SOMERSET COUNTY PARK COMMISSION v. TEAMSTERS LOCAL UNION NO. 469

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3455-11T2

SOMERSET COUNTY PARK COMMISSION,

Plaintiff-Appellant,

v.

TEAMSTERS LOCAL UNION NO. 469,

an Affiliate of the International

Brotherhood of Teamsters,

Foreman and Assistant Foreman,

Blue Collar Workers and Park

Rangers,

Defendants-Respondents.

____________________________________

March 14, 2013

Submitted February 4, 2013 - Decided

Before Judges Parrillo and Sabatino.

On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-12078-11.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, P.C., attorneys for appellant (Lisa M. Fittipaldi, on the brief).

Timothy R. Hott, attorney for respondent.

PER CURIAM

Plaintiff, Somerset County Park Commission ("the Park Commission"), appeals a February 6, 2012 order of the Chancery Division referring this labor dispute with defendant, Teamsters Local Union No. 469 ("the Union"), to arbitration. We affirm.

I.

Because the issues before us are essentially jurisdictional, we need not detail the facts and procedural history at length. The limited record indicates the following.

The Park Commission and the Union entered into three related Collective Negotiation Agreements ("CNA")1 in March 2011. The effective date of the CNA was deemed to be January 1, 2009. It is undisputed that the CNA was in effect at the times relevant to this dispute.

In May 2011, and again in September 2011, the Union requested the New Jersey Public Employment Relations Commission ("PERC")2 to convene a panel of arbitrators to decide grievances stemming from the Park Commission's discharge of two non-probationary employees represented by the Union. In both instances, the Union contended that the Park Commission did not have just cause to discharge the employees.

After the grievances were filed with PERC, the Park Commission filed an order to show cause with the Chancery Division, seeking declaratory relief. Specifically, the Park Commission argued that the CNA does not call for arbitration in situations of employee discipline or termination, and therefore "the arbitrator does not have jurisdiction over the matter because the grievance regarding termination is not within the scope of the arbitration clause."3

The Union likewise sought declaratory relief from the court. In particular, it cross-moved for an order compelling the Park Commission to arbitrate grievances related to the termination of the two employees in question. The Union asserted that "[b]y virtue of the terms and conditions of the C[N]A," it had the contractual right to submit the matters in dispute to final and binding arbitration, in accordance with the procedures of PERC. The Union further contended that the Park Commission's refusal to arbitrate these two disputes violated the CNA.

After hearing oral argument, the Chancery judge issued a bench opinion denying the Park Commission's motion and granting the Union's cross-motion. In particular, the judge concluded that the terms of the CNA and the governing law required the question of the arbitrability of these two grievances to be addressed, in the first instance, by the arbitrator rather than by the court.

The Park Commission now appeals, contending that the judge erred in referring these grievances to the arbitrator. Specifically, the Park Commission asserts that the judge applied an incorrect standard in making her jurisdictional determination. The Park Commission argues that, applying the correct standard, the court should have determined that the CNA does not authorize grievances of discharged non-probationary employees to be referred to arbitration. The Union, on the other hand, maintains that the judge's decision was correct, and that the grievances are indeed arbitrable.

II.

The Legislature and the Judiciary in our state both "have favored arbitration as a means of resolving disputes." SeeMartindale v. Sandvik, Inc., 173 N.J.76, 84 (2002) (citing N.J.S.A.2A:24-1 to -11); see alsoGarfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 168 N.J.124, 131 (2001). Especiallygermane to the present appeal is the principle that "'arbitration is a favored means of resolving labor disputes.'" Mount Holly Tp. Bd. of Educ. v. Mount Holly Tp. Educ. Ass'n, 199 N.J.319, 333 (2009) (emphasis added) (quoting Pascack Valley Reg'l High School Bd. of Educ. v. Pascack Valley Reg'l Support Staff Ass'n, 192 N.J., 489, 496 (2007)).

