive for marihuana in a random drug test

Shenendehowa Cent. School Dist. Bd. of Educ. (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864), 90 AD3d 1114
The Court of Appeals will hear Shenendehowa Central School District’s appeal from the Appellate Division's ruling sustaining an arbitrator’s award that reinstated a school bus driver terminated after testing positive for marihuana in a random drug test.
Motions by New York State School Boards Association, Inc. and by New York State United Teachers for leave to file briefs amicus curiae on the appeal were also granted by the court.
NYPPL summary the Appellate Division’s ruling in this action is posted on the Internet at:

Reprinted with permission New York Public Personnel Law

Mitchell H. Rubinstein

January 28, 2013 in Arbitration Law | Permalink | Comments (0)

Wednesday, January 16, 2013

Interpreting any statute, first and foremost, requires paying heed to the intent of the Legislature as reflected in the plain language of the statute

Samuelsen, as president of Local 100, Transport Workers Union of Greater New York v New York City Tr. Auth. et al, 2012 NY Slip Op 08780, Appellate Division, First Department
Local 100, Transport Workers Union of Greater New York [Union] is the exclusive collective bargaining representative of approximately 32,000 workers employed by various subordinate bodies and affiliates of the New York City Metropolitan Transportation Authority. One of its component units is the New York City Transit Authority (TA).
The Manhattan and Bronx Surface Transit Authority (MaBSTOA) was created by the Legislature in 1962 after the City of New York seized several privately owned and operated bus lines through its eminent domain power.*  
Public Authorities Law §1203-a, in pertinent part, provides: "[MaBSTOA] officers and employees shall not become, for any purpose, employees of the city or of the [TA] and shall not acquire civil service status or become members of the New York City Employees' Retirement System" (NYCERS). Although this arrangement was originally intended to operate "for a temporary period" (Public Authorities Law 1203-a[2]), it has continued until the present. Although the two authorities have remained separate legal entities, they  nevertheless developed, as a practical matter, functional overlap such as sharing common office facilities and a personnel department.
Certain differences, however, were maintained with respect to personnel matters. For example, the terms of employment for both TA and MaBSTOA employees were governed by a collective bargaining agreement [CBA], with certain exceptions such as the CBA providing that any layoffs of MaBSTOA employees would occur in reverse order of seniority, based upon date of hire. However there was no similar provision in that agreement concerning TA workers as the layoff of TA workers was controlled by the §§80 and 81 of the Civil Service Law. Another difference: set out in the CBA addressed “job selection.” MaBSTOA employees could pick only jobs associated with the bus lines operated by MaBSTOA while TA employees could pick only jobs associated with bus lines and subways operated by TA.
In December 2002, the TA and MaBSTOA executed a "Memorandum of Understanding" with the Union (MOU) that modified the CBA to provide for the consolidation of MaBSTOA and TA surface transit operations whereby "The Authority and the Union agree to the elimination of the artificial distinction between MaBSTOA and the Transit Authority….” To effectuate the MOU, the parties established a joint job pick procedure that allowed MaBSTOA and TA employees, subject to certain limitations, to "pick into" TA jobs and TA employees to "pick into" MaBSTOA jobs in accordance with a single, integrated seniority list, known as the "Consolidated Seniority List."
Asserting that this directly violates the prohibition in Public Authorities Law §1203-a(3)(b) against MaBSTOA employees becoming, "for any purpose, employees of the city or of the [TA],  the Union alleged that "as a result of" the MOU and the consolidation agreement, "employees of MaBSTOA are, for almost all purposes, employees of [the TA]. The Union further alleged that “MaBSTOA employees regularly work in [TA] facilities” and other than not having civil service status or participating in a different pension system, “MaBSTOA employees working for [TA] are for all purposes indistinguishable from [TA] employees."
The Union sought a judgment declaring that:
1. “No MaBSTOA employee may be treated as an employee of the TA for any purpose, and that the MOU and consolidation agreement are void and unenforceable to the extent that they have effectively made employees of MaBSTOA into employees of the TA.” and
2. Prohibiting the MaBSTOA from taking any action in accordance with the 2002 MOU and 2003 consolidation agreement that is prohibited under the Public Authorities Law, or that adversely affects the employment of any employee of MaBSTOA.
