decided: December 1, 1977.
COUNTY OF ALLEGHENY, APPELLEE,
ALLEGHENY COUNTY PRISON EMPLOYEES INDEPENDENT UNION, APPELLANT
Frank P. G. Intrieri, Jubelirer, McKay, Pass & Intrieri, Ernest B. Orsatti, Pittsburgh, for appellant.
Stephen A. Zappala, County Sol., Henry W. Ewalt, Sp. Labor Counsel, Pittsburgh, for appellee.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Manderino, JJ. Nix, J., did not participate in the consideration or decision of this case. Jones, Former C. J., did not participate in the decision of this case. Roberts, J., filed a dissenting opinion. Manderino, J., filed a dissenting opinion.
[ 476 Pa. Page 29]
OPINION OF THE COURT
The question presented by this appeal is whether, in an arbitration of a grievance by public employees under a collective bargaining agreement, an award sustaining the grievance may properly be based on a practice of the parties which had obtained during a period prior to the agreement. Under the facts of this case and in light of the terms of the agreement, which contains no past practice clause nor any mention of the practice in question, but does contain an integration clause, we answer the question in the negative.
This case was initiated by the appellant, Allegheny County Prison Employees Independent Union (hereinafter "Union") when on May 10, 1972, it filed a grievance against the County of Allegheny (hereinafter "County") under the provisions
[ 476 Pa. Page 30]
of a collective bargaining agreement between the parties.*fn1 The grievance concerned two aspects of mealtime conditions for guards working at the Allegheny County jail: The Union demanded that the officers' lounge where the guards took their meals be supervised at mealtime by a guard and that the guards be able to select for their meals any food available from the jail kitchen rather than being limited to the menus offered to the prisoners. The matter proceeded to arbitration and, following a hearing in which the County entered only a "special" appearance, the arbitrator issued an award which agreed with appellant's position and sustained the grievance. On appeal, the Commonwealth Court, in a unanimous opinion, set aside the arbitrator's award. County of Allegheny v. Allegheny Cty. Pris. Emp. I. U., 20 Pa. Commw. 173, 341 A.2d 578 (1975).*fn2 This Court then granted the Union's petition for allowance of appeal.
The ultimate question before us is whether the arbitrator's interpretation of the collective bargaining agreement*fn3
[ 476 Pa. Page 31]
"'can in any rational way be derived from the agreement, viewed in the light of its language, context, and any other indicia of the parties' intention . . . .'"*fn4 Because we conclude that the negative answer which the Commonwealth Court gave to this question was correct, we affirm its order setting aside the award.
The threshold question in this case is whether the subject matter of the asserted grievance was arbitrable. As this Court noted in Board of Education of Philadelphia v. Federation of Teachers Local No. 3, 464 Pa. 92, 99, 346 A.2d 35, 39 (1975),*fn5 Pennsylvania labor policy not only favors but requires the submission to arbitration of public employee grievances "arising out of the interpretation of the provisions of a collective bargaining agreement".*fn6 See also Lincoln System of Education v. Lincoln Association of University Professors, 467 Pa. 112, 354 A.2d 576 (1976). From this policy is derived the corollary principle that where, as here, an arbitrator has interpreted a collective bargaining agreement
[ 476 Pa. Page 32]
in favor of the arbitrability of the grievance before him, a reviewing court should be slow indeed to disagree.*fn7 As the Supreme Court of the United States observed in United Steelworkers of America v. Warrior & Gulf Navigation Company, 363 U.S. 574, 584-85, 80 S.Ct. 1347, 1354, 4 L.Ed.2d 1409 (1960):
"In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion clause is vague and the arbitration clause quite broad." (Emphasis added).
After reviewing the applicable clauses of the collective bargaining agreement in question*fn8 we cannot say that the arbitrator was in error when he concluded that the dispute concerning the mealtime conditions of the employee guards arose out of the interpretation or application of the provisions of the agreement. We must, therefore, disagree with
[ 476 Pa. Page 33]
the Commonwealth Court insofar as it held that the grievance filed by the Union was not arbitrable.
