State's Failure To Make Full Pension Payments Hinders Fund

 

As reported by nj.com, public pension funds may have gotten a much-needed boost from Governor Chris Christie’s landmark overhaul last year, but reports released show the funds continue to be hampered by the State’s failure to make full payments into the plans. 

Christie and Democratic leaders joined together last year and shifted a greater share of the pension costs on to public workers and cut out cost-of-living increases for future and current retirees. The move helped drive the State’s nagging unfunded pension liability from $53.9 billion to $36.3 billion when they revised 2010 figures, the report shows. 

But the State’s pension hole grew by $5.5 billion by the end of the 2011 budget year, largely because Christie followed in the tradition of his predecessors and failed to make a pension payment, an annual actuarial report on the pension funds shows. Overall, the State has only 67 percent of the money it needs to meet its future pension obligation, and that figure is expected to worsen as the State phases in its full pension payment over the next seven years.

The State was supposed to pay about $3 billion into the pension fund this year, but will only be paying about $480 million. Next year, the State will only pay about $900 million of its $3 billion bill, records show.

By 2018, State taxpayers will begin paying more than $5 billion a year for pensions, roughly ten times higher than the partial payment being made in this year’s budget, according to administration estimates. The tab for local taxpayers will rise by about $600 million by 2020, estimates show.

NJ Assembly Holds UP Pension, Health Benefits Overhaul Brokered By Christie, Sweeney

 

As reported by nj.com, Governor Chris Christie and Senate President Stephen Sweeney were poised to announce an agreement on a plan to overhaul health and pension benefits for public employees, but were stymied after the compromise received a chilly reception in the Assembly. “We are not there yet,” said Speaker Sheila Oliver, who found herself wedged between two of the state’s most powerful politicians.

Word of the agreement also drew quick opposition from public labor unions across the state, who said it represented an attack on collective bargaining rights by taking away their ability to negotiate health benefits. 

The plan would require the state’s 500,000 public employees to contribute more money for their pensions and health benefits than they currently do and freezing cost-of-living adjustments for retirees until the pension funds stabilize. The overhaul, which lawmakers have agonized over since Christie took office a year and a half ago, would address two of the most costly issues facing the state.

New Jersey has promised $66.7 billion in medical benefits to current and future retirees, the highest tag among the 50 states, but has not set aside a single penny to pay for it. At the same time, the state has about 66 percent of the assets needed to meet its future pension obligations, ranking it among the worst funded in the nation. 

Oliver outlined the plan to caucus members in a closed-door meeting, where many told her that while changes in the pension plan were needed, they agreed with union leaders that the health benefits should be negotiated and not legislated. More than a dozen union leaders stood outside the room where the Assembly Democrats had gathered, hoping the members of lower chamber would provide a bulwark against the part of the package that addresses health benefits.

Facing a similar lack of support, Sweeney has lined up a small group of Democratic senators who have agreed to join with Republicans to make sure there are enough votes to pass the overhaul, which will be wrapped up in one bill. In a written statement, Sweeney said the plan would save taxpayers $120 billion over an unspecified period of time, while protecting the pensions and health benefits of low- to middle-income workers. Notably, the statement did not include any details about the plan, such as how it would save taxpayers $120 billion.

NJ Public Workers Continue to Retire At Record Rate

 

As reported by nj.com, for the second year in a row, public employees across New Jersey are retiring at a record rate, state figures show. Nearly 15,000 public workers are expected to retire from January through the end of July, a slight increase from the same period last year, when a record number of state employees left their jobs.

The steady rise in retirements comes amid economic uncertainty, with changes in pension and health benefits for public employees remaining at the top of the state’s political agenda. As a result, an increasing number of the more than 500,000 state and municipal employees are choosing to retire rather than risk having their benefits cut by legislators.

“People have a certain set of expectations, and at some point, it just makes sense to retire,” said Jim Ryan, a spokesman for the state Policemen’s Benevolent Association. Ryan said retirements, combined with layoffs, have left police departments across the state understaffed and in many cases without the streetwise experience needed to conduct adequate investigations.

The numbers provided by the state Treasurer’s office show that State Police officers are also retiring at a record pace, a trend that the superintendent recently told a state Senate committee was disturbing. By the end of July, records show, 144 state troopers are expected to retire, significantly higher than any 12-month period since at least 2000. In the previous decade, an average of 61 state troopers retired each year.

Overall, more than 20,000 public workers retired last year, a 60 percent increase over 2009 and the highest number in at least a decade, according to the state Department of the Treasury. The unexpected surge may eventually force the state to pay more money into its troubled pension fund. Every three years, the state examines such assumptions as retirement rates and employee levels, which serve as the basis for pension payments, and adjusts accordingly. The next study will look at the three-year period from June 2008 to June 2011, when retirements jumped.

While public employees ponder whether to remain at their jobs or retire and lock in their benefits, Governor Chris Christie and Democratic leaders are trying to work out the details of health and pension reform. Under all of the proposals that have been floated so far, public employees who have spent a prescribed amount of time on the job, generally 25 years, would not have their benefits cut upon retirement.

Christie Signs Bill Requiring All New Public Employees To Move to NJ Within Year of Hire

 

As reported by nj.com, Governor Chris Christie signed a bill into law that will require public workers hired after September 1, from teachers and cops to all local, county and state work employees, to live in New Jersey. New hires outside the state’s borders will have a year from getting a job to pack up and move. Current public workers will not be affected.

New Jersey is the first state in the nation to enact a law mandating a residency requirement for its public employees, according to the National Conference of State Legislatures. Pennsylvania law requires only its civil service employees to live within the state, according to the New Jersey Senate Majority officials.

“With this law we are simply saying that as matter of policy, when it comes to providing public employment opportunities in New Jersey, we are looking to put our own residents first,” said Senator Donald Norcross, one of the bill’s sponsors. “This will help support our workforce, while at the same time keeping our tax dollars in the state.  This is not only sound public policy, but it makes good economic sense.” 

Christie vetoed an earlier version of the bill in February, but only to seek some technical changes. In his veto message, he noted: “I commend the sponsors for their efforts to increase employment opportunities for New Jersey residents, by ensuring that citizens throughout the state enjoy access to public positions in their communities.” 

Lawmakers agreed with the Governor’s changes to delay the effective date of the law until four months after its enactment, and expand the panel to review hardship requests seeking an exemption from the residency requirement from three to five people.

The law would apply to all public employees, including state, county and municipal governments, boards, agencies, commissions, public schools and universities. But some exemptions will be granted, such as for visiting college professors and other employees “requiring special expertise or extraordinary qualifications in an academic, scientific, technical, professional, or medical field or in administration.” Employees who are required to spend a majority of their time outside New Jersey would also get a pass on the law. Other public employees could apply to a committee for an exemption because of a “critical need or hardship.”

As of mid-January, 5,814, or 8 percent, of the state’s 71,953 employees lived out of state, according to the Department of Treasury, although the law will not apply to anyone who held a job before the measure was enacted. No figures were available for all public workers.

Rev. Al Sharpton Criticizes Governor Christie

 

As reported by nj.com, the Reverend Al Sharpton stepped into New Jersey’s budget battle, joining a chorus of union leaders criticizing Governor Chris Christie’s economic policies and urging New Jerseyans to push back against a nationwide campaign to weaken organized labor. At rallies in Newark, Trenton, and Vineland, Sharpton said the state would be violating its workers’ civil rights if it reneges on its pension commitments. He also chastised Christie for feuding with teachers, and warned that governors across the country are on a mission to balance their budgets at the expense of the working class.

