IN THE MATTER OF THE COUNTY OF UNION

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6193-11T3

IN THE MATTER OF THE COUNTY

OF UNION AND THE UNION COUNTY

SHERIFF and PBA LOCAL NO. 108.

_______________________________

April 23, 2014

Argued: April 9, 2014 Decided:

Before Judges Fuentes, Fasciale and Haas.

On appeal from the Public Employment Relations Commission, Docket No. IA-2012-037.

Kathryn Van Deusen Hatfield argued the cause for appellants County of Union and the Union County Sheriff (Bauch Zucker Hatfield, LLC, attorneys; Ms. Hatfield, of counsel and on the briefs; Elizabeth Farley Murphy, on the briefs).

James M. Mets argued the cause for respondent PBA Local No. 108 (Mets Schiro & McGovern, LLP, attorneys; Mr. Mets, of counsel and on the brief; Brian J. Manetta, on the brief).

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

PER CURIAM

The County of Union and the Union County Sheriff (collectively the County) appeal from the July 19, 2012 final agency decision of the New Jersey Public Employment Relations Commission (PERC) upholding an interest arbitration award. We affirm.

PBA Local 108 (the Union) is the exclusive negotiating representative for all sheriff's officers and investigators employed by the County. On December 31, 2009, the parties' collective negotiation agreement (CNA) expired. After negotiations failed to produce a new CNA, the Union filed a petition for compulsory interest arbitration and the County filed a scope of negotiations petition. PERC appointed an arbitrator, who conducted an interest arbitration hearing on May 22, 2012. The arbitrator heard testimony from representatives of the County and the Union. The parties also submitted extensive documentary evidence for consideration.

On June 11, 2012, the arbitrator issued a thorough, 124-page decision establishing a five-year contract with a term of January 1, 2010 through December 31, 2014, with a wage freeze in 2010; a 2.25% salary increase effective January 1, 2011; a 2.5% increase for 2012 effective July 1, 2012; a 2% increase effective January 1, 2013; and a 2% increase effective January 1, 2014. The arbitrator also established new rules to be followed when a sheriff's officer is involved in a "critical incident, such as a shooting, motor vehicle accident or physical altercation."1

In explaining why she established a five-year agreement, the arbitrator stated:

There are several competing concerns to be considered in deciding the contract term. It is true that the economic future of the State and [the] County is filled with uncertainty and lack of predictability. Whether the County's budget woes will improve over the next few years or further deteriorate, is beyond speculation. While several of the recently settled contracts [the County has with other bargaining units] will expire in 2012, some other contracts expired in 2011. These successor contracts will likely have a termination date sometime beyond 2012. Therefore, while the County might prefer to have all of its law enforcement contracts expiring simultaneously, this is already not the case.

The parties have been in negotiations for this agreement for two and a half years. If I award the County's proposal [for a three-year agreement], the parties will be returning to the bargaining table almost immediately for a successor agreement. Labor negotiations are costly, time consuming and stressful to the parties' relationship. I believe that labor relations stability will be enhanced by [approving] a contract with a longer term. Therefore, I intend to award a 5-year agreement covering the period 2010 through 2014. I have kept the salary increases for the final two years low in recognition of the uncertain future in the County's budget.

The arbitrator also gave a detailed explanation for the annual increases she awarded. As required by N.J.S.A. 34:13A-16g, she addressed all of the statutory criteria, including the effect of the increases on the County's finances, as well as "the impact on the taxpayers and the County pattern among other bargaining units." To lessen the impact of the award, the arbitrator did not approve a salary increase for 2010 and delayed the salary increase for 2012 for six months. The arbitrator characterized the 2% increases for 2013 and 2014 as "modest" and explained that she granted them to "allow employees to keep pace with other sheriff's officers throughout the State and at the same time provide the County [with] the ability to control costs going forward." The arbitrator also stated:

In 2013 and 2014, my award of 2.0% across-the-board increases does not exceed the 2% levy cap or the appropriations cap, although I acknowledge that the County will have the added costs of increment payments and a slight increase in the senior officer pay. However, of course, in 2013, and again in July, 2014, the County will experience additional savings from rising employee health care contributions. Therefore, the financial impact on the budget and the taxpayers of Union County will be minimal for 2013 and 2014.

Finally, the parties were unable to agree on contract language regarding the responsibility of a sheriff's officer to immediately speak to supervisors after being involved in a critical incident. After balancing the County's concern for prompt investigations of these incidents and the Union's request to "provide[] a level of consistency and uniform application of the rules to officers[,]" especially in situations where an officer requires medical treatment, the arbitrator approved the following contract language:

When an officer is involved in a critical incident, such as a shooting, motor vehicle accident or physical altercation, said officer shall not be required to respond to any questions or supply any statement or written reports until he is released by the evaluating physician or other medical professional. Such delay shall not exceed two business days unless the officer is physically or mentally incapacitated.

