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Gauer v. Essex County Division of Welfare

Decided: June 26, 1985.

FRANK GAUER, INDIVIDUALLY AND AS CLASS REPRESENTATIVE OF THE ESSEX COUNTY WELFARE BOARD AND DIVISION RETIREES, PLAINTIFFS,
v.
ESSEX COUNTY DIVISION OF WELFARE, DEFENDANT



Feinberg, J.s.c.

Feinberg

OPINION

INTRODUCTION

This matter involves a class action suit brought by retirees of the Essex County Welfare Board (hereinafter ECWB) against

the Essex County Division of Welfare (hereinafter ECDW). Plaintiffs seek to prevent the ECDW from discontinuing certain health insurance benefits. Defendant has moved for summary judgment, alleging (1) that the payment of such benefits is discriminatory and in violation of N.J.S.A. 40A:10-23, which requires that such payment be made "under uniform conditions," and (2) that such benefits are not vested rights and thus subject to modification or termination at the discretion of the ECDW.

Plaintiffs oppose this motion, claiming that the ECDW is authorized to establish its own conditions of employment, including benefits such as these, and also that many of the retirees relied upon representations by the ECWB that such benefits would continue, thus seeking to estop defendant from terminating such benefits.

A history of the ECWB is important in order to understand this case. At the time of its inception, the ECWB was an autonomous agency acting within Essex County. Welfare Board Resolution 74-12-3, adopted December 23, 1974, authorized and required the ECWB to reimburse retirees of the Board for the cost of continued coverage under the health insurance plan and for coverage under Part B of the Federal Medicare Program. This coverage was provided pursuant to Essex County's participation in the State Health Benefits Program, established under N.J.S.A. 52:14-17.25 et seq.

In April of 1979, pursuant to the Optional County Charter Act (hereinafter OCCA) N.J.S.A. 40:41A-1 et seq., Essex County reorganized the structure of all county agencies, including the ECWB, by abolishing certain agencies and transferring their functions to various departments. As a part of this reorganization, the ECWB was abolished and its functions transferred to the Department of Citizen Services, under the control of Essex County. The County continued to reimburse retired employees with more than 25 years of service for the costs of coverage under the State Health Benefits Program.

No other retirees from the Essex County system received such benefits. In January of 1985, the County determined that it could no longer make such payments solely to the retirees of the ECWB. It is this decision that has brought this matter to the courts. Upon a full consideration of the facts and the law, including oral argument, this Court is convinced that defendant is entitled to summary judgment, despite plaintiff's contentions to the contrary.

I.

Plaintiffs' first contention is that the ECDW is an autonomous agency entitled to establish its own employment and compensation schedules. However, the 1979 reorganization under the OCCA gave Essex County control of the operation of the ECWB. Such reorganization was held to be valid in AFL-CIO v. Hudson County Welfare Board, 141 N.J. Super. 25 (Ch.Div.1976). This action by the County effectively abolished the ECWB and transferred all its functions to the direct control of the County, through the Division ...


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