In the Matter of Gregory Floyd, Respondent,v.City of New York, et al., Appellants. (And Ten Other Proceedings.)BriefN.Y.September 11, 2014QCourt of ~pptals 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 ofthe NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES, Respondents-Appellants. BRIEF OF AMICUS CURIAE MUNICIPAL LABOR COMMITTEE Of Counsel: Lee M. Leviter STROOCK & STROOCK & LAVAN LLP Alan M. Klinger Dina Kolker 180 Maiden Lane New York, New York 10038 (212) 806-5400 aklinger@stroock.com dkolker@stroock.com Counsel for Amicus Curiae New York Count Clerk's Index Nos.: 1026731!2 (and ten related proceedings) Printed on Recycled Paper TABLE OF CONTENTS TABLE OF AUTHORITIES ..................................................................................... ii PRELIMINARY STATEMENT ............................................................................... ! INTEREST OF AMICUS CURIAE ........................................................................... 3 BACKGROUND ....................................................................................................... 4 I. THE UNIQUE STATUS OF PREVAILING WAGE EMPLOYEES ......................................................................................... 4 II. THE CLASSIFIED SERVICE .............................................................. lO A. Organization Of The Civil Service In New York City ....................... lO B. The Resolutions At Issue .................................................................... 12 ARGUMENT .......................................................................................................... 14 I. THE CITY'S IMPROPER UNILATERAL RECLASSIFICATION OF SKILLED TRADE TITLES WAS AN ATTEMPT TO CIRCUMVENT THE LABOR LAW AND THE NYCCBL ...................................................................................... 14 A. The City Has Not Offered Any Legitimate Reasons To Justify Removing 10,000 Employees From Prevailing Wage Protection ...... 14 B. Further Bad Faith Is Evident In The City's Revisionist Reading of the Civil Service Laws and Personnel Regulations ........................ 19 III. THE CITY ACTED ARBITRARILY AND CAPRICIOUSLY IN IGNORING ITS OWN AGREEMENTS COVERING TRADE TITLES .................................................................................................. 27 CONCLUSION ....................................................................................................... 32 -I- TABLE OF AUTHORITIES Page(s) CASES Austin v. City of New York, 258 N.Y. 113 (1932) ............................................................................................ 6 Bianco v. Pitts, 200 A.D.2d 741 (2d Dep't 1994) ....................................................................... 15 Board of Cooperative Educational Services v. BOCES Staff Council, 8 PERB 3018 (1975) .......................................................................................... 28 Boreali v. Axelrod, 71 N.Y.2d 1 (1987) ............................................................................................ 25 Brennan v. Kern, 173 Misc. 388 (Sup. Ct. N.Y. Co. 1939) ............................................................ 18 Burri v. Kern, 180 Misc. 74, aff'd 266 App. Div. 841, aff'd 291 N.Y. 776 (1943) ...... 21, 22,24 C.S.E.A. v. County of Duchess, 6 A.D.3d 701 (2d Dep't 2004) ........................................................................... 15 Corrigan v. Joseph, 304 N.Y. 172 (1952) ................................................................................... passim Gaston v. Taylor, 274 N.Y. 359 (1937) ...................................................................................... 5, 26 In re Gallagher v. Bd. OfEduc. for Buffalo City Schl. District, 81 A.D.3d 1408 (4th Dep't 2011) ...................................................................... 15 Local237 v. NYCOLR, 67 OCB 37 (BCB 2001) ..................................................................................... 29 Local621 et al. v. City ofNew York, 67 OCB 2 (BCB 2001) ....................................................................................... 29 Local 1157 et al. v. City of New York, 2 OCB2d 10 (BCB 2009) ......................................................................... 9, 29, 30 -ii- Matter of McFarland v. City ofNew York, 12 Misc. 3d 1127(A) (Sup. Ct. N.Y. Co. 2009) ................................................. 28 N.Y.S. Pub. Employ't Relations Bd. v. Bd. ofEduc., 39 N.Y.2d 86 (1976) .......................................................................................... 30 Office of the Comptroller ex rei. Local 924 v. Office of Labor Relations, OATH Index No. 464/10 (July 2, 201 0) ...................................................... 10, 11 Olmstead v. US, 277 U.S. 438 (1928) (Brandeis, J dissenting) ...................................................... 1 Ricca v. Board of Education of the City of New York, 47N.Y.2d385 (1979) ........................................................................................ 17 Stein v. Nassau County Civ. Serv. Comm'n, 176 A.D.2d 739 (2d Dep't 1991) ....................................................................... 16 Weimer v. Board of Education, 74 A.D.2d 574 (2d Dep't 1980) ......................................................................... 18 Welling v. Portfolio, 26 N.Y.S.2d 823 (Sup. Ct. N.Y. Co. 1941) ........................................................ 16 Wipfler v. Klebes, 285 N.Y. 248 (1940) .......................................................................................... 16 STATUTES N.Y. Civ Serv. L. §11(2) .................................................................................... 21-22 N.Y. Civ Serv. L. §20 ........................................................................................ 14, 20 N.Y. CIV. SERV. L. §20(1) ....................................................................................... 20 N.Y. Civ Serv. L. §20(2) ............................................................................. 21, 22, 23 N.Y. CIV. SERV. L. §40 ............................................................................................ 10 N.Y. CIV. SERV. L. §44 ............................................................................................ 10 N.Y.CIV.SERV.L. §51(1) .................................................................................. 10-11 N.Y. LAB. L. §220 ............................................................................................. passim -iii- N.Y. LAB. L. § 220(8-d) ................................................................................... passim N.Y. LAB. L. §220(3)(c), (5)(e) ........................................................................... 