In the Matter of Gregory Floyd, Respondent,v.City of New York, et al., Appellants. (And Ten Other Proceedings.)BriefN.Y.September 11, 2014 i Supreme Court, New York County To be argued by Index Nos. 102673/12 (and ten related proceedings) MICHAEL J. PASTOR (30 Minutes) COURT OF APPEALS STATE OF NEW YORK In the Matter of the Application of GREGORY FLOYD, as President and on behalf of Local Union No. 237, I.B.T., Petitioner-Respondent, For a Judgment and Order Pursuant to Article 78 of the Civil Practice Law and Rules, -against- CITY OF NEW YORK; MICHAEL BLOOMBERG, as Mayor of the CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES; EDNA WELLS HANDY, as Commissioner of the NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES, Respondents-Appellants. APPELLANTS’ REPLY BRIEF KRISTIN M. HELMERS, SPENCER FISHER, ANDREA FASTENBERG, MAXWELL LEIGHTON, MICHAEL J. PASTOR, of Counsel. January 24, 2014 JEFFREY D. FRIEDLANDER, Acting Corporation Counsel of the City of New York, Attorney for the Respondents-Appellants, 100 Church Street, New York, New York 10007. (212) 356-0838 or -0872 mpastor@law.nyc.gov i TABLE OF CONTENTS TABLE OF AUTHORITIES ................................................................................... iii PRELIMINARY STATEMENT ...............................................................................1 POINT I......................................................................................................................2 CIVIL SERVICE LAW § 20, BY ITS TERMS, DOES NOT APPLY TO THE GRADING OF TITLES. A. Because Salary Grades and Competitive Class titles Need Not Appear in the City’s Civil Service Rules Under the Plain Language of the 1960 Amendment, They are Necessarily Not Subject to Civil Service Law § 20 Requirements. ............................................................................................3 B. Petitioners Either Misconstrue or Ignore the Legislative History of the 1960 Amendment Showing That the Legislature Expressly Intended to Overrule the Portion of Corrigan That Had Held that Grading is Subject to Civil Service Law § 20, and Other Authority Cited by Petitioners Has been Abrogated or is Otherwise Irrelevant...................................................................................8 C. Petitioners Proffer no Intelligible Response to the Point that the State Legislature’s Failed Attempt to Bring Grading within the Coverage of Civil Service Law § 20 Eliminates Any Doubt that the Law as it Stands Presently Does Not Apply to Grading ..............................................................................16 ii POINT II ..................................................................................................................20 THE STATE LEGISLATURE DID NOT ENACT A LAW IN 1976 OR AFTER THAT ABOLISHED OR IN ANY WAY LIMITED NEW YORK CITY’S AUTHORITY TO TAKE UNGRADED TITLES AND GRADE THEM. POINT III .................................................................................................................28 GRADING IS NOT A MANDATORY SUBJECT OF BARGAINING UNDER ANY LAW AND THE CITY DID NOT FORFEIT ITS AUTHORITY TO GRADE WITHOUT THE CONSENT OF PETITIONERS. POINT IV.................................................................................................................35 THE CITY CARRIED OUT THE GRADING OF PETITIONERS’ TITLES IN A REASONABLE MANNER. CONCLUSION........................................................................................................41 iii TABLE OF AUTHORITIES CASES Acunci v. Ross, 73 A.D.2d 643 (2d Dep’t 1979)....................................................................11, 22 Auguti v. City Civ. Service Comm’n, 9 Misc. 2d 349 (Sup. Ct. N.Y. Cty. 1957) ..........................................................11 Bauch v. City of New York, 21 N.Y.2d 599 (1968) .........................................................................................38 Brukhman v. Giuliani, 94 N.Y.2d 387 (2000) .........................................................................................25 Buffalo Building Trades Council v. Bd. of Education, 36 N.Y.2d 782 (1975) ...................................................................................11, 22 Casey v. Catherwood, 34 A.D.2d 806 (2d Dep't 1970), aff'd, 28 N.Y.2d 702 (1971)............................22 Cayuga-Onondaga Counties BOCES v. Sweeney, 89 N.Y.2d 395 (1996) .........................................................................................25 Civil Service Employee Association, Inc. v. State of New York Public Employment Relations Board, 248 A.D.2d 882 (3d Dep't 1998) ........................................................................30 Goodwin v. Perales, 88 N.Y.2d 383 (1996) .........................................................................................35 Kaye v. Lippman, 241 A.D.2d 159 (3d Dep’t 1998)........................................................................37 Matter of Borrell v. County of Genesee, 65 A.D.3d 112 (1st Dep’t 2009) .........................................................................12 iv Matter of Broidrick v. Lindsay, 39 N.Y.2d 641 (1976) .........................................................................................38 Matter of Burri v. Kern, 180 Misc. 74 (Sup. Ct. N.Y. Cty. 1942), aff'd, 266 A.D. 841 (1st Dep't 1943), aff'd, 291 N.Y. 776 (1944) ......................................................................10 Matter of Caslin v. Nassau Cty. Civil Service Commn., 2011 N.Y. Misc. LEXIS 3678 (N.Y. Sup. Ct. July 21, 2011), rev’d, 2013 N.Y. App. Div. LEXIS 1358, (2d Dep’t March 6, 2013) ...................................................................................14 Matter of City of New York v. Novello, 73 A.D.3d 386 (3d Dep’t 1980)............................................................................4 Matter of Corrigan v. Joseph, 304 N.Y. 172 (1952) ................................................................................... passim Matter of Delmar Box Co., 309 N.Y. 60 (1955) .............................................................................................23 Matter of Evans v. Newman, 100 Misc. 2d 207 (N.Y. Sup. Ct., Albany County 1979), aff’d, 71 A.D.2d 240 (3d Dep’t 1979), aff’d, 49 N.Y.2d 904 .................................................................................. passim Matter of Joyce v. Ortiz, 108 A.D.2d 158 (1st Dep't 1985)........................................................................12 Matter of Matter of Martin v. Hennessy, 147 A.D.2d 800 (3d Dep’t 1989)........................................................................13 Matter of Pell v. Bd. of Education, 34 N.Y.2d 222 (1974) .........................................................................................35 Matter of Trager v. Kampe, 99 N.Y.2d 361 (2003) .........................................................................................13 McFarland v. City of New York, 23 Misc. 3d 1127A (Sup. Ct., N.Y. Co. 2009) ...................................................31 v N.Y.S. Court Clerks Ass’n v. Crosson, 269 A.D.2d 335 (1st Dep’t 2000) ........................................................................37 People v. Levy, 15 N.Y.3d 510 (2010) ...........................................................................................7 People v. Hernandez, 20 N.Y.3d 44 (2013) ...........................................................................................15 People v. Hroncich, 21 N.Y.3d 636 (2012) ...........................................................................................7 Perez v. City of New York, 41 A.D.3d 378 (1st Dep't 2007), lv. denied, 10 N.Y.3d 708 (2008) ..................23 Rapp v. Carey, 44 N.Y.2d 157 (1978) .........................................................................................37 Roberts v. New York City Health and Hosp. Corp., 87 A.D.3d 311 (1st Dep’t), lv. denied, 17 N.Y.3d 717 (2011) ............................35 Roberts v. New York City Office of Collective Bargaining, 114962/09 NYLJ 1202474686473 (Sup. Ct., N.Y. Co. October 15, 2010) ....................................31 Solomon R. Guggenheim Foundation v. Lubell, 77 NY2d 311 (1991) ...........................................................................................27 Wood v. City of New York, 274 N.Y. 155 (1937) ...........................................................................................22 STATUTES N.Y. City Charter § 814...............................................................................21, 37, 38 N.Y. Civil Service Law § 20............................................................................ passim N.Y. Civil Service Law § 41....................................................................................15 N.Y. Civil Service Law § 42....................................................................................15 vi N.Y. Civil Service Law § 44....................................................................................15 N.Y. Civil Service Law § 52....................................................................................21 N.Y. Civil Service Law § 209-a...............................................................................31 N.Y. Constitution, Art. V, § 6............................................................................21, 31 N.Y. General City Law §20 .....................................................................................37 N.Y. Labor Law § 220 ..................................................................................... passim MISCELLANEOUS 1998 N.Y. Op. Att’y Gen. 98-F3 .............................................................................13 Matter of Tompkins, 15 PERB 3092, 3093 (1982)...............................................................................30 1 COURT OF APPEALS STATE OF NEW YORK In the Matter of the Application of GREGORY FLOYD, as President and on behalf of Local Union No. 237, I.B.T., Petitioner-Respondent, For a Judgment and Order Pursuant to Article 78 of the Civil Practice Law and Rules, -against- CITY OF NEW YORK; MICHAEL BLOOMBERG, as Mayor of the CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES; EDNA WELLS HANDY, as Commissioner of the NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES, Respondents-Appellants. APPELLANTS’ REPLY BRIEF 0BPRELIMINARY STATEMENT Municipal-respondents in the above-captioned case and in the related cases consolidated on appeal by the Appellate Division, First Department, by Order dated October 23, 2012 (“appellants” or, collectively, the “City”), submit this reply brief in further support of their brief-in-chief (hereinafter, “App. Br.”).F1F In its brief, the City demonstrated that (1) Civil Service Law § 20 does not apply to the grading of titles carried out by Mayoral Personnel Orders 2012/1 and 2012/2 (“Personnel 1 All un-prefaced citations in this brief, unless otherwise noted, are to pages in the Record on Appeal. 2 Orders”); (2) the State Legislature did not pass a law in 1976 or afterward stripping the City of its power to grade titles; and (3) expired agreements with petitioners- respondents (“petitioners”) entered into under the Labor Law § 220 framework do not prevent the City from exercising its lawful power to grade titles without first obtaining petitioners’ consent. This brief is filed in further support of those points, which petitioners have failed to rebut in their opposition briefs. 3BPOINT I CIVIL SERVICE LAW § 20, BY ITS TERMS, DOES NOT APPLY TO THE GRADING OF TITLES. As described in the City’s brief-in-chief, the Appellate Division, First Department, ignored the plain language of Civil Service Law § 20 in holding that the City’s grading of titles requires approval of the State Civil Service Commission and a public hearing. Indeed, the Court failed to even discuss or analyze the pertinent statutory text, which had been adopted by the legislature eight years after the decision cited as authority by the Appellate Division in its decision (2820); see Matter of Corrigan v. Joseph, 304 N.Y. 172 (1952). To avoid belaboring this Court with repetition, the City refers the Court to the arguments in its brief-in- chief. It makes only these further points to address specific arguments raised in petitioners’ briefs. 3 A salient difficulty posed by petitioners’ briefs generally is that they turn the Corrigan holding of this Court on its head, relying upon the single portion of that case that was superseded by State legislation in 1960 and disregarding the primary holding that remains good law, and that has been cited by this Court over succeeding decades. In short, to the extent that Corrigan required that the procedure of adopting civil service rules be followed in order to engage in grading of titles, Corrigan was superseded by the 1960 amendment to the Civil Service Law that added the specific language in the second sentence of Civil Service Law § 20(1). This sentence provides: “Nothing in this chapter or any other law shall be construed to require that positions in the competitive class be specifically named or listed in such rules, or that the salary grade to which a position in any jurisdictional class is allocated be specified in such rules.” In contrast to this limited supersession, the primary holding of Corrigan, which is that grading of titles furthers constitutional principles of civil service merit and fitness and removes those titles from prevailing wage requirements, applies as strongly today as when the case was first decided. A. Because Salary Grades and Competitive Class Titles Need Not Appear in the City’s Civil Service Rules Under the Plain Language of the 1960 Amendment, They are Necessarily Not Subject to Civil Service Law § 20 Requirements. Petitioners argue that the provisions of Civil Service Law § 20 are “clear” in their application to the grading of titles and that, indeed, the plain language of the 4 statute supports the Supreme Court’s holding (see, e.g., Brief for Roberts Petitioners-Respondents (“Roberts Br.”), at 26). This argument is untenable given that Civil Service Law § 20(1), by its very terms, specifies that grades and competitive class titles need not appear in local civil service rules and, thus, are not subject to the statute’s procedural provisions. Since the statute’s plain meaning is clear from its text, the Appellate Division should have given the words in the statute their full effect. See Matter of City of New York v. Novello, 65 A.D.3d 112, 116-117 (1st Dept. 2009) (“Where the statutory language is so clear and unambiguous as to belie any interpretation other than its expressed peremptory term, courts are without authority to enlarge or limit this unambiguous language”). Faced with this clear language specifying that grades and competitive class titles need not appear in DCAS’s rules, petitioners proffer an inherently contradictory theory. Specifically, they attest that all that the statutory language means is that the City need not “list competitive class service titles and salary grade information in their rules” (Brief for Bilello Petitioners (“Bilello Br.”), at 31). On this point, all parties are in agreement. It necessarily follows, however, that if grades and competitive class titles need not appear in the rules, then grades can be adopted or competitive class titles modified without being subject to Civil Service Law § 20. Indeed, petitioners’ central theory makes no sense: if salary grades or competitive class titles need not appear in DCAS rules, it is bewildering 5 to say that grades or changes in the competitive class must still be subject to Civil Service Law § 20, which only applies to “rules” of local civil service commissions. It is also imperative to stress that these titles are not part of DCAS’s rules. Section 10.4.1(a) of DCAS’s Personnel Rules provides: “The services, titles and grades, if graded, of positions in the competitive class subject to this rule shall not be deemed to form part of these rules.” In this quoted section, the “rule” that is not a component of DCAS rules is “Rule X,” which covers all the competitive class titles of petitioners.2 And “Rule X” is what the Personnel Orders amended (445). The Personnel Orders were categorically not a change to DCAS rules; instead, they were merely an administrative action undertaken by the Mayor, pursuant to his power under the Charter, to grade titles without changing titles or any work function of the titles whatsoever. More critically, the reason that Rule X is not deemed part of the rules goes to the heart of this case, and it relates to the significant use of the term “if graded” in this quoted language from the DCAS Personnel Rules. In 1960, right after the amendment to § 20 was enacted, the City’s Civil Service Commission (now DCAS) proposed to add the previously-quoted language to its rules (i.e., the language saying that graded titles are not officially part of DCAS rules). This was done because the Civil Service Commission and everyone at the time understood 2 A similar provision, § 10.3.1, governs labor class provisions in Rule X. 6 that in light of the 1960 amendment, once a title was graded, it would not form part of the rules and would not be subject to Civil Service Law § 20. The resolution made explicit reference to Chapter 73 of the Laws of 1960, the law that had excluded grading from Civil Service Law § 20. N.Y. City Civil Service Commissioner Res. 60-70 (May 10, 1960), at 37.3 The proposal to add this language excluding the grading structure from the rules was approved by the State Civil Service Commission, further confirming that the grading structure was no longer under the purview of Civil Service Law § 20. The adoption of this rule and its approval by the State Civil Service Commission, both of which occurred nearly contemporaneously with the 1960 amendment and, indeed, in response to it, make plain beyond all doubt that since 1960, grading titles is not a rule change requiring state review and a public hearing under Civil Service Law § 20, as the Appellate Division erroneously held. Perhaps conceding that the 1960 amendment must mean something with respect to grades or the competitive class titles, petitioners alternatively insist that the statute should be read to apply only to “routine changes in grades of employees” that were already in graded titles (Roberts Br., at 31-32). Thus, they assert that when the legislature passed a law stating that grading need not be approved by the State (or even included in local civil service rules at all), what it 3 The text of this resolution is on file with the Office of the Corporation Counsel and can be made available to the Court and the parties. 