Interest Arbitrator Must Analyze All Statutory Criteria

The Borough of Paramus, New Jersey and Local 186 of the Patrolmen’s Benevolent Association (PBA) were unable to agree upon the terms of a new contract to begin in 2008. New Jersey, like most states with collective bargaining, has a statutory scheme where negotiations for public safety officers end with binding arbitration if a voluntary agreement is not reached. The New Jersey statute contains a list of criteria the Arbitrator must consider, including the employer’s ability to pay, the wages and benefits paid in comparable jurisdictions, and the cost of living.

The Arbitrator awarded a four-year contract from 2008 through 2011 with 4% across-the-board increases for all bargaining unit members. Dissatisfied with the Arbitrator’s opinion, the Borough challenged the award before New Jersey’s Public Employment Relations Commission.

The Commission agreed with the Borough, and overturned the Arbitrator’s award. The Commission concluded that “the award must be vacated and the matter remanded. The Arbitrator summarized the parties’ positions including their views on the application of the statutory factors. However, the Arbitrator did not provide an independent analysis of the relevant factors and how he weighed each of them against the evidence presented to reach his award. It was not sufficient to simply assert that he considered the parties’ evidence and arguments.

“On remand, the Arbitrator must discuss each of the statutory factors and then explain how the evidence on each relevant factor was considered in arriving at his award. The Arbitrator must also address the arguments of the parties and explain why he accepts or rejects a specific argument. For example, in his discussion of the financial impact on the governing unit, its residents and taxpayers, the Arbitrator concluded that the Borough would not be immediately devastated if the PBA’s wage proposal were awarded.
However, the Arbitrator did not discuss the weight he gave the factor or how the evidence supports his conclusion. The Borough asserts that two experts testified about its financial condition. If the employer submitted evidence and argument regarding the Borough’s financial condition, the Arbitrator must address that evidence and explain how it was considered in arriving at the award. This exercise must be repeated for each relevant factor and for each term of the award.”

Borough of Paramus, No. 2010-35 (N.J. PERC 2010).
This article appears in the May 2010 issue