February 24, 2010
POLICEMEN'S BENEVOLENT ASSOCIATION, LOCAL NO. 11, PLAINTIFF-APPELLANT,
CITY OF TRENTON, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-839-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 14, 2009
Before Judges Lisa, Alvarez and Coburn.
Plaintiff Policemen's Benevolent Association, Local No. 11 (PBA), the collective bargaining representative and negotiating agent for Trenton's police officers, patrol officers, and detectives, appeals from the Law Division's reversal of a September 13, 2007 labor arbitration decision interpreting a collective bargaining agreement provision as to the ten minutes prior to roll call. We now reverse and reinstate the arbitrator's decision.
On September 5, 2006, defendant City of Trenton's (Trenton) Police Director, Joseph Santiago, issued Memorandum Order 2006-102 requiring patrol officers to appear ten minutes prior to the beginning of their shift. Employees arriving later than ten minutes prior to the start of a scheduled shift would "be considered late for duty." On November 7, 2006, Acting Police Director Fred W. Reister issued Memorandum Order 2006-132 requiring Criminal Investigation Bureau detectives assigned to the evening shift to report for roll call ten minutes prior to their tour of duty, scheduled to start at 5:00 p.m. No compensation was paid to the patrol officers or detectives for this ten-minute early muster.
Accordingly, a grievance was filed by the PBA alleging that Trenton violated the terms of the parties' collective bargaining agreement. A request was made to the New Jersey Public Employment Relations Commission to submit the dispute to arbitration. The parties stipulated that the following framed the issue for the arbitrator's consideration:
Did the employer violate the collective bargaining agreement by requiring employees to report to work ten minutes before the start of their shifts without additional pay or compensation? If so, what shall be the remedy?
In his decision, the arbitrator first noted that the ten-minute early muster was properly instituted by the issuance of the memoranda. Furthermore, the early muster was mandatory time at work, meaning lateness could result in disciplinary action. Those straightforward conclusions laid the groundwork for the more difficult question of whether affected police personnel were entitled to compensation for the ten-minute muster.
The arbitrator relied on two sections of the collective bargaining agreement in reaching his decision that officers and detectives were entitled to pay, albeit at straight time and not at overtime. Section 8.03 of Article VIII in the collective bargaining agreement, titled "Compensation for Overtime," states:
It is recognized that employees may be required for the purpose of muster at the commencement of a tour to report in advance of the tour starting time and for the purpose of report making at the end of a tour to remain at the termination of [a] tour. In accordance with this recognition, no overtime shall be paid for a ten minute period prior to the commencement of a tour, or for a ten minute period at the termination of a tour, but in the event an employee is required to report earlier than ten minutes prior to the commencement of a tour or to remain beyond ten minutes after the end of a tour, the employee shall be paid the overtime rate for all time worked in excess of, the work day of eight consecutive hours.
The arbitrator noted, among other things, that the paragraph mandates overtime to be paid "if [o]fficers are required to report earlier than ten minutes before the shift" or to remain more than ten minutes after the end of the tour of duty. (Emphasis added).
Appendix B of the collective bargaining agreement provides:
Because the new schedule requires fewer weekly hours worked by members and does not provide sufficient manpower to allow training during normal work hours, members will be required to report for certain training outside normal working hours at no additional compensation. This training, on an annual basis, will consist of two days of firearms training and qualification, and up to 40 hours of other training mandated by the Chief of Police, to be scheduled in blocks of not less than four hours, as ordered by the Chief of Police or his designee. It is anticipated that training for anyone not on this new schedule will be on their tour of duty. For those on the new schedule, training to the extent possible, will be on their tour of duty. (Emphasis added).
The above language regarding training obligations was, according to the arbitrator's decision, the only section in the entire collective bargaining agreement that specified when employees were required to serve the employer without compensation.
The arbitrator's view, as a result of his consideration of the provisions, and of the agreement as a whole, was as follows:
The framers of the Agreement were not novices to collective negotiations. They were skilled hands who negotiated intelligently and alertly to reach a comprehensive agreement. Appendix B references that employees would attend training beyond their regular hours of work without additional compensation. Section 8.03 references that they will not be paid overtime for the ten minute muster. If the parties wanted to specifically exclude any and all payment for that ten minute period they certainly were free to do so. (emphasis supplied) The fact that they did not is not a glaring omission or any type of omission. It simply is that the parties only addressed that overtime would not be paid during that period of time. It is difficult for me to accept the fact that police officers and night shift detectives would be required to work beyond their normal tour of duty without compensation unless specifically delineated in the Agreement. To that end when the parties referenced the training in Appendix B, they specifically agreed to the amount of training and that there would be no additional compensation. (emphasis supplied) They agreed that Officers would attend those training sessions without straight time or overtime compensation. They never referenced that for straight-time compensation within the ten minute muster period.
