Court Opinion

ID: 7328879
Source: CourtListenerOpinion
Date Created: 2022-07-25 22:05:39.713618+00
Date Added: 2024-06-11T16:20:07.629953
License: Public Domain

Justice PATTERSON,
dissenting.
The majority affirms the Appellate Division panel’s judgment upholding the arbitration award as a “reasonably debatable” construction of the parties’ collectively bargained agreement (CBA). Ante at 193-94, 61 A.3d at 943-44. It endorses the arbitrator’s mandate that the $5.00 increase in employee co-payment per doctor visit for participants in the State Health Benefits Program (SHBP), required by N.J.S.A. 52:14-17.29(0, should be paid by the Borough of East Rutherford (Borough), not by the covered employees as the statute envisions. See ante at 206-08, 61 A.3d at 951-52. Because the CBA subordinates the parties’ agreement to governing law, because the 2007 amendments to the SHBP clearly reflect the Legislature’s determination that local employees participating in the SHBP assume a greater share of their healthcare costs in the form of an increased co-payment, and because the 2007 amendments furthered an important legislative policy, I cannot accept the arbitrator’s decision as a “reasonably debatable” interpretation of the CBA. I consider the award to directly contravene the terms of the CBA and the letter and policy goals of N.J.S.A. 52:14-17.29(C). Accordingly, I would reverse the determination of the Appellate Division, and I respectfully dissent.
The majority relies upon the deferential “reasonably debatable” standard by which New Jersey appellate courts review public-sector arbitration awards. Ante at 207-08, 61 A.3d at 952. It notes that it is not for this Court to “ ‘substitute its own judgment for that of the arbitrator, regardless of the court’s view of the correctness of the arbitrator’s position.’ ” Ante at 201-02, 61 A.3d at 948-49 (quoting Middletown Twp. PBA Local 124 v. Twp. of Middletown, 193 N.J. 1, 11, 935 A.2d 516 (2007)). That principle is, indeed, firmly entrenched in our law. Policemen’s Benevolent Ass’n v. City of Trenton, 205 N.J. 422, 432-33, 16 A.3d 322 (2011); *211Linden Bd. of Educ. v. Linden Educ. Ass’n ex rel. Mizichko, 202 N.J. 268, 276-77, 997 A.2d 185 (2010); N.J. Tpk. Auth. v. Local 196, I.F.P.T.E., 190 N.J. 283, 292-94, 920 A.2d 88 (2007). It is, however, important to recognize that this case does not turn on a nuanced exploration of past practice or contract interpretation as to which a seasoned arbitrator, specializing in labor disputes, has decades of experience. Instead, the question before the Court is an issue of law — the construction and application of N.J.S.A. 52:14-17.29(0). The legal determinations of our trial judges, who are constitutionally charged with the responsibility to interpret and apply our laws, are reviewed de novo on appeal. City of Atl. City v. Trapos, 201 N.J. 447, 463, 992 A.2d 762 (2010); Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83, 997 A.2d 954 (2010); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378, 658 A.2d 1230 (1995). I respectfully submit that an arbitration award premised upon a legal conclusion, such as the award reviewed today, should likewise not be sustained unless the appellate court determines that the arbitrator has correctly interpreted the law. See Weiss v. Carpenter, Bennett & Morrissey, 143 N.J. 420, 443, 672 A2.d 1132 (1996) (“arbitrators cannot be permitted to authorize litigants to violate either the law or those public-policy principles that government has established by statute, regulation or otherwise for the protection of the public”).
This Court has recognized that the “reasonably debatable” standard has meaningful parameters; if an award implicates public policy concerns, this Court has required “careful scrutiny of the award, in the context of the underlying public policy, to verify that the interests and objectives to be served by the public policy are not frustrated and thwarted by the arbitral award.” Ibid.; see also Linden, supra, 202 N.J. at 278-79, 997 A.2d 185; Cnty. Coll. of Morris Staff Ass’n v. Cnty. Coll. of Morris, 100 N.J. 383, 393, 495 A.2d 865 (1985); Commc’ns Workers of Am., Local 1087 v. Monmouth Cnty. Bd. of Soc. Servs., 96 N.J. 442, 451-53, 476 A.2d 777 (1984).
*212N.J.S.A. 2A:24-8(d) authorizes the vacation of an arbitration award if the arbitrator exceeds his or her authority. Commc’ns Workers, supra, 96 N.J. at 453, 476 A.2d 777. The statutory standard entails a two-part inquiry: (1) whether the agreement authorized the award, and (2) whether the arbitrator’s action is consistent with applicable law. See id. at 451-53, 476 A.2d 777. In addition to the statutory grounds, an arbitration award may be vacated “ ‘if it is contrary to existing law or public policy.’ ” Ante at 202, 61 A.3d at 949 (quoting Middletown Twp., supra, 193 N.J. at 11, 935 A.2d 516); accord Borough of Glassboro v. Fraternal Order of Police, Lodge No. 108, 197 N.J. 1, 9-10, 960 A.2d 735 (2008); Weiss, supra, 143 N.J. at 429-30, 672 A.2d 1132.
