New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

New York's highest court recently ruled that a provision in the collective bargaining agreement between the Village of Johnson City and its firefighters' union which states that the Village will not "lay-off any member of the bargaining unit during the term of this contract" is not explicit enough to prevent the Village from abolishing the positions of six firefighters and terminating their employment.

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As all public employers are aware, Section 72 of the New York Civil Service Law ("Section 72") provides both the procedure for placing a public employee on an involuntary leave when he or she is deemed unfit to perform his or her job due to illness or injury, and certain procedural protections to employees who are placed on such leave.  Specifically, any public employee who is placed on an involuntary leave is entitled to written notice of the reason for the proposed leave, the proposed date on which it is to begin, and his or her rights under the statute.  In addition, any such employee is entitled to a hearing concerning the employer's decision to place him or her on leave.

Historically, the protections of Section 72 have been applied only to employees who were placed on an involuntary leave from work.  However, a recent decision by the New York Court of Appeals extended those protections to public employees who are prevented by their employers from returning to work from a voluntary medical leave.

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In a little-recognized effort to generate “mandate relief” associated with its recently-enacted “Tax Cap,” the New York Legislature amended General Municipal Law (“GML”) § 72-c to enable more municipalities to recover expenses related to the initial training of their police and peace officers in the event that such officers decide to transfer to another municipality within their first three years of service.

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The major concessions agreed to by CSEA in negotiations with New York State have been well publicized. The details of the 5-year deal include a wage freeze for the first three years, 2% increases in each of the last two years and immediate increases in employee contributions toward the cost of health insurance. The deal, which covers 66,000 State employees, will save New York $73 million in the first year alone. In turn, CSEA obtained a no-layoff pledge from Governor Cuomo for the first two years of the contract. Governor Cuomo had been threatening to layoff nearly 10,000 State employees if a contract could not be reached. Will other unions follow CSEA’s lead and accept this kind of deal?

Rick Karlin has an interesting article in the Albany Times-Union addressing this issue.  According to the article, when asked about the odds of such a deal repeating itself at the local level, a CSEA spokesperson responded “If history is any precedent, zero.” But other reasonable unions may be getting the picture. The Syracuse Post-Standard reports that City of Syracuse firefighters ratified a two-year deal that includes two zero’s, along with increased contributions by the firefighters toward health insurance. In the most recent interest arbitration decision in New York, Oswego firefighters were awarded a 0% wage increase in the first year and 2% in the second year.

With a local, public sector workforce in New York that is five times the size of the State workforce, local union contracts that contain at least some of the State CSEA concessions will result in significant cost-savings for local governments. In light of the impending 2% property tax cap, this could be critically important to the fiscal health of local governments.
 

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On June 30, 2011, Governor Cuomo signed into law one of the most sweeping and restrictive property tax caps in the country. It applies to “taxes imposed on real property” by all local governmental entities (counties, cities, towns, villages and special districts) and by public school districts. The law will take effect in the 2012 fiscal year for local governments and in the 2012-13 fiscal year for school districts, and is currently scheduled to expire in June of 2016. However, for what appear to be purely political reasons, it will remain in effect beyond its scheduled expiration date as long as the “temporary” New York City rent control and regulation laws remain in place.

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Designated Freedom of Information Law ("FOIL") officers in governmental agencies, such as school districts and municipalities, often have extensive experience responding to FOIL requests. Knowing that FOIL strongly favors the disclosure of agency records, they may overlook statutory exemptions to disclosure. But, a recent case decided by the New York State Court of Appeals, NYSUT v. Brighter Choice Charter School, shows that the exemptions are alive and well -- particularly when a union seeks personal information about unrepresented employees.

FOIL (Public Officers Law §87 et seq.) was created to ensure the public's right to agency records and imposes a broad standard of open disclosure. FOIL's goal is to help the public make informed choices with respect to the direction and scope of governmental activities. It is this purpose that guides the general rule that all records of an agency are presumptively available for public inspection and copying. Nonetheless, several statutory exemptions are set forth in Public Officers Law §87(2) that permit a responding agency to withhold requested records. To ensure the public has maximum access to government records, these statutory exemptions are narrowly interpreted and the agency invoking the exemption bears the burden of demonstrating that requested material fits squarely within the ambit of the exemption.

In NYSUT v. Brighter Choice, a group of charter schools objected to disclosure of certain information about their employees requested by New York State United Teachers ("NYSUT"). In 2007, NYSUT submitted FOIL requests to Brighter Choice and five other Charter Schools in the Albany area. The request sought extensive information about the teachers and instructors, including their names and home addresses. The Charter Schools provided title and salary information, but objected to the request for the names and home addresses of its employees. NYSUT eventually dropped its request for home addresses. This left only the Charter School's denial of the union's request for the full names of the employees in dispute.
 