The County appealed to PERC, arguing that the five-year agreement and salary increases were not supported by the record, and that the critical incident language violated public policy. On July 19, 2012, PERC issued a comprehensive twenty-eight page decision affirming the arbitrator's award.2

With regard to the issues the County raises on appeal, PERC observed that the arbitrator "considered the County's concerns regarding a five-year agreement[;] provided substantial analysis on the issue[;]" and properly rejected the County's arguments for the reasons set forth in her opinion. PERC also affirmed the arbitrator's award of salary increases in 2013 and 2014, stating:

The arbitrator's analysis of the costs of the award and its impact on the taxpayers is exhaustive. The County disagrees with the weight that she gave to the comparison with the private sector, but that does not permit us to hold she is wrong. The arbitrator considered all the statutory criteria and evidence - including the County's financial evidence. As set forth above, we do not substitute our judgment on the weight given to a factor. . . . The arbitrator found that the impact on the budget and taxpayers will be minimal for 2013 and 2014. We accept that finding.

PERC also concluded that N.J.S.A. 34:13A-16.7, which prohibits an interest arbitrator from increasing base salary items by more than two percent, did not apply in this case. As set forth in N.J.S.A. 34:13A-16.9, the two percent cap only applies to agreements subject to interest arbitration that expire on or after January 1, 2011, through April 1, 2014, and to those agreements which expire prior to April 1, 2014, but for which a final settlement has not been reached as of April 1, 2014.3 Because the CNA in this case expired on December 31, 2009, PERC determined that the cap did not apply to the arbitrator's award.

Finally, PERC found that "[t]he award of the language regarding critical incidents is not in violation of public policy." It noted that "[t]he arbitrator provided an exhaustive discussion of the statutory criteria and the weight she assigned to each factor" and appropriately "limited" the contract language "so as to not impede the County from investigating [critical] incidents." This appeal followed.

On appeal, the County challenges PERC's decision to affirm the arbitrator's decision to: (1) establish a five-year agreement; (2) award 2% salary increases in 2013 and 2014; and (3) modify the officers' reporting requirements when they are involved in critical incidents. It contends that PERC's decision was arbitrary and capricious and that the award was procured by "undue means" in violation of N.J.S.A. 2A:24-8a. We disagree.

In general, when parties are unable through labor negotiations to reach a new agreement, they are permitted to seek compulsory interest arbitration, pursuant to N.J.S.A. 34:13A-16b. Such arbitration "involves the submission of a dispute concerning the terms of a new contract to an arbitrator, who selects those terms and thus in effect writes the parties' collective agreement." N.J. State Policemen's Benevolent Ass'n v. Town of Irvington, 80 N.J. 271, 284 (1979). The arbitration is subject to a statutorily mandated procedure under N.J.S.A. 34:13A-16g, which states:

g. The arbitrator shall decide the dispute based on a reasonable determination of the issues, giving due weight to those factors listed below that are judged relevant for the resolution of the specific dispute. In the award, the arbitrator or panel of arbitrators shall indicate which of the factors are deemed relevant, satisfactorily explain why the others are not relevant, and provide an analysis of the evidence on each relevant factor; provided, however, that in every interest arbitration proceeding, the parties shall introduce evidence regarding the factor set forth in paragraph (6) of this subsection and the arbitrator shall analyze and consider the factors set forth in paragraph (6) of this subsection in any award:

(1) The interests and welfare of the public. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by P.L. 1976, c. 68 ([N.J.S.A.] 40A:4-45.1 et seq.).

(2) Comparison of the wages, salaries, hours, and conditions of employment of the employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of other employees performing the same or similar services and with other employees generally:

(a) In private employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator's consideration.

(b) In public employment in general; provided, however, each party shall have the right to submit additional evidence for the arbitrator's consideration.

(c) In public employment in the same or similar comparable jurisdictions, as determined in accordance with section 5 of P.L. 1995, c. 425 ([N.J.S.A.] 34:13A-16.2); provided, however, that each party shall have the right to submit additional evidence concerning the comparability of jurisdictions for the arbitrator's consideration.

(3) The overall compensation presently received by the employees, inclusive of direct wages, salary, vacations, holidays, excused leaves, insurance and pensions, medical and hospitalization benefits, and all other economic benefits received.

(4) Stipulations of the parties.

(5) The lawful authority of the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by P.L. 1976, c. 68 ([N.J.S.A.] 40A:4-45.1 et seq.).

