Case Title: Dr. Leo Troy, et als. v. Rutgers, the State University

Citation: 

Docket Number: a-17-00

State: new-jersey

Court: New Jersey Supreme Court

Date: 2001-06-20T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). ZAZZALI, J., writing for a unanimous Court. This appeal, which involves an employment dispute, requires the Court to decide whether plaintiffs, seven tenured Rutgers University-Newark faculty members, presented sufficient evidence to establish the existence of individual agreements with the University and, if so, whether those individual agreements were superseded by a collective agreement. Plaintiffs, seven tenured members of the Rutgers University-Newark Faculty of Arts and Sciences, allege that the University unilaterally changed their employment status from calendar-year (CY) appointments to academic-year (AY) appointments in breach of their individual agreements. The alleged individual agreements are independent of the collective negotiations agreement negotiated between the University and the American Association of University Professors (AAUP) that governs the terms and conditions of employment of University faculty members. Under the collective agreement, a CY appointment means that the faculty member is expected to devote the entire year to his or her University duties with the exception of a one-month vacation. Under the salary schedules negotiated by the AAUP, CY appointees receive more favorable pay. In contrast, an AY appointment requires the faculty member to be in attendance from September 1 to the date of commencement. In March 1992, David Hosford, Dean of Rutgers-Newark's Faculty of Arts and Sciences, informed plaintiffs that unless they maintained sufficient duties to satisfy CY criteria (i.e., duties that occupied eleven months of the year), their appointments would be changed to AY status effective July 1992. Plaintiffs objected, arguing that their CY appointments were made without conditions attached, such that they had no obligations to perform specific duties beyond the academic year. In support of their argument, plaintiffs offered evidence suggesting that University officials had intended to grandfather the appointment of CY appointees during the Union negotiations in the early 1970s; evidence indicating that the University had been unsuccessful in its past attempts to alter the CY appointments of other University faculty members, presumably because of the agreement to grandfather unconditional CY appointees; and evidence of their own employment history, which suggested that the University was aware that plaintiffs maintained CY appointment status even though they at times did not devote the entire year to University duties. Finally, plaintiffs argued that a July 1984 memorandum from the then executive vice president of the University established a policy that insulated CY appointees from any changes to the conditions of employment of faculty members. In May 1992, plaintiffs filed a grievance through the AAUP pursuant to the collective agreement. Later, the grievance was submitted to arbitration. However, when an arbitrator determined that the nature of the dispute fell under an article in the collective agreement that subjected the dispute only to advisory, as opposed to binding arbitration, plaintiffs abandoned the arbitration. After a somewhat unsuccessful attempt to pursue litigation in federal court, plaintiffs filed suit against the University in the Law Division in 1996, alleging breach of contract. Plaintiffs and the University filed motions for summary judgment, both of which were denied. The University then filed a motion for leave to file an interlocutory appeal with the Appellate Division. The panel denied the motion without prejudice and remanded the matter to the motion court for a statement of reasons underlying its decision. In response, the motion court stated that there were a number of factual issues to be resolved by a fact finder, including whether the plaintiffs were grandfathered into CY appointments, either under the AAUP agreement or by the conduct of the University. The University subsequently filed a second for interlocutory review, which also was denied by the Appellate Division. Again, however, the panel remanded the matter to the Law Division to address the University's argument that the alleged individual agreements were superseded by the collective agreement. On remand, the Law Division concluded that there was a fact issue concerning whether plaintiffs were grandfathered into unconditional CY appointments and exempt from any conflicting provisions under the collective agreement. The University then renewed its motion for leave to appeal with the Appellate Division, which was granted. On appeal, the Appellate Division held that plaintiffs did not have individual contract rights and that any other rights asserted were to be governed by the collective agreement. Specifically, the panel found that the collective agreement and University regulations fully described the obligations of a CY appointee and that the collective agreement thus superseded any separate agreements between plaintiffs and the University. The panel further concluded that the matter was one of managerial prerogative subject to advisory arbitration under the collective agreement. The Appellate Division therefore reversed and remanded the matter for entry of judgment dismissing the complaint without prejudice to the rights plaintiffs had under the collective agreement. The Supreme Court granted plaintiffs' petition for certification. HELD: Plaintiffs, a group of tenured Rutgers University professors, presented sufficient evidence to establish a fact