Appeal from the Order of the Court of Common Pleas of Allegheny County in case of School District of Pittsburgh, Pennsylvania v. Local Union 297, Pittsburgh Area School Employees, A.F.S.C.M.E., AFL-CIO, No. SA 798 of 1977.
James Q. Harty, with him James S. Cheslock, Reed, Smith, Shaw & McClay, and, of counsel, Robert J. Stefanko, Solicitor, for appellant.
Richard Kirschner, with him Jonathan K. Walters, and Markowitz & Kirschner, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Mencer, Blatt, DiSalle, Craig and MacPhail. Judges Wilkinson, Jr. and Rogers did not participate. Opinion by Judge Blatt. Dissenting Opinion by Judge MacPhail. President Judge Bowman and Judge Mencer join in this dissent.
[ 46 Pa. Commw. Page 193]
The School District of Pittsburgh (District), appeals here from an order of the Court of Common Pleas of Allegheny County affirming an arbitration award. The grievance which gave rise to the arbitration arose when the District discontinued subsidizing group life insurance premiums for retired employees.
The applicable collective bargaining agreement (Agreement) between the District and the appellee union provided for a Group Life Insurance Plan. The District had, prior to entering into this Agreement, purchased a group life insurance policy for its employees and provided that the employees retained
[ 46 Pa. Commw. Page 194]
the option on retirement of maintaining coverage under a reduced rate with the District subsidizing the premium payments. This policy had a specific provision describing this plan as for "any employee who becomes retired". The Agreement in question here referred to participation by "employees" in group life insurance but made no reference to the position of retirees as to premium payments.
In October of 1975, when the Agreement was in effect, the District terminated the payment of insurance premiums for retired employees. The employee's union filed a grievance which was sustained by the arbitrator who then directed the District to pay the appropriate premiums for all affected retirees in accordance with past practice. The District appealed to the Court of Common Pleas of Allegheny County which upheld the arbitrator's award, holding that it drew its essence from the Agreement and was not in violation of the Public School Code of 1949. Act of March 10, 1949, P.L. 30, as amended, 24 P.S. § 1-101 et seq.
The scope of review of an arbitrator's award is limited by Sections 10 and 11 of the Act of April 25, 1927, P.L. 381, as amended, 5 P.S. §§ 170, 171 which establish a review similar to the "essence test". Community College of Beaver County v. Community College of Beaver County, Society of the Faculty (PSEA/NEA), 473 Pa. 576, 375 A.2d 1267 (1977). Under this test, the arbitrator's interpretation must be upheld if it "can in any rational way be derived from the agreement, viewed in light of its language, its context, and any other indicia of the parties' intention." Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3rd Cir. 1969); Community College of Beaver County, supra.
The District argues that the arbitrator's award here does not draw its ...