Opinion
DOCKET NO. A-5518-13T4
02-22-2016
STATE OF NEW JERSEY JUDICIARY, Plaintiff-Appellant, v. PROBATION ASSOCIATION OF NEW JERSEY, CASE-RELATED PROFESSIONAL UNIT, Defendant-Respondent.
Stephen E. Trimboli argued the cause for appellant (Trimboli & Prusinowski, L.L.C., attorneys; Mr. Trimboli, of counsel; Mr. Trimboli and Jinkal Pujara, on the brief). Daniel J. Zirrith argued the cause for respondent (Mr. Zirrith, attorney; Mr. Zirrith and Lynsey A. Stehling, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fuentes, Koblitz and Gilson. On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-00480-14. Stephen E. Trimboli argued the cause for appellant (Trimboli & Prusinowski, L.L.C., attorneys; Mr. Trimboli, of counsel; Mr. Trimboli and Jinkal Pujara, on the brief). Daniel J. Zirrith argued the cause for respondent (Mr. Zirrith, attorney; Mr. Zirrith and Lynsey A. Stehling, on the brief). PER CURIAM
The State of New Jersey Judiciary (Judiciary) appeals from a Law Division order denying its summary action to vacate an arbitration award and instead confirming the award. The arbitrator ruled that the Judiciary had violated a provision of a collective negotiation agreement. We hold that the Law Division erred in denying the application to vacate the arbitration award because the arbitrator disregarded the clear, unambiguous language of the contractual provision. We, therefore, reverse the order of the Law Division confirming the arbitration award and vacate the award as a matter of law.
We note that the parties have not objected to this court deciding this appeal because the rule of necessity "demands that we do so." DePascale v. State, 211 N.J. 40, 44-45 (2012).
I.
We accept the facts as found by the arbitrator, which, as noted by the Law Division judge, were not in dispute. The Judiciary and the Probation Association of New Jersey, Case-Related Professional Unit (PANJ) were parties to a collective negotiation agreement (CNA), which was effective from July 1, 2008 through June 30, 2012. On November 8, 2010, the Judiciary began to implement a reallocation of staffing responsibilities in the Monmouth County Criminal Division. Before November 8, 2010, criminal judges were assisted by a team, consisting of a Team Leader, Probation Officers, and other support staff. The Team Leader would supervise the members of the team and would also perform non-supervisory functions, primarily the management of the judge's court room and calendar. The Probation Officers spent the majority of their time working on pre-trial investigative reports and pre-sentence reports.
Beginning on November 8, 2010, Team Leaders were assigned to work with two criminal judges. The court room and calendar management duties of Team Leaders were reassigned to Senior Probation Officers, who were called Court Coordinators. The Court Coordinators continued to be supervised by Team Leaders. Thus, the Criminal Division teams were rearranged so that one Team Leader worked with two criminal judges and supervised Court Coordinators, Probation Officers, and other staff.
PANJ is the exclusive bargaining representative for all non-supervisory, case-related professional employees of the Judiciary, including Probation Officers. On December 9, 2010 and July 20, 2011, PANJ filed grievances on behalf of all Probation Officers challenging the Monmouth Vicinage's restructuring of staff and seeking additional compensation for Senior Probation Officers who were assigned to function as Court Coordinators.
PANJ, as representative of the Professional Supervisors Union, filed separate grievances on behalf of Team Leaders challenging the restructuring. The Public Employment Relations Commission (PERC) concluded that those grievances raised non-negotiable management prerogatives and restrained arbitration. We affirmed PERC's decisions in separate, consolidated appeals. In re N.J. State Judiciary, Nos. A-6013-12 and A-6041-12 (App. Div. Mar. 12, 2015).
The parties agreed on the following statement of issue to be decided by the arbitrator:
Did the Monmouth County Vicinage violate Articles 2.1, 2.2, 2.4, 5.1, 7.6(E) and 27 of the parties' collective negotiations agreement when it assigned and required case-related employees to perform the Calendar and Case Management functions for the Criminal Division Judges and Trial Teams?Following a two-day hearing, the arbitrator ruled that the Judiciary had not violated Articles 2.1, 2.2, 2.4, 5.1, or 27 of the parties' CNA. The arbitrator also held that the Judiciary had violated Article 7.6(E) of the CNA. Article 7.6(E) provides:
If so, what shall be the remedy?
The Judiciary may make "acting appointments." Employees appointed to serve in an acting capacity in a professional supervisory position shall receive a 5% promotional increase to their base salary or the minimum of the salary range, whichever is greater (but not more than the maximum of the salary range) for the time period the employee serves in an acting capacity. This section should not be construed as replacing normal recruitment procedures.
The arbitrator found that (1) before November 8, 2010, Team Leaders spent the majority of their time managing one criminal judge's court room and calendar; (2) after November 8, 2010, one Team Leader was assigned to two criminal judges and assumed the supervisory responsibility formerly done by two Team Leaders; (3) the Senior Probation Officers who assumed the position of Court Coordinators on or after November 8, 2010, took over the responsibilities for managing a criminal judge's court room and calendar; and (4) Court Coordinators performed the majority of the duties previously performed by a Team Leader. Thus, the arbitrator reasoned:
The Vicinage's restructuring of the position to exclude certain supervisory functions and the assignment of the major job duties formerly performed by a Team Leader, namely the management of the Judge's calendar and the management functions of the court room, is effectively a constructive appointment of [Senior Probation Officers] to the position without the formal designation of Team Leader.
The arbitrator also found that Court Coordinators did not assume any supervisory functions or duties. Specifically, the arbitrator found: "The testimony in this matter confirms that the vast majority of the time a Court Coordinator's time is devoted to the management of the Judge's calendar and the management functions of the court room which the Union and the Vicinage agree is non-supervisory." Indeed, all of the witnesses at the arbitration hearing confirmed that Court Coordinators did not perform any supervisory duties. Moreover, it was undisputed that Team Leaders continued to supervise Court Coordinators, as well as other judicial staff who made up the team assisting the criminal judges.
In February 2014, the Judiciary filed a summary action in the Law Division pursuant to N.J.S.A. 2A:24-7 seeking to vacate the arbitration award. PANJ counterclaimed seeking to confirm the award. After hearing oral argument, the Law Division judge confirmed the arbitration award. The judge held that the arbitrator had neither disregarded the express language of the CNA nor exceeded his powers in interpreting Article 7.6(E) of the CNA. The judge also held that the arbitrator's decision was reasonably debatable and, thus, the judge would not disturb the arbitrator's interpretation of Article 7.6(E). Finally, the judge rejected the Judiciary's contention that the arbitration award violated public policy by eliminating the Judiciary's ability to effectively manage its employees.
On May 28, 2014, the Law Division entered judgment for PANJ directing the Judiciary to compensate all employees assigned to Court Coordinator positions since November 8, 2010, in accordance with Article 7.6(E) of the parties' CNA. That judgment was amended on June 26, 2014, to eliminate an award of attorney's fees to PANJ. The Judiciary now appeals.
II.
On appeal, the Judiciary argues (1) the Law Division judge erred in not vacating the arbitration award because the arbitrator disregarded the clear language of the CNA; (2) the judge erred in applying the reasonably debatable standard; (3) the judge erred in reasoning that the Judiciary was foreclosed from vacating this award because it had failed to appeal an arbitration award in the "Rizzi" grievance; and (4) the arbitration award was contrary to public policy because it prevented the Judiciary from reallocating its staff.
In 2009, PANJ filed a grievance on behalf of Ann Rizzi who was a Master Probation Officer in the Monmouth Vicinage. When a Team Leader retired, Rizzi was assigned the majority of the duties performed by that retired Team Leader. The same arbitrator who heard this arbitration determined that Rizzi was effectively appointed to serve in an acting capacity as a Team Leader and, thus, pursuant to Article 7.6(E) of the CNA, was entitled to a five percent increase in her base salary for the period that she acted as a Team Leader. The Judiciary did not appeal the Rizzi award, and we express no opinion as to whether the Rizzi arbitration was correctly decided. --------
In New Jersey, "[a]rbitration is a favored form of dispute resolution, whose usefulness for labor-management issues is well-recognized . . . ." Borough of E. Rutherford v. E. Rutherford PBA Local 275, 213 N.J. 190, 201 (2013). Consistent with this principle, "courts grant arbitration awards considerable deference." Ibid.; accord PBA, Local No. 11 v. City of Trenton, 205 N.J. 422, 428-29 (2011).
"Generally, when a court reviews an arbitration award, it does so mindful of the fact that the arbitrator's interpretation of the contract controls." Borough of E. Rutherford, supra, 213 N.J. at 201. "An appellate court's review of an arbitrator's interpretation is confined to determining whether the interpretation of the contractual language is 'reasonably debatable.'" N.J. Transit Bus Operations, Inc. v. Amalgamated Transit Union, 187 N.J. 546, 553-54 (2006) (quoting State v. Int'l Fed'n of Prof'l & Tech. Eng'rs, Local 195, 169 N.J. 505, 513 (2001)). "Under 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.'" Borough of E. Rutherford, supra, 213 N.J. at 201-02 (alteration in original) (quoting Middletown Twp. PBA Local 124 v. Twp. of Middletown, 193 N.J. 1, 11 (2007)).
While a court's standard of review of an arbitration award is highly deferential, four statutory bases exist for vacating an arbitration award. Pursuant to the New Jersey Arbitration Act, N.J.S.A. 2A:24-1 to -11, which now governs collectively negotiated agreements, a court shall vacate an award:
a. Where the award was procured by corruption, fraud or undue means;Moreover, "a court 'may vacate an award if it is contrary to existing law or public policy.'" Borough of E. Rutherford, supra, 213 N.J. at 202 (quoting Middletown Twp., supra, 193 N.J. at 11).
