Opinion
DOCKET NO. A-1482-12T2
01-30-2014
PATERSON POLICE PBA LOCAL 1 and PATERSON POLICE PBA LOCAL 1 SUPERIOR OFFICERS ASSOCIATION, Plaintiffs-Respondents, v. CITY OF PATERSON, a municipal corporation of the State of New Jersey, Defendant-Appellant.
Adam S. Herman argued the cause for appellants (Adams Stern Gutierrez & Lattiboudere, LLC, attorneys; Perry L. Lattiboudere, of counsel and on the brief; Mr. Herman, on the brief). Mark C. Rushfield (Shaw, Perelson, May & Lambert) argued the cause for respondents.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Harris, Kennedy, and Guadagno.
On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. C-48-12.
Adam S. Herman argued the cause for appellants (Adams Stern Gutierrez & Lattiboudere, LLC, attorneys; Perry L. Lattiboudere, of counsel and on the brief; Mr. Herman, on the brief).
Mark C. Rushfield (Shaw, Perelson, May & Lambert) argued the cause for respondents. PER CURIAM
The City of Paterson (City) appeals from the October 16, 2012 order of the Chancery Division confirming the May 8, 2012 arbitration award resolving joint grievances filed by respondents Paterson Police PBA Local 1 (PBA) and Paterson Police PBA Local 1 Superior Officers Association (SOA) (collectively, the Unions), on behalf of Lieutenant Shawn McIvor and Sergeant Ivette Otero, members of the Paterson Police Department. For the reasons that follow, we affirm.
I.
The City and the Unions are parties to two separate collectively negotiated agreements (CNAs) that govern union members' employment with the City. The PBA is the collective negotiations representative for all rank-and-file police officers of the Police Division of the Paterson Department of Public Safety (Police Division). The SOA is the collective negotiations representative for all higher-ranked police officers, sergeant through deputy chief, of the Police Division. With very few exceptions, the CNAs are virtually identical. The provisions relevant to our review are as follows:
3.2 City's Exercise of Rights
In the exercise of the foregoing power, rights, authorities, duties and responsibilities, the City has the right, subject to the terms contained herein, to hire employees, to promote, transfer and assign them, suspend, demote, discharge or take other appropriate action for just cause, and to lay off employees because of lack of work and for other legitimate reasons.
3.3 Management Prerogatives
The City reserves the right to make such other reasonable rules and regulations, orders and policies as may from time to time be necessary and proper for the purposes of maintaining order, safety or the effective operations of the department after reasonable notice thereof to the employees affected.
7.1.2
The assignment of employees and their tours of duty will be made by seniority and selected annually by the employee in the month of October for the following year. Once an employee selects a squad, the employee shall remain on that respective squad for the following year.
7.1.3
In an emergency, the Chief of Police may reassign an employee to a different squad for a maximum of two (2) weeks only. This can occur twice during a calendar year.
27.7
Whenever in the course of a monthly detail an employee's days off, or the hours of his tour of duty are rescheduled by more than one (1) hour to meet departmental manpower requirements, the employee shall receive additional compensation equal to two (2) hours pay in addition to payment for the hours actually worked. The additional compensation shall not apply in cases when the schedule has been changed at the request of or for the convenience of the employee.
29.7 Night Differential
As part of the regular base salary of an employee, and in addition to their salary ranges and other compensation, there shall be a five (5%) percent Night Differential applicable to all employees for all work actually performed between the hours of 1500 through 0800, on tours of duty that start on
or after 1500 and on or prior to 2400. Notwithstanding the above, of the employees on the 4 & 4 schedule, only squads 3, 4 and 5 on Patrol Division Platoons A and B shall receive the Night Differential.
36 Fully Bargained Position
. . . .
B. This Agreement shall not be modified in whole or in part by the parties except by an instrument in writing only executed by both parties.
The CNAs also set out grievance procedures, which are to be resolved by binding arbitration before an arbitrator designated by the New Jersey Public Employment Relations Commission (PERC).
Each fall, officers ranked from patrolman to captain complete a Squad Selection Form, regardless of their division placement. The form allows officers to indicate their preferred squad hours by ranking and listing their top four squad choices. According to the City, squad selections are granted to officers assigned to the Patrol Division according to seniority. The City's chief of police issues a monthly detail, containing each officer's assignment, every twenty-eight days. Once selections and assignments are made, the officers expect, and are expected, to remain in that assignment for the following calendar year.
