Arbitrating the interpretation of a collective bargaining agreement

Arbitrating the interpretation of a collective bargaining agreement

City of Schenectady v Schenectady PBA, 289 AD2d 814

The applicable collective bargaining agreement [CBA] between the City of Schenectady and the Schenectady PBA provided that “all police department employees ... will be provided retirement benefits based upon their average earnings during the 12-month period prior to his or her retirement pursuant to Retirement and Social Security Law Section 302.9(d).”

Section 302.9(d) applied only to Tier I employees at the time the CAB was executed. In 1999 Section 302.9(d) was amended to include both Tier I and Tier II members of the retirement system. When the City refused to extend the CBA “12-month period” benefit to its retiring Tier II police employees, the PBA grieved and demanded the issue be submitted to arbitration.

The City obtained a stay of arbitration on the ground that the dispute was not arbitrable. On appeal the Appellate Division reversed the lower court's ruling holding that there was no public policy or statutory bar to submitting the matter to an arbitrator for resolution.

The court pointed out the in determining whether or not a public sector negotiated contract grievance is subject to arbitration, a two-step analysis is used, citing Liverpool Central School District v United Liverpool Faculty Association, 42 NY2d 509, 513.

The first test: does the issue concern a subject that is arbitrable under the Taylor Law? The court said that as neither the City nor the PBA claimed that public policy prevents arbitration of this retirement issue, it only had to consider the second test: did the parties agreed to arbitrate the dispute in question?

The standard to be applied by the court in evaluating the second test: is there a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA.

The PBA relied on the language in the CBA that provided that: Pursuant to the provisions of [Retirement and Social Security Law] Section 302.9(d) ... [the City] will provide retirement benefits based upon the average earnings during the twelve (12) month period prior to ... retirement.

The PBA argued that the City violated this provision when it refused to apply this provision to both Tier I and Tier II retiring members of its police department. The City, on the other hand, contended that the issue was not subject to arbitration as it never contemplated the provision would be applicable to Tier II members of the retirement system.

The Appellate Division found that “there is a decided relationship between the subject in dispute and the general subject of the CBA.”

Further, said the court, the City was, in effect, asking it “to interpret a substantive provisions of the CBA and find that the subject of the grievance could not have been contemplated by the parties at the time that they executed the CBA,” on the theory that the relevant provisions of Retirement and Social Security Law were not in existence at the time the CBA was negotiated and, “therefore, the benefits provided under that section were not and could not have been bargained for.”

This is exactly the type of interpretation of a CBA that the courts are told is the “kind of merit inquiry that [courts] are admonished not to engage in,” citing Committee of Interns and Residents v Dinkins, 86 NY2d 478.

The court rejected the City's contention that Retirement and Social Security Law Section 443(f-1) precludes the arbitration demanded by the PBA. Why? Because, said the Appellate Division, “[t]hat section provides that an unsuccessful demand for Retirement and Social Security Law Section 443(f) benefits, during collective bargaining negotiations, shall not be subject to compulsory interest arbitration as provided for in Civil Service Law Section 209(4).

Accordingly, the court decided that Section 443(f-1) does not address and, therefore, does not prohibit such issue from being raised, as here, in contractual grievance arbitration.

The Appellate Division came to the same conclusion in a case involving the same basic issue: City of Johnstown v Johnstown PBA, decided December 20, 2001.

Discovery of public employer’s electronic records in federal litigation

Discovery of public employer’s electronic records in federal litigation

Pritchard, et al v County of Erie and others, 546 F.3d 222

Pritchard obtained an order from a federal district court justice compelling Erie County to produce certain electronic communications – e-mails - between County officials and an attorney employed by the County. The County objected, claiming that these e-mails were protected by the attorney-client privilege. The Circuit Court of Appeals agreed and vacated the district court’s order.

However, the Circuit Court then remanded the matter back to the lower court to consider another issue: “whether the privilege was otherwise waived.” Accordingly, the Circuit Court directed the lower court “to enter an interim order to protect the confidentiality of the disputed communications” until the issue of whether the privilege claimed by the County had been waived was decided.

United States District Court Justice Curtin had initially authorized the discovery of e-mailed communications, among other documents, that had been exchanged by an Assistant Erie County Attorney and County officials. The County characterized these e-mails as e-mails that “solicit, contain and discuss advice from attorney to client.”

In the words of the Second Circuit, Erie County’s petition “raises an issue of first impression: whether the attorney-client privilege protects communications that pass between a government lawyer having no policymaking authority and a public official, where those communications assess the legality of a policy and propose alternative policies in that light.”

