Enforcing disciplinary settlement agreements

Enforcing disciplinary settlement agreements
Lyons v Whitehead, 2 AD3d 638

The Appellate Division's decision in the Lyons case demonstrates the importance of making certain that the terms and conditions of a disciplinary settlement agreement clearly indicate the expectations of the parties.

Carol Lyons, an employee at the Letchworth Developmental Disabilities Service, and James J. Whitehead, the Director of Letchworth, had entered into a disciplinary settlement agreement that provided that Lyons would participate in a treatment program to treat her abuse of prescription drugs. The settlement required Lyons to follow the program's attendance requirement, and to complete the program.

The agreement also provided that Lyons would be placed on "general probation status" for one year, and that her employment could be terminated for a violation of her probation without any further hearing "except for time and attendance infractions".

Lyons failed to attend a scheduled "medication course." Whitehead viewed this as a breach of the Settlement Agreement and terminated Lyons' employment. Acting on behalf of Lyons, the Civil Service Employee's Association, Inc., sued. They asked for a court order reinstating Lyons to her position. CSEA argued that Lyons' failure to attend the medication course was a "time and attendance infraction" and thus she could not be summarily terminate under the terms of the Settlement Agreement.

Although the Supreme Court directed that Lyons be restored to her employment, the Appellate Division reversed and remanded the case to the lower court to determine whether Lyons' failure to attend the "medication course" was a "time and attendance infraction" under the Settlement Agreement.

The Appellate Division ruled that "[b]ecause the Settlement Agreement is a contract between the parties, it must be construed according to ordinary contract law." Accordingly, the court must "determine the intention of the parties as derived from the language employed in the contract", and it "should strive to give a fair and reasonable meaning to the language used," citing Abiele Construction v New York City School Construction Authority, 91 NY2d 1.

It is clear that the appellant could terminate Lyons' employment for a violation of her probation, "except for time and attendance infractions." Was Lyons' absence from the "medication course" a breech of the Settlement Agreement?

Whitehead maintained that attending the medication course "was part of the treatment program" that Lyons agreed to attend as part of the Settlement Agreement. CSEA, on the other hand, argued that it was "a mandatory course for all employees working at [Lyons'] grade and title for recertification to perform the duties of dispensing medication to patients" and thus her absence was a "time and attendance" problem excluded under the Settlement Agreement.

The court decided that the nature of the medication course could not be determined from the record and therefore it could not decide whether or not Lyons' failure to attend it was a "time and attendance infraction" or a breach of the disciplinary settlement agreement.

Thus, said the court, "the matter must be remitted to the Supreme Court, for a hearing on the question of whether the medication course was the same as the treatment program, and if not, whether her absence falls within the category of "time and attendance infractions." The Appellate Division said that the lower court "had to make a new determination" based on its answer to these questions.

The basic idea underlying the Lyons decision is that the court must interpret and apply the terms set out in a disciplinary settlement agreement precisely. The decision in Taylor v Cass, 505 NYS2d 929, illustrates this point.

Taylor, a former Suffolk County employee, won reinstatement with full retroactive salary and contract benefits after a court found that he was improperly dismissed while serving a six-month disciplinary probation.

The disciplinary settlement provided that the County could terminate Taylor without any hearing if, in the opinion of Taylor's superior, Taylor's job performance was "adversely affected by his intoxication on the job during the next six months."

Taylor, while serving this six-month disciplinary probationary period, was terminated without a hearing after what his supervisor described as Taylor's "failing to give a fair day's work" and "sleeping during scheduled working hours".

Taylor challenged his dismissal and won reinstatement with back pay. Why? The Appellate Division decided that Taylor's dismissal was improper because he was not summarily terminated for the sole reason specified in the disciplinary settlement agreement: intoxication while on the job.