From those PBA members who plunged wearing kilts and war paint to those who plunged dressed as superheroes to those who plunged wearing barely anything, they accentuated the reason thousands of them once again stepped up for the Polar Bear Plunge on Feb. 20 in Seaside Heights: Pride.
Legal Splendor
The NJ State PBA’s one-of-a-kind, best-of-its-kind Legal Protection Plan provides security that no law enforcement officer can afford to be without.
The 4-1-1
THE 4-1-1: Fundraisers and Fun
What’s Happening: A list of all upcoming PBA events, including golf outings, fund-raisers and more.
Now that NJ State PBA members have had a chance to absorb the Governor’s Pension Commission report, the most frequent question asked is, “Will the legislature adopt this plan?” Or, more directly, “Are they going to take my pension away?”Anyone who has followed the path that led to poorly designed laws like Chapter 78 and arbitration caps know that in Trenton, anything is possible. But the reality is the odds are against the
adoption of the report as proposed.
There are a few factors that have slowed down the consideration of the plan. First, the governor’s defiance of the law in making the statutorily-required pension payments has left a seriously sour taste in the mouth of Democrats and Republicans who supported Chapter 78 because of the promise of eventual full-pension funding. Their comments to us indicate they are very uncomfortable agreeing to more pension cuts when the law they promised would fund the state pensions wasn’t followed. Second, there are certainly political considerations about upcoming elections that can’t be overlooked.
But most importantly, despite the sincerity of the Commission members in proposing these draconian cuts, their lack of analysis of PFRS has opened a door for the State PBA to highlight what the Commission didn’t tell the State Legislature. It also brought together a number of unlikely allies who previously would never have been on the same page about blocking this proposal from being applied to PFRS. Both of these have raised eyebrows in Trenton and strengthened the PBA position in the debate about the future of the pension system.
We are learning from our many meetings with legislators and their leadership that they are aware PFRS is well-funded, and that it represents only a small fraction of the state budget. This is an important step. There was little attention to such details from legislators during the Chapter 78 debate. Ensuring they know that the vast majority of PFRS is locally-funded relieves a concern that exists for the teacher’s pension system that is exclusively state-funded. That turns the debate from why not adopt the Commission plan to why is PFRS even in the discussion? The re-education process is extremely valuable to comparing the Commission’s recommendations to PFRS, and it has given the PBA a chance to propose some outside-the-box thinking about pensions that is gaining traction.
It is also interesting to watch the development of relationships between the PBA, FOP, FMBA and IAFF in crafting an agenda that formerly would have occurred independently. But what is most surprising is the discussions that have taken place with the NJ League of Municipalities. For decades, the League has served as the primary opponent of every collective bargaining and benefit enhancement PBA members have achieved or desired. But when it comes to the Pension Commission report, the League has stood firmly with us in opposing the inclusion of PFRS. Not only have substantial discussions taken place between the PBA and League to craft a similar strategy to oppose the Commission’s pension recommendations, but a working group has been developing to discuss next steps in the future of PFRS. While none of us know where this relationship will end up, or whether we will stay on the same page during these discussions (they have other reasons to oppose the reports that don’t involve the PBA), the fact we are currently in talks has captured everyone’s attention in the State House.
All of this has brought us to a place where we are thinking smarter about pensions in general in order to come up with a plan that ends the cycle of proposals to eliminate public employee pensions. One of the options on the table is for PFRS to split off from the state system and become, in effect, an independent pension system. This is not a unique concept. Many states have taken this approach for police and fire employees and have successfully managed their pensions, preserved benefits and watched their investments take off.
Colorado, Washington State, New York, Ohio and Illinois have well-funded police and fire pension systems that operate independently of the state. There are many benefits to this approach. Establishing a “labor-management board” would give the board complete legal authority over pension benefits, funding and investment strategies. Doing this takes the power away from the governor and legislature to fool around with pension payments, provided the new board is granted legal powers to compel funding. It would give the board power to invest its own funds and remove outside influence of political contributors that seems to have driven money-manager fees into the hundreds of millions of dollars. Retirement decisions and policy would be set by the board, and not the Division of Pensions which often refuses to enforce the PFRS Trustees directives. And it would give ownership of the plan directly to employees to carefully safeguard the future
of the pension system.
But these are concepts that must be carefully analyzed over time, and it is a proposal the State PBA won’t rush into. Working with partners like the National Conference of Public Employee Retirement Systems (of which we are members) and meeting with professionals from other states is helping to shape our thoughts as we look for best practices and to see if this can work in New Jersey. But let’s be clear: these are options for us to consider that must be right for PBA members present and future. Having an alternative to consider gives us flexibility in Trenton too that ensures there won’t be a rush to pass another poorly designed pension law or to strip away a benefit that was promised when you took your oath to protect and serve.
As we reported in the March issue of NJ COPS, Judge Mary Jacobson ruled in favor of the NJ State PBA and other New Jersey labor unions in concluding that the Gov. Christie administration violated its Chapter 78 funding obligations by failing to make the full pension contribution for Fiscal Year (F/Y) 2015. That same issue is pending in a new lawsuit which we just filed for F/Y 2016.
