March 25, 2016

A party to a stipulation of settlement cannot withdraw from the stipulation on the basis that it had "improvidently" agreed to it

A party to a stipulation of settlement cannot withdraw from the stipulation on the basis that it had "improvidently"agreed to it
State of New York v Public Employment. Relations Board, 2016 NY Slip Op 02131, Appellate Division, Third Department

Supreme Court dismissed New York State’s application seeking a review of the New York State Public Employment Relations Board’s [PERB] denial of the State's request to withdraw from a stipulation of settlement and vacate a PERB decision issued in consideration of such stipulation.

The Governor's Office of Employee Relations (GOER) and the Public Employees Federation [PEF] notified PERB's Director of Public Employment Practices and Representation [Director] that the parties had reached a stipulation of settlement whereby PEF had agreed to withdraw certain representation petitions pending before PERB and that GOER had agreed to the placement of 250 of the 2,000 relevant unrepresented positions in the Professional, Scientific and Technical Services [PST] negotiating unit.

The parties expressly agreed that the employees in the 250 positions, which were listed in an attached appendix, were "not assigned to any duties that would bring them within the definition of managerial and/or confidential under [Civil Service Law] §201.7(a)" and that the individuals in those positions "share[d] a general community of interest with other [s]tate employees in the [PST] [u]nit." Relying on the stipulation, the Director issued an interim decision consistent with the stipulation. 

GOER subsequently moved to vacate the stipulation and the interim decision on the basis that GOER “it had failed to provide sufficient guidance to the impacted agencies to allow them to make a determination as to whether the employees in the subject positions served in a managerial or confidential capacity." This failure, said the State, resulted in certain employees being identified in the stipulation as PST unit employees although they, in fact, continued to perform duties that are appropriately deemed managerial or confidential within the meaning of the Taylor Law.

The Director denied the motion and, ultimately, PERB granted PEF's petition to the extent of placing the 250 positions in the P S and  T unit. The State then commenced an CPLR Article 78 proceeding seeking review of PERB's determination. Supreme Court confirmed the determination and dismissed the petition; the Appellate Division sustained the Supreme Court’s ruling.

Noting that the court had a “limited scope of review in matters involving PERB's interpretation of the Civil Service Law,” the Appellate Division explained that a determination made by PERB would not be vacated “unless it was affected by an error of law or was arbitrary and capricious or an abuse of discretion.”

Although the State argued that PERB's refusal to vacate the stipulation and the interim decision was arbitrary and capricious because:

[1] The stipulation did not provide a sufficient factual basis to determine whether placement of the 250 positions into the PST unit was appropriate; and

[2] In issuing the interim decision, the Director relied on representations made in the stipulation without conducting an independent investigation into the appropriateness of the placement.

The Appellate Division was not persuaded by these argument, holding that while the Director is charged with investigating all questions relating to representation status, including whether the public employees to be included in the unit share a community of interest and "whether there is agreement among the parties as to the appropriateness of the alleged unit," a fair reading of the applicable regulatory provisions demonstrates that the Director is not required to conduct an independent inquiry into representation issues when the parties agree on unit placement.*

In the alternative, the State contended that PERB acted arbitrarily and capriciously by refusing to allow it to withdraw from the stipulation on the basis that it had "improvidently" entered into it.

This argument also proved unpersuasive. In the words of the Appellate Division, “[s]tipulations of settlement are favored by the courts and will not be disturbed unless they are sullied by fraud, collusion, mistake or accident." Citing Da Silva v Musso, 53 NY2d 543, the court said that a stipulation may not be invalidated on the basis of unilateral mistake where the mistake arose out of a party's failure to ascertain facts that were available at the time that it entered into the stipulation.”

The same general principle applies with respect to collective bargaining agreements. In the Matter of the Arbitration between City of Plattsburgh and Plattsburgh Police Officers Union AFSCME Local 82, 250 AD2d 327, leave to appeal denied, 93 NY2d 803, the Appellate Division, in effect, held there is no judicial or quasi-judicial cure for “negotiator's remorse” should a party agree to a lawful contract provision in the course of  collective bargaining and subsequently claim it agreed to the provision “by mistake.”

The State’s “sole basis” for seeking rescission of the stipulation, said the court, was that it failed to provide the training necessary to determine whether an employee was performing in a managerial or confidential capacity and that it, therefore, "ha[d] reason to believe that certain of the employees continue[d] to perform duties that are appropriately deemed managerial or confidential."**

Noting that the parties had entered into the stipulation of settlement some 2½ years after PEF filed the triggering representation petition with PERB, the Appellate Division opined that the State “had sufficient time to investigate and discover the nature of the duties assigned to the employees in the 250 at-issue positions, and its failure to do so in a timely manner does not warrant invalidation of the stipulation of settlement.”

Another point to remember. From time to time a "position" may be referred to as a "managerial" or "confidential" position. However it is not the position  in which an incumbent serves that determines the individual's "managerial" or "confidential" status.The relevant law clearly provides that “individuals” rather than “positions” are to be designated managerial or confidential, which designation is to be based on the nature of the duties being performed by the individual rather than on the basis of the “title” of the position in which the individual serves.

§201.7[a], in pertinent part, states that “Employees may be designated as managerial only if they are persons (i) who formulate policy or (ii) who may reasonably be required on behalf of the public employer to assist directly in the preparation for and conduct of collective negotiations or to have a major role in the administration of agreements or in personnel administration provided that such role is not of a routine or clerical nature and requires the exercise of independent judgment. Employees may be designated as confidential only if they are persons who assist and act in a confidential capacity to managerial employees described in clause (ii).”

The only positions designated managerial or confidential in Article 14 of the Civil Service Law, the Taylor Law, in terms of  “title” are set out in Civil Service Law §201.7[b].

§201.7[b] provides that “For the purposes of this article, assistant attorneys general, assistant district attorneys, and law school graduates employed in titles which promote to assistant district attorney upon admission to the bar of the state of New York shall be designated managerial employees, and confidential investigators employed in the department of law shall be designated confidential employees.”

* The stipulation of settlement reflected that the parties agreed that the employees to be included in the unit, whose positions were listed in an appendix, did not perform duties that fell under the classification of managerial or confidential and that they shared a community of interest with the employees in the PST unit.

** The court also commented that the State “did not identify those employees that they assert were improperly placed into the P S and T unit or provide any evidence to substantiate its conclusory claims.”

The decision is posted on the Internet at:


Subsequent court and administrative rulings, or changes to laws, rules and regulations may have modified or clarified or vacated or reversed the decisions summarized here. Accordingly, these summaries should be Shepardized® or otherwise checked to make certain that the most recent information is being considered by the reader.
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 in this blog is presented with the understanding that neither the publisher nor members of the staff are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is advised to seek such advice from a competent professional.