IN THE COMMONWEALTH COURT OF PENNSYLVANIA

County of Allegheny, Pennsylvania, : Appellant :

: v. : : Allegheny Court Association of : No. 951 C.D. 2015 Professional Employees : Argued: April 12, 2016

BEFORE: HONORABLE MARY HANNAH LEAVIT T, President Judge

HONORABLE ROBERT SIMPSON, Judge HONORABLE DAN PELLEGRINI, Senior Judge

OPINION BY SENIOR JUDGE PELLEGRINI FILED: May 2, 2016

Allegheny County, Pennsylvania (County) appeals from an order of the Allegheny County Court of Common P leas (trial court) upholding an arbitration
award which found a grievance filed by the Allegheny Court Association of
Prof essional Employees (Association) timely under the parties’ c ollective bargaining agreement and sustained the grievance on its merits

. For the reasons that follow, we affirm.

I

. A. The County and the Association 1 entered into a collective bargaining agreement (CBA) effective January 1, 2011
, through December 31, 2013. Article
VIII of the CBA contained a “me too” provision that allowed the County to provide

1 The Association is comprised of between 331

- 340 probation officers who were appointed by the Allegheny County Court system.2

diffe rent health care coverage if 75 % of the unionized and 100% of the non

unionized employees were covered by the plan. Section 3 (H) of that Artic le regarding “Cost Containment” provid ed that:

It is specifically understood that du ring the term of this Agreement, the County shall have the right to institute, delete or modify the full range of wellness and all cost containment measures in hospitalization, surgical, major medical, and dental coverage. The program shall be at no addit ional cost to employees (other than the participation arrangements set forth herein) and benefits shall not be reduced. Effective January 1, 2011, each bargaining unit employee who receives hospitalization insurance shall contribute 2.0% of his or her bas e salary towards the premium. Longevity payments shall not be included in calculation of base salary for the purpose of premium contributions for hospitalization insurance. Contributions shall be made by paycheck deduction.

(Reproduced Record [R.R.] at 84a) (emphasis added).

Article III , Section 3(A) of the CBA set forth a grievance procedure requiring that:

[a]ny alleged grievance shall be reduced to writing within seven (7) work days from the alleged occurrence of the grievance, or within seven (7) work days from the time the grievant reasonably should have known or been aware of the existence of the situation giving rise to the alleged grievance.

( Id. at 75a.) Section 4(A) also provided that the grievance “must be presented under the procedures of this Article promptly and within the prescribed time limitations.” ( Id. at 76a.)3

In attempting to negotiate a successor agreement, the parties reached an impasse in July 2013 regarding the CBA to take effect January 1, 2014, and proceeded to arbitrati on on the issue before Arbitrator Lewis R. Amis (Arbitrator Amis)

. Just before the record closed, Assistant County Solicitor Diego Correa advised the Association via letter dated April 8, 2014, that the County intended to implement a new healthcare plan u nder the provisions of the existing CBA on the
basis that 75% of unionized employees were transferred to the new healthcare

program. As per the letter, t he new healthcare plan provided the following payroll
deductions: 2014

— 2.25%; 2015

— 2.25%; and 2016

— 2. 5%. ( Id. at 56a.) None of
those increases were authorized in the CBA.

Arbitrator Amis issued an award dated May 6, 2014 (Award) , effective from January 1, 2014
, through December 31, 2017 . The A ward continued the prior CBA in large part, with certain c hanges to the applicable salary schedule, compensation plan, longevity schedule, insurance benefits and cost containment thereof, and sick leave. Significantly, with resp ect to insurance benefits, the A ward
stated:

Article VIII

- Insurance Benefits

Sect ion 1.A. Change the requirement that the County may provide new or different health insurance coverage if, “75 percent of all other County unionized...employees are covered under the new plan,” to “50 percent of all other County unionized employees....”

***

Section 3.H. Cost Containment
Continue 2 percent contribution of base salary towards premium for hospitalization insurance for the life of this4

Agreement. Retain existing relevant conditions, rights, and restrictions contained in this section.

( Id. a t 98a.) O n June 20, 2014, after the successor CBA A ward was handed down, the County implemented the increased payroll deductions referenced in Assistant County Solicitor Diego Correa’s April 8 th letter

.

