On appeal from the Superior Court, Appellate Division.
For affirmance -- Justices Clifford, Handler, Pollock and O'Hern. The opinion of the Court was delivered by Handler, J. Stein, J., concurring in part and dissenting in part. Stein and Garibaldi, JJ., concurring in part and dissenting in part.
In this case, a public employer, a county board of freeholders, unilaterally imposed and later terminated a safety incentive program that included the award of cash bonuses to county road crew employees based on safe performance. The employees, through their union, a designated representative, took the position that the county's unilateral actions undertaken without meeting or negotiating with the union constituted unfair practices under the Employer-Employee Relations Act. The central question raised by this controversy and ensuing litigation is whether the implementation and termination of this safety-incentive program fell within the scope of matters that are mandatory subjects of collective negotiations under the Act.
On December 28, 1984, the Hunterdon County Engineer notified all employees of the Road and Bridge Department that the County Board of Chosen Freeholders ("County") had authorized
the implementation of a Safety Incentive Program. This program provided for cash awards of fifty to one-hundred dollars to members of road crews who, over the course of 1985, either reported no on-the-job injuries or suffered the least amount of time lost from work due to such mishaps.*fn1 Although the employees were represented by the Communication Workers of America, AFL-CIO ("Union"), the County neither consulted nor negotiated with the Union regarding the terms or implementation of this program. Further, the County did not provide the Union with any specific notice of the program.
On June 21, 1985, the Union filed an Unfair Practice Charge with Public Employment Relations Commission ("PERC"), alleging that the unilateral adoption of the safety-incentive
program constituted the promulgation of terms and conditions of employment under which cash compensation might be paid and that this was a refusal to negotiate with the Union, the designated representative of public employees, and therefore a denial of rights guaranteed to represented employees under the Employer-Employee Relations Act ("Act"). The County responded by asserting that adoption of the awards program was authorized by statute, N.J.S.A. 40A:5-31 and N.J.S.A. 40A:9-18, thus exempting the County from any obligation to negotiate, and, further, that the program was not negotiable because it was not a term or condition of employment.
An exploratory conference between the parties held on October 28, 1985, was apparently unproductive, and, on November 12, 1985, the County voted to immediately terminate the safety-incentive program immediately notwithstanding its scheduled completion by the end of the year. On December 13, 1985, the Union amended its Unfair Practice Charge to allege that the program was terminated unilaterally in retaliation for the filing of the initial Unfair Practice charge. No employee received any cash award under the program.
In May 1985, PERC conducted a hearing. The Hearing Examiner concluded that the County violated the Act by unilaterally establishing and implementing the safety-incentive program without negotiating with the Union, but that the unilateral discontinuance of the program did not violate the Act. In September 1986, PERC affirmed the Hearing Officer's finding regarding the unilateral institution of the program, but also ruled that the Union had established a prima facie case that the termination of the safety-incentive program violated the Act. Hunterdon County Bd. of Freeholders, P.E.R.C. No. 87-35, 12 NJPER 768 (para. 17293 1986). It remanded the matter to enable the County to rebut the prima facie case or establish that the termination of the program occurred for legitimate reasons.
On remand, the Hearing Examiner found that the County's failure to establish any legitimate business justification for the unilateral termination of the safety-incentive program offended the Act, and recommended that PERC order the County to cease and desist from violative conduct and to make payments to eligible employees on a pro rata basis from January 1, 1985, through November 12, 1985, along with 9.5% interest accruing from July 1, 1985. PERC affirmed the recommendation but modified the suggested remedy by ordering the County to calculate outstanding award payments for the entire calendar year of 1985, with statutory interest to accrue from January 15, 1986. Hunterdon County Bd. of Freeholders, P.E.R.C. No. 87-150, 13 NJPER 506 (para. 18188 1987).
The County appealed. In an unpublished per curiam opinion, the Appellate Division affirmed the PERC decisions. There being a dissent, the County appealed as of right pursuant to Rule 2:2-1(a)(2).
Public employees are given comprehensive rights under the Employer-Employee Relations Act. N.J.S.A. 34:13A-5.3 states in pertinent part:
A majority representative of public employees in an appropriate unit shall be entitled to act for and to negotiate agreements covering all employees in the unit and shall be responsible for representing the interest of all such employees without discrimination and without regard to employee organization membership. Proposed new rules or modifications of existing rules governing working conditions shall be negotiated with the majority representative before they are established. In addition, the majority representative and designated representatives of the public employer shall meet at reasonable times and negotiate in good faith with respect to grievances, disciplinary disputes, and other terms and conditions of employment. Nothing herein shall be construed as permitting negotiation of the standards or criteria for employee performance.
The Act imposes specific prohibitions against public employers in order to maximize the protections accorded public employees. Public employers are expressly "prohibited from . . . [i]nterfering with, restraining or coercing employees in the exercise of
the rights guaranteed to them" under the Act. N.J.S.A. 34:13A-5.4(a)(1). Further, public employers are prohibited from
[r]efusing to negotiate in good faith with a majority representative of employees in an appropriate unit concerning terms and conditions of employment of employees in that unit . . . [ N.J.S.A. 34:13A-5.4(a)(5).]
It must also be emphasized that the judicial role in this kind of case must be both sensitive and circumspect. We deal here with the regulatory determination of an administrative agency that is invested by the Legislature with broad authority and wide discretion in a highly specialized area of public life. PERC is empowered to "make policy and establish rules and regulations concerning employer-employee relations in public employment relating to dispute settlement, grievance procedures and administration including . . . to implement fully all the provisions of [the] act." N.J.S.A. 34:13A-5.2. These manifestations of legislative intent indicate not only the responsibility and trust accorded to PERC, but also a high degree of confidence in the ability of PERC to use expertise and knowledge of circumstances and dynamics that are typical or unique to the realm of employer-employee relations in the public sector.
Although constitutional concerns or the dictates of legislative intent have at times compelled us to decline adoption of doctrines or statutory interpretations that have been favored by PERC, see, e.g., Paterson Police PBA v. Paterson, 87 N.J. 78, 91 (1981), in the absence of such constraints, and particularly in situations where agency expertise is essential towards understanding the proper context of a dispute, a deferential standard of review is ...