The state recently filed an appeal of that decision to the New Jersey Appellate Division. Shortly thereafter, it filed a request to the State Supreme Court to hear
the case directly. We have supported that application because this issue is far too important to be delayed through review of an intermediate appellate court and must ultimately be addressed by the Supreme Court.
We are pleased to advise that the Supreme Court has now taken the case and agreed to hear it on an expedited basis. Briefs are due by the time we go to press, and oral argument on the case is scheduled for May 6.
This is shaping up to be one of the most important cases decided by the Supreme Court this term, or possibly any term. It is likely to address the issues of how to characterize pension rights, the circumstances in which pension obligations can be relaxed and what obligation the state and the governor have to make the contribution amounts owed for 2015 and 2016. We expect a decision by June 30, and, of course, we will keep you advised.
Court sets standards for employer liability for harassment/hostile work environment complaints
Recently, the New Jersey Supreme Court issued a significant decision which will have an impact on the ability of a law enforcement officer, and any public employee, to pursue harassment complaints. The decision also addresses when, and under what circumstances, an employer can be held liable for the actions of supervisory officers and employees. In Aguas v. State, the Supreme Court concluded that the State Department of Corrections (DOC) may have had a valid defense to a correction officer’s complaint of sexual harassment by two of her supervisors if the employee did not reasonably follow the DOC’s harassment policy. The court also adopted a broader definition of who can be considered a “supervisor” for purposes of establishing an employer’s liability.
Like most employers, the DOC had issued a written policy prohibiting discrimination in the workplace, and prohibiting sexual or gender-based harassment of any kind, among other prohibited conduct. The policy encouraged employees to report incidents to a supervisor or to the DOC’s Equal Employment Division but did not require employees to submit the report in writing. A corrections officer subsequently claimed that she complained of sexual harassment by two of her supervisors on several occasions. While there was a dispute over whether the corrections officer reported the incidents in accordance with the policy, there was no dispute that she was aware of the policy and had, in fact, filed complaints in the past.
The officer filed suit under New Jersey’s Law Against Discrimination (LAD). The trial court granted the state’s motion for summary judgment and dismissed the correction officer’s complaint. On appeal, the Appellate Division affirmed the dismissal of her complaint. Because the Appellate Division’s decision was unanimous, the corrections officer petitioned the Supreme Court to hear the appeal. The court granted her request. The Supreme Court reversed the Appellate Division’s decision and remanded it for further proceedings. Specifically, the court held that the state could avoid liability by demonstrating that it exercised reasonable care to prevent and correct any sexually harassing behavior. It could further support its case by demonstrating that the corrections officer unreasonably failed to report her complaint or to take advantage of any preventive or corrective opportunities provided by the DOC’s policy.
Additionally, the court rejected the state’s claim that it could only be held liable by supervisors who were empowered by the employer to take concrete employment actions against an employee or, in other words, to make a significant change in an officer’s employment status such as hiring, firing, failing to promote or reassign or causing a significant change in benefits. Instead, the court adopted a much-less-restrictive standard by defining a supervisor as one who is in charge of an officer’s daily work activities or had the authority to take or recommend employment actions affecting the employee or to direct the employee’s day-to-day activities in the workplace.
This decision will have an impact on the extent to which an employee must comply with a public employer’s workplace harassment policy. It will also have an impact on whether the actions of supervisory law enforcement officers can create liability for an employer even if they are not involved in establishing or setting policy, or in actually making changes in an employee’s status.
And while this case involved claims of sexual harassment, it is not limited to only that type of harassment or discrimination. The same, or similar, issues could arise for any claims of unlawful harassment or discrimination prohibited by the LAD. In such cases, the courts or administrative agencies will look to whether the employer had a written policy, whether the policy was followed and who committed the alleged harassing conduct, among other issues. The Aguas decision will not only affect whether an employee can demonstrate liability based upon an employer’s workplace discrimination policy, but also it will affect supervisory law enforcement officers and whether their conduct may result in liability of the employer or that supervisor.
Most public employers, if they want to try to avoid liability, have adopted workplace harassment/discrimination polices. The case emphasizes the importance of law enforcement officers being familiar with the policies adopted by their employers, and to follow those policies if a claim of prohibited harassment and/or a hostile workplace environment based on prohibited discrimination is being contemplated. By the same token, it is important that supervisory law enforcement officers become familiar with the policies adopted by their employers so any complaints that are made can be properly dealt with pursuant to the terms of the policy. The actions or inaction of supervisory officers may result in liability on the part of the employer and perhaps also discipline of the supervisor.
What every police officer needs to know
By Jennifer Trattler
Who best to inform you on how to use the evidence of video cameras to your advantage than the man who does it for a living? So, the NJ State PBA flew in Michael Rains, the principal and founding member of the California-based Rains Lucia Stern Law Firm, to speak to PBA members at the annual mini-convention in Atlantic City on March 4.
