DEALING WITH PROBLEM ADULTS - LEGAL RIGHTS

When one encounters Adult or Elder Abuse, here are some recommendations from the NYS Office of Children & Family Services:

"For the healthcare community

Laws - In New York State, Kathy's Law and the Family Protection and Domestic Violence Intervention Act of 1994 are used by those in the health care field in aiding in the prevention of adult abuse. Kathy's Law applies to nursing homes and home health care agencies, and increases penalties for caregivers guilty of injury to incompetent or physically disabled adults age 60 and older. The Family Protection and Domestic Violence Intervention Act of 1994 requires hospitals and clinics to provide the Victim's Rights Notice to all suspected or confirmed adult domestic violence victims

Helping the Victim - Victims should be made aware of the following:

•Assault is a crime
•Abuse will likely increase if help is not sought
•A safety plan is needed to get away from the abuser if needed
•The abuser is responsible for the violence, not the victim
•The abuser may be imprisoned if the violence increases or continues
•Victims have the right to an Order of Protection against their abusers in criminal or family court

Documentation - Healthcare workers must record abuse claims as follows

1.Reports by the victim, including their actual words about verbal, physical or sexual assaults, pain from injuries, financial abuse, and any use of weapons
2.Physical examinations including a rape kit, if warranted
3.Photographs taken with the victim's consent before wounds are treated, unless this would affect the outcome of client care
4.Material evidence from the victim's body may be needed in court and should be carefully preserved
5.Collateral contacts with family members, friends, or social workers familiar with the victim should be documented, with the victim's consent.
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For the financial community

Suspicious Banking Activities - The following should be watched for as signs of financial exploitation

•Unusual volume of banking activity
•Banking activity inconsistent with customer's usual habits
•Suspicious signatures on checks or other financial documents
•Sudden increases in debt the customer appears unaware of
•Funds withdrawn by care giver with no apparent benefit to client
•Bank statements and cancelled checks no longer sent to customer's home

Steps To Prevent & Intervene -

•Speak privately with customer about suspicious transactions
•Check authorization/documentation for someone else to act for customer
•If necessary, ask customer to speak with security
•Provide Confidential Crime/Financial Exploitation Alert Form
•Save any photographic evidence for law enforcement
•Notify security and/or law enforcement immediately if customer appears to be in danger
•If customer appears to be confused, increasingly frail, or neglected, notify Protective Services for Adults, Office for the Aging, or other abuse prevention programs

For the law enforcement community

The law enforcement community must work with social service departments, financial institutions, and health care professionals in the investigation and prevention of adult abuse. The New York State Domestic Violence Consortium has developed an acronym that also applies to the abuse, mistreatment and neglect of impaired and adults

R A D A R

Respond to a domestic incident as a potential crime
Ask direct questions
Document your findings and decisions
Assess for safety
Review legal options and make referrals"

DEALING WITH PROBLEM ADULTS - LEGAL RIGHTS

The next thing to be aware of when dealing with problem adults are the issues of adult and elder abuse. As stated by the New York State Office of Children & Family Services:

"Abuse is a problem we all seem to be aware of when it comes to children, the use of dangerous substances, or the ways in which decisions made can lead to suffering, pain, and loss for ourselves or those around us.

But what about Adult & Elder Abuse?

When we talk about adult and elder abuse, we're talking about family. Your family, my family, the family next door, the family across town. Someone you know might be suffering from physical, emotional, or sexual abuse. The kindly neighbor next door who trims your hedges might be a victim of financial exploitation by a family member, caretaker, or other close associate.

One out of every 14 Americans over the age of 60 may be suffering from some sort of abuse. And for each case of elder abuse reported, five more cases go unreported. It's hard to imagine that those who have protected and cared for us for all these years may now need our care and protection, but it's true.

New York State's Protective Services for Adults program, provided through local county departments of social services, has been created by law to aid in the protection of impaired adults over the age of 18 who may be falling victim to abuse.

We are here to aid and protect, but it all begins with you. Protective Services for Adults can do nothing to help if they are not notified......

PSA clients are among the most debilitated and neglected members of the community: the frail elderly, the mentally ill, the mentally retarded and the abused and exploited. These persons are often not known to any agency or have refused services and are isolated from family and friends. The need to provide help for these individuals will continue to grow as our population ages and family ties become strained by distance and the burden of chronic illness."

DEALING WITH PROBLEM ADULTS - LEGAL RIGHTS

This is an issue where someone always asks a lawyer "what can I do". Recently, I was consulted by a parent who had a problem with an adult child living with the parent. Let's first look at the emotional side of this with an article I quote from:

"Dealing with your Adult Child's Struggles
by Stephen Bly

When your adult child can't seem to get his act together and take responsibility for his life, some common reactions surface. Here's how to deal with them:

First, it's important to set aside your emotions.

Two common emotions – resentment and failure – fight to possess your thoughts during times of stress. You will feel resentment: Why is my child doing this to me? After all we did for her, she is self-centered and spoiled. She is going her merry way, and we have to pay the price.

And you will feel failure: If we had done the job right the first time, if we'd sent him to military school, if we hadn't sent him to military school, if I'd helped him with his math, if I'd been there when he need me, if we'd insisted that he not date that girl, if we hadn't moved during his senior year, if…if…if…

Set realistic goals.

Struggling children do not always move back home, but they all need to find a new direction in life. So with you and your spouse advising, help them set realistic goals.

A realistic goal is one that all of you believe is within reach. A realistic goal is also measurable. For example, when Richard and Betty's son, Andy, moved back to his parents' home with his children after his wife left them, he set three goals for himself: He would quit drinking, he would take a nine-month vo-tech course in welding, and he and his boys would be in their own home in 18 months. This plan was realistic and measurable.

Plan how to reach those goals.

Goals are not reached overnight. Nor do they happen without plans.

If your daughter needs to get her own place, don't simply say, "Well, Darci is going to move out whenever she finds the right house." Instead, calculate the cost of rental, lease, or purchase. (Include first and last months' rent, cleaning and security deposit, moving cost, or other expenses.) Then estimate how much your daughter can contribute per month to that fund. If it will take five months for her to save enough money, Darci can set a goal: In six months, she will be settled in her own residence.

Agree how you can help.

What do you owe your adult children? Probably nothing. For better or worse, you raised them to adulthood. They are responsible for their own decisions. To clam that their present difficulties are the parents' fault only hinders their progress toward independence.

But you do have an investment of love, and most times you will want to help your struggling adult child get reestablished. So discuss exactly what you see your role to be.

Be specific. Here are a few examples:

•"We will allow you to live at home for two years. You pay for room and board, at $300 per month."
•"We will pay one-half of your rent until the retraining program is completed."
•"We will watch the grandchildren after school every day for one year."
•"We will allow you to use the old pickup until next September so you can save to buy a vehicle."

Set specific, objective points of measurement.

Don't wait until the very end to find out if you reached your goal. Decide on a way to evaluate progress and redefine goals and roles if necessary. Set a date, such as, "On the first of December we will evaluate this arrangement." And establish some performance standards for measurement. If your child is to finish college in two years, for instance, at the end of six months he should have completed 15 or more units of credit. If he is saving to get his own place, he needs $1,000 saved by January 1.

Explain your position if goals are unmet.

Explain what your position must be if your child refuses to reach those goals – not merely fails to reach, but refuses to reach. Sometimes goals are unreachable. Sometimes circumstances truly prevent goals from being reached. Some goals are dated and lose their value with time.

Fulfill your part of the arrangement.

It might mean working overtime, going back to work, giving up golf, or putting up with a backache every night from lifting the grandkids, but fulfill your part of the arrangement. If you fail to keep your promise, you will spend the rest of your life wondering what it could have been like if you had stuck to the agreement.

Accept the consequences.

No plan, good or poor, always succeeds. Maybe your adult child will suddenly get a life, straighten out his family relationships, settle down, and live happily ever after. Or he may bomb out again and again and again. Most adult children will probably end up somewhere in between.

Excerpted from Once a Parent, Always a Parent by Stephen Bly, a Focus on the Family book published by Tyndale House Publishers. Copyright © 2006, Focus on the Family. All rights reserved. International copyright secured."

UNLICENSED HOME CONTRACTORS

I have had this experience personally: an unlicensed home improvement contractor in New York City, Nassau and Suffolk County, and other surrounding counties, cannot sue homeowners for non-payment of its bills for services rendered or file a mechanic's lien, etc. This law was enacted to protect homeowners from unscrupulous construction contractors and its solicitors. Even where the homeowner knew that the contractor was unlicensed prior to the performance of the work, courts have still prevented the contractor from suing for payment, consistently holding that contracts made by unlicensed home improvement contractors are illegal and unenforceable. To determine whether a home improvement contractor is licensed, contact your county's Department of Consumer Affairs.

But what if you paid the contractor some money upfront? I made an upfront payment and no work was performed (it was a small job, only $300 was involved, but this proves that even attorneys make foolish mistakes). Certainly, one can sue in small claims or another court for a return of payment. But what are the chances of collecting on a judgment? Defendants who operate a business illegally usually hide assets, thus making enforcement of a judgment nearly impossible. What I did was contact the District Attorney's office and filed a complaint for operating a home improvement business without a license, a misdemeanor. The Nassau County District Attorney arrested the contractor and made a plea bargain deal (this took over a year) in which the contractor agreed to return my money - which the contractor never did. In fact, I am assuming that after the plea bargain was made, the contractor moved to another location as the District Attorney, after I advised them that the plea bargain payment deal was never complied with, advised me that they could not locate the contractor. But here is a story from July 21, 2009, North County Gazette:

"NASSAU COUNTY—A five-week investigation into unlicensed contractors in Nassau County has resulted in the arrest of 42 individuals.

Four face felony charges, including third degree grand larceny for allegedly stealing thousands of dollars from homeowners for improvements that were either not finished or never even started.

Investigators also rented a home in Nassau County and called in unlicensed contractors to perform “renovations.” The two-week operation yielded 12 charges of Operating a Home Improvement Business without a License, a misdemeanor, and the contractors’ vehicles were seized under the County Forfeiture Law. Twenty-six contractors were charged with the same misdemeanor after an investigation into complaints filed with Consumer Affairs.

The arrests were part of a multi-county enforcement sweep also executed in New York City and Westchester County.

“When you hire an unlicensed contractor, you’re rolling the dice,” Rice said, adding that consumers should thoroughly research home contractors before someone is hired. “Our homes are our most valuable financial asset and it is essential we entrust them to licensed, experienced professionals. Don’t let your American Dream become a nightmare.”

Facing felony charges are:

Derek Armstrong, 47 of Hempstead, was charged with second degree criminal possession of a forged instrument, falsifying business records and first degree offering a false instrument for. District attorney Kathleen Rice said Armstrong was hired by a Baldwin homeowner to do work on his home in 2005. Armstrong submitted the architect’s plans to the Town of Hempstead to obtain a permit, but the architect refused to work with Armstrong, who then put a different architect’s name and seal on the plans. The plans were also altered. He faces up to seven years in prison.

Edward Murphy, 42, of Wantagh, was charged with third degree grand larceny. Rice said Murphy was contracted to purchase backup generators for two group homes for autistic adults in Seaford and East Meadow. Murphy was paid $28,000, but never provided the homes with the generators or a refund. He faces up to seven years in prison.

