Retirees found to have a vested contract right to health insurance in retirement

Former firefighters and the spouses of deceased former firefighters  who retired from their employment with City of Albany [City] before October 20, 2015, [Plaintiffs], were advised that effective January 1, 2016, there would be changes to the health insurance plan and Plaintiffs would be required to pay annual $250 deductibles for insured individuals and $500 deductibles for insured families.

The Union filed a grievance on behalf of its members with respect this change's affecting active union members upon their eventual retirement and submitted the matter to  arbitration. The Union contended that the City's unilateral change to retirees' health insurance violated the terms of §27.1 of the relevant collective bargaining agreements [CBA]. 

An arbitrator found that the City's failure to negotiate the new deductibles violated the CBA and a second arbitrator subsequently found that, by imposing deductibles, the City was no longer providing substantially equivalent coverage. The second arbitration award required the City to reimburse deductibles paid by all retirees who retired on or after October 20, 2015. Both arbitration awards were confirmed.

Plaintiffs in this action, however, were not included in the arbitration award because they or their deceased spouses had retired prior to October 20, 2015, the effective date of the award. Plaintiffs commenced the instant action against the City alleging a breach of contract and requested a declaratory judgment. Plaintiffs also sought reimbursement for their past and continuing payment of the deductibles. Plaintiffs moved for summary judgment while the City cross-moved for summary judgment dismissing the complaint.

Supreme Court found that Plaintiffs had a vested contract right under the CBA and that collateral estoppel precluded the City from relitigating the issue of whether §27.1 of the CBA was violated. Accordingly, the court granted Plaintiffs' motion for summary judgment and denied the City's cross-motion. The City appealed.

The Appellate Division affirmed the Supreme Court's ruling explaining:

1. Plaintiffs' right to health insurance without deductibles was a form of deferred compensation earned during their employment, to which they had a vested right as §27.1  of the CBA was "neither expressly limited to active union members ... nor does it clearly include retired former union members."

2. Given this ambiguity, the court may look to past practice to give meaning to the contract; and

3. While it is true that past practice "is merely an interpretive tool and cannot be used to create a contractual right independent of some express source in the underlying agreement" there is an express source for Plaintiffs' claimed contractual right here, namely §27.1 of the CBA and its reference to the "existing health insurance plan."

Citing Holloway v City of Albany, 169 AD3d 1133, the Appellate Division noted the record revealed "that it was the longstanding practice of the City not to charge deductibles as part of the health insurance plan for retirees."

Indeed, said the Appellate Division, an affidavit submitted to Supreme Court by one of the Plaintiffs, a former Union president, reflected that no deductible had been charged to retirees for at least 20 years before his retirement in 2010, and the lack of a deductible was an important factor in his decision to opt into the City's health insurance plan when he retired. Additionally, opined the court, there is "no meaningful distinction between Holloway and the instant case".

Acknowledging what it characterized as "the well-established principle that 'the continuation of health insurance payments to current employees after their retirement ... constitute a form of compensation earned by the employee while employed'", the Appellate Division concluded that Supreme Court "correctly determined that plaintiffs have a vested contractual right under section 27.1."

Addressing the City's argument that the Doctrine of Collateral Estoppel did not bar them from litigating the issue of whether they were required to negotiate the imposition of deductibles for retirees with the Union in the instant matter, the Appellate Division said it agreed with Supreme Court that the issue of whether the City violated §27.1 of the CBA by unilaterally imposing deductibles upon retirees was already determined in arbitration, "where the City had a full and fair opportunity to argue its position." Citing Simmons v Trans Express Inc., 37 NY3d 107, the Appellate Division observed that notwithstanding the fact that Plaintiffs, as retirees, were not involved in the two underlying arbitrations, "the identity of parties is not an element of this doctrine".

Click HERE to access the Appellate Division's decision posted on the Internet.

 

Challenging a federal district court's granting the moving party's motion seeking summary judgment

Plaintiff alleged the Defendant unlawfully terminated him and discriminated against him on the basis of his religion. Following the federal District Court's denying Plaintiff's motion to compel discovery and granting the Defendant's motion for summary judgment, Plaintiff appealed both of the District Court's rulings. 

With respect to Plaintiff's motion to compel discovery alleging the federal District Court had abused its discretion, the Circuit Court of Appeals noted that Plaintiff's counsel failed to comply with the District Court’s scheduling orders and discovery deadlines and offered no compelling justifications for her admitted failure to do so.

