Court Opinion

ID: 4697445
Source: CourtListenerOpinion
Date Created: 2021-06-22 14:09:00.246749+00
Date Added: 2024-06-11T08:05:46.321275
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-2853-19

WEST ESSEX PBA LOCAL 81,

          Plaintiff-Appellant,

v.

FAIRFIELD TOWNSHIP,

     Defendant-Respondent.
____________________________

                   Argued June 1, 2021 – Decided June 22, 2021

                   Before Judges Rothstadt, Mayer and Susswein.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Essex County, Docket No. C-
                   000190-19.

                   Michael A. Bukosky argued the cause for appellant
                   (Loccke, Correia & Bukosky, attorneys; Michael A.
                   Bukosky, of counsel and on the briefs; Corey M.
                   Sargeant, on the briefs).

                   Matthew J. Giacobbe argued the cause for respondent
                   (Cleary Giacobbe Alfieri Jacobs, LLC, attorneys;
                   Matthew J. Giacobbe, of counsel and on the brief).

PER CURIAM
        Plaintiff West Essex PBA Local 81 (PBA) appeals from a January 2, 2020

order denying its motion to vacate a July 3, 2019 arbitration award determining

defendant Township of Fairfield (Township) did not violate the parties' 2018 -

2020 collective negotiation agreement (CNA). The PBA alleged the Township

violated Article 7 of the CNA by improperly deducting Tier IV amounts for the

PBA members' health care benefits pursuant to Chapter 78, codified in N.J.S.A.

40A-10:21.1 and N.J.S.A. 52:14-17.28(c). The PBA also appeals from a March

16, 2020 order granting its motion for reconsideration but again denying the

request to vacate the arbitration award. We affirm.

        Before we recite the facts relevant to this appeal, we review the statutes

governing public employees' contributions to the cost of their health care

benefits. On June 28, 2011, the New Jersey Legislature enacted Chapter 78,

requiring public employees to contribute defined percentages of their health care

benefit premiums based on their annual income. N.J.S.A. 52:14-17.28(c).1

        Chapter 78 cited two statutes relevant to this appeal, N.J.S.A. 40A:10-

21.1 and N.J.S.A. 40A:10-21.2. Under N.J.S.A. 40A:10-21.1, the premium

payable by public employees for health care benefits was phased in over a four-

year period. N.J.S.A. 40A:10-21.1 required the minimum "amount payable by

1
    Chapter 78 expired four years after the date of enactment.
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any employee . . . shall not under any circumstance be less than the 1.5 percent

of base salary . . . ." N.J.S.A. 40A:10-21.1(a). Under this statute, employees

paid "one-fourth of the . . . contribution" during the first year (Tier I), "one-half"

in the second year (Tier II), "three-fourths" during the third year (Tier III), and

the full premium rate during the fourth year (Tier IV). Ibid.

      Chapter 78 contained a "sunset" provision, providing N.J.S.A. 40A:10-

21.1 "shall expire four years after the effective date." N.J.S.A. 40A:10 -21.2,

governing CNAs executed after achieving the Tier IV rates, required parties to

a CNA to negotiate "for health care benefits as if the full premium share was

included in the prior contract." The statute stated public employees were bound

by N.J.S.A. 52:14-17.28(c) and N.J.S.A. 40A:10-21.1 "notwithstanding the

expiration of those sections, until the full amount of the contribution . . . ha[d]

been implemented . . . ." N.J.S.A. 40A:10-21.2.

      Against this statutory background, we summarize the facts relevant to this

appeal. The facts are based on a written opinion and arbitration award rendered

after the March 20, 2019 arbitration hearing.

      The PBA and the Township were parties to a series of CNAs beginning

on January 1, 2009. The first CNA governed 2009 through 2011.

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      Under the next CNA, governing 2012 through 2014, the PBA members

contributed to their health care benefits in accordance with Chapter 78. The

PBA members began paying Tier IV rates as of January 1, 2015. Article 7 of

the 2012-2014 CNA addressed employee health benefits and provided:

            The Employer shall provide to members and their
            families the following insurance protection to the
            members:

                  1. The Horizon Blue Cross/Blue Shield
                  Direct Access 8, or equivalent, at no cost
                  to the members of the PBA Local #81.

      The third CNA, governing 2015 through 2017, modified employee health

benefit contributions. As revised, Article 7 provided:

            The Employer shall provide to members and their
            families the following insurance protection to the
            members: Additionally, all members shall contribute
            to health benefits pursuant to State Law.