5, 26 OTHER AUTHORITIES 3 Revised Record, 1938 Constitutional Convention ........................................... 5, 25 55 RCNY appx. A, R. 11.2.1 ................................................................................... 11 Govenor's Bill Jacket, Laws of 1960, Ch. 73, Explanatory Memorandum ................................................... 20-21, 24, 25 Govenor's Bill Jacket, Laws of 1976, Ch. 933, Memorandum ofDep't of Labor ........................................................... 8 Mayor's Personnel Order 2012/1 ............................................................................ 13 N.Y. CONST., Art. I, § 17 .................................................................................. 4-5, 25 N.Y.C. Admin. Code§ 12-301, et seq . ............................................................ passim N.Y.C. Admin. Code§ 12-307(a)(l) ........................................................................ 9 Richard Steier, "City Trades Workers Suing Over Mayor's Prevailing-Wage Shift," THE Cl-llEF LEADER (April27, 2012) ................................................. 29-30 -iv- PRELIMINARY STATEMENT In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example .. .If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. Olmstead v. US, 277 U.S. 438, 485 ( 1928) (Brandeis, J dissenting). These proceedings arise from several resolutions promulgated by the Bloomberg administration and recommended by the Department of Citywide Administrative Services (collectively, the "City"), which purport to strip more than 10,000 City employees of prevailing wage protections under State law. Last year, the Department of Citywide Administrative Services ("DCAS") concluded that the Comptroller's method of determining salary for prevailing wage employees consisted of a "far-less-than-optimum comparison with normally similar positions in the private sector" (R. 440). The City thus attempted to wrest control of wage- setting duties from the Comptroller by unilaterally reclassifying dozens of prevailing wage titles and then unilaterally establishing its own wage rates. At no point did the State Civil Service Commission sanction these profound shifts. The Supreme Court, New York County, recognized these moves for what they were: procedurally and substantively infirm power grabs designed to circumvent the Labor Law and extant Consent Determinations authorized by the Comptroller setting wages and supplements. The Appellate Division, First Department, similarly determined that the City improperly promulgated the reclassification without complying with applicable procedures under the Civil Service Law. But the Bloomberg Administration pressed on, denying that the Civil Service Law was at all applicable. Amicus curiae Municipal Labor Committee ("MLC"), the umbrella organization for some 300,000 active and retired New York City civil servants, submits this brief not only because the Bloomberg administration sought to strip trade titles of the protections of both Labor Law §220 and their existing bargained- for agreements, but because the such actions undermine the role ofthe Comptroller in setting the prevailing rate, the role of the State in administering the Civil Service system, and- most critically for the MLC -the role of certified labor unions in representing their members. Time and time again, in this proceeding and otherwise, the Bloomberg administration continually sought to evade any law that it deemed inimical to its self-serving view of public policy. Here, it attempted to seek shelter under a strained reading of the Civil Service Law and abjectly rejected all other relevant statutes and contracts. Petitioners-Respondents (the "Unions") seek to protect their 2 legal interests as well as to vindicate the rule of law by ensuring that City government is held to the same standard of compliance as its own citizens. INTEREST OF AMICUS CURIAE The issues raised in these related proceedings are of significant concern to the City's public sector unions and their members. The MLC is an association of New York City municipal labor organizations representing approximately 300,000 active and retired City workers, dedicated to collectively addressing concerns common to its member unions and advocating on issues of labor relations relevant to City workers. See accompanying Affidavit of Harry Nespoli, sworn to on February 18, 2014, ~ 2 ("Nespoli Aff'). The public employees represented by the MLC serve the public welfare, health and safety on a daily basis. A substantial portion of these members, more than 10,000, are employed in skilled "trade" titles, building and maintaining municipal structures, infrastructure and machinery, among other duties that benefit the public. Id. ~ 3. These employees have, for more than 100 years, been protected by State prevailing wage laws. Such titles include, among others, plumbers and related titles in various City agencies represented by Plumbers Local No. 1; Sewage Treatment and Senior Sewage Treatment workers in DEP represented by Local 1320, an affiliate of DC 37; and auto mechanics and related titles represented by Civil Service Auto Mechanics Local246 of the Service Employees International 3 Union. Id., ,-r 3. The Unions representing these and other skilled trade titles have for decades bargained pursuant to Labor Law § 220(8-d) and the New York City Collective Bargaining Law, New York City Administrative Code § 12-301, et seq. (the "NYCCBL"). These related proceedings raise issues concerning checks and balances within the City, State oversight over the civil service, and the City's good faith when negotiating bargaining agreements. Such matters are at the core of the MLC's purpose, making it an appropriate spokesperson for its constituents, and giving it a vested interest in the resolution of these claims. BACKGROUND I. THE UNIQUE STATUS OF PREVAILING WAGE EMPLOYEES Some 118 years ago, the State of New York and its citizenry took a modern view of the labor of its residents, amending the State Constitution in 1938 to declare: Labor of human beings is not a commodity nor an article of commerce and shall never be so considered or construed. No laborer, worker or mechanic, in the employ of a contractor or sub-contractor engaged in the performance of any public work ... [shall] be paid less than the rate of wages prevailing in the same trade or occupation in the locality within the state where such public work is to be situated, erected or used. 4 N.Y. CoNST., Art. I, § 17. With these provisions, the Constitutional Convention aimed to "protect in policy any economic conditions where those who need work are by reason of their need bid one against the other, forcing prices down, just as market prices are forced down in commodities." 