7 meant to say was that changes to grades need not be approved, but that new grades require such approval (see, e.g., Bilello Br., at 35). Alternatively, they insist that Civil Service Law § 20 simply must apply when titles are moved from coverage under Labor Law § 220 to coverage under the Taylor Law (Roberts Br., at 33). There is a critical flaw, however, in petitioners’ arguments: the statute’s text simply does not contain these caveats or exceptions. Statutes must be taken as they are found, not as one wishes them to be; if the legislature intended Civil Service Law § 20 to apply only to changes to grades and not to establishing grades for ungraded titles, it needed to enact a law that said as much. See People v. Hroncich, 21 N.Y.3d 636, 647 (2012) (“Presumably, if the legislature had wanted this to be the case, it would have said so”); People v. Levy, 15 N.Y.3d 510, 516 (2010). Some petitioners further contend that the Personnel Orders amount to changes to “position classifications” and thus are covered by Civil Service Law § 20 (e.g., Bilello Br., at 28). This argument plainly lacks merit. For however much changes to “position classifications” are covered by § 20, any changes with respect to salary grades are governed by the 1960 amendment. Grading is, by definition and in accordance with merit and fitness principles, an exercise in grouping like positions together and assigning them salary ranges. This may look superficially akin to grouping titles in position classifications, but the second sentence of § 20 makes grading different. Indeed, if grading was a position classification change, 8 then the carve-out enacted in 1960 would be meaningless because a locality could not carry out grading properly without grouping titles and assigning them salary ranges. Finally, the grading that took place in this case almost universally applied to competitive class titles, and those titles also need not appear in the rules, pursuant to the explicit text of the same sentence in Civil Service Law § 20(1) that excludes grading. This, in turn, means that even if grading was viewed as a position classification, that classification would not be covered because it was a grouping of competitive class titles. B. Petitioners Either Misconstrue or Ignore the Legislative History of the 1960 Amendment Showing that the Legislature Expressly Intended to Overrule the Portion of Corrigan That Had Held that Grading is Subject to Civil Service Law § 20, and Other Authority Cited by Petitioners Has Been Abrogated or is Otherwise Irrelevant. The textual analysis of Civil Service Law § 20 should be dispositive in this appeal. However, in the event this Court goes beyond the statute’s plain language to review the legislative history of the 1960 amendment, it would find only support for the City’s position. The State Civil Service Commission opined at the time of enactment that it made little sense to have grading approved by the State or subject to a public hearing since grading is a “matter exclusively within the authority of the [City] and not the [local civil service commission].” See Governor’s Bill Jacket, Laws of 1960, Chapter 73, Explanatory Memorandum of the State Civil 9 Service Department, at 10 (“Gov. Bill Jacket, 1960 Amendment”). The very same memorandum noted that, in this respect, New York City was an outlier because no other local jurisdiction viewed Civil Service Law § 20 as applying to grading. Id. The memorandum went on to note: By what right or for what reason, for example, should the State Commission veto a salary grade adopted by the Board of Estimate or veto a competitive class job title prescribed by the Municipal Commission. It makes no sense that these matters . . . have to be approved by the State Commission. Id. It also noted that taking grading out of the coverage under Civil Service Law § 20 would be consistent with the statute’s purpose because grading is not a matter “which [involves] violations of the Civil Service Law or merit system principles.” Id. To those who opposed the bill based on concerns that the City might act arbitrarily when grading or changing competitive class titles (much like petitioners argue here), the memorandum replied that these opponents “fail to understand that the State Commission can have no reasonable basis for disapproving a job title or salary grade adopted by the City.” Id. at 11 (emphasis added). In the face of these clear statements of intent, petitioners cite a reference in the same memorandum that amendment of Civil Service Law § 20 was needed because approval by the State Commission should only be required for civil service rules of the City that are “truly legislative in character.” Id. at 9. However, this statement must be read in light of the statute itself and the remainder of the 10 memorandum, which unequivocally takes the position that there is no purpose in having the State review and approve salary grades or changes to the City’s competitive class titles. The statute itself, which of course controls over any legislative history, divides the universe in two: “legislative” changes are those where jurisdictional classifications are changed or where similar changes are made other than those excluded by the statute itself; grading and changes within the competitive classes are in fact excluded. Lacking support in the text of the statute or the legislative history of the 1960 amendment, petitioners turn to a litany of cases that fail to advance their claims. They remarkably continue to cite case law from before the 1960 amendment for the proposition that grading or changes in the competitive class must be approved by the State, even though the legislature specifically sought to abrogate this case law by the amendment it adopted. Corrigan v. Joseph, 304 N.Y. 172, 185 (1952); Matter of Burri v. Kern, 180 Misc. 74 (Supt. Ct. N.Y. Cty. 1942), aff’d, 266 A.D. 841 (1st Dep’t 1943), aff’d, 291 N.Y. 776 (1944). The legislative memorandum from the State Civil Service Commission actually cited these cases by name in describing the problem the bill sought to remedy: that “the courts [in cases such as Corrigan and Burri] have taken cognizance of the practice in New York City and held that before a new title or grade may be effective, it must be adopted in the rules” and approved by the State. Gov. Bill Jacket, 1960 11 Amendment, at 10.4 Thus, by passage of the 1960 law, the holdings in these pre- 1960 cases that applied the procedures for adoption of civil service rules to grading were expressly superseded. Numerous petitioners cite Auguti v. City Civ. Service Comm’n, 9 Misc. 2d 349 (Sup. Ct. N.Y. Cty. 1957), another case from before the 1960 law to support their position, but the case only further undermines it. See Brief for Martinello Petitioners (“Martinello Br.”), at 13. In Auguti, the City’s Civil Service Commission undertook the same action as it did in Corrigan and the same action the City has taken in this case: it took titles and graded them, thereby ending their status as § 220 titles. But it was precisely this type of change that the legislature had in its focus when, just three years later, it removed grading from coverage under Civil Service Law § 20. Petitioners’ failure to identify a single case after 1960 with the precise holding in Auguti demonstrates the inherent flaw in their position.5 4 The memorandum’s consistent reference to both changes to grades and to “new” grades belies any notion that the amendment was intended only to apply to changes to grades and not to the City’s ability to create new graded titles. 5 Petitioners have no answer to the point that both this Court and the Second Department have affirmed the power of a local civil service commission to grade titles in cases that never mentioned Civil Service Law § 20. See Buffalo Building Trades Council v. Bd. of Education, 36 N.Y.2d 782 (1975); Acunci v. Ross, 73 A.D.2d 643 (2d Dep’t 1979). They claim these cases only concerned the entity that does grading, not how it is done (Bilello Br., at 36), or that the cases are not probative because they do not cite Civil Service Law § 20 (DeMartino Br., at 11). But this is the very point – the grading in those cases was contested, as it is here. That no party in those litigations thought to raise the flawed premise that the Appellate Division adopted in this case demonstrates the premise is flatly wrong. 