BOARD OF COLLECTIVE BARGAINING

PBA, 12 OCB2d 21 (BCB 2019) (IP) (Docket No. BCB-4271-18)

Summary of Decision: The City alleged that the PBA violated NYCCBL § 12-306(b)(2) and (c)(1) when it refused to bargain in good faith over health benefits during negotiations for a successor collective bargaining agreement. The PBA filed a motion to dismiss and argued that the Board lacks jurisdiction over the petition, that the petition is untimely and moot, and that the City waived its right to the relief it seeks. The City opposed the dismissal of the petition. The Board determined that it had jurisdiction over the petition, which was timely filed. It further found that the City’s claim was neither moot nor waived. Accordingly, the motion was denied. (Official decision follows.) __________________________________________________________________

OFFICE OF COLLECTIVE BARGAINING BOARD OF COLLECTIVE BARGAINING

In the Matter of the Improper Practice Proceeding -between- THE CITY OF NEW YORK, Petitioner, -and- PATROLMEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC.,

Respondent. __________________________________________________________________

INTERIM DECISION AND ORDER On April 16, 2018, the City of New York (“City”) filed a verified improper practice petition against the Patrolmen’s Benevolent Association of the City of New York, Inc. (“PBA” or “Union”) claiming that it violated § 12-306(b)(2) and (c)(1) of the New York City Collective Bargaining Law (New York City Administrative Code, Title 12, Chapter 3) (“NYCCBL”) by refusing to bargain in good faith over health benefits during negotiations for a successor collective bargaining agreement. On October 26, 2018, the Union filed a motion to dismiss the petition (“Motion”), in

12 OCB2d 21 (BCB 2019) 2 which it argues that the Board lacks jurisdiction over the petition, that the petition is untimely, that the petition is moot in light of PERB’s recent designation of a public interest arbitration panel, and that the City has waived its right to the relief it seeks. In response to the Motion, the City argues that the Board has jurisdiction to hear the claim, that the petition is timely and not moot, and that it has not waived its right to seek relief. The Board finds that it has jurisdiction over the petition, which was timely filed. It further finds that the City’s claim is not moot and that the City did not waive its right to file the instant improper practice petition. Accordingly, the Motion is denied.

BACKGROUND In considering a motion to dismiss, the Board “accepts as true . . . the facts alleged in the petition and draw[s] all permissible inferences in favor of Petitioner from the pleadings.” Kingsley, 1 OCB2d 31, at 2 (BCB 2008); see also James-Reid, 77 OCB 29, at 11-12 (BCB 2006). As to relevant facts or events alleged in the Motion that arose after the petition was filed, the facts relied upon by the Board are taken from documents in evidence that are undisputed. Since the late 1960s, the City has negotiated and entered into agreements with the Municipal Labor Committee (“MLC”) concerning the terms and conditions of the Citywide health benefits program. The MLC is a council of certified public employee organizations representing City employees created pursuant to a Memorandum of Understanding (“MOU”) dated March 31, 1966, and codified in NYCCBL § 12-303(k). Representatives of the Union have served in leadership roles in the MLC and have historically been a part of the MLC’s negotiation of Citywide health benefits. Additionally, the terms of MLC-negotiated agreements have been applied to PBA bargaining unit members.

12 OCB2d 21 (BCB 2019) 3 In 2014, the City and the MLC entered into a letter agreement (“2014 Health Benefits Agreement”), in which the MLC agreed to negotiate with the City to generate a specified amount of savings derived from modifications to Citywide health benefits for fiscal years 2015 through 2018 and expressly provided that the parties would continue to negotiate savings for fiscal year 2019 and beyond. In 2016, the City and the MLC entered into another agreement (“2016 Health Benefits Agreement”), which identified agreed-upon modifications to Citywide health benefits to reach the savings targets set forth in the 2014 Health Benefits Agreement. Following the execution of the 2016 Health Benefits Agreement, the Union disclaimed any obligation imposed by both the 2014 and 2016 Health Benefits Agreements. It also filed a lawsuit against the City in Supreme Court, New York County, seeking to prevent the City’s implementation of modifications to health benefits for Union members. In response, the City filed an improper practice petition alleging that the Union failed to bargain in good faith with the City when it challenged the 2014 and 2016 Health Benefits Agreements in court (“2016 IP”). While both matters were pending, on February 1, 2017, the City and the Union negotiated a MOU covering the years 2012-2017 (“2012-2017 MOU”). The 2012-2017 MOU expressly incorporated the 2014 and 2016 Health Benefits Agreements. Additionally, the parties agreed to the withdrawal of the pending matters. On April 2, 2017, the Union delivered a bargaining notice to the City to commence negotiations towards a successor to the 2012-2017 MOU. The parties held their first negotiation session on May 1, 2017, and the Union submitted proposals, but none that related to health benefits. A second bargaining session was held on July 27, 2017, at which the City submitted proposals including one that sought a 10% savings in costs for “Pre-65 retiree health benefits for active employees.” (Pet., Ex. 12) Thereafter, on August 14, 2017, the Union responded to the City’s

