One would think that an elected official would be free, if not obligated, to express his/her opinions on a matter of public interest without fear of financial repercussion.  Sometimes, though, as the decision in Matter of Lancaster v. Incorporated Village of Freeport teaches us, the exercise of such freedom may come with a cost.

The case arose when a municipality’s statutory obligation to defend and indemnify its elected and appointed officials clashed with the desire of a minority of those officials to voice opinions critical of a settlement made on their behalf and on behalf of the municipality that they represented.

The municipality’s duty, which arises under the Public Officers Law, is analogous to an insurance company’s contractual obligation to defend its insured.  The duty is conditioned upon an official’s cooperation in the defense of the claim, and a failure to cooperate could result in a disclaimer of coverage.  Like the insurance company, the municipality seeking to disclaim coverage would have to demonstrate that it:  (1) acted diligently in seeking to bring about the official’s cooperation; (2) its efforts were reasonably calculated to bring about the official’s cooperation; and (3) the attitude of the official, after cooperation was sought, was one of willful and avowed obstruction.

That brings us to Lancaster, where a majority of the Village Board wished to resolve a costly and controversial claim, but a potentially vocal minority did not.  Not surprisingly, the approval vote was split along political lines.  When it came time to execute the stipulation of settlement, however, that voting minority chafed at the requirement that they consent to a non-disparagement clause which served to prevent public criticism of the resolution.  Their refusal jeopardized the entire settlement.

The majority of the Board responded by voting to terminate the dissenting officials’ defense and indemnification.  How does that action hold up against existing precedent?

In Bond v. Floyd, 385 U.S. 116 (1966), the United States Supreme Court explained that:

Legislators have an obligation to take positions on controversial political questions so that their constituents can be fully informed by them, and be better able to assess their qualifications for office; also so they may be represented in governmental debates by the person they have elected to represent them.  We therefore hold that the disqualification of Bond from membership in the Georgia House because of his statements violated Bond’s right of free expression under the First Amendment.

The Supreme Court also recently made clear in Nevada Commission on Ethics v. Carrigan, 131 S.Ct. 2343 (2011), however, that an elected official’s First Amendment rights are not unfettered.  At issue there was an ethics law requiring public officials to recuse themselves from voting on or advocating for the passage or failure of a matter in which he/she had a conflict.  The Court gave the law its blessing.  The act of voting was not protected speech, and the advocacy preclusion was deemed a reasonable time, place, and manner restriction.

So how much protection did the First Amendment provide to the dissenting officials in Lancaster?  Not much.  The Village resolution was upheld, both at the trial court level and on appeal.

The lower court upheld the resolution after employing a balancing test.  It found that consent to a non-disparagement clause was a reasonable concession when considered against the “benefits achieved by the petitioners from the settlement.”

The Second Department made no reference to a balancing test or to any risk-benefit analysis.  It simply held that the refusal to execute the non-disparagement clause constituted willful and avowed obstruction and justified the disclaimer, and that the clause, in and of itself, did not constitute a prior restraint on speech.

Lancaster was limited to the circumstances of the case, thus leaving open the question as to whether a non-disparagement clause within the context of a municipal settlement can ever constitute an unlawful prior restraint of an elected official's speech.  However, Lancaster serves as a cautionary flag for elected officials, who if confronted with such a clause (for example, in an agreement to settle an employment discrimination case or an employee discipline case), must seriously consider if rejecting it to voice a dissenting opinion is worth the risk of personal financial exposure.

In a recent decision that will likely have positive implications for similarly-situated public employers across New York State, the Appellate Division for the Second Department reversed a lower court ruling and held that the City of Yonkers' refusal to reimburse new employees for their statutorily-required Tier V retirement plan contributions was not arbitrable.  The appellate court also issued a permanent stay of arbitration.  The City of Yonkers ("City") was represented by Bond, Schoeneck & King in the litigation.

The dispute arose in connection with the 2009 enactment of Article 22 of New York's Retirement and Social Security Law ("Tier V").  Among other changes, Tier V provides that those who join the Police and Fire Retirement System ("PFRS") on or after January 10, 2010 must "contribute 3% of their salary towards the . . . retirement [plan] in which they are enrolled."  Prior to the enactment of Tier V, the City and the Yonkers Fire Fighters ("Union") were parties to a collective bargaining agreement which expired on June 30, 2009.  Like many other firefighter contracts in the state, the contract required the City to provide a "non-contributory" retirement plan to its firefighters.