12 Lacking any apposite authority, petitioners cite a litany of cases that have nothing to do with grading and are thus completely irrelevant. In Matter of Borrell v. County of Genesee, 73 A.D.3d 386, 389-390 (3d Dep’t 1980), the Third Department held that a targeted demotion of an employee pursuant to “clarifications” undertaken by the local civil service commission triggered Civil Service Law § 20 when it moved him from one grade to another. The case thus rested upon a “de facto reclassification” and movement from one title to another. Id. at 390. Here, the Personnel Orders do not change titles or classifications and do not alter job duties in any way; they embody, rather, a systematic grading of the ungraded work force pursuant to settled law under the portion of Corrigan that remains fully viable to this day and authorizes such grading. Borrell was later cited in Matter of Joyce v. Ortiz, 108 A.D.2d 158 (1st Dep’t 1985), a case incorrectly relied upon by the Supreme Court below. Joyce did not concern grading but rather an action taken by the City that the Court found effectively moved a title from the competitive class to a non-competitive or exempt status. This is the type of change covered by Civil Service Law § 20, and thus this Court held that state approval for such a change was required. Joyce did not discuss the carve-out in Civil Service Law § 20 for grading (or changes within the competitive class), as indeed the Supreme Court also completely failed to do. 13 For the same reason, Matter of Martin v. Hennessy, 147 A.D.2d 800 (3d Dep’t 1989), does not support the Supreme Court’s decision because there the New York State Thruway Authority attempted by resolution to move employees from the exempt class to other jurisdictional classes covered by Civil Service Law § 75. It had nothing to do with grading. Similarly, Matter of Trager v. Kampe, 99 N.Y.2d 361 (2003), was not a grading case, but rather one in which Nassau County tried to impose a residency requirement, which directly affects who may or may not be hired. Id. at 365. Under the Personnel Orders in this case, who may be hired and who may be promoted remains unaltered. The same holds true for the Attorney General opinion cited by petitioners. 1998 N.Y. Op. Att’y. Gen. 98-F3. In that opinion, the Attorney General took the position that Civil Service Law § 20 should apply to movement of certain titles or the creation of new titles. First, the opinion does not discuss grading and is thus beside the point. Second, it fails to even explain the precise personnel actions taken by the City, making a reading of its analysis nearly impossible. Third, it relies upon Corrigan and Burri, cases that were explicitly superseded in relation to § 20 by the 1960 amendment described earlier. Finally, to the extent that the opinion stands for any supportable principle, that unremarkable principle appears to be that the 14 creation of genuinely new non-competitive or exempt titles, whether by local law or other local action, is subject to the process set forth in Civil Service Law § 20. 6 Finally, a decision from the Nassau County Supreme Court cited by petitioners on this issue actually undermines their position. Matter of Caslin v. Nassau Cty. Civil Service Commn., 2011 N.Y. Misc. LEXIS 3678 (N.Y. Sup. Ct. July 21, 2011). In Caslin, the Supreme Court held that a method for testing the hearing of applicants that was adopted by the Nassau County Civil Service Commission needed to be approved by the State Civil Service Commission under Civil Service Law § 20. Id. at *11. In a decision not cited by petitioners, the Second Department reversed this decision and held that Civil Service Law § 20 was not applicable to an act undertaken “within the scope of [the local civil service commission’s] discretionary power,” much as grading is within the City’s discretionary power. See Matter of Caslin v. Nassau Cty. Civil Service Commn., 104 A.D.3d 684, 684-685 (2d Dep’t 2013). Petitioners make much of the fact that the Department of Citywide Administrative Services at times used the word “re-classify” to describe the actions taken by the Personnel Orders (e.g., Roberts Br., at 29). In this respect, however, the agency merely uses that term to refer, in substance, to the grading process. As 6 It bears repeating: all of petitioners’ titles were in the competitive class before grading, and would remain in that class if the City’s position in this case is upheld. The one labor class title would remain a labor class title. 15 in the case of virtually all questions of statutory authority, it is the substance of the personnel action rather than the words used that should govern the legal analysis. See People v. Fernandez, 20 N.Y.3d 44, 50 (2012). In addition, as stated previously, there was no “re-classification” in a legal sense under Civil Service Law § 20: all competitive class titles remain competitive class titles and have been graded, thus putting the Personnel Orders squarely within the carve-out enacted by the legislature in 1960. Moreover, even if one were to accept arguendo that these positions were somehow reclassified, they would still not be covered by Civil Service Law § 20 because those changes would all have been made to titles within the competitive class, and thus be subject to the other explicit exemption from coverage in the second sentence of § 20(1).7 In short, the authority cited by petitioners in support of the Supreme Court’s decision is either inapposite or has been superseded by the very statute at issue in this case. Since Civil Service Law § 20, by its terms and consistent with its legislative history, does not apply to the grading of titles or even to changes made 7 With respect to the one labor class title, reclassifications within this class are exempted by virtue of the statutory structure of the Civil Service Law, which requires (in §§ 41(2) and 42(1)) that positions in the non-competitive and exempt classes be specifically named in the rules, while notably omitting any such requirement in § 44, which governs the labor class. 16 to competitive class titles, it was error to conclude that the Personnel Orders should be annulled based upon the City’s failure to abide by its provisions.8 C. Petitioners Proffer no Intelligible Response to the Point that the State Legislature’s Failed Attempt to Bring Grading within the Coverage of Civil Service Law § 20 Eliminates Any Doubt that the Law as it Stands Presently Does Not apply to Grading. As the City demonstrated in its brief-in-chief, both houses of the State legislature passed a bill in 2001 that sought to accomplish the precise thing petitioners seek in this litigation (App. Br., at 20-21). The pertinent section of the proposed law referred to “laborers, workmen and mechanics,” the legal term for petitioners. It explicitly provided that localities would not be permitted to reclassify ungraded, prevailing wage titles without giving notice to the “impacted parties” and without complying with subdivision 2 of Civil Service Law § 20, the section that requires notice to the public, a public hearing and that no rule change take place without approval from the State. Civil Service Law § 20(2). There is only one plausible interpretation of this eventually-vetoed piece of legislation: Civil Service Law § 20’s requirements do not currently apply to grading § 220 titles. 8 Petitioners imply on appeal that Civil Service Law § 20 was intended as some type of protection for labor rights, as opposed to one related to the State’s civil service system. This implication misconstrues the statute. Civil Service Law § 20 intended to assure that the State and the public have oversight over changes that may affect the purposes of the State’s civil service scheme (such as avoiding patronage appointments, etc.). Protections of labor rights are found in the Taylor Law and, in the City, in its Collective Bargaining Law, including review of labor disputes by either the Public Employee Relations Board or the City’s Board of Collective Bargaining. 