IN THE MATTER OF LOCAL 195, IFPTE, AFL-CIO, APPELLANT, AND STATE OF NEW JERSEY, RESPONDENT. IN THE MATTER OF STATE OF NEW JERSEY, APPELLANT AND CROSS-RESPONDENT, AND STATE SUPERVISORY EMPLOYEES ASSOCIATION, A/W N. J. CIVIL SERVICE ASSOCIATION/N. J. STATE EMPLOYEES ASSOCIATION (PRIMARY LEVEL SUPERVISORS UNIT), RESPONDENT AND CROSS-APPELLANT. IN THE MATTER OF STATE OF NEW JERSEY, APPELLANT AND CROSS-RESPONDENT, AND N. J. CIVIL SERVICE ASSOCIATION/N. J. STATE EMPLOYEES ASSOCIATION (ADMINISTRATIVE & CLERICAL SERVICES UNIT), RESPONDENT AND CROSS-APPELLANT. IN THE MATTER OF STATE OF NEW JERSEY, APPELLANT AND CROSS-RESPONDENT, AND N. J. CIVIL SERVICE ASSOCIATION/N. J. STATE EMPLOYEES ASSOCIATION (PROFESSIONAL UNIT), RESPONDENT AND CROSS-APPELLANT.
Supreme Court of New Jersey
Argued November 2, 1981—Decided March 23, 1982
88 N.J. 393
For affirmance and modification—Chief Justice WILENTZ and Justices CLIFFORD, SCHREIBER, HANDLER, POLLOCK and O‘HERN—6.
Dissenting—Justice PASHMAN—1.
Andrew F. Zazzali, Jr. and Dennis J. Alessi submitted a brief on behalf of amicus curiae State AFL-CIO (Zazzali & Kroll, attorneys).
Sanford R. Oxfeld argued the cause for appellant Local 195 IFPTE, AFL-CIO (Rothbard, Harris & Oxfeld, attorneys).
Richard H. Greenstein argued the cause for respondent and cross-appellant State Supervisory Employees Association, etc., et al. (Fox & Fox, attorneys).
Sidney H. Lehmann, General Counsel, argued the cause for respondent Public Employment Relations Commission (Sidney H. Lehmann, attorney; Sidney H. Lehmann and Don Horowitz, Deputy General Counsel, on the briefs).
The opinion of the Court was delivered by
The New Jersey Employer-Employee Relations Act,
I
FACTS AND PROCEDURAL HISTORY
A. In the Matter of Local 195
From late 1978 to early 1979, the State and Local 195 were engaged in collective negotiations on a contract to run from July 1979 to June 1981. During the course of the negotiations, the negotiability of several contractual provisions came into question. The disputed clauses concerned (1) limitations on contracting and subcontracting, (2) the establishment of a workweek, and (3) transfer and reassignment determinations. Unable to reach agreement, the parties filed a joint petition for a scope of negotiations determination with the Public Employment Relations Commission (PERC) on May 31, 1979.3
a decision to subcontract would effectively terminate the employment relationship vis-a-vis the employees in a negotiations unit and would have a “cataclysmic effect on wages, hours, and working conditions....” [Slip op. at 6]
On October 6, 1980, the Appellate Division substantially affirmed PERC‘s determinations regarding the workweek and the transfer and reassignment provisions. 176 N.J.Super. 85 (1980).5 The court divided on the negotiability of subcontracting. The majority reversed PERC and held that the determination to subcontract work is an inherent managerial prerogative. Judge Morgan dissented, arguing that the majority had failed to consider the interests of public employees in reaching its decision. Applying a balancing test, Judge Morgan would have found subcontracting to be a mandatorily negotiable issue.
Because of the dissent below, this case comes before the Court on appeal as of right.
The State of New Jersey and the New Jersey State Supervisory Employees Association, New Jersey Civil Service Association and the New Jersey State Employees Association began negotiations in late 1978 for a contract to run from July 1979 to June 1981. During the negotiations, dispute arose over the negotiability of the same three topics at issue in Local 195.
The State filed three petitions for scope of negotiations determinations with PERC on May 25, 1979.6 On August 28, 1979, PERC held that the subcontracting and workweek provisions were mandatorily negotiable. It further held some of the reassignment provisions negotiable because they reflected procedural concerns of the employees rather than substantive policy determinations by the employer. In the Matter of State and State Supervisory Employees Association, PERC No. 80-19, 5 NJPER 381 (1979). Those provisions that were substantive in nature were held to be non-negotiable.
