On appeal from the final decision of the New Jersey Department of Personnel Merit System Board.
Antell, Dreier, Skillman, JJ. The opinion of the court was delivered by Dreier, J.A.D.
South Orange PBA Local 12 and the South Orange Police Superior Officers Association appeal from a decision of the Merit System Board approving South Orange's resort to an open competitive examination rather than a promotional examination to fill the position of Police Chief. They also object to the creation of a separate promotional list limited to South Orange residents. We have granted New Jersey State PBA's motion to intervene as amicus curiae in this matter.
The Township of South Orange Village operated without a Police Chief for many years. From April 1, 1989 until July 1, 1992, South Orange appointed a Village resident, Steven Palamara, a police captain on leave from Irvington Police Department, to the unclassified position of civilian Police Director. As police director, Palamara ran the day-to-day affairs of the police department and performed many of the duties of a police chief. This caused two police unions, South Orange PBA Local 12 and South Orange Police Superior Officer's Association, to complain to the Attorney General's Office. Specifically, the unions claimed that Palamara was a civilian who was running the police department and unduly interfering with uniformed police officers' performance of their duties. The Attorney General's Office agreed, and ruled that Palamara was ineligible to receive pension credits. As a result, to protect his pension, Palamara returned to his position as a police captain in the Irvington Police Department.
Shortly thereafter, South Orange created the position of Police Chief. On May 27, 1992, South Orange submitted a letter to the New Jersey State Department of Personnel requesting that an open competitive examination, limited to South Orange residents, be held to fill the police chief position. South Orange claimed that an open competitive examination, as opposed to a promotional examination, was appropriate because the South Orange Police Department "has no Deputy Chief position within its organizational
structure and currently there are only two Captains serving within the Police Force and established within our organizational structure."
By letter dated July 2, 1992, the unions objected to the open competitive examination and to the residency limitation. They alleged that the type of examination and the residential limitation were designed to retain Palamara's services by preventing certain qualified superior officers currently employed by South Orange, specifically a nonresident lieutenant who had strenuously advanced the Superior Officers' position, from taking the examination.
The Department of Personnel approved South Orange's request to hold an open competitive examination limited to South Orange residents to fill the position of Police Chief.*fn1 The unions then appealed the Department's determination to the Merit System Board. In a final decision dated November 12, 1992, the Board affirmed the Department's determination. After an unsuccessful motion for reconsideration, the unions appealed to this court.*fn2
We must determine whether the Board's failure to direct a competitive examination open to both captains and lieutenants, violated the Civil Service Act, the Board's own regulations or other principles of law. Where the Commission's actions "violated legislative policies expressed or implicit in the civil service act," it cannot be sustained. Campbell v. Department of Civil Serv., 39 N.J. 556, 562,
189 A.2d 712 (1963).*fn3 Applying this stringent review standard, we find that the Board erred in setting the standard for promotional examinations.
We start our analysis with certain basic principles in mind. One such principle is the constitutional mandate that "[a]ppointments and promotions in the civil service of the State . . . shall be made according to merit and fitness to be ascertained, as far as practicable, by examination, which, as far as practicable shall be competitive . . . ." N.J. Const. art. VII, § 1, para. 2.*fn4 Thus, the position of police chief in this case could be constitutionally filled either by a promotional examination, i.e., a "test open to permanent employees who meet the prescribed requirements for admission," N.J.A.C. 4A:1-1.3, or by an open competitive examination, which is a "test open to members of the public who meet the prescribed requirements for admission." N.J.A.C. 4A:1-1.3.
N.J.S.A. 11A:4-2 expresses strong preferences for promotional examinations. Open competitive as opposed to promotional examinations are to be employed only where there are "fewer than three qualified permanent employees in appropriate lower titles in the unit scope . . . ." N.J.A.C. 4A:4-2.3(a)2. The unit scope is the defined part of the agency, here the police department, used to
determine eligibility for promotional examination. N.J.A.C. 4A:1-1.3.
In N.J.A.C. 4A:4-2.3, the Board with great specificity has set forth the standards for departing from the preferred promotional examinations and employing an open competitive examination. Subparagraph (a) provides:
(a) Vacancies shall be filled by promotional examination unless the Commissioner determines that it is in the best interest of the career service to hold an open competitive examination. The determination to announce an open competitive ...