Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

City of Scranton v. E.B. Jermyn Lodge No. 2 of the Fraternal Order of Police

October 29, 2010

CITY OF SCRANTON
v.
E.B. JERMYN LODGE NO. 2 OF THE FRATERNAL ORDER OF POLICE, THE PENNSYLVANIA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT AND THE PENNSYLVANIA ECONOMY LEAGUE CENTRAL PA, LLC, AS THE ACT 47 COORDINATOR FOR THE CITY OF SCRANTON
APPEAL OF: THE CITY OF SCRANTON, PENNSYLVANIA AND THE PENNSYLVANIA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, AND THE PENNSYLVANIA ECONOMY LEAGUE CENTRAL PA., LLC, AS THE ACT 47 COORDINATOR FOR THE CITY OF SCRANTON
CITY OF SCRANTON
v.
E.B. JERMYN LODGE NO. 2 OF THE FRATERNAL ORDER OF POLICE, APPELLANT



The opinion of the court was delivered by: Judge Simpson

Argued: June 21, 2010

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge.

OPINION

I. Introduction

In these consolidated appeals originating in a February, 2009, interest arbitration award (2009 Award) involving the City of Scranton (City) and its police personnel, we again examine the effect of the Municipalities Financial Recovery Act (Act 47)*fn1 on collective bargaining rights under the statute known as the Policemen and Firemen Collective Bargaining Act (Act 111).*fn2 The City, its allied intervenors,*fn3 and the E.B. Jermyn Lodge No. 2 of the Fraternal Order of Police (FOP), appeal from an order of the Court of Common Pleas of Lackawanna County (common pleas court)*fn4 that denied the City's petition to vacate the award, but modified the wage, health insurance benefits and pension provisions of the award. In light of our decisions in and City of Scranton v. E.B. Jermyn Lodge No. 2 of the Fraternal Order of Police, 965 A.2d 359 (Pa. Cmwlth. 2009), appeal granted, ___ Pa. ___, 995 A.2d 1181 (2010) (Scranton FOP (2009)) and City of Scranton v. Fire Fighters Local Union No. 60, of the International Association of Fire Fighters, AFL-CIO, 964 A.2d 464 (Pa. Cmwlth. 2009), appeal granted, ___ Pa. ___, 995 A.2d 1180 (2010) (Scranton Fire Fighters (2009)), we affirm the common pleas court's order as modified.

II. Background

A. Distressed Status

The background in this matter has not changed significantly since our decision in Scranton FOP (2009). In January, 1992, DCED determined the City to be a "financially distressed municipality" under Act 47 and appointed the Pennsylvania Economy League, LLC, as the City's Act 47 Coordinator (Coordinator), to develop a Recovery Plan.*fn5 The City is still operating under its third Plan, which it adopted in May 2002 (2002 Recovery Plan). The City remains a financially distressed municipality; DCED has not terminated the City's financially distressed status. See Section 253 of Act 47, 53 P.S. §11701.253 (termination of status); Borough of Wilkinsburg v. Dep't of Cmty. & Econ. Dev., 728 A.2d 389 (Pa. Cmwlth. 1999) (it is within sole discretion of the Secretary of DCED to determine whether to terminate a municipality's distressed status).

B. 2002 Recovery Plan

Chapter II-B of the 2002 Recovery Plan, titled "LABOR RELATIONS, COST CONTAINMENT, AND RELATED PROVISIONS," sets forth specific requirements for the City's employees. It states in part:

The following are the labor relations, cost containment and related provisions of the [2002 Recovery Plan]. They become effective as of the date of the plan's adoption. They cover the remainder of 2002 as well as the period 2003-2005 and beyond; provided that the terms and provisions of any existing collective bargaining agreement shall be followed for the remainder of the current term.

These cost containment provisions are both reasonable and necessary to the recovery of the City. It is the intention of the City to negotiate these cost containment provisions with the bargaining unit representative in good faith.

