H.E. NO. 97-25

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

TOWNSHIP OF WASHINGTON,

Respondent,

-and-	Docket No. CO-H-96-69

COMMUNICATIONS WORKERS

OF AMERICA, AFL-CIO, LOCAL 1040,

Charging Party.

Appearances:

For the Respondent, Ruderman & Glickman, attorneys

(Steven S. Glickman, of counsel)

For the Charging Party, Weissman & Mintz, attorneys

(Judiann Chartier, of counsel)

HEARING EXAMINER'S REPORT

AND RECOMMENDED DECISION

On September 12, 1995, the Communications Workers of America, AFL-CIO, Local 1040 ("Local 1040" or "Charging Party") filed an unfair practice charge (C-3)1/ with the Public Employment Relations Commission ("Commission") against the Township of Washington ("Township" or "Respondent"). Local 1040

1/	Exhibits received in evidence marked as "C" refer to Commission exhibits, those marked "J" refer to exhibits submitted jointly by the parties, those marked "CP" refer to Charging Party's exhibits, and those marked "R" refer to Respondent's exhibits. Transcript citation 1T1 refers to the transcript developed on September 26, 1996, at page 1. Transcript citation 2T refers to the transcript developed on October 8, 1996.

alleges that the Township violated the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et seq. ("Act"), specifically sections 5.4(a)(1), (3), (5), (6) and (7).2/ by refusing to sign and implement a negotiated settlement agreement.

On March 29, 1996, the Director of Unfair Practices issued a Complaint and Notice of Hearing (C-1). On April 12, 1996, the Township filed its Answer (C-2) generally denying the allegations contained in the charge which aver that the Township violated the Act. Hearings were conducted on September 26 and October 8, 1996, at the Commission's offices in Trenton, New Jersey. The parties were afforded the opportunity to examine and cross-examine witnesses, present relevant evidence and argue orally. At the conclusion of the hearing, the parties waived oral argument and established a briefing schedule. Briefs were filed by January 6, 1997.

2/	These subsections prohibit public employers, their representatives or agents from: "(1) Interfering with, restraining or coercing employees in the exercise of the rights guaranteed to them by this act. (3) Discriminating in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage 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. (6) Refusing to reduce a negotiated agreement to writing and to sign such agreement. (7) Violating any of the rules and regulations established by the commission."

Upon the entire record, I make the following:

FINDINGS OF FACT

1. The parties stipulated that the Township was a public employer and Local 1040 was a public employee representative within the meaning of the Act (1T9).

2. In September, 1994, Township employee Kenneth Ryker injured his back while on the job. Ryker received workers compensation benefits as the result of the injury (1T15). From the time of his injury until December 31, 1994, Ryker continued to collect 100% of his net take home pay (1T16). Ryker received approximately 70% of his take home pay from the Township's workers compensation insurance carrier. It was Township policy to pay employees on workers compensation the balance of their take home pay not provided by the insurance carrier, amounting to approximately 30% (1T16; 1T24; 1T76; 2T7).

3. Prior to January, 1995, Township employees Sebastiano and Wenzel also suffered work related injuries making them eligible to receive workers compensation benefits. Pursuant to Township policy, Sebastiano and Wenzel received 100% of their net take home pay while receiving workers compensation benefits prior to January 1, 1995.

4. At some time during the late fall, 1994, the Township decided to eliminate positions to reduce the municipal budget

(1T59). Of the 15 positions affected by the budget cuts, 8 employees were laid off (1T58-1T59). The other positions were eliminated through attrition and some employees retired (1T58-1T59).

5. In late November, 1994, in preparation for the reduction in force, Business Administrator Maryann Challo discovered that Ryker (who was receiving workers compensation benefits) was listed among those employees to be laid off. Challo contacted the Township's workers compensation attorney because she was unsure how the Township should handle an employee identified for lay off but receiving workers compensation; no policy existed to cover the situation (1T73-1T74; 1T86). Challo was advised that employees receiving workers compensation payments could be laid off but must continue to receive such payments and medical benefits related to their injury (1T74). Challo conveyed this information to the mayor and to Personnel Director Jacqueline Lauletta (1T74).

