SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Mount Holly Township Board of Education v. Mount Holly Township Education Association (A-24-08)
Argued January 5, 2009 -- Decided June 24, 2009
RABNER, CJ., writing for a majority of the Court.
The Mount Holly Township Board of Education (Board) is a public school board of education and, as such, is a public employer within the meaning of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -39, (the Act). Mount Holly Township Education Association (Association) is a public employee representative under the Act, and is the sole representative for collective negotiations about terms and conditions of employment for custodians and certain other school employees. The Board and the Association entered into a collectively negotiated agreement (CNA) for the period from July 1, 2004 through June 30, 2007. Its provisions applied to all employees in the negotiation unit, including custodians and maintenance workers.
The CNA contains a "just cause" provision in Article IX (B) that states in relevant part that no employee shall be discharged without just cause and that any such action is subject to the grievance procedures set forth in the CNA. Article XV (A) (3) specifically excludes non-renewal of a contract for a non-tenured employee from the definition of grievance, defined in Article XV (A) (1). There is no comparable exclusion for the termination or discharge of an employee mid-contract. In addition, an aggrieved employee is to follow a five-step grievance process outlined in Article XV (C). The grievance process progresses from an initial discussion with an immediate supervisor to binding arbitration. Further, Article IX (E) (3) affords all employees who are not renewed or who are terminated, as well as those who are disciplined, the right to request a statement of reasons and a hearing before the Board.
Juan Gonzalez was hired by the Board as a non-tenured custodian/maintenance worker. Prior to starting in that position, Gonzalez signed a standard, individual contract for employment, prepared by the Board, covering the period from July 1, 2005 through June 30, 2006. The contract expressly provided that it could be terminated at any time by either party on fourteen days' written notice. Months after he began working, Gonzalez was accused of striking another custodian. The Board held a disciplinary hearing on January 20, 2006, and terminated Gonzalez in a letter that same day. The letter of termination stated that, in accordance with his employment contract, he would be terminated effective February 3, 2006. On Gonzalez's behalf, the Association filed a timely grievance with the Board, challenging the decision to terminate and claiming it was done without just cause. After the Board denied the grievance, the Association filed a request for binding arbitration, thereby seeking a hearing on the facts of Gonzalez's discharge.
On April 24, 2006, the Board filed an action in the Chancery Division seeking to restrain arbitration. The Board contended that because Gonzalez was terminated under the fourteen-day-notice provision of his individual employment contract, the matter was not arbitrable under the CNA. The Chancery Division granted the Board's motion to restrain arbitration permanently, noting that the individual employment contract's termination-on-notice clause did not conflict with the CNA's just-cause provision.
The Association appealed and on April 21, 2008, the Appellate Division affirmed the trial court's judgment, relying heavily on the ruling in Pascack Valley Regional High School Board of Education v. Pascack Valley Regional Support Staff Ass'n, which also involved a custodian accused of inappropriate behavior at work. In Pascack Valley, the CNA specifically provided that "[a]ny dismissal or suspension shall be considered a disciplinary action and shall at the option of the custodian…be subject to the Grievance Procedure." The Court in Pascack Valley concluded that arbitration was required for dismissal of a custodian under the specific terms of the CNA. In this case, the Appellate Division found it dispositive that the above-quoted language was not present in the Mount Holly CNA, language the panel concluded was critical to the Court's holding in Pascack Valley. In the absence of identical or comparable language, the appellate panel found that the Board was entitled to terminate Gonzalez on fourteen days' notice under the individual employment agreement, without showing just cause or having its termination decision subject to the CNA's grievance procedure. The panel further noted that Gonzalez could obtain a statement of reasons for his termination and a hearing under Article IX (E) (3) of the CNA.
The Supreme Court granted certification.
HELD: The Court reaffirms the principles articulated in Lullo v. International Ass'n of Fire Fighters and Troy v. Rutgers: in general, collective agreements supersede individual contracts. To the extent provisions in an individual employment contract conflict or are inconsistent with terms in a collectively negotiated agreement (CNA), and diminish or interfere with rights provided by the CNA, the language in the individual contract must yield to the CNA. Gonzalez's employment contract conflicted with the CNA and diminished its specific terms by depriving him of the right to arbitration; therefore, on remand, Gonzalez is entitled to a hearing before an arbitrator to address the grievance filed.
1. The State Constitution guarantees public employees the right to organize and to present or make known, through representatives of their choosing, their grievances to the State or an agency of the State. In addition to the constitutional provision, the Legislature has enacted a body of laws governing labor relations in the public and private sectors. The New Jersey Employer-Employee Relations Act provides that public employees may select representatives to act on their behalf as the exclusive representatives for collective negotiation regarding terms and conditions of employment. The Act helped achieve the purpose of banding employees together through "the medium of collective agreement," which was intended "to supersede separate agreements with employees and to substitute a single compact with terms which reflect the strength, negotiating power and welfare of the group." (Pp. 7-10)
2. In supporting collective agreements over individual ones, this Court in Lullo relied heavily on a United States Supreme Court case which held that individual contracts cannot subtract from collective ones. In addition, in Troy, the Court upheld individual employment agreements that did not conflict with the CNA or diminish any rights provided. The Court reaffirms those principles: in general, collective agreements supersede individual contracts. To the extent provisions in an individual employment contract conflict with or are inconsistent with terms in a collectively negotiated agreement, and diminish or interfere with rights provided in the negotiated agreement, the language in the individual contract must yield to the collective agreement. (Pp. 10-12)
Gonzalez's individual employment contract conflicts with and diminishes his rights under the CNA and must yield to the collective agreement. Therefore, he is entitled to an arbitration hearing. Under the individual contract, the Board can terminate Gonzalez's employment on fourteen days' notice. Under the CNA, Gonzalez has the right to remain employed for the full one-year term of his individual contract unless just cause for dismissal exists. He is also entitled to challenge the basis for dismissal through arbitration. These two approaches cannot co-exist; the individual agreement diminishes and interferes with Gonzalez's rights under the CNA. In reaching the contrary result, the Appellate Division placed too much emphasis on the language used in the CNA in Pascack Valley. CNAs need not parrot the language used in the contract in Pascack Valley; no special phrases or formulaic words are required. The proper course is to look at the words agreed to by the parties to see if a conflict exists. Moreover, requiring arbitration in this case is consistent with the Legislature's amendment to N.J.S.A. 34:13A-5.3 extending a presumption in favor of arbitration to public employees. (pp. 12-18)
4. The opportunity for a statement of reasons and a hearing under Article IX (E) (3) of the CNA supplements, but does not replace, the right to grievance arbitration. (Pp. 18-19)
Judgment of the Appellate Division is REVERSED and the matter is REMANDED for arbitration.
JUSTICE RIVERA-SOTO, joined by Justices LaVecchia and Hoens, dissents for the following reasons: the termination of Gonzalez's employment contract was procedurally and substantively proper; there is no conflict between Gonzalez's individual employment contract and the CNA; termination does not fall within the definition of a "grievance" necessary as a condition precedent to trigger the grievance procedure under the CNA; Gonzalez never invoked the "employee rights" available to him under the CNA and as a matter of State law; and Gonzalez never sought to vindicate his rights via the appeals procedure provided to him.
JUSTICES LONG, ALBIN and WALLACE join in CHIEF JUSTICE RABNER'S opinion. JUSTICE RIVERA-SOTO filed a separate dissenting opinion in which JUSTICES LaVECCHIA and HOENS join.