# Petition for Writ of Certiorari — Port Authority Police Benevolent Association, Inc. v. Port Authority of New York and New Jersey (No. 08-274) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0207%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2008 ## Text \0A a) Siomepe C #, US. 08-27 4 AUG 28 2008 No. 07-A1016 Witiam K. Suter, Clerk IN THE Supreme Court of the United States PORT AUTHORITY POLICE BENEVOLENT ASSOCIATION, INC., Petitioner, Vv. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Respondent. On Petition for a Writ of Certiorari to the Supreme Court of New Jersey PETITION FOR A WRIT OF CERTIORARI WILLIAM J. JOHNSON JONATHAN G. AXELROD * 317 South Patrick St. HUGH J. BEINS Alexandria, VA 22314 H. DAVID KELLY, JR. JUSTIN P. KEATING BEINS, AXELROD, P.C. 1625 Massachusetts Ave., N.W. Washington, D.C. 20036 * Counsel of Record 202-328-7222 August 28, 2008 WILSON-EPES PRINTING Co.,INC. — (202) 789-0096 — WASHINGTON, D. C. 20002 QUESTIONS PRESENTED Whether the Supreme Court of New Jersey was required by the Compact Clause to apply federal law when reviewing the decision of an admin- istrative agency created by the congressionally sanctioned Compact Agency. Whether the Supreme Court of New Jersey improperly applied New Jersey law instead of federal law to review the decision of the admin- istrative agency created by the Compact Agency. Whether the decision of the Supreme Court of New Jersey is compatible with federal law. (i) il PARTIES TO THE PROCEEDING The following were parties to the proceeding in the Supreme Court of New Jersey: Port Authority of New York and New Jersey Port Authority Empioyment Relations Panel Port Authority Police Benevolent Association, Inc. CORPORATE DISCLOSURE The Port Authority Police Benevolent Association, Inc., is a New York not-for-profit corporation with membership limited to sworn law enforcement. per- sonnel employed by the Port Authority of New York and New Jersey. TABLE OF CONTENTS Page QUESTIONS PRESENTED ......................ccceeeseeee i PARTIES TO THE PROCEEDING .................... il CORPORATE DISCLOSURE ............................. il TABLES OF AUTHORITIBG ...00:..ccccccccssssscccessocess v I sins nncvceneddnbsenonnisssccetonserss 2 il cccilidnnnisedisnbonaeeinmnnenee 2 RELEVANT STATUTORY PROVISIONS ......... 2 STATEMENT OF THE CASE ..................ccceeeeees 2 REASONS FOR GRANTING THE PETITION.. 13 A. Federal Law Governs the Scope of I citinincininnithsiiishnsniasncniniotaninens 17 B. As the Creation of the Compact, the Instruction Must Be Interpreted According to Federal Law......................00. 21 2 cctsieemsepinconainiiins 26 APPENDICES i i did ciaeiatsnemanninniocenedties la Supreme Court of New Jersey...................000005 la EES a 39a TED 39a EEN On ee 8la Port Authority Employment Relations Panel. 8la aa anadeaionsdl 102a Superior Court of New Jersey ...................00004- 102a (iii) iv TABLE OF CONTENTS—Continued Page ITI Tl ciciiniciningoinesiatinncimenenionnenbenvaielitines 117a Superior Court of New Jersey - Appellate as eltalaipeteaseiapelaipeialaniaile 117a STRESS RENO Hw! Cn ERED ie coc EON EN 120a Pertinent Constitutional and Statutory EASE SN Pe a 120a iia rsemscgatiniisiisisaniiviintin’ 120a I III sc sicnscstitantutisiadvntioninsdennbuesoves 120a McKinney Unconsolidated Laws §7141....... 12la , —«_—«d— SERRE | sz MCE NE Sane 123a Port Authority Police Decent Benevolent Association v. Port Authority of New York NN eitasiciti da cnstnielinniviasenndivitanicucnnninanatiocal 123a Vv TABLE GF AUTHORITIES CASES Page Agesen v. Catherwood, 260 N.E.2d 525 tsk SaP TD cnceinstinniccikeinivcitiiinicvicnailinaainiaiiliceige 22 Auto Workers v. NLRB (General Motors), 381 F.2d 265 (D.C. Cir.), cert. denied, ait & 6g. Ee See 24 Baron v. Port Authority of New York and New Jersey, 968 F.Supp. 924 (S.D.N.Y. ND dcisinesiecbiiaiaitlpahpediacddumiedaliastabidinaninices 22 Beebe v. Washington Metropolitan Area Transit Authority, 129 F.3d 1283 (D.C. ta SEIT De deciieichechcsaiechinoasiluiaitsdieihdbnandsadiihaidiniagen 17, 18 Beth Israel Hospital v. NLRB, 437 U.S. tiniest sass istaiiitehaininiiaiinikeniiabab lata 19, 20 Blanchette v. Cataldo, 734 F.2d 869 (1st ATE iediiinsistiinicacsistiiundiahipeiditidladadbiieniiionititelniosee 25 Brooklyn Bridge Park Coalition v. Port Authority of New York and New Jersey, 951 F.Supp. 383 (E.D. N.Y. 1997)............ 14 Bunk v. Port Authority of New York and New Jersey, 676 A.2d 118 (N.J. 1996)...... 16 City of Jersey City v. Jersey City Police Officers Benevolent Association, 713 PS Fd) * | nee 12, 13, 22 City of Poughkeepsie v. Newman, 466 N.Y.S.2d 752 (1983), leave to appeal denied, 467 N.Y.S.2d 1026 (1984) ............ 9 Curtin-Matheson Scientific v. NLRB, 494 rs NN Ned cicada 19, 20 Cuyler v. Adams, 449 U.S. 433 (1981)......... 13 Delaware River and Bay Authority v. Operating Engineers Local 68, 688 A.2d 569 (N.J. 1996), cert. denied, 522 US. a niebinisicserenisisnsinnasitbiiiaiaiahpmcdabbiiezets 21 vi TABLE OF AUTHORITIES—Continued Page Delaware River Port Authority v. Fraternal Order of Police, Penn-Jersey Lodge 30, 290 F.3d 567 (3rd Cir. 2002)..................... 21 Dezaio v. Port Authority of New York and New Jersey, 205 F.3d 62 (2nd Cir.), cert. denied, 531 U.S. 818 (2000) ..................04. 22 Doe v. Pennsylvania Board of Probation and Parole, 513 F.3d 96 (3rd Cir. 2008)... 25 Eastern Paralyzed Veterans Assoc., Inc. v. City of Camden, 545 A.2d 127, 131 (N.J. ELS RS SES oot ae 16 Energy Arkansas, Inc. v. Nebraska, 210 F.3d 887 (8th Cir. 2000)...............::eeseeeeeeee 17 Energy Arkansas, Inc. v. Nebraska, 358 F.3d 528 (8th Cir.), cert. dismissed, 542 oi a eceniasasenhubsbacenes 17, 25 Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203 (1964)............. 6, 7,9, 10, 13, 22-24 First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981) ............cseeeeeees 24 Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30 (1994).....c.ccccccesescseeeeeee 14, 15 Hunterdon County Bd. of Chosen Free- holders and Communications Workers, a 18 In re Local 195, IFPTE, 443 A.2d 187 ESE LE STE SES ee, ea 9,11, 22 Kansas v. Colorado, 514 U.S. 673 (1995) .... 21 Kiska Construction Corporation-U.S.A. v. Washington Metropolitan Area Transit Authority, 167 F.3d 608 (D.C. Cir. 1999). 18 vil TABLE OF AUTHORITIES—Continued Page Lieberman v. Port Authority of New York and New Jersey, 622 A.2d 1295 (N.J. EES SERS EAE ESTE eee 16, 19 New York v. Hill, 528 U.S. 110 (2000)......... 13 New York v. O’Neill, 359 U.S. 1, 9 (1959)... 25 Niagara Frontier Transportation Authority, og | EE aR 23 NLRB v. Borg-Warner, 356 U.S. 342 (1958)... 13 Operating Engineers Local 542 v. Dela- ware River Joint Toll Bridge Commis- sion, 311 F.3d 273 (3rd Cir. 2002)............ 21 Pagano v. Port Authority, 705 N.Y.S.2d 230 (N.Y. App. Div. 2000)......................... 18 Pell v. Bd. of Educ., 313 N.E.2d 321 (N.Y. IRIS RRS Ze ee 19 Petty v. Tennessee-Missouri Bridge Com- mission, 359 U.S. 275 (1959)..............00060 13, 14 Port Authority Police Sergeants Benevolent Association v. Port Authority of New York and New Jersey, C.A. No. 97-1651 CUP UE, BPE Passtossscsccscosesesceressoscece 22 Port Authority Trans-Hudson Corp. ov. Feeney, 495 U.S. 299 (1990)...................... 14 Textile Workers v. Darlington Mfg. Co., eee ee icddnesasstasetsisnccnsnsessesceses 24 The Lieutenant’s Case, 77 PAERP 6 (1978). 24 United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488 (4th Cir. 1998)......................00006. 25 Vaca v. Sipes, 386 U.S. 171 (1967) .............. 15 Washington-Dulles Transportation, Ltd., v. Metropolitan Washington Airports Authority, 263 F.3d 371 (4th Cir. 2001)... 21 vill TABLE OF AUTHORITIES—Continued Page West Virginia ex rel. Dyer v. Sims, 341 ini decditnasnialiaitnteanatind 3, 14, 15 STATUTES iin 19 McKinney’s Unconsolidated Laws LASTEST SEO eee 3 McKinney’s Unconsolidated Laws SOR ae 3 McKinney’s Unconsolidated Laws EN AT Sa 4,9,17, 21 a camennseniaiingl 4,17,21 Pee PE GP INO. ccccccccosscccsccesccoceccese 18 a sascnmeabiinnenniies 3 in cea caincdenceninniinpsiincecensunals 10 RE ae ee aH 3 MISCELLANEOUS Pees 2s ©’ fh, 5 eee 6, 25 49 C.P.R. Part 1642 (2006)........................000 6 kT a 3,14 Constitution of the United States (Art. I, ECU i ichlsidiichaikists dactieadatacdibaanidishadnicidia 2, 3, 14, 25 Council of State Governments http://ssl. csg.org/compactlaws/comlistlinks.html.... 14 RESTATEMENT (SECOND) OF AGENCY §5(1) See icieiesiscscsletiinsiiidtiensitinnsbticitan caniiibeddhddinieinanas 25 IN THE Supreme Court of the United States No. 07-A1016 PORT AUTHORITY POLICE BENEVOLENT ASSOCIATION, INC., Petitioner, Vv. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Respondent. On Petition for a Writ of Certiorari to the Supreme Court of New Jersey PETITION FOR A WRIT OF CERTIORARI The Port Authority Police Benevolent Association, Inc., petitions for a writ of certiorari to review the decision and judgment of the Supreme Court of New Jersey in In the Matter of the Alleged Improper Practice under Section XI, Paragraph A(d) of the Port Authority Labor Relations Instruction; IP 97-28, Final Decision and Order of the Port Authority Employment Relations Panel: Port Authority of New York and New Jersey, v. Port Authority Employment Relations Panel and Port Authority Police Benevolent Association, Inc., Docket No. A-6 September Term 2007. 2 OPINIONS BELOW The opinion of the Supreme Court of New Jersey is reported at 194 N.J. 314, 944 A.2d 611 and is attached as Appendix A, pp. la-39a. The opinion of the Port Authority Employment Relations Panel Hearing Officer is unreported and is attached as Appendix B, pp. 39a-80a. The opinion of the Port Authority Employment Relations Panel is not offi- cially reported, but is commonly cited as 97 PAERP 28 (2001) and is attached as Appendix C, pp. 81la- 10la. The Opinion of the Superior Court of New Jersey is unreported and is attached as Appendix D, pp. 102a-116a. The opinion of the Appellate Division is unreported and is attached as Appendix E, pp. 117a-119a. JURISDICTION The opinion of the Supreme Court of New Jersey was entered on April 9, 2008. The jurisdiction of this Court is invoked under 28 U.S.C. §1257(a). The Court granted an extension for filing this Petition until September 6, 2008. RELEVANT STATUTORY PROVISIONS Pertinent provisions of the Constitution of the United States and the laws of New Jersey and New York are provided in Appendix F, pp. 120a-122a. STATEMENT OF THE CASE In establishing a federal Constitution, the Foun- ders included a mechanism to enable states to ad- dress regional concerns extending beyond a particu- lar state’s boundaries without requiring a federal resolution. This mechanism is the Compact Clause (Art. I, §10, cl. 3), which, while permitting states to “3 join together to advance regional interests, is predi- cated on the requirement of congressional consent. The Compact Clause has been utilized with Con- gress’s consent to great effect by states to address regional issues of enormous importance — including interstate transportation, waste disposal, and alloca- tion of natural resources -— as well as to spur economic development. This ingenious feature of our federal system has been so effective that this Court has observed that the interstate “compact is more than a supple device for dealing with interests con- fined within a region,” “it is also a means of safe- guarding the national interest.” West Virginia ex rel. Dyer v. Sims, 341 U.S. 22, 28 (1951). Like many states, New York and New Jersey are separated by a common boundary, the Hudson River and New York Bay. To administer the common harbor interests of New York and New Jersey, the states formed the Port Authority of New York and New Jersey (“Port Authority”). That Compact - embodied in virtually identical legislation passed by each state’ — established the Port Authority as “a body corporate and politic, having the powers and jurisdiction hereinafter enumerated, and such other and additional powers as shal! be conferred upon it by the legislature of either State concurred in by the legislature of the other, or by Act or Acts of Congress, .... 42 Stat. 174, 176 (1921). Among the powers granted the Port Authority was the ability to hire employees.’ In 1947, the Port Authority entered into an agree- ment with the City of New York providing that the 'N.J.S.A. Title 32; McKinney’s Unconsolidated Laws, §6401 et seq. * N.J.S.A. 32:1-15; McKinney’s Unconsolidated Laws §6415. 4 Port Authority would lease and operate the munici- pal airports then owned by the City, including what later became known as JFK. Section 11(c) of the agreement stipulates that “[t]he Port Authority will provide police for patrolling, for guarding and for traffic control in the demised premises [and that tjhe City will have no responsibility for maintaining .. . police personnel in the demised premises.” The con- tract also permitted the Port Authority to enter into subcontracts and subleases “provided that all such things shall be done by the Port Authority in its own name... .” [A. 6a]. Pursuant to its contract with the City, the Port Authority Police Department began to patro! JFK. In 1976 the Port Authority adopted the Port Authority Labor Relations Instruction (“Instruction”) governing labor relations with its employees. The Instruction provides that it would be an improper practice for the Authority to refuse to negotiate “salaries, wages, hours, and other terms and condi- tions of employment in good faith ....” Instruction, §XI(A)\(d). The Instruction also provides that “organi- zation, staffing, planning, operating and financial policies shall not be subjects of negotiations... .” Instruction, §III(D). [A. 5a]. The Instruction created the Port Authority Employment Relations Panel (“Panel”) to resolve disputes between the Port Au- thority and its employee organizations. [A 5a]. The Compact was amended to approve the Panel’s creation and to provide for judicial review of its decisions." The Compact does not specify what law a court or agency must apply when construing its provisions. * N.J.S.A. 32:1-175; McKinney’s Unconsolidated Laws §7141. 