In July 2007, the Unions and the City entered into a Consent Award to settle a grievance arbitration. The Consent Award provides:
[t]he City shall issue squad selection forms to all bargaining unit members represented by the PBA and SOA for purposes of Section 7.1.2 (PBA Agreement) and Section 7.1.2 (SOA Agreement) and shall assign tours of duty by seniority among all PBA bargaining unit members and all SOA bargaining unit members.
In 2011, severe budget deficits required the City and its police department to institute significant reductions in force (RIFs) as well as a substantial reorganization, including the layoff of one hundred and twenty-five officers, the demotion of thirty-four sergeants and lieutenants, and a reduction in size of several divisions, including the narcotics and traffic sections. Some squad assignments were eliminated completely. Those officers who were not laid off, but in positions that were eliminated, were reassigned. Officer rank, seniority, and preference were the criteria used to determine the reassignments. Many of the remaining officers were reassigned to either a different division and/or different tours of duty (shifts).
The Unions challenged this action, asserting that the unilateral reassignment of officers from shifts to which they were assigned in January 2011 to different shifts mid-year (April 2011) violated Section 7.1.2. of the CNAs.
Prior to the RIF, Lt. McIvor was a patrolman assigned to Squad 4. As a result of the RIF, on April 3, 2011, Lt. McIvor, who had seniority position #21, was reassigned to Squad 1. Lt. McIvor's position on Squad 4 was filled by Lt. Phelan, who had seniority position #16. Lt. Phelan was originally in the Traffic Section, which was reduced in size during the RIF. Lt. Phelan's preferred assignment of Squad 3 was not available. Therefore, pursuant to the CNA, the City determined Lt. Phelan was entitled to displace the less senior Lt. McIvor from his position on Squad 4.
Sgt. Otero, prior to the April 2011 RIF, was assigned to the night shift in the Narcotics Section. After the RIF, on April 3, 2011, Sgt. Otero was assigned to the day shift of the Major Crimes Section for the remainder of 2011.
After the RIF, Sgt. Otero's and Lt. McIvor's reassignments from the night shift to the day shift came at the expense of their compensation because both lost the five percent pay differential to which they were entitled pursuant to Section 29.7. According to the Unions, that, and all other major changes in the officers' compensation, benefits, and other terms of employment, were required to be discussed with the Union president prior to implementation, which the City failed to do. Ultimately, the Unions filed joint grievances in accordance with the CNAs' grievance procedures.
After the grievance filing, the Unions' counsel filed Requests for Submissions of a Panel of Arbitrators as to each grievance to the PERC. The PERC subsequently designated an arbitrator to decide each of the grievances, which the parties agreed to consolidate for a single hearing.
On March 2, 2012, a hearing was held before the arbitrator. At the outset, the parties stipulated that the issues for his determination were whether each grievance should be sustained and, if so, what remedy should be granted to the officers.
Initially, there was conflicting testimony concerning discussions held between the City and the Unions regarding the City's officer reassignment and tour changes. The Unions argued that any tour and shift changes to assignments made pursuant to Section 7.1.2 have to be made in writing, per Section 36(B). Ultimately, the City agreed, acknowledging that to be effective, any divergence from the CNAs must be in writing and signed by both parties. A review of the record reveals no such writings.
The arbitrator determined that Lt. McIvor's reassignment from Squad 4 to Squad 1, resulting in a shift change from nights to days, was a unilateral change, and done without the contractually mandated signed writing. Although it was found at the hearing that Lt. McIvor was "bumped" by Lt. Phelan, a senior officer, the arbitrator found, "it appeared [Lt. Phelan's] reassignment was not necessary, since Lt. Phelan's position in [his former Section] was replaced by an employee who was junior to [Lt.] Phelan."
Similarly, the arbitrator concluded that Sgt. Otero's testimony at the arbitration irrefutably established that a junior officer with less experience in narcotics replaced her on the night shift, and that no explanation was provided to justify the move.
On May 8, 2012, the arbitrator rendered his award and opinion, sustaining, for the most part, both grievances. Although he recognized that the CNAs do not prohibit the City from making ordinary detail assignments as legitimate need arises, "once selections are made in October and are confirmed by the Department, officers expect and are expected to remain in that assignment until the end of the following year[,]" because upon confirmation, officers then "plan their lives around them." Moreover, the arbitrator determined that there was no proof that the Squad Selection Forms, mandated by the July 2007 Consent Award, were intended to be limited to the Patrol Division.