17 Petitioners’ response to this legislative history is bewildering. Nearly all discuss this history as if the language in the bill requiring that grading be covered by Civil Service Law § 20 does not exist at all. For example, the Bilello petitioners recite the portions of the law related to adding requirements about consent of the unions prior to grading, but their brief simply fails to acknowledge the language of the new provision of Labor Law § 220 that the bill attempted to enact, which provides that no municipality shall “reclassify” prevailing wages titles without complying with Civil Service Law § 20 (i.e., public hearing and approval by the State Civil Service Commission. See A6689/S4011 (2001) (Bilello Br., at 38). Petitioners also fail to discuss any portion of the Veto Jacket to the bill, citing instead to a quote from a Veto Jacket a year later (e.g., DeMartino Br., at 12). Their failure to discuss the Veto Jacket from 2001 is understandable because it is rife with language indicating that the legislature was seeking to amend the law to obtain the same result petitioners now seek. The Memorandum from the State Civil Service Department provides as follows (Veto Jacket, Veto #51, 2001) (emphasis added): … Section 20 of the Civil Service Law is used only if a municipal civil service agency determines that a position title should be removed from the competitive class and placed into the non-competitive, exempt or labor class. The decisions to classify or reclassify positions, either as to title or jurisdictional class, should remain in the exclusive domain of the municipal civil service agency. Since many positions can be reclassified without the 18 necessity for amending local civil service rules, inclusion of this mandate is very troubling. The memorandum from the Mayor seeking disapproval gives further color to what everyone understood to be the purpose of the proposal (id., at 14-15): The provisions of this bill attempt to require using the more complex procedures necessary for classifying Non- Competitive positions to reclassify any prevailing wage positions, even where the positions are in the Competitive Class. However, the wording is vague, and the procedures of CSL 20 regarding amending the civil service rules do not require a public hearing or state approval for competitive title reclassifications. This bill requires “consent” of the union to reclassify any prevailing wage title, which impinges on the Charter responsibility of the DCAS Commissioner and the management right under New York City Collective Bargaining Law to classify and reclassify positions . . . . . . This appears to be a proposal to respond to a recent action by DCAS to reclassify the title of Supervisor of Mechanics (Mechanical Equipment) (“SOMME”) from the prevailing wage category . . . Because the title continued in the Competitive Class, no public notice or public hearing and approval by the State Civil Service Commission was required . . . This bill would apply statewide and would limit the discretion of municipal civil service commissions to reclassify positions in the Competitive Class without the lengthy procedures required in CSL Section 20. The 2002 bill discussed by petitioners (S6863/A11306) sought the same change in the law as the 2001 bill, but this time it was even more focused on changes to notice requirements, including by making grading subject to Civil Service Law § 20, because the provision with respect to localities needing union 19 consent to grade had been removed in this iteration. Although the Governor’s message in the Veto Jacket from 2002 refers to procedures for position classification, reflecting the persistent confusion engendered by the bill’s own reference to “reclassification,” other statements by State agencies in the jacket reflect a clear understanding of the applicable law. The budget report specifically points to the last sentence of Civil Service Law § 20(1), which contains the language added in 1960, and states that “this amendment to the Labor Law requires municipalities to engage in a new practice which is clearly excused in the current Civil Service Law.” Further, the Department of Civil Service in its memorandum actually emphasizes that the bill reflects a “misunderstanding of the reclassification process” and states that “where a position is reclassified to a title already listed in the rules, reclassification could take place nonetheless without amending the rules or providing notice to interested parties.” That is similar to what occurred here: the titles at issue were regarded, but the titles, which did not have to be listed in the rules at all, did not change. In short, the 2001 and 2002 bills were introduced with union support not because the law already provided for elaborate procedures to be followed for grading of titles, but because it did not, and both bills were vetoed. 20 POINT II THE STATE LEGISLATURE DID NOT ENACT A LAW IN 1976 OR AFTER THAT ABOLISHED OR IN ANY WAY LIMITED NEW YORK CITY’S AUTHORITY TO TAKE UNGRADED TITLES AND GRADE THEM. Petitioners argue that the State legislature enacted laws in 1976 and 1984 amending Labor Law § 220(8-d) that abrogated the historic rule stated by the New York Court of Appeals in Corrigan, whereby the State and its localities have the power to take ungraded titles and to grade them (see, e.g., Martinello Br., at 32). At its core, this argument is premised on the notion that petitioners have been granted some “right” to receive the prevailing wage (Roberts Br., at 35), and the legislature has stripped the City of its ability to grade petitioners’ titles and to bargain with them under the Taylor Law, as the City does with every other union. There is no dispute respect to the question of whether State and local law affords petitioners a right to collectively bargain over wages and benefits. But there is simply no legal basis supporting the proposition that such bargaining can only be conducted under the state’s prevailing wage law and that, in turn, the City has lost its historic ability to grade ungraded titles. The text of Labor Law § 220(8- d) and its legislative history make clear that petitioners have no legal “right” to remain prevailing wage titles in perpetuity, and the City is fully authorized, and indeed encouraged, to grade titles. 21 Before turning to the 1976 and 1984 amendments cited by petitioners for the claim that City has no power to grade titles, it is necessary to reiterate key background principles on the State’s civil service system and grading’s role in that system. The Mayor and DCAS are obligated under the N.Y. Constitution to create a system whereby appointments and promotions in New York City are made according to merit and fitness and, to the extent practicable, by competitive examination. N.Y. Constitution, Art. V, § 6. The Civil Service Law presumes salary grades, see, Civil Service Law § 52, and under the New York City Charter, the Mayor and DCAS have the power to establish classes and grades. N.Y. City Charter § 814. Moreover, the City’s power to grade titles is neither incidental nor ancillary to the operation of its civil service; to the contrary, grading has been viewed as “an essential factor in the administration of the merit system in this state since the enactment of the first civil service law in 1883.” Corrigan, 304 N.Y. at 180. (To be clear, this is the primary holding in Corrigan, which remains good law. Only the portion concerning the procedure for obtaining approval for grading was superseded by the State legislature in 1960.) Perhaps most important, court decisions issued before Corrigan, the Corrigan opinion itself, and every decision since Corrigan have placed beyond doubt the principle that when the State’s civil service provisions intersect with the 22 application of the State’s prevailing wage laws to public sector employees, the latter yields (i.e., when ungraded titles are graded). Buffalo Building Trades Council v. Bd. of Education, 36 N.Y.2d 782 (1975) (affirming the Fourth Department in a case where the Board of Education had placed ungraded titles in a graded structure); Acunci v. Ross, 73 A.D.2d 643 (2d Dep’t 1979); Casey v. Catherwood, 34 A.D.2d 806 (2d Dep’t 1970), aff’d, 28 N.Y.2d 702 (1971); Wood v. City of New York, 274 N.Y. 155 (1937) (upholding the grading of an ungraded title). Against this legal backdrop, petitioners contend that by passage of Chapter 933 of the Laws of 1976, the legislature meant to make New York City unique by eliminating its power to take ungraded titles and to grade them (Roberts Br., at 41). The text of the statute, as amended by Chapter 767 of the Laws of 1984, comes nowhere near supporting this conclusion. Labor Law § 220(8-d) is a procedural requirement that does not mention grading or the Civil Service Law at all. It simply provides that City employees who are covered by § 220 (by reason of being ungraded) may have a bargaining representative file joint complaints with the City Comptroller rather than individual ones. Not only does this law not, by its terms, overrule Corrigan, but if the legislature meant to overrule a firmly-established rule such as the one in Corrigan, it needed to speak with a clear and unambiguous intent: “It is a cardinal principle 23 of statutory interpretation that the intent to change a long-established rule or principle is not to be imputed to the legislature in the absence of a clear manifestation.’” Perez v. City of New York, 41 A.D.3d 378 (1st Dep’t 2007), lv. denied, 10 N.Y.3d 708 (2008) (quoting Matter of Delmar Box Co., 309 N.Y. 60, 66 (1955)). Petitioners’ interpretation of subdivision 8-d is that, in supporting the current version of that subdivision in 1984, the City had apparently unwittingly agreed to a