Credit Rating Agency Fitch Downgrades NJ, Citing Unfunded Pension, Benefit Liabilities

 

As reported by nj.com, the credit rating agency Fitch has lowered New Jersey’s general bonds, citing unfunded pension and employee benefit liabilities. The agency wrote that making an increased pension payment, which Governor Chris Christie has said he will do, will “conflict with other long term challenges, such as property tax relief, school funding, and infrastructure needs.”

“The state’s budget remains structurally imbalanced inclusive of unfunded pension contributions,” the agency said in the downgrade announcement. “Reserve balances are expected to remain narrow, offering limited flexibility to absorb unforeseen needs.” Fitch dropped the state’s rating from “AA” to “AA-.”

Christie said last week Treasurer Andrew Sidamon-Eristoff and Chief of Staff Richard Bagger had traveled to New York to meet with some of the credit rating agencies and try to persuade them to increase the state’s rating in the wake of passage of pension and health benefit overhauls. “It was received very well by the agencies,” Christie said.

When the state’s rating was downgraded in February by Standard & Poor, Christie blamed Democrats in the Legislature for not passing the public employee benefit overhaul he had proposed. The package has since been passed, but in a different form then he initially proposed.

“The sky started to fall in today,” Christie said of the change in credit rating. He added, “You’ve already seen this morning what the Legislature’s inaction has cost the State of New Jersey.”

Sweeney, Oliver Meet With Unions To Talk Health Care

 

As reported by nj.com, Democratic leaders met with union officials and sources say the topic was overhauling health benefits. Senate President Steve Sweeney and Assembly Speaker Sheila Oliver met with the heads of the biggest public employee unions: Communications Workers of America, America Federation of State, County and Municipal Employees, International Federation of Professional and Technical Engineers, and the New Jersey Education Association.

Standing outside the meeting, Barbara Keshishian, president of the NJEA, declined to comment, saying the meeting was private. Leaders of the other unions have not responded to a request for comment, but three union and legislative sources said they discussed proposals by Governor Chris Christie and Sweeney to change health benefits for state employees. The sources requested anonymity because they were not authorized to discuss the meeting.

The Governor is pushing for state workers to pay 30 percent of the cost of the premium. Currently, state employees pay 1.5 percent of their salary for health insurance. Sweeney is pushing his own plan that would base contributions on both the cost of the premium and salary. Different from Christie’s proposal, Sweeney is recommending a sliding scale that would have low-income workers paying less than high-paid employees.

The Communications Workers of America, the state’s largest union, released its own plan, which would have workers pay a portion of the premium and a portion of their salary. The CWA plan would have most employees paying 14 percent of the cost of the premium. The CWA, with the backing of several other unions, has argued that the health benefits should be subject to collective bargaining, presently taking place to hammer out a new contract when the current one expires on June 30.

Legislation Proposed Regarding Illicit Cell Phones Inside NJ Prisons

 

As reported in the Trentonian on August 24, 2009, illicit cell phones remain a major problem inside New Jersey’s prisons, as inmates use the devices to secretly communicate with each other, intimidate witnesses and direct drug deals and other illegal activity. As a result, one New Jersey lawmaker is proposing to give corrections officials more tools to deal with the problem. 

Assemblyman Patrick Diegnan, Jr. recently proposed legislation calling on the State to seek proposals for installing and operating a wireless communications device detection system. Another measure calls for blocking the transmission and reception of cell phone equipment carrying voice, text messages, images and other data within correctional facilities.  No hearings have been scheduled yet on either measure.

Officials would have to ensure that the latter technology would not interfere with emergency or public safety communications and that it operates at the lowest possible transmission level necessary, nor interfere with cell phone signals that originate and end outside the state’s correctional facilities. 

Nearly 400 cell phones have been seized in correctional facilities since August 2008, when officials started keeping track of confiscations, according to State data. More than a third were found in Northern State Prison in Newark, which houses the State’s most dangerous gang members, and four associated halfway houses. Officials say the smuggling problem has worsened in recent years as cell phone technology has improved. They note that newer, smaller phones are made with less metal, making them harder to detect. 

“Incarceration should be a time for reflection and rehabilitation, not for continuing criminal enterprises or intimidating witnesses,” Diegnan said. “We should take advantage of the technology we have to ensure offenders aren’t simply moving the bases of their operations behind bars thanks to cell phones.”

New Jersey, though, is not the only state dealing with a phone smuggling problem. About 3,500 phones have been found in California institutions this year, which is more than the entire total seized in 2008. In Texas, officers have found more than 900 phones so far, compared with 1,200 for all of last year.

