In the Matter of City of Yonkers, Respondent,v.Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, Appellant.BriefN.Y.February 13, 2013To Be Argued By: TERENCE M. O'NEIL, ESQ. Time Requested: 30 Minutes oro-urt o-f J\pptals STATE OF NEW YORK In the Matter of the Application of CITY OF YONKERS, Petitioner-Respondent, For a Decision and Order Pursuant to Article 75 of the Civil Practice Law and Rules, -against- YONKERS FIRE FIGHTERS, LOCAL 628, IAFF, AFL-CIO, Respondent -Appellant. BRIEF FOR PETITIONER-RESPONDENT CITY OF YONKERS On the Brief: CHRISTOPHER T. KURTZ, ESQ. TERENCE M. O'NEIL, ESQ. BOND, SCHOENECK & KING, PLLC Attorneys for Petitioner-Respondent City of Yonkers 1399 Franklin Avenue, Suite 200 Garden City, New York 11530 Phone No. (516) 267-6300 Fax No. (516) 267-6301 Brief Completed on: August 15,2012 Echo Appellate Press, Inc.· 30 West Park Avenue· Long Beach, New York 11561 • (516) 432-3601 Printed on Recycled Paper 19316 TABLE OF CONTENTS INTRODUCTION •..•...•...•.......................•.....•..•..•...........................•........•..••..•........ 1 QUESTION PRESENTED FOR REVIEW .............•...............•...............•.•.•........ 3 STATEMENT OF FACTS & PROCEDURAL HISTORY ................................. 4 ARGUMENT ............•......•...........•................•............................................•............ 13 THE APPELLATE DIVISION, SECOND DEPARTMENT CORRECTLY HELD THAT A STAY OF ARBITRATION PURSUANT TO CPLR 7503 WAS PROPER ................................... 13 A. Standard of Review ................................................................... 13 B. Tier V & The PFRS ................................................................... 15 C. The Union's Grievance ............................................................. 21 D. The Union Improperly Tried To Assess Responsibility For The Section 8 Interpretation And Its Members' "Eligibility" For A Non-Contributory Plan On The City Instead Of The PFRS ................................................................ 23 E. CSL § 201(4) Requires That A Stay Of Arbitration Be Issued .......................................................................................... 28 F. RSSL § 470 Also Requires That A Stay Of Arbitration Be Issued ................................................................................... 39 G. The Appellate Division, Fourth Department Incorrectly Decided City Of Oswego .......................................................... 41 H. The Union's Case Law Does Not Alter The Purpose And Plain Language Of The Tier V Legislation ............................... 43 I. The Union's New Argument/Theory That The Second Department Decision Violates The United States Constitution Is Both Improperly Before This Court And Incorrect .................................................................................... 49 CONCLUSION ....••.....•......•....•..................•.•••....•............•.......................•.............. 56 TABLE OF CASES & AUTHORITIES CASES Association of Surrogates & Supreme Court Reporters v. State, 79 N.Y.2d 39, 580 N.Y.S.2d 153 (1992) ........................................................ 43-46, 50 Bd. ofEduc. v. PERB, 75 N.Y.2d 660, 555 N.Y.S.2d 659 (1990) ................................................................... 33 Bingham v New York City Trans. Auth., 99 NY2d 355 (2003) ........................................................................................... 49 Buffalo Niagara Airport Firefighters Ass'n. v. DiNapoli, Index No. 483-2011 (Sup. Ct. Albany Co. 2011) ......................................... 24-26 City of Johnstown v. Johnstown Police Benev. Ass'n, 99 N.Y.2d 273, 755 N.Y.S.2d 49 (2002) ............................................................ 14 Civil Service Employees Association, Inc., Niagara Chapter & Town of Niagara, 14 PERB 3049 (1981) ................................................................................. passim Cobleskill Central School District v. Newman, 105 A.D.2d 564 (3d Dep't 1984) ........................................................................ 47 In re Union Free Dist. #15, Town of Hempstead v. Lawrence Teachers Ass'n, 33 A.D.3d 808, 822 N.Y.S.2d 767 (2d Dep't 2006) ........................................... 57 Matter of Acting Superintendent of Schools of Liverpool Central School District (United Liverpool Faculty Association), 42 N.Y.2d 509, 399 N.Y.S.2d 189 (1977) .............................................. 13-15,41 Matter of the Arbitration between City of Oswego and Oswego City Firefighters Association, Local 2707, 93 A.D.3d 1243, 941 N.Y.S.2d 379 (4th Dep't 2012) ............................ 28,41-43 Matter of the Arbitration between City of Plattsburgh and Plattsburgh Police Officers Union AFSCME Local 82, 250 A.D.2d 327, 681 N.Y.S.2d 649 (3d. Dep't 1998) ........................................ 40 11 Matter of Barbara C., 64 NY2d 866 (1986) ........................................................................................... 50 Matter of Board of Education of Watertown City School District (Watertown Education Association), 93 N.Y.2d 132,688 N.Y.S.2d 463 (1999) .......................................................... 14 Matter of County of Niagara v. Newman, 104 A.D.2d 1,481 N.Y.S.2d 563 (4th Dept. 1984) ..................................... 47,48 Matter of Peters v. Union-Endicott Central School District, 77 A.D.3d 1236 (3d Dep't 201 0) ........................................................... 35, 36, 40 Matter of Westfall v. City of Cohoes, 1988 U.S. Dist. LEXIS 6925 (N.D.N.Y. July 11, 1988) .............................. 36-38 Professional Staff Congress v. New York State PERB, 7 N.Y.3d 458 (2006) ........................................................................................... 45 Pullman Police Officers' Guild v. City of Pullman, Decision 8086 (PECB, 2003) .............................................................................. 34 STATUTES Age Discrimination in Employment Act § 4(t)(2) ................................................... 37 N.Y. C.P.L.R. Article 75 .......................................................................................... 42 N.Y. C.P.L.R. § 7503 ................................................................................................. 3 N.Y. C.P.L.R. Article 78 .......................................................................................... 21 N.Y. Civil Service Law § 201(4) ..................................................................... passim N.Y. Civil Service Law § 209-a(I)( e ) .............................................................. passim N.Y. General Municipal Law § 207-c ...................................................................... 40 N.Y. L. 2009, ch. 504, art. 22 .......................................................................... passim N.Y. Retirement and Social Security Law, Article 14 ..................................... passim N.Y. Retirement and Social Security Law, Article 22 ..................................... passim 111 N.Y. Retirement and Social Security Law, § 75-i ................................................... 16 N.Y. Retirement and Social Security Law, § 384-d ................................................ 16 N.Y. Retirement and Social Security Law, § 384-e ................................................. 17 N.Y. Retirement and Social Security Law, § 470 ............................................ passim CONSTITUTIONS u.S. Const. art. 1, § 1 0 ..................................................................................... passim OTHER AUTHORITIES N.Y. State Court of Appeals, "Civil Jurisdiction and Practice Outline" ........... 49-51 Opinion of New York State Comptroller, 2000-14 (2000) ............................... 39,40 Opinion of New York State PERB Counsel, Jan. 2,1991, 1991 NYPER (LRP) LEXIS 2775 ...................................................................... 16 IV INTRODUCTION This case involves an attempt by a public sector labor unIon to take advantage of a somewhat confusing time in the recent history of the New York State and Local Police and Fire Retirement System (hereinafter "PFRS"). The period covers approximately six (6) short months - from July 1, 2009 through January 9, 2010. This approximately six (6) month period was preceded by a national and Statewide economic crisis and a concurrent political outcry for fiscal measures that would address the generous pension benefits provided to members of the uniformed services, and the related costs that severely impact municipal budgets and taxpayers. The Respondent-Appellant Yonkers Fire Fighters, Local 628, I.A.F.F., AFL- CIO (hereinafter "Respondent-Appellant" or "Union") seeks - through grievance arbitration - to nullify the remedial pension cost-sharing effects of Chapter 504 of the New York Laws of 2009, which added Article 22 to the New York Retirement and Social Security Law (hereinafter "RSSL") in December 2009 (hereinafter "Tier V"). The Supreme Court of the State of New York, Appellate Division, Second Judicial Department (hereinafter "Appellate Division, Second Department") squarely rejected the Union's efforts by applying three (3) separate and distinct statutory bars to arbitration: 1) § 8 of Part A of RSSL Article 22/Tier V (hereinafter "Section 8"). 1 2) New York State Civil Service Law (hereinafter "CSL") § 201(4); and 3) RSSL § 470. (Record on Appeal at p. 399-401).1 F or all of the reasons set forth herein, the Decision & Order of the Appellate Division, Second Department (hereinafter "Second Department Decision") should be affirmed. I Citations to the Record on Appeal are hereinafter referred to in parentheses as "R. _," followed by the appropriate page number( s). 2 QUESTION PRESENTED FOR REVIEW Petitioner-Respondent City of Yonkers (hereinafter "Petitioner-Respondent" or "City") contends that the proper question for review by this Court is: Whether the Appellate Division, Second Department correctly held that the arbitration demanded by the Union covering retirement benefits / pension contributions required from new members placed into Tier III and/or Tier V of the PFRS, should be permanently stayed pursuant to CPLR 7503? 3 STATEMENT OF FACTS & PROCEDURAL HISTORY The City and Union are parties to a collective bargaining agreement and successor Stipulation of Agreement (collectively hereinafter "the Agreement") which, by its terms, covered four (4) years, commencing on July 1, 2005 and expiring on June 30, 2009. (R.30-116). Article 15:0 (Pensions) of the Agreement states, in relevant part: Section 15:01 Members shall be entitled, pursuant to existing State law ... alternate optional retirement plans as follows: Section 15:01.01 - Twenty (20) year retirement plan as authorized by law with the City payment [sic.] the complete cost of said pension plan, ... ; and Section 15:01.02 - Twenty-five (25) year retirement plan with the commonly referred to 1/60th provision added thereto and to be paid for in full by the City .... (R. 49-50) (emphasis added). On June 2, 2009, Governor Paterson's Veto No.5 of 2009 ended the ability of firefighters hired on or after July 1, 2009 to join the non-contributory pension plans set forth in Tier II of the PFRS. (R. 128). For over 35 years before that (1973-2009), firefighters in the State of New York had been exempt, by virtue of regularly-passed legislation, from the Tier III and Tier IV pension system revisions that required non-uniformed employees to contribute a percentage of their salaries toward the cost of their pensions. 