Application of those standards to this case clearly supports the trial court’s decision vacating the arbitration award. In the CBA itself, the parties acknowledged that their agreement was subject to governing law. Article 5, Section 5.01, entitled “Existing Law,” provided that “[t]he provisions of this Agreement shall be subject to [and] subordinate to, and shall not annul or modify existing applicable provisions of State or Federal Laws.” Further, Article 7, Section 7.02 precluded the CBA from being construed “to deny or restrict the Borough of its rights, responsibilities and authority, under R.S. 11.40 and 40A, or any other national, state, country, or other applicable laws.” No provision of the CBA exempted the $5.00 co-payment per office visit from the impact of governing state law.1 Thus, the CBA expressly recognized that its provisions would be enforceable only to the extent to which they conformed to New Jersey statutory and case law.
Furthermore, the increased co-payment required of local, as well as State, public employees was a prominent feature of the 2007 SHBP amendments passed by the Legislature and signed into law by then-Governor Corzine. See N.J.S.A. 52:14-17.25 to - *21317.46a. Those amendments followed the 2006 publication of the Joint Legislative Committee on Public Employee Benefits Reform Final Report (Report), which stated that its “investigation of health benefits issues revealed a system plagued by the skyrocketing costs of health care.” J. Leg. Comm, on Pub. Emp. Benefits Reform, Final Report, 212th Leg., at 57 (N.J. Dec. 1, 2006). The Report recognized the importance of extending health benefits reform to local employees enrolled in the SHBP, noting that the Committee’s Benefits Review Task Force “urged that SHBP apply changes in benefits resulting from the State’s collective bargaining agreements to participating local employers, which include increasing managed care office visit and prescription co-pays.” Id. at 52.2 To that end, the Committee noted:
The Joint Committee believes that it is important that SHBP benefits changes negotiated by the State with its employees be applicable to employees of local employers not only to reduce administrative expenses for all through conformity but also to extend to those local employers the same cost savings enjoyed by the State. The Joint Committee believes that it is important to ensure consistency in health benefit coverage and cost for all public employees.
{Id. at 121-22.]
The statutory amendments to the SHBP substantially adopted the Joint Committee’s recommendations. The Legislature unambiguously prescribed a $10.00 co-payment as a component of a “successor plan” providing health benefits to participants in the SHBP.3 N.J.S.A. 52:14-17.29(0 provides in relevant part:
The contract or contracts purchased by the [New Jersey Public Employment Relations Commission] ... shall include the following provisions regarding reimbursements and payments:
*214(1) In the successor plan, the co-payment for doctor’s office visits shall be $10 per visit with a maximum out-of-pocket of $400 per individual and $1,000 per family for in-network services for each calendar year.
The higher co-payment amount required of State employees covered by the SHBP was identified by the Legislature as a critical cost-saving measure of the 2007 reforms:
[W]hile there are savings associated with the elimination of the Traditional Plan [for healthcare contracts] and the elimination of the gatekeeper in [the NJ PLUS healthcare plan], which has a much larger State employee enrollment, there are expected offsetting costs. For State employees, most of the medical plan cost savings known at this time will come from other plan changes (such as increases in office visit and emergency room co-pays). The primary source of State savings is, therefore, attributable to negotiated increases in office visit and prescription drug co-pays and employee cost-sharing.
[S. 3004 (Legis. Fiscal Estimate), 212th Leg. (N.J. July 9, 2007); Assemb. 5005 (Legis. Fiscal Estimate), 212th Leg. (N.J. July 9, 2007).]
Thus, the cost-saving benefits of the 2007 amendments to the SHBP were substantially premised upon the Legislature’s mandate that covered employees pay the increased co-payment prescribed by statute.
As the majority notes, it was not until 2010, in its comprehensive pension and healthcare benefits reform, L. 2010, c. 2, § 8, that the Legislature expressly directed that healthcare benefit changes, negotiated by the State, would apply to local employees participating in the SHBP in precisely the same manner as they would to State employees.4 Ante at 207-08, 61 A.3d at 952-53. However, even in the more limited 2007 health benefit reforms, the Legislature did not authorize local public employers and employees to agree upon a co-payment amount other than the statutory $10.00 figure in the collective bargaining process. In a provision in effect both before and after the 2007 amendments, the Legislature specifically identified two components of the SHBP that could be *215varied as the result of collective bargaining by local public employers and their employees, neither of them relevant here:
