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Manalapan-Englishtown Regional Board of Education v. Manalapan-Englishtown Education Association

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 28, 2009

MANALAPAN-ENGLISHTOWN REGIONAL BOARD OF EDUCATION, PETITIONER-APPELLANT,
v.
MANALAPAN-ENGLISHTOWN EDUCATION ASSOCIATION, RESPONDENT-RESPONDENT.
BOARD OF EDUCATION OF THE MANALAPAN-ENGLISHTOWN REGIONAL SCHOOL DISTRICT, PLAINTIFF-APPELLANT,
v.
MANALAPAN-ENGLISHTOWN EDUCATION ASSOCIATION, DEFENDANT-RESPONDENT.

A-3515-06T1: On appeal from the Public Employment Relations Commission, Docket No. SN-2007-016. A-3138-07T1: On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4867-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 16, 2009

Before Judges Sabatino and Simonelli.

In these back-to-back appeals, petitioner Board of Education of the Manalapan-Englishtown Regional School District (Board) appeals from the denial by the Public Employment Relations Commission (PERC) of its request to restrain binding arbitration of a grievance filed by respondent ManalapanEnglishtown Education Association (Association) on behalf of a reinstated teacher, Charlotte Klumb (Klumb), who returned to work following an ordinary disability retirement. The Board contests Klumb's placement on the master's degree salary guide. The Board also appeals from the February 19, 2008 Law Division order denying its application to vacate the arbitration award and confirming the award. We affirm.

We summarize the facts relevant to our review from the record and from our Supreme Court's opinion in the related litigation in Klumb v. Board of Educ., 199 N.J. 14 (2009). Klumb was a elementary school teacher in the school district from 1968 to 1986. From October 1985 to June 1987, she had several approved leaves of absence in order to obtain treatment for alcoholism and mental health issues. Id. at 20.

On February 4, 1988, the Board filed tenure charges against Klumb for "incapacity, excessive absenteeism and insubordination." In April 1988, Klumb applied for and was granted an ordinary disability pension by the Teachers Pension and Annuity Fund ("TPAF"). The Board then amended Klumb's status to "voluntary sick leave disability" and abandoned the tenure charges. Ibid.

In May 1994, Klumb requested reinstatement. The TPAF denied the request. In 1998, the TPAF reconsidered its decision after concluding that Klumb's disability had "disappeared or substantially diminished to the point that she [could] resume her former teaching duties without restriction." The TPAF ordered that Board to reinstate Klumb. The Board objected and requested a hearing before the Office of Administrative Law. Notwithstanding such request, the Board subsequently interviewed Klumb but did not hire her. Id. at 20-21.

On April 29, 2002, Klumb filed a complaint in the Law Division, seeking reinstatement. By order, entered April 29, 2003, Judge Gilroy transferred the matter to the Commissioner of Education (Commissioner) "pursuant to Rule 1:13-4 for a determination of the issues in dispute." A hearing was subsequently held before an Administrative Law Judge (ALJ), who decided in the Board's favor. On June 16, 2005, the Commissioner rendered a decision rejecting the ALJ's decision and ordering Klumb reinstated to her tenured teaching position as of March 1, 1999, "with all emoluments and back pay to which she is entitled[.]" Klumb, supra, 199 N.J. at 21. The Commissioner did not determine the amount of back pay to which Klumb was entitled, nor did he address Klumb's salary or her placement on the teacher's salary guide.

The Board appealed the Commissioner's decision to the State Board of Education (State Board). In the interim, the Board rehired Klumb for the 2005-2006 school year as a seventh-grade study skills language arts teacher. The Board placed Klumb on step 6 of the master's degree salary guide at a salary of $46,800, which is the salary level she would have attained on March 1, 1999, with no credit for her prior teaching experience with the Board.

Klumb has a masters degree in education, she is certified to teach kindergarten through eighth grade, and she is certified as an elementary supervisor and principal. Prior to her disability retirement, she had reached the top step (step 16) of the master's degree salary guide. She maintained that she was entitled to placement on the top step of the master's degree salary guide, with a salary of $79,365, based on her eighteen years of teaching experience with the Board and on the seven years between 1999 and 2005, when the Board failed to hire her.

On January 4, 2006, the State Board affirmed the Commissioner's decision to reinstate Klumb with back pay. On February 17, 2006, the Board filed an appeal with the Appellate Division.