4 On July 1, 2009 Governor Paterson signed a bill that extended the benefits of Tier III (RSSL Article 14) to PFRS members hired on or after that date. (R. 128, 144). Tier III required members to contribute three percent (3%) of their salaries towards the cost of their pensions. (R. 140-41). Effective on or about October 1, 2009, the City hired approximately 36 firefighters. (R. 19, 219). Because of their hire date, these 36 new employees were appropriately placed in Tier III of the PFRS by the New York State and Local Retirement System (hereinafter "System"), the umbrella agency responsible for administering the State's public pension systems, including the PFRS. Placement in Tier III required the new firefighters to contribute three percent (3 %) of their salaries to the PFRS. (R. 19, 128, 140-41). In December 2009, Tier V was adopted into law. (R. 19, 126,219). Tier V applied to members who joined the PFRS on or after January 9, 2010. (R. 19, 126, 219). Tier V also required members to contribute three percent (3%) of their annual wages towards the cost of their pensions? (R. 19, 126, 219). Section 8 of the new Tier V provided a "grandfather-type" exception to Tier V's applicability for employees eligible to join a non-contributory special 2 Tier IV in the PFRS was passed over altogether as Article 22 of the RSSL also created Tier V in the New York State and Local Employees' Retirement System (hereinafter "ERS"), where Tier IV had previously been in place. 5 retirement plan pursuant to a collective bargaining agreement that was "in effect" on January 9, 2010: Notwithstanding 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 [January 9, 2010] 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. (R. 28, 121 ) (emphasis added). The legislation creating Tier V also permitted those Tier III members hired between July 1, 2009 and January 8, 2010 (the day before Tier V was mandatory) to elect (by May 9, 2010) to remain in Tier III or transfer into Tier V3• (R. 20, 219). On or about January 26, 2010, the Union filed a grievance with the City alleging a violation of Article 15:0 (Pensions) of the Agreement. (R.28-29). The grievance stated that: 3 For the purposes of brevity and clarity, and because the Record is devoid of any evidence regarding how many new Union members, if any, remained in Tier III, and because regardless of one's membership in Tier III or Tier V, a three percent (3 %) member pension contribution is required, all new Union members are hereinafter referred to as members of "Tier V" for purposes of the Union's Section 8 argument. Moreover, those new Union members who did not opt to move to Tier V are not eligible for Tier V's Section 8 exception. 6 Under the new Tier V law and the [Agreement] the City is obligated to pay 100% of the retirement contributions of these new members. (R. 29) (emphasis added). The requested remedy was as follows: (R.28-29). ... [the Union] requests ... the City to pay 100% of the retirement contributions of the new members who recently joined the Fire Department. By letter dated January 29, 2010, the City's Commissioner of Human Resources, wrote to the then-Union President and requested that the grievance be placed on hold pending the outcome of a determination by the PFRS as to the " ... applicable retirement benefits for uniformed ... fire personnel hired after July 1, 2009." (R. 117) (emphasis added). On or about May 13, 2010, the Union filed an Improper Practice Charge (hereinafter "Charge") at the New York State Public Employment Relations Board (hereinafter "PERB") (Case No. U-29993). (R. 118-22). The Charge alleged a violation of CSL § 209-a(I)( e)4 by the City for failing: 4 CSL § 209-a( 1)( e) states in relevant part: It shall be an improper practice for a public employer or its agents deliberately to refuse to continue all the terms of an expired agreement until a new agreement is negotiated .... 7 · .. to continue and apply the terms of Article 15 of the [Agreement] to Firefighters hired by the City after July 1, 2009 in violation of the Triborough Law and is requiring them to contribute 3 percent of their salary for pension contributions in violation of Article 22, Sect['l 1206, § 8. (R. 121) (emphasis added). The City filed an Answer to the Charge that affirmatively asserted, among other defenses, that: "[t]he subject of the instant Charge is not a mandatory subject of bargaining." (R. 123-25). The Charge ultimately was deferred to arbitration by PERB. (R. 226-27). The combined result of the Union's grievance and Charge were claims that violations of Section 8, the Agreement and the Taylor Law occurred BECAUSE the System placed its new members in Tier III and/or Tier V, both of which required a three percent (3%) contribution. On or about May 26, 2010, the City wrote to the System seeking the System's opinion on the merits of the Union's Charge. (R. 126). By letter dated June 18, 2010, Robert Coughlin, Counsel to the System (including the PFRS), wrote to the City regarding the System's position on the Union's Charge. (R. 126-28). Mr. Coughlin addressed the Union's position that the "Triborough Law" requires the City to continue to provide new employees with a non-contributory special retirement plan under Article 15 of the expired Agreement: 8 (R. 127-28). We believe this argument fails for a number of reasons. First, the provisions of [Section 8] are "notwithstanding any provision of law to the contrary," which would include CSL § 209-a(I)(e) [Triborough Law]. Second, CSL § 209-a( 1)( e) states that a public employer not "deliberately" refuse to continue the terms of a contract. The word deliberately implies a choice has been made by such public employer, which is simply not the case when the law mandates that such terms be null and void at the conclusion of the contract term. Third, ·CSL § 209- a( 1 )( e) is a general law governing all public employment contracts, where [Section 8] is a specific law that applies to one aspect of a public employment contract. As such, it is our opinion that [Section 8] should prevail over. the more general CSL § 209-a(I)(e). Finally, I note that without the specific grant contained in [Section 8] to join a non-contributory special retirement plan pursuant to an unexpired collective bargaining agreement, it would be impossible for a new member to join such a plan under the "Triborough" terms of an expired agreement. The Governor's Veto No.5 of 2009 ended the mandatory coverage of new members in the non-contributory retirement plans contained in RSSL Articles 8 and 11 [Tier II]. Effective July 1, 2009, all new PFRS members were covered by Article 14 of the RSSL [Tier III]. As a result, any new employees of the City of Yonkers attempting to elect a special retirement plan in PFRS were actually covered by and enrolled in the plan contained in Article 14 of the RSSL [Tier III]. As with Article 22 [TierV], members covered by Article 14 [Tier III] are required to contribute three percent of annual wages to the funding of benefits. By letter dated September 2, 2010, Mary Ellen Kutney, the System's Assistant Director for Member and Employer Services, wrote to the City's Mayor 9 with a completed analysis of the City's most recent collective bargaining agreements, and with the System's opinion on whether employees hired after January 9, 2010 in each City bargaining unit would be contributory under Tier V or non-contributory under the Section 8 exception for collective bargaining agreements that are "in effect." (R. 129). Ms. Kutney analyzed the Union's Agreement with the City as follows: (R. 129). Based on our review of the contract you provided for the City ... Firefighters hired by the City ... after January 9, 2010, will be contributory since your last stipulation expired on June 30, 2009. The Union did not pursue any claim against the System based upon this determination. (R. 129). On or about October 18, 2010, the City was served with a Demand for Arbitration of the Union's January 26, 2010 grievat;lce. (R. 130-35). The "Remedy Sought" was for the City to: (R. 131). Pay the complete cost of retirement contributions for members ... [and] [r]eimburse members for retirement contributions with interest. The Union seeks in arbitration to have the City either pay the required three percent (3%) contributions directly to the System, or reimburse the new Union members if they have to pay themselves. (R. 131). 10 On November 17, 2010, the City commenced the underlying action by Petition to the Supreme Court of the State of New York, Westchester County (hereinafter "Supreme Court"), seeking to stay the arbitration. (R. 15). Specifically, the City's Petition sought an order from the lower court, pursuant to Section 7503 of the CPLR, which would permanently stay the demanded arbitration on the grounds that statutory prohibitions and public policy considerations existed which militated against resolution of the gnevance regarding employee pension contributions in an arbitral setting. (R. 23). By Decision & Order dated January 20, 2011, the Hon. Mary H. Smith, J.S.C., of the Supreme Court denied the City's Petition. (R.4-14). By Decision & Order dated December 27, 2011, the Appellate Division, Second Department reversed the Supreme Court and granted the City's Petition to permanently stay arbitration in this matter. (R. 399-401). The Appellate Division, Second Department found: "Here, as the City correctly asserts, the arbitration of this dispute is barred by statute." (R. 400). The court concluded: (R.400-01). Contrary to the contention of the Union, the [Agreement], 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 [New York State Retirement and Social Security Law (hereinafter "RSSL")], 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). 11 This Court granted the Union's motion for leave to appeal this matter to the Court by Order dated May 3, 2012. CR. 398). Additional facts may appear in the remainder of this brief. 12 ARGUMENT THE APPELLATE DIVISION, SECOND DEPARTMENT CORRECTLY HELD THAT A STAY OF ARBITRATION PURSUANT TO CPLR 7503 WAS PROPER The December 27,2011 Second Department Decision correctly reversed the Supreme Court and held that a permanent stay of arbitration was proper in this case. The Second Department Decision essentially found that the Union's grievance and demand for arbitration failed to satisfy the first step of the two-part legal analysis required when a stay of arbitration is sought pursuant to CPLR 7503. Accordingly, a stay of arbitration was warranted. Despite the general public policy favoring arbitration as an "alternate means for resolution of legal disputes," the Appellate Division, Second Department correctly found that such a general policy cannot supersede: 1) the New York State Legislature's intent when it created the Section 8 exception in Tier V; and 2) the State Legislature's determination to entirely remove the subject of retirement benefits from the scope of collective bargaining in the public sector via CSL § 201(4) and RSSL § 470. (R.399-401). A. Standard of Review In determining whether a particular public sector grievance is subject to arbitration, New York courts continue to apply the two-step inquiry established by this Court in Matter of Acting Superintendent of Schools of Liverpool Central 13 School District (United Liverpool Faculty Association), 42 N.Y.2d 509, 399 N.Y.S.2d 189 (1977) and reaffirmed in Matter of Board of Education of WatertoWn City School District (Watertown Education Association), 93 N.Y.2d 132, 688 N.Y.S.2d 463 (1999): We first ask whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance ... [t]his is the "may-they-arbitrate" prong. If there is no prohibition against arbitrating, we then examine the [collective bargaining agreement] to determine if the parties have agreed to arbitrate the dispute at issue ... [t]his is the "did-they-agree-to- arbitrate" prong. City of Johnstown v. Johnstown Police Benev. Ass'n, 99 N.Y.2d 273, 278, 755 N.Y.S.2d 49 (2002) (citing Liverpool Cent. Sch. Dist., supra and Watertown City Sch. Dist., supra). The City recognized that the strength of its argument against being forced by the Union to arbitrate over the level of retirement benefits afforded to its Firefighters did not lie in the second step of the Liverpool analysis - "did-they- agree-to-arbitrate?" Accordingly, the