Chenango Forks Cent. Sch. Dist. v. State Pub. Emp't Relations Bd.

• Decision Date: 10 May 2012
• Citation: 944 N.Y.S.2d 665,95 A.D.3d 1479,279 Ed. Law Rep. 1113,2012 N.Y. Slip Op. 03700
• Parties: In the Matter of CHENANGO FORKS CENTRAL SCHOOL DISTRICT, Petitioner, v. NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD et al., Respondents.
• Court: New York Supreme Court — Appellate Division

95 A.D.3d 1479

944 N.Y.S.2d 665

279 Ed. Law Rep. 1113

2012 N.Y. Slip Op. 03700

In the Matter of CHENANGO FORKS CENTRAL SCHOOL DISTRICT, Petitioner,

v.NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD et al., Respondents.

Supreme Court, Appellate Division, Third Department, New York.

May 10, 2012.

Coughlin & Gerhart, L.L.P., Binghamton (Lars P. Mead of counsel), for petitioner.

David P. Quinn, New York State Public Employment Relations Board, Albany, for New York State Public Employment Relations Board, respondent.

Richard E. Casagrande, New York State United Teachers, Albany (Frederick K. Reich of counsel), for Chenango Forks Teachers Association, NYSUT, AFT, AFL–CIO, Local 2561, respondent.

Before: PETERS, P.J., ROSE, LAHTINEN, KAVANAGH and GARRY, JJ.

PETERS, P.J.

Proceeding pursuant to CPLR article 78 (transferred to this Court by order of the Supreme Court, entered in Albany County) to review a determination of respondent Public Employment Relations Board which found that petitioner had committed an improper employer practice.

In June 2003, petitioner sent a memorandum to faculty and staff represented by respondent Chenango Forks Teachers Association, NYSUT, AFT, AFL–CIO, Local 2561 (hereinafter the Association) announcing that it would cease its longstanding practice of reimbursing retirees' Medicare Part B premiums. Although the 2001–2004 collective bargaining agreement (hereinafter CBA) in place at the time between petitioner and the Association did not explicitly obligate petitioner to make such reimbursements, petitioner had done so since at least 1980 when such reimbursement was required by the Empire Plan, the health insurance plan provided to employees up until 1990. That year, petitioner and the Association entered into a new CBA, and health insurance coverage was changed to Blue Cross/Blue Shield, which did not require the reimbursement of Medicare Part B premiums. Petitioner, however, continued to make such reimbursements.

As a result of the June 2003 memorandum, the Association initiated a grievance alleging a violation of the CBA.¹ At the same time, the Association filed an improper practice charge with respondent Public Employment Relations Board (hereinafter PERB) alleging that petitioner violated Civil Service Law § 209–a (1)(d) by failing to negotiate the discontinuance of reimbursement of Medicare Part B premiums. PERB conditionally dismissed the charge subject to a motion to reopen the matter after the conclusion of the grievance procedure. When the grievance proceeded to arbitration, an arbitrator determined that petitioner was under no contractual obligation to continue the payments.

Thereafter, the Association successfully moved to reopen the PERB proceeding. Following a hearing, an Administrative Law Judge (hereinafter the ALJ) found that petitioner's practice of reimbursement had “giv[en] rise to a reasonable expectation by current employees that they proceed under a promise of post-retirement [reimbursement]” and, thus, petitioner's unilateral decision to discontinue reimbursement violated its collective bargaining obligations under Civil Service Law § 209–a (1)(d). Upon administrative appeal, PERB rejected petitioner's several exceptions, but remanded the case to the ALJ to take additional evidence from the parties as to whether the Association and/or current employees had actual or constructive knowledge of the reimbursement so as to determine whether either had a reasonable expectation that the practice would continue. Following a hearing during which testimony was presented from a number of current and former employees of petitioner, as well as Association representatives, the ALJ determined that both the Association and employees had been aware of the at-issue reimbursement for several years prior to the June 2003 memorandum and, thus, petitioner had violated Civil Service Law § 209–a (1)(d) by unilaterally ceasing the practice without negotiation. PERB affirmed the ALJ's decision and this CPLR article 78 proceeding challenging PERB's determination ensued.

Under the Taylor Law, a public employer is obligated to negotiate in good faith with the bargaining representative of its current employees regarding “terms and conditions of employment” (Civil Service Law § 204 [2] ), and the failure to do so constitutes an improper employment practice ( seeCivil Service Law § 209–a [1][d] ). “Pursuant to this duty to negotiate, where a past practice between a public employer and its current employees is established, involving a mandatory subject of negotiation, the Taylor Law would bar the employer from discontinuing that practice without prior negotiation” (Matter of Aeneas McDonald Police Benevolent Assn. v. City of Geneva, 92 N.Y.2d 326, 331, 680 N.Y.S.2d 887, 703 N.E.2d 745 [1998] [citations omitted]; see Matter of State of New York [Div. of Military & Naval Affairs] v. New York State Pub. Empl. Relations Bd., 187 A.D.2d 78, 82, 592 N.Y.S.2d 847 [1993];Matter of Incorporated Vil. of Hempstead v. Public Empl. Relations Bd., 137 A.D.2d 378, 383, 529 N.Y.S.2d 219 [1988],lv. denied72 N.Y.2d 808, 534 N.Y.S.2d 666, 531 N.E.2d 298 [1988];Matter of Board of Coop. Educ. Servs. Sole Supervisory Dist., Onondaga & Madison Counties v. New York State Pub. Empl. Relations Bd., 82 A.D.2d 691, 693–694, 444 N.Y.S.2d 226 [1981] ).

