CITY OF ORANGE FIRE OFFICERS ASSOCIATION FMBA LOCAL 210 VS. CITY OF ORANGE TOWNSHIP (C-000018-17, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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 NO. A-0091-18T2
CITY OF ORANGE FIRE OFFICERS
ASSOCIATION FMBA LOCAL 210,
Plaintiff-Respondent,
v.
CITY OF ORANGE TOWNSHIP,
Defendant-Appellant.
Submitted February 26, 2019 – Decided April 25, 2019
Before Judges Gilson and Natali.
On appeal from Superior Court of New Jersey,
Chancery Division, Essex County, Docket No.
C-000018-17.
Scarinci & Hollenbeck, LLC, attorneys for appellant
(Ramon E. Rivera, of counsel; Krystle Nova, John J.D.
Burke, and Ramon E. Rivera, on the briefs).
Feeley & LaRocca, LLC, and The Blanco Law Firm,
LLC, attorneys for respondent (Pablo N. Blanco, of
counsel and on the brief; John D. Feeley, on the brief).
PER CURIAM
This appeal arises out of an action to enforce an arbitration award
concerning the terms of successor collective negotiation agreements between the
City of Orange Township (City) and the City of Orange Fire Officers
Association FMBA Local 210 (FOA). The City appeals from a July 25, 2018
order issued by the Chancery Division, which confirmed the arbitration award
and directed the City to comply with the award. In making that ruling, the
Chancery court refused to address the City's counterclaims that the award was
defective and should be vacated. Instead, the court ruled that because the City
had failed to appeal the award to the Public Employment Relations Commission
(Commission) as required by the governing statute, N.J.S.A. 34:13A-16(f)(5)(a),
the court did not have the authority to address the City's counterclaim. We agree
and affirm.
I.
The arbitration award at issue in this case is the product of compulsory
interest arbitration pursuant to the Police and Fire Public Interest Arbitration
Reform Act (the Arbitration Reform Act), N.J.S.A. 34:13A-14a to -21. Interest
arbitration "involves the submission of a dispute concerning the terms of a new
contract to an arbitrator, who selects those terms and thus in effect writes the
parties' collective agreement[.]" N.J. State P.B.A., Local 29 v. Town of
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Irvington, 80 N.J. 271, 284 (1979). "[C]ompulsory interest arbitration is a
statutory method of resolving collective-negotiation disputes between police
and fire departments and their employers." Hillsdale PBA Local 207 v. Borough
of Hillsdale, 137 N.J. 71, 80 (1994).
The underlying disputes have existed for a number of years and have
engendered an initial arbitration award issued in July 2016, an appeal to the
Commission, a decision by the Commission issued in September 2016, a remand
to the arbitrator, and the arbitrator's decision following the remand issued in
January 2017. The core disputes concern the terms and conditions of
employment, particularly salaries, for certain public-safety employees of the
City.
The initial request for arbitration was filed by the PBA Local 89 (PBA),
representing the City's police officers. Two other employee units thereafter
joined that arbitration. Those units are FMBA Local 10 (FMBA), representing
the rank and file firefighters of the City, and the FOA, representing the City's
fire officers.
On July 7, 2016, the arbitrator issued a written award setting terms of
successor collective negotiation agreements for all three units of employees. On
July 20, 2016, the City appealed that arbitration award to the Commission. In
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its appeal to the Commission, the City argued that the arbitrator failed to
properly address the financial impact of the award, including failing to properly
consider a two percent statutory cap established in N.J.S.A. 34:13A-16.7(b).
The City also argued that the arbitrator failed to properly address other statutory
factors under N.J.S.A. 34:13A-16(g).
On September 8, 2016, the Commission issued its decision on the City's
appeal. The Commission rejected the City's arguments regarding the two
percent cap. The Commission did, however, remand the matter to the arbitrator
and directed the arbitrator to explain and clarify the award as it related to certain
factors identified in N.J.S.A. 34:13A-16(g).
Thereafter, the City resolved its disputes with the PBA and FMBA.
Accordingly, on remand, the arbitrator only had to clarify his award with regard
to the members of the FOA.
On January 3, 2017, the arbitrator issued his decision following the
remand. That decision was mailed to the City and FOA by overnight delivery
on January 4, 2017. Thus, the arbitration decision was received by the parties
on January 5, 2017. Together with the arbitration decision on remand, the
parties were given written notice reminding them that if they wanted to appeal
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the arbitration award, any appeal had to be filed within fourteen days. The
fourteen days to appeal expired on January 19, 2017.
The City did not file an appeal with the Commission. Instead, on January
26, 2017, the FOA filed a verified complaint and order to show cause in the
Chancery Division seeking to enforce the arbitration award. In its complaint,
the FOA verified that it had been informed by the City that the City would not
be filing an appeal of the arbitration award. Consequently, the FOA sought to
have the Chancery Division confirm and enforce the arbitration award.
