In the Matter of the Arbitration between the City of Oswego, Appellant, -and- Oswego City Firefighters Association, Local 2707, Respondent.

Brief

N.Y.February 13, 2013

To be argued by Earl T. Redding Time Requested: 30 minutes STATE OF NEW YORK COURT OF APPEALS ____________ In the Matter of the Application of the CITY OF OSWEGO, Petitioner-Appellant, To Vacate an Arbitrator’s Award Pursuant to Article 75 of the Civil Practice Law and Rules -against- OSWEGO CITY FIREFIGHTERS ASSOCIATION, LOCAL 2707, Respondent-Respondent. _______________ Appellate Division Docket Number: 11-01941 Oswego County Index Number: 11-351 BRIEF OF PETITIONER-APPELLANT ROEMER WALLENS GOLD & MINEAUX LLP Attorneys for Petitioner-Appellant Earl T. Redding, Esq. 13 Columbia Circle Albany, NY 12203 Telephone: (518) 464-1300 SATTER & ANDREWS, LLP Attorneys for Respondent-Respondent Mimi C. Satter, Esq. 217 S. Salina Street, 6th Floor Syracuse, New York 13202 Tel. No.: (315) 471-0405 i TABLE OF CONTENTS Page No. PRELIMINARY STATEMENT...................................................................1 JURISDICTION ...........................................................................................2 QUESTIONS PRESENTED.........................................................................3 STATEMENT OF MATERIAL FACTS ......................................................4 DISCUSSION.............................................................................................10 POINT I THE PARTIES COLLECTIVE BARGAINING AGREEMENT EXPIRED ON DECEMBER 31, 2009 AND WAS THEREFORE, NOT “IN EFFECT” FOR PURPOSES OF DETERMINING WHETHER AN INDIVIDUAL HIRED ON OR AFTER JANUARY 9, 2010 WAS REQUIRED TO CONTRIBUTE THREE PERCENT TO THEIR RETIREMENT PURSUANT TO CHAPTER 504 OF THE LAWS OF 2009.......................................................................................................10 POINT II AS THE CBA WAS NO LONGER “IN EFFECT” AT THE TIME TIER V BECAME EFFECTIVE, THE ARBITRATOR’S AWARD VIOLATES PUBLIC POLICY BECAUSE IT IS BARRED BY LAW......................................................................................................22 CONCLUSION ..........................................................................................32 ii TABLE OF AUTHORITIES CASE LAW Page No. Association of Surrogates and Supreme Court Reporters Within the City of New York v. State, 79 N.Y.2d 39 (1992) ................................16, 17, 18 Cohoes Police Officers Union v. City of Cohoes, 263 A.D.2d 652 (3d Dep’t 1999) .......................................................................................23 Conrad v. Regan, 155 A.D.2d 931 (4th Dept. 1989) .......................................................................................30 Dutchess Co. Dep’t. of Soc. Serv. v. Day, 96 N.Y.2d 149 (2001) ........................................................................................................19 Erie Co. Water Auth. v. Kramer, 4 A.D.2d 545 (4th Dept. 1957) aff’d 5 N.Y.2d 954 (1959)..................................................................................................20 Local 2841, et al. v. City of Albany, 53 A.D.3d 974 (3rd Dept. 2008) ........................................................................................23 Matter of Bd. of Educ. v. PERB; 75 N.Y.2d 660 (1990) ..................................................................................................27, 28 Matter of City of Buffalo v. Buffalo Police Benev. Assoc., 13 A.D.3d 1202 (4th Dept. 2004) .................................................................................23, 24 Matter of City of Utica v. Zumpano, 91 N.Y.2d 964 (1998) ........................................................................................................15 Matter of City of Yonkers v. Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 90 A.D.3d 1043 (2d Dept. 2011) lv. to appeal granted 2012, N.Y. Slip. Op. 71940 (May 3, 2012) .............21, 22, 26, 27, 28 Matter of Civil Serv. Employees’ Assoc., Inc. Niagara Chapter & Town of Niagara, 14 PERB ¶ 3049 (1981) ...............................................................................................26, 27 Matter of Goodman (Barnard College), 95 N.Y.2d 15......................................................................................................................16 Matter of Lewandowski v. NYSPFRS, 69 A.D.3d 1027 (3d Dept. 2010) .......................................................................................30 Matter of Niagara County v. Power Authority of State of New York; 82 A.D.3d 1597 (4th Dept. 2011) iii lv to appl. denied 2011 N.Y. LEXIS 2138 (2011) .............................................................20 Matter of Poughkeepsie Prof. Firefighters’ Assoc. v. PERB, 6 N.Y.3d 514 (2006) ..........................................................................................................28 Matter of Professional Staff Congress-CUNY v. PERB, 7 N.Y.3d 458 (2006) ..........................................................................................................16 Muschany v. U.S., 324 U.S. 49 (1945).............................................................................................................23 New York State Corr. Officers and Police Benevl. Assoc. Inc. v. State of New York, 94 N.Y.2d 321 (1999) .......................................................................................................23 People v. Mitchell, 15 N.Y.3d 93 (2010) ..........................................................................................................20 Triborough Bridge & Tunnel Auth., 5 PERB ¶ 3037 (1972) ...................................................................................................7, 16 STATUTES Page No. Civil Service Law § 201……………………………………………………4, 24, 25, 26, 27 Civil Service Law § 209-a……………………………………………,,,7, 15, 16, 17, 18, 19 Civil Service Law Art. 14………………………………………………………………….4 CPLR § 5602………………………………………………………………………………2 CPLR § 7511………………………………………………………………….2, 3, 9, 30, 32 RSSL § 11…………………………………………………………………………………30 RSSL § 384-d………………………………………………………………………...4, 5, 30 RSSL § 470………………………………………………………………………..23, 28, 29 RSSL Art. 8……………………………………………………………………………….12 RSSL