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Robert Vogt, Gracia Hernandan v. City of Jersey City

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


April 4, 2011

ROBERT VOGT, GRACIA HERNANDAN, H. JAMES BOOR, JOSEPH A. CASTAGNA, TIMOTHY HURLEY, MICHAEL A. PERCHUN, VERA SMITH, CHARLES MAYS, JR., ADMINISTRATOR AD PROSEQUENDUM OF THE ESTATE OF CHARLES MAYS, SR., PLAINTIFFS-APPELLANTS,
v.
CITY OF JERSEY CITY, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5496-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 5, 2011

Before Judges R. B. Coleman, Lihotz and J. N. Harris.

Plaintiffs are a group of former and present public health officers employed by defendant Jersey City (the City). They assert that they have been victimized by the failure of the City to comply with the Civil Service Act, N.J.S.A. 11A:1-1 to 12-6, and the regulations of the Department of Personnel, N.J.A.C. 4A:1-1.1 to 10-3.2. Plaintiffs appeal from a September 25, 2009 order granting summary judgment in favor of the City, dismissing their complaint with prejudice. Plaintiffs contend the City reclassified positions without notice or approval of the Commissioner of the Department of Personnel (the Commissioner) and that the City has failed to place employees in accordance with proper salary and labor grades. On the City's motion for summary judgment, Judge Bernadette DeCastro concluded among other things that plaintiffs have failed to invoke or to complete the grievance procedures contemplated by applicable collective bargaining agreements, and they had failed to seek relief under the procedures set forth in the Civil Service Act. Accordingly, the court granted defendant's motion to dismiss for plaintiffs' failure to exhaust their grievance and administrative remedies. Additional counts alleging fraud were dismissed for lack of specificity in the pleadings and the absence of proofs establishing the elements of fraud. We affirm the judgment of the Law Division, substantially for the reasons in the September 25, 2009 written opinion by Judge DeCastro. However, we remand for referral of the dispute to the grievance procedure provided in the parties' collectively negotiable agreement or for transfer to the Civil Service Commission, Department of Personnel for the plaintiffs to pursue contractual and administrative remedies as may be available pursuant to the collective bargaining agreements or under regulations promulgated under the Civil Service Act.

I.

The City is governed by the Faulkner Act, N.J.S.A. 40:69A-1 to -210, and is a civil service municipality whose personnel actions are subject to Civil Service Commission review. N.J.A.C. 4A:4-1.10(a). The Faulkner Act provides, in pertinent part, that "the mayor shall . . . fix the amount of salary, wages or other compensation to be paid to employees of the administrative departments of the municipal government . . .[,]" except for department directors and officers whose salaries are required by law to be fixed by ordinance. N.J.S.A. 40:69A-43a. Pursuant to the Faulkner Act, the Mayor of Jersey City has promulgated labor grades that include a number of job titles. Each civil service employee of the City is placed in a labor grade based on the job functions of the given title, the importance of the job, and the labor grades of other titles within the same City department. Barring a promotion, demotion or a decision by the City to move the title to a different labor grade, an employee may remain in the same grade throughout the course of his or her employment. The City pays its employees in relation to the job titles and within the salary ranges of labor grades. Plaintiffs allege that the City has not updated the labor grade system since 1992.

In 1994, four of the plaintiffs in this action*fn1 filed a lawsuit against the City seeking an adjustment of their salaries, relying on N.J.S.A. 26:3-25.1.*fn2 That statute provides that:

[E]very person holding a license . . . who is employed in a position for which this license is required by any board of health, municipality or group of municipalities shall receive the maximum salary in the person's range, within five years from the date of appointment to the position if the majority of the person's job performance evaluations are satisfactory.

On April 10, 1996, we issued an opinion in which we ruled in plaintiffs' favor. Brown v. City of Jersey City, 289 N.J. Super. 374 (App. Div. 1996). We directed at that time that the salaries of each of the plaintiffs, which were at the top of their respective labor grades, be raised because as the maximum of the range increases, so does the protected health officer's salary. Id. at 380-81.

