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New Jersey Transit Corp. v. New Jersey Transit Police Superior Officers Fraternal Order of Police Lodge #37

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 25, 2007

NEW JERSEY TRANSIT CORPORATION, PLAINTIFF-RESPONDENT,
v.
NEW JERSEY TRANSIT POLICE SUPERIOR OFFICERS FRATERNAL ORDER OF POLICE LODGE #37, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. C-197-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: May 23, 2007

Before Judges Cuff, Fuentes and Baxter.

Defendant New Jersey Transit Police Superior Officers Fraternal Order of Police Lodge #37 (Lodge #37) appeals from an order permanently restraining arbitration of the discipline imposed on Sergeant Alan West and granting summary judgment in favor of plaintiff New Jersey Transit Corporation (NJ Transit). It also appeals from an order denying its motion to extend discovery. We affirm.

On February 3, 2003, the New Jersey Transit Police Department (NJTPD) filed two disciplinary charges against Sergeant West for violation of sections 7.8 and 7.12 of its rules and regulations. West was charged with discourtesy and unsatisfactory performance. He pled not guilty and requested an internal NJTPD disciplinary hearing on the charges. The hearing commenced on July 9, 2003. The hearing reconvened on October 6 and continued on October 20 and 23, 2003. A hearing officer presided at the hearing, and West, who was represented by counsel throughout the proceeding, had the opportunity to cross-examine witnesses and produce witnesses on his behalf. Following transcription of the hearing record, the hearing officer sustained the charge of unsatisfactory performance but dismissed the discourtesy charge. The hearing officer did not recommend a sanction. On February 25, 2004, the Chief of the NJTPD imposed a five working day suspension without pay but postponed three of those suspended days if West remained charge free for a year.

On March 29, 2004, defendant Lodge #37 filed a grievance and request for arbitration on behalf of West. When an arbitrator was appointed on May 28, 2004, NJ Transit filed a Verified Complaint and an Order to Show Cause in the Chancery Division of the Superior Court of New Jersey on June 15, 2005.

In its complaint, NJ Transit sought to bar arbitration because arbitration was reserved to disputes between the parties regarding the interpretation or application of the terms of the collective negotiation agreement (CNA) between NJ Transit and Lodge #37. NJ Transit further alleged that appeals from disciplinary proceedings must proceed in the Superior Court pursuant to the terms of Article XLII of the CNA.

On August 8, 2005, Judge Harriet Klein issued an order preliminarily restraining the arbitration. A September 23, 2005 case management order allowed for a period of discovery. NJ Transit moved for summary judgment on February 23, 2006, and Lodge #37 filed a cross-motion to extend discovery.

In an oral opinion, Judge Klein denied Lodge #37's motion for an extension of discovery because further discovery was unwarranted and "wholly irrelevant" to the issue before the court. She held that Article XLII of the CNA expressly provides that review of a conviction on any disciplinary charge following a hearing is in the Superior Court. She rejected the proffered evidence of past practices because none of the cases cited by Lodge #37 involved a full internal hearing and adjudication on disciplinary charges. Rather, in each instance the charged employee immediately filed a grievance. The judge also noted that the disciplinary procedure outlined in Article XLII mirrored the procedure for non-civil service police officers provided by N.J.S.A. 40A:14-150. In conclusion, the judge remarked that "[t]he violation which is at issue in this case arises out of [NJTPD]'s rules and regulations, specifically Rule 7.12, namely [u]nsatisfactory performance. The complaint was not an alleged violation dealing with terms of the CNA and, therefore, just looking at the language of that section itself, it appears to be inapplicable to this situation."

On appeal, Lodge #37 argues that material issues of fact existed pertinent to the interpretation of the CNA that precluded disposition of this case by summary judgment. It also contends that the interpretation of the CNA is erroneous as a matter of law, that discovery should have been extended, and that the judge should have allowed it to amend its answer to provide that the parties had arbitrated minor disciplinary charges in the past. NJ Transit responds that the matter is strictly one of interpretation of the CNA and that the interpretation rendered by the judge is correct as a matter of law.

