Opinion
DOCKET NO. A-2471-12T3 DOCKET NO. A-4643-12T3
03-11-2015
IN THE MATTER OF CITY OF CAMDEN and CAMDEN ORGANIZATION OF POLICE SUPERIORS.
Brown & Connery, LLP, attorneys for appellant (A-2471-12)/respondent (A-4643-12) City of Camden (Michael J. DiPiero and Michael J. Watson, on the briefs). Alterman & Associates, attorneys for respondent (A-2471-12)/appellant (A-4643-12) Camden Organization of Police Superiors (Jessica L. Arndt and Kurt D. Raatzs, on the briefs). Martin R. Pachman, General Counsel, attorneys for respondent (both A-2471-12 and A-4643-12) New Jersey Public Employment Relations Commission (Don Horowitz, Deputy General Counsel, on the briefs).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Nugent, Accurso and Manahan. On appeal from the Public Employee Relations Commission, Docket No. IA-2013-007. Brown & Connery, LLP, attorneys for appellant (A-2471-12)/respondent (A-4643-12) City of Camden (Michael J. DiPiero and Michael J. Watson, on the briefs). Alterman & Associates, attorneys for respondent (A-2471-12)/appellant (A-4643-12) Camden Organization of Police Superiors (Jessica L. Arndt and Kurt D. Raatzs, on the briefs). Martin R. Pachman, General Counsel, attorneys for respondent (both A-2471-12 and A-4643-12) New Jersey Public Employment Relations Commission (Don Horowitz, Deputy General Counsel, on the briefs). PER CURIAM
In these consolidated appeals, the City of Camden (the City) appeals from the Public Employee Relations Commission (PERC) decision of January 25, 2013, vacating and remanding an arbitration award in its favor. The Camden Organization of Police Superiors (COPS) appeals the PERC decision of May 13, 2013, affirming the arbitration award in favor of the City after remand. After consideration of the record in light of the applicable law and the procedural history, we affirm the May 13 decision of PERC, and dismiss the City's appeal of the January 2013 decision as interlocutory and made moot by the subsequent decision in its favor.
When the collective bargaining agreement between the City and COPS expired on December 31, 2008, the parties engaged in negotiations. After nearly three years of negotiations, the parties failed to reach an agreement. On October 15, 2012, COPS filed a petition to initiate compulsory interest arbitration pursuant to the Police and Fire Public Interest Arbitration Reform Act (the Compulsory Interest Arbitration Act), N.J.S.A. 34:13A-14 to -21. The City filed an answer to the petition and an arbitrator was designated. After two pre-hearing sessions, the hearing took place. Following submission of closing briefs, the arbitration award was filed. The award provided for a contract with a term of January 1, 2009 to December 31, 2014. The arbitrator found in favor of the City on almost every matter at issue, including the freezing of wages and a payout limit for accumulated vacation and holiday pay for retirees.
The award, as it related to economic issues, was substantially influenced by the arbitrator's view of the "depth of the fiscal crisis" faced by the City. The arbitrator noted:
In a reported decision we recited the Legislature's response to the "fiscal distress" of the City and other similarly situated municipalities. See In re City of Camden, 429 N.J. Super. 309, 316-18 (App. Div. 2013).
It has become very clear that the positions taken by the Union are categorically inconsistent with those of the City. Of prominent clarity is the virtually absolute refusal of the Union to recognize the depth of the fiscal crisis. In spite of years of working without a new contract the approach of the Union here has been to largely ignore the depth of that issue. Instead, the Union, seemingly guided by the achievements of others in negotiations with the City, has replicated all of the key issues which have been heard by other arbitrators and which have resulted, in some situations, to reasonably generous awards. The fact that the City has ignored those applying to its employees, which have been appealed on the basis of having no funds, seems to have been no factor.
. . . .
