Source: https://www.mass.gov/decision/richard-roy-v-springfield-retirement-system-cr-06-590-dala-2008
Timestamp: 2019-04-20 16:14:30+00:00

Document:
Appearance for Petitioner: Amy Laura Davidson, Esq.
Pursuant to G. L. c. 32, § 16(4), the Petitioner, Richard Roy, is appealing the August 30, 2006 decision of the Respondent, Springfield Retirement System, denying his request to purchase for creditable service his prior employment 1995-1999 with the Massachusetts Career Development Institute (MCDI) Alternative School. (Ex. 22) The appeal was timely filed. (Ex. 23) A hearing was held December 6, 2007, at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, 4th Floor, Boston, MA 02114, pursuant to G. L. c. 7, §4H.
Various documents are in evidence. (Exs. 1 - 26. Exhibit 26 was filed post-hearing and is Mr. Roy's social security summary statement as of June 27, 2007.) Two tapes were used. The parties entered into stipulations of fact and filed pre-hearing memoranda. ("A") Mr. Roy testified. The Springfield Retirement System presented the testimony of Barry Metayer who has been with MCDI from 1985. Both parties filed post hearing briefs by February 8, 2008.
The issue in this appeal is whether or not Mr. Roy was an employee of a political subdivision or governmental unit or political unit of the Commonwealth between 1995 and 1999 when he was paid from the payroll of MCDI, Inc., and while he had social security deductions taken from his pay. The parties have briefed this issue. The key to resolving the issue is to examine the definitions in G. L. c. 32, § 1, and to review the pertinent case law. I conclude that because of the particular circumstances of this 1995-1999 employment, Mr. Roy was an employee who satisfied the prevailing tests for being a public employee under G. L. Chapter 32 so as to enable him to purchase that time for creditable service.
Any person who became or becomes an employee by reason of the taking over by the commonwealth, or by the metropolitan district commission or by any district, of any institution, or of any public or quasi-public enterprise, controlled and operated by a political subdivision of the commonwealth or by a corporation, … shall be credited with such service as would have been creditable service had it been rendered by him under the provisions of sections one to twenty-eight inclusive, or under corresponding provisions of earlier laws.
[A]ny employee who, having or having had the right to become a member, failed to become or elected not to become a member, may apply for and be admitted to membership if under the maximum age for his group on the date of his application; provided, that during his present period of service he had previously been eligible for membership; and any employee who, having had the right to become a member of any retirement system … failed to become or elected not to become a member, may apply for and be admitted to membership if under the maximum age for his group on the date of his application. No employee shall otherwise be admitted to membership except by vote of the retirement board of the system for which application is made, and then only if that board finds that his failure to become or his election not to become a member was caused by circumstances other than those generally applicable to employees ….
Mr. Roy should have been permitted to gain membership in the Springfield Retirement System between 1995-1999. At all times from 1995-1999 before coming onto the City payroll, he worked for the City of Springfield's MCDI Alternative School, a public school, and was simply paid by the non-profit, MCDI, Inc. The findings show that MCDI, Inc. had no mission distinct from being part of the MCDI Alternative School. MCDI, Inc. received funds from federal, state, and private sources for the benefit of the Alternative School. This conclusion might not be supportable if: the Executive Director of MCDI, Inc. was a non-public employee; Mr. Roy was directly supervised by non-public employees; Mr. Roy worked only with non-public employees; or the MCDI Alternative School had private tuition paying middle and high school students. None of these alternative scenarios are pertinent. I do not conclude that the MCDI Alternative School, because it had the MCDI, Inc. component to it, was a private school teaching students who happened to have their tuition paid by the City of Springfield. Mr. Roy received regular compensation from a political subdivision, the City of Springfield, between 1995-1999. Regular compensation is defined in G. L. c. 32, §1 as "salary, wages or other compensation in whatever form, lawfully determined for the individual service of the employee by the employing authority." The need to pay him from the non-profit corporation's payroll had no impact on the fact that he was rendering service only for the City of Springfield. Perhaps there was not sufficient funding flowing from the Springfield School Department to the MCDI Alternative School so that use of the non-profit corporation's funds were used to pay him during this time period. There was no other purpose served by this non-profit than to benefit the MCDI Alternative School. His service satisfied the definition of employee in Section 1 since he was regularly employed in the service of the public school, the MCDI Alternative School. Employer is defined in Section 1 to cover a person, board, or commission having the power to employ persons as employees for the political subdivision. Because he was hired by the Executive Director of MCDI, Inc., and because he and all the Executive Directors of MCDI, Inc. have been City of Springfield employees appointed by the Mayor, the definition of employer is satisfied. There is no evidence to show a non-City of Springfield employee set his salary. Governmental unit is defined in Section 1 to be synonymous with political subdivision. Political subdivision is defined in Section 1 to include a "city, town … or any other public unit in the commonwealth." Massachusetts DOE recognizes the MCDI Alternative School as a public school with public school students attending it, and all of its governance is done by City of Springfield employees. MCDI, Inc. is only a component of the MCDI Alternative School, and is no less a political unit of the City of Springfield. These facts show the pertinent definitions of Section 1 are satisfied by Mr. Roy's circumstances during 1995-1999.
