Court Opinion

ID: 7326474
Source: CourtListenerOpinion
Date Created: 2022-07-25 21:59:16.850086+00
Date Added: 2024-06-11T16:20:03.883210
License: Public Domain

LaVECCHIA, J.,
dissenting.
The majority asserts, in sweeping language, that the common-law rule of “no work, no pay” no longer serves any appropriate governmental purpose and should be interred. It pronounces the rule to be an “anachronism,” and “harsh and unnecessary,” and finds, in light of those pronouncements, that plaintiffs here are entitled to receive back pay for lost opportunities to work overtime as awarded by the arbitrator appointed pursuant to the dispute-resolution provisions of the collective-negotiations agreement.
I respectfully dissent from the majority’s decision. My disagreement with the decision is on several levels. First, I disagree with the majority’s conclusion that the no work, no pay rule lacks continuing vitality. In my view, the rule rests on a solid analytical *541foundation, serves important governmental interests, and should continue to be respected. The rule provides an important protection for the public fisc that should not be cast aside lightly.
Moreover, I do not believe it was necessary for the majority to reach the question whether the common-law rule of no work, no pay should continue. In its zest to abrogate the common-law doctrine of no work, no pay, the majority mischaracterizes this Court’s decision in Communications Workers of America v. Monmouth County Board of Social Services, 96 N.J. 442, 476 A.2d 777 (1984). Communications Workers involved a similar back-pay dispute in the context of an arbitrator’s award for breach of a public-sector-eollective-negotiations agreement. There are no meaningful distinctions between the operative provisions of the current agreement and the one before the Court in Communications Workers. Because the agreement in this case obviously was signed long after the 1984 Communications Workers decision, the parties must be deemed to have made their bargain in light of-and consistent with-the teaching of that decision. The principles espoused in Communications Workers, therefore, should guide us in the resolution of this case. Although the majority cites to Communications Workers, it does not follow that decision. The issues in this case, when properly analyzed in light of Communications Workers, can yield but one conclusion: the arbitrator’s award of back pay exceeded his authority under the collective-negotiations agreement, and the overtime award should be vacated.
I. Arbitrator’s Authority to Award Back Pay A.
Communications Workers did not reach the penultimate issue whether the no work, no pay rule should be abrogated because it recognized the necessity to address first the basic issue presented in all contract disputes: What had the parties agreed to? Justice Schreiber recognized that unless one could conclude that the parties to the contract had delegated to the arbitrator the power to award back pay as a remedy for a delay in a promotion, there *542was no need to reach the further question whether it was lawful for the parties to so agree. Id. at 455, 476 A.2d 777. After analyzing the contractual language, Justice Schreiber concluded that the parties in that case had not bestowed on the arbitrator the power to award back pay for the specific contract violation there involved. Id. at 452, 476 A.2d 777. An analysis of the collective-negotiations agreement at issue here yields the same conclusion.
The arbitrator’s authority to resolve a given dispute or to provide a specific remedy for a breach depends, in the first instance, on whether the parties to the agreement have delegated that power to him. Id. at 448, 476 A.2d 777; Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 217, 405 A.2d 393 (1979); Ridgefield Park Educ. Ass’n v. Ridgefield Park Bd. of Educ., 78 N.J. 144, 155, 393 A.2d 278 (1978). The starting point for our analysis, therefore, is the language of the parties’ agreement.
The arbitration clause in the agreement provides:
c. The arbitrator shall not have the power to add to, subtract from, or modify the provisions of this Contract or laws of the State, or any policy of the State or subdivision thereof or to determine any dispute involving the exercise of a management function which is within the authority of the State as set forth in Article II, Management Eights, and shall confine his [or her] decision solely to the interpretation and application of this Contract.... The arbitrator may prescribe an appropriate back-pay remedy when he finds a violation of this Contract, provided such remedy is permitted by law and is consistent with the terms of this Contract. If the arbitrator renders a back pay award, then in accordance with State policy, appropriate benefits will be restored to the employee for the period of time covered by the back pay award.
[Emphasis added.]
There are two significant aspects to that clause. First, it limits the arbitrator’s power to the four corners of the agreement. Only disputes concerning rights traceable to the agreement are arbitrable, and the arbitrator has the power to provide remedies only to the extent the parties lawfully have agreed to permit those remedies for the pertinent contract violation. The second significant aspect of the language of the arbitration clause is that it allows back pay as an appropriate remedy for a contract violation, “provided such remedy is permitted by law.” (Emphasis added).
