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September 30, 2016

The conduct of a municipality or government entity may serve to ratify the terms and conditions of an agreement not approved as provided by law

The conduct of a municipality or government entity may serve to ratify the terms and conditions of an agreement not approved as provided by law
Prudenti v County of Suffolk, Appellate Division, 2016 NY Slip Op 06203

On September 20, 2011, the then Suffolk County Executive entered into a Memorandum of Agreement [MOA] with the Suffolk County Deputy Sheriffs Police Benevolent Association [DSPBA] pursuant to which DSPBA agreed to defer the payment of approximately $4 million in retroactive pay increases its members that had been awarded to DSPBA members by an arbitration panel for the period January 2008 through December 2010 until December 2015. In exchange, Suffolk County agreed not to transfer any of the DSPBA members' official duties to other law enforcement officers through December 2017. Suffolk and DSPBA also agreed that any disputes concerning the interpretation and, or, implementation of any provision of the MOA could be submitted to arbitration.

Notwithstanding the “no transfer” provision in the MOA, in September 2012, the successor County Executive and the County entered into an agreement with the Suffolk County Police Benevolent Association [PBA] that provided that the County would transfer certain highway patrol and enforcement work previously assigned to DSPBA members to PBA members.

DSPBA filed a demand for arbitration and subsequently commenced a CPLR Article 75 action seeking a preliminary injunction prohibiting Suffolk County from transferring the highway patrol and enforcement work to members of the PBA pending resolution of the arbitration proceeding and, in addition, for a judgment declaring that the MOA is valid and enforceable.

Suffolk County cross-moved to permanently stay the arbitration proceeding contending [1] that no valid agreement to arbitrate the MOA had been made and [2] that the wage deferral provisions of the MOA were invalid because they called for an additional appropriation of funds that had not been approved by the County Legislature.* The Suffolk County Superior Officers Association [SOA] and PBA joined in the motions to stay the arbitration and to dismiss DSPBA’s complaint.

Supreme Court held that the MOA entered into by the former Suffolk County Executive and the DSPBA was valid and enforceable and rejected motions pursuant to CPLR 7503(b) by Suffolk, the PBA, and the SOA to permanently stay arbitration. The court also directed Suffolk County and DSPBA to proceed to arbitration. Suffolk County, PBA and SOA appealed.

The Appellate Division first ruled that, contrary to the contentions of Suffolk County, the PBA, and the SOA, Supreme Court's declaration upholding the validity of the MOA was procedurally proper.

Addressing the merits of the action, the Appellate Division held that Supreme Court correctly determined that the MOA was valid and enforceable as matter of law, regardless of whether the wage deferral provisions required legislative approval pursuant to Civil Service Law §204-a(1), because the County Legislature had ratified those provisions by its conduct.

The court explained that a contract that is not approved by the relevant municipal or governmental body as required by law, rule, or regulation may be ratified by the municipality or government body by its subsequent conduct. In this instance, said the Appellate Division, it was demonstrated “prima facie” that the County Legislature “accepted the benefits of the MOA and partially performed thereunder with knowledge of its terms in a manner clearly referable to the agreement.”

As the County, the SOA, and the PBA failed to raise a triable issue of fact, the Appellate Division said the Supreme Court properly concluded that the County Legislature had ratified the MOA.

* Civil Service Law §204-a.1 requires that “Any written agreement between a public employer and an employee organization determining the terms and conditions of employment of public employees shall contain the following notice in type not smaller than the largest type used elsewhere in such agreement: "It is agreed by and between the parties that any provision of this agreement requiring legislative action to permit its implementation by amendment of law or by providing the additional funds therefor, shall not become effective until the appropriate legislative body has given approval."

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