Union Endicott Cent. School Dist. v Endicott Teachers' Assn.

[*1] Union Endicott Cent. School Dist. v Endicott Teachers' Assn. 2009 NY Slip Op 52025(U) [25 Misc 3d 1210(A)] Decided on October 6, 2009 Supreme Court, Broome County Lebous, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 6, 2009
Supreme Court, Broome County

Union Endicott Central School District, Plaintiff,

against

Endicott Teachers' Association, Erik Herr as President of the Endicott Teachers' Association, and Joanne Peters, Defendant.



Joanne Peters, Plaintiff/Petitioner,

against

Union-Endicott Central School District; John Cornick, as President of the Board of Education of the Union-endicott Central School District; Suzanne McLeod, as Superintendent of the Union-Endicott Central School District; and James Coon, Individually and as former Superintendent of the Union-Endicott Central School District, Defendants/Respondents.



2007-2590



THE LAW FIRM OF FRANK W. MILLER

BY:FRANK W. MILLER, ESQ., OF COUNSEL

6575 KIRKVILLE ROAD

EAST SYRACUSE, NY 13057

COUNSEL FOR:

UNION ENDICOTT CENTRAL SCHOOL DISTRICT;

JOHN CORNICK, as President of the Board of Education of the UNION-ENDICOTT CENTRAL SCHOOL DISTRICT;

SUZANNE McLEOD, as Superintendent of theUNION-ENDICOTT CENTRAL SCHOOL DISTRICT;

JAMES COON, Individually and as former Superintendent

of the UNION-ENDICOTT CENTRAL SCHOOL DISTRICT.

NEW YORK STATE UNITED TEACHERS

JAMES R. SANDNER, ESQ., GENERAL COUNSEL

BY:RICHARD E. CASAGRANDE, ESQ. AND

MARILYN RASKIN-ORTIZ, ESQ., OF COUNSEL

800 TROY-SCHENECTADY ROAD

LATHAM, NY 12110-2455

COUNSEL FOR:

JOANNE PETERS;

ENDICOTT TEACHERS' ASSOCIATION; ERIK HERR, as President of the Endicott Teachers' Association.

Ferris D. Lebous, J.

This Decision & Order addresses two separate actions involving a former teacher, Joanne Peters, with the Union-Endicott Central School District regarding her retirement and right to receive retiree health insurance under a Collective Bargaining Agreement. [*2]

BACKGROUND

A brief recitation of the chronology of events is warranted. Joanne Peters was a teacher for the Union-Endicott Central School District (hereinafter "School District") since 1990.

In 2006, Ms. Peters became the subject of an investigation into stolen school property.

On March 2, 2007, before the investigation was completed, Ms. Peters tendered her resignation to the Board of Education of the School District stating her intent to resign effective June 30, 2007.

On March 27, 2007, police executed a search warrant at Ms. Peters' home. Thereafter, Ms. Peters was arrested and charged with grand larceny.

On March 27, 2007, the School District placed Ms. Peters on suspension. On June 5, 2007, the School District served Ms. Peters with disciplinary charges under Education Law § 3020-a.

The Board of Education decided to delay the processing of Ms. Peters' retirement pending determinations on the criminal charges and disciplinary charges.

In May 2007, the Endicott Teachers' Association and Ms. Peters filed a grievance and demand for arbitration regarding the Board of Education's decision to delay the processing of Ms. Peters' retirement (hereinafter "Grievance No.1").

On July 1, 2007, the New York State Retirement System (hereinafter "TRS") approved Ms. Peters' retirement application and began paying her a retirement allowance as of that date.

The parties filed cross-applications regarding Grievance #1 (Index No. 2007-2590). The School District sought to permanently stay arbitration of Grievance #1 and the Endicott Teachers' Association and Ms. Peters sought to compel arbitration of the same. By Order dated February 1, 2008, this court granted the School District's application to permanently stay arbitration of Grievance #1. The School District filed an appeal of said Order to the Third Department.

