SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4234-16T4

PAUL BARILA, WILLIAM J.

LUDWIG, CANDACE R. KANTOR, and 

DENNIS ENRICO,

Plaintiffs-Respondents,

v.

BOARD OF EDUCATION OF CLIFFSIDE PARK, 

BERGEN COUNTY,

Defendant-Appellant.

______________________________________

Argued June 5, 2018 – Decided July 10, 2018

Before Judges Reisner, Mayer, and Mitterhoff

On appeal from Superior Court of New Jersey, 

Chancery Division, Bergen County, Docket No.

C-000161-16.

Robert D. Lorfink argued the case for appellant 

(Fogarty & Hara, attorneys; Stephen R. Fogarty, 

of counsel and on the briefs; Robert D. Lorfink, 

on the briefs).

Richard A. Friedman argued the cause for

respondent (Zazzali, Fagella, Nowak, Kleinbaum &

Friedman, PC, attorneys; Richard A. Friedman and 

Genevieve M. Murphy-Bradacs, of counsel and on 

the brief).

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." 

Although it is posted on the internet, this opinion is binding only on the 

parties in the case and its use in other cases is limited. R. 1:36-3.
2 A-4234-16T4

 PER CURIAM

Defendant Board of Education of Cliffside Park (Board) 

appeals from a September 19, 2016 order denying defendant's 

motion to dismiss and May 16, 2017 orders denying defendant's 

motion for summary judgment and granting summary judgment in 

favor of plaintiffs Paul Barila, William J. Ludwig, Candice R. 

Kantor and Dennis Enrico's (plaintiffs) as to Count I of 

plaintiffs' Amended Complaint. We affirm. 

This matter arises from a collective bargaining agreement 

negotiated by the Board and the Cliffside Park Education 

Association (Association) for all teaching staff members

employed by the District. The parties stipulate to the facts as 

follows. Plaintiffs are current and former teachers employed by 

the Board. Plaintiffs were employed by the Board prior to July 

1, 2015, and each had worked for the Board for at least ten 

years as of July 1, 2015. Plaintiffs are in the bargaining unit 

and are also members of the Association, which is the exclusive 

collective bargaining representative for all teaching staff 

members employed by the District. 

Plaintiffs, the Board, and the Association were all parties 

to a collective bargaining agreement that was in effect from 

July 1, 2012, through June 30, 2015 (the 2012 Agreement).

Article VIII of the 2012 Agreement, which addressed sick leave, 
3 A-4234-16T4

provided: "In accordance with the provisions of N.J.S.A.

18A:30-2, each Teacher shall be entitled to ten (10) sick leave 

days with full pay in each school year. Unused sick leave days 

shall, in accordance with the provisions of N.J.S.A. 18A:30-3, 

be accumulated from year to year with no maximum limit." 

Article VIII of the 2012 Agreement provided further:

Any teacher, who, as of the end of any 

school year beginning with 09-10, has either 

served the District at least ten (10) years 

and has retired under the Teachers' Pension 

and Annuity Fund upon such retirement or has 

served the District at least twenty-five 

(25) years and leaves the employ of the 

Board for any reason, shall be paid 

according to the table:

Formula for unused sick leave:

First 100 days x $125.00/day

Second 100 days x $0.00/day

Up to next 72 days x $1.75/day

Maximum is $25,000.00

Accordingly, any teacher who had either been employed by 

the Board for at least ten years and retired under the Teachers' 

Pension and Annuity Fund, or who had been employed by the Board 

for twenty-five years and left the employ of the Board for any 

reason, was entitled to compensation, as calculated by a 

specific formula, for accumulated but unused sick leave, up to a 

maximum amount of $25,000. Although the 2012 Agreement 

specified that compensation for accumulated unused sick leave

was to begin with the 2009-2010 school year, the parties agree 
4 A-4234-16T4

that an identical provision has appeared in previous collective 

negotiations agreements for the past twenty years.

