H.E. NO. 85-31

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

ESSEX COUNTY EDUCATIONAL SERVICES

COMMISSION,

Respondent,

-and-	Docket No. CO-82-190-137

EDUCATIONAL SERVICES TEACHERS ASSOCIATION,

Charging Party.

Appearances:

For the Respondent

Petit-Clair & Graves, Esq.

(Edward F. Petit-Clair, Esq.)

For the Charging Party

Greenberg, Kelley & Prior, Esqs.

(James F. Schwerin, Esq.)

DECISION AND ORDER ON RESPONDENT'S

MOTION TO DISMISS

An Unfair Practice Charge was filed with the Public Employment Relations Commission (hereinafter the "Commission") on February 1, 1982, by the Educational Services Teachers Association (hereinafter the "Charging Party" or the "Association") alleging that the Essex County Educational Services Commission (hereinafter 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 the Respondent employed teaching personnel pursuant to Title 18A for the 1979-80 school year and on December 19, 1979 it formally recognized the Association as the exclusive representative for its teachers; by resolution on July 1, 1980 the Respondent terminated the employment of all teachers represented by the Association and immediately thereafter subcontracted its teaching services for the 1980-81 school year; as a result of legal proceedings instituted by the Association the Appellate Division on October 15, 1981 held that the Respondent had no authority to subcontract its teaching services, which also voided a second subcontract for the 1981-82 school year; on October 22, 1981 the Association demanded that the Respondent renew collective negotiations and on October 26, 1981 the Respondent notified the Association that it would not enter into collective negotiations on the ground that a prior Unfair Practice Charge was pending under Docket No. CO-81-69 and that, thus, a demand for negotiations was premature; all of which is alleged to be a violation of N.J.S.A. 34:13A-5.4(a)(1) and (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 June 7, 1982.2/ Thereafter, on June 15, 1982, prior to the filing by the Respondent of its Answer, the Charging Party filed a Motion for Summary Judgment with a supporting brief. On June 25, 1982 the Respondent filed its Answer on the merits. The Respondent filed its response to the Motion for Summary Judgment on July 12, 1982.

Pursuant to N.J.A.C. 19:14-4.8(a), the Chairman of the Commission referred the Charging Party's Motion for Summary Judgment to the instant Hearing Examiner under date of July 21, 1982. The Hearing Examiner issued his Decision and Order on the Charging Party's Motion for Summary Judgment on July 28, 1982, in which he granted the Charging Party's Motion for Summary Judgment: H.E. No. 83-2, 8 NJPER 498.

Thereafter, the Respondent filed exceptions and the Commission on November 18, 1982 reversed the Hearing Examiner's grant of summary judgment and remanded the matter for hearing and for further proceedings consistent with the Commission's decision: P.E.R.C. No. 83-65, 9 NJPER 19.

Following a prehearing conference on December 7, 1982, four hearing dates were scheduled. On the first day, January 17, 1983, the Charging Party presented no witnesses and elected to stand on the admitted facts in the Complaint and Answer, following which the Respondent orally made a Motion to Dismiss (Tr. 15). After oral argument the Hearing Examiner reserved decision pending the outcome of a Title 18A proceeding involving the same parties before the Commissioner of Education: OAL Docket No. EDU 1666-82, to be explicated more fully hereinafter.3/

SUMMARY OF THE TITLE 18A PROCEEDINGS

The Commissioner of Education proceedings date back to 1980 and involve the effort of the Association to secure reemployment rights for the 103 teachers who were terminated by the Respondent effective July 1, 1980 after having been employed since September 1979.

On April 10, 1982 Chief ALJ Howard H. Kestin entered a prehearing order in which he framed the issue before him as including the employment or reemployment rights of 103 teachers under Title 18A, who were employed by the Respondent in 1979-80: were they properly terminated and do they have rights of reemployment and, if so, what are their tenure and pension rights?

On June 23, 1982 Chief Judge Kestin denied the Respondent's Motion for Summary Judgment and permitted the Association ("Petitioner") to move for Partial Summary Judgment.

