New Jersey Public Safety Officers Law Blog : New Jersey Public Safety Employee Lawyer & Attorney : Pellettieri, Rabstein & Altman Law Firm : Workers Compensation, Discipline Representation for Police & Firefighters : New Jersey

Employees in New Jersey’s largest state-worker union overwhelmingly ratified a revised contract agreement on Tuesday, June 30, 2009 that defers a raise and trades furloughs this year for future vacation days. With a little over 13,000 votes cast online or by phone by the deadline, the margin was 69 percent to 31 percent according to the Communication Workers of America. All four bargaining units, those represented clerical workers, professionals and two tiers of supervisors, voted for the revised deal, which bars layoffs until 2011. 

Workers in the CWA, which covers about half the state’s workforce, agreed to defer a 3.5 percent raise that was due July 1, 2009 by 18 months; they will get two 3.5 percent raises in fiscal 2011. Workers also agreed to nine furlough days over the coming year, on top of one taken in May. In exchange, they receive seven days off from work they can take starting in July 2010 or cash out when they leave state employment, at their pay rate at that time. 

The State agreed not to layoff any workers until January 2011 or add more unpaid furloughs before July 2011. If the State lays off any worker before January 2011, not counting any fired for disciplinary reasons or for cause, all state workers immediately get the deferred 3.5 percent raise and no further furloughs are required.

Workers due to receive increment raised in fiscal 2010 based on their years of service will get those increases. The nine unpaid furlough days include the day after Thanksgiving this year and Lincoln’s Birthday in 2010. The other seven dates will be worked out by workers and their supervisors and must be taken by the end of June 2010.

Republicans, who are hopeful that Governor Corzine will be replaced in this fall’s election, said the agreement ties the hands of the next governor to deal with next year’s multi-billion dollar deficit. “The governor did not need to negotiate these costly, election-year concessions. The courts had upheld his right to furlough workers as he originally proposed. The governor traded a plan that would have saved money during a recession for one that may very well slow the state’s recovery,” said Senate Minority Leader Thomas Kean, Jr., R-Union.

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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. 

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New York Governor David Patterson dropped a bombshell on two powerful unions yesterday when he unexpectedly vetoed a routine measure that for nearly thirty (30) years had allowed New York city cops and firefighters to retire with generous pensions.

“These are not routine times,” Paterson said in vetoing the “temporary” measure that, since 1981, had been habitually renewed by legislators, giving the Finest and Bravest gold-plated pensions known as “Tier II” even as new, less-generous tiers were created for non-uniformed workers. Paterson added, “Instead of a rubber stamp on a temporary fix, we need to move forward with real reform to the pension system.”

In recent months, the New York Post has detailed the spiraling costs of public-employee pensions and the growing threat they pose to state and local budgets. Paterson’s veto, which caught the lawmakers off guard, was his most aggressive move yet in his push to establish a pared-down pension tier for newly hired employees. Recently, the governor re-introduced his cost-saving pension proposal, which legislators flatly rejected during this year’s budget negotiations. In fact, Paterson estimates that his proposal for a new pension tier would save the state $48 billion over the next thirty (30) years. 

Labor unions and their allies in the Legislature said they were blindsided by the governor’s veto and argued that state and local governments will see no savings from the move because it’s unclear which pension tiers new cops and firefighters would join. According to Civil Service Committee Chairwoman Diane Savino, who sponsored the bill, “There was no cost to extending the current system. We don’t know what the cost would be. We don’t know what the savings will be.” 

The bill passed overwhelmingly, 136-6 in the Assembly and 58-0 in the Senate, leading to talk of a veto override, which requires a two-thirds majority of each house. 

The savings would come from, among other items, raising the minimum retirement age and banning overtime “spiking,” where workers run up OT in their final years to boost pension payouts.

As one can expect, developments such as these do not bode well for public safety officers across the county, to include those of our state. As detailed in previous entries, public pension reform has become an important topic, especially during these tough economic times. This article illustrates the types of responses that are being taken by government in response to the issue and the resulting effect upon public safety officers. Please continue to check this blog periodically to ascertain updates in regard to this matter.

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On May 16, 2009, the Public Employment Relations Commission (“PERC”) issued a decision in response to certain unfair practice charges and requests for interim relief filed against the State of New Jersey regarding the imposition of unpaid, “furlough” days. 