On April 27, 2006, Klumb filed a supplement to her Law Division complaint, seeking back pay from March 1, 1999 to the date of her rehire, and a salary in accordance with the master's degree salary guide. On August 4, 2006, Judge English stayed the action pending resolution of the Board's appeal of the State Board's decision. The Board then filed an appeal from the August 4, 2006 order.

In June 2006, on Klumb's behalf, the Association filed a grievance over Klumb's placement on the mater's degree salary guide. On August 24, 2006, the Association filed a demand for binding arbitration of the grievance, alleging that the Board placed Klumb on an improper step on the salary guide for the 2005-2006 and the 2006-2007 school years, and demanding that Klumb be placed on the top step. Klumb, supra, 199 N.J. at 22.

The Board sought to restrain the arbitration claiming, as it does here, that Klumb's salary guide placement is neither negotiable nor arbitrable because it involves an interpretation of the Commissioner's decision, which was then pending in the Law Division. The Board also argued that the collective negotiations agreement between it and the Association for the period July 1, 2004 through June 30, 2007 (the agreement) does not provide credit for a rehired teacher's prior teaching experience.

On January 25, 2007, PERC denied the Board's request to restrain the arbitration, concluding that the grievance was legally arbitrable because it alleged "a breach of a contractual salary guide provision [which was] conceptually different from an action to enforce a decision of the Commissioner of Education [relating to reinstatement and back pay]." PERC also concluded that the parties could present to the arbitrator their conflicting arguments about whether the contract provides credit for teaching experience.

On March 9, 2007, the Board appealed from PERC's decision.*fn1

The parties subsequently consented to dismiss the appeal without prejudice. The matter then proceeded to arbitration.

On July 20, 2007, in a thirty-three-page written decision, the arbitrator found the matter was arbitrable. He also found that "in March 1999, the Board had an established policy of granting returning teachers salary guide credit for their prior experience" and that "[t]hat policy should have governed Klumb's placement and would have resulted in Klumb's being placed at step 16 of the master's guide, by virtue of her 18 years of prior experience with the District." The arbitrator concluded that Klumb shall be placed on the top step of the 2007-2008 master's degree salary guide for the 2007-2008 school year. In addition, within 60 days of this award, she shall be reimbursed for: (1) the difference between her 2005-2006 salary and the top step master's degree salary for that school year and (2) the difference between her 2006-2007 salary and the top-step master's degree salary for that school year.

The Board then reinstated its appeal. Thereafter, it filed a complaint in the Law Division, seeking to vacate the arbitration award. On February 19, 2008, Judge Waldman denied the Board's motion to vacate the award and confirmed it, finding as follows:

[T]he court agrees with the positions advanced by the Association and this court determines that it should not vacate the Arbitrators Award under N.J.S.A. 2A:24-8(d). Specifically, this court finds that the Arbitrator (1) had jurisdiction to decide the issue of salary guide placement as being within the purview of the collective bargaining agreement between the parties notwithstanding the fact that there are two Superior Court matters, individually litigated by Charlotte Klumb, pending in the Appellate Division of the Superior Court (having been orally argued and a written decision is being awaited) and the Arbitrator (2) had the discretion to invoke the doctrine of equitable tolling so that the contractual limitations of action doctrine of 30 days did not apply. As to both of the grounds for vacation urged by the Board, the court finds that same were "reasonably debatable" and, hence, same did not run afoul of N.J.S.A. 2A:24-8(d).

The judge entered the February 19, 2008 order. The Board filed an appeal from that order.*fn2

In an unpublished opinion, we affirmed the State Board's decision that Klumb was entitled to reinstatement with an unspecified amount of back pay, and dismissed as interlocutory the Board's appeal of the August 4, 2006 Law Division order. Klumb v. Bd. of Educ. of the Manalapan-Englishtown Regional School District, Nos. A-3039-05T1 and A-277-06T1, slip op. at 10-12 (App. Div. July 25, 2008). Our Supreme Court affirmed with modifications and remanded to the Commissioner for further proceedings regarding the calculation of back pay and whether Klumb adequately mitigated her damages. Klumb, supra, 199 N.J. at 35-36.*fn3 The Court's opinion did not address the salary guide placement issues or arbitrability of the issues presented here.

I.

