P.E.R.C. No. 2025-41, Allendale Boro

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of BOROUGH OF ALLENDALE, Respondent, -and- Docket No. CO-2024-137 ALLENDALE PBA LOCAL 217, Charging Party. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission denies an appeal by Allendale PBA Local 217 from the Director of Unfair Practices’ refusal to issue a complaint on its unfair practice charge against the Borough of Allendale. The charge alleged the Borough violated the Act by direct dealing with certain employees through entering a settlement agreement resolving Superior Court litigation which conflicted with the terms of a grievance settlement regarding retiree health benefits contributions, and by subsequently repudiating the grievance settlement and CNA. The Commission finds the Director properly found the PBA’s direct dealing charge was untimely, and, accordingly, a legal determination cannot be made on the enforceability of the settlement agreement. For the same reason, the Commission finds there is no viable claim that the Borough repudiated either the grievance settlement or the CNA when it abided by the settlement agreement upon the retirement of an officer who was a party to it. The Commission further finds no inference of bad faith arises because the PBA and the Borough, in the grievance settlement, explicitly reserved their rights with respect to whether the settlement agreement controlled the level of retiree medical insurance contributions to be made by the officers who were party to it. ¶

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 ALLENDALE, Respondent, -and- Docket No. CO-2024-137 ALLENDALE PBA LOCAL 217, Charging Party. ¶

AppearancesAppearances: ¶

For the Respondent, Wiss Law, P.C., attorneys ¶

(Raymond R. Wiss, of counsel) ¶

For the Charging Party, Michael A. Bukosky & Associates, L.L.C., attorneys ¶

(Michael A. Bukosky, of counsel) ¶

DECISION ¶

On February 19, 2025, the Charging Party, Allendale PBA Local 217 (PBA), filed an appeal from a decision of the Director of Unfair Practices issued on February 5, 2025, D.U.P. No. 2025- 6, 51 NJPER 273 (¶62 2025), refusing to issue a complaint on the PBA’s unfair practice charge against the Respondent, Borough of Allendale (Borough). In its charge, filed on March 8 and amended on March 12, 2024, the PBA alleged the Borough violated subsections 5.4a(1), (2) and (5)1/ of the New Jersey Employer- Employee Relations Act (Act), N.J.S.A. 34:13A-1 et seq., by direct dealing with certain employees through entering into a settlement which resolved Superior Court litigation (Court Settlement) which conflicted with the terms of a grievance settlement ( “Grievance Settlement” ) regarding retiree health benefits contributions. We have reviewed the entire record, and we summarize the pertinent facts as follows. ¶

The Court Settlement resolved litigation initiated in March 2022 by four officers who challenged the Borough’s promotional process for the position of Chief of Police. The four litigants were PBA unit members, but the PBA was not a party either to that litigation or the Court Settlement reached in April 2023. The Grievance Settlement, dated May 10, 2023, resolved a grievance filed by the PBA in December 2022 over retiree health benefits. ¶

A portion of the Court Settlement addressed retiree health benefit contributions related to P.L. 2011, c. 78 (Chapter 78, further discussed infra). As detailed by the Director, in the Court Settlement, both of the “employee litigants who were subject to Chapter 78 . . . agreed that their ‘Chapter 78 contribution in retirement will be at Tier 4 levels.’ The other two . . . were exempt under Chapter 78 based on years of service.” D.U.P. No. 2025-6, 51 NJPER at 274. Additionally, the Borough agreed to give each litigant a monetary sum, and to promote two of the litigants including one of those subject to Chapter 78. ¶

The PBA’s December 2022 grievance was “filed for not having one hundred (100%) percent of a member’s health benefits paid by the Borough . . . upon retirement as described in Article XIV” of the parties’ collective negotiations agreement (CNA) then in effect, which had a term from January 1, 2021, through December 31, 2024. At the time the grievance was filed, Article XIV provided, in pertinent part: ¶

In accordance with the standards set forth in the New Jersey State Health Benefits Plan, as is provided above, the Borough shall provide a program of retiree medical coverage for retirees and their families at the Borough’s sole cost and expense, consistent with New Jersey law. The level and terms of coverage and benefits set forth under this plan shall be as are presently set forth under the 1991 New Jersey State Health Benefits Plan, or its equivalent. ¶

* * * ¶

All employees covered by this Agreement shall make such contribution as is mandated by Chapter 78 during the term of this Agreement. (Italics in original). ¶

