Collective Bargaining Seminar amended report
Editor’ s note: This article provides updates, clarifications and corrected information to the article published on page 43 of the February issue of NJ Cops Magazine covering the presentation from Paul Kleinbaum of Zazzali, Fagella, Nowak, Kleinbaum & Friedman about“ Pending legal issues affecting collecting bargaining in the public sector.”
During the past eight years, PERC and the NJ State Legislature have been engaged in an assault on collective bargaining. In 2010, the Christie administration spearheaded legislation to eliminate the right to collectively bargain over health insurance contributions, and pushed through an increase in that obligation with Chapter 78 in 2011. The Christie administration also severely limited the interest arbitration process in 2010 primarily by imposing a 2-percent cap on arbitration awards.
The following issues and points were raised during the presentation:
• Recent Appellate Division decisions involving the STFA, NJLESA and Oakland PBA have placed severe limitations on the interest arbitration process and shown the damage that can be done. First, the courts have held that the 2-percent arbitration cap is not offset by savings employers receive through retirements, promotions, resignations and the savings achieved through hiring new officers, even if the savings can be calculated. In addition, the courts have held that the 2-percent cap is only a maximum. An arbitrator is authorized to award less than 2 percent. The cap only applies to arbitration awards and not to negotiated agreements.
• Interest Arbitration( IA) should only be used as a last resort. Once an IA petition is filed, the PBA loses control over the outcome and arbitrators and PERC has taken away benefits. There were just 11 awards issued last year. PERC maintains a website with all the awards and PBAs should review them to see how arbitrators are deciding cases.
• The Atlantic County / Bridgewater appeal concerning the obligation to negotiate over payment of salary increments after the expiration of a contract and before a new contract is negotiated was scheduled for argument before the Supreme Court on March 13. This is another area where PERC, under the leadership of a director appointed by Gov. Christie, severely limited the scope of negotiations by refusing to uphold a 35-year practice. Fortunately, the Appellate Division overturned PERC’ s decision and reinstated the 35-year practice which allowed payment of increments after the expiration of a contract and the right to negotiate payment of those increments. The Supreme Court will review the Appellate Division’ s decision.
• The Clementon Board of Education decision was another example of PERC’ s limitation of the right to negotiate terms and conditions of employment. Specifically, the court limited when a union could negotiate changes in health insurance contributions. PERC held that negotiations could only be conducted after the completion of the four-year progression. If the four-year progression ended during the term of a contract, negotiations could only take place at the end of the contract when a new contract was negotiated. Further, PERC concluded that any contribution levels which existed before the effective date of Chapter 78 would not be effective upon completion of the four-year progression. The maximum contribution, which in most cases is 35 percent, would remain unless it was reduced through negotiations. Although the case was appealed, the parties in the case settled the dispute before the appeal could be heard. The Appellate Division therefore dismissed the appeal as moot. PERC’ s decision is the law unless it is reversed in a future appeal.
• Another glimmer of hope was the Supreme Court’ s decision in the Robbinsville Board of Education case. In this case, PERC further restricted the right to negotiate over temporary furloughs. The Court reversed PERC’ s decision and held that public employers were required to negotiate if they intended to temporarily furlough employees. While this case may not directly affect law enforcement officers, it emphasized the importance of collective bargaining agreements and negotiations of terms and conditions of employment. This will certainly be an issue before the Supreme Court in the Atlantic County / Bridgewater appeals.
• Chapter 78 has had a detrimental impact on those officers who had less than 20 years of pensionable service as of June 28, 2011, when Chapter 78 became effective. The PBA has been looking for a test case to address this issue, which is left over from the decision by Judge Jacobson when the original statute was challenged. To date, the NJ State PBA is not aware of any pending litigation.
• There is also an issue about whether officers with less than 20 years of service as of June 28, 2011, and who reached that threshold before the expiration of a contract was in effect, would also be entitled to employer-paid benefits. This is an issue in which the Division of Local Government Services offered an interpretation suggesting that the effective date of Chapter 78 could either be June 28, 2011 or the expiration date of a contract which was in effect on that date. This is another issue for which the State PBA is seeking a test case to challenge in court.
• The“ Cadillac tax” part of the Affordable Care Act( ACA), was originally scheduled to go into effect in 2018 but was pushed back to 2020. It is a 40-percent tax on employer sponsored health insurance coverage for premiums which exceed certain threshold amounts. Whether the tax even will go into effect in 2020 is questionable, given the current position of the Republican administration that the ACA should be repealed. However, this is an issue which Locals should be on the lookout for in negotiations if employers attempt to submit proposals requiring officers to pay the tax in 2020. PBA Locals should work with their attorneys to respond to these proposals until it becomes clear whether the tax will survive. d
12 NEW JERSEY COPS ■ MARCH 2017