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: RICHARD S. CORENTHAL (Time Requested: 30 Minutes) Westchester County Clerk’s Index No. 28797/10 Court of Appeals of the 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. REPLY BRIEF FOR RESPONDENT-APPELLANT MEYER, SUOZZI, ENGLISH & KLEIN, P.C. Attorneys for Respondent-Appellant 1350 Broadway, Suite 501 New York, New York 10018 Tel.: (212) 239-4999 Fax: (212) 239-1311 Date Completed: September 4, 2012 TABLE OF CONTENTS Page i PRELIMINARY STATEMENT ............................................................................... 1 ARGUMENT ............................................................................................................. 2 I. NEW YORK STATE COURTS FAVOR ARBITRATION OF LABOR DISPUTES ........................................................................ 2 II. THE CITY’S CLAIM THAT THE UNION SHOULD HAVE SUED NEW YORK STATE’S RETIREMENT SYSTEM IS ERRONEOUS.................................................................. 6 III. THE CBA IS STILL IN EFFECT PURSUANT TO CIVIL SERVICE LAW § 209-a(1)(e), THE TRIBOROUGH DOCTRINE AND TIER 5 LEGISLATION ......................................... 9 IV. THE APPELLATE DIVISION INCORRECTLY HELD THAT ARBITRATION OF THIS MATTER IS BARRED BY STATUTE ..................................................................................... 10 a. CSL § 201.4 Is Not Applicable to this Matter and Does Not Require That A Stay of Arbitration Be Issued......................................................................................... 10 b. RSSL § 470 Is Not Applicable to this Matter and Does Not Require That A Stay of Arbitration Be Issued......................................................................................... 15 V. THE UNION’S IMPAIRMENT OF CONTRACT ARGUMENT IS NOT A “NEW ARGUMENT/THEORY” .............. 16 CONCLUSION ........................................................................................................ 21 ii TABLE OF AUTHORITIES Page(s) CASES Association of Surrogates & Supreme Court Reporters v. State, 79 N.Y.2d 39 (1992) ..................................................................................... 17, 18 Bingham v. New York City Trans. Auth, 99 N.Y.2d 355 (2003) ........................................................................................... 7 Board of Education of Dover UFSD v. Dover-Wingdale Teachers’ Ass’n, 61 N.Y.2d 913 (1984) ........................................................................................... 2 Board of Education of Norwood-Norfolk Cent. School Dist. v. Hess, 49 N.Y.2d 145 (1979) ........................................................................................... 2 Board of Education of Union Free School Dist. No. 3, Town of Huntington v. Associated Teachers of Huntington, Inc., 30 N.Y.2d 122 (1972) ........................................................................................... 2 Board of Education of Yonkers City School Dist. v. Yonkers Fed’n of Teachers, 40 N.Y.2d 268 (1976) ........................................................................................... 2 Buffalo Niagara Airport Firefighters Ass’n v. DiNapoli, Index No. 483-2011 (Sup. Ct. Albany Cty. 2011) .................................... 8, 12, 13 City of Batavia Firefighters, Int’l Ass’n of Firefighters, Local 896, 17 PERB ¶ 3007 (1984) ...................................................................................... 12 Civil Service Employees Assoc., Inc., Niagara Chapter & Town of Niagara, 14 PERB ¶ 3049 (1981) ................................................................................ 11, 12 Matter of Arbitration between City of Oswego and Oswego City Firefighters Ass’n, Local 2707, 93 A.D.3d 1243 (4th Dept. 2012) ................................................................ passim Matter of the Arbitration between City of Plattsburgh and Plattsburgh Police Officers Union AFSCME Local 82, 250 A.D.2d 327 (3d Dept. 1998) ........................................................................ 16 iii Matter of Old Brookville Policemen’s Benevolent Assoc. and Incorporated Village of Old Brookville, 16 PERB ¶ 3094 (1983) ...................................................................................... 15 Matter of Port Washington Union Free School Dist. v. Port Washington Teachers Ass’n, 45 N.Y.2d 411 (1978) ........................................................................................... 