On January 26, 1984 Chief Judge Kestin granted the Association's Motion for Partial Summary Judgment, concluding that the Commissioner of Education had the authority to provide a remedy, based on his perception of fairness and equity since "educational services commissions" are a part of the State Department of Education. Thus, the Respondent's acts were subject to the supervisory jurisdiction of the Commissioner of Education. Further, Chief Judge Kestin concluded that the Respondent's teachers, who were terminated July 1, 1980 "...are recognized as having, in principle, rights of employment, reemployment, tenure accumulation, and pension membership..."

Following the filing of exceptions with the Commissioner of Education by the Respondent, the Commissioner on March 22, 1984 reversed Chief Judge Kestin, rejecting his conclusion that educational services commissions are creations of the State Board of Education. Thus, the Commissioner is not authorized to overturn actions of an educational services commission. The Commissioner remanded the matter to OAL for a full and immediate hearing on the merits.

ALJ Stephen G. Weiss issued an Initial Decision on August 15, 1984, after hearing, in which he concluded that the Respondent's action in terminating the employment of its teaching staff on July 1, 1980, and the contracting out to a third party, "...was not shown by petitioner (Association) to have been the product of bad faith..." The ALJ had also stated that the subcontracting was "...neither arbitrary, capricious, unreasonable nor otherwise the product of some malicious effort to deprive any teachers employed by it of their lawful rights..."

On October 9, 1984 the Commissioner of Education issued his Decision on Remand, in which he affirmed the findings and conclusions of ALJ Weiss. He accepted the ALJ's conclusion that the Respondent had not acted in "bad faith," but then considered the Association's additional contention that the terminated teachers had not received proper notice in April, May and July, 1980 pursuant to N.J.S.A. 18A:27-10-12, inclusive. These provisions refer to notice to non-tenured teaching staff, which the Commissioner concluded had been satisfied, notwithstanding that some of the original notices issued after April 30, 1980. The Association's appeal was "dismissed with prejudice."

Finally, on February 6, 1985, the State Board of Education issued a decision affirming the Commissioner for the reasons expressed by him.

* * *

Following the February 6th decision of the State Board of Education, supra, the Hearing Examiner advised counsel for the parties on February 14, 1985 that he would proceed to adjudicate the Respondent's Motion to Dismiss and would not await any further possible appeal by the Charging Party.

* * *

The Hearing Examiner makes the following Findings of Fact for the purpose of adjudicating the Respondent's Motion to Dismiss, which findings are based upon the Complaint and Answer, a stipulation fo counsel on January 17, 1983, and the relevant findings in the Commissioner of Education proceeding, supra:

1.	The Essex County Educational Services Commission is a public employer within the meaning of the Act, as amended, and is subject to its provisions.

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

3.	The Respondent is an educational body organized pursuant to N.J.S.A. 18A:6-52, and for the 1979-80 school year it employed 103 teachers for the delivery of direct services to non-
public school children pursuant to N.J.S.A. 18A:46-1 et seq. and N.J.S.A. 18A:46-19.1 et seq.

4.	In the Fall of 1979 the President of the Association requested in writing that the Respondent recognize it as the exclusive negotiating representative for its teachers and on December 13, 1979 the Respondent formally recognized the Association.

5.	The Respondent on April 25, 1980 notified 61 of its teachers that they would not be offered employment for the following year pursuant to N.J.S.A. 18A:27-10b.

6.	Between May 21 and June 24, 1980, the Respondent received notice that the Attorney General was of the opinion that it could not lawfully borrow money and, as a result, the Respondent on July 1, 1980 adopted a resolution effecting a total reduction in force as to the remaining teachers represented by the Association pursuant to N.J.S.A. 18A:28-9.

7.	The teaching services that were to have been provided by the Respondent for the 1980-81 school year were thereafter subcontracted to a private employer, Education & Training Consultants, Inc., which provided the said services for the 1980-
81 school year.