Relying on the majority opinion in Local 195, supra, the Appellate Division again held subcontracting to be a non-negotiable subject. As in Local 195, Judge Morgan dissented on the issue of subcontracting. The Appellate Division also substantially affirmed PERC‘s determinations regarding the workweek and reassignment provisions. Unlike PERC, however, the Appellate Division held that provisions regarding (1) the applicability of seniority in transfer determinations, and (2) the transfer of Association officers and stewards, were non-negotiable subjects.
An appeal as of right was taken by the Association on the subcontracting provision, under
SCOPE OF NEGOTIABILITY
Public employees in New Jersey have a constitutional right to organize and present “grievances and proposals” to public employers through representatives of their own choosing.
The central issue in a scope of negotiations determination, is whether or not a particular subject matter is negotiable. This depends on careful consideration of the legitimate interests of the public employer and the public employees. The process of balancing those competing interests is constrained by the policy goals underlying relevant statutes and by the Constitution.
The Legislature has recognized that, like private employees, public employees have a legitimate interest in engaging in collective negotiations about issues that affect “terms and conditions of employment.”
Matters of public policy are properly decided, not by negotiation and arbitration, but by the political process. This involves the panoply of democratic institutions and practices, including public debate, lobbying, voting, legislation and administration. We have stated that
the very foundation of representative democracy would be endangered if decisions on significant matters of governmental policy were left to the process of collective negotiations ... Our democratic system demands that governmental bodies retain their accountability to the citizenry. [Ridgefield Park Ed. Ass‘n v. Ridgefield Park Bd. of Ed., 78 N.J. 144, 163 (1978)]
We have therefore divided subjects of public employment negotiation into two categories: “mandatorily negotiable terms and conditions of employment and non-negotiable matters of governmental policy.” Id. at 162.
The role of the courts in a scope of negotiations case is to determine, in light of the competing interests of the State and its employees, whether an issue is appropriately decided by the political process or by collective negotiations. In making this sensitive determination, the mere invocation of abstract categories like “terms and conditions of employment” and “managerial prerogatives” is not helpful.9 To determine whether a subject is negotiable, the Court must balance the competing interests by considering the extent to which collective negotiations will impair the determination of governmental policy.
Second, an item is not negotiable if it has been preempted by statute or regulation. If the Legislature establishes a specific term or condition of employment that leaves no room for discretionary action, then negotiation on that term is fully preempted. If the statute sets a minimum or maximum term or condition, then negotiation may be confined within the parameters established by these limits. State v. State Supervisory Employees Ass‘n, 78 N.J. at 80-82;
Third, a topic that affects the work and welfare of public employees is negotiable only if it is a matter “on which negotiated agreement would not significantly interfere with the exercise of inherent management prerogatives pertaining to the determination of governmental policy.” In re Paterson Police PBA, 87 N.J. at 86; Woodstown-Pilesgrove, 81 N.J. at 591; State v. State Supervisory Employees Ass‘n, 78 N.J. at 67 (emphasis added in Woodstown-Pilesgrove). This principle rests on the assumption that most decisions of the public employer affect the work and welfare of public employees to some extent and that negotiation will always impinge to some extent on the determination of governmental policy. In re Paterson Police PBA, 87 N.J. at 91-92. The requirement that the interference be “significant” is designed to effect a balance between the interests of public employees and the requirements of democratic decision making. As Justice Schreiber wrote in Woodstown-Pilesgrove,
The nature of the terms and conditions of employment must be considered in relation to the extent of their interference with managerial prerogatives. A weighing or balancing must be made. When the dominant issue is [a governmental] goal, there is no obligation to negotiate and subject the matter, including its impact, to binding arbitration. Thus these matters may not be included in the negotiations and in the binding arbitration process even though they may affect or impact upon the employees’ terms and conditions of employment. [81 N.J. at 591]
Thus negotiation will be allowed on a subject that intimately and directly affects the work and welfare of public employees unless such negotiated agreement would significantly interfere with the determination of governmental policy.
To summarize, a subject is negotiable between public employers and employees when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy. To decide whether a negotiated agreement would significantly
III
CONTRACTING AND SUBCONTRACTING
The proposed contract provision at issue in State Supervisory Employees Ass‘n states:
The State shall meet with the Association to negotiate all incidents of contracting or subcontracting whenever it becomes apparent that a layoff or job displacement might result. [Article XXXII (emphasis added)]
The contract provision in Local 195 states:
The State agrees to meet with the Union to discuss all incidences of contracting or subcontracting whenever it becomes apparent that a layoff or job displacement will result. [Article XXXIV (emphasis added)]
These provisions would require negotiation or discussion only if subcontracting might result in layoffs or displacement. “Nothing more directly and intimately affects a worker than the fact of whether or not he [or she] has a job.” State v. State Supervisory Employees Ass‘n, 78 N.J. at 84. The clause clearly meets the requirements of the first part of the test for negotiability.
