In the Matter of County of Atlantic and Pba Local 243 And ( 2016 )


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  •                   NOT FOR PUBLICATION WITHOUT THE
                     APPROVAL OF THE APPELLATE DIVISION
    
                                        SUPERIOR COURT OF NEW JERSEY
                                        APPELLATE DIVISION
                                        DOCKET NO. A-2477-13T4
                                                    A-0107-14T1
    
    IN THE MATTER OF
    COUNTY OF ATLANTIC,
    
          Respondent-Respondent,            APPROVED FOR PUBLICATION
    
    and                                          March 9, 2016
    
                                              APPELLATE DIVISION
    PBA LOCAL 243,
    
          Charging Party,
    
    and
    
    FOP LODGE 34 and PBA LOCAL 77,
    
         Charging Parties-Appellants.
    _____________________________________
    
    IN THE MATTER OF
    TOWNSHIP OF BRIDGEWATER,
    
          Petitioner-Respondent,
    
    and
    
    PBA LOCAL 174,
    
         Respondent-Appellant.
    ______________________________________
    
              Argued October 28, 2015 – Decided March 9, 2016
    
              Before Judges Alvarez, Haas, and Manahan.
    
              On appeal from the State of New Jersey
              Public   Employment   Relations   Commission,
              P.E.R.C. Nos. 2014-40 and 2015-11.
    Ira W. Mintz and Steven R. Cohen argued the
    cause for appellants FOP Lodge 34, and PBA
    Local 77 in A-2477-13, and amici curiae
    Lodge 34, PBA Local 77, and Communications
    Workers of America AFL-CIO in A-0107-14
    (Weissman & Mintz, LLC, and Selikoff &
    Cohen, P.A., attorneys; Mr. Mintz and Mr.
    Cohen, on the briefs).
    
    James M. Mets and David M. Bander argued the
    cause for appellant PBA Local 174 in A-0107-
    14    and    amicus    curiae     Professional
    Firefighters Association of New Jersey in A-
    2477-13   (Mets  Schiro   &   McGovern,   LLP,
    attorneys; Mr. Mets, of counsel and on the
    briefs; Mr. Bander and Brian J. Manetta, on
    the briefs).
    
    James F. Ferguson, Atlantic County Counsel,
    argued the cause for respondent County of
    Atlantic in A-2477-13.
    
    Don Horowitz, Acting General Counsel, argued
    the cause for respondent New Jersey Public
    Employment    Relations    Commission    (Mr.
    Horowitz,   attorney;   Martin  R.   Pachman,
    formerly General Counsel, and Mr. Horowitz,
    on the briefs).
    
    Eric M. Bernstein argued the cause for
    Township of Bridgewater respondent in A-
    0107-14 and amicus curiae in A-2477-13 (Eric
    M. Bernstein & Associates, LLC, attorneys;
    Mr. Bernstein, of counsel and on the brief;
    Philip G. George, on the brief).
    
    John J. Hoffman, Acting Attorney General,
    attorney for amicus curiae Governor's Office
    of Employee Relations in A-2477-13 (Michelle
    Lyn Miller, Assistant Attorney General, of
    counsel; Todd A. Wigder, Deputy Attorney
    General, on the brief).
    
    Oxfeld Cohen, P.C., attorneys for amicus
    curiae     International   Federation    of
    Professional and Technical Engineers, Local
    
    
    
                          2                          A-2477-13T4
             195 in A-2477-13 (Arnold S. Cohen, of
             counsel and on the brief; Samuel Wenocur, on
             the brief).
    
             Bucceri & Pincus, attorneys for amicus
             curiae New Jersey Education Association in
             A-2477-13 (Louis P. Bucceri, of counsel and
             on the brief; Albert J. Leonardo, on the
             brief).
    
             Cynthia J. Jahn, General Counsel, attorney
             for amicus curiae New Jersey School Boards
             Association in A-2477-13 (Patrick Duncan, on
             the brief).
    
             Law   Offices  of   Craig  S.   Gumpel  LLC,
             attorneys for amicus curiae New Jersey State
             Firefighters Mutual Benevolent Association
             (Craig S. Gumpel, of counsel and on the
             brief).
    
             Genova Burns LLC, attorneys for amici curiae
             New Jersey State League of Municipalities,
             New Jersey Association of Counties, and New
             Jersey Council of County Colleges (Joseph M.
             Hannon, of counsel and on the brief; Allison
             B. Gotfried, on the brief).
    
             Markowitz and Richman, attorneys for amicus
             curiae New Jersey State Lodge of the
             Fraternal   Order  of  Police  (Matthew  D.
             Areman, on the brief).
    
             Zazzali,   Fagella,   Nowak,    Kleinbaum &
             Friedman, attorneys for amicus curiae New
             Jersey State PBA in A-2477-13 (Paul L.
             Kleinbaum, of counsel and on the brief;
             Marissa A. McAleer, on the brief).
    
        The opinion of the court was delivered by
    
    ALVAREZ, P.J.A.D.
    
    
    
    
                                  3                         A-2477-13T4
           Oral argument was conducted on these two matters back-to-
    
    back, and they are consolidated for purposes of this opinion.
    
    We reverse both Public Employment Relations Commission (PERC)
    
    final agency decisions because PERC's abandonment of the dynamic
    
    status    quo      doctrine       was    action        outside     the    scope     of     its
    
    legislative        mandate,      which    is     the    implementation        of    the    New
    
    Jersey Employer-Employee Relations Act (Act), N.J.S.A. 34:13A-1
    
    to -39.
    
           PERC   is    charged       with    safeguarding       the     rights    of    public
    
    employees.         Galloway Twp. Bd. of Educ. v. Galloway Twp. Ass'n
    
    (NJ Galloway), 
    78 N.J. 25
    , 36 (1978).                         It "bear[s] the dual
    
    responsibilities           of    adjudicating           violations       of   the    unfair
    
    practice provisions and the Act and taking all steps necessary
    
    to enforce that which the Legislature has declared to be the
    
    public    policy      of        this     State     in     public     employment          labor
    
    relations."        Ibid.
    
