dissenting.
If appellate judges were knights errant, the majority opinion would be more defensible. The judicial role, however, is more restrained. Reviewing courts should defer to the decisions of administrative agencies unless those decisions are arbitrary, capricious, or unreasonable.
Pursuant to the collective negotiations agreement between the Jefferson Township Board of Education (the local board) and the Jefferson Township Education Association, the local board provided additional compensation to employees who gave advance notice of their intention to retire. Petitioner, Anne Hall, a tenured school secretary, availed herself of this benefit by notifying the local board on April 16, 1984, that she intended *308to retire on June 30, 1987. The local board approved Hall’s retirement and paid her the $1500 “longevity payment” to which she was entitled under the agreement.
Subsequently, Hall’s financial status took a turn for the worse, when her husband died and her child fell ill. She requested a two-year extension of her retirement date. Instead of categorically rejecting her request, the local board informed her that any extension would be based on her job performance. After a negative performance evaluation, the local board denied her request. At the conclusion of the administrative process, the State Board of Education (State Board) upheld the denial.
The State Board, consistent with the decision of the administrative law judge, concluded that “petitioner’s tendered resignation with an effective date of June 30, 1987 was legally binding on both parties upon acceptance by the board on May 14, 1984, and could not thereafter be unilaterally rescinded or modified.” In affirming that conclusion, the Appellate Division recognized the limits of its authority: “Our review function is very limited in these circumstances. A court cannot vacate the State Board’s determination in the absence of a showing that the decision is arbitrary or capricious or lacks support in the record.”
As the Appellate Division recognized, when reviewing an administrative agency decision, an appellate court should determine only whether the decision is arbitrary or capricious or lacks support in the record. Henry v. Rahway State Prison, 81 N.J. 571, 579-80, 410 A.2d 686 (1980); Dore v. Board of Educ., 185 N.J.Super. 447, 453, 449 A.2d 547 (App.Div.1982). The reviewing court may not substitute its judgment for that of the agency. Mead Johnson & Co. v. Borough of S. Plainfield, 95 N.J.Super. 455, 466, 231 A.2d 816 (App.Div.1967).
In a decision limited to the facts of this case, ante at 306, 593 A.2d 307, the majority concludes “that the Board was not entitled to subject Hall to a performance-based standard and could not deny her request to change her intended retirement *309date.” The flaw in the conclusion is that the majority does not find that the decision was arbitrary, capricious, or unreasonable. In the absence of any such finding, the majority looks to the past practice of the local board in permitting other employees to rescind or modify their retirement notifications. Contrary to the majority’s view, however, that practice did not create a contractual term allowing petitioner to rescind at will. Nor, as the majority recognizes, did the local board’s past practice estop it from rejecting petitioner’s request. Nothing in the record supports the notion that petitioner relied on the local board’s practice in submitting her retirement notice. See Foley Mach. Co. v. Amland Contractors, Inc., 209 N.J.Super. 70, 75-76, 506 A.2d 1263 (App.Div.1986). Furthermore, the effect of the majority opinion may be to require local school boards and teachers’ unions to reconsider the advisability of “special retirement allowances,” such as was negotiated between the Jefferson Township Board and the Jefferson Township Education Association. By holding that the local board created a new contractual term by permitting other employees to rescind or modify, the majority puts local boards in the untenable position of risking such programs whenever they consider an individual employee’s modification request.
Education remains essentially a local matter. Accordingly, the local board could grant or deny a request such as petitioner’s. Instead of denying her petition outright, the local board took a more considered approach, basing its decision on petitioner’s job performance. This, I submit, was a reasonable decision, well within the local board’s prerogatives. The mere fact that the local board may have followed a different practice in other cases is not dispositive. A reasonable practice does not become unreasonable merely because it is new.
The record reflects that petitioner was a difficult employee. Her supervisor’s performance evaluation indicated her “reluctance to cooperate.” The assistant superintendent confirmed to the local board that petitioner’s “attitude is terrible.”
*310Confronted with this evidence, the State Board ruled that it was
discretionary on the part of the [local] board whether to agree to a requested rescission and modification thereof.
To hold otherwise would render meaningless a tendered resignation and a board’s acceptance thereof, as the employee would be free to unilaterally rescind prior to the effective date.
The Appellate Division appropriately deferred to the State Board’s decision; this Court should do the same. I would affirm the judgment of the Appellate Division upholding the decision of the State Board of Education.
Justices CLIFFORD and O’HERN join in this opinion.
For reversal and remandment — Chief Justice WILENTZ, and Justices HANDLER, GARIBALDI and STEIN — 4.
For affirmance — Justices CLIFFORD, POLLOCK and O’HERN — 3.