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City of Allentown v. International Association of Fire Fighters Local 302

Supreme Court of Pennsylvania

March 28, 2017

CITY OF ALLENTOWN
v.
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS LOCAL 302 INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS LOCAL 302
v.
CITY OF ALLENTOWN APPEAL OF: INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS LOCAL 302

          ARGUED: September 13, 2016

         Appeal from the Order of the Commonwealth Court dated August 7, 2015 at No. 1802 CD 2014, affirming in part and reversing in part the Order of the Court of Common Pleas of Lehigh County, Civil Division, dated September 8, 2014 at Nos. 2013-C-4397 and 2013-C-4438

          OPINION

          TODD JUSTICE.

         In this appeal by allowance, we consider, in the context of an interest arbitration award, whether a provision requiring a certain minimum number of firefighters on duty per shift is a mandatory subject of bargaining or a non-bargainable managerial prerogative. For the reasons set forth below, we conclude that the number of required firefighters per shift is a mandatory subject of bargaining, and implicates managerial responsibilities, but does not unduly infringe upon those managerial rights, and, thus, may properly serve as a component of an interest arbitration award. Thus, we reverse the order of the Commonwealth Court.

         The background of this matter is not in dispute. The right of firefighters and police officers to collectively bargain for purposes of wages, hours, and working conditions is secured through the Police and Firemen Collective Bargaining Act, commonly known as Act 111. See 43 P.S. §§ 217.1 - 217.10. Appellant, the International Association of Fire Fighters, Local 302 ("IAFF"), is the exclusive bargaining representative for the firefighters of Appellee, the City of Allentown (the "City"), for purposes of collective bargaining with the City. The City and the IAFF were parties to a seven-year collective bargaining agreement which ran from January 1, 2005 through December 31, 2011.

         This agreement contained a provision mandating certain minimum staffing levels of firefighters per shift. Specifically, Article 26(B) of the agreement set a minimum on-duty shift strength of no less than 26 firefighters as of January 1, 2005; no less than 27 firefighters as of January 1, 2006; and no less than 28 firefighters as of January 1, 2007.

         In May 2011, the parties began to bargain over a successor contract, but could not reach an agreement. The City declared an impasse, [1] and requested binding interest arbitration.[2] See 43 P.S. § 217.4. An arbitration panel was selected, and proceedings were conducted, including hearings in November 2011, an appeal to the Lehigh County Court of Common Pleas, and a remand of the matter for an additional day of hearings, which was held on April 22, 2012.

         Ultimately, the interest arbitration panel issued its final Opinion and Award on November 6, 2013. The award established a new collective bargaining agreement for the period January 1, 2012 (covering the period after the expiration of the prior agreement) through December 31, 2015. The award also made modifications to issues of wages, sick leave, vacation, pension, and overtime. Relevant for purposes of this appeal, the panel determined that the previous contract's requirements found in Article 26(B) regarding the City's implementation of staffing and the requirement that the City employ a certain number of firefighters were suspended, and instead, declared that "there shall be a manning scheduling requirement of twenty-five (25) per shift, which shall include all scheduled personnel including command positions." In the Matter City of Allentown v. IAFF, AAA Case No. 14 360 L 00947 11, dated July 11, 2012, at 5 (reissued in supplemental Opinion and Award in In the Matter City of Allentown v. IAFF, AAA Case No. 14 360 L 00947 11, dated September 23, 2013 and finalized on November 6, 2013). The panel also provided that the City was not obligated to recall firefighters to replace any scheduled firefighter if the number of firefighters called to report to work on any shift fell below 25, where such absence was due to the use of a sick day, due to disability leave, or due to the use of any other unanticipated paid or unpaid leave, except for a previously scheduled vacation or personal day. Id. In effect, the award, which crafted a new agreement from January 1, 2012 through December 31, 2015, suspended Article 26(B)'s minimum shift staffing requirements until the expiration of the new agreement, and, during the term of the agreement, the minimum staffing requirement was set at 25 individuals per shift.