Turning to the substantive question of whether the arbitrator's award had a rational basis in the collective bargaining agreement, we must conclude that it did not. The agreement contains no provision whatever which deals either with the question of security arrangements for the employees' mealtimes or with what food should be available to the employees from the prison kitchen.*fn9
The arbitrator's decision that the union members were entitled to choose for their luncheons any food available in the prison kitchen and were not limited to the items available on the daily prison menu was based on what he found to have been the past practice of the parties over a period of time, a practice which, so the arbitrator held, had been implicitly incorporated in the collective bargaining agreement which became effective in 1972.*fn10
[ 476 Pa. Page 34]
A recognized commentator*fn11 in the field of labor law identifies four situations in which evidence of past practice*fn12 is used in arbitrations: (1) to clarify ambiguous language; (2) to implement contract language which sets forth only a general rule; (3) to modify or amend apparently unambiguous language which has arguably been waived by the parties; and (4) to create or prove a separate, enforceable condition of employment which cannot be derived from the express language of the agreement. In the case at bar, the arbitrator concluded that the implementation by the County
[ 476 Pa. Page 35]
of the advisory recommendation of a panel of arbitrators in 1967*fn13 created a binding past practice, a clear example of the fourth use of past practices in the above formulation. With this implementation, the arbitrator held,
". . . the Guards acquired a working condition which constituted a recognizable benefit. Its constant, continual use caused the benefit to ripen into a binding practice. . . . The privilege given to each Guard to choose his meal from the available kitchen foods became one of the many day-to-day facets of the working relationship between the Prison administration and its Guards . . ." Record at 13a.*fn14
[ 476 Pa. Page 36]
As for the Union demand for protection of its members by a guard posted in the officers' lounge at mealtimes, the arbitrator concluded that a "slightly different" problem was involved but that the contractual reservation to the County in Article XII of all responsibility relating to security, see n.8, supra,
"must be interpreted in a reasonable fashion. The Union is not seeking to interfere with the security of the Prison. On the contrary, it is trying to insure the physical safety of its member Guards. . . . The Prison was sufficiently concerned about the problem to provide a Guard over the residents when employees ate in the Prison kitchen. There is no reason why the same protection ought not to be afforded to employees while they are eating in the Officers' Lounge." Record at 15a.
The question for decision is whether the arbitrator was correct in concluding that the parties to the contract here involved implicitly incorporated into it, as separately enforceable conditions of their employment relationship, practices relative to food and security at lunch times which had prevailed for a time in the past, when those practices are neither repudiated in the agreement nor inconsistent with its terms, but when the contract includes a broad clause to the effect that the agreement as written is the complete agreement between the parties.*fn15 Although the non-inclusion
[ 476 Pa. Page 37]
of the practices in the bargaining agreement does not necessarily compel the conclusion that past practices are not impliedly so incorporated,*fn16 the existence in a contract of a broad integration clause, if it means anything, does clearly negate the notion that the parties meant to include any terms or conditions, including those based only on past practices, not specifically incorporated in the written contract or reasonably inferable from its provisions. We think that this provision is dispositive of this case.*fn17 At least one arbitrator has expressly so held, Lone Star Brewing Co., 53 LA 1317
[ 476 Pa. Page 38]
(1969) (LeRoy Autrey), and we know of no decision to the contrary. See also Cox & Dunlop, The Duty to Bargain Collectively During the Term of an Existing Agreement, 63 Harv.L.Rev. 1097, 1116-1117 (1950).
