P.E.R.C. No. 2026-22, Garfield B/E

CaptionSTATE OF NEW JERSEY BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION In the Matter of GARFIELD BOARD OF EDUCATION, Petitioner, -and- Docket No. SN-2026-004 GARFIELD FEDERATION OF TEACHERS, Respondent. ¶

SynopsisSYNOPSIS ¶

The Public Employment Relations Commission denies the Board’s request for a restraint of binding arbitration of the Garfield Federation of Teachers’ (GFT) grievance alleging that the Board violated the parties’ collective negotiations agreement (CNA) by requiring GFT members to pay more than the negotiated co-payments for generic and name brand medication. The Commission finds that the level of health benefits such as co- payments are mandatorily negotiable unless preempted and that, pursuant to N.J.S.A. 52:14-17.46.13(a)(1), the Board purchases prescription drug benefits separately from its School Employee Health Benefits health insurance plan “without limitation or restriction.” Therefore, the Commission holds that the prescription drug plan design requirements of N.J.S.A. 52:14-17.46.13(f) are not applicable and the negotiated co- payments are not statutorily preempted. ¶

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 GARFIELD BOARD OF EDUCATION, Petitioner, -and- Docket No. SN-2026-004 GARFIELD FEDERATION OF TEACHERS, Respondent. ¶

AppearancesAppearances: ¶

For the Petitioner, The Busch Law Group, LLC, attorneys (Ari D. Schneider, of counsel) ¶

For the Respondent, Weissman & Mintz, LLC, attorneys (Kevin P. McGovern, of counsel) ¶

DECISION ¶

On July 31, 2025, the Garfield Board of Education (Board) filed a scope of negotiations petition seeking a restraint of binding arbitration of a grievance filed by the Garfield Federation of Teachers (GFT). The grievance asserts that the Board violated Article XXI.C. of the parties’ collective negotiations agreement (CNA) by requiring GFT members to pay more than the agreed upon $5 co-payments for generic medications and $10 co-payments for brand name medications. ¶

The Board filed briefs, an exhibit, and the certification of its Superintendent of Schools, Dr. Richard Tomko. The GFT filed a brief, exhibits, and the certification of its Treasurer, Emilia Kata. These facts appear. ¶

The GFT represents teachers and staff employed by the Board as listed in the CNA’s Recognition clause. The Board and GFT are parties to a CNA with a term of July 1, 2022 through June 30, 2027. The grievance procedure ends in binding arbitration. ¶

Article XXI.C. of the parties’ CNA provides: ¶

C. The Board shall provide each employee, including family coverage, with a prescription plan on a $5.00 and $10.00 co- payment basis. ¶

Superintendent Tomko certifies that during the 2024-2025 school year, the cost of prescription drug benefits coverage applicable to the New Jersey Health Benefits Plan increased significantly for GFT members, but that the increase was not caused by the Board. Tomko further certifies the Board continued to provide the prescription plan as described in the CNA. ¶

GFT Treasurer Kata certifies that the Board offers a number of health care plans, including Direct 10 and the New Jersey Educators Health Plan (NJEHP). Her understanding is that these plan offerings are consistent with the statute governing benefits for school employees and requires employee contributions toward the costs of their health care and prescription benefit coverage. Kata certifies that the prescription drug benefit is purchased separately by the Board and is not included in the state health insurance coverage. Kata certifies that, historically, the $5.00 co-payment required by Article XXI.C of the CNA applies to generic medications, and the $10.00 co-payment is applied to brand name medications. These co-payments applied regardless of which health benefits option the employee selected. ¶

The Board contracts with BeneCard Services, LLC (BeneCard) to provide prescription drug benefits. In October 2024, the Board approved a Renewal Agreement with BeneCard. Subsequent to that approval, open enrollment was conducted for employees to select their health benefits coverage. ¶

Kata certifies that in January 2025, GFT members began complaining that brand name medications were no longer covered by the prescription plan. She certifies that in April 2025 the GFT discovered that in addition to losing name brand medication coverage, GFT members were paying higher co-pays than required by the CNA for both generic and name brand medications. ¶

