May 10, 2012
TRENTON EDUCATIONAL SECRETARIES ASSOCIATION, PLAINTIFF-APPELLANT,
TRENTON BOARD OF EDUCATION, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2646-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 25, 2012
Before Judges Fuentes and J. N. Harris.
This appeal involves the arbitration of a public-sector labor dispute. Plaintiff Trenton Educational Secretaries Association (the Association) appeals from the Law Division's vacation of an arbitration award obtained against the Trenton Board of Education (the Board) and the court's concomitant refusal to confirm the award in the Association's favor. We reverse both prongs of the Law Division's determination and remand for the entry of a judgment confirming the arbitrator's award.
The events that are the subject of the parties' dispute occurred over a one-year span beginning in July 2007. At that time, the Association and the Board were contractually bound to the terms of a collectively negotiated agreement (the Agreement) that began on July 1, 2005, and ended on June 30, 2009.
Article 3 of the Agreement, entitled "Grievance Procedure," outlines a four-step procedure to resolve disputes over contractual interpretation, application, and violation. Step 4 of the process provides that parties who remain dissatisfied with the outcome of the previous steps are permitted to submit their grievance to an arbitral forum. The Agreement notes the following:
The decision of the arbitrator shall be final and binding upon the parties and the arbitrator shall be selected from the American Arbitration Association and adhere to their [sic] rules and procedures. The arbitrator shall limit himself to the issue submitted to him and shall consider nothing else. He can add nothing to nor subtract anything from this Agreement.
Prior to July 2007, the registration of students in the Trenton school district was decentralized and conducted at local schools. The process, including interaction with students and their parents or guardians, was performed by secretaries assigned to such localities. In July 2007, the Board changed the way it administrated registrations by creating the Office of Central Registration.
Generally, local school secretaries were designated as Senior Secretaries or Administrative I Secretaries, and compensated pursuant to the Agreement's Salary Guides.*fn1 When the Office of Central Registration was created, the Board contemplated the cessation of all registration activities by secretaries at individual schools and the Board assigned two Administrative II Secretaries to perform the tasks necessary to that office.
However, on September 10, 2007, due to the large volume of work being performed at the newly-created Office of Central Registration, Dr. David S. Weathington, the Board's Assistant Superintendent, Division of Student Services, ordered local school-based secretaries to assist with the new-fangled registration process. He wrote a memorandum -- addressed to school principals and secretaries -- stating, in part, the following:
Due to the volume of work at central registration, I am asking you to input information into SASI*fn2 during the day hours effective immediately.
In compliance with Dr. Weathington's directive, several Senior Secretaries and Administrative I Secretaries worked to input data into the Board's SASI. Those secretaries were not paid the salary commensurate with an Administrative II Secretary even though it was claimed that the work they were now performing was that of the higher category of secretary.
On December 14, 2007, the Association filed its initial grievance against the Board seeking relief on behalf of "the school secretaries who have always done registrations in the schools and apparently should have been working in a higher category level of secretary." Specifically, the Association demanded that [s]ecretaries in the school district who have previously been doing registrations be compensated at the higher level of an Administrative [II] Secretary  on their step of the salary guide. This compensation should be retroactive to their starting date until the date they are relieved of these duties.
One year later, on December 22, 2008, after exhausting the first three steps of the Agreement's grievance procedure without significant success,*fn3 the Association filed a demand for arbitration pursuant to the Agreement. Two testimonial hearings were conducted in April and June 2009. On September 5, 2009, after permitting the parties to argue their respective positions through written submissions, the arbitrator rendered a ten-page written award.
The arbitrator canvassed the Agreement together with the testimonial and documentary evidence presented, including an unrebutted chart prepared by Association Vice President Ann Sciarrotta (the Sciarrotta Chart) listing the names of the secretaries involved and the months when they performed registration duties. Thereafter the arbitrator made the following relevant findings:
The Association has shown that Administrative I and Senior Secretaries were assigned by Mr. [sic] Weathington to perform the work of Administrative II Secretaries due to an unexpected increase in the number of registrations. Mr. [sic] Weathington's directive has never been withdrawn. The Association has shown that the school secretaries continued to do the work as assigned from September 2007 to July 2008 when Dr. [Carolyn] Gibson took control of Central Registration. The Board has offered no proof that the work assignment was rescinded during this time period and its failure to call Mr. [sic] Weathington must carry an adverse inference to their [sic] position.
Therefore, I find that the Board did violate the [Agreement] by requiring Senior and Administrative I secretaries to perform the duties of Administrative II secretaries without additional compensation.
