What Impact on Municipal Labor and Employment Issues? New York\'s Government Reorganization and Citizen Empowerment Act

September 4, 2009

By: Craig L. Olivo

Earlier this summer Governor Paterson signed the “New York Government Reorganization and Citizen Empowerment Act” (Chapter 74, Laws of 2009). This sweeping piece of reform legislation was championed by Attorney General Cuomo as a way to improve local government efficiency and provide property tax relief to an already burdened citizenry. The Act, which will become effective on March 21, 2010 intends to make it easier to consolidate various governmental bodies such as Towns, Villages, and Special Districts. What remains to be seen, however, is whether the Act’s two new methods for consolidation/dissolution will truly benefit taxpayers and save money, or simply create a costly process counterproductive to the Act’s admirable goals. Equally uncertain is the Act’s impact on municipal labor and employment successorship issues arising out of consolidation or dissolution.

The first new method for consolidation/dissolution is more conventional than the second and involves: (1) the governing bodies developing and then publishing a plan; (2) a period of public input and public hearings; and (3) a vote by the effected governing bodies. In the case of towns and villages, an affirmative vote in a public referendum in the affected municipalities is required; an affirmative vote of the board of special districts effectuates the plan as to those entities.

The second method creates a citizen initiative process. Under this method, a petition must be filed bearing the signatures of a prescribed number of voters seeking dissolution or consolidation. A successful petition leads to a referendum on the general question of consolidation/dissolution. If the referendum passes, the governing bodies must prepare and adopt an implementing plan. This plan may be subject to a permissive referendum in certain limited circumstances. There is also a citizen cause of action established to compel the governing boards to comply with the citizens’ will as expressed by the referendum results.

Many critics --and even some objective observers-- believe the second method provides great potential for mischief, creates serious difficulties in formulating a workable plan, and will generate inevitably costly litigation. These consequences may result because the community will vote on the general concept of consolidation or dissolution without the benefit of a feasibility study or plan. If the referendum passes, the involved governing bodies must then create a plan regardless of whether the required consolidation or dissolution is workable or achievable. Because the requisite study generally costs tens of thousands of dollars and takes months to complete, it is questionable whether any savings will really be achieved. These kinds of concerns are already the subject of numerous conversations among municipal officials. In fact, the New York Conference of Mayors voiced its strong opposition to the Act during the public comment period for just these reasons.

From a labor and employment perspective, the Act also creates great uncertainty. Neither specifically addressed in the Act nor mentioned by its champions are the significant labor and employment successorship issues created by the consolidation and/or dissolution of public entities. For example, left uncertain are, among other things:

• Issues involving the civil service rights of the employees who are transferred and/or have their positions abolished.
• Issues involving the status of existing collective bargaining agreements covering the effected employees.
• Issues involving which, if any, unions will continue to represent the employees of the consolidated entity.
• Issues involving the Taylor Law duty, if any, to negotiate over the impact of the decision to consolidate and/or dissolve.

Unfortunately, there is very little case law from the courts or the Public Employment Relations Board (“PERB”) from which to draw guidance. The few decisions that do exist frequently look to federal law for the analytical framework to determine the types of successorship issues noted above. However, PERB’s present position on successorship issues, which draws its foundation from an opinion of counsel rendered in 1985 (Opinion of Counsel, 18 PERB ¶ 5002 (1985)), provides that the automatic application of private sector successorship doctrine is not appropriate, thereby leaving many of these questions unresolved. Accordingly, navigating the sea of these complex labor issues will be difficult, and is likely to result in hefty litigation costs which must be borne by the participating entities.

In addition to consulting with labor counsel to address the labor and employment issues mentioned above, those interested in learning more about the Act and its intended purpose can visit a new interactive website created by the Office of the Attorney General. The website can be found at www.reformnygov.com.