Public employee unions can’t invoke the Triborough Amendment to preserve old pension plans that did not require employee contributions, the state Court of Appeals held in two cases this week. The rulings, favoring management in the cities of Yonkers and Oswego, were a solid win for taxpayers.

Firefighters unions in both cities were striving to preserve non-contributory pension benefits for employees hired after their contracts expired in 2009. In December 2009, Governor David Paterson signed a new Tier 5 pension law that eliminated non-contributory police and firefighter pension plans, requiring employees hired after January 10, 2010, to kick in 3 percent of their salaries to the New York State Police and Fire Retirement System. (The new plan, which was superseded succeeded last year by Tier 6, also limited “pensionable” overtime to 15 percent of regular pay.)

The city of Yonkers’ contract with its firefighters union had a long-standing clause requiring the city to enroll union members in a non-contributory plan. But the city insisted that firefighters hired after the contract expired in June 30, 2009, would have to belong to the contributory plan created by Tier 5, which is less expensive for taxpayers.

For unions with contracts still in effect as of 2009 and 2010, there was no question that any non-contributory pension clause remained in effect even after Tier 5 took effect. In the case of Yonkers, the union said the old contract language was preserved under the Triborough amendment, which generally says that contract terms are automatically extended after a contract expires. The city said the issue was not contractual and sought to block arbitration of the union’s claim.

In a 5-2 opinion handed down Tuesday, the Court of Appeals upheld an Appellate Division ruling that went against the union. Writing for the majority, Judge Eugene Pigott said “it was not the Legislature’s intent” to allow older pension plans to remain in effect under the Triborough Amendment.  He continued:

If the Legislature had intended to invoke the Triborough doctrine, it would certainly have made that explicit. Instead, the Legislature, having set forth the [Triborough] exception for CBAs [collective bargaining agreements] that are “in effect,” expressly states that eligibility to join a CBA’s retirement plan “shall not apply upon termination of such agreement” … This language makes clear that the Legislature did not intend to apply the exception to agreements that had expired and could only be deemed to continue through the Triborough Law.

This interpretation is further supported by the legislative history. Governor Paterson noted in a Program Bill Memorandum that Section 8 of the bill ensures “that members of an employee organization that are eligible to join a special retirement plan pursuant to a collectively negotiated agreement with any state or local government employers, would be able to continue to enroll in that special plan after the enactment of this bill, until the date on which such agreement terminated” … Again, the chosen language indicates that a non-contributory plan does not outlast the expiration of the CBA.

In Oswego, the city firefighters’ contract expired at the end of 2009, and the union had won an arbitration award requiring the city to keep firefighters hired after that date in a non-contributory plan.  Citing the reasoning in the Yonkers cases, the court overturned the arbitration award.

While the impact of the cases may appear limited, it also would affect any county or municipality that had employees working under an expired contract with a non-contributory pension clause when Tier 5 was enacted. Such clauses, pre-dating a 1973 state law barring collective bargaining of pension benefits, are found mainly in police and firefighter agreements. Lapses in effective dates of such contracts are not uncommon, especially in cases where disputes go to binding arbitration.

Chief Judge Jonathan Lippman dissented in both cases, favoring a broader reading of the Triborough amendment.  His dissent was joined by the newest member of the court, Judge Jenny Rivera, appointed a few months ago by Governor Andrew Cuomo.