## Facts

- Public-sector unions representing multiple State employee units negotiated with the State over a collective agreement for July 1979–June 1981.
- The parties disputed whether proposed clauses were within the mandatory “terms and conditions of employment” subject to collective negotiations under the New Jersey Employer–Employee Relations Act.
- The disputed topics were (1) limits on contracting/subcontracting of unit work, (2) workweek and scheduling provisions, and (3) transfer and reassignment provisions.
- The parties jointly petitioned the Public Employment Relations Commission (PERC) for a scope-of-negotiations determination before any concrete grievance arose.
- PERC concluded the subcontracting, workweek, and portions of transfer/reassignment provisions were mandatorily negotiable based on their effect on employees’ wages, hours, and working conditions.
- The Appellate Division reversed PERC on subcontracting, treating the subcontracting decision as a non-negotiable managerial prerogative, and narrowed negotiability of other clauses; a dissent triggered an appeal as of right on subcontracting.
- The Supreme Court reviewed subcontracting and, by certification, workweek and transfer/reassignment negotiability.

## Issues

1. Whether the State’s decision to contract out or subcontract services is a mandatorily negotiable term and condition of employment or a non-negotiable managerial prerogative.
2. Whether, and to what extent, workweek and scheduling provisions are mandatorily negotiable.
3. Whether, and to what extent, transfer and reassignment provisions are mandatorily negotiable or impermissibly intrude on managerial control of governmental operations.

## Decision

- The Supreme Court affirmed in part and reversed in part the Appellate Division and modified PERC’s scope determinations.
- The Court held the basic decision to subcontract public services is generally a non-negotiable governmental policy determination reserved to management.
- The Court held negotiability may exist over the employee-impact consequences of subcontracting (e.g., layoff-related procedures or other protective arrangements) when bargaining would not significantly interfere with the policy decision.
- The Court treated workweek provisions governing hours and scheduling as generally mandatorily negotiable, absent a showing that a specific clause would significantly interfere with governmental policy.
- The Court held transfer and reassignment provisions are negotiable only to the extent they address employee working conditions without significantly interfering with the State’s ability to assign and deploy personnel to implement governmental policy.

## Legal Principles

- A subject is mandatorily negotiable in New Jersey public-sector bargaining if:
  - it intimately and directly affects employees’ work and welfare;
  - it is not preempted, in whole or part, by statute or regulation; and
  - it can be negotiated without significant interference with the determination of governmental policy.
- When a proposed subject implicates both employee interests and governmental policy, negotiability turns on balancing employees’ interests in working conditions against the public employer’s interest in setting and executing policy.
- The decision whether to provide services through public employees or private contractors is ordinarily a non-negotiable policy choice; bargaining may be required over severable impact topics that do not materially constrain that choice.
- Hours of work and scheduling are paradigmatic terms and conditions of employment and are typically negotiable unless bargaining would substantially impair essential governmental functions.
- Transfer and reassignment terms are negotiable when they regulate procedures or effects on employees’ working conditions, but not when they materially restrict managerial authority to allocate personnel to meet operational and policy needs.

## Conclusion

The court established a structured test for determining mandatory subjects of public-sector negotiations, reserving core policy choices—such as the decision to subcontract—to managerial prerogative while permitting bargaining over employee-impact matters and broadly recognizing negotiability of workweek and certain transfer/reassignment provisions that do not significantly interfere with governmental policy.


In re IFPTE Local 195, 88 N.J. 393, 443 A.2d 187 (N.J. 1982)