H.E. NO. 80-6

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

RUTGERS, THE STATE UNIVERSITY,

Respondent,

-and-	Docket No. CO-79-137-61

RUTGERS UNIVERSITY COLLEGE

TEACHERS ASSOCIATION,

Charging Party.

Appearances:

For Rutgers, The State University

Pitner, Hardin & Kipp, Esqs.

(Bruce P. McMoran, Esq.)

For Rutgers University College Teachers Association,

(Joseph Fisch, Esq.)

HEARING EXAMINER'S RECOMMENDED

REPORT AND DECISION

An Unfair Practice Charge was filed with the Public Employment Relations Commission (hereinafter the "Commission") on December 6, 1978 by Rutgers University College Teachers Association (hereinafter the "Charging Party" or the "Association") alleging that Rutgers, the State University (hereinafter "Rutgers" or the "Respondent"), has engaged in unfair practices within the meaning of the New Jersey Employer-
Employee Relations Act, as amended, N.J.S.A. 34:13A-1 et seq. (hereinafter the "Act"), in that Rutgers unilaterally withheld the payment of the annual increments due to the Co-Adjutant faculty for the 1978-79 academic year without negotiations with the Association and contrary to an agreement of March 26, 1973 to pay such increments, all of which is alleged to be a violation of N.J.S.A. 34:13A-5.4(a)(5) of the Act.1/

It appearing that the allegations of the Unfair Practice Charge, if true, may constitute unfair practices within the meaning of the Act, a Complaint and Notice of Hearing was issued on March 6, 1979. Pursuant to a Complaint and Notice of Hearing, a hearing was held on May 8, 1979 in Newark, New Jersey, at which time the parties were given an opportunity to examine witnesses, present relevant evidence and argue orally. Both parties argued orally and filed post-hearing briefs by July 6; the Association only filed a reply by July 20, 1979.

An Unfair Practice Charge having been filed with the Commission, a question concerning alleged violation of the Act, as amended, exists and after hearing, and after consideration of the oral argument and post-hearing briefs of the parties, the matter is appropriately before the Commission by its designated Hearing Examiner for determination.

Upon the entire record, the Hearing Examiner makes the following:

FINDING OF FACTS

1. Rutgers, The State University, is a public employer within the meaning of the Act, as amended, and is subject to its provisions.

2. The Rutgers University College Teachers Association is a public employee representative within the meaning of the Act, as amended, and is subject to its provisions.

3. After extended discussions over several years between representatives of the Association and top-level representatives of Rutgers, John R. Martin, Vice President for University Personnel, sent a letter dated March 26, 1973 to Dr. David Frost,2/ setting forth the provisions of a "joint plan" pertaining to Co-Adjutant faculty at University College of Rutgers(CP-1).3/ This joint plan provided for the academic ranking of Co-Adjutant faculty and their placement on a salary guide, following which a formula was set forth for the calculation of annual increments.4/ The joint plan also provided for lump sum retroactive salary adjustments, based upon the aforesaid formula, to September 1, 1972 (see CP-1 paragraphs 4 and 6).

4. Dr. James B. Coe, the Associate Dean at University College, has been involved in the administration of salaries for Co-Adjutant faculty since 1969 (Tr. 39).

5. Rutgers introduced through Dr. Coe Exhibit R-1, A-P, which sets forth the annual salaries paid to Co-Adjutant faculty and full-time faculty, represented by the AAUP, for the academic years 1972-72 through 1978-79, as well as the annual salaries for non-academic personnel for the fiscal years 1977-78 and 1978-
79.5/ The annual salaries for Co-Adjutant faculty are consistently set forth in Exhibit R-1 as being based on "per credit" taught6/ while the salaries for full-time faculty and non-academic personnel are set forth based on gross annual salary. In Exhibit R-1 the annual salaries for all personnel involved are set forth vertically by range (or grade) and horizontally by steps within range. Finally, Exhibit R-1 indicates that, for all personnel involved, there are at least seven steps followed by a "maximum" within each range.

