Appeal from the Order of the Commonwealth Court entered January 4, 2008 at No. 473 CD 2007, reversing the Order of the Pennsylvania Labor Relations Board entered February 20, 2007 at No. PF-C-06-116-W.
The opinion of the court was delivered by: Madame Justice Todd
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.
In this appeal by allowance, we consider, inter alia, whether a municipal employer must bargain with its police labor organization over a ban on the use of tobacco products in the workplace and in the employer's vehicles and equipment. For the reasons that follow, we conclude, pursuant to the mandates of the Pennsylvania Labor Relations Act ("PLRA")*fn1 and the Collective Bargaining by Policemen and Firemen Act, commonly known as Act 111 ("Act 111"),*fn2 a municipal employer's ban on the use of tobacco products by members of the police labor organization is a mandatory subject of bargaining and is not an inherent managerial prerogative; thus, the municipal employer must bargain with the labor organization over such a ban. Therefore, we reverse the order of the Commonwealth Court.
The facts underlying this appeal are not in dispute. The Ellwood City Police Wage and Policy Unit (the "Union") is the exclusive bargaining representative of a unit of police officers employed by Ellwood City Borough (the "Borough"). Prior to June 19, 2006, the Borough permitted its police officers to smoke and use tobacco products in its buildings, vehicles, and equipment. On June 19, 2006 the Borough Council passed a resolution prohibiting the use of all tobacco products on or in Borough-owned buildings, vehicles, and equipment. The next day, the Borough's Mayor, Donald Clyde, issued a memorandum to all Borough employees, including the police officers at issue in this appeal, mandating them to comply with the resolution. Later, on August 21, 2006, the Borough's Council adopted Ordinance #2397 (the "Ordinance") which was identical to the June 19 resolution.*fn3 The Borough did not bargain with the Union over the tobacco products prohibition before directing police officers to comply with the ban.
After the passing of the resolution, on July 13, 2006, the Union filed a charge of unfair labor practice with the Pennsylvania Labor Relations Board (the "Board" or the "PLRB"), in which it alleged, as discussed more fully below, that the Borough's unilateral implementation of the ban on the use of tobacco products violated the Borough's duty to collectively bargain, as mandated by Section 6(1)(a) and (e) of the PLRA and Act 111. See 43 P.S. § 211.6(1)(a) and (e). On August 4, 2006, the Secretary of the Board issued a Complaint and Notice of Hearing. On September 28, 2006, a hearing was held before Hearing Examiner Donald Wallace.
Hearing Examiner Wallace issued a Proposed Decision and Order, in which he concluded the Borough's unilateral implementation of the ban on the bargaining unit members' use of all tobacco products violated the Borough's statutory duty to bargain with the Union. The Borough filed exceptions on January 5, 2007. On February 20, 2007, the Board issued a Final Order which dismissed the exceptions and affirmed the Proposed Decision and Order. Thereafter, the Borough filed a Petition for Review with the Commonwealth Court, and the Union was granted permission to intervene in the appeal.
On appeal, a majority of the en banc Commonwealth Court vacated the Board's order denying the Borough's exceptions. Borough of Ellwood City v. PLRB, 941 A.2d 728 (Pa. Cmwlth. 2008). Specifically, in an opinion authored by Judge Doris Smith-Ribner, the majority initially considered the issue of whether the Clean Indoor Air Act of 1988, 35 P.S. §§ 1230.1 et seq., preempted the Ordinance.*fn4 The Commonwealth Court majority rejected an interpretation that all local regulation of indoor tobacco use is preempted under the Clean Indoor Air Act of 1988. Borough of Ellwood City, 941 A.2d at 734-35. Having resolved this threshold issue, the majority then addressed whether the Ordinance implicated a mandatory subject of bargaining. First, the court found the enactment of the Ordinance was an exercise of the Borough's general police power, concluding that the purpose of the legislation was driven by the Borough's acknowledgment of the dangers of tobacco products to users and to persons affected by second hand tobacco use and the desire to provide a tobacco free environment on and in all municipality owned buildings, vehicles, and equipment to promote the health and welfare of its employees and citizens. Id. at 735-36.
Finding the Borough had authority pursuant to its delegated police powers to adopt measures designed to promote the health and welfare of all of its citizens, the majority found the ban on the use of tobacco products in specific locations to be related to entrepreneurial or managerial judgments fundamental to the basic scope and direction of the Borough, as the ban related to the Borough's overarching policy of protecting and promoting the general health and welfare of its citizens. Therefore, the majority concluded that, in light of the fundamental concern relating to the direction of the municipality, the interest of the Borough overcame the interest of the employees in maintaining the prior practices related to tobacco use, and the new ban on tobacco use was not subject to mandatory collective bargaining. Id. at 736. Accordingly, the Commonwealth Court majority held the Board erred in dismissing the Borough's exceptions and reversed the Board's order.
