The Arkansas State Police Association (ASPA) must pay taxes on income the group received from publication of its magazine, the federal Court of Appeals for the Eighth Circuit ruled in early March. The revenue, over $875,000, should be considered taxable "unrelated business income" not tax-exempt royalty income as the union argued, the appeal judges said in upholding the original determination of the U.S. Tax Court. Federal tax law provides that an otherwise tax-exempt organization will be taxed on business income generated from activities unrelated to the exercise of its tax-exempt activities.
In 1993, the troopers' association, a tax-exempt labor organization, hired
Brent-Wyatt West (BWW), an Arizona publishing firm, to produce "The Arkansas
Trooper" three times a year. BWW bore the cost of production and solicited
all advertising. The ASPA provided editorial content for the magazine,
which BWW distributed to advertisers, legislators, and ASPA members. For
tax purposes, ASPA treated the income as nontaxable royalty income because
the group's participation in the
production of the magazine was minimal.
ASPA argued that the magazine revenues were similar to royalties received from "affinity" credit cards, whereby a royalty is paid when an organization member uses a specially- issued credit card. The Internal Revenue Service rejected the argument and sought $280,000 in back taxes.
The appeals court explained the difference in tax treatment of the magazine and an affinity credit card. "A royalty exists when A uses B's name to promote A's products [such as a bank using the union's name on credit cards]. But here, BWW used ASPA's name to promote ASPA, not BWW." The resulting income becomes taxable. Congress passed legislation requiring such unrelated income to be taxed in order to prevent charities from unfairly competing in the commercial marketplace against fully taxable corporations.
The ruling, Arkansas State Police Association, Inc. v. Commissioner of Internal Revenue, is consistent with similar decisions previously rendered in the First and Seventh Circuits.
Eugene Albanese earned $100,001.44 as a Nassau County, New York, police officer last year. But, he was well below the average in a department where officers earn among the highest salaries in the nation. In a year when the average salary topped $100,000 for the first time, Albanese ranked only 1,292nd among Nassau officers. According to a study by Newsday, a Long Island-based newspaper, the mean compensation of the nearly 2,800 Nassau County police officers last year reached $101,935.79. The average termination pay of retiring officers hit $221,682.
Members of the Nassau County Police Department enjoy a reputation of being
among the highest paid in the nation. However, the long-term prospects
of such a boon may be in jeopardy. The
escalating police pay is widely credited as a crucial factor in the county's
chronic fiscal crisis. County politicians claim the entity cannot continue
to pay the high salaries and blame a prior county executive for being too
generous at the bargaining table. Union officials defend the high pay and
note that the average salary figure was inflated by overtime required following
the terrorist attack in neighboring New York City. Officials also argue
that the high pay attracts and retains quality officers while keeping corruption
at bay.
The highest paid officer was Sergeant Nicholas Baudo, who earned $200,974.03, and serves as president of the Superior Officers Association. Second highest wage earner was Robert Howe, president of the detective's union, who drew $195,164.36. Baudo was unapologetic about his salary noting that when he started on the force in 1964 he earned only $5,600.
Base starting pay for a rookie officer is just
over $43,000 while average base is $72,000. Forty-six percent of the officers
earned over $100,000 last year. Police Commissioner William Willet earned
$172,974.49, eighth on the pay list.
Don Winslow credited better pay and benefits in the private sector and at other police departments as making it difficult to attract qualified individuals. Compounding hiring is Winslow's estimate that one-third of the department's applicants fail the physical agility requirement while another third to half fail the background investigation.
Ed Strong, President of the Maine Chiefs of Police Association, said that attracting recruits was a statewide problem.
Meanwhile, as previously reported, the New York City Police Department (NYPD) continues to suffer a dramatic decline in applicants. Compounding NYPD staffing problems is a recent announcement that 72 of its officers are leaving the force to join the Port Authority Police Department down the street. Why? Better pay.
Starting pay for a NYPD officer is $31,305 compared to $32,361. However, after five years Port Authority officers draw $70,344 while NYPD personnel, who are operating under an expired labor contract, earn $51,978.
The Port Authority Police Department lost 37 of its 1,300 officers on September 11 as the agency was responsible for providing police services at the World Trade Center. Since the incident Port Authority personnel have been working 12-hour shifts, six days a week.
