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                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-4315-16T2

IN THE MATTER OF

WEST ORANGE BOARD OF EDUCATION,

        Petitioner-Respondent,

v.

WEST ORANGE EDUCATION ASSOCIATION,

     Respondent-Appellant.
__________________________________

              Submitted January 8, 2018 - Decided July 25, 2018

              Before Judges Accurso, O'Connor and Vernoia.

              On appeal from the Public Employment
              Relations Commission, Docket No. SN-2017-
              013.

              Zazzali, Fagella, Nowak, Kleinbaum &
              Friedman, attorneys for appellant (Genevieve
              Murphy-Bradacs, on the briefs).

              Cleary Giacobbe Alfieri & Jacobs, LLC,
              attorneys for respondent (Matthew J.
              Giacobbe and Gregory J. Franklin, on the
              brief).

              Christine Lucarelli-Carneiro, Acting General
              Counsel, attorney for respondent New Jersey
              Public Employment Relations Commission
              (David N. Gambert, Deputy General Counsel,
              on the statement in lieu of brief.)
PER CURIAM

      Following expiration of its collective negotiations

agreement with the West Orange Education Association, the West

Orange Board of Education filed a scope petition with the Public

Employment Relations Commission asserting certain provisions of

the expired agreement were not mandatorily negotiable and should

be stricken from any successor agreement.   Among those

provisions was Article XV, Section B (entitled "Supplementary

Sick Leave"), which provided:

           Full-time employees shall be credited with
           five (5) days supplementary sick leave
           allowance for each year of service, with
           unused days to be accumulated. Full-time
           employees who have exhausted their regular
           sick leave may utilize the accumulated
           supplementary sick leave to the extent
           necessary to provide total compensation of
           up to three (3) days beyond this period in
           any month wherein less than three (3) days'
           compensation has been earned.

      The Board argued the provision was an extended sick leave

benefits clause preempted by N.J.S.A. 18A:30-6.1   The Association


1
    N.J.S.A. 18A:30-6 provides:

                When absence, under the circumstances
           described in section 18A:30-1 of this
           article, exceeds the annual sick leave and
           the accumulated sick leave, the board of
           education may pay any such person each day’s
           salary less the pay of a substitute, if a
           substitute is employed or the estimated cost
                                                       (continued)

                                  2                         A-4315-16T2
countered that notwithstanding the wording of the provision and

its reference to "sick days," "the sole purpose of Article XV,

Section B was to codify the parties' longstanding past practice

of providing employees with 'insurance days' based on years of

service that could be used to continue their health benefits

during unpaid leaves of absence."2   The Association contended

there was no dispute that provision of health benefits coverage

during unpaid leaves of absence was a mandatorily negotiable



(continued)
          of the employment of a substitute if none is
          employed, for such length of time as may be
          determined by the board of education in each
          individual case. A day’s salary is defined
          as 1/200 of the annual salary.

          [Emphasis supplied.]
2
   In a certification submitted to PERC, the president of the
Association explained that over the last many years, all full-
time employees have been allowed to accumulate five so-called
"insurance days" for each year of service annually. Use of
three of those days entitled an employee to the Board's portion
of the health premium for one calendar month. Thus, an employee
with six years' service was entitled to thirty "insurance days,"
which could be used to continue the Board's contribution to the
employee's health premium for ten months while on unpaid leave.

   Based on PERC's 1992 decision, which notes the supplementary
sick leave provision became part of the parties' CNA beginning
in the 1960-61 school year, counsel for PERC speculates the
clause mutated "into the alleged past practice of providing
solely for the 'insurance days'" after the blanket award of
supplementary sick days was preempted by the enactment of
N.J.S.A. 18A:30-6 in 1967.


                                 3                        A-4315-16T2
subject, relying on a 1992 PERC decision against the Board in

the Association's favor so holding.

    PERC ruled for the Board, finding that although health

benefits during periods of unpaid leave is a negotiable topic,

the Association "cannot achieve such a contractual benefit in

the guise of supplementary sick leave that allows for extra paid

sick leave days to be earned and utilized via blanket rule

rather than per the Board's discretion within the constraints of

N.J.S.A. 18A:30-6."   It distinguished its prior decision, which

arose in the context of a grievance arbitration, because there,

"application of the relevant contract clause was confined to the

known circumstances of the issues sought to be arbitrated."

Although acknowledging that the supplementary sick leave

provision in that case was "nearly identical" to Article XV,

Section B, PERC found the issue in the prior case "was whether

the Board violated the contract 'when it discontinued health

insurance benefits for employees on unpaid leaves of absence.'"

    The Association moved for reconsideration arguing that

after PERC's decision of June 30, 2016, "the Board has advised

that it will no longer honor the parties' longstanding

contractual agreement to allow employees to use their

accumulated 'supplementary sick leave' to continue their health

benefits while on unpaid leaves of absence."   The Association

                                4                          A-4315-16T2
complained the Board acted notwithstanding "that such an

agreement involves a mandatorily negotiable term and condition

of employment" and that "there is not now, nor has there ever

been, any other permissible use for supplementary sick leave

days provided by the parties' agreement other than for the

continuation of health benefits during an unpaid leave of

absence."3

     PERC, although noting "employers may not unilaterally

change prevailing terms and conditions of employment," whether

established by agreement or past practice, as doing so "would

circumvent the statutory duty to bargain," see Galloway Tp. Bd.

of Ed. v. Galloway Tp. Ed. Ass'n, 78 N.J. 25, 48 (1978), agreed

with the Board the Association had not established a basis for

reconsideration.

