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A10425 Summary:

BILL NOA10425
 
SAME ASSAME AS S09347
 
SPONSORRules (Abbate)
 
COSPNSRSillitti, Englebright, Thiele, Braunstein, Jones, Colton, Gunther, Otis, Burdick, Santabarbara, Abinanti, Dinowitz, Griffin, Lavine, Woerner, Stern, Jean-Pierre, Stirpe, Ra
 
MLTSPNSR
 
Add §157-a, Civ Serv L; add §702-c, Lab L
 
Provides that extrinsic evidence shall be admissible to determine whether certain health insurance benefits are intended to vest beyond the term of a collective bargaining agreement.
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A10425 Actions:

BILL NOA10425
 
05/18/2022referred to governmental employees
05/25/2022reported referred to rules
05/31/2022reported
05/31/2022rules report cal.513
05/31/2022ordered to third reading rules cal.513
06/01/2022passed assembly
06/01/2022delivered to senate
06/01/2022REFERRED TO RULES
06/01/2022SUBSTITUTED FOR S9347
06/01/20223RD READING CAL.1826
06/01/2022PASSED SENATE
06/01/2022RETURNED TO ASSEMBLY
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A10425 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10425
 
SPONSOR: Rules (Abbate)
  TITLE OF BILL: An act to amend the civil service law and the labor law, in relation to clarifying the vesting of retiree health insurance within collective bargaining agreements   SUMMARY OF PROVISIONS: § 1 - Adds language to the civil service law to allow employee organiza- tions to use extrinsic evidence to determine intent for retiree health insurance during contract negotiations. § 2 - Adds language to the labor law to allow employee organizations to use extrinsic evidence to determine intent for retiree health insurance during contract negotiations. § 3 - Effective date.   JUSTIFICATION: For over thirty years, the federal courts considered retiree health insurance in the context of ongoing collective bargaining relationships and would infer that the parties intended to vest retiree health insur- ance on retirees for life, especially when eligibility for retiree health insurance was associated with eligibility for pension benefits, reasoning that otherwise, if the benefit lasted only for the durational term of the collective bargaining agreement, typically three years, the retiree health insurance benefit would be illusory. This standard is best known from the case of Yard Man and became known as a Yard-Man inference. International Union, UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983). In 2015, however, in the case of Tackett, the United States Supreme Court abrogated Yard-Man, holding that the courts could not make such inferences, and that a collective bargaining, like any other contract, needed to be explicit about the duration and scope of retiree health insurance benefits and the federal courts could not infer from the ongo- ing collective bargaining relationship that retiree health insurance benefits vested on retirees beyond the durational term of the collective bargaining agreements and, further, that courts could only consider extrinsic evidence of the parties' intent if the agreement was on its face ambiguous. M & G Polymers USA, LLC v. Tackett, 574 U.S. 427 (2015). Moreover, extrinsic evidence, according to the court, could not be used to show that the agreement was ambiguous as to whether retiree health insurance vested for life. Id. In 2014, the New York State Court of Appeals had declined to address the issue in the case of Kolbe v. Tibbetts, 22 N.Y.3d 344 (2013), holding that the collective bargaining agreement under review in that case, in fact, contained explicit terms showing that the retiree health insurance benefit was to vest on retirees beyond the durational term of the agree- ment. But the issue was put squarely before the New York Court of Appeals by certified question of the United States Court of Appeals for the Second Circuit in Donohue v. Cuomo, 980 F..3d 53 (2020). In answering the question, the New York Court of Appeals agreed with the United States Supreme Court in Tackett and rejected the use of Yard-Man inferences, holding that collective bargaining agreements must be explicit in making retiree health insurance vest for life, or be sufficiently ambiguous on their face to allow for the consideration of extrinsic evidence on that point, but that extrinsic evidence was not admissible to show that the agreement was ambiguous. Donohue v. Cuomo, --- N.E.3d ---- (February 10, 2022). Based on the New York Court of Appeals' answer to its certi- fied question, the United States Court of Appeals for the Second Circuit, which includes New York, held that held that CSEA's collective bargaining agreements with the State did not vest retiree health insur- ance beyond the duration of the CBAs, even though the CBA's use of terms such as: "Employees covered by the State Health Insurance Plan have the right to retain health insurance after retirement upon completion of ten years of service;" "An employee who is eligible to continue health insurance coverage upon retirement is entitled to a sick leave credit to be used to defray any employee contribution toward the cost of the premium ( with the calculation based on "the actuarial equivalent in monthly installments for the remaining life expectancy of such retired employee" under Civil Service Law § 167);" "The State has the right to make prospective changes to the percentage of credit to be available under this alternative method for future retirees...;" and "An employee retiring from State service may delay commencement or suspend his/her retiree health coverage and the use of the employee's sick leave conver- sion credits indefinitely." Donohue v. Hochul, No. 18-3193-cv (April 27, 2022). According to the courts, none of these terms, or others like them in the agreements, either singly or in combination were enough to make the terms ambiguous, let alone clearly establish that the retiree health benefit vested for life, notwithstanding that the State, in fact, paid the benefit for life. As a result of this upending of established law, decades' worth of collective bargaining agreements in New York, agreements negotiated when Yard-Man inferences were the rule, are now open to question by employ- ers, notwithstanding that at the time they negotiated the agreements, the intent on both sides of the negotiating table was that the benefit vested for life. The parties' intent has not changed, rather the law of evidence has changed, opening a legal loophole that might be used to deny labor and employee organizations the benefit of their bargain, leave retiree health insurance in a state of uncertainty, and strip retirees of the health insurance benefits they relied upon. This bill simply would address the holdings in the Donohue cases and put the parties back exactly where they were before the Donohue decisions and allow extrinsic evidence to be admitted by the court or other forum to determine whether the parties intended retiree health insurance to vest beyond the durational limits of the CBA and to what extent and scope. Otherwise, the benefit would be illusory and employee organiza- tions and labor organizations would not get the benefit of their bargains.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None noted.   EFFECTIVE DATE: Immediately.
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A10425 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10425
 
