SCOTT CHARD VS. STATE OF NEW JERSEY (L-1281-15, MERCER COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5208-15T4

SCOTT CHARD and ROBERT
COLLINS,

Plaintiffs-Appellants,

v.

STATE OF NEW JERSEY and
DEPARTMENT OF CORRECTIONS,

Defendants-Respondents.
__________________________________

Argued November 13, 2017 – Decided July 24, 2018

Before Judges Ostrer and Whipple.

On appeal from Superior Court of New Jersey,
Law Division, Mercer County, Docket No. L-
1281-15.

Frank M. Crivelli argued the cause for
appellants (Crivelli & Barbati, LLC,
attorneys; Frank M. Crivelli, on the brief).

Christopher W. Weber, Deputy Attorney General,
argued the cause for respondents (Christopher
S. Porrino, Attorney General, attorney;
Melissa H. Raksa, Assistant Attorney General,
of counsel; Christopher W. Weber, on the
brief).

PER CURIAM
 An arbitrator rejected plaintiffs' grievances that they were

denied the appropriate salary increases upon their promotion to

sergeant in the Department of Corrections. The Law Division then

confirmed the arbitrator's decision. Plaintiffs appeal, contending

the arbitrator misinterpreted the law, and the trial court should

have vacated his decision.

At the heart of the appeal is an apparent inconsistency

between the promotional salary provision in the governing

collective negotiations agreement (Agreement), and the Civil

Service Commission regulation on promotional salary increases,

specifically a subsection pertaining to employees like plaintiffs,

who had been at the top of their pay range for thirty-nine pay

periods or more. The arbitrator reasonably determined that

interpreting the regulations fell outside the scope of arbitration

authorized by the Agreement, and plaintiffs received the increase

due under the Agreement. Therefore, the confirmation of the award

was warranted unless plaintiffs could show that it was procured

by undue means, or it would violate law or offend public policy.

As we conclude plaintiffs failed to make that showing, we affirm.

I.

The Agreement followed an interest arbitration award between

the State and plaintiffs' union, the New Jersey Law Enforcement

Supervisors Association (NJLESA). Under the Agreement, an

2 A-5208-15T4
employee promoted to a new job title must be placed on the lowest

step of the appropriate salary guide that would still provide an

increase of the old salary. Article 13(B)(3) states:

Salary Upon Promotion: Effective as soon as
practicable following issuance of the Interest
Arbitration Award, any employee who is
promoted to any job title represented by
NJLESA shall receive a salary increase by
receiving the amount necessary to place them
on the appropriate salary guide . . . on the
lowest Step that provides them with an
increase in salary . . . .

The provision purported to supersede regulations that provided

more generous promotional increases, by stating: "Notwithstanding

any regulation or authority to the contrary, no employee shall

receive any salary increase greater than the increase provided for

above, upon promotion to any job title represented by NJLESA."

When the Agreement was adopted in 2009, the governing Civil

Service regulations required more generous promotional salary

increases. N.J.A.C. 4A:3-4.9(a) (2009) stated:

(a) Employees who are appointed to a title
with a higher class code shall receive a
salary increase equal to at least one
increment in the salary range of the former
title plus the amount necessary to place them
on the next higher step in the new range.

Moreover, the regulations authorized even more generous increases

for employees who were essentially frozen at the top of their old

3 A-5208-15T4
salary range for an extended period of time. N.J.A.C. 4A:3-4.9(c)

(2009) stated:

(c) When an employee has been at the maximum
of his or her previous salary range for at
least 39 pay periods, and the salary increases
after workweek adjustment would be less than
two increments in the employee's previous
range, the employee shall receive an
additional increment in the new range,
providing the employee is not already at the
maximum of the new range.

Although both subsections (a) and (c) were at odds with the

Agreement, the Governor's Office of Employee Relations (OER) asked

the Commission only to relax subsection (a) to allow the Agreement

to control promotional salary increases. However, the

Commission's subsequent order was not so restricted, stating

"Therefore, it is ordered that these requests be granted and future

promotional movements for the above listed titles be processed in

accordance with the terms of . . . the Interest Arbitration Award

between the State and NJLESA until June 30, 2011." (Emphasis

added).