“Illegal cell phone use by prisoners has become a leading worry throughout the country and has played a leading role in the expansion of gangs both behind bars and on our streets,” said Diegnan. “While we’ve taken aggressive steps here in New Jersey to combat it, these bills would simply boost our efforts and enhance public safety.”

Termination of Middlesex County Sheriff's Officer Upheld

On April 28, 2009, the Appellate Division decided In the Matter of Joan Ivan, Docket No.: A-1070-07T2.  Following a hearing conducted on April 15, 2003, appellant, Joan Ivan (“Ivan”), a Middlesex County Sheriff’s Officer, was suspended for thirty days as the result of disciplinary charges stemming from her alleged failure to truthfully report smoking by a fellow officer while in an official vehicle. In contrast, the officer committing the prohibited offense, after pleading guilty, was given a four-day suspension that could be served use of vacation days. Ivan appealed to the Merit System Board on May 16, 2003.

Thereafter, on August 22, 2003, Ivan was terminated when, in nine attempts over three days, she was unable to requalify for use of her service weapon. She appealed on September 12, 2003 and she filed an order to show cause on September 19, 2003, in which she contended that the Sheriff’s Department had violated her right to due process of law as the result of its failure to conduct a hearing prior to termination. The Department reinstated Ivan and served her with a preliminary notice of disciplinary action on September 29, 2003. Following a hearing on September 30, 2003, Ivan was served, on October 14, 2003, with a final notice of disciplinary action removing her from her position.

The two matters were referred to the Office of Administrative Law for a hearing, where they were consolidated for that purpose without objection. Following the hearing, at which testimony was given by numerous witnesses, the Administrative Law Judge (“ALJ”) recommended dismissal of the charge leading to Ivan’s suspension, but affirmance of the termination decision. No attorney’s fees were awarded. The Merit System Board adopted the ALJ’s decision, and this appeal followed. On appeal, Ivan challenged the Board’s failure to award counsel fees in connection with her appeal from the thirty day suspension, and she challenges the Board’s adoption of the ALJ’s findings with respect to her termination and the ALJ’s legal ruling with respect to the admissibility of expert testimony in connection with her termination.

The Appellate Division affirmed the Merit System Board’s determination in its entirety. Specifically, the Court rejected Ivan’s arguments that: (1) she was given insufficient opportunity to qualify with her weapon; (2) the ALJ should have admitted the testimony of her firearms qualification expert; and (3) she was entitled to counsel fees on her successful appeal from her suspension. After reviewing the decision of the ALJ and the Board in detail, the Court determined the Board’s action was supported by sufficient, credible evidence in the record as well as well-established statutory law and, therefore, was not arbitrary, capricious, and unreasonable.

 

Superior Court, Appellate Division upholds Corzine's Decision to Furlough New Jersey State Employees

On Friday, April 17, 2009, The Superior Court of New Jersey, Appellate Division, upheld the ability of state and local governments to furlough public employees. The court agreed with the decision of the state government that the fiscal crisis that the state and nation currently faces allows for emergency action.

In citing its opinion the court stated, "Given the economic crisis confronting the state and nation, and the fluid and rapidly unfolding circumstances in which we live, we find the statement of 'imminent peril' to be sufficient," said the panel of three appellate judges in their decision.

Union lawyers argued in court the preceding day that the state has not proved it is in "imminent peril," a requirement to pass the emergency rule that authorized furloughs between now and June 30, the end of the current fiscal year. The appeals court did not say whether departments could stagger furloughs over a period of time, leaving that decision for the New Jersey Public Employment Relations Commission. More information on this topic will be reported when the same becomes available.  To read the entire article printed in the Newark Star Ledger click on the link below.

Furloughed Employees

 

Trial Court Authority to Impose Discipline Different From Municipality Upheld

On March 31, 2008, the Superior Court of New Jersey, Appellate Division, decided the case Detective Sergeant Dean Ackermann v. Borough of Glen Rock and Glen Rock Police Department, Docket Number A-2947-07T2. In the case, the parties appealed and cross-appealed from an order entered by the trial court.

Plaintiff has been a member of the Glen Rock Police Department for more than twenty years. He holds the rank of sergeant and the title of detective. Defendants are the Borough of Glen Rock and its police department. On October 3, 2006, Steven D. Cherry, Chief of the Department, served Plaintiff with a disciplinary notice, charging him with acting contrary to good order and discipline and violating Glen Rock’s “No Tolerance Policy” with respect to wrongdoing in the workplace. The notice contained no recommendation with respect to discipline.

