P.E.R.C. No. 2013-1, Morris Cty Prosecutor's Office

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of COUNTY OF MORRIS, Respondent, -and- Docket No. IA-2012-032 PBA LOCAL 327, Appellant. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission affirms an interest arbitration award establishing the terms and conditions of employment for a successor contract between the Morris County Prosecutor’s Office and PBA Local 327. The PBA appealed the elimination of the wrap-around medical insurance plan and the elimination of employer funding for health insurance coverage for retirees. ¶

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 COUNTY OF MORRIS, Respondent, -and- Docket No. IA-2012-032 PBA LOCAL 327, Appellant, ¶

AppearancesAppearances: ¶

For the Respondent, Knapp, Trimboli & Prusinowski, LLC, attorneys (Fredric M. Knapp, of counsel) ¶

For the Appellant, Loccke, Correia, Limsky & Bukosky, attorneys (Richard D. Loccke, of counsel) ¶

DECISION ¶

PBA Local 327 appeals from an interest arbitration award involving a unit of approximately forty-seven police officers. ¶

The arbitrator issued a conventional award as she was required to do pursuant to P.L. 2010, c. 105 effective January 1, 2011. The award addresses a variety of issues including salary increases, amendments to health, medical and prescription insurance programs, work hours and changes to the grievance procedure. However, the PBA’s appeal is limited to two proposals made by the County that the arbitrator granted - - the elimination of the Wrap-Around medical insurance plan effective July 1, 2012, and the elimination of employer funding for health insurance coverage for retirees’ dependents for employees hired after the date of the award.1/ ¶

The PBA appeals arguing that the elimination of these benefits was in violation of applicable standards and of this agency’s case law. The County responds that the elimination of these benefits was based on substantial credible evidence in the record. ¶

N.J.S.A. 34:13A-16g requires that an arbitrator shall state in the award which of the factors are deemed relevant, satisfactorily explain why the others are not relevant, and provide an analysis of the evidence on each relevant factor. The statutory factors are as follows: ¶

(1) The interests and welfare of the public. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by P.L. 1976, c. 68 (C.40A:4-45.1 et seq.). ¶

(2) Comparison of the wages, salaries, hours, and conditions of employment of the employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of other employees performing the same or similar services and with other employees generally: ¶

(a) In private employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator’s consideration. ¶

(b) In public employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator’s consideration. ¶

(c) In public employment in the same or similar comparable jurisdictions, as determined in accordance with section 5 of P.L. 1995, c. 425 (C.34:13A-16.2); provided, however, that each party shall have the right to submit additional evidence concerning the comparability of jurisdictions for the arbitrator’s consideration. ¶

(3) The overall compensation presently received by the employees, inclusive of direct wages, salary, vacations, holidays, excused leaves, insurance and pensions, medical and hospitalization benefits, and all other economic benefits received. ¶

(4) Stipulations of the parties. ¶

(5) The lawful authority of the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by P.L. 1976, c. 68 (C.40A:4-45.1 et seq.). ¶

(6) The financial impact on the governing unit, its residents, the limitations imposed upon the local unit’s property tax levy pursuant to section 10 of P.L. 2007, c. 62 (C.40A:4-45.45), and taxpayers. When considering this factor in a dispute in which the public employer is a county or a municipality, the arbitrator or panel of arbitrators shall take into account, to the extent that evidence is introduced, how the award will affect the municipal or county purposes element, as the case may be, of the local property tax; a comparison of the percentage of the municipal purposes element or, in the case of a county, the county purposes element, required to fund the employees’ contract in the preceding local budget year with that required under the award for the current local budget year; the impact of the award for each income sector of the property taxpayers of the local unit; the impact of the award on the ability of the governing body to (a) maintain existing local programs and services, (b) expand existing local programs and services for which public moneys have been designated by the governing body in a proposed local budget, or (c) initiate any new programs and services for which public moneys have been designated by the governing body in a proposed local budget. ¶

(7) The cost of living. ¶

(8) The continuity and stability of employment including seniority rights and such other factors not confined to the foregoing which are ordinarily or traditionally considered in the determination of wages, hours, and conditions of employment through collective negotiations and collective bargaining between the parties in the public service and in private employment. ¶

(9) Statutory restrictions imposed on the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by section 10 of P.L. 2007, c. 62 (C.40A:4-45.45). ¶

[N.J.S.A. 34:13A-16g] ¶

The standard for reviewing interest arbitration awards is well established. We will not vacate an award unless the appellant demonstrates that: (1) the arbitrator failed to give “due weight” to the subsection 16g factors judged relevant to the resolution of the specific dispute; (2) the arbitrator violated the standards in N.J.S.A. 2A:24-8 and -9; or (3) the award is not supported by substantial credible evidence in the record as a whole. Teaneck Tp. v. Teaneck FMBA, Local No. 42, 353 N.J. Super. 298, 299 (App. Div. 2002), aff’d o.b. 177 N.J. 560 (2003), citing Cherry Hill Tp., P.E.R.C. No. 97-119, 23 NJPER 287 (¶28131 1997). An arbitrator must provide a reasoned explanation for an award and state what statutory factors he or she considered most important, explain why they were given significant weight, and explain how other evidence or factors were weighed and considered in arriving at the final award. N.J.S.A. 34:13A-16g; N.J.A.C. 19:16-5.9; Lodi. Within the parameters of our review standard, we will defer to the arbitrator’s judgment, discretion and labor relations expertise. City of Newark, P.E.R.C. No. 99-97, 26 NJPER 242 (¶30103 1999).2/ ¶

