In the Matter of the Application of Gene DeMartino, individually and as President of, LOCAL 376, DISTRICT COUNSEL 37, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO; THOMAS KATTOU; FLOYD NESFIELD; LUTHER LAWTON; PATRICK McFARLAND; ANTHONY MEZZACAPPA; DAVID COFFEY; and RICHARD GOSLIN, Petitioners, For an Order and Judgment Pursuant to Article 78 of the Civil Practice Law and Rules,
City of New York; MICHAEL BLOOMBERG, as Mayor of the CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES; EDNA WELLS HANDY, as Commissioner of the NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES; and JAMES HEIN, as Deputy Commissioner of the Division of Citywide Personnel of the NEW YORK CITY DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES, Respondents.
Lichten & Bright, P.C. By: Stuart Lichten, Esq. Attorneys for Petitioners.
Michael Cardozo Corporation Counsel of the City of New York By Maxwell Leighton, Esq. Attorneys for Respondents
Stroock, Stroock & Lavan, P.C. Amicus Curiae on behalf of Municipal Labor Committee By Dina Kolker, Esq. & Alan M. Klinger, Esq.
Manuel J. Mendez, J.
Upon a reading of the foregoing cited papers, it is ordered and adjudged that this Article 78 petition is granted, Personnel Orders No. 2012/1 and 2012/2 dated April 11, 2012 are annulled.
Respondents' administrative actions resulted in Personnel Orders No. 2012/1 and 2012/2 dated April 11, 2012, which approve and result in an amendment to Rule X of the Personnel Rules and Regulations of the City of New York. The amendments to Rule X, reclassify 106 ungraded prevailing rate titles into fourteen (14) new occupational titles, with four grade levels within each service classification affecting salaries and benefits. Petitioners pursuant to Labor Law §220, engaged in prevailing wage bargaining as ungraded civil service titles. They had entered into consent orders with the Comptroller of the City of New York, which expired prior to the amendment to Rule X. Petitioners seek judicial review of the administrative action and to annul Personnel Orders No. 2012/1 and 2012/2, claiming the determinations were unilateral, arbitrary and capricious, in violation of Labor Law §220, and the reclassification provisions of New York Civil Service Law §20.
An administrative decision will withstand judicial scrutiny if it is supported by substantial evidence, has a rational basis and is not arbitrary and capricious (Matter of Pell v. Board of Education, 34 N.Y.2d 222, 356 N.Y.S.2d 833, 313 N.E.2d 321 ). Deference is generally given to an administrative agency's decision, however, a decision that, "runs counter to the clear wording of a statutory provision, should not be given any weight" (Metropolitan Movers Ass'n, Inc. v. Liu, 95 A.D.3d 596, 944 N.Y.S.2d 529 [N.Y.A.D. 1st Dept., 2012] citing to Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270 918 N.E.2d 900, 890 N.Y.S.2d 388 ).
The legislative intent of Labor Law § 220, is to impose upon the state and municipal corporations the same obligations of paying the prevailing rate of wages to laborers, workmen and mechanics employed in public works, in ungraded or noncompetitive employment as private employers (Gaston v. Taylor, 274 NY 359, 9 N.E.2d 9 ). The scope of obligation under Labor Law §220, is for the state to hold its territorial subdivisions to a standard of social justice for dealing with laborers, workmen and mechanics (Austin v. City of New York, 258 NY 113, 179 N.E. 313 ). Labor Law §220, is to be construed, "with the liberality needed to carry out its beneficent purposes..." (Bucci v. Village of Port Chester, 22 N.Y.2d 195, supra). Salary based grading of titles is used to establish the type and quality of work performed based on merit and to avoid automatic promotion. Salary fixation is ineffectual where there is no valid classification (Corrigan v. Joseph, 304 NY 172, 106 N.E.2d 593  rearg. denied, 304 NY 759, 108 N.E.2d 618 ).
A reclassification of titles is lawful, "...where it conforms the civil service structure to the situation which actually existed in operation of the agency prior to the reclassification..." (Joyce v. Ortiz, 108 A.D.2d 158, 487 N.Y.S.2d 746 [N.Y.A.D. 1st Dept., 1985]). A civil service title may be abolished in good faith based on economy and efficiency, but not as subterfuge for avoiding statutory protections provided to civil servants (Matter of Hartman v. Erie 1 BOCES Bd. of Educ., 204 A.D.2d 1037, 614 N.Y.S.2d 90 [N.Y.A.D. 4th Dept., 1994] and Gorman v. Von Essen, 294 A.D.2d 209, 742 N.Y.S.2d 235 [N.Y.A.D. 1st Dept., 2002]). Reclassification is not to be used as a means of circumventing the constitutional mandates for appointment to a civil service title or validating out of title work (Matter of CSEA v. County of Duchess, 6 A.D.3d 701, 775 N.Y.S.2d 539 [N.Y.A.D. 2nd Dept., 2004] and Criscolo v. Vagianelis, 50 A.D.3d 1283, 856 N.Y.S.2d 265 [N.Y.A.D. 3rd Dept., 2008]).
