Niagara Wheatfield Adm'rs Ass'n v. Niagara Wheatfield Cent. School Dist.

• Decision Date: 28 March 1978
• Citation: 375 N.E.2d 37,44 N.Y.2d 68,404 N.Y.S.2d 82
• Parties: , 375 N.E.2d 37, 98 L.R.R.M. (BNA) 2322 In the Matter of the arbitration between NIAGARA WHEATFIELD ADMINISTRATORS ASSOCIATION, Appellant, and NIAGARA WHEATFIELD CENTRAL SCHOOL DISTRICT, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 82

404 N.Y.S.2d 82

44 N.Y.2d 68, 375 N.E.2d 37, 98

L.R.R.M. (BNA) 2322

In the Matter of the arbitration between NIAGARA WHEATFIELD ADMINISTRATORS ASSOCIATION, Appellant and NIAGARA WHEATFIELD CENTRAL SCHOOL DISTRICT, Respondent.

Court of Appeals of New York.

March 28, 1978.

Charles D. Tuppen, Jr., Buffalo, for appellant.

Richard C. Doherty and Clarence R. Runals, Niagara Falls, for respondent.

OPINION OF THE COURT

JASEN, Judge.

We are asked to decide whether public policy is offended by a term of a public employees' contract continuing, after expiration of the contract and during the negotiation of a subsequent contract, a provision that ties school administrators' salaries to teachers' salaries. We hold that under the facts here presented continuation of the tie-in provision does not violate public policy.

On July 1, 1973, Niagara Wheatfield Central School District (school board) and Niagara Wheatfield Administrators Association (association) signed a collective bargaining agreement effective until June 30, 1975. A provision of this agreement tied salaries of association members to those received by teachers according to a mathematical formula; changes in pay rates for teachers would therefore alter the salaries of administrators. (Art. XIX.) Another term of the agreement, paragraph D of article II, provided: "The current negotiated agreement and established fringe benefits between the Board of Education and the NWAA (association) shall remain in effect until modified or changed by mutual agreement in subsequent negotiations." As the expiration date of the contract approached, the parties negotiated unsuccessfully to reach a new agreement. In the meantime, the teachers negotiated a new contract with the school board which provided for an increase in their compensation. The administrators requested that their salaries be adjusted to reflect the increases granted the teachers in accordance with the tie-in provision of the contract as prescribed in paragraph D of article II, but the school board refused upon the ground that the association's contract had expired. The association responded by pursuing a grievance procedure established in the agreement, the final step of which was arbitration. No objection was raised by the school board to this procedure. After a hearing, the arbitrator issued an award stating: "The district (school board) violated the contract when it failed to pay the administrators on July 1, 1975 according to article XIX. The district (school board) is ordered to reimburse each administrator according to article XIX from July 1, 1975 until a new contract is agreed to by the parties."

Special Term confirmed the arbitration award. On appeal to the Appellate Division, the school board, for the first time, argued that continuation of the tie-in provision, after the expiration of the agreement, violated public policy by emasculating the school board's ability to negotiate a new contract effectively. The Appellate Division unanimously reversed and remitted the matter to the arbitrator for a new award. That court concluded that the "continuation" provision of paragraph D of article II was void as against public policy and accordingly held that the award based thereon, which had the effect of extending the 1973-1975 contract provision with respect to administrators' salaries until such time as a new contract should be agreed upon, was also void as against public policy.

The threshold question raised by the association is whether the school board may raise, for the first time on appeal to the Appellate Division, the issue of unenforceability of the contract upon the ground that it contravenes public policy. We believe that it can. Where a contract provision is arguably void as against public policy, that issue may be raised for the first time at the Appellate Division by a party, or by the court on its own motion. (O'Mara v. Dentinger, 271 App.Div. 22, 32-33, 62 N.Y.S.2d 282, 290-292.)

Resolution of the public policy issue presented in this case requires an examination of the public employment collective bargaining process. Public employers are clothed with broad powers to recognize, negotiate with and enter into contracts with employee organizations with respect to terms and conditions of employment. (Syracuse Teachers Assn. v. Board of Educ., 35 N.Y.2d 743, 744, 361 N.Y.S.2d 912, 320 N.E.2d 646; Board of Educ. v. Associated Teachers of Huntington, 30 N.Y.2d 122, 130, 331 N.Y.S.2d 17, 23, 282 N.E.2d 109, 113, Civil Service Law, § 204, subd. 2.) Where such contracts spring into controversy, the parties may provide for arbitration as an expeditious means of resolving the conflict. (Board of Educ. v. Bellmore-Merrick United Secondary Teachers, 39 N.Y.2d 167, 383 N.Y.S.2d 242, 347 N.E.2d 603.) Once such a resolution is reached by the arbitrator, the courts generally have no power to consider or pass upon the merits of the dispute. (CPLR 7501.) Were judicial intervention permitted, the very purpose of arbitration, to finally resolve conflicts between consenting parties, would be thwarted.

Nevertheless, the freedom of a public employer to contract with an employee organization, although broad, is not wholly unrestrained. Any provision of a collective bargaining agreement which contravenes public policy, statute or decisional law may not stand (Matter of Acting Superintendent of Schools of...