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Wednesday, June 19, 2013

Article 75 petition seeking to confirm an arbitration award holding the current CBA preserved the rights retirees obtained under previous CBAs granted by court

Article 75 petition seeking to confirm an arbitration award holding the current CBA preserved the rights retirees obtained under previous CBAs granted by court
Port Auth. of N.Y. & N.J. v Port Auth. Police Lieutenants Benevolent Assn., 2013 NY Slip Op 50953(U), Supreme Court, New York County [Not selected for publication in the Official Reports]

Due to budget constraints, the Port Authority, effective January 1, 2011, discontinued its free E-Z Pass program available to all Port Authority retirees. As a result, the Port Authority Police Lieutenants Benevolent Association [LBA] filed a grievance under the arbitration provision in its Collective Bargaining Agreement, [CBA] claiming that the Port Authority had violated the CBA by discontinuing the E-Z pass program for retirees.

The Arbitrator framed the issues as follows:

1. Is the grievance substantively arbitrable?

2. If so, did the Employer violated [sic] the Collective Bargaining Agreement (CBA) by discontinuing on or about December 2010 or January 2011 free passage and parking at Port Authority facilities for retirees of the bargaining unit?

3. If so, what shall the remedy be?

The relevant CBA was agreed to in April 2005, effective retroactive to January 21, 2003, through to January 20, 2010. It contained a "Savings Clause," which provides that wages, benefits and conditions of employment "shall remain in full force and effect until a new Memorandum of Agreement [i.e., CBA] is executed." The provision relied upon by the LBA provided “for distribution of free passes for ‘permanent and project employees, retired employees, and employees on military leave for use at tunnels, bridges and some air terminals.’" Retired Lieutenants were provided with free passage “in the form of E-Z Passes.”

Arbitrator Howard C. Edelman found in the LBA's favor, ruling that the Port Authority had "violated the Collective Bargaining Agreement by discontinuing on or about December 2011 free passage and parking for retirees of the bargaining unit." The Port Authority was directed to reinstate the free passage and parking, and reimburse retirees for the monies they had expended on passage and parking since the program was terminated.

The Port Authority filed an appeal pursuant to Article 75 of the CPLR seeking to vacate the award. It contended that the Arbitrator exceeded his powers in ruling that free passage should be applicable to all LBA retirees, because the issue before the Arbitrator was limited to those employees who retired under the CBA 2003-2010 CBA. Accordingly, the Port Authority contended that it was error to apply the Arbitrator’s ruling to all “LBA retirees” and argued that the court should modify the award so as to limit the benefit to employees in the negotiating unit retiring between 2003 and 2010.

Judge Anil C. Singh said the Arbitrator had acknowledged the Port Authority’s argument in the Award but found that under Savings Clause which provided that, "all clauses of the contract ... continue in full force and effect' after the expiration of the [CBA]" and that the CBA thus "requires the continuation of the retiree benefit in question until the parties modify it in collective bargaining."

Judge Singh found that the Arbitrator had not exceeded his power by including pre-2003 retirees in the award where the arbitration was conducted pursuant to the 2003-2010 CBA.

Citing Riverbay Corp. (Local 32-E, S.E.I.V. AFL-CIO), 91 AD2d 509, the court said that “An arbitrator exceeds his or her power by giving ‘a totally irrational construction to the contractual provisions in dispute,’ so as to effectively rewrite the parties' contract.” The court then held that the Arbitrator did not exceed his powers, or rewrite the parties' agreement, when he found that the right to free E-Z Passes and parking applied to more than just retirees who had retired under the 2003-2010 CBA. The decision indicates that the language in CBA’s “Savings Clause” retained the right of retirees from previous MOAs to receive these benefits.

Concluding that the current CBA preserved the rights retirees obtained under previous CBAs, Judge Singh ruled that Arbitrator was not acting irrationally or exceeding his powers when he applied his ruling to past LBA retirees and confirm the LBA’s petition to confirm the award.

The decision is posted on the Internet at:

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