However, to the extent that the City is unable to reach agreement with any of its Unions, it is the express intention of the City that implementation of these cost containment provisions is mandatory. All cost containment provisions must be addressed. The only exception to the mandatory intent and nature of these provisions will be by amendment to said provisions, based upon approval from the Coordinator, in conjunction with [DCED]. Any such change must be in conformance with the financial parameters of the Recovery Plan.

R.R. at 555a (emphasis added). Chapter II-B contains mandatory provisions applying to all City employees, departments, bureaus and offices, R.R. at 555a-62a, provisions specifically for the fire department, R.R. at 562a-65a, provisions specifically for the police department, R.R. at 565a-70a, and provisions for other employees. Act 47 prohibits clear, specific recommendations of a recovery plan from being violated, expanded or diminished. City of Farrell v. Fraternal Order of Police, Lodge No. 34, 538 Pa. 75, 645 A.2d 1294 (1994).

Chapter II-C of the 2002 Recovery Plan, titled "GENERAL PLAN PROVISIONS," sets forth the Plan's general provisions for 2002-05 "and beyond." R.R. at 576a. Chapter II-C provides in part (with emphasis added):

Employee Benefits/Pensions. The City will continue to follow the requirements of Act 205[*fn6 ] particularly as they relate to budgeting the entire cost of the Minimum Municipal Obligation. The Recovery Plan provides for $800,000 per year to be made as a contribution to the Pension Plans to amortize the cost of the advance payment made by Provident Mutual in the year 2000 to meet the City's unfunded MMO's as of that date. The City shall review on an annual basis in conjunction with the pension actuarial reports the status of this payment and its required MMO payments. Finally, all pension plan amendments shall be made in accordance with cost containment provisions outlined in Chapter II-B.

R.R. at 577a (footnote added).

C. Scranton FOP (2009)

1. Generally

Pursuant to Act 111, the City and the FOP operate under a collective bargaining agreement (CBA). Their last CBA expired on December 31, 2002. After negotiations for a 2003-2007 CBA reached an impasse, the parties selected an interest arbitration panel to establish the terms and conditions of employment for police personnel.

On April 7, 2006, following extensive hearings and deliberations, a divided arbitration panel issued an interest award (2006 Award) covering the period from January 1, 2003 through December 31, 2007. Among other provisions, the 2006 Award directed retroactive wage increases and lump sum bonuses in excess of the 2002 Recovery Plan's mandates.

In response, the City immediately filed a petition to vacate or modify with the common pleas court. FOP answered and raised new matter.*fn7 Ultimately, after argument and deliberations, the common pleas court determined the 2006 Award violated the 2002 Recovery Plan and directed modification of the award. The FOP appealed to this Court.

In Scranton FOP (2009), we undertook limited review under a narrow certiorari standard. We rejected the argument that Act 47 is an unconstitutional limitation on Act 111 collective bargaining. See Wilkinsburg Police Officers Ass'n by Harder v. Commonwealth, 564 A.2d 1015 (Pa. Cmwlth. 1989), aff'd, 535 Pa. 425, 636 A.2d 134 (1993) (Wilkinsburg I) (restrictions embodied in Act 47 are constitutional; even if Section 252 of Act 47 operates as a bar to prospective bargaining agreements; it would not violate the Pennsylvania Constitution); Wilkinsburg Police Officers Ass'n by Harder v. Commonwealth, 535 Pa. 425, 636 A.2d 134 (1993) (Wilkinsburg II) (plurality decision of Supreme Court affirming Wilkinsburg I; Act 47 did not unconstitutionally delegate municipality's fiscal authority because municipality retains its fiscal authority; Act 47 is not a prohibited special law regulating labor).

Further, we dismissed the FOP's contention that the arbitration panel could compel the City to amend the 2002 Recovery Plan. Here, the City adopted the Coordinator's three recovery plans. Because the Coordinator developed the 2002 Recovery Plan, only the Coordinator may initiate amendments to it. Id.