           In the first appeal, the Atlantic County matters, FOP Lodge
    
    34 and PBA Local 771 filed separate unfair practice charges with
    
    PERC.2    The unions alleged that Atlantic County violated the Act
    
    by,      after       the        expiration         of      collective         negotiation
    
    
    1
      The organizations are the designated collective                              bargaining
    units for officers below the rank of sergeant.
    2
        A third union, PBA Local 243, is not involved in the appeal.
    
    
    
                                                   4                                    A-2477-13T4
    agreements3 (CNAs), failing to pay salary/step increments to unit
    
    members      while   negotiations   were   ongoing    and      the    employment
    
    contract disputes were in interest arbitration.                PERC dismissed
    
    the charges, disavowing the dynamic status quo doctrine, which
    
    would have required payment of the salary increments.                  Had PERC
    
    adhered      to   the   longstanding   doctrine,     it   would       have   held
    
    Atlantic County's decision not to pay salary/step increments an
    
    unfair labor practice.       See N.J.S.A. 34:13A-5.4.
    
           In the second appeal, the Bridgewater Township case, PERC
    
    restrained binding arbitration of Local 174's grievance, relying
    
    on its decision in the Atlantic County cases.4            The grievance was
    
    filed   to    challenge    the   Township's   failure     to    pay    automatic
    
    salary increments to unit members after the expiration of their
    
    CNA.    PERC held that, since it had abandoned the dynamic status
    
    quo doctrine, the issue of automatic salary increments after the
    
    expiration of a negotiated agreement was no longer mandatorily
    
    negotiable nor legally arbitrable.            Had PERC adhered to the
    
    
    
    
    3
      New Jersey typically employs the terms "collective negotiation"
    and   "collective   negotiation   agreements,"  not   "collective
    bargaining" or "collective bargaining agreements."       Twp. of
    Franklin v. Franklin Twp. PBA Local 154, 
    424 N.J. Super. 369
    ,
    373 n.1 (App. Div. 2012).
    4
      Local 174 is a collective bargaining unit for officers below
    the rank of sergeant.
    
    
    
                                           5                                A-2477-13T4
    doctrine, since salary is a mandatory subject of negotiation, it
    
    would have held Local 174's grievance to be arbitrable.
    
                                                   I.
    
           PERC    has      had    exclusive       jurisdiction            over       unfair      labor
    
    practice      charges      since      1974.          See    L.    1974,      c.    123    (1974),
    
    codified at N.J.S.A. 34:13A-5.4; See In re Galloway Twp. Bd. of
    
    Educ. (PERC Galloway), P.E.R.C. No. 76-32, 2 N.J.P.E.R. ¶ 122B,
    
    1976 N.J. PERC LEXIS 23 (1976), rev'd, 
    149 N.J. Super. 352
     (App.
    
    Div.   1977),       rev'd,       NJ   Galloway,            supra,      
    78 N.J. 25
    .         The
    
    following year, PERC adopted the dynamic status quo doctrine.
    
    See    In   re    Piscataway          Twp.     Bd.    of     Educ.,         PERC    No.       91,    1
    
    N.J.P.E.R. 49, 50 (1975).
    
           In Piscataway, PERC found that the employer had engaged in
    
    an    unfair      labor       practice    by    unilaterally            dropping         employee
    
    hospitalization and medical coverage, a condition of employment,
    
    after the expiration of a CNA while negotiations were ongoing.
    
    PERC stated:            "It is the generally accepted view in both the
    
    public      and    private       sectors       that         an    employer         is    normally
    
    precluded        from     altering       the     status          quo    while       engaged         in
    
    collective negotiations . . . ."                      Ibid.         PERC defined the term
    
    "status quo" to include scheduled pay increments.                                       Moreover,
    
    such dynamic status quo was within the scope of mandatory fair
    
    labor practices even where no CNA was in effect.
    
    
    
    
                                                    6                                         A-2477-13T4
           Two years later, in 1976, PERC again held that refusal to
    
    pay salary increments in accordance with an expired agreement,
    
    pending the negotiation of a successor agreement, was an unfair
    
    labor   practice     in    violation      of   N.J.S.A.    34:13A-5.4(a)(1)        and
    
    (5).     PERC   Galloway,        supra,   2    N.J.P.E.R.      at    8-9.    In   PERC
    
    Galloway, PERC observed that a level playing field for labor
    
    negotiations     between     a    government        employer    and    the   employee
    
    bargaining unit requires that "the status quo is predictable and
    
    constitutes the terms and conditions under which the parties
    
    have been operating[.]"            PERC Galloway, supra, 2 N.J.P.E.R. at
    
    7.
    
           Our Supreme Court affirmed the PERC Galloway decision in
    
    part    based   on   the    application        of   N.J.S.A.        18A:29-14.     The
    
    statute bound school boards to salary schedules "for a period of
    
    two years from the effective date of such policy[,]" and in that
    
    case the second year fell in the school term in which the Board
    
    was refusing to pay salary increments.                    Because the Board did
    
    not pay salary increments for the second year, it violated the
    
    "statutory compulsion."           Id. at 52.        NJ Galloway, supra, 78 N.J.
    
    at 51-52.       The Court, by way of dictum, also endorsed PERC's
    
    reliance on the doctrine of dynamic status quo in its decision.
    
    Id. at 50-51.
    
    
    
    
                                               7                                 A-2477-13T4
        In its discussion, the Court cited NLRB v. Katz, 
    369 U.S. 736
    , 743-47, 
    82 S. Ct. 1107
    , 
    8 L. Ed. 2d 230
     (1962), for the
    
    proposition     that   unilateral        change     in    the    status     quo
    
    "frustrate[s] the 'statutory objective of establishing working
    
    conditions through bargaining.'"         Id. at 48 (citing Katz, supra,
    
    369 U.S. at 744, 84 S. Ct. at 1112, 8 L. Ed. 2d at 236).                    The
    
    Court   drew   a   parallel   between     that     principle    and   N.J.S.A.
    
