Supreme Court Bids Farewell to Mandatory Public-Sector Union Agency Fees in Janus Ruling

On June 27, the Supreme Court issued a 5-4 opinion in Janus v. American Federation of State, County, and Municipal Employees, Council 31, Dkt. No 16-1466, holding that compulsory payment of public-sector union fees by non-union members violates First Amendment free speech rights.

The petitioner in Janus, challenged the constitutionality of an Illinois law requiring public employees to pay union agency fees, despite an employee’s choice not to join the union and his strong objection to the union’s positions in collective negotiations. The petitioner argued that the payment of mandatory agency fees by nonmembers in connection with collective negotiations for government employees is inherently political and violates the First Amendment. Siding with the petitioner and striking down the Illinois law, the Supreme Court overturned its prior 1977 decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977).

In Abood, the Supreme Court held that a union could constitutionally collect from dissenting employees financial support for collective negotiations so long as the fees were not used for ideological or political causes not germane to the union’s duties as the collective negotiations agent. In the Janus opinion, Justice Samuel Alito wrote that “Abood was wrongly decided and is now overruled,” concluding that the mandatory payment of public-sector agency fees violates the free speech rights of nonmembers by compelling them to subsidize private speech. Under Janus, “States and public-sector unions may no longer extract agency fees from nonconsenting employees.” However, the Court stated that unions could require payment from nonmembers for union representation in disciplinary matters and grievances.

The Janus decision leaves open the specific timeframe by which an employee may revoke compulsory payment of public-sector union fees.

For New Jersey public employers, the Janus decision must be applied in light of the requirements of the recently enacted Workplace Democracy Enhancement Act (“WDEA”). The WDEA includes requirements regarding an employee’s withdrawal of consent for the union to collect fees. Additionally, the WDEA prohibits public employers from encouraging employees to revoke their union fee deductions and from discouraging employees to join, form or assist a union. Public employers should be prepared to receive employees’ withdrawals of consent and should continue to follow the current statutory WDEA requirements.

If you have any questions or would like to discuss how the Janus decision or the WDEA affects you, please contact Joseph M. Hannon, Esq. at 973-535-7105 or jhannon@nullgenovaburns.com, or Jennifer Roselle, Esq. at 973-646-3324 or jroselle@nullgenovaburns.com.

AG Requires New Jersey Police Departments To Randomly Drug Test Officers

The New Jersey Attorney General has issued new directive requiring all law enforcement agencies in the state to conduct random drug testing. The guidelines now make all officers subject to drug testing, whether they are employed by state, county, or municipal departments. At a minimum, random drug testing shall be conducted at least once for the remainder of 2018 and at least twice every year thereafter. At least 10% of the total number of sworn officers in an agency shall be drug tested every year.

Each agency must also notify officers of the implementation of the random drug testing policy. This includes notification that, upon an initial positive result, the officer shall be suspended from all duties. Upon final disciplinary action, the officer shall be terminated from employment as a law enforcement officer, reported to the Central Drug Registry maintained by the State Police, and permanently barred from future law enforcement employment in New Jersey.

The new guidelines also contain reporting requirements. Each department will be required to notify the County prosecutor within 10 days of (1) a positive drug test by an officer, (2) a refusal by an officer to take a drug test, or (3) administration of a reasonable suspicion drug test to an officer. Upon completion of any disciplinary action, each agency shall report the discipline to the County Prosecutor. By December 31 each year, each law enforcement agency shall provide written notice to the County prosecutor of the dates of testing conducted during the prior year, the total number of sworn officers employed by the agency, the total number of sworn officers tested, and the total number of sworn officers who tested positive.

By January 31 of each year, each County prosecutor will have to send the Attorney General a report including a statement indicating those agencies under the County Prosecutor’s supervision that are in compliance with this Directive and those that are not. Neither summary shall reveal any subject officer’s identity.

Law enforcement agencies are required to adopt or amend their random drug testing policies to meet these new requirements within 30 days of the March 20, 2018 directive. Aside from these minimum requirements, the drug testing procedures themselves are unchanged.

For more information regarding this directive and best practices for implementing appropriate drug testing policies and procedures, please contact Joseph M. Hannon, Esq. at jhannon@nullgenovaburns.com or Jennifer Roselle, Esq. at jroselle@nullgenovaburns.com, attorneys in the firm’s Labor Law Practice Group, or call 973-533-0777.

Appellate Division Reverses PERC Decision on Dynamic Status Quo

For many years, public employers were required to pay increments on an expiring salary guide for its unionized workforce under a doctrine known as the dynamic status quo.  This doctrine was created by the Public Employment Relations Commission (“PERC”) in interpreting the Employer-Employee Relations Act, N.J.S.A. 34:13A-1, et. seq.  Recently, PERC abandoned the dynamic status quo doctrine in two matters holding that the doctrine no longer served the purposes of prompt labor disputes.  Accordingly, public employers were not required to pay increments upon the expiration of a collective negotiations agreement.

