On appeal from a Final Decision of The Merit System Board, OAL No. CSV-5695-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing and C.S. Fisher.
Petitioners, all of whom are former employees of the East Orange Water Commission, appeal from a Final Decision of the Merit System Board determining that their layoffs (or in the case of certain employees, demotions in lieu of layoff) in March 2002 were made in good faith, for reasons of economy and efficiency.*fn1 After reviewing the record in light of the contentions advanced on appeal, we affirm.
Appellants were members of the Communications Workers of America ("CWA"), and the terms of their employment were subject to a collective bargaining agreement in effect at the time they were laid off. Article VI of this agreement provided:
It is recognized and agreed that the Board possesses the sole right and responsibility to operate the facilities and departments covered by this Agreement, and that all management rights repose in it, except as same may be expressly qualified by the provisions of this Agreement. These rights include but are not limited to: selection and direction of its employees; to hire, promote, transfer, assign, and discharge, or take other disciplinary action against employees; to relieve employees from duties because of lack of work or for other legitimate reasons; to determine the amount of overtime to be worked; to maintain the efficiency of the government operations entrusted to it; to make reasonable and binding rules which shall not be inconsistent with this Agreement; to determine the methods, mean and personnel by which such operations are to be conducted; to introduce new or improved methods or facilities; and to contract out for goods or services. It is agreed that the Board may take whatever actions may be necessary to carry out the mission of the facility or department in situations of emergency.
This language, however, was modified by paragraph 7 of Article VII.
In the event of layoff of employees, an employee shall be laid off by job classification according to his seniority in such job classification, if all other factors, including satisfactory work and ability, (as determined by the Board) are equal. The Union shall be given notice of proposed layoffs, and opportunity to discuss the layoffs, with the Board or its designee.
It is clear from the record before us that East Orange during the time in question was experiencing severe financial difficulties, and in 1999 its financial affairs came under the supervision of the Local Finance Board pursuant to the Local Government Supervision Act of 1947, N.J.S.A. 52:27BB-1 to -100. The municipality's various attempts to stanch its mounting deficits were not successful, and it submitted several layoff plans to the Department of Personnel for approval. The Department of Personnel approved the Commission's proposed layoff plan in January 2002, and it was implemented in March 2002. Prior to this implementation, the Commission met on several occasions with representatives of the CWA to explain the grim financial outlook. Although the CWA made several alternate recommendations to the Commission, they were not deemed feasible alternatives in light of fiscal constraints.
Petitioners filed appeals with the Merit System Board and the matters were transferred to the Office of Administrative Law, where they were assigned to Administrative Law Judge Reiner. After a period of discovery, the Commission moved for summary decision. Administrative Law Judge Reiner granted the motion, and the Merit System Board agreed and upheld the layoffs.
In their appeal to this court, petitioners make two arguments: that they should have received a plenary hearing on their claim that the layoffs were the product of bad faith on the part of the Commission and that they presented sufficient evidence to defeat the Commission's summary disposition motion. We reject both propositions and affirm.
We note, first, the standard governing our review of this matter. A final decision of an administrative body such as the Merit System Board should not be disturbed on appeal unless it is arbitrary, capricious or unreasonable. Karins v. City of Atlantic City, 152 N.J. 532, 540 (1988). There are four questions to be considered by a reviewing court:
(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that ...