“We can cut back people’s pensions. We can lay off workers. We can close hospitals, schools, psychiatric centers. We can deal with changing tenure for teachers-but don’t touch the rich,” Sharpton said at Shiloh Baptist Church in Trenton. “They have become the sacred cow that can’t be touched…while workers become the slaughtered lamb.”

Two national union leaders joined Sharpton onstage and blamed Wall Street’s recklessness for the budget deficits afflicting Wisconsin, Indiana, Ohio, New Jersey and other states where governors have squared off with unions. “That’s what this coordinated attack is. It’s saying to workers, ‘I know you didn’t create the problem, but you solve it,” Randi Weingarten, president of the American Federation of Teachers. “That’s what we’re fighting.”

Christie has called for an overhaul of the state’s pension and health benefits systems for public workers, but has yet to hammer out a deal with the Democrats in control of the Legislature. The two sides have until June 30 to settle on a budget deal for the coming fiscal year. In recent weeks, that debate has been a bitter back-and-forth, with the governor accusing the Legislature of inaction at this town hall events while Democrats fight back in their budget hearings. At the Trenton rally, two Assembly Democrats said Christie was bullying the working class to burnish his conservative credentials.

At the rally in Newark, Sharpton urged 150 anti-violence activists, clergy, and workers to unite against the governor’s efforts to undermine organized labor and implement damaging economic policies. “We have fought governors before and we will stand up to this one,” he said.

Unions have staged several rallies in Trenton this year echoing Sharpton’s message, including one headlined by the AFL-CIO national president in February that drew more than 3,000 people.

Newark's Murder and Violent Crime Rates Increase Amid Police Layoffs

 

As reported by nj.com, three fatal shootings in the last two days pushed Newark’s homicide total to 29 this year, a 71 percent jump in killings compared with the same period in 2010, as violent crime surges following police layoffs. Between January 1 and April 17, Newark has seen marked increases in homicides, shootings, and thefts, while overall crime rose by 21 percent compared with the same time last year, according to Newark’s quarterly crime statistics obtained by the The Star-Ledger.

The report shows Newark has suffered steady increases in violent crime and property crime since the city laid off 167 police officers in November. Between January 1 and April 17, shootings increased from 56 to 72 and robberies jumped from 418 to 462. Auto thefts saw the sharpest rise, leaping by 39 percent, from 743 in 2010 to 1,035 during the same time this year, according to the report.

“I think it just comes down to the people on the street. The bad guys know we’re not out there, and it has an effect on how they operate,” said James Stewart, Jr., vice president of Newark’s Fraternal Order of Police. “That’s why the shootings have increased dramatically, that’s why the homicides are up.” Stewart said the layoffs have made criminals more brazen, saying the lack of police manpower makes gang members and drug dealers more likely to carry weapons and to use them in the open.

While crime has increased, police productivity has also continued to slide. The total number of arrests made by city police officers between January 1 and April 17 dipped by 22 percent compared with 2010, according to statistics, while the number of parking summonses and moving violations issued also dipped. The trend continued a decline that started last year. Arrests and summons totals dropped in the second half of 2010, with some of the largest decreases coinciding with bitter and hostile negotiations between the unions and the administration.

Stewart says the lack of manpower leaves patrol officers on the defensive, responding to calls for help rather than actively trying to make arrests or issue summonses. “Not that we had free time, but now you’re just going job, to job, to job,” he said.

The violent opening to 2011 is in stark contrast to last year, when the department enjoyed one of its most successful stretches in recent memory. Crime dropped 13 percent during the first three months of 2010 and Newark police crippled one of the city’s oldest drug havens in a massive raid at Academy Spires apartments.

Christie Estimates Changes in Employee Benefits Will Save $870M Per Year

 

As reported by nj.com, Governor Chris Christie estimates his plan to overhaul the state’s public employee health benefits system will save more than $870 million a year by 2014 by shifting significant percentage of the costs to employees and future retirees, according to the Treasury Department.

In the most detailed explanation of the proposal to date, Treasury spokesman Andrew Pratt said the governor wants to gradually increase state employee health benefit contributions over three years, requiring them to pay 10 percent of premiums this July and climbing to 30 percent by July 2014. New workers would immediately pay 30 percent. Currently, state employees pay 1.5 percent of their salary for medical benefits. Most Democratic lawmakers and budget observers believed Christie wanted employees to start paying 30 percent of their premiums immediately and assumed that was how he justified savings of $370 million in his proposed state budget.

In response to requests from The Star-Ledger, the administration says the final tally is more than $870 million and the proposal would involve much more than increased contributions, such as tiered plans, increased co-pays and lengthening the eligibility requirements for post-employment health care. The savings represent about one-third of the $2.5 billion the state expects to pay in employee medical costs this year, Pratt said. They would also dwarf initial estimates of a proposal by Senate President Stephen Sweeney, who wants contributions to be based on salary.

Democratic lawmakers who were already skeptical about the $370 million in savings in the proposed budget expressed more disbelief about the latest figures, with the chairman of the Senate Budget Committee calling them “ridiculous.” The Christie plan would not change payouts for current retirees and workers with at least 25 years on the job when the measure takes effect would not be required to pay more when they retire. But, all others would have to pay 30 percent after they retire and workers would not be eligible for post-retirement health coverage unless they work for 30 years, up from 25 years.

With no Republican bill and a lack of Democratic support for Sweeney’s proposal, Christie’s budgeted $370 million in health benefit savings is on shaky ground. It is one of several uncertainties in the governor’s budget. The State Supreme Court is considering whether Christie needs to restore up to $1.6 billion in education cuts and the administration has yet to explain how it plans to achieve $300 million in Medicaid savings through a federal waiver, which faces layers of approvals. “There could be a lot of problems,” said Assembly Budget Committee Chairman Lou Greenwald. “I hate to see him strike out on all three of these.”

To read the article in full, click here.

CWA Offers to Pay More Than 20 Percent of Health Benefits

 

As reported by nj.com, the state’s largest public employee union unveiled its plan for workers to contribute more for their medical coverage in hopes of convincing lawmakers and the public that real savings can be achieved at the bargaining table. 

The Communications Workers of America, which represents about 40,000 state workers, detailed a plan union leaders say would increase employees’ share of insurance premiums to about 14 percent and save taxpayers more than $200 million by 2013. The plan calls for increased monthly contributions and higher co-pays for doctor’s visits and prescription drugs.

Union leaders say they were forced to take the negotiations public after Governor Chris Christie made it clear a week ago that he was not interested in negotiating medical benefits. Those details should be handled through legislation, he said. “Governor Christie professes to love collective bargaining, but we have yet to see it,” said Bob Master, CWA political director. “What’s going on in New Jersey is no different than what’s going on in Wisconsin and Ohio.”

Momentum is building to require all public workers to contribute significantly more for medical benefits. Christie and Senate President Stephen Sweeney say broad-based legislation is the only way to bring parity between public and private workers and save the state millions. “We’re changing New Jersey, and the CWA has to be part of it,” Christie said at an appearance in Newark. “I know they don’t like the fact that someone will go to the Legislature and fight for the taxpayers rather than fleece the taxpayers, which they’ve been doing over history. Sorry, there’s a new game in town and they’re going to have to get used to it.”

Hetty Rosenstein, state director of CWA, said state workers understand they need to contribute more, but believe the terms should be negotiated, as they have been for decades. While the CWA is the largest state employee union, it represents only a fraction of the 510,000 public workers in the state, and Christie wants the health benefits law to cover all public workers. Christie is hoping to save more than $300 million in the proposed budget with the reform package. Rosenstein said she is trying to reach out to other public employee unions in hopes of having a “mass negotiation” that would help achieve the savings Christie is seeking while preserving the right to collectively bargain medical benefits.  