*543The arbitration clause here is indistinguishable from the arbitration clause before the Court in Communications Workers. That clause was described by the Court:
Under the terms of the negotiated agreement in this case, unresolved contract grievances — grievances involving alleged ‘mis — interpretation or mis-applieation of the terms’ of the agreement-are subject to arbitration, and noncontractual grievances generally are not. The agreement also provides that ‘[t]he arbitrator shall not have the power to add to, subtract from, or modify the provisions of this Agreement and shall confine his * * * decision solely to the interpretation and application of this Agreement.’ Moreover, it states that ‘he shall confine [himself] to the precise issue for arbitration and shall have no authority to determine any other issues not so submitted to him * * *, nor shall [he] submit observations or declarations of opinions which are not essential in reaching the determination.’
ICommwnications Workers, supra, 96 N.J. at 449, 476 A.2d 777 (footnote omitted).]
Further, Justice Schreiber discussed
specific language explicitly circumscribing the arbitrator’s authority with respect to back-pay awards. The agreement provides that the arbitrator may ‘prescribe an appropriate back pay remedy’ only when there is a violation of the agreement, and ‘provided such remedy is permitted by law and is consistent with the terms of [the] Agreement, except that [he] may not make an award which exceeds the Welfare Board’s authority.’
Ud. at 451, 476 A.2d 777.]
The contract language reviewed in Communications Workers clearly provided that the terms of the negotiated agreement, and the details of the law, set specific boundaries on the arbitrator’s substantive authority to make back-pay awards.
Both the words of empowerment of the arbitrator, and the language limiting the authority of the arbitrator, are substantively identical in this case. As Justice Schreiber pointed out in Communications Workers, the form of arbitration clause that limits the arbitrator’s authority to resolving disputes arising out of the terms of the agreement and denying him the authority to modify it, represents a “narrow” delegation of authority, rather than a “broad” one. Id. at 449, 476 A.2d 777. As a consequence, only disputes involving rights traceable to the agreement are arbitrable, and “it is also presumed that [the parties] intended that their dispute be resolved in accordance with the law.” Id. at 450, 476 A.2d 777. Furthermore, “[t]he parties in a public employment *544case cannot clothe the arbitrator with unbridled discretion, ‘for public policy demands that inherent in the arbitrator’s guidelines are the public interest, welfare and other pertinent statutory criteria.’ ” Id. at 450-51, 476 A.2d 777 (quoting Kearny PBA Local # 21, supra, 81 N.J. at 217, 405 A.2d 393). Nor can a public entity bestow power on an arbitrator that is beyond that delegated to it. See State v. State Supervisory Employees Ass’n, 78 N.J. 54, 79, 393 A.2d 233 (1978) (stating that “negotiated agreement with respect to matters beyond the lawful authority of the public employer is impermissible”).
Thus, as in Communications Workers, our task in this case, involving a substantively identical arbitration and back-pay clause, is to determine whether the agreement envisioned that back pay was to be a permitted remedy for lost overtime opportunities, and whether that is a remedy “permitted by law.” The Communications Workers decision instructs us how to approach those interpretive issues. First, one must look to the language of the agreement to ascertain whether its terms “expressly provide for back pay” for the alleged violation. Communications Workers, supra, 96 N.J. at 451, 476 A.2d 777. In Communications Workers, Justice Schreiber found that the text of the agreement provided no evidence that the parties intended that back pay should be awarded for failure to promote, because it “provided by its terms for an increase in salary only from the date that an employee is actually promoted.” Id. at 451-52, 476 A.2d 777. The arbitrator, therefore, was not authorized under the agreement to provide back pay as a remedy for failure to promote.
The contract here similarly provides for “overtime hours accrued in excess of the normal hours of the established work week. These compensation credits shall be taken in compensatory time or in cash.” As was the case in Communications Workers where the language spoke in terms of an increase from the date of promotion, the language here bespeaks overtime compensation for overtime worked. There is no reference to back pay as a remedy *545for lost overtime opportunity, and nothing to indicate that that is what the parties intended.
The failure to tie the provision of back pay as a remedy to a specific violation cannot be explained as an oversight. The contract at issue here was negotiated well after the Court’s unanimous decision in Communications Workers, and the parties were on notice about how this Court had construed the language of the identical arbitration and back-pay provisions. Nonetheless, the parties elected to insert into their agreement the same provision that this Court had concluded in Communications Workers did not vest the arbitrator with the power to award back pay. They knew, therefore, that they had to tie the allowance of back pay to the specific violation to allow the arbitrator to provide that remedy. They did not do so, and “the arbitrator had no authority under the negotiated agreement to award back pay under these circumstances.” Id. at 452, 476 A.2d 777. Only one construction of the contract is possible: the parties did not intend to vest the arbitrator with power to order back pay for lost overtime opportunities.
