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Board of Educ. of Tp. of Neptune v. Neptune Tp. Educ. Ass'n

July 18, 1996

BOARD OF EDUCATION OF THE TOWNSHIP OF NEPTUNE, PETITIONER-APPELLANT,
v.
NEPTUNE TOWNSHIP EDUCATION ASSOCIATION, NEPTUNE TOWNSHIP GENERAL SUPERVISORS ASSOCIATION, NEPTUNE TOWNSHIP DEPARTMENT CHAIRPERSONS ASSOCIATION, AND NEPTUNE TOWNSHIP PRINCIPALS ASSOCIATION, RESPONDENTS-RESPONDENTS.



On appeal from the State Board of Education.

Approved for Publication July 22, 1996. As Corrected July 25, 1996.

Before Judges Dreier, A.m. Stein and Kestin. The opinion of the court was delivered by Kestin, J.A.D.

The opinion of the court was delivered by: Kestin

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

In January 1989, the Neptune Board of Education (Board) changed its method of paying over its employees' voluntary salary deductions for credit union and annuity plans. Previously, in a system in place for twenty years, each employee's total monthly contribution was paid over to the credit union or annuity agents on the fifteenth of each month. Beginning January 1989, payments over were made twice monthly, as the funds were deducted from the employees' paychecks on the fifteenth and last day of each month. The effect of the change was to deprive the employees of the additional interest that had formerly accrued between the two paydays.

The Neptune Township Education Association (Association), as the employees' representative, filed an unfair practice charge with the Public Employment Relations Commission (PERC) which, on December 15, 1989, found that the Board had violated N.J.S.A. 34:13A-5.4(a)(1) and (5) "when it unilaterally changed a mandatorily negotiable term and condition of employment." The Board was ordered to restore the former system for paying over the deductions, to negotiate the issue in good faith with the Association, and to make whole any employees who could establish losses in interest as a result of the new methods. We affirmed on March 7, 1991, in an unpublished decision; and on June 18, 1991, the Supreme Court denied the Board's petition for certification. 126 N.J. 333 (1991). The PERC mandate, which had previously been stayed, was then implemented.

On July 26, 1991, the Board filed a "petition for declaratory judgment" seeking the Commissioner of Education's construal and application of N.J.S.A. 18A:66-127 and N.J. Const., art. VIII, § 3, PP 2 and 3, pursuant to the Commissioner's "jurisdiction to hear and determine ... all controversies and disputes arising under the school laws," N.J.S.A. 18A:6-9. On the Association's motion, the Commissioner dismissed the statutory issue as having been fully addressed in the prior PERC proceeding. The motion to dismiss was denied as to the constitutional issue, however. The Commissioner determined that that issue had not been previously addressed, and ruled that because "the constitutional claim arises from prior Commissioner's decisions having similar fact patterns" it was appropriate for consideration. N.J.A.C. 6:24-2.1 provided the procedural framework. In confirming the Commissioner's authority to make declaratory rulings "with respect to the applicability ... of any statute or regulation enforced or administered by the Commissioner", it is a regulatory effectuation of the powers generally conferred in the Administrative Procedure Act, N.J.S.A. 52:14B-8.

The matter was transmitted to the Office of Administrative Law as a contested case. N.J.S.A. 52:14B-10(c).

The administrative law Judge disposed of the matter on a motion for summary decision. N.J.A.C. 1:1-12.5. He explored some decisional law on the public purpose test that governs the application of N.J. Const. art. VIII, § 3, PP 2 and 3, and concluded:

The Board's current method of crediting payroll deductions of teaching staff members credit union and/or tax shelter accounts on the 15th day of each month prior to a full deduction of earned income for services rendered constitutes an advancement of public money and violates the provision of the New Jersey Constitution, Article VIII, Section III, paragraph 2 and 3.

In reaching that Conclusion, the administrative law Judge relied on a 1977 decision by the Commissioner involving the Brick Township Board of Education which held:

The payment of salary beginning on September 3 for the majority or total of pay period in which teachers have not yet rendered a proportionate number of days of teaching service is illegal.

The administrative law Judge articulated the following reasons for reaching his decision:

The Board's crediting method clearly advances money to teaching staff members for services not yet rendered to the Board. The Board is crediting the payroll deduction amount from the last day of the month paycheck prior to the teaching staff member providing services for that pay period. In addition, the crediting method does not serve any public purpose. While the crediting method might result in a municipal savings in administrative costs, it is insufficient to support a determination that the crediting method serves a public purpose, [citing Riddlestorffer v. Rahway, 82 N.J. Super. 36, 46, 196 A.2d 550 (Law Div. 1963)]. The only interests served by the crediting method are the interests of the employees who participate in the payroll deduction program. Therefore, since the Board is crediting the ...


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