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On December 21, 2010, New Jersey Governor Chris Christie signed legislation establishing a 2% cap on the aggregate increase in base salary per year that can be provided in an interest arbitration award. The New Jersey law may serve as a model for a similar effort in New York. Since he has taken office, New York Governor Andrew Cuomo has vowed to introduce changes to reduce the cost of State and Local government. He has stated that “New York is at a crossroads, and we must seize this opportunity, make hard choices and set our state on a new path toward prosperity…We simply cannot afford to keep spending at our current rate. Just like New York's families and businesses have had to do, New York State must face economic reality.” In order to achieve his cost saving measures, Governor Cuomo has introduced legislation calling for a 2% cap on property taxes. In addition, he has established by Executive Order a Mandate Relief Redesign Team as well as theSpending And Government Efficiency (Sage) Commission which will conduct a rigorous and comprehensive review of mandates imposed on local taxing districts and government spending “with the goal of saving taxpayer money, increasing accountability and improving the delivery of government services.”

With Governor Cuomo calling for such wide-reaching changes, and groups such as the New York Conference of Mayors (NYCOM) calling for the Governor to implement changes to Interest Arbitration (e.g., redefining “ability to pay”, prohibiting the consideration of non-economic items, limiting the number of times that a union can consecutively go to interest arbitration), it is possible that legislation similar to that signed by Governor Christie in New Jersey will be introduced in New York. In fact, former Gubernatorial candidate and Suffolk County Executive Steve Levy has already publicly embraced New Jersey’s 2% interest arbitration cap, and has indicated that he plans to call on the New York State Legislature to enact similar legislation. According to Mr. Levy, such a cap would, “save the county of Suffolk between $7 million and $10 million per year for the police force alone, considering the police union received a 3.5 percent increase in the most recent round of mandatory arbitration.”
 

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We have previously posted on the early retirement incentive for employees represented by collective bargaining units affiliated with the New York State United Teachers (“NYSUT”) who belong to either the New York State Employee Retirement System or the New York State Teachers Retirement System (“TRS”), are at least 55 years of age, and have attained at least 25 years of creditable service (“55/25 Legislation”). The 55/25 legislation allows eligible employees to retire without the reduction in retirement benefits that would normally apply to retirement system members who are on Tiers 2, 3, or 4 who do not have 30 years of service.  The legislation recently survived another court challenge to its constitutionality.

Two days after the 55/25 Legislation was signed into law, the Empire State Supervisors and Administrators Association (“ESSAA”), a union that represents primarily administrators and supervisors in public school districts, and one of its local unions, challenged the 55/25 Legislation in court. The ESSAA contended that the statute violates its members’ rights to equal protection and freedom of association under the United States and New York State Constitutions, by limiting eligibility only to individuals who are employed in positions represented by collective bargaining units affiliated with NYSUT.
 

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Earlier this year, Governor David Paterson signed into law Chapter 103 of the Laws of 2010 which, among other things, drastically alters the way classroom teachers and building principals are evaluated and the procedures for disciplining tenured teachers. These changes will take effect over the course of the next several years. Many key provisions were effective on July 1, 2010. The changes have significant implications for collective bargaining between school districts and the unions representing teachers and principals.

The impetus for these far reaching changes was New York State’s application for Phase II of the Federal Government’s Race to the Top Program (“RTT”). RTT was created as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”), and authorizes the United States Department of Education to award up to $4.3 billion in grant money to encourage and reward States that create conditions for education innovation and reform. New York was one of several states to win Phase II of RTT. As a result, New York will receive approximately $700 million to help implement changes RTT was designed to foster, including how the performance of teachers and principals is measured.
 

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            On July 23, 2010, the Supreme Court of Albany County upheld the constitutionality of Chapter 45 of the Laws of 2010. Chapter 45, which was signed into law by Governor David Paterson on April 14, 2010, creates an early retirement incentive for employees in positions represented by collective bargaining units affiliated with the New York State United Teachers (“NYSUT”) who belong to either the New York State Employee Retirement System (“ERS”) or the New York State Teachers Retirement System (“TRS”), are at least 55 years of age, and have attained at least 25 years of creditable service (“55/25 Legislation”). The 55/25 Legislation allows eligible employees to retire without the reduction in retirement benefits that would normally apply to retirement system members who are on Tiers 2, 3, or 4, and who do not have 30 years of service. A more complete description of the 55/25 Legislation is set forth here.

