(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 October 25, 1994 -- Decided January 26, 1995
STEIN, J., writing for a unanimous Court.
MaeDelle Horton is a tenured teacher in the Scotch Plains-Fanwood school district. In April
1990, the School Board informed Horton that she would not be receiving a salary increment for the 1990-91
school year because she had been absent too much, thereby impairing her performance.
Pursuant to the district's Collective Bargaining Agreement, Horton filed a grievance challenging the
withholding of her increment. In turn, the Board contended that the withholding of the increment "was for
predominantly educational reasons."
The Board filed a petition with the N.J. Public Employment Relations Commission (PERC) for a
determination of whether the dispute was subject to arbitration. PERC held that the basis of the Board's action
was predominantly disciplinary, thereby making the dispute arbitrable. The Board did not appeal.
Under the bargaining agreement, the arbitrator was limited to the issues raised by the parties. His
decision was to be final and binding.
The arbitrator agreed with PERC's determination that the action of the Board was predominantly
disciplinary. He applied a "just-cause" standard of review and concluded that because the Board had not
questioned the validity of Horton's absences, the decision to withhold the increment was arbitrary. In addition,
the arbitrator held that even if the Board were justified in taking some disciplinary action, the withholding of an
increment was an excessive sanction.
The Superior Court, Chancery Division, confirmed the award. On appeal, the Appellate Division
reversed, holding that the award was beyond the arbitrator's authority. The Supreme Court granted the
Education Association's petition for certification on behalf of Horton.
HELD: The arbitrator did not exceed his authority when he determined under a just-cause standard that the
board of education improperly withheld a teacher's salary increment on disciplinary grounds.
1. Although our courts favor the settlement of labor-management disputes through arbitration, an arbitration
award may not have the effect of establishing a provision of a negotiated agreement that is inconsistent with state
statutory policy. (pp. 7-8)
2. The 1989 scope-of-negotiations amendments to the New Jersey Employer-Employee Relations Act did not
cover the standard of review for the withholding of an increment for disciplinary reasons. The statutory standard
governing the withholding of teacher increments based on teaching performance does not apply to the
withholding of an increment as a means of discipline. (pp. 10-15)
3. The arbitrator was in fact bound by PERC's determination that the Board's action was taken for disciplinary
reasons. No appeal had been taken from PERC's determination on that issue. (pp. 15-16)
4. Because neither the Collective Bargaining Agreement nor the scope-of-negotiations amendments addressed
the applicable standard of review, the arbitrator was obligated to determine the applicable standard. The
arbitrator correctly concluded that the "just-cause" standard applied. A just-cause standard properly effectuates
the Legislature's purpose in enacting the scope-of-negotiations amendments to provide additional rights and
protections for teachers who have an increment withheld for disciplinary reasons.
(pp. 16-18)
5. In the context of evaluating a disciplinary sanction by an employer, the arbitrator's fault-based analysis was
appropriate. Having determined that the arbitrator acted within his discretion in applying a just-cause standard
of review, the Court declines to scrutinize the merits of that decision. In addition, because the arbitrator's
decision that the Board lacked just cause to withhold the increment for disciplinary reasons is amply supported,
the Court need not address the question of whether the sanction imposed was excessive. (pp. 19-21)
6. The Court notes that its decision should not be read to limit a Board's authority in respect of the withholding
of an increment based on teaching performance. Similarly, the Court implies no view on the merits of PERC's
decision that the basis for withholding Horton's increment was predominantly disciplinary--that issue was not
before the Court. The Court goes on to note, however, that if PERC had determined that the Board's decision
to withhold Horton's increment had been based on teaching performance, the Appellate Division's conclusion
that the Board had demonstrated sufficient cause to withhold the increment would have been sustainable. (p.
20)
The judgment of the Appellate Division is REVERSED.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, and GARIBALDI join
in JUSTICE STEIN's opinion.
JUSTICE COLEMAN did not participate.
SUPREME COURT OF NEW JERSEY
A-
45 September Term 1994
SCOTCH PLAINS-FANWOOD BOARD
OF EDUCATION,
Plaintiff-Respondent,
v.
SCOTCH PLAINS-FANWOOD EDUCATION
ASSOCIATION,
Defendant-Appellant.
Argued October 25, 1994 -- Decided January 26, 1995
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
270 N.J. Super. 444 (1994).
Sanford R. Oxfeld argued the cause for
appellant (Balk, Oxfeld, Mandell & Cohen,
attorneys; Mr. Oxfeld and Gail S. Oxfeld, on
the brief).
Casper P. Boehm, Jr., argued the cause for
respondent.
Richard A. Friedman and Kathleen A. Naprstek
submitted a letter brief on behalf of amicus
curiae New Jersey Education Association
(Zazzali, Zazzali, Fagella & Nowak,
attorneys).
Michael F. Kaelber, Senior Associate Counsel,
submitted a letter brief on behalf of New
Jersey School Boards Association (Shiela E.
Dow-Ford, Director, attorney).
The opinion of the Court was delivered by
STEIN, J.
The issue in this case is whether an arbitrator exceeded his authority when he determined that a board of education had improperly withheld a teacher's salary increment.
The board withheld the teacher's increment due to excessive
absenteeism. An arbitrator ordered the increment restored,
concluding that the board's decision had been arbitrary. The
Chancery Division confirmed the award. The Appellate Division
reversed, reasoning that the arbitrator had exceeded his
authority in ordering the restoration of the increment.
270 N.J. Super. 444, 449 (1994). We granted certification,
137 N.J. 165 (1994), and now reverse.
The facts, which are essentially undisputed, are taken from
the arbitrator's opinion. MaeDelle Horton, a tenured teacher,
has been employed by the Scotch Plains-Fanwood Board of Education
(Board) since 1977. She taught at the "Resource Room" in the
high school throughout her employment. A Resource Room teacher
works with a relatively small number of students who require
special attention. The position requires consistent
communication with other teachers, parents, and staff. Because
the instructional program is based on the individual needs of
students, the arbitrator determined that "frequent absence of the
teacher is a particular difficulty."
From the time she began her employment until completion of
the 1988-89 school year, Horton was absent 244.5 days due to
illness. In 1985, and again in 1988, the high-school principal
wrote to Horton and expressed concern over her extensive
absences. The principal's letter of 1988 warned "that based upon
your accumulated record and failure to provide good instructional
leadership for your students as a result of these absences, you
have placed my recommendation for your increment in serious
doubt."
The agreement between the Board and the Scotch Plains-Fanwood Education Association (Association), which was in effect
from July 1, 1988, to June 30, 1991 (Agreement), provided for
salary increments. Article 4, section D of that Agreement
states: "Employment increments, i.e., a step up on the Salary
Guide based on service or additional salary raises which may be
authorized by the Board, are not automatic. Such increments
and/or raises shall be awarded based upon the recommendation of
the Superintendent and approval by the Board of Education."
In September 1989, Horton was injured in a train accident.
Although she promptly notified the Board that she would need
several days to recover, she did not indicate that she would be
absent for an extended period. As a result, the Board did not
obtain a permanent substitute to instruct Horton's students.
However, Horton did not return to work until November 15, 1989.
Horton received an Interim Evaluation Report from the high
school principal during November 1989, which concluded that
Horton's attendance record had "helped create a failure in
providing good instructional leadership for [her] students."
Horton responded by noting that her recent periods of absence had
been justified: her absence for fifty to fifty-five days from
February to June 1989, had been due to major surgery and her
absence for twenty-seven days during the 1989-90 school year had
been due to injuries sustained in the train accident.
The principal wrote Horton's Summary Evaluation Report in
March 1990, and noted that she had been absent nearly forty days
during the 1989-90 school year. The principal concluded that
Horton's absences had "made it hard to maintain an effective
educational program for her special education students." In
rebuttal, Horton contended that holding her responsible for the
maintenance of an effective educational program during justified
periods of absence was unfair. In April 1990, the Board informed
Horton that her salary for the 1990-91 school year would remain
at the 1989-90 level because her "absentee record has impaired
[her] performance in the sense that [she] ha[s] failed to provide
good instructional leadership for [her] students."
Horton filed a grievance in opposition to the withholding of
her increment, which the Board denied on the ground that the
withholding "was for predominantly educational reasons."
Thereafter, the Association filed for binding arbitration. In
response, the Board filed a petition with the New Jersey Public
Employment Relations Commission (PERC) questioning whether the
dispute was subject to arbitration. The applicable statutes
specify that if a board of education withholds a teacher's
increment for "predomina[ntly] disciplinary reasons," the dispute
must be settled by a grievance procedure that requires "binding
arbitration as the terminal step." N.J.S.A. 34:13A-26 and -29.
Pursuant to N.J.S.A. 34:13A-27a, PERC determined that the basis
for withholding Horton's increment had been predominantly
disciplinary and, accordingly, found that the dispute was
arbitrable. The Board did not appeal that conclusion, and the
parties proceeded to arbitration.
Article 6, subsection C(10)(c), of the Agreement delineates
the scope of the arbitrator's authority to resolve grievance
disputes between the parties:
The arbitrator shall be empowered to hold a
hearing or hearings and to obtain all
relevant data concerning the grievance. He
shall render a written decision within thirty
(30) days after the completion of the hearing
or hearings or submissions of any additional
data. A copy shall be simultaneously
furnished to the Association and the Board.
The arbitrator shall limit himself to the
issue submitted and shall consider nothing
else. He can add nothing to nor subtract
anything form [sic] this Agreement between
the parties or any policy of the Board of
Education. The award of the arbitrator shall
be final and binding on the parties.
Article 17, section A, of the Agreement further provides: "This
Agreement and its appendices shall constitute the entire
Agreement between the parties and shall not be modified in whole
or in part by the parties except by an instrument in writing duly
executed by both parties."
After conducting a hearing, the arbitrator found that
[t]here can be no doubt that the Board had a
legitimate and proper interest in the extent
of [Horton]'s absenteeism. She has had a
large number of absences throughout her
teaching career in general, and during the
1989-1990 school year in particular. The
Board has also established that these
absences had a detrimental effect upon the
educational process, particularly in light of
[Horton]'s assignment as a teacher in the
Resource Room. Thus, the Board has
abundantly established that it has an
interest in [Horton] having good and regular
attendance.
Despite that finding, the arbitrator ordered the restoration of
Horton's increment. He agreed with PERC's determination that the
basis of the Board's decision to withhold the increment had been
predominantly disciplinary. He concluded that because the Board
had not questioned the validity of any of Horton's absences, its
decision to withhold the increment "based upon the sheer number
of days of her absences, without due consideration for the
particular circumstances for her absences, was arbitrary and
without any demonstrated rational basis." Finally, the
arbitrator reasoned that even if the Board were justified in
taking some disciplinary action, the disciplinary withholding of
an increment was excessive.
After the Chancery Division confirmed the award, the
Appellate Division reversed, holding that the award was beyond
the arbitrator's authority. The Appellate Division identified
three errors in the arbitrator's disposition. First, the court
found that the arbitrator had exceeded his authority by
considering PERC's characterization of the increment withholding
as disciplinary, noting that PERC's characterization of the
dispute has only procedural relevance. 270 N.J. Super. at 449.
Second, the panel observed that the arbitrator's disposition
incorrectly had assumed that a teacher's salary increment is a
matter of right. Id. at 450. Third, the court determined that
the arbitrator had attempted to require the Board to impose
progressive discipline, which was not authorized by the
Agreement. Id. at 451.
Our courts view favorably the settlement of labor-management disputes through arbitration. County College of Morris Staff Ass'n v. County College of Morris, 100 N.J. 383, 390 (1985). Arbitration is designed to provide final, speedy, and inexpensive settlement of disputes; it is "'meant to be a substitute for and not a springboard for litigation.'" Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 86 N.J. 179, 187 (1981) (quoting Korshalla v. Liberty Mut. Ins. Co., 154 N.J. Super. 235, 240 (Law Div. 1977)). Accordingly, the role of the courts in reviewing arbitration awards is extremely limited, Local No. 153, Office & Professional Employees Int'l Union v. Trust Co. of New Jersey, 105 N.J. 442, 448 (1987); Local Union 560, I.B.T. v. Eazor Express, Inc., 95 N.J. Super. 219, 227 (App. Div. 1967); and an arbitrator's award is not to be cast aside lightly. Kearny PBA Local #21 v. Town of Kearny, 81 N.J. 208, 221 (1979).
Courts' deference to an arbitrator's decision has limitations, however. When the parties enter into an agreement that defines the scope of the arbitration process, an arbitrator
may not exercise greater authority than the contract confers.
County College of Morris, supra, 100 N.J. at 391. The scope of
an arbitrator's authority depends on the terms of the contract
between the parties. Local No. 153, supra, 105 N.J. at 449;
County College of Morris, supra, 100 N.J. at 391; Barcon Assocs.,
supra, 86 N.J. at 209-10 (Clifford, J., dissenting). Any action
taken beyond that authority is impeachable and may be vacated on
statutory grounds. Communication Workers, Local 1087 v. Monmouth
County Bd. of Social Servs.,
96 N.J. 442, 448 (1984); In re
Arbitration Between Grover & Universal Underwriters Ins. Co.,
80 N.J. 221, 229 (1979). The applicable statute, N.J.S.A. 2A:24-8d,
compels a court to vacate an arbitration award "[w]here the
arbitrators exceeded or so imperfectly executed their powers that
a mutual, final and definite award upon the subject matter
submitted was not made."
In public-sector arbitration, an arbitration award may not
have "'the effect of establishing a provision of a negotiated
agreement inconsistent with state statutory policy.'" Old Bridge
Bd. of Educ. v. Old Bridge Educ. Ass'n,
98 N.J. 523, 528 (1985)
(quoting Teaneck Bd. of Educ. v. Teaneck Teachers Ass'n,
94 N.J. 9, 15 (1983)); see also Township of West Windsor v. Public
Employment Relations Comm'n,
78 N.J. 98, 116 (1978) (holding that
statutes that set specific terms and conditions of public
employment "are effectively incorporated by reference as terms of
any collective agreement covering employees to which they
apply").
The Appellate Division determined that this case was
controlled by N.J.S.A. 18A:29-14, which provides: "Any Board of
Education may withhold, for inefficiency or other good cause, the
employment increment, or the adjustment increment, or both, of
any member in any year by a recorded roll call majority vote of
the full membership of the board of education."
We have previously discussed N.J.S.A. 18A:29-14 and reasoned
that
[t]he decision to withhold an increment -
although directly affecting the work and welfare
of a teacher -- is . . . dependent upon an
evaluation of the quality of the services which
the teacher has rendered. The purpose of the
statute is thus to reward only those who have
contributed to the educational process thereby
encouraging high standards of performance. In
determining whether to withhold a salary
increment, a local board is therefore making a
judgment concerning the quality of the educational
system.
[Board of Educ. v. Bernards Township Educ.
Ass'n,
79 N.J. 311, 321 (1979).]
We have rejected the notion that N.J.S.A. 18A:29-14 provides
teachers with a "statutory entitlement unrelated to [their]
qualifications, performance or quality of teaching services
rendered." North Plainfield Educ. Ass'n v. Board of Educ.,
96 N.J. 587, 593 (1984). Instead, the statute provides for an
annual evaluation of teacher performance, which both affords
teachers economic security and encourages quality in performance.
Ibid.; see also Probst v. Board of Educ.,
127 N.J. 518, 526
(1992) ("Increment withholding is widely used to promote and
maintain high standards of professionalism for public-school
teachers."). The evaluation of a teacher's performance "is a
management prerogative essential to the discharge of the duties
of a school board." North Plainfield Educ. Ass'n, supra, 96 N.J.
at 593.
The Association argues that N.J.S.A. 18A:29-14 no longer
determines the standard of review for the "disciplinary"
withholding of a teacher's salary increment in view of the
Legislature's recent amendments to the New Jersey Employer-Employee Relations Act (the Act). It argues that those
amendments, L. 1989, c. 269 (codified at N.J.S.A. 34:13A-22 to -29) (scope-of-negotiations amendments), impose a "just cause"
standard of review when a teacher's salary increment is withheld
for disciplinary reasons.
In view of our recent analysis of the early case law
interpreting the Act in State v. State Troopers Fraternal Ass'n,
134 N.J. 393 (1993), we need revisit that background only briefly
to address whether the scope-of-negotiations amendments altered
the standard of review for disciplinary increment withholdings.
As originally enacted, the Act "mandated that public employers
negotiate in good faith with the majority representative of
public employees 'with respect to grievances and terms and
conditions of employment.'" Id. at 401 (quoting L. 1968, c. 303,
§ 7). However, the Legislature did not define the phrase "terms
and conditions of employment" and failed to define "what subjects
were negotiable and what subjects were outside the sphere of
negotiation." Dunellen Bd. of Educ. v. Dunellen Educ. Ass'n,
64 N.J. 17, 24 (1973). In the so-called "Dunellen trilogy" of cases
decided in 1973, we "established the need to determine on a case-by-case basis the subjects that are mandatorily negotiable under
the Act, as distinguished from matters of governmental policy
exclusively within the prerogative of management." State
Troopers Fraternal Ass'n, supra, 134 N.J. at 401-02.
In response to concerns voiced by employee groups that were
"[s]everely dissatisfied with the restrictive limitations on the
scope of negotiations," the Legislature amended the Act in 1974.
Thomas M. Moore, Comment, After Ridgefield Park and State
Supervisory Employees: The Scope of Collective Negotiations in
the Public Sector of New Jersey,
10 Seton Hall L. Rev. 558, 564
(1980). The most significant change was an amendment to N.J.S.A.
34:13A-8.1, which had previously ended with the phrase "nor shall
any provision hereof annul or modify any statute or statutes of
this State." We had relied on that language in Dunellen to
preclude negotiability under the Act of subjects within the
purview of existing legislation. Dunellen Bd. of Educ., supra,
64 N.J. at 28-29. The Legislature amended N.J.S.A. 34:13A-8.1 to
state: "[N]or shall any provision hereof annul or modify any
pension statute or statutes of this State." L. 1974, c. 123, § 6
(emphasis added). We rejected the position that that amendment
created a permissive category of negotiable matters in public
employment labor relations in Ridgefield Park Education Ass'n v.
Ridgefield Park Board of Education,
78 N.J. 144 (1978), and
instead "reaffirm[ed] our holding in Dunellen that there are but
two categories of subjects in public employment negotiation -
mandatorily negotiable terms and conditions of employment and
non-negotiable matters of governmental policy." Id. at 162.
In Bernards Township Education Ass'n, supra, we analyzed
"the propriety of subjecting salary increment disputes to
arbitration." 79 N.J. at 318. Specifically, the Court
determined the validity of a clause in a public-sector negotiated
agreement providing that disputes concerning a decision to
withhold a teacher's salary increment "for inefficiency or other
good cause," N.J.S.A. 18A:29-14, shall be subject to advisory, as
opposed to binding, arbitration. Bernards Township Educ. Ass'n,
supra, 79 N.J. at 318. To determine whether the arbitration
clause at issue constituted a negotiable term and condition of
employment, the Court applied the following standard: "'[T]erms
and conditions of employment are those matters [1] which
intimately and directly affect the work and welfare of public
employees and [2] on which negotiated agreement would not
significantly interfere with the exercise of inherent managerial
prerogatives pertaining to the determination of governmental
policy.'" Id. at 320 (quoting State v. State Supervisory
Employees Ass'n,
78 N.J. 54, 67 (1978)). Although we reasoned
that the decision to withhold a salary increment directly affects
the work and welfare of public-school teachers, we nevertheless
concluded that such a decision is "a matter of essential
managerial prerogative which has been delegated by the
Legislature to the Board . . . [and accordingly] cannot be
bargained away." Id. at 321. Although the Court precluded the
submission of increment-withholding disputes to binding
arbitration, it enforced the clause at issue and held that
"parties may agree to submit to advisory arbitration disputes
concerning the applicability to individual employees of matters
of governmental policy." Id. at 326 (emphasis added).
In 1982, the Legislature enacted the so-called "discipline
amendment" to N.J.S.A. 34:13A-5.3, L. 1982, c. 103, to overrule
an Appellate Division decision that had concluded 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." Assembly Member Patero,
Statement to Assembly Bill No. 706 (Feb. 1, 1982). Although the
bill that initially was passed would have permitted the
settlement of teachers' increment-withholding disputes through
binding arbitration despite the statutory review procedure in
N.J.S.A. 18A:29-14, the Legislature had to reenact the bill after
Governor Kean's conditional veto. In his conditional-veto
message, Governor Kean "expressed conceptual approval of the
bill's objectives but recommended that the bill be amended to
provide that negotiated disciplinary-dispute procedures not be
available to those public employees already covered by tenure,
statutory, or Civil Service appeal procedures." State Troopers
Fraternal Ass'n, supra, 134 N.J. at 412. Thereafter, "The
Legislature reenacted the bill to incorporate the recommendations
in the Governor's veto message." Ibid. Accordingly, despite the
disciplinary amendment, binding arbitration remained unavailable
for disputes involving the withholding of a teacher's increment.
With that background in mind, we turn to the scope-of
negotiations amendments. Those amendments were intended to
expand "the scope of negotiations for public school employees in
matters relating to extracurricular activities and discipline,
including increment withholding." Assembly Labor Committee
Statement to L. 1989, c. 269 (reprinted at N.J.S.A. 34A:13A-22).
Through those amendments, "all discipline, including reprimands,
may be appealed through the locally negotiated grievance
procedures which must provide for binding arbitration as the
final step in the procedure." Ibid. However, "The withholding
of a teaching staff member's increment based on actual teaching
performance would still be appealable to the Commissioner of
Education." Ibid. If a dispute occurs over the proper
characterization of an increment withholding, PERC "determine[s]
whether the basis for the . . . withholding is predomina[ntly]
disciplinary." N.J.S.A. 34:13A-27a.
The scope-of-negotiations amendments further require that
"[i]n any grievance procedure negotiated pursuant to this act,
the burden of proof shall be on the employer covered by this act
seeking to impose discipline as that term is defined in this
act." N.J.S.A. 34:13A-29b. "Discipline" is defined to include
"all forms of discipline, except . . . the withholding of
increments pursuant to N.J.S. 18A:29-14." N.J.S.A. 34:13A-22
(emphasis added). We construe that definition of "discipline" to
reflect a legislative determination to distinguish the
withholding of an increment for disciplinary reasons from an
increment-withholding for reasons of teaching performance.
Hence, we conclude that the statutory standard governing the
withholding of increments based on teaching performance does not
apply to the withholding of an increment as a means of
discipline. However, N.J.S.A. 18A:29-14, and the case law
interpreting that provision, remain applicable when "the reason
for the increment withholding relates predomina[ntly] to the
evaluation of a [teacher's] teaching performance." N.J.S.A.
34:13A-27d.
We note that, contrary to the Appellate Division's
conclusion, the arbitrator was bound by PERC's determination that
the Board's action was taken for disciplinary reasons. N.J.S.A.
34:13A-27a expressly confers on PERC the authority to resolve a
dispute concerning whether the basis for an increment-withholding
is disciplinary. Although the Board argued that it had withheld
the increment for predominantly educational reasons, it did not
appeal PERC's decision that the basis for the withholding had
been predominantly disciplinary. Hence, the arbitrator had no
alternative other than to apply a standard less permissive than
that set forth in N.J.S.A. 18A:29-14.
Although the scope-of-negotiations amendments preclude the
applicability of N.J.S.A. 18A:29-14 for disciplinary-increment
withholdings, they do not address what the appropriate standard
of review should be. Therefore, we next analyze whether the
arbitrator applied an appropriate standard.
At the hearing before the arbitrator, the parties disagreed
on the appropriate standard of review: the Board argued that an
arbitrary, capricious, or unreasonable standard should apply; the
Association believed that a just-cause standard was proper. The
arbitrator concluded that the parties' opposing contentions
concerning the appropriate standard of review were actually
irrelevant because "it is commonly understood that the absence of
just cause for a disciplinary action means that the Employer
acted in an arbitrary, capricious or discriminatory fashion; i.e.
unreasonably." Although he found that the Board had "abundantly
established that it has an interest in [Horton] having good and
regular attendance," he concluded that because the Board had not
questioned the validity of Horton's absences, the increment
withholding would not accomplish the Board's objective.
Therefore, the arbitrator found that the decision to withhold the
increment "was arbitrary and without any demonstrated rational
basis."
In evaluating the arbitrator's analysis, we note that the
Agreement does not provide a standard for evaluating the Board's
decision to withhold an increment for disciplinary reasons.
Accordingly, because neither the Agreement nor the scope-of-negotiations amendments addressed the applicable standard of
review, the arbitrator was obligated to discern the applicable
standard. We have previously concluded that although an
arbitrator cannot contradict the express terms of a collective
bargaining agreement, "[i]t is the arbitrator's role to fill the
gaps" in that agreement. Local No. 153, supra, 105 N.J. at 452.
We believe that the arbitrator properly applied a just-cause
standard of review, which collective-bargaining agreements and
arbitrators generally adopt as the appropriate standard for
resolving disciplinary disputes. See, e.g., Roger I. Abrams and
Dennis R. Nolan, Toward a Theory of 'Just Cause' in Employee
Discipline Cases, 1
985 Duke L.J. 594, 594 (1985) (stating that
"almost every collective bargaining agreement permits the
employer to discipline an employee for 'just cause'"); Martin H.
Malin, The Supreme Court and the Duty of Fair Representation, 27
Harv. C.R.-C.L. L. Rev. 127, 171 n.199 (1992) ("A Bureau of
National Affairs survey shows that 97" of all collective
bargaining agreements expressly control discipline and discharge,
and 94" expressly require just cause."); see also Ronald T.
Hyman, Withholding a Teacher's Salary Increment
85 Ed. L. Rep. 975, 985 (1993) (analyzing scope-of-negotiations amendments and
concluding that "board of education will have the burden of
proving that it had just cause for denying an increment
[because,] [t]raditionally, arbitrators who decide disciplinary
cases use the just cause test"). In fact, "'The weight of
arbitral opinion is that a standard of just cause may be imposed
upon disciplinary actions even though such a standard is not
spelled out in the agreement.'" Smith v. Kerrville Bus Co.,
709 F.2d 914, 918 (5th Cir. 1983) (quoting Pacific Tel. & Tel. Co.,
36 Lab. Arb. (BNA) 503, 505 (1960)). Because the arbitrator
adopted a well-settled standard, his analysis did not "simply
reflect [his] own notions of industrial justice." United
Paperworks Int'l Union v. Misco, Inc.,
484 U.S. 29, 38,
108 S.
Ct. 364, 371,
98 L. Ed.2d 286, 299 (1987).
Furthermore, the arbitrator's analysis is consistent with
the Legislature's desire to provide additional rights and
protections to teachers in the context of a disciplinary
increment withholding. See N.J.S.A. 34:13A-28 (stating that
"this act shall be construed as providing additional rights in
addition to and supplementing the rights provided by [N.J.S.A.
34:13A-5.3]"). To require binding arbitration as the terminal
step in a grievance dispute concerning a disciplinary increment
withholding, while at the same time requiring the arbitrator to
apply a highly deferential "managerial prerogative" standard,
would undoubtedly frustrate the apparent objectives of the
Legislature. Accordingly, we believe that a just-cause standard
properly effectuates the Legislature's purpose in enacting the
scope-of-negotiations amendments to provide additional rights and
protections for teachers who have an increment withheld for
disciplinary reasons.
In the context of evaluating a disciplinary sanction by an
employer, the arbitrator's fault-based analysis was appropriate.
See, e.g., E.I. DuPont de Nemours & Co. v. Grasselli Employees
Independent Assoc.,
790 F.2d 611, 614 (7th Cir.) (upholding
arbitration award when "[t]he key to the arbitrator's award was
his reasoning that the [employer] lacked just cause to terminate
[the employee] because he was not at fault for his conduct"),
cert. denied,
479 U.S. 853,
107 S. Ct. 186,
93 L. Ed.2d 120
(1986). The arbitrator correctly required the Board to
demonstrate that Horton was at fault for being absent excessively
or, put differently, that a portion of her absences were not
reasonably attributable to sickness or injury. Because the
arbitrator was evaluating a disciplinary action taken by the
Board, his analysis properly considered whether "the source of
[Horton's] absences were illnesses and injuries beyond her
control."
Because the arbitrator was bound by PERC's determination
that the Board had acted for disciplinary reasons, we conclude
that the arbitrator acted within his authority when he analyzed
the disciplinary withholding of Horton's increment under a just-cause standard. After applying that standard, the arbitrator
found that "the disciplinary withholding of [Horton's] increment
based upon the sheer number of days of her absences, without due
consideration for the particular circumstances for her absences,
was arbitrary and without any demonstrated rational basis."
Having determined that the arbitrator acted within his discretion
in applying a just-cause standard of review, we decline to
scrutinize the merits of that determination. See Local No. 153,
supra, 105 N.J. at 448 ("Many of the benefits of arbitration
would be lost if reviewing courts were permitted to conduct de
novo examinations of the merits of an arbitration award.").
Our holding that the arbitrator's determination be
reinstated should not be understood to limit in any respect a
board of education's authority to withhold an increment based on
teaching performance. Furthermore, we imply no view concerning
the merits of PERC's determination that the basis for withholding
Horton's increment was predominantly disciplinary. That issue is
not before us. We note, however, that if PERC were to have
determined that the basis for withholding Horton's increment had
been for predominantly educational reasons, the Appellate
Division's conclusion that the Board had demonstrated sufficient
cause to withhold the increment would have been sustainable. 270
N.J. Super. at 450.
Despite his conclusion that the withholding of Horton's
increment under a just-cause standard was not sustainable, the
arbitrator went on to state that "assuming it was proper to take
some disciplinary action in 1990 in response to [Horton's]
absenteeism, I conclude that the method the Board chose, the
disciplinary withholding of an increment, was excessive."
Because the arbitrator's initial conclusion that the Board lacked
just cause to withhold the increment for disciplinary reasons is
amply supported, we need not address the arguments presented
concerning the arbitrator's collateral conclusion that the
penalty imposed was excessive.
The judgment of the Appellate Division is reversed.
Chief Justice Wilentz and Justices Handler, Pollock, O'Hern, and Garibaldi join in this opinion. Justice Coleman did not participate.
NO. A-45 SEPTEMBER TERM 1994
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
SCOTCH PLAINS-FANWOOD BOARD
OF EDUCATION,
Plaintiff-Respondent,
v.
SCOTCH PLAINS-FANWOOD EDUCATION
ASSOCIATION,
Defendant-Appellant.
DECIDED January 26, 1995
Chief Justice Wilentz PRESIDING
OPINION BY Justice Stein
CONCURRING OPINION BY
DISSENTING OPINION BY