4 Matter of Sprinzen [Nomberg], 46 N.Y.2d 623 (1979) ........................................................................................... 5 Matter of Vill. of Fairport v. Newman, 90 A.D.2d 293 (4th Dep’t 1982) ......................................................................... 13 Matter of Westfall v. City of Cohoes, 86 CV 817, 1988 U.S. Dist. LEXIS 6925 (N.D.N.Y. July 11, 1988) .......... 14, 15 New York City Transit Authority v. Transp. Workers Union of Am., 99 N.Y.2d 1 (2002) ............................................................................................... 2 United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) .............................................................................................. 2 United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574 (1960) .......................................................................................... 2, 3 Watervliet PBA, 16 PERB ¶ 3026 (1983) ...................................................................................... 12 STATUTES Civil Service Law § 201(4) ...............................................................................passim CPLR Article 78 ......................................................................................................... 7 RSSL § 384 .............................................................................................................. 12 RSSL § 470 .................................................................................................. 11, 15, 16 PRELIMINARY STATEMENT This reply brief is respectfully submitted on behalf of Respondent-Appellant Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO (“Appellant” or “Union”) in support of its appeal from the decision and order of the Appellate Division, Second Department, and in response to the brief for Petitioner-Respondent City of Yonkers (“Respondent” or “City”). The Appellate Division, Second Department erred by holding that the collective bargaining agreement (“CBA”) between the parties was no longer ‘in effect’ on July 1, 2009, and that arbitration of this dispute is barred by statute. Close review of Respondent’s brief reveals an unwillingness to address key arguments raised by the Union. In fact, the City spends very little time addressing or distinguishing the key case, Matter of Arbitration between City of Oswego and Oswego City Firefighters Ass’n, Local 2707, 93 A.D.3d 1243 (4th Dept. 2012), wherein the Fourth Department examined the same statute in the same context as in the instant matter, but reached a different legal conclusion. As explained below, the result reached by the lower court contravenes the plain language of the Triborough Law and the intent of the New York State Legislature, and it directly conflicts with this Court’s past precedent. For all the reasons explained below as well as those in the Union’s brief dated July 2, 2012, the lower court’s decision and order should be reversed. 2 ARGUMENT I. NEW YORK STATE COURTS FAVOR ARBITRATION OF LABOR DISPUTES While Respondent tries to complicate this issue, it is actually very straightforward: pursuant to the CBA, the Union is seeking to go to arbitration to enforce its rights under Article 15 of the CBA, which explicitly requires the employer to continue to pay the full cost of pension contribution to the N.Y.S. Police and Fire Retirement System (“PFRS”). In the Union’s initial brief, Point I of the Argument section, it cites to numerous cases and holdings regarding New York State courts’ deferential policy towards arbitration, particularly where there is a mutually negotiated collective bargaining agreement. See, e.g. New York City Transit Authority v. Transp. Workers Union of Am., 99 N.Y.2d 1, 7-8 (2002) (citing United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574 (1960)); Board of Education of Dover UFSD v. Dover-Wingdale Teachers’ Ass’n, 61 N.Y.2d 913, 915 (1984); Board of Education of Yonkers City School Dist. v. Yonkers Fed’n of Teachers, 40 N.Y.2d 268, 273 (1976); Board of Education of Union Free School Dist. No. 3, Town of Huntington v. Associated Teachers of Huntington, Inc., 30 N.Y.2d 122, 131 (1972); Board of Education of Norwood- Norfolk Cent. School Dist. v. Hess, 49 N.Y.2d 145 (1979); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960). 