Under the CWA plan, workers would continue to pay 1.5 percent of their salaries toward medical costs but would also kick in an additional 5 percent of their premiums by 2013. The hybrid model is designed to take into account a worker’s salary. By the end of the contract, average workers would pay about 13.5 percent of their medical premium costs, about $210 a month for family coverage. Rosenstein said with co-pays and other changes, workers would pay about 22 percent of their premiums. Christie wants all public employees to pay 30 percent of their premiums, about $475 a month for family coverage. Sweeney wants workers to pay 12 to 30 percent of premiums, based on salary.

NJ Public Employee Retirement On the Rise

 

As reported by nj.com, more than 20,000 police officers, firefighters, teachers, and other public employees put in their retirement papers last year as momentum was building for sweeping health and pension reform in Trenton, state figures show. That is a 60 percent jump from 2009 retirements and the highest in at least a decade, according to the Division of Pension and Benefits.

Under nearly all the reform proposals circulating in Trenton, public employees would pay more for pension and health benefits, but would escape the additional costs if they retire before the reforms were enacted. “There has been a direct assault on the benefits that public employees have earned and fought for over the last 40 years,” said Dominick Marino, president of the state chapter of the International Association of Firefighters. “People were attracted to these jobs because of the certainty, now there is no certainty, and people are retiring.”

While those who put in retirement papers can opt to stay, the vast majority retire, officials say. Of the 20,327 public employees who put in for retirement, more than half were state and local workers. Specifically, retirement among police and firefighters swelled by 45 percent. Overall, 7,132 teachers retired last year. In the decade before, no more than 4,872 teachers called it quits in any given year, records show.

Pension and health benefit reform will be high on the agenda in Trenton this spring. Governor Chris Christie wants all public employees, state and local, to begin paying 30 percent of their health insurance premiums starting next fiscal year. Currently, public employees are required to pay at least 1.5 percent of their salary toward health benefits.

Christie has warned that if Democratic lawmakers refuse to go along with his proposal, or a similar plan, he would not be able to deliver an additional $190 million in property tax relief to seniors and middle-to-low income residents. State Senator Stephen Sweeney wants to phase in the increases over seven years and apply the rates on a sliding scale based on a employee’s salary. Under Christie’s plan, a teacher who makes a $66,000 salary would pay about $5,200 a year for health insurance. Under Sweeney’s plan, the same teacher would pay about $3,610.

In general, public employees with 25 years of service can retire and receive medical benefits at no cost, but that would change under both Sweeney’s and Christie’s plan. Current retirees, including those who retire before any proposal is enacted, would be protected from the changes. However, Christie has suggested he is willing to make some adjustments retroactive, even if it prompts a legal challenge.

Christie Says He Backs "Responsible" Collective Bargaining

 

As reported by app.com on February 23, 2011, New Jersey Governor Chris Christie, who gained a national reputation fighting the state’s teachers and public employee unions, said that organized labor should have collective bargaining rights. One day after proposing a new state budget that requires public employees to pay more for pension and health benefits, Christie told MSNBC’s Joe Scarborough that he supports “responsible” collective bargaining, but quickly added, “We haven’t had that in New Jersey.”

Christie’s comments come as Wisconsin Governor Scott Walker attempts to limit collective bargaining to help balance the state’s budget. Walker’s proposals have upended Statehouse operations there. A solidarity protest is planned outside the New Jersey Statehouse on February 25, 2011.

Christie, a Republican who has accused his Democratic predecessor of being too lenient with state workers, said he does not think the bargaining process should be polite. “It should be an adversarial situation,” he said. “Somebody should be representing the taxpayers.”

Former New Jersey Governor Jon Corzine, a Democrat, negotiated state worker givebacks including an 18-month wage freeze and furlough days. Union workers’ contracts expire in June and leaders of the state’s largest union, the Communication Workers of America, say Christie has yet to meet with them. Even if Christie favored ending collective bargaining, he would not get support from the Democratic majority in the Legislature, especially not in 2011, when all 120 legislative seats are up for re-election.

Labor leaders also were vocal in opposing Christie’s efforts to privatize toll collections on the New Jersey Turnpike and Garden State Parkway. Christie’s second budget assumes millions in savings from privatizing certain, unspecified services and agencies. A task force told the governor in July that New Jersey could save $200 million a year by privatizing toll collections, prison food and medical services and other government services.

There are about 450 full-time and 175 part-time toll collectors on the Turnpike and Garden State Parkway. Longtime toll collectors earn an average of $65,000 a year. Toll collectors protested on February 23, 2011 outside the Turnpike Authority offices in Woodbridge. Union leaders say the administration is moving forward with its plan even after the union offered $16 million in wage and benefits concessions. A private contract could be awarded as early as April.

Prior efforts to privatize government functions have not always gone well in New Jersey. Long lines, frustrated customers and wasted millions resulted in a previous attempt to privatize motor vehicle inspection facilities.

Gov. Christie Goes After State Worker Benefits to Fund Tax Cuts & Credits

 

As reported on trentonian.com, New Jersey Governor Chris Christie held fast to his national reputation for fiscal discipline amid the widespread financial crisis that has hit the United States, unveiling a $29.4 billion state budget that calls for heftier contributions from state workers for pension and health care benefits.

Christie proposes paying $500 million into the state’s severely underfunded pension system, the minimum required under a new state law to get the state to quit skipping its payments. But Christie says he’ll make the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more. Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan.

Christie’s carrot-and-stick budget plan also targets public workers’ health care. His plan calls for additional property tax credits to poor, disabled and senior households, but only if the Legislature significantly increases public workers’ health insurance contribution. Specifically, Christie wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for low-income, senior and disabled homeowners.

Unions plan to rally at the Statehouse on February 25, 2011 in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees’ benefits are among the issues raising ire. In a speech at the American Enterprise Institute in Washington, Christie urged elected officials to follow his example in addressing spending and debt, and big-ticket items such as pensions and other benefits. “It’s time to do the big things-the really big things,” he said.

In New Jersey, Democratic leaders in the Legislature complained that Christie, through his budget, pits one group of middle-class residents against another. However, the League of Municipalities, an association of municipal mayors, says it’s pleased Christie’s budget proposal holds the line on spending and aid to towns.

Senator Sweeney to Unveil Bill Requiring State Employees to Contribute More for Medical Benefits

 

As reported by nj.com, Senate President Stephen Sweeney will unveil a plan that aims to slash the State’s huge medical costs by requiring public employees to kick in significantly more to health benefits, according to three officials familiar with the proposal.

The Sweeney plan shares much common ground with Governor Chris Christie’s reform agenda and signals significant momentum in Trenton for sweeping changes to public medical benefits. Sweeney is expected to unveil the plan at the Statehouse on February 15, 2011, one week before Christie delivers his proposed budget to the Legislature.

The Democrat’s plan would provide immediate savings and as much as $1 billion annually within seven years, according to the officials, who requested anonymity because they were not authorized to speak publicly on the proposal. Under Sweeney’s proposal, all public employees would pay a percentage of their premium instead of the current system that requires them to pay at least 1.5 percent of their salary. The increases would be phased in over seven years and would be applied on a sliding scale depending on the employees’ salary. 

