BERGEN COUNTY SHERIFF'S OFFICE AND COUNTY OF BERGEN VS. POLICEMEN'S BENEVOLENT ASSOCIATION (L-3627-16, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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 NOS. A-0485-16T2
A-0486-16T2
BERGEN COUNTY SHERIFF'S
OFFICE and COUNTY OF BERGEN,
Plaintiffs-Appellants,
v.
POLICEMEN'S BENEVOLENT
ASSOCIATION, LOCAL 49, BERGEN
COUNTY POLICE DEPARTMENT,
Defendants-Respondents.
_______________________________
Argued September 19, 2017 – Decided October 31, 2017
Before Judges Reisner, Hoffman, and Gilson.
On appeal from the Superior Court of New
Jersey, Law Division, Bergen County, Docket
No. L-3627-16.
John J. McCann argued the cause for appellant
Bergen County Sheriff's Office (C. Elston &
Associates, LLC, attorneys; Mr. McCann, of
counsel and on the briefs; Cathlene Y. Banker,
on the briefs).
Frank P. Kapusinski, Assistant County Counsel,
argued the cause for appellant County of
Bergen (Julien X. Neals, County Counsel,
attorney; Mr. Kapusinski, of counsel and on
the briefs).
Michael A. Bukosky argued the cause for
respondents (Loccke, Correia & Bukosky,
attorneys; Mr. Bukosky, of counsel and on the
brief).
PER CURIAM
The issue presented in these consolidated appeals is whether
the County of Bergen (County) agreed, in a collective bargaining
agreement, to arbitrate whether the County police officers would
receive a retroactive pay increase if the Bergen County Police
Department merged into the Bergen County Sheriff's Office
(Sheriff's Office). The County contends that the Bergen County
Police Department was realigned with, but not merged into, the
Bergen County Sheriff's Office. The Police Benevolent
Association, Local 49 (PBA 49), which represents the Bergen County
police officers, argues that there was a merger thereby entitling
County police officers to a retroactive pay raise.
We hold that the parties agreed to arbitrate all issues
concerning the interpretation of the contract and, therefore, the
underlying question concerning the pay increase is to be decided
by the arbitrator. Our Supreme Court has instructed that if a
collective bargaining agreement confers the issue of the
interpretation of that agreement to an arbitrator, then the
arbitrator, and not a court, must interpret the agreement.
Amalgamated Transit Union, Local 880 v. N.J. Transit Bus
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Operations, Inc., 200 N.J. 105, 118 (2009). Thus, we affirm an
August 19, 2016 order denying the request by plaintiffs, the
Sheriff's Office and the County (collectively, plaintiffs), to
enjoin the arbitration and granting the motion of defendant PBA
49 to dismiss plaintiffs' complaint for a declaratory judgment.
I.
Historically, Bergen County has had a police department and
a sheriff's office. The Administrative Code of Bergen County,
adopted in 2007, stated that the "Police Department" was a division
of the Department of Public Safety, led by a director appointed
by the County Executive. That same Code identified the Sheriff
as a constitutional officer and the head of a separate "department"
with officers and employees under his or her jurisdiction.
The County and PBA 49 have been parties to a collective
bargaining agreement (CBA) for several decades. As previously
noted, PBA 49 represents the County police officers, except the
chief and deputy chief. The base terms of the current CBA were
agreed to in 2001, and that CBA has been extended and modified by
agreements executed in 2002, 2010, 2011, and 2014.
For a number of years, the County has considered the idea of
combining or reorganizing the Bergen County Police Department and
the Sheriff's Office. In 2012, the Freeholders rejected a proposed
ordinance to dissolve the County police and transfer its functions
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to the Sheriff's Office. The following year, the Freeholders
adopted Ordinance No. 13-27, transferring the County police to the
Sheriff's Office. The then County Executive vetoed that ordinance,
and the Freeholders voted to override that veto. That dispute
between the County Executive and Freeholders engendered a lawsuit,
which was later dismissed after a new County Executive was elected.
In January 2014, the County Executive executed an extension
of the CBA with PBA 49 (the 2014 CBA Extension). Among other
things, the 2014 CBA Extension addressed the salaries of County
police officers. The 2014 CBA Extension provided that County
police officers would receive certain salaries, however, if the
County police were "merged/consolidated" into the Sheriff's
Office, then the County police officers would receive different
salaries, which effectively would be retroactively increased
salaries. Specifically, paragraph one of the 2014 CBA Extension
states:
1. Article VIII, Salaries – Attached as
Exhibit A is a new salary guide for all
officers hired after January 1, 2014. Current
officers who have not achieved top pay will
progress under the existing salary guide until
he/she achieves top pay. All officers will
receive a 1.5% increase (applied to the salary
guides) for each year of the agreement
(January 1, 2014 – January 1, 2017). Article
VIII, Paragraphs 1-4, 6-7 and Exhibit B are
no longer operative, unless the County police
are merged/consolidated into the Bergen County
Sheriff's Office or disbanded, in which event,
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Paragraphs 1-4, 6-7 and Exhibit B become
retroactively operative effective January 1,
2014.