6. On December 1, 1994, the Mayor conducted a meeting with Local 1040 representatives and Township employees to discuss the layoffs effective January 1, 1995 (1T16-1T17; 1T71; 1T74-1T75; 1T81). The Mayor indicated that those employees who were not covered under an existing collective negotiations agreement would receive four weeks pay whether or not they worked until January 1 (1T54-1T55; 1T81). In response to Ryker's question regarding the status of employees receiving workers compensation benefits, the

mayor stated that such employees would continue to receive workers compensation payments after the layoff, until they were released by the doctor (1T16-1T17; 1T75).3/

7. The first paycheck which Ryker received in January, 1995, reflected a 30% reduction from Ryker's last paycheck in December, 1994. Ryker questioned Challo regarding the reduction in pay and was told that he would continue to receive the lesser amount because he had been laid off (1T17). Ryker telephoned Local 1040 representative Thompson and advised him of the reduction in his check (1T18; 1T35). Shortly thereafter, Sebastiano also called Thompson to complain about a similar 30% reduction in his check (1T35). Sebastiano had begun receiving workers compensation payments at the beginning of December, 1994 and continued to receive benefits until the end of January, 1995 (2T8).

3/	Local 1040 representative Willie Thompson testified that the mayor assured employees receiving workers compensation benefits that they would not be adversely affected by the layoff and that they would continue to be treated as other employees (1T51-1T52). Lauletta testified that she did not remember the mayor saying during the meeting that employees receiving workers compensation benefits would continue to be treated as employees (1T71). Challo testified that the mayor never stated that Ryker would continue as an employee nor did he specifically comment regarding Ryker's salary (1T75). Ryker's own testimony indicated that the mayor said only that employees receiving workers compensation benefits before the layoff would continue to receive such benefits after the layoff, until released by the doctor (1T16-1T17). Thus, I find that Ryker's testimony closely comports with Challo's in that the mayor did not state that employees receiving workers compensation benefits would continue to be treated as employees after the layoff.

8. Prior to January 1, 1995, the Township had never laid off employees (1T58). Also prior to January 1, 1995, the Township's policy was to pay net take home pay to all employees receiving workers compensation benefits (70% from workers compensation and 30% from the Township) (1T24; 1T76; 2T7). No policy or established practice existed regarding an employee who was laid off while receiving workers compensation benefits (1T58; 1T72).

9. On January 1, 1995, the Township unilaterally changed its policy regarding the amount of money paid to active employees receiving workers compensation benefits. The policy change reduced the compensation received by an active employee under workers compensation and not covered under a collective negotiations agreement to that amount required by the workers compensation law rather than net pay (1T76). Thus, the Township would no longer pay the additional 30% which made up the employee's total net take home pay (1T76; 1T83-1T84).

10. The only active employee to be affected by the policy change was Raymond Wenzel (1T66). As of January 1, 1995, Wenzel was receiving workers compensation payments (1T69). Since the Township and Local 1040 had not yet concluded negotiations for a collective agreement as of January 1, 1995, Wenzel was identified as an employee not covered by any collective agreement and thus subject to treatment in accordance with the new policy. Accordingly, Wenzel's net pay was reduced by 30% commencing the

first paycheck in January, 1995 (1T69; 1T77; 1T83-1T84; 2T7). However, unlike Ryker and Sebastiano, Wenzel was not laid off (1T69). Ultimately, on the advise of Special Labor Counsel Steven Glickman, the Township repaid Wenzel for all of the money it had reduced from his net pay since January 1, 1995 (1T80; 1T85). Glickman told the Township that since Wenzel continued as an active employee in Local 1040's negotiations unit, and since the parties were then in active negotiations for a collective agreement, the Township should not unilaterally change the policy as applied to him. Glickman recommended, and the Township agreed, to treat Wenzel in accordance with the old policy and pay him 100% of his net take home pay while receiving workers compensation benefits (2T11).4/

11. Since Ryker and Sebastiano were laid off on January 1, 1995, the Township did not consider them active employees (1T66). The new policy applied only to active employees not covered by any collective agreement, and not to employees who had been laid off on January 1, 1995 (1T76; 1T86). As noted in finding number 8, above, the Township had no specific policy or practice concerning the treatment of employees who were laid off while receiving workers compensation benefits.

4/	Glickman appeared as a witness during the hearing. During his testimony, another attorney from Glickman's law firm appeared on behalf of the Township.

12. On February 10, 1995, Local 1040 filed an unfair practice charge (docket no. CO-95-267) with the Commission (CP-1). That charge alleged that on January 1, 1995, the Township unilaterally reduced by 30% the payment level of two unit employees receiving workers compensation benefits.