We next decide whether negotiation about subcontracting has been preempted by statute. One possible source of preemption is the Civil Service statutes, by which the Legislature established a merit system for the selection, appointment, classification and discharge of public employees.
Neither the Constitution nor the Civil Service laws require that all State functions be carried out by civil service employees. See New Jersey Sports & Exposition Authority v. McCrane, 119 N.J.Super. 457, 546-48 (Law Div.1971), modified on other grounds, 61 N.J. 1 (1972), appeal dis., 409 U.S. 943, 93 S.Ct. 270, 34 L.Ed.2d 215 (1972), after remand, 62 N.J. 248 (1973), cert. den., 414 U.S. 989, 94 S.Ct. 291, 38 L.Ed.2d 228 (1973); State Troopers Fraternal Association v. State, 115 N.J.Super. 503, 507 (Ch.Div.1971), aff‘d, 119 N.J.Super. 375 (App. Div.1972), aff‘d, 62 N.J. 302 (1973) (both holding that the constitutional “merit and fitness” requirement did not prevent the Legislature from excluding certain public employees from the Civil Service law). We express no opinion on whether subcontracting in a particular instance might violate the constitutional and statutory merit requirements. We simply reiterate that the ability to contract out work, as such, does not contravene the merit and fitness requirements. The Civil Service statutes do not create a blanket prohibition against subcontracting.
A second possible source of preemption is
We therefore hold that to the extent the contractual provision at issue in State Supervisory Employees’ Ass‘n includes negotiation on the ultimate substantive decision to subcontract, it is a non-negotiable matter of managerial prerogative. We recognize that our ruling on subcontracting is at odds with decisions in other jurisdictions. Unified School Dist. No. 1 of Racine County v. Wisconsin, 81 Wis.2d 89, 259 N.W.2d 724 (1977); In re Saratoga Springs City School Dist. v. New York State Public Employment Relations Bd., 68 A.D.2d 202, 416 N.Y.S.2d 415 (App.Div.1979); Van Buren Public School Dist. v. Wayne Cty. Circuit Judge, 61 Mich.App. 6, 232 N.W.2d 278 (Ct.App.1975). These decisions rest on the assumption that subcontracting “does not represent a choice among alternative social or political goals or values.” Unified School Dist., etc., 259 N.W.2d at 732; In re Saratoga Springs, etc., 416 N.Y.S.2d at 419. As we have stated, we do not agree that the decision to contract out
These out-of-state decisions also emphasize the wisdom of pursuing discussion between public employers and employees. See, e.g., Van Buren Public School, etc., 232 N.W.2d at 288. We fully agree that such discussions are valuable and should be fostered. They would undoubtedly promote labor peace and harmony, a major goal of the New Jersey Employer-Employee Relations Act.
For these reasons, we fully expect that discussion between public employers and employees will be undertaken by the State. It is clearly in the interest of the State to do so. At oral argument, the representatives of the State voiced a commitment to pursue discussion with public employees before resorting to subcontracting. This is altogether appropriate. We do not mean to stifle discussion. We encourage it. State officials would be derelict in their public responsibilities if they did not pursue such discussions.
To this end, we hold that a public employment contract may include a provision reciting an agreement by the State to discuss decisions to contract or subcontract whenever it becomes apparent that a layoff or job displacement will result, if the proposed subcontracting is based on solely fiscal considerations. In such situations, the public would clearly benefit from suggestions by public employees directed toward improving economy or efficiency. While the public employees have no right to negotiate on the ultimate decision to subcontract, they may have a procedural right to present their position on the economic issue. Thus, for example, they could seek to show the employer that the employees are willing to perform the same job at a price competitive with the private replacements.
In Local 195, the contract provision would be acceptable if it limited discussion to occasions of subcontracting or contracting likely to result in job layoffs only when the subcontracting is done solely for fiscal or economic reasons. However, as written, the provision is overly broad. Placing a legal duty on the State to discuss subcontracting when proposed for broader policy purposes would place too great a burden on the determination of governmental policy. Only when the contracting out is proposed for purely economic reasons does the employee interest in discussion of alternative solutions become dominant.
Both contract provisions appear to allow negotiation or discussion not only on the ultimate issue of subcontracting but on the effects of subcontracting on public employees. To the extent the provisions impose a duty on the State to negotiate procedural aspects of the subcontracting decision as they affect employees, the clauses are negotiable. For example, negotiation could occur on the issue of adequate notice to employees that they are going to be laid off. We have held that, although substantive policy decisions may be non-negotiable matters, procedural aspects of the decision are negotiable. State v. State Supervisory Employees Ass‘n, 78 N.J. at 90-91. Negotiation about the procedures for laying off employees will not significantly interfere with the underlying policy determination. They are therefore negotiable terms and conditions of employment.
