Title: Borough of Carteret v. Firefighters Mutual Benevolent Association, Local 67
Citation: N/A
Docket Number: 
State: new-jersey
Issuer: new-jersey Supreme Court
Date: July 8, 2021

Borough of Carteret v. Firefighters Mutual Benevolent Association, Local 67 Annotate this Case Justia Opinion Summary In 2011, the Borough of Carteret and the Firefighters Mutual Benevolent Association, Local 67 (FMBA) executed a collectively negotiated agreement (CNA) governing the terms and conditions of employment for the Borough’s firefighters. As of 2013, the Borough employed four captains and generally staffed each shift with one captain, who was charged with managing subordinate firefighters also on duty. Under the CNA, if no captains were scheduled to work a particular shift, the senior firefighter on duty would assume the captain’s responsibilities and be compensated at the captain’s rate of pay. Almost two years after the CNA went into effect, the Borough created a new position -- fire lieutenant -- falling between captain and firefighter in the chain of command. After the creation of the lieutenant position, if no captains were scheduled for a given shift, the lieutenant on duty would assume the captain’s responsibilities. In those instances, however, the Borough paid lieutenants their regular salary, not the higher rate an acting captain would have been paid. In 2017, the FMBA filed a grievance alleging that the Borough’s failure to pay lieutenants at the rate of an acting captain when a lieutenant assumed a captain’s responsibilities violated the terms of the CNA. An arbitrator sided with the FMBA. The Chancery Division upheld the award, but the Appellate Division reversed, finding that the difference between the Civil Service Commission’s job descriptions for firefighters and fire lieutenants created uncertainty as to Section 5 of the CNA's application to lieutenants. The New Jersey Supreme Court reversed, finding the arbitrator’s award was supported by a reasonably debatable interpretation of the disputed provision, and therefore, the award should have been upheld on appeal. Read more Want to stay in the know about new opinions from the Supreme Court of New Jersey? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Supreme Court of New Jersey. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . SYLLABUSThis syllabus is not part of the Court’s opinion. 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 Court. In the interest of brevity, portions of an opinion may not have been summarized. Borough of Carteret v. Firefighters Mutual Benevolent Association, Local 67 (A-10-20) (084709)Argued March 1, 2021 -- Decided July 8, 2021PIERRE-LOUIS, J., writing for a unanimous Court. In this case, the Court considers whether an arbitrator’s interpretation of a labor agreement was “reasonably debatable” and should therefore have been upheld on appeal. In 2011, the Borough of Carteret and the Firefighters Mutual Benevolent Association, Local 67 (FMBA) executed a collectively negotiated agreement (CNA) governing the terms and conditions of employment for the Borough’s firefighters. As of 2013, the Borough employed four captains and generally staffed each shift with one captain, who was charged with managing subordinate firefighters also on duty. Under Article VIII, Section 5 of the CNA, if no captains were scheduled to work a particular shift, the senior firefighter on duty would assume the captain’s responsibilities and be compensated at the captain’s rate of pay. Almost two years after the CNA went into effect, the Borough created a new position -- fire lieutenant -- falling between captain and firefighter in the chain of command. After the creation of the lieutenant position, if no captains were scheduled for a given shift, the lieutenant on duty would assume the captain’s responsibilities. In those instances, however, the Borough paid lieutenants their regular salary, not the higher rate an acting captain would have been paid. In 2017, the FMBA filed a grievance alleging that the Borough’s failure to pay lieutenants at the rate of an acting captain when a lieutenant assumed a captain’s responsibilities violated Section 5 of the CNA. At the arbitration hearing, Fire Chief Mark Hruska testified that the FMBA agreed to waive Section 5 if the Borough created the lieutenant position. In contrast, Jason Kurdyla, the FMBA President at the time of the hearing, testified that there was neither an agreement nor a vote by FMBA membership to modify Section 5. Kurdyla and another FMBA representative both testified that the duties previously performed by captains had been entirely assumed by lieutenants. The arbitrator sided with the FMBA. The arbitrator did not credit