Civil Service Bar Ass’n v. City of New York, 64 N.Y.2d 188 (1984)
A union does not violate its duty of fair representation when it settles an appeal from an arbitration award by agreeing to modify benefits for some employees in exchange for benefits to others, absent arbitrary, discriminatory, or bad-faith conduct.
Summary
This case addresses whether a union breached its duty of fair representation by settling an appeal of an arbitration award. The union negotiated a settlement with the City of New York that altered the benefits awarded to some employees in exchange for broader benefits for the entire union membership. A group of employees who would have received greater benefits under the original arbitration award challenged the settlement. The New York Court of Appeals held that the union did not violate its duty of fair representation because the settlement was not arbitrary, discriminatory, or made in bad faith, acknowledging the union’s need to balance competing interests within its membership and the public policy favoring settlement of litigation.
Facts
In March 1975, the City of New York appointed an attorney at a salary exceeding the stated minimum for the position. The Civil Service Bar Association (Union) filed a grievance, claiming this triggered a requirement to raise minimum salaries for all grades. The grievance was denied and went to arbitration. The arbitrator ruled for the Union, ordering the City to increase all minimum salaries and award back pay. The City appealed the confirmation of the arbitration award (the “Helman judgment”). During the appeal, the City and Union negotiated a settlement resulting in a lump-sum payment of $2,000 to employees, an increase in minimum and maximum salaries by $2,500, and these increased salaries would form the basis for upcoming collective bargaining.
Procedural History
The initial arbitration award was confirmed in the Helman judgment. The City appealed. While the appeal was pending, a settlement was reached and embodied in a “Final Supplemental Award,” which the Supreme Court confirmed in the Korn judgment, vacating the Helman judgment. A group of employees sought to intervene and set aside the Korn judgment, arguing the settlement breached the Union’s duty of fair representation. The Supreme Court initially denied intervention, but the Appellate Division reversed, remanding for a hearing. On remand, the Supreme Court vacated the Supplemental Award and reinstated the Helman judgment. The Appellate Division reversed again, denying the motion to vacate the Korn judgment, finding no breach of the duty of fair representation. The New York Court of Appeals affirmed the Appellate Division’s decision.
Issue(s)
Whether the Union violated its duty of fair representation by settling the appeal of the arbitration award in a manner that diminished benefits for some employees in exchange for benefits to other employees not affected by the original award.
Holding
No, because the Union’s conduct in settling the appeal was not arbitrary, discriminatory, or in bad faith; thus it did not violate its duty of fair representation.
Court’s Reasoning
The Court of Appeals relied on federal precedent, particularly Vaca v. Sipes, to define the duty of fair representation as requiring unions to act fairly towards all employees they represent. A breach of this duty occurs only when a union’s conduct is arbitrary, discriminatory, or in bad faith. The court emphasized that ascertaining whether the duty was violated is a factual determination. Here, the Appellate Division found no reason to believe the Union acted dishonestly or in bad faith. The court noted that both the City and the Union were unsure of their chances on appeal, and both sides were dissatisfied with aspects of the original award. The court reasoned that “It was not unfair to use the original award as a lever, or a club, to obtain for all the members of the Union a more equal benefit.” The court acknowledged the conflicting interests within the union membership and stated that unions must have leeway to resolve these conflicts. Quoting Humphrey v. Moore, the court emphasized that “Conflict between employees represented by the same union is a recurring fact. To remove or gag the union in these cases would surely weaken the collective bargaining and grievance processes.” The court also highlighted the strong policy favoring the settlement of litigation. The settlement avoided salary schedule compression that would diminish increases based on seniority. The court concluded that the Union engaged in a good-faith balancing of divergent interests and that the settlement was not arbitrary, discriminatory, or in bad faith.