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decided: May 2, 1980.


No. 72 March Term, 1979, Appeal from Decision and Order of the Commonwealth Court of Pennsylvania No. 115 Miscellaneous Docket. 1973 24 Pa. Commw. Ct. 266, Eagen, C. J., and O'Brien, Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Roberts, J., filed a concurring opinion in which Nix, J., joins. Larsen, J., concurs in the result. Kauffman, J., filed a concurring opinion in which Eagen, C. J., joins.

Author: Flaherty

[ 489 Pa. Page 382]


A collective bargaining agreement was entered into between the Ringgold Area School District (District) and the Ringgold Education Association, PSEA/NEA (Association) which became effective on July 1, 1973. Until September of 1973, the District followed a practice of granting a leave of absence to teachers for attending Association conferences and meetings. The leave was without salary and the District employed a substitute teacher for the days involved. In September of 1973 the District, through its acting superintendent, and the Association entered into and implemented an oral modification of this practice. It was agreed that no deductions would be taken from the salary of the teacher granted leave for attending the Association conferences, but that the Association would reimburse the District for the wages paid to the substitute teacher replacing the teacher on leave. This arrangement remained in effect during the school year 1973-1974, and in 1974 the District, unilaterally, modified the agreed arrangement, returning to the prior practice.

When a teacher suffered a deduction from her pay as a result of her attending an Association conference, a grievance was filed, alleging the deduction was contrary to an established practice of the parties. The grievance was processed through the grievance procedures established by the collective bargaining agreement and was ultimately denied by the District. The Association then processed the grievance to arbitration, alleging that the controlling provision in the collective bargaining agreement provided as follows:

Except as this Agreement shall otherwise provide, all terms and conditions of employment applicable on the signing date of this Agreement as established by the rules, regulations and/or written policies of the Board in force on said date, shall continue to be so applicable during the term of this Agreement. Unless otherwise provided in this Agreement, nothing contained herein, shall be interpreted and/or applied so as to eliminate, reduce, or otherwise

[ 489 Pa. Page 383]

    detract from any teacher benefit existing prior to its effective date. It is likewise understood that all inherent management perogatives [sic] existing at the present time and not specifically negotiated as a part of this Agreement shall continue to be in full force and existence during the contractual period of this Agreement.

The arbitrator sustained the grievance, and upon appeal to Commonwealth Court, 24 Pa. Commw. 266, 356 A.2d 842, that Court reversed the decision of the arbitrator. We granted a Petition for Allowance of Appeal.

The issue, simply presented, is whether, in an arbitration of a grievance by a public employee under a collective bargaining agreement, where the agreement contains no integration clause, an award sustaining an agreement based upon a past practice of the parties, which had been modified by an oral agreement during the agreement, is within the limits of the law.

The test for determining whether an arbitrator has properly fulfilled his function has been set forth by this Court. We said in 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), the test is to be as follows:

To state the matter more precisely, where a task of an arbitrator, PERA or otherwise, has been to determine the intention of the contracting parties as evidenced by their collective bargaining agreement and the circumstances surrounding its execution, then the arbitrator's award is based on a resolution of a question of fact and is to be respected by the Judiciary if "the interpretation 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, [at] 1128 (3d Cir. 1969). It was this approach which was meant to be suggested by the brief statement in International Brotherhood of Firemen and Oilers, [ v. School Dist. of Philadelphia, 465, Pa. 356, 350 A.2d 804] quoted supra, that "the arbitrator's

[ 489 Pa. Page 384]

    interpretation of the contract must be upheld if it is a reasonable one." 465 ...

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