In late 2009, the City hired several firefighters who, because of a "gap" in the law, had the option of joining the PFRS as either members of Tier III or Tier V -- both contributory (3%) tiers.  In an attempt to apply the terms of the expired contract to relieve its Tier V members of the statutorily-required 3% member contribution, the Union filed a grievance and sought arbitration based upon the contractual obligation to provide a non-contributory requirement plan.  The Union relied on an exception in the law creating Tier V, which provides that members of the PFRS need not join the contributory Tier V if there is an alternative retirement plan available to them under a collective bargaining agreement that "is in effect on the effective date" of Tier V.  The appellate court found that the Union's reliance on this exception was misguided, because the collective bargaining agreement at issue had expired on June 30, 2009 and, therefore, was not "in effect" as of January 10, 2010, the effective date of Tier V.

The Union also asserted in its grievance that even if their new members were not eligible to join the non-contributory plan, the City was nevertheless obligated under the collective bargaining agreement to pay the new members' 3% contributions.  The appellate court found that this claim was not arbitrable because Civil Service Law Section 201(4) and Retirement and Social Security Law Section 470 prohibit the negotiation of changes to benefits or fund payments related to a public retirement system.

As of the date of this blog post, the New York Court of Appeals is considering a motion filed by the Union for leave to appeal the decision.  Regardless of whether our state's highest court chooses to hear the case or not, this issue is sure to surface again.  Governor Cuomo's recent deal with the Legislature to establish a Tier VI in the various state retirement systems includes, among other things, a sliding-scale of increased employee contributions based upon annual salary (beginning at 3% and topping out at 6%).  Thus, in some ways, the already high -- and very costly -- stakes have doubled.

New York's highest court recently ruled that a provision in the collective bargaining agreement between the Village of Johnson City and its firefighters' union which states that the Village will not "lay-off any member of the bargaining unit during the term of this contract" is not explicit enough to prevent the Village from abolishing the positions of six firefighters and terminating their employment.

Under New York law, a "job security" provision in a public sector collective bargaining agreement violates public policy and is unenforceable unless, among other requirements, it explicitly prohibits the public employer from abolishing positions even due to budgetary constraints and the collective bargaining agreement that contains the provision is reasonable in duration.  The public policy rationale for this stringent requirement is that public employers should not be hamstrung in their efforts to eliminate positions for economic reasons unless they have clearly promised to maintain employment levels for some reasonable period of time.

In the Village of Johnson City case, the Court of Appeals determined that the provision in the collective bargaining agreement prohibiting layoffs did not explicitly prohibit the Village from abolishing firefighter positions out of budgetary necessity.  Accordingly, the Court of Appeals upheld the layoffs of the six firefighters and denied the union's application to compel the Village to submit to the arbitration process.

As all public employers are aware, Section 72 of the New York Civil Service Law ("Section 72") provides both the procedure for placing a public employee on an involuntary leave when he or she is deemed unfit to perform his or her job due to illness or injury, and certain procedural protections to employees who are placed on such leave.  Specifically, any public employee who is placed on an involuntary leave is entitled to written notice of the reason for the proposed leave, the proposed date on which it is to begin, and his or her rights under the statute.  In addition, any such employee is entitled to a hearing concerning the employer's decision to place him or her on leave.

Historically, the protections of Section 72 have been applied only to employees who were placed on an involuntary leave from work.  However, a recent decision by the New York Court of Appeals extended those protections to public employees who are prevented by their employers from returning to work from a voluntary medical leave.

