January 1, 1900

by Rocky L. Peterson

On July 10, 2003, the Governor signed A-3419, which changes significantly the impasse procedures school boards follow in the event that mediation fails to result in a negotiated settlement. The most significant change is that boards of education are prohibited from implementing their last best offer if post fact-finding negotiations fail to produce an agreement. Fact-finding and "super conciliation" are now required parts of the impasse process. Finally, the law requires public release of the neutral’s recommendations ten days after the recommendations are received by the parties.

Under the prior law, public employers, such as school boards, had the right to impose the last, best offer if and when negotiations reached a genuine impasse. Impasse occurs when after engaging in good faith negotiation, mediation, factfinding with a mediator and post fact-finding negotiations, the parties are unable to reach an agreement. In that situation, public employers had the right to impose their last, best offer. There was no further step in the process requiring mediation or arbitration. Under the prior statute, a neutral’s fact-finding recommendation was not required to be released to the public.

Effective immediately, if after mediation, the parties are not able to reach a negotiated settlement, factfinding is now a statutorily mandated step of the impasse process. The fact-finding is conducted by a neutral selected and paid for by the parties. If no settlement is reached through fact-finding, the fact-finding neutral issues a report to the parties. Ten days after the release of that report to the parties, the report is to be made public. The parties are given twenty days after issuance of the fact-finder’s report to reach a settlement. If the parties are not able to reach an agreement within twenty days after receipt of the fact-finder’s report, then super conciliation is a required step. Another neutral is chosen as a super conciliator in an attempt to reach a settlement. If the super conciliator is unable to reach a settlement, a written recommendation must be issued. Ten days after its release to the parties, it is also released to the public.

While the law requires release of the fact-finder’s and super conciliator’s reports, these recommendations still remain advisory only. The public release of the fact-finding does not require the board or public entity to reach a settlement pursuant to the terms of the released documents. The board and union maintain sole responsibility and authority to reach a mutual agreement. As under prior law, pending the impasse procedures, the board and the union retain the rights it had under the labor agreement. Expired agreements can still be enforced, although the board cannot unilaterally make changes to the terms and conditions of the labor contract.

The new law went into effect immediately. It, therefore, applies to all negotiations at impasse on the day of its signing. It also applies to current negotiations which may subsequently reach the impasse stage.

The Public Employment Relations Commission (PERC) is currently developing the necessary regulations to clarify and administer this change in the impasse procedures. The New Jersey School Boards Association advises that PERC can also be expected to specify procedures (including form and timelines) for the assignment of a super conciliator. Pending adoption of these new rules, parties who must initiate super conciliation should contact PERC for the appointment of a super conciliator.

Finally, while adoption of the new law appears to increase the power of the public labor unions to obtain a more favorable settlement, local school districts are not required to adopt terms to which they strenuously object. As with the prior impasse procedures, all settlements must be mutual. It can be expected, however, that the public release of a neutral’s recommendation can and will drive all parties toward settlement. Hill Wallack is readily available to provide legal counsel to school boards in all their labor contract needs.

Rocky L. Peterson is a partner at Hill Wallack and partner-in-charge of the Municipal Law and School Law Practice Groups.