In the Matter of Susan M. Kent,, Respondent,v.Jerome Lefkowitz,, et al., Appellants.BriefN.Y.March 30, 2016APL-2014-00229 To be argued by: JULIE M. SHERIDAN Time requested: 10 minutes App. Div. Third Dept. No. 518219 Court of Appeals of the State of New York IN THE MATTER OF THE APPLICATION OF SUSAN M. KENT, AS PRESIDENT OF THE NEW YORK STATE PUBLIC EMPLOYEES FEDERATION, AFL-CIO, Petitioner-Respondent, -AGAINST- JEROME LEFKOWITZ, AS CHAIRMAN OF THE NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD; THE NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD; THE NEW YORK STATE GOVERNOR’S OFFICE OF EMPLOYEE RELATIONS, BY GARY JOHNSON, DIRECTOR; AND THE NEW YORK STATE RACING AND WAGERING BOARD, BY JOHN D. SABINI, CHAIRMAN, Respondents-Appellants. REPLY BRIEF FOR APPELLANTS NYS GOER AND RACING AND WAGERING BOARD BARBARA D. UNDERWOOD Solicitor General ANDREA OSER Deputy Solicitor General JULIE M. SHERIDAN Assistant Solicitor General of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Appellants NYS GOER, Racing & Wagering Board The Capitol Albany, New York 12224-0341 Telephone No. (518) 776-2029 Facsimile No. (518) 915-7724 Dated: July 6, 2015 Reproduced on Recycled Paper TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ................................................................................ ii PRELIMINARY STATEMENT ............................................................................1 ARGUMENT POINT I PERB’S DETERMINATION WAS BASED ON A RATIONAL UNDERSTANDING OF THE SIDE-LETTER AGREEMENT, IS ENTITLED TO DEFERENCE AND SHOULD BE CONFIRMED ........................................................................................2 POINT II THE DUTY SATISFACTION DEFENSE IS CONSISTENT WITH THE TAYLOR LAW AND DOES NOT VITIATE STATUTORY BARGAINING RIGHTS .....................................................3 CONCLUSION ......................................................................................................7 i TABLE OF AUTHORITIES CASES PAGE City of Watertown v. State Pub. Empl. Rels. Bd., 95 N.Y.2d 73 (2000) ....................................................................................3 Transport Workers Union of Greater New York, 41 PERB § 3014 (2008) ........................................................................... 3,5 STATE STATUTES Civil Service Law article 14 ......................................................................................................3 § 200 ............................................................................................................4 § 209-a(1)(d) .................................................................................................4 Racing, Pari-Mutuel Wagering and Breeding Law § 102 ......................................................................................................... 1n ii PRELIMINARY STATEMENT At issue in this appeal is whether the Public Employees Relations Board (PERB) rationally determined that the State satisfied its duty to negotiate with the New York State Public Employees Federation (PEF) before announcing that the per diem wages that would be paid to seasonal workers employed by the New York State Racing and Wagering Board (Board) for the 1996 racing season would be less than those paid to seasonal workers during the 1995 racing season. As the appellants’ opening briefs and PERB’s reply brief amply demonstrate, PERB’s determination was based on a rational understanding of the side-letter to the collective bargaining agreement between the State and PEF, and should have been confirmed by the Third Department. Respondents-appellants the Governor’s Office of Employee Relations (GOER) and the Board1 (collectively the “State respondents”) adopt the arguments asserted by PERB in its reply brief, and add the following comments in reply to Points I and III of PEF’s brief. 1 Effective February 1, 2013, the Board merged into the newly-created New York State Gaming Commission. See Racing, Pari-Mutuel Wagering and Breeding Law § 102. ARGUMENT POINT I PERB’S DETERMINATION WAS BASED ON A RATIONAL UNDERSTANDING OF THE SIDE-LETTER AGREEMENT, IS ENTITLED TO DEFERENCE AND SHOULD BE CONFIRMED As discussed in the State respondents’ opening brief (at 19-22) and in PERB’s briefs, PERB’s understanding of the side-letter agreement— and in particular, PERB’s assessment of the nature and extent of the negotiations it reflected—was rational and supported by the language of that agreement. Under settled precedent, PERB’s determination is therefore entitled to deference even if, as PEF argues (Br. at 14-18), the side-letter is susceptible to more than one reasonable interpretation. As the administrative decisions cited by PEF illustrate (Br. at 10- 14), a finding by PERB that an employer established the defense of duty satisfaction requires the application of “standard principles of contract interpretation” (Br. at 10), and thus is necessarily fact-specific. Where there are detailed and comprehensive contract provisions addressing the subject at issue in the improper