    34:13A-5.3.     The statute stated then as it does now, that "new
    
    rules   or   modifications    of   existing       rules   governing   working
    
    conditions" should only be implemented when they are the product
    
    of negotiations:
    
                 Our Legislature has also recognized that the
                 unilateral imposition of working conditions
                 is the antithesis of its goal that the terms
                 and conditions of public employment be
                 established through bilateral negotiation
                 and, to the extent possible, agreement
                 between the public employer and the majority
                 representative of its employees.     It has
                 incorporated a rule similar to that of Katz
                 in . . . N.J.S.A. 34:13A-5.3.
    
                 [NJ Galloway, supra, 78 N.J. at 48.]
    
    Since compensation is an important condition of employment,
    
                 the unilateral denial of that increment
                 would constitute a modification thereof
                 without the negotiation mandated by N.J.S.A.
                 34:13A-5.3 and would thus violate N.J.S.A.
                 34:13A-5.4(a)(5).  Such conduct by a public
                 employer would also have the effect of
                 coercing its employees in their exercise of
                 the organizational rights guaranteed them by
                 the Act because of its inherent repudiation
    
    
    
                                         8                                A-2477-13T4
                 of and chilling effect on the exercise of
                 their statutory right to have such issues
                 negotiated on their behalf by their majority
                 representative.
    
                 [Id. at 49.]
    
           Eighteen years later, in Board of Education Township of
    
    Neptune v. Neptune Township Educational Association, 
    144 N.J. 16
    
    (1996), the Court acknowledged PERC's longstanding adherence to
    
    the    dynamic     status   quo     doctrine,          and    the    adherence      to   the
    
    doctrine in "most jurisdictions[.]"                   Id. at 22-23.
    
           The Court observed, however, that "there is less unanimity
    
    in    applying     that   rule     to    the       public    sector."      Ibid.         When
    
    Galloway     was    written,       N.J.S.A.         18A:29-4.1       authorized     school
    
    boards to adopt salary schedules for full-time teaching staff
    
    for a maximum of two years.                At the time Neptune was written,
    
    the statute had been amended to allow increments in "one, two or
    
    three year" steps.          Supra, 144 N.J. at 30.                  The Court found the
    
    statute effectively preempted labor law.                      Id. at 29.
    
           In   Neptune,      the    Court    clarified          that    salary   increments
    
    could not be paid to teachers after the expiration of the salary
    
    schedule     negotiated         between    the       school    board    and   the     union
    
    because it was prohibited by statute, id. at 30-31, and because
    
    no recoupment could be obtained from a tenured public employee,
    
    id. at 33-34.       The latter point was important because recoupment
    
    could be obtained from other non-tenured public employees, thus
    
    
    
                                                   9                                   A-2477-13T4
    limiting the potential impact of payments of increments during
    
    periods in which a CNA was not in effect on a governmental
    
    entity's     budget.         Should        the    parties         ultimately     negotiate       a
    
    different schedule of payments that resulted in an overpayment
    
    during the time the CNA was expired but increments paid, the
    
    overpayments could be "recouped."
    
           In the context of the newly decided Abbott v. Burke, 
    136 N.J. 444
        (1994),     which       mandated             the   equalization      of    school
    
    funding      across    the    state,        the       Neptune      Court     concluded      that
    
    N.J.S.A. 18A:29-4.1 was enacted "to allow schools to properly
    
    manage     their      budgets        in    conformance            with     the   New     Jersey
    
    Constitution and current economic realities."                               Supra, 144 N.J.
    
    at 28-29.       The Court disavowed a reading of NJ Galloway that
    
    relied on the dynamic status quo doctrine.                           Id. at 31-32.
    
           Despite the disavowal, the Court also specified that the
    
    salary schedule limit found in N.J.S.A. 18A:29-4.1 did not apply
    
    to non-teaching staff members.                    Neptune, supra, 144 N.J. at 34.
    
    In   other    words,     despite          the    weighty         school    funding     concerns
    
    addressed      in     Abbott,    and       the        potential      negative     effect       of
    
    automatic      increases        on    a     school         budget,    the    Neptune       Court
    
    allowed      non-teaching       employees             to    benefit       from   the    dynamic
    
    status quo doctrine and collect increments in salaries at the
    
    expiration of their CNAs.                 See ibid.
    
    
    
    
                                                     10                                     A-2477-13T4
          PERC      thereafter    decided    that   because   of    the    potential
    
    negotiating difficulties resulting from mixed bargaining units,
    
    in which members would be subject to different rules depending
    
    on whether they were teachers or non-teachers, Neptune's holding
    
    would     be    extended     to   non-teaching    members      included      in    a
    
    bargaining unit with teachers.           In re East Hanover Bd. of Educ.,
    
    PERC No. 99-71, 25 N.J.P.E.R. ¶ 30052 1999 N.J. PERC LEXIS 12
    
    (1999), aff'd, No. A-4226-98 (App. Div. Apr. 10, 2000), certif.
    
    denied, 
    165 N.J. 489
     (2000).
    
          Appellate review of agency decisions is deferential.                   In re
    
    Hunterdon Cnty. Bd. of Chosen Freeholders, 
    116 N.J. 322
    , 328
    
    (1989).        Our inquiries are limited to:        (1) whether the agency
    
    followed the law; (2) whether the agency's decision is supported
    
    by   substantial     evidence     in    the   record;   and    (3)    whether     in
    
    applying the law to the facts, the agency reached a supportable
    
    conclusion.       City of Jersey City v. Jersey City Police Officers
    
    Benev. Ass'n, 
    154 N.J. 555
    , 567 (1998); Morris Cnty. Sheriff's
    
    Office v. Morris Cnty. Policeman's Benev. Ass'n, Local 298, 
    418 N.J. Super. 64
    , 74-75 (App. Div. 2011).
    