8.	In December 1980 the Charging Party instituted legal proceedings in the Superior Court, Chancery Division, Essex County, alleging that the subcontracting by the Respondent was ultra vires.

9.	On October 15, 1981, the Appellate Division, reversing the Superior Court, held that the Respondent's subcontracting services was ultra vires.

10.	The Respondent had entered into a second subcontract for the 1981-82 school year with Remedial Education & Diagnostic Services, Inc. ("READS") to provide teaching services.4/

11.	On October 22, 1981 counsel for the Charging Party requested in writing of counsel for the Respondent that it continue collective negotiations.

12.	On October 26, 1981 counsel for the Respondent declined the demand for negotiations as being premature in view of the pendency of an earlier Unfair Practice Charge, which had been filed by the Charging Party on September 18, 1980 and docketed as CO-81-69 (see footnote 2, supra).

13.	It was stipulated at the hearing on January 17, 1983 that after the Appellate Division decision of October 15, 1981, the Respondent hired its first teacher in or around October 30, 1981 (Tr. 51).

14.	As found in the Commissioner of Education proceeding, supra, the Commissioner held that the 103 teachers of the Respondent, who were terminated on or before July 1, 1980, were given proper notice under Title 18A, and further, that the Respondent had not acted in "bad faith" when it adopted its termination resolution on July 1, 1980. Additionally, the initial subcontract in 1980 was found to be legal and did not "deprive any teachers... of their lawful rights."

DISCUSSION AND ANALYSIS

The Applicable Standard on a Motion To Dismiss

The Commission in New Jersey Turnpike Authority, et al., P.E.R.C. No. 79-81, 5 NJPER 197 (1979), amplified upon the standard that it had enunciated in Township of North Bergen, P.E.R.C. No. 78-29, 4 NJPER 15 (1977) with respect to the applicable standard on a Motion to Dismiss made at the conclusion of the Charging Party's case. The Commission there restated that it utilizes the standard set forth by the New Jersey Supreme Court in Dolson v Anastasia, 55 N.J. 2 (1969). The Commission observed that:

...Therein the Court declared that when ruling on a motion for involuntary dismissal (at the close of the plaintiff's case) the trial court 'is not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the party opposing the motion' (emphasis added). Unlike a number of other jurisdictions, New Jersey Courts have consistently held that before a motion for involuntary dismissal will be granted the moving party must demonstrate that not even a scintilla of evidence exists to support the plaintiff's case. Thus, while the process does not involve the actual weighing of evidence...some consideration of the worth of the evidence presented may be necessary. This is particularly true in the administrative context where evidence, which would ordinarily be ruled inadmissible by a trial court may, under In re Application of Howard Savings Bank, 143 N.J. Super. 1 (App. Div. 1976), be allowed in at an administrative hearing... (5 NJPER at 198) (Emphasis supplied).

Having set forth the applicable standard on a Motion to Dismiss at the conclusion of the Charging Party's case, the Hearing Examiner now turns to the evidence presented by the Charging Party in light of the above standard.

The Respondent's Motion To Dismiss

Is Granted

Clearly, the factual situation presented in this case is unique among cases filed with the Commission since there is no applicable Commission precedent. Thus, resort must be had to the decisions of the Federal Courts and the National Labor Relations Board, the propriety of which has been recognized by the New Jersey Supreme Court most recently in Bridgewater Township v. Bridgewater Public Works Association, 95 N.J. 235, 240, 241 (1984).

When the Association was voluntarily recognized as the exclusive representative of the Respondent's teachers in December 1979, that recognition created a rebuttable presumption of continuing majority status: NLRB v. Carilli, 648 F.2d 1206, 1214, 107 LRRM 2961, 2968 (9th Cir. 1981). In order to overcome this presumption, an employer, in the normal situation, bears the burden of establishing a reasonable good faith doubt of continuing majority support: Zim's Foodliner, Inc. v. NLRB, 495 F.2d 1131, 85 LRRM 3019, 3024 (7th Cir. 1974). The reason that the Hearing Examiner used the phrase "in the normal situation" is that this case does not involve the normal situation since the Respondent validly terminated all of its 103 teachers as of July 1, 1980 and thereafter did not again employ any teachers until October 30, 1981. Additionally, as found by the Commissioner of Education, supra, the Respondent did not act in "bad faith" vis-
a-vis the Association at that time. Thus, there was a hiatus of 16 months during which no teachers were employed by the Respondent.

