ONLY ON CLIFFVIEW PILOT: A state appeals court has upheld an arbitrator’s decision not to consider private-sector compensation for his award to Fort Lee PBA Local 235 because a police officer holds “a uniquely public sector position that does not lend itself to private sector comparisons.”
The borough and PBA went to battle after a previous collective bargaining agreement expired on Dec. 31, 2006. Unable to agree on a three-year contract, they were sent to arbitration by the Public Employment Relations Commission (PERC).
The PBA, which represents about 100 officers, proposed an across-the-board 5% salary increase in each year on each rank, step, and position. The borough pitched split raises: a 3% increase on Jan. 1, beginning in 2007, and a 1% increase on June 1 of each year, as well as a freeze on starting pay/academy step for new hires.
The PBA also proposed folding holiday pay into base salary as comp time, to be used in figuring overtime and pensions.
Fort Lee officials balked, citing the financial impact on pensions, and appealed to PERC to wipe the proposal from the negotiations. PERC refused, noting that the Division on Pensions and Benefits alone decides whether fold-ins apply to pension calculations.
The PBA also proposed a medical opt-out provision of 50% of the amount of premium the borough saved, to be paid to the opting-out officer no later than November in each calendar year.
Fort Lee officials countered with a health and prescription plan that would transfer officers from the PBA Traditional and Direct Access plans to the less-costly civilian Traditional and Direct Access plans, effective July 1, 2008.
The arbitrator, in turn, agreed to split the pay hikes, producing an overall boost of 15 percent over the course of the contract‘s four years, a point lower than the borough had asked.
Collectively, that comes to $1.4 million for four years — $1,451 less than the borough’s proposal and $786,665 less than the PBA’s. The arbitrator called it “a modest increase in real earnings consistent with historical trends.”
He also upheld the borough’s health and prescription plans, saying they were consistent with other Bergen towns. But he granted the PBA’s medical opt-out proposal, effective Jan. 1, 2009, applicable to both the health and medication plans.
The salary awards for 2007 and 2008 were the same as the borough’s proposal — only the arbitrator delayed the mid-term increase from June 1 to July 1, thus saving the borough $52,324 in 2007, $54,432 in 2008, $56,351 in 2009, and $58,338 in 2010, court papers show.
He also noted that awarding the municipality’s health and prescription plan proposal saves the borough $124,588 for both 2009 and 2010.
What’s more, the arbitrator selected a different salary schedule for new hires, which he said would offset the pay hikes for current officers.
Based on Fort Lee’s past hiring patterns, the abridged salary schedule for new hires could save nearly $1 million in cumulative earnings as each officer moved through the salary guide with two added steps, he explained.
Finally, the arbitrator found that folding in holiday pay was nothing that several other Bergen County municipalities weren’t already doing.
The arbitrator said the award satisfied the interests and welfare of the public “to maintain labor harmony and high morale and to provide adequate compensation levels to attract and retain the most qualified employees[,]” and “maintain the Borough’s ability to recruit and retain qualified and experienced police officers consistent with the requirements of this factor.”
It would have no adverse financial impact on the borough or its taxpayers and would “provide for an acceptable increase in real earnings that must be measured against the continued delivery of quality services by the Borough’s police officers,” he found.
The borough challenged the holiday pay fold-in, the new salary steps, and a $150-per-officer annual payment for legal defense insurance. PERC, however, said the arbitrator properly addressed the financial impact and the effect on pension costs.
However, the agency stayed the award until the arbitrator could address two issues:
(1) comparability to private and public sector employees in general (he had focused on the latter),
(2) the impact of the $1 million in projected savings from the new salary schedule for new hires based on evidence of a hiring freeze the borough submitted to PERC.
The arbitrator, in turn, said his ruling stands.
For one thing, he said, the borough would immediately save money through the hiring freeze, the new pay scale and the holiday pay fold-in.
For another, there were “no easily identif[iable] private sector police officers who perform services similar to those performed by Borough police officers[;]” and “[a] police officer’s position is a uniquely public sector position that does not lend itself to private sector comparisons,” the arbitrator found.
Comparing public employment in general, he said, his decision falls right in line with what other public servants are getting.
PERC affirmed the award, and borough officials went to the state Court of Appeals. They argued, in part, that the arbitrator “did not sufficiently analyze all of the statutory factors but merely provided a perfunctory analysis and conclusory assertions“ and “improperly focused on Bergen County comparative salaries and the Borough’s ability to pay.”
However, the appellate judges said case law provides for arbitrators to determine what factors are or aren’t relevant in such instances.
“Because the Legislature entrusted arbitrators with weighing the evidence, PERC will not disturb an arbitrator’s exercise of discretion” unless the arbitrator doesn’t meet specific standards. In this case, the panel ruled, those standards were met.
“PERC’s decision will stand unless clearly arbitrary or capricious,” said Judges Mary Catherine Cuff, Paulette M. Sapp-Peterson, and Marie P. Simonelli, citing case law.
That clearly wasn’t the case with this arbitrator, whose “reasoned analysis, as supplemented by his decision on remand, was supported by substantial credible evidence,” they wrote in their decision.
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