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December 15, 2010

RE: A-3393 - (Arbitration Reform Amendments) Bill goes to Governor

Dear Mayor:

Prior to passage in both Houses on Monday, A-3393 – the arbitration reform bill – was amended by the General Assembly. For a summary of the bill, prior to the amendments, see our letter of December 10 at The bill is now poised for final action by the Governor, who is expected to sign it shortly.

The Monday amendments make the following changes.

  1. Provide that the reforms will become effective on January 1, 2011;
  2. Specify that the term “base salary” (which would be subject to the 2% cap) refers to compensation “provided pursuant to a salary guide or table and any amount provided pursuant to a salary increment, including any amount provided for longevity or length of service”;
  3.  Clarify that the 2% cap on arbitration awards will apply to contracts that expire between January 1, 2011 and April 1, 2014 (with one exception, noted below);
  4. All other changes enacted by the bill (such as random selection of arbitrator, expedited determination of award, consideration of the 2% levy cap, the need for an arbitrator to provide a written report detailing the weight accorded to each of the statutory requirements and appeals process) become effective on January 1, 2011, and their application is not limited only to arbitration proceedings concerning contracts that expire on or after that date ; and
  5. Impose mandatory annual ethics training requirements on arbitrators.

The one exception mentioned in point 3, above, would exempt from the 2% awards cap, any future contracts with a bargaining unit, if the current contract would meet the awards cap requirements.

You can access the latest copy of the bill at

We anticipate clarifications on these, and other, sections of the law to be issued by the State, soon following the Governor’s signing.  In the meantime, please note that, absent further action by the Legislature, any contracts that expire on or after April 1, 2014, will be subject to all new procedures and requirements, EXCEPT the 2% awards cap.

Pending Governor Christie’s final action on this reform, we are planning a series of informational sessions and seminars, analyzing the changes listed in the bill. We will notify you of those opportunities once all the details are in place. And we will contact you regarding all further developments on this matter.

Please share this information with your labor relations counsel and members of your contract negotiations team.

For further information, contact Lori Buckelew at 609-695-3481, ext. 112 or or Jon Moran at 609-695-3481, ext. 121 or

Very truly yours,

William G. Dressel, Jr.
Executive Director




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