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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.

ItĀ has beenĀ 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.