Board of Educ. of Tp. of Neptune in County of Monmouth v. Neptune Tp. Educ. Ass'n

• Citation: 675 A.2d 611,144 N.J. 16
• Parties: , 152 L.R.R.M. (BNA) 2129, 115 Ed. Law Rep. 372 THE BOARD OF EDUCATION OF The TOWNSHIP OF NEPTUNE IN The COUNTY OF MONMOUTH, Petitioner-Appellant, v. THE NEPTUNE TOWNSHIP EDUCATION ASSOCIATION and The Neptune Township Principals Association, Respondents-Respondents.
• Decision Date: 08 May 1996
• Court: United States State Supreme Court (New Jersey)

Page 16

144 N.J. 16

675 A.2d 611, 152 L.R.R.M. (BNA) 2129,

115 Ed. Law Rep. 372

THE BOARD OF EDUCATION OF The TOWNSHIP OF NEPTUNE IN The COUNTY OF MONMOUTH, Petitioner-Appellant, v. THE NEPTUNE TOWNSHIP EDUCATION ASSOCIATION and The Neptune Township Principals Association, Respondents-Respondents.

Supreme Court of New Jersey.

Argued Feb. 14, 1996.

Decided May 8, 1996.

James T. Hundley, Ocean Grove, for appellant (Hundley, Parry & Hopkins, attorneys).

Stephen B. Hunte, Somerville, for respondent Neptune Township Education Association (Klausner, Hunter & Seid, attorneys; Lawrence J. Van Wess, on the brief).

Wayne J. Oppito, Toms River, for respondent The Neptune Township Principals Association.

Robert H. Stoloff, Assistant Attorney General, for respondent New Jersey State Board of Education (Deborah T. Poritz, Attorney General of New Jersey, attorney; Joseph L. Yannotti, Assistant Attorney General, of counsel; Arlene Goldfus Lutz, Deputy Attorney General, on the brief).

Kim Chapman, Associate Counsel, for amicus curiae New Jersey School Boards Association (Susan E. Galante, Director, Legal Department, attorney).

Kathleen A. Naprstek, Newark, for amicus curiae New Jersey Education Association (Zazzali, Zazzali, Fagella & Nowak, attorneys).

The opinion of the Court was delivered by

GARIBALDI, J.

The sole issue in this appeal is whether, after the expiration of a three-year collective bargaining agreement (CBA), N.J.S.A. 18A:29-4.1 prohibits a board of education from paying to its teaching staff salary increments set forth in the expired CBA.

I

On September 14, 1988, the Neptune Board of Education (the Board) entered into a three-year contract, effective July 1, 1988 and ending June 30, 1991, with the Neptune Education Association (NEA). Similar three-year agreements were reached with the Neptune Principals Association (NPA) and the Custodians' Association. Currently, the custodians are also represented by the NEA. Each contract contained various salary guides providing for increments in pay as employees gained additional years of service. The contract also stated that both sides "expressly understood that [the contract] shall expire on the date indicated," July 1, 1991.

As the expiration of the contract approached, NEA and NPA (collectively, the unions) and the Board were unable to agree on a new contract. On June 28, 1991, NEA's counsel sent a letter to the Board informing it that NEA would institute suit on July 1 if the Board did not move those employees represented by the NEA to the next step on the expired salary guides. Despite the fact that the salary guides were part of the expired negotiated agreements, the Board complied. On July 1, all the employees who were not already at the top of a salary guide were moved to the next step of their respective salary guides. Their salaries were adjusted accordingly.

Although it complied with the unions' request, the Board also filed a petition with the Commissioner of Education seeking a declaratory judgment that it was prohibited by N.J.S.A. 18A:29-4.1 from paying salary increments required under the expired contracts. The Board contended that it could not pay increments because that would result in extending the binding nature of the schedule for a fourth year, beyond the mandate of the statute. In November 1991, the Board reached agreement with the NPA, and in February 1992 with the NEA, on new three-year contracts.

After preliminary proceedings, not here relevant, the Commissioner of Education (the Commissioner) referred the matter to the Office of Administrative Law. The Administrative Law Judge (ALJ) ruled for the Board. He decided that N.J.S.A. 18A:29-4.1 preempted labor law and prohibited the Board from paying salary increments beyond the date of the contract. That statute originally mandated that contracts be binding for two years, but it had been amended in 1987 to allow contracts to be binding for one, two or three years. The ALJ, therefore, reasoned that the statute prohibited the Board from following the contract's terms beyond the end of that period and extending them to a fourth year.

The Commissioner reversed, holding that the education statutes did not dispose of the issue raised. The Commissioner essentially concluded that N.J.S.A. 18A:29-4.1 as now in effect neither prohibits nor mandates the payment of salary increments set forth in salary schedules included in a collective negotiations agreement that has expired. Instead she found that the case was controlled by the Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -29, "over which PERC [Public Employment Relations Commission] enjoys exclusive jurisdiction." The Commissioner dismissed the case.

