Court Opinion

ID: 9709999
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:59:15.051849+00
Date Added: 2024-06-11T18:22:53.115473
License: Public Domain

CONCURRING AND DISSENTING OPINION BY
Senior Judge FRIEDMAN.
I agree with the majority that the workplace tobacco use provision of the interest arbitration award (Award) does not require that the Commonwealth of Pennsylvania (Commonwealth) violate section 701 of the Public Employe Relations Act (PERA).1 However, I disagree that: (1) the Pennsylvania State Corrections Officers Association (Association) waived its challenge to the Award’s increase in the retiree contribution rate for health care benefits;2 and (2) the Award’s failure to include arbitration as the final step in the procedure for food quality grievances requires that the Commonwealth violate section 903 of PERA.3
The Association and the Commonwealth were engaged in collective bargaining for an agreement that was to be effective on July 1, 2008, when the negotiations reached an impasse. The impasse was submitted to an arbitration panel, which, after a hearing, issued the Award. The Association has petitioned this court for review.4
*1242I. Health Care Contribution Rate
The Association argues that the arbitration panel exceeded its power and deprived employees of their constitutional right to protection from laws impairing the obligation of contracts by issuing an award that eliminates the 1% cap on the contribution rate for retiree health care benefits.
A. Waiver
The majority holds that this issue is waived pursuant to Pa. R.A.P. 1551(a) (stating, inter alia, that issues not raised before a “government unit” are waived unless the petitioner could not have raised the question by the exercise of due diligence) and Pa. R.A.P. 1025 (defining the words “government unit” to include an arbitration panel) because the Association did not raise it before the arbitration panel. However, the Commonwealth does not argue that the issue is waived pursuant to these rules; the Commonwealth argues that the issue is waived pursuant to Pa. R.A.P. 302(a) (relating to the waiver of issues not raised before a lower court), which does not apply here. (See Commonwealth’s brief at 11-12.)
Moreover, this court recently rejected a waiver argument in an interest arbitration case, in part, because the party “did not know the provisions of the award before it was issued” and because the party “advanced its specific contentions of divergence at the earliest possible time through its prompt application for relief to the ... court.” City of Scranton v. Fire Fighters Local Union No. 60, 964 A.2d 464, 489 (Pa.Cmwlth.2009). The same reasoning applies here.
Finally, this court has held that where there is an interest arbitration award, a party may assert the illegality of a provision of the award in a subsequent proceeding because the party had no opportunity to bargain with respect to the award’s term. Lee v. Municipality of Bethel Park, 722 A.2d 1165 (Pa.Cmwlth.1999) (holding that a municipality that failed to challenge an interest arbitration award could assert the illegality of the award in a subsequent declaratory judgment action); Borough of Dormont v. Dormant Borough Police Department, 654 A.2d 69 (Pa.Cmwlth.) (holding that a borough that failed to challenge an interest arbitration award could assert the illegality of the award in a subsequent grievance arbitration proceeding) appeal denied, 541 Pa. 628, 661 A.2d 875 (1995). If the Association could raise any argument in a later proceeding to challenge the legality of the retiree contribution rate increase, it makes no sense to hold that the Association waived its argument on appeal. Thus, I now address the merits of the issue.6
B. Merits of the Issue
In Appeal of Upper Providence Township, 514 Pa. 501, 526 A.2d 315 (1987), our supreme court held that arbitrators exceeded their powers, i.e., mandated a violation of law, when they eliminated post-retirement hospital and medical benefits in an interest arbitration award. The court based its holding on a statutory provision that prohibits home rule municipalities from diminishing the rights or privileges of any present or former employee in his pension or retirement system. Id.
In City of Pittsburgh v. Fraternal Order of Police, 595 Pa. 47, 938 A.2d 225 (2007), our supreme court held that arbitrators did not exceed their powers by placing a cap on the City’s contribution to the cost of *1243health care for retiring officers. The court explained that, despite a statutory provision prohibiting the City from diminishing the rights and privileges of any present employee in his pension or retirement system, the arbitrators’ award did not diminish any retirement rights and privileges because the cap on the City’s contribution existed in the previous collective bargaining agreement. Id.
Here, the Association does not rely on any statutory provision that prohibits the Commonwealth from diminishing retiree health benefits. Instead, the Association correctly asserts that retiree health benefits are deferred compensation for services rendered in the past, thus reflecting a contractual right to the benefit. Borough of Hanover v. Hanover Borough Police Officers Association, 850 A.2d 765 (Pa.Cmwlth.2004) (stating that retiree medical benefits constitute deferred compensation for services actually rendered in the past, thus reflecting contractual rights), appeal denied, 582 Pa. 689, 870 A.2d 324 (2005); Borough of Elizabethtown v. Elizabethtown Non-Supervisory Police Negotiating Committee, 719 A.2d 1144 (Pa.Cmwlth.1998) (holding that medical insurance benefits awarded in the future constitute deferred compensation for services rendered in the past).
The Association contends that, given the contractual right to the previously earned health benefits, the Award diminishing those benefits requires that the Commonwealth violate constitutional provisions prohibiting laws impairing the obligation of contracts. See U.S. Const, art. I, § 10; Pa. Const, art. I, § 17. However, the elimination of the 1% cap on the retiree contribution rate for health care benefits is a bargaining agreement provision, not a law. Moreover, this court has stated that there is no legal authority limiting the ability of arbitrators to modify retirement benefits as part of interest arbitration. City of Pittsburgh v. Fraternal Order of Police, 911 A.2d 651 (Pa.Cmwlth.2006) (citing City of Wilkes-Barre v. City of Wilkes-Barre Police Benevolent Association, 814 A.2d 285 (Pa.Cmwlth.2002), appeal denied, 573 Pa. 686, 823 A.2d 146 (2003)), aff'd on other grounds, 595 Pa. 47, 938 A.2d 225 (2007).
Accordingly, I would affirm the Award’s retiree health care contribution rate provision.
II. Arbitration for Food Grievances
The Award requires that food provided to members of the bargaining unit be fresh and edible and that, “[i]n the event that a grievance is filed related to this provision, the grievance may be pursued only through Step 2 of the H-l Alternative Dispute Resolution (ADR) Process and the decision of the Joint Committee shall be final and binding.” (Association’s brief at 20.) Step 3 of the ADR Process would have allowed an appeal to an impartial arbitrator from a deadlocked decision at Step 2. (R.R. at 68a-69a.)
The Association argues that, in eliminating Step 3 arbitration, the award mandates that the parties to the agreement violate section 903 of PERA, which provides, in pertinent part:
Arbitration of disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement is mandatory. The procedure to be adopted is a proper subject of bargaining with the proviso that the final step shall provide for a binding decision by an arbitrator or a tri-par-tite board of arbitrators as the parties may agree....
43 P.S. § 1101.903 (emphasis added). However, this court stated in Municipal Employees Organization of Penn Hills v. Municipality of Penn Hills, 876 A.2d 494 (Pa.Cmwlth.), appeal denied, 586 Pa. 731, 890 A.2d 1062 (2005), that arbitration is *1244mandatory under section 903 of PERA unless the union expressly waives the statutory right. Because the Association can voluntarily waive the statutory right to arbitration, the Award does not mandate an illegal act.7
Accordingly, I would affirm the Award on this issue.

