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Township of Irvington v. Irvington PBA Local 29

October 21, 2009


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9445-06.

Per curiam.


Argued September 29, 2009

Before Judges Lisa, Baxter and Alvarez.

The Township of Irvington (Township) appeals from the Law Division orders of April 13, 2007 and July 25, 2008 that respectively confirmed an arbitration award and supplemental arbitration award rendered in arbitration proceedings resulting from grievances filed by Irvington PBA Local 29 and Irvington Superior Officers Association (unions). In the initial award, the arbitrator required the Township to pay the employees represented by the unions for an additional two-week pay period in 2004. Although the court confirmed the award, it remanded the matter to the arbitrator for further consideration of the remedy, namely the manner in which the Township would be required to pay the award, in light of the Township's claim that payment of the total amount required would cause it a severe adverse fiscal impact. In his supplemental award, the arbitrator modified the remedy to lessen the fiscal impact on the Township.

In its appellate brief, the Township argued that (1) the initial award should not have been confirmed because the arbitrator exceeded his authority by disregarding the clear terms of the parties' collective bargaining agreements (CBAs), and (2) the supplemental award should not have been confirmed because the arbitrator did not adequately consider the fiscal impact on the Township, and because the court incorrectly ruled as a matter of law that it lacked authority to determine the public policy impact of the award. The unions dispute the arguments raised by the Township, and further argue that the supplemental award was properly confirmed because the Township's motion to vacate it was untimely.

At oral argument, counsel for the Township withdrew argument (1) described above, and advised us that the Township now limits its argument to the fiscal impact issue. Our review of the record satisfies us that the court did not err in finding that the arbitrator sufficiently considered and addressed the fiscal impact issue in rendering his supplemental award, as a result of which the award was properly confirmed. We therefore affirm. In light of this disposition, it is unnecessary for us to address the timeliness issue.*fn1

The CBAs between each union and the Township set forth the annual salaries of the represented officers and then contained provisions for the payment of those salaries as follows:*fn2

3. Salaries shall be paid[]in accordance with past practice in approximately equal payments at fourteen (14) day intervals (pay periods).

(a) The bi-weekly pay shall be determined by dividing the Gross Annual Salary by twenty-six (26).

Due to a peculiarity in the Gregorian calendar, the year 2004 contained twenty-seven pay periods rather than the typical twenty-six. This phenomenon occurs about every seven to ten years because twenty-six pay periods, each consisting of fourteen days, equals only 364 days. Three of every four calendar years consist of 365 days, and the fourth year in the cycle has 366 days. As a result, with the biweekly pay periods, there is some carryover each year which, in effect, is made up for every seven to ten years.

In December 2003, Township officials notified all salaried Township employees that in the upcoming year, instead of their annual salaries being divided by twenty-six, they would be divided by twenty-seven and be paid in the twenty-seven biweekly pay periods. Of course, each paycheck would be smaller than if the twenty-six pay period schedule was followed. After some objections and discussions, the Township changed its position. Employees would be paid in twenty-six pay periods, and their annual salaries would be divided by twenty-six, but some of the mid-year pay dates would be adjusted so the pay periods were longer than fourteen days.

On July 30, 2004, the unions filed a grievance claiming that the Township's adjustment to the four pay dates violated the terms of their CBAs. The unions requested that the Township refrain from adjusting the payroll dates, or else pay all union members the eighty "unpaid" hours at the overtime rate of time-and-one-half. After going through all of the required procedural steps for a grievance, the matter was presented to Arbitrator Gerard G. Restaino, who was mutually selected by the parties. The stipulated issues presented to the arbitrator were: "Did the Township of Irvington violate the collective bargaining agreements when [it] changed pay dates for the calendar year 2004? If so, what shall be the remedy?"

Restaino filed an opinion and award on July 28, 2006. He found that the Township violated the CBAs and therefore sustained the unions' grievances and ordered that union members be awarded two weeks' pay. He rejected the Township's argument that union members could not receive a twenty-seventh pay check because they were "salaried" and therefore limited in their pay to their specified annual salary. In addition to the contract language, Restaino placed substantial reliance on the testimony of the Township Revenue and Finance Director that although the CBAs contained annual salary figures, the union members were not paid their full annual salaries in any given year because part of the pay for one year was paid in the next year. Restaino concluded that the controlling provisions in the CBAs required biweekly salary payments, and that those payments were calculated by dividing the gross annual salary by twenty-six. He reasoned that within each calendar year affected ...

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