(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).
Argued September 26, 2995 -- Decided January 31, 1995
HANDLER, J., writing for a unanimous Court.
The primary issue on appeal is whether procedures, including binding arbitration, determining minor
discipline for sexual harassment complaints in the workplace are within the scope of collective negotiations.
A disciplinary action was taken against a supervisory employee working for the New Jersey Turnpike
Authority (Authority), a governmental agency. The disciplinary action was based on a claim that the
supervisor had sexually harassed a subordinate employee. The claim was made in accordance with the
Authority's Sexual Harassment Policy. Following a hearing, the Authority's sexual harassment committee
concluded that the supervisor had sexually harassed the claimant and recommended a three-day suspension
without pay.
The supervisory employee was a member of the New Jersey Turnpike Supervisors Association
(Association), an employee union. The Association had entered into a Collective Negotiations Agreement
(CNA) with the Authority that provided disciplinary procedures, including binding arbitration of grievances.
The Association filed a grievance on behalf of the supervisor against the Authority, alleging that the
Authority violated the disciplinary procedures of Article XV of the CNA. The Authority refused to hear the
grievance or submit it to arbitration, contending that because the discipline was based on a claim of sexual
harassment, the appropriate procedures for determining the discipline were governed by the New Jersey Law
Against Discrimination (LAD) and, therefore, were beyond the scope of collective negotiations and were
unenforceable.
Following a request for arbitration by the Association, the Authority submitted a Scope of
Negotiations claim to the Public Employment Relations Commission (PERC), claiming that the grievance
was preempted by the LAD and Executive Order No. 88 that required state employers to adopt policies to
eradicate sexual harassment in the workplace. PERC appointed an arbitrator who susatined the grievance.
PERC also sustained the grievance, determining that the disciplinary procedures applicable to sexual
harassment charges were negotiable and that a grievance related to those procedures was arbitrable under
the CNA.
The Authority appealed PERC's decision to the Appellate Division, which affirmed the conclusion
that the disciplinary procedures involving charges of sexual harassment were within the scope of collective
negotiations and that the grievance relating to those procedures was subject to binding arbitration under the
collective negotiations agreement.
The Supreme Court granted the Authority's petition for certification.
HELD: State laws and policies that prohibit discrimination by sexual harassment do not statutorily preempt or supersede the statutory authority of public employees and their representatives to negotiate disciplinary procedures, including binding arbitration, for imposing minor discipline based on workplace sexual harassment charges. Moreover, the negotiation of disciplinary procedures, including binding arbitration, for the imposition of discipline based on claims of sexual harassment is
specifically authorized as a negotiable subject and does not impinge on or implicate an inherent
managerial prerogative.
1. N.J.S.A. 34:13A-5.3 of the Public Employer-Employee Relations Act (Act) clearly provides, consistent
with express legislative intent, that disciplinary procedures be subject to collective negotiations and that those
procedures may include binding arbitration. Under N.J.S.A. 34:13A-5.3 and Article XV of the CNA, binding
arbitration has been authorized to resolve a dispute over the disciplinary procedures that are applicable for
imposing minor discipline, which under the CNA includes suspensions for up to five days. (pp. 6-11)
2. Under the Act, if an aggrieved employee has an alternative statutory remedy against alleged unjust
discipline, then binding arbitration of that grievance, otherwise authorized as part of negotiated disciplinary
procedures, may not be invoked. The supervisor has no appeal rights under the LAD or any other statute in
respect of his minor discipline. Therefore, under N.J.S.A. 34:13A-5.3, the specific and narrow statutory
exemption of disciplinary procedures from collective negotiation is not applicable to disciplinary procedures
invoked in a claim based on sexual harassment. (pp. 11-13)
3. An employer's obligation to adopt and implement policies against sexual harassment is distinct from the
employees' ability to seek review of disciplinary actions based on allegations of sexual harassment. The duty
imposed by the LAD, Executive Order No. 88 and Lehmann on public employers to enact and enforce
policies and procedures to eliminate sexual harassment discrimination in the workplace is not undermined by
a collectively negotiated agreement requiring fair disciplinary procedures and permitting neutral review when
an employee is accused of sexual harassment. So long as the substantive standards defining sexual
harassment are applied, there is no fundamental inconsistency between the Authority's Sexual Harassment
Policy and the negotiated disciplinary procedures invoked to determine whether sexual misconduct occurred
and, if so, the appropriate discipline. Here, the negotiated disciplinary procedures were applicable.
(pp.13-21)
4. Terms and conditions of public employment are negotiable only if the subject: 1) intimately and directly
affects the work and welfare of public employees; 2) has not been preempted by statute or regulation; and 3)
is a matter on which negotiated agreement would not significantly interfere with the exercise of inherent
management prerogatives pertaining to the determination of governmental policy. In applying that three-pronged test, the Court finds that: affording employees with impartial review of disciplinary disputes affects
the work and welfare of public employees; the disciplinary procedures are not preempted by statute; and
application of disciplinary procedures for minor disciplines will not significantly interfere with the
governmental policy of eradicating sexual harassment from the workplace and enforcing those policies.