question regarding the existence of individual agreements with the University that would prevent it from altering plaintiffs' alleged status as unconditional calendar-year appointees; the collective agreement reached between the University and the American Association of University Professors would not supersede the professors' individual agreements in the unusual circumstances of this case. 1. An employment contract may be formed by the existence of conditions, not only manifested by words, but also implied from the circumstances of employment. Implied contract terms generally are considered as binding as express contract terms. (pp. 12-14) 2. Whether the parties acted in a manner sufficient to create implied contractual terms is a question of fact generally precluding summary judgment. (pp. 14-15) 3. Because plaintiffs did not assert that the University's actions towards other CY appointees were communicated to the workforce, or even that there was a general awareness of those actions, the evidence offered by plaintiffs in respect of the University's past actions generally would not support a claim under Woolley v. Hoffman-La Roche, 99 N.J. 284 (1985), that Rutgers had a University-wide policy about unconditional CY appointees. (pp. 15-21) 4. Although Wooley and Shebar involve implied contracts that protect the employee against arbitrary termination, the principle of holding an employer responsible for the promises it chooses to make to its employees is equally applicable to other terms and conditions of employment, such as work schedule and attendant salary reduction. (pp. 20-21) 5. Evidence exists to support plaintiffs' position that their appointment status was in the nature of an enforceable contractual obligation; the ultimate resolution of whether plaintiffs had an enforceable contract in respect of CY appointments must be rendered by the finder of fact. (pp. 21-23) 6. New Jersey courts have applied the federal labor principle that individual contracts are void only to the extent that they conflict with collective agreements or interfere with the principle of collective negotiation. Courts may look to the collective agreement to decide whether a conflict exists between the alleged individual agreement and the collective agreement. (pp. 23-29) 7. The collective agreement in this case does not preclude the type of agreements plaintiffs allege were established because those individual agreements would not be inconsistent with the collective agreement, would not diminish any rights provided for under the collective agreement, and because the AAUP has agreed to allow individual rights to be enforced by faculty members. (pp. 29-33) 8. Generally, collective agreements prevail over individual agreements and, where there is a conflict, the individual agreements may not be enforced. Long-standing principles favoring collective agreements and forbidding unfair labor practices would not be subverted in this case by a finding that the individual agreements were not precluded by the collective agreement. (pp. 33-34) 9. Questions concerning whether subjects are mandatorily negotiable should be made on a case-by-case basis. The dispute in this case, which involves an issue over whether plaintiffs are required to work for the calendar year as CY appointees, is not a matter of managerial prerogative, but rather a dispute over a faculty work schedule, a term of employment, that may be litigated. (pp. 34-42) 10. There is a fact question in this case regarding whether the University created an enforceable obligation that prevented palintiffs' alleged status as unconditional CY appointees from being altered. If plaintiffs can establish that obligation to a fact finder, then the collective agreement would not supersede those individual agreements in the unusual circumstances of this case. The collective agreement in this case permits the dispute to be litigated. The Appellate Division erred in characterizing this dispute as one involving managerial prerogative. (pp.42-43) Judgment of the Appellate Division is REVERSED and the matter is REMANDED. JUSTICE VERNIERO filed a separate concurring opinion in which JUSTICES COLEMAN and LaVECCHIA joined. Justice Verniero emphasizes that although the Court discusses the contours of Woolley, it did so only in the course of concluding that the doctrine of Woolley did not apply. Justice Verniero notes that the Court has never directly extended the requirements of that case to public employers. Justice Verniero further did not consider the Court's reliance on Shebar v. Sanyo Business Systems Corp., 111 N.J. 276 (1988), to suggest that implied contracts may now be routinely recognized between public employers and employees. CHIEF JUSTICE PORITZ and JUSTICES STEIN and LONG join in JUSTICE ZAZZALI's opinion. JUSTICE VERNIERO has filed a separate concurring opinion in which JUSTICES COLEMAN and LaVECCHIA join. DR. LEO TROY, DR. STAN HALL, DR. ERNST U. MONSE, DR. HUGH THOMPSON, DR. IRWIN ROTHBERG, DR. DANIEL WILHOFT and DR. IRWIN PRIMER, Plaintiffs-Appellants, v. RUTGERS, THE STATE UNIVERSITY, Defendant-Respondent. Argued February 14, 2001 -- Decided June 20, 2001 On certification to the Superior Court, Appellate Division. Michael H. Sussman, a member of the New York bar, argued the cause for appellants (John P. Brennan, Jr., attorney). John J. Peirano, Jr. argued the cause for respondent (Carpenter, Bennett & Morrissey, attorneys; Mr. Peirano, Kevin C. Donovan and Seth Ptasiewicz, on the brief). The opinion of the Court was delivered by ZAZZALI, J. I Plaintiffs, seven tenured members of the Rutgers University- Newark Faculty of Arts and Sciences, allege that defendant University