The attorney-client privilege protects confidential communications between client and counsel made for the purpose of obtaining or providing legal assistance. As the Supreme Court said in Upjohn Co. v. United States, 449 U.S. 383. at 389, “This permits attorneys and their clients to communicate fully and frankly and thereby to promote ‘broader public interests in the observance of law and administration of justice.’”

In civil suits between private persons and government agencies, the attorney-client privilege protects most confidential communications between government counsel and the agency that are for the purpose of obtaining or providing legal assistance.

The Circuit Court said that “Access to legal advice by officials responsible for formulating, implementing and monitoring governmental policy is fundamental to promot[ing] broader public interests in the observance of law and administration of justice,” again citing Upjohn.

In this instance, the Circuit Court decided that the e-mails in question were exchanged between the county officials and their county attorney for “the predominant purpose of soliciting or rendering legal advice." They convey to the public officials responsible for formulating, implementing and monitoring Erie County’s corrections policies, a lawyer’s assessment of Fourth Amendment requirements, and provide guidance in crafting and implementing alternative policies for compliance. This advice -- particularly when viewed in the context in which it was solicited and rendered--does not constitute “general policy or political advice” unprotected by the privilege.

The issue of privilege with respect to electronic communications and records kept in electronic form will probably be the subject of future litigation. Changes to the Federal Rules of Civil Procedure [Rules 5.1, 16(b), 24, 26(a), 26(b)(2), 26(b)(5), 26(f), 33, 34(a), 34(b), 37(f), 45], and the Federal Rules of Evidence [Rules 404, 408, 606, 609], among others, took effect on December 1, 2006.

These amendments essentially address electronically stored information for the purpose of “discovery” in the course of litigation, including the obligation of the litigants to meet and confer about electronic discovery early in litigation and the discovery of information “electronically stored.” The new rules also require the parties to include information about electronically stored information in initial disclosures; the mandated early discovery-planning conference of counsel; the report to the court; and the pretrial scheduling conference with the judge. 

Depression may not qualify as a disability

Depression may not qualify as a disability

Aldrup v Caldera, 274 F.3d 282

William A. Aldrup complained that he was depressed and this constituted a disability under ADA. The reason for his depression: he had suffered stress and anxiety because of his having to work with certain employees.

The Fifth Circuit Court of Appeals rejected Aldrup's claims, finding that he was not disabled within the meaning of the ADA because although he was unable to work only with particular co-workers at one particular job, he could work with other individuals at another work site.

Aldrup was a firefighter at a military installation, the Camp Bullis Fire Station. Because of a staffing shortage at another installation, Aldrup was assigned to the Fort Sam Houston Station -- about 20 miles away from Bullis -- for one day. He refused to report to Sam Houston.

He was charge with insubordination and dismissed from his position. Earlier he had been subjected to “progressive discipline” for other acts of insubordination.*

Clearly, the failure of a subordinate to follow a direct order of a supervisor is a legitimate, nondiscriminatory reason for taking adverse employment action. Did Aldrup state a valid explanation of his insubordination by claiming that he suffered a disability involving a major life activity -- working?

The court decided that Aldrup had failed to offer evidence that he was substantially limited in the life activity of working and that he had failed to create a fact issue that his employer's proffered reason for his removal -- insubordination -- was pretextual.

Aldrup based his disability claim on his alleged depression resulting from “the stress and anxiety of having to work with certain employees at the [Houston Station].” This, said the court, was insufficient to demonstrate that Aldrup was disabled within the meaning of the ADA. His claim, “if supported by the record, would merely tend to show that he was unable to perform any job at one specific location, and is not evidence of Aldrup's general inability to perform a broad class of jobs.”

Aldrup also claimed that he was entitled to disobey his supervisor's order because it placed him in personal jeopardy. The court said that while a subordinate must obey an order first and complain later, there is an exception when obeying the order would place the subordinate in a clearly dangerous situation. The Circuit Court did not find any “clearly dangerous situation” present that would excuse Aldrup's misconduct in refusing to comply with his superior's directive.

The court's conclusion: based on the record, the decision to remove Aldrup was neither arbitrary nor capricious.

* In challenging the Merit Systems Protection Board's sustaining his dismissal, Aldrup alleged “mixed claims” -- i.e., claims based on discrimination as well as other grounds. The Circuit Court said that while it did not generally have jurisdiction to review the decisions of the Merit Systems Protection Board, it did have jurisdiction over this type of “mixed case,” citing Wiggins v US Postal Service, 653 F.2d 219.

