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decided: October 27, 1981.


Appeals from the Order of the Court of Common Pleas of Philadelphia County in the cases of Philadelphia Federation of Teachers, Local, No. 3 AFT, AFL-CIO v. Board of Education of the School District of Philadelphia et al., No. 4369 May Term, 1981, and Arthur W. Thomas et al. v. Philadelphia Federation of Teachers, et al., No. 1851 September Term, 1981.


James J. Binns, for appellants.

Eugene F. Brazil, General Counsel, and Vincent J. Salandria, Assistant General Counsel, for appellees.

H. Francis DeLone, with him, Jerome A. Hoffman, and Alan D. Berkowitz, Dechert, Price & Rhoads, for Amicus Curiae, Greater Philadelphia Partnership.

President Judge Crumlish and Judges Rogers and Williams, Jr., sitting as a panel of three. Opinion by President Judge Crumlish. Judge Rogers dissents in No. 2484 C.d. 1981 and joins the majority in No. 2537 C.d. 1981.

Author: Crumlish

[ 62 Pa. Commw. Page 287]

Before us are two appeals by the Philadelphia Federation of Teachers (PFT) from two Philadelphia County Common Pleas Court decisions which: (1) granted injunctive relief sought by the Board of Education of the School District of Philadelphia (Board) and ordered the PFT back to work effective October 12, 1981, and (2) denied the PFT's request to enjoin the Board from violating the provisions of the collective bargaining agreement (Agreement). We modify and affirm in No. 2484 C.D. 1981. We affirm

[ 62 Pa. Commw. Page 288]

    in No. 2537 C.D. 1981 for the reasons expressed in this opinion.

At the outset, so that no one is mistaken, this Court is aware of the interlocking, conflicting legal concepts to which counsel has adroitly sculpted the factual situation to further their client's cause, but as in all labor disputes, whether in the public or the private sector, the fallout usually affects innocent third parties, the school children of Philadelphia. There can be no greater demand made upon these litigants and upon this Court than to address and resolve their differences because the innocent are helpless hostages. Their constitutional right to a thorough and efficient education demands of us prompt, decisive and responsible action.

As an appellate court, we make decisions removed from the turbulent and emotional arena within which the parties and the lower court operated. We have the opportunity to reflect, not at a more leisurely pace, but in an environment which lends itself to a contemplative examination of this unique legal and factual controversy. This necessarily less-harried reflection produces our decision and opinion.

History of the Controversy

In September 1980, after a 22-day strike, the Board and members of the PFT executed what was purported to be a two-year contract for the period September 1, 1980 through August 31, 1982. In May 1981, it became apparent that the 1981-82 budget could not or would not be fully funded by its customary city, state and federal sources. To comply with the provisions of the Educational Supplement to the Philadelphia Home Rule Charter, 351 Pa. Code § 12.12-303(a), (see The First Class City Public Education Home Rule Act, Act of August 9, 1963, P.L. 643, as amended, 53 P.S. § 13201) requiring it to operate

[ 62 Pa. Commw. Page 289]

    within a balanced budget, the Board adopted a substantially reduced budget.

In addition to reductions which directly affected the agreement, the Board eliminated after-school use of buildings for recreation and community groups, reduced alterations and improvements, reduced anticipated short-term interest expense, eliminated expansion in curriculum and instruction, reduced by 50% equipment in non-instructional areas, eliminated scholarships, eliminated expansion in executive and Board management and reduced extra-curricular activities. The proposed wage increases to all PFT members were negated and approximately 3,400 PFT members were to be eliminated from the payroll.

In an attempt to rescind the announced layoffs and force the Board to comply with the terms of the labor agreement as it saw it, PFT filed suit in the Philadelphia Common Pleas Court on May 29, 1981, seeking enforcement of the terms of the contentious agreement. On September 4, 1981, well into the budget year, and without resolution, Judge Takiff denied PFT's request for specific performance, holding, at that time, that the contract was viable only to the extent that the necessary funds were forthcoming. Subsequently, the Board sought an injunction ordering the teachers back to work. The lower court*fn1 then held that, due to the changed circumstances, the contract was terminated and that the PFT was conducting an illegal strike. That court then ordered the PFT back to work comparing it to a party whose collective bargaining agreement had expired.

Our discussion must begin by delineating the limited powers of the Board which contributed to a confusion of rights. The Education Supplement to

[ 62 Pa. Commw. Page 290]

    the Philadelphia Home Rule Charter, establishes a School Board, not elected by the people but rather appointed by the Mayor of the City, see 351 Pa. Code § 12.12-201. The Board, as an appointed body, is constitutionally prohibited from raising revenues through taxation. Pa. Const. Art. III, § 31; See Wilson v. Philadelphia School District, 328 Pa. 225, 195 A. 90 (1937).

Instead of being self-sufficient, the Board must look to the Federal Government, the Pennsylvania General Assembly and the City Council as revenue sources. The Charter provides for a process by which the Board calculates its annual budget, see 351 Pa. Code § 12.12-304, submits its proposal to Council, which, after careful consideration, may approve or reject the budget request, see 351 Pa. Code § 12.12-305. The Board is permitted to levy only the amount of taxes which the Council, in its independent legislative judgment, authorizes. This inability on the Board's part to raise revenue independently dilutes its power, as an employer, to enter into a binding contract and guarantee monetary terms to public employees. This critical difference manifests and constitutes the key to the parties' differences.

The City, not a party to the contract, stepped into this vacuum adding to the confused atmosphere of the negotiations. The record reveals a pattern of conduct, although advisory and unofficial,*fn2 by City officials, including the Mayor and his executive officers, in the negotiation of contracts between the Board and the Federation since at least 1972.*fn3

[ 62 Pa. Commw. Page 291]

The record is replete with examples of City involvement in the bargaining process. Specifically, the City assured the parties that it would pursue at least four avenues of funding: 1) refinancing the School District's long-term debt; 2) pressing the state to fully fund the general subsidy program; 3) provide leadership in obtaining Federal revenues and 4) seeking further appropriations from City Council.*fn4 The City also strongly recommended that the parties amend the proposed job security clause since the language of the provision would substantially hamper the City's efforts to secure funding from financial institutions.

The long history of City participation coupled with the City's specific input into the negotiations with no actual or apparent authority to affect the signatories' obligations, added an additional dimension to Philadelphia public education law, a dimension never ...

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