In re State
128 A.3d 1152
| N.J. Super. Ct. App. Div. | 2016Background
- NJLESA (union for 665 law-enforcement supervisors) and the State were in mandatory interest arbitration under the Police and Fire Public Interest Arbitration Reform Act after their CNA expired on June 30, 2011.
- The Act (at the time) limited arbitrated base-salary increases to 2% per year of the aggregate base-salary amount from the 12 months before the expired CNA (the "2% salary cap").
- The arbitrator calculated the base-year aggregate salary as $56,945,856.70, computed 2% per year over four years (total available $4,555,668), then applied a scattergram-based projection of step movement and longevity.
- Using the State’s scattergram (which projected all incumbents moving through the schedule), the arbitrator found step costs of $3,734,295, leaving $821,373 available and awarded $757,833 in salary — within the statutory cap.
- NJLESA agreed with the base-year total but argued PERC and the arbitrator erred by accepting the State’s scattergram rather than NJLESA’s scattergram, which used actual 2012–2013 payrolls reflecting retirements/attrition (showing more funds available).
- PERC affirmed the award, rejecting NJLESA’s contention that post-base-year savings (from retirements/attrition) should reduce the base for the cap calculation; NJLESA appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator/PERC erred by accepting State’s scattergram and methodology instead of union’s scattergram | NJLESA: award should use actual 2012–2013 paid salaries (union scattergram) that reflect realized retirements/attrition, increasing available funds under the 2% cap | State/PERC: statute requires basing the cap on aggregate base salary in the 12 months before expiration and projecting that group forward; post-base-year savings are not to be credited | Court: Affirmed PERC; acceptance of State’s scattergram consistent with PERC precedent and statutory scheme |
| Whether realized post-base-year savings (retirements/attrition) must be credited when costing an award under the 2% cap | NJLESA: realized retirements/attrition in 2012–2013 are not speculative and should reduce employer costs for cap purposes | PERC: both speculative and realized post-base-year changes are outside the statute’s calculation; cap is fixed to the pre-expiration base-year aggregate | Court: Rejected NJLESA; PERC’s interpretation (no credit for post-base-year savings) reasonable and controlling |
| Whether arbitrator was required to adopt a specific costing methodology | NJLESA: arbitrator should have used union’s methodology and data | State/PERC: statute sets a maximum but not a mandated methodology; arbitrator has discretion within statutory limits | Court: Deferential review; arbitrator’s chosen methodology permissible so long as award complies with the cap |
| Whether PERC’s decision was arbitrary, capricious, or unreasonable | NJLESA: PERC’s affirmance ignored New Milford/Atlantic City guidance favoring actual paid figures where available | State/PERC: PERC’s decisions (including New Milford) support using end-of-base-year scattergram projection and disallow credit for subsequent savings | Court: PERC decision not arbitrary; it followed New Milford and related precedent |
Key Cases Cited
- Hillsdale PBA Local 207 v. Borough of Hillsdale, 137 N.J. 71 (explains arbitrator must state relevant statutory factors and provide reasoned analysis)
- State v. Prof'l Ass'n of N.J. Dep't of Educ., 64 N.J. 231 (courts defer to agency expertise in labor-relations matters)
- In re Hunterdon Cty. Bd. of Chosen Freeholders, 116 N.J. 322 (standard of review for PERC decisions; defer where not arbitrary or unreasonable)
- In re City of Camden and the Int'l Ass'n of Firefighters, Local 788, 429 N.J. Super. 309 (App. Div.) (discusses heightened scrutiny in public interest arbitration and deference to PERC)