                  1. The Horizon Blue Cross/Blue Shield Direct
                  Access 8, or equivalent, at no cost to the members
                  of the PBA Local #81.

      After the expiration of the 2015-2017 CNA, the PBA and the Township

began negotiations for a new CNA. The parties met three times to discuss a new

agreement. According to the PBA, it sought to renegotiate health care benefit

contributions for its members as part of a new CNA.

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        The PBA submitted a proposal seeking "a modification of the Chapter 78

co-payments provisions applicable to members." The PBA sought to reduce its

members' health care benefit contributions to the minimum 1.5 percent of salary

under N.J.S.A. 40A:10-21.1. The Township rejected the PBA's proposal, and

the PBA failed to submit another proposal or further discuss the issue. The

Township never agreed to a modification of the health care benefit contributions

for the PBA members.

        On December 18, 2017, the parties signed a memorandum of agreement

(MOA). The MOA revised Articles 3, 6, and 21 of the 2015-2017 CNA and

provided, "All proposals which are not included in this Memorandum of

Agreement shall be deemed withdrawn by both parties."

        On February 13, 2018, the parties executed the 2018-2020 CNA. In the

2018-2020 CNA, Article 7 remained unchanged from the prior CNA and

required the PBA members to "contribute to health benefits pursuant to State

Law."

        About a month after signing the 2018-2020 CNA, some of the PBA

members objected to the amount withheld from their paycheck for health care

benefits. The PBA took the position Article 7 of the 2018-2020 CNA required

its members pay only the minimum required by law, 1.5 percent of their base

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salary. The Township claimed Article 7 of the CNA required the PBA members

to pay the Tier IV rates, the same as the prior CNA.

      On March 9, 2018, the PBA filed a grievance with the Public Employment

Relations Commission (PERC) seeking to arbitrate the amount to be paid by its

members for health care benefits. PERC appointed an arbitrator (Arbitrator).

(Arbitrator). The Arbitrator conducted a hearing on March 20, 2019, at which

time the parties presented witnesses and submitted evidence.

      Ralph Casendino testified on behalf of the PBA. He served as a negotiator

for the 2018-2020 CNA. According to Casendino, the PBA sought to decrease

health care premiums for its members to 1.5 percent of their salary. He noted

the Township did not include language in the proposed CNA continuing the

payment of contributions at the Tier IV rate. Casendino explained the PBA

would have never agreed to language requiring its members pay the full Tier IV

rates in the new CNA.

      On cross-examination, Casendino acknowledged the language in the

2018-2020 CNA governing the payment of health care benefit contributions

remained unchanged from the prior CNA. He also conceded the 2018-2020

CNA did not explicitly provide for contributions to be limited to 1.5 percent of

salary. Additionally, he admitted reviewing and signing the MOA.

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      Joe Catenaro, the Township's administrator, testified at the arbitration

hearing. He negotiated the 2018-2020 CNA, along with the Township's mayor

and a Township council representative.      Catenaro explained the Township

"emphatically" rejected the PBA's request to reduce health care benefit

premiums because it would have been "extremely costly."           According to

Catenaro, the PBA's proposed modification to 1.5 percent of salary "was so

flatly and resoundingly rejected[,] that was the end of it." Absent any revision

to the health care benefit contribution provision in the new CNA, the Township

deemed the Tier IV rates remained in effect.

      On July 3, 2019, the Arbitrator issued a written opinion. She determined

the issue was whether the Township violated the 2018-2020 CNA by deducting

Tier IV contribution rates from the PBA members' salaries for health care

benefits.

      The Arbitrator found the evidence showed "the Township rejected the

PBA's proposals and the PBA d[id] not refute this." She also determined the

PBA abandoned its proposal to reduce the health care benefit contributions

because the MOA expressly withdrew proposals not memorialized in the MOA.

According to the Arbitrator, "after completing the phase-in of Chapter 78, the

parties completed their successor agreement negotiations without having

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reached an agreement to reduce employee contributions to 1.5 percent of base

salary." As a result, she found "the phrase in the[] 2018-2020 [CNA], 'pursuant

to State law' to refer to Chapter 78 and that the[] existing health care

contributions remain[ed] at Tier IV."       Applying N.J.S.A. 40A:10-21.1, the

Arbitrator held "[a]ccording to State law, Tier IV . . . became the existing term

or condition leading to the next contract negotiations."

