Attempt to obtain a "judicial reformation" of a provision in a collective bargaining agreement on the ground of "mutual mistake" fails

Attempt to obtain a "judicial reformation" of a provision in a collective bargaining agreement on the ground of "mutual mistake" fails

Source: NYMuniBlog

Attorneys James E. Beyerand Kate L. Hill of Harris Beach writing in NYMuniBlog summarized a Pennsylvania court decision, Matter of A.S. and R.S. v. Office of Dispute Resolution (Quakertown Community School District), that they characterize as “unequivocally a cautionary tale of contract law.” Their summary of the court's ruling is posted on the Internet at http://nymuniblog.com/lessons-in-diligence-reviewing-settlement-agreements-post-negotiation/

It appears that a Pennsylvania school district signed off on a settlement agreement in an Individuals with Disabilities Education Act (IDEA) matter without reviewing a signed copy of the revised original agreement it received from the student’s parents. The parents had amended their copy of the settlement agreement before returning it to the school.

This came to light when parents submitted an invoice for reimbursement for educational services that had been denied during negotiations. The parents argued that the approval of the settlement agreement by the district was the result of the district’s negligence rather than fraud on the part of the parents.

The court agreed with the parents and explained that the district’s fatal error was failing to have its counsel review the agreement [as] the district could have easily discovered the changes if someone compared the two agreements.

Perhaps the classic New York Personnel Law decision illustrating the unintended consequence that may be visited on a party to a contract is the fall-out from a collective bargaining agreement negotiated by a city and its police officers' union. 

A contract provision -- referred to as the "207-c benefits" clause – in the agreement  provided that permanently disabled police officers injured in the line of duty would receive the same benefits provided firefighters receiving an accidental disability retirement allowance pursuant to General Municipal Law §207-a.

In a nutshell, the disabled firefighter’s employer supplements his or her disability retirement allowance whereby the firefighter “shall continue to receive from the municipality or fire district by which he [or she] is employed, until such time as he [or she] shall have attained the mandatory service retirement age applicable to him [or her] or shall have attained the age or performed the period of service specified by applicable law for the termination of his [or her] service, the difference between the amounts received under such allowance or pension and the amount of his[or her] regular salary or wages." Such a salary supplementation is not available to permanently disabled police officer pursuant to GML §207-c.

According to the decision, the employer proposed to include language tracking the “disability” provisions of the General Municipal Law §207-c in the collective bargaining agreement and provided the union with a number of examples, including police contracts that cited GML §207-c as well as the employer's own agreement with its firefighters which cited GML §207-a. The proposed agreement with the police unit was prepared by the employer and included language providing police officers eligible for a GML §207-c benefit would be provided with the same benefit that a disabled firefighter eligible for a GML §207-a(2) salary supplement would receive.

Although the employer subsequently claimed it had discovered the "mistaken inclusion of this [§207-a] benefit" in 1966, the Appellate Division noted that “matters remained essentially dormant until February 4, 1997, when a disabled police officer applied for the supplemental [§207-a salary] payments provided under the parties' 207-c agreement.”

In response to the employer’s refusal to provide the police officer with this “contract benefit,” the union demanded that the matter be submitted to contract arbitration, whereupon the employer filed a petition seeking a judicial stay of the arbitration and for a "reformation of the 207-c agreement on the ground of mutual mistake."

The Appellate Division* ruled that the matter should submitted to arbitration.

Ultimately, the arbitrator, Howard A. Rubenstein, Esq., decided that the language used in the collective bargaining agreement controlled and thus the employer was required to provide its police officers disabled in the performance of their law enforcement duties the benefits provided firefighters mandated by General Municipal Law Section 207-a in accordance with the terms of the agreement.
NYPPL

* The Appellate Division's decision is summarized at http://publicpersonnellaw.blogspot.com/2010/11/claim-of-mistake-does-not-permit-party.html

Computer help desk specialist found guilty of insubordination after ignoring supervisor’s instructions not to answer phone calls with a “robotic voice”

Computer help desk specialist found guilty of insubordination after ignoring supervisor’s instructions not to answer phone calls with a “robotic voice”

OATH Index No. 108/14

A computer specialist employed by the City of New York was charged with insubordination for answering phone calls to the IT Help Desk in a robotic voice and failing to properly and timely process IT Help Desk tickets.

The employee denied answering calls in a robotic voice, and asserted that he was following the greeting script provided by his supervisor and speaking slowly and clearly so callers would understand him.

The employee’s supervisor, on the other hand, had sent a number of e-mail to the employee including one in which she stated that “a caller had asked whether there was a new automated answering system, and had hung up when she heard “the robot” answer the phone because she needed to speak to a human about her issue.”

