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County of Hudson v. District 1199J


January 15, 2010


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5829-08.

Per curiam.


Argued December 9, 2009

Before Judges Sabatino and Lyons.

District 1199J, AFL-CIO (the Union) appeals from two orders entered by the Law Division on January 23, 2009. The first order granted the County of Hudson's (Hudson) application to vacate an arbitration award. The second order denied the Union's application to affirm the award. The relevant facts and procedural history necessary for our consideration of the issues on appeal are as follows.

The Union and Hudson are parties to a Collective Negotiation Agreement (the Agreement) that covers the period July 1, 2001, through June 30, 2006. The Agreement was extended by a Memorandum of Agreement signed by both parties. The grievant, Richardo Fulcher, was represented by the Union and was part of the Union's bargaining unit with Hudson. He was hired by Hudson on June 12, 2006, on a provisional basis as a printing machine operator.

A provisional employee appointment is one made in the absence of a complete certification where "the appointing authority certifies that in each individual case the appointee meets the minimum qualifications for the title at the time of the appointment and that failure to make a provisional appointment will seriously impair the work of the appointing authority." N.J.S.A. 11A:4-13(b). The relevant statute provides, however, that, "[i]n no case shall any provisional appointment exceed a period of 12 months." Ibid. Pursuant to N.J.A.C. 4A:4-1.5(b), [a]ny employee who is serving on a provisional basis and who fails to file for and take an examination which has been announced for his or her title shall be separated from the provisional title. The appointing authority shall be notified by the Department and shall take necessary steps to separate the employee within 30 days of notification, which period may be extended by the Commission for good cause.

At the time Fulcher was hired, Jesus Manalanson was also employed by Hudson on a provisional basis as a printing machine operator. The Department of Personnel called for an examination of candidates to select a permanent appointee for the position. At that time, Fulcher signed an "Acknowledgment" in which he was advised that the Department had announced a Civil Service examination for his position. In the Acknowledgment, Fulcher was informed that the Department had announced an examination for his position and that "if I do not file for the position and pass the examination I may be terminated from my position or returned to my previous title, whichever is applicable, and replaced by a person who takes and passes the examination." The examination was administered in August of 2006, and the Department issued its results on October 4, 2006. The names of Brando Colom and Jesus Manalanson appeared on the list of successful candidates. Fulcher failed the examination and his name did not appear on the certified list as an eligible candidate.

On February 20, 2007, Jesus Manalanson was hired as a permanent printing machine operator from the certified list of eligible candidates. On April 13, 2007, Fulcher was separated from employment.

Fulcher received a letter from Hudson dated April 11, 2007, captioned "Notice of Layoff." The letter advised him that you are being laid off from your provisional position of Printing Machine Operator. This layoff is effective at the end of the work day on Friday, April 13, 2007. This action has been taken because your name does not appear on the New Jersey Department of Personnel (civil service) list for your title.

The Agreement contained a Grievance Procedure which ends in binding arbitration. Article VIII, Section 5.A, Layoff, provides: "The County adheres to the NJ Department of Personnel Rules and Regulations governing layoffs, seniority, demotional rights, and recalls as contained in N.J.A.C. 4A:8-1.1, et seq."

Fulcher filed a grievance challenging his separation. The grievance progressed through various steps of the grievance procedure, culminating in a binding arbitration hearing on March 11, 2008. The parties agreed to submit the following issues to arbitration:

A. If the arbitrator has jurisdiction to decide this issue, is the grievance of Richard Fulcher preempted by the Civil Service Regulations governing the separation of provisional employees from service, in which case it must be dismissed?

B. Did the employer violate the parties' collective bargaining agreement by refusing to process the April 11, 2007 grievance of Richardo Fulcher?

C. Did the employer violate the parties' collective bargaining agreement by separating grievant Richardo Fulcher from provisional employment effective April 13, 2007?