For example, in the first year, public employees who make less than $30,000 would pay 2 percent of their premium, while those who earn more than $100,000 would pay 12 percent. When fully implemented after the seventh year, the lowest income workers would pay 12 percent of their premiums, while top earners would pay 30 percent. The annual payments would range from $2,280 to $5,700 a year.

Christie has called for all public employees to pay 30 percent of their premiums on a gradual basis, regardless of income. Current retirees, most of whom pay nothing for their medical benefits, would not be subject to the increase under both the proposals advanced by Christie and Sweeney. All increases would go into effect at the start of the next union contract. Like Christie, Sweeney will also call for the creation of a multi-tiered benefit plan where employees can pay less for less coverage and more for increased coverage.  

Unlike the laws governing public pension plan that typically require payments each year to fund the current and future costs, retiree medical benefits rules allow states to “pay as you go,” which means they pay on the current cost each year and ignore the long-term price tag. For New Jersey, that long-term price tag is nearly $67 billion, about $13 billion more than the State’s pension deficit. While the pension funds have $48 billion on hand, the State has not saved a dime for medical benefits.

New Jersey has the highest unfunded liability and annual medical benefit costs in the nation, according to an analysis by the Center for State and Local Government Excellence. As of the latest report, there are 394,521 active and retired employees enrolled in the state-administered health benefit plan. This includes active and retired employees from municipalities and school districts who participate in the state plan. Under Sweeney’s proposal, towns would be temporarily blocked from joining the state system to help the fund stabilize.

Democrats Fight Gov. Christie's Plan to Privatize NJ Government Functions

 

As reported by nj.com, Democrats are pushing back against Gov. Chris Christie’s plan to privatize some state government functions by calling for a change in the state constitution to put a short leash on agencies that want to hire private firms.

Under a plan discussed in the Assembly State Government Committee, state and local government agencies would not be able to spend more than $250,000 on a contract with a private company for services government already provides, unless they can show it would save money without creating new fees or fare hikes, and will not reduce quality. Companies would have to give the employees the same pay and benefits as government workers with similar jobs. Unions would have a chance to review the agency’s cost estimates and propose their own cost-saving measures. Contractors would also have to offer available jobs and help to laid off public employees.

“I don’t believe (privatization) should be done just on the backs of union employees by taking livable wages and decimating them to minimum wage so the wealth flows up to the top again,” said Assembly State Government Committee Chairwoman Linda Stender. Christie spokesman Kevin Roberts called the resolution “bad legislation” that would “enshrine a special interest giveaway in the New Jersey Constitution.”   

A Christie administration task force last year recommended privatizing functions like health care for prison inmates, toll collections, state parks, highway rest stops and career centers for the unemployed. The task force estimated the state government could save $210 million through the changes. The New Jersey Turnpike Authority recently put out a request for proposals that calls for toll collectors to make $12 per hour, less than half what experienced employees now make. Democrats said they were trying to abuse and waste that occurred in the 1990s with the privatization of vehicle inspections and the installation of the E-ZPass toll system.

The Committee did not vote on the resolution to amend the constitution. But lawmakers have the power to put it on the ballot this fall without any action from the governor, if they get 24 of 40 votes in the Senate and 48 of 80 in the Assembly. Democrats hold 24 seats in the Senate; 47 in the Assembly. The resolution was opposed by business advocacy and championed by organized labor.

Union officials said the quality of services would decline under the private sector. “The bottom line is profit. Profit at all costs,” said Ray Stever, president of the New Jersey State Industrial Union Council. “Their point is to come in here and use our taxpayer dollars to line their pockets.” 

Please continue to check this blog periodically to ascertain updates regarding any and all efforts to privatize government functions. It goes without saying that such an attempt will have a direct impact on public employees, to include New Jersey Public Safety Employees.

NJ Republican Propose Pension Reform Legislation

 

As reported by nj.com on February 8, 2011, Governor Christie’s plan to drastically change the State’s troubled pension system was introduced by Republican lawmakers on February 7, 2011, but Democrats who control the Legislature indicated they will push their own plan instead.

Assemblymen Declan O’Scanlon and Gary Chiusano sponsored Christie’s proposals in the lower house, while State Senator Joseph Pennacchio said he would introduce them in the upper house. The 139 page bill mirrors ideas Christie first laid out in the fall and would only affect future retirees. “We’re in dire shape and we’re trying to save the system,” said O’Scanlon.

The State’s pension fund faces a $54 billion shortfall, brought on by investment losses, increased benefits, growth in the number of public employees and the State’s decision over the years to repeatedly reduce or skip payments. Last year, Christie skipped a $3.1 billion payment. The proposals would not affect already-retired workers. Among the biggest changes:

·         All public employees would pay 8.5 percent of their wages towards pensions

·         The retirement age would be raised to 65 for most workers. To retire early, employees would need to have accumulated 30 years on the job, rather than 25, and would be docked one-quarter of 1 percent for every month of their age under 65

·         Pensions for most workers would be calculated on a five-year average of their highest salaries, up from three

·         The 9 percent pension bump given to employees 10 years ago would be rolled back for current and future employees

·         Police and firefighter retirees would see their maximum benefit shrink from 70 percent to 65 percent of their salaries

·         Annual cost of living adjustments would be eliminated

Democrats also promoted their own proposal outlined in January. That plan would create joint labor/management boards to administer the system; force employees to pay more if the fund’s fiscal health declines; roll back the pension boost or make employees pay more for it; and eliminate cost of living adjustment for new and recent hires.

“The Senate President has put forward a plan that would blow up the pension system as it currently exists and recreate it so it works and is no longer a political football,” said Chris Donnelly, a spokesman for Senate President Stephen Sweeney. “The Governor’s plan is simply more of the same that got us to where we are now.”

Court Rules Healthcare Contribution Legislation is Valid

 

On January 20, 2011, a New Jersey Superior Court Judge rejected an attempt by various public employee unions to overturn pension changes for new government employees enacted early last year. The laws challenged required new employees to pay 1.5 percent of their salaries toward current health benefits and 1.5 percent of their pensions after they retire. The laws also limited pensions to full-time employees and capped payments of unused sick time to $15,000.

The decisions, released by the Honorable Linda R. Feinberg, were largely expected.  The Communication Workers of America, AFL-CIO, and the American Federation of State, County and Municipal Employees all challenged the laws as vague and unconstitutional.  New Jersey’s largest teachers union, the New Jersey Education Association, the Teamsters Union, and the Fraternal Order of Police argued the Legislature overstepped its authority and that these new laws amounted to an unlawful “taking” by the government.

Feinberg rejected these and other arguments and dismissed the lawsuits “with prejudice,” meaning that the unions could not bring another lawsuit again on the claim. Please click on the links below to read the decisions in their entirety.

 

CWA Decision

NJSPBA Decision

Christie Seeks to Propose Increase in Healthcare Contributions for Public Employees

 

As reported by nj.com on January 13, 2011, Governor Chris Christie proposed significantly higher health insurance premiums for hundreds of thousands of public workers in New Jersey, saying overly generous benefits are threatening to bankrupt the system.

Christie told a town hall audience in Bergen County that state and local workers, teachers, police, and firefighters must begin paying more for their medical and dental benefits if the system is to remain afloat. The health benefits fund is $67 billion shy of meeting its eventual obligations.

Christie wants benefits changes that make the health insurance system more like the private sector or the federal government, with employees paying about one-third of the costs of whatever benefits plan they choose. The government picks up the other two-thirds. That would amount to a significant increase from the 1.5 percent of salary employees now pay. A teacher earning $60,000 now pays $900 a year toward a plan that costs $22,000, Christie said. Under his new proposal, that teacher would contribute $7,333 a year for an identical plan. The changes also could result in inferior benefits, as some workers would be forced to accept plans with higher deductibles and co-pays or limited choice of doctors, to keep down costs.