3 Revised Record, 1938 Constitutional Convention, at 2674. In other words, it wanted to ensure "stability, stability from the standpoint of the living wage, stability to the wages of those who are dependent on their hands for their livelihood." 3 Revised Record, 1938 Constitutional Convention, at 2674-75. This principle, now threatened by the City's attack on public sector workers, was operationalized via the State Labor Law, which also extended its application to civil servants. Section 220(3) sets out that "wages to be paid for a legal day's work ... to laborers, workmen, or mechanics upon [any] public works, shall be not less than the prevailing rate of wages .... " N.Y. LAB. L. §220(3). To ensure that covered workers are, in fact, paid at a prevailing rate, §220 charges the "fiscal officer" of the locality- in New York City, the Comptroller- with the authority to determine and enforce the prevailing rate of wages. N.Y. LAB. L. §220(3)(c), (5)(e). In this capacity, the Comptroller is acting as "a representative of the State, empowered to determine the dispute impartially." Gaston v. Taylor, 274 N.Y. 359, 366 (1937). 5 These provisions have long applied to municipal employees. Austin v. City of New York, 258 N.Y. 113, 117 (1932) ("[Section 220] is an attempt by the State to hold its territorial subdivisions to a standard of social justice in their dealings with laborers, workmen and mechanics."). However, in 1952, the Court of Appeals ruled in the context then presented that "graded" titles, i.e., those in specifically designated grades with associated salary ranges and lines of promotion, could not also be covered by the protections of Labor Law §220, as a prevailing wage determination may unintentionally grant an employee a promotion by assigning a wage in excess of the applicable range. Corrigan v. Joseph, 304 N.Y. 172, 185 (1952). Thereafter, under its civil service rules, the City's prevailing wage employees were placed in a separate, ungraded classification ("Part 38," discussed below), which affirmed the application of Labor Law §220 protections and, pursuant to those protections, the role of the Comptroller in resolving disputes that may arise with regard to negotiation and enforcement of prevailing wages. The 50 years since Corrigan have seen numerous changes to the legal landscape and, with these changes, an erosion of the basis for the Court's holding. Two developments are of particular note: (1) the enactment of the Taylor Law and NYCCBL in 1967, establishing collective bargaining as the dominant method by which wages are set for all employees, prevailing wage or otherwise, and (2) the 6 adoption of Labor Law §220(8-d) in 1976, codifying the process of collective bargaining with regard to the wages and supplements of prevailing wage titles in New York City. Thus, in the modem era of labor relations, grading is no longer significant as "a controlling factor in the fixing of compensation for incumbents of positions in the graded services of the competitive class." Corrigan, 304 N.Y at 183. Certain positions remain graded, of course, but wages for any title and grade are established via collective bargaining for all employees within a unit rather than by unilateral City action or individual, employee-specific determinations of the Comptroller. In short, there is no longer any risk of a single employee's wage rate being unilaterally established in excess of the grade designated for that title. Section 220(8-d) is uniquely applicable to unionized public-sector employees in New York City, and crystalizes the primacy of collective bargaining in the post-Corrigan world. The provision, adopted after the Court of Appeals' decision in Corrigan, sets forth: ... in a city of one million or more, where [relevant positions] ... are members of an employee organization which has been certified or recognized to represent them pursuant to the [Taylor Law] or a local law enacted thereunder, the public employer and such employee organization shall in good faith negotiate and enter into a written agreement with respect to the wages and supplements of the [relevant positions] .... If the parties fail to achieve an agreement, only the employee organization shall be authorized to file a single 7 verified complaint pursuant to subdivision seven herein, on behalf of [its members] .... Any order, compromise, or settlement determining the issues raised upon such a proceeding, which has not been taken up for review by the employee organization, shall be binding upon the laborers, workmen or mechanics represented by the employee organization ..... N.Y. LAB L. §220(8-d). Labor Law §220(8-d) thus obligates New York City to negotiate with prevailing wage bargaining units as to all "wages and supplements." In practice, prevailing wage units typically accept the negotiated agreements on an aggregate basis. Should a unit not accept such terms, Labor Law §220(8-d) empowers that unit to petition the Comptroller for a binding determination as to the appropriate prevailing wage applicable to all unit members. Section 220(8-d) thereby also serves to ensure that union members are treated equitably, thus furthering the goal of social justice articulated by this Court in Austin. See Governor's Bill Jacket, Laws of 1976, Ch. 933, Memorandum ofthe Department of Labor ("If the [Comptroller's] determination increases the prevailing rate for the laborer, this higher rate applies only to the particular laborer who filed the complaint .... This bill by permitting a determination based upon a single complaint filed by an employee organization to apply to all members of the union, would reduce this inequity."). 