P.E.R.C. No. 2007-56, Dover Tp (Toms River)

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of TOWNSHIP OF TOMS RIVER, Petitioner, -and- Docket No. SN-2006-046 TEAMSTERS LOCAL 97, Respondent. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission determines that a grievance filed by Teamsters Local 97 against the Township of Toms River is legally arbitrable. The grievance alleges and an arbitrator concluded that the Township violated the parties’ collective negotiations agreement when it deprived unit employees of overtime opportunities by allowing a subcontractor’s workers to remove trees outside of regular work hours. After an arbitration award was issued, the Appellate Division of the Superior Court ruled that the Township was not estopped from raising a negotiability defense to the award even though it had not filed a pre-arbitration scope petition. The Commission concludes that the Township, having decided to use both public and private sector employees to remove trees, could have legally agreed that it would offer work opportunities beyond the normal work day and on Saturdays to its own employees before using the subcontractor to perform that work. The Commission therefore concludes that the grievance is legally arbitrable. ¶

This synopsis is not part of the Commission decision. It has been prepared for the convenience of the reader. It has been neither reviewed nor approved by the Commission. ¶

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of TOWNSHIP OF TOMS RIVER, Petitioner, -and- Docket No. SN-2006-046 TEAMSTERS LOCAL 97, Respondent. ¶

AppearancesAppearances: ¶

For the Petitioner, Citta, Holzapfel & Zabarsky, P.C., attorneys (Robert A. Greitz, on the brief) ¶

For the Respondent, Mets & Schiro, LLP, attorneys ¶

(Leonard C. Schiro, on the brief) ¶

DECISION ¶

On December 9, 2005, the Township of Toms River petitioned for a scope of negotiations determination. This petition was filed after the Appellate Division of the Superior Court ruled that the Township was not estopped from raising a negotiability defense to an arbitration award even though it had not filed a pre-arbitration scope petition. The petition seeks a determination concerning the legal arbitrability of the underlying grievance filed by Teamsters Local 97. The grievance alleges and the arbitrator concluded that the Township violated the parties’ collective negotiations agreement when it deprived unit employees of overtime opportunities by allowing a subcontractor’s workers to remove trees outside of regular work hours. We conclude that the grievance is legally arbitrable.1/ ¶

The parties have filed briefs and exhibits, including the arbitration award and the unpublished opinion of the Appellate Division. These facts, including the arbitrator’s findings, appear. ¶

Local 97 represents the Township’s blue collar employees, some of whom are assigned to the Department of Public Lands. The applicable collective negotiations agreement was effective from July 1, 2000 through June 30, 2003. The grievance procedure ends in binding arbitration. ¶

Article XIII is entitled Division of Work. It provides, in part: ¶

Foremen or other employees outside the bargaining unit shall not perform any work customarily performed by workers covered by this Agreement, except as may be required to instruct employees or in an emergency as may be required to assist employees. ¶

Article XVI is entitled Overtime. It provides, in part: ¶

A. All work performed in excess of eight (8) hours in any one (1) day and forty (40) hours in any one (1) work week shall be considered overtime and compensated for at the rate of time and a half. ¶

F. Overtime work shall be equally distributed among employees in their respective departments as is reasonably practical among those capable of performing the work to be done. ¶

The duties of public works employees include removing trees. They perform that job daily. In 2002, a vast number of trees needed to be removed so the Township entertained public bids and then contracted with a landscaping company, Re-Mark-Able, to have that company remove trees at the rate of $478 a tree. The contract provided that the contractor could remove trees Monday through Friday between 7:00 a.m. and 6:00 p.m. and Saturday between 9:00 a.m. and 6:00 p.m., but no work could be performed on Sunday. ¶

On July 29, 2002, Local 97 filed a grievance contesting the use of outside workers to remove trees. The grievance was not resolved so Local 97 demanded arbitration. ¶

On March 8, 2003, an arbitration hearing was conducted. On August 3, the arbitrator issued his award. He determined that the Township could use subcontractor workers to supplement the work of bargaining unit employees during regular work hours, but not to avoid offering overtime opportunities to bargaining unit employees during other hours or on Saturdays. The arbitrator noted the Township’s concession that its employees were capable of removing the trees, found that the Township’s decision was apparently controlled by its desire to avoid overtime costs, and determined that no emergent reason required that decision. Because the disputed work was performed when unit employees were off-duty and available to work, denying them the opportunity to work overtime violated the contract.2/ He concluded: ¶

The Township violated Articles I, VIII & XVI of the Collective Bargaining Agreement by allowing non-bargaining unit personnel to perform bargaining unit work. The Agreement requires that the Township must first offer bargaining unit work to bargaining unit members in compliance with the mandates of the Agreement and past practice. ¶

The grievance shall be sustained and the Township shall make bargaining unit employees whole for the tree-cutting work performed in 2002 during overtime hours and while bargaining unit employees were off-duty (inclusive of Saturdays). ¶

The arbitrator shall retain jurisdiction solely with respect to questions of remedy. ¶

The Township moved to vacate the award in the Superior Court, Law Division, Ocean County, and Local 97 sought confirmation. On June 4, 2004, the Honorable Donald F. Campbell, J.S.C., concluded that the Township had a managerial prerogative to subcontract the work and vacated the award. ¶

Local 97 appealed to the Appellate Division. On October 31, 2005, the Court issued an unpublished decision, App. Div. Dkt. No. A-6267-03T3 (10/31/05), and transferred the case to us to exercise our primary jurisdiction to decide negotiability disputes. Bernards Tp. Bd. of Ed. v. Bernards Tp. Ed. Ass’n, 79 N.J. 311 (1979) .3/ While we will not ordinarily entertain post- award scope petitions, we will do so when, as here, a court determines that a party is not estopped from filing a petition belatedly and transfers the negotiability issue to us. Ocean Tp. Bd. of Ed., P.E.R.C. No. 83-164, 9 NJPER 397 (¶4181 1983).4/ ¶