As the Commission's order would expire at the end of June

2011, OER petitioned the Commission to amend its regulation to

allow continued implementation of the Agreement. According to the

Commission, OER "ask[ed] for an amendment to N.J.A.C. 4A:3-4.9

that would permit a different advancement pay adjustment than

provided in the rule if the pay adjustment is established by a

4 A-5208-15T4
collective negotiations agreement." 43 N.J.R. 903(a) (Apr. 18,

2011). However, OER apparently suggested only an amendment to

subsection (a). As the Commission stated, "To prevent the need

for further rule relaxations in case of agreements similar to

those described above, the petitioner suggested an amendment to

N.J.A.C. 4A:3-4.9(a), allowing for the calculation of a different

salary when 'a different promotional procedure is established by

a collective negotiations agreement.'" Ibid.; see also 43 N.J.R.

747(b) (Mar. 21, 2011) (Notice of Action on Petition for

Rulemaking). Consequently, the Commission revised only subsection

(a), to state:

Employees who are appointed to a title with a
higher class code shall receive a salary
increase equal to at least one increment in
the salary range of the former title plus the
amount necessary to place them on the next
higher step in the new range, unless a
different salary adjustment is established in
a collective negotiations agreement . . . .

[N.J.A.C. 4A:3-4.9(a) (2011) (emphasis
added), adopted at 43 N.J.R. 2168(a) (Aug. 15,
2011).]

No change was made to subsection (c).

After the 2011 rule adoption, the Commission – at least in

some cases – implemented the regulation to authorize promotional

salary increases pursuant to subsection (c) for those employees

who satisfied the subsection's requirements. In a March 2013

5 A-5208-15T4
letter to the Commission, OER contended that was mistaken, as the

Agreement took precedence.

The Commission then reversed itself. It proposed another

amendment to N.J.A.C. 4A:3-4.9. 46 N.J.R. 473(a) (Mar. 17, 2014).

The Commission stated that its implementation of subsection (c)

had been "erroneous" and a "mistake." Ibid. This time, the

Commission proposed an amendment that expressly stated that a less

generous collective negotiations agreement would predominate over

both subsections (a) and (c) – which were redesignated as

subsections (b) and (d). Ibid. The Commission then adopted the

proposal. 46 N.J.R. 1815(a) (Aug. 18, 2014).

The new regulation states:

(a) Unless a different salary adjustment is
established in a collective negotiations
agreement, the following provisions shall be
applied when employees are appointed to a
title with a higher class code, except that
in no event shall such adjustment result in a
higher salary than that provided for in this
section.

(b) Employees who are appointed to a title
with a higher class code shall receive a
salary increase equal to at least one
increment in the salary range of the former
title plus the amount necessary to place them
on the next higher step in the new
range. . . .

. . . .

(d) When an employee has been at the maximum
of his or her previous salary range for at

6 A-5208-15T4
 least 39 pay periods, and the salary increases
after workweek adjustment would be less than
two increments in the employee's previous
range, the employee shall receive an
additional increment in the new range,
providing the employee is not already at the
maximum of the new range.

[N.J.A.C. 4A:3-4.9 (2014).]

II.

Against this regulatory backdrop, plaintiffs were promoted

in 2012. The Agreement was still in effect, as it had been

extended according to its terms after its original 2011 end date.

Both plaintiffs had been at the "maximum of [their] . . . previous

salary range for at least 39 pay periods . . . ." N.J.A.C. 4A:3-

4.9(c) (2012). Before promotion, Chard and Collins were at the

same salary range for at least forty-four and 120 weeks,

respectively. Nonetheless, they received promotional pay raises

under the Agreement, and not subsection (c). At stake was almost

$3000 a year in added salary. They both filed grievances, which

were unsuccessful at the initial stages. They then sought

arbitration.

