The Supreme Court of New Jersey did not decide many employment cases this term, but the ones it did decide are significant. For instance, DePascale v. State of New Jersey, 211 N.J. 40 (2012),addressed one of the most politically charged and highly publicized issues of the year: whether statutory increases in the pension and health-care contributions required of justices and judges violated the “no- diminution” clause of the New Jersey Constitution. A divided court held that they did, in a majority opinion delivered jointly by Justices LaVecchia and Albin and Judge Wefing (temporarily assigned). Chief Justice Rabner recused, and Justice Patterson wrote a dissent that was joined in by Justice Hoens.

The Pension and Health Care Benefits Act (Chapter 78) was enacted into law on June 28, 2011. It is not directed specifically to members of the judiciary, but rather is applicable to all public employees and requires increased contributions to benefits. According to the majority opinion, over a seven-year period Chapter 78 would have increased required pension contributions of sitting justices and judges by more than 400 percent and increased health benefit contributions by more than 100 percent.

Article VI, section 6, paragraph 6 of the New Jersey Constitution provides that justices and judges “shall receive for their services such salaries as may be provided by law, which shall not be diminished during the term of their appointment” (the no-diminution clause). The issue in DePascale was whether Chapter 78 violated the no-diminution clause; i.e., whether increasing required contributions to benefits constituted a diminishment of judicial salaries. In answering that question, both the majority and the dissent engaged in an extensive analysis of the history and purpose of the no-diminution Clause, the intent of the framers of the 1947 constitution and decisions interpreting a parallel, but differently worded, provision of the United States Constitution (the compensation clause).

With regard to the purpose of the no-diminution clause, there was no apparent disagreement on the court. As the majority put it, the framers sought to protect the independence of the judiciary and ensure that it would remain a separate and equal — not subordinate — branch of government. But there the dissent and the majority parted company. For the majority, the use of the word “salary” in the no-diminution clause, rather than a more encompassing term, such as “compensation” or “emoluments,” was insignificant, in their view, the broadest possible construction of salary was intended and any decrease in remuneration to judges is barred. Expressed in very simple terms, their view is that the practical effect of Chapter 78 is what matters. Whether a diminution is accomplished indirectly by way of increased deductions for benefit contributions or directly by a direct deduction in annual salary is of no moment in their analysis.

In reaching that conclusion, the majority looked to the history of the no-diminution clause and traced its origin to the federal compensation clause, which provides that judges “shall, at stated times, received for their services a compensation, which shall not be diminished during their continuance on office.” New Jersey’s 1844 constitution (its second but the first enacted after ratification of the United States Constitution) echoed the compensation clause. The 1844 constitution provided that “justices of the supreme court and chancellor … shall, at stated times, received for their services a compensation which shall not be diminished during the term of their appointments.” In New Jersey’s 1947 constitution, however, the no-diminution clause was changed. No longer did it refer to “compensation,” but rather to “salary.” To the majority, the change was insignificant:

Although the term “salary” replaced “compensation” in the Clause as it reappeared in the Judicial Article of the 1947 Constitution, that was done without any intention to alter the protections afforded to the members of the judiciary under the 1844 Constitution. Nothing in the minutes of the 1947 Constitutional Convention supports the conclusion that a meaningful difference was intended by replacing “compensation” with “salary.”

To the majority, consistency of purpose in preserving the independence of the judiciary and protecting judicial officers from economic retaliation was overriding and the 1947 framers’ choice of words was not so.

Two other factors were of primary importance to the majority’s analysis. First, it is noted that until enactment of Chapter 78, no legislature had allowed a diminution of sitting judges’ remuneration when imposing a pension or health benefit contribution. Each time the legislature had imposed a pension contribution, it also enacted a corresponding judicial salary increase. Each increase in the health benefit contribution also coincided with an increase in judicial salaries. The majority viewed this as tacit recognition by the Legislature of constitutional limits on its power and its interpretation of the no-diminution clause. The Legislature carefully assured that no diminution in salary occurred. In each instance, the Legislature honored the no-diminution clause. Second, the majority rejected the idea that Chapter 78 was saved by the fact that it was generally applicable to public employees and not targeted at the judiciary. It found irrelevant federal precedent under the compensation clause, finding the imposition of general taxes on sitting judges to be constitutional and not an improper diminution. Perhaps in anticipation of attacks on its decision on the ground of self-interest, the majority added:

We can no more uphold a law that violates the Judicial Article of the Constitution than one that violates the right to free speech or freedom of the press or the right to due process and equal protection. A Court that cannot protect its own independence is not one that can be counted on to protect the fundamental rights of others in challenging times.

