In re I/M/O Town of Harrison & Fraternal Order of Police, Lodge No. 116
| Decision Date | 15 April 2015 |
| Docket Number | A-0195-11T2, A-0124-11T2, A-0208-11T2, A-0123-11T2, A-0099-11T2, A-0157-11T2, A-0159-11T2, A-0158-11T2,DOCKET NO. A-0083-11T2 |
| Citation | 440 N.J.Super. 268,112 A.3d 1168 |
| Parties | I/M/O TOWN OF HARRISON AND FRATERNAL ORDER OF POLICE, LODGE NO. 116. I/M/O Vernon Township PBA Local 285 Contract. I/M/O Borough of Ramsey and PBA Local No. 155. I/M/O Township of Woodbridge and PBA Local 38. I/M/O City of Linden and FMBA Local No. 234. I/M/O Town of Harrison and FMBA Local No. 22. I/M/O Town of Harrison and PBA Local No. 22. I/M/O Town of Harrison and FMBA Local No. 22. I/M/O City of Linden and FMBA Local 234. |
| Court | New Jersey Superior Court — Appellate Division |
Paul L. Kleinbaum, Newark, argued the cause for appellant SOA 22A in A–0083–11 (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Kleinbaum, on the brief).
Markowitz & Richman, attorneys for appellant Town of Harrison and Fraternal Order of Police, Lodge No. 116 in A–0083–11 (Matthew D. Areman, on the brief).
James M. Mets argued the cause for appellant Vernon Township Local 285 Contract in A–0099–11 (Mets Schiro & McGovern, LLP, attorneys; Mr. Mets and Brian J. Manetta, Iselin, on the brief).
Paul L. Kleinbaum argued the cause for appellant Borough of Ramsay and PBA Local No. 155 in A–0123–11 (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Kleinbaum and Marissa A. McAleer, Newark, on the brief).
Paul L. Kleinbaum argued the cause for appellant Township of Woodbridge and PBA Local 38 in A–0124–11 (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Kleinbaum and Marissa A. McAleer, Newark, on the brief).
Daniel J. McCarthy, Cranford, argued the cause for appellant City of Linden and FMBA Local No. 234 in A–0157–11 (John G. Hudak, City attorney, Mr. McCarthy, on the brief).
Craig S. Gumpel, Livingston, argued the cause for appellant FMBA Local No. 234 in A–0157–11 (Mr. Gumpel and Bassel Bakhos, Parsippany, on the brief).
Craig S. Gumpel, Livingston, argued the cause for appellant Town of Harrison and FMBA Local No. 22 in A–0158–11 (Mr. Gumpel and Bassel Bakhos, Parsippany, on the brief).
Paul L. Kleinbaum argued the cause for appellant Town of Harrison and PBA Local No. 22 in A–0159–11 (Zazzali, Fagella, Nowak, Kleinbaum & Freidman, attorneys; Mr. Kleinbaum and Marissa A. McAleer, Newark, on the brief).
Javerbaum, Wurgaft, Hicks, Kahn, Wikstorm & Sinns, attorneys for appellants in Town of Harrison and FMBA Local 22 in A–0195–11, join in the briefs of co-appellants.
Craig S. Gumpel, Livingston, argued the cause for appellant City of Linden and FMBA Local 234 in A–0208–11 (Mr. Gumpel and Bassel Bakhos, Parsippany, on the brief).
Eileen S. Den Bleyker, Senior Deputy Attorney General, argued the cause for respondent New Jersey Division of Pensions and Benefits (John J. Hoffman, Acting Attorney General, attorney; Ms. Den Bleyker, on the brief).
Before Judges FUENTES, ASHRAFI and O'CONNOR.
The opinion of the court was delivered by
FUENTES, P.J.A.D.
In this opinion, we decide nine appeals filed by five municipalities and four collective bargaining agents (unions) that represent police officers and firefighters employed by these municipalities. Although the respective functions of these appellants and the traditional roles they have historically played have cast them as antagonists, they speak with one voice here. These parties have mounted a collective legal challenge to the Acting Director of the Division of Pensions and Benefits' decision to refuse to implement the final determination of the Board of Trustees of the Police and Firemen's Retirement System (PFRS Board of Trustees), which found certain senior officer and longevity pay provisions in the collective bargaining agreements entered into by appellants were creditable compensation for pension purposes under N.J.S.A. 43:16A–1(26)(a).