trap that silently overruled the key portion of Corrigan that remained good law while negating the constitutional underpinnings of that case. This trap sets forth a process for agreement upon wages, with an explicit “backstop” providing for the setting of the prevailing wage by the Comptroller, and then becomes operative at the moment the City enters into an agreement, even if it has never explicitly waived its constitutional right to grade under Corrigan. The legislative history from 1976 and 1984 does not support this reading of the statute. Indeed, the Governor actually stated in 1976 that the bill he was signing into law would leave the Corrigan rule undisturbed. New York Legislative Service (“NYLS”) Governor’s Bill Jacket, Laws of 1976, Chapter 933, Approval Memorandum of Gov. Hugh Carey, dated July 27, 1976 (“Gov. Bill Jacket, 1976 Amendment”). It seems odd to presume that the legislature and the Governor believed the enactment of this law would overturn Corrigan when the 24 Governor’s approval message states the opposite. Curiously, the Governor’s 1976 statement in response to a reassurance that the bill applied only to ungraded employees is cited by the Roberts petitioners as evidence that the portion of Corrigan concerning the right to grade employees was not good law, when in fact it relies on Corrigan. In general, a citation to a case such as that made by the Governor in 1976 would seem to indicate deference to the case if the citation does not state otherwise. Moreover, his statement must be taken in the context of an attempt to make a similar change in 1971, when the Governor then vetoed the bill based upon concerns that the change would overrule Corrigan. NYLS Governor’s Veto Jacket, Laws of 1971, Veto #305, dated July 6, 1971. Governor Carey signed the 1976 bill upon assurances from the State Department of Labor that “this bill is not in conflict with the Corrigan case.” Id., Memorandum of the State Department of Labor, dated July 16, 1976, at 2. Notably, District Council 37, a petitioner in one of these appeals, argued in favor of the 1976 amendment on administrative efficiency grounds without so much as mentioning, even in passing, the monumental shift it and other petitioners now claim was enacted by this law. As noted in the City’s initial brief, the bill jacket for the 1984 amendment by Chapter 767 also lacks any evidence that a longstanding managerial power was being waived or removed by the procedural changes set forth in the statute, as 25 amended. In short, momentous changes in the state of the law such as the petitioners hypothesize to have occurred in 1976 or 1984, when they say Corrigan vanished as governing law, are generally recognized and either accepted or opposed in the legislative history by at least some of the purportedly affected parties. Later case law cements the conclusion that Corrigan was not overturned and has never been overturned. See Brukhman v. Giuliani, 94 N.Y.2d 387 (2000) (discussing Corrigan as central to the Court’s holding that the prevailing wage provisions of state law do not apply to public assistance recipients, who are not employees of any public or private entity covered by prevailing wage requirements); Cayuga-Onondaga Counties BOCES v. Sweeney, 89 N.Y.2d 395, 404 (1996). Some petitioners confusingly cite Cayuga-Onondaga for the proposition that this Court refused to “extend” Corrigan (Martinello Br., at 32). However, “extension” was not at issue in the case, only whether the prevailing wage laws applied to the subject employees. In holding that they did because the titles had not been graded, this Court actually affirmed and cited approvingly to Corrigan. And contrary to some petitioners’ assertions (e.g., Bilello Br., at 52), Cayuga-Onondaga reinforces the fact that this Court has never overruled Corrigan’s key holding, i.e., that leaving titles in ungraded status and setting their 26 wages in accordance with fluctuating, private-sector wage levels runs contrary to the State’s merit and fitness policy preference. All that this Court stated in Cayuga-Onondaga was that the Corrigan rule remains: titles that have been ungraded get prevailing wages, but titles that are graded should not because they should have their wages set in a coherent framework, rooted in public sector merit and fitness considerations, that does not rely, without any purpose, on the private sector market for wages. If there is any doubt as to the continuing vitality of Corrigan, it was not apparently shared by the legislature and the Governor in 2001 and 2002, when efforts were made to legislatively overturn Corrigan and require that grading of ungraded titles only be undertaken with the consent of the affected unions or after other procedures had been followed. See Governor’s Veto Jacket, Laws of 2002, Veto #9; Governor’s Veto Jacket, Laws of 2001, Veto #51. In 2001, Governor Pataki vetoed the bill that would have required union approval for re-grading and said: While it is extremely uncommon, laborers, workmen and mechanics who work for governmental employers in ungraded (non-salaried) positions are entitled to prevailing wages and supplements under Labor Law § 220 . . . However, these positions can be reclassified by municipal civil service agencies into the classified civil service, in which case the positions would be paid a salary and would not be entitled to prevailing wage . . . Under current law, [these re-classifications] are not subject to the collective bargaining process or the 27 approval of the collective bargaining agent. Thus, this bill would represent a significant change in the role of civil service agencies in reclassification of public employees. Administrative reclassification of employees should remain within the independent discretion of the civil service agencies. Veto #51 Message, Laws of 2001 (emphasis added).9 In 2002, another bill to regulate grading was vetoed, with the State Civil Service Commission explicitly referencing Corrigan in discussing the potential effects of the bill without any reference to Corrigan having been abrogated. Governor’s Veto Jacket, Laws of 2002, Veto #9, at 9. These two vetoed efforts to overrule or modify Corrigan and its progeny place beyond any doubt the conclusion that the 1976 amendment did not effect the change ascribed to it by petitioners. See Solomon R. Guggenheim Foundation v. Lubell, 77 NY2d 311, 319-320 (1991) (noting that a Governor’s veto of a proposed change to a law supports the conclusion that the law subject to the vetoed bill remains unaltered in light of the veto). In response to this argument, petitioners seek to ignore the text of these vetoed bills by saying that the Governor’s veto message did not mention Corrigan (Bilello Br., at 55). But what is of consequence for this Court is not only the text of the veto message; it is the text of the bills themselves. That text would have required the City to negotiate grading of titles 9 Like DCAS, the Governor used the term “reclassification” generically to refer to grading, but this administrative action is, as described above, explicitly exempted from rulemaking procedures by Civil Service Law § 20. 28 with the union. Because the bill requiring union consent was vetoed, the law as it stands does not require that bargaining. Nor have petitioners explained why this Court should overrule Corrigan (see, e.g., DeMartino Br., at 17). The key finding in Corrigan – that setting wages for public employees by reference to private sector wages runs contrary to the overarching merit and fitness requirements of the State’s civil service scheme – remains as true today as it was in 1952. The purpose of grading is to establish a coherent structure of salary ranks; having the City Comptroller set wages by reference to the private sector (or even setting them pursuant to “negotiation,” but with the prevailing wage process of the City Comptroller as a statutory fallback for employee unions) is inherently inconsistent with public sector merit and fitness. Indeed, if one were to establish a grading system from scratch, one would never do so by reference to the fluctuating private labor market. Instead, one would approach it as the State itself has done – establishing grades and negotiating with State employees over wages under the Taylor Law with reference to that graded structure. See Civil Service Law § 130 (listing salary grades for competitive, non-competitive and labor class employees in State service).10 True 10 That DCAS’s Personnel Rules refer to labor agreements does not alter this analysis. Personnel Rules § 5.3.2(a). Those references simply stand for the notion that DCAS acknowledges the role of bargaining in the setting of wages and benefits. But grading remains apart as something that should be left to the City in its role of managing its work force as a whole. Grading and wage bargaining live side-by-side, but labor agreements do not trump or supersede the City’s legal authority to grade in the initial instance. 