Teaneck Bd. of Educ. v. Teaneck Teachers Ass'n

• Decision Date: 18 July 1983
• Citation: 462 A.2d 137,94 N.J. 9
• Parties: , 124 L.R.R.M. (BNA) 2908, 43 Fair Empl.Prac.Cas. (BNA) 1745, 33 Empl. Prac. Dec. P 34,276, 12 Ed. Law Rep. 437 TEANECK BOARD OF EDUCATION, Respondent, v. TEANECK TEACHERS ASSOCIATION, Appellant.
• Court: New Jersey Supreme Court

Page 9

94 N.J. 9

462 A.2d 137, 124 L.R.R.M. (BNA) 2908,

43 Fair Empl.Prac.Cas. (BNA) 1745,

33 Empl. Prac. Dec. P 34,276, 12 Ed. Law Rep. 437

TEANECK BOARD OF EDUCATION, Respondent, v. TEANECK TEACHERS ASSOCIATION, Appellant.

Supreme Court of New Jersey.

Argued April 18, 1983.

Decided July 18, 1983.

Sheldon H. Pincus, Clifton, for appellant (Bucceri & Pincus, Clifton attorneys).

James P. Granello, Little Silver, for respondent (Murray & Granello, attorneys; Robert T. Lawless, on the brief).

Robert E. Anderson, Jr., Deputy Gen. Counsel, Glen Rock, for Public Employment Relations Com'n.

Susan L. Reisner, Deputy Atty. Gen., for amicus curiae Atty. Gen. of N.J. (Irwin I. Kimmelman, Atty. Gen., attorney; James J. Ciancia, Asst. Atty. Gen., of counsel).

Steven P. Weissman, Highland Park, submitted a brief on behalf of amicus curiae Communication Workers of America, AFL-CIO (Steven P. Weissman, Highland Park, attorney; Thomas S. Adair, Atlanta, Ga., a member of the Georgia bar, and Ann F. Hoffman, New York City, a member of the New York bar, of counsel).

Christopher M. Howard, Hillside, submitted a brief on behalf of amicus curiae The New Jersey State Federation of Teachers, AFT, AFL-CIO (Sauer, Boyle, Dwyer & Canellis, Union, attorneys).

Paula A. Mullaly, Gen. Counsel, Trenton, submitted a brief on behalf of amicus curiae New Jersey School Boards Ass'n (Paula A. Mullaly, Trenton, attorney; Russell Weiss, Marlton, on the brief).

The opinion of the Court was delivered by

O'HERN, J.

This appeal requires us to determine whether a teacher's claim of reverse discrimination in hiring may be submitted to binding arbitration under the terms of a collective negotiations agreement. We hold that the public employer's decision on hiring implicates an exercise of a governmental function that is not subject to binding arbitration, although it is subject to review by the Division on Civil Rights. We affirm the judgment below.

I.

The Teaneck Teachers Association filed a grievance on behalf of John A. Zubiaurre, a teacher, alleging racial discrimination in the Teaneck Board of Education's failure to appoint Zubiaurre to the position of Assistant Basketball Coach. ¹ He is white and alleges that he was not appointed for that reason. The grievance was not resolved in the lower steps of the parties' collective negotiations grievance procedure. The Association sought arbitration. At a hearing before the arbitrator, the Board raised the issue of arbitrability. The arbitrator found the issue arbitrable, relying upon Article XXVI, Section A, paragraph 2 of the parties' agreement, which recites that in discharging its functions, the Board shall be "(subject, however, to the provisions of the applicable statutes and rules and regulations of the State Board of Education in such cases made and provided) and all applicable laws and decisions of any New Jersey State or applicable Federal Agency regarding these matters."

The Board challenged the arbitrability of the issue in a scope of negotiations proceeding before the Public Employment Relations Commission (PERC). PERC ruled that the disputed issue was based upon allegations of racial discrimination that were within the scope of collective negotiations and could be submitted to arbitration. On the Board's appeal, the Appellate Division ruled that the issue of racial discrimination was preempted by the Law Against Discrimination, N.J.S.A. 10:5-1 to -38, and therefore was not subject to collective negotiations. 185 N.J.Super. 269, 276-77, 448 A.2d 487 (1982). Furthermore, "negotiations on hiring an assistant basketball coach would significantly interfere with [the employer's] inherent managerial prerogatives." Id. at 277, 448 A.2d 487. It concluded that any nonnegotiable subject is nonarbitrable, but the employee could pursue his grievance before another tribunal. It reversed the ruling of PERC but remanded the cause to permit transfer if requested to the Division on Civil Rights, the Superior Court, Law Division, or the Commissioner of Education, Division of Controversies and Disputes. Id. at 278-79, 448 A.2d 487. We granted the Association's petition for certification. 91 N.J. 569, 453 A.2d 880 (1982).

II.