The unmistakable intent of the parties in Article 8.03 is that overtime will not be paid for those ten minutes in question. That language is clear and unambiguous. The parties specifically referenced overtime compensation, and any alternative argument by the City must be set aside. It is axiomatic in contract construction that to expressly exclude only overtime payment for the ten minute muster period is to expressly allow for straight-time payment for those ten minutes.
The arbitrator also relied upon Kearny PBA Local No. 21 v. Town of Kearny, 81 N.J. 208 (1979). In Kearny, the Supreme Court decided that because the town's police chief required the entire police department to remain on standby notice during a municipal employee strike, all affected officers were entitled to be compensated at overtime rate because they were effectively rendered unavailable for all activities except work. See id. at 223-24. The arbitrator drew a parallel between the "stand-by" time in Kearny and the early muster in this case, concluding that although officers were explicitly prohibited from being paid overtime for the ten extra minutes, they were implicitly entitled to straight-time compensation. He further noted that the obligation under Section 8.03 was similar to the one imposed by the chief in Kearny, that the collective bargaining agreement did not specifically designate the ten-minute muster as uncompensated time, and that the collective bargaining agreement only expressly prohibited payment of overtime.
As the Law Division judge saw it, the arbitrator rewrote the contract: Trenton was "right" and the PBA "wrong." He did not consider the matter "debatable, at all"; in fact, he considered the arbitrator to be "off the page in his decision-making." He said:
The contract in this syllogistic form speaks to normal hours and it speaks to straight time. It's very explicit in that regard.
Straight time ends by contractual definition at the conclusion of the time periods referenced. So, anything after that must be and can only be overtime, and the arbitrator did not so find. And that's why I say the arbitrator rewrote the contract. What the parties agreed to was that this ten minutes would not be compensated by the only rate that it could be compensated by, and that is time and a half because it was not considered as overtime as defined in the contract.
I believe the language is clear. I believe this can be determined as a matter of law. I believe it is not debatable and does not admit to any other interpretation. That it is as straightforward as I have indicated. I have considered the arguments raised by the union with regard to the provision for training.
I have considered the legal cases that have been cited, and they're very distinguishable. They're not controlling at all in my judgment. And I have considered very specifically the standard, and it is a very high standard that must be applied here in dealing with an arbitrator's award. And I feel that in this particular case the arbitrator clearly overstepped his bounds and made a determination that was not warranted by the language here. He, in essence -- to repeat myself, but it bears repeating -- rewrote the agreement.
Therefore, the judge denied the PBA's request to enforce the arbitrator's award.
Trenton argued in the Law Division that the arbitrator's award exceeded his authority, did not accord with the facts of the case, and was contrary to law. The judge agreed. In our view, in doing so, he departed from well-established standards governing judicial review of arbitration awards, including those concerning public policy.
Arbitration "'is a favored means of resolving labor disputes.'" Pascack Valley Reg'l High Sch. Bd. of Educ. v. Pascack Valley Reg'l Support Staff Ass'n, 192 N.J. 489, 496 (2007) (quoting Bd. of Educ. of Borough of Alpha v. Alpha Educ. Ass'n, 190 N.J. 34, 41-42 (2006)). To that end, an arbitrator's award "is entitled to a presumption of validity" and will only be vacated on narrow grounds. Jersey City Educ. Ass'n Inc. v. Bd. of Educ. of City of Jersey City, 218 N.J. Super. 177, 187 (App. Div.), certif. denied, 109 N.J. 506 (1987). See also Twp. of Wyckoff v. PBA Local 261, 409 N.J. Super. 344, 354 (App. Div. 2009). N.J.S.A. 2A:24-8 provides that a court shall vacate an arbitration award only for the following causes:
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.
Our Supreme Court has also recognized that an arbitration award may be set aside if a well-defined public policy is violated by the award itself. N.J. Tpk. Auth. v. Local 196, I.F.P.T.E., 190 N.J. 283, 293-95 (2007).
When reversing an order vacating an arbitration award for exceeding the power of the arbitrator and violating public policy, we have noted that the standard for reviewing an arbitrator's decision is a deferential one. Twp. of Wyckoff, supra, 409 N.J. Super. at 355 (citing N.J. Transit Bus Operations, Inc. v. Amalgamated Transit Union, 187 N.J. 546 (2006)). We determine only whether the interpretation of the contractual language is "'reasonably debatable,'" meaning that the reviewing court "'may not substitute its own judgment for that of the arbitrator.'" Ibid.
Although the standard of review of public-employment arbitration "requires the court to consider the consistency of the award both with the law and with the public interest[,]" In re City of Newark v. Newark Council 21, 320 N.J. Super. 8, 20 (App. Div. 1999), "public policy sufficient to vacate an award must be embodied in legislative enactments, administrative regulations, or legal precedents, rather than based on amorphous considerations of the common weal." N.J. Tpk. Auth., supra, 190 N.J. at 295. Therefore, the public policy exception may be used to vacate arbitral awards "only in 'rare circumstances.'" Id. at 294 (citing Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349 (1994)).
