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New Jersey Turnpike Authority v. American Federation of State

March 20, 1996


On appeal from the Public Employment Relations Commission.

Approved for Publication March 20, 1996.

Before Judges Havey, D'Annunzio and Conley. The opinion of the court was delivered by Conley, J.A.D.

The opinion of the court was delivered by: Conley

The opinion of the court was delivered by CONLEY, J.A.D.

These consolidated appeals involve determinations by the Public Employment Relations Commission (PERC) certifying three separate collective negotiations units within the New Jersey Turnpike Authority (Authority) and in doing so rejecting, for almost all of the positions involved, the Authority's contention that the affected employees are either "managerial executives" or "confidential employees" as defined in N.J.S.A. 34:13A-3(f) and (g). The units comprise those employees who occupy upper and middle level management positions within the Authority's hierarchical structure.

At the time of the PERC decisions, the Authority, governed by the board of commissioners and their executive director, operated through nine departments. As described by the Hearing Officer, the chief engineer reports directly to the executive director on behalf of four of the departments. The other five departments are managed by directors and the comptroller, who also report directly to the executive director. As we understand it, these positions are not involved in this appeal. It is the management level below these positions for which certification was sought and those positions consist of section managers, assistant managers and professionals. Compared to the approximately 2,200 public employees employed by the Authority, the upper and middle level managerial team within the Authority's structure consists of approximately 100 employees. The practical effect of PERC's decisions is to leave the Authority with only twenty members of its management team from whom it can expect full loyalty uncompromised by union membership. *fn1

We acknowledge at the outset that ordinarily we defer to an agency's interpretation of a statute that it is charged with enforcing. No such deference, however is required where the interpretation "flout[s] the statutory language and undermine[s] the intent of the Legislature." GE Solid State, Inc. v. Director, Div. of Taxation, 132 N.J. 298, 306-07, 625 A.2d 468 (1993). As defined in N.J.S.A. 34:13A-3(f), "managerial executives" are "persons who formulate management policies and practices, and persons who are charged with the responsibility of directing the effectuation of such management policies and practices...." We believe that in concluding that most of the affected management employees here were not "managerial executives," PERC misconstrued the Legislature's intent and the plain statutory meaning of that term. As defined in N.J.S.A. 34:13A-3(g), "confidential employees" as employees "whose functional responsibilities or knowledge in connection with the issues involved in the collective negotiations process would make their membership in any appropriate negotiations incompatible with their official duties." We are also convinced that PERC similarly has misconstrued and misapplied the "confidential employee" definition to the facts presented to it. We thus remand the entire matter to PERC for a comprehensive reconsideration consistent with this opinion. As a result of our Conclusion to do so, we do not discuss in detail either the procedural history or the extensive facts applicable to each of the affected employees. Rather, we focus our attention upon the two critical statutory exceptions.


We begin our analysis with some general observations. It is true, as asserted by respondents, that the New Jersey Constitution grants to public employees the right to organize, present, and make known to their public employers their grievances and proposals through representatives of their own choosing. N.J. Const. art. I, P 19. That right has been codified by the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -29 (the Act), which, it has been said, is remedial. Galloway Tp. Bd. of Educ. v. Galloway Tp. Ass'n of Educ. Secretaries, 78 N.J. 1, 15, 393 A.2d 207 (1978). The right to negotiate in the public sector, however, is not unlimited. It is more narrow than the right to bargain that is accorded private employees, Lullo v. Int'l Ass'n of Fire Fighters, 55 N.J. 409, 415, 262 A.2d 681 (1970), and is further limited by the fundamental differences between private employers and public employers in the context of labor relations. E.g., Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 163, 393 A.2d 278 (1978); Lullo, supra, 55 N.J. at 440; Rutgers, The State Univ. v. Rutgers Council of AAUP Chapters, 256 N.J. Super. 104, 114-15, 606 A.2d 822 (App. Div. 1992), aff'd o.b., 131 N.J. 118 (1993). And see State v. Professional Ass'n of N.J., Dept. of Educ., 64 N.J. 231, 242-43 (1974) ("there are several clues to a supervening legislative policy underlying [the Act] that the peculiar needs, requirements and interests of the general public and of government as an employer should be accorded attention coordinate with that of employee rights in the interpretation and administration of the Act." Id. at 242).