City did not advance such an argument to the lower courts. The facts of this case do, however, justify a stay of arbitration based upon the Union's inability to satisfy the critical "may-they-arbitrate" initial threshold step of the relevant inquiry. This Court has more specifically stated with respect to the first step of the analysis: 14 Initially it must be determined whether arbitration claims with respect to a particular subject matter are authorized by the terms of the Taylor Law. Liverpool, 42 N.Y.2d at 513 (emphasis added). Since CSL § 201(4) - part of the Taylor Law - expressly removes the subject of this arbitration demand (pension/retirement benefits) from the scope of arbitration, it cannot be "authorized" by the Taylor Law. Accordingly, a permanent stay of arbitration is proper. The Union seeks to arbitrate over the inclusion of a prohibited/illegal subject of negotiations and/or void contract language as determined by CSL § 201 (4). Such a goal is against State law and public policy. B. Tier V & The PFRS When individuals join the PFRS, they are assigned by the System to a pension tier based upon their date of membership in the PFRS. (R. 139). These individuals then obtain the benefits (e.g., member contribution requirements, eligibility/calculation for pension benefits, death benefit coverages) afforded to members of that tier. (R. 139). For example, the following PFRS member contributions apply: • Tier II (members who joined between July 1, 1973 and June 30, 2009) - generally not required to contribute to the cost of their pensions; 15 • Tier III (members who joined between July 1, 2009 and January 8, 2010) - required to contribute three percent (3%) of salary for 25 years or until retirement (whichever is shorter); and • Tier V (members who joined January 9, 2010 or after) - required to contribute three percent (3 %) for the duration of their membership or until maximum service credit is obtained. (R. 139-41). In addition to tier placement, which is done exclusively by the System (not the City), members may elect certain regular retirement plans (usually for non- uniformed services, where eligibility for retirement benefits is based upon the individual reaching a certain age, e.g., RSSL § 75-i) or special retirement plans (usually available only to members of the uniformed services, where eligibility for retirement benefits is based upon the individual completing a specific number of years of credited service - not age, e.g., RSSL § 384-d). (R. 164). The adoption of one or more of these special retirement plans is generally negotiated with the collective bargaining representative of the employees since it constitutes a material benefit affecting "terms and conditions of employment" and is not prohibited by law. See Opinion of New York PERB Counsel, Jan. 2, 1991, 1991 NYPER (LRP) LEXIS 2775. However, the negotiation of changes to the specific benefits offered within such special retirement plans is prohibited, and any 16 existing contract language of similar effect is void, pursuant to CSL § 201(4), which states (with emphasis added): The term "terms and conditions of employment" means 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 ... No such retirement benefits shall be negotiated pursuant to this article, and any benefits so negotiated shall be void. For example, it is not disputed that the issue of whether or not a municipality offers the special retirement plan and benefits afforded under RSSL § 384-e is a mandatory subject of bargaining. Conversely, a proposal to alter or supplement the benefits or contributions of such an established plan is a prohibited subject of bargaining (and any contract language already in place to such effect is void under CSL § 201(4)). For example, a proposal to allow retirement after 19 years of service (instead of 20 years of service) and/or to make Tier I or II firefighters contribute five percent (5%) towards their pensions (instead of the statutorily- provided zero percent (0%)), is a prohibited subject of bargaining. Any clause in a collective bargaining agreement that provided such changes would be void. In order to best understand Tier V, it is important to know how it evolved. Tiers II and III For over 35 years (1973-2009), firefighters in the State of New York had been exempt from the Tier III and Tier IV pension system revisions that required 17 non-uniformed employees to contribute a percentage of their salaries toward the cost of their pensions. This had been accomplished by legislation passed regularly that delayed the implementation of Tier III as it applied to the PFRS. Consequently, since 1973, firefighters remained in the non-contributory Tier II. However, on June 2, 2009, Governor Paterson's Veto No.5 of 2009 ended the ability of firefighters hired on or after July 1, 2009 to join the non-contributory Tier II. (R. 128). On July 1, 2009 Governor Paterson signed a bill that extended the benefits of Tier III (RSSL Article 14) to PFRS members hired on or after that date. (R. 128, 144). Tier III required members to contribute three percent (3 %) of their salaries towards the cost of their pensions for 25 years or until retirement (whichever was shorter). (R. 140-41). Effective on or about October 1, 2009, the City hired approximately 36 Firefighters. (R. 19, 219). These Firefighters are members of the bargaining unit represented by the Union. (R. 19, 219). Because of their hire date, i. e., after July 1, 2009, the System appropriately placed these 36 new bargaining unit members in Tier III of the PFRS. (R. 19). As Tier III members of the PFRS, these new firefighters were required to contribute three percent (3 %) of their salaries towards the cost of their pensions. (R. 19, 128, 140-41). If any of the Union's new members remain in Tier III, we submit that any Tier V Section 8 arguments are 18 inapplicable as to these members. There is no statutory basis to challenge their placement or three percent (3%) contribution. Tier V In December 2009, Tier V was added for members who joined the PFRS on or after January 9, 2010. (R. 19, 126, 219). Tier V also required members to contribute three percent (30/0) of their annual wages towards the cost of their pensIons. The legislation creating Tier V also permitted those Tier III members hired between July 1, 2009 and January 8, 2010 (the day before Tier V would be mandatory for all new members in the PFRS) to elect (by May 9, 2010) to remain in Tier III or transfer into Tier V. (R. 20, 219). See supra., at fn. 3. Tier V J S Section 8 Exception Section 8 of the Tier V legislation provided a "grandfather-type" exception to Tier V's applicability for employees eligible to join a non-contributory special retirement plan pursuant to a collective bargaining agreement that was "in effect" on January 9, 2010: Notwithstanding 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 [January 9, 2010] and so long as such agreement remains in effect thereafter; 19 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. (R. 28, 121) (emphasis added). Thus, for example, under Section 8, if an employer had a collective bargaining agreement in effect for the period January 1, 2009 through December 31, 2011 that permitted a covered member to join an existing non-contributory PFRS pension plan, any new firefighter hired by that employer between January 9, 2010 and December 31, 2011 could join that plan without be required to make an employee contribution. Alternatively, firefighters would have to enroll in Tier V and contribute three percent (3%) if they were hired by the same employer on or after January 1, 2012 (after the collective bargaining agreement had expired and was no longer "in effect"). Finally, if the same employer did not have a contract "in effect" on January 9, 2010, any firefighters hired on or after that date would have to enroll in Tier V and make the required three percent (3 %) contribution. Thus, if an employer's collective bargaining agreement expired prior to January 9, 2010 - and a successor collective bargaining agreement had not been entered into - then there was no collective bargaining agreement "in effect" on that 20 date which wo.uld allo.w new hirees to. avo.id inclusio.n in Tier V, and they wo.uld be required to. make the three percent (3 %) contributio.n. With this backgro.und o.f Tier V and its Sectio.n 8 exceptio.n in place, the issues befo.re this Co.urt can be pro.perly examined. C. The Unio.n's Grievance On January 26, 2010, the Unio.n filed a grievance o.n behalf o.f the new members at issue. (R. 28). The grievance stated: The [ Agreement] will be "in effect" o.n the effective date o.f the new Tier V law (January 9, 2010) and remain "in effect thereafter" pursuant to. the Triboro.ugh Do.ctrine and CSL § 209-a(1)(e) ... Under the new Tier V law and the [Agreement], the City is o.bligated to. pay 100% o.f the retirement co.ntributio.ns o.f these new members. Acco.rdingly, [the Unio.n] hereby submits this grievance under the [Agreement] and requests the City. to. pay 100% o.f the retirement co.ntributio.ns o.f the new members who. recently jo.ined the Fire Department. (R. 28, 29) (emphasis added). Thus, it is clear that the Unio.n' s argument, fo.r which this permanent stay o.f arbitratio.n was so.ught and o.btained by the City, was/is two.-fo.ld - bo.th Sectio.n 8 and the Agreement independently require the City to. pay 100% o.f the pensio.n Co.sts asso.ciated with its new members. The Unio.n's two.-part argument fails fo.r the fo.llo.wing reaso.ns: 1) Despite the fact that the Unio.n claimed that Sectio.n 8 o.f the "new Tier V law" o.bligates the City to. pay fo.r its members, Sectio.n 8, by its terms, actually requires no.thing o.f public emplo.yers. Instead, Sectio.n 8 deals exclusively with the 21 System's determination of a member's "eligibility" (or ineligibility) for a non- contributory plan based upon hislher date of hire. As evidence of this point, the City wrote to the Union's President just three (3) days after the grievance was filed and advised him that the issue of the new members' eligibility for participation in a non-contributory plan was, at that time, under review by the System and, therefore, the City was requesting that the parties place the matter on hold while the System: ". . . determin[ ed] the applicable retirement benefits for uniformed . . . fire personnel hired after July 1,2009." (R. 117). Once the System determined that the proper placement for the Union's new members was ,in a contributory plan based upon the inapplicability of the Section 8 exception for collective bargaining agreements "in effect," the Union should have filed a CPLR Article 78 special proceeding challenge against the System, not pursued a grievance and/or the Charge against the City. (R. 129). Similarly, had the System determined that the Section 8 exception did apply to the new members, then the City would have had to either pay 100% of the pension costs, or initiate its own legal challenge to the System's interpretation via a CPLR Article 78 special proceeding. The City would not have had recourse against the Union or its members. 