CITY OF ORANGE FIRE OFFICERS ASSOCIATION FMBA LOCAL 210 VS. CITY OF ORANGE TOWNSHIP (C-000018-17, ESSEX COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: April 25, 2019
• Docket: A-0091-18T2
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-0091-18T2

CITY OF ORANGE FIRE OFFICERS ASSOCIATION FMBA LOCAL 210,

Plaintiff-Respondent,

v.

CITY OF ORANGE TOWNSHIP,

Defendant-Appellant.

Submitted February 26, 2019 – Decided April 25, 2019

Before Judges Gilson and Natali.

On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. C-000018-17.

Scarinci & Hollenbeck, LLC, attorneys for appellant (Ramon E. Rivera, of counsel; Krystle Nova, John J.D. Burke, and Ramon E. Rivera, on the briefs).

Feeley & LaRocca, LLC, and The Blanco Law Firm, LLC, attorneys for respondent (Pablo N. Blanco, of counsel and on the brief; John D. Feeley, on the brief).

PER CURIAM This appeal arises out of an action to enforce an arbitration award

concerning the terms of successor collective negotiation agreements between the

City of Orange Township (City) and the City of Orange Fire Officers

Association FMBA Local 210 (FOA). The City appeals from a July 25, 2018

order issued by the Chancery Division, which confirmed the arbitration award

and directed the City to comply with the award. In making that ruling, the

Chancery court refused to address the City's counterclaims that the award was

defective and should be vacated. Instead, the court ruled that because the City

had failed to appeal the award to the Public Employment Relations Commission

(Commission) as required by the governing statute, N.J.S.A. 34:13A-16(f)(5)(a),

the court did not have the authority to address the City's counterclaim. We agree

and affirm.

I.

The arbitration award at issue in this case is the product of compulsory

interest arbitration pursuant to the Police and Fire Public Interest Arbitration

Reform Act (the Arbitration Reform Act), N.J.S.A. 34:13A-14a to -21. Interest

arbitration "involves the submission of a dispute concerning the terms of a new

contract to an arbitrator, who selects those terms and thus in effect writes the

parties' collective agreement[.]" N.J. State P.B.A., Local 29 v. Town of

A-0091-18T2 2 Irvington, 80 N.J. 271, 284 (1979). "[C]ompulsory interest arbitration is a

statutory method of resolving collective-negotiation disputes between police

and fire departments and their employers." Hillsdale PBA Local 207 v. Borough

of Hillsdale, 137 N.J. 71, 80 (1994).

The underlying disputes have existed for a number of years and have

engendered an initial arbitration award issued in July 2016, an appeal to the

Commission, a decision by the Commission issued in September 2016, a remand

to the arbitrator, and the arbitrator's decision following the remand issued in

January 2017. The core disputes concern the terms and conditions of

employment, particularly salaries, for certain public-safety employees of the

City.

The initial request for arbitration was filed by the PBA Local 89 (PBA),

representing the City's police officers. Two other employee units thereafter

joined that arbitration. Those units are FMBA Local 10 (FMBA), representing

the rank and file firefighters of the City, and the FOA, representing the City's

fire officers.

On July 7, 2016, the arbitrator issued a written award setting terms of

successor collective negotiation agreements for all three units of employees. On

July 20, 2016, the City appealed that arbitration award to the Commission. In

A-0091-18T2 3 its appeal to the Commission, the City argued that the arbitrator failed to

properly address the financial impact of the award, including failing to properly

consider a two percent statutory cap established in N.J.S.A. 34:13A-16.7(b).

The City also argued that the arbitrator failed to properly address other statutory

factors under N.J.S.A. 34:13A-16(g).

On September 8, 2016, the Commission issued its decision on the City's

appeal. The Commission rejected the City's arguments regarding the two

percent cap. The Commission did, however, remand the matter to the arbitrator

and directed the arbitrator to explain and clarify the award as it related to certain

factors identified in N.J.S.A. 34:13A-16(g).

Thereafter, the City resolved its disputes with the PBA and FMBA.

Accordingly, on remand, the arbitrator only had to clarify his award with regard

to the members of the FOA.

On January 3, 2017, the arbitrator issued his decision following the

remand. That decision was mailed to the City and FOA by overnight delivery

on January 4, 2017. Thus, the arbitration decision was received by the parties

on January 5, 2017. Together with the arbitration decision on remand, the

parties were given written notice reminding them that if they wanted to appeal

A-0091-18T2 4 the arbitration award, any appeal had to be filed within fourteen days. The

fourteen days to appeal expired on January 19, 2017.

The City did not file an appeal with the Commission. Instead, on January

26, 2017, the FOA filed a verified complaint and order to show cause in the

Chancery Division seeking to enforce the arbitration award. In its complaint,

the FOA verified that it had been informed by the City that the City would not

be filing an appeal of the arbitration award. Consequently, the FOA sought to

have the Chancery Division confirm and enforce the arbitration award.

