Revises certain laws governing police and fire interest arbitration.

A1998

ASSEMBLY, No. 1998

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman ANNETTE QUIJANO

District 20 (Union)

Assemblyman ANTHONY S. VERRELLI

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� Revises certain laws governing police and fire
interest arbitration.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning police and fire interest arbitration,
amending P.L.1977, c.85, and repealing
various parts
of the statutory law.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 3 of P.L.1977,
c.85 (C.34:13A-16) is amended to read as follows:���

���� 3.��� a. (1) Negotiations
between a public fire or police department and an exclusive representative
concerning the terms and conditions of employment shall begin at least 120 days
prior to the day on which their collective negotiation agreement is to expire.�
The parties shall meet at least three times during that 120-day period.� The
first of those three meetings shall take place no later than the 90th day prior
to the day on which their collective negotiation agreement is to expire.� By
mutual consent, the parties may agree to extend the period during which the
second and third meetings are required to take place beyond the day on which
their collective negotiation agreement is to expire.� A violation of this
paragraph shall constitute an unfair practice and the violator shall be subject
to the penalties prescribed by the commission pursuant to rule and regulation.

���� Prior to the expiration of
their collective negotiation agreement, either party may file an unfair
practice charge with the commission alleging that the other party is refusing
to negotiate in good faith.� The charge shall be filed in the manner, form and
time specified by the commission in rule and regulation.� If the charge is
sustained, the commission shall order that the respondent be assessed for all
legal and administrative costs associated with the filing and resolution of the
charge; if the charge is dismissed, the commission shall order that the
charging party be assessed for all legal and administrative costs associated
with the filing and resolution of the charge.� The filing and resolution of the
unfair practice charge shall not delay or impair the impasse resolution
process.

���� (2)� Whenever those
negotiations concerning the terms and conditions of employment shall reach an
impasse, the commission, through the Division of Public Employment Relations
shall, upon the request of either party, or upon its own motion take such
steps, including the assignment of a mediator, as it may deem expedient to
effect a voluntary resolution of the impasse.

���� b.��� (1) In the event of a
failure to resolve the impasse by mediation, the Division of Public Employment
Relations, at the request of either party, shall invoke factfinding with
recommendation for settlement of all issues in dispute unless the parties reach
a voluntary settlement prior to the issuance of the factfinder's report and
recommended terms of settlement. Factfinding shall be limited to those issues
that are within the required scope of negotiations unless the parties to the
factfinding agree to factfinding on permissive subjects of negotiation.

���� (2)� Notwithstanding the
provisions of paragraph (2) of subsection a. of this section or paragraph (1)
of this subsection, either party may petition the commission for arbitration on
or after the date on which their collective negotiation agreement expires.� The
petition shall be filed in a manner and form prescribed by the commission.� The
party filing the petition shall notify the other party of its action. The
notice shall be given in a manner and form prescribed by the commission.

���� Any mediation or factfinding
invoked pursuant to paragraph (2) of subsection a. of this section or paragraph
(1) of subsection b. of this section shall terminate immediately upon the
filing of a petition for arbitration.

���� (3)� Upon the filing of a
petition for arbitration pursuant to paragraph (2) of this subsection, an
arbitrator selected pursuant to paragraph (1) of subsection e. of this section
shall conduct an initial meeting as a mediation session to effect a voluntary
resolution of the impasse.�
An arbitrator may order additional meetings to
be utilized as mediation sessions to resolve the impasse.

���� c.��� (Deleted by amendment,
P.L.2010, c.105)

���� d.��� The resolution of issues
in dispute shall be binding arbitration under which the award on the unsettled
issues is determined by conventional arbitration.� The arbitrator shall
determine whether the total net annual economic changes for each year of the agreement
are reasonable under the nine statutory criteria set forth in subsection g. of
this section and shall adhere to the limitations set forth in section 2 of
P.L.2010, c.105 (C.34:13A-16.7).� The non-petitioning party, within five days
of receipt of the petition, shall separately notify the commission in writing
of all issues in dispute. The filing of the written response shall not delay,
in any manner, the interest arbitration process.