As a consequence, the majority held that: (1) all justices and judges appointed after enactment of Chapter 78 are subject to the increased pension and health-care contributions it requires; and (2) “As to justices and judges in service at the time of Chapter 78′s enactment, the deductions required by that law can be carved out of any future salary increase going forward, thus avoid the diminution prohibited by the Constitution.”

The dissent, of course, takes a different view, including a focus on the heavy burden traditionally borne by those seeking to invalidate a statute, the plain language of the no-diminution clause (including the 1947 change from “compensation” to “salary”) and the record of the 1947 constitutional convention. And, perhaps even more important for the coming terms of the court, the dissent gives us a glimpse into the voice of our newest justice, her clear writing and detailed analysis, and how scholarly and dignified debates among the members of the court on important issues may enhance its work.

Starting with the standard of review, the dissent notes that the “Legislature’s role in shaping policy compels an extraordinarily deferential standard of judicial review, born of the Framers’ respect for the relationship between legislators and the citizens who elect them.” Legislation is presumed to be constitutional and deference to the legislature is particularly appropriate in the field of economic regulation. As a consequence, in the view of the dissent, the appropriate burden on the plaintiff was to demonstrate, beyond a reasonable doubt, that the no-diminution clause was intended by its framers to preclude legislatively mandated increases in contributions for pension and health benefits in the course of a judicial term. The dissent found that standard had not been met, based both on the plain language of the constitutional provision and for extrinsic evidence of the framers’ intent.

With regard to the plain language, the dissent found that the term salary meant then, as it does now, the amount that is paid to an employee for his work per year, or per week or some other period. It found significant the fact that the broader of term of “compensation” was utilized elsewhere in the 1947 constitution, and that one such use reflected the framers’ understanding that salary was a component but not the entirety of a public employee’s total compensation. (“Any compensation for services or any fees received by any person by virtue of an appointive State office or position, in addition to the annual salary provided for the office… .”) The dissent also found significant the change in 1947 from “compensation” to “salary” and found that contrary to the majority’s analysis, standard rules of construction required that the change not be presumptively ignored.

The dissent also found that even if the meaning of the plain language were not clear, extrinsic evidence of intent from the constitutional convention failed to support the majority’s expansive interpretation of “salary.” First, it noted the absence of any suggestion that pension and health benefits should be considered salaries. Second, it noted the lack of discussion of the change from “compensation” to “salary.” And finally, it noted the lack of suggestion in either witness testimony or drafters’ statements that they intended to impose constitutional restraints on anything other than statutorily-established salaries. To the contrary, the dissent includes extensive discussion of a proposal by then-Chief Justice Thomas Brogan to create a constitutional right to pensions for judges and justices. Nathan Jacobs (who of course later became an associate justice of the Supreme Court) opposed that proposal for reasons that might resonate with some today:

Some of us may well believe in full pensions as a matter of legislative authority. I see no place whatever for it in the Constitution, and it relates again to the principle of flexibility. Could you go back to your people in depression days and justify an obligation to pay judges $18,000 a year on pension? Think about it! A constitutional requirement is for all time, until further constitutional change. Depressions do not change it; things that you fail to foresee now do not change it. It’s there.

The proposed amendment to guarantee pensions failed.

The dissent also disagreed with two other bases of the majority opinion. First, it found no relevance in prior legislative action with regard to judicial increase. In its view, the legislature’s prior economic support for the judiciary did not constitute a tacit recognition of a constitutional obligation. Second, it found no support for the majority opinion in federal law, because of, among other things, the difference between the language of the state (salary) and federal (compensation) provisions. For these and other reasons, the dissenters would have upheld Chapter 78. Now, of course, the question will be back in the hands of the voters in the fall.

Laches Did Not Apply to Employment Action at Law

In Fox v. Millman, 210 N.J. 401 (2012), the court addressed whether the doctrine of laches can bar an action at law filed within the limitations period and the extent of an employer’s obligation to ensure that its newly hired employees are not breaching postemployment restrictions on the use of confidential and proprietary information of their prior employers.