On April 7, 2008, Hearing Officer Sheila S. Cole issued a Disposition of Motion to Dismiss dismissing the disciplinary charges against Ms. Peters having found, in pertinent part:

[t]hat Ms. Peters has voluntarily, unconditionally, and finally severed her employment relationship with the District, no valid reason remains for the District to pursue Section 3020-a charges against [Peters].

Nothing in this decision should bear upon the rights of the parties to any dispute concerning Ms. Peters' claim for health insurance under the collective bargaining agreement. Any right Ms. Peters may have to District paid health insurance benefits, which she seeks to enforce through the grievance procedure, derives from the collective bargaining agreement [*3]between the District and the Teachers' Association. In contrast, Ms. Peters' right to respond to Section 3020-a charges derives from statute. The determination here does not address Ms. Peters' eligibility for contractual benefits.

(Disposition of Motion to Dismiss, pp 14-15).

On April 28, 2008, the Board of Education adopted a resolution accepting Hearing Officer Cole's Disposition of Motion to Dismiss. In essence, said April 28, 2008 resolution purported to retroactively terminate Ms. Peters as of July 1, 2007.[FN1]

On June 19, 2008, the Endicott Teachers' Association and Ms. Peters filed a grievance challenging the School District's April 2008 resolution alleging that said resolution equated to a final determination of denial of Ms. Peters' retiree health insurance which violated the "expressed written words" of the parties' Collective Bargaining Agreement (hereinafter "Grievance #2"). The parties filed cross-applications to stay and compel arbitration of Grievance #2 (Index No. 2007-2590).

On September 5, 2008, Ms. Peters commenced a hybrid contract action/Article 78 proceeding (Index No. 2008-2351). By agreement of the court and counsel, all matters under both Index No. 2007-2590 and Index No. 2008-2351 were adjourned without date pending resolution of the appeal involving Grievance #1.

On November 3, 2008, the criminal charges against Ms. Peters were dismissed with prejudice by way of a six month adjournment in contemplation of dismissal.

On February 11, 2009, the Third Department affirmed this court's stay of Grievance #1 (Memorandum and Order issued on February 11, 2009).

On August 21, 2009, this court heard oral argument from counsel on all pending matters.

PENDING APPLICATIONS

With respect to Index No. 2007-2590, the School District filed an order to show cause and petition seeking to permanently stay arbitration of Grievance #2 under CPLR Article 75, as well as a finding of contempt against opposing counsel. The Endicott Teachers' Association and Ms. Peters cross-moved to compel arbitration of Grievance #2.

With respect to Index No. 2008-2351, on September 5, 2008, Ms. Peters initiated a hybrid contract action/Article 78 proceeding in the event Grievance #2 were determined not to be [*4]arbitrable. Additionally, Ms. Peters also moves within the context of the hybrid action for an Order: (1) rejecting the School District's affirmative defenses and/or objections in point of law; (2) granting summary judgment; (3) permitting joinder of the Endicott Teachers' Association as a party, if necessary; and (4) consolidation with Index No. 2007-2590. The School District interposed an answer with objections in point of law, as well as a counterclaim seeking a declaratory judgment that Ms. Peters is obligated to repay the cost of health and dental insurance.

Ms. Peters acknowledges that this hybrid action was commenced solely to preserve her ability to enforce her right to the retiree health insurance benefits set forth in Article 64 of the CBA in the event the School District was successful on its application to permanently stay arbitration of Grievance #2 under Index No. 2007-2590. In other words, the parties all agree that the merits of the hybrid action and related application need only be addressed if this court finds that Grievance #2 is not subject to arbitration.

For that reason, the court will first address the cross-applications under No. 2007-2590, namely the School District's motion to permanently stay arbitration of Grievance #2 and Ms. Peters' motion to compel arbitration of the same as said determination may obviate the need for an analysis of the pending applications under Index No. 2008-2351.