5 The Port Authority Police Benevolent Association, Inc. (“PBA”), became the exclusive bargaining agent for the Authority’s Police Officers. |A. 6a]. In July 1991, the Port Authority entered into a Memorandum of Agreement with the PBA (“Memorandum”). In Section XXXI(1) of the Memorandum, the Port Authority agreed that there would be no further or additional transfer and/or reassign- ment of unit work currently and heretofore performed by unit employees without negotiation and all other unit work currently and heretofore performed by Police Officers shall be maintained. All existing Police Officer positions and/or as- signments shall be maintained during the term of this Memorandum of Agreement in accordance with the Police Position and/or Assignment List agreed upon between the parties so long as the work being performed continues to be performed by or on behalf of the Port Authority. [A. 7a (emphasis supplied)]. In 1997, however, the Port Authority accepted a proposal from JFK International Air Terminal LLC (“JFKIAT”) that provided for the reconstruction of the international terminal at an overall cost of $1.2 billion. The Port Authority and JFKIAT entered into an exhaustive lease that outlined each party’s obliga- tions with regard to the international terminal. The lease agreement provided that JFKIAT “shall furnish adequate security and guard service or such com- parable means as approved by the Port Authority.” [A. 3la (emphasis supplied)]. The Port Authority re- 6 mained obligated to provide federally required security. [A. 9a-10a].* On May 13, 1997, JFKIAT assu:ned responsibility for all security operations at the international termi- nal and for frontage management of pedestrians and vehicles. JFKIAT hired unarmed civilian guards to perform work previously done by police officers repre- sented by the PBA. [A. 10a]. The PBA filed an unfair labor practice charge against the Port Authority alleging that the Port Authority had unilaterally subcontracted bargaining unit airport police work to JFKIAT without bargain- ing. After the Port Authority denied the charge, the Panel assigned the matter to a hearing officer. [A. lla). In its post-hearing brief, the PBA cited extensively to decisions of the Panel, of the National Labor Relations Board (“NLRB”), and to Fibreboard Paper Prods. Corp. v. NLRB., 379 U.S. 203 (1964).° In its post-hearing brief, the Port Authority relied upon Panel decisions and upon Fibrehoard, without refer- ring to any New Jersey authority.° Relying exclusively on Panel and National Labor Relations Act precedent, the Hearing Officer found that work previously performed by bargaining unit police officers had been transferred to civilian guards, but that the Port Authority did not transfer the ‘At the time, Federal Aviation Administration regulations applied. 14 C.F.R. Part 107 (1997). The current regulation of the Department of Homeland Security is 49 C.F.R. Part 1542 (2006). * PBA Brief at 24-31, 33-43. * Port Authority Brief at 8-9, 12, 24-25, 27-30. 7 disputed work and no longer had “the requisite authority to dictate” which employees would perform the disputed work. [B. 73a]. Ostensibly applying Panel precedent, he found that (1) the Port Authority had altered its basic operation by “remov(ing) itself from the business of managing and operating the [International Arrivals Building] LAB”; (2) the Port Authority had “not only ceded operational manage- ment and day-to-day traffic control to [JFKIAT] but the decision to privatize also included a $1.2 billion lease agreement with JFKIAT to rebuild and operate the IAB .. .”; (3) the PBA had failed to show that the decision was based on factors amenable to collective bargaining; and (4) the police officers suffered an adverse impact, both qualitatively and quantita- tively, from the decision, because they had lost overtime opportunity. [B. 73a-79a]. He recommended dismissing the charge. The PBA filed Exceptions and a supporting brief, again citing Panel and NLRB authority and Fibre- board.’ Given the opportunity to comment on the Panel’s tentative decision, the Port Authority did not rely on New Jersey authority. Instead, the Port Authority relied on Panel decisions, upon NLRB decisions, and upon Fibreboard.* Although it accepted the Hearing Officer’s factual findings, the Panel concluded that the Port Authority had violated the Instruction and the Memorandum by transferring unit work without bargaining. The Panel found that (1) the PBA was attempting to preserve the dis- puted work for its police officers; ." PBA Exceptions at 24-26, 28-30, 32-43. * Port Authority Comments at 7-9, 13, 16-27, 29-32. 8 (2) the Port Authority did not, and could not without violating its agreement with New York City, go out of the business of providing security at JFK; (3) the Port Authority did not alter its basic operation because it continues to provide law enforcement functions at the LAB; (4) the Port Authority “made no capital invest- ment with respect to how security functions are performed within the JAB or in the frontage areas”; (5) the “financing arrangements which the Port Authority utilized to construct a new IAB are irrelevant to the unit work issues in dispute.” (6) the impact of competing wage rates for different classifications of employees was “peculiarly suitable” for collective bargain- ing; and (7) the transfer of work had a substantial im- pact on wages, hours, and working condi- tions because positions were eliminated and employees lost overtime opportunity. [C. 88a-99a]. The Panel concluded that “The Port Authority clearly and definitively required in the JFKIAT lease that the work of patrolling, guarding and traffic control be performed, . . . and we find that it continues to be performed on the Port Authority’s behalf.” [C. 93a]. The Panel therefore ordered the Port Authority to restore the disputed work and to negotiate before unilaterally changing terms and conditions of em- ployment. [C.100a]. In reaching this conclusion, the 9 Panel relied exclusively upon its own precedent, in- cluding its “Fibreboard plus” test. Given the choice of seeking review of the Panel decision in the Superior Court of New Jersey or the New York Supreme Court,” the Port Authority filed in New Jersey. At this point, the Port Authority changed its focus. Although it expressly conceded that neither New Jersey nor New York law is applicable to the Port Authority, in its brief to the Superior Court the Port Authority relied exclusively on New Jersey authority and on the New Jersey Supreme Court’s application of Fibreboard to New Jersey state employees. The Port Authority did not mention Panel or NLRB decisions.” As the nominal Respondent, the Panel reminded the Superior Court that neither New Jersey nor New York statutes or decisions controlled the interpreta- tion of the Instruction and review of Panel decisions. The Panel argued that its decision was entitled to deference and correctly applied the Instruction and Panel authority to the facts of the case. The Panel cited the conflict between decisions of New Jersey and New York public employee relations boards on the negotiability of subcontracting to explain why it had taken an independent approach: Contrast Local 195, IFPTE v. State, 88 N.J. 393 (1982) (subcontracting is not mandatorily nego- tiable in the New Jersey public sector) with city [sic] of Poughkeepsie v. Newman, 95 A.D.2d 101, 466 N.Y.S.2d 752 (1983), leave to appeal denied, * N.J.S.A. 32:1-175; McKinney’s Unconsolidated Laws §7141. Port Authority Brief at 13-21 10 62 N.Y.2d 608, 467 N.Y.S.2d 1026 (1984) (sub- contracting is mandatorily negotiable in the New York public sector). The Panel asserted that it had considered, and reasonably rejected, the Port Authority’s position.” As Intervenor, the PBA’s brief cited Fibreboard, New Jersey and New York authority. The PBA argued that neither creator state may unilaterally impose its legislative will on the bi-state entity. ... It is inappropriate for either compacting state to seek to impose its legislative policy on any issue, including issues of public labor law, without joint legislative action by the compacting states. [citation omitted]. The PBA expressly argued that “the law that must be applied is the . . . Instruction, not New Jersey’s Title 34.” Furthermore, the PBA argued that New York courts “would assuredly endorse the findings of the Panel under these facts.” The PBA argued that Panel decisions and Fibreboard required affirmance of the Panel decision.” Applying the New Jersey standard of review, the Superior Court found that the Panel’s findings of fact were supported by substantial evidence, that the Panel’s decision was neither arbitrary, capricious, or unreasonable, and deferred to the Panel’s expertise. “It is an uncontested fact that when the operation of the [AB was turned over to [JFKIAT] in May 1997, the PAPBA officers who had been previously sta- tioned outside for the management of pedestrians “ Panel Brief at 2-5, 7-14, 16-17. * PBA Brief at 13-16, 19-26. 11 and vehicles were removed, assigned elsewhere, and replaced by non-unit civilian security personnel” in violation of the Memorandum. Applying Panel precedent, the Superior Court found that the Port Authority had subcontracted the disputed work with- out the negotiation required by the Panel’s “Fibre- board Plus Substantial Impact” test. [D. 110a-115a]. In its brief to the Appellate Division, the Port Authority again acknowledged that neither New Jersey nor New York law was controlling in Port Authority cases. Nevertheless, the Port Authority relied extensively upon New Jersey and New York authority to support its position. The Port Authority did not cite a single Panel decision in its opening brief and only one in its reply brief. It relied on New Jersey law."* The Panel argued that its decision was consistent with the Instruction and its prior decisions. It argued that labor law decisions of New Jersey were not controilling because such cases “may involve different standards that may lead to different results.” It reiterated the contrast between New Jersey’s Local 195 decision and New York authority on the duty to negotiate over subcontracting." It repeated its conclusion that police work at the IAB was performed “on behalf of” the Port Authority.” The PBA opposed the Port Authority’s “attempts to directly apply the legislative policy of New Jersey applicable to public employers ....” The PBA * Port Authority Brief at 15-27; Reply Brief at 2-3, 10-11, 16, 18. * Panel Brief at 10-16. Panel Brief at 19. 12 reiterated that the Instruction provided that New Jersey and New York authority did not bind the Panel or reviewing courts. The PBA argued, there- fore, that the Port Authority’s reliance on New Jersey cases “misses the point because the law that must be applied in this matter is the Port Authority Labor Relations Instruction, not New Jersey’s Title 34.” The PBA argued that the Panel had properly applied the Instruction and its precedent to the facts.” The Appellate Division applied New Jersey’s stan- dard of review and the Panel’s “Fibreboard plus” analysis. The Appellate Division found that “the decision of the Panel, their findings of facts, and conclusions of law are well supported in the record and reflect the opinion of this Court.” [E. 118a-119a). In its Petition for a Writ of Certiorari to the Supreme Court of New Jersey, the Port Authority relied on New Jersey and National Labor Relations Act authority concerning the scope of judicial review. The Port Authority argued that in City of Jersey City v. Jersey City Police Officers Benevolent Association, 713 A.2d 472 (N.J. 1998), the court had rejected an order of the New Jersey Public Employment Rela- tions Commission in a factually analogous situation.” The PBA and the Panel opposed the Petition. The PBA again argued that because neither New Jersey nor New York law controlled, the Port Authority’s reliance on Jersey City was improper. The Appellate Division, wrote the PBA, “gave deference to the Panel decision, which . . . was appropriately based upon Panel precedent and not unilateral laws of either ‘* PBA Brief at 16, 19-36. " Petition at 3-5. 13 New Jersey and/or New York.”"* The Panel argued for a limited standard of review and rejected the Port Authority’s reliance on City of Jersey City.”* The Supreme Court of New Jersey granted the Writ. Relying on the briefs submitted to the Appel- late Division, the court applied the New Jersey Administrative Procedure Act and New Jersey case law to establish the standard of review of Panel decisions. [A. 18a-2la]. The court then concluded that Jersey City, a decision interpreting New Jersey law, had “refined” this Court’s analysis in NLRB v. Borg-Warner, 356 U.S. 342 (1958), and Fibreboard. [A. 24a]. Applying that “refined analysis,” the major- ity rejected the Panel’s conclusions. [A. 24a-28a]. Having determined that the law of New Jersey governed the matter, the New Jersey Supreme Court failed to consider whether other law might govern the matter. : Also applying a New Jersey standard of review [A. 33a], the dissent concluded that the Panel decision was not “arbitrary, capricious, or unreasonable” under New Jersey or NLRB authority. [A. 36a-38a]. Like the majority, the dissent did not mention the PBA’s argument that the court could not apply New Jersey law. REASONS FOR GRANTING THE PETITION As a congressionally sanctioned interstate compact, the Port Authority Compact is a federal law subject to federal construction. See, e.g., New York v. Hill, 528 U.S. 110, 111 (2000); Cuyler v. Adams, 449 U.S. 433, 438 (1981); Petty v. Tennessee-Missouri Bridge PBA Brief at 10-13. ” Panel Brief at 6-9. oil 14 Commission, 359 U.S. 275, 278-279 (1959) (“we must treat the compact as a living interstate agreement which performs high functions in our federalism, including the operation of vast interstate enter- prises.”).*” While the Court shows “deference to state law in construing a compact, state law as pronounced in prior applications and rulings is not binding.” Petty, 359 U.S. at 278, n. 4. Furthermore, such defer- ence cannot be transformed into “submission to a State’s own determination of whether it has under- taken an obligation, what that obligation is, and whether it conflicts with a disability of the State to undertake it... .” West Virginia ex rel. Dyer v. Sims, 341 U.S. 22, 28 (1951). Because the Compact establishing the Port Author- ity of New York and New Jersey” is but one of at least 195 interstate compacts” authorized by Con- gress under the Compact Clause of the Constitution, the impact of this case extends well beyond the subcontracting dispute between the Port Authority and its Police Officers. This Petition asks the Court to determine whether the Instruction adopted by the Port Authority is also a federal law subject to review under federal law and, *” The Port Authority has conceded that amendments to the Compact authorized by the legislatures of both states are properly viewed as federal law. Brooklyn Bridge Park Coalition v. Port Authority of New York and New Jersey, 951 F.Supp. 383, 390 n. 5 (E.D. N.Y. 1997). Both states have approved the adoption of the Instruction and the creation of the Panel. [A. 3a n.1). *" 42 Stat. 174 (1921). See also Hess v. Port Authority Trans- Hudson Corp., 513 U.S. 30, 35-36 (1994); Port Authority Trans- Hudson Corp. v. Feeney, 495 U.S. 299, 301 (1990). * http//ssl.csg.org/compactlaws/comlistlinks.htm] 15 if so, whether the Supreme Court of New Jersey erred by applying New Jersey authority instead of federal law when reviewing the Panel decision. The questions presented are not abstract, for throughout the New Jersey proceedings the PBA consistently argued that a New York court would affirm the Panel decision. If the Panel rules against the PBA in another subcontracting case, the PBA could, indeed, should and would, seek review in the New York courts. The conflict between the courts of the two states on the interpretation of the Compact (and of the Instruction) is not hypothetical; the conflict exists today and will continue to surface in future cases unless resolved. But the choice of forum should not control either the choice of law or the result of judicial review of a Compact Agency’s actions. Avoiding strategic forum shopping is one reason interstate Compacts must be governed by a uniform federal law, subject to review by this Court.”