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Lenape Regional High School District Board of Education v. Lenape District Support Staff Association


February 16, 2010


On appeal from Superior Court of New Jersey, Chancery Division, General Equity Part, Burlington County, Docket No. C-120-08.

Per curiam.


Argued November 10, 2009

Before Judges Carchman and Lihotz.

Defendant Lenape District Support Staff Association (Association) appeals from a January 28, 2009 order granting plaintiff's, the Lenape Regional High School District Board of Education (Board), request to stay arbitration of an employee's grievance submitted by the Association as the employee's representative. Emily Capella, the District Superintendent (Superintendent), informed Michael Gallagher, a non-tenured custodial staff employee, his contract for employment would not be renewed. On Gallagher's behalf, the Association filed a grievance alleging Gallagher's "termination" violated the dismissal procedure set forth in the collective negotiated agreement (CNA) between the Board and the Association. The Board filed a complaint seeking to restrain the arbitration of Gallagher's grievance.

The Chancery judge determined Gallagher's non-renewal fell outside the terms of the CNA and, therefore, was not grievable. As requested by the Board, the court entered summary judgment, permanently restraining the arbitration and dismissing the Association's counterclaim.

On appeal, the Association argues the court erred in applying N.J.S.A. 18A:27-4.1(b) to this matter and ignored the contractual "job security provision" of the CNA. The Association seeks reversal and an order providing for the arbitration of Gallagher's grievance. For the reasons discussed, we affirm.

The facts relevant to our review, presented in a light most favorable to defendant, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995), are as follows. The Association and the Board negotiated the CNA, which commenced in July 2005 and remained in effect until June 2008. Custodial and maintenance employees hold support staff positions covered within the labor unit represented by the Association and subject to the CNA. Article XI.B.2 of the CNA set forth the procedure to be followed prior to the dismissal of custodial employees who have completed a ninety-day probationary work period and "received a written unsatisfactory evaluation in the[] performance of [their] job assignment." That section provides progressive stages aimed at allowing the employee to improve performance and also states: "Dismissal for job performance shall follow the above procedure. It is specifically understood that the Board has the right and responsibility to take any action deemed necessary in retention and/or non-retention, in matters other than job performance."

Additionally, Article VI contained a specific multi-step grievance procedure for resolution of disputes between the parties under the CNA. Steps three to five of this procedure required the parties to submit the dispute to the Superintendent, the Board and thereafter to binding arbitration.

On January 1, 2007, the Board, at the request of a prior Superintendent, approved Gallagher's hiring as a Shawnee High School custodian. Pursuant to N.J.S.A. 18A:27-1, -3, Gallagher and the Board executed two employment contracts: one for the remaining fiscal year, expiring on June 30, 2007; and the second for the following school year, terminating on June 30, 2008.

On May 5, 2008, the Superintendent wrote to Gallagher, giving him notice his contract would not be renewed for the 2008-2009 school year. Gallagher requested a "statement of reasons," pursuant to N.J.S.A. 18A:27-4.1(b), and was informed his contract was not renewed due to "failure to demonstrate the qualities and attributes of a responsible custodian."

Gallagher appeared before the Board on June 18, 2008, to seek reinstatement. The statute explains "[t]he purpose of the appearance shall be to permit the staff member to convince the members of the board to offer reemployment." N.J.S.A. 18A:27-4.1(b). Thereafter, the Superintendent wrote to Gallagher stating she would not take action as a result of his presentation to the Board.

On June 30, 2008, Gallagher's final day of employment, the Association filed a grievance with the Superintendent pursuant to Article IV.B of the CNA, which states:

No employee who has completed his probationary service . . . shall be suspended, terminated, or reduced in compensation without just cause or as may be modified by Article XI. Any such termination, suspension, or reduction in compensation shall be subject to the Grievance Procedure starting at Step 3.

The grievance sought Gallagher's reinstatement, alleging he was dismissed in violation of Article XI of the CNA, which outlines a procedure affording an employee notice and a period to achieve improvement prior to dismissal for unsatisfactory job performance.

