H.E. NO. 98-20

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

EAST HANOVER BOARD OF EDUCATION,

Respondent,

-and-	Docket No. CO-H-98-42

EAST HANOVER EDUCATION ASSOCIATION,

Charging Party.

Appearances:

For the Respondent,

Schwartz, Simon, Edelstein, Celso & Kessler, attorneys

(Joseph R. Morano, of counsel)

For the Charging Party,

Bucceri & Pincus, attorneys

(Sheldon Pincus, of counsel

Linda Ganz Ott, on the brief)

HEARING EXAMINER'S REPORT

AND RECOMMENDED DECISION

On August 4, 1997, the East Hanover Education Association filed an unfair practice charge with the Public Employment Relations Commission alleging that the Board of Education of the Township of East Hanover committed an unfair practice within the meaning the New Jersey Employer-Employee Relations Act; specifically, N.J.S.A. 34:13A-5.4a(1) and (5)1/ when after the

1/	These provisions prohibit public employers, their representatives or agents from: "(1) Interfering with,

Footnote Continued on Next Page

collective negotiations agreement between the parties expired on June 30, 1997, the Board refused to pay annual incremental salary increases to non-certificated personnel in the negotiations unit.2/

A Complaint and Notice of Hearing issued on the unfair practice charge on September 24, 1997.

The parties waived a hearing and on November 20, 1997 entered into stipulation.3/

The stipulation, in pertinent part, provides:

1.	Charging Party, East Hanover Education Association (hereinafter "the Association") is an employee representative within the meaning of N.J.S.A. 34:13A-1 et seq.

2.	Respondent, East Hanover Board of Education (hereinafter "the Board") is a public employer within the meaning of N.J.S.A. 34:13A-1 et seq.

3.	The Association is the exclusive majority representative for collective negotiations concerning terms and conditions of

1/	Footnote Continued From Previous Page

restraining or coercing employees in the exercise of the rights guaranteed to them by this act. (5) Refusing to negotiate in good faith with a majority representative of employees in an appropriate unit concerning terms and conditions of employment of employees in that unit, or refusing to process grievances presented by the majority representative."

2/	The Association also filed an application for interim relief and after a hearing on this matter, an Interim Relief Order was executed by the undersigned as Commission Designee.

3/	Both parties submitted briefs and reply briefs which were received by December 30, 1997.

employment of a unit comprised of the following full and part-time employees (those employed 20 or more hours per week):

a)	Teachers

b)	Basic Skills Instructors

c)	Special Teachers

d)	Nurses

e)	Librarians

f)	Social Workers

g)	School Psychologist

h)	Secretaries

i)	Bookkeepers-Receptionist

j)	Clerk-Typists

k)	Maintenance

l)	Custodians

m)	Groundsmen

All other Board employees are excluded from the Association's representation and include:

a)	Supervisor of Buildings and Grounds

b)	Principals

c)	Assistant Principals

d)	Secretary to the Board Secretary

e)	Teacher Aides

f)	Executive Secretary to Superintendent

g)	Bus Drivers

h)	Administration Secretary

i)	Transportation Coordinator

j)	Cafeteria Personnel

4.	The bargaining unit consists of 118 total members. Specifically, there are 97 certificated staff members and 21 non-certificated members (80 secretary, clerk-typists and 13 custodial-maintenance employees).

5.	The certificated teaching staff unit members are employed on a ten (10) month basis. The non-certificated staff unit members are employed on both ten (10) and twelve (12) month bases.

6.	The term of employment for a twelve (12) month employee runs from July 1 to June 30. The term of employment for a ten (10) month employee runs from September 1 to June 30.

7.	The Association and the Board were parties to a collective negotiations agreement for the period July 1, 1994-June 30, 1997. This collective negotiations agreement sets forth the negotiated terms and conditions of employment of the aforesaid certificated and non-certificated staff members.

8.	Negotiations for a successor collective negotiations agreement commenced on April 10, 1997. Additional sessions took place on May 15, 1997, June 5, 1997, August 6, 1997 and August 28, 1997.

9.	Negotiations for the non-certificated unit members and certificated teaching staff members have been conducted jointly with the Board. Both groups are represented by the Association's negotiating team at each negotiation session and jointly negotiate with the Board. There have been proposals advanced by the Association on behalf of its members. Some of the proposals pertained solely to the certificated members. Some of the proposals pertained solely to the non-certificated members. Some of the proposals pertained to both the certificated and non-certificated members.

