NJ Supreme Court Rules PERC Wrong to Deny Union Members Salary Increases After Contract Expiration

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The state Supreme Court ruled August 2 that the Public Employment Relations Commission (PERC) was wrong to deny members of specific unions the right to annual salary increases after their contracts had expired.  Yesterday’s narrow ruling looked at specific contract language within the parties’ agreements to make their decision, choosing to not directly address the authority of prior legal doctrine that mandated such payments continue.  How this decision affects the school community is yet to play out.


The Court held that labor unions representing workers for Atlantic County and Bridgewater Township had been entitled to step increases after their contracts had expired as a condition of the collective bargaining agreement in place at the time of the contract expiration.  It had been accepted by all sides, the court said, that those increases would continue indefinitely without a contract.

Unfortunately, the ruling in In the Matter of County of Atlantic; In the Matter of Township of Bridgewater (077447) (A-98/99/100-15), agreed to by all seven justices, did not actually clarify whether ALL public union members have a right to continue receiving step increases after contracts expire. The court offered no opinion on the heart of the case, choosing instead to rule on the specific disputes before it.

“We need not determine whether, as a general rule, an employer must maintain the status quo while negotiating a successor agreement,” Justice Lee Solomon wrote for the court. “In these cases, the governing contract language requires that the terms and conditions of the respective agreements, including the salary step increases, remain in place until a new [collective-bargaining agreement] is reached.”

So, past precedent that allows employees to receive annual raises, known as “salary step increments,” after their collective bargaining agreements expire remain in question.  Known as the “dynamic status quo,” it had been widely accepted that public employers were required to “maintain the status quo” as they negotiated a new contract. PERC, which is charged with enforcing the state’s employer-employee relations law, found that economic conditions and legislative changes that came after the recession made it impractical and burdensome to require the continuation of step increases.

An appeals court previously overturned PERC’s decision, finding that it did not have the legal authority to abandon the doctrine and that “concerns regarding budgets are not a primary consideration when the agency safeguards the rights of public employees.”

Despite discussing the issue at length during oral arguments in March, the Supreme Court decided to set aside that issue and let the appeals court ruling stand.

The Court wrote, “Our decision today does not govern future negotiations, other than to suggest that parties would be wise to include explicit language indicating whether a salary guide will continue beyond the contract’s expiration date.”

The vast majority of school collective negotiations agreements do not explicitly address the issue. That silence is in the context of the 1996 Neptune decision and the 2014 amendment to N.J.S.A. 18A:29-4.1 which permits local boards of education and associations to agree to salary policies of four or five years.  As such, individuals beginning their negotiation process should be aware of today’s decision.