The New York State Constitution, Article V, section 6, requires that appointments and promotions made in the Civil Service be based on merit and fitness, which to the extent it is practicable, is to be ascertained by competitive examination. Civil Service Law §20 requires notice, hearing, and approvals to promote consistency and state-wide adherence to the constitutional provisions of Article V, Section 6 (Office of the Attorney General Formal Opinion No. 98-F3, 1998 NY Op. Atty. Gen. 8, citing to Klipp v. New York State Civ. Serv. Commn., 42 Misc.2d 35, 247 N.Y.S.2d 632 [Sup. Ct. Suffolk Co., 1964], aff'd, 22 A.D.2d 854 [N.Y.A.D. 2nd Dept., 1964], affd 15 N.Y.2d 880 ). Reclassification can only be accomplished in the manner set forth in Civil Service Law §20, which requires notice, a hearing, review and approval by the State Civil Service Commission. There is no merit to the contention that the New York City Charter in conjunction with Civil Service Law §20, exempts the procedural mandates of Civil Service Law §20 (Joyce v. Ortiz, 108 A.D.2d 158, supra).
Petitioners claim that Personnel Orders No. 2012/1 and 2012/2 are the result of unilateral actions taken by the respondents to classify ungraded civil service titles which are subject to Labor Law §220 application of prevailing rate wages and supplemental benefits. Petitioners have engaged in prevailing wage collective bargaining in a manner that has been established for over 100 years, as part of the bargaining process they entered into Consent Orders with the City Comptroller. After the most recent Consent Orders expired, the respondents acted by effectively deleting their classifications and reclassified the 106 ungraded prevailing rate titles affecting approximately 10, 000 employees into fourteen (14) new "Maintenance and Operation Services" titles. Personnel Orders No. 2012/1 and 2012/2 were adopted and immediately made effective after the Mayor's signature, altering many of the provisions of the Consent Orders. Petitioners' claim that respondents' reclassification is arbitrary and capricious because it massively restructures the classification system without any effort to comply with either the provisions of Labor Law §220, or the requirements of Civil Service Law §20 regarding notice, public hearings, and approval from the New York State Civil Service Commission.
Respondents oppose the petition claiming that they complied with Civil Service Law § 20  when they allocated titles within a salary grade construct because they did not change a jurisdictional classification. They claim that Civil Service Law § 20 only applies when a title is changed from competitive to noncompetitive or exempt class. Respondents claim that the Department of Citywide Administrative Services (DCAS) has authority to act as a municipal civil service commission pursuant to the New York City Charter, to review salaries and titles, grade and classify them, and remove them from the scope of Labor Law §220, subject to the Mayor's approval. Respondents state that the regrading removes the prevailing rate titles from the scope of Labor Law §220. They claim that the grading of competitive class titles was rational because it is within the City's managerial prerogative, therefore notice, public hearings and New York State Civil Service Commission approval are not required.
DCAS conducted an investigation without consulting the Comptroller's Office, the State Civil Service Commission, or conducting a hearing. DCAS determined that the prevailing rate applicable to petitioners' titles through negotiations conducted by the Comptroller's Office resulted in inequitably high salaries, and should be replaced with competitive titles which would then be negotiated through the collective bargaining process under the New York City Collective Bargaining Law (NYCCBL). DCAS conceded that some of the positions were seasonal in nature, but determined that because they are filled on "a full time, per annum basis, " the prevailing wage for seasonal work in the private sector was lower (Verified Ans., Exh. A, p. 2). DCAS based the new titles on graded salary plans for public sector employees that it determined were similar, in the Federal and New York Metropolitan Area.
The DCAS memorandum dated April 3, 2012, under "Subject: Proposal:" states, "In the Competitive Class, Rule X: (1) reclassify all titles under the Skilled Craftsman and Operative Service, Part  into one of the following new occupational services..." (Verified Ans., Exh. A). The Skilled Craftsman and Operative Service titles were on DCAS's recommendation reclassified into fourteen (14) new "Maintenance and Operation Services" titles, with four grades in each title designated as, "(I) helper/entry level, (II) journey-level, (III) supervisor and (IV)supervising supervisor." Personnel Order No. 2012/1 lists the new titles and provides the maximum and minimum allotted salary under each grade. Certain grades within all titles have no stated salary provisions. In the "Press Operation Service Pay Plan, " and "Equipment Operation Service Pay Plan, " only the "journey level" grade has a maximum and minimum salary provision, the other grades are listed as "n/a." (Verified Ans., Exh. B). With the exception of the Electrical Service Pay ...