Court Opinion

ID: 9697437
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:16:30.524824+00
Date Added: 2024-06-11T18:20:32.379351
License: Public Domain

ORDER
PER CURIAM:
AND NOW, this 30th day of September, 1991, the Application for Reconsideration is granted. Matter to be resubmitted on briefs.
OPINION OF THE COURT
LARSEN, Justice.
This is an appeal from an en banc order of the Commonwealth Court affirming the grant of a preliminary injunction by the Court of Common Pleas of Philadelphia County. Appellees District Council 33 of AFSCME, et al. (Union), instituted the underlying action seeking to enjoin appellants City of Philadelphia, et al. (City), from enforcing Philadelphia Ordinance 1107, which would have put Municipal Retirement System Benefit Plan 1987 into effect. That plan, commonly known as Plan 1987, differed significantly and adversely from the benefit plan contained in the collective bargaining agreement then in effect between the parties. The issues raised by this appeal are (1) whether the Court of Common Pleas had subject matter jurisdiction over this action; and (2) whether the Union was entitled to preliminary injunctive relief enjoining the City from enforcing Philadelphia Ordinance 1107 as it pertains to the Union.
On July 22, 1986, the parties agreed to continue in effect, until June 30, 1988, the provisions of their previous collective bargaining agreement, including the pension and retirement benefit provisions referred to as Plan J. In December of 1984, the legislature had enacted the Municipal Pension *358Plan Funding Standard and Recovery Act1 (Act 205), which establishes procedures whereby, among other things, municipalities with financially distressed pension plans could avail themselves of the Act’s special relief provisions. Depending on the municipality’s degree of financial distress, as determined by the Public Employee Retirement Study Commission (Commission), a municipality could elect to participate in one of the program’s three levels of recovery. A municipality’s participation in the program affords the municipality financial and other benefits, while imposing obligations on new municipal employees designed to restore actuarial health to the ailing pension plan.
The Commission evaluated the financial condition of the City’s pension plan and determined that the City’s plan was “severely distressed.” This being the worst rating, the Commission found that the City was entitled to participate in Level III of the recovery program. The City then elected to participate in the program at that level.
One of the mandatory remedies required of Level III participants is:
The establishment of a revised benefit plan for newly hired municipal employees.... The revised benefit plan shall have a normal cost which is less than the normal cost of the benefit plan applicable to current municipal employees as reported in the most recent prior actuarial valuation report of the pension plan.
53 P.S. § 895.606(b)(2). Act 205 also provides that, “[n]otwithstanding any provision of law, municipal charter, municipal ordinance, municipal resolution, or pension plan agreement, document or instrument to the contrary, the remedies specified in this section shall be available to the applicable municipalities.” 53 P.S. § 895.607(a).
Philadelphia Ordinance 1107, passed on January 8, 1987, was designed to comply with the Act 205 requirement of establishing a revised benefit plan. The ordinance contained new benefit provisions, known as Plan 87, which *359differed significantly from the Plan J provisions then currently in effect. Plan 87 changed the eligibility requirements making it more difficult to be eligible for benefits, altered the benefit calculation formula so as to reduce benefits and eliminated service-connected disability benefits for newly hired employees.
On January 14, 1987, the Union filed its complaint in equity claiming that the City, through Ordinance 1107, had unilaterally abrogated the pension provisions of the collective bargaining agreement and impaired the obligations of the contract in violation of the Pennsylvania and United States constitutions. The Union sought injunctive and declaratory relief. That same day, the Union filed a motion for preliminary injunction.
After a hearing, the Court of Common Pleas of Philadelphia County issued an order on March 6, 1987 that (1) preliminarily enjoined the City from enforcing Ordinance 1107, as it pertained to the Union, until the expiration of the collective bargaining agreement, (2) maintained jurisdiction over the matter through June 30, 1988 or until a full hearing on the permanent injunction or other resolution, (3) stated that the injunction might be dissolved upon the City’s showing that enforcement of the injunction would be more harmful than beneficial, and (4) required that the Union post a $15,000 bond. The City appealed, and the Commonwealth Court, sitting en banc, affirmed on December 18, 1987.
The City first asserts that the Court of Common Pleas did not have jurisdiction over this matter. The City characterizes this case as a labor dispute and claims that, as such, the Pennsylvania Labor Relations Board (PLRB) has exclusive jurisdiction over the matter. The Public Employe Relations Act (PERA) provides:
The [PLRB] is empowered, as hereinafter provided, to prevent any person from engaging in any unfair practice listed in Article XII of this act. This power shall be exclusive and shall not be affected by any other means of *360adjustment or prevention that have been or may be established by agreement, law, or otherwise.
43 P.S. § 1101.1301. In accordance with this, this Court has developed a policy of judicial deference where unfair labor practices are involved and has stated that:
