H.E. NO. 77-16

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

SOUTH RIVER BOARD OF EDUCATION,

Respondent,

-and-	Docket No. CO-76-338-10

SOUTH RIVER EDUCATION ASSOCIATION,

Charging Party.

Appearances:

For the Respondent, Wilentz, Goldman & Spitzer, Esqs.

(Mr. Alfred J. Hill, of Counsel and On the Brief)

For the Charging Party, Rothbard, Harris & Oxfeld, Esqs. (Mr. Sanford R. Oxfeld, of Counsel)

HEARING EXAMINER'S RECOMMENDED

REPORT AND DECISION

An Unfair Practice Charge was filed with the Public Employment Relations Commission (the "Commission") by the South River Education Association (the "Association") on June 14, 1976. The Association alleged that the South River Board of Education (the "Board") had 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. (the "Act"), in that the Board had refused to enter into a joint request to the American Arbitration Association (the "AAA") for arbitration, pursuant to Article III, Section D. 1. of the operative collective negotiations agreement between the parties,1/ and thus had refused to process a grievance presented by the Association, as the recognized majority representative of professional employees employed by the Board, in violation of the Act.2/

It appearing that the allegations of the Charge, if true, might constitute unfair practices within the meaning of the Act, a Complaint and Notice of Hearing was issued on July 21, 1976 by Carl Kurtzman, Director of Unfair Practice Proceedings. Pursuant to the Complaint and Notice of Hearing, a hearing was held on September 22, 1976, in Newark, New Jersey, at which time all parties were given an opportunity to examine witnesses, to present evidence and to argue orally. The Association submitted a post-hearing letter memorandum in support of its contentions. The Board submitted a post-hearing brief in support of its position. All of these submissions were filed by December 13, 1976. Upon the entire record in this proceeding the Hearing Examiner finds:

1.	The South River Board of Education is a public employer within the meaning of the New Jersey Employer-Employee Relations Act, as amended, and is subject to its provisions.

2.	The South River Education Association is an employee representative within the meaning of the New Jersey Employer-
Employee Relations Act, as amended, and is subject to its provisions.

3.	An Unfair Practice Charge having been filed with the Commission alleging that the South River Board of Education has engaged in or is engaging in unfair practices within the meaning of the New Jersey Employer-Employee Relations Act, as amended, a question concerning alleged violations of the Act exists and this matter is appropriately before the Commission for its determination.

BACKGROUND

On November 25, 1975, the Association filed a request for arbitration with the AAA claiming that Ms. Susan Basaman's teaching assignment had been changed without proper notification as set forth in Article IX, subsection B of the collective negotiations agreement between the Board and the Association, covering the period between July 1, 1974 and June 30, 1976.3/ During the processing of Ms. Basaman's grievance through the first four levels of the grievance procedure agreed upon by the parties and contained within Article III of the agreement, the Board's designated representatives had determined that Ms. Basaman had been notified concerning her class and building assignments for the following school year in accordance with the contract between the parties. The Board itself at level four of the grievance procedure also determined that Ms. Basaman had failed to file a statement setting forth her definite plans concerning possible grade and/or subject reassignments or transfers for the upcoming year by March 1, 1975, as required in Article X, subsection A of the agreement between the parties.4/

By letter dated April 15, 1976, the AAA, after consideration of substantial documentation submitted to it by the Board and the Association with regard to the Association's request for arbitration in this matter, closed its file in this instant case without appointing an arbitrator. The Board essentially in its correspondence with the AAA had contended that the arbitration clause in question required that the Board enter into a joint request for arbitration only if (a) there was a dispute between the Board and the Association and (b) both the Board and the Association agreed that the dispute was one of contractual interpretation and not of fact. The Board submitted that the operative arbitration clause was included within the contract only to cover certain rare instances when both parties would agree that the ambiguity of a certain section of the agreement needed clarification and could not be settled between the parties themselves. When the AAA closed its file in this matter it stated in part that its labor arbitration rules did not permit it to process a request for arbitration when one of the parties to a contract refused to enter into a joint request for arbitration, when the relevant contract provided that this joint request was a necessary quid pro quo for the AAA to process that request. The instant unfair practice matter was therefore initiated by the Association thereafter.