2) Since the Union's challenge to the applicability of the Section 8 exception in the Tier V law should have been against the System, and not part of 22 its grievance against the City, the second claim in the Union's grievance - that the Agreement obligates the City to pay 100% of the pension benefit costs for new members - fails under the prohibitions against bargaining over retirement benefits and the void language requirements set forth in CSL § 201(4). Each of these reasons is addressed in greater detail below. D. The Union Improperly Tried To Assess Responsibility For The Section 8 Interpretation And Its Members' "Eligibility" For A Non- Contributory Plan On The City Instead Of The PFRS The Union's first argument in its grievance represents an attempt to apply Section 8 in a manner that would relieve its newly-hired members of their statutory three percent (3 % ) contribution obligations. It does so even though their Agreement had expired on June 30, 2009 and clearly was not "in effect." (R. 113; 126-29). The Union should be pursuing its Section 8 claim against the PFRS, not the City. As is clear from the letters issued by the PFRS to the City, it was the PFRS - not the City - that interpreted Section 8 in a manner that required the· Union's new members to contribute towards the cost of their pensions. (R. 126- 29). In a case decided approximately one (1) month after the Second Department Decision in this case, the State of New York Supreme Court, Albany County, answered the Section 8 question that is really at issue in this case - could the PFRS apply Section 8 to deny newly-hired Tier V firefighters entry into a non- 23 contributory plan if the relevant collective bargaining agreement had expired prior to January 9,2010, and only the provisions of the Triborough Law governed at the time of the firefighters' hiring? See Buffalo Niagara Airport Firefighters Ass'n. v. DiNapoli, Index No. 483-2011 (Sup. Ct. Albany Co. 2011) (see Order and Judgment annexed to this Brief). This case was brought by a firefighters' union against the System, where the union therein sought to challenge the System's determination that its members did not fall within the Section 8 exception and were required to contribute three percent (3 %) towards the cost of their pensions. The case was actually cited to this Court by the Union in Paragraph 10 of its "Affirmation In Support Of Motion For Leave To Appeal To The Court Of Appeals." In Buffalo Niagara Airport Firefighters Association, the court dismissed a firefighter union's attempt to apply the Section 8 exception to an expired collective bargaining agreement by relying upon the Triborough Law5• See id. The union therein challenged the determination of the PFRS, not the employer's action in merely following the determination of the PFRS. The court, in Buffalo Niagara Airport Firefighters Association, stated: 5 The court also rejected the union's argument that the Section 8 exception applicable to collective bargaining agreements "in effect" on January 9, 2010 was satisfied by a post-January 9, 2010 collective bargaining agreement that was retroactive to a period prior to January 9, 2010. See id. 24 The questions before the Court, namely the meaning of the term "in effect," is one of statutory construction and analysis, "dependent only on accurate apprehension of legislative intent." "The legislative intent is to be ascertained from the words and language used, and the statutory language is generally construed according to its natural and most obvious sense, without resorting to an artificial or forced construction." Id. at 4 (internal footnotes omitted). stated: In addressing the union's Triborough Law argument, the court accurately Generally, the Triborough principle ensures that the status quo is maintained while parties to an expired collective bargaining agreement attempt to reach a new contract. The common law rule was later codified in statute, under [CSL] § 209(a)(1)(e), making it an improper practice for public employers to refuse to continue to honor "the terms of an expired agreement until a new agreement is negotiated." The Court of Appeals has held that the "practical effect of continuing all the terms of the CBA during the status quo period is that mutual obligations are imposed on both employers and employees." Importantly, however, the Triborough doctrine does not bind or otherwise obligate anyone beyond the contracting parties, including [the System] or Comptroller DiNapoli, rendering petitioners' argument regarding the 2008-2009 CBA unpersuasive. Id. at 5. The instant case is not about the City's attempt to change health insurance, vacations, salaries, or even to lag a payroll. It is about a new State law governing pension plan "eligibility" AS DETERMINED AND APPLIED BY THE PFRS - 25 not the City. The City's new Firefighters simply were hired too late to reap the benefits of a non-contributory pension. The Union at the time had no collective bargaining agreement "in effect" to "grandfather" them and shield them from the required pension contributions. state: The court in Buffalo Niagara Airport Firefighters Association went on to The exception language contained in section 8 of the Tier V legislation indicates that the legislature intended to limit eligibility for non-contributory status to those members who had a collective bargaining agreement actually in effect on January 9, 2010 and did not include a future agreement that mayor may not materialize several months later. Specifically, the legislature honored existing agreements that provided for non- contributory status for its members that existed at the time the legislation took effect and provided that, once the existing agreements, if any, expired, the covered member [hired after the collective bargaining agreement' s expiration] would be 'otherwise subject to the provision of [RSSL Article 22],' including the requirement to make annual [3 %] income contributions toward their pensions. Therefore, respondents' [PFRS] determination that the individually named petitioners did not qualify under the exception language as there was no existing, non-expired CBA at the time the statute became effective is deemed to be rationally based and free from any flawed statutory interpretation and application, the petition must be dismissed. Id. at 5-6. The Union herein chose not to sue the PFRS for its "eligibility" determination, or to even include the PFRS as a party to this action. Instead, it 26 misguidedly filed a grievance against the City that was properly stayed by the Appellate Division, Second Department. Finding in favor of the Union would eviscerate the legislative intent of Article 22 - compulsory pension contributions from new public employees. This is because under the Union's theory there would never be a period of time - not even a day - when a public sector collective bargaining agreement is not "in effect." All collective bargaining agreements would be "in effect" pursuant to the period covered by their negotiated duration clauses; then "in effect" pursuant to the Triborough provisions of the Taylor Law; then "in effect" again by virtue of the terms of the duration clause in the successor collective bargaining agreement that would be retroactive back to the day following the original agreement's expiration. Under this construct, new employees would never be required to contribute towards the cost of their pensions. Moreover, why did the Legislature put language in Section 8 about what happens "upon termination of such agreement" if these agreements could never expire under either their express terms or the Triborough provisions of the Taylor Law? Section 8 clearly contemplates that the agreement terminates and does not continue "in effect" in perpetuity. CR. 400). Moreover, the Legislature must be presumed to have been aware of the Triborough provisions of the Taylor Law 27 when it created the Section 8 exception and considered those provisions when it chose to utilize the term "agreement" throughout Section 8. Clearly, the Union's statutory claim in its grievance is addressed to the wrong party. Any such claim/action should have been pursued against the System. E. CSL § 201(4) Requires That A Stay Of Arbitration Be Issued The Appellate Division, Second Department properly ruled in the City's favor on the Section 8 exception issue. However, the Union's grievance contained an alternative theory that would also absolve its new members of having to contribute three percent (3 %) towards the cost of their pensions. The Union argued that Article 15:0 of the Agreement, by its plain language, required the City to essentially provide a no-cost pension plan to its members6• Indeed, as properly held by the Appellate Division, Second Department, any provision which would require a public employer to make such statutorily-required pension contributions for its employees would be void under the Taylor Law, CSL § 201(4) and/or RSSL § 470. CSL § 201 (4), in relevant part, prohibits the negotiation of, or use of void contract language regarding, pension retirement benefits, including required member contributions: 6 This was the argument advanced to the arbitrator in Matter of the Arbitration between City of Oswego and Oswego City Firefighters Association, Local 2707, 93 A.D.3d 1243, 941 N.Y.S.2d 379 (4th Dep't 2012). 28 The term "terms and conditions of employment" means 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 ... No such retirement benefits shall be negotiated pursuant to this article, and any benefits so negotiated shall be void. CSL § 201(4) (emphasis added). This Taylor Law provision applies to the Union's efforts - through its grievance - to use Article 15:0 of the Agreement to make the City responsible for its new members' three percent (3%) pension contribution. The Union desires to have an arbitrator interpret Article 15:0 of the Agreement, and specifically, language in Sections 15:01.01 and 15:01.02, to require the City to pay and/or reimburse newly-hired unit members for the mandated three percent (3%) contribution for their membership in Tier III and/or Tier V. According to CSL § 201 ( 4 ),even if the parties purposefully intended the language of Sections 15:01.01 and 15:01.02 to include an obligation that the City pay such costs, these benefits " ... shall be void." Consequently, the remedy would be unenforceable at law. This was a critical point missed by the Supreme Court, but recognized and corrected by the Appellate Division, Second Department. As a practical matter, Sections 15:01.01 and 15:01.02 were never an issue for the parties with regard to Tier I or Tier II members. Until the middle of 2009, 29 the System placed bargaining unit members in Tier I or Tier II - both non- contributory tiers. Thus, it was only when Tier III became relevant in the PFRS through Governor Paterson's closure of Tier lIon June 30, 2009 via Veto No.5, and then when Tier V came into existence six months later in January 2010, that the three percent (3 %) pension contribution percentage became a reality for certain new members of the bargaining unit. Nonetheless, now that the issue has arisen, it does not change the fact that the parties are prohibited by law from negotiating or agreeing to any contract language that alters the retirement plans' mandated benefits and contributions. Utilizing the existing contract language to absolve Tier III and Tier V unit members of a statutorily-required three percent (3%) contribution towards their own pension costs is also prohibited. The law is simple - the parties could not do it if they wanted to. PERB, the administrative agency charged with interpreting and enforcing the Taylor Law, including the types of provisions at issue herein, has addressed the issue of negotiability of pension tier contributions in the past and found in a manner consistent with the City's position. While the Supreme Court failed to grasp the full scope of PERB' s ruling and instruction, the Appellate Division, Second Department properly followed PERB's guidance. In Civil Service Employees Association, Inc., Niagara Chapter & Town of Niagara, 14 PERB 3049 (1981), PERB reviewed the negotiability of a union 30 proposal that sought to continue a provision of the prior contract that provided (in relevant part) as follows: The 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 this contract. (R. 198) (emphasis in the original). The employer filed an improper practice charge against the union on the grounds that the union was insisting upon the negotiation ( continuation) of the above-emphasized language - a clause that would have the effect of eliminating the newly-enacted three percent (3%) contribution for Tier III members. The employer alleged the matter was not a mandatory subject of bargaining under the Taylor Law because it violated state law. (R. 198). PERB's insightful and instructional footnote #2 on the topic stated: 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. (R. 198) (emphasis added). 