Health insurance benefits set out in collective bargaining agreement found to have survived expiration of agreement and the employee's resignation

The plaintiff [Petitioner] in this action was initially employed by the City of Lockport [Lockport] in a position in a collective bargaining unit represented by the American Federation of State, County and Municipal Employees [AFSCME]. Lockport subsequently promoted Petitioner to a position in a collective bargaining unit represented by the Civil Service Employees Association [CSEA]. In 2008 Petition later left Lockport's employ and commenced working for Niagara County [County]. In 2016, Petitioner asked Lockport provide him medical benefits set out in the relevant collective bargaining agreements [CBAs] between Lockport and AFSCME and between Lockport and CSEA.

When Lockport refused to do so, Petitioner commenced an action for breach of contract and sought a court order declaring that Lockport was required to provide him with the medical benefits set out in the relevant CBA. Ultimately Supreme Court granted Plaintiff's motion for summary judgment, ruling that Lockport was obligated to provide Petitioner with medical benefits under the Lockport and AFSCME CBA. The Appellate Division, in response to Lockport's appeal challenging the Supreme Court's decision, affirmed the lower court's ruling.

The court explained that "[a]s a general rule, contractual rights and obligations do not survive beyond the termination of a collective bargaining agreement .... However, [r]ights which accrued or vested under the agreement will, as a general rule, survive termination of the agreement . . . , and [the court] must look to well established principles of contract interpretation to determine whether the parties intended that the contract give rise to a vested right."

Citing Kolbe v Tibbetts, 22 NY3d 344, the Appellate Division observed that whether a provision in a collective bargaining agreement "is ambiguous is a question of law and extrinsic evidence may not be considered unless the document itself is ambiguous. In contrast, said the court, where the language in the collective bargaining agreement "is 'reasonably susceptible of more than one interpretation, extrinsic or parol evidence may be then permitted to determine the parties' intent as to the meaning of that language,'" referencing Fernandez v Price, 63 AD3d 672 quoting Chimart Assoc. v Paul, 66 NY2d 570.

In this instance the Appellate Division concluded that Supreme Court "properly determined that the plain meaning of the provisions at issue in the AFSCME CBA establishes that [Petitioner] has a vested right to medical benefits, [that] those rights vested when he completed his 20th year of service, and [Petitioner] became eligible to receive said benefits when he reached retirement age."

Further opined the Appellate Division, Petitioner's right to medical benefits "vested when he satisfied the criteria in the AFSCME CBA, and there is no language in the AFSCME CBA indicating that employees would forfeit or surrender their vested rights if they transferred jobs or unions prior to reaching retirement age." Accordingly the court concluded that Supreme Court's interpretation of the AFSCME CBA "give[s] fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized ... and does not leave one of its provisions substantially without force or effect."

N.B. Motion to dismiss appeal granted, Motion #CA 18-00924 [see
http://www.nycourts.gov/reporter/motions/2018/2018_66476.htm]

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08792.htm