John Napolitano, 47, of Hicksville, was charged with four counts of third degree grand larceny and first degree scheme to defraud. Rice said Napolitano defrauded four different homeowners of more than $113,000. Napolitano either took money and never performed any work at all or abandoned a project halfway through. One Long Beach homeowner had her entire kitchen demolished when Napolitano stopped work and didn’t refund her any money. He faces up to seven years in prison.

James Nichols, 46, of Rosedale, was charged with third degree grand larceny. Rice said Nichols received $47,500 from a homeowner to add an addition to his Elmont home. Nichols performed no work and did not refund the money. Nichols faces up to seven years in prison.

Charged with Operating a Home Improvement Business without a License in the house sting are Roberto Dopazo, 47, of Huntington; Donald Colucci, 57, of North Babylon; Jedidiah Irons, 22, of Oceanside; James Contrino, 33, of Oceanside; Debra Kaplan, 44, of Massapequa; George Brady, 55, of Queens; Manuel Vera-Munoz, 43, of South Farmingdale; Thomas Gallo, 48, of Levittown; Ronald Hinderhofer, 49, of Oceanside; Thomas Longo, 38, of North Merrick; Muzaffer Geyikgulo, 54, of Valley Stream; and Luis Saquipulla, 36, of Corona. All face up to a year in jail.

Working in conjunction with the Nassau County Department of Consumer Affairs, the following people were charged with Operating a Home Improvement Business without a License after complaints were lodged with Consumer Affairs by homeowners:

Thomas Gironda, 40, of Port Jefferson Station; Arthur Spero, 47, of Wantagh; Lionel Toby, 51, of Long Beach; Joseph Sarno, 69, of Bayside; Bohdan Kuzminskyy, 48, of Holbrook; Joseph Samaroo, 49, of Cedarhurst; Rod Darling, 41, of Hempstead; Christopher Martino, 39, of Lynbrook; Eladio Otero, 61, of Malverne; Yojin Choi, 44, of Great Neck; George Stern, 60, of Syosset; Nicholas Spano, 46, of East Meadow; Louis Hapst, 43, of Copiague; Ramadan Nela, 46, of Dix Hills; Russell Martini, 31, of Westbury; George Lopez, 40, of Oceanside; Edward Hoffman, 46, of Islandia; Anthony Delmaro, 37, of Deer Park; John Bradford, 44, of East Rockaway; Rulx Regala, 39, of Bohemia; Larry Field, 46, of Elmont; Christopher J. Galvin, 46, of West Babylon; Thomas Heaney, 42, of Farmingdale; Adolph Ford, 63, of Hempstead; Daniel Dallolio, 43, of North Bellmore; Joseph Sceppa, 39, of Commack. All face up to a year in jail."

UNEMPLOYMENT INSURANCE - DEFAMED BY EMPLOYER?

Here is an interesting case - what if Claimant claims he was defamed by Employer's claim of misconduct which was overruled during the ALJ hearing?

Alfred P. REEVES, Plaintiff, v. CONTINENTAL EQUITIES CORP. OF AMERICA, and Continental Corp., Defendants, 767 F.Supp. 469 (S.D. New York 1991)

Eikenberry Futterman & Schoolman, New York City (Stanley Futterman, of counsel), for plaintiff.

Vedder, Price, Kaufman, Kammholz & Day, New York City (Marc S. Wenger, of counsel), for defendants.

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, District Judge:

Plaintiff Alfred P. Reeves originally filed this action on June 23, 1989, asserting five claims for: (1) wrongful discharge under the federal securities laws; (2) wrongful discharge in breach of an alleged implied contract of employment; (3) severance benefits under New York law; (4) severance benefits accrued under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. ("ERISA"); and (5) unreimbursed business expenses under New York law. Defendants Continental Equities Corporation of America, and Continental Corporation ("Continental") were granted summary judgment on the first and fourth claims, arising under federal law, and the remaining claims were dismissed for lack of pendent jurisdiction. The Second Circuit affirmed the dismissal of the first claim based on lack of standing to assert federal securities law violations.1 It vacated and remanded for further findings claims brought under the purview of ERISA, because a determination was made that issues of fact existed which were to be resolved pertaining to the reasons why Reeves was discharged from Continental's employ. No mention was made by the Second Circuit regarding the pendent state claims. Reeves v. Continental Equities Corp., 912 F.2d 37 (2d Cir.1990).

On October 5, 1990, Reeves served an Amended Complaint claiming: (1) wrongful discharge under the federal securities laws; (2) severance benefits accrued pursuant to ERISA;2 (3) wrongful discharge in breach of an employment contract under New York law; (4) defamation;3 and (5) unreimbursed business expenses. Additionally, Reeves makes a demand for a jury trial and requests punitive or exemplary damages as to all claims. Continental now moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss Reeves' third, fourth and fifth claims for failure to state a claim upon which relief may be granted. In the alternative Continental seeks dismissal of Reeves' three state law claims on the ground that the factual assertions therein are unrelated to the sole remaining federally based claim for relief, i.e. ERISA, and thus no basis for the exercise of pendent jurisdiction exists. Additionally, Continental moves for an order pursuant to Fed.R. Civ.P. 12(f), striking: (1) Reeves' jury demand as to his second claim; (2) his claim for punitive or exemplary damages as to his second and third claims; and (3) his entire first claim based on the Second Circuit's partial affirmance. Additionally, Continental seeks an order granting reasonable attorney's fees and costs incurred in connection with this motion.

STATEMENT OF FACTS

Continental is a registered broker-dealer under the Securities and Exchange Act of 1934, 15 U.S.C. § 78o (b)(8) ("1934 Act"). At all times relevant to this action, Continental was the principal underwriter, manager and distributor of the Continental Asset Management Funds ("the Funds"), which encompassed five mutual funds. Continental Equities was established as a new venture within the financial services group of Continental Corporation to accomplish the development of new investment products and distribution systems. Amended Complaint ¶¶ 6-8.

Reeves was hired in May of 1985 as Vice President of Compliance & Finance of Continental Equities. He was to act as the Chief Compliance Officer. Amended Complaint ¶ 10. It was his stated responsibility to assure that each day's business was properly recorded in the books and records of Continental Equities before the beginning of the next day's business. Reeves was also responsible for assuring that Continental adhered to and complied with all federal and state securities regulations. In addition, he had to be prepared on any given day to deal with a surprise audit by securities examiners from the Securities and Exchange Commission ("SEC"), National Association of Securities Dealers ("NASD"), or a state jurisdiction.

In August 1987, the SEC began an audit of Continental's mutual funds. At a hearing before the SEC, Reeves was questioned about possible illegal insider trading by officers and directors of the funds. Reeves was also questioned about Continental's practice of designating certain travel, lodging, and entertainment costs as marketing expenses charged to the funds, as permitted under SEC regulation. Amended Complaint ¶¶ 15-17. By letter, Reeves subsequently informed three directors of Continental that it may have committed violations of securities regulations, and that as Chief Compliance Officer, it was incumbent upon him to investigate areas of Continental's business to determine if any violations of securities regulations had occurred. Amended Complaint ¶¶ 19-21. In his letter, citing a conflict of interest, Reeves resigned his post as the Chief Financial Officer of the funds, although he remained in Continental's employ. In a second letter to the directors, Reeves stated that "there may be violations associated with the running of sales incentive programs during 1987, and I am commencing a review of the procedures and the practices that were followed." Amended Complaint ¶¶ 22-26.

Reeves was then summoned to a meeting with the chief of security, a member of the audit department of Continental's parent corporation, and an outside attorney who had represented Continental during the SEC investigation. Amended Complaint ¶ 27. At the meeting, Reeves was confronted with evidence that, in 1987, he had submitted two reimbursement claims with Continental for a single airline trip. Amended Complaint 29. Reeves was immediately suspended. Amended Complaint ¶ 30. An investigation ensued whereby it was found that Reeves had not engaged in any wrongdoing per se. Nonetheless, on June 29, 1988 Reeves was asked to resign. Amended Complaint ¶ 33. Upon refusing to resign, he was immediately discharged.

On August 1, 1988, Reeves requested a hearing on the denial to him of unemployment insurance benefits. A hearing was held before Administrative Law Judge Keal Kaufman on October 5, 1988 at which time Peter Noble, an official of Continental's Human Resources Department, testified. Judge Kaufman reversed the denial of unemployment insurance benefits, finding that Reeves had not engaged in misconduct. No appeal was taken from that ruling. Amended Complaint, ¶¶ 33, 36-37.

DISCUSSION

I. Breach of Contract

Reeves claims that although he was employed at-will, Continental had a termination policy set forth in an employee manual which stated the grounds for which an employee may be subject to dismissal. According to Reeves, that manual created an implied contract of employment because it assured continued employment as long as an employee did not transgress the manual's provisions. Reeves maintains that Continental breached that implied contract because it did not fire Reeves for any of the stated grounds as contained in the employee manual. Reeves thus claims that the termination policy in the employee manual precludes Continental from terminating him, even though he was an employee at-will, because he was fired for no apparent or stated reason or cause.

Under New York law, an at-will employee, "not engaged for a fixed term of employment," can have a "cause of action for breach of [an implied] contract against his employer" where he is discharged in the absence of the circumstances or the procedures specified in the employer's personnel handbook. Weiner v. McGraw-Hill Inc., 57 N.Y.2d 458, 460, 457 N.Y.S.2d 193, 194, 443 N.E.2d 441, 443 (1982); Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 334, 514 N.Y.S.2d 209, 211, 506 N.E.2d 919, 921 (1987) (employer has right to terminate at-will employee at any time for any reason or for no reason, unless limited by express agreement) (emphasis supplied). Continental concedes that Reeves satisfied all the elements of the state cause of action but one, namely, Continental avers that the provisions of the Manual upon which Reeves relies are not sufficiently "express" to sanction a finding of wrongful discharge of an at-will employee. At this juncture of the case, where all allegations of the complaint are deemed true, I must disagree.

The manual upon which Reeves relies, in pertinent part, states:

INVOLUNTARY TERMINATION—Employees are subject to termination for unsatisfactory performance, excessive absenteeism, or misconduct based upon the corresponding standards of Job Performance, Absenteeism, and Conduct. The Standards detail the prior warnings and documentation which are appropriate before termination is effective. Serious misconduct violations and unsatisfactory job performance due to inability to perform the job may result in bypassing corrective action steps ...

Amended Complaint, Exh. C.

Reeves claims that the language of this manual is sufficient to state a present state cause of action for wrongful discharge where employment is otherwise at will. In addition, Reeves alleges that he received neither a written warning nor probationary period, as provided in the manual, and that prior to his summary suspension, he had received nothing but praise. Specifically, Reeves alleges that he:

was aware of the Manual before and during his employment with defendant Continental Equities and relied upon what he understood to be its provisions regarding security of employment in resigning from his immediately previous position of employment [as chief financial officer] and in accepting and continuing his employment with defendant Continental Equities until the time of his suspension and termination.