We reject petitioner's assertion that reimbursement of Medicare Part B premiums is not a “term and condition of employment” subject to mandatory negotiation. Health benefits for current employees are a form of compensation, and thus a term of employment that is a mandatory subject of negotiation ( see Matter of Aeneas McDonald Police Benevolent Assn. v. City of Geneva, 92 N.Y.2d at 331–332, 680 N.Y.S.2d 887, 703 N.E.2d 745). While Civil Service Law § 201(4) prohibits negotiation of certain retirement benefits, the continuation of health insurance payments to current employees after their retirement is not a retirement benefit within the meaning of that provision ( see Matter of Incorporated Vil. of Lynbrook v. New York State Pub. Empl. Relations Bd., 48 N.Y.2d 398, 404, 423 N.Y.S.2d 466, 399 N.E.2d 55 [1979];Matter of Jefferson–Lewis–Hamilton–Herkimer–Oneida BOCES [JLHHO BOCES Professional Assn.], 219 A.D.2d 801, 802, 631 N.Y.S.2d 962 [1995],lv. denied87 N.Y.2d 812, 644 N.Y.S.2d 145, 666 N.E.2d 1059 [1996] ). Rather, such health insurance benefits, although paid after retirement, constitute a form of compensation earned by the employee while employed. Thus, as the Court of Appeals has held, and PERB rationally concluded here, petitioner “ha[d] a duty to negotiate with the bargaining representative of current employees regarding any change in a past practice affecting their own retirement health benefits” (Matter of Aeneas McDonald Police Benevolent Assn. v. City of Geneva, 92 N.Y.2d at 332, 680 N.Y.S.2d 887, 703 N.E.2d 745 [emphasis omitted]; see Matter of Incorporated Vil. of Lynbrook v. New York State Pub. Empl. Relations Bd., 48 N.Y.2d at 404, 423 N.Y.S.2d 466, 399 N.E.2d 55;Matter of Jefferson–Lewis–Hamilton–Herkimer–Oneida BOCES [JLHHO BOCES Professional Assn.], 219 A.D.2d at 802, 631 N.Y.S.2d 962;Matter of Corinth Cent. School Dist. [Corinth Teachers Assn.], 77 A.D.2d 366, 367, 434 N.Y.S.2d 725 [1980],lv. denied53 N.Y.2d 602, 439 N.Y.S.2d 1025, 421 N.E.2d 852 [1981] ).

We next address the question of whether a binding past practice was established. Initially, we cannot agree with the dissent's conclusion that PERB abused its discretion in declining to defer to the arbitrator's finding in the grievance proceeding that a past practice did not exist.² The issue before PERB was whether, irrespective of any contractual obligation in the parties' CBA, a past practice of reimbursing retirees for Medicare Part B premiums was established such that petitioner was barred from discontinuing that practice without prior negotiation ( see Matter of Aeneas McDonald Police Benevolent Assn. v. City of Geneva, 92 N.Y.2d at 331, 680 N.Y.S.2d 887, 703 N.E.2d 745;Matter of Incorporated Vil. of Hempstead v. Public Empl. Relations Bd., 137 A.D.2d at 383, 529 N.Y.S.2d 219;Matter of Board of Coop. Educ. Servs. Sole Supervisory Dist., Onondaga & Madison Counties v. New York State Pub. Empl. Relations Bd., 82 A.D.2d at 693, 444 N.Y.S.2d 226). In determining whether a binding past practice exists, PERB's inquiry focuses on whether the employer's “practice was unequivocal and was continued uninterrupted for a period of time under the circumstances to create a reasonable expectation among the affected unit employees that the [practice] would continue” ( Matter of Manhasset Union Free School Dist. v. New York State Pub. Empl. Relations Bd., 61 A.D.3d 1231, 1233, 877 N.Y.S.2d 497 [2009] [internal quotation marks and citations omitted]; accord Matter of Fashion Inst. of Tech. v. New York State Pub. Empl. Relations Bd., 68 A.D.3d 605, 605, 891 N.Y.S.2d 371 [2009] ). In stark contrast, the specific issue before the arbitrator was whether petitioner was under a contractual obligation to make Medicare Part B reimbursement payments to retirees.

As the arbitrator noted at the outset of his decision, his jurisdiction was derived solely from the parties' CBA and limited to interpreting the language contained within the four corners of the agreement. The arbitrator ultimately concluded that petitioner did not have a contractual obligation to reimburse retirees for Medicare Part B premiums because the CBA lacked language requiring such payments and did not contain a maintenance of benefits clause requiring the continuation of noncontractual past practices. Thus, the arbitrator's statement in the award that there was no past practice regarding the at-issue benefits was entirely dicta and, as noted by PERB, was neither convincing nor binding upon it ( see Matter of Schuyler–Chemung–Tioga Educ. Assn. [Schuyler–Chemung–Tioga Bd. of Coop. Educ. Servs.], 34 PERB ¶ 3019 [2001] ). Moreover, while the...