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June 10, 2013

Past practice found sufficient to trump the absence of language in the relevant collective bargaining agreements providing for the practice

Past practice found sufficient to trump the absence of language in the relevant collective bargaining agreements providing for the practice
Chenango Forks Cent. Sch. Dist. v New York State Pub. Empl. Relations Bd., 2013 NY Slip Op 04039, Court of Appeals

The Chenango Forks Central School District told its faculty and staff it was discontinuing its practice of reimbursing Medicare Part B premiums of retirees 65 years of age or older participating in the District’s health insurance plan due to the cost involved of providing that benefit.

Initially the School District had been reimbursing these premiums as required by its then healthcare insurance plan. In 1990 the Union representing the faculty and the staff and the District agreed upon a new health insurance plan. This new plan was set out in the relevant collective bargaining agreement (CBA).

Although the new plan did not require the District to reimburse the retirees for the Medicare Part B premiums they were paying, the District continued to provide this benefit to its retirees. The successor collective bargaining agreements subsequently negotiated by the parties were silent with respect to the District reimbursing retirees for their Medicare Part B premium.

In response to the letter the Union filed a contract grievance contending that the School District had violated the CBA by failing to negotiate cancellation of Medicare Part B premium reimbursement. Shortly thereafter it filed an improper practice charge with the New York State Public Employment Relations Board on essentially the same theory.

Consistent with PERB's policy of refraining from asserting jurisdiction over an issue in dispute that was pending arbitration “until a determination is made as to whether the parties' [CBA] provide[d] a source of right to the charging party," PERB’s Administrative Law Judge “conditionally dismissed the [Union's] improper practice charge, subject to a motion to reopen.”

The arbitrator ruled there was no language in the collective bargaining agreement that would require Chenango Fork to reimburse retirees' Medicare Part B premiums that they had paid. The arbitrator explained that with respect to historical practices of the District regarding its making reimbursing retirees for the Medicare Part B premium they had paid “such practices originated from the former [healthcare plan] and a now repealed statutory obligation on the part of the District, and once the statutory obligation was removed, the District made voluntary Medicare Part B reimbursement payments to retirees. The voluntariness of the District's conduct,* given the origin of the District's Medicare Part B reimbursements, does not contain sufficient evidence of a mutual understanding and agreement to establish a binding past practice" (emphasis in the original).

The Union then asked PERB to reopen the improper practice charge it had earlier filed. PERB's Administrative Law Judge granted the Union’s request, opining that because "the arbitrator found no [contractual] source of right to [the Union] with respect to the dispute at issue ..., [the Union was] not seeking to enforce an agreement in the context of the charge, and PERB [had] jurisdiction over the alleged failure to continue a non-contractual practice."

Based on facts stipulated by the parties and the testimony given at hearings, ultimately PERB held that the District had violated Civil Service Law §209-a (1) by circulating the memorandum advising its employee of the fact that the District was going to discontinue its reimbursing retirees for the premiums they paid for Medicare Part B and there existed a past practice of providing a benefit — “the promise to reimburse current employees' post-retirement Medicare Part B premiums — which is a mandatory subject of bargaining”

PERB noted that the test for establishing a binding past practice under the Taylor Law was set out in its decision in Matter of County of Nassau (24 PERB ¶ 3029 [1991]) where it ruled that the "practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected [bargaining] unit employees that the [practice] would continue.”. PERB also noted that "the expectation of the continuation of the practice is something that may be presumed from its duration with consideration of the specific circumstances under which the practice has existed" and denied the District’s exceptions to the Administrative Law Judge’s ruling.

The Court of Appeals sustained PERB’s determination, concluding that under the facts in this case “it was reasonable for PERB not to defer to the arbitrator [as the] identity of issues was lacking and, to the extent the arbitrator purported to determine there was no past practice within the meaning of the Taylor Law, he exceeded his authority and his finding was repugnant to that statute.”

* The District contended that its continuation of the reimbursement of its retirees for Medicare premiums was the result of an administrative oversight.

The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2013/2013_04039.htm

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Text prepared by Harvey Randall except as otherwise noted. Randall, former Principal Attorney, New York State Department of Civil Service, also served as Director of Personnel for the State University System; as Director of Research, Governor’s Office of Employee Relations; and as Staff Judge Advocate General, New York Guard. He has an MPA from the Maxwell School, Syracuse University and a J.D. from Albany Law School.