MAIN ISSUE

Whether the Board's refusal to enter into a joint request for a panel of arbitrators from the AAA, pursuant to Article III, section D. 1. of the operative collective negotiations agreement between the parties, constituted a refusal to process a grievance presented by the Association, in violation of N.J.S.A. 34:13A-
5.4(a)(1)5/ and (a)(5)?

POSITION OF THE ASSOCIATION

The Association contends that under the circumstances in the instant matter the Board was required to enter into a joint request to the AAA for arbitration. The Association submits that the record reflects that the AAA, the tribunal named in the negotiations agreement between the parties to handle arbitration requests, had by its actions determined that the arbitration clause in the contract in question was not self-executing. Furthermore, the Association alleges that it was essentially uncontroverted that a dispute existed between the parties concerning the meaning and interpretation of the phrase contained within Article X, subsection B that "personnel shall be notified of their assignments...not later than August 15." The Association asserts that the decision of the Executive Director, now the Chairman, of the Commission in the matter entitled In re Englewood Board of Education and In re Tenafly Board of Education, E.D. No. 76-34, 2 NJPER 175 (1976) clearly states in apposite part, that when a public employer's conduct, by virtue of specific contractual language, renders a procedure for the invocation of arbitration non-self-executing, a violation of the Act under subsection (a)(5) may be implied. The Association concludes that in light of this particular decision, under the circumstances in the instant case, it is axiomatic that the Board in the instant matter has refused to process the Basaman grievance in violation of the Act.

POSITION OF THE BOARD

The Board's first contention is that the Commission lacks jurisdiction with respect to the matters at issue inasmuch as the Commission would have to make a threshold determination concerning the interpretation of the agreement between the parties in attempting to adjudicate the matters in dispute. The Board contends that the Commission has heretofore refused to construe or interpret the negotiations agreements of parties at issue, leaving the determination of arbitrability under the contract to the "appropriate forum," i.e., the judiciary or the arbitrator as the case may be. In accordance with past Commission precedent, the Board feels that the Commission should not entertain jurisdiction over the instant matter since it would be acting in violation of its previously announced mandate with regard to its lack of authority to interpret collective negotiations agreements.

The Board next asserts, that assuming arguendo that the Commission has jurisdiction to interpret the agreement under the facts in this case, the history of the negotiations between the parties, as enunciated in the record, demonstrates that the Board and the Association must affirmatively agree that there is a dispute as to the interpretation of the agreement, before a request for arbitration shall be jointly made to the AAA. The Board submits that the language of the arbitration clause in question is not mandatory, as suggested by the Association but, in fact, is conditional. In support of this contention the Board refers to several efforts made by the Association to have Article III, section D. 1. amended so as to provide for arbitration as a fifth and final level in all grievance proceedings, without the need for Board agreement and/or without the need to establish that the matter at issue concerned an interpretative problem. The Board concludes that the Association in this charge is merely seeking to obtain from the Commission that which it could not secure through negotiations with the Board, i.e., an arbitration clause that is much broader than the existing clause.

The Board also contends that even if the arbitration clause, despite its plain language, is construed by the Commission not to require an affirmative agreement between the parties, the Association cannot prevail. The Board submits that the dispute in this matter involving Susan Basaman is merely one of fact, not of contract interpretation. The Board sets forth that the record clearly establishes that there was merely disagreement as to whether the words and conduct of the school principal on a specific occasion prior to August 15, 1975, when school personnel pursuant to the contract had to be informed of what their jobs were to be for the coming school year, were sufficient to inform Ms. Basaman of her assignment for the coming year.