8 While the prevailing wage law and its applicability to trade positions precede the Taylor Law and NYCCBL, these two regimes nevertheless cover all municipal employees, including prevailing wage positions. Unions representing prevailing wage positions therefore have the same rights to organize and collectively bargain, free from retaliation, as applicable to all unions in the City and State. In 1998, an amendment to the NYCCBL clarified the BCB's jurisdiction to reflect the alternative bargaining process for trade titles, excluding from BCB's authority those issues arising from the duty to bargain "wages and supplements" pursuant to Labor Law §220(8-d). NYCCBL §12-307(a)(1). Importantly, BCB retained jurisdiction over all other matters. Indeed, BCB, charged with interpreting and applying the NYCCBL, has held that this exception to its jurisdiction is discrete and that a public employer continues to have a general duty under the NYCCBL to bargain over the working conditions of§ 220 public employees. See Local 1157 et al. v. City of New York, 2 OCB2d 10 (BCB 2009) (dismissing without prejudice retaliation claims on behalf of prevailing wage employees as unripe). Bringing the regulatory picture into focus, skilled trade titles in New York City are protected in their ability to negotiate wages and supplements under the Labor Law and more generally in their rights to engage in union activity under the NYCCBL. Moreover, in accordance with both the Labor Law and the NYCCBL, 9 such units enter into collectively negotiated agreements pertaining to economic and non-economic terms which are enforceable in the same manner as other collective bargaining agreements. Because of this mature collective bargaining framework, the possibility foreseen by the Court in Corrigan- that the Comptroller may set an individual employee's wage in such a manner as to effect a promotion in grade- is no longer possible. The wages for bargaining units as a whole (and more often for groups of units, both prevailing wage and otherwise, represented by the same union), are set through a collective bargaining process, including resort to the Comptroller or BCB, respectively, where the parties reach an impasse. II. THE CLASSIFIED SERVICE A. Organization Of The Civil Service In New York City A comprehensive understanding of the resolutions at issue also requires a brief overview of the structure of the Civil Service in New York City. At the outset, the Civil Service is divided into four "jurisdictional classifications." N.Y. Crv. SERV. L. §40. These consist ofthe Exempt Class, Non-Competitive Class, Labor Class, and Competitive Class. In accordance with the policy mandate favoring hiring by merit and fitness, the Competitive Class is presumptive because it includes all positions hired by competitive examination. N.Y. Crv. SERV. L. §44; 52(1); see also Office of the Comptroller ex rei. Local924 v. Office of Labor Relations, OATH Index No. 464/10, at 16 (July 2, 201 0) (describing the structure 10 of the Civil Service). Promotions within the competitive class occur from positions and titles in a lower grade to positions and titles in a higher grade, if the positions are graded. N.Y. Crv. SERV. L. §51(1). If the positions are not graded, there are no direct lines of promotion from one title to the next. Office of the Comptroller ex rei. Local 924, at 17. A "position" within the classified service refers to a particular office or employment. 55 RCNY appx. A, R. 1 (definitions). A "title" within the classified service is the name of a position based upon its duties. I d. A "grade" is the order or standing of a position with reference to the compensation attaching to it. Id. The positions at issue in this proceeding are governed by Rule X of the Personnel Rules, 1 and correspond to titles listed under the service classification "Skilled Craftsmen and Operative Service [038]," otherwise known as "Part 38." The language in Part 38 lists all the covered titles, and states: "The compensation for these positions is fixed pursuant to Section 220 of the Labor Law." See Office of the Comptroller ex rei. Local 924, at 20 (discussing the classification of prevailing wage employees). Thus, as explained above, it affirms both the 1 Note that the Rule X, applicable here, does not authorizes the DCAS Commissioner to reclassify the positions at issue in this proceeding. In contrast, Rule XI, applicable to titles within the "Career and Salary Plan," explicitly authorizes the Commissioner to reclassify positions therein. 55 RCNY appx. A, R. 11.2.1. 11 applicability of Labor Law §220 to ungraded laborers, as well as the Comptroller's authority over the wages for these titles. B. The Resolutions At Issue On April3, 2012, the City attempted to circumvent the prevailing wage and civil service laws so as to strip skilled trade employees of all statutory and contractual protections. In a Memorandum from Barbara Carnival, Director of Classification and Compensation ("Carnival Memorandum"), DCAS recommended that Mayor Bloomberg and the DCAS Commissioner adopt the following resolution: The classification of the Classified Service of the City of New York is hereby amended ... under the headings and rules under the pay plans as indicated below, and with the salary grades indicated in the classification resolution, as follows: I. By deleting from the Competitive Class, under Rule X, the heading the Skilled Craftsman and Operative Service [038] and reclassifYing the titles thereunder as indicated herein. (emphasis added) (R. 445). The Carnival Memorandum then recommended that the DCAS Commissioner "reclassify" the 106 titles currently in Part 38 into the following fourteen new service classifications: • Metal Work Service [015] • Electrical Service [016] • Mechanical Maintenance Service [0 17] • Plant Maintenance Service [018] • Plumbing Service [0 19] 12 • Building Maintenance Service [020] • Infrastructure Maintenance Service [021] • Carpentry Maintenance Service [022] • Painting Service [023] • Equipment Operation Service [024] • Structural Maintenance Service [025] • Building Construction Service [026] • Press Operation Service [027] • Maritime Service [028] The Carnival Memorandum also designated a "pay plan" to each new service classification. The new pay plans were promulgated on April 11, 2012, in Mayor's Personnel Order 201211 (the "Personnel Order"), thereby establishing grades for each new service classification. For example, in the Metal Work Service [015], Blacksmith's Helper is now Grade 1 (entry-level), Blacksmith and Welder are Grade 2 (experienced), and Supervisor of Mechanics is Grade 3 (supervisory). Grading these titles established maximum and minimum salaries, as well as a line of promotion from Grade 1 through Grade 3. Thus, the City (i) deleted a service classification (i.e. Part 38); (ii) promulgated fourteen new service classifications; (iii) reassigned the titles from Part 38 to the fourteen new service classifications; and (iv) established grades for the new service classifications. With respect to terminology, the City claims that "[a]lthough DCAS referred at times to the grading process as a 'reclassification' for its own internal administrative reasons, there in fact have been no changes to the civil service classifications of petitioners' titles." Brief for Respondents- 13 Appellants, ("App. Br."), at 19. This is incorrect. First, despite the extensive briefing of this issue, the City has failed to identifY any of the so called "administrative reasons" cited in its post hoc