| Matter of Peters v Union-Endicott Cent. School Dist. |
| 2010 NY Slip Op 07647 [77 AD3d 1236] |
| October 28, 2010 |
| Appellate Division, Third Department |
| In the Matter of Joanne Peters,Respondent, v Union-Endicott Central School District et al., Appellants. (ProceedingNo. 1.) In the Matter of the Arbitration between Union-Endicott Central School District,Appellant, and Endicott Teachers' Association et al., Respondents. (Proceeding No.2.) |
—[*1] James R. Sander, Latham (Richard E. Casagrande of counsel), for respondents.
Stein, J. Appeal from an order of the Supreme Court (Lebous, J.), entered October 6, 2009 inBroome County, which, among other things, denied petitioner's application in proceeding No. 2pursuant to CPLR 7503 to permanently stay arbitration between the parties.[*2]
Respondent Endicott Teachers' Association (hereinafterETA)—on behalf of its member, Joanne Peters, a teacher employed by the Union-EndicottCentral School District (hereinafter the District)—filed a grievance and demand forarbitration as against the District based upon its refusal to process Peters' retirement applicationand to provide the bargained-for health benefits pursuant to the collective bargaining agreement(hereinafter CBA) between the District and the ETA. Before Peters submitted her retirementapplication, the District and local police authorities commenced an investigation into allegationsthat Peters was stealing school materials and property and selling such items on the Internet; shesubmitted her application during that investigation, but prior to her subsequent arrest and chargeof grand larceny in the fourth degree. Following her arrest, Peters was placed on suspension andthe District filed administrative disciplinary charges against her pursuant to Education Law§ 3020-a and delayed action on her retirement application.
In April 2008, a Hearing Officer found that Peters had severed her employment relationshipwith the District on July 1, 2007. As a result, the Hearing Officer concluded that the disciplinarycharges against Peters were moot and granted her motion to dismiss the charges.[FN1]Shortly thereafter, the District, relying on the Hearing Officer's determination, adopted aresolution to retroactively terminate Peters as of July 1, 2007. In June 2008, prior to ouraffirmance of Supreme Court's stay of arbitration with respect to petitioner's first grievance (Matter of Union-Endicott Cent. SchoolDist. [Endicott Teachers' Assn.], 59 AD3d 799 [2009]), the ETA and Peters filed asecond grievance challenging the District's April 2008 resolution and final determination denyingPeters' receipt of retiree health insurance benefits and demanded arbitration of such grievance. InAugust 2008, Peters commenced a combined CPLR article 78 proceeding and declaratoryjudgment action (proceeding No. 1) seeking, among other things, a declaration of her contractualrights to retiree health insurance benefits, and directing the provision thereof. The District thencommenced proceeding No. 2 seeking, among other things, to permanently stay arbitrationbetween the parties and, in response, the ETA and Peters cross-moved to compel arbitration.Supreme Court denied the District's application to stay arbitration of the second grievance andgranted the motion by the ETA and Peters to compel such arbitration. Consequently, SupremeCourt determined that it was unnecessary to reach the merits of proceeding No. 1.[FN2]The District now appeals and we affirm.[*3]
Preliminarily, we reject the District's argument that Petersand the ETA lack standing to maintain the grievance challenging the denial of Peters' retirementbenefits. As a former teacher and member of the ETA, Peters is "a party to the agreement[ ] [and]the dispute concerns the interpretation of language employed therein" (Matter of City of Ithaca [Ithaca Paid FireFighters Assn., IAFF, Local 737], 29 AD3d 1129, 1132 [2006]; see Ledain v Townof Ontario, 192 Misc 2d 247, 255 n 5 [2002], affd for reasons stated below 305AD2d 1094 [2003]). Moreover, we have held that "[t]he fact that retirees are not members of [theETA] or represented by it in collective bargaining negotiations is not determinative in a thresholdarbitrability analysis" (Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local737], 29 AD3d at 1132 [citations omitted]). Thus, we conclude that Peters' current status as aformer employee does not deprive her of standing to challenge the determination to deny benefitsarguably prescribed to her while employed by the District and operating under a contractnegotiated by and between the District and the ETA. Likewise, we conclude that the ETA hasorganizational standing to bring an action on Peters' behalf (see Matter of Aeneas McDonaldPolice Benevolent Assn. v City of Geneva, 92 NY2d 326, 330-331 [1998]; Society ofPlastics Indus. v County of Suffolk, 77 NY2d 761, 775 [1991]; Matter of South ColonieCent. School Dist. [South Colonie Teachers Assn.], 46 NY2d 521, 526 [1979]).