In many instances, as here, a threshold question presented is whether the parties have consented to an arbitral forum. "As a matter of both federal and state law, 'arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'" Angrisani v. Fin. Tech. Ventures, L.P., 402 N.J. Super.138, 148-49 (App. Div. 2008) (quoting AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S. Ct. 1415, 1418, 89 L. Ed. 2d 648, 655 (1986)).

Our Supreme Court has "recognized as settled law 'that parties to an agreement may waive statutory remedies in favor of arbitration.'" Leodori v. CIGNA Corp., 175 N.J. 293, 300 (quoting Garfinkel, supra, 168 N.J. at 131), cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157 L. Ed. 2d 250 (2003). Before enforcing such a claimed waiver, "'the Court requires some concrete manifestation of [a party's] intent as reflected in the text of the agreement itself.'" Ibid. (quoting Garfinkel, supra, 168 N.J. at 135).

Here, the relevant agreement for determining the parties' intent is the CNA between the Union and the Park Commission. In construing that CNA, we must apply a statutory presumption in favor of arbitration. Specifically, N.J.S.A. 34:13A-5.3 declares that "[i]n interpreting the meaning and extent of a provision of a collective negotiation agreement providing for grievance arbitration, a court or agency shall be bound by a presumption in favor of arbitration." (Emphasis added.) The statute adds that "[d]oubts as to the scope of an arbitration clause shall be resolved in favor of requiring arbitration." Ibid. (emphasis added).

The seminal case on the arbitrability of labor contracts is Standard Motor Freight, Inc. v. International Brotherhood of Teamsters, 49 N.J. 83 (1967). In Standard Motor Freight, the Court addressed the question of which forum had jurisdiction over a complaint arising from the termination of a union employee. Id. at 85. If the termination "concerned 'a matter of discharge,'" the dispute would be required to go to a tribunal; if the complaint did not concern a matter of discharge, the issue would need to be arbitrated. Id. at 85-86. With respect to questions of what is known as "procedural" arbitrability, i.e., whether procedural conditions to arbitration have been met, the Court in Standard Motor Freight held "very definitely that such [questions] should be left to the arbitrator." Id. at 97. By comparison, issues of "substantive" arbitrability are to be decided by the court. Id. at 96. Such substantive matters relate to "whether the particular grievance is within the scope of the arbitration clause . . . 'whether the party seeking arbitration is making a claim which on its face is governed by the contract.'" Ibid. (emphasis added) (quoting Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 567, 80 S. Ct. 1343, 1346, 4 L. Ed. 2d 1403, 1407 (1960)). In 2008, the Supreme Court revisited the role of courts in such matters in Amalgamated Transit Union, Local 880 v. New Jersey Transit Bus Operators, Inc. 200 N.J. 105 (2009). In that case, the plaintiff union had filed a grievance against the defendant employer on behalf of a former employee. Upon examining the collective bargaining agreement ("CBA") and the employment agreement, the arbitrators determined that the termination was not governed by the CBA, and that their jurisdiction was limited to the "interpretation, application, or operation of the [CBA's] provisions[.]" Id. at 111. The union filed an order to show cause to vacate the dismissal of the grievance, on the grounds that the arbitrators had exceeded their authority by determining that the termination was not arbitrable. Id. at 112.

The trial court affirmed the arbitrators' decision in Amalgamated. Ibid. We overturned the judge's decision, finding that the arbitrators improperly had made a determination of substantive arbitrability, which is instead a matter for the courts to decide. Id.at 112-13. The Supreme Court, however, reversed our decision, concluding that "the CBA's arbitration provision granted to the arbitratorsthe authority to decide this question about their own jurisdiction." Id.at 117-18 (emphasis added).

In the present case, the CNA contains several provisions that arguably bear upon whether the two employee grievances in question are, in fact, arbitrable.

Article 4, titled "PROBATION PERIOD," states that an employee who is "terminate[d]" during his or her 120-day probationary period "shall not have recourse through the Grievance and Arbitration procedures of this agreement." This language, as argued by the Union and construed by the trial court, creates a negative implication. The negative implication is that, because probationaryemployees are notentitled to the grievance and arbitration procedures of the agreement, non-probationaryemployees, by contrast, areentitled to grieve their termination under the CNA.