     The Association did not appeal those rulings.   Two weeks

later, however, it filed a grievance on behalf of a member

denied the use of supplementary sick days to secure continuation

of her health benefits during an extended unpaid leave.     The

Board denied the grievance relying on PERC's decision striking


3
   The Board disputes that, contending the CNA further obligated
it to a $5000 "opt-out waiver payment" for employees foregoing
such coverage. As our disposition does not rest on these
grounds, we have no need to resolve the parties' dispute on the
point.


                               5                           A-4315-16T2
Article XV, Section B and PERC's rejection of the Association's

past practice argument on reconsideration.

    When the Association demanded the issue be placed before a

panel of arbitrators, the Board filed a scope petition with PERC

seeking to restrain arbitration.    The Association argued PERC's

decision striking Article XV, Section B was not controlling as

that matter turned on a negotiability analysis, not the

arbitrability analysis required here.    PERC rejected the

argument that whatever distinction might exist between

arbitrability and negotiability could result in the past

practice of awarding health insurance days remaining arbitrable

despite the striking of the parties' supplementary sick leave

clause.   Finding it undisputed, based on its prior decisions and

the Association president's certification, that "the past

practice regarding 'insurance days' was solely rooted" in

Article XV, Section B, PERC determined its removal left the past

practice "without any foundation and . . . effectively

eliminated."

    On appeal, the Association reprises the arguments it made

to PERC that the continuation of health insurance benefits for

employees on unpaid leaves of absence is a mandatorily

negotiable term and condition of employment, and adds that PERC

exceeded its jurisdiction when it failed to limit its inquiry to

                                6                            A-4315-16T2
whether the subject matter of the grievance involved a

mandatorily negotiable term and condition of employment.     We

disagree.

    The Association's argument is premised on a proposition

neither the Board nor PERC disputes, that health coverage for

employees during unpaid leaves of absence is a mandatorily

negotiable term of employment.    Thus, if one squints at the

issues so that it is the only one visible, the question might

appear initially to meet the test for negotiability established

in In re Local 195, IFPTE, 88 N.J. 393, 404-05 (1982), that is,

involve (1) an "item [that] intimately and directly affects the

work and welfare of public employees"; (2) that "has not been

fully or partially preempted by statute or regulation"; and (3)

involves a matter where "a negotiated agreement would not

significantly interfere with the determination of governmental

policy."    But so myopic a focus blurs, not sharpens, the dispute

the parties presented to PERC.

    PERC struck Article XV, Section B because it is plainly

preempted by N.J.S.A. 18A:30-6, rejecting the Association's

position that the clause, although worded as a supplementary

sick leave provision, was actually only a mechanism for the

provision of health benefits during a period of unpaid leave, a

well-settled negotiable term of employment.    PERC acknowledged

                                 7                         A-4315-16T2
the parties were free to negotiate for the provision of health

coverage during leave, but ruled the Association could not

"achieve such a contractual benefit in the guise of [a]

supplementary sick leave" term preempted by statute — a

proposition the Association effectively conceded by failing to

appeal PERC's decision striking the clause from the parties'

Agreement.

    Permitting the Association to arbitrate the Board's denial

of a member's request to use her supplemental sick days to

secure paid health benefits based on the past practice

established under Article XV, Section B would effectively

nullify PERC's ruling striking the provision from the parties'

contract.    The clause, although stricken from the Agreement,

would continue to live on, enforceable as past practice

notwithstanding that the clause, and thus the practice, has been

preempted by legislation, a result clearly contrary to law.      See

State v. State Supervisory Emps. Ass'n, 78 N.J. 54, 81-82 (1978)

(holding "where a statute or regulation sets a maximum level of

rights or benefits for employees on a particular term and

condition of employment, no proposal to affect that maximum is

negotiable nor would any contractual provision purporting to do

so be enforceable").



                                 8                        A-4315-16T2
      We accordingly can find no error, much less reversible

error, in PERC's determination that excising the supplementary

sick leave provision from the Agreement prevented the union from

relying on the past practice of permitting District employees to

compel the District to provide paid health benefits on the basis

of supplementary sick days awarded on other than the case-by-

case basis permitted by N.J.S.A. 18A:30-6.    See City of Jersey

City v. Jersey City Police Officers Benevolent Ass'n, 154 N.J.

555, 568 (1998) (directing that a decision by PERC concerning

the scope of negotiations will stand unless clearly demonstrated

to be arbitrary or capricious).

      Moreover, as observed by PERC's counsel on appeal, and not

disputed by the Association, N.J.S.A. 18A:16-16, the statute on

which the Association relies to establish the negotiability of

health benefits during periods of leave, conditions such

coverage on an express contractual provision negotiated by the

parties.4   PERC having struck Article XV, Section B from the


4
    N.J.S.A. 18A:16-16 provides:

                 The coverage of any employee, and of
            his dependents, if any, shall cease upon the
            discontinuance of his employment or upon
            cessation of active full-time employment in
            the classes eligible for coverage subject to
            such provision as may be made in any
            contract made by the local board of
                                                        (continued)

                                   9                       A-4315-16T2
parties' Agreement, N.J.S.A. 18A:16-16 preempts the

Association's reliance on past practice alone to establish an

employee's entitlement to continued health benefits while on

unpaid leave.   The parties are free to negotiate for health

coverage during periods of unpaid leave; PERC's decision, which

we affirm, only requires they do so within the parameters

established by the Legislature in N.J.S.A. 18A:30-6 and N.J.S.A.

18A:16-16.

    Affirmed.




(continued)
          education for limited continuance of
          coverage during disability, part-time
          employment, leave of absence other than
          leave for military service, and for
          continuance of coverage after retirement.

         [Emphasis supplied.]


                                10                       A-4315-16T2