Hruska’s testimony and held that “the unrebutted testimony . . . that the lieutenants are performing 1 the duties of shift commanders” supports the conclusion that “intentional or not, what the Borough has done is to replace captains with lieutenants, at a lower pay rate” in violation of Section 5 of the CNA. The arbitrator therefore awarded back pay at the higher rate. The Chancery Division upheld the award, but the Appellate Division reversed, finding that the difference between the Civil Service Commission’s job descriptions for firefighters and fire lieutenants created uncertainty as to Section 5’s application to lieutenants. The Court granted certification. ___ N.J. ___ (2020).HELD: The arbitrator’s award is supported by a reasonably debatable interpretation of the disputed provision, and therefore, the award should have been upheld on appeal.1. An arbitrator’s award resolving a public sector dispute will be accepted so long as it is “reasonably debatable.” Under that standard, a court may not substitute its judgment for that of the arbitrator, regardless of the court’s view of the correctness of the arbitrator’s position. If two or more interpretations of a labor agreement could be plausibly argued, the outcome is at least reasonably debatable. (pp. 11-12)2. The arbitrator’s award in this matter was supported by a plausible interpretation of the CNA and therefore satisfies the “reasonably debatable” standard. In reversing the arbitrator’s award, the Appellate Division incorrectly substituted its own judgment and did not afford proper deference to the arbitrator’s interpretation of the CNA. The Borough interprets Section 5 as addressing only senior firefighters, inapplicable to lieutenants or any other Carteret Fire Department personnel. The FMBA views Section 5 as providing captain’s pay to any non-captains of lower rank -- senior firefighters, lieutenants, or otherwise -- who assume the role of a captain when no captains are on duty. Both of those interpretations are arguably reasonable, but the arbitrator sided with the FMBA. The inquiry on appeal is not whether the appellate court has a better interpretation of the agreement. It is the arbitrator’s interpretation of the CNA that the parties bargained for here. (pp. 13-15)3. Of course, the CNA makes no reference to lieutenants because that position had yet to be created at the time the CNA was negotiated and went into effect. Notably, however, as Borough counsel conceded, the CNA applies to and governs lieutenants. In other words, although the CNA generally applies to lieutenants despite the fact that they are not mentioned at all in the agreement, it is only Section 5 that the Borough seeks to carve out as inapplicable to lieutenants. The arbitrator quite reasonably chose not to endorse that construction of the CNA. (pp. 15-16) REVERSED. The arbitral award is REINSTATED.CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and SOLOMON join in JUSTICE PIERRE-LOUIS’s opinion. 2 SUPREME COURT OF NEW JERSEY A- 10 September Term 2020 084709 Borough of Carteret, a municipal corporation of the State of New Jersey, Plaintiff-Respondent, v. Firefighters Mutual Benevolent Association, Local 67, Defendant-Appellant. On certification to the Superior Court, Appellate Division . Argued Decided March 1, 2021 July 8, 2021 Raymond G. Heineman argued the cause for appellant (Kroll Heineman Carton, attorneys; Raymond G. Heineman, on the brief). Ted Del Guercio, III, argued the cause for respondent (McManimon Scotland Baumann, attorneys; Ted Del Guercio, III, on the brief).JUSTICE PIERRE-LOUIS delivered the opinion of the Court. 1 In this case, we are asked to determine whether an arbitrator’sinterpretation of a labor agreement was “reasonably debatable” and shouldtherefore have been upheld on appeal. The labor agreement at issue states, in part, that senior firefighters in theCarteret Fire Department are entitled to acting captain’s pay whenever theyassume the role of a fire captain. A dispute arose when the Borough ofCarteret created the new position of lieutenant within the Fire Department, butdid not pay lieutenants at the rate of an acting captain when they performed theduties of that role. An arbitrator found that the Borough’s failure to pay lieutenants at therate of an acting captain when they assumed captain’s responsibilities violatedthe labor agreement, and awarded back pay at the higher rate. The AppellateDivision vacated the arbitrator’s award because, in the court’s view, thedisputed provision of the labor agreement did not apply to lieutenants. Although the Appellate Division’s conclusion is arguably plausible in itsown right, the court improperly substituted its own judgment for that of