The Board lastly contends that even assuming: (1) that the Commission in a departure from its past practices has taken jurisdiction of the matter and has undertaken to interpret the agreement; (2) the initial phrase of Article III, section D. 1. has been nullified and arbitration has been made contingent upon a third party determination of whether the dispute in question is one of interpretation or fact; and (3) the Commission has decided that the dispute between the parties is one of interpretation and not fact, a finding in favor of the Association would still entail the extraordinary determination that the Board's action in taking a good faith position with the AAA, later deemed to be in error, was an unfair practice. The Board asserts that N.J.S.A. 34:13A-5.4(a) contemplated many potential abuses of unfair practices by public employers but that misclassification of a grievance matter as one of fact, rather than one of interpretation, surely was not one among them.

DISCUSSION AND ANALYSIS

The undersigned concludes, on the basis of a careful review of the record and apposite federal private sector precedent,6/ that the Board's refusal to enter into a joint request for a panel of arbitrators from the AAA, given the language of the relevant arbitration clause [Article III, section D. 1. of the 1974-76 negotiations agreement], did not constitute a refusal to process a grievance presented by the Association within the intendment of the Act's unfair practice section and was not violative of N.J.S.A. 34:13A-5.4(a)(1) and (a)(5).

Preliminarily, the undersigned rejects the Board's first contention that the Commission in the instant matter lacks jurisdiction to hear this matter, inasmuch as it is necessary to interpret the agreement between the parties in attempting to adjudicate the matter in dispute between the Board and the Association. The Board has argued that the Commission has consistently in the past refused to construe or interpret negotiations agreements between the parties in recognition of the fact that arbitrators and the judiciary are the proper agents to interpret contractual agreements.

The undersigned, however, notes that in the private sector the courts have held that the National Labor Relations Board should, in appropriate circumstances, interpret the contract of the parties. One Federal Circuit Court of Appeals affirmed the following in a recent decision:

Admittedly, the Board has no plenary authority to administer and enforce collective bargaining contracts. Those agreements are normally enforced as agreed upon by the parties, usually through grievance and arbitration procedures, and ultimately by the courts. But the business of the Board, among other things, is to adjudicate and remedy unfair labor practices...Hence, it has been made clear that in some circumstances the authority of the Board and the law of the contract are overlapping, concurrent regimes, neither pre-
empting the other...Arbitrators and the courts are still the principal sources of contract interpretation, but the Board may proscribe conduct which is an unfair labor practice even though it is also a breach of contract remediable as such by arbitration and in the courts...It may also, if necessary to adjudicate an unfair labor practice, interpret and give effect to the terms of collective bargaining contract..." (Citations Omitted) Chase Mfg. Co., 492 F.2d 130, CA 7 (1974), 85 LRRM 2603 citing NLRB v. Strong, 393 U.S. 357, 360-361, 70 LRRM 2100, 2101 (1969).

Similarly, the Public Employment Relations Board in New York followed this particular line of reasoning in Town of Orangetown, 8 PERB 3069 (1975). The Commission itself in a recent decision entitled In re Piscataway Township Board of Education, P.E.R.C. No. 77-54, 3 NJPER ___ (1977), affirming H.E. No. 77-7, 2 NJPER 347 (1976) adopted the findings of fact and conclusions of law of a Hearing Examiner who interpreted the parties' contract in that particular matter, substantially for the reasons advanced by that Hearing Examiner.

The Hearing Examiner further notes that the Executive Director, now the Chairman, of the Commission in In re Englewood Board of Education and In re Tenafly Board of Education, supra, viewed the "refusing to process grievances" language of N.J.S.A. 34:13A-5.4(a)(3) as intended to cover circumstances such as when public employer conduct, by virtue of specific contractual language, rendered a grievance/arbitration procedure non-self-
executing. To force the parties, in the case before the undersigned, into the courts for a resolution of their dispute at this juncture, when it is apparent that the Association relied at least in part on the above-cited dicta of the Commission's chief executive officer and administrator in the Englewood and Tenafly decision, supra, in support of its charge, would run counter to the Act's stated declaration of policy that "the best interests of the people of the State are served by the prevention or prompt settlement of labor disputes..."7/

In light of the above-cited factors, to best effectuate the policies of the Act, the undersigned has determined in this Recommended Report and Decision to interpret the parties' contract.