In deciding as we do, we hold only that where a collective bargaining agreement not only makes no mention whatever of past practices but does include a broad integration clause, an award which incorporates into the agreement, as separately enforceable conditions of the employment relationship, past practices which antedate the effective date of that agreement cannot be said to "draw its essence from the collective bargaining" agreement.*fn18 United Steelworkers v. Enterprise Wheel and Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). We hasten to add that courts are not to become super-arbitrators and are bound to defer to the arbitrators' findings relative to the intent of the parties as the arbitrators perform their task of interpreting labor contracts negotiated under PERA. See Community College of Beaver County v. Community College of Beaver County, Society of the Faculty, 473 Pa. 576, 375 A.2d 1267 (1977). The able arbitrator in this case, however, was not so much interpreting the contract before him as he was declaring, no doubt out of his conviction of what was fair and reasonable, that the employer should be bound by a non-existent provision which the arbitrator then incorporates into the contract by implication. But there is here nothing to support the implication. Conceding that the past attitude of the management of the County's prison may have been
[ 476 Pa. Page 39]
petty, it is nevertheless a function of future bargaining to remedy the situation. For the arbitrator to seek to supply the remedy is on these facts not in accord with the approach of Enterprise, supra, which we have adopted as the proper one for applying the Arbitration Act in public employment contracts. The award must, therefore, be set aside. See Sec. 11(d) of the Act of April 25, 1927, P.L. 381, No. 248, 5 P.S. § 171(d); Community College of Beaver County, supra.
What we have said, of course, is not to suggest that in another case the evidence may not justify a contrary conclusion. Nor do we intend to say that an arbitrator's reliance on past practices to clarify ambiguous language in the collective bargaining agreement, to implement general contract language or to show that a specific provision in the contract has been waived by the parties, would be improper although the agreement in question included an integration clause.*fn19
The order of the Commonwealth Court is affirmed.
ROBERTS, Justice, dissenting.
Appellant, Allegheny County Prison Employees Independent Union, negotiated a collective bargaining agreement with appellee, Allegheny County, covering the salaries and working conditions of guards at the Allegheny County Jail. In 1972, appellant filed a grievance against appellee concerning
[ 476 Pa. Page 40]
the food available to guards at mealtimes and security provisions in the dining hall during guards' meals. The arbitrator sustained the grievance and granted the award requested by the Union. On appeal, the Commonwealth Court held that the grievance was not arbitrable because it does not "arise out of" the collective bargaining agreement. The Union petitioned for allocatur, which we granted. The majority now affirms the judgment of the Commonwealth Court, holding that although the grievance was arbitrable, the arbitrator's award did not have a "rational basis in the collective bargaining agreement."
I agree with the majority's conclusion that the grievance is arbitrable. I disagree, however, with the majority's conclusion that the arbitrator's award exceeded the bounds of the collective bargaining agreement.
The majority reaches its result because it asserts that the arbitrator drew upon "past practices" in making his award, and that consideration of such practices is barred by an integration clause in the collective bargaining agreement. In so holding, however, the majority substitutes its interpretation of the integration clause for that of the arbitrator, in contravention of the contractual arbitration clause which gives the arbitrator power to interpret all parts of the collective bargaining agreement including the integration clause itself. The majority also contravenes the decisions which make the arbitrator the final interpreter of the contract both as to law and to fact. See Community College of Beaver v. Community College of Beaver County, Society of the Faculty, 473 Pa. 576, 375 A.2d 1267 (1977); Sudders v. United National Insurance Co., 217 Pa. Super. 196, 269 A.2d 370 (1970), aff'd, 445 Pa. 599, 284 A.2d 500 (1971), following Ludwig-Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960).
The majority's holding deprives the arbitrator of two of his most valuable tools in settling labor disputes whenever the collective bargaining agreement contains a boilerplate integration clause. These tools are the arbitrator's knowledge
[ 476 Pa. Page 41]
of the particular conditions in which labor and management operate and his knowledge of the rules -- the "law of the shop" -- which labor and management have developed to respond to these conditions. I cannot agree that the presence of an integration clause so completely alters the basic rules of the arbitration process. I therefore dissent.
