BERGEN COUNTY SHERIFF'S OFFICE AND COUNTY OF BERGEN VS. POLICEMEN'S BENEVOLENT ASSOCIATION (L-3627-16, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court."

Although it is posted on the internet, this opinion is binding only on the

parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NOS. A-0485-16T2

A-0486-16T2

BERGEN COUNTY SHERIFF'S

OFFICE and COUNTY OF BERGEN,

Plaintiffs-Appellants,

v.

POLICEMEN'S BENEVOLENT

ASSOCIATION, LOCAL 49, BERGEN

COUNTY POLICE DEPARTMENT,

Defendants-Respondents.

_______________________________

Argued September 19, 2017 – Decided October 31, 2017

Before Judges Reisner, Hoffman, and Gilson.

On appeal from the Superior Court of New

Jersey, Law Division, Bergen County, Docket

No. L-3627-16.

John J. McCann argued the cause for appellant

Bergen County Sheriff's Office (C. Elston &

Associates, LLC, attorneys; Mr. McCann, of

counsel and on the briefs; Cathlene Y. Banker,

on the briefs).

Frank P. Kapusinski, Assistant County Counsel,

argued the cause for appellant County of

Bergen (Julien X. Neals, County Counsel,

attorney; Mr. Kapusinski, of counsel and on

the briefs).

Michael A. Bukosky argued the cause for

respondents (Loccke, Correia & Bukosky,

attorneys; Mr. Bukosky, of counsel and on the

brief).

PER CURIAM

The issue presented in these consolidated appeals is whether

the County of Bergen (County) agreed, in a collective bargaining

agreement, to arbitrate whether the County police officers would

receive a retroactive pay increase if the Bergen County Police

Department merged into the Bergen County Sheriff's Office

(Sheriff's Office). The County contends that the Bergen County

Police Department was realigned with, but not merged into, the

Bergen County Sheriff's Office. The Police Benevolent

Association, Local 49 (PBA 49), which represents the Bergen County

police officers, argues that there was a merger thereby entitling

County police officers to a retroactive pay raise.

We hold that the parties agreed to arbitrate all issues

concerning the interpretation of the contract and, therefore, the

underlying question concerning the pay increase is to be decided

by the arbitrator. Our Supreme Court has instructed that if a

collective bargaining agreement confers the issue of the

interpretation of that agreement to an arbitrator, then the

arbitrator, and not a court, must interpret the agreement.

Amalgamated Transit Union, Local 880 v. N.J. Transit Bus

2 A-0485-16T2

Operations, Inc., 200 N.J. 105, 118 (2009). Thus, we affirm an

August 19, 2016 order denying the request by plaintiffs, the

Sheriff's Office and the County (collectively, plaintiffs), to

enjoin the arbitration and granting the motion of defendant PBA

49 to dismiss plaintiffs' complaint for a declaratory judgment.

I.

Historically, Bergen County has had a police department and

a sheriff's office. The Administrative Code of Bergen County,

adopted in 2007, stated that the "Police Department" was a division

of the Department of Public Safety, led by a director appointed

by the County Executive. That same Code identified the Sheriff

as a constitutional officer and the head of a separate "department"

with officers and employees under his or her jurisdiction.

The County and PBA 49 have been parties to a collective

bargaining agreement (CBA) for several decades. As previously

noted, PBA 49 represents the County police officers, except the

chief and deputy chief. The base terms of the current CBA were

agreed to in 2001, and that CBA has been extended and modified by

agreements executed in 2002, 2010, 2011, and 2014.

For a number of years, the County has considered the idea of

combining or reorganizing the Bergen County Police Department and

the Sheriff's Office. In 2012, the Freeholders rejected a proposed

ordinance to dissolve the County police and transfer its functions

3 A-0485-16T2

to the Sheriff's Office. The following year, the Freeholders

adopted Ordinance No. 13-27, transferring the County police to the

Sheriff's Office. The then County Executive vetoed that ordinance,

and the Freeholders voted to override that veto. That dispute

between the County Executive and Freeholders engendered a lawsuit,

which was later dismissed after a new County Executive was elected.

In January 2014, the County Executive executed an extension

of the CBA with PBA 49 (the 2014 CBA Extension). Among other

things, the 2014 CBA Extension addressed the salaries of County

police officers. The 2014 CBA Extension provided that County

police officers would receive certain salaries, however, if the

County police were "merged/consolidated" into the Sheriff's

Office, then the County police officers would receive different

salaries, which effectively would be retroactively increased

salaries. Specifically, paragraph one of the 2014 CBA Extension

states:

1. Article VIII, Salaries – Attached as

Exhibit A is a new salary guide for all

officers hired after January 1, 2014. Current

officers who have not achieved top pay will

progress under the existing salary guide until

he/she achieves top pay. All officers will

receive a 1.5% increase (applied to the salary

guides) for each year of the agreement

(January 1, 2014 – January 1, 2017). Article

VIII, Paragraphs 1-4, 6-7 and Exhibit B are

no longer operative, unless the County police

are merged/consolidated into the Bergen County

Sheriff's Office or disbanded, in which event,

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Paragraphs 1-4, 6-7 and Exhibit B become

retroactively operative effective January 1,

2014.

