On appeal from Decision of the Public Employment Relations Commission.
Antell, Deighan and Landau. The opinion of the court was delivered by Landau, J.A.D.
[223 NJSuper Page 324] This is an appeal by University of Medicine and Dentistry of New Jersey (UMDNJ) and six New Jersey State colleges (State)
from a Public Employment Relations Commission (PERC) decision that the institutions committed an unfair labor practice pursuant to N.J.S.A. 34:13A-5.4, subd. a(5) by unilaterally refusing to negotiate the issue of their respective mandatory retirement policies.
The parties have stipulated to the facts in this matter. In March 1985, New Jersey amended its civil rights laws to prohibit with certain exceptions mandatory retirement based on age in public and private employment. (L. 1985, c. 73, effective October 1, 1985) One exception to the general prohibition against mandatory retirement was contained in § 4 and read as follows:
(L. 1985, c. 73, § 4, as codified at N.J.S.A. 10:5-2.2.)
Relying upon the above cited amendment, the Board of Trustees at UMDNJ and at six State colleges (Jersey City State College, William Paterson College of New Jersey, Glassboro State College, Montclair State College, Trenton State College and Kean College of New Jersey) promulgated policies requiring mandatory retirement for faculty members attaining age 70. The mandatory retirement policies were promulgated and implemented by each State college and by UMDNJ without any negotiations with the unions representing the employees at these institutions. The policies became effective at the various institutions between October 1, 1985 and October 1, 1986.
With the exception of Jersey City State College and UMDNJ, the institutions' policies mandate retirement of all tenured employees at the end of the fiscal/academic year in which they attain age 70. The policy of Jersey City State College permits retention of unit members over age 70 in order "to retain highly qualified faculty whose performance remains outstanding in programs which evidence high demand and a low availability of qualified faculty" and/or "to retain an outstanding individual in
a subject area in which replacement is difficult." The UMDNJ policy permits exceptions to mandatory retirement based on the recommendation of the dean of the school and subject to approval by the Board of Trustees.
A total of three tenured faculty at the six State colleges were affected by the mandatory retirement policies in 1985-86. Two faculty were from Jersey City State College; one requested and was denied a waiver from the retirement policy and the second submitted a letter of intent to retire prior to implementation of the new policy. The third faculty member was from Glassboro State College and did not appeal, grieve or take any legal action with respect to the retirement.
On March 13, 1986 the Council of New Jersey State College Locals (Council) and the University of Medicine and Dentistry of New Jersey Council of American Association of University Professors (AAUP) filed respective unfair labor practice charges against the State of New Jersey and UMDNJ with PERC. The two unions who represent faculty members at UMDNJ and at the New Jersey State colleges asserted that the institutions violated New Jersey Employer-Employee Relations Act, specifically N.J.S.A. 34:13A-5.4, subd. a(1), (5) by adopting mandatory retirement policies for tenured faculty members without negotiating these policies with their respective unions. The State and UMDNJ countered by claiming that the issue of mandatory retirement was nonnegotiable. The parties agreed to consolidate the matters and on February 9, 1987 PERC issued its decision and order in the consolidated matters.
PERC held that the issue of mandatory retirement was mandatorily negotiable and that the State and UMDNJ committed an unfair labor practice by unilaterally instituting their respective policies. The State and UMDNJ were ordered to cease and desist from refusing to negotiate over mandatory retirement policies for tenured faculty, and to rescind any such policies implemented without negotiation. PERC limited its holding in a footnote by noting that it did not have before it any
union proposals on mandatory retirement and it cautioned that proposals that would interfere with managerial prerogatives would not be mandatorily negotiable.
In reaching its decision PERC applied the test of negotiability as set out in In re IFPTE Local 195 v. State, 88 N.J. 393, 403-404 (1982):
[A] subject is negotiable between public employers and employees when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy.
PERC found that the subject of retirement pertained to a term and condition of employment or an item that intimately and directly affected the work and welfare of tenured employees. It further held that negotiation was not preempted because N.J.S.A. 10:5-2.2 does not "speak in the imperative and leave nothing to the discretion of the public employers," the test for preemption as set forth in Bethlehem Tp. Bd. of Educ. v. Bethlehem Tp. Educ. Ass'n, 91 N.J. 38, 44 (1982). Additionally, it determined negotiation was not preempted by State pension statutes in that by enacting N.J.S.A. 10:5-2.2 the Legislature "clearly and unequivocally" authorized institutions to continue (or not to continue) employees after reaching age 70. Finally, PERC held that negotiation on the issue of mandatory retirement would not significantly interfere with an inherent management prerogative.
We agree with PERC's findings on the first two prongs of the IFPTE test. We disagree, however, with its decision on the third prong of the test respecting whether negotiation on mandatory retirement will significantly interfere with government policy-making. PERC essentially ruled that the broad issue of mandatory retirement as encompassed in the various institutions' policies was negotiable although particular union proposals which interfered with inherent management prerogatives would not be negotiable. We find the emphasis in this ruling misplaced and reverse, holding that an institution's decision to exercise its option to retire a tenured employee upon reaching
age 70 is not negotiable although the manner and means that the institution uses to implement its decision may be negotiable.
The State and UMDNJ argue on appeal that even after passage of L. 1985, c. 73, the subject of employee pensions including mandatory retirement policies are insulated from negotiated agreement. Furthermore, they contend that negotiation on mandatory retirement would impermissibly interfere with an institution's inherent management prerogative to determine government policy.
AAUP and the Council counter by arguing that with passage of L. 1985, c. 73, matters of retirement age were left to the discretion of institutions of higher education and as with other discretionary matters pertaining to terms and condition of employment, negotiation is mandated. They point to the history of various related statutes as reflecting a legislative understanding that the formulation of retirement policies did not come ...