The majority holds that the arbitrator failed to give proper weight to the "integration clause" in the collective bargaining agreement. In so doing, however, the majority misapplies the "essence test," the standard by which courts of this Commonwealth are to review arbitration awards. See Community College of Beaver v. Community College of Beaver County, Society of the Faculty, 473 Pa. 576, 375 A.2d 1267 (1977). The essence test adopted in Community College of Beaver County, supra, was first set forth by the Supreme Court of the United States in United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596-97, 80 S.Ct. 1358, 1360-61 (1960):
"The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The . . . policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. . . . [T]he arbitrators under these collective agreements are indispensable agencies in a continuous collective bargaining process. They sit to settle disputes at the plant level -- disputes that require for their solution knowledge of the custom and practices of a particular factory or of a particular industry as reflected in particular agreements.
When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies. There the need is for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency. Nevertheless,
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an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award."
This "essence test" reflects a judgment that arbitrators, and not courts, are best equipped to deal with the multitude of potential disputes which the parties agree to submit to them. This deferential standard also serves to solidify the integrity of the arbitration process by giving the parties the assurance that the decision of the arbitrator will, in the vast majority of cases, be final.
The majority's decision is contrary to these policies. The majority, by requiring the arbitrator to conform to the strict rules of contract law applied by the courts in non-labor contract cases deprives him of the opportunity to employ his knowledge of the customs and practices of the industry and the shop involved. As the Supreme Court of the United States stated in United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 579-80, 582-83, 80 S.Ct. 1347, 1351, 1352 (1960):
"'the institutional characteristics and the governmental nature of the collective-bargaining process demand a common law of the shop which implements and furnishes the context of the agreement. We must assume that intelligent negotiators acknowledged so plain a need unless they stated a contrary rule in plain words.'
The labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common law, -- the practices of the industry and the shop -- is equally a part of the collective bargaining agreement although not expressed in it. The labor arbitrator is usually chosen because of the parties' confidence in his knowledge of the common law of the shop and their trust
[ 476 Pa. Page 43]
in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment."
In view of the fact that the guards are required to eat their meals on the premises, the award here which covers the meals for guards and the security available to the guards while eating involves important working conditions. By allowing a boilerplate integration clause to divest the arbitrator of the ability to make an award concerning these important conditions, the majority defeats the policy which encourages arbitrators to draw upon their knowledge of the particular job setting so that a "fair solution of the problem" can be reached. The majority forces the arbitrator to treat the integration clause with more deference than the parties to the collective bargaining agreement may have intended, given their particular work situation. In so holding, the majority discourages the arbitrator from performing fully the services expected from him.
Moreover today's decision destroys the stability of the arbitration process. "[T]he arbitrators are the final judges of both law and fact and their award will not be disturbed for a mistake of either." Ludwig-Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969). Accord, Sudders v. United National Insurance Co., 217 Pa. Super. 196, 269 A.2d 370 (1970), aff'd, 445 Pa. 599, 284 A.2d 500 (1971). If an award of an arbitrator is upheld by the courts so long as it is rationally based, then parties can respect the decision of the arbitrator as a final resolution of the dispute between them. If, instead, the award of the arbitrator is open to unnecessary judicial modification, the arbitrator becomes only a small step in the process of resolving labor disputes; the judgment of the arbitrator which the parties bargained for is thereby replaced with the judgment of the courts.*fn1
[ 476 Pa. Page 44]
It is part of the arbitrator's function, not part of a court's, to determine the import of an integration clause in a collective bargaining agreement, at least where the contract contains a clause submitting to arbitration any "dispute arising out of the interpretation or application of the provisions of this Agreement." We must realize that an arbitrator may draw his understanding of any clause in the contract, including an integration clause, from the particular labor setting in which the contract was signed. See, e. g., Warrior & Gulf Navigation Co., supra; Enterprise Wheel & Car Corp., supra; Ludwig-Honold Mfg. Co., supra. Here, the arbitrator specifically found that the parties could not have reduced to writing all aspects of the ongoing labor-management relationship. In fact, the "lunch period" clause does not specifically mention all the conditions under which employees are to take their meal breaks. The arbitrator concluded that the contract should be interpreted so that the conditions under which the lunch break is taken are appropriate to the workplace in which these employees find themselves. These employees are prison guards. They are prohibited from leaving prison grounds during lunch. It was wholly rational for the arbitrator to use his knowledge of what work in a prison is like to conclude that when the contract specified a "30-minute lunch period" it must have meant a lunch period during which there is adequate protection for those guards who are eating. Similarly, it is not so irrational as to go beyond the essence of the agreement for the arbitrator to conclude that a "30-minute lunch period" was intended to be a period at which the guards, like most American workers, have a reasonable choice of foods. The arbitrator was aware of the impracticality of allowing the guards to enter and leave the prison grounds during lunch in order to find a choice of foods. He also considered the prison rule prohibiting guards from bringing their own lunches. He devised means of implementing the collective bargaining agreement based on the peculiar circumstances of these particular workers in this particular prison. This is the arbitrator's job.
