High Court Rejects PSC Challenge To CUNY Intellectual Property Policy

October 19, 2006

The New York Court of Appeals, the State’s highest court, ruled yesterday that The City University of New York acted lawfully when it revised its policies on intellectual property in November 2002 without engaging in collective bargaining with the PSC. In a unanimous decision, the Court held that a provision of the collective bargaining agreement governing the relationship between the University and the PSC constituted a waiver of the union’s right to require collective bargaining about policies adopted by the Board of Trustees, even if they affect the terms and conditions of employment, as long as those policies do not contradict a specific provision of the collective bargaining agreement. The Court further held that such waiver continues in effect after the expiration of the collective bargaining agreement, just like all of its other provisions. The Court therefore dismissed the case, ending five years of litigation.

In the fall of 2000 the University created a task force to revise the existing policies on copyright and patents applicable to its employees. The task force consulted widely with the faculty, including the University Faculty Senate and the PSC. The resulting intellectual property policy, which was adopted by the Board of Trustees in November 2002, was in every respect more favorable to the faculty and staff than the prior policies. For example, the new policy increased the faculty’s share of proceeds on patents from 35% to 50%. It also made clear that faculty ownership of the copyright extended to all materials produced in the course of their employment at the University, not just to materials produced in connection with grants.

Nevertheless, the PSC filed a complaint with the New York State Public Employment Relations Board (“PERB”) alleging that the University had engaged in an improper labor practice, in violation of the Taylor Law, by refusing to bargain collectively with the union over the changes in its intellectual property policies. The University denied that it had violated the law, relying on the waiver provision of the collective bargaining agreement. It also pointed out that for almost 30 years, the prior patent and copyright policies had been adopted and amended unilaterally by the Board of Trustees without objection by the PSC and that the PSC had never before demanded collective bargaining on this matter.

After a hearing, an Administrative Law Judge found that Article 2 of the collective bargaining agreement contained a clear and explicit waiver of the PSC’s right to require the University to bargain about its intellectual property policy and that the University had the right to unilaterally adopt the new intellectual property policy even though the collective bargaining agreement had expired. However, the Administrative Law Judge also held that once the agreement had expired, the University was obligated to bargain collectively with the PSC regarding those aspects of the intellectual property policy that affected the terms and conditions of employment. Both sides appealed to the full board of PERB, which ruled in the University’s favor on both issues, holding that the waiver continued in effect even after the expiration of the collective bargaining agreement.

The PSC appealed to the Appellate Division, First Department, which reversed PERB on the issue of whether the waiver expired with the expiration of the collective bargaining agreement, in effect reinstating the decision of the Administrative Law Judge. The Appellate Division reasoned that only employers, and not employees, are obligated to preserve the status quo following the expiration of a collective bargaining agreement and therefore must abide by its terms until a new agreement is negotiated. The Court of Appeals granted the University leave to appeal and has now reversed the Appellate Division.

The Court of Appeals first held that “PERB reasonably interpreted Article 2 as a waiver by PSC of its right to demand negotiation concerning matters not addressed in the CBA, including the intellectual property policy.” The Court went on to hold that PERB also re asonably concluded that the policy favoring the preservation of the status quo during the negotiations for a new collective bargaining agreement required that all of the terms of the prior agreement remain in force, including a waiver provision agreed to by a union for the benefit of the employer.