(6) The financial impact on the governing unit, its residents, the limitations imposed upon the local unit's property tax levy pursuant to section 10 of P.L. 2007, c. 62 ([N.J.S.A.] 40A:4-45.45), and taxpayers. When considering this factor in a dispute in which the public employer is a county or a municipality, the arbitrator or panel of arbitrators shall take into account, to the extent that evidence is introduced, how the award will affect the municipal or county purposes element, as the case may be, of the local property tax; a comparison of the percentage of the municipal purposes element or, in the case of a county, the county purposes element, required to fund the employees' contract in the preceding local budget year with that required under the award for the current local budget year; the impact of the award for each income sector of the property taxpayers of the local unit; the impact of the award on the ability of the governing body to (a) maintain existing local programs and services, (b) expand existing local programs and services for which public moneys have been designated by the governing body in a proposed local budget, or (c) initiate any new programs and services for which public moneys have been designated by the governing body in a proposed local budget.

(7) The cost of living.

(8) The continuity and stability of employment including seniority rights and such other factors not confined to the foregoing which are ordinarily or traditionally considered in the determination of wages, hours, and conditions of employment through collective negotiations and collective bargaining between the parties in the public service and in private employment.

(9) Statutory restrictions imposed on the employer. Among the items the arbitrator or panel of arbitrators shall assess when considering this factor are the limitations imposed upon the employer by section 10 of P.L. 2007, c. 62 ([N.J.S.A.] 40A:4-45.45).

[(Emphasis added).]

An arbitrator must give "due weight" to the nine statutory factors of subsection 16g. Irvington, supra, 80 N.J. at 287. "The arbitrator need not rely on all factors, but must identify and weigh the relevant factors and explain why the remaining factors are irrelevant." In re City of Camden, 429 N.J. Super. 309, 326 (App. Div.), certif. denied, 215 N.J. 485 (2013). The resulting explanation satisfies the requirement that the decision be based on the relevant statutory factors and that the arbitrator gave due weight to each factor. Ibid.; see also N.J.S.A. 34:13A-16f(5) (indicating that "[e]ach arbitrator's decision shall be accompanied by a written report explaining how each of the statutory criteria played into the arbitrator's determination of the final award").

"Our scope of review of PERC decisions reviewing arbitration is sensitive, circumspect[,] and circumscribed. PERC's decision will stand unless clearly arbitrary or capricious." Twp. of Teaneck v. Teaneck Firemen's Mut. Benevolent Ass'n Local No. 42, 353 N.J. Super. 289, 300 (App. Div. 2002) (citation omitted), aff'd o.b., 177 N.J. 560 (2003). "Absent violation of standards of conduct, PERC's appellate role is to determine whether the arbitrator considered the criteria in N.J.S.A. 34:13A-16(g) . . . and rendered a reasonable determination of the issue or issues at impasse that was supported by substantial evidence in the record." Id. at 306.

Pursuant to N.J.S.A. 2A:24-8a, a court may vacate an arbitration award if it "was procured by corruption, fraud or undue means." This statute's reference to "undue means" has been construed to include "an arbitrator's failure to follow the substantive law." In re City of Camden, supra, 429 N.J. Super. at 332. However, if we find that the arbitrator did not exceed his or her authority, considered and analyzed each statutory criterion, and made findings supported by the credible evidence in the record, we must affirm. Borough of East Rutherford v. East Rutherford PBA Local 275, 213 N.J. 190, 201-02 (2013).

Our review of the arbitrator's decision in light of these principles demonstrates that she considered each statutory factor, provided a detailed and thoughtful analysis of each relevant factor, and explained which factors she weighed more heavily than others. The arbitrator did not exceed her statutory authority in: setting a five-year duration for the agreement; approving modest salary increases for 2013 and 2014; or modifying the contract language concerning officers' involvement in critical incidents. The record fully supports each of the arbitrator's findings.

In addition, we are satisfied that PERC applied the correct standard of review, abided by the appropriate legal standards, and properly determined that the arbitrator fairly considered the N.J.S.A. 34:13A-16g factors. PERC also rendered a reasonable determination of the issues that was supported by substantial evidence in the record, and its decision is not arbitrary or capricious. We therefore affirm substantially for the reasons set forth in PERC's July 19, 2012 decision adopting the arbitrator's award.

Affirmed.

1 The arbitrator also awarded a new salary guide, modified health benefits, and entered other changes to the employees' rights. However, the County has not challenged these awards on appeal.

2 PERC also dismissed the County's scope of negotiations petition. The County does not challenge this ruling on appeal.

3 The cap expired on April 1, 2014. N.J.S.A. 34:13A-16.9.