(pp. 21-26)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES O'HERN, GARIBALDI, and STEIN join in JUSTICE
HANDLER'S opinion. JUSTICES POLLOCK and COLEMAN did not participate.
SUPREME COURT OF NEW JERSEY
A-
20 September Term 1995
NEW JERSEY TURNPIKE AUTHORITY,
Petitioner-Appellant,
v.
NEW JERSEY TURNPIKE SUPERVISORS
ASSOCIATION,
Respondent-Respondent.
Argued September 26, 1995 -- Decided January 31, 1996
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
276 N.J. Super. 329 (1994).
Michael K. Furey argued the cause for
appellant (Riker, Danzig, Scherer, Hyland &
Perretti, attorneys; Mr. Furey and James P.
Anelli, on the briefs).
Steven A. Kunzman argued the cause for
respondent New Jersey Turnpike Supervisors
Association (Bivona Cohen, attorneys; John E.
Coley, Jr., Judith A. Babinski, and Julienne
S. Duncan, on the brief).
Robert E. Anderson, General Counsel, argued
the cause for respondent New Jersey Public
Employment Relations Commission.
The opinion of the Court was delivered by
HANDLER, J.
In this case, disciplinary action was taken against a supervisory employee based on a claim that he had sexually harassed a subordinate employee. Both individuals worked for the
New Jersey Turnpike Authority, a governmental agency. The
supervisor was a member of an employee union, which had entered
into a collective negotiations agreement that provided
disciplinary procedures, including the binding arbitration of
grievances.
After the imposition of discipline, the supervisor filed a
grievance, claiming that the Authority failed to follow
disciplinary procedures required by the agreement. The Authority
refused to hear the grievance or submit it to arbitration,
contending that because the discipline was based on a claim of
sexual harassment, the appropriate procedures for determining the
discipline were governed by the Law Against Discrimination and,
therefore, were beyond the scope of collective negotiations and
were unenforceable.
That contention is the central issue on this appeal. A
related issue is whether the imposition of employee discipline
based on sexual harassment in the workplace implicates matters of
managerial prerogative and, therefore, disciplinary procedures
established through collective negotiations, including binding
arbitration, cannot be applied in such a case.
The New Jersey Turnpike Authority ("Turnpike Authority" or "Authority"), a public administrative agency of the State of New Jersey, N.J.S.A. 27:23-1 to -40, is a public employer within the meaning of the "New Jersey Employer-Employee Relations Act."
N.J.S.A. 34:13A-3(c) ("Act"). The Authority entered into a
Collective Negotiations Agreement ("CNA") with the New Jersey
Turnpike Supervisors Association ("Supervisors Association"), an
organized labor representative within the meaning of the Act,
N.J.S.A. 34:13A-3(d), and the collective negotiations
representative for the toll supervisors employed by the
Authority. The CNA, covering the term from July 1991 through
June 1994, provides binding arbitration for minor disciplinary
determinations, including suspensions not exceeding five days.
On January 15, 1992, the Authority received notice of a
claim filed by one of its female toll collectors ("claimant")
alleging that her immediate supervisor, Patrick Gabriele
("supervisor"), sexually harassed her. The supervisor was
employed by the Authority as a Toll Plaza Supervisor and was a
member of the Supervisors Association. According to the
claimant, on January 11, 1992, she misplaced a pass that the
Authority's work rules required her to have in her possession.
The claimant informed the supervisor that she misplaced her pass.
The claimant and the supervisor then searched for the pass in the
claimant's toll booth. In the course of the search, the claimant
went down on her hands and knees to look on the floor. While the
claimant was in that position, the supervisor allegedly
exclaimed, "Hey, look she's on her hands and knees to me," and at
the same time, he allegedly gyrated his hips mimicking a sexual
motion. Unbeknownst to the supervisor, he was seen by another
toll collector working in an adjacent toll booth. When the
supervisor realized that his actions were being observed, he
allegedly stated, "You have to have a sense of humor on the
Turnpike to survive."
The toll collector who witnessed the supervisor's behavior
informed the claimant what she had seen. The claimant allegedly
became traumatized to the extent that she later vomited and
suffered from severe muscle spasms.
The claimant filed a sexual harassment complaint against the
supervisor in accordance with the Turnpike Authority's Sexual
Harassment Policy. Pursuant to that policy, the Authority
conducted an internal investigation of the incident. When the
investigation concluded, the Authority notified the supervisor
and the Supervisors Association that a committee would convene a
special sexual harassment hearing.
At that hearing, all witnesses to the incident were
permitted to give a statement about what they observed. The
Authority permitted the supervisor, the supervisor's attorney and
his union representative from the Supervisors Association to
attend the hearing. Although the supervisor and the Supervisors
Association were permitted to present factual witnesses on their
behalf, they were not permitted to present any character
witnesses on behalf of the supervisor and the supervisor's legal
counsel was not permitted to cross-examine any of the factual
witnesses.
