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Division 540 v. Mercer County Improvement Authority

Decided: April 26, 1978.

DIVISION 540, AMALGAMATED TRANSIT UNION, AFL-CIO, AN UNINCORPORATED ASSOCIATION, PLAINTIFF-RESPONDENT,
v.
MERCER COUNTY IMPROVEMENT AUTHORITY (MERCER METRO DIVISION), A BODY POLITIC, DEFENDANT-APPELLANT



On certification to the Superior Court, Appellate Division.

For affirmance -- Chief Justice Hughes, Justices Sullivan, Pashman, Clifford, Schreiber and Handler and Judge Conford. For reversal -- None. The opinion of the court was delivered by Sullivan, J.

Sullivan

This is a labor dispute in the public sector. The Mercer County Improvement Authority (Mercer Metro Division) is the operator of a public transportation facility in Mercer County. Division 540, Amalgamated Transit Union, AFL-CIO, an unincorporated association, plaintiff herein, represents the drivers, garage personnel and clerical workers of Mercer Metro.

During the spring of 1975 plaintiff and defendant met to negotiate the terms and conditions of a collective bargaining agreement to replace an existing agreement between the parties which was due to expire on March 31, 1975. Upon failure to reach agreement, primarily over the issue of wages including a cost of living allocation, plaintiff-union demanded that the dispute be submitted to binding arbitration in accordance with N.J.S.A. 40:37A-96. When defendant refused, the union filed the present suit which, inter alia,

sought to compel defendant to comply with the statutory provision which requires defendant to offer to submit the dispute to binding arbitration. Defendant, on its part, challenged the constitutionality of such provision.

The Superior Court, Chancery Division, upheld the constitutionality of N.J.S.A. 40:37A-96 and entered final judgment ordering the defendant to submit the labor dispute between it and plaintiff to final and binding arbitration pursuant to the statute. On appeal by defendant, the Appellate Division affirmed the Chancery Division ruling. Certification was granted by this Court on defendant's petition, solely on the issue of the constitutionality of N.J.S.A. 40:37A-96. 71 N.J. 518 (1976). We affirm.

The Mercer County Improvement Authority exists and functions under the "county improvement authorities law," L. 1960, c. 183, N.J.S.A. 40:37A-44 et seq. Its involvement in the operation of a public transportation facility has this background.

Capitol Transit, Inc. was a privately owned transportation facility operating bus lines in Mercer County. In the 1960s, it began to sustain increasingly heavy financial losses. During this period Mercer County tried to sustain the operation by providing subsidies, but by 1968 Capitol Transit's condition had worsened to a point where it faced bankruptcy and gave notice that it intended to cease operations.

At this point the New Jersey Legislature, by L. 1968, c. 66, adopted amendments to N.J.S.A. 40:37A-44 et seq. so as to permit a county improvement authority to acquire a privately owned transportation system and operate the same as a public transportation facility. Defendant Improvement Authority thereupon purchased the assets of Capitol Transit and took over its operations through its Mercer Metro Division.

The principal financing for this acquisition came from a federal grant made under the Urban Mass Transportation Act of 1964, 49 U.S.C. ยง 1601 et seq. However, federal

assistance under this act is conditioned on fair and equitable arrangements being made to protect the interests of employees affected by such ...


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