Chief Justice Poritz and Justices Long, Verniero, LaVECCHIA, Zazzali, Albin
and Wallace join in this opinion.
(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 collective bargaining agreement between the Township of Teaneck (Teaneck) and the Teaneck Firemen's Mutual Benevolent Association Local 42 (TFMBA) expired on December 31, 1996, and efforts to negotiate another agreement failed. TFMBA, representing Teaneck's sixty-eight rank and file firefighters, declared an impasse in negotiations and, on January 2, 1997, filed a petition with the Public Employee Relations Commission (PERC) to initiate compulsory interest arbitration pursuant to the Police and Fire Public Interest Arbitration Reform Act (Reform Act).
The parties mutually agreed on Carl Kurtzman as arbitrator and he was appointed in February 1997. After unsuccessful attempts to mediate the dispute, Kurtzman asked to withdraw as arbitrator. Over Teaneck's objection, Kurtzman's resignation was granted. James Begin was appointed the new arbitrator and, after conducting hearings on various dates between June and October 1998, he issued a decision in March 1999: 1) awarding salary increases within the percentages requested by the parties; 2) granting a two percent stipend for firefighters with emergency medical training (EMT) certificates; and 3) adopting, on a trial basis, a new shift schedule for TFMBA firefighters of a twenty-four-hour shift, followed by seventy-two hours off duty, known as a "24/72."
TFMBA firefighters worked two ten hour days followed by twenty-four hours off, then two fourteen hour nights, followed by seventy-two hours off, known as a "10/14." Testimony before the arbitrator on behalf of the TFMBA's proposed shift change attributed certain significant improvements to the adoption of the 24/72-work schedule in other municipalities, including an increase in related fire services, a decrease in firefighter and civilian injuries, and a decrease in sick leave and overtime. There was also testimony that this schedule raised morale and that there was a significant trend among firefighters' associations to adopt the 24/72. In opposition to the schedule change, Teaneck presented testimony from its fire chief that the switch would impede proper supervision because the officers would be on a different schedule, the 10/14.
TFMBA also produced evidence in respect of nine other fire departments that awarded EMT stipends. Teaneck presented testimony that there were more calls requiring medical assistance, that firefighters were encouraged to take EMT training, and that it paid for maintenance of those certifications; nonetheless, it was not a matter of policy for Teaneck to pay stipends. Both sides also presented testimony regarding Teaneck's ability to fund TFMBA's economic proposals, with TFMBA concluding that Teaneck was financially able to fund the proposals, while Teaneck contended that there was an anticipated budget deficit in 1998.
In ruling for the adoption of the 24/72-shift schedule, the arbitrator relied on the prevalence of that schedule in other communities, the findings regarding the substantial benefits of the 24/72 shift, and the testimony that the rank-and-file and officers could work effectively on different schedules. The arbitrator provided that the 24/72 shift should not continue beyond a trial period unless the parties agree that the new schedule achieved certain objectives, including reducing sick leave and overtime, maintaining or improving productivity, improving morale, and reducing civilian and firefighter injuries. In addition, the arbitrator found three compelling reasons for awarding a two percent stipend for EMT certification: 1) an increase in the first medical response workload; 2) the award of EMT stipends in other communities at a higher rate than two percent; and 3) as a "quid pro quo" for a change in dates of salary increases.
Teaneck appealed to PERC from the arbitrator's decision and, on October 29, 1999, PERC issued its decision affirming the arbitrator's award but modifying the implementation of the 24/72 schedule pending either agreement of the parties or the adoption of the 24/72 schedule for the fire officers' unit. Finding that supervision would be impaired with the two units on different schedules, PERC delayed implementation of the new schedule until it could be employed for both units.
Teaneck appealed to the Appellate Division from PERC's decision, claiming that the work schedule and stipend issues were non-negotiable management prerogatives. Teaneck also claimed that the removal of Kurtzman as arbitrator was without good cause and was arbitrary and capricious. TFMBA cross-appealed from PERC's modification of the arbitrator's order implementing the 24/72-work schedule. The Appellate Division affirmed in part and reversed and remanded in part.
The Appellate Division found no basis in Teaneck's claim of error in respect of the replacement of Kurtzman as arbitrator, concluding that the record substantiates that Kurtzman was not removed by PERC and that there was no evidence presented showing that honoring Kurtzman's request to withdraw was arbitrary or capricious. Further, the Appellate Division noted that Teaneck did not file a scope-of-negotiations petition with PERC stating that negotiations were not appropriate on either the shift change or the EMT stipend. Absent a petition asserting that these are non-negotiable subjects, the parties are deemed to have agreed to arbitrate all unresolved issues. Thus, Teaneck is estopped from arguing the issue of negotiability of the EMT stipend. The panel upheld the EMT stipend, finding sufficient evidence supporting PERC's determination.
On the work-schedule issue, the Appellate Division noted its different procedural posture. While the issue of negotiability of the shift proposal also was not addressed in a scope-of-petition filing, it was brought up before the arbitrator who did not have authority to rule on it. The issue of negotiability was before PERC, which decided it in the course of considering whether the evidence adduced at arbitration supported the award. Thus, the Appellate Division determined that it need not preclude a challenge to negotiability made after the arbitration when PERC decided to consider the issue.
The Appellate panel addressed the issue of whether the suggested shift change would interfere with Teaneck's managerial prerogative to determine public policy. The panel found that Teaneck's need for effective supervision should not preclude negotiability of a change to a 24/72 shift for firefighters. The Appellate Division concluded that PERC was correct in determining that the issue of work schedules for rank-and-file firefighters was not foreclosed as a managerial prerogative and was subject to mandatory negotiations or interest arbitration. However, the Appellate Division concluded that by modifying the arbitrator's award rather than remanding back to the arbitrator for reevaluation, the rank-and-file was tied to its superior officers, thereby entwining the future collective bargaining of each unit. According to the Appellate Division, PERC's decision dooms the TFMBA rankand-file to continuation on the 10/14 shift in perpetuity so long as Teaneck continues to oppose a change to the 24/72 shift, which is an arbitrary and unreasonable result. The Appellate Division found no error in PERC establishing a new guideline on the impairment of supervision, but that by modifying the award rather than remanding to the arbitrator, PERC exceeded its scope of review, improperly foreclosing the arbitrator from applying PERC's new guideline to his factual findings, and effectively depriving TFMBA from consideration of the 24/72 schedule on the trial basis awarded by the arbitrator. Thus, the Appellate Division reversed PERC's order and remanded to PERC to succinctly articulate its new guideline regarding impairment of supervision and remanded to the arbitrator for evaluation of proofs and factual findings in light of PERC's new standard.
HELD: Judgment of the Appellate Division is AFFIRMED substantially for the reasons expressed in Judge Collester's opinion below. The decision of PERC to uphold the two percent stipend for TFMBA firefighters with EMT certification and to permit negotiation of the proposed shift change is upheld. PERC's decision to modify the arbitrator's award depriving TFMBA of the 24/72 shift change on a trial basis is reversed and remanded to the ...