On appeal from the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this employment case, the Court determines whether an arbitrator exceeded his authority by imposing a lesser penalty than termination for an employee's misconduct.
John Mizichko began working as a custodian for the Linden Board of Education (Board) in July 2000. On May 5, 2005, Mizichko was working the night shift at Linden High School, and a scheduled dance recital required that students change outfits in several classrooms. The head custodian posted signs informing Mizichko that certain classrooms would be used as changing rooms. The evening supervisor instructed Mizichko to knock and yell "custodian" before entering a female area, and to immediately leave if he unknowingly entered a changing room. At one point, Mizichko entered a room where female students were changing. He cleaned the glass panes on the door and ignored the pleas of the students to leave. A teacher informed Mizichko that it was improper for him to be in the classroom when female students were changing and instructed him to leave. Mizichko eventually left the room.
Mizichko acknowledged that he knew certain rooms would be used as changing rooms and was instructed not to enter those rooms. He stated, however, that he had cleaned other classrooms that were designated as changing rooms and found them empty after knocking. He admitted encountering students in one room, but stated he was unaware that they were undressing. He also admitted that he hesitated when a teacher told him to leave. Mizichko was placed on paid suspension. After conducting an investigation, the Board voted to terminate Mizichko's employment.
The Linden Education Association (Association) filed a grievance on Mizichko's behalf pursuant to the Collective Negotiating Agreement (Agreement). The parties were unable to come to a resolution, and the Association filed a request for arbitration. The Agreement required that grievances be resolved through binding arbitration and stated that an employee with contractual tenure, such as Mizichko, "shall not be disciplined, discharged or not reappointed without just cause." The Agreement did not define just cause. The parties framed the question for the arbitrator as follows: "Did the Board of Education have just cause to terminate the employment of John Mizichko? And, if not, what shall be the remedy?" After the hearing, the arbitrator determined that Mizichko was motivated by a desire to get his work done, but knew about the rule and the possible consequences of violating it, therefore there was just cause to impose discipline. Concluding that progressive/corrective discipline was an integral part of the just cause concept, the arbitrator imposed a ten-day suspension without pay after noting that this was Mizichko's first offense, and after finding that termination was disproportionate to the gravity of the misconduct.
The Board filed a complaint in the Superior Court, Law Division, seeking to vacate the arbitration award. In confirming the award, the judge interpreted the arbitrator's opinion as not having found just cause to terminate Mizichko's employment, and instead having found the requisite amount of just cause to impose some form of discipline. The judge concluded that the arbitrator did not exceed his authority by imposing a lesser penalty.
In an unpublished decision, the Appellate Division reversed the trial court's judgment with one member of the panel dissenting. The majority interpreted the arbitrator's decision as having found that there was just cause to terminate the employee, therefore the arbitrator had no authority to consider other remedies. The dissenting judge concluded that the arbitrator's finding that termination was a disproportionate penalty and that a suspension was appropriate was a proper exercise of his authority and filled the gaps in the Agreement's disciplinary guidelines. The Association appealed to the Supreme Court as of right based on the dissent in the Appellate Division.
HELD: The fair and reasonable interpretation of the decision of the arbitrator is that he found no just cause to terminate the employee. As directed by the parties, he then imposed an appropriate sanction. The arbitrator's determination satisfied the reasonably debatable standard of review and did not exceed the limits of his authority.
1. New Jersey jurisprudence favors the use of arbitration to resolve labor-management disputes, and there is a strong preference for judicial confirmation of arbitration awards. Judicial review of an arbitration award is limited, and in the public sector, an award will be confirmed so long as the award is reasonably debatable. Arbitration is a vehicle by which meaning and content are given to a collective bargaining agreement, and it is the arbitrator's construction of the agreement that is bargained for. Furthermore, the weight of arbitral opinion is that a standard of just cause may be imposed upon disciplinary actions even if such a standard is not spelled out in the agreement. Under the New Jersey Arbitration Act, N.J.S.A. 2A:24-1 to -11, a reviewing court may vacate an award if it was procured by fraud or undue means, there was partiality or corruption in the arbitrators, the arbitrators were guilty of misconduct prejudicial to the rights of any party, or the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award was not made. (Pp. 9-12).
