Court Opinion

ID: 2815211
Source: CourtListenerOpinion
Date Created: 2015-07-08 13:18:13.184955+00
Date Added: 2024-06-11T11:30:35.113047
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Pennsylvania Turnpike Commission,           :
                       Petitioner           :
                                            :
             v.                             :   No. 89 C.D. 2015
                                            :   Argued: June 18, 2015
Teamsters Local Union No. 250,              :
                       Respondent           :

BEFORE: HONORABLE DAN PELLEGRINI, President Judge
        HONORABLE BERNARD L. McGINLEY, Judge (P.)
        HONORABLE P. KEVIN BROBSON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE BROBSON                                FILED: July 8, 2015

             The Pennsylvania Turnpike Commission (Commission) petitions for
review of the December 22, 2014, arbitration award (Award) sustaining Teamsters
Local Union No. 250’s (Local 250) grievance that the Commission violated their
Collective Bargaining Agreement (CBA) by subcontracting grass mowing work
previously performed by Local 250 members. We now affirm.
             The Commission, Local 250, and Teamsters Local Union No. 77
(Local 77) are parties to a CBA.1 The Commission is responsible for the operation
and maintenance of the Pennsylvania Turnpike (Turnpike). Local 250 represents
Turnpike toll collectors and maintenance employees who work on the western half

      1
         The CBA was effective October 1, 2007, through September 30, 2011. Although the
CBA has expired, the parties are still operating under its terms and conditions while they
negotiate a new collective bargaining agreement.
of the Turnpike, and Local 77 represents those who work on the eastern half of the
Turnpike.
                 Local 250 and Local 77 filed grievances alleging that the Commission
violated the terms of the CBA by subcontracting mowing work that was previously
completed by maintenance employees of Local 250 and Local 77.                         The
Commission denied the grievance, claiming that under the CBA, the Commission
had the right to subcontract mowing work on “the property that the [T]urnpike
purchases off the system.” (Reproduced Record (R.R.) at 57a.) The parties later
agreed to hold Local 250’s grievance in abeyance pending the outcome of Local
77’s grievance. (Id. at 58a.) An arbitrator sustained Local 77’s grievance and
ordered the Commission to cease and desist the subcontracting of mowing work
and to “make payment to . . . [Local 77] for the hours of work performed by the
subcontractor at the prevailing average straight time hourly wage in effect for
bargaining unit members who would have done the job.” (Id. at 81a.) On appeal,
this Court vacated the monetary portion of the arbitrator’s award, concluding that it
constituted an impermissible punitive damages award.2
                 After the resolution of Local 77’s grievance, Local 250 proceeded
with its grievance. Arbitrator Atul S. Maharaja, Esq. (Arbitrator), conducted a
hearing and issued an opinion sustaining Local 250’s grievance. The Arbitrator
considered the following relevant provisions of the CBA, relating to management
rights, overtime, and subcontracting:

         2
             See Pa. Tpk. Comm’n v. Teamsters Local Union No. 77, 87 A.3d 904 (Pa. Cmwlth.
2014).

                                              2
        ARTICLE 2: MANAGEMENT RIGHTS
Section 1. Except as expressly limited by relevant
statutes and codes or provisions of this agreement and
reserving unto the Commission any and all management
rights which, by law, may not be bargainable, the
Commission shall have and retain, solely and
exclusively, all other managerial responsibilities, power
and authority, which shall include, but not be limited to:
the right to establish policies; to establish, change or
abolish job classifications or the job content of any
classification; to hire, retire, demote, layoff and recall
employees to work; to control and regulate the use of
machinery, equipment and other property of the
Commission; to introduce new or improved research,
development and services; to determine the number and
types of employees required and to assign work to such
employees in accordance with operational needs of the
Commission; and to direct the work force, except as
expressly modified or restricted by a specific provision of
this agreement.       Absent an emergency or other
operational need, the Commission will provide . . . [Local
250] with any new or revised policy 15 days prior to
implementing the same.
Section 2. The listing of specific rights in this
agreement is not intended to be nor shall it be considered
restrictive or a waiver of any of the rights of management
not listed and not specifically surrendered herein whether
or not such rights have been exercised by the
Commission in the past.
...
                ARTICLE 9: OVERTIME
Section 1. All employees covered herein shall receive
one and one-half (1-1/2) times their regular hourly rate of
pay for all hours worked in excess of eight (8) or ten (10)
hours in any work day as defined in Article 8 hereof or
forty (40) hours in any pre-established work week except
in case of a tour swap or any other exception specified
elsewhere in this agreement.           There shall be no
duplication or pyramiding of any premium pay provided
for under the provisions of this agreement for the same
hours worked.
                            3
Section 2.
...
       B.      Maintenance and Construction
       When the need for overtime arises in Maintenance
and Construction, the Commission shall assign overtime
from a list of qualified employees within the job
classifications who normally perform such work at the
location on the basis of their status on the overtime
seniority list. Assignments from said list shall be rotated
in descending order of seniority: The objective is to
provide a reasonable procedure for affording employees
overtime work opportunities as the need arises. Once an
employee is offered overtime, he shall not be offered
another overtime assignment until all employees on said
list below him in seniority have been afforded the
opportunity to work overtime. Any employee on said list
who is not available at the time the overtime work arises
or who declines an offer of overtime work shall be
credited for the assignment solely for purposes of the
rotation. The supervisor, or his designee, shall be
responsible for maintaining said overtime list and shall
indicate the employees eligible for any overtime
assignments. All calls for overtime shall be verified by
the job steward or another employee, if readily
available. . . . In the Maintenance Department, an
overtime opportunity will not be charged until four (4)
hours of overtime have been accumulated. During winter
shifting, employees shall be credited for an overtime
opportunity for each eight (8) hours worked.
...
Section 11.
...
       A.      Consistent with Article 9, in the event that
overtime opportunities are refused by all employees, the
overtime shift shall be assigned to the employee currently
working with the least amount of seniority. This will be
known as a “forced overtime assignment[.”]