DISCUSSION

I.Arbitrability (Index No. 2007-2590)

It is well-settled that the issue of arbitrability is determined by the following two-prong inquiry:

[f]irst, a court must decide whether 'arbitration claims with respect to the particular subject matter of the dispute [are] authorized' [citations omitted]; i.e., that the claims are 'lawfully fit for arbitration' [citation omitted]. Second, the court must ascertain whether the authority to arbitrate was in fact exercised and the parties consented by the terms of their particular agreement to refer disputes in this specific area to arbitration [citations omitted].

(Matter of City of New York v Uniformed Fire Officers Assn., Local 854, IAFF, AFL-CIO, 95 NY2d 273, 280 [2000]; Matter of Vestal Cent. School Dist. (Vestal Teachers Assn.), 2 AD3d 1190, 1191-1192 [3rd Dept. 2003], lv denied 2 NY3d 708 [2004]).

1.First question, i.e., The "may-they-do-so" or "may-they-arbitrate" prong.

The first question is simply whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance (Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. (United Liverpool Faculty Assn.), 42 NY2d 509 [1977]). The parties agree that there are no statutory or constitutional prohibitions against arbitration of Grievance #2, but disagree on the existence of public policy prohibitions.

The School District argues that it is the public policy of the State that collective bargaining agreements do not extend to former employees. The court disagrees. The Third [*5]Department has held that there is no public policy preventing arbitration of retiree health insurance claims (Matter of City of Ithaca (Ithaca Paid Fire Fighters Assn., IAFF, Local 737), 29 AD3d 1129 [3rd Dept 2006] "[t]here is no prohibition against arbitrating a dispute originating from the terms of a collective bargaining agreement concerning health insurance benefits for retirees, which are permitted albeit not mandatory subjects of collective bargaining...."). Here, the court finds that Ms. Peters is simply trying to enforce bargained-for rights that accrued to her by virtue of her employment and which take effect only after she retires. As such, this court finds there is no public policy prohibiting a former employee such as Ms. Peters from arbitrating rights arising from a collective bargaining agreement that accrued during her employment tenure under said agreement.[FN2]

The School District's next argument - and the true core of its positions in these matters - is that public policy prohibits conferring contractual benefits upon an employee guilty of misconduct under the "faithless servant" doctrine. In response, the Endicott Teachers' Association and Ms. Peters contend there has been no finding that Ms. Peters engaged in theft or any other misconduct while an employee.

The School District's attempt to convince this court that public policy prohibits conferring contractual benefits upon an employee charged with misconduct is unavailing. This record establishes that Ms. Peters entered a plea of not guilty to a charge of grand larceny and that said charge was ultimately dismissed. Additionally, the administrative disciplinary charges were likewise dismissed without any finding of guilt. In this court's view, the School District's position "[a]ssumes that its allegations against [Peters] are meritorious, so consideration of that contention would necessarily involve consideration and approval of the merits, which are not the concern of courts in determining whether a matter is arbitrable [citation omitted]" (Matter of Town of Evans (International Bhd. of Elec. Workers, Local 41), 6 AD3d 1157, 1158 [4th Dept 2004], rearg denied 9 AD3d 920 [2004]). In view of the foregoing, this court finds that there is no statutory, constitutional or public policy prohibition against arbitration of Grievance #2.

2.Second question, i.e., The "did-they-agree-to-arbitrate" prong

If, as here, there is no statutory, constitutional or public policy prohibition against arbitration, then the court must examine the collective bargaining agreement in order to determine if the parties have agreed to arbitrate the dispute at issue (Matter of Board of Educ. of Watertown City School Dist. (Watertown Educ. Assn.), 93 NY2d 132 [1999]; Liverpool, 42 NY2d at 513-514). Quite simply, "[t]his step typically turns on drafting skills and language entirely within the control of the parties" (Watertown, 93 NY2d at 140). [*6]

