P.E.R.C. No. 2014-4, Union Beach Boro

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of BOROUGH OF UNION BEACH, Respondent, -and- Docket No. IA-2013-026 PBA LOCAL 291, Appellant. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission grants the appeal of PBA Local 291 in an interest arbitration case between the PBA and Borough of Union Beach. The Commission remands the award to a new arbitrator holding that the arbitrator did not analyze the subsection 16g factors as required by law because he did not satisfactorily explain the relevance and weight given to each 16g factor. The Commission also finds that the arbitrator did not comply with N.J.S.A. 34:13A-16f(5) because he did not certify that he took the statutory local tax levy cap into account. ¶

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 UNION BEACH, Respondent, -and- Docket No. IA-2013-026 PBA LOCAL 291, Appellant. ¶

AppearancesAppearances: ¶

For the Appellant, Mets, Schiro & McGovern, LLP, attorneys (James M. Mets, of counsel) ¶

For the Respondent, Scarinci & Hollenbeck, attorneys (Ramon E. Rivera, of counsel) ¶

DECISION ¶

PBA Local 291 ( “PBA” ) appeals from an interest arbitration award involving a unit of approximately 11 full time police officers in the ranks of police officer and sergeant who are represented by PBA Local 291.1/ ¶

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 PBA appeals and requests that the award be vacated and remanded to a new arbitrator asserting that the arbitrator violated N.J.S.A. 2A:24-8(a) and (d)2/ because the award was procured by undue means and the arbitrator so imperfectly executed his powers that a mutual, final and definite award upon the subject matter submitted was not made; that the arbitrator failed to analyze the statutory factors as required by law; that the award is not supported by substantial credible evidence in the record; and that the award was filed outside the statutory 45 day time limit3/ and the arbitrator did not certify that he took the statutory limitations imposed on the local levy cap into account in making his award as required by statute.4/ ¶

The Borough responds that the Commission should affirm the award because the Borough presented substantial evidence during the proceeding and that demonstrates that the arbitrator gave due weight to all of the relevant statutory criteria; the arbitrator determined that the “interest and welfare of the public” was the most important statutory factor given that the Borough was devastated by Hurricane Sandy in late October 2012; and the fact that award was filed outside the statutory 45 day time limit does not affect the validity of the award. ¶

The Borough also filed a cross-appeal requesting that the award be remanded to the arbitrator so that he could address the vacation allotment for new hires, which was not reflected in the award.5/ 6/ ¶

The PBA filed a final offer and the Borough filed a revised final offer with the arbitrator. However, as set forth below, the deciding issue in this appeal that is paramount is whether or not the arbitrator complied with N.J.S.A. 34:13A-16g and appropriately and satisfactorily analyzed the required statutory factors. ¶

The arbitrator issued a single spaced nine (9) page opinion and award. After summarizing the presentation of the parties at the arbitration hearing and their proposals, the arbitrator issued the following award in pertinent part which included a 4.5 year collective negotiations agreement covering the period from July 1, 2011 through December 31, 2015:7/ ¶

AWARD ¶

The Employer made demands for changes in many benefits now enjoyed. The following are hereby awarded: ¶

These include a reduced limit on the number of consecutive sick days which require a doctor’s note from five consecutive days to two; provide that the administration can call for a fitness for duty examination whenever there is a pattern of absenteeism. In Article VI the provision for attendance at a funeral shall be four days, including the day before the wake, the day of the wake, day of the funeral, and the day after the funeral. In Article X, Overtime, Section One, shall be amended to provide that the maximum accumulation of compensatory time off in lieu of overtime is 100 hours. Section G provides that the past practice concerning the flex day schedule which is paid at straight time, shall be continued. Article XI, Vacation, Section One, is amended to reflect all current officers are frozen at their current step in vacation allowance. Section D will provide that vacation use may be limited to certain times of the year unless there is no conflict in terms of staff requirements as determined by the Employer. Article XVI shall be eliminated. Article XX, Arbitration, Section Two, is amended to provide that the parties shall adhere to the appointment process of the Public Employment Relations Commission. Article XXI Section Three, is amended to provide a freeze on longevity for all current officers. Longevity pay shall be measured in dollar amounts rather thin percentages. Section Three is further amended to provide that new hires are not eligible for longevity. Article XXIII, Section One will provide that all current and new employees will be capped at $15,000 for unused sick leave. The $15,000 will apply to all current employees that have less than $15,000 in accrued sick leave. Current employees with more than $15,000 credit shall be capped at that level as of July 1, 2011. Article XXV Education, Section Two, is amended to provide that the Borough will pay a maximum of $3000 annually for the entire department in total for courses taken with the Chiefs approval. New Article, Drug Testing, Borough will implement drug testing procedures using AG guidelines, including illegal use of steroids. ¶