                   IN ASSEMBLY
 
                                      May 18, 2022
                                       ___________
 
        Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Abbate) --
          read once and referred to the Committee on Governmental Employees
 
        AN ACT to amend the civil service law and the labor law, in relation  to
          clarifying  the  vesting of retiree health insurance within collective
          bargaining agreements
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  The  civil service law is amended by adding a new section
     2  157-a to read as follows:
     3    § 157-a. Admissibility of extrinsic evidence in cases related to reti-
     4  ree health insurance. Whenever a collective bargaining agreement between
     5  an employee organization and a public employer, as those terms are  used
     6  in  this  chapter,  refers  to  a  health  insurance benefit for retired
     7  employees, extrinsic evidence shall be admissible and the court or other
     8  forum may consider such evidence to determine  whether  the  parties  to
     9  that  agreement  intended  for  that retiree health insurance benefit to
    10  vest in the retirees  beyond  the  durational  term  of  the  collective
    11  bargaining agreement and, if so, to what extent and scope.
    12    § 2. The labor law is amended by adding a new section 702-c to read as
    13  follows:
    14    §  702-c.    Admissibility  of  extrinsic evidence in cases related to
    15  retiree health insurance. Whenever  a  collective  bargaining  agreement
    16  between  a  labor organization and an employer refers to a health insur-
    17  ance benefit for retired employees, extrinsic evidence shall be admissi-
    18  ble and the court or other forum may consider such evidence to determine
    19  whether the parties to that agreement intended for that  retiree  health
    20  insurance  benefit to vest in the retirees beyond the durational term of
    21  the collective bargaining agreement and,  if  so,  to  what  extent  and
    22  scope.
    23    § 3. This act shall take effect immediately.
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15793-01-2
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