In the Matter of the Arbitration between the City of Oswego, Appellant, -and- Oswego City Firefighters Association, Local 2707, Respondent.BriefN.Y.February 13, 2013To 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 REPLY 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 REPLY DISCUSSION .................................................................................2 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.........................................................................................................2 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......................................................................................................12 CONCLUSION ..........................................................................................15 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) ..............................7, 8, 12, 13 Association of Surrogates and Supreme Court Reporters Within the City of New York v. State, 940 F. 2d 766 (2d Cir. 1991)..............................7, 8 Local 2841, et al. v. City of Albany, 53 A.D.3d 974 (3rd Dept. 2008) ..........................................................................................2 Long v. State, 7 N.Y.3d 269 (2006) ............................................................................................................9 Majewski v. Broadalbin-Perth Centr. Sch. Distr., 91 N.Y.2d 577 (1998) ..........................................................................................................9 Matter of City of Johnstown v. Johnstown Police Benev. Assoc., 99 N.Y.2d 273 (2002) ........................................................................................................11 Matter of Deas v. Levitt, 73 N.Y.2d 525 (1989) ........................................................................................................12 Matter of Retired Public Employees Assoc., Inc. v. Cuomo, 2012 N.Y. Slip. Op. 32979U (Albany Co. Sup. Ct. Dec. 17, 2012) ............................5, 6, 7 Matter of Tompkins Co. Support Collection Unit v. Chamberlin, 99 N.Y.2d 328 (2003) ..........................................................................................................8 Muschany v. U.S., 324 U.S. 49 (1945)...............................................................................................................2 New York State Corr. Officers and Police Benevl. Assoc. Inc. v. State of New York, 94 N.Y.2d 321 (1999) .........................................................................................................2 People v. Litto, 8 N.Y.3d 692 (2007) ............................................................................................................8 People v. Mitchell, 15 N.Y.3d 93 (2010) ........................................................................................................4, 5 Triborough Bridge & Tunnel Auth., 5 PERB ¶ 3037 (1972) .........................................................................................................4 iii STATUTES Page No. Civil Service Law § 167……………………………………………………………………6 Civil Service Law § 201……………………………………………………………..…3, 10 Civil Service Law § 209-a………………………………………………………….5, 13, 14 CPLR § 7511……………………………………………………………………………...11 RSSL § 384-d………………………………………………………………………...........10 RSSL § 470………………………………………………………………………………..10 LEGISLATION Page No. Chapter 504 of the Laws of 2009………………………………………3, 4, 7, 8, 11, 12, 13 S66026-2009, Statement in Support (December 2, 2009)…………………..………….7, 10 GOVERNOR VETOES Page No. Veto Message No. 5 of 2009 (Gov. Paterson June 2, 2009)…………………………….10 1 PRELIMINARY STATEMENT Petitioner-Appellant the City of Oswego (the “City”) submits this brief in reply to the opposition submitted by Respondent Oswego City Firefighters Association, Local 2707 (the “Respondent”) that the parties’ collective bargaining agreement 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. For the reasons set forth both previously and herein, the legislature repealed the Triborough Doctrine’s applicability to requiring employers to pay the employee’s retirement contribution. As a result, the Opinion and Award of Arbitrator Ronald E. Kowalski (the “Award”) should be vacated because it violates public policy and the relief requested by the City should be granted. 2 REPLY DISCUSSION POINT I THE OPINION AND AWARD OF THE ARBITRATOR VIOLATES STRONG PUBLIC POLICY AND THEREFORE MUST BE VACATED. It is well recognized that an arbitration award may be vacated if a particular matter is prohibited from being decided or certain relief being granted because of public policy considerations as ascertained by reference to laws and legal precedents. New York State Corr. Officers and Police Benevl. Assoc. Inc. v. State of New York, 94 N.Y.2d 321, 327 (1999) (citations omitted); Muschany v. U.S., 324 U.S. 49, 66 (1945); Local 2841, et al. v. City of Albany, 53 A.D.3d 974, 975 (3rd Dept. 2008). When reviewing an award, a court should focus on the result of the award. Muschany, 324 U.S. at 66 (emphasis added). 