The Taylor Law governs collective bargaining rights and duties in the public sector in New York State. The law was enacted in response to the failure of New York’s first public sector labor collective bargaining law, the Condon-Wadlin Act of 1947, to avoid the widespread strike activity that occurred the mid-1960s. The Taylor Law’s primary purpose is to “promote harmonious and cooperative relationships between government and its employees” (Civil Service Law section 200). While it has been very successful in avoiding work stoppages, the Taylor Law presents school districts with a challenging, ongoing set of obligations, particularly in the aftermath of the Great Recession of 2008. Downward adjustments of school aid through the Gap Elimination Adjustment have put severe financial pressure on many school districts, and the ability of districts to raise local revenue has been limited by “Tax Cap” and “Tax Freeze” statutes (Education Law sections 2023-a and 2023-b). This article will examine the duty to negotiate and three topics that deserve special attention in a time when districts have unprecedented limits on resources. 

Mandatory and non-mandatory subjects
Under the Taylor Law, employers are only required to negotiate over “mandatory” subjects of bargaining – issues that involve employees’ terms and conditions of  employment, characterized as working conditions, pay, benefits, etc. (matters central to employee job related interests).  Other potential subjects of bargaining are reserved to the employer as management prerogatives and are called “non-mandatory” subjects of bargaining. For instance, matters that bear on educational policy generally are non-mandatory subjects.

But items can move between the two categories as a result of collective bargaining. According to the Public Employment Relations Board, a quasi-judicial body that settles collective bargaining disputes regarding the duty to negotiate in good faith, a non-mandatory or permissive subject of bargaining will become mandatory to negotiate once it is placed into a collective bargaining agreement. This is called the conversion theory of negotiability. The only way a converted subject can revert to non-mandatory status is if both parties consent to remove the subject from the agreement. 

One noteworthy example is class size. New York’s highest court, the Court of Appeals, has held that although class size affects teachers’ workload, the topic is one of educational policy made in light of the programmatic needs and resources of the school district as determined by the board of education.  Therefore, it is not a mandatory subject of bargaining.

Nevertheless, class size and student load limits appear in numerous teacher contracts throughout New York State.  While such commitments were not required by law, such caps remain binding regardless of economic conditions. Even if there is a budget deficit or other fiscal imperative, well-established case law prohibits the district from unilaterally removing a class size cap or student load limit from a collective bargaining agreement.

Including a significant non-mandatory subject such as class size in a labor agreement has long-term, if not permanent, implications. While it may be a way to achieve concessions in another area, it should only be done in full recognition of the consequences.

Altering retiree health insurance benefits
Ninety-five percent of school districts and BOCES provide health insurance benefits to retirees. On average, districts pay more than two-thirds of premium costs for retiree health insurance.

Given the rapidly increasing cost of health insurance premiums and ever-growing legacy of health insurance costs for retirees, it is typically a goal of district negotiators to increase the portion of premium paid by retirees. However, both legislation and recent court decisions have created huge roadblocks in school district efforts to cost contain retiree health premiums.

The New York Insurance Moratorium Law prohibits school districts and BOCES from diminishing the health insurance benefits of retirees and their dependents “unless a corresponding diminution of benefits or contributions is [a]ffected. . . during this period . . . from the corresponding group of active employees for such retirees.”

In other words, the “moratorium  law” states that a district cannot unilaterally make changes such as raising health insurance contribution costs and copays for retirees with vested health insurance benefits.

Previously, school districts were nevertheless able to make such changes if they took similar action, through collective bargaining, regarding the benefits of active employees.  However, a recent case decided by the New York State Court of Appeals, Kolbe v. Tibbetts (2013), has changed the landscape with respect to negotiating changes to vested retiree health insurance benefits.

In a departure from past precedent, the Court of Appeals held that the Insurance Moratorium Law does not give public school districts and public employee union’s the unfettered discretion to negotiate changes to vested health insurance benefits for retirees, even where the district negotiates a corresponding change to health insurance benefits for active employees.

According to the court, the Insurance Moratorium Law “only prescribed a bottom floor, beneath which school districts and certain boards were forbidden to go in diminishing benefits. It was not meant to eviscerate contractual obligations and decades of contract law” such as vested collectively negotiated contractual rights.  Since the union no longer represents the retirees, collective bargaining cannot diminish established premium and contribution benefits rights of those
individuals.  

Thus, once the parties specify the percentage of employer premium contributions for retirees who retire under the terms set forth in the then current collective bargaining agreement, after retirement neither the parties nor the employer acting alone may alter such vested rights.

Because today’s current employees will become tomorrow’s retirees, it is important to negotiate language that provides flexibility so that districts can cope with the ever increasing cost of providing health insurance benefits to retired employees. One example would be for retirees to pay premium contributions at the same percentage level as the active members in the bargaining unit in which the retiree served.

Job security clauses
Increasingly, union negotiators are asking for the incorporation of no-layoff clauses into collective bargaining agreements.  This is a union’s opportunity to provide a form of job security for its members in difficult economic times.  However, a district that agrees to a no-layoff provision should be confident that it is financially capable of living up to a promise not to lay off employees covered by the contract. 

No-layoff clauses must also be carefully structured.  They should be limited in duration and should, for example, “sunset” at the end of the contract period.  In addition, they should be limited in scope. 

In Matter of Board of Educ. of Yonkers City School Dist (1976), the Court of Appeals held that a job security clause is valid and enforceable only when it is explicit, extends only for a reasonable period of time, and is not negotiated in a period of “legislatively declared financial emergency between parties of unequal bargaining power.” In that case, the court upheld the no lay-off provision which read, “[d]uring the life of this contract no person in this bargaining unit shall be terminated due to budgetary reasons or abolition of programs but only for unsatisfactory job performance and provided for under the Tenure Law.”  The court praised this language as “explicit in its protection of the [workers] from abolition of their positions due to budgetary stringencies.”

In contrast, in Village of Johnson City (2011), a layoff provision for firefighters stated the following; “[t]he Village shall not lay-off any member of the bargaining unit during the term of this contract . . . ” The Court of Appeals stated that the provision was void as against public policy, as the term “lay-off” was not defined in the CBA.

At the end of the negotiation process, school board members will be called upon to approve the terms of the Memorandum of Agreement (MOA) that will modify your existing collective bargaining agreement. It is important to carefully read the MOA, understand its terms, and ask questions of your lead negotiators about the meaning, intent, and impact of the language that will now define the terms of your relationship with the union.

Make certain that the commitments that you are agreeing to bind the district to are reasonable, sustainable in the long term, and provide enough flexibility that your district can adapt to an ever-changing financial landscape.

Members of the New York State Association of School Attorneys represent school boards and school districts. This article was written by Steven Latino of Shaw, Perelson, May & Lambert, L.L.P.