Opinion
101259/2017
08-14-2018
In the Matter of the Application of Harry G. DONAS, Petitioner, v. The NEW YORK CITY DEPARTMENT OF ENVIRONMENTAL PROTECTION, and New York City Corporation Counsel, Respondents.
Petitioner pro se, Harry G. Donas, New York City Law Department, Isaac S. Baskin, 100 Church Street, New York, NY 10007, District Council 37, Terri Nilliasca, 125 Barclay Street, New York, NY 10007
Petitioner pro se, Harry G. Donas, New York City Law Department, Isaac S. Baskin, 100 Church Street, New York, NY 10007, District Council 37, Terri Nilliasca, 125 Barclay Street, New York, NY 10007
In motion sequence 001 in this Article 75 proceeding, petitioner Harry G. Donas seeks an order from this Court compelling respondents to confirm an arbitration award dated September 7, 2016. Respondents move, pre-answer, to dismiss the proceeding. In addition, in motion sequence 002, District Council 37, AFSCME, AFL-CIO, and its affiliated Local 375 (collectively, the Union) moves to intervene in the proceeding. The Court consolidates motion sequences 001 and 002 for disposition and resolves them below.
During the pertinent period, petitioner worked for the City of New York, in the New York City Department of Environmental Protection (collectively, the City) as an assistant chemical engineer. Around July 31, 2013 petitioner filed a grievance against the City, alleging that the City had been assigning work to him which substantially exceeded the duties associated with his position. The Union represented petitioner in his grievance, which involves a four-step procedure. The grievance was denied at steps I, II, and III. The Step III denial was issued on March 17, 2014.
The fourth step of the grievance procedure is arbitration. The March 17, 2014 decision noted that the Union had 15 work days from the decision date to file a request for arbitration (RFA), and that a failure to do so waived the Union's right to arbitrate. The Union did not request the arbitration in a timely fashion. Instead, around 11 months after the expiration date, on February 4, 2015, the Union requested that the City allow the Union an extension of time to file the RFA; essentially, this was a request that the City waive the statute of limitations defense. The Union and the City resolved the problem through a pre-arbitration agreement — which, as it relates to petitioner, stated that the Union would waive petitioner's right to back pay from March 17, 2014, the date of the decision, to the date it filed the RFA. Respondents agreed to these terms on February 12, 2015, and the Union filed the RFA on February 25, 2015. Thus, pursuant to the agreement, the Union waived its claim for petitioner's back pay for the period between March 17, 2014 to February 12, 2015. Petitioner was unaware of the Union's untimeliness or of the pre-arbitration agreement at this time.
The Union simultaneously sought extensions of time with respect to four other claims.
The arbitration was held on September 1, 2016, and on September 7, 2016 the arbitrator issued her order. The arbitrator concluded that petitioner, was performing the work of a chemical engineer, level II during the period in question, although he was being paid the salary of a level I employee. Accordingly, she granted the grievance and directed the City to pay petitioner the difference in salary between the two positions for the period "from July 31, 2013 until it ceases to assign [petitioner] to out of title duties" (Dist. Council 37, Local 375 v. DEP , Case No. A-14845-15, p 5 [Sept. 7, 2016] [the Arbitration Award] ).
Petitioner's out-of-title duties ended on October 31, 2016. Therefore, he expected to receive retroactive compensation for the period between July 31, 2013 through October 30, 2016. Instead, the City paid him the difference in salary for July 31 through March 16, 2014, and for February 25, 2015 through October 30, 2016 (see Memorandum of Payment, March 30, 2017 [Exh B.1 to Petition] ). Petitioner alleges that notwithstanding the pre-arbitration agreement, he is entitled to receive retroactive pay for the period between March 17, 2014 to February 12, 2015, and that the City is obliged to pay this amount.