Amended Complaint ¶ 57. Furthermore, Reeves' decision to initiate a compliance investigation of Continental's sales practices and prepare the required report for which he alleges he was fired does not appear to constitute grounds for discharge, according to the manual. Indeed, Administrative Law Judge Kaufman made a similar finding, that there was no misconduct that preceded Reeves' firing. As such, a question of fact remains as to whether Continental breached an implied contract with Reeves, who may have relied on Continental's employment manual to justify his accepting continued employment with Continental. Reeves has stated a common law claim for wrongful discharge sufficient to overcome summary dismissal at this point.

II. Defamation

Following Reeves' discharge from Continental's employ, it is alleged that Continental spoke privately to prospective employers of Reeves, informing them that Reeves "was discharged for misconduct ... indicat[ing] that [he] lost his job under circumstances reflecting poorly upon him in his trade or profession," and that as a result, he has been unable to obtain regular full-time employment in the securities industry. Amended Complaint ¶¶ 68-73.

Charges of libel and slander were formerly considered as vexatious in this circuit. Litigation for defamation was discouraged by a requirement that such contentions be set forth in considerable detail. Currently, the federal rules do not require such special pleading. Fed.R.Civ.P. 8; Geisler v. Petrocelli, 616 F.2d 636, 640 (2d Cir.1980). Accordingly, plaintiff's charges must be set forth in the form of a short concise statement detailing only that which is necessary to enable the defendant to respond. Geisler v. Petrocelli, 616 F.2d at 640. Under Rule 8(e)(1), the standards for sufficiency of the pleadings are liberal. Kelly v. Schmidberger, 806 F.2d 44, 46 (2d Cir.1986) ("test for complaint's sufficiency is whether it is detailed and informative enough to enable defendant to respond"). Continental avers that Reeves fails to meet the very liberal pleading requirements to make out a claim for defamation. I agree.

Reeves' sole allegation states that:

defendants have told prospective employers of plaintiff or their agents that plaintiff was discharged for misconduct, as defendants alleged to the New York State Department of Labor, or have otherwise indicated that plaintiff lost his job under circumstances reflecting poorly upon him in his trade or profession.

Amended Complaint ¶ 68.

While it is true that Reeves identifies the statements made to the New York State Department of Labor with the amount of specificity that his limited knowledge of those statements permits, he inadequately identifies when the statements were made. In addition, the statements specify neither who made the comments nor to whom they were made. On a motion for summary dismissal, the issue of sufficiency of a defamation claim is "not whether the court regards the language as libelous, but whether it is reasonably susceptible of such a construction. `The court may not ... interfere with the jury's role by treating as nondefamatory a statement that a reasonable juror may fairly read in context as defamatory.'" Kelly v. Schmidberger, 806 F.2d 44, 46 (2d Cir.1986) (quoting Sharon v. Time, Inc., 575 F.Supp. 1162, 1165 (S.D.N.Y.1983)). A reasonable juror in this case would not, in all fairness, be enabled to determine that Continental's statements of Reeves' misconduct in context were defamatory. Nor is there sufficient information contained in Reeves' Amended Complaint for Continental to adequately prepare a defamation defense.

Continental further argues that the dates that it allegedly defamed Reeves, as they appeared in the pleadings, were not stated with sufficient particularity to determine whether a claim for defamation was timely commenced under New York's one year statute of limitations. See New York Civ. Prac.Law & R. 215(3). I too have serious concerns as to whether the defamation claim was timely commenced. As such, this claim is not sufficiently particular to withstand a motion to dismiss at this juncture.

III. Striking Demands for Jury Trial and Punitive Damages

Continental requests that Reeves' jury demand should be stricken for it relates to his claim for severance benefits under ERISA and, by the great weight of precedent, there is no right to a jury trial in an action for benefits under ERISA.

While the Second Circuit has held that no jury trial is permitted in an action by pension fund participants against the fund's trustees for breach of fiduciary duty under § 502 of ERISA, the court never discussed whether ERISA provides for a jury trial in an action for benefits. Katsaros v. Cody, 744 F.2d 270, 278-79 (2d Cir.), cert. denied sub nom., Cody v. Donovan, 469 U.S. 1072, 105 S.Ct. 565, 83 L.Ed.2d 506 (1984). Moreover, the district courts of this circuit are split in terms of denying a jury trial in ERISA cases. Generally, where the claim is more equitable than legal, a jury demand is denied.

The cases for which a trial by jury was denied have typically consisted of claims for violations of fiduciary duties, for an accounting or other equitable claims. These claims have historically not been tried by juries. See Nobile v. Pension Comm. of Pension Plan for Employees of New Rochelle Hosp., 611 F.Supp. 725 (S.D. N.Y.1985) (jury trial denied for claim brought pursuant to ERISA §§ 1021, 1022, 1024(b) for failure to disclose or furnish plaintiff with proper information); Gardella v. Mutual Life Ins. Co., 707 F.Supp. 627 (D.Conn.1988) (claim for recovery of benefits due to breach of fiduciary duty is not analogous to legal action for breach of contract but rather to action by a beneficiary against trustee under law of trusts which is viewed as equitable in nature).

However, a claim for damages for nonpayment of benefits is essentially legal in nature and therefore plaintiff is entitled to a jury trial. Abbarno v. Carborundum Co., 682 F.Supp. 179, 181-82 (W.D.N.Y. 1988); see also, Vicinanzo v. Brunschwig & Fils, Inc., 739 F.Supp. 882 (S.D.N.Y. 1990) (although ERISA makes no express provision for jury trials, Congress implies a right to a jury trial arising in purely contractual cases from fact-oriented issues.) The issue in this case is somewhat clouded. It is unclear whether Reeves' plea for benefits arises purely out of a contract theory or whether Continental breached some fiduciary duty to Reeves while he was in Continental's employ. In the interest of justice and judicial economy, this question can easily be deferred until such time as further discovery is conducted on this issue. Moreover, it is common for courts to try both equitable and legal issues in one proceeding, reserving some for determination at the bench and others for the jury.

Similarly, punitive damages may be available in an action for severance benefits under § 502 of ERISA, 29 U.S.C. 1132, for the Supreme Court has not yet decided whether punitive damages may be recovered. Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 144 and n. 12, 105 S.Ct. 3085, 3091 and n. 12, 87 L.Ed.2d 96 (1985) (no punitive damages may be recovered in an action against a plan fiduciary under ERISA's § 409, 29 U.S.C. § 1109.) The question of whether punitive damages will be permitted in this case will abide to a later date.

Reeves' claim for punitive damages is stricken with respect to his Third Claim, however, because under New York law, punitive damages may not be awarded in breach of contract actions. Garrity v. Lyle Stuart Inc., 40 N.Y.2d 354, 358, 386 N.Y.S.2d 831, 833, 353 N.E.2d 793, 795 (1976). Although Reeves alleges that Continental's breach of employment agreement was willful and malicious, New York courts require a showing of a "fraud `aimed at the public generally', evincing a `high degree of moral turpitude,' and demonstrating `such wanton dishonesty as to imply a criminal indifference to civil obligations.'" Durham Indus. Inc. v. North River Ins. Co., 673 F.2d 37, 41 (2d Cir.) (quoting Walker v. Sheldon, 10 N.Y.2d 401, 405, 223 N.Y.S.2d 488, 491, 179 N.E.2d 497, 500 (1961)), cert. denied, 459 U.S. 827, 103 S.Ct. 61, 74 L.Ed.2d 64 (1982). Reeves' theory of breach of an implied contract arising from the language in an employment manual wholly fails to meet this exacting standard.

Finally, Continental asks that paragraphs 38-42 of the Amended Complaint be stricken on the ground that these allegations are immaterial since claims arising under the Federal Securities Laws were dismissed by this court and that decision was later affirmed by the Second Circuit. These allegations, however, are not wholly immaterial to the issues remaining in the case and as such they withstand this motion to strike.

Pendent jurisdiction will be exercised over Reeves' state law claims. The state claims at bar derive from a common nucleus of operative fact and would ordinarily be tried in the same proceeding. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (test for determining whether state claims are pendent to federal ones is whether there is a common nucleus of operative fact and likelihood that the state claims would be entertained in same proceeding as the federal claims). Moreover, it is within the sound discretion of the court to permit plaintiff's state claims to be tried in one forum. Perez v. Ortiz, 849 F.2d 793, 798 (2d Cir.1988). Thus, Reeves' state claims are sufficiently related to be tried in one case before me.

For the foregoing reasons, Continental's motion is granted in part and denied in part. The First cause of action is hereby dismissed in its entirety. The Fourth cause of action for defamation is dismissed as well. The Second, or ERISA, cause of action survives and all remaining state causes of action, except for the Fourth, survive as pendent thereto. In addition, Reeves' demand for a jury trial on the claim for severance benefits survives at this juncture but Continental will be allowed leave, after sufficient discovery is conducted on the issue, to renew its motion to strike a jury trial with regard to ERISA. Reeves' demand for punitive damages is stricken as to his Third cause of action only. Continental may renew the motion to strike the demand for punitive damages at a later stage in the proceedings. Paragraphs 38-42 of the Amended Complaint survive as well.

SO ORDERED.

---------------

Notes:

1. Reeves' first cause of action reinstates claims arising under the Federal Securities laws even though the Second Circuit affirmed my dismissal of those very claims. Therefore, that cause of action is subject to summary dismissal without further explanation at this juncture.

2. Reeves is dropping the state law contract claim for severance benefits which is no longer necessary now that an ERISA claim has been reinstated.

3. The claim for defamation is made for the first time in the Amended Complaint.

UNEMPLOYMENT INSURANCE - FRAUD

Yesterday, an investigative reporter called me regarding my experiences with fraud in Unemployment Insurance matters. Later, I found this case most interesting, one of the few federal cases in New York federal courts dealing with the New York State Unemployment Insurance Law:


Dominick SAFFIOTI, Plaintiff, v. Martin P. CATHERWOOD as Industrial Commissioner of the State of New York, Defendant, 305 F.Supp. 989 (S. D. New York. April 9, 1969)

Dominick Saffioti, pro se.

Louis J. Lefkowitz, Atty. Gen. of State of New York, by Robert S. Hammer, Asst. Atty. Gen., for defendant.

MEMORANDUM

BONSAL, District Judge.

Plaintiff, Dominick Saffioti, instituted this action against Martin P. Catherwood, as Industrial Commissioner of the State of New York, seeking $100,000 damages for alleged violations of his constitutional rights, 42 U.S.C. §§ 1983, 1985.

Defendant Catherwood now moves, pursuant to Rule 56, F.R.Civ.P., for summary judgment in his favor; plaintiff also moves for summary judgment in his favor.

Back in 1962, plaintiff was receiving unemployment insurance benefits in the State of New York. The Department of Labor, Division of Employment Security (the Department) ascertained that while plaintiff was receiving these benefits, he was running advertisements in Newburgh, New York Newspapers soliciting offers on various parcels of real estate; the Department investigated further and discovered that plaintiff held a real estate salesman's license and was working for Joseph Parisi, a licensed real estate broker.

An administrative hearing was held on May 14 and June 20, 1963, at which plaintiff appeared with counsel; the Referee found that plaintiff had made false statements in connection with his application for unemployment insurance benefits, and that plaintiff was not totally unemployed, as required by statute, Labor Law, McKinney's Consol. Laws, c. 31, § 522. Plaintiff's unemployment insurance benefits were reduced, and plaintiff was required to pay back $1,025 as an overpayment.