* As this Court has already held in a case involving the Port Authority, “bistate entities created by compact .. . are not subject to the unilat- eral control of any one of the States that compose the federal system.” Hess v. Port Authority Trans- Hudson Corp, 513 U.S. at 42. Yet that is precisely what the New Jersey Supreme Court did here. Despite the PBA’s repeated assertions that neither New York nor New Jersey law controlled, and despite the Port Authority’s implicit agreement or failure to “Even where, as here, the Compact permits litigation in state courts, federal law applies. This Court has jurisdiction to review state court decisions misapplying federal law. Vaca v. Sipes, 386 U.S. 171, 174 (1967); West Virginia ex rel. Dyer v. Sims, 341 U.S. at 30. 16 dispute that point, and despite the PBA’s claim that New York law would require affirmance of the Panel decision, the Supreme Court of New Jersey applied only New Jersey precedent concerning both the scope of appellate review and the substantive claim by the Port Authority. Contrary to its own precedent, the New Jersey Supreme Court made no pretense of considering either New York or federal authority.** In Lieberman vu. Port Authority of New York and New Jersey, 622 A.2d 1295, 1299 (N.J. 1993), the court explained that “although we are not bound by New York law, we deem it to be an influential precedent because of the bi-state nature of the Port Authority.” In other cases, the court had held that the interpretation of bi-state compacts is a matter of federal law and that neither of the signatory states may impose its law on the entity without permission in the compact itself. Bunk v. Port Authority of New York and New Jersey, 676 A.2d 118, 122 (N.J. 1996); Eastern Paralyzed Veterans Assoc., Inc. v. City of Camden, 545 A.2d 127, 131, 136 (N.J. 1988). Bunk and Camden applied the doctrine of “complementary or parallel state legisla- tion,” thereby requiring consideration of New York law. Although this case presents the question in the context of labor relations, federal courts have consid- ered the law governing compacts in a number of “ Although the PBA did not label its argument below as a contention that federal law applied, it did argue that the New Jersey courts must consider New York as well as New Jersey authority. The amalgam of these state authorities, combined with the Panel’s authority and its Fibreboard plus standard, constitutes a federal common law and is a model applicable in litigation involving all compacts. ee 17 substantive areas. The Eighth Circuit has held that a compact agency was enforcing a federal right created by the compact when it sued Nebraska for refusing to permit the construction of a nuclear waste facility. Energy Arkansas, Inc. v. Nebraska, 210 F.3d 887, 898 (8th Cir. 2000). The Eighth Circuit later held that in the absence of federal common law on the meaning of compact language, the district court properly sought guidance from the Restatement of Contracts, not state law. Energy Arkansas, Inc. v. Nebraska, 358 F.3d 528, 547 (8th Cir.), cert. dis- missed, 542 U.S. 960 (2004). The District of Colum- bia Circuit has similarly applied the “federal common law standard” to determine whether employees of a compact enjoy immunity in tort actions even where the compact provides that state law applies to the tort itself. Beebe v. Washington Metropolitan Area Transit Authority, 129 F.3d 1283, 1289 (D.C. Cir. 1997). A. Federal Law Governs the Scope of Judicial Review Although the Compact provides a choice of forum for seeking review of a Panel decision,” the New Jersey courts violated the well-established principle that the construction of an interstate compact approved by Congress presents a federal question. Unlike the compact provisions discussed in Beebe, which ex- pressly specify that the law of the forum state will apply to certain claims against the bi-state compact, the pertinent New Jersey and New York statutes that form the Compact do not provide that the law of the forum controls. Where the compact does not provide that state law controls, “federal law governs * N.J.S.A §32:1-175; McKinney’s Unconsolidated Laws §7141. “* :. 18 ....” Beebe v. Washington Metropolitan Area Transit Authority, 129 F.3d at 1288 The Supreme Court of New Jersey’s decision to apply its State Administrative Procedure Act stan- dard of review conflicts with Kiska Construction Corporation-U.S.A. v. Washington Metropolitan Area Transit Authority, 167 F.3d 608, 611-612 (D.C. Cir. 1999), which held that WMAA, as a compact, was not an “agency” within the meaning of the District of Columbia Administrative Procedure Act. The New Jersey Supreme Court applied the State’s Administrative Procedure Act, N.J.S.A. 52:14B-1 to - 25. [A. 18a-20a]. Citing Hunterdon County Bd. of Chosen Freeholders and Communications Workers, 561 A.2d 597, 600 (1989), the court concluded “There- fore, it is only ‘in situations where agency expertise is essential towards understanding the proper context of a dispute [that] a deferential standard of review is appropriate.” [emphasis supplied} [A. 21a]. In this case, however, the court was less deferential than in Hunterdon, where it had stated that it would defer “particularly” in such situations. Id. Interestingly, Hunterdon involved review of a deci- sion of the New Jersey Public Employee Relations Committee (“PERC”). For no rational reason, the Supreme Court of New Jersey now accords less defer- ence to Punel decisions than to PERC decisions. At the same time, the New Jersey court conceded that New York courts would apply a more deferential standard: In its reported case law, New York has applied a deferential standard of review to Panel decisions. See Pagano v. Port Authority, 270 A.D.2d 206, 705 N.Y.S.2d 230 (N.Y. App. Div. 2000) (applying 19 standard that Panel determination “may not be disturbed since substantial evidence supports lit)”); Pell v. Bd. of Educ., 34 N.Y.2d 222, 313 N.E.2d 321, 356 N.Y.S.2d 833, 839 (N.Y. 1974) (explaining that administrative tribunal’s factual determinations are sustained if supported by substantial evidence, and exercise of discretion by administrative tribunal will be sustained “unless there is no rational basis for the exercise of discretion or the action compiained of is ‘arbitrary and capricious.”). [A. 18a n. 10]. The court did not explain why this “influential precedent” could be ignored or distin- guished. Lieberman, 622 A.2d at 1299. Although Section 10(e) of the. National Labor Rela- tions Act, 29 U.S.C. §160(e), mandates the “substan- tial evidence” standard for judicial review of the NLRB’s findings of fact, the degree of deference accorded to NLRB statutory interpretations has been developed by the Court. In Beth Israel Hospital v. NLRB, 437 U.S. 483, 500-501 (1978), the Court stressed that such judicial review must be “limited,” for it “is the Board on which Congress conferred the authority to develop and apply fundamental national labor policy. . . . The function of striking [the balance between competing interests] to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed pri- marily to the [Board], subject to limited judicial review.” More recently, the Court said that it would uphold the NLRB’s construction of the Act when it is “rational and consistent with the Act. . . even if we would have formulated a different rule had we sat on the Board.” Curtin-Matheson Scientific v. NLRB, 494 U.S. 775, 787 (1990). 20 This Court’s standard is compatible with the New York standard rejected by the New Jersey Supreme Court. It is not compatible with the New Jersey standard applied in this case. This conflict makes this issue appropriate for review by the Court. Both the New Jersey Superior Court and the Ap- pellate Division deferred to the Panel’s interpretation of the Instruction. The New Jersey Supreme Court did not. It concluded that the Panel decision is not entitled to any special deference and should be rejectea. This is because the Panel neither followed the law nor relied on any par- ticularized expertise in reaching its conclusion. |A. 22a]. To the contrary, the Panel clearly explained its ad- herence to the Instruction, to the Memorandum of Agreement,”° and to Panel Precedent. The less deferential standard of review erroneously chosen by the Supreme Court of New Jersey man- dated its wrongful rejection of the Panel’s decision. For example, the Hearing Officer and the Panel accepted the admission of the Port Authority Police Chief that subcontracting reduced police officer over- time. [B. 78a-79a; C. 84a]. The Supreme Court rejected the Police Chief's “unsubstantiated opinion.” [A. 28a]. Neither Beth Israel nor Curtin-Matheson permit such cavalier rejection of uncontradicted testi- mony. * After the Panel adopted the “Fibreboard plus substantial impact test,” the Port Authority and PBA agreed that the Panel would have exclusive jurisdiction for unit work disputes. Prior to this explicit contractual agreement [C: 86a,88a-89a and n. 2], unit work disputes were brought before the Panel and also arbi- trated as contractual violations. 21 B. As the Creation of the Compact, the Instruction Must Be Interpreted Accord- ing to Federal Law The Supreme Court of New Jersey’s decision con- flicts with Kansas v. Colorado, 514 U.S. 673 (1995), in which the Court held that a violation of the Trinidad River Operating Principles promulgated by the Arkansas River Compact would constitute a violation of the compact. See also Washington-Dulles Transportation, Lid., v. Metropolitan Washington Airports Authority, 263 F.3d 371 (4th Cir. 2001) (federal court has jurisdiction to require adherence to compact’s published competitive bidding procedure). The Port Authority’s Instruction became part of the Compact upon its approval by both State legisla- tures’’ and must be treated as a federal law in the same way as the Arkansas River Compact’s Operat- ing Principles in Kansas and the published bidding procedures in Washington-Dulles Transportation. The Supreme Court of New Jersey’s decision also conflicts with Operating Engineers Local 542 uv. Delaware River Joint Toll Bridge Commission, 311 F.3d 273, 274, 276 (3rd Cir. 2002), in which the Third Circuit held that neither the New Jersey nor the Pennsylvania collective bargaining laws applied to an interstate compact because neither state legislature had expressed a “clear intent to impose their labor laws upon the Commission.” * N.J.S.A. §32.1-175; McKinney’s Unconsolidated Laws §7141. * But see Delaware River Port Authority v. Fraternal Order of Police, Penn-Jersey Lodge 30, 290 F.3d 567 (3™ Cir. 2002), where the Third Circuit reluctantly followed Delaware River and Bay Authority v. Operating Engineers Local 68, 688 A.2d 56% (NJ. 1996), cert. denied, 522 U.S. 861 (1997), which applied New 22 Indeed, when it suited its purpose, the Port Au- thority has successfully argued that courts could not impose aspects of either state’s labor laws. Dezaio v. Port Authority of New York and New Jersey, 205 F.3d 62, 65 (2nd Cir.), cert. denied, 531 U.S. 818 (2000) (New York anti-discrimination laws); Agesen v. Catherwood, 260 N.E.2d 525 (N.Y. 1970) (New York minimum wage law); Baron v. Port Authority of New York and New Jersey, 968 F.Supp. 924 (S.D.N.Y. 1997) (New York or New Jersey human rights laws); Port Authority Police Sergeants Benevolent Associa- tion v. Port Authority of New York and New Jersey, C.A. No. 97-1651 (WHW) (D.N.J. 1997) (unreported decision attached at G. 123a) (New York or New Jersey interest arbitration laws). In concluding that the Port Authority had no obli- gation to bargain, the Supreme Court of New Jersey relied upon two of its earlier decisions, Jn re Local 195, IFPTE, 443 A.2d 187 (1982), and City of Jersey City v. Jersey City Police Officers Benevolent Ass’n, 713 A.2d 472 (1998), both of which reviewed PERC decisions interpreting New Jersey law. In Local 195, the court stated that Fibreboard “is not persuasive authority” in the public sector. 443 A.2d at 191 n. 8. Instead, the court formulated its own three-part test for scope of negotiability decisions. 443 A.2d at 191- 192. In Jersey City, the court applied its own Local 195 test. Although the New Jersey court might be correct in refusing to apply Fibreboard in New Jersey public Jersey law to impose bargaining obligations on a compact agency. The two Delaware River Port Authority cases demon- strate that this is a recurring issue meriting review by this Court. 