In City of Allentown, the Pennsylvania Supreme Court ordered the City to implement an interest arbitration award which contained (among modifications to wages, sick leave, vacation, pension and overtime) a minimum staffing requirement of 25 firefighters per shift.

As every public sector employer and practitioner knows, a municipality has no obligation to bargain with a union representing police officers or firefighters over inherent managerial policy (overall budget, standards of service, organizational structure, selection and direction of employees).  I mean, it says so, right there in the Pennsylvania Labor Relations Act!  The PLRA is forever linked to Act 111, which makes it mandatory for municipalities to bargain with police and fire unions over the terms and conditions of employment (compensation, hours, working conditions, other benefits).

Act 111 also provides the mechanism for municipalities and unions to submit their disputes to binding interest arbitration, but only those disputes which concern mandatory subjects of bargaining.  An arbitration panel that issues an award on a topic that is a managerial prerogative exceeds its powers.

But, what happens when a dispute concerns both a mandatory subject (i.e. it is rationally related to the terms and conditions of employment) and a managerial policy (i.e., budget or direction of personnel)?  Well, then the question is whether bargaining with the union over the issue would unduly infringe on the municipality’s essential managerial responsibilities.  That is the analysis that the Supreme Court applied to the minimum staffing dispute facing the City of Allentown and the International Association of Fire Fighters Local 302.

Prior case law left us with this:  the total number of firefighters that a municipality employs is a matter of managerial prerogative and a municipality need not bargain over that number.  An arbitration award that mandates a total complement number is illegal.  Prior case law also left us with this:  the number of firefighters actually assigned to a particular station or to a piece of fire equipment is a mandatory subject of bargaining, as it is rationally related to the safety of firefighters, i.e. a working condition.  So, an arbitration award that mandates the minimum crew on each rig is perfectly legal.

Confused?  Citing safety concerns and relying heavily on arbitration testimony that increased staffing leads to a safer working environment and a decrease in injuries and physical stress, the Court concluded that minimum staffing had a “direct and significant impact on firefighter health and safety” and did not unduly infringe on the City’s financial burdens.

More directly, the Court (currently comprised of 1 elected Republican, 5 elected Democrats and 1 Republican appointed by a Democrat Governor) did little more than pay lip service to how minimum staffing leads to increased overtime, or how increased overtime leads to increased pension expenses, or how increased pension expenses lead to unfunded pension liabilities, or how unfunded pension liabilities are crippling so many municipalities across the Commonwealth.

So what now? It appears that the overall complement is still a decision left for the public employer; however, once that number is set, then the parties must negotiate regarding the number of employees assigned to each shift.  Certainly, this leaves many questions unanswered.  And certainly, the impact on municipal budgets, already strained and struggling, will be significant.

As if Counties could forget that Court employees are just a little different, the Commonwealth Court of Pennsylvania sent us another reminder when the Court held that the Pennsylvania Whistleblower Law does not apply to judicial employees.

Gregory Thomas was a Juvenile Probation Officer serving with the Washington County Court of Common Pleas until October 2014, at which time he was allegedly forced to quit. Prior to his resignation, Thomas had been a participant in an investigation regarding the misappropriation of funds by the Juvenile Probation Office. During the investigation, it was revealed that the Chief of the Juvenile Probation Office had directed Thomas to email the County’s purchasing office in July 2014 to state that a mixed martial arts training session had taken place on June 6 and 7 in partial satisfaction of the state’s 40-hour annual training requirement. The email sought, and was granted, funding for the training. No such training actually occurred, and Thomas confirmed to the investigating detectives that he had not attended this training; he alleges that he had been told by the Chief Probation Officer to tell the detectives otherwise.

The day after his interview with the detectives, Thomas was notified that he needed to resign or he would be fired for reasons not related to the investigation. Thomas brought suit against the County, Court Administration, and others alleging that he reported wrongdoing and misappropriation of funds when he spoke to the detectives, and therefore his forced resignation violated the Pennsylvania Whistleblower Law. The Defendants contended that the Whistleblower Law did not apply to judicial employees because doing so would violate the separation of powers doctrine. The trial Court granted the Defendants’ Preliminary Objections and entered judgment in their favor, finding that judicial employees are not subject to the Whistleblower Law.