Art. 22……………………………………………………………………9, 11, 20, 21 RSSL § 1200………………………………………………………………………………11 RSSL § 1204………………………………………………………………………….12, 30 iv LEGISLATION Page No. Chapter 504 of the Laws of 2009………………1, 3, 5, 8, 10, 11, 12, 13, 17, 18, 19, 30, 32 S66026-2009, Statement in Support (December 2, 2009)…………………………….11, 17 GOVERNOR VETOES Page No. Veto Message No. 5 of 2009 (Gov. Paterson June 2, 2009)…………………………….5, 9 COMPTROLLER OPINIONS Op. State Comp. 2000-14 (2000)………………………………………………………….29 1 PRELIMINARY STATEMENT On March 16, 2012, the Appellate Division, Fourth Department determined that an expired collective bargaining agreement between Petitioner-Appellant the City of Oswego (the “City”) and Respondent Oswego City Firefighters Association, Local 2707 (the “Respondent”) was still “in effect” for purposes of determining whether firefighters hired on or after January 9, 2010, were required to contribute three percent (3%) of their salary towards their retirement as required by the laws enacting the new Tier V in the New York State Retirement System. The financial impact of this decision upon the City is profound. Despite Legislative attempts to control spiraling pension costs through the enactment of Tier V, the Appellate Division decided that the public employment sector “Triborough Doctrine” continues the terms of an expired collective bargaining agreement, which states that Respondent’s new members do not have to contribute to their retirement. Through the Triborough Doctrine, it is argued that the terms of an expired collective bargaining agreement continue in perpetuity or until a new agreement is negotiated. However, the Legislature sought to limit the Triborough Doctrine’s application through Part A, Section 8 of Chapter 504 of the Laws of 2009. Part A, Section 8 presides over and preempts the 2 Triborough Doctrine. Only collective bargaining agreements unexpired on January 9, 2010 are excepted from Tier V. To address the future financial impact, the City submits this brief pursuant to the Court’s scheduling order issued after the Court granted the City’s motion seeking leave to appeal. For the reasons set forth herein, it is respectfully submitted that the Appellate Division’s Memorandum and Order should be reversed and the City’s petition to vacate an arbitration award pursuant to Civil Practice Law and Rules § 7511 be granted in its entirety. JURISDICTION This Court properly has jurisdiction of this matter pursuant to CPLR § 5602. On March 3, 2011, the City applied to the Supreme Court, Oswego County, pursuant to Section 7511(b)(1)(iii) of the Civil Practice Law and Rules, for an order seeking to vacate an arbitration award. By Order dated May 2, 2011, the Honorable Norman W. Seiter denied the City’s application and confirmed the award in favor of the Respondent. On May 10, 2011, the City appealed. By Memorandum and Order decided and entered on March 16, 2012, the Appellate Division, Fourth Department affirmed the lower court’s Order. By letter sent via regular mail and dated May 8, 2012, Respondent served the Appellate Division’s Memorandum and Order upon 3 the City. The City moved this Court for leave to appeal on May 25, 2012. By Decision and Order dated August 30, 2012, this Court granted that motion. This brief is now submitted in accordance with the Court’s scheduling order. QUESTIONS PRESENTED 1. Is the Collective Bargaining Agreement between the City and Respondent “in effect” for purposes of determining whether firefighters hired on or after January 9, 2010, are required to contribute towards their retirement under Article 22 of the Retirement and Social Security Law? No. The Fourth Department erred in holding that an expired collective bargaining agreement was still “in effect”. 2. Does Chapter 504 of the Laws of 2009, Part A, Section 8, repeal Civil Service Law § 209-a? Yes. Part A, Section 8, is a specific statute, which presides over and supersedes any contrary law, including a general statute such as Civil Service Law § 209-a. 3. Should the arbitration award be vacated pursuant to CPLR § 7511 because it violates the strong public policy prohibiting collective bargaining of public retirement system benefits. 4 Yes. The arbitration award should be vacated because public policy as embodied in Retirement and Social Security Law § 470 and Civil Service Law § 201(4) prohibits the bargaining of retirement system benefits. STATEMENT OF MATERIAL FACTS The City is a public employer within the meaning of Article 14 of the New York State Civil Service Law (the “Taylor Law”). (Record on Appeal page 20 (Citations to the Record on Appeal are hereinafter referred to in parentheses as “R. __,” followed by the appropriate page number(s))). The Union represents all firefighters employed by the City, exclusive of the Chief. (R. 33). The City and the Union are parties to a collective bargaining agreement (“CBA”), which terminated on December 31, 2009. (R. 47). Att issue in this case is Article 26 of the CBA, which is entitled “New York State Retirement” and states in relevant part as follows: 26.1 The City will pay an Employee’s cost in the New York State Police and Fireman’s Retirement System under the current and existing plans of which they are a member. Effective January 1, 1995 the City agrees to add Plan 384-d (20 year) to the current plans available to Employees in the unit. (R. 45). Consistent with Section 26.1, firefighters electing to join the Section 384-d (20 year) plan did not contribute to their retirement because the City 5 agreed to pay the individual’s contribution. (R. 21). Section 384-d is a statute found within Article 8 of the Retirement and Social Security Law of New York (“RSSL”) and is titled “Optional twenty year retirement plan for certain firemen and policemen whose employer elects to provide same.” (RSSL § 384-d). (R. 74-81). If the employer opted to offer it, RSSL § 384- d provides an optional retirement plan for firefighters to, inter alia, opt into a retirement plan that provides a full pension upon completion of 20 years of service. (R. 24). RSSL § 384-d allowed a public sector employer and a union to negotiate that the public employer would pay the employee’s contribution of such plan. (R. 24). However, this