thearbitrator in vacating the arbitral award. We find that the arbitrator’s award issupported by a reasonably debatable interpretation of the disputed provision ,and therefore, the award should have been upheld on appeal. For the reasons 2 that follow, we reverse the Appellate Division’s decision and reinstate theaward. I. A. In 2011, the Borough of Carteret and the Firefighters Mutual BenevolentAssociation, Local 67 (FMBA) executed a collectively negotiated agreement(CNA) governing the terms and conditions of employment for the Borough’sfirefighters. The CNA was to be in effect from January 1, 2011 throughDecember 31, 2015. As a labor union, the FMBA is the “exclusiverepresentative and bargaining agent” for “all fire personnel within the CarteretFire Department,” except the fire chief. The CNA provides for five categoriesof fire personnel employed by the Borough, in the following order ofhierarchy: chief, fire prevention captain, fire official, captain, and firefighter. Article VIII of the CNA sets forth a salary schedule. Central to thismatter is Article VIII, Section 5, “Acting Captains.” Section 5 states: There shall be a Captain assigned to each tour of duty, referred to as a Shift Captain. Whenever a Shift Captain is off, the senior firefighter on duty shall assume the responsibilities of Acting Captain and shall receive the rate of pay of a Captain for each day of such service, providing this does not conflict with Civil Service regulations. 3 The CNA states that Carteret Fire Department personnel are scheduled towork twenty-four hours at a time, with seventy-two hours off after each shift.As of 2013, the Borough employed four captains and generally staffed eachshift with one captain, who was charged with managing subordinatefirefighters also on duty. Under Section 5, if no captains were scheduled towork a particular shift, the senior firefighter on duty would assume thecaptain’s responsibilities and be compensated at the captain’s rate of pay. In December 2012, almost two years after the CNA went into effect, theBorough passed an ordinance creating a new position within the Carteret FireDepartment -- fire lieutenant -- a “first level supervisory position” fallingbetween captain and firefighter in the Department’s chain of command. Theordinance set the lieutenant salary at $95,050.46, which was $1,500 more thanthe highest firefighters’ salary and approximately $8,000 less than the captainsalary. The ordinance went into effect on January 1, 2013 and in July 2013,the Borough began promoting firefighters to the new lieutenant position from apreexisting list of firefighters who were potentially eligible for promotion tocaptain. After the creation of the lieutenant position and the appointment ofseveral firefighters to lieutenant, if no captains were scheduled for a givenshift, the lieutenant on duty would assume the captain’s responsibilities. 4 Notably, after the lieutenant position came into being, no firefighters werepromoted to captain. And, by 2018, all the Fire Department’s captains hadretired or were demoted. The Borough, however, did not eliminate theposition of “captain” within the Fire Department at that time. 1 As the numberof captains dwindled from four to zero, all the shifts were supervised bylieutenants. In those instances, however, the Borough paid lieutenants theirregular salary, not the higher rate an acting captain would have been paidpursuant to Article VIII, Section 5 of the CNA. B. On August 9, 2017, the FMBA filed a grievance with the Borough,alleging that the Borough’s failure to pay lieutenants at the rate of an actingcaptain when a lieutenant assumed a captain’s responsibilities violated Section5 of the CNA.2 The grievance alleged that the Section 5 violation occurred onAugust 7, 2017. At the FMBA’s request, the grievance went to binding1 At oral argument, counsel for the FMBA represented that the Borough passed an ordinance in 2019 removing the position of “captain.” Any elimination of that position, however, occurred after the arbitration that is the subject of this appeal and is therefore irrelevant to our review of this matter. 2 Article IX of the CNA provides the procedure for filing a grievance. A grievance must be taken to the fire chief within seven days of its discovery, and, if not settled, brought before the Borough’s Public Safety Committee. If the grievance is not resolved by the Committee, it goes to the Borough’s Mayor and Council. If still not satisfactorily resolved, “the grievance shall be submitted to the Public Employment Relations Commission for arbitration.” 