3 In its opposition brief, Respondent utterly failed to cite or distinguish any of the above cited cases which were included in Appellant’s brief. As a result, the City essentially concedes that this Court has overwhelmingly rejected contentions by public employers that particular issues fall outside the scope of permissible grievance arbitration. Ironically, on the second to last page of its brief, Respondent concedes that “a stay of arbitration is reserved for disputes involving a public policy of the first magnitude”, but makes no effort to challenge the Union’s position that the issue before this Court falls within the confines of the arbitration clause in the parties’ mutually negotiated CBA. Rather, the City alleges, without citing to any case law, that arbitrators “should not be interpreting [] complex legislative provisions . . . as this would invariably lead to inconsistent Statewide results.” (Respondents’ Brief at 43). This is baseless. Arbitrators, especially in public sector labor matters, are well versed in labor disputes that stem from collective bargaining agreements, and they are constantly interpreting complex statutes which are relevant to the contract. Warrior & Gulf Nav. Co., 363 U.S. at 582 (“The labor arbitrator is usually chosen because of the parties' confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment.”). Arbitrators’ decisions are rarely overturned in a judicial forum. Respondent essentially seeks to obliterate 4 fifty years of Court of Appeals precedent wherein courts trust and defer to arbitrators, particularly in labor disputes, regardless of how complex. Moreover, in City of Oswego, 93 A.D.3d at 1246-47, the Fourth Department correctly held that there is no reason why an arbitrator cannot determine if Article 22 “applies to a previously negotiated agreement.” In affirming the arbitrator’s award in favor of the Oswego Firefighters, the Fourth Department held that “the [arbitration] award herein [interpreting Article 22] is not contrary to existing statutes, does not violate a strong public policy and is not irrational.” City of Oswego, 93 A.D.3d at 1246 (citations omitted). Thus, Respondent’s belief that arbitrators should not be interpreting “complex” legislative provisions was explicitly rejected by the Fourth Department regarding the exact statute Respondent is concerned about here. In fact, in footnote 6 on page 28 of its brief, Respondent acknowledges that the grievance brought by the Union in this matter involves the same issue that the arbitrator decided, and the Fourth Department affirmed, in City of Oswego. The public policy doctrine has rarely been applied to stay arbitration because of the countervailing policy in favor of arbitration as an expeditious and economical alternative method of resolving legal disputes. Before courts may intervene to stay arbitration, the public policy at issue must be “a strong one, amounting to gross illegality or its equivalent”, generally to be found in a “readily identifiable source in the statutes or common-law principles.” Matter of Port 5 Washington Union Free School Dist. v. Port Washington Teachers Ass’n, 45 N.Y.2d 411, 422 (1978). The conflict also has to be clear cut. The public policy barring arbitration must: prohibit, in an absolute sense, particular matters being decided . . . by an arbitrator. Stated another way, the courts must be able to examine an arbitration agreement . . . on its face, without engaging in extended fact-finding or legal analysis, and conclude that public policy precludes its enforcement. Matter of Sprinzen [Nomberg], 46 N.Y.2d 623, 631 (1979). In the instant case there is no public policy so strong that it “prohibit[s], in an absolute sense,” staying arbitration of the issues surrounding Article 22 and the parties’ CBA. Thus, there is no reason to prevent a skilled labor arbitrator from interpreting the parties’ CBA in order to decide this matter. Moreover, the City’s claims are at best premature. The City can make its pitch to the arbitrator and, if unhappy with the outcome, can move to vacate an award that it believes conflicts with public policy or statutory law. Indeed, in the instant case, Justice Smith herself stated that: Arbitration long has been favored as an alternative means for resolution of legal disputes, and while there is an exception to the foregoing for what may be considered public policy considerations, this exception is to be exercised by the courts with extreme restraint, particularly where, as here, at issue is arbitration required under collective bargaining agreements. 