In recognizing that health officers receive both the benefit of union-negotiated raises as well as the benefit of the statute, we stated:

[O]n those occasions when the City responds to union-negotiated increases by congruently adjusting the maximums of the salary ranges, there is no inevitable tension at all between the collective negotiation agreement and the Title 26 provision. That is to say, by reason of that provision, the health officer is already entitled to receive the current maximum for his labor grade's salary range. If, when the increase in salary is negotiated and the maximum is concomitantly increased, the employee simultaneously, with one raise, gets the benefit of both the contract and the statute. [Id. at 379-80.]

We held:

We are satisfied . . . that the concept of "maximum" is fluid rather than fixed. That is to say, we disagree with the apparent view of the City that once a health officer has reached the maximum following his five years of service, the statutory purpose and directive has been fulfilled and there is no statutory mandate thereafter to increase the employee's salary as the salary range itself is increased . . . . The whole point of the statute is to prevent the freezing of a health officer's salary below whatever the current maximum is. Moreover, it would obviously abrogate the plain intent of the statute if a health officer's salary were frozen at whatever the maximum was five years after his appointment irrespective of how often and by how much the range thereafter increased, irrespective of what new similarly titled employees were to be paid, and irrespective of what those new employees would be entitled to five years hence. [Brown, supra, 289 N.J. Super. at 379.]

In the present action, the Jersey City Public Employees' Association, Inc., Local 246 (Local 246) is the exclusive representative for white collar workers within the City, which includes plaintiffs Gracia Hernandan, Timothy Hurley, Charles Mays, Michael Perchun and Vera Smith. The collectively negotiated agreement between the City and Local 246 (the CNA) sets forth a grievance procedure as the exclusive method for resolving disputes between the City and Local 246 and its members. Article 24 of the Local 246 CNA provides, in pertinent part:

B. Definition. The term "grievance" as used herein means any controversy arising over the interpretation or adherence to the specific and express written terms of this Agreement.

C. Steps of the Grievance Procedure. The following constitutes the sole and exclusive method for resolving contractual grievances between the parties covered by this Agreement and shall be followed in its entirety unless any step is waived by mutual consent[.]

The CNA*fn3 provides for "an earnest effort" to be made to settle the differences between the aggrieved employee and the Division Director (Step One); a conference between the grievant and his representative and the Department Director or his designee, leading to a decision in writing (Step Two); submission of the grievance to the Business Administrator of the City (Step Three); and referral to the Public Employment Relations Commission (PERC) for final and binding arbitration (Step Four).

The Jersey City Supervisors' Association (JCSA) is the exclusive representative for civilian supervisors in the City, and plaintiffs Robert Vogt and H. James Boor are members of the JCSA. The parties to a collectively negotiated agreement between the City and JCSA (the JCSA Agreement) included a grievance procedure as the exclusive method for resolving disputes between the City and JCSA. The JCSA negotiates salary increases on behalf of all of its members, set forth in the JCSA Agreement. When the complaint in this action was filed, JCSA and the City were negotiating a successor agreement to the expired July 1, 2005 through June 30, 2008 JCSA Agreement. The grievance procedure set forth in Article 21 of the JCSA Agreement was identical to Article 24 of the Local 246 CNA recited above.

On November 8, 2007, plaintiffs filed a complaint in the Law Division, seeking a mandamus and alleging: (1) the City violated N.J.S.A. 26:3-25.1 by failing to pay the maximum salary within their respective salary range five years from the date of plaintiffs' appointments to their respective positions; (2) the City breached their contract and breached the covenant of good faith and fair dealing in connection with the CNA between the City and Local 246; (3) the City was unjustly enriched by its conduct; (4) the City violated the New Jersey Civil Service Act; and (5) the City engaged in fraud and misrepresentation.

Defendant filed a motion for summary judgment, seeking dismissal of the complaint. That motion was granted, and this appeal followed.

II.

Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law."

R. 4:46-2. Our review of a ruling on summary judgment is de novo, applying the same legal standard as the trial court. Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009). In making a determination, the motion court and this court must consider the facts in the light most favorable to the non-moving party and decide "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Liberty Surplus Ins. Corp., Inc. v. Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995)).