Christie said health benefits for current workers and retirees cost New Jersey taxpayers $4.3 billion a year and growing. He said the State cannot afford to have worker benefits eating a larger and larger portion of state, local and school budgets. The Governor also renewed his call for changes to the pension system which include: raising the retirement age to 65, from 62, rolling back a 9 percent pension increase granted a decade ago and requiring all workers to contribute 8.5 percent of their salaries toward retirement, a higher portion than all but police and firefighters pay now. He said adopting major changes to the pension system this year would cut the funds’ $34 billion unfunded liability in half in 30 years.

As one can see, Governor Christie’s looming healthcare proposals will have a significant impact on New Jersey public safety employees going forward. The contributions that members currently pay could become significantly higher, while the level of benefits they currently receive could drastically decrease. Please continue to check this blog periodically to ascertain updates regarding the impending proposals.   

NJ Assembly Tables Vote on Bill to Allow Exceptions to Proposed Cap on Police and Fire Raises

As reported in the Star Ledger on October 26, 2010, Governor Chris Christie joined with the Democratic Essex County Executive, Joe DiVincenzo, to stop a legislative effort to water down his proposal to cap public employee raises.

Democratic lawmakers were trying to pass a bill that would have allowed exceptions to Christie’s proposal for a so-called “hard cap” on salary increases in public worker contracts. The bill, introduced last week, was not only opposed by Christie, but DiVincenzo and some mayors as well. The Assembly had been scheduled to vote on the bill, but the bill was forced to be tabled after a determination that key support from Democratic members was lost. Therefore, an announcement was made that the bill was being shelved after a frenzied week of lobbying by DiVincenzo and others aligned with the Governor.

Speaker Sheila Oliver and Senate President Stephen Sweeney summoned reporters to a news conference last Thursday to announce their proposal to reform the rules governing salary arbitration for public worker unions. In short, arbitration is a process that allows an “independent referee” to decide salaries when government entities cannot work out their differences with labor unions like those that represent police and firefighters.

The Oliver-Sweeney bill called for arbitrators to, among other things, take into account new statutory caps on property tax hikes and the economic climate of the region. However, it did not include a “hard cap” on pay raises which Christie and DiVincenzo are pushing.

Christie spokesman Michael Drewniak repeated the governor’s support for a tough salary cap and issued another call for the Legislature to pass the tax-control measures proposed by Christie as part of his “tool kit” agenda. “A hard cap would bring meaningful collective bargaining reform and is essential to finally control property taxes for every New Jersey homeowner,” Drewniak said. “Gov. Christie urges the Legislature to fulfill the commitment it made when it passed the 2 percent property tax cap and enact real arbitration reform and the other necessary tool kit bills without further delay.”

Application for Attorneys' Fees to Enforce Interest Arbitration Award Denied

 

On June 25, 2009, the Appellate Division decided IAFF, Local 1197 v. Township of Edison, Docket No.: A-0194-08T1. In the case, IAFF, Local 1197 appeals from an order entered by the trial court on August 4, 2008, denying its motion for an award of attorneys’ fees and costs incurred in this action to enforce an arbitration award against defendant Township of Edison (“Township”) and for interest on the arbitration award.

Plaintiff is the exclusive representative for firefighters and certain other emergency workers employed by the Township. A collective bargaining agreement between the parties had been in effect from January 1, 2001 to December 31, 2004. The parties engaged in negotiations, but were unable to reach an agreement on a new contract. 

Consequently, on May 12, 2005, plaintiff initiated compulsory interest arbitration by filing a petition with the Public Employment Relations Commission (“PERC”). The proceedings ultimately resulted in a decision by the arbitrator on April 7, 2008, which granted the affected employees retroactive and future salary increases.

On April 25, 2008, plaintiff’s counsel wrote to the Township and inquired as to when the arbitration award would be implemented. The Township responded that the award would be implemented when the new agreement was executed. Plaintiff asserted that arbitrator’s award should be implemented immediately. On May 8, 2008, the Township sent plaintiff a draft of the new contract. Plaintiff responded on May 22, 2008 and informed the Township that the salary rates in the draft agreement had not been calculated correctly. Thereafter, Plaintiff provided the Township with its own salary schedule.

By letter dated May 29, 2008, the Township advised Plaintiff that it was reviewing the salary rates submitted by Plaintiff to determine if they were correct. The Township also informed Plaintiff that retroactive payments would be made as soon as it concluded its review of the salary rates. 

On May 30, 2008, Plaintiff filed a petition in the trial court to enforce the arbitration award. On June 9, 2008, the Township advised Plaintiff that it had completed its review of the salary rates submitted by Plaintiff and had determined that the rates were correct. The Township informed Plaintiff, however, that retroactive payments could not be processed until it received information concerning contributions by the employees to the Township’s deferred compensation plan. On July 1, 2008, the Township provided Plaintiff with its calculations of the retroactive payments due to the affected employees.

The trial court heard oral argument on July 3, 2008. The Township did not oppose Plaintiff’s application to enforce the arbitration award, but argued that the court should not award Plaintiff attorneys’ fees, costs, or interest on the award because it had been actively implementing the award.

 

The court stated on the record that it would enforce the award, but reserved decision on Plaintiff’s application for attorneys’ fees, costs, and interest on the award. On July 9, 2008, the salary increases were implemented and retroactive payments were included in paychecks issued on July 23, 2008. On August 4, 2008, the trial court entered its order denying Plaintiff’s application for attorneys’ fees, costs, and interest. Specifically, the court found: (1) the implementation of the award was complex and time consuming undertaking; (2) the Township acted in good faith and made a timely effort to implement the award in the face of challenging circumstances; and (3) there was no evidence that the Township sought to challenge or avoid compliance with award. This appeal ensued. 

The Appellate Division affirmed the trial court’s determinations. The Court found that, under the Uniform Arbitration Act, the award of attorneys’ fees, costs, and interest are committed to the sound discretion of the trial court. Although the Township did not implement the award immediately, the record shows the Township acted with reasonable promptness. Specifically, the Township took steps to ensure the Plaintiff agreed with its calculation of the new salary schedule and the retroactive payments required by the award. Moreover, the Court noted that some of the delay in implementing the award was attributed to Plaintiff. As such, the Court determined that the trial court did not abuse its discretion by refusing to award Plaintiff attorneys’ fees, costs, and interest on the arbitration award.

CWA Tentatively Agrees to Wage Freeze and Furloughs

 

On June 3, 2009, the State of New Jersey’s largest public employee union indicated it would accept a wage freeze and unpaid furlough days to help reduce spending under a tentative deal according to Governor Jon Corzine.

Corzine called the agreement with the Communication Workers of America “very important for our budget to make sure that we get something that is a very substantial giveback.” According to Corzine, negotiations are continuing with other unions along with CWA.

Corzine stated, “There is a tentative agreement on wage givebacks and furloughs that has yet more details to be ironed out, and that has to be appropriately negotiated with other unions. I expect there will be an agreement on the terms that are negotiated at the collective bargaining table, not just with CWA but with all of the various parties that are involved.”

Although details of the deal were not provided, senior Democratic officials told the Star Ledger the pact would include ten (10) furlough days in the budget year starting July 1, along with a wage freeze and some “bankable” paid personal days that workers could take in the future.