6. Rutgers also introduced through Dr. Coe Exhibit R-2, A-G which, subject to explanations that will follow, sets forth the annual increments paid to Co-Adjutant faculty and full-time faculty represented by the AAUP for the academic years 1972-73 through 1978-79,7/ as well as the annual increments paid to non-
academic personnel for the fiscal years 1976-77 through 1978-
79.8/

7. Exhibit R-2, A-C supra, indicates clearly that during the academic years 1972-73 through 1974-75 annual increments were paid to Co-Adjutant faculty based upon the formula of March 26, 1973 (CP-1, supra),9/ and this was confirmed by Dr. Coe (Tr. 63-
65). Mr. Martin, Vice President of University Personnel, supra, also confirmed the foregoing (Tr.86).10/

8. In the 1975-76 academic year Co-Adjutant faculty members, for budgetary reasons, were not paid the annual increment commencing in September of the academic year, as in the past, but rather received a lump sum payment equivalent to the annual increment in June (R-2D; Tr. 59, 65, 66). Dr. Coe and Mr Martin confirmed that the said lump sum payment was consistent with the formula contained in the 1973 letter. (CP-1), except that Co-Adjutant faculty did not move a step within range (Tr. 65, 66, 87).11/ Full-time faculty (AAUP) also received an annual increment for the 1975-76 academic year in a lump sum, which was retroactively paid on June 25, 1976 (R-2D, Tr. 59).

9. In the 1976-77 academic year Co-Adjutant faculty were paid the annual increment in accordance with the formula contained in the 1973 joint plan (CP-1) and full-time faculty also received an annual increment (R-2E: Tr. 60, 66, 67, 87).

10. In the 1977-78 academic year Rutgers was at impasse in its negotiations with the AAUP and, as a result, the annual increment paid the Co-Adjutant faculty was for that year only based upon the increment paid to non-academic personnel, the only difference being that Co-Adjutant faculty received larger payments in the higher ranges (R-2F; Tr. 60, 61, 69, 71-74). Mr. Martin confirmed that "in general" the 1973 "formula" had been applied (Tr. 87). Full-time faculty were paid the annual increment retroactively on May 12, 1978 after a collective negotiations agreement was reached in April (R-2F, p. 2).

11. As previously noted, no annual increment was paid to Co-Adjutant faculty for the academic year 1978-79 12/ and this was on the advise of Mr. Martin (Tr. 74). Full-time faculty received an annual increment for the 1978-79 academic year (R-2G).

12. In view of the facts found in Findings of Fact Nos. 7-
10, supra, wherein the application of the March 26, 1973 formula (CP-1) to Co-Adjutant faculty for the academic years 1972-78 was confirmed by Dr. Coe and Mr. Martin,13/ the Hearing Examiner refuses to credit Mr. Martin's testimony on direct examination that there was a decision made by Rutgers each academic year regarding the payment of annual increments to Co-Adjutant faculty, based upon budgetary and market considerations (Tr. 80-
82, see also, Dr. Coe; Tr. 61, 62). This direct testimony of Mr. Martin is contradicted by his cross-examination (Tr. 86, 86) and purports to modify unilaterally the terms of the 1973 joint plan (CP-1 and Finding of Fact No. 3, supra).

13. Negotiations for a first collective agreement between the parties commenced in May 1978 (Tr. 8, 33)14/and the negotiations had not been concluded as of the date of the hearing herein, May 8, 1979.

14. When Rutgers failed to pay Co-Adjutant faculty in September 1978 an annual increment for the 1978-79 academic year "pending completion of negotiations" (R-2G), a demand by the Association for payment followed on November 13, 1978 (CP-2). The instant charge of unfair practices was filed on December 6, 1878 (C-1).

THE ISSUE

Did Rutgers violate Subsection (a)(5) of the Act when, during the pendency of collective negotiations for a first agreement, it refused to pay Co-Adjutant faculty an annual increment for the academic year 1978-79? If so, what shall the remedy be?

