Retiree Health Care Grievance Is Arbitrable

The collective bargaining agreement between the Town of Orchard Park, New York and the Orchard Park Police Benevolent Association calls for the Town to provide some retiree health care benefits. When the Town announced it intended to change retiree health care benefits, the Association filed a grievance on behalf of affected retired members protesting the change in coverage, and sought to enjoin the Town from changing the coverage pending the result of the grievance process. The Town responded that the retired members were no longer members of the Association, and thus had no right to file a grievance or to seek arbitration.

A New York appeals court ordered the Town to proceed with arbitration. The Court recounted the standards in New York used to determine the arbitrability of a grievance: “In determining whether a claim is arbitrable in the public sector, courts must conduct a two-step inquiry. First, a court must determine whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance. Second, if there is no such prohibition against arbitrating the grievance at issue, then a court must determine whether such authority was in fact exercised and whether the parties did agree by the terms of their particular arbitration clause to refer their differences in this specific area to arbitration.”

The Court found that both tests were satisfied, and the grievance should be arbitrated: “Here, there is no question that the first part of the inquiry was satisfied. With respect to the second part of the inquiry, the fact that the retirees are not members of the PBA or represented by it in collective bargaining negotiations is not determinative in a threshold arbitrability analysis. Rather, issues concerning the PBA’s relationship to retired employees, issues concerning whether retirees are covered by the grievance procedure, and issues concerning whether the clauses of the contract support the grievance are matters involving the scope of the substantive contractual provisions and, as such, are for the arbitrator. We note in addition that New York’s public policy encourages arbitration of labor disputes involving public employees.”

Mariano v. Town of Orchard Park, 2012 WL 414587 (A.D. 2012).