Borough of Keyport v. International Union of Operating Engineers, Local 68
118 A.3d 1041
| N.J. | 2015Background
- In 2009 three New Jersey municipalities (Belmar, Mount Laurel, Keyport) facing fiscal distress submitted layoff plans to the Civil Service Commission that reduced employee hours/wages (Belmar and Mount Laurel: temporary unpaid furlough days; Keyport: conversion of three full‑time clerical positions to part‑time, eliminating health coverage).
- The Civil Service Commission approved each layoff plan while an emergency regulation authorizing temporary layoffs (N.J.A.C. 4A:8‑1.1A) was in effect; the regulation was later repealed but its validity was not challenged here.
- Unions filed unfair‑practice/scope‑of‑negotiations charges with PERC; PERC held the hour/wage reductions were mandatorily negotiable under the three‑part Local 195 test and ordered bargaining.
- The Appellate Division consolidated the appeals and reversed PERC, concluding (except for an unrelated benefits issue) the municipalities’ layoff actions were non‑negotiable because they comported with Civil Service law and involved managerial policy decisions.
- The New Jersey Supreme Court reviewed whether the layoff measures were negotiable under Local 195, focusing on prongs two (preemption by statute/regulation) and three (interference with governmental policy). The Court affirmed the Appellate Division as modified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Civil Service statute/regulations (including emergency temporary‑layoff rule) preempt EERA negotiation obligations | Unions: Civil Service law does not compel layoffs and thus does not preempt EERA; negotiation requirement survives | Municipalities: Civil Service scheme provides comprehensive procedures for layoffs and thus preempts EERA negotiation | No preemption — Civil Service provisions (including the emergency rule) are discretionary and do not speak imperatively to bar negotiation under Local 195 prong two |
| Whether furloughs / converting FT to PT are mandatorily negotiable (Local 195 prong three) | Unions: Reductions in hours/wages are classic negotiable terms; negotiation would not significantly interfere with governmental policy; alternatives available | Municipalities: Layoff decisions (including temporary layoffs) are managerial prerogatives tied to budgetary policy and must be executable without mandatory bargaining | Held non‑negotiable under prong three — because authorized layoff mechanisms are managerial policy decisions in times of fiscal exigency and bargaining would significantly interfere with policy execution |
| Standard for proving managerial‑prerogative in fiscal emergencies | Unions/PERC (initially): employer must show no reasonable alternative — high “last option” burden | Municipalities: PERC should not impose a last‑resort showing; managerial decisions get deference | Court: rejects PERC’s prior last‑option standard; employers need not prove absence of any alternative — management prerogative in bona fide layoff plans can predominate when tied to governmental policy |
| Deference to PERC determinations on negotiability | Unions: PERC’s expertise and initial rulings merit deference | Municipalities: Appellate review appropriate; PERC changed position below | Court: gives limited weight to PERC’s initial findings but ultimately accepts PERC’s later concession that the actions were managerial prerogatives and affirms non‑negotiability on prong three grounds |
Key Cases Cited
- Local 195, IFPTE v. State, 88 N.J. 393 (1982) (articulates three‑part test for negotiability: (1) direct effect on employees; (2) preemption by statute/regulation; (3) interference with governmental policy)
- State v. State Supervisory Emps. Ass’n, 78 N.J. 54 (1978) (recognizes layoff decisions and certain civil service matters as managerial/public‑policy domains)
- Bethlehem Twp. Bd. of Educ. v. Bethlehem Twp. Educ. Ass’n, 91 N.J. 38 (1982) (explains preemption requires statute/regulation to set terms imperatively and comprehensively)
- Bd. of Educ. of the Woodstown‑Pilesgrove Reg’l Sch. Dist. v. Woodstown‑Pilesgrove Reg’l Educ. Ass’n, 81 N.J. 582 (1980) (holds changes that tie annual pay to days worked implicate mandatory negotiation)
- State of New Jersey (DEP) v. Communications Workers of America, 285 N.J. Super. 541 (App. Div. 1995) (prior Appellate Division decision recognizing narrow preemption where regulations comprehensively govern workweek reduction for State employees)
- Klinger v. Bd. of Educ. of Cranbury, 190 N.J. Super. 354 (App. Div. 1983) (upholds management authority to restructure full‑time position into part‑time positions within layoff context)