Opinion ID: 2555590
Heading Depth: 3
Heading Rank: 2

Heading: The interrelationship between the Award and the regulations

Text: The question then becomes whether Paragraph 18 requires the Commonwealth to perform an act that these regulations prohibit, thereby constituting an excess of the arbitrators' powers. As noted, the Commonwealth asserts that the Award does require an illegal act because, in some instances, it mandates reimbursement, indemnification, and/or representation without the exercise of employer discretion as set forth in the regulations. The Commonwealth states that the Award thereby divests it of the discretion it is legally obligated to exercise. See Brief for Commonwealth at 16-20. On the other hand, the Union's position is that, if a certain benefit (such as providing a legal defense) is discretionary with an employer, clearly the employer may confer it; hence, an arbitration award requiring its conferral cannot possibly command the employer to take an action that it could not have done voluntarily. See Brief for Union at 34-35. A review of our cases in which this Court has applied the excess-of-authority prong reveals that it, like narrow certiorari itself, is very constricted, FOP, Lodge No. 5, 564 Pa. at 295, 768 A.2d at 294, and that this constrictedness is necessary to give effect to the legislatively-mandated finality of arbitration awards as a counterbalance for the employees' inability to strike. In FOP, Lodge Number 5, for example, this Court upheld an interest arbitration award against an excess-of-authority challenge where the arbitrator required the City of Philadelphia to assign certain duties to police staff inspectors rather than police captains, and to bargain over any decision to eliminate the rank of staff inspector. While these types of decisions may have been essentially managerial in character, this Court emphasized: We have stated that [o]ur definition of what constitutes `an excess of an arbitrator's power' [is] far from expansive. Essentially, if the acts the arbitrator mandates the employer to perform are legal and relate to the terms and conditions of employment, then the arbitrator did not exceed her authority. Id. at 299, 768 A.2d at 296-97 (quoting Pa. State Troopers Ass'n, 559 Pa. at 592, 741 A.2d at 1252) (brackets in original, emphasis added). Thus, the fact that the award at issue there pertained to the terms and conditions of employment and did not require an illegal act was sufficient to insulate it from judicial modification. See id. at 300, 768 A.2d at 297. Similarly, in Smith, this Court exercised narrow certiorari review of a grievance award where a state trooper was fired after committing illegal conduct, including driving while intoxicated and placing a loaded gun into a victim's mouth while threatening to kill her. The grievance arbitrator overruled Smith's discharge on the basis that it was disproportionate to discipline meted out in other cases. In upholding the award as falling within the arbitrator's power, this Court referred to the severe limits placed on our appellate authority which are dictated by the legislature as part of a carefully crafted plan of remediation to correct flaws in the prior system. Smith, 559 Pa. at 591, 741 A.2d at 1251. [19] The Court recited that, in Betancourt, it had specifically rejected a broad scope of review of such awards, and explained that the legislative restrictions placed on judicial review prevent courts from interfering with an arbitrator's determination merely because [it] is unpalatable, or even extremely distasteful[.] Id. at 590 n. 3, 741 A.2d at 1251 n. 3. Finally, the Court refused the employer's request to broaden the excess-of-arbitrator's-power prong to include an assessment of whether the award contravenes public policy, as to do so would markedly increase the judiciary's role and thereby undercut the legislature's intent of preventing protracted litigation in this arena. Id. at 593-94, 741 A.2d at 1253. [20] On the other hand, in Washington Arbitration, an interest arbitration award requiring a municipality to pay hospitalization insurance premiums for its police officers' family members was deemed to represent an excess of powers because such payments were prohibited by statute. See Washington Arbitration, 436 Pa. at 178, 259 A.2d at 443. Given the narrow confines to which this Court has historically adhered in applying the excess-of-authority prong, we are not convinced that an award requiring the conferral of litigation benefits in situations where the employer already retains discretion to confer those benefits is judicially voidable. For one thing, as the Union points out, it does not require an illegal act or an act that the employer could not undertake voluntarily. Moreover, except in the most egregious cases of employee misconduct (discussed below), the benefits constitute legitimate terms or conditions of employment. In this latter respect, we find Washington Arbitration to be particularly helpful, not only because it illustrates the type of award that is properly considered to reflect an excess of the arbitration panel's powers, but because it is the seminal case stating what that terminology means. The Court explained: [W]e are of the opinion that [arbitration] panels may not mandate that a governing body carry out an illegal act. We reach this result by quite frankly reading into the enabling legislation the requirement that the scope of the submission to the arbitrators be limited to conflicts over legitimate terms and conditions of employment. Were this not so, virtually any issue could be submitted to the arbitrators under the guise of a labor conflict. . . . The essence of our decision is that an arbitration award may only require a public employer to do that which it could do voluntarily. We emphasize that this does not mean that a public employer may hide behind self-imposed legal restrictions. Id. at 176-77, 259 A.2d at 442 (emphasis in original). Thus, the genesis of the excess-of-powers prong of narrow certiorari review lies in the requirement that the contested award deal only with legitimate terms and conditions of public employment. Here, we have already determined that the litigation benefits addressed by Paragraph 18 constitute a bargainable term of employment for the public safety employees who are members of the H-1 bargaining unit. Further, in many instances the Commonwealth, under its own regulations, may provide such benefits through an exercise of its discretion. In keeping with the narrow confines of review for an excess of the arbitrators' authority, we find that an award affirmatively requiring such benefits in the same circumstances where they are discretionary is not beyond the arbitrators' power, as it does not require an illegal act. Put differently, the Award's removal of any discretion embodied in Sections 39.1 through 39.3 does not constitute an excess of the arbitrators' authority under Washington Arbitration and its progeny. [21]