The State’s reduction of its employer contribution for health insurance premiums for judges was an unconstitutional diminution of judicial compensation

The State’s reduction of its employer contribution for health insurance premiums for judges was an unconstitutional diminution of judicial compensation
Bransten v State of New York, 2014 NY Slip Op 03214, Appellate Division, First Department

Sitting and retired members of the New York State Judiciary challenged the State’s recent decrease in its employer contribution to the cost of the judges' health insurance premiums, contending that it violated the Compensation Clause of the New York State Constitution which provides "compensation [of a judge] shall be established by law and shall not be diminished during the term of office for which he or she was elected or appointed."*

The Appellate Division agreed, finding that the reduced contribution, which in turn increased the amounts withheld from judicial salaries as employee contribution towards health insurance premiums, constitutes an unconstitutional diminution of judicial compensation.

The court explained that the reduction in the State’s employer contribution for health insurance premiums occurred in 2011 when the State, faced with a serious budget shortfall, threatened to lay off thousands of workers unless employees in State's several collective bargaining units made wage and benefit concessions that included bearing more of the cost of their health insurance premium.

The State Legislature in August 2011 amended Civil Service Law §167.8 to provide that “The president [of the Civil Service Commission], with the approval of the director of the budget, may extend the modified state cost of premium or subscription charges for employees or retirees** not subject to an agreement referenced above and shall promulgate the necessary rules or regulations to implement this provision.”

The President, with the State Budget Director's approval, then adopted a Regulation that reduced the State's contribution for health insurance premiums not only for employees in State’s several negotiating units that had agreed to the reductions through collective bargaining, but also for some “nonunionized employees” and retirees of the State as the employer.

In accordance with these new Regulations, in September 2011 the State notified judges that it would reduce its contribution to sitting judges' health insurance premiums by 6% and reduce its contributions to retired judges' health insurance premiums by 2%.

The State argued that the Compensation Clause does not prohibit the State from decreasing its contributions to the health insurance premiums because any reduction to judicial compensation was "indirect" and nondiscriminatory.

Supreme Court, however, found that the State's reduced contribution amounted to a direct diminution of judicial compensation because it increased the amount withheld from judicial salaries.

On appeal, the State did not contend that reducing its contribution for health insurance premiums did not directly diminish judges' compensation but rather that its contribution to judges' health insurance premiums is not "compensation" within the meaning of the Compensation Clause.

The Appellate Division rejected that argument, explaining “it is settled law that employees' compensation includes all things of value received from their employers, including wages, bonuses, and benefits” and the Appellate Division, Second Department has expressly found that “health insurance benefits are a component of a judge's compensation,” citing Roe v Board of Trustees of the Village of Bellport, 65 AD3d 1211.

In contrast to State employees who either consented to the State's reduced contribution in exchange for immunity from layoffs or were otherwise compensated by the State's promise of job security, the decision points out that judges were forced to make increased contributions to their health care insurance premiums without receiving any benefits in exchange. The Appellate Division noted that the judiciary “had no power to negotiate with the State with respect to the decrease in compensation,” and they “received no benefit from the no-layoffs promise because their terms of office were either statutorily or constitutionally mandated.” 

Thus, said the court, “§167.8 uniquely discriminates against judges because it imposes a financial burden on them for which they received no compensatory benefit.”***

Accordingly, said the Appellate Division, the State’s motion to dismiss was properly denied by Supreme Court.

* New York State Constitution, Article VI, §25[a]. 

** With respect to retirees, prior to the 2011 amendment to Civil Service Law §167.8 it provided that employer contribution for health insurance premiums may be increased pursuant to the terms of a collective bargaining agreement but that such increase “shall not be applied during retirement.”

*** Much the same argument would apply to retirees of the State as the employer, including retired judges,  who retired prior to the effective date of the President’s Regulation as such retirees are not employees within the meaning of the Taylor Law nor did they receive any benefit with respect to job security as, like sitting judges, retirees cannot be “laid off.”

The Appellate Division's decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2014/2014_03214.htm

The Supreme Court's decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_23175.htm
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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