Thus, to be clear, we do not decide here whether the particular longevity pay provisions in these collective bargaining agreements constitute creditable compensation benefits as defined in N.J.S.A. 43:16A–1(26)(a) or N.J.A.C. 17:4–4.1. The singular legal question before us is this: Does the Acting Director of the Division of Pensions and Benefits have the legal authority to refuse to implement a final decision of the PFRS Board of Trustees because the Acting Director has independently concluded that the decision of the PFRS Board of Trustees is legally incorrect? After reviewing the statutory scheme established by the Legislature in the Police and Firemen's Retirement System Act, N.J.S.A. 43:16A–1 to –68, and the regulations promulgated by the PFRS Board of Trustees to administer this system, we conclude the answer to this question is unequivocally “no.”
The Legislature vested the PFRS Board of Trustees with exclusive authority and “responsibility for the proper operation of the retirement system.” N.J.S.A. 43:16A–13(a)(1). Although the Division of Pensions and Benefits has the power and responsibility to “investigate increases in compensation reported for credit which exceed reasonably anticipated annual compensation increases for members of the retirement system[,] ... cases where a violation of the statute or rules is suspected shall be referred to the Board. ” N.J.A.C. 17:4–4.1(d) (emphasis added).
The PFRS Board of Trustees has the authority to “question the compensation of any member or retiree to determine its credibility where there is evidence that compensation reported as base salary may include extra compensation.” N.J.A.C. 17:4–4.1(b). Only this court has the legal authority to overturn a final decision of the PFRS Board of Trustees in the context of an appeal filed by a member of the PFRS. See N.J.A.C. 17:4–1.7(a) ; R. 2:2–3(a)(2). The action taken by the Acting Director in the cases before us lacked statutory or regulatory authority and was therefore ultra vires, without legal force or effect. See Lourdes Med. Ctr. v. Bd. of Review, 197 N.J. 339, 378, 963 A. 2d 289 (2009).
We start our factual recitation with a brief overview of the longevity salary increase provisions in the various collective bargaining agreements negotiated by the municipalities and unions that have appealed the Acting Director's actions.
We have consolidated the following appeals affecting the Town of Harrison: I/M/O Town of Harrison and PBA Local No. 22, Docket No. A–0159–11; I/M/O Town of Harrison and FOP, Lodge No. 116, Docket No. A–0083–11; I/M/O Town of Harrison and FMBA Local No. 22, Docket No. A–0158–11; and I/M/O Town of Harrison and FMBA Local No. 22, PBA Local No. 22, and SOA 22A, Docket No. A–0195–11. The Fraternal Order of Police, Lodge No. 116 (FOP Lodge 116), Police Benevolent Association, Local No. 22 (PBA Local 22), and Firemen's Mutual Benevolent Association, Local No. 22 (FMBA Local 22) filed briefs in support of these appeals and join in each other's arguments. The Town of Harrison has also joined in these appeals challenging the action taken by the Acting Director.
FOP Lodge 116 identifies itself as “a labor organization and representative within the meaning of N.J.S.A. 34:13A–3(e).” This appellant represents all uniformed officers in the Harrison Police Department holding the ranks of Sergeant, Lieutenant and Captain, for purposes of collective bargaining. In 2007, FOP Lodge 116 was certified as the exclusive bargaining agent for all superior officers employed by Harrison. FOP Lodge 116 entered into a collective bargaining agreement with Harrison, which was valid from January 1, 2007 through December 31, 2011. Before 2007, PBA Local 22 represented police officers holding a supervisory rank.
Since 1999, the two principal bargaining agents representing superior officers in the Harrison Police Department1 negotiated a provision in their collective bargaining agreements allowing for increases to officers' base salary contingent upon their years of service with the Town. This longevity clause provides as follows:
This precise language was adopted in the Article XV–Longevity provision of the Harrison salary ordinance to mirror the provisions contained in the parties' collective negotiations agreement. Article XVIII was included, verbatim, in the contract between Harrison and PBA Local 22, effective January 1, 1999 through December 31, 2001. By letter dated June 15, 2000, Regina M. Trauner, the secretary of the PFRS Board of Trustees at the time, formally advised Harrison that the PFRS Board of Trustees found the “stipend referred to in Article XIX Workday of the agreement” was “not considered creditable for pension purposes.”
Because Trauner did not mention the longevity provision in her June 15, 2000 letter, Harrison and FOP Lodge 116 inferred from this absence of criticism that the PFRS Board of Trustees had tacitly approved the longevity provision.2 According to FOP Lodge 116, it and Harrison “continued to negotiate successor agreements” based on this “tacit approval of the negotiated longevity provision[.]” Article XVIII remained in the 2007–2011 collective bargaining agreement between FOP Lodge 116 and Harrison.
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