5 arbitration. The New Jersey Public Employment Relations Commissiondesignated an arbitrator to handle the matter. An arbitration hearing was conducted in April 2018. Fire Chief MarkHruska testified for the Borough. Before becoming the chief of the FireDepartment, Hruska was a captain, and, in 2011, he began serving as presidentof the FMBA. In April 2013, Hruska was promoted to the role of acting firechief -- a position not included in the FMBA’s membership -- but he continuedto serve as FMBA president until August 2013. Hruska testified that theFMBA agreed to waive Section 5, the acting captain’s pay provision of theCNA, if the Borough created the lieutenant position. Hruska stated that theissue was discussed at FMBA meetings in 2012 and 2013 and voted onapprovingly by FMBA members. In contrast, Jason Kurdyla, the FMBA President at the time of thehearing, testified that there was neither an agreement nor a vote by FMBAmembership to modify Section 5 of the CNA. Kurdyla and another FMBArepresentative both testified that the duties previously performed by captainshad been entirely assumed by lieutenants. In a written opinion, the arbitrator sided with the FMBA. The arbitratordid not credit Hruska’s testimony regarding the alleged agreement between theBorough and the FMBA to waive the acting captain provision in exchange for 6 the creation of the lieutenant position. The arbitrator noted that Hruska couldnot identify any of the supposed negotiators on either side who came to thatalleged agreement and that the FMBA’s meeting minutes from 2012 to 2013did not reflect a discussion or a vote on the issue by the FMBA membership.Additionally, the arbitrator found that “Hruska’s dual role as both acting firechief and president of [the FMBA] . . . quite literally embodied the concept ofconflict of interest.” The arbitrator held that “the unrebutted testimony . . . that the lieutenantsare performing the duties of shift commanders” supports the conclusion that“intentional or not, what the Borough has done is to replace captains withlieutenants, at a lower pay rate” in violation of Section 5 of the CNA. In soholding, the arbitrator rejected the Borough’s argument that the partiesestablished a past practice of not paying lieutenants in accordance with theCNA, finding instead that “[w]here the contract language conflicts with theparties’ practice, [the FMBA] has a right to enforce its contract rights even if ithas not done so before.” The arbitrator ordered the Borough to pay the acting captain’s rate forevery occasion on which a lieutenant had assumed the responsibilities of acaptain since August 2017 when the grievance was first asserted. The totalamount of backpay owed by the Borough was calculated to be $56,065.18. 7 C. The FMBA petitioned to enforce the arbitration award and the Boroughcounterclaimed to vacate. The Chancery Division upheld the award, findingthat the arbitrator neither “exceeded [nor] so imperfectly executed [her]powers that a mutual, final and definite award upon the subject mattersubmitted was not made.” (quoting N.J.S.A. 2A:24-8(d)). D. The Borough appealed, arguing that “the arbitrator imperfectly executedher powers, misinterpreted [Section 5’s] plain language, ignored, among otherthings, the parties’ past practice, and improperly disregarded the Fire Chief’stestimony.” In an unpublished opinion, the Appellate Division reversed theChancery Division and vacated the award. Observing that “[n]either the trialcourt nor this court may second-guess the arbitrator’s interpretation of theCNA, so long as her construction is reasonably debatable,” the AppellateDivision nevertheless found that here, the Arbitrator “engrafted termsconcerning lieutenants onto [Section 5], terms that are contrary to [Section 5’s]plain language and were unintended by the parties when they negotiated theCNA.” The Appellate Division was persuaded by the Civil ServiceCommission’s job descriptions for fire personnel. It noted that absent from the 8 job description for firefighters was any provision suggesting that a firefightermust assume captain’s duties when a captain is not scheduled. Consequently,when a firefighter performs captain’s duties, the firefighter is performing workbeyond his or her job description. According to the court, that is why Section5 provides for greater compensation in those instances. The Civil ServiceCommission’s description of fire lieutenants, by contrast, expressly directs thata lieutenant “[act] in the place of a Fire Captain in his/her absence.” TheAppellate Division found nothing in the record to support the FMBA’sargument that lieutenants should receive acting captain’s pay “for performingwork within their job description.” Finding that the difference between firefighters’ and fire lieutenants’ jobdescriptions created uncertainty as to Section 5’s application to lieutenants, theAppellate Division concluded that the arbitrator should have given greaterconsideration to the parties’ past practice; namely, that for four years,lieutenants in the Carteret Fire Department regularly assumed captains’responsibilities without demanding pay beyond that to which they wereordinarily entitled. We granted the FMBA’s petition for certification. ___ N.J. ___ (2020). 