Senate Budget and Appropriations Committee char Barbara Buono said the tentative agreement, if approved by other unions, would lead to at least $300 million in savings for the $28.6 billion budget proposed for the new fiscal year. 

Corzine imposed two furlough days before the current budget year ends June 30 and was seeking 12 more days in the new budget. Union members have protested the furloughs and criticized the Governor

Appeal of Removal for Failure to Complete PTC Course Dismissed

 

On June 8, 2009, 2009, the Appellate Division decided In the Matter of Tanya Johnson, Docket No.: A-0482-07T2. In the case, Tanya Johnson appealed from a final decision of the Merit System Board (“Board”) terminating her employment as a parole officer recruit.

In her position as a recruit, Johnson was required to complete a Police Training Commission (“PTC”) course. She began the basic course on January 9, 2006. On March 24, 2006, she failed a test for unarmed defensive tactics. She was given remediation training, but on March 29, Johnson failed the test again and was dismissed from the PTC course.

On the same date, March 29, 2006, Johnson was served with a notice of dismissal from her position as a parole officer recruit. On March 31, 2006, she was served with a preliminary notice of disciplinary action for failure to comply with N.J.A.C. 4A:2-2.3(a)(11), which required her to successfully complete all of the instructional areas of the training cycle. She was removed effective April 4, 2006, and a departmental hearing was held on July 19, 2006. The charge was sustained.

Johnson appealed to the Department of Corrections (“DOC”) Training Academy on April 20, 2006. The Training Academy, however, was not the proper venue for the appeal and Johnson’s counsel was advised that the appeal had been filed with the wrong party and had to be filed with the PTC. The appeal was not sent to the proper venue until almost a year after her dismissal, however.

Ultimately, the matter was referred to the Office of Administrative Law (“OAL”) and, thereafter, the appointing authority moved to dismiss on the grounds that the appeal was not timely filed with the PTC. The administrative law judge (“ALJ”) granted the motion and the matter was dismissed with prejudice. Johnson appealed to the Board and the Board affirmed the ALJ’s dismissal of the appeal. However, the Board dismissed the appeal without prejudice. This appeal ensued.

Since the dismissal of the appeal was without prejudice, the Appellate Division held the matter was not ripe for appeal because it did not know whether Johnson was ultimately successful in having the PTC accept her untimely appeal. Although Johnson argued that the Court should order a preliminary hearing on the merits, the Court determined it could not do so since Johnson has not complied with the procedural requirements for an administrative hearing. Accordingly, the Court dismissed the appeal without prejudice because is interlocutory.     

New Article Addresses "Public Pension Bomb" in New Jersey

On May 12, 2009, Kate Benner published an article entitled “The Public Pension Bomb” in Fortune Magazine. The article addresses how states all across the country, for many years, have been starving their retirement plans. More importantly, however, the article focuses upon how the crisis is playing out in New Jersey, where the bill is coming due and the State does not have the money to pay it.

According to Benner, the New Jersey public pension situation is dire. In June 2008, the State estimated that the plan, one of the nation’s largest covering teachers, state employees, firefighters, and police officers, had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion. A new estimate of underfunding is due in July.

Benner also indicated that, overall, states nationwide have shortchanged the retirement programs that cover teachers, police, and other public employees. Now, the stock market plunge has wiped out billions of dollars from already underfunded plans. California, New York, and Illinois are among the states scrambling to plug multibillion dollar holes in their pension systems. As a result, these growing obligations raise the specter of higher taxes, diminished services, or even another round of costly federal bailouts.

Lastly, the article traces a 20 year time line to figure out how New Jersey dug itself into this hole. It also delineates the steps that have been and currently are being taken to address the problem. As such, any current or retired New Jersey public safety officer should read this article in order to fully understand the problems with the New Jersey public pension system. The status of the New Jersey public pension system is vital to every resident of this state and especially crucial to public safety employees. Consequently, one must be conscious of this in order to adequately prepare for its financial impact. To read the full article, click on the following link.

MSB Promotional Examination Decision Upheld

On May 7, 2009, the Appellate Division decided In the Matter of Steven Howe and Joseph Mufalli, Docket No. A-3512-07T1. In the case, Steven Howe appealed from the final administrative determination of the Merit System Board (“Board”), issued December 21, 2007, and its determination of March 13, 2008, denying his motion for reconsideration of the determination that Howe did not meet the experience requirements necessary to sit for the promotional examination for Chief Operating Engineer 2 of the Juvenile Justice Commission.

On appeal, Howe argued that “the administrative agency acted either arbitrarily or capriciously by finding appellant’s prior supervisory experience to be out of title,” whereas only one of the three applicants, Barry Schneider, who did the same work as appellant, was found to qualify for the exam. Howe further argued that the agency acted “arbitrarily and capriciously in its attempt to correct the ambiguous language in the job specification of operating engineer 1 and should have either negated the examination results or should have allowed all three applicants to sit for the exam.” 

After reviewing the entire record, the Appellate Division concluded that it could not disturb the findings of the Board because the Court must defer to the agency’s expertise in implementing civil service law. Although the Court noted the job description for operating engineer 1 is ambiguous regarding supervisory responsibilities and the Board directed that it be amended, the Court determined Howe did not provide evidence that he had supervised while in that position and, therefore, was not qualified to sit for the exam. As such, the Court found the Board did not act arbitrarily, capriciously, or unreasonably in not permitting him to take the examination.

 

Blanket Strip Searches of Non-Indictable Offenders, Performed Without Reasonable Suspicion Are Unconstitutional

In the matter of Florence v. Board of Chosen Freeholders of the County of Burlington, Civil Action No. 05-3619, the United States District Court, District of New Jersey, addressed the issue of strip searches of non-indictable offenders.

Plaintiffs consisted of a certified class to include all arrestees charged with non-indictable offenses, which were processed at Burlington County Jail and/or the Essex County Correctional Facility and were strip searched without a reasonable belief that they were concealing contraband, drugs, or weapons. Defendants were the Board of Chosen Freeholders of Burlington County, Burlington County Jail, Warden Juel Cole, Essex County Correctional Facility, Essex County Sheriff’s Department, and several John Does.

Plaintiffs sought summary judgment on the issue of whether Defendants violated Plaintiffs’ constitutional rights by their policy of strip searching non-indictable arrestees without reasonable suspicion. Plaintiffs also sought injunctive relief on behalf of the class against the correctional facilities’ strip search policies.

In response, Defendants also sought summary judgment as to whether the strip searches were constitutional. In addition, Defendants sought summary judgment on the following issues: (1) 11th Amendment immunity for the Board of Chosen Freeholders of Burlington County, Burlington County Jail, and Warden Cole in his official capacity; (2) qualified immunity for Warden Cole in his individual capacity; and (3) the dismissal of count five involving section 1983 municipality custom violations regarding Essex County.

The District Court held that blanket strip searches of non-indictable offenders, performed without reasonable suspicion for drugs, weapons or other contraband are unconstitutional. Specifically, the Court indicated that the search policies at Burlington and Essex County jails do not pass constitutional muster under the balancing test set forth by the U.S. Supreme Court in Bell v. Wolfish. The Court also determined the justification for the blanket policy is not compelling, where it is based on general security concerns and health concerns, as nothing prohibits jail officials from searching non-indictable offenders, assuming they have reasonable suspicion to do so.  

Based upon its finding that blanket strip searches of non-indictable offenders, performed without reasonable suspicion for drugs, weapons or other contraband, are unconstitutional, the Court granted Plaintiffs’ motion for summary judgment. As to a remedy, the Court denied Plaintiffs’ motion for injunctive relief on account of a lack of standing, since Plaintiffs have failed to show irreparable harm in that they are unlikely to be subjected to strip searches in the future. 