31 PERB 's analysis of the union's proposal to have the employer pay the three percent (3 %) contribution statutorily required of Tier III members was concluded thusly: The [t] own argues that the demand is not a mandatory subject of negotiation because the underscored language violates State law. This position is correct. Article 14 of the [RSSL] provides a specific retirement plan for public employees, ... who are hired after July 1, 1976. This plan calls for contributions of 3 % by the public employee [fn.2]. (R. 198) (emphasis added). PERB's decision in Town of Niagara is directly on point with this case. This point was overlooked by the Supreme Court and the Union. The Supreme Court improperly focused on the fact that the issue in Town of Niagara involved a bargaining proposal. While this is accurate, it was not a bargaining proposal to put language into a contract for the first time. Rather, the Union sought to continue a clause that was in place in a collective bargaining agreement that had previously only covered Tier I and Tier II members, and make it applicable to the new Tier III employees in the ERS (who were statutorily required to contribute three percent (3%)). It is the exact same principle the Union espouses herein. Article 15:0 of the Agreement previously applied only to Tier I and II unit members. Those Tiers required the City (and all employers) to pay 100% of the cost of those plans. With the adoption of Tiers III and V, new members are required to contribute three 32 percent (3%) towards the cost of their pensions and the City's share may only be ninety-seven percent (97%) of such costs. In the instant matter, the Union is attempting to use contract language (Sections 15:01.01 and 15:01.02 of the Agreement) and the grievance arbitration process to essentially eliminate the statutorily-mandated three percent (3%) employee pension contribution. In Town of Niagara, the union attempted to use the collective bargaining process in a similar fashion - same goal, different strategy. The ultimate legal result of these attempts should not be any different. PERB's interpretation ofCSL § 201(4) and decision in Town of Niagara are entitled to the Court's deference in this case. As the agency charged with interpreting the Civil Service Law, PERB is accorded deference in matters falling within its area of expertise . . . In cases involving the issue of mandatory or prohibited bargaining subjects under the Civil Service Law, we have defined our review power as a limited one: "[s]o long as PERB's interpretation is legally permissible and so long as there is no breach of constitutional rights and protections, the courts have no power to substitute another interpretation. " Bd. of Educ. v. PERB, 75 N.Y.2d 660, 666, 555 N.Y.S.2d 659 (1990) (internal citations omitted). Not only has PERB determined that the present negotiation of mandated retirement benefits is prohibited and that the interpretation of previously negotiated clauses to reach such a goal is void, but other states have ruled this way as well. 33 The goal has been the same - to keep this critical fiscal and political issue away from the pressures faced in the cauldron of local negotiations. In the State of Washington, for example, the Public Employment Relations Commission ruled, and the courts affirmed, that an employer is not obligated to bargain a matter over which it has no discretion: [A] public employer had no duty to bargain concerning pension benefits for law enforcement officers and fire fighters covered by Chapter 41.26 RCW (the LEOFF Retirement System) because the Legislature had occupied the field by passing that statute as an exclusive system for providing pension benefits. (R. 206); (Pullman Police Officers' Guild v. City of Pullman, Decision 8086 (PECB, 2003). To be sure, there are also other jurisdictions that find employers and unions have a duty to bargain over matters related to retirement benefits. However, the principle enunciated in Town of Niagara and City of Pullman remains intact. When a state's legislature (as in New York and Washington) sees fit to remove the subject of retirement benefits from the purview of negotiations and, instead, decides to retain authority over that subject, or " ... occup[y] the field ... ," then such legislative determination should not be disturbed. This is more critical in the current economy than ever before. The Union's response to CSL § 201(4)'s clear prohibition is to misdirect the focus of the statute onto solely the concept of bargaining proposals and then claim 34 that the City's position is "disingenuous" despite its adoption by the Appellate Division, Second Department. Respondent-Appellant's Brief, p. 36. The Union's diversionary efforts clearly worked in the Supreme Court as Justice Smith failed to see the correlation between the City's argument and the relevant language set forth by PERB in Town of Niagara. In this case, the City never asserted that the parties are in a dispute over bargaining proposals that are currently "on the table." This case has always been about language contained in Section 15:01 of the Agreement. (R. 49, 50). Such language predates the Tier V legislation. (R. 49, 50). Thus, the City relies upon Town of Niagara, not because the instant proceeding involves bargaining proposals, but because it demonstrates how the administrative agency in charge of enforcing and interpreting New York State's Taylor Law (including CSL § 201(4)) handled a similar union attempt (almost 30 years ago) to alter the applicable three percent (3 %) employee contribution requirement imposed upon new employees in the System's then-newly created Tier III. The Union's reliance on a conveniently-placed ellipsis in its quoting of Matter of Peters v. Union-Endicott Central School District, 77 A.D.3d 1236, 1239 (3d Dep't 2010), does not make the subject matter of that case anymore applicable to pensions than those subject matters and cases already distinguished above. Respondent-Appellant's Brief, p. 36, 37. The Union states: 35 ... [I]t is well settled that "there is no prohibition against arbitrating a dispute originating from the terms of a collective bargaining agreement concerning ... benefits for retirees." Respondent-Appellant's Brief, p. 36, 37 (citations omitted in original). It was on this basis that the Union argues: "... [Town of] Niagara IS inapplicable." Respondent-Appellant's Brief, p. 37. The fully-cited quote reveals that the subject matter in Union-Endicott Central School District was health insurance benefits for retirees. That topic has nothing to do with the statutorily-covered (CSL § 201(4)) pension/retirement benefits at issue herein: ... [I]t is well settled that "there is no prohibition against arbitrating a dispute originating from the terms of a collective bargaining agreement concerning health insurance benefits for retirees." Union-Endicott Cent. Sch. Dist., 77 A.D.3d at 1239 (citations omitted) (emphasis added). Finally, the Union's attempt to carve out yet another exception for itself, this time by using the decision of a federal court in Matter of Westfall v. City of Cohoes, 1988 U.S. Dist. LEXIS 6925 (N.D.N.Y. July 11, 1988), an Age Discrimination in Employment Act (hereinafter "ADEA") federal case, is likewise misplaced. City of Cohoes involved an analysis of a special early retirement planlbenefit offered by the City of Cohoes, not exclusively with pension retirement 36 benefits obtained through the System (PFRS or ERS). (R. 367). The case examined whether this unique plan constituted a: ". . . bona fide employee benefit plan within the meaning of the ADEA § 4(f)(2)." (R.372). With respect to those types of local retirement benefit plans, such as the one in City of Cohoes, that do not require the approval of the State Legislature (unlike any of the plans or tiers at issue in this case), the exception found in Chapter 625 of the Laws of 1975 to CSL § 201 (4)' s prohibition on bargaining retirement benefits could be applicable. That exception, however, is not applicable in any relevant factual context before the lower courts or this Court. The Union's use of emphasized language in its Brief at page 38 regarding City of Cohoes does not support the point that RSSL-based pension retirement benefits for PFRS members are negotiable, only that certain non-State-approved benefit plans of public employers who happen to participate in the PFRS can be negotiable. As confirmed by PERB in its Footnote #2 in Town of Niagara: Section 201.4 of the Taylor Law as amended by L.1973, c.382, § 6 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. 37 (R. 198). Far from supporting the Union's argument, City of Cohoes actually bolsters the City's position regarding the prohibition against bargaining for, or utilizing existing void contract language related to, changes in the types of Statewide pension benefits at issue herein. The Court should also consider the Statewide impact of a reversal in this case. Should the Union prevail, then CSL § 201 (4) would be eviscerated and the next logical extension of this Court's ruling would be that public sector unions around the State would begin proposing language similar to that found in Article 15:0 of the Agreement - if they did not already possess such language. Negotiation of pension contributions - never intended to be subject to the collective bargaining process - would become prevalent and fall victim to local politics. Worse, pension contribution proposals would become subject to Interest Arbitration for police and fire unions, where a lone individual with no connection to a municipality could financially cripple its coffers by granting such a union proposal, e.g., increasing the pension payout from fifty percent (~O%) of final average salary to sixty percent (60%) of final average salary and requiring the municipality to pay for the ten percent (10%) differe~ce. The results could be devastating and contrary to Tier V's goal of providing fiscal relief to local governments. 38 While the Supreme Court misconstrued CSL § 201(4) and Town of Niagara, the Appellate Division, Second Department got it exactly right. Accordingly, the Appellate Division, Second Department's decision should be affirmed. F. RSSL § 470 Also Requires That A Stay Of Arbitration Be Issued RSSL § 470 presents another independent statutory basis for a stay of arbitration, and provides as follows (in relevant part): Until July first, two thousand eleven, changes negotiated between any public employer and public employee, as such terms are defined in section two hundred one of the civil service law [i.e., the Taylor Law], with respect to any benefit provided by or to be provided by a public retirement system ... shall be prohibited. The Appellate Division, Second Department recognized the validity and applicability of the above-quoted prohibition found in RSSL § 470 when it stated: "Here, as the City correctly asserts, the arbitration of this dispute is barred by statute." (R. 400). RSSL § 470 was addressed by the New York State Comptroller in an Opinion that set forth the public policy rationale for the prohibited nature of negotiations over retirement benefits: 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, [CSL § 201.4] provides that the term "terms and conditions of employment" shall not include any 39 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. (R. 215); Ope State. Compt. 