         The City filed a petition with the Lehigh County Court of Common Pleas to partially vacate the award on the basis that, inter alia, the provision covering the number of firefighters required per shift was a managerial prerogative and beyond the power of the arbitration panel to compel. The IAFF also filed a petition to partially vacate the arbitration award, challenging certain aspects of sick leave requirements and pension benefits.

         The Lehigh County Court of Common Pleas, in an opinion by Judge Douglas Reichley, considered, inter alia, the City's argument that the minimum on-duty shift strength provision was a non-bargainable managerial prerogative. Relying upon the Commonwealth Court's decision in IAFF, Local 669 v. City of Scranton, 429 A.2d 779, 781 (Pa. Cmwlth. 1981) (addressing whether establishing a total number of departmental firefighters constituted a managerial prerogative, as discussed below), the court considered the relationship between staffing levels and the firefighters' duties. While recognizing total employment numbers were a matter of managerial authority, the court opined, based on the hearing testimony, that the specific numbers of individuals on duty at any given time was rationally related to the duties and safety of firefighters. As issues rationally related to firefighter safety are subject to arbitration, the court concluded that the number of on-duty firefighters per shift was not a managerial prerogative, but, rather, was subject to the interest arbitration panel's jurisdiction. Therefore, the court denied the City's petition to vacate Article 26(B) of the new collective bargaining agreement, per the arbitration panel's award.[3] The City appealed the Court of Common Pleas' decision to the Commonwealth Court.

         An en banc Commonwealth Court affirmed in part and reversed in part in a split decision. Writing for the majority, then-President Judge, now-Senior Judge, Dan Pellegrini explained that the staffing inquiry initially focused upon whether the subject matter implicated a managerial responsibility, and, then, whether the award unduly infringed upon that right. In approaching the question, the court considered two of its decisions which marked a distinction between provisions affecting staffing requirements and those affecting the overall number of employees to be employed. In City of Scranton, the Commonwealth Court considered an arbitration panel award which mandated that the City of Scranton increase its minimum number of firefighters to 225 persons. The city challenged the award, contending the size of the force was a managerial prerogative and not subject to an arbitration award. The Commonwealth Court concluded that determining the size of a fire department was a managerial prerogative for the municipality, as such decisions had far reaching political and economic implications. In contrast, in Appeal of City of Erie, 459 A.2d 1320 (Pa. Cmwlth. 1983), the court addressed an arbitration panel award which mandated a minimum crew of four on each firefighting rig. Relying upon testimony that less than four firefighters on a rig could impair the firefighters' safety, the City of Erie court distinguished City of Scranton, reasoning that the safety of a firefighter was more rationally related to the number of persons with whom he or she was fighting a fire or operating a piece of equipment than to the total complement of members on the force.

         Considering these decisions, the Commonwealth Court in the matter sub judice determined that the minimum shift staffing requirement implicated both the terms and conditions of employment for firefighters and the City's managerial responsibilities, and, thus, turned to whether that mandate unduly infringed upon the City's managerial responsibilities. Noting that staffing levels impact government spending, budgeting, level of fire protection, and taxation, the court concluded that requiring minimum shift staffing unduly infringed upon the City's managerial responsibilities by restricting its decisions concerning the fire protection levels it desires or can afford. Therefore, the court found that the arbitration panel's minimum staffing mandate concerned a managerial prerogative which lies outside of the scope of collective bargaining, and, thus, was beyond the arbitration panel's authority to impose. Accordingly, the court reversed the trial court's order denying the City's petition to vacate the shift staffing requirements.[4]

         Judge Kevin Brobson filed a dissenting opinion. He reasoned that, while the minimum shift staffing provision touched upon a managerial responsibility, because the City presented no evidence of undue infringement, he could not conclude that the arbitration panel erred under the narrow certiorari standard of review. Judge Patricia McCullough also filed a dissenting opinion, finding that the evidence of record established that the minimum shift requirement related to firefighter safety, and, thus, was subject to mandatory bargaining. She further offered that the minimum shift staffing mandate was distinguishable from other mandates affecting the total number of firefighters which had been found to be an inherent managerial prerogative.