explanation. Second, while the Personnel Order did establish grades, the Carnival Memorandum recommended that the DCAS Commissioner reorganize titles from one service classification to fourteen new service classifications. Accordingly, the resolutions at issue therefore are more accurately described as "reclassifications," not merely "establishing grades." ARGUMENT I. THE CITY'S IMPROPER UNILATERAL RECLASSIFICATION OF SKILLED TRADE TITLES WAS AN ATTEMPT TO CIRCUMVENT THE LABOR LAW AND THE NYCCBL As set forth in Petitioners'-Respondents' papers, the City's reclassification of all prevailing wage titles is void for failure to comply with the requirements of Civil Service Law §20. Further, at the most fundamental level, the instant reclassification is also invalid as a bad-faith effort to effect an end-run around the Labor Law and NYCCBL. A. The City Has Not Offered Any Legitimate Reasons To Justify Removing 10,000 Employees From Prevailing Wage Protection The instant reclassification echoes previous episodes in which courts have determined that a personnel action is invalid in the absence of proper motivation. 14 For example, a union charged that a reclassification was undertaken in bad faith in In re Gallagher v. Bd. OfEduc. for Buffalo City Schl. District, 81 A.D.3d 1408, 1409 (4th Dep 't 2011 ), where the public employer abolished two titles in the competitive class and re-established the same titles in the exempt class. The employer argued that it was entitled to abolish and create positions at any time. The Appellate Division, Fourth Department, rejected this contention, explaining that while an employer may abolish a position for reasons of economy or efficiency, it may not so do as "a subterfuge to avoid the statutory protection afforded to civil servants." Id. (citing Matter of Hartman v. Erie 1 BOCES Bd. Of Educ., 204 A.D.2d 1037 (1994)). The court then assessed whether the reasons for the reclassification were sufficient. Finding in the negative, it found compelling that the employer "presented no evidence justifying the need for [the] position to be recreated for reasons of economy or efficiency." Id. at 1409. The new positions required the same knowledge as the old positions, and performed the same duties as the old positions. Id. See also C.S.E.A. v. County of Duchess, 6 A.D.3d 701 (2d Dep't 2004) (rejecting a reclassification that was not based upon an investigation, was an improper attempt to validate out-of-title work that was previously imposed upon the workers in question, and violated the county's personnel policy manual); Bianco v. Pitts, 200 A.D.2d 741, 742 (2d Dep't 1994) (identifying "political patronage" as an improper motive). 15 Similarly, in Welling v. Portfolio, 26 N.Y.S.2d 823 (Sup. Ct. N.Y. Co. 1941 ), the New York City Board of Estimate created 115 new titles that were nearly identical to 115 existing provisional titles, and empowered the relevant employing agency to fill the new positions with the incumbents of the provisional positions. A taxpayer challenged the Board of Estimate's action as a bad-faith attempt to circumvent a time bar imposed upon the provisional appointments. Id. at 826. In annulling this action, the court quoted the Court of Appeals in Wipfler v. Klebes, 285 N.Y. 248 (1940), which reiterated the principle that courts are authorized to look[] behind the form of the ordinance to determine its intended purpose or effect, and where an ordinance in legal form cloaks an illegal purpose and produces an illegal result the courts have said that the ordinance is not adopted in 'good faith' and has no effect. Welling, 26 N.Y.S.2d at 828. It also concluded that that "[t]he Civil Service law may not be circumvented by the employment of a device that changes the title of the position while the character of the employment remains the same." Id. at 827. The City has not proffered any reasoned need that would justify the fundamental change effected here. It does not claim that the affected employees are performing new or different tasks, nor does it contend that they require different training or education. See, ~. Stein v. Nassau County Civ. Serv. Comm'n, 176 A.D.2d 739, 739 (2d Dep't 1991) (upholding reclassification scheme 16 necessitated by "the changing nature of data processing" and supported by extensive study of that division, including employee questionnaires). The City has changed nothing but the service classifications and names of the titles and affixed grades to them, which, although unilaterally set at this time, it admits will ultimately be determined by collective bargaining. Instead, the Carnival Memorandum provides: DCAS has determined that there is no sound public policy basis for continuing the anomalous method of wage determination for the titles in the Skilled Craftsmen and Operative Service by reference to private sector analogues, while other competitive titles have salaries negotiated pursuant to standards and procedures reflecting their public status. (R. 441 ). Elsewhere, the City characterizes the prevailing wage mandate as resulting in a "far-tess-than-optimum comparison with nominally similar positions in the private sector ... " (R. 440). What comparison would be "more optimum"? Plainly, the City has determined that trades titles are paid too much when they are afforded their full panoply of rights. Thus, the clear purpose for the reclassification is to deprive some 10,000 civil servants and their unions of rights guaranteed by the Labor Law and the NYCCBL. Such a blatant abuse of the reclassification process, one which deprives public employees of their rights under other applicable laws, demonstrates bad faith, nullifYing the action. See Ricca v. Board of Education of the City ofNew York, 47 N.Y.2d 385 (1979) (awarding 17 tenure by operation oflaw despite employer's effort to evade tenure system by creating technical obstacles to tenure); Weimer v. Board of Education, 74 A.D.2d 574 (2d Dep't 1980) (holding that a municipality may not abolish a position as subterfuge to evade the tenure law and finding no legitimate rationale for removing the petitioner). Nor may the City defend its actions by citing the Unions' "right to bargain to adjust retroactively the City's initial numerical salary determinations" App. Br. at 33. Any bargaining will be regressive, as the unilaterally set terms force the Union to bargain up from the improperly set pay plans, rather than continue ongoing negotiations from existing agreements and Consent Determinations. Despite the clear indicia of bad faith, the City attempts to demonstrate the "reasonableness" with which it reclassified 10,000 municipal employees by boasting that it "had many options