In the companion cases of County of Atlantic and PBA Local 243, et. al. and Township of Bridgewater and PBA Local 174, the Appellate Division reversed  PERC and held that PERC acted outside of its legislative mandate in abandoning the dynamic status quo.

PERC utilized the tax cap levy law and the 2% cap on interest arbitration awards as reasons why the dynamic status quo doctrine no longer served the interests of the parties.  PERC, using its expertise in this area, reasoned that these restrictions on public employers put significant restrictions on the parties’ flexibility in negotiations.  Therefore, PERC determined that employers were not required to pay these increments.

The Appellate Division reasoned that PERC went too far in abandoning the dynamic status quo doctrine.  The court determined that the tax cap levy law and the cap on interest arbitration law did not prohibit the payment of increments on an expired collective negotiations agreement.  Further, the court indicated that PERC did not appropriately interpret the Act.  In essence, public employers are free to negotiate not paying the increments or determining other methods to recoup the salary increments.

The practical effect of the decision is that public employers will again be subject to the dynamic status quo doctrine.  Accordingly, unless negotiated otherwise, salary increments will have to be paid once a collective negotiations agreement has expired and an agreement on a successor contract has not been reached.

For more information regarding the effects of this decision, please contact Joseph M. Hannon, Esq. at jhannon@nullgenovaburns.com or 973-533-0777.

PERC Decision Lays Groundwork for Negotiations Once Chapter 78 Contributions are Fully Implemented

New Jersey’s Public Employee Relations Commission (“PERC” or the “Commission”) has weighed in on the issues of (1) when health insurance contributions become negotiable once the fourth tier of contributions under Chapter 78 is completed and (2) at what level of contributions do negotiations commence once the contributions are negotiable. In Clementon Board of Education v. Clementon Education Association, P.E.R.C. NO. 2016-10, Docket No. SN-2015-041, August 13 2015, PERC agreed with the school board, ruling that the teachers’ union cannot  negotiate premium contributions for the successor agreement until the next collective negotiations agreement after Chapter 78 contributions become fully implemented.

To review, in 2011, the legislature passed a pension and health benefit reform act, P.L. 2011, c. 78, commonly referred to as “Chapter 78” which required a four-tiered implementation of health care contributions based on employee salary. Although the law went into effect on June 28, 2011, for unionized employees, Chapter 78’s implementation date was tied to the expiration of the collective negotiations agreement. Thus, once an agreement expired after June 28, 2011, the four-year implementation period began.  For many public employers the implementation date for Chapter 78 contributions varied with each bargaining unit.

In Clementon, the final year of the four-year phase-in of higher health insurance contributions overlapped with the first year of a new agreement. The teachers union argued that as soon as full implementation of Tier 4 has occurred, health benefit contributions should become immediately negotiable for the successor agreement even if full implementation occurs mid-term in the agreement. The school district disagreed, arguing health benefits should remain as is under Chapter 78 until the next round of negotiations for a new contract. The Commission sided with the school board, deciding negotiations of health benefit contribution should not occur until the next contract is negotiated.

PERC found that Chapter 78 expressly, specifically and comprehensively sets forth that health benefit contribution levels become negotiable in the “next collective negotiations agreement after … full implementation” of the four-tiered level of employee contributions is achieved. In so deciding, PERC laid the groundwork for handling negotiations of health insurance contributions once Chapter 78 is fully implemented.

For example, if Tier 4 payments are fully implemented on December 31, 2015 and the collective negotiations agreement does not expire until December 31, 2016, then health insurance contributions do not become negotiable until January 1, 2017.  This is true whether or not the collective negotiations agreement is expired or not.  Negotiations are tied to when Chapter 78 contributions are fully implemented, i.e. the full year of Tier 4 payments are completed, regardless of term.

Additionally, PERC determined that health insurance contributions shall be negotiated from the Tier 4 structure once negotiations are permitted.  Therefore, once negotiations begin on this issue pursuant to the timeframe explained above, the parties shall treat contributions as if the Tier 4 payments are part of the collective negotiations agreement.

According to the New Jersey Education Association’s (“NJEA”) website, NJEA plans to appeal the Commission’s decision in Clementon.

For more information on the Commission’s decision and how it will affect a public employer’s existing and future contracts, please contact Joseph M. Hannon, Esq. at jhannon@nullgenovaburns.com or Jennifer Roselle, Esq. at jroselle@nullgenovaburns.com.

