IN THE MATTER OF COUNTY OF ATLANTIC, Respondent-Appellant, and PBA LOCAL 243, Charging Party, and PBA LODGE 34 and PBA LOCAL 77, Charging Parties-Respondents. IN THE MATTER OF TOWNSHIP OF BRIDGEWATER, Petitioner-Appellant, and PBA LOCAL 174, Respondent-Respondent.
March 13, 2017
certification to the Superior Court, Appellate Division,
whose opinion is reported at 445 N.J.Super. 1 (App. Div.
M. Bernstein argued the cause for appellant Township of
Bridgewater (Eric M. Bernstein & Associates, attorneys;
Eric M. Bernstein, of counsel and on the brief, and Philip G.
George, on the briefs).
T. McMahon argued the cause for appellant New Jersey Public
Employment Relations Commission (Robin T. McMahon, General
Counsel, attorney; Robin T. McMahon and Don Horowitz, Senior
Deputy General Counsel, on the briefs).
A. Rapuano argued the cause for appellant County of Atlantic
(Archer & Greiner, attorneys; David A. Rapuano, of
counsel and on the briefs, and Ashley M. Lebrun, on the
M. Mets argued the cause for respondent PBA Local 174 (Mets
Schiro McGovern & Paris, attorneys; James M. Mets, of
counsel and on the briefs, and David M. Bander, on the
Mintz argued the cause for respondents FOP Lodge 34 and PBA
Local 77 (Weissman & Mintz and Selikoff & Cohen,
attorneys; Ira W. Mintz and Steven R. Cohen, on the briefs).
A. Wigder, Assistant Attorney General, submitted a brief on
behalf of amicus curiae Governor's Office of Employee
Relations (Christopher S. Porrino, Attorney General,
attorney; Melissa Dutton Schaffer, Assistant Attorney
General, of counsel, and Todd A. Wigder, on the brief).
Shep Cohen submitted a letter brief on behalf of amicus
curiae International Federation of Professional and Technical
Engineers Local 195 (Oxfeld Cohen, attorneys).
P. Bucceri submitted a brief on behalf of amicus curiae New
Jersey Education Association (Bucceri & Pincus,
attorneys; Louis P. Bucceri, of counsel and on the brief, and
Albert J. Leonardo, on the brief).
Cynthia J. Jahn submitted a letter brief on behalf of amicus
curiae New Jersey School Boards Association (Cynthia J. Jahn,
General Counsel, attorney).
S. Gumpel submitted a letter brief on behalf of amicus curiae
New Jersey State Firefighters' Mutual Benevolent
Association (Law Offices of Craig S. Gumpel, attorneys).
M. Hannon submitted a brief on behalf of amicus curiae New
Jersey State League of Municipalities, New Jersey Association
of Counties, and New Jersey Council of County Colleges
(Genova Burns, attorneys; Joseph M. Hannon, of counsel and on
the brief, Joseph V. Manney, on the brief).
Matthew D. Areman submitted a letter brief on behalf of
amicus curiae New Jersey State Lodge of the Fraternal Order
of Police (Markowitz and Richman, attorneys).
L. Kleinbaum submitted a letter brief on behalf of amicus
curiae New Jersey State PBA (Zazzali, Fagella, Nowak,
Kleinbaum & Friedman, attorneys).
Stephen E. Trimboli submitted a brief on behalf of amicus
curiae County of Morris (Trimboli & Prusinowski,
attorneys; Stephen E. Trimboli, of counsel and on the brief,
and Lauren Kavanagh, on the brief).
M. Bander submitted a letter brief on behalf of amicus curiae
Professional Firefighters Association of New Jersey (Mets
Schiro McGovern & Paris, attorneys).
P. Weissman submitted a letter brief on behalf of amicus
curiae Communications Workers of America, AFL-CIO (Weissman
& Mintz, attorneys).
J., writing for the Court.
appeal the Court considers whether the parties to the
specific collective negotiations agreements (CNAs) at issue
in this case were required to continue scheduled salary
increases during the period between the expiration of those
contracts and the formation of their successor agreements.
Fraternal Order of Police, Atlantic Lodge #34 (FOP Lodge 34),
and the Atlantic County Prosecutor's Office, P.B.A. Local
#77 (PBA Local 77), are two unions that represent certain
public employees in Atlantic County. The Policeman's
Benevolent Association, Local #174 (PBA Local 174), is a
collective bargaining unit for police officers in Bridgewater
Township. The two Atlantic County unions entered CNAs with
the County that expired on December 31. 2010; the CNA between
PBA Local 174 and Bridgewater Township expired on December
31, 2012. All three CNAs provided that, while the contracts
were in effect, covered individuals would receive annual
salary increases under an automatic increment system. The
CNAs further provided that, when they expire, the provisions
of the agreement will continue in effect until a successor
agreement is negotiated. Since 1996, when the CNAs expired
before a successor agreement was executed, the County adhered
to the terms and conditions of the most recently expired CNA,
including the step-increment process. A similar practice
existed in the Township.
December 22, 2010, Atlantic County informed FOP Lodge 34 and
PBA Local 77 that the officers' movement through the
salary guides would cease when their respective CNAs expired.