DISCUSSION AND ANALYSIS

The Positions of The Parties

The Charging Party, in urging that Rutgers has violated the Act by "an intentional change in the status quo" (brief, p.4), relies upon the decision of the New Jersey Supreme Court in Galloway Township Board of Education v. Galloway Township Education Association, 78 N.J. 25 (1978), and Hudson County Board of Chosen Freeholders and Hudson County PBA, Local 51, P.E.R.C. No. 78-48, 4 NJPER 87 (1978), aff'd per curiam, ___ N.J. Super ___(App. Div., Docket No. A-2444-77, April 10, 1979). The Charging Party notes that a "practice need not be incorporated in an agreement to have become a term and condition of employment" for the affected employees, citing Hudson County, supra, (Charging Party's brief, p. 5). By way of remedy, the Charging Party seeks, inter alia, an Order directing that Rutgers negotiate in good faith, upon request, concerning an increment for Co-Adjutant faculty and, further, that Rutgers be directed to pay an increment to Co-Adjutant faculty for the 1978-79 academic year, in accordance with past practice, retroactive to September 1, 1978 with interest form that date (Charging Party's brief, p.8).

Rutgers contends that the Association has failed to prove that Rutgers unilaterally altered the terms and conditions of employment of Co-Adjutant faculty, i.e., the Association has not proven "that the increment plan of Rutgers was automatic" (Rutgers' brief pp. 6-9).15/ Rutgers contends that Galloway, supra, does not apply since that decision was concerned with the payment of increments during the pendency of negotiation for a successor agreement where the Galloway Township Board of Education, having agreed to pay increments, was governed by N.J.S.A. 18A:29-4.1, which statutory provision, Rutgers point out, does not apply to it (Rutgers' brief, pp. 13, 14). Rutgers also cites Piscataway Township Board of Education, P.E.R.C. No. 91, 1 NJPER 49 (1975), appeal dismissed as moot (App. Div., Docket No. A-8-75), pet. for certif. den., 70 N.J. 150 (1976), which holds that a public employer may not alter the status quo while involved in collective negotiations. But then Rutgers contends that if it had paid Co-Adjutant faculty a salary increase in the form of an increment during the pendency of collective negotiations it would not be maintaining the status quo within the meaning of Piscataway, supra, (Rutgers' brief, pp.10, 11). Rutgers next cites three cases from other jurisdictions in support of its position that it would be altering the status quo if an increase was paid to Co-Adjutant faculty during negotiations (Rutgers' brief, pp 14, 15).16/ Finally, Rutgers discusses the proper interpretation of N.L.R.B. v. Katz, 369 U.S. 736, 50 LRRM 2176 (1962), a case relied upon by the New Jersey Supreme Court in Galloway, supra (Rutgers' brief pp. 16, 17).

The Charging Party's reply relies essentially on its initial brief, supra, and makes only some additional references to the evidence adduced at the hearing with comments on Rutgers' legal arguments, supra, which need not be dealt with further at this point.

Rutgers Violated Subsection (a)(5) of The Act

When, During The Pendency of Negotiations For

a First Collective Agreement, it Unilaterally

Failed to Pay to Co-Adjutant Faculty an Increment

For The 1978-79 Academic Year

The resolution of the stated issue in this case turns on what constituted the status quo when the parties commenced negotiations for a first collective agreement in May 1978. In resolving this issue the Hearing Examiner is aware of the uniqueness of the instant case in that the Association was not certified as the majority representative for Co-Adjutant faculty at the time that Mr. Martin wrote to Dr. Frost on March 26, 1973 (CP-1).17/

Although Rutgers in its brief (pp.6,7) observes that there was no collective agreement between the parties in 1973, and that the Association was not in fact certified until December 7, 1976, the Hearing Examiner is of the opinion that he can resort freely to the decisions of the Commission and the Courts, involving factual situations where there existed a prior collective negotiations history, in determining what was the status quo in the instant negotiations for a first collective negotiations agreement.

First, in Piscataway, supra, a case involving the unilateral discontinuance by the employer during negotiations for a successor agreement of hospitalization and medical coverage, the Commission first adopted the view "...that an employer is normally precluded from altering the status quo while engaged in collective negotiations, and that such an alteration constitutes an unlawful refusal to negotiate..." (1 NJPER at 50).

