CLEARY GIACOBBE ALFIERI JACOBS OBTAINS ARBITRATION VICTORIES FOR SCHOOL DISTRICTS IN HEALTH CONTRIBUTION DISPUTES UNDER CHAPTER 44

In recent arbitration decisions involving the Chester and Ridgewood Boards of Education, the respective Education Associations challenged the districts’ continued requirement that employees contribute toward dental insurance premiums at rates originally established under Chapter 78 of New Jersey law. Both Associations argued that the implementation of Chapter 44, which introduced the Educators Health Plan (EHP), rendered dental insurance Chapter 78 contribution requirements invalid.

In each case, the Associations asserted that Chapter 44, which became effective on July 1, 2020, superseded Chapter 78 and no longer required contributions for dental coverage. Chapter 44 specifically defined the “cost of coverage” for which employees must contribute as limited to medical and prescription drug benefits, explicitly excluding dental, vision, and other ancillary health benefits. The Associations argued that because their collective bargaining agreements (CBAs) required contributions “in accordance with applicable state law,” and Chapter 44 did not mandate dental contributions, the school districts had no legal or contractual basis to continue imposing them.

The Boards, however, maintained that although Chapter 44 changed the statutory requirements for medical and prescription drug contributions, it did not override previously negotiated terms related to dental benefits. In both cases, the dental contribution rates were not unilaterally imposed by statute, but had become part of the collective bargaining agreements through prior negotiations. The Boards emphasized that since neither Chapter 44 nor any other law prohibited such contributions and because the parties had not since negotiated a change, the previously agreed-upon dental contributions remained enforceable.

The arbitrator ruled in favor of the school districts in both matters finding that Chapter 44 did not preempt the previously negotiated dental contribution terms, nor did it invalidate the existing status quo language, which included contributions at the Chapter 78 level. The arbitrator noted that while Chapter 44 is silent on dental contributions, its lack of a mandate does not mean such contributions are impermissible. Rather, the issue remains a negotiable term and condition of employment. Therefore, unless and until the parties negotiate a change, the current dental contribution requirements remain in effect.

Additionally, the arbitrator concluded that past arbitration awards, prior bargaining history, and the legal principle of maintaining the status quo in public-sector labor negotiations supported the Boards’ positions. The arbitrator specifically rejected the argument that Chapter 44 repealed or nullified the negotiated dental contributions, reaffirming that contractual obligations continue unless modified through mutual agreement.

As such, the arbitrator concluded that the Boards of Education did not violate their respective collective bargaining agreements by requiring employees enrolled in the EHP or EHP-Equivalent plans to continue contributing toward dental insurance premiums at the rates previously established under Chapter 78.

Matthew J. Giacobbe, Partner of the Firm, represented the Chester Board of Education and Ridgewood Board of Education.