Charter Schools are Not Subject to Prevailing Wage Requirements

In a reversal of Judge Lynch's (Albany County Supreme Court) declaratory judgments both entered May 30, 2008, the Appellate Division, Third Department issued a decision yesterday that held New York's charter schools are not "public entities" as that term is defined and used in Article 8 of the New York Labor Law.

As such, in New York, charter schools are not required to pay prevailing wages on its improvement projects. It's no surprise that the Charter School Association sought declaratory judgment on this matter as it became confused after receiving two opposing opinion letters from the Department of Labor on this very issue. Originally, DOL issued an opinion letter in June, 2000, which set forth that charter schools were not subject to the prevailing wage statute. In August, 2007, DOL completely changed its opinion to state that charter schools are subject to Article 8 of the Labor Law and that it would begin enforcing prevailing wage requirements for bids advertised after September 20, 2007. The change opinion is assumed to have occured as a result of the amendment to the Labor Law statute that set forth prevailing wage must be paid not only when a public entity is the direct party to the contract (pre-2007 amendment), but to "any contract for public work entered into by a third party acting in place of, on account of and for the benefit of such public entity pursuant to any lease, permit or other agreement between such third party and the public entity." Labor Law §220 L. 2007, ch 678, §5.

While arguments were made that the charter schools entered into an agreement with a public entity (i.e., the charter agreement). The appellate division (after reviewing the legislative history of the 2007 amendment) threw out this argument. The Appellate Division specifically held that, "the prevailing wage provisions of Labor Law article 8 are inapplicable to the projects undertaken by the [charter schools]...."

Click the link for the complete decision at the Appellate Division's official website: In the Matter of New York Charter School Assoc. v. M. Patricia Smith, ___ A.D.3d ___ (3d. Dep't 2009).

You Can Be Terminated if You are a Republican!

Powers v. Richards, 549 F.3d 505 (C.A. 7, Dec. 2, 2008)

There was a bit of political maneuvering and jockeying going on in Illinois. Nearing the end of a Republican governorship, several politically-held jobholders came up with a plan to keep their jobs after the newly elected Democratic governor took office. The plan was simple - resign a few weeks ahead of the termination of the 4-year contract and then sign a new 4-year employment contract. The personnel forms were signed by the Deputy Director of the Illinois Department of Central Management Services.

The plot thickens! A few weeks after Mr. Powers resigns Republican employee contracts, he gets appointed Executive Secretary of the Illinois Civil Service Commission (which is responsible for hearing appeals of state employees on things like terminations, transfers and violations of the personnel code.)

Shortly thereafter, in 2003, after Democratic Governor Rob Blagojevich (Mr. "pay me for Obama's seat") took office, his administration began an investigation into the "no-cut employment scheme" and concluded that Powers played a key role. Powers was then terminated after he admitted to inappropriately signing personnel forms.

Powers then sued Blagojevich and other state officials under 42 U.S.C. 1983, claiming that he was fired for his political affiliation and that he was denied procedural due process due to the lack of a pre-termination hearing. The District Court (C.D. Ill.) granted summary judgment to all defendants and Powers appealed.

The Court of Appeals noted with some surprise that, on appeal, Richards did not deny that Roberts was fired for being a Republican. However, it held that given his particular job, his rights had not been violated. The First Amendment did not prohibit his termination due to party affiliation because, it said, some jobs can only be done correctly when the employee supports the administration’s ideas about policy and governing. The test was whether the position required the employee to exercise political (as opposed to professional) judgment by crafting policy.

New York's New Power of Attorney Language

As promised, the following link will direct you to the required language that will become effective March 1, 2009. http://www.nysba.org/Content/NavigationMenu23/PowerofAttorneyLegislation/PowerofAttorneyLegislation.pdf

Domestic Relations Orders - Language must work or divorced spouse still gets the goods

A new U.S. Supreme Court decision concerning Domestic Relations Orders and instilling a ton more liability on the attorney representing the pension-holder. Here's the link to a great summary of the case: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1336350

"In sum, the Supreme Court decided that if a voluntary disclaimer in a domestic relations order ("DRO") by the divorcing spouse of an ERISA pension plan participant did not comply with the terms of the governing plan documents, the plan could pay the death benefit only to the participant's designee, who was the former spouse and disclaimant." (Id.)

New Power of Attorney Forms for N.Y.

Commencing on March 1, 2009, New York will be using a new power of attorney form. The last form was revised in 1994. The new 2009 version contains numerous definitions and revisions. I do not have a link to the site yet, but will post one soon.

Fire District Has Standing...

In an unpublished decision, dated January 19, 2009, Judge Stephen Ferradino (Saratoga County, Supreme Court Justice) held that a fire district (a/k/a political subdivision) has standing to challenge a planning board decision.

This story actually starts about 2 years prior when the Town of Providence was drafting a local law that would require new subdivisions to install water points in order to account for the lack of proper water sources for use in fighting fires. The Providence Fire District was involved in the process of drafting the proposed law. In the end, the local law actually required the Planning Board to request an "advisory opinion" from the fire district on any "major subdivision" regarding the size of the water point needed for a proposed subdivision and that any required water point would be one that complied with NFPA 1142 (Standard on Water Supplies for Suburban and Rural Fire Fighting). Unfortunately, it appears that the Town's inclusion of an advisory opinion for the fire district may have been illusory.

Fast forward to 2008, and the first major subdivision is put before the Planning Board. The fire district provides its advisory opinion - the 10 (2-story) home subdivision requires a 20,000 gallon water point in order to provide an adequate water supply. The applicant sought its own expert that held a 7,500 gallon water point is sufficient. Both the fire district and the applicant's expert provided a different interpretation of the NFPA. The planning board decided to take the opinion of the applicant's expert over its own fire district.

The fire district felt so strongly about the need for a 20,000 gallon water point that it commenced an Article 78 proceeding against both the planning board and the applicant. During the conference with the Judge, many questions were posed to the petitioner regarding why the fire district should be granted standing. It seemed like a daunting hurdle. No cases on point were found.

However, in the Providence Fire District v. Providence Planning Board (Sup. Ct., Saratoga Co. 2009) decision, Judge Stephen Ferradino found that the fire district had standing to challenge decisions pertaining to the water point. Judge Ferradino found that the fire district's concerns were unique from the general public. Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761 (1991). The fire district was uniquely concerned about the safety of its fire fighters in the face of an inadequate water supply supply.

While the fire district lost its petition on the merit, it is clear that the planning board may face another challenge (with no argument available on standing) if it continues to approve major subdivision applications with inadequate waterpoints.