benefit no longer exists because on June 2, 2009, former Governor Paterson issued Veto No. 5 of 2009 and therein refused to extend the benefits of RSSL § 384-d. Veto Message No. 5 of 2009 (Governor Paterson June 2, 2009). At the time the parties’ CBA became effective on January 1, 2007, the Retirement System and its division covering police and fire service members, the New York State Police and Fire Retirement System (“NYSPFRS”), contained four (4) tiers of retirement. Pursuant to Chapter 504 of the Laws of 2009, the State Legislature created Tier V. (R. 21). This new tier required, inter alia, that police officers and firefighters enrolling in the NYSPFRS on or after January 9, 2010, even those included in Plan 384- 6 d, must contribute three percent (3%) of their salary towards their retirement benefit. (R. 21). By letter dated January 12, 2010, the Retirement System advised public employers, including the City, of the affect of the new law on the benefits of new members joining the NYSPFRS on or after January 9, 2010. (R. 49). The letter states: Some of these new Tier 5 members will contribute 3 percent of their salary; however members in union-negotiated special plans may not. Please provide us with copies of any collective bargaining agreements covering your PFRS employees that are in effect on January 9, 2010. We have also revised our Police and Fire Membership Application (PF 5022) to help identify those members who will not make contributions. The revised application has a new section for collective bargaining agreements. You will be required to tell us if the member is covered by an existing unexpired collective bargaining agreement that requires you to offer a special 20- or 25-year plan and if so, the effective date and termination of the agreement. (R. 49 (original emphasis in bold)). By letter dated January 19, 2010, the City responded to the Retirement System. (R. 52). The City provided the Retirement System with the parties’ CBA (R. 31-47) and advised that the CBA expired on December 31, 2009. (R. 52). 7 On or after January 19, 2010, the City hired Donald Rockwood and five other individuals as professional firefighters. (R. 22). Each of these six firefighters became members of the bargaining unit represented by the Union. (R. 22). By letter dated March 2, 2010, the Retirement System provided the City with advice on whether or not these new firefighters are required to contribute to their retirement. (R. 54). The Retirement System specifically stated: Based on our review of the contract you provided for the City of Oswego Firefighters Association, firefighters hired by the City of Oswego on or after January 9, 2010, will be contributory, since your last contract expired on December 31, 2009. (R. 54 (emphasis added)). In accordance with this advice, the City deducted 3% from firefighter Rockwood’s wages for contribution to the Retirement System. (R. 22). The Union objected to this action by the City and filed a grievance on or about January 28, 2010 alleging that the City violated Section 26.1 of the CBA (the “Grievance”). (R. 23 & 56-57). The Union’s position is that, although expired, the terms of the CBA are still “in effect” pursuant to the Triborough Doctrine enunciated in Triborough Bridge & Tunnel Auth., 5 PERB ¶ 3037 (1972) and codified thereafter in Civil Service Law § 209- a(1)(e). The City, however, denied the Grievance. (R. 23). 8 The matter proceeded to arbitration. (R. 23). By his Opinion and Award dated December 6, 2010 (the “Award”), Arbitrator Ronald E. Kowalski, Ph.D. (the “Arbitrator”) decided that [t]he City did not violate Article 26.1 of the Collective Bargaining Agreement when it refused to pay the employee’s cost of the New York State Police and Fireman’s Retirement System, Tier 5, for employees hired after January 1, 2010. However, such employees are eligible under the provisions of Article 26.1 and the Law to elect the alternative 20-year plan set forth in the Article with the City paying for any contribution as negotiated under the provisions and as currently provided and paid for other members of the Bargaining Unit. (R. 106). Upon receiving the Award, on December 14, 2010, the City wrote a formal letter of inquiry to the Retirement System requesting its opinion as to whether firefighters hired after January 9, 2010 must contribute to the Retirement System. (R. 108). By letter dated January 25, 2011, the Retirement System’s Acting Director of Retirement Operations, Melanie Whinnery, responded that Police and Fire Retirement System members who have a date of membership on or after January 9, 2010 are subject to the provisions of Chapter 504 of the Laws of 2009 and are considered Tier V members. There is no statutory authorization for any new members to be placed in any other Tier. Chapter 504 requires PFRS members who join or 9 after January 9, 2010 to contribute 3 percent of annual wages to the Retirement System (section 1204 of Article 22 of the RSSL). However, if a collective bargaining agreement was in effect on January 9, 2010 and is still in effect at the time new members join the Retirement System and the agreement requires the employer to provide a special, non-contributory retirement plan, which the new member elects, the member will not be required to contribute to the special plan. The contract must have been in effect on both January 9, 2010 and the date the special plan election is filed. (R. 111). She then stated that “[a] ‘no-cost’ benefit no longer exists for persons hired on or after January 9, 2010 as RSSL §1204 requires the member to contribute three percent of annual wages to the PFRS, unless they fall under the exception noted in paragraph two, page one.” (R. 111-12 (emphasis added)). Ms. Whinnery’s statement is consistent with the former Governor’s Veto Message number 5. The City subsequently moved to vacate the Award pursuant to CPLR § 7511(b)(1)(iii). (R. 18). By Order dated May 2, 2011, the Hon. Norman W. Seiter, without opinion, denied the application to vacate the Award and further granted the Union’s request to confirm. (R. 16). The City appealed. (R. 13). The Fourth Department affirmed, holding that [b]ecause a new agreement between the City and the union had not