In re Ridgefield Park Board of Education, 081720 NJSC, A-2-19

Docket NºA-2-19
Opinion JudgePATTERSON JUSTICE
Party NameIn the Matter of Ridgefield Park Board of Education, Respondent-Appellant, and Ridgefield Park Education Association, Petitioner-Respondent.
AttorneyKerri A. Wright argued the cause for appellant (Porzio, Bromberg & Newman, attorneys; Kerri A. Wright, of counsel and on the briefs, David L. Disler and Thomas J. Reilly, on the briefs). Steven R. Cohen argued the cause for respondent (Selikoff & Cohen, attorneys; Steven R. Cohen, of counsel and ...
Judge PanelPatterson, J. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON's opinion. JUSTICE ALBIN filed a dissent. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON's opinion. JUSTICE ALBIN ...
Case DateAugust 17, 2020
CourtSupreme Court of New Jersey

In the Matter of Ridgefield Park Board of Education, Respondent-Appellant,

and

Ridgefield Park Education Association, Petitioner-Respondent.

No. A-2-19

Supreme Court of New Jersey

August 17, 2020

Argued March 3, 2020

On certification to the Superior Court, Appellate Division, whose opinion is reported at 459 N.J.Super. 57 (App. Div. 2019).

Kerri A. Wright argued the cause for appellant (Porzio, Bromberg & Newman, attorneys; Kerri A. Wright, of counsel and on the briefs, David L. Disler and Thomas J. Reilly, on the briefs).

Steven R. Cohen argued the cause for respondent (Selikoff & Cohen, attorneys; Steven R. Cohen, of counsel and on the briefs, Keith Waldman and Hop T. Wechsler, on the brief).

Kathleen Asher argued the cause for amicus curiae New Jersey School Boards Association (New Jersey School Boards Association, attorneys; Kathleen Asher and on the brief).

Ira W. Mintz argued the cause on behalf of amicus curiae Communications Workers of America, AFL-CIO (Weissman & Mintz, attorneys; Ira W. Mintz, on the brief).

Patterson, J., writing for the Court.

In this appeal, the Court reviews the Public Employment Relations Commission's (PERC) decision that the employees' health insurance premium contribution rates for the duration of the 2014-2018 collective negotiations agreement (CNA) between the Ridgefield Park Board of Education (Board) and the Ridgefield Park Education Association (Association) were non-negotiable because those rates were preempted by L. 2011, c. 78 (Chapter 78).

Chapter 78 prescribed annual increases in health care contributions over four years for those employed by a local board of education and required those employees to achieve full implementation of the increased contributions (Tier 4) in the fourth year after the statute's effective date or, for employees already subject to a CNA, in the fourth year after the expiration of that agreement. Chapter 78 also provided that when an employer and its employees negotiated the next CNA after the employees in a bargaining unit reached full implementation of the share of the cost of health care premiums mandated by N.J.S.A. 52:14-17.28c, they would negotiate employee health care contributions as if that premium share were part of their previous CNA. N.J.S.A. 18A:16-17.2.

The Board and the Association negotiated a CNA covering 2011-2014 that went into effect three days after the Legislature enacted Chapter 78. The 2011-2014 CNA expired before the employees achieved full implementation of the premium share set forth in N.J.S.A. 52:14-17.28c (Tier 4). After the 2011-2014 CNA expired, the Board and the Association negotiated a CNA covering 2014-2018, which, like its predecessor, stated that employees shall contribute 1.5% of their salary towards health insurance or the minimum set forth by statute, regulation, or code.

During the 2014-2015 school year, the employees contributed to the cost of their health care at the full premium share required by N.J.S.A. 52:14-17.28c (Tier 4). The Board and the Association disputed Chapter 78's impact on employee contributions for the CNA's remaining three years. The Board contended that Chapter 78 preempted any negotiated term for those contributions and that the Association's members were required to contribute to their health benefits at the Tier 4 level for the duration of the CNA. The Association contended that Chapter 78 did not preempt the 1.5% contribution rate set forth in the 2014-2018 CNA.

The Board and the Association petitioned PERC for a scope-of-negotiations determination. PERC held that the health insurance premium contribution rate set forth in the 2014-2018 CNA was preempted by Chapter 78 and granted the Board's request for a restraint of binding arbitration as to that issue. The Appellate Division reversed, determining that adherence to Chapter 78's plain language would bring about an "absurd result" contravening legislative intent, and required the employees to contribute only 1.5% of their salaries for the three contested years. 459 N.J.Super. 57, 61, 70-72 (App. Div. 2019).

The Court granted the Board's petition for certification. 239 N.J. 393 (2019).