The County acknowledged that customary practice was to
continue the previously negotiated payment scheme, but it
maintained that it was no longer reasonable to follow that
practice, given that the entire negotiations landscape has
undergone major changes. The County asserted that the
Property Tax Levy Cap and the Interest Arbitration Award Cap,
preempt the previous standards of practice and render
continued salary guide movement impractical and unduly
unions filed charges against Atlantic County with the Public
Employment Relations Commission (PERC), claiming that the
County had engaged in an unfair labor practice in violation
of the Employer-Employee Relations Act (EERA) by refusing to
pay the salary increments after each CNA expired. The hearing
examiner found that case law requires the application of the
"dynamic status quo" doctrine, which was first
adopted by PERC in 1975, when it upheld the generally
accepted view that an employer is normally precluded from
altering the status quo while engaged in collective
negotiations. Given the contract language and the
County's history of continuing the payments after
previous CNAs had expired, the examiner found that the
refusal to pay was a departure from the dynamic status quo
and therefore constituted a unilateral change in a mandatory
subject of negotiations, in violation of the EERA. The County
petitioned for review. PERC disagreed that the contract
language required continuation of incremental salary
increases after the contract expiration. Additionally, PERC
found that the dynamic status quo doctrine was impractical
and burdensome in light of economic conditions and
legislative changes since the recession. PERC abandoned the
dynamic status quo doctrine and found that the County was
within its authority to stop applying the salary increment
systems in the expired CNAs. PERC dismissed the charges.
PERC's decision in the Atlantic County matters,
Bridgewater Township notified PBA Local 174 that it too would
cease the salary step increments once the current CNA
expired. The union filed a grievance, which the Township
denied. The union then submitted the matter to PERC for
arbitration. The grievance was sustained and Bridgewater
Township was "ordered to advance all eligible unit
members . . . one step on the salary guide retroactive to the
employee's 2013 anniversary date of hire." That
award was subsequently affirmed by the Law Division. While
the matter was still in arbitration, the Township filed a
scope-of-negotiations petition with PERC, which granted the
Township's request for a restraint of binding arbitration
and held that public employers were no longer required, as a
matter of law, to fund automatic advancement on a salary
guide after a contract has expired.
three unions appealed the PERC decisions. The Appellate
Division consolidated the appeals, and reversed. 445
N.J.Super. 1 (App. Div. 2016). The panel found that the
Property Tax Levy Cap and the Interest Arbitration Award Cap
do not govern contracts that are negotiated and that neither
statute preempted the viability of the dynamic status quo
doctrine. The panel ruled that the Commission adopted the
dynamic status quo doctrine decades ago, and could not
abandon it now as an act of policymaking. Applying that
doctrine, the panel found that the salary increment system
was a term and condition of employment that could not be
unilaterally terminated during negotiations for a successor
CNA. The Court granted the petitions for certification filed
by Bridgewater Township, Atlantic County, and PERC. 227 NX
148 (2016); 227 NX 152 (2016); 227 NX 153 (2016).
In these cases, the governing contract language of the
respective agreements required that the salary step increases
remain in place after expiration and until the parties reach
agreement on a new CNA. Atlantic County and Bridgewater
Township committed an unfair labor practice when they altered
EERA affords public employees an array of rights, including
the ability to appoint a maj ority representative to
represent their interests and negotiate agreements with their
employer. In addition, the EERA requires that proposed new
rules or modifications of existing rules governing working
conditions be negotiated with the majority representative
before they are established. Employers are barred from
unilaterally altering mandatory bargaining topics, whether
established by expired contract or past practices, without
first bargaining to impasse, (p. 19)
a subject matter to be mandatorily negotiable between public
employers and employees, it must: (1) be one that intimately
and directly affects the work and welfare of public
employees; (2) be a topic that has not been fully or
partially preempted by statute or regulation; and (3) involve
a matter where a negotiated agreement would not significantly
interfere with the determination of a governmental policy.
Salary step increments is a mandatorily negotiable term and
condition of employment because it is part and parcel of an
employee's compensation for any particular year. (pp.
Here, it is not necessary to look beyond the contracts
themselves to conclude that the step increases continued
beyond the expiration of the contracts. It is well-settled
that courts enforce contracts based on the intent of the
parties, the express terms of the contract, the surrounding
circumstances, and the underlying purpose of the contract.
Where an agreement is ambiguous, courts will consider the
parties' practical construction of the contract as
evidence of their intention and as controlling weight in
determining a contract's interpretation, (pp. 21-23)
expired CNAs contain clear and explicit language that the
respective salary guides, and all other terms and conditions
set forth in the agreements, will continue until a successor
agreement is reached. Atlantic County and Bridgewater
Township could have negotiated different terms, (pp. 23-24)
the Atlantic County and Bridgewater Township agreements been
silent about whether the terms of the salary increment system
were to continue, the issue in this appeal would be more
complicated. It might well have required careful
consideration of past practices, custom and the viability of
the dynamic status quo doctrine. But the unilateral
modification at issue here directly contradicted the
parties' binding written agreement. Because the salary
increment system was a term and condition of employment that
governed beyond the CNAs' expiration date, Atlantic
County and Bridgewater Township committed an unfair labor
practice when they altered that condition without first
attempting to negotiate in good faith, (pp. 24-25)
Appellate Division based its conclusion on the dynamic status
quo doctrine. Given its reliance on contract principles, the
Court did not reach that issue. The Court notes that its
decision does not govern future negotiations, other than to
suggest that parties would be wise to include explicit