On appeal from Superior Court, Chancery Division, Bergen County.
Petrella, Long and Keefe. The opinion of the court was delivered by Petrella, P.J.A.D.
[263 NJSuper Page 168] In these two appeals, which we consolidate for purposes of this opinion, the Borough of Hillsdale (Hillsdale) and the Township of Washington (Washington Township) appeal from orders of the Chancery Division which summarily confirmed the separate opinions and awards of the arbitrators appointed by
the Public Employment Relations Commission (PERC).*fn1 After binding "interest arbitration" to resolve the disputed economic issue of salary increases for the respective police forces, the arbitrators in each of the two contract negotiations chose the last "offers" (actually they were demands) of the respective unions, the Hillsdale PBA Local 207 (Local 207) and the New Jersey State Policemen's Benevolent Association, Inc., Local 206 (Local 206) (the employee representative for the police of Washington Township). Unlike arbitration as normally understood, so-called "interest arbitration"*fn2 is not consensual arbitration but is mandated by statute in the public sector for impasse disputes between municipal public employers and police and firemen pursuant to N.J.S.A. 34:13A-16, and is essentially restricted to the last final offer (unless all parties otherwise agree).
On appeal, Hillsdale argues that under the applicable standard of review the arbitration award must be vacated because: Local 207 failed to offer adequate proofs to justify an award in its favor; the award is speculative, conjectural, and contrary to the intent of N.J.S.A. 34:13A-1 et seq.; and it was procured by "undue means." Hillsdale contends as a result that a remand is required for a new arbitration hearing before a new arbitrator.
Washington Township argues that the arbitration award affecting it should be vacated because the arbitrator failed to
properly apply the factors set forth in N.J.S.A. 34:13A-16g in accordance with applicable law.
The Hillsdale Arbitration
After the expiration of the last collective negotiation agreement*fn3 between Hillsdale and Local 207, the parties were unable to finalize a new agreement. Local 207 filed a petition with PERC on December 17, 1990 to initiate compulsory interest arbitration. On February 1, 1991, PERC appointed Ernest Weiss as "interest arbitrator" in accordance with N.J.A.C. 19:16-5.6.
No non-economic issues were in dispute and the parties agreed upon a three year contract to cover 1991 through 1993. Informal efforts to resolve the disputed economic issues proved unavailing. At those arbitration sessions conducted in April and May of 1991, the parties offered testimony as well as various exhibits and documents*fn4 on the unresolved issues of
salary increases and the "banking of compensatory time," to allow "time off" to be saved beyond the end of the calendar year.
Hillsdale's last offer*fn5 would have permitted banking of compensatory time up to eighty hours and given annual salary increases as follows:
Local 207's last "offer" called for banking of compensatory time up to one hundred hours and semi-annual (or "split year") incremental salary increases (which had the effect of compounding the increases twice a year):
January 1, 1991 -5% increase
July 1, 1991 -3% increase
January 1, 1992 -4% increase
July 1, 1992 -4% increase
January 1, 1993 -3% increase
July 1, 1993 -4% increase
In its post-hearing brief Local 207 emphasized to the arbitrator: the similarity between communities in Bergen County; the increases in arrests, juvenile offenses and motor vehicle offenses within the borough; that its comparability analysis of salary and non-wage benefits in "similar communities" showed that Local 207's last "offer," if accepted, would still be less than the Bergen County average in cost of implementation and the negotiated or awarded wage resolution for contracts covering 1991 to 1993; that awards both before and after changes in the Cap Law*fn6 were on average higher than the increase it
sought; and that even in the Pascack Valley group of municipalities (of which Hillsdale is a part) used as a reference for comparability by the borough, Local 207's last offer position would still be below average. Local 207 also argued: Hillsdale's financial analysis was flawed; the borough's offer would result in a downward movement in salary increases which was not justified by any substantial or overriding reason; Hillsdale had the ability to pay (reinforced by expert testimony of Dr. Robert Werner, Ph.D.); and the trend within Bergen County supported Local 207's position.
