NOT FOR PUBLICATION WITHOUT THE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-4232-18T3
IN THE MATTER OF
MATAWAN-ABERDEEN
REGIONAL BOARD OF
EDUCATION,
Petitioner-Appellant,
and
MATAWAN-ABERDEEN
REGIONAL EDUCATION
ASSOCIATION,
Respondent-Respondent.
_________________________
Argued telephonically June 1, 2020 –
Decided July 27, 2020
Before Judges Sumners and Geiger.
On appeal from the New Jersey Public Employment
Relations Commission, P.E.R.C. No. 2018-048.
Joshua I. Savitz argued the cause for appellant (Weiner
Law Group LLP, attorneys; Joshua I. Savitz, of counsel
and on the briefs).
Craig A. Long argued the cause for respondent
Matawan-Aberdeen Education Association (Zazzali
Fagella Nowak Kleinbaum & Friedman, PC, attorneys;
Richard A. Friedman, of counsel and on the brief; Craig
A. Long, on the brief).
Christine R. Lucarelli, General Counsel, argued the
cause for respondent Public Employment Relations
Commission.
PER CURIAM
This appeal requires us to determine whether the New Jersey Public
Employment Relations Commission (PERC) misinterpreted L. 2011, c. 78, §§
39 and 41 (Chapter 78), codified at N.J.S.A. 52:14-17.28c and N.J.S.A. 18A:16-
17.1, in ruling the Matawan-Aberdeen Regional Board of Education (the Board)
was obligated to negotiate the shift in dental insurance premium costs from the
Board to members of the Matawan-Aberdeen Regional Education Association
(the Association) when the Board decided to replace the members' public health
insurance provider with a private health insurance provider. Because we
conclude PERC correctly interpreted Chapter 78 does not preempt the parties'
collective negotiation agreements (CNAs or agreements) when the Board
voluntarily switched providers, and the Association's grievance regarding
payment of dental coverage is subject to arbitration, we affirm.
A-4232-18T3
2
I
The Board is a public employer under the New Jersey Employer-
Employee Relations Act, N.J.S.A. 34:13A-1 to -5.9. The Association represents
Board employees collectively organized in four bargaining units: (1) teachers;
(2) clerical employees, assistants, and technicians; (3) bus drivers; and (4)
custodians and maintenance workers. The Board and the Association entered
into CNAs with each unit for the period of July 1, 2014 through June 30, 2017.
In pertinent part, each CNA provides:
The Board will continue to pay all premiums to provide
each employee for the duration of this [a]greement the
New Jersey Dental Service Plan (known as the Delta
Incentive Plan) family coverage, including domestic
partner.
The CNAs afford a four-step grievance procedure to address allegations of a
violation of the agreement, culminating in binding arbitration.
At its meeting on February 27, 2017, the Board adopted a resolution
terminating its participation in the School Employees' Health Benefits Plan
("SEHBP") as of May 1, 2017. Within the week, the Board's school business
administrator announced the change to all employees and informed them of the
new private plan and private health insurance provider, Horizon Blue Cross Blue
Shield of New Jersey (Horizon). Under this new plan, payment of dental
A-4232-18T3
3
coverage would be the responsibility of each employee, in contrast to the
SEHBP, which included dental coverage paid by the Board.
About two weeks later, the Association filed a grievance stating the Board
needed to "continue to pay all premiums related to the New Jersey Dental
Service Plan (Dental Incentive Plan) as stated in the [CNAs,]" because there
should be "[n]o employee contribution towards dental coverage." The Board
denied the grievance, but the parties agreed to place the CNA grievance process
on hold while they attempted to resolve their dispute.
After an accord could not be reached, the Association filed an unfair labor
practice charge alleging the Board violated N.J.S.A. 34:13A-5.4(a)(1), (3), and
(5), by unilaterally requiring staff to contribute to the previously covered dental
coverage premiums. The Board opposed the allegation. PERC deferred the
matter to the parties' CNA grievance and arbitration process. Approximately
ten days later, the Association filed a request with PERC to establish a panel of
arbitrators. About a month later, before a panel of arbitrators had been
established, the Board filed a scope of negotiations petition with PERC seeking
to permanently and temporarily restrain the arbitration proceedings.
Following review of the parties' briefs, PERC issued an eleven-page
decision and order on April 25, 2019, finding the dental coverage payment issue
A-4232-18T3
4
mandatorily negotiable and legally arbitrable. The final agency decision noted
its jurisdiction was limited to addressing whether "the subject matter in dispute
[is] within the scope of collective negotiations." Ridgefield Park Educ. Ass'n v.
