In Split Decision, New York Court Holds That Clause Prohibiting ‘Layoffs’ Does Not Prohibit Employer From Abolishing Firefighter Positions And Laying Off Employees

In a 4-3 decision, New York’s highest court, the Court of Appeals, has held that a “no-layoff” clause in a collective bargaining agreement was not specific enough to be enforced. The clause appeared in the collective bargaining agreement between the Village of Johnson City and the Johnson City Professional Fire Fighters, Local 921. The clause read: “The Village shall not lay off any member of the bargaining unit during the term of the contract.” During the contract, the Village voted to abolish six firefighter positions, citing budgetary necessity, resulting in the loss of firefighter jobs. When a dispute arose over whether Local 921’s grievance challenging the Village’s actions was subject to arbitration, the dispute wound up in the Court of Appeals.

The Court found that, “contrary to the Union’s contention, the no-layoff clause in this CBA is not arbitrable because it is not explicit, unambiguous and comprehensive. 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 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.

“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.

“Simply put, because the clause is not explicit, unambiguous and comprehensive, there is nothing for the Union to grieve or for an arbitrator to decide. Having concluded that this dispute is not arbitrable for reasons of public policy, we need not reach the issue of whether the parties agreed to arbitrate.”

The three dissenting judges argued that “a plain reading of that provision indicates that the Union negotiated to ensure that its constituents need not fear being put out of their firefighting jobs during the life of the CBA. 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.”

In re Arbitration between Johnson City Professional Firefighters Local 921, 2011 WL 5570767 (N.Y. 2011).

This article appears in the February 2012 issue.