The Grievance Settlement expressly modified and amended the 2021- 2024 CNA, adding the following retiree health benefits contribution scheme: ¶

• For any employee having ten (10) or more years of creditable PFRS service as of the date of this MOU, and who hereafter retires with twenty five (25) or more years of creditable PFRS service, or retires pursuant to a disability retirement, such employee shall contribute twenty five (25) percent of the cost of his/her medical insurance coverage during retirement. ¶

• For any employee having less than ten (10) years of creditable PFRS service as of the date of this MOU, and who hereafter retires with twenty five (25) or more years of creditable PFRS service, or retires pursuant to a disability retirement, such employee shall contribute thirty five (35) percent of the cost of his/her medical insurance coverage during retirement. ¶

• For any employee having twenty (20) or more years of creditable PFRS service as of the date of this MOU, and who retires prior to December 31, 2023 under either a regular service retirement or a disability retirement, such employee shall contribute fifteen (15) percent of the cost of his/her Medical insurance coverage during retirement. ¶

• Upon attaining sixty five (65) years of age, all employees shall enroll in Medicare at which point Medicare will provide primary coverage and the Borough’s coverage shall be secondary. The Borough will pay the cost of a retired employee[’ ]s Medicare Part B and Medicare Part D coverage during retirement. ¶

The Grievance Settlement also contains the following statement regarding the Court Settlement: ¶

The Borough has heretofore entered into a Settlement Agreement and General Release (the “Agreement” ), in connection with a certain litigation (BER-L-1330-22), with certain members of the PBA which it asserts is controlling as to the level of retiree medical insurance contributions to be made by the parties thereto, notwithstanding the terms of this MOU. The Borough and the PBA reserve all rights, claims and defenses with respect to the foregoing claim. ¶

As noted by the Director, a PBA representative’s signature appears directly under this “reservation of rights” paragraph of the May 10, 2023, Grievance Settlement. ¶

Because this dispute involves Chapter 78, and the specifics of that law are not otherwise detailed in the record, we add the following by way of factual background. Effective June 28, 2011, Chapter 78 required non-exempt public employees and retirees to contribute to the cost of their health care benefits coverage, paying a share of the premium based upon their salary/retirement allowance. This contribution scheme was implemented over four years, with each employee/retiree paying one-fourth their contribution in year one (Tier 1), one-half in year two (Tier 2), three-fourths in year three (Tier 3), and the full rate in year four (Tier 4). N.J.S.A. 40A:10-21.1(a) and (b)(1). Chapter 78 expired four years after its effective date, see P.L. 2011, c. 78, § 83, but parties are bound by its requirements throughout the CNA in which they reach Tier 4 rates. Health benefits contributions are fully negotiable in the next CNA thereafter. N.J.S.A. 40A:10-21.2. ¶

Whether and/or exactly when full Chapter 78 implementation occurred here does not appear to be an issue in this dispute. But based upon the Court Settlement’s references to “Tier 4 levels” and the Grievance Settlement’s adoption of a retiree contribution scheme different from Chapter 78, we will assume negotiations over those settlements took place after the expiration of the CNA during which PBA members reached full implementation. The Director also found (based on the pre- Grievance Settlement language of the 2021-2024 CNA) that the parties initially “agreed” to have Chapter 78 contributions “continue through the term of the CNA that ended at the end of 2024.” 51 NJPER at 274. ¶

Regarding the Court Settlement, the PBA in its amended charge alleges it was neither a party nor a participant in that lawsuit and had no knowledge of or input into its settlement. It further alleges that through the Court Settlement the Borough negotiated directly with unit employees without first negotiating with the majority representative, in violation of 5.4a(5) of the Act. The PBA also alleges that during negotiation of the Grievance Settlement it took the position that any individual agreements reached in the Court Settlement were a nullity. The amended charge alleges that the terms of the individual agreements in the Court Settlement involving retiree health benefit premium contributions did not become operative until November 1, 2023, when one of the individual members who was a party to the Court Settlement retired. ¶