Accordingly, said the Circuit Court of Appeals, the District Court acted well within its discretion when it denied Plaintiff’s motion to compel discovery and affirmed the District Court’s denial of that motion.

Turning to Plaintiff's appeal with respect to the District Court's granting the Defendant's  motion for summary judgment, the Circuit Court of Appeals explained that it reviewed the grant of summary judgment to Defendant de novo, drawing all inferences in favor of the nonmoving party, citing El Sayed v. Hilton Hotels Corp., 627 F.3d 931. 

Based on its de novo review of BOCES motion, the Circuit Court concluded that the District Court "properly granted summary judgment to Defendants" with respect to all of Plaintiff's claims. The Circuit Court opined that Plaintiff failed to point to “sufficient evidence" that would allow “a jury to return a verdict” for Plaintiff on any of Plaintiff's claims and affirmed the District Court’s granting summary judgment to Defendant. 

Click HERE to access the Circuit Court of Appeals' ruling.

The Doctrine of Legislative Equivalency

The Doctrine of Legislative Equivalency, applied by the Court of Appeals in deciding the Torre case [Torre v County of Nassau, 86 NY2d 421] sets out the principle that a position created by a legislative act can be abolished only by a correlative legislative act. 

 

Judicial review of a petition seeking the vacating of an arbitration award

The Long Beach Professional Fire Fighters Association [Union] and the City of Long Beach [City] entered into a collective bargaining agreement [CBA] covering the period from July 1, 2004, through June 30, 2010, and thereafter continued pursuant to the Triborough Law, Civil Service Law § 209-a[1][e].* Firefighters and any municipal employees assigned to the fire department were covered by the CBA.

City appointed several paramedics, and unilaterally set their terms of employment. Union filed a grievance and, when the grievance was denied, filed a demand for arbitration. City's efforts to stay the arbitration with respect to Union's grievance as related to the paramedics were unsuccessful.**  

Ultimately the arbitrator issued an award determining that City violated certain provisions of the CBA when it set contrary terms and conditions of the paramedics' employment. Union commenced this proceeding pursuant to CPLR Article 75 to confirm the arbitration award while City cross-moved pursuant to CPLR 7502(a)(iii) to dismiss the petition or, in the alternative, to reassign the petition to the Justice who presided over the prior proceeding, and to vacate the arbitration award. 

Supreme Court granted the Union's petition to confirm the award and denied the City's cross-motion. The City appealed.

The Appellate Division, noting that "Judicial review of arbitration awards is extremely limited", said a court may vacate an arbitrator's award that "violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power, citing (Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, and other decisions. Additionally, the Appellate Division opined "an award may be vacated where 'it exhibits a 'manifest disregard of law'" and the burden is on the movant to establish grounds for vacatur by clear and convincing evidence.

Finding that the City failed to demonstrate by clear and convincing evidence that the arbitration award should be vacated on the grounds that [1] it was irrational; [2]  exhibited a manifest disregard of the law; [3] that the arbitrator had engaged in misconduct or [4] that the award violated public policy, held that Supreme Court had properly granted Union's petition to confirm the arbitration award and had properly denied the City's cross-motion to vacate the award.

* See Matter of Professional Staff Congress-City Univ. of N.Y. v New York State Pub. Empl. Relations Bd., 7 NY3d 458).

** See Matter of City of Long Beach v Long Beach Professional Fire Fighters Assn., Local 287, 161 AD3d 855.

Click HERE to access the Appellate Division's decision posted on the Internet.

Public Personnel Law Handbooks - New York State and its political subdivisions

The New York Public Personnel Law handbooks listed below are available for purchase from BookLocker.com, Inc.

The Discipline Book - A concise guide to disciplinary actions involving public officers and employees in New York State set out as an e-book. For more about this electronic handbook, click HERE. 

A Reasonable Disciplinary Penalty Under the Circumstances- The text of this electronic handbook focuses on determining an appropriate disciplinary penalty to be imposed on an employee in the public service in instances where the employee has been found guilty of misconduct or incompetence. For more information click HERE. 

Disability Benefits: payable to firefighters, police officers and other public sector personnel - an e-book focusing on retirement for disability under the NYS Employees' Retirement System, the NYS Teachers' Retirement System, General Municipal Law Sections 207-a/207-c and similar statutes providing benefits to employees injured both "on-the-job" and "off-the-job." For more information about this e-book click HERE. 

The Layoff, Preferred List and Reinstatement Manual -This e-book reviews the relevant laws, rules and regulations, and selected court and administrative decisions. Click HERE for more information.