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Employees of an entity providing services to a school district pursuant to a contract are not employees of the school district

Employees of an entity providing services to a school district pursuant to a contract are not employees of the school district
Handley v New York State Teachers' Retirement Sys., 2010 NY Slip Op 04667, decided on June 3, 2010, Appellate Division, Third Department [5 proceedings]

Brett A. Handley, Kenneth M. Ford, Theresa Phillips, Neil Tebbano, Thomas M. White all worked for Project Lead The Way, Inc. [PLTW], a not-for-profit corporation, provided services to public schools pursuant to contracts. All of the individuals employed by PLTW were previously employed by one or more school districts and had joined and were, thereby, members of the New York State Teachers? Retirement System [TRS].

Following their employment by PLTW each individual continued to be reported to TRS as an employee of the school district, a participating employer in TRS, and thus were accumulating retirement member service credit in TRS.

Following an investigation, TRS said that the individuals employed by PLTW were not entitled to service credit because they were not employees of a participating employer or, alternatively, because they were not providing teaching services within the meaning of Education Law §501.

The five sued and a State Supreme Court judge granted their petition and annulled the recalculated service credit or retirement benefits as determined by TRS.

The Appellate Division reversed the lower court?s ruling. In the words of the court: ?The actual transactions between the contracting parties ? and not the labels assigned to their relationships pursuant to a contract or otherwise ? determine whether an employer-employee relationship exists.?

Accordingly, the issue to be resolved was whether the five individuals were employees of the several educational institutions that had contracts with PLTW. The Appellate Division concluded that based on the record before it they were not. Rather, said the court, the record indicated that they all were employees of PLTW.

Among the elements supporting the determination that the five were employees of POLTW and thus ineligible for TRS member service credit and, or, TRS retirement benefits based on their respective service with PLTW:

1. The salaries, benefits and expenses of all of the individuals were ultimately paid by PLTW

2. Their job responsibilities involved developing and promoting the PLTW program nationally and were not specific to their school districts.

3. With one exception, none of the individuals had an office at any of the facilities of the school districts with which PLTW had a contract and either worked from their home or from PLTW's offices.

4. All of the individuals received their job assignments from PLTW and there was nothing in the record to indicate that any of the individuals were supervised by any school district administrator or employee.

Ruling that TRS presented evidence that was ample to support its determination that the five individuals were not employees of the relevant school districts, the Appellate Division concluded that the respective determinations made by TRS with respect to the member service credit and retirement allowances to be paid to the five individuals were neither arbitrary nor capricious.

The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2010/2010_04667.htm

Full post as published by New York Public Personnel Law on June 08, 2010 (boomark / email).