                            4
                     B.     When an additional “forced overtime
              assignment” is required during the twenty-eight (28) day
              work schedule, the next least senior employee currently
              working shall be required to work the overtime shift.
                     C.     All future “forced overtime assignments”
              arising during a twenty-eight (28) day work schedule
              shall be made in inverse order of seniority.
              ...
                     ARTICLE 17: GENERAL PROVISIONS
              ...
              Section 3. SUBCONTRACTING
              The Commission may subcontract new construction; the
              reconstruction and rehabilitation of roadways, structures
              and facilities; the installation of new equipment; and all
              work incidental to the foregoing; and original equipment
              and facility warranties. The Commission agrees that it
              will not subcontract other work which, by past practice
              or tradition, it has not heretofore subcontracted. The
              Commission may subcontract work that either the
              employees are incapable of competently performing or
              which the Commission lacks the necessary manpower
              and/or equipment with which to perform such work.

(Id. at 6a, 16a-19a, 36a-37a (emphasis added).) After considering the provisions of
the CBA, the Arbitrator determined:
              In the present hearing it was clearly established that in
              the past mowing was, when necessary, done on regular
              and/or overtime basis. The [CBA] has clearly spelled out
              not only the management’s right to demand overtime but
              also the concept of “forced overtime[.]” Since the parties
              have negotiated the management’s right to demand
              overtime it is an implied promise to utilize overtime
              rather than out side [sic] contractors. Mr. Garrison’s[3]

       3
          Todd Garrison, Director of Maintenance for the Commission, testified before the
Arbitrator. The Arbitrator explained that Mr. Garrison believed that Local 250 did not have the
manpower to maintain the grass at the Commission’s offsite properties. (Award at 38.) Mr.
(Footnote continued on next page…)

                                              5
              testimony is very clear he would rather use
              subcontractors than bargaining unit employees. The
              Commission has the responsibility and authority to direct
              the working forces. If an insufficient number of
              employees volunteer to perform particular work, the
              Commission’s responsibility includes directing them to
              perform it. Directing the requisite number of employees
              to perform the work would have relieved the
              Commission of contracting out the work. Mr. Garrison
              was very clear that he was not going to use overtime for
              mowing even though he admits that not utilizing
              overtime is a lost opportunity for work.
              ...
              Based on the . . . facts it is very clear that there was no
              lack of manpower to carryout [sic] the [b]argaining [u]nit
              work, if employees would have been scheduled and/or
              directed to perform the work as per the CBA.