Rains, the head of the Criminal Defense and Legal Defense of Peace Officers Practice Groups at his law firm, was a former officer with the Santa Monica (California) Police Department and came from a place of understanding during his nearly two-hour long presentation.
“I’m here to talk about your new world. Your new world consists of video evidence. The realities of video evidence and recent events in Ferguson and New York have changed the way of police work forever,” stated Rains.
Body cameras are coming. There’s no way around it. Departments and the PBA have to prepare for it but as officers; you have to prepare yourself.
Rain first explained the six assumptions that every officer needs to make about video evidence.
The six assumptions
- Video and audio evidence of police use of force is usually graphic and ugly.
- Every contact between an officer and individual is being recorded.
- The fact that an officer does not recall an incident as it is shown on the video does not mean the officer is lying.
- Video evidence is more clearly and accurately analyzed if audio recordings accompany it.
- Video may not capture the event precisely and may only provide circumstantial evidence.
- Forget about watching a video replay of an incident once and understanding what the video shows. In most cases analyzing video evidence accurately requires hours of time.
And Rains wrapped up his segment by addressing the most important takeaways from the lecture.
The 10 most important takeaways from wearing body cameras
- When should the body camera be activated?
- Right of police officers to review video before preparing reports and giving interviews.
- Procedures for redacting private and personal information accidently recorded.
- The length of time video is stored and retained.
- Monitoring by supervision unrelated to a complaint or investigation.
- Department use of video for training.
- Can video be obtained under the Freedom of Information Act?
- The cost:
- Paying overtime to review video at the end of shift before writing a report.
- Storage space and uploading video content to a server.
- Repair and maintenance of equipment.
- Hiring a systems administrator.
- Educating the public about limitations of video evidence and why officer’s accounts differ from the video.
- Re-thinking how the agency will respond to the public and media when a graphic or ugly use of force captured on video goes viral.
On the very hour of its release, I had the opportunity to read the Roadmap to Resolution, the 51 page report of the New Jersey Pension and Health Benefit Study Commission. We were on a train to Washington to meet with the New Jersey Congressional Delegation, so thanks to Amtrak I had plenty of time to digest it all. Although I appreciate the work the Commission put into it and the opportunities to meet with them, I thought I’d come up with my own “Roadmap” for Pension & Benefit solutions for the governor to use. Their roadmap didn’t resemble the ones we are all used to. This is far less than the 51 pages in their version, and if he has ever used MapQuest, the governor shouldn’t get lost. Unfortunately this map doesn’t lead to Iowa or New Hampshire. It stays in New Jersey where this road began. It’s where the journey should have ended in 2011 when he told everybody else on the entire map how swell the ride went. It’s some old advice, and some new, with the same destination in mind.
Suggested Routes: Common Sense, Fiscal
Responsibility, Fairness, Respect
1. Make first available U-Turn! The road
you’ve been on won’t help any of us get to
the retirement office!
0.0 miles
2. PLEASE stop investing in high-commission,
high-fee hedge funds. You hit the $600.2
million dollar mark for 2014 alone in fees
and commissions. (That’s $1.6 million a DAY,
which puts you at the $1.5 billion mark
since you took office!) The percentage of
our pensions in hedge funds is outright
dangerous and the tolls that your donors
are charging make driving on this road
downright irresponsible and unaffordable.
Freeway ahead, take the first exit please.
6.2 miles
3. Sorry, Governor, two way traffic! When
Judge Jacobson ruled with you in 2014,
you had some cordial words for her: “I am
pleased the court recognized the necessity
and urgency of this decision.” In 2015, she
ruled against you and you called her decision,
“Liberal Judicial Activism.” Those are
some harsh words for a conservative judge
that was appointed by Republican Gov.
Whitman. Life is a two-way street Governor;
please watch for oncoming traffic or
you might get hit head on.
11.3 miles
4. Yield to the courts, Governor. We follow
the law and we expect our citizens to follow
the law. Since you put your hand on
the Bible and took an oath, we think you
probably should too.
6.5 miles
5. Please let your appointees on the Health
Benefits Plan Design Committee know we
have some fantastic ideas to significantly
lower the cost of healthcare. You can’t
drive a car with your eyes closed, and we
are about to run off the road. I’ve never
seen that end well. Let’s get to work; we
need to avoid a horrible accident, and you
won’t even let us help steer.
4.1 miles
6. Chapter 78 increased our contributions
from 8.5 percent to 10 percent. That’s $56
million that has literally been deducted
from our paychecks, but you keep giving it
back to our employers as a “rebate.” It’s
time to merge it back into our PFRS system
where it belongs and continue to ensure
we are a well-funded and financially
secure system.
5.6 miles
7. It’s been a long ride so far. Stop at the rest
area and pick up a cool, refreshing C.O.L.A.
Our retired members haven’t had any in a
very long time and they kind of forgot
how good it tastes. They’d buy you one
themselves, but it’s been tough living without
a raise since 2011.
0.3 miles
You’re halfway there! To finish reading Pat Colligan’s roadmap grab a copy of NJ Cops March 2015 issue.
