On appeal from the Final Administrative Action of the Civil Service Commission.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 27, 2011
Before Judges Messano, Yannotti and Espinosa.
The Communication Workers of America, AFL-CIO, the American Federation of State, County, and Municipal Employees, AFL-CIO, Council 1, and Local 195, International Federation of Professional and Technical Engineers, AFL-CIO (collectively, the Unions), appeal the Civil Service Commission's (CSC) adoption of an amendment to N.J.A.C. 4A:6-1.2, the regulation governing vacation leave for State workers. The amendment authorized the use of paid leave bank days (PLB days), which were created by memoranda of agreement (MOAs) between the Unions and the Governor's Office of Employee Relations (the State). The negotiated MOAs were intended to avoid layoffs and compensate State employees for wages lost during a mandatory furlough period and the deferral of scheduled wage increases. We provide some background leading up to the adoption of the amended regulation.
In April 2009, the CSC adopted emergency rule N.J.A.C. 4A:8-1.1A, permitting temporary layoffs for economy and efficiency. Several unions immediately challenged the regulation, and in an unpublished opinion, we upheld the CSC's ability to promulgate the emergency rule. In re Emergency Temporary Layoff Rule, Nos. A-3636-08, A-3627-08, A-3656-08, A-3657-08 (App. Div. Apr. 17, 2009). We concluded that adoption of the rule "complied with the statutory requirements" of N.J.S.A. 52:14B-4(c).*fn1 Id. (slip op. at 3). We also held that the State could "lay off all employees in a layoff unit," but declined to address whether "staggered layoffs" -- "[a] layoff of each employee in a layoff unit for one or more [workdays] over a defined period" -- could be implemented by regulation. Id. (slip op. at 4-5). We referred that issue to the Public Employment Relations Commission (PERC). Id. (slip op. at 4).
PERC subsequently declined to restrict the regulation's scope. Negotiations began between the Unions and the State to avoid widespread layoffs.
In June 2009, those negotiations were finalized in a series of MOAs, which stated purposes were to "facilitate the accomplishment of vital government policies and objectives, including the avoidance of layoffs, the delivery of needed public services, and the achievement of substantial budgetary savings." The MOAs alleviated the need for the emergency regulation, and the State and the Unions agreed to request its rescission by the CSC. Each MOA provided that "if any provision of th[e] MOA require[d] legislation or regulation to be effective, the parties w[ould] jointly seek the enactment of such legislation or the promulgation of such regulations."
The MOAs included deferral to January 2011 of "[t]he 3.5% across-the-board increase to annual base salaries" scheduled for 2009 under the then-current collective bargaining agreements. The Unions also agreed to the use by their employees of ten unpaid furlough days prior to July 1, 2010.
In exchange, the State agreed there would be no layoffs during the period of wage deferral. The State also agreed to establish a "Paid Leave Bank" for each Union employee. Each employee was credited with one PLB day on July 1, 2009, one additional PLB day for every two days of furlough used, and one PLB day on June 30, 2010. In other words, an employee using ten furlough days would be credited with seven PLB days.
The PLB days will be maintained separate and apart from banks of other paid leave and there will be no limitations on the carry over of days in the PLBs. Specifically, the carry over restrictions that are applicable to paid vacation and administrative leave days will not be applicable to the PLBs.
On August 5, 2009, "[i]n an effort to provide parity for as many State employees as possible," the CSC issued an order adopting a pilot program for unrepresented State employees. The pilot program effectuated a Paid Leave Bank for these employees that mirrored those established by the MOAs. It provided that "[u]nlike the carryover restriction[s] for vacation leave and administrative leave" found in applicable statutes and regulations, "there w[ould] be no limitations on the carryover of days credited to the Paid Leave Bank." The CSC believed the pilot program was "necessary since there [was] no statutory or regulatory authority for the provision of unpaid leave of this nature or for the establishment of additional leave days other than those . . . statutorily prescribed." Because no regulation authorized the establishment of PLB days, the CSC indicated that "rules w[ould] be promulgated to govern the specifics regarding the administration of Paid Leave Banks."
On May 19, 2010, the CSC filed a proposed amendment to N.J.A.C. 4A:6-1.2, the vacation leave regulation, "adding a new subsection (l) to codify the PLB program." 42 N.J.R. 1116(a) (June 21, 2010). The proposed amendment categorized PLB days as vacation days subject to the restrictions of N.J.S.A. 11A:6-2(f) ("Vacation not taken in a given year because of business demands shall accumulate and be granted during the next succeeding year only."). In salient part, the proposed regulation provided:
These additional paid leave days may be used beginning July 1, 2010 through June 30, 2011, subject to operational needs. . . . If not taken in a given year because of business demands, these days shall accumulate and be granted during the next succeeding year only. In no ...