In a not unexpected move, the shortage of applicants is spurring some law enforcement agencies to begin modifying their selection standards. Most recently, the Virginia State Police (VSP) announced it would no longer disqualify applicants who have tried certain drugs or been convicted of drunken driving. Similarly, Bangor, Maine, has dropped its requirement that applicants possess a two-year degree in criminal justice or two years of prior law enforcement experience.
The modifications in hiring criteria come in response to a nationwide near crisis in shortage of police applicants. Despite an economic slowdown with attendant employee layoffs and attention heaped on public safety personnel following the World Trade Center tragedy, virtually all law enforcement agencies have suffered a significant decline in applicants over the last year.
VSP's new rules allow consideration of applicants convicted of driving under the influence over five years in the past. Likewise, one time users of heroin or cocaine will be not be automatically disqualified. Any use of LSD or PCP remains an automatic disqualification. VSP officials denied the changes were made to help fill a current shortage of 200 employees.
Bangor officials were more candid. The department has been unable to fill four slots. Chief
Sausalito, California, voters recently turned down a proposed $7.8 million public safety building. This is not a particularly newsworthy idea as, sadly, bond proposals for such buildings are sometimes rejected by the electorate. The reason for the Sausalito rejection is interesting _ opponents campaigned that the proposed facility would destroy the town's appearance and violate its feng shui!
Feng shui is the ancient Chinese art of placing buildings and furniture
in a manner to ensure the harmonious flow of energy. The concept has been
used in recent years by architects and interior designers as an aesthetic
guide.
The vote means the city's police force must continue to operate out of portable waterfront trailers where it has been since a 1995 flood destroyed the prior police station. "We're the only trailer park in Sausalito," said Captain Jim Hyatt.
Opposition leaders in the upscale Bay-area community said they were not
against a new building for police officers and fire fighters but simply
opposed the placement and design of this particular structure.
In recent weeks justices have decided not to review several police labor-related matters. Denied consideration were Crockett v. Shields, No. 01-743, wherein a federal appeals court found that a sheriff's action in terminating a deputy in alleged violation of his First Amendment rights did not create liability for the county. The appeals court, whose decision remains in place, ruled that the sheriff was not a county policymaker for the purposes of liability under Title 42 U.S. Code § 1983.
In addition, the justices declined review of Johnson v. City of San Antonio, Texas, No. 01-924. Here, a police officer unsuccessfully argued that federal fair employment law protected him against retaliation for his opposition to superior's orders to enforce law in a discriminatory manner.
One case of interest seeking Supreme Court consideration is Ehlinger v. Granger, No. 01-1141. A female police officer sued a female sergeant and the employing city after the sergeant choked the officer, allegedly in retaliation for refusing to take part in brutalizing a prisoner. Appeals court ruled that the sergeant's action deprived the officer of a substantive due process right - the right to integrity and security of one's body. The Supreme Court has yet to decide whether to review this ruling.
Giordano was a New York City patrol officer. After serving on the force for some thirteen years he was diagnosed with an aneurism in his aorta. Doctors successfully performed corrective surgery. However, to prevent the danger of future blood clotting, a common risk with such surgery, Giordano's physicians instructed him to take Coumadin, an anti-coagulant blood thinner, daily. When Giordano returned to work, he was placed on restrictive duty but ultimately returned to full duty. Meanwhile, the department began a medical investigation to determine whether Giordano would be capable of continuing to perceived Giordano as unable to work in a broad class of jobs. His ADA claim fails. As to his claim of denial of equal protection of the law, Giordano claims that the police department must, at a minimum, articulate a rational basis for treating him differently from the other officer who takes blood-thinning medicine. Such is not the case. Rather, the law requires that a plaintiff, such as Giordano, prove that the department intentionally discriminated against him. While the evidence suggests the department was aware of the other officer who took Coumadin, nothing suggests that the department was purposely discriminating against Giordano. Finally, the former officer claims he was denied due process of law because the medical board did not conduct a personal physical examination of him. The record reflects that his medical file was reviewed by at least six physicians in the course of the retirement determination. Conducting another physical examination of Giordano would have served no useful purpose. Trial court ruled correctly in dismissing former officer's claims. [Giordano v. City of New York, New York, 274 F.3d 740 (2nd Cir. 2002)]
The collective bargaining agreement between the city and the police officers' union provided compensation for kennel time for canine officers. Kennel time was the time the officers spent caring for their dogs. The officers were guaranteed the last hour of paid duty time of work each day for paid kennel time. However, the officers were not compensated for kennel time during vacation, personal days, sick days or comp time days despite the fact that the police officers maintained the dogs at their homes. A group of canine officers filed suit claiming that the city was out of compliance with the federal Fair Labor Standards Act (FLSA) in failing to compensate them for kennel time on the days not covered by collective bargaining agreement. The city argued that even if it owed the officers overtime for kennel time on their days off, there were sufficient premium payments made that the city could use to offset any overtime liability. In particular the city argued the premiums exceeded the amount of overtime liability owed. The trial court agreed to permit the city to use the extra compensation as offset and canine officers appeal.
