Bloomberg News

N.J. Court Says Cap on School Administrators’ Sick Pay Valid

May 03, 2012

The New Jersey Supreme Court ruled that regulations limiting the amount of back sick pay that public school superintendents can collect are valid, reversing a lower court’s decision.

The state legislature passed measures in 2007 in an attempt to lower property taxes and to address the issue of excessive benefits for high-level school administrators, including a $15,000 cap on accumulated unused sick leave payments to certain officials upon retirement.

The New Jersey Association of School Administrators challenged the regulations on the grounds that they were unconstitutional because they changed contracts already in place. An appellate court invalidated the measures in part, finding that the new rules deprived some administrators of vested rights and reduced the compensation of tenured assistant superintendents.

The state appealed and the Supreme Court reversed the lower court’s decision today, saying the regulations are valid and allow payments for unused sick leave above the cap that were already earned by employees or would be accumulated under existing contracts.

“The legislature properly exercised its power when it directed the commissioner to issue regulations for new contracts for superintendents and assistant superintendents,” Chief Justice Stuart Rabner said in a unanimous opinion.

‘Clear Signal’

The ruling sends a “clear signal” that the reforms made in 2007 were a “strong move in the right direction,” said Kevin Roberts, a spokesman for Governor Chris Christie, in an e- mail.

“Now, it’s time for the legislature to join the governor in putting an end to this abuse of taxpayer dollars once and for all at every level of government by acting on our zero means zero plan,” Roberts said. “Sick days are when you’re sick, not as a retirement bonus, and should have no cash value moving forward.”

The administrators’ association said in a statement that the court “squarely held” that its members can’t be denied compensation for sick days accumulated before the regulations were enacted or earned under contracts that were in effect at that time.

‘Cannot Infringe’

The court didn’t rule on whether contracts that automatically renew because a party didn’t give timely notice that they were being terminated are new contracts under the regulations, and also left open the question of whether tenure compensation includes benefits or just salary, the association said.

“The court did rule that the legislature can prospectively impact the terms and conditions of employment of public employees, but in doing so cannot infringe on constitutional rights or existing contract rights,” the association said. “In other words, legislative changes cannot be imposed retroactively on existing contracts.”

The case is New Jersey Association of School Administrators v. Schundler, A-98/066789, New Jersey Supreme Court (Trenton).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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