ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, November 18, 2011

NY Court of Appeals Holds that "No Layoff" Clause is Ambiguous

The collective bargaining agreement between the Firefighters Union and Johnson City, NY, 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. 

Images-1Facing budgetary constraints, Johnson eliminated 6 firefighter positions.  The Union filed a grievance, which was denied.  The Union then filed a notice of intent to arbitrate.  By the time the dispute worked its way up to the New York Court of Appeals, the issue was whether the "no layoff clause" is arbitrable.  The Court held that it is not arbitrable because the clause is "not explicit, unambiguous and comprehensive."  Writing for the majority, Judge Pigott reasoned:

From a public policy standpoint, our requirement that "job security" clauses meet this stringent test derives from the notion that before a municipality bargains away its right to eliminate positions or terminate or lay off workers for budgetary, economic or other reasons, the parties must explicitly agree that the municipality is doing so and the scope of the provision must evidence that intent.  Absent compliance with these requirements, a municipality's budgetary decisions will be routinely challenged by employees, and its ability to abolish positions or terminate workers will be subject to the whim of arbitrators.

The pertinent portion of the no-layoff clause here states that the "Village shall not lay–off any member of the bargaining unit during the term of this contract" but this language, in and of itself, does not explicitly prohibit the Village from abolishing firefighter positions out of budgetary necessity (cf. Yonkers Fedn. of Teachers, 40 NY2d at 275-276). Unlike the clause in Yonkers Fedn. of Teachers, the clause here does not explicitly protect the firefighters from the abolition of their positions due to economic and budgetary stringencies. That is not to say that the parties could not have bargained for such a broad clause, only that it is unclear on its face whether they did so at all, which means that the clause is hardly unambiguous (see Crossing Guard Union, 39 NY2d at 965).

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.  Moreover, the clause does not comprehensively prohibit the Village from abolishing firefighter positions, and, given its narrow and limited language, it cannot be construed as such.  Had the Union desired that its members be protected from the elimination of firefighter positions, it could have bargained for such protections.

So, essentially, the New York Court of Appeals held that it was ambiguous whether an elimination of a position constitutes a layoff.  

ImagesJudge Ciparick dissented, writing: 

At a time when the term "layoff" pervades the public dialogue, typically signifying the kind of large scale public and private workforce reductions that have characterized recent economic crises, it is reasonable to conclude that the parties employed that term to succinctly but thoroughly address the threat of job insecurity.  Regardless, then, of whether "layoff," pertained to a temporary period of unemployment or a permanent job cut -- an issue of interpretation, which should be decided by an arbitrator -- the no-layoff clause at issue here should be deemed an explicit, unambiguous and comprehensive job security provision. 

And, here's a recap from WBNG in Binghamton, NY:

Matter of Johnson City Professional Firefighters Local 921 (Village of Johnson City), 2011 Slip Op 08226 (NY Nov. 17, 2011).

[Meredith R. Miller]

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