On September 16, 1963, the Unemployment Insurance Appeals Board affirmed the decision of the Referee. Plaintiff applied to re-open the proceedings on two occasions and hearings were held on November 26, 1963, at which plaintiff voluntarily appeared without counsel, and on August 17, 1963, at which plaintiff appeared with counsel. On both occasions, the Referee's decision was adhered to.

Plaintiff appealed to the Appellate Division, Third Department, which unanimously affirmed the decision of the Appeals Board, 28 A.D.2d 1013, 283 N.Y.S.2d 738 (3d Dept. 1967). Leave to appeal to the Court of Appeals was denied, 21 N.Y.2d 641, 287 N.Y.S.2d 1025, 234 N.E.2d 715 (1967), and again denied on reconsideration, 21 N.Y.2d 643, 288 N.Y.S.2d 1026, 235 N.E.2d 926 (1968).

A review of the record of the various proceedings supports the finding that plaintiff, during the period he was receiving unemployment insurance benefits, was a licensed real estate salesman working for Mr. Parisi, and that he placed several ads in the local papers soliciting purchasers for parcels of real estate. The record further discloses that plaintiff is a carpenter by trade, who appears to have been befriended by Mr. Parisi and that his total income from his real estate activities during the period involved was $50, which he received as a commission on December 20, 1962.

As defendant concedes, "this is an unfortunate case, in that plaintiff was found to be disqualified from receiving unemployment compensation on the basis of having been engaged in unsuccessful, unremunerative attempts to sell real estate. Understandably, it must seem to a layman, a rather technical and unnecessarily harsh ruling." On the other hand, there was evidence to support the findings made by the Referee, and plaintiff sought and was provided review at the administrative level and in the New York courts, see Labor Law, §§ 621, 622, 624.

The Referee's findings having been affirmed at all stages, plaintiff is not entitled to further review in the Federal court.

In his papers, and at argument, plaintiff contended that he had been found guilty of fraud and misrepresentation, without due process of law and in violation of his constitutional rights. However, the record does not show that the Referee found plaintiff guilty of any crime, but only that he found that the plaintiff represented that he was totally unemployed when, in fact, he had this unremunerative connection with the real estate business. Therefore, plaintiff is not in the position of a defendant in a State criminal proceeding who contends that his Federal constitutional rights were violated.

The record indicates that plaintiff received due process in the State proceedings, in accordance with State law, see Labor Law, §§ 620-626. At most, he has been the victim of perhaps an overzealous interpretation of the New York Labor Law relating to unemployment insurance benefits, but he has alleged no violation of his Federal constitutional rights. Sarelas v. Sheehan, 326 F.2d 490 (7th Cir. 1963).

Finally, there is no jurisdictional basis for this court to entertain an action between a citizen of New York and the Industrial Commissioner of New York since there is no diversity of citizenship between the parties.

Since this court is without jurisdiction to entertain plaintiff's action, defendant's motion for summary judgment is granted and plaintiff's motion for summary judgment is denied.

Settle order on notice.

MORTGAGE FORECLOSURE - AVOID SCAMS

Once again, as a volunteer attorney at Nassau Supreme Court, for mandatory settlement conferences, I consulted with victims of mortgage modification scams. This is from an April 26, 2010 post from "preventloanscams.org:

"According to the New York Times the State Supreme Court in Manhattan issued a permanent injunction to stop Sal Pane, Jr. and his companies, Amerimod Inc. and the American Modification Agency, from continuing to scam homeowners looking for foreclosure assistance. Using well-known tactics of false promises and grandiose success rates, Pane scammed some 3,000 homeowners in the State of New York.

One of Pane's victims, Ms. Catus, a distressed homeowner learned of Amerimod during a local N.A.A.C.P chapter meeting. Facing a possible home foreclosure, Catus thought she "had found a godsend." Instead she found herself out $3,200 in upfront fees and no help with her loan. In fact, once the last installment of the arranged fee was automatically debited, the Amerimod representative never called Catus again.

The representative touted Amerimods work as having "a 95 percent success rate in saving people's home from foreclosure." Catus was unaware that only a small amount of its 3,000 clients actually received loan modifications. She was also unaware of the free housing counseling and loan modification services available to homeowners facing foreclosure.

Last week Pane was referred to the Manhattan criminal courts for investigation. Enforcement authorities are also moving on shutting down his operations in the state of Maryland. The Loan Modification Scam Prevention Network applauds the New York State Supreme Courts for its efforts and will continue to work with law enforcement partners to stop loan scammers from preying on distressed homeowners across the country."

MORTGAGE FORECLOSURE - MANDATORY CONFERENCE - MAY 23

These are the attorney guidelines given by the Nassau County Bar Association for volunteer attorneys at mandatory settlement Conferences. Again, I will be the volunteer attorney today for the 11am session:

"NCBA Foreclosure Consultation Clinic - Guide for Attorneys Questions

Have you missed any payments on your mortgage?

If so, how many?

Have you received a letter from the bank about your mortgage?

How many mortgages are there on your home?

Have you received a summons and complaint?

Have your received a court conference letter?

Have you contacted your bank to resolve or refinance your mortgage?

Do you want to stay in your home?

Do you owe any real estate taxes?

What is your income?

Are you employed?

How many people do you support?

Have you filed for bankruptcy?

•Options:

•Refer Nassau County Homeownership Center – HUD-certified housing counselor.

•Refer to Nassau/Suffolk Law Services – To be eligible for Nassau/Suffolk Law Services, clients need to be at 80% of the region’s median income, or approximately $71,000 for a family of four. Note: NSLS may turn to NCBA Mortgage Foreclosure Task Force for advice or –in some cases - representation

•Refer to Lawyer Referral Information Service (LRIS) – They will be given the name of 2 attorneys to call."

MORTGAGE FORECLOSURE - MANDATORY CONFERENCE - MAY 23

These are the Nassau County Bar Association's list of suggested free housing counselors for those homeowners to contact seeking loan modification, etc.:

"COUNSELING ORGANIZATIONS

Community Development Corp. Of L.I.
2100 Middle Country Road, Centereach, NY
(631) 471-1215

Hempstead Hispanic Civic Association
236 Main Street, Hempstead, NY
(516) 292-0007

Hispanic Brotherhood of Rockville Centre
59 Clinton Avenue, Rockville Centre, NY
(516) 766-6610

La Fuerza Unida, Inc.
1 School Street - Suite 302, Glen Cove, NY
(516) 759-0788

Long Island Housing Partnership
180 Oser Avenue - Suite 800, Hauppauge, NY
(631) 435-4710

Long Island Housing Services, Inc.
640 Johnson Avenue, Bohemia, NY
(516) 292-0400

Nassau County Office of Housing
40 Main Street - Suite B, Hempstead, NY
(516) 571-4663 or 572-0858

New York Mortgage Advocates
112 Spruce Street, Cedarhurst, NY
(516) 374-4564"

MORTGAGE FORECLOSURE - MANDATORY CONFERENCE - MAY 23

This Monday, again I have volunteered to offer pro bono representation of homeowners on behalf of the Nassau County Bar Association for the 11:00am session. This is the present checklist given to us by the NCBA:

"Residential Foreclosure Conference Part Checklist

1. Introduction: introduce yourself to the homeowner. Make it clear that you are not his/her attorney, but you are a volunteer attorney authorized to advise them and assist them with the foreclosure conference proceeding.

2. Housing/Legal counseling: Encourage the homeowner to seek legal counseling and housing counseling through one of the pro bono organizations.

3. Housing information: Ask the homeowner about the property: its location, who lives there and how long he/she has lived in the home. The financial crisis has hit the various areas of each county differently, and some areas have much greater depreciation than others. Further, the length of time in the home is a relevant factor, particularly in addressing whether there may be fraud involved in the mortgage. Ask the homeowner whether he/she resides in the property and whether it is a 1-4 family home.

4. Financial information: Ask the homeowner if he/she has been in contact with the lender, whether he/she has prepared a financial packet for the lender, whether he/she is in a loan modification or HAMP modification. Ask the homeowner the reason for the default in general terms, because this may affect the type of legal/housing counseling the person should obtain.

5. Legal information: Ask the homeowner if he/she received a 90-day notice, the Summons/Complaint or any other court documents besides the notice of foreclosure conference. Ask the homeowner if he/she has filed an Answer or responded to any motion practice. Encourage the homeowner to obtain legal advice as to whether he/she should file an Answer or oppose motions filed by the lender. Note: Appearance in the foreclosure conference does not generally constitute a waiver of defenses (see each county’s local rules) but filing motions papers could.

6. Foreclosure conference part: Explain to the homeowner how the conference part will proceed. Explain who the referee/JHO is and their role in the process; the lender’s attorney, and the documents that you should expect to receive from the lender at the conference. Organize the homeowner’s paperwork (if any was brought to the conference) so that the homeowner can explain to the referee/JHO his/her arguments and requests for the conference. Write down notes for the homeowner that would assist them in representing him/herself in the conference.

7. Post-conference discussion: Explain to the homeowner what happened at the conference. Again advise and encourage them to seek legal/housing counseling and to follow through with any directives given by the referee/JHO. Organize the homeowner’s necessary information into a one-page checklist, such as Courtroom number, referee/JHO name, lender’s name and representative, phone numbers to contact, next conference date, if any, and give them a checklist of what the homeowner is expected to do before the next conference."

MORTGAGE FORECLOSURE - SETTLEMENT CONFERNCE ON MAY 19

On May 19, I was a volunteer lawyer at Nassau Supreme Court for the Nassau County Bar Association for Mortgage Settlement Conferences for the 11:00 conferences. Again, very few homeowners appeared for their conferences. I did notice that several had attorneys but again, out of the calendar call of about 60, less than 10 appeared, and only about 4 consulted with me.

UNEMPLOYMENT INSURANCE - GOVERNMENT EMPLOYEES

As a follow up to the discussion on yesterday's blog, here is a sample case as to how the Appellate Division, 3rd Department is treating claims by certain government employees:

"In the Matter of the Claim of BRIDING NEWELL, Respondent. COUNTY OF NASSAU, Appellant; COMMISSIONER OF LABOR, Respondent. 9 A.D.3d 559, 779 N.Y.S.2d 287
(Appellate Division of the Supreme Court of the State of New York, Third Department July 1, 2004)

Appeal from a decision of the Unemployment Insurance Appeal Board, filed January 27, 2003, which ruled that claimant was eligible to receive unemployment insurance benefits because she was not employed in a major nontenured policymaking or advisory position within the meaning of Labor Law § 565 (2) (e).

KANE, J.

In 1998, claimant was appointed Acting Commissioner of Drug and Alcohol Addiction for Nassau County (hereinafter the employer). In 2000, the County Legislature confirmed her appointment as Commissioner. After claimant stopped working in that capacity in December 2001, she applied for unemployment insurance benefits. The Department of Labor found, among other things, that claimant was ineligible to file a valid original claim because her base period of employment entailed work "in a major nontenured policymaking or advisory position," which was excluded under Labor Law § 565 (2) (e). Following a hearing, the Administrative Law Judge disagreed and found claimant eligible to receive benefits. The decision was upheld by the Unemployment Insurance Appeal Board, resulting in this appeal by the employer.

