decided: February 4, 1981.
PORT AUTHORITY OF ALLEGHENY COUNTY, APPELLEE,
AMALGAMATED TRANSIT UNION, DIVISION 85, APPELLANT
No. 80-1-129, Appeal allowed to the Supreme Court at No. 56 W.D. Misc. Dkt. 1980, from the Order of the Commonwealth Court entered Feb. 6, 1980, at No. 694 C.D. 1979 which Reversed the Order of the Court of Common Pleas of Allegheny County, Pa., Civil Division, entered March 6, 1979, at No. GD 77-16502.
Joseph J. Pass, Jr., Jubelirer, Pass & Intrieri, P. C., Pittsburgh, for appellant.
Robert E. Sheeder and James Q. Harty, Reed, Smith, Shaw & McClay, Pittsburgh, for appellee.
O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Roberts, J., filed a concurring opinion in which Nix and Kauffman, JJ., joined.
[ 492 Pa. Page 495]
In this case we are asked to review an order of the Commonwealth Court setting aside an arbitration award rendered at the close of a grievance arbitration proceeding between appellant, Division 85 of the Amalgamated Transit Union (Union), and appellee, Port Authority of Allegheny County (Authority).
[ 492 Pa. Page 496]
This controversy arose in 1976, during the term of a collective bargaining agreement between the Union and the Authority. For more than forty years prior to this dispute, the Authority and its predecessor, Pittsburgh Railways Company, had engaged in the practice of providing supplemental assistance to employees who were absent from work due to injuries sustained in work-related accidents. This assistance, known as welfare payments, was paid only to those employees who were not contributorily negligent, and was intended to make up the difference between an employee's workmen's compensation benefits and his or her normal pay for a forty-hour work week. The determination of contributory negligence was made initially by the injured employee's supervisor, and was then subject to review by the Authority's Personnel Department. In the present case, the Union, by letter of March 12, 1976, demanded arbitration in the cases of five employees who were denied welfare payments by the Authority.
A three-man arbitration panel found in favor of two of the five employees on the issue of contributory negligence and awarded welfare payments to those employees. The Authority, seeking to vacate the arbitration award, filed a Petition for Review of Award of Arbitrator in the Court of Common Pleas of Allegheny County. Upon cross motions for summary judgment, the Court of Common Pleas granted the Union's motion and denied the motion filed by the Authority. On appeal, the Commonwealth Court reversed and directed that summary judgment be entered in favor of the Authority. Port Authority of Allegheny County v. Amalgamated Transit Union Division 85, 49 Pa. Commw. 230, 411 A.2d 272 (1980). We granted the Union's petition for allowance of appeal and we now reverse.
The only issue in this case is whether the determination of contributory negligence is within the exclusive control of the Authority, or whether it is a proper subject of arbitration once arbitration has been demanded -- i. e., whether the subject matter of this dispute is within the jurisdiction of the arbitration panel, said jurisdiction being defined by the
[ 492 Pa. Page 497]
parties' collective bargaining agreement. See County of Allegheny v. Allegheny County Prison Employees Independent Union, 476 Pa. 27, 31-32 & n.7, 381 A.2d 849, 851 & n.7 (1977). The holding of the Commonwealth Court on this issue in favor of the Authority was error.
The Arbitration Act of 1927, Act of April 25, 1927, P.L. 381, No. 248, 5 P.S. §§ 161 et seq., provides the proper standard of review for the arbitration award in this case.*fn1 Under our prior interpretations of § 11(d) of that Act,*fn2 we must respect the award of the arbitration panel, including its definition of its own jurisdiction, so long as it is "in any rational way . . . derived from the [collective bargaining] agreement, viewed in light of its language, its context, and any other indicia of the parties' intention . . . ." Community College of Beaver County v. Community College of Beaver County, Society of the Faculty (PSEA/NEA), 473 Pa. 576, 594, 375 A.2d 1267, 1275 (1977) (citation omitted).*fn3
[ 492 Pa. Page 498]
In this case, the arbitration panel, after concluding that the past practice of awarding welfare payments was an implied term of the collective bargaining agreement and that the five cases before it were arbitrable, undertook to "determine the matter of fault on the part of the Company and the matter of contributory negligence on the part of the employee" in each of the five grievances. Arbitration Opinion and Award at 6. In reaching the conclusion that it possessed the authority to make this determination, the panel specifically reviewed §§ 102 and 106 of the collective bargaining agreement in light of general propositions of law concerning labor relations and grievance arbitration. These sections of the collective bargaining agreement provide in pertinent part:
Section 102 -- Cooperation in Bargaining Relationship
The Authority agrees to meet and treat with the Union . . . on all questions, grievances, and complaints that may arise between them . . . . Both parties agree to be fair and just in all their dealings.
Section 106 -- Arbitration
Should any dispute arise between the parties concerning the interpretation or application of any section or sections in this agreement which cannot be adjusted, the matter shall be submitted to a board of arbitration for decision . . . .
In cases concerning welfare payments, the essence of the parties' dispute is the existence or absence of contributory negligence. The panel was justified in finding that by agreeing to meet and treat on all grievances, to be fair and just in all dealings, and to arbitrate all disputes arising under the collective bargaining agreement, the parties intended to have a arbitration panel resolve the issue of contributory negligence. We therefore find the panel's assumption of authority over the determination of contributory negligence to be rationally derived from the parties' collective bargaining agreement. Thus, while the interpretation rendered by the Commonwealth Court may also be reasonable, it is clear that the court erred is substituting its
[ 492 Pa. Page 499]
interpretation for that of the arbitration panel.*fn4 Community College, 473 Pa. at 597-98, 375 A.2d at 1277.
Accordingly, the order of the Commonwealth Court is reversed and the order of the Court of Common Pleas of Allegheny County is reinstated.
ROBERTS, Justice, concurring.
Contrary to the suggestion of Mr. Justice Larsen, the issue is not whether "welfare payments" are arbitrable. Appellee
[ 492 Pa. Page 500]
Port Authority conceded that such payments are arbitrable before the Commonwealth Court. The sole issue is whether the Commonwealth Court erred in setting aside the arbitration awards. An arbitrator's award is to be affirmed if it "draws its essence from the collective bargaining agreement." Community College of Beaver v. Community College of Beaver County Society of the Faculty (PSEA/NEA), 473 Pa. 576, 586, 375 A.2d 1267, 1272 (1977), quoting United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). Here the arbitrator concluded that appellee violated the parties' express agreement by making welfare payments to some eligible employees while excluding others who were equally qualified. This determination is supported by the record and, under the "essence" test, may not be disturbed.