The grievance was first presented to the Superintendent, who denied it, stating:

(i) the [Association] did not timely file the grievance under the agreement;

(ii) this matter is not grievable under the agreement;

(iii) the Superintendent has the discretion to renew or not renew a contract pursuant to N.J.S.A. 18A:27-4.1(b); (iv) the Board did not terminate Mr. Gallagher's employment and/or dismiss Mr. Gallagher from employment

Gallagher then proceeded to the Board, which also denied his request, citing the same bases identified by the Superintendent. Gallagher filed a request for binding arbitration and identified his acceptable arbitrators. N.J.A.C. 19:12-5.2, -5.3. The Board then filed its complaint to stay arbitration, asserting it took no action with respect to Gallagher's non-renewal and lacked authority to reinstate him based upon N.J.S.A. 18A:27-4.1(b), which states in pertinent part:

A board of education shall renew the employment contract of a[n] . . . employee only upon the recommendation of the chief school administrator [(CSA)] . . . . The board shall not withhold its approval for arbitrary and capricious reasons. A non-tenured . . . employee who is not recommended for renewal by the chief school administrator shall be deemed non-renewed.

Because the Superintendent, who was the chief school administrator for the district, had not recommended Gallagher's contract renewal, the Board maintains it could not take action to renew his contract. Further, because Gallagher was non-tenured, his non-renewal was not grievable based on the terms of the CNA.

The Association responded, arguing the Board may renew Gallagher's contract despite the Superintendent's decision. Additionally, it maintained Gallagher was discharged based on performance without compliance with the disciplinary provisions of the CNA. The Association sought Gallagher's reinstatement and compliance with the dismissal procedures.

In his written opinion granting summary judgment to the Board, the Chancery judge examined the express language of N.J.S.A. 18A:27-4.1(b). The court determined the statute was applicable to the factual circumstances here presented and mandated the Board had no authority to act when the Superintendent did not renew a non-tenured employee's contract.

The court concluded the "non-tenured employee is automatically deemed non-renewed by operation of law." The court also rejected the Association's argument that Gallagher was discharged for insufficient performance without compliance with the provisions of the CNA. Finding no evidence in the record of a disciplinary action or an unsatisfactory performance evaluation, the court concluded the Board was not attempting to circumvent the CNA when Gallagher's contract was not renewed. This appeal followed.

We apply the same standard as the motion judge. Coyne v. N.J. Dep't of Transp., 182 N.J. 481, 491 (2005); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). As there is no issue of material fact in dispute, the question presented is a legal one, subject to de novo review. Manalapan Realty, L.P. v. Tp. Comm. of Manalapan, 140 N.J. 366, 378 (1998).

Applied to this matter, N.J.S.A. 18A:27-4.1(b) sets forth the mechanics of the non-renewal of a public employment contract, setting forth the respective roles of the board and its chief school administrator (CSA). Jackson Tp. Bd. of Educ. v. Jackson Educ. Ass'n ex rel. Scelba, 334 N.J. Super. 162, 171-72 (App. Div.), certif. denied, 165 N.J. 678 (2000). The Legislature amended N.J.S.A. 18A:27-4.1(b) in 1995 to specifically provide renewal of an employment contract must be accompanied by the recommendation of the chief school administrator, here the Superintendent. See Jackson Educ. Ass'n ex rel. Scelba, supra, 334 N.J. Super. at 167-68. "By its terms, the statute provides, inter alia, that a board may renew an employee's contract 'only' if the CSA so recommends, and that it may decline to follow a CSA's recommendation for renewal but may not do so arbitrarily and capriciously." Id. at 168. However, the statute's introductory clause states the law will not conflict with any existing "law, rule or regulation to the contrary[.]" Id. at 173.

In this regard, the Association generally argues N.J.S.A. 18A:27-4.1(b) does not trump the rights granted to a non-tenured employee, pursuant to the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -39 (EERA) and other statutes governing the rules for school district employment. The Association also suggests the Board chose to modify the provisions of N.J.S.A. 18A:27-4.1(b) when it addressed the termination of non-tenured maintenance employees in paragraph XI of the CNA. Therefore, Gallagher's dismissal with benefit of the CNA's procedural protections is grievable and arbitration must be ordered.