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 (emphasis added). In the instant matter, the Arbitrator’s Award requiring the City to pay the 3% contribution to the New York State and Local Police and Fire Retirement System (hereinafter “NYSLPFRS”) for employees hired on or after January 9, 2010 violates strong public policy as it explicitly conflicts 3 with Chapter 504 of the Laws of 2009, Civil Service Law § 201(4) and their attendant policy concerns. Respondent agrees that public policy vacatur applies when there is an explicit conflict with other laws and their attendant policy concerns. (Respondent’s Brief at page 8). The City is not arguing that the Arbitrator exceeded his authority or that the Arbitrator lacked the power to resolve the instant matter. Instead, the City maintains that the Award’s result violates explicit public policy considerations as embedded in Chapter 504 of the Laws of 2009 and Civil Service Law § 201(4) and thus, the Award must be vacated. Respondent argues that there were only two possible decisions by the Arbitrator. (Respondent’s Br. at p.6, n.2). The issue before the Arbitrator was not whether Firefighter Rockwood was entitled to join a special plan on a non-contributory basis, but whether the City violated Article 26.1 of the collective bargaining agreement when it refused to pay the employee cost for employees hired after January 1, 2010. (R. 98). The Arbitrator found that the City did not violate Article 26.1. (R. 104). Nonetheless, the Arbitrator went on to state that employees are eligible under Article 26.1 and the law to elect the alternative 20-year plan with the City for any contributions as negotiated. (R. 105). As a result, the City timely moved for vacatur on public policy grounds because the Award requires the City to pay the new 4 employee’s contribution to the retirement system, which is expressly against the law. Respondent implies that vacatur is not warranted because the City waived its claim that the Arbitrator exceeded his authority by participating in the arbitration. The City has never maintained that the Arbitrator exceeded his authority. Nonetheless, the City is not precluded from raising the public policy considerations impacted by the Arbitrator’s Award; especially when the Award is in explicit conflict with law. Respondent argues that the Award does not explicitly conflict with law or policy because of the Triborough Doctrine. (Respondent’s Br. at p. 9). In citing Chapter 504, Part A, Section 8 of the Laws of 2009 (“Section 8”) for the proposition that the Triborough Doctrine applies, Respondent fails to include the entire language of the statute. This cannot be a simple case of neglect or oversight. Respondent omits the opening phrase of the statute, which states “notwithstanding any provision of law to the contrary”. Section 8 (emphasis added). This phrase is critically important. It signals to the statute’s reader that the proceeding statutory language “preempt[s] any other potentially conflicting statute, wherever found in the State’s laws.” People v. Mitchell, 15 N.Y.3d 93, 97 (2010). As this Court stated in People 5 v. Mitchell, this language is “the verbal formulation frequently employed for legislative directives” intending to preempt conflicting laws. Id. The “notwithstanding” language indicates that the Legislature intended to affect a change to non-contributory plans for new hires and to limit applicability to employees covered by existing unexpired contracts. The Triborough Doctrine, codified in Section 209-a of the Civil Service Law, does not contain the term “effect”. CLS § 209-a. Instead, it simply states that it shall be an improper practice to refuse to continue all the terms of an expired agreement until a new agreement is negotiated. CLS § 209-a. The “notwithstanding” language of Section 8 preempts the Triborough Doctrine and any other contrary law which permits the terms of an expired agreement to continue until a successor agreement is negotiated. Section 8 specifies that notwithstanding the Triborough Doctrine, the collective bargaining agreement must actually be in effect on the effective date of the act for employers to pay the employee’s retirement system contribution. A recent example of the application of “notwithstanding” language to recent public policy legislation is the Albany County Supreme Court decision of Matter of Retired Public Employees Association, Inc. v. Cuomo, 2012 N.Y. Slip Op. 32979U (Albany Co. Sup. Ct. December 17, 2012) (a copy of which is annexed hereto). In that case, the Petitioners, 6 encompassing retired public employees, challenged the State’s implementation of a 2011 amendment to Civil Service Law § 167(8) as, inter alia, violative of Civil Service Law § 167(1)(a). Id. at *2 & 5-6. In the face of severe fiscal challenges, the State, in 2011, passed legislation seeking to reduce the State’s costs for subsidizing retiree health