On May 14, 2014, the Freeholders adopted a resolution approving
the 2014 CBA Extension.
In January 2015, a new County Executive entered into a
memorandum of agreement with the County Sheriff and Prosecutor
that addressed the organization of the County Police Department
(the 2015 MOA). The 2015 MOA stated that the Bergen County Police
Department was being realigned with the Sheriff's Office. In that
regard, the 2015 MOA provided that once the Freeholders adopted
an ordinance transferring all operational and administrative
authority over the County police to the Sheriff's Office, the
County police will be known as "Bergen County Sheriff, Bureau of
Police Services." The 2015 MOA goes on to provide that the Bergen
County Police Department will continue to be a separate unit
overseen by the Sheriff's Office and that there will be no changes
required to any existing labor contracts. The 2015 MOA also states
that the number of officers is expected to be reduced through
attrition to a maximum level of 201 officers, representing a
reduction of over fifty County police officers and the retention
of the current authorized strength of 152 Sheriff's officers.
In January 2015, the Freeholders adopted Resolution No. 42-
15, approving the 2015 MOA. The Freeholders also adopted an
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ordinance reflecting the organizational transfer set forth in the
2015 MOA and identifying the Bergen County Police Department as
"Bergen County Sheriff, Bureau of Police Services." Another
ordinance established a table of organization for the County police
for the "Post-Realignment Period."
In February 2016, PBA 49 filed a grievance under its CBA,
alleging that the County police had merged into the Sheriff's
Office and, therefore, officers were entitled to a retroactive
salary increase under the 2014 CBA Extension.
Article XVI of the CBA between the County and PBA 49 sets
forth a grievance procedure. A grievance is defined as
any dispute between the Employer and the
Employee with respect to the interpretation,
application or violation of any of the
provisions of this Agreement, or a dispute
between the same parties concerning rules,
regulations, or administrative decisions
qualifying as terms and conditions of
employment and which intimately and directly
affect the work and welfare of the Employees.
The CBA goes on to provide for a three-step grievance process.
First, the grievance is submitted to the Chief. Second, if not
settled by the Chief, the grievance is submitted to the County
Administrator. Finally, if the grievance remains unresolved, an
arbitrator is appointed by the Public Employment Relations
Commission (PERC). The arbitrator "shall have full power to hear
the grievance and make a final decision, which decision shall
6 A-0485-16T2
neither modify, add to, nor subtract from the terms of the [CBA]
and the above referenced rules, regulations or administrative
decisions." The arbitrator's decision is binding on the parties.
In response to the grievance filed by PBA 49 in February
2016, the Chief of the Sheriff's Office denied the grievance. The
Chief contended that a merger had not occurred, rather, the County
police had realigned with the Sheriff's Office. PBA 49 next
submitted what it contended was a second-step grievance to the
County's Director of Personnel.1 Thereafter, in April 2016, PBA
49 submitted a request to PERC for appointment of an arbitrator
to arbitrate the dispute.
The County responded by asking PERC to hold the arbitration
in abeyance while it sought a declaratory judgment from a court.
PERC denied that request, and the County and the Sheriff's Office
filed a declaratory judgment action in the Law Division. In their
complaint, the County and the Sheriff's Office sought a declaration
that the County police had not been merged or consolidated into
the Sheriff's Office and, therefore, the County police were not
entitled to a retroactive salary increase. The County and the
1
The County contends that the second-step grievance should have
been submitted to the County Administrator. Nevertheless, both
parties agree that the grievance was not resolved and a third-step
grievance was submitted to PERC for the appointment of an
arbitrator.
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Sheriff's Office also sought an injunction to prevent the
arbitration from proceeding.
PBA 49 opposed the request for an injunction and filed a
motion to dismiss the complaint so that the arbitration could
proceed. The trial court heard arguments on the applications. On
August 19, 2016, the trial court entered an order denying the
request of the County and the Sheriff's Office for an injunction
and dismissing their complaint for declaratory relief. The court
also issued a written opinion explaining its rulings. In short,
the trial court found that the County had agreed to arbitrate the
question of whether the County police were entitled to a salary
increase if there was a merger or consolidation of the County
police with the Sheriff's Office.