13. Shortly after the Township received CP-1, it notified Glickman (2T6). Glickman contacted Thompson to discuss the charge (2T7). Thompson confirmed that the two employees at issue were Ryker and Sebastiano (2T7-2T8). Glickman asked Thompson what Local 1040 was seeking to settle the charge (2T8). Thompson told Glickman that Local 1040 wanted the Township to provide full net pay to Ryker and Sebastiano retroactive to January 1, 1995 and continue such payments until they no longer received workers compensation benefits (1T42-1T43; 1T49; 2T8-2T9).

14. Glickman contacted Challo and Lauletta to advise them of the Union's position on settlement (1T61; 1T77; 2T11). Challo and Lauletta both rejected the Union's proposal to pay 100% of Ryker's and Sebastiano's net pay. Challo indicated that both individuals were laid off and the purpose of the layoff was to reduce costs. The Township would not reduce costs if it paid Ryker and Sebastiano 100% of their net pay (1T78). Lauletta also rejected the Union's demand to pay Ryker and Sebastiano their net pay retroactive to January 1, 1995 (1T61).

15. After Glickman's conversations with Challo and Lauletta, he again contacted Thompson to discuss the possible settlement of CP-1. Glickman told Thompson that the Township would agree to pay employees receiving workers compensation benefits 30% of their net pay, thus, in combination with the 70% they received from workers compensation, the employee would continue to receive 100% of their net pay. Glickman also told Thompson that individuals who were laid off were not considered employees and no longer received wages from the Township. The Township's 30% contribution toward net pay was based upon the employee's anticipated regular wages if the employee was in pay status. Thus, since laid off individuals received no anticipated pay upon which to calculate the 30% payment, they would receive only their workers compensation benefits (2T11). Thompson said that he would get back to Glickman with a response (2T12).

16. During the same time frame in which Glickman and Thompson were discussing settlement of CP-1, the parties were also engaged in collective negotiations. Local 1040 proposed an injury leave provision concerning employees on workers compensation (1T23; J-1). The proposal generally reflected the pre-January 1, 1995 Township policy which provided that employees who became disabled by reason of a service-connected injury or illness will receive workers compensation benefits at the rate of 70% of their net pay and that the Township will pay the 30% balance of net pay (1T24; J-1). The treatment of laid off employees receiving

workers compensation benefits was not raised during negotiations (1T25). On May 10, 1995, the parties concluded their negotiations and included an article on injury leave reflecting the pre-January 1, 1995 Township policy (1T25; 1T44; 1T82; J-1; J-2; R-1).

17. Thompson asked Glickman for a written settlement proposal for CP-1 (2T12). Glickman drafted a memorandum of agreement (CP-2). Before sending CP-2 to Thompson, he first sent it to Challo and Lauletta for their review and approval (2T12). Challo and Lauletta reviewed CP-1 and each questioned Glickman to ensure that CP-1 did not pertain to individuals laid off by the Township and would, accordingly, not effect Ryker or Sebastiano (1T62; 1T78-1T79). Upon receiving Glickman's assurance that CP-2 pertained only to active employees and did not affect Ryker or Sebastiano, Challo and Lauletta approved CP-2 and gave Glickman permission to forward the memorandum to Thompson (1T62; 1T78-1T79; 2T12-2T13). On April 27, 1995, Glickman sent Thompson the Township's proposed memorandum of agreement (CP-2). The memorandum made no specific reference to any individual by name (2T12; CP-2).

18. Thompson reviewed CP-2. While most of the proposal was acceptable, Thompson identified a portion of the memorandum which he wished to modify. Glickman and Thompson discussed the problem and agreed to modify the memorandum to accommodate the issue Thompson raised (1T38; 2T13-2T14). During Thompson's and Glickman's discussion of CP-2, neither Ryker's nor Sebastiano's

name was raised nor was there any discussion concerning retroactive payments for them (2T14). Glickman prepared another draft settlement agreement (CP-3). The memorandum of agreement, CP-3, states in part:

THIS MEMORANDUM OF AGREEMENT between the TOWNSHIP OF WASHINGTON ("Township") and the HIGHER LEVEL SUPERVISORS, COMMUNICATIONS WORKERS OF AMERICA, LOCAL NO. 1040 ("Union") represents the full and final agreement between the parties regarding the Unfair Labor Practice Charge filed by the Union against the Township, Docket No. CO-95-267;

1. The Township agrees that all affected bargaining unit members shall receive, as compensation for a Workers' Compensation Injury, an amount equal to the employee's full pay (defined as "net take home pay") inclusive of all compensation received from disability insurance sources paid for by the Township, including Workers' Compensation, for the period of the employee's disability, up to one (1) year.