       The Arbitrator rejected the PBA's claim that because the Township

expressly required other public employees groups within the municipality to

contribute to health care benefits at the Tier IV rate in executing new agreements

with those units, the Township did not intend to impose the Tier IV rate for the

PBA members. She found the Township's inclusion of Tier IV contribution rates

in agreements with other collective bargaining units was consistent with the

Township's position during the negotiation of the 2018-2020 CNA with the

PBA.

       She further determined the PBA's argument, justifying contribution

payments of 1.5 percent of base salary because Chapter 78 expired and its

members satisfied all four payment Tiers, lacked merit. The Arbitrator held

"Chapter 78 and N.J.S.A. 40A:10-21.2 make clear, the Tier IV rate [did] not

disappear but must be negotiated – to agreement" and "[a]bsent an agreement,

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Tier IV remain[ed] the health benefits contribution, not merely by operation of

collective negotiations processes and principles but also by statute."

      The Arbitrator concluded the PBA members were "required to contribute

to their health care benefits costs pursuant to Chapter 78, which are the Tier IV

rates. The Township did not agree to change the rate." Thus, the Arbitrator

denied the PBA's grievance, finding "the Township did not violate Article 7 of

the [2018-2020] CNA by continuing to deduct the Tier IV amounts from PBA

members in January 2018."

      On September 26, 2019, the PBA filed an Order to Show Cause and

verified complaint in the Chancery Division of the Superior Court seeking to

vacate the Arbitrator's award.      The judge heard counsels' arguments on

November 13, 2019. In a January 2, 2020 order, the judge denied the PBA's

motion to vacate the arbitration award, concluding the PBA failed to satisfy any

of the prongs necessary to vacate an arbitration award under N.J.S.A. 2A:24-8.2

      The judge found the Arbitrator's award was not a product of "undue

means" under N.J.S.A. 2A:24-8(a). The judge held the Arbitrator was tasked

with determining the meaning of "State Law" and properly concluded the Tier

2
  While the PBA argued the Arbitrator's award should be vacated under all four
subsections of N.J.S.A. 2A:24-8, the judge found not "even a scintilla of
evidence that the [A]rbitrator violated sections (b) or (c)."
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IV rates were the "status quo." The judge cited our decision in Ridgefield Park

Board of Education v. Ridgefield Park Education Association, 459 N.J. Super.

57 (App. Div. 2019), 3 explaining "Chapter 78 unambiguously addressed the

negotiation of collective bargaining agreements to be executed after employees

reached full implementation of the four-tier premium share, setting forth that the

full premium share must be considered the status quo in such negotiations."

Further, while recognizing Chapter 78 contained a sunset provision and expired

on June 28, 2015, the judge concluded "the statutory language specifically

provided that the contribution levels would survive as included in the prior

contract and be subject to further negotiation for the next contract." He held

"the PBA unsuccessfully attempted to negotiate different co-payment

obligations" under the 2018-2020 CNA, and the Township never "agreed to a

reduction in the co-payment."

      Further, the judge found the PBA failed to demonstrate the Arbitrator

exceeded or imperfectly executed her powers to set aside the award under

N.J.S.A. 2A:24-8(d). The judge explained "the [A]rbitrator was tasked with

3
  After the judge issued his decision, our Supreme Court granted the petition
for certification in In re Ridgefield Park Board of Education v. Ridgefield Park
Education Association, 239 N.J. 393 (2019). On August 17, 2020, during the
pendency of this appeal, the Court reversed our decision. See In re Ridgefield
Park Bd. of Educ., 244 N.J. 1 (2020).
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determining whether the parties' agreement that 'all members shall contribute to

health benefits pursuant to State Law' meant the tiered obligation or the 1.5

[percent] obligation."    In reviewing the Arbitrator's decision, the judge

determined "[t]he [A]rbitrator did not go beyond the confined authority

bestowed by the parties[,]" "did not address disputes beyond the agreement[,]"

and "did not act with unbridled discretion in applying the governing law . . . ."

He concluded the Arbitrator "acknowledged [her] limitations" regarding

alteration of the 2018-2020 CNA and "examined the relevant statutes, case

law[,] and employed contract interpretation tools in deciphering the parties'

agreement and intent." The judge held the Arbitrator's interpretation of the

2018-2020 CNA was "reasonably debatable," and affirmed the arbitration

award.

