Home -> Law Blog Directory -> Labor & Employment Law Blogs -> New York Public Personnel Law

Labor & Employment Law

: New York Public Personnel Law

Early retirement agreements

Early retirement agreements
Lilker v Village of Freeport, Supreme Court Nassau Co., [Not officially reported]

The Village of Freeport Trustees decided that an unprecedented budget deficit required it to reorganize the village?s police force. The plan called for the establishment of the position of ?police chief? and the elimination of the title ?inspector.? The reorganization plan would result in two inspectors, Locke and Honkanen, being given lower grade positions with reduced salaries.

Locke and Honkanen protested, claiming that the proposed change in their status would constituted a ?breach the contract between them and the Village and they would have no option but to commence litigation.? According to the opinion, ?Locke and Honkanen were employed by the Police Department pursuant to a contract renewed in May, 1997, and which retained their services as police inspectors to February 28, 2000.?

In an effort to avoid such litigation and still implement the reorganization plan, the Village and Locke and Honkanen agreed that both inspectors would voluntary retire effective December 31, 1997, instead of February 28, 2000. The agreement also provided for lump sum overtime payments to be made to the inspectors upon their retirement. According to the Village, had it not entered into the agreement, it would have had to reduce the size of its police force. This would mean it that six to eight officers would have to be laid off in order to obtain the necessary fiscal savings.

Lilker, a Freeport resident, objected to the agreement and sought a court order barring its implementation. New York State Supreme Court Justice Dunne dismissed Lilker?s petition, in effect holding that the Village could make enter into a ?settlement? providing for payments to two individuals under an agreement requiring their voluntary retirement by a specified date.

Justice Dunne held that ?[t]he [Village?s] Board of Trustees has the right to negotiate the settlement of a potential claim in order to avoid costly and uncertain litigation.? In support of this determination, Justice Dunne cited two cases: another case brought by Lilker, Lilker v. Board of Education, Index No. 20053/93, decided July 18, 1995] and Look v Board of Ed. of Lawrence School District, 140 AD2d 440.

The court said that records demonstrated that the negotiated severance agreements were legitimate transactions, resolving a genuine dispute concerning the structure and organization of the village?s police department in light of the fiscal situation of the village at the time.

Justice Dunne also observed that the severance agreements were made upon adequate consideration and should be construed as the payment of public funds in settlement of a contested claim. This transaction, he ruled, did not violate the constitutional prohibition against gifts of public funds.

One of the arguments made by Lilker was that the village was ?not authorized to pay overtime.? The court pointed out that Section 90 of the General Municipal Law specifically allows villages to authorize the payment of overtime to public employees. Accordingly, the Village?s Board of Trustees lawfully authorized the Mayor to execute the contract and authorized the overtime compensation.

As to the requirements that must be satisfied in order to obtain a preliminary injunction such as Lilker sought, the Court said that the petitioner had to show (1) a probability of success; (2) a danger of irreparable injury in absence of an injunction; and (3) a balance of the equities in his or her favor. As Lilker was unable to meet any of these requirements, the motion for a preliminary injunction was denied and the case dismissed.

Full post as published by New York Public Personnel Law on September 10, 2009 (boomark / email).