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In re Board of Education of Town of Boonton

Decided: June 25, 1985.


On certification to the Public Employment Relations Commission.

For modification and affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For reversal -- None. The opinion of the Court was delivered by Stein, J.


[99 NJ Page 527] This appeal challenges the constitutionality of the 1979 amendments to the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-5.1 to -21, as amended, L. 1979, c. 477.

The amendments authorize agreements between majority union representatives and public employers that require nonunion public employees to pay their majority representative a representation fee for services rendered. N.J.S.A. 34:13A-5.5 and -5.6. The constitutional challenges were initially asserted by appellant, Boonton public schoolteacher Judith Kramer, when she filed unfair labor practice charges with the New Jersey Public Employment Relations Commission (PERC) against her employer, the Boonton Board of Education (Board), her majority representative, the Boonton Education Association (BEA), and the New Jersey Education Association (NJEA). PERC granted in part and denied in part the relief sought by appellant, but declined to rule on the constitutional issues raised. This Court certified the matter directly while her appeal was pending in the Appellate Division. 99 N.J. 173 (1984).


In 1968 the Legislature passed the New Jersey Employer-Employee Relations Act (the Act). L. 1968, c. 303. This Act granted to all public employees the right to join or refrain from joining employee organizations, and the right to conduct collective negotiations with public employers through majority representatives. N.J.S.A. 34:13A-5.3.

The avowed purpose of the Act was to foster the prevention and prompt settlement of labor disputes in the private and public sectors. N.J.S.A. 34:13A-2. To that end, the Act authorized majority representatives to negotiate agreements with public employers on behalf of the employees in the relevant bargaining unit. N.J.S.A. 34:13A-5.3. It further required that the majority representative "be responsible for representing the interest of all such employees without discrimination and without regard to employee organization membership." Id. Accordingly, the Act afforded the bargaining unit's nonunion public employees substantial benefits from the majority representative, without any cost obligation. See Sponsors' Statement,

N.J. Assembly Bill No. 688, Feb. 9, 1978. The Act also established PERC. N.J.S.A. 34:13A-5.2. This administrative body was granted exclusive jurisdiction over unfair labor practices in the public sector and was authorized to make policy and establish rules and regulations governing employer-employee relations in public employment. N.J.S.A. 34:13A-5.2, -5.4.

Effective July 1, 1980, the Legislature amended the Act to authorize agreements between public employers and majority representatives that would require employees who were not members of the majority representative to pay a representation fee not exceeding 85% of regular membership dues, fees, and assessments. L. 1979, c. 477, ยง 2. The Sponsors' Statement clearly indicated that the purpose of the amendment was to eliminate the "free ride" enjoyed by nonunion members of the bargaining unit who received the benefit of services performed by the majority representative without sharing in the costs incurred. Sponsors' Statement, Assembly Bill No. 688, supra. The Statement cited Abood v. Detroit Bd. of Educ., 431 U.S. 209, 97 S. Ct. 1782, 52 L. Ed. 2d 261, reh'g denied, 433 U.S. 915, 97 S. Ct. 2989, 53 L. Ed. 2d 1102 (1977), as authority for requiring nonunion members to help meet the costs of services rendered by the union.

Consistent with Abood, the statute required that the majority representative refund to nonunion employees any part of the representation fee used "either in aid of activities or causes of a partisan political or ideological nature only incidentally related to the terms and conditions of employment or applied toward the cost of any other benefits available only to members of the majority representative." N.J.S.A. 34:13A-5.5(c). This refund, however, was not to reflect "the costs of support of lobbying activities designed to foster policy goals in collective negotiations and contract administration or to secure for the employees represented advantages in wages, hours, and other conditions of employment in addition to those secured through collective negotiations with the public employer." Id.

The amended Act authorized public employers to withhold the representation fee by payroll deduction, but only if the union had established and maintained a "demand and return" system that provided a pro rata refund of those expenditures that the statute expressly determined should not be shared by nonunion member employees. N.J.S.A. 34:13A-5.6. The statute also required that the demand-and-return system provide for a procedure to review the amounts refunded, with the burden of proof on the majority representative. Id. The statute further provided that nonunion members have the right to appeal to a three-member board, consisting of a representative of public employers, a representative of public employee organizations, and a neutral member. Id.


In June, 1981, pursuant to N.J.S.A. 34:13A-5.5, the Board and the BEA entered into an agreement that obligated Kramer, as a nonunion member of the negotiating unit, to pay a representation fee to the BEA commencing September, 1981. Although the BEA posted notices on September 22, 1981, informing members of the negotiating unit of the amount of the representation fee and a rebate procedure, Kramer claimed to have first learned about the representation fee in a letter from the BEA dated October 7, 1981. This letter invited her to become a member of the BEA and advised her that pursuant to L. 1979, c. 477, all members of the negotiating unit who chose not to join the BEA would be required to pay a representation fee in lieu of dues. After receiving the letter, she asked a representative of the BEA for a written statement of the amount of the representation fee and for a copy of the contract authorizing the fee. According to Kramer, the statement was never furnished but a copy of the contract was given to her in December, 1981.

Shortly after receiving the letter from the BEA, Kramer notified the superintendent of schools that she refused to

authorize payroll deductions for the representation fee since she had not seen a copy of the contract or of the demand-and-return system mandated by statute. In fact, the BEA had adopted a demand-and-return system on September 30, 1981 and had posted a copy on the bulletin board in the faculty room on or about October 1, 1981.