2. The Union agrees to withdraw the above-referenced Unfair Labor Practice Charge against the Township with prejudice.

19. Before forwarding CP-3 to Thompson, Glickman sent copies to Lauletta and Challo for their review and approval. Glickman pointed out the single change between CP-2 and CP-3. Lauletta and Challo agreed to the modification contained in CP-3, and again sought assurances from Glickman that the settlement pertained only to active employees and did not affect Ryker and Sebastiano. Glickman assured Lauletta and Challo that the settlement agreement did not pertain to them (1T63; 1T79; 2T14-2T15).

20. On May 30, 1995, Glickman sent Thompson a copy of CP-3 for his review and signature (1T39-1T40; 2T15). Thompson reviewed CP-3 and determined that the proposed revision contained in the document comported with his previous discussion with Glickman. Based upon Thompson's understanding of the terms of the settlement, Thompson found CP-3 to be acceptable and, on July 21,

1995, signed the document (1T39-1T40). On July 24, 1995, Thompson sent Glickman a signed copy of the memorandum of agreement (CP-4). Thompson's cover letter states:

Please find enclosed your revised memorandum of agreement in the above-captioned matter, signed by the Union. The Union will withdraw the Unfair Labor Practice charge after the affected bargaining unit members are satisfied that all compensation due has been received. [CP-4]

21. After Thompson sent CP-4 to Glickman, he told Ryker that CP-3 contained all of the ingredients the Union needed to settle the matter. Thompson told Ryker that he would receive payments retroactive to January 1, 1995. Thompson assured Ryker that he was still considered an employee (1T46-1T47). Upon signing CP-3, Thompson considered the matter settled (1T43; 1T46-1T47). A few days later, Thompson left for vacation (1T45). Upon receiving CP-4, Glickman sent the memorandum of agreement to Lauletta for signature (2T16).

22. One or two weeks after Thompson told Ryker that the parties had reached a settlement, Ryker went to Challo's office to ask when he would receive his retroactive payment (1T19; 1T80).

Challo told Ryker that employees who were laid off would not receive retroactive payments. Challo told Ryker that the settlement agreement only affected active employees such as Wenzel and only active employees receiving workers compensation benefits would receive 100% of net pay (1T19; 1T80). Ryker then called Thompson and advised him of the Township's position and their refusal to provide him with any retroactive payment (1T19; 1T47).

23. Lauletta was apprised of Ryker's and Challo's conversation and called Glickman. Lauletta advised Glickman of Ryker's understanding concerning the settlement agreement. Glickman stated that there was a misunderstanding and advised Lauletta not to sign CP-4 (1T64; 2T16-2T17).

24. Glickman called Thompson. Glickman told Thompson that the memorandum of agreement related only to employees and that Ryker and Sebastiano were not employees (having been laid off in January). Glickman told Thompson that it was the Township's position, unchanged from the beginning of their settlement discussions regarding CP-1, that Ryker and Sebastiano, as non-employees, were entitled only to workers compensation benefits and that they would receive no retroactive payments (2T18-2T19).

25. It was Glickman's understanding that after his initial conversation with Thompson concerning CP-1 (wherein Thompson identified Ryker and Sebastiano as the employees involved in the unfair practice charge), and his immediately subsequent conversation with Thompson (wherein he indicated that the Township would not

provide retroactive payments to Ryker or Sebastiano), that all subsequent settlement discussions did not mention Ryker, Sebastiano or the issue of retroactive payments for them (2T22-2T23). It was Thompson's understanding that all of their settlement discussions centered around the manner in which Ryker and Sebastiano would be treated and their receipt of 100% of their net pay at all times during which they received workers compensation benefits (1T43; 1T47). Pursuant to the terms of the settlement, Thompson understood Glickman to have agreed to pay Ryker and Sebastiano 100% of their net pay retroactive to January 1, 1995, for the period during which they received workers compensation benefits (1T57).

26. I take administrative notice of the following facts. On June 22, 1995, Edmund G. Gerber, Director of Unfair Practices, sent Thompson a letter requesting to be advised of the current status of CP-1. Having received no response, on August 2, 1995, Gerber sent Thompson another letter asking to be apprised of the status of CP-1. In his August 2 letter, Gerber stated that if he did not receive a response by August 14, 1995, it would be assumed that Local 1040 had no further interest in pursuing CP-1 and the unfair practice charge would be deemed withdrawn pursuant to N.J.A.C. 19:14-1.5(d). On August 15, 1995, having again received no response, Gerber deemed CP-1 withdrawn and closed the case.