On May 14, 2014, the Freeholders adopted a resolution approving

the 2014 CBA Extension.

In January 2015, a new County Executive entered into a

memorandum of agreement with the County Sheriff and Prosecutor

that addressed the organization of the County Police Department

(the 2015 MOA). The 2015 MOA stated that the Bergen County Police

Department was being realigned with the Sheriff's Office. In that

regard, the 2015 MOA provided that once the Freeholders adopted

an ordinance transferring all operational and administrative

authority over the County police to the Sheriff's Office, the

County police will be known as "Bergen County Sheriff, Bureau of

Police Services." The 2015 MOA goes on to provide that the Bergen

County Police Department will continue to be a separate unit

overseen by the Sheriff's Office and that there will be no changes

required to any existing labor contracts. The 2015 MOA also states

that the number of officers is expected to be reduced through

attrition to a maximum level of 201 officers, representing a

reduction of over fifty County police officers and the retention

of the current authorized strength of 152 Sheriff's officers.

In January 2015, the Freeholders adopted Resolution No. 42-

15, approving the 2015 MOA. The Freeholders also adopted an

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ordinance reflecting the organizational transfer set forth in the

2015 MOA and identifying the Bergen County Police Department as

"Bergen County Sheriff, Bureau of Police Services." Another

ordinance established a table of organization for the County police

for the "Post-Realignment Period."

In February 2016, PBA 49 filed a grievance under its CBA,

alleging that the County police had merged into the Sheriff's

Office and, therefore, officers were entitled to a retroactive

salary increase under the 2014 CBA Extension.

Article XVI of the CBA between the County and PBA 49 sets

forth a grievance procedure. A grievance is defined as

any dispute between the Employer and the

Employee with respect to the interpretation,

application or violation of any of the

provisions of this Agreement, or a dispute

between the same parties concerning rules,

regulations, or administrative decisions

qualifying as terms and conditions of

employment and which intimately and directly

affect the work and welfare of the Employees.

The CBA goes on to provide for a three-step grievance process.

First, the grievance is submitted to the Chief. Second, if not

settled by the Chief, the grievance is submitted to the County

Administrator. Finally, if the grievance remains unresolved, an

arbitrator is appointed by the Public Employment Relations

Commission (PERC). The arbitrator "shall have full power to hear

the grievance and make a final decision, which decision shall

6 A-0485-16T2

neither modify, add to, nor subtract from the terms of the [CBA]

and the above referenced rules, regulations or administrative

decisions." The arbitrator's decision is binding on the parties.

In response to the grievance filed by PBA 49 in February

2016, the Chief of the Sheriff's Office denied the grievance. The

Chief contended that a merger had not occurred, rather, the County

police had realigned with the Sheriff's Office. PBA 49 next

submitted what it contended was a second-step grievance to the

County's Director of Personnel.1 Thereafter, in April 2016, PBA

49 submitted a request to PERC for appointment of an arbitrator

to arbitrate the dispute.

The County responded by asking PERC to hold the arbitration

in abeyance while it sought a declaratory judgment from a court.

PERC denied that request, and the County and the Sheriff's Office

filed a declaratory judgment action in the Law Division. In their

complaint, the County and the Sheriff's Office sought a declaration

that the County police had not been merged or consolidated into

the Sheriff's Office and, therefore, the County police were not

entitled to a retroactive salary increase. The County and the

1

The County contends that the second-step grievance should have

been submitted to the County Administrator. Nevertheless, both

parties agree that the grievance was not resolved and a third-step

grievance was submitted to PERC for the appointment of an

arbitrator.

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Sheriff's Office also sought an injunction to prevent the

arbitration from proceeding.

PBA 49 opposed the request for an injunction and filed a

motion to dismiss the complaint so that the arbitration could

proceed. The trial court heard arguments on the applications. On

August 19, 2016, the trial court entered an order denying the

request of the County and the Sheriff's Office for an injunction

and dismissing their complaint for declaratory relief. The court

also issued a written opinion explaining its rulings. In short,

the trial court found that the County had agreed to arbitrate the

question of whether the County police were entitled to a salary

increase if there was a merger or consolidation of the County

police with the Sheriff's Office.

