Two Statutory Interpretation Decisions: One Involving Discipline of a Tenured Teacher and the Other About Unemployment Tax Payments for Court Reporters

Yesterday, the Supreme Court decided Sanjaun v. School District of West New York, ___ N.J. ___ (2024). There, plaintiff, a long-serving teacher who was also an assistant principal and tenured in both positions, claimed to have fallen on a school staircase while reaching for a piece of paper. But a security videotape showed that she fell, then took a piece of paper from her pocketbook, placed it on the stairs, and went back to laying on the floor. The defendant school board filed charges against the teacher, suspended her without pay, and sought to terminate her employment.

Under the Tenure Employees Hearing Law (“TEHL”), N.J.S.A. 18A:6-10 et seq., charges against tenured personnel are required to go to arbitration when “.sufficient to warrant dismissal or reduction in salary,.” Yhis case went there. As Justice Solomon’s opinion for a 6-0 Court stated, the arbitrator determined that plaintiff’s conduct “conduct justified a penalty,” but one “less severe than” dismissal.” The arbitrator relied on mitigating factors, including “the limited scope of the incident and Sanjuan’s long service with the public school district as a teacher.” The arbitrator ruled that plaintiff would not be terminated. Instead, she was to lose her tenured assistant principal position and regain her tenured teacher role, but without back pay.

Plaintiff sued, contending that the arbitrator had exceeded his powers under the TEHL by imposing a penalty on her. The Law Division dismissed the case, but the Appellate Division reversed in an opinion reported at 473 N.J. Super. 416 (App. Div. 2022). On further review, the Supreme Court reversed and reinstated the arbitrator’s decision, applying de novo review., while also noting “New Jersey’s strong preference for judicial confirmation of arbitration awards .”

Justice Solomon traced the history of the TEHL, which dated back to 1967. He noted that “[a]lthough the legislation limits the cases that reach the arbitrator, it does not limit the remedies available to the arbitrator.” The Legislature could have restricted an arbitrator’s ability to impose penalties but did not do that. Justice Solomon cited prior cases in which arbitrators were said to have broad powers. He concluded that “[b]ecause N.J.S.A. 18A:6-16 does not limit the possible penalties to reduction in salary and termination and no contractual agreement sets limits beyond those imposed by the TEHL, and in keeping with the broad discretion to fashion remedies long recognized in decisional law, we find that the arbitrator here did not exceed his powers in demoting Sanjuan and instead correctly determined a penalty tailored to this case.”

The Appellate Division decision yesterday, authored by Judge Marczyk, was State Shorthand Reporting Servs. v. New Jersey Dep’t of Labor and Workforce Development, ___ N.J. Super. ___ (App. Div. 2024). The issue there was “whether N.J.S.A. 43:21-19(i)(10)—from the time of its enactment in 2010—provides an exemption for court reporters under the Unemployment Compensation Law (“UCL”), N.J.S.A. 43:21-1 to -71, or whether court reporters must still establish a Federal Unemployment Tax Act (“FUTA”) exemption pursuant to N.J.S.A. 43:21-19(i)(1)(G).” The panel concluded that section 19(i)(10) did provide an exemption, so that there was no need for a FUTA exemption. The plain language of the statute and its legislative history both supported that result, as Judge Marczyk carefully explained.