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decided: May 23, 1985.


Appeals from the Orders of the Unemployment Compensation Board of Review in case of In Re: Claim of Ernest Odgers, No. B-217242 and Claim of Arnold Nayowith, No. B-217243.


Jonathan Walters, with him, Deborah R. Willig, Nancy J. McCauley and Barbara Kraft, Kirschner, Walters, Willig, Weinberg & Dempsey, for petitioners.

Michael D. Alsher, Associate Counsel, with him, Charles G. Hasson, Acting Deputy Chief Counsel, for respondent.

President Judge Crumlish, Jr. and Judges Rogers, Craig, MacPhail, Doyle, Colins and Palladino. Opinion by President Judge Crumlish, Jr. Judge Williams, Jr. did not participate in the decision in this case.

Author: Crumlish

[ 89 Pa. Commw. Page 441]

Ernest Odgers and Arnold Nayowith, representing 22,000 Philadelphia School District employees,*fn1 appeal an Unemployment Compensation Board of Review, hereinafter referred to as "Comp Board," order denying them benefits pursuant to Section 402(d) of the Unemployment Compensation Law*fn2 because their fifty-one day work stoppage in the Fall of 1981 was found to be a strike and not a lockout.

In this appeal, Odgers and Nayowith contend that the Comp Board capriciously disregarded competent evidence offered on certain factual issues and that the Comp Board erred as a matter of law by concluding that the employees' work stoppage constituted a strike.

[ 89 Pa. Commw. Page 442]

Before reaching these contentions, we initiate our review by examining and refining the unique and complex legal and factual relationship between the parties, their collective bargaining agreement, and the work stoppage which started on September 8, 1981 and ended on October 28, 1981.

The Factual Background

Odgers and Nayowith are members of the Philadelphia Federation of Teachers (PFT), which is the duly certified collective bargaining representative for the large majority of School District employees. The Philadelphia School District is managed by the Board of Education of the School District of Philadelphia, hereinafter referred to as "School Board." 351 Pa. Code § 12.12-200. As one of its fiscal responsibilities, the School Board must adopt a balanced budget for each school year. 351 Pa. Code § 12.12-303. However, because its members are appointed by the Mayor of Philadelphia, 351 Pa. Code § 12.12-201, and not elected by the City's residents, the School Board 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). It depends exclusively on the City, State and Federal governments for its funding.

In September 1980 the School Board and the PFT executed a collective bargaining agreement for the period from September 1, 1980 through August 31, 1982. The pertinent provisions of the contract provided for "full and complete job security" for all employees,*fn3 a ten percent salary increase for the 1981-82 school year, a guarantee clause requiring the School Board to appropriate adequate funding for the economic

[ 89 Pa. Commw. Page 443]

    provisions of the agreement and requiring the School Board to refrain from any unilateral abrogation of those terms,*fn4 and a clause in which the PFT agreed not to "engage in, instigate, or condone any strike, work stoppage or concerted refusal to perform normal work duties."*fn5

In March 1981 the School District submitted to the Philadelphia City Council a proposed budget for the 1981-82 school year which included full funding for the collective bargaining agreement. In May 1981 City Council rejected the request, and allotted a budget $200 million less than proposed. Soon thereafter, the School District determined that a budget deficit of more than $102,000,000 would occur during the 1981-82 school year if the agreed upon express terms of the contract with the PFT were to be met.

On May 15, 1981, the School Board notified the PFT of this critical development and indicated that it wanted to renegotiate certain provisions of the agreement. The PFT, in its response dated May 18, 1981, refused to renegotiate what it considered to be a viable

[ 89 Pa. Commw. Page 444]

    contract and urged that the contract be honored as agreed through August 31, 1982. It did, however, volunteer to assist the School Board in its efforts to induce the City, State and Federal governments to provide sufficient funding to meet its terms.*fn6

On May 29, 1981, the School Board adopted a shortfall 1981-82 budget. To meet its budgetary limitations, the School Board then announced that several changes would be initiated and implemented for the ensuing school year, which would include the furlough of a large number of employees and the elimination of the ten percent wage increase.*fn7 The PFT met with the School Board in an effort to induce a rescission of its decision. When these efforts failed, the PFT on May 29, 1981, filed a complaint in equity in Philadelphia Common Pleas Court seeking 1) to enjoin the School Board from altering the contract terms and 2) a specific enforcement order requiring the School Board to honor the terms of the existing contract through August 31, 1982.

[ 89 Pa. Commw. Page 445]

In June 1981 the School Board, proceeding to meet its new budget, mailed 3,498 furlough notices to certain employees which indisputably informed them that there was "no position" for any of them in the 1981-82 school year as of September 1, 1981. See Philadelphia School District v. Unemployment Compensation Board of Review, 85 Pa. Commonwealth Ct. 526, 483 A.2d 574 (1984).*fn8

On August 31, 1981, the first year of the two-year contract expired. On September 1, 1981, the furlough notices became effective and 3,498 employees were laid off by the School Board. On September 4, 1981, the trial court dismissed the PFT's complaint but held that the second year of the contract was still in existence if funding would be provided. Philadelphia Federation of Teachers v. Board of Education of the School District of Philadelphia, 6 Phila. 222 (C.P. Pa. 1981). As previously stated, adequate funding was never provided by the respective governmental bodies.

The PFT instituted the work stoppage on September 8, 1981, the first scheduled classroom day of the 1981-82 school year. The Comp Board found that the schools were open on that day and that the employees who did cross the picket line were permitted to enter.

Ten days into the work stoppage the School Board filed a complaint in equity in Philadelphia Common Pleas Court seeking to have (1) the work stoppage enjoined and (2) the teachers ordered back to work. On October 7, 1981, that court held that the collective bargaining agreement was effectively terminated because of the lack of funding and ordered the employees back to work under the terms of the School Board's May

[ 89 Pa. Commw. Page 4461981]

decision, reasoning that the PFT had failed to exhaust the procedures required by the Public Employe Relations Act, Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§ 1101.101 -- 1101.2301, prior to the strike. Board of Education of the School District of Philadelphia v. Philadelphia Federation of Teachers (No. 1851 September term 1981, filed October 7, 1981).

The PFT appealed these decisions to this Court. On October 27, 1981, we held that the original two-year contract signed by the parties in September 1980 was in reality, a severable contract, each year being subject to the condition precedent of full funding by the appropriate legislative bodies. We affirmed the September 4, 1981 dismissal of the PFT's equity complaint and affirmed, as modified, the October 7, 1981 injunction by ordering all of the employees, including those who had received layoff notices, back to work under the terms of the parties' last valid agreement, i.e., the terms that existed for the 1980-81 school year. Negotiations were ordered to commence under these terms. Philadelphia Federation of Teachers, Local No. 3 v. Thomas, 62 Pa. Commonwealth Ct. 286, 436 A.2d 1228 (1981). ...

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