NOT FOR PUBLICATION WITHOUT THE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-4234-16T4
PAUL BARILA, WILLIAM J.
LUDWIG, CANDACE R. KANTOR, and
DENNIS ENRICO,
Plaintiffs-Respondents,
v.
BOARD OF EDUCATION OF CLIFFSIDE PARK,
BERGEN COUNTY,
Defendant-Appellant.
______________________________________
Argued June 5, 2018 – Decided July 10, 2018
Before Judges Reisner, Mayer, and Mitterhoff
On appeal from Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No.
C-000161-16.
Robert D. Lorfink argued the case for appellant
(Fogarty & Hara, attorneys; Stephen R. Fogarty,
of counsel and on the briefs; Robert D. Lorfink,
on the briefs).
Richard A. Friedman argued the cause for
respondent (Zazzali, Fagella, Nowak, Kleinbaum &
Friedman, PC, attorneys; Richard A. Friedman and
Genevieve M. Murphy-Bradacs, of counsel and on
the brief).
PER CURIAM
Defendant Board of Education of Cliffside Park (Board)
appeals from a September 19, 2016 order denying defendant's
motion to dismiss and May 16, 2017 orders denying defendant's
motion for summary judgment and granting summary judgment in
favor of plaintiffs Paul Barila, William J. Ludwig, Candice R.
Kantor and Dennis Enrico's (plaintiffs) as to Count I of
plaintiffs' Amended Complaint. We affirm.
This matter arises from a collective bargaining agreement
negotiated by the Board and the Cliffside Park Education
Association (Association) for all teaching staff members
employed by the District. The parties stipulate to the facts as
follows. Plaintiffs are current and former teachers employed by
the Board. Plaintiffs were employed by the Board prior to July
1, 2015, and each had worked for the Board for at least ten
years as of July 1, 2015. Plaintiffs are in the bargaining unit
and are also members of the Association, which is the exclusive
collective bargaining representative for all teaching staff
members employed by the District.
Plaintiffs, the Board, and the Association were all parties
to a collective bargaining agreement that was in effect from
July 1, 2012, through June 30, 2015 (the 2012 Agreement).
Article VIII of the 2012 Agreement, which addressed sick leave,
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provided: "In accordance with the provisions of N.J.S.A.
18A:30-2, each Teacher shall be entitled to ten (10) sick leave
days with full pay in each school year. Unused sick leave days
shall, in accordance with the provisions of N.J.S.A. 18A:30-3,
be accumulated from year to year with no maximum limit."
Article VIII of the 2012 Agreement provided further:
Any teacher, who, as of the end of any
school year beginning with 09-10, has either
served the District at least ten (10) years
and has retired under the Teachers' Pension
and Annuity Fund upon such retirement or has
served the District at least twenty-five
(25) years and leaves the employ of the
Board for any reason, shall be paid
according to the table:
Formula for unused sick leave:
First 100 days x $125.00/day
Second 100 days x $0.00/day
Up to next 72 days x $1.75/day
Maximum is $25,000.00
Accordingly, any teacher who had either been employed by
the Board for at least ten years and retired under the Teachers'
Pension and Annuity Fund, or who had been employed by the Board
for twenty-five years and left the employ of the Board for any
reason, was entitled to compensation, as calculated by a
specific formula, for accumulated but unused sick leave, up to a
maximum amount of $25,000. Although the 2012 Agreement
specified that compensation for accumulated unused sick leave
was to begin with the 2009-2010 school year, the parties agree
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that an identical provision has appeared in previous collective
negotiations agreements for the past twenty years.
