IN THE MATTER OF FLEMINGTON-RARITAN REGIONAL BOARD OF EDUCATION - and FLEMINGTON-RARITAN EDUCATION ASSOCIATION -

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1167-10T4

IN THE MATTER OF

FLEMINGTON-RARITAN REGIONAL

BOARD OF EDUCATION,

Petitioner-Appellant,

and

FLEMINGTON-RARITAN

EDUCATION ASSOCIATION,

Respondent-Respondent.

________________________________________________________________

Argued June 1, 2011 Decided June 27, 2011

Before Judges Baxter and Koblitz.

On appeal from the Public Employment Relations Commission, Docket No. SN-2010-053.

David W. Carroll argued the cause for appellant (Parker McCay, P.A., attorneys; Mr. Carroll, on the briefs).

Keith Waldman argued for the cause for respondent (Selikoff & Cohen, P.A. attorneys; Mr. Waldman and Kathleen L. Kirvan, on the brief).

Don Horowitz, Deputy General Counsel, argued the cause for the Public Employment Relations Commission (Mr. Horowitz, attorney, and on the statement in lieu of brief).

PER CURIAM

Flemington-Raritan Regional Board of Education (Board) appeals from a September 23, 2010 final agency decision of the Public Employment Relations Commission (PERC) that required the Board to arbitrate a grievance filed by the Flemington-Raritan Regional Education Association (Association) concerning the elimination of summer work hours for four groups of employees who were members of the Association. We affirm.

I.

The Board and the Association were parties to a collective negotiation agreement covering the period July 1, 2007 through June 30, 2010. The agreement contained a provision requiring the following categories of staff members to be available for summer work if needed: media specialists, library clerks, computer teachers, school nurses, child study team members, members of the guidance department, "gifted and talented" teachers, and autism program staff.

In the spring of 2009, the Board was faced with significant financial constraints that necessitated budgetary restrictions. At its March 30, 2009 public hearing on the proposed budget, the Board proposed to reduce its expenditures for four categories of employees in the amount of $531,434. The budget was approved by the voters at the annual school election in April 2009. The Board proposed to eliminate more than 84,000 summer work hours for those categories of employees.

According to the Board, "a full week" before circulating a memorandum describing the elimination of the summer work hours, then-Superintendent, Dr. Jack Farr, forwarded to the president of the Association, Susan Vala, a copy of the memorandum he intended to send to all staff members whose summer hours were being eliminated. Vala was also one of the affected teachers. When no response to the draft memorandum was received from either the Association or Vala, Farr finalized the draft and forwarded it to each of the affected staff members on April 27, 2009. The memorandum notified the teachers that the summer work positions would be eliminated, and that some of the duties and responsibilities previously performed by them over the summer would be "re-directed to and handled by administrators and technology staff." The memorandum also advised each staff member that other duties each of them typically performed during the summer would "continue, but [would] be performed during the regular school year and the regular school work day."

On May 26, 2009, the Association filed a written grievance alleging violations of various contract provisions as well as a failure to negotiate terms and conditions of employment. In its grievance, the Association requested "re-instatement of the contracted summer hours and appropriate compensation." The Association also alleged that the Board's proposal to reassign to non-unit employees, namely, two of the administrators and several high school students, the tasks that had previously been performed by members of the Association violated the collective bargaining agreement.

Farr denied the grievance on June 25, 2009 prior to leaving his employment with the district. The Board posted job notices for the positions of Summer District Technology Maintenance and Summer District Technology Support. The Board hired employees into those positions who were not represented by the Association, and who were not therefore members of the bargaining unit. The incoming Superintendent, Greg Nolan, denied an identical grievance on July 2, 2009.

On January 25, 2010, the Board filed a petition with PERC seeking a scope of negotiations determination. In particular, the Board asked PERC to issue a restraint on the upcoming binding arbitration of the grievance that the Association had filed. The Board petitioned PERC to issue an order removing the Association's grievance from arbitration as a non-negotiable issue.

