Whistleblower John Tipaldo Wins His Case Against the NYC Department of Transportation, 20 Years After Blowing The Whistle

John Tipaldo

Court rules acting in good faith key to whistleblower protection

NYSSBA

On Board Online • November 16, 2015

After becoming aware of alleged bidding irregularities in the New York City Department of Transportation (DOT), an employee notified his immediate supervisors and the Department’s Inspector General. Should the employee be protected under the state’s Civil Service whistleblower law from adverse job actions, even though he failed to first inform the official “appointing authority” as specified in the law?

Yes, according to the state’s highest court, the Court of Appeals, in Tipaldo v. Lynn.

The reason? The appointing authorities and the alleged wrongdoers were one and the same, and the actions of the employee, John Tipaldo, demonstrated good faith compliance with the law.

Tipaldo worked as DOT’s Acting Assistant Commissioner for Planning and Engineering. He discovered an alleged scheme by his then-superiors (Transportation Commissioner Christopher Lynn and First Deputy Commissioner Richard Malchow) by which a signage contract was to be awarded to Lynn’s acquaintance in violation of the city’s public bidding rules.

After an order was placed for the signs from Lynn’s acquaintance, a meeting was held informing DOT employees, including Tipaldo, that the signs had been purchased. The legality of the process was questioned by Tipaldo and other employees, and the DOT employees who were required to authorize the purchase refused to sign the authorization for the purchase. According to the court, the next day, Lynn and Malchow solicited bids from the public and after the delivery and installment of the signs, the DOT received lower bids as compared to the amount paid to Lynn’s acquaintance. Then Lynn and Malchow allegedly created a backdated memorandum indicating that the need for the signs was “urgent” and that the order must be placed immediately, rather than proceed through bidding.

Tipaldo informed his immediate supervisors about the alleged misconduct and, one or two business days later, reported the alleged improper actions to the DOT Office of the Inspector General. Tipaldo claimed that shortly after that, various retaliatory actions were taken against him by Lynn and Malchow. He was eventually removed from his position and demoted.

Tipaldo commenced a whistleblower action pursuant to Civil Service Law Section 75-b. Pursuant to that law, adverse action must not be taken against a public employee because the employee discloses to a governmental body information which he or she “reasonably believes to be true and reasonably believes constitutes an improper governmental action.” However, prior to the reporting, the employee must make “a good faith effort to provide the appointing authority or his or her designee the information to be disclosed and shall provide the appointing authority or designee a reasonable time to take appropriate action unless there is imminent and serious danger to public health or safety.” This requirement gives the employer the opportunity to end the violations prior to disclosing misconduct to an outside agency.

The defendants sought to dismiss the case, arguing that Tipaldo failed to comply with the statute by not reporting the alleged wrongful actions to the appointing authority (Lynn and Malchow) before contacting the Office of the Inspector General.

A state Supreme Court judge granted defendants motion and dismissed the complaint, but the Appellate Division reversed on appeal. The Appellate Division found that “plaintiff’s good-faith efforts in the manner and timing of his reporting, first informally to his immediate supervisors, and then soon thereafter to the [DOI], satisfactorily met the requirements” of the Civil Service Law.

The Court of Appeals agreed with the Appellate Division. It determined that because the appointing authorities in the specific case were actually Lynn and Malchow, the plaintiff “understandably did not report their alleged misconduct to them.” The court noted, “Lynn and Malchow would not likely have been receptive to plaintiff’s complaints or reported themselves to the Department of Investigation.” The court found that Tipaldo’s actions demonstrated good faith compliance with the Civil Service Law.

Although this case does not involve school district employees, the court’s decision applies to all public employees and thus school districts will be affected by this ruling.

Editor’s Note: A legislative bill (A.7951/S.4628) which passed both houses during the last legislative session would eliminate the requirement for a whistleblower to first report to the appointing authority. NYSSBA opposed the bill because such notification provides school districts and other public employers with the opportunity to make corrections and avoid unnecessary litigation. The bill has not yet been delivered to the governor.

John TIPALDO, Respondent, v. Christopher LYNN, & c., et al., Appellants.

