IN THE MATTER OF NEW BRUNSWICK MUNICIPAL EMPLOYEES ASSOCIATION, Petitioner-Appellant,
CITY OF NEW BRUNSWICK, Respondent-Respondent.
Submitted October 10, 2017
appeal from the New Jersey Public Employment Relations
Commission, P.E.R.C. No. 2017-22.
Cohen, PC, attorneys for appellant (Samuel Wenocur, on the
Zucker Hatfield, LLC, attorneys for respondent City of New
Brunswick (Kathryn V. Hatfield, of counsel and on the brief;
Elizabeth Farley Murphy, on the brief).
T. McMahon, General Counsel, attorney for respondent New
Jersey Public Employment Relations Commission (Joseph P.
Blaney, Deputy General Counsel, on the statement in lieu of
Judges Messano, Accurso and O'Connor.
question presented by this appeal is whether PERC, the Public
Employment Relations Commission, is correct the contribution
rates included in the Pension and Health Care Benefits Act
(Chapter 78) L. 2011, c. 78, N.J.S.A.
52:14-17.28c, which top out at thirty-five percent, do not
preempt the provision in the parties' contract requiring
eligible retirees to contribute fifty percent of the costs of
their health care coverage.
XXI of the 2011-2014 collective negotiations agreement (CNA)
ending December 31, 2014 between the City of New Brunswick
and the New Brunswick Municipal Employees Association,
provided the City would assume fifty percent of the costs of
health and welfare benefits for eligible retirees, that is,
those employees with twenty-five years of service with the
City or those who are sixty-two and have either fifteen or
twenty years of service with the City, depending on when they
were hired. See N.J.S.A. 40A:10-23 (granting
municipality discretion to assume all or part of the cost of
health benefits to certain eligible retirees); Middletown
Twp. PBA Local 124 v. Twp. of Middletown, 193 N.J. 1, 5
(2007) (discussing application of the statute).
negotiations for the 2015-2018 contract to start January 1,
2015, the City proposed leaving Article XXI unchanged. The
Association, however, took the position that contribution
rates for retirees could not exceed those specified in
Chapter 78. The City maintained Chapter 78 did not preclude
the higher rate the parties had negotiated previously and
refused to change the language. The parties eventually
entered into a sidebar agreement, including Article XXI as
previously negotiated in the 2015-2018 CNA subject to
PERC's ruling on a scope-of-negotiations petition to be
filed by the Association.
PERC, the Association argued N.J.S.A. 40A:10-21.1 established
a ceiling for retiree contributions for health care coverage
based on the sliding scale established in N.J.S.A.
52:14-17.28c. The City contended those statutes set a floor,
not a ceiling, on what local government employers could
require retirees to contribute to their health care costs.
final decision on the scope petition issued October 20, 2016,
PERC determined Chapter 7 8 does not preempt Article XXI.
PERC began its analysis by acknowledging that although health
benefits contributions are mandatorily negotiable, "an
otherwise negotiable topic cannot be the subject of a
negotiated agreement if it is preempted by legislation."
Bethlehem Twp. Bd. of Educ. v. Bethlehem Twp. Educ.
Ass'n, 91 N.J. 38, 44 (1982). It found
"negotiations over the level of health benefits
contributions were first preempted by the enactment of
P.L. 2010, C. 2 (Chapter 2)."
Specifically, PERC found that
[n]otwithstanding any other amount that may be required
additionally by the employer or through a collective
negotiations agreement, Chapter 2 required all public
employees to contribute 1.5% of base salary toward health
benefits and those employees who became members of a public
retirement system on or after Chapter 2's effective date
to pay 1.5% of their monthly retirement allowance for health
benefits in retirement. See N.J.S.A. 18A:16-17;
N.J.S.A. 40A:10-21; N.J.S.A. 40A;10-23(b); N.J.S.A.
In 2011, negotiations over the level of health benefits
contributions were further preempted by the enactment of
Chapter 78. Chapter 7 8 required all public employees to
contribute a percentage of the cost of coverage for health
benefits based upon employees' earning levels and
specified the health benefits contribution required for
public employees in retirement. See N.J.S.A.
18A:16-17.1; N.J.S.A. 40A:10-21.1; N.J.S.A. 52:14-17.28c;
N.J.S.A. 52:14-17.28d. However, negotiated health benefits
contribution levels in excess of Chapter 78 levels remain in
effect despite the enactment of Chapter 78[.]
on N.J.S.A. 40A:10-21.1(d), which provides that "the
authority to determine an amount of contribution ... by means
of a binding collective negotiations agreement . . .
shall remain in effect with regard to
contributions, whether as a share of the cost, or percentage
of the premium or periodic charge, or otherwise, in addition
to the contributions required" under subsections (a) and
(b) of the statute, PERC concluded Article XXI was unaffected
by Chapter 7 8 under the test for negotiability established
by the Supreme Court in In re Local 195, IFPTE, 88
N.J. 393, 404-05 (1982).
Association appeals, contending Chapter 78 prohibits the City
and the Association from negotiating "contribution rates
above those expressed in N.J.S.A. 52:14-17.28c." The
Association argues those rates, which establish what a
retiree "shall pay, " are "neither a floor nor
a ceiling, " but instead "limit any
discretion" in setting contribution rates for eligible
Association maintains that "[t]o the extent . . .
N.J.S.A. 40A:10-21.1(d) may allow an exception to the
progressive payment plan under N.J.S.A. 52:14-17.28c, the
exception is to apply only in very limited circumstances and
only upon demonstration of compliance with N.J.S.A.
40A:10-21.1(c), " which did not occur here. The
Association further contends that PERC's interpretation
of Chapter 7 8 is at odds with the Legislature's goal of
imposing "a progressive rate structure to ensure that
lower income employees and eligible retirees [pay] a smaller
percentage of their health care costs than higher income
earners." We reject those arguments as without support
in the statutory scheme and affirm PERC's ruling that
Article XXI is not preempted by Chapter 78.
has primary jurisdiction to determine in the first instance
whether a matter in dispute is within the scope of collective
negotiations. N.J.S.A. 34:13A-5.4(d); State v. State
Supervisory Emps. Ass'n, 78 N.J. 54, 83 (1978).
Although a party dissatisfied with PERC's determination
of course has recourse to this court, N.J.S.A. 34:13A-5.4(d),
the scope of our review is narrow. State
Supervisory, 78 N.J. at 83. "In the absence of
constitutional concerns or countervailing expressions of
legislative intent, [appellate courts] apply a deferential
standard of review to determinations made by PERC."
City of Jersey City v. Jersey City Police Officers
Benevolent Ass'n, 154 N.J. 555, 567 (1998). We,
however, owe no particular deference to PERC's
interpretation of Chapters 2 and 78. Although both certainly
affect employer/employee relations, PERC is not charged with
administering either. See In re Camden Cty.
Prosecutor, 394 N.J.Super. 15, 23 (App. Div. 2007).
determine whether the parties may continue to agree that
retirees should contribute fifty percent of the costs of
their health and welfare benefits after Chapter 78, we look
to the Legislature's intent in establishing the
contribution schedule the Association maintains robbed the
parties of their discretion in the matter. See DiProspero
v. Penn, 183 N.J. 477, 492 (2005). While the best
indicator of that intent is the words of the statute, it is
important to read those words "in ...