Regarding the Grievance Settlement, the amended charge alleges the PBA understood the Borough would be obligated to comply with the “PBA agreements” relating to retiree health benefits as they became operative when officers retired, while the Borough took the position that its agreements with individuals through the Court Settlement were lawful. The PBA further alleges the Borough indicated it would consider the PBA’s position when a conflict arose. Thus, the PBA alleges, at the time the Grievance Settlement was reached both parties reserved their rights as to any such conflict. The PBA alleges that in January of 2024 it learned that the Borough did not comply with the Grievance Settlement and instead acted pursuant to the individual agreements in the Court Settlement. The amended charge alleges the Borough declined to answer the PBA’s January 26 and 29 requests that the Borough honor the Grievance Settlement; and that on February 6 it demanded that the Borough comply with the Grievance Settlement and cease honoring individual agreements which conflicted with the PBA agreements. The PBA alleges that in failing to honor the Grievance Settlement the Borough repudiated its agreement with the PBA. ¶

On appeal, the PBA argues that in his decision the Director: misstated facts relating to the grievance at issue; erroneously determined the Commission lacked jurisdiction to enforce the grievance settlement agreement; and incorrectly determined the charge was not timely filed. The PBA also argues that it never waived its rights to negotiate retiree health benefits, and that this matter is not a grievance dispute. ¶

In opposition, the Borough argues that the PBA presents no justification for overturning the Director’s decision, and that the PBA’s charge was properly dismissed. ¶

Our complaint-issuance standard is set forth in N.J.A.C. 19:14-2.1(a), in pertinent part as follows: ¶

[I]f it appears to the Director of Unfair Practices that the allegations of the charge, if true, may constitute unfair practices on the part of the respondent, and that formal proceedings should be instituted in order to afford the parties an opportunity to litigate relevant legal and factual issues, the Director shall issue and serve a formal complaint[.] (Emphasis added.) ¶

Applying that standard here, we sustain the Director’s refusal to issue a complaint for the following reasons. The harm of direct dealing is that it undermines the PBA’s representation efforts and has a potential chilling effect during contract negotiations. City of Paterson, P.E.R.C. No. 2025-10, 51 NJPER 126, 132-133 (¶32 2024). However, the Director properly found that the PBA’s charge was untimely in connection with the direct- dealing and refusal-to-negotiate allegations as they pertain to the Court Settlement. N.J.S.A. 34:13A-5.4(c), quoted by the Director, states in pertinent part: ¶

...no complaint shall issue based upon any unfair practice occurring more than 6 months prior to the filing of the charge unless the person aggrieved thereby was prevented from filing such a charge in which event the 6 months period shall be computed from the day he was no longer so prevented. ¶

The Director concluded the PBA’s charge (filed March 8 and amended March 12, 2024) “was not filed originally until roughly nine to ten months after the PBA had knowledge of the Borough’s alleged direct dealing.” 51 NJPER at 276. The Director based this finding on the date the Grievance Settlement was signed, May 10, 2023, and on allegations in the amended charge,2/ which he found established that the PBA knew of the Borough’s alleged direct dealing with unit employees “by May or June 2023.” Id. The Director found the PBA also knew by then “that the Borough was refusing to negotiate regarding those employees’ contributions since the Grievance Settlement expressly provided that the Borough took the position that the Court Settlement controlled the contribution levels for those employees.” Id. The Director further found the PBA alleged no “facts indicating it was somehow prevented from filing the unfair practice charge within the six-month period since it was first aware of the Borough’s alleged direct dealing and refusal to negotiate.” Id. ¶

On appeal, the PBA points to no evidence in the record to refute the Director’s findings in this regard. We agree with the Director that the six-month statute of limitations runs from the date the PBA first became aware of the Borough’s alleged direct dealing and refusal to negotiate in connection with the Court Settlement, not from the later retirement date of an officer who was a party to it. ¶

We reject the PBA’s speculative argument that its direct dealing charge would have been dismissed as “moot” or “unripe” had it been filed before the occurrence of a particular event governed by specific terms in the Court Settlement. We further agree with the Director that there is no evidence the PBA was prevented from timely filing a direct dealing charge after it became aware of the Court Settlement while negotiating the Grievance Settlement. In the Grievance Settlement, both parties explicitly reserved their rights on the issue of which agreement controlled as to the parties in the Court Settlement. These certainly include the PBA’s right to file an unfair practice charge within the six-month filing period, and the Borough’s right to challenge same on timeliness grounds. ¶

