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Cypen & Cypen
NEWSLETTER
for
JUNE 25, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. CITY OF MIAMI RETIREES’ HEALTH INSURANCE PREMIUMS NOT FROZEN:

As part of its retirement process, the City of Miami extended to eligible employees the opportunity to continue their group health insurance coverage. From 1971 to 1983, the City asked those employees who were retiring to fill out and sign a short form, which basically asked employees if they wished to continue participating in the health insurance program and, if so, to authorize deduction of their health insurance premiums from their pension checks. The premium amounts shown on the forms were the employees’ contributions in effect on date of retirement. Subsequently, the City increased health insurance premiums for both its active employees and participating retirees. In a class action covering those who retired between 1971 and 1983, the trial court found the forms to be enforceable contracts, which, in the absence of any mention of future premium increases, bound the City to provide insurance coverage to the retirees indefinitely in accordance with the rates stated in the forms. On appeal, the Third District Court of Appeal reversed:

In reviewing the various forms signed by the retirees, we clearly identify an authorization by the retirees to have their contribution or premium for health insurance coverage deducted from their pension payments. While the forms included either the amount paid by the retiree as a contribution or premium, or an election by the retiree of the desired coverage and corresponding premium, with the amount shown as that in effect at the time of retirement, this information was necessary in order for the correct deduction to be made from each retiree’s pension payment. The forms simply gave the retirees who wished to continue participating in the City’s health insurance plan a method for paying their contribution or premium cost. There is nothing in the forms whereby one could conclude that the parties agreed that the contribution or premium amount shown on the form would continue unchanged.

City of Miami v. Case, Case Nos. 3D00-2780 and 3D00-2807 (Fla. 3d DCA, June 23, 2004)

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2. U.S. SUPREME COURT RULING ALLOWS AFFIRMATIVE DEFENSE IN CERTAIN CONSTRUCTIVE DISCHARGE CASES:

In a case under Title VII of the Civil Rights Act of 1964, in order to establish hostile working environment, plaintiffs must show harassing behavior sufficiently severe or pervasive to alter the conditions of their employment. Beyond that, to establish “constructive discharge,” a plaintiff must make a further showing: she must show that the abusive working environment became so intolerable that a resignation qualified as a fitting response. An employer may defend against such claim by showing both (1) that it had installed a readily-accessible and effective policy for reporting and resolving complaints of sexual harassment and (2) that plaintiff unreasonably failed to avail herself of that employer-provided preventive or remedial apparatus. This affirmative defense will not be available to the employer, however, if plaintiff quits in reasonable response to an employer-sanctioned adverse action officially changing her employment status or situation, for example, a humiliating demotion, extreme cut in pay or transfer to a position in which she would face unbearable working conditions. Pennsylvania State Police v. Suders, Case No. 03-95 (U.S., June 14, 2004).

3. SECURITY SYSTEM INFORMATION EXEMPT FROM DISCLOSURE:

Our readers know that Florida has a very broad public records law. However, there are exceptions. For example, Section 119.071, Florida Statutes, provides that a security system plan or portion thereof in possession of any agency, is confidential and exempt from disclosure. The term “security system plan” includes all records, information, photographs, audio/visual presentations, schematic diagrams, surveys, recommendations or consultations or portions thereof relating directly to the physical security of a facility or revealing security systems. The Florida Attorney General has determined that said statute (as well as Section 281.301, Florida Statutes) precludes public disclosure of the name and address of applicants for security system permits, of persons cited for violations of alarm ordinances or of individuals who are the subject of reports of dispatches of law enforcement for verified or false alarms. AGO 2004-28 (June 18, 2004).

4. CIVIL SERVICE EMPLOYEE WHO PURSUES ADMINISTRATIVE REMEDY PRECLUDED FROM INDEPENDENT ACTION:

Following the general rule in Florida, the Third District Court of Appeal has held that where a civil service employee pursues civil service administrative remedies, the employee is precluded from bringing an independent action in circuit court to challenge propriety of her discharge. Once the employee submits herself to the administrative review procedures provided by ordinance, the employee has been afforded a quasi-judicial hearing and is not entitled to a de novo hearing in circuit court on the claim. Instead, the employee must institute an appellate proceeding in the circuit court appellate division to review the adverse determination. Miami-Dade County v. Moreland, 29 Fla. L. Weekly D1258 (Fla. 3d DCA, May 26, 2004). This case is to be distinguished from a recent case wherein no action was taken upon an employee’s request for arbitration of his grievance (see C&C Newsletter for June 8, 2004, Item 7).

5. CITY OF TAMPA TEMPORARILY ENJOINED FROM USING POLICE OFFICER’S PRIVATE MEDICAL RECORDS IN UNRELATED INVESTIGATION:

Cochran is a 15 year veteran with the City of Tampa Police Department. Under threat of disciplinary action, Cochran signed medical releases. He then brought suit against the City, seeking a temporary injunction preventing the City from using his medical records in an unrelated internal affairs investigation. Because the City did not show that there was a direct connection between Cochran’s job-related performance and the otherwise-private medical information being sought, the circuit judge granted a temporary injunction. While it has been held that a law enforcement officer is required to answer questions specifically, directly and narrowly relating to performance of his official duties, and that he has no legitimate expectations to privacy involving performance of job-related duties, an officer may be protected from questioning in regard to non job-related matters in which he has a reasonable expectation of privacy. However, the Court did leave the door open for the City to connect the dots: “Upon proper motion and showing a connection between Cochran’s job-related actions or behavior and the medical information sought to be obtained, the City may apply to lift the injunction.” Cochran v. The City of Tampa, 11 Fla. L. Weekly Supp. 556 (Fla. 13th Cir., April 5, 2004).

6. SHOULD SECURITIES LENDERS STICK WITH JUST CUSTODIANS?:

An ASTEC Consulting study, reported in plansponsor.com, analyzed the securities lending programs of ten large U.S. public pension plans between 2000 and 2002, finding that, in 2002, public funds with at least one non-custodial provided earned 40% more on average than funds that used only their custodian for securities lending. However, pension boards looking beyond their custodians for securities lending will be advanced a number of arguments against such a move. They will learn that third-party lenders are inadequately capitalized and that the indemnities they offer are worthless. Much emphasis will be put on the time-consuming, costly and complex process of putting a third-party support operation in place. They will also be told that allowing securities to be loaned through a third party will diminish the accuracy and value of the core custody accounting, performance measurement and reporting tools. Nevertheless, perhaps the surest indication that third-party programs are gaining steam is the fact that custodians themselves are staffing their own third-party lending operations more aggressively. At this stage, only large pension pools have a choice as to how they will lend securities; for small and relatively uninteresting portfolios, it probably always will be difficult to get beyond their custodian as agent lender.

Copyright, 1996-2004, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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