Governor Cuomo announces five year labor agreement with the Civil Service Employees Association

Governor Cuomo announces five year labor agreement with the Civil Service Employees Association

Source: Executive Office Press Office

On June 22, 2011 Governor Andrew M. Cuomo announced that his administration has reached a five-year labor agreement with the Civil Service Employees Association (CSEA). CSEA represents 66,000 New York State employees and is one of the largest public employee unions in the state. The agreement, which must be ratified by members of CSEA in the several State negotiating units represented by CSEA, would provide State employees represented by CSEA with protection from broad layoffs.

”The agreement includes a freeze on base wages for 3 years and a redesign of the employee health care contribution and benefit system, saving $73 million this fiscal year and $93 million next fiscal year. If adopted by the state's other collective bargaining units, the agreement will reduce workforce costs by $1.63 billion over the course of the agreement, including $1.27 billion of savings in healthcare costs, and would achieve sufficient savings to avoid the need for broad layoffs arising from the gap in the state operations budget. Overall, the five-year agreement if adopted statewide would be $3.8 billion less expensive to the state than the previous four-year agreement reached in 2007.”

Key elements reported:

Base Wages: Under the five year agreement, there will be no general salary increase in Fiscal Year 2011-12; 2012-13; 2013-14. Employees will receive a 2 percent increase in 2014-15 and 2015-16.

2011-12	2012-13	2013-14	2014-15	2015-16
0%	0%	0%	2%	2%

Expected Savings: The 2011 wage agreement is $2.5 billion less costly to the state than the 2007 agreement, if adopted through the state workforce.

Health Care System Redesign: The agreement includes a series of reforms in the employee health care system that saves $61 million annually in the CSEA contract and $263 million over the contract term. If adopted by all bargaining units, these reforms would save $1.27 billion. The components of the health system redesign are: 

Health Care Contributions: The agreement includes substantial changes to employee health care contributions bringing public employee benefits more in line with the private sector. The contribution for health care benefits have not changed in 30 years, while the cost of the state's health care program has increased 100 percent in the past decade. The agreement reflects a two percent increase in contributions for Grade 9 employees and below, and a six percent increase for Grade 10 employees and above. (Under the agreement, for example, the state will pay 69 percent of family coverage for a Grade 10 employee and above, and the employee will pay 31 percent. The prior split was 75 percent state/25 percent employee. For individual coverage, a Grade 10 employee and above will pay 16 percent and the state share will be 84 percent. The prior split was 10 percent employee/90 percent state).

Expected Savings: The CSEA agreement results in $30 million in annual savings from this provision, and $141.7 million over the contract term. If adopted for the entire workforce, this change will save $165 million per year, and $764 million over the term of the contract.

Health Care Opt Out: For the first time, the state is offering an opt-out option. Health care premiums cost $16,600 for family coverage and $7300 for individual coverage. Employees electing to opt out of the health insurance program must provide proof of alternative coverage and will receive $1000 or $3000 for the cessation of individual or family coverage, respectively. This will save the state thousands of dollars for each employee who opts out.

Savings: The opt-out will save $7.3 million annually and $31 million over the contract term for CSEA alone. The opt-out achieves $21.6 million in annual savings, and $91.8 million over the five year term if adopted statewide.

Health Benefit Redesign: The health benefit plan system of co-pays, deductibles, and programs has been redesigned to encourage healthy choices and control costs of pharmaceutical products. For example, for the first time the plan will cover the use of nurse practitioners and "minute clinics" and encourage employees to use these services when appropriate instead of hospital emergency rooms.

Expected Savings: The CSEA savings for this provision are $22.3 million annually and $95.7 million over the contract term. If adopted by all bargaining units, these changes generate $85.5 million annually when adopted statewide, and $361.4 million over the term of the contract.

Deficit Reduction Leave: Under the agreement, employees will take a five day unpaid deficit reduction leave during fiscal year 2011-12 and four days unpaid leave during fiscal year 2012-13. The value of the days taken not worked will be deducted from employee pay over the remaining pay periods equally during the fiscal year in which they are taken. Employees will be repaid the value of the 4 days from 2012-13 in equal installments starting at the end of the contract term.

Expected Savings: The furloughs will yield $360 million in savings if adopted by all bargaining units.

