Opinion
DOCKET NO. A-4786-11T4
06-02-2014
SHERRY SCULL, Appellant, v. LOCAL FINANCE BOARD, Respondent.
Andrew Bayer argued the cause for appellant (Gluck Walrath, LLP, attorneys; Mr. Bayer, of counsel and on the briefs; David A. Clark and Troy Kaplan, on the briefs). Donald M. Palombi argued the cause for respondent (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Palombi, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Argued before Judges Sapp-Peterson and Hoffman.
On appeal from the Local Finance Board, Department of Community Affairs.
Andrew Bayer argued the cause for appellant (Gluck Walrath, LLP, attorneys; Mr. Bayer, of counsel and on the briefs; David A. Clark and Troy Kaplan, on the briefs).
Donald M. Palombi argued the cause for respondent (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Palombi, on the brief). PER CURIAM
This is an appeal from the March 14, 2012 final agency decision of the Local Finance Board of the Department of Community Affairs (Board) adopting the initial decision of the administrative law judge (ALJ), which found appellant Sherry Scull, while serving as a member of Pemberton Township Council (Council), violated the Local Government Ethics Law, specifically N.J.S.A. 40A:9-22.5(d), when she voted to adopt an ordinance establishing the salaries of twelve township officials, including that of the Water Superintendent, her husband's direct supervisor. The final decision of the Board also adopted the penalty of $200 assessed against appellant in the initial decision. For reasons that follow, we affirm.
I.
Appellant has served as a member of the Council since 2007. In 2009, the Council introduced and eventually adopted by vote the Communications Workers of America (CWA) Salary Ordinance No. 5-2009 (CWA contract), which implemented the terms of a new collective bargaining agreement between the Township and the CWA. The terms of the contract established salaries, compensation and benefits for twelve supervisory positions in the Township, including Water Superintendent. Notably, at all relevant times, appellant's husband, Harry Scull, was employed by the Pemberton Township Water Division and his direct supervisor was the Water Superintendent.
CWA is the union representing the Township's supervisors; the American Federation of State, County, and Municipal Employees (AFSCME), which represents all of the "rank and file" employees in the Water Division, is the other relevant union pertinent to this appeal.
As of January 7, 2009, when the Council adopted the resolution approving the CWA contract, the Township Water Division consisted of ten members, including appellant's husband, a member of the AFSCME. Because her husband was an AFSCME member, appellant recused herself when the Council reviewed and voted on the 2008 AFSCME contract.
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As a Council member, appellant participated in the introduction of and voted on the resolution authorizing the CWA contract. Indeed, no objections were raised regarding her participation in the Council's consideration and approval of the CWA contract until after the voting occurred.
Following the adoption of the CWA contract, the public questioned whether appellant should have recused herself from voting on the contract because her husband's supervisor was a member of the CWA bargaining unit whose salary and benefits were established by the ordinance. The Township Solicitor's office then reviewed the matter and opined appellant had no conflict of interest and there was no need for the Council to readopt the ordinance without her participation. Thereafter, in April and June 2009, the Board received two complaints alleging appellant violated N.J.S.A. 40A-9-22.5(d) by participating in the CWA contract vote.
After reviewing the complaints, the Board issued a Notice of Violation (NOV) in September 2009 and imposed a $200 fine. The Board concluded because Ordinance 5-2009
had a direct financial impact on the Water Department Superintendent who supervises the husband of [appellant] and, given the scope of control wielded by a Department Superintendent over his employees . . . both [appellant] and her husband had a direct or indirect personal involvement in the Ordinance that might reasonably be expected to impair her objectivity or independence of judgment in violation of N.J.S.A. 40A:9-22.5(d).
Appellant subsequently requested an administrative hearing to contest the determination before the Office of Administrative Law in accordance with N.J.A.C. 5:35-1.1(i)(2). With no material facts in dispute, both sides moved for summary disposition. After hearing oral argument, the Administrative Law Judge (ALJ) granted the Board's motion, sustained the NOV finding appellant violated N.J.S.A. 40A:9-22.5(d), and found the $200 fine appropriate. In his decision, the ALJ considered the direct supervisory relationship between the Water Superintendent and appellant's husband and the "many conceivable ways a supervisor can impact the employment of an individual." The ALJ concluded a direct personal interest existed and this interest was "neither fanciful nor nebulous, and could reasonably be expected to impair [appellant 's] objectivity or independence of judgment."
The Board issued its final agency decision on March 14, 2012, adopting the ALJ's decision in its entirety. This appeal followed.