The CBA clause at issue defines a grievance subject to arbitration as an "alleged violation of the expressed written words in th[e] agreement" (CBA Article 61.1.1). This court previously found that said clause was narrow and it will proceed under that interpretation (Matter of Corinth Cent. School Dist. (Corinth Teachers Assn.), 77 AD2d 366 [3rd Dept 1980], lv denied 53 NY2d 602 [1981]; In re Oxford Employee Support Personnel Ass'n (Oxford Academy and Cent. School Dist.), 40 AD3d 1297 [3 Dept. 2007], lv denied 9 NY3d 807 [2007]). In any event, whether an arbitration clause is deemed broad or narrow, the court must still inquire whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the collective bargaining agreement (Matter of City of Johnstown (Johnstown Police Benevolent Assn.), 99 NY2d 273 [2002]; Matter of Odessa-Montour Cent. School Dist. (Odessa-Montour Techers Assn.), 271 AD2d 931, 932 [3rd Dept 2000]; Matter of City of Watertown v Watertown Firefighters, Local 191, 6 AD3d 1095, 1096 [4th Dept 2004]).

The School District argues the CBA contains "[n]o standards that compel the Board of Education to accept or reject any specific [retirement] application" (Reply Memorandum of Law on Behalf of Petitioner Union-Endicott Central School District dated August 13, 2009, p 3). Stated another way, the School District asserts there is no express prohibition in this CBA that establishes that the Board of Education cannot consider the allegedly criminal misconduct of Ms. Peters in determining not to grant her retiree health insurance benefits. In support of these arguments the School District relies on CBA Article 61.4 (hereinafter "the Management Rights" clause) and CBA Article 61.3.4.2 (hereinafter "the Arbitrator's Powers" clause).[FN3]

The Management Rights clause states:

[e]xcept as otherwise specifically provided in this agreement, management has the sole and exclusive right to exercise all of the rights and functions of management and the exercise of such rights and functions shall not be subject to grievance or arbitration provisions of this agreement.

(CBA Article 61.4).

The Arbitrator's Powers clause states:

[t]he arbitrator shall have no power or authority to make any decision that requires the commission of an act prohibited by law or which is violative of the terms of this agreement.

(CBA Article 61.3.4.2). [*7]

Taken together, the School District argues that these Articles preclude arbitration of an issue which is fundamentally a management right or managerial prerogative, namely whether Ms. Peters should be treated as a retiree.

Ms. Peters contends that her eligibility for health insurance is governed by the qualifications specified in CBA Article 64.1.1 which states, in pertinent part, as follows:

Qualifications:

(1)Eligibility for a regular retirement in the New York State Teachers' Retirement System.

(2)Written letter of resignation (retirement) received in the District Personnel Office no later than March 15 of the year of retirement.

(3)Resignation (for retirement) effective July 1 of the same year.

(CBA Article 64.1.1 [hereinafter the "Retirement Benefit" clause]; emphasis added).

Ms. Peters contends that the School District's denial of her retiree health insurance bears a precise and specific relation to these three qualifications as expressly set forth in CBA Article 64.1.1. This court agrees. While it is not within this court's province to determine whether Ms. Peters has satisfied the qualifications set forth in Article 64, it would certainly appear that she has satisfied the three-pronged qualifications test given her fifteen years of service, her eligibility for retirement with the TRS, and that her written letter of resignation for purposes of retirement that was received by the District. Thus, this court finds that even under a narrow interpretation of the arbitration clause, these parties specifically agreed to arbitrate disputes arising from alleged violations of the expressed written words of this CBA, namely Article 64.

Moreover, the court also accepts Ms. Peters' argument that any exclusion of a substantive issue from arbitration under a collective bargaining agreement must be express (Silverman v Benmore Coats, Inc., 61 NY2d 299, 308 [1984], reargument denied 62 NY2d 803 [1984]; In re Massena Cent. School Dist. (Massena Confederated School Employees Ass'n, NYSUT, AFL-CIO ex rel Fetterly, 64 AD3d 859 [3rd Dept 2009]). Ms. Peters contends that there is no specific exclusion of alleged violations of Article 64 from arbitration. By comparison, these parties did specifically exclude other substantive articles from the grievance/arbitration procedure in this CBA by designating certain areas to be "non-grievable", "not grievable" or "will not be subject to the grievance procedure" (CBA Article 41.1.3, 50.3.4, & 52.1). Thus, by the parties express exclusions, certain subjects were deemed to be within the School District's sole discretion and excluded from arbitration. Quite simply, that is not the case with CBA Article 64 as no such express exclusion language is incorporated into that Article. Nor does the general reservation of Management Rights prohibit arbitration of this matter. The court also finds that the Arbitrator's [*8]Powers clause is nothing more than a recitation of the grounds for vacatur under CPLR 7511 (Matter of Board of Education of Enlarged City School Dist. of City of Auburn (Auburn Teachers Assn.), 49 AD2d 35, 39-40 [4th Dept 1975], lv denied 38 NY2d 740 [1975]). In this court's view, there is no express exclusion of Article 64's retiree rights to health insurance under this CBA.