yet been negotiated at the time 10 the subject firefighters joined the PFRS, all of the terms of the expired agreement were still in effect. (R. 6). The Appellate Division further determined that the application of the exception embodied in Part A, Section 8 did not constitute a “negotiation” of retirement benefits as prohibited by law and public policy. (R. 7). It also refused to accept the expert advice and opinions of the Retirement System, stating that “there is little basis to rely upon the special competence or expertise” of the retirement system. (R. 7). Accordingly, the City moved for permission to appeal, which was granted by Decision and Order of this Court on August 30, 2012. DISCUSSION POINT I THE PARTIES’ COLLECTIVE BARGAINING AGREEMENT EXPIRED ON DECEMBER 31, 2009 AND WAS THEREFORE, NOT “IN EFFECT” FOR PURPOSES OF DETERMINING WHETHER AN INDIVIDUAL HIRED ON OR AFTER JANUARY 9, 2010 WAS REQUIRED TO CONTRIBUTE THREE PERCENT TO THEIR RETIREMENT PURSUANT TO CHAPTER 504 OF THE LAWS OF 2009. The State Legislature responded to the spiraling costs of public pensions by enacting Tier V to the retirement system. The Governor also responded by refusing to continue the practice embodied in Article 8 of the 11 RSSL of allowing police and firefighters to join non-contributory retirement plans. The legislative history of Tier V describes the need for action as follows: [t]he State presently faces a fiscal crisis unprecedented in its history. To address this crisis, it is essential that the State control its long term cost drivers, including pension benefits provided to new employees. This bill would continue to provide employees with a generous pension package, while effectuating significant savings by extending the vesting period, requiring lifetime contributions, limiting overtime and enacting other reforms for most new State employees. The state and local governments have little flexibility when trying to reduce their overall pension obligation. The cost of these benefits poses a growing burden on local governments, who are forced to reduce or limit other services or increase property taxes to meet these obligations. This bill would create a new tier of pension benefits (Tier 5) for most newly hired State and local government employees, which would remove pension enhancements added in recent years to Tier[s] that have led to exorbitant pension costs for public employers. . . . This bill would help mitigate the impact of future increases in employer contribution rates and, because the proposed reforms would apply only to new employees, it fully complies with the New York State Constitution. S66026-2009, Statement in Support (December 2, 2009). In December 2009, Chapter 504 of the Laws of 2009 added Article 22 to the RSSL, creating Tier V for members joining the NYSPFRS on or after January 9, 2010. Tier V requires all members (as defined by RSSL § 1200) to 12 contribute 3% of their annual wages towards their pensions. The Tier V contribution extends for the length of the individual’s membership in the NYSPFRS or until such time as they may no longer accumulate service credit (as defined by RSSL § 1204). In connection with Tier V, new retirement system members were no longer eligible for the non-contributory benefits of Article 8 of the RSSL. On January 19, 2010, the City hired a new firefighter. (R. 22). This individual was enrolled by the NYSPFRS in Tier V and required to contribute 3% to his retirement. (R. 22). Respondent objected, arguing that Article 26.1 of the CBA required the City to cover the new member’s contribution. (R. 23). The Arbitrator agreed. (R. 106). The City sought to vacate the Award in the Supreme and Appellate Division courts. (R. 18 & 13). Specifically, the Appellate Division decided, inter alia, that the City was required to cover the member’s contribution because the CBA was still “in effect” under the Triborough Doctrine. (R. 6). The Appellate Division held that the exception to Tier V, set forth in Part A, Section 8 of Chapter 504 of the Laws of 2009 applies. (R. 6). The exception allows members to join a special retirement plan to circumvent the required 3% contribution. See, Chapter 504, Part A, Section 8 of the Laws of 2009. Part A, Section 8 provides as follows: 13 [n]otwithstanding any provision of law to the contrary, nothing in this act shall limit the eligibility of any member of an employee organization to join a special retirement plan open to him or her pursuant to a collectively negotiated agreement with any state or local government employer, where such agreement is in effect on the effective date of this act and so long as such agreement remains in effect thereafter; provided, however that any such eligibility shall not apply upon termination of such agreement for employees otherwise subject to the provisions of article twenty-two of the retirement and social security law. Chapter 504, Part A, Section 8 of the Laws of 2009 (emphasis added). There are several important parts of this Section: first, it begins with “notwithstanding any law to the contrary”; second, it applies only to collective bargaining agreements actually in effect; and third, it does not apply when the agreement has terminated or otherwise expired. Id. In laymen’s terms, this Section provides that if a collective bargaining agreement expired before the effective date of Chapter 504 of the Laws of 2009 (January 9, 2010), then any employees hired post-January 8, 2010 and enrolled in the NYSPFRS would be placed in Tier V and would be required to contribute 3% towards their retirement. For example, this Section provides that if an employer’s collective bargaining agreement with a firefighter’s union is to expire on December 31, 2011 and it offers non- contributory benefit plans, then any post January 8, 2010 new hires enrolled 14 in the NYSPFRS would be entitled to the non-contributory benefit plan. However, this Section provides that if this same collective bargaining agreement expired on December 31, 2008 and a successor agreement had not yet been executed or awarded, then any new post-January 8, 2010 hires enrolled in the NYSPFRS would be placed in Tier V and would be required to contribute 3% towards their retirement. Here, the