穿着者 v. City of Binghamton, 48 N.Y.2d 323 (1979)

A statute providing benefits to public employees does not create a contractual relationship unless the language and circumstances demonstrate a legislative intent to create private rights enforceable against the state; absent such intent, the legislature may modify the benefits without violating the Contract Clause of the U.S. Constitution.

Summary

The plaintiffs, firefighters receiving disability benefits under former Section 207-a of the General Municipal Law, challenged the constitutionality of Chapter 965 of the Laws of 1977, which diminished these benefits. The firefighters argued that the new law impaired their contractual rights and violated the state constitution. The Court of Appeals held that Section 207-a did not create a contractual relationship, and thus, its amendment did not violate the Contract Clause. However, the court clarified that disabled firefighters could not be involuntarily separated from service until the mandatory retirement age of 70, unless they had voluntarily elected additional benefits.

Facts

The plaintiffs were paid firefighters from Binghamton and surrounding villages, disabled due to injuries or illness sustained in the line of duty. Before Chapter 965, they received their full salary and medical expenses under Section 207-a of the General Municipal Law. Chapter 965 amended Section 207-a, limiting the duration of full salary payments, allowing municipalities to require light duty or transfer disabled firefighters, and terminating benefits if outside employment was taken.

Procedural History

The plaintiffs challenged Chapter 965, arguing it unconstitutionally impaired their contractual rights. The Appellate Division ruled against the plaintiffs. The Court of Appeals then reviewed the Appellate Division’s decision.

Issue(s)

1. Whether the application of Chapter 965 to the plaintiffs unconstitutionally impairs the obligation of contracts in violation of the Contract Clause of the United States Constitution.
2. Whether the operation of Chapter 965 impairs the plaintiffs’ rights as members of a public pension system, violating Section 7 of Article V of the New York State Constitution.

Holding

1. No, because former Section 207-a of the General Municipal Law did not create a contractual relationship.
2. No, because the changes in the terms of employment had only a minor and incidental influence on retirement benefits, which is not prohibited by the New York Constitution.

Court’s Reasoning

The court reasoned that a statute only creates a contract when its language and circumstances show a legislative intent to create private rights enforceable against the state. The statute in question did not contain contractual language. The court emphasized that statutes fixing salaries and compensation are generally not presumed to create a contract, but merely declare a policy subject to legislative alteration. The court distinguished cases cited by the plaintiffs, noting the particularity of events like death or retirement that trigger vested rights, contrasting this with the ongoing relationship of earning a salary. The court cited Conner v. City of New York, stating that prospective salary is like unearned wages, growing out of service rendition, not a government contract. Regarding the pension system argument, the court held that while pension benefits cannot be constitutionally impaired, this does not create a right to stay in public employment. Changes to employment terms, like those enacted by Chapter 965, are within the legislature’s power and only have a minor, incidental effect on retirement benefits. Finally, the court interpreted Chapter 965 to mean that disabled firefighters cannot be separated from service until the mandatory retirement age of 70 unless they elected additional benefits under Section 384 of the Retirement and Social Security Law. The court stated, “The prospective salary or other emoluments of a public office * * * are like daily wages unearned, and which may never be earned; the incumbent may die or resign, and his place be filled, and the wages earned by another. The right to the compensation grows out of the rendition of the services, and not out of any contract between the government and the officer, that the services shall be rendered by him.”