We conclude that, as written, both proposed contractual provisions relating to contracting and subcontracting are non-negotiable matters of managerial prerogative.
IV
WORKWEEK PROVISIONS
The workweek provision in dispute in State Supervisory Employees Association states:13
Where practicable: the normal workweek shall consist of five (5) consecutive workdays. [Article VIII, A.3.]
We find that this provision intimately and directly affects the work and welfare of public employees.
We further find that the clause is not preempted by statute. The disputed provision does not constrain the right of the State to determine the number or classification of employees on duty at any time. It merely governs negotiations concerning which employees within a given classification will work at any particular time. No statutes set the workweek for individual employees.
We have previously held that, while the establishment of a school calendar, In re Burlington Cty. College Faculty Ass‘n v. Bd. of Trustees, 64 N.J. 10 (1973), or the hours of instruction in a school day, Woodstown-Pilesgrove, supra, are non-negotiable subjects, the days and hours worked by individual employees are negotiable. The contract provision in this case concerns the negotiable subject of individual work schedules rather than the formation of an overall calendar. The provision does not interfere with the State‘s power to determine the number of classification of employees working at any given time. Nor does it interfere with the determination of the hours or days during which a service will be operated. The Association wishes only to negotiate the hours of employment of individual employees within the system established by the State. Negotiation on this issue will not significantly interfere with the determination of governmental policy, particularly since the term applies only “[w]here practicable.” It is true that negotiation on the issue of practicability would impinge on the State‘s power to deviate from the provision. Nonetheless, the interests of the employees predominate and negotiation on the subject would not significantly interfere with determination of governmental policy.14
We therefore conclude that the workweek provision in dispute is a negotiable term and condition of employment.
TRANSFER AND REASSIGNMENT PROVISIONS
The transfer and reassignment provisions in dispute in State Supervisory Employees Association are as follows:15
A. Transfer
1. Transfer is the movement of an employee from one job assignment to another within his job classification in another organizational unit or department.
2. An employee shall not be transferred without the approval and consent of the appointing authority from and to whose unit the transfer is sought nor without the consent of the employee, or the approval of the Department of Civil Service, except that:
a. The consent of the employees shall not be required when the employee movement is the result of a transfer or combining of functions of one unit to or with another;
b. When a temporary transfer is made, the consent of the employee shall not be required; but if the employee objects, he shall have the right to have the transfer reviewed by the Department of Civil Service.
c. Any special hardship that may result will be given due consideration.
3. c. When accepted for transfer by an organizational unit or department, the request for transfer shall not be unreasonably withheld by the organizational unit or department where the individual is employed.
B. Reassignment
1. Reassignment is the movement of an employee from one job assignment to another within his job classification and within the work unit, organizational unit or department.
2. Reassignments of employees may be made in accordance with the fiscal responsibilities of the appointing authority; to improve or maintain operational effectiveness, or to provide employee development and job training or a balance of employee experience in any work area. Where such reassignments are not mutually agreed to, the appointing authority will make reassignments in the inverse order of the job classification seniority of the employees affected, given the above conditions, providing the employees are capable of doing the work. Any special hardship that may result will be given due consideration.
3. When temporary reassignments are made to achieve any of the objectives in B.2. above, employees to be affected will be given maximum possible notice. The consideration of seniority otherwise applicable in reassignments will not apply. The utilization of the concept of temporary reassignments will not be used unreasonably.
4. When personnel changes in a work unit provide opportunities for shift or schedule changes, interested employees may apply for desired assignments to the work unit supervisor. Such changes in assignment will be made on the basis of the job classification seniority of employees requesting the change, except that priority is given to the assignment of individual employees as provided in B.2. above.
5. When a vacancy is filled by an employee from outside a work unit, the employee joining that work unit shall be assigned the open position on the shift and work schedule which were appropriate to the openings.
6. a. Where the principles in B.2. above are observed, requests for voluntary reassignment within the organizational unit or department shall be given consideration.
b. An employee desiring reassignment to any job in his organizational unit or department may submit an application through his supervisor in writing to his personnel officer stating the reasons for the request. Employees who are capable of performing the work and who apply for such reassignments will be considered and reassignments will be made on the basis of these requests. Where more than one request for reassignment from qualified employees deemed capable of performing the work in such a job is on record, any assignment(s) will be made on the basis of the job classification seniority of employees having recorded such a request. 7. An employee may have on record no more than two (2) requests for reassignment in 6.b. above.