As the Board concedes, an employee's placement on a negotiated salary guide generally is mandatorily negotiable and legally arbitrable. Belleville Educ. Ass'n v. Belleville Bd. of Educ., 209 N.J. Super. 93, 98 (App. Div. 1986). However, the Board contends that the specific issue of Klumb's placement on the salary guide is neither negotiable nor arbitrable, and the arbitrator lacked jurisdiction to decide it, because it involves interpretation and enforcement of the Commissioner's decision, which must be resolved by the Commissioner or by the Law Division. We disagree.

"PERC's interpretation of [the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -30], is entitled to substantial deference . . . unless its interpretation is plainly unreasonable, . . . contrary to the language of the Act, or subversive to the Legislature's intent." Turnpike Authority v. AFSCME Council 73, 150 N.J. 331, 352 (1997). We will not disturb a PERC decision "'unless it is clearly demonstrated to be arbitrary and capricious.'" Jersey City v. Police Officers, 154 N.J. 555, 568 (1998) (internal citation omitted). Applying these standards, we continue our analysis.

A majority representative, such as the Association, and a public employer, such as the Board, must meet and "negotiate in good faith with respect to grievances, disciplinary disputes, and other terms and conditions of employment." N.J.S.A. 34:13A-5.3. "Other terms and conditions of employment" include a teacher's compensation and placement on the salary guide. Piscataway Twp. Educ. Ass'n v. Piscataway Twp. Bd. of Educ., 307 N.J. Super. 263, 271 (App. Div.) certif. denied, 156 N.J. 385 (1998); Belleville, supra, 209 N.J. Super. at 98. The Commissioner has no jurisdiction to set salary levels or to determine salary guide placement pursuant to a collective negotiations agreement. Belleville, supra, 209 N.J. Super. at 98. Rather, salary and salary guide placement are governed by the collective negotiations agreement. Ibid. Disputes over salary and salary guide placement are resolved through the negotiated grievance procedures set forth in the collective negotiations agreement. Ibid. We stated in Belleville:

As recognized in N.J.S.A. 18A:29-9, placement on the salary guide is not a managerial prerogative but, rather, is subject to agreement. It is a term and condition of employment and, as such, within the scope of negotiability. The scope of negotiability coincides with the scope of grievability or arbitrability[.] . . . Upon refusal of a board of education, as here, to comply with non-binding arbitration, the forum for enforcement is in the courts, not before the Commissioner of Education[.] . . . That arbitration is non-binding does not convert a dispute within the scope of arbitrability into a school law dispute subject to the Commissioner's primary jurisdiction.

[Ibid. (citing Bd. of Educ. of WoodstownPilesgrove v. Woodstown-Pilesgrove Educ. Assn, 81 N.J. 582, 588 (1980); Ridgefield Park Educ. Assn v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978)).

"PERC has primary jurisdiction to make a determination on the merits of the question of whether the subject matter of a particular dispute is within the scope of the collective negotiations [agreement]." Ridgefield Park Educ. Assn, supra, 78 N.J. at 154 (1978) (citations omitted). If PERC decides that the subject matter of the dispute is within the scope of the agreement, the matter may proceed to arbitration. Id. at 154- 55. A party who disagrees with PERC's decision must appeal to the Appellate Division. Ibid.

Here, PERC, not the Commissioner,*fn4 had exclusive jurisdiction to determine whether the subject matter of the Association's grievance was within the scope of the agreement and was arbitrable. Any disagreement over PERC's decision had to be resolved in the Appellate Division, not the Law Division.

Further, the salary guide issue is governed by the agreement, which contains a provision governing a teacher's salary guide placement, and a provision requiring binding arbitration of disputes relating to that placement. Accordingly, we discern nothing arbitrary, capricious, or unreasonable in PERC's decision that the salary guide issue was within the scope of the agreement and arbitrable.

II.

The Board does not challenge the merits of the arbitrator's decision. Rather, it contends that the arbitrator exceeded his authority by deciding a case filed after the expiration of the time period allowed in the agreement for the filing of grievances.

There is no dispute that the Association did not timely file the grievance. As to this issue, the arbitrator found as follows:

I recognize that contractual time limits for the presentation of grievances serve a salutary purpose. They help ensure that disputes are resolved before they become longstanding problems and before memories have faded or evidence is lost. At the same time, arbitrators prefer to resolve a grievance on the merits, in order to provide the parties with direction as to the meaning of their contract language. In addition, the circumstance surrounding each allegedly untimely grievance must be evaluated, and arbitrators have sometimes held that contractual time limitations are "equitably tolled" where a party has pursued another remedy in good faith -- or has suffered a mental or emotional trauma that prevented the employee from filing a timely grievance. See Fairweather's Practice and Procedure in Labor Arbitration 131 n. 57 (Ray J. Schoonhoven ed., 4th ed. 1999) (among the factors to be considered in determining whether timeliness should be equitably tolled are the diligence of the appealing party and whether the respondent would be prejudiced).