          As to the review of PERC decisions, we have said:
    
                   PERC is charged with administering the New
                   Jersey   Employer-Employee   Relations   Act
                   (Act), N.J.S.A. 34:13A-1 to -29, and its
                   interpretation of the Act is entitled to
                   substantial deference.     Appellate courts
                   "'will   not   upset    a   State   agency's
    
    
    
                                            11                                A-2477-13T4
               determination in the absence of a showing
               that   it   was   arbitrary,   capricious   or
               unreasonable, or that it lacked fair support
               in the evidence, or that it violated a
               legislative policy expressed or implicit in
               the governing statute.'"        "Although an
               agency's 'interpretation of the statute it
               is charged with administering . . . is
               entitled to great weight,' . . . [appellate
               courts] will not yield to PERC if its
               interpretation   is   'plainly   unreasonable,
               contrary to the language of the Act, or
               subversive of the Legislature's intent.'"
    
                    PERC's   interpretation   of  the   law
               outside of its charge is entitled to "no
               special deference."   Moreover, deference is
               not afforded when PERC's interpretation
               gives a provision of the Act greater reach
               than the Legislature intended, and PERC must
               follow judicial precedents interpreting the
               Act.
    
               [Commc'ns Workers of Am., Local 1034 v.
               State Policemen's Benev. Ass'n, Local 203,
               
    412 N.J. Super. 286
    , 291 (App. Div. 2010)
               (alteration    in   original)    (citations
               omitted).]
    
        The   issue   presented    in    these    appeals   is   one   of   law:
    
    whether   PERC   can   summarily    reverse    the   dynamic   status    quo
    
    doctrine in order to advance the legislative goal embodied in
    
    the two percent tax levy cap, N.J.S.A. 40A:4-45.44 to -45.47.
    
    Our review is de novo.        Maeker v. Ross, 
    219 N.J. 565
    , 574-75
    
    (2014); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 
    140 N.J. 366
    , 378 (1995).
    
    
    
    
                                        12                             A-2477-13T4
                                                II.
    
           In   the     Atlantic         County        matters,     PERC    adopted     and
    
    incorporated the hearing examiner's findings of fact.                       However,
    
    because     it    abandoned     the        dynamic    status     quo   doctrine,    it
    
    rejected the examiner's decision in favor of both bargaining
    
    units.
    
           It was undisputed that the County's practice for many years
    
    had been to pay salary increments while a new agreement was
    
    negotiated, pursuant to the schedule contained in the expired
    
    CNA.     It is common for contracts between public employers and
    
    employees to expire long before new ones are negotiated.                          Local
    
    77's CNA explicitly provided for this eventuality by stating:
    
    "All provisions of this Agreement will continue in effect until
    
    a successor Agreement is negotiated."                     Article XIX, "Duration
    
    and Termination."
    
           During     the    course       of     the     hearing,    County    employees
    
    testified that law enforcement salary increments were between
    
    approximately five and six percent per year.                     If paid, in order
    
    to meet the two percent tax levy cap, some adjustment would have
    
    to be made to other budget items.
    
           Despite adopting the hearing examiner's findings of fact,
    
    PERC   disagreed        with   his    conclusion        that    the    parties'    CNAs
    
    compelled salary step increments beyond the expiration of the
    
    
    
    
                                                 13                              A-2477-13T4
    agreements.    PERC found instead that "there is not one word in
    
    any of the agreements by which the parties agreed to continue to
    
    provide incremental increases beyond the termination date of the
    
    agreements."       PERC   made   no    mention     that   both   CNAs    were
    
    negotiated assuming the dynamic status quo doctrine applied.
    
        PERC began the analysis in its decision by discussing the
    
    2010 tax levy cap.    It observed that the County had demonstrated
    
    a decrease in its ratable base, as a result of which it had been
    
    compelled to cut expenditures by reducing public services and
    
    projects, by employee furloughs, and similar measures.
    
        PERC further observed that the County's efforts had enjoyed
    
    great success, and that it carried actual budget surpluses in
    
    2010 and 2011, maintained its good bond rating, and limited its
    
    overall   budget   growth   to   under     two    percent.       After   this
    
    discussion, PERC proceeded to consider the "continuing propriety
    
    of what is known as the dynamic status quo doctrine."
    
        PERC's analysis also referenced Piscataway, PERC Galloway,
    
    and Neptune, acknowledging adherence to the doctrine since 1975.
    
    The opinion then stated that PERC had the authority to modify,
    
    or even abandon doctrines it created.            It identified two earlier
    
    
    
    
                                          14                            A-2477-13T4
    cases,   one   decided   in   2011    and    other    in    2012,      in    which   it
    
    deviated from the dynamic status quo doctrine.5
    
         Without    reference     to     the    record,    and      contrary       to    the
    
    rationale it had employed since Piscataway in 1974 that the
    
    dynamic status quo doctrine maintained a level playing field for
    
    labor    negotiations,    PERC       continued:            "a   post        expiration
    
    requirement that employers continue to pay and fund a prior
    
    increment      system    creates       myriad        instabilities           in      the
    
    negotiations process."        PERC next referred to changing economic
    
    conditions, and asserted that governmental budgetary constraints
    
    trump labor considerations.            PERC's opinion closed with this
    
    statement:
    
                [W]e find that the dynamic status quo no
                longer fulfills the needs of the parties in
                that it serves as a disincentive to the
                prompt settlement of labor disputes, and
                disserves rather than promotes the prompt
                resolution of labor disputes.  While public
                employers will continue to be bound by the
    
    5
      Bloomfield Bd. of Educ., P.E.R.C. No. 2011-055, 37 N.J.P.E.R.
    ¶ 2 2011 N.J. PERC LEXIS 79 (2011); State Operated School Dist.
    of Paterson, P.E.R.C. No. 2012-3, 38 N.J.P.E.R. ¶ 33 2011 N.J.
    PERC LEXIS 118 (2011). Both opinions relate to interim relief.
    In the first, PERC declined to compel salary increments during
    negotiations because the payments could not be recouped. In the
    second case, PERC declined to apply the dynamic status quo
    doctrine to a dispute in a financially struggling school
    district because "after weighing the relative hardship to the
    parties and the harm to the public interest, interim relief is
    not appropriate and the dynamic status quo should not be applied
    in this case."    State Operated School Dist. of Paterson, 2011
    N.J. PERC LEXIS at 9.
    
