Ganley v. Giuliani, 94 N.Y.2d 207 (1999)
Section 1127 of the New York City Charter, requiring nonresident City employees to pay the equivalent of City income tax, does not apply to employees involuntarily transferred from public benefit corporations or authorities to City agencies because the statute envisions a voluntary, pre-employment contract.
Summary
This case concerns the applicability of Section 1127 of the New York City Charter to non-resident employees who were involuntarily transferred to City agencies due to mergers. The petitioners, former members of the NYC Transit Authority, Housing Authority Police, and Emergency Medical Services, challenged the City’s imposition of deductions equivalent to city income tax. The Court of Appeals held that Section 1127, which requires a pre-employment agreement for such payments, does not apply to these involuntarily transferred employees because they did not seek City employment nor sign such an agreement. The court emphasized that the statute is intended for new employees voluntarily seeking employment with the city.
Facts
The petitioners in Ganley were former members of the New York City Transit Authority and Housing Authority Police Departments who resided outside the City and were involuntarily transferred to the New York City Police Department via mergers in April 1995. Petitioners in Hill were Emergency Medical Services personnel formerly associated with the New York City Health and Hospitals Corporation (HHC). These employees were transferred to the New York City Fire Department in March 1996. The City sent notices to the transferred employees stating that their acceptance of employment with the City constituted an agreement under Section 1127 to pay the equivalent of City income tax if they were non-residents. The employees protested these deductions.
Procedural History
In Ganley, the Supreme Court dismissed the petition and complaint, determining that the employees confirmed their agreement to abide by Section 1127 by accepting employment with the City after notice. The Appellate Division modified by issuing a declaration against petitioners, and as so modified, affirmed. In Hill, the Supreme Court enjoined enforcement of Section 1127 and directed the City to reimburse petitioners, distinguishing Ganley based on the employees’ prior exempt status with HHC. The Appellate Division reversed, relying on its decision in Ganley. The Court of Appeals consolidated the cases and certified questions from the Appellate Division regarding the propriety of its orders.
Issue(s)
Whether Section 1127 of the New York City Charter applies to non-resident employees involuntarily transferred from public benefit corporations or authorities to City agencies, requiring them to pay the equivalent of City income tax.
Holding
No, because Section 1127 envisions a voluntary, pre-employment contract between a new employee and the City, which is not present in the case of involuntary transfers.
Court’s Reasoning
The court reasoned that Section 1127 explicitly applies to “every person seeking employment with the city.” The statute intends to equalize take-home pay between resident and non-resident City employees, encouraging City residency. The Court emphasized that the petitioners did not “seek City employment; nor did they sign an agreement with the City. Rather the City unilaterally merged them into its workforce.” The court rejected the argument that cashing paychecks constituted a waiver of their rights, noting that petitioners protested the deductions. The Court distinguished the situation from a voluntary acceptance of employment, stating, “To suggest that they were required to quit their employment to protect their rights ignores the obvious.” The court cited Matter of Legum v Goldin, 55 NY2d 104, emphasizing that Section 1127 envisions a pre-employment contract. The Court also cited General Motors Acceptance Corp. v Clifton-Fine Cent. School Dist., 85 NY2d 232, 236, regarding the lack of acquiescence due to the protests. Therefore, the City could not impose the non-resident deductions upon the petitioners.