On August 19, 2014, the Association ’s President, S tephen Bechtold (President Bechtold)
, advised William Graham, the Deputy Director of the Allegheny
Coun ty Department of Human Services
, that the payroll deductions should be limited
to 2% for the life of the current CBA

— that is, until December 31, 2017. T he County disagreed, responding through its counsel that “the language limiting payroll deduction to 2% is subject to the ‘me too’ language providing that the County may change health care benefits if 50% of other County employees change their
healthcare.” ( Id. at 59a.) President Bechtold rejected this interpretation, explaining, “[t]he fact that the Arbiter singled out this issue separate from the language addressing changing the ‘me too’ language from 75% to 50% in the Award makes his
intentions clear.” ( Id. ) In an August 21 , 2014 e

- mail, he stated that the Association’s counsel would be in contact with the County “not only [to] resolve this issue but to also complete the incorporation of the Award language into the current contract for printing and di stribution.” ( Id. )

C ounsel for the Association stated the following in an e

- mail dated September 16, 2014:

I am disappointed with the County’s position on this issue. Certainly the a ward provision is not just superfluous verbiage. Since the County h as entered a definitive position, but this is a continuing matter, there would be no5

time limitation on filing and prosecuting a grievance up through an arbitration award. It would seem to be an unnecessary process when we could submit the matter to the A rbitrator for his statement of intention. We could agree to abide by his statement as being final on the matter. Give me your thoughts on this approach. I will hold off contacting him to see if he would be willing to receive and respond to the question and will not do so without you joining in with the statement of the question. Perhaps a conference call would be suit [sic] the matter.

( Id. at 61a.) Later that day, the Association’s counsel sent a second e

- mail, requesting that “either the County bac ks off its position or the matter is submitted to this Arbitrator [Amis] for his intention which will resolve the matter.” ( Id. )

On September 25, 2014, following a conversation with counsel for the Association, the County memorialized its position that its ability to increase the 2% payroll deduction was not affected by the A ward and affirmed its refusal to adjust the payroll deductions downward. Likewise, the County refused to submit the issue to Arbitrator Amis for clarification, but instead insisted that the Association file a new grievance.

B.

Accordingly, o n October 6, 2014, the Association filed a formal grievance with respect to the increased payroll deduc tions , and the parties proceeded
to arbitration. Before Arbitrator Gerald Kobell, Esquire (Arbitrator Kobell), the County argued that the grievance was untimely filed as per the CBA’s seven work day

- time limit. Arbitrator Kobell nonetheless entertained the grievance, finding it timely because the seven days did not begin to accrue until Septem ber 25, 2014. He
noted that:6 There was no evidence introduced by the County, and I assume that none exists, for the County payroll department right after February 6, 2014, to notify the Probation Officers in the unit that as soon as the calculations coul d be completed, or perhaps until any appeal period expired, the County would commence withdrawing 2.25 percent instead of 2 percent from employees’ pay. Most likely, the difference amounted to only a few dollars, and amid other possible changes, it just w as not readily noticeable. I think that the County, if it believed that the “me too” language trumped the Arbitrator’s award of 2 percent for the life of the Agreement, should have communicated that position to the Association and to the affected employee s. It did neither. It was not until August 14, 2014, several pay periods later, that the increased deduction was called to the attention of the Association (or perhaps President Bechtold noticed it himself). This triggered President Bechtold’s voicemail message to the Allegheny County Department of Human Resources, pointing out that Arbitrator Amis, in the Association’s view, had mandated 2 rather than 2.5 percent for the life of the Agreement.

***

The e

- mails exchanged on September 25 was [sic] the f irst time when the filing of a new grievance was mentioned by either Attorney Delaney, on behalf of Association, or Assistant County Solicitor Correa, on behalf of the County. Up until that date, counsel for the respective parties were discussing other is sues and alternatives, but not the filing of a new grievance before a new arbitrator. Until then, in my view, they were engaged in traditional collective bargaining to resolve all of the remaining issues in dispu te before them, including the 2

– 2.25 percen t employee participation payment.

( Id. at 26a, 31a.) With respect to the merits, Arbitrator Kobell agreed with the Association’s argument that Arbitrator Amis’s A ward disallowed the County’s
increase in member contributions above 2% . Arbitrator Kobell ordered the County to reimburse the Association’s members for their healthcare participation payments in7

excess of this amount and to continue the 2% deduction for the life of the CBA ending on December 31, 2017.

The County filed a petition to vacate the A ward (petition) with the trial court, averring that the Award did not draw its essence from the CBA because it ignored the CBA’s contractually established deadline for filing grievances. In response, the Association filed preliminary objections , asserti ng that the issue of
timeliness is a final determination left to the Arbitrator and
, therefore, the County’s petition must be dismissed for legal insufficiency

. 2 Ultimately, the trial court
sustained the Association’s demurrer and dism issed the County’s p etition with prejudice “because the black letter law of Arbitration is that the Arbitrator decides procedural issues

— like filing deadlines,” and because the A ward drew its essence from the terms of the CBA. (8/17/15 Memorandum Order, at 1

– 2.) This appeal
followed.

II.

As we have previously stated, grievance awards under the Public Employe Relations Act, Act of July 23, 1970, P.L. 563, as amended , 43 P.S. §§1101.101

– 1101.2301, are reviewed pursuant to the deferential essence test, which requires affirman ce of an award if: “(1) the issue as properly defined is within the terms of the agreement, and (2) the award can be rationally derived from the agreement.” Neshaminy School District v. Neshaminy Federation of Teachers , 122 A.3d 469, 474 (Pa. Cmwlth. 201 5). Pursuant to this test, our r eview is “highly
circumscribed
, ” meaning that “[w]here it is determined that the subject matter of the

2 The Association also alleged improper original service of process; however, the trial court did not render its decision based upon this ground, and it does not factor into our analysis.8

dispute is encompassed within the terms of the agreement, the validity of the arbitrator’s interpretation is not a matte r of concern to the court.” Leechburg Area
School District v. Dale , 424 A.2d 1309, 1312

– 13 (Pa. 1981).

A

. Initially , we must determine whether, as the Association contends, an
arbitrator ’s procedural decision is final and not reviewable by the courts
, e ven under
the circumscribed review of the essence test. In the seminal case of John Wiley &
Sons , Inc. v. Livingston , the United States Supreme Court addressed a split among the United States Courts of Appeals regarding whether trial courts or arbitrators
determine if the procedural conditions to arbitration have been satisfied . 376 U.S. 543, 84 S. Ct. 909 (1964).

In that case , a union argued that its member s need not comply with the grievance procedures where doing so was futile and where the employer engaged in continuing violations of a CBA. In noting the difficulty in distinguishing procedural and substantive aspects of a labor dispute, the Supreme Court reasoned:

We think that labor disputes of the kind involved here cannot be broken down so easi ly into their “substantive” and “procedural” aspects. Questions concerning the procedural prerequisites to arbitration do not arise in a vacuum; they develop in the context of an actual dispute about the rights of the parties to the contract or those covered by it.

. . . Doubt whether grievance procedures or some part of them apply to a particular dispute, whether such procedures have been followed or excused, or whether the unexcused failure to follow them avoids the duty to arbitrate cannot ordinarily be answered without consideration of the merits of the dispute which is presented for arbitration.

. . . It would be a curious rule which required that intertwined9

issue s of “substance” and “procedure” growing out of a single dispute and raising the same questions on the same facts had to be carved up between two different forums, one deciding after the other. Neither logic nor considerations of policy compel such a result.

Id. at 556

– 57, 84 S. Ct. at 918

.

In hold ing that procedural issues w ere not reserved for the courts, the United States Supreme Court went on to hold that those issue s should be considered “as aspects of the dispute which called the grievance procedures into play,” and
, therefore, were subject to arbitration. Id. at 559, 84 S. Ct. at 918

. “ Once it is determined, as we have, that the parties are obligated to submit the subject matter of a dispute to arbitration, ‘procedural’ questions which grow out of the dispute and bear on its final dispositio n should be left to the arbitrator. ” I d. at 557, 84 S. Ct. at 918. Importantly, the Supreme Court did not consider whether an arbitrator’s ruling on “procedural” questions may be appealed or the appropriate standard to apply to such questions on appeal.

Consistent with Wiley & Sons and Third Circuit precedent, 3 Pennsylvania courts adopted the federal standard regarding procedural arbitrability, holding that procedural questions should be resolved by the arbitrator unless the parties to a CBA limit the a rbitrator’s jurisdiction by specify ing in the CBA that the
arbitrator has no jurisdiction over procedural matters. See, e.g. , Kardon v. Portare
, 353 A.2d 368, 370 (Pa. 1976).

