On certification to the Superior Court, Appellate Division, whose opinion is reported at 263 N.J. Super. 163 (1993).
Pollock, Wilentz, Clifford, Handler, O'Hern, Garibaldi, Stein
The opinion of the court was delivered by POLLOCK, J.
This case, like its companion case, Township of Washington v. New Jersey State Policemen's Benevolent Ass'n, Local 206, N.J. (1994), involves the sufficiency of a compulsory-interest-arbitration award. Petitioner, Hillsdale PBA Local 207 (Local 207 or the PBA), and respondent, Borough of Hillsdale (the Borough or Hillsdale), could not agree on the terms of a collective-negotiation agreement for the Borough police force for the years 1991, 1992, and 1993. Pursuant to N.J.S.A. 34:13A-14 to -21, an amendment to the Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -21, commonly known as the Compulsory Interest Arbitration Act (the Act), Local 207 petitioned the Public Employment Relations Commission (PERC) to initiate interest arbitration. N.J.S.A. 34:13A-16 (section 16) requires the arbitrator to choose between the parties' final offers. The arbitrator chose Local 207's offer, and the Chancery Division confirmed the award. The Appellate Division reversed, 263 N.J. Super. 163 (1993), vacating the award and remanding the matter for a new hearing before a new arbitrator. We granted Local 207's petition for certification, 134 N.J. 478 (1993), and now reverse. Although we agree substantially with the Appellate Division that the arbitrator's award did not comply with the requirements of section 16g, under the circumstances we believe that we should not disturb the award.
This case arises from a salary dispute between a municipality and its police department, but its resolution inevitably will affect the public. In an era of rising costs and budget caps, a municipality feels the initial impact of salary increases for police and fire departments. The taxpayers, however, feel the ultimate effect. Generally speaking, salary and related costs constitute a large part of a municipal budget. According to the Borough, most of those costs are attributable to police and fire departments. The Borough contends that police and fire department salary increases have exceeded increases for other public and private employees and have outstripped the cost of living. From its perspective, police and fire fighters have received disproportionately high wage increases. From another perspective, police and fire fighters perform essential public services, often at great risk and with little recognition. Accordingly, we proceed with an appreciation for the services that police and fire departments render and for the Legislature's attempt to limit the amount that arbitrators may order municipalities to pay for them. We also appreciate the public concern over the mounting costs of state and local government. Control of these costs, however, primarily rests in the hands of other branches and levels of government.
In their negotiations, Hillsdale and Local 207 resolved all non-economic issues for the 1991-93 collective contract, but not two economic issues concerning salary increases and the "banking" of compensatory time beyond a calendar year. In response to Local 207's petition, PERC appointed an arbitrator to conduct compulsory interest arbitration to resolve the two issues.
Hillsdale's last offer proposed banking up to eighty hours of compensatory time and annual salary increases:
By comparison, Local 207's last offer proposed banking up to 100 hours of compensatory time and semi-annual salary increases. Such increases, which are peculiar to police and fire-fighter contracts, compound annual salary increases. Local 207 proposed increases:
Section 16g mandates that interest arbitrators, when choosing between two final offers, shall consider eight factors. The factors include the public welfare, comparisons of salaries and conditions of employment to certain other public and private employees, overall compensation, stipulations of the parties, the lawful authority of the municipality, financial effect on the community, the cost of living, and the continuity and stability of police- and fire-department employment.
Before the arbitrator, the dispute centered on a comparison of the parties' final offers with salaries and non-wage benefits paid to police officers in similar communities. Local 207 urged as the appropriate basis for comparison the salary and non-wage benefits of police officers throughout Bergen County. It further contended that even if the comparison were limited to a smaller group of Bergen County communities, the Hillsdale police salaries and benefits were lower. Local 207 argued that, contrary to the trend in similar communities, the Borough's final offer would result in a diminution in salary increases. In addition to the data on comparable employment, the PBA also sought to show ...