Grillo v. State of New Jersey, ___ N.J. Super. ___ (App. Div. 2021). In 2011, legislation (“Chapter 78”) changed the way that State Health Benefits Plan (“SHBP”) benefits were provided to public employees participating in that program. Chapter 78 required that employees contribute to the cost of that plan based on their “base salary.”
Plaintiffs, who are Trenton police officers who were injured at work and were receiving temporary disability benefits through workers’ compensation, brought this case seeking a declaratory judgment that their contributions be based on “on the rate of Temporary Disability Benefits being paid” rather than on base salary. If the temporary disability benefits they were receiving were the measuring stick, plaintiffs would be paying less than if base salary were used.
The State filed a motion to dismiss for failure to state a claim. The Law Division granted dismissal with prejudice, finding that the statutory language was clear and defeated plaintiffs’ claim. Today, applying the de novo standard of review to the issue of statutory interpretation raised, and searching the complaint with liberality for a valid cause of action, the Appellate Division affirmed. Judge Smith wrote the panel’s opinion.
Judge Smith found that the statutory language was “very specific” and that the Legislature deliberately used “base salary.” “There is no basis in our principles of statutory construction to substitute temporary disability benefits, a temporary payment to employees arising from work-related injury status, for collectively bargained salary, pensionable or not. There is no need to reach outside of the SHBP statutory scheme to discern the legislature’s intent.” Paterson Police PBA Loc. 1 v. City of Paterson, 433 N.J. Super. 416 (App. Div. 2013), in which the Appellate Division considered the definition of “base salary” in the very different context of “competing versions of police officers’ annual collectively bargained salary,” did not call for a different result, but in fact buttressed the panel’s opinion today.
Plaintiffs also sought to amend their pleading to allege that temporary disability benefits are not salary, so that plaintiffs had no obligation to contribute to SHBP premium costs while on disability. Judge Smith upheld the Law Division, which had denied leave to amend. N.J.S.A. 52:14-17.28d(a) calls for SHBP premium contributions to be withheld from “pay, salary, or other compensation.” Judge Smith held that “[t]emporary disability benefits are ‘other compensation,’ compensation from which SHBP premium cost contributions are deducted. The unambiguous language of N.J.S.A. 52:14-17.28d renders the potential cause of action in the proposed amendment futile. The trial court did not abuse its discretion in denying appellants’ motion to amend.”