Mount Holly Tp. Bd. v. Mount Holly

972 A.2d 387

199 N.J. 319

MOUNT HOLLY TOWNSHIP BOARD OF EDUCATION, Plaintiff-Respondent, v. MOUNT HOLLY TOWNSHIP EDUCATION ASSOCIATION and Juan Gonzalez, Defendants-Appellants.

A-24 September Term 2008

Supreme Court of New Jersey.

Argued January 5, 2009.

Decided June 24, 2009.

Steven R. Cohen, Mount Laurel, argued the cause for appellants (Selikoff & Cohen, attorneys; Mr. Cohen and Carol H. Alling, on the brief).

James F. Schwerin argued, Lawrenceville, the cause for respondent (Parker McCay, attorneys).

Chief Justice RABNER delivered the opinion of the Court.

Plaintiff Mt. Holly Township Board of Education (Board) terminated Juan Gonzalez, a custodian, after conducting a disciplinary hearing. At the time, Gonzalez was in the middle of a one-year individual employment contract. The Board terminated him under that contract, and not the existing collectively negotiated agreement (CNA) between the Board and defendant Mt. Holly Township Education Association (Association).

Under the individual contract, Gonzalez was entitled to and received fourteen days' notice of termination. Under the CNA, employees could not be discharged without just cause. Any such action was subject to the grievance procedure outlined in the CNA, which allowed for arbitration.

The Association filed a grievance on Gonzalez's behalf and requested arbitration. The trial court permanently restrained arbitration, and its judgment was affirmed on appeal.

Today we reaffirm principles established in Lullo v. International Ass'n of Fire Fighters, 55 N.J. 409, 428, 262 A.2d 681 (1970), and Troy v. Rutgers, 168 N.J. 354, 375-76, 774 A.2d 476 (2001), which concluded that when provisions in an individual employment contract conflict with the terms in a CNA, and diminish or interfere with rights provided by the CNA, the language in the individual contract must yield to the collective agreement.

Because we find that Gonzalez's individual employment contract conflicted with the CNA and diminished its specific terms by depriving him of the right to arbitration, we reverse and remand. That approach is consistent with the Legislature's recent command that in interpreting the meaning of a grievance arbitration clause, "doubts should be resolved in favor of requiring arbitration." N.J.S.A. 34:13A-5.3. Accordingly, on remand, Gonzalez is entitled to a hearing before an arbitrator to address the grievance filed.

I.

The relevant facts are not in dispute. Plaintiff Mt. Holly Township Board of Education is a public school board of education and, thus, a public employer within the meaning of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -39. Defendant Mt. Holly Township Education Association is a public employee representative under the Act, and is the sole representative for collective negotiations about terms and conditions of employment for custodians and certain other school employees.

The Board and the Association entered into a CNA for the period from July 1, 2004 through June 30, 2007. Its provisions applied to all employees in the negotiation unit, including custodians and maintenance workers.

The CNA contains a "just cause" provision at Article IX(B), which states that

[n]o employee shall be discharged, disciplined, reprimanded, reduced in rank or compensation, or deprived of any professional advantage or given an adverse evaluation of his/her professional services without just cause. Any such action asserted by the Board or any agent or representative thereof, shall be subject to the grievance procedure herein set forth.

[(emphasis added).]

"Grievance" is defined at Article XV(A)(1) as

an allegation that there has been a breach, misinterpretation or improper application of the terms of this Agreement, or a claimed violation, misinterpretation, or misapplication of rules or regulations, existing policies, or administrative decisions that affect the terms and conditions of employment.

Article XV(A)(3) specifically excludes non-renewal of a contract for a non-tenured employee from the definition of grievance. There is no comparable exclusion for the termination or discharge of an employee mid-contract.

Under the CNA, an aggrieved employee is to follow a five-step grievance process outlined in Article XV(C). The process progresses from an initial discussion with an immediate supervisor to binding arbitration.

In addition, Article IX(E)(3) affords all employees who are not renewed or terminated, as well as those who are disciplined, the right to request a statement of reasons and a hearing before the Board. The CNA deals separately with layoffs tied to a reduction in force in Article XII, which we do not address in this opinion.

The Board hired Juan Gonzalez as a non-tenured custodian/maintenance worker. Before starting in that position, Gonzalez signed a standard, individual contract for employment, prepared by the Board, covering the period from July 1, 2005 through June 30, 2006. The contract expressly stated that it "may at any time be terminated by either party" on fourteen days' written notice.

