New York Law Review

Tag: past practice

  • Chenango Forks Central School District v. New York State Public Employment Relations Board, 21 N.Y.3d 256 (2013): Enforceability of Past Practices Under the Taylor Law

    Chenango Forks Central School District v. New York State Public Employment Relations Board, 21 N.Y.3d 256 (2013)

    A long-standing practice, known to both the employer and employees, can constitute a binding past practice under New York’s Taylor Law, requiring the employer to bargain before discontinuing it, even if it’s not explicitly mentioned in the collective bargaining agreement.

    Summary

    Chenango Forks Central School District unilaterally terminated its practice of reimbursing Medicare Part B premiums to retirees. The Union filed an improper practice charge with PERB, arguing this violated the Taylor Law. An arbitrator found no contractual obligation for the reimbursement. PERB ultimately ruled that the reimbursement was a binding past practice, despite not being in the CBA, because it was unequivocal, uninterrupted, and created a reasonable expectation among employees. The Court of Appeals affirmed, holding that PERB reasonably determined the arbitrator’s decision wasn’t binding and substantial evidence supported PERB’s finding of a binding past practice.

    Facts

    The Chenango Forks Central School District reimbursed Medicare Part B premiums for retirees 65 or older. Initially, this was required by their health insurance plan. In 1988, they switched plans, and the subsequent CBA in 1990 didn’t mandate this reimbursement, but the District continued it. The 2001-2004 and 2004-2007 CBAs were also silent on this issue. In June 2003, the District announced termination of this reimbursement due to costs.

    Procedural History

    The Union filed a contract grievance and an improper practice charge with PERB. The ALJ initially dismissed the charge pending the grievance outcome. After an arbitrator found no contractual obligation, the Union reopened the PERB charge. The ALJ then found the District violated Civil Service Law § 209-a (1) by unilaterally discontinuing the benefit. PERB affirmed, finding a binding past practice. The Appellate Division confirmed PERB’s determination. The School District appealed to the Court of Appeals.

    Issue(s)

    1. Whether PERB should have deferred to the arbitrator’s finding that there was no past practice.

    2. Whether PERB’s decision that the Medicare Part B premium reimbursement constituted a binding past practice was supported by substantial evidence.

    3. Whether continued Medicare Part B premium reimbursement absent a contractual requirement constitutes an unconstitutional gift of public funds.

    Holding

    1. No, because the arbitrator’s findings relating to past practice fell outside the scope of his authority, and any determination by the arbitrator with respect to past practice under the Taylor Law was repugnant to that statute.

    2. Yes, because the School District’s knowledge of the payments was shown by managerial oversight, and the Union and bargaining unit employees’ knowledge was established by testimony given at the hearing.

    3. No, because the reimbursement of Medicare Part B premiums does not constitute an unconstitutional gift of public funds if the Union has a right under the Taylor Law to such reimbursement because it is a binding past practice.

    Court’s Reasoning

    The Court held that PERB’s decision was legally permissible, rational, and supported by substantial evidence. PERB did not need to defer to the arbitrator’s decision because the arbitrator’s authority was limited to contract interpretation, and any statements regarding past practice under the Taylor Law were dicta and potentially repugnant to the statute. The Court cited Matter of New York City Tr. Auth. (Bordansky) (4 PERB ¶ 3031 [1971]), which outlines when PERB should defer to arbitration. The Court reasoned that the arbitrator’s statement regarding the voluntariness of the District’s conduct did not align with the Taylor Law’s criteria for establishing a past practice. The court referenced Matter of County of Nassau (24 PERB ¶ 3029 [1991]), establishing the test for a binding past practice: “the practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected [bargaining] unit employees that the [practice] would continue.” The Court also dismissed the School District’s argument that the reimbursement was an unconstitutional gift of public funds, as the Taylor Law provides the statutory permission for such practices that constitute terms and conditions of employment.

  • Aeneas McDonald Police Benevolent Association, Inc. v. City of Geneva, 92 N.Y.2d 326 (1998): Enforceability of Past Practices for Retired Employees’ Benefits

    Aeneas McDonald Police Benevolent Association, Inc. v. City of Geneva, 92 N.Y.2d 326 (1998)

    A municipality is not legally bound to continue a past practice of providing a certain level of health benefits to retired employees if that practice is not explicitly guaranteed by a collective bargaining agreement or other enforceable contract.

    Summary

    The Aeneas McDonald Police Benevolent Association sued the City of Geneva, challenging the city’s decision to reduce health insurance benefits for retired police officers. The Association argued that the City’s long-standing practice of providing a certain level of benefits, established by a 1972 resolution, created an enforceable right. The New York Court of Appeals held that absent an explicit contractual obligation (such as a collective bargaining agreement), the City was not obligated to maintain the prior level of benefits for retirees. The statutory duty to bargain in good faith under the Taylor Law does not extend to retirees.

    Facts

    In 1972, the City of Geneva passed Resolution No. 33, promising health benefits to retired city employees through a specific plan. For 24 years, the City provided these benefits, using different providers but maintaining a consistent level of coverage. In 1996, the City announced that, starting January 1, 1997, retirees’ health insurance would be changed to a plan with inferior coverage.

    Procedural History

    The Aeneas McDonald Police Benevolent Association filed a CPLR article 78 proceeding challenging the City’s right to reduce the retirees’ health benefits. The Supreme Court granted the petition, ordering the City to continue the more generous health plan. The Appellate Division reversed, dismissing the petition. The Court of Appeals then affirmed the Appellate Division’s decision.

    Issue(s)

    1. Whether the petitioner, Aeneas McDonald Police Benevolent Association, Inc., has standing to bring the proceeding.
    2. Whether a municipality’s past practice of providing a certain level of health benefits to retired employees creates an enforceable right to compel the continuation of those benefits in the absence of a collective bargaining agreement or other contract.

    Holding

    1. Yes, because the petitioner’s membership includes retirees who would have individual standing, its mission aligns with its members’ interests, and individual member participation is unnecessary for complete relief.
    2. No, because the statutory duty to bargain under the Taylor Law does not extend to retirees, and a past practice, independent of a contract term, does not create a contractual right.

    Court’s Reasoning

    The Court of Appeals found that while a past practice involving a mandatory subject of negotiation (like health benefits for current employees) creates a statutory bargaining right for current employees, this right does not extend to retirees. The Court emphasized that a public employer’s statutory duty to bargain does not include retirees, citing Civil Service Law § 201 (4), (7) (a); § 204 (2). The court distinguished the role of past practices in arbitration, where arbitrators have broad discretion to consider such evidence, from court proceedings, which are bound by substantive rules of law. The Court stated that “past practice, like any other form of parol evidence, is merely an interpretive tool and cannot be used to create a contractual right independent of some express source in the underlying agreement.” The Court also noted that a municipal resolution is a unilateral action that is temporary and does not create vested contractual rights, citing Matter of Jewett v Luau-Nyack Corp., 31 NY2d 298, 306. The Court concluded that because no collective bargaining agreement or other contract addressed retiree health benefits, the City was free to alter them unilaterally.