Accordingly, the arbitrator ordered the Board to compensate the affected secretaries pursuant to the Agreement's Article 20(B)*fn4 "at the employee's same step on the appropriate guide to the position being filled, prorated from the initial date through the date on which he is relieved."
On November 30, 2009, the Association filed a summary action -- by means of a verified complaint and order to show cause pursuant to Rule 4:67-1(a) and -2(a) -- seeking to confirm the arbitrator's award and enter judgment thereon. On January 4, 2010, the Board filed an answer and counterclaim, which sought to vacate the award. Notwithstanding N.J.S.A. 2A:24-7's express provision permitting summary actions, the Law Division refused to proceed in a summary fashion and entered an order on January 29, 2010, as follows:
ORDERED that Plaintiff Trenton Educational Secretaries Association's Order to Show Cause is DENIED for reasons stated on the record.
The court reasoned:
[O]n a procedural basis I'm going to deny the order to show cause. It's without any prejudice to you filing for summary judgment and we'll deal with it based on summary judgment burden of proof standard. It may not change much from your perspective, but I do think that in this case where there doesn't appear to be -- nobody's out of a job, there doesn't seem to be any immediate or irreparable harm. And this comes down to money damages. And while I'm not suggesting that we protract this and cause the taxpayers a lot of time and expense I also need to follow the rules and make sure that we use the proper procedures and order to show cause only for those times when it's really appropriate.
More than one year passed during which the parties engaged in fact discovery.*fn5 Then, in May 2011, the parties filed and argued cross-motions for summary judgment. The motion court granted the Board's motion, denied the Association's motion and "reverse[d] the arbitrator's award," finding that the arbitrator made mistakes of fact and violated public policy by "essentially chang[ing] the . . . job description . . . retroactively without any negotiations." This appeal followed.
We first note the inappropriate and overlong procedural journey taken by this action. The Legislature contemplated the swift confirmation, vacation, modification, or correction of arbitration awards. In pertinent part, the statute provides:
A party to the arbitration may, within 3 months after the award is delivered to him, unless the parties shall extend the time in writing, commence a summary action in the court aforesaid for the confirmation of the award or for its vacation, modification or correction. Such confirmation shall be granted unless the award is vacated, modified or corrected. [N.J.S.A. 2A:24-7 (emphasis supplied).]
Rule 4:67-1(a) further endorses expedited treatment by its recognition that a summary action is appropriate "to all actions in which the court is permitted . . . by statute to proceed in a summary manner," and Rule 4:67-2(a) provides that such an action may be commenced by an order to show cause demanding "why final judgment should not be rendered for the relief sought." Furthermore, Rule 4:67-5 requires, with limited exceptions, that "the court shall try the action on the return day, or on such short day as it fixes."
In light of these provisions, the Law Division's conversion of the matter into a plenary action because "there [didn't] seem to be any immediate or irreparable harm" garners no support in the law. The order to show cause only sought confirmation of the arbitration award; it did not seek injunctive relief. The court's reservation that "[i]t's without any prejudice to [the Association] filing for summary judgment" negated the legislative preference for prompt resolution of arbitration matters, but also ignored the jurisprudential differences between a summary proceeding and a summary judgment motion. See O'Connell v. N.J. Mfrs. Ins. Co., 306 N.J. Super. 166, 172 (App. Div. 1997) (recognizing differences between the procedural devices), appeal dismissed, 157 N.J. 537 (1998).
Moreover, permitting the parties to engage in extended discovery of fact issues was counterproductive to the goal of arbitration to be a forum "of providing final, speedy and inexpensive settlement of disputes." Barcon Assocs. v. Tri-County Asphalt Corp., 86 N.J. 179, 187 (1981). Arbitration serves as a substitute, and not a catalyst, for litigation and is designed primarily to avoid the complex, time-consuming, and costly alternative of litigation, all of which were lost by the process invoked by the Law Division. In arbitration, with abbreviated discovery and expansive treatment of evidence, parties are engaged in simple, inexpensive, and expeditious dispute resolution. Notwithstanding the Association's reasonable efforts, those benefits were thwarted by judicial misguidance.
