Decision No. 12,631

(January 13, 1992)

John M. Hekker, Esq., attorney for petitioner

Steyer & Sirota, Esqs., attorneys for respondent, Murray Steyer, Esq., of counsel

SOBOL, Commissioner.--Petitioner initially appealed from action of respondent board of education terminating his services as director of special services and facilities. In Appeal of Riendeau, 25 Ed Dept Rep 1, petitioner's appeal was sustained and respondent was ordered to reinstate petitioner to the position of director of special services "with backpay and benefits effective July 1, 1984."

Respondent challenged that determination in a proceeding brought pursuant to Article 78 of the New York Civil Practice Law and Rules. The court upheld my determination that petitioner's services had been wrongfully terminated. However, the court found that the record contained insufficient information to warrant an award of full backpay and remanded the matter for a hearing and determination as to the amount of backpay to which petitioner was entitled for the period July 1, 1984 to July 23, 1985. In its decision, the court noted that the sole issue to be determined was the amount of backpay "less the amount of any earnings from other employment or unemployment benefits he [petitioner] may have received." On appeal to the Appellate Division, Third Department the decision of the lower court was affirmed.

The matter was remanded to the Commissioner for determination and a hearing officer was designated to make findings of fact and recommendations. On January 2, 1990, the hearing officer submitted his findings and recommendations to me for consideration. The hearing officer found that petitioner had not received any earnings from other employment during the relevant time and, consequently, is entitled to an award of full backpay. Upon review of the record before the hearing officer, I adopt his findings and recommendations in their entirety.

As noted in the hearing officer's findings, the law in New York governing awards of backpay is well settled. An award of backpay for a period of wrongful termination is intended to make an employee whole for any loss of income suffered by reason of the wrongful discharge (Matter of Specht, 20 Ed Dept Rep 457). An employee who has been wrongfully discharged must endeavor to mitigate damages by making reasonable efforts to obtain other employment (Gross v Board of Education, Elmsford Union Free School District, et al., 78 NY2d 13; Cornell v T.V. Development Corp., 17 NY2d 69). However, while the employee is required to mitigate damages, the burden of proving a lack of diligent effort to mitigate is upon the employer (Cornell v T.V. Development Corp., id.; Crabtree v Elizabeth Arden Sales Corp., 105 NYS2d 40; Milage v Woodward, 186 NY 252; Howard v Daly, 61 NY 362).

At the hearing, petitioner was the only witness who testified. No witness was called by respondent. The record indicates that petitioner was employed in respondent's school district for eleven years until his services were terminated on July 1, 1984. The parties agree that petitioner's annual salary at the time was $39,900.00. Subsequent to the termination of his services, petitioner received no compensation from respondent.

Petitioner testified and the exhibits indicate that during the first week of July 1984, petitioner filed for unemployment compensation and, thereafter, received $180.00 per week for ten weeks, totaling $1,800.00. However, it was later determined that, because petitioner was a principal in a corporation, he was ineligible for unemployment benefits. Petitioner repaid the $1,800.00 in December 1984 and did not receive further benefits. Petitioner's 1984 income tax return indicates that for calendar year 1984, petitioner's wage earnings were $19,950.00, all of which came from his employment by respondent.

Beginning in September 1984 and continuing through December 1985, petitioner worked in a delicatessen owned by a corporation of which petitioner and his wife were stockholders. The business was unsuccessful and closed in December 1985. Petitioner testified, and his income tax returns substantiate, that during the approximately 14 months that he worked at the delicatessen, he received no compensation. Petitioner further testified that, during that time, he relied for support on his wife's salary and borrowed funds. Thus, in calendar year 1985, petitioner's wage earnings were zero. Respondent presented no witnesses or evidence to rebut petitioner's testimony.

On cross-examination respondent elicited from petitioner only that the Unemployment Insurance Division of the Labor Department concluded that he had wilfully misrepresented facts concerning his employment at the delicatessen, and that he had discarded certain financial records pertaining to his delicatessen business after a federal tax audit. Neither of these revelations, however, yield any evidence that the petitioner, in fact, received compensation from the delicatessen business. In addition, petitioner's federal and state tax returns are consistent with his assertion that he received no wages during the period in question. There is no evidence in the record suggesting that the returns are inaccurate.

Respondent offered no proof at the hearing as to whether petitioner, with the exercise of reasonable diligence, could have secured employment in the field of education during 1984 and 1985 (see, Cornell, supra), nor was any evidence offered to establish whether employment opportunities were available in petitioner's community or a reasonable distance therefrom.

As noted, the burden of establishing that petitioner failed to mitigate his damages is on the respondent-employer. In Cornell v T.V. Development Corp., supra, proof that the discharged employee started his own corporation (from which he received no compensation) failed to satisfy the employer's burden of proving what the employee earned or could have earned after his wrongful discharge. Given the similarity of facts in the Cornell case to the facts presented here, I conclude that the respondent has not met its burden.

Upon my review of the record I find that, during the period in question, the petitioner realized no earnings, and received no unemployment benefits. I also find that the respondent did not establish that petitioner failed to mitigate his damages. Consequently, petitioner is entitled to an award of full backpay. The petitioner's annual salary at the time of his termination was $39,900.00, constituting a per diem wage of $109.315. Between July 1, 1984 and July 23, 1985, 388 days elapsed. Multiplying the per diem wage of $109.31 by 388 days yields $42,414.24, the amount of backpay due the petitioner.

In my decision in Appeal of Riendeau, supra, petitioner was awarded backpay and benefits "effective July 1, 1984." Petitioner requests that the period for which he is entitled to an award of backpay be expanded to include the days between June 7, 1984 through July 1, 1984. Petitioner argues that, although termination of his services was effective July 1, 1984, in fact, he received no compensation after June 7, 1984. Petitioner raised this contention for the first time in his brief before the hearing officer. He did not challenge that part of my decision in an Article 78 proceeding and did not raise it in his initial appeal before me. Consequently, I find his request time-barred (see, 8 NYCRR 275.16).

Finally, with respect to petitioner's request for interest on the amounts owed to him by respondent, decisions of the Commissioner have consistently denied such recovery on the basis that there is no authority to award interest in appeals brought pursuant to Education Law '310. Accordingly, that request is denied.

IT IS ORDERED that respondent pay to petitioner forthwith backpay in the amount of $42,414.24.

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