Challenging the motion judge's conclusion that they failed to exhaust the available administrative remedies, plaintiffs assert that: (1) the grievance procedure provided for in the CNA and the JCSA Agreement do not protect plaintiffs from the City's failure to comply with the Civil Service Act or the regulations of the Department of Personnel; and (2) there are no administrative remedies available which would have granted plaintiffs relief from their alleged harm.

In rejecting this agreement, Judge DeCastro reasoned:

Plaintiffs failed to file grievances or seek relief under the procedures set forth in the Civil Service Act. Admittedly, there may be circumstances where an individual is not required to exhaust administrative remedies before seeking leave of court. An administrative remedy may be dispensed where the interest of justice requires, or if there is a need for a prompt decision in the public interest or where there is no question as to administrative discretion or judgment and only a question of law is involved or where administrative recourse would be futile. Aparin v. Cnty. of Gloucester, 345 N.J. Super. 41 ([App. Div.] 2002).

Plaintiff[s] argue[] that defendant has violated the Civil Service Act and associated regulations because defendant has not come up with a compensation plan or established salary ranges for job titles since 1992 and has not provided the Department of Personnel with a current copy of a compensation plan as required under N.J.A.C. 4A:4-4.1(a)(1). Additionally, plaintiff[s] argue[] that the collective bargaining agreement between Local 246 and the Supervisor Association for the City of Jersey City, only provides for "grievance" of controversies that arise over interpretations or adherence to "specific and express written terms of the Agreement." Plaintiffs are wrong. A provision in the collective bargaining agreement states that "an employee who surpasses maximum as a result of the increases shall have labor grade increased to encompass the raise." Thus, it seems that the issue governing labor grades, is in fact, covered in the collective bargaining agreement and thus should have been submitted to the grievance procedure.

Plaintiffs have failed to utilize the remedies afforded them through the grievance/arbitration process which is mandated through their collective bargaining agreements to resolve disputes over claims relating to their employment.

Furthermore, plaintiffs are required to file administrative appeals with the Civil Service Commission regarding any Civil Service Claim under N.J.A.C. 4A:2-1.1 regarding their labor grade status. Plaintiffs likewise failed to avail themselves to this remedy and instead filed this action. As discussed previously, the defendant, City, is a civil service municipality whose personnel actions are subject to the Civil Service Commission review. Plaintiffs are required to exhaust their administrative appeals.

We note that all plaintiffs, with the exception of Vogt,*fn4

for whom the JCSA did file a grievance, failed thereafter to file administrative appeals or utilize the grievance/arbitration process.

The New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -21, provides that "[g]rievance and disciplinary review procedures established by agreement between the public employer and the representative organization shall be utilized for any dispute covered by the terms of such agreement." N.J.S.A. 34:13A-5.3.

The general rule is that an employee seeking to bring a contract grievance must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress. Exceptions to this general rule exist where the union has breached its duty of fair representation, where the grievance procedures have been repudiated, where resort to the grievance and arbitration provisions would be futile, and where the parties to the collective bargaining agreement have expressly agreed that arbitration was not the exclusive remedy. [Thompson v. Joseph Cory Warehouses, 215 N.J. Super. 217, 220 (App. Div. 1987) (internal citations and quotation marks omitted).]

Although the trial judge analyzed the relevant facts of the case, those facts became secondary to the failure of plaintiffs to adhere to the controlling mandate of their collectively negotiated agreements requiring a grievance be filed and the grievance steps be followed. In light of such failure, we affirm the judgment of the Law Division substantially for the reasons expressed in the court's written opinion.

Contrary to plaintiffs' argument, the CNA's and JCSA Agreement's grievance clauses are relevant to this dispute. The language in the JCSA Agreement and the CNA regarding the grievance/arbitration procedure defines grievance as: "any controversy arising over the interpretation or adherence to the specific and express written terms of this Agreement." Further, the article(s) provide that the grievance procedure is "the sole and exclusive method for resolving contractual grievances between the parties covered by this Agreement." Since plaintiffs specifically contend that the City breached the provision in the agreements stating that "an employee who surpasses maximum as a result of the increases shall have [his or her] labor grade increased to encompass the raise," it is contradictory for plaintiffs to argue that resort to the grievance procedure is futile. Accordingly, Judge DeCastro properly held that the JCSA Agreement and the CNA governed labor grades and the dispute should have been submitted through the grievance/arbitration process.