We recognize that a "public employer and majority representative are free to negotiate terms and conditions of public employment that have not been set by specific statute or regulation." Wright v. Bd. of Educ., 99 N.J. 112, 119 (1985) (citing In re Local 195, IFPTE, 88 N.J. 393, 403 (1982)). "Negotiation is preempted only if the 'statutory or regulatory provisions . . . speak in the imperative and leave nothing to the discretion of the public employer.'" Local 195, supra, 88 N.J. at 403-04 (quoting New Jersey v. State Supervisory Employees Ass'n, 78 N.J. 54, 80 (1978)).

In amending the statute, the Legislature has created a presumption favoring arbitration of alleged grievances filed by public employees pursuant to the terms of a CNA. The statute states in pertinent part:

In interpreting the meaning and extent of a provision of a collective negotiation agreement providing for grievance arbitration, a court or agency shall be bound by a presumption in favor of arbitration. Doubts as to the scope of an arbitration clause shall be resolved in favor of requiring arbitration. [N.J.S.A. 34:13A-5.3.]

Therefore, in reviewing the Association's challenge, we must focus on whether Gallagher's grievance was subject to the terms of the CNA. If the grievance is cognizable under the CNA, then arbitration of that grievance is appropriate. If the agreement does not address non-renewal of an employee's contract under the circumstances presented, we must determine whether any other statutory provisions control or whether the trial court's reliance on N.J.S.A. 18A:27-4.1(b) was appropriate. We turn our review to the CNA.

The grievance procedure set forth in Article VI.B.1 states as its purpose, "to secure the lowest possible level, equitable solutions to the problems which may[,] from time to time[,] arise between the parties concerning the agreement." In defining "grievance," at Article VI.A.2., the parties have specifically excluded matters "where the Board is without authority to act"; "that involve the sole and unlimited discretion of the Board"; or "that are by law beyond the scope of the Board's authority." Article IV.B.1 applies the grievance procedure to a non-probationary employee who is "suspended, terminated or reduced in compensation without just cause[.]" Each of these instances is directed to some employment interruption during a contractual term; they do not apply to a non-renewal of an expired contract.

The employee dismissal procedure in Article XI allows "certain employees to grieve dismissal or termination." With regard to custodians and maintenance employees, the procedure discusses what steps the Board must take prior to dismissal or termination for unsatisfactory job performance. The provision also grants the Board exclusive discretion in matters of non-retention other than for unsatisfactory job performance.

We disagree with the Association's assertion that Gallagher was terminated. He completed his contractual term, and the Superintendent recommended his contract not be renewed. "Termination" is not synonymous with "non-renewal." Pascack Valley Reg'l High Sch. Bd. of Educ. v. Pascack Valley Reg'l Support Staff Ass'n, 192 N.J. 489, 493 (2007). Nor can we state Gallagher was discharged or dismissed. Ibid. As noted by the Chancery judge, no disciplinary actions were taken while Gallagher was employed. We cannot alter the agreement of the parties. Marlboro Tp. Bd. of Ed. v. Marlboro Tp. Ed. Ass'n, 299 N.J. Super. 283, 286-87 (App. Div.), certif. denied, 151 N.J. 71 (1997). Our review of the CNA discerns no terms governing the non-renewal of a non-tenured employee's contract.

The Association alternatively suggests the question of whether Gallagher's grievance falls within the scope of the CNA is a procedural question for the arbitrator to decide. In Amalgamated Transit Union, Local 880 v. N. J. Transit Bus Operations, 200 N.J. 105 (2009), the Supreme Court clarified the exclusive roles of arbitrators and the court. A threshold issue is whether the matter involves substantive or procedural arbitrability. "'Substantive' arbitrability refers to 'whether the particular grievance is within the scope of the arbitration clause in the [Collective Bargaining Agreement] CBA specifying what the parties have agreed to arbitrate.'" Id. at 115 (internal editing omitted) (quoting Standard Motor Freight, Inc. v. Int'l Bhd. of Teamsters, 49 N.J. 83, 96 (1967); Pascack Valley, supra, 192 N.J. at 496. The court decides issue of substantive abritrability by determining "'whether the party seeking arbitration is making a claim which on its face is governed by the CBA.'" Amalgamated Transit, supra, 200 N.J. at 115 (quoting Standard Motor Freight, supra, 49 N.J. at 96) (internal quotations omitted). The inquiry is whether the Board "agree[d] to arbitrate the grievance or . . . g[a]ve the arbitrator power to make the award . . . ." Standard Motor Freight, supra, 49 N.J. at 96 (citation omitted).