Ridgefield Park Bd. of Educ., 78 N.J. 144, 154 (1978). Thus, the merits of the
issue were properly not determined by PERC.
II
On appeal, the Board contends PERC's decision was erroneous, arbitrary,
capricious, or unreasonable because the Board had the unilateral right to change
health insurance providers under Chapter 78 without paying the Association
members' dental coverage, and it was contrary to its recent ruling involving the
same situation in In re Readington Tp. Bd. of Ed., P.E.R.C. No. 2017-018, 43
NJPER 128 (2016).
The Board asserts that based on the provisions of N.J.S.A. 52:14-17.28c
it had the managerial right not to renew its contract with the SEHBP and instead
contract with a private health insurance provider, regardless of whether it
included dental coverage. The Board submits it exercised "its legal right to
change carriers" which "does not somehow negate the fact . . . it was [then]
obligated by N.J.S.A. 52:14-17.28c to have the employees pay for their dental
A-4232-18T3
5
benefits." As such, the Board maintains arbitration should be permanently
restrained.
Although this matter involves employer and employee relations, we "owe
no particular deference to PERC's interpretation of Chapter[] . . . 78[,]" because
the agency "is not charged with administering [the law]." In re New Brunswick
Mun. Emps. Ass'n, 453 N.J. Super. 408, 416 (App. Div. 2018). Thus, our review
is de novo. State v. Frank, 445 N.J. Super. 98, 105 (App. Div. 2016). That said,
we do not take issue with PERC's interpretation of Chapter 78 in the context of
its application of the three-prong balancing test set forth in In re Local 195,
IFPTE, AFL-CIO v. State, 88 N.J. 393, 404-05 (1982) as mandated in In re City
of Jersey City v. Jersey City Police Officers Benevolent Ass'n, 154 N.J. 555,
575 (1998), to determine whether the Association's grievance is within the scope
of collective negotiations.
The Court in Local 195, declared:
[A] subject is negotiable between public employers and
employees when (1) the item intimately and directly
affects the work and welfare of public employees; (2)
the subject has not been fully or partially preempted by
statute or regulation; and (3) a negotiated agreement
would not significantly interfere with the determination
of governmental policy.
[88 N.J. at 404-05.]
A-4232-18T3
6
Under these guidelines, PERC determined the parties' dispute was mandatorily
negotiable and legally arbitrable.
PERC found the first prong was applicable because "the allocation of
dental premiums intimately and directly affects the work and welfare of
employees."
As to the second prong, PERC concluded Chapter 78 did not preempt the
CNAs' provisions requiring negotiation of health insurance benefits. In
accordance with Council of N.J. State Coll. Locals v. State Bd. of Higher Educ.,
91 N.J. 18, 30 (1982) and Bethlehem Tp. Bd. of Ed. v. Bethlehem Tp. Ed. Ass'n,
91 N.J. 38, 44-45 (1982), PERC held "[w]here a statute or regulation is alleged
to preempt an otherwise negotiable term or condition of employment, it must do
so expressly, specifically and comprehensively." Based on the parties'
certifications, PERC determined by the end of the 2014-2015 school year the
Association members had completed full implementation of the fourth tier of
health insurance contributions required by Chapter 78. Because of this full
implementation, PERC found the members' contributions were required to stay
"at the fourth tier level until the next successor agreement after full
implementation, when any negotiated changes could be implemented."
A-4232-18T3
7
Clementon Bd. of Educ. v Clementon Educ. Ass'n, P.E.R.C. No. 2016-10, 42
NJPER 34 (2015).
PERC acknowledged the Board's argument that N.J.S.A. 52:14-17.28c
preempted the dispute because "once it moved to a private plan on May 1, 2017,
it was statutorily required to include dental insurance premiums in the cost of
coverage." PERC noted the statute's definition of "cost of coverage" as:
As used in this section, "cost of coverage" means the
premium or periodic charges for medical and
prescription drug plan coverage, but not for dental,
vision, or other health care, provided under the State
Health Benefits Program or the School Employees'
Health Benefits Program; or the premium or periodic
charges for health care, prescription drug, dental, and
vision benefits, and for any other health care benefit,
provided pursuant to [other statutes.]
[N.J.S.A. 52:14-17.28c (emphasis added).]