Because claimant rendered services for a governmental entity "in a major nontenured policymaking or advisory position" (Labor Law § 565 [2] [e]), we reverse. It is conceded that the employer is a governmental entity and claimant's position as its Commissioner of Drug and Alcohol Addiction was nontenured. The employer's charter delineated the powers and duties of the Department of Drug and Alcohol Addiction, presumably to be carried out by its Commissioner, which included "[d]evelop[ing] and administer[ing] effective policies and programs for the prevention, control and treatment of alcoholism and drug abuse and addiction, and . . . mak[ing] appropriate recommendations to the County Executive" and legislative body. This description attests to the policymaking and advisory nature of the position (see Matter of Franconeri [New York City Dept. of Personnel — Hudacs], 190 AD2d 970, 971 [1993]). Because the position's duties are defined by the charter, claimant was bound by law to carry them out when she accepted the position as Commissioner of a 260-person department. Claimant's contention that she did not make any policy or offer any advice to the executive or Legislature begs the question. The charter defines the responsibilities of the individual rendering services in such a "position," and claimant's failure to discharge her job duties does not change the nature of the Commissioner position.

The charter required claimant to "make appropriate recommendations" on behalf of the department. Whether her recommendations were heeded is irrelevant; an advisor makes recommendations which may be followed or rejected by the ultimate decisionmaker (cf. Matter of Le Porte [New York City Dept. of Personnel — Hartnett], 142 AD2d 866, 867 [1988], lv denied 73 NY2d 705 [1989]). It is likewise irrelevant that her decisions were subject to final approval by the County Executive (compare Matter of Franconeri [New York City Dept. of Personnel — Hudacs], supra at 971); to hold otherwise would limit the class of policymaking and advisory positions to only the highest level decisionmaker in each municipality. Based on the charter, claimant's position, as a matter of law, was a "policymaking or advisory position" encompassed by Labor Law § 565 (2) (e). Thus, the Board's determination to the contrary is irrational, and claimant was not entitled to unemployment insurance benefits.

Cardona, P.J., Mercure and Carpinello, JJ., concur.

Ordered that the decision is reversed, on the law, without costs, and matter remitted to the Unemployment Insurance Appeal Board for further proceedings not inconsistent with this Court's decision."

UNEMPLOYMENT INSURANCE - GOVERNMENT EMPLOYEES

A recent consultation brought up the issue - are government officials and employees entitled to Unemployment Insurance benefits. Let's first look at the statute from the Unemployment Insurance Law:

"Sec. 565. Governmental entities. 1. Definition. A governmental entity shall mean the state of New York, municipal corporations and other governmental subdivision and any instrumentality of one or more of the foregoing.

2. Exclusions. In addition to services not included pursuant to the provisions of section five hundred eleven of this article, the term "employment" does not include services rendered for a governmental entity by:

(a) an elected official;
(b) a member of a legislative body or of the judiciary;
(c) a member of the state national guard or air national guard, except a person who renders such services as a regular state employee;
(d) a person serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency;
(e) a person in a major nontenured policymaking or advisory position;
(f) a person in a policymaking or advisory position, the duties of which ordinarily do not require more than eight hours per week to perform; and
(g) an inmate of a custodial or penal institution.

3. Coverage.A governmental entity shall be liable for contributions under this article unless it becomes liable for payments in lieu of contributions.

4. Election of payments in lieu of contributions.A governmental entity or a group of such entities liable for contribution under this article may elect to become liable for payments in lieu of contributions as of the first day of any calendar year by filing with the commissioner a written notice to this effect before the beginning of such year or, if the governmental entity was not liable in the preceding calendar year, by filing the notice not later than thirty days after the end of the calendar quarter in which it first became liable. The commissioner may for good cause shown extend the time for the filing of such notice.

5. Obligation upon election.(a) A governmental entity which has elected to become liable for payments in lieu of contributions shall pay into the fund an amount equal to the amount of benefits paid to claimants and charged to its employer`s account in accordance with the provisions of paragraph (e) of subdivision one of section five hundred eighty-one of this article on the basis of remuneration paid on or after the date on which such liability became effective. The amount of payments so required shall be determined by the commissioner as soon as practicable after the end of each calendar quarter or any other period. Such amount shall be payable quarterly or at such times and in such manner as the commissioner shall prescribe and, when paid, the employer`s account of the governmental entity shall be discharged accordingly.

Paragraph (a) as amended by L. 1998, Ch. 589, effective April 1, 1999.

(b) If governmental entities elect payments in lieu of contributions as a group, the members of the group shall be severally and jointly liable for payments of amounts equal to the amounts of benefits paid to claimants and charged to the employer`s accounts of all members of the group. The commissioner may prescribe conditions and methods for such group elections and for the discharge of the obligations and responsibilities of the group and its members.

6. Termination of election. (a) A governmental entity may terminate its election to become liable for payments in lieu of contributions as of the first day of any calendar year by filing a written notice to this effect with the commissioner before the beginning of such year.

(b) The commissioner may cancel at any time the election of a governmental entity which has failed to make any of the payments required hereunder within thirty days after the commissioner has notified it of the liability for and the amount of such payment. Such cancellation shall remain in force and effect until the governmental entity files a new notice of election in accordance with the provisions of subdivision four of this section after having satisfied conditions and requirements prescribed by the commissioner for this purpose.

(c) If such election is terminated by a governmental entity or cancelled by the commissioner, the governmental entity shall remain liable for payments in lieu of contributions with respect to all benefits charged to its account on the basis of remuneration paid before the date on which such termination or cancellation took effect.

Paragraph (c) as amended by L. 1998, Ch. 589, effective April 1, 1999.

7. Joint accounts.Any two or more governmental entities may form a joint account by complying with rules and regulations prescribed by the commissioner for the establishment, maintenance and dissolution of such accounts.

8. Assessment and collection of payments in lieu of contributions. The amount of payments in lieu of contributions due hereunder from governmental entities but not paid upon notice shall be assessed and collected by the commissioner, together with interest and penalties, if any, in the same manner and subject to the same conditions under which contributions due from other employers may be assessed and collected under provisions of this article.

9. Special provisions applicable to the state. (a) In lieu of contributions, the state of New York shall pay into the fund an amount equivalent to the amount of benefits paid to claimants and charged to the account of the state of New York in accordance with the provisions of paragraph (e) of subdivision one of section five hundred eighty-one of this article.

(b) The amount of payments into the fund required shall be ascertained by the commissioner as soon as practicable after the end of each calendar year or any other shorter period and shall be payable from the general funds of the state, except if a claimant to whom benefits were paid remuneration by the state of New York during his base period from a special or administrative fund provided for by law, other than an income fund of the state university or the mental hygiene services fund, the payment into the fund shall be made from such special or administrative fund with the approval of the director of the budget. Such payments by the state shall be made at such times and in such manner as the commissioner, with the approval of the director of the budget, may determine and prescribe.

§565 as added by L. 1977, Ch. 675, effective January 1, 1978."

UNEMPLOYMENT INSURANCE - REOPENING OF HEARING

A recent consultation revealed Claimant quit the job and the DOL found no compelling reason and thus denied benefits. In fact, Claimant quit the job because Claimant did not like the job. Claimant requested a hearing and the Employer defaulted. At the hearing, Claimant testified that Claimant quit for other reasons that did in fact exist but were not the primary reasons for quitting. The Administrative Law Judge (ALJ) held for the Claimant. The Employer then applied to reopen the hearing and a new hearing is being held where Employer is being represented by counsel. Claimant consults with Claimant's own counsel for the first time and is advised that Employer testimony and cross-examination of the Claimant may be a problem as a new hearing will bring in new evidence that the ALJ did not hear at the first hearing. A Claimant should not assume that since the Claimant was able to get an ALJ to overturn a DOL determination after a default by the Employer that the ALJ will maintain the earlier decision favorable to the Claimant. New evidence will be introduced to refute the allegations of the Claimant and the ALJ must consider the new evidence. This consultation revealed that if the Employer testified, evidence would be introduced, directly and through cross-examination, that Claimant may not be entitled to benefits.

DIVORCE AND FAMILY LAW ISSUES

Recently, I posted a discussion on the need for counseling and when it comes to matrimonial issues. There has also been a thread or discussion on a Family Law Professional Group on LinkedIn entitled "Should we make it easier to divorce? Should we make it harder to marry?" I would like to repeat a post recently made by a New Zealand attorney Stephen G Anderson who describes himself as a "Non-adversarial family lawyer":

""Easier", of course, depends on your jurisdiction. In NZ there is a wait of at least 2 years. In England we have options based on either periods of separation or fault. Nobody in their right mind believes that only one person is at fault in anything other than the most rare cases, yet fault - adultery and unreasonable behaviour - are most often cited because they allow a dissolution process to start immediately. Is this good? Probably not always, and particularly not when the other person has no idea it's coming. But managed sensitively and non-adversarially, which is possible even with behaviour being alleged, it allows the couple to start the end process. Making them wait two years can increase tension and could make the eventual discussions about children and money even more adversarial. So I'm in favour of allowing people to start a divorce once they've come to the conclusion their marriage has broken down irretrivably.

Whether the outcome is a good one or a bad one will largely depend on how you go about it. Choose an old-fashioned, traditional family lawyer, who isn't versed in non-adversarial techniques and who doesn't understand and appreciate (or chooses to exploit) the emotional dynamics involved - often referred to admiringly by those who don't understand as a Rottweiler - and you may end up with a bad deal, with damaged kids and huge legal bills. Visit a mediator or collaborative lawyer to begin with - pros who problem-solve rather than seek to attribute blame - and the outcome is likely to be much better for the couple and their kids. And it won't cost so much. Mediation costs about 20% of cost of typical case settled by lawyers and with a much greater chance of court hearings avoided..

So making divorce easier coupled with better information about mediation, counselling and collaboration may help bring an unhappy marriage to an end sooner, with a better outcome and at a lower cost to the family emotions and purse.

Making divorce more difficult, as it was in England up to the 1970's, will cause greater emotional upset to the couple as individuals and to their children, frineds, family and work colleagues, and lead to much larger legal costs, in my view.

Making it harder to marry? Not sure if arranged marriages make it harder to marry, so perhaps their not a good comparison, but I cannot see that there should be any mandatory tests or counselling any more than for any other contract. Provding people with information before they decide to marry is a good idea, it's just finding a way to deliver it that is tricky.

So I'm not really in favour of making it more difficult to marry, and am in favour of "easier" divorces. But many of the problems surrounding marriage breakdown would be reduced if lawyers developed more family/child focussed practices, promoting counselling and therapy alongside mediation and collaboration - and if they refused to engage in adversarial divorce techniques."

MORTGAGE FORECLOSURE - SETTLEMENT CONFERNCES ON MAY 19

On May 19, I will be a volunteer lawyer at Nassau Supreme Court for the Nassau County Bar Association for Mortgage Settlemen Conferences. The conferences I will be at start at 11am although I suggest you arrive by 10:45 am and check in with the clerk. Volunteer Lawyers are in the back of the courtroom - we are sitting at a large table at the back wall. Basically, this is will will happen as per the NCBA checklist:

"Residential Foreclosure Conference Part Checklist

1. Introduction: introduce yourself to the homeowner. Make it clear that you are not his/her attorney, but you are a volunteer attorney authorized to advise them and assist them with the foreclosure conference proceeding.