23 sector cases, the New Jersey Supreme Court was not considering a New Jersey public sector appeal. Nor was the court acting in a vacuum when it considered the Panel decision. It was reviewing a Panel decision applying the “Fibreboard plus” standard which the Panel had developed in 1978 [A. 25a n. 12], two years after its creation, and had applied consistently there- after. The New Jersey Supreme Court applied New Jersey precedent contrary to the express directive in the Instruction: In all matters relating to this Instruction, includ- ing determinations as to mandatory and non- mandatory subjects of negotiation, Panel mem- bers and other persons appointed by the Panel shall be guided but not bound by administrative and judicial interpretations of the public sector labor law of the states of New York and New Jersey. Instruction, Section III, Paragraph D. Relying upon Niagara Frontier Transportation Au- thority, 18 PERB 3083 (1985), and New York’s highly deferential standard of review, the PBA argued that the New York courts would have affirmed the Panel decision. Yet the New Jersey Supreme Court did not consider the views of New York State when it re- jected the Panel decision. Because it found Fibreboard was “not persuasive,” the New Jersey court ignored the requirement in the Instruction that State law not apply “[iJn all matters relating to this Instruction, including determinations as to mandatory and non-mandatory subjects of negotiation ....” Indeed, pursuant to this directive, the Panel in 1978 had expressly applied Fibreboard, not the laws of either State, as the “framework for 24 determining whether a decision made by manage- ment is a mandatory or non-mandatory subject of negotiation.” The Panel then created the “Fibreboard plus substantial impact” test. Citing Auto Workers vu. NLRB (General Motors), 381 F.2d 265 (D.C. Cir.), cert. denied, 389 U.S. 857 (1967), and New Jersey and New York authority, the Panel noted that “even in the absence of layoffs, a reduction in the size of the bargaining unit as a result of a decision to subcon- tract has been held to be a mandatory subject of bargaining in the private sector... and... in the public sector.” The Lieutenant’s Case, 77 PAERP 6 (1978) (sl. op. 31, 34-38). The New Jersey Court’s rejection of Fibreboard colored its rejection of the Panel’s decision in this case. Because it found Fibreboard was “not persuasive,” the New Jersey court did not consider this Court’s clear distinction between going out of business and subcontracting an operation. In Textile Workers uv. Darlington Mfg. Co., 380 U.S. 263 (1965), the Court held that an employer had an absolute right to termi- nate its entire business for any reason, but distin- guished a complete closing from a partial closing. In First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981), the Court found no obligation to bargain over an economically motivated decision to shut down part of a business. These decisions left unaltered Fibreboard’s principle that the decision to subcon- tract is a mandatory subject of bargaining if bargain- ing unit employees are replaced with those of an independent contractor to do the same work under similar conditions of employment. Fibreboard Paper Prods. Corp. v. NLRB., 379 U.S. at 215. A major distinction between going out of business and subcontracting that business is that under gen- 25 erally accepted law the prime contractor remains responsible for the work performed by the subcon- tractor. United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 498 (4th Cir. 1998); Blanchette v. Cataldo, 734 F.2d 869, 875 (1st Cir. 1984); RESTATEMENT (SECOND) OF AGENCY §5(1) (1958).” Thus, if the Port Authority subcontracted IAB security work to JFKIAT, as the Panel concluded, the Port Authority remained re- sponsible to New York City for JFKIAT’s work. However, if the Port Authority terminated its secu- rity business at LAB, New York City has no claim against the Port Authority for nonfeasance or malfea- sance by JFKIAT and/or its subcontractors. After 9/11, indeed, after the first attack on the World Trade Center in 1993, is the federal govern- ment prepared to say, as the New Jersey Supreme Court did, that a port authority can terminate its contractually required responsibility for port or airport security?” The Port Authority’s lease to JFKIAT expressly provided that the Port Authority had to review and approve JFKIAT’s security and guard service. [A. 3la]. Because the Port Authority’s agreement with New York City provided that “(t]he Port Authority will provide police for patrolling, for guarding and for traffic control in the demised premises,” the Panel [C. 88a-89a, 93a-95a] and the ” Courts rely upon the Restatements to develop federal com- mon law in Compact Clause litigation. See, e.g., New York v. O'Neill, 359 U.S. 1, 9 (1959); Doe v. Pennsylvania Board of Probation and Parole, 513 F.3d 96, 106 (3rd Cir. 2008); Energy Arkansas, 358 F.3d at 546. ” With its contract with JFKIAT, the Port Authority subcon- tracted (or terminated) its responsibility for all airport security except that required by Federal Aviation Administration regula- tions. 14 C.F.R. Part 107 (1997). 26 Superior Court [D. 105a-106a and n. 1, 111-112] expressly concluded that JFKIAT was acting “on behalf of” the Port Authority, which remained ulti- mately responsible for providing police for airport security. Thus the Panel, the Superior Court, and the Appel- late Division decisions are consistent with federal principles distinguishing between subcontracting and “going out of business.” The New Jersey Supreme Court’s decision is not. CONCLUSION The petition for the writ of certiorari should be granted and the decision of the Supreme Court of New Jersey should be reversed. Respectfully submitted, WILLIAM J. JOHNSON JONATHAN G. AXELROD * 317 South Patrick St. HUGH J. BEINS ‘lexandria, VA 22314 H. DAVID KELLY, JR. JUSTIN P. KEATING BEINS, AXELROD, P.C. 1625 Massachusetts Ave., N.W. Washington, D.C. 20036 * Counsel of Record 202-328-7222 August 28, 2008 APPENDIX la APPENDIX A SUPREME COURT OF NEW JERSEY A-6 September Term 2007 IN THE MATTER OF THE ALLEGED IMPROPER PRACTICE UNDER SECTION XI, PARAGRAPH A(d) OF THE PORT AUTHORITY LABOR RELATIONS INSTRUCTION; IP 97-28, FINAL DECISION AND ORDER OF THE PORT AUTHORITY EMPLOYMENT RELATIONS PANEL: PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Petitioner-Appellant, Vv. PORT AUTHORITY EMPLOYMENT RELATIONS PANEL, Respondent-Respondent, and PORT AUTHORITY POLICE BENEVOLENT ASSOCIATION, INC., Intervenor-Respondent. February 4, 2008, Argued April 9, 2008, Decided On certification to the Superior Court, Appellate Division. COUNSEL: Donald F. Burke argued the cause for appellant. Christine Carey Lilore argued the cause for respon- dent Port Authority Police Benevolent Association. Robert E. Anderson argued the cause for respon- dent Port Authority Employment Relations Panel 2a (Mr. Anderson, Genera] Counsel, New Jersey Public Employment Relations Commission, attorney). JUDGES: JUSTICE RIVERA-SOTO delivered the opinion of the Court. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA and HOENS join in JUSTICE RIVERA-SOTO’s opinion. JUSTICE ALBIN has filed a dissenting opinion, in which JUSTICE WALLACE joins. JUSTICE LONG did not participate. JUSTICE RIVERA-SOTO delivered the opinion of the Court. For over a decade, the Port Authority of New York and New Jersey (Port Authority) and the union representing its police officers, the Port Authority Police Benevolent Association, Inc. ‘PBA), have litigated a discrete issue: whether the May 1997 lease of the international terminal at John F. Kennedy International Airport (JFK Airport)—and the resulting redeployment, without any job losses or terminations, of Port Authority police officers to other portions of the JFK Airport—gave rise to an obli- gation on the part of the Port Authority to collectively bargain that redeployment with the PBA. Based on an improper practice charge filed by the PBA, a hearing officer assigned by the Port Authority Employment Relations Panel (Panel) concluded that “the Port Authority's unilateral decision to sublease operational control and management of the [inter- national terminal] to [a private entity] was not a mandatory subject of negotiations.” The hearing officer further concluded that, even if redeployment of the PBA-represented police officers constituted a transfer of work covered by the collective bargaining agreement, the PBA nevertheless had failed to satisfy 3a the legal requirements necessary to find that such redeployment was a mandatory subject of negotia- tions. As a result, the hearing officer recommended that the PBA’s improper practice charge be “dis- missed in its entirety.” The Panel rejected the hearing officer's recommendations, and concluded instead that “the Port Authority violated the [Port Authority of New York and New Jersey Labor Relations} Instruction [that provided for collective bargaining rights to employees of the Port Authority and created the Panel] when it transferred PBA unit work to non-unit employees without negotiating with the PBA.” Citing to the deference owed to admin- istrative agencies, both the Law Division and the Ap- pellate Division sustained the Panel’s determination. We conclude that, pursuant to the Instruction governing labor relations at the Port Authority, the redeployment of Port Authority police officers occa- sioned by the 1997 lease of the international ter- minal at JFK Airport was exempt from any collective bargaining requirement. We further conclude that, even if the Port Authority was required to collec- tively bargain the effects of the 1997 lease of the international terminal at JFK Airport, and even if the work on the leased premises may well have constituted “unit work,” the Port Authority was not obligated to collectively bargain its transfer in any event. I. A. Recognizing the special legal status of the Port Authority, we start with an overview of the parties and their interlocking relationships: On April 30, 1921, The Port of New York Authority was established to administer the 4a common harbor interests of New York and New Jersey. The first of its kind in the Western Hemisphere, the organization was created under a clause of the [United States] Constitution permitting Compacts between states, with Con- gressional consent. An area of jurisdiction called the “Port District,” a bistate region of about 1,500 square miles centered on the Statue of Lib- erty, was established. In 1972, the organiza- tion’s name was changed to The Port Au- thority of New York and New Jersey to more accurately identify [its] role as a bistate agency. (http://www.panynj.gov/AboutthePortAuthority/ HistoryofthePortAuthority/.] The Port Authority is a financially self- supporting public agency that receives no tax revenues from any state or local jurisdiction and has no power to tax. It relies almost entirely on revenues generated by facility users, tolls, fees, and rents. The Governor of each state appoints six members to the Board of Commissioners, subject to state senate approval. Board Mem- bers serve as public officials without pay for overlapping six-year terms. The Governors retain the right to veto the actions of Commis- sioners from his or her own state. Board meet- ings are public. The Board of Commissioners appoints an Executive Director to carry out the agency’s policies and manage the day-to-day operations. (http://www. panynj.gov/AboutthePortAuthority/ Governance’. See generally, N.J.S.A. 32:1-1 to 2-37; N.Y. Unconsol. Laws Ch. 151 § 1 (2007). 5a In 1976, the Port Authority adopted its Labor Relations Instruction. Among other things, the Instruction (1) safeguarded the right to collec- tively bargain via employee organizations for Port Authority non-managerial employees; (2) created the Panel to administer disputes between the Port Authority and its employee organizations; (3) estab- lished procedures for the processing of those disputes; and (4) provided for judicial review of any decisions of the Panel. The grant of authority to the Panel was subject to a significant exemption: Section III(D) of the Instruction specifically provides that “[nJot- withstanding the foregoing, the mission and man- agement responsibilities of the [Port] Authority, including its organization, staffing, planning, oper- ating and financial policies, shall not be subjects of nego’ iation with employee organizations.” (Emphasis supplied.)’ Finally, as provided in its collective bargaining agreement with the Port Authority, the PBA is “the sole and exclusive representative of [Port Authority] Police Officers for the purpose of collective negotia- tions with respect to rates of pay, hours of work and other terms and conditions of employment.” Having defined the triangle of parties in this dis- pute—the Port Authority, the Panel and the PBA— we turn to the facts underlying this controversy. ' This Instruction was adopted by the Board of Com- missioners of the Port Authority in 1976 at a public meeting of the Board; the minutes of that meeting were transmitted to the Governors of both New Jersey and New York and were approved, which made the Instruction effective and in force. See N.J.S.A. 32:2-6; N.Y. Unconsol. Laws Ch. 151-A § 2 (2007). 6a B. In April 1947, the Port Authority entered into an agreement with the City of New York. That agreement provided that the Port Authority would lease and operate the municipal airports then owned by New York City; among them was Idlewild Airport, now known as JFK Airport. Section 11(c) of the agreement stipulates that “[t]he Port Authority will provide police for patrolling, for guarding and for traffic control in the demised premises [and that t]he City will have no responsibility for maintaining .. . police personnel in the demised premises.” Section 37 of the agreement further provides that the Port Authority shall have full power and discretion to proceed with the financing, reha- bilitation, expansion, improvement, develop- ment, operation and maintenance of the mu- nicipal air terminals, and to enter into such contracts, agreements, subleases or other ar- rangements with respect thereto as it may deem necessary and desirable, and all matters connected therewith, including but not limited to, all details of financing, construction, leasing, charges, rates, tolls, contracts, and operation shall be within the sole discretion of the Port Authority; and the decisions of the Port Authority in connection with any and all matters concerning the municipal air terminals shall be controlling, provided that all such things shall be done by the Port Authority in its own name and on its own credit. C. In July 1991, the Port Authority entered into a Memorandum of Agreement with the PBA. That 7a Memorandum recognized the PBA as the sole and exclusive representative of the Port Authority police officers for collective bargaining purposes. Section XXI(1) of the Memorandum of Agreement explains that, “[djuring the term of this Memorandum of Agreement, no Police Officer . . . shall be deprived of his employment as a Port Authority Police Officer . . . by reason of the abolition or modification of the requirements for additional police coverage at [JFK] Airport, ... pursuant to. . . Federal Aviation Regulations.” It also states, in Sections XXX(1) and (7), as follows: Subject to other provisions herein, and except as otherwise set forth in this Agreement, during the term of this Agreement, there will be no further or additional transfer and/or reassignment of unit work currently and heretofore performed by unit employees without negotiation and all other unit work currently and heretofore performed by Police Officers shall be maintained. All existing Police Officer positions and/or as- signments shal] be maintained during the term of this Memorandum of Agreement in accordance with the Police Position and/or Assignment List agreed upon between the parties so long as the work being performed continues to be performed by or on behalf of the Port Authority. Section II(1) of the Memorandum of Agreement states that “any such practice, procedure or policy [governing existing terms and conditions of em- ployment of Police Officers] pursuant to any... instruction . . . shall not be limited, restricted, impaired, removed or abolished unilaterally.” Con- 8a sistent with that limitation, Section II(2) of the Memorandum of Agreement makes clear that {a] charge or complaint that the [Port] Authority has unilaterally limited, restricted, impaired, removed or abolished such a practice, procedure or policy governing an existing term and con- dition of employment which is not specifically enumerated or set forth in this Memorandum of Agreement shall not be subject to or processed through the _ grievance-arbitration procedure referred to in Section XXIII of this Memorandum of Agreement. * D. Starting in 1994, the Port Authority embarked on a process to determine whether to modernize or replace the international terminal at JFK Airport; among the proposals to be considered was the solicitation of private investors. The following year, the Port Authority did solicit in the private sector and received four proposals. In 1997, it accepted a proposal from JFK International Air Terminal LLC (JFKIAT)* that provided for the construction of a new international terminal at an overall cost of $1.2 billion. * Section XXIII of the Memorandum of Agreement specifically provides that “alleged violation|s}” of Section II(1) of the Memorandum of Agreement are exempt from the grievance or arbitration procedures of the Memorandum of Agreement and, hence, lie outside the Panel's limited jurisdiction. * JFKIAT is a limited liability company comprised of three separate business interests: the developer responsible for the construction of the new terminal, the operator responsible for the operation of the completed terminal, and the financing source responsible for the financing of the new terminal, including the issuance of Port Authority municipal bonds. 