A timely direct-dealing claim would have at least raised the possibility that the Court Settlement could be ruled unenforceable to the extent its provisions conflicted with the terms of the CNA. Troy v. Rutgers, 168 N.J. 354, 375-376 (2001) ( “individual contracts are void only to the extent that they conflict with collective agreements or interfere with the principles of collective negotiation” ). See also, New Jersey Transit Auth. v. New Jersey Transit PBA, Local 304, 314 N.J. Super. 129, 140 (App. Div. 1998); Lullo v. International Ass’n of Fire Fighters, 55 N.J. 409, 428 (1970). ¶

However, because the PBA’s direct dealing charge cannot be adjudicated since it was untimely, the allegation that the Court Settlement’s provisions are void (as a product of either illegal direct dealing or unilateral action of the Borough) cannot be established as a matter of law. ¶

For the same reason, there is no viable claim that when the Borough abided by the Court Settlement upon the retirement of an officer who was a party to it, the Borough repudiated either the Grievance Settlement or the CNA as modified by it. Again, a legal determination cannot be made on the enforceability of the Court Settlement based upon the untimely allegation of direct dealing. ¶

In the absence of a timely direct-dealing claim, the provisions of the Grievance Settlement are also not “so clear that an inference of bad faith arises” from the Borough’s decision to abide by the Court Settlement upon the retirement of an officer who was a party to it. New Jersey Dept. of Human Services, P.E.R.C. No. 84-148, 10 NJPER 419, 423 (¶15191 1984). We also find that no such inference arises because both the PBA and the Borough, in the Grievance Settlement, expressly reserved “all rights, claims and defenses with respect to” whether the Court Settlement “is controlling as to the level of retiree medical insurance contributions to be made by the parties thereto.” Therefore, we find the Director’s reasoning on this issue was correct: ¶

[T]he clear terms of the Grievance Settlement provide that the Borough did not agree that the Grievance Settlement applied to those employees’ contributions. It is unclear from the amended charge or the PBA’s position statement, how the Borough could have repudiated or even breached a Grievance Settlement where the parties specifically acknowledge and agree that they did not reach a meeting of the minds regarding the contribution levels of the employees covered by the Court Settlement. There is no claim that the Borough is failing to apply the terms of the Grievance Settlement to employees who are not subject to the Court Settlement. Quite simply, the facts alleged establish that the Borough is acting consistent with the reservation of rights clause the parties included in the Grievance Settlement, and therefore cannot be said to have repudiated that agreement. ¶

[51 NJPER at 276.] ¶

We further agree with the Director that, while the PBA may pursue a grievance alleging the Borough is requiring certain employees to make improper health care contributions, that claim is not within our unfair practice jurisdiction because the mechanism for enforcing a collective agreement is a grievance, not an unfair practice charge. 51 NJPER at 275, citing, New Jersey Turnpike Authority, P.E.R.C. No. 2006-13, 31 NJPER 284-85 (¶111 2005) (Employers “need not negotiate over benefit changes for employees who are already retired” ); Voorhees Tp. P.E.R.C. No. 2012-13, 38 NJPER 155 (¶44 2011), aff’d, 39 NJPER 69 (¶27 App. Div. 2012) (unions have “a cognizable interest in ensuring that retired employees receive whatever retirement benefits were contracted for in the agreement that was in effect at the time an employee retired” ). ¶

OrderORDER ¶

Based upon the foregoing, the appeal of the Allendale PBA Local 217 is denied and its charge is dismissed. ¶

BY ORDER OF THE COMMISSION ¶

Chair Hennessy-Shotter, Commissioners Eaton, Ford, Higgins and Kushnir voted in favor of this decision. None opposed. Commissioner Papero recused himself. ¶

ISSUED: April 24, 2025 ¶

Trenton, New Jersey ¶

Note1/ These provisions prohibit public employers, their representatives or agents from: “(1) Interfering with, restraining or coercing employees in the exercise of the rights guaranteed to them by this act; (2)Dominating or interfering with the formation, existence or administration of any employee organization; (5) Refusing to negotiate in good faith with a majority representative of employees in an appropriate unit concerning terms and conditions of employment of employees in that unit, or refusing to process grievances presented by the majority representative.” ¶

2/ The Director noted, “[a] PBA officer . . . executed the Grievance Settlement that specifically referenced the litigation and resulting Court Settlement on May 10, 2023.” Paragraph 13 of the amended charge states, in relevant part: “a comprehensive Memorandum of Agreement [the Grievance Settlement] was reached on 6/19/2023 which comprehensively addressed the amount of premium contributions for retirees.” ¶