July 15, 2009
THOMAS MORRIS, PETITIONER-RESPONDENT,
STATE-OPERATED SCHOOL DISTRICT OF THE CITY OF NEWARK, ESSEX COUNTY, RESPONDENT-APPELLANT.
On appeal from a Final Decision of the Commissioner of Education, Agency Docket No. 135-5/07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 5, 2009
Before Judges Parker and Yannotti.
The State Operated School District of the City of Newark (District) appeals from a final decision of the Commissioner of Education (Commissioner) rendered on September 4, 2008 adopting an administrative law judge's (ALJ) initial decision ordering that petitioner's salary be recalculated for the 2006-07 and 2007-08 school years in accordance with the method outlined in the Commissioner's decision.
Petitioner Thomas Morris has been employed as a teacher in the District since February 1995 and is tenured. His salary increment was withheld for the 2004-05 school year because of poor performance. This appeal focuses on the calculation of his salary subsequent to the 2004-05 school year.
The District salary guide is based on the employee's number of years of service in a given school year. The chart below illustrates the salary guide:
Petitioner was on the eleventh step in 2004-05, representing his eleventh year teaching in the District. His performance for that year was deficient and his pay increment was withheld for the following school year, 2005-06, pursuant to N.J.S.A. 18A:29-14. Consequently, petitioner remained on step eleven of the salary guide, earning $55,448, rather than $58,387 he would have been entitled to receive but for the increment withheld because of his poor performance in 2004-05. The amount of the withheld increment was $2,939.
Petitioner contends that he was entitled to be placed on step thirteen for the 2006-07 school year because it was his thirteenth year in the District and his salary should be calculated at $79,900 minus the $2,939 increment withheld for the 2004-05 deficient performance. According to petitioner, his 2006-07 salary should be $76,961.
The District, however, maintains that petitioner's salary for the 2006-07 school year should remain at step twelve, resulting in a salary of $59,900. Thus, he would remain a step behind his colleagues with the same number of years experience.
In May 2007, petitioner filed his verified petition with the Commissioner, appealing the District's calculation of his 2006-07 salary. Because there were no disputed facts, the parties cross-moved for a summary decision and both relied on Probst v. Bd. of Educ. of the Borough of Haddonfield, 127 N.J. 518 (1992), in support of their respective positions. The ALJ rendered a written decision on June 23, 2008, in which it determined that the District erred in calculating petitioner's 2006-07 salary. The ALJ concluded that Probst does not require that a teacher whose increment is withheld for one year remain a full step behind on the salary guide until the District determines that he can resume the step consistent with his number of years teaching.
The District appealed and the Commissioner adopted the ALJ's interpretation of Probst along with his conclusion and recommendation. Accordingly, the Commissioner calculated petitioner's salary as follows:
Application of the Probst holding to the present case results in the following calculations. First, going into the 2006-2007 school year, the district salary guide shows an increase of $21,513 for district employees with petitioner's years of service. Adding this increment to the salary petitioner actually made in 2005-2006 (i.e., $55,448), as opposed to the salary guide figure for 12-year employees in 2005-2006 ($58,387) results in wages of $76,961 for petitioner's 2006-2007 school year. That is clearly less than the $79,000 that petitioner would have made in the 2006-2007, had no increments been withheld from him.
In this appeal, the District argues (1) the Commissioner's opinion disregards the holding in Probst that teachers who incur a withholding of increment "will always lag one step behind." 127 N.J. at 595; and (2) the Commissioner's decision improperly removes the District's statutory discretion to determine compensation subsequent to withholding an increment.
In Probst, the petitioner was paid $25,000 in 1986-87. 127 N.J. at 522. The Haddonfield Board of Education (Board) voted to withhold her increments for 1987-88 and continued her salary at $25,000 for that school year. Ibid. Her performance during the 1987-88 school year was satisfactory and the Board determined that her salary for the 1988-89 school year was $27,100. Ibid. "That amount represented a $2,100 increase from her previous salary." Ibid. The petitioner did not challenge the initial withholding by the Board. She did, however, contest the $27,100 salary for the 1988-89 school year, arguing that N.J.S.A. 18A:29-4.1 "requires that all teachers who perform adequately must be paid an amount that appears on the school's salary schedule." Id. at 523. Accordingly, she claimed that because $27,100 did not appear on the salary schedule for 1988-89, her salary should be $28,400, one step behind the salary for teachers with an equivalent level of service. Ibid.
The State Board of Education agreed with the Board and was affirmed by the Supreme Court, which concluded
[T]hat no statute mandates that local boards return teachers to an adopted salary schedule following a withholding. Local boards, however, do have the discretion to do so on finding that restoration to a place on the schedule is warranted for a particular teacher. That discretion should be exercised when a teacher has recovered from the previously-recognized shortcoming and recaptured lost ground by steadily improving performance. The possibility of being returned to the schedule thus serves as an incentive to maintain improvements.
However, until such time as the local board determines that a teacher merits return to the salary schedule, a satisfactorily-performing teacher is entitled only to a yearly increase in salary. That increase should equal the annual salary progression reflected for that year in the schedule in place at the teacher's district. Thus, a teacher in these circumstances would receive an increase equal to the combined amount of the employment and adjustment increments contained in the appropriate salary guide.
Because the local board in this case increased Probst's 1987-88 salary by $2,100, the amount of the combined annual increase reflected in the Haddonfield guide, she was properly compensated. [Id. at 528.]
In Probst, there were two separate increments, one for years in service, moving the teacher one step vertically on the salary guide, and the other moving horizontally to reflect an adjustment increment secured through collective bargaining to off-set the estimated increase in the cost of living for each school year. Id. at 521. The Court found that a teacher is only entitled to the years in service increment "after the successful completion of each year of employment," although the cost of living increment could be awarded in years subsequent to the withheld increment year. Ibid. (emphasis added).
Here, we are dealing with only one increment, reflecting both a vertical step on the salary guide for years in service and a horizontal step for the school year. In our view, the Commissioner misinterpreted Probst and overlooked critical language, stating that "a satisfactorily-performing teacher is entitled only to a yearly increase in salary. That increase should equal the annual salary progression reflected for that year in the schedule in place at the teacher's district." Id. at 528. That would leave petitioner at step twelve of the 2006-07 guide: $59,900. If we were to accept the Commissioner's calculation, petitioner would advance one step vertically and one step horizontally with a deduction of $2,993, representing the increment withheld for the 2004-05 deficient year. That is not consistent with our view of Probst.
Moreover, we agree with the District's argument that the Commissioner's decision improperly removes the District's statutory discretion to determine compensation subsequent to the withholding of an increment. N.J.S.A. 18A:29-4.1 permits a board to adopt salary schedules for teachers within its district. N.J.S.A. 18A:29-14 allows the board to withhold salary increments for unsatisfactory performance.
In Probst, the Court recognized that the two provisions should be construed together, noting that "promoting quality education is not furthered by diluting the strength of Section 14 through application of Section 4.1." 127 N.J. at 525. The Court specifically rejected our conclusion that a teacher must be returned to the salary schedule following an increment withholding for an unsatisfactory year. Id. at 528. The Court cautioned that such a result would eliminate "a significant portion of the local board's discretionary power under Section 14." Ibid. It would also remove the incentive for a teacher to maintain satisfactory performance in subsequent years. Ibid.
We are aware that our review of an administrative decision is limited. Shim v. Rutgers, 191 N.J. 374, 384 (2007) (citing In re Taylor, 158 N.J. 644, 656 (1999)). We will reverse an agency's decision only where "(1) it was arbitrary, capricious or unreasonable; (2) it violates express or implied legislative policies; (3) it offended the State or Federal Constitution; or (4) the findings on which it was based were not supported by substantial credible evidence in the record." Id. at 384 (citing Taylor, supra, 158 N.J. at 656). We are not bound by an agency's interpretation of a statute or a "strictly legal issue," however. Taylor, supra, 158 N.J. at 658. Here, the Commissioner erred in her interpretation of Probst and N.J.S.A. 18A:29-14 by failing to recognize the discretionary power accorded to the District in establishing a teacher's salary following an increment withholding. Accordingly, we reverse the Commissioner's decision and reinstate the District's.
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