Approximately eleven months later, on December 28, 2017, the City filed

an answer, affirmative defenses, and counterclaims. In its counterclaims, the

City sought to vacate both the initial arbitration award, issued on July 7, 2016,

and the award following the remand, issued on January 3, 2017. The City

contended that the arbitrator failed to adequately consider all of the factors under

N.J.S.A. 34:13A-16(g), and improperly expanded the scope of the remand.

After reviewing briefs filed by the parties, the Chancery court held

telephone conferences with counsel on July 16 and July 25, 2018, and heard oral

argument on the enforcement of the arbitration award. The court ruled that the

City had waived its right to appeal the arbitration award by not filing an appeal

with the Commission. Thus, the court ruled that it could only enforce the

A-0091-18T2 5 arbitration award in accordance with N.J.S.A. 34:13A-19, and it could not

consider the City's substantive arguments alleging that the award was defect ive

and should be vacated. On July 25, 2018, the court entered an order (1)

confirming the arbitration award, (2) directing the City to comply with the

arbitration award, and (3) ordering the City to make retroactive payments to all

FOA members within sixty days.

II.

The City now appeals from the July 25, 2018 order. It argues that the

Chancery court obtained jurisdiction over the matter when the FOA filed its

verified complaint seeking to enforce the arbitration award. The City then

argues that the arbitrator failed to adequately consider all of the statutory factors

under N.J.S.A. 34:13A-16(g) and, therefore, the awards were procured by undue

means and the arbitrator exceeded or imperfectly executed his powers. The City

also argues that the arbitrator improperly expanded the scope of the remand

order from the Commission and, as a consequence, the arbitrator imperfectly

executed his powers and the remand award should be vacated.

We will only address the issue of the authority of the court to enforce the

arbitration award because a plain reading of the governing statute establishes

that the City waived its right to appeal the substance of the arbitration award.

A-0091-18T2 6 The issue concerning the scope of the enforcement action involves the

interpretation of a statute. Accordingly, our review of that issue is de novo.

State ex rel. K.O., 217 N.J. 83, 91 (2014) (citing McGovern v. Rutgers, 211 N.J.

94, 107-08 (2012)).

The procedures for resolving disputes concerning the terms and conditions

of employment between a public fire or police department and the union

representing the fire or police officers are governed by statute. N.J.S.A.

34:13A-16. See also Hillsdale PBA Local 207, 137 N.J. at 80. The New Jersey

Employer-Employee Relations Act (the Relations Act), N.J.S.A. 34:13A-1

to -43, includes a compulsory interest arbitration procedure for fire departments

and representatives of fire officers that reach an impasse in collective

negotiations. N.J.S.A. 34:13A-16(b)(2). The procedures for such interest

arbitration, including any appeal of an arbitration award, are set forth in the

Arbitration Reform Act, N.J.S.A. 34:13A-14a to -21, which is part of the

Relations Act.

To initiate interest arbitration, the public entity or employee

representative can petition the Commission. N.J.S.A. 34:13A-16(b)(2). An

arbitrator is then selected and the disputes are submitted to "binding arbitration."

N.J.S.A. 34:13A-16(d). The arbitrator must issue a decision within a prescribed

A-0091-18T2 7 time. N.J.S.A. 34:13A-16(f)(5). The arbitrator's decision, moreover, must

include an award and "shall be accompanied by a written report explaining how

each of the statutory criteria played into the arbitrator's determination of the

final award. The report shall certify that the arbitrator took the statutory

limitations imposed on the local levy cap into account in making the award."

Ibid.

Any party to the arbitration can appeal the interest arbitration award to the

Commission. A final decision by the Commission, in turn, can be appealed to

this court. N.J.S.A. 34:13A-16(f)(5)(a). In that regard, the Arbitration Reform

Act states:

The [arbitration] decision shall be final and binding upon the parties and shall be irreversible, except: (a) [w]ithin 14 calendar days of receiving an award, an aggrieved party may file notice of an appeal of an award to the commission on the grounds that the arbitrator failed to apply the criteria specified in subsection g. of this section or violated the standards set forth in N.J.S.[A.] 2A:24-8 or N.J.S.[A.] 2A:24-9. . . .

....

An aggrieved party may appeal a decision of the commission to the Appellate Division of the Superior Court.

[N.J.S.A. 34:13A-16(f)(5).]

A-0091-18T2 8 The Arbitration Reform Act also states that "an arbitrator's award shall be

implemented immediately." N.J.S.A. 34:13A-16(f)(5)(b). To ensure

compliance, the Arbitration Reform Act includes an enforcement provision,

which states: "The decision of the arbitrator may be enforced at the instance of

either party in the Superior Court with venue laid in the county in which the

dispute arose." N.J.S.A. 34:13A-19.

In summary, the plain language of the Arbitration Reform Act states that

an appeal of an interest arbitration award must be taken to the Commission and

that the decision by the Commission, in turn, can be appealed to us. See N.J.S.A.

34:13A-16(f)(5)(a). There is no right to appeal to the Law or Chancery Division.