In reviewing the case, the Commonwealth Court noted that the statute itself does not reference the Judiciary in the definition of “employer” or “public body,” and that prior case law established that the Legislature did not intend to include the Judiciary therein or it would violate their constitutional authority to hire, fire and supervise their employees. As such, the only way that the statute could apply was if the Court voluntarily waived sovereign immunity. Although Thomas argued that the Court had done so because the Code of Conduct for Judicial employees issued by the Administrative Offices of the Pennsylvania Courts specifically referenced the Pennsylvania Whistleblower Law, the Court disagreed that “the mere description of the Whistleblower Law in a Note…demonstrates the Court’s intent to bring the Judiciary under the scope of that Law.”

In particular, the Court noted that the reference to the Whistleblower Law was found in that section of the Code of Conduct related to the Duty to Report, which requires employees to report to their immediate supervisor any attempt to induce them to violate the Code of Conduct, and that the reference was a mere description of the Law. Nothing in the reference specifically states that the Law is applicable to the Judiciary, or otherwise indicates the Court’s intent to make the Law applicable. The Commonwealth Court stated that, considering the “vigilance” and “care” that the Court takes to protect its independence and the separation of powers, more than a general description of a legislative enactment would be required to demonstrate an intent to make the Law applicable to it. Because the Law did not apply to the Courts, the Preliminary Objections were properly sustained and judgement entered for the Defendants.

The Thomas v. Grimm case should serve as a reminder that there are special considerations when dealing with HR issues involving Court employees – and the rules for hiring, firing and supervision may be slightly different. A good County HR Department must be careful, therefore, not to overstate the rights and protections of Court employees while also advocating for the County’s position on an employment decision and respecting the separate role of the Courts. Aside from the specific reminder about the unique Court-County relationship, Thomas should also serve as a reminder to all public sector employers of the unique position they and their employees are in when it comes to the employment relationship, where they must be careful to navigate their role as a public service entity providing statutory and constitutional resources to its constituents while also respecting the constitutional and other legal rights of employees.

Public employers in Pennsylvania beware: if you implement an attendance policy designed to get your employees to show up for work, you may commit an unfair labor practice!  If your employees are represented by a labor union, and your policy outlines disciplinary action, then you must bargain with the appropriate union before issuing discipline under the policy.  The employer in Chester Upland Sch. Dist. v. Pa. Labor Relations Bd., learned that the hard way.

In that case, the public school district unilaterally adopted a new attendance and punctuality policy.  The new policy applied progressive discipline to employees who reached a certain number of absences due to personal illness.  The updated policy was adopted shortly after the expiration of a collective bargaining agreement between the district and its employees.

Upon learning of the change, the employees’ union filed an unfair labor practice charge, arguing that the district committed an unfair labor practice by adopting the policy without engaging in collective bargaining.  The union pointed to the prior collective bargaining agreement’s sick leave provisions, which provided each employee with eleven sick days per school year and was silent on discipline.  The district countered that the updated policy did not impose a new source of discipline; employees were always subject to discipline for attendance violations.  Rather, according to the employer, the new policy simply advised employees as to how attendance issues were tracked for disciplinary purposes.

The Pennsylvania Labor Relations Board rejected the employer’s arguments, finding that the district committed an unfair labor practice by unilaterally changing the terms and conditions of employment through adopting the new attendance policy.  The district appealed to the Commonwealth Court, which upheld the Board’s determination.  The Court provided several reasons for doing so.

First, it recognized the PLRB’s long history of treating sick leave policies as mandatory subjects of collective bargaining.  Second, the Commonwealth Court held that new policy did not simply explain how the district tracked absences for disciplinary purposes; instead, it specifically imposed progressive discipline for using sick days.  An employer’s unilateral changing of terms and conditions of employment, explained the Court, is an unfair labor practice regardless of whether it happens during the term of a CBA, following the expiration of a CBA or during the course of negotiations.  Moreover, the new policy directly conflicted with the express terms of the collective bargaining agreement, which did not provide for disciplinary action.

