October 1, 2012
IN THE MATTER OF THE COUNTY OF MERCER AND THE MERCER COUNTY PROSECUTOR'S OFFICE, APPELLANTS,
PROSECUTOR'S DETECTIVES AND INVESTIGATORS PBA LOCAL 339 AND PROSECUTOR'S SUPERIOR OFFICERS ASSOCIATION, RESPONDENTS.
On appeal from the New Jersey Public Employment Relations Commission, Docket Nos. IA-2010-069 and IA-2010-070.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 11, 2012
Before Judges Waugh and St. John.
Appellants County of Mercer and the Mercer County Prosecutor's Office (Prosecutor) (collectively Mercer County)*fn1 appeal from the final administrative action of the New Jersey Public Employment Relations Commission (PERC) affirming an interest arbitration award setting the terms of the contracts between the Prosecutor and prosecutor's investigators and detectives, represented by respondent Prosecutor's Detectives and Investigators PBA Local 339, and prosecutor's senior officers, represented by respondent Prosecutor's Superior Officers Association. We affirm.
We discern the following facts and procedural history from the record on appeal. The most recent agreements between the Prosecutor and the two unions expired on December 31, 2009. Although the parties engaged in negotiations for successor agreements, they were unsuccessful.
The unions filed petitions for interest arbitration in February 2010. PERC appointed Joel M. Weisblatt to serve as the arbitrator. The hearing was held in October 2010. Weisblatt issued an eighty-two page decision and award on September 6, 2011.
The award provided as follows:
1. The duration of the contracts shall be from January 1, 2010 through December 31, 2013.
2. (A) The wage rates shall be increased, across-the-board, as follows:
Effective January 1, 2010 - 0.0%
Effective January 1, 2011 - 2.0%
Effective January 1, 2012 - 2.5%
Effective January 1, 2013 - 2.5%
(B) The language of Article 6.3 of the PBA contract shall be amended to reflect the existing past practice that step movement be applied annually on July 1st of each year.
3. The Health Benefits provisions of the contracts shall be modified to expressly provide that the health benefits program shall be consistent with P.L. 2010, c. 2, and with P.L. 2011, c. 78.
4. The Bereavement Days provision of the contracts [Article 8.1 (PBA) and 7.1 (SOA)] shall be amended to add stepmother and stepfather to this list of immediate family members.
5. The existing sentence barring the use of personal days in conjunction with vacation leave shall be deleted from the contracts [Article 8.4 (PBA) and 7.4 (SOA)] and replaced with the following sentence:
Personal days may be taken in conjunction with vacation leave subject to prior Departmental approval.
6. The existing language with respect to Seniority, set forth in Article 11.2 (PBA) and Article 10.2 (SOA) shall be replaced by the following clause:
Seniority will be given preference in layoffs, recall, vacation and scheduling, provided that it is expressly understood that the Prosecutor has the authority, as a matter of sole discretion, to determine exceptions to the use of seniority based on personnel needs relating to specific skill sets, experience and/or specialized training. Such discretion shall not be unreasonably exercised.
7. All proposals not specifically addressed in the Award herein are denied due to the absence of sufficient evidence to support their implementation. The prior contracts shall remain in full force and effect except as modified herein or by the express agreement of the parties.
Mercer County appealed the award to PERC. It focused its appeal on two issues: the amount of the wage increases and the duration of the award, which was four years rather than the three years sought by the County. PERC affirmed the award in a twelve-page decision dated October 14, 2011. This appeal followed.
On appeal, Mercer County argues that PERC's affirmance of the award was arbitrary and capricious. The County argues that PERC should have vacated the award based on what it characterizes as Weisblatt's failure properly to consider or give appropriate weight to four of the nine factors set forth in N.J.S.A. 34:13A-16(g).
The Legislature has specifically mandated interest arbitration to resolve collective bargaining disputes between public employers and law enforcement employees, recognizing the "unique and essential duties" those employees perform, the "life threatening dangers [they] regularly confront" and the importance of maintaining the "high morale" of these employees. N.J.S.A. 34:13A-14(a). The same statute, however, also recognizes the importance of giving "all due consideration to the interests and welfare of the taxpaying public." N.J.S.A. 34:13A-14(b).