Hillsdale stressed the failure of Local 207's presentation to consider most of the statutory criteria. It argued that Local 207 had not given reasons why its grouping of Bergen County municipalities was more comparable than the Pascack Valley municipalities; and the interest and welfare of the municipality and its citizens were furthered best by the borough's offer. Hillsdale also argued that a comparison of its last salary offer (when considered with the benefits and indirect compensation already provided) with other Pascack Valley communities demonstrated that Hillsdale police are well compensated; its offer to Local 207 was comparable to (but still higher than) salary increases given to other public employees in the municipality; the borough has a high tax rate but a low assessed valuation per capita, and is highly dependent on residential property taxes (with little vacant land remaining for new development); the consumer price index had increased 46.2% over the last nine years, while Hillsdale police salaries have increased by almost 66%; and the Hillsdale police enjoyed very stabile, secure employment, especially when compared to other types of employment.
After quoting the statute and restating the parties' respective last offers and positions, the arbitrator gave the following
reasons for selecting Local 207's position in his October 30, 1991 written opinion and award:
Initially it should be noted that the statutory criteria usually dissolves [ sic ] into a determination of the more reasonable offer. Rarely is a determination reached under any single criteria [ sic ] which proves dispositive of the issue in and of itself. In this case the expert testimony established to my satisfaction the Borough's ability to pay. Dr. Werner's credentials were impressive and his testimony was convincing. Undoubtedly any award of wages will have an impact on the Borough but no substantially detrimental result was proven by the Borough.
Analyzing the numerous exhibits, particularly those relating to comparability -- whether narrow and limited to "The Pascack Ten" or viewed county-wide, leads me to the inevitable Conclusion that the increases sought by the PBA are reasonable. The only issue remaining is whether it is the more reasonable of the two.
The Association has met that burden also -- i.e., proving that its offer is more reasonable. A review of the comparables shows that the Association's request is modest. Although one can certainly question the level of increase in light of the current economic times, nevertheless, this is the neighborhood out there. Clearly the PBA's offer is midstream . . . . Had circumstances been demonstrated that would have created financial difficulties, or operational problems or any difficulty created or worsened by the award of the PBA Last Offer, then Hillsdale's offer may well have been deemed the more reasonable.
Finally, with respect to the disputed grouping comparison for comparing police salaries, the arbitrator found the county-wide group appropriate because "the bulk of the Towns [in Bergen County] are comparable and little distinction exists as to the nature of the police work."
Hillsdale's resistance to the implementation of the arbitrator's award led Local 207 to seek confirmation of the award in the Chancery Division. Hillsdale counterclaimed seeking to vacate that award. In confirming the arbitration award, the Chancery Division Judge opined that "the arbitrator here performed precisely those functions entrusted to an arbitrator and consigned to arbitration by the Legislature."
The Washington Township Arbitration
The last collective negotiation agreement between Washington Township and Local 206, which expired on December 31,
1990, covered twenty police officers. It provided for a maximum yearly salary of $40,069 for basic patrolmen. Two negotiating sessions (on December 14, 1990 and February 12, 1991) failed to produce a new agreement. As a result of this inability to agree on a new contract, Local 206 filed a petition for compulsory interest arbitration with PERC on March 5, 1991.
Thereafter, PERC appointed Barbara Zausner Tener as "interest arbitrator." Some matters were resolved at meetings of the parties and the arbitrator. Nevertheless, a complete settlement was not achieved and a formal interest arbitration commenced. Two additional meetings resulted in some minor issues being resolved.
Washington Township's last offer*fn7 on the disputed salary issue was:
Effective July 1, 1991, a 9% increase;
Effective July 1, 1992, a 6% increase;
Effective January 1, 1993, a 6% increase.
Local 206's last "offer" was:
Effective July 1, 1991, a 9% increase;
Effective January 1, 1992, a 4% increase;
Effective July 1, 1992, a 4% increase;
Effective January 1, 1993, a 3% increase;
Effective July 1, 1993, a 4% increase.
Local 206 also submitted four non-economic proposals, described as:
(1) payroll procedure: to make payroll checks available to police employees after the close of banking hours on the work day immediately preceding the regular pay day;
(2) police services: a procedure to govern distribution of off duty police work within the Township;*fn8
(3) maternity leave: to allow female officers an unpaid leave of up to 12 months during pregnancy without loss of seniority or benefits;*fn9
(4) cardiac disability: to require that a cardiac disability suffered by a police officer be considered ...