Article 11, titled "GRIEVANCE PROCEDURE," contains two pertinent provisions. Provision 11.1 states that "[t]he term 'grievance' means a complaint by the union or an Employee(s) that there has been an inequitable, improper or unjustapplication, interpretationor violation of this Agreement." (Emphasis added). Moreover, Provision 11.9 states that "[t]he arbitrator shall be limited to violations of the Agreement and shall not have the authority to amend or modify this Agreement or to establish new terms or conditions under this Agreement." The Park Commission contends that this provision confines whatcan be arbitrated to the four corners of the agreement, which, according to the Park Commission, "on its face" does not extend to issues of discipline and termination.

Article 16, denominated "MANAGEMENT RIGHTS," states that "[t]he Employer shall retain all rights of management as provided by law or pertaining to its operation, except as such rights are limited or modified by the provisions of this Agreement." The Park Commission points to this provision as evidence that it retained its prerogative to discipline and terminate employees.

Article 31, titled "MAINTENANCE OF STANDARDS," states that "[t]he parties agree that the [CNA] between the parties contains the entire agreementwith respect to terms and conditions of employment." (Emphasis added). The Union argues that this provision signals that the CNA must cover issues of employee discharge, because discharge is a "term" of employment. Conversely, the Park Commission argues that this provision actually restricts which terms and conditions can be grieved to those that are discussed in the CNA.

Additionally, Article 34, labeled "LOSS OF SENIORITY," states, in pertinent part, that "[a]n employee shall lose seniority rights only for any one of the following reasons[.]" Those reasons include Provision 34.1.2, which identifies [d]ischarge for just cause." (Emphasis added). The Union argues that this provision furnishes evidence that just cause is needed to terminate a permanent employee. The Park Commission, on the other hand, maintains that this clause is meant to distinguish between instances when an employee is temporarily laid off because of financial constraints, not because of cause, and then is later recalled.

Upon examining these assorted contract provisions on their face, the judge initially observed that "[t]his is an unusual agreement." The court noted that it found the most relevant provisions of the agreement to be Articles 11.1, 16.1, 31, and 34.1.2. It was also relevant to the court that the contract does not contain a "truly recognizable just cause provision[]." However, the court found significant that the CNA also did not contain an exclusion clause, one which clearly and explicitly excluded termination and discipline claims from the CNA.

In sum, the trial court reasoned that:

[I]n the end I am left with Amalgamated. . . [in which] the [C]ourt held that a provision of a collective bargaining agreement that allows arbitration of a complaint by the union or an employee that there's been an inequitable, improper or unjust application, interpretation, or violation of this agreement . . . the court held that such a provision of a [CNA] should be broadly construed and that a court should not interpret the disputed substantive provisions of the parties' labor agreement, but only determine whether the parties have agreed that an arbitrator shall decidewhich of the competing interpretations is correct[.]

Under this approach, I am, I believe, [confined] to conclude that the significance of the negative implication of 4.1 and the question of whether the mention of a discharge for just cause under 34:1.2presents an issue of contract interpretation that's within the purview of the arbitrator to decide.

[Emphasis added.]

The following terms of an order implemented the court's decision:

[It is] ORDERED that the Park Commission's Complaint is dismissed as the court finds that the determination or arbitrability is proceduraland is therefore, to be determined by an arbitrator; and it is further

ORDERED the court makes no finding as to the arbitrability of the employment termination; and it is further

ORDERED that [the Union's] counterclaim is granted for the reasons set forth on the record; and it is further

ORDERED that the parties are compelled to go to arbitration to present the issue of arbitrability of the termination of employment to the arbitrator.

