New Jersey Supreme Court Issues Important Decision on Ability of Union to Bargain Away Benefits of Public Employees

The New Jersey Supreme Court recently issued an important employment law decision in the case of  Barila v. Board of Education of Cliffside Park regarding the ability of unions to bargain away employee benefits enjoyed under prior contracts.

Benefits, such as time off, are terms and conditions of employment which may be bargained for in collective negotiations.  (The term “collective negotiations” is used in the public sector instead of “collective bargaining” because, unlike in the private sector, government employees do not have the right to strike under New Jersey employment law.)  The resulting contract (or “collective negotiation agreement”) sets the terms and conditions of employment, provided the parties have bargained in good faith and the employees receive the minimum levels required by statute.

In this case, under prior contracts between the Cliffside Park Board of Education and the teachers union, including the most recent one in effect from 2012 through 2015, longer term employees could carry over and be paid for their unused sick days up to $25,000.  Not all employees could do so, however, because the New Jersey Legislature had passed a law limiting payment for unused sick time to $15,000 for employees who commenced work on May 21, 2010 or thereafter.  The statutory limit did not apply to employees who started work before May 21, 2010.

In 2015 the Cliffside Board of Education and the teachers union negotiated a contract in which the amount of per day value credited for carried over unused sick days was increased so that the maximum payout was reached sooner, but limited all employees to a maximum total payout of $15,000, regardless of when they started.  This caused several longer term teachers to lose significant income, up to $10,000 each.  They therefore sued so that they would receive the full $25,000 they had been relying on.

They won their case in the Chancery Division of the Superior Court of New Jersey and the Appellate Division.  The Board then appealed to the New Jersey Supreme Court which, in an opinion written by Justice Anne Patterson, reversed and upheld the limitation on sick time payouts for all teachers under the 2015 contract.

The teachers argued that the right to the higher payout was vested (ie., earned and complete) when they had the requisite number of carried over sick days under the prior contracts, and such a  vested right could not be bargained away by the union.  The Supreme Court disagreed.  It held that under the New Jersey Employer-Employee Relations Act, time off is a topic which is subject to mandatory bargaining, which neither party disputed.  Thus, carried over sick time could be bargained over.  The question was, did the 2012 and prior contracts give the teachers a vested right to be paid up to $25,000 for their unused sick time.

The Supreme Court said that the teachers had no such vested right.  Moreover, it said that the union could bargain away benefits previously in force under prior contracts provided they were not preempted by statute.  It was undisputed that the union knew they were lowering the rights of the longer term employees, and intended to do so.  Thus, the Supreme Court held, the 2015 contract should be enforced as written.

Justice Barry Albin dissented.  Albin believed that whether the right to the higher payment for carried over unused sick time was vested or not should not be the deciding factor.  It was a right, and thus before it could be bargained away the contract had to make clear that the intent was to waive that right.  Although union representatives who negotiated the contract for the union testified that they knew that they were giving up that right, and intended to do so, in exchange for the higher daily value on carried over sick time and other concessions from the Board of Education, the contract did not say that, and therefore there could be no waiver of that right regardless of whether the right was vested or not.

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