         We granted allocatur principally on the issue of whether minimum shift staffing is a mandatory subject of bargaining, or a managerial prerogative that is not subject to bargaining and, therefore, not properly the subject of an Act 111 interest arbitration award. City of Allentown v. IAFF, 2016 Pa LEXIS 378 (Pa. filed March 3, 2016) (order). As this question arises in the context of review of an Act 111 interest arbitration award, we review the award under the limited standard of narrow certiorari. Specifically, under this standard, a court's review of an interest arbitration award is limited to consideration of questions concerning: (1) the jurisdiction of the arbitrators; (2) the regularity of the proceedings; (3) an excess of the arbitrator's power; and (4) the deprivation of a constitutional right. Michael Lutz Lodge No. 5. v. City of Philadelphia, 129 A.3d 1221, 1227 (Pa. 2015). The third question is implicated herein.

         Before turning to the parties' arguments, it is beneficial to consider the legal background and framework by which we analyze questions involving topics of bargaining, managerial responsibilities, and the decisional law regarding bargaining over the staffing of public-safety personnel.

         While private sector employees enjoyed legal protection of the right to organize and collectively bargain with their employer beginning in the late 1930s, the law denied such rights to public-safety employees. See Pennsylvania State Police v. Pennsylvania State Troopers Association (Betancourt), 656 A.2d 83, 88-89 (Pa. 1995). Resultant disharmony in the public-safety arena, and, at times, illegal and disruptive strikes, led to legislative reform by the late-1960s. Act 111, enacted in 1968, was viewed as a compromise - "a more perfect balance between the need of the Commonwealth to insure public safety and the rights of the worker." Betancourt, 656 A.2d at 89. It was a restorative and remedial measure, as it conferred on public-safety employees, such as police and firefighters, the right to collectively bargain and the right to interest arbitration, promising the timely and final resolution of bargaining issues. Yet, due to the essential services provided by these employees, the prohibition on striking by public-safety employees remained intact.[5]

         More specifically, and as explained in Borough of Ellwood City v. PLRB, 998 A.2d 589, 596 (Pa. 2010), the right to collectively bargain over the terms and conditions of employment was crucial to the essential compromise which resulted in the restoration and maintenance of the relationship between public-safety personnel and their municipal employer. With respect to collective bargaining - central to the rights created by the new legislation - Act 111 permitted police and fire personnel the right to negotiate over "the terms and conditions of their employment, including compensation, hours, working conditions, retirement, pensions and other benefits, and . . . 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.

         While the granting of collective bargaining rights to police and firefighters over topics relating to the terms and conditions of employment was the engine that drove Act 111 and resulted in greater labor harmony, managerial prerogatives were not deemed to be subject to the bargaining process. Borough of Ellwood City, 998 A.2d at 599-600. The rationale for this extra-statutory limitation on bargaining[6] is that such topics are essential to a municipality in managing its employees and providing government services; even more so, certain managerial matters "strike at the heart of policy decisions that directly implicate the public welfare, and, thus, should be insulated from the give-and-take of collective bargaining." Id. at 600. Topics that fall into the category of inherent managerial prerogatives include "the functions and programs of the public employer, standards of services, its overall budget, utilization of technology, the organizational structure, and selection and direction of personnel." Id. at 599 (citations omitted). As we stated in City of Philadelphia v. IAFF, Local 22, "matters of managerial decision-making that are fundamental to public policy or to the public enterprise's direction and functioning do not fall within the scope of bargainable matters." 999 A.2d 555, 569-70 (Pa. 2010).

         The issue of whether a topic is a mandatory subject of bargaining or a managerial prerogative that is not subject to negotiation governs whether that topic may be a component of an Act 111 interest arbitration award. Specifically, in City of Philadelphia, our Court explained that, as Act 111 does not permit an illegal act, an arbitration panel "exceeds its powers if in its award it mandates that such an act be carried out." 999 A.2d at 565. We developed that an arbitration panel is "'empowered to award any term or condition of employment to which a public employer and its police or fire employees may voluntarily agree, ' but is not empowered 'to address issues outside of that realm.'" Id. Therefore, an arbitration award that incorporates matters not subject to collective bargaining, such as topics that constitute inherent managerial prerogatives, implicates an excess powers claim under the narrow certiorari standard of review of Act 111 arbitration awards. Id.

