Board of Educ. of City School Dist. of City of New York v. New York State Public Employment Relations Bd.

• Decision Date: 01 May 1990
• Citation: 75 N.Y.2d 660,555 N.Y.S.2d 659,554 N.E.2d 1247
• Parties: , 554 N.E.2d 1247, 60 Ed. Law Rep. 909 In the Matter of BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF THE CITY OF NEW YORK et al., Respondents, v. NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 659

555 N.Y.S.2d 659

75 N.Y.2d 660, 554 N.E.2d 1247, 60

Ed. Law Rep. 909

In the Matter of BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF THE CITY OF NEW YORK et al., Respondents, v. NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD et al., Appellants.

Court of Appeals of New York.

May 1, 1990.

[554 N.E.2d 1248] John M. Crotty and Jerome Thier, for New York State Public Employment Relations Bd., appellant.

Bruce K. Bryant, J. Christopher Meagher, Stephen L. Fine, Rosaria R. Esperon, James R. Sandner, New York City, and Robert Perez-Wilson[75 N.Y.2d 662] for Council of Supervisors and Adm'rs, Local 1, AFSA, AFL-CIO, and others, appellants.

Victor A. Kovner, Corp. Counsel (Paul T. Rephen, New York City, and David Karnovsky, of counsel), for respondents.

Nancy E. Hoffman, Marilyn S. Dymond and Robert T. DeCataldo, [75 N.Y.2d 663] Delhi, for Civ. Service Employees Ass'n, Inc., Local 1000, AFSCME, AFL-CIO, amicus curiae.

OPINION OF THE COURT

KAYE, Judge.

Does the public interest in detecting and deterring official corruption prohibit collective bargaining concerning employee disclosure requirements imposed by New York City's Board of Education? For the reasons that follow, we disagree with the Appellate Division's broad assessment that public policy bars all negotiation on the subject.

In 1975, the Legislature amended Education Law § 2590-g ("Powers and duties of the city board") by adding subdivisions (13) and (14)--the statutes that gave rise to this litigation. Those amendments for the first time authorized the New York City School Board (the Board) to obtain certain financial disclosures from its officers and employees. ¹ Nine years later, invoking its authority under these subdivisions, the Board adopted two regulations promulgated by the City School District Chancellor. These measures were apparently prompted by the widely publicized improprieties committed by a former Chancellor, and were intended to restore public confidence in the integrity of the school system. The regulations required designated Board employees at certain wage levels to submit detailed annual financial disclosure statements. Some employees were additionally required to undergo an in-depth background investigation that involved, among many other things, consent to verification of tax and credit information, disclosure of former employers' records, health information, disclosure of certain political party associations, consent to be fingerprinted, and an agreement to hold the City harmless for all damages arising out of the investigation, save for those resulting from a breach of confidentiality. Failure to comply with the financial reporting requirements or other disclosure mandates could result in termination or denial of appointment, assignment or promotion.

Following adoption of the regulations, a number of unions representing affected employees filed improper employer practice charges with the Public Employment Relations Board (PERB), claiming that the disclosure requirements and background investigations constituted "terms and conditions of employment" subject to mandatory negotiation under the Taylor Law, and could not be imposed unilaterally by the Board. The unions also charged that the Board's refusal to negotiate despite union demands violated Civil Service Law § 209-a(1)(d).

In a consolidated decision upon administrative appeal, PERB ruled that the Board had no duty to negotiate the specific financial reporting requirements set out in Education Law § 2590-g(13). ² However, it concluded that the Board was not unilaterally entitled to require disclosure of additional information under section 2590-g(14). Noting the far broader discretion as to the actual reporting requirements given the Board under subdivision (14), and weighing the various affected interests, PERB concluded that--other than the disclosure required by subdivision (13)--all the disclosures required by the Board were terms and conditions of employment that had to be negotiated.

The Board then instituted this article 78 proceeding seeking annulment of PERB's determination. Supreme Court confirmed PERB's determination, but the Appellate Division reversed (147 A.D.2d 70, 542 N.Y.S.2d 53). In the view of the Appellate Division, collective bargaining over any disclosure requirements was necessarily prohibited in order to effectuate "the strong public interest in detecting and deterring corruption," as "[i]t would be absurd to require the Board here to negotiate over anticorruption measures with the very employees whose honesty and integrity are at issue." (Id., at 74, 542 N.Y.S.2d 53.) We now reverse and dismiss the Board's petition.