Commencing February 1, 1982, the Board began deducting $74.16, an amount equal to twice the monthly representation fee, from Kramer's salary. This double deduction was made in order to recover the fees payable for the first five months of the school year -- September through January -- when no fees had been deducted.

In November, 1981, Kramer filed an unfair labor practice charge with PERC alleging that the Board had engaged in unfair practices by putting into effect an automatic payroll deduction for dues without signed authorization cards, thereby interfering with her right to refrain from union activity, in violation of N.J.S.A. 34:13A-5.3 and -5.4, and N.J.S.A. 52:14-15.9e. Kramer also alleged that the Board had imposed automatic payroll deductions for the representation fee without requiring the pre-establishment of a demand-and-return system, in violation of N.J.S.A. 34:13A-5.6. Simultaneously, Kramer filed unfair practice charges against the BEA and the NJEA, alleging that they had interfered with her rights under N.J.S.A. 34:13A-5.3 and -5.4 by refusing to allow her to see the agreement; by intimidating her from exercising her right to refrain from union activity; by demanding that she become a member of the union; by imposing a procedure for the automatic payroll deduction of representation fees without the establishment of a demand-and-return system in violation of N.J.S.A. 34:13A-5.6; by imposing a procedure for the automatic payroll deduction of dues without signed authorization cards, in violation of N.J.S.A. 52:14-15.9e; and by establishing an agency-fee system that charged certain union members lower amounts than certain nonmembers, reflecting a discriminatory dues system.

In February, 1982, Kramer filed an amended unfair practice charge against the BEA and NJEA, alleging that their attempt to collect the representation fee had violated her constitutional rights to freedom of speech and association. She also alleged that the representation fee was "unconstitutionally broad," since it could be used not only to pay for activities related to bargaining and contract administration, but also to subsidize lobbying activities in support of various partisan political and social issues.

In September, 1982, a hearing was held before a PERC hearing examiner, who issued his recommended report and decision in March, 1983. In re Boonton Bd. of Educ., 9 N.J. Public Employee Rptr. (Labor Relations Press) para. 14114 (Gerber, Hearing Examiner, March 25, 1983). The BEA, NJEA, and Kramer filed exceptions to the hearing examiner's recommendations. PERC issued its decision and order in July, 1983. Id., para. 14199 (Public Employment Relations Commission, Decision and Order, July 18, 1983).

PERC first determined the jurisdictional issues: it concluded that constitutional challenges to the representation-fee statute were within the exclusive province of the courts; that the three-member appeals board had sole jurisdiction over matters pertaining to the amount of any representation-fee rebate; and that PERC alone had jurisdiction over unfair labor practice claims that did not challenge the amount of the rebate or the constitutionality of the rebate system. Id., para. 14199, at 478-79.

On the basis of this jurisdictional finding, PERC concluded that the hearing examiner had properly refused to entertain Kramer's constitutional challenges to the statute. Moreover, PERC held that the hearing examiner had properly quashed a subpoena duces tecum served by Kramer that sought the production of all documents pertaining to the operation of the demand-and-return system and the calculation of the representation fee. PERC found these matters to be within the exclusive jurisdiction of the appeals board. Id.

PERC further determined that the demand-and-return system adopted on September 30, 1981 satisfied the statutory mandate. It found, however, that the deduction of representation fees from Kramer for the month of September, 1981 constituted an unfair labor practice since the BEA had not established its demand-and-return system until September 30, 1981. Id. at 479; see N.J.S.A. 34:13A-5.6. PERC disagreed with the hearing examiner's finding that the BEA had not interfered with, restrained, or coerced Kramer in the exercise of her right not to join the BEA. PERC found that the BEA letter of October 7, 1981 was potentially misleading, that the BEA membership chairman had refused to give Kramer a written statement concerning her representation fee, and that an NJEA representative had advised Kramer that he did not have to discuss representation fees with a nonmember. In re Boonton, supra, 9 N.J. Public Employee Rptr. para. 14199, at 479-80. PERC found such statements to reflect an "unacceptably grudging attitude towards the rights of non-members to refrain from joining the Association and to secure information concerning the representation fee system." Id. at 480. PERC further found that the BEA had committed an unfair labor practice in failing to notify Kramer and other nonunion members personally of their rights under the demand-and-return system and of the procedures for obtaining a rebate. Id.

With respect to the challenge asserted to the fee structure, PERC rejected Kramer's contention that the distinction between fees paid by nonunion teachers and union support staff was discriminatory or otherwise unlawful. PERC also held that it was an unfair labor practice to require Kramer's representation fee to be withheld from her paycheck rather than to allow her to pay it in a lump sum. Id.


On appeal, appellant renews her constitutional challenge to the validity of the statute and the demand-and-return system

established thereunder. She also challenges PERC's holding that the hearing examiner properly quashed the subpoena for financial information and properly refused to consider the purposes for which representation fees were being expended. Finally, in this appeal, appellant argues for the first time that the BEA practice of transmitting a portion of her representation fee to county, state, and national unions constitutes an unfair labor practice.

We first address appellant's contention that PERC improperly upheld the quashing of her subpoena of BEA and NJEA financial records. Appellant argues that PERC's jurisdiction under the statute is sufficiently broad to accommodate the inquiry that the subpoena was designed to pursue. Although this Court is not bound by PERC's determination of its own jurisdiction, an administrative agency's interpretation of a statute it is charged with enforcing is entitled to substantial weight. New ...

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