New Jersey Turnpike Authority v. American Federation of State, County and Mun. Employees, Council 73

Decision Date14 July 1997
Citation150 N.J. 331,696 A.2d 585
CourtNew Jersey Supreme Court

Robert E. Anderson, General Counsel, for appellant Public Employment Relations Commission.

Steven P. Weissman, Somerset, for respondents-appellants American Federation of State, County and Municipal Employees, Council 73 and American Federation of State, County and Municipal Employees, Council 73, Locals 3912, 3913 and 3914 (Weissman & Mintz, attorneys).

Michael K. Furey, Morristown, for respondent (Riker, Danzig, Scherer, Hyland & Perretti, attorneys; Furey and James P. Anelli, on the brief).

Michael L. Diller, Senior Deputy Attorney General, for amicus curiae State of New Jersey (Peter G. Verniero, Attorney General, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel).

Gerald L. Dorf, Rahway, for amicus curiae New Jersey State League of Municipalities (Dorf & Dorf, attorneys; Dorf and Mitchell L. Dorf, on the brief).

Joseph Licata, Livingston, submitted a brief on behalf of amicus curiae New Jersey State AFL-CIO (Loccke & Correia, attorneys, Hackensack; Richard D. Loccke, of counsel; Licata, Livingston and Leon B. Savetsky, Hackensack, on the brief).

Sanford Oxfeld, Newark, submitted a brief on behalf of amicus curiae New Jersey Deputy Fire Chiefs (Balk, Oxfeld, Mandell & Cohen, attorneys; Randi Doner April, on the brief).

Paul L. Kleinbaum, Newark, submitted a brief on behalf of amicus curiae International Association of Fire Fighters, AFL-CIO (Zazzali, Zazzali, Fagella & Nowak, attorneys).

The opinion of the Court was delivered by


This appeal concerns whether certain New Jersey Turnpike Authority (Authority) employees can join collective negotiating units. The New Jersey Employer-Employee Relations Act (Act), N.J.S.A. 34:13A-1 to -29, provides public employees with broad powers to "form, join and assist" employee organizations. N.J.S.A. 34:13A-5.3. Two important exceptions to that right involve "managerial executives" and "confidential employees." See ibid. Managerial executives are those who "formulate management policies and practices, and persons who are charged with the responsibility of directing the effectuation of such management policies and practices...." N.J.S.A. 34:13A-3(f). Confidential employees possess "functional responsibilities or knowledge in connection with the issues involved in the collective negotiations process [that] would make their membership in any appropriate negotiating unit incompatible with their official duties." N.J.S.A. 34:13A-3(g).

Those statutory definitions have been interpreted by the Public Employment Relations Commission (PERC), the body charged with enforcing and implementing the Act. See N.J.S.A. 34:13A-5.2. Relying in part on its own interpretations of the managerial executive and confidential employee exceptions, PERC certified Authority employees for membership in three separate negotiating units. The Authority appealed all three certifications, claiming that the certified employees should have been excluded because they were either managerial executives or confidential employees or because public policy required their exclusion. The Appellate Division reversed and remanded, construing both the managerial executive and confidential employee exceptions more broadly than did PERC, and noting that "[t]he practical effect of PERC's decision is to leave the Authority with only twenty members of its management team from whom it can expect full loyalty uncompromised by union membership." 289 N.J.Super. 23, 26, 672 A.2d 1244 (1996). PERC and the American Federation of State, County and Municipal Employees, Council 73 (AFSCME) petitioned for certification. We granted both petitions. 147 N.J. 261, 686 A.2d 763 (1996).


The New Jersey Turnpike Authority was created by the Legislature in 1948 to design, construct, operate and maintain a high speed, limited access roadway. See L. 1948, c. 454, § 1 (codified as amended at N.J.S.A. 27:23-1). The Turnpike is now 148 miles long; an average of approximately 550,000 vehicles per day traveled the Turnpike in 1995. Manual of the Legislature of New Jersey 168 (1997). Approximately 2365 employees work for the Authority. Ibid.

