NEW JERSEY EDUCATION ASSOCIATION VS. BOARD OF TRUSTEES OF THE TEACHERS PENSION AND ANNUITY FUND(TEACHERS PENSION AND ANNUITY FUND) ( 2017 )

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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3158-15T4
NEW JERSEY EDUCATION ASSOCIATION,
Appellant,
v.
BOARD OF TRUSTEES OF THE TEACHERS'
PENSION AND ANNUITY FUND,
Respondent.
_________________________________________________________
Submitted June 26, 2017 – Decided July 13, 2017
Before Judges Fisher and Fasciale.
On appeal from the Administrative Action of
the Board of Trustees of the Teachers' Pension
and Annuity Fund in adopting N.J.A.C. 17:3-
5.5 and N.J.A.C. 17:3-6.1.
Zazzali, Fagella, Nowak, Kleinbaum & Friedman,
attorneys for appellant (Jason E. Sokolowski
and Richard A. Friedman, of counsel; Mr.
Sokolowski, Mr. Friedman, and Kaitlyn E.
Dunphy, on the brief).
Christopher S. Porrino, Attorney General,
attorney for respondent (Melissa H. Raksa,
Assistant Attorney General, of counsel; Amy
Chung, Deputy Attorney General, on the brief).
PER CURIAM
Appellant New Jersey Education Association (NJEA) seeks our
review of final agency action taken by respondent Board of
Trustees, Teachers' Pension and Annuity Fund (the Board)1 in
adopting, on November 16, 2015, amendments to N.J.A.C. 17:3-5.5,
and N.J.A.C. 17:3-6.1.
Before turning to the specifics of this appeal, we first take
note of our standard of review, which allows us to consider whether
an agency's interpretation of a statutory scheme is permissible
in light of the legislative limits and intended goals, In re
Adoption of N.J.A.C. 7:26B, 128 N.J. 442, 450 (1992), but with the
understanding that courts must start "with a presumption," N.J.
Ass'n of Sch. Adm'rs v. Schundler, 211 N.J. 535, 548 (2012), that
properly-adopted regulations "are valid and reasonable," N.J. Soc.
for Prevention of Cruelty to Animals v. N.J. Dep't of Agriculture,
196 N.J. 366, 385 (2008). That is, we must "give substantial
deference" to an agency's interpretation of "a statute that the
agency is charged with enforcing" so long as its interpretation
"is not plainly unreasonable." Matturri v. Bd. of Trs., Judicial
Ret. Sys., 173 N.J. 368, 381-82 (2002). Or, stated another way, a
1
The Board possesses "general responsibility for the proper
operation" of the Teacher's Pension and Annuity Fund (TPAF) and
for the establishment of "rules and regulations for the
administration and transaction" of its business and for the control
of the TPAF. N.J.S.A. 18A:66-56(a)(1).
2 A-3158-15T4
legislative delegation of authority to an agency "is to be
liberally construed in order to enable the agency to accomplish
its statutory responsibilities," and "courts should readily imply
such incidental powers as are necessary to effectuate the
legislative intent." N.J. Guild of Hearing Aid Dispensers v. Long,
75 N.J. 544, 562 (1978); see also N.J. State League of
Municipalities v. Dep't of Cmty. Affairs, 158 N.J. 211, 223 (1999).
I
With these principles in mind, we turn to NJEA's arguments
about the amendments to N.J.A.C. 17:3-5.5, and, specifically, this
new regulation's manner of dealing with maternity leave.
Initially, the following was the proposed amendment to part of
N.J.A.C. 17:3-5.5(a)(4):
iii. Maternity leave is considered personal
illness. Absent physician certification,
three months is the maximum period of purchase
for maternity leave. A certification from a
physician that a member was disabled due to
pregnancy and resulted in a disability for the
period in excess of three months is required
for maternity leave in excess of three months.
The birth of a child constitutes the start of
child care leave of absence immediately
following maternity[.]
After considering the NJEA's comments about this proposal, the
Board adopted a final version that deleted the first sentence
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("Maternity leave is considered personal illness") and replaced
that one sentence with the following two sentences:
Maternity leave may consist of a personal
illness component and a personal reasons
component, for childcare. Members who apply
to purchase any period of maternity leave as
a personal illness, must provide certification
from their physician, verifying that the
member was disabled during the requested
purchase period, due to pregnancy or
childbirth.
The revised amendment further altered subsection iii by inserting
the following emphasized words in the second sentence of the
earlier proposal: "Absent physician certification, three months
is the maximum allowable period of purchase for maternity leave
for personal reasons." The revised amendment also deleted the
remainder of the earlier proposal. In short, the adopted version
of subsection iii, in full, is as follows:
Maternity leave may consist of a personal
illness component and a personal reasons
component, for childcare. Members who apply
to purchase any period of maternity leave as
a personal illness, must provide certification
from their physician, verifying that the
member was disabled during the requested
purchase period, due to pregnancy or
childbirth. Absent physician certification,
three months is the maximum allowable period
of purchase for maternity leave for personal
reasons.
The NJEA challenges this new regulation by arguing it is
"phrased in a manner that does not make plain that it does not
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abridge the legal rights afforded to TPAF members in N.J.S.A.
18A:66-8."2 NJEA's stated concern is that, as amended, the
regulation "could be read to narrow a statutory right" and,
therefore, "should be declared invalid by this court" (emphasis
added). The very way NJEA phrases its argument demonstrates its
lack of merit. NJEA does not contend that the regulation actually
stands in conflict with N.J.S.A. 18A:66-8(b), only that the
regulation, in its view, doesn't clearly or plainly avoid a
conflict with the statute.