HELD: The health insurance premium contribution rates paid by the Association's members were preempted by statute and therefore non-negotiable. PERC's construction of Chapter 78 comports with the statute's language and the Legislature's stated objective to achieve a long-term solution to a fiscal crisis.

1. The determination of whether a subject is properly negotiable in negotiations between public employers and their employees is governed by the three-part test set forth in In re Local 195, 88 N.J. 393, 403-04 (1982). This case implicates the preemption prong of that test. Thus, to review PERC's decision that the rates in question were non-negotiable, the Court considers whether the plain language of N.J.S.A. 18A:16-17.2 evinces the Legislature's intent to preempt any negotiated provision in the parties' 2014-2018 CNA regarding employee contributions to their health care benefits. (pp. 20-23)

2. N.J.S.A. 18A:16-17.2's first sentence addresses "public employer[s] and employees who are in negotiations for the next collective negotiations agreement to be executed after the employees in that unit have reached full implementation of the premium share . . . ." (emphases added). And in its final sentence, N.J.S.A. 18A:16-17.2 provides that after "full implementation," the employees' contribution levels "shall become part of the parties' collective negotiations and shall then be subject to collective negotiations in a manner similar to other negotiable items between the parties." Accordingly, during the negotiations for the next CNA after full implementation is reached -- here, the negotiations for the agreement that would succeed the 2014-2018 CNA -- the Tier 4 contribution levels would constitute the status quo. The Legislature did not expressly discuss the scenario in this case, in which the employees reached "full implementation" of the premium share with three years remaining in the term of their current CNA. It implicitly addressed the setting of this case, however, by making the Tier 4 contribution rate the status quo from which a successor CNA would be negotiated. Moreover, nothing in the statute authorizes an immediate reduction of employee health care contribution rates to their pre-Chapter 78 levels. (pp. 23-26)

3. To the extent that N.J.S.A. 18A:16-17.2 leaves any ambiguity as to legislative intent, the legislative history of Chapter 78 resolves that ambiguity. The Legislature viewed public employee health care costs to present a fiscal crisis and acted to provide a long-term solution to that crisis. The Legislature did not enact Chapter 78 to achieve only a transient increase in employees' health insurance premium contributions, followed by an immediate reversion to pre-statute contribution rates as soon as employees had contributed at the Tier 4 level for a year. Instead, it envisioned that Chapter 78 would increase employee health insurance premium contributions over the long term. In short, the construction of N.J.S.A. 18A:16-17.2 urged by the Board and adopted by PERC is consonant with the Legislature's intent, as reflected by Chapter 78's stated goals and legislative history. (pp. 26-30)

4. N.J.S.A. 18A:16-17.2's impact on employee health benefit contributions based on the timing of a given CNA is not an "absurd result" warranting a departure from the statute's terms. The Legislature clearly understood that school districts negotiate contracts on different schedules, and that the statute's impact would vary from district to district. Nonetheless, the Legislature envisioned that the transition between Tier 4 health insurance premium contribution rates set by Chapter 78 and contribution rates negotiated by school boards and employees would take place in the negotiations for the next CNA, not at some earlier stage. (pp. 30-32)

The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to PERC.

JUSTICE ALBIN, dissenting, expresses the view that the result reached by the majority is mandated by neither the language nor the legislative history of Chapter 78 and deprives the Association the benefit of its CNA with the Board. Had the Association the prescience to foresee how the majority would interpret Chapter 78, Justice Albin writes, it undoubtedly would have entered a one-year contract with the Board, during which Tier 4 would have been implemented, and begun negotiations anew. Justice Albin concludes that the decision here, which strikes down terms in a negotiated agreement, is unfair and unreasonable, and not consistent with the Legislature's probable intent in Chapter 78.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON's opinion. JUSTICE ALBIN filed a dissent.

OPINION

PATTERSON JUSTICE

This appeal arises from a dispute between the Ridgefield Park Board of Education (Board) and the Ridgefield Park Education Association (Association) concerning Board employees' obligations to contribute to the cost of their health care benefits under L. 2011, c. 78 (Chapter 78).

Chapter 78 prescribed annual increases in health care contributions over four years for those employed by a local board of education at the time of the statute's enactment. N.J.S.A. 18A:16-17.1(a); N.J.S.A. 52:14-17.28c. It required those employees to achieve full implementation of the increased contributions (Tier 4) in the fourth year after the statute's effective date or, for employees already subject to a collective negotiations agreement (CNA), in the fourth year after the expiration of that agreement. N.J.S.A. 18A:16-17.1(c); N.J.S.A. 52:14-17.28d(c)....

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