Board of Ed. of Bernards Tp., Somerset County v. Bernards Tp. Ed. Ass'n

• Decision Date: 15 March 1979
• Citation: 79 N.J. 311,399 A.2d 620
• Parties: , 101 L.R.R.M. (BNA) 2251 BOARD OF EDUCATION OF the TOWNSHIP OF BERNARDS, SOMERSET COUNTY, Plaintiff- Respondent, v. BERNARDS TOWNSHIP EDUCATION ASSOCIATION, Defendant-Appellant, and American Arbitration Association, New Jersey Education Association and Samuel Ranhand, Defendants.
• Court: New Jersey Supreme Court

Page 311

79 N.J. 311

399 A.2d 620, 101 L.R.R.M. (BNA) 2251

BOARD OF EDUCATION OF the TOWNSHIP OF BERNARDS, SOMERSET COUNTY, Plaintiff- Respondent, v. BERNARDS TOWNSHIP EDUCATION ASSOCIATION, Defendant-Appellant and American Arbitration Association, New Jersey Education Association and Samuel Ranhand, Defendants.

Supreme Court of New Jersey.

Argued Jan. 22, 1979.

Decided March 15, 1979.

Sanford R. Oxfeld, Newark, for defendant-appellant (Rothbard, Harris & Oxfeld, Newark, attorneys).

Sidney H. Lehmann, Gen. Counsel, Trenton, for amicus curiae, Public Employment Relations Com'n (Sidney H. Lehmann, on the brief and attorney; James F. Schwerin, Deputy Gen. Counsel, Trenton, on the brief).

Gordon A. Millspaugh, Jr., Newark, for plaintiff-respondent (Young, Rose & Millspaugh, Newark, attorneys; Gordon A. Millspaugh, Jr., and Amy R. Piro, Newark, on the briefs).

David W. Carroll, Gen. Counsel, Trenton, for amicus curiae, New Jersey School Boards Ass'n (David W. Carroll, on the brief and attorney; John E. Collins, Trenton, on the brief).

Erminie L. Conley, Asst. Atty. Gen., for amicus curiae, New Jersey State Com'r of Ed. (John J. Degnan, Atty. Gen., attorney).

The opinion of the court was delivered by

PASHMAN, J.

This case requires us to both apply and expand upon the principles which we enunciated last Term in State v. State Supervisory Employees Ass'n, 78 N.J. 54, 393 A.2d 233 (1978), Township of West Windsor v. PERC, 78 N.J. 98, 393 A.2d 255 (1978), and Ridgefield Park Education Ass'n v. Ridgefield Park Board of Education, 78 N.J. 144, 393 A.2d 278 (1978). Specifically, we must determine the validity of a clause of a public sector collective agreement which provides that disputes concerning the withholding of a teacher's salary increment "for inefficiency or other good cause," N.J.S.A. 18A:29-14, shall be subject to "advisory," as opposed to "binding," arbitration.

The facts of this case are not in dispute. On July 1, 1975, the Bernards Township Board of Education (Board) and the Bernards Township Education Association (Association) the majority representative of the Board's teaching employees entered into a collective agreement covering the 1975-1976 school year. Article XVIII, paragraph D of that agreement provided in part:

An employment or adjustment increment (in salary for any teacher) may be withheld (by the Board) in whole or in part for inefficiency or other just cause related to the performance of duties and only in accordance with the following:

4. Any action by the Board to withhold an increment or any part thereof shall be subject to appeal to arbitration * * * . The arbitrator shall have the authority to advise the restoration of all or part of the increment withheld * * * .

On March 17, 1976, the principal of William Annin Junior High School informed teacher Harold Cutting that he would advise the Board to withhold Cutting's salary increment for the 1976-1977 school year. In response to this communication, the Association filed with the Board a grievance on Cutting's behalf. By letter dated April 28, 1976, the Board notified Cutting that the grievance was denied and that his salary increment would be withheld. A demand for arbitration was thereupon filed in accordance with Article XVIII, paragraph D of the parties' collective agreement.

Rather than accede to the Association's demand, the Board instituted suit in the Superior Court seeking to enjoin the arbitration. The Board asserted, Inter alia, that a decision to withhold a teacher's salary increment "for inefficiency or other good cause," N.J.S.A. 18A:29-14, is a matter of managerial prerogative and hence not subject to arbitration. On November 5, 1976, the injunction was granted. The Appellate Division affirmed in an unpublished Per curiam opinion dated February 23, 1978. We granted the Association's petition for certification. 77 N.J. 499 (1978). We now reverse.