9 II. A. The FMBA argues that the Appellate Division “paid lip service” to thedeferential standard of review applicable to arbitration awards, but ultimatelyreviewed the award de novo, improperly substituting its judgment for that ofthe arbitrator. The arbitrator’s conclusion that lieutenants were entitled toacting captain’s pay is, according to the FMBA, plausible and logical, andtherefore must be upheld in the absence of language in the CNA expresslyindicating a contrary intent. B. The Borough argues that the arbitrator improperly executed her powersby reading into the CNA a requirement that lieutenants be paid in accordancewith Section 5. The Borough submits that the arbitrator’s award disregardedthe express language of the CNA and ignored the ongoing practice of theparties, which supported the Borough’s practice of not paying acting captain’srates to lieutenants upon the creation of the latter position. The Boroughasserts that “lieutenants are nowhere mentioned in [Section 5], as they werenot contemplated at the time [the CNA] was drafted.” Therefore, according tothe Borough, paying the acting captain rate to lieutenants was nevercontemplated or negotiated, so the arbitrator interpreted the CNA incorrectly. 10 III. “Arbitration is a favored form of dispute resolution, whose usefulnessfor labor-management issues is well-recognized in this state.” Borough of EastRutherford v. E. Rutherford PBA Local 275, 213 N.J. 190, 201 (2013). Tofoster finality and “secure arbitration’s speedy and inexpensive nature,”reviewing courts must give arbitration awards “considerable deference.” Ibid.(quoting Middletown Twp. PBA Local 124 v. Township of Middletown, 193 N.J. 1, 10 (2007)). “[A]rbitration is 'meant to be a substitute for and not aspringboard for litigation.’ Arbitration should spell litigation’s conclusion,rather than its beginning.” N.J. Tpk. Auth. v. Local 196, IFTPE, 190 N.J. 283,292 (2007) (quoting Local No. 153, Off. & Pro. Emps. Int’l Union v. Tr. Co.of N.J., 105 N.J. 442, 449 (1987)). The interpretation of a labor agreement “is a question for the arbitrator.It is the arbitrator’s construction which was bargained for; and so far as thearbitrator’s decision concerns construction of the contract, the courts have nobusiness overruling him [or her]” based solely on differences of interpretation.E. Rutherford PBA, 213 N.J. at 202 (quoting Weiss v. Carpenter, Bennett &Morrissey, 143 N.J. 420, 433 (1996)). Accordingly, an arbitrator’s awardresolving a public sector dispute will be accepted so long as the award is“reasonably debatable.” Id. at 201-02. 11 Under the reasonably debatable standard, a court “may not substitute itsown judgment for that of the arbitrator, regardless of the court’s view of thecorrectness of the arbitrator’s position.” Ibid. (quoting Middletown Twp.PBA, 193 N.J. at 11). Put differently, if two or more interpretations of a laboragreement could be plausibly argued, the outcome is at least reasonablydebatable. See id. at 206; PBA Local 11 v. City of Trenton, 205 N.J. 422, 430(2011). “Thus, even if the remedy the Arbitrator fashioned was not thepreferred or correct outcome, a reversal would be contrary to the deferentialstandard for reviewing arbitral decisions.” E. Rutherford PBA, 213 N.J. at 206. However, if an arbitrator adds “new terms to an agreement or ignore[s]its clear language,” the award may be vacated as not reasonably debatable.PBA Local 11, 205 N.J.at 429. Additionally, the New Jersey Arbitration Actprovides several statutory bases for vacating an arbitration award, such aswhen the award was procured through fraud, or the arbitrator was partial ,corrupt, or guilty of misconduct. See N.J.S.A. 2A:24-8(a) to (c). The Act alsostates that an award should be vacated if an arbitrator “exceeded or soimperfectly executed their powers that a mutual, final and definite award uponthe subject matter submitted was not made.” Id. at -8(d). 