(Award at 40.) In sustaining Local 250’s grievance, the Arbitrator ordered the
Commission to cease and desist subcontracting the mowing work and to determine,
in conjunction with Local 250, “the number of hours performed by the
subcontractor and compensate [Local 250] employees who would have performed
said work. The rate shall be at the straight time hourly rate.” (Id. at 41.) The
Commission appealed to this Court.
              On appeal,4 the Commission first argues that the Award does not
satisfy the essence test because it is not rationally derived from the CBA. Next, the

(continued…)

Garrison could only testify to the performance of mowing work during his three years of
employment with the Commission. (Id.) Three Local 250 witnesses testified that the mowing
work was never done by subcontractors but by Local 250 members on an overtime basis. (Id. at
36-37.)
       4
        The proper standard of review for an appeal of an arbitration award arising under the
Public Employe Relations Act (PERA), Act of July 23, 1970, P.L. 563, as amended, 43 P.S.
(Footnote continued on next page…)

                                             6
Commission contends that the Award contravenes well-settled public policy
concerning the assessment of punitive damages against a Commonwealth agency.
Finally, the Commission argues that the Award contravenes the public policy of
the Public Employe Relations Act (PERA), Act of July 23, 1970, P.L. 563, as
amended, 43 P.S. §§ 1101.101-.2301.              We first address the Commission’s
argument that the Award is not rationally derived from the CBA, and, thus, the
Award fails to satisfy the essence test. Specifically, the Commission contends that
the Award “altered essential terms and conditions of the [CBA]” and “vitiate[d]
entirely the management and subcontracting rights sections of the [CBA] as the . . .
Commission has been stripped of its ability to direct and assign its workforce.”
(Pet’r’s Br. at 13.)
              The “essence test is the standard of review by which courts will
review grievance arbitration awards arising under PERA.”                    Westmoreland
Intermediate Unit # 7 v. Westmoreland Intermediate Unit # 7 Classroom Assistants
Educ. Support Pers. Ass’n, 939 A.2d 855, 863 (Pa. 2007) (Westmoreland I.U. # 7).
An arbitrator’s award satisfies the test if it “draw[s] its essence from the collective
bargaining agreement.” State Sys. of Higher Educ. (Cheyney Univ.) v. State Coll.
Univ. Prof’l Ass’n (PSEA-NEA), 743 A.2d 405, 413 (Pa. 1999). A court reviewing
an arbitrator’s award under the essence test must conduct a two-prong analysis:
              First, the court shall determine if the issue as properly
              defined is within the terms of the collective bargaining

(continued…)

§§ 1101.101-.2301, is the essence test. Westmoreland Intermediate Unit # 7 v. Westmoreland
Intermediate Unit # 7 Classroom Assistants Educ. Support Pers. Ass’n, 939 A.2d 855, 863 (Pa.
2007) (Westmoreland I.U. # 7).

                                             7
            agreement. Second, if the issue is embraced by the
            agreement, and thus, appropriately before the arbitrator,
            the arbitrator’s award will be upheld if the arbitrator’s
            interpretation can rationally be derived from the
            collective bargaining agreement. That is to say, a court
            will only vacate an arbitrator’s award where the award
            indisputably and genuinely is without foundation in, or
            fails to logically flow from, the collective bargaining
            agreement.

Id.
            The Award is rationally derived from the CBA.          The Arbitrator,
reading together Articles 2, 9, and 17 of the CBA, interpreted the CBA as requiring
the Commission to direct employees to perform overtime work in the event that
such work is necessary. The Arbitrator also interpreted the CBA as providing that
employees are entitled to available overtime work if that work was traditionally
performed by Local 250. The Arbitrator found that Local 250 had, in the past,
performed the required mowing work on off-Turnpike properties.                 The
Commission must, therefore, assign overtime mowing work to its employees rather
than subcontractors. The cease and desist order logically flows from the CBA as it
requires the Commission to assign the overtime mowing work to its employees.
The monetary portion of the CBA also logically flows from the CBA, because it
reimburses employees for the overtime wages to which they were entitled but did
not receive due to the Commission’s assignment of mowing work to
subcontractors.   Accordingly, we reject the Commission’s argument that the
Award is not rationally derived from the CBA.
            The Commission next argues that the Award contravenes well-settled
public policy concerning the assessment of punitive damages against a
Commonwealth agency. In Westmoreland I.U. # 7, our Supreme Court adopted a
public policy exception to the essence test. “This exception is grounded in the