Testimony before PERC's hearing officer revealed that the Authority's Commissioners ultimately are responsible for all policies, budget approval, personnel actions, negotiations, and contract administration approval, subject to the Governor's veto power. Below the Commissioners in the Authority's management structure is an Executive Director, who is responsible for the day-to-day management of the Authority. See N.J.A.C. 19:9-7.2. At the time of the PERC decisions, the Authority was divided into nine departments, each run by a department director: engineering; maintenance; tolls; operations; finance and budget; law; public affairs; human resources; and administrative services and technology.

In June 1991, AFSCME petitioned PERC to represent eighty-eight Authority employees in a supervisory unit. The petitioned-for employees occupied positions subordinate to that of department director. The Authority opposed the petition, claiming that all of the petitioned-for titles were inappropriate for inclusion in a collective negotiating unit because they were managerial executives or confidential employees, because supervisory conflicts existed between the titles, and also because the titles subject to the petition included nonsupervisory personnel who should not be represented in a supervisory unit. PERC referred the contested matter to a hearing officer for factfinding and recommendation. The hearing officer heard fourteen days of testimony, after which she produced a 163-page report recommending that all but fourteen of the petitioned-for titles be certified. H.O. No. 93-2, 19 N.J.P.E.R. p 24154 (1993).

The Authority filed exceptions to the hearing officer's report. PERC transferred the case to itself pursuant to N.J.A.C. 19:11-8.8 subsequently recodified at N.J.A.C. 19:11-9.1) and issued a decision that modified the hearing officer's recommendations slightly. P.E.R.C. No. 94-24, 19 N.J.P.E.R. p 24218 (1993). PERC accepted the hearing officer's recommendation to exclude fourteen employees from the negotiating unit. Additionally, PERC, in order to prevent intra-unit conflicts, excluded five nonsupervisors from the unit, as well as twenty employees who supervised lower-level supervisors in the unit. Although PERC's decision excluded more employees from unit membership than the hearing officer's report, PERC generally rejected the Authority's claim that many of the affected employees were either managerial executives or confidential employees. Ibid. When considering the Authority's claims concerning managerial executive status, PERC relied largely on its decision in Borough of Montvale, P.E.R.C. No. 81-52, 6 N.J.P.E.R. p 11259 (1980). That opinion reads in pertinent part:

A person formulates policies when he develops a particular set of objectives designed to further the mission of the governmental unit and when he selects a course of action from among available alternatives. A person directs the effectuation of policy when he is charged with developing the methods, means, and extent of reaching a policy objective and thus oversees or coordinates policy implementation by line supervisors. Simply put, a managerial executive must possess and exercise a level of authority and independent judgment sufficient to affect broadly the organization's purposes or its means of effectuation of these purposes. Whether or not an employee possesses this level of authority may generally be determined by focusing on the interplay of three factors: (1) the relative position of that employee in his employer's hierarchy; (2) his functions and responsibilities; and (3) the extent of discretion he exercises.

PERC determined that "[n]one of [the petitioned-for employees] exercises a level of authority and independent judgment sufficient to broadly affect the Authority's purposes or means of effecting these purposes." 19 N.J.P.E.R. p 24218. After considering, among other things, "the Act's policy favoring organization of all employees desiring it," PERC determined that, with the exception of one employee, "the petitioned-for employees do not meet the narrow definition of managerial executive." Ibid.

Concerning confidential employees, PERC reiterated its holding in State of New Jersey, P.E.R.C. No. 86-18, 11 N.J.P.E.R. p 16179 (1985) The Commission's approach to confidential employee disputes has thus been consistent since 1970. We scrutinize the facts of each case to find for whom each employee works, what he does, and what he knows about collective negotiations issues. Finally, we determine whether the responsibilities or knowledge of each employee would compromise the employer's right to confidentiality concerning the collective negotiations process if the employee was included in a negotiating unit.

After engaging in an individualized analysis of the employees claimed by the Authority to be confidential, PERC excluded one employee who had been promoted since the hearing officer's report to a position involving the analysis and formulation of collective negotiations strategies relating to possible changes in employee medical insurance benefits. 19 N.J.P.E.R. p 24218.

The balance of PERC's opinion addressed intra-unit conflicts of interest among supervisors. Such conflicts were addressed by this Court in Board of Education v. Wilton, which held that where "substantial actual or potential conflict of interest...

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