United States: Matters of Interest - Constitutional Amendment By Legislative Referral: How Public Pensions Could Be Affected


This coming November, New York voters will find a referendum on the ballot on whether there should be a Constitutional Convention to amend the New York State Constitution. Proponents of the Constitutional Convention often cite ethics reform for elected officials as a reason for a Convention. There is a less familiar avenue in New York for constitutional amendment – the Legislative Referral process, under which the Senate and Assembly may propose an amendment to the Constitution without the need for a convention, provided certain conditions are met. This article discusses how the Senate and the Assembly followed the Legislative Referral process during the 2016 Legislative Session, when each passed an amendment relating to public pensions of public officers, and the potential implications of that amendment for public employee unions in New York.

The Legislative Referral Process

Article XIX, Section 1 of the New York State Constitution provides that the Senate and Assembly may propose an amendment to the Constitution without need of a convention, provided certain conditions are met.

  • First, the Attorney General must render an opinion, in writing, to the Legislature as to the effect the proposed amendment may have upon other provisions of the Constitution.
  • If upon receiving this opinion, the majority of the members elected to each of the two houses agree to the amendment, as proposed, the vote shall be entered into their respective journals, the proposed amendment is published for three months and then referred to the next regular legislative session.
  • If, in the following legislative session, the proposed amendment is agreed to by a majority of members of each house, then it "shall be the duty of the legislature to submit [the] proposed amendment...to the people for approval, in such manner and at such times as the legislature shall prescribe."1
  • If the majority of those voting on the amendment ratify the amendment, it "shall become part of the constitution on the first day of January [following] such approval."2

Following that process, during the 2016 Legislative Session, the Senate and the Assembly each passed an amendment relating to public pensions of public officers. The proposed amendment defines "public officer" as

(i) an official filling an elected office within the state; (ii) a holder of office filled by direct appointment by the governor of this state, either upon or without senate confirmation; (iii) a county, city, town or village administrator, manager or equivalent position; (iv) the head or heads of any state or local government department, division, board, commission, bureau, public benefit corporation, or public authority of this state who are vested with authority, direction and control over such department, division, board, commission, bureau, public benefit corporation or public authority; (v) the chief fiscal officer or treasurer of any municipal corporation or political subdivision of the state; (vi) a judge or justice of the unified court system; and (vii) a legislative, executive or judicial employee of this state who directly assists in the formulation of legislation, rules, regulations, policy or judicial decision-making and who is designated as a policymaker as set forth in statute.3

This type of permissible impairment or revocation of public pensions would be an exception to the constitutional protection of public employees from diminution or impairment contained in Article V, Section 7 of the New York State Constitution, generally referred to as the Nonimpairment Clause. Although the iteration of the proposed amendment making the most progress is limited to higher-ranking officials and judicial officers, other bills have been introduced with broader applicability to public employees at every level of government.4

The proposed amendment provides that a public officer who is convicted of a felony that is directly and actually related to the performance of the public officer's duties, may have his or her pension reduced or revoked, following notice and a hearing by an appropriate court.5 In making the determination to reduce or revoke the pension, the amendment would require that the court consider several factors, including the severity of the crime and whether the forfeiture, if any, would result in undue hardship or other inequity upon dependent children, spouse or other dependents.6

In accordance with the New York State Constitution, this same amendment has again been introduced and approved in both the Senate and Assembly during this current legislative session.7 The Attorney General's opinion on the bill has been referred to the Judiciary Committee and could possibly be put to the voters for ratification as early as this coming November.

If the amendment makes its way on to the ballot in November, it will be presented to voters side-by-side with the ballot question on whether a Constitutional Convention should be convened. Although a similar amendment could be achieved through the convention process, once approved, a convention cannot be prospectively limited to topics such as ethics by those voting for it. The scope of any proposed changes would be determined by the delegates to the convention. Thus, the availability of this circumscribed potential constitutional ethics reform may show a way to undermine those who claim that a convention is necessary to address the ethical issues in Albany.