After considering the written submissions of the parties, PERC issued its written decision on September 23, 2010. Notably, neither side requested an evidentiary hearing on any issues of fact. PERC ruled that the Board was entitled to eliminate the additional summer work previously performed by ten-month employees. Accordingly, PERC held that the Board was not obligated to arbitrate the Association's claim that the employees were contractually entitled to summer work. PERC reached a different conclusion however, on what it described as the "unit work claims." In particular, PERC held that a grievance challenging an employer's decision to move unit work to non-unit employees for economic reasons is an issue that is mandatorily arbitrable in the event of a dispute.

PERC also held that the elimination of the summer work, and the requirement that members of the Association instead perform the required tasks during the regular school year, was also mandatorily subject to arbitration.

On appeal, the Board challenges only the second of the three rulings issued by PERC, namely, the "unit work claims." The Board argues that "[t]he transfer of unit work in the context of this case is a nonnegotiable and nonarbitrable managerial prerogative which is inseparable from the primary decision to eliminate summer work hours." In particular, the Board maintains that PERC's decision is: 1) "inconsistent with, and constitutes an end run around, the basic holding [issued by PERC] that the Board's decision to eliminate the summer work hours was a nonnegotiable managerial prerogative"; 2) inconsistent with governing case law; and 3) "procedurally defective" because PERC issued its findings "in a summary judgment type proceeding on contested and material issues of fact" without conducting a hearing.

II.

The judicial role when reviewing an action of an administrative agency is generally restricted to three inquiries:

(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law;

(2) whether the record contains substantial evidence to support the findings on which the agency bases its action; and

(3) whether, in applying the legislative policy to the facts, the agency erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[City of Jersey City v. Jersey City Police Officers Benevolent Ass'n, 154 N.J. 555, 567 (1998) (quoting In re Musick, 143 N.J. 206, 216 (1996)).]

Unless there are "countervailing expressions of legislative intent" or "constitutional concerns," we will apply a deferential standard of review to determinations made by PERC. Ibid. When it enacted the New Jersey Employer-Employee Relations Act (Act), N.J.S.A. 34:13A-1 to -21, the Legislature granted PERC "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." N.J.S.A. 34:13A-5.4(d). A PERC decision concerning the scope of negotiations "will stand unless it is clearly demonstrated to be arbitrary or capricious." Jersey City, supra, 154 N.J. at 568 (citation omitted).

In In re Local 195, IFPTE, 88 N.J. 393, 404-05 (1982), the Supreme Court established the criteria that must be applied when determining the negotiability of disputes between public employers and employees. The Court held that 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.

[Ibid.]

With three exceptions, which we describe below, the "unit work rule," is a mandatory subject of negotiations. Jersey City, supra, 154 N.J. at 577. The Court described the "unit work rule" as a prohibition on the "shifting of work from employees within a negotiations unit to other employees outside the unit." Id. at 565.1

The Board argues that the "transfer of unit work in the context of this case is a nonnegotiable and nonarbitrable managerial prerogative which is inseparable from the primary decision to eliminate summer work hours." As we have noted, a grievance concerning an alleged violation of the unit work rule is a "mandatory subject of negotiations," absent one of the three exceptions. Id. at 577. We decline to accept the Board's invitation to create another exception.

The Board also argues that PERC's September 23, 2010 decision was arbitrary and capricious because of the agency's failure to consider, much less apply, the three exceptions to the general rule that the transfer of unit work is mandatorily negotiable. In Jersey City, supra, the Court established the following three exceptions to the unit work rule:

(1) the union has waived its right to negotiate over the transfer of unit work,

(2) historically, the job was not within the exclusive province of the unit-personnel, and

(3) the municipality is reorganizing the way it delivers government services.

[Jersey City, supra, 154 N.J. at 577.]

The Board maintains that PERC was obliged to consider these three exceptions.

In reply, the Association maintains that the Board is not entitled to raise on appeal the issue of PERC's failure to address the three exceptions to the unit work rule because the Board failed to raise that issue before PERC. The Association maintains that the Board had

multiple opportunities to make a substantive argument to PERC regarding the three exceptions to the 'work unit rule,' but did not. . . . Instead, the Board chose to wait until it got before the appellate court to delve into a protracted discussion of the exceptions. The Board's decision not to raise this issue below makes its appeal subject to the plain error standard of review.