���� e.��� (1) The commission shall
take measures to assure the
[
impartial
]
selection of
an arbitrator or arbitrators from its special panel of arbitrators.�
Upon receipt of a petition for
arbitration, the commission shall communicate to the parties the option to
mutually select an arbitrator from the special panel of arbitrators. The
parties shall notify the commission in writing of the mutual selection within
three business days.
On the
[
first
]

fourth

business day following receipt of an interest arbitration petition
, if no notice of mutual selection is
received and approved by the commission
, the commission shall,
independent of and without any participation by either of the parties, randomly
select an arbitrator from its special panel of arbitrators.� The selection by
the commission shall be final and shall not be subject to review or appeal.

���� (2)� Applicants for initial
appointment to the commission's special panel of arbitrators shall be chosen
based on their professional qualifications, knowledge, and experience, in
accordance with the criteria and rules adopted by the commission.� Such rules
shall include relevant knowledge of local government operations and budgeting.�
Appointment to the commission's special panel of arbitrators shall be for a
three-year term, with reappointment contingent upon a screening process similar
to that used for determining initial appointments.�
[
Arbitrators currently serving on
the panel shall demonstrate to the commission their professional qualification,
knowledge and experience, in accordance with the criteria and rules adopted by
the commission, within one year of the effective date of this act.� Any
arbitrator who does not satisfactorily demonstrate such to the commission
within the specified time shall be disqualified
]
.

���� (3)� Arbitrators serving on
the commission's special panel shall be guided by and subject to the objectives
and principles set forth in the "Code of Professional Responsibility for
Arbitrators of Labor-Management Disputes" of the National Academy of
Arbitrators, the American Arbitration Association, and the Federal Mediation
and Conciliation Service.

���� (4)� Arbitrators shall be
required to complete annual training offered by the State Ethics Commission.�
Any arbitrator failing to satisfactorily complete the annual training shall be
immediately removed from the special panel.

���� The commission may suspend,
remove, or otherwise discipline an arbitrator for a violation of P.L.1977, c.85
(C.34:13A-14 et seq.), section 4 of P.L.1995, c.425 (C.34:13A-16.1) or for good
cause.� An arbitrator who fails to render an award within the time requirements
set forth in this section shall be fined $ 1,000 for each day that the award is
late.����

���� f.���� (1) (
a) The parties
have a duty to exchange information including the written report of any expert who
a party intends to call as a witness at the arbitration proceedings. The
arbitrator shall have the authority to set deadlines for the exchange of
information. If a party fails to timely exchange information or the report of
an expert, the arbitrator shall have discretion as to the evidence that shall
be included in the record.

����
(b)� Prior to the
commencement of the arbitration proceedings, the public employer shall provide
the arbitrator and the employee representative with:

����
(i)�� a list of all unit
members during the final year of the expired agreement, their salary guide
steps during the final year of the expired agreement, and their anniversary
date of hire, which shall mean the date or dates on which unit members advance
on the guide;

����
(ii)� costs of increments
and the specific dates on which they are paid;

����
(iii) costs of any other
base salary items and the specific dates on which they are paid;

����
(iv) the total cost of all
base salary items for the 12 months immediately preceding the first year of the
new agreement; and

����
(v)� a list of all unit
members as of the last day of the year immediately preceding the new agreement,
their step, and their rate of salary as of that same day.
The employee
representative shall respond to the information provided by the public
employer.

����
(c)
�� At a time
prescribed by the commission, the parties shall submit to the arbitrator their
final offers on each economic and non-economic issue in dispute.� The offers
submitted pursuant to this section shall be used by the arbitrator for the
purposes of determining an award pursuant to subsection d. of this section.

���� (2)� In the event of a
dispute, the commission shall have the power to decide which issues are
economic issues.� Economic issues include those items which have a direct
relation to employee income including wages, salaries, hours in relation to
earnings, and other forms of compensation such as paid vacation, paid holidays,
health and medical insurance, and other economic benefits to employees.

���� (3)� Throughout formal
arbitration proceedings the chosen arbitrator may mediate or assist the parties
in reaching a mutually agreeable settlement.

���� All parties to arbitration
shall present, at the formal hearing before the issuance of the award, written
estimates of the financial impact of their
[
last
]

final

offer on the taxpayers of the local unit to the arbitrator with the submission
of their
[
last
]

final

offer.

���� (4)� Arbitration shall be
limited to those subjects that are within the required scope of collective
negotiations, except that the parties may agree to submit to arbitration one or
more permissive subjects of negotiation.