                                        8
general rule that a court will not enforce a contract which is unlawful or in
violation of public policy.” Westmoreland I.U. # 7, 939 A.2d at 863. To establish
a violation of public policy, “the public policy must be well defined and dominant
and is to be ascertained by reference to the laws and legal precedents and not from
general considerations of supposed public interests.” Id. (internal quotation marks
omitted).   The party asserting the public policy exception has the burden to
establish a violation of public policy. Id. at 864. The Commission contends that
the Award provides a windfall to Local 250 members who did not lose wages as a
result of subcontracting and, thus, violates the public policy against assessing
punitive damages against Commonwealth agencies.
            In support of this contention, the Commission relies on our Supreme
Court’s decision in City of Philadelphia Office of Housing and Community
Development v. American Federation of State County and Municipal Employees,
Local Union No. 1971, 876 A.2d 375 (Pa. 2005) (City of Philadelphia OHCD). In
City of Philadelphia OHCD, the parties, the City of Philadelphia Office of Housing
and Community Development (OHCD) and the American Federation of State,
County and Municipal Employees, Local Union No. 1971 (AFSCME), were
parties to a collective bargaining agreement which provided that AFSCME
members would exclusively perform home inspections for OHCD. Instead of
assigning the work to AFSCME members, OHCD subcontracted the home
inspections to non-union workers. An arbitrator found that the contracts with
non-union workers violated the collective bargaining agreement and assessed
damages against OHCD which were based on “wages paid to the hypothesized
[AFSCME] workers to repair the ‘vitality’ of [AFSCME].” City of Philadelphia
OHCD, 876 A.2d at 377 (emphasis added). Although the arbitrator found that no

                                        9
AFSCME members were injured, AFSCME members were awarded an amount
equal to what they would have received had they performed the inspections. Id. at
376. OHCD filed a petition to vacate the award, which the Court of Common
Pleas of Philadelphia County denied. Id. OHCD then appealed to this Court. We
concluded that the award did not satisfy the essence test, and we reversed the
award. Id. AFSCME appealed to the Supreme Court of Pennsylvania, which
granted review of the matter. The Supreme Court, in affirming our decision, noted
that AFSCME “would never have received those wages; members might have
received those wages, but . . . [AFSCME] itself would have received only
additional dues from prospective new . . . members.” Id. at 377 (emphasis in
original). “Accordingly, the award fashioned by the arbitrator would give . . .
[AFSCME] a windfall of almost $30,000 per current member. This did not make
[AFSCME] whole, but impermissibly punished OHCD.” Id. The Supreme Court
held that “[t]he arbitrator’s award of punitive damages against OHCD, a
Commonwealth entity, cannot stand because it exacts retribution on the shoulders
of blameless or unknowing taxpayers who would bear the brunt of the award.” Id.
            This Court has addressed the issue in Pennsylvania Turnpike
Commission v. Teamsters Local Union No. 77, 87 A.3d 904 (Pa. Cmwlth. 2014)
(en banc). There, the Commission subcontracted off-Turnpike mowing work and
Local 77 alleged that the Commission violated the subcontracting terms of their
collective bargaining agreement. The arbitrator entered the following award:
            As Arbitrator Stephen M. Schwerin, Esq.[,] held in July
            2010 [in Pennsylvania Turnpike Commission and
            Teamsters Local 250 (Local 250) . . . ] when faced with
            similar facts, the remedy for such a breach is a cease and
            desist order and payment to the [u]nion for the hours of
            work performed by the subcontractor at the prevailing
            average straight time hourly wage in effect for the

                                       10
              bargaining unit members who would have done the job.
              As my colleague did three years ago, I will enter such an
              [a]ward.

Local 77, 87 A.3d at 912-13. This Court vacated the monetary portion of the
arbitrator’s award. In so doing, this Court held:
              The Arbitrator here stated that he was entering the same
              Award as his colleague did in Local 250 based upon
              “similar facts.” . . . Unlike the instant case, in Local
              250, the arbitrator stated that “[t]he Commission makes
              no attempt to address the [subcontracting] requirements.”
              . . . No such finding or conclusion was made in the
              instant case. Here, the Arbitrator did not award damages
              because there were none. Rather, he directed payment to
              . . . [Local 77] and imposed a penalty based on allegedly
              “similar facts” but in actuality different findings.
              Because “under this set of facts, the [A]ward was not to
              make the members whole for lost wages, but to punish
              the [Commission’s] behavior,” this Court holds that the
              monetary portion of the Award impermissibly assessed
              punitive damages against the Commission with the effect
              of punishing taxpayers.[5] Accordingly, that portion of
              the Award is vacated. Phila. Hous. Auth. [v. Am. Fed’n
              of State, Cnty. & Mun. Emps., Dist. Council 47, Local
              2187, AFL-CIO], 945 A.2d [796,] . . . 801 [(Pa.
              Cmwlth.), appeal denied, 960 A.2d 842 (Pa. 2008)].

Local 77, 87 A.3d at 914 (alterations in original) (emphasis added).
              Here, the Commission contends that it is undisputed that Local 250
members did not lose either hours or wages and, therefore, the damages awarded
were punitive and impermissible.              Local 250, however, argued before the
Arbitrator that “but for the improper subcontracting of the work, the employees
would have received additional wages.” (Award at 23.) Local 250 continues to

       5
       Local 250 notes in its brief that the Commission operates on tolls collected, not taxpayer
money. (Local 250 Br. at 17-18.)

