Court Opinion

ID: 4965521
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:15:45.243245+00
Date Added: 2024-06-11T08:16:06.889687
License: Public Domain

DISSENTING OPINION BY
Judge PELLEGRINI.
The only issue before us is whether Section 2962(c)(3) of the Home Rule Charter and Optional Plans Law (Law)1 prohibits an arbitration award in home rule municipalities from post-retirement benefits for current employees. Without making an independent analysis, the majority’s sole reason for finding that an arbitration award cannot reduce those benefits is based on its belief that the question is controlled by our Supreme Court’s decision in Appeal of Upper Providence Township, 514 Pa. 501, 526 A.2d 315 (1987) (Upper Providence), which it contends mandates such a result. I disagree with the majority because our decision in City of Pittsburgh v. Fraternal Order of Police, 911 A.2d 651 (Pa.Cmwlth.2006) (FOP II), at the express invitation of our Supreme Court to address that issue, held that Upper Providence does not control, and based on an independent analysis of Section 2962(c)(3) of the Law, held that such an award does not prohibit an arbitration award or a collective bargaining agreement from reducing future benefits. Before addressing why Upper Providence does not control, a review of the “clean slate” analysis of why that provision does not prevent an arbitration award from reducing benefits would is useful.
53 Pa.C.S. § 2962(c)(3) provides that a municipality shall not “[b]e authorized to diminish the rights or privileges of any former municipal employee entitled to ben*1017efits or any present municipal employee in his pension or retirement system.” (Emphasis added.) In FOP II, we held that provision does not preclude, through collective bargaining, diminishing of pension benefits awarded through the collective bargaining contract or interest award because benefits so awarded were not part of “rights or privileges ... any present municipal employee [had] in his or [her] pension or retirement system.” 911 A.2d at 656. We explained that prior to the enactment of a Home Rule Charter, Act 1112 or Act 195,3 the General Assembly had created pension systems for most classes of municipalities. When the General Assembly implemented the constitutional requirement in 1972 by adopting the Home Rule and Optional Plans Law, home rule municipalities were given the right to change statutes that were not of statewide application. See Appeal of Upper Providence Township (Upper Providence I), 93 Pa.Cmwlth. 272, 502 A.2d 263 (1985). Because no municipal pension statute was statewide in application, the General Assembly was concerned that home rule municipalities would take it upon themselves to unilaterally change the statutorily-created pension systems. It foreclosed that possibility when it provided in 53 Pa.C.S. § 2962(c)(3) that home rule did not include that power for present employees. Moreover, unlike its language relating to retired employees where no “benefits” could be reduced, Section 2962(c)(3) of the Law provided that for “present” employees, only specifically identified benefits, i.e., those awarded as part of the “pension or retirement system,” could not be reduced. The use of the term “system” is also particularly pertinent because the statutory retirement system administered at the state level are called systems, e.g., Public School Employee Retirement; State Employee Retirement System and other pension plans created by statute.4
Moreover, the origin of that provision shows that it can only refer to the benefits awarded pursuant to statutory pension systems, not through collective bargaining. Section 2962(c)(3) of the Law is based on Section 305 of the Optional Third Class City Law, Act of July 15, 1957, P.L. 901, 53 P.S. § 41305, which provided that “[t]he charter of any city adopted in accordance with this act shall not give any power or authority to diminish any rights or privileges of any present city employe in his pension or retirement system.” That provision of the Optional Third Class City Law was enacted in 1951, approximately 30 years before the enactment of Act 111 and Act 195 that gave employees the right to bargain, and in the case of police and fire employees, the right to interest arbitration. That means that the term “pension or retirement system” could only refer to the statutory benefits granted by the General Assembly because there was *1018no collective bargaining when that provision was enacted.
Finally, all that Section 2962(c)(3) of the Law states is that a municipality cannot unilaterally reduce pension benefits for current employees, not that it could not reduce them through collective bargaining. Recently, our Supreme Court in City of Erie v. Pennsylvania Labor Relations Board, — Pa. —, 32 A.3d 625 (2011), implicitly recognized that through collective bargaining, future benefits for current employees could be reduced. In that case, the City of Erie, an Optional Third Class Charter City, ceased a Deferred Retirement Option Plan under which retiring firefighters could elect to receive a lump-sum payout at retirement in exchange for a lower monthly pension benefit. In the opening paragraph of its opinion in City of Eñe, the Supreme Court stated that the issue before it was as follows:
In this appeal by allowance, we consider, inter alia, whether a public employer committed an unfair labor practice when it unilaterally eliminated firefighter pension benefits, which were found to be legal, without first collectively bargaining with the firefighters’ representative. The Collective Bargaining by Policemen and Firemen Act, commonly known as Act 111 (“Act 111”), by its express terms, requires negotiation over the modification or elimination of pension benefits, and we find no applicable exception to this statutory mandate. (Emphasis added.)
City of Erie, 32 A.3d at 627.
Nothing in Section 2962(c)(3) of the Law precludes the elimination of a future benefit or deferred benefit for a present gain as long as it is not done unilaterally by the home rule employer.
Notwithstanding all of that, if our Supreme Court held in Upper Providence that current employees’ benefits cannot be reduced, we are bound to follow that decision. While the majority believes that it did, apparently our Supreme Court was not so certain because rather than reversing our decision in FOP I5, it remanded to this Court for a determination of whether it was, in fact, controlling. In FOP II, as in this case, the public employer was a home rule municipality, and an arbitration award changed post-retirement health care benefits for current employees. The issue before us in that appeal was identical to the one presented here — whether Upper Providence addressed if under 53 Pa.C.S. § 2962(d), home rule municipalities were not authorized to diminish the rights or privileges of any former municipal employee entitled to benefits or any present municipal employee in his or her pension. In answering the question the Supreme Court instructed us to address, we held that it did not because the issue of current employees was not before the Supreme Court in Upper Providence. We explained:
The FOP argues that it covers present employees pointing out that Justice Larsen stated that the “home Rule Act [prohibited home rule municipalities] from voluntarily eliminating the post-retirement hospital and medical benefits for present and former employees.” (Emphasis added.) However, this language was, at best, dicta and more likely a stray comment because the issue addressed at all stages in the proceedings was whether post-retirement medical benefits could be provided to retired *1019employees and their families, not whether benefits could be reduced prior retirement. Moreover, throughout the rest of the opinion, the class of “employee” being addressed was “former” or “retired employees.” To answer, then, the precise question framed to use by our Supreme Court, “Whether the Commonwealth Court’s decision permitting the reduction of post-retirement healthcare benefits for active officers conflicts with the Supreme Court decision in Appeal of Upper Providence Township, 514 Pa. 501, 526 A.2d 315 (Pa.1987),” [sic] for those reasons set forth above, it appears that it does not. (Bold in original.)
FOP II, 911 A.2d at 655. Contrary to the majority’s mistaken impression that the matter was remanded to us to apply Upper Providence and we refused to do so, in FOP II, we did exactly what the Supreme Court instructed us to do and found that Upper Providence was not controlling. Tellingly, while our Supreme Court affirmed FOP II on other grounds, it did not disavow our reasoning, instead stating that: “We issue no pronouncement on the soundness of the Commonwealth Court’s rationale for distinguishing Upper Providence from the matter sub judice.” FOP II, 595 Pa. at 57, 938 A.2d at 232 n. 10. Because we held in FOP II that Upper Providence does not preclude the reduction in benefits for current employees and that was not disavowed by the Supreme Court, that decision is controlling, especially given the recent Supreme Court decision in City of Erie.
For the foregoing reasons, I respectfully dissent.
President Judge LEADBETTER and Judge COHN JUBELIRER join in this dissenting opinion.