���� (5)� The decision of an
arbitrator or panel of arbitrators shall include an opinion and an award, and
shall be rendered within
[
90
]

150

calendar days of the commission's assignment of that arbitrator.�
Upon
request of the arbitrator, the commission chair or designee shall have
discretion to extend the time to issue the opinion and award, if the commission
chair or designee determines it is warranted under the circumstances.
Extensions, if granted, shall be limited to 30 days cumulatively, such that the
time frame for issuance of the opinion and award shall not exceed 180 days.

���� Each arbitrator's decision
shall be accompanied by a written report explaining how each of the statutory
criteria played into the arbitrator's determination of the final award.� The
report shall certify that the arbitrator took the statutory limitations imposed
on the local levy cap into account in making the award. Any arbitrator
violating the provisions of this paragraph may be subject to the commission's
powers under paragraph (3) of subsection e. of this section. The decision shall
be final and binding upon the parties and shall be irreversible, except:

���� (a)�� Within
[
14
]

21

calendar days of receiving an award, an aggrieved party may file notice of an
appeal of an award to the commission on the grounds that the arbitrator failed
to apply the criteria specified in subsection g. of this section or violated
the standards set forth in N.J.S.2A:24-8 or N.J.S.2A:24-9.� The appeal shall be
filed in a form and manner prescribed by the commission.� In deciding an
appeal, the commission, pursuant to rule and regulation and upon petition, may
afford the parties the opportunity to present oral arguments.� The commission
may affirm, modify, correct or vacate the award or may, at its discretion,
remand the award to the same arbitrator or to another arbitrator, selected by
lot, for reconsideration.� The commission's decision shall be rendered no later
than
[
60
]

90

calendar days after the filing of the appeal with the commission
or the next commission meeting
immediately following the 90th

day
.

���� Arbitration appeal decisions
shall be accompanied by a written report explaining how each of the statutory
criteria played into their determination of the final award.� The report shall
certify that in deciding the appeal, the commission took the local levy cap
into account in making the award.

���� An aggrieved party may appeal
a decision of the commission to the Appellate Division of the Superior Court.

���� (b)� An arbitrator's award
shall be implemented immediately.
The parties shall meet no later than 10
days after the issuance of the award to complete the implementation of the
award and resolve any issues to avoid the filing of appeals. The meeting shall
not stay the time to file an appeal.

���� (6) The parties shall share
equally the costs of arbitration subject to a fee schedule approved by the
commission.� The fee schedule shall provide that the cost of services provided
by the arbitrator shall not exceed
[
$1,000
]

$1,500

�per day.�
The total cost of services of an arbitrator shall not exceed
[
$10,000
]

$15,000
.
If the parties cancel an arbitration proceeding without good cause, the
arbitrator may impose a fee of not more than $500. The parties shall share
equally in paying that fee if the request to cancel or adjourn is a joint
request.� Otherwise, the party causing such cancellation shall be responsible
for payment of the entire fee.

���� g.��� The arbitrator shall
decide the dispute based on a reasonable determination of the issues, giving
due weight to those factors listed below that are judged relevant for the
resolution of the specific dispute.� In the award, the arbitrator or panel of
arbitrators shall indicate which of the factors are deemed relevant,
satisfactorily explain why the others are not relevant, and provide an analysis
of the evidence on each relevant factor; provided, however, that in every
interest arbitration proceeding, the parties shall introduce evidence regarding
the factor set forth in paragraph (6) of this subsection and the arbitrator
shall analyze and consider the factor set forth in paragraph (6) of this
subsection in any award:

���� (1)� The interests and welfare
of the public.� Among the items the arbitrator or panel of arbitrators shall
assess when considering this factor are the limitations imposed upon the
employer by P.L.1976, c.68 (C.40A:4-45.1 et seq.).

���� (2)� Comparison of the wages,
salaries, hours, and conditions of employment of the employees involved in the
arbitration proceedings with the wages, hours, and conditions of employment of
other employees performing the same or similar services and with other employees
generally:

���� (a) In private employment in
general; provided, however, each party shall have the right to submit
additional evidence for the arbitrator's consideration.

���� (b) In public employment in
general; provided, however, each party shall have the right to submit
additional evidence for the arbitrator's consideration.

���� (c) In public employment in
the same or similar comparable jurisdictions, as determined in accordance with
section 5 of P.L.1995, c.425 (C.34:13A-16.2); provided, however, that each
party shall have the right to submit additional evidence concerning the comparability
of jurisdictions for the arbitrator's consideration.

