City of Yonkers v. Yonkers Fire Fighters, Local 628

OPINION OF THE COURT Pigott, J. At issue in this case is the meaning of the words “in effect” as contained in Laws of 2009, chapter 504 (part A, § 8), specifi — 655 — cally whether expired collective bargaining agreements are “in effect” for purposes of that statute because of the so-called Triborough Law. Petitioner, the City of Yonkers, and respondent, Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, entered into a collective bargaining agreement (CBA), dated July 1, 2002, which, by stipulation, was extended to June 30, 2009. In the CBA, the City agreed to offer its firefighters the option of enrolling in one of two retirement plans, and agreed that it would bear “the complete cost” of contributions, “pursuant to . . . State law.” In 2009, in response to the fiscal crisis, Governor Paterson and the legislature ended the right of newly hired firefighters to join such noncontributory pension plans. The legislature enacted article 22 of the Retirement and Social Security Law, effective in January 2010, which placed new members of the New York State and Local Police and Fire Retirement System in a new tier of pension benefits—tier 5—requiring members to contribute 3% of their salaries toward their pensions (see Retirement and Social Security Law § 1204). The focus of this appeal is a narrow exception provided in section 8 of the 2009 legislation. “Notwithstanding any provision of law to the contrary, nothing in this act shall limit the eligibility of any member of an employee organization to join a special retirement plan open to him or her pursuant to a collectively negotiated agreement with any state or local government employer, where such agreement is in effect on the effective date of this act and so long as such agreement remains in effect thereafter; provided, however, that any such eligibility shall not apply upon termination of such agreement for employees otherwise subject to the provisions of article twenty-two of the retirement and social security law” (L 2009, ch 504, part A, § 8 [emphasis added]). Following the 2009 legislation, no agreement on a new CBA was reached in Yonkers. The City, noting the June 30, 2009 termination date of the CBA, required firefighters who were hired after that date to pay 3% of their wages towards retirement benefits. In response, the Union filed an improper practice charge with the New York State Public Employment Relations Board (PERB), alleging that the City had erred in failing to apply the CBA to firefighters hired by the City after the CBA’s — 656 — termination date. The Union relied on the exception contained in section 8, as well as Civil Service Law § 209-a (1) (e), often referred to as the Triborough Law.* After PERB referred the matter to arbitration, the City commenced this proceeding for a permanent stay of arbitration on the ground that arbitration is barred by Civil Service Law § 201 (4) and Retirement and Social Security Law § 470. Supreme Court rejected this argument, and dismissed the proceeding; but the Appellate Division reversed, and granted the petition, holding that the statutes cited are a bar to arbitration. “[T]he CBA, which terminated by its own terms in June 2009, was no longer ‘in effect’ at the time of the effective date of article 22 of the Retirement and Social Security Law,” with the result that “the exception set forth in section 8 of that article is inapplicable” (90 AD3d 1043, 1044-1045 [2d Dept 2011]). We granted the Union leave to appeal (19 NY3d 802 [2012]), and now affirm. A grievance may be submitted to arbitration only if (1) it is lawful for the parties to arbitrate the dispute and (2) the parties agreed to arbitrate that kind of dispute (see e.g. Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d 273, 278 [2002]). The City argues that the first condition is not met, because arbitration of the present dispute is prohibited by statute. Public employers executing a CBA are prohibited from negotiating and granting retirement benefits that are not already expressly provided under state law. (A CBA may provide for retirement benefits as authorized by law, which is why the CBA here was valid until article 22 was enacted.) Civil Service Law § 201 (4) prohibits the negotiation of “benefits provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees, or payment to retirees or their beneficiaries.” Retirement and Social Security Law § 470 similarly proscribes “[c]hanges negotiated between any public employer and public employee . . . with respect to any benefit provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees or payment to retirees or their beneficiaries.” — 657 — As the parties frame their dispute, whether the arbitration sought by the Union would amount to negotiation prohibited by these statutes depends on whether the CBA was “in effect” pursuant to section 8, when article 22 of the Retirement and Social Security Law became effective, or had terminated within the meaning of that statute. If it was not “in effect,” then arbitration would be an attempt at negotiation of the 3% now imposed on new firefighters and is barred. The Triborough doctrine, upon which the Union relies, was codified by the enactment of Civil Service Law § 209-a (see L 1982, ch 868). With an exception not