2000-14 (2000) (emphasis added). At pages 40-41 of its Brief, the Union counters the prohibitions of RSSL § 470 by, again, as it did in its CSL § 201(4) argument, misusing both Union- Endicott Central School District, a case involving retiree health insurance benefits, not prohibited pension benefits, and City of Cohoes, a case involving a non-State Legislature-approved retirement benefit, and by citing inapposite cases such as Matter of the Arbitration between City of Plattsburgh and Plattsburgh Police Officers Union AFSCME Local 82, 250 A.D.2d 327, 681 N.Y.S.2d 649 (3d Dep't 1998), a case which actually recognizes the applicability of RSSL § 470 (and CSL § 201 ( 4)), and which deals with "the creation of benefits for public sector retirees that exist separately from the benefits provided by a retirement system." Id. at 329. City of Plattsburgh involved benefits under a General Municipal Law § 207-c agreement and did not deal with pensions or pension-related retirement benefits. Id. The public policy behind RSSL § 470, and even the enactment of the Tier V legislation, is to address - in a mandatory fashion - the spiraling costs of public pensions and their impact on the State and local budgets. Wisely, the State 40 Legislature has seen fit to insulate and protect these compulsory requirements from the vagaries of local negotiations in a political environment and from Interest Arbitration (for certajn uniformed services, including Firefighters). This Court should not allow the Union to avoid these statutory and policy-based protections. G. The Appellate Division, Fourth Department Incorrectly Decided City Of Oswego The Appellate Division, Fourth Department's decision in City of Oswego is not directly applicable to this case and its holding should not be followed by this Court. In City of Oswego, the Appellate Division, Fourth Department reached a decision based upon the City of Oswego's petition to vacate an arbitration award, not a petition to stay arbitration as in the instant case. This is an important distinction as differing standards of review were utilized by the lower courts in this case and in City of Oswego. While the Appellate Division, Second Department reviewed whether a stay of arbitration was proper under the two-prong Liverpool analysis detailed herein (supra at 13-14), the Appellate Division, Fourth Department reviewed whether the arbitrator's award should be vacated: ... [O]n the ground that [the] arbitrator exceeded his or her power only where the arbitrator's award violates a strong public policy 7, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power (citation omitted). 7 The public policy argument for vacatur is, arguably, covered by the "may-they- arbitrate" prong of the Liverpool analysis. Consequently, City of Oswego should be reversed. 41 City of Oswego, 93 A.D.3d at 1245-46. These differing standards can lead to varying results, and are one of the main reasons why public employers should not have to conduct arbitrations (and expend valuable time and limited money and resources) only to try and later move to have them vacated - as suggested by the Union when it labeled the City's claims as: " ... at best premature[,]" at page 14 of its Brief to this Court. The ability to stay an arbitration is provided for in CPLR Article 75 so that it is used in the proper circumstances. This ability should not be ignored in lieu of an after-the-fact vacatur attempt under a different standard of review. The Appellate Division, Fourth Department also incorrectly concluded that CSL § 201(4) and RSSL § 470 do not prohibit the arbitration of contract language which is being used to vitiate Section 8. The Appellate Division, Fourth Department stated: The determination whether a certain group of employees falls within a legislatively-created exception to a statute is not a negotiation of retirement benefits. It is merely an interpretation of Section 8 as it applies to a previously- negotiated agreement. City of Oswego, 93 A.D.3d at 1246-47. This conclusion seems to confusingly posit the following theory - that each individual arbitrator in cases all around the State is going to be required to interpret Section 8 on hislher own. This result is untenable. An arbitrator's sole purpose is 42 to interpret collective bargaining agreement language. In this regard, it is an oft- heard axiom that an arbitrator's powers are confined to the "four comers of the contract." Arbitrators should not be interpreting the complex legislative provisions of Section 8 as this would invariably lead to inconsistent Statewide results. The Union seems to support this unfortunate outcome in its conclusion as to the meaning of the above-quoted portion of the City of Oswego decision: "Thus, this is a matter that falls squarely within the confines of arbitration .... " Respondent- Appellant's Brief, p. 13. F or the reasons recognized immediately above, for the reasons articulated in the Second Department Decision, and for all of the reasons set forth herein, the Appellate Division, Fourth Department reached the wrong conclusion in City of Oswego. This Court should not follow City of Oswego, but should affirm the Second Department Decision. H. The Union's Case Law Does Not Alter The Purpose And Plain Language Of The Tier V Legislation The Union places great emphasis on this Court's 1982 decision in Association of Surrogates & Supreme Court Reporters v. State, 79 N.Y.2d 39, 45, 580 N.Y.S.2d 153 (1992), which held that the "Triborough" amendments continue contracts beyond the completion of their stated term. However, the facts presented in Association of Surrogates and in the instant case differ greatly in the nature of the subject matter (lag payroll v. retirement benefits). These differences belie the 43 Union's position that Association of Surrogates is "directly on point and involves a factually similar issue." Respondent-Appellant's Brief, p. 17. Additionally, more recent decisions by the Court of Appeals (also cited by the Union) have not embraced the same language/concept addressed in Association of Surrogates. In Association of Surrogates the Court addressed unilateral actions taken by the State to cure its budget shortfalls by amending the N.Y.S. Finance Law to effectuate a five-day lag payroll on certain unionized State employees. Id. at 43- 44. The State took a subject matter (lag payrolls) which, unlike retirement benefits and pensions, was undisputedly appropriate for the collective bargaining process as a mandatory subject of bargaining, and forced it upon its workforce. Id. In the instant case, the Legislature took action to create a Tier V in the PFRS and make employee retirement contributions mandatory. This action was taken in an area (unlike lag payrolls) that had been previously removed (in all respects) from the purview of collective bargaining by CSL § 201(4). The Union consistently fails to adequately address in its papers that portion of CSL § 201 (4) which makes any previously-negotiated retirement benefits language "void." Why? Because it cannot be refuted and is fatal to the Union's claim. The reality is that the relevant portions of Article 15:0 of the Agreement were not "void" for many years when only the non-contributory Tiers I and II of the PFRS were in existence. It was only when the three percent (3%) contributions 44 required of Tiers III and V members came into existence that the language in Article 15:0 came into direct conflict with CSL § 201(4). Tiers III and V and the System required a three percent (3%) contribution - the Agreement provided that the City pay 100%, not 97%. With respect to this conflict, CSL § 201(4) makes it clear that such employees must be placed into the three percent (3 %) contributory Tiers III or V. No contract language can supersede or alter the requirements set forth in these retirement benefit tiers. Such a clause - as the Union desires Article 15:0 to be - is "void." The Union also cited a more recent decision of this Court, Professional Staff Congress v. New York State PERB, 7 N.Y.3d 458,469 (2006), for the proposition that: "all terms of a [collective bargaining agreement] remain in effect during collective bargaining of a successor agreement." Respondent-Appellant's Brief, p. 16, 23. This case actually supports the City's and the System's position, as well as the Appellate Division, Second Department's conclusion, that a collective bargaining agreement can expire but only its terms must continue at law (i.e., "remain in effect") because they must go unchanged pursuant to the "Triborough" amendments to the Taylor Law (CSL § 209-a(I)(e)). Critically, this Court did not, as it could have, follow Association of Surrogates from 14 years earlier (and adopt the Union's position in this case) that the "contracts" themselves " ... [continue] 45 after the expiration of their stated term .. 00" Association of Surrogates, 79 N.Y. 2d at 46. The Union routinely tries to blend this marked distinction between the Agreement being "in effect" and the City's inability to unilaterally change the "terms" of the Agreement after its expiration because without doing so its argument fails. The Union states: The plain language of the Section 8 exception explains that if the terms of the [ Agreement] are "in effect" on January 9, 2010, then any member of the Union may join a special retirement plan contained in the parties' [ Agreement]. Respondent-Appellant's Brief, p. 16. Now, let's compare the actual plain language of Section 8, where the use of "terms" is not found: ... [N]othing in this act shall limit the eligibility of any member of any employee organization to join a special retirement plan open to him or her pursuant to a collectively negotiated agreement with any . . . 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 .... (R. 400) (emphasis added). The last part of Section 8 only bolsters the City's position: [P]rovided, however, that any such eligibility shall not apply upon termination of such agreement for employees subject to the provisions of [RSSL Article 22]." 46 (R. 400) (emphasis added). Can it be the Union's argument that the use of "termination of such agreement" does not reflect the expiration/termination of the Agreement itself, but rather the "termination" of the "terms" of the Agreement? This would be an illogical result. The Union's reliance on Cobleskill Central School District v. Newman, 105 A.D.2d 564, 565 (3d Dep't 1984), is also misplaced. Respondent-Appellant's Brief, 18, 19. As was the case in Association of Surrogates (lag payroll), the subject matter in Cobleskill Central School District (salaries) is undeniably a mandatory subject of negotiations. In the case at bar, the subject at issue - pension retirement benefits - is one (unlike lag payrolls and salaries) that has been legislatively removed from the collective bargaining process under CSL § 201 (4). Moreover, the court's language does not support the Union's position; rather, it is consistent with the City's and System's position that collective bargaining agreements do expire even though their terms are required to continue unchanged until a successor agreement (or Interest Arbitration Award) is reached: "The salary schedule was one of the terms of the expired contract which was required to be extended." Id. at 19 (emphasis added). The Union cites Matter of County of Niagara v. Newman, 104 A.D.2d 1,2, 481 N.Y.S.2d 563 (4th Dept. 1984) for the proposition that: 47 · .. [L ]egislative enactments may not violate or conflict with the Triborough Law; as such Article 22 should not change the terms of the expired [Agreement] .... Respondent-Appellant's Brief, p. 20. However, the legislative enactment at issue in County of Niagara was a local/County bargaining impasse resolution, a municipal action that does not carry the same weight against the State's Taylor Law as does the State legislation at issue in this case. The two are not appropriately comparable. The City agrees with the Union's contention at page 24 of its Brief that: The Section 8 exception under Article 22 of the new Tier [V] law is intended to grandfather collective bargaining agreements "in effect" on the effective date of the law. But that is all the Section 8 exception does. Section 8 does not take already- expired agreements - the only other kind of agreement other than one which has not expired - and apply its exception to all agreements under the guise of the Triborough Law. If that were the case, the "Section 8 exception" would become the "Section 8 rule" as no collective bargaining agreements could ever be anything but active by their terms (i.e., duration clause) or active by virtue of the Triborough Law. The language in Section 8 regarding what happens "upon termination of such agreement" would be rendered meaningless as no agreements would terminate - they would either be active or protected by the Triborough Law - until such time as they became active again via a retroactive successor agreement. For 48 all of the statutory construction principles cited by the Union, surely it should be recognized that statutory language is not to be rendered meaningless. 