On January 13, 2025, Kata emailed the Business Administrator’s Executive Assistant inquiring whether the terms of their prescription benefit coverage had changed. In response, the Executive Assistant advised that brand name medications would no longer be covered for employees who had elected health care coverage under the NJEHP and that the prescription coverage and health care coverage had to “switch together as per state mandate.” On January 15, the GFT responded that its members had not been informed of that during open enrollment, and noted that in previous years employees had switched health care plans without any change to their prescription benefit coverage. ¶

On February 4, 2025, the GFT filed a Level 2 grievance alleging a violation of Article XXI.C. The grievance alleged that “the District unilaterally modified BeneCard level of coverage for employees enrolled in the New Jersey Educators Health Plan (NJEHP) without prior notice to employees or to the GFT.” The grievance requested the specific statute or regulation relied upon by the Board for making these changes, as well as a copy of the Fourth Amended Agreement with BeneCard. Kata certifies that the GFT did not receive a response. The GFT then moved the grievance to Level 3 on February 24, 2025. Kata further certifies that the GFT again requested that the Board provide the specific statute or regulation upon which it relied, as well as the Fourth Amended Agreement with BeneCard. Kata contends that the Board ignored the GFT’s requests, except for indicating that there is no “Fourth” amended agreement and the term “Fourth” was a typographical error. On March 10, 2025, the GFT filed a Request for Submission of a Panel of Arbitrators. This petition ensued. The arbitration hearing has been postponed pending this decision. ¶

The Commission’s inquiry on a scope of negotiations petition is quite narrow. We are addressing a single issue in the abstract: whether the subject matter in dispute is within the scope of collective negotiations. The merits of the GFT’s claimed violation of the agreement, as well as the Board’s contractual defenses, are not in issue, because those are matters for the arbitrator to decide if the Commission determines that the question is one that may be arbitrated. Ridgefield Park Ed. Ass’n v. Ridgefield Park Bd. of Ed., 78 N.J. 144, 154 (1978). ¶

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]. ¶

We must balance the parties’ interests in light of the particular facts and arguments presented. City of Jersey City v. Jersey City POBA, 154 N.J. 555, 574-575 (1998). ¶

The Board asserts that arbitration should be restrained because the CNA’s language contained in Article XXI.C. pertaining to prescription drug co-pays is statutorily preempted. The Board argues that the NJEHP “plan design” requires that members pay the difference in cost between generic and brand name medications, plus the brand name copayment. The Board acknowledges that employers who participate in the School Employees’ Health Benefits Program (SEHBP) are permitted by law to enter into a medical-only plan while purchasing pharmacy benefits separately, “without limitation or restriction.” However, the Board asserts that its separate purchase of prescription drug benefits through BeneCard must still be subject to the generic and brand co- payment parameters of the NJEHP plan design and preempt the co- pays in Article XXI.C. of the CNA. ¶

The GFT asserts that the level of prescription drug benefits and costs of co-pays are mandatorily negotiable subjects and that the dispute in this case is not specifically preempted. The GFT argues that the Board unilaterally changed BeneCard prescription benefit coverage for employees enrolled in the NJEHP when their co-pays for generic and name brand prescription drugs increased beyond the levels set forth the CNA. The GFT contends that the SEHBP statute explicitly provides employers the option of separately purchasing prescription drug benefits. The GFT asserts that as the Board has chosen to purchase prescription drug benefits through BeneCard, it is not constrained by the statutory pharmacy benefits parameters applicable to prescription benefits offered through a SEHBP medical plan such as the NJEHP. ¶

The level of health benefits is a mandatorily negotiable term and condition of employment unless preempted by statute or regulation. See In re Council of New Jersey State College Locals, 336 N.J. Super. 167 (App. Div. 2001), aff’ g P.E.R.C. No. 2000-12, 25 NJPER 402 (¶30174 1999); Essex Cty., 47 NJPER 429 (¶102 App. Div. 2021), aff’ g P.E.R.C. No. 2020-40, 46 NJPER 359 (¶88 2020); and E. Rutherford Bor., 36 NJPER 33 (¶15 App. Div. 2010), aff’ g P.E.R.C. No. 2009-15, 34 NJPER 289 (¶103 2008). ¶