The Springfield Retirement System cites case law that concludes employment by a non-profit corporation is private employment ineligible for creditable service. See, Castellano v. Springfield Retirement System, CR-04-1118 (DALA, 5/2/06) (CRAB, 1/3/07) (an employee of a non-profit corporation set up to plan for and to have oversight over CETA and its predecessor programs of JFTA and WIA, who had social security deductions taken from his pay, and who was required to participate in a non-contributory defined contribution pension plan, was not working for a governmental unit so his service was not eligible for creditable service); ( Popeo v. Worcester Retirement Board, CR-95-963 (DALA, 6/6/96) (CRAB, 10/7/96) (the Executive Director of a non-profit corporation designated by the City of Worcester as an anti-poverty agency who had social security deductions from his pay, was not a City employee); ( McLaughlin & Ciommo v. Boston Retirement Board, CR-00-1162 & 1163 (DALA, 7/19/02) (no CRAB Decision) (employees of a non-profit corporation managing grants for the City of Boston were not City employees); ( Davis v. Teachers' Retirement System, CR-02-46 (DALA, 5/24/02) (No CRAB Decision) (an employee of an alcohol and substance abuse program operated by a non-profit corporation funded by state and local funds, did not work for a governmental unit eligible for creditable service). On the other hand, there are cases where clear overlaps and intertwined functions and governance between a governmental unit and a non-profit corporation have concluded that is enough to make the service employment for a political unit or governmental unit, and eligible for creditable service. In Sennott v. Teachers' Retirement Board, CR-03-688 (DALA, 12/5/03) (No CRAB Decision), Ms. Sennott taught typing for a federally-funded employment and training agency that was established to help residents of the City of Gardner. The agency was made a non-profit corporation although that did not change its operations or funding in any way or its status with the City. The agency operated out of a City building, and did not pay rent. Ms. Sennott was paid by the non-profit corporation. Nevertheless, she was found able to gain creditable service for this work. The agency was found to be a public unit under the G. L. c. 32, § 1 definition of political subdivision because it was a component unit of the City of Gardner. In Boyle v. Pittsfield Retirement Board, CR-02-587 (DALA, 5/11/07) (Objections filed, CRAB decision pending), service for a training and employment program that was primarily federally funded, although the program was within a non-profit corporation, was eligible for creditable service. There was an overlap between the City's work and the non-profit's work, as well as governance of the non-profit by City employees. Although social security deductions had been taken from the pay received by Mr. Boyle, this fact was not found to be decisive. The program Mr. Boyle worked for was considered to be an unclassified department of the City of Pittsfield. At all times the Mayor of Pittsfield had the authority to promote, demote or discharge Mr. Boyle from his employment. The Mayor had administrative, financial, and oversight responsibility over the non-profit's program. The case of Gomes v. CRAB, Middlesex Superior Court No. 94-5927-B, Welch, J. (1995) was relied upon to show that the source of funds, i.e. federal grants, will not prevent the service from being eligible for creditable service.
The findings show an abundance of factors in Mr. Roy's circumstances of the clear connection of his service to benefit the City of Springfield's public school students, including the City of Springfield's administration and control of the MCDI Alternative School. There is ample support to find Mr. Roy worked for a political subdivision or political unit of the commonwealth from 1995-1999 in satisfaction of the Section 1 requirements. This means that service is eligible for creditable service. Further support for this conclusion is the vote of the Springfield Retirement System in September 2000 making all twelve remaining employees of MCDI, Inc. members of the Springfield Retirement System.
For these reasons, the decision of the Springfield Retirement System is rescinded and Mr. Roy is to receive creditable service for his work between 1995-1999 for the MDCI Alternative School when he was paid through MCDI, Inc.

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