6 (R. 11) (emphasis added). Justice Smith emphasized that the Taylor Law was adopted “for the very purpose of encouraging public employers and employee organizations to agree upon dispute resolving measures.” Id. Based upon the Taylor Law, the New York State Court of Appeals and Justice Smith’s Order, arbitration is the appropriate and agreed upon tribunal to resolve the pending issues between the parties and the lower court’s decision and order must be reversed. II. THE CITY’S CLAIM THAT THE UNION SHOULD HAVE SUED NEW YORK STATE’S RETIREMENT SYSTEM IS ERRONEOUS The plain language of the CBA, Article 15, provides that the City shall pay the full cost of pension contributions to the PFRS for all members of the Union. The City’s obligation under the CBA to pay the full amount of retirement contributions dates back to at least the 1986 collective bargaining agreement. (R.330). Given the fact that the parties have a broad arbitration clause in the CBA which covers the interpretation of provisions in the CBA, arbitration of this dispute (Article 15 of the CBA) between the City and the Union is not just appropriate, but mandated. (R. 61) (“In the event of a dispute between the parties to this Agreement involving the interpretation or application of any provision of this Agreement, either party shall have the right to solve the dispute” by “submit[ting] the grievance to arbitration.”). As such, the Union properly brought a grievance against the City pursuant to the parties’ CBA. 7 The City now claims for the first time that the Union “should have filed a CPLR Article 78 special proceeding challenge against the [PFRS] System, not pursued a grievance and/or the Charge against the City.” (Respondent’s Brief at 22). This appears to be the first time Respondent is raising this argument as it was not included in its Appellate brief, was not included in its Opposition to the Motion for Leave to Appeal and is not an issue pending before this Court. According to the New York Court of Appeals: As we have many times repeated, this Court with rare exception does not review questions raised for the first time on appeal. Unlike the Appellate Division, we lack jurisdiction to review unpreserved issues in the interest of justice. A new issue--even a pure law issue--may be reached on appeal only if it could not have been avoided by factual showings or legal countersteps had it been raised below. Bingham v. New York City Trans. Auth, 99 N.Y.2d 355, 359 (2003). The City did not mention this argument in the lower courts and should be precluded from raising it now. The City conveniently ignores the fact that it was the City that brought this action in state court, seeking to stay an arbitration which is mandated by the parties’ CBA. Moreover, the City did not appeal or object to an order by the Public Employment Relations Board deferring the Union’s improper practice charge to arbitration. 8 In support of its position, Respondent cites to Buffalo Niagara Airport Firefighters Ass’n v. DiNapoli, Index No. 483-2011 (Sup. Ct. Albany Cty. 2011) for the proposition that the Union should have sued the PFRS, and not the City. Importantly, unlike this case, the Buffalo Niagara court makes no mention of an arbitration clause in the parties’ CBA, and in particular, a broad arbitration clause which would cover the interpretation of CBA provisions. It is unclear from the decision whether the parties had an arbitration clause in their collective bargaining agreement. Moreover, this case actually supports the Union’s position as it shows that the PFRS was the wrong party to sue; the Buffalo Niagara court specifically stated that the Triborough Doctrine was inapplicable to the case because “the Triborough doctrine does not bind or otherwise obligate anyone beyond the contracting parties, including NYSLRS or Comptroller DiNapoli.” Since the Union’s primary argument is that the CBA is still in effect pursuant to the Triborough Doctrine, the City was the correct party to sue in this case, not the PFRS.1 1 The court in Buffalo Niagara misinterpreted the Triborough Doctrine by stating that it applies to agreements “actually in effect” and “did not include a future agreement that may or may not materialize several months later.” Under the Triborough Law, the terms of the expired collective bargaining agreement remain “in effect” until a subsequent agreement is negotiated. 