            Two days after the 55/25 Legislation was signed into law, on April 16, 2010, the Empire State Supervisors and Administrators Association (“ESSAA”), a union that represents primarily administrators and supervisors in public school districts, and the Baldwin Supervisors Association (“BSA”), a local affiliate of the ESSAA, initiated a court proceeding challenging the 55/25 Legislation. Specifically, the ESSAA and BSA alleged that the 55/25 Legislation violated the First and Fourteenth Amendments of the United States Constitution, as well as Article 1, Section 11 of the New York State Constitution, by limiting eligibility only to individuals who are employed in positions represented by collective bargaining units affiliated with NYSUT. The ESSAA and BSA argued that the 55/25 Legislation violated their rights to equal protection and freedom of association.

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Less than two months after signing legislation which provided an early retirement incentive to members of the New York State United Teachers (“NYSUT”) (reported on here), Governor Paterson has signed another early retirement incentive into law. Unlike the prior early retirement incentive which was limited to members of NYSUT only, this legislation is open to public employees across the State regardless of union affiliation. In addition, public employers have the option of deciding whether to offer this early retirement incentive to their employees. Finally, unlike the prior legislation, which spread the cost of funding the legislation across all public employers, only employers who choose to offer this early retirement incentive to their employees are obligated to fund the cost related to their employees over a five year period, with the first payment due on February 1, 2012. According to the Governor, this Legislation will save the State alone approximately $320 million by the close of the 2011-12 fiscal year.

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Municipal providers of essential services have limited options when attempting to cope with the current fiscal crisis while still providing essential public services. Faced with dwindling revenue, they are also locked into collective bargaining agreements which require raises and/or “step” increases and lane movement. Consequently, while a non-unionized, private-sector employer may avoid layoffs by imposing a salary freeze, public employers have no such option. Without that flexibility, layoffs and a consequent loss of services by the public becomes the only option.

But, as a memorandum recently released by the Empire Center for New York State Policy concludes, a public sector wage freeze imposed through an enactment by the State Legislature is legal under both New York and federal law, if it is based on proper factual findings of fiscal emergency. Since its publication, the memorandum has received positive support from numerous news sources and political figures, including current Republican Gubernatorial candidate and Suffolk County Executive Steve Levy. According to the memorandum, a State statute that freezes salaries, including abrogating so called “step” increases and lane movement in existing collective bargaining agreements, will be valid under both state and federal law as long as specific legislative findings demonstrate that the scope and duration of the freeze is reasonable and necessary to protect the public. A brief summary of the memorandum is provided below.
 

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Yesterday, April 14, 2010, among ten bills signed into law by Governor David A. Paterson was Senate Bill S-6972/Assembly Bill 10065 (the “55/25 legislation”), which is the early retirement incentive bill for members of New York State United Teachers ("NYSUT") who belong to either the New York State Employee Retirement System ("ERS") or the New York State Teachers Retirement System ("TRS"). The 55/25 legislation was first announced as part of the Tier V pension legislation that was signed into law and previously discussed on this blog. The 55/25 legislation allows NYSUT members who are members of ERS or TRS, are at least 55 years of age, and have attained at least 25 years of creditable service to retire without the reduction in retirement benefits that would normally apply to retirement system members who are on Tiers 2, 3, or 4, who do not have 30 years of service.

Below is a summary of the 55/25 legislation and what it means for employers of NYSUT members.
 

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On December 10, 2009, Governor Patterson signed into law the Tier V Pension Act  which adds Article 22 to the Retirement and Social Security Law. The legislation creates a new Tier V pension classification for public employees who first join the New York State and Local Retirement/Police and Fire Retirement System (PFRS), the New York State and Local Retirement Systems/Employees Retirement System (ERS) and the New York State Teachers’ Retirement System (TRS) on or after January 1, 2010. Governor Paterson announced that this Legislation will provide more than $35 billion in long-term savings to New York taxpayers over the next thirty years.  However, as reported by the Albany Times Union, others such as E.J. McMahon, Director of the Empire Center for New York State Policy, have challenged such claims.

Below are some of the highlights of the new legislation:
 

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Earlier this summer Governor Paterson signed the “New York Government Reorganization and Citizen Empowerment Act” (Chapter 74, Laws of 2009). This sweeping piece of reform legislation was championed by Attorney General Cuomo as a way to improve local government efficiency and provide property tax relief to an already burdened citizenry. The Act, which will become effective on March 21, 2010 intends to make it easier to consolidate various governmental bodies such as Towns, Villages, and Special Districts. What remains to be seen, however, is whether the Act’s two new methods for consolidation/dissolution will truly benefit taxpayers and save money, or simply create a costly process counterproductive to the Act’s admirable goals. Equally uncertain is the Act’s impact on municipal labor and employment successorship issues arising out of consolidation or dissolution.

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