Accordingly, the arbitrator held that Section 7.1.2 of the CNAs is applicable to all members of the Department, and as such, Sgt. Otero's reassignment, was, in fact, governed by Section 7.1.2. Ultimately, the arbitrator concluded that the reassignments of Sgt. Otero and Lt. McIvor in April 2011 violated the terms of the CNAs because it modified the agreement without an accompanying writing per Section 36(B).
The arbitrator determined that Lt. McIvor and Sgt. Otero are entitled to further compensation, pursuant to Section 27.7, equal to two hours pay in addition to the hours worked, because the City's unilateral decision to change their shifts effectively rescheduled the hours of their tours of duty by more than one hour to meet the departmental manpower requirements. Ultimately, the arbitrator awarded night differential of five percent "from the beginning of the 're-start' in April 2011 through the end of calendar year 2011, pursuant to [Section] 29.7 of each [CNA]" as well as "additional compensation in accordance with [Section] 27.7" for the same time period.
The arbitrator also held that the issue of managerial prerogative raised by the City "must fall in the face of clear contractual language" found in Section 3.2, which addresses the City's right to transfer and/or assign officers subject to the terms of the CNAs. Moreover, concerning the City's "right" to make the April 2011 personnel reassignments due to the budgetary crisis and RIF, the arbitrator concluded:
Neither has there been any convincing evidence presented that either officer had to have their tours changed because of the financial crisis and subsequent layoff, since the positions previously held by
Phelan, McIvor and Otero were all assigned to other officers.
Consequently, the arbitrator determined that the "budget crisis cannot be deemed an 'emergency' within the meaning of [Section 7.1.3]." According to the arbitrator's interpretation and application of Section 7.1.3, the CNAs limit the reassignment of officers during an emergency to a two-week period, twice a year - not, as the arbitrator concluded, for eight months.
The trial court, after examining the arbitrator's decision, the CNAs, and the parties' arguments, concluded that the opinion and award was reasonably debatable, and thus the court was compelled to resolve any dispute in favor of the validity of the arbitrator's award. While recognizing that the arbitrator had "the benefit of all of the testimony of the parties with regard to the understanding of the [CNAs] and how [the] parties had operated over the course of this contract[,]" the trial judge ultimately found both parties' arguments concerning additional overtime pursuant to Section 27.7 equally persuasive. Thus, the trial court stated the ambiguity of the language in the CNAs, specific to Section 27.7, rendered the arbitrator's decision reasonably debatable.
Regarding the arbitrator's interpretation of Section 7.1.2, the trial judge stated "[a]rguments with regard to this section and entitlement to remain in the selected assignment for a year are, at the very least, reasonably debatable. The language is capable of ambiguity." The court affirmed the arbitrator's opinion and award with regard to the applicability of Section 7.1.2 to both officers.
On appeal, the City challenges the trial court's October 16, 2012 confirmation of the arbitrator's award, arguing the arbitrator's findings went beyond his scope of authority, and that his award rewrote and/or modified the CNAs resulting in a "windfall." The City contends the decision negated the City's management prerogative role, and thus, in addition to exceeding his authority, the arbitrator also procured the award by undue means. The City asserts that although the grievances of Lt. McIvor and Sgt. Otero arose as a result of the RIF, they nevertheless involve different issues. The City asserts that Lt. McIvor's entitlement to additional compensation under Section 27.7 is limited because this compensation provision applies to reassignments that were made in the course of a monthly detail, and Lt. McIvor's rescheduling and placement occurred at the beginning of April. The City also argues that Section 27.7 is only applicable to situations where an officer's tour reassignment exceeds a shift by more than one hour in the course of a monthly detail. The Unions argue, however, that Section 27.7 treats squad reassignments like any other "tour of duty," and in Lt. McIvor's situation, because his tour was rescheduled by more than one hour, he is entitled to the additional two-hour payment.
Lt. McIvor was paid an additional $19,031.11, and Sgt. Otero was paid an additional $22,506.56, as a result of the arbitrator's award.
Regarding Sgt. Otero, the City argues that the CNAs bar her from challenging her reassignment to the night shift of the Narcotics Section. Specifically, the City contends Section 7.1.2 of the CNAs, which address the process by which assignments are made for tours of duty, is inapplicable to Sgt. Otero because Section 7.1.2 only applies to the Patrol Division, and Sgt. Otero's initial assignment was to Narcotics. Thus, the City urges that her reassignment from Narcotics to Major Crimes is not governed by Section 7.1.2.
II.
