Millcreek Twp. Sch. Dist. v. Millcreek Twp. Educ. Support Pers. Ass'n

179 A.3d 1167

MILLCREEK TOWNSHIP SCHOOL DISTRICT, Appellant

v.MILLCREEK TOWNSHIP EDUCATIONAL SUPPORT PERSONNEL ASSOCIATION

No. 187 C.D. 2017

Commonwealth Court of Pennsylvania.

Argued: November 14, 2017

Decided February 13, 2018

Reargument Denied April 3, 2018

Mark T. Wassell, Erie, for appellant.

Richard S. McEwen, Edinboro, for appellee.

BEFORE: HONORABLE P. KEVIN BROBSON, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE J. WESLEY OLER, JR., Senior Judge

OPINION BY JUDGE COVEY

Millcreek Township (Township) School District (District) appeals from the Erie County Common Pleas Court's (trial court) January 30, 2017 order affirming the November 7, 2016 arbitration award (Award) and granting the Township Educational Support Personnel Association's (Association) grievance that the District violated the parties' Collective Bargaining Agreement's (CBA) subcontracting clause. Essentially, the District presents two issues for this Court's review: (1) whether the Award satisfies the essence test; and (2) whether the Award contravenes public policy.¹

Background

The District and the Association are parties to a CBA which became effective July 1, 2011.² Article III, Paragraph H of the CBA contains language regarding subcontracting and specifically states: "No work of the bargaining unit shall be sub[ ]contracted for the life of the [CBA]." Reproduced Record (R.R.) at 63a. During labor negotiations in July 2016, the District notified the Association that a Request for Proposals (RFP)³ for custodial services had been issued on March 29, 2016. The District provided the Association with the information it received from the successful bidder. However, the District did not enter into a contract with the successful bidder.

The Association filed a grievance on April 7, 2016, claiming that the District violated the CBA by accepting bids for custodial labor services . The grievance was submitted to arbitration and a hearing was held before an Arbitrator on August 16, 2016. On November 7, 2016, the Arbitrator granted the Association's grievance, holding that the District had violated the CBA's "no outside subcontracting provision" and "the RFPs cannot be used in bargaining with the Association to secure [an] advantage." R.R. at 15a. The Arbitrator further held that "[o]utside contracts which eliminate the Bargaining Unit cannot be used unless or until the parties are at legal impasse" and "[a]ny formal selection of prior RFPs are therefore considered to be null and void." R.R. at 15a.

Facts

The District filed a Petition to Vacate Arbitration Award (Petition) on December 6, 2016. The Association filed a Motion to Strike Portions of Petition (Motion to Strike) on December 28, 2016. The trial court held a hearing on the Motion to Strike on January 23, 2017. By January 23, 2017 order, the trial court granted the Motion and struck Exhibits B, C, D and E from the Petition, leaving only Exhibits A (the CBA) and F (the Award) for consideration. On January 30, 2017, the trial court held a hearing on the Petition, and affirmed the Award and denied the Petition. The District appealed to this Court. The trial court issued an order directing the District to file a Pennsylvania Rule of Appellate Procedure (Rule) 1925(b) Concise Statement of Matters Complained of on Appeal⁴ ( Rule 1925(b) Statement). The District filed its Rule 1925(b) Statement on March 14, 2017. On April 13, 2017, the trial court filed its opinion.

Discussion

The District first argues that the Award fails to draw its essence from the CBA. Initially,

[a]s we have previously stated, grievance awards under the Public Employe Relations Act [ (PERA)⁵ ], ... are reviewed pursuant to the deferential essence test, which requires affirmance of an award if: ‘(1) the issue as properly defined is within the terms of the [CBA], and (2) the award can be rationally derived from the [CBA].’ Neshaminy Sch [.] Dist [.] v. Neshaminy Fed [']n of Teachers, 122 A.3d 469, 474 (Pa. Cmwlth. 2015) [ ( Neshaminy I ) ]. Pursuant to this test, our review is ‘highly circumscribed,’ meaning that ‘[w]here it is determined that the subject matter of the dispute is encompassed within the terms of the [CBA], the validity of the arbitrator's interpretation is not a matter of concern to the court.’ Leechburg Area Sch [.] Dist [.] v. Dale, 492 Pa. 515, 424 A.2d 1309, 1312–13 (1981).

Cty. of Allegheny v. Allegheny Court Ass'n of Prof'l Empls. , 138 A.3d 701, 706 (Pa. Cmwlth. 2016) (emphasis added). In the instant case, the relevant CBA provision provides:

No Sub [ ]Contracting 1. No work of the bargaining unit shall be sub [ ]contracted for the life of the Agreement.

2. No work of the bargaining unit shall be done by a supervisor (or non-bargaining unit member). This will not prohibit supervisory personnel from performing work of an emergency nature, nor does this prohibit a supervisor from teaching cleaning procedures or demonstrating cleaning techniques to employees of the bargaining unit for training purposes.

This will not prohibit a student from performing tasks as a consequence of discipline or for educational purposes, providing that no bargaining unit members experience a reduction in working hours or overtime opportunities, or are required to supervise students, as a result.

R.R. at 63a (text emphasis added). The District maintains that the RFP was issued for negotiation purposes only, the CBA makes no mention of RFPs and that the CBA was not implicated because no contract was executed. The Association rejoins that the CBA's subcontracting provisions were triggered once the RFP was issued.

The issue before the Arbitrator was whether "the District violate[d] the CBA by issuing [an RFP] for custodial services in the District[.] If so, what is the remedy?" R.R. at 8a. The issue the Arbitrator addressed was "whether the District ha[d] subcontracted out work ...." R.R. at 10a. Clearly, the issue the Arbitrator addressed falls within the CBA's terms prohibiting subcontracting. However, since it is undisputed that no contract for custodial services had been signed, that issue was not before the Arbitrator.

In determining that the issue was before him, the Arbitrator explained:

‘[O]utside contracting,’ or ‘contracting out’ is a process.^[6] It does not start when the contractor signs the formal contract or begins actual work. It begins when the District decides to pursue that outside contracting avenue and then advises the Association and advertises through the use of RFPs.

That process, therefore, started when the current CBA was in effect and, in my opinion, is in violation of the ‘no subcontracting’ language. The process then continues then [sic] through the ‘walk through’ and culminates with the public opening of the bids and the selection of a successful bidder. The formal contract would then follow and the work would then commence.

In summary, the outside contracting language becomes operative not when the outside contracting work actually begins, but at least back to when the RFPs are announced. Arguably, it could flow even back to when the District [m]anagement in their [sic] internal discussions decided to initiate the outside contracting process.

R.R. at 13a. At the time the District issued the RFP, the parties were negotiating a new contract, and the District proposed eliminating the no subcontracting provision in the next CBA (see Notes of Testimony August 16, 2016, Ex. E at 4), and issued the RFP to determine whether removing that provision was in the District's best interest. The Arbitrator stated that the District's action in issuing the RFP "had a ‘chilling effect’ on the negotiations[,]" and thus "was a bargaining tactic to secure advantage for the District."⁷ R.R. at 12a–13a. The Arbitrator concluded:

There is no question that the District, while the CBA was in effect, decided to subcontracted [sic] out and to pursue that alternative.^[8] They [sic] could have broached the subject in negotiations and pursued it without going through the RFP process. I do not believe that [it] went through that entire process only to obtain information but to use it as a tactic in negotiations to secure advantage or to bargain to impasse. Then potentially [it] could unilaterally initiate custodial subcontracting, thereby, eliminating the Bargaining Unit.

Therefore, in my opinion, the provisions of the CBA have been violated.

R.R. at 14a.

However, the law is well-established as pronounced by the United States Supreme Court:

An arbitrator is confined to interpretation and application of the [CBA]; he does not sit to dispense his own brand of industrial justice. He may, of course, look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement.

United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960) ; see also State Sys. of Higher Educ. (Cheyney Univ.) v. State College Univ. Prof'l Ass'n (PSEA–NEA), 560 Pa. 135, 743 A.2d 405, 411 (1999) (emphasis added) (quoting United Steelworkers, 363 U.S. at 599, 80 S.Ct. 1358 ); Bethel Park Sch. Dist. v. Bethel Park Fed'n of Teachers, 55 A.3d 154, 157 (Pa. Cmwlth. 2012) (emphasis added) (quoting Westmoreland Intermediate Unit # 7 v. Westmoreland Intermediate Unit # 7 Classroom Assistants Educ. Support Pers. Ass'n, PSEA/NEA, 595 Pa. 648, 939 A.2d 855, 862–63 (2007) ).

Here, the issue before the Arbitrator was whether the issuance of the RFP violated the CBA . Article III, Section H of the CBA specifically states: "No work of the bargaining unit shall be sub[ ]contracted for the life of the Agreement." R.R. at 63a. This language is clear and unambiguous. It is completely silent on RFPs and makes no reference to RFPs or the subcontracting "process." In performing his responsibilities, the arbitrator exceeds his authority if he "ignore[s] the plain language of the contract." United Paperworkers Intern. Union, AFL–CIO v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987...