Petitioner did not retain counsel but attempted to obtain the additional pay which was due under the Arbitration Award. In a letter to the arbitrator which he emailed on May 15, 2017, petitioner recounted these efforts. He stated that the Union's deputy general counsel, Steven Sykes, notified him of the reason for the gap in payment a few weeks after the arbitrator issued her decision. Mr. Sykes also offered him an after-tax settlement of $15,000, petitioner wrote, but he rejected the offer because he was close to retirement and he feared that the gap in retroactive pay would negatively impact his pension payments. Petitioner wrote that he had repeatedly asked to see the pre-arbitration agreement between the City and the Union, but his requests had been ignored. In addition, petitioner stated, Mr. Sykes informed him in April 2017 that his legal challenges to the award were likely untimely under the statute of limitations, and petitioner questioned the fairness of this rule. Petitioner contended in his letter that the City rather than the Union should be made fully responsible for the retroactive payment that the Union had waived. He indicated that he had sought non-union legal representation through the Union, but without success.
On July 18, 2017, petitioner re-sent the letter to the arbitrator, who had not replied to his May 15 request for guidance. He added, "I assume that there is a 12-month or 18-month Statute of Limitations on enforcing arbitration decisions. Therefore, if you are not retaining jurisdiction, I will need to soon file an action against the city and/or [the Union] in State Court for its failure to pay me according to the terms of your decision" (Donas e-mail to xxxxxxx@aol.com, dated Tuesday, July 18, 2017, 11:26 am).
On September 6, 2017, petitioner commenced this Article 75 proceeding to confirm the arbitration award in its entirety ( CPLR § 7510 ). In this proceeding, petitioner seeks an order requiring the City to pay him for the gap period despite its pre-arbitration agreement with the Union along with litigation and filing costs. He argues that the award is valid on its face and the City should be compelled to comply with it.
Respondents bring a pre-answer cross-motion to dismiss the petition. Respondents, citing cases such as Soto v. Goldman (7 NY2d 397, 399-400 [1960] ) and Klugerman v. New York City Dept of Educ. (136 AD3d 600, 600 [1st Dept 2016] ), first argues that petitioner lacks standing to bring a proceeding to confirm the Arbitration Award. The City explains that, as only the Union and the City are parties to the agreement and the only participants in the arbitration, the Union and the City are the real parties in interest. The City argues that if the Union represents a member's interests at the arbitration and the Union did not breach the duty of fair representation which it owes to the employee, then the employee has no standing to commence a petition to challenge the award (citing Moreira-Brown v. New York City Board of Educ. , 288 AD2d 21, 21 [1st Dept 2001] ).
For the sole purpose of this motion, respondents accept the statements in the petition as true.
In addition, the City states that promissory estoppel bars this proceeding. It contends that it satisfies the necessary elements to assert this defense because, on behalf of petitioner, it entered into a written agreement which allowed his grievance to proceed despite its untimeliness, and petitioner benefited from the agreement in that he received retroactive back pay. The City additionally cites Schacht v. New York (39 NY2d 28, [1976] ), which states that a union member is bound by the terms of the collective bargaining agreement the union negotiates on behalf of its members. It argues that the collective bargaining agreement includes the 15-day limitations period, which binds petitioner and therefore the pre-arbitration agreement which waived this requirement inured to his benefit.
Finally, the City argues that the petition fails to name the Union, which is a necessary party to the proceeding. In support, it cites Solid Waste Servs., Inc. v. New York City Dept of Environmental Protection , 29 AD3d 318, 319 [1st Dept] [Solid Waste], lv denied , 7 NY3d 710 [2006] ). The petitioner in Solid Waste named DEP/the City as a respondent but did not name the Contract Dispute Resolution Board, which issued the challenged order. The First Department found that the board was a necessary party to the proceeding because it was "the governmental agency that performed the challenged action" and it was too late to join the board because the statute of limitations had expired. Accordingly, it affirmed the trial court's dismissal of the petition (id. ; see Matter of Centeno v. City of New York , 115 AD3d 537, 537 [1st Dept 2014] [relying on Solid Waste ] ). The City argues that here, too, the Court should dismiss the petition.
The Union brings a separate motion for leave to intervene in the proceeding ( CPLR § 1012 [a] [2] ). In addition, as an intervenor, its motion supports the City's cross-motion to dismiss. The Union notes that under the collective bargaining agreement, the Union alone had the right to proceed to arbitration, step IV of the grievance procedure. Moreover, the Union contends, the Arbitration Award interprets the collective bargaining agreement between itself and the City, and the Union's interests will not be protected if it is not a party to this proceeding. Neither of the current parties to the petition represent the Union's interests, it states, making it even more appropriate to allow intervention.