2. Terms of 2006 Award

In Scranton FOP (2009), we reviewed each component of the 2006 Award to determine whether the mandatory requirements of the 2002 Recovery Plan preclude its implementation, and modified the terms of the award to comply with the Plan.

a. Expiration of Recovery Plan

First, we rejected the FOP's argument that the 2002 Recovery Plan expired by its own terms on December 31, 2005. We noted that Chapter II-B of the Plan clearly states its labor relations and cost containment provisions apply "for the remainder of 2002 as well as the period 2003-2005 and beyond." Scranton FOP (2009), 965 A.2d at 369 (emphasis added). As specified in the 2002 Recovery Plan, "some provisions apply in certain years, while other provisions contain no limit to their duration." Id.

b. Wages

As to wages, we determined the 2006 Award violated Section IIB(3) of the 2002 Recovery Plan ("Personnel Costs")*fn8 because it awarded back wages or retroactive adjustments for 2003, 2004, 2005 and part of 2006. Id. at 370. However, we rejected the City's contention that specific wage limitations in Section II-B(2) of the Plan ("Wages")*fn9 for the years 2003-2005 remained in effect indefinitely. Id. Accordingly, we modified the common pleas court's orders: to vacate the bonuses for 2003, 2004, and 2005; to vacate the 5.5% wage increase effective December 31, 2005; and, to make the 3.5% wage increase for 2006 effective April 7, 2006, the date of the 2006 Award. Id. We confirmed the 4.0% wage increase effective January 1, 2007. Id.

c. Health Care

As to health care costs, we recognized in Scranton FOP (2009), that Section II-B(5) of the 2002 Recovery Plan ("Health Insurance Benefits")*fn10 capped annual health care costs at $7,191,812, the City's actual 2001 cost to provide these benefits. Section II-B(5) of the Plan also provides for the cessation of health care benefits to City employees who retire on or after January 1, 2003. The 2006 Award increased the existing insurance deductibles and benefits. It also extended health care benefits for a period of five years, effective January 1, 2007, to retiring bargaining unit members eligible to receive such benefits under the 1996-2002 CBA.

We rejected the City's assertion that the 2006 Award's increases in health care benefits violated the maximum health care costs clause. Scranton FOP (2009), 965 A.2d at 482. We noted the City's broad assertion was not supported by the record or clarified by argument. Id. The City simply failed to quantify the claimed excess or explain how it could be ascertained. Id.

However, we rejected the FOP's argument that the Recovery Plan provision addressing cessation of health care benefits for those retiring after January 1, 2003 lapsed. Id. We noted nothing in the plain language of Section IIB(5) limited the duration of the Plan's health insurance provisions. Accordingly, we prospectively modified*fn11 the common pleas court's orders by substituting the following language: "Effective February 9, 2009, the City will cease to extend health care benefits to employees who retire on or after that date." Scranton FOP (2009), 965 A.2d at 372.

d. Police Department Administration

As part of the 2006 Award, the arbitration panel majority modified the Strategic Implementation Team Agreement, as amended in 1999 (1999 SIT Agreement), concerning the structure and compensation of the City's Police Department. The "panel majority allowed the City to institute 10-hour shifts, made modifications to the manning schedules, and addressed assignment of detectives, drug and alcohol testing and other assignments and staffing." Scranton FOP (2009), 965 A.2d at 372.

This Court recognized that Section II-B(1) of the 2002 Recovery Plan ("Management Rights") empowers the City to determine the organizational structure of each Department, to determine and change job duties for each position, to determine and change job duties for each employee, and to assign work to each employee.*fn12 We further recognized that Section II-B(1) of the Plan's "Provisions Specifically for the Police Department," titled "Organizational Structure and Scheduling," contains more specific statements as to how the Police Department will be reorganized and how the 1999 SIT Agreement will be modified.*fn13 Scranton FOP (2009), 965 A.2d at 373.

