United States District Court, Southern District of New York
October 26, 1990
ASSOCIATION OF SURROGATES AND SUPREME COURT REPORTERS WITHIN THE CITY OF NEW YORK, MARY O'LEARY, PRESIDENT; CITYWIDE ASSOCIATION OF LAW ASSISTANTS, BARBARA BROWN, PRESIDENT; COURT ATTORNEYS ASSOCIATION OF THE CITY OF NEW YORK, ROBERT A. MULHALL, PRESIDENT; COURT OFFICERS BENEVOLENT ASSOCIATION OF NASSAU CO., JEFFREY POLLACK, PRESIDENT; DISTRICT COUNCIL 37, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES & LOCAL 1070, PAUL SHELKIN, PRESIDENT; LOCAL 704, SERVICE EMPLOYEES INTERNATIONAL UNION, JOHN WALSH, PRESIDENT; NEW YORK STATE SUPREME COURT OFFICERS ASSOCIATION, ILA, LOCAL 2013, AFI-CIO JOHN MCKILLOP, PRESIDENT; NINTH JUDICIAL DISTRICT COURT EMPLOYEES ASSOCIATION, MARTIN SHARP, PRESIDENT; SUFFOLK CO. COURT EMPLOYEES ASSOCIATION, INC., THOMAS F. MCGUINNESS, PRESIDENT; THE COMMUNICATION WORKERS OF AMERICA, AFL-CIO, LOCAL 1180, ARTHUR CHELIOTES, PRESIDENT; CIVIL SERVICE FORUM, LOCAL 300, SEIU, SALVATORE CANGIARELLA, PRESIDENT; JANET FOSTER, SUSAN GLASBRENNER, MICHAEL SULLIVAN, DAVID RICHMAN, GREG SNIGOR, JAMES DINAPOLI, WILLIAM ROSARIO, ABEL PELTRO, GEORGE F. BERGHORN, LISA ROSENZWEIG AND MICHAEL SMITH, PLAINTIFFS,
STATE OF NEW YORK; EDWARD V. REGAN, AS COMPTROLLER OF THE STATE OF NEW YORK; ROBERT ABRAMS, AS ATTORNEY GENERAL OF THE STATE OF NEW YORK; MATTHEW T. CROSSON, AS CHIEF ADMINISTRATOR OF THE UNIFIED COURT SYSTEM AND THE STATE OF NEW YORK UNIFIED COURT SYSTEM, DEFENDANTS.
The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
OPINION AND ORDER
This is a declaratory judgment action seeking to declare
unconstitutional Section 375 of Chapter 190 of the Laws of New
York of 1990 which establishes a lag payroll for nonjudicial
employees of the Unified Court System hired on or after April
7, 1983. Plaintiffs by order to show cause moved for a
preliminary injunction pursuant to Fed.R.Civ.P. 65 enjoining
defendants from implementing the law on November 7, 1990 and
directing that they continue to pay plaintiffs in the same
manner as currently. On the return date the parties agreed
that there were no issues of fact and that the Court could
also treat this as a motion and cross-motion for summary
judgment. For the reasons set forth below, plaintiffs' motions
are denied and defendants' motion for summary judgment is
Section 375 of Chapter 190 provides:
b. (1) Notwithstanding the provisions of
subdivision a of this section or of section 200
of the state finance law, commencing with the
last bi-weekly payroll period ending at least
fourteen days before March 31, 1991 for each
nonjudicial officer or employee, the salary or
wages of such officer or employee shall be
payable by the state two weeks after they shall
have become due. Until such time, an alternative
procedure for payment of the salaries and wages,
to be determined by the comptroller, may be
implemented in lieu of the procedure specified in
subdivision 1 of such section 200 or in other
provisions of law. The procedures set forth in
this paragraph (including any alternative
procedure determined by the comptroller) shall
remain in effect until the state and an employee
organization representing nonjudicial officers
and employees who are in positions which are in
collective negotiating units established pursuant
to article 14 of the civil service law enter into
an agreement providing otherwise for the payment
of salaries and wages to such officers and
(2) The provisions of paragraph 1 of this
subdivision shall not apply to any alternative
procedure for the payment of salaries and wages
to nonjudicial officers and employees that was
adopted pursuant to law and in effect immediately
preceding the effective date of this subdivision.
Act approved May 25, 1990, ch. 190, 1990 N.Y. Laws 375.