29 public sector bargaining, occurring in the context of public sector salary grades, strikes the optimal constitutional and public policy balance between the constitutional values of merit and fitness and the legitimate right of most public sector employees to negotiate, through their chosen representatives, the terms and conditions of employment. The reasoning in Corrigan is sound. It remains good law and stands for a sensible principle: When the State or local governments grade, the statutory provisions related to applying private sector prevailing wages to public sector employees no longer apply in order to further the State’s civil service purposes. POINT III GRADING IS NOT A MANDATORY SUBJECT OF BARGAINING UNDER ANY LAW AND THE CITY DID NOT FORFEIT ITS AUTHORITY TO GRADE WITHOUT THE CONSENT OF PETITIONERS. Petitioners’ claim that grading ungraded titles requires their consent must be rejected for all the reasons discussed in the City’s brief-in-chief (App. Br., at 35- 42). In short, their efforts to void the Personnel Orders on this ground should be dismissed because grading is not a mandatory subject of bargaining and the City never contracted with petitioners to refrain from grading absent their consent. This Court has held that grading is not a mandatory subject of bargaining. See Matter of Evans v. Newman, 71 A.D.2d 240 (3d Dep’t 1979), aff’d, 49 N.Y.2d 30 904 (1980) (unanimously affirming for the reasons stated in the Third Department’s decision). This is controlling precedent, and one that has been followed by the Appellate Division, Third Department, and by PERB, in decisions making clear that Evans is in no way limited by its facts. Civil Service Employees Association v. State of New York Public Employment Relations Board, 248 A.D.2d 882, 884 (3d Dep’t 1998) (finding that unilateral establishment of salary grades was not arbitrary and capricious because grades are not a term or condition of employment). Nothing in these cases suggests that they are of limited applicability. See Matter of Tompkins, 15 PERB 3092, 3093 (1982) (“We believe that the quoted holding [of Evans] was intended as a general statement of the law whose applicability was not restricted to the parties to this case”). Petitioners suggest that Evans should be disregarded because it concerned grading carried out pursuant to some prior legislative action (e.g, Roberts Br., at 50). This is a non-sequitur. The City has the power to grade pursuant to City Charter § 814 and, pursuant to this Court’s decision in Corrigan, grading is favored. The question then is not about the power but whether that power is managerial or a “term or condition” of employment. Evans and later precedent make clear that grading is not subject to bargaining, even if, of course, wages and benefits continue to be. 31 Petitioners are thus left to argue that the City entered agreements with unions whereby it waived its authority to grade ungraded titles. However, the agreements to which petitioners refer (“consent determinations”) make no mention of grading whatsoever. More importantly, all those agreements have expired. To the extent they could have been construed to prohibit or limit the City’s managerial prerogative to grade, they no longer are in effect. Their terms are followed by the City as a matter of practice until it and petitioners negotiate new agreements. But they cannot be viewed as a bar to grading as a managerial prerogative done pursuant to the City Charter and in furtherance of the State Constitution’s merit and fitness provisions (Art. V, § 6). Petitioners nonetheless argue that the agreements remain in effect pursuant to the Triborough Amendment of the Taylor Law (Civil Service Law § 209- a(1)(e)). Until the titles are graded (which petitioners seek to prevent by the claims in these cases), the Taylor Law does not apply to the terms of employment covered by Labor Law § 220. See McFarland v. City of New York, 23 Misc. 3d 1127A (Sup. Ct., N.Y. Co. 2009) (Board of Collective Bargaining does not have jurisdiction to review a claim brought by § 220 employees pursuant to the NYCCBL); Roberts v. New York City Office of Collective Bargaining, 114962/09 NYLJ 1202474686473 (11/15/10), at *1 (Sup. Ct., N.Y. Co. October 15, 2010) 32 (Board of Collective Bargaining lacks jurisdiction over disputes regarding wages and supplements of § 220 employees). Indeed, it is ironic that petitioners, who premise the entire theory of their cases on the argument that they must be treated differently from all other City employees who are fully covered by the Taylor Law, seek to have this Court apply only the provision of the Taylor Law that would benefit them (and not all others). Further, it makes little sense to apply the protections of the Taylor Law to “agreements” that are not subject to free bargaining or impasse resolution under its terms, but rather are extracted by virtue of the underlying power of the Comptroller, derived from a statute outside the Taylor Law, to fix wages by reference to the private sector.11 It is critical to stress at this point that the City will be required to negotiate with petitioners over wages and supplements. Therefore, the claim that the Personnel Orders run counter to the State’s policy in favor of collective bargaining is baseless and turns reality on its head (Roberts Br., at 37). The trial court in Evans, whose opinion was eventually affirmed by this Court, addresses this point head-on: 11 Unwarranted speculation by petitioners about the application to them of the strike prohibition in Civil Service Law § 210 is not only irrelevant to the issue at hand, but misapprehends the distinction between the general application of the Taylor Law (including the strike prohibition) to public employers and their employees and the specific inapplicability, recognized by the cases cited by the text, of that law to the setting of economic terms and conditions for those subject to the private sector wage standards of Labor Law § 220. 33 Furthermore, petitioner’s unilateral allocation of salary grades does not deprive the [respondents] of their rights under the Taylor Law. An employee’s salary within each salary grade will remain a subject of negotiation as will other terms and conditions of employment. Similarly, percentage increases of the maximum and minimum salary, i.e., cost of living increases would presumably be negotiable. See Matter of Evans v. Newman, 100 Misc. 2d 207, 211 (N.Y. Sup. Ct. 1979), aff’d, 71 A.D.2d 240 (3d Dep’t 1979), aff’d, 49 N.Y.2d 904 (1980). In this case, the Personnel Orders’ only change is to replace the artificial negotiations that take place in the § 220 context, against a backdrop of private sector wage standards, with negotiations conducted under the provisions of the New York City Collective Bargaining Law and the Taylor Law, just as those same negotiations occur with every other City union. That includes leave and other non-wage matters, and reflects how the Corrigan decision is properly harmonized with the subsequent enactment of the Taylor Law: upon grading, the establishment of wages for represented employees moves from a § 220 framework to a Taylor Law framework. The Supreme Court, in a portion of its decision not discussed by the Appellate Division, utterly failed to take into account this point in voiding the Personnel Orders (19) (concluding, erroneously, that petitioners have been stripped of the “statutory protection of civil servants”). Petitioners seek to evade Evans by repeatedly citing the uncontroversial proposition that wages and benefits are mandatory subjects of bargaining (e.g., 34 Roberts Br., at 49). But wages and benefits will be bargained, and can be set retroactively. Petitioners can thus repeat endlessly their claim that their collective bargaining rights have been stripped away, but in fact they will have the same bargaining right as all other public sector employees: the right to negotiate wages and benefits without the anomalous guarantee that the public employer can be required to match private sector standards. There is no absolute “right” to only bargain over wages and benefits under prevailing wage laws and no “right” under Corrigan or any statute to remain ungraded employees outside the mainstream of public sector salary structures and bargaining. Petitioners cite no authority for that concept, and none exists, binding authority is indeed to the contrary, and the City never bargained away its right to grade prevailing wage titles.12 12 To the extent this Court considers the brief of Proposed Amicus Curiae Municipal Labor Council (“MLC”), it will find no unique arguments warranting an order affirming the Appellate Division. MLC’s “bad faith” argument amounts to a re-hashing of the claim that the City was required to negotiate with petitioners over salary grades. There is no such requirement, and the City will negotiate with petitioners on wages and benefits, only not under the Labor Law § 220(8-d). Grading was not done in bad faith; to the contrary, it was merely the exercise of a historic managerial power expressly authorized by the City Charter. It is difficult to conceive that the reasonable exercise of a power rooted in the State Constitution and recognized in decades of case law, which results in these employees receiving the same procedural bargaining rights as most other public sector employees, could have been an act of bad faith. As for the claim that the City bargained away its right to grade titles unilaterally, this too has no merit, for all the reasons herein stated. 