OATH Administrative Law Judge Kara J. Miller found that employee was capable of answering calls in a normal tone but chose to use a robotic voice despite being directed by his supervisor to stop. She found his conduct to be insubordinate, observing that “An employee is obligated to obey the lawful order of a supervisor and, if he disagrees with it or feels it to be improper, to grieve it at a later time through available procedures.”

Judge Miller also found that employee disobeyed his supervisor’s orders by failing to properly and timely process IT tickets.

The ALJ recommended that the employee be suspended without pay for 20 days.

The decision is posted on the Internet at:’

http://archive.citylaw.org/oath/11_Cases/14-108.pdf

New York State Comptroller Thomas P. DiNapoli issues fiscal stress scores for upstate political subdivisions of the State

New York State Comptroller Thomas P. DiNapoli issues fiscal stress scores for upstate political subdivisions of the State
Monitoring System Has Evaluated Nearly 2,300 Local Governments

On May 2, 2014 New York State Comptroller Thomas P. DiNapoli announced fiscal stress rankings for several upstate cities. With today’s announcement, DiNapoli’s office has completed the initial scoring for all local governments and school districts in New York.

The creation of the ‘early warning’ monitoring system is the centerpiece of the Comptroller’s fiscal stress initiative. The Fiscal Stress Monitoring System is based on financial information provided to DiNapoli’s office by local communities and uses financial indicators that include year-end fund balance, cash position and patterns of operating deficits, to create an overall fiscal stress score. The system uses a 100-point scale to classify whether a municipality is in significant fiscal stress (65-100%), in moderate fiscal stress (55-65%), is susceptible to fiscal stress (45-55%), or no designation (below 45%).

Since implementing the system in 2013, the Comptroller’s staff has evaluated the fiscal condition of nearly 2,300 municipalities and school districts across the state.To date, DiNapoli’s monitoring system has identified a total of 142 municipalities in some level of fiscal stress. This includes 16 counties, 18 towns, five cities, 16 villages and 87 school districts.

The fiscal stress scores for 15 cities and villages with fiscal year ends that range from March 31, 2013 to July 3, 2013 announced on May 2, 2014 includes the cities of Batavia (0%), Buffalo (15.8%), Corning (15.8%), Olean (11.7%), Rochester (20.4%), Syracuse (34.2%) and Watertown (9.6%). These municipalities were each classified in the no designation category.

To search for a specific local government’s fiscal stress scores, visit:
http://wwe1.osc.state.ny.us/localgov/fiscalmonitoring/fsi1a.cfm

For an overview of Comptroller DiNapoli’s Fiscal Monitoring System, visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm
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Employee benefits available to retirees set out in a "memorandum of agreement" to a collective bargaining agreement

Employee benefits available to retirees set out in a "memorandum of agreement" to a collective bargaining agreement
Port Auth. of N.Y. & N.J. v Local Union No. 3, 2014 NY Slip Op 03025, Appellate Division, First Department

A Memorandum of Agreement (MOA) supplementing the collective bargaining agreement between the parties provided that "During the term of the Agreement [June 4, 2002 through June 3, 2006], employees in the covered membership will continue to be eligible to receive employee commutation passes and personal passes as per the current practice."

As to retired negotiating unit employees, the relevant portion of the MOA included the following provision: "Retired employees . . . receive the same allowance to which they would be entitled if their Port Authority service was not interrupted."

An arbitrator ruled that this language in the MOA supported Local Union #3’s contention that the Port Authority may not unilaterally eliminate the "E-ZPass" benefit, i.e., free passage at Port Authority bridges and tunnels, for retirees. 

In addressing the Port Authority's challenge to the arbitration award the Appellate Division said that the arbitrator did not "give a totally irrational construction to the contractual provisions in dispute."

Thus, said the court, the arbitrator’s ruling did not constitute a remaking of the collective bargaining agreement between the parties.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_03025.htm

Employer’s unilateral discontinuing its past practice of paying the full cost of health insurance for its retirees held a violation of §209-a.1(d) of the Taylor Law

Employer’s unilateral discontinuing its past practice of paying the full cost of health insurance for its retirees held a violation of §209-a.1(d) of the Taylor Law

Improper Employer Practice Case No. U-31625 [PERB]

A collective bargaining agreement [CBA] with a term of June 1, 2003 to May 31, 2007, was the last agreement that a former collective bargaining representative negotiated with the Village. Article 15, §4 of that agreement provides that the Village will pay the full cost of health insurance premiums for unit employees hired before December 31,1988, and that employees hired after that date will contribute to the cost of their health insurance premiums if future annual increases exceed a certain amount. Article 15 also authorizes the Village to collect the amount of the employee contribution through payroll deduction. That provision was first included in the 1988-1991 CBA and was continued unchanged in all subsequent agreements, up to and including the 2003-2007 CBA.