On June 18, 1990, the state comptroller determined in order
to implement Section 375 that, commencing November 7, 1990,
affected employees will be paid nine-days' salary rather than
ten-days' salary in each pay period for ten two-week pay
periods. See Crosson Aff., Exh. C. Thus during the 1990-91
fiscal year ending March 31, 1991, employees will be paid for
50 rather than 52 weeks of employment. The two weeks' pay
withheld would be repaid to the affected employees upon
termination of their employment at the rate applicable to them
at that time. This so-called lag payroll system under present
state parlance has been applicable to state employees other
than those in the Unified Court System for several years.
Each of the eleven plaintiff labor organizations is party to
a collective bargaining agreement with the State of New York
Unified Court System which extends for a three-year period and
which establishes compensation for nonjudicial employees.
Employees hired on or after April 7, 1983 are currently paid
every second Wednesday for the two-week period which ends on
the date of payment. Plaintiffs claim that imposition of a lag
payroll system under Section 375 of Chapter 190 violates the
Contract Clause, Article I, Section 10, clause 1 and the Equal
Protection and Due Process clauses of the Fourteenth Amendment
of the United States Constitution.
In this Circuit, a party seeking preliminary injunctive
relief must show:
(a) irreparable harm and (b) either (1)
likelihood of success on the merits or (2)
sufficiently serious questions going to the
merits to make them a fair ground for litigation
and a balance of hardships tipping decidedly
toward the party requesting the preliminary
Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72
(2d Cir. 1979). Because plaintiffs in this action have failed
to demonstrate either a likelihood of success on the merits or
serious questions as to the merits combined with a balance of
hardships in their favor, their motion for a preliminary
injunction is denied.
Summary judgment is appropriate if the evidence offered
demonstrates that there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter
of law. Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986). Because the matter presented does
not raise any issues of fact, the Court denies plaintiffs'
motion for summary judgment and grants summary judgment in
favor of defendants.
1. Contract Clause Challenge
Plaintiffs allege that Section 375 abrogates the terms of
plaintiffs' eleven collective bargaining agreements each of
which contain a provision that:
Bi-weekly salaries will be computed on the basis
of ten working days.
See e.g., Complaint, Exh. A. at 134. This contractual provision
is read in conjunction with Section 200(1) of the State Finance
Law which mandates that "[t]he salaries of all officers of the
state and the wages of all employees thereof shall be due from
and payable by the state bi-weekly. . . ." N.Y. State Fin.Law §
200(1) (McKinney 1989). Plaintiffs thus assert a contractual
right to continue being paid every second Wednesday for the ten
working days comprising the preceding pay period and that being
paid for only nine of those days under a lag payroll system is
an unconstitutional legislative impairment of contract.
Defendants argue that there is in fact no contractual
impairment. This Court agrees. Each of the collective
bargaining agreements at issue also contains the following
language as required by N.Y.Civ. Serv.Law § 204-a(1) (McKinney
"It is agreed by and between the parties that any
provision of this agreement requiring legislative
action to permit its implementation by amendment
of law or by providing the additional funds
therefor, shall not become effective until the
appropriate legislative body has given approval."
A fair interpretation of this statutory language is that the
compensation sections of the collective bargaining agreements
are provisions which "requir[e] legislative action to permit
[their] implementation . . . by providing the additional funds
therefor" because they require annual legislative
appropriations in each fiscal year covered by the agreement.
See N.Y. Const. art 7, § 7 ("No money shall ever be paid out of
the state treasury . . . except in pursuance of an
appropriation by law. . . .").
Plaintiffs argue that the only legislative "approval"
required under § 204-a(1) is the legislature's ratification of
the terms of the collective bargaining agreements. See, e.g.,
Act of Dec. 29, 1988, ch. 787, 1988 N.Y. Laws 1670 (McGuinness
Aff., Exh. A). Plaintiffs take the position that once it
ratifies the agreements, the legislature is bound to make
sufficient appropriations to meet the contractual commitments.
The Court rejects this argument.
There is ample support for the Court's interpretation of
§ 204-a(1) in the legislative history. Section 204-a(1) was not
part of the original Taylor Law enacted in 1967 but was added
as an amendment in 1969. The purpose of the amendment was:
[to] obviate confusion as to the effect of an
agreement between an employer and employee
organization by making clear . . . that
legislative action is needed before the agreement
becomes effective as to those provisions
requiring legislative approval such as, for
example, the appropriation of funds for salaries.