Turning to the merits, we note that "[t]he court's role in reviewing applications to stayarbitration is . . . a limited one" (Matter of Enlarged City School Dist. of Troy[Troy Teachers Assn.], 69 NY2d 905, 906 [1987]). In determining whether a grievance isarbitrable, we first decide whether "there is any statutory, constitutional or public policyprohibition against arbitration of the grievance" (Matter of City of Johnstown [JohnstownPolice Benevolent Assn.], 99 NY2d 273, 278 [2002]; see Matter of Board of Educ. ofWatertown City School Dist. [Watertown Educ. Assn.], 93 NY2d 132, 140-142 [1999]). Ifno such prohibition exists, we must then review the CBA "to determine if the parties have agreedto arbitrate the dispute at issue" (Matter of City of Johnstown [Johnstown Police BenevolentAssn.], 99 NY2d at 278; see Matter of Board of Educ. of Watertown City School Dist.[Watertown Educ. Assn.], 93 NY2d at 140). Significantly, it is "clear that the merits of thegrievance are not the courts' concern" (Matter of Board of Educ. of Watertown City SchoolDist. [Watertown Educ. Assn.], 93 NY2d at 142). Rather, " '[t]he question of the scope of thesubstantive provisions of the [CBA] is itself a matter of contract interpretation and application,and hence it must be deemed a matter for resolution by the arbitrator' " (Matter of Vestal Cent. School Dist. [VestalTeachers Assn.], 2 AD3d 1190, 1193 [2003], lv denied 2 NY3d 708 [2004],quoting Board of Educ. of Lakeland Cent. School Dist. of Shrub Oak v Barni, 49 NY2d311, 314 [1980]; see Matter of City of Ithaca [Ithaca Paid Fire Fighters Assn., IAFF, Local737], 29 AD3d at 1132). Thus, " '[t]he fact that the substantive clauses of the contract mightnot support the grievance[ ] . . . is irrelevant on the threshold question ofarbitrability' " (Matter of Vestal Cent. School Dist. [Vestal Teachers Assn.], 2 AD3d at1193, quoting Matter of Board of Educ. of Deer Park Union Free School Dist. v Deer ParkTeachers Assn., 50 NY2d 1011, 1012 [1980]).
The issue raised by the second grievance in the instant matter distills to whether Peters [*4]is considered a retiree for purposes of entitlement to healthinsurance benefits pursuant to the CBA. The District first contends that public policy prohibitsarbitration of the grievance on the basis that a determination as to an employee's employmentstatus is a matter to be left to the board of education. In this regard, the District argues that, toallow an arbitrator to determine whether Peters retired or was terminated for purposes ofreceiving retiree benefits under the CBA would be inconsistent with the Education Law, whichvests school boards and districts with the power "[t]o contract with and employ" teachers(Education Law § 1709 [16]). We disagree. In general, it is well settled that "there is noprohibition against arbitrating a dispute originating from the terms of a collective bargainingagreement concerning health insurance benefits for retirees" (Matter of City of Ithaca [IthacaPaid Fire Fighters Assn., IAFF, Local 737], 29 AD3d at 1130; see Civil Service Law§ 201 [4]; § 203; Matter of Board of Educ. of Watertown City School Dist.[Watertown Educ. Assn.], 93 NY2d at 138-139; Matter of Corinth Cent. School Dist.[Corinth Teachers Assn.], 77 AD2d 366, 367-368 [1980], lv denied 53 NY2d 602[1981]), and that "issues such as [a school district's] relationship to retired employees [and]whether retirees are covered by the grievance procedure . . . are for [an] arbitrator"to decide (Matter of City of Elmira[Elmira Professional Firefighters' Assn., AFL-CIO, I.A.F.F.-Local 709], 34 AD3d 1075,1077 [2006] [internal quotation marks and citations omitted]; see City of Buffalo vA.F.S.C.M.E. Council 35, Local 264, 107 AD2d 1049, 1050 [1985]). Here, the District hasnot demonstrated how a determination of Peters' status as either a retiree or terminated formerteacher for purposes of ascertaining her entitlement to retiree health benefits would infringe uponthe District's authority to hire or fire teachers.
