Opinion
50849/2018
04-19-2018
In the Matter of the APPLICATION OF the CIVIL SERVICE EMPLOYEES ASSOCIATION, LOCAL 1000 AFSCME, AFL–CIO, MOUNT VERNON LIBRARY UNIT 9166–01, Petitioner, v. BOARD OF TRUSTEES OF the MOUNT VERNON PUBLIC LIBRARY, Respondent.
Charny & Charnyl, Attorneys for Petitioner Jackson Lewis, P.C., Attorneys for Respondent
Charny & Charnyl, Attorneys for Petitioner
Jackson Lewis, P.C., Attorneys for Respondent
Lawrence H. Ecker, J.
Petitioner is the labor union that represents the individuals who work in the Mount Vernon Public Library ("the library workers"). Respondent is the employer of the library workers. In 1975, the parties entered into a Collective Bargaining Agreement ("CBA"). Although not included within the terms of that contract, it was the practice thereafter that the library workers were paid at parity with the individuals who worked at City Hall ("the city hall workers"), who were represented by a separate union. In 1992, the library workers, in order to ensure that the funding for the pay parity continued, negotiated a "Pay Parity Clause" that was included in the renewal contract. The Pay Parity Clause [Article III(1)(b) of the CBA] provides as follows:
"The Board of Trustees [of the Mount Vernon Public
Library] obligates itself to petition for and actively pursue by every available avenue of approach funding to maintain the historic link between the salaries of the Library and the City Hall CSEA employees. Such funding will be applied retro-actively if it is necessary to correct an inequality."
Since 1992, through the grievance process, the library workers have been paid at parity with the city hall workers. The last settlement of the city hall workers' contract, entered into December 3, 2015, was for the period 2014 through 2017, for which the city hall workers received percentage increases. Despite respondent's concession that the funds are available to pay the library workers at the new pay level received by the city hall workers, the library workers have not been granted parity. A grievance was filed by the library workers on February 22, 2016. That grievance was not resolved by negotiation. On May 3, 2016, the library workers filed for arbitration with the New York State Public Employment Relations Board. The arbitration hearing was held on June 30, 2017, before Noel B. Berman, arbitrator. The parties stipulated to the following issue:
"Is the Library in violation of [the Pay Parity Clause] of the parties' collective bargaining agreement? If so, what shall be the remedy?"
The record of the arbitration proceeding has been submitted to the court for its consideration. Arbitrator Berman issued a Decision and Award on October 23, 2017. He answered the question submitted as "yes," and ordered that the library workers be paid retroactively the amounts due them pursuant to the Pay Parity Clause. However, Arbitrator Berman ordered that the receipt of those payments were conditioned on the library workers' acceptance of the employer's proposal that, in future negotiations pursuant to the CBA, the Pay Parity Clause be stricken from the CBA. It is upon this ruling that the matter is now submitted to the court for its consideration.
The Decision and Award
The Arbitrator reviewed the procedural history that led to the inclusion of the Pay Parity Clause. As a preliminary matter, relative to whether the funds for the parity payments were included in the library's budget, he made a finding [page 13] "I find that the Union met at least it's going forward burden on that issue and it was the Library's burden to counter it which it has not done." Hence, he found that there were sequestered funds set aside for the funding of the pay parity payments.
This finding has not been challenged by respondent.
In addressing petitioner's arguments, the Arbitrator made findings that the Pay Parity Clause was unambiguous, that pay parity was in practice since 1975, even before the contract language reflecting the same was incorporated into the CBA, that it was included in the 1992 contract, as drafted by respondent, that the change in the charter under which the library now operates, discussed infra , did not alter the application of the Pay Parity Clause. The Arbitrator ruled, at page 8, that, upon these findings, "the grievance should be sustained and an award issued that compels application of the funds ... for the period 2014–17."
The Arbitrator's decision then went on to address the "best efforts" clause, relative to respondent's argument that this did not mandate a wage increase. Respondent argued that there was no longer a "historic link" between the library workers and the city hall workers because a change in the Mount Vernon Charter occurred in 2014 whereby the governance of the Library was transferred from the City of Mount Vernon to the City of Mount Vernon School District. As a result, the funding of the Library budget is now voted on by referendum at the school district election, rather than being included as a line item in the City's budget. In response to respondent's argument as to the breaking of the "historic link," the Arbitrator made a finding [page 11] "(T)hat event severed a budgetary link, but it could not, and did not, break an historic link. Historic links are made of sterner stuff. Fifty years from now the argument might have punch, today it doesn't."