II.
We review the final administrative determination of the Board, not the ALJ, and accordingly, we must affirm the agency's determination "unless its conduct is arbitrary, capricious or unreasonable." Adamar v. Dep't. of Law, 250 N.J. Super. 275, 295 (App. Div. 1991); see also Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). Moreover, we must give deference to an agency's interpretation of a statute it administers. G.S. v. Dep't. of Human Servs., 157 N.J. 161, 170 (1999); P.F. v. N.J. Div. Disab., 139 N.J. 522, 529-30 (1995).
However, with regard to questions of law, as here, an agency has "no superior ability to resolve purely legal questions, and that a court is not bound by an agency's determination of a legal issue is well established." Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992). We simply "are not bound by an agency interpretation of a strictly legal issue . . . when that interpretation is inaccurate or contrary to legislative objectives." G.S., supra, 157 N.J. at 170; see also Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973) (holding "[a]n appellate tribunal is . . . in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue").
Appellant argues the constraints imposed by civil service regulations and the AFSCME union contract prevent the Water Superintendent from wielding significant control over her husband and thus, no conflict existed requiring recusal. The Board disagrees, asserting appellant had a direct personal interest in the CWA contract, by virtue of the relationship between her husband and the Water Superintendent.
The Ethics Law prohibits local government officers from acting in any matter in which she or he "has a direct or indirect financial or personal involvement that might reasonably be expected to impair his [or her] objectivity or independence of judgment." N.J.S.A. 40A:9-22.5(d). This prohibition codifies a long-standing common law principle that a public official is disqualified from acting in a matter in which she or he has a conflicting interest that would interfere with his or her public duty. Griggs v. Borough of Princeton, 33 N.J. 207, 219-220 (1960). "The statutory bar 'is not confined to instances of possible material gain[,] but . . . it extends to any situation in which the personal interest of a board member in the 'matter' before it, direct or indirect, may have the capacity to exert an influence on his action in the matter.'" Randolph v. City of Brigantine Planning Bd., 405 N.J. Super. 215, 225 (App. Div. 2009) (quoting Zell v. Borough of Roseland, 42 N.J. Super. 75, 81 (App. Div. 1956)). Our Supreme Court has interpreted the statutory provision as precluding action by board members in four situations:
(1) "Direct pecuniary interests," when an official votes on a matter benefitting [sic] the official's own property or affording a direct financial gain; (2) "Indirect pecuniary interests," when an official votes on a matter that financially benefits one closely tied to the official, such as an employer, or family member; (3) "Direct personal interest," when an official votes on a matter that benefits a blood relative or close friend in a non-financial way, but a matter of great importance, as in the case of a councilman's mother being in the nursing home subject to the zoning issue; and (4) "Indirect Personal Interest," when an official votes on a matter in which an individual's judgment may be affected because of membership in some organization and a desire to help that organization further its policies.
[Wyzykowski v. Rizas, 132 N.J. 509, 525-26 (1993).]
Disqualification is required when the officials' "direct or indirect private interests may be at variance with the impartial performance of their public duty." Randolph, supra, 405 N.J. Super. at 225 (citing Aldom v. Borough of Roseland, 42 N.J. Super. 495, 501 (App. Div. 1956)); see, e.g., Kane Props., LLC v. City of Hoboken, 214 N.J. 199, 222-23 (2013) (conflict of interest invalidated resolution where the city council's attorney had previously represented the principal objector to the project before the zoning board); Randolph, supra, 405 N.J. Super. at 231-33 (conflict of interest existed where Board member and Zoning Officer, whose engineering firm employed the Board engineer, had a personal relationship for ten years, lived together, and owned a home together); Marlboro Manor, Inc. v. Bd. of Comm'rs, 187 N.J. Super. 359, 362-63 (App. Div. 1982) (official action denying relocation of liquor license invalidated because two members of the township council were members of church that, through its pastor and other members, was a principal objector and failed to disclose membership). In each of these cases a disqualifying interest was found because "an objectively reasonable, fully informed member of the public would perceive that the participation by [the official] in the proceedings calls into question the impartiality of the governing body and the integrity of the proceedings." Kane, supra, 214 N.J. at 223.