[ 476 Pa. Page 45]
The arbitrator reached these conclusions in light of the arbitration and integration clauses in the contract. It was his duty under the arbitration clause to interpret the "lunch" clause. He interpreted it in light of management rules and working conditions which require prison employees to remain on the premises and to eat food from the prison kitchen. In the course of interpreting the "lunch" provision of the contract, he found the integration clause did not preclude his award.*fn2
We see from these circumstances that the arbitrator drew his conclusions from, and based his award upon, the essence of the contract. We are not free to say that whenever the arbitrator interprets a contract differently from the manner in which a court might have interpreted it, the arbitrator has stepped outside the essence of the contract. Ludwig-Honold Mfg. Co. v. Fletcher, supra; Sudders v. United National Insurance Corp., supra; see United Steelworkers v. Enterprise Wheel & Car Corp., supra. Here the Commonwealth Court disagreed with the interpretation the arbitrator placed upon the collective bargaining agreement between the parties. The parties did not bargain for the judgment of the court, however. They expressed a preference for the judgment of an arbitrator. This is why the award of an arbitrator will be sustained if there is "any rational way" it can be "derived from the [collective bargaining] agreement, viewed in the light of its language, context, and any other indicia of the parties' intention
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. . . ." Community College of Beaver v. Community College of Beaver County, Society of the Faculty, 473 Pa. 576, 375 A.2d 1267 (1977), quoting Ludwig-Honold Mfg. Co. v. Fletcher, supra.
I would reverse the order of the Commonwealth Court and enforce the award of the arbitrator.
MANDERINO, Justice, dissenting.
I agree with the majority that we should uphold the arbitrator's decision that this grievance filed by the Union was arbitrable. I cannot agree, however, that because this particular collective bargaining agreement contains an integration clause, the arbitrator was in error in determining that a past practice, though not specifically mentioned in the collective bargaining agreement, was implicitly incorporated in that agreement.
A collective bargaining agreement cannot possibly cover every single term and condition of employment. The existence of an integration clause does not alter this fact. Integration clauses such as the one which existed here are boilerplate, and parties to a collective bargaining agreement do not, because an integration clause is present, go to any greater lengths to insure that every term or condition of employment, form the choice of meals to the furnishing of restroom necessities, is contained within the agreement. Under the majority's reasoning, if the employer has been furnishing toilets and toilet paper but the agreement is silent about such matters, the employer can ignore the past practice and cease furnishing the restroom necessities.
Here, the arbitrator concluded that the parties agreed on certain conditions concerning guards' lunches, conditions which were present prior to the effective date of the agreement and which the parties felt no need to spell out in the collective bargaining agreement. That conclusion should be upheld in spite of the existence of a "broad" integration clause, otherwise, collective bargaining agreements will have to be written on rolls of paper stretching endlessly. The parties bargained for an arbitrator to interpret their contract
[ 476 Pa. Page 47]
and they are bound by his award. As the United States Supreme Court observed:
"[T]he question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his." United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362, 4 L.Ed.2d 1424, 1429 (1960).
When parties to a collective bargaining agreement agree to have an arbitrator interpret their contract, we should keep in mind that the "arbitrator's source of law is not confined to the express provisions of the contract," rather, "the practices of the industry and the shop -- is equally a part of the collective bargaining agreement although not expressed in it." United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581-82, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409, 1417 (1960).
I respectfully dissent.