New York Law Review

Tag: financial disclosure

  • Board of Education v. PERB, 75 N.Y.2d 663 (1990): Collective Bargaining and Employee Disclosure Requirements

    Board of Education of the City School District v. New York State Public Employment Relations Board, 75 N.Y.2d 663 (1990)

    The imposition of financial disclosure requirements on public employees by a government employer is a mandatory subject of collective bargaining under the Taylor Law, unless explicitly prohibited by statute or public policy.

    Summary

    This case addresses whether the New York City Board of Education (Board) must collectively bargain with its employees’ unions regarding financial disclosure requirements imposed on certain employees. The Board argued that these requirements were essential for detecting and deterring corruption and therefore not subject to negotiation. The New York Court of Appeals held that the disclosure requirements were a mandatory subject of collective bargaining, as they constitute terms and conditions of employment and are not explicitly prohibited by statute or public policy. PERB’s determination was rational and legally permissible, and the court deferred to PERB’s expertise in interpreting the Civil Service Law.

    Facts

    Following publicized improprieties by a former Chancellor, the Board adopted regulations requiring designated employees to submit detailed annual financial disclosure statements and undergo background investigations. These investigations included verification of tax and credit information, disclosure of former employers’ records, health information, and political party affiliations. Non-compliance could result in termination or denial of appointment/promotion. Several unions representing affected employees filed improper employer practice charges with the Public Employment Relations Board (PERB), arguing that the new regulations constituted a change in terms and conditions of employment that required good faith negotiation under the Taylor Law.

    Procedural History

    The unions filed charges with PERB alleging the Board’s refusal to negotiate violated Civil Service Law. PERB ruled the Board had no duty to negotiate specific financial reporting requirements under Education Law § 2590-g (13) but did have a duty to negotiate additional disclosures required under § 2590-g (14). The Board then initiated an Article 78 proceeding seeking annulment of PERB’s determination. Supreme Court confirmed PERB’s determination. The Appellate Division reversed, holding that collective bargaining over disclosure requirements was prohibited by the public interest in detecting corruption. The Court of Appeals then reversed the Appellate Division’s decision.

    Issue(s)

    Whether the financial disclosure requirements imposed by the New York City Board of Education on its employees are a mandatory subject of collective bargaining under the Taylor Law, or whether they are prohibited or permissive subjects due to public policy concerns regarding corruption.

    Holding

    No, the financial disclosure requirements are not a prohibited subject of bargaining, because neither Education Law § 2590-g (14) nor public policy explicitly prohibits collective bargaining on this issue. The Board’s decision to implement these requirements does not represent such a managerial prerogative that it falls under the category of a permissive bargaining subject.

    Court’s Reasoning

    The Court of Appeals reasoned that the Taylor Law establishes a strong state policy favoring collective bargaining on all terms and conditions of employment. Exceptions exist when a statute explicitly prohibits bargaining or when negotiations would infringe upon nondelegable statutory responsibilities. The court found no explicit prohibition in Education Law § 2590-g (14). While acknowledging the public interest in rooting out corruption, the court emphasized that public policy limitations on collective bargaining must involve important constitutional or statutory duties, which were not present here. The court deferred to PERB’s expertise in interpreting the Civil Service Law, stating that “So long as PERB’s interpretation is legally permissible and so long as there is no breach of constitutional rights and protections, the courts have no power to substitute another interpretation.” The court also rejected the argument that the disclosure requirements were a permissive subject of bargaining, finding no clear evidence that the legislature intended to withdraw this subject from mandatory negotiation. The court distinguished this case from those involving fundamental policy decisions relating to the primary mission of the public employer, concluding that monitoring corruption, while important, is sufficiently attenuated from the school district’s primary educational function. The court stated, Issues of public concern, while unquestionably important, are not to be confused with the strong, unmistakable public policy that would — and then only rarely — require invalidation of a collective bargaining agreement.

  • Rapp v. Carey, 44 N.Y.2d 157 (1978): Limits on Executive Power Absent Legislative Authorization

    Rapp v. Carey, 44 N.Y.2d 157 (1978)

    The Governor of New York cannot, through executive order alone, mandate financial disclosure and restrictions on political/business activities for state employees without explicit or implied authorization from the Constitution or statutes.

    Summary

    This case concerns the extent of the Governor’s executive power in New York. State employees challenged Governor Carey’s Executive Order No. 10.1, which required extensive financial disclosures and restricted political and business activities for many state employees. The Court of Appeals affirmed the lower courts’ decisions, holding that the Governor exceeded his authority by issuing an executive order that effectively created new state policy without legislative approval. The Court emphasized the separation of powers doctrine and the need for legislative action to enact broad policy changes, especially those impacting a wide range of state employees.

    Facts

    Governor Carey issued Executive Order No. 10.1, requiring a large segment of State employees to file detailed personal financial statements with the Board of Public Disclosure. The order applied to employees earning over $30,000 annually or holding managerial/confidential positions in executive departments/agencies appointed by the Governor. The order also restricted these employees from holding political party office and regulated their outside employment/activities. Covered employees were directed to submit financial disclosure statements.

