NYSUT-Only Early Retirement Incentive Upheld by Appellate Division
January 26, 2011
We have previously posted on the early retirement incentive for employees represented by collective bargaining units affiliated with the New York State United Teachers (“NYSUT”) who belong to either the New York State Employee Retirement System or the New York State Teachers Retirement System (“TRS”), are at least 55 years of age, and have attained at least 25 years of creditable service (“55/25 Legislation”). The 55/25 legislation allows eligible employees to retire without the reduction in retirement benefits that would normally apply to retirement system members who are on Tiers 2, 3, or 4 who do not have 30 years of service. The legislation recently survived another court challenge to its constitutionality.
Two days after the 55/25 Legislation was signed into law, the Empire State Supervisors and Administrators Association (“ESSAA”), a union that represents primarily administrators and supervisors in public school districts, and one of its local unions, challenged the 55/25 Legislation in court. The ESSAA contended that the statute violates its members’ rights to equal protection and freedom of association under the United States and New York State Constitutions, by limiting eligibility only to individuals who are employed in positions represented by collective bargaining units affiliated with NYSUT.
The trial court found the legislation constitutional, and the ESSAA appealed to the Appellate Division, Third Department. On January 20, 2011, the Appellate Division unanimously affirmed the trial court’s decision. The Appellate Division held that a rational basis exists for distinguishing between employees in NYSUT-affiliated bargaining units and employees not in NYSUT-affiliated bargaining units. Specifically, the Appellate Division accepted the argument, advanced by NYSUT and the State, that replacing administrators and supervisors (the vast majority of the employees in ESSAA bargaining units) is not as financially advantageous as replacing older classroom teachers. Supervisors and administrators are usually replaced by individuals closer in seniority (and salary) to the incumbents, while older classroom teachers are usually replaced by newer teachers who can be paid significantly less than the incumbents.
For those teachers who retired under the 55/25 Legislation, TRS has indicated that payment of the unreduced retirement benefit is subject to the final outcome of any appellate process. Accordingly, those teachers who retired under the 55/25 Legislation must wait and see whether the Appellate Division’s decision is appealed, and if so, whether the Court of Appeals accepts the appeal and affirms the Appellate Division. The ESSAA has 30 days from the date of the Appellate Division’s decision to decide if it will apply for permission to appeal to the New York Court of Appeals.
