Peters v. Union-Endicott Cent. Sch. Dist.

Decision Date28 October 2010
PartiesIn the Matter of Joanne PETERS, Respondent, v. UNION-ENDICOTT CENTRAL SCHOOL DISTRICT et al., Appellants. (Proceeding No. 1.) In the Matter of Union-Endicott Central School District, Appellant, and Endicott Teachers' Association et al., Respondents. (Proceeding No. 2.)
CourtNew York Supreme Court — Appellate Division

The Law Firm of Frank W. Miller, East Syracuse (Frank W. Miller of counsel), for appellants.

James R. Sander, Latham (Richard E. Casagrande of counsel), for respondents.

Before: MERCURE, J.P., ROSE, MALONE JR., KAVANAGH and STEIN, JJ.

STEIN, J.

Appeal from an order of the Supreme Court (Lebous, J.), entered October 6, 2009 in Broome County, which, among other things, denied petitioner's application in proceeding No. 2 pursuant to CPLR 7503 to permanently stay arbitration between the parties.

Respondent Endicott Teachers' Association (hereinafter ETA)-on behalf of its member, Joanne Peters, a teacher employed by the Union-Endicott Central School District (hereinafter the District)-filed a grievance and demand for arbitration as against the District based upon its refusal to process Peters' retirement application and to provide the bargained-for health benefits pursuant to the collective bargaining agreement (hereinafter CBA) between the District and the ETA. Before Peters submitted her retirement application, the District and local police authorities commenced an investigation into allegations that Peters was stealing school materials and property and selling such items on the Internet; she submitted her application during that investigation, but prior to her subsequent arrest and charge of grand larceny in the fourth degree. Following her arrest, Peters was placed on suspension and the District filed administrative disciplinary charges against her pursuant to Education Law § 3020-a and delayed action on her retirement application.

In April 2008, a Hearing Officer found that Peters had severed her employment relationship with the District on July 1, 2007. As a result, the Hearing Officer concluded that the disciplinary charges against Peters were moot and granted hermotion to dismiss the charges.1 Shortly thereafter, the District, relying on the Hearing Officer's determination, adopted a resolution to retroactively terminate Peters as of July 1, 2007. In June 2008, prior to our affirmance of Supreme Court's stay of arbitration with respect to petitioner's first grievance ( Matter of Union-Endicott Cent. School Dist. [Endicott Teachers' Assn.], 59 A.D.3d 799, 872 N.Y.S.2d 753 [2009] ), the ETA and Peters filed a second grievance challenging the District's April 2008 resolution and final determination denying Peters' receipt of retiree health insurance benefits and demanded arbitration of such grievance. In August 2008, Peters commenced a combined CPLR article 78 proceeding and declaratory judgment action (proceeding No. 1) seeking, among other things, a declaration of her contractual rights to retiree health insurance benefits, and directing the provision thereof. The District then commenced proceeding No. 2 seeking, among other things, to permanently stay arbitration between the parties and, in response, the ETA and Peters cross-moved to compel arbitration. Supreme Court denied the District's application to stay arbitration of the second grievance and granted the motion by the ETA and Peters to compel such arbitration. Consequently, Supreme Court determined that it was unnecessary to reach the merits of proceeding No. 1.2 The District now appeals and we affirm.

Preliminarily, we reject the District's argument that Peters and the ETA lack standing to maintain the grievance challenging the denial of Peters' retirement benefits. As a former teacher and member of the ETA, Peters is "a party to the agreement[ ] ... [and] the dispute concerns the interpretation of language employed therein" ( Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local 737], 29 A.D.3d 1129, 1132, 815 N.Y.S.2d 761 [2006]; see Ledain v. Town of Ontario, 192 Misc.2d 247, 255 n. 5, 746 N.Y.S.2d 760 [2002], affd. for reasons stated below 305 A.D.2d 1094, 759 N.Y.S.2d 426 [2003] ). Moreover, we have held that "[t]he fact that retirees are not members of [the ETA] or represented by it in collective bargaining negotiations is not determinative in a threshold arbitrability analysis" ( Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local 737], 29 A.D.3d at 1132, 815 N.Y.S.2d 761 [internal citations omitted] ). Thus, we conclude that Peters' current status as a former employee does not deprive her of standing to challenge the determination to deny benefits arguably prescribed to her while employed by the District and operating under a contract negotiated by and between the District and the ETA. Likewise, we conclude that the ETA has organizationalstanding to bring an action on Peters' behalf ( see Matter of Aeneas McDonald Police Benevolent Assn. v. City of Geneva, 92 N.Y.2d 326, 330-331, 680 N.Y.S.2d 887, 703 N.E.2d 745 [1998]; Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 775, 570 N.Y.S.2d 778, 573 N.E.2d 1034 [1991]; Matter of South Colonie Cent. School Dist. [South Colonie Teachers Assn.], 46 N.Y.2d 521, 526, 415 N.Y.S.2d 403, 388 N.E.2d 727 [1979] ).