The Union also made many proposals and the following are hereby awarded: ¶

Article VI, Special Leaves: should a death in the family occur and services are out of state, the attendance leave may be increased to five days. Article X Overtime Section One: the Borough agrees that overtime at the rate of time and one half shall be paid to all employees in compensatory time or cash for hours worked in excess of the regular work day. Article XXVI, Duration: negotiations for a successor agreement shall be initiated according to law. Article XXIX Duration. Section One: all internal affairs investigations will be conducted in accordance with New Jersey Attorney General guidelines. Article XVII Discharge and Suspension, Section One: amended to read that all discipline will be issued in accordance with the Rules and Regulations promulgated by the New Jersey Civil Service Commission and New Jersey State law. ¶

. . . . ¶

The first wage increase will be in 2011. The increase of 1 % shall be granted on October 1,2011. There shall be a second increase granted on September 1, 2012, in the amount of .75%. A third increase shall be granted on March 1, 2013 and the amount shall be 1.25%. A fourth increase shall be in the amount of 1.25% and shall be granted on March 1,2014, and there shall be a fifth increase in the amount of 1.50% granted on February 1,2015 with an expiration date of December 31, 2015. ¶

. . . . ¶

My award is for the 4.5 year plan set forth above and costing a total of 5% is the compromise I believe to be the fairest and can afforded by both parties. It has the advantage of extending the settlement for two years beyond the expiration of the originally proposed three year contract term which should provide a period of labor-management peace. An added advantage is that this agreement will not be subject to new regulations by the State, which may possibly become effective as early as January 1, 2014. This stabilizing effect coupled with a good will commitment of the parties should help to provide labor peace for the remainder of the contract. ¶

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 . . .; ¶

(2) Comparison of the wages, salaries, hours, and conditions of employment of the employees 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 . . .; ¶

(b) in public employment in general . . .; ¶

(c) in public employment in the same or comparable jurisdictions; ¶

(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 . . .; ¶

(6) The financial impact on the governing unit, its residents and taxpayers . . .; ¶

(7) The cost of living; ¶

(8) The continuity and stability of employment including seniority rights ¶

. . .; and ¶

(9) Statutory restrictions imposed on the employer. . . . ¶

[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). ¶

We vacate the award and remand to a new arbitrator for the following reasons: First, the arbitrator’s award did not analyze the subsection 16g factors as required by law. As an example, under N.J.S.A. 34:13A-16g(6) 8/ (the financial impact on the governing unit, its residents and taxpayers) the arbitrator is required to analyze and consider the factors of that subsection in any award to the extent that evidence is introduced as set forth in N.J.S.A. 34:13A-16g.9/ In this case, numerous exhibits were introduced into evidence regarding the financial condition of the Borough and the Police Department budget with dollar amounts provided. The arbitrator’s discussion of the 16g(6) factors is completely bereft of the required statutory analysis and he also did not indicate whether he believed they were relevant.10/ ¶

Second, other than the interests and welfare of the public factor, where the arbitrator stated that it was a “key factor” and ranked it as the “number one criterion in importance,” it is not entirely clear the relevance and weight he gave to the other factors in all cases. Even where the award appears to indicate that a factor may not be relevant, he did not satisfactorily explain why the factor is not relevant. For example, under the stipulations of the parties factor, the arbitrator merely stated that “Stipulations of the parties were made concerning three minor issues” without identifying the stipulations or providing any other explanation. Further, under the lawful authority of the employer factor,11/ the arbitrator did not state if it was relevant, and if not, satisfactorily explain why, as his complete analysis only consisted of the following sentence: “There is nothing in the statutes which has precluded complete and comprehensive submissions for resolution at this time.” Similarly, under the statutory restrictions imposed on the employer factor,12/ the arbitrator only provided the following: “No issues have arisen which would suggest that these restrictions are likely to become a limiting factor during the term of this agreement.” ¶