On the other hand, "procedural" arbitrability addresses "'whether procedural conditions to arbitration have been met.'" Amalgamated Transit, supra, 200 N.J. at 116 (quoting Standard Motor Freight, supra, 49 N.J. at 97). This question goes to the heart of the grievance process and requires determination by the arbitrators. Ibid. at 116. If the CNA encompasses the grievance, then the arbitrator addresses compliance with the process set forth in the parties' agreement as "ordinarily[,] procedural problems in arbitrations cannot be answered without consideration of the merits of the dispute, in which a court should not become involved[.]" Standard Motor Freight, supra, 49 N.J. at 97.

As noted by the trial judge, the CNA expressly excludes certain matters from those subject to grievance, including "where the Board is without authority to act"; "that involve the sole and unlimited discretion of the Board"; or "that are by law beyond the scope of the Board's authority." These issues are beyond the scope of the agreement to arbitrate. Board of Ed. of Tp. of Bloomfield v. Bloomfield Ed. Ass'n, 251 N.J. Super. 379, 384 (App. Div. 1990), aff'd 126 N.J. 300 (1991). The statute governing renewal of non-tenured employees states that if renewal is not recommended by the Superintendent, the employee's contract "shall be deemed non-renewed." N.J.S.A. 18A:27-4.1(b). An employee, like Gallagher, who chooses to appear before the Board and make a case for his renewal may do so. N.J.A.C. 6A:32-4.6. The Board has the discretion to override the Superintendent's decision but may not act arbitrarily or capriciously. N.J.S.A. 18A:27-4.1(b). Clearly, renewal of the non-tenured employee's contract in this instance is discretionary, an act which is not grievable. Nothing in the CNA changes the statute. Therefore, by its operation, the statute acknowledges that non-renewal practice, as a general rule, is "not grievable as a disciplinary action under CNAs." Pascack Valley, supra, 192 N.J. at 497 (citing N.J.S.A. 18A:27-4.1(b)).

In supplemental submissions, the Association argues the holding in Amalgamated Transit requires arbitration to determine whether the dispute is grievable.*fn1 We disagree.

In Amalgamated, supra, New Jersey Transit terminated the employment of a probationary employee who was a member of the union for providing false information on his employment application. 200 N.J. at 109-10. On behalf of its employee, the union filed a grievance seeking arbitration, as provided in the CBA. Ibid. The CBA permitted arbitration of any dispute or grievance "as to the interpretation, application, or operation of any provisions of this agreement[.]" Id. at 110. The arbitration panel reviewed whether the probationary employee's termination was subject to arbitration under the CBA. Id. at 111-12. The panel concluded that it was not. Ibid.

The Supreme Court concluded employee terminations were specifically addressed by the CBA. Id. at 117-18. Thus, whether a probationary employee could invoke the arbitration provision to grieve his termination before the arbitration panel was a procedural issue for determination by the arbitrators, not the court. Id. at 119-20. In reaching its conclusion, the Court wrote:

[T]he CBA clearly conferred that broadly stated power to interpret this CBA on the arbitrators. Thus, the CBA's arbitration provision granted to the arbitrators the authority to decide this question about their own jurisdiction. Any court looking at this CBA should have seen that it conferred broad interpretative power on the arbitrators and should have left the question for interpretation to the decision-makers designated by this CBA. [Id. at 118.]

The questions presented here differ significantly from those in Amalgamated Transit. Factually, this matter addresses the non-renewal of a non-tenured employee, not the termination of a tenured employee. The CNA did not provide that its grievance procedure constitutes the sole and exclusive method for resolving grievances between the parties covered by the agreement, but rather chose not to address non-renewal of non-tenured employees and to exclude discretionary Board actions from its grievance procedure. Legally, non-renewal of Gallagher's employment was not a defined "grievance" under the CNA. Accordingly, the proper procedure is set forth in N.J.S.A. 18A:27-4.1(b), which was followed. The trial court appropriately addressed the substantive question and properly granted judgment to the Board.


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