"'Arbitration is a vehicle by which meaning and content are given to the collective bargaining agreement.'" Linden Bd. of Educ., supra, 202 N.J. at 276 (quoting Local No. 153, Office & Prof'l Emps. Int'l Union v. Trust Co. of N.J., 105 N.J. 442, 452 (1987)). Arbitration, and its "high level of deference springs from the strong public policy favoring 'the use of arbitration to'" settle public-sector labor disputes. Policemen's Benevolent Ass'n Local No. 11 v. City of Trenton, 205 N.J. 422, 429 (2011) (quoting N.J. Tpk. Auth. v. Local 196, I.F.P.T.E., 190 N.J. 283, 291 (2007)). As such, arbitration "should be a fast and inexpensive way to achieve final resolution of such disputes and not merely 'a way-station on route to the courthouse.'" Borough of E. Rutherford v. E. Rutherford PBA Local 275, 213 N.J. 190, 201 (2013) (quoting Policemen's Benevolent Ass'n, supra, 205 N.J. at 429).
"[T]he scope of review of an arbitration award is narrow. Otherwise, the purpose of the arbitration contract, which is to provide an effective, expedient, and fair resolution of disputes, would be severely undermined." Fawzy v. Fawzy, 199 N.J. 456, 470 (2009). In reviewing a trial court's award confirmation, we owe no special deference to the trial court's interpretation of the law and the legal consequences that flow from established facts. Town of Kearny v. Brandt, 214 N.J. 76, 92 (2013). As such, we are not bound by the trial court's application of law to the facts or its evaluation of the legal implications of facts where credibility is not in issue. State v. Harris, 211 N.J. 566, 578-79 (2012) (citing State v. Handy, 206 N.J. 39, 45 (2011)). Because the trial court's decision to confirm the arbitrator's award is a decision of law, our review of that confirmation is de novo. See Minkowitz v. Israeli, 433 N.J. Super. 111, 136 (App. Div. 2013) (quoting Manger v. Manger, 417 N.J. Super. 370, 376 (App. Div. 2010)).
We engage in an extremely deferential review when a party to a CNA has sought to vacate an arbitrator's award. Policemen's Benevolent Ass'n, supra, 205 N.J. at 428. The well-established standard is that "an arbitrator's award will be confirmed 'so long as the award is reasonably debatable.'" Id. at 428-29 (quoting Linden Bd. of Educ. v. Linden Educ. Ass'n ex rel. Mizichko, 202 N.J. 268, 276 (2010)).
An appellate court's review of an arbitrator's interpretation is confined to determining whether the interpretation of the contractual language is "reasonably debatable." Under that standard, a reviewing court may not substitute its own judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's interpretation. The policy of strictly limiting judicial interference with arbitration is intended to promote arbitration as an end to litigation.
[Twp. of Wyckoff v. PBA Local 261, 409 N.J. Super. 344, 355 (App. Div. 2009) (quoting N.J. Transit Bus Operations, Inc. v. Amalgamated Transit Union, 187 N.J. 546, 553-54 (2006) (citations omitted)).]
Because arbitration is so highly favored, the presumed validity of the arbitration award is entitled to every indulgence, and the party opposing confirmation has the burden of establishing statutory grounds for vacation. Id. at 354. Contract interpretation is a matter for the arbitrator. Delta Funding Corp. v. Harris, 189 N.J. 28, 38-39 (2006). The standard of review of the arbitrator's interpretation of contractual language is its reasonable debatability. Policemen's Benevolent Ass'n, supra, 205 N.J. at 429. Similarly, an arbitrator has the authority to interpret the issues submitted to arbitration, and on review, the same reasonably debatable standard applies. Wyckoff, supra, 409 N.J. Super. at 355-56. "Although the arbitrator may not contradict the express language of the contract, 'it is the arbitrator's construction that is bargained for[,]' and '[i]t is the arbitrator's role to fill the gaps[.]'" Ibid. (quoting Local No. 153, supra, 105 N.J. at 452).
Because no New Jersey precedent addresses whether the same deferential standard should apply to a court's review of an arbitrator's interpretation of the issue submitted, Wyckoff adopted federal precedent that construed the standard of review in the context of analogous provisions of the Federal Arbitration Act, 9 U.S.C.A. § 10(a)(4) (providing that a district court may vacate an arbitration award if, among other things, "the arbitrator[] exceeded [his] power[], or so imperfectly executed [it] that a mutual, final and definite award upon the subject matter submitted was not made.") holding that the same deferential standard applies. Wyckoff, supra, 409 N.J. Super. at 355-56; see, e.g., Mobil Oil Corp. v. Indep. Oil Workers Union, 679 F.2d 299 (3d Cir. 1982).
