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Flagg v. City of Newark

July 15, 2008


On appeal from a Final Administrative Decision of the Merit System Board, DOP Docket No. 1997-3428.

Per curiam.


Argued: October 24, 2007

Before Judges Cuff, Lihotz and Simonelli.

Appellant James Flagg worked for the City of Newark as a truck driver. He worked at night and held a job with a private employer during the day. Appellant's City job, the night position, was his primary job as it provided his health and pension benefits. Flagg lost his public employment in 1996, when convicted of a criminal offense for on-the-job actions, but was reinstated in 2002. The issue in this appeal is limited to Flagg's claim for back pay.

During the last twelve years, this matter has been the subject of two reported opinions.*fn1 We review a final order of the Merit System Board (Board) that modified the sanction from removal to a six-month suspension but denied back pay. We affirm in part, reverse in part, and remand for calculation of a back pay award and consideration of appellant's application for attorneys' fees.

The facts and procedural history preceding this appeal are described by the Supreme Court in its 2002 opinion. Flagg, supra, 171 N.J. at 566-68. The Supreme Court held that good cause existed to allow waiver of the statutory forfeiture provision, that the county prosecutor abused his discretion by not seeking a waiver of the forfeiture provision, and that termination of Flagg's public employment was not warranted by the facts. Id. at 577, 580. Flagg was reinstated to his position by the City of Newark. The issue of what, if any, back pay should be awarded to him was transmitted to the Office of Administrative Law as a contested case.

On January 11, 2005, an administrative law judge (ALJ) issued an initial decision in which he concluded that Flagg should be suspended for six months and receive back pay from March 6, 1997 to May 13, 1998. The ALJ found that Flagg had attempted to find substitute employment but none was available.

The Board accepted the initial decision concerning the duration of the suspension but ordered that Flagg was not entitled to any back pay pursuant to N.J.A.C. 4A:2-2.10. In reaching this result, the Board held that Flagg was entitled to back pay for the period following his six month suspension. It found, however, that the City established that suitable employment existed in the local economy and that Flagg failed to demonstrate that he engaged in a diligent search for substitute employment following his suspension on March 7, 1997, and until December 31, 2000. This finding is based on the Board's assessment of the evidence presented by the City and Flagg, particularly the testimony of Flagg's daughter.

The Board then held that Flagg could receive mitigated back pay from January 1, 2001 to May 6, 2002. However, the Board held that Flagg mitigated his losses when he left the day job that he held at the time of his termination and obtained other employment at a higher rate of pay, and he was not entitled to any back pay as a result. The Board explained its ruling as follows:

The record reveals that Flagg had a second full-time job with John Palitto while he was employed by Newark. Therefore, pursuant to N.J.A.C. 4A:2-2.10(d)3 the earnings from his position with Palitto are not deductible from his gross base pay award. However, the record reveals that the appellant did not stay in that position. Rather, the record reveals that in 1996 he earned $22,458 with Palitto; in 1997 he earned $25,912 with Great Northern Recycling (Great Northern); in 1998 he earned $28,360 with Great Northern; in 1999 he earned $31,334 with Great Northern; in 2000 he earned $30,262 with Great Northern and $1,771 with Manella & USA Sanitation, Inc. (Manella); in 2001 he earned $36,939.75 with Manella and $3,300 with F. Basso, Jr., Rubbish Removal Inc. (Basso); and in 2002 he earned $26,080 with Basso. The 2002 per diem rate for his employment with Basso was $99.92 for a total of $8,892.88 for the time period of January 1, 2002 to May 6, 2002 . . . . It is noted that Flagg testified that Great Northern had taken over Palitto. Moreover, the W-2 statements provided by Flagg reveal that Palitto and Great Northern had the same address. Consequently for purposes of back pay, his employment with Palitto and Great Northern will be considered a single employment, which means it cannot be considered mitigation since this position was Flagg's "second job." However, Flagg testified that he had left Great Northern for a better paying position with Manella. Therefore, the [Board] finds that once the appellant left Great Northern for a better paying position with Manella, N.J.A.C. 4A:2-2.10(d)3 is no longer controlling since Flagg no longer held the same employment as when he was removed by Newark. Once Flagg left his "second job," he, in essence, had no job and any job he secured thereafter would (1) show evidence of a job search; and (2) count as mitigation towards any amount of back pay owed. Therefore, any earnings from Manella and Basso are to be considered for mitigation purposes. To find otherwise would unjustifiably reward an employee who could continually switch positions, but maintain a "second job" that could not be used for mitigation purposes.

The net result of this analysis and application of the mitigation rule was a finding that Flagg was entitled to no back pay.

On appeal, Flagg does not contest the length of the suspension. He contests the decision that he is not eligible for any back pay. He argues that the Board misapplied the governing standard and that he is entitled to at least the difference between his lost earnings from his municipal employment and any earnings from a lesser job.

This appeal requires us to determine not only whether the Board applied the appropriate legal principles but also the applicability of the regulation that governs the receipt of back pay when the disciplined employee maintained two jobs, one in the public sector and one in the private sector, at ...

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