However, “[n]egotiation is preempted only if the [statute or] regulation fixes a term and condition of employment ‘expressly, specifically and comprehensively.’” Bethlehem Tp. Bd. of Ed. v. Bethlehem Tp. Ed. Ass’n, 91 N.J. 38, 44 (1982) (quoting Council of New Jersey State College Locals v. State Board of Higher Ed., 91 N.J. 18, 30 (1982)). The statute must “speak in the imperative and leave nothing to the discretion of the public employer.” Local 195, 88 N.J. at 403-404; State v. State Supervisory Employees Ass’n, 78 N.J. 54, 80 (1978). ¶

Chapter 44’s provisions concerning SEHBP health care benefits plans are codified at N.J.S.A. 52:14-17.46.13, et seq. These statutes became effective on July 1, 2020, and require that the SEHBP, beginning on January 1, 2021, offer three SEHBP health care plans (NJEHP, SEHBP Direct 10, and SEHBP Direct 15). Regarding the purchase of pharmacy and dental benefits outside of a SEHBP medical plan, N.J.S.A. 52:14-17.46.13(a)(1) provides, in pertinent part: ¶

Employers that participate in the School Employees’ Health Benefits Program shall retain the ability to enter the program for medical only plans and may separately purchase pharmacy and dental benefits outside of the program without limitation or restriction. ¶

[N.J.S.A. 52:14-17.46.13(a)(1); emphasis added.]1/ ¶

N.J.S.A. 52:14-17.46.13(f) sets forth the following plan design elements for prescription drug coverage under the NJEHP: ¶

Pharmacy Out-of-Pocket Maximum: $1,600/$3,200 Family (Indexed Annually Pursuant to Federal Law) ¶

Generic Copayment: $5 Retail 30 Day Supply/$10 Mail 90 Day Supply ¶

Brand Copayment: $10 Retail 30 Day Supply/$20 Mail 90 Day Supply ¶

Mandatory Generic: Member Pays Difference in Cost Between Generic and Brand, Plus Brand Copayment ¶

Formulary: Closed Formulary as contracted with the Pharmacy Benefit Manager and the School Employees’ Health Benefits Commission ¶

[N.J.S.A. 52:14-17.46.13(f); emphasis added.] ¶

The Board argues that this underlined statutory language requires employees in the NJEHP health plan to pay the difference in cost between generic and brand name medications and therefore preempts Article XXI.C. of the CNA. However, the record demonstrates that the Board, pursuant to N.J.S.A. 52:14- 17.46.13(a)(1), continued to purchase separate prescription drug benefits through BeneCard for its employees for the 2025-2026 school year, including those in the NJEHP plan. The Board has not identified any statutory or regulatory provision that states that the requirement of N.J.S.A. 52:14-17.46.13(f) that members pay the difference in cost between generic and name brand prescription drugs is applicable to prescription plans purchased separately from the NJEHP medical plan. Accordingly, as N.J.S.A. 52:14-17.46.13(a)(1) allows the Board to purchase prescription benefits outside of the NJEHP plan “without limitation or restriction,” there is nothing in this statutory scheme that expressly, specifically, and comprehensively preempts binding arbitration over the GFT’s grievance alleging violation of the Article XXI.C. prescription co-pay amounts. Bethlehem Tp. Bd. of Ed., 91 N.J. at 44. We therefore find that the GFT’s grievance is mandatorily negotiable and legally arbitrable. ¶

OrderORDER ¶

The request of the Garfield Board of Education for a restraint of binding arbitration is denied. ¶

BY ORDER OF THE COMMISSION ¶

Chair Hennessy-Shotter, Commissioners Davey, Eaton, Higgins, Hines, and Papero voted in favor of this decision. None opposed. ¶

ISSUED: January 29, 2026 ¶

Trenton, New Jersey ¶

Note1/ Similarly, N.J.S.A. 52:14-17.46.13(d), which required that a fourth health care plan (Garden State Health Plan) be offered by January 1, 2022, provides: “Employers that participate in the School Employees’ Health Benefits Program shall retain the ability to enter the program for medical only plans and may separately purchase pharmacy and dental benefits outside of the program without limitation or restriction.” (emphasis added). ¶