When a public employer and a law enforcement agency reach an impasse, the dispute is resolved by an arbitrator, who hears the dispute and crafts the terms of a new agreement. See N.J.S.A. 34:13A-16(d). Either party may appeal the arbitrator's award to PERC, which in turn "may affirm, modify, correct or vacate the award or may, at its discretion, remand the award to the same arbitrator or to another arbitrator, selected by lot, for reconsideration." N.J.S.A. 34:13A-16(f)(5)(a). In deciding an interest arbitration, the arbitrator must consider nine factors, as follows:
The arbitrator shall decide the dispute based on a reasonable determination of the issues, giving due weight to those factors listed below that are judged relevant for the resolution of the specific dispute. In the award, the arbitrator or panel of arbitrators shall indicate which of the factors are deemed relevant, satisfactorily explain why the others are not relevant, and provide an analysis of the evidence on each relevant factor; provided, however, that in every interest arbitration proceeding, the parties shall introduce evidence regarding the factor set forth in paragraph (6) of this subsection and the arbitrator shall analyze and consider the factors set forth in paragraph (6) of this subsection in any award:
(1) The interests and welfare of the public. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by [the Local Budget Law, N.J.S.A. 40A:4-1 to -89].
(2) Comparison of the wages, salaries, hours, and conditions of employment of the employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of other employees performing the same or similar services and with other employees generally:
(a) In private employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator's consideration.
(b) In public employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator's consideration.
(c) In public employment in the same or similar comparable jurisdictions, as determined in accordance with [N.J.S.A. 34:13A-16.2]; provided, however, that each party shall have the right to submit additional evidence concerning the comparability of jurisdictions for the arbitrator's consideration.
(3) The overall compensation presently received by the employees, inclusive of direct wages, salary, vacations, holidays, excused leaves, insurance and pensions, medical and hospitalization benefits, and all other economic benefits received.
(4) Stipulations of the parties.
(5) The lawful authority of the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by [the Local Budget Law].
(6) The financial impact on the governing unit, its residents, the limitations imposed upon the local unit's property tax levy pursuant to [N.J.S.A. 40A:4-45.45], and taxpayers. When considering this factor in a dispute in which the public employer is a county or a municipality, the arbitrator or panel of arbitrators shall take into account, to the extent that evidence is introduced, how the award will affect the municipal or county purposes element, as the case may be, of the local property tax; a comparison of the percentage of the municipal purposes element or, in the case of a county, the county purposes element, required to fund the employees' contract in the preceding local budget year with that required under the award for the current local budget year; the impact of the award for each income sector of the property taxpayers of the local unit; the impact of the award on the ability of the governing body to (a) maintain existing local programs and services, (b) expand existing local programs and services for which public moneys have been designated by the governing body in a proposed local budget, or (c) initiate any new programs and services for which public moneys have been designated by the governing body in a proposed local budget.
(7) The cost of living.
(8) The continuity and stability of employment including seniority rights and such other factors not confined to the foregoing which are ordinarily or traditionally considered in the determination of wages, hours, and conditions of employment through collective negotiations and collective bargaining between the parties in the public service and in private employment.
(9) Statutory restrictions imposed on the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by [N.J.S.A. 40A:4-45.45].
In this appeal, Mercer County focuses on the following statutory provisions: the interests and welfare of the public factor, subsection (g)(1); the lawful authority factor, subsection (g)(5); the financial impact factor, subsection (g)(6); and the statutory restrictions factor, subsection (g)(9). The County's primary focus concerns the relationship between the award and the cap on property tax increases referred to directly in subsections (g)(6) and (9), and indirectly in subsections (g)(1) and (5). See N.J.S.A. 40A:4-45.45. However, the County conceded at oral argument that, because of the relatively small number of employees involved, the award itself will not cause a cap problem and that it was not an "illegal" award. Instead, the County expressed concern that the award could be used to justify other wage settlements that could create a cap problem.
While the arbitrator need not rely on all of the statutory factors in fashioning the award, the arbitrator must at least consider all of the factors and explain why any factor not relied upon is not relevant. This specific statutory requirement reflects earlier decisional law from the Supreme Court:
[A]n arbitrator need rely not on all factors, but only on those that the arbitrator deems relevant. An arbitrator should not deem a factor irrelevant, however, without first considering the relevant evidence. An arbitrator who requires additional evidence may request the parties to supplement their presentations. . . . [H]owever, the arbitrator need not require the production of evidence on each factor. . . . Such a requirement might unduly prolong a process that the Legislature designed to expedite collective negotiations with police and fire departments.