As the 2012 Agreement expired at the end of June 2015, the 

Association and the Board negotiated a successor collective 

negotiations agreement, which became effective on July 1, 2015 

(the 2015 Agreement). The 2015 Agreement modified Article VIII 

in two significant ways. First, the 2015 Agreement changed the 

formula for unused sick leave by providing for up to a maximum 

of 100 days at the rate of $150/day. Consequently, the maximum 

amount of compensation that a teacher could receive for 

accumulated but unused sick leave upon retirement under the 

Teachers' Pension and Annuity Fund, or after twenty-five years 

of employment, was $15,000. Accordingly, the 2015 Agreement 

decreased the maximum amount of compensation from $25,000 to 

$15,000, decreased the maximum number of days of accumulated, 

but unused, sick days for which teachers could be compensated to 

100 days, but increased the rate per day for these 100 days from 

$125 to $150. 

The parties agree that the Association knowingly bargained 

for the modified accumulated sick leave provision in the 2015 

Agreement. The parties also agree that the Association did not 

seek or secure plaintiffs' permission prior to negotiating the 

modification to Article VIII. To the contrary, several 
5 A-4234-16T4

teachers, including plaintiffs, objected to the modifications 

upon learning of the changes to Article VIII. Notwithstanding 

these objections, the Association ratified the 2015 Agreement by 

adopting a resolution approving it on April 27, 2016. None of 

the plaintiffs voted to ratify the 2015 Agreement and they 

continued to object to the new Article VIII. 

Additionally, the parties stipulate as to the particular 

impact of Article VIII of the 2015 Agreement on each of the 

plaintiffs. Prior to July 1, 2015, plaintiff Kantor had accrued 

233 sick days, which equated to $18,275 under the 2012 

Agreement. Plaintiff Barila had accrued 308.5 sick days, which 

equated to $25,000 under the 2012 Agreement. Plaintiff Enrico 

had accumulated 282.5 sick days, which equated to $25,000 under 

the 2012 Agreement. Likewise, plaintiff Ludwig accumulated 263 

sick days, which equated to $25,000 under the 2012 Agreement.

Since this litigation commenced, plaintiffs Kantor and Barila 

have retired and were paid for their unused, accumulated sick 

leave pursuant to the formula set forth in Article VIII of the 

2015 Agreement. The Board has taken the position that when 

plaintiffs Enrico and Ludwig retire, they too will be 

compensated for their unused, accumulated sick leave pursuant to 

the formula set forth in Article VIII of the 2015 Agreement. 
6 A-4234-16T4

On June 9, 2016, plaintiffs filed a complaint challenging 

the retroactive divestiture of their accumulated but unpaid sick 

leave. On July 26, 2016, defendant filed a motion to dismiss in 

lieu of an answer. Plaintiffs then filed a cross-motion to file 

a supplemental pleading on September 8, 2016. By order dated 

September 19, 2016, the trial judge denied the motion to dismiss 

and granted the motion to amend the pleading. 

Plaintiffs filed a motion for summary judgment on March 21, 

2017. The Board filed a cross-motion for summary judgment 

seeking to dismiss Count I of plaintiffs' amended complaint

alleging breach of contract. The Board alleged that the trial 

court had no jurisdiction to decide the case as N.J.S.A. 34:13A5.4(d) of the New Jersey Employer-Employee Relations Act confers 

exclusive jurisdiction on the Public Employment Relations 

Commission (PERC) to decide scope of negotiations issues. In 

addition, the Board argued that it had the right to negotiate 

away plaintiffs' right to accumulated sick leave, even if those 

rights had vested.

In an extremely detailed and thorough thirty-nine page 

opinion, Judge Robert P. Contillo rejected defendant's argument 

that plaintiffs' claims involved a scope of negotiation issue. 

As a result, the judge found that he had jurisdiction to hear 

and decide the merits of the case. On the merits, the judge 
7 A-4234-16T4

concluded that compensation for accumulated but unpaid sick 

leave was a form of deferred compensation that, once earned, 

could not be divested retroactively through negotiated 

collective bargaining agreements. 

On appeal, defendant challenges the trial court's decision 

that plaintiffs' claims did not implicate a scope of 

negotiations issue. Defendant also contends that Count I, 

although phrased as a violation of contractually vested rights, 

is actually a challenge to the ability of the Board and the 

Association to negotiate changes to the accumulated sick leave 

provisions. We affirm substantially for the reasons articulated 

in the judge's opinion, adding the following comments.

