On certification to the Superior Court, Appellate Division, whose opinion is reported at 395 N.J. Super. 644 (2007).
(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 2004, the Borough of Glassboro Police Department (Borough) announced an opening for the position of lieutenant. Three candidates applied, including Sergeants Peter Amico and William Highley. As a non-civil service municipality, the Borough is not subject to the statutory requirements of a "comprehensive promotional procedure." Rather, state law requires only that due consideration be given to the officer proposed for promotion and to the length of and merit of the officer's service, with preference being given to seniority in service.
The Borough implemented a three-stage promotional procedure. The scores from Phase I and II were aggregated for a total possible score of 100%. Phase I consisted of an interview with the Borough Chief of Police and was worth 20%. Phase II involved an oral and written exam and was worth 80%. Phase IIA, the written portion was a multiple-choice test designed by the International Association of Chiefs of Police. Phase IIB, the oral component, consisted of interviews with a panel of four independent police chiefs. Following Phases I and II, the "Cumulative Final Scores" were as follows: Sergeant Amico, 93.8, and Sergeant Highley, 92.4.
In Phase III, each applicant was interviewed by the Borough Public Safety Committee, which included Borough Council members, the Borough Administrator, and the Chief of Police. Candidates were advised that they would be asked questions "concerning their department's SOPs Rules and Regulations, in addition to questions concerning the Boro Personnel Policy & Procedures and Boro Ordinances." The purpose of Phase III was to test leadership intangibles that are necessary for the position and evade formal testing. After the completion of Phase III, Highley -- who was ranked second in the Phase I and II testing -- was awarded the promotion.
Amico learned in subsequent conversations with the Chief of Police and the Borough Administrator that his move out of the Borough had a possible negative effect on the promotional decision. The Fraternal Order of Police, Local 108 (FOP) filed a grievance on Amico's behalf, claiming that the use of Phase III as more than a "confirmatory interview" altered the terms and conditions of employment in violations of Article XXIX of the collective bargaining agreement between the Borough and the FOP, and that the Borough violated N.J.S.A. 40A:14-122.6 by making residency a factor in its promotional decision.
The matter was submitted to arbitration after the parties were unable to resolve the grievance. The arbitrator concluded that Amico was improperly deprived of the promotion contrary to statute and that he should be promoted with full back pay. In making his ruling, the arbitrator noted that Amico, whose education and seniority were greater than Highley's, was 1.4 points ahead of Highley after Phases I and II of the Borough's promotional testing, but then fell behind following the Phase III interview. The arbitrator pointed out that there was nothing in the record to positively determine what elements in that interview caused Amico to fall behind Highley. The arbitrator surmised from the testimony that Amico had recently moved away from the Borough and that in a non-civil service municipality can only use residency in a tiebreaker on the promotional test, which was not the case here.
The Borough filed a complaint in the Superior Court, Law Division, and the arbitrator's award was stayed pending the outcome of the case. In its complaint, the Borough alleged that it had placed substantial evidence in the record noting what occurred during the Phase III interview and that the arbitrator disregarded the testimony of the Borough Administrator, the Police Chief, and all the Phase III documentation referenced by the Chief during the arbitration. Annexed to its complaint were two pages of questions asked of each candidate in Phase III, as well as the Chief's corresponding notes concerning each candidate's answers. The Borough admitted before the trial judge that there was no recording of the candidates' specific answers by the questioners in Phase III. Moreover, the Borough attorney conceded that the judge could not tell from the three pieces of paper constituting the record how Highley did a better job in his answers than Amico.
The trial judge denied the Borough's motion to vacate the arbitrator's award or to hold a plenary hearing, noting that so long as the arbitrator's "determination is reasonably debatable," it is not to be disturbed. Although the judge did not agree with the arbitrator as to whether residency is a factor that can be utilized, he concluded that the arbitrator could not have reached a different decision than the one reached since the Borough did not properly explain how Highley passed Amico after the first two phases. Accordingly, the judge affirmed the arbitrator's award, but granted the Borough's motion for a stay pending appeal. The Borough's motion for reconsideration was denied.
The Appellate Division affirmed on appeal, essentially because it agreed with the arbitrator and the trial judge that the record was bare regarding the Borough's reasoning for elevating Highley over Amico, thereby rendering the promotion of Highley arbitrary and capricious.
The Supreme Court granted certification.
HELD: The Court's careful review of the record in light of the standards governing judicial review of public employment arbitration awards leads to the conclusion that the arbitrator properly determined that the record did not adequately support the elevation of Highley over Amico. Nonetheless, it was beyond the arbitrator's power to fashion a remedy that promoted Amico.
1. An arbitrator must uphold a non-civil service municipality's promotion decision unless the decision is clearly arbitrary, capricious, and unreasonable. Judicial review of an arbitrator's award is very limited and the arbitrator's decision should not be set aside easily. In the context of public employment, an arbitrator's determinations in binding arbitrations are subject to specific statutory criteria, as well as the public interest and welfare. The New Jersey Arbitration Act permits courts to vacate an arbitration award in only limited defined circumstances. In addition, a court may vacate an arbitration award that is contrary to existing law or public policy as embodied in legislative enactments, administrative regulations, or legal precedents. (Pp. 9-11)
2. After a careful review of the record in light of those standards, the Court agrees that the arbitrator's decision should stand. The arbitrator's conclusion that the record shows no reasoning by the Borough for elevating Highley over Amico is unassailable. Nor does this case implicate public policy or the highly deferential standard of review. This case stands for the unremarkable proposition that, should a grievant make the type of showing that Amico made here, and should the municipality not provide even the simplest explanation on the record for some kind of rational reason for its decision, the decision cannot stand. (Pp. 11-12)
3. The Legislature through statute clearly established residence as a tie-breaker in non-civil service municipalities. However, there was no tie after the first two phases here. (Pp, 12-13)
4. If the record was inadequate regarding how Highley passed Amico during Phase III, it was equally deficient in respect of Amico's leadership skills and how, upon testing, he lost his lead. Thus, it was beyond the arbitrator's power to fashion a remedy that promoted Amico, and the affirmance of that award must be reversed. The matter is remanded to the Borough to conduct a new Phase III proceeding, unless the parties can amicably resolve the case among themselves. (Pp. 13-14)
Judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART and REMANDED for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, RIVERA-SOTO, and HOENS join in JUSTICE LONG'S opinion. ...