In the matter of City of New Haven

-and

Local 530, Council 15, AFSCME, AFL-CIO

Case No. MPP-19,222 and MPP-19,417

Decision No. 3788

Appealed to New Haven Superior Court on 10/5/00

Memorandum of Decision dated December 21, 2001

Case remanded to Labor Board

 STATE OF CONNECTICUT
LABOR DEPARTMENT

CONNECTICUT STATE BOARD OF LABOR RELATIONS

IN THE MATTER OF
CITY OF NEW HAVEN
DECISION NO. 3788
-and-
AUGUST 25, 2000
LOCAL 530, COUNCIL 15,
AFSCME, AFL-CIO

Case Nos. MPP-19,222

MPP-19,417

A P P E A R A N C E S:

Attorney Lisa M. Grasso

Attorney William F. Clark
For the City

Attorney Robert J. Murray

For the Union

DECISION AND DISMISSAL OF COMPLAINTS

On July 3, 1997, Local 530, Council 15, AFSCME, AFL-CIO (the Union) filed a
complaint, Case No. MPP-19,222, as amended on December 16, 1997, with the
Connecticut State Board of Labor Relations (the Labor Board) alleging that the City of
New Haven (the City) had violated §§ 7-470(a) (1), (2) and (4) of the Municipal
Employee Relations Act (MERA or the Act) by dealing directly with a bargaining unit
member over the settlement of a lawsuit and by unilaterally requiring employees to
contribute toward the settlement of lawsuits in which those employees were co-
defendants.

On December 16, 1997, the Union filed a second complaint, Case No.
MPP-19,417, alleging that the City had engaged in the same conduct regarding other
named employees, also in violation of §§ 7-470(a) (1), (2) and (4) of the Act.

After the requisite preliminary steps had been taken, the matter came before the
Labor Board for a hearing on June 18, 1998. At the hearing, the City filed a Motion to
Dismiss. Briefs were filed by the parties on the Motion to Dismiss and the hearing
resumed on May 6, 1999 and December 10, 1999. At the hearing on December 10, 1999,
the Motion to Dismiss was denied by the Labor Board, and the Union withdrew its
allegations of direct dealing. Both parties filed post-hearing briefs on March 29, 2000.

Based upon the entire record before us, we make the following findings of fact
and conclusions of law, and we dismiss both complaints.

FINDINGS OF FACT

1. The City is an employer within the meaning of the Act.

2. The Union is an employee organization within the meaning of the Act and at all
material times was the exclusive collective bargaining representative of a unit consisting
of all full time and permanent investigatory and uniformed members of the Police
Department with the authority to exercise police powers, up to and including the rank of
Major. Excluded from the bargaining unit are the Assistant Chief and the Chief.

3. At all material times, the City and the Union were parties to a collective
bargaining agreement in effect from July 1, 1994 through June 30, 1999 (Ex. 8), which
contains the following relevant provision:

Article 23 – Prior Benefits

The City agrees to continue in force all benefits of whatever nature

presently enjoyed by the members, not covered by the terms of this Agreement.

4. At all material times, the following relevant provisions of the New Haven Charter
(Ex. 2B) were in effect:

ARTICLE VI. CORPORATION COUNSEL

Sec. 18. General Duties.

The corporation counsel shall be the chief legal advisor of and attorney for the
city and all officers and departments thereof in matters relating to their official
duties….Said corporation counsel shall prosecute or defend all suits for or against
the city….

Sec. 20. Litigation settlement committee.

There shall be a litigation settlement committee consisting of the mayor, the

controller, the coordinator for administration appointed by the mayor, or their
designees, two members of the financial review and audit commission who shall
not be of the same political party, elected by their fellow commissioners, and two
members of the finance committee of the board of alderman, who shall not be of
the same political party, elected by their fellow aldermen. Neither the corporation

 counsel, nor any deputy or assistant corporation counsel, may enter into a
settlement on behalf of the city of any matter in litigation, the result of which
would bind the city to make a payment in excess of five thousand dollars, or such
greater amount as the board of alderman may approve from time to time, unless
said settlement has been approved by the litigation settlement committee.