12 IV. Applying those standards, we are satisfied that the arbitrator’s award inthis matter was supported by a plausible interpretation of the CNA andtherefore satisfies the “reasonably debatable” standard. In reversing thearbitrator’s award, the Appellate Division incorrectly substituted its ownjudgment and did not afford proper deference to the arbitrator’s interpretationof the CNA. The Appellate Division, the Borough, and the FMBA all agree that thecreation of the lieutenant position injected ambiguity into Section 5 of theCNA. Specifically, after the lieutenant position was created, a new job titlewas inserted between captain and firefighter. With Section 5 referring only tothe positions of “captain” and “firefighter,” it became unclear whether Section5 of the CNA was triggered when no captains were on duty and a lieutenant, asthe next position down on the chain of command, and therefore the “seniorfirefighter” on duty, assumed the responsibilities of a captain. Pursuant to the Borough’s interpretation, because Section 5 mentionsonly “senior firefighters,” lieutenants are not entitled to the benefits of Section5; namely, acting captain’s pay. But since Section 5 could not havecontemplated lieutenants filling in for captains because the CNA was executedbefore the creation of the lieutenant position, the FMBA argues the opposite: 13 that any lieutenant assuming a captain’s responsibilities is entitled to actingcaptain’s pay, just as a senior firefighter assuming the captain’s role would beentitled to the higher payrate. Stated differently, one interpretation views Section 5 as a contractprovision addressing only senior firefighters, inapplicable to lieutenants or anyother Carteret Fire Department personnel. The other views Section 5 asproviding captain’s pay to --- non-captains of lower rank -- senior anyfirefighters, lieutenants, or otherwise -- who assume the role of a captain whenno captains are on duty. Both of those interpretations are arguably reasonable, but the arbitratorsided with the FMBA, persuaded by the “unrebutted testimony that lieutenantsare performing the duties of shift commanders.” She found that the Borough,by not elevating any firefighters to the rank of captain while the captains alleither retired or were demoted, had essentially replaced the fire captains withlieutenants at a lower rate of pay, in violation of Section 5 of the CNA. Wefind that to be a reasonably debatable interpretation of how Section 5 shouldapply to lieutenants who assume captain’s responsibilities. A plausiblereading of the CNA could lead to the conclusion that Section 5 embodied anegotiated agreement between the FMBA and the Borough that whenever anemployee, lower in rank, of the Carteret Fire Department assumes the 14 responsibilities of a captain, the employee is entitled to acting captain’s pay.That reasonable reading of the CNA undergirds the arbitrator’s opinion andcorresponding award. The Appellate Division interpreted Section 5 differently, but the inquiryon appeal is not whether the appellate court has a better interpretation of theagreement. It is the arbitrator’s interpretation of the CNA that the partiesbargained for here. It may be that the Appellate Division disagrees with thearbitrator’s determination, but an appellate court cannot substitute its ownjudgment for that of the arbitrator because the court believes its interpretationis the better one.3 The Appellate Division found that Section 5 is “devoid of any languageconcerning lieutenants” and that the arbitrator engrafted terms concerninglieutenants onto the CNA. The Borough makes the same argument at length.Of course, the CNA makes no reference to lieutenants because that positionhad yet to be created at the time the CNA was negotiated and went into effect.Notably, however, as Borough counsel conceded during oral argument, it isundisputed that the CNA as a whole applies to and governs lieutenants. In3 As previously noted, the Appellate Division relied heavily on the Civil Service Commission job descriptions in reversing the arbitrator’s award. It is the CNA, however, that we are tasked with interpreting, not the Civil Service Commission job descriptions, which were not integrated into the CNA. 15 other words, although the CNA generally applies to lieutenants despite the factthat they are not mentioned at all in the agreement, it is only Section 5 that theBorough seeks to carve out as inapplicable to lieutenants. The arbitrator quitereasonably chose not to endorse that construction of the CNA. As our precedent indicates, affirming an arbitrator’s award is not acomment on the viability of opposing interpretations of a disputed laboragreement, “[n]or is it a conclusion that the arbitrator’s interpretation is thebest one. That is not the standard. What is required is that the arbitrator’sinterpretation finds support in the Agreement . . . .” PBA Local 11, 205 N.J. at 432. Here, we find that it does. V. The judgment of the Appellate Division is reversed and the arbitrator’saward is reinstated. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and SOLOMON join in JUSTICE PIERRE- LOUIS’s opinion. 16