The Elimination of the Wrap-Around Medical Plan ¶

We reject the PBA’s assertion that the elimination of the Wrap-Around plan was “in violation of applicable standards and of this agency’s case law .” The arbitrator eliminated the Wrap- Around plan as of July 1, 2012, and directed that employees currently enrolled in the Wrap-Around plan be given the opportunity to opt for coverage in either the PPO plan or the HMO plan. The arbitrator gave the most weight to the statutory factor addressing the interest and welfare of the public. The County produced evidence as to the premium costs of each medical plan it offered and each category of coverage, as well as a breakdown of enrollment in each plan for bargaining unit members and the category of coverage they selected. From this evidence, the arbitrator set forth a detailed review of the employers health care costs in the various medical plans it offers, as well as the cost to employees. Specifically with regard to the Wrap- Around plan, she stated that “[b]y moving the employees in the Wrap-Around to the PPO plan, the employer would save $34,711 ($21,531 x 3 family coverage members + $13,180 x 5 single coverage members = $34,711.)” The arbitrator concluded that the elimination of the Wrap-Around plan would give the County some relief in escaping the high costs of traditional style plans and moving in the direction of PPO plans. Relying on New Milford, P.E.R.C No. 2012-53, ___ NJPER ___ (~______ 2012), the PBA asserts that the cost savings calculated by the arbitrator from eliminating the Wrap-Around plan was too speculative to be calculated at the time of the award. However, our discussion in New Milford was with regard to an arbitrator’s calculations of the 2% base salary cap required by N.J.S.A. 34:13A-16.7 (b). We found that arbitrators should not factor in projected retirements or hiring during the term of a new contract as such projections were not consistent with the precise mathematical calculations required to determine the 2% base salary cap. ¶

The arbitrator also gave significant weight to the factor of internal comparability and the evolving settlement pattern among Morris County employees. She emphasized that consistency of benefits among employees of the same employer contributes to the stability of labor relations and the public good. Six County bargaining units encompassing 545 to 670 employees agreed to eliminate the Wrap-Around plan.3/ She also noted that the Wrap- Around plan is a traditional health plan being offered to public or private sector employees with increasing rarity. Indeed, only eight of the 47 unit employees are enrolled in this plan. While she found that the PPO plan being offered to the employees was not equal to the Wrap-Around plan, she found it comparable in many areas. The arbitrator’s elimination of the Wrap-Around plan was based on substantial credible evidence in the record. ¶

Elimination of Health Benefits for Dependents of Retirees ¶

Here, too, we reject the PBA’s assertion that the arbitrator’s elimination of this benefit was “in violation of applicable standards and of this agency’s case law .” The arbitrator eliminated County-paid health care benefits for dependents of retirees for employees hired after the date of her award. Such retirees would be permitted to add their eligible dependents to the plan at the retiree’s expense. As she did with medical benefits, the arbitrator placed substantial weight on internal comparability and noted that the elimination of this benefit had been accepted by six County bargaining units encompassing 545 to 670 employees. She also noted that no current retiree or employee would be impacted by this decision. While the PBA asserts that the arbitrator failed to consider the present or past cost of this benefit, the PBA fails to pinpoint any relevant evidence in the record that the arbitrator failed to consider. Indeed, the arbitrator noted that the PBA made no specific argument regarding this proposal. Arbitrators are confined to making determinations based on the evidence presented to them. Thus, the arbitrator’s reliance on internal comparability was appropriate. See Somerset Cty. Sheriff’s Office and Somerset Cty. Sheriff FOP, Lodge No. 39, P.E.R.C. No. 2007-33, 32 NJPER 372 (¶156 2006), aff’d 34 NJPER 21(¶8 App. Div. 2008). ¶

OrderORDER ¶

The PBA’s appeal of the award is denied. ¶

BY ORDER OF THE COMMISSION ¶

Chair Hatfield, Commissioners Boudreau, Bonanni and Eskilson voted in favor of this decision. Commissioner Voos and Jones voted against this decision. Commissioner Wall was not present. ¶

ISSUED: July 2, 2012 ¶

Trenton, New Jersey ¶

Note1/ We deny the PBA’s request for oral argument. The matter has been fully briefed. ¶

2/ The section of our review standard addressing whether the arbitrator established that the award will not exceed the statutorily mandated base salary cap of 2% per year or 6% in the aggregate for a three-year award is not applicable in this case. ¶

3/ The arbitrator noted that no evidence had been presented which indicated whether the employees in the rest of the County’s 22 bargaining units continue to be offered the Wrap-Around plan. ¶