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Fraternal Order of Police Fort Pitt Lodge No. 1 v. City of Pittsburgh

Commonwealth Court of Pennsylvania

July 17, 2017

Fraternal Order of Police Fort Pitt Lodge No. 1, Petitioner
v.
City of Pittsburgh, Respondent City of Pittsburgh, Petitioner
v.
Fraternal Order of Police Fort Pitt Lodge No. 1, Respondent

          Argued: April 5, 2017

          BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE ANNE E. COVEY, Judge HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE JULIA K. HEARTHWAY, Judge HONORABLE JOSEPH M. COSGROVE, Judge

          OPINION

          RENÉE COHN JUBELIRER, JUDGE.

         In 2003, the City of Pittsburgh (City) was designated a financially distressed city by the Department of Community and Economic Development (DCED) pursuant to the Municipalities Financial Recovery Act[1] (Act 47), and entered into Act 47 oversight. As part of the Act 47 process, the City has implemented several Act 47 recovery plans, the most recent a Second Amended Recovery Plan in 2014 (2014 Plan). Relevant here, the 2014 Plan addresses the compensation of the City's employees, including its police officers. The City and the Fraternal Order of Police Fort Pitt Lodge No. 1 (FOP), which represents the City's police officers, are parties to a collective bargaining agreement (CBA) that expired on December 31, 2014. Being unable to reach an agreement on a new CBA, they entered into interest arbitration under the Act Governing Collective Bargaining by Policemen or Firemen[2] (Act 111). An arbitration board (Board) issued an interest arbitration award (Award), from which FOP appeals and the City cross-appeals to this Court.

         FOP appealed directly to this Court, asserting that the Award is a deviation from the 2014 Plan because it does not ensure the competitive compensation required by the 2014 Plan. (FOP's Br. at 25 (citing R.R. at 258a-61a).) FOP, therefore, contends that, pursuant to Section 252(e) of Act 47, 53 P.S. § 11701.252(e), this Court can review the Award to determine if the Board's deviation is in accordance with Section 252(b) of Act 47, 53 P.S. § 11701.252(b).[3]The City argues that the Award was consistent with the 2014 Plan and that FOP is really challenging, not the Award, but the 2014 Plan, which does not provide this Court with jurisdiction under Section 252(e). Because the Award complies with the 2014 Plan's allocations, the City argues the Award does not deviate from the 2014 Plan, and the normal appeals process should be followed. The City has therefore filed a Motion to Quash FOP's Petition for Review.[4]

         Typically, the process for challenging an interest arbitration award begins with filing a petition to vacate with the local county court of common pleas (common pleas), with further appeal as necessary. City of Scranton v. Firefighters Local Union No. 60, of Int'l Ass'n of Fire Fighters, 29 A.3d 773, 778-79 (Pa. 2011). Here, in addition to the appeals before this Court, both FOP and the City have also filed petitions to vacate the Award, which currently are pending before the Court of Common Pleas of Allegheny County.[5]

         However, the Legislature recently amended Section 252 to allow for an Act 111 arbitration board to deviate from an Act 47 plan under certain circumstances and to provide for a direct appeal to this Court of an award doing so. 53 P.S. § 11701.252(b), (b.1), (e). Prior to the amendment, Section 252 provided that "a collective bargaining agreement or arbitration settlement executed after the adoption of a plan shall not in any manner violate, expand or diminish its provisions." Former 53 P.S. § 11701.252 (emphasis added). In City of Scranton, our Supreme Court applied this section where a board of arbitrators issued an Act 111 interest arbitration award, which set compensation rates that exceeded the limits in the municipality's Act 47 plan. The municipality argued that the arbitrators lacked the authority to do so because the award could not "violate, expand or diminish" the provisions of its Act 47 plan. City of Scranton, 29 A.3d at 777. After reviewing the statutory language, the Court found that it was unclear whether an Act 111 interest "arbitration award" was an "arbitration settlement" that could not "violate, expand or diminish [an Act 47 plan's] provisions, " former 53 P.S. § 11701.252(a). Id. at 789. Because the "policies underlying Act 111 interest arbitration [were] too strong and engrained in Commonwealth public-sector labor law to be displaced by extrapolation or on account of an ambiguous reference, " the Court stated that if the Legislature wanted to displace these policies, it should do so "in explicit terms." Id. Accordingly, the Court held that an interest arbitration board could render an award pursuant to Act 111 that exceeded the compensation limits of an Act 47 plan.

         The Legislature subsequently amended Section 252, [6] explicitly expressing its intent to allow an Act 111 arbitration board to deviate from an Act 47 plan, but only if the criteria set forth in that section are met. 53 P.S. § 11701.252(b), (b.1). Where there is a deviation from the Act 47 Plan, the Legislature also created a direct appeal to this Court, an exception to the normal appeal process of Act 111 awards. 53 P.S. § 11701.252(e). In its entirety, Section 252 now provides:

(a) General rule.--Except as provided in subsection (b), a collective bargaining agreement or arbitration settlement[7] executed after the adoption of a plan shall not in any manner violate, expand or diminish its provisions.
(b)Arbitration settlements for policemen and firemen.--An arbitration settlement rendered under [Act 111], may deviate from the plan, but only if the arbitration settlement:
(1) except as set forth in subsection (b.1), will not cause the distressed municipality to exceed any limits on expenditures for individual collective bargaining units imposed under the plan;
(2) will not further jeopardize the financial stability of the distressed municipality, as measured by the criteria set forth in section 201; and
(3) is not inconsistent with the policy objectives set forth in section 102(a) to relieve the financial distress of the distressed municipality.
(b.1) Exception.--Subsection (b)(1) shall not apply to a limit on expenditures for an individual bargaining unit that is determined to be arbitrary, capricious or established in bad faith.
(c) Hearing before board of arbitration and expert testimony.--The issue of whether an arbitration settlement deviating from the plan satisfies the criteria under subsection (b) and any exception under subsection (b.1) must be determined by a board of arbitration appointed under [Act 111] and reflected in findings of fact that are supported by substantial evidence and consistent with this section. During the hearing, the testimony of experts in municipal finance, called by the distressed municipality or the collective bargaining organization, is admissible as evidence before the board. An arbitration settlement deviating from the plan must be supported by the credible testimony of an expert in municipal finance that the arbitration settlement satisfies the criteria in subsection (b) and any exception under subsection (b.1). For purposes of this subsection, the term "expert in municipal finance" means an individual holding an advanced degree who has at least eight years of experience in issues relating to municipal finance.
(d) Review by coordinator.--An arbitration settlement deviating from the plan under subsection (b) must be provided to the coordinator by the chairman of ...

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