It is true, as contended by the Charging Party, that the Respondent counsel's letter of October 26, 1981 did not allege a loss of majority support by the Association, coupled with a good faith doubt as a basis for declining to enter into negotiations, nor did counsel assert that Respondent had employed no teachers as of that date. Instead, counsel referred to the earlier Unfair Practice Charge, then still pending, indicating that negotiations would be premature.

In concluding that the Charging Party's evidence of an alleged violation of Subsection (a)(5) of the Act is less than a scintilla, the Hearing Examiner first cites Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263, 58 LRRM 2657 (1965). This case was decided on an alleged violation of Section 8(a)(3) of the National Labor Relations Act, which is analogous to Subsection (a)(3) of our Act. Although a Section 8(a)(5) violation was alleged in Darlington, it was not involved in the decision. There were two aspects of the decision, the first involving the complete closing of its operation by an employer, and the second involving a partial closing. It is the complete closing aspect that the Hearing Examiner considers in view of what occurred herein on July 1, 1980. There the Supreme Court stated:

...We hold here only that when an employer closes his entire business, even if the liquidation is motivated by vindictiveness towards the union, such action is not an unfair labor practice... (58 LRRM at 2661).

The Court also said that: "...The closing of an entire business, even though discriminatory, ends the employer-employee relationship; the force of such a closing is entirely spent as to that business when termination of the enterprise takes place" (58 LRRM at 2661) (Emphasis supplied).

Another Federal Court of Appeals case, which is pertinent to the factual situation herein is NLRB v. AAA Electric, Inc., 472 F.2d 444, 82 LRRM 2326 (6th Cir. 1973). This case involved the effect to be given to a prehire agreement under Section 8(f) of the NLRA, which permits construction industry employers and unions to enter into an agreement before the employer has hired any employees. Employer A, the predecessor to AAA Electric, had not formally recognized the union when it entered into a prehire agreement whereby the union would supply it with qualified employees. Over a considerable period, Employer A's employees engaged in a slowdown, as a result of which Employer A terminated all of its employees. AAA Electric, the successor to Employer A, hired some of A's employees. The Court, in disagreeing with an NLRB finding of violation, inter alia, of Section 8(a)(5), found that there had been no formal recognition of the union by Employer A and that AAA Electric, as a successor employer, was not obligated to bargain: Davenport Insulation Co., 184 NLRB No. 114, 74 LRRM 1726 (1970).

Although AAA Electric is distinguishable from the instant case inasmuch as the Association herein was voluntarily recognized, the Court in AAA Electric also assumed arguendo that even if the Section 8(f) prehire agreement was construed as having granted recognition to the union (by Employer A), "...the valid economic termination of all of the employees nevertheless would result in the loss of the recognition. There is no duty to bargain with a Union representing employees who were validly discharged." (82 LRRM at 2329) (Emphasis supplied).

The Hearing Examiner finds the cases of Darlington and AAA Electric highly persuasive and supportive of the Hearing Examiner's conclusion that given the valid termination of the Respondent's 103 teachers as of July 1, 1980, and the fact that it did not resume its operation until in or around October 30, 1981, the Association lost its majority status as the exclusive representative of the Respondent's teachers. Recall that in Darlington the Supreme Court stated that a total closing "...ends the employer-employee relationship..." and that in AAA Electric the Court stated that a valid economic termination of all employees "...would result in the loss of the recognition..."

