As reported by the New Jersey Law Journal, public employers do not have a unilateral right to change the terms of a collective bargaining agreement with their workers merely by citing an economic crisis, the New Jersey Supreme Court ruled on Tuesday.

In a 6-0 ruling, the state’s highest court said a local school board, which was hit with a drastic loss in state and local funding in 2010, violated the law when it decided to impose involuntary furloughs to save money after three failed attempts to open negotiations with the town’s teachers’ union..

The court remanded the matter back to the Public Employment Relations Commission to determine whether the union members should be awarded the money they lost in salary during the furloughs.

It has been estimated that the union members together lost about $200,000 in pay because of the furloughs.

The Robbinsville Board of Education imposed the three-day furloughs for all teachers for the 2010-11 school year after it already had cut education programs, froze salaries and laid off 13 employees. The board’s moves came after the administration of Republican Gov. Chris Christie told the district its state funding would be cut by 58 percent because of financial distress, and after the township government also said local funding would be cut.

The board’s decision was upheld on summary judgment by the state Public Employment Relations Commission, which handles disputes between public agencies and public employees, and by the Appellate Division.

Both PERC and the appeals court relied heavily on the Supreme Court’s 2015 ruling in Borough of Keyport v. International Union of Operating Engineers. In that decision, a divided court ruled that three local governments did not commit unfair labor practices when they developed layoff plans following the 2008 economic crisis.

In 2009, Keyport and the union entered into a collective bargaining agreement that said if there were to be layoffs, the town would respect union members’ seniority rights.

Justice Jaynee LaVecchia, writing for the court in In re Robbinsville Board of Education v. Washington Township Education Association, said the commission and the Appellate Division gave an “overly broad and mistaken reading” of Keyport, which she said involved unique circumstances.

In upholding the board’s right to impose the furloughs despite not being part of the bargaining agreement, the commission said the “decision to impose temporary furloughs in the current economic times was a non-negotiable managerial prerogative.”

LaVecchia said that PERC and the appeals court should have been guided by the court’s 1982 ruling in In re Local 195, IFPTE v. New Jersey. There, the court said there should be a three-prong test to determine if a public employer’s actions regarding its employees violated the Public Employer-Employee Relations Act.

A matter must be found to be negotiable if it “intimately and directly” impacts the work and welfare of public employees, the matter has not been preempted by statute or regulation and the negotiated agreement does not adversely affect governmental policy, the court said in Local 195.

She also quoted the court’s 2001 ruling in Troy v. Rutgers, which stated that “a decision that directly impacts the days worked and compensation for those days implicate a term and condition of employment,” making the decision “mandatorily-negotiable.”

LaVecchia noted, however, that Keyport towns that laid off employees were acting with the blessing of a temporary emergency regulation, which was issued by the state Civil Service Commission because of the national economic downturn.

“The appellate decision undervalued the lack here of an emergency regulation permitting temporary furloughs,” she said. “The regulation’s existence made all the difference in Keyport.

Keyport does not support the award of summary judgment to the board,” LaVecchia said.

LaVecchia did chide the union for refusing to negotiate with the board, saying members “disregarded their duties” despite the economic circumstances facing the board.


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Photo of Michael DeRose Michael DeRose

Michael P. DeRose is a shareholder at the firm and primarily focuses his practice in labor/ employment law and other aspects of civil litigation, such as contract disputes. He has litigated and tried hundreds of matters before the Superior Court of New Jersey…

Michael P. DeRose is a shareholder at the firm and primarily focuses his practice in labor/ employment law and other aspects of civil litigation, such as contract disputes. He has litigated and tried hundreds of matters before the Superior Court of New Jersey, the Office of Administrative Law and the New Jersey Public Employment Relations Commission on behalf of various labor unions and their members. Michael has extensive experience defending and fighting for members of law enforcement and other public employees facing adverse disciplinary action, such as termination or suspension from employment. He also frequently argues before New Jersey’s Appellate Division on behalf of his clients.

A large portion of his practice is also devoted to contract negotiations on behalf of union clients, representing such clients in grievance arbitration/ contract disputes, and otherwise advising union leaders on labor and employment matters.  Michael also has significant experience in the realm of interest arbitration on behalf of the firm’s law enforcement and firefighter unions. As a result of the firm’s robust labor and employment practice, Michael regularly appears before various state agencies, such as the New Jersey Civil Service Commission, the New Jersey Division of Pensions and Benefits, the State Health Benefits Commission, and NJ PERC. In addition to representing labor unions and active employees, Michael also represents retirees before the Division of Pensions in disability retirement applications, both ordinary and accidental disability retirement, in pension forfeiture actions, and in other miscellaneous pension disputes. He also counsels private business and their principals in contract and employment law, in addition to representing their interests in civil litigation. Michael has a track record of obtaining favorable outcomes for his clients and treats each everyone of them on an individual and particularized basis in accordance with their needs.

Before joining the firm in August of 2015, Michael was an associate counsel at a civil litigation firm out in Trenton, New Jersey, where he principally focused his practice around employment law and tort claims litigation. Prior to that, he served as a law clerk in the Superior Court of New Jersey for the Honorable F. Patrick McManimon, Mercer County Vicinage, from September of 2012 to August of 2013, where he attained significant experience in the realm of alternative dispute resolution having mediated well-over one-hundred cases, primarily related to commercial and residential landlord/ tenant disputes and contract/ business litigation. He earned his Juris Doctorate in 2012 after graduating from the Western Michigan University-Thomas M. Cooley School of Law. In 2007, he earned his Bachelor of the Arts in Criminal Justice and Public Administration from Kean University where he was a member of the Kean University baseball team and vice president of the Alpha Phi Sigma chapter of the National Criminal Justice Honor Society.

Michael is admitted to the New Jersey State Bar, the United States Federal Court for the District of New Jersey, and is a member of the Mercer County Bar Association.