In reviewing orders for summary judgment, an appellate 

court uses the same standard as the trial court. Globe Motor 

Co. v. Igdalev, 225 N.J. 469, 479 (2016); Prudential Prop. & 

Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.

1998). We decide first whether there was any genuine issue of 

material fact. If there was not, we then decide whether the 

trial court's ruling on the law was correct. Walker v. Atl. 

Chrysler Plymouth, 216 N.J. Super. 255, 258 (App. Div. 1987). 

Because the facts in this case are stipulated, the issues on 

appeal are purely legal in nature. Accordingly, our review of 

the trial court's rulings are de novo. Estate of Hanges v. 
8 A-4234-16T4

Metro. Prop. & Cas. Ins. Co. 202 N.J. 369, 382-83 (2010); see

also Manalapan Realty LP v. Twp. Comm. of Manalapan, 140 N.J. 

366, 378 (1995) ("A trial court's interpretation of the law and 

the legal consequences that flow from established facts are not 

entitled to any special deference.").

I. Subject matter jurisdiction.

Subject matter jurisdiction is the power of the court to 

hear and determine "cases of the class to which the proceeding 

in question belongs. It rests solely upon the court's having 

been granted such power by the Constitution or by valid 

legislation . . . ." State v. Osborn, 32 N.J. 117, 122 (1960). 

While state courts are generally granted "expansive authority" 

to resolve a wide range of disputes, Thompson v. City of 

Atlantic City, 190 N.J. 359, 378-79 (2007), subject matter 

jurisdiction is not without limits. See, e.g. Bd. of Educ. of

Plainfield v. Plainfield Educ. Ass'n, 144 N.J. Super. 521, 525 

(App. Div. 1976).

Our Supreme Court has held that PERC has primary 

jurisdiction over scope of negotiations issues: "[U]nder 

N.J.S.A. 34:13A-5.4(d) PERC is the forum for the initial 

determination of whether a matter in dispute is within the scope 

of collective negotiations. PERC's jurisdiction in this area is 

primary." State v. State Supervisory Emps. Ass'n, 78 N.J. 54, 
9 A-4234-16T4

83 (1978) (citations omitted). "[W]orking hours, compensation, 

physical arrangement and facilities and customary fringe 

benefits [are considered] the essential components of terms and 

conditions of employment." Id. at 67 (citing Bd. of Educ. v. 

Englewood Teachers Ass'n., 64 N.J. 1 (1973)). When a 

controversy "concerns the propriety of the parties negotiating 

and agreeing on the item in dispute, [the trial judge] should 

refrain from passing on the merits of the issue," because "PERC 

has primary jurisdiction." Ridgefield Park Educ. Ass'n v. 

Ridgefield Park Bd. of Educ., 78 N.J. 144, 153-54 (1978).

As the trial court correctly noted, however, the question 

of who may initiate such an inquiry is not entirely clear. In 

Loigman v. Township Committee of the Township of Middletown, 297 

N.J. Super. 287, 303 (App. Div. 1997), we found that N.J.S.A. 

34:13A-5.4(d) "allows only public employers and majority 

representatives to request scope-of-negotiations decisions." 

See also Petersen v. Township of Raritan, 418 N.J. Super. 125 

(App. Div. 2011) (holding an individual plaintiff could sue his 

employer, the defendant township, alleging that the defendant's 

elimination of traditional health care benefits to retirees 

violated 1997-1999 collective negotiations agreement). 
10 A-4234-16T4

Notwithstanding this ambiguity, as the trial court found, 

it is clear that plaintiffs could not file an action with PERC. 

Tellingly, neither defendant nor the Association expressed an

interest in obtaining a scope of negotiations determination from 

PERC. The judge noted that, "the Association has expressed no 

interest in initiating such a process. Nor has it sought to 

intervene in this case." That neither the Board nor the 

Association sought a determination from PERC, knowing there were 

dissenting employees at the time of the negotiations, undercuts 

their argument that the trial court was not empowered to resolve 

the dispute.