Whether or not the parties adduce evidence on a particular factor, the arbitrator's opinion should explain why the arbitrator finds that factor irrelevant. Without such an explanation, the opinion and award may not be a "reasonable determination of the issues." N.J.A.C. 19:16-5.9. Neither the parties, the public, nor a reviewing court can ascertain if the determination is reasonable or if the arbitrator has given "due weight" to the relevant factors.
. . . A reasoned explanation along those lines should satisfy the requirement for a decision based on "those factors" that are "judged relevant." Also, such an explanation should satisfy the requirement that the arbitrator "give due weight" to each factor. Anything less could contravene the Act's provision for vacating an award "for failure to apply the factors specified in subsection g. . . . ." N.J.S.A. 34:13A-16f(5). In sum, an arbitrator's award should identify the relevant factors, analyze the evidence pertaining to those factors, and explain why other factors are irrelevant.
[Hillsdale PBA Local 207 v. Borough of Hillsdale, 137 N.J. 71, 83-85 (1994) (citations omitted).] In regulations adopted to implement N.J.S.A. 34:13A-16(g), PERC likewise requires arbitrators to consider and explain all of the subsection (g) factors.
N.J.S.A. 34:13A-16(g) identifies eight*fn2
factors that an interest arbitrator must consider in reviewing the parties' proposals. The arbitrator must indicate which of the factors listed in that subsection are deemed relevant; satisfactorily explain why the others are not relevant; and provide an analysis of the evidence on each relevant factor.
Our "scope of review of PERC decisions reviewing arbitration [awards] is sensitive, circumspect and circumscribed. PERC's decision will stand unless clearly arbitrary or capricious." Twp. of Teaneck v. Teaneck Firemen's Mut. Benev. Ass'n Local No. 42, 353 N.J. Super. 289, 300 (App. Div. 2002) (citations omitted and emphasis added), aff'd o.b., 177 N.J. 560 (2003).
In turn, in reviewing an arbitrator's decision, PERC follows Hillsdale in determining whether the arbitrator gave due weight to the subsection (g) factors and whether the decision was supported by substantial credible evidence. Cherry Hill Twp., P.E.R.C. No. 97-119, 23 NJPER 287 (¶28131 1997).
In reviewing the parties' challenges to the award, we must determine whether the arbitrator adequately considered the criteria in N.J.S.A. 34:13A-16g and rendered a reasonable determination on the issues in dispute. Our analysis is also informed by Hillsdale; Washington [Twp.] v. New Jersey PBA Local 206, 137 N.J. 88 (1994); and FoX v. Morris Cty. [Policemen's Ass'n PBA 151], 266 N.J. Super. 501 (App. Div. 1993), certif. denied, 137 N.J. 311 (1994).
That standard is consistent with our decision in Teaneck, supra, 353 N.J. Super. at 306, that "PERC's appellate role is to determine whether the arbitrator considered the criteria in N.J.S.A. 34:13A-16(g) governing the issuance of an interest arbitration award and rendered a reasonable determination of the issue or issues at impasse that was supported by substantial evidence in the record."
PERC reviewed each of Mercer County's objections to the award, and determined that they were without merit because the arbitrator had considered and discussed each of the statutory factors and rendered a reasonable decision on the issues in dispute.
The employer objects to two aspects of the award - wages and duration. It asserts that the arbitrator did not properly apply the interest and welfare of the public, financial impact, and the lawful authority of the employer because the arbitrator ignored the evidence of the employer's precarious financial situation that includes increased labor and public safety costs, decreasing revenues and a budget deficit. Further, it asserts that the arbitrator did not adequately explain where the County would get the money to fund the wage increases.
We reject these grounds for appeal. The arbitrator found that his award would not present a problem with respect to the Cap Law limitations on the County's budget as the overall County budget will be reduced from receiving significant health benefit contributions, the incremental costs of the award are low because most members of the unit do not receive increments, and there will be personnel changes as the unit ages. The arbitrator stated:
[T]here is absolutely nothing to indicate that the package awarded herein will present a Cap problem. The evidence of the history of retirements and other personnel changes, with lower cost replacements, provides reason in combination with other factors, to confidently find that these increases present no Cap problems.