Notwithstanding the provisions of any other law to the contrary, the obligations of a participating employer other than the State to pay the premium or periodic charges for health benefits coverage provided under [N.J.S.A. 52:14-17.25 to - 17.46a] may be determined by means of a binding collective negotiations agreement.
[N.J.S.A. 52:14 — 17.38(a).]
The limitation of this provision to the employer’s “obligations ... to pay the premium or periodic charges for health benefits coverage,” ibid., which clearly excludes office visit co-payments, is significant for purposes of statutory construction. This Court traditionally applies the principle of “expressio unius est exclusio alterius — expression of one thing suggests the exclusion of another left unmentioned[.]” Brodsky v. Grinnell Haulers, Inc., 181 N.J. 102, 112, 853 A.2d 940 (2004). When the Legislature creates an exhaustive list, it is assumed to intend to exclude what is not enumerated unless it indicates by its language that the list or section is not meant to be exhaustive or exclusive. See Shapiro v. Essex Cnty. Bd. of Chosen Freeholders, 183 N.J.Super. 24, 26, 443 A.2d 219 (App.Div.), aff'd, 91 N.J. 430, 453 A.2d 158 (1982); Trautmann ex rel. Trautmann v. Christie, 418 N.J.Super. 559, 566-67, 15 A.3d 22 (App.Div.2011), aff'd, 211 N.J. 300, 48 A.3d 1005 (2012). No such caveat appears in N.J.S.A. 52:14-17.38(a). Had the Legislature intended to permit local public employers and their employees to agree upon a co-payment amount other than the $10.00 statutory co-payment through the collective bargaining process, it would have so stated. Instead, it prescribed that specific $10.00 amount, as a pivotal component of a successor plan, in N.J.S.A. 52:14 — 17.29(C).5
*216In short, there is ample evidence that the Legislature intended to increase participating local employees’ physician co-payments from $5.00 to $10.00 per visit, up to per-individual and per-family limits, without exception. In so doing, the Legislature sought to transfer a portion of the economic burden of public employee healthcare from the municipality and its taxpayers to the participating employee, and to promote uniformity in public employee healthcare policy.
For the Borough and the employees at issue, the arbitration award upheld today reverses that legislative initiative and violates a “clear mandate of public policy.” N.J. Tpk. Auth., supra, 190 N.J. at 294, 920 A.2d 88. Accordingly, I respectfully submit that the arbitration award was properly vacated by the trial court under N.J.S.A. 2A:24-8(d), on the grounds that it exceeded the arbitrator’s authority. Applying the first factor of the two-part standard set forth by this Court in Communications Workers, supra, 96 N.J. at 448, 476 A.2d 777, the arbitrator’s award was unauthorized by the parties’ CBA, which recognized in Article 5, Section 5.01, that even its express terms were subject to governing state law. Contravening Article 7, Section 7.02, the award deprives the Borough “of its rights, responsibilities and authority, under ... state, country or other applicable laws.” It thus violates the terms of the agreement itself.
Turning to the second prong of the Communications Workers test, applicable in the public employment setting, the arbitration award at issue here is inconsistent with applicable law. Commc’ns Workers, supra, 96 N.J. at 452, 476 A.2d 777. By compelling the Borough to pay the $5.00 increase in office visit co-payments, the award flouted the Legislature’s unambiguous direction that local .public employees participating in the SHBP be charged a co-payment for doctor’s office visits of “$10 per visit with a maximum out-of-pocket of $400 per individual and $1,000 per family for in-network services for each calendar year.” N.J.S.A. 52:14-17.29(C)(1). By virtue of the arbitrator’s award, confirmed by the majority in this case, the Legislature’s effort to reduce the munici*217pality’s public employee healthcare burden in this limited respect is effectively undone. In my view, under N.J.S.A. 2A:24~8(d) as construed by this Court in Communications Workers, the trial court properly vacated the arbitration award on the ground that it exceeded the arbitrator’s authority. Commc’ns Workers, supra, 96 N.J. at 451-53, 476 A.2d 777.
Finally, applying the public policy exception, also applicable to public employment arbitrations, the award in this case undermines the policy that prompted the Legislature’s reform. See Weiss, supra, 143 N.J. at 429-30, 672 A.2d 1132. It upends the Legislature’s effort to shift a portion of the cost of public employee healthcare from local government to covered public employees. Notwithstanding the Legislature’s expression of an important policy — to relieve the financial burden imposed on local governments — the arbitration award reimposes that burden upon the Borough and its taxpayers. As such, this case presents precisely the type of rare circumstance where this Court should reverse the arbitrator’s decision as contrary to clear mandates of public policy. See id. at 430, 672 A.2d 1132.
Accordingly, I would reverse the Appellate Division panel’s judgment reinstating the arbitration award, and I respectfully dissent.
For affirmance — Chief Justice RABNER and Justices LaVECCHIA, ALBIN and HOENS — 4.
For dissentment — Justice PATTERSON — 1.

