Dishonest treasurer, business official to return $1.5 million of compensation

On Board Online • June 7, 2010

By Kimberly A. Fanniff
Associate Counsel

Two former employees of a school district who previously pled guilty to stealing from the district over a period of years were ordered to pay more than $1.5 million (combined) to the school district. This figure represents the compensation and benefits the former assistant superintendent for business and district treasurer had received after their first acts of disloyalty.

In William Floyd UFSD v. Wright, a state Supreme Court rejected the defendants attempt to re-litigate their claim that they should only repay compensation associated with the tasks related to their acts of disloyalty. The court also rejected arguments that the penalty was excessively harsh and tantamount to the imposition of punitive damages. According to the court, it is well-recognized that the "disgorgement of compensation received by a faithless employee is not tantamount to the imposition of punitive damages."

The decision marks a second major victory for the William Floyd district with respect to this matter. Last year, an appellate court permanently relieved the school district of its obligation to pay health, dental and life insurance premiums to the employees upon their retirement. The court ruled that "under the faithless servant doctrine" their "repeated acts of disloyalty [warranted] a complete and permanent forfeiture of compensation, deferred or otherwise..."

Board members who testified in disciplinary hearing

should have recused themselves from vote, court rules

The termination of a business manager was overturned by the Second Department of the Appellate Division of state Supreme Court because two board members who testified at the hearing also voted to approve the hearing officer's findings and termination recommendation.

In Baker v. Poughkeepsie City School District, the district superintendent proffered eight charges of misconduct and/or incompetence against Baker pursuant to section 175 of the Civil Service Law. The board appointed a hearing officer, and two board members testified. The hearing officer found Baker guilty of the charges and recommended his termination. All members of the school board participated in the vote to confirm the hearing officer's recommendation and terminate Baker.

On appeal, the Second Department stated that, due to their personal involvement in the matter, the two members of the board who testified at the hearing should have disqualified themselves from reviewing the hearing officer's recommendation. The court annulled the termination and returned the matter to the board, excluding the members who had testified. Additionally, the court stated Baker was entitled to back pay and benefits, even if the proceedings against him eventually lead to termination.

Shortly after receiving the appellate court's decision, the board members who were not precluded from participation voted to terminate Baker. The school district plans to appeal the decision to the Court of Appeals, the state's highest court.

District not liable for student's injuries at off-campus extracurricular activity

A student who allegedly was burned as the result of an accident at an off-campus extracurricular activity will not be able to recover money from the school district in connection with the incident.

The student, a member of the school's Rotary Interact Club, volunteered to assist at a spaghetti dinner. She was injured when one student attempted to light a sterno canister with another and subsequently dropped both when flames appeared. The students had been instructed to notify restaurant staff when a canister went out.

Generally, school districts have a duty to supervise students in their charge and will be held liable for foreseeable injuries caused by a lack of adequate supervision. In Hansen v. Bath & Tennis Marina Corp., the school district argued that it did not have a duty to supervise the student at an off-campus event it did not run. The district further argued that if it did have a duty to supervise the student, her injuries were not foreseeable. The court agreed and granted judgment for the district stating that, even assuming the district had a duty to supervise, it was not foreseeable that a student would attempt to light a canister herself.