The County and the Sheriff's Office filed a motion for

reconsideration, but the trial court denied that motion in an

order entered on September 20, 2016. The County and the Sheriff's

Office then filed separate appeals from the orders entered on

August 19, 2016 and September 20, 2016. We consolidated the

appeals.

The County and the Sheriff's Office also sought a stay of the

arbitration pending the appeals, which the trial court granted.

8 A-0485-16T2

II.

On appeal, the County and the Sheriff's Office make a series

of arguments that are all designed to contend that a court, as

opposed to an arbitrator, should decide whether the County police

did or did not merge into the Sheriff's Office. Thus, plaintiffs

argue the trial court erred by: (1) not making a declaratory

judgment on that issue; (2) failing to consider an "admission" by

counsel for PBA 49 that the County Police Department remained a

"separate agency" after the reorganization; (3) failing to

consider if the question whether a realignment occurred could be

answered by the terms of the CBA; and (4) denying their motion for

reconsideration.

While framed in different ways, only one issue is presented

on these consolidated appeals: Did the County and PBA 49 agree to

arbitrate the effect on salaries of the County Police if the County

Police Department was merged or consolidated into the Sheriff's

Office? We hold that they agreed to arbitrate and hence the

underlying question is an issue for the arbitrator.

We begin our analysis with an overview of the well-settled

law governing arbitration. We then review the language of the

CBA. Finally, we address the specific arguments put forward by

plaintiffs.

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A. The Law Governing Arbitration

Agreements to arbitrate are contracts and, therefore, subject

to the law governing contract interpretation. Garfinkel v.

Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 134-35

(2001). Accordingly, in interpreting the CBA here, we start with

its plain language. See id. at 135 (holding that the "intent

expressed or apparent in the writing [] controls" the

interpretation of an arbitration agreement).

Initially, the court needs to decide "whether the party

seeking arbitration is making a claim which on its face is governed

by the [CBA]." Standard Motor Freight, Inc. v. Int'l Bhd. of

Teamsters, 49 N.J. 83, 96 (1967) (citing United Steelworkers of

Am. v. Am. Mfg. Co., 363 U.S. 564, 567-68 (1960)). In Standard

Motor, our Supreme Court addressed the issue of arbitrability and

identified two categories: "substantive" arbitrability and

"procedural" arbitrability. Standard Motor, supra, 49 N.J. at 96-

97. "Substantive" arbitrability refers to "whether the particular

grievance is within the scope of the arbitration clause [in the

CBA] specifying what the parties have agreed to arbitrate." Id.

at 96. Thus, the Court explained that

a party cannot be required to submit to

arbitration any dispute which he [or she] has

not agreed so to submit . . . . [T]he judicial

inquiry . . . must be strictly confined to the

question whether the reluctant party did agree

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to arbitrate the grievance or did agree to

give the arbitrator power to make the award

he [or she] made.

[Ibid.]

Thus, courts are limited to ascertaining whether the party

seeking arbitration is making a claim that on its face is governed

by the contract. If the answer is yes, then that question of

contract interpretation is for the arbitrator. See Amalgamated

Transit Union, supra, 200 N.J. at 114.

"Procedural" arbitrability asks "whether procedural

conditions to arbitration have been met." Standard Motor Freight,

supra, 49 N.J. at 97. "The grievance process itself is used to

decide matters of procedural arbitrability and, so, arbitrators

are the decision-makers for those concerns." Amalgamated Transit

Union, supra, 200 N.J. at 116 (citing Standard Motor Freight,

supra, 49 N.J. at 97).

Our Supreme Court has also explained that whether a question

is substantively versus procedurally arbitrable is not always the

relevant inquiry. Amalgamated Transit Union, supra, 200 N.J. at

117. Instead, the critical question is whether the issue being

presented is a question to be decided by the arbitrator. Thus,

if a question requires an interpretation of the CBA, and the CBA

makes clear that such questions are for an arbitrator, then the

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court's only role is to refer that question to arbitration. Id.

at 118-19.

This appeal is governed by the decision in Amalgamated Transit

Union. In Amalgamated, a probationary employee of New Jersey

Transit and member of the union was terminated during his probation

period for providing false information on his employment

application. Amalgamated Transit Union, supra, 200 N.J. at 109-

10. The union filed a grievance concerning the termination. It

sought arbitration in accordance with the provisions in the CBA

that permitted arbitration of any dispute or grievance "as to the

interpretation, application, or operation of any provisions of

this agreement[.]" Id. at 110. The arbitration panel concluded

that the termination of a probationary employee was not subject

to arbitration under the agreement. The trial court agreed, but

the Appellate Division reversed. The Appellate Division

determined that a court, not the arbitration panel, must decide

whether the grievance was subject to arbitration. The Appellate

Division then interpreted the agreement to permit arbitration of

the grievance.

