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Port Authority of New York and New Jersey v. Port Authority Police Lieutenants Benevolent Ass'n

Supreme Court of New York, New York County

June 14, 2013

Application of the PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Petitioner, For an Order Pursuant to Article 75 of the Civil Practice Law and Rules Vacating an Arbitration Opinion and Award of a Certain Controversy,

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

Toby J. Russell, Esq., Witham & Kozan, P.A. by Craig Kozan, Esq., attorney for petitioner.


In this Article 75 proceeding, petitioner The Port Authority of New York and New Jersey (Port Authority) petitions this court to modify an award rendered after arbitration with respondent The Port Authority Police Lieutenants Benevolent Association (LBA). LBA cross-petitions, pursuant to CPLR 7511, to confirm the award.

I. Background

The LBA is a labor organization representing certain police lieutenants employed by the Port Authority. The parties' relationship has been governed by a series of Memoranda of Agreement (MOA) dating back to 1985. The MOA in question, entered into in April 2005, and effective January 21, 2003 to January 20, 2010, contains a " Savings Clause," which provides that wages, benefits and conditions of employment " shall remain in full force and effect until a new Memorandum of Agreement is executed." Article LXII, at 62.

Article XXXI of the MOA provides that persons covered by the MOA will receive Port Authority passes pursuant to Port Authority Instructions (PAI) 40-1.01. MOA, Document L, at 313. PAI 40-1.01 provides for distribution of free passes for " permanent and project employees, retired employees, and employees on military leave for use at tunnels, bridges and some air terminals." Id. Thus, under all of the MOAs since at least 1985, and up to the MOA in issue, provision is made for free passes, presently in the form of E-Z Passes, for retired Port Authority lieutenants.

Due to budget constraints, the Port Authority, in a December 2010 letter by its terms effective January 1, 2011, discontinued the E-Z Pass program applicable to all Port Authority retirees. As a result, the LBA filed a grievance under the arbitration provision in the MOA (Article XXII, at 35), claiming that the Port Authority had violated the MOA by discontinuing the program for retirees.

A hearing was held before an arbitrator, Howard C. Edelman (the Arbitrator) on April 23, 2012. The Arbitrator duly found in the LBA's favor, in an award (Award), dated September 12, 2012, in which he ruled that the Port Authority had " violated the Collective Bargaining Agreement by discontinuing on or about December 2011 free passage and parking for retirees of the bargaining unit." Amended Petition, Ex. D, Award, at 25. The Arbitrator ordered the Port Authority to reinstate the free passage and parking, and reimburse retirees for the monies they had expended on passage and parking since the program was terminated.

As stressed by the Port Authority, the MOA arbitration provision specifies that:

[t]he arbitrator shall not have the power to add to, subtract from or modify the provisions of the [MOA] and shall confine his decision solely to the interpretation and application of the [MOA]. He shall confine himself to the precise issue presented to him and shall have no authority to determine any issues not so presented to him nor shall he submit observations or declarations of opinion which are not essential in reaching the determination.

MOA, Appendix G, at 180.

The issue, as framed by the Arbitrator, was as follows:

Is the grievance substantively arbitrable?
If so, did the Employer violated [sic] the Collective Bargaining Agreement (" MOA" ) by discontinuing on or about December 2010 or January 2011 free passage and parking at Port Authority facilities for retirees of the bargaining unit?
If so, what shall the remedy be?

Award, at 3.

According to the Port Authority, the Arbitrator exceeded his powers in ruling that free passage should be applicable to all LBA retirees, because the issue before the Arbitrator was limited to retirees under " the" MOA (presumably the 2003-2010 MOA), so that it was error to apply his ruling to all LBA retirees, under all the previously " expired" MOAs, instead of just the retirees covered by the 2003-2010 MOA. As a result, the Port Authority argues that the Arbitrator impermissively rewrote the MOA to include people not covered thereunder, and seeks to modify the Award to apply only to those employees who retired under the 2003-2010 MOA.

The court notes that the Arbitrator acknowledged this argument in the Award. Award, at 12. However, he found that, under the previously mentioned Savings Clause, " all clauses of the contract ... continue in full force and effect' after the expiration of the MOA," and that Article XXXI " requires the continuation of the retiree benefit in question pursuant to [PAI 40-1.01]." Id. at 23. He concludes that " there can be no doubt that the benefit continues until the parties modify it in collective bargaining." Id.

II. Discussion

At issue is whether the Arbitrator exceeded his power by including pre-2003 retirees in the award where the arbitration was conducted pursuant to the 2003-2010 MOA.