We are also unpersuaded by the District's argument that, as a matter of public policy, Peters'alleged misconduct precludes an award of contractual benefits to her, as Peters was never foundguilty of grand larceny[FN3]and the administrative disciplinary charges were dismissed without any finding ofguilt.[FN4]The issue of the effect, if any, of Peters' alleged misconduct on her entitlement to benefits goes tothe merits of her grievance, not to its arbitrability (see generally Matter of Enlarged CitySchool Dist. of Troy [Troy Teachers Assn.], 69 NY2d at 906). Thus, we agree with SupremeCourt's conclusion that the District failed to identify any statute, precedent or public policy thatwould prohibit reference of the second grievance to arbitration.[FN5][*5]
The District next argues that the second grievance is notarbitrable pursuant to the terms of the CBA. Again, we disagree. Article 61.1.1 of the CBAdefines a grievance as an "alleged violation of the expressed written words in th[e] agreement"and article 61.3.4 of the CBA provides that an employee may request arbitration if he or she isnot satisfied with the disposition of a grievance at the administrative level. Retiree health benefitsare expressly provided for in article 64.1.1 of the CBA. Thus, a denial of such benefits to Petersconstitutes an alleged violation of the CBA. Because a "reasonable relationship [exists] betweenthe subject matter of the dispute and the general subject matter of the CBA" (Matter of Boardof Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 NY2d at 143; seeMatter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d at 277;Matter of Vestal Cent. School Dist. [Vestal Teachers Assn.], 2 AD3d at 1192-1193), thedetermination as to whether Peters met the qualifications set forth in the CBA for receipt ofretiree health benefits is arbitrable. Contrary to the District's contention, in view of the clearagreement to arbitrate, the general reservation of management rights contained in article 61.4 ofthe CBA is not applicable.
We have examined the District's remaining contentions and, to the extent they are properlybefore us, find them to be without merit.
Mercure, J.P., Rose, Malone Jr. and Kavanagh, JJ., concur. Ordered that the order isaffirmed, without costs.
Footnote 1: We note that the HearingOfficer specifically stated that "[n]othing in [the] decision should bear upon the rights of theparties to any dispute concerning . . . Peters' claim for health insurance under the[CBA]."
Footnote 2: We disagree with the District'sassertion that Supreme Court erred in declining to address proceeding No. 1. Peters maintainsthat she commenced this proceeding simply to "preserve [her] right" to relief in the event that itwas determined that the CBA did not entitle her to arbitration of her grievance and wasmaintaining proceeding No. 1 until all appeals were exhausted. Insofar as Supreme Courtconcluded that the CBA provided for arbitration, the court properly determined that there was noneed to reach the merits of proceeding No. 1. While Supreme Court did not explicitly state that itwas reserving decision, that is, in effect, what was done, and an order reserving decision is notappealable (see Matter of Trader v State of New York, 277 AD2d 978, 978 [2000]). If, atsuch time as all appeals are exhausted, Peters does not discontinue the proceeding, the Districtcan make an appropriate application to Supreme Court for a determination.
Footnote 3: In November 2008, the criminalcharges against Peters were adjourned in contemplation of dismissal.
Footnote 4: Notably, the District neverappealed this determination.
Footnote 5: Moreover, contrary to theDistrict's argument, neither Supreme Court's previous decision nor ours regarding the firstgrievance resolves the issue of arbitrability of the second grievance. In our previousdecision—in which we affirmed a stay of arbitration with respect to the first grievanceinvolving the District's delay in processing Peters' retirement application—we specificallynoted that, in the event the District denied Peters' request for retiree health benefits, she wouldnot be precluded from appealing such determination in accordance with the CBA and/or aproceeding pursuant to CPLR article 78 (Matter of Union-Endicott Cent. School Dist. [Endicott Teachers' Assn.],59 AD3d 799, 801 n 2 [2009], supra). The District apparently misreads that decisionto the extent it argues that we determined that the issue of whether Peters should beconsidered a retiree is not arbitrable. Rather, we indicated that the CBA did not address the issueof when the District was required to determine her retirement status and, therefore, thatissue was not arbitrable.