
    Robert P. Bennett, as President of the Uniformed Court Officers Benevolent Association of Nassau County, et al., Appellants, v County of Nassau, Respondent.
    Argued June 4, 1979;
    decided July 9, 1979
    
      POINTS OF COUNSEL
    
      Francis J. Donovan and Joseph D. Donovan for appellants.
    I. Section 220 of the Judiciary Law, as applied by the County of Nassau, impairs and abrogates vested, contractual rights of the nonjudicial employees of the unified court system. This is in violation of the constitutional rights of plaintiffs-appellants. (Patrolmen’s Benevolent Assn. of City of N. Y. v City of New York, 41 NY2d 205; Matter of Teachers Assn., Cent. High School Dist. No. 3 v Board of Educ., 34 AD2d 351; Committee of Interns & Residents v City of New York, 87 Misc 2d 504; Worthen Co. v Kavanaugh, 295 US 56; Flushing Nat. Bank v Municipal Assistance Corp. of City of N. Y., 40 NY2d 731.) II. The only practical remedy for the wrong caused by the unconstitutional application of the statute is to treat the transfer of the employees from county to State employment as a termination or separation from county service creating an immediate right to cash payment for "banked” leave credits. (Matter of 749 Broadway Realty Corp. v Boyland, 1 Misc 2d 575, 1 AD2d 819, 3 NY2d 737; Matter of Miller v State of New York, 279 NY 74; Matter of Long v City of New York, 276 App Div 799, 302 NY 681; Matter of Eagan v Livoti, 287 NY 464; Matter of Schaeffer v Hitchcock, 258 App Div 1005; Matter of Benedetto v County of Suffolk, 35 AD2d 568, 28 NY2d 744; Krieger v Krieger, 25 NY2d 364.)
    
      
      Edward G. McCabe, County Attorney (Joshua A. Elkin of counsel), for respondent.
    I. Appellants, employed by Nassau County as nonjudicial employees on March 31, 1977, were not terminated from service on that day. II. Assuming, arguendo, that the impairment of contractual obligation issue is not deemed to be premature, section 220 (subd 6, par [d]) of the Judiciary Law did not impair a contractual obligation of the County of Nassau. (Keefe v Clarke, 322 US 393; Sturges v Crowninshield, 4 Wheat [17 US] 122; Gelfert v National City Bank, 313 US 221; Weisel v Hagdahl Realty Co., 241 App Div 314; Louisville & Nashville R. R. v Mottley, 219 US 467; Matter of Shelofsky v Helsby, 32 NY2d 54; Preston Co. v Funkhouser, 261 NY 140; People ex rel. Durham Realty Corp. v Le Fetra, 230 NY 429; Matter of Teachers Assn., Cent. High School Dist. No. 3 v Board of Educ., 34 AD2d 351; Christian v County of Ontario, 92 Misc 2d 51.) III. Assuming, arguendo, that section 220 (subd 6, par [d]) impaired a contractual obligation, it is a reasonable and appropriate means to fulfill a legitimate legislative purpose. (Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101; Security Unit Employees Council 82, Amer. Federation of State, County & Municipal Employees, AFL-CIO v Rockefeller, 76 Misc 2d 435; Board of Educ. v Cassidy, 59 AD2d 180; Country-Wide Ins. Co. v Harnett, 426 F Supp 1030, 431 US 934; Koch v Yunich, 533 F2d 80; United States Trust Co. v New Jersey, 431 US 1; El Paso v Simmons, 379 US 497.)
   OPINION OF THE COURT

Meyer, J.

This appeal presents the question whether section 220 (subd 6, par [d]) of the Judiciary Law [renumbered § 39, L 1978, ch 156, § 9] unconstitutionally impaired rights vested in plaintiffs, nonjudicial employees of the court system in the County of Nassau, to receive cash payment for accumulated vacation pay and sick leave upon the transfer, pursuant to court unification, of their positions to the State. Special Term held that the transfer terminated plaintiffs’ county service, that the enforced transfer of stated parts of their sick leave and vacation pay rights to the State impaired their contract rights and that the infringement of those rights was not reasonable and necessary to serve a public purpose within the rule recently restated by the Supreme Court in United States Trust Co. v New Jersey (431 US 1). It, therefore, granted summary judgment to plaintiffs and set the matter down for assessment of damages. The Appellate Division, finding that the transfer of plaintiffs from county to State service did not constitute a "termination” within the meaning of the contract and that the action was, therefore, premature, reversed, granted judgment to the county declaring that plaintiffs’ services had not been terminated and otherwise dismissed the complaint. The order of the Appellate Division should be reversed and the order of Special Term reinstated.