By way of background, on April 14, 2009, the Communications Workers of America, AFL-CIO (“CWA”), filed an unfair practice charge and a request for interim relief against the State of New Jersey. CWA alleged that the State committed unfair practices proscribed by the New Jersey Employer-Employee Relations Act by: (1) unilaterally imposing a reduction in the work year and compensation of employees represented by CWA by requiring them to take unpaid leave days; (2) failing to negotiate over the effects of the decision to impose involuntary unpaid leave days; and (3) conspiring with the Civil Service Commission to enact temporary layoff rules for the purpose of circumventing the State’s obligation to negotiate over staggered unpaid leave days. The charges alleged that, through these actions, the State repudiated various sections of the collective negotiations agreements it has entered into with CWA and breached its duty to negotiate over terms and conditions of employment in violation of the Employer-Employee Relations Act. Additional charges and requests for interim relief were filed between April 14 and April 29 by other employee organizations representing units of various State employees, including P.B.A. 105.

An order to show cause was executed and the return date was ultimately scheduled on May 14. Once numerous briefs, certifications, and exhibits were filed, all parties appeared on the return date.  After entertaining argument, the Commission Designee Stuart Reichman, in an extensive written opinion, denied the applications for interim relief. The Designee found that where a monetary remedy could normally be issued by the Commission in the event the furloughs were found to constitute an unfair practice, as is the case here, an injunction to prevent the institution of the furloughs is not appropriate because monetary loss does not constitute irreparable harm. As a result, the unfair practice charges will proceed in the normal course. To read the decision in its entirety, download the same from the PERC website.

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On May 14, 2009, the Appellate Division decided Harry G. Parkin v. Board of Trustees, Public Employees Retirement System, Docket No.: A-2466-07T1. In the case, Harry Parkin appealed from the final agency decision of the Board of Trustees of the Public Employee Retirement System (“Board”) resulting in the partial forfeiture of his service and salary credits. Specifically, Parkin contended that the Board failed to follow its own regulations governing partial forfeiture of pension benefits and further contended that the Board “adopted a rule regarding the partial termination of pension benefits without going through the regulatory process.” 

With the exception of a four-year break in service, from 1972 to January 1, 2004, Parkin was continuously employed in various public positions until he retired as Mercer County Chief of Staff. Based upon his veteran’s status, his service time, and additional credit he received as part of an early retirement incentive program, he had accumulated twenty-eight (28) years and nine (9) months of service credit equating to a monthly pension of $5,864.49.

On March 11, 2004, Parkin was indicted by a Federal grand jury and charged with having participated in a wide-ranging, corrupt scheme utilizing his office as Chief of Staff to defraud Mercer County and its citizens. The indictment alleged numerous acts Parkin committed in furtherance of the plan while employed as Chief of Staff. After a jury trial, in March 2005, he was convicted of all charges. In August 2005, he was sentenced to a period of ninety (90) months imprisonment.

The Board considered Parkin’s entitlement to pension benefits at its September 2005 meeting. Applying the factors set forth in N.J.S.A. 43:1-3(c), the Board determined a partial forfeiture was warranted for the period of time Parkin served as Chief of Staff, i.e., from June 1, 1994, to the date of his retirement. As a result, Parkin became ineligible for veteran retirement status and additionally lost early retirement incentives. His monthly pension was significantly reduced and he no longer qualified for lifetime medical benefits.        

Thereafter, Parkin appealed to the Office of Administrative Law, wherein he argued that the Board had arbitrarily chosen the forfeiture period to run from his first day as Chief of Staff, rather than the time his misconduct allegedly first occurred, i.e., in September 2000. The Administrative Law Judge (“ALJ”) initially recommended the Board supplement the record regarding its selection of the date upon which to commence the forfeiture period. In September 2007, the Board filed a supplementary statement of its reasons for selecting the initial date of Parkin’s employment as Chief of Staff as the operative date of forfeiture, relying heavily upon the statements made by the sentencing judge in which he outlined the nature and extent of Parkin’s criminal conduct. Subsequently, the ALJ issued his initial decision in November 2007 ordering forfeiture of all of Parkin’s service from the date he became Chief of Staff. The Board adopted the ALJ’s recommendations and this appeal followed.

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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.

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