Performance advances, longevity and retention payments: Performance advances and longevity payments will continue to be in effect. Current employees who remain active through 2013 will earn a onetime retention payment of $775 in 2013 and $225 in 2014 in recognition of working without a wage increase for three years.

Patient Abuse Reforms: Both CSEA and the State agree that the system in place for investigating allegations of abuse of patients at state facilities does not adequately protect our most vulnerable population in state care. While CSEA employees are dedicated caretakers, allegations of abuse must be dealt with thoroughly. Under the agreement, the State and CSEA will take a number of steps to improve the quality of care, including creating a completely new Select Panel on Patient Abuse with A-list arbitrators and creating a table of penalties for increasingly severe acts of misconduct, along with a number of other reforms.

Review of Temporary Employees: The State and CSEA will form a joint committee to review the use of temporary employees and contractors and make recommendations to the Division of Budget and Department of Civil Service.

Layoff Protection: CSEA employees will receive broad layoff protection for fiscal year 2011-12 and 2012-13 arising from the $450 million budget gap. Workforce reductions due to management decisions to close or restructure facilities authorized by legislation, SAGE recommendations or material or unanticipated changes in the State's fiscal circumstances are not covered by this limitation.

Negotiations for the State were led by a special team appointed by the Governor comprising Todd R. Snyder, Senior Managing Director of Rothschild Inc. and Co-Head of Rothschild's Restructuring and Reorganization group; and Joseph M. Bress, former head of the Governor's Office of Employee Relations and former Vice President of Labor Relations at Amtrak, under the direction of Howard Glaser, Director of State Operations.

Authority of an arbitrator to modify the disciplinary penalty proposed by the employer

Authority of an arbitrator to modify the disciplinary penalty proposed by the employer

Matter of Communication Workers of Am., Local 1170 v Town of Greece, 2011 NY Slip Op 05308, Appellate Division, Fourth Department

The arbitrator sustained various disciplinary charges against a Town of Greece police sergeant and determined that "[t]he Town had just and sufficient cause to demote" the Sergeant. The arbitrator further determined, however, that a permanent demotion was unreasonable and arbitrary, and converted the proposed penalty to a demotion for a term of one year.

The CWA asked Supreme Court to confirm the arbitration award while the Town asked the court to vacate the award in part on the ground that the award exceeded the scope of the arbitrator's authority. 

Supreme Court sustained Greece’s motion to vacate the award and remanded the matter to the Town for its imposition of a new penalty.

In response to CWA’s appeal, the Appellate Division held that Supreme Court erred in vacating that part of the arbitration award reducing the penalty to a demotion for a term of one year and remitted the matter "to the Town for reconsideration of the penalty to be imposed upon" the Sergeant and confirmed the arbitration award.

The Appellate Division said that an arbitrator’s award may be vacated on the ground that an arbitrator exceeded his or her power "only where the arbitrator's award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power."* 

The Court explained that “It is well established that "an arbitrator has broad discretion to determine a dispute and fix a remedy[] and that any contractual limitation on that discretion must be contained, either explicitly or incorporated by reference, in the arbitration clause itself'," citing Matter of State of New York [Dept. of Correctional Servs.] [Council 82, AFSCME], 176 AD2d 1009, lv denied 79 NY2d 756. Further, the Appellate Division pointed out that "To exclude a substantive issue from arbitration, therefore, generally requires specific enumeration in the arbitration clause itself of the subjects intended to be put beyond the arbitrator's reach."

Specifically the court decided that the underlying collective bargaining agreement [CBA] authorized the arbitrator to determine that the imposed punishment is "unreasonable, arbitrary or capricious" and if so found, the CBA specifically provides that, "where the penalty imposed is found to be unreasonable, arbitrary or capricious," the arbitrator may make a determination "with respect to the penalty imposed upon the grievant . . . ."

The Appellate Division pointed out that while the CBA does not explicitly authorize an arbitrator to substitute an appropriate penalty upon determining that the penalty imposed by the Town is unreasonable, arbitrary or capricious, there is likewise no such "specifically enumerated limitation on the arbitrator's power."

Accordingly, the court conclude that the arbitrator did not exceed his authority in modifying the grievant's penalty from a permanent demotion to a demotion for a term of one year.

* Courts have also vacated an arbitration award where it is determined that the award “violated strong public policy.” See Ford v CSEA, 94 AD2d 262, in which the court addresses the critical question of the power of an arbitrator to render a decision which impacts on or affects a public policy.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_05308.htm