It is the undersigned's determination that the language of the relevant arbitration clause is conditional and does not require the mandatory arbitration of all contractual disputes relating to the interpretation of the agreement between the parties. The undersigned finds that the plain and clear language of Article III, section D.1. requires that the Board and the Association must affirmatively agree that there is a dispute as to the interpretation of the pertinent contractual agreement before the parties are thereafter obligated to jointly request arbitration. In the absence of joint agreement that there is an interpretative dispute relating to the contract-even if it is arguable that one party was arbitrarily or capriciously withholding its agreement-there is no legal obligation for the parties to enter into a joint request for a panel of arbitrators.8/

As pointed out by the Association, the United States Supreme court has continually affirmed its strong preference for the arbitration of labor disputes9/ in furtherance of the clearly expressly national policy favoring the resolution of labor disputes in private extra-judicial forums.10/ The federal judiciary has generally construed arbitration clauses broadly, unless it may be discerned with positive assurance that an arbitration clause is not susceptible to an interpretation that covers the asserted dispute. All doubts concerning coverage under an arbitration clause are normally resolved in favor of the arbitration process. The courts have uniformly determined that where a contract contains a broad arbitration clause, in order to remove a specific dispute from arbitration the language of the agreement purporting to do so must be "clear and unambiguous" or "unmistakenly clear".11/

Within this particular legal framework the undersigned must interpret the disputed arbitration clause, which provides in pertinent part that "[i]n the event that the Board and the Association agree that there is a dispute as to the interpretation of this agreement then a request shall be made, jointly, to the American Arbitration Association." This particular agreement does not contain the "broad" or "standard" mandatory arbitration clause common to many collective bargaining agreements in the private sector12/ and certain collective negotiations agreements in the public sector.13/ It is evident to the undersigned that the parties have "clearly and unambiguously" conditioned utilization of the arbitration mechanism on the joint agreement of the parties that a dispute existed as to the interpretation of the agreement between the parties. Given the language of the arbitration clause at issue the agreement provided for only voluntary or permissive arbitration of an "interpretative dispute" between the parties.14/ Since the Board has maintained that there is no dispute as to the interpretation of the agreement relative to the Basaman grievance, the undersigned cannot find that the Board's actions in refusing to enter into a joint request for a panel of arbitrators from the AAA constituted a refusal to process a grievance within the intendment of N.J.S.A. 34:13A-5.4(a)(5).

Although the undersigned holds that the language of the agreement itself clearly did not bind the Board to arbitrate the instant dispute, there is still a need to examine the extrinsic evidence submitted by the Board relating to (1) the negotiations that resulted in the agreement of the parties upon the arbitration clause now set forth in Article III, paragraph D. 1. and (2) subsequent negotiations relating to this arbitration clause, despite the existence of the parol evidence rule.15/ The undersigned is cognizant of the arbitration maxim that "unambiguity [relating to contract terminology] is never absolute".16/ Inasmuch as the Association and the Board argue that the relevant contract arbitration language unambiguously supports their respective divergent claims, and given the possibility that the Commission may not affirm the undersigned's determination that the relevant arbitration clause clearly did not bind the Board to arbitrate the instant dispute,17/ I believe it is necessary to consider the relevant negotiations history relating to the arbitration clause to aid in the interpretation of the language of that clause.

With reference to the relevant negotiations history, the record reveals the following:

1.	The first collective negotiations agreement executed by the Board and the Association after the passage of Chapter 303, Public Laws of 1968 became effective July 1, 1969 and continued in full force and effect until June 30, 1970. The parties agreed upon a four step grievance procedure that terminated in all cases at the Board of Education level. There was no provision at all for the arbitration of any grievance.