A.
The City argues the trial court was required to vacate the arbitrator's award because the portion of the award granting Lt. McIvor two additional hours of overtime pursuant to Section 27.7 for each day that Lt. McIvor was subject to the time change in his tour of duty exceeded the arbitrator's authority. Specific to the City's argument is that Section 27.7 precluded the arbitrator from granting Lt. McIvor two additional hours of compensation because that section provides for overtime entitlement when an officer is rescheduled "in the course of a monthly detail." We find this position inconsistent with the City's stipulation to the issue submissions before the arbitrator.
N.J.S.A. 2A:24-8 provides that a court shall vacate an arbitration award involving a collectively negotiated agreement for any of the following causes:
(a) Where the award was procured by corruption, fraud or undue means;"An arbitrator's award 'is entitled to a presumption of validity and the party opposing confirmation ha[s] the burden of establishing that the award should be vacated pursuant to N.J.S.A. 2A:24-8.'" Wyckoff, supra, 409 N.J. Super. at 354 (quoting Jersey City Educ. Ass'n Inc. v. Bd. of Educ. of Jersey City, 218 N.J. Super. 177, 187 (App. Div.), certif. denied, 109 N.J. 506 (1987)).
(b) Where there was either evident partiality or corruption in the arbitrators, or any thereof;
(c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause being shown therefor, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;
(d) Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.
In Linden Bd. of Educ, supra, the parties stipulated to the issues to be determined by the arbitrator, "and, hence, what the arbitrator would have jurisdiction to consider[.]" 202 N.J. at 281-82 (Rivera-Soto, J., concurring). The arbitrator in Linden, as in the present case, was vested with the authority to determine a remedy, if, in fact, a remedy was needed to resolve the dispute. Id. at 282. "[B]y explicitly stipulating to the issues to be determined by the arbitrator, the parties waived any objection to the exercise of that jurisdiction." Ibid. Moreover, the Court has explicitly articulated "the need for a flexible approach to an arbitrator's authority with regard to remedies[,]" stating that
[w]hen an arbitrator is commissioned to interpret and apply the collective"Generally, when a court reviews an arbitration award, it does so mindful of the fact that the arbitrator's interpretation of the contract controls." Id. at 201. An arbitrator exceeds his "'authority by disregarding the terms of the parties' agreement.'" Id. at 203 (quoting State, Office of Emp. Relations v. Commc'ns Workers of Am., 154 N.J. 98, 112 (1998)). Furthermore, "[u]nder the 'reasonably debatable' standard, a court reviewing [a public-sector] arbitration award 'may not substitute its own judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's position.'" Id. at 201-02 (quoting Middletown Twp. PBA Local 124 v. Twp. of Middletown, 193 N.J. 1, 11 (2007)). It is widely established that courts are not to "second-guess" an arbitrator's interpretation because
bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies. There the need is for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency.
[E. Rutherford, supra, 213 N.J. at 205 (quoting State v. Int'l Fed'n of Prof'l & Techical Eng'rs, Local 195, 169 N.J. 505, 520-21 (2001)).]
the question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the
arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.
[Id. at 202 (quoting Weiss v. Carpenter, 143 N.J. 420, 433 (1996)).]
Here, the stipulation of issues by both parties provided the arbitrator with the authority to formulate a remedy should he determine that a remedy was necessary and appropriate. The Local 195 decision plainly recognized that arbitrators must have the ability, in appropriate situations, to award "make-whole monetary damages for certain contract violations, premised on the basic conferral of power to the arbitrator to resolve the dispute." Id. at 205 (citing Local 195, supra, 169 N.J. at 521). Because the parties agreed to vest the arbitrator with the authority to fashion a remedy should he deem one appropriate, the arbitrator did not exceed that authority by granting Lt. McIvor additional overtime pursuant to Section 27.7 of the CNA.
We turn next to the arbitrator's interpretation of Section 27.7 to determine whether his conclusion, which resulted in Lt. McIvor's overtime compensation, satisfied the reasonably debatable standard. In presenting their arguments both for and against confirming the award, the parties put forth persuasive arguments concerning the interpretation of Section 27.7. The City asserts that the language of Section 27.7, specifically, that an employee shall receive compensation equal to two hours pay in addition to payment for hours actually worked, when in the course of a monthly detail, an employee is rescheduled by more than one hour, only applies when an employee is rescheduled in the middle of the month. Because Lt. McIvor was reassigned from Squad 4 to Squad 1 on April 3, 2011, and not in the middle of the month, the City argues the reassignment therefore did not occur "in the course of a monthly detail" and thus Section 27.7 does not apply. Any decision to the contrary, according to the City, would exceed the arbitrator's authority and/or modify the terms of CNA.
