When it comes to public employment in New Jersey, the terms and conditions of employment are not merely a matter of private contract. Statutory law often governs public employment and supersedes or invalidates any contractual arrangement to the contrary. Such was the case in the recent published decision in Carelli v. Borough of Caldwell, __ N.J. Super. __ (App. Div. Nov. 10, 2022). The Appellate Division voided the clause in the borough administrator’s employment agreement with the borough that stated if he was terminated, he would get severance of one month’s salary for each year of service. The court explained that a state statute, N.J.S.A. 40A:9-138, controlled and set the amount of severance to which a terminated borough administrator like the plaintiff was entitled to. That is, a borough administrator removed from his position is entitled to severance of three months’ salary; no more and no less. Because the state statute set the amount of severance for borough administrators, the court voided the contractual severance provision and granted summary judgment to Caldwell dismissing the plaintiff’s complaint seeking to recover his contractual severance.
The Carelli case serves as a textbook example of public employment statutory law in action. It is a cautionary tale about ascertaining the bounds of employment terms and conditions for public officials. Public employment is not private employment. Public employment statutes safeguard the public fisc and prevent the kind of overreaching attempted by the public employee-plaintiff in Carelli.
Mandelbaum Barrett PC provides both public and private employment counseling to individuals, businesses, and public entities.