On appeal from the Board of Police and Firemens Retirement System, Docket No. 3-10-33440.
The opinion of the court was delivered by: Espinosa, J.S.C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, Sapp-Peterson*fn1 and Espinosa.
Appellant Arthur Snellbaker appeals from a final decision of the New Jersey Division of Pensions and Benefits (the Division) that denied him credit toward his pension for retroactive pay increases made pursuant to the settlement of a lawsuit. We reverse.
This matter was referred to the Office of Administrative Law after Snellbaker requested a fair hearing following the Division's determination that a retroactive payment of $185,392.36 was not creditable for pension purposes.
The following testimony and evidence was presented at the hearing before the Administrative Law Judge (ALJ).
Snellbaker was employed by the City of Atlantic City (the City) as a police officer for thirty-eight years and served as Chief of Police from 2000 to 2006. In January 2002, a new mayor, Lorenzo Langford, assumed office. Snellbaker described his relationship with Langford as "stormy" and "antagonistic." In an apparent effort to shift leadership of the police department to a person of his choice, Langford appointed a police captain, Robert L. Flipping, to the civilian position of Director of Public Safety. Pursuant to N.J.S.A. 40A:14-118, the day-to-day operations of the police department remained under the direction of Snellbaker. However, Flipping attempted to exercise authority over the day-to-day operations and, when Snellbaker resisted, Langford suspended him for four days for refusing to follow a direct order from Flipping.
Snellbaker filed a four-count verified complaint in lieu of prerogative writs and order to show cause against the City and Flipping that included a claim under the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. By order and written decision dated October 20, 2003, Valerie H. Armstrong, A.J.S.C., concluded that a directive issued by Flipping violated N.J.S.A. 40A:14-118; enjoined Flipping from interfering with Snellbaker's duties and responsibilities under that statute; and vacated Snellbaker's suspension.
From 2002 through 2006, Snellbaker was paid a base salary of $109,981 and Langford declined to grant him any increase in salary. The ALJ stated that, during those years, Snellbaker's subordinate deputy chiefs received regular increases: 3.5% in 2002, 10% in 2003, 11% in 2004 and 5% in 2005. A schedule prepared by the City set forth the salaries of the deputy chiefs for those years and revealed that there were six different deputy chiefs in the department, each of whom received a base salary that exceeded the base salary paid to Snellbaker.
Snellbaker added a claim to his ongoing litigation against the City for retroactive salary increases for 2002 through 2005, based upon N.J.S.A. 40A:14-179, which provides, in pertinent part:
[T]he starting base salary of said chief of police and the deputy chief shall be set at a rate that is higher than the highest base salary of the ranking police officer next in command below the chief of police or deputy chief of police as appropriate. Thereafter, whenever new base salary ranges are set by the governing body or appointive authority, unless the chief of police or deputy chief shall consent to a lesser adjustment, the base salary for the chief of police and his deputy chief shall be adjusted to ensure that their base salaries remain higher than the base salaries of other ranking supervisory officers in the department. [(Emphasis added).]
At a minimum, the statute requires that the chief be paid a higher base salary than the next highest ranking officer throughout his tenure. See Smith v. Twp. of Andover, 283 N.J. Super. 452, 458, 461 (App. Div.) (discussing statute before 1995 amendment), certif. denied, 143 N.J. 320 (1995).
In November 2005, Langford was defeated in his bid for re-election. The new administration promptly addressed settlement of Snellbaker's lawsuit.
Domenic Cappella, Assistant Business Administrator for the City, acknowledged that Snellbaker had not received any salary increases during the time that Langford was mayor and testified regarding the settlement of the retroactive salary increase issue as follows:
Q: Focus if you could on any discussions concerning his salary increases. First of all, did you have any discussions with the mayor and/or the city attorney about the chief's legal entitlement to salary increases for that four-year period of time.
A: I had the discussion with the solicitor, Kim Baldwin, I recall. And I believe once with other personal [sic] matters with the mayor,... but I was made aware that... under a Title 40... that it said that the deputy chiefs or his subordinates wouldn't make any salaries or monies more than the chief. That's number one. Number two,... I saw or they showed me where he did not receive any raises while he was the chief, which, I believe, when I was there, it was for four years. I know he was chief before that but -
Q: Was there any discussion in terms of how the raises would be arrived at that were ultimately granted to the chief?
A: We would compare them to what the deputy chiefs got and the supervisors, I believe, through the bargaining unit of the officers.
Asked if the salary adjustments for 2002 through 2005 were "extra compensation granted primarily in anticipation of the chief's retirement," Cappella replied, "[A]bsolutely not." He testified that "this was strictly to correct a wrong, make whatever was done correct." As Cappella acknowledged, the wrong to be corrected was the City's failure to comply with N.J.S.A. 40A:14-179. The way it was corrected was to give Snellbaker increases comparable to the new salary ranges set for the other ranking supervisory officers in the department to bring the City into compliance with N.J.S.A. 40A:14-179.
A settlement was reached that was memorialized in two separate documents. The Separation Agreement and Release (the Settlement Agreement) entered into by Snellbaker and the City was executed in April 2006. The Settlement Agreement provided that Snellbaker would receive "unconditional compensation, payments and benefits from CITY if and only if SNELLBAKER ceases to be employed by CITY as of April 7, 2006," and identified those payments as (a) his final pay through the Separation Date, (b) the payment of retroactive annual salary increases effective January 1, 2002 up to and including January 1, 2005 pursuant to the terms of a Supplemental Separation Agreement (the Supplemental Agreement), (c) unused vacation, sick, compensatory and personal days, to be paid based upon 521.5 days at a rate that reflects the retroactive annual salary increases set forth in the Supplemental Agreement and (d) post-retirement benefits. The Settlement Agreement also authorized a lump sum payment of $500,000 to Snellbaker that the ALJ found was in satisfaction of his CEPA claim. The Settlement Agreement explicitly stated that this lump sum payment was "for compensatory damages and do[es] not constitute backpay."
The stated purpose of the Supplemental Agreement is to set forth "the agreement between the parties with regard to back pay and salary adjustments." The adjustments are identified as follows:
Effective January 1, 2002, SNELLBAKER'S salary shall be increased by 3.5%. Effective January 1, 2003 SNELLBAKER'S salary shall be increased by 10%. Effective January 1, 2004, SNELLBAKER'S salary shall be increased by 11%. Effective January 1, 2005, SNELLBAKER'S salary shall be increased by 5%. Total retroactive amount to be ...