I place a great deal of emphasis on the interests of the citizens. The City is virtually in abject poverty and heavily dependent upon the Federal government and the State for financial support. That support has been the source of more than 80% of the City's budgets for several years. During recent times the actual dollar value of support has shrunk or in some instances been provided with conditions attached which require the City to eventually pay greater proportions of the required revenues. Those
support programs have begun to show a long range shrinkage and in some cases a complete discontinuance of funding.
On December 27, 2012, COPS filed an appeal of the award to PERC seeking that the award be vacated. COPS argued the arbitrator failed to properly apply the statutory factors set forth in N.J.S.A. 34:13A-16(g), and the award was not based on substantial credible evidence. The City argued the award was in conformance with each of the statutory factors and was based on substantial credible evidence.
PERC issued its decision on January 25, 2013. The decision vacated the award and remanded the matter to the arbitrator for a new award within forty-five days. Upon remand PERC sought "clarification" from the arbitrator:
The arbitrator refers throughout his award to the fiscal crisis in which the City finds itself, and points to recent arbitration awards involving other negotiating units which were unpaid due to lack of funds. Indeed, the prevalent theme throughout the award is the arbitrator's belief that the City did not have available funding to provide any increased costs that he might award. In its brief on appeal, COPS vehemently argues that all awards from previous arbitrators were in fact paid in full. During the hearings, the City denied that one of the awards had been paid, and asserted that the other was paid in part due to unexpected grants received by the City. Since the arbitrator's findings regarding the City's fiscal crisis in part relied upon its inability to fund these previous awards, clarification is needed regarding the
payment status of these awards. On remand, the arbitrator should seek to verify if in fact these awards were paid, and the source of the funds utilized to make any payments that have occurred. The arbitrator should also explain whether and how any new information or clarification coming to him during the remand affects his ultimate conclusion regarding the existence of the City's fiscal crisis and his ultimate award.
PERC further directed the arbitrator provide clarification or explanation whether the application of the $15,000 limit for payment of accumulated vacation and holiday credits at retirement is prospective or retroactive. Additionally, the arbitrator was instructed to identify and explain the 2006 freezes referenced in the award, elaborating on the interplay, if any, between the limit and the freezes. PERC also directed the arbitrator to clarify his finding that "the appointment of officers to alternate positions was ruled upon above," as well as address the COPS assertions that the decision was not in consideration of evidence relative to the City's agreement to provide other employees with wage increases and that the arbitrator failed to address its severance proposals.
PERC ordered the new award must be within "[forty-five] days of this decision" and "[a]ny additional appeal by the parties must be filed within seven calendar days of service of the new award."
The City filed an appeal seeking to reverse the Commission's vacation and remand of the December 2012 arbitration award. During the pendency of the appeal, and after the remand by PERC, the arbitrator issued a decision which affirmed the findings of the December 2012 award and clarified the issues raised by the Commission.
COPS filed an appeal of the arbitrator's decision to PERC seeking to overturn the award and have the matter transferred to a new arbitrator. PERC affirmed the award.
In affirmation of the award and in deference to the arbitrator's "judgment, discretion and labor relations expertise[,]" PERC held:
[T]he arbitrator properly applied each of the statutory factors and explained the weight he afforded to each of the factors. The arbitrator found the interests and welfare of the public to be the paramount factor that was given the most consideration, and reaffirmed this position in his supplemental award. He noted that the City is in abject poverty and heavily dependent on Federal and State government for financial support, and that such support has been more than 80% of the City's budget for several years. He also found that the support programs have begun to show long range shrinkage and in some cases a complete discontinuance of funding. He found that some of the State funding for hiring hew police officers is conditioned upon permanent offers of employment to those officers. He also noted the City's high level of unemployment, as evidenced by the
fact that property taxes represent only about 17% of the City's income.
