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Borough of Emmaus v. Pennsylvania Labor Relations Board

Commonwealth Court of Pennsylvania

March 13, 2017

Borough of Emmaus, Petitioner
Pennsylvania Labor Relations Board, Respondent

          Argued: June 8, 2016




         The Borough of Emmaus (Borough) petitions for review from the September 16, 2014 final order of the Pennsylvania Labor Relations Board (Board), which dismissed the Borough's exceptions to the hearing examiner's June 3, 2014 order certifying the Pennsylvania Professional Fire Fighters Association (Association) as the exclusive representative of all full-time and regular part-time firefighters of the Borough's Fire Department (Fire Department) under the act commonly referred to as Act 111.[1]

         In this case, the Fire Department was previously considered - or at least believed - to be a "volunteer" fire department that operated independent of the Borough. However, the Borough's Council passed an ordinance that paid its firefighters an hourly wage and structured the Fire Department in such a manner that the firefighters were placed under the authoritative and direct control of the Borough Council and/or its supervisory agents. As a result of these measures, the firefighters instituted proceedings under Act 111, and the Board concluded that an employer-employee relationship existed between the Fire Department and the Borough; therefore, the firefighters were authorized by statute to unionize, and, with the Association's representation, engage in collective bargaining with the Borough. Discerning neither error nor abuse of discretion in the Board's decision, we will affirm.


         On October 24, 2013, the Association filed a petition seeking to represent a unit of full-time and regular part-time firefighters employed by the Borough. At a hearing before a Board hearing examiner on January 9, 2014, the parties stipulated that the only issue to be decided "is whether the petitioned-for fire fighters are employed by the Borough." (Board's Findings of Fact (F.F.) at No. 3.)[2]The hearing examiner made the following findings of fact.

         The Borough is a public employer and a political subdivision pursuant to Act 111 and the Pennsylvania Labor Relations Act (PLRA).[3] The Fire Department is a non-profit corporation incorporated by the Borough. The Borough owns the Fire Department building, most of the Fire Department equipment, and the firefighters' training facility. (F.F. at Nos. 1, 5, 8.)

         In 1999, the Borough adopted Ordinance No. 887 (Ordinance) "to effectuate the 'Establishment of the Fire Department . . . comprised of vehicles, equipment, and volunteers from the pre-existing Fire Department of the Borough . . . and any additional equipment or manpower which may be specified by Borough Council.'" (F.F. at Nos. 5-6 (quoting Ordinance).) The Ordinance also established various officer positions, including Fire Chief, Assistant Fire Chief, Deputy Fire Chief, Captain, Lieutenant, and Engineer. The Ordinance states that the Borough Council shall appoint those officers, who "'shall serve as at-will employees and appointees.'" (F.F. at 6 (quoting Ordinance).) The Borough retained the right to adopt rules, regulations, and standard operating procedures, which are binding on the Fire Department and its firefighters; however, the Fire Chief has the right to issue standing orders and a Standard Operating Procedure Manual to direct firefighting activities. The Ordinance also "designates the Borough Council as the entity which sets salaries and compensation for [the] firefighters, after consideration of any recommendation which the Fire Chief may provide." (F.F. at No. 7.)

         The Fire Department does not pay for its operations, equipment, or personnel because the Borough directly pays for those items from its Fire Department budget. The Fire Department obtains fuel for fire trucks and equipment directly from the Borough garage at no cost. The Borough's budget contained "38 line items for the Fire Department, totaling $513, 016 in actual expenditures in 2012 and a 2013 budgeted amount of $448, 158." (F.F. at No. 11.) Pursuant to Borough regulations, no one at the Fire Department, including the Fire Chief, is authorized to make expenditures greater than $500.00 without first obtaining the Borough's permission. (F.F. at Nos. 10-11.)

         The Fire Department is managed by two Borough employees, the Fire Chief and the Borough Secretary. The Borough Secretary "runs the day-to-day operations, including the scheduling of fire fighters on a monthly calendar" and also exercises discretion in assigning firefighters to specific shifts. (F.F. at 12.) The firefighters perform various activities during their assigned shifts, such as responding to fire calls, maintaining the fire station, and training. When the firefighters arrive at work, they are required to punch in and out with a time-card system so that the Borough Secretary may track their hours. When a firefighter is unable to work a scheduled shift, he or she must find a replacement. During their scheduled shifts, the firefighters are not permitted to leave the fire station to conduct personal errands. Based on the firefighters' timesheets, the Borough issues monthly paychecks directly to the firefighters and withholds taxes from their paychecks. The firefighters also receive W-2 tax forms from the Borough at the end of each year. The firefighters are paid an hourly rate and may receive overtime if it is authorized by the Fire Chief or Assistant Fire Chief. If overtime is not authorized, a firefighter must punch out and continue to work his or her shift as a volunteer without pay. In 2012, the wage rate for the firefighters ranged from $10.00 per hour to $15.00 per hour. The Borough Council "has the power to set and approve the hourly rates." (F.F. at Nos. 13-15, 18.)

         A person interested in becoming a firefighter for the Fire Department must complete an application, which is reviewed by the Fire Chief but "then must be approved by the Borough." (F.F. at No. 20.) "The Borough Council regularly reviews the [Fire] Chief's recommendations for the hiring of fire fighters." (Id.) Although the Fire Chief is responsible for disciplining firefighters, the Borough has the final say over disciplinary matters. A firefighter who is unhappy with the Fire Chief's disciplinary decision "may appeal the decision to the Borough Manager." (F.F. at No. 21.) In one instance, the Fire Chief terminated a firefighter; however, the termination letter directed the firefighter to the Borough Manager regarding questions about the discipline, and the Borough Manager attended the firefighter's termination meeting. The Borough Manager has the power to discipline members of the Fire Department for violating the Borough policies. (F.F. at No. 22.)

         In 2011, all firefighters received the Borough's Personnel Policy, which "is a compilation of Borough policies ranging from hiring to drug and alcohol to personnel files, signed by the Borough Council President." (F.F. at No. 23.) The Personnel Policy also states that it "does not alter the 'at-will presumption of employment.'" (Id. (quoting Personnel Policy).) All firefighters were required to sign a form acknowledging receipt of the policy and return it to the Borough Manager. The firefighters also received the Borough's Non-Union Employees Light-Duty Policy and were required to provide a form acknowledging its receipt to the Borough Manager. (F.F. at No. 24.) In December 2013, the Borough issued the firefighters a memorandum with their paychecks regarding the local services tax; the memorandum stated that it was directed to all "[Part-Time] Employees." (F.F. at No. 25.)

         The Fire Department's Standard Operating Guidelines (Guidelines) "defer to and rely on the personnel policies and regulations set forth by the Borough." (F.F. at No. 26.) For example, the Guidelines allow the Borough to perform background checks on all firefighters. The officers of the Fire Department are required to submit annual budget requests to the Fire Chief and the Borough Secretary, who then provide the requests to the Borough Council. Although the Borough Council tries to give deference to the requests, it often rejects them due to "deficits and other safety concerns." (F.F. at Nos. 26, 28.)

         The Fire Chief "is in charge at a fire and gives directives to the individual fire fighters in their daily operations." (F.F. at No. 30.) The Fire Chief has disciplined firefighters for various offenses, including insubordination. The Fire Chief terminated a firefighter in February 2011, without obtaining approval from anyone, and also suspended a firefighter in October 2011. (F.F. at No. 29.)

         By order dated April 11, 2014, the hearing examiner determined that the firefighters are employees of the Borough, rather than volunteers, because they receive an hourly wage in exchange for their services. Because the Borough exercises control over the firefighters and has the ultimate say over disciplinary and hiring matters, the hearing examiner also determined that an employment relationship exists between the Borough and the firefighters under Act 111. Thereafter, on June 3, 2014, the hearing examiner issued an order certifying the Association as the exclusive representative of all full-time and regular part-time firefighters of the Fire Department.

         On June 23, 2014, the Borough filed exceptions to the June 3, 2014 order, arguing that some of the hearing examiner's factual findings were not supported by substantial evidence and the hearing examiner erred in concluding that the firefighters are the Borough's employees. The Board agreed with the hearing examiner that the firefighters are Borough employees under Act 111 and, therefore, dismissed the Borough's exceptions. The Borough now appeals from that decision.[4]


         On appeal, the Borough asserts that the Board erred in concluding that the firefighters are Borough employees rather than volunteers and that the Board's factual findings are unsupported by substantial evidence.

         Section 1 of Act 111 provides:

Policemen or firemen employed by a political subdivision of the Commonwealth or by the Commonwealth shall, through labor organizations or other representatives designated by fifty percent or more of such policemen or firemen, have the right to bargain collectively with their public employers concerning the terms and conditions of their employment, including compensation, hours, working conditions, retirement, pensions and other benefits, and shall have the right to an adjustment or settlement of their grievances or disputes in accordance with the terms of this act.

43 P.S. §217.1 (emphasis added).

         Preliminarily, we note that neither Act 111 nor the PLRA defines the term "volunteer." However, the customary legal definition of "volunteer" is "[a] person who gives his services without any express or implied promise of remuneration." Black's Law Dictionary 1576 (6th ed. 1990) (emphasis added). In this case, it is undisputed that the Borough pays the firefighters hourly wages in exchange for their services, at rates between $10.00 per hour to $15.00 per hour, and that the Borough pays the firefighters for all of the hours that they work, excluding overtime. (F.F. at No. 17.) The payment of compensation, particularly financial compensation based upon the number of hours worked, is the hallmark of "employee" status in the labor relations context. See, e.g., Seattle Opera v. National Labor Relations Board, 292 F.3d 757, 762 (D.C. Cir. 2002) (stating that an employee is any person who works for another for financial or other compensation).[5] At the very least, the payment of hourly wages is sufficient to take a worker out of the realm of being a "volunteer" (unless a statute says otherwise) and/or militates toward a finding that an employment relationship exists. See Juino v. Livingston Parish Fire District, 717 F.3d 431, 437 (5th Cir. 2013) (observing that courts "have held that a volunteer was not an 'employee' when there was no showing of remuneration."); Krause v. Cherry Hill Fire District 13, 969 F.Supp. 270, 277 (D.N.J. 1997) (concluding that firefighters were not volunteers "[i]n view of the fact that the [firefighters] both expected and received hourly compensation . . . ."). Because the payment of hourly-based wages takes the firefighters outside the realm of the definitional concept of volunteers, the dispositive issue, then, is whether the firefighters, in light of the circumstances of this case, are "employees" of the Borough.

         "The determination of the employment status is a matter of fact in each case and must be determined by the peculiar circumstances of the individual situation." Rodgers v. Washington County Institution District, 37 A.2d 610, 611 (Pa. 1944). In Sweet v. Pennsylvania Labor Relations Board, 322 A.2d 362 (Pa. 1974), the Pennsylvania Supreme Court set forth the following test for determining whether an employer-employee relationship exists: whether the putative employer has (1) the right to select the employee; (2) the power to discharge the employee; and (3) the right to direct the work to be done and the manner in which the work is done. Id. at 365; see also International Association of Fire Fighters, Local 2844, AFL-CIO, CLC v. Pennsylvania Labor Relations Board, 504 A.2d 422, 424 (Pa. Cmwlth. 1986) (en banc) (stating that Sweet "require[s] an examination into who possesses the right to control the economic and conditional terms of employment"). The Sweet Court further stated that "[t]he duty to pay an employe's salary is often coincident with the status of employer, but not solely determinative of that status." 322 A.2d at 365. Following Sweet, in Coleman v. Board of Education of the School District of Philadelphia, 383 A.2d 1275 (Pa. 1978), the Pennsylvania Supreme Court explained that "[t]he [Sweet] test is thus framed in terms of the right and power to exercise such control, not in terms of whether the right and power were actually exercised or whether they were delegated to another." Id. at 1279 (emphasis in original).

         Here, the Board found that: the Ordinance established the Fire Department and reserved to the Borough the right to establish rules, regulations, and procedures for the Fire Department; the Borough owns all of the Fire Department's equipment and buildings; the Borough controls and pays for the Fire Department's budget and expenditures; the Fire Department is run by the Fire Chief and the Borough Secretary, both of whom are Borough employees; and the firefighters are required to punch in and out of work and must remain at the fire station during their shifts. (F.F. at Nos. 6-8, 10-11, 13-14.) With regard to wages, the Board found that: the Borough pays the firefighters hourly wages and withholds taxes from their paychecks; the Borough Council sets and approves the firefighters' hourly pay rates; the firefighters may work overtime if it is approved by the Fire Chief, a Borough employee; and if overtime is not approved, the firefighters must punch out and work as volunteers without pay. (F.F. at Nos. 15-18.) Critically, the Borough did not file exceptions to any of these factual findings, so they are conclusive on appeal. See 34 Pa. Code §95.98(a)(3) (stating that exceptions not specifically raised before the Board are waived).

         Upon examination, we conclude that these factual findings stand in diametric contrast to the findings in International Association of Fire Fighters, Local 2844, AFL-CIO, CLC. In that case, this Court concluded that a township did not exercise control over the important conditions of the employment relationship and, therefore, was not the "employer" of a volunteer fire company. Specifically, the findings of fact in International Association of Fire Fighters, Local 2844, AFL-CIO, CLC demonstrated that the volunteer fire company - not the township - established its own internal house rules, owned its equipment and fire house, determined the wages, benefits, and hours of the firefighters, and had its own president, board of directors, and fire chief. The polar opposite situation is present here, where the Borough has undertaken the task of governing and dictating all the terms and conditions of the working relationship that the volunteer firefighters decided for themselves and on their own accord in International Association of Fire Fighters, Local 2844, AFL-CIO, CLC. Therefore, we conclude that the above unchallenged findings sustain the Board's determination that the Borough exercises control over the firefighters' wages, hours, and working conditions.

         Further, this Court has stated that "[t]he employer's power to control the nature and the parameters of the employee's activities is the key to the relationship." Harmony Volunteer Fire Company v. Pennsylvania Human Relations Commission, 459 A.2d 439, 442 (Pa. Cmwlth. 1983). In other words, an extremely important component of any employer-employee relationship is the employer's "right to direct the work to be done and the manner in which the work is done." Sweet, 322 A.2d at 365.

         In Kelley v. Delaware, Lackawanna & Western Railroad Co., 113 A. 419 (Pa. 1921), the employer entered into a contract with a mine worker, which provided that "[t]he work was to be carried on under the supervision and according to the direction of the manager or his duly authorized agent, " id. at 420, and the mine foreman was the designated agent of the manager. Our Supreme Court concluded that, through the manager and/or the mine foreman, the employer actually exercised the right to direct and control the specific details of the work project and that the manager had the power to discharge an employee. As the Supreme Court concluded:

Recurring to the contract, we ascertain that it provides [that] the mine foreman shall have control of the work, and the [mine worker] shall be subject to his orders and directions . . . . with the right to remove from the work any workmen who in the opinion of its manager are incompetent, careless, or for any other reason unsatisfactory, and that the interpretation of the contract with reference to the work shall be by the manager whose decision shall be conclusive . . . . It is therefore manifest that through the manager and mine foreman full control over the means and manner of performance was reserved to [the employer], and there was left in the [mine worker] no independence whatever in manner and means of performance. This leads to the inevitable conclusion that the relation of the [mine worker] to the [employer] was that of employee . . . .


         Here, the Board found that the Fire Department is run, on a practical basis, by two Borough employees: the Fire Chief and the Borough Secretary. In particular, the Borough Secretary runs the day-to-day operations, and, among other things, schedules firefighters on a monthly calendar and assigns them to specific shifts. The Fire Chief administers the rules and regulations, is in charge and directs the movements of the firefighters at a fire, and gives directives to the individual firefighters in their daily operations when they are not attending to a fire. In addition, the Fire Chief possesses the power to discipline the firefighters, including the authority to terminate them, while the Borough Manager has the authority to discipline the firefighters for violating the Borough policies. (F.F. at Nos. at 13, 21-22, 26, 30.) Notably, for any shift on which a firefighter is scheduled, the firefighter must remain at the Fire Department or otherwise engage in activities related to his or her duties, and is not free to leave the Fire Department to run personal errands or engage in personal matters. (F.F. at 14.) Cf. Mendel v. City of Gibraltar, 842 F.Supp.2d 1035, 1042 (E.D. Mich. 2012), rev'd on other grounds by 727 F.3d 565 (6th Cir. 2013) ("Lack of control is illustrated by this undisputed fact: the firefighters are not required to report when the City calls them to respond to a fire emergency."); Wolverton v. City of Kenner, 225 So.2d 662, 663 (La. Ct. App. 4th Cir. 1969) ("Indeed the evidence is unrebutted that the individual volunteer is at liberty to go or not to go to any particular fire as he alone sees fit, making it plain that not even the Volunteer Company controls him.").

         The Borough did not take exception to any of the above findings of fact either and, hence, they too are binding and conclusive for purposes of this appeal. See 34 Pa. Code §95.98(a)(3).

         These findings, in turn, render the circumstances of this case akin to those in Kelley. Therefore, in accordance with Kelley, we conclude the Borough, acting through the Borough Secretary and the Fire Chief, actually directs and controls the details of the firefighters' work and has the power to discipline and discharge the firefighters if necessary. Significantly, it is undisputed that the Borough Secretary and the Fire Chief advance the interests of the Borough in managing and directing the firefighters in terms of their working schedules, job duties, and discipline, and both the Borough Secretary and Fire Chief are statutorily designated - or are on the same level - as the Borough in its capacity of "employer." See Section 3(c) of Act 111, 43 P.S. §217.3(c) ("The term 'employer' includes any person acting, directly or indirectly, in the interest of an employer . . ."); see also Lancaster County v. Pennsylvania Labor Relations Board, 124 A.3d 1269, 1287 (Pa. 2015) (interpreting similar statutory provision in PERA and concluding that supervisors were the "employer" because the supervisors were "individual[s] having authority in the interests of the employer to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward or discipline other employes" or "to a substantial degree effectively recommend such action . . . .") (citation omitted).

         The Borough contends, though, that the Board's Finding of Fact No. 21, insofar as it stated that "the final say on discipline rests with the Borough, " id., is not supported by substantial evidence.

         Under Pennsylvania law, it is within the province of the Board, as the factfinder, to weigh conflicting evidence, make appropriate credibility determinations, resolve primary issues of fact, and draw reasonable inferences from the established facts and circumstances. Lehighton Area School District v. Pennsylvania Labor Relations Board, 682 A.2d 439, 442 (Pa. Cmwlth. 1996). Findings of fact are conclusive on appeal as long as the record contains substantial evidence to support those findings. Uniontown Area School District v. Pennsylvania Labor Relations Board, 747 A.2d 1271, 1274 (Pa. Cmwlth. 2000).

         "Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Delaware County Lodge No. 27, Fraternal Order of Police v. Pennsylvania Labor Relations Board, 694 A.2d 1142, 1145 n.5 (Pa. Cmwlth. 1997). Stated differently, "[s]ubstantial evidence is more than a mere scintilla and must do more than create a suspicion of the existence of the fact to be established." Shive v. Bellefonte Area Board of School Directors, 317 A.2d 311, 313 (Pa. Cmwlth. 1974).

         In performing a substantial evidence analysis, this Court must view the evidence in the light most favorable to the party who prevailed before the factfinder and draw all reasonable inferences which are deducible from the evidence in favor of the prevailing party. See Waldameer Park, Inc. v. Workers' Compensation Appeal Board (Morrison), 819 A.2d 164, 168 (Pa. Cmwlth. 2003); Tapco, Inc. v. Unemployment Compensation Board of Review, 650 A.2d 1106, 1108-09 (Pa. Cmwlth. 1994). Furthermore, in a substantial evidence analysis where both parties present evidence, it does not matter that there is evidence in the record which supports a factual finding contrary to that made by the factfinder. Rather, the pertinent inquiry is whether there is any evidence which supports the factual finding actually made. See Waldameer Park, 819 A.2d at 168; Tapco, Inc., 650 A.2d at 1108-09.

         At the hearing, the Borough Secretary testified that if a disciplined firefighter has "a major problem[, ] [he or she] can go above the department head, the [F]ire [C]hief, and go to the Borough, " specifically the Borough Manager. (Notes of Testimony (N.T., 1/9/14, at 325-26.) In one instance, a termination letter specifically advised a discharged firefighter to contact the Borough Manager with any questions, and the Borough Manager attended the termination meeting. (Id. at 306, 325.) The Borough Secretary further testified that a disciplined firefighter's final recourse is to appeal to the Borough Manager. (Id. at 326.) While it is true that the Borough Secretary was unaware of specific instances in which the Borough Manager had overruled the Fire Chief, she testified that the Borough Manager can overrule the Fire Chief's disciplinary decisions. (Id. at 326-27.) Furthermore, the Borough Manager testified that if a member of the Fire Department does not adhere to the Borough's policies, the Borough Manager has "the power as a member to discipline anyone. It's [his] function [to discipline] those violating policies in" the Fire Department. (Id. at 199.)

         Viewing this evidence in the light most favorable to the Fire Department, [6] we conclude that the record contains substantial evidence to support the Board's finding that the Borough Manager, a high-ranking supervisory agent who acts on behalf of the Borough Council, has the ultimate authority on disciplinary matters. See 43 P.S. §217.3(c) ("The term 'employer' includes any person acting, directly or indirectly, in the interest of an employer . . ."); Section 1141 of the Borough Code, [7] 8 Pa.C.S. §1141 (stating that "[t]he council of a borough may, at its discretion at any time, create by ordinance the office of borough manager" and that "[t]he borough manager shall serve at the pleasure of council . . . ."); see also Lancaster County, 124 A.3d at 1287. Although the record indicates that the Borough Manager has not yet exercised this authority, and it is conceivable that he never will, the key inquiry in determining whether an employment relationship exists is whether the putative employer has "the right and power to exercise . . . control, not . . . whether the right and power were actually exercised . . . ." Coleman, 383 A.2d at 1279. Therefore, we conclude that the Board did not err in determining that the Borough, acting through the Borough Manager, retained the right to discipline or terminate a firefighter irrespective if any discipline imposed by the Borough Secretary or Fire Chief.

         The Borough also contends that the firefighters cannot be employees of the Borough because the Borough Council uses the term "appoint, " rather than "hire, " when voting to approve the Fire Chief's recommendation for a firefighter. The Borough asserts that the record lacks substantial evidence to ...

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