 

N.J. Supreme Court Finds Chapter 78 Did Not Create an Enforceable Contract Right

In Burgos v. State of New Jersey, the New Jersey Supreme Court held that the 2011 pension and health benefit reform statute, known as Chapter 78, did not create an enforceable contract that was binding on the State to make the pension payments required by that legislation.

The decision is the result of multiple actions filed by individuals and unions, on behalf of New Jersey State employees, after the fiscal year 2015 budget included contributions that were less than 1.57 billion dollars that Chapter 78 required.  The Law Division accepted the Unions’ argument that Chapter 78 created a contractual right to the payment and failure to do so was an impairment of that contract.  The Supreme Court reversed.

The plain language of Chapter 78 set forth a clear statement that the failure to make the required pension contributions results in a contractual impairment.  Although the Supreme Court recognized the good intentions of the legislature in passing Chapter 78, the Court simultaneously rejected the legislature’s authority to do so.  The Court’s rationale was largely based upon two clauses within the New Jersey Constitution.

First, the Debt Limitation Clause of the New Jersey Constitution prohibited such action.  The intention of Chapter 78 could not set aside the broad, clear language contained in the Debt Limitation Clause.  In sum, this provision limits the amount of debt or liability the Legislature may incur on a year to year basis without a vote of public.  The Court found that the contributions required by Chapter 78 surpassed the permissible boundaries of the Debt Limitation Clause and therefore would require a vote of the public in order to pass constitutional muster.

Second, the Court reasoned that the mandates of Chapter 78 failed to meet the requirements of the Appropriations Clause of the New Jersey Constitution.  The Court reasoned that the legislature retains the power to annually appropriate funds as necessary.  The required contribution in Chapter 78 did not retain the legislature’s authority to annually appropriate such funds.

These two constitutional clauses were the linchpin in the Court’s decision to uphold the State’s failure to make the required Chapter 78 contributions.  While the Court explained the legal rationale for its decision, it also highlighted the practical imports of its decision as well, among which was the damage to the public trust.  In addition, the Court recognized the significant difficulties facing the pension system.  However, rather than fashion a judicial remedy, the Court called upon the public noting “it is the people’s responsibility to hold the elective branches of government responsible for their judgment and for their exercise of constitutional powers.”

The Court’s decision in Burgos negated the required State contributions of Chapter 78 to the pension system.  The issue of how to fund the depleted public employee pension system will continue to be at the forefront of future public debate.

For more information, or if you have any questions, please contact Joseph M. Hannon, Esq., at 973.535.7105, jhannon@nullgenovaburns.com, or Jennifer Roselle Esq., at 973.646-3324, jroselle@nullgenovaburns.com.

The Evolving Law and the Static Public Sector Collective Negotiations Agreement

When was the last time you had your public sector collective negotiations agreement reviewed to determine whether your contract contains non-negotiable items?  Too often contractual provisions that were negotiated years ago survive contract after contract without this basic question even being considered.  This basic question should be regularly raised concerning every Article of your collective negotiations agreement to ensure you are not negotiating away managerial prerogatives nor providing greater benefits than need to be provided.

It is likely your collective negotiations agreement contains a provision that is not negotiable.  That means it is a topic that the public employer has complete discretion on and cannot be subject to a grievance.  There are various examples, but take for instance, work schedules and shift changes.  Work schedules and hours that individuals work are generally a negotiable issue.  However, the hours and days in which services are to be provided are non-negotiable issues.  Such nuances in public sector labor law occur with many topics from health insurance to sick leave to promotional practices and procedures, etc.  Knowledge of the negotiable and non-negotiable aspects of these items is vital in ensuring your collective negotiations agreement is not giving away any of these important managerial prerogatives.

Decisions as to negotiability of issues are constantly being rendered by the Public Employment Relations Commission.  These decisions may have changed a provision in your collective negotiations agreement that was previously negotiable to be a non-negotiable subject.  Or, you simply may have been operating with a collective negotiations agreement that contains non-negotiable items and simply haven’t noticed.  These items do not need to be bargained out of the collective negotiations agreement.  Rather, they may be removed through a process called a Petition for a Scope of Negotiations Determination.  This is an effective tool which should be utilized when necessary to remove such non-negotiable issues from a collective negotiations agreement.  However, a discussion with the applicable unions explaining that the issue is not negotiable, may obviate the need for resorting to the filing of a scope of negotiations petition.

The first step in the process though is to know what should and should not be in your collective negotiations agreement.  When was the last time you undertook this review?

For further information or advice on this topic, please contact Joseph M. Hannon, Esq., jhannon@nullgenovaburns.com, in the Public Sector Labor Law Practice Group.