In Matter of Sheeran v. New York Dep't of Transp., 2011 N.Y. Slip Op. 8229 (Nov. 17, 2011), two state employees, who had been deemed unfit for duty and placed on involuntary leaves after attempting to return from voluntary medical leaves, challenged their placement on leave without a hearing under Section 72.  Their respective employers argued that 4 N.Y.C.R.R. Section 21.3, a Department of Civil Service regulation concerning sick leave, and the applicable collective bargaining agreements applied to these circumstances rather than Section 72, because the employees had been on voluntary medical leaves.  The Court of Appeals reversed the Appellate Division, Third Department's dismissal of the petitions, holding that there was no basis in Section 72 for making a distinction between an "employee who has been placed on involuntary leave from a voluntary one and one forced to take an involuntary leave."  In addition, the Court of Appeals noted that a different interpretation of Section 72 "would discourage employees from taking voluntary leave, since they would have greater rights if they remained on the job and waited to be involuntarily removed -- a result the Legislature surely did not intend."

As a result of this decision, public employers must be prepared to follow the procedural requirements of Section 72 any time they deem an employee unfit for duty, regardless of whether the employee was placed on an involuntary leave or was prevented from returning from a voluntary leave.

In a little-recognized effort to generate “mandate relief” associated with its recently-enacted “Tax Cap,” the New York Legislature amended General Municipal Law (“GML”) § 72-c to enable more municipalities to recover expenses related to the initial training of their police and peace officers in the event that such officers decide to transfer to another municipality within their first three years of service.

Historically, GML § 72-c permitted only municipalities with populations of “ten thousand or less” to seek reimbursement for expenses incurred in the training of members of its police force who commenced employment with another municipality’s police force within three years of graduating from the police training program.  Because police training is funded by municipal tax dollars, GML § 72-c originally served to protect small municipalities against the debilitating financial losses associated with the departure of their newly-hired and trained police officers for larger, more lucrative and/or more desirable jobs. Without the protections of GML § 72-c, these small municipalities would never see the benefit of the costly training they had provided to the departing officers.

In light of the ongoing financial hardships currently faced by all municipalities across New York, effective June 24, 2011, the Legislature eliminated the requirement from GML § 72-c that the municipality which provided the police training “hav[e] a population of ten thousand or less” to be eligible to seek reimbursement.  According to the legislation, if a police or peace officer commences employment with another police department within three years of graduating from police training, any municipality, regardless of size, can recover training expenses from the officer’s new employer.  The amount that a municipality may recover includes: “… salary, tuition, enrollment fees, books, and the cost of transportation to and from training school ….” The formula for calculating the recoverable amount reimburses the prior municipal employer on a pro rata basis. Simply put, the new municipal employer must pay the officer’s prior municipal employer the per diem cost of training expenses for each day from the officer’s last day of service with the original employer until he/she would have worked for three years.

GML § 72-c, as amended, will provide many municipalities – especially those with large police departments that have historically served as “feeder” organizations for other police departments around the State – with a new means of recovering some of the lost costs it once incurred. In these turbulent economic times, these recovered costs could help financially-strapped municipal budgets. Whether it actually provides significant “mandate relief” for municipalities, or it simply results in new forms of litigation, is yet to be determined.

The major concessions agreed to by CSEA in negotiations with New York State have been well publicized. The details of the 5-year deal include a wage freeze for the first three years, 2% increases in each of the last two years and immediate increases in employee contributions toward the cost of health insurance. The deal, which covers 66,000 State employees, will save New York $73 million in the first year alone. In turn, CSEA obtained a no-layoff pledge from Governor Cuomo for the first two years of the contract. Governor Cuomo had been threatening to layoff nearly 10,000 State employees if a contract could not be reached. Will other unions follow CSEA’s lead and accept this kind of deal?

Rick Karlin has an interesting article in the Albany Times-Union addressing this issue.  According to the article, when asked about the odds of such a deal repeating itself at the local level, a CSEA spokesperson responded “If history is any precedent, zero.” But other reasonable unions may be getting the picture. The Syracuse Post-Standard reports that City of Syracuse firefighters ratified a two-year deal that includes two zero’s, along with increased contributions by the firefighters toward health insurance. In the most recent interest arbitration decision in New York, Oswego firefighters were awarded a 0% wage increase in the first year and 2% in the second year.

With a local, public sector workforce in New York that is five times the size of the State workforce, local union contracts that contain at least some of the State CSEA concessions will result in significant cost-savings for local governments. In light of the impending 2% property tax cap, this could be critically important to the fiscal health of local governments.
 