Plaintiffs became State employees on April 1, 1977, pursuant to the provisions of section 220 of the Judiciary Law (see L 1976, ch 966, as amd by L 1977, ch 32). Section 220 (subd 6, par [d]), which took effect April 1, 1977 (three months after the effective date of the collective bargaining agreement), deals with vacation and sick leave. It provides in pertinent part:

"(d) Notwithstanding any other provision of law,

"(i) Any nonjudicial officer or employee of the courts and court-related agencies of the unified court system who becomes an employee of the state of New York pursuant to this subdivision may, at the option of such officer or employee, be credited with sick leave earned and accumulated but unused at the time he becomes a state employee, but not in excess of two hundred days and shall be credited with vacation leave earned and accumulated but unused at the time he becomes a state employee, but not in excess of forty days * * *

"(iii) At the time of retirement or any other permanent separation without fault from the employment of the state, any such nonjudicial officer or employee shall be entitled to receive from the political subdivision payments for terminal leave based upon any time and leave credits accrued before April ñrst nineteen hundred seventy-seven and not transferred to the state pursuant to subparagraph (i) * * * If such officer or employee retires, such entitlement shall include payments he would have received from the political subdivision as if he had been eligible to retire and as if he had retired on March thirty-ñrst, nineteen hundred seventy-seven. Such credits shall be payable in cash if such credits would have been so payable by the political subdivision or if such officer or employee would otherwise have been retained on the payroll of the political subdivision until any such credits had been exhausted” (emphasis supplied).

Each plaintiff has filed a claim form with the county comptroller stating that he elects "Pursuant to the option given me by Section 220 of the Judiciary Law” to carry over less than the statutorily mandated 40 days (in fact, each elected to carry over no days) vacation time. The county comptroller rejected their claims and this action ensued.

The first three causes of action on behalf of plaintiffs Stone, Wilkins and Gilbride ask money damages for failure to pay them their accumulated time in cash as provided by the agreement. The fourth cause of action by plaintiff Bennett is stated to be a class action though no class action order has yet been entered. It seeks judgment declaring, among other things, that the transfer provisions of section 220 are optional rather than mandatory, and while no judgment so declaring has yet been entered, Special Term’s order, which granted summary judgment to all plaintiffs, must be understood as awarding the declaratory relief requested, to be incorporated in the judgment to be entered upon completion of the assessment.

There can be no question that the court employees transferred from the county to State service on April 1, 1977 were "terminated” within the meaning of the contract. Notwithstanding that they continued to perform the same services in the same building, they were working for a different employer. Neither the concept that in both capacities they were serving the people of the county (which, of course, is only partly true since many litigants are not county residents), the fact that the State had previously reimbursed the county for part of its court personnel costs, nor the fact that under the unification plan the county, during a transition period, will contribute to the State part of the costs of maintaining the courts in Nassau, changes the fact that plaintiffs are no longer employees of the County of Nassau. Indeed, by providing in section 220 (subd 6, par [iii]) that at the time of retirement from State service plaintiffs will be entitled to payment for leave credits as if they had retired on March 31, 1977, the Legislature has implicitly, if not explicitly, recognized that court unification terminates plaintiffs’ county service.. The conclusion necessarily is, therefore, that there had been "separation from the service of the County” within the meaning of the agreement. Since plaintiffs had not been "discharged for cause” they became, by reason of that termination, entitled to cash payment for accumulated time under section 3 (subd 5) of the ordinance.

Little time need be spent on the question of impairment, for the Appellate Division reached its conclusion on the basis of prematurity and, agreeing with Special Term as to the effect of the transfer on the rights of transferred employees, spelled out (66 AD2d 131, 139-140) the manner and extent of the impairment. There is, therefore, no disagreement on this issue.