This case serves as an important reminder to public employers in Pennsylvania that when adopting new policies, a careful examination of the appropriate collective bargaining agreements is required.  Before implementing new rules that can result in disciplinary action, negotiation is typically required.  Adopting new disciplinary rules without engaging in collective bargaining will not withstand the scrutiny of the PLRB or Pennsylvania courts.

For government employers, disciplining and terminating employees can be especially difficult. Not only does the public employer face the same challenges in complying with the standard alphabet soup of employment laws that private employers do, including the ADA, ADEA, FMLA, Title VII, etc., they also have the complicated task of considering the application of an employee’s Constitutional rights in making employment decisions. Unfortunately, the protections provided by the constitution to government employees don’t rely on the kinds of “immutable” traits often in issue in the alphabet soup context, which means that determining when constitutional rights could be violated is particularly troublesome.

Recently, in Heffernan v. City of Paterson, the United States Supreme Court brought the analysis applicable to First Amendment retaliation claims closer to your typical alphabet soup case in one small way – focusing on the employer’s intent. In a typical discrimination context, the employer’s intent is key when examining the reason given for the action and the circumstantial evidence that may call that stated reason into question. In short, the question is: was it the employer’s intent to discriminate in disciplining an employee, or was it really the employee’s violation of an employer policy?

In the First Amendment context, employer intent is usually irrelevant or assumed; the focus instead is on whether the speech or activity is personal or on a matter of public interest, whether the employee acted as a citizen or an employee, and how the speech or activity could harm the government’s interests. Heffernan, however, presented the unique situation where the employee contended he didn’t intend to speak or act at all, but the employer punished him for its perception that he had. The Court therefore faced the following question: whose intent is more significant in the constitutional rights context? The Heffernan Court found that it is the employer’s intentions that are critical to determining whether there has been a violation of the employee’s rights.

In reaching this decision, the Court considered the following facts: Jeffrey Heffernan was employed as a police officer for the City of Paterson in 2005 under Chief of Police James Wittig. Both the Chief and Heffernan’s direct supervisor had  been appointed to their positions by the Mayor, who was running for reelection. During the campaign, Heffernan’s colleagues spotted him at campaign headquarters talking with campaign workers and holding a campaign sign for the Mayor’s opponent, who was a known friend of Heffernan. When word reached his supervisors, Heffernan was demoted from a detective position to a patrol officer position, and given an undesirable patrol post, allegedly to punish his involvement in the opposition’s campaign.  Heffernan denied being involved in the campaign, and denied supporting the candidate, stating that he was only picking the sign up for his mother, who was bedridden and could not do it for herself.

In response to his demotion, Heffernan filed a lawsuit against the City contending that he had been demoted because the City believed he engaged in conduct that constituted protected activity, even though he denied that he had intended to speak or act.

Prior case law is very clear that government employers are prohibited from making an employment decision because an employee supports a particular political candidate. However, Heffernan was contending that he didn’t actually support the oppositional candidate, but the City mistakenly believed he did. The City’s position in the litigation was that, since he hadn’t intended to engage in protected activity, his activity wasn’t protected…and its demotion decision could therefore only violate his rights if in fact he actively supported the candidate.

Ultimately, the Court concluded that “the government’s reason for demoting Heffernan is what counts…When an employer demotes an employee out of a desire to prevent the employee from engaging in political activity that the First Amendment protects (even if the employee did not intend to engage in that activity), the employee is entitled to challenge that unlawful action under the First Amendment…” Whether the employer has correctly or incorrectly deduced the employee’s motives in engaging in particular behavior, the Court opined that the same constitutional harm would result – an employee would be demoted or terminated for appearing to engage in protected activity, thereby discouraging other employees from engaging in what should be protected activity. Because the harm would result regardless of the accuracy of the employer’s belief, the employer’s reason for the employment action must govern in determining if a First Amendment cause of action and violation exists.