Paid Family Leave: Balancing Cost With Benefit

Consistent with the national trend towards expanding paid family leave for employees, Mayor de Blasio issued a Personnel Order in 2016 that provided six-weeks' paid parental leave for maternity, paternity, adoption or foster care to approximately 20,000 New York City non-unionized management employees.8 In an effort to cover the costs of this new benefit (although some have questioned whether the costing was too high), with a goal of avoiding additional costs to taxpayers, Mayor de Blasio eliminated a 0.47% pay increase that was to become effective in July 2017 (pursuant to Personnel Orders 2015/1 and 2015/2) and capped vacation time at 25 days, effectively reducing by two days the number of vacation days to which senior managers were previously entitled.9

Subsequently, a suit against Mayor de Blasio and other city officials by a group of senior managers alleged that the decision to eliminate the pay raise and two days of annual leave to cover a new paid parental leave program not only amounted to a breach of contract but also unconstitutionally impaired their pension benefits and amounted to discriminatory treatment on the basis of age.10 Wasyl Kinach, et al. v. Bill de Blasio, et al., was dismissed in November 2016. The court held that neither the Personnel Orders nor the Time and Leave Manuals created contractual rights preventing the City from modifying its policies. The court also held that there was no support for the petitioners' claims that the action violated either the equal protection clause or nonimpairment clauses of the state or federal constitutions. Petitioners have filed a notice of appeal.

Similarly, in April 2016, the New York State Legislature enacted the New York Paid Family Leave Act. The Act, which becomes effective on January 1, 2018, provides up to eight weeks of paid leave at 50% of pay (not to exceed 50% of the state's average weekly rate), gradually increasing to 12 weeks of paid leave at 67% of pay (not to exceed 67% of the state's average weekly rate) in 2021. Employers are not required to fund any portion of the family leave benefit. Rather, the benefit is paid through employee contributions via payroll deductions scheduled to begin on July 1, 2017. The maximum employee contribution will be set by the superintendent of financial services on or before June 1, 2017. It is expected to be a modest contribution, estimated at approximately $1.00 per week, a cost seemingly much lower than that charged by the City to its non-unionized management employees.

Although not automatically applicable to unions, the New York State Paid Family Leave Act provides that the State, any political subdivision of the State, a public authority or any other governmental agency or instrumentality may elect to become a covered employer and that a municipal union, as part of the collective bargaining process, may opt into the paid family leave benefit on behalf of those employees it represents. In negotiating inclusion in this benefit, unions are well advised to include a fair costing as part of the bargaining discussions. Whereas unrepresented management employees are subject to the one-sided calculation of their employer, unions negotiating on behalf of members can ensure the cost of the new benefit is appropriate for the benefit received and not unduly burdensome on any segment of their population.

Teaching Assistants Earn Right to Unionize

In Trustees of Columbia University in the City of New York and Graduate Workers of Columbia-GWC, UAW, the National Labor Relations Board ("NLRB") found that students who perform work at the direction of their university, for which they are compensated, are statutory employees and, therefore, protected by the National Labor Relations Act ("NLRA"), including in their right to organize around issues of workplace concern.11 This Decision and Order overturned a 2004 determination, in which the NLRB found that graduate students cannot be statutory employees as they are "primarily students and have a primarily educational, not economic, relationship with their university."12

In reversing its earlier determination, the NLRB looked to the definition of "employee" under the NLRA, which includes "any employee" subject only to certain specified exceptions, none of which applied here.13 Although the NLRA does not provide a more comprehensive definition of the term "employee," it is well established that when a statute does not define the term employee, courts are to look to the established meaning of the word, as in common-law agency.14 Indeed, the Supreme Court has endorsed this approach by the NLRB, accepting an expansive reading of the language in the NLRA.15