. 53 Pa.C.S. § 2962(c)(3).

. Act of June 24, 1968, P.L. 237, as amended, 43 P.S. §§ 217.1-217.10.

. The Public Employe Relations Act, Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§ 1101.101-1101.2301.

. See the Second Class City Code, Act of August 1, 1975, P.L. 169, > 53 P.S. §§ 23641- > 23666 (Policemen’s Relief and Pension Fund); the Second Class A City Code, Act of July 3, 1947, P.L. 1242, as amended, > 53 P.S. §§ 30491-30515.1 (Policemen and Firemen's Pension Funds); the Third Class City Code, Act of May 29, 1956, P.L. (1955), as amended, 53 P.S. §§ 761-778 (Police Pension Fund); the First Class Township Code, Act of June 24, 1931, P.L. 1206, as amended, 53 P.S. §§ 56409-56413; the Second Class Township Code, Act of May 1, P.L. 1933, P.L. 103, reenacted and amended, November 9, 1995, P.L. 350, 53 P.S. §§ 66910; the Borough Code, Act of February 1, 1966, P.L. (1965) 1656, as amended, 53 P.S. §§ 46131-46137 (Police Pension Fund). None of these Codes provide for post-retirement medical benefits.

. In City of Pittsburgh v. Fraternal Order of Police, 850 A.2d 846 (Pa.Cmwlth.2004) (FOP I), we only addressed the issue of Section 2962(c)(3) in a footnote stating that a home rule municipality was foreclosed from unilaterally changing pensions by passing an ordinance and that it did not foreclose reduction in benefits for employees through the collective bargaining process or an Act 111 arbitration award.