On appeal from and certification to the Superior Court, Appellate Division, whose opinion is reported at 193 N.J. Super. 182 (1984).
For modification and affirmance -- Justices Clifford, Handler, Pollock, O'Hern and Garibaldi. The opinion of the Court was delivered by O'Hern, J.
The central question in this appeal is whether the authority of a local school district to make a reduction in force under N.J.S.A. 18A:28-9, "whenever, in the judgment of the board, it is advisable to abolish any such positions for reasons of economy * * *", preempts negotiation of procedures for giving notice to teachers of required layoffs. We hold that procedures that do not substantially interfere with the managerial prerogative to effect the layoff are negotiable. We modify the judgment below because the sanction allowed would have the effect of substantially interfering with the determination of governmental policy.
The agreement between the Old Bridge Education Association (Association) and the Old Bridge Board of Education (Board) provides that "[t]eachers shall be notified of their contract and salary status for the ensuing year no later than April 30." In accordance with this clause, Barbara Wolfe, a tenured part-time business education teacher, was notified on April 15, 1981 that the Board had voted, at its April 6, 1981 meeting, to re-employ her as a one-fifth time business education teacher for the 1981-82 school year at a salary of $4,507.
Pursuant to the contract clause, several employees, other than Barbara Wolfe, had been notified on March 1, 1981 that they were being terminated at the end of the 1980-81 school year.
On June 29, 1981, at a special meeting, the Board of Education voted to rescind Ms. Wolfe's contract for the 1981-82 school year. By letter dated July 1, 1981, the Superintendent of Schools notified Wolfe that her contract was rescinded.
The Association filed a grievance, asserting that the Board had violated the notice requirements in the agreement. The arbitrator found that the Board had violated the contract, but did not immediately order restoration or monetary sanction because of needed evidence as to mitigation. At this point the Board filed a scope of negotiations petition with the Public Employment Relations Commission (PERC), contending that a reduction in force, including its notice and impact, is not negotiable. PERC determined that procedural aspects relating to layoffs, especially notice provisions, are negotiable and therefore arbitrable. PERC declined to speculate on the appropriateness of any potential remedy.
The Board appealed PERC's ruling to the Appellate Division. While that appeal was pending, the arbitrator entered the sanction, awarding Ms. Wolfe $5200, representing $4507 for her full year's salary (she taught one-fifth time); $350 for sick pay; and $343.75 for the costs of seeking other employment. The Association sought confirmation of the award in the Chancery Division. The Appellate Division allowed the record to be supplemented to include the award. A majority of the Appellate Division then affirmed PERC's scope of negotiations determination, finding the notice provisions negotiable and arbitrable. It exercised original jurisdiction to review the arbitrator's award and found his standard for awarding damages of a full year's salary and benefits, less mitigation, inappropriate. It would have limited a monetary sanction to whatever economic hardship the teacher suffered as a result of the late notice. 193 N.J. Super. 182 (App.Div.1984). The dissenting judge found
that the establishment of a period of time within which a Board would be able to reduce its staff or be liable for damages is non-negotiable and therefore non-arbitrable. He would have reversed PERC's determination and set aside the arbitrator's award in its entirety. The Board appealed pursuant to Rule 2:2-1(a)(2). We granted the Association's petition for certification. 97 N.J. 665 (1984).
An initial question raised by the Association is whether any judicial review of the arbitrator's award is possible in the context of this case. The Association argued that the only grounds upon which a court may vacate an arbitration award are (a) the award was procured by corruption, fraud or undue means; (b) the arbitrator evidenced partiality or corruption; (c) the arbitrator was guilty of misconduct in refusing to hear pertinent and material evidence; or (d) the arbitrator exceeded or so imperfectly executed an award that it could not be considered definite. N.J.S.A. 2A:24-8. The Association recognizes that the concept of "undue means" has been greatly enlarged in the public sector. Kearny PBA Local #21 v. Town of Kearny, 81 N.J. 208, 217 (1979). It contends that the arbitrator's decision was "reasonably debatable" and is therefore insulated from review under the principle of Kearny, supra, 81 N.J. at 224. But that standard applies only to "matters of interpretation." State v. State Troopers Fraternal Ass'n, 91 N.J. 464, 469 (1982). Our task here is not to determine whether the interpretation of the language of the agreement is reasonably debatable, but rather whether the arbitrator followed the inherent guidelines applicable to public sector negotiation.
The scope of arbitrability is generally coextensive with the scope of negotiability. Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 160 (1978). Thus the tests for ...