In support of the City's cross-motion, the Union asserts that petitioner lacks standing to bring this proceeding and that the City has complied with the Arbitration Award as modified by the agreement of the parties to the proceeding. It contends that petitioner's only remedy is a direct action against the Union for breach of its duty of fair representation, and that this claim is barred by the four-month statute of limitations set forth in CPLR § 217 (2) (a). The Union does not seek dismissal of the proceeding based on petitioner's failure to name it as a necessary party.
In opposition to the City's cross-motion, petitioner suggests that the pre-arbitration agreement is unenforceable because the RFA did not refer to it, there was no mention of it at the hearing, and the Arbitration Award did not take it into account. The award itself, rather than the pre-arbitration agreement, petitioner argues, is the binding document. In addition, petitioner claims that he has the right to bring the proceeding. He relies on Article VI, Section 3, of the controlling Collective Bargaining Agreement (CBA), which states:
As a condition to the right of the Union to invoke impartial arbitration set forth in this Article ... the Employee or Employees and the Union shall be required to file with the Director of the Office of Collective Bargaining a written waiver of the right, if any, of such Employee(s) and the Union to submit the underlying dispute to any other administrative or judicial tribunal except for the purpose of enforcing the award.
Petitioner also quotes Section 14 of Article VI, which provides that the grievance procedure in the CBA is the exclusive remedy by which to resolve grievances, but that this does not "preclude either party from enforcing the arbitrator's award in court." Together, he states, this establishes his right to pursue this remedy in Court. Furthermore, petitioner argues, the Union has breached its duty of fair representation and it cannot represent his interests in this proceeding. He states that together, this gives him standing.
Petitioner raises several additional arguments. He challenges the City's contention that the Union is a necessary party here, stating this position is inconsistent with the City's argument that the Union is the only party with standing. If the Union is necessary, he argues, the Court can order joinder even though the statute of limitations has expired. He states that he has been damaged by the pre-arbitration agreement, in that he did not receive the retroactive supplemental pay due to him for nearly one-third of the three years to which the award applied. He states that he will lose as much as $6,000 annually in pension payments due to the reduced income for the eleven-and-a-half months in dispute.
Petitioner also opposes the Union's motion to intervene. He argues that by stating that its interests will not be adequately represented in the proceeding, the Union essentially puts its own interests above the interests of petitioner. Petitioner states that although he was not a party to the arbitration, he was the sole intended beneficiary and thus the real party in interest. He relies on Board of Educ. of the Northport-East Northport Union Free School Dist. v. Long Island Power Auth. *39 Misc 3d 1232 [A], 2013 NY Slip Op 50860 [U], **4 [Sup Ct Suffolk County 2013], aff'd in pertinent part , 130 AD3d 953 [2nd Dept 2015] ), in which the trial court refused to dismiss a case based on lack of standing where there was an issue of fact as to whether the school district was the intended beneficiary of a power supply agreement between the Long Island Power Authority and the Long Island Lighting Company. He also cites numerous cases, including Dormitory Authority of the State of New York v. Samson Constr. Co. (30 NY3d 704 [2018] ), which discuss the standing of third-party beneficiaries to a contract.
According to petitioner, intervention also is unnecessary because the Union does not always participate in litigation that impacts its members. Furthermore, petitioner states, as his petition seeks to confirm the arbitration award and does not seek relief from the Union, it should not be allowed to participate in this proceeding. He also challenges the Union and City's interpretation of the CBA, stating that, instead, the cited sections of the CBA allow him to bring a proceeding to enforce the arbitration award.
In addition, he claims that the application to confirm the arbitration states a claim. Petitioner argues the pre-arbitration agreement is an illegal contract. Moreover, he states, the Union and the City should have moved to modify the Arbitration Award to conform to the pre-arbitration agreement and because they failed to do so the Award must stand. Petitioner also challenges the Union's position that his sole remedy was to bring a claim against the Union for breach of the duty of fair representation because such claim would not grant him all the relief he requests here. He adds that any such action would be timely because the limitations period will not run until he has suffered an injury, and he will not be injured unless and until this Court decides against him.