As the 2012 Agreement expired at the end of June 2015, the
Association and the Board negotiated a successor collective
negotiations agreement, which became effective on July 1, 2015
(the 2015 Agreement). The 2015 Agreement modified Article VIII
in two significant ways. First, the 2015 Agreement changed the
formula for unused sick leave by providing for up to a maximum
of 100 days at the rate of $150/day. Consequently, the maximum
amount of compensation that a teacher could receive for
accumulated but unused sick leave upon retirement under the
Teachers' Pension and Annuity Fund, or after twenty-five years
of employment, was $15,000. Accordingly, the 2015 Agreement
decreased the maximum amount of compensation from $25,000 to
$15,000, decreased the maximum number of days of accumulated,
but unused, sick days for which teachers could be compensated to
100 days, but increased the rate per day for these 100 days from
$125 to $150.
The parties agree that the Association knowingly bargained
for the modified accumulated sick leave provision in the 2015
Agreement. The parties also agree that the Association did not
seek or secure plaintiffs' permission prior to negotiating the
modification to Article VIII. To the contrary, several
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teachers, including plaintiffs, objected to the modifications
upon learning of the changes to Article VIII. Notwithstanding
these objections, the Association ratified the 2015 Agreement by
adopting a resolution approving it on April 27, 2016. None of
the plaintiffs voted to ratify the 2015 Agreement and they
continued to object to the new Article VIII.
Additionally, the parties stipulate as to the particular
impact of Article VIII of the 2015 Agreement on each of the
plaintiffs. Prior to July 1, 2015, plaintiff Kantor had accrued
233 sick days, which equated to $18,275 under the 2012
Agreement. Plaintiff Barila had accrued 308.5 sick days, which
equated to $25,000 under the 2012 Agreement. Plaintiff Enrico
had accumulated 282.5 sick days, which equated to $25,000 under
the 2012 Agreement. Likewise, plaintiff Ludwig accumulated 263
sick days, which equated to $25,000 under the 2012 Agreement.
Since this litigation commenced, plaintiffs Kantor and Barila
have retired and were paid for their unused, accumulated sick
leave pursuant to the formula set forth in Article VIII of the
2015 Agreement. The Board has taken the position that when
plaintiffs Enrico and Ludwig retire, they too will be
compensated for their unused, accumulated sick leave pursuant to
the formula set forth in Article VIII of the 2015 Agreement.
5 A-4234-16T4
On June 9, 2016, plaintiffs filed a complaint challenging
the retroactive divestiture of their accumulated but unpaid sick
leave. On July 26, 2016, defendant filed a motion to dismiss in
lieu of an answer. Plaintiffs then filed a cross-motion to file
a supplemental pleading on September 8, 2016. By order dated
September 19, 2016, the trial judge denied the motion to dismiss
and granted the motion to amend the pleading.
Plaintiffs filed a motion for summary judgment on March 21,
2017. The Board filed a cross-motion for summary judgment
seeking to dismiss Count I of plaintiffs' amended complaint
alleging breach of contract. The Board alleged that the trial
court had no jurisdiction to decide the case as N.J.S.A. 34:13A-
5.4(d) of the New Jersey Employer-Employee Relations Act confers
exclusive jurisdiction on the Public Employment Relations
Commission (PERC) to decide scope of negotiations issues. In
addition, the Board argued that it had the right to negotiate
away plaintiffs' right to accumulated sick leave, even if those
rights had vested.
In an extremely detailed and thorough thirty-nine page
opinion, Judge Robert P. Contillo rejected defendant's argument
that plaintiffs' claims involved a scope of negotiation issue.
As a result, the judge found that he had jurisdiction to hear
and decide the merits of the case. On the merits, the judge
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concluded that compensation for accumulated but unpaid sick
leave was a form of deferred compensation that, once earned,
could not be divested retroactively through negotiated
collective bargaining agreements.
On appeal, defendant challenges the trial court's decision
that plaintiffs' claims did not implicate a scope of
negotiations issue. Defendant also contends that Count I,
although phrased as a violation of contractually vested rights,
is actually a challenge to the ability of the Board and the
Association to negotiate changes to the accumulated sick leave
provisions. We affirm substantially for the reasons articulated
in the judge's opinion, adding the following comments.