Three days later, Chief Cherry served an amended notice of disciplinary action which set forth nine charges. In the amended notice, Chief Cherry recommended that Plaintiff be suspended for three days without pay and be required to attend an approved course in sensitivity training. The charges were based upon complaints by Anna Maria Mattina, the Borough’s first female police officer. She alleged certain conduct by Plaintiff toward her was unwanted and harassing.

Plaintiff denied any wrongdoing, would not accept the proposed discipline, and requested a hearing. The hearing officer sustained the charges, but rejected the recommendation as to discipline. He recommended Plaintiff be suspended without pay for ten days as well as attend an approved course in sensitivity training. The report was submitted to the mayor and council, which accepted his findings but rejected the recommendation for discipline. The council passed a resolution suspending Plaintiff without pay for sixty days, demoting him to police officer and requiring completion of a course in sensitivity training before returning to active duty. 

In response, Plaintiff filed a three-count complaint in lieu of prerogative writ, contending that the evidence presented did not support the findings that were made, the procedure utilized did not conform to the Attorney General’s Internal Affairs policies and procedures that the Borough adopted, and that the increase in penalty was retaliatory.

The trial court, hearing the matter as a trial de novo, concluded that only two of the violations had been proven and that the penalty imposed by the Borough was excessive. The Court directed Plaintiff be suspended for two concurrent periods of thirty days without pay and complete a course in sensitivity training. This appeal ensued.

On appeal, the Appellate Division held that, when hearing a police disciplinary matter de novo, a trial court has the authority to impose a sanction other than that imposed by the municipality. In this case, the Court found no error in directing that Plaintiff not be demoted and instead imposing a suspension and directing attendance at sensitivity training. Moreover, the Court found that although Defendants violated the Attorney General’s guidelines for conducting a disciplinary hearing, the trial court correctly found that the errors did not prejudice the Plaintiff.

         

 

Potential for Reimbursement of Wages Received During Period of Suspension

On March 20, 2009, the United States District Court for the District of New Jersey decided the case of Wade v. Colaner. In the case, plaintiff, a Tinton Falls police officer, was pulled over by New Jersey State Troopers for speeding. Plaintiff was subsequently charged with careless driving, obstruction of administration of law, and resisting arrest. On account of this incident, he was suspended from his position of employment.

Ultimately, plaintiff brought this action alleging excessive force and deliberate indifference. Defendants counterclaimed against Plaintiff for reimbursement of the wages paid to Plaintiff during his suspension and moved for summary judgment as to Plaintiff’s other claims. The Court denied Defendants’ motion to dismiss Plaintiff’s excessive force claim, but dismissed Plaintiff’s deliberate indifference claim. Moreover, the Court granted the Tinton Falls Defendants’ motion for summary judgment finding that Plaintiff was not entitled to a pre-suspension hearing and also granted the motion for summary judgment for reimbursement of the wages paid to Plaintiff during his suspension.

This case shows that a public safety officer who is suspended from his or her employment and is continuing to receive their wages during the period of suspension potentially may have to reimburse their employer for the wages they have received. As a result, public safety officers should be conscious of this possibility in the event they are suspended from employment.

A similar type concept was the subject of previous posts to this blog regarding the 180 day bill recently signed into law. As you will recall, the bill, in essence, allows certain law enforcement officers and firefighters to regain pay status when appeals of termination are not resolved within 180 days. Under this bill, if an officer and/or firefighter has been receiving his/her base salary after expiration of the 180 day period and he/she ultimately loses their appeal, the officer and/or firefighter will be required to reimburse the employing agency of department all of the base salary received during the period of appeal. Certain rules of law such as these make it imperative for public safety officers to be informed regarding all the potential consequences in the event they are targeted for suspension and/or removal.   

 

Defense to Lawsuit Arising Out of Action During Side-Business Not Subject to Reimbursement

On March 16, 2009, the Appellate Division decided Siaw v. Valenzuala. In the case, Defendant Diomedes Valenzuala, a police officer, appealed from the judgment of the trial court denying his claims against his former employer, the Township of Irvington, for indemnification pursuant to N.J.S.A. 40A:14-155 in connection with his defense of a lawsuit against him arising out of his exercise of police powers in arresting Plaintiff.