9a The Port Authority and JFKIAT entered into an exhaustive lease that outlined each party’s obli- gations in respect of the international terminal at JFK Airport. Stating that “the Port Authority is obligated to have in effect and does now have in effect an airport security plan in accordance with [federal regulations],” the lease recites that “[t]he Security Plan outlines law enforcement requirements of the airport operator and physical barriers and access procedures to monitor and restrict access[.]” Ac- knowledging that “the implementation, maintenance and operation of the Premises pursuant to the requirements of the Security Plan is essential to the operation of the Premises and of the Airport(,]” JFKIAT agreed to “assume and fulfill all of the Port Authority’s obligations and responsibilities under the Security Plan and [to] take all measures required, necessary or appropriate to implement and carry out the requirements of the Security Plan.” E. Approximately one month before entering into the lease with JFKIAT, the Port Authority met with the PBA, explained the lease proposal for the inter- national terminal at JFK Airport, and assured the PBA that “no Port Authority Police Officers would be displaced from JFK Airport nor suffer any negative impact as a result of” the lease. Those assurances were followed by a Port Authority memorandum dated May 12, 1997 that advised that, effective at noon the following day, JFKIAT would “assume responsibility for the [international terminal, that] police services commensurate with that provided other unit terminals at JFK will be maintained|[, and that flrontage management of pedestrians and vehicles will become the responsibility of [JFKIAT].” 10a The lease became effective on May 13, 1997 and, from that date forward, JFKIAT assumed all security functions at JFK Airport’s international terminal. Although those events required the redeployment of the Port Authority police officers formerly assigned to the international terminal, no police officer lost his or her job; the sole record evidence of any possible impact on the police officers was the unsubstantiated opinion of the chief of the Port Authority police department that, “by redeploying [Port] Authority Police Officers, he was ‘certain’ that their overtime was reduced.” Six weeks later, the PBA protested. In a letter dated June 24, 1997 and addressed to the Port Authority's director of human resources, the PBA set forth its view that “the Port Authority Labor Relations Instruction and the Memorandum of Agreement between the Port Authority and |[the PBA] forbid this unilateral action by the Port Authority.” It also asserted that, “without prejudice to [its] right to file an improper practice or griev- ance[, the] PBA requests immediate negotiations regarding the impact of this decision upon our members[,]” explaining that “(t]he PBA will take appropriate action thereafter.” On July 2, 1997, the Port Authority responded, rejecting any claim that the Port Authority had acted improperly, but expressing a willingness to discuss the PBA’s con- cerns “as part of overall negotiations.” The PBA did not respond to that invitation. Instead, on July 28, 1997, the PBA filed its improper practice charge against the Port Authority. lla The PBA’s improper practice charge specifically alleged that the Port Authority has either hired, subcon- tracted, permitted or suffered non-unit personnel to perform PBA unit work. Civilian personnel are directing and controlling traffic and are performing security functions at sites at or near the [international terminal,] which functions have traditionally and historically been per- formed by the PBA. This action was taken by the employer without any prior negotiation with the PBA in violation of the Labor Relations In- struction and the Memorandum of Agreement. The Port Authority submitted a blanket denia! of those charges, and the Panel assigned the matter to a hearing officer.* After reviewing the factual background and the contentions of the parties, the hearing officer ad- dressed the issues before him. First, he reasoned that the Security Plan work transferred via the lease from the Port Authority to JFKIAT consisted of “functions previously performed by Port Authority Police Officers both inside . . . and in the frontage area [of the international terminal].” He thus concluded that “the disputed work in issue is unit work, as alleged.” * The first hearing officer to whom this matter was assigned conducted two hearing dates, but then resigned his appoint- ment upon being advised that he was being proposed for appointment to a federal post; shortly thereafter, he was appointed to serve as chairman of the National Labor Relations Board. The matter was reassigned to Hearing Officer Irwin Kaplin, who reviewed the evidence and transcripts of the first two hearing dates, conducted further hearings, considered the parties’ post-hearings submissions, and filed a report and recommendation in the matter. 12a However, the hearing officer found that “the rec- ord supports the [Port Authority’s] contention that with the takeover by JFKIAT of [the international terminal], the [Port] Authority went out of the business of managing and operating that facility[.]” He therefore also found that “the [Port] Authority did not transfer the disputed work.” Based on those findings, he concluded that there was no basis for the PBA’s improper practice charge. The hearing officer's analysis did not end there. After assuming the PBA had made out a case that the work was “unit work” and that the Port Authority had transferred it to JFKIAT, he reasoned that the PBA had failed to establish that “the [Port] Authority’s decision to do so was a mandatory subject of negotiations[.)” Applying the “Fibreboard’ plus substantial impact” test, he determined that the PBA had failed to satisfy three of the four prongs of that test and, thus, concluded that “the unilateral decision that led to the loss of unit work at [the international terminal] by [Port] Authority Police Officers was not a mandatory subject of negotiations.” He recom- mended that the PBA’s improper practice charge be dismissed in its entirety.° The PBA filed exceptions with the Panel. Although the Panel accepted the hearing officer’s factual findings, it rejected the majority of the hearing officer's conclusions, concluding instead that “the * See Fibreboard Paper Prods. Corp. v. Nat'l Labor Relations Bd., 379 U.S. 203 . . . (1964); City of Jersey City v. Jersey City Police Officers Benevolent Ass’n, 154 N.J. 555, 575-76, 713 A.2d 472 (1998). * After the hearing officer rendered his report and rec- ommiendation, the PBA moved to reopen the hearing. That motion was denied, and that denial was not appealed. 13a Port Authority violated the Instruction when it trans- ferred PBA unit work to non-unit employees without negotiating with the PBA.” It noted that “[t]he initial inquiry in a matter involving the alleged unlawful transfer of unit work is whether the work is, in fact, unit work, i.e., work which historically has been performed by the unit.” It cautioned that “[t]he work need not have been exclusively performed by the unit to constitute unit work.” It observed that “only the preservation of unit work is negotiable” and that “there is no obligation to negotiate over the decision to eliminate, as opposed to transfer, unit work.” Consistent with the hearing officer’s conclusions, the Panel determined that “the work in dispute is unit work.” It then addressed “the next threshold inquiry: was the work transferred.” It “conclude[d] that it was.” Based exclusively on its interpretation of the lease between the Port Authority and JFKIAT, the Panel reasoned that “[t]he work has not been eliminated but rather subcontracted by the Port Authority. Therefore, pursuant to Panel precedent, there has been a transfer of unit work.” Because it had “determined . . . that the work in question is unit work and that there has been a transfer,” the Panel applied the “Fibreboard plus substantial impact” test, explaining that {t]he Port Authority was obligated to negotiate about the decision to transfer the work at issue if: The Port Authority has not altered its basic operation; The Port Authority has not made a capital investment which, if subject to collective nego- tiations, would significantly abridge the [Port] Authority’s freedom to manage its business; al l4a The issues which motivated the decision were peculiarly suitable for resolution within the collective negotiations framework; and The decision substantially impacts upon the wages, hours, [and] terms and conditions of employment, either quantitatively or quali- tatively. It concluded that (1) “[t]he Port Authority has not altered its basic operation as a result of its lease arrangement with JFKIAT{;]” (2) “the issue here did not involve a capital investment which would, if collectively negotiated, significantly abridge the Port Authority’s freedom to manage its business[;]” (3) “the issues which motivated the decision were peculiarly suitable for resolution within the collective bargaining process|;])” and (4) “the decision to have the work performed by non-unit [personnel] rather than by Port Authority police officers represented by the PBA had a substantial impact upon the wages, hours and working conditions of the PBA bargaining unit.” It thus determined to sustain the PBA’s im- proper practice charge because “the Port Authority violated Instruction Section XI(A)(d) and the Memo- randum of Agreement when, without prior nego- tiations, it transferred the work to JFKIAT.” As a remedy, the Panel ordered that the Port Authority “cease and desist from unilaterally transferring PBA unit work to non-unit personnel|[;]” that the Port Authority “restore the status quo ante by restoring the unit work at issue to the PBA bargaining unit;” that the Port Authority “negotiate upon request with the PBA before unilaterally changing terms and conditions of employment;” and that the Port Authority post, “at appropriate places of business[,]” a specified notice to all employees consistent with the substantive relief it afforded the PBA. 15a Seeking a review of the Panel’s determination,’ the Port Authority filed an action in lieu of prerogative writs pursuant to R. 4:69-1 to -7.° The trial court determined that “the Panel is an administrative agency created to review employment issues under the Instruction.” From that premise, the trial court afforded the Panel the deference New Jersey allows to the determinations of administrative agencies, see In re Taylor, 158 N.J. 644, 656, 731 A.2d 35 (1999); Pub. Serv. Elec. & Gas Co. v. N.J. Dept of Envtl. Prot., 101 N.J. 95, 103, 501 A.2d 125 (1985), and concluded that “a decision of the Panel will be upheld if it is supported by substantial evidence in the record, and is neither arbitrary, capricious, nor unreasonable.” It concluded that “the Final Order and Decision of the Panel is supported by sub- stantial credible evidence in the record and is neither _ arbitrary, capricious, or unreasonable substantially for the reasons given by the Panel in its Final Decision and Order[.]” It affirmed the Panel’s determination. The Port Authority pressed its appeal to the Appellate Division, presenting a two-pronged attack. First, the Port Authority argued that, under the Instruction, it is afforded unfettered discretion in respect of its “mission and management respons- ibilities” and that these specifically include “its organization, staffing, planning, operating and finan- * The Port Authority named only the Panel as a party de- fendant. The PBA sought, and was granted, intervenor status. * Both N.J.S.A. 32:1-175 and N.Y. Unconsol. Laws Ch. 599 § 1 (1977) list several avenues of review from orders from the Panel, including that such orders “shall be . . . reviewable .. . by action in lieu of prerogative writis] in the State of New Jersey[.]” 