Incorporated Village of Lynbrook v. New York State Public Employment Relations Board

OPINION OF THE COURT

We hold that the State Public Employment Relations Board (PERB) did not abuse its discretion or act in an arbitrary or capricious manner when it determined that, notwithstanding the provisions of the 1973 amendment to subdivision 4 of section 201 of the Civil Service Law, demands for (1) severance pay keyed in amount to the number of years of employment and (2) hospitalization insurance benefits for families of current employees who die after retirement are not prohibited subjects of collective bargaining in the public sector.^[1]

As presently formulated, the statute excludes "benefits provided by or to be provided by a public retirement system, or payments to a fund or insurer to provide an income for retirees, or payment to retirees or their beneficiaries” from

In essence, PERB adopted the PBA’s position on all issues,^[5] ordering the parties to resume their negotiations on this basis. But, the Appellate Division, while it confirmed the board’s determination as to termination pay, dismissed that aspect of the proceeding involving the hospitalization benefits, finding them to be nonnegotiable "retirement benefits”. One Justice, in a partial dissent, would have gone further; he expressed the view that the termination pay item was subject to the same disqualification. For the ensuing reasons, PERB should be upheld.

We emphasize at the outset the narrowness of our inquiry. The scope of our review of PERB’s interpretation of the Civil Service Law is a limited one. Simply stated, unless the board’s determination was "afiected by an error of law” or was "arbitrary and capricious or an abuse of discretion”, we will not interfere (CPLR 7803, subd 3). For, "[s]o 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” (Matter of West Irondequoit Teachers Assn. v Helsby, 35 NY2d 46 , 50). As the agency charged with implementing the fundamental policies of the Taylor Law, the board is presumed to have developed an expertise and judgment that requires us to accept its construction if not unreasonable (see

In ruling that termination pay was not a "retirement benefit” forbidden by subdivision 4 of section 201, PERB reasoned not only that the award would be made to employees who terminate their services for reasons other than retirement, but that, since it would be in one lump sum geared to the length of tenure, it represents deferred compensation for services rendered, as opposed to the continuing, open-ended obligation of a pension. This result was one permissible for it to reach under a statute whose imprecise language and unrevealing legislative history afford but meager guidance to an agency called upon to distinguish negotiable benefits from those that are prohibited.

Moreover, in so concluding, PERB expressly relied upon Board of Educ. v Associated Teachers of Huntington ( 30 NY2d 122 , 128) and Matter of Weber v Levitt ( 41 AD2d 452 , affd on opn below 34 NY2d 797 , cert den 419 US 997 ), two recent decisions of this court. In Huntington, we held that a lump-sum retirement incentive was not a feature of a "retirement system”, which section 113 of the Retirement and Social Security Law forbade the municipality to create, because it was compensation for services actually rendered. Likewise, in Weber, we endorsed a holding that deemed computation of termination pay on the basis of the length of employee service a persuasive indication that it represented compensation for services performed year to year rather than solely in the year it was paid; accordingly, we supported a prorating of such sums in calculating the employee’s pension base (see Retirement and Social Security Law, § 302, subd 9). It therefore cannot be said that the distinction made by PERB in the present case is either irrational or so contrary to public policy as to be "legally [im]permissible” (cf. Matter of Susquehanna Val. Cent. School Dist. at Conklin [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614 , 616-617; see, generally, Ruffo, Sovereignty Revisited and Muddled in New York Public Employment, 416 NYS2d, Advance Sheet No. 2, June 27, 1979, p 31).^[6]

Further, to the extent that the purpose of subdivision 4 of section 201 was to insulate public employers from pension demands incorporating open-ended escalation factors, the bargaining process itself provides a similar safeguard here where no constitutional provision prohibits the abrogation of such benefits in future contract years (cf. Cook v City of Binghamton, 48 NY2d 323 ). And finally, since the Civil Service Law itself establishes just such a plan for employees and retired employees of local governments (Civil Service Law, § 163, subd 4; see, also, General Municipal Law, § 92-a), it would be odd, to say the least, for the Legislature to have wished to blunt the force of these independent provisions without a telltale declaration of its purpose (cf. Congregation Kollel Horabonim v Williams, 48 NY2d 301 ).

In sum, we conclude that PERB’s determinations were neither irrational, unreasonable nor otherwise affected by an error of law, and therefore the order of the Appellate Division should be modified so as to confirm those determinations in their entirety.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler and Meyer concur.