5. The City is self-insured for liability claims. (Ex. 2C, 2D).

6. At all material times, the City was obligated, pursuant to § 7-101a of the
Connecticut General Statutes, to indemnify any bargaining unit employee sued for
alleged negligence or deprivation of civil rights arising out of the employee’s discharge
of his or her official duties. The City is relieved of its obligation to indemnify only when
an employee has a judgment entered against him or her, finding that he or she had
committed a malicious, wanton, willful or ultra vires act in the discharge of his or her
duties. In such a case, the City would be entitled to seek reimbursement from the
individual employee for all legal fees and expenses incurred on his behalf, and the
individual employee would be personally liable for the amount of any such judgment
entered against him or her.

7. In each such lawsuit, the City’s decision to represent an employee by either the
Corporation Counsel’s office or by outside counsel is made on a case-by case basis, and
is dependent upon factors such as potential conflicts of interest. The City incurs the full
cost of the outside counsel if one is appointed.

8. Historically, the decision to settle any such lawsuit, as opposed to going to trial, is
made by the City and, if appropriate, by outside counsel hired by the City for the
individual employee. There is no obligation by the City to settle any such case.

9. Representatives of the Union have never participated in lawsuits filed against

bargaining unit members, nor have they been part of any settlement discussions in such
lawsuits, including whether individual employees should contribute to the cost of the
settlements.

10. Many, if not all, of the incidents that eventually give rise to lawsuits against the
City’s Police Department and its employees are also the subject of internal departmental
investigations. Sometimes police officers have been exonerated of any wrongdoing by
the Department prior to the onset of litigation. Other times, individual officers have been
disciplined by the Department in accordance with relevant contract provisions.

11. On or about July 21, 1995, a federal lawsuit pursuant to 42 U.S.C. § 1983 was
filed by Plaintiff Roman Deneka against bargaining four bargaining unit members (Paul,
Wexler, Burke, Emery) and the City. The lawsuit alleged, inter alia, that Deneka’s civil
rights were violated by the manner in which the individual defendants had affected his
arrest. (Ex. 4)

12. After an internal departmental investigation, three of the four individual

defendants were disciplined for improper conduct during the Deneka arrest. The fourth
employee was exonerated of any wrongdoing.

13. Then-Deputy Corporation Counsel, Martin Echter (Echter), withdrew his

appearance on behalf of the four named bargaining unit members in the Deneka lawsuit,
due to potential conflicts of interest. (Ex. 4H). Each of the individual defendants was
provided a private attorney, paid for by the City.

14. As the Deneka litigation approached trial, the City determined that it would be
advantageous to pursue settlement options. In particular, the City was incurring legal
expenses for each of the four individual defendants, and the City was concerned about the
possible outcome of a trial, including the possibility that at least some of the individual
defendants would be exposed to punitive damage awards. The City urged the co-
defendants to consider settlement, or otherwise the City would proceed to trial.
Ultimately, a global settlement was reached whereby two of the four individual
defendants agreed to monetary settlement contributions, payable through weekly payroll
deductions, and a third defendant agreed to withdraw pending grievances. (Exs. 4M, 4P,
4S). The fourth individual defendant did not contribute towards the settlement of the
lawsuit because the City had exonerated him of any wrongdoing in connection with the
Deneka matter. The defendants waived “any and all claims for indemnification or
reimbursement” as a result of the settlement.

15. On or about June 4, 1996, a complaint for declaratory and injunctive relief was
filed by a corporation named TARP against the City and its Police Chief regarding the
closure by the Police Department of a club featuring exotic female dancers. (Ex. 5). The
complaint was later amended to name bargaining unit member Charles Lemons, the
officer who actually shut down the club, as an individual defendant. (Ex. 5A). Lemons
was provided with private counsel by the City. (Exs. 5B, 5C).

16. As a result of certain facts learned during the course of discovery in the TARP
lawsuit, the City determined that there was a likelihood that if the case proceeded to trial,
Lemons might be subject to an award of punitive damages, in which case the City could
choose not to indemnify him and could attempt to seek reimbursement for the legal fees
the City had expended on Lemons’ behalf. (Ex. 2D). As a result, the parties to the
lawsuit ultimately entered into a settlement agreement (Ex. 5D), whereby the City paid
the Plaintiff $25,000 and Lemons contributed $5,200, payable in weekly installments
deducted by the City from his paycheck. In the settlement agreement, Lemons waived
“any and all claims for indemnification or reimbursement” related to the TARP lawsuit.
(Ex. 5D).

17. There is no evidence to indicate that prior to the TARP and Deneka lawsuits, the
City had ever sought settlement contributions from individually named defendants or that
any individually named defendants had ever contributed to any lawsuit settlement.