The arbitrator held that according to the plain language of

the Agreement, plaintiffs received the appropriate increase. The

arbitrator noted that plaintiffs met the prerequisites of

subsection (c). However, the Agreement clearly stated it took

precedence, providing that "[n]otwithstanding any regulation or

7 A-5208-15T4
authority to the contrary, no employee shall receive any salary

increase greater than the increase provided for above, upon

promotion to any job title represented by NJLESA."

The arbitrator acknowledged, but declined to consider,

plaintiffs' argument that N.J.A.C. 4A:3-4.9(c) superseded the

Agreement's promotional salary increase provision; and that the

first regulatory amendment applied only to subsection (a). The

arbitrator relied upon the Agreement's provisions on arbitration.

The Agreement identifies two forms of grievances: a

"contractual grievance" and a "non-contractual grievance." The

former is "[a] claimed breach, misinterpretation or improper

application of the terms of this Agreement" and the latter is "[a]

claimed violation, misinterpretation or misapplication of rules

or regulations, existing policies, letters or memoranda of

agreement, administrative decisions, or laws applicable to the

agency or department which employs the grievant affecting the

terms and conditions of employment and which are not included [in

the definition of contractual grievance]."

The Agreement provides for arbitration only of contractual

grievances. "In the event that the grievance has not been

satisfactorily resolved at Step Two, and the grievance involves

an alleged violation of the Agreement as described in the

definition in A.1 above [the definition of contractual grievance],

8 A-5208-15T4
then a request for arbitration may be brought only by the

Association . . . ." The Agreement expressly limited the

arbitrator to interpreting the Agreement: "The arbitrator shall

not have the power to add to, to subtract from, or modify the

provisions of this Agreement or laws of the State, or any written

policy of the State or sub-division thereof and shall confine his

decision solely to the interpretation and application of this

Agreement." (Emphasis added).

The arbitrator concluded, "Simply stated, I have no authority

to decide the Association's claim that the State violated 'the

mandates of the applicable version of N.J.A.C. 4A:3-4.9(c).'"

Plaintiffs followed with their complaint to vacate the

arbitrator's decision. Defendants filed a counterclaim seeking

confirmation. The parties then filed cross-motions for summary

judgment. The trial judge held that the arbitrator's decision was

reasonably debatable, and therefore should be confirmed, citing

Linden Board of Education v. Linden Education Association ex rel.

Mizichko, 202 N.J. 268 (2010). The court rejected plaintiffs'

argument that the arbitrator issued the award through "undue

means," see N.J.S.A. 2A:24-8(a), by mistakenly applying the

regulations. The court noted the Agreement limited the scope of

the arbitrator's authority.

9 A-5208-15T4
 On appeal, plaintiffs renew their argument that they were

entitled to promotional salary increases pursuant to subsection

(c), and not the Agreement's less generous provision. They argue

the history of the Commission's administrative and regulatory

responses to the Agreement reflect the intent to preserve the

special salary increase for persons at the same pay range for

thirty-nine pay periods or more, as subsection (c) provides. They

argue that even the 2014 amendment was prospective, and did not

affect their right to a salary increase under what is now

subsection (d).

We review the trial court's summary judgment decision de

novo, applying the same standard as the trial court. Henry v.

N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010). As there

are no genuine issues of material fact, the question before us is

a legal one. Ibid. Furthermore, "[a]s the decision to vacate an

arbitration award is a decision of law, this court reviews the

denial of a motion to vacate an arbitration award de novo." Manger

v. Manger, 417 N.J. Super. 370, 376 (App. Div. 2010).

We exercise limited review of the arbitrator's interpretation

of the Agreement. A court may determine a question of substantive

arbitrability – whether the grievance falls within the arbitration

clause. Amalgamated Transit Union, Local 880 v. N.J. Transit Bus

Operations, Inc., 200 N.J. 105, 115 (2009). However, the court

10 A-5208-15T4
may not pass on the merits of the parties' dispute over the proper

interpretation of their contract. Id. at 119. The court may not

substitute its interpretation of the contract for the

arbitrator's. Policemen's Benevolent Ass'n v. City of Trenton,

205 N.J. 422, 429 (2011).

"The well-established standard . . . is that 'an arbitrator's

award will be confirmed so long as the award is reasonably

debatable.'" Id. at 428-29 (quoting Linden Bd. of Educ., 202 N.J.

at 276). This applies to an arbitrator's interpretation of a

contract. Office of Emp. Relations v. Commc'ns Workers of Am.,

154 N.J. 98, 112 (1998). "[O]ur courts have vacated arbitration

awards as not reasonably debatable when arbitrators have, for

example, added new terms to an agreement or ignored its clear

language." Policemen's Benevolent Ass'n, 205 N.J. at 429.