8. When an employee is granted a voluntary reassignment, under provisions of 4, 5, or 6 above, he shall then be eligible for only one additional voluntary reassignment in the succeeding twelve (12) month period. Consideration will be given to a request for additional reassignment where special circumstances exist.
10. Permanent employees shall be given preference for consideration for voluntary reassignment as contrasted to provisional or probationary employees.
C. Special Requests
Requests for transfer or reassignment predicated on extreme personal hardship will be given priority consideration where positions are available which the employee is capable of performing.
D. Transfer and Reassignment (For Association Officers and Stewards)
1. The State and the Association recognize that Association Officers and Stewards have in their relationship to their jobs a need for continuity in the assigned shift and location which exceeds that of other fellow employees. It is agreed therefore that these Association Officers and Stewards will not be routinely reassigned or transferred involuntarily.
2. The State and the Association recognize the need to utilize all personnel to meet operational requirements effectively and notwithstanding the commitment in paragraph 1 above, movement of such Association Officers and Stewards may be necessary and appropriate (generally on a temporary basis) in exception to the guideline agreed to in paragraph 1. The exception used in paragraph 2. will not be used arbitrarily.
The contract provisions define a transfer as “the movement of an employee from one job assignment to another within his job classification in another organizational unit or department.” [A.1] It defines reassignment as “the movement of an employee from one job assignment to another within his job classification and within the work unit, organizational unit or department.” [B.1] There can be no question that the determination of where an employee works and at what tasks intimately and directly affects the employee‘s work and welfare. The provisions in dispute easily meet the first test for negotiability.
More plausible as a source of preemption are the administrative regulations relating to transfer and reassignment.
The mere fact that proposed contract provisions employ the language of existing statutes or regulations does not by itself prove that the Legislature intended to take those subjects out of the realm of mandatory negotiation. The contract proposals are consistent with the regulatory language. Further, the regulations do not deprive the employer of all discretion in enforcing the rights granted. The provisions are therefore not preempted. State v. State Supervisory Employees Ass‘n, 78 N.J. at 80-82.
Finally, we decide whether negotiation of the transfer and reassignment provisions would significantly interfere with the
Nonetheless, we have distinguished between substantive policy making powers of employers and procedural rights of employees. We have held that promotional procedures are negotiable terms and conditions of employment even though promotional criteria are not. State v. State Supervisory Employees Ass‘n, 78 N.J. at 90-91. Negotiation about the procedures for implementing transfers and reassignment similarly will not significantly interfere with the underlying substantive policy determination. We therefore conclude that contract provisions relating to the procedures for transferring and reassigning public employees are negotiable terms and conditions of employment.
We agree with the findings of PERC and the Appellate Division that the following provisions related to substantive criteria for transfer and were therefore non-negotiable matters of managerial prerogative: A.1., A.2., A.2.a., A.2.b., A.2.c., A.3.c., B.1., B.2., B.5., B.8., B.10., and C. Finally, we affirm the holding that only the first sentences in B.4. and B.6.b. are negotiable.17
Both PERC and the Appellate Division held that clause B.7. was a negotiable term and condition of employment. We disagree and reverse. The provision limits the number of requests for reassignment that an employee may have on record. As such, the clause limits the ability of the employer to know which
On several clauses, there was a difference of opinion between PERC and the Appellate Division. They agreed as to the first and last sentence of B.3., but disagreed as to the second. We affirm their finding that the first sentence of B.3. is negotiable since it concerns the employee‘s procedural right of notice with respect to reassignments. We also agree that the last sentence is not negotiable since it concerns the substantive criteria for reassignment. The second sentence states that when temporary assignments are made, “consideration of seniority otherwise applicable in reassignments will not apply.” PERC found this clause to be negotiable and the Appellate Division reversed. We affirm the Appellate Division finding that this provision related to the substantive criteria for reassignment and is therefore non-negotiable.
The Appellate Division partially reversed PERC‘s finding that clause B.6.a. was non-negotiable. The clause states that “[w]here the principles in B.2. above are observed, [requests for voluntary reassignment within the organizational unit or department shall be given consideration].” The phrase in brackets was held negotiable by the Appellate Division. We reverse. Clause B.2. relates to substantive criteria for reassignment. Read in that context, B.6.a. involves not a procedural right to be heard, but a duty on the employer which impinges on the substantive reassignment decision. It is therefore non-negotiable.