Despite the existence and continuation of language set out in the 1988-1991 CBA providing for a contribution to health insurance premiums by post-1988 employees, for seventeen years the Village never sought to require unit employees to pay such contributions. However, on June 1, 2005, the Village began deducting the contractual health insurance contribution from the pay of post-1988 employees.

A contract grievance was filed and the arbitrator, in an award dated June 23, 2006, found that the Village did not violate the CBA when it began collecting the contractual health insurance contribution in 2005.

The first CBA negotiated by a successor collective bargaining representative with the Village had a term of June 1, 2007 to May 31, 2012 and provided for employee contributions for health insurance.   

However, all CBAs up to and including the 2003-2007 agreement were silent with respect to the payment of health insurance benefits to employees during their retirement from the Village and until August 2011, the Village paid the entire cost of health insurance premiums for all unit employees upon and during their retirement. Further, there was testimony in the record in the instant hearing that when the parties were negotiating employee contributions towards health care premiums, they were discussing contributions to be paid by active employees and that as the “offer letter” that resulted in the new CBAs did not contain the word “active,” it was subsequently added “to ensure that the health insurance provision [in the collective bargaining agreement] was not interpreted to apply to retirees.”

The parties stipulated that two post-1988 employees retired in, respectively, April and September, 2004, and that the Village paid the full cost of health insurance for them while they were employed and has continued to do so during their retirement

In August 2011 a unit employee, who had initially commenced his employment with the Village after December 31, 1988, retired. Immediately before his retirement, the employee was contributing towards the  cost of his health insurance premium and the Village was paying the remainder. Upon his retirement, the Village continued to charge the individual a ten percent contribution and to pay the remainder of the cost of his health insurance premium. This individual was the first unit employee who, upon retirement, was required to pay a contribution towards the cost of his health insurance premium.

A Public Employment Relations Board Administrative Law Judge found that the 2007-2012 CBAs, and all prior agreements, “simply does not refer to retirees or what health insurance benefit current employees will receive in retirement.” Further, the ALJ found §4 of Article 15 of the 1988-1991 agreement is appropriately interpreted as silent with respect to the practice here in issue. This finding, said the ALJ, was supported not only by the plain language of that provision but by the fact that "when the parties intended to affect a benefit granted to current employees that continues into retirement, they specifically so state.”

Further, said the ALJ, “the record evidence regarding the negotiations for the 2003-2007 CBA clearly shows that the parties did not negotiate the issue of what current employees would receive in retirement.”

Addressing the employee organization’s alleged past practice claim, the Administrative Law Judge explained that “To establish an enforceable past practice that cannot be unilaterally changed without negotiation, the charging party must demonstrate that the ‘practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected unit employees that the [practice] would continue.’ In addition, the practice must concern a mandatory subject of negotiation.”

As to the argument advanced by the Village that PERB lacked jurisdiction and the employee organization lacked standing to consider the employee organization's allegations because the complaint pertains to retirees, the ALJ said that the charge filed by the employee organization “makes clear that it is not seeking to enforce the rights of already retired persons, but to enforce the practice with respect to current employees who retire in the future.”

The Village also contended that the subject matter in issue is nonmandatorily and not negotiable because it pertains to retirement benefits,* The ALJ pointed out that although PERB has held that a demand for health insurance benefits for former employees who have already retired is nonmandatory, the subject of health insurance benefits for current employees upon their retirement constitutes a form of deferred compensation and is mandatorily negotiable.

The Administrative Law Judge found that an employer’s unilateral change of an enforceable past practice concerning health care benefits for current employees upon their retirement violates §209-a.1(d) of the Taylor Law.The ALJ also found that the record shows that the unit employees were aware of the practice regarding their receipt of fully paid health insurance during retirement and that they expected the practice to continue.

Holding that the Village violated §209-a.1(d) of the Taylor Law, the Administrative Law Judge ordered the Village to:

1. Rescind its directive that unit employees hired after December 31, 1988, will be required to pay a health insurance contribution during retirement; and

2. Not unilaterally change the past practice of paying the full cost of health insurance premiums for current unit employees during retirement; and

3. Make whole any unit employees who retired during or after August 2011 and who have been required to contribute towards the cost of health insurance.

* In Lippman v Sewanhaka Central High School District, 66 NY2d 313, the court held that health insurance was not a retirement benefit within the meaning of Article 5, Section 7, of the State Constitution.
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