12 OCB2d 21 (BCB 2019) 4 bargaining proposals in a letter that also stated its belief that the parties had reached impasse. With regard to the City’s health benefits proposals, the Union responded that they were: vague and overbroad, and concern prohibited and/or nonmandatory subjects of bargaining. Moreover, the PBA categorially rejects these proposals, as we have done in prior rounds, since there is no economic justification for further reducing the fringe benefits of the New York City police officers given their competitive standing with police officers working in comparable communities.

(Pet., Ex. 13) On August 15, 2017, the Union filed a Declaration of Impasse with the New York State Public Employment Relations Board (“PERB”). In an August 22, 2017 letter to PERB, the City opposed the Declaration of Impasse as premature and asked that the parties be directed to resume negotiations. After further letters from both the Union and the City in support of their positions, on September 12, 2017, PERB’s Director of the Office of Conciliation found that impasse was premature and directed the parties to bargain for an additional 45-day period. On September 27, 2017, the City and the MLC met, and the City proposed modifications to the Citywide health benefits to generate future savings. The Union’s General Counsel and Fund Administrator were both present at this meeting. Thereafter, on October 6, 2017, the City and the Union held a third bargaining session. The Union submitted a revised proposal, which also did not contain any terms relating to health benefits. On October 13, 2017, the Union sent the City a letter advising it that it “has not ceded, and will not cede, the PBA’s Authority to bargain on behalf of police officers to any other person or entity, including the [MLC] . . . with respect to any subject, including but not limited to, health care benefits.” (Pet., Ex. 20) That letter ended by stating that the Union “look[s] forward to bargaining with the City with respect to all terms and conditions of employment.” (Id.)

12 OCB2d 21 (BCB 2019) 5 A fourth bargaining session was held on October 18, 2017, during which the City submitted a proposal that the Union, as a member of the MLC, achieve its proportion of the savings targets proposed at the September 27, 2017 MLC meeting. The City claims that the Union did not respond to or engage in bargaining over this proposal. The following day, the City responded to the Union’s October 13 letter by stating that it would continue bargaining with the MLC over health benefits. The letter further stated that “[n]otwithstanding that [the] MLC is and has historically been the bargaining representative for municipal workers on health benefits, we are always happy to engage in discussion with you on whatever specific issues the PBA might have on any mandatory subject of bargaining.” (Pet., Ex. 22) On October 27, 2017, the Union once again wrote to PERB and requested that it accept the Union’s declaration of impasse. The City submitted a letter voicing its opposition to a declaration of impasse and requesting that the parties be directed to continue negotiations. On November 21, 2017, PERB appointed its Assistant Director of Conciliation as a mediator for the parties. The first mediation session was held on January 4, 2018, at which the City submitted a written contract proposal but the Union did not. The City’s proposal included comprehensive PBA-specific health benefits but expressly reserved its position with respect to the MLC’s status as the Union’s health benefits bargaining representative. 1 The City asserts that the Union refused 1 Specifically, the City’s proposal stated that: The City believes that the PBA has already authorized the [MLC] to be its agent for purposes of collective bargaining with respect to health and welfare issues and, accordingly, is bound by negotiations between the City and the MLC with respect to those issues. Notwithstanding the City's belief and without prejudice thereto, in the event the PBA successfully establishes that it has not so

