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  • Martin J. Malague

N.J. SUPREME COURT: CHAPTER 78 ENDURES THE LIFE OF A COLLECTIVE BARGAINING AGREEMENT

Updated: Oct 13

The New Jersey Supreme Court recently clarified that employee health insurance benefit contributions could not be negotiated until after the expiration of the Collective Negotiations Agreement (CNA) in which employees reach Tier 4 level of contributions prescribed by Chapter 78, regardless of when the Tier 4 contribution is reached during the term of the CNA.


Chapter 78 became law in 2011 and detailed four successive “Tiers” of contributions employees would make toward their health insurance premium. The Ridgefield Park Board of Education and the Ridgefield Park Education Association disagreed whether employee health contributions were negotiable in the year after the employees had reached Tier 4, or in the year after the expiration of the CNA in which the employees had reached Tier 4. The two parties were operating under an agreement that covered 2014 - 2018 with employees contributing in the initial year, 2014 - 2015, at the Tier 4 level. In the subsequent contract years, employees contributed 1.5% of their salaries, or the minimum required by law. When the initial year of the CNA expired, the Board argued that employees should pay at the Tier 4 rate for the remainder of the CNA. The Association contended that, once the Tier 4 year had passed, the contract term of 1.5% should be in effect for the CNA’s remaining three years.


The Board and the Association took the dispute to Public Employment Relations Commission (PERC), which held that Chapter 78 precluded health insurance negotiations until after the CNA had expired and that employees should continue to pay at the Tier 4 level. The Association appealed to the Appellate Division of the Superior Court, which reversed, placing employees at the 1.5% contribution level and asserting that adherence to the plain language of Chapter 78 would bring about an “absurd result.”


In In the Matter of Ridgefield Park, the Supreme Court reversed the Appellate Division and restored PERC’s ruling that Tier 4 payment would govern the remainder of the contract. The Court pointed to the language of Chapter 78, which states that, “public employers and employees who are in negotiations for the next collective negotiations agreement to be executed after the employees in that unit had reached full implementation of the premium share” and that after “full implementation” the employees’ contribution levels “shall become part of the parties’ collective negotiations in a manner similar to other negotiable items between the parties.” Moreover, the Court considered the context in which the legislation was enacted and noted the Legislature’s interest in lowering health care costs over the long term.

This Alert provides information about the current developments in New Jersey education law. It is necessarily general and not intended as legal advice or a substitute for legal advice. Questions about individual issues should be addressed to the attorney of your choice. Contact Martin J. Malague or Anthony P. Sciarrillo of Sciarrillo Cornell at edlawgroup@sciarrillolaw.com

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