    Procedural History

    Affected state employees brought an action challenging the constitutionality of the Executive Order. The Special Term granted summary judgment to the plaintiffs, declaring the order unconstitutional and enjoining its enforcement. The Appellate Division unanimously affirmed this decision, leading to the appeal to the New York Court of Appeals.

    Issue(s)

    Whether the Governor of New York, under the State Constitution, may mandate, via executive order and without legislative authorization, that state employees file financial disclosure statements and abstain from political and business activities not prohibited by statute.

    Holding

    No, because neither the Constitution nor statutes grant the Governor express or implied authority to impose such requirements unilaterally. Furthermore, the order does not merely implement existing conflict-of-interest legislation but instead creates new policy, a power reserved for the Legislature.

    Court’s Reasoning

    The Court emphasized the principle of separation of powers, noting that the Governor’s power is limited to those powers delegated by the Constitution and statutes. While the Governor possesses broad executive power, including the power to oversee state departments and investigate their affairs (Executive Law, § 6), this does not extend to creating new policy without legislative approval. The Court distinguished Executive Order No. 10.1 from previous executive actions, stating, “But, until 1950, none of those orders had any rule-making component.”

    The Court rejected the argument that the executive order was merely an implementation of Section 74 of the Public Officers Law (the state’s code of ethics). The court stated, “In short, this order is not an implementation of section 74; it is a nullification of it — a nullification, however benevolent in purpose, without benefit of legislative action.” It emphasized that the Legislature deliberately created a code of ethics with broad standards, intending that conflicts of interest be resolved on a case-by-case basis, rather than through blanket prohibitions.

    The court also noted the problematic restriction on political activities which “involves a broad question of policy, hardly resolvable by other than the representatively elected lawmaking branch of government, the Legislature.”

    The Court distinguished the out-of-state cases cited by the defendants, noting that they were based on different constitutional or statutory provisions. The Court concluded by stating, “On no reasonable reading of the Constitution, the Executive Law, or the relevant provisions of the Public Officers Law can the Governor’s exercise of legislative power, exemplified in the executive order, be sustained.” The Court explicitly references the importance of preventing any single branch of government from assuming powers belonging to another, quoting People v. Tremaine, “Rather should we be alive to the imperceptible but gradual increase in the assumption of power properly belonging to another department.”

  • Evans v. Carey, 40 N.Y.2d 1008 (1976): Financial Disclosure by Public Employees and the Balancing of Interests

    Evans v. Carey, 40 N.Y.2d 1008 (1976)

    When the rights and interests of government employees as citizens are balanced against the rights and interests of the government as an employer, a financial disclosure requirement designed to eliminate inefficiency and deter official corruption, which are significant public interests, does not infringe upon individual employees’ constitutional rights.

    Summary

    This case concerns the constitutionality of Executive Order No. 10, which required financial disclosure by certain New York state employees. The plaintiffs challenged the order, arguing it violated their right to privacy. The Court of Appeals upheld the order, distinguishing it from cases involving broader privacy rights and relying on precedents that balance the rights of government employees against the interests of the government as an employer. The court found that the executive order served significant public interests by aiming to eliminate inefficiency and deter corruption, and that it did not unconstitutionally infringe upon employees’ rights.

    Facts

    Executive Order No. 10 mandated financial disclosure by certain public employees in New York. The aim of the order was to deter corruption and eliminate inefficiency within the government. Several employees subject to the order challenged its constitutionality, asserting that it violated their right to privacy.

    Procedural History

    The Appellate Division upheld the constitutionality of Executive Order No. 10. The case was then appealed to the New York Court of Appeals.

    Issue(s)

    Whether Executive Order No. 10, requiring financial disclosure by public employees, unconstitutionally infringes upon the employees’ right to privacy, considering the government’s interest in eliminating inefficiency and deterring official corruption.

    Holding

    No, because the rights and interests of government employees, as citizens, were balanced against the rights and interests of the government, as employer, and the financial disclosure requirement was designed to eliminate inefficiency and deter official corruption, which are significant public interests.

    Court’s Reasoning

    The Court of Appeals affirmed the Appellate Division’s decision, finding the Executive Order constitutional. The court distinguished the case from Griswold v. Connecticut, which recognized a broad right to privacy, noting the vastly different context. Instead, the court relied on precedent such as United Public Workers v. Mitchell and Civil Serv. Comm. v. Letter Carriers, which involved balancing the rights of government employees against the interests of the government as an employer. The court emphasized that the Executive Order was designed to eliminate inefficiency and deter official corruption, which are significant public interests. The court stated that the order “does not infringe upon individual employees’ constitutional rights.” The court acknowledged the cogent justification presented by the Presiding Justice at the Appellate Division, supporting the constitutionality of financial disclosures by public employees. The concurring judges highlighted the importance of the public interest in deterring corruption and promoting efficiency within government. The court implicitly found the Executive Order was a reasonable means to achieve these ends.