    
    
                                           15                                     A-2477-13T4
                strictures of maintenance of the status quo,
                that will be defined as a "static" rather
                than a dynamic status quo.
    
    Therefore, PERC rejected the hearing examiner's decision because
    
    he applied the dynamic status quo doctrine and "for the reasons
    
    set forth above[,]" and dismissed the unfair practice charges.
    
    This appeal followed.
    
         We    begin   our     analysis   with    N.J.S.A.    34:13A-16.7     [and
    
    related    statutes],      enacted    in     2010,   which    cap    interest
    
    arbitration salary growth at two percent.            The effective life of
    
    N.J.S.A. 34:13A-16.7 was recently extended to 2017.                 This cap,
    
    limited    to   interest    arbitration,     is   the    Legislature's    link
    
    between the Act and the two percent tax levy cap or efforts at
    
    controlling the size of municipal budgets.6               It is significant
    
    because in New Jersey, interest arbitration is compulsory.                 See
    
    N.J.S.A. 34:13A-16.        It hardly needs to be said that had the
    
    Legislature intended to limit salary growth in other areas not
    
    affected by the interest arbitration cap, it clearly could have
    
    done so.    And its silence is meaningful:
    
    
    
    
    6
       In   N.J.S.A.   34:13A-16(g)(6),    an  element,   among   many,
    arbitrators   must   take   into   account  in   resolving   salary
    negotiations is the effect of an award on the employers' budget.
    Similarly,   in    N.J.S.A.    34:13A-16.8(e)(1),   the    Interest
    Arbitration Task Force is directed to, as part of its charge,
    "study the effect and impact of the arbitration award cap on
    local property taxes."
    
    
    
                                          16                             A-2477-13T4
                  [T]he fact that the Legislature has not
                  acted    in   response    to    an   agency's
                  interpretation or practice is "granted great
                  weight as evidence of its conformity with
                  the legislative intent."    Malone v. Fender,
                  
    80 N.J. 129
    , 137, 
    402 A.2d 240
     (1979)
                  (citing Lavitz v. Civil Serv. Comm'n, 
    94 N.J. Super. 260
    , 266, 
    227 A.2d 722
     (App.
                  Div. 1967));   see also Cedar Cove, Inc. v.
                  Stanzione, 
    122 N.J. 202
    , 212, 
    584 A.2d 784
                  (1991) ("The meaning ascribed to legislation
                  by the administrative agency responsible for
                  its implementation, including the agency's
                  contemporaneous construction, long usage,
                  and practical interpretation, is persuasive
                  evidence of the Legislature's understanding
                  of its enactment." (citing Malone, supra, 80
                  N.J. at 137, 
    402 A.2d 240
    )).
    
                  [Klumb v. Bd. of Educ. of Manalapan-
                  Englishtown Reg'l High Sch. Dist., Monmouth
                  Cnty., 
    199 N.J. 14
    , 24-25 (2009).]
    
          The   Legislature       could   have    enacted      additional    limits    by
    
    further amendments.           It did not.       See, e.g., Bd. of Educ. of
    
    Borough of Alpha, Warren Cnty. v. Alpha Educ. Ass'n, 
    190 N.J. 34
    ,   47-48    (2006)    (noting      that    Legislature     overruled     Supreme
    
    Court's ruling in Camden Bd. of Educ. v. Alexander, 
    181 N.J. 187
    , 203-07 (2004), in part, by amending N.J.S.A. 34:13A-5.3,
    
    effective Jan. 12, 2006, to set forth a presumption in favor of
    
    arbitration).
    
          PERC's     decision,     undertaken       in    an    area   in    which    the
    
    Legislature     did     not   act,    was    driven   by    the    tax   levy    cap,
    
    concerns regarding government budgets, and not the Act.                     The two
    
    percent tax levy cap is beyond PERC's agency mandate.                      Concerns
    
    
    
                                             17                                A-2477-13T4
    regarding      budgets     are      not    a    primary     consideration          when   the
    
    agency      safeguards     the      rights      of    public      employees.        "PERC's
    
    interpretation of the law outside of its charge is entitled to
    
    'no special deference.'"               Local 1034, supra, 412 N.J. Super. at
    
    291.
    
           PERC    is    charged        with       administering        the     Act    and    its
    
    interpretation of the Act is entitled to substantial deference.
    
    Its    interpretation         and     implementation         of     laws,    and    primary
    
    consideration       of    goals       outside       its   charge,    however,       is    not.
    
    Local 1034, supra, 412 N.J. Super. at 291.                        In these cases, PERC
    
    filled in a gap it did not have the authority to fill.
    
           Contrary      to    PERC's         conclusion,       there     is     no    absolute
    
    inconsistency between the tax levy cap statute and the dynamic
    
    status quo doctrine because the employer is free to adjust and
    
    balance      its    budget,      if    necessary,         from    other     expenditures.
    
    Additionally,        employers        have      the   capacity,      with     non-tenured
    
    employees, to recoup increments.
    
           In   fact,    the   interest          arbitration         statute's    legislative
    
    history, L. 2010, c. 105, explicitly states that the Legislature
    
    did not intend to place a cap on negotiated agreements.                                    See
    
    Assembly Law & Public Safety Comm. Statement to Assembly Comm.
    
