[103 NJSuper Page 241] This action is brought by a group of employees of the former Newark City Hospital (hospital) on behalf of themselves and others in the same class seeking a declaratory judgment relating to their status as employees of the New Jersey College of Medicine and Dentistry
(college), which now owns and operates the hospital. By order of the court, Essex Council Number 1, New Jersey Civil Service Association, Inc. was permitted to intervene as a party plaintiff, asserting the same position as co-plaintiffs on behalf of approximately 200 members of the Association who are also employees at the hospital.
The matter came before the court initially on plaintiffs' application for preliminary restraints pending final hearing, which application was denied. Because of the public importance of the issues involved in the litigation and the obvious need for early disposition, the court suggested that the parties stipulate that the pleadings, affidavits, briefs and arguments submitted on the motion for preliminary restraints be considered by the court as if both sides had filed counter-motions for summary judgment. Since the material facts are not in dispute, counsel for the respective parties stipulated to that effect and subsequently perfected the record by filing formal motions for summary judgment.
The litigation stems from the take-over of the hospital complex by the college on July 1, 1968 pursuant to an agreement between the City of Newark and the college, whereby the city conveyed and transferred to the college without monetary consideration all the land, buildings, equipment, furnishings and supplies representing the tangible assets of the hospital owned and operated by the city for many years. Under this agreement the college accepted "complete and sole responsibility" for the operation and management of the hospital. Although the city conveyed and transferred absolute title to the college, the latter agreed to reconvey the hospital assets to the city in the event that it ceased to operate as a college in the State of New Jersey.
In addition to provisions involving the care of the indigent, the continuation of the school of nursing, and the maintenance of the ambulance service, the city incorporated in the agreement various provisions relating to the existing municipal employees assigned to the hospital prior to the take-over. Some of these provisions dealt with the preservation
of employees' pension and retirement benefits; others dealt with the continued maintenance of hospitalization and medical coverage; still others obligated the hospital to grant certain minimum benefits to employees regarding salaries, vacations, sick pay, promotions, etc.
It is apparent from the agreement and the preceding negotiations that there existed a sharp dispute between the city and the college as to the applicability of the civil service laws and regulations to the hospital employees after the commencement of the college's ownership and administration. In any event, this was not resolved by the agreement, which in fact contained provisions which would become applicable if civil service laws were held to control and alternate provisions which would become applicable if civil service laws were held not to control.
Nevertheless, regardless of the applicability of all the civil service laws to these employees, the college agreed to comply with those provisions of the Civil Service Act which prohibit removal, suspension, demotion or loss of position of employees without cause.
Plaintiffs contend that all "permanent" employees on the city payroll at the time of the change in administration, numbering approximately 750, are entitled to full civil service status as state employees, with the full panoply of rights and benefits guaranteed by the Civil Service Act and regulations of the Civil Service Commission. Although no declaratory relief is sought for approximately 500 "temporary" employees or for employees who may be hired in the future, it is manifest that the court's ruling as to the civil service status of current permanent employees will affect these other classes as well.
In seeking a declaration that the permanent employees are entitled to the full benefits and rights guaranteed by civil service status, plaintiffs seek protection which goes beyond the basic guarantees undertaken by the college in the agreement.
Examples of the many additional controls and guarantees which would be required if the civil service laws are found applicable are the following: a classification plan approved and supervised by Civil Service Commission representatives, N.J.S.A. 11:5-1, 11:7-1; Civil Service approval for the creation of new positions, promotions, transfers, demotions, etc., N.J.S.A. 11:7-5; determination by the Commission as to designation of positions in classified and unclassified service, N.J.S.A. 11:7-11, 13; establishment of a compensation plan by the Commission and payment in accordance with such plan, N.J.S.A. 11:8-2, 3; use of competitive tests for employment eligibility tests, N.J.S.A. 11:9-1, 2; filling of vacancies from eligibility lists, N.J.S.A. 11:10-1 to 6; regulations as to promotion following competitive tests, N.J.S.A. 11:10-7; provisions for emergency appointments, N.J.S.A. 11:11-2; regulations as to probationary period of employment, N.J.S.A. 11:12-1, 2; establishment of service standards and ratings by the Commission, N.J.S.A. 11:13-1; regulation by the Commission of hours of work, vacations and sick leave, N.J.S.A. 11:14-1 to 4; establishment of machinery for appeal to the Commission in connection with suspension, demotion and removal, N.J.S.A. 11:15-1 to 6; reinstatement of employees separated for economy reasons, N.J.S.A. 11:15-10.
The college asserts that it should not be hamstrung in its effort to rehabilitate the hospital and bring its service up to the best professional standards by the imposition of the many limitations and controls imposed by civil service laws and regulations, and it contends that its own policies afford adequate protection and security to employees without the implementation of civil service requirements. It seeks to be free to make radical changes in the quality and quantity of the staff in order to achieve its goal of developing a first-rate hospital.
Plaintiffs are fully in accord with the laudable objective of an improved hospital and service, but assert that this
objective can be obtained just as readily within the framework of civil service laws and regulations.
It is manifest, of course, that in the context of this litigation this court cannot concern itself with the question of whether the imposition of civil service laws upon the relationship between the college and its employees would aid or impair the efficient administration and improvement of the hospital. Nor is it appropriate for this court to consider the social consequences and community reactions asserted by both sides of this controversy in the event of a ruling for or against the applicability of civil service laws.
Rather, the issues of this litigation are controlled by the intent of the Legislature, as gleaned from the pertinent legislation and aids to construction which may be found in applicable judicial precedents. The rights of the employees are dictated by the applicable law rather than the agreement between the city and the college, and if they are entitled to civil service status under that law, any agreement to the contrary between the contracting parties inter se would have no legal impact.
The agreement between the city and the college came about after lengthy negotiations and pursuant to the authorization of an enabling act adopted by the Legislature on June 21, 1968, L. 1968, c. 103; N.J.S. 18 A:64 C -21 to 25. The act authorizes the governing body of a municipality where a site has been selected for the New Jersey College of Medicine and Dentistry to enter into an agreement for the sale of its public hospital to the college without compliance with the laws relating to sale of public property. The act affirmatively provides for the preservation of the retirement and pension rights of the former municipal employees of the hospital who continue as college employees and makes appropriate provision for payments by the college to the municipality and to the retirement system in implementation
of the maintenance of these benefits for the former municipal employees.
The section of the enabling act which is particularly pertinent to the issue at bar ...