[Emphasis added.]4

We review de novo the trial court's legal determination to refer the two grievances of the discharged employees to an arbitrator. See In re Paterno, ___ N.J. Super. ___, ___ (App. Div. 2013) (slip op. at 7) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). Having done so, we affirm the court's decision, substantially for the reasons set forth in Judge Allison Accurso's oral opinion of January 13, 2012. We add only a few comments.

A review of the terms of the CNA readily shows that the agreement does not explicitly and plainly specify whether the discharge of a non-probationary employee can be the subject of an arbitrable grievance. Both the Union and the Park Commission have offered plausible readings of the CNA in support of their competing positions. Given that ambiguity, the trial judge properly deferred the interpretation of the CNA to a PERC arbitrator.

The trial court's analysis also correctly followed the Supreme Court's direction from Amalgamated, supra. Once the court determined that (1) the issue required an interpretation of the CNA to resolve, and (2) that the grievance procedures in CNA conferred upon the arbitrator authority to interpret the CNA, the court properly avoided going "astray," and instead followed the AmalgamatedCourt and deferred to the fact that "'the parties have agreed that an arbitrator shall decide which of the competing interpretations is correct.'" 200 N.J.at 119 (quoting Kaleva--Norman--Dickson, School Dist. v. Kalem--Norman--Dickson School Teachers' Assoc., 393 Mich.583, 595 (1975)).

The fact that the trial court's implementing order expressly states "the court makes no finding as to the arbitrability of the employment termination" does not contradict the Union's contention that the court correctly made a determination that the claims were substantively arbitrable. As explained in Amalgamated, the determination that an issue was substantively arbitrable was only a decision to allow the arbitration panel to make its owndetermination as to whether the CNA conferred jurisdiction over grievances arising from terminations. It was not an affirmative or definitive ruling that the two grievances are, in fact, arbitrable.

In Amalgamated, the Court noted that:

[If the] labeling of the issue as one of substantive arbitrability was correct, the judicial remedy could not have provided anything more than that which [the union] already had received from the arbitral panel below, namely, review by the arbitrators on this "dispute or grievance arising out of the interpretation, application or operation of the provisions of the CBA[.]"

[200 N.J. at 117-18.]

The Court affirmed the arbitration panel's dismissal of the grievance for lack of jurisdiction because "the CBA's arbitration provision granted to the arbitrators the authority to decide th[e] question about their own jurisdiction." Id. at 118.

The trial court's order in this case essentially allows the arbitration panel to make that same determination with respect to the extent of the panel's jurisdiction. That this was the intent of the trial court is evidenced by the final clause of the order, which states that it is "ORDERED that the parties are compelled to go to arbitration to present the issue of arbitrabilityof the termination of employment to the arbitrator." [Emphasis added.]

In sustaining the trial court's justified choice to refer this matter to arbitration, we need not become entangled in labeling the context here one of "substantive" or "procedural" arbitrability. Regardless of the label used in the final order, the clear import of the judge's analysis is that she detected a sufficient ambiguity in the CNA to warrant a reference to arbitration. If, in resolving that ambiguity, the arbitrator makes a clear mistake of law, the courts are available for redress. N.J.S.A.2A:24-8(a); see alsoN.J. Highway Auth. v. Int'l Fed'n of Prof'l and Tech'l Eng'rs Local 193, 274 N.J. Super.599, 609 (App. Div.) (noting that "undue means" under N.J.S.A.2A:24-8(a) encompasses a "mistake of . . . law"), certif. denied, 193 N.J.288 (1994).

Bearing in mind New Jersey's strong public policy and decisional law favoring arbitration and counseling judges to read CNAs liberally toward that end, the trial court's reference of these grievances to a PERC arbitrator was sound.

Affirmed.

1 Because the provisions within the three CNAs are essentially the same, we hereafter shall refer to the "CNA" in the singular.

2 PERC has not participated in this appeal.

3 The Park Commission's complaint noted that the arbitrator had stated that he will "determine arbitrability at the start of the hearing."

4 The form of order may have been drafted by the Park Commission because the Park Commission's counsel appears on the letterhead of the order.