Court Upholds Arbitrator’s ‘Reasonably Debatable’ Decision On Overtime For Shift Change

The collective bargaining agreement between Middletown Township, New Jersey and the Middletown Township Police Superior Officers Association contains a clause that “Management has the right to change shifts or the hours worked but must negotiate any impact of its changes in reference to changes, wages, overtime and other compensation with the union.” A different labor organization represents the rank-and-file members of the Township’s police department.

In January 2012, the Union that represented patrol officers negotiated an agreement with the Township in which the officers would use a modified “Pitman schedule” and work ten-and-one-half-hour workdays. As a result, the Township also implemented a schedule requiring superior officers in the patrol division to work the same schedule necessitated by their supervision of the patrol officers.

The Association filed a grievance, asserting that it had not agreed to work a modified Pitman schedule, and therefore, its members were entitled to overtime for any hours worked beyond eight hours a day. The grievance relied on contract language limiting the workday to eight hours, and providing for overtime for all hours worked outside an eight-hour day.

In a Memorandum of Understanding signed in June 2012, the Association agreed through an MOU that its members would be placed on a modified Pitman schedule beginning July 1. The MOU recognized a grievance period between January 1, 2012 and March 29, 2012. It then stated: “The Association will not seek any additional remuneration in connection with their grievance after March 1, 2012 for the remainder of the Schedule trial period ending on or about July 1, 2013.” This latter provision conflicted with the previous sentence of the MOU, which established the grievance period ending on March 29, 2012, instead of March 1, 2012.

An arbitrator ordered the Township to “pay overtime to patrol sergeants and lieutenants, excluding detectives, for every day they worked beyond their normal eight-hour tour from January 1, 2012 through and including March 27, 2012.” In resolving the discrepancy regarding the grievance period, the Arbitrator concluded that the Township’s attorney had drafted the MOU and had mistakenly inserted the date of March 1. Following the rule that contract language is to be construed against whoever drafted it, the Arbitrator established the grievance period as running until March 27, 2012.

The Township challenged the Arbitrator’s opinion through the court system. An appeals court, however, rejected the challenge. The Court noted that “we are mindful that in a public sector arbitration, courts will accept an arbitrator’s award so long as the award is ‘reasonably debatable.’ Under the reasonably debatable standard, a court reviewing an arbitration award may not substitute its own judgment for that of the arbitrator, regardless of the Court’s view of the correctness of the arbitrator’s interpretation.

“An arbitrator exceeds her authority where she ignores the clear and unambiguous language of the agreement. Here, the Arbitrator considered all of the contractual clauses pertinent to the dispute. She did not disregard certain terms of the contract as the Township suggests; rather, she read the contract as a whole. We are satisfied that the Arbitrator’s interpretation of the pertinent contractual clauses was reasonably debatable.

“The Township also asserts that its managerial prerogative to maintain operational efficiency is a public policy rationale recognized by the courts and legislature, and that the implementation of the modified Pitman schedule was non-negotiable. We discern no violation of public policy. The award does not prevent the Township from implementing its desired schedule but rather addresses overtime compensation for hours worked beyond an eight-hour shift. The Township does not identify how public policy is violated by a requirement to pay overtime compensation.”

Middletown Township v. Middletown Township Police Superior Officers Association, 2017 WL 1788285 (N.J. App. 2017).