No. A-98/99/100-15 (077447)

Aug. 2, 2017 (Date Decided)

Judge Solomon

FOR APPELLANTS: Eric M. Bernstein (Eric M. Bernstein & Associates, attorneys; Eric M. Bernstein, of counsel and on the brief, and Philip G. George, on the briefs); Robin T. McMahon (Robin T. McMahon, General Counsel, attorney; Robin T. McMahon and Don Horowitz, Senior Deputy General Counsel, on the briefs); David A. Rapuano (Archer & Greiner, attorneys; David A. Rapuno, of counsel and on the briefs, and Ashley M. Lebrun, on the brief).

FOR RESPONDENTS: James M. Mets (Mets Schiro McGovern & Paris, attorneys; James M. Mets, of counsel and on the briefs, and David M. Bander, on the briefs); Ira W. Mintz (Weissman & Mintz and Selikoff & Cohen, attorneys; Ira W. Mintz and Steven R. Cohen, on the briefs).

Defendants appealed from the decision of the appellate division, which reversed defendant, the Public Employment Relations Commission’s decisions that held that defendant public employers were no longer required, as a matter of law, to fund salary step increases after a CBA had expired. Plaintiffs, two unions that represented certain public employees of defendants, filed charges against defendants after they informed plaintiffs that, following the expiration of their CBAs, they would cease paying the salary step increases contained in the parties’ expiring CBAs. The parties’ CBAs provided that, once they expired, the provisions of those agreements would continue in effect until a successor agreement was negotiated. Previously, defendants’ practice had been to adhere to the terms and conditions of the expired CBA until a new agreement was negotiated.

Defendants acknowledged their customary practice, but asserted that major changes in the labor negotiations landscape had rendered continued adherence to salary step increases impractical and burdensome. PERC ultimately disagreed that the expired CBAs required continuation of salary step increases after their expiration, ruling that the dynamic status quo doctrine was impractical and burdensome considering legislative changes to the labor negotiation process and economic conditions since the 2008 recession, and found that defendants were within their authority to stop applying salary step increases.

Plaintiffs appealed to the appellate division, which reversed PERC, rejecting defendants’ contention that the Property Tax Levy Cap and the Interest Arbitration Award Cap did not pre-empt the viability of the dynamic status quo doctrine. The appellate division ruled that the salary step increases were a term and condition of employment that could not be unilaterally terminated by defendants during CBA negotiations.

On appeal, the court affirmed on other grounds. The court held that it was not necessary to look beyond the expired CBAs to apply the dynamic status quo doctrine. Instead, the court ruled that the parties’ expired CBA explicitly required that their terms would continue in force and effect until a successor CBA was negotiated. Accordingly, the court ruled that defendants committed an unfair labor practice by unilaterally altering a term and condition of employment by eliminating the salary step increases without first attempting to negotiate that term in good faith.