So here I am following Henry Ruiz again. I took over
as chairman of the State PBA Corrections Committee
replacing Henry, and I can tell you his are tough shoes
to fill. Henry is one of a kind when it comes to corrections.
He gave us our name in the PBA with corrections.
I learned a lot from him during the years; he was so
passionate about the members and about corrections.
I will try to meet the standard Henry established for this
monthly report.
The issue that needs immediate attention is the
regionalized prison being discussed for Burlington, Atlantic, Camden,
Salem and Cape May counties. A survey is being done in each of the
counties about the feasibility, which is a good place to start.
There are a lot of unknowns regarding this regionalization. It might
be all smoke and mirrors. The administrations and local governments
think it will lower the population in the jails and save a lot of money,
but they are clearly not looking at all the effects.
From the corrections officers’ standpoint, obviously there is the
possibility of layoffs. But if the regionalization gets knocked down, it
might be because of the impact it has on the inmates, the lawyers, the
courts and communities. If you just think of all the travel from a
regional facility to county courthouses, and from county agencies to
the jail, it’s a bit crazy.
Regionalization for state corrections might make sense from the
perspective that the inmates are doing longer periods of time. But
these are county facilities. We’re doing intakes and releases every day.
If we had a regional facility for the five counties, there might be a
revolving door of prisoners going in and out.
And where will they release them? In the county where they were
convicted, or in the town where the facility is? That will have a profound
impact on the local agencies.
What I find really frustrating is the way that elected officials change
their minds. A year-and-a-half ago, when Cumberland County
absorbed the Gloucester County jail, the freeholders were praising the
facility. They praised their officers. Now, because they are advocating
for regionalization, they are saying the facility is outdated and antiquated.
I guess every time local government changes, new ideas come
in and everybody thinks they know how to save money.
If they do decide to regionalize, they will have to build a new facility.
That might take two or three years to build. And the survey probably
will take six months to a year, so the timetable on all this is unsure.
That’s the hardest part, because our county corrections officers
can’t prepare for the future. They need to stay focused on their day-today
operations and on getting home safe every day.
We will continue from our side with the OPRA request. We know
our jails and how they are run. We know the elected officials are
putting out a smoke screen, saying to the public that it’s going to save
money. We will be able to show whether it is or it isn’t, and show the
effect on the jails. That will be the difference-maker in the long run.
And I believe, when it’s all said and done, that regionalization for five
counties will be too extreme.
Nobody should be surprised by the timing or
content of the governor’s Pension and Health Benefit
Study Commission report. Releasing the
report on the day the governor was to give his
annual Budget Message to the NJ State Legislature
gave substance to an otherwise less- than-noteworthy
speech. Releasing the report the day after
Judge Jacobson ruled the governor broke the law
by not making a full pension payment gave the
governor the political ammo he needed to claim
again that he can’t afford to fund the pension obligation without
bankrupting the state.
What was shocking about the Commission Report, and the
governor’s speech, was the depth to which the New Jersey Education
Association (NJEA) had been engaged in negotiations
with the Commission to end pensions as we know them. The
State PBA was aware the NJEA had been meeting with the Commission
for several weeks to discuss its pension. There can be little
debate that the Teacher’s Pension and Annuity Fund (TPAF)
is in financial trouble. TPAF is grossly underfunded as a result of
the state’s failure to make pension contributions (unlike PFRS,
the teacher pension plan is paid exclusively by the State not by
local government) and the 2001 law that increased teachers’
retirement allowance and cut their pension contributions.
Everyone was shocked, however, when the governor boldly
stated that a “deal” had been struck with the NJEA to implement
the recommendations of the Commission referred to as the
“Roadmap.” The NJEA immediately denied a “deal” was in place
to do anything. But a three- page memo from the Governor
and signed by the NJEA and the Commission leadership suggest that this argument may be
more about semantics than the reality of what is being negotiated
behind the scenes. The proposed Commission report and
“Roadmap” would essentially end every public employee’s pension,
including PFRS, and the State PBA immediately went on
offense to keep members out of the NJEA’s “deal.”
The State PBA knew the direction the Commission wanted to
head in. When State PBA President Colligan, Executive Vice President
Kovar and I met before Christmas with Commission leadership,
they were clear that regardless of how healthy PFRS is, it
would be recommending a dramatic break in providing retirement
benefits to public employees. The Commission never did
an analysis of PFRS, nor did it make a distinction about how
PFRS funding is entirely unrelated to the state’s pension deficit.
Despite a professional and engaged debate, we made our opposition
to any pension changes clear and continued meeting with
legislators to get ahead of the release of the report.
The Commission report proposed what we expected from
that discussion. In fact, five recommendations were made to
establish a “hybrid” pension plan for all public employees. The
Commission recommended:
- Freeze and close existing state and local pension plans.
- Replace pension plans with a new “cash balance” retirement plan (similar to a 401K but with several distinctions to make it less volatile).
- Transfer assets, liabilities and responsibility for old and proposed pension plans to the unions to manage.