The Supreme Court reversed. The Court concluded that under

the terms of the collective bargaining agreement, the arbitration

panel, not the court, must decide whether a probationary employee

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could invoke the arbitration provision and grieve his termination.

Id. at 119-20. In reaching that conclusion, the Court explained:

[T]he CBA clearly conferred that broadly

stated power to interpret this CBA on the

arbitrators. Thus, the CBA's arbitration

provision granted to the arbitrators the

authority to decide this question about their

own jurisdiction. Any court looking at this

CBA should have seen that it conferred broad

interpretive power on the arbitrators and

should have left the question for

interpretation to the decision-makers

designated by this CBA.

[Id. at 118.]

B. The CBA between the County and PBA 49

The CBA between the County and PBA 49 broadly defines

"grievance" as "any dispute between the [County] and the [PBA 49]

with respect to the interpretation, application or violation of

any of the provisions of this Agreement . . . ." Like the CBA in

Amalgamated, the CBA here provides that disputes over the

interpretation of the agreement are subject to arbitration.

Consequently, the question whether the County police officers are

entitled to different salaries because the County police was merged

into the Sheriff's Office is a question for the arbitrator to

decide.

The issue is not whether the County could reorganize its

County Police Department. It could. Instead, the issue is if the

County Police Department was reorganized with the Sheriff's

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Office, are the County police officers entitled to a retroactive

pay raise? The 2014 CBA Extension states that if the

reorganization is a merger or consolidation, then the County police

officers receive a retroactive pay increase. If, on the other

hand, the reorganization was not a merger or consolidation, then

the County police officers do not receive a pay increase. That

question requires an interpretation of the CBA, and thus is not

for a court to decide. Instead, in the grievance procedure in the

CBA, the parties agreed that an arbitrator would decide that

question.

C. The Plaintiffs' Specific Arguments

When the narrow question before the court is properly framed,

the arguments by plaintiffs can be summarily addressed.

First, plaintiffs are not entitled to a declaratory judgment

by a court because they had previously agreed that an arbitrator

would make that decision. The declaratory judgment action allows

a court to determine any question of construction arising under,

among other things, a contract. N.J.S.A. 2A:16-53; Carter v. Doe,

__ N.J. __, __ (2017) (slip op. at 23) (citing Rego Indus., Inc.

v. Am. Modern Metals Corp., 91 N.J. Super. 447, 453 (App. Div.

1966)). If, however, the contract calls for that determination

to be made by an arbitrator, a party cannot sidestep the agreement

to arbitrate that issue by filing a declaratory judgment action.

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Second, plaintiffs' argument concerning an admission

allegedly made by counsel for PBA 49 is a question for the

arbitrator to consider. In other words, plaintiffs seek to have

the court determine whether a merger took place. As we have

already explained, the arbitrator will interpret the language in

the 2014 CBA Extension to determine whether it triggers or does

not trigger a salary increase. In so doing, the arbitrator will

also be free to consider plaintiffs' arguments concerning an

alleged admission made by PBA 49.

Third, the question of whether there was a realignment is not

the relevant issue. The 2014 CBA Extension uses the phrase

"merged/consolidated[.]" The arbitrator will interpret that

phrase within the confines of deciding a salary issue.

Finally, since we have held that the trial court correctly

denied the injunction of the arbitration and dismissed the

declaratory judgment action, there was no error in denying the

motion for reconsideration.

The County and PBA 49 also debate whether the question

presented to the trial court was a question of law or fact. Here,

that is not the controlling issue. Parties can agree to present

questions of law to an arbitrator. Perini Corp. v. Greate Bay

Hotel & Casino, Inc., 129 N.J. 479, 493 (1992) (granting

arbitrators broad latitude in resolving questions of law when

15 A-0485-16T2

interpreting contracts). Here, the CBA expressly stated that any

interpretation of the CBA would be a question subject to the

grievance procedures, with the ultimate step being binding

arbitration. The only limitation to such an agreement in a public

collective bargaining agreement would be questions of public

policy and managerial prerogative. City of Jersey City v. Jersey

City Police Officers Benevolent Ass'n, 154 N.J. 555, 571 (1998).

Here, no party argued that there was a public policy reason against

enforcing this arbitration provision, and no party argued that the

disputed interpretation of the agreement involved managerial

prerogative. Indeed, we discern neither a public policy problem

nor a limitation on managerial prerogative.

Affirmed. The stay of the arbitration is vacated.

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