at its disposal to implement the grading process. It could have set initial salary grade ranges below current wages for the affected titles ... .Instead, the City set salary ranges that for all but two titles encompass the salaries of current titles" App. Br. at 33. In truth, the City could not have done any of these things. "[A] classification or reclassification of positions by a civil service commission cannot adversely affect the positions or salaries of the then incumbents of the positions involved." Brennan v. Kern, 173 Misc. 388 (Sup. Ct. N.Y. Co. 1939) (citing Matter ofFomara v. Schroeder, 261 N.Y. 363,368 (N.Y. 1933); 18 Matter of Sugden v. Partridge, 174 N.Y. 87 (N.Y. 1903)). The City should curry no favor for failing to violate the law in this one instance, and its efforts to sway the Court otherwise should serve to underscore, not undermine, the instant charges of bad faith. The sole purpose of reclassifying thousands of prevailing wage employees was to strip them of their Constitutional and statutory rights and strip the Comptroller of his role in setting applicable prevailing rates for City employees in trade titles in the event of impasse or dispute with a representative union. The duties and skills required for the relevant titles have not changed. Nor has the City conducted an investigation, much less one that would warrant a decision to reorganize the skilled trades. Yet, the City now asks the court to sign off on an administratively-determined sunset on 100 years of prevailing wage protections. Such bad faith should not be permitted by this Court. B. Further Bad Faith Is Evident In The City's Revisionist Reading of the Civil Service Laws and Personnel Regulations The City's narrow and self-serving reading of the applicable Civil Service Laws and regulations also demonstrate its bad faith. In particular, it contests that Corrigan v. Joseph, relied upon by the Appellate Division, First Department, was abrogated in 1960 by an amendment to the Civil Service Law (the "1960 Amendment"), and therefore does not support the court's holding that the City may 19 not reclassify ungraded civil service titles without complying with the procedures mandated by Civil Service Law §20 (R. 2820). The 1960 Amendment 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. N.Y. Civ. SERV. L. §20(1) (emphasis added). This provision, the City argues, "provided that the allocation of positions to a salary grade need not even appear in the local civil service rules at all." App. Br. at 16. It further argues that "[i]f grading, the allocation of positions to grades, does not need to be specified in the rules, if [sic] follows ipso facto that the establishment of grades therefore does not need to be approved by the State Civil Service Commission." App. Br. at 16. This argument is disingenuous, as it misrepresents the purpose of the 1960 Amendment and misconstrues the appropriate scope of the City's executive authority. The intent ofthe 1960 Amendment was set forth in a Memorandum from the State Department of Civil Service, enclosed in the amendment's bill jacket (the "Explanatory Memorandum"). It explains that the Civil Service rules were "intended to cover matters which are truly legislative in character rather than pronouncements or determinations of a routine administrative nature." Governor's Bill Jacket, Laws of 1960, Ch. 73, Explanatory Memorandum, at 9. The 20 Explanatory Memorandum continues, "the New York City Civil Service Commission has specifically listed in its rules each competitive class title in the city service and the salary or salary grade of each title, regardless of its jurisdictional class in the city service." Id. at 9-10. It then concluded that the 1960 Amendment was necessary in order to prevent courts from enforcing this practice, as typified in two cases: Burri v. Kern, 180 Misc. 74, aff'd 266 App. Div. 841, aff'd 291 N.Y. 776 (1943) and Corrigan v. Joseph, 304 N.Y. 172 (1952). Both cases illustrate that the type of"routine administrative matter" targeted by the 1960 Amendment is a far cry from the wholesale reclassification of 10,000 employees across dozens of job titles at issue in this proceeding. Burri v. Kern addresses grading within an existing title. The case arose after the then-Municipal Civil Service Commission (the "Municipal Commission") issued a resolution applicable to the "Public Health Nursing Service [024]" service classification, re-grading it from two salary grades to three salary grades, and diminishing the maximum salary from $3000 per year to $2700 per year.2 Id. at 76. Petitioners brought suit under Article 78, challenging the resolution on the grounds that the Municipal Commission failed to comply with Civil Service Law 2 The classification in effect read as follows: "Part 24- The Public Health Nursing Service. Grade 1 -Public Health Nurse- to but not including $2400. Grade 2- Supervising Public Health Nurse- $2400 to but not including $3000 per annum." The amended grading read: "Public Health Nurse, Grade 1 -to but not including $2100 per annum. Public Health Nurse, Grade 2-$2100 to but not including $2400 per annum. Superv Public Health Nurse- $2100 to but not including $2700 per annum." Burri. v. Kern, 180 Misc. at 76. 21 § 11 (2), the predecessor statute to Civil Service Law §20(2). I d. at 78. Respondent argued, in part, that (i) the resolution did not require approval of the State Civil Service Commission because it was "merely budgetary in character" and (ii) that (in the pre-Taylor Law context) "the Board of Estimate has full power to fix the salary of municipal employees and to create, abolish or modify positions and grades" of City personnel. Id. at 77. The Supreme Court, New York County, rejected Respondent's arguments. It found that "grading is essentially a civil service function" which "is not vested solely in local civil service commissions ... " Id. at 78-79. It concluded that "where [the Civil Service Law] delineates the process by which modification of a grade or classification may be accomplished, no action by the Board of Estimate may violate the statutory mandate. Id. at 79. Burri v. Kern therefore represented a scenario where the Municipal Commission unnecessarily sought State approval to change the grading applicable to an existing graded service classification. The Explanatory Memorandum also cites Corrigan v. Joseph, the case which now drives the City's appeal. In Corrigan, the Municipal Commission reclassified and graded previously-ungraded titles. 