New York court orders reinstatement of whistleblower

By on September 2, 2010Posted in Government Whistleblowers

A New York State appellate court has ordered the New York City Department of Transportation to reinstate whistleblower John Tipaldo. When Tipaldo reported that his superiors violated bidding rules, he was demoted from his position as Acting Assistant Commissioner for Planning. That was in 1996. In 2006, the trial court granted the City summary judgment on grounds that Tipaldo had not made a formal report of the bidding violations to the "appointing authority." The appellate court reversed in 2008 holding that Tipaldo’s report to the Department of Investigations was appropriate when the "appointing authority" was the person engaged in the violations. Tipaldo v. Lynn, 48 AD3d 361. The appellate court held that since there was no dispute about the retaliatory demotion, the case would be remanded only for a determination of damages and remedies. On the second appeal, the court held that Tipaldo was entitled to interest on his back pay, thereby increasing his award from $175,000 to $662,721. The appellate court awarded the interest even though the state’s statute did not make any explicit provision for interest. The state statute has "the goal of remediating adverse employment actions which, if allowed, would undermine an important public policy, that is, encouraging public employees to expose fraud, waste and other squandering of the public fisc." Tipaldo had hired an expert to compute the interest and the City did not. The court also held that Tipaldo was entitled to reinstatement even though he had declined promotions offered after his demotion. The court said that his corroborated fear of retaliation made his decisions reasonable so that he could still receive reinstatement as part of the court’s order. It took Tipaldo 14 years, and two trips to the court of appeals to get justice. This is an example of how public officials, when challenged by the integrity of a whistleblower, will waste unlimited public resources to delay justice. This might be a good time for New York’s legislature to consider improving its whistleblower law to provide for general and punitive damages, interest, expert fees, attorney fees and jury trials. The case is Tipaldo v. Lynn, Thank you to the New York Public Personnel Law blog for alerting me to this decision.

Tipaldo v. Lynn

Whistleblower wins more than $1M in lawsuit over demotion

By Susan Edelman

, NY POST, 6/17/17

A whistleblower triumphed in a 20-year battle with City Hall, winning more than $1 million to compensate for a pay cut and demotion he suffered after reporting corruption.

As a Department of Transportation official under Mayor Rudy Giuliani in 1996, John Tipaldo alerted authorities to a plan by his bosses — DOT Commissioner Christopher Lynn and first deputy Richard Malchow — to award a contract to make 100 “Don’t Honk” signs to Lynn’s buddy.

The two officials tried to cover their tracks after awarding the contract by publishing a notice seeking public bids. They also issued a memo claiming an urgent need for the signs required bypassing normal bidding rules, a probe confirmed.

After Tipaldo tipped off the city Department of Investigation, Lynn and Malchow set out to destroy his career, the DOI confirmed.
While Tipaldo was due a promotion to assistant commissioner, the duo bad-mouthed his job performance and demoted him, slashing his salary by $25,000 a year.

Tipaldo sued. While the DOI found him the victim of retaliation, city lawyers argued that the whistleblower law required him to report wrongdoing to his bosses — the same guys engaged in the scam.

“This is an example of how public officials, when challenged by the integrity of a whistleblower, will waste unlimited public resources to delay justice,” the National Whistleblower Center said in 2010, when an appellate court found in Tipaldo’s favor.

The appellate judges ruled Tipaldo deserved a raise, back pay for salary he would have received if he hadn’t fingered Lynn and Malchow — plus 9 percent a year in interest.

But it wasn’t over yet. The city Law Department appealed to the Court of Appeals, the last resort in New York. In 2015, the high court unanimously upheld Tipaldo’s win.

The city finally is paying off its debt to Tipaldo, now a DOT assistant commissioner, in installments.

Last fiscal year, he was NYC’s highest-paid employee, collecting $672,700, including his $176,700 salary, records show.

“It started out by screwing him out of a raise of $25,000 a year. It wound up costing them over $1 million, plus the time and effort of the Law Department for over 20 years,” a source remarked.

“This case has a complicated procedural history, including multiple appeals, that prolonged the litigation,” said Law Department spokesman Nick Paolucci.

Lynn, who insisted his pal “Vinnie” was the only person who could do the sign job, left the DOT in 1997 after the probe concluded he violated procurement rules.

Reached last week, he said he did “nothing illegal or immoral.” and questioned whether Tipaldo deserved the big award.

Tipaldo and his lawyer, Lewis Rosenberg, declined to comment.