 The $5.00 co-payment for physician office visits was not expressly set forth in any provision of the CBA. However, it was found by the arbitrator to be an existing benefit of employment within the meaning of Section 7.04. Ante at 200, 61 A.3d at 948.

 N.J.S.A. 52:14-17.34 provides that "[i]n order that the [SHBP Act] may be extended to include other public employees, participation by counties, municipalities, public agencies or organizations ... is hereby authorized."

 N.J.S.A. 52:14-17.26(0 defines a "successor plan" as “a State managed care plan that shall replace the traditional plan and that shall provide benefits as set forth in [N.J.S.A. 52:14-17.29] with provisions regarding reimbursements and payments as set forth in [N.J.S.A. 52:14-17.29(C) ]."

 In 2010, the Legislature added N.J.S.A. 52:14-17.36(b), providing in part that "[a]Il changes in the provision of health care benefits through the program that are included in collective negotiations agreements between the State and its employees entered into on or after the effective date of P.L.2010, c. 2 shall be made applicable by the commission to participating employers and their employees at the same time and in the same manner as to State employees."

 As the New Jersey School Boards Association noted in its analysis of the 2007 SHBP amendments, "the amount of deductibles and co-pays" was among the issues "preempted from local negotiations for participants in the State Plan." New Jersey School Boards Association, Controlling the Cost of Insurance, The Negotiations Advisor: Legislation Analysis, Winter 2009, at 6-7.