Boyan, Matter of
| Decision Date | 26 February 1991 |
| Citation | 587 A.2d 640,246 N.J.Super. 300 |
| Parties | In the Matter of William L. BOYAN and Isaac G. McNatt, Department of Labor. William L. BOYAN and Isaac McNatt, Plaintiffs-Appellants, v. Feather O'CONNOR, Treasurer, State of New Jersey, Richard B. Standiford, Director, Budget and Accounting, Treasury Department, State of New Jersey and Eugene McCaffrey, Commissioner, Department of Personnel, State of New Jersey, Jointly and Severally, Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
Charles J. Casale, Jr., Trenton, for plaintiffs-appellants, and on the brief and supplemental brief.
Lewis A. Scheindlin, Deputy Atty. Gen., for defendants-respondents (Robert J. Del Tufo, Atty. Gen., William Harla, Asst. Atty. Gen., of counsel; Lewis A. Scheindlin, on the brief and supplemental letter brief).
Before Judges PETRELLA, BILDER and MUIR, Jr.
Appellants William L. Boyan and Isaac G. McNatt are both Judges of the Division of Workers' Compensation, and as such are employees in the executive branch of State Government. They appeal from a decision of the State Treasurer, the Commissioner of Personnel, and the Director of the Division of Budget and Accounting, who collectively have undertaken to function under a recurring provision in the annual Appropriations Act as a committee which has been referred to as the "Salary Adjustment Committee" (SAC). 1 This appeal involves appellants' claims to entitlement to 1987 and 1988 annual salary increments, "steps" in the salary range, as opposed to merit increases. We conclude that the statute prevails over any contrary rule or regulation.
In June 1988, Boyan and McNatt instituted an action in lieu of prerogative writs in the Law Division against the former State Treasurer, the former Director of Budget and Accounting, and the former Commissioner of the Department of Personnel seeking to compel payment of their annual salary "in salary range 39" under N.J.S.A. 34:15-49 at the appropriate step of the State Compensation Schedule, as well as money damages. Respondents asserted seven separate affirmative defenses, including failure to exhaust administrative remedies. The Law Division judge relied on R. 1:13-4(a) to transfer the complaint to SAC on November 10, 1988. SAC thereafter denied appellants' claim in a May 22, 1989 decision, reissued 2 June 7, 1989, which also incorporated a copy of SAC's July 30, 1986 decision which had involved Boyan.
The facts are not complicated. Boyan 3 and McNatt were appointed Judges of the Division of Workers' Compensation in January 1982 by the Governor, pursuant to N.J.S.A. 34:15-49. That position is considered in the unclassified service ( N.J.S.A. 11A:3-4(a)), and is in the Department of Labor in the executive branch of government. See N.J.S.A. 34:1A-11; N.J.S.A. 34:1A-5.1.
On December 22, 1984 Boyan and McNatt each received raises in salary to $51,314.79 per year. SAC approved salary increases in range 39 each year from 1985 through 1988, which both appellants received. McNatt's salary was increased on March 28, 1987 to $64,731 and on November 1, 1987 to $67,967.55. As of March 22, 1987, Boyan was earning $61,702.46. His salary was increased on November 1, 1987 to $65,404.61. As of the date of SAC's decision which is the subject of this appeal, Boyan was earning $70,000 per year and McNatt was earning in excess of $73,000 per year.
The compensation schedule, as adopted by the Merit System Board of the Department of Personnel and in effect on September 12, 1987, listed the minimum salary for range 39 4 as $56,639.34 at step one, with a maximum salary for that range at step nine of $79,295.82. Each step, listed as an "increment" on that compensation schedule, was $2,832.06 higher than the previous step.
Since appellants were both appointed in January 1982, as of April 1988, in the normal course, they would have progressed to the seventh step. 5 At that step, appellants would have received $73,631.70. However, as noted, McNatt was paid at the rate of $67,967.55; Boyan at a rate of $65,404.61. A disparity still exists between their salaries, and Boyan questions the basis for such disparity.
In its June 17, 1989 decision SAC, relying on its own salary "rules and regulations" 6 governing employees whose salaries exceed $50,000 per year, rejected appellants' claims of entitlement to step increases. SAC also relied on the fact that in recent years its regulations have consistently provided no automatic incremental pay increases for employee salaries over $50,000. Rather, pay increases for such "employees are based on performance and require department head approval." SAC concluded that N.J.S.A. 34:15-49 does not require a different result for compensation judges, and found no basis for their entitlement to automatic step increases.