practice charge—here, the limitations on the Budget Director’s wage-setting discretion—the Court should defer to PERB’s determination that “the parties negotiated an 2 agreement upon terms which are reasonably clear on the subject” at issue. Transport Workers Union of Greater New York, 41 PERB ¶ 3014 (2008). Notably, PEF does not cite a single judicial decision reversing a determination by PERB that an employer established the duty satisfaction defense. This Court should decline to do so here. POINT II THE DUTY SATISFACTION DEFENSE IS CONSISTENT WITH THE TAYLOR LAW AND DOES NOT VITIATE STATUTORY BARGAINING RIGHTS Contrary to PEF’s argument (Br. at 23-26), PERB’s longstanding recognition of the duty satisfaction defense is consistent with the New York Public Employees’ Fair Employment Act, codified at Civil Service Law article 14 and known as the Taylor Law. Where, as here, an employer identifies contractual language that makes it reasonably clear that the parties bargained over a particular subject to completion and reached agreement, it is rational for PERB to conclude that the employer satisfied its bargaining obligations under the Taylor Law. The Taylor Law requires public employers to bargain in good faith concerning all “terms and conditions” of employment. City of Watertown v. State Pub. Empl. Rels. Bd., 95 N.Y.2d 73, 78 (2000). In general, 3 therefore, employers may not unilaterally change a term or condition of employment that is a mandatory subject of bargaining. See Civil Service Law § 209-a(1)(d). However, if the employer bargained with the union over the subject at issue to completion and reached agreement, and then makes a change not prohibited by the agreement, it has satisfied its duty to bargain. PEF is wrong to contend (Br. at 25) that the concept of duty satisfaction was “invented” by PERB. To the contrary, a finding by PERB that the duty satisfaction defense was established in a particular improper labor practice case merely equates to a finding that the employer had a duty to bargain with the union over the subject at issue but satisfied that duty, and thus did not violate the Taylor Law. Nor is the duty satisfaction defense antithetical to the public policy concerns reflected in the Taylor Law. It “promotes harmonious and cooperative relationships between government and its employees” (Civil Service Law § 200) by simultaneously recognizing that the employer has a duty to bargain over terms and conditions of employment while giving effect to contractual provisions that were previously bargained over and agreed upon. 4 Finally, PEF’s expressed concern (Br. at 23) that PERB’s recognition of the duty satisfaction defense creates an “impossible negotiating burden” is unfounded. According to PEF, the only way for a union to avoid the duty satisfaction defense is to negotiate every conceivable aspect of every term and condition of employment and specifically address them all in their collective bargaining agreement, which will “serve to keep the parties at the negotiating table for ever increasing time periods” (Br. at 25). But that is simply not true. The duty satisfaction defense only applies where provisions in a collective bargaining agreement explicitly or implicitly address the subject that is at issue in the improper practice charge. Thus, in the absence of any such provisions, the defense is inapplicable. And even where the agreement addresses the subject, the defense will only apply if the employer meets its burden of proffering record evidence to establish that the agreement’s terms are “reasonably clear” on the subject. Transport Workers Union of Greater New York, 41 PERB ¶ 3014 (2008). Here, the record established that the State and PEF engaged in extensive discussions regarding the terms and conditions of employment of seasonal racetrack workers. They agreed to detailed and 5 comprehensive provisions addressing compensation. Some of those provisions limited the Budget Director’s statutory wage-setting discretion under certain circumstances. But they did not limit the Budget Director’s discretion to set the 1996 per diem wage rates. Read in their entirety, these provisions provide abundant “evidence that the parties knew that they were negotiating” over limits on the exercise of the Budget Director’s discretion, and PEF’s claims to the contrary (Br. at 24) are unfounded. 6 CONCLUSION For the reasons stated above, and for the reasons stated in the State respondents’ opening brief and PERB’s briefs, the Appellate Division’s decision and order should be reversed. Dated: Albany, New York July 6, 2015 Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Appellants NYS GOER, Racing & Wagering Bd. By: _______________________ JULIE M. SHERIDAN Assistant Solicitor General Office of the Attorney General The Capitol Albany, New York 12224-0341 Telephone No. (518) 776-2029 Facsimile No. (518) 915-7724 BARBARA D. UNDERWOOD Solicitor General ANDREA OSER Deputy Solicitor General JULIE M. SHERIDAN Assistant Solicitor General of Counsel Reproduced on Recycled Paper 7