However, not all interests "possess the same capacity to tempt the public official to depart from his or her sworn duty." Haggerty v. Red Bank Borough Zoning Bd. of Adjustment, 385 N.J. Super. 501, 513 (App. Div. 2006). "A remote and speculative interest will not be held to disqualify the official." Ibid. (quoting Barrett v. Union Twp. Comm., 930 N.J. Super. 195, 201 (App. Div. 1989)). Nevertheless, the decisive factor in determining when disqualification is mandated is whether there is a potential for conflict, rather than proof of an actual conflict. Thompson v. City of Atlantic City, 190 N.J. 359, 374 (9007); see also Griggs, supra, 33 N.J. at 219 ("The question is whether there is a potential for conflict, not whether the public servant succumbs to the temptation or is even aware of it."). In other words, "[i]t is not simply the existence of a conflict . . . but the appearance of a conflict" that requires recusal. Randolph, supra, 405 N.J. Super. at 226. Indeed, "[m]arital status is . . . not a remote or trivial interest." Shapiro v. Mertz, 368 N.J. Super. 46, 55 (App. Div. 2004).
Here, appellant argues she was not required to disqualify herself because the Council exerted no direct control over employees and the Water Superintendent could not impact the salary, vacation time, healthcare, or discipline of employees at any level. Accordingly, she argues the Water Superintendent had no control over her husband other than managing daily work assignments and thus, no conflict existed. However, as previously noted, the appropriate standard is whether the personal interest of the official may have the capacity to exert an influence on his or her decision in a matter where a conflict exits.
We take a closer examination of the Water Superintendent's responsibilities and the AFSCME contract to better understand the potential for a conflict of interest. During the period under review, the Water Superintendent had the following responsibilities: directing, coordinating, and overseeing the activities of workers engaged in the installation, maintenance, and repair of water distribution facilities; inspecting field work to insure conformance with specifications; establishing work plans and methods for subordinate's assignments; and completing employee performance assessments and evaluations.
Pemberton Township employees are governed by the Civil Service Act, N.J.S.A. 11A:1-1 and, as such, appellant's husband's employment was subject to Civil Service rules on promotions and discipline. However, the AFSCME contract governing the employment of appellant's husband provided promotions "will be considered upon written request from an employee, an employee's supervisor, AFSCME Union officials, and/or at the initiative of the Township Administration." The contract further detailed the procedure for setting salaries for all AFSCME union members, in addition to the regular work hours and overtime rights. It specifically provided an employee can receive overtime if "requested and authorized by an employee's Department Head or immediate supervisor . . . ." With regard to vacation time, while generally based on seniority, it must be scheduled considering the mutual convenience of the Township and its employees; "[v]acation shall be scheduled by the Department Head or designee so as not to interfere with the efficient operation of the Department."
In this case, the record indicates many ways in which a supervisor could impact an individual's employment positively or negatively. appellant's husband was one of only ten employees in the Township Water Division; the Water Superintendent's responsibilities in directing and coordinating the activities of the workers, establishing the work plans, and inspecting the field work resulted in substantial interaction on a daily basis. Thus, the Superintendent's oversight of employees' work schedules and assignements allowed for direct control over the tasks appellant's husband must carry out on a daily basis, and consequently, the Superintendent had a daily impact on his employment. Furthermore, the AFSCME contract, while addressing overtime and vacation, provided that a worker's use of overtime and scheduling of vacation time both required supervisory approval. Therefore, we agree with the Board that a supervisor can have an impact on the work atmosphere of any employee. A supervisor's authority to commence disciplinary proceedings is illustrative, though not exhaustive, of how a supervisor can impact the employment of an individual.
Finally, appellant argues no conflicting interest existed because the union contracts and civil service regulations severely limited the Water Superintendent's ability to impact her husbands' employment in an meaningful way. Nevertheless, appellant recused herself from voting on the ordinance enacting the salaries set by the AFSCME contract, even though union contracts and civil service regulations provided a similar limitation on ability to impact her husbands' employment in a meaningful way. For similar reasons appellant correctly recused herself from voting on the AFSCME contract, she should have recused herself in this matter.
We further agree with the ALJ's explanation, which the Board adopted, that
[t]he fact that the ordinance was in essence a ratification of . . . a previously approved union contract does not in any way diminish the power or discretion afforded to the members of the council. . . . The interest presented is real, it is not made less so by the presence of union contracts governing either her husband's or his supervisor's employment.
While there is no evidence appellant specifically intended to use her office to effect an outcome that would benefit her husband, the key is the existence of the conflict. Therefore, we find this matter presents a direct personal interest as appellant's voting on a matter that affected her husband's supervisor clearly presented the potential to undermine the public confidence in the objectivity and impartiality of the local government in violation of N.J.S.A. 40A:9-22.5(d).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION