135 A.3d 968
N.J. Super. Ct. App. Div.2016Background
- Two consolidated appeals from PERC decisions: Atlantic County (unions FOP Lodge 34 and PBA Local 77) and Bridgewater Township (PBA Local 174). Both involved employers' refusal to pay automatic salary/step increments after collective negotiation agreements (CNAs) expired.
- Historically PERC applied the "dynamic status quo" doctrine: employers may not unilaterally change terms and conditions (including scheduled salary increments) during negotiations after a CNA expires.
- PERC dismissed the Atlantic County unfair-practice charges and, in Bridgewater, restrained arbitration, announcing abandonment of the dynamic status quo doctrine and adopting a narrower "static" status quo definition.
- PERC justified the change by citing municipal budget pressures and the 2% tax levy/arbitration cap statutes enacted in 2010–2014, concluding post-expiration increments were not mandatorily negotiable/legally arbitrable.
- The Appellate Division reversed both PERC decisions, holding PERC exceeded its statutory mandate by discarding the long-standing adjudicative dynamic status quo doctrine and that salary increments remain a mandatory subject of negotiation pending legislative change.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PERC permissibly abandoned the dynamic status quo doctrine | PERC should not change doctrine; Atlantic County and unions argued status quo required payment of increments post-expiration | PERC argued doctrine could be abandoned to account for fiscal constraints and the tax levy / arbitration cap | Court: PERC exceeded authority; cannot judicially abolish an adjudicative doctrine implementing the Act; reversal |
| Whether refusal to pay post-expiration salary increments constitutes unfair labor practice under N.J.S.A. 34:13A-5.4 | Unions: nonpayment is unilateral change to terms/conditions and an unfair practice | County: budgetary hardship and statutory tax cap justify nonpayment | Held: Nonpayment would violate the Act as interpreted under dynamic status quo; unfair practice sustained |
| Whether automatic post-expiration increments are a mandatorily negotiable subject and arbitrable | Unions: salary is mandatorily negotiable; grievance/arbitration proper | Township/PERC: after expiration automatic movement on guide is not a term/condition and not arbitrable given PERC's new rule | Held: Salary increments remain mandatorily negotiable and arbitrable; PERC's restraint reversed |
| Whether the 2% interest-arbitration cap/statutory tax-levee concerns preempt or justify changing doctrine | Unions: caps apply only to interest arbitration; Legislature did not limit negotiated or adjudicative protections | PERC/municipal respondents: statutory caps and fiscal realities require abandoning doctrine | Held: Legislature limited only interest arbitration; silence elsewhere means PERC cannot expand cap's effect; legislative change, not PERC, required |
Key Cases Cited
- N.J. Galloway Twp. Bd. of Educ. v. Galloway Twp. Ass'n, 78 N.J. 25 (N.J. 1978) (endorses PERC's role and discusses dynamic status quo doctrine)
- Board of Educ. Township of Neptune v. Neptune Twp. Educ. Ass'n, 144 N.J. 16 (N.J. 1996) (limits dynamic status quo in context of teacher salary-schedule statutes; distinguishes non-teaching staff)
- Katz v. National Labor Relations Board, 369 U.S. 736 (U.S. 1962) (federal principle that unilateral changes to status quo frustrate bargaining)
- In re Hunterdon Cnty. Bd. of Chosen Freeholders, 116 N.J. 322 (N.J. 1989) (standard of appellate review for agency decisions)
- Camden Bd. of Educ. v. Alexander, 181 N.J. 187 (N.J. 2004) (contracting with reference to existing law; parties' expectations)