         Thus, ultimately, we are attempting to discern the legislature's intent regarding the rights and duties of municipal employers and unions regarding collective bargaining - more specifically, and as described in detail below, we must discern what are the proper subjects of bargaining, what are managerial responsibilities, and what are managerial prerogatives. Regarding subjects of bargaining, the General Assembly could have supplied an exhaustive list of all mandatory subjects of bargaining, but it did not do so. 43 P.S. § 217.1. While providing certain examples of subjects of bargaining, such as "hours, " which has caused relatively little difficulty, the legislature employed more open-ended terminology as well, such as "terms and conditions of employment, " and "other benefits, " the nature of which has been debated and left to administrative and judicial determination. See id.; City of Philadelphia, 999 A.2d at 566-67 (finding the General Assembly did not purport to subject every decision a public entity makes to collective bargaining, that certain statutory subjects of bargaining are subject to interpretation, and that delineation of matters that are subject to collective bargaining is ultimately a question of statutory construction). As we noted in City of Philadelphia, "[s]ince the General Assembly did not provide a statutory standard in Act 111 for the courts to use to distinguish between those awards . . . that are consistent with the scope of collective bargaining . . . and those awards that are not, this Court must." Id. at 571.

         However, the divisions between these topics are not always clear. One may envision a Venn diagram with topics in the overlapping space that are terms and conditions of employment - which are subject to collective bargaining, and may serve as the part of an interest arbitration award - that also implicate matters of managerial responsibility - over which negotiation is not mandated, and which cannot serve as the basis for an arbitration award. As explained below, mandatory minimum shift staffing is one of these topics.

         In these circumstances, our Court has created a framework by which to analyze and resolve whether such overlapping topics are subject to mandatory negotiation and may be a component of an interest arbitration award, or whether they are insulated from collective bargaining as a managerial prerogative and not permitted to be part of such an award. Borough of Ellwood City (arising in challenge to ban on use of tobacco products in workplace); City of Philadelphia (arising in context of closure of fire companies). Specifically, given the history of Act 111, its terms, and the interpretation of that legislation by our Court, when considering topics that are the subject of an interest arbitration award which may implicate both mandatory subjects of bargaining and managerial responsibility, a court should initially determine whether the topic is subject to the right of collective bargaining - i.e., whether it is rationally related to the terms and conditions of employment. If the topic does not speak to a mandatory subject of bargaining, the inquiry ends and the award must fail. If the topic is germane to the terms and conditions of the workplace, the court should next ask whether the award also implicates a managerial responsibility. If not, the award must be upheld as the topic is bargainable, and within the authority of the arbitration panel to address.

         If, however, the topic is both a mandatory subject of bargaining and implicates managerial responsibilities, the final inquiry is "whether collective bargaining over the topic would unduly infringe upon the public employer's essential managerial responsibilities." Borough of Ellwood City, 998 A.2d at 600 (emphasis added). If bargaining over the subject would unduly infringe upon managerial responsibilities, the topic will be considered a managerial prerogative and non-bargainable, and, thus, unable to serve as the basis for an interest arbitration award. If not, the topic is subject to mandatory collective bargaining and may serve as a basis for an arbitration panel's award.[7] Id.; City of Philadelphia, 999 A.2d at 570-71.

         Moreover, the burden shifting contemplated by this construct is fairly straightforward. It is incumbent upon the bargaining representative to initially establish to the arbitration panel (or court) that the topic is subject to the right of collective bargaining - i.e., that it is rationally related to the terms and conditions of employment. The burden then shifts to the municipality to establish that the subject is a managerial responsibility. If it is established that the topic is both a proper subject of bargaining and a managerial responsibility, it is then necessary for the municipality to convince the tribunal that bargaining over such topic - and having that subject be a component of an interest arbitration award - would unduly infringe upon the municipality's responsibilities, and, thus, constitutes a managerial prerogative.[8] With this three-step analytical construct in mind, we turn to the arguments of the parties.