An arbitration award is presumed valid and judicial review of an arbitration award is strictly limited. Del Piano v. Merrill Lynch, 372 N.J. Super. 503, 510 (App. Div. 2004), certif. granted, 183 N.J. 218, appeal dismissed, 195 N.J. 512 (2005). Consequently, to ensure "finality, as well as to secure arbitration's speedy and inexpensive nature, there exists a strong preference for judicial confirmation of arbitration awards," New Jersey Turnpike Authority v. Local 196, I.F.P.T.E., 190 N.J. 283, 292 (2007) (internal citations and quotations omitted), and "the arbitrator's decision is not to be cast aside lightly." Bd. of Educ. of Alpha v. Alpha Educ. Ass'n., 190 N.J. 34, 42 (2006). Accordingly, a party "seeking to vacate [an arbitration award] bears a heavy burden." Del Piano, supra, 372 N.J. Super. at 510. On appeal from a trial court's decision vacating an arbitration award, our review is de novo, that is, "'[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Id. at 507 (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Moreover, courts have engaged in an "extremely deferential review" when a party to a collectively negotiated agreement has sought to vacate an arbitrator's award. Policeman's Benevolent Ass'n., Local No. 11 v. City of Trenton, 205 N.J. 422, 428 (2011). Thus, "the party opposing confirmation ha[s] the burden of establishing that the award should be vacated pursuant to N.J.S.A. 2A:24-8." Twp. of Wyckoff v. PBA Local 261, 409 N.J. Super. 344, 354 (2009) (citation omitted).
"In the public sector, an arbitrator's award will be confirmed 'so long as the award is reasonably debatable.'" Linden Bd. of Educ. v. Linden Educ. Ass'n ex rel. Mizichko, 202 N.J. 268, 276 (2010) (quoting Middletown Twp. PBA Local 124 v. Twp. of Middletown, 193 N.J. 1, 11 (2007)). Under this standard, we "may not substitute [our] judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's interpretation." Linden, supra, 202 N.J. at 277 (quoting N.J. Transit Bus Operations, Inc. v. Amalgamated Transit Union, 187 N.J. 546, 554 (2006)).
In addition to the foregoing, the statutory grounds upon which a reviewing court may vacate an arbitration award are set legislatively forth in N.J.S.A. 2A:24-8:
a. Where the award was procured by corruption, fraud or undue means;
b. Where there was either evident partiality or corruption in the arbitrators, or any thereof;
c. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause being shown therefor, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;
d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.
Applying the aforesaid principles and statutory standards, we are satisfied that the arbitrator's interpretation of the Agreement was both plausible and reasonably debatable. In ruling, the arbitrator looked to the totality of the evidence presented and integrated it with a logical understanding of the Agreement. We are unable to agree with the Law Division that a judicial unwinding of the award is either necessary or appropriate.
The Board argues that the arbitrator's award (1) was procured by undue means because it constituted a clear mistake of undisputed fact, (2) violated public policy, and (3) exceeded the scope of the arbitrator's powers under the Agreement. The motion court's ruling was narrower. It held that the arbitration award should be vacated because it was procured through undue means pursuant to N.J.S.A. 2A:24-7(a) due to errors of fact "apparent on the face of the award itself." One such error of fact was the arbitrator's reliance upon the Sciarrotta Chart to support the Agreement's requirement of performing "more than twenty (20) working days" as "a higher level secretary" to enjoy an increase in salary. The other putative error was the arbitrator's conclusion that the affected secretaries "were doing out of title duties," which the motion court found was mistaken because "registration was part of an Admin[istrative] I and Senior secretary's duties."
Also, the court held that pursuant to State, Office of Employee Relations v. Communications Workers of America, AFLCIO, 154 N.J. 98, 109-11 (1998) ("[w]hen reviewing an arbitrator's interpretation of a public-sector contract, in addition to determining whether the contract interpretation is reasonably debatable, the court must also ascertain whether the award violates law or public policy"), the award was contrary to public policy because it "change[d] the . . . job description . . . retroactively without any negotiations."
Courts have interpreted undue means as a "clearly mistaken view of fact or law." Local Union 560, I.B.T. v. Eazor Express, Inc., 95 N.J. Super. 219, 227-28 (App. Div. 1967). This "does not include situations, . . . where the arbitrator bases his decision on one party's version of the facts, finding that version to be credible." Local No. 153, Office & Prof'l Employees Int'l Union v. Trust Co. of N.J., 105 N.J. 442, 450 n.1 (1987). Rather, the mistake of fact must appear on the face of the award or by the statement of the arbitrator, PBA Local 160 v. Township of North Brunswick, 272 N.J. Super. 467, 474 (App. Div.), certif. denied, 138 N.J. 262 (1994), and be so gross as to suggest fraud or corruption. Trentina Printing, Inc. v. Fitzpatrick & Assoc., Inc., 135 N.J. 349, 358 (1994).