      The PBA filed a motion for reconsideration, alleging the judge erred in

affirming the Arbitrator's award.    In a March 16, 2020 order and written

decision, the judge again denied the PBA's motion to vacate the arbitration

award, concluding:

            The parties negotiated; the PBA proposed a
            modification of the Chapter 78 Tier-Four amount; the
            Township rejected the proposal; the PBA withdrew the
            proposed modification; executed the MOA . . . ; and
            [the PBA] executed the new CNA with no change to the
            historic co-payment obligation contractual language.

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      On appeal, the PBA argues the judge erred in denying its motion to vacate

the arbitration award. We disagree.

      We "review a trial court's decision on a motion to vacate an arbitration

award de novo." Yarborough v. State Operated Sch. Dist. of City of Newark,

455 N.J. Super. 136, 139 (App. Div. 2018) (citing Minkowitz v. Israeli, 433 N.J.

Super. 111, 136 (App. Div. 2013)). However, "[j]udicial review of an arbitration

award is very limited." Bound Brook Bd. of Educ. v. Ciripompa, 228 N.J. 4, 11

(2017) (quoting Linden Bd. of Educ. v. Linden Educ. Ass'n ex rel. Mizichko,

202 N.J. 268, 276 (2010)). "The public policy of this State favors arbitration as

a means of settling disputes that otherwise would be litigated in a court." Badiali

v. N.J. Mfrs. Ins. Group, 220 N.J. 544, 556 (2015) (citing Cnty. Coll. of Morris

Staff Ass'n v. Cnty. Coll. of Morris, 100 N.J. 383, 390 (1985)). "[T]o ensure

finality, as well as to secure arbitration's speedy and inexpensive nature, there

exists a strong preference for judicial confirmation of arbitration awards."

Borough of E. Rutherford v. E. Rutherford PBA Local 275, 213 N.J. 190, 201

(2013) (alteration in original) (quoting Middletown Twp. PBA Local 124 v.

Twp. of Middletown, 193 N.J. 1,10 (2007)).

      We apply "an extremely deferential review when a party to a collective

bargaining agreement has sought to vacate an arbitrator's award." Policemen's

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Benevolent Ass'n, Local No. 11 v. City of Trenton, 205 N.J. 422, 428 (2011).

"In the public sector, an arbitrator's award will be confirmed 'so long as the

award is reasonably debatable.'"     Linden Bd. of Educ., 202 N.J. at 276-77

(quoting Middletown Twp. PBA Local 124, 193 N.J. at 11). An award is

"reasonably debatable" if it is "justifiable" or "fully supportable in the record."

Policemen's Benevolent Ass'n, 205 N.J. at 431 (quoting Kearny PBA Local No.

21 v. Town of Kearny, 81 N.J. 208, 223-24 (1979)).

      N.J.S.A. 2A:24-8 sets forth the grounds for vacating an arbitration award.

Pertinent to this appeal, a court may vacate an arbitration award "[w]here the

award was procured by corruption, fraud or undue means" or "[w]here the

arbitrators exceeded or so imperfectly executed their powers that a mutual, final

and definite award upon the subject matter submitted was not made." N.J.S.A.

2A:24-8(a) and (d).

      "'[U]ndue means' ordinarily encompasses a situation in which the

arbitrator has made an acknowledged mistake of fact or law or a mistake that is

apparent on the face of the record . . . ." Borough of E. Rutherford, 213 N.J. at

203 (alteration in original) (quoting State Off. of Emp. Rels. v. Commc'ns

Workers of Am., AFL-CIO, 154 N.J. 98, 111 (1998)).

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      An arbitrator exceeds her authority where she ignores "the clear and

unambiguous language of the agreement . . . ." City Ass'n of Supervisors &

Adm'rs v. State Operated Sch. Dist. of City of Newark, 311 N.J. Super. 300, 312

(App. Div. 1998). It is fundamental, "an arbitrator may not disregard the terms

of the parties' agreement, nor may he [or she] rewrite the contract for the

parties." Cnty. Coll. of Morris, 100 N.J. at 391 (citation omitted). Moreover,

"the arbitrator may not contradict the express language of the contract . . . ."

Linden Bd. of Educ., 202 N.J. at 276.

