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February 27, 2013

Re: Appellate Court decision in Keyport v. IUOE Local 68, Belmar v. CWA
       AFL-CIO, Mount Laurel v. CWA and AFSCME Council 71

Dear Mayor:

Today, the Appellate Division released its decision in an important case that concerns local government employment and labor issues.

On May 20, 2009, Keyport submitted a temporary layoff plan with the CSC.  The layoff plan converted three full time clerical positions to part time.  The three now part time employees also lost their health insurance.  Local 68 filed an unfair labor practice charge with PERC.  PERC found in favor of the union, stating that work hours are mandatorily negotiable, and ordered Keyport to commence negotiations with Local 68 over the work week reductions and health insurance.

On August 3, 2009, Belmar submitted a temporary layoff plan to the Civil Service Commission (CSC) for approval.  The plan required all employees of the Department of Public Works (DPW) to take ten involuntary furlough days between October 6 and December 15, 2009.  The CSC approved the plan.  The CWA, which represents the DPW, filed an unfair labor practice charge with the Public Employment Relations Commission (PERC).  PERC found for the union, stating that the matters in dispute were negotiable, and deferred the outcome to binding arbitration.

On August 26, 2009, Mount Laurel submitted a temporary layoff plan to the CSC.  The plan would require all employees except police and emergency medical personnel to take eight involuntary furlough days between November 2009 and June 2010.  The CSC approved the plan.  AFSCME filed a motion for summary judgment with PERC alleging that the reduction in work week hours was mandatorily negotiable.  PERC once again found in favor in the union, and deferred the outcome to binding arbitration.

All three towns appealed PERC’s decisions.  Keyport was represented by Gordon Litwin, Esq., Belmar by Jonathan Cohen, Esq., and Mt. Laurel by Kelly Adler, Esq.  The League participated as amicus curiae and was represented by Staff Attorney Matthew Weng, Esq.  The towns and the League focused on the fact that the CSC passed an emergency rule that permitted public employers to institute temporary and/or demotional layoffs for reasons of economy and efficiency.  Although this rule has since been repealed, it was in force when all three towns implemented their layoff plans.

In analyzing the case, the Court looked to a three pronged test to determine whether an issue is mandatorily negotiable: (1) the item intimately and directly affects the work and welfare of public employees; (2) the subject has not been fully or partially preempted by statute or regulation; and (3) a negotiated agreement would not significantly interfere with the determination of governmental policy. 

Although the Court found that the unions satisfied the first prong, they failed to satisfy both the second and third prongs.  The emergency rule clearly preempted the subject of negotiation, and the ability to lay off employees, even temporarily or through demotion, is a non-negotiable policy determination.  The decisions of PERC were overturned and the furloughs and demotions allowed to proceed.  The Court agreed with PERC, however, on the issue of health benefits in Keyport and required that issue proceed to arbitration.

You can find a copy of the Appellate Court’s decision

We urge you to discuss the outcome with your municipal attorney and labor counsel.  If you have any questions or require further information, please contact Staff Attorney Matthew Weng at 609-695-3481 ext 137 or at

Very truly yours,

William G. Dressel, Jr.
Executive Director




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