New York State Office of Children v. Lanterman

926 N.E.2d 233, 14 N.Y.3d 275, 899 N.Y.S.2d 726

• Court: New York Court of Appeals
• Decided: March 25, 2010
• Docket: 31
• Status: Published

Opinions

OPINION OF THE COURT

Smith, J.

In these two cases, state employees who were dismissed because they lacked the credentials required for their jobs seek to arbitrate the question of whether their dismissals were disciplinary actions. Under our decision in Matter of Felix v New York City Dept. of Citywide Admin. Servs. (3 NY3d 498 [2004]), the dismissals clearly were not disciplinary, and the employees’ assertion that they were does not have a relationship with their collective bargaining agreement sufficient to justify arbitration of the issue.

I

Lauren Lanterman was a teacher employed by the Office of Children and Family Services (OCFS); Victor Ortiz was a counselor employed by the Office of Alcoholism and Substance Abuse Services (OASAS). Though they worked for different agencies, Lanterman and Ortiz belonged to the same union, the New York State Public Employees Federation (PEF), and their rights were governed by the same collective bargaining agreement (CBA).

Both Lanterman and Ortiz needed credentials for the jobs they held. A civil service classification standard, promulgated pursuant to Education Law § 112 (1) and 8 NYCRR 116.3 (b), required Lanterman to have a teaching certificate appropriate to her specialty. OASAS regulations, promulgated pursuant to Mental Hygiene Law § 19.07 (d), required Ortiz to have a credential as a credentialed alcoholism and substance abuse counselor (CASAC). Before the events leading to this litigation, Lanterman had a provisional teaching certificate, and Ortiz had a CASAC credential good for three years. Both of these credentials expired, and both Lanterman and Ortiz failed to obtain new ones. As a result, both were dismissed.

PEF filed grievances for Lanterman and Ortiz, claiming that their dismissals violated their rights under article 33 of the CBA. That article is entitled “DISCIPLINE” and begins with the following words:

“33.1 Applicability

“The disciplinary procedure set forth in this Article shall be in lieu of the procedure specified in Sections 75 and 76 of the Civil Service Law and shall apply to all persons currently subject to Sections 75 and 76 of the Civil Service Law.”

The stated purpose of article 33 is “to provide a prompt, equitable and efficient procedure for the imposition of discipline for just cause” (§ 33.2). It prescribes a detailed “disciplinary procedure,” beginning with a “notice of discipline,” which may be followed by a “disciplinary grievance,” which, if not otherwise resolved, may in turn become the subject of a “disciplinary arbitration” (§ 33.5).

OCFS and CASAS rejected the grievances and the Governor’s Office of Employee Relations upheld the rejections. The position of these agencies is that the grievances are not subject to arbitration because Lanterman’s and Ortiz’s dismissals were not for disciplinary reasons, but for the employees’ failure to have the qualifications necessary for their jobs. PEF, Lanterman and Ortiz respond, in substance, that this itself is an arbitrable question. Under article 34 of the CBA, a “contract grievance,” defined as “a dispute concerning the interpretation, application or claimed violation of a specific term or provision of this Agreement” (§ 34.1 [a]), is an arbitrable dispute. PEF, Lanterman and Ortiz argue that, since they say that article 33’s disciplinary procedures are available in their case, and the employers say they are not, a “dispute, concerning the interpretation, application or claimed violation” of a provision of the CBA exists. They thus seek an arbitration about what the contract means, to be followed, if they prevail, by a disciplinary procedure and perhaps a second, disciplinary, arbitration.