Next, the Commission in Galloway Township Board of Education, P.E.R.C. No. 76-32, 2 NJPER 186 (1976)18/ cited Piscataway in concluding that the employer's "...unilateral determination...not to pay any increments was...an alteration of the status quo..." (2 NJPER at 186). The Commission stated that it was attempting:

"... to maintain 'those terms and conditions of employment in effect' regardless of whether those terms are derived from a contract or some other source. The status quo represents that situation which affords the least likelihood of disruption during the course of negotiations for the new contract. Because the status quo is predictable and constitutes the terms and conditions under which the parties have been operating, it presents an environment least likely to favor either party." (2 NJPER at 186, 187) (Emphasis supplied).

In Hudson County, supra, the Commission, citing its Piscataway and Galloway decisions, supra, adopted the Hearing Examiner's finding that an established practice of paying increments to employees who qualify during the term of a prior agreement:

"...constituted a term and condition of employment under which the parties have been operating and, therefore, was an element of the status quo... The Board's unilateral decision not to pay these increments was a negation of this benefit. Accordingly, there was an alteration of the ... status quo. The policemen were no longer being paid pursuant to the existing established practice." (4 NJPER at 90) (Emphasis supplied). 19/

As previously noted, the New Jersey Supreme Court in Galloway, supra, relied heavily upon the NLRB v. Katz, supra, in affirming the Commission. See 78 N.J. at 48-50. The Court stated that under Katz an employer's unilateral alteration of the prevailing terms and conditions of employment during collective bargaining constitutes an unlawful refusal to bargain since such unilateral action is a circumvention of the statutory duty. Continuing, the Court is Galloway said:

"...The basis of the rule prohibiting unilateral changes by an employer during negotiations is the recognition of the importance of maintaining the then-prevailing terms and conditions of employment during this delicate period until new terms and conditions are arrived at by agreement. Unilateral changes disruptive of this status quo are unlawful because they frustrate the "statutory objective of establishing working conditions through bargaining.' NLRB v. Katz, supra..." (78 N.J. at 48) (Emphasis supplied).

The Court in Galloway next observed that the Legislature incorporated a rule similar to Katz in Section 5.3 of the Act20/ and went on to say that if "...a scheduled annual step increment in an employee's salary in an 'existing rule() governing working conditions,' the ...denial of that increment would constitute a modification thereof "without the negotiations mandated by Section 5.3, supra, and would thus violate Subsection (a)(5) of the Act. (78 N.J. at 49).

Referring again to Katz, the Court in Galloway proceeded to inquire as to whether or not the annual step increments in that case were "... 'automatic,' in which case their expected receipt would be considered as part of the status quo, or 'discretionary,' in which case the grant or denial of the salary increases would be a matter to be resolved in negotiations." (78 N.J. at 49) (Emphasis supplied). The Court then said that under the rationale of Katz the employer would violate the Act if it granted discretionary increments but would not violate the Act if granted automatic increments.

In upholding the Commission's finding of a violation of Subsection (a)(5) of the Act the Court in Galloway concluded that the payment of the teachers' annual salary increments was "automatic" and that, therefore, the Board by unilaterally withholding payment of the next scheduled increment unlawfully changed the status quo.21/

Findings of Fact 7-10, 12 supra, compel the conclusion that the annual increments paid by Rutgers to Co-Adjutant faculty from 1972 through the academic year ending 1978 were "automatic" and essentially followed the "formula" set forth in the 1973 "joint plan" or agreement (CP-1)22/ Thus, qualifying Co-Adjutant faculty could reasonably expect payment of an annual increment in September of the 1978-79 academic year and this would be consistent with the maintenance of the status quo during negotiations under the Court's analysis in Galloway, supra. As noted previously, Galloway was decided on August 1, 1978, prior to the commencement of the 1978-79 academic year, and Mr. Martin plainly erred when payment of the increment was not made on his advice.

Irrespective of whether or not CP-1 is considered an "agreement," binding upon the parties by its terms, there can be no dispute but that a six year practice has existed whereby a term and condition of employment for qualified Co-Adjutant faculty has been the payment of an annual increment during the academic year. 23/

It is of no moment that, in the 1977-78 academic year, when Rutgers was at an impasse in its negotiations with full-time faculty represented by the AAUP, the annual increment was based upon the increment paid to non-academic personnel. Mr. Martin confirmed that "in general" the 1973 "formula" had been applied. It is further noted that full-time faculty were paid their annual increments that year retroactively on May 12, 1978. See Finding of Fact No. 10, supra.