The Arbitrator made a separate finding that there was no bar to this grievance based upon the results of a prior grievance, as argued by respondent.
After having answered "yes" to petitioner's entitlement to the parity payments, the Arbitrator addressed the question of "What shall be the remedy?" Calling upon his experience "as a lawyer who spent a large part of his legal career at the bargaining table—on the management side, I might add—I appreciate the argument that the provision in question ‘effectively removes the Library's ability to negotiate one of the fundamental terms of any CBA’ ... wages. The answer is to make the clause an issue in the negotiation. The Library is not required to agree to its inclusion going forward." [Page 12].
The Arbitrator stated that the collective bargaining process is impeded when one side enters into the bargaining with a crucial issue already "in its pocket." Specifically, he opined:
"I am in equal agreement with [respondent] that the [Pay Parity Clause] is an impediment to collective bargaining and is at the root of their obviously troubled relationship. I believe in collective bargaining; that means give and take. And that process is impeded when one side enters the bargaining with a crucial issue in its pocket. Wages are at the heart of work place bargaining. That's why, in my experience, it is the last issue discussed, not the first. It's how other issues important to management are paid for. It must be part of the bargain. This pay parity clause—not parity as an abstract idea—prevents that exchange." [page 13–14].
It was upon this reasoning that the Arbitrator conditioned his award of pay parity payments upon the acceptance of respondent's proposal to remove the Pay Parity Clause from the contract going forward ("the Condition"). It is the Condition that is now subject to the review of this court.
The Parties' Arguments:
The parties' arguments are as stated in the Findings section, supra . The critical issue for the court is whether the Arbitrator exceeded his authority in the fashioning of a remedy that included the Condition. Respondent has not filed a cross-motion to set aside the Arbitrator's award.
The Issues:
The issues, simply stated, are whether the Arbitrator had the authority to condition the receipt of the parity payments upon the excision of the Pay Parity Clause; if he did not, then pursuant to CPLR § 7511, does the court vacate, modify or remand?
Discussion:
The court is mindful of its powers as circumscribed by the case law of this State, and that a clear and convincing burden of proof is to be imposed upon the challenger. "An arbitrator is charged with the interpretation and application of the agreement (see Matter of Town of Callicoon [Civil Serv. Empls. Assn., Town of Callicoon Unit] , 70 N.Y.2d 907, 909 [524 N.Y.S.2d 389, 519 N.E.2d 300] [1987] ). Courts may vacate an arbitrator's award only on the grounds stated in CPLR 7511(b)." ( Matter of New York City Tr. Auth. v. Transport Workers' Union of Am., Local 100, AFL–CIO , 6 N.Y.3d 332, 812 N.Y.S.2d 413, 845 N.E.2d 1243 [2005] ).The only such ground asserted here is that the arbitrator "exceeded his power" ( CPLR § 7511[b][1][iii] ). "Such an excess of power occurs only where the arbitrator's award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power" ( Matter of New York City Tr. Auth. v. Transport Workers' Union of Am., Local 100, AFL–CIO , supra ; see Town of Babylon v. Carson , 111 A.D.3d 951, 976 N.Y.S.2d 501 [2d Dept. 2013] ; City of Long Beach v. Long Beach Professional Firefighters Ass'n , 143 A.D.3d 710, 39 N.Y.S.3d 188 [2d Dept. 2016] ).
Hence, the court must determine whether the Arbitrator exceeded his authority in excising the Pay Parity Clause from the parties' CBA. Of note, no where in the record is it stated that the relevant CBA is other than the same one entered into in 1992, extended in 2006, and continuously abided by since that date [see Ex. 2, contract dated September 20, 2006], which includes the Pay Parity Clause. Moreover, Civil Service Law § 209–a[1][e] provides that it is an improper employer practice for a public employer or its agents deliberately "to refuse to continue all the terms of an expired agreement until a new agreement is negotiated...." Furthermore, Article XI, Section 1–Past Practice Clause—provides that "(A)ll existing rules, regulations, practices and benefits of the employer not modified by this agreement will continue in full force and effect. Consequently, the status quo must be maintained when a CBA has expired (see Matter of Professional Staff Congress–City Univ. of NY v. New York State Pub. Empl. Relations Bd. , 7 N.Y.3d 458, 467, 824 N.Y.S.2d 577, 857 N.E.2d 1108 [2006] ).