HELD: The trial judge had ruled that the city could use payments for court time as offset against any overtime liability. The FLSA allows an employer to credit some payment against any overtime it owes. However, in examining these potential credits the closest applicable to this case is the rule whereby the employer can use premiums paid for working undesirable hours as an offset. Payment for attending court, however, does not fall within this notion of undesirable work schedules and should not be permitted to be credited toward overtime compensation. Further, the credit provision of the FLSA is designed to protect workers from the twin evils of excessive work hours and substandard wages. Prior case law holds that overtime compensation earned in a particular workweek must be paid on the regular payday for the period in which such workweek ends. The city’s method of payment was inconsistent with this law. The city argues that requiring it to make its overtime payments within the normal workweek would create unjust enrichment for the police officers because one week they would be drawing overtime whereas the following pay period there might be sufficient hours that could be used as offset. However, the system would be just as capable of abuse against the officers were the city’s position adopted. A close reading of the FLSA states that premium payments are creditable against overtime when made within a particular pay period. Thus, an employer must calculate wages and apply credits within the same workweek. Trial court erred in allowing any and all premium payments to be credited against overtime liability of the city. Reversed for officers. [Howard v. City of Springfield, Illinois, 274 F.3d 1141 (7th Cir. 2001)]
Speer was a veteran police lieutenant. In 1996, Combs, a prisoner in the county jail, alleged that Speer had engaged in sexual acts with various prisoners in exchange for favors such as reduced jail time and reduced fines. The local prosecutor, upon hearing of these allegations, asked the state police to conduct an investigation. During the ensuing investigation Hill similarly reported that Speer had had sex with Combs and another jail detainee in exchange for various favors. Hill alleged that Speer had propositioned her for sex in exchange for early release from jail. Following completion of the investigation the mayor and police chief decided to terminate Speer from the department. After the dismissal, a newspaper reporter contacted both the mayor and the prosecutor to discuss the investigation and the employment action taken against Speer. A subsequent news article about the matter quoted the prosecutor as saying the allegation against Speer concerned the officer trading sex with female suspects for favors. The mayor was also quoted in the newspaper concerning the matter. A week after the article appeared Speer filed suit against the mayor, the police chief, the prosecutor, and the city claiming that he had been dismissed from his position in violation of his procedural due process rights. At trial Hill, one of the initial witnesses, recanted her prior allegations claiming that she had made the statements under pressure from the sheriff's wife who did not like Speer. Another of the females involved in the event also testified that Speer had never asked to engage in sex in exchange for favors. As a final blow to the case, the police chief testified that Combs, the original complainant, demanded to be released from jail or threatened to refuse to testify on behalf of the city. The city subsequently released her from jail and waived her fines. In light of the testimony the city conceded to the court that the allegations against Speer had all been false. Trial court issued a judgment against the city concluding that Speer had been entitled to a hearing to contest the tarnishing allegations that the mayor had made against him. Mayor and prosecutor appeal.