2. Housing/Legal counseling: Encourage the homeowner to seek legal counseling and housing counseling through one of the pro bono organizations.

3. Housing information: Ask the homeowner about the property: its location, who lives there and how long he/she has lived in the home. The financial crisis has hit the various areas of each county differently, and some areas have much greater depreciation than others. Further, the length of time in the home is a relevant factor, particularly in addressing whether there may be fraud involved in the mortgage. Ask the homeowner whether he/she resides in the property and whether it is a 1-4 family home.

4. Financial information: Ask the homeowner if he/she has been in contact with the lender, whether he/she has prepared a financial packet for the lender, whether he/she is in a loan modification or HAMP modification. Ask the homeowner the reason for the default in general terms, because this may affect the type of legal/housing counseling the person should obtain.

5. Legal information: Ask the homeowner if he/she received a 90-day notice, the Summons/Complaint or any other court documents besides the notice of foreclosure conference. Ask the homeowner if he/she has filed an Answer or responded to any motion practice. Encourage the homeowner to obtain legal advice as to whether he/she should file an Answer or oppose motions filed by the lender. Note: Appearance in the foreclosure conference does not generally constitute a waiver of defenses (see each county’s local rules) but filing motions papers could.

6. Foreclosure conference part: Explain to the homeowner how the conference part will proceed. Explain who the referee/JHO is and their role in the process; the lender’s attorney, and the documents that you should expect to receive from the lender at the conference. Organize the homeowner’s paperwork (if any was brought to the conference) so that the homeowner can explain to the referee/JHO his/her arguments and requests for the conference. Write down notes for the homeowner that would assist them in representing him/herself in the conference.

7. Post-conference discussion: Explain to the homeowner what happened at the conference. Again advise and encourage them to seek legal/housing counseling and to follow through with any directives given by the referee/JHO. Organize the homeowner’s necessary information into a one-page checklist, such as Courtroom number, referee/JHO name, lender’s name and representative, phone numbers to contact, next conference date, if any, and give them a checklist of what the homeowner is expected to do before the next conference."

LITIGATION AND MENTAL HEALTH

I believe more attorneys are becoming aware of how legal issues may affect the mental health of clients. The Nassau County Bar Association is holding a seminar and this is from their email:

"Clients in Trouble: What Attorneys Need to Know About Trauma

Another Free Member Benefit brought to you by Wellness Wednesdays

Tuesday, May 18 12:30—2 p.m. at NCBA.

Learn how to better help your clients who are in the middle of a crisis situation, such as a criminal arrest, divorce, probate, personal injury, etc. At this seminar, attorneys will learn how to:

1. Identify when people need an attorney.

2. Explore the dynamics of crisis, trauma and loss and how they effect behavior and cognitive functioning.

3. Validate the impact on the attorney and the client-attorney relationship. It is comparable to a therapeutic relationship where therapists become drained working with depressed or acting-out clients.

4. Develop effective structures and strategies to help both client and attorney, such as clear contracts, clear limits, active listening, proactive education and normalization of issues for clients, and coping strategies for attorneys.

Guest Speaker: Sandra R. Wolkoff, LCSW North Shore Child & Family Guidance Center
Free for all NCBA Members!

RSVP is Required: Stephanie Pagano, 516-747-4070 or spagano@nassaubar.org. Optional Buffet lunch will be available"

DIVORCE - FLIGHT EQUALS FIGHT

A recent consultation revealed that a long term marriage was ending and one spouse wanted to leave the other spouse. A minor child was involved and would leave with the departing spouse. In this matter, there were no incidents of domestic violence nor any fear of it. Incidents involving domestic violence require one approach but in my experience, where there is no domestic violence, a spouse's decision to flee the marriage may lead to further complications and I advised the spouse to first seek counseling before any decision is made. Here is an article courtesy of ABC News and even though it is about a high profile divorce, the suggestion of counseling I believe applies to all:

"Shrinks to Gosselins: Try Divorce Counseling, Goal Is to 'Stop Killing the Children in the War,' Foster Business Relationship, By SUSAN DONALDSON JAMES

June 25, 2009— When reality-TV star Jon Gosselin said he was throwing in the towel without marriage counseling, his wife Kate and their 10.6 million television viewers were not the only ones aghast.

Psychologists suggested that the couple needed divorce counseling -- therapy not to save the train-wreck marriage, but to establish a better relationship going forward, as they continue to raise their eight children.

"There's a lot of sensationalism in these TV reality series and people throw out a lot of new techniques," said Jody Deluca, a clinical psychologist from Odessa, Fla. "But this couple really needs to renegotiate their relationship."

"Because of the children, they have to start from scratch with new rules to abide by, whether it's remarriage or divorce."

Kate Gosselin has said to People magazine that it was her husband of 10 years who asked for the divorce. The show, which is in its fifth season, has been a "portrait of an American family crumbling," People deputy managing editor Peter Castro told ABC.

Divorce Counseling Is New Concept

Divorce counseling or therapy is a relatively new concept in the mental health field. With one in two marriages ending in divorce, counseling through the "hostility and anger" is critical, Deluca said.

"You are talking about emotional chaos," she told ABCNews.com.

In the past, many couples have weathered that storm without help.

Matthew Bailey of Medina, Ohio, divorced his wife after he discovered she had cheated on him with someone from work.

"I tried counseling once but then decided to suck it up and not be one of those guys who takes a woman back after that," he said. "After almost a year, I haven't needed any counseling on my own.

"All you have to do is stop being angry and you don't need therapy," he said. "Life is what you make of it. Suck it up."

But psychologists say divorce counseling helps couples strengthen their communications and negotiation skills.

And when there are children involved, the process also helps them accept the end of the marriage, avoiding self-blame, guilt and anger.

Divorce Counseling Sets Rules

Divorce counseling can include issues related to alcohol and drugs, sleep, eating habits, hygiene and grooming, decision making, job performance and financial management.

Most often, Deluca helps couple reinvigorate and repair their marriages, but when divorce is inevitable, she helps them set down "rules of engagement."

"Many times there has been a breakdown in communication," she said. "They must be on the same team until the divorce is final, especially if there are children involved."

As in marital therapy, counselors work on behavior-management techniques. Deluca begins by having the couple write down the pros and cons of their marriage and reading them aloud.

"I have them agree to disagree," Deluca said. "We come up with rules for arguing. He says, 'Under no circumstances will you call me a wimp.' She says, 'It's not acceptable to come home after 9 p.m."

Couples must adhere to no naming-calling and "time-outs" when arguments get explosive.

Don't Let Kids Be in the Battlefield

"Whoever is more emotionally in control leaves the war field," she said. "Some couples give a signal that's unique to the couple: 'It's getting out of hand, we are in the middle of a war.' Someone has to be in control enough to walk away."

Don't fight in front the children: "They will carry this emotional memory for the rest of their lives," she said. Don't drag in outsiders like family and friends: "It makes it worse," she said.

But some couples are skeptical of counseling once the relationship fails.

Suzanne Garnmeister of Greenville, S.C., noticed her husband of eight years beginning to act "increasingly odd" in the summer of 1999.

"Normally even-tempered, he became angry and volatile," she told ABCNews.com.

Garnmeister was getting her college degree and couldn't pin down what was going on, but he soon asked for a divorce.

"I was completely devastated, and requested counseling, which he agreed to," she said. "However, when we were in counseling, he was never honest. He was hostile and resentful, but never admitted that he'd had an affair."

Therapy Only Works With Honesty

Two years later, she found about the affair when she found a letter he had written to his girlfriend.

"When I saw how Jon Gosselin was acting, it reminded me of how my ex acted at that time," she said. "In order to deal with the guilt he was feeling, he made me the 'bad guy' to justify his actions.

"I don't think counseling works unless both parties are honest," she said. Ken Warner of Florence, N.J., tried marriage counseling with his first wife, even though he had made up his mind about divorce.

"We had one child and that played a big part of why I went," he told ABCNews.com. "My experience there was that it wasn't going to help; I had already made my mind up and wanted out of the marriage. The counselor couldn't change my mind. What could they possibly say?"

The couple had multiple pressures, not owning a home and renting from Warner's mother. His brother was also living with the couple.

"My wife couldn't stand him, but she was a real tough person and, at the end, I had enough of her too, she always had to be in charge, or she was a yeller." he said. "No counselor was going to change that."

But therapists say that the "crisis" of divorce is an opportunity for learning and personal growth, especially because an estimated 70 to 80 percent of those who divorce will remarry.

Such was the case with Washington, D.C., divorce lawyer Marjorie Just, 41, who sought counseling to cope with her own divorce eight years ago and today is remarried.

"In the aftermath of my separation and divorce it was incredibly healthy not only for venting, but also examining what I did to contribute to the relationship and what I was looking for in my marriage," she told ABCNews.com.

Just has been successful the second time around, even though 60 percent of all second marriages fail.

Divorce therapy can be difficult, but "some people are craving it," said Just, author of "Divorce Decisions."

"They don't want to be at war with the person who they loved and built a home with for years," she told ABCNews.com. "Not everyone is consumed by hatred by the end of the marriage."

She recommends counseling for all those going through a divorce, especially parents. "The marriage may be ending, but the relationship doesn't," Just said.

Today, the concept of divorce therapy has moved into the legal arena in a mediation process called "collaborative divorces."

All parties sign an agreement at the onset. The lawyers consent not to litigate against each other. They also agree that if the collaborative process fails, neither lawyer can represent them in court.

"The incentive for the clients is to have to come up with another retainer," Just said. "The incentive for the lawyers is if they can't resolve it, they've lost a client."

The goal is to allow couples to "transform" themselves out of conflict and to "move on and have a better life," said Roberta Eisen, whose Washington, D.C., counseling practice focuses on restructuring families.

Divorce therapy is designed "so we don't kill the children in the war," Eisen told ABCNews.com.

Sadly, she said, the Gosselins have made divorce "chic."

What counseling and, in some cases, collaborative divorce can do is "help them shift into respectful business-like relationships, to transition into the business of parenting children."

About 25 percent of couples "get it," Eisen said.

"But there are 25 percent down at the bottom who are really stuck in the mud and half of them have serious pathologies or other reasons that are holding them there," she said. "They are not willing to do the work."

"We aim for the 50 percent in the middle," Eisen said. "They could go either way -- stick in the trenches or rise above their own issues."


Copyright © 2010 ABC News Internet Ventures"

UNEMPLOYMENT INSURANCE - CRIMINAL PENALTIES

A recent consultation brought up this issue. This is from the DOL web site and it is in all bold:

"If you work while receiving benefits and do not report that employment, even if it is part-time work, you may be committing fraud. You must report all full-time and part-time employment to the Labor Department or you risk criminal penalties."

So if a Claimant does not report income when a Claimant should, what happens? First, let us look at the NYS Unemployment Insurance Law:

"Sec. 594. Reduction of benefits for false statement. A claimant who has wilfully made a false statement or representation to obtain any benefit under the provisions of this article shall forfeit benefits for at least the first four but not more than the first eighty effective days following discovery of such offense for which he otherwise would have been entitled to receive benefits. Such penalty shall apply only once with respect to each such offense.

For the purpose of subdivision four of section five hundred ninety of this article, the claimant shall be deemed to have received benefits for such forfeited effective days.

