By: Jennifer Weitz, Esq. and Ty Hyderally, Esq.

In Borough of Carteret v. Firefighters Mutual Benevolent Association, Local 67, 2021 N.J. LEXIS 642, the New Jersey Supreme Court discussed the “reasonably debatable” standard with regard to an arbitrator’s interpretation of a labor agreement. More broadly, the Court also signaled that a municipality must abide by the spirit as well as the letter of a collectively negotiated agreement (CNA).

In 2011, Carteret and the Firefighters Mutual Benevolent Association, Local 67 (“FMBA”) executed a CNA outlining the terms and conditions of employment for firefighters. The CNA was to apply from January 1, 2011 through December 31, 2015. Id. at *3.  With the exception of the fire chief, the FMBA represents all personnel within the Carteret Fire Department. The CNA specified five levels of fire personnel: chief, fire prevention captain, fire official, captain, and firefighter. Id.

The agreement also set a salary schedule for Shift Captains, who would be assigned to each tour of duty. When a Shift Captain was off, the senior firefighter on duty would be the Acting Captain and would be paid at the same rate as a Captain for each day of service. Id. Carteret generally assigned a captain to each shift, to manage subordinate firefighters. Under Section 5 of the CNA, if no captains were scheduled to work a particular shift, the senior firefighter on duty would assume the captain’s responsibilities and receive the captain’s rate of pay for that shift. Id. at *4.

Almost two years after the CNA took effect, in 2013, the Borough created the position of fire lieutenant, a supervisory position between captain and firefighter. The salary for the new position was higher than the highest firefighter’s salary but less than the captain salary. Id. As for the chain of command, if no captains were scheduled for a shift, the lieutenant on duty would be the acting captain.

The Court’s opinion noted that after the position of lieutenant was created, no more firefighters were promoted to captain, and by 2018 all the captains within the department either had retired or were demoted. The position of captain was retained, but all shifts were supervised by lieutenants. However, Carteret paid lieutenants their regular salary and not the captain’s salary as required by the CNA. Id. at *5.

In 2017 the FMBA filed a grievance against Carteret, alleging that their failure to pay lieutenants as acting captains when they assumed that role violated the CNA. The FMBA requested that the grievance go to binding arbitration. Despite testimony from the fire chief, on behalf of the Borough, that the FMBA agreed to waive Section 5, the arbitrator sided with the FMBA, citing a lack of evidence to support the fire chief’s contention. Id. at *6.

The arbitrator pointed out that having lieutenants perform the duties of shift commanders supported the conclusion that “intentional or not,” the Borough had replaced captains with lieutenants, and paid lieutenants less, in violation of Section 5. The arbitrator ordered Carteret to pay the acting captain’s rate for every shift in which a lieutenant was acting captain since the grievance was first asserted. Carteret owed over $56,000 in backpay. Id. *7.

The FMBA sought to enforce the award and Carteret counterclaimed to vacate. The Chancery Division upheld it, but the Appellate Division reversed, on the basis that the job descriptions for firefighters and fire lieutenants created uncertainty as to the application of the CNA. Id. at *8. The arbitrator, in the Court’s view, should have given more weight to the past practice of lieutenants working as acting captains without demanding acting captain pay.

The New Jersey Supreme Court granted certification. Id. at *9. The Court began its discussion by noting the benefits of arbitration, and that arbitration is mean to provide finality. It also noted that the interpretation of a labor agreement is a question for an arbitrator, with any award resolving a public sector dispute acceptable as long as the award is “reasonably debatable.” Id. at *11 (internal cites omitted). Therefore, even if a court disagrees with the arbitrator’s position, the reasonably debatable standard prevents a court from substituting its own judgment for that of the arbitrator’s.

The Court then looked to the CNA for guidance. Id. at *13. It noted that the creation of the lieutenant position in 2013 introduced ambiguity into the CNA, which was drafted prior. Carteret argued that because the agreement did not mention “lieutenants,” the arbitrator engrafted terms onto the CNA. The FMBA pointed out that the CNA quite obviously could not have discussed lieutenants, and that the agreement provided for captain’s pay to any non-captains of lower rank (emphasis in the original). The Court found both interpretations plausible, and therefore the arbitrator’s decision to adopt the FMBA’s position was supportable. Id. at *14.

The Court also noted that, by the Borough’s own admission, the CNA as a whole applied to lieutenants, and therefore the Borough’s attempt to carve out Section 5 was, reasonably, rejected by the arbitrator. Id. at *16. The Court reinstated the arbitrator’s award. Id.

Happily, the union prevailed in this instance. However, the opinion is plain that if the arbitrator had chosen to side with the Borough, that decision would also have been allowed to stand. Therefore, it is important to ensure that any change made by an employer that affects workers is accurately and adequately reflected in a CNA, to provide protection for all employees intended to be covered by the agreement.

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