9 III. THE CBA IS STILL IN EFFECT PURSUANT TO CIVIL SERVICE LAW § 209-a(1)(e), THE TRIBOROUGH DOCTRINE AND TIER 5 LEGISLATION While Respondent attempts to complicate the issue before this Court, it is actually very simple. Both parties agree that pursuant to the grandfather clause, Article 22 of the RSSL, Article 15 of the CBA is enforceable if the CBA between the parties was in effect on January 10, 2010. If the CBA was “in effect” on that date, then the employer is obligated to pay pension costs, in full, pursuant to Article 15 of the negotiated CBA. Based upon the Triborough Law, and its interpretation by New York State Courts, it is Appellant’s position that the contract was in effect on January 10, 2010. Nevertheless, even if there were concerns regarding the interpretation of the CBA, the matter should be decided before the parties’ mutually selected arbitrator, based upon PERB’s Order of Deferral. (R. 226-27). In its brief, Respondent attempts to create a confusing and dubious distinction between the “terms” of a CBA and the CBA itself (see Respondent’s Brief at 45: “a collective bargaining agreement can expire but only its terms must continue at law” (emphasis in original)). It appears that Respondent’s position is that Article 22 relates to “agreements” that are in effect, and not the “terms” of the agreement, and thus, while only the terms continue, the agreement is no longer in effect. There is no case which examines this alleged and baseless distinction. A 10 contract is nothing more than a collection of its terms and conditions, which represents the agreement between the parties. However, even assuming Respondent’s flawed interpretation is correct and that only the terms of the parties’ CBA are “in effect” (R. 19), Appellant has every right to seek arbitration to address a contract violation regarding the terms of the CBA. Indeed, the Union’s improper practice charge alleged that the City “failed to continue and apply the terms of Article 15 of the CBA to Firefighters hired by the City after July 1, 2009 in violation of the Triborough Law.” (R. 118-22) (emphasis added). Therefore, even if Respondent’s flawed theory was correct, Appellant would still have a valid cause of action and be entitled to go to arbitration. IV. THE APPELLATE DIVISION INCORRECTLY HELD THAT ARBITRATION OF THIS MATTER IS BARRED BY STATUTE a. CSL § 201.4 Is Not Applicable to this Matter and Does Not Require That A Stay of Arbitration Be Issued CSL § 201.4 states that: 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. (emphasis added). Respondent alleges that pursuant to CSL § 201.4, “the parties are prohibited by law from negotiating or agreeing to any contract language that 11 alters the retirement plans’ mandated benefits and contributions.” (Respondent’s Brief at 30). However, Appellant in this case is not seeking to negotiate over retirement benefits. Appellant is seeking arbitration of its grievance to enforce Article 15 of the CBA (R. 49-50), which requires the City to pay 100% of pension contributions, consistent with PERB’s Order deferring the case to arbitration. As the Fourth Department correctly found in City of Oswego, a “determination to apply the Section 8 exception in this case does not constitute a ‘negotiation’ of retirement benefits as prohibited by Civil Service Law § 201(4) and [RSSL] § 470.” 93 A.D.3d at 1246. As Justice Smith correctly found (R. 12-13), Respondent’s citation to Civil Service Employees Assoc., Inc., Niagara Chapter & Town of Niagara, 14 PERB ¶ 3049 (1981) is inapposite. (R. 197). In Town of Niagara, the union alleged that the employer violated “its duty to negotiate in good faith by insisting upon the negotiation of nonmandatory subjects of negotiation.” (R. 197-98). In the instant case, the parties are not at the negotiating table, and the Union is not requesting the City negotiate over retirement benefits. Rather, Appellant is seeking to redress a grievance based upon the terms of the CBA and Respondent’s failure to adhere to the CBA. It is disingenuous to compare the instant case with a case involving bargaining demands. Without any explanation, Respondent claims Niagara is similar to the instant case because although the parties in Niagara were at the 12 bargaining table, “it was not a bargaining proposal to put language into a contract for the first time.” (Respondent’s Brief at 32). However, Respondent is missing the key point and the obvious distinction between this case and Niagara. In Niagara, PERB did not hold that the retirement provision (which required the employer to pay in full) was unlawful or could not be continued under any circumstances; rather, PERB held that the retirement provision involved a nonmandatory subject of negotiation, and thus, the union could not insist upon its negotiation. (R. 197-98). In the instant case, Appellant is asking that the CBA be enforced; it