HELD: An at-will public employee generally has no protected interest in continued employment which would obligate a state employer to provide some form of hearing in connection with the employee's discharge. An exception to this general rule exists where a state employer creates and disseminates a false and defamatory impression about the at-will employee in connection with the discharge. In these situations the employee is entitled to a so-called name-clearing hearing. The right to a name-clearing hearing protects the employee's liberty interest in his good name and reputation and prevents a public employer from depriving an employee of that interest without due process. A public employee must make a three-part showing to establish deprivation of the liberty interest in his good name: (1) the public employer's reasons for the discharge stigmatized the employee by seriously damaging his standing in the community or foreclosing future employment opportunities; (2) the public employer disclosed the reasons publicly; and (3) the employee denied the charges that led to the employee's firing. Here, the mayor and the prosecutor argue that nothing said explicitly in the newspaper can be attributable to them. However, the article made it clear that the mayor willingly discussed the allegations against Speer with the reporter, someone whom he could logically expect to publicize what was told to him. The article also indicated that the mayor confirmed that an investigation had taken place. Based on these facts the trial court did not commit an error in concluding that the mayor disseminated a false impression of Speer in connection with his discharge. However, because the trial court did not make findings regarding whether specific policymakers had violated Speer's rights, the judgment against the city cannot be supported. The case is remanded for the trial court to determine who denied Speer the opportunity to clear his name and whether that person had final policymaking authority over city employment decisions sufficient to attach a liability to the city. [Speer v. Glover, 276 F.3d 980 (8 th Cir. 2002)]
Gibson, a police officer, was scheduled to serve a one-day suspension for failing to follow departmental sick leave policy. In connection with that suspension the police department required him to surrender his departmental equipment for the day. Gibson failed to do so. The following day when he was due to return to work, he placed a telephone call to a sergeant, calling in sick. Departmental policy required that an officer on sick leave report his location. During the telephone call to the sergeant, Gibson stated that he was at an address within Wilmington when in fact he was calling from the town of New Castle. When Gibson's commanding officer learned that Gibson had failed to turn in his equipment the day before, he sent a sergeant to the Wilmington address to collect the equipment. Despite his best efforts no one would respond to the
sergeant knocking at the door. The commander, believing that Gibson had lied about his location, began an investigation regarding possible dishonesty and residency rule violations. Gibson was interviewed by an internal affairs investigator. He admitted that he had not been forthright on the day that he called in sick. Administrative charges were ultimately filed against Gibson charging him with violating the department directive that required employees to be truthful and forthright at all times. The directive stated that a violation of the rule would result in dismissal. Under department procedures a hearing board was created through random selection of three captains. Prior to the hearing each captain was delivered a packet of materials regarding the case. In the packet were the descriptive statements of the charges, copies of the investigative report, transcripts of the interview with Gibson and others, and additional documentation. Following the hearing Gibson was found guilty of charges and he was dismissed. Gibson filed suit claiming that his First Amendment right to free speech and his due process rights were violated in the course of the dismissal. The city moves for summary judgment.HELD: Procedural due process protections apply only to an individual deprived of a recognized property or liberty interest. Property interests are created by state law. A public employee has a property interest in continued employment if, under state law, the employee has a legitimate claim of entitlement to the position. If an employee bases that expectation on an implied employment contract, the court must rely on state contract law to determine whether or not there is a legitimate claim. Under Kansas law, public employment is presumed to be at-will and a public employee terminable at-will does not possess a protected property interest for due process purposes. Warren contends, however, that there was an implied contract of employment. He cites the fact that a grievance procedure existed under city personnel rules and that he had been told that as long as he did his job he would be the chief of police. Additionally no division head in the city had ever been summarily terminated without cause. Under Kansas law, for an implied employment contract to exist the parties must intend to enter into the contract. Here, however, the employee manual has explicit language stating that employment is at-will and that the policies do not create an express or implied agreement of employment. While a disclaimer does not always preclude the formation of an implied contract of employment, it is controlling in this case. Warren seeks to establish an implied contract on the grounds that no department head had ever been fired without cause. The evidence reflects that no precedent exists regarding termination of department heads that might give rise to an inference of an implied contract based on past practice. Even if the city managers had a history of not firing employees absent cause, this alone would be insufficient to show the existence of a contract with Warren. To do otherwise would encourage employers to occasionally fire employees for no other reason then to show that they retain the ability to do so. Warren was an at-will employee and had no constitutionally protected property interest in continued employment. The record does reflect that he had a liberty interest. When a public employer takes action to terminate an employee based upon a public statement of unfounded charges of dishonesty or immorality that might seriously damage the employee's ability to take advantage of future employment opportunities, a legally recognizable claim for relief is created. In this case, there is sufficient evidence to raise the question of whether Warren's liberty interest was violated. The report of the investigation of the police department characterized him as mismanaging the department, engaging in selective enforcement, obstructing justice, and other statements questioning his honesty and integrity. This information was published in the local newspaper. Warren has come forth with sufficient evidence to require a trial on whether the city adopted the stigmatizing statement during the course of his termination proceedings and used that statement as the basis to terminate him. Summary judgment for city except on liberty interest question. [Warren v. City of Junction City, Kansas, 176 F. Supp.2d 1118 (D. Kan. 2001)]