Legislative Memoranda, Senate Rules Committee at 2365 (1969).
This language is susceptible of but one meaning — that
legislative appropriations are necessary before compensation or
salary provisions of collective bargaining agreements become
The parties do not dispute that for fiscal year 1990-91 the
legislature's appropriation contemplated use of a lag payroll
system. The Report of Fiscal Committee on the Executive Budget
utilized a lag payroll provision to adjust the Court System's
budget prior to passage of the appropriation for the Court
System. See Crosson Aff., Exh. B. The legislature passed
Section 375 of Chapter 190 as companion legislation to ensure
that the adjustment was effectuated in that manner. No
contractual impairment arises from the legislature's imposition
of a lag payroll system because the compensation provisions of
the collective bargaining agreements did not become effective
until after this legislation was enacted and the appropriation
was passed.*fn1 See Texaco, Inc. v. Short, 454 U.S. 516, 531,
102 S.Ct. 781, 793, 70 L.Ed.2d 738 (1982) (statute cannot
unconstitutionally impair a contractual obligation that does
not exist at the time of the statutory enactment).
If the Court's interpretation of § 204 is incorrect, it is
necessary to consider whether the Contract Clause will have
been violated as plaintiffs assert. Under United States Trust
Co. v. New Jersey, 431 U.S. 1, 25, 97 S.Ct. 1505, 1519, 52
L.Ed.2d 92 (1977), an impairment may be constitutional if it is
reasonable and necessary to serve an important public purpose.
The state's determination of reasonableness and necessity,
however, is accorded less deference when a state impairs a
public rather than private contract. Id. at 26, 97 S.Ct. at
Even applying this stricter standard, it is apparent in this
case that the impairment was a reasonable and necessary one.
The state has faced and still is facing a budget crisis. In
submitting the Court System's budget request for 1990-91, the
Chief Administrator acknowledged "the state's precarious
fiscal condition." Crosson Aff. ¶ 4 and Exh. A. The legislature
had a legitimate interest in adjusting its fiscal allocations
to the judicial branch to allow for increases in trial capacity
and related support staff necessitated by the drug crisis while
at the same time respecting other fiscal constraints on the
state. Id. ¶¶ 4-6. Section 375 was a reasonable method of
accomplishing these goals in the manner envisioned by the
Fiscal Committee on the Executive Budget. Id. Exh. B. See also
Kirshner v. United States, 603 F.2d 234, 239 (2d Cir. 1978) (no
Contract Clause violation where state's purpose in enacting
legislation modifying contract rights was to protect the fiscal
integrity of the City of New York), cert. denied, 442 U.S. 909,
99 S.Ct. 2821, 61 L.Ed.2d 274 (1979).
2. Due Process and Equal Protection Challenges
Plaintiffs contend that the lag payroll system violates the
Equal Protection clause
of the Fourteenth Amendment because Section 375 applies only
to nonjudicial employees of the Unified Court System.
Plaintiffs also appear to allege both substantive and
procedural due process violations.
Rational basis review applies to both the equal protection
and substantive due process claims. Since Section 375 neither
burdens fundamental constitutional rights nor creates a
suspect classification,*fn2 the statute need only be
rationally related to legitimate government objectives.
See Williamson v. Lee Optical Co., 348 U.S. 483, 491, 75 S.Ct.
461, 466, 99 L.Ed. 563 (1955); San Antonio Indep. School Dist.
v. Rodriguez, 411 U.S. 1, 40, 93 S.Ct. 1278, 1300-01, 36
L.Ed.2d 16 (1972). Having found the lag payroll provision both
reasonable and necessary under the Contract Clause, the Court
cannot say that Section 375 fails to satisfy the rational basis
The Court also fails to detect a violation of procedural due
process absent a showing by plaintiffs of clear entitlement
every second Wednesday to bi-weekly payment of salary for the
ten preceding work days. See S & D Maintenance Co. v. Goldin,
844 F.2d 962, 968-70 (2d Cir. 1988). Neither the computation
provisions of the collective bargaining agreements nor N Y
State Fin.Law § 200(1) create such an entitlement given their
dependency on legislative appropriations under N.Y.Civ.
Serv.Law § 204-a(1).
Because plaintiffs have failed to make the requisite
showing, plaintiffs' motion for preliminary injunctive relief
is denied. Because there exist no issues of fact plaintiffs'
motion for summary judgment is denied and defendants'
cross-motion is granted.
IT IS SO ORDERED.