is not asking that the City negotiate the contract. Thus, Niagara is inapplicable. Moreover, the twenty-year special retirement plan outlined in Article 15:01.01 of the CBA--RSSL § 384-d--is a mandatory subject of negotiation under the Taylor Law. (R. 49-50); City of Batavia Firefighters, Int’l Ass’n of Firefighters, Local 896, 17 PERB ¶ 3007 (1984); Watervliet PBA, 16 PERB ¶ 3026 (1983). Similarly, the special retirement plan involving the 1/60th provision, outlined in Article 15:01.02 of the CBA--RSSL § 384-e--specifically authorizes the union to make a demand for this pension benefit in “collective negotiations”. See RSSL § 384-e(c) (R. 49-50). Second, Niagara is not “directly on point.” (Respondent’s Brief at 32). Unlike Town of Niagara, in the instant case, the Legislature has specifically stated, via Article 22, that any contract “in effect” in January 2010 is grandfathered and 13 trumps Tier 5 of the RSSL, and allows the parties to maintain the previously negotiated retirement provisions. The grandfather clause applies to the parties’ CBA and permits members to be covered by a special retirement plan without any contributions, as provided for in the parties’ CBA, Article 15 (R. 49-50); Niagara had no such clause. As Appellant itself conceded, the terms of the parties’ CBA are “in effect” and thus, Respondent has every right to seek arbitration to address a contract violation. (R. 19). The City also alleges that “the Union is attempting to use contract language . . . to essentially eliminate the statutorily-mandated three percent (3%) employee pension contribution.” (Respondent’s Brief at 33). This is a distortion of the facts; rather, based upon the Taylor Law, the New York State Court of Appeals, City of Oswego and Justice Smith’s Order, the Union is seeking to go to arbitration, which is the appropriate and agreed upon tribunal, to resolve a dispute between the parties regarding a provision of the CBA. It is for the arbitrator, not the City and not the Union, to interpret Article 15 of the CBA. Even assuming Appellant was asking Respondent to negotiate a contract, the courts have long recognized that the New York State Constitution does not prohibit parties to a CBA from agreeing to changes in retirement benefits. See Matter of Vill. of Fairport v. Newman, 90 A.D.2d 293, 295 (4th Dep’t 1982) (holding that retirement and pension benefits, once conferred, are not “carved in stone.”). 14 Respondent does not adequately distinguish Matter of Westfall v. City of Cohoes, 86 CV 817, 1988 U.S. Dist. LEXIS 6925 (N.D.N.Y. July 11, 1988), which is directly on point, except to say that “certain non-State-approved benefit plans of public employers who happen to participate in the PFRS can be negotiable” (Respondent’s Brief at 37). There is no basis for this distinction. In Westfall, the United States District Court in the Northern District of New York addressed a similar issue, and explicitly concluded that “with respect to employers participating in the New York State Police and Fire Retirement System and their employees, the prohibition contained in § 201(4) does not apply.” Id. at *9 (N.D.N.Y. July 11, 1988) (emphasis added)(copy at R. 367-372). The court found that the retirement benefit exclusions of Section 201(4) of the Civil Service Law are not applicable because there is an exception which allowed participating employers in New York State Policemen’s and Firemen’s Retirement System and their employees to continue to enjoy the right to negotiate with respect to any benefit provided, including retirement and pension benefits. Id. The State Legislature periodically extended this exception until July 1, 2009. (See R. 380- 81). Thus, collective bargaining agreements addressing retirement or pension benefits are valid if negotiated prior to July 1, 2009. Article 15 of the parties’ collective bargaining agreement was negotiated at least as far back as the 1986 15 collective bargaining agreement. (R. 330). Assuming arguendo that payment of retirement contributions even falls within Section 201(4) of the Civil Service Law, under the reasoning of Westfall and the legislative history described therein, the restrictions in Section 201(4) of the Civil Service Law do not apply to this case. Respondent cannot avoid Westfall’s mandate and this exception in the law which holds that the negotiation of retirement benefits does not violate Section 201(4) of the Civil Service Law. Therefore, contrary to Respondent’s arguments, there are no statutes or constitutional