Unfortunately for Heffernan, his fight with the City will continue on, as the Supreme Court did not reach the ultimate question of whether his rights had been violated. To the contrary, the Court’s decision remanded the case back to the trial court to determine whether or not Heffernan’s demotion occurred pursuant to an existing neutral policy prohibiting police officers from overt involvement in any political campaign, and whether such a policy complies with constitutional standards generally.

The immediate take-away for government employers and elected officials (and the HR personnel who love them), in light of the Heffernan decision should be on the reinforcement of what we know already from other employment discrimination cases: we must examine the reason for an employment decision before it is made to ensure there is  no protected classification or protected activity motivating the decision. Even if the employer is  wrong about what the employee intended by his actions, a decision motivated by an intent to punish what would otherwise be protected activity could violate the constitution.

Recently, the Pennsylvania Labor Relations Board (PLRB) issued a Final Order indicating that members of a volunteer fire company which provided coverage to a local borough were actually Borough employees.   In doing so, both the hearing examiner who issued the Proposed Decision and Order and the Board determined that it did not matter that the firefighters were “appointed” and not “hired” by the borough, and further opined that the relationship of providing services for wages was an element of an employer-employee relationship.

The fire department was a non-profit corporation, with its building and most of its equipment and apparatus owned by the Borough.  In 1999, the Borough’s council adopted an ordinance establishing a fire department and officer ranks, providing for vehicles and equipment, and reserving the right for council to establish binding rules, regulations and Standard Operating Procedures (SOPs).  The ordinance further indicated that the Borough Council would appoint the officers, require the officers to take the same oath that was required for Borough officials, and allowed the Fire Chief (an employee of the Borough) to issue orders and an SOP manual.

In its review, the Board found that the Borough’s 2012 and 2013 budgets contained a number of line items for the Fire Department (and later included a fire services tax), and further noted that when an expense was incurred, it was paid directly by the Borough.  Significantly, volunteers were paid an hourly rate by the Borough, which had the power to set and approve the hourly rates plus incentives for further training.  The Board further noted that the Secretary of the Borough ran the day-to-day operations of the department (including scheduling), that the Borough had to authorize any overtime, and that the firefighters submitted time cards and received W-2s from the Borough.  Additionally, personnel matters, including disciplinary action, were handled by the Fire Chief.  Challenged disciplinary matters could be taken to the Borough Manager.

FIREFIGHTER HELMET-BlankBased upon the above information, the hearing examiner determined that the officers were actually employees and not volunteers.  The Borough did not challenge the findings that it controlled the wages, hours, or working conditions of the firefighters- all considered to be evidence of an employer-employee relationship- but did file exceptions on the basis of the hearing examiner’s finding regarding discipline.  Upon review, the Board found that because the Fire Chief, as an employee of the Borough, acted in the interest of his employer, the Borough “exercised control over disciplinary matters.”  The Borough made several other arguments, including that the hearing examiner’s findings would mean that the Borough was in violation of civil service and veterans preference laws.  However, the Board ultimately found no error in the examiner’s ruling and made the order final.

The order has been appealed to the Commonwealth Court, with support from both the Pennsylvania State Association of Township Supervisors and the Pennsylvania State Association of Boroughs.  If the Court agrees with the PLRB, this will have a huge impact on municipalities which rely on the services of volunteer fire companies but may not have the financial ability to absorb these volunteers and the costs that come along with them being declared employees of the municipalities.  This is definitely one to watch.

Yeah, I know, crazy right? Here is the story. Apparently the Union did not think so. When the American Federation of State, County and Municipal Employees ("Union") and the City of Philadelphia ("City") could not reach terms on a new collective bargaining agreement, they submitted the dispute to binding interest arbitration.

The Union was seeking, among other things, 8 percent annual wage increases! The City countered that it simply did not have the money to fund the Union’s demands. The Union argued that the City’s financial health was irrelevant. Huh? How can you pay for something if you don’t have any money?