Nor, whatever may be said with respect to another county faced with a similar claim by its former court employees now transferred to State service, can it be said that the County of Nassau has on this record brought itself within the principle of United States Trust Co. v New Jersey (431 US 1, supra), Patterson v Carey (41 NY2d 714) and similar cases, that a contract impairment may nonetheless be constitutional if in the reasonable and necessary exercise of the police power of the State. While there can be no question that unification of the court system is an important public purpose, that justifies the transfer of plaintiffs’ employment, but constitutes no reason for the infringement of plaintiffs’ contract rights that the statute’s mandatory transfer provisions entails nor, as Special Term noted, is there any showing "that the County is faced with any dire financial problems because of the State’s takeover of the court system.”

Plaintiffs are, therefore, entitled to the damages and the declaratory judgment that they request unless it can be said that by asking for a declaration that the transfer provisions of section 220 (§ 6, subd [d]) are optional rather than mandatory, they have somehow waived their rights. The complaint cannot be fairly so construed. Indeed, it is nothing more than a recognition by plaintiffs of the time-honored rule that a statute should not be so construed as to make it unconstitutional if there is another possible interpretation that will avoid the constitutional infirmity. If the transfer provision is construed as optional rather than mandatory then there will result no impairment of any court employee rights, since whatever accumulated leave or vacation time he transfers will have been transferred of his or her own free will. By asking for a declaratory judgment limited to a determination that transfer is optional and failing to obtain a class action order, plaintiffs have limited no one but themselves. Accordingly, the judgment to be entered on the fourth cause of action, after assessment of damages on the first three causes of action, will declare only that the transfer provision of the section must be construed as optional, and that plaintiffs, having been terminated from county service, are entitled to judgment against the county for the cash value of so much of their accumulated vacation time and sick leave as they do not voluntarily transfer to the State.

The order of the Appellate Division should, therefore, be reversed and the order of Special Term reinstated.

Jones, J.

(dissenting). I would affirm the order of the Appellate Division.

For the reasons stated in the opinions of Mr. Justice J. Irwin Shapiro and Mr. Justice Joseph A. Suozzi at the Appellate Division I agree that the establishment of the unified court budget on April 1, 1977 pursuant to chapter 966 of the Laws of 1976 and the implementation of the first stage assumption of the costs thereof by the State did not constitute a "separation from the service of the County” within the contemplation of the applicable agreements between the county and appellants. I find persuasive, too, the principle applicable in the private employment sector — that when new ownership takes over a going enterprise, even though there be a total change of employer in the legal sense, the new employer is bound by collective bargaining obligations of the predecessor employer if there is a substantial continuity in the business enterprise as well as in the identity of the work force (here there was both) — in substance that the rights of the employees persist as though there had been no interruption or termination of employment. (John Wiley & Sons v Livingston, 376 US 543; see Howard Johnson Co. v Hotel Employees, 417 US 249, 263; NLRB v Burns Int. Security Servs., 406 US 272.) I recognize that in these cases the shoe is on the other foot, and that it is the employer who seeks a holding that there has been a termination of employment. I think, however, that the principle involved is pertinent.

As a matter of substance as distinguished from the diction of the agreements, I see no reason in sound personnel policy or practice to pay cash equivalents for accumulated sick leave or vacation leave while the employees continue in the same positions to perform the same duties with only a change in the identity of the employer — now the State rather than the county. The objective of the contract provision I would have thought was to assure payment of cash equivalent of accumulated credits on termination of employment.

Finally, I cannot imagine that the State and county and others responsible for the preparation and passage of this aspect of the unified court budget legislation ever contemplated that the State take-over would have the effect of accelerating payment of what the employees themselves must have anticipated as benefits to be received at a time when they were separated from their employment and their tenure in their jobs ceased.

Judges Gabrielli, Wachtler and Fuchsberg concur with Judge Meyer; Judge Jones dissents and votes to affirm in a separate opinion in which Judge Jasen concurs; Chief Judge Cooke taking no part.

Order reversed, with costs, and the order of Supreme Court, Nassau County, reinstated.  