The penalty provided in this section shall not be confined to a single benefit year but shall no longer apply in whole or in part after the expiration of two years from the date on which the offense was committed."

A claimant shall refund all moneys received because of such false statement or representation made by him."

What if the Claimant does not refund all moneys. The UI regulations are helpful:

"§ 470.4 Overpaid unemployment insurance benefits

The Commissioner of Labor shall, as provided for in section 18 of the State Finance Law, waive the assessment of interest and late charges on debts owed which occurred as a result of overpayment of unemployment insurance benefits.

§ 470.5 Setoff against unemployment insurance benefits

Established and outstanding overpaid unemployment insurance benefits shall be collected from a claimant's weekly benefit award as a setoff.

Priority of liquidation. In the event that more than one overpayment is established against an individual claimant, setoff amounts will be debited to such overpayments in chronological order.

Willful overpayment. A setoff of 100 percent of the weekly benefit amount will apply to one or more established and outstanding overpayments attributable to an individual claimant so long as at least one of such overpayments is determined to have been willful.

Non-willful overpayment. A setoff of 50 percent of the weekly benefit amount will apply to one or more established and outstanding overpayments attributable to an individual claimant so long as none of such overpayments are determined to have been willful"

But we must also look at another relevant section of the Unemployment Insurance Law:

"Sec. 630. Penalties. Any misdemeanor defined in this title shall be punishable by a fine of not more than five hundred dollars or imprisonment for not more than one year, or both. The penalties and misdemeanors imposed by this title are in addition to those otherwise prescribed in this entire article."

That section under the Unemployment Insurance Law will lead us to the following:

"Sec. 632. False statements or representations.1. Benefits and contributions. Any person shall be guilty of a misdemeanor who wilfully makes a false statement or representation

(a) with the effect of obtaining, either for himself or for any other person, any benefit or payment under the provision of this article or of any similar law of another state or the United States in regard to which this state acted as agent pursuant to an arrangement authorized by this article...."

But other statutes are also involved. In June of 2009, 30 New York State employees from Albany to New York City were arrested and charged with unemployment fraud after they allegedly claimed unemployment benefits while actually working for the state. According to Attorney General Andrew Cuomo, the thirty defendants were charged with some variation of the crimes of Grand Larceny in the Third and Fourth Degrees, Falsifying Business Records in the First Degree, and Petit Larceny. Thus, felony charges can be involved. And if this can happen to state employees, can it happen in the private sector? Here is a press release from the Department of Labor in January of this year:

"New York State Cracks Down on Unemployment Insurance Fraud in New York City
Department of Labor Announces 2009 Fraud Investigation Results

Albany, NY (January 13, 2010) - State Labor Commissioner M. Patricia Smith today announced 159 arrests in New York City during 2009 for the theft of $800,112 from New York State's Unemployment Insurance (UI) trust fund. The State Labor Department worked with district attorneys and other law enforcement agencies to bring these people to justice. Most of those arrested had collected UI benefits while earning a paycheck. Governor David A. Paterson said, "One of the pitfalls of having so many New Yorkers collecting UI is that there will always be somebody who will try to take advantage of the system. Fortunately, we're doing a great job to keep on top of fraud and the results speak for themselves. In fact, New York's stepped-up crackdown on Unemployment Insurance fraud saved businesses large and small more than $35 million last year alone."

"It is nothing short of shameful to think that people would steal from a fund designed to help families put food on the table, gas in their cars and clothes on the backs of their children," said Commissioner Smith. "Governor Paterson has directed the Labor Department and its partners in law enforcement to remain aggressive in bringing individuals who defraud the UI system to justice. Rest assured we will do just that."

The arrests are a direct result of a Labor Department program that emphasizes better fraud detection through data matching, more proactive investigations, and better coordination with local law enforcement and prosecution agencies.

Details by county are below:

New York City Region:

Manhattan 55 arrests $261,966

Brooklyn (Kings) 35 arrests $198,254

Queens 33 arrests $198,057

Bronx 25 arrests $81,897

Richmond (Staten Island) 11 arrests $59,938

Total NYC Region: 159 arrests $800,112

The State Labor Department administers unemployment insurance benefits for the federal government. The weekly payments assist eligible workers who have lost their jobs through no fault of their own. To qualify for UI, people must be:

unemployed
ready, willing and able to work and
searching for a new job.

When applicants cheat the system by stealing from the UI Trust Fund, it has a negative effect on businesses across the state. Employers whose accounts pay for the false claims must take on a higher tax rate. For example, the average employer in New York State (with some 14 employees) that has an undetected fraudulent claim filed against it will pay over $700 more in taxes the next year. However, if the Labor Department detects the fraud, the tax increase is not charged to the employer.

"Unemployment insurance is a safety net for those who need assistance, not a jackpot for those who would game the system and cheat their neighbors," said Deputy Secretary for Public Safety Denise E. O'Donnell. "In this economic climate, when government resources are scarce and needs are high, we must be especially vigilant to discourage and punish cheating. Governor Paterson and I applaud Commissioner Smith and local law enforcement officials for their aggressive efforts to track down cheaters and recover the money they stole from honest taxpayers."

New York State Police Superintendent Harry J. Corbitt said, "The State Police stands ready to assist in investigating and apprehending those individuals willing to engage in the fraudulent use of Unemployment Insurance funds meant to assist honest workers and their families."

Manhattan District Attorney Cyrus R. Vance, Jr. said, "At a time when so many New Yorkers depend on unemployment benefits, the Manhattan DA's Office is committed to rooting out and prosecuting those who fraudulently receive these funds. Thanks to the work of the Governor's Office, the Department of Labor and state and local law enforcement agencies, through investigations like these we can ensure that unemployment benefits are directed toward those who urgently need them. I am proud that our Office was able to restore more than $250,000 to the State."

Kings County District Attorney Charles J. Hynes said, "This kind of fraud steals funds intended to help people who are in genuine need of public assistance. We continue to be vigilant about prosecuting these crimes."

Queens District Attorney Richard A. Brown said, "The payment of unemployment benefits is intended to assist out-of-work individuals and their families struggling through these tough economic times - not to subsidize the lifestyles of those who bilk the government of scarce resources through deception."

Bronx District Attorney Robert T. Johnson said, "The Labor Department is to be applauded for enhancing its data-matching and investigative ability. We will continue to stand alongside them in their efforts to put a stop to fraud."

Richmond County District Attorney Daniel M. Donovan, Jr. said, "Unemployment Insurance fraud is a crime against the taxpayers of this state and our neighbors who are out of work in this tough economy and legitimately need temporary assistance. We will continue to work with our partners in government and law enforcement to aggressively investigate and prosecute this crime."

To make an anonymous report about fraud against the Unemployment Insurance fund, call the Department of Labor's toll-free hotline at (888) 598-2077."

UNEMPLOYMENT INSURANCE - MISCONDUCT - TIME RECORDS

On April 30 I discussed a consultation with a Claimant where there was a disqualification due to false time records and that all the cases I discovered have held that false time records were misconduct, even if it only happened in one instance. I also queried as to how a decision would be reached if the evidence established that not only did the employee falsify time records, but that the employer did too in order to avoid paying overtime, reduce benefits, etc. Recently, I spoke to the Claimant after the hearing on the issue. The Claimant alleged, in part, that the time records were falsified by the Claimant because the Employer did too in order to avoid paying overtime, reduce benefits, etc. The Administrative Law Judge, however, was strict on the law, and, after having the decision read to me, I felt that the judge implied that if an Employer is falsifying an Employee's time records, the Employee's remedy is to file a complaint with the Employer and/or the Department of Labor; otherwise, the Employee is, in effect, merely taking the law into their own hands by falsifying time records to compensate for the Employer's wrongful actions. Of course, this Claimant is free to pursue a separate claim against the Employer for lost wages due to false time records but is disqualified for Unemployment Insurance benefits.

FREE SEMINAR AT NASSAU COUNTY BAR ASSOCIATION - MAY 17

The Community Relations & Public Education Committee of the Nassau County Bar Association will present a free Public Education Seminar on Monday, May 17 at 6:30 p.m. at the Association: “Cradle to Age 6: Starting on the Right Foot.” All are welcome to attend. Advance registration is required by calling 747-4070 or emailing ckatz@nassaubar.org.

FREE MORTGAGE FORECLOSURE CLINIC - NASSAU COUNTY BAR ASSOCIATION

Today, Nassau residents caught in the growing mortgage foreclosure crisis can have their questions answered by attorneys at a free clinic sponsored by the Nassau County Bar Association at the NCBA headquarters, 15th and West Streets, Mineola, NY. Attorneys have volunteered to provide one-on-one guidance, advice and direction to any Nassau County homeowner who is concerned about foreclosure matters or is already in the foreclosure process involving property in Nassau County. Attorneys (including myself) have volunteered to review individual foreclosure issues with Nassau homeowners, help them sort things out, and give advice or refer them to agencies and programs, right in the same room, that may be able to help. This is not legal representation. The attorneys will help the homeowner find out if indeed, they need a credit counselor or a lawyer, and get them in touch with available resources. In addition to meeting one-on-one with a volunteer attorney, housing counselors from the Nassau County Homeownership Center and representatives from Nassau/Suffolk Law Services -- which provides free legal services for those who meet certain income guidelines -- will be on hand to provide assistance. The clinic hours are 3pm to 6pm. Reservations are required by calling the Bar Association at 516-747-4070 between 9:30 a.m. - 4:30 p.m.

UNEMPLOYMENT INSURANCE - SELF EMPLOYMENT

A few recent consultations have revealed that there may be an issue of whether, among other possible facts, the maintenance of a blog or website or other social media group constitutes self-employment and thus disqualifying UI benefits. Here is a story reported from Forbes just a few months ago but and one must remember that each case has its own peculiar facts:

"Blogger's Unemployment Benefits Reinstated After AdSense Fiasco
David K. Randall, 10.15.09, 4:00 PM ET

A blogger who lost her unemployment benefits after making a dollar a day through Google AdSense had her weekly checks restored yesterday. The New York Department of Labor reversed its stance that her blog constituted work, but it still does not have a policy for how to classify blogging that produces income.

As Forbes first reported, Karin, a 2008 graduate of the University of Virginia School of Law, applied for unemployment benefits after she was laid off by a New York City law firm six months into her job. She started a food blog to build a writing portfolio in hopes of attracting employers and made $238.75 over six months through Google AdSense, a service by the Web search company that pays bloggers to host ads on their Web sites.

When she reported this income to the New York State Department of Labor, she received conflicting advice about whether this income constituted work.

According to state regulations, anyone receiving unemployment benefits who works one day and earns less than $405 will have his check reduced by 25%. However, the state does not regard "residual income"--meaning payment for services previously rendered--as work that would affect a person's eligibility for unemployment benefits.

The state suspended Karin's weekly unemployment payments while it conducted an investigation into her "business," and Wednesday determined that the income was indeed residual.

"When the claimant brought the issue to the department's attention, the department went through the normal process to determine if the claimant was involved in any business activity," a Department of Labor spokesperson said. "Based upon the responses, it was determined that the income received was "passive" income and not directly related to a business activity, which is why her benefits were reinstated."

