P.E.R.C. No. 2013-5, Madison Boro

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of BOROUGH OF MADISON, Appellant, -and- Docket Nos. IA-2010-109 IA-2010-110 PBA LOCAL 92, Respondent. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission affirms an interest arbitration award establishing the terms and conditions of employment for successor agreements between the Borough of Madison and PBA Local 92 and the Superior Officers Association. ¶

The employer appealed the award arguing that the Interest Arbitrator failed to properly apply the criteria specified in N.J.S.A. 34:13A-16g in that he deviated from the established pattern of bargaining by failing to explain and/or sufficiently analyze the effect of his salary increases in contravention of the long standing pattern bargaining; and that the Opinion and Award violates the standards set forth in N.J.S.A. 2A:24-8 by not permitting the Borough to submit an “amended final offer,” apparently reflecting the settlement with the FMBA Local 74 which it urged as the basis for the pattern it was asserting. ¶

The Commission affirms the award noting that the arbitrator thoroughly considered the 16g(2) criteria and determined that the internal settlement pattern between the PBA and FMBA was not entitled to substantial weight and pursuant to N.J.A.C. 19:16- 5.7(f) the arbitrator was authorized to not allow the Borough to amend its final offer. ¶

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 BOROUGH OF MADISON, Appellant, -and- Docket Nos. IA-2010-109 IA-2010-110 PBA LOCAL 92, Respondent. ¶

AppearancesAppearances: ¶

For the Appellant, Cleary Giacobbe Alfieri Jacobs, LLC, attorneys (Matthew J. Giacobbe, of counsel) ¶

For the Respondent, Lindabury, McCormick, Estabrook & Cooper, attorneys (Donald B. Ross, of counsel) ¶

DECISION ¶

The Borough of Madison ( “Borough” ) appeals from an interest arbitration award involving two units of approximately 26 police officers and police superior officers who are represented by PBA Local 92 and PBA Local 92 SOA (both units referred to as “PBA” ). ¶

The arbitrator issued a conventional award as he was required to do pursuant to P.L. 2010, c. 105 effective January 1, 2011. A conventional award is crafted by an arbitrator after considering the parties’ final offers in light of statutory factors. ¶

The Borough appeals arguing that: The Interest Arbitrator failed to properly apply the criteria specified in N.J.S.A. 34:13A-16g in that he deviated from the established pattern of bargaining by failing to explain and/or sufficiently analyze the effect of his salary increases in contravention of the long standing pattern bargaining; and that the Opinion and Award violates the standards set forth in N.J.S.A. 2A:24-8 by not permitting the Borough to submit an “amended final offer” , apparently reflecting the settlement with the FMBA Local 74 which it urged as the basis for the pattern it was asserting. ¶

The arbitrator issued an 87-page Opinion and Award. After summarizing the parties’ arguments on their respective proposals, the arbitrator awarded, in material regard to this appeal, a four year agreement from January 1, 2010 to December 31, 2013 with salary increases of: ¶

(a) Effective July 1, 2010, the maximum step on the Wage Schedule (Over 5 Years), Sergeant and Lieutenant shall be increased by 1.5%. All other steps on the Wage Schedule shall be frozen. Police Officers shall move to the next step on the salary schedule on their respective anniversary dates. ¶

(b) Effective January 1, 2011, the maximum step on the Wage Schedule (Over 5 Years), Sergeant and Lieutenant shall be increased by 2.0%. All other steps on the Wage Schedule shall be frozen. Police Officers shall move to the next step on the salary schedule on their respective anniversary dates. ¶

(c) Effective January 1, 2012, the maximum step on the Wage Schedule (Over 5 Years), Sergeant and Lieutenant shall be increased by 2.0%. All other steps on the Wage Schedule shall be frozen. Police Officers shall move to the next step on the salary schedule on their respective anniversary dates. ¶

(d) Effective January 1, 2013, the maximum step on the Wage Schedule (Over 5 Years), Sergeant and Lieutenant shall be increased by 2.0%. All other steps on the Wage Schedule shall be frozen. Police Officers shall move to the next step on the salary schedule on their respective anniversary dates. ¶