    Substitute for A. 3393 (Dec. 9, 2010) ("[A]greements arrived at
    
    through       independent        negotiation          between       the     parties,      and
    
    
    
    
                                                   18                                   A-2477-13T4
    agreements       reached      with    the     assistance   of      a    mediator    or
    
    factfinder are not subject to the contractual cap.").
    
           Essentially, PERC found that the cost-saving impetus behind
    
    the tax levy cap and the dynamic status quo doctrine conflicted,
    
    and on the balance gave greater weight to the tax cap statute.
    
    By doing so, it undermined its legislative mandate as embodied
    
    in the Act.
    
           "When two statutes may stand together, each governing its
    
    own sphere of operation, there is no inconsistency from which an
    
    intent to repeal may be inferred."                Jackson Twp. Bd. of Educ. v.
    
    Jackson Educ. Ass'n ex rel. Scelba, 
    334 N.J. Super. 162
    , 171
    
    (App. Div.), certif. denied, 
    165 N.J. 678
     (2000).                           See also
    
    Brown v. City of Jersey City, 
    289 N.J. Super. 374
    , 379 (App.
    
    Div.   1996)     ("It   is    well    settled     that   implied       repealers   are
    
    disfavored by the law and will be avoided if the two enactments
    
    can    be   read    harmoniously        and      sensibly.").          "Evidence    of
    
    statutory incompatibility reflecting a legislative intention to
    
    supplant a prior law must be clear and compelling."                      Grzankowski
    
    v. Heymann, 
    128 N.J. Super. 563
    , 568 (App. Div. 1974).
    
           Nor do we agree with PERC that it was free to discard the
    
    doctrine    as     an   act    of    mere   policymaking.       PERC      has   broad
    
    authority to
    
                make   policy   and  establish   rules   and
                regulations   concerning   employer-employee
    
    
    
                                                19                               A-2477-13T4
                 relations in public employment relating to
                 dispute settlement, grievance procedures and
                 administration   including  enforcement   of
                 statutory        provisions       concerning
                 representative elections and related matters
                 and to implement fully all the provisions of
                 this act.
    
                 [N.J.S.A. 34:13A-5.2.]
    
    See   also   N.J.A.C.   19:10-1.1    to    19:19-5.2   (PERC    regulations);
    
    Galloway, supra, 78 N.J. at 33 (PERC "is given certain statutory
    
    powers to fulfill its delegated duty as a regulatory body in the
    
    field   of    public    employment   labor     relations.      These   include
    
    legislation (i.e., rule making), investigation, prosecution and
    
    adjudication.").
    
          And PERC may amend its regulations "to adapt to changing
    
    circumstances and conditions," Glukowsky v. Equity One, Inc.,
    
    
    180 N.J. 49
    , 67 (2004), cert. denied, 
    543 U.S. 1049
    , 
    125 S. Ct. 864
    , 
    160 L. Ed. 2d 770
     (2005), subject to compliance with the
    
    Administrative Procedure Act, N.J.S.A. 52:14B-1 to -15, and due
    
    process requirements.      In re Provision of Basic Generation Serv.
    
    for Period Beginning June 1, 2008, 
    205 N.J. 339
    , 347 (2011); In
    
    re N.J.A.C. 7:1B-1.1 et seq., 
    431 N.J. Super. 100
    , 115-16 (App.
    
    Div.), certif. denied, 
    216 N.J. 8
     (2013).
    
          But the dynamic status quo doctrine is neither a regulation
    
    nor a policy statement.          It is an interpretation of N.J.S.A.
    
    34:13A-5.3,    which    PERC   developed    when   assessing    unfair    labor
    
    
    
    
                                         20                                A-2477-13T4
    practice     charges,     in    fulfilling         its    adjudicative       function
    
    pursuant to N.J.S.A. 34:13A-5.4(c).                     See Neptune, supra, 144
    
    N.J. at 23 (PERC "has interpreted the Act to require a dynamic
    
    status    quo,     including    the    payment     of    increments.")      (emphasis
    
    added);     Galloway,    supra,       78   N.J.    at    48-49    (Legislature        has
    
    "recognized that the unilateral imposition of working conditions
    
    is the antithesis of its goal that the terms and conditions of
    
    public employment be established through bilateral negotiation
    
    and,   to    the    extent     possible,        agreement      between    the    public
    
    employer and the majority representative of its employees"; and
    
    "If a scheduled annual step increment . . . is an 'existing
    
    rul[e] governing working conditions,' the unilateral denial of
    
    that increment would constitute a modification thereof without
    
    the negotiations mandated by N.J.S.A. 34:13A-5.3 and thus would
    
    violate N.J.S.A. 34:13A-5.4(a)(5)") (emphasis added).
    
           Furthermore,      the    parties         relied    on     the     doctrine      in
    
    negotiating their CNAs.          By altering its course, PERC undermined
    
    the parties' legitimate expectations based on their negotiations
    
    and, as to at least Local 77, the actual employment contract.
    
    See, e.g., Camden Bd. of Educ., supra, 181 N.J. at 195 ("As a
    
    general matter, legislative and other regulatory enactments are
    
    'a silent factor in every contract[, and p]arties in New Jersey
    
    are likewise presumed to have contracted with reference to the
    
    
    
    
                                               21                                   A-2477-13T4
    existing law.'" (alteration in original) (quoting Silverstein v.
    
    Keane, 
    19 N.J. 1
    , 13 (1955)), superseded by statute on other
    
    grounds as explained in Bd. of Educ. of Alpha, supra, 190 N.J.
    
    at 48).
    
          Finally,          PERC   wrongly    assumed       that    government          employers
    
    cannot negotiate to avoid paying salary increments after the
    
    lapse of CNAs.            The employer also has the option, when engaged
    
    in   new    negotiations,          to    recoup    salary      increments           in     a   new
    
    contract.
    