ANALYSIS

The issue in this case is not whether the Township violated the Act by unilaterally reducing Ryker's and Sebastiano's workers compensation benefits without negotiating with Local 1040. That claim ceased to exist when CP-1 was deemed withdrawn on August 15, 1995. The issue in this case is whether the Township refused to sign and implement the negotiated settlement agreement (CP-4) executed by Thompson on July 21, 1995 in violation of Section 5.4(a)(6) of the Act. This case is a "meeting of the minds" case. In Borough of Fairlawn, H.E. No. 91-33, 17 NJPER 201, 205 (¶22085 1991), adopted P.E.R.C. No. 91-102, 17 NJPER 262 (¶22122 1991), the hearing examiner stated:

In [meeting of the minds] cases, the parties have agreed on specific language but disagree on what it means or how it applies; the parties admit they agreed on some language but disagree on the actual language, and have no writing of the language; or the parties negotiated over a particular topic, have no written agreement, and left the negotiations with different positions on whether an agreement was reached on that topic. See for example: N. Caldwell Bd. of Ed., P.E.R.C. No. 90-92, 16 NJPER 261 (¶21110 1990); Trenton Bd. of Ed., P.E.R.C. No. 88-49, 13 NJPER 848 (¶18327 1987); Long Branch Bd. of Ed., P.E.R.C. No. 86-97, 12 NJPER 204 (¶17080 1986); Borough of Matawan, P.E.R.C. No. 86-87, 12 NJPER 135 (¶17052 1986).

In this case, the parties have agreed on specific language but disagree on what it means or how it applies. Glickman and Thompson negotiated the language memorialized in CP-3. However, they understood the language to mean different things. Thompson believed the settlement agreement would result in the retroactive

payment of the additional 30% of Ryker's and Sebastiano's net wages for the time they received workers compensation benefits. After Thompson signed CP-3, he notified Ryker that he (Ryker) would soon receive the retroactive payments which Ryker sought. Thompson assured Ryker that he was still considered an employee and covered by the language of the memorandum of agreement. In CP-4, Thompson's cover letter clearly implies an expectation that retroactive payments would be made to "affected bargaining unit members." Thompson considered the matter satisfactorily resolved.

Glickman understood the agreement to exclude Ryker and Sebastiano and believed Thompson understood this also. In his response to Thompson after their initial conversation concerning CP-1, Glickman told Thompson that individuals who were laid off were no longer considered employees by the Township. While all subsequent conversations concerning the draft language contained in the proposed memoranda of agreement did not refer to Ryker, Sebastiano, or to the issue of retroactive payments, Glickman believed that Thompson acquiesced to the Township's position that Ryker and Sebastiano would receive no retroactive payments. It is clear from Glickman's conversations with Challo and Lauletta, who reviewed the proposed memoranda of agreement, the Township consistently maintained that Ryker and Sebastiano were not covered by the settlement agreement and would receive no retroactive payments.

Consequently, I find that the parties had no meeting of the minds regarding the meaning of the specific language contained in CP-4. Thus, the Township did not violate Section 5.4(a)(6) of the Act when it refused to sign CP-4.

I find no facts in support of Local 1040's contention that the Township interfered with, restrained or coerced employees in the exercise of the rights guaranteed to them by the Act, discriminated in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage employees in the exercise of the rights guaranteed to them by the Act, refused to negotiate in good faith with Local 1040 concerning terms and conditions of employment of unit employees, refused to process grievances presented by Local 1040 or violated any of the rules or regulations established by the Commission.

Accordingly, based upon the entire record and above analysis, I make the following:

CONCLUSIONS OF LAW

1. Since there was no meeting of the minds between the Township and Local 1040 regarding the terms of the settlement agreement negotiated by the parties, the Township did not violate N.J.S.A. 34:13A-5.4(a)(6) when it refused to sign the proposed memorandum of agreement.

2. The Township did not violate section 5.4(a)(1), (3), (5) or (7) of the Act.

RECOMMENDATION

I recommend that the Complaint be dismissed.

Stuart Reichman

Hearing Examiner

Dated: March 3, 1997

Trenton, New Jersey