Finally, we address the provisions at D.1. and D.2. relating to limits on the employer‘s power to transfer and reassign Association officers and stewards. The Appellate Division reversed
As to Justice Handler‘s dissent on this point, we can only say that our judgment of the balance of interests differs from his. We agree that it would be an unfair labor practice for a public employer to transfer or assign union officials for the purpose of retaliation or coercion of employees’ rights. (At 400-401). However, protection against improper transfers is not the only employee interest at stake. Even when the government has a legitimate reason for transferring union officials, such as economy or efficiency in the delivery of public services, the employees have a countervailing interest in continuity of the relationship between employees and their bargaining representatives. It is true that allowing negotiation on the issue of the transfer of union officials will interfere somewhat with the determination of governmental policy. However, we do not believe the interference will be significant, since the class of employees involved is relatively small and the restriction on transfers is limited in scope. Because the employee interest is dominant, the issue is negotiable.
CONCLUSION
We hold that in public employment law, the substantive decision to subcontract or to contract out work is a non-negotia-
Affirmed in part and reversed in part.
HANDLER, J., concurring and dissenting.
I have only one point of difference with the majority‘s disposition of this case. I cannot agree that the transfer and reassignment of union officers and shop stewards should be a mandatory subject for collective negotiations. I therefore dissent on that single point.
At the outset let me note that I fully subscribe to the majority‘s analytical approach for determining whether a particular subject is mandatorily negotiable. The Court has correctly reaffirmed the principles expressed in Bd. of Ed. of Woodstown-Pilesgrove v. Woodstown-Pilesgrove Ed. Ass‘n, 81 N.J. 582 (1980), which require a balancing of competing interests to make scope-of-negotiation determinations. This approach does not depend on the talismanic application of labels such as “terms and conditions of employment” or “managerial prerogatives.” Rather, the inquiry focuses on the extent to which collective negotiations will interfere with the establishment and effectuation of governmental policy. Negotiation is required only for those terms and conditions of employment “which intimately and directly affect the work and welfare of public employees and on which negotiated agreement would not significantly
In applying this balancing test to the subject of transfers and reassignments, the majority properly holds that such matters are not mandatorily negotiable because the substantive decision to transfer or reassign an employee is preeminently a governmental policy decision which would be significantly encumbered or impaired if it were subject to mandatory negotiation. Ante at 416. See Ridgefield Park Education Association v. Ridgefield Park Board of Education, 78 N.J. 144, 156 (1978). In drawing a distinction between the public employer‘s substantive decision to transfer or assign employees and the procedural process to be followed in making such decisions, the majority clearly recognizes that the former constitutes inherent managerial prerogatives, while the latter does not. Hence, I agree with the majority that procedures for implementing substantive decisions relating to transfers and reassignments are subject to mandatory negotiation because procedural matters pose no significant threat of interference with the public employer‘s ability to make substantive policy determinations. Ante at 417. See State Supervisory, 78 N.J. at 90-91.
Nevertheless, the Court deviates from this sound and logical analysis when it focuses more narrowly upon the question of transfers of union officials and shop stewards. While the majority acknowledges that negotiation on such matters would “impinge on the ability of the employer to decide who will be transferred or reassigned,” it concludes that, in this one area, “the interest of the employees predominates over the minimal interference with the employer‘s policy choices.” Ante at 419.
The majority does not explain why this is so. The majority simply takes an inconsistent position on these transfer/assignment questions. It refuses to require negotiation regarding the transfer or assignment of employees in general because of the
From the employer‘s standpoint, it is no less an interference with the implementation of governmental policy to have to negotiate the transfer or assignment of an employee who holds a union office, than it would be regarding any other employee. Our balancing approach requires us to determine the extent to which collective negotiations will interfere with the exercise of government policy. Where negotiation on a particular subject would cause significant interference with policy-making functions, it will not be required. Therefore, since, as the majority itself points out, subjecting employee transfer and assignment questions to negotiation would significantly interfere with the effectuation of government policy, I would affirm the finding of the Appellate Division that the transfer and reassignment of all employees, regardless of union status, is nonnegotiable.
Nevertheless, I share the majority‘s justifiable concern for public employees who enjoy union leadership and responsibility. Union officials and shop stewards can be the target of employer victimization because of their very visible and vocal position as employee representatives. Transfers of such persons may be for improper purposes, such as to silence them or to cut them off from the very working environment where they are needed most. Such improper or retaliatory measures by management against union officers can breed disruption and instability in labor relations and can disserve the proper administration of collective bargaining, grievance procedures and other cooperative union practices. See, e.g., Aeronautical Industrial Dist. Lodge v. Campbell, 337 U.S. 521 (1949); D‘Amico v. NLRB, 582 F.2d 820 (3 Cir. 1978) (relating to private sector labor relations).
