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Fort Lee Pba Local No. 245 v. Borough of Fort Lee


January 10, 2012


On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket Nos. C-330-09 and C-155-10.

Per curiam.


Argued*fn1 November 14, 2011

Before Judges A. A. Rodriguez and Ashrafi.

Plaintiff Fort Lee PBA Local No. 245 appeals from an October 29, 2010 order of the Chancery Division denying its motion for summary enforcement of an arbitration award. We must decide one issue - whether an arbitrator's decision is exempt from State legislation effective May 21, 2010, that requires public employees to contribute at least 1.5% of their base salary for health care benefits. The Chancery Division said no, and we agree. Therefore, we affirm the order dismissing plaintiff's complaint for summary enforcement.

Plaintiff represents police officers employed by defendant Borough of Fort Lee. The last collective negotiations agreement between plaintiff and the borough expired on December 31, 2006. The parties were unable to negotiate a new agreement, and plaintiff filed for compulsory interest arbitration in accordance with N.J.S.A. 34:13A-16. The arbitrator issued a decision on December 17, 2008, which provided for a new four-year agreement to run from January 1, 2007, through December 31, 2010. The arbitrator retained jurisdiction of the dispute "in the event the parties fail to agree on the final language within thirty days of receipt of the award."

The borough appealed the arbitrator's decision to the Public Employment Relations Commission (PERC). After a limited remand from PERC, the arbitrator issued a supplemental decision on July 6, 2009, that confirmed the earlier award. The borough appealed again, and PERC affirmed the supplemental award on September 24, 2009.

In October 2009, plaintiff filed a complaint and an order to show cause in the Chancery Division to enforce the arbitration award. Near the same time, the borough filed an appeal of PERC's decision to this court, but it did not seek a stay of the arbitrator's award.*fn2 The borough also began implementing parts of the arbitration award, specifically the compensation and insurance terms.

On March 22, 2010, while the enforcement action in the Chancery Division and the appeal before this court were pending, Governor Christie signed legislation affecting public employee benefits and pensions. See P.L. 2010, c. 2. A provision of the new legislation requires payroll deductions from all public employees of at least 1.5% of their base salary for health care benefits. The effective date of the legislation was May 21, 2010, or "upon the expiration of any applicable binding collective negotiations agreement in force on that effective date."*fn3

The borough notified its employees that the 1.5% deduction would commence on May 21, 2010. Plaintiff filed a new complaint and order to show cause in the Chancery Division seeking a declaration that the new legislation did not apply to its arbitration award or that the legislation was contrary to the State Constitution. The borough filed opposition, and the State of New Jersey was also permitted to intervene in opposition to plaintiff's claims. Plaintiff subsequently withdrew its constitutional challenge and sought enforcement of the arbitration award only on the ground that it was the equivalent of a collective negotiations agreement exempt from the provisions of the new law. All parties agreed that the dispute should be resolved on cross-motions for summary judgment.

The Chancery Division heard argument and issued a written decision on October 12, 2010. It denied summary judgment to plaintiff, concluding that the arbitration award was not tantamount to a collective negotiations agreement and therefore not exempt from the requirements of the new statute. The court entered an order implementing its decision on October 29, 2010, and plaintiff filed this appeal.

Our standard of review is plenary from the Chancery Division's interpretation of the relevant statutes. In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94 (2007); Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J. 502, 549 (2002).

We affirm essentially for the reasons stated in the written opinion of Judge Robert Contillo in the Chancery Division. Briefly stated, the relevant statute, N.J.S.A. 52:14-17.38a, makes no reference to an arbitration award. The effective date of the new legislation is extended only for "any applicable binding collective negotiations agreement in force" on May 21, 2010. In this case, no binding collective negotiations agreement was in force on that date.

Plaintiff argues that an interest arbitration award is the equivalent of a collective negotiations agreement. In support of that argument, plaintiff quotes N.J.S.A. 34:13A-16f(5)(b) and its requirement that an arbitration award be implemented immediately. Arguing legislative intent indicated by that statute, plaintiff refers to the arbitration award as "a forced meeting of the minds," and therefore, a compelled but binding agreement of the parties.

The Supreme Court described the nature of compulsory interest arbitration in Hillsdale PBA Local 207 v. Borough of Hillsdale, 137 N.J. 71, 80 (1994):

In general, compulsory interest arbitration is a statutory method of resolving collective-negotiation disputes between police and fire departments and their employers. Unlike "grievance" arbitration, which is a voluntary method of resolving disputes under an existing contract, compulsory interest arbitration does not depend on either the existence of a contract or on the agreement of the parties to proceed to arbitration. . . . It is a statutorily-mandated procedure for resolving the terms of a new contract. [Citation omitted.]

As a "creature of statute," Policeman's Benevolent Ass'n, Local 292 v. Borough of N. Haledon, 158 N.J. 392, 400 (1999), an interest arbitration award can be modified by statute. The Legislature created the right and the process to compel terms of a collective negotiations agreement; it can also alter those terms by statute. We have no occasion on this appeal to consider a constitutional issue. As a matter of statutory interpretation, however, the Legislature could mandate that a deduction be taken from employees' pay for their health care benefits as part of an "agreement" compelled by statute.

Not only did the Legislature have authority to enact legislation that modifies an arbitration award, it gave no indication in P.L. 2010, c. 2, § 5 that it intended to do otherwise. The new legislation exempts only unexpired collective negotiations agreements. It makes no reference to arbitration awards. The plain language of the statute is contrary to plaintiff's contention that an arbitration award is subject to the exemption language of the new law.

If the plain language of a statute leads to a clear and unambiguous result, the court's function in interpreting the statute is completed. Patel v. N.J. Motor Vehicle Comm'n, 200 N.J. 413, 418-19 (2009); Richardson v. Bd. of Trs., Police & Firemen's Ret. Sys., 192 N.J. 189, 195 (2007). "It is not the function of [the] Court to 'rewrite a plainly-written enactment of the Legislature [or] presume that the Legislature intended something other than that expressed by way of the plain language.'" DiProspero v. Penn, 183 N.J. 477, 492 (2005) (quoting O'Connell v. State, 171 N.J. 484, 488 (2002)). "A court should not 'resort to extrinsic interpretative aids' when 'the statutory language is clear and unambiguous, and susceptible to only one interpretation . . . .'" Ibid. (quoting Lozano v. Frank DeLuca Const., 178 N.J. 513, 522 (2004)). Here, the language of P.L. 2010, c. 2, § 5 (N.J.S.A. 52:14-17.38a) is clear and unambiguous in only extending its effective date when an unexpired collective negotiations agreement existed as of May 21, 2010. No such agreement existed in this case.

Plaintiff's argument also fails because the arbitrator's continuing jurisdiction over disputed language in this case demonstrates that the parties had not reached a final collective negotiations agreement, even a compelled one. A final award as to all terms of a new agreement had not been imposed as of May 21, 2010, by the compulsory arbitration process. Not until December 21, 2010, did the arbitrator issue a decision resolving remaining disputes about the language of an agreement. The borough then appealed that decision to PERC. Whether or not the appeal was of any consequence for purposes of the issue on this appeal, a final collective negotiations agreement compelled by a binding arbitration award did not exist at the time the new legislation took effect.

The Chancery Division correctly held that the borough was required by N.J.S.A. 52:14-17.38a to deduct 1.5% of employees' base salary for health care coverage beginning on May 21, 2010.


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