The Hearing Examiner notes that the Charging Party in a reply letter brief, dated September 10, 1982, stated that it agreed that the Respondent was not a "successor employer to READS" but rather "...is more properly characterized as an employer which ceased operations and then resumed at a later date..." (p. 5). Thus, the Charging Party has acknowledged that the Respondent ceased its operations on July 1, 1980 and did not resume operations again until a "later date," which, on the instant record, would be on or about October 30, 1981.

The cases cited by the Charging Party, which involve a temporary closing by an employer in order to avoid or defeat the union, have no application to the instant case. Here we are presented with a valid 100% termination of operations and a resumption 16 months later, all of which is untainted by any anti-union animus or illegal conduct on the part of the Respondent. Compare: NLRB v. Southern Plasma Corp., 626 F.2d 1287 (5th Cir. 1980) and HLH Products, etc. v. NLRB, 396 F.2d 270 (7th Cir 1968).

Also, there is not involved in this case any action or conduct by the Respondent, which operated to undermine or defeat the Association's majority status. Thus, the cited case of NLRB v. Alterman Transport Lines, Inc., 587 F.2d 212, 228 (5th Cir. 1979) has no application.

Further, the cases cited by the Charging Party, which involve extensive turnover of employees, are not germane since those employers had continuity of operation: Pioneer Inn Associates v. NLRB, 578 F.2d 835 (9th Cir. 1978) and NLRB v. Washington Manor, Inc., 519 F.2d 750 (6th Cir. 1975).

Both parties cite for different reasons the New Jersey Supreme Court decision in Galloway Township Board of Education v. Galloway Township Association of Educational Secretaries, 78 N.J. 1 (1978). It will be recalled that in that case the collective negotiations unit consisted of seven secretaries and the Association was the majority representative. During negotiations six of the seven secretaries separated from employment with the Board. The vacancies created were filled by new employees, the Court stating: "...Thus, the job titles which were included in the negotiating unit represented by the Association continue to exist, although different employees hold the jobs at present..." (78 N.J. at 17). No representation proceeding had been initiated to oust the Association even though the certification year long since expired.

The Board in Galloway, supra, had persuaded the Appellate Division that the resignation of the six secretaries was tantamount to a dissolution of the Association and that the case was moot. The Supreme Court reversed, concluding that the fact that six of the seven original employees in the unit were no longer employed was not conclusive of the dissolution of the employee organization. The Court clearly took cognizance of the fact that although six employees were replaced, a unit of seven employees continued to exist, notwithstanding the change in the identify of the employees. Thus, at all times, there was continuity of employees in job titles that had existed since the Association's certification.

Plainly, the facts in Galloway clearly distinguish the situation there from that of the case at bar. Unlike Galloway, the 103 teachers employed by the Respondent were terminated as of July 1, 1980 and no employees or job classifications continued in the recognized collective negotiations unit.

The next issue to be considered is the effect of the October 22, 1981 request of counsel for the Charging Party to the Respondent that it continue collective negotiations, and the response of counsel for the Respondent on October 26, 1981 declining to do so. On neither date had the Respondent employed any teachers, the first teacher not having been hired until in or around October 30, 1981. The Charging Party, in a Brief dated August 25, 1982, states that once the Respondent began hiring employees it "...ended the last possibility of a legitimate defense to a duty to negotiate, and the fact that the demand (October 22, 1981) may have preceded the first effective steps taken to put bodies into teaching positions should not be accorded any significance..." (pp. 7, 8).

Unfortunately for the Charging Party, the Hearing Examiner perceives that the time relationship between a demand for recognition and the achieving of a majority status is critical and cannot be disregarded. In the discussion which follows, the Hearing Examiner construes the Charging Party's written request for negotiations on October 22, 1981 as tantamount to a demand for recognition given the total cessation of operations by the Respondent as of July 1, 1980.