304 N.Y. at 177. The Court, however, did not consider whether the reclassification itself was proper. Instead, the case stands for two propositions: (i) that Labor Law §220 is inapplicable to graded titles; and 22 (ii) that grading is ineffectual absent compliance with the predecessor provisions of Civil Service Law §20(2). Petitioners in Corrigan, manual laborers employed by the Board of Transportation, filed suit under Article 78 after the Municipal Commission purported to grade their titles, thus removing them from the protection of Labor Law §220. In May 1938, the Municipal Commission adopted a resolution moving petitioners to a new service classification ("The Rapid Transit Railroad Service [039]," or "Part 39") and purporting to establish grades. At issue was the portion of the resolution providing that the newly-established grades would be set forth in a schedule "adopted by the Board of Transportation and as approved by the Municipal Civil Service Commission from time to time." Id at 183. This resolution was then approved by the Mayor on June 2, 1938, and by the State Civil Service Commission (the "State Commission") on July 1, 1938. I d. at 183-84. At the time that the resolution was approved by the Mayor and State Commission, the Board of Transportation had not yet adopted any wage schedule setting forth grades for Part 39. It subsequently adopted applicable wage schedules, but none were approved by the Mayor or State. In February 1943, the Municipal Commission passed a second resolution establishing Part 39 and providing that the applicable grades would be set forth in a wage schedule adopted 23 by the Board of Transportation and approved by the Municipal Commission. That resolution was approved by both the Mayor and the State Commission. Id. at 184. As pertinent here, the issue before the Court in Corrigan was not whether the City could create Part 39 without State approval, but whether the grading within Part 39 went into effect on May 1938 or February 1943. The Court explained that the predecessor statute to Civil Service Law §20(2) "makes invalid the grades sought to be established by the Municipal Civil Service Commission in 1938, because the salaries for such grades had not then been established, much less approved, by the Mayor and State Commission." Id at 185. Accordingly, it held, grading was only effective in February 1943 because "when the Mayor and State Commission approved the second resolution in February 1943, wage scales- although not annexed to the resolution- were in existence and in actual operation." ld. Thus, the Court, as in Burri, considered only whether the Municipal Commission properly graded within a service classification. Both cases represent the type of "prescribing of standard titles" and "specifying salaries and salary grades of positions" contemplated by the amendment that is "routinely approved simply because [they] are not matters which may involve violations of the Civil Service Law or merit system principles." Governor's Bill Jacket, Laws of 1960, Chapter 73, Explanatory Memorandum, at 7. In neither case was the reclassification oftitles at issue. Reserved for the 24 Personnel Rules and State approval, by contrast, are those matters which are "truly legislative in character," Governor's Bill Jacket, Laws of 1960, Chapter 73, Explanatory Memorandum, at 7. In other words, the Explanatory Memorandum took pains to clarify the need for State oversight when an administrative act affected the public policy choices embodied in legislation. This reflects well-worn limits on administrative authority. See Boreali v. Axelrod, 71 N.Y.2d 1, 12 (N.Y. 1987) ("Striking the proper balance among [competing] interests .. .is a uniquely legislative function ... [T]o the extent that [an] agency has built a regulatory scheme on its own conclusions about the appropriate balance oftrade-offs ... it was acting solely on its own ideas of sound public policy and was therefore operating outside of its proper sphere of authority."). The City therefore may not now argue that the Civil Service Law permits it to delete an entire service classification and promulgate 14 new service classifications, a move which has profound policy implications. The Bloomberg Administration's use of administrative machinery to effect a fundamental policy shift exposes its bad faith. At stake here is the principle captured in Article I, § 17 of the State Constitution, which guaranties economic stability, security and fundamental fairness to manual laborers. 3 Revised Record, 193 8 Constitutional Convention, at 267 4-7 5. The Legislature enacted that guaranty into law via §220 by delegating to the Comptroller the independent 25 authority to determine and adjudicate the prevailing rate of wage for public sector employees, and guarantying unions the right to enter into Consent Determinations through good-faith collective negotiations. N.Y. LAB. L. §220(3)(c), (5)(e), (8-d). These delegations of power restrict the City's authority over terms and conditions of employments. See Gaston v. Taylor, 274 N.Y. at 364 ("That law at times gives to an officer or board of the City plenary power to fix the salary or wages to be paid to City employees; at other times it places restrictions upon that power. One of these restrictions is that the City must pay to certain laborers the prevailing rate of wages."). The City now seeks to upend the Legislature's allocation of power to the Comptroller and labor unions in the determination of compensation for prevailing wage titles using Corrigan as an excuse, despite the concerns in Corrigan having become obsolete under the current statutory scheme. To this end, DCAS has concluded that "there is no sound public policy basis for continuing the anomalous method of wage determination for the titles in the Skilled Craftsman and Operative Service by reference to private sector analogues, while other competitive titles have salaries negotiated pursuant to standards and procedures reflecting their public status" (emphasis added) (R. 441 ). In its appeal, the City argues that "having the City Comptroller set wages by reference to the private sector. . .is inherently inconsistent with the public sector merit and fitness requirement." App. 26 Br. at 30. But no policy tension justifies unilateral usurpation of the Comptroller and union's respective roles. The allocation initially achieved by legislation may only be disturbed through further legislation, not via administrative or Mayoral fiat. Thus, in offering its high-minded allusions to the demands of public policy, the City reveals that its true purpose is to usurp the role of the legislature by unilaterally altering the statutory set balance of rights accorded some I 0,000 prevailing wage municipal employees as well as the duties of the Comptroller and State Civil Service