Communications Workers of Am. v. State

• Decision Date: 19 January 2011
• Citation: 22 A.3d 170,421 N.J.Super. 75
• Parties: COMMUNICATIONS WORKERS OF AMERICA, AFL–CIO, American Federation of State, County and Municipal Employees, AFL–CIO, Council 1, American Federation of State, County and Municipal Employees, AFL–CIO, Council 73, Plaintiffs,v.STATE of New Jersey, DEPARTMENT OF TREASURY, DIVISION OF PENSIONS AND BENEFITS and the State Health Benefits Commission, Defendants.
• Court: New Jersey Court of Chancery

421 N.J.Super. 75

22 A.3d 170

COMMUNICATIONS WORKERS OF AMERICA, AFL–CIO, American Federation of State, County and Municipal Employees, AFL–CIO, Council 1, American Federation of State, County and Municipal Employees, AFL–CIO, Council 73, Plaintiffs,

v.STATE of New Jersey, DEPARTMENT OF TREASURY, DIVISION OF PENSIONS AND BENEFITS and the State Health Benefits Commission, Defendants.

Superior Court of New Jersey,Law Division, Mercer County.

Decided Jan. 19, 2011.

Steven P. Weissman and Annmarie Pinarski, Somerset, for plaintiffs CWA and AFSCME Council 73 (Weissman & Mintz, attorneys); Sidney H. Lehmann and Edward M. Suarez, Newark, for plaintiff AFSCME Council 1 (Zazzalli Fagella Nowak Kleinbaum & Friedman, attorneys).Robert Lougy, Assistant Attorney General, for defendants (Paula T. Dow, Attorney General).FEINBERG, A.J.S.C.

This matter comes before the court by way of a verified complaint for declaratory judgment filed on August 23, 2010, by Communications Workers of America, AFL–CIO (“CWA”), the American Federation of State, County and Municipal Employees (AFSCME), AFL–CIO Council 1 (“Council 1”), and the American Federation of State, County and Municipal Employees, AFL–CIO, Council 73 (“Council 73”) (collectively “plaintiffs”). Plaintiffs are various unions and labor organizations which represent State and local public employees in collective negotiation agreements (“CNAs”) regarding the terms and conditions of employment with public employers at all levels of government in New Jersey. ¹

Defendants are the State of New Jersey, Department of Treasury, Division of Pensions and Benefits (the “State”), and the State Health Benefits Commission (“SHBC”) (collectively “defendants”). The Department of the Treasury administers SHBC and School Employee's Health Benefits Commission (“SEHBC”), which in turn, administer the State Health Benefits Plan (“SHBP”) and School Employee Health Benefits Plan (“SEHBP”), respectively.

Plaintiffs challenge the validity of legislation known as P.L. 2010, Chapter 2, Section 8 (enacted on March 22, 2010).² Chapter 2 generally makes certain changes to the benefit plans for public employees, including, pensions and health care. Section 8 of Chapter 2 imposes any changes to SHBP negotiated by the majority representatives for State employees on all State and local employees. P.L. 2010, c. 2, § 8. Plaintiffs claim Section 8 violates: (1) Article I, Paragraph 19 of the New Jersey Constitution—which grants public employees the right to organize, and present grievances and proposals, regarding the terms and conditions of employment, to their employers through representatives of their own choosing—because it imposes upon State (and local) employees SHBP changes negotiated by the majority representative selected by another State employee negotiating unit, rather than “of their own choosing;” ³ and (2) the Due Process Clauses of the Fifth and Fourteenth Amendments to the United States Constitution. Consequently, plaintiffs seek a declaratory judgment that Section 8 is unconstitutional and injunctive relief.

On September 24, 2010, the State filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. See R. 4:6–2(e). It argues Section 8 does not alter the rights of State or local public employees under Article I, Paragraph 19 of the New Jersey Constitution. It also contends Section 8 complies with the Due Processes guarantees in the United States Constitution, because it provides adequate notice regarding when, how, and to whom, it applies.

I.BACKGROUND

A. THE CHALLENGED LEGISLATION

On February 8, 2010, the Legislature introduced Senate Bill Numbers 2, 3, and 4 (“Bill 2,” “Bill 3,” and “Bill 4,” respectively). These bills, and their Assembly versions, were passed by both Houses of the Legislature, and signed into law by Governor Christopher J. Christie (“Governor Christie”) on March 22, 2010.