         The IAFF first notes that, while it has been determined by prior decisional law that setting a minimum staffing on a per apparatus basis is not a managerial prerogative, and setting a minimum number for the total complement of firefighters does infringe upon such managerial right, the question of minimum shift staffing falls between these two topics. The IAFF offers that, in City of Philadelphia, we cited with approval City of Scranton in which the Commonwealth Court found that a contract provision mandating that the city increase its total complement of firefighters to 225 employees was illegal, as it unduly infringed upon the city's inherent managerial prerogative to determine force size. In doing so, the City of Scranton court explained that "[t]he courts that have dealt with this issue have drawn a very fine line in distinguishing between the total number of persons on the force (not arbitrable), and the number of persons on duty at a station, or assigned to a piece of equipment, or to be deployed to a fire (all arbitrable because they are rationally related to the safety of fire fighters)." City of Scranton, 429 A.2d at 781 (emphasis added). The IAFF also points to the Commonwealth Court's decision in City of Erie, wherein the court concluded that an arbitration award requiring a minimum crew on each firefighting rig of four persons did not impact an inherent managerial responsibility, but was arbitrable as rationally related to the safety of firefighters.

         The IAFF submits that the number of persons on a shift, from a safety perspective, is more closely analogous to the "number of persons on duty at a station" than it is to the total number of firefighters working for the force. Thus, the IAFF concludes that the minimum shift requirement provision in Article 26(B) is not illegal and that that part of the arbitration panel's award should be upheld.

         Further, the IAFF points to the testimony of Art Martynuska, President of the Pennsylvania Professional Firefighters, and Lieutenant Christian Williams of the Allentown Fire Department and Vice President of IAFF Local 302, in support of the connection between safety and minimum shift requirements. Specifically, the IAFF proffers that both witnesses explained that the population of the City of Allentown, the density of its housing, other demographic factors, and the number of fire calls, combined with the number of firefighters employed per shift, have a direct and significant impact upon the health and safety of the firefighters. These witnesses offered that the fewer firefighters on shift, the more likely those firefighters would be injured in their jobs.

         Turning to whether the minimum shift mandate unduly infringes upon the City's exercise of managerial rights, the IAFF contends that topics that impact such rights go to the level of fire protection the municipality desires or can afford to provide. Appellant's Brief at 25. According to the IAFF, shift staffing does not unduly infringe upon a municipality's responsibilities, but allows it to retain the "authority to decide whether to hire more employees, close stations, revamp the force, or take some other managerial action." Id. (citing City of Scranton, 429 A.2d at 781). The IAFF argues that the City may hire or lay off as many employees as it desires, or change shift length, and still meet the safety needs of the firefighters, all without being forced to employ a certain overall number of firefighters. The IAFF claims that setting a minimum shift requirement is no different than setting a minimum number of firefighters on a piece of equipment or at a fire station, both of which it submits are mandatory subjects of bargaining.

         Moreover, the IAFF offers that the arbitration panel eliminated any undue infringement by refusing a per se minimum shift requirement, as the City was relieved of the minimum obligation where the number of firefighters fell below 25 in a shift due to sick leave, disability, or other type of unscheduled unpaid leave. The IAFF reasons that the arbitration panel found a rational relationship between the mandate and the firefighter's condition of employment, then found the City's managerial responsibilities would not be unduly infringed upon as the shift mandate was not absolute, thus, achieving a compromise between firefighter safety and the City's prerogative to determine the type of fire service it wants to provide to its citizens.[9]

         The City counters that the Commonwealth Court properly found the issue of minimum shift staffing not to be a proper subject of bargaining, and, thus, that such provision exceeded the powers of the arbitration panel. The City first notes that an Act 111 award must encompass only terms and conditions of employment, and not include issues that fall outside of those topics. Appellee's Brief at 14 (citing Betancourt, 656 A.2d at 90). Here, because the issue of minimum staffing concerns matters that are not subject to the right of collective bargaining under Act 111, the City contends the arbitration panel exceeded its powers under the narrow certiorari standard of review. Id. at 15.

