PEF Statement on Court of Appeals Decision on No-Layoff Clause

On November 17, 2011, the New York Court of Appeals ruled that the termination of six firefighters for budgetary reasons did not fall within the no-layoff clause of the Collective Bargaining Agreement (“CBA”) between the Village of Johnson City and the Johnson City Professional Firefighters, and therefore the terminations were not arbitrable under the CBA.  In a sharply divided 4-3 decision, the Court of Appeals held that given the particular contract in this case, the Village was not required to arbitrate the meaning of a “no-layoff clause” in the CBA.

The full no-layoff clause in the Johnson City Firefighters CBA states:  “A. The Village shall not lay-off any member of the bargaining unit during the term of this contract. B. The Village shall not be required to ‘back fill’ hire additional members to meet staffing level of expired agreement.”

Although comments have been made in the media which would lead many to conclude that this decision broke new ground, the Court of Appeals was actually relying on longstanding precedent that holds “a purported job security provision does not violate public policy, and therefore is valid and enforceable, only if the provision is ‘explicit,’ the CBA extends for a ‘reasonable period of time,’ and the CBA ‘was not negotiated in a period of legislatively declared financial emergency between parties of unequal bargaining power.’ ”  The Court also reiterated that the most important thing about the language of a job security clause was that it was “explicit in its protection of the [workers] from abolition of other positions due to budgetary stringencies.”  The Court ultimately addressed whether the “no-layoff” clause in the Johnson City Firefighters contract was “explicit, unambiguous and comprehensive.”  On that issue, the Court ruled that the clause did not “explicitly protect the firefighters from the abolition of their positions due to economic and budgetary stringencies” and that the term “layoff” is “undefined in the CBA and open to different and reasonable interpretations.”

In light of the Firefighters’ decision, PEF has been asked whether the recently ratified PEF-State of New York CBA containing lay-off protection could be vulnerable to the same type of interpretation.  PEF adamantly believes that it would not be vulnerable to such an interpretation.

First, there is absolutely no indication the State will not live up to the Workforce Reduction Limitation provision it bargained and negotiated with PEF.  At the time of negotiations, the State was fully aware of the financial circumstances facing the State the rest of this fiscal year and the next.  Clearly, the likelihood of revenue shortfalls facing the State was not unanticipated, yet the State went ahead and signed the contract and rescinded the 3,500 scheduled layoffs.

Second, the job security clause PEF negotiated is explicit in its protection of PEF members from “layoffs resulting from the facts and circumstances that gave rise to the present need for $450 million in workforce savings.”  As the job security clause in the PEF-State Contract is explicit, unambiguous and comprehensive, should the need ever arise, PEF firmly believes that the job security provision in the PEF-State CBA would be subject to arbitration.