CBA between the City and the Union expired on December 31, 2009. (R. 47). The Retirement System opined on March 2, 2010 that “[b]ased on our review of the contract . . . firefighters hired by the City . . . on or after January 9, 2010, will be contributory, since your last contract expired on December 31, 2009.” (R. 54). On January 25, 2011, the Retirement System further opined that new members enrolled in the NYSPFRS on or after January 9, 2010 whose collective bargaining agreement were no longer in effect on January 9, 2010, were required to contribute to their retirement plan. (R. 111). The Retirement System further determined and declared that [t]he collective bargaining agreements between the City . . . and . . . the City of Oswego Firefighters Association . . . all expired on December 31, 2009. Inasmuch as all collective bargaining agreements terminated on December 31, 2009 and, therefore, were not in effect on January 9, 2010, we have advised the City that persons employed after that 15 date must contribute three percent of annual wages to the PFRS. (R. 111). The Fourth Department rejected the Retirement System’s determination. (R. 7). Notwithstanding that the parties’ agreement had expired, the Court found that the parties’ agreement was still “in effect”. (R. 6). The Court relied upon the Triborough Doctrine, which says that the terms of an expired collective bargaining agreement are to remain in effect until a subsequent agreement is agreed to. (R. 6). The Triborough Doctrine is codified in Section 209-a of the Civil Service Law, which is entitled “Improper employer practices; improper employee organization practices; application.” Civil Service Law § 209-a. Section 209-a(1)(e) specifically states that [i]t shall be an improper practice, for a public employer or its agents deliberately . . . (e) to refuse to continue all the terms of an expired agreement until a new agreement is negotiated, unless the employment organization which is party to such agreement has, during such negotiations or prior to such resolution of such negotiations, engaged in conduct violative of subdivision one of section two hundred ten of this article. Civil Service Law § 209-a(1)(e). By its terms, § 209-a(1)(e) is a general law. Matter of City of Utica v. Zumpano, 91 N.Y.2d 964, 965 (1998). Essentially, it is an improper practice to refuse to continue the terms of an 16 expired collective bargaining agreement until a new agreement is negotiated. Id. Notably, here, Respondent is not contending that the City committed an improper practice. Instead, Respondent argues that the Triborough Doctrine applies and the City is obligated to follow it, regardless of the Legislature’s intent. Civil Service Law § 209-a(1)(e) is commonly referred to as the Triborough Doctrine because it was first enunciated in the 1972 Public Employment Relations Board decision of Triborough Bridge & Tunnel Auth. 5 PERB ¶ 3037 (1972). The purpose of the Triborough Doctrine is “‘preserve the status quo in situations where a collective bargaining agreement between a public employer and its employees has expired and a new one has yet to be agreed upon.’” Matter of Professional Staff Congress- CUNY v. PERB, 7 N.Y.3d 458, 467 (2006) quoting Matter of Goodman (Barnard College), 95 N.Y.2d 15, 22 (2000). The Appellate Division held that the City was required to continue Article 26.1 of the CBA because “all of the terms of the expired agreement were still in effect”. (R. 6). The Appellate Division relied upon Association of Surrogates and Supreme Court Reporters within the City of New York v. State (“Association of Surrogates”) to support its holding. 79 N.Y.2d 39 (1992). Association of Surrogates is distinguishable from the instant matter in two 17 respects. First, it involved the impairment of a state contract. Id. at 43-44. Second, the affected employees were current employees at the time the impairment legislation was enacted. Id. In the instant matter, Chapter 504 of the Laws of 2009 applies to new hires. It does not apply to employees hired on or before January 8, 2010. If it did, this Court’s holding in Association of Surrogates might very well apply. However, the legislative history of the Tier V legislation specifically states that [t]his bill would help mitigate the impact of future increases in employer contribution rates and, because the proper reforms would apply only to new employees, it fully complies with the New York State Constitution. S66026-2009, Statement in Support (December 2, 2009) (emphasis added). Admittedly, employees hired on or after January 9, 2010 become members of the Union and, upon employment, covered by the CBA. However, at the time they begin their public employment, they are also covered by Chapter 504 of the Laws of 2009. Thus, these new employees are required to contribute 3% of annual wages to their retirement. The “notwithstanding any provision of law to the contrary” language of Chapter 504 preempts the Triborough Doctrine and its subsequent statutory codification in Civil Service Law § 209-a(1)(e). For new employees, the Triborough Doctrine cannot be used as a source for requiring 18 municipalities to contribute 3% toward the new employees’ retirement. Stated another way, new employees have no expectation that the City would contribute the 3% towards their retirement as the law specifically forbids provisions, such as Article 26.1, of expired agreements from binding municipalities in perpetuity. Absent this language, there would be no need for the Union to bargain for a successive agreement. At the time of the enactment of Chapter 504 of the Laws of 2009, the Legislature clearly intended for new hires on or after January 9, 2010 to contribute toward their retirement and that Civil Service Law § 209-a(1)(e), or any other law, could not be a source for provisions to the contrary in expired agreements to remain. In Association of Surrogates, the Court construed the Triborough Doctrine as promoting employer-employee harmony and uninterrupted public sector service through the avoidance of destructive self-help remedies. 