- Shift certain pension costs from the state to local governmentsand offset increased local costs by using combined pension “savings” (which means that any money saved from closing PFRS and other funds would be used to offset what the state would have been paying to fund the teacher pension plan).
- Adopt a constitutional amendment to mandate that the state pay off its pension debt but also to eliminate the “nonforfeitable right” to a pension (meaning in part it would abolish the law that says the state can’t cut your pension once you’re on the job).
It shouldn’t need to be said that the State PBA immediately
blasted these proposals and every media outlet in New Jersey
carried a quote from President Colligan outlining that this concept
should exclude PFRS. Legislative leaders were less than
enthusiastic when they read the report. Unlike the rush to pass
Chapter 78, no one is lining up to fast track these recommendations.
There is little surprise that the governor would propose a concept
to close the pension system. What is concerning, however,
is that the “savings” used to justify doing that would be taken
from local government-funded pensions (like PFRS and local
PERS) to offset the state’s pension obligations. Rather than pool
all the pension assets together (as was rumored), this plan
would pool all the “savings” together from these pension cuts.
This certainly punishes PFRS members who pay more for their
pension than any other employee, and the local governments
who have been paying off their pension costs as required by
PFRS actuaries. Once again, the state has caused a crisis but
wants someone else to fix it.
If the NJEA is willing to go along with the Commission’s
“Roadmap,” that is up to the NJEA. Its system and all of their
members’ health benefits come out of the state budget. But
PFRS is far better off financially and getting stronger. Simply put,
the State PBA isn’t willing to carry their anchor in our boat.
This is a debate that is only going to intensify once the final
court decisions are made about the 2015 overdue pension contribution
and next year’s budget is put together. Thankfully, legislators
and the numbers are on our side as the heat is turned up
on pensions once again.
As most already know by now, Mercer County Superior Court Assignment Judge Mary Jacobson issued a decision and order on Feb. 23, in which she found that Gov. Christie violated Chapter 78 by not making the full contribution to the pension funds as required by Chapter 78. The court granted the motions filed by the NJ State PBA and other public employee unions in their entirety and ordered the governor and the State Legislature to determine how best to make up the shortfall of almost $1.6 billion in fiscal year 2015 (FY15).The Background
The court’s decision arises out of the lawsuit filed by the State PBA and
other public employee unions seeking to compel the state to make the
full FY14 and FY15 contributions to the pension funds in accordance
with Chapter 78. The state has consistently failed to make its full pension
contribution known as the “annually required contribution” (ARC). As
early as 1997, lawsuits were filed to compel the state to make these contributions
to the various funds. Then, in 2010, the Appellate Division
ruled in NJEA v. McCormac that the pension laws provide participants
with a right to receive vested pensions, known as a “nonforfeitable right.”
However, the court also ruled that members do not have a contractual
right to compel how those funding obligations are met. The court’s decision
created somewhat of an illusory right because the right to receive a
pension is nonexistent without adequate funding.
Chapter 78
In 2011, the State Legislature passed, and the governor signed,
Chapter 78 into law. The governor boasted about his leadership in the
passage of Chapter 78 as evidence of his ability to lead a bipartisan effort
which solved New Jersey’s problems with the pension funds. Of critical
importance to the litigation, Chapter 78 included language which stated
that “…each member of the (pension funds) shall have the
contractual right to the annual required contribution amount
being made by the member’s employer or by any other public
entity.” It also included language which made the failure of
any public employer, including the state, to make the annual
contributions to be “an impairment of the contractual right
of each employee” and gave jurisdiction over any lawsuit to
the Superior Court.
Chapter 78 allowed the state to phase in its full
contribution over seven years. For the first two years after
Chapter 78 was passed, the state made its required contributions.
However, for FY14, the third year of Chapter 78, contributions
which should have been a three-sevenths contribution of the actual ARC,
the state did not make the payment in full because of what it termed was
a “fiscal emergency” at the end of the year. It was this failure which triggered
the lawsuit.
The State PBA and other public employee unions filed the lawsuit
challenging the state’s failure to make the full contribution required by
Chapter 78. Under the legal standards applicable in the lawsuit, the contractual
right clearly spelled out in Chapter 78 is violated if the state’s
funding failure “substantially impairs” the contract. If the contract right
is “substantially impaired,” the state can only avoid its contractual obligation
if “no other alternative” exists. Simply put, the State PBA argued
that there was a substantial impairment, and the state failed to make any
effort to determine if other alternatives existed.
The Court’s Decision
The court had no trouble concluding that Chapter 78 created a contractual
right to the funding. Judge Jacobson recognized that tens of
thousands of public employees were required to pay increased contributions,
among other increased burdens, in return for the state’s promise
to fund the pensions over the seven year period. Surprisingly, one of the
arguments made by the NJ Attorney General on behalf of the governor
was that the ARC funding obligations under Chapter 78 were unconstitutional
(although the attorney general did not also argue that the
increased contributions by employees were similarly unconstitutional).