The County and the Sheriff's Office filed a motion for
reconsideration, but the trial court denied that motion in an
order entered on September 20, 2016. The County and the Sheriff's
Office then filed separate appeals from the orders entered on
August 19, 2016 and September 20, 2016. We consolidated the
appeals.
The County and the Sheriff's Office also sought a stay of the
arbitration pending the appeals, which the trial court granted.
8 A-0485-16T2
II.
On appeal, the County and the Sheriff's Office make a series
of arguments that are all designed to contend that a court, as
opposed to an arbitrator, should decide whether the County police
did or did not merge into the Sheriff's Office. Thus, plaintiffs
argue the trial court erred by: (1) not making a declaratory
judgment on that issue; (2) failing to consider an "admission" by
counsel for PBA 49 that the County Police Department remained a
"separate agency" after the reorganization; (3) failing to
consider if the question whether a realignment occurred could be
answered by the terms of the CBA; and (4) denying their motion for
reconsideration.
While framed in different ways, only one issue is presented
on these consolidated appeals: Did the County and PBA 49 agree to
arbitrate the effect on salaries of the County Police if the County
Police Department was merged or consolidated into the Sheriff's
Office? We hold that they agreed to arbitrate and hence the
underlying question is an issue for the arbitrator.
We begin our analysis with an overview of the well-settled
law governing arbitration. We then review the language of the
CBA. Finally, we address the specific arguments put forward by
plaintiffs.
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A. The Law Governing Arbitration
Agreements to arbitrate are contracts and, therefore, subject
to the law governing contract interpretation. Garfinkel v.
Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 134-35
(2001). Accordingly, in interpreting the CBA here, we start with
its plain language. See id. at 135 (holding that the "intent
expressed or apparent in the writing [] controls" the
interpretation of an arbitration agreement).
Initially, the court needs to decide "whether the party
seeking arbitration is making a claim which on its face is governed
by the [CBA]." Standard Motor Freight, Inc. v. Int'l Bhd. of
Teamsters, 49 N.J. 83, 96 (1967) (citing United Steelworkers of
Am. v. Am. Mfg. Co., 363 U.S. 564, 567-68 (1960)). In Standard
Motor, our Supreme Court addressed the issue of arbitrability and
identified two categories: "substantive" arbitrability and
"procedural" arbitrability. Standard Motor, supra, 49 N.J. at 96-
97. "Substantive" arbitrability refers to "whether the particular
grievance is within the scope of the arbitration clause [in the
CBA] specifying what the parties have agreed to arbitrate." Id.
at 96. Thus, the Court explained that
a party cannot be required to submit to
arbitration any dispute which he [or she] has
not agreed so to submit . . . . [T]he judicial
inquiry . . . must be strictly confined to the
question whether the reluctant party did agree
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to arbitrate the grievance or did agree to
give the arbitrator power to make the award
he [or she] made.
[Ibid.]
Thus, courts are limited to ascertaining whether the party
seeking arbitration is making a claim that on its face is governed
by the contract. If the answer is yes, then that question of
contract interpretation is for the arbitrator. See Amalgamated
Transit Union, supra, 200 N.J. at 114.
"Procedural" arbitrability asks "whether procedural
conditions to arbitration have been met." Standard Motor Freight,
supra, 49 N.J. at 97. "The grievance process itself is used to
decide matters of procedural arbitrability and, so, arbitrators
are the decision-makers for those concerns." Amalgamated Transit
Union, supra, 200 N.J. at 116 (citing Standard Motor Freight,
supra, 49 N.J. at 97).
Our Supreme Court has also explained that whether a question
is substantively versus procedurally arbitrable is not always the
relevant inquiry. Amalgamated Transit Union, supra, 200 N.J. at
117. Instead, the critical question is whether the issue being
presented is a question to be decided by the arbitrator. Thus,
if a question requires an interpretation of the CBA, and the CBA
makes clear that such questions are for an arbitrator, then the
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court's only role is to refer that question to arbitration. Id.
at 118-19.
This appeal is governed by the decision in Amalgamated Transit
Union. In Amalgamated, a probationary employee of New Jersey
Transit and member of the union was terminated during his probation
period for providing false information on his employment
application. Amalgamated Transit Union, supra, 200 N.J. at 109-
10. The union filed a grievance concerning the termination. It
sought arbitration in accordance with the provisions in the CBA
that permitted arbitration of any dispute or grievance "as to the
interpretation, application, or operation of any provisions of
this agreement[.]" Id. at 110. The arbitration panel concluded
that the termination of a probationary employee was not subject
to arbitration under the agreement. The trial court agreed, but
the Appellate Division reversed. The Appellate Division
determined that a court, not the arbitration panel, must decide
whether the grievance was subject to arbitration. The Appellate
Division then interpreted the agreement to permit arbitration of
the grievance.