These arguments are purely academic because the NJEA only
concerns itself with one possible narrow reading of the new
regulation. Even if we were to entertain these hypothetical
concerns about how the regulation might be interpreted, we view
N.J.A.C. 17:3-5.5(a)(4) as being in accord with the statute. The
particular maternity leave provision that concerns the NJEA –
subsection iii – does not, as the Board asserts in its responding
brief, "articulate any such narrow reading." As the Board contends,
the section in question was "clarified [so] that '[m]aternity
leave may consist of' both a personal illness leave and a personal
2
In pertinent part, this statute permits a teacher the right to
purchase up to three months of service credit for an unpaid leave
of absence, N.J.S.A. 18A:66-8(b)(1), and up to two years of service
credit for an unpaid leave that is due to personal illness,
N.J.S.A. 18A:66-8(b)(2).
5 A-3158-15T4
reason leave (for childcare). . . . Nothing could be clearer, and
no statutory right was narrowed or curtailed." We agree.
II
NJEA's appeal also concerns a number of facets of the newly-
adopted amendment to N.J.A.C. 17:3-6.1, which deals with the
process for applying for various types of retirement benefits.
NJEA argues that the amendments exceed the Board's authority or
limit TPAF members' existing statutory rights in four ways: (1)
by failing to include a provision that allows a member to apply
for an extension of time; (2) through the inclusion of provisions
which, in NJEA's words, "contradict[] the statutory requirements
for an accidental disability retirement"; (3) by adding to the
statutory requirements an additional requirement that the TPAF
member separate from service in order to qualify for a disability
pension; and (4) by precluding an application for retirement while
a disability application is pending. Keeping in mind the standard
of review, which permits our intervention only when the adopted
regulation is plainly unreasonable or outside the scope of the
Board's delegated authority, we find insufficient merit in NJEA's
arguments to warrant further discussion in a written opinion. R.
2:11-3(e)(1)(E). We add only the following few comments.
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As to the NJEA's first concern, the Board has not taken the
position that applications for extensions are barred by amended
N.J.A.C. 17:3-6.1(b). Instead, the Board recognizes and embraces
its "inherent power," in "the absence of legislative restriction,"
"to reopen or to modify and to rehear orders previously entered
by it." Duvin v. State, 76 N.J. 203, 207 (1978). The failure to
incorporate an express right to seek an extension was not
unreasonable.
The second alleged cause for concern – that N.J.A.C. 17:3-
6.1(f)(1) is perceived by NJEA as adding an element to those which
a TPAF member must prove to obtain accidental disability retirement
benefits – is belied by the Board's intention, revealed by the
amended regulation, to ensure that such benefits are not awarded
on the basis of preexisting conditions alone or on the basis of
the combination of work effort and preexisting conditions, and to
ensure that the alleged traumatic event directly caused the
disability upon which the application is based. See 47 N.J.R.
2876(a). Far from unreasonable, the amendment conforms to
Richardson v. Bd. of Trs., Police and Firemen's Ret. Sys., 192
N.J. 189 (2007), as NJEA recognizes.
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The NJEA's third concern involves N.J.A.C. 17:3-6.1(f)(3),3
and the NJEA's claim that this regulation "improperly adds a[]
requirement for the receipt of a disability pension," i.e., that
the applicant must discontinue service due to the disability upon
which the application is based. We reject this. When harmonized,
N.J.S.A. 18A:66-39 and N.J.S.A. 18A:66-40(a) render a TPAF member
ineligible for a disability retirement when that member's
employment has been terminated for a non-disability reason;
moreover, NJEA has not demonstrated how the existing legislation
could render a TPAF member, who terminated employment for a non-
disability reason, eligible for a disability retirement. The
amended regulation is not inconsistent with legislative directives
and constitutes a reasonable approach to such circumstances.
3
As amended, this regulation states:
Termination of employment, voluntary or
involuntary, that was caused by any reason
other than the claimed disability disqualifies
a member from disability retirement. A member
whose employment ended after his or her
employer initiated disciplinary action, or who
was the subject of criminal or administrative
charges or party to a settlement resulting in
resignation or termination, is considered to
have separated from service as a result of the
employer action, charges, or settlement, and
not due to a disability, unless the action,
charges, or settlement is shown to be a result
of the disability.
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Lastly, the NJEA contends that N.J.A.C. 17:3-6.1(g)4 is
inconsistent with the statutory framework because it prevents a
TPAF member from applying for retirement benefits while the member
has a disability retirement application pending. Far from
unreasonable, this regulation provides a common sense approach to
those circumstances. A TPAF member is entitled to only one type
of retirement; accordingly, it is appropriate for the Board to
limit that member to one application at a time. We discern no harm
to that limitation, since N.J.A.C. 17:3-6.1(h) permits a TPAF
member who has been denied a disability retirement, but also
qualifies for a service-based retirement, to apply within thirty
days of denial of the former for a service-based retirement if so
eligible.5
4
This regulation states:
A member filing for an accidental or ordinary
disability retirement shall not file a
separate application for retirement,
including one based on any other allegedly-
disabling condition, while the original
disability application is pending. A separate
application can be filed only for a date
subsequent to withdrawal of the previous
application.
5
N.J.A.C. 17:3-6.1(h) states:
If a disability retirement application is
denied by the Board and the applicant
qualifies for any other retirement benefit,
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Affirmed.
the applicant will be required to submit a
separate application for retirement. If the
applicant submits the separate application for
retirement within 30 days of the Board's
decision, the applicant may retain the
retirement date designated on the disability
requirement application. If a member is denied
an accidental disability retirement, but
qualifies for an ordinary disability
retirement based on the accidental-disability
application, the ordinary disability
retirement will be granted, and no additional
application will be required.
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