New York City Dept. of Sanitation v. MacDonald

• Decision Date: 26 March 1996
• Citation: 87 N.Y.2d 650,664 N.E.2d 1218,642 N.Y.S.2d 156
• Parties: , 664 N.E.2d 1218, 151 L.R.R.M. (BNA) 3035 In the Matter of NEW YORK CITY DEPARTMENT OF SANITATION et al., Appellants, v. Malcolm D. MacDONALD, as Chairman of the New York City Board of Collective Bargaining, et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 156

642 N.Y.S.2d 156

87 N.Y.2d 650, 664 N.E.2d 1218, 151

L.R.R.M. (BNA) 3035

In the Matter of NEW YORK CITY DEPARTMENT OF SANITATION et

al., Appellants, v. Malcolm D. MacDONALD, as Chairman of the New York City Board

of Collective Bargaining, et al., Respondents.

Court of Appeals of New York.

March 26, 1996.

Paul A. Crotty, Corporation Counsel of New York City (Elaine R. Witkoff and Larry A. Sonnenshein, of counsel), for appellants.

Victoria A. Donoghue, and Wendy E. Patitucci, New York City, for Malcolm D. MacDonald and another, respondents.

Robin Roach, and Robert Perez-Wilson, New York City, for District Council 37, Local 375, AFSCME, respondent.

OPINION OF THE COURT

BELLACOSA, Judge.

The New York City Board of Collective Bargaining determined that an alleged employee disciplinary grievance was subject to arbitration. The lower courts upheld the Board's determination and concluded that it did not impinge on public policy. The New York City Department of Sanitation appeals to this Court by our grant of leave to appeal. The issue presented is whether the Board's determination of arbitrability offends public policy and whether it is otherwise sustainable.

Richard Diamond was employed by the Sanitation Department as a project manager of a facility in Maspeth, Queens. His civil service title is Civil Engineer, and he is a member of District Council 37, Local 375, AFSCME. In November 1991, Diamond wrote a letter to the Director of Construction complaining about certain personnel assignments and work procedures, which he claimed were being implemented without his approval or consultation. The grievance alleges that the Director responded by calling Diamond an "incompetent" and told him that he would soon be transferred to the Department's facility at the Fresh Kills Landfill on Staten Island (approximately 20 miles from the Maspeth facility). On or about November 19, 1991, Diamond was transferred from Maspeth to Fresh Kills and, subsequently, on November 21, Diamond met with his immediate supervisor and the Director to discuss the transfer. During this conversation, the Director is claimed to have again stated that Diamond was transferred because he was an "incompetent."

Respondent District Council 37 filed a grievance on behalf of Diamond with the New York City Office of Labor Relations, alleging that Diamond's transfer was an "improper and punitive transfer" violating article VI, § 1(b), (e) and (f) of the collective bargaining agreement between the union and the City. The grievance was denied on the ground that the transfer was a business necessity. The union appealed the decision to the Deputy Chief Review Officer of the Office of Labor Relations, and the grievance was again rejected on the grounds that the transfer was not punitive but an exercise of the Department's prerogative to staff and manage operations and that the union had failed to establish that the transfer had violated any of the Department's rules, regulations or written policies.

The union later filed a Request for Arbitration with the Board of Collective Bargaining. The Board, with two of its seven members dissenting, granted arbitration to the extent of finding that the Union raised a substantial question as to whether Diamond's transfer was a "disciplinary action" under article VI, § 1(e) of the collective bargaining agreement. The Board determined that the union had demonstrated a sufficient nexus between Diamond's transfer and the asserted punitive motivation of his supervisors and, therefore, established a sufficient predicate for arbitration. Additionally, the Board stated that the absence of written charges of incompetence or misconduct did not bar arbitration of Diamond's claim.

The Sanitation Department initiated this proceeding under CPLR articles 75 and 78 seeking to annul the Board's decision and permanently stay arbitration. It argued that the dispute was not within the scope of the arbitration clause and that arbitration of the dispute would violate public policy by restricting a municipal employer's prerogative to deploy and manage its work force. Supreme Court denied and dismissed the Department's petition, holding that the collective bargaining agreement contained a broad arbitration clause, that it was ambiguous as to whether written charges were a condition precedent to arbitration, and that the issue of the scope of the provision itself was an issue of contract interpretation and, thus, for the arbitrator to decide. The Appellate Division affirmed, holding that the Board's determination was not arbitrary, capricious or an abuse of discretion. We now affirm and agree that the dispute is arbitrable.

The threshold for determining whether a valid, enforceable agreement to arbitrate exists between public employees and a public agency or entity is well established (Matter of Committee of Interns & Residents [Dinkins], 86 N.Y.2d 478, 484, 634 N.Y.S.2d 32, 657 N.E.2d 1315; see also, Matter of Blackburne [Governor's Off. of Empl. Relations], 87 N.Y.2d 660, 642 N.Y.S.2d 160, 664 N.E.2d 1222). It "must proceed in sequence on two levels by answering the following inquiries: (1) are arbitration claims with respect to the particular subject matter of the dispute authorized * * * and (2) do the terms of the particular arbitration clause include this subject area?" (Matter of Committee of Interns & Residents [Dinkins], supra, at 484, 634 N.Y.S.2d 32, 657 N.E.2d 1315.) The determination of the Board of Collective Bargaining in this matter may not be upset unless it is arbitrary and capricious or an abuse of discretion, as the Board is the neutral adjudicative agency statutorily authorized to make specified determinations (Matter of Levitt v. Board of Collective Bargaining, 79 N.Y.2d 120, 127-128, 580 N.Y.S.2d 917, 589 N.E.2d 1; see, Administrative Code of City of NY § 12-309[a][3] ), or unless arbitration of the dispute offends public policy.

While public policy considerations may limit the rights of public employees to arbitrate their disputes (see, 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), judicial intervention to stay arbitration on public policy grounds is exceptional and itself limited to circumstances specifically identified or rooted in statute or case law (Matter of Enlarged City School Dist. [Troy Teachers Assn.], 69 N.Y.2d 905, 906, 516 N.Y.S.2d 195, 508 N.E.2d 930, citing Matter of Sprinzen [Nomberg], 46 N.Y.2d 623, 631, 415 N.Y.S.2d 974, 389 N.E.2d 456; see also, Board of Educ. v. Areman, 41 N.Y.2d 527, 530-531, 394 N.Y.S.2d 143, 362 N.E.2d 943).

We agree with the courts below that no statute or otherwise manifest public policy has been tendered that would bar arbitration of Diamond's wrongful transfer claim. The Department's suggestion, that a transfer decision is a nondelegable management function (see, Administrative Code § 12-307) and that the Department, as a public employer, enjoys a public policy presumption under Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. (United Liverpool Faculty Assn.), 42 N.Y.2d 509, 514, 399 N.Y.S.2d 189, 369 N.E.2d 746 that it did not intend such disputes to be resolved in an arbitration forum, is incorrect. In this case, the relevant public policy considerations are not derived from the Taylor Law (Civil Service Law art 14), but rather are located in the New York City Collective Bargaining Law, under which the applicable collective bargaining agreement was negotiated (Administrative Code § 12-301 et seq.; contrast, Matter of Blackburne [Governor's Off. of Empl. Relations], 87 N.Y.2d 660, 642 N.Y.S.2d 160, 664 N.E.2d 1222, supra).

The Collective Bargaining Law distinctively states that "[i]t is hereby...