I

A

Before discussing the merits, we feel constrained to comment upon the procedural aspects of the present dispute. As we made clear last Term, under the existing legislative scheme it may be necessary to invoke the jurisdiction of both the Public Employment Relations Commission (PERC) and the Superior Court in order to completely resolve a disagreement concerning the arbitrability of a particular dispute. See Ridgefield Park, supra, 78 N.J. at 153-156, 393 A.2d 278; State Supervisory Employees, supra, 78 N.J. at 83-84, 393 A.2d 233. As stated in Ridgefield Park:

When one party claims that a given dispute is arbitrable under the contract and the other party resists arbitration, the party desiring arbitration should seek an order from the Superior Court compelling arbitration. * * * (However,) (w)here the trial judge determines that the real controversy is not one of contractual arbitrability, but rather concerns the propriety of the parties negotiating and agreeing on the item in dispute, he should refrain from passing on the merits of that issue.

PERC has primary jurisdiction to make a determination on the merits of the question of whether the subject matter of a particular dispute is within the scope of collective negotiations. * * * (78 N.J. at 153-154, 393 A.2d at 282)

These guidelines were not followed in the present dispute. In seeking the injunction in Superior Court, the Board asserted, Inter alia, that a decision to withhold a teacher's salary increment is managerial in nature and hence any agreement to subject that decision to arbitration is Ultra vires and unenforceable. Thus, the gravamen of the Board's complaint was that the subject matter of its dispute with the Association did not fall within the scope of collective negotiations. Consequently, the trial judge should have refrained from ruling whether the parties had contractually agreed to arbitrate the dispute until PERC had decided the threshold issue of negotiability. See Ridgefield Park, supra, 78 N.J. at 155, 393 A.2d 278.

The Board argues that the above guidelines are inapplicable to the present controversy because its resolution requires a reconciliation of N.J.S.A. 18A:29-14 a statute which is part of the Education Law, N.J.S.A. 18A:1-1 Et seq. with the Employer-Employee Relations Act, N.J.S.A. 34:13A-1 Et seq., and not merely an interpretation of the latter statute. We conclude that the Board's contention in this regard lacks merit.

As we emphasized last Term, PERC has been designated by the Legislature as the forum for initial determination of scope of negotiations matters because of its special expertise in this area. See Ridgefield Park, supra, 78 N.J. at 153-156, 393 A.2d 278; State Supervisory Employees, supra, 78 N.J. at 83-84, 393 A.2d 233. In carrying out its duties, PERC will at times be required to interpret statutes other than the Employer-Employee Relations Act. Indeed, in no other way could that body implement our holding in State Supervisory Employees that the terms of a collective agreement cannot contravene a specific legislative enactment. To therefore hold that PERC is ousted of jurisdiction in any controversy involving an asserted conflict between a collective agreement and a statute not part of the Employer-Employee Relations Act would deprive our courts of that body's expertise in a large class of scope of negotiations disputes. We cannot believe that the Legislature intended such a result. Consequently, we conclude that PERC's primary jurisdiction does extend to controversies involving asserted conflicts between the Employer-Employee Relations Act and other statutory schemes.

B

Although the proper procedure was not followed, we have concluded that a remand to PERC at this late date would serve no salutary purpose. Hence, we will decide the issues posed at the present juncture.

We have recently noted that the doctrine of exhaustion of administrative remedies serves three primary goals: (1) the rule ensures that claims will be heard, as a preliminary matter, by a body possessing expertise in the area; (2) administrative exhaustion allows the parties to create a factual record necessary for meaningful appellate review; and (3) the agency decision may satisfy the parties and thus obviate the need for unnecessary adjudication. See Paterson Redevelopment Agency v. Schulman, 78 N.J. 378, 386-388, 396 A.2d 573 (1979).

Each of these goals has been satisfied. Although PERC's jurisdiction was not invoked, this Court has not been deprived of that body's expertise. Not only has PERC, in an unrelated case, decided the same question here at issue, See East Brunswick Bd. of Ed., PERC No. 77-6, 2 NJPER 279 (August 25, 1976), but it has also accepted this Court's invitation to participate in this very case as Amicus curiae. Indeed, PERC itself argues against a remand, stating that sending the case back at this point "would not add anything as this Court already has the benefit of PERC's thinking on this subject * * * ."

The factual pattern of the present controversy is both uncomplicated and undisputed. Moreover, those facts necessary for our decision were adequately developed in the Superior Court below. Finally, we are convinced that a remand will not obviate the need for us to ultimately decide this issue. The precise question herein posed has already arisen in three suits aside from the present one. See Board of Educ. of Edison Twp. v. Edison Twp. Educ. Ass'n, 161 N.J.Super. 155, 391 A.2d 526 (App.Div. 1978); Education Ass'n of Passaic v. Passaic Bd. of Educ., 166 N.J.Super. 250, 399 A.2d 980 (App.Div. 1977); East Brunswick Bd. of Educ., PERC No. 77-6, 2 NJPER 279 (August 25, 1976). Cf. Clifton Teachers Ass'n, Inc. v. Clifton Bd. of Educ., 136 N.J.Super. 336, 346 A.2d 107 (App.Div. 1975). Hence, the issue is both important and likely to recur.

It should also be noted that our Ridgefield Park and State Supervisory Employees opinions were rendered subsequent to the Appellate Division decision in this case. Thus, the Superior Court did not retain jurisdiction through any...