2. Here, the parties asked the arbitrator, "Did the Board of Education have just cause to terminate the employment of John Mizichko? And, if not, what shall be the remedy?" The questions implied that a remedy other than termination would be appropriate, because if the arbitrator did not find just cause to terminate, the parties asked him to both fashion and impose an appropriate remedy. The Agreement did not define just cause, and there was nothing in the questions submitted that limited the power of the arbitrator to fill in the gap and give meaning to that term. The arbitrator did that. The arbitrator first explained that, in general, just cause requires that before an employee is disciplined, he should know of the existence of a pertinent rule, that the rule is reasonably related to the business of the employer, and the possible consequence of a violation. Although the arbitrator found just cause for discipline, he also concluded that the facts were insufficient to justify a finding of just cause that would result in termination. The arbitrator declared that when termination is imposed, just cause "requires that the penalty not be disproportionate given the totality of the circumstances, including mitigating factors[,]" and "the Board has not proven that termination of Mizichko's employment is appropriate." The fair and reasonable interpretation of the arbitrator's decision is that he found there was no just cause for termination. That decision is reasonably debatable, therefore the trial court properly confirmed the award. (Pp. 12-13).
3. After reviewing New Jersey and federal cases, the Court explains that the contractual language drives its decision in this case. The Agreement did not define just cause, and the arbitrator properly filled in the gap and gave meaning to the term. He concluded that progressive/corrective discipline was an integral part of the just cause concept, and that the employee's misconduct was not so egregious to support just cause to terminate. After reaching that conclusion, consistent with the issues presented by the parties, he imposed discipline. The arbitrator's determination satisfied the reasonably debatable standard and did not exceed the limits of his authority. (Pp. 13-18).
The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division for reinstatement of the arbitration award.
JUSTICE RIVERA-SOTO, concurring in the result, is of the opinion that by asking the arbitrator to consider both whether discipline was to be imposed and, if so, the degree of discipline to be imposed, the parties stipulated to the issues to be determined by the arbitrator and waived any objection to the exercise of that jurisdiction. Justice Rivera-Soto maintains that outright enforcement of the parties' own agreement to arbitrate, on its explicit terms, justifies reinstatement of the award.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, and HOENS join in JUSTICE WALLACE's opinion. JUSTICE RIVERA-SOTO filed a separate opinion, concurring in the Court's result. JUSTICE LONG did not participate.
The opinion of the court was delivered by: Justice Wallace, Jr.
The central issue in this case concerns the interpretation of an arbitration award. After the Linden Board of Education (Board) terminated an employee for an asserted infraction, the Linden Education Association (Association) filed a grievance on behalf of the employee. The parties agreed to submit to arbitration the questions whether "the [B]oard of Education h[ad] just cause to terminate" the employee, "[a]nd if not, what shall be the remedy?" The arbitrator found that while there was just cause to discipline, just cause to "terminate require[d] that the penalty fit the infraction[,]" and under the totality of the circumstances, the Board failed to prove that termination was appropriate. The arbitrator imposed the penalty of a tenday suspension without pay and reinstated the employee with full back-pay. In response, the Board filed a complaint in the Law Division, and the trial court confirmed the award. The Appellate Division reversed with one judge dissenting.
Due to the dissent in the Appellate Division, this matter is before the Court as a matter of right. R. 2:2-1(a)(2). We now reverse. We hold that the arbitrator answered "no" to the question whether the Board had just cause to terminate, and as directed by the parties, imposed an appropriate sanction.
The material facts are not in dispute. John Mizichko (Mizichko) began his employment with the Board in July 2000 as a custodian and was a member of the Association. On May 5, 2005, Mizichko was working the night shift at Linden High School. That evening, a scheduled dance recital required that students change outfits in several classrooms. At one point, Mizichko entered a room where several female students were changing. He proceeded to clean the glass panes on the door and ignored the pleas of the students to leave, as they were in the midst of changing their outfits. A teacher informed Mizichko that it was improper for him to be in the classroom when female students were changing and instructed him to leave the area. Mizichko eventually left the room.
Robert Kratzer, the head custodian at Linden High School, had previously posted signs informing Mizichko that certain classrooms would be used as changing rooms on the night of the incident. He explained that the evening supervisor had instructed Mizichko to knock and yell "custodian" before entering a female area, and that if he unknowingly entered a changing room, he should immediately walk out of the room.
Mizichko acknowledged he was aware that certain rooms would be used as changing rooms during the dance recital, and that he had been instructed not to enter those rooms. He stated that earlier in the evening he had cleaned other classrooms that were designated as changing rooms and that after he had knocked, he found them to be empty. Mizichko admitted encountering a few students in one room while he was cleaning the inside glass panes on the door, but stated he was unaware that those ...