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ALBANY -- The Town of Islip improperly took away "take home" cars from union employees amid stalled contract negotiations in 2008, New York's top court ruled Thursday.

But, significantly, the Court of Appeals said Islip doesn't have to immediately replace the 45 vehicles at issue. Instead, the court sent the dispute back to a state mediation board to come up with a remedy.

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The case goes back to 2007 contract negotiations between Islip and a local Teamsters unit that was eventually replaced by the United Public Service Employees Union. The town had a 155-vehicle fleet and sought to reduce it by limiting "take home" vehicles to elected officials, emergency responders and employees who had no fixed work site, according to court documents.

Negotiations hit an impasse and the town imposed the vehicle policy change, resulting in about 80 employees losing take-home vehicles, including at least 45 union members.

The union filed a complaint with the state Public Employment Relations Board, saying the town couldn't unilaterally impose a new policy on vehicles but rather had to negotiate the issue as part of a contract.

The state board in 2011 agreed with the union and said the town should replace the vehicles. By then, however, the fleet had been disbursed.

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In a 5-2 decision Thursday, the Court of Appeals upheld the board's ruling on the overall issue.

The board was correct in finding that "the town engaged in an improper practice when it unilaterally discontinued the permanent assignment of 'take home' vehicles to employees who enjoyed this benefit," Judge Susan Read wrote for the majority.

But Read said the solution the board ordered was no longer practical.

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"Forcing the town to invest significant taxpayer dollars to replace these vehicles is unduly burdensome under the circumstances and does not further the goal of reaching a fair, negotiated contract," she wrote, sending the case back to the Public Employment Relations Board for a new remedy.

Judges in the minority countered that take home vehicles were clearly illegal under a town ethics law adopted in 1968. That the take home car practice evolved and grew over the years doesn't make it legal, retroactively, Judge Eugene Pigott Jr. said.

"Illegal past conduct does not, and should not, evolve into binding terms and conditions of employment," Pigott wrote. "Were it so, sloppy bookkeeping, lax supervision and perhaps, in some cases, rife favoritism could form the basis of a policy by which PERB could overrule a duly-enacted local law."A lawyer for the union noted the bittersweet outcome.

"There are no cars to give back," said Liam Castro. "While we disagree with that part of the opinion, we think these employees will be made whole at some point."

Castro said some of the employees who lost town-vehicle privileges have left town service or retired.

Similarly, Islip officials took the glass-half-full view.

"We respectfully disagree with the decision but are pleased with the court's rejection of the remedy granted by PERB, which would have mandated an outrageous expenditure of taxpayer dollars," said Inez Birbiglia, town spokeswoman.