Instead, the only right in the Law or Chancery Division is to "enforce[]" the

arbitration award. N.J.S.A. 34:13A-19. Cf. In re City of Camden, 429 N.J.

Super. 309, 327 (App. Div. 2013) (explaining that appeals are taken to the

Commission). In enforcing the arbitration award, courts may clarify a term of

the award. See Paterson Police PBA Local 1 v. City of Paterson, 433 N.J. Super.

416, 425 (App. Div. 2013). In contrast, the power to "affirm, modify, correct or

vacate the award" or to "remand the award" is vested with the Commission.

N.J.S.A. 34:13A-16(f)(5)(a).

A-0091-18T2 9 Here, the Chancery court correctly applied the plain language of the

Arbitration Reform Act. The City had not appealed the January 3, 2017

arbitration award to the Commission. After the fourteen-day time for such an

appeal expired, the FOA filed an action in the Chancery Division to enforce the

award. Accordingly, the Chancery court had no authority to modify or vacate

the arbitration award; rather, it correctly ruled it was limited to enforcing the

award.

The City argues that when the FOA filed its action in the Superior Court,

the court obtained jurisdiction and the court could then consider the City's

counterclaims challenging the arbitration award. There are two flaws with that

argument.

First, the time to appeal had expired and, thus, the City's counterclaims

were already time-barred when the FOA filed the action in the Superior Court.

The January 3, 2017 arbitration award was received by the City on January 5,

2017. The City had fourteen days to appeal. Those fourteen days expired on

January 19, 2017. Consequently, the City had no right to appeal when the FOA

filed its enforcement action on January 26, 2017.

Second, as already detailed, an appeal of the interest arbitration award had

to be first taken to the Commission. Because the City never filed any appeal

A-0091-18T2 10 with the Commission, it had no rights to seek to modify or vacate the arbitration

In contending that the Chancery Division obtained jurisdiction to hear its

appeal, the City cites two cases: Harris v. Security Insurance Group, 140 N.J.

Super. 10 (App. Div. 1976) and Township of Aberdeen v. Patrolmen's

Benevolent Association, Local 163, 286 N.J. Super. 372 (App. Div. 1996).

Neither of those cases applies to the arbitration at issue in this case.

Harris discussed N.J.S.A. 2A:24-7, a statutory provision that, since 2003,

applies "only . . . to an arbitration or dispute arising from a collective bargaining

agreement or a collectively negotiated agreement." N.J.S.A. 2A:24-1.1. Thus,

if parties to a collective bargaining agreement provide for arbitration of disputes

arising from the agreement itself, N.J.S.A. 2A:24-7 governs the procedure by

which an arbitration award can be confirmed, vacated, or modified.

Here, the parties were involved in statutorily-mandated interest

arbitration, which is a process by which an arbitrator "effect[ively] writes the

parties' collective agreement." Hillsdale PBA Local 207 v. Borough of

Hillsdale, 263 N.J. Super. 163, 179 (App. Div. 1993) (quoting N.J. State

Policemen's Benevolent Ass'n, Local 29, 80 N.J. at 284), aff'd in part, rev'd in

part, 137 N.J. 71 (1994). Unlike other forms of arbitration involving voluntary

A-0091-18T2 11 resolution of disputes under an existing contract, "compulsory interest

arbitration does not depend on either the existence of a contract or on the

agreement of the parties to proceed to arbitration. It is a statutorily-mandated

procedure for resolving the terms of a new contract." Hillsdale PBA Local 207,

137 N.J. at 80 (citation omitted) (citing N.J. State Policemen's Benevolent Ass'n,

Local 29, 80 N.J. at 284). Accordingly, N.J.S.A. 2A:24-7 does not apply to

public fire and police department interest arbitration under the Arbitration

Reform Act. Cf. N.J.S.A. 34:13A-16.

The Aberdeen court did not rule on a procedural issue, but noted that upon

receiving the interest arbitration award, the township in that case "filed a

complaint in the Chancery Division seeking an order vacating the award, and

the union counterclaimed." 286 N.J. Super. at 376. That complaint was filed in

accordance with the procedure in place at that time, prior to the effective date

of the Arbitration Reform Act. See L. 1977, c. 85, § 3(f)(5) (stating that an

arbitration award is final, binding, and irreversible "except where there is

submitted to the court extrinsic evidence upon which the court may vacate,

modify or correct such award pursuant to N.J.S. 2A:24-7 et seq. or for failure to

apply the factors specified in subsection g. below"). The Arbitration Reform

Act was an amendment to the Relations Act that became effective on January

A-0091-18T2 12 10, 1996. See L. 1995, c. 425. That amendment established the relevant

provision at issue in this case: that appeals of interest arbitration awards must

be taken to the Commission, and appeals from the Commission will be heard in

the Appellate Division. See id. at § 3(f)(5)(a); N.J.S.A. 34:13A-16(f)(5)(a).

Affirmed.

A-0091-18T2 13