In reviewing orders for summary judgment, an appellate
court uses the same standard as the trial court. Globe Motor
Co. v. Igdalev, 225 N.J. 469, 479 (2016); Prudential Prop. &
Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.
1998). We decide first whether there was any genuine issue of
material fact. If there was not, we then decide whether the
trial court's ruling on the law was correct. Walker v. Atl.
Chrysler Plymouth, 216 N.J. Super. 255, 258 (App. Div. 1987).
Because the facts in this case are stipulated, the issues on
appeal are purely legal in nature. Accordingly, our review of
the trial court's rulings are de novo. Estate of Hanges v.
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Metro. Prop. & Cas. Ins. Co. 202 N.J. 369, 382-83 (2010); see
also Manalapan Realty LP v. Twp. Comm. of Manalapan, 140 N.J.
366, 378 (1995) ("A trial court's interpretation of the law and
the legal consequences that flow from established facts are not
entitled to any special deference.").
I. Subject matter jurisdiction.
Subject matter jurisdiction is the power of the court to
hear and determine "cases of the class to which the proceeding
in question belongs. It rests solely upon the court's having
been granted such power by the Constitution or by valid
legislation . . . ." State v. Osborn, 32 N.J. 117, 122 (1960).
While state courts are generally granted "expansive authority"
to resolve a wide range of disputes, Thompson v. City of
Atlantic City, 190 N.J. 359, 378-79 (2007), subject matter
jurisdiction is not without limits. See, e.g. Bd. of Educ. of
Plainfield v. Plainfield Educ. Ass'n, 144 N.J. Super. 521, 525
(App. Div. 1976).
Our Supreme Court has held that PERC has primary
jurisdiction over scope of negotiations issues: "[U]nder
N.J.S.A. 34:13A-5.4(d) PERC is the forum for the initial
determination of whether a matter in dispute is within the scope
of collective negotiations. PERC's jurisdiction in this area is
primary." State v. State Supervisory Emps. Ass'n, 78 N.J. 54,
8 A-4234-16T4
83 (1978) (citations omitted). "[W]orking hours, compensation,
physical arrangement and facilities and customary fringe
benefits [are considered] the essential components of terms and
conditions of employment." Id. at 67 (citing Bd. of Educ. v.
Englewood Teachers Ass'n., 64 N.J. 1 (1973)). When a
controversy "concerns the propriety of the parties negotiating
and agreeing on the item in dispute, [the trial judge] should
refrain from passing on the merits of the issue," because "PERC
has primary jurisdiction." Ridgefield Park Educ. Ass'n v.
Ridgefield Park Bd. of Educ., 78 N.J. 144, 153-54 (1978).
As the trial court correctly noted, however, the question
of who may initiate such an inquiry is not entirely clear. In
Loigman v. Township Committee of the Township of Middletown, 297
N.J. Super. 287, 303 (App. Div. 1997), we found that N.J.S.A.
34:13A-5.4(d) "allows only public employers and majority
representatives to request scope-of-negotiations decisions."
See also Petersen v. Township of Raritan, 418 N.J. Super. 125
(App. Div. 2011) (holding an individual plaintiff could sue his
employer, the defendant township, alleging that the defendant's
elimination of traditional health care benefits to retirees
violated 1997-1999 collective negotiations agreement).
9 A-4234-16T4
Notwithstanding this ambiguity, as the trial court found,
it is clear that plaintiffs could not file an action with PERC.
Tellingly, neither defendant nor the Association expressed an
interest in obtaining a scope of negotiations determination from
PERC. The judge noted that, "the Association has expressed no
interest in initiating such a process. Nor has it sought to
intervene in this case." That neither the Board nor the
Association sought a determination from PERC, knowing there were
dissenting employees at the time of the negotiations, undercuts
their argument that the trial court was not empowered to resolve
the dispute.