Approximately eleven months later, on December 28, 2017, the City filed
an answer, affirmative defenses, and counterclaims. In its counterclaims, the
City sought to vacate both the initial arbitration award, issued on July 7, 2016,
and the award following the remand, issued on January 3, 2017. The City
contended that the arbitrator failed to adequately consider all of the factors under
N.J.S.A. 34:13A-16(g), and improperly expanded the scope of the remand.
After reviewing briefs filed by the parties, the Chancery court held
telephone conferences with counsel on July 16 and July 25, 2018, and heard oral
argument on the enforcement of the arbitration award. The court ruled that the
City had waived its right to appeal the arbitration award by not filing an appeal
with the Commission. Thus, the court ruled that it could only enforce the
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arbitration award in accordance with N.J.S.A. 34:13A-19, and it could not
consider the City's substantive arguments alleging that the award was defect ive
and should be vacated. On July 25, 2018, the court entered an order (1)
confirming the arbitration award, (2) directing the City to comply with the
arbitration award, and (3) ordering the City to make retroactive payments to all
FOA members within sixty days.
II.
The City now appeals from the July 25, 2018 order. It argues that the
Chancery court obtained jurisdiction over the matter when the FOA filed its
verified complaint seeking to enforce the arbitration award. The City then
argues that the arbitrator failed to adequately consider all of the statutory factors
under N.J.S.A. 34:13A-16(g) and, therefore, the awards were procured by undue
means and the arbitrator exceeded or imperfectly executed his powers. The City
also argues that the arbitrator improperly expanded the scope of the remand
order from the Commission and, as a consequence, the arbitrator imperfectly
executed his powers and the remand award should be vacated.
We will only address the issue of the authority of the court to enforce the
arbitration award because a plain reading of the governing statute establishes
that the City waived its right to appeal the substance of the arbitration award.
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The issue concerning the scope of the enforcement action involves the
interpretation of a statute. Accordingly, our review of that issue is de novo.
State ex rel. K.O., 217 N.J. 83, 91 (2014) (citing McGovern v. Rutgers, 211 N.J.
94, 107-08 (2012)).
The procedures for resolving disputes concerning the terms and conditions
of employment between a public fire or police department and the union
representing the fire or police officers are governed by statute. N.J.S.A.
34:13A-16. See also Hillsdale PBA Local 207, 137 N.J. at 80. The New Jersey
Employer-Employee Relations Act (the Relations Act), N.J.S.A. 34:13A-1
to -43, includes a compulsory interest arbitration procedure for fire departments
and representatives of fire officers that reach an impasse in collective
negotiations. N.J.S.A. 34:13A-16(b)(2). The procedures for such interest
arbitration, including any appeal of an arbitration award, are set forth in the
Arbitration Reform Act, N.J.S.A. 34:13A-14a to -21, which is part of the
Relations Act.
To initiate interest arbitration, the public entity or employee
representative can petition the Commission. N.J.S.A. 34:13A-16(b)(2). An
arbitrator is then selected and the disputes are submitted to "binding arbitration."
N.J.S.A. 34:13A-16(d). The arbitrator must issue a decision within a prescribed
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time. N.J.S.A. 34:13A-16(f)(5). The arbitrator's decision, moreover, must
include an award and "shall be accompanied by a written report explaining how
each of the statutory criteria played into the arbitrator's determination of the
final award. The report shall certify that the arbitrator took the statutory
limitations imposed on the local levy cap into account in making the award."
Ibid.Any party to the arbitration can appeal the interest arbitration award to the
Commission. A final decision by the Commission, in turn, can be appealed to
this court. N.J.S.A. 34:13A-16(f)(5)(a). In that regard, the Arbitration Reform
Act states:
The [arbitration] decision shall be final and binding
upon the parties and shall be irreversible, except: (a)
[w]ithin 14 calendar days of receiving an award, an
aggrieved party may file notice of an appeal of an award
to the commission on the grounds that the arbitrator
failed to apply the criteria specified in subsection g. of
this section or violated the standards set forth in
N.J.S.[A.] 2A:24-8 or N.J.S.[A.] 2A:24-9. . . .
....
An aggrieved party may appeal a decision of the
commission to the Appellate Division of the Superior
Court.
[N.J.S.A. 34:13A-16(f)(5).]
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The Arbitration Reform Act also states that "an arbitrator's award shall be
implemented immediately." N.J.S.A. 34:13A-16(f)(5)(b). To ensure
compliance, the Arbitration Reform Act includes an enforcement provision,
which states: "The decision of the arbitrator may be enforced at the instance of
either party in the Superior Court with venue laid in the county in which the
dispute arose." N.J.S.A. 34:13A-19.
In summary, the plain language of the Arbitration Reform Act states that
an appeal of an interest arbitration award must be taken to the Commission and
that the decision by the Commission, in turn, can be appealed to us. See N.J.S.A.