Judge Bernard McGinley dissented, finding the change in the policy concerning the use of tobacco was a mandatory subject of bargaining and the ban on tobacco use was a condition of employment that was not a "managerial prerogative" essential to the Borough's mission. Id. at 737. Similarly, Judge Dan Pellegrini in his dissent, opined that, while the Borough, through the Ordinance, could ban smoking in public places, it could not prohibit the use of tobacco in non-public places without first negotiating with the Union. Judge Pellegrini offered that the Ordinance was not enacted pursuant to the Borough's general police powers, but, rather, through its proprietary power to control conduct that takes place on its property. Id. at 738. As the Clean Indoor Air Act of 1988 authorized proprietors or the person in charge of public places to ban everyone from smoking, the matter of a public ban was removed from collective bargaining, he concluded. Here, however, the Borough imposed a ban in non-public places, and, thus, it had an obligation to negotiate over whether tobacco products could be used in those non-public areas, as this affects only employees. Id. Judge Pellegrini deemed the tobacco use policy to be a term and condition of employment; accordingly, it was a mandatory subject of bargaining. In Judge Pellegrini's view, "[o]bviously, a public employer cannot circumvent bargaining with the Union over terms and conditions of employment simply by passing an ordinance." Id.
The Board and Union sought this Court's discretionary review, which was granted on October 1, 2008.*fn5 Borough of Ellwood City v. Pennsylvania Labor Relations Board, 598 Pa. 535, 958 A.2d 492 (2008) (order). In our order, we reframed the issues on appeal for clarity:
(a) May a municipality, pursuant to its general police powers, enact an ordinance barring the use of tobacco products in publicly owned buildings, including employee workplaces inaccessible to the public at large, without negotiating with the exclusive representative of its employees?
(b) Must a municipal employer bargain with the police labor organization over the ban on use of tobacco products in the workplace and in the employer's vehicles and equipment?
As a threshold matter, we consider the proper standard and scope of review. As a general proposition, when reviewing a decision of the Board, our review is limited to determining whether there has been a violation of constitutional rights, an error of law, procedural irregularity, or whether the findings of the agency are supported by substantial evidence. 2 Pa.C.S.A. § 704; FOP and Conf. of Liquor Control Bd. Lodges v. PLRB, 557 Pa. 586, 592, 735 A.2d 96, 99 (1999). Furthermore, it is well settled that a decision of the Board must be upheld if the Board's factual findings are supported by substantial evidence, and if conclusions of law drawn from those facts are reasonable, not capricious, arbitrary, or illegal. Joint Bargaining Committee of Pennsylvania Social Services Union v. PLRB, 503 Pa. 236, 241, 469 A.2d 150, 152 (1983). Related thereto, an administrative agency's interpretation of a governing statute is to be given controlling weight unless clearly erroneous. Whitaker Borough v. PLRB, 556 Pa. 559, 562, 729 A.2d 1109, 1110 (1999). Finally, we have acknowledged that our Court "will not lightly substitute its judgment for that of a body selected for its expertise whose experience and expertise make it better qualified than a court of law to weigh facts within its field." Appeal of Cumberland Valley School District, 483 Pa. 134, 140, 394 A.2d 946, 949 (1978) (citing PLRB v. Butz, 411 Pa. 360, 377, 192 A.2d 707, 716 (1963)). Our scope of review is plenary in that we can consider the entire record. We now turn to resolution of the issues before us.
By way of background, the General Assembly enacted the PLRA in 1937 during a time of great labor unrest and in response to its findings that individual employees working in the private sector lacked full freedom of association and actual liberty of contract, as well as an inequality of bargaining power, which substantially and adversely affected the welfare of the Commonwealth. 43 P.S. § 211.2. This adverse effect on the public welfare included "strikes, lock-outs, and other forms of industrial strife and unrest, which are inimical to the public safety and welfare, and frequently endanger the public health." Id. The PLRA set forth the rights and responsibilities of employers and employees covered by the statute. Through the PLRA, the legislature granted private sector employees the statutory right, inter alia, "to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing." 43 P.S. § 211.5. Section 7(a) of the PLRA, in turn, mandates bargaining between an employer and a union over wages, hours, and other conditions of employment:
(a) Representatives designated or selected for the purposes of collective bargaining by the majority of employes in a unit appropriate for such purposes, shall be the exclusive representatives of all the employes in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: Provided, That any individual ...