care. Id. at 3. The amendment to Civil Service Law § 167(8) provided a process which permitted the State to increase retirees’ contribution to their health care premiums. Id. at 4. Petitioners challenged this law under the theory that Civil Service Law § 167(1)(a) prohibits the State from altering retirees’ health care contribution obligations. Id. at 6. Supreme Court rejected this argument. Id. at 5-6. Section 167(8) begins with the language “notwithstanding any inconsistent provision of law”. Id. at 4. Recognizing that this language is the verbal formulation “frequently employed by the Legislature where it intends to preempt any other potentially conflicting statute”, the Court determined [t]hus, where implementation of Civil Service Law § 167(8)’s provisions results in different levels of contribution from those that would result from applying other laws such as Civil Service Law § 167(1)(a), Civil Service Law § 167(8)’s provisions takes precedence. Id. at 7. Matter of Retired Public Employees Association, Inc. is instructive to the instant case because it illustrates the application of the 7 “notwithstanding” language by the State to preempt conflicting laws in order to address a fiscal crisis through the use of future cost savings measures. The legislative history of Section 8 supports the City’s argument that the State intended to mitigate a fiscal crisis by requiring lifetime contributions for most new hires. S66026-2009, Statement in Support (December 2, 2009). The Legislature understood that local governments face a growing pension burden and have “little flexibility when trying to reduce their overall pension obligation.” Id. By preempting the Triborough Doctrine through the use of the “notwithstanding” language, the Legislature intended to provide local governments with more flexibility in reducing their overall pension obligation. The decision in Association of Surrogates and Supreme Court Reporters within the City of New York v. State (“Association of Surrogates”), 79 N.Y.2d 39 (1992) does not lead to a different result. There, the Court found that State Finance Law § 200(2-b) did not contain an express or implied repeal of the Triborough Doctrine. Id. at 45. A review of the Association of Surrogates case history establishes that preemptory language was set forth in Section 375 of Chapter 190 of the Laws of 1990. 940 F.2d 766 (2d Cir. 1991). However, the “notwithstanding” language only preempted “the provisions of subdivision a of this section or of section 200 8 of the state finance law”. Id. at 769 (original emphasis). Unlike the case at hand, Association of Surrogates only preempted certain statutes and not “any provision of law to the contrary” as set forth in Section 8. As a result, Association of Surrogates is distinguishable from the instant matter. Respondent argues that the “notwithstanding” language did not expressly repeal the Triborough Doctrine because Section 8 uses the word “effect”. (Respondent’s Br. at pp. 17-18). Under Respondent’s view, Section 8 and the Triborough Doctrine do not conflict. When construing statutory text, we must first begin “with the language of the statute itself.” People v. Litto, 8 N.Y.3d 692, 697, 840 N.Y.S.2d 736 (2007). When confronted with the need to interpret a statute, the primary goal of the Court is to determine and implement the Legislature’s intent. Id. Even if the language is clear, the statute’s legislative history is not to be ignored. See Matter of Tompkins Co. Support Collection Unit v. Chamberlin, 99 N.Y.2d 328, 335, 756 N.Y.S.2d 115 (2003). The lineage of the act in which the statute to be interpreted resides and the legislative history of the statute itself, including the circumstances surrounding its implementation, are often reviewed to illuminate legislative intent. Id., see McKinney’s Statutes §124 (1971). This method is helpful in understanding the public policy underlying Section 8. See Litto, 8 N.Y.3d at 697. With this method in 9 mind, it is axiomatic that statutes should be construed “to avoid objectionable, unreasonable or absurd consequences.” Long v. State of New York, 7 N.Y.3d 269, 273, 819 N.Y.S.2d 679 (2006); see McKinney’s Statutes §§141 & 145 (1971). If the words used by the Legislature have a definite meaning, which involves no absurdity or contradiction, the courts must not add or take away from that meaning. Majewski v. Broadalbin- Perth Centr. Sch. Distr., 91 N.Y.2d 577, 583 (1998). Respondent’s argument that the “notwithstanding” language and the word “effect” do not conflict leads to an absurdity or contradiction. There are no other known laws similar to the Triborough Doctrine which continues the terms of an expired collective bargaining agreement. There was no need for the Legislature to include the “notwithstanding” language if it meant for the Triborough Doctrine to apply. It simply could have begun Section 8 with “[N]othing in this act . . .”