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Cohen v. Board of Trustees of University of Medicine and Dentistry of New Jersey

Decided: December 22, 1989.


Bachman, J.s.c.


[240 NJSuper Page 191] On June 24, 1988, plaintiffs, all salaried employees of the University of Medicine and Dentistry of New Jersey

("UMDNJ"), filed a complaint alleging improper calculation and payment of salaries. Defendant, Board of Trustees of UMDNJ controls, manages and administers the university pursuant to statute with the power to establish the method of payment of its employees' salaries.

The UMDNJ has paid the named plaintiffs, and all others similarly situated, biweekly salaries calculated on a fiscal day basis. To obtain this biweekly amount, an employee's annual salary is divided by the number of working days in the State's fiscal year. This number is the daily rate of pay. The daily rate is then multiplied by the number of days worked in a two-week pay period. The resulting figure represents the employee's biweekly amount. The biweekly amount will fluctuate in each fiscal year dependent upon the number of fiscal days in a year. There will be either 260, 261 or 262 fiscal days in any given fiscal year.

Plaintiffs contend that both their collective bargaining agreement and N.J.S.A. 52:14-15 mandate calculation of salaries in a pure biweekly amount. This figure is realized by dividing an employee's annual salary by the number of two-week periods in a year. They further contend that the UMDNJ's method of calculation not only fails to compensate the employees completely but also results in less contribution to pensions and retirement systems by UMDNJ.

The present motion by the UMDNJ seeks to transfer this action to either the Appellate Division or the salary adjustment committee. As a consequence, the status of the UMDNJ as well as the actions of its board of trustees must be evaluated in light of R. 2:2-3.

The Legislature established the UMDNJ as a "body corporate and politic" possessing a high degree of self-government. N.J.S.A. 18A:64G-3 (Medical and Dental Education Act of 1970). In recognition of this legislative directive, the UMDNJ claims a unique status as "a truly independent entity whose autonomy is substantive rather than merely formal or organizational."

DeAngelis v. Addonizio, 103 N.J. Super. 238, 251-252, 247 A.2d 39 (Law Div.1968). However, the university is still dependent upon the State for funding, N.J.S.A. 18A:64G-6(f), while responsible to the State to further declared public policies of higher education, N.J.S.A. 18A:64G-2.

The type of agency established, if any, by this statutory scheme and subsequent judicial interpretation becomes relevant in determining the applicability of R. 2:2-3 which guides appeals to the Appellate Division. The relevant portion of the rule states that appeals may be taken as a matter of right to the Appellate Division:

[to] review final decisions or actions of any state administrative agency or officer, and to review the validity of any rule promulgated by such agency or officer. . . . [ R. 2:2-3(a)(2)].

Hence, if the UMDNJ may be termed a state administrative agency within the ambit of this rule, the appeal of its final decision regarding the method of calculating payment of salaries may properly lie in the Appellate Division.

In determining the status of the UMDNJ, the court must focus on "whether the function and life of the particular agency is dependent upon the State in its management and control, and whether, it depends solely and entirely upon the financial subsistance it receives from the State." DeAngelis, supra, 103 N.J. Super. at 251-252, 247 A.2d 39, citing State v. Clark, 15 N.J. 334, 339, 104 A.2d 685 (1954).

The UMDNJ, through its board of trustees, possesses autonomy and discretion to direct and control the expenditure of funds appropriated by the State. N.J.S.A. 18A:64G-6. It also retains independent control over funding, bequests and grants received from sources other than the State. Ibid. Further, it is the board of trustees of UMDNJ which determines its policies, development and administrative directions including the authority to adopt by-laws, rules and regulations. N.J.S.A. 18A:64G-6(c), (g). Hence, the university is to act as "guilds of scholars . . . responsible only to themselves." Snitow v. Rutgers University, 103 N.J. 116, 122, 510 A.2d 1118 (1986), quoting N.L.R.B.

v. Yeshiva University, 444 U.S. 672, 680, 100 S. Ct. 856, 861, 63 L. Ed. 2d 115 (1980).

In recognition of this unique status as a state university, the Judiciary and the Legislature have denied agency status to the UMDNJ under particular circumstances. See DeAngelis, supra (Civil service status of UMDNJ employees denied as university functions as an autonomous entity rather than as agency of the State); see also N.J.S.A. 18A:64G-6(l) (University may enter into contracts with the State or any public body, department or agency of the State); N.J.S.A. 18A:64G-6, 7 (University capable of being sued and has the power ...

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