The State Board affirmed substantially for the reasons expressed by the Commissioner. Board of Educ. v. Neptune Tp. Educ. Ass'n, 93 N.J.A.R.2d 791 (EDU 1993). The Board then appealed to the Appellate Division. The Appellate Division affirmed, based on the Commissioner's opinion, in an unreported per curiam opinion. However, because PERC had not participated in this proceeding, the court declined to express an opinion as to whether the issue was within PERC's exclusive jurisdiction.

We granted the Board's petition for certification. 142 N.J. 518, 665 A.2d 1111 (1995).

II

The New Jersey Constitution, art. 1, p 19, grants public employees the right to organize and to present grievances and proposals to their employers through their own elected representatives. In 1968, the Legislature enacted N.J.S.A. 34:13A-5.1 to -5.3 as part of the Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -29 (the Act), to effectuate this constitutional right. That Act created certain substantive rights and limitations, including a rule against the alteration of existing working terms and conditions. N.J.S.A. 34:13A-5.3 provides that "[p]roposed new rules or modifications of existing rules governing working conditions shall be negotiated with the majority representative before they are established." Stated negatively, this rule, known as the prescription against unilateral change of the status quo, "prohibit[s] an employer from unilaterally altering the status quo concerning mandatory bargaining topics, whether established by expired contract or by past practice, without first bargaining to impasse." Stephen F. Befort, Public Sector Bargaining: Fiscal Crisis and Unilateral Change, 69 Minn.L.Rev. 1221, 1268 (1985).

The Act does not define whether the status quo should be viewed as static or dynamic; that is, whether it should include previously scheduled salary increments or, instead, freeze the current salaries without increments. While most jurisdictions have ruled that private employers must not change a dynamic status quo, there is less unanimity in applying that rule to the public sector. Compare Indiana Educ. Employment Relations Bd. v. Mill Creek Classroom Teachers Ass'n, 456 N.E.2d 709 (Ind.1983); Board of Educ. of Springfield Public Sch. Dist. No. 186 v. Springfield Educ. Ass'n, 47 Ill.App.3d 193, 5 Ill.Dec. 374, 361 N.E.2d 697 (1977); Cobleskill Cent. Sch. Dist. v. Newman, 105 A.D.2d 564, 481 N.Y.S.2d 795 (1984); California School Employees Ass'n v. Davis Unified School Dist., 4 PERC p 11031 (Cal.1980) (adopting dynamic status quo ) with New Castle County Vocational Tech. Educ. Ass'n v. Board of Educ., 451 A.2d 1156, 1163-64 (Del.Ch.1982); Board of Trustees of Univ. of Me. v Associated Colt Staff of Univ. of Me. System, 659 A.2d 842 (Me.1995); Appeal of Milton Sch. Dist., 137 N.H. 240, 625 A.2d 1056 (1993); Fairview Sch. Dist. v. Pennsylvania Unemploy. Comp. Bd. of Review, 499 Pa. 539, 454 A.2d 517 (1982) (adopting static status quo ). See generally Befort, supra, 69 Minn.L.Rev. at 1273.

The Public Employment Relations Commission has interpreted the Act to require a dynamic status quo, including the payment of increments. See, e.g., Scotch Plains--Fanwood Bd. of Educ., 17 NJPER p 22082, aff'd, 17 NJPER p 22149 (1991) ("An employer's refusal to pay automatic salary increments contained in a recently expired contract ... is a unilateral change of the status quo and an unfair practice"); see also Howell Tp. Bd. of Educ., 11 NJPER p 16196, aff'd, 11 NJPER p 16223 (1985); City of Vineland, 7 NJPER p 12142 (1981); State of New Jersey, 7 NJPER p 12235 (1981); Rutgers, the State Univ., 5 NJPER p 10278 (1979); Hudson County, 4 NJPER p 4041 (1978).

III

New Jersey had previously codified its education law in N.J.S.A. Title 18A. "Since virtually every aspect of public education is governed by statute, the court had to reconcile conflicts" between Title 18A and the Employer-Employee Relations Act. Gary Carlson, Note, Public Sector Labor Relations: The New Jersey Supreme Court Interprets the 1974 Amendments to the Employer-Employee Relations Act, 32 Rutgers L.Rev. 62, 67 (1979). Generally, the Act and Title 18A, the education statute, are "in pari materia and should be construed together 'as the unitary and harmonious whole.' " Red Bank Bd. of Educ. v. Warrington, 138 N.J.Super. 564, 569, 351 A.2d 778 (App.Div.1976); Board of Educ. v. Rockaway Tp. Educ. Ass'n., 120 N.J.Super. 564, 569, 295 A.2d 380 (Ch.Div.1972). Nonetheless, conflicts do arise between the two statutory schemes and courts then must determine whether the Education Law or Labor Law should be accorded primary importance.

In 1973, we held that Title 18A, the Education Law, preempted the Employer-Employee Act in a case concerning whether the board of education had the authority to consolidate the chairmanships of two departments. We stated:

[I]t is our clear judicial responsibility to give continuing effect to the provisions in our Education Law without, however, frustrating the goals or terms of the Employer-Employee Relations Act. Surely, the Legislature, in adopting the very general terms of [the labor laws] did not contemplate that the local boards of education would or could abdicate their management responsibilities for the...