In the private sector federal courts have often found unfair labor practices where an employee‘s transfer, demotion, discharge or layoff was related to the employee‘s union activities. See, e.g., Osteopathic Hospital Founders Ass‘n v. NLRB, 618 F.2d 633, 636-637 (10 Cir. 1980) (hospital refused to promote union activist and failed to hire two others because of their union activities); NLRB v. Marmon Transmotive, 551 F.2d 733 (6 Cir. 1977) (employer threatened not to promote employees who filed grievances and failed to promote employees who did file grievances); Cameron Iron Works, Inc. v. NLRB, 464 F.2d 609 (5 Cir. 1972) (company issued employee an ultimatum to either resign his post as union steward or face demotion); Food Store Emp. Union, Local 347 v. NLRB, 418 F.2d 1177 (D.C. Cir. 1969) (employee who helped union organize and refused to assist company president in spying on union activities transferred out of that
Moreover, this Court has recognized that “[i]t would certainly constitute an unfair labor practice if public employees, having engaged in lawful organizational activities, were to be penalized or denied promotions because of that protected participation.” Hackensack v. Winner, 82 N.J. 1, 20 (1980). Our public Employer-Employee Relations Act focuses upon unfair labor practices as an appropriate area for administrative remediation.
Because of the inherently suspect nature of transfers or reassignments of union officials, it may well be that circumstances would exist in which the public employer‘s decision to shift such an employee would support an unfair practice charge, even without a detailed showing that the decision was made in bad faith or motivated specifically by anti-union animus. Cf. Saginario v. Attorney General, 87 N.J. 480, 497 (1981) (Clifford, J., concurring and dissenting) (union‘s failure to give notice to employee of grievance proceeding contrary to his interest found to be unfair practice under
O‘HERN, J., concurring in part and dissenting in part.
I.
I agree with the majority‘s statement of the applicable principles: a subject is negotiable between public employers and employees when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy.1
While federal cases are not of significant value in determining the scope of negotiations in the public sector, their reasoning as to what has an economic impact upon a worker is relevant. The Supreme Court noted in First National Maintenance Corp. v. N. L. R. B., 452 U.S. 666, 101 S. Ct. 2573, 69 L. Ed. 2d 318, 325 (1981),
There is no question that subcontracting resulting in layoff or job displacement, otherwise known as substitutional subcontracting, intimately and directly affects the work and welfare of public employees, and no statute or regulation preempts the subject. Thus, the only question to be resolved is whether mandatory negotiation of the incidences of subcontracting would significantly interfere with the public employer‘s exercise of inherent managerial prerogative in determining governmental policy.
As the late Judge Morgan noted in her thoughtful dissent in the Appellate Division below, this case presents the classic conflict as described in Board of Education of Woodstown-Pilesgrove Regional School District v. Woodstown-Pilesgrove Regional Education Association, 81 N.J. 582 (1980). Woodstown directs that when a conflict arises a weighing or balancing must be made. Id. at 591.
To strike the balance between what is and is not significant interference, that Court said that when the dominant issue is a managerial prerogative, there is no obligation to negotiate. However, when the dominant issue is the legislative policy favoring a viable bargaining process to produce stability and efficiency in public employment, then bargaining is appropriate. Woodstown, supra at 591.
At oral argument, public employees’ counsel conceded that the language of the clauses had to be modified to limit negotiation or discussion to situations in which public employee displacement by a private work force would occur solely for economic reasons. If the State were to make a decision to discontinue providing a service, if State employees lacked requisite skills to perform a
While it may be true that the ultimate substantive question of whether to subcontract is predominantly an inherent managerial prerogative implicating an important policy decision, it is equally true that negotiating the incidences of that decision does not significantly interfere with the exercise of that prerogative.
The Appellate Division treated the contract provisions as requiring negotiation of the ultimate, substantive issue of subcontracting. While the language of the clauses is susceptible of that interpretation, the public employees actually sought the opportunity to negotiate what may be called the effects of a decision to subcontract. Such incidences may include, but are not limited to, procedural issues such as the amount of notice to be given prior to subcontracting, the timing of transfers or layoffs, and, in addition, the issue of give-backs, i.e., whether public employees are willing to perform the same job at a price competitive with the private replacements.2 Thus, the public employees sought a procedural right to present to the public employer the representative‘s position on the economic issue in the hopes of persuading the employer not to subcontract. The
Taken in that context, the Woodstown balance should be struck favoring negotiability of the incidences of the decision to subcontract. Negotiation of the effects of the decision would not significantly interfere with the exercise of the inherent managerial prerogative. That prerogative is exercised in the making of the substantive decision itself. Conversely, the preeminent legislative policy favoring labor stability and efficiency would be served by allowing negotiation of the procedural effects of the decision on employees. It would also be served by allowing public employees to try to demonstrate that they could more efficiently and economically perform their tasks than could subcontractors.