Months after he began working, Gonzalez was accused of striking another custodian. The Board held a disciplinary hearing on January 20, 2006, and terminated Gonzalez in a letter that same day. The letter stated: "As per the discipline hearing held this afternoon, your position as custodian/maintenance for the Mt. Holly Township Public Schools is terminated effective February 3, 2006 in accordance with your employment contract."

The Association filed a timely grievance with the Board, challenging the decision to terminate Gonzalez and claiming it was done without just cause. After the Board denied the grievance, the Association filed a request for binding arbitration, thereby seeking a hearing on the facts of Gonzalez's discharge.

On April 24, 2006, the Board filed an action in the Chancery Division seeking to restrain arbitration. The Board argued that because Gonzalez was terminated under the fourteen-day notice provision of his individual employment contract, the matter was not arbitrable under the CNA.

The Chancery Division granted the motion to restrain arbitration permanently, noting that the individual employment contract's termination-on-notice clause did not conflict with the CNA's just-cause provision.

The Association appealed. The Appellate Division stayed oral arguments until this Court had the opportunity to issue decisions in Pascack Valley Regional High School Board of Education v. Pascack Valley Regional Support Staff Ass'n, 192 N.J. 489, 933 A.2d 589 (2007), and Northvale Board of Education v. Northvale Education Ass'n, 192 N.J. 501, 933 A.2d 596 (2007), which involved issues similar to those presented here. On April 21, 2008, the Appellate Division affirmed the trial court's judgment, relying heavily on the ruling in Pascack Valley.

Pascack Valley also involved a custodian accused of inappropriate behavior at work. 192 N.J. at 493, 933 A.2d 589. After a disciplinary hearing, he was terminated in the middle of his employment contract under a similarly-worded clause that provided for fifteen, rather than fourteen, days' notice. Id. at 492-94, 933 A.2d 589. As in this case, the custodian's employment was also governed by a CNA containing a just-cause provision. That clause stated that disciplinary action was subject to a grievance procedure. In a separate sentence, the CNA added that "[a]ny dismissal or suspension shall be considered a disciplinary action and shall at the option of the custodian ... be subject to the Grievance Procedure." Id. at 492, 933 A.2d 589 (emphasis added). After analyzing the individual and collective agreements and relevant case law, this Court concluded that arbitration was required for dismissal of a custodian under the specific terms of the CNA. Id. at 500, 933 A.2d 589.

In this case, the Appellate Division found the above underscored language — not present in the Mt. Holly CNA — to be dispositive of the appeal. The panel concluded that the quoted passage was critical to this Court's holding in Pascack Valley. In the absence of identical or comparable language, the panel found, the Board was entitled to terminate Gonzalez on fourteen days' notice under the individual employment agreement, without showing just cause or having its termination decision subject to the CNA's grievance procedure.

The panel went on to note that Gonzalez could nonetheless obtain a statement of reasons for his termination and a hearing under Article IX(E)(3) of the CNA.

We granted the Association's petition for certification. 196 N.J. 346, 953 A.2d 764 (2008).

II.

The Association argues that Gonzalez has a contractual right to arbitration under the CNA, which cannot be voided by his individual employment contract. The Association contends that the Appellate Division erred in the way it applied Pascack Valley to this case and overlooked the import of the presumption in favor of arbitrability in N.J.S.A. 34:13A-5.3. The Appellate Division ruling, it argues, undermines the constitutional and statutory rights of public employees to negotiate collectively with their employers. In addition, the Association submits that the existence of a procedure for obtaining a statement of reasons and a hearing regarding termination does not eliminate the CNA's grievance procedures.

The Board urges this Court to affirm the Appellate Division decision. The Board contends that the issue presented has already been resolved by Camden Board of Education v. Alexander, 181 N.J. 187, 854 A.2d 342 (2004), and that the amendment to N.J.S.A. 34:13A-5.3 following that decision — and adding a presumption in favor of arbitrability — is not relevant here. The Board also relies on Northvale, supra, in which an Appellate Division decision restraining arbitration was affirmed by a 3-3 vote. 192 N.J. at 501, 933 A.2d 596. In addition, the Board maintains that there is no conflict between the notice provision of the individual...