Harry Nespoli Fails to File a Final Appeal to Protect the Pension Rights of His Union Members

In January 2017, I wrote a post about how NYCERS was stripping pension rights from Tier 4 members who became sanitation workers after 4/1/2012 based falsely on the new Tier 6 law.

To make this issue simple, Tier 6 does not force Tier 4 members into Tier 6-3 just because the member becomes a sanitation worker and even if it did, it would be unconstitutional.

In November 2016, four and a half years after the passage of Tier 6 NYCERS changed its previous position on this issue and began sending notices to certain Tier 4 sanitation workers that their Tier 4 Sanitation benefits were being revoked and they were being forced into Tier 6-3 Sanitation benefits.

On 11/15/2016 Harry Nespoli filed a complaint in court against the NYCERS Board of Trustees attempting to reverse this blatant attack on his union members' pension rights.

NYCERS Board of Trustees

There are three votes out of seven on the NYCERS Board of Trustees controlled by the three largest city unions. Nespoli was and continues to be head of the MLC, the organization representing all city unions. It is not clear whether Nespoli spoke to the three union reps on the Board of Trustees about this issue. There should have been a full debate about this issue at a board meeting. This would have been the best way of handling this issue and preventing unnecessary litigation.

The Six Other NYS Pension Systems

In addition, there are implications of this issue for the other six NYS pension systems.

For instance, I have a strong suspicion that
a 2008 Tier 4 NYCERS member who joined NYPD in 2013 is covered by Tier 2 police pension benefits and
a 2011 Tier 4 NYCERS member who joined NYPD in 2013 is covered by Tier 3 pre-Tier 6 pension benefits.

This is counter to the NYCERS position.

Trial Court

Four and a half years later, on 6/10/2021, the trial court reached a court decision on this issue. The trail court incorrectly decided that NYCERS was an expert on pension law and confirmed its unfounded actions.

Nespoli appealed the trial decision.

First Department

On 5/5/2022 the First Department Appellate Court upheld (case # 02096-2021) the incorrect trial court decision. It discarded the constitutional pension protection clause with only the following statement which is, on its face, factually incorrect.

Petitioners’ reclassification did not violate the New York State Constitution (NY Const art V, § 7[a]), since “petitioners were never entitled to [SA]-20 benefits to begin with and, thus, did not have a contractual right to those benefits” (Matter of Ly, 189 AD3d at 1413).

In fact, on March 30, 2012, every Tier 4 NYCERS member was eligible to be covered by the SA-20 plan if he or she became part of the Uniform Sanitation Force. The court is saying they did not, in complete denial of reality. What we have here is a blind umpire.

On April 1, 2012, Tier 6 can not take away a pension right that existed on March 30, 2012, the day before. The scary thing about this decision is that there is no rational argument supporting it.

Court of Appeals

There is no record on the court website that Nespoli filed an appeal to the NY Court of Appeals. This is a constitutional issue and there are impacts for the other six NYS pension systems. It is clear that this issue should have been taken to the Court of Appeals.

Of course, this was the same time that the City and the MLC were busy trying to deprive city retirees of their Medicare supplemental health insurance benefits in order funnel the money saved into union welfare funds.

NYS Constitution

The following is the text from the N.Y. Constitution Article V, § 7:

"The rights of public employees are thus fixed as of the time the employee becomes a member of the system. We have consistently held that the constitutional prohibition against diminishing or impairing retirement benefits prohibits official action during a public employment membership in a retirement system which adversely affects the amount of the retirement benefits payable to the members on retirement under laws and conditions existing at the time of entrance into retirement system membership. "

I

Update on Nespoli Case - Attack on Sanitation Workers Pension Rights - 2019

December 16, 2019: still no action from the trial court, three years later.

Update: On July 1, 2019 after a year and half delay the court scheduled a settlement conference for August 7, 2019. On August 2, 2019, Corp Counsel submitted a written request for a delay until after September 3, 2019 due to his vacation schedule. This case is almost three years old having started in November 2016. The court has yet to schedule a new date.

