On certification to the Superior Court, Appellate Division.
For reversal -- Justices Clifford, Handler, Pollock, O'Hern and Garibaldi. For Affirmance -- Chief Justice Wilentz and Justice Stein. The opinion of the Court was delivered by Clifford, J. Wilentz, C.J., dissenting.
[100 NJ Page 385] This appeal questions the propriety of an arbitrator's determination in a public sector labor dispute. The public employer discharged the employee because of disciplinary infractions. The arbitrator agreed that the employee had been guilty of misconduct, but he modified the penalty by imposing a suspension in place of termination of employment. The Chancery Division vacated the suspension and reimposed the penalty of
discharge. The Appellate Division, in an unreported opinion, reinstated the arbitrator's award of a suspension. We granted the employer's petition for certification, 99 N.J. 146 (1984), and now reverse the judgment of the Appellate Division and reinstate the judgment of the Chancery Division.
Defendant County College of Morris (College) employed plaintiff Victor Muller as an automotive maintenance mechanic. College employees are appointed on a yearly basis, and continued employment depends on annual reappointment by the College's Board of Trustees. However, under the employment contract between the College and the County College of Morris Staff Association (Association), once an employee has completed a six-months probationary period, the employee cannot be dismissed except for "just cause" before the expiration of his current employment term.
That is what occurred here: the College discharged Muller before his current employment term had expired. In addition, and consistent with that action, the Board of Trustees refused to reappoint Muller when his employment term finally expired. Plaintiffs have not challenged, in this action, the Trustees' determination on reappointment; rather, they limit their contention to the claim that the College improperly dismissed Muller without having met the "just cause" standard. We note parenthetically that, as we were told at oral argument, the Association has filed a grievance, now alleging that the dismissal clauses of the contact in Article X, referred to below, amount to and were intended to be a tenure provision -- that is, that in the absence of "just cause" to discharge, the College is required to renew an employee's contract. We refrain from expressing any view on that issue, which is currently before an arbitrator.
After firing Muller on October 8, 1982, the College set forth in a Memorandum of Record the reasons for dismissal. Those
reasons included the following infractions, which occurred in August and September 1982:
1. falsification of time records (five occasions between 8/26/82 and 9/29/82);
2. insubordination (verbal exchange with superior when confronted with inaccurate time sheet entries);
3. neglect of duty and College property in his care (left tools and equipment unattended after leaving the campus early on 9/24/82);
4. unauthorized use of College property for personal use (drove College vehicle off premises and used College garage to repair fellow employee's car);
5. attempt and threat of personal harm to his supervisor (began to lower a vehicle lift, with vehicle on it, on the supervisor who was standing directly underneath it).
The Association filed a grievance on Muller's behalf. According to Article III of the Contract between the College and the Association the grievance definition "shall govern and limit the scope of contractual, non-contractual and statutory-regulatory grievances." Muller's grievance was a "contractual grievance," defined in Article III as "an alleged misinterpretation, misapplication, or violation of the express terms of this Agreement." Specifically, the contract terms that the College is said to have violated were the discharge provisions of Article X, pertinent parts of which read as follows:
B. After completing six months of employment, the College may dismiss an employee prior to the expiration of such employee's current employment term, for just cause only and such dismissal shall be grievable.
D. The cause for which employees may be discharged shall include, but not be limited to[,] violation of rules, regulations and policies of the College.
After the first three steps of the Article III grievance procedures failed to produce Muller's reinstatement, the parties submitted the matter to binding arbitration. Article III, § C, para. 5(c) specifies the contractual limitations on the arbitration proceedings:
(c) The arbitrator's decision shall be in writing and shall set forth his findings of fact, reasoning and conclusions on the issues submitted. The arbitrator shall be without power or authority to add to, alter, amend or modify the terms of this Agreement and without authority to make any decision which requires the commission of an act prohibited by law. The arbitrator shall also be bound by the laws of the State of New Jersey and of the United States and
decisions of the Chancellor of Higher Education and the State Board of Higher Education. [Emphasis added.]
Significantly, the contract contained, in addition, a "fully bargained clause," which states:
A. This Agreement represents and incorporates the complete and final understanding and settlement by the parties of all issues for the term of this Agreement. During the term of this Agreement, neither party will be required to negotiate with respect to any such matter, whether or not covered by this Agreement, and whether or not within the knowledge or contemplation of either or both of the parties at the time they negotiated or signed this Agreement.
B. By mutual consent only, the parties may enter into negotiations during the term of this Agreement for the purpose of amending same. This Agreement shall not be modified in whole or in part except by mutual agreement of the parties. Mutually acceptable amendments shall be reduced to writing and submitted for ratification by the Board of Trustees and the Association.
The arbitrator, in an opinion following two days of hearings, described Muller as "a genuine across the board transgressor." The arbitrator found Muller guilty of all of the acts listed in the Memorandum of Record, supra at 387, with two exceptions: first, the charge of repairing another's car in the College garage was found to have been unsubstantiated; and second, the arbitrator found that Muller did not actually begin to lower the lift on his supervisor, but rather made only a threatening gesture of releasing the air pressure on the vehicle lift.
Although the arbitrator found Muller guilty of the remaining charged infractions, he nonetheless concluded that the penalty of discharge was inappropriate. In deciding that dismissal was not warranted the arbitrator relied on the College's failure to have criticized, warned, or disciplined Muller before firing him. Moreover, the arbitrator suggested that the College had fatally erred by not dismissing Muller until approximately three weeks after the final and most serious act of misconduct. The critical portion of the arbitrator's opinion reads as follows:
Grievant's total conduct in the normal context of his responsibilities to the Employer, merits discharge for cause.
"Normal[,] however, must include[,] minimally, warnings by employer and a measure of progressive discipline. An employer, including the College, may not stand idly by while an employee accumulates a sufficient number of demerits to
earn his walking papers. While in some CBA's or CNA's, progressive discipline as a prerequisite to industrial capital punishment is spelled out, same is also a standard which is read in by triers of fact/Arbitrators, absent facts and circumstances which can ill afford a warmup prior to discharge. A case in point is the September 16 or 17 contact under the lift, which reflects totally unacceptable conduct by Grievant, rating immediate discharge but nullified herein by College inaction until October 4, 1982, when Grievant was suspended. In the labor-management process, the employer may not quietly warehouse violations and then act, without prior warning. The inaction of the employer while the worker operates by rules contrary to standards, projects a sense of tacit approval, a license to do as one pleases without regard to job responsibility. In that sense, the employer contributed to ongoing breach by the worker, projecting false security to the latter.
Thus in the instant proceeding the Grievant moved from one transgression to another, without fear or concern. The Management silence became an invitation to the next act of disregard for the worker obligation to the employer. While not meriting discharge on the succession of facts herein, Grievant must be penalized and also warned thereby, that his job is on the line.
Accordingly, the arbitrator reduced the penalty of discharge to an eight-months suspension without pay.
Thereafter, the Association sought to have the arbitration award confirmed in the Chancery Division pursuant to N.J.S.A. 2A:24-7, and the College applied to have the award vacated on the ground that the arbitrator had exceeded his powers by adding terms to the employment contract of the parties. See N.J.S.A. 2A:24-8(d). The court determined that the arbitrator had exceeded his authority by reading into the collective bargaining agreement provisions for progressive discipline and immediate discharge. The court noted that the arbitrator had found Muller guilty of rule infractions meriting discharge for cause. Having made such a finding, the arbitrator could not alter the parties' agreement by imposing on the College requirements that had never ...