[Award at 42.]
The arbitrator reviewed the financial information set forth by the County and found that the cost of each percentage awarded equaled 0.0155% of the total County budget. The employer has not disputed these figures or pointed to any record evidence to establish that the award itself places it outside the cap. Further, the tax levy cap is applied to the County budget as a whole and not to each of its components. Town of Kearny, P.E.R.C. No. 2011-37, 36 NJPER 413 (¶160 2010). We must defer to the arbitrator's expertise and review of the evidence. Since the arbitrator has found that the award will not present a Cap limitation problem, we defer to his judgment.
It is also not the obligation of an interest arbitrator to direct an employer as to how to fund an award. An interest arbitration award is not unreasonable even though an employer may be forced to make economies in order to implement the award. Kearny; [N.J. State Policemen's Benev. Ass'n Local 29] Irvington PBA v. Town of Irvington, 80 N.J. 271, 296 (1979). That is true even where municipal officials must determine whether, and to what extent, police personnel or other employees should be laid off, or whether budgetary appropriations for non-payroll costs should be reduced. [Ibid.] We recognize that any salary increase places pressure on a public employer's cap limitations. However, the employer has not presented any specific evidence or argument for us to conclude that the arbitrator erred in his finding that the award would not present a cap problem.
The employer also argues that the arbitrator did not take into consideration the effect the award will have on other negotiations units and the costs associated with other negotiations. The Associations respond that the evidence did not support this argument as there is no established history of pattern negotiations between the Prosecutor's employees and corrections personnel.
We reject this argument. In discussing his wage award, the arbitrator stated:
The calculations are based upon the two bargaining units that are the parties to this impasse but the judgments made herein are made with the understanding that these two units do not function alone in a vacuum but that they are part of a more complex labor relations structure within an overall County budget.
[Award at 59-60.]
The arbitrator clearly took the effect his award may have on impasses with other County law enforcement units into consideration. We find that he adequately evaluated all the statutory criteria; explained why he gave more weight to some factors and less to others; and issued a comprehensive award that reasonably determined the issues and is supported by substantial credible evidence in the record as to the wage award. The arbitrator only had jurisdiction to decide the impasse on the evidence and record between these parties. He may subjectively consider that there are costs associated to other units in his award, but to consider evidence presented as to other units and for practical purposes - a separate employer -would be outside his authority. Essex Cty., P.E.R.C. No. 2011-92[, 38 NJPER 76 (¶17] 2011).
The employer also objects to the arbitrator's award of a fourth year arguing that it could potentially be damaging to the County's financial well-being. However, the arbitrator found that it was in the public interest to order a four-year contract to provide an opportunity for the employer to face the 2012 and 2013 budgets with knowledge as to personnel costs so that it may construct future budgets with a greater degree of certainty as a three-year agreement would put the parties right back in negotiations next year.
We reject this argument. There is no per se bar to awarding terms and conditions of employment for future years based on the record evidence and current economic trends. We recognize that there can only be limited hard economic data for 2012 and 2013. We have continually held that the collective negotiations process contemplates the parties agreeing to future years even though no one can predict with any assurance the exact budget circumstances a public employer will face in future years. Kearny; City of Asbury Park, P.E.R.C. No. 2011-17, 36 NJPER 323 (¶126 2010). Here, the employer presented volumes of documents and it has not pointed to any particular evidence in the record that requires rejecting the contract term that was awarded.
[P.E.R.C. No. 2012-15, 8-12 (Oct. 14, 2011).] PERC concluded that the arbitrator had appropriately considered each statutory requirement, explained the weight given to it, and reached a reasonable overall determination that was adequately "supported by substantial evidence in the record" as required by Teaneck, supra, 353 N.J. Super. at 306. Having reviewed the County's arguments in light of the arbitrator's decision, the reasons given by PERC for its affirmance, the record on appeal, and the applicable law, we conclude that PERC's affirmance of the award was not "clearly arbitrary or capricious." Having so determined, our standard of review requires us to affirm the decision on appeal. Id. at 300. Affirmed.