D. If so in either case, what shall be the remedy?

The arbitrator issued his opinion on August 25, 2008. He found, in part:

A. The union's grievance is substantively arbitrable, and I do have jurisdiction to decide the issues it raises.

B. The grievance of Ricardo Fulcher is not preempted by the Civil Service Regulations governing the separation of provisional employees from service because under the facts of this case nothing in those Regulations required grievant's termination.

C. The employer did not violate the parties' collective bargaining agreement by failure to answer or otherwise respond to the April 11, 2007 Step III grievance of Ricardo Fulcher.

D. The employer did violate the parties' collective bargaining agreement by separating grievant Ricardo Fulcher from provisional employment by his layoff effective April 13, 2007.

E. For the reasons expressed in paragraph "Fourth" [of the Arbitrator's Opinion and Interim Award], grievant is entitled to the remedies of reinstatement to his Printing Machine Operator position, back pay, seniority, and benefits for the remaining permissible period of his provisional appointment to that position, April 13, 2006[,] through June 11, 2007.

F. For the reasons expressed in paragraph "Fifth" [of the Arbitrator's Opinion and Interim Award], grievant may also have been entitled to recall to the position of Maintenance Repairer on August 20, 2007[,] and to the remedies of back pay, seniority, and benefits for the period of Colom's provisional appointment to it from the date through February 18, 2008.

G. I retain jurisdiction of this matter for a period of 90 days to determine any disputes that may arise between the parties concerning grievant's remedial entitlement pursuant to the preceding paragraph. Either party may invoke that retained jurisdiction in writing during that period. If neither party does so, that retained jurisdiction shall lapse; and this Interim Award shall become Final in all respects.

Hudson and the Union both filed applications to the Law Division to vacate and confirm the arbitrator's award, respectively. Oral argument was held on January 23, 2009, and on that date, the Law Division judge vacated the arbitrator's award and denied the application to confirm and enforce the award.

On March 11, 2008, Hudson also filed a Petition for Scope of Negotiations Determination with the Public Employment Relations Commission (PERC) on the grievance that was before the arbitrator. The parties agreed to place the PERC petition on hold pending completion of the arbitration proceedings. On January 29, 2009, PERC issued its decision finding that the grievance was within the scope of negotiations and not a managerial prerogative. Hudson did not appeal that decision.

A notice of appeal in this matter was filed on February 2, 2009, by the Union.

On appeal, the Union argues that the arbitrator's award should be confirmed and enforced. Hudson argues that the decision of the Law Division should be affirmed. It claims that the arbitrator exceeded or so imperfectly executed his authority, that the Law Division appropriately recognized that Hudson had a managerial prerogative to terminate Fulcher, and that the arbitration was preempted by state law and regulations concerning Hudson's removal of a provisional employee.

We begin our analysis of this matter by reviewing the pertinent law as recently outlined by the Supreme Court. In Middletown Township PBA Local 124 v. Township of Middletown, 193 N.J. 1, 10-11 (2007), the Court said:

Arbitration of labor-management disputes is favored in New Jersey. Scotch Plains-Fanwood Bd. of Educ. v. Scotch Plains-Fanwood Educ. Ass'n, 139 N.J. 141, 149 (1995). Consequently, to ensure "finality, as well as to secure arbitration's speedy and inexpensive nature, there exists a strong preference for judicial confirmation of arbitration awards." N.J. Tpk. Auth. v. Local 196, 190 N.J. 283, 292 (2007) (citations and internal quotation omitted). Specifically, in public sector arbitration, a court will confirm an arbitrator's award so long as the award is "reasonably debatable." Ibid.; N.J. Transit Bus Operations v. Amalgamated Transit Union, 187 N.J. 546, 548 (2006); Kearny PBA Local No. 21 v. Town of Kearny, 81 N.J. 208, 221 (1979). Under the "reasonably debatable" standard, a court reviewing an arbitration award "may not substitute its own judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's position." N.J. Transit Bus Operations, supra, 187 N.J. at 554.

There are four statutorily-defined circumstances under which a court may vacate a labor arbitration award:

a. Where the award was procured by corruption, fraud or undue means;

b. Where there was either evident partiality or corruption in the arbitrators, or any thereof;

c. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause being shown therefor, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;

d. Where 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.]