Discussion
I. Standing
Initially, the Court considers petitioner's standing to bring this proceeding. The City is correct that, in general, an employee has no standing to initiate an arbitration-related proceeding where the employee is not a signatory to the contract which provides that the union, rather than the individual employees, has the sole right to arbitrate, and where the union and the government agency, rather than the employee, participate in the arbitration ( In re Soto , 7 NY2d 397, 399-400 [1960] ; see Matter of Jiggetts v. New York City Human Resources Admin. , 156 AD3d 552, 552-53 [1st Dept 2017] ). Thus, in normal circumstances, the proceeding would be dismissed on this basis. Moreover, petitioner's argument that he has standing as a third-party beneficiary of the contract and the arbitration lacks merit (see Soto , 7 NY2d at 399 [stating that trial court's decision that petitioners had standing as third-party beneficiaries "was a wrong approach] ).
Petitioner's arguments to the contrary on this issue are not persuasive. His assertion that the contract between the City and the Union gives him standing is incorrect, as it relies on a misinterpretation of the cited provisions. Article VI, Section 3 of the CBA (see infra at p 6) states that for the Union to have the right to arbitrate on behalf of its members, the Union and its members must waive their rights to bring a challenge to a court or to an outside organization. The restriction on this waiver — that this does not waive the right to enforce the award through an Article 75 proceeding — does not mean that petitioner can initiate the Article 75 proceeding and does not alter the principles of standing. Petitioner's reliance on Article VI, Section 14, is also misplaced. In the statement on which petitioner relies — which allows either party to enforce the award in court — the phrase "either party" refers to the parties to the arbitration, the City and the Union. It does not create a right for the employee, as he or she is not a "party" in this context.
The analysis does not end here, however, because the City has overlooked an exception to the above principles. This exception, which is mentioned in the decisions on which the City relies, is that an individual employee has standing to bring a challenge to an arbitration order that is based on his or her union's breach of the duty of fair representation (see, e.g. , Moreira-Brown. , 288 AD2d at 21 ; Board of Educ. v. Ambach , 70 NY2d 501, 508 [1987] [stating that "only when the union fails in its duty of fair representation can the employee go beyond the agreed procedure"] ). As the pro se petitioner's papers allude generally to a breach of this duty, the Court considers these statements and determines that petitioner has stated a cause of action against the Union (see Nonnon v. City of New York , 9 NY3d 825, 827 [2007] ).
II. Necessary Party and Right to Intervene
Next, the Court turns to the Union's motion to intervene and the City's arguments which seek to dismiss based on petitioner's failure to name the Union, a necessary party. Under CPLR § 1001 (a), parties are necessary to a litigation (1) if their presence is necessary to afford complete relief in the action or (2) if they may be unfairly impacted by the Court's decision (see also Mahinda v. Board of Collective Bargaining , 91 AD3d 564, 565 [1st Dept 2012] ). Intervention is allowed as of right when the proposed intervenor's rights will not be adequately protected by the parties in the case and the proposed intervenor may be bound by the decision ( CPLR § 1012 [a] ). "[D]ismissal for failure to join a necessary party should eventuate only as a last resort" ( Leeward Isles Resorts v. Hickox , 61 AD3d 622 [1st Dept 2009] ).
The three subsequent proceedings — which denied leave to appeal, leave to reargue, and leave to appeal and impose sanctions — are omitted from this citation.
The Court concludes that the Union is a necessary party for several reasons. First, the Union was a participant in the arbitration which is the subject of the litigation. Second, petitioner argues that the award should be enforced in disregard of the Union's pre-arbitration agreement with the City. This argument and its resolution directly impacts the Union's interest. Third, the petition and the papers in support, along with petitioner's opposition papers, are intertwined with the argument that the Union erred in missing the arbitration deadline. Fourth, as the Court states above, petitioner's only viable argument here is that the Union breached its duty of fair representation. This claim can only be brought against the Union itself.
Petitioner's arguments to the contrary do not alter this Court's decision. There is no inconsistency in the City's position that the Union is the only party, other than the City, which has standing to institute an Article 75 proceeding, and the City's contention that the Union is a necessary party. Instead, because of the Union's standing to bring an Article 75 proceeding, the fact that the Union is a party to the CBA, and the fact that the Union rather than petitioner was the participant in the arbitration, the Union is necessary to the litigation. The fact that the Union does not uniformly participate in litigation which impacts its members does not waive its right to participate here. Petitioner's arguments that the Union should not be allowed to intervene because it would render the Union's interests of more importance than his is unpersuasive. His reliance on Board of Educ. of the Northport-East Northport School Dist. and Dormitory Authority of the State of New York , among other cases, for the proposition that he is the sole party in interest is misplaced because these cases deal with other types of contracts and do not apply to the facts of this litigation (see Soto , 7 NY2d at 399 ). Moreover, they relate to the beneficiaries' standing and not to the rights, or lack thereof, of the Union. Accordingly, the Court grants the motion to intervene.