      The parties disputed whether the PBA members were required to

contribute 1.5 percent of their base salary or the Tier IV rates toward health care

benefits under the 2018-20120 CNA. Nothing in the language of the CNA

suggests the PBA members altered the health care benefit contribution amounts

from the prior CNA. In fact, while the PBA sought to reduce its members '

contribution for health care benefits after full implementation of the Tier IV

rates, the Township never agreed to any such reduction.

      N.J.S.A. 40A:10-21.2 addresses health care contributions after full

implementation of Tier IV contribution rates. The statute provides:

            A public employer and employees who are in
            negotiations for the next collective negotiation
            agreement to be executed after the employees in that
            unit have reached full implementation of the premium

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            share set forth in section 39 of P.L.2011, c. 78
            (C.52:14-17.28c)      shall     conduct       negotiations
            concerning contributions for health care benefits as if
            the full premium share was included in the prior
            contract. The public employers and public employees
            shall remain bound by the provisions of sections 39, 42,
            and 44 of P.L. 2011, c. 78 . . . notwithstanding the
            expiration of those sections, until the full amount of the
            contribution required by section 39 has been
            implemented . . . .

                  ....

            After full implementation, those contribution levels
            shall become part of the parties' collective negotiations
            and shall then be subject to collective negotiations in a
            manner similar to other negotiable items between the
            parties.

            [N.J.S.A. 40A:10-21.2 (emphasis added).]

The statute unambiguously provides where Tier IV contributions were included

in the parties' prior CNA, the Tier IV rate formed the starting point for the

negotiation of a new CNA. Consequently, the Tier IV rate was the "status quo"

for negotiating health care benefit contributions in the subsequent CNA. In

accordance with the unequivocal language in N.J.S.A. 40A:10-21.2, the status

quo, meaning the Tier IV rates, applied for calculating the health care benefit

contributions withheld from the PBA members' paychecks.

      During the pendency of the PBA's appeal, our Supreme Court issued its

decision in In re Ridgefield Park Board of Education, 244 N.J. 1 (2020). The

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Supreme Court's decision in that case supports the Arbitrator's award and the

Chancery judge's denial of the PBA's motion to vacate that award.

      The CNA at issue in Ridgefield required the employees pay "1.5 [percent]

or the minimum set forth by statute, regulation or code." 244 N.J. at 9. In that

case, the employees argued because the Tier IV rates were achieved in the first

year of the CNA, they were only obligated to pay the 1.5 percent minimum rate,

notwithstanding there were several years remaining on the existing CNA. Id. at

9-10. The employer argued the employees were required to pay the full Tier IV

rates for the remainder of the CNA's term and any reduction could only be

negotiated in a subsequent agreement. Id. at 10.

      In analyzing the statute, the Court wrote, "The Legislature . . . made the

achieved Tier 4 contribution level the status quo for purposes of negotiating

contributions for the successor contract." Id. at 20. Relying on the legislative

history of Chapter 78, the Court held:

            The gubernatorial and legislative initiatives that led to
            Chapter 78 and the legislative history of the statute
            itself thus confirm the Legislature's intent. The
            Legislature clearly viewed the increasing costs of
            employee health care to be among the State's most
            serious fiscal challenges, destined to worsen absent
            significant reform. The Legislature did not enact
            Chapter 78 to achieve only a transient increase in
            employees' health insurance premium contributions,
            followed by an immediate reversion to pre-statute

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            contribution rates as soon as employees had contributed
            at the Tier 4 level for a year. Instead, it envisioned that
            Chapter 78 would increase employee health insurance
            premium contributions over the long term.

            [Id. at 23.]

The Court agreed with the employer that "once achieved, Tier 4 contribution

levels are to remain in effect unless and until the parties negotiate lower health

insurance premium contribution rates in the next CNA." Id. at 20-23.

      Based on the New Jersey Supreme Court's decision in In re Ridgefield

Park Board of Education, we are satisfied the full Tier IV rates were the status

quo for the successor 2018-2020 CNA because the Tier IV rates were included

in the prior 2015-2017 CNA. To reduce the PBA members' contribution rate for

health care benefits, the PBA was required to negotiate such a change. Because

no modification was agreed upon or implemented, the Tier IV rates remained in

effect for the 2018-2020 CNA.

      Based on the foregoing analysis, we discern no basis to disturb the

Chancery court's decision affirming the Arbitrator's award.

      Affirmed.

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