A public benefit corporation may not establish an alternate civil service system unless such action is authorized by law

A public benefit corporation may not establish an alternate civil service system unless such action is authorized by law

Civil Serv. Empls. Assn., Inc. v Westchester County Health Care Corp., 2016 NY Slip Op 02649, Appellate Division, Second Department

In Collins v Manhattan & Bronx Surface Tr. Operating Auth., 62 NY2d 361, the Court of Appeals held that “public benefit corporation was not subject to constitutional provisions regarding civil service appointment.” As a general rule, unless the law specifically makes the Civil Service Law applicable to the employees of a public benefit corporation, such persons are not subject to its provi­sions. 

For example, although Section 8087 of the Unconsolidated Laws provides that the employees of the New York City Off-track Betting Corporation are subject to the Civil Service Law and "other laws applicable to civil service personnel," statutes creating other OTBs do not include such a provision. Accordingly, New York courts have ruled that employees of such other OTBs are not in the public service for the purposes of the Civil Service Law.

In 1997 Article 10-C of the New York Health Care Corporations of the Public Authorities Law was amended by adding §§3300 – 3321 to create the Westchester County Health Care Corporation (WCHCC), a “public benefit corporation."* Significantly, §3304.4 provides that WCHCC shall be subject to the civil service law while §3305.12 grants WCHCC the authority “to appoint such officers, employees and agents as the corporation may require for the performance of its duties and to fix and determine their qualifications, duties, and compensation subject to the provisions of the civil service law and any applicable collective bargaining agreement, and to retain or employ counsel, auditors, engineers and private consultants on a contract basis or otherwise for rendering professional, management or technical services and advice.”

In 2013 WCHCC’s Board of Directors, WCHCC's governing body, adopted Resolution No. 29-2013 directing WCHCC's management to "take all steps and provide the resources necessary to establish, administer, and maintain its own civil service system." 

In response to this action by WCHCC the Civil Service Employees Association, Inc. and a number of other employee organizations [CSEA] initiated an Article 78 action contending that the Board acted in violation of the Act directing the establishment of its own civil service system when it approved the Resolution.

Supreme Court agreed, annulling the Resolution and WCHCC appealed.

The Appellate Division said that the standard of review in this proceeding pursuant to CPLR Article 78 is whether “the resolution under review was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion.” In considering questions of statutory interpretation the Appellate Division explained that a court's "primary consideration is to ascertain and give effect to the intention of the Legislature" as "[T]he statutory text provides the clearest indication of legislative intent, and should be construed to give effect to its plain meaning."

In this Article 78 action the court ruled that CSEA met its burden of proving that WCHCC's adoption of the Resolution No. 29-2013 was affected by “an error of law” as the statute creating it did not explicitly nor implicitly transferred to the WCHCC and its Board of Directors the authority to self-administer its own civil service system.

Accordingly, the Appellate Division ruled that the Supreme Court properly annulled the Resolution.

* The significant provisions of §3304 addressing the transfer of certain officers and employees of Westchester County to WCHCC provide that [1] such officers and employees shall become officers and employees of WCHCC with equivalent offices, positions and employment and shall be deemed public officers or public employees for all purposes; [2] the provisions of §70 shall apply to such transfers as appropriate; [3] individuals holding a temporary or provisional appointment so transferred shall be subject to the same right of removal, examination or termination as though such transfer had not been made consistent with the provisions of the applicable collective bargaining agreement [CBA]; [4] WCHCC shall recognize the existing certified or recognized employee organizations for those persons who become WCHCC employees and be bound by the relevant provisions of CBAs with respect to existing terms and conditions of employment which CBAs shall remain in effect until altered by the terms of a successor contract; [5] successor employees to the positions held by such employees shall, consistent with the provisions of Article Fourteen of the Civil Service Law, be included in the same unit as their predecessors; [6] the salary or compensation of any such officer or employee, after such transfer, shall be paid by WCHCC and WCHCC shall acknowledge and give credit for all leave balances held by such officers and employees on the date of transfer; and [7] WCHCC shall be subject to the civil service law

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_02649.htm
[Motion for leave to appeal denied with one hundred dollars costs and necessary reproduction disbursements.]