Commission. Constitutional and legislative prerogatives cannot be rendered so precarious. III. THE CITY ACTED ARBITRARILY AND CAPRICIOUSLY IN IGNORING ITS OWN AGREEMENTS COVERING TRADE TITLES Even setting aside the City's bad faith, the reclassifications are nevertheless barred by the general proscription against unilateral changes in terms and condition of employment after a bargaining agreement has expired, the so-called Triborough Amendment and doctrine under the Taylor Law. The parties remain bound by extant Consent Determinations, or collectively bargained agreements negotiated pursuant to Labor Law §220(8-d) and sanctioned by the Comptroller. Nevertheless, the City insists that it has maintained the Consent Determinations "as a matter of practice until it and petitioners negotiate new agreements" App. Br. at 27 41. This cannot be. Either the terms and conditions set out in the Consent Determinations remain in place until new agreements are negotiated, or- if the affected employees are no longer covered by Labor Law §220- changes to terms and conditions of employment are similarly barred by the NYCCBL and Taylor Law. Such changes include any change to the terms and conditions offered to individuals hired into covered titled. The City's obligation to maintain all terms and conditions of employment stems from both the Labor Law and the NYCCBL. Indeed, Labor Law §220(8-d) provides that public employer and public employee organizations "shall in good faith negotiate and enter into a written agreement with respect to the wages and supplements ... " (emphasis added). The obligation to bargain in good faith is itself a prohibition upon unilateral changes after the expiry of a bargaining agreement, for "[t]he sine qua non of negotiating in good faith is refraining from imposing unilateral changes in terms and conditions of employment during negotiations." Board of Cooperative Educational Services v. BOCES Staff Council, 8 PERB 3018 ( 1975). 3 Sound public policy warrants this conclusion. If public employers are 3 The City cites Matter of McFarland v. City of New York, 12 Misc. 3d 1127(A) (Sup. Ct. N.Y. Co. 2009) for the proposition that it has no obligation to maintain the terms and conditions of employment set forth under the Consent Determinations. That case is not to the contrary, because the Supreme Court, New York County, did not consider that Labor Law §220(8-d) precludes unilateral changes by requiring that the parties bargain "in good faith." See id. at 5 (rejecting petitioners' argnment that they are protected against unilateral changes on the ground 28 permitted to make unilateral changes during the bargaining process, then they have little reason to bargain at all. Section (8-d) would be rendered meaningless. Additionally, the BCB has held that public employers maintain a general duty under the NYCCBL to bargain over the working conditions of §220 public employees beyond the scope of"wages and supplements." Local237 v. NYCOLR, 67 OCB 37, Decision No. B-37-2001, at *6 (BCB 2001). The Board has entertained both requests for arbitration and improper practice changes asserted by unions representing prevailing wage titles in circumstances similar to those present here. See Local621, SEIU & Giattino v. City, 67 OCB 2 (BCB 2001 ); see also Local1157, 2 OCB2d 10 (BCB 2009) (dismissing as unripe, but without prejudice, retaliation claims on behalf of prevailing wage employees ) Thus, the City may not wield Labor Law §220 as both a shield and a sword- denying any obligation to negotiate in good faith over terms and conditions of employment while simultaneously objecting to recourse under Triborough due to the Unions' status as prevailing wage employees. If, pursuant to the City's own formulation, all that has happened is that these titles have been shifted back to the full jurisdiction of BCB and the NYCCBL, then protections related to the negotiation of wages and supplements have been restored to the jurisdiction of BCB. See Richard Steier, "City Trades Workers Suing Over Mayor's Prevailing- that they "have not pointed to any law that expressly protect[ s] prevailing wage employees against unilateral changes ... "). 29 Wage Shift," THE CHIEF LEADER (April27, 2012) (citing the Mayor's statement that the change "merely placed the roughly 10,000 trades workers covered under Section 220 in the same bargaining structure that [the City] used for 97 [percent] of the municipal workforce.").4 Accepting that the reclassification achieved its intended result, the Unions may now seek enforcement of the rule against unilateral changes to such fundamental terms of employment as wages and supplements before BCB, rather than to the Comptroller. C.f. Local1157, 2 OCB2d 10, at * 15 (characterizing N.Y.S. Pub. Employ't Relations Bd. v. Bd. of Educ., 39 N.Y.2d 86 (1976) as a case in which "the City [ofBuffalo] had removed the affected employees from prevailing wage status, [therefore] any claim that such status could be invoked to debar jurisdiction was one that the employer was not well suited to raise"). The reclassification does not permit the City to now unilaterally impose different wages and supplements upon new hires, creating a second (inferior) class of employees within the same title and unit. Equally baffling is the City's apparent contempt for the very concept of a Consent Determination. No sword ofDamocles compelled the City to enter into the agreements, nor any concession "extracted." These agreements were the result of good faith collective bargaining. They continue to apply to incumbents not because the City has deigned to so consent, but because the agreements are 4 Available at http://thechiefleader.com/news/news of the week/city-trades-workers- suing-over-mayor-s-prevailing-wage-shift/article fa0e4da8-8b3 8-11 e 1-bef3-00 19bb30f31 a.html. 30 enforceable and, by the City's own admission, subject to the NYCCBL, prohibiting unilateral changes in terms and conditions of employment. Ultimately, newly hired skilled trade employees do not fall into a legal "no- man's-land" effected by the reclassification. Whether under Labor Law §220(8-d), the NYCCBL or the existing agreements covering the reclassified prevailing wage titles, they are shielded from the City's arbitrary, capricious and unilateral conduct. 31 CONCLUSION Wherefore, amicus curiae MLC respectfully requests that the Court grant leave for it to submit the instant brief in further opposition to the City's appeal. Dated: New York, New York February 18, 2014 Of Counsel: Lee M. Leviter STROOCK & STROOCK & LA VAN LLP By: Ala Din 180 Maiden Lane ' New York, New York 10038 T: (212) 806-5400 aklinger@stroock.com Counsel for Amicus Curiae 32