[I]f a party directly seeks redress of conduct which arguably constitutes one of the unfair labor practices listed in Article XII (Section 1201) of the PERA, 43 P.S. § 1101.-1201 (Supp.1976), jurisdiction to determine whether an unfair labor practice has indeed occurred and, if so, to prevent a party from continuing the practice is in the PLRB, and nowhere else.
Hollinger v. Department of Public Welfare, 469 Pa. 358, 366, 365 A.2d 1245, 1249 (1976).
Among the unfair labor practices listed in Article XII of the PERA is the refusal to “bargain collectively in good faith with an employe representative which is the exclusive representative of employes in an appropriate unit.” 43 P.S. § 1101.1201(a)(5). The City claims that the subject matter of the Union’s complaint involves a labor dispute over the City’s failure to bargain with the Union about the new pension system, and therefore, the PLRB has exclusive jurisdiction. The Union, on the other hand, maintains that the complaint does not assert unfair labor practices, but rather it asserts a breach of contract and an unconstitutional impairment of the contract and is thus properly before the Court of Common Pleas.
One need only look at the complaint itself to see that the underlying case sounds in contract. In its complaint, the Union raises two contract issues — whether the City’s enforcement of Philadelphia Ordinance 1107 breached the contract and whether that same enforcement violated the protections against laws impairing contracts contained in the Pennsylvania Constitution2 and the United States Con*361stitution.3 Neither issue addresses a failure to bargain, as the City alleges. Moreover, the complaint did not seek relief that would force the City to bargain over the new pension plan. Instead, the complaint sought to enjoin the City from enforcing Ordinance 1107 and to declare the enforcement of the ordinance both a breach of the collective bargaining agreement and an unconstitutional impairment of their contract.
This Court, in Hollinger, supra, held the PLRB’s exclusive jurisdiction over unfair labor practice cases “does not, of course, divest a court of jurisdiction to entertain suits for breach of contract merely because the alleged breach may arguably be an unfair labor practice.” 469 Pa. at 365 n. 10, 365 A.2d at 1249 n. 10 (emphasis in the original). As noted above, the complaint clearly alleges a breach of contract, and as such, the Court of Common Pleas had proper jurisdiction over this matter.
The City’s second issue on appeal is whether the Union was entitled to preliminary injunctive relief enjoining the City from enforcing Philadelphia Ordinance 1107 as it pertains to the Union. The City claims that the Union has not met all of the requirements for a preliminary injunction. The prerequisites for a preliminary injunction, as established by this Court, are:
[F]irst, that it is necessary to prevent immediate and irreparable harm which could not be compensated by damages; second, that greater injury would result by refusing it than by granting it; and third, that it properly restores the parties to their status as it existed immediately prior to the alleged wrongful conduct, (citation omitted). Even more essential, however, is the determination that the activity sought to be restrained is actionable, and that the injunction issued is reasonably suited to abate such activity. And unless the plaintiff’s right is clear and the wrong is manifest, a preliminary injunction will not generally be awarded: Keystone Guild, Inc. v. *362Pappas, 399 Pa. 46, 159 A.2d 681 (1960), and Herman v. Dixon, 393 Pa. 33, 141 A.2d 576 (1958).
Singzon v. Department of Public Welfare, 496 Pa. 8, 436 A.2d 125 (1981).
Where a preliminary injunction is merely prohibitory, as it is here, appellate courts will not review the merits of the controversy but will determine if there were any “apparently reasonable grounds” to support the lower court’s action and will reverse only if no such grounds exist. Mazzie v. Commonwealth, 495 Pa. 128, 432 A.2d 985 (1981).
The City first argues that the Union failed to demonstrate that it was likely to succeed on the merits. The City contends that its unilateral decision to enact the new pension plan for newly hired employees did not, as the Union asserts, constitute a breach of contract or impair the constitutional right to contract. This contention must be rejected.
This Court’s decision in City of Allentown v. Local 302, International Association of Fire Fighters, et al., 511 Pa. 275, 512 A.2d 1175 (1986) establishes the Union’s clear right to relief. That case involved a suit brought by fire fighters challenging the validity of an ordinance pursuant to which all fire fighters hired after a certain date were ineligible for membership in the City of Allentown’s pension fund and were required to participate in a plan established by the Pennsylvania Municipal Retirement Law of 1974.4 The fire fighters argued that the new plan was contrary to the collective bargaining agreement then in effect between the parties. In City of Allentown, we held that the “unilateral decision by the City to initiate new pension terms for some members of the bargaining unit constituted a breach of the collective bargaining agreement.” Id., 511 Pa. at 287, 512 A.2d at 1181. “Once the matter is included in a collective bargaining agreement, it becomes, like any other contractual provision, binding on the parties to the agreement.” Id,. If we were to allow provisions of a collective bargaining *363agreement to be unilaterally altered, we would effectively render the collective bargaining process a nullity.
The City asserts that both the trial court and the Commonwealth Court incorrectly relied on City of Allentown as controlling and dispositive of this issue because that case did not involve, as herein, an Ordinance enacted for the economic promotion of the Commonwealth. The City points out that the legislature passed Act 205 to prevent the impending funding crises of municipal government retirement systems. However, this Court has also held that unilateral, governmental action breaching employees’ contractual rights is an unconstitutional impairment of contract, despite having as its purpose the economic enhancement of the Commonwealth. Association of Pennsylvania State College and University Faculties, et al., v. State System of Higher Education, et al., 505 Pa. 369, 479 A.2d 962 (1984).
