Borough of East Rutherford v. East Rutherford PBA Local 275

61 A.3d 941, 213 N.J. 190
CourtSupreme Court of New Jersey
DecidedMarch 19, 2013
StatusPublished
Cited by95 cases

This text of 61 A.3d 941 (Borough of East Rutherford v. East Rutherford PBA Local 275) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Borough of East Rutherford v. East Rutherford PBA Local 275, 61 A.3d 941, 213 N.J. 190 (N.J. 2013).

Opinions

Justice LaVECCHIA

delivered the opinion of the Court.

In this appeal, the Court reviews a public-sector arbitration award. The subject matter of the grievance that led to the award concerns the provision of health benefits under a collectively bargained agreement (CBA) between the Borough of East Rutherford (Borough) and the East Rutherford Policemen’s Benevolent Association, Local 275 (PBA), effective for the period of January 1, 2005, through December 31, 2009. The Borough furnished healthcare coverage for its employees through the State Health Benefits Plan (SHBP). Prior to and at the commencement of the CBA’s effective period, the SHBP’s pertinent medical coverage plans required a $5.00 co-payment from plan participants for doctor’s office visits. Effective January 1, 2007, the State Health Benefits Commission (Commission) increased the co-payment requirement to $10.00 per office visit. The Borough passed along the increase to members covered by the CBA.

The PBA filed a grievance disputing the increase, claiming among other things that the Preservation of Rights Article of the CBA precluded imposition of the higher co-payment obligation on employees covered by the existing CBA. The matter proceeded to arbitration. With only days remaining before the CBA’s effective period expired, the Arbitrator found a violation of the CBA and ordered a remedy. The Arbitrator stated that employees covered by the CBA were required to comply with the increased co-payment instituted by the Commission. However, she concluded that from the effective date of the co-payment increase through the duration of the CBA’s term, the employer had to maintain the past practice that required employees to pay only a $5.00 co-payment per doctor visit. Thus, the arbitration award ordered the employer to reimburse employees for the incremental increase in co-payments through the end of the contract period.

This appeal comes to us from the Appellate Division’s reversal of the Law Division’s vacation of the arbitration award. The Appellate Division held that the Arbitrator’s construction of the [194]*194CBA was reasonably debatable and rejected the Borough’s additional claims that the award was illegal.

We affirm the Appellate Division judgment. Because judicial review of an arbitration award is deferential to an arbitrator’s conclusions, the instant award must be sustained. The interpretation reached by the Arbitrator of this contract was within the range of what is reasonably debatable. Furthermore, the remedy ordered by the Arbitrator to effectuate her interpretation was neither contrary to existing law nor beyond the scope of what was reasonably debatable. We agree with the appellate panel’s conclusion that the additional arguments advanced to overturn the award lack merit.

I.

A.

The facts relevant to this appeal can be concisely summarized. The Borough enrolled in the SHBP effective January 2002 for the purpose of providing healthcare coverage to its employees. Pursuant to the then-existing SHBP medical coverage programs, from 2002 through the end of 2006, PBA members participating in the SHBP’s NJ Plus or HMO medical coverage plans paid a $5.00 co-payment for each doctor’s office visit. On September 14, 2006, Horizon Blue Cross Blue Shield of New Jersey, Administrator of .the SHBP, notified the Borough of rate changes for 2007. The notice stated that, effective January 1, 2007, the co-payment requirement was increased by action of the Commission to $10.00 per office visit.

When that increase was put into effect, the existing CBA between the PBA and the Borough covered the period from January 1, 2005, through December 31, 2009. Several provisions of the CBA pertinent to this appeal are included here in their entirety.

Article 29 addresses “Medical and Insurance Coverage” and provides in part:

[195]*19529.01 The Borough will continue to provide and pay for existing Medical and prescription plans and coverage for Employees covered by this Agreement and their families. Any change in carrier or source of coverage shall result in equal or better coverage.
29.01 (a) A Three ($3.00) Dollar Co-Payment will be attached to the Prescription Insurance Plan, per prescription.
29.02 All increases in premiums during the term of this Agreement shall be borne entirely by the Borough pursuant to present practice.

Article 7 covers “Preservation of Rights.” It specifies in pertinent part:

7.02 Nothing contained herein shall be construed to deny or restrict the Borough of its rights, responsibilities and authority, under R.S. 11.40 and 40A or any other national, state, country, or other applicable laws.[1]
7.03 The Borough agrees that all benefits, terms and conditions of employment relating to the status of Employees, which benefits, terms and conditions of employment are not specifically set forth in this Agreement, shall be maintained at not less than the highest standards in effect at the time of the commencement of the collective bargaining negotiations between the parties leading to the execution of this Agreement.
7.04 Unless a contrary intent is expressed in this Agreement, all existing benefits, rights, duties, obligations and conditions of employment applicable to any Employee pursuant to any rules, regulations, instruction, directive, memorandum, practice, statute or otherwise shall not be limited, restricted, impaired, removed or abolished.

In addition, Article 5, Section 5.01, titled “Existing Law,” states, “[t]he provisions of this Agreement shall be subject to [and] subordinate to and shall not annul or modify existing applicable provisions of State or Federal Laws.”

Finally, Article 36 covers grievance procedures under the CBA. Under Section 36.02, a “grievance” is

any complaint, difference or dispute between the Borough and any Employee with respect to the interpretation, application or violation of any of the provisions of [the CBA] or any rule or regulation or policies, agreements or administrative decisions affecting any Employee(s) covered by this agreement.

The settlement of grievances follows a multistep procedure that leads to binding arbitration provided no earlier resolution is achieved. If the parties seek resolution of a grievance through [196]*196arbitration, the CBA provides that “[t]he arbitrator shall have no authority to add to or subtract from the agreement.”

We turn next to the history that led this matter to this Court.

B.

When notified of the change in the required co-payment, the PBA filed a grievance seeking reimbursement for the monetary difference between the previous co-payment amount and the increased amount. The Borough denied the grievance, and the PBA demanded arbitration.

The Borough filed a scope of negotiations petition with the New Jersey Public Employment Relations Commission (PERC) in response to the demand for arbitration, arguing that reimbursing PBA members for the $5.00 increase was preempted by statutory provisions governing the SHBP.2 Specifically, the Borough relied on a 2007 amendment to an SHBP statute. The relevant statutory provision, which addresses contracts purchased by the Commission and provided to SHBP plan participants, states in part:

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Cite This Page — Counsel Stack

Bluebook (online)
61 A.3d 941, 213 N.J. 190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/borough-of-east-rutherford-v-east-rutherford-pba-local-275-nj-2013.