The trial judge also correctly rejected defendant's
argument that Count I alleges a scope of negotiations issue. We
observe, as did the trial judge, that plaintiffs do not dispute
that the Board and the Association are empowered to negotiate
changes to the accumulated sick leave provisions. See Maywood
Educ. Ass'n v. Maywood Bd. Of Educ., 131 N.J. Super. 551 (Ch.
Div. 1974). The question in Count I was not whether the Board
and the Association could include sick pay benefits as a
negotiable item in their collective bargaining, but more
narrowly whether the Board and the Association could
retroactively divest plaintiff of their vested right to deferred
compensation in an amount that exceeds $15,000. Given the
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inability of plaintiffs to pursue a PERC determination,
defendant's apparent disinterest in filing a PERC claim, and the
narrow issue under review, the trial court did not err in
determining that it had subject matter jurisdiction to
adjudicate plaintiffs' breach of contract claim.
II. The negotiability of vested sick leave time.
We have recognized that payment for accumulated sick leave,
as a form of deferred compensation, is to be protected. In
Matter of Morris School District Board of Education, 310 N.J.
Super. 332 (App. Div. 1998), we held that although the parties
collectively agreed to be bound by a fact finder's determination
in advance, a retroactive cap on vested or accumulated
compensation could not be upheld absent a knowing and
intentional waiver by the persons adversely affected. The court
in Morris was "satisfied that the Commission's policy barring
divestment absent a knowing waiver was reasonable and within its
statutory powers." Id. at 343. In so holding, we noted that
"our Supreme Court has protected similar rights against
invasion." Ibid. (citing Gauer v Essex Cty. Div. of Welfare,
108 N.J. 140, 144 (1987)). Furthermore, the Supreme Court
opined in Owens v. Press Publishing Co., 20 N.J. 537 (1956) that
the right to severance pay survived the expiration of a
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collective bargaining agreement. As we recognized in Morris
School Distict, Owens held:
deferred compensation 'was not conditioned
upon the employee's discharge from service
within the term of the collective bargaining
agreement.' The Court reasoned that 'once
the right came into being it . . .
survive[d] the termination of the
agreement.' In contrast, the Court
concluded that the plaintiffs' claims for
severance pay allegedly earned in the
intervening period between expiration of the
collective bargaining agreement and their
respective discharge was 'ill-founded.'
[Morris School Dist., 310 N.J. Super. at 344
(quoting Owens, 20 N.J. at 348-
49)(alterations in original)].
In the instant matter, the trial court applied similar
reasoning in its opinion noting that the
[B]oard was authorized to negotiate over the
accumulated sick leave provisions
prospectively, or going forward. In
contrast, a board of education is generally
not permitted to divest teachers of their
vested rights earned under prior collective
negotiation agreements.
As did the trial judge, we agree that Morris and Owens
stand for the proposition that compensation for accumulated sick
leave is "earned" during the service performed by the teachers
during the term of any particular collective negotiation
agreement. Once vested, the right to compensation is a form of
deferred compensation that cannot retroactively be negotiated
12 A-4234-16T4
away. Morris School Dist., 310 N.J. Super. at 347-48. In that
regard, New Jersey courts have consistently protected various
forms of deferred compensation from retroactive divestment
through collective bargaining negotiations absent consent of the
affected employees. See e.g. State Troopers Fraternal Assoc. v.
State, 149 N.J. 38 (1997) (retroactive pay adjustments); Gauer,
108 N.J. at 144 (reimbursement of health insurance and Medicare
premiums); Owens, 20 N.J. at 442 (severance pay).
In this case, plaintiffs did not consent to the retroactive
divestment of their vested rights. Accordingly, the trial court
correctly held that the Board and Association impermissibly
applied the 2015 Agreement to retroactively divest plaintiffs'
right to earned compensation. There was no error in the trial
court's decision to deny defendant's motion for summary
judgment.
We affirm the orders on appeal.
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