The essential allegations in Fox were that an employer unlawfully benefited when its new employee used a customer list the employee claimed to have developed on her own and that the former employer and/or its successor intentionally delayed bringing suit on their alleged claim. A unanimous court held that, unlike with cases brought in equity, the doctrine of laches could not be used to shorten the time to file a claim at law. The court also declined to impose upon employers an affirmative duty to verify newly hired employees’ representations about the source or ownership of customer lists.

Defendant Jean Millman worked as a sales representative at Target Industries, a manufacturer and distributor of industrial plastic bags. Millman allegedly signed a confidentiality agreement when hired by Target in 1988 but denied being bound to any such agreement. Target subsequently filed for Chapter 11 bankruptcy in 1999, with plaintiff Thomas Fox purchasing all of its assets, including Target’s customer lists, price lists, and other confidential and proprietary information and trade secrets.

Believing that she disparaged the company and sold products on behalf of competitors, Target terminated Millman’s employment on September 7, 2000. The day after her termination, Target’s bankruptcy trustee sent Millman a cease-and-desist letter, warned her about her postemployment restrictions and asked her to return the company’s files and equipment. Three days later, defendant Polymer Packaging Inc. hired Millman as a sales representative, knowing that she previously worked for Target. Defendants Larry and William Lanham own Polymer, which also distributes industrial plastic bags.

Although the Lanhams asked Millman whether she was subject to the terms of a confidentiality agreement and/or noncompete clause, she assured them that she was not. The Lanhams did not independently verify Millman’s assertion. Millman provided Polymer with a list of customers, describing it as a substantial customer base that she had developed over the years, implying that she had generated the list on her own. The Lanhams did not undertake any further inquiry about the genesis of the customer list. Over the course of approximately four years, Millman sold products for Polymer to former Target customers.

The plaintiffs filed a timely complaint against Millman, later adding Polymer and the Lanhams as defendants. The complaint asserted claims of misappropriation of proprietary and confidential information; tortious interference with business relations and prospective economic advantage; unfair competition; unjust enrichment; conversion; breach of the duty of loyalty; and conspiracy.

The parties cross-moved for summary judgment on the claims against Polymer and the Lanhams. The plaintiffs argued that because the customer list was proprietary, confidential material, the defendants must have been aware that it was Target’s property. The trial court denied the motion, concluding that there were genuine issues of material fact concerning what the defendants knew or should have known about the origin of the customer list and whether the list was confidential or proprietary.

In their motion, the Lanhams asserted the equitable doctrine of laches as an affirmative defense, pointing to evidence that the plaintiffs knew of a potential claim as early as September 2000. The defendants also contended that the plaintiffs made no effort to discover who Millman’s new employer was, resulting in unfair, unreasonable and unduly prejudicial delay, exposing the defendants to greater liability. Despite filing a timely complaint within the six-year statute of limitations under N.J.S.A. 2A:14-1, the trial court concluded that the defendants could invoke a laches defense. Nevertheless, the trial court denied the defendants’ motion for summary judgment, concluding that it was for a jury to decide whether the defendants acted in good faith in order to permit the proper application of the laches doctrine.

The jury found that the plaintiffs unreasonably delayed filing their lawsuit, causing prejudice to the defendants.Accordingly, the trial court concluded that the defendants proved their entitlement to application of the doctrine of laches and dismissed the claims with prejudice. The Appellate Division affirmed. The Supreme Court reversed and remanded the matter for a new trial.

The Supreme Court began its analysis by noting the rationale for enacting and upholding statutes of limitations, including avoidance of stale claims and certainty. The court noted that, of course, its decisions have not always advanced those goals as the court has not always applied statutes of limitations strictly. Rather, the court has created exceptions when it found them warranted — most notably the discovery rule and the continuing violation doctrine — despite their possible impact on both certainty and the avoidance of stale claims. However, the court noted these exceptions extended the time to pursue a cause of action, in contrast to the present appeal asking the question whether it is appropriate to use an equitable remedy on a claim at law to shorten a fixed statute of limitations, otherwise timely filed. The court concluded that such an application of the doctrine of laches is not appropriate.