On June 30, 2011, Governor Cuomo signed into law one of the most sweeping and restrictive property tax caps in the country. It applies to “taxes imposed on real property” by all local governmental entities (counties, cities, towns, villages and special districts) and by public school districts. The law will take effect in the 2012 fiscal year for local governments and in the 2012-13 fiscal year for school districts, and is currently scheduled to expire in June of 2016. However, for what appear to be purely political reasons, it will remain in effect beyond its scheduled expiration date as long as the “temporary” New York City rent control and regulation laws remain in place.

Under the new law, year to year growth in property tax levy increases will be capped at 2% or at the rate of inflation, whichever is less. However, the law provides that the tax levy cap will not apply to taxes necessary to:

1. support voter-approved school capital expenditures;
2. cover the expenses of an approved legal settlement of a tort action where such costs exceed 5% of the prior-year’s tax levy;
3. cover the costs of responsibilities shifted to the taxing jurisdiction from another local government;
4. cover the costs associated with pension contributions where there was growth in the annual required pension contribution exceeding two percentage points of payroll; or
5. cover the cost of added taxes generated by physical changes to assessed property values due to new construction.

If a taxing entity is fortunate enough not to utilize the entire available tax levy capacity in a given fiscal year, the law provides that unused tax levy capacity of up to 1.5% may be “carried over” to the following year. For example, if the cap is 2% for two consecutive years and a local government increases its tax levy by just 1.0% in the first year, the local government could apply a carryover of 1.0% and thereby permissibly increase its tax levy up to a maximum of 3.0% in the following year.

Although the law caps the available tax levy increase from year to year, local governments are authorized to exceed the cap in a given fiscal year if at least 60% of the members of the governing body (e.g., County Legislature, City Council, Town Board, etc.) approve such an increase. School districts are allowed to exceed the tax levy cap if the budget is approved by 60% or more of those voting on the budget.
 

Designated Freedom of Information Law ("FOIL") officers in governmental agencies, such as school districts and municipalities, often have extensive experience responding to FOIL requests. Knowing that FOIL strongly favors the disclosure of agency records, they may overlook statutory exemptions to disclosure. But, a recent case decided by the New York State Court of Appeals, NYSUT v. Brighter Choice Charter School, shows that the exemptions are alive and well -- particularly when a union seeks personal information about unrepresented employees.

FOIL (Public Officers Law §87 et seq.) was created to ensure the public's right to agency records and imposes a broad standard of open disclosure. FOIL's goal is to help the public make informed choices with respect to the direction and scope of governmental activities. It is this purpose that guides the general rule that all records of an agency are presumptively available for public inspection and copying. Nonetheless, several statutory exemptions are set forth in Public Officers Law §87(2) that permit a responding agency to withhold requested records. To ensure the public has maximum access to government records, these statutory exemptions are narrowly interpreted and the agency invoking the exemption bears the burden of demonstrating that requested material fits squarely within the ambit of the exemption.

In NYSUT v. Brighter Choice, a group of charter schools objected to disclosure of certain information about their employees requested by New York State United Teachers ("NYSUT"). In 2007, NYSUT submitted FOIL requests to Brighter Choice and five other Charter Schools in the Albany area. The request sought extensive information about the teachers and instructors, including their names and home addresses. The Charter Schools provided title and salary information, but objected to the request for the names and home addresses of its employees. NYSUT eventually dropped its request for home addresses. This left only the Charter School's denial of the union's request for the full names of the employees in dispute.
 

The Charter Schools objected to disclosing employees' names on the ground that the record, if disclosed, would constitute an unwarranted invasion of personal privacy. See Public Officers Law §87(2)(b). FOIL provides a list of eight (8) categories of exemptions that are per se unwarranted invasions of personal privacy. One disclosure that constitutes a per se unwarranted invasion of personal privacy is a list of names and addresses, if the list would be used for solicitation or fund-raising purposes.

Attorneys for the Charter Schools argued that this exemption to disclosure had been properly invoked, and that it permitted the Charter Schools to consider NYSUT's organizational purpose and the nature and format of the information NYSUT sought. The Charter Schools argued they could reasonably infer that NYSUT sought the names of employees for the purpose of soliciting new members and increasing the size of its organization.

