July 25, 2013
CITY OF JERSEY CITY, Plaintiff-Appellant,
JERSEY CITY POLICE OFFICERS BENEVOLENT ASSOCIATION (POBA), JERSEY CITY POLICE SUPERIOR OFFICERS ASSOCIATION (PSOA), UNIFORMED FIREFIGHTERS ASSOCIATION OF JERSEY CITY LOCAL 1066, AFL-CIO, CLC (IAFF LOCAL 1066), JERSEY CITY FIRE OFFICERS ASSOCIATION, LOCAL 1064, IAFF, AFL-CIO, CLC IAFF LOCAL 1064, and JERSEY CITY PUBLIC EMPLOYEES, INC., LOCAL 246, Defendants-Respondents.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 9, 2013
On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5352-11.
Terri Keller, Assistant Corporation Counsel, argued the cause for appellant (William Matsikoudis, Corporation Counsel, attorney; Ms. Keller, on the brief).
Stephen B. Hunter argued the cause for respondent Jersey City Police Officers Benevolent Association (POBA) (Detzky & Hunter, LLC, attorneys; Mr. Hunter, of counsel and on the brief).
Lauren Sandy argued the cause for respondent Jersey City Police Superior Officers Association (PSOA) (Loccke, Correia, Limsky & Bukosky, attorneys; Ms. Sandy, of counsel and on the brief).
Paul L. Kleinbaum argued the cause for respondent Uniformed Firefighters Association of Jersey City, Local 1066, IAFF, AFL-CIO, CLC (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Kleinbaum and Genevieve Murphy-Bradacs, on the brief).
Bruce D. Leder argued the cause for respondent Jersey City Fire Officers Association, Local 1064, IAFF, AFL-CIO, CLC (Cohen, Leder, Montalbano & Grossman, attorneys; Mr. Leder, on the brief).
Paul W. Mackey, attorney for respondent Jersey City Public Employees, Inc., Local 246.
Before Judges Sapp-Peterson and Haas.
In this appeal, plaintiff, the City of Jersey City ("Jersey City"), appeals from the trial court order dismissing its declaratory judgment action in which it sought to proceed summarily in the Superior Court, Law Division, to resolve grievances filed by defendants, Jersey City Police Officers Benevolent Association (POBA), Jersey City Police Superior Officers Association (PSOA), the Uniform Firefighters Association Local 1066 (Local 1066), the Jersey City Fire Officers Association Local 1064 (Local 1064), and the Jersey City Public Employees, Inc. Local 246 (Local 246), collectively referred to as "defendants, " with the Public Employees Relations Commission ("PERC"). We affirm, substantially for the reasons expressed by Judge Lawrence Maron in his January 23, 2013 oral opinion.
Beginning in 1973, Jersey City was authorized to provide eligible retired employees with free health care under the State Health Benefits Plan (SHBP). As part of its collective bargaining agreement (CBA) with each defendant, lifetime health benefits were provided to employees who retired with at least twenty-five years of service. In 2007, however, the City withdrew from the SHBP, choosing instead to administer its own health benefits plans for employees, purportedly saving the City approximately seven million dollars in the first year.
Between 2008 and 2010, the City engaged in collective bargaining negotiations with defendants. The new CBAs, as proposed, included the provision in each agreement that would switch all employees from a "traditional plan, " where employees could see any physician and have 80% of the charges covered, to a "direct access plan, " where the provider would pay all expenses except for a $10 co-payment if the employees chose from a network of listed physicians. Coverage for retirees would also switch to the direct access plan, but they had the option of continuing the traditional plan as long as they paid the difference in premiums between the direct access and traditional plans. The change was to be effective October 1, 2011.
Beginning in October 2011, the employee unions filed grievances challenging those sections of their respective CBAs requiring retirees, for the first time, to pay to maintain the traditional plan coverage. In accordance with grievance procedures, the unions filed requests for the appointment of arbitrators.
On October 25, 2011, the City filed a complaint for declaratory relief judgment against defendants, and on November 3, 2011, the City filed a motion to proceed summarily and to fix a trial date. Defendants moved for dismissal of the complaint citing the grievance procedure sections of the CBAs, which state that the unions have the right to submit grievances to an arbitrator appointed by PERC. The trial court declined to exercise original jurisdiction, concluding that jurisdiction was properly before PERC at that point. The court concluded that PERC had primary jurisdiction over the matter and dismissed the complaint without prejudice. The present appeal ensued.
On appeal, the City contends the trial court improperly declined to exercise original jurisdiction over an issue that implicates a question of law for resolution by the court, and that municipalities are authorized to provide retiree health benefits but cannot be bound to provide a certain level of benefits in perpetuity, and the underlying facts are distinguishable from those cases where PERC has properly asserted jurisdiction.