Perviously I have written about the Nespoli case dealing with NYCERS's attempt to force Tier 4 NYCERS members into the Tier 6 Sanitation Plan when they were appointed as Sanitiation workers. This legal action started on November 15, 2016.

Finally on Jan 22, 2018, NYCERS provided a written argument attempting to justify its position. On February 23, 2018 Nespoli was able to rebut NYCERS's flawed logic. I consider NYCERS's arguments particularly dishonest and lame.

You can read both arguments on the NYS Court Scroll web site referring to the folllowing Index# 159601-2016 for NY County.

Update on the Nespoli Case

Perviously I have written about the Nespoli case dealing with NYCERS's attempt to force Tier 4 NYCERS members into the Tier 6 Sanitation Plan when they were appointed as Sanitiation workers. This legal action started on November 15, 2016.

Finally on Jan 22, 2018, NYCERS provided a written argument attempting to justify its position. On February 23, 2018 Nespoli was able to rebut NYCERS's flawed logic. I consider NYCERS's arguments particularly dishonest and lame.

You can read both arguments on the NYS Court Scroll web site referring to the folllowing index number = 159601-2016 for NY County.

Nespoli v. NYCERS: Unlawful Denial of Tier 4 Rights for Correction Officers, Sanitation Workers, and DA Investigators

Last January 2, 2017 I wrote a posting about how NYCERS was forcing current Tier 4 members into Tier 6 at the point when they started working as a Sanitation Workers after leaving another city job covered by NYCERS. NYCERS has not given any legal justification for this action. Tier 6 went into effect for NEW NYCERS members as of April 1, 2012. It has no impact on members who joined before that date.

This action by NYCERS is clearly an illegal. In New York State the pension rights of state and local government employees are protected from being reduced by the N.Y.S. Constitution, Article V, Section 7. (Klienfeldt v NYCERS, 36 NY.2d 95 (1975) and CSEA v Regan, 71 NY2d 653 (1988))

Klienfeldt:

The Supreme Court declared the statute unconstitutional as applied to plaintiff and all others similarly situated who became members of a public retirement system prior to April 1, 1972, the "effective date" of the statute. The court held that plaintiff is entitled to receive a retirement allowance based upon his full final salary for the 12-month period immediately preceding his retirement, without consideration of the statutory limitation. The Appellate Division unanimously affirmed.

There should be a modification. Subdivision 4 of section 431 of the Retirement and Social Security Law, as applied to any civil service employee who became a member of a public retirement system prior to its effective, independent of its operative, date, prescribes a diminution and impairment of the benefits of membership in the retirement system, in violation of the Constitution. However, the effective date of subdivision 4 of section 431 is June 17, 1971, the date of its enactment, and not April 1, 1972, the operative date from which excess compensation, as defined in the statute, would no longer be included in final average salary. Thus, the statutory limitation may not be applied to those who became members before June 17, 1971.

Regan:

New York Constitution, article V, § 7 was adopted in 1938 in response to Roddy v Valentine ( 268 N.Y. 228). This court there held that retirement benefits were not contractual and could be legislatively altered until the member actually retired (see, Public Employees Fedn. v Cuomo, 62 N.Y.2d 450, 459; Birnbaum v New York State Teachers Retirement Sys., 5 N.Y.2d 1, 8). In response to Roddy, article V, § 7 provides in pertinent part that "membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired" (NY Const, art V, § 7 [emphasis supplied]).

The rights of public employees are thus fixed as of the time the employee becomes a member of the system.

On November 15, 2016 Harry Nespoli and the Sanitation Workers' local, U.S.A. Local 831, I.B.T. filed an action against NYCERS over this issue ( index number = 159601-2016 , NY County). Usually you can track the progress of this litigation using the NYS Court on-line system, the SCROLL web site.