The Supreme Court reversed. The Court concluded that under
the terms of the collective bargaining agreement, the arbitration
panel, not the court, must decide whether a probationary employee
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could invoke the arbitration provision and grieve his termination.
Id. at 119-20. In reaching that conclusion, the Court explained:
[T]he CBA clearly conferred that broadly
stated power to interpret this CBA on the
arbitrators. Thus, the CBA's arbitration
provision granted to the arbitrators the
authority to decide this question about their
own jurisdiction. Any court looking at this
CBA should have seen that it conferred broad
interpretive power on the arbitrators and
should have left the question for
interpretation to the decision-makers
designated by this CBA.
[Id. at 118.]
B. The CBA between the County and PBA 49
The CBA between the County and PBA 49 broadly defines
"grievance" as "any dispute between the [County] and the [PBA 49]
with respect to the interpretation, application or violation of
any of the provisions of this Agreement . . . ." Like the CBA in
Amalgamated, the CBA here provides that disputes over the
interpretation of the agreement are subject to arbitration.
Consequently, the question whether the County police officers are
entitled to different salaries because the County police was merged
into the Sheriff's Office is a question for the arbitrator to
decide.
The issue is not whether the County could reorganize its
County Police Department. It could. Instead, the issue is if the
County Police Department was reorganized with the Sheriff's
13 A-0485-16T2
Office, are the County police officers entitled to a retroactive
pay raise? The 2014 CBA Extension states that if the
reorganization is a merger or consolidation, then the County police
officers receive a retroactive pay increase. If, on the other
hand, the reorganization was not a merger or consolidation, then
the County police officers do not receive a pay increase. That
question requires an interpretation of the CBA, and thus is not
for a court to decide. Instead, in the grievance procedure in the
CBA, the parties agreed that an arbitrator would decide that
question.
C. The Plaintiffs' Specific Arguments
When the narrow question before the court is properly framed,
the arguments by plaintiffs can be summarily addressed.
First, plaintiffs are not entitled to a declaratory judgment
by a court because they had previously agreed that an arbitrator
would make that decision. The declaratory judgment action allows
a court to determine any question of construction arising under,
among other things, a contract. N.J.S.A. 2A:16-53; Carter v. Doe,
__ N.J. __, __ (2017) (slip op. at 23) (citing Rego Indus., Inc.
v. Am. Modern Metals Corp., 91 N.J. Super. 447, 453 (App. Div.
1966)). If, however, the contract calls for that determination
to be made by an arbitrator, a party cannot sidestep the agreement
to arbitrate that issue by filing a declaratory judgment action.
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Second, plaintiffs' argument concerning an admission
allegedly made by counsel for PBA 49 is a question for the
arbitrator to consider. In other words, plaintiffs seek to have
the court determine whether a merger took place. As we have
already explained, the arbitrator will interpret the language in
the 2014 CBA Extension to determine whether it triggers or does
not trigger a salary increase. In so doing, the arbitrator will
also be free to consider plaintiffs' arguments concerning an
alleged admission made by PBA 49.
Third, the question of whether there was a realignment is not
the relevant issue. The 2014 CBA Extension uses the phrase
"merged/consolidated[.]" The arbitrator will interpret that
phrase within the confines of deciding a salary issue.
Finally, since we have held that the trial court correctly
denied the injunction of the arbitration and dismissed the
declaratory judgment action, there was no error in denying the
motion for reconsideration.
The County and PBA 49 also debate whether the question
presented to the trial court was a question of law or fact. Here,
that is not the controlling issue. Parties can agree to present
questions of law to an arbitrator. Perini Corp. v. Greate Bay
Hotel & Casino, Inc., 129 N.J. 479, 493 (1992) (granting
arbitrators broad latitude in resolving questions of law when
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interpreting contracts). Here, the CBA expressly stated that any
interpretation of the CBA would be a question subject to the
grievance procedures, with the ultimate step being binding
arbitration. The only limitation to such an agreement in a public
collective bargaining agreement would be questions of public
policy and managerial prerogative. City of Jersey City v. Jersey
City Police Officers Benevolent Ass'n, 154 N.J. 555, 571 (1998).
Here, no party argued that there was a public policy reason against
enforcing this arbitration provision, and no party argued that the
disputed interpretation of the agreement involved managerial
prerogative. Indeed, we discern neither a public policy problem
nor a limitation on managerial prerogative.
Affirmed. The stay of the arbitration is vacated.
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