III. Statute of Limitations
When it sought leave to intervene, the Union did not waive its right to challenge the timeliness of the proceeding against it. On the contrary, the motion also seeks to dismiss the proceeding as untimely. The City also asserts this argument in its cross-motion. The Court agrees with the intervenor and the City. Under CPLR § 217 (a), which governs,
[a]ny action or proceeding against an employee organization ... which complains that such employee organization has breached its duty of fair representation regarding someone to whom such employee organization has a duty shall be commenced within four months of the date the employee or former employee knew or should have known that the breach has occurred, or within four months of the date the employee ... suffers actual harm, whichever is later.
Thus, the limitations period begins to run either on the date the award is issued or the date that the individual learns that the Union will not bring any proceeding with respect to the award ( Obot v. New York State Dept of Correctional Serv. , 256 AD2d 1089, 1090 [1st Dept 1998] ). Courts have no discretion to extend the limitations period ( Campbell v. New York City Health & Hosp. , 2017 NY Misc LEXIS 984, *9, 2017 NY Slip Op 30533 [U], **8 [Sup Ct NY County 2017] ).
Here, during his first conversation with Mr. Sykes of the Union, in September 2016, petitioner learned that the Union had agreed to waive his claim for compensation for the gap period due to the Union's error, and he was offered a settlement of $15,000 by the Union. At this point, he should have realized that a breach occurred (see Campbell , 2017 NY Misc LEXIS at *8-9, 2017 NY Slip Op 30533 [U] at **7-8 [finding the claim was untimely because "all of the purported failures of the Union occurred prior to the issuance of the ... arbitration decision"). In April of 2017, Mr. Sykes informed him that the statute of limitations on his claims probably had expired. Even if petitioner did not realize the Union would not litigate his claim until the April 2017 discussion, his September 2017 petition is still untimely.
As such, even if an independent claim existed against the City, the Court would have to dismiss the petition as untimely. Where, as here, the purported breach of duty by the union is inextricably intertwined with the claim against the City, the four-month limitations period also applies to the claim against the City. Thus, even if petitioner had standing to bring this proceeding against the City, the petition would be time-barred (see Henvill v. Metropolitan Transp. Auth. , 148 AD3d 460, 460-61 [1st Dept 2017] ; Obot , 256 AD2d at 1090 ).
Petitioner argues the statute of limitations does not begin to run against the Union unless and until this Court resolves the issue adversely against him has no merit. If this were the case, the limitations period against the Union would be tolled until after (1) the employee commenced a proceeding with respect to the award, which could take up to one year, (2) the proceeding were fully briefed by all parties, and all pre-answer motions were decided, (3) the respondents had answered, if necessary, and the proceeding was decided against the employee. This argument lacks merit and has been rejected by the First Department (see Roman v. City Employees Union Local 237 , 300 AD2d 142, 143 [1st Dept 2002], lv denied , 100 NY2d 501 [2003] ).
CONCLUSION
The Court sympathizes with petitioner, who was denied nearly one-third of the supplemental pay which the arbitrator awarded due to the Union's failure to seek arbitration in a timely fashion under the very timeframe it negotiated with the City. Although the arbitrator's retention of jurisdiction applied only to the Union and the City — and not to petitioner, over whom she had no jurisdiction -- the Court understands petitioner's frustration over his failure to receive a response to his emails to the arbitrator. These considerations, however, do not change the fact that petitioner's application should be dismissed.
Therefore, it is
ORDERED that motion sequence number 002 is granted and the Union is granted leave to intervene in this proceeding; and it is further
ORDERED that the cross-motion to motion sequence number 001 and the prong of motion sequence number 002 which seek dismissal of the proceeding is granted, and the petition is dismissed. The Clerk is directed to enter a judgment of dismissal.