The Unions argue that the City's unilateral decision to change Lt. McIvor's shift effectively rescheduled the hours of his tour of duty by more than one hour to meet the departmental manpower requirements. Although an officer's detail is decided at the beginning of every month, in the present case, the City's assignments were interrupted because of the RIF, and officers who had selected certain assignments found themselves without the benefit of the compensation of those assignments. It is undisputed that Lt. McIvor's reassignment to Squad 1 resulted in a change in his hours by more than one hour. As such, the Unions contend that the language, "whenever in the course of a monthly detail" could refer to either a change in shift or a tour of duty that occurs in a single month, and therefore Section 27.7 applies in both instances.
The arbitrator, after hearing substantial testimony on this issue, ultimately agreed with the Unions' position, and concluded the City's actions in rescheduling Lt. McIvor entitled him to additional compensation under Section 27.7 of the CNA. The language in Section 27.7 can be interpreted and applied in multiple ways, and thus is reasonably debatable. When considering the arbitrator's remedy, Lt. McIvor's overtime award was not inconsistent with any of the provisions contained in the CNAs. Moreover, the arbitrator articulated a contractual basis to support his decision that the City's actions constituted a violation, specifically explaining that Lt. McIvor's reassignment in April 2011 violated the terms of Section 36(B) of the CNA because it modified the agreement without an accompanying writing, signed by both parties. Thus, the trial court, in confirming the award, appropriately refused to second guess and/or substitute its judgment for that of the arbitrator, as the record clearly reveals his decision is reasonably debatable.
B.
The City next argues that the trial court was required to vacate the arbitration award because the portion of the award granting Lt. McIvor overtime was procured by undue means.
A reviewing court may vacate an arbitration award if it was procured by fraud or undue means. N.J.S.A. 2A:24-8(a). "'[U]ndue means' ordinarily encompasses a situation in which the arbitrator has made an acknowledged mistake of fact or law or a mistake that is apparent on the face of the record[.]" E. Rutherford, supra, 213 N.J. at 203 (quoting Office of Emp. Relations, supra, 154 N.J. at 111-12). "The judicial inquiry must consider more than whether a mere mistake occurred." Minkowitz, supra, 433 N.J. Super. at 150 (citing Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349, 356-57 (1994)). Rather, that
formulation requires that the arbitrator[] must have clearly intended to decide according to law, must have clearly mistaken the legal rule, and that mistake must appear on the face of the award. In addition, the error, to be fatal, must result in a failure of intent or be so gross as to suggest fraud or misconduct.
[Id. at 150-51 (citing Tretina, supra, 135 N.J. at 357).]
In determining whether an arbitrator's decision involves a mistake, courts will generally accept an arbitrator's interpretation of a contract if that interpretation is reasonably debatable. Office of Emp. Relations, supra, 154 N.J. at 112. New Jersey courts "have vacated arbitration awards as not reasonably debatable when arbitrators have, for example, added new terms to an agreement or ignored its clear language." Policemen's Benevolent Ass'n, supra, 205 N.J. at 429. Here, the record neither indicates nor even suggests that the Lt. McIvor's arbitration award was procured by undue means because the arbitrator misapplied the law to the facts or misunderstood the legal rule.
The arbitrator applied the relevant contractual provisions in the CNAs to the overtime compensation remedy awarded to Lt. McIvor. Moreover, the arbitrator focused on the express language of Section 27.7, namely
[w]henever in the course of a monthly detail an employee's . . . hours of his tour of duty are rescheduled by more than one (1) hour to meet departmental manpower requirements, the employee shall receive additional compensation equal to two (2) hours pay in addition to payment for the hours actually worked.
In interpreting and applying the plain language of Section 27.7, the arbitrator determined that "[w]hen the City chose to act unilaterally, with reference to changing tour/squad assignment[s] in violation of the [CNAs], it changed the hours of [Lt. McIvor's and Sgt. Otero's] tours of duty by more than one hour[, and . . .] therefore [both] are entitled to the overtime payment authorized by [Section] 27.7."
Moreover, the arbitrator's ultimate conclusion that Lt. McIvor is entitled to further compensation pursuant to Section 27.7 was not an unfair or unreasonable interpretation and application of Sections 3.2 or 3.3 of the CNA.