Our jurisdiction does not include reviewing the merits of a grievance or an arbitration award. See Ridgefield Park Ed. Ass’n v. Ridgefield Park Bd. of Ed., 78 N.J. 144, 154 (l978). Thus, we do not consider the Township’s argument that the parties’ agreement did not prevent it from subcontracting the tree removal. ¶

Local 195, IFPTE v. State, 88 N.J. 393 (1982), articulates the standards for determining whether a subject is mandatorily negotiable: ¶

[A] subject is negotiable between public employers and employees when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy. To decide whether a negotiated agreement would significantly interfere with the determination of governmental policy, it is necessary to balance the interests of the public employees and the public employer. When the dominant concern is the government’s managerial prerogative to determine policy, a subject may not be included in collective negotiations even though it may intimately affect employees’ working conditions. ¶

[Id. at 404-405]. ¶

No statute or regulation is asserted to preempt negotiations. The balancing test must be applied to the particular facts presented in each case; labels do not control. City of Jersey City v. Jersey City POBA, 154 N.J. 555 (1998). ¶

The Township has determined that tree removal is a proper governmental service that may generally be performed by public employees and Local 97 has not sought to preclude the Township from subcontracting with a private sector company to supplement the work of public employees in removing trees. Thus, this is not a case that should be decided by simply labeling it a subcontracting decision under Local 195. Instead, the narrow issue is whether the Township, having decided to use both public and private sector employees to remove trees, can legally agree that it will offer work opportunities beyond the normal work day and on Saturdays to its own employees before using the subcontractor to perform that work. That question turns not on philosophical considerations or employee qualifications, but on work hours and labor costs. ¶

We have held that such questions are legally arbitrable in similar cases. For example, in Old Bridge Tp. Bd. of Ed., P.E.R.C. No. 2005-75, 31 NJPER 146 (¶65 2005), the employer used both in-house employees and subcontractor employees to perform the same custodial and maintenance services in different buildings. An arbitrator sustained a grievance claiming that the in-house employees were entitled to overtime opportunities at a building where subcontractor employees worked. In holding that the grievance was within the scope of negotiations, we reasoned: ¶

Case law establishes that public sector employers have a managerial prerogative to enter into subcontracts to have services delivered by private sector employees. [See Paterson State-Operated School Dist., P.E.R.C. No. 2001-42, 27 NJPER 99, 100 (¶32038 2001), aff’d 28 NJPER 290 (¶33108 App. Div. 2002)]. Case law also establishes, however, that the parties may negotiate over which qualified personnel will work what hours at what rates given an employer’s determination that work must be done at certain times. Ibid. ¶

The Board has not determined that it will subcontract all custodial services. Instead, some services are performed by district employees and some by subcontractor employees. The question is which employees will get what overtime opportunities and thus extra compensation. The arbitrator has found that the parties negotiated an answer to that question. ¶

District employees have a strong interest in enforcing the agreement found by the arbitrator. It increases their work hours and compensation. The employer has not given any reason for having to allocate these overtime opportunities to subcontractor employees rather than its own employees. It relies solely on its assertion of a broad right to subcontract. Under Jersey City , that is not enough to outweigh the employees’ side of the balance. [31 NJPER at 148] ¶

That reasoning applies here. As in Old Bridge, Paterson and Howell Tp. Bd. of Ed., P.E.R.C. No. 2005-7, 30 NJPER 333 (¶109 2004), this case involves work that is shared by unit employees and subcontractor workers. The disputed assignments are within the skills of all, but would involve the payment of overtime if given to the in-house employees. The employer has asserted a broad right to subcontract under Local 195 that does not apply to the facts presented and does not outweigh the employees’ interests in seeking the extra work hours and overtime pay involved in removing trees on Saturdays or outside normal work hours. Accordingly, the grievance is legally arbitrable. ¶

OrderORDER ¶

The grievance concerning the alleged loss of overtime opportunities for employees represented by Teamsters Local 97 is legally arbitrable. ¶

BY ORDER OF THE COMMISSION ¶

Chairman Henderson, Commissioners Buchanan, DiNardo, Fuller and Watkins voted in favor of this decision. None opposed. ¶

ISSUED: April 26, 2007 ¶

Trenton, New Jersey ¶

Note1/ The case was held in abeyance at the parties’ request while they engaged in settlement discussions. On April 9, 2007, the Township informed us that the case had not settled and asked that we issue a decision. ¶

2/ The arbitrator noted testimony from the personnel supervisor that bargaining unit employees clean the municipal building during regular work hours and that all overtime cleaning opportunities on weekends and nights are first offered to bargaining unit employees before an outside cleaning service is used. The arbitrator also noted testimony from a groundsman that Local 97 had not filed grievances when a seed and fertilizer contractor and a snow removal contractor were used during regular work hours. ¶

3/ The Appellate Division panel noted that the employer asserted a prerogative before the arbitrator and suggested that the arbitrator should have stayed the arbitration and required that a scope petition be filed. Absent an interim relief order, however, an arbitrator is not required to suspend arbitration proceedings when such a defense is made even if a scope petition has been filed. N.J.A.C. 19:13- 3.10. We have changed our regulations to make that point explicitly and to reflect arbitral custom. N.J.A.C. 19:13- 2.2(c) (filing a petition does not automatically stay an arbitration). An arbitrator has discretion to suspend an arbitral proceeding when a negotiability issue arises, but is not compelled to do so. ¶

4/ We deny the Township’s request for oral argument. The arbitration award lays out the pertinent background and we have considered similar negotiability issues before. ¶