 CONCLUSIONS OF LAW

1. An employer commits a prohibited practice when it unilaterally changes a term or

condition of employment involving a mandatory subject of bargaining.

2. The City’s decision to settle lawsuits and to request that individual co-defendants
make contributions towards the settlements is a permissive subject of bargaining.

3. The City did not commit a prohibited practice when it failed to negotiate with the
Union over its decision to settle lawsuits and to request that individual bargaining unit
members make contributions toward the settlement.

DISCUSSION

In this case, the Union contends that the City must bargain with the Union before
it makes demands of individual police officers to make partial payment in the settlement
of lawsuits in which they were named as defendants. The Union’s position is that by
conditioning such settlements on employee contributions, the City made a unilateral
change in a condition of employment involving a mandatory subject of bargaining,
because requiring employees to contribute to the settlement of lawsuits impacts their
wages and thus is a negotiable subject. 1

The relevant facts of these cases are not in dispute. Pursuant to Conn. Gen. Stat.
§ 7-101a(a),2 the City is required to indemnify its employees sued for alleged negligence
or deprivation of civil rights arising out of the employee’s discharge of his or her official
1
The Union withdrew all allegations involving direct dealing.

2
§ 7-101a. Protection of municipal officers and municipal employees from damage suits.

Reimbursement of defense expenses. Liability insurance. Time limit for filing notice and commencement

of action.

(a) Each municipality shall protect and save harmless any municipal officer, whether elected or
appointed, of any board, committee, council, agency or commission, including any member of a local
emergency planning committee appointed from such municipality pursuant to section 22a-601, or any
municipal employee, of such municipality from financial loss and expense, including legal fees and costs, if
any, arising out of any claim, demand, suit or judgment by reason of alleged negligence, or for alleged
infringement of any person’s civil rights, on the part of such officer or such employee while acting in the
discharge of his duties.
(b) In addition to the protection provided under subsection of (a) of this section, each
municipality shall protect and save harmless any such municipal officer or municipal employee from
financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand or suit
instituted against such officer or employee by reason of alleged malicious, wanton or willful act or ultra
vires act, on the part of such officer or employee while acting in the discharge of his duties. In the event
such officer or employee has a judgment entered against him for a malicious, wanton or willful act in a
court of law, such municipality shall be reimbursed by such officer or employee for expenses it incurred in
providing such defense and shall not be held liable to such officer and employee for any financial loss or
expense resulting from such act.
c) Each such municipality may insure against the liability imposed by this section in any
insurance company organized in this state or in any insurance company of another state authorized to write
such insurance in this state or may elect to act as self-insurer of such liability.
d) No action shall be maintained under this section against such municipality or employee unless
such action is commenced within two years after the cause of action therefor arose nor unless written notice

duties. The City’s obligation to indemnify is only relieved when a court determines that
an employee’s actions were wanton, malicious or ultra vires; under those circumstances,
the City would have the right to seek reimbursement from the individual employee for the
cost of their legal representation. In addition, an individual employee found to have acted
in a wanton, malicious or ultra vires manner would be potentially exposed to and
personally financially responsible for any punitive damage award assessed at trial.

It is also undisputed that, in the case of the TARP and Deneka lawsuits, the City
requested monetary contributions from certain of the individually named co-defendants
as a condition of the settlement of the lawsuits. There is no reliable evidence to suggest
that the City had ever previously conditioned a lawsuit settlement on the personal
financial contributions of individually named co-defendants.

The crux of the dispute in the present case is whether the City’s unilateral
decision to request employee settlement contributions in the TARP and Deneka lawsuits
is the type of decision that requires prior bargaining with the Union. We have never
before been presented with the precise situation we now face. The appropriate
assessment of this case requires us to make the initial determination of whether the City’s
request for contributions in these lawsuits involves a mandatory or permissive subject of
bargaining. As this Board stated in Town of Windsor, Decision No. 3435 (1996):

It is well-settled that an employer commits a prohibited practice when it

unilaterally changes a term or condition of employment requiring
bargaining with the union representing its employees; i.e., a mandatory
subject of bargaining. See West Hartford Education Association v.
DeCourcy, 162 Conn. 566 (1972). The same prohibition does not apply to
those items committed to management’s discretion; i.e., permissive
subjects of bargaining. When a unilateral change involves a
nonmandatory or permissive subject of bargaining, there is no violation.
Allied Chemical and Alkali Workers Local 1 v. Pittsburgh Plate Glass
Co., 404 U.S. 157, 78 LRRM 2974 (1971); Town of West Hartford,
Decision No. 2116 (1982).