Lastly, the Court denied Defendants’ Motion to dismiss in its entirety. The Court found Defendants’ arguments and factual averments are too scant to support a finding of 11th Amendment immunity and Plaintiffs’ factual allegations regarding municipal liability under section 1983 sufficiently complied with pleading requirements under Federal rules. Finally, the Court determined Warden Cole was not entitled to qualified immunity since a constitutional violation was present and Warden Cole ought to have been put on notice that the strip search policy was unconstitutional.

Legislative Proposal Seeks to Provide Law Enforcement Officers Pay Status When Appeals of Termination Are Not Resolved Within 180 Days

 

This blog entry will focus upon our review of certain statutory proposals currently pending in the New Jersey Legislature concerning the pay status of law enforcement officers when appeals of termination are not resolved within 180 days. These proposals are set forth in Assembly Bill Number 3481

Assembly Bill 3481 concerns the suspensions of certain law enforcement officers and firefighters and supplements Title 40A of the New Jersey statutes and specifically amends N.J.S.A. 40A:14-150 and N.J.S.A. 40A:14-22. In essence, the bill allows certain law enforcement officers and firefighters to regain pay status when appeals of termination are not resolved within 180 days.

The first part of the bill provides:

When a law enforcement officer employed by a law enforcement agency…that is subject to the provisions of Title 11A of the New Jersey Statutes is suspended from performing his official duties without pay for a complaint or charges, other than (1) a complaint or charges relating to the subject matter of a pending criminal investigation…whether pre-indictment or post indictment, or (2) when the complaint or charges allege conduct that also would constitute a violation of the criminal laws of this State or any other jurisdiction, and the law enforcement agency employing the officer…seeks to terminate that officer’s…employment for the conduct that was the basis for the officer’s…suspension without pay, a final determination on the officer’s…suspension and termination shall be rendered within 180 calendar days from the date the officer…is suspended without pay.

 

Should a final determination of the discipline not be rendered within those 180 days, the proposal states that the officer shall, commencing on the 181st calendar day, begin to receive the base salary he/she was being paid at the time of the suspension and shall continue to do so until a final determination on the termination is rendered. Simply put, this addition to the statute would allow officers who are suspended without pay to begin collecting their base pay once again if the appeal of their termination is not resolved within 180 days. It goes without saying that this addition helps to alleviate the problem many officers find themselves in currently, namely being economically starved for an extended amount of time while trying to challenge their removal from employment.    

The proposal also instructs how the 180 day period should be calculated. While the 180 day period seems to be a favorable time period for the officers, it is important to note that this time period might be significantly extended and keep an officer without pay for a period much larger than 180 days. For example, time periods such as: (1) the period between an officer’s termination and the date on which his/her appeal is filed; and (2) the days that accrue during a postponement, should an officer have requested one, will not toll the 180 day period. Therefore, it is imperative that New Jersey public safety officers become intimately familiar with the events which can extend the 180 day time frame should this bill be accepted into law. That way, the officers can maximize their resources efficiently so as to ensure the time frame without pay remains as close to the 180 days as possible.

Next, it is important to note that if the Civil Service Commission denies the officer’s appeal, the officer will be required to reimburse his employing agency or department all of the base salary received during the period of the appeal. Put another way, if an officer has been receiving his base salary after the 180 day period expired and he/she ultimately loses, the officer has to pay all the monies he or she has received. Moreover, the proposal provides that if an officer fails to reimburse the employing agency for the payments, the employing agency may obtain a lien for those amounts on any property and income of the officer, including the officer’s pension, sick and vacation leave to which the officer is entitled.

Finally, the bill directs the Director of the Office of Administrative Law to establish a special unit, known as the Law Enforcement and Firefighter Unit, to deal with removal cases. The unit will be made up of Administrative Law Judges who are qualified and experienced in disciplinary matters and cases which fall under the purview of this statute. As a result of the establishment of this unit, the Office of Administrative Law will be better able to adhere to the 180 day time frame which will, potentially, result in quicker resolutions than what is currently being experienced for all parties involved.

Based on our review of these proposals, I am of the opinion that while many of the proposals are favorable to New Jersey public safety officers, the benefits are somewhat misleading. I believe the Legislature in: (1) installing a deadline for resolving cases regarding the termination of an officer; (2) allowing the officer to regain pay status when appeals are not resolved within that deadline; and (3) establishing the Law Enforcement and Firefighter Unit addresses a number of important concerns, namely forcing these types of cases to be resolved in an expedited fashion and allowing officers certain financial alleviation should an appeal persist for an extended amount of time.

However, (1) the various ways in which the 180 day deadline could be significantly extended; (2) the provision providing reimbursement to the employment agency in the event the appeal is unsuccessful; and (3) permitting a lien on an officer’s property to include his/her pension, severely undermines many of the advantages of the bill. Therefore, it is important that, if this bill passes, officers are mindful of what it specifically includes, excludes, and requires by way of affirmative action on the part of the member or association. Our office will keep apprised of the bill’s progression through the Legislature so make sure to check this blog periodically to ascertain any updates.

Officer's Resignation Not Attributed to Duress, Upheld

 

In In the Matter of Thomas F. Fricano, Borough of Freehold, Docket No.: A-2280-07T3, the Appellate Division addressed Appellant Thomas Fricano’s appeal from final decisions of the Merit System Board (“Board”), dated September 27, 2007 and December 7, 2007, upholding his resignation in good standing from the Borough of Freehold Police Department.

By way of background, Fricano received a regular appointment as a police officer in Freehold on April 3, 2006. The appointment was subject to the successful completion of a one-year probationary working test period, commencing after completion of a police training course. On February 2, 2007, Fricano, in a written letter, resigned to pursue other opportunities in law enforcement. The appointing authority accepted the resignation, which was made effective February 22, 2007. 

The circumstances surrounding Fricano’s resignation are in dispute and at the core of the appeal. According to Fricano, on February 2, 2007, after having served ten months of his one-year probationary working term, he was summoned to the office of the Police Chief. Allegedly, the Chief ordered Fricano “to resign or be terminated immediately.” Denied his request for legal representation or to have a PBA representative present, Fricano drafted and submitted a letter of resignation under duress and coercion. Thereafter, on February 16, 2007, Fricano’s counsel wrote to the Chief requesting that he be able to rescind the resignation. The Borough attorney advised Fricano that he would not be reinstated, instead stating that “they could have fired him instead.” Subsequently, on March 13, 2007, Fricano was issued a preliminary notice of disciplinary action, charging him with numerous violations. On March 22, 2007, the appointing authority withdrew the charges and, thereafter, on March 28, 2007, issued Fricano a letter indicating that he did not satisfactorily complete his working test period and that he was being terminated effective April 3, 2007.

The Borough offers a different version. When called to his office, the Chief advised Fricano that his performance during the working test period had not been satisfactory, and, therefore, offered him the option to resign effective February 22 or face termination for failure to satisfactorily complete his working test period. This offer was made so that Fricano could avoid any stigma which might attach to an involuntary termination. Fricano decided to resign and submitted a resignation letter the same day. In the letter, Fricano explain that he resigned to pursue “a different choice in the Law Enforcement Career.” Although he did not work after February 2, he was paid through February 22, and his resignation was recorded effective February 22, 2007. After being subsequently informed of Fricano’s intention to challenge his resignation, the police department issued the preliminary notice of disciplinary action on March 13, 2007. On March 22, 2007, the police department withdrew the charges and, instead, as a cautionary measure, issued a letter to

 

Fricano informing him that he had not successfully completed his working test period. 

