CITY OF JERSEY CITY v. JERSEY CITY POLICE SUPERIOR OFFICERS ASSOCIATION

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1765-12T2

CITY OF JERSEY CITY,

Petitioner-Appellant,

v.

JERSEY CITY POLICE SUPERIOR

OFFICERS ASSOCIATION,

JERSEY CITY POLICE OFFICERS'

BENEVOLENT ASSOCIATION,

JERSEY CITY PUBLIC EMPLOYEES,

INC., LOCAL 246,1 JERSEY CITY

INTERNATIONAL ASSOCIATION OF

FIRE FIGHTERS, LOCAL 1066,

and JERSEY CITY INTERNATIONAL

ASSOCIATION OF FIRE FIGHTERS,

LOCAL 1064,

Respondents-Respondents.

_____________________________________

July 17, 2014

Submitted May 27, 2014 Decided

Before Judges Yannotti and Ashrafi.

On appeal from the State of New Jersey Public Employment Relations Commission, Docket Nos. SN-2012-016, SN-2012-019, SN-2012-020, SN-2012-021, and SN-2012-022.

Jeremy Farrell, Corporation Counsel, attorney for appellant City of Jersey City (Terri Keller, Assistant Corporation Counsel, on the brief).

Loccke, Correia, Limsky, & Bukosky, attorneys for respondent Jersey City Police Superior Officers Association (Lauren Sandy, of counsel and on the brief).

Detzky, Hunter & DeFillippo, LLC, attorneys for respondent Jersey City Police Officers Benevolent Association (Stephen B. Hunter, of counsel and on the brief).

Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys for respondent Jersey City International Association of Fire Fighters, Local 1066 (Paul L. Kleinbaum and Genevieve Murphy-Bradacs, on the brief).

Cohen, Leder, Montalbano & Grossman, attorneys for respondent Jersey City International Association of Fire Fighters, Local 1064 (Bruce D. Leder, on the brief).

Martin R. Pachman, General Counsel, attorney for respondent the New Jersey Public Employment Relations Commission (Don Horowitz, Deputy General Counsel, on the statement in lieu of brief).

Paul W. Mackey, attorney for respondent Jersey City Public Employees, Inc., Local 246, joins in the briefs of the other respondents.

PER CURIAM

The City of Jersey City appeals from a final determination of the Public Employment Relations Commission (PERC), which determined that certain grievances regarding health benefits paid to the City's retired public employees are within the scope of collective negotiations and subject to binding arbitration. We affirm.

The Jersey City Police Superior Officers Association (PSOA); the Jersey City Police Officers Benevolent Association (POBA); the Jersey City Public Employees, Inc., Local 246; the Jersey City International Association of Fire Fighters, Local 1066, and the Jersey City International Association of Fire Fighters, Local 1064 (collectively, the unions), are parties to collective negotiation agreements (CNAs) with the City of Jersey City. The City had been providing health benefits to its workers and retirees through a so-called Traditional Plan (TP). However, in 2011, the City and the unions, other than the PSOA, negotiated to change all current workers from the TP to a Direct Action Plan (DAP). The change for PSOA members was effected as a result of an arbitration determination. In July 2011, the City informed the unions that retirees would be enrolled in the DAP effective October 1, 2011, but they could continue to receive health benefits through the TP if they paid the difference in the cost of premiums for the two plans.

Between August and October 2011, the unions filed grievances, asserting that the City violated present and past CNAs by unilaterally changing the health benefits it had been providing to retirees. The unions sought to restore the benefits as they existed before the change. When the grievances were not resolved, the unions filed requests for arbitration with PERC.2 Thereafter, the City petitioned PERC for scope-of-negotiations determinations regarding the grievances.

In February, 2012, the City filed a motion with PERC seeking to temporarily restrain the arbitrations that were scheduled for March 2012, and PERC issued an order requiring the unions to show cause why the relief sought by the city should not be granted. PERC, through its designee, issued an opinion and order dated April 20, 2012, denying the City's application.

In his opinion, PERC's designee determined the City had not established a substantial likelihood that it would prevail before PERC on its legal and factual contentions. The designee stated that PERC was likely to find that the grievances were legally arbitrable. He stated that the unions' CNAs included provisions dealing with health benefits for retirees.