The NLRB also looked to the goals of federal labor policy, namely to "encourag[e] the practice and procedure of collective bargaining" and to protect workers' "full freedom" to express a choice regarding representation.16 Unlike the NLRB in Brown, here the NLRB found that permitting student assistants to bargain over wages, hours and other terms and conditions of employment in no way infringed upon traditional academic freedoms, which only invokes the content of speech in the classroom.17 Again, the Supreme Court has implicitly endorsed this view by upholding the NLRB's authority to exercise jurisdiction over faculty at private universities.18

The NLRB's decision applies only to private colleges and universities. The right of student assistants, or other student "employees," in public colleges and universities to organize is determined by state labor laws. In New York, student employees at public colleges and universities already have this right.19 The NLRB's decision in Columbia University, however, may shed more light on this right and may result in the ability of students at public colleges and universities in other states to exercise the same right.

1 New York State Constitution, Article XIX, Section 1.

2 Id.

3 S-8163, Senate Reg. Sess. (2016); A.-10739, Assembly Reg. Sess. (2016).

4 See, e.g., S-3147, Senate Reg. Sess. (2017)/A-3316, Assembly Reg. Sess. (2017) (providing that any elected official who is convicted of a felony offense against public administration that occurred during their time in office shall forfeit rights to their benefits earned while in such office); A-2885, Concurrent Resolution of Senate and Assembly (2017) (providing any elected official or officer of the state or of a civil division may be subject to impairment of his or her pension if the member is "convicted of any felony offenses as defined by state or federal law and when that offense was directly related to assigned duties..."); S-661, Concurrent Resolution of Senate and Assembly (2017) (providing any pension of any public official (term not defined) "shall be forfeited if he or she is convicted of, or pleads in any manner to, any crime or offense involving the breach of public trust.").

5 Id.

6 Id.

7 S-418, Senate Reg. Sess. (2017); A-1749, Assembly Reg. Sess. (2017).

8 Mayor's Personnel Order, 2016/1 (January 7, 2016), Section I.

9 Mayor's Personnel Order, Sections II and III.

10 Wasyl Kinach, et al. v. Bill de Blasio, et al., Case No. 153833/16 (Sup. Ct. N.Y Cty.), Verified Petition ("Ver. Pet."), ¶¶ 22, 34, 39 and 41-46.

11 NLRB, Case 02-RC-143012 (August 23, 2016).

12 Brown University, 342 NLRB 483, 487 (2004).

13 Columbia University, Case 02-RC-143012, at 4.

14 Id., at 5.

15 See NLRB v. Town & Country Elec., 516 U.S. 85, at 94 (1995) (holding common law principles supported the NLRB's determination that paid union organizers were "employees" under the NLRA); Sure Tam, Inc. v. NLRB, 467 U.S. 883, 892 (1984) (observing that extending coverage of the NLRA to undocumented aliens is consistent with the NLRA's purpose of encouraging and protecting the collective bargaining process).

16 Columbia University, Case 02-RC-143012, at 7.

17 Id., at 7-8.

18 NLRB v. Yeshiva University, 444 US 672, at 690, fn 31 (1980) (observing that not all university faculty members will be managerial employees and that "professors may not be excluded [from statutory coverage] merely because they determine the content of their own courses, evaluate their own students and supervise their own research").

19 See, e.g., Communication Workers of America/Graduate Student Employees Union, AFL-CIO v. State of New York (State University of New York), 24 PERB 3035 (1991) (holding that graduate assistants and teaching assistants hold covered employment as they render services to the University that are the same or similar to those performed by covered employees).  

Co-Editors: Alan M. Klinger, co-managing partner, and Dina Kolker, special counsel in Stroock's Litigation and Government Relations Practice Groups. The Co-Editors wish to thank Beth A. Norton, special counsel, and David J. Kahne and Arthur J. Herskowitz, associates, in Stroock's Litigation and Government Relations Practice Groups.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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