Within this framework, it is clear that the Association did not file a grievance within 30 days of Klumb's September 2005 salary guide placement and did not formally protest that placement until June 2006. However, this is an unusual case in which the concept of equitable tolling applies.

Prior to the Association's formal involvement, Klumb and her private attorney pursued both her reinstatement and salary guide claims in multiple forums over a course of years. Klumb was thus diligent in pursuing her salary demands and the Board was well aware of them. Further, the Board was not prejudiced by the late filing, particularly since its defenses are contractual and legal in nature and not dependent on witness' recollection of events (beyond questions of salary guide placement and experience, which could be distilled from employment records). In addition, the Board would have been resistant to the Association pursuing a contractual remedy while the State Board and Law Division litigation was proceeding -- as [the superintendent's] July 14, 2006 response to the [New Jersey Education Association] indicates.

Thus, even if a grievance had been filed in September or October of 2005, there would still have been an appreciable delay in resolving it, since the Board would presumably still have sought a restraint of arbitration. In light of these factors, I conclude that the 30-day time frame for filing a grievance-or arbitration demand [] should be tolled during the period when Klumb's State Board and then Law Division litigation was active. The Association acted appropriately in filing its arbitration demand on August 24, 2006, 20 days after the Law Division action was stayed pending the Appellate Division appeal of the Commissioner of Education decision.

In affirming the arbitrator's decision, Judge Waldman concluded that the arbitrator had the discretion to invoke the doctrine of equitable tolling so that the contractual limitations of action doctrine of 30 days did not apply. As to both of the grounds for vacation urged by the Board, the court finds that same were "reasonably debatable" and, hence, same did not run afoul of N.J.S.A. 2A:24-8(d).

We agree with this conclusion.

Generally, the court may vacate an arbitration award "[w]here the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made." N.J.S.A. 2A:24-8(d). However, "[b]ecause '[t]he aim of arbitration is to provide the final disposition of a dispute in a speedy and inexpensive manner[,] . . . . judicial review of an arbitrator's decision is very limited, and the arbitrator's decision is not to be cast aside lightly.'" Borough of Glassboro v. Fraternal Order of Police, Lodge No. 108, 197 N.J. 1, 9 (2008) (quoting Pascack Valley Reg'l High School Bd. of Educ. v. Pascack Valley Reg'l Support Staff Ass'n, 192 N.J. 489, 496 (2007)). "While commenting that judicial review of arbitration decisions is limited, we noted that '[i]n the public sector, the scope of review in matters of interpretation is confined to determining whether the interpretation of the contractual language is reasonably debatable.'" Pascack Valley, supra, 192 N.J. at 496 (quoting Bd. of Educ. of Alpha v. Alpha Educ. Ass'n, 190 N.J. 34, 42 (2006)).

Further, generally, questions of procedural arbitrability fall within the scope of the arbitrator's authority. Pascack Valley, supra, 192 N.J. at 496. Therefore, "if the question is simply one relating to 'whether a party has met the procedural conditions for arbitration,' it is a matter of procedural arbitrability which has traditionally been 'left to the arbitrator.'" Id. at 497 (internal citations omitted). "[I]f a matter is one of procedural arbitrability, a court must afford deference to the judgment of the arbitrator's decision so long as it is 'reasonably debatable.'" Alpha, supra, 190 N.J. at 43 (citing State v. Int'l Fedn. of Prof'l & Tech. Eng'rs Local 195, 169 N.J. 505, 514 (2001)). "Although parties are bound only to the extent of their agreements and have a right to stand on the precise terms of those agreements, public policy favors arbitration and contracts are to be read liberally to find arbitrability." Casino Distributors, Inc. v. Teamsters Local 331, 267 N.J. Super. 424, 428-29 (Ch. Div. 1993).

Here, given this matter's extensive procedural history, including Klumb's diligent attempts to resolve the salary guide placement dispute on her own, along with no showing of prejudice by the Board, we discern no abuse of discretion in the arbitrator's decision to apply the equitable tolling doctrine to the Association's untimely-filed grievance. Because the arbitrator's decision was a "reasonably debatable" interpretation of the agreement, we afford it deference.

Affirmed.


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