The designee wrote, "The Commission has consistently permitted [the unions] to seek arbitration to enforce a contract on behalf of retired employees because they have a cognizable interest in ensuring that the terms of their CNAs, regarding the retirement benefits that were contracted for in the agreement that was in effect at the time an employee retired, are honored."

On November 19, 2011, PERC issued its decision on the City's scope-of-negotiations petition. PERC stated that, when an employer is seeking to restrain binding arbitration, its task is limited. PERC must determine whether the subject matter of the dispute is within the scope of collective negotiations. PERC found that the subject matter of the present dispute was negotiable and the grievances arbitrable. It ordered that the grievances proceed to binding arbitration.

On appeal, the City argues that PERC erred by finding that the unions' grievances concern matters that are mandatorily negotiable and subject to binding arbitration. We do not agree.

The standard of review that applies in an appeal from a scope-of-negotiations determination is "'thoroughly settled.'" City of Jersey City v. Jersey City Police Officers Benevolent Ass'n, 154 N.J. 555, 568 (1998) (quoting In re Hunterdon Cnty. Bd. of Chosen Freeholders, 116 N.J. 322, 329 (1989)). PERC's determination must be upheld unless clearly shown to be arbitrary and capricious. Ibid. (citing Hunterdon Cnty., supra, 116 N.J. at 329).

In a scope-of-negotiations determination, PERC addresses whether the subject matter of the dispute is within the scope of collective negotiations. Ridgefield Park Educ. Ass'n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978). Here, PERC determined that the unions' grievances were within the scope of negotiations and therefore subject to binding arbitration. In its decision, PERC noted that it had previously held that a grievance filed by a majority representative relating to benefits that retirees are receiving "is mandatorily negotiable and arbitrable."

It is undisputed that the City's present and past CNAs provide for the provision of health benefits at no cost for retired workers under certain circumstances. The City had been providing those benefits to the retirees through the TP but, as of October 1, 2011, began providing those benefits through the DAP, while allowing the retirees to continue to participate in the TP if they pay the additional cost of doing so. The unions claim that the current and prior CNAs preclude the City from making this change.

Through their grievances, the unions sought to enforce the terms of the CNAs that were in effect when their members retired. As PERC noted in its final decision, the unions have a strong interest in vindicating the rights of their retired members under prior and existing CNAs. We are convinced that PERC's decision is consistent with its prior decisions, is supported by the record and is not arbitrary or capricious.

The City contends, however, that PERC erroneously determined that an employer's agreement to provide health benefits to its retirees creates a vested right that cannot be changed. However, as PERC pointed out in its decision, it was not deciding the merits of this controversy. PERC noted that it was not determining whether the DAP was superior to the TP, or whether the CNAs at issue "guarantee a specific level of benefits" for retirees.

The City also contends that PERC erred by determining that it must negotiate changes to health benefits for retirees. As the record indicates, however, the unions are not seeking to compel the City to negotiate changes to health benefits on behalf of their retired members. They are seeking to enforce the terms of current and prior CNAs which they claim require the City to continue to provide retirees with health benefits at no cost through the TP, rather than the DAP.

In addition, the City argues that before submitting these disputes to arbitration, PERC should have determined whether a reasonably informed arbitrator could conclude that the retirees had vested rights in having health care benefits provided through the TP. We are convinced that this argument is without sufficient merit to warrant comment. R. 2:11-3(e)(1)(E).

Suffice it to say, however, that PERC acted within the scope of its broad authority in determining that the question of whether the City is required by current or past CNAs to continue providing health benefits to retirees through the TP at no cost is a question that should be addressed by the arbitrator.

Affirmed.

1 In its notice of appeal, the City misidentified this party as "Jersey City Public Employers, Inc., Local 246."

2 On October 25, 2011, the City filed a complaint in the Law Division seeking a declaratory judgment that the CNAs with the unions did not require the City to continue to provide retirees with health benefits through the TP at no cost. The trial court dismissed the complaint, finding that PERC had primary jurisdiction in the dispute. We affirmed the trial court's dismissal on July 25, 2013. City of Jersey City v. Jersey City Police Offices Benevolent Ass'n, No. A-3106-11 (App. Div. July 25, 2013).