In so holding, the court noted that laches is a defense traditionally limited to suits brought in equity and that the doctrine does not generally apply to suits brought at law. Quoting from the United States Supreme Court, the Fox court stated: “in an action at law courts are bound by the literalism of the statute, but in equity the question of unreasonable delay within the statutory limitation is still open.” The court also explained that the defendants’ reliance on Lavin v. Hackensack Bd. of Educ., 90 N.J. 145, (1982), suggesting that a laches defense generally is available in a suit at law, was misplaced. In Lavin, a laches defense was available for a claim at law with no governing statute of limitations. The court in Fox specifically limited Lavin’s holding to those particular circumstances. The court further explained that laches could shorten an otherwise permissible period for initiation of litigation, only in the “rarest of circumstances and only overwhelmingly equitable concerns” would allow for that result. The court made clear that where the legislature sets forth a defined statute of limitations, such as the six-year limitations period on the plaintiffs’ claims, the equitable defense of laches would not be permitted to shorten the time in which a party may file a claim. The court did note, however, that the defendants had other remedies, including the doctrine of avoidable consequences, to mitigate their increased potential damages exposure due to the plaintiffs’ delay in filing suit.

Next, the court addressed the plaintiffs’ argument that Target’s customer list was confidential as a matter of law, rejecting the plaintiffs’ reliance on Lamorte Burns & Co. v. Walters, 167 N.J. 285 (2001). In Lamorte, the defendants accused of taking customer lists (which “went beyond the mere names of plaintiff’s clients”) were the plaintiff’s former employees. The Fox court noted that in that instance “there could be no doubt that the employees were aware that the lists that they had taken were the property of their former employer.” The information at issue had been provided to them by their former employer, in the course of employment and for the sole purpose of servicing their employer’s customers. In Fox, however, the plaintiffs sought redress not from a former employee, but from the former employee’s subsequent employer. In this context, the court concluded that a genuine issue of material fact existed as to the defendants’ awareness that Millman’s list was Target’s proprietary information.

The court also refused to accept the plaintiffs’ proposed jury instructions, which would have imposed an affirmative duty of inquiry on employers, independent of the information provided by new employees, as to the source of customer lists. The court found no reason to impose such a new duty of inquiry on employers.

Employers do not have a non-delegable duty to protect others from their employees’ intentional wrongs.

In Davis v. Devereux Foundation, 209 N.J. 269 (2012), the court declined to expand employer liability for the intentional wrongs of its employees. The employee defendant was a nonprofit residential facility in which a resident with severe autism and developmental disabilities was injured by a criminal act of a facility employee. The court reaffirmed the duty of due care imposed owned by caregivers with in loco parentis responsibilities to persons with developmental disabilities and rejected the plaintiff’s assertion that residential facilities should be charged with a nondelegable duty to protect their disabled residents from the intentional acts of its employees.

The plaintiff’s son, Roland Davis, was a resident at the defendant’s Devereux New Jersey Center for Autism facility. Davis was diagnosed with autism, mental retardation, pervasive developmental disorder and attention deficit hyperactivity disorder. Defendant Devereux is a national charitable foundation whose resident counselors provide disabled clients, like Davis, with the care, supervision and assistance with their daily routine that they require. Devereux has a protocol whereby all prospective resident counselors undergo a detailed screening process before they are hired. Devereux followed this protocol when it hired Charlene McClain as a resident counselor in 2002, and prior to the events of Oct. 9, 2004, which formed the basis of the lawsuit, McClain had no criminal record or prior history of violence.

Davis displayed a history of aggression toward McClain, including two altercations that took place days before McClain’s criminal conduct. On Oct. 9, 2004, McClain was assigned as Davis’s resident counselor for the day. Early that morning, as Davis got out of bed, McClain scalded him with a cup of boiling water that she had heated up in the microwave. McClain explained that she did this because she was “just mad” about the recent murder of her boyfriend. McClain was convicted of, and incarcerated for, her assault on Davis. Vandella Davis, Roland Davis’s mother and guardian ad litem, filed suit against Devereux, its New Jersey affiliate and McClain on a theory of negligence. The plaintiff urged the trial court to impose a nondelegable duty upon Devereux to protect its residents from the intentional acts of its employees. The plaintiff further contended that McClain was acting within the scope of her employment when she assaulted Davis, and that Devereux should be held liable under the theory of respondeat superior.

