Arbitrating the interpretation of a collective bargaining agreement
City of Schenectady v Schenectady PBA, 289 AD2d 814
The applicable collective bargaining agreement [CBA] between the City of Schenectady and the Schenectady PBA provided that “all police department employees ... will be provided retirement benefits based upon their average earnings during the 12-month period prior to his or her retirement pursuant to Retirement and Social Security Law Section 302.9(d).”
Section 302.9(d) applied only to Tier I employees at the time the CAB was executed. In 1999 Section 302.9(d) was amended to include both Tier I and Tier II members of the retirement system. When the City refused to extend the CBA “12-month period” benefit to its retiring Tier II police employees, the PBA grieved and demanded the issue be submitted to arbitration.
The City obtained a stay of arbitration on the ground that the dispute was not arbitrable. On appeal the Appellate Division reversed the lower court's ruling holding that there was no public policy or statutory bar to submitting the matter to an arbitrator for resolution.
The court pointed out the in determining whether or not a public sector negotiated contract grievance is subject to arbitration, a two-step analysis is used, citing Liverpool Central School District v United Liverpool Faculty Association, 42 NY2d 509, 513.
The first test: does the issue concern a subject that is arbitrable under the Taylor Law? The court said that as neither the City nor the PBA claimed that public policy prevents arbitration of this retirement issue, it only had to consider the second test: did the parties agreed to arbitrate the dispute in question?
The standard to be applied by the court in evaluating the second test: is there a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA.
The PBA relied on the language in the CBA that provided that: Pursuant to the provisions of [Retirement and Social Security Law] Section 302.9(d) ... [the City] will provide retirement benefits based upon the average earnings during the twelve (12) month period prior to ... retirement.
The PBA argued that the City violated this provision when it refused to apply this provision to both Tier I and Tier II retiring members of its police department. The City, on the other hand, contended that the issue was not subject to arbitration as it never contemplated the provision would be applicable to Tier II members of the retirement system.
The Appellate Division found that “there is a decided relationship between the subject in dispute and the general subject of the CBA.”
Further, said the court, the City was, in effect, asking it “to interpret a substantive provisions of the CBA and find that the subject of the grievance could not have been contemplated by the parties at the time that they executed the CBA,” on the theory that the relevant provisions of Retirement and Social Security Law were not in existence at the time the CBA was negotiated and, “therefore, the benefits provided under that section were not and could not have been bargained for.”
This is exactly the type of interpretation of a CBA that the courts are told is the “kind of merit inquiry that [courts] are admonished not to engage in,” citing Committee of Interns and Residents v Dinkins, 86 NY2d 478.
The court rejected the City's contention that Retirement and Social Security Law Section 443(f-1) precludes the arbitration demanded by the PBA. Why? Because, said the Appellate Division, “[t]hat section provides that an unsuccessful demand for Retirement and Social Security Law Section 443(f) benefits, during collective bargaining negotiations, shall not be subject to compulsory interest arbitration as provided for in Civil Service Law Section 209(4).
Accordingly, the court decided that Section 443(f-1) does not address and, therefore, does not prohibit such issue from being raised, as here, in contractual grievance arbitration.
The Appellate Division came to the same conclusion in a case involving the same basic issue: City of Johnstown v Johnstown PBA, decided December 20, 2001.