. Act of July 23, 1970, P.L. 563, as amended, 43 P.S. § 1101.701. Section 701 of PERA requires that a public employer and public employees confer in good faith with respect to wages, hours and other terms and conditions of employment. Id. The Award's tobacco use provision allows the Commonwealth to establish a workplace tobacco use policy after a meet and discuss with the union. As the majority states, there is no dispute that the arbitration panel could have prohibited smoking altogether. (Majority op. at 1240.)

. The Award's retiree health care provision eliminates a 1% cap on the retiree contribution rate.

. 43 P.S. § 1101.903. Section 903 provides that arbitration is mandatory for disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement. Id.

.Our review of an appeal from an interest arbitration award includes questions regarding whether the arbitrators exceeded their powers. Department of Corrections v. Pennsylvania State Corrections Officers Association, 932 A.2d 359 (Pa.Cmwlth.2007), appeal granted in part, - Pa. -, 971 A.2d 1124 (2009). Arbitrators run up against the limits of their powers when they order an illegal act, i.e., the arbitrators direct the public employer to do that which the employer could not do voluntarily. City of Pittsburgh v. Fraternal Order of Police, 595 Pa. 47, 938 A.2d 225 (2007).

. Although the majority cites Pa. R.A.P. 101 for the definition of "government unit,” the definition is contained in Pa. R.A.P. 102.

. The majority suggests in a footnote that the Association cannot prevail on the merits, but the majority provides no analysis of the issue. (See majority op. at 1239 n. 5.)

. To the extent the majority holds that the Association could not waive the statutory right to arbitration, the majority implicitly overrules Penn Hills. However, a three-judge panel of this court cannot overrule another three-judge panel decision of this court.