Plaintiff NJ Transit is a State agency created pursuant to N.J.S.A. 27:25-1 to -34. The NJTPD is a division of NJ Transit that has " police and security responsibilities over all locations and services owned, operated, or managed by [plaintiff] and its subsidiaries." N.J.S.A. 27:25-15.1.a. Defendant Lodge #37 is the exclusive representative for all superior officers below the rank of captain, including sergeants and lieutenants of NJ Transit. N.J.S.A. 34:13A-3(e); N.J.S.A. 34:13A-5.3.

On July 1, 2001, NJ Transit and Lodge #37 entered into a CNA, effective from July 1, 2001 to June 30, 2006. Two articles in the CNA specifically address disciplinary appeals: Article XIX, entitled "Grievance Procedure" and Article XLII, entitled "Discipline."

Section A of Article XIX, entitled "Grievance Procedure" provides: "[Superior officers] shall not be disciplined or dismissed from service without just cause." Section B of Article XIX establishes four mechanisms, including arbitration, for resolving "[a]ny disagreement, dispute or grievance (including discipline) which shall arise between the parties with respect to the interpretation or application of the terms of this Agreement[.]"

Article XLII, entitled "Discipline", applies solely to disciplinary disputes involving transit police officers. Section 1 establishes the grounds for imposing disciplinary action and provides:

SECTION 1: Except as otherwise provided by law, a transit police officer shall not be removed from employment or position for political reasons or for any cause other than incapacity, misconduct, or disobedience of rules and regulations established by the [NJTPD], nor shall such officer be suspended, removed, fined or reduced in rank from or in employment or position therein, except for just cause as hereinbefore provided.

Section 2 of Article XLII identifies the procedure for disciplining transit police officers. It states, in pertinent part:

SECTION 2: (a) A transit police officer shall not be removed from employment or position, or suspended, fined or reduced in rank for a violation of the internal rules and regulations established for the conduct of the [NJTPD] unless a complaint charging a violation of those rules and regulations is filed no later than the 45th day after the date on which the person filing the complaint obtained sufficient information to file the matter upon which the complaint is based.

Section 3 sets forth the procedural rights and limitations that apply when a transit police officer is charged with a disciplinary violation. For example, Section 3(b) provides that transit police officers who are charged "have the right to be represented by Counsel at no cost to NJ T[ransit]." Section 3(c) states: "Such transit police officer may waive the right to a hearing and may appeal the disposition (hearing may be held in absentia) directly to any available authority specified by law or regulation, or follow any other procedure recognized by a contract, as permitted by law."

Section 4 provides" "A transit police officer who has been tried and convicted upon any disciplinary charge or charges may obtain a review thereof by the Superior Court."

The issue before this court is whether utilization of the Article XLII for disciplinary procedure precludes the union from invoking the Article XIX grievance procedure. Resolution of this issue requires interpretation of the CNA.

In a public sector setting, "[t]he duty to arbitrate springs from contract, and the parties can only be compelled to arbitrate those matters which are within the scope of the arbitration clause of their contract." Camden Bd. of Educ. v. Alexander, 181 N.J. 187, 204 (2004) (citing Moreira Constr. Co. v. Twp. of Wayne, 98 N.J. Super. 570, 576 (App. Div.), certif. denied, 51 N.J. 467 (1968)). It is also well settled that:

When there is a dispute as to whether a grievance falls within the terms of the arbitration clause of the contract, it is the duty of the courts to determine whether the matter is arbitrable. However, in determining whether a matter is arbitrable, the court is limited to ascertaining whether the party seeking arbitration is making a claim which, on its face, is covered by the contract and within the arbitration clause.

The court may not, in any way, pass upon the merits of the actual dispute. [Id. at 205 (internal citation omitted).]