Even in the private sector, one of the overriding and limiting concerns affecting who may sit on the other side of the bargaining table with the employer has been the thought that part of the objective of the federal labor law "'was to assure the employer of a loyal and efficient cadre of supervisors and managers independent from the rank and file.'" State Management Ass'n of Conn., Inc. v. O'Neill, 204 Conn. 746, 754, 529 A.2d 1276, 1280 (1987) (quoting Shelofsky v. Helsby, 32 N.Y.2d 54, 60-62, 295 N.E.2d 774, 776, 343 N.Y.S.2d 98, 102, appeal dismissed, 414 U.S. 804, 94 S. Ct. 60, 38 L. Ed. 2d 41 (1973)). And see NLRB v. Yeshiva Univ., 444 U.S. 672, 682, 100 S. Ct. 856, 862, 63 L. Ed. 2d 115, 125 (1980) (the key concern underlying the managerial exclusion in the federal labor law is "that an employer is entitled to the undivided loyalty of its representatives."); NLRB v. Bell Aerospace Co., 416 U.S. 267, 278-79, 94 S. Ct. 1757, 1764, 40 L. Ed. 2d 134, 145 (1974) (to allow managers to be union members would "'obliterate the line between management and labor.'" .... The federal labor law was "intended to protect 'laborers' and 'workers' whose right to organize and bargain collectively had not been recognized by industry, resulting in strikes, strife, and unrest. By contrast, there was no similar history with respect to foremen, managers, superintendents, or vice-presidents.").

This concern, it has been said, applies as well to the public sector. State Management Ass'n of Conn., Inc. v. O'Neill, supra, 204 Conn. at 754, 529 A.2d at 1280; Shelofsky v. Helsby, supra, 32 N.Y.2d at 61, 295 N.E.2d at 774, 343 N.Y.S.2d at 98. And see Board of Regents of the Regency Univs. Sys. v. Illinois Educ. Labor Relations Bd., 166 Ill. App. 3d 730, 742-43, 520 N.E. 2d 1150, 1158, 117 Ill. Dec. 799 (App. Ct. 1988); Missouri Nat'l Educ. Ass'n v. Missouri State Bd. of Mediation, 695 S.W.2d 894, 897-98 (Mo. 1985) ("in the course of labor relations, someone must act on behalf of the public employer ... among the categories of employees whose duties involve acting directly or indirectly in the interest of the employer in relation to other employees are 'managerial' employees and 'confidential' employees."). Cf. Board of Educ. of West Orange v. Wilton, 57 N.J. 404, 425, 273 A.2d 44 (1971) ("one underlying concept which emerges from a study of statutes, texts and judicial decisions in employer-employee relations, whether in the public or private employment sector, is that representatives of the employer and the employees cannot sit on both sides of the negotiating table. Good faith negotiating requires that there be two parties confronting each other on opposite sides of the table. Obviously both employer and employee organizations need the undivided loyalty of their representatives and their members, if fair and equitable settlement of problems is to be accomplished.").

We reject respondent's contention that these concerns were not considered in the 1974 amendments to the Act, which, for the first time, defined managerial executives and confidential employees, both of whom are excluded from the representational rights of public employees. N.J.S.A. 34:13A-5.3. Concerns of similar nature were recognized in the 1968 Act. State v. Professional Ass'n of N.J., Dept. of Educ., supra, 64 N.J. at 242-243. There is nothing in the legislative history applicable to the 1974 amendments that we read to demonstrate a different approach. Specifically, we reject the argument that the 1974 amendments reflect a narrow view of those two categories of employees deemed to be so aligned with management as to make their inclusion in a bargaining unit antithetical to public sector principles thus far espoused in this State.


The 1968 Act (Chapter 303) defined "employee" to exclude "elected officials, heads and deputy heads of departments and agencies, and members of boards and commissions...." L. 1968, c. 303, ยง 4 (codified at N.J.S.A. 34:13A-3(d)). Additionally, N.J.S.A. 34:13A-5.3, excluded "any managerial executive" from the right to ...

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