PERC interpreted the statute's plain language to mean "when an employer
participates in the SEHBP, the cost of coverage excludes charges for dental
coverage, but when an employer utilizes a private plan, the cost of coverage
includes charges for dental coverage." PERC recognized this interpretation was
consistent with Board's position but found it did not control this dispute with the
Association because the Board voluntarily choose to change from SEHBP to a
private plan. PERC determined nothing in Chapter 78, nor any other law,
A-4232-18T3
8
required the Board to switch to a private plan, which would not include payment
of dental premiums. This unilateral and discretionary change, according to
PERC, made a significant difference.
PERC found the Board's choice to change created a situation where the
Board "failed to fulfill a contractual commitment under the CNA[s] to cover the
full cost of dental coverage." Considering this, PERC held the primary issue is
not "whether N.J.S.A. 52:14-17.28c preempts[,]" but "whether an employer's
choice to change carriers is mandatorily negotiable and legally arbitrable when
it impacts the allocation of dental insurance premiums."
With respect to the third prong, PERC found "negotiations or arbitration
over this dispute, as we have defined it . . . [in prong two], would not
significantly interfere with governmental policy." Relying upon its rulings in
Borough of Metuchen, P.E.R.C. No. 84-91, 10 NJPER 127 (1984) and Union
Twp., P.E.R.C. No. 2002-55, 28 NJPER 198 (2002), PERC held "[a]n
employer's choice of health insurance carriers is mandatorily negotiable when
changing the identity of the carrier changes terms and conditions of
employment, 'i.e., the level of insurance benefits, or the administrat ion of the
plan.'"
A-4232-18T3
9
Finding the shifting of payment for dental premiums from employer to
employee as affecting "both the level of insurance benefits and the
administration of the plan[,]" PERC, citing Bridgewater Twp., P.E.R.C. No 95-
28, 20 NJPER 399, 401 (1994), aff'd 21 NJPER 401 (App. Div. 1995) (finding
the Township was required to negotiate a term and condition of employment
when it unilaterally deducted HMO premium payments from employees despite
language in CNAs clearly provided no charge for the coverage), held "the
allocation of health insurance premiums is a negotiable term and condition of
employment." PERC also stated the Board's interest in choosing a health
insurance carrier was outweighed by the employee's interest in having the Board
fulfill the agreements' commitments.
Our review of PERC's interpretation of Chapter 78 and its application of
Local 195, lead us to conclude it was not arbitrary, capricious, or unreasonable
in ordering the Association's grievance regarding the Board's decision not to pay
for members' dental plan is mandatorily negotiable and is arbitrable given their
dispute. See Jersey City Police Officers Benevolent Ass'n, 154 N.J. at 568
(citations omitted) (holding a PERC decision that is not "arbitrary or capricious"
will not be disturbed).
A-4232-18T3
10
The goal of "statutory interpretation is to determine and 'effectuate the
Legislature's intent,'" by considering "the plain 'language of the statute, giving
the terms used therein their ordinary and accepted meaning.'" State v.
Rivastineo, 447 N.J. Super. 526, 529 (App. Div. 2016) (quoting State v. Shelley,
205 N.J. 320, 323 (2011)). Nevertheless, a statute's plain language "should not
be read in isolation, but in relation to other constituent parts so that a sensible
meaning may be given to the whole of the legislative scheme." Wilson ex rel.
Manzano v. City of Jersey City, 209 N.J. 558, 572 (2012). "When all is said and
done, the matter of statutory construction . . . will not justly turn on lite ralisms,
technisms or the so-called formal rules of interpretation; it will justly turn on
the breadth of the objectives of the legislation and the commonsense of the
situation." Jersey City Chapter, P.O.P.A. v. Jersey City, 55 N.J. 86, 100 (1969).
Thus, "where a literal interpretation would create a manifestly absurd result,
contrary to public policy, the spirit of the law should control." Hubbard v. Reed,
168 N.J. 387, 392 (2001) (quoting Turner v. First Union Nat'l Bank, 162 N.J.
75, 84 (1999)); see also Gallagher v. Irvington, 190 N.J. Super. 394, 397 (App.
Div. 1983) ("[a]n absurd result must be avoided in interpreting a statute").