provisions prohibiting arbitration of Appellant’s grievance. b. RSSL § 470 Is Not Applicable to this Matter and Does Not Require That A Stay of Arbitration Be Issued Similar to CSL § 201.4, RSSL § 470 is inapplicable. RSSL § 470 prohibits public employers and employees from negotiating with respect to any benefit provided by any public retirement system. As outlined above, Appellant is not seeking to negotiate any retirement benefits with Respondent; Appellant, pursuant to Article 22 and the Taylor Law, is seeking to enforce its rights under the negotiated CBA, which the legislature expressly grandfathered under Article 22. Moreover, according to PERB, requiring employees to pay an increase in retirement costs is a “mandatory subject of negotiation” and there is no “statutory, decisional or administrative prohibition” regarding such negotiation. Matter of Old Brookville Policemen’s Benevolent Assoc. and Incorporated Village of Old 16 Brookville, 16 PERB ¶ 3094 (1983)(R. 373-79) (internal citations omitted). See also Matter of the Arbitration between City of Plattsburgh and Plattsburgh Police Officers Union AFSCME Local 82, 250 A.D.2d 327, 329 (3d Dep’t 1998) (“…the supplemental payments at issue are not statutorily prohibited as they do not affect the benefit the employee will receive from the retirement system nor do they impose any obligation upon the retirement system since the benefit will be paid by petitioner [municipality].”). Similarly, in this case, Respondent’s payment of the full amount of pension contributions “does not affect the benefit” firefighters will receive from the retirement system. Nor does it impose any obligations on the retirement system since the contributions will be paid by the City. As the Fourth Department correctly held, “a determination to apply the Section 8 exception in this case does not constitute a ‘negotiation’ of retirement benefits as prohibited by . . . [RSSL] § 470.” City of Oswego, 93 A.D.3d at 1246. V. THE UNION’S IMPAIRMENT OF CONTRACT ARGUMENT IS NOT A “NEW ARGUMENT/THEORY” As Appellant alleged in its initial brief to this Court, if the Appellate Division, Second Department’s decision is affirmed, it will result in the tangible constitutional impairment of Union members’ rights under the CBA by the City of Yonkers. The effect of the impairment is a 3% loss of salary for those employees hired on or after January 9, 2010. That reduction in salary is not reasonable and necessary to accomplish a legitimate public purpose. 17 On page 49 of Respondent’s brief, the City alleges that the Union is raising an unconstitutional impairment of contract argument “for the first time on appeal to this Court.” This is incorrect. In the Union’s brief to Supreme Court Justice Mary Smith, the Union wrote: According to the Association of Surrogates & Supreme Court Reporters v. State, 79 N.Y.2d 39, 45 (1992), the Triborough Law: “extends[s] the contract, thereby affording plaintiffs protection under the Contract Clause of the Federal Constitution. To hold otherwise would mean that the State would be bound by the terms of an expired collective bargaining agreement only so long as it wished to be bound. In the Union’s brief to the Appellate Division, it cited the same case for the same proposition. Contrary to Respondent’s allegation, the Union did in fact raise this argument in its Motion for Leave to Appeal: 23. The Surrogates Court found that if the state disregarded the Triborough Law, it would be in violation of the Constitution, which provides that no state shall pass any law “impairing the Obligation of Contracts.” U.S. Const. art. 1, § 10. 79 N.Y.2d at 45. Similarly, if the CBA in the instant case is not grandfathered, Article 22 would run afoul of the Contract Clause of the U.S. Constitution since it is impairing the parties’ mutually agreed upon contract. Laws impairing contractual rights are prohibited by the Contract Clause of the United States Constitution (art I, § 10, cl [1]). A threshold finding of impairment precipitates inquiry into whether the legislation substantially impairs a contractual right. Should an impairment be more than minimal, the court must then carefully examine the nature and purpose of 18 the legislation, considering not only the benefit to the community but also the contractual rights of those claiming a violation of the Constitution's Contract Clause. See Association of Surrogates, 79 N.Y.2d at 46. In its decision, the Appellate Division failed to address this significant constitutional issue, which