. Instead, the Legislature expressly added preemption language, which is supported by Section 8’s legislative history. This preemption language signals to the reader that notwithstanding the Triborough Doctrine, which says that the terms of expired agreements shall continue until a new agreement is expired, the act implementing Tier V shall not limit a member of a bargaining unit from joining a special retirement plan where the collective bargaining is in effect on the effective date of the 10 act until the agreement is terminated. It does not state that notwithstanding the Triborough Doctrine, employers must pay the employee’s cost of their retirement contribution. Indeed, the no-cost benefit previously available under Retirement and Social Security Law § 384-d 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). Further, Section 470 of the Retirement and Social Security Law prohibits changes negotiated between public employers and public employees with respect to benefits provided by a retirement system. See RSSL § 470. Similarly, Civil Service Law § 201(4) prohibits negotiations of retirement benefits. The New York State Comptroller aptly sets forth the public policy rationale of both these statutes when he stated “[t]he 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). When reading the Tier V legislation together with RSSL § 470 and Civil Service Law § 201(4), it is clear that it is a public policy of this State to assist government employers in restraining public pension costs. The Respondent has not and cannot controvert these strong and sweeping public policy concerns. Section 8 and the underlying 11 legislative history support the City’s argument that it is not required to pay the employee’s retirement system contribution. The Arbitrator violated public policy by holding that the City must pay a new employee’s contribution to the retirement system. (R. 106). Statutory law and their concomitant public policy considerations dictate that the City lacks the lawful authority to agree to pay the 3% contribution required of all new firefighters hired on or after January 9, 2010. Again, the City maintains that the Award violates public policy because it is contrary to law. Respondent’s reliance upon Matter of City of Johnstown v. Johnstown Police Benev. Assoc., 99 N.Y.2d 273 (2002) has no application to this matter. The 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 of after January 9, 2010, contribute 3% towards their retirement. As a result, the Award violates public policy and presents one of those rare instances entitling the City to vacatur pursuant to CPLR § 7511(b)(1)(iii). 12 POINT II VACATING THE AWARD WILL NOT RESULT IN AN UNCONSTITUTIONAL IMPAIRMENT OF CONTRACT. Vacating the award will not result in an unconstitutional impairment of a contract. (Respondent’s Br. at pp. 19-23). The Tier V legislation does not retroactively impair the rights and obligations of parties under a contract. Indeed, the individuals it does affect were not yet employed at the time the legislation became effective. This is distinguishable from Association of Surrogates where the lag payroll affected current employees. 79 N.Y.2d at 43-44. Furthermore, it is longstanding public policy that not yet hired employees do not possess a property right or legally protectable interest in appointment. Matter of Deas v. Levitt, 73 N.Y.2d 525, 532 (1989). As a result, the Tier V legislation is not impairing current employees, but only those future employees that are not yet legally protected. Contrary to Respondent’s argument, the City does not concede that at least some new hires may be allowed to participate in non-contributory plans. (Respondent’s Br. at pp. 22-23). Through the enactment of Tier V, non- contributory plans no longer exist for new hires. Respondent fails to cite any cases which hold that a contract cannot be impaired for future employees. Nonetheless, the Tier V legislation is 13 reasonable and necessary to accomplish a legitimate public purpose of controlling future pension costs. Association of Surrogates, 79 N.Y. 2d at 46. Respondent argues that a 3% salary loss will substantially impact future employees. However, looked at another way, the 3% realization to the employer mitigates the increased pension costs municipalities are currently experiencing. Respondent also provides no rationale for how the parties’ dispute resolution procedure will be irreparably harmed or how the Union’s bargaining role will be impacted. Respondent’s members prior to January 9, 2010 are not affected by the Tier V legislation and can continue to reap the benefits of not contributing to their retirement. As previously stated, the “notwithstanding any provision of law to the contrary” language of Section 8 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 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 14 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. ri'ait_f 7 . 15-),,, 15 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: January 2, 2013 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