The majority attempts to circumvent Communications Workers through circuitous reasoning. The majority cites to the principle that courts should defer to an arbitrator when his decision is “reasonably debatable” as support for its conclusion. The presumption, however, cannot carry the day here. The arbitrator’s decision is bottomed exclusively on his interpretation of the arbitration clause of the contract to conclude that the parties intended a back-pay remedy. That arbitration clause is identical to the clause in Communications Workers that this Court said is narrow and does not itself confer a back-pay remedy. We held in that case that the parties must indicate in a separate provision that they intend a back-pay remedy for a specific contract violation.
The majority next advances its own newly fashioned reason for why the overtime clause supports the conclusion that the parties intended to award back pay for lost overtime opportunities. It asserts that the contract’s reference to overtime hours “accrued” *546in the overtime section demonstrates “that the parties did not intend to preclude back pay awards for overtime violations by imposing a prerequisite of actual work under the overtime provisions.” Ante at 519, 780 A.2d at 534. The majority, however, does not explain why it is that given the significance that it attributes to the word “accrued,” the parties never advanced that argument before the arbitrator, the Appellate Division, or this Court. Nor did the arbitrator make any finding based on the majority’s interpretive theory. Nothing appears in the record to support the majority’s strained reading of the term “accrued” found in the overtime clause, or suggests that the parties intended that the term “accrued” in this contract meant what the majority now says it means. Indeed, since at that time the no work, no pay doctrine retained its vitality in all instances except where legislative exceptions had been created (and none existed for lost overtime opportunities), the majority’s argument that the parties believed they were authorizing backpay penalties through the term “accrued” lacks credibility.
In sum, the majority cannot resort to the familiar refrain that a court must defer to an arbitrator’s finding if the finding is “reasonably debatable” because the arbitrator never made the finding relied on by the majority to circumvent our prior holding in Communications Workers, namely that the overtime provision’s use of the term “accrued” signified an intention by the parties to provide a back-pay remedy. The arbitrator found instead that the arbitration provision’s language signified the parties’ intent to provide a back-pay remedy generally for contract violations. Thus, on the question whether the parties intended here to provide a back-pay remedy for lost overtime opportunity, the arbitrator’s ruling is not entitled to any deference. It flies in the face of the earlier specific holding of this Court that an identical arbitration clause did not constitute itself an authorization to award back pay; other specific evidence of express intent by both parties to provide a monetary remedy for a specific violation of contract provisions was required. Communications Workers, supra, 96 N.J. at 452, 476 A.2d 777.
*547B.
Plaintiffs claim for back pay in this case fails for yet another reason. The contract limits the power to prescribe back pay to circumstances where the remedy is “permitted by law.” In my opinion, in order to satisfy that requirement, there must be affirmative legislative authorization to the Executive to incur the liability of a back-pay remedy for the specific violation. I know of none, and the majority cannot cite to one. That prerequisite is not met by a conclusion that the remedy is not prohibited by law, but that seems to be the premise of the majority’s decision.
Because there does not appear to be any statute in effect that can be read sensibly or reasonably to permit a back-pay award, we cannot construe the contract as bestowing on the arbitrator the authority to award back pay for the alleged violations. There must be authority for the State to make such a concession. A public entity possesses only such authority as is delegated to it by the Legislature either expressly or by fair implication. Silverman v. Berkson, 141 N.J. 412, 416-17, 661 A.2d 1266 (1995) (“Government agencies have only those powers the Legislature confers on them.”); General Assembly v. Byrne, 90 N.J. 376, 393, 448 A.2d 438 (1982) (“[I]n our system of government, the Legislature and not the Executive must make the law. Administrative agency power derives solely from a grant of authority by the Legislature.”). The authority to agree to the liability of back pay as a contractual remedy ultimately must come from the Legislature. Executive agencies have the power to bind the State only where there has been a lawful delegation of authority to do so. If there is no authority to act, no enforceable commitment has been made. Allen v. Fauver, 167 N.J. 69, 77, 768 A.2d 1055 (2001); see also Walsh v. State, 147 N.J. 595, 689 A.2d 131 (1997), rev’g on dissent, 290 N.J.Super. 1, 13-17, 674 A.2d 988 (App.Div.1996) (Skillman, J.A.D., dissenting) (holding that contract implied in fact not enforceable if beyond the legal authority of executive branch official purporting to make promise). The abolition of the doctrine of no work, no pay cannot supply that authority. The abolition of that doctrine merely removes a common-law prohibition that hereto*548fore existed. It does not represent an affirmative grant of power authorizing a State entity to agree to back pay for lost overtime opportunities.