The action has been dragging on since then over procedural issues. Based on a November 13, 2017 procedural court decision, Nespoli has until December 8, 2017 to file his Article 78 action. These filings are now on the SCROLL web site, happy reading. NYCERS and the city has until January 5th to respond and Nespoli has until January 19 to reply.

I suspect that some idiot at NYCERS initiated this misguided action in the same way some idiot attacked the Correction Officers military service rights in McGarrigle v City of New York back in 2004. Once the Law Department gets the bit in their teeth, however, they won't ever let go. Even if they know they are wrong. I found this out the hard way when I was NYCERS executive director. When I told the Law Department that the NYCERS legal division had made a serious mistake with the Correction Officers military service rights, I was told that once they start an action, they can't back off. Our tax dollars at work!

In addition, this unsupported action by NYCERS denying Tier 4 rights raises serious questions about how to process Tier 4 members transferring in from other NYS retirement systems like the new NYCERS executive director. She was a Tier 4 member with NYSLERS before moving to NYCERS. It also raises issues with how NYC Police Pension Fund and FDNY Pension Fund are processing new members who have pre-2009 and pre-2012 Tier 4 memberships in other NYS pension systems.

Tier 4 Sanitation Workers Being Forced into Tier 6 - also Correction Officers and DA Investigators

Two months ago in the beginning of November, NYCERS started sending letters to a group of Tier 4 Sanitation Workers. The letters stated that NYCERS had incorrectly put them in the Tier 4 Sanitation 20 Year Plan.

This group of Sanitation Workers had NYCERS membership dates prior to April 1, 2012 but had stared working as Sanitation Workers after April 1, 2012, the date that Tier 6 became effective. Originally, NYCERS had correctly placed these members in the Tier 4 Sanitation Plan.

Now NYCERS, ignoring their pre April 1, 2012 membership dates, was stating that since they started working as Sanitation Workers after April 1, 2012, NYCERS was stripping them of their Tier 4 rights and putting them in Tier 6. This was a serious reduction in their benefits. This problem will continue to occur whenever a Tier 4 member becomes a Sanitation Worker, Correction Officer, or DA Investigator.

In New York State the pension rights of state and local government employees are protected from being reduced by the N.Y.S. Constitution, Article V, Section 7. (Klienfeldt v NYCERS, 36 NY.2d 95 (1975) and CSEA v Regan, 71 NY2d 653 (1988))

In addition to violating members' contractual rights guaranteed under the N.Y.S. Constitution, NYCERS provided

1. no legal analysis supporting this change in procedure,
2. no pre-deprivation hearing to the members to allow them to challenge this negative decision,
3. no notice to these members that they have 120 days to file an Article 78 in N.Y.S. Courts to fight this arbitrary and capricious decision.

And finally in classic NYCERS fashion, these letters were not signed.

To rub salt in the wound, NYCERS told these members that all of their Tier 4 Sanitation contributions plus interest would be refunded to them along with the resulting tax liability that would adhere to that refund. Of course, they will have to repay this money with interest in the Tier 6 plan.

I now know that there are comparable groups of Correction Officers and DA Investigators who have been illegally forced in Tier 6. I'm not sure whether they were all given notice.

The NYCERS operating budget is fully funded by the assets of the members and retirees of NYCERS. Why is NYCERS so hostile to the membership? This atrocious legal decision by both D'Alessandro and Mazza is another sign of the total chaos occurring at NYCERS.

Listed below is the new wording added in 2012 which created the Tier 6 Sanitation/Correction membership. A member becomes subject to an article of the Retirement and Social Security Law as of their membership date not their employment date.

25. "New York city uniformed correction/sanitation revised plan member" shall mean a member who becomes subject to the provisions of this article on or after April first, two thousand twelve, and who is a member of either the uniformed force of the New York city department of correction or the uniformed force of the New York city department of sanitation. (Section 501.25 of the NYS-RSSL)