Thereafter, Fricano filed an administrative appeal challenging his resignation. In a September 27, 2007 decision, the Board upheld the resignation, finding insufficient evidence that Fricano’s resignation was the product of duress or coercion. This appeal followed.

The Appellate Division affirmed the Board’s finding that Fricano voluntarily resigned his position. The Court determined there was sufficient credible evidence that Fricano was told he would be terminated because he had not satisfactorily performed during his working test period. Moreover, the Court found that Fricano voluntarily chose to accept the offered opportunity to resign to avoid any stigma attached to termination. According to the Court, Fricano’s deliberate choice of available alternatives cannot, under the circumstances of this case, be ascribed to duress.

Discipline Regading Dissemination of Internal Affairs Documents Upheld

 

In Division of State Police v. In the Matter of Detective Sergeant First Class Daniel Flaherty, Docket No. A-0257-07T20257-07T2, the Appellate Division addressed the validity and ultimate imposition of disciplinary charges lodged against a Detective Sergeant of the New Jersey State Police. The appeal arose out of disciplinary charges filed by the New Jersey Division of State Police (“Division”) against Detective Sergeant First Class Daniel Flaherty, charging him with: (1) disseminating Division documents without proper authorization; (2) behaving in an official capacity to the personal discredit of a member of the State Police or to the Division; and (3) willfully disobeying a lawful verbal or written order.

The underlying facts of this case were not substantially in dispute. In 2001, Flaherty filed an age discrimination complaint with the New Jersey State Police Equal Employment Opportunity/Affirmative Action (“EEO/AA”) intake unit. He alleged that since 1995, the State Police had denied him numerous specialist positions because of his age. The EEO/AA assigned Lieutenant Patrick Reilly to investigate his claim. After two years, in which the allegations still had not been resolved, the EEO/AA replaced Reilly with DSFC Kevin Rowe.

On May 5, 2003, Flaherty filed a New Jersey State Police Reportable Incident Form alleging “culpable inefficiency” against Reilly. Pursuant to a Division policy regarding non-disclosure of confidential internal investigations, the Office of Professional Standards (“OPS”) denied his request to access the file regarding his complaint against Reilly.

The following month, the State Police administratively closed Flaherty’s complaint file against Reilly and transferred the matter to the Attorney General’s EEO/AA section. In a letter dated September 24, 2003, a Senior Deputy Attorney General informed Flaherty that his claim against Reilly could not be substantiated. 

Thereafter, on May 31, 2003, the Division assigned Flaherty to the OPS, which was then called the State Police Internal Affairs Investigation Bureau. Pursuant to Division of Internal Affairs policies and procedures, “[t]he nature and source of internal allegations, the progress of internal affairs investigations, and the resulting materials are confidential information. The contents of internal investigation case files shall be retained in the internal affairs unit and clearly marked as confidential.” Notwithstanding these provisions, internal investigation files can be released in certain enumerated circumstances.  As such, Flaherty executed a confidentiality agreement which provided the dissemination of all confidential information and/or documents.

In a letter dated February 20, 2004, the Department of Law and Public Safety found that Flaherty’s age discrimination claims could not be substantiated. In his appeal to the Department of Personnel, Flaherty questioned the manner in which the State Police and the Attorney General’s office investigated his

 

discrimination claims and his complaint against Reilly. Attached to the appeal were several documents from OPS internal investigation files relating to Reilly and several documents from the internal investigation file regarding his culpable inefficiency claim against Reilly. He also claimed that two other State troopers had filed reportable incident forms against Reilly, specifically citing to one of the internal investigation files.

The Department of Personnel acknowledged receipt of Flaherty’s appeal and forwarded a copy of same to the Attorney General’s office. In responding to the appeal, it became apparent Flaherty might have breached confidentiality by attaching Division documents from internal investigation files. Consequently, an investigation was commenced regarding Flaherty’s acquisition and dissemination of several of the documents referenced in and attached to his appeal. After the investigation, on August 25, 2005, the Division filed the above referenced disciplinary charges against Flaherty. 

The case was ultimately transferred to the Office of Administrative Law. The Administrative Law Judge (“ALJ”) assigned to the case granted a summary decision in favor of the State on charges one and three, dismissed charge two, and ordered Flaherty suspended from duty for five days without pay. After the State filed exceptions seeking to increase the penalty and Flaherty challenged the grant of summary decision as well as the penalty, the Superintendent of the State Police issued a final decision on August 1, 2007, upholding the summary decision on charges one and three, but increasing the suspension to ten days. This appeal ensued.

On appeal, Flaherty asserted: (1) genuine issues of material fact precluded summary decision; (2) the ALJ failed to consider relevant evidence; (3) the ALJ applied the incorrect burden of proof; (4) the Superintendent erred by adopting the Department of Personnel’s finding that his discrimination claims were “unsubstantiated”; (5) the Superintendent erred in asserting that he has “absolute discretion” to promulgate rules and regulations; (6) he was unfairly charged with two violations based on the same facts; and (7) the ten day suspension is disproportionately harsh.

The Appellate Division rejected all of Flaherty’s arguments and affirmed the Superintendant’s decision. According to the Court, the record sustained the ALJ’s grant of summary decision imposing disciplinary action on Flaherty for attaching the records from the Internal Affairs Unit of the State Police. The Court determined Flaherty knew the records he attached to and referenced in his appeal were confidential. Moreover, the Court noted Flaherty even executed a confidentiality agreement which specifically prohibited such dissemination. As such, the Court held the ten day suspension was not disproportionately harsh and sustained the findings of the ALJ and Superintendent.

Arrest of Undercover Agent Gives Rise to Various Claims

 

In Frohner v. City of Wildwood, the United States District Court for the District of New Jersey addressed a very unusual and interesting factual scenario. The lawsuit asserted numerous claims arising out of the arrest and handcuffing of plaintiff, an undercover FBI agent, by defendants, local police officers. Defendants suspected plaintiff was a motorcyclist impersonating an FBI agent.

Defendants moved for summary judgment on a variety of plaintiff’s claims. First, the Court denied defendants’ motions as to the false-arrest claims because defendants failed to show as a matter of law that they had probable cause or arguable probable cause to believe plaintiff was impersonating an FBI agent. Next, the Court denied defendants’ motion as to the claim that defendants’ conducted an unlawful search and seizure of plaintiff’s car. The Court indicated that it could not be concluded that the search was incident to a lawful arrest.

The Court also denied defendants’ motion as to plaintiff’s excessive-force and punitive damages claims. The Court held that such a claim will lie for the use of excessively tight handcuffs and that expert testimony is not required. With regard to plaintiff’s punitive damages claim, the Court noted that the issue as to whether any defendant was recklessly indifferent to plaintiff’s rights was a jury question. 

Although the vast majority of plaintiff’s claims were upheld, the Court did grant defendants summary judgment on one of the claims. The Court determined that since plaintiff has not shown a pattern of constitutional violations indicating defendants were deliberately indifferent to the likelihood that constitutional violations such as those alleged in this case would occur, defendants were entitled to summary judgment on that claim.

This case shows that arrests of undercover agents by local police departments, much like arrests of everyday citizens, can give rise to various claims being brought against the departments. Even with the unusual nature of the facts of this case, this case also illustrates that Courts are typically reluctant to dismiss certain claims as long as some evidence in support thereof has been offered.