Likewise, plaintiffs were required to assert their claims regarding the City's violation of the Civil Service Act, as an administrative appeal before the Civil Service Commission pursuant to N.J.A.C. 4A:2-1.1. See also N.J.A.C. 4A:2-1.7(b) (providing for specific appeals but directs that "[a]ny appeal not listed above must be filed in accordance with N.J.A.C. 4A:2-1.1.").

The Department of Personnel is entrusted with the implementation of the Civil Service Act. N.J.A.C. 4A:1-1.2(a). Under the circumstances presented here, "courts are obliged to defer to the primary jurisdiction of the executive body, referring such issues for administrative resolution." Melani v. Cnty. of Passaic, 345 N.J. Super. 579, 585 (App. Div. 2001) (citations omitted).

In Melani, we held that where a plaintiff was seeking remedial measures pursuant to his or her rights under the Civil Service Act, "as a matter of primary jurisdiction, the 'affording of a remedy [more] appropriately lies with the Department of Personnel.'" Id. at 589 (quoting Kyer v. City of E. Orange, 315 N.J. Super. 524, 527 (App. Div. 1998)). Although there are several exceptions which, if applicable to the case at hand, would obviate the convenience and override the interest of justice in having to exhaust administrative remedies, but none apply here.

Generally, the exhaustion rule will not be applied: (1) when only a question of law exists; (2) when administrative remedies would be futile; (3) when irreparable harm would result; (4) when jurisdiction of the agency is doubtful; or (5) when an overriding public interest calls for a prompt judicial decision. [Triano v. Div. of State Lottery, 306 N.J.

Super. 114, 121-22 (App. Div. 1997) (citing Magliochetti v. State, 276 N.J. Super. 361, 375 (Law Div. 1994)).]

In light of the availability of an administrative appeal process, Judge DeCastro properly found that plaintiffs were required to exhaust their administrative appeals.

III.

COLOR="#333333">We next address whether the trial judge erred in finding no issue of material fact existed with regard to: (1) whether the City violated the Civil Service Act, Department of Personnel regulations, and (2) whether plaintiffs have suffered economically from the City's alleged violations.

Judge DeCastro, after quoting N.J.S.A. 26:3-25.1, stated:

Plaintiffs claim that after five years in a particular labor grade under this statute, they should automatically be promoted or "bumped up" to the next labor grade. Since the City has not promoted or bumped plaintiffs to the next labor grade, they argue that the City breached its duties under this law. Plaintiffs are mistaken. The Defendant is not required to promote or bump an employee to the next labor grade.

In Brown the court held that when the City responds to union negotiated increases by "congruently adjusting the maximums of the salary ranges, there is no inevitable tension at all between the collective negotiation agreement and the Title 26 provision." The court found that when the salary increase is negotiated and the maximum is concomitantly increased, the employee simultaneously, with one raise, receives the benefit of the contract and the statute. The Court noted that the purpose behind the statute was to prevent the freezing of a salary below whatever the current maximum is. Brown, supra, 289 N.J. Super. at 188.

Here, plaintiffs salaries were appropriately raised throughout this time and were congruent with an increase in the maximum of their labor grades. The defendant was not required to bump them up or promote them to the next labor grade level. Therefore, plaintiff's claim that defendant violated N.J.S.A. 26:3-25.1 fails.

We find that these comments disclose an adequate and proper basis for granting summary judgment in favor of defendant as to this issue.

IV.

In light of our decision that plaintiffs are first required to exhaust their administrative remedies, we decline to address the merits advanced by plaintiffs on this appeal. R. 2:11-3(e)(1)(E).

We therefore conclude that this case can and should be considered in the first instance in accordance with applicable contractual or administrative remedies. The matter is remanded for referral to the grievance procedure outlined in the collectively negotiated agreement or for transfer to the Civil Service Commission, Department of Personnel. Under the circumstances, the complaint should not have been dismissed with prejudice. See Abbott v. Burke, 100 N.J. 269, 297 (1985); Kaczmarek v. N.J. Tpk. Auth., 77 N.J. 329 (1978) (complaint filed in the Superior Court could be transferred to appropriate administrative agency).

Affirmed in part, remanded in part.


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