"[A]rbitrators may not look beyond the four corners of a contract

to alter unambiguous language . . . ." Id. at 430.

The parties' agreement defines and limits the scope of an

arbitrator's authority. See Port Auth. Police Sergeants

Benevolent Ass'n of N.Y., N.J. v. Port Auth. of N.Y. and N.J., 340

N.J. Super. 453, 458-60 (App. Div. 2001) (describing limitation

on arbitrator's authority as defined by public sector collective

bargaining agreement); City Ass'n of Supervisors and Admin'rs v.

State Operated School Dist. of Newark, 311 N.J. Super. 300, 310

11 A-5208-15T4
(App. Div. 1998) (same). "If an arbitrator exceeds the scope of

that authority, then his [or her] decision may be vacated on

statutory grounds pursuant to N.J.S.A. 2A:24-8." City Ass'n of

Supervisors and Admin'rs, 311 N.J. Super. at 310. In particular,

"language limiting the arbitrator's authority to the resolution

of grievances arising out of the terms of the agreement and denying

him the authority to add to, subtract from, or modify its terms

is typical of a narrow, as distinguished from a broad, arbitration

clause." Commc'ns Workers of Am., Local 1087 v. Monmouth Cnty.

Bd. of Social Servs., 96 N.J. 442, 449 (1984).

Of relevance to this case, a court may vacate an arbitrator's

award that was procured by "undue means." N.J.S.A. 2A:24-8(a).1

"The statutory phrase 'undue means' ordinarily encompasses a

situation in which the arbitrator has made an acknowledged mistake

of fact or law or a mistake that is apparent on the face of the

record." Office of Emp. Relations, 154 N.J. at 111. An

"acknowledged mistake" is one admitted by the arbitrator. N.J.

1
This case does not implicate the other statutory grounds for
vacatur: corruption and fraud, N.J.S.A. 2A:24-8(a); "evident
partiality or corruption in the arbitrators," N.J.S.A. 2A:24-8(b);
misconduct in scheduling the hearing, or receipt of evidence,
N.J.S.A. 2A:24-8(c); or where the arbitrators "exceeded or so
imperfectly executed their powers that a mutual, final and definite
award upon the subject matter submitted was not made." N.J.S.A.
2A:24-8(d).

12 A-5208-15T4
Highway Auth. v. Int'l Fed'n of Prof'l and Tech. Eng'rs, Local

193, 274 N.J. Super. 599, 609 (App. Div. 1994).

However, in public sector arbitration, the court exercises

an additional level of review. "When reviewing an arbitrator's

interpretation of a public-sector contract, in addition to

determining whether the contract interpretation is reasonably

debatable, the court must ascertain whether the award violates law

or public policy." Office of Emp. Relations, 154 N.J. at 112; S.

Plainfield Bd. of Educ. v. S. Plainfield Educ. Ass'n ex rel.

English, 320 N.J. Super. 281, 288 (App. Div. 1999). An award

violates law or offends public policy when it falls into a non-

negotiable matter of governmental policy. Office of Emp.

Relations, 154 N.J. at 113. "[A] subject is negotiable between

public employers and employees when . . . the subject has not been

fully or partially preempted by statute or regulation . . . ."

Ibid. (quoting Local 195, IFPTE, AFL-CIO v. State, 88 N.J. 393,

404-05 (1982)). Thus, an award that is preempted by regulation

violates law or public policy, and may not be confirmed. See

ibid.

Applying these principles, we discern no basis to disturb the

trial court's order confirming the arbitrator's award. First, the

arbitrator adhered to the scope of his authority. The Agreement

included a "narrow" arbitration clause. The arbitrator was

13 A-5208-15T4
authorized only to address a contractual grievance. He was thus

limited to the "four corners of the contract."