The Authority's sexual harassment committee concluded that
the supervisor had in fact committed an act of sexual harassment
in violation of the Authority's policies, work rules, and
procedures. Pursuant to Article XV of the CNA, the committee
recommended a three-day suspension without pay. The supervisor
was informed that he could appeal the recommended discipline to
the Commissioners of the Authority. The supervisor appealed and
the Commissioners upheld the three-day suspension.
The Supervisors Association filed a grievance on behalf of
the supervisor against the Turnpike Authority, alleging that the
Authority violated the disciplinary procedures of Article XV of
the CNA. Specifically, the Supervisors Association complained
that the Authority did not permit the supervisor's attorney to
call character witnesses or cross-examine the factual witnesses.
The Authority issued the following response to grievance:
This is an inadequate statement of grievance.
However, if this refers to the sexual
harassment complaint, this matter is pre-empted by federal and state statutes and is
not grievable. There is no violation of the
Supervisors-Association contract.
Following a request for arbitration by the Supervisors
Association, the Authority submitted a Scope of Negotiation claim
to the Public Employment Relations Commission ("PERC"), claiming
that the grievance was pre-empted by the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-1 to -42 ("LAD"), and Executive
Order No. 88, which require state employers to adopt policies to
eradicate sexual harassment from the workplace. PERC, however,
appointed an arbitrator and denied the Turnpike Authority's
request that the arbitration be restrained as non-arbitrable.
The issue of arbitrability was simultaneously considered by
PERC and the arbitrator. PERC sustained the grievance, as did
the arbitrator shortly thereafter. Both the Commission and the
arbitrator determined that the disciplinary procedures applicable
to charges of sexual harassment were negotiable and that the
grievance relating to those procedures was arbitrable under the
collective negotiations agreement.
The Turnpike Authority then appealed PERC's decision to the
Appellate Division, which affirmed the determination that the
disciplinary procedures involving a claim of sexual harassment
were within the scope of collective negotiations and that the
grievance relating to those procedures was subject to binding
arbitration under the collective negotiations agreement.
276 N.J. Super. 329 (1994). This Court granted the Turnpike
Authority's petition for certification.
139 N.J. 441 (1995).
The major issue is whether procedures, including binding arbitration, determining minor discipline for sexual harassment complaints in the workplace are within the scope of collective negotiations. Resolving that issue depends on the legislative treatment of the subject, and, more specifically, on whether the negotiation of disciplinary procedures relating to sexual harassment complaints is authorized or prohibited by statute.
The first part of that inquiry must be directed to the statutory treatment of disciplinary procedures generally as a
permissible subject of collective negotiations. The answer is
found in the plain language of the Public Employer-Employee
Relations Act, which clearly requires negotiation over
disciplinary disputes and disciplinary review procedures. The
language further specifies that disciplinary review procedures
may provide binding arbitration as a means of resolving disputes.
N.J.S.A. 34:13A-5.3 states:
[T]he public employer shall meet at
reasonable times and negotiate in good faith
with respect to grievances, disciplinary
disputes, and other terms and conditions of
employment.
Public employers shall negotiate written
policies setting forth grievance and
disciplinary review procedures by means of
which their employees or representatives of
employees may appeal the interpretation,
application or violation of polices,
agreements, and administrative decisions,
including disciplinary determinations,
affecting them, provided that such grievance
and disciplinary review procedures shall be
included in any agreement entered into
between the public employer and the
representative organization. Such grievance
and disciplinary review procedures may
provide for binding arbitration as a means
for resolving disputes. . . . Grievance and
disciplinary review procedures established by
agreement between the public employer and the
representative organization shall be utilized
for any dispute covered by the terms of such
agreement. (emphasis added).
The legislative history of this provision of the statute ratifies the unmistakable import of its plain language. Before 1982, the relevant section of N.J.S.A. 34:13A-5.3 merely stated that "the public employer shall meet at reasonable times and
negotiate in good faith with respect to grievances and terms and
conditions of employment." Construing that section, the
Appellate Division determined that no aspect of the disciplinary
process between public employers and employees was negotiable.
State v. Local 195 IFPTE,
179 N.J. Super. 146, 153 (1981)
(stating "public employers cannot effectively and efficiently
perform their governmental functions and fulfill their
obligations to the public if they do not have the power to
discipline employees without the encumbrances of collective
negotiations and binding arbitration"), certif. denied,
89 N.J. 433 (1982); Jersey City v. Jersey City Police Officers'
Benevolent Ass'n,
179 N.J. Super. 137 (App. Div. 1981) (same),
certif. denied,
89 N.J. 433 (1982).
The Legislature specifically amended the statute to
countermand the result reached by Local 195 IFPTE. A statement
on February 1, 1982, by the sponsors of the amendment to N.J.S.A.
34:13A-5.3 confirms that express purpose.