We disagree. In light of the procedural posture of the case at the time the matter proceeded before the trial court, dismissal of the City's complaint, without prejudice, was appropriate. We therefore decline to address the merits of plaintiff's arguments.
The facts in the present appeal are not in dispute. We are called upon solely to render a legal determination. Accordingly, we review the legal issues implicated in this appeal de novo and owe no special deference to the motion judge's "construction of the legal principles." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (holding that "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference").
When questions of primary jurisdiction arise, a court will decline original jurisdiction and refer to the "appropriate body those issues which, under a regulatory scheme, have been placed within the special competence of an administrative body." Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 269 n. 1 (1978). Primary jurisdiction allows an agency to apply its expertise to questions that require interpretation of its statutory and regulatory mandates and also promotes uniformity in the interpretation and application of an agency action. Id . at 159– 60.
The New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -39, confers authority upon PERC to determine whether a particular subject falls within the scope of collective negotiations. N.J.S.A. 34:13A-5.4(d) provides in pertinent part "that the commission shall at all times have the power and duty, upon the request of any public employer or majority representative, to make a determination as to whether a matter in dispute is within the scope of collective negotiations." Thus, "PERC is the forum for the initial determination of whether a matter in dispute is within the scope of collective negotiations." State v. State Supervisory Employees Ass'n, 78 N.J. 54, 83 (1978). In other words, PERC has "primary jurisdiction to make a determination on the merits of the question of whether the subject matter of a particular dispute is within the scope of collective negotiations." Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978).
PERC has adopted regulations outlining the procedures for determining whether a dispute is a matter within the scope of collective negotiations. See N.J.A.C. 19:13-1.1 to -11. Under these regulations, either a public employer or public employee representative "may initiate scope of negotiation proceedings by filing with [PERC] . . . a petition for [a] scope of negotiations determination [.]" N.J.A.C. 19:13-2.1.
Here, in addition to seeking declaratory relief in Superior Court, the City also filed a scope of negotiations petition with PERC that was pending at the time of the January 23, 2012 oral argument on defendants' motions. While this appeal was pending, PERC, on November 19, 2012, issued its decision concluding that the grievances "may be submitted to binding arbitration."
In contending the motion judge erred in deferring to PERC, the City primarily relies upon our decision in Petersen v. Township of Raritan, 418 N.J.Super. 125 (App. Div. 2011). There, Raritan Township similarly discontinued its traditional health benefits plan in favor of a new system, and required all retirees to pay premiums if they wanted to remain in the traditional plan. Id . at 128-29. While the City is correct that the factual predicate and relief sought in that case mirrors the facts and relief sought by defendants in the present matter, the cases are distinguishable in one key area. Peterson was an action brought by an individual, rather than an action commenced by a bargaining unit on behalf of its members, as are the circumstances here. Id . at 128. On the other hand, the City and defendants are signatories to a collective bargaining agreement whose terms include provisions for arbitration of grievances. The City does not dispute the existence of the contractual obligation to arbitrate, but urges that the interpretation of the CBA is a matter of contract law for resolution by the court. Judge Maron did not address this issue. Rather, he recognized PERC's statutory mandate, in the first instance to determine whether the dispute at issue was within the scope of collective negotiations. N.J.S.A. 34:13A-5.4(d).
Our Court, in Ridgefield, supra, long ago recognized the distinct roles of the courts and PERC in resolving public employer/public employee grievance disputes and noted that it "may be necessary to go to both PERC and the Superior Court in order to completely resolve a disagreement concerning the arbitrability of a particular dispute. 78 N.J. at 153. The Court stated that PERC will determine whether the "subject matter of a particular dispute is within the scope of collective negotiations." Id . at 154. However,
where a party resists an attempt to have a dispute arbitrated, it may go to the Superior Court for a ruling on the issue of its contractual obligation to arbitrate. However, the issue of contractual arbitrability may not be reached if the threshold issue of whether the subject matter of the grievance is within the scope of collective negotiations is contested. In that event, a ruling on that issue must be obtained from PERC.
[Id. at 155.]
The Court stated that the preferable procedure is to seek relief before PERC on the question of whether an issue is within the scope of collective negotiations. Ibid. Where an issue is within the scope of collective negotiations, and a court determines that the agreement contains a valid arbitration clause, the matter must proceed to arbitration. Ibid.
Here, the City launched a challenge to defendants' grievances in two forums. It filed its declaratory judgment action in Superior Court and concurrently filed its scope of negotiations petition with PERC. Judge Maron, in dismissing the City's complaint without prejudice merely determined that the court would "defer taking any further action until such time as PERC makes its determinations."
The motion judge's approach was consistent with the dictates of Ridgefield. Ibid. PERC having since determined that the issues raised in the grievances may be submitted to binding arbitration, relief in the Superior Court for a "ruling on the issue of its contractual obligation to arbitrate, " is not precluded. Ridgefield, supra, 78 N.J. At 155.