          An    additional         consideration       is    that       we   are    obliged         to
    
    follow the discussion in NJ Galloway of the dynamic status quo
    
    doctrine.     It is well-established that "an expression of opinion
    
    on   a     point        involved    in    a     case,    argued          by    counsel         and
    
    deliberately mentioned by the court, although not essential to
    
    the disposition of a case . . . becomes authoritative[] when it
    
    is   expressly          declared    by    the    court    as    a    guide      for       future
    
    conduct."      State v. Rose, 
    206 N.J. 141
    , 183 (2011).                              In other
    
    words, even if the Court's analysis in NJ Galloway was no more
    
    than dictum unnecessary to the ultimate ruling applying N.J.S.A.
    
    18A:29-4.1, we must follow it.
    
          "[A]s        an     intermediate          appellate       court,         we    consider
    
    ourselves bound by carefully considered dictum from the Supreme
    
    Court."     State v. Breitweiser, 
    373 N.J. Super. 271
    , 282-83 (App.
    
    
    
    
                                                  22                                         A-2477-13T4
    Div.    2004),   certif.   denied,   
    182 N.J. 628
       (2005).     Even   in
    
    Neptune, the Court in effect sanctioned the doctrine because it
    
    would be applied to non-teaching staff members in the bargaining
    
    unit.
    
           Here, the hearing examiner concluded in both cases that
    
    nonpayment of the increments would constitute an unfair labor
    
    practice under N.J.S.A. 34:13A-5.4(a)(1) and (5).               We agree.     We
    
    therefore reverse.
    
                                         III.
    
           Once informed of PERC's decision in the matter of County of
    
    Atlantic, the Township's administrator notified Local 174 that,
    
    based on that opinion, "no step increases are to be granted to
    
    any Township employee unless a contract agreement is in place."
    
    As a result, Local 174 filed a grievance alleging the Township
    
    violated the parties' CNA, past practice, and the covenant of
    
    good faith and fair dealing.          Local 174 submitted a request to
    
    PERC for grievance arbitration and the Township filed a scope of
    
    negotiations     petition,    seeking       restraint     of   the   grievance
    
    arbitration.
    
           Local 174's CNA expired December 31, 2012.              It included the
    
    following term:     "This agreement shall remain in full force and
    
    effect during collective negotiations between the parties beyond
    
    the date of expiration set forth herein until the parties have
    
    
    
    
                                          23                              A-2477-13T4
    mutually agreed on a new agreement."          The hearing examiner found
    
    this provision to mean the employer agreed to salary increments
    
    even after the expiration of a CNA.
    
          The grievance arbitration resulted in an award in favor of
    
    Local   174.     That    award   was   confirmed   by   the    Law   Division,
    
    pursuant to statute, on July 9, 2014.         See N.J.S.A. 2A:24-7.
    
          Over   a   month   after   the   grievance   arbitration       award   was
    
    confirmed, on August 14, 2014, PERC decided the Township's scope
    
    of   negotiations    petition,    belatedly    granting       the    Township's
    
    request for restraint of binding arbitration.                 PERC held the
    
    issue was "whether the subject matter in dispute is within the
    
    scope of collective negotiations."          It noted that the scope of
    
    negotiations for police and fire officials "is broader than for
    
    other public employees because N.J.S.A. 34:13A-16 provides for a
    
    permissive as well as a mandatory category of negotiations."
    
          After discussion of its Atlantic County decision, and the
    
    contentions of each of the parties, PERC stated:
    
                 [W]e find that the issue of automatic
                 movement on a salary guide after a contract
                 has expired is not a term and condition of
                 employment and therefore not mandatorily
                 negotiable and legally arbitrable.        We
                 acknowledge that the issues of compensation
                 and advancement on a salary guide are
                 generally mandatorily negotiable and legally
                 arbitrable issues. . . . In this case, our
                 inquiry extends beyond those issues.     The
                 precise issue herein concerns automatic
                 advancement on a salary guide after the
    
    
    
                                           24                              A-2477-13T4
                  expiration of a contract, and whether such
                  advancement continues to be a term and
                  condition of employment.    We find that the
                  answer to this question is no.
    
    Referring to its decision in Atlantic County, PERC added the
    
    following:       "Given that the issue herein fails to qualify as a
    
    term    and     condition        of    employment        it    is     not     mandatorily
    
    negotiable and legally arbitrable and we grant the Township's
    
    request for a restraint of arbitration."
    
           The    record      does    not      offer     any      explanation         for     the
    
    chronology of events, i.e., that the arbitration award was made
    
    and    confirmed    before       PERC    issued     its       scope    of    negotiations
    
    ruling.       Theoretically, the decision is therefore moot.                            Caput
    
    Mortuum, L.L.C. v. S&S Crown Servs., Ltd., 
    366 N.J. Super. 323
    ,
    
    330 (App. Div. 2004) ("A case is moot if the disputed issue has
    
    been    resolved,      at   least       with      respect      to     the    parties      who
    
    instituted the litigation.").
    
           We    nonetheless     address       the    issue       because       the   scope   of
    
    negotiations       petition      may    be     viewed      independently          from    the
    
    grievance.        PERC,     by    virtue     of    the    Township's        inquiry,      was
    
    required to rule on whether the subject matter of dispute was
    
    within the scope of collective negotiations.                        See Ridgfield Park
    
    Educ. Ass'n v. Ridgfield Park Bd. of Educ., 
    78 N.J. 144
    , 154
    
    (1978).       PERC has "primary jurisdiction to make a determination
    
    on the merits of the question whether the subject matter of a
    
    
    
                                                 25                                    A-2477-13T4
    particular     dispute       is    within        the        scope      of     collective
    
    negotiations."       Ibid.        This    appeal    raises       an    issue    of    some
    
    public importance, having the potential to recur.                           See State v.
    
