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decided: March 31, 1987.


Appeal from the Order of the Commonwealth Court to Nos. 1232 C.D. 1983 and 1233 C.D. 1983 dated May 23, 1985, Reversing the Decisions and Orders of the Unemployment Compensation Board of Review, Decision Nos. B-217242 and B-217243. 89 Pa. Commonwealth Ct. 439, Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Nix, C.j., concurs in the result. McDermott, J., concurs in the result.

Author: Hutchinson

[ 514 Pa. Page 379]


Appellant, Commonwealth of Pennsylvania, Unemployment Compensation Board of Review (Board), appeals by

[ 514 Pa. Page 380]

    allowance a Commonwealth Court order reversing orders entered by the Board. The Board had affirmed decisions of a Referee and the Office of Employment Security denying unemployment compensation benefits to appellees, teachers employed by the School District of Philadelphia (School District).*fn1 The ultimate question presented by this appeal is whether the work stoppage in which appellees engaged from September 8, 1981, through October 27, 1981, was the result of a strike or a lock-out under the terms of Section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897, as amended, 43 P.S. § 802(d). We hold that it was a lock-out by the School District and thus affirm the order of Commonwealth Court.


The Philadelphia Federation of Teachers (PFT) is the duly certified collective bargaining representative for approximately 22,000 School District employees, a majority of whom are teachers. The School District is managed by a Board of Education (School Board) appointed by the Mayor of Philadelphia. See the First Class City Public Education Home Rule Act, Act of August 9, 1963, P.L. 643, as amended, 53 P.S. §§ 13201-13223 (Supp. 1986); 351 Pa.Code §§ 12.12-200 and 12.12-201.

In September, 1980, the School Board and the PFT executed a collective bargaining agreement (Agreement) for the period September 1, 1980, through August 31, 1982.*fn2

[ 514 Pa. Page 381]

Among the terms bargained for and agreed to were specific provisions for maximum class size and preparation time, a guarantee of adequate monies to fund the Agreement,*fn3 and a general provision that the School Board would solicit the PFT's views on long-range educational goals prior to School Board action. The Agreement also provided for "full and complete job security" for all employees.*fn4 All of the foregoing

[ 514 Pa. Page 382]

    provisions applied to the complete term of the two-year agreement. In only one major respect did the two years of this agreement differ: there was no salary increase provided for the 1980-81 school year, but a ten percent increase in salary was provided for the 1981-82 school year.*fn5

In May, 1981, eight months after execution of the Agreement, the School Board informed the PFT that its proposed budget request had been rejected by City Council and it anticipated a budget deficit of approximately $102,000,000 during the 1981-82 school year if the express terms of the Agreement were honored.*fn6 The PFT refused the School Board's request to renegotiate the Agreement, but offered to assist its efforts to obtain sufficient city funding for the Agreement.

The School Board then adopted a shortfall budget for the 1981-82 school year, and announced several changes in its operations, effective September 1, 1982. These included layoff of approximately 3,500 members of the PFT and elimination of the ten percent wage increase.*fn7 In June,

[ 514 Pa. Page 3831981]

, the School Board mailed 3,498 layoff notices to School District employees, informing them that there were no positions available for them during the 1981-82 school year.

These layoff notices became effective on September 1, 1981, and the 3,498 employees were laid off by the School Board. The other operational changes were also effected, including the increase in class size and the reduction in preparation time. On September 8, 1981, the first day of scheduled classes for the 1981-82 school year, members of the PFT began a work stoppage.


In May, 1981, the PFT had filed suit in the Philadelphia Court of Common Pleas to enforce the existing collective bargaining agreement through August 31, 1982. On September 4, 1981, Common Pleas dismissed this complaint, holding the Agreement was subject to a condition precedent of sufficient city appropriation each year to fund it. The court held, however, that the terms of the Agreement would be in effect for the 1981-82 school year to the extent that they were funded by the City. Philadelphia Federation of Teachers v. Board of Education, 6 Phila. 222 (C.P.Pa. 1981).*fn8

[ 514 Pa. Page 384]

In mid-September, the School Board filed its complaint in equity in the Philadelphia Court of Common Pleas, asking that court to enjoin the work stoppage and order the teachers back to work. On October 7, 1981, Common Pleas did order the teachers back to work, now holding that the lack of funding effectively terminated the Agreement. Board of Education v. ...

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