Supreme Court dismissed the Union’s complaint “for failure to state a cause of action.” The Appellate Division reversed the lower court’s ruling “on the law.”
As to Supreme Court’s finding that the Union’s compliant “failed to state a cause of action because nothing in the MOU or consolidation agreement indicated that MaBSTOA employees would gain civil service status or become members of NYCERS,” the Appellate Division explained that “[i]n interpreting any statute, we are required, first and foremost, to pay heed to the intent of the Legislature, as reflected by the plain language of the text,” citing Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577.
In addition, said the court, "[i]n construing statutes, it is a well-established rule that resort must be had to the natural signification of the words employed, and if they have a definite meaning, which involves no absurdity or contradiction, there is no room for construction and courts have no right to add to or take away from that meaning."
Noting that a plaintiff’s pleading is to be afforded a liberal construction, the Appellate Division held that “the facts alleged in the complaint are to be accepted as true, and plaintiff is to be accorded the benefit of every possible favorable inference,” citing Leon v Martinez, 84 NY2d 83.
In the words of the court “… the language we are required to interpret is as follows: ‘[MaBSTOA] officers and employees shall not become, for any purpose, employees of the city or of the [TA] and shall not acquire civil service status or become members of [NYCERS]’ (Public Authorities Law 1203-a[3][b]). In our view, this plainly means that three separate prohibitions apply to MaBSTOA employees: (1) that they ‘shall not become, for any purpose,’ employees of the TA; and (2) that they shall not acquire civil service status; and (3) that they shall not become members of the NYCERS. Accordingly, we agree with the Union that, to the extent that the MOU and consolidation agreement, by merging many of the policies of the two authorities, such as probationary employment rules, disciplinary rules, and sick-leave rules, transform MaBSTOA employees into employees of the TA, the agreements violate the first prohibition.”
The Appellate Division rejected the City Transit Authority’s argument that "[t]he plain and obvious meaning of the 'for any purpose' language is to ensure that a MaBSTOA employee cannot, simply by virtue of employment by MaBSTOA, even in a contractually agreed upon commingled work force, acquire civil service status or membership in NYCERS."
The most glaring problem with this interpretation, said the court, is that “it is decidedly not what the statute says.” Rather, said the Appellate Division, “[t]he way the provision is written, the ‘and’ creates a separation between the ‘for any purpose’ clause and the rest of the sentence. It does not signal a modification to the ‘for any purpose’ clause or in any way refer back to it. Furthermore, defendants' interpretation renders the first prohibition superfluous, a result which ‘is to be avoided,’ [citing] Matter of Branford House v Michetti, 81 NY2d 681.”
In other words, said the court, “defendants argue that if a MaBSTOA employee cannot, under any circumstances, be subject to the Civil Service Law or participate in NYCERS, they simply cannot be considered TA ‘employees,’ rendering the first clause meaningless if not considered in the manner they urge. This approach is too narrow, for it pays no heed to the notion that different people working under the same employer can be classified differently.”
"In other words, not every employee in an organization is similarly situated. Here, the statute recognizes that MaBSTOA workers could become so integrated into the TA organization that they could be seen as TA employees, albeit without the protections of the Civil Service Law and the benefit of NYCERS participation. We simply discern nothing in the statutory language which confirms, as the dissent insists, that Civil Service Law protection is the distinguishing' or hallmark' quality of TA employment."
The majority, in response to a comment in the dissent, also observed that its approach was not in conflict with other provisions in the Public Authorities Law that might be interpreted as encouraging some standardization of the two agencies' operations.
Agreeing with the Union’s interpretation of Public Authorities Law §1203-a(3)(b), the Appellate Division held that complaint sufficiently alleged facts establishing that the MOU and consolidation agreement had the effect of conferring on MaBSTOA workers qualities of "employment" by the TA, it ruled that Supreme Court “erred in dismissing the complaint as not having stated a cause of action.”
* MaBSTOA became a subsidiary corporation of the TA.
The decision is posted on the Internet at:
Reprinted by permission New York Public Personnel Law
Mitchell H. Rubinstein