79 N.Y.2d at 45. The Court recognized that the Triborough Doctrine could be repealed if it did not impair employees’ contract rights. Id. In enacting Tier V, the Legislature sought to avoid a contract impairment argument by applying Tier V to only new hires by public employers whose collective bargaining agreements had terminated. Indeed, under the Triborough Doctrine, public sector collective bargaining agreements do not 19 terminate, but instead expire. Rarely is there a collective bargaining agreement where all of its terms sunset. Requiring new City employees to contribute to their retirement during a financial crisis is not a destructive self-help remedy. Tier V was enacted to reduce spiraling pension costs. If there is any confusion as to whether, despite the expiration of the parties’ agreement, its terms continue, and thus new hires may not have to contribute to retirement, is cleared up by the first sentence of Part A, Section 8, which states “[n]otwithstanding any provision of law to the contrary”. This phrase dictates that Part A, Section 8 presides over and supersedes any law to the contrary. The law is clear that a prior general statute yields to a later specific or special statute. Dutchess Co. Dep’t. of Soc. Serv. v. Day, 96 N.Y.2d 149, 153 (2001). Section 209-a(1)(e) has existed since 1982. It is a general statute declaring that it shall be an improper practice for an employer to fail to continue the “terms” of an expired agreement until a new agreement is reached. Civil Service Law § 209-a(1)(e). In contrast, Part A, Section 208 of Chapter 504 of the Laws of 2009 is a specific and special newly enacted statute declaring that a member of an employee organization can only join a special retirement plan open to him or her when the negotiated agreement is in effect on January 9, 2010 and remains in effect 20 thereafter. Chapter 504, Part A, Section 8 of the Laws of 2009. The Appellate Division, Fourth Department’s recent holding in Matter of Niagara County v. Power Authority of State of New York is illustrative of this general rule of statutory construction. 82 A.D.3d 1597, 1601 (4th Dept. 2011) lv to appl. denied 2011 N.Y. LEXIS 2138 (2011). In Matter of Niagara County, the Fourth Department analyzed and compared 2008 and 2009 budget legislation with the provisions of the Power Authority Act. Id. In applying the general rule “‘that a prior general statute yields to a later specific or special statute’”, the Appellate Division held that the budget legislation was a specific statutory command entitled to deference. Id. quoting Erie Co. Water Auth. v. Kramer, 4 A.D.2d 545, 550 (4th Dept. 1957) aff’d 5 N.Y.2d 954 (1959). Further, the court recognized that “the phrase ‘[n]othwithstanding any provision of law to the contrary’ . . . is ‘the verbal formulation frequently employed for legislative directives intended to preempt any other potentially conflicting statute, wherever found in the State’s laws’”. Id. quoting People v. Mitchell, 15 N.Y.3d 93, 97 (2010) (emphasis added). Accordingly, the Triborough Doctrine has been preempted and only collective bargaining agreements that were unexpired on January 9, 2010 are excepted from Article 22 of the Retirement and Social Security Law. 21 In Matter of City of Yonkers v. Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, (“Matter of City of Yonkers”), the Appellate Division, Second Department determined that an expired collective bargaining agreement was no longer “in effect”. 90 A.D.3d 1043, 1044-45 (2d Dept. 2011) lv to appeal granted 2012 N.Y. Slip. Op. 71940 (May 3, 2012). Although the Second Department did not specifically use the term Triborough Doctrine in its decision, it did address the underlying principle and the issue of whether the terms of an expired collective bargaining agreement remain “in effect”. There, the Union argued that the terms of the expired collective bargaining agreement continued. Id. at 1044. Unlike the Fourth Department, the Second rejected the argument and held that: [c]ontrary to the contention of the Union, the CBA, which terminated by its own terms in June 2009, was no longer ‘in effect’ at the time of the effective date of article 22 of the Retirement and Social Security Law, which was January 10, 2010; therefore, the exception set forth in section 8 of that article is inapplicable (see L 2009, ch 504, pt A, § 8). Id., at 1044-45. By enacting Tier V, the Legislature sought attempted to control spiraling pension costs by requiring new hires to contribute. Recognizing that it faced a Contract Clause challenge to this attempt by public sector unions, the Legislature added the exception embodied in Part A, Section 8. 22 However, also recognizing that the Triborough Doctrine acted as a hurdle to its attempt to mitigate the fiscal crisis facing the state, the Legislature added the “notwithstanding” language as a means of preempting this hurdle. Accordingly, the Fourth Department erred in deciding that the exception applies. The Second Department, however, correctly determined in City of Yonkers that an expired collective bargaining agreement was no longer “in effect”. 90 A.D.3d at 1044-45. It is respectfully requested that this Court reverse the Fourth Department and determine that the parties’ CBA was no longer “in effect” for purposes of determining whether new hires must contribute to their retirement. POINT II AS THE CBA WAS NO LONGER “IN EFFECT” AT THE TIME TIER V BECAME EFFECTIVE, THE ARBITRATOR’S AWARD VIOLATES PUBLIC POLICY BECAUSE IT IS BARRED BY LAW. The Appellate Division erred as a matter of law because its decision violates public policy. The Arbitration Award states that the City must contribute to the retirement system on behalf of a member electing to be in a 20 year plan. The decision errs because new firefighters are no longer eligible to enroll in a non-contributory plan and because the law does not allow for the City to contribute to a new member’s retirement. As a result, 23 the Award requires the City to provide a benefit not authorized by law. This constitutes a negotiation of a change in retirement benefits, which is contrary to Civil service Law § 201(4) and RSSL § 470. An arbitration award may be vacated if it violates public policy. Local 2841, et al. v. City of Albany, 53 A.D.3d 974, 975 (3rd Dept. 2008). “[A] court may vacate an arbitral award where strong