2.	During the course of negotiations for a successor agreement covering the 1970-71 school year the Association attempted to negotiate a broad binding arbitration provision. The Board consistently refused to agree upon the inclusion of any type of arbitration clause within the contract. A Commission-
appointed mediator, James Crawford, suggested the inclusion of an arbitration clause that he had drafted, that was identical in language to the arbitration provision that is the subject of the instant charge proceeding. Crawford explained that arbitration would be utilized only on those rare occasions when the Board and the Association agreed that a particular grievance relating to a dispute that was one of contractual interpretation and not of fact. Crawford specifically explained to the parties at a joint session the purpose and limited scope of the arbitration clause. The parties agreed upon the inclusion of the proposed language in the grievance procedure negotiated for the 1970-71 school year.18/

3.	The Third agreement between the Board and the Association, covering the period July 1, 1971 to June 30, 1972, contained the same arbitration clause as in the prior agreement.

4.	In the Association's proposals for a successor agreement to the 1971-72 contract, the Association sought to delete from the applicable arbitration clause the words "as to the interpretation of the agreement" in an apparent effort to expand the potential scope of the arbitration procedure. The Board refused to agree to this change in the arbitration process and the Association later withdrew this particular proposal. The successor agreement negotiated by the parties covering the period between July 1, 1972 and June 30, 1974 contained the same arbitration provision as had previously been agreed upon.

5.	During the course of negotiations for a 1974-76 contract the Association submitted a proposal to change the aforementioned arbitration clause. The Association proposed the deletion of the words:

In the event that the Board and the Association agree that there is a dispute as to the interpretation of this agreement, then a request shall be made jointly to the American Arbitration Association for arbitration.

and sought to substitute the following language:

In the event that the aggrieved person is not satisfied with the disposition of his grievance at level four he may, within five (5) school days from receipt of a decision by the Board, request in writing that the Association submit his grievance to arbitration. If the Association determines that the grievance is meritorious, it may submit the grievance to the American Arbitration Association for arbitration.

The Board again refused to agree to an arbitration procedure that would provide for arbitration as a fifth and final level in all grievance proceedings, without the need for Board agreement and without the requirement that the grievance concerned a contract interpretation problem. The Association subsequently withdrew this proposal. The agreement between the parties covering the period from July 1, 1974 to June 30, 1976 was the agreement in effect at the time of the filing of the instant charge.

6.	In its negotiations proposals for a 1976-78 agreement, the Association sought to delete from Article III, section D. 1. the words "In the event that the Board and the Association agree that" and "jointly" and sought to add the language "If there is a". The arbitration clause, in relevant part, would then have stated the following:

If there is a dispute as to the interpretation of this agreement, then a request shall be made to the American Arbitration Association for arbitration.

The Board refused to consider any change in Article III, section D.1. At the conclusion of negotiations, the same arbitration clause [in effect since 1970-71 school year] was agreed upon and included in the agreement now in effect between the Board and the Association.

7.	There have been no arbitration hearings conducted, pursuant to Article III, section D.1., since that provision was first negotiated and included within the 1970-71 agreement. There were no requests for arbitration made by the Association prior to the instant matter.

In summary, the undersigned concludes that all relevant evidence relating to negotiations concerning Article III, section D.1. serves to affirm the undersigned's determination that the language of the arbitration clause at issue provided for only voluntary or permissive arbitration of an interpretative dispute between the parties. The undersigned therefore concludes that the Association has not established by a preponderance of the evidence that the Board committed an unfair practice, as defined by N.J.S.A. 34:13A-5.4(a)(5), by refusing to enter into a joint request for arbitration of the Basaman grievance.19/

RECOMMENDED ORDER

Accordingly, for the reasons herein above set forth, IT IS HEREBY ORDERED that the complaint in this instant matter be dismissed in its entirety.

___________________________

Stephen B. Hunter

Hearing Examiner

Dated:	Trenton, New Jersey

April 22, 1977