unilaterally changed their employment status from calendar-year (CY) appointments to academic-year (AY) appointments in breach of their individual agreements. The alleged individual agreements are independent of the collective negotiations agreement negotiated between defendant and the American Association of University Professors (AAUP) that governs the terms and conditions of employment of University faculty members.See footnote 11 By 1991, each plaintiff had held a CY appointment for at least twenty years. A CY appointment, under the collective agreement, means that the faculty member is expected to devote the entire year to his or her University duties with the exception of a one-month vacation. An AY appointment, in contrast, requires the faculty member to be in attendance from September 1 to the date of commencement. Defendant and the AAUP negotiated two separate salary schedules for AY and CY appointees, with CY appointees receiving more favorable pay. In March 1992, David Hosford, Dean of Rutgers-Newark's Faculty of Arts and Sciences, advised plaintiffs that, unless they maintained sufficient duties to satisfy CY criteria, i.e., duties that occupy their time for eleven months of the year, their appointments would be changed to AY status effective July 1992. Plaintiffs objected, arguing that their CY appointments were made without conditions attached to those appointments, such that they had no obligation to perform specific duties beyond the academic year. Plaintiffs contended at that time, and assert here, that defendant elected to grandfather their appointments so as to exclude them from any requirement that they work beyond the academic year. In support of their argument, plaintiffs point to, among other proofs: (1) the deposition of George Horton, a professor and former AAUP representative, who testified that University officials intended to grandfather the appointment status of CY appointees during Union negotiations with defendant in the early 1970s; (2) the deposition of Wells Keddie, a former AAUP President, who testified that the AAUP and defendant had an unwritten understanding that although the University discussed ending the practice of making unconditional CY appointments, existing CY appointees would be grandfathered from any changes; (3) the appointment history of other University faculty members indicating that defendant unsuccessfully attempted to alter their CY appointments to AY appointments, presumably because of the agreement to grandfather unconditional CY appointees; and (4) the appointment history of each of the seven plaintiffs, including evidence that suggests in part that defendant was aware that plaintiffs maintained CY appointment status even though they at times did not devote the entire year to University duties. Further, plaintiffs argue that a July 1984 memorandum from T. Alexander Pond, then Executive Vice President of Rutgers University, established a policy that insulated CY appointees such as plaintiffs from any changes to the conditions of employment of faculty members. That memo (the Pond Memorandum) was addressed to Provosts and Deans and states: The University Senate recently considered the question of calendar year appointments and provided the President with advice that formalized in writing what has essentially been our practice for some time in regard to such appointments. That advice was reviewed by the Board of Governors. Set forth below is the statement regulating calendar year appointments which was adopted by the Senate and which I am now promulgating as the University's policy in regard to calendar year faculty appointments: 1. All persons initially appointed and/or tenured on calendar year appointments without conditions attached to those appointments shall continue to hold those appointments, unless an entire class of said appointments is reduced. 2. No further calendar year appointments without specific written conditions shall be made. 3. Non-administrative calendar year appointments shall be made only in instances where the special circumstances of the faculty member's academic work require her/his presence on campus (or usual place of work), on a year- long basis. 4. When the conditions which led to the new calendar year appointment no longer apply, the appointment shall revert to an academic year appointment. Please note that point number 1. above should not be construed to mean that initial appointment on a calendar year basis without conditions eliminates the obligation of a faculty member to be engaged in his or her professional duties at the University during the full term of his or her appointment, nor should it be construed to mean that a faculty member and his or her chairperson and dean cannot agree to reduce an appointment from calendar year to academic year. In regard to point number 2., the specific written conditions should be understood to refer to an explicit statement of the professional responsibilities entailed by the calendar year appointment. [(Second emphasis added).] Plaintiffs filed a grievance in May 1992 through the AAUP, pursuant to the collective agreement. Parenthetically, we note that the grievance procedure delineated under this collective agreement is different from similar procedures contained in private-sector collective bargaining agreements covering, for instance, factory workers or construction workers. Nor is this grievance procedure typical of that contained in most collective agreements in the public sector, such as those covering police officers, fire officers, or K-12 teachers. The standard grievance procedure in those agreements usually consists of a few paragraphs. The intricate grievance