12 OCB2d 21 (BCB 2019) 6 to bargain over the health benefits proposal at this mediation session, as well as during the second and third mediation sessions held on February 8, 2018, and March 1, 2018. 2 Therefore, during the March 1 session, the City specifically asked the Union to state its position as to whether the MLC was or was not its bargaining representative for health benefits. In response, the Union merely referred the City to its October 13, 2017 letter. On March 23, 2018, the Union filed a Petition for Interest Arbitration (“Interest Arbitration Petition”) with PERB. As part of the Interest Arbitration Petition, the Union submitted its October 6, 2017 bargaining proposals. In response, the City requested that the Interest Arbitration Petition be denied or, alternatively, held in abeyance pending the resolution of an improper practice charge that the City filed with PERB (“PERB IP”) on that same day. In the PERB IP, the City claimed that the Union violated Civil Service Law (“CSL”) § 209-a.2(b) by failing and refusing to negotiate in good faith concerning health benefits. The City relayed its position to PERB that a finding that the Union failed to negotiate in good faith would “preclude the existence of an impasse and, in turn, nullify the basis upon which the Arbitration was brought.” (Pet. ¶ 7 (citing Pet., Ex. 5))

authorized the MLC and is free to negotiate on an individual unit basis on issues negotiated by the MLC on behalf of its members, the City submits the following proposals for individual unit negotiations with the PBA. In addition, the City reserves its right to add, delete or otherwise modify this proposal, or reinstate any of its original proposals.

(Pet., Ex. 22) 2 During the March 1, 2018 session, the City submitted a revised health benefits proposal, once again reserving its position that the Union had already authorized the MLC to be its bargaining agent for purposes of health benefits negotiations.

12 OCB2d 21 (BCB 2019) 7 On April 13, 2018, PERB’s Director of Public Employment Practice and Representation notified the parties that the PERB IP was deficient because PERB lacked jurisdiction since the allegation concerned a refusal to bargain in good faith, rather than a scope of bargaining issue. 3 On April 16, 2018, the City sent a letter to PERB seeking reconsideration and a determination that the PERB IP was sufficient because PERB had exclusive jurisdiction over the impasse resolution process, which the City alleged included the PERB IP. Notwithstanding this submission, the City also filed the instant improper practice petition with this Board on April 16, 2018. As relief, the City requested that the Board declare that the Union violated the NYCCBL, order the Union to bargain in good faith, post an appropriate notice of the violation, and order any other remedies the Board deems appropriate. On April 23, 2018, the Union filed a Petition for Declaratory Ruling with PERB seeking a ruling as to the scope of negotiations under the Taylor Law. In particular, that petition seeks a ruling that several of the City’s proposals for health benefits should not be submitted to interest arbitration because they relate to prohibited and/or non-mandatory subjects of bargaining. 4 In a decision dated July 2, 2018, PERB’s Director of Public Employment Practice and Representation upheld the decision that PERB lacked jurisdiction over the PERB IP. Both parties

3 The deficiency notice cited to Patrolmen’s Benevolent Assoc. of the City of New York, Inc., v. City of New York and the New York State Public Employment Relations Board, 97 N.Y.2d 378 (2001) (“PBA v. City of New York”). In that case, the Court of Appeals held that once PERB has declared that an impasse exists between the City and the PBA, PERB has jurisdiction over scope of bargaining issues “to the extent necessary for PERB to exercise its exclusive jurisdiction to resolve impasses. Until such time, [the Board of Collective Bargaining (“BCB”)] retains jurisdiction to determine scope of bargaining outside of the impasse context.” PBA v. City of New York, 97 N.Y.2d 378, 389-90. This includes “a charge that a party is refusing to negotiate in good faith concerning terms and conditions of employment— a dispute which would require BCB to determine scope of bargaining issues.” Id. at 391.

4 The Petition for a Declaratory Ruling is scheduled for hearing.

12 OCB2d 21 (BCB 2019) 8 filed exceptions to this decision. On September 5, 2018, PERB issued a decision upholding the Director’s dismissal of the PERB IP because PERB did not have jurisdiction over the dispute. After the Office of Collective Bargaining (“OCB”) processed the instant petition and a Trial Examiner held a preliminary conference, on July 3, 2018, the Union filed a hybrid CPLR Article 78 proceeding and action for a declaratory judgment in Supreme Court, Albany County, seeking to enjoin the Board from exercising jurisdiction over the petition. 5 On October 10, 2018, the Court denied the Union’s Article 78 petition. 6 Regarding the Union’s Interest Arbitration Petition, PERB sent the parties a list of qualified, disinterested persons for the selection of the public member of the arbitration panel on August 10, 2018. On September 10, 2018, PERB designated the interest arbitration panel, which included John Donoghue as the neutral chairperson. 7 POSITIONS OF THE PARTIES Union’s Position The Union asserts that the Board lacks jurisdiction over this improper practice petition, that the petition is untimely, that it is moot in light of PERB’s recent designation of a public interest

5 The Article 78 petition also sought a finding that the Board’s assertion of jurisdiction was arbitrary and capricious and/or contrary to the law and declaring that PERB had exclusive jurisdiction over the allegations in the improper practice petition.

