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Appellate Division Holds That Schedule Change Does Not Bar Award of Overtime

The Zazzali Firm recently scored a victory in the Appellate Division which upheld an arbitration opinion awarding a substantial amount of overtime compensation as a result of a schedule change. The court’s unanimous decision in Middletown Township v. Middletown Township Police SOA does not announce any new principles. However, it does reaffirm that municipalities may be required to compensate members for any overtime worked as a result of a new schedule implemented without agreement of the union. Paul L. Kleinbaum, Esq. and Kaitlyn E. Dunphy, Esq. represented the SOA in this case.

The basic facts were as follows. The local PBA and the Township agreed to implement a modified Pitman schedule with a 10½ hour work day for its officers. Although the SOA was not a party to this agreement, the Township also implemented the new schedule for the SOA. The Township argued it had a right to unilaterally implement the new schedule for the SOA under a clause of the collective negotiations agreement which provided it had the right to change schedules but was required to negotiate any impact of its change on wages, overtime and other compensation. The SOA filed a grievance arguing that it was entitled to overtime compensation for any hours worked beyond 8 hours a day. It did not challenge the new schedule.

While the grievance was pending, the SOA eventually agreed to the modified Pitman schedule. However, as part of the agreement to implement the new schedule, the SOA reserved the right to pursue its grievance for overtime compensation for the period of time from when the schedule was implemented until the parties agreed to implement the new schedule. That period of time was approximately three months.

After the Township refused the SOA’s offer to settle the case through the use of compensatory time rather than overtime compensation, the matter proceeded to arbitration. The arbitrator agreed with the SOA in all respects and concluded that the Township did not have the right to refuse to pay overtime compensation for the daily difference in hours worked between the 8 hour schedule in the collective bargaining agreement and the 10½ schedule under the modified Pitman schedule. As a result, the arbitrator awarded a substantial amount of overtime compensation to SOA members who worked the modified Pitman schedule during the three month period at issue.

The Township moved to vacate the award in Superior Court. A Superior Court judge confirmed the award in a very thorough and well-reasoned opinion. Instead of complying with the award, the Township moved for a stay of the award pending its appeal to the Appellate Division. The SOA opposed the Township’s motion. Although the trial court granted the Township’s motion for a stay, the court awarded post judgment interest in the event the Appellate Division upheld the award. The court also gave the SOA the opportunity to seek prejudgment interest as well.

The Appellate Division unanimously affirmed the trial court’s decision upholding the award. The court rejected each and every argument raised by the Township, including its argument that the arbitrator’s award violated public policy. The Township claimed that the award violated public policy because the implementation of the modified Pitman schedule was necessary to maintain good order and discipline as well as maximum operational efficiency in the police department. The court firmly rejected that argument. The SOA never argued that the Township could not implement the modified Pitman schedule in light of the contractual provision at issue. The grievance only sought the right to overtime compensation for hours worked beyond the 8 hour shift. There is no public policy violation, according to the court, in requiring a municipality to pay overtime compensation in these circumstances.

The significance of this decision is that it reaffirms a municipality’s obligation to comply with contractual provisions concerning the impact of a change in work schedules, as well as other changes resulting from the exercise of managerial prerogatives. It does not just apply to law enforcement officers but to all public employees. In this case, the parties negotiated a provision which required the Township to negotiate the impact of any change in schedule. The court’s decision in no uncertain terms refused to allow the Township to evade and avoid its obligation to pay overtime compensation. As a result, SOA officers in the Patrol Division will be receive substantial payments of overtime compensation.

Unions which are faced with similar circumstances, whether a schedule change or some other exercise of a managerial prerogative, should review their contracts carefully to determine whether there is a basis to challenge the impact of the municipality’s action and discuss with their attorneys the appropriate way to respond. The court’s decision reaffirms the right to enforce contractual provisions concerning compensation even in the face of the exercise of a managerial prerogative.

©2017 Zazzali, Fagella, Nowak, Kleinbaum & Friedman. Blog is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between the Zazzali Law Firm and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of the Zazzali Law Firm.

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