    State Troopers Fraternal Ass'n, 
    134 N.J. 393
    , 397 (1993); Morris
    
    Cnty. Sheriff's Office, supra, 418 N.J. Super. at 73-74.
    
          We employ the same standard of review as we did in Atlantic
    
    County.   Our review is deferential only if PERC's interpretation
    
    of the law relates to its charge to implement the Act.                               Local
    
    1034, supra, 412 N.J. Super. at 291.                   We do not reverse unless
    
    the State agency decision is shown to be arbitrary, capricious,
    
    or   unreasonable,    lacking        fair      support      in   the    evidence,       or
    
    violative of a legislative policy expressed or implicit in the
    
    governing statute.        Ibid.          We ask:         (1) whether the agency
    
    followed the law; (2) whether the agency's decision is supported
    
    by   substantial   evidence       in     the    record;       and     (3)    whether   in
    
    applying the law to the facts, the agency reached a supportable
    
    conclusion.    City of Jersey City, supra, 154 N.J. at 567; Morris
    
    Cnty. Sheriff's Office, supra, 418 N.J. Super. at 74-75.
    
          These   standards      apply     to   scope      of    negotiations        rulings
    
    which are reviewed for arbitrariness or capriciousness.                              See,
    
    e.g., City of Jersey City, supra, 154 N.J. at 567-68; In re
    
    Hunterdon Cnty., supra, 116 N.J. at 328-30; Twp. of Franklin,
    
    supra, 424 N.J. Super. at 377-78.
    
    
    
    
                                              26                                    A-2477-13T4
           Public employees have a constitutional right to engage in
    
    collective negotiations.             N.J. Const., art. I, ¶ 19; Council of
    
    N.J. State Coll. Locals v. State Bd. of Higher Educ., 
    91 N.J. 18
    , 25-26 (1982).          Their majority representative is authorized
    
    to   negotiate       "terms   and        conditions       of   employment"     on   their
    
    behalf.         N.J.S.A.      34:13A-5.3.                 However,    "the     scope    of
    
    negotiations in the public sector is more limited than in the
    
    private        sector"        due         to        the     government's        "special
    
    responsibilities to the public" to "make and implement public
    
    policy." In re IFPTE Local 195 v. State, 
    88 N.J. 393
    , 401-02
    
    (1982) (citations omitted).                Salary is a mandatorily negotiable
    
    term and condition of employment.                    In re Hunterdon Cnty., supra,
    
    116 N.J. at 331-32; In re IFPTE Local 195, supra, 88 N.J. at
    
    403; Twp. of Franklin, supra, 424 N.J. Super. at 379.
    
           In a 2012 decision, while referring to the two percent tax
    
    levy    cap,    PERC     held       "because         issues    of    compensation       are
    
    mandatorily negotiable and the joint employers have not shown
    
    that paying the increments would be preempted by any specific
    
    statute or regulation, we deny the request for a restraint of
    
    binding arbitration."           In re Cnty. of Morris, PERC No. 2013-19,
    
    39 N.J.P.E.R. 181 (¶ 56 2012).                      Citing to its Atlantic County
    
    decisions      and   contrary       to    its       decision   in    In   re   County   of
    
    Morris, PERC determined in this case that salary increments are
    
    
    
    
                                                   27                                A-2477-13T4
    not a negotiable term or condition of employment during a period
    
    when no CNA is in effect.
    
          We reiterate that the fiscal health of municipalities and
    
    tax rates are not within PERC's charge.                  PERC cannot abandon the
    
    adjudicative doctrine it long ago adopted, rooted in parallel
    
    federal law.     To the extent the dynamic status quo doctrine must
    
    be   changed,    it     is    the       Legislature's    prerogative      to    do   so.
    
    Absent   such    a    step,       it    remains   an   item   open   to   negotiation
    
    between employer and bargaining unit.
    
          The Township argues on appeal that PERC's decision accords
    
    with the legislative adoption of the two percent cap on police
    
    and fire interest arbitration awards.                   See N.J.S.A. 34:13A-16.7
    
    (extended to 2017 by L. 2014, c. 11).                     But, as we have said,
    
    that legislation was not extended to other labor disputes.                             In
    
    this case, the parties were attempting to negotiate a successor
    
    agreement but had not turned to interest arbitration, the only
    
    arena in which the Legislature acted.
    
          Thus,     there        is    no     basis   to    conclude     that      N.J.S.A.
    
    34:13A-16.7 preempts negotiation over salary increments payable
    
    during a CNA, or in the interim period between expiration of a
    
    CNA and negotiation or arbitration of a successor agreement.
    
    See, e.g., Council of N.J. State Coll. Locals, supra, 91 N.J. at
    
    30 (a regulation "must fix a term and condition of employment,
    
    
    
    
                                                 28                                A-2477-13T4
    and     it    must        so     provide            expressly,            specifically       and
    
    comprehensively          in     order     to        foreclose            otherwise     required
    
    employer-employee negotiations on the subject matter"); In re
    
    IFPTE    Local     195,       supra,    88     N.J.       at       403-04     (alteration     in
    
    original) (quoting State v. State Supervisory Emps. Ass'n, 
    78 N.J. 54
    ,   80      (1978))    ("Negotiation            is   preempted        only    if   the
    
    'statutory       or     regulatory       provisions            .     .    .   speak    in    the
    
    imperative and leave nothing to the discretion of the public
    
    employer.'").
    
           Accordingly, we reverse PERC's decision on the scope of
    
    negotiations       petition.            Salary       is    a       mandatory     subject      of
    
    negotiation, and the Township's decision not to pay automatic
    
    salary increments in accordance with the earlier CNAs and past
    
    practice was indeed arbitrable.                     NJ Galloway, supra, 78 N.J. at
    
    36.
    
           Reversed.
    
    
    
    
                                                   29                                      A-2477-13T4