(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).
In this appeal, the Supreme Court must determine whether an arbitrator exceeded his authority when he applied the continuing violation doctrine, which recognizes that there are violations of a collective negotiations agreement that by their nature may be recurring, to consider as timely a grievance that was filed two years beyond the seven-day timeframe provided for in the agreement.
The Alpha Education Association (the Association) represents and negotiates employment contracts for certified personnel, including teachers and nurses, employed by the Board of Education of the Borough of Alpha (the Board). The relevant collective negotiations agreement (the Agreement) between the Association and the Board, covering the period of September 2000 through August 2002, states that the Board will cover the costs for certain part-time employees' health insurance benefits. The Agreement further provides a procedure for the filing of grievances. A grievance must be first reported within seven school days to the administrative superintendent or immediate supervisor.
In the fall of 2001, a teacher complained to the Association that the Board was not paying for her health insurance benefits. She worked at least twenty hours per week, which in the past was sufficient for part-time employees to obtain paid health benefits. The Association decided to raise the issue during negotiations for the next contract period. When the parties were unable to resolve the issue, the Association, in December 2002, filed a grievance on behalf of part-time professional employees working twenty hours or more who were not receiving paid health benefits.
The issue proceeded through the grievance procedure and then to arbitration. The arbitrator determined that although the grievance could have been filed much earlier than December 2002, he would not to dismiss the grievance on procedural grounds. The arbitrator reasoned that the Board's elimination of paid health benefits to certain part-time employees, without notice and without negotiating a change in the Agreement, constituted a continuing violation of the Agreement, which potentially would affect new or different employees for the life of the contract. The arbitrator further determined that the Board was obligated to provide health insurance coverage to part-time employees who work twenty hours or more, but that this award should be applied prospectively only, as the Association's failure to promptly file a grievance should not work a financial hardship on the Board.
The Superior Court, Chancery Division confirmed the arbitrator's award, and the Board appealed. The Appellate Division reversed, reasoning that the arbitrator exceeded his authority in applying the continuing violation doctrine. Having decided the issue on procedural grounds, the panel did not address the arbitrator's award. The Supreme Court granted certification.
The opinion of the court was delivered by: Justice Wallace, Jr.
Argued September 11, 2006
On certification to the Superior Court, Appellate Division.
The issue in this case is whether the arbitrator exceeded his authority in applying the continuing violation doctrine to conclude that plaintiff, the Alpha Board of Education (Board), improperly denied health insurance benefits to certain part-time employees. At some point, the Board discontinued providing health insurance coverage to employees who worked over twenty hours per week but were less than full-time employees. Although the collective negotiations agreement provided that a grievance must be filed within seven school days, defendant, the Alpha Education Association (Association), did not file a grievance until more than two years after the Board discontinued providing the benefits. The arbitrator found that the grievance was not timely filed, but sustained it because there was a continuing violation. The arbitrator ordered the Board to provide health insurance coverage to less than full-time employees working twenty hours or more as soon as feasible. The Chancery Division confirmed the award, but the Appellate Division reversed, reasoning that the arbitrator exceeded his authority in applying the continuing violation doctrine. We granted certification, 185 N.J. 596 (2005), and now reverse.
The facts are not in dispute. The Board is a public school board of education and a public employer under the New Jersey Employer-Employee Relations Act. N.J.S.A. 34:13A-1 to -30. The Association is a public employee representative under the Act and is the exclusive employment negotiator for all certified personnel employed by the Board, including elementary school teachers, special education teachers, and school nurses, but excluding substitute teachers, teaching-principals, and the administrative principal. The Board and the Association entered into collective negotiations agreements to govern their relationship over the years. The collective negotiations agreement (Agreement) at issue in this matter ran from September 1, 2000 through August 31, 2002.