Further, Rutgers', contention that Galloway does not apply to it by reason of the non-applicability to Rutgers of N.J.S.A. 18A-29-4.1 is rejected for the reason that the Katz rationale used by the Supreme Court in Galloway strikes the Hearing Examiner as having a broad application.

Finally, the Appellate Division on April 10, 1979 in Hudson County, supra, affirmed the Commission's Order to pay increments in a case that did not involve title 18A, the Education law. The employer's refusal there to pay the increments, under the circumstances of an established practice, was deemed an alteration of the status quo and the Commission was affirmed in its Order that the employer cease and desist from unilaterally altering terms and conditions of employment during the course of collective negotiations, which had been found to be a violation of Subsection (a)(5) of the Act.

In view of pertinent New Jersey Authority, the Hearing Examiner elects not to consider the three cases cited by Rutgers from other jurisdictions.24/ In so deciding, the Hearing Examiner is aware that the Rockland County case was distinguished by the New Jersey Supreme Court in Galloway (78 N.J. at 52, footnote 12). It is the Hearing Examiner's view that the Appellate Division decision in Hudson County, supra, is on point and binding upon him.

Although the Hearing Examiner has concluded that Rutgers violated Subsection (a)(5) of the Act by unilaterally altering the status quo during negotiations for a first collective agreement by not paying an increment for the 1978-79 academic year, and will recommend an appropriate remedy, the Hearing Examiner will not, as requested by the Charging Party, include an award of interest. The Hearing Examiner notes that the Commission has considered and declined a request to award interest in Salem County Board of Vocational Education, P.E.R.C. No. 79-99, 5 NJPER 239, 241 (1979), a case involving a Subsection (a)(3)25/ discriminatory discharge of a teacher.26/

There having been no Subsection (a)(1) violation of the Act27/ alleged by the Association in the charge of unfair practices (CP-1), no recommendation will be made in connection therewith.

*	*	*	*	*

Upon the foregoing, and upon the entire record in this case, the Hearing Examiner makes the following:

CONCLUSIONS OF LAW

The Respondent Rutgers violated N.J.S.A. 34:13A-5.4(a)(5) when, during the pendency of negotiations for a first collective agreement, it unilaterally failed to pay to Co-Adjutant faculty at University College an increment for the 1978-79 academic year.

RECOMMENDED ORDER

The Hearing Examiner recommends that the Commission ORDER:

A. That the Respondent Rutgers cease and desist from:

1. Refusing to negotiate in good faith with the Association, as the majority representative of Co-Adjutant faculty at University College, by unilaterally altering the terms and conditions of their employment during the course of collective negotiations for a first agreement.

B. That the Respondent Rutgers take the following affirmative action:

1. Forthwith, make payment of the annual increment for the 1978-79 academic year to all qualifying Co-
Adjutant faculty at University College, represented by the Association, based upon the formula contained in the March 26, 1973 joint plan or agreement (CP-1), and continue to make such payment during succeeding academic years unless and until said joint plan of agreement for the payment of annual increments is discontinued or modified by the parties in collective negotiations.

2. Preserve, and upon request, make available to the Commission for examination all relevant payroll records for Co-Adjutant faculty at University College necessary to determine the proper payment of annual increments as ordered herein.

3. Post in all places where notices to employers are customarily posted, copies of the attached notice marked Appendix "A". Copies of such notice, on forms provided by the Commission, shall be posted by the Respondent Rutgers immediately upon receipt thereof, after being signed by the Respondent's representative, and shall be maintained by it for a period of at least sixty (60) consecutive days thereafter. Reasonable steps shall be taken by the Respondent Rutgers to insure that such notices are not altered, defaced or covered by other material.

4. Notify the Director of Unfair Practices within twenty (20) days of receipt what steps the Respondent Rutgers has taken to comply herewith.

____________________

Alan R. Howe

Hearing Examiner

DATED: August 31, 1979

Trenton, New Jersey