In effect, what the governor argued before the court was that he supported
Chapter 78, he pushed Chapter 78, the State Legislature enacted
Chapter 78, he signed Chapter 78 and he boasted about Chapter 78
nationally as evidence of his ability to fix the pension problem. Despite
all of this activity by the governor to push Chapter 78, he came to the
court arguing that what he did was unconstitutional. The court had no
problem rejecting the governor’s claim.
However, as to the FY14 budget, the court found that there was a true
emergency justifying the state’s failure to pay its ARC. Accordingly, the
court denied the unions’ motion to compel payment of the
contributions for FY14. At that time, the governor praised Judge Jacobson’s
decision.
The court’s decision on FY15 was very different. Judge Jacobson determined
that there was no similar emergency for FY15 and that the governor
violated the law by shorting the payment by approximately $1.6
billion. The court concluded that the governor did not exhaust other possible
options before violating the state’s funding obligations. In fact, it
appeared that the state had made little, if any, effort to find other alternatives.
The court also noted that the state could not treat its pension
obligation on the same level as other policy alternatives because of the
language in Chapter 78. The court specifically noted that the governor
rejected the State Legislature’s FY15 budget even though it would have
at least significantly increased the state’s contribution. According to the
court, this fact alone demonstrated that the governor was not even trying
to find alternatives. The court further noted that Gov. Christie’s veto message
did not contain any explanation as to why he chose to make the
particular budget cuts he did, and why he targeted employees’ contractual
rights.
The Remedy
Although the court does not have the authority to directly order a
budget appropriation, or, in this case, to write a check, it does have the
authority to declare that members’ rights have been violated. It did find
those rights violated and ordered the State Legislature and the governor to
determine how to meet the $1.6 billion FY15 funding deficiency. The court
also rejected the governor’s request to put off the remedy for one year. Not
surprisingly, Judge Jacobson now was labeled a liberal activist judge by the
governor’s spokesman because she found that Gov. Christie and the state
violated Chapter 78 by failing to make the FY15 contributions.
The significance of this decision cannot be overstated. The court’s 130-
page decision is a very sound and reasoned decision in which the court
rejected every argument raised by the State and accepted the arguments
raised by the State PBA and other public employee unions. The court’s
decision now forces the Legislature and the Governor to take immediate
action as FY 2015 comes to a close.
The Next Steps
The governor certainly has the right to appeal Judge Jacobson’s decision
and also seek a stay of that decision. As we go to press, we have not
heard what steps the governor will take. It is also unclear what action the
State Legislature will take to try to come up with $1.6 billion before the
end of this fiscal year. The funding obligation is now as much the State
Legislature’s problem as it is Gov. Christie’s. At this point, we also know
that the governor again did not include the full contribution required by
Chapter 78 in the budget he has proposed for FY16. As a result, on behalf
of the State PBA, we are preparing a new lawsuit to compel payment of
the full FY 2016 contributions. At the same time, we are not waiting to see
what action Gov. Christie takes with respect to any appeal of Judge Jacobson’s
decision for FY15. We are preparing a motion to compel to comply
with the decision.
Stay tuned.
We have previously reported on the Appellate Division’s favorable ruling in July, 2014 in the matter entitled Berg v. Christie, et als. The case involves the PBA attack on the effective “freeze” upon COLA increases for PFRS and other public employees. Chapter 78 effectively eliminated COLA increases for the foreseeable future and this suit was designed to compel those payments. In its decision, the Appellate Division ruled that retirees do have a “contractual right” to annual COLA increases and that COLAs are part of the promised pension benefit.
First, the court held that COLA benefits are part and parcel of the base pension benefit itself. The court rejected the governor’s argument that COLA benefits were not an integral part of the pension system, but were instead gratuitous payments periodically authorized by the legislature.
Second, the court agreed with us that COLA benefits, like the base benefits, are a “contract right” to which retired members may seek enforcement. This was based upon the “non-forfeitable right” to pension benefits contained in a 1997 statute. No court had previously ruled that pension benefits – either COLA or the base benefit – constitute a “contract” which is enforceable under law. The Appellate Division remanded the case to the trial court to address a number of issues, including whether there is a sufficient “fiscal emergency” which allows the state to “breach” the contract right of retirees to the COLA benefit.
Since we last reported on this case, the governor has sought review by the New Jersey Supreme Court. We have opposed that request, arguing this is a matter which first should go back to the trial court for a full record before the Supreme Court reviews it. Further trial court proceedings have to wait until the Supreme Court acts.
One issue which has been raised by members is whether this court decision, if upheld, applies equally to retirees who retired prior to 1997. Arguably, there is a distinction between pre- and post-1997 retirees. As noted, in 1997 the legislature enacted the “non-forfeitable right” statute (N.J.S.A. 43:3C-9.5(b)) which is effectively the springboard for our claim that there is a “contract” right to COLA benefits. While we have also taken the position that there is a contract right to a vested pension even without regard to the statute, obviously the statute is our strongest point.
