On certification to the Superior Court, Appellate Division.
For reversal and vacation -- Chief Justice Hughes and Justices Mountain, Jacobs, Pashman, Clifford, Schreiber and Handler. For affirmance -- None. The opinion of the court was delivered by Pashman, J.
This case requires us to both apply and expand upon the principles which we enunciated last Term in State v. State Supervisory Employees Ass'n, 78 N.J. 54 (1978), Township of West Windsor v. PERC, 78 N.J. 98 (1978), and Ridgefield Park Education Ass'n v. Ridgefield Park Board of Education, 78 N.J. 144 (1978). Specifically, we must determine the validity of a clause of a public sector collective agreement which provides that disputes concerning the withholding of a teacher's salary increment "for inefficiency or other good cause," N.J.S.A. 18A:29-14, shall be subject to "advisory," as opposed to "binding," arbitration.
The facts of this case are not in dispute. On July 1, 1975, the Bernards Township Board of Education (Board) and the Bernards Township Education Association (Association) -- the majority representative of the Board's teaching employees -- entered into a collective agreement covering the 1975-1976 school year. Article XVIII, paragraph D of that agreement provided in part:
An employment or adjustment increment [in salary for any teacher] may be withheld [by the Board] in whole or in part for inefficiency or other just cause related to the performance of duties and only in accordance with the following:
4. Any action by the Board to withhold an increment or any part thereof shall be subject to appeal to arbitration * * *. The arbitrator shall have the authority to advise the restoration of all or part of the increment withheld * * *.
On March 17, 1976, the principal of William Annin Junior High School informed teacher Harold Cutting that he would
advise the Board to withhold Cutting's salary increment for the 1976-1977 school year. In response to this communication, the Association filed with the Board a grievance on Cutting's behalf. By letter dated April 28, 1976, the Board notified Cutting that the grievance was denied and that his salary increment would be withheld. A demand for arbitration was thereupon filed in accordance with Article XVIII, paragraph D of the parties' collective agreement.
Rather than accede to the Association's demand, the Board instituted suit in the Superior Court seeking to enjoin the arbitration. The Board asserted, inter alia, that a decision to withhold a teacher's salary increment "for inefficiency or other good cause," N.J.S.A. 18A:29-14, is a matter of managerial prerogative and hence not subject to arbitration. On November 5, 1976, the injunction was granted. The Appellate Division affirmed in an unpublished per curiam opinion dated February 23, 1978. We granted the Association's petition for certification. 77 N.J. 499 (1978). We now reverse.
Before discussing the merits, we feel constrained to comment upon the procedural aspects of the present dispute. As we made clear last Term, under the existing legislative scheme it may be necessary to invoke the jurisdiction of both the Public Employment Relations Commission (PERC) and the Superior Court in order to completely resolve a disagreement concerning the arbitrability of a particular dispute. See Ridgefield Park, supra, 78 N.J. at 153-156; State Supervisory Employees, supra, 78 N.J. at 83-84. As stated in Ridgefield Park:
When one party claims that a given dispute is arbitrable under the contract and the other party resists arbitration, the party desiring arbitration should seek an order from the Superior Court compelling arbitration. * * * [However], [w]here the trial judge determines
that the real controversy is not one of contractual arbitrability, but rather concerns the propriety of the parties negotiating and agreeing on the item in dispute, he should refrain from passing on the merits of that issue.
PERC has primary jurisdiction to make a determination on the merits of the question of whether the subject matter of a particular dispute is within the scope of collective negotiations. * * *
These guidelines were not followed in the present dispute. In seeking the injunction in Superior Court, the Board asserted, inter alia, that a decision to withhold a teacher's salary increment is managerial in nature and hence any agreement to subject that decision to arbitration is ultra vires and unenforceable. Thus, the gravamen of the Board's complaint was that the subject matter of its dispute with the Association did not fall within the scope of collective negotiations. Consequently, the trial judge should have refrained from ruling whether the parties had contractually agreed to arbitrate the dispute until PERC had decided the threshold issue of negotiability. See Ridgefield Park, supra, 78 N.J. at 155.
The Board argues that the above guidelines are inapplicable to the present controversy because its resolution requires a reconciliation of N.J.S.A. 18A:29-14 -- a statute which is part of the Education Law, N.J.S.A. 18A:1-1 et seq. -- with the Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et seq., and not merely an interpretation of the latter statute. We conclude that the Board's contention in this regard lacks merit.
As we emphasized last Term, PERC has been designated by the Legislature as the forum for initial determination of scope of negotiations matters because of its special expertise in this area. See Ridgefield Park, supra, 78 N.J. at 153-156; State Supervisory Employees, supra, 78 N.J. at 83-84. In carrying out its duties, PERC will at times be required to interpret statutes other than the Employer-Employee Relations ...