and well-defined policy considerations embodied in constitutional, statutory or common law prohibit a particular matter from being decided or certain relief from being granted by an arbitrator.” New York State Corr. Officers and Police Benevl. Assoc. Inc. v. State of New York, 94 N.Y.2d 321, 327 (1999) (citations omitted). The determination of what constitutes public policy “is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests.” Muschany v. U.S., 324 U.S. 49, 66 (1945). A court reviewing an arbitrator’s award should focus on the result of the award. Id. When intervening on public policy grounds, a court should examine the award on its face, without extensive fact-finding or legal analysis. Cohoes Police Officers Union v. City of Cohoes, 263 A.D.2d 652, 654 (3d Dep’t 1999) (citations omitted). However, a mistake of law rendering an award totally irrational or in violation of a strong public policy is a ground for vacatur. Matter of City of Buffalo v. Buffalo Police Benev. 24 Assoc., 13 A.D.3d 1202, 1202 (4th Dept. 2004). Moreover, vacatur is proper “where the final result creates an explicit conflict with other laws and their attendant policy concerns”. New York State Corr. Officers and Police Benevl. Assoc. Inc., 94 N.Y.2d at 327. On its face, the Arbitrator’s Award provides that new employees hired by the City on or after January 9, 2010 can elect the special option retirement plan under Article 26.1 of the CBA and therein require the City to pay their contribution towards retirement. (R. 106). Public policy, set forth in the Tier V legislation and State law, mandates that because the CBA had expired, these new employees must contribute 3% toward their retirement. One such state law that the Arbitrator’s Award explicitly conflicts with is Section 201(4) of the Civil Service Law. This Section defines the “terms and conditions of employment” upon which public employers and unions are required to collectively bargain. Civil Service Law § 201(4). It expressly prohibits bargaining over public sector retirement benefits by providing that the term “terms and conditions of employment” shall mean salaries, wages, hours and other terms and conditions of employment, provided, however, that such term shall not include any benefits provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees or their beneficiaries. No such retirement benefits shall be negotiated pursuant to 25 this article, and any benefits so negotiated shall be void. Civil Service Law § 201(4) (emphasis added). Essentially, this section prohibits the collective bargaining of retirement benefits. The Arbitrator’s Award provides that the City must pay for any contributions a newly hired Union member is mandated to make under the new Tier V legislation. (R. 104-05). The Arbitrator opined that [t]he 2009 Retirement Law Amendment creating a new Tier 5 for employees hired on or after January 1, 2010 does allow for a Collective Bargaining Agreement to provide an alternative or special retirement plan that such employees may avail themselves of if it exists in the Agreement. This provision is set forth in Section 8 of the 2009 Retirement Law Amendment. Article 26.1 provides for such a special plan and hence employees hired after January 1, 2010 still may elect that plan under Article 26.1 If other employees have no contribution as a result of negotiations and the provisions of Article 26.1 new employees would be covered by these terms as well. (R. 104). He then determined that although the City did not violate Article 26.1, employees were still eligible to elect the special option plan and have the City pay for their contributions despite the CBA’s expiration and the clear and unambiguous statutes and legislative public policy underlying the new Tier V legislation. (R. 104-05). Pursuant to Civil Service Law § 201(4), this obligation on the part of the City is void and unenforceable at 26 law. Matter of City of Yonkers, 90 A.D.3d at 1045. Simply stated, the City lacks the lawful authority to agree to pay the 3% contribution required of Mr. Rockwood and all new firefighters hired on or after January 9, 2010. Assuming arguendo that the City agreed to pay the 3%, which the Award requires, Civil Service Law § 201(4) declares this benefit to be void. Id. PERB, the administrative agency charged with interpreting and enforcing the Taylor Law, including Section 201(4), previously addressed the issue of retirement tier contributions negotiability and found in a manner consistent with the City’s position. In Matter of Civil Serv. Employees’ Assoc., Inc. Niagara Chapter & Town of Niagara (hereinafter “Town of Niagara”), PERB reviewed the negotiability of a union proposal which sought to continue a provision of the prior contract that provided, inter alia, that [t]he employer shall take the necessary steps to adopt and make effective March 16, 1970, the 1/60th plan of the new York State Retirement System. Such plan shall be fully paid for by the employer and shall be available to all employees covered by the contract. 14 PERB ¶ 3049 (1981) (original emphasis). PERB agreed with the Town’s position that the demand violated Article 14 of the RSSL. Id. Relevant to the dispute at issue here, PERB insightfully and instructionally stated in footnote two (2) of its decision that 27 Section 201.4 of the Taylor Law . . . prohibits the negotiation of retirement benefits. However, an exception to this is specified in L. 1975, c. 625, § 6, which permits the negotiation of retirement benefits which do not require approval by the State Legislature. Employer paid retirement coverage is a benefit which does not require approval by the State Legislature. However, public employees who have become members of a public retirement system on or after July 1, 1976, are required by [RSSL] Art. 14 to contribute three percent of their annual wages to the retirement system in which they have membership. Id. at n. 2. Here, just like in Town of Niagara, a specific statute mandated that employees contribute 3% of their annual wages to the Retirement System. Similarly here, the Union demands that the City must pay for this contribution. Although Town of Niagara involved a bargaining proposal, PERB’s reasoning that it was non-mandatory, is the same reasoning that should be applied here, which is that Civil Service Law § 201(4) declares negotiated benefits void. Accordingly, the Arbitrator’s Award requiring the City to pay the new employees’ retirement benefit contribution is also void as a matter of law. See Matter of City of Yonkers, 90 A.D.3d at 1045. PERB’s interpretation of Civil Service Law § 201(4) and Town of Niagara decision is entitled to deference from the Court. The Court declared in Matter of Bd. of Educ. v. PERB that “[a]s the agency charged with 28 interpreting the Civil Service Law, PERB is accorded deference in matters falling within its area of expertise.” 