IN THE MATTER OF WEST ORANGE BOARD OF EDUCATION VS. WEST ORANGE EDUCATION ASSOCIATION (PUBLIC EMPLOYMENT RELATIONS COMMISSION)

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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4315-16T2
IN THE MATTER OF
WEST ORANGE BOARD OF EDUCATION,
Petitioner-Respondent,
v.
WEST ORANGE EDUCATION ASSOCIATION,
Respondent-Appellant.
__________________________________
Submitted January 8, 2018 - Decided July 25, 2018
Before Judges Accurso, O'Connor and Vernoia.
On appeal from the Public Employment
Relations Commission, Docket No. SN-2017-
013.
Zazzali, Fagella, Nowak, Kleinbaum &
Friedman, attorneys for appellant (Genevieve
Murphy-Bradacs, on the briefs).
Cleary Giacobbe Alfieri & Jacobs, LLC,
attorneys for respondent (Matthew J.
Giacobbe and Gregory J. Franklin, on the
brief).
Christine Lucarelli-Carneiro, Acting General
Counsel, attorney for respondent New Jersey
Public Employment Relations Commission
(David N. Gambert, Deputy General Counsel,
on the statement in lieu of brief.)
PER CURIAM
Following expiration of its collective negotiations
agreement with the West Orange Education Association, the West
Orange Board of Education filed a scope petition with the Public
Employment Relations Commission asserting certain provisions of
the expired agreement were not mandatorily negotiable and should
be stricken from any successor agreement. Among those
provisions was Article XV, Section B (entitled "Supplementary
Sick Leave"), which provided:
Full-time employees shall be credited with
five (5) days supplementary sick leave
allowance for each year of service, with
unused days to be accumulated. Full-time
employees who have exhausted their regular
sick leave may utilize the accumulated
supplementary sick leave to the extent
necessary to provide total compensation of
up to three (3) days beyond this period in
any month wherein less than three (3) days'
compensation has been earned.
The Board argued the provision was an extended sick leave
benefits clause preempted by N.J.S.A. 18A:30-6.1 The Association
1
N.J.S.A. 18A:30-6 provides:
When absence, under the circumstances
described in section 18A:30-1 of this
article, exceeds the annual sick leave and
the accumulated sick leave, the board of
education may pay any such person each day’s
salary less the pay of a substitute, if a
substitute is employed or the estimated cost
(continued)
2 A-4315-16T2
countered that notwithstanding the wording of the provision and
its reference to "sick days," "the sole purpose of Article XV,
Section B was to codify the parties' longstanding past practice
of providing employees with 'insurance days' based on years of
service that could be used to continue their health benefits
during unpaid leaves of absence."2 The Association contended
there was no dispute that provision of health benefits coverage
during unpaid leaves of absence was a mandatorily negotiable
(continued)
of the employment of a substitute if none is
employed, for such length of time as may be
determined by the board of education in each
individual case. A day’s salary is defined
as 1/200 of the annual salary.
[Emphasis supplied.]
2
In a certification submitted to PERC, the president of the
Association explained that over the last many years, all full-
time employees have been allowed to accumulate five so-called
"insurance days" for each year of service annually. Use of
three of those days entitled an employee to the Board's portion
of the health premium for one calendar month. Thus, an employee
with six years' service was entitled to thirty "insurance days,"
which could be used to continue the Board's contribution to the
employee's health premium for ten months while on unpaid leave.
Based on PERC's 1992 decision, which notes the supplementary
sick leave provision became part of the parties' CNA beginning
in the 1960-61 school year, counsel for PERC speculates the
clause mutated "into the alleged past practice of providing
solely for the 'insurance days'" after the blanket award of
supplementary sick days was preempted by the enactment of
N.J.S.A. 18A:30-6 in 1967.
3 A-4315-16T2
subject, relying on a 1992 PERC decision against the Board in
the Association's favor so holding.
PERC ruled for the Board, finding that although health
benefits during periods of unpaid leave is a negotiable topic,
the Association "cannot achieve such a contractual benefit in
the guise of supplementary sick leave that allows for extra paid
sick leave days to be earned and utilized via blanket rule
rather than per the Board's discretion within the constraints of
N.J.S.A. 18A:30-6." It distinguished its prior decision, which
arose in the context of a grievance arbitration, because there,
"application of the relevant contract clause was confined to the
known circumstances of the issues sought to be arbitrated."
Although acknowledging that the supplementary sick leave
provision in that case was "nearly identical" to Article XV,
Section B, PERC found the issue in the prior case "was whether
the Board violated the contract 'when it discontinued health
insurance benefits for employees on unpaid leaves of absence.'"
The Association moved for reconsideration arguing that
after PERC's decision of June 30, 2016, "the Board has advised
that it will no longer honor the parties' longstanding
contractual agreement to allow employees to use their
accumulated 'supplementary sick leave' to continue their health
benefits while on unpaid leaves of absence." The Association
4 A-4315-16T2
complained the Board acted notwithstanding "that such an
agreement involves a mandatorily negotiable term and condition
of employment" and that "there is not now, nor has there ever
been, any other permissible use for supplementary sick leave
days provided by the parties' agreement other than for the
continuation of health benefits during an unpaid leave of
absence."3
PERC, although noting "employers may not unilaterally
change prevailing terms and conditions of employment," whether
established by agreement or past practice, as doing so "would
circumvent the statutory duty to bargain," see Galloway Tp. Bd.
of Ed. v. Galloway Tp. Ed. Ass'n, 78 N.J. 25, 48 (1978), agreed
with the Board the Association had not established a basis for
reconsideration.