(e) Effective July 15, 2012, all new hires will be hired pursuant to a new Wage Schedule (Wage Schedule A-1) which will include three additional steps. All steps will be full-year steps. The new Step 1 shall be $46,000. All other steps shall be equalized between Step 1 and Step 9, the maximum step of $99,190. The five-year longevity step shall be eliminated. ¶

(f) All salary increases are fully retroactive. ¶

While the two issues raised for appeal by the Borough are intertwined, the second issue related to the alleged failure of the Arbitrator to permit the Borough to amend its final offer, is contrary to N.J.A.C. 19:16-5.7(f), and must therefor be rejected by this Commission. That section of our Rules provides in pertinent part: “At least 10 days before the hearing, the parties shall submit to the arbitrator . . . their final offers on each economic and non economic issue in dispute . . . the arbitrator may accept a revision of such offer at any time before the arbitrator takes testimony or evidence or if the parties agree to permit revisions and the arbitrator approves such an agreement, before the close of the hearing.” In the instant matter, the Borough submitted is final offer at the initial arbitration hearing on March 30,2011. By that time the record demonstrates that the collective negotiations agreements with the FMBA were both signed, providing raises of 0% for 2010, 0% for 2011, and 1.5% for 2012. Nonetheless, the Borough’s final offer to the arbitrator dated March 30 offered salary increases to the PBA of 0% for 2010, 2% for 2011, and 2% for 2012. When, on May 15, 2012 the Borough requested the arbitrator to permit it to revise its final offer, presumptively to match the increases settled with the FMBA, the arbitrator, in reliance upon N.J.A.C. 19:16-5.7(f) denied the request, but did permit the Borough to file a supplemental brief to make additional argument regarding its “pattern of settlements” argument. ¶

Under the circumstances set forth above, the refusal of the arbitrator to permit the Borough to revise its final offer does not constitute a violation of the standards set forth in N.J.S.A. 2A:24-8 and does not constitute grounds for reversal or remand of the Award. ¶

As to the argument seeking to repeal the award based upon the arbitrator’s award of salary increases different from those contained in the FMBA contracts, here too, we do not find a violation of the standards set forth in N.J.S.A. 34:13A-16(g) ¶

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). Because the Legislature entrusted arbitrators with weighing the evidence, we will not disturb an arbitrator’s exercise of discretion unless an appellant demonstrates that the arbitrator did not adhere to these standards. Teaneck, 353 N.J. Super. at 308-309; Cherry Hill. ¶

Arriving at an economic award is not a precise mathematical process. Given that the statute sets forth general criteria rather than a formula, except as set forth by P.L. 2010 c. 105 the treatment of the parties’ proposals involves judgment and discretion and an arbitrator will rarely be able to demonstrate that an award is the only “correct” one. See Borough of Lodi, P.E.R.C. No. 99-28, 24 NJPER 466 (¶29214 1998). Some of the evidence may be conflicting and an arbitrator’s award is not necessarily flawed because some pieces of evidence, standing alone, might point to a different result. Lodi. Therefore, 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). However, 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. ¶

N.J.S.A. 34:13A-16g(2)(c) requires arbitrators to compare the wages, salaries, hours and conditions of employment of the employees in the proceeding with those of employees performing similar services in the same jurisdiction and with “other employees generally” in the same jurisdiction. Thus, this subfactor requires the arbitrator to consider evidence of settlements between the employer and other of its negotiations units, as well as evidence that those settlements constitute a pattern. See N.J.A.C. 19:16-5.14(c)(5) (identifying a “pattern of salary and benefit changes” as a consideration in comparing employees within the same jurisdiction). Pattern is an important labor relations concept that is relied on by both labor and management. ¶