35 POINT IV THE CITY CARRIED OUT THE GRADING OF PETITIONERS’ TITLES IN A REASONABLE MANNER. Since the Personnel Orders were lawful, the only remaining question is whether they were arbitrary or capricious. They were neither. They embody a reasonable approach to grading, one that balances the need for the City to grade with efforts to make the transition from ungraded to graded status as orderly and reasonable as possible. To have the Personnel Orders invalidated under Article 78 on reasonableness grounds, petitioners must meet a high bar. Indeed, the Orders can be disturbed only if they are so lacking in reason that they are essentially arbitrary. See Goodwin v. Perales, 88 N.Y.2d 383, 395-96 (1996). “Arbitrary action is without sound basis in reason and is generally taken without regard to the facts.” Matter of Pell v. Bd. of Education, 34 N.Y.2d 222, 231 (1974). This high bar is consistent with the principle that courts should avoid substituting their policy judgments for those of legislative bodies or rule-making agencies. See Roberts v. New York City Health and Hosp. Corp., 87 A.D.3d 311, 327 (1st Dep’t), lv. denied, 17 N.Y.3d 717 (2011) (reversing lower court’s decision to invalidate agency action on the ground that it was not the province of the courts to “weigh the desirability of any action or choose among alternatives”) (internal citations omitted). 36 Petitioners have failed to demonstrate how the Personnel Orders are arbitrary or undertaken without regard to the facts. Leaving these titles in ungraded positions fails to advance the goals of the State’s civil service system and results in arbitrarily inflated wage determinations. Bringing them under the Taylor Law, on the other hand, solves these problems while at the same time affording the employees all bargaining rights possessed by every other represented employee in the City. The manner in which the grading is to be implemented is also reasonable. Pursuant to the powers earlier described, infra, the City had many options at its disposal. It could have set initial salary grade ranges below current wages for the affected titles. It also could have implemented the change without any grandfathering of current employees, rather than applying it prospectively, though subsequent bargaining may alter the treatment of those employees. Instead, the City set salary ranges that for all but two titles encompass the salaries of current titles.13 Therefore, pending new agreements with petitioners negotiated under the New York City Collective Bargaining Law, new hires will be made at salaries generally commensurate with what they would have been had the new employees been hired under the § 220 scheme. For example, as conceded by 13 In the case of one title, High Pressure Plant Traders, the salary was actually increased under the graded system. In the other, the maximum of the grade was set at $2,000 below the current salary (429). 37 petitioners, the salary range for the “Supervisor Locksmith” hired after the effective date of the Orders will be between $54,000 and $70,000, which encompasses the current salary of that title, $56,731 (Roberts Br., at 22). In addition, the City sought to smooth the transition into the new framework by grandfathering in current incumbents so that they would see no diminution in their salaries pending newly-negotiated agreements. This was not only reasonable, but consistent with precedent regarding the benefits of grandfathering. See N.Y.S. Court Clerks Ass’n v. Crosson, 269 A.D.2d 335 (1st Dept. 2000) (holding that grandfathering incumbents in the context of a downward reclassification “is an accepted practice”); Kaye v. Lippman, 241 A.D.2d 159, 162-63 (3d Dept. 1998) (denying petitioner’s request for reclassification to secretarial title in a higher salary grade, and finding that grandfathering of certain secretaries was rational decision by respondent). Various petitioners nevertheless argue that this Court should void the Personnel Orders on some theory of separation of powers (see Roberts Br., 36, 42, citing Rapp v. Carey, 44 N.Y.2d 157 (1978)). This argument is misconceived. The action taken in Rapp was deemed outside the Governor’s powers because he had usurped a power of the legislature. The opposite is true here. See N.Y. General City Law § 20(17), (18) (the legislature’s authorization to cities to establish requirements for the hiring of their work force and to make civil service rules, 38 including those related to appointments and promotions); N.Y. City Charter 814(a)(10) (City Charter provision, with the force of State law (App. Br. 15), authorizing DCAS to study its work force and make recommendations to the Mayor on “creation, abolition and modification” of grades). Consistent with these statutes, this Court has held explicitly that the Mayor’s powers under the Charter and General City Law, including the “reserve” power under Charter § 8 as well as the predecessor of Charter § 814(a)(10), empower the Mayor to “regulate the terms of employment and compensation of city employees.” Bauch v. City of New York, 21 N.Y.2d 599, 605 (1968). The Mayor and DCAS are thus not only authorized to grade titles, but they are expected to do so. Indeed, if anything, an argument based on separation of powers supports the City’s position because, as the Appellate Division warned in Roberts v. Health & Hosp. Corp., 87 A.D.3d at 327, courts should approach with caution cases such as this one where they are called upon to make what are, in essence, policy judgments.14 Finally, some petitioners seek to have this Court uphold the Supreme Court’s decision on the theory the Personnel Orders will result in demotions, that some of the maximum salary ranges are lower than current salaries, and that the 14 Matter of Broidrick v. Lindsay, 39 N.Y.2d 641 (1976), is similarly inapposite. There, this Court found that a deputy mayor had essentially tried to take a legislative action by administrative order. Here, the City exercised an administrative power granted to it explicitly by law. 39 Orders irrationally amend leave policies (e.g., Bilello Br., at 58-59). First, there has been no demotion of any person. To the extent some of petitioners’ members believed that they would always live in a world where they were paid at a level commensurate with private sector wages, this belief does not translate into a legal entitlement. Demotion as a civil service concept is simply inapplicable – in fact, for the first time, a grading structure has been created that seeks to reflect the lines of promotion that are not always consonant with private sector prevailing wages. Second, the salary ranges are rational – nearly all of them include the current salary. And it is noteworthy to point out that there was no legal requirement that the City set salary ranges based on these prior inflated wages. The City could have rationally set them at lower points, but did not. Third, wages and leave go hand-in-hand. There was no rational basis for the City to start negotiating wages and benefits with petitioners under the Taylor Law by reference to leave policies set with private sector leave policies as a back-drop. The leave policies established by the Personnel Orders merely set a rational baseline from which negotiations on leave can be conducted, with a final settlement retroactively applying those leave policies. In a nutshell, petitioners’ arguments eventually reduce to the following point: the City cannot grade their titles and move them to coverage under the Taylor Law without a hearing, approval of the State, and agreement of petitioners. 40 But neither the law nor any contract supports this theory; indeed, decades of legislative and judicial history surrounding both Civil Service Law § 20 and Labor Law § 220 decisively refute it. All that remains is a policy disagreement, and the City reasonably exercised its policy judgment when issuing the Personnel Orders that petitioners now seek to have invalidated by this Court. 41 CONCLUSION THE ORDERS APPEALED FROM SHOULD BE REVERSED IN THEIR ENTIRETY, WITH COSTS. Respectfully submitted, JEFFREY D. FRIEDLANDER Acting Corporation Counsel of the City of New York Attorney for Respondents-Appellants By: _______________________ MICHAEL J. PASTOR Senior Counsel KRISTIN M. HELMERS, SPENCER FISHER, ANDREA FASTENBERG, MAXWELL LEIGHTON, MICHAEL J. PASTOR, of Counsel. January 24, 2014