With regard to comparison of wages, he found that other police are the only relevant comparisons. He found that these superior officers are well paid in comparison with other police officers within a reasonable area where data had been provided. Regarding the overall compensation presently received he found that given the City's dire financial condition, there was no evidence of availability of funds to award any increases, and that the primary focus if funds did become available should be to hire new officers. He also found that his awarding no increases under the contract was important when considering the continuity and stability of employment, so as not to endanger the loss of State or federal funding that is conditioned upon the City making permanently hired officers. Given the City's dire financial condition, he did not place great weight on the cost of living factor since he found that the City could not absorb the impact of any increases to be paid under the Award. He found that given that he awarded the City's proposal of freezing the salary schedule, the lawful authority of the employer, the financial impact on the governing unit and the residents, and the statutory restrictions imposed on the City was given no weight.
As to the "supplemental award," PERC found:
[T]he arbitrator expanded on the issues that we identified as needing clarification in our January 25, 2013 decision. He found that the COPS' assertion the City had paid in full recent arbitration awards was without merit and that any payments were made after he issued his original award and therefore are outside of the record presented to him. He confirmed the $15,000 limitation for the accrual of accumulated
vacation and holiday time for retirees. In response to COPS assertion that he failed to consider evidence that the City has recently voluntarily agreed to provide other employees with wage increases that were on par with those requested by COPS, he found that this information was not presented to him during the initial arbitration hearing. Additionally, he stated that white and blue collar employees are not an appropriate comparison for police superiors who enjoy more generous wages and benefits. We also asked him to clarify his findings on COPS proposal that all supervisory officers be appointed based on established Civil Service. He found that such proposal was within the purview of the Civil Service Commission and that COPS had presented no evidence that the City had violated any Civil Service standards or promotional examinations. Given the expanded analysis provided by the arbitrator on the remanded issues, we now affirm the award.
COPS filed an appeal of PERC's decision. The City filed a motion to consolidate the appeals which we granted.
I.
We commence our analysis by addressing the appeal filed by the City. PERC is a state administrative agency. An aggrieved party may appeal to this court as a matter of right from a final decision by PERC. R. 2:2-3(a)(2). Where a decision by PERC is not final, the aggrieved party must seek leave to appeal. R. 2:2-4.
The rule of finality applicable to judgments of the court is also applicable to the decision of an administrative agency. See In re Donohue, 329 N.J. Super. 488, 494-95 (App. Div. 2000). An agency action is not final "until all avenues of internal administrative review have been exhausted." Bouie v. N.J. Dep't. of Cmty. Affairs, 407 N.J. Super. 518, 527 (App. Div. 2009) (citation omitted). In its Case Information Statement, PERC noted the decision to vacate and remand the award "was not a final administrative decision as it does not resolve all issues as to all parties." We agree.
By the terms of the order vacating and remanding the matter, PERC implicitly, if not explicitly, retained jurisdiction. Significant to our determination of finality, the January 25 decision neither addressed nor made findings on the substantive claims of COPS relating to vacation of the award based on claimed statutory and evidential deficiencies. Further, PERC retained control of the proceedings by directing both the timeframe for the issuance of the new award and any appeal therefrom. We therefore conclude the order under appeal was not final, as the administrative process was not exhausted. As such, the City was required to seek leave to appeal the decision which it failed to do. R. 2:2-3(a). The consequence thereof is dismissal of the appeal. Vitanza v. James, 397 N.J. Super. 516, 519 (App. Div. 2008).
In reaching our determination, we acknowledge that the doctrine of exhaustion of administrative remedies is one of judicial "convenience." Abbott v. Burke, 100 N.J. 269, 297 (1985). However, under the circumstances presented herein, we are not convinced that the "interests of justice dictate the extraordinary course of by-passing the administrative remedies made available by the Legislature." Roadway Express, Inc. v. Kingsley, 37 N.J. 136, 141 (1962); see also Nolan v. Fitzpatrick, 9 N.J. 477, 486-87 (1952).
Even if the City's appeal was not procedurally defective, given the favorable determination of PERC to its position after remand, the City would have no justiciable basis upon which it could obtain relief. As we have held, "courts should not decide cases where a judgment cannot grant relief" nor render decisions that "can have no practical effect." City of Plainfield v. N.J. Dep't of Health & Senior Servs., 412 N.J. Super. 466, 483-84 (App. Div.) (citations and internal quotation marks omitted), certif. denied., 203 N.J. 93 (2010).
