Prohibited subjects of arbitration

Prohibited subjects of arbitration
Matter of County of Chautauqua v Civil Serv. Empls. Assn., Local 1000, AFSCME, AFL-CIO, County of Chautauqua Unit 6300, Chautauqua County Local 807, 8 NY3d 513
[Matter of County of Chautauqua v Civil Serv. Empls. Assn., Local 1000, AFSCME, AFL-CIO, 26 AD3d 843, modified.]

Readers are undoubtedly familiar with the concept that there are “prohibited subjects of negotiations” within the meaning of the Taylor Law. In Chautauqua, the courts considered a corollary to this prohibition: prohibited subjects of arbitration.

Although the Taylor mandates that a public employer to bargain with employee organizations and to enter written agreements concerning the terms and conditions of employment and may agree to submit disputes to binding arbitration, this is permitted only in "the absence of 'plain and clear' prohibitions in statute or controlling decision[al] law, or restrictive public policy" (see Matter of Board of Educ. of Yonkers City School Dist. v Yonkers Fedn. of Teachers, 40 NY2d 268).

In determining if a dispute is arbitrable, a court applies a two-part test:

1. Is there is any statutory, constitutional or public policy prohibition against arbitration of the grievance?

If the court finds that there is no such prohibition, it must examine the collective bargaining agreement and then apply the second test:

2. Did the parties agreed to arbitrate the particular dispute?

If the court finds that the parties did not agree to submit the matter to arbitration, an arbitrator cannot act.

In other words, a court “must stay arbitration where it can conclude, upon examining the parties' contract and the relevant statute, "that the granting of any relief would violate public policy."

In Chautauqua, the Civil Service Employees Association (CSEA) demanded arbitration of grievances concerning layoffs and rights of displacement contained in Section 14.05 of the Collective Bargaining Agreement (CBA).

Section 14.05(a) provided as follows:

(a) For layoff purposes, an employee's seniority shall determine the order to be followed. In a department, the employee with the least seniority shall be the first to be laid off until the total number of employees required to decrease forces shall be reached. When all displacement possibilities are exhausted within the department, the employee shall have the right to displace in other departments.

In contrast, Civil Service Law Section 80, which addresses layoff affecting employees in the competitive class, provides, in relevant part, as follows:

Subdivision (1). Where, because of economy, consolidation or abolition of functions, curtailment of activities or otherwise, positions in the competitive class are abolished or reduced in rank or salary grade, suspension or demotion, as the case may be, among incumbents holding the same or similar positions shall be made in the inverse order of original appointment on a permanent basis in the classified service in the service of the governmental jurisdiction in which such abolition or reduction of positions occurs.

Subdivision (4). Upon the abolition or reduction of positions in the service of a civil division, suspension or demotion shall be made from among employees holding the same or similar positions in the entire department or agency within which such abolition or reduction of positions occurs.

The County, based on the advice provided by the New York State Department of Civil Service, said that there was a conflict between section 14.05 of the CBA and Civil Service Law Section 80 with respect to layoff and refused to implement Section 14.05 of the CBA.*

CSEA demanded arbitration, contending that County violated Section 14.05 of the CBA by refusing to (1) lay off “the employees with the least seniority within a department until the total number of employees required to decrease forces in that Department was reached" and (2) allow "employees to displace employees in other departments after they exhausted displacement rights in their own departments."

Ultimately the County filed a petition pursuant to CPLR Article 75 proceeding seeking a permanent stay of arbitration as to all issues; CSEA opposed the petition and cross-moved to compel arbitration.

Supreme Court agreed with the County that a conflict existed between Civil Service Law and the CBA. Citing Matter of City of Plattsburgh (Local 788 & N.Y. Council 66, Am. Fedn. of State, County & Mun. Empls., AFL-CIO), 108 AD2d 1045, the court ruled that such a conflict was for a court, not an arbitrator, to resolve.** It granted the County's petition, in part, staying arbitration to the extent that CSEA's demands concerned claims or rights on behalf of employees who were in the Competitive Classification under the Civil Service Law. The court, however, concluded that because section 80(4) did not apply to noncompetitive or labor class employees, arbitration was permissible as to them and granted CSEA's cross motion to that extent.***

On an appeal to the Appellate Division unanimously reversed and granted CSEA's cross motion to compel arbitration in its entirety (See 26 AD3d 843) on the rationale that the perceived conflict was "merely theoretical,” concluding that the entire dispute was arbitrable because the statute did not contain " 'clear exclusionary language' " that precluded arbitration.

The Court of Appeals disagreed and modified the Appellate Division’s determination.

The high court said that it agreed with the County’s position that Section 80 first requires municipalities to decide which titles are essential and then protects the senior employees in such titles. In contrast, the County contended that CBA constituted “an impermissible intrusion on this statutory scheme” by protecting specific persons, rather than necessary positions, regardless of the municipality's operational needs or the community's service needs." As it stated in Honeoye Falls-Lima, 49 NY2d at 733, an appointing authority may not surrender through collective bargaining "a responsibility vested in the [appointing authority].” ****

Finding that under the CBA the County would retain no power to decide which positions to eliminate while Section 80(1) clearly indicates “that a public employer has a nondelegable discretion to determine—for reasons of economy, among others—what its staffing and budgetary needs are in order to effectively deliver uninterrupted services to the public.” Once such an informed decision is made, Section 80(1) controls with respect to respect the seniority rights of its employees.

In the words of the Court of Appeals: “Succinctly put, under the CBA, seniority controls the abolition of positions; under the statute, seniority controls only after the employer decides which positions will be affected. This conflict is plainly irreconcilable.”

As to displacement rights, the court said that the nonarbitrability of this issue is less clear. Although Civil Service Law Section 80(4) provides that "[u]pon the abolition or reduction of positions . . . , suspension or demotion shall be made from among employees holding the same or similar positions in the entire department or agency within which such abolition or reduction of positions occurs," there is no explicit language in this subdivision that can be read to prohibit, in an absolute sense, a public employer from agreeing to permit employees to "bump" less senior employees in another department or division within the same layoff unit.

The court ruled that as public policy precludes arbitration of CSEA's primary grievance as to the layoff of certain employees, the County's petition to stay arbitration is granted. However, as there is no clear public policy precluding arbitration of CSEA's secondary grievance concerning displacement rights, CSEA's cross motion to compel arbitration was granted to that extent.

* The Department of Civil Service had advised the County that a collective bargaining agreement "may not alter the layoff units prescribed by Section 80 (4).”

** In Plattsburgh the collective bargaining agreement provided that in determining seniority in the event of demotions in connection with a layoff the "date hired" was to be used. Section 80 of the Civil Service Law provides that the date of "permanent appointment" controls. The Union sought to arbitrate the alleged contract violation. The City resisted and won an order prohibiting arbitration. The Appellate Division held that Civil Service Law "reflects a legislative imperative" that the City was powerless to bargain away. Accordingly, it was required to follow the provisions of Section 80 of the Civil Service Law notwithstanding any Taylor Agreement provision to the contrary.

*** Section 80-a applies to suspension or demotion upon the abolition or reduction of non-competitive class positions in the state service.

**** In Honeoye the issue was the maintenance of adequate classroom standards.
NYPPL