There is no mistake of fact, much less one so gross as to justify overturning the arbitration award. The arbitrator recognized that high-level secretarial staffing of the Office of Central Registration was required for its effective operation. When the press of initial business overwhelmed the central office's complement of secretaries, the Board enlisted experienced personnel (the local-based secretaries) for a several-months-long rescue effort. There was sufficient evidence in the record, including the Sciarrotta Chart, to support the arbitrator's conclusion that the work performed by local-based secretaries was at the level of an Administrative II Secretary and satisfied the twenty-hour rule. Ordering pay parity for that limited time period does no harm to the Agreement's provisions controlling promotions and does not rewrite the Agreement to give the Association a better deal than it bargained for.
In like vein, we disagree with the Law Division's view of the award's impact on public policy. The "public policy exception requires 'heightened judicial scrutiny' when an arbitration award implicates 'a clear mandate of public policy[.]'" N.J. Tpk. Auth., supra, 190 N.J. at 294 (quoting Weiss v. Carpenter, Bennett & Morrissey, 143 N.J. 420, 443 (1996)). This standard will only be met in "rare instances." Ibid. (emphasis omitted).
The Court has explained:
Assuming that the arbitrator's award accurately has identified, defined, and attempted to vindicate the pertinent public policy, courts should not disturb the award merely because of disagreements with arbitral fact findings or because the arbitrator's application of the public policy principles to the underlying facts is imperfect. If the correctness of the award, including its resolution of the public policy question, is reasonably debatable, judicial intervention is unwarranted. The judiciary's duty to provide an enhanced level of review of such arbitration awards is discharged by a careful scrutiny of the award, in the context of the underlying public policy, to verify that the interests and objectives to be served by the public policy are not frustrated and thwarted by the arbitral award.
However, if the arbitrator's resolution of the public-policy question is not reasonably debatable, and plainly would violate a clear mandate of public policy, a court must intervene to prevent enforcement of the award. In such circumstances, judicial intervention is necessary because arbitrators cannot be permitted to authorize litigants to violate either the law or those public-policy principles that government has established by statute, regulation or otherwise for the protection of the public. [Weiss, supra, 143 N.J. at 443.]
Importantly, in determining whether the public policy exception applies, we concentrate on the award, not the conduct that gave rise to the dispute. N.J. Tpk. Auth., supra, 190 N.J. at 297.
"[F]or purposes of judicial review of labor arbitration awards, public policy sufficient to vacate an award must be embodied in legislative enactments, administrative regulations, or legal precedents," not "amorphous considerations" of the public's well-being. Id. at 295. We find nothing but amorphous considerations to support the motion court's public policy conclusion. The award neither granted promotions to secretaries nor did it change any employee's job description. Rather, it simply analyzed the Board's purposeful decision of transferring registration functions to higher-level secretaries, and then appropriately compensated lower-level secretaries when they were commandeered to perform at the newly-designated higher level. This does not contravene public policy; it merely honors the contractual promises the Board made to its secretaries in Article 20(B) of the Agreement.
Finally, we find no merit in the Board's arguments that the arbitrator exceeded his powers and went beyond the scope of the Agreement under N.J.S.A. 2A:24-8(d). "Whether in the public or private sector, it is the agreement between the parties that essentially empowers the arbitrator and his function is to comply with the authority given him by the parties." PBA Local 160, supra, 272 N.J. Super. at 476 n.5. In other words, because an arbitrator's powers are derived from the express terms of an agreement to arbitrate, he exceeds those powers by disregarding the terms of that agreement. See Office of Emp. Relations, supra, 154 N.J. at 112. Thus, while "'arbitration is traditionally described as a favored remedy, it is, at its heart, a creature of contract.'" Fawzy v. Fawzy, 199 N.J. 456, 469 (2009) (quoting Kimm v. Blisset, LLC, 388 N.J. Super. 14, 25 (App. Div. 2006), certif. denied, 189 N.J. 428 (2007)).
Here, the parties expressly agreed to arbitrate, as a fourth step, all grievances emanating from the Agreement "based upon the interpretation, application, or violation of th[e] Agreement." This is unquestionably what the arbitrator in this instance did. By arguing that the award is based on the theory that the arbitrator promoted secretaries or gave them unwarranted raises, the Board overstates and mischaracterizes the rather limited scope of the relief granted by the award. Simply put, the award merely fairly (and contractually) compensates lower-level secretaries for doing work that their employer designated as functions of higher level secretaries. Not only is this outcome reasonably debatable, it appears equitably appropriate under the terms of the Agreement.
Reversed and remanded for the entry of a judgment confirming the arbitrator's award of September 5, 2009.