10.	The 1994-97 collective negotiations agreement contains separate salary guides for teachers, secretaries and custodian/maintenance employees. The 1994-95, 1995-96 and 1996-97 teacher salary guides are set forth as Schedule A of the Agreement. The 1994-95, 1995-96 and 1996-97 secretary salary guides are set forth as Schedule B of the Agreement. The 1994-95, 1995-96 and 1996-97 custodian/maintenance salary guides are set forth as Schedule C of the Agreement.

11.	The payment of increments to unit members is tied to years of service within the district. Each year, a unit member moves one (1) step up on the applicable salary guide (e.g., Step 1 to Step 2). The salary level applicable to that step is further changed to reflect the negotiated adjustment to that step's value from one year's salary guide to the next (e.g., Step 2 on the 1994-95 guide to Step 2 on the 1995-96 guide). An individual unit member may further

have his/her salary further adjusted in the event they qualify for longevity. Longevity payments are also based upon years of service within the district.

12.	Prior to July 1, 1997, the payment of increments to unit members had been made pursuant to the process outlined in paragraph 10 above, unless an individual member had had his/her increment(s) withheld by the Board for performance reasons and pursuant to the Board's authority set forth under the Education Law (N.J.S.A. Title 18A).

13.	Prior to July 1, 1997, twelve (12) month employees received their incremental salary increases annually, effective with the commencement of services beginning July 1 of a given school year. Ten (10) month employees received their incremental salary increases annually, effective with the commencement of services beginning September 1 of a given school year. In each instance, the increments were included and paid at the first pay period.

14.	In or about July 1997, the Board determined that it would not pay the annual salary increases to either the twelve (12) month or ten (10) month unit members.

15.	Twelve (12) month unit members did not receive their annual salary increases upon the passage of the first pay period of the 1997-98 school year (i.e., July 15, 1997).

16. Ten (10) month unit members did not receive their annual salary increases upon the passage of the first pay period of the 1997-98 school year.

17.	As of the date of this Stipulation, the Board has not paid annual salary increases to any of the ten (10) or twelve (12) month unit members.

18.	As a result of the Board's refusal to pay the annual salary increases, the employees in the unit are being paid at the same salary level as was received for 1996-97.

19.	As a result of the Board's failure and refusal to pay the salary increases, the Association filed an Unfair Practice Charge with the Public Employment Relations Commission alleging that the Board committed an unfair practice within the meaning of N.J.S.A. 34:13A-5.4(a)(1) and (5).

24.	On September 3, 1997, the Board filed a Joint Notice of Impasse with the Commission (Docket No. I-98-75).

25.	The parties are scheduled to engage in a mediation session before PERC mediator Richard Gwin on November 20, 1997 at 7:30 p.m.

Both parties stipulated that these facts constitute the complete record in this matter.

The Board makes the following arguments.

Prior to July 1, 1997, the payment of increments to unit members had been made pursuant to Education Law (N.J.S.A. Title 18A). However, the holding in Bd. of Ed. of Tp. of Neptune v. Neptune Tp. Ed. Ass'n., 144 N.J. 16 (1996), prohibits it from paying increments to teaching staff members after the end of a three-year agreement. Therefore requiring it to pay increments to non-certificated employees who are in the same unit and covered by the same collective negotiations agreement would also be illegal. Paying increments only to non-certified employees in a mixed unit will have a chilling effect on negotiations; particularly since both teaching staff members and non-certified employees are represented by a single majority representative and both groups are covered by the same collective negotiations agreement. A tension will be created between staff and non-certificated employees, for the

teaching staff will have a much greater incentive to reach an agreement since they were not paid increments.4/

The Board urges that the Commission reconsider Galloway Tp. Bd. of Ed. v. Galloway Tp. Ed. Assn., 78 N.J. 25 (1978) and its progeny in light of the Supreme Court's recent holding in Neptune, and contends Neptune be expanded to include non-certified employees. Finally, it urges the Commission adopt a static definition of status quo.

ANALYSIS

The Board contends that disparate treatment of similarly situated employees is contrary to PERC precedent. It relies on Old Bridge Tp. Bd. of Ed., P.E.R.C. No. 87-2, 12 NJPER 599, 600 (¶17224 1986) and Borough of Glassboro, P.E.R.C. No. 86-141, 12 NJPER 517 (¶17193 1986). This argument is misplaced. These cases concern disparity of treatment to encourage or discourage the exercise of rights protected by the Act. The Commission has long recognized that competing interests within mixed negotiations units is a normal part of the negotiations process. PBA Local 119, P.E.R.C. No.