���� (3) The overall compensation
presently received by the employees, inclusive of direct wages, salary,
vacations, holidays, excused leaves, insurance and pensions, medical and
hospitalization benefits, and all other economic benefits received.

���� (4) Stipulations of the
parties.

���� (5) The lawful authority of
the employer. Among the items the arbitrator or panel of arbitrators shall
assess when considering this factor are the limitations imposed upon the
employer by P.L.1976, c.68 (C.40A:4-45.1 et seq.).

���� (6) The financial impact on
the governing unit, its residents, the limitations imposed upon the local
unit's property tax levy pursuant to section 10 of P.L.2007, c.62
(C.40A:4-45.45), and taxpayers.� When considering this factor in a dispute in
which the public employer is a county or a municipality, the arbitrator or
panel of arbitrators shall take into account, to the extent that evidence is
introduced, how the award will affect the municipal or county purposes element,
as the case may be, of the local property tax; a comparison of the percentage
of the municipal purposes element or, in the case of a county, the county
purposes element, required to fund the employees' contract in the preceding
local budget year with that required under the award for the current local
budget year; the impact of the award for each income sector of the property
taxpayers of the local unit; the impact of the award on the ability of the
governing body to (a) maintain existing local programs and services, (b) expand
existing local programs and services for which public moneys have been
designated by the governing body in a proposed local budget, or (c) initiate
any new programs and services for which public moneys have been designated by
the governing body in a proposed local budget.

���� (7) The cost of living.

���� (8) The continuity and
stability of employment including seniority rights and such other factors not
confined to the foregoing which are ordinarily or traditionally considered in
the determination of wages, hours, and conditions of employment through collective
negotiations and collective bargaining between the parties in the public
service and in private employment.

���� (9) Statutory restrictions
imposed on the employer.� Among the items the arbitrator or panel of
arbitrators shall assess when considering this factor are the limitations
imposed upon the employer by section 10 of P.L.2007, c.62 (C.40A:4-45.45).

���� h.��� A mediator, factfinder,
or arbitrator while functioning in a mediatory capacity shall not be required
to disclose any files, records, reports, documents, or other papers classified
as confidential received or prepared by him or to testify with regard to mediation,
conducted by him under this act on behalf of any party to any cause pending in
any type of proceeding under this act.� Nothing contained herein shall exempt
such an individual from disclosing information relating to the commission of a
crime.

���� i.���� The Director of the
Division of Local Government Services in the Department of Community Affairs
may notify the commission, through the Division of Public Employment Relations,
that a municipality deemed a "municipality in need of stabilization and recovery"
pursuant to section 4 of P.L.2016, c.4 (C.52:27BBBB-4) will not participate in
any impasse procedures authorized by this section.� Upon such notice, any
pending impasse procedures authorized by this section shall immediately cease,
and any pending petition for arbitration shall be vacated.� Nothing in this
subsection shall be construed to limit the scope of any general or specific
powers of the Local Finance Board or the director set forth in P.L.2016, c.4
(C.52:27BBBB-1 et al.).

���� The provisions of this
subsection shall no longer be applicable on and after the first day of the
sixth year next following the determination by the Commissioner of Community
Affairs that the municipality shall be deemed "a municipality in need of stabilization
and recovery" pursuant to section 4 of P.L.2016, c.4 (C.52:27BBBB-4);
however, actions taken pursuant to this subsection prior to the effective date
of P.L.2021, c.124 (C.52:27BBBB-4 et al.) shall be final and shall not be
subject to reconsideration.

���� j.���� The Local Finance Board
may provide that any arbitration award, including but not limited to an
interest arbitration award, involving a municipality deemed a
"municipality in need of stabilization and recovery" pursuant to
section 4 of P.L.2016, c.4 (C.52:27BBBB-4) shall be subject to the review and
approval of the Director of the Division of Local Government Services in the
Department of Community Affairs, including those on a collective negotiations
agreement where the matter has been submitted to an arbitrator pursuant to law,
and no such award shall be binding without the approval of the director.�
Nothing in this subsection shall be construed to limit the scope of any general
or specific powers of the Local Finance Board or the director set forth in P.L.2016,
c.4 (C.52:27BBBB-4).