was raised both at oral argument and in Appellant’s brief to the Appellate Division. Moreover, the City itself raised this argument in its reply brief to the Appellate Division. In Respondent’s reply brief, it acknowledged that the Legislature enacted the Section 8 exception “so as to avoid constitutional contractual infringement issues.” (City’s Appellate Reply Brief at 7). Thus, both sides agree that the Legislature created this specific exception in Article 22 so as not to run afoul of the Constitution. The Section 8 exception was added to Article 22 to prevent the State from impairing contracts, in violation of the Contract Clause. As such, the Section 8 exception must be read to include agreements such as the one before this Court, which are in effect under the Triborough Law; otherwise, it would run afoul of the Contract Clause of the U.S. Constitution since it would impair the parties’ mutually agreed upon contract. Notably, in enacting Tier 6 on March 15, 2012, the Legislature included an exception similar to Section 8, but added language that specified that the exception applied to “unexpired” collective bargaining agreements: Notwithstanding any provision of law to the contrary, nothing in this act shall limit the rights accruing to employees pursuant to a collective bargaining agreement 19 for the unexpired term of such agreement or the eligibility of any member of an employee organization to join a special retirement plan open to him or her pursuant to a collectively negotiated agreement with any state or local government employer, where such agreement is in effect on the effective date of this act and so long as such agreement remains in effect thereafter . . . Had the Legislature intended the previous language of Section 8, which merely required that the collective bargaining agreement be “in effect” to qualify for the exception and exclude CBAs continued pursuant to the Triborough Law from the exception, there would be no need for this additional language. In addition, the Legislature included in the Tier 6 legislation language that specifically excluded certain members who join the public retirement system after the effective date of the legislation from becoming a participant in certain statutorily authorized special retirement plans: . . . provided further that this section shall not be construed as authorizing any member who first joins a public retirement system of the state (as defined in subdivision 23 of section 501 of the retirement and social security law) on or after April 1, 2012 to become a participant in any of the special plans established by section 504-a, 504-b, 504-d, 604-a, 604-c (as added by chapter 96 of the laws of 1995), 604-d or 604-i of the retirement and social security law or section 13-157.1 or 13-157.4 of the administrative code of the city of New York. If the Legislature had intended to prevent members who joined the public retirement system after the effective date of Tier 5 from joining a special 20 retirement plan otherwise available to them, the Legislature would have included specific language to that effect similar to the language set forth in Tier 6. The Second Department’s holding runs counter to rules of statutory construction. Not only does it interpret Section 8 in a way that creates, rather than avoids, the constitutional problems the Legislature was seeking to avoid with the exception, but the construction given by the Second Department actually renders the exception unconstitutional. As such, the Second Department’s decision should be reversed. CONCLUSION No statute or public policy forbids arbitration of this matter. The CBA contains a broad arbitration provision, and there is simply no reason why the parties' mutually selected arbitrator cannot decide this matter. Appellant respectfully requests that this Court reverse the Second Department and find: (1) that the Appellate Division, Second Department erred by holding that the collective bargaining agreement between the parties was no longer 'in effect'; and (2) that the Appellate Division, Second Department erred by holding that arbitration of this dispute is barred by statute. Appellant respectfully requests that this Court order the City to proceed to arbitration. Dated: 126040 New York, New York September 4, 2012 MEYER, SUOZZI, ENGLISH & KLEIN, P.C. 12J s: &_-z:D/ Richard S. Corenthal J oni H. Kl etter Attorneys for Respondent Meyer, Suozzi, English & Klein, P.C. 1350 Broadway, Suite 501 P.O. Box 822 New York, New York 10018-0026 212-239-4999 21