II.
We next address the appeal of PERC's decision to affirm the award after remand. COPS contends that PERC's decision to affirm the arbitration award was arbitrary and capricious and was not supported by sufficient evidence in the record and violated the applicable statutory provisions. We disagree.
Pursuant to the Compulsory Interest Arbitration Act, the arbitrator is required to "decide the dispute based on a reasonable determination of the issues, giving due weight to [enumerated statutory factors] that are judged relevant for the resolution of the specific dispute." N.J.S.A. 34:13A-16(g).
The factors are:
(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 (C.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 (C.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 (C.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 (C.40A:4-45.45), and taxpayers . . . .
(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 (C.40A:4-45.45).
[N.J.S.A. 34:13A-16(g).]
The arbitrator must give "due weight" to these statutory criteria. N.J. State Policeman's Benevolent Ass'n, Local 29 v. Town of Irvington, 80 N.J. 271, 287 (1979) [hereinafter Irvington]. The arbitrator must "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[.]" N.J.S.A. 34:13A-16(g).
"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, supra note 2, 429 N.J. Super. at 326. However, the resulting explanation must satisfy 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-16(f)(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"). Moreover, N.J.A.C. 19:16-5.9b provides 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. The opinion and award shall be
signed and based on a reasonable determination of the issues, giving due weight to those factors listed in N.J.S.A. 34:13A-16(g) which are judged relevant for the resolution of the specific dispute. In the award, the arbitrator 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. The opinion and award shall set forth the reasons for the result reached.
"No one factor is dispositive," but the factors "reflect the significance of fiscal considerations." In re City of Camden, supra, 429 N.J. Super. at 326-27. Three of the statutory factors, the "interests and welfare of the public"; the "lawful authority of the employer"; and the "financial impact [of an award] on the governing unit, its residents and taxpayers, were so phrased as to insure that budgetary constraints were giv[en] due weight prior to the rendition of an award." Irvington, supra, 80 N.J. at 291 (alteration in original) (citations and internal quotation marks omitted).
When an arbitrator's award fails to adequately address the criteria set forth in N.J.S.A. 34:13A-16(g), the award should be vacated and the matter remanded to ensure compliance with the statutory requirement. See Hillsdale PBA Local 207 v. Borough of Hillsdale, 137 N.J. 71, 82 (1994) (arbitrator's award failed to identify the relevant statutory factors, analyze the evidence pertaining to those factors, and explain why other factors were irrelevant); In re City of Camden, supra, 429 N.J. Super. at 335 (arbitrator did not provide an adequate explanation of the statutory criteria or how they factored into the determination of the award).
Pursuant to N.J.S.A. 2A:24-8(a), 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. See Borough of E. Rutherford v. E. Rutherford PBA Local 275, 213 N.J. 190, 201-02 (2013).
Our review of the arbitrator's decisions in light of these principles demonstrates that he considered each statutory factor, provided a detailed and thoughtful analysis of each relevant factor, and explained which factors he weighed more heavily than others. In sum, the arbitrator acted within his statutory authority.
In the December 17, 2012 award, the arbitrator properly addressed the proposals of the parties and the inter-relation of the proposals when applied to the statutory factors. The arbitrator explained why his analysis of the factors justified the award. Although the arbitrator gave substantial weight to one factor, relative to the fiscal impact upon a financially distressed municipality, that does not render the analysis erroneous. After the remand, the arbitrator properly addressed the issues raised by PERC requiring clarification in his May 5 decision. That the award was not modified after remand does not alter our finding of the legal adequacy of the arbitral process.
With respect to our scope of review of the PERC decision affirming the award, it 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.
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-16(g) factors. PERC also rendered a reasonable determination of the issues that was supported by substantial evidence in the record, and its decision was not arbitrary or capricious. We therefore affirm substantially for the reasons set forth in PERC's decision adopting the arbitrator's award.
The remaining arguments raised are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(E)
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION