TOWNSHIP OF DOVER v. TEAMSTERS LOCAL 97

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6267-03T36267-03T3

TOWNSHIP OF DOVER,

Plaintiff-Respondent,

v.

TEAMSTERS LOCAL 97,

Defendant-Appellant.

_____________________________________

 

Argued September 20, 2005 - Decided

Before Judges Skillman and Payne.

On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3047-03.

Leonard C. Schiro argued the cause for appellant (Mets & Schiro, attorneys; Mr. Schiro, of counsel and on the brief).

Robert A. Greitz argued the cause for respondent (Citta, Holzapfel, Zabarsky, Leahey & Simon, attorneys; Mr. Grietz, on the brief).

PER CURIAM

Defendant Teamsters Local 97 is the exclusive collective bargaining representative of the "blue collar" workers employed by plaintiff Township of Dover. In 2000, the parties entered into a collective bargaining agreement covering the period between July 1, 2000 and June 30, 2003. Article XIII of that agreement provided:

Foremen or other employees outside the bargaining unit shall not perform any work customarily performed by workers covered by this Agreement, except as may be required to instruct employees or in an emergency as may be required to assist employees.

In 2002, plaintiff entered into a contract with a private landscaping company to remove trees situated at various locations within the municipality. Defendant filed a grievance claiming that this contract violated Article XIII and various other provisions of the collective bargaining agreement because it allowed "outside workers" to perform the jobs of defendant's members. After this claim was unsuccessfully grieved, defendant requested the Public Employment Relations Commission (PERC) to appoint an arbitrator to resolve the dispute.

Plaintiff did not object to the appointment of the arbitrator. However, plaintiff contended before the arbitrator that its decision to contract with a private company for tree removal work that otherwise would have been performed by defendant's members was neither "negotiable" nor "arbitrable" and on this basis "requested the arbitrator to deny and dismiss the grievance."

The arbitrator rejected this defense, stating:

[T]he Township argued that subcontracting is a managerial prerogative which is neither negotiable nor subject to arbitration. Their position is correct, in part, and must be distinguished from the present grievance filed.

The present matter does not contest the right nor legitimacy of the underlying subcontract. Indeed, the Union acknowledges the right of the Township to subcontract. Instead, the grievance raises a specific issue where a subcontractor is performing for the Township and results in a violation of the Agreement. The former is by right, the later is not permissible.

In the opinion of this Arbitrator, the Union did not oppose the subcontractor performing the tree cutting, but claimed a right of the bargaining unit to be afforded overtime work when performed by the Township or by an outside contractor performing work for the Township.

The arbitrator also concluded that plaintiff violated the collective bargaining agreement by contracting with an outside contractor for tree removal services that could have been performed by defendant's members:

Article 13 requires bargaining unit work to be assigned to bargaining unit members unless an emergent situation arises. In the opinion of this Arbitrator, there was no emergent circumstance controlling the present subcontracting. The work could have (and should have) been assigned and performed by bargaining unit personnel.

. . . .

The Township cannot avoid utilizing bargaining unit employees solely on the basis of overtime costs under the present language of the Agreement. Despite the Township's reasonable decision to use an outside contractor as a supplement for tree [removal], that assignment must be undertaken with the provisions of the Agreement and cannot to used as an excuse to substitute non-bargaining unit employees in work for which union employee are entitled.

As a remedy for this violation of the collective bargaining agreement, the arbitrator declared that hereafter defendant "must first offer bargaining unit work to bargaining unit members in compliance with mandates of the Agreement and past practice." In addition, the arbitrator concluded that defendant's members were entitled to a "make-whole" monetary award "for the tree-cutting work performed in 2002 during overtime hours and while bargaining unit employees were off-duty (inclusive of Saturdays)." The arbitrator directed the parties to meet and attempt to reach an agreement regarding that award, and if they were unable to reach agreement, to request the arbitrator to determine this part of the remedy.

Plaintiff filed a complaint in the Law Division seeking to vacate this arbitration award, and defendant filed a counterclaim seeking confirmation of the award. The matter was brought before the trial court by cross-motions for summary judgment. The court concluded in an oral opinion that plaintiff's decision to contract with a private company for tree removal work that otherwise would have been performed by defendant's members was a non-arbitrable managerial prerogative. Accordingly, the court entered summary judgment in favor of plaintiff, vacating the arbitration award. The defendant appealed that decision to this court.

At oral argument, we questioned whether the arbitrability of this dispute, which was the issue upon which the trial court based its decision to vacate the arbitrator's award, should have been referred first to PERC. We also questioned whether the failure to refer the issue to PERC before arbitration precluded its referral to PERC at this time. At our request, the parties filed supplemental briefs dealing with these issues.

The New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -39, confers authority upon PERC to determine whether a particular subject falls within the scope of negotiations or arbitration. N.J.S.A. 34:13A-5.4(d) provides in pertinent part:

The commission shall at all times have the power and duty, upon the request of any public employer or majority representative, to make a determination as to whether a matter in dispute is within the scope of collective negotiations.

Under this provision, "PERC is the forum for the initial determination of whether a matter in dispute is within the scope of collective negotiations." State v. State Supervisory Employees Ass'n, 78 N.J. 54, 83 (1978). "No court of this State is empowered to make this initial determination." Ibid.

In Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978), the Court further explained the primacy of PERC's jurisdiction over issues of negotiability and arbitrability:

PERC has primary jurisdiction to make a determination on the merits of the question of whether the subject matter of a particular dispute is within the scope of collective negotiations.

. . . .

If PERC concludes that the dispute is within the legal scope of negotiability and agreement between the employer and employees, the matter may proceed to arbitration. Where PERC concludes that a particular dispute is not within the scope of collective negotiations, and thus not arbitrable, it must issue an injunction permanently restraining arbitration.

