The opinion of the court was delivered by: Bonnie Brigance Leadbetter, President Judge
Argued: November 10, 2010
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE RENEE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JOHNNY J. BUTLER, Judge
OPINION BY PRESIDENT JUDGE LEADBETTER
The City of Bradford (City) appeals from the order of the Court of Common Pleas of McKean County, denying the City's petition to vacate an arbitration award that modified discipline imposed on City employee James Taylor from termination to a long-term suspension without back pay and benefits. Our 2006 decision in this case, which vacated the arbitration award, was reversed and remanded by our Supreme Court for reconsideration in light of its decision regarding the standard of review of arbitration awards under the Public Employe Relations Act*fn1 (PERA) in Westmoreland Intermediate Unit #7 v. Westmoreland Intermediate Unit #7 Classroom Assistants Educational Support Personnel
Association, PSEA/NEA (Westmoreland I), 595 Pa. 648, 939 A.2d 855 (2007).
The underlying facts as found by the Arbitrator are not in dispute. The City discharged Taylor from his employment as a refuse collector based on a May 28, 2003, incident.*fn2 Taylor was working in his normal position, collecting garbage from curbside and placing it into the packer of a garbage truck, when he noticed a purse in an open garbage bag. Taylor did not retrieve the purse, but, as he put the garbage bag in the packer, it opened and a large sum of money spilled out. Taylor then pocketed this money. A co-worker observed Taylor and advised him to turn the purse in to his supervisor; Taylor did so, but kept the cash. After the supervisor contacted the police to report the found purse, the police investigated and determined that the purse, with $800 inside, had been reported stolen earlier in the day. The purse now contained only a few dollars, and the police questioned Taylor about the missing cash. Taylor initially denied taking any money; however, he later admitted he had taken $239, which he then surrendered to the police.
Arbitrator's Opinion at 2-3, Reproduced Record (R.R.) at 58a-59a.
On May 29, 2003, the City issued a disciplinary report, charging Taylor with violating Articles 13, 26 and 27 of the City's Standard Schedule of Disciplinary Offenses and Penalties (Disciplinary Schedule)*fn3 and suspending
Taylor indefinitely pending the City's final decision on the matter. R.R. at 40a.
Following a hearing, the City determined that Taylor committed the offenses with which he was charged and, by letter dated June 10, 2003, dismissed Taylor from his position. Thereafter, Teamsters Local Union No. 110 (Union) grieved Taylor's termination pursuant to the collective bargaining agreement (CBA) between the City and the Union, and the matter ultimately proceeded to arbitration.
The parties submitted to the Arbitrator the question of whether the City had "just cause" to terminate Taylor's employment,*fn4 and, if not, what the remedy should be. Arbitrator's Opinion at 1, R.R. at 57a. The CBA does not define "just cause," but it does incorporate the Disciplinary Schedule, which provides for a range of discipline for each employee offense, including theft.*fn5 Based upon these provisions in the CBA, and the holding in Office of the Attorney General v. Council 13, American Federation of State, County & Municipal
Employees, AFL-CIO, 577 Pa. 257, 844 A.2d 1217 (2004),*fn6 the Arbitrator concluded that he had the authority to determine what constitutes just cause for termination as well as the appropriateness of the penalty imposed, within the parameters set forth in the Disciplinary Schedule. Arbitrator's Opinion at 5-6, R.R. at 61a-62a.
The Arbitrator concluded that the record did not support two of the charges against Taylor, but that, by taking the money, Taylor did engage in theft,*fn7 thereby violating Article 26 of the Disciplinary Schedule. In considering whether Taylor's discharge was the appropriate penalty under the circumstances, the Arbitrator observed that the CBA reflected the parties' agreement that dismissal is not mandatory for a first-time violation of Article 26*fn8 and that "[w]hether or not restitution was made should enter into the determination of the penalty for the offense." R.R. at 46a. The Arbitrator interpreted these CBA provisions as follows:
[T]he Parties in this matter have recognized that extenuating circumstances sometimes exist and that discharge is not always the appropriate response. In the Disciplinary Schedule incorporated into the [CBA], the Parties have agreed that the discipline to be imposed for a first-time violation of Article 26 can range from a reprimand to removal. They also agreed "whether or not restitution was made should enter the determination of the penalty for the offense." With this negotiated language, the Parties have effectively agreed that theft, in and of itself, is not necessarily grounds for removal. Rather, mitigating factors, including whether restitution was made, may be considered in determining the appropriate discipline to be imposed.
Arbitrator's Opinion at 7, R.R. at 63a.
The Arbitrator then found that the City failed to consider certain mitigating circumstances in this case, including Taylor's prior good work history, the fact that the incident was isolated and not likely to be repeated and, most importantly, the fact that Taylor made full, if belated, restitution of the money taken. In recognition of these mitigating factors, the Arbitrator concluded that discharge was too harsh a penalty; accordingly, he reduced the discharge to a long- term suspension, without back pay or benefits, to run until the receipt of the award.*fn9 Id. at 63a-64a.
On appeal by the City, the trial court determined that, while review of the Arbitrator's award was governed by the "essence test," it also required application of what was then known as the "core functions" exception to the essence test. This exception was based on the premise that a government employer cannot bargain away its power to fire for misconduct bearing directly upon the performance of its essential (i.e., "core") functions, thereby imposing a legal restriction on an arbitrator's interpretation as to what the parties meant by "just cause." See, e.g., Greene County v. Dist. 2, United Mine Workers of Am., 578 Pa. 347, 852 A.2d 299 (2004); City of Easton v. Am. Fed'n of State, County & Mun. Employees, AFL-CIO, 562 Pa. 438, 756 A.2d 1107 (2000). Concluding that garbage collection was a core function of the City, the trial court vacated the award and reinstated Taylor's discharge.
In affirming, this court also applied the "core functions" analysis and held that "a public employer does not have the authority to expressly bargain away its ability to terminate an employee whose conduct hampers the employer's performance of its duties or its ability to insure the health, safety and welfare of its citizens, and any such provision in a CBA cannot be given effect." City of Bradford v. Teamsters Local Union No. 110, 901 A.2d 1103, 1112 (Pa. Cmwlth 2006), rev'd, 596 Pa. 353, 943 A.2d 263 (2008). Thereafter, the Union petitioned for allowance of appeal, and, by order dated March 26, 2008, our Supreme Court granted the Union's petition, reversed our ...