January 16, 2013 in Arbitration Law | Permalink | Comments (0)

Thursday, December 20, 2012

Unambiguous contract of employment language that is inconsistent with the employer’s policy nevertheless controls

Chatelle v North Country Community Coll, 2012 NY Slip Op 08215, Appellate Division, Third Department
When North Country Community College hired Shane Chatelle as its Facilities and Special Projects Manager in 2004, the College’s President provided Chatelle with a letter setting forth his salary and enclosing a copy of the resolution of its Board of Trustees approving the appointment together with a written statement of the Board's "management confidential"* staff policy “purporting to provide,” that among other benefits, that Chatelle would be compensated for up to 180 days of accumulated sick leave upon his severance from employment.
In 2011, Chatelle resigned from his position and requested compensation for his accumulated sick leave. The College, claiming that, despite the statement provided to him upon his appointment, its actual policy authorized compensation for accrued sick leave only upon retirement.
Chatelle sued, contending breach of contract, among other things. Supreme Court granted Chatelle’s motion in part, awarding him $44,114.96 in damages for breach of contract but dismissed his remaining claims. Chatelle and the College “cross appealed” the Supreme Court’s ruling.
The Appellate Division said that the written statement provided to Chatelle upon his employment indicated that he was entitled to "the benefits afforded by the existing [m]aster [a]greements except where modified or defined by the following [benefits]."
With regard to the sick leave benefit, the statement provided that Chatelle was entitled to 30 sick days per year, cumulative to 180 days and "[a]t [the] time of severance sick leave will be compensated."
Although the College, relying on extrinsic evidence, argued that the statement given to Chatelle was in error and that the Board had intended to adopt a policy that only compensated for sick leave at retirement, the Appellate Division said that had “no reason to consider this [extrinsic] evidence because the statement's language is clear and unambiguous.”
Accordingly, said the court, the College is bound by the terms of the writing provided to Chatelle as part of his employment contract “and may not rely on its unilateral mistake to void the agreement,” explaining that the text of the statement is clear and Chatelle does not rely on past practice nor claim “estoppel to enforce his contractual right.”
The Appellate Division, however, modified Supreme Court’s judgment granting Chatelle $44,114.96 as payment for his unliquidated sick leave accruals by reducing the award to $4,770, “representing [Chatelle 's] 159 accrued sick days at $30 per day."
* Presumably Chatelle was designated "managerial" or "confidential" within the meaning of  §201.7 of the Civil Service Law [The Taylor Law] upon his appointment.
The decision is posted on the Internet at:

Reprinted with permission New York Public Personnel Law

Mitchell H. Rubinstein

December 20, 2012 in Arbitration Law | Permalink | Comments (1)

Wednesday, December 19, 2012

Newspaper reports admitted into evidence in an administrative disciplinary proceeding

2012 NY Slip Op 07479, Appellate Division, Fourth Department
A volunteer firefighter filed an Article 78 petition challenging the Volunteer Fire Company’s decision,  to expel him from membership in the Fire Company following a hearing held pursuant to General Municipal Law §207-l.
The petitioner contended that the Fire Company had violated §160.50 of the Criminal Procedure Law, which provides for the “sealing” of certain record, when the Company admitted into evidence media reports related to the petitioner's arrests or when it presented the testimony of a police investigator who was involved in the relevant criminal investigations.
As to newspaper media reports concerning petitioner's arrests, the Appellate Division, citing New York State Dept. of Mental Hygiene v State Div. of Human Rights, 103 AD2d 546, 549, affd 66 NY2d 752, said that such newspaper reports are not "official records and papers . . . relating to [the petitioner's] arrest or prosecution" within the meaning of CPL §160.50(1)(c). Further, said the court, it is " permissible to consider the independent evidence of the conduct [of the petitioner] leading to the criminal charges."
As to the testimony of the police investigator, the court explained that the police investigator was "free to testify from memory" concerning the conduct that led to the petitioner's arrests.”
The Appellate Division then stated there was substantial evidence establishing that the petitioner had exhibited a lack of "good moral character" in violation of Article II, §2 of the Fire Company's Constitution and By-laws and had committed misconduct under General Municipal Law §209-l".
N.B. §209-l provides for the removal of volunteer officers and volunteer members of fire departments charged with, and found guilty of, misconduct or incompetence after a hearing.
The decision is posted on the Internet at:

Reprinted by permission New York Public Personnel Law

Mitchell H. Rubinstein

December 19, 2012 in Arbitration Law | Permalink | Comments (0)

Monday, December 10, 2012

Arbitration award held to be “irrational and defies common sense” for a second time remanded to a different arbitrator

Social Servs. Employees Union Local 371 v City of New York Admin. for Children's Servs., 2012 NY Slip Op 07403, Appellate Division, First Department
A Child Protection Specialist Supervisor II with the New York City Administration for Children's Services (ACS), pleaded guilty to grand larceny in the fourth degree, for filing false income tax returns using confidential ACS client information to fraudulently claim entitlement to state and local tax credits.
This matter was ultimately assigned to disciplinary arbitrator Rose F. Jacobs, who imposed a penalty of suspension, after which employee was to be restored to his former position.
On appeal of the lower court's confirmance, the Appellate Division vacated the arbitrator's award as "irrational and defies common sense" because "[r]einstated to the position of ACS supervisor, [the employee] again would have access to the ACS database from which he extracted the information he used to perpetrate his crime."*
The court remanded the matter to the arbitrator for her reconsideration of the penalty to be imposed. Notwithstanding the clear directive by the Appellate Division not to do so, the arbitrator again restored employee to his former position.
Supreme Court denied Local 371’s CPLR 7510 petition to confirm the second award of the arbitrator reinstating the employee to his former position and granted the City’s cross petition to vacate the award insofar as it orders the reinstatement of the employee.
Local 371 appealed and the Appellate Division unanimously agreed with Supreme Court's ruling. It then remanded the matter to a different arbitrator for reconsideration of the appropriate penalty explaining that it found, “once again and for the same reasons, that the arbitrator's award is irrational and defies common sense,” citing City School District of the City of New York v Campbell, 20 AD3s 313.
Accordingly, the Appellate Division, approving Supreme Court’s “vacated the award reinstating the grievant,” said that it was remanding the matter to a different arbitrator only for reconsideration of the appropriate penalty.
* See 56 AD3d 322, 322 [1st Dept 2008], lv dismissed 12 NY3d 867.