3 See Radio Corporation of America v. Association of Professional Engineering Personnel
, 291 F. 2d 105 (3d Cir. 1961).10

I n School District of City of Duquesne v. Duquesne Education
Associati on , a cas e upon which the County relies, a teacher filed a grievance after the
mandated 15

- day deadline. 359 A.2d 850 , 851 (Pa. Cmw l th. 1976), rev’d , 380 A.2d 353 (Pa. 1977). Nonetheless, his grievance proceeded through the first three levels of the enumerated gr ievance procedure, during which the school district failed to raise
the timeliness issue . 359 A.2d at 852. As such, the arbitrator concluded that the school district waived this issue and sustained the grievance on its merits. Id. On appeal to this Cou rt, we reversed, finding that because the CBA did not specifically provide for th e procedural question involved ( waiver )
, the arbitrator’s decision finding that waiver occurred prior to arbitration was erroneous. Id. As such, we dismissed the grievance a s untimely filed.

On further appeal, our Supreme Court reasoned that
, as per Kardon , an arbitrator’s jurisdiction may be limited but in the CBA at issue, there was no limitation prohibiting the arbitrator from deciding procedural issues. School District of City o f Duquesne v. Duquesne Education Ass ociatio n , 380 A.2d 353, 356 (Pa. 1977). As such, it held that under Wiley & Sons
, the issue of waiver was properly
before the arbitrator. Id. Specifically, the Court explained:

In the instant case, as in K ardon , we can find no limitation in the collective bargaining agreement which would prohibit an arbitrator from deciding procedural issues. As the final determination of the procedural issue is to be left to the arbitrator, we believe that Commonwealth Co urt erred in reversing the arbitrator.

Id. That case, however, did not hold that an arbitrator’s procedural determination was
insulated from review.11

In fact, in State System of Higher Education v. United Plant Guard Workers of America, Local Union No. 509
, 612 A.2d 645 (Pa. Cmwlth.), appeal
denied , 618 A.2d 403 (Pa. 1992), we reviewed the same issue the Association suggests we are precluded from reviewing here: whether an arbitrator’s
determination that a grievance was timely filed

– when the subject CBA provided specific terms regarding timelines for filing grievances

– violated the essence test

. There, t he CBA specified that grievances must be filed within 15 working days of the event giving rise to the grievance, but the arbitrator found timely a g rievance filed
five years after the fact. Id. at 647. On review, we held:

[t]he agreement explicitly provided for a fifteen day limit, and the arbitrator’s decision to allow the late filing essentially ignored the language limiting the filing of grievan ces to fifteen days from the date of the occurrence giving rise to the grievance

. As such, the decision of the arbitrator did not draw its essence from that agreement.

Id. at 647.

Wiley & Sons and its progeny stand for the proposition that
, unless

exp ressly precluded from resolving procedural issues in the CBA, questions of procedure, like substantive issues, are wi thin an arbitrator’s purview. Contrary to the Association’s suggestion, this line of cases does not render final and unreviewable an
arbit rator’s resolution of a procedural issue. To hold otherwise would require the courts to parse out the differences between questions of procedure and substance, simply to determine which issues are revie wable by a trial court. T he Supreme Court
of the Uni ted States expressly disavowed this position

. See Wiley & Sons
, 376 U.S.

at 557, 84 S. Ct. at 918 (“ Neither logic nor considerations of policy compel such a result.”).12 B. Having found that Arbitrator Kobell’s procedural determination is subject to review , we will proceed to apply the essence test. The County does not dispute that the timeliness issue was within the terms of t he parties’ CBA, only that
the A ward was not rationally derived from the agreement under the second prong of
the essence test. In this respect, we “will not second

- guess the arbitrator’s fact

finding or interpretation as lon g as the arbitrator has arguably construed or applied
the CBA.” Neshaminy Sch. Dist

. , 122 A.3d at 474.

Specifically, the County maintains that the A ward does n ot draw its essence from the CBA because it disregards the contractual time limits it contains. The gravamen of the County’s argument is that the October 6, 2014 grievance was
filed 98 work days after the County notified the Association by letter dated Ap ril 8,
2014
, of its intent to implement the new deductions
, and 75 work days after the new
deductions were actually implemented. Because the CBA requires a grievance to be
filed within seven work days of an event giving rise to a grievance or within seven work days from the date on which the Association or its members reasonably should have discovered such an event, the County contends that the A ward, finding the grievance timely filed, does no t draw its essence from the CBA.