Roy was a police officer working a 12-hour night shift. Late one evening he drove to a service station slightly out of his city's corporate limits in order to purchase a beverage. He was wearing his uniform, driving a marked vehicle and was armed. Before he went into the service station he observed a vehicle fitting the description of a vehicle that was under criminal investigation. As he walked toward the service station building two large dogs jumped from the vehicle and came toward him, snarling and barking. He drew his service revolver and shot at them. The dogs ran off. However, an individual who was filling her gas tank at the station was struck in the ankle by one of the bullets. She subsequently filed suit against the officer. Under Florida law, municipal employees are immune from tort liability for conduct within the scope of their employment unless they act maliciously or wantonly and willfully. At trial, Roy's supervisor testified that Roy was on duty at the time and had permission to go outside his jurisdiction to get a drink. He was required to stay within one mile of his jurisdiction when taking a break. The trial court granted the officer summary judgment and injured citizen appealed.
HELD: Prior Florida law holds that a worker’s attendance to personal comfort during a refreshment break is conducive to the facilitation of the employment and brief off premise trips do not remove him from the course and scope of his employment. An on-duty police officer in a patrol car must occasionally go outside the jurisdiction to purchase food or use the restroom. It is inherent in the nature of employment and anticipated by the employer. The officer’s actions in protecting himself from being injured by the attacking dogs benefited the employer. Had he been injured the employer would have been responsible for worker’s compensation benefits. Trial court was correct in finding that Roy was within the scope of his employment and immune from tort liability under Florida law. [Ryan v. Roy, 801 So.2d 203 (Fla. Dist. Ct. App. 2001)]
The civil service commission administered a promotion test for the rank of corporal. The final eligibility list named ten officers. Moller ranked second behind Cornell. Illinois law provided that once a promotion list was established, the civil service commission submitted not more than three names from those individuals having the highest rating. However, the statute required that the department “shall not pass over the person having the highest rating on the original register more than once and shall not pass over the other person having the second highest rating in the original register more than twice.” Cornell, the highest rated candidate, was promoted. Subsequently three more names were submitted, Moller and number three and four from the list. The fourth highest rated individual was promoted. A few months later another vacancy occurred and the police chief promoted the third highest rated individual. At that point Moller filed suit alleging that the statute had been violated because he had been bypassed twice as the highest rated candidate and three times as the second highest rated candidate. Trial court found that the chief’s decision not to promote Moller was consistent with the law. Officer appeals.
HELD: Initially, Moller asserts that the statute in question creates a property right which requires the civil service commission to submit only his name for promotion to the rank of corporal. Property rights are determined by state law and a person claiming a property interest must show a legitimate claim of entitlement. Prior case law has found that the Illinois statute does not create an entitlement to promotion because it gives the promoting authority unfettered discretion to choose from among a number of the highest rated applicants for the position. A promotion roster ranking may create an expectation of promotion but an officer has no entitlement to that promotion. Moller further contends that he was passed over unlawfully after becoming the highest rated officer on the list. The language of the statute is clear. An officer does not change his rating on the original roster as individuals above and below him are promoted. Moller was number two on the original roster. When Cornell, the number one candidate, was promoted, that action did not affect Moller's position. When numbers three and four were promoted they passed Moller because they were rated lower than he. Thus, he has been passed over but not more than twice, which is the requirement of the statute. Thus far the department has not violated the promotion statute because Moller has not been passed over more than twice. Affirmed for city. [Moller v. Civil Service Commission of the City of Blue Island, 761 N.E.2d 242 (Ill. App. Ct. 2001)]
The city offered a deferred compensation plan as a benefit to its employees. An employee who participated designated the amount that would be reduced from their pay and invested it one of several tax deferred funds. The city then transferred that amount to the plan coordinator. The process of making the transfers is somewhat cumbersome and even using electronic transfers took an average of five to ten days to accomplish. Massachusetts statute required an employer to pay weekly or by-weekly wages to the employee within seven days of the termination of the pay period during which the wages were earned. Boston police officers' union filed suit arguing that the employee contributions to the tax-exempt deferred compensation plan were wages under the statute and were subject to the seven day payment window. Trial court found for the city and police union appeals.