Article 3 of the Agreement provided for grievance procedures, and promulgated various timeframes for the filing of a grievance and an appeal. Pursuant to the Agreement, a grievance must be initially reported within seven school days, and if not resolved to the satisfaction of the grievant, the grievant may appeal. The timeframes governing the appeals process, depending on the level of the grievance, ranged from five to ten days. The relevant portions of the Agreement provided as follows:
III. ARTICLE 3: GRIEVANCE PROCEDURE
1. Since it is important that grievances be processed as rapidly as possible, the number of days indicated at each level shall be considered as a maximum and every effort should be made to expedite the process. The time limits specified may, however, be extended by mutual agreement.
4. Level 1: A teacher*fn1 with a grievance shall within seven (7) school days, first discuss it with the administrative principal (or immediate superior) with the objective of resolving the matter informally. Within five (5) school days after the date of the discussion, the administrative principal (or immediate superior) shall orally make known their decision to the employee.
5. Level 2: If the aggrieved person is not satisfied with the disposition at Level 1, he may file the grievance in writing with the Chairman of the Association's Committee on Professional Rights and Responsibilities (hereinafter referred to as the "PR&R Committee") within five (5) school days. Within five (5) school days after receiving the written grievance the PR&R Committee shall present a written statement of its position on the matter to the administrative principal (or immediate superior) and to the aggrieved. If further discussion is necessary, the administrative principle (or immediate superior) shall hold a meeting upon request of the PR&R Committee and render a written decision within five (5) school days of the receipt of the written statement from the PR&R Committee.
6. Level 3: If the aggrieved person is not satisfied with the disposition of this grievance at Level 2, he may request a review by the Board of Education. . . . The Board shall review the case, shall hold a hearing with the employee if requested by the employee, and shall render a decision in writing within thirty (30) days of receipt of the grievance.
a. A grievance which remains unresolved to the satisfaction of the aggrieved after a decision has been rendered by the Board may be submitted to arbitration within ten (10) calendar days following receipt of the Board's decision by the PR&R Committee upon the written request of the aggrieved, provided the PR&R Committee determines that the grievances is meritorious.
VIII. ARTICLE 8: INSURANCE PROTECTION
A. As of the beginning of the 2000-2002 school year, the Board shall provide the health-care insurance protection designated below. The Board shall pay the full premium for each teacher.
1. The health-care program shall be provided by the Board. Any change in carriers which would alter the level of benefits would be mutually agreed upon by both the Board and the Association.
4. Part-time employees shall be compensated according to the following schedule:
a. 2/5 time employee $275.00 1/2 time employee $325.00 3/5 time employee $375.00*fn2
Until May 1996, the Board was enrolled in the State Health Benefits plan. Pursuant to that plan, all employees who worked at least twenty hours per week were provided benefits, and the Board paid the health insurance premiums. In January 1996, the State Health Benefits plan revised its rules to permit employers to establish minimum work hours per week that an employee must work to qualify for paid health insurance coverage. The Board then approved a resolution increasing the minimum work hours per week from twenty hours to thirty-two hours for employees to qualify for paid coverage under the State Health Benefits plan. The Association objected to the changes approved in the resolution. On May 16, 1996, the Board amended the resolution to exclude certified, professional, and contractual teaching staff from the thirty-two hour work requirement for benefits.
During that period, the parties were in negotiations for the 1997-2000 contract period. There was no reference to the elimination of health insurance benefits for part-time employees during those negotiations. Similarly, according to the president of the Association, there was no mention of the loss of insurance benefits for part-time employees in the negotiations for the subject Agreement for the 2000-2002 contract.*fn3
In the fall of 2001, Cheryl McCann, a special education teacher, complained to the president of the Association that she worked a minimum of twenty hours per week, but her health insurance was not paid by the Board. Because the negotiations for the next contract period were about to commence in November 2001, the Association decided to raise the issue in those negotiations.
During negotiations, the parties were unable to resolve the issue. As a result, on December 20, 2002, the Association filed a grievance on behalf of part-time professional employees working twenty hours or more who were not currently receiving paid health insurance benefits. The Association sought to have the Board adhere to the past practice of providing full benefits for part-time employees working twenty hours or more. The Association requested that those employees begin receiving benefits immediately, and that employees who had been denied coverage should be reimbursed for out-of-pocket expenses. The grievance ...