In Scranton FOP (2009), we rejected the City's argument that the 2006 Award left intact portions of the 1999 SIT Agreement that violated the 2002 Recovery Plan. We noted that the Plan envisioned that the 1999 SIT Agreement remain in effect as modified by Section II-B(1) of the Plan's "Provisions Specifically for the Police Department." The Recovery Plan's "Organizational Structure and Scheduling" provision made specific structural and scheduling changes. See Scranton FOP (2009), 965 A.2d at 375. In rejecting the City's argument that the 1999 SIT Agreement must be totally abrogated, we noted that the City, the FOP and the Coordinator collaborated to draft the 1999 SIT Agreement, and that the Coordinator would not draft the 2002 Recovery Plan in such a way as to unravel the earlier SIT Agreement. Id.

However, we determined the 2006 Award violated the "Elimination of Minimum Manning" provision in Section II-B(7) of the 2002 Recovery Plan*fn14 to the extent it retained the existing minimum manning requirements in the 1999 SIT Agreement. See Scranton FOP (2009), 965 A.2d at 376.

We also rejected the FOP's argument that Act 47 essentially eliminates collective bargaining. See Wilkinsburg I and II (restrictions embodied in Act 47 are constitutional; even if Section 252 of Act 47 operates as a bar to prospective bargaining agreements; it would not violate the Pennsylvania Constitution). Although the FOP will not have the ability to negotiate in the manner it would have if the City had not adopted a recovery plan, the arbitration process is an adequate remedy. Fraternal Order of Police, Fort Pitt Lodge No. 1 v. Yablonsky, 867 A.2d 658 (Pa. Cmwlth. 2005) (en banc).

e. Other Provisions of Recovery Plan Not Adopted

In Scranton FOP (2009), we further determined the 2006 Award violated the 2002 Recovery Plan by failing to include the following provisions of the Plan:

* Section II-B (6), titled "Regular Part-time Employees;"

* Section II-B (8), titled "Clothing Allowance;"

* Section II-B (9), titled "Longevity;"

* Section II-B (10), titled "Elimination of Subcontracting Clauses;"

* Section II-B (11), titled "Duplication of Benefits;"

* Section II-B (13), titled "Family Medical Leave Act;"

* Section II-B (14), titled "Short-term Disability Insurance;"

* Section II-B (15), titled "Workers' Compensation;"

* Section II-B (16), titled "Elimination of Past Practices;"

* Section II-B (17), titled "Grievance Procedures;" and,

* Section II-B (21), titled "Job Descriptions."

See Scranton FOP (2009), 965 A.2d at 376-77. In addition, we determined the 2006 Award violated the 2002 Recovery Plan by failing to include the following "Provisions Specifically for the Police Department,"

* Section II-B (2), titled "Supervisory Assignments;"

* Section II-B (3), titled "Court Time;"

* Section II-B (4), titled "Compensatory Time;"

* Section II-B (5), titled "Management Positions;"

* Section II-B (6), titled "Traffic Maintenance Bureau and Public Safety Mechanics;"

* Section II-B (7), titled "Leave Policy;" and,

* Section II-B (9), titled "Heart and Lung-Police Officers."

See id at 377. We noted the 2002 Recovery Plan specifically states "to the extent that the City is unable to reach agreement with any of its Unions, resulting in interest arbitration or other legal proceedings, it is the express intention of the City that the implementation of these cost containment provisions is mandatory." R.R. at 555a. Therefore, we modified the common pleas court orders to expressly include those provisions into the Award. Scranton FOP (2009), 965 A.2d at 377.

D. 2009 Award

1. Generally

In negotiating the terms and conditions of the new CBA to become effective January 1, 2008, the City and the FOP again reached an impasse. As a result, the parties requested interest arbitration proceedings under Act 111. The FOP selected Thomas W. Jennings, Esquire, as their designated arbitrator. The City selected Timothy P. O'Reilly, Esquire, as its designated arbitrator. Arbitrators Jennings and O'Reilly designated Edward J. O'Connell, Esquire, to serve as the panel's impartial chairman.