75 N.Y.2d 660, 666 (1990); Matter of Poughkeepsie Prof. Firefighters’ Assoc. v. PERB, 6 N.Y.3d 514, 522 (2006). Thus, the Fourth Department erred as a matter of law in refusing to vacate the Arbitrator’s Award because the Award explicitly conflicts with public policy embodied in statutory law. This holding by the Fourth Department contradicts with the Second Department’s decision in Matter of City of Yonkers, wherein the court stated that [u]nder these circumstances, the subject arbitration is barred by statute (see Civil Service Law § 201[4]; Retirement and Social Services Law § 470; see also Matter of County of Cautauqua v. Civil Serv. Empls. Assn., Local 1000, AFSCME, AFL- CIO, County of Chautauqua Unit 6300, Chautauqua County Local 807, 8 NY3d 513, 520- 21; Matter of City of Long Beach v. Civil Serv. Empls. Assn., Inc.-Long Beach Unit, 8 NY3d at 472; Matter of Patrolmen’s Benevolent Assn. of City of N.Y. Inc. v. New York State Pub. Empl. Relations Bd., 6 NY3d 563, 575-576; cf. Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d at 278). 90 A.D.3d at 1045. The Award also conflict with public policy, which is further set forth in Section 470 of the Retirement and Social Security Law (“RSSL § 470”). This Section provides that 29 [c]hanges negotiated between any public employer and public employee, as such terms are defined in section two hundred one of the civil service law, with respect to any benefit provided by or to be provided by a public retirement system . . . shall be prohibited. RSSL § 470. A New York State Comptroller opinion addressed RSSL § 470 and set forth the public policy rationale stating Section 470 of the [RSSL], prohibits . . . changes negotiated between public employers and public employees with respect to any benefit provided by or to be provided by a public retirement system . . . where such changes would require an act of the State Legislature . . . [s]imilarly, [Civil Service Law § 201(4)] provides that the term ‘terms and conditions of employment’ shall not include any benefits provided by or to be provided by a public retirement system . . . and declares that no such retirement benefits shall be negotiated pursuant to [A]rticle 14 of that law. The basic purpose of these restrictions is to help government employers hold down increases in the cost of pension benefits. Op. State Comp. 2000-14 (2000) (emphasis added). Accordingly, it is a public policy of this State to assist government employers in restraining public pension cost increases. The Arbitrator’s Award requires the City to contribute towards a new member’s retirement despite the strong public policy, embodied in State law, requiring that new members of the NYSPFRS hired on or after January 9, 2010, contribute 3% towards their retirement. Therefore, on its face, the 30 Award violates public policy and this case presents one of those rare instances wherein the City is entitled to vacatur pursuant to CPLR § 7511(b)(1)(iii). Additionally, the Comptroller has interpreted the Tier V legislation and specifically Part A, Section 8, Chapter 504 of the Laws of 2009. (R. 47, 109 & 111-12). On March 2, 2010, the Retirement System opined and advised the City that “firefighters hired by the City of Oswego on or after January 9, 2010, will be contributory, since your last contract [with the Union] expired on December 31, 2009.” (R. 109). On January 25, 2011, the Retirement System opined and advised the City that after January 9, 2010, an employer cannot negotiate to provide new employees with a no-cost membership in the 20-year special retirement plan (RSSL § 384-d). A ‘no-cost’ benefit no longer exists for persons hired on or after January 9, 2010 as RSSL § 1204 requires the member to contribute three percent of annual wages to the PFRS. (R. 111-12). As the administrative head of the retirement system (RSSL § 11), the Comptroller’s interpretation must be given judicial deference. See Matter of Lewandowski v. NYSPFRS, 69 A.D.3d 1027, 1028 (3d Dept. 2010); Conrad v. Regan, 155 A.D.2d 931, 931 (4th Dept. 1989). The Retirement System has determined that all firefighters hired after January 9, 2010 are classified in Tier V. (R. 159-60). Given the interpretations and the 31 Retirement System’s determinations, the City, by virtue of the Arbitrator’s Award, is not required to contribute the new employee’s share. As set forth herein, such a requirement is violative of the strong public policy prohibiting collective bargaining of public retirement system benefits, because the Arbitrator exceeded his power in fashioning the Award and because the Award is in direct conflict with the law requiring members of Tier V of the NYSPFRS to contribute towards their retirement. Accordingly, this Court should vacate the Arbitrator’s December 6, 2010 Award pursuant to CPLR § 7511(b)(1)(iii). ri'ait_f 7 . 15-),,, 32 CONCLUSION Based upon the foregoing and all the papers submitted herein, the City respectfully requests that the Arbitrator’s Award be vacated and the decisions to deny the City’s petition to vacate be reversed. The City has demonstrated compelling reasons for vacating the award as it expressly conflicts with Chapter 504 of the Laws of 2009 and violates the important public policy considerations underlying the Tier V legislation and the Civil Service Law. DATED: October 27, 2012 Albany, New York ROEMER WALLENS GOLD & MINEAUX LLP Attorneys for Petitioner-Appellant By: EARL T. REDDING, ESQ. Office & P.O. Address 13 Columbia Circle Albany, New York 12203 Tel. No.: 518.464.1300 x 315 Fax No.: 518.464.1010 e-mail: eredding@rwgmlaw.com