The Union’s argument was essentially – cut programs, raise taxes, lay off other workers we don’t care; how you pay for our 8 percent annual pay increases is your problem not ours! Insane, right?

Thankfully, the arbitration panel rejected the Union’s argument and determined that it was appropriate to consider the City’s ability to pay. However, the Union was undeterred. The Union petitioned the court to vacate the arbitration decision, arguing that the panel should not have considered the financial health of the City when rejecting their hefty wage increases. Thankfully, the court disagreed.

The court concluded that the Union’s arguments lacked merit, and that it was appropriate for the arbitration panel to consider ability to pay when making decisions regarding wages and other compensation related items.

Thankfully, the arbitration panel and the court brought some sanity to what seemed like an insane dispute. Ability to pay is obviously highly relevant to consideration of pay and benefit demands. Public employers are facing increasing budget constraints these days and are often on the brink of distressed status. When evaluating union demands, public employers must consider their ability to pay and when appropriate explain to the union early and often that the budget simply cannot tolerate increased expenses. Where appropriate, lay the foundation for demonstrating the financial inability to meet the union’s demands.

This post was contributed by Gina E. McAndrew, an Associate in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Scranton, Pennsylvania.

While the labor and employment law world is abuzz after the decisions in Burwell v. Hobby Lobby and Harris v. Quinn (cases this Blog will cover in the coming days), the United States Supreme Court also issued a decision further clarifying protected speech under the First Amendment. In Lane v. Franks, et al., the Court analyzed whether a public employee, testifying under subpoena, was entitled to First Amendment protection when his testimony was outside of the scope of his job duties.

The employee, Edward Lane, was hired by Central Alabama Community College as Director of Community Intensive Training for Youth ("CITY"), a statewide program in Alabama for underprivileged youth. Shortly after his employment began he conducted an audit of CITY’s expenses. The audit led to the termination of an Alabama State Representative, who was on CITY’s payroll. Following the termination decision, Lane provided testimony against the Representative in support of an FBI investigation of the Representative. Shortly after his testimony, twenty-nine CITY employees were laid off, including Mr. Lane. While twenty-seven of these terminations were rescinded, Mr. Lane’s was not.

Lane filed suit, claiming he was terminated in retaliation for providing testimony against the Representative. The District Court found that his testimony was not protected by the First Amendment. The District Court stated that public employees speaking pursuant to official job duties were "not speaking as citizens for First Amendment purposes." The District Court opined that Lane learned of the information included in his testimony while an employee of CITY, so his "speech [could] still be considered as part of his official job duties." Lane appealed, first to the 11th Circuit Court of Appeals and then to the United States Supreme Court.

In overturning the lower courts’ decisions, the Supreme Court restated the special test applied to public employees for First Amendment protection purposes. The first part of this analysis examines whether the speech in question was made pursuant to official duties or as a citizen and whether the employee was speaking on a matter of public concern. If the employee is speaking as a citizen and on a matter of public concern, the second part of the test is whether the public employer has "adequate justification for treating the employee differently from any other member of the general public."

The Court noted that "[t]ruthful testimony under oath by a public employee outside the scope of his ordinary job duties is speech as a citizen for First Amendment purposes," even when that speech "relates to his public employment or concerns information learned during that employment." The Court noted that such testimony is a "quintessential example of speech as a citizen," as it comes with the obligation to tell the truth. This obligation is separate and distinct from any obligations a public employee may have to his employer.

The Court opined that the essential question is whether the relevant speech is "ordinarily within the scope of an employee’s duties" and "not whether it merely concerns those duties." In its analysis, the Court found that such public employee speech holds special value because of how public employees gain knowledge, and is "necessary to prosecute corruption by public officials." The Court ultimately found Lane’s sworn testimony, pursuant to a subpoena, to be speech as a citizen and on a matter of public concern. In applying the second step of the analysis, the Court found that the employer had no legitimate interest in treating Lane differently from any other member of the public, finding that his testimony did not involve any false statements or disclose any privileged or confidential information.