In a 4-3 decision, the Court of Appeals agreed, holding: “It appears ... that NYSUT seeks the teachers' names as a convenient mechanism for contacting prospective members. Although NYSUT certainly possesses a right to seek dues-paying members, it may not rely on FOIL to achieve that end.”

In upholding the application of the exemption, the Court of Appeals stressed that its decision did little to undercut the purposes of FOIL. The Court found that disclosure of employees' names to NYSUT: “would do nothing to further the policies of FOIL, which are to assist the public in formulating intelligent, informed choices with respect to both the direction and scope of governmental activities. If anything, it is precisely because no governmental purpose is served by public disclosure of this information that section 87(2)(b)'s privacy exemption falls squarely within FOIL's statutory scheme.”

Moving Forward

If a school district or municipality receives a FOIL request seeking a list of the names or home addresses of its employees, the solicitation or fund-raising purposes exemption should be considered. If the FOIL officer can infer from the organizational purpose of the requesting party that the information is being sought to solicit the employees, the names and home addresses may be withheld. Not all requests from the same entity must be treated similarly. For example, disclosure of names and addresses should be made to a newspaper editorial department that submits a FOIL request in preparation for an opinion piece. In contrast, an agency may withhold a list of names and addresses from a newspaper circulation department that submits a FOIL request, as such could be reasonably inferred to have been made for solicitation purposes. The NYSUT v. Brighter Choice decision establishes that an agency that is aware that a FOIL request has been submitted for solicitation or fund-raising purposes is on firm ground should it choose to withhold a list of names or home addresses.
 

On December 21, 2010, New Jersey Governor Chris Christie signed legislation establishing a 2% cap on the aggregate increase in base salary per year that can be provided in an interest arbitration award. The New Jersey law may serve as a model for a similar effort in New York. Since he has taken office, New York Governor Andrew Cuomo has vowed to introduce changes to reduce the cost of State and Local government. He has stated that “New York is at a crossroads, and we must seize this opportunity, make hard choices and set our state on a new path toward prosperity…We simply cannot afford to keep spending at our current rate. Just like New York's families and businesses have had to do, New York State must face economic reality.” In order to achieve his cost saving measures, Governor Cuomo has introduced legislation calling for a 2% cap on property taxes. In addition, he has established by Executive Order a Mandate Relief Redesign Team as well as theSpending And Government Efficiency (Sage) Commission which will conduct a rigorous and comprehensive review of mandates imposed on local taxing districts and government spending “with the goal of saving taxpayer money, increasing accountability and improving the delivery of government services.”

With Governor Cuomo calling for such wide-reaching changes, and groups such as the New York Conference of Mayors (NYCOM) calling for the Governor to implement changes to Interest Arbitration (e.g., redefining “ability to pay”, prohibiting the consideration of non-economic items, limiting the number of times that a union can consecutively go to interest arbitration), it is possible that legislation similar to that signed by Governor Christie in New Jersey will be introduced in New York. In fact, former Gubernatorial candidate and Suffolk County Executive Steve Levy has already publicly embraced New Jersey’s 2% interest arbitration cap, and has indicated that he plans to call on the New York State Legislature to enact similar legislation. According to Mr. Levy, such a cap would, “save the county of Suffolk between $7 million and $10 million per year for the police force alone, considering the police union received a 3.5 percent increase in the most recent round of mandatory arbitration.”
 

What Does the New Jersey Legislation Provide?

The 2% cap – which mirrors New Jersey’s 2% cap on property tax increases – provides that an arbitrator shall not render an award which, on an annual basis, increases base salary items by more than 2% of the aggregate amount expended by the public employer on base salary items. The legislation provides that the aggregate monetary value of the interest arbitration award does not have to be distributed in equal annual percentages over the life of the agreement. Therefore, the monetary value of an award may exceed 2% in an individual contract year, provided that the monetary value of the award in the other contract year(s) is adjusted so that the aggregate monetary value of the award over the term of the agreement does not exceed the maximum 2% increase.

As defined by the new legislation, “base salary” means “the salary provided pursuant to a salary guide or table and any amount provided pursuant to a salary increment, including any amount provided for longevity or length of service.” Also included in an employee’s “base salary”, and therefore subject to the 2% cap, are “any other item agreed to by the parties, or any other item that was included in the base salary as understood by the parties in the prior contract.” The legislation specifically excludes from “base salary non-salary economic issues such as pension, health and medical insurance costs.” Non-salary economic issues are defined by the legislation as any economic issue that is not included within the definition of base salary. The legislation also prohibits an arbitrator from awarding “base salary items and non-salary economic issues which were not included in the prior collective negotiations agreement.”