Analysis

At the outset of our analysis it is useful to establish the frame of reference within which the parties' contentions should be evaluated. "In public employment law, 'prohibited' subjects are those forbidden, by statute or otherwise, from being embodied in a collective bargaining agreement. 'Mandatory' subjects are those over which employer and employees have an obligation to bargain in good faith to the point of impasse. 'Permissive' subjects are those as to which either side may, but is not obligated to bargain." (Matter of Incorporated Vil. of Lynbrook v. New York State Pub. Employment Relations Bd., 48 N.Y.2d 398, 402-403, n. 1, 423 N.Y.S.2d 466, 399 N.E.2d 55.)

The Board maintains, as the Appellate Division held, that its disclosure requirements are a prohibited subject of collective bargaining by virtue of the strong public interest in rooting out corruption. Alternatively, the Board maintains that those policy concerns required, at the very least, that PERB recognize that the requirements are a permissive subject of negotiations, and that the Board need not enter into negotiations unless it chooses to do so. The unions, of course, contend that the disclosure requirements are "terms and conditions of employment" within the meaning of Civil Service Law § 201(4), and must be negotiated (Civil Service Law § 204[3].

Also germane to the present discussion are well-established principles concerning the scope of our review. As the agency charged with interpreting the Civil Service Law, PERB is accorded deference in matters falling within its area of expertise (see, Matter of Rosen v. New York State Pub. Employment Relations Bd., 72 N.Y.2d 42, 47, 530 N.Y.S.2d 534, 526 N.E.2d 25). In cases involving the issue of mandatory or prohibited bargaining subjects under the Civil Service Law, we have defined our review power as a limited one: "[s]o long as PERB's interpretation is legally permissible and so long as there is no breach of constitutional rights and protections, the courts have no power to substitute another interpretation." (Matter of West Irondequoit Teachers Assn. v. Helsby, 35 N.Y.2d 46, 50, 358 N.Y.S.2d 720, 315 N.E.2d 775.) However, where the issue is one of statutory interpretation, dependent on discerning legislative intent, judicial review is not so restricted, as statutory construction is the function of the courts, not PERB. (Matter of Rosen v. New York State Pub. Employment Relations Bd., 72 N.Y.2d, at 47-48, 530 N.Y.S.2d 534, 526 N.E.2d 25, supra.) Prohibited Bargaining Subjects

We turn first to the Board's claim--concurred in by the Appellate Division--that the disclosure requirements are a "prohibited" subject of collective bargaining. According to the Board, Education Law § 2590-g(14) embodies a strong public policy to detect and deter corruption; to subject anticorruption measures to the give-and-take of the negotiating process would necessarily compromise, or appear to the public to compromise, the Board's ability to maintain the highest standards of integrity among its employees. Therefore, reasons the Board, implicit in the statutory scheme empowering the Board to require disclosure is prohibition of collective bargaining. In addition, the Board suggests that permitting the unions to negotiate over the disclosure requirements would significantly infringe its nondelegable responsibility for "the general management, operation, control, maintenance and discipline of schools." (Education Law § 2554[13][b].)

The obligation under the Taylor Law to bargain as to all terms and conditions of employment is a "strong and sweeping policy of the State" (Matter of Cohoes City School Dist. v. Cohoes Teachers Assn., 40 N.Y.2d 774, 778, 390 N.Y.S.2d 53, 358 N.E.2d 878; Board of Educ. v. Associated Teachers, 30 N.Y.2d 122, 129, 331 N.Y.S.2d 17, 282 N.E.2d 109). In a few instances, however, what might otherwise be negotiable terms and conditions of employment are prohibited from being collectively bargained. For example, a statute may direct that certain action be taken by the employer, leaving no room for negotiation (see, Matter of Union Free School Dist. No. 2 v. Nyquist, 38 N.Y.2d 137, 379 N.Y.S.2d 10, 341 N.E.2d 532). Similarly, a subject that would result in school board surrender of nondelegable statutory responsibilities cannot be negotiated (see, Matter of Cohoes City School Dist. v. Cohoes Teachers Assn., 40 N.Y.2d 774, 390 N.Y.S.2d 53, 358 N.E.2d 878, supra; Board of Educ. v. Areman, 41 N.Y.2d 527, 394 N.Y.S.2d 143, 362 N.E.2d 943). That certain statutory obligations of a school board are nondelegable, we have held, is an implicit expression of public policy that forecloses negotiation (see, Matter of Cohoes City School Dist. v. Cohoes Teachers Assn., 40 N.Y.2d, at 778, 390 N.Y.S.2d 53, 358 N.E.2d 878, supra ).

We have also recognized that there may be general public policy limitations on collective bargaining that are not derived from statute (see, Matter of Susquehanna Val. Cent. School Dist. [Susquehanna Val. Teachers' Assn.], 37 N.Y.2d 614, 617, 376 N.Y.S.2d 427, 339 N.E.2d 132). However, we have never actually prohibited bargaining or invalidated a collective bargaining agreement on such a nonstatutory public policy ground. As we have noted, a public policy strong enough to...