Moreover, the subjects sought to be negotiated were well within the traditional guidelines for negotiability that we have suggested in the past. Negotiation on matters that intimately affect the work and welfare of public employees without significantly interfering with policy determinations is allowed. Thus, the Court has held that a contract interpretation as to whether or not a school board may unilaterally extend special education teachers’ working hours without additional compensation was arbitrable, Bd. of Ed. Englewood v. Englewood Teachers, 64 N.J. 1 (1973), while on a broader scale school hours and school calendar were not negotiable, as the determination of the calendar is a major educational policy traditionally an exclusive responsibility of the college administration. Burlington Cty. Col. Fac. Assoc. v. Bd. of Trustees, 64 N.J. 10 (1973). Thus, the
Nonetheless, we have distinguished between substantive policy making powers of employers and procedural rights of employees. We have held that promotional procedures are negotiable terms and conditions of employment even though promotional criteria are not. State v. State Supervisory Employees Assn., 78 N.J. at 90-91.
The private sector analogy, again, while not controlling, is instructive. In First National Maintenance Corp., supra, the interest of employees, the goals of the National Labor Relations Act, and the right of an employer to run his business are carefully balanced. The Supreme Court found that although the union was not permitted to participate in an employer‘s decision to shut down part of its business solely for economic reasons, it was, nonetheless, guaranteed a significant opportunity to bargain about the effects of the decision on job security. That Court reasoned that the union would be impelled to offer concessions, information, and alternatives that might be helpful to management or forestall or prevent the termination of jobs. 452 U.S. 666, 101 S. Ct. 2573, 69 L. Ed. 2d at 332.
Similarly, in International Ladies’ Garment Workers U. v. N.L.R.B., 463 F.2d 907 (D.C. Cir. 1972), the Court of Appeals decided that an employer was obliged to afford its employees an opportunity to meet legitimate complaints about labor costs before ousting them from their jobs and relocating the plant. And, finally, in Van Buren Pub. Sch. Dist. v. Wayne Cty. Cir. J., 61 Mich. App. 6, 232 N.W.2d 278 (App. Ct. 1975), the court considered the beneficial impact of collective negotiations on the government‘s proposal to contract out public work, saying:
We are not convinced that bargaining would have served no purpose. The merits of Van Buren‘s decision to subcontract are not so clear as to eliminate the need for discussion. Union input might reveal aspects of the problem previously ignored or inadequately studied by Van Buren. The union may well be able to offer an alternative to the one chosen by Van Buren which would fairly protect the interests and meet the objectives of both. Surely discussion of the subject would have done much to “promote industrial peace” ... [E]xplanation at the bargaining table will sooner quell anger than receipt of a tersely worded termination slip. [232 N.W.2d at 288].
II.
In addition to these analytical considerations of the application of the stated principles to the facts of this case, limiting public employee involvement in subcontracting decisions runs counter to the fundamental goals of our development of the law of public employment bargaining. I agree that democratic processes and accountability must be protected. Ante at 408. I suggest that in the long run this end will be better served by fostering discussions between the public employer and public employee.
Regardless of how the decision to subcontract is made, it is clear that substitutional subcontracting conflicts with the goal of maintaining democratic accountability in state government. That such accountability is vital to a functioning democracy is the fundamental premise of our decisions in public sector scope of negotiations cases. Ridgefield Park Ed. Ass‘n v. Ridgefield Park Bd. of Ed., 78 N.J. 144 (1978).
Most would agree that accountability is best ensured where elected or appointed officials exercise direct control over those who carry out state functions. It stands to reason that private workers are inherently less accountable than public employees. Their allegiance runs to their private employer. The “merit and
Moreover, the concern that negotiation on the issue of subcontracting would be “inimical to the democratic process,” ante at 408, is not compelling when the interest at stake is the ability of an administrator unilaterally to substitute private employees for public ones in the absence of legislative authorization or agency rulemaking.
Although it is true that the troublesome efforts to comply with the rules and regulations of the Civil Service Commission may encourage some to seek alternative means to deliver state services,5 our Constitution and laws do not contemplate the subcontracting of state services as a normal event.
The majority addresses this issue by citing two cases that upheld the legality of a legislative decision to exclude certain public employees from the civil service law. Ante at 406-407. These cases are of limited relevance here, however, where the issue is whether the negotiations would impair democratic processes by burdening an administrative decision to subcontract public employment.
For affirmance in part and reversal in part — Chief Justice WILENTZ and Justices PASHMAN, CLIFFORD, SCHREIBER and POLLOCK — 5.
Concurring in part and dissenting in part — Justices HANDLER and O‘HERN — 2.