The trial judge also correctly rejected defendant's 

argument that Count I alleges a scope of negotiations issue. We 

observe, as did the trial judge, that plaintiffs do not dispute 

that the Board and the Association are empowered to negotiate 

changes to the accumulated sick leave provisions. See Maywood 

Educ. Ass'n v. Maywood Bd. Of Educ., 131 N.J. Super. 551 (Ch. 

Div. 1974). The question in Count I was not whether the Board 

and the Association could include sick pay benefits as a 

negotiable item in their collective bargaining, but more 

narrowly whether the Board and the Association could 

retroactively divest plaintiff of their vested right to deferred 

compensation in an amount that exceeds $15,000. Given the 
11 A-4234-16T4

inability of plaintiffs to pursue a PERC determination, 

defendant's apparent disinterest in filing a PERC claim, and the 

narrow issue under review, the trial court did not err in 

determining that it had subject matter jurisdiction to 

adjudicate plaintiffs' breach of contract claim. 

II. The negotiability of vested sick leave time.

We have recognized that payment for accumulated sick leave,

as a form of deferred compensation, is to be protected. In 

Matter of Morris School District Board of Education, 310 N.J. 

Super. 332 (App. Div. 1998), we held that although the parties 

collectively agreed to be bound by a fact finder's determination 

in advance, a retroactive cap on vested or accumulated 

compensation could not be upheld absent a knowing and 

intentional waiver by the persons adversely affected. The court 

in Morris was "satisfied that the Commission's policy barring 

divestment absent a knowing waiver was reasonable and within its 

statutory powers." Id. at 343. In so holding, we noted that 

"our Supreme Court has protected similar rights against 

invasion." Ibid. (citing Gauer v Essex Cty. Div. of Welfare, 

108 N.J. 140, 144 (1987)). Furthermore, the Supreme Court 

opined in Owens v. Press Publishing Co., 20 N.J. 537 (1956) that 

the right to severance pay survived the expiration of a 
12 A-4234-16T4

collective bargaining agreement. As we recognized in Morris

School Distict, Owens held:

deferred compensation 'was not conditioned 

upon the employee's discharge from service 

within the term of the collective bargaining 

agreement.' The Court reasoned that 'once 

the right came into being it . . . 

survive[d] the termination of the 

agreement.' In contrast, the Court 

concluded that the plaintiffs' claims for 

severance pay allegedly earned in the 

intervening period between expiration of the 

collective bargaining agreement and their 

respective discharge was 'ill-founded.' 

[Morris School Dist., 310 N.J. Super. at 344 

(quoting Owens, 20 N.J. at 348-

49)(alterations in original)].

In the instant matter, the trial court applied similar 

reasoning in its opinion noting that the

[B]oard was authorized to negotiate over the 

accumulated sick leave provisions 

prospectively, or going forward. In 

contrast, a board of education is generally 

not permitted to divest teachers of their 

vested rights earned under prior collective 

negotiation agreements. 

As did the trial judge, we agree that Morris and Owens

stand for the proposition that compensation for accumulated sick 

leave is "earned" during the service performed by the teachers 

during the term of any particular collective negotiation 

agreement. Once vested, the right to compensation is a form of 

deferred compensation that cannot retroactively be negotiated 
13 A-4234-16T4

away. Morris School Dist., 310 N.J. Super. at 347-48. In that 

regard, New Jersey courts have consistently protected various 

forms of deferred compensation from retroactive divestment 

through collective bargaining negotiations absent consent of the 

affected employees. See e.g. State Troopers Fraternal Assoc. v. 

State, 149 N.J. 38 (1997) (retroactive pay adjustments); Gauer, 

108 N.J. at 144 (reimbursement of health insurance and Medicare 

premiums); Owens, 20 N.J. at 442 (severance pay). 

In this case, plaintiffs did not consent to the retroactive 

divestment of their vested rights. Accordingly, the trial court 

correctly held that the Board and Association impermissibly 

applied the 2015 Agreement to retroactively divest plaintiffs' 

right to earned compensation. There was no error in the trial 

court's decision to deny defendant's motion for summary 

judgment. 

We affirm the orders on appeal.