One key to the state's ruling was that the blog was essentially written as a form of self-promotion rather than being a for-profit enterprise. If Karin accepts money from restaurants in exchange for writing about their establishments, however, her blog will be viewed as work in the state's eyes, and she could become ineligible for unemployment benefits.

Karin says that the Department of Labor told her that she no longer needs to report her AdSense income. However, she is waiting to receive a guarantee in writing before she puts ads back up on her site."

UNEMPLOYMENT INSURANCE - MISCONDUCT CRIMINAL ACTS

Many consultations have revealed that some Claimants have been discharged based upon alleged acts of misconduct and some of these allegations involve criminal acts. Here is the basic DOL rules on how they treat applications for benefits under these circumstances:

"Special Bulletin A-710-50 (Revised)

NEW YORK STATE DEPARTMENT OF LABOR
Unemployment Insurance Division
Adjudication Services Office
September 16, 1988
Interpretation Service-Benefit Claims
SPECIAL BULLETIN

Discharge for Arrest or Conviction

Attached is a revised page one for Special Bulletin A-710-50 dated June 28, 1977. This page should be substituted for the current page one, which should be discarded.

This revision states more accurately the exceptions to the provision that makes it an unlawful discriminatory practice to question a prospective employee about or discharge a current employee because of an arrest or criminal accusation.

The only exceptions are situations where such questions are required or permitted by another statute. Employers affected by this exception include stock brokerage firms and those such as law enforcement, guard or detective agencies when required to provide information concerning prospective or current employees pursuant to the licensing activities of governmental bodies in relation to the regulation of guns, firearms and other deadly weapons. This exception would not apply to employees such as unarmed personnel employed by these agencies.


DISCHARGE FOR ARREST OR CONVICTION

THE HUMAN RIGHTS LAW
Article 15 of the New York State Executive Law, known as "The Human Rights Law", was recently amended by adding two new subdivisions (Sections 296.14 and 296.15), making it unlawful generally to discriminate against a person because he was arrested or convicted of a crime.

This Special Bulletin discusses the effect of the new provisions in cases where a claimant has been discharged because of an arrest or conviction, or because he concealed either or both from his employer.

Cases which cannot be readily resolved may be submitted through channels to the Interpretation Section of the Adjudication Services Office for an opinion.

The new provisions

Arrest
The new provisions state that, except where required or permitted by other statutes, it is an unlawful discriminatory practice for an employer to:

Inquire on an employment application or otherwise, whether an individual has ever been arrested or accused of a crime, or

Discharge an employee because of an arrest or accusation, when such arrest or accusation terminated in favor of the accused.

(Subject of the revision): Under certain circumstances an employer may ask questions of an employee or prospective employee about prior arrests or criminal accusations. Evidence of prior arrests and/or criminal accusations could result in an employee's discharge. This would apply to such employers as:

A stock brokerage firm

or

A law enforcement agency, guard or detective agency, when required to provide information relevant to the licensing activities of governmental bodies in the regulation of guns, firearms or other deadly weapons.

Conviction
Under the new provisions, it is not unlawful for an employer to inquire whether an individual has-ever been convicted of a crime. However, it is unlawful to discharge an employee for that reason, unless either-of the following can be shown:

There is a direct relationship between the offense and the employment; that is, the nature of the criminal conduct for which the employee was convicted has a direct bearing on his fitness or ability to perform any of the duties or responsibilities of the job, or

Continuing the employment would involve an unreasonable risk to property or to the safety or welfare of any person or the general public.
The law also provides that in making & determination regarding the above, an employer must also consider the public policy of the state to encourage employment of ex-offenders, how long ago the offense occurred, the person's age at the time, the seriousness of the offense, and evidence produced by the person in regard to his rehabilitation and good conduct.

In addition, any person, who has been convicted of a crime and who has been discharged from his employment, must be furnished by the employer, if requested, a written statement setting forth the reasons for discharge.

Criminal charges pending
The new provisions are silent on the question of pending criminal charges, but the State Division of Human Rights has issued an interpretation indicating that it is not unlawful for an employer to inquire if such charges exist or to discharge an employee if they do, and he is not required to justify the discharge as in the case of convictions, outlined in IB above.

Employers covered by the new provisions
The new provision prohibiting discrimination against an individual who has been arrested or accused but cleared, applies to the state and city governments and subdivisions, and private employers.

The new provision prohibiting discrimination against a person who has been convicted of a crime (an "ex-offender") applies to the above public employers, and private employers of 10 or more persons.

Neither of the new provisions, nor the State Human Rights Law of which they are a part, apply to federal employment.

However, for the purpose of adjudicating claims for unemployment insurance, the principles set forth in this Special Bulletin should be applied to separations from all employers, public (including federal) or private, and regardless of the number of their employees.

Application of the new provisions

False statements to employer

Since it is generally unlawful to inquire whether a person has ever been arrested or accused of a crime, a false reply to such question generally is not misconduct under the unemployment insurance law. (Some exceptions where an employer may make such inquiry are given under IA).

Since it is lawful to inquire whether a person has ever been convicted of a crime or has a criminal charge pending against him, a false reply to either question is misconduct under the unemployment insurance law, and a claimant who is discharged solely because of such false answer may be subject to the statutory disqualification.

Arrest which terminated in favor of accused
Since it is generally unlawful to discharge an employee because of an arrest or accusation, when such arrest or accusation terminated in favor of the accused, a discharge under these circumstances is generally not disqualifying.

Conviction
A discharge because of a criminal conviction occurring either before or after commencement of the employment, is unlawful and therefore not disqualifying, unless either of the exceptions listed under 18 above can be shown to exist.

However, even if either exception is shown by the employer to exist, and the discharge is lawful, a disqualification for misconduct cannot be imposed unless the acts for which claimant was discharged were in connection with his employment within the meaning of the unemployment insurance law. Acts which occurred prior to commencement of the employment generally would not meet this test. On the other hand, behavior off the job may in some instances be misconduct in connection with employment: see Interpretation Service Index 1130.

Criminal charges pending
Since it is not unlawful to discharge an employee because of a criminal charge pending against him, a discharge for such reason may, be disqualifying if the acts charged were in connection with employment, within the meaning of the unemployment insurance law. As noted in the preceding paragraph, acts which occurred prior to commencement of the employment generally would not meet this test. On the other hand, behavior off the job may in some instances be misconduct in connection with employment.

Misconduct in connection with employment
The new provisions impose restrictions on the right of an employer to inquire about, or discharge an employee for, an arrest or conviction record. Except for this, they do not interfere with his right to discharge any employee who commits an act, dishonest or otherwise, in the course of his employment, which is prejudicial to the employer's interests. In such case the disqualification for misconduct under Section 593.3 of the unemployment insurance law should be imposed; and if the act also constitutes a felony, or results in criminal proceedings following an indictment, benefits should be withheld in accordance with Section 593.4, the "criminal acts" provision. (See Interpretation Service, Index 113O, 1150, and 1195; and Manual of Procedure III 6226)

The rule at Index 1150A-3 (A-750-1300) should be marked obsolete.

Illustrations

An armed guard was discharged because of a false reply to a question on his employment application as to whether he had ever been arrested. It was discovered that he had once been arrested for felonious assault but the charges were dismissed. Guard agencies are permitted by law to ask such question. Misconduct disqualification applies.

Same facts as in 1 above except that claimant was an assembler in an auto parts factory. The employer is not permitted by law to ask such question. No disqualification.

A tester in an electronics plant falsified his employment application by showing incorrect dates in his work history in order to omit a period of employment which ended in discharge for theft. He had never been arrested or prosecuted. He was discharged because of the omission. Misconduct disqualification applies.

A brokerage clerk was discharged because it was discovered he had once been convicted of possession of marijuana. Although he had denied any prior arrests or convictions on his employment application, he was not discharged for such denial. Employer was unable to show justification for the discharge as described under IB above. No disqualification.

A presser in a sportswear factory was discharged because of a pending criminal charge of rape, not connected with his employment. Although the discharge was not unlawful, no disqualification applies.

A bookkeeper for a wholesale bakery was discharged when it was discovered she had been convicted of an embezzlement charge filed by a former employer. No employment application had been required by the bakery, but it was able to show justification for the discharge as described under IB above. No disqualification applies, since there was no misconduct in connection with claimant's employment at the bakery .

A supermarket cashier was discharged for attempting to leave the premises with a can of coffee for which she had not paid. No charges were pressed by the employer. Disqualification for misconduct applies.

(The text of Sections 296.14 and 296.15 of Article 15 of the New York State Executive Law, and pertinent provisions of Article 23A of the New York State Correction Law, are attached.)

New York State Executive Law, Article 15

Section 296.14

It shall be an unlawful discriminatory practice, unless specifically required or permitted by statute, for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to make any inquiry about, whether in any form of application or otherwise, or to act upon adversely to the individual involved, any arrest or criminal accusation of such individual not then pending against that individual which was followed by a termination of that criminal action or proceeding in favor of such individual, as defined in subdivision two of section 160.50 of the criminal procedure law, in connection with the licensing, employment or providing of credit or insurance to such individual; provided, however, that the provisions hereof shall not apply to the licensing activities of governmental bodies in relation to the regulation of guns, firearms and other deadly weapons.

Section 296.15

It shall be an unlawful discriminatory practice for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to deny any license or employment to any individual by reason of his having been convicted of one or more criminal offenses, or by reason of a finding of a Lack of "good moral character" which is based upon his having been convicted of one or more criminal offenses, when such denial is in violation of the provisions of article twenty-three-a of the correction law.

New York State Correction Law, Article 23A

Section 752

Unfair discrimination against persons previously convicted of one or more criminal offenses prohibited

No application for any license or employment, to which the provisions of this article are applicable, shall be denied by reason of the applicant's having been previously convicted of one or more criminal offenses, or by reason of a finding of lack of "good moral character" when such finding is based upon the fact that the applicant has previously been convicted of one or more criminal offenses, unless:

there is a direct relationship between one or more of the previous criminal offenses and the specific license or employment sought; or

the issuance of the license or the granting of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

Section 753

Factors to be considered concerning a previous criminal conviction; presumption

1. In making a determination pursuant to section seven hundred fifty-two of this chapter, the public agency or private employer shall consider the following factors:

The public policy of this state, as expressed in this act, to encourage the licensure and employment of persons previously convicted of one or more criminal offenses.

The specific duties and responsibilities necessarily related to the license or employment sought.

The bearing, if any, the criminal offense or offenses for which the person was previously convicted will have on his fitness or ability to perform one or more such duties or responsibilities.

The time which has elapsed since the occurrence of the criminal offense or offenses.

The age of the person at the time of occurrence of the criminal offense or offenses.

The seriousness of the offense or offenses.

Any information produced by the person, or produced on his behalf, in regard to his rehabilitation and good conduct.

The legitimate interest of the public agency or private employer in protecting property, and the safety and welfare of specific individuals or the general public.

2. In making a determination pursuant to section seven hundred fifty-two of this chapter, the public agency or private employer shall also give consideration to a certificate of relief from disabilities or a certificate of good conduct issued to the applicant, which certificate shall create a presumption of rehabilitation in regard to the offense or offenses specified therein.

Section 754

Written statement upon denial of license or employment

At the request of any person previously convicted of one or more criminal offenses who has been denied a license or employment, a public agency or private employer shall provide, within thirty days of a request, a written statement setting forth the reasons for such denial."