The Superior Court of New Jersey Appellate Division sided with the Hoboken Municipal Employees Association over a 2020 pay dispute over demotions when the city had financial woes and laid off workers during he early part of the COVID-19 pandemic.
“First, we conclude, as did the judge, that the record was devoid of facts to support of a past practice of unilaterally setting wages that could be extended to demoted employees. As the judge observed, new hires and promoted employees do not have the same expectation of a certain salary within the range,” Appellate Judges Stephanie Anne Mitterhoff and Carmen Alvarez ruled on Friday.
“New hires can either accept or reject the job based on the salary offer. Promoted employees presumably receive either a more prestigious title, a pay raise, or both. Demoted employees, in contrast, are required to accept a lesser title and salary than that which they previously bargained for. The judge was correct that the absence of a factual basis for extending the City’s past practice to demoted employees is obvious and not subject to debate.”
The dispute came in part due to an anticipated $7,420,795 budget shortfall in 2020 that was initially projected to cause up to 80 layoffs.
After hearing from angry employees and crunching some numbers, the city indicated they’d be laying off 26 municipal workers in April 2020.
By the following month, layoffs rights notices were given to the affected employees, with those with seniority offered “lateral” or “demotional” bumping rights.
“When exercising lateral bumping rights, grievants bumped employees who were in a different position but who held the same title. When exercising demotional bumping rights, grievants bumped employees who were in a different title with a lower pay range,” Friday’s ruling explains.
“The City unilaterally set salaries for all employees who exercised their bumping rights at $35,000 per year, and they were provided an additional $1,000 for every year of service since 2012, even if they were hired long before that time.”
The court also noted that many of these employees remained in the same titles or positions and still took a pay cut, with these salaries set without any negotiations with the HMEA.
For these reasons, the HMEA filed a grievance against the city and sent a request to the New Jersey Employment Relations Commission (PERC) for a panel of arbitrators.
At the arbitration hearing, the HMEA contended that the city violated their collective bargaining agreement by not engaging in a proper negotiation process before slashing salaries.
On January 15th, 2021, the arbitrator ruled that the city violated the CBA with respect to workers’ lateral bumping rights, though said their was no issue with the demotional bumping.
However, Hudson County Superior Court Judge Anthony D’Elia reversed the decision on May 26th, 2021.
” … I think it’s unreasonable based on this record to conclude that the union would have shut its mouth in the past if they reduce people’s salaries, and … unilaterally pick the salaries that they would get when … they had a bump and go to a lower title. There’s been no … factual basis to support that conclusion at all,” D’Elia ruled at the time.
While the city challenged that decision, the appellate court upheld D’Elia’s ruling.
“As noted by Judge D’Elia, the City agrees there was no emergency regulation enacted to permit the City to disregard the CBA and set salaries as a matter of managerial prerogative,” they ruling says.
“Thus, the arbitrator erred as a matter of law to the extent he relied on the fiscal crisis alone as the reason why the wages of the demoted workers were non-negotiable.”