16a cial policies[.]” Second, it argued that the Panel’s analysis of the lease between the Port Authority and JFKIAT was incorrect as a matter of law, and that the Panel’s conclusion that the Port Authority retained a vestigial obligation to provide security to the international terminal was in error. The Ap- pellate Division, in an unpublished opinion that also relied heavily on a deferential standard of review, declared itself “satisfied that the Panel’s findings and conclusions of law reached therefrom are unas- sailable.” It thus affirmed the judgment of the trial court. We granted the Port Authority’s petition for certification, 191 N.J. 317, 923 A.2d 232 ‘2007), and, for the reasons that follow, we reverse the judgment of the Appellate Division, and remand the cause for the entry of an order vacating the Panel’s order and dismissing the improper practice charge filed by the PBA against the Port Authority. II. The Port Authority initially advanced four grounds for certification. First, it argued that, because the Port Authority was created by the exercise of the sovereign powers of two states which retained a significant portion of their immunity in the In- struction, the Appellate Division did not defer to “established and well recognized governmental pre- rogatives regarding the manner in which to provide essential governmental services by disregarding express limitations imposed on the Panel in deciding labor disputes.” Closely aligned to that argument is the Port Authority's contention that the Appellate Division did not show proper deference to principles of New Jersey and New York law concerning gov- ernmental prerogatives in transferring or subcon- 17a tracting work. Third, the Port Authority urged that the Appellate Division erred in giving deference to the Panel’s conclusions of law in respect to the provisions of the lease between the Port Authority and JFKIAT. Fourth, the Port Authority claimed that the Appellate Division failed to properly credit the hearing officer’s conclusions, that is, that the Panel, and by extension the Appellate Division, did not determine that the hearing officer’s conclu- sions were not supported by substantial credible evidence or were otherwise arbitrary, capricious or unreasonable. In its reply brief, the Port Authority pressed its overarching claim: that this case requires that the Court address “the fundamental power and authority of government to make important decisions regard- ing the manner in which governmental services are provided without being shackled by having to engage in labor negotiations before such decisions are made.” According to the Panel, the sole issue in this case is whether the Panel abused its discretion. It claimed that “[tJhe Panel’s standards under the Instruction for analyzing transfer of unit work allegations have been in place and accepted by the parties for over 25 years” and, thus, no abuse of discretion is present. The PBA asserted that “[t]he issue is not the manner in which essential governmental services should be provided” as advanced by the Port Authority. In the PBA’s view, “[t]he issues in this case are controlled by the historic obligations developed by the Port Authority through its own decision to utilize bargaining unit members to perform specified and limited work” as well as “its own decision to require its sub-lessee to perform that bargaining unit’s work without negotiation|[.]” 18a It asserts that, viewed thusly, there is no basis to overturn the Appellate Division’s judgment.” We address those issues as follows. First, we determine the appropriate standard of review for determinations made by the Panel. Next, we con- sider whether the redeployment of the Port Authority police officers from the international terminal was a mandatory subject of collective bargaining at all. Finally, we discuss whether the performance of functions under the Security Plan by the inter- national terminal’s new lessee constituted the transfer of “unit work” previously performed by Port Authority police officers and, if so, whether an obligation to collectively bargain that transfer was triggered. Ill. A. The standard of review to be applied to decisions by the Panel has, to date, avoided judicial scrutiny in New Jersey.” As a preliminary matter, that deter- * We also received and considered post-argument submis- sions from the Port Authority and the PBA in respect of whether the Port Authority offered to negotiate either the redeployment of the Port Authority police officers or the effects of that redeployment. Nothing in those submissions added to the facts already in the record or to the arguments previously advanced by the parties. * We recognize that, in addition to the unpublished decision of the Appellate Division below, two other unpublished deci- sions of the Appellate Division have addressed the standard of review applicable to Panel decisions; each has concluded that decisions by the Panel are to be treated as if they were issued by an administrative agency. However, we underscore that “[nJo unpublished opinion shall constitute precedent or be binding upon any court” and that “no unpublished opinion shall be 19a mination requires consideration of whether the Panel qualifies as an “administrative agency.” We conclude that, for purposes of judicial review, the Panel is an administrative agency. The Administrative Proce- dure Act, N.J.S.A. 52:14B-1 to -25, defines an agency subject to its reach to include “each of the principal departments in the executive branch .. . and all boards, divisions, commissions, agencies, depart- ments, councils, authorities, offices or officers within any such departments .. . authorized by statute to make, adopt or promulgate rules or adjudicate contested cases[.]” N.J.S.A. 52:14B-2(a). Although the Port Authority is not constituted as or within a department of the Executive Branch of government, it is to “be regarded as performing an essential governmental function|[,]” N.J.S.A. 32:1-35.4, includ- ing the authority to “make suitable rules and regulations|[.]” N.J.S.A. 32:1-19."" Additionally, the cited by any court.” R. 1:36-3. Nevertheless, we note paren- thetically that each of those decisions reaches the same conclusion we endorse today in respect of the proper standard of review for Panel determinations. In its reported case law, New York has applied a deferential standard of review to Panel decisions. See Pagano v. Port Authority, 270 A.D.2d 206, 705 N.Y.S.2d 230 (N.Y. App. Div. 2000) (applying standard that Panel determination “may not be disturbed since substantial evidence supports [it]”); Pell v. Bd. of Educ., 34 N.Y.2d 222, 313 N.E.2d 321, 356 N.Y.S.2d 833, 839 (N.Y. 1974) (explaining that administrative tribunal’s factual determinations are sustained if supported by substantial evidence, and exercise of discretion by administrative tribunal will be sustained “unless there is no rational basis for the exercise of discretion or the action complained of is ‘arbitrary and capricious.’”). " N.J.S.A. 32:1-19 is the codification of Article XVIII of the interstate compact between New York and New Jersey dated April 30, 1921 that created the Port Authority. In contrast, New York codified the entirety of the compact creating the Port 20a Instruction—which created the Panel and vested it with the power to adjudicate labor disputes—was approved by the Governors of both New Jersey and New York, respectively, thereby giving it force and effect. N.J.S.A. 32:2-6; N.Y. Unconsol. Laws ch. 151-A § 2 (2007). That Instruction authorizes the Panel to adjudicate cases. In the aggregate, then, those considerations lead to the conclusion that Panel decisions presumptively are worthy of the deference afforded decisions by administrative agencies. Having concluded that Panel decisions are to be measured by the standard applicable to adminis- trative agency decisions, we shift our focus to de- fining the appropriate standard of review to be applied. In that regard, we recently observed that “(t]he scope of [judicial] review lof administrative agency actions] is limited.” Jn re Herrmann, 192 N.J. 19, 27, 926 A.2d 350 (2007) (citing Jn re Carter, 191 N.J. 474, 482, 924 A.2d 525 (2007)). We underscored that “{a]n administrative agency’s final quasi-judicial decision will be sustained unless there is a clear showing that it is arbitrary, capricious, or unrea- sonable, or that it lacks fair support in the record.” Id. at 27-28, 926 A.2d 350 (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562, 189 A.2d 712 (1963)). We cautioned that “[t]hree channels of inquiry in- form the appellate review function: (1) whether the agency’s action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; Authority—including Article XVIII—in one section. See N.Y. Unconsol. Laws ch. 151 § 1 (2007). 2la and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. Id. at 28, 926 A.2d 350 (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25, 667 A.2d 1052 (1995)). Thus, “[wJhen an agency’s decision meets those criteria, then a court owes substantial deference to the agency’s expertise and superior knowledge of a particular field.” Jbid. (citations omitted). Judicial respect for proper administrativ> agency action runs deep: “Deference controls even if the court would have reached a different result in the first instance.” Ibid. (citing In re Taylor, 158 N.J. 644, 657, 731 A.2d 35 (1999)). That said, judicial allegiance to the actions of administrative agencies is neither unlimited nor blind. We have “emphasized that the judicial role in this kind of case must be both sensitive and cir- cumspect [because wle deal here with the regulatory determination of an administrative agency that is invested by the Legislature with broad authority and wide discretion in a highly specialized area of pub- lic life.” In re Hunterdon County Bd. of Chosen Freeholders, 116 N.J. 322, 328, 561 A.2d 597 (1989). Therefore, it is only “in situations where agency expertise is essential towards understanding the proper context of a dispute [that] a deferential standard of review is appropriate.” Jbid. B. The application of this standard of review informs our conclusion that the Panel's determination that “the Port Authority violated the Instruction when it 22a transferred PBA unit work to non-unit employees without negotiating with the PBA” is not entitled to any special deference and should be rejected. This is because the Panel neither followed the law nor relied on any particularized expertise in reaching its conclusion. In specific, the same organic document that created the Panel—the Instruction—also limits its jurisdiction. In clear and explicit terms, the Instruction states that “the mission and manage- ment responsibilities of the [Port] Authority, includ- ing its organization, staffing, planning, operating and financial policies, shall not be subjects of negotiation with employee organizations.” ‘Emphasis supplied). The lease arrangement in respect of the international terminal delegated to the lessee all of the Port Authority’s obligations under its lease with the City of New York and, hence, relieved the Port Authority from the day-to-day operational responsibility for that terminal. For that reason, the Port Author- ity’s plan to lease to a private party the whole of the international terminal directly implicated “its organization, staffing, planning, operating and finan- cial policies,” a plan that, prior to its implementa- tion, was presented to and approved by the Port Authority's Board and, by the submission and approval of its minutes, by the Governors of both New Jersey and New York. Furthermore, the Panel’s decision hinged solely and exclusively on its inter- pretation of the lease between the Port Authority and JFKIAT, a matter that does not reside within the Panel’s unique area of competence. When gauged in the aggregate, then, the Panel’s determination must be rejected. 23a c. A like result obtains even if one concludes that the Panel did have the authority to substantively deter- mine this matter. We agree with the unanimous determinations of the hearing officer, the Panel, the trial court and the Appellate Division that the security personnel “hired by JFKIAT .. . are per- forming functions previously performed by Port Authority Police Officers both inside . . . and in the frontage area to [the international terminal].” How- ever, we part company with the Panel’s deter- mination that Port Authority police officer work at the international terminal was transferred to JFKIAT in a manner akin to a delegation as opposed to an outright assignment. Relying on disparate sections of the lease between the Port Authority and JFKIAT, the Panel concluded that the security obligations at the international terminal “hal[d] not been eliminated but rather subcontracted by the Port Authority” to JFKIAT. That conclusion simply is not supported by this record. On the contrary, the record supports the view of the hearing officer in respect of the continu- ing relationship between the Port Authority and JFKIAT concerning the operation of the international terminal. That is, that under the lease, the Port Authority withdrew from any further operational responsibility for that terminal. In particular, he noted that, “aside from retaining some _ general oversight of [the international t]erminal .. . as lessor, the [Port] Authority no longer maintains and oper- ates that facility in any cognizable sense.” 24a D. Moreover, even if one concludes that the Panel had the authority to determine this controversy and that the Port Authority in fact transferred unit work to JFKIAT, the question whether the Port Authority was obligated to collectively bargain that transfer remains. We conclude that, in the circumstances presented, the Port Authority was not required to collectively bargain with: the PBA the transfer to JFKIAT of the Port Authority’s obligations under the Security Plan in respect of the international terminal. It is well-settled that employers and employee representatives must bargain with each other in good faith in respect of “wages, hours, and other terms and conditions of employment|.]” Natl Labor Relations Bd. v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 348 . . . (1958) (quoting Section 8(d) of the National Labor Relations Act, 29 U.S.C. § 158(d)). For that reason, whether an employer can “contract out” work has been determined to be “well within the literal meaning of the phrase ‘terms and conditions of employment.” Fibreboard Paper Prods. Corp. v. Nat! Labor Relations Bd., 379 U.S. 203, 210... (1964). That overall rule is subject to a sig- nificant limitation: “As to other matters, however, each party is free to bargain or not to bargain, and to agree or not to agree.” Nat'l Labor Relations Bd. uv. Wooster Div. of Borg-Warner Corp., supra, 356 U.S. at 349 .... Our jurisprudence has refined that analysis. Thus, we have held that, in the context of public employ- ment, a topic is a proper subject for negotiation “when (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject 25a has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy.” In re Local 195, IFPTE, 88 N.J. 393, 404, 443 A.2d 187 (1982). Those refinements are necessary because, “[t]lo decide whether a negotiated agreement would significantly interfere with the determination of governmental policy, it is necessary to balance the interests of the public employees and the public employer.” Jd. at 404-05, 443 A.2d 187. Thus, “[w]hen the dominant concern is the government’s managerial prerogative to determine policy, a subject may not be included in collective negotiations even though it may intimately affect employees’ working conditions.” Id. at 405, 443 A.2d 187. See also, City of Jersey City v. Jersey City Police Officers Benevolent Ass’n, 154 N.J. 555, 568-74, 713 A.2d 472 (1998) (applying Local 195 negotiability test). In the line of authority developed by the Panel, the aggregate of those principles is referred to as the “Fibreboard plus substantial impact” test." That test was developed to “balance[] the right of em- ployees to engage in collective bargaining to preserve unit work against the right of the Port Authority to manage its operations.” Jn re an alleged Improper Practice under Section XI(A)(d) of the Port Authority Labor Relations Instruction, 94 PAERP 21, at 16 (1998). In disputed matters before the Panel con- cerning transfers of work, once it is determined that the work at issue is “unit work” and that the unit work has been transferred from employees covered by “ The Panel first developed this test in The Lieutenant's Case, 77 PAERP 6 (1978). 