The County argues that the A ssociation should have filed a grievance by April 17, 2014, despite the fact that the arbitration was ongoing a nd Arbitrator Amis had not yet decided whether to raise the 2% base salary contribution as proposed by the County

. It was not until the A ward wa s issued in May 2014 that the Association learned that the 2% contribution remained in effect for the life of the agreement, despite the fact that the County had proposed an increased contribution. Thus, as of13

April 17, 2014, the Association had no knowle dge of whether the County’s proposed
actions would violate the new CBA.

Accordingly, by e

- mail dated August 19, 2014, the Association advised Deputy Director Graham of this issue. In subsequent e

- mails, the parties attempted to resolve the issue by refe rence to Arbitrator Amis ’s A ward. By September 22, 2014,
Arbitrator Kobell found it still unclear whether the County intended to proceed with its position, and the Association expressly inquired that day whether the County intended to “back[ ] off its pos ition” or to submit the matter to arbitration. (R.R. at 61a.) On September 25, 2014
, the County confirmed that it maintained its position, and within seven business days, the Association filed its formal grievance.

The CBA allows an arbitrator to decid e when an event giving rise to a grievance occurred or when a grievant discovered or reasonably should have
discovered the occurrence . In this context, Arbitrator Kobell rejected the County’s argument that the Association was put on notice of the increase d premiums as of its April 8 , 2014 letter or
, alternatively, as of its June 20 , 2014 deductions, noting that
the former was i ssued before Arbitrator Amis’s A ward and the latter amounted to only a few dollars’ difference, which was likely insufficient to pu t the grievants on notice. Instead, he found that the seven work day period did not begin to accrue until September 25, 2014 :

The e

- mails exchanged on September 25 was the first time when the filing of a new grievance was mentioned by either Attorney Del aney, on behalf of the A ssociation , or Assistant County Solicitor Correa, on behalf of the County. Up until that date, counsel for the respective parties were discussing other issues and alternatives, but not the filing of a new grievance before a new arb itrator. Until then, in my view, they were engaged in traditional collective bargaining to14

resolve all of the remaining issues in dispute before them, including the 2

– 2.25 percent employee participation payment.

(R.R. at 31a.) We are not free to render our own factual findings , and because
Arbitrator Kobell ’s Aw ard arguably construed and applied the CBA within the scope of his authority, his decision satisfies the essence test

. See Neshaminy Sch. Dist. , 122
A.3d at 474. We , therefore
, affirm the trial court’s order sustaining the Association’s preliminary objections to the County’s petition upholding the A ward. 4

DAN PELLEGRINI, Senior Judge

Judge s McCullough and Wojcik did not participate in the decision in this case.

4 In ar guing that Arbitrator Kobell’s A ward does not flow from and is not based in the CBA because it did not apply the CBA’s strict, seven work day deadline, the County fails to recognize that as per the CBA, the deadline did not begin to run until the grievant reasonably should have discovered the violation. This is a fa ctual inquiry which turns upon the specific circumstances of the case, see Fine v. Checcio , 870 A.2d 850, 859 (Pa. 2005) (discussing the analogous discovery rule, which tolls the statute of limitations until a party knows or reasonably should know of his i njury and its cause), and background concerning the parties’ ongoing negotiations is germane to this issue. Contrary to the County’s argument, Arbitrator Kobell did not consider this background in determining whether an otherwise strict deadline was tolle d by settlement negotiations. Additionally, in no way was Arbitrator Kobell’s A ward premised upon a finding that each day constituted a new, ongoing violation of the CBA, giving rise to a new filing deadline. The County has mischa racterized Arbitrator Ko bell’s A ward in these respects, and we find its argument s unavailing.IN THE COMMONWEALTH COURT OF PENNSYLVANIA

County of Allegheny, Pennsylvania, : Appellant :

: v. : : Allegheny Court Association of : Professional Employees : No. 951 C.D. 2015

O R D E R

AND NOW, this 2 nd day of May , 201 6 , the order of the Court of Common Pleas of Allegheny County dated May 15, 2015, in the above

- referenced
case is affirmed.

DAN PELLEGRINI, Senior Judge