Granting the defendant’s motion for summary judgment, the trial court ruled that Devereux did not owe Davis a nondelegable duty. The Appellate Division reversed the trial court’s grant of summary judgment, agreeing on the duty of care applied below, but finding that a reasonable jury could conclude that the employee acted within the scope of her employment. A divided Supreme Court affirmed in part and reversed in part. Writing for the majority, Justice Patterson agreed with the Appellate Division’s refusal to impose a nondelegable duty on the defendant. However, the majority went further and found that respondent superior liability did not apply within because no rational fact finder could find that the employee’s criminal conduct was within the scope of her employment.

Justice Patterson began the majority’s analysis by noting that the court “has consistently applied traditional principles of due care and foreseeability to cases involving in loco parentis relationships, rather than adopting a ‘non-delegable’ or absolute duty such as that urged by plaintiff here.” The court applied the four-part test adopted in Goldberg v. Hous. Auth. of Newark, 38 N.J. 578 (1962) and further developed in Hopkins v. Fox & Lazo Realtors, 132 N.J. 426 (1993), to consider whether the plaintiff’s proposed heightened nondelegable duty of care was appropriate. The majority concluded that the imposition of a nondelegable duty on Devereux was not justified by: (1) the relationship among the parties; (2) the nature of the attendant risk; (3) the opportunity and ability to exercise care; or (4) the public interest.

First, the court noted that the relationship among residents, institutions and employees is already addressed in statutes, regulations and at common law. The court cited a number of requirements already imposed on residential facilities caring for the developmentally disabled, including mandatory background checks of prospective employees and reporting requirements for suspected incidents of abuse. Second, the court found that it would be unfair to impose a higher burden on residential facilities to prevent unforeseeable risks like the criminal assault in this case. The third factor — the opportunity and ability to exercise care — also failed to provide support for the plaintiff’s claim. Notably, there was no evidence that McClain had a potential for violence that Devereux ignored. To the contrary, Devereux abided by its hiring, screening and training practices. Finally, the court surveyed New Jersey’s and other states’ examination of the public interest served by the proposed nondelegable duty. The court concluded that New Jersey’s current state of the law is consistent with the decisions of almost every jurisdiction that has addressed this question.

Finally, the court held that McClain’s criminal act of scalding Roland Davis with hot water was outside the scope of her employment, excusing Devereux from respondent superior liability. In distinguishing the facts from a line of cases that found employees’ violent acts to be within the scope of their employment, the court explained that in the other cases, the employee’s responsibilities included enforcement of the employer’s rules. In contrast, the incident in Davis did not begin with a thwarted effort by McClain to enforce Devereux’s rules. Rather, McClain admitted to pouring the hot water on Davis because she was “just mad” about the murder of her boyfriend. Accordingly, the Supreme Court reinstated the trial court’s grant of summary judgment for Devereux.

Justice Hoens issued a dissent, in which she was joined by Justice Long. The dissent would have imposed a nondelegable duty on the defendant. In the dissent’s view, the majority was apprehensive to reach this conclusion because they mistakenly equated a nondelegable duty with that of absolute liability. The dissent also disagreed with the majority’s application of respondeat superiorprinciples, arguing that the majority ignored significant facts in the record which a jury might find sufficient to demonstrate that McClain’s act was a misguided effort to serve Devereux. For example, the dissent observed that McClain initially armed herself with a cup of scalding water in anticipation that Davis would attack her. In the dissent’s view, there was a triable question as to whether or not this served the interest of Devereux.

Regulations Limiting School Administrator Benefits Upheld

In New Jersey Ass’n of Sch. Adm’rs v. Schundler, No. 066789 (N.J. May 3, 2012), the Supreme Court considered whether regulations limiting certain benefits for school administrators and capping sick leave payments are permissible. A unanimous court upheld the regulations.

In response to concern about rising property taxes, the New Jersey Legislature in 2007 passed a series of reforms aimed at lowering expenses, including excessive benefits that high-level school administrators were receiving. (The average salary for public school administrators had risen more than 30 percent from 1997 to 2004, more than twice the average increase for teacher salaries.) After enactment of the statute, the commissioner of education issued regulations implementing the new laws, including limiting certain benefits in new contracts for high-level administrators, and capping payments for accumulated unused sick leave at $15,000.