1. The Union's New Argument/Theory That The Second Department Decision Violates The United States Constitution Is Both Improperly Before This Court And Incorrect The Union asserts that the permanent stay of arbitration issued in this case constitutes an unconstitutional impairment of a contract. Respondent-Appellant's Brief, p. 26-33. As a preliminary matter, the Union now raises this legal argument/theory for the first time on appeal to this Court. The Union did not even raise this theory to this Court in its motion for leave to appeal. As the Court's own "Civil Jurisdiction and Practice Outline" (found on the Court's website) states and cites: As a general matter, appellate courts are reluctant to review legal arguments raised for the first time on appeal. Several policy reasons underlie this rule, such as avoiding unfairness to the other party, giving deference to the lower courts and encouraging the proper administration of justice by demanding an end to' litigation and requiring the parties and trial courts to focus the issues before they reach the Court of Appeals. Bingham v New York City Trans. Auth., 99 NY2d 355, 359 (2003). Moreover, the Union's new legal argument/theory seems to prompt judicial review of the entire Second Department Decision on constitutional grounds that were not even mentioned in the Second Department Decision. Again, from this Court's own "Civil Jurisdiction and Practice Outline": 49 The general rule requires that constitutional questions be raised at the first available opportunity as a prerequisite to review in the Court of Appeals. See, M,:., Matter of Barbara C., 64 NY2d 866, 868 (1986). While the Union will likely argue that the City "opened the door" to this new legal argument/theory in its Reply Brief to the Appellate Division, Second Department, the Union saw fit not to include that Reply Brief to this Court in the Record on Appeal. Moreover, the Union, in its Brief to this Court, states that the City "acknowledged" that the State Legislature created Section 8 to avoid constitutional infringement issues and that "both sides" agree that the exception found in Section 8 was created to avoid issues related to the Constitution and Association of Surrogates. The City's Reply Brief (p. 7) to the Appellate Division, Second Department actually stated, without mention of Association of Surrogates: The Legislature clearly carved out in Section 8 how it wanted Tier V applied in cases where there were collective bargaining agreements ... not yet expired. This was likely done so as to avoid constitutional contractual infringement issues. (R. 126-29; 235-36). Article I, Section 10 of the United States Constitution prohibits the State from: "... pass [ing] any ... La~ impairing the Obligation of Contracts .... " Thus, absent this Section 8 exception, the new Tier V legislation would have prevented those Union members covered by a non-expired collective bargaining agreement from having access to benefits guaranteed to them in such agreement. 50 The City also presented this theory to the Appellate Division, Second Department at page 20 of its initial Memorandum of Law, but the Union ignored it in its response. The Union has had ample opportunity and two prior judicial forums (Supreme Court and Appellate Division, Second Department) to advance its new legal theory regarding the unconstitutionality of Section 8. The Union should not be permitted, as the Court's "Civil Jurisdiction and Practice Outline" supports, to raise this argument/theory for the first time to this Court. The City respectfully requests that it be notified in advance of the oral argument before this Court if this aspect of the Union's argument is not going to be considered by the Court. Even if the Court determines it is proper to review the Union's argument as to the unconstitutionality of Section 8, the Union has not met its burden of proof. In order to even address the constitutional challenge presented by the Union, the Court would first have to adopt the Union's position that the Agreement itself, even though plainly expired, was still "in effect," as contemplated and used by/in Section 8. For all of the reasons stated herein, such a conclusion is wrong - as found by the Appellate Division, Second Department. Without making this improper leap, the exception found in Section 8 (effective January 10, 2010) cannot be said to impair a "contract" (i. e., the Agreement) that unquestionably expired June 30, 2009. (R.399-401). 51 The existence of the exception found in Section 8 actually supports the City's position. In recognition of the fact that the implementation of RSSL Article 22 could affect unexpired collective bargaining agreements around the State, the State Legislature - in a move that specifically avoided any potential unconstitutional impairment of such agreements - created the exception found in Section 8. The exception "grandfathered" those individuals covered by unexpired collective bargaining agreements (i.e., " ... where such agreement is in effect on [January 9, 2010] ... ,") (e.g., a January 1, 2010 - December 31, 2012 collective bargaining agreement) but, critically, only for ". . . so long as such agreement remains in effect thereafter .... " (e.g., until December 21, 2012 under the above example). (R. 400). Thus, the "grandfather" exception only applies until the collective bargaining agreement expires. To make it very clear what happens after the collective bargaining agreement expires, and to make sure· the legislation actually applied to new employees Statewide in a manner that provided the municipal fiscal relief intended, the State Legislature added: (R.400). ... [P]rovided, however, that any such eligibility [i.e., for the "grandfather" exception] shall not apply upon termination of such agreement [(e.g., December 31, 2012 in the above example)] for employees otherwise subject to [RSSL Article 22]. 52 The "termination" of collective bargaining agreements recognized in Section 8 would have no meaning if the Union's proffered theory of constant effectiveness of collective bargaining agreements was adopted under its never-ending "Collective Bargaining Agreement - Triborough Law - Successor Collective Bargaining Agreement - Triborough Law/Successor Collective Bargaining Agreement" doctrine. The Court should not be persuaded by the Union's efforts to try and make this case about the City's attempt to reduce the salarie's of its Firefighters. The City took no action in this case. It was the System's placement of the at-issue Firefighters in Tiers III and V of the PFRS that triggered their mandatory employee pension contribution. This contribution was required by State law under Tiers III andY. The Union seeks to have this case examined and decided on a mIcro (Citywide) level, but conveniently glosses over the considerable macro (Statewide) level impacts of a decision in its favor. The entire issue of negotiability of pension contribution amounts and retirement benefits - long a prohibited/illegal subject of negotiations - would be open for debate, negotiations, Interest Arbitration and/or legal challenges. Civil Service Law § 201 (4) would have no meaning as to pensions. Surely, this is not what the State Legislature intended when it passed 53 Tier V. If nothing else, it would be against public policy for this Court to sanction such chaos. Finally, the Union tries again to make this case about actions taken by the City through its argument that the City must show that its reduction in the salary of its Firefighters is "reasonable and necessary to accomplish a legitimate public purpose." Respondent-Appellant's Brief, p. 30. Presumably, this is because the City merely followed State law, as further confirmed and required by the System in its letters to the City, for its Tier V employees. (R. 126-29). Tier V, including its Section 8 exception, was passed by the State, not the City. If the Union is challenging the statutory meaning of Section 8, then the proper examination has nothing to do with the City's actions, but rather whether the State's action - in creating Tier V and requiring new employees hired on or after January 10, 2010 to contribute just three percent (3%) of the total annual cost of their pension incurred by their public employers - was "reasonable and necessary to accomplish a legitimate public purpose." The Union did not seek to include the State as a party to this action and, despite its burden to prove so, did not prove that Tier V is unreasonable, unnecessary, or not for a legitimate purpose because it requires employees to contribute three percent (3 %) of their annual salaries towards the cost of their own valuable, defined-benefit pensions. 54 In light of the current national, State, and City economies, and in light of the significant role that public employee pensions play in both the State and City economies, efforts by the State Legislature and Governor to address these complex issues on a Statewide level should not be deemed to be unreasonable, or unnecessary, or concluded to be for an illegitimate purpose, by a local union that failed to meet its burden of proving so. The Second Department's Decision is not unconstitutional. 55 CONCLUSION The Union has attempted to relieve its new members from their statutorily- imposed three percent (3%) pension contributions using two (2) theories. First, the Union claims that because of the Triborough Law, its prior collective bargaining agreement with the City (which expired on June 30, 2009) was "in effect" on January 9, 2010 and thereafter. Thus, the Union was entitled to the Section 8 exception in Tier V, which would require the new members to be placed in a non- contributory plan. F or the reasons stated herein, this argument is wrong. Moreover, even if it was correct in theory, it is an argument properly advanced in a lawsuit against the System - the entity that can grant such relief. The City is powerless to affect the Tier placement of its employees in the PFRS. The Union repeatedly states in its Brief that under the Section 8 exception, the three percent (3%) pension contribution is required to be paid by the City. Respondent-Appellant's Brief, p. 1, 15, 23. However, if the Section 8 exception is applicable, then the statute only states that the new members': "eligibility . . . to join a special retirement plan ... open to him or her pursuant to a collectively negotiated agreement ... ," shall not be limited. (R. 400). Indeed, in other places in its Brief, the Union recognizes the distinction and properly paraphrases the remedy if the Section 8 exception is applicable: "If the terms of the CBA are 'in effect' on January 9, 2010, then any member of the Union may join a special 56 retirement plan contained in the parties' CBA." Respondent-Appellant's Brief, p. 16. In quoting the Governor's Program Bill for the Tier V legislation, the Union states: Section 8 of Part A of the Bill [the Section 8 exception] would provide that members of a [ union] that are eligible to join a special retirement plan pursuant to a collectively negotiated agreement . . . would