The decision is posted on the Internet at:

Reprinted by permission New York Public Personnel Law

Mitchell H. Rubinstein

December 10, 2012 in Arbitration Law | Permalink | Comments (0)

Thursday, December 6, 2012

The “continuing jurisdiction” of the arbitrator once a final determination is made is not automatic

New York State Dept. of Corr. Servs. (New York State Corr. Officers & Police Benevolent Assn., Inc.), 2012 NY Slip Op 07242, Appellate Division, Third Department

Upon the conclusion of a disciplinary arbitration the arbitrator found the employee guilty of certain charges and made an “interim award,” imposing a penalty of suspension without pay for 45 days and directing that the employee “otherwise be made whole.”
The final award mirrored the arbitrator's interim award but further provided that the arbitrator was "maintain[ing] jurisdiction . . . in the event that any dispute [arose] between the parties over the implementation of [the] [a]ward."
After the employee returned to work he filed a grievance alleging that the Department of Correctional Services* had not restored all of the back pay, time accruals and other benefits due him as directed by arbitration award.
Ultimately it appears that the employee’s union, the New York State Corr. Officers & Police Benevolent Assn. [NYSCOPBA] asked the arbitrator to reopen the arbitration to ascertain whether employee had been made whole pursuant to the terms of his award. A hearing date was scheduled, but the Department, contending that the arbitrator was powerless to, among other things, reopen, modify or explain the prior award, objected.
Notwithstanding the Department’s objection, the arbitrator conducted a hearing in which only NYSCOPBA participated and subsequently awarded the employee approximately $4,000 in vacation and holiday accruals.
The Department filed a petition pursuant to Article 75 of the Civil Practice Law and Rules seeking to vacate the award upon the ground that the arbitrator exceeded his power in reopening the proceeding. In rebuttal, NYSCOPBA argued that the Department had waived its right to seek vacatur of the award and cross-moved to confirm the award.
Supreme Court granted the Department’s application, vacating the award whereupon NYSCOPBA appealed contending that the Department “waived [its] opportunity to vacate the [challenged] arbitration award by, among other things, failing to challenge the arbitrator's assertion of continuing jurisdiction and/or participating in the [challenged] arbitration hearing."
The Appellate Division affirmed the Supreme Court’s ruling, rejecting NYSCOPBA’s argument that the Department had waived any of its rights. The court explained that the Department was “not immediately aggrieved by the arbitrator's purported retention of jurisdiction, the exercise of which admittedly was conditioned upon a future … entirely theoretical dispute between the parties as to the subsequent implementation of the award.”
Further, said the Appellate Division, while NYSCOPBA is correct that "a party that participates in the arbitration may not later seek to vacate the award by claiming it never agreed to arbitrate the dispute in the first place," here the Department expressly objected to the proposed hearing in writing, and it is undisputed that it did not attend in the hearing. Accordingly, the Appellate Division said that it was satisfied that the Department did not "actively participate [in the arbitration]."
As to merits of NYSCOPBA’s appeal, the court said that it is well settled “that an arbitrator has broad discretion to determine a dispute and fix a remedy, and that any contractual limitation on that discretion must be contained, either explicitly or incorporated by reference, in the arbitration clause itself.’
The Appellate Division said that the controlling provision of the collective bargaining agreement between the parties specifically provides that “[d]isciplinary arbitrators shall confine themselves to determinations of guilt or innocence and the appropriateness of proposed penalties . . . [and] shall neither add to, subtract from nor modify the provisions of [the CBA]." Further, said the court, the CBA agreement further provides that "[t]he disciplinary arbitrator's decision with respect to guilt[,] innocence [or] penalty . . . shall be final and binding upon the parties," which language “evidences a clear agreement by the parties to the CBA to ‘limit the discretion of disciplinary arbitrators.’"
While there may be circumstances where an arbitrator's retention of jurisdiction will be deemed permissible, in this instance the Appellate Division concluded that “such circumstances cannot — in light of the restrictive language of the underlying CBA — be said to exist here.”
Accordingly, court ruled that arbitrator's retention of jurisdiction in this matter "clearly exceed[ed] a specifically enumerated limitation [upon his] power” and the arbitrator's authority over the issues submitted to him ended once he rendered his decision.

* The Department of Correctional Services is now known as the Department of Corrections and Community Supervision. 

The decision is posted on the Internet at:

Reprinted with permission New York Public Personnel Law

Mitchell H. Rubinstein

December 6, 2012 in Arbitration Law | Permalink | Comments (0)