6 The Supreme Court’s decision found that, at the time the Article 78 petition was filed, neither PERB nor this Board had made a final determination that was reviewable regarding jurisdiction. Additionally, the Court rejected the Union’s allegation that PBA v. City of New York mandated that PERB had jurisdiction over the dispute. See Matter of Patrolmen’s Benevolent Association of the City of New York, Inc. v. New York State Public Relations Bd., et al., Index No. 904303/2018 (Sup. Ct. Albany Co. Oct. 10, 2018) (Ferreira, J.).

7 The panel also includes one member designated by the City and one member designated by the Union.

12 OCB2d 21 (BCB 2019) 9 arbitration panel, and that the City has waived its right to the relief it seeks by failing to file exceptions to PERB’s declaration that the parties are at impasse. Jurisdiction The Union contends that the Board lacks jurisdiction over the petition because the claims concern post-impasse conduct that occurred throughout the course of a mediation ordered and conducted by PERB, and that this conduct is therefore “inextricably intertwined with PERB’s exclusive jurisdiction over the impasse resolution process . . . .” (Motion at 3) In support of this argument, it points to the Court’s holding in PBA v. City of New York and the legislative history of the 1998 Taylor Law amendment, which transferred jurisdiction over police officer impasse arbitrations from the Board to PERB. The Union claims that the Court’s holding in PBA v. City of New York “relates to any post-impasse charge that raises issues ‘necessary for PERB to exercise its exclusive jurisdiction to resolve impasses.’” (Motion at 13 (citing PBA v. City of New York, 97 N.Y.2d 378, at 390)) Here, PERB has already declared an impasse, and the instant petition directly challenges this determination since the City has argued that “a finding that the PBA has failed to negotiate in good faith as alleged . . . would preclude the existence of an impasse . . . .” (Motion at 14 (citing Pet., Ex. 23 at 2)) Consequently, the Union argues that the issues raised by the petition are fundamental to PERB’s exclusive jurisdiction to declare an impasse and, therefore, cannot be addressed by the Board. Furthermore, for this Board to determine whether the Union bargained in good faith, it would first need to determine whether the City’s proposals to modify health benefits relate to mandatory subjects of bargaining. However, this issue is currently before PERB in a Petition for a Declaratory Ruling.

12 OCB2d 21 (BCB 2019) 10 The Union also claims that the Board’s exercise of jurisdiction over the petition would undermine the legislative intent of removing impasse jurisdiction from the Board to PERB. The Union argues that should the Board determine whether and to what extent the Union is bound by City negotiations with the MLC over health benefits, its decision would encroach upon the interest arbitration panel’s exclusive jurisdiction to determine the terms and conditions of employment for police officers for the successor contract period. Moreover, the Union contends that the Legislature did not intend to have the Board resolve a dispute “arising out of a PERB mediation before a PERB mediator after PERB has declared an impasse.” (Motion at 16) The Union argues that PERB should decide the import of the events that took place during a PERB mediation, not this Board. Timeliness The Union asserts that the City’s petition is untimely because it was filed more than four months after the City knew or should have known that the Union allegedly failed to bargain in good faith. According to the Union, the City had notice of the conduct that it claims constitutes bad faith bargaining on August 14, 2017, when the Union notified it that it “categorically reject[ed]” the City’s proposal concerning health benefits. (Motion at 9 (citing Pet., Ex. 13)) The Union claims that this letter “was an unequivocal statement to the City that the PBA rejected the premise that it was required to accept cuts to health benefits to fund general wage increases that the City might offer.” (Rep. Memo at 8) Regardless of whether health benefits were to be negotiated with the MLC or the Union directly, the Union asserts that it consistently maintained this position. Alternatively, assuming arguendo that the August 14 letter did not put the City on notice of the alleged bad faith conduct, the Union argues that the statute of limitations would have begun

