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Court Rules “No-Layoff” Clause Doesn’t Mean What It Says

Court Rules “No-Layoff” Clause Doesn’t Mean What It Says

November 29, 2011
By Larry Cary, Partner, Cary Kane LLP

When the Village of Johnson City abolished the positions of six firefighters out of budgetary necessity in 2009, the Firefighters union sought their reinstatement contending that the collective bargaining agreement with the Village prohibited layoffs for the life of the agreement. The clause read: “The Village shall not lay-off any member of the bargaining unit during the life of this contract.” Thinking they had a good case, the Union filed for arbitration and twice the lower courts agreed, ordering the Village to arbitrate the dispute. This month, the New York Court of Appeals, the state’s highest court, ruled otherwise.

 

The Court of Appeals ruled the language of the no-layoff provision was not sufficiently explicit to prevent the termination of firefighters under the circumstances where the Village was eliminating positions. The majority of the Court held, “the clause here does not explicitly protect the firefighters from the abolition of their positions due to economic and budgetary stringency.”
 
In support of this decision, the Court also looked to the fact that the “term ‘layoff’ is undefined in the CBA, and is open to different and reasonable interpretations. Indeed, the parties’ disagreement over whether the term ‘layoff’ constitutes a permanent or non-permanent job loss, and whether the Village’s abolition of the firefighter positions constituted a layoff, underscores its ambiguity.”
 
As explained by the Court, under New York law, a job security clause in a public sector collective bargaining agreement 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 a legislatively declared financial emergency between parties of unequal bargaining power.”
 
What does this decision mean for New York’s public sector labor unions? It means that they must carefully craft the no-layoff language to cover a number of situations. The clause, to be effective, must explicitly prevent the permanent and temporary layoff of employees due to elimination of positions for budgetary reasons. And thought should be given to other possible situations that may come up during the life of the agreement. For the text of the decision, see In the Matter of the Arbitration between Johnson City Professional Firefighters Local 921,e t al. and Village of Johnson City, No. 191, 2011 NY Slip Op 8226 (Nov. 17, 2011).

Larry Cary is a partner at Cary Kane LLP and has practiced labor law for over 25 years.

November 28, 2011

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