The Court’s decision provides useful guidance to public employers in the area of First Amendment protection for public employees. However, future decisions will likely shed light onto when speech is "ordinarily within the scope of an employee’s duties" sufficient to warrant First Amendment protection. Many employees, especially public employees, provide testimony on a regular basis pursuant to official job duties. Accordingly, while Lane is helpful, First Amendment issues must still be evaluated on a case-by-case basis.

This post was contributed by Gina E. McAndrew, a new associate in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Scranton, Pennsylvania.

In a case which will interest public and private sector employers alike, American Federation of State, County and Municipal Employees, District Council 87 v. Pa. Labor Relations Bd.the Pennsylvania Supreme Court is poised to address important issues regarding the subcontracting of public sector bargaining unit work to private sector contractors.

The work in question is the work of the Luzerne/Schuylkill Workforce Investment Board ("WIB"), which was created under federal and state law to "increase local employment through the provision of educational training and services, which are paid for by federal funds." Previously, these duties were performed by the Luzerne County Workforce Investment Development Agency ("County Agency"), but the WIB decided to issue a Request for Proposals to explore whether a subcontractor should be hired to perform the services. The County Agency employees were represented by AFSCME (the "Union"), and the Union demanded to negotiate with the County regarding the potential subcontracting. The County did not respond to these demands and the WIB proceeded to issue the RFP.

The RFP indicated that the decision was subject to approval by both Luzerne and Schuylkill Counties’ Commissioners; however, the Commissioners did not act on recommendations forwarded by the WIB. The County Agency bid on these services, but was not recommended for or awarded either contract. The WIB proceeded to award contracts to bidders and enter into contracts with third-party contractors. Thereafter, the Union filed an unfair labor practice charge against Luzerne County for unilaterally subcontracting without bargaining.

A hearing examiner issued a Proposed Decision and Order, finding that the WIB was controlled by the County, and thus the County had committed an unfair labor practice. The hearing examiner determined that the chief elected officials directed the WIB to seek bids, the RFPs indicated the Commissioners had to approve the contracts, and that the WIB was required to act with the agreement of these officials on certain matters. However, the Pennsylvania Labor Relations Board reversed that decision, finding that the County did not control the WIB, as it was the WIB’s decision to subcontract, issue the RFPs, review bids, choose successful bidder(s) and enter into the contracts. As such, the Board found the County did not commit an unfair labor practice when a third party (WIB) made the decision to subcontract.

The Union appealed to the Commonwealth Court. In upholding the Board’s decision, the Court found no error in the Board’s factual conclusions that WIB independently decided to subcontract. The Court also noted that the County Agency attempted to retain its contracts by submitting a bid, as it had done at least once previously, and that the disbursement of funds was at the direction of the WIB. The Court held that although the chief elected official partners with the WIB to create a local plan and approves the budget, this does not mean that the local official controls the WIB. The Court concluded that WIB was "an independent third party not subject to the collective bargaining agreement" and its actions were "not attributable to the County."

However, the Court’s ruling was not unanimous. In his dissent, Judge Pellegrini, joined by Judge McGinley, opined that the Board erred in finding the County had not committed an unfair labor practice, as the County failed to negotiate to a bona fide impasse before subcontracting.  Judge Pellegrini disagreed with the majority’s ruling, reasoning that the WIB was part of County government, as its purpose was to "advise and assist" County officials and had no authority to enter into a contract authorizing the disbursement of funds; the County had control over the WIB based upon the facts of record, including that the RFPs indicated that decisions were subject to the Commissioners’ approval; and the WIB did not have a "separate legal status."

The Pennsylvania Supreme Court has agreed to hear this issue on appeal. The decision will likely have significant implications for public sector employers, and their various related and affiliated entities, as well as private sector organizations seeking to do business with these entities. Stay tuned for future updates on this important topic.

This post was contributed by Adam R. Long, Esq., a Member in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Harrisburg, Pennsylvania.

