The future of health benefits for 4,000 Newark teachers and their families is still precarious despite a recent court ruling that stopped the state from unilaterally changing prescription drug providers. Although both the Newark Teachers Union (NTU) and the state-appointed schools superintendent claimed victory after a Jan. 29 court hearing, the truth is the issue is still unresolved.
Superior Court Judge Donald Kessler did temporarily stop Christopher Cerf, Gov. Chris Christie’s agent running the city’s schools, and NTU President John Abeigon declared a “victory” for the union. At the same time, Cerf put out a statement saying Kessler supported his view that the superintendent has the “management prerogative” to unilaterally change the prescription provider.
So who won?
Both, really. And neither.
Now that a transcript of the court session has been released, it’s clear what really happened.
Abeigon was right: Kessler stopped Cerf from choosing a provider recommended by a brokerage firm run by George Norcross III, the Democratic boss of South Jersey and a Christie ally.
“Individuals don’t have the right to change the status quo, and the status quo was altered by the Newark Public Schools,” Judge Kessler explained when he issued a temporary restraining order against Cerf.
But—and it’s an enormous but—Kessler also said he leaned toward ultimately allowing Cerf to choose the provider because of the doctrine of “management prerogative”—the ability of administrators to make decisions without collective bargaining.
“It makes no sense to the court that the Newark Public Schools could not for the benefit of the public, for the benefit of the students it serves, obtain a less expensive policy with the same or substantially similar benefits,” Kessler said.
“Otherwise, you’re taking the authority away from the school, its managerial discretion, to operate a budget.”
The reason neither side won is this: The case isn’t over yet. Kessler is expected to hold a hearing early in April to make a final decision on what, in his mind, is the central question: Will be the benefits provider chosen by Cerf and Norcross’s firm—Benecard—provide the same or substantially similar benefits to the school employees and their families?
If Kessler agrees the benefits are similar, then Cerf wins and he chooses the politically-connected firm that was founded by Douglas Forrester, a Republican candidate for both governor and US senator. If not, then the decision to choose a provider stays where it is now, with the Newark Supplemental Fringe Benefits Fund (SFBF).
And this is where things really get both complicated and important. The SFBF was created more than 40 years ago after years of strife between the NTU and the city school board. The fund, rather than the school district, was empowered by a bargaining agreement to provide benefits to school employees.
The fund was headed by eight trustees, four appointed by the NTU, four by the school board.
That was in 1972. In 1995, the state took over the powers of the school board. For more than 20 years, the state administration left the fund alone. Cerf, however, who came to Newark through a deal between Christie and Newark Mayor Ras Baraka, has demonstrated in previous court cases a strong animus against public employee unions—and he decided to ignore the fund, remove the current provider (GPP) and install Benecard. All of that announced in a letter released Dec. 30, the day before New Year’s Eve, with the schools closed and public business—and media attention– shut down.
Cerf used the excuse of the $75 million school budget shortfall to change providers. That shortfall was the fault of his predecessor, protégé, and hiree, former state superintendent Cami Anderson. Cerf claims hiring Benecard will save some $880,000.
Kessler clearly bought that argument. “The board is in serious financial trouble,” said Kessler, although he was talking about Cerf, not the board.
But the NTU and its SFBF members make another argument that gets to the core political issue: The Newark schools had previously agreed that, if the district wants to save money on benefits, it must go through an open bidding process. Cerf did not go through a bidding process. Norcross’s firm recommended Benecard and Cerf bought it.
Ryan DiClemente, the NTU’s lawyer, argued that, if Cerf really wanted to save money, he would go through an open bidding process. “If the intention was to save money, what’s a better way than go through the open bidding process required by the C.B.A.(collective bargaining agreement)? That never happened. They hired Conner Strong (Norcross’s company).”
The Newark school board has passed resolutions insisting on open bidding for items like health benefits—but Cerf has ignored the board. And Kessler said state law allows the hiring of firms—even politically connected firms—without bidding.
If Kessler sticks to his narrow view—that he will set aside the Cerf decision only if benefits are not “substantially similar”–then the NTU will have lost a major political battle. The union, already weakened by years of litigation and arbitrary state decisions, will have lost a fight to maintain its relevance among members.
It could face the same fate as the union representing school administrators. At the same time that Cerf chose his personal favorite prescription drug provider, he also imposed a financial settlement—without bargaining—on the City Association of School Administrators (CASA).
Although Baraka and Cerf have formed an alliance, some school leaders have expressed concern about the future. At one board meeting, member Antoinette Baskerville-Richardson, once an NTU member on the SFBF, wondered aloud whether Cerf wasn’t engaging in “union busting.”