The City also suggests that City of Allentown is distinguishable because in that case the City of Allentown elected to revise its benefit plan and in the case herein Act 205 forced the City to do so by "requir[ing] a municipality seeking assistance to take certain steps,” which include instituting a revised benefit plan (Appellants’ Brief at p. 10). The City misstates the facts. The City herein chose to participate in the Act 205 recovery program and was not statutorily compelled to do so, just as the City of Allentown chose to change its benefit plan. Furthermore, the City chose to participate specifically at Level III of the program and not at either of the two other levels that do not require a revised benefit plan. Therefore, City of Allentown is not distinguishable but instead is controlling here. Applying the holding of City of Allentown to the facts of the instant case, it is clear that “apparently reasonable grounds” exist to support the trial court’s action.
The City next argues that the Union failed to show that it would suffer immediate or irreparable harm as a result of the City’s enforcement of Philadelphia Ordinance 1107. Testimony offered at the hearing revealed that enforcement *364of Plan 87 would result in an immediate diminution of benefits to members of the Union compared to the benefits provided under the existing Plan J (H.T., 1/30/86, pp. 13-18). Based on this, the trial court inferred that the Union would sustain a permanent membership loss resulting from the City’s unilateral diminution of benefits. The trial court further inferred that the loss would be both immediate and irreparable because neither current nor future union members would have any use for a union powerless to enforce its current collective bargaining agreement. Given the evidence presented at the hearing and the trial court’s reasonable inferences, there are “apparently reasonable grounds” for the trial court’s conclusion that the Union would sustain immediate and irreparable harm as a result of the City’s enforcement of Philadelphia Ordinance 1107.
Finally, the City argues that the public interest would be adversely affected by an injunction. Among the factors that a court must weigh in deciding whether or not to grant a preliminary injunction is the effect such a preliminary injunction would have on the public interest. Valley Forge Historical Society v. Washington Memorial Chapel, 493 Pa. 491, 501, 426 A.2d 1123, 1129 (1981); McMullan v. Wohlgemuth, 444 Pa. 563, 572-73, 281 A.2d 836, 841 (1971).
The City relies on Leonard v. Thornburgh, 75 Pa.Cmwlth.Ct. 553, 463 A.2d 77 (1983), where the Commonwealth Court addressed a taxpayer’s action to enjoin the City of Philadelphia from collecting its wage tax at different rates for residents and non-residents. In Leonard, the Commonwealth Court found that the taxpayer was likely to succeed on the merits but denied the preliminary injunction nonetheless. The court held that the enjoining of the collection of the wage tax would create a $60 million deficit and propel the City of Philadelphia into a “state of fiscal paralysis.” Id., 75 Pa.Cmwlth.Ct. at 564, 463 A.2d at 82.
In the instant case, the City alleges that participation in the Act 205 recovery program would require the City to change its actuarial funding standard to include a “level dollar amortization payment schedule.” Such a change *365would increase the City’s mandatory contribution to the pension system from $95 million, the amount currently appropriated, to $177 million. Additionally, the City contends that because of the injunction it would not be eligible to receive between $27 million and $30 million in supplemental state assistance available to Level III participants. In effect, the City alleges that the public interest would be adversely affected because the City would be required to expend an additional $82 million and forego receiving substantial supplemental state assistance.
In point of fact, Act 205 provides for delayed implementation of the mandatory funding standard, and as such, the City would not have to expend the additional $82 million. See 53 P.S. §§ 895.606(a)(4), 895.607(g) and 895.607(h). As for the loss of supplemental state assistance, the trial court held that the City did not offer any evidence that it would be barred from participating in the recovery program and lose money if the preliminary injunction were granted. Moreover, the preliminary injunction issued by the trial court retained jurisdiction over the matter and stated that the injunction might be dissolved upon a showing by the City that enforcement of the injunction would be more harmful than beneficial. The City has made no such showing. Therefore based on the above, there are “apparently reasonable grounds” to support the trial court’s determination that the public interest would not be adversely affected by a preliminary injunction.
Accordingly, we affirm the decision of the Commonwealth Court, which affirmed the decision of the Court of Common Pleas granting appellees’ request for a preliminary injunction.
ZAPPALA, PAPADAKOS and CAPPY, JJ., join in this opinion.
NIX, C.J., filed a dissenting opinion joined by FLAHERTY and McDERMOTT, JJ.

. Act of December 18, 1984, P.L. 1005, as amended, §§ 101-803, 53 P.S. §§ 895.101-895.803.

. "No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed." Pa. Const. art. I, § 17.

. "No state shall ... pass any ... law impairing the obligation of contracts.” U.S. Const. art. I, § 10, cl. 1.

. 53 P.S. §§ 881.101-881.501.