In lieu of evidentiary hearings, the parties agreed to present their positions and supporting evidence in the form of written submissions to the panel. In addition to the factual submissions, the parties prepared legal memoranda. Thereafter, the panel met in a number of executive sessions and considered the parties' evidence and arguments. In early February, 2009, the arbitration panel majority issued its Award.

The arbitration panel majority issued the 2009 Award a few days before our decision in Scranton FOP (2009) and approximately two weeks after our decision in Scranton Fire Fighters (2009). The Award is effective for a seven-year term, starting on January 1, 2008, and continuing through December 31, 2014.

In response, the City filed a petition to vacate the 2009 Award in the common pleas court. In its petition, the City averred the Award diminishes the provisions of 2002 Recovery Plan, and directs the City to violate its obligations under Act 47. The 2009 Award includes the following terms.

2. Wages

The 2009 Award contained the following wage increases:

* January 1, 2008 -- 8.0% increase across the board;

* January 1, 2009 -- 3.0% increase across the board;

* July 1, 2009 -- 3.0% increase across the board;

* January 1, 2010 -- 3.0% increase across the board;

* July 1, 2010 -- 3.0% increase across the board;

* January 1, 2011 -- 3.0% increase across the board;

* July 1, 2011 -- 3.0% increase across the board;

* January 1, 2012 -- 3.0% increase across the board;

* July 1, 2012 -- 3.0% increase across the board;

* January 1, 2013 -- 3.2% increase across the board;

* July 1, 2013 -- 3.2% increase across the board;

* January 1, 2014 -- 3.2% increase across the board;

* July 7, 2014 -- 3.2% increase across the board.

See 2009 Award, Maj. Op., at 7-8

The panel majority further stated that if any of the wage increases in the 2006 Award were ultimately confirmed:

the wage increases stated above for this bargaining unit will be reduced on a percentage or, part of a percentage basis, accordingly and the reduction shall be spread evenly over the entire term of this Award.

2009 Award, Maj.Op., at 2.

In its petition to vacate the 2009 Award, the City averred the wage increases violate the 2002 Recovery Plan inasmuch as they are retroactive and exceed the Plan's salary mandates.

The common pleas court denied the City's petition to vacate. However, in light of the 2002 Recovery Plan and our decision in Scranton FOP (2009), the court modified the 2009 Award.

Regarding the Award's wage increases, the common pleas court recognized the wage limitations in the 2002 Recovery Plan applied only in the years 2003, 2004 and 2005. However, the common pleas court determined "the attempt by the arbitration panel to retroactively adjust wages by semi-annual increases does violate the recovery plan." Comm. Pleas Ct., Slip Op., 11/18/09, at 4. Accordingly, the court modified the Award by deleting the mid-year increases in the years 2009-2014. As modified, the 2009 Award provided for the following wage increases:

* January 1, 2008 -- 8.0% increase across the board;

* January1, 2009 -- 3.0% increase across the board;

* January 1, 2010 -- 3.0% increase across the board;

* January 1, 2011 -- 3.0% increase across the board;

* January 1, 2012 -- 3.0% increase across the board;

* January 1, 2013 -- 3.2% increase across the board;

* January 1, 2014 -- 3.2% increase across the board.

Comm. Pleas Ct. Order, 11/18/09, at 1.

3. Health Care

Section 3 of the 2009 Award included the following health care provisions:

Health Insurance.

..

A. The City is ordered to fully cooperate with the Health Care Committee by providing all information reasonably necessary to its function and by cooperating with the National Health Care Consultant in the Committee's efforts to contain health care costs.

B. Effective 30 days after the issuance of this Award, the applicable deductibles and/or copayments shall be adjusted as follows:

1. The maximum individual annual deductible under the medical insurance plan shall be increased from $200 to $400 for in-network and out-of-network.

2. The maximum family annual deductible shall be increased from $400 to $800 for ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.