Petitioner argues [Memorandum in Support, p. 6] that the CBA, at Article VIII, Section (4)(c) "explicitly limits to Arbitrator's authority, requiring that the Arbitrator ‘not render an award inconsistent with the terms of the agreement.’ " The court is unable to identify this quoted language in Ex. 2
The Pay Parity Clause has been, until now, the linchpin employed to resolve pay parity grievances. There is no evidence in the record that the CBA has been abrogated since its inception and the Arbitrator recognized the sanctity of the contract and that the clause itself was not vague, or incapable of enforcement. That being so, pursuant to CPLR § 7511(b)(1)(iii), the Arbitrator "exceeded his power" by imposing the Condition, thereby making, in reality, a new contract for the parties.
As stated by the Court in Pavilion Cent. School Distr. v. Pavilion Faculty Assn. , 51 A.D.2d 119, 380 N.Y.S.2d 387 [4th Dept. 1976], there are two permitted grounds available when the claim is that the arbitrator exceeded his authority, namely, was the construction given to the contract completely irrational, or did the contract agreement itself expressly limit the power of the arbitrator?
The court finds that this Arbitrator went beyond his authority in conditioning the pay parity award on the striking of the relevant contract clause. This is not a matter of interpretation of a contractual provision which affords the arbitrator great latitude. The dispute that was submitted to him to resolve was whether the parity payment should be made under the constricts of the operative contract, including the Pay Parity Clause. The matter put to the Arbitrator to determine did not include, however, whether the Pay Parity Clause itself should be stricken, now and in the future, subject to further negotiation. While respondent may have hoped for that result, under the law, the clause reflected a negotiated contract right that protected petitioner's interests and the Arbitrator had no authority to strip petitioner of that right as a condition of receiving a warranted arbitration award.
In addition, the Pay Parity Clause, as recognized by the Arbitrator, is included in a bilateral contract capable of enforcement. The obligation undertaken by petitioner is seen by the court as the equivalent of "best efforts" clause, which is capable of judicial enforcement (see Ashokan Water Services, Inc. v. New Start, LLC , 11 Misc. 3d 686, 807 N.Y.S.2d 550 [Civil Ct., Kings Co., 2006] and cases cited therein), no different from that implied in every contract, namely good faith and fair dealing, which carries a lesser burden (see Van Valkenburgh, Nooger & Neville v. Hayden Publ. Co., 30 N.Y.2d 34, 330 N.Y.S.2d 329, 281 N.E.2d 142 [1972] ; Dalton v. Educational Testing Serv. , 87 N.Y.2d 384, 639 N.Y.S.2d 977, 663 N.E.2d 289 [1995] ; Sears v. Sears , 138 A.D.3d 1401, 30 N.Y.S.3d 770 [4th Dept. 2016] ; Benzies v. Take–Two Interactive Software, Inc., 159 A.D.3d 629, 73 N.Y.S.3d 557 [1st Dept. 2018] ).
Here, the Arbitrator significantly altered the contract and future negotiations because, as he saw it as a former labor law employer practitioner, the issue of pay should follow all other issues and respondent, under the relevant clause, had the upper hand. However, his obligation, as consigned to him by the parties, was to adjudicate whether the pay parity for 2014–2017 was due, to which he answered "yes." As for determining a remedy, however, the remedy that he should have addressed was the terms of payment, and not the rewriting of the CBA and ordering the forfeiture of the previously bargained for contract clause. Accordingly, the court finds that the Arbitrator's ruling, requiring that the parity payments be conditioned upon petitioner's abandonment of the Pay Parity Clause, was beyond the Arbitrator's authority and constituted error that the court is entitled to rectify pursuant to CPLR § 7511(b)(1)(iii).
Of note, the CBA (Article VIII, Section 4—Grievance Procedure—at subd. (a) ) defines a grievance as "any claimed violation, misinterpretation or any inequitable application of the Agreement, or of applicable existing laws, rules, procedures, regulations, administrative orders ..." The Grievance filed by petitioner [Ex. 4] cited Article III(b)(1), supra, and Article XI, Section 1, supra, with the redress requested "(T)he Library will retroactively correct the inequality that currently exists between the salaries of the Library and those of the City Hall CSEA employees." This Grievance was endorsed by the representatives of the parties. The Demand for Arbitration [Ex. 5] identified the provisions of the agreement claimed to have been violated as Article III, Section 1(b) and Article XI, Section 1. Nowhere is the Arbitrator granted the authority to predicate the award of the parity pay upon petitioner's forfeiture of the previously bargained for contractual right, as included in the Pay Parity Clause.