TheCourt indicated that the central question in the case was whether, at the time Valenzuala lawfully arrested Plaintiff, Valenzuala was acting “in the furtherance of his official duties.” If he stopped to investigate a suspicious incident on his way to the police station in response to a call for him to report there on police business, as Valenzuala maintained, then Valenzuala would be entitled to reimbursement under N.J.S.A. 40A:14-155. If he was engaged in a side-business of “keeping the peace” for a towing company, as the trial judge found, then he was not acting “in the furtherance of his official duties” within the meaning of N.J.S.A. 40A:14-155, even if he acted lawfully in arresting Plaintiff.

The Appellate Division affirmed, finding that the trial court appropriately determined that Valenzuala was engaged in a side-business of “keeping the peace” for a towing company at the time of the arrest and not “acting in the furtherance of his official duties.” As a result, the Court dismissed Valenzuala’s action seeking reimbursement for costs associated with his defense of a civil action filed by Plaintiff. 

This case illustrates the principle that officers who work a side-job may not be reimbursed for defending a legal proceeding brought against them for actions which arose out of their performance of the side-job. Many public safety employees, especially during these economic times, work side-jobs in order to obtain additional compensation. All of these officers, however, should be aware of this case. In the event a lawsuit is brought against you, on account of your exercise of police powers while engaged in the side-job, the potential is great that you will not be reimbursed for defending such a lawsuit.

 

Freedom of Association Claim Permitted to Go Forward

On February 3, 2009, the United States Court of Appeals for the Third Circuit decided the case of LaPosta v. Borough of Roseland. In the case, plaintiff, Joseph LaPosta, a police officer, alleges Defendants, the Borough of Roseland and its Police Chief, retaliated against him after he attempted to join a police organization of which the Police Chief did not approve. Plaintiff’s claims were brought pursuant to 42 U.S.C. §1983 and state tort law. 

Plaintiff was employed as a police officer with the Borough of Roseland. After completing his police academy training, Plaintiff was forced to join the Fraternal Order of Police (“FOP”) union. When Plaintiff expressed an interest in joining an alternative union, the Policemen’s Benevolent Association (“PBA”), the Police Chief advised Plaintiff that neither he nor any other officers were to have any influence from the PBA. Nevertheless, Plaintiff joined the PBA. Thereafter, the Police Chief allegedly retaliated against Plaintiff, specifically by subjecting Plaintiff to smoke from cigarettes, cigars, and scented candles, charging him with insubordination, denying him an earned stipend, belittling him in front of other officers, filing frivolous internal affairs claims against him, and denying him the opportunity to attend career-advancing classes and seminars.

Plaintiff’s complaint asserted six claims: (1) violation of 42 U.S.C. §1983; (2) intentional infliction of emotional distress against the Police Chief; (3) hostile work environment; (4) negligence; (5) intentional interference with prospective economic advantage against the Police Chief; and (6) conspiracy. Both the Borough and Police Chief filed motions to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Thereafter, the United States District Court for the District of New Jersey entered an opinion and order granting the motions. This appeal followed.

The United States Court of Appeals for the Third Circuit affirmed the District Court’s ruling in part, reversed in part, and remanded the case for further consideration. Specifically, the Third Circuit affirmed the dismissal of all but one of Plaintiff’s claims for failing to file a notice of claim under the New Jersey Tort Claims Act. However, the Third Circuit determined the District Court erred in dismissing Plaintiff’s §1983 claim. The Third Circuit held the retaliation claim was not barred by the statute of limitations and should be remanded to the District Court to be adequately analyzed as a claim based on freedom of association.

This case illustrates the importance of obtaining an experienced, qualified attorney prior to initiating an action similar to the one recounted above. There are many procedural hurdles one must follow, to include filing certain notices, to perfect the filing of such a claim. Consequently, it is imperative one obtains a qualified, experienced attorney to ensure their rights are protected. Moreover, this case shows that viable retaliation claims can be pursued against public employers. With the right set of facts, many courts are willing to explore such a claim and, potentially, hold the employer liable for infringing on one's right to join a certain collective bargaining unit.

Court Knocks Down Sign Ordinance that Banned Giant Rat Balloon at Labor Rally

On February 5, 2008, in State v. DeAngelo, Docket No. A-73-07, the New Jersey Supreme Court held that a municipality violated free speech rights by banning temporary signs on public streets, including a 10-foot high inflatable rat at a labor protest. This case was the subject of a previous blog entry wherein our office analyzed the oral argument which took place in September 2008.

