New Jersey Public Safety Employee Lawyer & Attorney : Arpaia & Crivelli Law Firm : Police, Firefighters, Workers Compensation, Discipline Representation : New Jersey

On October 30, 2008, The Press of Atlantic City reported that new Ocean City, New Jersey Police Officers will make approximately $5,000 less under the contract that was recently approved by the PBA and city council. The contract with the Policemen's Benevolent Association Local 61 also reflected a move to the state health-insurance system from the city’s own health system. The city has cited double digit increases in premium costs as the reason for moving from its own plan to the State Health Benefits Program. The city further stated that it plans to move all municipal employees to the state benefits program as soon as practicable. 

The contract also reflected a 3.5 percent increase in salary for 2008, a 3.85 percent increase in salary for 2009, a 3.9 percent increase in salary for 2010 and a 3.8 percent increase in salary for 2011.

However where the contract strayed from the traditional path was the establishment of a two-tier pay system reflecting a cut in salary for new hires from $42,200 to $37,500. The contract also changed a longevity payment from a range of 0 to 12 percent to a flat dollar bonus based on years of service.

Presently contract negotiations with the city fire union have reached an impasse and are in binding interest arbitration.

We should take a few teaching points away from the settlement of this particular contract. 

• First, I believe we will see a greater trend developing where municipalities will continue to move away from their own health plan system and opt into the State Health Benefit Program as a cost saving measure. 

• Second, in today’s economy and with the poor self inflicted financial condition of the state of New Jersey, municipal aide is being cut which means less money for pay raises and benefits. The days of seeing 4% increases will be harder to come by in the immediate future. Furthermore, raises for 2008 will probably be less than the years that follow. 

• Finally, it is interesting that the PBA agreed to lower the starting salary of new officers. While there may be a multitude of economic reasons for this decision, we should not speculate why this concession was made without understanding the dynamics of the department’s man power, Table of Organization, and the benefits conferred upon the members for making the concession.

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Currently, many labor organizations representing public employees are negotiating collective bargaining agreements with the State of New Jersey. One of the most significant issues surrounding these negotiations involves the healthcare/benefit program provided by the State of New Jersey to its employees. Specifically, the State’s proposal regarding the dollar amount of employee contributions to the healthcare plan provided by the State, also known as premium sharing, has become vigorously contested by many labor organizations. As such, the State Health Benefits Program has again risen to the forefront of labor law consciousness.

The operation of the State Health Benefits Program (hereinafter referred to as “the Program”) is governed by the New Jersey State Health Benefits Program Act (hereinafter referred to as “the Act”), N.J.S.A. 52:14-17.25 to -17.45. The goal of the Act is to provide comprehensive health benefits for eligible public employees and their families at “tolerable” cost. In essence, it establishes a plan for state funding and private administration of a health benefits program which will protect public employees from catastrophic health expenses. In addition, it encourages public employees to rely on the Program instead of seeking protection in the commercial insurance market. Heaton v. State Health Benefits Commission, 264 N.J. Super. 141, 151 (App. Div. 1993).   

The Act also spawned the State Health Benefits Commission (hereinafter referred to as “SHBC”). The SHBC is entrusted to establish the Program by negotiating and purchasing medical, surgical, hospital, and major medical benefits for participating public employees and their families, “in the best interests of the State and its employees” as well as retaining exclusive jurisdiction to determine disputed matters under the plan. N.J.S.A. 52:14-17.27 to -17.28. The SHBC is entitled to establish rules and regulations as deemed reasonable and necessary for the administration of the Act. See N.J.A.C. 17:9-1.1 to -7.4. The Act also states that the SHBC may set forth limitations and exclusions in coverage as it finds necessary to administer the SHBP.

In undertaking a very consequential role in the financial security of public employees and their families, the State has the duty and responsibility to bargain fairly with them. Hidden or unfair reservations in insurance policies are ignored because they do not reflect the reasonable expectations of the parties. Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992); Sparks v. St. Paul Ins. Co., 100 N.J. 325, 336 (1985). Because of the significance of health insurance to public employees and their families, and the Legislature’s undertaking to furnish insurance and determine its scope, one of the goals of the Legislature must have been to assure the fair and even-handed application of the Program provisions. Inevitably, the issue of premium sharing and its potential ramifications will certainly be followed by many public employees and labor organizations throughout the negotiation process to determine whether it is violative of the Program’s policies. 

Presently the state has proposed that all state civilian employees and law enforcement personnel contribute 1.5% of their salary towards health insurance. Certain state public employee labor unions and law enforcement labor unions have agreed to premium share at the 1.5% rate. However certain attorneys practicing labor law believe that there are constitutional issues with percentage premium sharing. We will follow this issue as it winds its way through interest arbitration and possibly the courts of New Jersey.  

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In the case of Grasso v. Fraternal Order of Police, Glassboro Lodge No. 108, 33-2-1617, the Superior Court of New Jersey, Appellate Division, held that under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et.seq, the Defendants owed no duty to the Plaintiff to represent him in a dispute with the Borough of Glassboro due to his status of not being an "employee" as defined under the act.

Grasso initially filed suit against the Borough of Glassboro for their failure to reimburse him for Medicare Part B. premiums pursuant to a collective bargaining agreement.  Some time during the suit Grasso called on the FOP for representation as the matter dealt with an issue related to the collective bargaining agreement.  The FOP declined representation of Grasso, and following his success in the underlying action against the Borough, Grasso then moved against the FOP for their failure to represent him.

The Appellate Panel affirmed the Trial Court's decision to grant Summary Judgment in favor of the FOP due to the fact that Grasso can not be considered an employee under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et.seq. 

This case is important to both collective bargaining units and retired Public Safety Officers alike as it clearly defines the roles and responsibilities of each party under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et.seq

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The Superior Court of New Jersey, Law Division, Passaic Vicinage, (DeLuccia, J.S.C.) recently interpreted a collective bargaining agreement (CBA) pertaining to discipline in the case of Whitaker v. Passaic County Sheriff's Department, 33-3-139.  In this case the Plaintiff appealed her right to challenge minor disciplinary charges which were previously dismissed for alleged failure to exhaust administrative remedies under the CBA. 

Instead of proceeding with the grievance procedure as outlined under the CBA, Whittaker opted to challenge the minor discipline at a disciplinary hearing.  After the disciplinary hearing was decided, Whittaker next attempted to appeal the decision through the grievance procedure as outlined in the CBA.  Whittaker was denied the right to grieve the charges by her employer stating that she was precluded from doing so due to the fact that she had chosen to challenge the charges at a hearing and is thus not entitled to pursue the case by way of grievance. 

The Superior Court of New Jersey, Law Division, took the liberty to interpret the CBA and held that a reasonable interpretation of the agreement would permit an employee charged with a minor disciplinary infraction to proceed first to an administrative hearing to challenge the charges and then, if adverse action is taken by the employer, to demand arbitration of the dispute under the CBA. 

This is an interesting case in that it appears to give a Public Safety Officer "two bites at the apple" when challenging minor disciplinary charges.  Furthermore, we normally do not see Superior Court Judges stepping into disputes between public employers and employees especially when it comes to the interpretation of a CBA.  Interpretation of agreements is traditionally left to the Public Employment Relations Commission (PERC) and the Appellate Division.  I think what we should take away from this case is that there is always more than one reasonable interpretation of a collective bargaining agreement, and Public Safety Officers should not be afraid or hesitate in certain circumstances to challenge their employers in the Superior Court of New Jersey, Law Division.

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