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 . . . or in refusing to hear evidence . . . 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.
[N. J.S.A. 2A:24-8.]
Pursuant to N.J.S.A. 2A:24-8(d), the power to vacate an arbitration award "serves as a check on whether the arbitration award 'draw[s] its essence from the bargaining agreement.'" N.J. Transit Bus Operations, supra, 187 N.J. at 554 (alteration in original) (quoting Cty. Coll. of Morris Staff Ass'n v. Cty. Coll. of Morris, 100 N.J. 383, 392 (1985)). Consequently, an arbitration award may be overturned if the "determination on its face constitute[s] a manifest disregard of the contractual terms, thereby leading to an unjust result." PBA Local 160 v. Twp. of N. Brunswick, 272 N.J. Super. 467, 476 (App. Div.), certif. denied, 138 N.J. 262 (1994). "Indeed, it is axiomatic that an arbitrator's 'award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.'" PBA, Local No. 11, supra, 205 N.J. at 429 (quoting United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 1361, 4 L. Ed. 2d 1424, 1428 (1960)).
Here, the award cannot stand because the arbitrator ignored the contractual language of Article 7.6(E) in making his award. Specifically, the arbitrator disregarded and ascribed no meaning to the term "professional supervisory position." Article 7.6(E) provided, in relevant part: "Employees appointed to serve in an acting capacity in a professional supervisory position shall receive a 5% promotional increase to their base salary or the minimum of the salary range, whichever is greater . . . ."
The arbitrator ignored the phrase "professional supervisory position" and instead focused on the fact that Court Coordinators were doing the majority of the work previously done by Team Leaders. The work assumed by Court Coordinators, however, was non-supervisory work; that is, Court Coordinators took over the responsibility of court room and calendar management. As a consequence, the arbitrator's focus ignored the plain contractual language of Article 7.6(E) that employees must serve in a "professional supervisory position" to be entitled to higher compensation. By ignoring the terms of the agreement, the arbitrator acted beyond the scope of his authority as defined in Article 10 § 1(3) of the CNA: "The arbitrator shall not have the power to add to, subtract from, or modify the provisions of this Agreement . . . ." See Cty. Coll. of Morris Staff Ass'n, supra, 100 N.J. at 393 ("[T]he arbitrator's 'reading in' ignored the contractual provision that prohibited him from adding to, altering, or modifying the parties' agreement.").
Court Coordinators were not doing any supervisory work. Team Leaders continued to supervise Court Coordinators, as well as all other team members. Instead of focusing on the Court Coordinators' job duties, the arbitrator compared the annual performance advisories for Team Leaders before and after the November 2010 staff restructuring. That analysis ignored the contractual language of "a professional supervisor position." Before November 2010, Team Leaders were performing non-supervisory work, as well as limited supervisory work. After the restructuring, Team Leaders took on more supervisory work and the majority of their non-supervisory work was reassigned to Senior Probation Officers, who became Court Coordinators. That reassignment of non-supervisory work did not mean that Court Coordinators were functioning in a professional supervisory position. Nothing in the plain language of Article 7.6(E) prevented the Judiciary from reassigning non-supervisory work from a supervisor to an employee functioning in a non-supervisory position.
The arbitrator never sought to interpret the phrase "professional supervisory position" and, thus, did not put forward an interpretation of Article 7.6(E) that was "reasonably debatable." Instead, the arbitrator ignored plain and unambiguous language in Article 7.6(E). Accordingly, this is one of those rare instances where the arbitration award must be vacated because the arbitrator ignored the plain contractual language of the CNA. See, e.g., Cty. Coll. of Morris Staff Ass'n, supra, 100 N.J. at 397-98 (declining to sustain an arbitration award because the "arbitrator exceeded his authority by adding" an extra term to the negotiated agreement); City Ass'n of Supervisors & Adm'rs v. State Operated Sch. Dist., 311 N.J. Super. 300, 312 (App. Div. 1998) (rejecting an arbitration award where the arbitration panel relied on past practices and "ignor[ed] the clear language of the agreement"); PBA Local 160, supra, 272 N.J. Super. at 475 (overturning an arbitration award that disregarded an explicit term of the negotiated agreement); see also Beaird Indus., Inc. v. Local 2297, Int'l Union, 404 F.3d 942, 946-47 (5th Cir. 2005) (overturning an arbitration award where the arbitrator balanced the parties' interests instead of applying the contract's language).
Having determined that the arbitration award should be vacated because it ignored contractual language, we need not reach the other arguments raised by the Judiciary, including the contention that the arbitration award violated New Jersey public policy.
Reversed. The arbitration award is vacated. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION