N.J. Supreme Court Rules that Legislature Has the Right to Cap Unused Sick Leave Payouts

On May 3^rd, the N.J. Supreme Court ruled that the state legislature has the right to cap unused sick leave payouts for top administrators in local school districts. At issue was the constitutionality of N.J.S.A. 18A:30-3.5 and later regulations that capped accumulated sick leave payment at $15,000 for school administrators.  N.J. Ass’n of Sch. Adm’rs v. Bret Schundler (A-98) (066789). The Supreme Court’s ruling overturned a lower court’s finding that the sick leave cap violated the property rights of the administrators who had accumulated sick leave worth more than $15,000.  The Supreme Court concluded that the legislature has the authority to modify terms and conditions for future contracts for public employment without raising constitutional concerns. The Supreme Court’s decision leaves the door open for the legislature to cap leave payouts for all public sector employees.  We will continue to monitor any related developments on this blog site. For further information on this topic, please contact Joseph M. Hannon, Esq., jhannon@genovaburns.com or Phillip M. Rofsky, Esq., profsky@genovaburns.com in the Labor Law Practice Group.