PERC has adopted regulations that set forth the procedures a public employer or employee representative must follow to obtain a determination of whether a particular matter is within the scope of negotiations. N.J.A.C. 19:13-1.1 to -11. Under these regulations, either a public employer or public employee representative "may initiate scope of negotiation proceedings by filing with [PERC] . . . a petition for [a] scope of negotiations determination[.]" N.J.A.C. 19:13-2.1. The regulations do not require a petition for a scope of negotiation proceedings to be filed before arbitration, although both Ridgefield Park and the PERC regulations indicate that this is the preferred procedure. See Ridgefield Park Educ. Ass'n, supra, 78 N.J. at 154; N.J.A.C. 19:13-1.1.

In accordance with N.J.S.A. 34:13A-5.4(d) and the implementing regulations, plaintiff should have filed a scope of negotiations petition with PERC to determine whether its decision to contract with a private company for the removal of trees was a managerial prerogative and hence beyond the scope of negotiations and non-arbitrable. Moreover, when plaintiff attempted to raise the issue of non-arbitrability in the arbitration proceeding, the arbitrator should have stayed the arbitration and required this issue to be submitted to PERC, rather than undertaking to decide it himself. Cf. Ridgefield Park Educ. Assoc., supra, 78 N.J. at 155 (noting that "PERC is empowered to order that arbitration proceedings be suspended during the pendency of a scope-of-negotiations proceedings."). The trial court also should have declined to consider plaintiff's claim that its decision to contract for tree removal services was non-negotiable and referred that dispute to PERC. See City of Newark v. Newark Council 21, N.J. Civil Serv. Ass'n, 320 N.J. Super. 8, 17 (App. Div. 1999); Bd. of Educ. of Plainfield v. Plainfield Educ. Ass'n, 144 N.J. Super. 521, 525-27 (App. Div. 1976).

Defendant argues that because plaintiff failed to file a scope of negotiations petition before the arbitration, it is now estopped from contending that its decision to contract with a private company for tree removal services was a non-negotiable managerial prerogative. In support of this argument, defendant relies upon Township of Teaneck v. Teaneck Firemen's Mut. Benevolent Ass'n Local No. 42, 353 N.J. Super. 289 (App. Div. 2002), aff'd o.b., 177 N.J. 76 (2003). However, unlike this case, which involves a grievance arbitration under the Employer-Employees Relations Act, Teaneck involved a compulsory interest arbitration under the Police and Fire Public Interest Arbitration Reform Act, N.J.S.A. 34:13A-14a to -16.6. In the exercise of its authority under the latter legislation, PERC has adopted a regulation that states:

The failure of a party to file a petition for scope of negotiations determination shall be deemed to constitute an agreement to submit all unresolved issues to compulsory interest arbitration.

[N.J.A.C. 19:16-5.5(c).]

This regulation was the basis for the Court's determination in Teaneck that the employer's failure to file a scope-of-negotiations petition before a compulsory interest arbitration equitably estopped the employer from raising the issue after the arbitration. 353 N.J. Super. at 299-300. PERC has not adopted a regulation comparable to N.J.A.C. 19:16-5.5(c) providing that a party that fails to file a scope-of-negotiations petition before a grievance arbitration is foreclosed from raising the issue at a later stage of the proceedings. Therefore, the rationale of Teaneck has no applicability to this case.

In the absence of a regulation such as N.J.A.C. 19:16-5.5(c), we conclude that plaintiff should not be estopped from raising the defense of the non-arbitrability of its decision to contract with a private company for tree removal services. Although plaintiff did not file a scope petition with PERC, it presented this defense to the arbitrator. At that point in the proceedings, defendant also could have filed a scope petition with PERC. N.J.A.C. 19:13-2.1. Thus, this is not a case like In the Matter of Twp. of Ocean Bd. of Educ. and Twp. of Ocean Teachers' Ass'n, 9 NJPER 397 (P14181 1983), in which PERC refused to entertain a scope petition when the issue of non-arbitrability was raised for the first time after an arbitration award had been rendered and the time for filing an action to vacate the award had expired. Therefore, we reject defendant's argument that plaintiff is estopped from claiming that this dispute is non-arbitrable because it failed to file a timely scope petition.

We also reject plaintiff's argument that this court should decide the arbitrability issue rather than transfer the matter to PERC. We recognize that in Bd. of Educ. of Twp. of Bernards v. Bernards Twp. Educ. Ass'n, 79 N.J. 311, 317-18 (1979), the Supreme Court declined to remand a scope of negotiations issue to PERC and decided the issue itself. However, PERC in that case had decided the same issue presented to the Supreme Court in a prior proceeding. Id. at 317. Moreover, PERC, which appeared before the Court as amicus curiae, took the position that a remand to PERC "would not add anything as this Court already has the benefit of PERC's thinking on the subject." Id. at 317-18. In contrast, there is no indication that PERC has previously addressed the precise issue presented by this appeal, and PERC has not made any appearance before us. Moreover, even though the preferred procedure is for any claim of non-arbitrability to be raised before arbitration, our courts have permitted claims of non-arbitrability to be raised after an arbitration award. See, e.g., Paterson Police PBA Local No. 1 v. City of Paterson, 87 N.J. 78, 84 (1981); City of Newark v. Newark Council 21, N.J. Civil Serv. Ass'n, supra, 320 N.J. Super. at 17. Therefore, we conclude that the preservation of PERC's primary jurisdiction over scope of negotiations issues requires transfer of the scope issue in this case to PERC.

 
Accordingly, we transfer this case to PERC. We do not retain jurisdiction.

(continued)

(continued)

11

A-6267-03T3

October 31, 2005