The Court unanimously called a Lawrence Township ordinance, which prohibited “banners, pennants, streamers…portable signs, balloons or other inflated signs (except grand opening signs,” unduly restrictive of free speech and expression. Specifically, Justice John Wallace, Jr. wrote that the ordinance “is content-based, does not fairly advance any governmental interest, and is not narrowly tailored to prevent no more than the exact source of that evil that is seeks to remedy.” 

By way of background, in 2005, Wayne DeAngelo, a senior official with the International Brotherhood of Electrical Workers Local 269, was fined $100 and assessed $33 in costs for using the inflatable rat to protest a Gold’s Gym being built in the township without union labor. A trial judge and the Appellate Division panel rejected constitutional challenges by DeAngelo and the union, but a dissenting appeals judge, Jack Sabatino, agreed the ordinance was constitutionally deficient.

In the Supreme Court’s ruling, Justice Wallace said DeAngelo’s protest was protected by the state and federal constitutions, as to both content and location. To support same, he cited U.S. Supreme Court precedents holding that public streets, parks, and sidewalks are traditionally public forums that occupy a “special position in terms of First Amendment protection” and that government cannot restrict expressive activity in such venues without a “compelling reason.”

The Court also rejected the rationale advanced by the township that the ordinance was designed to promote aesthetics and maintain public safety. Specifically, the Court stated, “although they are salutary goals, they do not justify a content-based restriction on free speech” and that an ordinance that prohibits a union from displaying a rat balloon, while authorizing a similar display as part of a grand opening, is content-based.

This ruling is expected to have statewide implications since municipalities across New Jersey have similar ordinances. Therefore, many municipalities will have to rework their own ordinances in order to conform to the ruling. Moreover, according to Andrew Watson, DeAngelo’s attorney, the ruling is a landmark victory for labor activists. Specifically, Watson stated, “this vindicates their [labor union’s] rights to an orderly, non-threatening means of protest.” As such, this case represents another important judicial decision regarding labor protesting and its collision with free speech.

Are Your SLI Payments Being Taxed--Whether They Are or Not--YOU NEED TO READ THIS POST!!

Most recently, I was contacted by Jim Messier, President of the New Jersey Law Enforcement Association, and informed that he received notification from the Association's accountants, McEnerney, Brady & Company, L.L.C., that Sick Leave Injury payments are not subject to state and federal income tax in accordance with Internal Revenue Code 104(A)(1) and Dyer v. Commissioner 71 TC 560 (1979).  The accounting firm opined that when a law enforcement officer is injured in the line of duty and the officer will continue to receive full wages (such as SLI payments), said payments are considered workers compensation benefits and thus not subject to taxation.

Continuing with this notion, the following benefits must be recognized during a period of injury or infirmity that was caused during a line of duty mishap:

  • Federal income tax is not charged on wages received during the time that the Law Enforcement Officer is injured and out of work.
  • Wages received during the time that the Law Enforcement Officer is out of work due to a line of duty injury is also not subject to New Jersey state income tax.
  • Social Security and Medicare with holdings also cease during the time the officer is injured and out of work. 

If the employer continues to withhold taxes during a period of injury or infirmity, a formula must be utilized to compute the amount of wages that are not subject to taxation, and federal and state forms must be completed and attached when filing one's taxes.  Furthermore, if taxes were withheld unjustifiably and the injury occurred within the last three years, the injured Public Safety Officer may file an amendment to his or her taxes using federal tax form 1040x.

I am posting this information for two very important reasons.  First, I want to make all Public Safety Officers aware of this very important exception to the tax code that has the potential to keep more money in an officer's pocket during the time he or she is out of work with a line of duty injury. 

Second, I am reminding all readers of our blog that this web site needs to be used as a forum to exchange information and ideas that are vitally important to the lives and careers of all New Jersey Public Safety Officers.  There are very few forums that allow Public Safety Officers to openly share information that has an impact on one anothers lives and careers.  Therefore, lets use this website as a forums to make all Public Safety Officers aware of issues that are occurring through out the entire state of New Jersey and the Country as a whole.

If you or your department has encountered an issue or problem that you feel is note worthy or important, let me know about it.  I will write about your issue and make all of our readers (which is growing by the day) aware of it so that a discussion can take place and information exchanged that can solve the problem.  I am sure one department's novel issue has already been experienced by another.  The Internet is a great communication tool to exchange important information.  Lets use this forum to our advantage.  Tell me your issues so we can discuss them and solve them together.  Comments to the blog posts are always welcomed and encouraged.

Best--Frank