The State commenced this CPLR Article 78 proceeding seeking to annul Public Employment Relations Board [PERB] determinations that  not charging examination application fees created an enforceable past practice; and  PERB's subsequently affirming a second Administrative Law Judge's decision ordering the State to stop requiring employees represented by the respondent employee organization for the purposes of collective bargaining to pay fees for promotional and transitional examinations and to reimburse those employees any money that they paid as a result of the State's unilateral imposition of such examination fees.
PERB had concluded that waiving fees for promotional and transitional examinations was a term and condition of employment because there was an "economic benefit" to the employees and rejected the State's contention that the issue of its imposition of the fees was a prohibited or permissive subject of collective bargaining. PERB, in contrast, determined that the subject was mandatorily negotiable and that the State had earlier established an enforceable past practice of not charging such fees.
Supreme Court and the Appellate Division, among other things, (1) confirmed PERB's determinations and (2) dismissed the State's petition (see 183 AD3d 1061, at 1064), explaining "the application fee" was a term and condition of employment because "the employees at issue received an economic benefit by not having to pay" that fee. Further, the Appellate Division agreed with PERB that the imposition of the fees was a mandatory subject for the purposes of collective bargaining and that an enforceable past practice to waive such fees existed.
The Court of Appeals reverse these lower court's rulings, holding charging application fees for promotional and transitional civil service examinations  was not a term and condition of employment as defined in Civil Service Law §201.4 and  the State had no obligation to negotiate those fees pursuant to Article 14 of the Civil Service Law, typically referred to as "The Taylor Law, Civil Service Law, CSL §200 et seq."
 The Taylor Law "requires all public employers and employee organizations to negotiate in good faith to determine represented employees' terms and conditions of employment";
 New York's "strong and sweeping public policy in favor of collective bargaining"; and
 "The presumption is that all terms and conditions of employment are subject to mandatory bargaining";
the Court of Appeals determined that a public employer's bargaining obligations extend only to terms and conditions of employment, a phrase defined by statute as "salaries, wages, hours and other terms and conditions of employment."
Here, said the court, PERB, relying on Matter of Local 237, International Brotherhood of Teamsters [Town of Islip], 44 PERB 3014, has interpreted the statute "to mean — and maintains here — that any 'economic benefit' afforded to employees is a term and condition of employment."
The Court of Appeals said PERB misapprehends its holding" In Matter of Town of Islip. In Islip "we merely acknowledged that PERB had determined that 'employee use of an employer-owned vehicle for transportation to and from work is an economic benefit and a mandatorily negotiable term and condition of employment' (see 23 NY3d at 491)." In the words of the Court of Appeals "PERB erroneously reads this language as adopting a per se rule that any economic benefit is a term and condition of employment."
The court held that PERB's determination in
this case "conflicts with Civil Service Law §201(4) and ... precedent". Although certain forms of compensation, including employees' health
benefits, qualify under the statute as a term and condition of employment, "to be a term and condition of employment under section 201(4), an
economic benefit must have some nexus to the employment".
As an example,
the Court of Appeals cited the employees' use of vehicles to commute to their jobs as a
term and condition of employment because the employer provided an economic
benefit that was plainly related to the employment. With respect to the instant litigation, the Court
of Appeals held that "PERB's determination here improperly eliminated the
The Court of Appeals' decision points out that Civil
Service Law §50(5) vests the Department of Civil Service with the power to impose
fees to recoup the administrative costs of conducting civil service examinations, not
with authority to alter the employer-employee relationship through the
imposition of the fees. In the words of the Court of Appeals, "The fees for promotional and
transitional exams at issue here are akin to fees imposed by an agency with
plenary authority to set fees for licenses that an employer may demand as a job
requirement, such as a driver's license or professional license".
Concluding the imposition of the subject fees was not encompassed within the definition of terms and conditions of employment within the meaning of Civil Service Law §201(4), nor did earlier waiver of the fees for State employees render them terms or conditions of employment, the Court of Appeals ruled that "the State had no obligation to negotiate with respect to their implementation."
Holding that PERB's conclusion to the contrary was error, the Court of Appeals determined that the order of the Appellate Division should be reversed, with costs, and that the State's petition to annul PERB's determinations in this matter should be granted.
Click HERE to access the text of the Court of Appeals decision posted on the Internet.