In June of 1981 the Appellate Division
. . . ruled that disciplinary determinations
did not fall within the scope of mandatory
negotiations and that collective agreements
could not, therefore, provide for the
submission to binding arbitration of
contested disciplinary actions.
This bill would overturn [Local 195 IFPTE] so as to give meaning to the State Constitution's guarantee of the right of public employees to "present . . . their grievances and proposals through representatives of their own choosing." The proposed legislation merely provides that administrative decisions affecting public employees -- already clearly recognized by the court as negotiable -- will be understood
to encompass "disciplinary determinations"
and that disciplinary review procedures as
well as disciplinary disputes in general,
will be a required subject of negotiations as
a term and condition of employment.
Disciplinary actions have an unquestionably
intimate and direct effect on the work and
welfare of public employees and should be
viewed as only indirectly related to the
right of public officials to determine
substantive governmental or educational
policy. The above amendments also empower
public employers to negotiate binding
arbitration procedures for disciplinary
disputes. Under this bill, contractual
provisions concerning disciplinary disputes
could cover such basic issues as a review of
the guilt or innocence of an employee with
respect to both major and minor disciplinary
infractions, and the standards for, and
reasonableness of, any penalty imposed.
The proposed legislation does not
challenge the exclusive power of the employer
to initiate discipline or discharge a public
employee for misconduct, incompetency or
inefficiency so as to maintain an adequate
and effective work force. It merely assures
organized public employees that procedures to
review such important considerations as the
fairness of disciplinary actions can be
available to them through negotiations, and
may be examined by an independent third
party, if the parties so agree in their
contract.
[Assembly, No. 706, Statement
Appended to Bill Amending P.L.
1968, c. 303 (Feb. 1, 1982)
(emphasis added) (citation
omitted).]
We conclude that N.J.S.A. 34:13A-5.3 clearly provides, consistent with the expressed intention of the Legislature, that disciplinary procedures shall be subject to collective negotiations and that those procedures may include binding arbitration. See County College of Morris Staff Ass'n v. County
College of Morris,
100 N.J. 383, 397 (1985) (recognizing that a
public employer may contractually agree to abide by principles of
procedural fairness, which include deferral to binding
arbitration, when determining an accused employee's guilt or
innocence).
Article XV of the CNA, entitled "Disciplinary Action,"
comports with the statutory authority for collective negotiation
and agreement over disciplinary review procedures, including
grievances and binding arbitration, specifically, in respect of
disputes involving minor discipline. The agreement provides:
In the exercise of Minor Discipline, the
employee who is alleged to be guilty of
violations of rules, regulations, or
procedures shall be served with a formal
notice and specification of the alleged
violation, which shall hereafter be referred
to as "Advisory Notice of Disciplinary
Action."
As a respondent, the Employee involved
shall be entitled to request in his defense
such witnesses as he may wish to have
present; the right of cross-examination of
all witnesses and the right to have made
available to him such records, files, and
documents as he may consider necessary to his
defense.
In the event the decision of the Executive
Director is unsatisfactory, the Association
may submit the matter to binding arbitration
pursuant to the rules of the Public
Employment Relations Commission. . . .
Thus, under N.J.S.A. 34:13A-5.3 and Article XV of the CNA, binding arbitration has been authorized to resolve the current
dispute over the disciplinary procedures that are applicable for
imposing minor discipline, which under the CNA includes
suspensions for up to five days.
The Turnpike Authority contends, further, that the otherwise
clear provisions of the New Jersey Employer-Employee Relations
Act and its collectively negotiated contract authorizing binding
arbitration of disciplinary grievances cannot be applied in a
case in which discipline is imposed for sexual harassment because
that subject has been preempted by the LAD. Therefore, it
concludes that the contractual disciplinary procedures, as
applied to disciplinary disputes involving sexual harassment, are
prohibited and non-negotiable.
The Act itself expressly addresses whether disciplinary
procedures that are authorized as a permissible subject of
collective negotiation, including binding arbitration, may be
deemed unenforceable. The Act, N.J.S.A. 34:13A-5.3, specifically
provides:
The procedures [relating to grievances and
disciplinary review] agreed to by the parties
may not replace or be inconsistent with any
alternate statutory appeal procedure nor may
they provide for binding arbitration of
disputes involving discipline of employees
with statutory protection under tenure or
civil service laws.
Thus, under the Act an employer may agree to submit a disciplinary dispute to binding arbitration pursuant to the negotiated disciplinary procedures, provided those procedures neither replace nor are inconsistent with any other statutory remedy. If an aggrieved employee has an alternative statutory
remedy against alleged unjust discipline, then binding
arbitration of that grievance, otherwise authorized as part of
negotiated disciplinary procedures, may not be invoked. See
State v. State Troopers Fraternal Ass'n,
134 N.J. 393, 411-12
(1993) (recognizing that N.J.S.A. 34:13A-5.3 expressly prohibits
binding arbitration of disputes involving the discipline of
employees with statutory protection under tenure or civil service
laws). Thus, the issue raised by this section of the Act is
whether an alternative statutory appeal remedy is available to
challenge the imposition of discipline based on an accusation of
sexual harassment.
In addressing this issue, the Appellate Division determined
that the imposition of discipline based on workplace sexual
harassment is not subject to other statutory remedies. It
stated: "it is undisputed that the toll supervisor has no appeal
rights under LAD or any other statute respecting the minor
discipline. Consequently, the discipline amendment [N.J.S.A.
34:13A-5.3] controls this case." 276 N.J. Super. at 335. We
concur in that conclusion. It is clear that under N.J.S.A.
34:13A-5.3 the specific and narrow statutory exemption of
disciplinary procedures from collective negotiation is not
applicable to disciplinary procedures invoked in a case based on
sexual harassment.
The Turnpike Authority also argues that the provisions of
the Act authorizing the negotiation of disciplinary procedures,
including binding arbitration, are unenforceable because the LAD
imposes affirmative obligations that are inconsistent with those
procedures as applied to sexual harassment complaints.
The LAD specifically prohibits employment discrimination
based on sex. N.J.S.A. 10:5-12. Although the legislative
history of the LAD is silent on the subject of sexual harassment,
our Court has recognized that sexual harassment is a form of sex
discrimination that violates the LAD. Lehmann v. Toys 'R' Us,
Inc.,
132 N.J. 587, 601 (1993); see Meritor Sav. Bank, FSB v.
Vinson,
477 U.S. 57,
106 S. Ct. 2399,
91 L. Ed.2d 49 (1986).
Further, a "hostile work environment" claim is a specific
category of sexual harassment. See Erickson v. Marsh & McLennan
Co.,
117 N.J. 539, 555-56 (1990) (suggesting that sexual
harassment that creates a hostile environment is prohibited under
LAD). Actionable workplace sexual harassment "occurs when an
employer or fellow employees harasses an employee because of his
or her sex to the point at which the working environment becomes
hostile." Lehmann, supra, 132 N.J. at 601.
The Authority asserts that resort to negotiated disciplinary
procedures for resolving disciplinary disputes based on sexual
harassment is incompatible with the statutory protections against
sexual harassment under the LAD. The affirmative obligations
effectuating those protections, the Authority points out, are
imposed by the test formulated by the Court in Lehmann for
establishing a cause of action for "hostile work environment"
sexual harassment. Id. at 619-21. An employer may be subject to
vicarious liability for a supervisor's conduct on the basis of
agency law or negligence principles. Ibid. Liability may arise if "an employer was negligent by its failure to have in place well-publicized and enforced anti-harassment policies, effective formal and informal complaint structures, training, and/or monitoring mechanisms." Id. at 621. The Turnpike Authority also cites Executive Order No. 88 issued by former Governor Florio on April 4, 1993, as additional support for the imposition of such an affirmative obligation.See footnote 1 The Authority stresses that under the LAD, as construed by Lehmann, and the Executive Order, it is
under an affirmative obligation to adopt clear and specific
policies that govern sexual harassment complaints, and that it
has in fact done so by adopting its Sexual Harassment Policy,
which it was required to follow in this case.
The Appellate Division determined that disciplinary
procedures, including binding arbitration, would not interfere
with a public employer's affirmative obligations to prevent and
counteract sexual harassment. 276 N.J. Super. at 335. The court
reasoned that "[b]oth the LAD and Executive Order No. 88 protect
victims of sexual harassment." 276 N.J. Super. at 335. In
contrast, "Article XV of the CNA sets up procedures by which the
person charged with harassment may challenge his or her
disciplinary penalty. To be sure, the two mechanisms address
different subjects altogether." Ibid.
We agree with the Appellate Division that an employer's
obligation to adopt and implement policies against sexual
harassment "is distinct from the employees' ability to seek
review of disciplinary actions based on allegations of sexual
harassment." 276 N.J. Super. at 335. The LAD, Executive Order
No. 88, and Lehmann, supra, impose a duty on public employers to
enact and enforce policies and procedures to eliminate sexual-harassment discrimination in the workplace. That duty is not
undermined by a collectively negotiated agreement requiring fair
disciplinary procedures and permitting neutral review when an
employee is accused of sexual harassment. Moreover, the essence
of that duty is to enforce the substantive standards that define
sexual harassment and to prevent its occurrence at the workplace.
See discussion, infra, at __ (slip op. at 17-19).
The Authority suggests, further, a more subtle but
significant form of incompatibility between the respective
statutory purposes to be served by collective negotiations of
disciplinary matters and by the laws and policies against
discrimination. An arbitrator, the Authority asserts, may be
more inclined to find no sexual harassment than the Division on
Civil Rights or a court under the LAD.
The Authority misperceives the duties of an arbitrator
engaged in public sector arbitration and, thus, exaggerates the
potential for inconsistent resolutions of workplace sexual
harassment disputes. In the public sector, the public interest,
welfare, and other pertinent statutory criteria are inherent in
the standards that inform and govern public sector arbitration.
Kearny PBA Local No. 21 v. Town of Kearny,
81 N.J. 208, 217
(1979). "In the public sector, unlike the private sector, public
policy demands that the arbitrator follow the law and consider
the public's interest and welfare." Jersey City Educ. Ass'n v.
Board of Educ.,
218 N.J. Super. 177, 188 (App. Div. 1987); see
Local 207 v. Borough of Hillsdale,
263 N.J. Super. 163, 184 (App.
Div. 1993), aff'd in part, rev'd in part,
137 N.J. 71 (1994). We
have determined that
although parties in the private sector may
explicitly authorize the arbitrator to decide
legal issues . . . irrespective of the
governing law, this freedom is not available
in the public sector. The parties in a
public employment case cannot clothe the
arbitrator with unbridled discretion, "for
public policy demands that inherent in the
arbitrator's guidelines are the public
interest, welfare and other pertinent
statutory criteria."
[CWA, Local 1087 v. Monmouth County
Bd. of Social Servs.,
96 N.J. 442,
450-51 (1984)(citation omitted).]
The public policy relating to workplace sexual harassment is
both clear and powerful. The LAD, first enacted in 1945,
enunciates a strong public mandate; its purpose is "nothing less
than the eradication 'of the cancer of discrimination.'"
Lehmann, supra, 132 N.J. at 601 (citation omitted); see N.J.S.A.
10:5-3 (The "Legislature finds and declares that practices of
discrimination against any [New Jersey] inhabitants . . . are a
matter of concern to the government of the State. . . ."). The
LAD was enacted to protect not only the civil rights of aggrieved
employees but also to protect the public's strong interest in a
discrimination-free workplace. Lehman, supra, 132 N.J. at 600.
That public policy infuses the standards governing public sector
arbitration of disputes arising from accusations of
discrimination in the form of sexual harassment. See Jersey
City, supra, 218 N.J. Super. at 194 (vacating part of award that
was inconsistent with LAD); see also County College of Morris
Staff Ass'n, supra, 100 N.J. at 391 (stating that "arbitrator's
award is subject to being vacated when it has been shown that a
statutory basis justifies such an action).
The CNA also requires an arbitrator to find reasonable cause
for discipline if an employee violated the employer's rules and
regulations. Those rules and regulations would presumably encompass the policies adopted by the employer to deal with workplace sexual harassment in accordance with the dictates of the LAD, Executive Order No. 88, and Lehmann. As noted, the Turnpike Authority has adopted a strict Sexual Harassment Policy, and the Authority's determination of the existence of sexual harassment as a basis for discipline in this case was pursuant to the procedures of its Sexual Harassment Policy. More importantly, however, that decision was, presumably, also based on the substantive standards expressed in the LAD, the Executive Order, and Lehmann, which the Sexual Harassment Policy is required to effectuate. Thus, as long as those substantive standards defining sexual harassment are applied, we find no fundamental inconsistency between the employer's Sexual Harassment Policy and the negotiated disciplinary procedures invoked to determine whether sexual misconduct occurred and the appropriate discipline. Even though the procedures called for by the Policy are different from those called for by the CNA, the substantive standard that defines sexual harassment, which is incorporated as part of the Authority's Sexual Harassment Policy, must still be applied. We acknowledge the principle that an arbitral award may not disregard or question the employer's rules and regulations. See Monmouth County Bd. of Social Servs., supra, 96 N.J. at 448 (arbitrator cannot second-guess the employer's sexual harassment policy; "jurisdiction and authority of the arbitrator are circumscribed by and limited to the powers
delegated to him."); Division 540, ATU, AFL-CIO v. Mercer County
Improvement Auth.,
76 N.J. 245 252-54 (1978) (arbitrator is
confined by the parties' contract and the inherent duty to
consider the public interest and welfare); cf. Local 462 v.
Charles Schaefer & Sons,
223 N.J. Super. 520, 528 (App. Div.
1988) (decision vacated when arbitrator exceeded his authority by
imposing a progressive disciplinary scheme where the contract did
not so provide). That principle, however, is not violated as
long as the employer's substantive policy against sexual
harassment, which must reflect the standards of the LAD, is
applied.
The Authority also cites other forms of potential
inconsistency between the resolution of employment-disciplinary
disputes through binding arbitration and the resolution of
discrimination claims under the LAD by judicial and
administrative determinations. It cites Alexander v. Gardner-Denver Co.,
415 U.S. 36,
94 S. Ct. 1011,
39 L. Ed.2d 147 (1974).
The United States Supreme Court in Alexander held that
submission to binding arbitration of an employee's claim of
racial discrimination in his discharge does not foreclose the
employee's right to file suit under Title VII in federal district
court. The Supreme Court stated: "[a] contractual right to
submit a claim to arbitration is not displaced simply because
Congress also has provided a statutory right against
discrimination. Both rights have legally independent origins and
are equally available to the aggrieved employee." Alexander,
supra, 415 U.S. at 52, 94 S. Ct. at 1022, 39 L. Ed.
2d at 160.
Alexander thus recognized the availability of alternative
remedies for an employee who is the victim of discrimination, and
inferentially, it recognized the possibility of inconsistent
results. However, in this case, the aggrieved employee is not
the victim of discrimination. See discussion, supra, at __ (slip
op. at 15). Moreover, when interpreting the CNA, the arbitrator
here must consider the LAD, employee welfare, and the strong
public policy in favor of eradicating discrimination. Hence, the
possibility of inconsistent results in arbitration proceedings
and separate administrative or judicial actions under the LAD is
sharply reduced.See footnote 2
We conclude that the negotiated disciplinary procedures were
applicable in this case. Our laws that call for powerful
protection and strict policies against discrimination by sexual
harassment do not statutorily preempt or supersede the statutory
authority of public employees and their representatives to
negotiate disciplinary procedures, including binding arbitration,
for imposing minor discipline based on workplace sexual
harassment charges.
The Turnpike Authority raises a related argument that disciplinary procedures authorizing binding arbitration applicable to sexual harassment complaints implicate inherent managerial prerogatives and, therefore, are non-negotiable and unenforceable. The Authority, in this argument, relies on the separate provision of N.J.S.A. 34:13A-5.3 that "public employers shall . . . negotiate in good faith with respect to grievances, disciplinary disputes, and other terms and conditions of employment" (emphasis added), and on the judicial interpretation that matters of managerial prerogative are not negotiable "terms and conditions of employment." E.g., In re IFPTE Local 195 v. State, 88 N.J. 393 (1982). Implicit in that argument is the assumption that the portion of N.J.S.A. 34:13A-5.3 that now specifically authorizes public employers through collective negotiation to submit "grievances" and "disciplinary disputes" to binding arbitration does not override the judicial exclusion of matters of managerial prerogative from otherwise negotiable terms and conditions of employment.
There are two responses to that argument. First, "terms and conditions of employment" subject to negotiation refer only to those terms and conditions of employment that the Legislature has not otherwise addressed and determined. E.g., Dunellen Bd. of
Educ. v. Dunellen Educ. Ass'n,
64 N.J. 17, 31 (1973). The
Legislature, however, has unmistakably addressed "disciplinary
procedures" in the context of terms and conditions of employment,
and has clearly determined that they are negotiable. See
discussion, supra, at __ (slip op. at 7-10).
Second, disciplinary procedures, including binding
arbitration, governing the imposition of minor discipline, do not
implicate matters of inherent managerial prerogatives and,
therefore, constitute terms and conditions of employment that are
negotiable.
In In re IFPTE Local 195, supra,
88 N.J. 393, this Court
established a three-part test for determining what "terms and
conditions of public employment" are negotiable. First, "a
subject is negotiable only if it 'intimately and directly
affect[s] the work and welfare of public employees.'" Id. at 403
(citation omitted). The parties do not dispute that affording
employees with impartial review of disciplinary disputes affects
the work and welfare of public employees. See Assembly, No. 706,
Statement, supra ("Disciplinary actions have an unquestionably
intimate and direct effect on the work and welfare of public
employees."); Bethlehem Township Bd. of Educ. v. Bethlehem
Township Educ. Ass'n,
91 N.J. 38, 44 (1982).
Second, a subject is negotiable if it has not been preempted
by statute or regulation. In re IFPTE Local 195, supra, 88 N.J.
at 403. However, "[n]egotiation is preempted only if the
"statutory or regulatory provisions . . . speak in the imperative
and leave nothing to the discretion of the public employer." Id.
at 403-04 (quoting State v. State Supervisory Employees Ass'n,
78 N.J. 54, 80 (1978)). See Bethlehem Township Bd. of Educ., supra,
91 N.J. at 44. Nothing in the LAD speaks in such an imperative.
The employer retains its discretion to negotiate the disciplinary
procedures providing neutral review of a disciplinary sanction.
Moreover, nothing in the LAD compels an accused employee to
forego an arbitral forum contesting discipline that may be
unfounded or unjust. See discussion, supra, at __ (slip op. at
13-16).
In respect of the third prong of the IFPTE test, a topic
affecting the work and welfare of public employees is negotiable
only if it is a matter "on which negotiated agreement would not
significantly interfere with the exercise of inherent management
prerogatives pertaining to the determination of governmental
policy." In re IFPTE Local 195, supra, 88 N.J. at 404 (citations
omitted); see Kearny PBA Local No. 21, supra, 81 N.J. at 215
(stating that "prerogatives of management, particularly those
involving governmental policy making, cannot be bargained away to
be determined by an arbitrator."). The application of
disciplinary procedures for minor disciplines will not
significantly interfere with the governmental policy of
eradicating sexual harassment from the workplace and enforcing
those policies. See Bethlehem Township Bd. of Educ., supra, 91
N.J. at 44.