In addition to the 2% cap, the legislation makes several other changes to the overall interest arbitration process: capping the fees that an arbitrator can receive; randomizing the arbitrator selection procedure if the parties cannot agree to an arbitrator; requiring that arbitrators receive yearly ethics training; allowing a party to file a petition with the Public Employment Relations Commission (PERC) alleging that the other side is not negotiating in good faith; and vesting PERC with the ability to assess the non-prevailing party the cost of all legal and administrative costs associated with the filing and resolution of the petition.

The entirety of the legislation, not just the 2% base salary cap, sunsets after 39 months. The legislation also establishes an eight-member task force designed to study the effect and impact of the changes made by the legislation. This task force will presumably make a recommendation as to whether the changes to the interest arbitration process should be continued once the legislation sunsets.
 

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.
 

Earlier this year, Governor David Paterson signed into law Chapter 103 of the Laws of 2010 which, among other things, drastically alters the way classroom teachers and building principals are evaluated and the procedures for disciplining tenured teachers. These changes will take effect over the course of the next several years. Many key provisions were effective on July 1, 2010. The changes have significant implications for collective bargaining between school districts and the unions representing teachers and principals.

The impetus for these far reaching changes was New York State’s application for Phase II of the Federal Government’s Race to the Top Program (“RTT”). RTT was created as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”), and authorizes the United States Department of Education to award up to $4.3 billion in grant money to encourage and reward States that create conditions for education innovation and reform. New York was one of several states to win Phase II of RTT. As a result, New York will receive approximately $700 million to help implement changes RTT was designed to foster, including how the performance of teachers and principals is measured.
 

The most widely publicized aspect of the new legislation is Section 3012 c of the Education Law (“3012-c”), which contains the new comprehensive Annual Professional Performance Review (“APPR”) system for teachers and principals. For the 2011-2012 school year, the new APPR system applies only to evaluations of teachers in the common branch subjects or English Language Arts, and Math in grades four through eight, as well as building principals. The new APPR system will apply to all teachers and principals effective in the 2012-2013 school year. The APPR system requires teacher and principal evaluations to result in a single composite score made up of the following components.

• Forty percent of the composite score must be based on student achievement measures; with 20 percent based on student improvement on state exams (or other comparable local exams), and the other 20 percent based on local measures of student achievement which must be established through the collective bargaining process.
• The remaining 60 percent of the APPR score must be based on evidence of overall teacher effectiveness, as determined through locally developed measures (established through the collective bargaining process), and in accordance with standards determined by the Commissioner of Education. As of the date of this post, those standards have not been promulgated.

The composite score must be a significant factor in employment decisions, including, but not limited to, promotion, retention, tenure, termination, and supplemental compensation. The APPR composite score will result in teachers and principals receiving a rating of either: (1) Highly Effective; (2) Effective; (3) Developing; or (4) Ineffective. In connection with this rating system, Districts are required to create Teacher Improvement Plans (“TIP”) and Principal Improvement Plans (“PIP”) for those teachers and principals who receive ratings of either Developing or Ineffective. Two consecutive annual ratings of “Ineffective,” will be deemed to establish a “pattern of ineffective teaching or performance” which may be a basis for just cause removal of a teacher or principal.

From a labor relations perspective, one of the more controversial aspects of 3012-c is the requirement of a locally developed (negotiated) appeals process under which the teacher or principal has the right to challenge the substance of the evaluation, adherence to standards and procedures for reviews, and implementation of a TIP/PIP. In fact, evaluations conducted pursuant to 3012-c cannot even be introduced during a disciplinary proceeding under Section 3020-a of the Education Law prior the expiration of the appeals process.

The legislation also establishes an expedited Section 3020-a disciplinary process for teachers and principals charged with demonstrating a “pattern of ineffective teaching or performance.” The expedited process requires completion of the hearing before a single hearing officer within sixty (60) days of the pre-hearing conference. When a tenured teacher is charged with a “pattern of ineffective teaching or performance” the District must establish that it has negotiated and agreed to a TIP/PIP applicable to that individual.