We believe, and continue to argue, that statute applies to individuals who were already retired when it was enacted in 1997. However, the Appellate Division in Berg noted it specifically was not deciding this issue. In footnote 19 of its decision, the Appellate Division stated:
We have intentionally refrained from addressing the scope of the class entitled to protection under section 9.5.As previously noted, a class has not been certified in this case, and the record contains minimal information about the individual plaintiffs. Those employed between 1997 and 2010 gave the State the benefit of their labor in exchange for the contractual protection section 9.5 provided, and those who retired during that time presumably did so in reliance on having contractually-guaranteed COLA benefits in retirement. The parties have not briefed, and we have not addressed, whether the necessary elements for the formation of a contract exist with respect to employees who retired before section 9.5 was enacted, and who had since July 1, 1970, been receiving COLAs. That issue may be raised on remand to the trial court.
In short, while we continue to take the position that the 1997 “non-forfeitable right” statute applies to all retirees, regardless of the year in which they retired. This remains an open issue that will also have to be addressed by the trial court on remand. That should occur once the Supreme Court decides whether to hear the State’s appeal of the Appellate Division decision.
Government Affairs
There is an old saying in government that there is no Republican or Democratic way to pick up the garbage. In the case of analyzing elections, there is certainly a Republican and a Democratic way to view the 2014 midterm elections. There is also a PBA way to view the election, but I will get to that later.
What is obvious about the latest election nationally is that the Republicans came out with a massive sweep of wins throughout the country from the U.S. Senate into a number of State Houses. A Republican will call this result a repudiation of the President and his policies and a victory for limiting government and growing the economy. A Democrat will look at the numbers and point out the two-thirds of the electorate failed to vote and that it was general unhappiness about partisan gridlock that poisoned the well against their candidates.
As with most things in politics, there is some truth in both opinions. Polls showed voters were disgusted by politics in Washington that blamed both parties for a lack of progress. In addition, recent Congressional redistricting throughout the country has provided the GOP with a nearly built-in House majority from districts drafted to be friendly to them. But there is no doubt that after six years of President Obama, a struggling economy, chaos in the Middle East, the failure to implement Obamacare as planned, gridlock in Congress and the history of midterms for a second-term president that those that did vote overwhelmingly expressed their displeasure with the Democratic Party leadership.
Republicans didn’t just win the easy seats, they won in Democratic districts, in Democratic states and they defeated moderate and conservative Democrats in the South and West. They took a majority in the U.S. Senate that likely will be 54 Republican Senators. They expanded their majority in the House to numbers they haven’t had since Herbert Hoover was president.
There will be 32 Republican governors next year after the GOP won formerly Democratic spots in Illinois, Maryland and Massachusetts. They also have taken control in more state legislatures than ever before. Even in Pennsylvania, where a hugely unpopular Republican governor lost, GOP candidates trounced Democrats across the state to expand their majority.
Why should PBA members care what happens in Maryland or Pennsylvania or in the U.S. Senate? First, the people and groups that funded those wins came after public sector labor across the nation and now there is a solid foundation to push for the end to collective bargaining and pensions in more places. New Jersey does not exist in a vacuum. What happens in other states does have an impact here as ideas, legislation and the game plan to implement those travels fast.
Second, the closeness of many of these contested races, some still undecided, proves that every single vote makes a difference and blocks of unified voters can control an election. Legislators of both parties do not forgot the groups that stood with them in close elections. Roughly one-third of voters came to the polls; that leaves a lot of room for a unified voting block to make or break a campaign.
While there was a massive wave of change hitting nationally, absolutely nothing really changed federally in New Jersey as Sen. Booker and every incumbent House member was re-elected. For the PBA that means that 100 percent of your endorsed candidates were re-elected or elected to their first terms. The PBA did make a difference, especially in District 3 where Republican Tom MacArthur took an open seat in Congress by a wide margin in a District many thought would come down to the wire. MacArthur was so appreciative of the PBA that among his first calls to say “thank you” was to the State PBA.
Election Day also saw State Senator Donald Norcross elected to Congress in the 1st District. This is significant in that he will be filling in the remainder of the term starting in mid-November left vacant when Congressman Andrews stepped down and that his leaving will necessitate the appointment of a new chairman of the Senate Law and Public Safety Committee. That Committee is obviously important to the State PBA and we will be engaging the new chairman as soon as the appointment is made by the Senate President.
The key big picture question following the election is whether a Congress controlled again by Republicans can work with a lame duck Democratic president. Will either side be willing to deal or will they just let politics dictate more gridlock? Will conservatives in Congress allow the Republican leadership to work with the President? Will Democrats hopeful of replacing the President in 2016 and winning back Congress allow the President to give Republicans any policy victories?
So PBA members should reflect on these elections not only for their national implications but on what it means here in New Jersey. First, turnout was low in 2014 but it could be even lower in 2015 when only the General Assembly is on the ballot. Voter turnout is historically low when the legislature tops the ticket – it was 27 percent in 2011. That equals opportunity for State PBA members to impact the legislature. A lot more will be written and discussed about how that could happen but there has never been a more important time for PBA members to act as one at the ballot box.