12 OCB2d 21 (BCB 2019) 11 to run no later than November 21, 2017, when PERB appointed a mediator to assist the parties. The Union contends that this appointment of a mediator meant that PERB had declared an impasse and that this event created the City’s “injury” since the City claims that impasse was not warranted. 8 (Rep. Memo at 9) The Union rejects the City’s claim that the statute of limitations did not begin to run until March 1, 2018, when the Union refused to negotiate over the City’s final health benefits proposal. The Union argues that the cases cited by the City in support of this proposition are not applicable because they involved situations in which a party refused to negotiate over a proposal it believed was a non-mandatory subject of bargaining or refused to negotiate entirely because it contended that its counter-party was not the authorized bargaining agent for the employees, neither of which is the case here. Likewise, the Union contends that the alleged bad faith conduct is not a continuing violation. The City’s repeated proposals to cut Union members’ health benefits after the Union had already considered and rejected any reduction in health benefits does not toll the limitations period. Mootness The Union argues that the Board has previously stated that once PERB has granted a party’s petition for interest arbitration and appointed an arbitration panel, a pending bad faith bargaining claim must be dismissed as moot. (Motion at 3 (citing PBA, 73 OCB 21 (BCB 2004) (“PBA”)) The Union argues that this case is similar to PBA, since both involved claims that the Union engaged in bad faith bargaining by filing for impasse when none existed and “before the parties

8 The Union relies upon CSL § 209.4(a), which states that PERB may appoint a mediator only if it “determines that an impasse exists in collective negotiations between [an] employee organization and a public employer.” (Rep. Memo at 11 (quoting CSL § 209.4(a)) (internal quotation marks omitted) (emphasis added)

12 OCB2d 21 (BCB 2019) 12 had engaged in meaningful bargaining” over health benefits. (Motion at 4 (quoting PBA, 73 OCB 21, at 5)) The Union also argues that both cases involved a situation in which PERB declared the parties to be at impasse after the filing of the improper practice petition. 9 Therefore, the Union contends, the Board lacks authority to order the relief sought by the City, including an order sending the parties back to the bargaining table. Such a remedy would be “wholly inconsistent with, and rendered irrelevant by, PERB’s determination of an impasse.” (Motion at 7 (quoting PBA, 73 OCB 21, at 6)) Moreover, the Union contends that the fact that the City requested other remedies, such as a posting of a notice, does not save its claim since the same relief was requested in PBA and the petition was nevertheless declared moot. The Union asserts that, contrary to the City’s arguments, it is irrelevant that the petition here was filed before the PERB mediation and not after, as in PBA, since the outcome of that case did not turn on such timing. Rather, the Board’s holding in that case was clear that PERB’s intervening declaration of impasse rendered the petition moot. Furthermore, the Union contends that the City’s assertion, that rendering this petition moot will incentivize parties to refuse to bargain until impasse is declared, is “misguided.” According to the Union, applying the Board’s holding in PBA “will simply encourage parties, such as the City, to raise their allegations about allegedly improperly declared impasse caused by an alleged failure to bargain in good faith at an appropriate time and in an appropriate forum in the context of a challenge to impasse procedures.” (Motion at 6)

9 The Union argues that the case cited by the City, Uniformed Sanitationmen’s Assn, 35 OCB 9 (BCB 1985) (“USA”), cannot “override” the Board’s subsequent decision in PBA. (Rep. Memo at 7) Further, it asserts that the case is distinguishable because it involved the Board’s decision regarding impasse, not PERB’s, and the Board can order the relief sought here in cases that impact its own determinations.

12 OCB2d 21 (BCB 2019) 13 Additionally, the Union argues that the doctrine of issue preclusion should apply since this case involves the same parties and the same issue as in PBA. As such, the Union contends that the City is barred from re-litigating the effect of PERB’s declaration of impasse on this improper practice proceeding. Waiver Finally, the Union argues that the City has waived its right to the relief it seeks by failing to object to PERB’s declaration of an impasse and appointment of a mediator when the City had that opportunity. Specifically, the Union contends that the City could have filed exceptions to the November 2017 appointment of a mediator but instead only opposed the Union’s request in a letter, dated October 27, 2017, which did not raise any alleged failure by the Union to bargain in good faith over health benefits. Additionally, the City actively participated in the selection of the interest arbitration panel by designating its partial member and participating in the process to select a neutral arbitrator. Consequently, the Union argues that “having failed to seek relief before PERB, the City should not be permitted to make an end run around the PERB statute of limitations by seeking the same relief” in the instant petition. (Motion at 11-12) City’s Position Jurisdiction The City asserts that the Court’s holding in PBA v. City of New York did not divest the Board of jurisdiction over post-impasse improper practice charges. In that case, the Court decided whether the Board or PERB has jurisdiction over scope of bargaining claims after parties have entered PERB’s formal impasse procedures. The Court’s conclusion that PERB has jurisdiction over post-impasse scope of bargaining claims did not disrupt the Board’s established jurisdiction over improper practice charges.