Hudson argued that the arbitrator exceeded or so imperfectly executed his power such that a mutual, final and definite award upon the subject matter submitted was not made. The trial court agreed. The trial court focused primarily on Fulcher's status as a provisional employee. Article XXX, Section 4, Provisional Employees, of the Agreement between Hudson and the Union provides:

Bargaining unit Employees who hold "provisional" status under Civil Service law and are hired after the date this Agreement becomes effective may be terminated by the County at will, and with no recourse to the contractual grievance and arbitration procedure, during their first six months of employment. Such Employees may process any disciplinary action taken against them other than termination under the contractual grievance and arbitration procedure to the extent permitted by law. Such Employees shall accrue seniority from their date of hire.

The trial court construed this provision and found that Fulcher was a provisional employee. In addition, the court concluded that Fulcher, as a provisional employee, could be terminated at will and as part of management's prerogative. The trial court held that this was particularly true because the Civil Service had held an examination and Fulcher did not pass same. The trial court stated that "the only provision in the collective bargaining agreement for a provisional employee to have a matter arbitrated is in disciplinary actions." The trial court found that there was no legal authority to "strip" Hudson's managerial prerogative where it involved an at-will provisional employee.

The court also noted that Fulcher signed an acknowledgment stating that if he did not take and pass the test he could be terminated from his position. Consequently, the court in interpreting Article XXX, Section 4, found that the arbitrator had improperly executed his powers in granting the award.

An arbitrator's award, however, is not to be cast aside lightly. Kearny P.B.A. Local #21 v. Town of Kearny, 81 N.J. 208, 221 (1979). The scope of judicial review in such matters "is limited to determining whether or not the interpretation of the contractual language is reasonably debatable." Ibid.

In this case, the Union argues that a reasonable reading of Article XXX, Section 4 is that a provisional employee may be terminated at will only during the first six months of employment. After that period, such employee can process any grievance arising from a termination under the Agreement's contractual grievance and arbitration procedure. Also, the Union interprets Article XXX, Section 4 to entitle provisional employees to accrue seniority from the date of hire. The Union's interpretation and the one adopted by the arbitrator goes on to point out that in this case Fulcher was not terminated but rather "laid off."

Fulcher was not terminated as an at-will employee since he had been working for more than six months at the time of the layoff. Further, given the facts present here, there was nothing in the Agreement or the law that required or permitted termination sooner than the twelve months' provisional employment deadline. N.J.S.A. 11A:4-13(b). We note that N.J.A.C. 4A:4-1.5(b) provides a basis of termination for a provisional employee who fails to file for and take a final examination which has been announced for his title. In this case, Fulcher did file for and take the examination; however, failure does not, under the regulations, require an immediate termination.

Fulcher could have been terminated for cause, but no grounds for same were ever brought. Most importantly, Fulcher could have been laid off but only in accordance with Article VIII, Section 5.A of the Agreement. There is no argument that the terms and conditions of that provision of the Agreement were complied with.

The arbitrator, therefore, interpreted Article XXX, Section 4 to mean that a provisional employee who has completed six months of such employment can only be terminated in accordance with the Agreement or State law and regulations. There is no regulation or statute which mandated Fulcher's termination prior to the twelve-month provisional period given the facts present and the arbitrator's reasonably debatable interpretation of Fulcher's status. Given the arbitrator's interpretation, therefore, he noted that the lay-off procedures, which Fulcher was told was the reason for termination, were not complied with. Further, given the arbitrator's reasonably debatable interpretations of the Agreement, N.J.S.A. 11A:4-13(b) and N.J.A.C. 4A:4.1-5(b) did not preempt or impermissibly deny a management prerogative. Accordingly, the arbitrator made the award set forth above.

The issue here once again is not the wisdom of the arbitrator's award or whether we would have interpreted the Agreement the same as the arbitrator. The issue is simply whether the arbitrator's interpretation was reasonably debatable. We find in this case that it was. Accordingly, we reverse the orders entered by the trial court.

Reverse and remanded.


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