Under CPLR 7511(b)(1)(iii), an arbitration award may be modified or vacated if the arbitrator " exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made." However, " [i]t is a bedrock principle of arbitration law that the scope of judicial review of an arbitration proceeding is extremely limited. Indeed, courts are reluctant to disturb the decisions of arbitrators lest the value of this method of resolving controversies be undermined [internal quotation marks and citations omitted]." Frankel v. Sardis, 76 A.D.3d 136, 139 (1st Dept 2010). An arbitration award will not be disturbed unless it is shown to be " violative of a strong public policy, is totally irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power." Matter of Town of Calicoon (Civil Service Employees Assn., Inc., Town of Calicoon Unit), 70 N.Y.2d 907, 909 (1987); see also Siu Chuen Chan v. Continental Broker-Dealer Corp., 1 A.D.3d 297 (1st Dept 2003).

An arbitrator exceeds his or her power by giving " a totally irrational construction to the contractual provisions in dispute," so as to effectively rewrite the parties' contract. Matter of Riverbay Corp. (Local 32-E, S.E.I.V. AFL-CIO), 91 A.D.2d 509, 510 (1st Dept 1982); see also New Rochelle Police Superior Officers Assn., Inc. v. City of New Rochelle, 33 A.D.3d 683 (2d Dept 2006)(arbitrator may not interpret contract to provide a benefit which was not negotiated between the parties).

This court finds that the Arbitrator did not exceed his powers, or rewrite the parties' agreement, when he found that the right to free E-Z Passes and parking applied to more than just retirees who had retired under the 2003-2010 MOA, based on language in the MOA which retained the right of retirees from previous MOAs to receive these benefits. It has already been determined that the Savings Clauses in all prior MOAs had continued the right vested in LBA retirees to rely on the MOA under which they retired until the next MOA was executed. Each MOA, including the 2003-2010, explains that the MOA in question applies to enumerated employees, as set forth in Port Authority Job Specifications long predating the current MOA. MOA, Article I, at 1. Article LXII provides for passes for employees covered under the MOA, pursuant to PAI 40-1.01. PAI 40-1.01 applies to enumerated employee retirees, bringing the right to passes into each new MOA. Thus, each new MOA has been written to apply to all past retirees, at least as to free passes. The right has continued through each successive MOA. The new MOA did not extinguish this right as to employees retiring under previous MOAs. And, as the Arbitrator noted, it will take a new Collective Bargaining Agreement and MOA to end free passes for LBA's members, past and present. Consequently, the Arbitrator's Award is not " totally irrational." See Matter of Riverbay Corp. (Local 32-E, S.E.I.V., AFL- CIO), 91 A.D.2d at 510.

In reaching this determination, this court is cognizant of the opinion and award in an internal arbitration proceeding entitled Matter of The Port Authority Detectives Endowment Association, Inc. v. The Port Authority of New York and New Jersey, (Case No. 13 300 1 00655555 11, Grievance No. ID-11 [DEA] )( Matter of Detectives Endowment Association )(Notice of Cross Petition, Ex. O), in which an arbitrator, faced with similar contract language as contained in the 2003-2010 MOA at issue herein, determined that the right of union members to continue to obtain E-Z passes in retirement was sanctioned under the MOA.

Specifically, the arbitrator in Matter of Detectives Endowment Association found that " [e]ach successor Memorandum of Agreement contained in the record constitutes an extension, re-affirmation, and reiteration of the vested rights of retirees from the bargaining unit to the disputed benefits." Id. at 26. The arbitrator continues that, " [t]he lack of any lapse in coverage of the disputed benefits underscores that the parties deliberately, intentionally, and knowingly bilaterally provided the disputed benefits on a permanent basis to retirees from the bargaining unit."

In this matter, the Arbitrator's construction of the applicable MOA to continue the benefits enjoyed by prior LBA retirees is not so irrational as to re-write the parties' agreement.

III. Conclusion

Because the present MOA preserved the rights retirees obtained under previous MOAs, the Arbitrator was not acting irrationally or exceeding his powers when he applied his ruling to past LBA retirees.

Accordingly, it is

ORDERED and ADJUDGED that the petition brought by petitioner The Port Authority of New York and New Jersey to modify the arbitration award, dated September 12, 2012, is denied; and it is

ORDERED and ADJUDGED that the cross-petition brought by The Port Authority Police Lieutenants Benevolent Association to confirm the award is granted, and the award is confirmed.

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