34:13A-16(f)(5)(a). There is no right to appeal to the Law or Chancery Division.
Instead, the only right in the Law or Chancery Division is to "enforce[]" the
arbitration award. N.J.S.A. 34:13A-19. Cf. In re City of Camden, 429 N.J.
Super. 309, 327 (App. Div. 2013) (explaining that appeals are taken to the
Commission). In enforcing the arbitration award, courts may clarify a term of
the award. See Paterson Police PBA Local 1 v. City of Paterson, 433 N.J. Super.
416, 425 (App. Div. 2013). In contrast, the power to "affirm, modify, correct or
vacate the award" or to "remand the award" is vested with the Commission.
N.J.S.A. 34:13A-16(f)(5)(a).
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Here, the Chancery court correctly applied the plain language of the
Arbitration Reform Act. The City had not appealed the January 3, 2017
arbitration award to the Commission. After the fourteen-day time for such an
appeal expired, the FOA filed an action in the Chancery Division to enforce the
award. Accordingly, the Chancery court had no authority to modify or vacate
the arbitration award; rather, it correctly ruled it was limited to enforcing the
award.
The City argues that when the FOA filed its action in the Superior Court,
the court obtained jurisdiction and the court could then consider the City's
counterclaims challenging the arbitration award. There are two flaws with that
argument.
First, the time to appeal had expired and, thus, the City's counterclaims
were already time-barred when the FOA filed the action in the Superior Court.
The January 3, 2017 arbitration award was received by the City on January 5,
2017. The City had fourteen days to appeal. Those fourteen days expired on
January 19, 2017. Consequently, the City had no right to appeal when the FOA
filed its enforcement action on January 26, 2017.
Second, as already detailed, an appeal of the interest arbitration award had
to be first taken to the Commission. Because the City never filed any appeal
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with the Commission, it had no rights to seek to modify or vacate the arbitration
award.
In contending that the Chancery Division obtained jurisdiction to hear its
appeal, the City cites two cases: Harris v. Security Insurance Group, 140 N.J.
Super. 10 (App. Div. 1976) and Township of Aberdeen v. Patrolmen's
Benevolent Association, Local 163, 286 N.J. Super. 372 (App. Div. 1996).
Neither of those cases applies to the arbitration at issue in this case.
Harris discussed N.J.S.A. 2A:24-7, a statutory provision that, since 2003,
applies "only . . . to an arbitration or dispute arising from a collective bargaining
agreement or a collectively negotiated agreement." N.J.S.A. 2A:24-1.1. Thus,
if parties to a collective bargaining agreement provide for arbitration of disputes
arising from the agreement itself, N.J.S.A. 2A:24-7 governs the procedure by
which an arbitration award can be confirmed, vacated, or modified.
Here, the parties were involved in statutorily-mandated interest
arbitration, which is a process by which an arbitrator "effect[ively] writes the
parties' collective agreement." Hillsdale PBA Local 207 v. Borough of
Hillsdale, 263 N.J. Super. 163, 179 (App. Div. 1993) (quoting N.J. State
Policemen's Benevolent Ass'n, Local 29, 80 N.J. at 284), aff'd in part, rev'd in
part, 137 N.J. 71 (1994). Unlike other forms of arbitration involving voluntary
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resolution of disputes under an existing contract, "compulsory interest
arbitration does not depend on either the existence of a contract or on the
agreement of the parties to proceed to arbitration. It is a statutorily-mandated
procedure for resolving the terms of a new contract." Hillsdale PBA Local 207,
137 N.J. at 80 (citation omitted) (citing N.J. State Policemen's Benevolent Ass'n,
Local 29, 80 N.J. at 284). Accordingly, N.J.S.A. 2A:24-7 does not apply to
public fire and police department interest arbitration under the Arbitration
Reform Act. Cf. N.J.S.A. 34:13A-16.
The Aberdeen court did not rule on a procedural issue, but noted that upon
receiving the interest arbitration award, the township in that case "filed a
complaint in the Chancery Division seeking an order vacating the award, and
the union counterclaimed." 286 N.J. Super. at 376. That complaint was filed in
accordance with the procedure in place at that time, prior to the effective date
of the Arbitration Reform Act. See L. 1977, c. 85, § 3(f)(5) (stating that an
arbitration award is final, binding, and irreversible "except where there is
submitted to the court extrinsic evidence upon which the court may vacate,
modify or correct such award pursuant to N.J.S. 2A:24-7 et seq. or for failure to
apply the factors specified in subsection g. below"). The Arbitration Reform
Act was an amendment to the Relations Act that became effective on January
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10, 1996. See L. 1995, c. 425. That amendment established the relevant
provision at issue in this case: that appeals of interest arbitration awards must
be taken to the Commission, and appeals from the Commission will be heard in
the Appellate Division. See id. at § 3(f)(5)(a); N.J.S.A. 34:13A-16(f)(5)(a).
Affirmed.
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