In NLRB v. Arkansas Grain Corp., 390 F.2d 824, 67 LRRM 2773 (8th Cir. 1968), a union, in an initial organizing situation, made a demand for recognition on January 27, 1966, at a time when it lacked a majority, having only 35 authorization cards out of a total of 73 employees. The union again, on February 1st, made a second demand for recognition when it had 36 authorization cards, still lacking a majority. In its second demand the union indicated its willingness to submit to a card check and stated that its request for recognition should be treated as a "continuing demand." On February 3rd, the union received its 37th authorization card, giving it a bare majority but there was no further demand made for recognition. By February 7th, three more employees had signed cards, bringing the total number of authorization cards to 40. The NLRB, on the theory of "continuing demand for recognition," found a violation of Section 8(a)(5) when the employer refused to bargain. In denying enforcement, the Court held that the employer did not refuse to recognize and bargain with the union since the union did not represent a majority at the time of the demand for recognition. The Court said: "...Absent a majority representation, the Union's demands were meaningless and therefore ineffective to form a basis upon which to predicate an unlawful refusal to bargain....An employer's motivations behind his refusal to bargain become relevant only if in fact a majority representation does exist...." (67 LRRM at 2776) (Emphasis supplied).

The Hearing Examiner concludes that Arkansas Grain affords a sufficient basis to reject the Charging Party's contention that even though there were no teachers employed by the Respondent when the Charging Party made its demand for negotiations (recognition) that fact "...should not be accorded any significance..." The Hearing Examiner believes that the absence of teachers in the Respondent's employ on October 22nd is legally significant. In so concluding, the Hearing Examiner has considered and rejects the reasoning of a case cited by the Charging Party, which involves the timing of demands for recognition: NLRB v. Barney's Supercenter, Inc., 296 F.2d 91, 49 LRRM 2100 (3rd Cir. 1961).

In Barney's, the union obtained 10 authorization cards out of a total employee complement of 26 and made a demand for recognition on May 26, 1958. The employer begged time to speak to his associates before action could be taken. On June 6th the union secured five additional cards for a total of 15, which constituted only a bare majority since the employer had increased its work force to 29 employees on that date. On the same date, June 6th, the union spoke to various officials of the employer and recognition was not granted (also, there was no separate demand on that date). Thereafter, on June 15th, 17 employees voted to strike. The employer argued that it did not refuse to bargain since the union failed to make an unequivocal independent bargaining demand after receiving majority status. The union had only offered a card check, which was rejected. The Court held that a request to bargain need not follow a specific form so long as there is clear communication and the employer understands that a demand is being made. The Court considered the fact that the union had made its initial request for recognition before it had obtained a majority, and that "...such a request, although invalid when made, certainly would be of significance in interpreting the acts of the parties once majority status is achieved." (49 LRRM at 2102). The Court went on to note that the June 15th strike was a factor indicating that the employer clearly knew that a majority of its employees were requesting bargaining.

* * *

In conclusion, the Hearing Examiner recapitulates that the basis for his granting the Respondent's Motion to Dismiss is that there is not a scintilla of evidence that the Respondent was legally motivated when, due to the opinion of the Attorney General that it could not lawfully borrow money, it adopted a resolution on July 1, 1980 effecting a total reduction in force of its 103 teachers represented by the Association (see Finding of Fact No. 6, supra). The Commissioner of Education proceeding determined that the 103 teachers Riffed by the Respondent were given proper notice under Title 18A, that the Respondent did not act in "bad faith" and that the subcontracting out in July 1980 was legal and did not deprive any teachers of their lawful rights (see Finding of Fact No. 14, supra). Further, the Respondent had no teachers in its employ when the Charging Party made a demand for collective negotiations on October 22, 1981 (see Findings of Fact Nos. 11 and 13, supra). Thus, the demand of the Charging Party was invalid and of no effect.

Thus, upon the facts established by the pleadings, the pertinent facts established in the Commissioner of Education proceeding, and the stipulation of counsel that the first teacher was not hired until in or around October 30, 1981, the Hearing Examiner makes the following:

ORDER

Upon the record heretofore made, the Hearing Examiner grants the Respondent's Motion to Dismiss and the Complaint is dismissed in its entirety.

/s/Alan R. Howe

Hearing Examiner

DATED:	March 4, 1985

Trenton, New Jersey