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Board of Educ. of Tp. of Neptune in County of Monmouth v. Neptune Tp. Educ. Ass'n

May 8, 1996


On certification to the Superior Court, Appellate Division.

The opinion of the Court was delivered by Garibaldi, J. Chief Justice Wilentz and Justices Handler, Pollock, O'hern, Stein and Coleman join in this opinion.

The opinion of the court was delivered by: Garibaldi

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

The Board of Education of the Township of Neptune in the County of Monmouth v. The Neptune Township Education Association, et al. (A-102-95)

Argued February 14, 1996 -- Decided May 8, 1996

GARIBALDI, J., writing for a unanimous Court.

The issue on appeal is whether, after the expiration of a three-year collective bargaining agreement N.J.S.A. 18A:29-4.1 (section 4.1) prohibits a board of education from paying to its teaching staff salary increments set forth in the expired agreement.

On September 14, 1988, the Neptune Board of Education (the Board) entered into a three-year collective bargaining contract, effective June 1, 1988 and ending June 30, 1991, with the Neptune Education Association (NEA). Similar three-year agreements were reached with the Neptune Principals Association (NPA) and the Custodians' Association. Each contract contained various salary guides providing for increments in pay as employees gained additional years of service. Both sides understood that the contract would expire on July 1, 1991.

Prior to the end of the contract period, the NEA and NPA (collectively, the unions) and the Board were unable to agree on a new contract. On June 28, 1991, NEA's counsel advised the Board that NEA would institute suit on July 1 if the Board did not move those employees represented by the NEA to the next step on the expired salary guides. Despite the fact that these guides were part of the expired negotiated agreements, the Board complied. On July 1, all the employees who were not already at the top of the salary guide were moved to the next step of their respective salary guides and their salaries were adjusted, accordingly.

Although it paid the increments, the Board filed a petition with the Commissioner of Education (Commissioner) seeking a declaratory judgment that it was prohibited by section 4.1 from paying salary increments required under the expired contracts. The Board contended that it could not pay these increments because that would result in extending the binding nature of the schedule for a fourth year, beyond the mandate of section 4.1. The Commissioner referred the matter to the Office of Administrative Law. The Administrative Law Judge (ALJ) ruled for the Board, finding that section 4.1 preempted labor law and prohibited the Board from paying salary increments beyond the date of the contract, thereby extending them to a fourth year.

The Commissioner reversed the decision of the ALJ, concluding that: section 4.1 neither prohibits nor mandates payment of salary increments set forth the expired contracts; and the case was controlled by the Employer-Employee Relations Act (the Act) over which the Public Employment Relations Commission (PERC) has exclusive jurisdiction. The Commissioner dismissed the case. The State Board affirmed substantially for the reasons expressed by the Commissioner.

The Board appealed to the Appellate Division, which affirmed based on the Commissioner's opinion. The Appellate Division declined to express an opinion as to whether the issue was within PERC's exclusive jurisdiction.

The Supreme Court granted the Board's petition for certification.

HELD: Based on its plain language, the legislative purpose, and this State's public policies, N.J.S.A. 18A:29-4.1 prohibits school boards from paying increments pursuant to expired three-year contracts.

1. The Act prohibits the alteration of existing working terms and conditions. The rule, known as the proscription against unilateral change of the status quo, prohibits an employer from unilaterally altering the status quo concerning mandatory bargaining topics, whether established by expired contract or by past practice, without bargaining first to impasse. The Act does not define whether the status quo should be viewed as static or dynamic; that is, whether it should include previously scheduled salary increments or, instead, freeze the current salaries without increments. PERC has interpreted the Act to require a dynamic status quo, including the payment of increments. (pp. 5-7)

2. New Jersey codified its education law in N.J.S.A. Title 18A. The Act and Title 18A are to be read together and be construed as a whole. Of course, conflicts do arise between the two statutory schemes. In those instances, courts must determine whether education law or labor law should be accorded primary importance. Courts have continued to hold that specific education statutes preempt labor law. (pp. 7-9)

3. Section 4.1 should be interpreted in accordance with its plain meaning if its language is clear and unambiguous and admits of only one interpretation. The plain language of the statute indicates that the Legislature intended to provide that no contract would be binding beyond the third year. The result of paying increments after the third year is that the provisions of the contract become binding for a fourth year, which, under the plain language of section 1.4, is prohibited. The Legislature's purpose in enacting section 4.1 also supports this interpretation. (pp. 9-13)

4. The Court's reading of the statute is also supported by public policy. The practice of automatically paying an increment will limit a Board's ability to respond to fluctuating economic conditions of the school district. Moreover, the State's educational policies, including those established in Abbott v. Burke and the Quality Education Act of 1980, offer further support of the Board's assertion that schools should not be required to pay increments pursuant to expired contracts. By enacting section 4.1, the Legislature intended to allow schools to properly manage their budgets in conformance with the State Constitution and current economic realities. By specifically providing for the prohibition of increments beyond three years, the Legislature signaled its intention to preempt any conflicting general rule of labor law. (pp. 13-15)

5. The statutory changes in 1987 amending section 4.1 to provide for one, two or three year salary policies reveal no indication of any intent to overrule Galloway Township Board of Education v. Galloway Township Education Association, on which the unions rely. However, this language precludes the application of Galloway to this case. Galloway was not decided on the basis of the Act but was decided on the court's interpretation of section 4.1. Furthermore, the Galloway court held that education law preempted the Act. (pp. 15-19)

6. The Court rejects the Board's argument that the Legislature's enactment of the Teacher's Quality Employment Act (TQEA) in 1985, and the corresponding repeal of N.J.S.A. 18A:29-8, indicates the Legislature's disfavor of automatic pay increases. The TQEA was adopted in response to falling salaries and to the fact that the existing schedule had fallen so far beyond inflation. The statute was simply a baseline intrusion into the collective bargaining process, with an intent to leave remaining issues to the negotiating table. (pp. 19-21)

7. Section 4.1 applies only to "teaching staff members," that are defined to include those who are required to be licensed to hold their position. To the extent that any of the litigants in this case are not "teaching staff members," then the prohibition against increments in section 4.1 does not apply. Contracts with those employees should be governed by labor law only, since no education law preempts that general rule. (pp. 21-22)

Judgment of the Appellate Division is REVERSED as it applies to teaching staff members and is AFFIRMED as it applies to other employees.


The opinion of the Court was ...

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