Essentially, the difference between the rate at which Boyan and McNatt are paid and the rate to which they claim entitlement, is the result of SAC's interpretation of N.J.S.A. 34:15-49 and its policy of treating executive branch salaries in excess of $50,000 differently than those below that figure. In concluding that, under its regulations, state employees in the executive branch of government, including Judges of Workers' Compensation whose salaries exceed $50,000 are not entitled to receive automatic incremental pay increases, SAC noted in its May 22, 1989 final decision:
It must be emphasized that Salary Regulations governing employees whose salaries exceed $50,000.00 have been in place for this administration and the Legislature has continued to direct that the Committee promulgate rules and regulations governing rates of pay in the annual Appropriations Act. Clearly, the Legislature is aware of this longstanding process for Executive Branch employees which has continued without legislative interference. See Pringle v. Department of Civil Service, 45 N.J. 329 (1965). Employees whose salaries reach the $50,000.00 threshold no longer receive automatic or standard incremental pay increases. Rather, pay increases for such employees are based on performance and require department head approval. Thus, for compensation purposes, standard increment steps are no longer applicable to employees whose salaries have reached the $50,000.00 limit.
The first sentence quoted above from SAC's 1989 decision is somewhat misleading. Although employees' salaries which exceed $50,000 have been subjected to the contested regulations adopted by SAC, it is inappropriate to couple that statement with the Legislature's limited direction in the Appropriations Act to promulgate rules and regulations confined to "salary ranges and rates of pay." However, the principal issue before us is whether N.J.S.A. 34:15-49 expresses a legislative intent to treat salaries of Judges of Workers' Compensation differently from that of other executive branch state employees in salary range 39.
Appellants argue that they are entitled to the annual increment in their salary range, and that SAC did not act within its enabling legislation because its "rules and regulations" in effect, "repeal[ed] express provisions within N.J.S.A. 34:15-49." They argue that N.J.S.A. 34:15-49 requires annual increases ("steps") for Judges of Workers' Compensation since the statute states: "The salary of the judges of compensation shall be as provided in salary range 39 of the Compensation Plan...." That section goes on to state:
In establishing the applicable increment category level of the ... judges of compensation appropriate credit shall be given for years of service heretofore and hereafter as judge of compensation.... No subsequent annual increment for a judge of compensation shall be made unless the judge of compensation is evaluated favorably by the director of the division on the basis of recommendations made by the supervising judge of compensation.
During various periods 7 the Legislature has included in the Appropriations Act language which authorizes designated officials to establish "rules and regulations governing salary ranges and rates of pay." The applicable statutory language for fiscal year 1988, the most recent year considered in SAC's decision, provided:
The State Treasurer, the Commissioner of Personnel, and the Director of the Division of Budget and Accounting shall establish rules and regulations governing salary ranges and rates of pay. The implementation of such rules and regulations shall be made effective at the beginning of the bi-weekly pay period nearest July 1, 1988 or thereafter as determined by such rules and regulations, with timely notification of such rules and regulations to the Joint Budget Oversight Committee or its successor. [L. 1988, c. 47, at 269].
Similar language, except for the applicable effective date, appeared in each Appropriations Act for Fiscal Years 1986 and 1987. See L. 1987, c. 154, at 252; L. 1986, c. 41, at 247.
The joint regulations adopted by the Merit System Board and SAC, pursuant to the quoted language in the Appropriations Act, deal with salaries of employees in the executive branch of state government who earn $50,000 or more. Rule SR# 8 was adopted as an amendment to the State Compensation Plan by the Merit System Board at its meeting of September 22, 1987, to govern when raises are to be given, 8 and states:
The Commissioner of the Department of Personnel and the Director, Division of Budget and Accounting, shall implement the following salary regulations for the Executive Branch of State Government for Fiscal Year 1988, which shall be applicable to employees whose class titles are assigned to Employee Relations Groupings D, M, V, W, X, Y, and Z and whose annual salaries are at or exceed $50,000 during Fiscal Year 1988 I. Increases
A. Covered employees may receive performance-based merit increases only. Employees whose annual salary on the day immediately preceding their anniversary date or last increase was at or over...
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