PEF filed notices of intention to arbitrate on Lanterman’s and Ortiz’s behalf, and the state agencies brought these proceedings under CPLR article 75 to stay the arbitrations. Both employees prevailed in Supreme Court. In the Appellate Division, the cases were decided by the same panel on the same day (Matter of New York State Off. of Children & Family Servs. [Lanterman], 62 AD3d 1109 [3d Dept 2009]; Matter of New York State Off. of Alcoholism & Substance Abuse Servs. [Ortiz], 62 AD3d 1118 [3d Dept 2009]). The judgment in Lanterman’s favor was reversed, but that in Ortiz’s favor was affirmed, with two Justices dissenting in each case. The reason for the contrasting results is that one Justice was persuaded by the state agencies’ argument, made as to Lanterman but not as to Ortiz, that the proposed arbitration would violate public policy.

In each case, the unsuccessful parties appeal to us as of right, pursuant to CPLR 5601 (a). We affirm in Lanterman and reverse in Ortiz. Because we conclude that neither grievance is arbitrable under the CBA, it is unnecessary for us to decide the public policy issue raised in Lanterman.

II

The question Lanterman and Ortiz seek to arbitrate is essentially the same question we decided in Felix. There, a New York City employee was dismissed for failing to establish city residence, which was a prerequisite to his employment under a local law. The employee sought a hearing under Civil Service Law § 75 (“Removal and other disciplinary action”), but we rejected his claim, holding that the disciplinary provisions of the Civil Service Law did not apply to him. We explained that “while an act of misconduct invokes Civil Service Law § 75 disciplinary procedures,” an employee’s failure to meet a residence requirement “is separate and distinct from an act of misconduct” (3 NY3d at 505). We approved the distinction made in Mandelkern v City of Buffalo (64 AD2d 279, 281 [4th Dept 1978, Simons, J.]) between issues of “job performance, misconduct or competency,” which are subject to Civil Service Law disciplinary procedures, and “a qualification of employment,” which is not.

In Felix’s terms, the dismissals of Lanterman and Ortiz were plainly not disciplinary, but were for failure to meet qualifications of employment—a teaching certificate in Lanterman’s case, a CASAC credential in Ortiz’s. The State does not claim that the employees have forfeited their jobs by misconduct. It claims that they do not have the qualifications that they must have to hold those jobs.

PEF, Lanterman and Ortiz try to distinguish Felix by arguing that these cases involve contractual, not statutory, disciplinary procedures. The argument is without merit, because the relevant contract clause, on its face, is made applicable to exactly those cases to which the statute would otherwise apply: the contractual disciplinary procedure is “in lieu of the procedure specified in Sections 75 and 76 of the Civil Service Law” and is applicable “to all persons currently subject to Sections 75 and 76 of the Civil Service Law.” Felix squarely holds that sections 75 and 76 are inapplicable to the grievances of Lanterman and Ortiz.

PEF, Lanterman and Ortiz argue, in substance, that however weak their claim to be accorded disciplinary hearings may be, the claim is for an arbitrator, not a court, to decide. It is generally true that we distinguish “between the merits of grievances and the threshold question of whether courts or arbitrators have the authority to decide the merits” (Matter of City of Johnstown [Johnstown Police Benevolent Assn.], 99 NY2d 273, 279 [2002]) and that “[e]ven an apparent weakness of the claimed grievance is not a factor in the court’s threshold determination” (Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 NY2d 132, 142 [1999]). These rules are applicable as long as a contractual interpretation is at least colorable, but it is not true that any claim, no matter how insubstantial, may be arbitrated. Under Watertown, the test is “whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA” (93 NY2d at 143). We hold here, as we did in Matter of Uniform Firefighters of Cohoes, Local 2562, IAFF, AFL-CIO v City of Cohoes (94 NY2d 686, 694-695 [2000]), that the “reasonable relationship” test is not met: “despite the breadth of the arbitration clause in the CBA, it cannot be construed to extend to arbitration of grievances which, as a matter of law, do not effectively allege any breach of the collective bargaining agreement.”

Accordingly, in Lanterman, the order of the Appellate Division should be affirmed with costs. In Ortiz, the order of the Appellate Division should be reversed with costs and the petition to stay arbitration granted.