Finally, the court rejects the School District's argument that Grievance #2 was untimely because the Association and Ms. Peters "knew" in June 2007 that her health insurance benefits were denied. The records unequivocally establishes that Ms. Peters' health insurance benefits were not denied until April 2008.[FN4] As such, Grievance #2 was timely filed. The court has considered the parties' remaining arguments and finds them to be without merit.

II.CONTEMPT

Also with respect to Index No. 2007-2590, the School District seeks a finding of contempt against opposing counsel for expressly disregarding the language of this court's order dated February 1, 2008.

In the first instance, the School District's request for contempt fails to contain the required statutory notice pursuant to Judiciary Law § 765. On this basis alone, the School District's motion for contempt must be denied.

Parenthetically, the court notes that the contempt application is substantively without merit as well. Nothing in this court's order dated February 1, 2008 prohibited counsel from filing a grievance relating to a resolution that had not even been issued as of that time, namely the Board of Education's April 28, 2008 resolution. Moreover, the Third Department's Memorandum and Order even envisioned such further applications (Memorandum and Order dated February 11, 2009, p 3, fn 2). Indeed, in this court's view, counsel's filing of Grievance #2 was proper and valid in all respects.

The court finds the School District's motion for contempt to be both procedurally and substantively improper and, quite frankly, bordering on questionable tactics in its own right. That having been said, the court notes that counsel on both sides have been engaged in a lengthy and litigious legal battle over these issues and - until now - have offered only well-reasoned oral and written materials. The court will chalk up this contempt motion as a minor deviation to the otherwise high level of professionalism that has been exhibited by both sides. [*9]

Consequently, with respect to Index No. 2007-2590, the School District's motions to permanently stay arbitration of Grievance #2 and for contempt are DENIED, and the motion by the Endicott Teachers' Association and Ms. Peters to compel arbitration of Grievance #2 is GRANTED. In view of this determination the court need not address the merits of the parties arguments relative to Index No. 2008-2351.

CONCLUSION

With respect to Index No. 2007-2590, the School District's motion to permanently stay arbitration of Grievance #2 is DENIED, the School District's motion for contempt is DENIED, and Ms. Peters' motion to compel arbitration of Grievance #2 is GRANTED.

This decision constitutes an order of the court. The mailing of a copy of this Decision and Order by this court shall not constitute notice of entry.

It is so ordered.

Dated:October 6, 2009

Binghamton, New York

s/ Hon. Ferris D. Lebous

Hon. Ferris D. Lebous

Justice, Supreme Court Footnotes

Footnote 1:Prior to this resolution, the Board of Education took the position that it had made no final determination on Ms. Peters' eligibility for retiree health insurance pending the outcome of the 3020-a proceeding and the criminal charges.

Footnote 2:Nor would a determination compelling arbitration confer retiree health insurance on Ms. Peters, it would merely require the parties to present their evidence to an arbitrator for ultimate determination, subject to court review.

Footnote 3:The School District's additional reliance on Article 64.3.3 is without merit as said provision relates only to teaching assistants and registered nurses.

Footnote 4:For purposes of argument it need not matter whether Ms. Peters' health insurance benefits are deemed rejected as of April 24, 2008 (the date of Superintendent Coon's letter) or April 28, 2008 (the date of the Board of Education's resolution accepting the Hearing Officer's disposition).