New York Law Review

Tag: public employment law

  • Matter of Committee of Interns v. NYC, 87 N.Y.2d 419 (1995): Arbitrability of Indemnification for Public Employees

    Matter of Committee of Interns and Residents v. New York City, 87 N.Y.2d 419 (1995)

    A contractual agreement to arbitrate disputes between a municipality and its employees is enforceable unless a statute, decisional law, or public policy precludes arbitration of the specific subject matter.

    Summary

    This case concerns whether the City of New York must arbitrate a dispute over its duty to defend a resident physician, Anyakora, in a malpractice suit. Anyakora allegedly refused to treat a woman in labor, leading to disciplinary action, criminal charges, and a civil suit. The union, Committee of Interns and Residents, sought arbitration based on a collective bargaining agreement requiring the City to provide malpractice insurance. The City argued that General Municipal Law § 50-k and public policy prohibit representing or indemnifying an employee facing criminal charges for the same conduct. The Court of Appeals held that arbitration was permissible because no statute or public policy explicitly prohibits arbitrating the City’s obligation to provide insurance coverage under the collective bargaining agreement. The court emphasized that any potential conflict with public policy could be addressed by the arbitrator when fashioning a remedy.

    Facts

    Peter Anyakora, a resident physician at Harlem Hospital, allegedly refused to admit, examine, or treat a woman brought in by ambulance in active labor.
    Despite a direct order from the hospital administrator, Anyakora did not provide treatment, and the patient gave birth in the admitting room attended only by EMS personnel.
    Anyakora faced disciplinary charges from the hospital and criminal prosecution under Public Health Law § 2805-b (2) (b).
    The patient, Charlesetta Brown, sued Anyakora for medical malpractice, breach of statutory duty, and intentional infliction of emotional distress.
    Anyakora requested the City to represent and indemnify him in the civil suit, citing the collective bargaining agreement between his union and the New York City Health and Hospitals Corporation.
    The City denied the request, citing General Municipal Law § 50-k, which limits the obligation to defend and indemnify when the employee’s conduct violates disciplinary rules.

    Procedural History

    The union filed a grievance alleging the City’s refusal violated the malpractice insurance provision of the collective bargaining agreement.
    After the grievance was denied, the union filed a notice of arbitration and commenced a CPLR article 75 proceeding to compel arbitration and stay the civil action.
    The City moved to dismiss and for a permanent stay of arbitration, arguing public policy and General Municipal Law § 50-k prohibit representation/indemnification when an employee faces criminal charges for the same conduct.
    Supreme Court rejected the City’s motions and directed immediate arbitration.
    The Appellate Division unanimously affirmed.

    Issue(s)

    Whether a dispute over a municipality’s duty to defend and indemnify a public employee in a civil action is arbitrable when the employee faces criminal charges for the same underlying conduct, given a collective bargaining agreement requiring such indemnification.

    Holding

    Yes, because no statute, decisional law, or public policy prohibits arbitration of the dispute over the City’s obligation to provide malpractice insurance coverage to its employee under the terms of the collective bargaining agreement.

    Court’s Reasoning

    The Court outlined a two-part inquiry to determine arbitrability: (1) whether arbitration is authorized under the Taylor Law for the subject matter; (2) whether the arbitration clause includes the subject area. (Matter of Acting Supt. of Schools [United Liverpool Faculty Assn.] 42 NY2d 509, 513).
    The court emphasized that arbitration is permissible unless a statute, decisional law, or public policy prohibits it. The court distinguished between situations where granting any relief would violate public policy and where only the requested remedy would do so. In the latter, courts should not preemptively intervene (Matter of Port Wash. Union Free School Dist. v Port Wash. Teachers Assn., 45 NY2d 411, 417).
    The Court rejected the City’s argument that General Municipal Law § 50-k sets the outer limits of its duty to defend, noting that the statute explicitly states it should not impair other rights to defense or indemnification (General Municipal Law § 50-k [7], [9]).
    The court noted that the City’s policy arguments were directed at the specific relief sought (representation) and not the underlying arbitrability of the insurance coverage issue. Any policy concerns can be addressed by the arbitrator when fashioning a remedy. The court stated, “[S]hould the arbitrator’s exercise of remedial discretion end in perceived policy conflicts, review by the courts will not have to rest on speculation or assumption” (id., at 419).
    Since the collective bargaining agreement provided for malpractice insurance and no statute prohibits such coverage as a condition of employment, and the arbitration clause broadly covered disputes over contract interpretation, the Court concluded that the dispute was arbitrable.

  • Matter of Derle v. Board of Fire Comrs., 40 N.Y.2d 224 (1976): Outside Earnings Offset Reinstatement Pay

    Matter of Derle v. Board of Fire Comrs., 40 N.Y.2d 224 (1976)

    When a public employee’s termination is deemed excessive and reduced to a suspension, outside earnings during the period exceeding the suspension may be deducted from back pay to prevent a windfall, especially when the initial finding of misconduct is upheld.

    Summary

    A New York City fireman, Derle, was dismissed for misconduct involving soliciting fees and making false statements. While the courts upheld the finding of guilt, they deemed the dismissal too harsh and reduced it to a six-month suspension. The subsequent judgment stipulated back pay, minus outside earnings. Derle sought to eliminate the deduction of outside earnings, arguing he was entitled to full back pay after the suspension period. The Court of Appeals held that deducting outside earnings from the back pay beyond the suspension period was appropriate to prevent Derle from profiting from his misconduct, which was a breach of public trust.

    Facts

    Derle, a New York City fireman, faced charges in February 1969 for unlawfully soliciting fees, recommending a contractor for building violations, and lying about his income sources. After a hearing, he was found guilty of all charges and dismissed from the fire department.

    Procedural History

    Derle initiated a CPLR article 78 proceeding challenging his punishment. Special Term vacated the fire commissioner’s determination, finding the punishment excessive, and remanded the case. The Appellate Division modified the judgment to a six-month suspension without pay. The New York Court of Appeals affirmed this modified judgment. Special Term then entered a judgment for back wages owed to Derle minus any wages earned in outside employment during the period. Derle’s motion to resettle the judgment to eliminate the deduction for outside earnings was denied at Special Term, but the Appellate Division reversed this decision based on precedent. The Court of Appeals then reversed the Appellate Division’s order, reinstating the original Special Term order.

    Issue(s)

    Whether outside earnings should be deducted from a public employee’s back pay when a dismissal is reduced to a suspension, particularly when the underlying finding of misconduct is upheld.

    Holding

    Yes, because while the employee is entitled to be made whole for the period beyond the suspension, he should not profit from serious acts of misconduct affecting a public trust.

    Court’s Reasoning

    The Court distinguished this case from previous cases (Fitzsimmons v. City of Brooklyn and Kaminsky v. City of New York) where the departmental findings of misconduct were overturned. In Derle’s case, the finding of guilt was sustained. The court emphasized that only the *measure* of punishment was affected. Allowing Derle to retain outside earnings would create a windfall, which is inappropriate considering his breach of public trust. The court supported its decision by noting that Section 77 of the Civil Service Law permits such deductions. Although not directly controlling, the court referenced Matter of Lezette v. Board of Educ., Hudson, City School Dist. to further justify the principle that outside earnings should be considered. The court reasoned that the focus should be on ensuring the employee is made whole, but not unjustly enriched due to their own misconduct. The Court stated, “While the petitioner is entitled to be made whole for the period beyond the six-month suspension, he should not reap a windfall for serious acts of misconduct affecting a public trust.” There were no dissenting or concurring opinions.