While N.J.S.A. 52:14-17.28c recognizes dental insurance coverage is not
part of a private plan as it is with the SEHBP, the statute does not state if an
A-4232-18T3
11
employer voluntarily chooses to switch to a private plan, employees must pay
for the dental coverage even in the face of a CNA provision clearly stating the
"Board will continue to pay all premiums to provide each employee for the
duration of this Agreement the New Jersey Dental Service Plan (known as the
Delta Incentive Plan) family coverage . . . ." We agree with the Association that
the language of the statutory preemption is irrelevant because the fact that it was
a voluntary non-mandated change in health insurance providers requires this
dispute to be arbitrated as a mandatorily negotiable and legally arbitrable issue.
We are unpersuaded by the Board's assertion PERC is bound by its ruling
made just two years earlier in In re Readington Twp. Bd. of Ed., P.E.R.C. No.
2017-018, 43 NJPER 128 (2016), which held N.J.S.A. 52:14-17.28c preempted
mandatory negotiation obligations. There, PERC held employees had to pay
one hundred percent of the their dental premiums after the Readington Board of
Education switched from SEHBP to a private carrier in accordance N.J.S.A.
52:14-17.28c despite the terms of their CNA providing the cost of dental
coverage was to be paid by the Board. Id. at 128. PERC granted the Readington
Board's restraint on arbitration stating the Board had "exercised its managerial
prerogative to select a private health insurance carrier and stop[] paying 100%
A-4232-18T3
12
of the premium cost of dental coverage" and negotiations were preempted by
N.J.S.A. 52:14-17.28c and N.J.S.A. 18A:16-17.2.1 Ibid.
1
N.J.S.A. 18A:16-17.2 provides:
A public employer and employees who are in
negotiations for the next collective negotiations
agreement to be executed after the employees in that
unit have reached full implementation of the premium
share set forth in section 39 of P.L. 2011, c. 78
(C.52:14-17.28c) shall conduct negotiations
concerning contributions for health care benefits as if
the full premium share was included in the prior
contract. The public employers and public employees
shall remain bound by the provisions of sections 39 and
41 of P.L. 2011, c. 78 (C.52:14-17.28c and C.18A:16-
17.1), notwithstanding the expiration of those sections,
until the full amount of the contribution required by
section 39 has been implemented in accordance with
the schedule set forth in section 41.
Employees subject to any collective negotiations
agreement in effect on the effective date of P.L. 2011,
c. 78, that has an expiration date on or after the
expiration of sections 39 through 44, inclusive, of P.L.
2011, c. 78 (C.52:14-17.28c et al.), shall be subject,
upon expiration of that collective negotiations
agreement, to sections 39 and 41 until the health care
contribution schedule set forth in section 41 is fully
implemented.
After full implementation, those contribution levels
shall become part of the parties’ collective negotiations
and shall then be subject to collective negotiations in a
A-4232-18T3
13
Although admitting In re Readington Twp. Bd. of Ed. has "substantially
similar facts in which [a board of education] began to charge employees for the
cost of dental coverage once it moved from the SEHBP to a private carrier,
despite language in the CNA stating that the [b]oard shall pay the full cost of
dental coverage[,]" PERC rejected the contention it had to make the same ruling.
PERC parted company from that ruling, stating:
We held that N.J.S.A. 52:14-17.28c preempted the
dispute. However, we depart from Readington defining
that issue as the focus of this dispute. As set forth
above, we find this dispute centers upon whether an
employer's voluntary choice to change carriers is
mandatorily negotiable and legally arbitrable when it
impacts the allocation of dental insurance premiums.
Readington did not focus on or address that aspect of
the dispute.
We find PERC's analysis distinguishing the within situation from In re
Readington Twp. Bd. of Ed. to be lacking depth and clarity. Nevertheless, for
the reasons we discussed above, we conclude PERC was right in reaching a
different decision here. The Association points to In re Masiello, 25 N.J. 590,
598 (1958), where our Supreme Court held even though "constancy of decision
is desirable" there is an acknowledgement "[i]n the field of administrative law
manner similar to other negotiable items between the
parties.
A-4232-18T3
14
generally the doctrine of stare decisis has not had the same forceful impact as it
has had in the common law." (Citations omitted). Thus, administrative
agencies, such as PERC, can depart from prior rulings when such decisions are
"brought about by general policy considerations or the need therefore becomes
manifest through experience." Ibid. Moreover, considering neither this court
nor our Supreme Court were asked to review PERC's ruling in Readington Twp.
Bd. of Ed., there is no binding precedent restricting PERC from reconsidering
that ruling and reaching a different decision here.
Affirmed.
A-4232-18T3
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