In order for a matter to be categorized as a condition of employment and,

thus, a mandatory subject of bargaining, it must have a material effect on
the employment; a condition of employment does not include those
matters which are only indirectly, incidently or remotely related to
employment. New Haven v. State Board of Labor Relations, 36 Conn.
Supp. 18, 27 (1979) affirming New Haven Board of Education and City

of the intention to commence such action and of the time when and the place where the damages were
incurred or sustained has been filed with the clerk of such municipality within six months after such cause
of action has accrued.
e) For the purposes of this section “municipality” means any town, city, borough, consolidated
town and borough, district, district department of health, or authority established by the general statutes, a
special act or local law, ordinance or charter or any public agency.

 of New Haven, Decision No. 1759 (1979). Not everything which may be
of general interest to the employee is a subject matter of compulsory
bargaining under the MERA. New Haven, supra at 29. This Labor Board
recognizes that there is an area of overlap between what have traditionally
been considered managerial functions and what concerns conditions of
employment. To draw the line between mandatory subjects and non-
mandatory subjects, we balance the directness and depth of the item’s
impingement on conditions of employment against the extent of the
employer’s need for unilateral action without negotiations to serve or
preserve an important policy decision. Town of East Haven, Decision
No. 1279 (1975); DeCourcy, supra.

Applying the DeCourcy balancing test to the facts of this case, we first
examine “the directness and depth of the item’s impingement on conditions of
employment.” The Union argues that a condition of employment is affected
because the settlement contributions in question are ultimately deducted from and
impact the affected employees’ wages. We disagree with the Union’s analysis for
several reasons.

First, while it is true that agreeing to pay a settlement may affect an

employee’s overall earnings, we are not convinced that this factor, standing alone,
is sufficient evidence that the subject in question directly and deeply impinges on
a condition of employment. Although in this case the employees in question
chose to have their settlement contributions deducted from their paychecks, the
City’s request for such contributions does not automatically mean that the
employees’ wages will be affected. For example, an employee choosing to
contribute towards the settlement of a lawsuit may opt to pay the entire amount in
full or to sell personal property to raise the money.

Second, there is no evidence that any other aspect of the employees’ terms
and conditions of employment are affected by the City’s request for
contributions.3 The only impact alleged by the Union in this case is the asserted
impact on employee wages, which we find to be tenuous as discussed above. Any
other potential impacts of the situation giving rise to the lawsuit, such as
discipline, are subject to the grievance and arbitration provisions of the collective
bargaining agreement.

Third, there is no evidence on this record of threats or coercion by the City

beyond the assertion that the City planned to proceed to trial if it could not secure
global settlements, including employee contributions, in the TARP and Deneka
lawsuits. As discussed in greater detail below, we find the decision to settle a
lawsuit and the details of such settlements to be within the discretion of the City.
Therefore, the City is entitled to unilaterally determine to proceed to trial unless
the employee co-defendants participated in the settlement of the lawsuits. In a

3
We note in this regard that the Union does not challenge the fact that one employee in the Deneka
lawsuit settled by agreeing, inter alia , to withdraw a pending grievance.

case where there was evidence of a coercive impact on employee job security or
other benefit, the employee would have the protections of the contractual
grievance arbitration provisions, as noted above.

Additionally, the City’s decision to seek contributions in lawsuits affects

only a very small number of bargaining unit members. In City of West Haven,
Decision No. 3742 (1999), we considered whether the inclusion of a provision for
arbitration of disputes in the municipal employer’s uninsured/underinsured motor
vehicle insurance policy was a mandatory subject of bargaining. One of the
factors leading us to conclude that the unilateral removal of such a provision had
only an incidental impact on conditions of employment was the fact that very few
employees in the bargaining unit would ever have cause to access the benefit in
question. We concluded that “the manner in which disputes regarding this
insurance coverage are resolved is too remotely and indirectly related to the
condition of employment at issue (the insurance coverage itself) to constitute a
mandatory subject of bargaining.” West Haven, supra, at 7.

Even more significant than the small number of employees who will be
named co-defendants in a lawsuit with the City, even fewer will ever be faced
with the potential for a court finding that their conduct in the discharge of their
duties was malicious, wanton, willful or ultra vires. Of those employees, there is
always the possibility that the City will decide, for whatever reason, not to seek
settlement contributions from them.