Second, while it is widely assumed Gov. Christie will run for President, no one knows when he may announce or if he will resign to run. If he is running for President does he leave Republicans to run for Assembly seats on their own in 2015 or does he make it his mission to have one last major victory before leaving for the Presidential trail by putting all his eggs in the basket of making the Assembly Republican? Or he could stay put to be a king-maker for the eventual GOP nominee and continue on as he has before.
PBA members therefore must be thinking about 2015 today and watching carefully what is going on in Trenton as the decisions made there now will dictate PBA positions this time next year. The choice to ensure members register to vote, to do a “PBA Day in Trenton,” PAC discussions and greater focus on individual legislator relationships aren’t happening by accident. As we can tell from the last election, campaigns have meaning and who wins really matters. It is therefore best to be the one who decides who wins and who loses before they decide whether you win or lose in the legislature.
By Patrick Colligan
It’s Election Day morning. As exciting as a mid-term election can possibly get, I am more excited that my trip to the mailbox will just be bills again. The robo-calls will finally stop and the most exciting commercial on TV will be about making my whites whiter. I never thought a few short months ago that I’d be happy to see another commercial about triple-action enzymes and stain fighters, but after that onslaught of angry political ads I’m happily paying attention to my laundry again. Next year, we are all going to recycle the political mailings and pay off that pension debt that is all our fault.
Speaking of all our fault, where is the “Pension Commission” report? It was done before it was started, so let’s get it out there already. Our governor had the opportunity to meet with those dong the report before they got to the “hard work” that the Murphy Commission already completed in 2005. All they really had to do was switch out “the State has to pay its obligations” with “It’s the unsustainable, rich pension and Cadillac benefits these bloodsucking public employees get,” slap a swanky new cover on it and give it to the press at 5:30 p.m. on a Friday so nobody else can comment on it. They have already released the Op-Ed pieces so I’m not expecting anything new from the report. Let’s see it already. I want to see how they blame us now. I’m sure the results will truly be groundbreaking.
Our PBA Legislative Day was even more successful than I’d hoped. I know that there is extensive coverage in this issue, so I’ll let the professionals tell you the story. I want to express my extreme gratitude TO those of you that took the time from your busy life and chose to follow us into the halls of Trenton that day. Believe me when I tell you, the message was delivered and I’m STILL getting feedback from Legislators that were there. We all have a lot going on in our lives, I only wish I could have thanked every one of you personally. A special thanks to our friends at PBA Local 105. They really went above and beyond in making the day a lot easier to manage. Their extra efforts are appreciated and I value their friendship (and the great parking spot they keep letting me use!).
And finally this month: The coward. For decades upon decades, the NJ State PBA has endorsed political candidates. It is how the business gets done not only in our union but in organized labor and private interest groups throughout our entire Nation. It’s an endorsement, it’s not an order. We even get to debate it and vote on them at the state meetings. No secrets. Last time I checked, thankfully, we still live in a democracy. You have a horse in a race? Your neighbor or uncle running for Dog Catcher, Council or Congress? Well then, you go right ahead and vote for your horse. Quite frankly, I’m just thankful you are even going to the polls. Our endorsements aren’t picked with darts and a dartboard. They are made with full knowledge of a candidate’s agenda and voting record, always involves knowing or meeting a candidate and it is made (sometimes painfully) for the benefit of the ENTIRE union. We will often stay entirely out of a race if neither of the candidates hold a position we embrace.
So, this is addressed to the coward who didn’t have the common courtesy of picking up the phone and asking an intelligent question or two. You are the coward that hid behind an anonymous letter without a return address. You went through the effort of searching your home for a red magic marker and adding a completely tasteless comment. I’d venture to say you are the same person that complains every single day since you were hired about your PBA, but couldn’t even tell me where the meetings are held. You spend most of your day writing comments on newspaper articles behind an anonymous nickname. I’m going to go way out on a limb and guess you also scribble what I’m sure are great words of wisdom on promotional announcements on your agency’s bulletin board when nobody else is there. I applaud your life of anonymity and lack of conviction; you should be very proud of yourself. Unfortunately for the rest of us, regardless of our union affiliation or agency size, there are many of you. There is at least one of you in every agency. By now, we all should have learned a hard lesson from you. You made Chapter 78, pension reform and police consolidation easy for them. You weakened our voice. Maybe next year you can pick up the phone, call from an unknown number and at least give us some spirited debate. Just don’t forget to disguise your voice, I heard there is an app for that.
For those of you that headed to the voting booth, thank you for your time and effort. PLEASE mark Nov. 3, 2015 in your calendars. We have a HUGE election coming up next year. The NJSPBA is going to be relevant and I guarantee you that we will have a huge impact on that election.
The President’s Message
NJ State PBA President Patrick Colligan comments on an overdue win for PERC.
Executive Vice-President
Executive Vice-President Marc Kovar recognizes PBA members for their show of support at the second PBA Day in Trenton and the annual Mini Convention.
Government Affairs
PBA members who attended PBA Day in Trenton got to witness the State PBA’s relationships, credibility and information on display and what can be accomplished in Trenton when they all come together.