Moreover, petitioner's response to the argument raised by respondent, concerning the inclusion of the Condition, was not an admission that the clause was the proper subject matter of the arbitration, rather than the per se entitlement to the parity payment. Hence, the Arbitrator should have limited his inquiry, and his opinion, to whether respondent adhered to its obligation "actively pursue by every available avenue of approach funding to maintain the historic link" between the library workers and the city hall workers.
Instead, the Arbitrator substituted his opinion of how negotiations that involve pay should evolve, rather than confining himself to the language of the clause which he found to be applicable and enforceable. Initially, the Arbitrator found that the contract provision was capable of enforcement, that respondent complied with its contractual obligation by setting aside the funds held in reserve to fund the parity payments, and that there was no break in the historic link, notwithstanding the change in the entity now responsible for the Library's budget.
He then elected, however, to ignore the clear and concise clause of the contract to carry out what he believed to be the manner in which future negotiations should take place. That was for the parties themselves to negotiate, if and when, a new employment contract was the subject of negotiation. It was never the subject matter of the arbitration proceeding. To the extent that the Arbitrator ordered petitioner to forgo the contractual obligation, in order to level the playing field going forward, therefore, that directive was unauthorized and unduly interfered with the parties' pre-existing contractual obligations. Under the circumstances, the court concludes that the Arbitrator exceeded an enumerated limitation on his power, and issued a decision that was irrational and violates public policy (see Matter of New York City Tr. Auth. v. Transport Workers' Union of Am., Local 100 , supra ).
Vacate, Modify or Remand:
Accordingly, in this case, "the arbitrator, in effect, revised, modified, and altered the parties' agreement, which was specifically prohibited by the arbitrator's powers defined in the parties' collective bargaining agreement" ( Matter of County of Putnam v. Putnam County Sheriff's Employees Ass'n, Inc. , 90 A.D.3d 922, 935 N.Y.S.2d 609 [2d Dept. 2011] ; see CPLR § 7511[b][1][iii] ; Matter of Good Samaritan Hosp. v. 1199 Natl. Health & Human Servs. Empls. Union , 69 A.D.3d 721, 721–722, 893 N.Y.S.2d 192 [2d Dept. 2010] ). The issue becomes, therefore, what is the appropriate remedy in light of this determination.
As for the question of whether the court is empowered by statute to modify the award, rather than vacate it, the power to modify is specifically prescribed in CPLR § 7511(c), and is limited to miscalculation of amounts due or mistake in description of the subject matter in dispute (subd. 1), an award based upon a matter not submitted that can be corrected without affecting the merits of the decision (subd. 2), or the award is imperfect as a matter of form, not affecting the merits of the controversy (subd. 3). While it would be the preference of the court to modify the award to the extent of deleting the Condition, the facts in this proceeding do not fall within the categories of matters that are subject to modification under the statute.
Under the circumstances, therefore, the applicable remedy here is to vacate the award and direct that a re-hearing be conducted, before a different arbitrator. Said new arbitrator shall adhere to the findings and conclusions of the court, such that the only determination to be made before the arbitrator is the manner and timing in which the parity payments are to be paid by respondent to petitioner. The Parity Payment Clause, Article III, Section 1(b) shall stand and remain in full force and effect, and shall be binding upon the newly designated arbitrator.
The court would have preferred to have simply modified the award to direct the parity payments be made by a date certain. However, the statute does not appear to allow for that practical approach to be taken. Given the statute (CPLR § 7511[c] ) affords the court the option to limit the issues to be determined upon rehearing, which in this case shall involve a new arbitrator, the issue to be determined shall be limited to the manner and timing in which the parity payments shall be paid.
The court has considered the additional contentions of the parties not specifically addressed herein. To the extent any relief requested by either party was not addressed by the court, it is hereby denied. Accordingly, it is hereby
ORDERED that pursuant to CPLR § 7511(b)(1)(iii), the award made by Arbitrator Noel B. Berman, dated October 23, 2017, is hereby vacated in its entirety; and it is further
ORDERED that pursuant to CPLR § 7511(c), there shall be a re-hearing of the issue of manner and timing of payment of the parity payments only, before a newly designated arbitrator, whose power to determine the issues between the parties shall be limited to the method of payment of the parity payments due and owing pursuant to Article III, Section 1(b) of the parties' Collective Bargaining Agreement, with no consideration being given to the future enforcement of that contractual clause.
The foregoing constitutes the decision, order and judgment of the court.