26a a collective bargaining agreement, “[t]he test requires the Panel to perform the following four-part analysis: 1. Was there a basic alteration of the employer’s operation? 2. Was there a capital investment involved, which would, if collectively bargained, signifi- cantly abridge the company’s freedom to manage its business? 3. Were there issues which motivated the deci- sion[,] such as reducing the work force, decreas- ing fringe benefits, and eliminating overtime payments, peculiarly suitable for resolution within the collective bargaining agreement? 4. Whether the removal of work from the bar- gaining unit has a significant impact upon the bargaining unit? (Ibid. } In its application, “(t]he test is straight-forward.” Ibid. “If the answer to either of the first two questions is ‘yes,’ the transfer of unit work is not a mandatory subject of negotiations.” Jbid. “On the other hand, if the answers to the first two questions are ‘no,’ and the answers to both questions 3 and 4 are ‘yes, the Port Authority must negotiate with the bargaining unit before it may transfer the work.” Id. at 16-17. Finally, “[t]he charging party bears the burden of proving each element of this four-part framework.” Id. at 17. Subjecting the record before us to the “Fibreboard plus substantial impact” test leads to the conclusion that the transfer of the Security Plan work at the international terminal from the Port Authority to JFKIAT was not a mandatory subject of negotiations. 27a On the first question—whether there was a basic alteration of the Port Authority’s operations—the answer must be “yes.” No doubt, by transferring all obligations in respect of the international terminal to JFKIAT, thereby freeing itself of the operational responsibilities for that terminal, the Port Authority indisputably altered its operations in a most basic and fundamental manner. Second, the transaction with JFKIAT involved a $1.2 billion lease agreement that required an $82 million capital investment by JFKIAT in lieu of the Port Authority itself having to replace roadways and parking at the international terminal; the Port Authority also retained a $15 million soil remediation obligation. Those facts compel the conclusion that, in the Port Authority-to- JFKIAT lease transaction, there was a capital investment involved, which would, if collectively bargained, significantly abridge the Port Authority's freedom to manage its business. According to the Panel’s own precedent, an affirmative answer to either of the first two questions resolves the inquiry in favor of ruling that the transfer of the unit work is not a mandatory subject of negotiations. Jd. at 16. That conclusion is buttressed further by applying the third and fourth parts of the “Fibreboard plus substantial impact” test. In respect of the third prong, the hearing offi- cer found that the international terminal “was the anomaly while the [Port] Authority operated the facility.” This is so because, of the nine terminals at JFK Airport, the international terminal was the sole remaining terminal operated by the Port Authority; by that point, all others had been leased to third parties. As the hearing officer succinctly described, “once operational control passed to JFKIAT, [the international terminal] became the mirror facility to 28a the other eight unit air terminals where security and traffic contro] are also exclusive functions of the unit air terminal lessee/operators.” Finally, the removal of the work from the PBA did not have a significant impact on the PBA. The record is clear that not one police officer lost his or her position as a result of the lease of the international terminal. The most the record contains is the unsubstantiated opinion of the Port Authority's police chief that the police officers’ overtime somehow was reduced by reason of the JFKIAT lease. In sum, we concur with the hearing officer’s well- supported conclusions that the PBA failed to satisfy its burden of estab- lishing that the Port Authority hired, subcon- tracted, or permitted civilian [personnel] to perform unit work previously performed by Port Authority Police Officers at the [international terminal]. Under a sublease negotiated by the Port Authority and a consortium known as JFKIAT, the latter entity assumed operational control and management of the [international terminal]. JFKIAT was solely responsible for hiring and assigning the disputed work to the [personnel] in issue. It is not alleged nor does the record reveal that the Port Authority and JFKIAT are joint employers. He further found that “the Port Authority’s uni- lateral decision to sublease operational control and management of the [international terminal] to JFKIAT was not a mandatory subject of negotia- tions” and “that the Port Authority did not violate the work preservation provision contained in the Memo- randum of Agreement or Section XI(A\d) of the In- struction|.]” We adopt those conclusions as our own. 29a IV. The judgment of the Appellate Division is re- versed, and the cause is remanded to the Law Division for the entry of an order vacating the Panel's order and dismissing the impeoper practice charge filed by the PBA. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, and HOENS join in JUSTICE RIVERA- SOTO’s opinion. JUSTICE ALBIN filed a separate dissenting opinion in which JUSTICE WALLACE joins. JUSTICE LONG did not participate. 30a JUSTICE ALBIN, dissenting. Until today, the Port Authority Employment Relations Panel (Panel) was widely recognized as having both the expertise and authority to determine the types of labor disputes that are subject to collective bargaining. In a thorough and thoughtful opinion supported by its own precedents, the Panel came to the unremarkable conclusion that the Port Authority of New York and New Jersey could not privatize the work of Port Authority police officers without first engaging in good faith negotiations with the officers’ bargaining unit. Both management and the union delegated to the Panel the authority to resolve the very fact-sensitive labor-management dispute present in this case. The trial court and Appellate Division accorded the Panel’s findings the traditional deference owed to an administrative agency. The majority has ignored that deference and substituted its own judgment to reach a different result. In doing so, and in reversing the decisions of not only the Panel but also the trial court and Appellate Division, the majority has swept aside the obligation of management—pursuant to a collective negotiations agreement—to bargain in good faith with its employees for the purpose of reaching an equitable resolution of a labor dispute. I therefore respectfully dissent. I. In 1947, New York City and the Port Authority entered into an agreement (1947 Agreement) that placed what is now known as JFK Airport within the Port Authority’s jurisdiction. In accordance with the 1947 Agreement, the Port Authority is required to “provide police for patrolling, for guarding and for traffic control” at JFK Airport. Jn re an Alleged ee 3la Improper Practice under Section XI(A)(d) of the Port Auth. Labor Relations Instruction, 97 PAERP 28, at 5 (2001). In a document entitled the Port Authority of New York and New Jersey Labor Relations Instruc- tion (Instruction), the Port Authority and the unions servicing JFK Airport, including the Police Benevolent Association (PBA), created the Panel to resolve labor disputes arising from their collective negotiations agreements. In the Instruction, the Port Authority and the PBA delegated to the Panel the authority to make “determinations as to mandatory and non-mandatory subjects of negotiation.” For over thirty years, the Panel has used its specialized expertise to develop a body of law to resolve labor disputes between the Port Authority and its union employees. The Instruction states that the Panel is not bound by either New Jersey’s or New York’s public sector labor laws. In accordance with the Instruction, the Panel applied its own case law to decide the dispute in this case. That labor dispute involves an allegation that the Port Authority failed to negotiate replacing two hundred police officers—staffing the International Arrivals Building ‘IAB) at JFK Airport—with non- union employees. The genesis of the dispute is a long-term lease agreement between the Port Author- ity and private investors (JFKIAT) to construct a new IAB. The lease agreement provided that JFKIAT “sha!l furnish adequate security and guard service or such comparable means as approved by the Port Authority . .. .” (Emphasis added). As noted, pursuant to the 1947 Agreement with New York City, the Port Authority is duty bound to provide security at JFK Airport. In view of the 1947 32a Agreement, no lease with a private entity can strip the Port Authority of its non-delegable duty to fur- nish that security. Significantly, the Port Authority does not dispute that following its lease with JFKIAT, it remains responsible for security at the IAB, where the Port Authority’s police officers per- form “a variety of security functions,” including traffic control in front of the IAB. Zd. at 6-7. After the lease agreement went into effect, the Port Authority transferred PBA police officers to other areas of JFK Airport while JFKIAT hired non-union security workers in their place. The Port Authority claims that it did not have to negotiate with the PBA before making that move because “mission and management responsibilities of the [Port] Authority” are not subject to negotiations. The Instruction by which the Port Authority must abide, however, empowers the Panel to decide which management decisions are “mission and manage- ment responsibilities.” Here, the Panel focused on the following language in the collective negotiations agreement: [T]here will be no further or additional transfer and/or reassignment of unit work currently and heretofore performed by unit employees without negotiation and all other unit work currently and heretofore performed by Police Officers shall be maintained. All existing Police Officer positions and/or as- signments shall be maintained .. . so long as the work being performed continues to be performed by or on behalf of the Port Authority. Id. at 10-11.) 33a That language persuaded the Panel that the Port Authority was required to engage in good faith negotiations with the PBA before transferring the security functions at the IAB from police officers to non-union workers. Jd. at 24. Ultimately, the Panel concluded that the Port Authority violated its collective negotiations agreement with the PBA by failing to do so. [bid. This Court is obliged to defer to the Panel’s interpretation of the collective negotiations agree- ment so long as that interpretation is “reasonably debatable.” Pascack Valley Reg’l High Sch. Bd. of Educ. v. Pascack Valley Reg’l Support Staff Ass’n, 192 N.J. 489, 496, 933 A.2d 589 (2007) (holding that in public sector labor arbitrations “the scope of review in matters of interpretation is confined to determining whether the interpretation of the con- tractual language is reasonably debatable” (quoting Bd. of Educ. of Alpha v. Alpha Educ. Ass’n, 190 N.J. 34, 42, 918 A.2d 579 (2006)). I agree with the majority that the Panel’s ruling must be “sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record.” Ante at __ (slip op. at 21) (quoting Jn re Herrmann, 192 N.J. 19, 27-28, 926 A.2d 350 ‘2007)). Unlike the majority, I conclude that the record soundly supports the Panel’s decision. IT. In reaching its decision, the Panel applied its own well-established case law developed over three decades. See 97 PAERP 28, at 11 (listing numerous prior cases in which Panel articulated and applied standard). First, the Panel determined that the work now being performed by the private guards is “unit work”—that is, work that PBA officers had 34a customarily performed at the IAB. /d. at 11-12. Second, the Panel found that through its lease with JFKIAT, the Port Authority continued to exercise control over the security functions at the IAB. Id. at 14-15. In other words, by the very terms of the IAB lease, the Port Authority did not get out of the business of providing security at the IAB. See ibid. In place of the police officers, the Port Authority allowed JFKIAT to hire non-union security guards. Therefore, the Panel reasoned that the Port Author- ity transferred unit work without first engaging in good faith negotiations with the union. Jbid. The Panel then applied its own standard—a modified version of the one established in Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 .. . (1964)—a standard that the Panel has described as the “Fibreboard plus substantial impact test.” 97 PAERP 28, at 20 (noting that Panel first enunciated its test in 1978 case, 77 PAERP 6). Under that test, the Port Authority is required to negotiate the decision to transfer unit work if: [1] The Port Authority has not altered its basic operation; {2} The Port Authority has not made a capital investment which, if subject to collective nego- tiations, would significantly abridge the Author- ity’s freedom to manage its business; [3] The issues which motivated the decision were peculiarly suitable for resolution within the collective negotiations framework; and (4) The decision substantially impacts upon the wages, hours, terms and conditions of employ- ment, either quantitatively or qualitatively. (1bid. | 35a First, the Panel determined that the Port Author- ity did not alter “its basic operation as a result of its lease arrangement with JFKIAT.” Jd. at 21. The Port Authority is obliged pursuant to its 1947 Agreement with New York City to provide security at JFK Airport—an obligation that did not change because the Port Authority entered into the lease with JFKIAT. Jd. at 5, 21. As the Panel noted, the security work inside and outside the IAB previously performed by police officers in accordance with the 1947 Agreement was merely reassigned to non-union personnel. [bid. Second, the Panel concluded that the Port Authority did not make “a capital investment which would, if collectively negotiated, significantly abridge the Port Authority's freedom to manage its busi- ness.” Jd. at 21. The Panel reached that conclusion because the capital investment to construct a new IAB did not concern the performance of security functions at the IAB and was “irrelevant to the unit work issue in dispute.” Jbid. Simply put, the Panel found that negotiations regarding the transfer of work to private security guards would not have impeded the capital investment. /d. at 21 & n.7. In that regard, the Panel emphasized the narrowness of its ruling, noting that its decision neither required the Port Authority to negotiate with the union “over its financial arrangements under the JFKIAT lease” nor “prevent[ed] the Port Authority from deciding to have JFKIAT operate the IAB.” /d. at 21 n.7. Rather, the Port Authority’s obligation to negotiate with the union, according to the Panel, arose out of its continuing duty to provide security inside and traffic control outside the IAB. Jbid. Thus, the Panel maintained that collective negotiations with the PBA would not have “significantly abridge[d] the Port 36a Authority’s freedom to manage its business.” /d. at 22 n.7. Third, the Panel found that the financial consid- erations motivating the Port Authority’s decision to transfer the jobs of police officers to private security guards “were peculiarly suitable for resolution within the collective bargaining process.” Jd. at 22. Ac- cording to the Panel, the “impact of competing wage rates” between union police officers and non-union security employees is a proper subject “for resolution within the collective negotiations framework.” IJbid.; see also ante at (slip op. at 25) (“It is well-settled that employers and employee representatives must bargain with each other in good faith in respect of ‘wages, hours, and other terms and conditions of employment|.]” (quoting NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 348 . . . (1958))). Last, the Panel clearly believed that lower paying non-union security jobs threatened to eventually drive down the wages of PBA police officers." 