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State, Dep't of Corrections v. P.B.A. Local 105

May 15, 2008


On appeal from a Final Administrative Decision of the Public Employment Relations Commission, Docket No. SN-2007-041.

Per curiam.


Submitted February 27, 2008

Before Judges Wefing, Parker and R. B. Coleman.

In this appeal, respondent P.B.A. Local 105 (PBA) appeals from a final decision of the Public Employment Relations Commission (PERC) rendered on April 26, 2007. The PERC decision granted the application by the State of New Jersey Department of Corrections (State) for an order restraining binding arbitration of the PBA's grievance arising out of the July 2006 shutdown of all non-essential State functions as a result of the budget impasse between Governor Jon Corzine and the Legislature.*fn1

The collective bargaining agreement between the PBA and the State provides for binding arbitration of grievances. In July 2006, the shutdown of non-essential State services led to furloughs of State employees who were considered "non-essential." The furlough ended on July 8, 2006, when the Fiscal Year 2007 Appropriations Act (Act) was signed. That Act gave the Treasury Department discretion over whether to compensate furloughed employees. On July 10, 2006, both furloughed and nonfurloughed workers were notified that they would receive full compensation for the shutdown period.

In July 2006, the PBA wrote to the Director of the Governor's Office of Employee Relations requesting compensatory time off for the essential employees who worked during the "special emergency" declared by the Governor. On July 13, 2006, the Director declined the request, stating that [c]ompensation for essential employees called in to work by the State during "emergency conditions" is governed by N.J.A.C. 4A:6-2.5(d), which provides, in its entirety, as follows:

"An essential attendance employee who is required to work in accordance with an Essential Employee Attendance Plan shall be compensated at the regular rate of pay for such work. See N.J.A.C. 4A:3-5 for overtime compensation for work performed by non-exempt employees in excess of the regular work week." [Emphasis added].

The Director further pointed out that the collective bargaining agreement -- under which the PBA claimed compensatory time -- did not provide for overtime pay for work "when the Governor declares an emergency resulting in time off to State workers." The Director explained, "[t]his is why, as a long standing past practice, members of the PBA Local 105 bargaining unit get a compensatory day for working the day after Thanksgiving (when declared a holiday by Executive Order) but do not receive a compensatory day for coming in during a snow emergency."

On August 7, 2006, the PBA demanded arbitration of the grievance. The State then petitioned PERC to restrain binding arbitration and determine the scope of negotiations.

In rendering its decision, PERC specifically noted, "we do not consider the merits of the grievance or any contractual defenses the employer may have." Rather, PERC determined that binding arbitration must be restrained and that, pursuant to N.J.A.C. 4A:6-2.5(d), the scope of negotiations limited essential employees who work during a State emergency to compensation at regular rates. PERC also determined that "the regulation was intended to preempt all negotiations over compensation" under emergency circumstances. PERC noted that "[e]ven if the PBA's contractual interpretation is correct and Article XIX(B)'s provision for alternate time off could be read to apply to this type of emergency . . . its application is preempted because the regulation specifically requires that essential workers be compensated at their regular rate of pay during emergencies." Accordingly, PERC concluded that "arbitration seeking compensatory time off cannot be permitted."

The PBA appealed and argues that (1) PERC's conclusion is not entitled to deference; and (2) PERC erred in enjoining binding arbitration for compensatory time because, under the PBA contract, the grievance is mandatorily negotiable.

Our scope of review in an appeal from an administrative agency decision is narrowly defined. In re Camden County Prosecutor, 394 N.J. Super. 15, 22 (App. Div. 2007). We "will not upset a State agency's determination in the absence of a showing that it was arbitrary, capricious or unreasonable . . . or that it violated a legislative policy expressed or implicit in the governing statute." County of Gloucester v. Pub. Employment Relations Comm'n, 107 N.J. Super. 150, 156 (App. Div. 1969), aff'd, 55 N.J. 333 (1970).

While "due regard [is] given to the agency's expertise on the subject . . . we are not bound by the agency's interpretation of the statute or its determination of a strictly legal issue." In re Application of Meadowlands Commc'ns Sys., Inc., 175 N.J. Super. 53, 65 (App. Div.), certif. denied, 85 N.J. 455 (1980). "Although an agency's 'interpretation of the statute it is charged with administering . . . is entitled to great weight', we will not yield to PERC if its interpretation is 'plainly unreasonable, contrary to the language of the Act, or subversive of the Legislature's intent.'" Camden County Prosecutor, supra, 394 N.J. Super. at 23 (quoting Bent v. ...

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