This suit focuses specifically on the validity of P.L. 2010, Chapter 2, Section 8.⁴

[22 A.3d 174 , 421 N.J.Super. 83]

The three bills implement the recommendations and findings of a comprehensive evaluation by the Joint Legislative Committee on Public Employee Benefits Reform (the “Committee”).⁵ The Committee was established to “terminate abuses of the pension system and control the cost of providing public employee retirement, health care and other benefits.” Executive Summary, Public Employees Benefits Reform Final Report, at 1 (2006) (“ Final Report ”). The legislation is designed to improve the fiscal strength of State and local governments, reduce taxpayer burdens, and ensure the health and pension systems remain viable for current and future employees. See generally, Final Report.

In the present case, plaintiffs challenge only Section 8 of P.L. 2010, Chapter 2. Section 8 provides that:

[a]ll changes in the provision of health care benefits through ... [SHBP and SEHBP] ... negotiate[ed] ... [by] the State and its employees ... shall be made applicable to ... participating employers and their employees at the same time and in the same manner as to State employees.

[ P.L. 2010, c. 2, § 8.]

B. FACTUAL AND PROCEDURAL HISTORY

CWA is an “international labor organization representing over 700,000 workers employed in telecommunications, publishing, broadcasting, cable TV, journalism, manufacturing, health care, customer service and public service.” It represents various State and local employees in New Jersey. It is the exclusive majority representative of four State employee negotiation units: (1) the administrative clerical; (2) professional; (3) primary level supervisors; and (4) higher level supervisors.

As majority representative, CWA negotiates CNAs with public employers on behalf of the employees it represents. These CNAs cover the terms and conditions of employment.⁶

Council 1 is “the exclusive majority representative of approximately 10,000 employees of the State of New Jersey in the Health, Care, and Rehabilitation Services unit.” The State employees in Council 1's negotiation unit participate in SHBP for their health benefits. Similarly, Council 1 represents employees at the county, municipal, State college, and university levels, many of whom also receive their health benefits through SHBP.

Council 73 is one of the affiliated councils with Council 1. It “consists of 64 locals that represent various local government employers and State appointing authorities.” Like Council 1, some of the negotiations units represented by Council 73's affiliated locals receive their health benefits through SHBP.

The State is responsible for administering SHBP through the SHBC. SHBC is comprised of five members.⁷ N.J.S.A. 52:14–17.27. More specifically, SHBC enters into contracts with private entities to assist in the administration of SHBP. N.J.S.A. 52:14–17.27; see N.J.S.A. 34:13A–5.3.

The complaint states that employees represented by CWA choose their representatives through procedures administered by the Public Employee Relations Commission (“PERC”). See N.J.S.A. 34:13A–5.2–5.3. The majority representative and the respective public employer negotiate the terms and conditions of employment for the particular negotiations unit. Those negotiations are memorialized in CNAs.⁸

The complaint alleges the following:

Count I— P.L. 2010, Chapter 2, Section 8 violates public employees' right to present their grievances through representatives of their own choosing under Article I, Paragraph 19 of the New Jersey Constitution. By imposing state-level negotiated changes to SHBP at the same time and in the same manner on local employees, Section 8 allegedly strips other State employees from having the majority representatives of their own choosing present their grievances and proposals to the State. Plaintiffs claim it also unconstitutionally imposes the added burden on majority representatives of having to negotiate on behalf of other State and local employees who are not part of its negotiating unit.

Count II—Section 8 is also allegedly void for vagueness in violation of the Fifth and Fourteenth Amendments to the United States Constitution. Plaintiffs claim it contains no guidance as to which CNA containing changes to SHBP negotiated by the majority representative of any of the 19 State employee groups will be binding on all other State and local employees. It also fails to clearly explain how such changes can be imposed on all employees at the same time and in the same manner given that multiple majority representatives allegedly could be entering into different CNAs with the State with different effective dates. Finally, Section 8 does not clearly state whether the negotiated changes to SHBP must be agreed to by a single majority representative or whether the State must obtain the agreement of all majority representatives for State employee negotiations units before the Commission can impose such changes on all participating employers.

Consequently, plaintiffs request that the court declare Section 8 unconstitutional and enjoin its implementation.

The State filed a motion to dismiss the complaint for failure to state a claim on September 24, 2010. In the brief accompanying its motion, the State argues: (1) plaintiffs cannot meet their burden needed to overcome the high presumption of validity accorded legislative enactments; (2) Article I, Paragraph 19 of the New Jersey Constitution only grants public employees the right to present grievances and proposals through representatives of their own choosing, but does not grant them the right to collectively negotiate the terms and conditions of employment; (3) Section 8 does not change State or local employees' ability to exercise their Article I, Paragraph 19 right, nor any rights under the Employer–Employee Relations Act (“EERA”), N.J.S.A. 34:13A–1 to –14; (4) Section 8 merely reiterates the Legislature's longstanding goal of assuring uniformity in health benefits for all government employees, which the New...