The Association did not appeal those rulings. Two weeks
later, however, it filed a grievance on behalf of a member
denied the use of supplementary sick days to secure continuation
of her health benefits during an extended unpaid leave. The
Board denied the grievance relying on PERC's decision striking
3
The Board disputes that, contending the CNA further obligated
it to a $5000 "opt-out waiver payment" for employees foregoing
such coverage. As our disposition does not rest on these
grounds, we have no need to resolve the parties' dispute on the
point.
5 A-4315-16T2
Article XV, Section B and PERC's rejection of the Association's
past practice argument on reconsideration.
When the Association demanded the issue be placed before a
panel of arbitrators, the Board filed a scope petition with PERC
seeking to restrain arbitration. The Association argued PERC's
decision striking Article XV, Section B was not controlling as
that matter turned on a negotiability analysis, not the
arbitrability analysis required here. PERC rejected the
argument that whatever distinction might exist between
arbitrability and negotiability could result in the past
practice of awarding health insurance days remaining arbitrable
despite the striking of the parties' supplementary sick leave
clause. Finding it undisputed, based on its prior decisions and
the Association president's certification, that "the past
practice regarding 'insurance days' was solely rooted" in
Article XV, Section B, PERC determined its removal left the past
practice "without any foundation and . . . effectively
eliminated."
On appeal, the Association reprises the arguments it made
to PERC that the continuation of health insurance benefits for
employees on unpaid leaves of absence is a mandatorily
negotiable term and condition of employment, and adds that PERC
exceeded its jurisdiction when it failed to limit its inquiry to
6 A-4315-16T2
whether the subject matter of the grievance involved a
mandatorily negotiable term and condition of employment. We
disagree.
The Association's argument is premised on a proposition
neither the Board nor PERC disputes, that health coverage for
employees during unpaid leaves of absence is a mandatorily
negotiable term of employment. Thus, if one squints at the
issues so that it is the only one visible, the question might
appear initially to meet the test for negotiability established
in In re Local 195, IFPTE, 88 N.J. 393, 404-05 (1982), that is,
involve (1) an "item [that] intimately and directly affects the
work and welfare of public employees"; (2) that "has not been
fully or partially preempted by statute or regulation"; and (3)
involves a matter where "a negotiated agreement would not
significantly interfere with the determination of governmental
policy." But so myopic a focus blurs, not sharpens, the dispute
the parties presented to PERC.
PERC struck Article XV, Section B because it is plainly
preempted by N.J.S.A. 18A:30-6, rejecting the Association's
position that the clause, although worded as a supplementary
sick leave provision, was actually only a mechanism for the
provision of health benefits during a period of unpaid leave, a
well-settled negotiable term of employment. PERC acknowledged
7 A-4315-16T2
the parties were free to negotiate for the provision of health
coverage during leave, but ruled the Association could not
"achieve such a contractual benefit in the guise of [a]
supplementary sick leave" term preempted by statute — a
proposition the Association effectively conceded by failing to
appeal PERC's decision striking the clause from the parties'
Agreement.
Permitting the Association to arbitrate the Board's denial
of a member's request to use her supplemental sick days to
secure paid health benefits based on the past practice
established under Article XV, Section B would effectively
nullify PERC's ruling striking the provision from the parties'
contract. The clause, although stricken from the Agreement,
would continue to live on, enforceable as past practice
notwithstanding that the clause, and thus the practice, has been
preempted by legislation, a result clearly contrary to law. See
State v. State Supervisory Emps. Ass'n, 78 N.J. 54, 81-82 (1978)
(holding "where a statute or regulation sets a maximum level of
rights or benefits for employees on a particular term and
condition of employment, no proposal to affect that maximum is
negotiable nor would any contractual provision purporting to do
so be enforceable").
8 A-4315-16T2
We accordingly can find no error, much less reversible
error, in PERC's determination that excising the supplementary
sick leave provision from the Agreement prevented the union from
relying on the past practice of permitting District employees to
compel the District to provide paid health benefits on the basis
of supplementary sick days awarded on other than the case-by-
case basis permitted by N.J.S.A. 18A:30-6. See City of Jersey
City v. Jersey City Police Officers Benevolent Ass'n, 154 N.J.
555, 568 (1998) (directing that a decision by PERC concerning
the scope of negotiations will stand unless clearly demonstrated
to be arbitrary or capricious).
Moreover, as observed by PERC's counsel on appeal, and not
disputed by the Association, N.J.S.A. 18A:16-16, the statute on
which the Association relies to establish the negotiability of
health benefits during periods of leave, conditions such
coverage on an express contractual provision negotiated by the
parties.4 PERC having struck Article XV, Section B from the
4
N.J.S.A. 18A:16-16 provides:
The coverage of any employee, and of
his dependents, if any, shall cease upon the
discontinuance of his employment or upon
cessation of active full-time employment in
the classes eligible for coverage subject to
such provision as may be made in any
contract made by the local board of
(continued)
9 A-4315-16T2
parties' Agreement, N.J.S.A. 18A:16-16 preempts the
Association's reliance on past practice alone to establish an
employee's entitlement to continued health benefits while on
unpaid leave. The parties are free to negotiate for health
coverage during periods of unpaid leave; PERC's decision, which
we affirm, only requires they do so within the parameters
established by the Legislature in N.J.S.A. 18A:30-6 and N.J.S.A.
18A:16-16.
Affirmed.
(continued)
education for limited continuance of
coverage during disability, part-time
employment, leave of absence other than
leave for military service, and for
continuance of coverage after retirement.
[Emphasis supplied.]
10 A-4315-16T2