The New Jersey Association of School Administrators, together with several individual plaintiffs, filed suit in the United States District Court for the District of New Jersey on Aug. 14, 2008, challenging the regulations. The district court declined jurisdiction in order to permit the state courts to determine important questions of state law under the doctrine known as Burford abstention. (Citing Burford v. Sun Oil Co., 319 U.S. 315 (1943).) Thereafter, on Dec. 23, 2008, the association filed an appeal from a final agency decision in the Appellate Division. The Appellate Division invalidated the regulations in part, finding that they “deprive[d] certain administrators of vested rights and … reduce[d] the compensation of tenured assistant superintendents.” Specifically, the division concluded that the regulations improperly reduced the compensation of administrators in violation of the tenure statutes, and could act to retroactively deprive administrators of payment for unused sick leave.

In the Supreme Court, the state focused its arguments on the regulation capping sick leave and the effect of the tenure statue on the challenged regulations. It argued that the Appellate Division incorrectly held that the regulation capping sick leave retroactively bars payment for accumulated sick leave in excess of $15,000. The State also argued that the regulation properly limits payment to an employee’s retirement and precludes payment to an employee’s estate or beneficiaries if the employee dies before retirement.

The State also argued that the Appellate Division erred in holding that the tenure laws prevent application of the regulations to tenured assistant superintendents. It argued that, absent constitutional limitations, the legislature can modify conditions of public employment. It also contended that the Appellate Division incorrectly adopted an expansive definition of “compensation” under the tenure law which would prevent the legislature from curing abuses.

The court began its analysis with the longstanding rule that judicial review of agency regulations begins with a presumption that the regulations are both valid and reasonable. The party challenging a regulation has the burden of proving that the agency was arbitrary, capricious or unreasonable. The court further noted that in view of an agency’s special expertise to enact technical regulations and evaluate issues that rulemaking invites, courts afford an agency great deference in reviewing its adoption of rules implementing the laws for which it is responsible. Although a court may not substitute its judgment for an agency’s, it must invalidate a regulation that is inconsistent with the statute it purports to interpret. The court’s obligation is to determine and give effect to the Legislature’s intent.

The court then proceeded to examine the contested regulations against this standard of review, noting at the outset the crucial point that “the regulations apply only to new contracts and amendments for superintendents, assistant superintendents, and other high-level officials. The new rules do not affect existing agreements or alter terms of employment retroactively. Likewise, the statute capping sick leave payments applies purely prospectively.”

Looking first to the statute and regulation capping sick leave, the court held that the Appellate Division struck the regulation based upon a mistaken reading of the enabling statute. The statute sets a $15,000 limit for payout of unused sick leave, but has two exceptions. Employees who accumulated more than $15,000 as of the statute’s enactment and employees who would surpass the cap under an existing collective bargaining agreement or contract would be entitled to the greater of the amount so accumulated or $15,000. Thus finding the statute and the tracking regulation to be prospective only, the court held that they were valid and did not interfere with any contract or property rights.

The court similarly upheld the regulation’s limitation on payment to employees actually retiring. Looking to the plain language of the statute, which provides for payment “only at the time of retirement,” the court found that the corresponding regulations which precluded payment to a deceased employee’s beneficiary were neither arbitrary nor capacious. The court also rejected the plaintiff’s claim that the regulations deprived them of property rights because, they claimed, accrued sick leave is a property right that passes to the estate of an official who dies before retirement. Again the court found the prospective-only nature of the statute and regulation controlling and rejected the property rights claim.

The court next addressed the issue of whether the tenure statutes barred the regulations. The tenure statute provides that tenured school employees, which could include assistant superintendents covered by the regulations, “shall not be dismissed or reduced in compensation except for inefficiency, incapacity, or conduct unbecoming such a teaching staff member or other just cause.” (Citing N.J.S.A. 18A:2805.) However, the courts “have long recognized [] that absent constitutional restriction, the Legislature may modify terms and conditions of public service.” (Citing Spina v. Consolidated Police and Firemen’s Pension Fund Commission, 41 N.J. 391 (1964).) Reading the tenure statutes and the regulations together, the court concluded that the new regulations were prospective and did not present constitutional concerns.

Finding that the cost-saving regulations did not act to deprive the school administrators of a protected property right or infringe on the protections of the tenure statutes, the court upheld the regulations, reversing the Appellate Division. The court established that the Legislature may modify terms and conditions for future contracts for other public officials, including limiting leave payouts, without raising constitutional concerns. •