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decided: April 7, 1986.


Appeal from the Order of the Commonwealth Court dated January 31, 1984 entered at No. 2406 C.D. 1982, affirming the Decisions and Orders of the Unemployment Compensation Board of Review dated September 17, 1982, entered at Nos. B-209912 through B-209917, Nix, C.j., and Larsen, McDermott, Hutchinson, Zappala and Papadakos, JJ. Flaherty, J., did not participate in the consideration of this case. Zappala, J., files a concurring opinion in which Larsen, J., joins. McDermott and Hutchinson, JJ., files a dissenting opinion.

Author: Nix

[ 510 Pa. Page 258]


Once again we are faced with the question of whether employees involved in a work stoppage are eligible for unemployment compensation benefits under the terms of section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. 2897, as amended, 43 P.S. § 802(d) (1964). Today we are called upon to apply our test for eligibility, first enunciated in our decision in Vrotney Unemployment Compensation Case, 400 Pa. 440, 163 A.2d 91 (1960), further expounded upon in Philco Corporation v. Unemployment Compensation Board of Review, 430 Pa. 101, 242 A.2d 454 (1968) and most recently articulated in Local 730, United Association of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry v. Commonwealth, Unemployment Compensation Board of Review, 505 Pa. 480, 480 A.2d 1000 (1984), where an employer, Norwin School District ("Norwin"), offers to restore the status quo only upon the precondition that its teachers cease their work stoppage and return to work. This followed a determination that employer's unilateral action pursuant to a provision under a collective bargaining agreement between appellant, Norwin, and the Norwin Education Association ("NEA")*fn1 was inconsistent with that agreement, thereby amounting to an alteration of the status quo. For the reasons that follow, we affirm the order of the Commonwealth Court which upheld an award of benefits granted by the Unemployment Compensation Board of Review.

[ 510 Pa. Page 259]

The instant dispute arose when appellees, teachers employed by Norwin, having engaged in a work stoppage, were granted unemployment compensation benefits pursuant to a referee's decision.*fn2 The referee had reversed the decision of the Office of Employment Security ("OES") on the grounds that appellees' unemployment was the result of a labor dispute that constituted a lockout, 43 P.S. § 802(d) (1964). That decision,*fn3 affirmed by the Unemployment Compensation Board of Review ("Board"), was appealed to the Commonwealth Court which in turn affirmed the orders of the Board. Norwin School District v. Commonwealth Page 260} of Pennsylvania, Unemployment Compensation Board of Review, 80 Pa. Commw. 67, 471 A.2d 904 (1984).


A summary of the relevant facts as found by the Board's referee is as follows. On September 1, 1978 Norwin entered into a collective bargaining agreement with NEA which, by its terms, expired on August 31, 1981. Article XIX of that agreement contained, in pertinent part, the following provision:

Insurance Protection

A. Hospitalization

1. During the life of this contract, the Board [School Board] will provide to all eligible employes any of the hospitalization plans outlined and pay the full cost of premiums for any of the plans selected by the employe.

A. The major medical rider provided under Blue Cross and Blue Shield, or equivalent coverage, will be in the amount of $250,000.

B. Individual employe coverage -- Blue Cross and Blue Shield prevailing fee "100" plan, or equivalent, with major medical rider. This plan will cover only the individual employe.

C. Parent and child (or children) -- Blue Cross and Blue Shield prevailing fee "100", or equivalent, with major medical rider . . . . (emphasis added)

D. Family Plan Coverage -- Blue Cross and Blue Shield prevailing fee "100", or equivalent, with major medical rider . . . .

G. All Master policies held by the Board provided for in this Agreement, shall be considered part of this contract. It is agreed that if another carrier can provide and guarantee equivalent benefits as stipulated in the present policies in effect on the signing date of this Agreement, the Board may change carriers. (emphasis added)

[ 510 Pa. Page 261]

Pursuant to this provision appellants contracted with Blue Cross of Western Pennsylvania to provide medical and health care coverage for those employees covered under the agreement.

On September 15, 1980, a resolution was passed by Norwin that the Blue Cross/Blue Shield policy, then held by Norwin, be replaced by a self-insured plan with equivalent coverage as of July 1, 1981. In response to Norwin's resolution, NEA filed a grievance on September 17, 1980, contending that the health coverage being considered was not equivalent to Blue Cross/Blue Shield and thus a violation of the existing agreement. The grievance was ultimately submitted to arbitration and heard on March 26, 1981.*fn4 In the interim, negotiations over a new collective bargaining agreement began in January, 1981 between NEA and Norwin.

In April 1981, Norwin adopted a resolution which substituted a plan called Alpha Health Care Plan of the Pennsylvania School Boards Association ("Alpha") for the Blue Cross/Blue Shield coverage to be made effective July 1, 1981 and in fact was implemented on that date. Norwin notified Blue Cross/Blue Shield that the policy which had been in effect would cease as of June 30, 1981.

On August 18, 1981 a second hearing before the arbitrator was held with both parties in attendance. Cognizant that the August 31, 1981 expiration date of the contract was approaching, NEA verbally advised Norwin that it would continue to work beyond the contract expiration date provided that Norwin maintain the same terms and conditions that existed prior to the implementation of Alpha. On August 24, 1981 the arbitrator issued his decision and award, sustaining the grievance and ordering Norwin to immediately reinstate Blue Cross/Blue Shield or coverage which meets the criteria of Article XIX, subparagraph G of

[ 510 Pa. Page 262]

    the collective bargaining agreement. A mailgram notifying Norwin of the decision was sent the same day.

During a brief negotiation session held on August 29, 1981, Norwin notified NEA that it would appeal the arbitrator's decision thus indicating that it did not intend to comply with the provisions of the arbitrator's award. At the same session, NEA responded by informing Norwin that it would file an unfair labor practice charge*fn5 in view of the change in the status quo resulting from Norwin's unilateral implementation of Alpha and from Norwin's refusal to comply with the provisions of the arbitrator's award. Later that day NEA sent Norwin the following mailgram:

The Members of the Norwin Education Association are willing to continue working for a reasonable period of time under all terms and conditions of the existing Collective Bargaining Agreement while negotiations continue.

Not having heard from Norwin by the August 31, 1981 contract expiration date, the work stoppage commenced on September 1, 1981. On September 6, 1981 Norwin responded to NEA's proposal by mailgram stating:

The Board accepts this offer and will maintain the status quo and will reinstate Blue Cross/Blue Shield coverage

[ 510 Pa. Page 263]

    pending your advice that members will return to the ...

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