Most recently, our office has received numerous inquiries from various law enforcement unions throughout the state regarding the effect of the Appellate Division’s decision in two (2) seminal cases upon contractually mandated step movement on a salary guide once a collective negotiations agreement expires. The two cases that are at issue are entitled In the Matter of County of Atlantic and PBA Local 243 et al., Docket Number: A-2477-13T4, and In the Matter of Township of Bridgewater and PBA Local 174, Docket Number: A-0107-14T1. The cases were consolidated before the Appellate Court and a single decision was issued on March 9, 2016.

 For the reader of this post to have an understanding of this discussion, it is necessary to briefly review the facts of the Appellate Division decision as it relates to the landscape of collective negotiations under the two percent (2%) salary cap. First, both Atlantic County and Bridgewater revolve around a county and municipality making the conscious decision that, at the expiration of the collective negotiations agreements between the parties, the governmental entity stopped paying increments to the members of the negotiations units on their anniversary dates until a new successive negotiations agreement was reached. The Unions responded by filing both contractual grievances as well as unfair labor practice charges against the governmental entities. PERC restrained arbitration and refused to issue an unfair labor practice charge, thereby reversing thirty (30) years of legal precedence by stating that the legal theory that allowed step movement to continue after the expiration of a contract, the “dynamic status quo,” was no longer operable due to the two percent (2%) salary cap that was put in place by the State legislature.

Instead, in their decisions PERC adopted what it called the “static status quo,” which, in essence, allowed governmental entities to freeze step movement at the expiration of the collective negotiations agreements. On appeal, the Appellate Division reversed PERC and stated that employees must move on the salary guide on their designated anniversary dates after the expiration of the collective negotiations agreement and receive their increment payments. The governmental entities have filed for certification to the New Jersey Supreme Court and the Court has not yet made a decision as to whether it will take the case or not. However, the current state of the law today dictates that governmental entities do not have the unilateral authority to freeze movement on a salary guide at the time that a collective negotiations agreement expires. 

Notwithstanding the foregoing, the limitation on the amount of an across the board monetary increase that the members of a law enforcement union may receive under what is commonly referred to as the two (2%) percent cap is still applicable despite the Atlantic County and Bridgewater decision. Taking this one step further, under the New Milford and Ramsey decisions issued by PERC, the monetary increases that a member receives when they move on the salary guide following the expiration of a collective negotiations agreement “counts against” the money that is allotted under the two percent (2%) cap. Thus, unions are often placed in a very precarious situation if their members continue to move on the salary guide following the expiration of a collective negotiations agreement.

To provide you with an example of such a situation, prior to the “dynamic status quo” doctrine being suspended by PERC, our office negotiated a collective negotiations agreement with a county governmental entity and the members of the negotiations unit continued to move on the salary guide subsequent to the expiration of the collective negotiations agreement. As a result of the cost of the movement on the salary guide for the first year following the expiration of the agreement, the cost of the movement alone consumed two (2) years’ worth of the money that was allotted under the two percent (2%) salary cap. Based on this fact, the negotiations unit requested that the County freeze their members from moving on the salary guide while they were still in negotiations to allow them to have some flexibility in making decisions on how to continue negotiations under the two percent (2%) salary cap.

Therefore, despite the fact that Atlantic County and Bridgewater now mandate that members of a collective negotiations unit continue to move on the salary guide following the expiration of a collective negotiations agreement, movement on the guide after the expiration of the agreement may not always be in the union’s interest as a collective whole. Unfortunately, the two percent (2%) salary cap has entirely changed they manner in how we now negotiate collective negotiations agreements. We can no longer look towards across the board salary increases for any units that have step guides or salary increments built into their contracts due to the simple fact that member’s movement on these guides count as “raises” and thus “eat” into the money that is allotted to the unit as a whole. Therefore, members’ movement or advancement on these salary guides have the ability to remove any flexibility that a unit may have in negotiations.

The bottom line is that each negotiations unit must evaluate their situation as a collective body prior to the expiration of a collective negotiations agreement so that a determination can be made if it is in the unit’s best interest to move members on the salary guide once the contract expires. While this may seem to be intuitively incorrect, maintaining flexibility during the negotiations process is paramount in achieving an agreement that has benefits for all members of the negotiations unit.