4/	The Board argues that it based its decision not to pay increments on the holding in Essex County Voc. & Tech. Bd. of Ed., I.R. No. 97-4, 22 NJPER 343, (¶27178 1996) wherein a Commission Designee declined to order the payment of increments to secretaries in a mixed unit with certified personnel. However, the Commission Designee in that decision did not make specific findings on this issue. Rather, he merely declined to grant an extraordinary remedy in interim relief leaving it for the Commission to decide this issue.

84-76, 10 NJPER 41 (¶15223 1983), Ford Motor Co. v. Huffman, 345 U.S. 330 (1953). Belen et al. v. Woodbridge Federation of Teachers Local 822 AFT, AFL-CIO, 142 N.J. Super. 486 (1976), cert. den. 72 N.J. 458 (1976), Hamilton Twp. Ed. Ass'n., P.E.R.C. No. 79-20, 4 NJPER 476 (¶4215 1978). It is not a per se unfair practice to treat different employees in the same unit differently.

The Board argues that Neptune should be expanded. Prior to Neptune, the Commission consistently held that good faith negotiations require the maintenance of established terms and conditions of employment, that is, an employer must maintain the status quo. The payment of increments is part of the status quo. Therefore, the refusal to pay increments is a unilateral alteration of the status quo and a per se illegal refusal to negotiate in good faith. Hudson Cty. Bd. of Chosen Freeholders v. Hudson Cty. PBA Local No. 51, App. Div. Dkt. No. A-2444-77 (4/9/79) aff'g. P.E.R.C. No. 78-48, 4 NJPER 87 (¶4041 1978); Rutgers, the State Univ. and Rutgers Univ. College Teachers Ass'n, P.E.R.C. No. 80-66, 5 NJPER 539 (¶10278 1979), aff'd and modified App. Div. Dkt. No. A-1572-79 (4/1/81). State of New Jersey, I.R. No. 82-2, 7 NJPER 532 (]@12235 1981); City of Vineland, I.R. No. 81-1, 7 NJPER 234 (¶12142 1981), interim order enforced and leave to appeal denied App. Div. Dkt. No. A-1037 80T3 (7/15/81); Belleville Bd. of Ed., I.R. No. 87-5, 12 NJPER 629 (¶17262 1980); Hunterdon Cty. Bd. of Social Services, I.R. No. 87-17, 13 NJPER 215 (¶18091 1987); Township of Marlboro, I.R. No. 88-2, 13 NJPER 662 (18250 1987); Borough of Palisades Park, I.R.

No 87-21, 13 NJPER 269 (¶18106 1987); Sheriff of Middlesex Cty., I.R. No. 87-19, 13 NJPER 251 (¶18101 1987); County of Bergen, I.R. No. 91-20, 17 NJPER 275 (¶22124 1991); County of Sussex, 17 NJPER 234 (]@22100 1991); Burlington County, I.R. No. 93-2, 18 NJPER 405 (¶23184 1992); Somerset County, I.R. No. 93-15, 19 NJPER 259 (¶24129 1993); Bd. of Ed. of the Hudson County Vocational Technical School, I.R. No. 96-7, 21 NJPER 366 (¶26228 1995); Bd. of Ed. of Ramapo-Indian Hills Reg. H.S. Dist., I.R. No. 97-8, 22 NJPER 386 (¶27207 1996); Essex County Vo. Tech. Bd. of Ed., supra; Evesham Tp. Bd. of Ed., I.R. No. 95-10, 21 NJPER 3, 4 (¶26001 1994); County of Morris Prosecutor, I.R. No. 96-18, 22 NJPER 146 (¶27076 1996).

In these decisions, the Commission relied, in part, upon the Supreme Court's language in Galloway.

Indisputably, the amount of an employee's compensation is an important condition of his employment. If a scheduled annual step increment in an employee's salary is an "existing rul[e] governing working conditions," the unilateral denial of that increment would constitute a modification thereof without the negotiation mandated by N.J.S.A. 34:13A-5.3 and would thus violate N.J.S.A. 34:13A-5.4(a)(5). Such conduct by a public employer would also have the effect of coercing its employees in their exercise of the organizational rights guaranteed them by the Act because of its inherent repudiation of and chilling effect on the exercise of their statutory right to have such issues negotiated on their behalf by their majority representative.