         Turning to the Borough of Ellwood City standard, the City first acknowledges that minimum staffing concerns a topic that is subject to bargaining. It then takes the position that the issue also "constitutes a managerial prerogative as it directly results in determining the overall manning of the Department, thereby unduly infringing on the City's managerial prerogatives." Appellee's Brief at 16. In support of its argument, the City claims that a decision regarding the number of personnel to employ has been consistently regarded as a managerial prerogative, and that the minimum shift staffing issue implicates the same concerns as overall force staffing. Citing City of Scranton, the City notes that, in that decision, the Commonwealth Court held that the number of firefighters an employer deems appropriate is a managerial prerogative that is not arbitrable. The City further offers that the court in City of Scranton cast the issue as whether members of fire and police forces are to decide "how much of the municipal budget will be spent in the areas of fire and police protection, " and focused on the members having "the right to have a major decision-making impact on government spending, budgeting, the level of police and fire protection that the municipality must provide, and even taxation, because salaries for the additional employees must come from public funds." Appellee's Brief at 18 (quoting City of Scranton, 429 A.2d at 781).

         The City further explains that minimum shift staffing has the effect of setting a minimum budget for its fire department, below which the City is unable to fall regardless of need or whether the City could afford that service. The City develops that minimum shift staffing "was a major contributor to skyrocketing overtime, which in turn lead [sic] to spiking pension costs, " as overtime compensation is used in the calculation of pension benefits. Appellee's Brief at 19. Thus, according to the City, it must be left with the ultimate determination of the level of fire protection to be provided, and a minimum shift staffing provision eliminates such discretion. The City goes further and rejects the contention that it can revamp the force, eliminate certain apparatus, or close stations, as, according to the City, it will have to schedule and pay the minimum number of firefighters per shift even if it closed all of its fire stations. Moreover, to meet the minimum staffing requirements, the City asserts that it will be required to employ a certain minimum number of firefighters overall to have enough personnel for each shift, and, in doing so, discounts the IAFF's contention that it can change the length or type of shift to retain overall managerial prerogatives, as the length and type of shift are mandatory subjects of bargaining.

         Drawing an analogy, the City contends that minimum shift staffing is no different than a no-layoff clause which is a managerial prerogative. It goes on to note that, not only is bargaining limited to terms and conditions of employment, 43 P.S. § 217.1, but that decisions regarding the public welfare are properly left in the hands of the municipality that the citizenry authorized to make such decisions, and that holding otherwise would be "contrary to this nation's democratic values." Appellee's Brief at 25.

         We begin our analysis by summarizing what is not in contention. First, the IAFF and the City agree that the proper framework is the three-step analysis set forth in Borough of Ellwood City and City of Philadelphia described above. Again, under this approach, a court should initially determine whether the topic is subject to the right of collective bargaining - i.e., whether it is rationally related to the terms and conditions of employment. If so, the court should consider whether the award also implicates a managerial responsibility. If the topic is both a mandatory subject of bargaining and implicates a managerial responsibility, the final step of the inquiry is "whether collective bargaining over the topic would unduly infringe upon the public employer's essential managerial responsibilities." Borough of Ellwood City, 998 A.2d at 600. If unduly infringing upon a managerial responsibility, the topic will be considered a managerial prerogative that is non-bargainable, and, therefore, unable to serve as a component of an interest arbitration award. Id.; City of Philadelphia, 999 A.2d at 570-71.

         Applying this three-step analysis to the matter sub judice, the parties are in agreement that mandatory minimum staffing is rationally related to terms and conditions of employment, but also that such a minimum staffing provision implicates managerial responsibilities. Thus, the point of contention between the IAFF and the City is whether the mandatory minimum staffing provision "unduly infringes" upon the municipality's managerial responsibilities. To ...


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