Turning to the merits, we note that "[t]he court's role in reviewing applications to stay arbitration is ... a limited one" ( Matter of Enlarged City School Dist. of Troy [Troy Teachers Assn.], 69 N.Y.2d 905, 906, 516 N.Y.S.2d 195, 508 N.E.2d 930 [1987] ). In determining whether a grievance is arbitrable, we first decide whether "there is any statutory, constitutional or public policy prohibition against arbitration of the grievance" ( Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 N.Y.2d 273, 278, 755 N.Y.S.2d 49, 784 N.E.2d 1158 [2002]; see Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 N.Y.2d 132, 140-142, 688 N.Y.S.2d 463, 710 N.E.2d 1064 [1999] ). If no such prohibition exists, we must then review the CBA "to determine if the parties have agreed to arbitrate the dispute at issue" ( Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 N.Y.2d at 278, 755 N.Y.S.2d 49, 784 N.E.2d 1158; see Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 N.Y.2d at 140, 688 N.Y.S.2d 463, 710 N.E.2d 1064). Significantly, it is "clear that the merits of the grievance are not the courts' concern" ( Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 N.Y.2d at 142, 688 N.Y.S.2d 463, 710 N.E.2d 1064). Rather, " '[t]he question of the scope of the substantive provisions of the [CBA] is itself a matter of contract interpretation and application, and hence it must be deemed a matter for resolution by the arbitrator' " ( Matter of Vestal Cent. School Dist. [Vestal Teachers Assn.], 2 A.D.3d 1190, 1193, 770 N.Y.S.2d 188 [2003], lv. denied 2 N.Y.3d 708, 781 N.Y.S.2d 290, 814 N.E.2d 462 [2004], quoting Board of Educ. of Lakeland Cent. School Dist. of Shrub Oak v. Barni, 49 N.Y.2d 311, 314, 425 N.Y.S.2d 554, 401 N.E.2d 912 [1980]; see Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local 737], 29 A.D.3d at 1132, 815 N.Y.S.2d 761). Thus, " '[t]he fact that the substantive clauses of the contract might not support the grievance[ ] ... is irrelevant on the threshold question of arbitrability' " ( Matter of Vestal Cent. School Dist. [Vestal Teachers Assn.], 2 A.D.3d at 1193, 770 N.Y.S.2d 188, quoting Matter of Board of Educ. of Deer Park Union Free School Dist. v. Deer Park Teachers Assn., 50 N.Y.2d 1011, 1012, 431 N.Y.S.2d 682, 409 N.E.2d 1356 [1980] ).

The issue raised by the second grievance in the instant matter distills to whether Peters is considered a retiree for purposes of entitlement to health insurance benefits pursuant to the CBA. The District first contends that public policy prohibits arbitration of the grievance on the basis that a determination as to an employee's employment status is a matter to be left to the board of education. In this regard, the District argues that, to allow an arbitrator to determine whether Peters retired or was terminated for purposes of receiving retiree benefits under the CBA would be inconsistent with the Education Law, which vests school boards and districts with the power "to contract with and employ" teachers (Education Law § 1709[16] ). We disagree. In general, it is well settled that "there is no prohibition against arbitrating a dispute originating from the terms of a collective bargaining agreement concerning health insurancebenefits for retirees" ( Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local 737], 29 A.D.3d at 1130, 815 N.Y.S.2d 761; see Civil Service Law § 201[4]; § 203; Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 N.Y.2d at 138-139, 688 N.Y.S.2d 463, 710 N.E.2d 1064; Matter of Corinth Cent. School Dist. [Corinth Teachers Assn.], 77 A.D.2d 366, 367-368, 434 N.Y.S.2d 725 [1980], lv. denied 53 N.Y.2d 602, 439 N.Y.S.2d 1025, 421 N.E.2d 852 [1981] ), and that "issues such...

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