The majority lastly responds to this dissent with an argument that the Commissioner of Corrections, or indeed any hiring authority, has implicit power to agree to pay “back pay” for lost overtime opportunities. The majority’s implicit-authority analysis is frightening in its potential reach, and it is flawed analytically. The search here is for evidence of authorization with respect to liability for back pay for lost overtime opportunity. There is none. There simply is no statutory authorization to incur liability for a back-pay penalty for faulty compliance with the process by which overtime is meted out. This is not a question of compensation for overtime earned, for back pay is not being awarded for work performed. It is a penalty for erroneous noncompliance with rotational overtime and theoretically would require double overtime payment anytime the Department of Corrections made a mistake in the order in which union workers are called for overtime service.
The majority points to no authorization nor can it reasonably find authorization implicit in the constitutional provision concerning collective negotiation or in the statute that authorizes the Commissioner of Corrections to hire employees. Ante at 515-16, 780 A.2d at 531-32. In its zeal to rid the State of the “unfairness” of not paying for work not performed, the majority has overstated the Executive Branch’s authority to bind the State to monetary penalties for public employees so long as those penalties arise in a collective negotiations agreement. The contract here had no agreement on back-pay liability for lost overtime opportunities, and even if there was such an agreement in the language of this contract, the Commissioner did not have authority to bind the State to that liability.
C.
For those reasons, I conclude that the arbitrator exceeded his authority in awarding back pay in this case and the arbitration *549award should be vacated. Whether one is of the view that the common-law doctrine of no work, no pay should continue, or not, plaintiffs cannot prevail on their contractual claim in any event. On the question whether the common-law doctrine of no work, no pay should be abrogated, however, I also disagree with the majority.
II. No work, no pay
The majority today abrogates the longstanding common-law doctrine of no work, no pay. It pronounces the doctrine to be outmoded. The majority relies heavily on legislative actions over the years creating exceptions to that doctrine as support for its conclusion. That reference to legislative action, however, provides no support to the majority, for the legislative exceptions to that doctrine have been carefully limited and, in this context, represent legislative acquiescence to the doctrine. Each time the Legislature chose to carve another thin slice from the doctrine’s application, its failure to abrogate the doctrine in its entirety constitutes a reaffirmation of its continued vitality as well as its importance in protecting taxpayer dollars. The Legislature sought only to ameliorate harsh results that sometimes attend the application of the doctrine, not undercut it altogether. Were the doctrine of no work, no pay of legislative origin, the majority’s approach would quickly be dismissed. Implied repealers are uniformly disfavored. Township of Mahwah v. Bergen County Bd. of Taxation, 98 N.J. 268, 281, 486 A.2d 818, cert. denied, 471 U.S. 1136, 105 S.Ct. 2677, 86 L.Ed.2d 696 (1985); Brewer v. Porch, 53 N.J. 167, 173, 249 A.2d 388 (1969); Swede v. City of Clifton, 22 N.J. 303, 317, 125 A.2d 865 (1956). But reduced to its essence, that is precisely the effect of the majority’s conclusion. The legislative actions over time provide no support to the majority and indeed counsel the opposite result.
The Legislature carefully has carved out instances where serious public-policy concerns militate to create a need for public dollars to be paid twice for work performed. The majority cites extensively to them, ante at 544-46, 780 A.2d at 535-39, but none *550pertain here. There is no legislative authorization to the Executive to incur liability requiring double payment for lost overtime opportunities because of errors in implementing negotiated procedures for overtime rotational assignment. It is noteworthy that even PERC’s authority to provide a back-pay remedy for an unfair labor practice had to be grounded in statute. Galloway Township Bd. of Educ. v. Galloway Township Ass’n of Educ. Secretaries, 78 N.J. 1, 10, 15-16, 393 A.2d 207 (1978).
The no work, no pay doctrine remains a valid and necessary protection for our public fisc. The Court is gravely mistaken in casting it aside. I would not abrogate that valid doctrine. I perceive no need to reject sound common law that protects tax dollars simply to create a remedy here. And I certainly see no reason to address the question of abrogation of that doctrine because the parties’ contract fails to authorize a back-pay remedy for lost overtime opportunities. Accordingly, I respectfully dissent.
Justice COLEMAN join in this opinion.
For reversal and remandment — Chief Justice PORITZ and Justices STEIN, LONG, and ZAZZALI-A
Concurring in part: dissenting in part — Justice VERNIERO — 1.
For affirmance — Justices COLEMAN and LaVECCHIA — 2.