Having reviewed the record in light of these principles, we determine that there is no basis for the rejection of the arbitrator's decision. His interpretation of the collective bargaining agreement was "reasonably debatable" given the actual text of the collective bargaining agreement and fundamental principles of construction, and did not violate any clear mandate of public policy. Accordingly, it was entitled to deferential treatment.
The arbitrator simply concluded that if the experienced negotiators who arrived at the collective bargaining agreement intended to make the ten-minute muster time non-compensable, they would have said so, as they did with the training time. His conclusion was corroborated by the fact that overtime compensation for the ten-minute early start was expressly prohibited. Whether or not we agree with this interpretation, it is plausible and reasonably debatable. His award should therefore be upheld.
COBURN, J.A.D. (temporarily assigned, on recall), dissenting.
In public employment arbitration, the arbitrator's interpretation of the parties' contract must be accepted by a court if the arbitrator's interpretation is "reasonably debatable" and the award violates neither law nor public policy. State, Office of Employee Relations v. Commc'ns Workers of Am., AFL-CIO, 154 N.J. 98, 112 (1998). No one is suggesting that the award violated law or public policy. Rather, the question is whether the arbitrator's interpretation is reasonably debatable.
The arbitrator's interpretation can be reasonably debatable only "if the contractual language is open to reasonable debate." N.J. Transit Bus Operations, Inc. v. Amalgamated Transit Union, 187 N.J. 546, 554 (2006). In other words, "[t]he reasonably debatable standard requires... that the arbitrator's choice be examined to determine whether it was justifiable based on a reasonable interpretation of the contractual language." Id. at 555 (citing Kearny v. PBA Local No. 21 v. Town of Kearny, 81 N.J. 208, 220-21 (1979)). Applying those principles, the majority determines that the arbitrator's decision was based on a reasonable interpretation of the contract and that therefore the trial judge erred in vacating the award. I find myself in agreement with the trial judge and in disagreement with the majority. Therefore I respectfully dissent with these additional comments.
The agreement describes two basic categories of compensation: a normal eight-hour working day at straight-time and work beyond the normal eight hours at overtime. In addition, the agreement requires two days plus forty hours for training "outside normal working hours at no additional compensation," and attendance at the ten-minute muster and reporting periods without overtime pay.
Section 8.03 of the collective bargaining agreement, which concerns the ten-minute muster at the beginning of an eight-hour tour of duty and the ten-minute report period at the end of an eight-hour tour of duty, clearly states that "no overtime shall be paid" for those ten-minute periods. As the trial judge determined, it is perfectly obvious that Section 8.03 used the phrase "no overtime shall be paid" because the ten-minute periods would otherwise constitute payable overtime. There is no logical basis for inferring from that language, or from anything else in the contract, that the parties used the language at issue to agree that the officers would be paid at straight time for the ten-minute periods.
The arbitrator's conclusion is also inconsistent with the provision at the end of Section 8.03 requiring that officers who muster or report for more than ten minutes before or after a regular tour of duty be paid at the overtime rate for all of the time in excess of eight hours.
The arbitrator relied on the proposition that it was unlikely that police officers would have agreed "to work beyond their normal tour of duty without compensation unless specifically delineated in the Agreement." It would, I think, be far more unlikely that police officers would have agreed to work for compensation beyond a normal tour at any rate less than overtime. Since the ten-minute periods in question are overtime periods, I think it clear that the express agreement not to be paid overtime for them constituted an agreement that these were uncompensated periods. That view is buttressed by the exception to non-payment at the end of Section 8.03 stating that when muster or reporting time exceeded ten minutes, Trenton would have to pay overtime for all the time in excess of eight hours.
The arbitrator concludes his opinion by stating this proposition:
It is axiomatic in contract construction that to expressly exclude only overtime payment for the ten minute muster period is to expressly (sic) allow for straight-time payment for those ten minutes.
That conclusion appears to be illogical and inconsistent with the agreement. Furthermore, since we are dealing here with an implied term, it is contrary to the settled principle that "[t]erms will be implied in a contract where the parties must have intended them because they are necessary to give business efficacy to the contract as written." N.J. Bank v. Palladino, 77 N.J. 33, 46 (1978) (citing Renee Cleaners, Inc. v. Good Deal Super Markets of N.J., Inc., 89 N.J. Super. 186, 190 (App. Div. 1964)). Here, implication of the term as done by the arbitrator was not only unnecessary to give efficacy to the contract, it was contrary to it. In short, time spent beyond eight hours is overtime under the agreement. Therefore, a waiver of overtime in this context can only mean a waiver of pay.
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