All collective bargaining agreements covering teachers and building principals entered into after July 1, 2010 must be consistent with 3012-c. Those provisions of collective bargaining agreements that were entered into prior to July 1, 2010 and conflict with 3012-c remain in effect until a successor agreement is entered into, at which time the parties must negotiate over the issues implicated by 3012-c.
 

            On July 23, 2010, the Supreme Court of Albany County upheld the constitutionality of Chapter 45 of the Laws of 2010. Chapter 45, which was signed into law by Governor David Paterson on April 14, 2010, creates an early retirement incentive for employees in positions 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 (“ERS”) 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, and who do not have 30 years of service. A more complete description of the 55/25 Legislation is set forth here.

            Two days after the 55/25 Legislation was signed into law, on April 16, 2010, the Empire State Supervisors and Administrators Association (“ESSAA”), a union that represents primarily administrators and supervisors in public school districts, and the Baldwin Supervisors Association (“BSA”), a local affiliate of the ESSAA, initiated a court proceeding challenging the 55/25 Legislation. Specifically, the ESSAA and BSA alleged that the 55/25 Legislation violated the First and Fourteenth Amendments of the United States Constitution, as well as Article 1, Section 11 of the New York State Constitution, by limiting eligibility only to individuals who are employed in positions represented by collective bargaining units affiliated with NYSUT. The ESSAA and BSA argued that the 55/25 Legislation violated their rights to equal protection and freedom of association.

           

        In the July 23, 2010 decision, the Court rejected the challenge to the 55/25 Legislation, finding that it was not irrational or illogical of the Legislature to limit eligibility only to employees in positions represented by bargaining units affiliated with NYSUT. The Court accepted the argument of the State and NYSUT that “early retirement incentives in the public school context can be particularly effective when targeted at teachers (i.e. individuals who provide direct classroom instruction) because a high-salaried teacher who accepts an early retirement incentive will often be replaced by a new, entry-level teacher at a lower salary” while in contrast “an outgoing administrator will typically be replaced by an individual closer in rank and, therefore, comparable in salary.” According to the Court, as NYSUT represents virtually all of the classroom teachers and teaching assistants employed in public schools across New York State, it was rational for the Legislature to limit eligibility to employees in bargaining units affiliated with NYSUT because “NYSUT affiliated locals are a reasonable proxy for teachers.”

            The Court recognized the fact that there are four public school districts in which NYSUT does not represent teachers and related teaching titles. If the plaintiffs in this case had been teachers at one or more of those public school districts who would have been eligible for the incentive but for their union affiliation, it is not clear whether the outcome would have been the same. It is possible that eligible employees in the same type of position supposedly targeted by the 55/25 Legislation (classroom teachers) who were excluded from the incentive simply because they were not in NYSUT bargaining units might have had an easier time establishing that the NYSUT-only restriction was not rational. In that context, the Court could not have focused solely on the teacher vs. administrator distinction, and the argument that “NYSUT affiliated locals are a reasonable proxy for teachers” would likely be much less persuasive. However, because the plaintiffs in this case were unions that represented primarily administrators and supervisors, the Court did not reach the issue of whether it was rational to exclude the few eligible teachers who are not part of NYSUT bargaining units.

 

            Within several days of the Court’s decision upholding the 55/25 Legislation, the ESSAA and BSA filed a Notice of Appeal. Accordingly, the fate of the 55/25 Legislation has not yet been conclusively determined. TRS recently released a statement that it will continue to implement Chapter 45 as written, but that “the payment of the unreduced retirement benefit to eligible members who retired pursuant to Chapter 45 will be subject to the final outcome of any appellate process.”

 

If the appellate court ultimately finds Chapter 45 to be unconstitutional, it is possible that individuals who have retired under its provisions may have their pensions reduced to reflect the penalty for retiring prior to attaining 30 years of service. However, it is also possible that the appellate court could eliminate the NYSUT-only restriction on eligibility, which would cure the unconstitutionality of the 55/25 Legislation while at the same time not causing a reduction in the pensions of individuals who retired in reliance upon the 55/25 Legislation.