In addition, a settlement pattern is encompassed in N.J.S.A. 34:13A-16g(8), as a factor bearing on the continuity and stability of employment and as one of the items traditionally considered in determining wages. In that vein, interest arbitrators have traditionally recognized that deviation from a settlement pattern can affect the continuity and stability of employment by discouraging future settlements and undermining employee morale in other units. Fox v. Morris Cty., 266 N.J. Super. 501, 519 (App. Div. 1993), certif. denied, 137 N.J. 311 (1994) (in applying N.J.S.A. 34:13A-16g(8), arbitrator should have considered effect of award on employees in other units); see also Anderson, Krause and Denaco, Public Sector Interest Arbitration and Fact Finding: Standards and Procedures, 48.05[6], contained in Bornstein and Gosline Ed., Labor and Employment Arbitration (Matthew Bender 1999) (citing arbitrators’ statement that their award, which took pattern into account, would prevent disruption of future employer-wide negotiations and also commenting that arbitrators are generally hesitant to award increases that would disturb a pre-arbitration settlement pattern absent a showing that a break in the pattern is required to address a specific problem). ¶

However, it is also improper for an arbitrator to only focus on the internal settlement pattern of the Borough with other units. PBA Local 207 v. Borough of Hillsdale, 137 N.J. 71, 85- 86; Washington Tp. v. New Jersey PBA Local 206, 137 N.J. 88 (1994); Fox v. Morris Cty., 266 N.J. Super. at 516-517; Cherry Hill. While an arbitrator must be careful to avoid whipsawing when analyzing the wages of other employer units, interest arbitrators have traditionally found that internal settlements are a significant factor. 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). ¶

We find, however, in this matter, the arbitrator thoroughly considered the 16g(2) criteria and determined that the internal settlement pattern between the PBA and FMBA was not entitled to substantial weight. In pertinent part, he stated: ¶

“I shall now address the third sub-factor which includes several elements. The first element is internal comparability with other Borough employees. The Borough’s position is clearly stated in its brief: ¶

Although the Borough of Madison maintains its original final offer submission, the Borough asserts that the PBA should not be awarded any salary increases above the Borough’s March 30, 2011 final offer. It is important for the Arbitrator to take judicial notice of FMBA Local No. 74’s salary increases between the period of 2010-2012. The salary increases are demonstrated within the CNAs between the Borough and the FMBA, which were submitted at the Interest Arbitration hearing. See exhibits B-139 and B-140. B-139 shows that the FMBA received a 0% salary increase in 2010 and a 0% salary increase in 2011. B-140 shows that the FMBA received a 1.5% salary increase in 2012. Thus, the Borough's final offer of 0% in 2010, 2% in 2011 (upon enrollment in the SHBP), and 2% in 2012 is far more reasonable in comparison to the Union’s requested salary increase of 1.5% in 2010, 2.5% in 2011, 2.6% in 2012, and 2.7% in 2013. (Borough Supplemental Brief at page 5, May 15, 2012).” ¶

We note that the Borough cited Union Cty. P.E.R.C. No. 2004-58, 30 NJPER 97 (¶38 2004), Union Cty. P.E.R.C. No. 2003-87, 29 NJPER 250 (¶75 2003) and Union Cty. P.E.R.C. No. 2003-33, 28 NJPER 459 (¶33169 2002) for the proposition that the arbitrator erred by not considering the potential undermining of employee morale in the FMBA. However, the cited cases all dealt with the internal settlement patterns with multiple units and not just one, as in this case. More importantly, it was the Borough itself that deviated from the internal settlement pattern between the PBA and FMBA, by recommending a higher salary increase for the PBA when it submitted its final offer on March 30, 2011 after it knew what the FMBA had settled for in the second CNA. ¶

For all of the above reasons, the interest arbitration award is affirmed. ¶

OrderORDER ¶

The interest arbitration award if affirmed. ¶

BY ORDER OF THE COMMISSION ¶

Chair Hatfield, Commissioners Bonanni, Boudreau, Eskilson and Jones voted in favor of this decision. None opposed. Commissioner Wall recused himself. Commissioner Voos was not present. ¶

ISSUED: August 17, 2012 ¶

Trenton, New Jersey ¶