In support of its argument that the Board failed to raise before PERC any argument pertaining to the three exceptions, the Association points to the brief the Board submitted to PERC. The Association is correct that the Board's legal argument to PERC made no mention of "the three exceptions."2 Instead, the Board confined its argument to the following claim:

THE SUBJECT MATTER OF THE UNDERLYING GRIEVANCE IS A NON-NEGOTIABLE AND NON-ARBITRABLE MANAGEMENT PREROGATIVE; ARBITRATION SHOULD BE RESTRAINED.

In support of that argument, the Board wrote, "[t]he general principle that Reductions in Force (RIF) are nonnegotiable and nonarbitrable is well established." The Board went on to discuss numerous PERC precedents in which PERC concluded that various boards of education had the non-negotiable right to lay off employees. The Board also maintained that because it had the non-negotiable right to eliminate the summer positions, the shift of work to non-unit employees was simply "the natural consequence of the managerial decision to eliminate the summer positions, and is inseparable from that managerial decision." The Board concluded its argument to PERC by stating:

[A]rbitration of the Board's managerial decision to eliminate summer work for certain 10 month staff members should be enjoined and restrained. The arbitrator is without authority to overturn the Board's decision, reinstate the positions or to order payment to the affected staff for the eliminated summer work, and there is no negotiable impact on workload.

Thus, at no time did the Board argue before PERC that any of the exceptions to the unit work rule applied.

Absent circumstances not relevant here, a party is precluded from raising on appeal an issue that could have been, but was not, raised before the original tribunal. Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229, 234 (1973). We agree with the Association, and with PERC, that the issue before the Commission, and before us, is not whether the grievance should be sustained or denied, but only whether the subject of the parties' dispute falls within the scope of legally negotiable and arbitrable subjects under the Act. PERC applied its expertise, and answered that question in the affirmative. We have been presented with no meritorious basis upon which to disturb the result PERC reached, especially in light of the Board's failure to argue before PERC that any of the three exceptions applied.

As the Court observed in Ridgefield Park Educ. Ass'n v Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978), whether there is merit to the grievance is not a matter to be decided by PERC, because the role of PERC is limited to deciding the "abstract issue" of whether the dispute is subject to collective negotiations. The Court stated:

The Commission is addressing the abstract issue: is the subject matter in dispute within the scope of collective negotiations. Whether that subject is within the arbitration clause of the agreement, whether the facts are as alleged by the grievant, whether the contract provides a defense for the employer's alleged action, or even whether there is a valid arbitration clause in the agreement, or any other question which might be raised is not to be determined by the Commission in a scope proceeding. Those are questions appropriate for determination by an arbitrator and/or the courts.

[Ridgefield Park, supra, 78 N.J. at 154 (internal quotation marks and citation omitted.]

PERC performed the limited function that Ridgefield Park describes. Although the three exceptions to the unit work rule were applied and considered in detail by PERC and by the Court in Jersey City, supra, 154 N.J. at 575-81, here, on the limited record before it, PERC had no occasion to do so. This was especially so in light of the Board's failure to have argued before PERC that any of the three exceptions applied.

1 The Court observed that the unit work rule "has its underpinnings in federal private-sector labor law," namely, Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 85 S. Ct. 398, 13 L. Ed. 2d 233 (1964). Ibid.

2 We note, however, that the Board did, in its statement of facts, assert that as far back as 2006 high school students had done work in the summer as employees of the Board, consisting of "cleaning televisions, VCRs, cart[s], cassette recorders, earphones and . . . laptops." The Board also noted that students had, in the past, done "technical work" on computers, including running cables, moving equipment, connecting various machines, and setting up computer servers.

The Board's brief to PERC also noted that neither Vala, or the Association, had ever responded to Farr's memorandum concerning the elimination of summer work for ten-month employees.

Although the Board mentioned these alleged facts in its brief before PERC, it never relied on these facts as a basis for arguing that any of the three exceptions to the unit work rule applied. Instead it relied on these facts merely to support its argument that elimination of the "subject matter of the underlying grievance was a non-negotiable and non-arbitrable management prerogative; [and the] arbitration should be restrained." Thus, the Board argued before PERC that the subject matter was inherently non-negotiable, which is a far cry from arguing, as it has before us on appeal, that the three exceptions to the unit work rule apply and that PERC acted arbitrarily by failing to consider the exceptions.