be able to continue to enroll in that special plan ... until the date on which such agreement terminates. Respondent-Appellant's Brief, p. 23 (emphasis added). The City has no control over the members' enrollment in a plan. This is determined by the System, and in this case, the System rejected the new members' efforts to be placed in a non-contributory plan. Thus, any claims that the Section 8 exception applies to the new members should have been pursued against the System. Second, the Union argues that even if the Section 8 exception language does not allow the new members entry into a non-contributory plan under Article 15:0 of the Agreement, the City should be required to pay, or reimburse, the three percent (3 %) pension contributions. For the reasons stated herein, such relief is not permissible under CSL § 201(4) and RSSL § 470. As the Union stated at page 12 of its Brief to this Court: "[A] stay of arbitration is reserved for disputes involving a public policy of the first magnitude." In re Union Free Dist. #15, Town of Hempstead v. Lawrence 57 Teachers Ass'n, 33 A.D.3d 808, 808, 822 N.Y.S.2d 767 (2d Dep't 2006). With the State and so many local municipalities, especially the City, continuing to be mired in fiscal crises, the instant dispute surely cannot qualify as anything other. For all the foregoing reasons, the Appellate Division, Second Department's decision to permanently stay the arbitration at issue should be affirmed. Dated: Garden City, New York August 15, 2012 Respectfully submitted, BOND, SCHOENECK & KING, PLLC BY:_~ _ · _'~_I_,' _. ~_ Christopher T. Kurtz Terry O'Neil Attorneys for Petitioner-Respondent 1399 Franklin Avenue, Suite 200 Garden City, New York 11530 Telephone: (516) 267-6300 58 STATE OF NEW YORK SUPREME COURT In the Matter of the Application of THE BUFFALO NIAGARA AIRPORT FIREFIGHTERS ASSOCIATION and KAMALI DAVIS, JESSICA DEVINNEY, MICHAEL GUERRA, RUSSELL, JACKMAN II, ROBERT KAMINSKI, ANDREW LAFORCE, JOHN MAKIN, WALTER PIECZYNSKI, JESSICA STROM, and MARK WOJNAR, Petitioners, -against- THOMAS P. DINAPOLI, in his official capacity as COMPTROLLER OF THE STATE OF NE\V YORK, THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM and THE NIAGARA FRONTIER TRANSPORTATION AUTHORITY, Respondents. COUNTY OF ALBANY ORDER and JUDGMENT INDEX NO. 483-2011 For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules. (Supreme Court, Albany County, Special Tenn, April 1, 2011) (Hon. Eugene P. Devine, J.S.C., presiding) APPEARANCES: Paul D. Weiss, Esq. Bartlo, Hettler & Weiss 22 Victoria Blvd. Kerunore, New York 14217 Attorney for Petitioners Eric T. Sclmeidennan Attorney General of the State of New York By Charles J. Quackenbush, Assistant AttOlney General The Capitol Albany, New York 12224 Attorney for Respondents New York State Comptroller Thomas P. DEVINE, J.: DiNapoli and the New York State & Local Employees' Retirement System . Wayne R. Gradl, Esq. Niagara Frontier Transportation Authority 181 Ellicott Street Buffalo, New York 14203 . Petitioner, the Buffalo Niagara Airport Firefighters Association (hereinafter the union), and certain of its members, commenced this proceeding to challenge respondent Thomas P. DiNapoli, as Comptroller of the State of New York, and respondent New York State and Local Employees' Retirement System's (herein~fter NYSLRS) determination that petitioners did not fall under a statutory exception that would pennit petitioners to enroll in a non-contributory state retirement benefits plan and the directive to the union members' employer, respondent Niagara Frontier Transportation Authority (hereinafter NFTA), to withhold 3% of petitioners , annual wages. Following the denial of their nlotion to dismiss, respondents have served a verified answer. The Court heard oral argument on the matter on November 14, 2011. The facts underlying this proceeding, as previously cited in the Court's decision and order on respondents' dismissal 1110tion, are that the NFTA and petitioners had entered into a 2008- 2009 collective bargaining agreement (hereinafter 2008-2009 CBA) which adopted enhanced benefit plans pursuant to Retirement and Social Security Law § 384-d and § 384-e, which are non-contributory. On July 1, 2009, legislation that would have extended enrollment into Tier II of the Police and Firefighters Retirement System (hereinafter PFRS) was vetoed by then- Governor Paterson, thereby closing Tier II on that date. New PFRS members, who joined on or after July 1, 2009, were covered by RSSL Article 14, lmown as Tier Irr. According to Philomena Gilchrist, the Assistant Director ofNYSLRS' Member and Employers Services Bureau, members of Tier ill "electing special retirement plans or for whom an employer had elected a one year final average salary benefit were required to contribute three percent of wages to the funding of benefits.,,1 Subsequently, additional amendments to the RSSL were made by the enactment of Chapter 504 of the Laws of2009, primarily the creation of a new Tier V, into which tier petitioners DeVinney, Guerra, Jackman, Kaminski, Makin, Pieczynski and Strom, having joined the retirement system between July 1,2009 and January 8,2010, enToIled by filing the requisite fonn. On their election fonns, petitioners wrote that such mandatory election was made "under protest with all rights reserved," thereby preserving their rights to placelnent in a non- contributory plan as it had not been confirmed that they would be deelned to be non-contributory enrollees.2 Effective January 9,2010, the newly created Tier V law required a 3% salary contribution from participating melnbers, among other things, but also included a narrow exception which stated that: ''Notwithstanding any provision of law to the contrary, nothing in this act shall limit the eligibility of any meluber 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 any agreement remains in effect thereafter; provided, however, that any such eligibility shall not apply upon tennination of such agreement for employees otherwise subject to the provisions of article twenty-two oft~e retireluent and social security law.,,3 In October 2010, NYSLRS infonned the NFTA, in writing, that "[b]ased on our review of the contract you provided for the Buffalo Niagara Airport Firefighters Association, permanent I Gilchrist Affidavit, at ~ 3. 2 Petitioners Davis, Laforce and Wojnar automatically became members of Tier Vas they entered the systeln in Septelnber 2010. 3 L 2009, eh. 504, Part A. Aircraft, Rescue and Firefighting Officers in full pay status hired by the [NFT A] after January 9, 2010" would be required to make a.three percent salary contributions because the 2009-2013 . CBA had been "ratified late, on August 20,2010.,,4 The letter also stated that members "hired between 7/1/2009 and 1/8/2010 had 120 days to elect to be covered by the benefits of Article 22, Tier 5," thereby giving the members contributory status. Petitioners disputed this finding and insisted that, although the 2008-2009 CBA had expired on April 1, 2009, the 2009-2013 CBA was later ratified on August 20, 2010 and its provisions were 'in effect' retroactively. Therefore, because a·collective bargaining agreement was in effect on the effective date of the Tier V legislation and it obligated the NFTA "to provide retirement benefits pursuant to RSSL sections 384-d and 384-e," petitioners assert that they are entitled to an order annulling NYSLRS' erroneous detennination that petitioners did not come under the exception created under section 8 of the Tier V.statute and, furthermore, that the NFTA cease its withdrawal of three percent of petitioners' wages and return the collected monies to petitioners. The question before the Court, namely the meaning of the tem1 "in effect," is one of statutory construction and analysis, "dependent only on accurate apprehension of legislative intent."s "The legislative intent is to be ascertained fronl the words and language used, and the statutory language is generally construed according to its natural and most obvious sense, without resorting to an artificial or forced construction."6 4 Petition, at Exhibit r. 5 Guido v New York State Teachers' Retirement System, 94 NY2d 64,68 [1999J. 6 Excellus Health Plan, Inc. v Serio, 303 AD2d 864, 867 [3d Dept. 2003], affd 2 NY3d 166 [2004], quoting McKinriey's Cons Laws of NY, Book 1, Statutes § 94. Petitioners make two arguments; first, that the 2009-2013 CBA's terms were in effect retroactively to April 1, 2009, therefore, being in effect on January 9, 2010 as required by section 8 of the Tier V legislation and, alternatively, that the terms of the 2008-2009 CBA continued to be "in effect" past its expiration date of March 31, 2009 under the Triborough doctrine. Generally, the Triborough principle ensures that the status quo is lnaintained while parties to an expired collective bargaining agreement attempt to reach a new contract. The common law rule was later codified in statute, under Civil Service Law § 209-a (l) (e), making it an improper practice for public employers to refuse to continue to honor "the terms of an expired agreement until a new agreement is negotiated." The Court of Appeals has held that the "practical effect of continuing all the temlS of a CBA during the status quo period is that mutual obligations are inlposed on both en1ployers and employees." Inlportantly, however, the Trihorough doctrine does not bind or otherwise obligate anyone beyond the contracting parties, including NYSLRS or Comptroller DiNapoli, rendering petitioners' argument regarding the 2008-2009 CBA unpersuasi ve. The exception language contained in section 8 of the Tier V legislation indicates that the legislature intended to liInit eligibility for non-contributory status to those members who had a collective bargaining agreement actually in effect on January 9,2010 and did ,not include a future agreement that mayor may not materialize several months later. Specifically, the legislature honored existing agreements that provided for non-contributory status for its members that existed at the tiIne the legislation took effect and provided that, once the existing agreements, if any, expired, the covered member would be "otherwise subject to the provision of article twenty- two of the retirement and social security law," including the requirement to make annual income contributions toward their pensions. Therefore, respondents' detelmination that the individually named petitioners did not qualify under the exception language as there was no existing, non- expired CBA at the tiIne the statute became effective is deemed to be rationally based and free, 'from any flawed statutory interpretation and application, the petition must be dismissed.' Accordll1gly, it is ORDERED and ADJUDGED that the petition is dismissed and the relief requested therein is denied. This Melnorandum shall constitute both the Order and Judgment of the Court. This original ORDER and JUDGMENT is being sent to the Attorney General. The signing of this ORDER and JUDGMENT shall not constitute entry or filing under CPLR 2220. Legal counsel for the respondent is not relieved from the applicable provisions of that section with respect to filing, entry and notice of entry. PAPERS CONSIDERED: 1. Notice of Petition, Verified Petition, with exhibits, and Memorandum of Law in SuppOli of Petition, dated January 24, 2011. 2. Verified Answer of Respondent Niagara Frontier Transportation Authority, dated February 17, 2011. 7 see e.g. Matter of Nicit v Regan, 199 AD2d 606, 608 [3d Dept. 1993], Iv denied 83 NY2d 753 [1994]. 3. Verified Answer of Respondents Thomas P. DiNapoli and the New York State & Local Employees' Retirenlent System, dated July 21,2011. 4. Affidavit of Philomena Gilchrist, dated July 20,2011. 5. Memorandum of Law in Opposition to the Petition, dated July 21, 2011. 6. Letter from Charles J. Quackenbush, Esq., dated January 3,2012. 7. Letter from Paul D. Weiss, Esq., dated January 4,2012.