Most HR professionals in the private sector are aware of the risks presented by non-compliance with the overtime and minimum wage requirements of the federal Fair Labor Standards Act ("FLSA") and its state law companion, the Pennsylvania Minimum Wage Act ("PMWA"). Since 1974, the FLSA’s requirements have applied to virtually all state and local government employees and most federal employees, too.

A recent decision in the case of Morrow v. County of Montgomery illustrates this point. In Morrow, a class of correctional officers at the Montgomery County Correctional Facility filed a class action lawsuit against the County in the United States District Court for the Eastern District of Pennsylvania, alleging that they were not compensated for time spent working before and after their scheduled shifts. The plaintiffs in Morrow sought damages under both the FLSA and PMWA. On January 31, 2014, the Court issued a decision that (1) dismissed the plaintiffs’ PMWA claims, but (2) granted the plaintiffs’ motion to conditionally certify a collective action based on their claims under the FLSA. After noting that no court has directly ruled on the applicability of the PMWA to government entities, the Court concluded that government entities were not covered by the PMWA and dismissed the plaintiffs’ state law claims. However, the Court also held that plaintiffs met their initial burden of showing that the proposed class members were similarly situated and conditionally certified the class for purposes of an FLSA collective action. Thus, the class-based FLSA claims for unpaid overtime will move forward.

The Court’s holding in Morrow that the PMWA does not apply to government entities is certainly useful for public sector employers. That said, the remainder of the decision confirmed that, with a few limited exceptions, the FLSA applies to government entities in the same manner that it applies to private sector employers. Public sector employers face the same risks and threats of class-based litigation under the FLSA that have vexed the private sector for years. As such, it is important for all employers, public and private alike, to work to ensure compliance with the FLSA.
 

It seems like we have been spending a lot of time discussing successful appeals of arbitration decisions lately, which is been a good thing for Pennsylvania employers. Recently, we reported on two cases in which an employer successfully appealed a negative arbitration decision. Historically, such successful appeals have been difficult. However, the current trend continued when a decision from the Commonwealth Court of Pennsylvania, sitting en banc (as full court rather than simply a three judge panel), rounded out the trifecta.

In Pa. Dept. of Corr. v Pa. State Corr. Officers’ Assoc. (pdf), the court was asked to analyze whether a grievance arbitrator’s decision reinstating corrections officers accused of inmate abuse was rationally derived from the collective bargaining agreement, and of so, whether the award violated a well-defined public policy. You may recall from our prior posts that these questions call for the application of the "essence test" and the limited public policy exception to that test.

Let’s take a step back.  The grievants had been suspended pending investigation of corroborated allegations of inmate abuse, and the union filed grievances challenging the suspensions. The first issue before the arbitrator was whether the grievances were timely filed. The parties’ agreement required that grievances be filed within 15 days of the alleged "occurrence" giving rise to the dispute. The arbitrator found that the grievances were in fact timely filed, even though they were filed well beyond 15 days after the implementation of the suspensions. The arbitrator reached this conclusion by finding that the suspensions constituted continuing violations of the agreement. The arbitrator held that, as a result, the grievances were timely filed even if back pay would be limited to the date the grievances were filed. Basically, the arbitrator held that each day of suspension gives rise to a new occurrence, triggering a new 15 day period.

What did the court have to say?  The court disagreed and succinctly concluded that the arbitrator’s decision, which did not cite to any provision of the agreement, lacked foundation in and failed to logically flow from the agreement. Put simply, the arbitration decision failed the essence test. The court did not reach the issue of whether the decision would violate a public policy.

So what?  For those of us with responsibilities for responding to grievances, this decision is significant. The court seems to have thrown out the continuing violation theory, a theory that unions often rely on when grievances are untimely filed, but there is some ongoing impact on the grievant.  Because most agreements prohibit an arbitrator from adding language to the agreement, as the agreement did here, without a specific provision providing for its use, employers should strongly consider taking the position that the continuing violation theory is dead.