After thoroughly considering "all the evidence, including the testimony, arguments, documents, exhibits and allegations of the parties at the hearing before" him, the arbitrator reasonably concluded that the City's rescheduling of Lt. McIvor's hours was a violation of the CNA entitling Lt. McIvor to overtime compensation. Ultimately, the City failed to meet the statutory standards for vacation pursuant to N.J.S.A. 2A:24-8(a) and therefore there is no basis to disturb this aspect of the trial court's award confirmation.
C.
The City next argues that officers assigned to a Division other than Patrol have no contractual right, pursuant to Section 7.1.2, to remain on a particular assignment for an entire calendar year. Consequently, the City asserts that the arbitrator's interpretation of Section 7.1.2, which mandates that once an officer selects her squad she is entitled to remain on that squad for the following calendar year, substantially infringed on the City's managerial prerogative under Sections 3.2, 3.3, and 7.1.2 of the CNAs. We disagree.
The City correctly points out that Section 7.1.2 clearly uses the word "squad," and the only police division structured by squads is Patrol. As such, the City argues that Section 7.1.2, which grants an officer the right to remain on the same squad for an entire calendar year, only applies to officers assigned to the Patrol Division. Because Sgt. Otero was reassigned to the Major Crimes Section, and not Patrol, the City contends that Section 7.1.2 does not, and cannot apply to her situation.
Furthermore, the City argues that the Squad Selection Forms, mandated by the July 2007 Consent Award, are used by the parties every October to determine officers' squad hour preferences. Although the City alleges it was indisputably established at the arbitration hearing that Squad Selection Forms are only used for Patrol Division assignments, the arbitrator concluded the opposite and determined that the "plain language of [the Consent Award] makes clear that Section 7.1.2 of both the PBA and SOA [CNAs] are applicable to all members of the Department, and there is no limitation to the Patrol Division."
The arbitrator's interpretation of the Consent Award, and its application to the case at bar, is reasonably debatable. When the Consent Award is viewed through the prism of Section 7.1.2, it is clear that the language of that section references "employees" as those who select a squad, and thus the section is applicable to all members of the department, and not limited to the Patrol Division, as the City asserts. As such, Sgt. Otero's reassignment was governed by Section 7.1.2, despite the fact that both her initial assignment and subsequent reassignment were to sections outside the Patrol Division.
Furthermore, Sgt. Otero's initial assignment to the Narcotics Section did not bar her from completing a Squad Selection Form. Ultimately, the arbitrator found the Unions' argument more persuasive, and therefore concluded Section 7.1.2 applied to Sgt. Otero.
The City admitted in its answer to the Unions' verified complaint that "Sgt. Otero was assigned to the Night Shift of the Narcotics Section and as such, was eligible for night differential." Notwithstanding the conflict in testimony that the arbitrator noted in his decision, he determined the City's unilateral decision to change Sgt. Otero's shift effectively rescheduled her tour of duty hours, thus blurring any distinction between "squads" and "tours of duty" as used in the CNAs.
Regardless of what interpretation is adopted, any tour, squad, and/or shift assignment change made pursuant to Section 7.1.2 still has to be made in writing, which the City failed to comply with. Because no writing exists, the arbitrator determined the City's reassignments violated the CNAs, and both Sgt. Otero and Lt. McIvor were awarded night differential from their reassignment in April 2011 through the end of the year, pursuant to Section 29.7. As the arbitrator's award was not inconsistent with the controlling contractual provisions of the CNAs, he did not exceed his authority in granting the award.
D.
The City next argues that it is essential to the operation of its Police Department that it be allowed to reassign officers to different divisions and shifts each month to adequately protect the public under its management prerogative powers. In crafting its public policy argument, the City contends that its citizens will be placed in extreme danger if the City is foreclosed from reassigning officers at the beginning of a monthly detail.
Arbitration as part of a grievance procedure does not contravene management prerogatives. See Delran Educ. Ass'n v. Delran Bd. of Educ., 277 N.J. Super. 538, 540 (App. Div. 1994). Issues of public policy have been held, under Tretina, to be arbitrable and, as a matter of judicial review, the award must be confirmed if the public policy determination by the arbitrator is reasonably debatable. See Carpenter, supra, 143 N.J. at 443. "Thus, if the correctness of the award, including its resolution of the public-policy question, is reasonably debatable, judicial intervention is unwarranted." E. Rutherford, supra, 213 N.J. at 203.