In Thornton v. Potamkin Chevrolet, 94 N.J. 1, 462 A.2d 133 (1983), we reviewed the relationship between the laws against discrimination and arbitration of labor disputes in the private sector. Arbitration of labor disputes in public sector employment presents additional considerations. "We have heretofore recognized that what may be submitted to binding arbitration in the public sector is circumscribed. Unlike the private sector, prerogatives of management, particularly those involving governmental policy making, cannot be bargained away to be determined by an arbitrator." Kearny PBA Local # 21 v. Kearny, 81 N.J. 208, 215, 405 A.2d 393 (1979).

The scope of arbitrability is generally coextensive with the scope of negotiability. Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 160, 393 A.2d 278 (1978). Thus the tests for each are nearly the same. Therefore we begin our analysis with negotiability.

New Jersey has only two categories of subjects of public employment negotiation: "mandatorily negotiable terms and conditions of employment" and "non-negotiable matters of governmental policy." In re IFPTE Local 195 v. State, 88 N.J. 393, 402, 443 A.2d 187 (1982). In determining those issues that cannot be bargained away, we apply the test of negotiability.

[A] subject is negotiable between public employers and employees when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy. [Id. at 404, 443 A.2d 187].

The parties concede that the issue intimately and directly affects the work and welfare of public employees. The issues are whether the State's Law Against Discrimination preempts negotiation on the subject and whether arbitration of the discrimination issue would significantly interfere with the determination of governmental policy.

To decide whether a negotiated agreement would significantly interfere with the determination of governmental policy, it is necessary to balance the interests of the public employees and the public employer. When the dominant concern is the government's managerial prerogative to determine policy, a subject may not be included in collective negotiations even though it may intimately affect employees' working conditions. Woodstown-Pilesgrove Bd. of Educ. v. Woodstown-Pilesgrove Educ. Ass'n, 81 N.J. 582, 591, 410 A.2d 1131 (1980); see also Bethlehem Tp. Bd. of Educ. v. Bethlehem Tp. Educ. Ass'n, 91 N.J. 38, 449 A.2d 1254 (1982); Council of N.J. State College Locals v. State Bd. of Higher Educ., 91 N.J. 18, 449 A.2d 1244 (1982).

That the State's Law Against Discrimination sets statutory terms and conditions of employment does not resolve the issue whether application of those terms of employment to an employee is arbitrable. ² "For example, grievances involving the application of ... controlling statutes or regulations--which we have today held are incorporated by reference as terms of the collective agreement, see State v. State Supervisory Employees, [78 N.J. 54, 80, 393 A.2d 233 (1978) ]--may be subjected to resolution by binding arbitration." W. Windsor Tp. v. PERC, 78 N.J. 98, 107, 393 A.2d 255 (1978). Thus, strictly speaking, grievance arbitration of a statutorily mandated term and condition of employment would not have the effect of establishing a provision of a negotiated agreement inconsistent with state statutory policy, an effect proscribed by State Supervisory. An example will suffice. If state statutes or regulations fixed hours of employment, a wage dispute centering on whether the employee worked seven or eight hours would be arbitrable since the three criteria of the IFPTE test would be met. The dispute implicates no managerial prerogative. See Ramapo-Indian Hills Educ. Ass'n v. Ramapo-Indian Hills Bd. of Educ., 176 N.J.Super. 35, 422 A.2d 90 (App.Div.1980), certif. den., 93 N.J. ---, --- A.2d ---- (1983) (consolidation of jobs of music teacher and band director is not arbitrable but extra pay for extra work is); Lenk v. Monmouth Reg. H.S. Dist. Bd. of Educ., 1980 S.L.D. ---- (St.Bd.1980) (place on salary schedule adopted in accordance with law is arbitrable and collateral estoppel effect is given to arbitrator's award; no violation of statutory or decisional law asserted).

But here, application of the state statute or regulation would implicate an inherent managerial prerogative. Justice Schreiber, writing for a unanimous Court in Woodstown-Pilesgrove, stressed that if the subject "is 'a matter of essential managerial prerogative which has been delegated by the Legislature to the Board [of Education],' it 'cannot be bargained away.' " 81 N.J. at 589, 410 A.2d 1131 (quoting Bernards Tp. Bd. of Educ. v. Bernards Tp. Educ. Ass'n, 79 N.J. 311, 321, 399 A.2d 620 (1979)). The decision to hire, retain, promote, transfer, or dismiss employees is such a function. IFPTE, 88 N.J. at 407, 443 A.2d 187 (transfer); Paterson Police PBA Local No. 1 v. Paterson, 87 N.J. 78, 98, 432 A.2d 847 (1981) (promote or hire); Ridgefield Park, 78 N.J. at 156, 393 A.2d 278 (transfer); Wyckoff Tp. Bd. of Educ. v. Wyckoff Educ. Ass'n, 168 N.J.Super. 497, 501, 403 A.2d 916 (App.Div.), certif. den., 81 N.J. 349, 407 A.2d 1222 (1979) (retain); N. Bergen Tp. Bd. of Educ. v. N. Bergen Fed'n of Teachers, 141 N.J.Super. 97, 103, 357 A.2d 302 (App.Div.1976) (promote or hire). The decision encompasses more than the consideration or not of the applicant's race. A public employer cannot bargain away the review of a decision whether to hire, promote, or retain teaching staff.

PERC recognized that its precedents were to...