procedure in this collective agreement consumes twenty-three single-spaced pages of the fifty- three page contract. A fact finder must determine whether or not the acts and conduct of the defendant created a binding agreement between the parties and if not a determination as to whether or not the defendant had the right to terminate the status of the seven plaintiffs from a calendar term to an academic term along with justifiable reasons which would include a question as to whether or not these seven plaintiffs constituted an entire class. There is also conflicting certification facts and deposition testimony as to what the agreement was with regard to the work, as to where and how these plaintiffs were to spend the summer months. A reasonable jury must make a determination. The [c]ourt cannot as a matter of law rule in either direction and thus both plaintiffs' motion and defendant's motion are denied. Defendant subsequently filed a second motion for interlocutory review with the Appellate Division. The Appellate Division denied defendant's motion, but remanded the matter to the Law Division for disposition of defendant's argument that the alleged individual agreements were superseded by the collective agreement. Accordingly, on remand, the motion court concluded that there was a fact issue concerning whether plaintiffs were grandfathered into unconditional calendar-year appointments and exempt from any conflicting provisions under the collective agreement. Defendant then filed a renewed motion for leave to appeal with the Appellate Division. The Appellate Division granted that motion. The Appellate Division held that plaintiffs did not have individual contract rights and that any other rights asserted were to be governed by the collective agreement. The Appellate Division was not persuaded that the testimony of Horton and Keddie, the individual employment histories of plaintiffs, or the Pond memorandum created a contract right. Rather, the court held that the collective agreement and University regulations fully described the obligations of a CY appointee and that the collective agreement thus superseded any separate agreements between plaintiffs and defendant. The court also concluded that the matter was one of managerial prerogative subject to advisory arbitration under the collective agreement. The court therefore reversed and remanded the matter for entry of judgment dismissing the complaint without prejudice to the rights plaintiffs had under the collective agreement. Plaintiffs sought certification, which this Court granted. 165 N.J. 602 (2000). We now reverse. DR. LEO TROY, DR. STAN HALL, DR. ERNST U. MONSE, DR. HUGH THOMPSON, DR. IRWIN ROTHBERG, DR. DANIEL WILHOFT AND DR. IRWIN PRIMER, Plaintiffs-Appellants, v. RUTGERS, THE STATE UNIVERSITY, Defendant-Respondent. VERNIERO, J., concurring. I join in the Court's thoughtful and comprehensive opinion. I write separately to emphasize that although the Court discusses the contours of Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, modified on other grounds, 101 N.J. 10 (1985), it does so only in the course of concluding that the doctrine of Woolley does not apply. Indeed, this Court has never directly extended the requirements of Woolley to public employers, and recently declined an invitation to so do. See Golden v. County of Union, 163 N.J. 420, 431 (2000) (concluding that public employee's reliance on Woolley was misplaced in view of statutory language establishing employee's at-will employment status). See also Walsh v. State, 147 N.J. 595 (1997) (affirming determination that implied-contract doctrine should not apply to public employee's action in view of at-will relationship created by statute). Moreover, in a case involving a county adjuster whose appointment was governed by statute, we did not imply a fixed term of employment or impose one on the public employer. DiPaolo v. Passaic County Bd. of Chosen Freeholders, 322 N.J. Super. 487, 493 (App. Div. 1999) (holding that the public employment relationship derives from applicable statutory schemes and not from an independent contract between public employer and employee ), aff'd o.b., 162 N.J. 572 (2000). Nor do I consider that the Court's reliance on Shebar v. Sanyo Business Systems Corp., 111 N.J. 276 (1988), suggests that implied contracts may now be routinely recognized between public employers and employees. Shebar is cited merely as an example of a case in which the Court, applying traditional principles of contract formation, concluded that material issues of fact precluded summary judgment. Such is the case here. Granting them all favorable inferences due under Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520 (1995), plaintiffs are entitled to have a jury determine whether the parties had formed individual calendar-year contracts. In making that determination, jurors should rely not on Woolley or its doctrine of implied contracts, but on the more traditional tenets of contract law used in this setting. I also consider the Court's holding to be limited by the idiosyncratic facts of this case. In my view, then, the Court's holding would not extend to any case resembling Golden, DiPaolo, or Walsh, in which the employment relationship derives from a clear statutory scheme. For those reasons, I join in the Court's disposition and consider it to be the correct one. Justices Coleman and LaVecchia join in this opinion. NO. A-17 DR. LEO TROY, DR. STAN HALL, DR. ERNST U. MONSE, DR. HUGH THOMPSON, DR. IRWIN ROTHBERG, DR. DANIEL WILHOFT and DR. IRWIN PRIMER, Plaintiffs-Appellants, v. RUTGERS, THE STATE UNIVERSITY, Defendant-Respondent. DECIDED June 20, 2001 Chief Justice Poritz