97 PAERP 28, at 22-23. From that perspective, the Panel deduced that “the work performed by non-unit security guards rather than by Port Authority police officers . . . had a substantial impact upon the wages, hours and working conditions of the PBA bargaining unit.” Jd. at 23. Applying all of those factors in a highly fact- intensive analysis, the Panel concluded that the Port Authority had violated its Agreement with the PBA by unilaterally transferring unit work without first '* It is also noteworthy that the hearing officer acknowledged that “Port Authority witnesses admitted that the redeployment of the LAB Police Officers to other terminals at JFK Airport saved the Port Authority in overall overtime payments.” 37a engaging in good faith negotiations. Jd. at 23-24. Our Court has observed that “[q)uestions concerning whether subjects are mandatorily negotiable should be made on a case-by-case basis.” Troy v. Rutgers, 168 N.J. 354, 383, 774 A.2d 476 (2001). It bears mentioning that, in its decision-making, the Panel has served as an nonest broker, finding some Port Authority decisions to be within managerial prerog- ative and others subject to negotiations. See 97 PAERP 28, at 12, 13, 17-18, 19-20, 21 n.6. IIl. The Panel’s decision simply implemented the long- held notion that management and labor should sit across the table and collectively bargain in good faith. See Fibreboard, supra, 379 U.S. at 211. . . (noting that “one of the primary purposes” of our national labor relations policy “is to promote the peaceful settlement of industrial disputes by subjecting labor- management controversies to the mediatory influence of negotiation”). That approach does not imply a pre- ordained result favoring the union. In substituting its judgment for that of the Panel, the majority ignores that the Instruction to which the Port Authority and the PBA are bound authorizes the Panel to resolve this very dispute. The majority submits that the Panel should not have been accorded deference because it lacks the expertise to interpret a contract in the form of a lease. Ante at _ (ship op. at 24). However, in exercising its jurisdiction over labor disputes, the Panel must interpret contracts of all types, including collective bargaining agreements and employment contracts. Interpreting the JFKIAT lease was integral to understanding the obligations of the Port Authority under the collective negotiations agreement with the 38a PBA. For that reason, the Panel fulfilled its duty by considering all of the relevant documents, includ- ing the lease, to determine the Port Authority's responsibilities pursuant to the collective negotia- tions agreement. Cf. Band-Age, Inc., 217 N.L.R.B. 449, 449 (1975) ‘interpreting lease as part of determining obligations under collective bargaining agreement), enforced, 534 F.2d 1 (1st Cir.), cert. denied, 429 U.S. 921. . . (1976). Whether a particular employer decision is the subject of mandatory bargaining is plainly within the expertise of the Panel. Here, the Panel made a fact- sensitive determination consistent with its own precedents. Recognizing the expertise of the Panel and the substantial deference owed its decision, both the Law Division and Appellate Division affirmed the Panel, finding that its decision was not arbitrary, capricious, or unreasonable. Indeed, the Appellate Division deemed the Panel’s “findings and conclu- sions of law” to be “unassailable.” The majority’s needless overturning of the Panel’s holding that the Port Authority was required to engage in good faith negotiations with the PBA before transferring work performed by union em- ployees to non-union employees is completely at odds with the respect our Court typically gives to administrative agencies. I agree with the trial court and Appellate Division that the Panel's decision is amply supported by the record. For that reason, I respectfully dissent. Justice Wallace joins in this opinion. 39a APPENDIX B PORT AUTHORITY EMPLOYMENT RELATIONS PANEL Hearing Officer’s Report Case No. I P-97-28 (PBA) IN THE: MATTER OF AN ALLEGED IMPROPER PRACTICE UNDER SECTION XI, PARAGRAPH A(d) OF THE PORT AUTHORITY LABOR RELATIONS INSTRUCTION, PORT AUTHORITY POLICE BENEVOLENT ASSOCIATION, INC., Charging Party, -and- THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Respondent. REPORT AND RECOMMENDATIONS OF HEARING OFFICER IRWIN KAPLAN APPEARANCES For the Charging Party Alfred Osterwald, Esq., and John McAusland, Esq. For the Respondent Harry M. Agnostak, Esq. On November 7, 1997, John C. Truesdale was se- lected by the Port Authority Employment Relations Panel (“the Panel”) to serve as Hearing Officer, pur- suant to Article XI, Paragraph D(3) of the Port Au- 40a thority Labor Relations Instruction (“the Instruc- tion”), to hear and issue a Report and Recommenda- tions in the above-captioned improper practice charge filed by the Port Authority Police Benevolent Associa- tion (also “Union” or “PBA”). (Joint Exhibit “Jt Exh” 2). Subsequent to a request by the Port Authority (also “Authority” “Charging Party” or “Respondent”) for certain particulars and compliance therewith. by the PBA, the Respondent filed its answer on February 13, 1998. (Jt Exh 3). After two hearing sessions (Oc- tober 1 and October 28, 1998), Hearing Officer Trues- dale learned that the President of the United States intended to appoint him as a Member of the National Labor Relations Board (“NLRB”). The Panel by letter to the parties dated November 10, 1998 noted “A Presidential Appointee in such a full time position cannot engage in outside employment.” There, the Panel also notified the parties of the appointment of the undersigned as a replacement hearing officer for Mr. Truesdale.’ (Jt Exh 12). Further hearings on the instant improper practice charge were held before the undersigned, without objection, on November 24, 1998 at the offices of the PBA, in Englewood Cliffs, New Jersey, and February 11 and 12, 1999, and March 24, 1999, at the Newark Airport, Building #10, third floor conference room. The parties adduced testimony, cross-examined witnesses and introduced exhibits. Post-hearing briefs were scheduled to be post-marked by the close ' The Panel in doing so noted, inter alia, that Mr Truesdale had turned over to the undersigned the transcripts and exhibits from the first two hearing dates (October 1 and October 20, 1998) and that the case would be permitted to go forward with- out interruption. (Jd.). Mr Truesdale was appointed to serve as chairman of the NLRB on December 4, 1998. 4la of business on Friday, May 14, 1999 and reply briefs, by the close of business on Monday, May 31, 1999. These dates were subsequently extended to June 9, 1999 and June 25 1999, respectively, at the request of the parties due to their late receipt of the record (transcripts). The hearing was closed on June 27, 1999. upon receipt of the reply briefs. FINDINGS OF FACT Pleadings: 1 The underlying charge was filed on July 28, 1997, alleging that the employer violated Section XI (A) (d) of the Instruction and the Past Practice Clause of the Collective Bargaining Agreement (herein the “CBA” or the “Agreement”). (Jt Exh I). In a Rider attached to said charge, the PBA noted as follows The PBA has learned that the Port Authority has either hired, subcontracted, permitted or suffered non-unit personnel to perform PBA unit work. Civilian personnel are directing and controlling traffic and are performing security functions at sites at or near the International Arrival Build- ing which function have traditionally and histori- cally been performed by the PBA. This action was taken by the employer without any prior ne- gotiation with the PBA in violation of the Labor Relations Instruction and the Memorandum of Agreement. (/d.). 2 By letter dated November 19, 1997, counsel for the Respondent filed a request to then hearing Officer Truesdale for an order directing the PBA to supply certain Particulars of the instant charge pur- suant Rule 304 (B) of the Panel’s Rules of Procedure. 42a There, counsel for the Respondent asked for, inter alia, the following Particulars:’ 1 On what specific day(s) and at what time(s) have civilian personnel directed and con- trolled traffic at sites near or at the Kennedy International Arrivals Building (LAB)? In what specific manner were civilian person- nel directing or controlling traffic at the IAB on the specific day(s) referenced above in Ques- tion 1? Who are the specific civilian personnel who are controlling or directing traffic at the LAB? On which specific streets, roadways ramps or other areas at or near the IAB have the civil- ian personnel referenced above controlled or directed traffic on the dates referenced above? What specific security functions have civilian personnel performed? On what specific days and at what specific sites at or near the IAB have civilian person- nel performed security functions[?] In which specific manner have civilian per- sonnel performed security functions at or near the LAB? * Hearing officer Trusdale issued an Order to Show Cause dated February 5, 1998, noting, inter alia, that he had previously directed the PBA to supply the information specified in the requested Particulars with the exception of Items 2, 8, and 11 (See Order to Show Cause, n.3). 43a 10 What specific police Officer traffic control and/or direction work and what specific Police Officer security function work at the IAB have civilian personnel performed? 11 3 By facsimile and mail regular dated February 10, 1998, counsel for the PBA filed Particulars as follows: 1 The PBA believes that civilian personnel have performed PBA unit work since the Port Authority transferred operation of the LAB to a private company as discussed in the Port Authority Memorandum previously released in answer to this inquiry. Specifically, on May 14, 1997 and again on May 20, 1997, Delegates at Kennedy International Airport observed civilian security personnel guarding the frontage at the International Arrivals Building. To our knowledge, this has contin- ued on a round-the-clock daily basis, since this time. 2 Stricken, by order of the Hearing Officer. In the same manner in which Port Authority Police Officers had formerly done so. 4 This information in the possession of the Port Authority. We have sought this information by letter dated November 11, 1997. 5 Roadways adjacent to the International Arri- vals Building, including but not limited to Air termina] highway, “A” Road, Terminal Road, West Courtyard, restricted mall for busses and taxis, and the Passenger Pickup Areas A, B, C, D, E, and F. 44a 6 Civilians have been seen performing former Police security functions, including but not lim- ited to Police Post 10, Interior security at the arrivals Area, performing deterrence and security function for arriving passengers Post 11 and 17 East and West Courtyard General Security, securing vehicles and patrolling parking lot in West Courtyard. Security func- tions, including deterrence, on terminal front- age for arriving departing/ passengers. 7 See #1. 8 Stricken by order of the Hearing Officer. 9 In the same manner in which Port Authority Police Officers had formerly done so. 10 See answers to the above inquires. 11 Stricken by order of the Hearing Officer. 4 The Respondent filed its Answer on February 13, 1998 “den[ying] each and every allegation” in the Charge and the Responses to the Authority’s Motion for Particularization of the Charge. As a separate de- fense, the Respondent maintains that the work in ques- tion is performed for an entity which is not the Au- thority and, as such, cannot serve as a basis for an actionable claim of unit work transfer under the Instruction. (Jt Exh 3). Background and Sequence of Events: 5 John F. Kennedy International Airport (*JFK” or “Airport”), is under a long-term lease by the Port Authority from the City of New York. (PBA Exh 7). In ]994, the Port Authority approached the Board of Commissioners (“Board”) to seek planning authoriza- tion to determine whether “modernization” or “re- placement” was the appropriate vehicle for changes at 45a Terminal 4 (“IAB”).° (Tr 444). The Board approved such planning but suggested that the Authority so- licit private investors and allow them to develop Ter- minal 4 in accordance with the Authority’s projec- tions vis-a-vis traffic and building usage. (/d.). In 1995, the Authority solicited private sector interest and received four proposals. In 1997, after a period of evaluation of the various proposals, the process was completed with the work in question leased to a consortium of airport developers and operators known as JFK International Air Terminal LLC (*JFKIAT”). (Tr 477-478, PBA Exh 9, p 10). JFKIAT is a partner- ship comprised of three business entities LCOR, Schiphol and Lehman Brothers. (Tr 478). LCOR was to be the developer responsible for the construction and [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0207%3A1. Public record. Not legal advice.