Plaintiffs do not genuinely dispute the arbitrator's

interpretation of the Agreement's language. The plain language

was not debatable. It granted plaintiffs a promotional salary

increase that placed them on the lowest step possible in their new

position, which still generated an increase over their previous

salary. The Agreement required that result "notwithstanding any

regulation . . . to the contrary" that might authorize a greater

salary increase. In sum, it would be unreasonable to debate the

correctness of the arbitrator's interpretation of the Agreement's

terms.

The gist of plaintiffs' argument is that subsection (c)

superseded the Agreement's plain language. However, we reject

plaintiffs' contention that the arbitrator's decision was procured

by "undue means." The arbitrator did not acknowledge a mistake

of law or fact. Nor is a mistake evident on the face of the award.

Rather, plaintiffs' claim of a legal error requires a detailed

examination of the Commission's treatment of the Agreement, both

by its initial order, and its two rounds of regulatory amendments.

Consequently, we must consider whether the arbitrator's award

violates law – specifically the regulation's subsection (c). "The

same rules of construction that apply to the interpretation of

14 A-5208-15T4
statutes guide our interpretation of regulations." Headen v.

Jersey City Bd. of Educ., 212 N.J. 437, 451 (2012). We may resort

to extrinsic materials if the language is ambiguous. See In re

Kollman, 210 N.J. 557, 568 (2012) (stating that "[i]f the language

of the statute is ambiguous, a court may resort to extrinsic

evidence for guidance, including legislative history").

As a threshold matter, we conclude the plain meaning of the

pre-2014 regulation is ambiguous. The 2011 rulemaking amended

only subsection (a) with the language, "unless a different salary

adjustment is established in a collective negotiations agreement

. . . ." One may reasonably disagree over whether the "unless"

clause was also intended to address persons at the maximum of

their salary range for thirty-nine pay periods or more, as

addressed in subsection (c). Therefore, it is appropriate to

resort to extrinsic materials.

Upon our careful review of the regulatory record, we are

persuaded that the Commission did not intend to preserve the

enhanced promotional pay raises authorized by subsection (c),

while removing those authorized by subsection (a). Despite the

references to subsection (a), the operative language of the 2010

waiver order made clear that the Agreement was intended to

supersede any regulation to the contrary that provided a more

generous promotional salary increase. Nothing in the regulatory

15 A-5208-15T4
record indicated an intention to treat differently persons who

were at the maximum of their salary for an extended period of

time.2

We recognize that the agency's implementation of the 2011

regulation is reflective of its own interpretation, which in turn

is entitled to some weight. However, the implementation was

apparently inconsistent and short-lived. See State, Dep't of

Envtl. Prot. v. Stavola, 103 N.J. 425, 435 (1986) (suggesting that

long-standing agency interpretation of a statute carries "greater

force" than "its first application . . . to a new situation").

The Commission thereafter amended the regulation, conceding that

it mistakenly and erroneously continued to apply subsection (c)

in cases where a collective negotiations agreement provided for a

less generous promotional salary increase. The agency

characterized the 2014 amendment as clarifying.

"Deference to an agency decision is particularly appropriate

where interpretation of the Agency's own regulation is in issue."

I.L. v. N.J. Dep't of Human Servs., Div. of Med. Assistance &

Health Servs., 389 N.J. Super. 354, 364 (App. Div. 2006). We

2
We recognize that one might contend that persons frozen at the
top of their salary range for such an extended period of time were
entitled to a more generous promotional salary increase than those
who were not. However, there is no evidence in the regulatory
history that the parties to the Agreement, or the Commission,
intended to afford special treatment for such persons.

16 A-5208-15T4
therefore conclude that the regulation, in its 2011 version as

well as its 2014 version, was intended to elevate a collective

negotiations agreement over the regulation, if the former was less

generous than the latter. Consequently, the arbitrator's decision

does not violate law or offend public policy.

Affirmed.

17 A-5208-15T4