applicable here, that section provides that it is “an improper practice for a public employer or its agents deliberately ... to refuse to continue all the terms of an expired agreement until a new agreement is negotiated” (Civil Service Law § 209-a [1] [e] [emphasis added]). The law “requires an employer to continue all the terms of an expired CBA while a new agreement is being negotiated . . . [U]nder the statute, the assumption is that all terms of a CBA remain in effect during collective bargaining of a successor agreement” (Matter of Professional Staff Congress-City Univ. of N.Y. v New York State Pub. Empl. Relations Bd., 7 NY3d 458, 466, 469 [2006]). The purpose is “to preserve the status quo in situations where a [CBA] between a public employer and its employees has expired and a new one has yet to be agreed upon” (id. at 467, quoting Matter of Goodman [Barnard Coll.—Commissioner of Labor], 95 NY2d 15, 22 [2000]). Because no successor CBA was negotiated in the present case, the Triborough Law would apply, and the CBA’s terms would be continued, unless contradicted by statute. Here, however, the part of the CBA that required noncontributory plans is rendered unlawful by article 22 of the Retirement and Social Security Law, which prohibits such plans, unless the section 8 exception is applicable. The Union argues that the section 8 exception applies because it extends to CBAs that have expired but are deemed to remain in effect because of the Triborough Law. This was not the legislature’s intent. If the legislature had intended to invoke the Triborough doctrine, it would certainly have made that explicit. Instead, the legislature, having set forth the section 8 exception for CBAs that are “in effect,” expressly states that eligibility to join a CBA’s retirement plan “shall not apply upon termination of such agreement” (L 2009, ch 504, part A, § 8). This language makes clear that the legislature did not intend to apply the — 658 — exception to agreements that had expired and could only be deemed to continue through the Triborough Law. This interpretation is further supported by the legislative history. Governor Paterson noted in a Program Bill Memorandum that section 8 of the bill ensures “that members of an employee organization that are eligible to join a special retirement plan pursuant to a collectively negotiated agreement with any state or local government employer, would be able to continue to enroll in that special plan after the enactment of this bill, until the date on which such agreement terminates” (Governor’s Program Bill Mem, Bill Jacket, L 2009, ch 504 at 9 [emphasis added]). Again, the chosen language indicates that a noncontributory plan does not outlast the expiration of the CBA. Under the Union’s interpretation of the statute, the legislature would have been creating a loophole whereby a union, by the simple expedient of refusing to reach agreement on a new CBA, could ensure the continuation of noncontributory pension benefits to new hires, conceivably ad infinitum. Instead, it is clear that the legislature intended to honor only agreements providing for noncontributory status that had not expired at the time the statute became effective. The Union further argues that if section 8 did not encompass a CBA deemed to continue under the Triborough Law, then section 8 would run afoul of the Contract Clause of the United States Constitution—“No State shall . . . pass any . . . Law impairing the Obligation of Contracts” (US Const, art I, § 10 [1]). This argument begs the question of whether the contract at issue here remains in effect. Under our analysis, there were no contractual obligations to impair. Finally, we disagree with the dissent’s position that the language of tier 6 (L 2012, ch 18, § 80) is evidence that, in enacting article 22 of the Retirement and Social Security Law, the legislature intended to authorize participation in noncontributory pension benefits pursuant to agreements that had expired. Significantly, the dissent points to no legislative history supporting its theory that the express references to “unexpired” CBAs were included in 2012 because the legislature reached a different policy judgment than it had in 2009. Rather, the natural inference is that the legislature intended to be more plain, the second time around, and avoid language that would invite disputes such as this. We conclude that the exception to Retirement and Social Security Law article 22 contained in section 8 (L 2009, ch 504, — 659 — part A) does not apply to the CBA at issue here, so that the noncontributory pension benefits to which firefighters were entitled pursuant to the CBA are prohibited by article 22, despite the Triborough Law. Therefore, the arbitration sought by the Union is barred, as an impermissible negotiation of pension benefits, by Civil Service Law § 201 (4) and Retirement and Social Security Law § 470. Accordingly, the order of the Appellate Division should be affirmed, with costs. Footnotes [*] See Matter of Triborough Bridge & Tunnel Auth. (District Council 37 & Local 1396, Am. Fedn. of State, County & Mun. Empls., AFL-CIO), 5 PERB ¶ 3037 (1972), confirming 5 PERB ¶ 4505 (1972); Matter of Professional Staff Congress-City Univ. of N.Y. v New York State Pub. Empl. Relations Bd., 7 NY3d 458, 466 (2006).