Perhaps most importantly, it is the employee’s decision to make, based on

advice of counsel, whether or not to contribute to a lawsuit settlement or to risk
his or her own personal assets by proceeding to trial , having an adverse
determination and not being indemnified by the City. The rights and obligations
of individual employee defendants are not collective rights which lend themselves
to resolution through bargaining or which implicate the Union’s oversight. We
conclude that the impact of the City’s decision to seek contributions in any given
case has only an indirect and uncertain impact on the wages or any other
condition of employment of the employee group.

Having determined that the City’s actions have only the most indirect
impact on a condition of employment, we now must assess the extent of the
employer’s need for unilateral action without negotiations in order to serve or
preserve an important policy decision committed by law to the employer’s
discretion. In the instant case, the City’s obligations towards an employee named
as a co-defendant in a lawsuit are prescribed by statute. The City must indemnify
and provide legal representation for its employees who are sued for their conduct
in their official capacities. In any given lawsuit, however, the City also has other
obligations and considerations, such as the impact of litigation on the operations
of the City and on the proper use of public funds to cover the costs of litigation.
Thus, in any given lawsuit the City’s attorney must assess a number of factors in
the overall consideration of the particular strengths and weaknesses of the case

and whether or not to attempt to settle the lawsuit in a manner satisfactory to all
parties. The Union concedes that the City has the unfettered right to determine
whether to provide private counsel for co-defendants and whether and how to
proceed to trial or settle a particular case.

The Union’s only argument is that the City cannot request an employee to
contribute to a lawsuit settlement without bargaining first with the Union. We
conclude that an employer must be able to proceed in a lawsuit, including
proposing that employees contribute monetarily, unfettered by collective
bargaining. The decisions to be made during the pendency of such litigation are
not the type that lend themselves to helpful resolution through the processes of
collective bargaining. The Union admittedly does not have the right to bargain
with the City’s attorney over the manner in which any such litigation is conducted
nor would they have the right to bargain with an insurance company’s
representative if it was that entity that was litigating a lawsuit on behalf of its
client, the City of New Haven. The same view must be taken of an employer’s
request for an employee to contribute to a settlement. Such a request must be able
to be made unilaterally by the employer and the employee may accept or reject
the proposal. As discussed above, an employee can refuse or, if unlawful
coercion by the employer existed, any resulting discipline or job loss would be
grievable.

We conclude in this case, based on DeCourcy and on the particular facts,

that the subject at issue is of a limited nature not subject to resolution through
collective bargaining. Therefore, the settlement of lawsuits and the request that
employee co-defendants contribute towards such settlements are not mandatory
subjects of bargaining. We conclude that the decision whether or not to settle
these types of lawsuits is solely within management’s discretion. DeCourcy,
supra, p. 582.

As a result of our determination that the City’s request for employee

contributions in lawsuit settlements is not a mandatory subject of bargaining, the
Union cannot maintain its claim that the City made an unlawful unilateral change
in this case. However, one aspect of the Union’s claim in this regard requires
comment. From the evidence presented, it appears that the City’s assessment of
settling lawsuits has been made on a case-by-case basis, and is dependent upon
the unique factual claims in each case. Therefore, this record does not support a
conclusion that there has been any past practice of not requiring employee
contributions in lawsuits; rather, there was never a lawsuit presenting the set of
facts that the City was faced with in the TARP and Deneka matters.

 ORDER

By virtue of and pursuant to the power vested in the Connecticut State

Board of Labor Relations by the Municipal Employee Relations Act, it is hereby

ORDERED that the complaints filed herein be, and the same hereby are,
DISMISSED.

CONNECTICUT STATE BOARD OF LABOR RELATIONS

John H. Sauter
John H. Sauter
Chairman

Wendella A. Battey
Wendella A. Battey
Board Member

Thomas C. Watson
Thomas C. Watson
Alternate Board Member

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 CERTIFICATION

I hereby certify that a copy of the foregoing was mailed postage prepaid
this 25th day of August, 2000 to the following:

Attorney Robert J. Murray

Council 15, AFSCME

RRR
290 Pratt Street

Meriden, Connecticut 06450

Attorney William F. Clark

City of New Haven

RRR
165 Church Street, 3rd Floor

New Haven, Connecticut 06510

John DeStefano, Jr., Mayor

City of New Haven

165 Church Street, 2nd Floor

New Haven, Connecticut 06510

_____________________________

Jaye Bailey Zanta, General Counsel

CONNECTICUT STATE BOARD OF LABOR RELATIONS

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