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05/23/97 UPPER MORELAND TOWNSHIP DISTRICT v.

May 23, 1997

UPPER MORELAND TOWNSHIP DISTRICT, APPELLANT
v.
PENNSYLVANIA LABOR RELATIONS BOARD



Appealed From No. 95-19538. Common Pleas Court of the County of Montgomery. Judge CARPENTER.

Before: Honorable Dan Pellegrini, Judge, Honorable Jim Flaherty, Judge, Honorable Jess S. Jiuliante, Senior Judge. Opinion BY Judge Flaherty.

The opinion of the court was delivered by: Flaherty

OPINION BY JUDGE FLAHERTY

FILED: May 23, 1997

The Upper Moreland Township School District (District) appeals from the May 22, 1996, order of the Court of Common Pleas of Montgomery County (trial court) which affirmed a final order of the Pennsylvania Labor Relations Board (Board), finding that the District committed unfair labor practices by failing to bargain in good faith over subcontracting of bargaining unit work. We affirm.

The International Brotherhood of Firemen and Oilers, Local 1201 (Union) is a bargaining unit that represents the District's maintenance, grounds, custodial and transportation employees. On February 7, 1994, prior to the commencement of negotiations, the District adopted a motion directing that proposals be sought from private contractors to provide custodial, grounds and maintenance services. By letter dated February 16, 1994, before expiration of the collective bargaining agreement between the District and the Union, the Union requested negotiations for a successor agreement. Attached to that letter was the Union's submission of an initial proposal for a 3-year agreement which included annual wage increases of 5%, 5.25% and 5.5%. By letter dated March 7, 1994, the District advised the Union that it was soliciting bids from outside contractors but would continue to receive proposals from the Union. The parties entered their first bargaining session on March 14, 1994. On April 7, 1994, the Union filed unfair labor practice charges against the District. *fn1

At a bargaining session held on April 8, 1994, the District orally presented a counter-proposal to the Union's initial proposal, pertaining only to transportation employees. With regard to the custodial, grounds and maintenance employees, the District made no affirmative proposal other than to request that the Union submit a counter-proposal which would match the savings of $102,300 in a proposal solicited from the Marriott Corporation (Marriott), when compared to the in-house services currently provided by the Union's members. The District did not indicate that it would accept, as a settlement, a Union proposal that saved it $102,000. The Union informed the District that Marriott's proposal did not include work currently being performed by its members, principal among them, cleaning the District's pool. The District asked the Union to provide it with a written account of the work currently being performed that was omitted from Marriott's proposal, and informed the Union that it had to compete against Marriott's proposal. The District later informed the Union that Marriott would perform any work not expressly excluded from its proposal.

At the next bargaining session, on April 22, 1994, the District stated that Marriott's proposal would actually result in savings of $297,863.00 and, therefore, the Union needed to make a counterproposal comparable to that amount of savings, which was equivalent to a wage cut of $3 an hour, to make a competitive bid. The District set a June 13, 1994, deadline for its decision about subcontracting. It did not, however, indicate that it would accept the Union's concessions as a settlement if they met the money claimed to be saved by Marriott's proposal.

At the May 25, 1994, bargaining session the Union submitted a counter-proposal which reduced annual wage increases to 2%, 2.5% and 3%, respectively, with no other changes to the collective bargaining agreement. The District did not make a counter-proposal, but simply stated that the Union had to compete against Marriott's proposal. Again, the District did not state that it would accept the Union's concessions if they met the savings the District would allegedly receive under Marriott's proposal. The District proposed five additional dates for bargaining sessions. While the Union stated it would take the District's proposal under advisement, no additional bargaining sessions were held and the Union requested factfinding. On June 10, 1994, the Board ordered factfinding. A factfinding hearing was held on June 24, 1994. The Union later accepted the factfinder's recommendations but the District rejected them.

A hearing on the unfair labor practice charges was held on June 22, 1994. On August 1, 1994, the Union requested that the record be reopened to apprise the Board of additional facts, including the facts relating to July 27, 1994, when the District voted to subcontract its custodial, grounds and maintenance work to Marriott. The District and Marriott entered into a contract in August of 1994. The request to reopen was granted and a second day of hearings was held on August 30, 1994. On December 2, 1994, the hearing examiner issued his proposed decision and order which rejected all of the Union's unfair labor practice charges except the Union's charge that the District engaged in surface bargaining over the subcontract issue because of the District's inflexible position that the Union had to compete against Marriott's proposal while the District would not make a counterproposal to the Union. The hearing examiner concluded that the District failed to bargain in good faith, thus violating Sections 1201(a)(1) and 1201(a)(5) of the Public Employe Relations Act (PERA). *fn2

As a remedy, the hearing examiner ordered District to rescind its subcontract with Marriott and offer to unconditionally reinstate the affected employees with back-pay. The District appealed the decision to the Board, which (1) dismissed the District's exceptions to the examiner's proposed decision order and (2) made the decision final on September 12, 1995. The District then appealed to the trial court, which affirmed the final order of the Board. The District now appeals to this Court.

On appeal, the District raises the following issues: (1) whether the Board abused its discretion in granting the request by the Union for reopening of the record because of a material change in fact; (2) whether the Board's decision is arbitrary, capricious and constitutes an abuse of discretion because it relies exclusively upon the Board's decision in Morrisville School District, 26 PPER P 26181 (Court of Common Pleas of Bucks County, 1995) (Morrisville PLRB); *fn3 (3) whether the Board reasonably concluded that District did not bargain in good faith over subcontracting of bargaining unit work; and (4) whether the Board abused its discretion in directing the usual and customary remedy of restoration of the status quo ante in the case of unlawful subcontracting. *fn4

REOPENING OF THE RECORD

The District initially asserts that the Board abused its discretion because of its decision to grant reopening of the record. The general rules of administrative practice and procedure expressly provide for reopening of the record when there are "material changes of fact or law alleged to have occurred since the Conclusion of the hearing." 1 Pa. Code § 35.231(a). Additionally, we note that whether to grant or deny a petition to open is a discretionary decision left to the administrative agency. Al Hamilton Contracting Co. v. Department of Environmental Resources, 659 A.2d 31 (Pa. Commw. 1995). As this is a matter of the Board's discretion, this court will not reverse the decision absent an abuse of that discretion. Id. Here, the Board's hearing examiner, in footnote 2 of his proposed decision and order, explained that the request to reopen was granted because:

according to the district, the term of the subcontract had not been an issue at the hearing, thus making the term of the subcontract entered into immaterial. As the district acknowledges, however, the charge was filed before the district entered into a subcontract. Under the circumstances, the very allegation that the district had entered into a subcontract raised a new fact ...


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