���� The provisions of this
subsection shall no longer be applicable on and after the first day of the
sixth year next following the determination by the Commissioner of Community
Affairs that the municipality shall be deemed "a municipality in need of stabilization
and recovery" pursuant to section 4 of P.L.2016, c.4 (C.52:27BBBB-4);
however, actions taken pursuant to this subsection prior to the effective date
of P.L.2021, c.124 (C.52:27BBBB-4 et al.) shall be final and shall not be
subject to reconsideration.

(cf: P.L.2021, c.124, s.5)�

���� 2.��� The following sections
are repealed:�

Section 2 of P.L.2010, c.105
(C.34:13A-16.7);

Section 3 of P.L.2010, c.105 (C.34:13A-16.8);
and�

Section 4 of P.L.2010, c.105 (C.
34:13A-16.9).���

���� 3.��� This act shall take effect immediately and apply
to petitions filed on or after the effective date of
P.L.��� , c.����
(C.
����� ) (pending before the
Legislature as this bill).�

STATEMENT

����
This bill makes several changes to the current law governing

arbitration awards in disputes between public
employers and their

police and fire
departments.

���� Under
current law, any time after a collective negotiation agreement between a public
employer and a public police or fire department expires, either party may
petition the New Jersey Public Employment Relations Commission (PERC) for
arbitration.�
Current law outlines the ways in which public employers
are to negotiate these contractual disputes
when the parties have reached impasse and are unable to
resolve their dispute.
�

���� This bill provides that both
parties have a duty to exchange information including the written reports of
any experts intended to be called as a witness by a party at the arbitration
proceedings. The arbitrator would be required to have the authority to set
deadlines for the exchange of information. If a party fails to timely exchange
information or the report of an expert, the bill allows the arbitrator to have
discretion as to the evidence that is to be included in the record.

���� The bill also establishes
certain requirements for the public employer.� Under the bill, the public
employer is required to provide prior to the commencement of the arbitration
proceeding, the arbitrator and the employee representative with the following:

�

a list of all unit members during the final year of the expired
agreement, their salary guide steps during the final year of the expired
agreement, and their anniversary date of hire, meaning the date or dates on
which unit members advance on the guide;

�

costs of increments and the specific dates on which they are
paid;

�

costs of any other base salary items and the specific dates on
which they are paid;

�

the total cost of all base salary items for the 12 months
immediately preceding the first year of the new agreement; and

�

a list of all unit members as of the last day of the year
immediately preceding the new agreement, their step, and their rate of salary
as of that same day. The employee representative would be required to respond
to the information provided by the public employer.

���� Under current law, arbitrators
selected to make determinations pertaining to these contractual disputes are
employees of PERC.� The commission is required to take measures to assure the
impartial, random selection of an arbitrator from its panel of arbitrators.�
This bill provides that upon receipt of a petition for arbitration the
commission is required to communicate to the parties the option to mutually
select an arbitrator from the panel.� Under the bill, the parties would have
three business days to notify the commission of the mutual selection.� If there
is no mutual selection on the fourth business day, the bill requires the
commission to randomly select an arbitrator without participation of either
party. The bill also removes the requirement that arbitrators serving on the
panel are required to demonstrate to the commission their professional
qualification, knowledge and experience, in accordance with the criteria and
rules adopted by the commission.�

���� The bill also extends the time
frame during which an arbitrator is required to render an opinion to 150 days
of the commission�s assignment.� Current law requires an arbitrator or panel of
arbitrators to render an opinion with 90 days of the commission�s assignment.�
Under the bill, an arbitrator may request an extension and the commission chair
or a designee may grant the extension if warranted.� The bill limits the
extension time to 30 days cumulatively but in no case more than 180 days.� The
bill also extends from 14 days to 21 days the amount of time that an aggrieved
party may file an appeal under certain circumstances.� Under the bill, the
parties would be required to meet within 10 days after the issuance of an award
to complete the award�s implementation and resolve any issued to avoid filing
of an appeal.

���� The bill also increases the
fees associated with the cost of arbitration that are equally shared by the
parties.� Specifically the bill increases the cost of services provided by the
arbitrator from $1,000 to $1,500 per day.� The total cost of services of an
arbitrator would be increased from $10,000 to $15,000.�

���� Finally, the bill repeals
sections from current law that place a limitation on the amount that may be
awarded during an arbitration proceeding and establish an Police and Fire
Interest Arbitration Impact Task Force.� �
