A Capehart Scatchard Blog

Atlantic County and Bridgewater Township Required to Continue Step Increases After Expiration of Contracts

By on August 4, 2017 in Labor & Employment with 0 Comments

By: Robert A. Muccilli, Esq.
Editor: Sanmathi (Sanu) Dev, Esq.

The New Jersey Supreme Court on August 3, 2017 decided In re County of Atlantic in which it held that the salary increment systems in collective bargaining agreements between two public entities, Atlantic County and the Township of Bridgewater, and their respective FOP and PBA unions remained in effect after the agreements’ expiration dates. The County and Township were required to pay salary step increases during the period between the expiration of those contracts and the formation of their successor agreements. Accordingly, the Court upheld the Appellate Division’s ruling in favor of the unions.

The Court’s decision was grounded on contract provisions touching on continuation of benefits.  Significantly, the Court indicated that it did not need to determine whether, as a general rule, an employer must maintain the status quo while negotiating a successor agreement. That may be an issue for another day. Instead, the Court relied on basic contract principles and review of contract provisions gleaned from the two cases. Several clauses of the contracts captured the Court’s attention.

  • “all provisions of this Agreement will continue in effect until a successor Agreement is negotiated.”
  • “all terms and conditions of employment, including any past or present benefits, practices or privileges which are enjoyed by the employees covered by this Agreement that have not been included in this Agreement shall not be reduced or eliminated and shall be continued in full force and effect.”
  • “this agreement shall remain in full force and effect during collective negotiations between the parties beyond the date of expiration set forth herein until the parties have mutually agreed on a new agreement.”

In addition to the contract provisions, the Court explained that there was a consistent past practice of paying increments upon expiration of the agreements.

The Court advised that had the public entities negotiated clear contractual language leaving no room for confusion, they could have avoided paying the increment upon expiration of the agreement.  As an example, the Court referred to a collective bargaining agreement in the Ho-Ho-Kus School District in which the parties “agree that in the absence of a contractual settlement for a successor agreement prior to June 30, 2015, increments for certified personnel shall not be automatic (i.e., increments shall not be paid unless and until the parties agree to a successor contract).”

The Court suggested that “parties would be wise to include explicit language indicating whether a salary guide will continue beyond the contract’s expiration date.” It explained that had the agreements been silent about whether the terms of the salary increment system were to continue, the issue in the appeals before it would be more complicated, stating  “It might well have required careful consideration of past practices, custom and viability of the dynamic status quo doctrine.”

While this decision did not involve a school district, the Court’s decision appears to have broad ramifications in terms of potential exposure for payment of increment upon expiration of an agreement and with respect to contract negotiations. Hence, school districts should review their collective bargaining agreements and past practices with this issue in mind.

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Robert Muccilli

About the Author

About the Author:

Robert A. Muccilli, Esq. is Co-Chair of Capehart Scatchard’s School Law Group and a Shareholder in the Labor and Employment Group. For over 25 years, he has focused his practice in the areas of school law, and labor and employment. He has represented school districts with respect to a variety of education law issues involving students, teachers, school construction and special education issues including questions pertaining to inclusion, least restrictive environment, discipline, behavior management, transition, evaluation, discrete trial instruction, medically fragile students, dyslexia, Down Syndrome, Aspergers Syndrome, and equal access to activities and services for disabled individuals. He has also been recognized as one of South Jersey’s Top Attorneys as published by SJ Magazine. Mr. Muccilli is admitted to practice law in New Jersey, the United States District Court for the District of New Jersey and Washington, DC.

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