A Capehart Scatchard Blog

Districts Ordered to Pay Increments Upon Expiration of Contract

By on December 10, 2018 in Labor & Employment, Other with 0 Comments

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

The question of whether a school district with a collective bargaining agreement of less than five years in duration is required to pay the increment for teaching staff members at the expiration of the agreement has existed since the amendment of N.J.S.A. 18:29-4.1.  The amendment permits school districts to adopt a salary policy schedule for a period of up to five years.

In In the Matter of Englewood Board of Education and Englewood Teachers’ Association (decided October 29, 2018) and In the Matter of Cliffside Park Board of Education and Cliffside Park Education Association (decided October 16, 2018), the teachers unions requested payment of the increment at the expiration of three year agreements.  The Boards refused and the unions filed for interim relief with the Public Employment Relations Commission (“PERC”) seeking an order that the Boards pay the increment.

The Designee of PERC granted the application in each case.  The Designees reasoned that the increments must be paid after the expiration of the three year contracts because contract language expressed the parties’ intent to maintain all terms and conditions of employment after expiration. Accordingly, the Designees ordered the immediate payment of the increment to all eligible unit employees.

The Designees relied heavily, but not exclusively, on contract language in reaching the conclusion that the unions had demonstrated a likelihood of prevailing on the merits of their respective unfair labor practice charges. The New Jersey Supreme Court’s decision in In re County of Atlantic, 230 N.J. 237 (2017) provided guidance. The Court’s decision focused on analysis of contract language pertaining to continuation of salary and benefits upon expiration of the contract term, albeit in the context of county employees. The critical contract provision in In the Matter of Englewood Board of Education and Englewood Teachers’ Association read:

This Agreement shall be effective as of July 1, 2015, and continue in effect until June 30, 20 {sic}.  If this Agreement expires, it is expressly understood that all provisions and benefits contained herein shall remain in force until a new agreement is agreed upon and signed by the parties.

Two similarly worded contract provisions were important to PERC’s decision in In the Matter of Cliffside Park Board of Education and Cliffside Park Education Association.

This Agreement shall continue in full force and effect with all attendant benefits and obligations until a successor Agreement is ratified by the Board and Association.

This Agreement shall continue in full force and effect, with all attendant benefits and responsibilities to the Board and Association, until a successor agreement is ratified by the Board and Association.

Of particular interest, the Respondent Boards argued that their situations were distinguishable from the situation addressed by the Court in In re Atlantic County because school districts cannot recoup payments to tenured teaching staff members once made.  Without much analysis, the argument was dismissed as being “of no moment.”

The unions were found to have demonstrated irreparable harm.  PERC precedent was relied upon to hold that a failure to pay an increment amounted to repudiation of the exercise of employees’ statutory right to have such issues negotiated on their behalf by their majority representative.  The notion that ordering payment of the increment would effectively limit the ability of the Boards to negotiate compensation did not hold sway.

It is anticipated that these decisions will be appealed.  In the interim, these developments are significant because (1) most school districts have three year collective bargaining agreements, (2) the requirement to pay the increment upon expiration of the agreement amounts to an automatic salary increase, and (3) a district’s negotiations position may be impacted.  A district should evaluate past practice and the language in its agreement to determine whether it has a similar exposure.

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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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