Third, we note that the arbitrator concluded his discussion of the statutory factors with the following statement: ¶

My consideration of the parties proposals is governed by law. In arriving at this award, I conclude that all the statutory factors have some relevance, but not all are entitled to equal weight. My focus in the above award has been essentially on wages and benefits. I believe I have dealt fairly with the issues raised by both parties in reaching an overall new contract of employment. ¶

However, this conclusory statement does not relieve the arbitrator of the statutory requirement to carefully consider and to address all the 16g factors, whether deemed relevant or not relevant, as set forth above. See Burlington County Prosecutor’s Office and PBA Local 320, P.E.R.C. No. 2012-61, 39 NJPER 20 (¶4 2012), rem’d 39 NJPER (¶2013) . ¶

Finally, the arbitrator did not comply with N.J.S.A. 34:13A-16f(5) because he did not certify that he took the statutory limitations imposed on the local levy cap into account in making the award. ¶

Since we are vacating the award and remanding the case to a new arbitrator, we need not address the other arguments made on appeal or cross-appeal by the parties.13/ ¶

OrderORDER ¶

The interest arbitration award is vacated and this matter is remanded for appointment of a new arbitrator. ¶

BY ORDER OF THE COMMISSION ¶

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

ISSUED: August 8, 2013 ¶

Trenton, New Jersey ¶

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

2/ N.J.S.A. 2A:24-8 provides in pertinent part: ¶

“The court shall vacate the award in any of the following cases: ¶

a. Where the award was procured by corruption, fraud or undue means; ¶

d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.” ¶

3/ The award was due to the Commission on June 24, 2013; it was executed by the arbitrator on June 28 and filed with the Commission on June 29. ¶

4/ N.J.S.A. 34:13A-16f(5) provides in pertinent part: ¶

“The decision of an arbitrator or panel of arbitrators shall include an opinion and an award, and shall be rendered within 45 days of the commission’s assignment of that arbitrator. ¶

Each arbitrator’s decision shall be accompanied by a written report explaining how each of the statutory criteria played into the arbitrator’s determination of the final award. The report shall certify that the arbitrator took the statutory limitations imposed on the local levy cap into account in making the award.” ¶

5/ We deny the Borough’s request for oral argument. The issues have been fully briefed. ¶

6/ Neither the PBA nor the Borough allege that the arbitrator violated the 2% cap under N.J.S.A. 34:13a-16.7 (b) in his award. ¶

7/ The arbitrator discussed the statutory criteria after issuing his award. ¶

8/ N.J.S.A. 34:13A-16g(6) provides: ¶

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. ¶

9/ N.J.S.A. 34:13A-16g provides in pertinent part: ¶

...in every interest arbitration proceeding, the parties shall introduce evidence regarding the factor set forth in paragraph (6) of this subsection and the arbitrator shall analyze and consider the factors set forth in paragraph (6) of this subsection in any award. (Emphasis added). ¶

10/ The arbitrator’s complete discussion of the 16g(6) factors: ¶

“The Financial Impact on the Governing Unit, Its Residents and Taxpayers ¶

The terms of this award are not anticipated to have a negative effect on the municipal purposes element or local property taxes, although the costs of government derived from the impact of the hurricane have threatened to stretch the budget. There has been considerable thought given to the need for additional funds to provide for the expanded needs of the public due to the aftermath of the hurricane. To date, this an ongoing concern and will probably not be resolved for some time to come. Therefore, it is very possible that there will be an impact on the local budget.” ¶

11/ N.J.S.A. 34:13A-16g(5) provides: ¶

“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.).” ¶

12/ N.J.S.A. 34:13A-16g(9) provides: ¶

“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).” ¶

13/ We find that the fact that the award was filed outside the statutory 45 day time limit does not affect the validity of the award since N.J.S.A. 34:13A-16 allows for the Commission to take appropriate remedial action with respect to arbitrators who do not comply with the tenets of the statute. ¶