Appeals court: NIFA has the authority to freeze Nassau wages

A state appeals court Wednesday ruled that Nassau’s financial control board has the authority to suspend contractual pay increases for county employees, and dismissed union challenges to a three-year wage freeze that ended in 2014.

The unanimous decision by a four-judge panel in the 2nd Department Appellate Division came a day before Nassau County Executive Edward Mangano is to submit his proposed 2017 budget. A ruling in favor of the unions could have required Nassau to refund $230 million in wages and benefits estimated to have been saved by the freeze.

The Nassau Interim Finance Authority lifted its freeze after the county’s five major unions agreed to new contracts that included money-saving concessions.

“NIFA, the county and union representatives came together to settle hundreds of millions of dollars in potential liability to taxpayers and this judgment clears up all remaining issues while providing financial stability for the County,” Mangano said.

NIFA chairman Adam Barsky said, “NIFA has always remained confident that our actions were in the best interest of Nassau County taxpayers and well within our statutory authority. While we recognize the unions’ right to appeal this ruling, we remain hopeful that this decision represents a final resolution of the matter.”

However, union leaders Wednesday promised to continue their fight in federal court, where they will challenge the constitutionality of suspending pay increases for workers with valid labor contracts.

After the state decision “the gate opens up for the other argument of it being unconstitutional,” said Jerry Laricchiuta, president of Nassau’s Civil Service Employees Association.

Corrections union chief Brian Sullivan said, “We’re going forward on the whole thing. It’s not ended here.”

James Carver, president of Nassau’s Police Benevolent Association, said his lawyers will argue that even if NIFA had the authority to suspend pay increases “they acted much too quickly and the wage freeze should have been the last resort, not the first resort.”

He said a Buffalo control board imposed a wage freeze a year after making spending cuts. NIFA took control of the county’s finances in January 2011 and imposed the wage freeze in March 2011, after winning a court challenge by Mangano to the control period.

Carver said his lawyers also are weighing whether to appeal Wednesday’s ruling, but the state Court of Appeals must give permission after the unanimous appellate decision.

The appellate court panel said an earlier Supreme Court ruling “correctly determined that NIFA was authorized under the [state] NIFA act to impose the subject wage freezes.”