Although the conduct giving rise to the dispute over
discipline involves sexual harassment discrimination, this case
does not involve any issue implicating the employer's basic
managerial authority over personnel. E.g., Teaneck Bd. of Educ.
v. Teaneck Teachers Ass'n,
185 N.J. Super. 269 (App. Div. 1982),
aff'd,
94 N.J. 9, 14-15, 16 (1983) (observing that "[a] public
employer cannot bargain away the review of a decision whether to
hire, promote, or retain teaching staff;" and, further, observing
that the fact "[t]hat the State's Law Against Discrimination sets
statutory terms and conditions of employment does not resolve the
issue whether application of those terms of employment to an
employee is arbitrable." (emphasis added)); Jersey City Educ.
Assoc. v. Board of Educ.,
218 N.J. Super. 177, 187-88 (App. Div.
1987) (concluding that apart from claim of racial discrimination,
subject of promotions was not negotiable and, therefore, not
arbitrable because it implicated a government employer's
managerial prerogative regarding personnel decisions).
The Authority also cites Ridgefield Park Education
Association v. Ridgefield Park Board of Education,
78 N.J. 144,
156 (1978), in support of the argument that subjecting the
enforcement of anti-discrimination policy to private arbitration,
in effect, allows an arbitrator to rule on, and therefore set,
LAD policy, and, therefore, is an impermissible "delegation" of
government responsibility to the private sector.
As previously demonstrated, nothing in the LAD specifically
prohibits public employers and employees from negotiating
procedures for disciplinary disputes arising from allegations of discrimination. The LAD does not require that an employee accused of sexual harassment be denied a negotiated right to fair disciplinary procedures and neutral review. See Assembly, No. 706, Statement, supra (noting that N.J.S.A. 34:13A-5.3 "empower[s] public employers to negotiate binding arbitration procedures for disciplinary disputes [which could] cover such basic issues as a review of the guilt or innocence of an employee with respect to both major and minor disciplinary infractions, and the standards for, and reasonableness of, any penalty imposed."); Division 540, ATU v. Mercer County Improvement Auth., supra, 76 N.J. at 250-52 (recognizing that binding arbitration may be an appropriate forum for labor disputes involving public employers). The Legislature itself understood that allowing employees to negotiate over disciplinary disputes arising from allegations of discriminatory conduct and subjecting those disputes to binding arbitration need not "significantly interfere" with a public employer's "managerial prerogative" to develop and implement anti-discrimination policies or punish employees for violating such policies. See, e.g., Assembly, No. 706, Statement, supra (recognizing that disciplinary actions will be subject to negotiations and "should be viewed as only indirectly related to the right of public officials to determine substantive governmental or educational policy."). Moreover, an arbitrator in the public sector in disciplinary matters is enjoined to effectuate and advance the strong public policy
against discrimination in cases arising from complaints of sexual
harassment.
We conclude that the negotiation of disciplinary procedures,
including binding arbitration, for the imposition of discipline
based on claims of sexual harassment is specifically authorized
as a negotiable subject and does not impinge on or implicate an
inherent managerial prerogative.
For the reasons set forth in this opinion, we affirm the judgment of the Appellate Division.
Chief Justice Wilentz and Justices O'Hern, Garibaldi, and Stein join in Justice Handler's opinion. Justices Pollock and Coleman did not participate.
NO. A-20 SEPTEMBER TERM 1995
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
NEW JERSEY TURNPIKE AUTHORITY,
Petitioner-Appellant,
v.
NEW JERSEY TURNPIKE SUPERVISORS
ASSOCIATION,
Respondent-Respondent.
DECIDED January 31, 1996
Chief Justice Wilentz PRESIDING
OPINION BY Justice Handler
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 Executive Order No. 88 provides:
WHEREAS, sexual harassment of any kind is
totally repugnant to basic principles of
equality; and
WHEREAS, this State must take every
necessary and appropriate step toward
eradicating sexual harassment and gender
discrimination from the workplace; and
WHEREAS, the State should ensure that all
governmental entities adopt effective
policies to eradicate sexual harassment from
the workplace;
NOW, THEREFORE, I, JIM FLORIO, Governor of
the State of New Jersey . . . do hereby ORDER
and DIRECT:
3. [A]ll State agencies, departments, authorities, and instrumentalities shall develop a plan for providing anti-sexual harassment training programs or seminars for employees and/or for management and administrative personnel. . . . Footnote: 2 The Authority also now raises an argument somewhat related to the position it urges on the basis of the Alexander decision. The Authority contends that, given the possibility of inconsistent results from arbitration and actions under the LAD, this case implicates concerns of administrative comity, citing e.g., City of Hackensack v. Winner, 82 N.J. 1 (1980), and Hinfey v. Matawan Regional Bd. of Educ., 77 N.J. 514 (1978). That issue, however, was never raised or considered by the lower courts and, hence, is not appropriately presented on this appeal. We, therefore, decline to address it.