78 N.J. at 49.

Those salary increments that are "automatic" must be paid in order to

continue the status quo in the sense that they perpetuate existing terms and conditions of

employment. Because the employees expect these benefits and readily recognize them as established practice, the increases do not tend to subvert employee's support for their bargaining agent or disrupt the bargaining relationship.

78 N.J. at 50 quoting NLRB v. John Zink Co., 551 F.2d 799, 801 (10th Cir 1977)

However, the Court in Neptune cautioned that "Galloway was not decided on the basis of the Act but on the Court's interpretation of N.J.S.A. 18:29-4.1. Moreover, the Court held in Galloway that the Education Law preempted the Act." at 78 N.J. at 32.

In Neptune, the Court again interpreted N.J.S.A. 18A:29-4.1. This time the 1987 amendment (L. 1987, c. 13§1) which now states:

A board of education of any district may adopt a one, two or three year salary policy, including salary schedules for all full-time teaching staff members...

The Neptune Court held that these statutory changes "reveal no indication of any intent to overrule Galloway, but the simple change in language automatically precludes the application of Galloway to this case" @ 78 N.J. 30-31.

Similarly, the Court's policy discussion of static versus dynamic status quo was with reference to Title 18A -- not the Act. The Court held that N.J.S.A. 18A:29-4.1 preempts the application of the general rules of labor law.

Neither Galloway nor Neptune seeks to interpret the Act. The general discussions of labor law in both decisions support respective interpretations of Title 18A. Accordingly, absent a

clear reversal of Galloway, it would seem no more appropriate for the Commission to rely on Neptune to interpret the Act than it would be to rely on Galloway.

To this end, in Neptune, the Court found Title 18A preempts the issue of increments for teaching staff members but,

To the extent that any of the litigants are not "teaching staff members" the prohibition against increments in N.J.S.A. 18A:29-4.1 does not apply. Contracts with those employees should be governed by labor law only since no education law preempts that general rule. 164 N.J. at 30.

The Court affirmed the Appellate Division's finding that increments were owed to non-teaching staff members even while finding at the same time increments were not owed to teaching staff members.

It is significant that the Neptune Court notes that the tenure statute prohibits a Board from reducing teacher compensation. Accordingly, once a teaching staff member receives an increment it cannot be taken away. When the Commission has held that increments were part of the status quo, it has never held that such increments were permanent. Rather, the increments themselves were still subject to good faith negotiations. Such an interpretation is consistant with the Neptune Court's sustaining the payment of increments to non-teaching staff members.

Commission precedent has now been established for 20 years. It tracks traditional labor law policy NLRB v. Katz 369 U.S. 336 (1962); Exchange Parts Co., 139 NLRB 710, 730-734, (enf'd 330 Fed. 829 (CA5 1965); NLRB v. John Zink Co., 551 F.2d 799, 801

supra and has become an integral part of New Jersey public sector labor law.

The policy of the Act is to promote permanent labor peace (Declaration of Policy at N.J.S.A. 34:13A-2). I believe that to change a legal interpretation after a twenty year period would have a destabilizing effect on labor relations and be contrary to the goals of the Act. Accordingly, I urge the Commission to follow its own precedent and Order the East Hanover Board of Education to pay increments to its non-certificated employees pending the resolution of good faith negotiations.

RECOMMENDED ORDER

Accordingly, I recommend the Commission ORDER:

A. That the East Hanover Board of Education cease and desist from:

1.	Refusing to negotiate in good faith with the East Hanover Education Association by refusing to pay increments to non-teaching staff members, both 10 and 12 month, who are covered by the 1994-1997 collective negotiations agreement between the East Hanover Board of Education and the East Hanover Education Association.

B. That the Board take the following action:

1. Pay increments to all non teaching staff employees, both 10 and 12 month, who are covered by the 1994-1997 collective negotiations agreement between the East Hanover Board of Education and the East Hanover Education Association.

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

3.	Notify the Chair of the Commission within twenty (20) days of receipt what steps the Respondent has taken to comply herewith.

Edmund G. Gerber

Hearing Examiner

Dated: January 9, 1998

Trenton, New Jersey

WE WILL NOT refuse to negotiate in good faith with the East Hanover Education Association by refusing to pay increments to non-teaching staff members, both 10 and 12 month, who are covered by the 1994-1997 collective negotiations agreement between the East Hanover Board of Education and the East Hanover Education Association.

WE WILL pay increments to all non teaching staff employees, both 10 and 12 month, who are covered by the 1994-1997 collective negotiations agreement between the East Hanover Board of Education and the East Hanover Education Association.