HELD: It is undisputed that the city does not always manage the transfer of the employee's contributions to their accounts within seven days. The question, however, is whether these deferred contributions are "wages" within the meaning of Massachusetts statute. The point of a deferred compensation program is that payments be deferred. The legislature's remedy for the evil of unreasonable detention of wages is simply not applicable to deferred compensation. Contributed funds are intended to be held out of the employee's possession for an extended time. In exchange, the employee receives a tax deferment. Any employee who wishes to forego the tax benefit and receive the money as it is earned may choose not to enroll in the program. The plan is authorized under the Internal Revenue Code, which states that all compensation deferred is the property of the employer until the funds are distributed to the participant at a later time. If the court were to construe deferred compensation contributions as "wages", which would be the employee's property, then the employee would lose the federal tax benefit for which the plan was created. Affirmed for city, finding deferred compensation not to constitute wages. [Boston Police Pa
Spieler was a police officer who had attended a Christmas party with a date. He was not in uniform but had his badge and gun with him. As the two were driving home approximately eight miles from the city in which he was employed, the couple came upon a two-car accident. The date, who was driving, stopped the car. Spieler exited and checked the passengers for possible injuries and used a cellular phone to call for medical and police assistance. While standing in the street at the scene he was struck by a passing car and severely injured. Spieler subsequently filed a worker's compensation claim. A hearing officer found no liability on the part of the village but the full worker's compensation commission reversed, finding that the accident arose out of and in the course of Spieler's employment as a police officer. The employer appeals.
HELD: The employer argues that it should not have liability for the officer's injuries because he was outside the city limits and was not doing the work of a village police officer. However the village's procedural handbook provides guidance for police officers. It directs officers to render aid to persons who may require such aid. It also asserts that officers should give their full attention to their duties and the welfare of the citizenry. In response, the village argues that the manual applies only within the limits of the village. This is reading the manual too narrowly, however. Certainly the village and police department would be severely criticized if Spieler had not stopped and the accident victims suffered because of a delay in attention. The criticism would have occurred whether he was on or off duty and whether or not he was within the limits of the municipality that employed him. In a sense a police officer is never off duty. Even the village's own manual cautions officers about making arrests for minor offenses while off duty but imposes no inhibition on furnishing assistance to accident victims while off duty. Decision awarding worker's compensation benefits affirmed. [Spieler v. Village of Bel-Nor, 62 S.W.3d 457 (Mo. Ct. App. 2001)]
police officers
A new three-year contract settles a longstanding dispute over cost of living adjustments for Providence police officers. The contract provides a two percent wage boost retroactive to July 1 and three percent hikes in each of the next two years. Officers' pension contributions were reduced from 9.5 percent of salary to 8 percent. Pension payouts were increased to encourage officers to remain on the job instead of retiring. A 30-year veteran will now draw 75 percent of the three-year average wage. To induce veteran officers to serve on the night shift, officers with five or more years experience who work at least two tours of night duty per week will garner an extra $25. The supplement increases to $50 in 2003 and to $75 in 2004. Vacation days were reduced for some personnel; first-year officers will earn only six vacation days and only ten days in their second year of service. About 250 officers are covered by the contract.
police officers
Police officers in the City of St. Petersburg have ratified a new labor agreement after previously rejecting a very similar proposal three weeks earlier. The new three-year pact, retroactive to last October 1, provides a six percent initial wage hike followed by another five percent in October 2002. A four percent boost will come in the final year of the agreement. Over 80 percent of the officers represented by the Pinellas County Police Benevolent Association approved the agreement. Pensions will also increase so that an officer with 25 years of service will retire at 75 percent pay rather than at 65 percent pay. Under the new agreement, starting police officers will now earn a base wage of $31,881.
police officers
Three percent pay raises for each of three years highlight the recently
ratified contract between Watertown and its 65 police officers. Members
of the Watertown Police Association approved the new pact in early March.
The contract is retroactive to July 1, 2000.