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December 21, 2010

Criminal investigations and the Taylor law

Criminal investigations and the Taylor law
New York City v Uniformed Fire Officers Asso., 95 NY2d 273

With increasing frequency, procedures addressing employee rights in the course of an employer-initiated investigation are being included in Taylor Law agreements. Typically disputes involving alleged violations of such negotiated procedures are to be resolved under the relevant contract arbitration procedure.

However, an investigation of employee conduct may be conducted by an outside independent agency. If the outside agency uses a procedure that the employee organization claims violates the provisions set out collective bargaining agreement can the union treat the situation as a contract violation and invoke the contract grievance procedure? Stated another way, does the investigation provisions of a collective bargaining procedure trump the procedures adopted by an outside investigatory body?

This was the major issue addressed by the Court of Appeals in the Fire Officers Association case. The case arose after New York City’s Department of Investigation [DOI] issued subpoenas to several firefighters as part of several criminal investigations it was conducting.*

Local 854, referring to provisions in a city-wide Taylor Law contract setting out procedures to be followed in the event of an investigation of an employee, complained that the procedures used by the DOI did not comply with the procedures set out in the agreement. Alleging that DOI’s procedures violated the contract’s employee rights Article, it demanded arbitration.

The City objected but the New York City Board of Collective Bargaining [BCB] issued a determination ruling that the dispute should be submitted to arbitration under the contract. The City next sued, seeking to stay the arbitration and annul the BCB ruling. The basic arguments advanced by the City:

1. The City never agreed to arbitrate the procedures used by the DOI in conducting its criminal investigations;

2. A collective bargaining agreement cannot, as a matter of public policy, supplant or impair DOI’s investigation; and

3. The grievances challenging DOI’s procedures are not arbitrable as a matter of strong public policy.

The Court of Appeals said that the public policy issue concerned DOI’s ability to conduct criminal investigations. The court initially noted that it has recognized that “[p]ublic policy whether derived from, and whether explicit or implicit in statute or decisional law, or in neither, may restrict the freedom to arbitrate,” citing Susquehanna Valley School District v Susquehanna Valley Teachers Association, 37 NY2d 614.

In this instance the court concluded that considering the statutory and decisional law concerning the DOI and its purpose and its powers, a strong public policy bars arbitrating the grievance. In the words of the court, [t]he City (and its residents) has a significant interest in ensuring that the inner workings of the machinery of public service are honest and free of corruption. We conclude that this public policy restricts the freedom to arbitrate under the circumstances presented here.

The court’s rationale: allowing an arbitrator to grant a city employee or a union the ability to restrict the DOI’s investigatory procedures by invoking the employee rights provisions of a collective bargaining agreement would amount to an impermissible delegation of the broad authority of the City to investigate its internal affairs.

The Court of Appeals, by way of illustration, observed that “... a board of education may not surrender its ultimate responsibility for making tenure decisions or restricting its exclusive right to terminate probationary teacher appointments and thus such the denial of tenure is not subject to grievance arbitration.”

In contrast, however, the court distinguished the granting of tenure by an arbitrator to his or her enforcing bargained-for procedural steps preliminary to the board’s final action to grant or withhold tenure. While denying tenure is not arbitrable, alleged violations of procedures to be followed in determining whether to grant or deny tenure are arbitrable.

The court also noted that there are other situations in which no arbitration remedy could be granted without violating public policy. To illustrate this point the court cited Blackburne v Governor’s Office of Employee Relations, 87 NY2d 660).

In Blackburne, an employee, who had violated the Federal Hatch Act, claimed that he was terminated in violation of the procedural guarantees found in the relevant Taylor Agreement.

The Court of Appeals decided that the arbitrator could not mandate compliance with the collective bargaining agreement’s procedural guarantees concerning employee termination without subjecting the State to the loss of Federal funds because of Blackburne’s Hatch Act violation. To do so, said the court, would constitute an impermissible delegation of the State’s sovereign authority.

The general rule set out by the court: Where a court examines an arbitration agreement or an award and concludes that the granting of any relief would violate public policy, courts may intervene and bar arbitration.

In contrast to the situation in the Susquehanna Valley School District case, where the issue concerned the compliance with procedural steps leading to a tenure determination, here, said the court, granting of any relief under the procedural protections of the Taylor Law contract would not only impinge on DOI’s ability to conduct a criminal investigation, but would add another layer of process, decision-making and potential conflict. Thus, public policy considerations preclude referring the matter to arbitration in this instance.

Declining to defer to BCB’s interpretation of the City’s collective bargaining law, the Court of Appeals ruled that the demand for arbitration must be permanently stayed.

* One such investigation, for example, concerned an alleged scam attempted by a firefighter to obtain greater pension benefits by fraudulently claiming that he sustained a disabling injury in the line of duty. The scheme allegedly involved one firefighter calling in a false alarm to afford the injured firefighter the opportunity to claim that his injury occurred in responding to the alarm. Among those firefighters interviewed were members of the Uniformed Fire Officers Association, Local 854 [Local 854].


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New York Public Personnel Law Blog Editor Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor members of the NYPPL staff are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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