In Moreira, supra, 98 N.J. Super. at 576, this court noted that public policy favors arbitration and that contracts should be interpreted "liberally to find arbitrability if reasonably possible," but cautions that the parties who choose "not to submit to arbitration 'have a right to stand upon the precise terms of their contract.'" Ibid. (quoting Goerke Kirch Co. v. Goerke Kirch Holding Co., 118 N.J. Eq. 1, 4 (E. & A. 1935). We further stated that the courts do not have a right to rewrite the contract merely because one might conclude that it might well have been functionally desirable to draft it differently to broaden the scope of arbitration in view of the nature of the subject matter of the contract, or indeed to make every dispute of any nature between the parties arising thereunder the subject of arbitration. [Ibid.]

In New Jersey, "'where the terms of a contract are clear and unambiguous there is no room for interpretation or construction and the courts must enforce those terms as written.'" City of Orange Twp. v. Empire Mortgage Servs., Inc., 341 N.J. Super. 216, 224 (App. Div. 2001) (quoting Karl's Sales & Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991)); William. J. Burns Int'l Detective Agency v. N.J. Guards Union, Inc., 64 N.J. Super. 301, 307 (App. Div. 1960), certif. denied, 34 N.J. 464 (1961). However, "[w]here a contract is ambiguous, courts will consider the parties' practical construction of the contract as evidence of their intention and as controlling weight in determining a contract's interpretation." County of Morris v. Fauver, 153 N.J. 80, 103 (1998). "Whether a term is clear or ambiguous is . . . a question of law." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997).

Here, Judge Klein found that Articles XIX and XLII were clear and unambiguous. Judge Klein then found Lodge #37's interpretation of the Article XIX grievance procedure unconvincing for two reasons. First, Article XIX refers to a dispute arising from the interpretation or application of the terms of the CNA. However, the disciplinary violation in Sergeant West's case was based upon NJTPD's rules and regulations, involving an unsatisfactory performance charge, not "an alleged violation dealing with the terms of the CNA[.]"

Consequently, the judge concluded that Article XIX "appears to be inapplicable to [West's] situation."

Second, the judge also noted that when two clauses in a contract conflict, the more specific provision controls over the more general one. See Burley v. Prudential Ins. Co. of Am. 251 N.J. Super. 493, 500 (App. Div. 1991) (holding "[w]here two clauses in a contract clearly conflict, the more specific provision . . . usually controls over the more general"). The judge explained that "Article 42 dealing specifically with discipline is much more tailored to the particular issue before this Court [than Article XIX] and should govern the situation."

We agree that the terms of the CNA are clear and unambiguous. In order, however, to give all the terms of the CNA effect, we hold that a superior officer may elect to contest a disciplinary charge pursuant to Article XIX or Article XLII procedure but not both.

Article XLII of the CNA establishes the grounds for imposing disciplinary action. Section 2 of Article XLII identifies the procedure for disciplining transit police officers. Section 3(c) allows a transit police officer to waive the Article XLII hearing and resort to any other available authority or procedure recognized by the contract or permitted by law. Presumably, this includes the Article XIX grievance procedure. However, if the transit officer elects to proceed with a hearing pursuant to Article XLII, Section 3(c) of Article XLII provides that "[s]uch transit police officer may waive the right to a hearing and may appeal the disposition (hearing may be held in absentia) directly to any available authority specified by law or regulation, or follow any other procedure recognized by a contract, as permitted by law." Section 3(c) applies to Sergeant West's case because he is a transit police officer who exercised his right to an internal disciplinary hearing.

The CNA clearly provides two paths to seek review of disciplinary charges. These paths are not sequential. Rather, a transit officer may waive the Article XLII hearing procedure and invoke the Article XIX grievance procedure. The transit officer cannot pursue both remedies to challenge discipline imposed by NJ Transit. To be sure, arbitration of disputes, particularly in the employment context, is encouraged. N.J. Tpk. Auth. v. Local 196, I.F.P.T.E., 190 N.J. 283, 291 (2007). Here, however, the plain language of the CNA gives transit officers a choice of remedy. The CNA, however, does not authorize serial remedies.

Here, having chosen to contest the disciplinary charges pursuant to Article XLII, any further review of the discipline imposed on him was in the Superior Court as prescribed by that Article. Consequently, we affirm the April 7, 2006 order granting summary judgment in favor of NJ Transit.

Affirmed.

20070725

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