                                               11
argue before this Court that its members lost additional work opportunities as a
result of the Commission’s actions.      (Local 250 Br. at 18.)     The Arbitrator
specifically found “that the bargaining unit employees missed earning
opportunities, including overtime.” (Award at 41.) “An arbitrator’s findings of
fact are not reviewable by an appellate court, ‘and as long as he has arguably
construed or applied the collective bargaining agreement, an appellate court may
not second-guess his findings of fact or interpretation.’” Am. Fed’n of State, Cnty.
& Mun. Emps. Dist. Council 47 v. City of Phila., 53 A.3d 93, 97 (Pa. Cmwlth.
2012), appeal denied, 62 A.3d 380 (Pa. 2013). Thus, unlike City of Philadelphia
OHCD and Local 77, the Arbitrator here found that the Local 250 members
incurred monetary damages in the form of lost overtime opportunities.            By
assessing damages against the Commission, the Arbitrator did not seek to punish
the Commission; rather, the Arbitrator intended to compensate Local 250 members
for the wages they would have received but for the Commission’s decision to
subcontract the mowing work.          The imposition of damages against the
Commission is, therefore, compensatory rather than punitive. The Commission
has not established the existence of a public policy against the assessment of
compensatory damages against a Commonwealth entity, let alone a violation of
such a policy. We, therefore, reject the Commission’s argument that the Award
violates the public policy against imposing punitive damages on a Commonwealth
agency.
            Lastly, the Commission argues that the Award contravenes the public
policy of PERA. Specifically, the Commission contends that the Award violates
Section 101 of PERA, which provides that the purpose of PERA is “to promote
orderly and constructive relationships between all public employers and their

                                        12
employes subject, however, to the paramount right of the citizens of this
Commonwealth to keep inviolate the guarantees for their health, safety and
welfare.” 43 P.S. § 1101.101. The Commission also argues that the Award
violates Section 8106 of the Turnpike Organization, Extension and Toll Road
Conversion Act, 74 Pa. C.S. § 8106, which provides:           “The exercise by the
commission of the powers conferred by this chapter in the construction, operation
and maintenance of the turnpikes and in effecting toll road conversions shall be
deemed and held to be an essential governmental function of the Commonwealth.”
             This Court has previously addressed this issue. In Local 77, we
concluded:
             The Award required the Commission to use the [Local
             77] workforce, rather than subcontractors, to mow grass
             at the Commission’s off-Turnpike properties. Based
             upon the [a]rbitrator’s determination, taken from . . .
             [Local 77]’s representations, . . . [Local 77] can still mow
             the grass despite its other Turnpike work. While the
             needs of the traveling public’s safety on the Turnpike is
             obvious, the need to have the grass mowed at
             off-Turnpike properties is not. Given the Arbitrator’s
             findings, and without evidence that the Commission’s
             failure to mow the grass at off-Turnpike properties on a
             regular basis will harm the public’s health, safety and
             welfare, the Award’s cease and desist order does not
             clearly pose an unacceptable risk that it will undermine
             any implicated policy or cause the Commission to breach
             its lawful obligations or public duty.

Local 77, 87 A.3d at 912 (citations omitted).
             The instant matter is analogous, in this respect, to Local 77. Here, the
Arbitrator specifically found that “there was no lack of manpower to carryout [sic]
the . . . work, if employees would have been scheduled and/or directed to perform
the work as per the CBA.” (Award at 40.) There is, therefore, no reason why

                                         13
Local 250 cannot complete both Turnpike work and its mowing work on
off-Turnpike properties if the Commission assigns work pursuant to the CBA.
Further, the Commission presented no evidence and the Arbitrator made no
findings concerning the effect of mowing off-Turnpike properties on the public’s
health, safety, and welfare. We, therefore, reject the Commission’s argument that
the Award contravenes the public policy of PERA.
            Accordingly, we affirm the Arbitrator’s Award.

                              P. KEVIN BROBSON, Judge

                                       14
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Pennsylvania Turnpike Commission,    :
                       Petitioner    :
                                     :
           v.                        :   No. 89 C.D. 2015
                                     :
Teamsters Local Union No. 250,       :
                       Respondent    :

                                ORDER

           AND NOW, this 8th day of July, 2015, the arbitration award
sustaining Teamsters Local Union No. 250’s grievance is hereby AFFIRMED.

                             P. KEVIN BROBSON, Judge