The Current State of the Interest Arbitration Process: A Fractured System
In accordance with a report issued by NJ.Com, more than 40 towns and counties filed petitions to compel compulsory interest arbitration in anticipation of the expiration of what is commonly referred to as the "2% cap" law. Today, April 1, 2014, a state law in effect since 2011 that caps interest arbitration awards at 2 percent, sunsets and renewal of the same appears to be unlikely. The State Senate and Assembly on Thursday sent Gov. Chris Christie a bill that would extend the cap until the end of 2017. The bill had slight modifications to the current law that is set to expire. However, Christie conditionally vetoed the bill, stating that it did not impose the necessary restraints on law enforcement unions to collectively bargain for wages and conditions of employment. The State Senate concurred with the Governor's recommendations, however, the Assembly has yet to address the veto. Based on the foregoing, various municipalities and counties filed for interest arbitration due to the fact that they believe it is unclear if the cap will apply to contracts that are under negotiation but have not yet gone into arbitration. Under the current law, the New Jersey Public Employment Relations Commission is mandated to appoint an Arbitrator the following business day that a petition to compel arbitration is received. However, at this point in time, there are approximately five (5) arbitrators that sit on the special panel that has been appointed to hear these highly complex legal and economic cases. Thus, it appears evident that it will be an impossibility for arbitrator appointments to be made in accordance with the mandate. As we have all known for the past three years, the system to address an impasse regarding public safety contracts is fractured and in need of an overhaul. However, now, State Government must recognize the problems with the current law as they most likely will not be able to comply with the very same rules and regulations that they have put into place.