The arbitrator found, and the trial court confirmed, that the City's managerial prerogative argument "fall[s] in the face of clear contractual language." The arbitrator stated the City failed to prove that "either officer had to have their tours changed because of the financial crisis and subsequent layoff[s], since the positions previously held by Phelan, McIvor and Otero were all assigned to other officers." Consequently, the arbitrator determined the proper remedy for this violation of Section 7.1.2 was the recovery of lost night differentials from the time of their reassignment through the end of the year.
The City's argument that Sgt. Otero had no contractual right to remain in any assignment for a full calendar year because she was not assigned to a Patrol Division "squad," is a reasonably debatable interpretation and application of the CNA. Thus, even if the arbitrator's fashioned remedy was not the preferred or correct outcome, a vacation would be contrary to the deferential standard for reviewing arbitral decisions. See Wyckoff, supra, 409 N.J. Super. at 354-55 (a court should not overrule an arbitration award merely because the court's opinion differs from arbitrator's decision).
Contrary to the City's contention, the arbitrator's decision did not re-write or modify the terms of the CNAs. Although an arbitrator is not welcome to contradict the express language of an agreement, "a rigid rule that an arbitrator's remedy must be expressly authorized by the bargaining agreement would subvert the purpose[] of arbitration[]" as "'a vehicle by which meaning and content are given to the [CNA].'" Local No. 153, supra, 105 N.J. at 452 (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581, 80 S. Ct. 1347, 1352, 4 L. Ed. 2d 1409, 1417 (1960)). It is the arbitrator's role to interpret the CNAs and it is this interpretation that both parties agreed to and bargained for in the collective negotiation process. See, e.g., United Steelworkers of Am., supra, 363 U.S. at 599, 80 S. Ct. at 1362, 4 L. Ed. 2d at 1429 (1960). We reject the City's contention that when the arbitrator performed this "gap-filling" function, he impermissibly rewrote or modified the terms of the CNAs.
E.
The City next alleges that the enforcement of Section 7.1.2 of the CNAs infringes on a non-negotiable term. To be arbitrable, a contract provision must first be negotiable, that is, it is a contractual matter that is not exclusively a management prerogative. See Lacey Twp. Bd. of Educ. v. Lacey Twp. Educ. Ass'n., 259 N.J. Super. 397, 399-400 (App. Div. 1991), aff'd o.b., 130 N.J. 312 (1992). In Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ, 78 N.J. 144, 154 (1978), the Court noted that the PERC has primary jurisdiction to make a determination on the merits of the question of whether a public sector CNA provision, sought to be enforced through grievance arbitration, is negotiable and thus subject to grievance arbitration. See also N.J.S.A. 34:13A-5.4(d).
"Absent a pre-arbitration scope petition asserting that negotiations are not permitted on a subject, the parties are deemed to have agreed to arbitrate all unresolved issues." Twp. of Teaneck v. Teaneck Firemen's Mut. Benevolent Ass'n Local No. 42, 353 N.J. Super. 289, 299 (App. Div. 2002), aff'd o.b., 177 N.J. 560 (2003). See also N.J.A.C. 19:16-5.5(b), (c). Furthermore, "[t]he PERC regulations specifically provide that when a party contends that an unresolved issue is not within the required scope of negotiations, and the other party disagrees, the party seeking to exclude the issue from negotiations 'shall file with [PERC] a petition for scope of negotiations determination.'" Ibid. (quoting N.J.A.C. 19:16-5.5(c)).
The Unions argue that the City was required to raise the negotiability claim with PERC and seek a stay of the arbitration from either the arbitrator or a trial judge while the PERC engaged in a negotiability determination proceeding. The City's failure to do this, according to the Unions, constitutes waiver under Rule 4:5-4.
Under Rule 4:5-4, the Unions claim that to avoid waiver, the City was required to affirmatively raise - as an affirmative defense - a claim or counterclaim asserting that the arbitration award enforced a non-negotiable provision of the CNAs before the trial court.
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It is undisputed that the City failed to file a scope-of-negotiations petition with PERC, stating that negotiations as to enforcement of Section 7.1.2 of the CNA were not appropriate. Section 7.1.2 is a collectively negotiated provision that, as the arbitrator aptly determined, can be enforced through grievance arbitration. "Absent a pre-arbitration scope petition asserting that negotiations are not permitted on a subject, the parties are deemed to have agreed to arbitrate all unresolved issues." Twp. of Teaneck, supra, 353 N.J. Super. at 299 (citing N.J.A.C. 19:16-5.5(b) and (c)). "A party cannot go through the negotiations process and then argue it was not required to engage in that process because the subject was not mandatorily negotiable." Ibid.
Any remaining arguments by appellants lack sufficient merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION