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City of Arnold v. Wage Policy Committee of the City of Arnold Police Department

Supreme Court of Pennsylvania

October 18, 2017

CITY OF ARNOLD, PENNSYLVANIA, Appellee
v.
WAGE POLICY COMMITTEE OF THE CITY OF ARNOLD POLICE DEPARTMENT, O/B/O PAMELA CIMINO, Appellants

          ARGUED: April 5, 2017

         Appeal from the Order of the Commonwealth Court entered May 20, 2016 at No. 1519 CD 2015, reversing the Order of the Court of Common Pleas of Westmoreland County entered July 22, 2015 at No. 1305 of 2015.

          SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

          OPINION

          MUNDY, JUSTICE

         In this appeal by allowance, we consider, in the context of a grievance arbitration award, whether an arbitrator has subject matter jurisdiction to adjudicate a dispute between a union and a municipality arising out of a surviving spouse's pension benefit, where the benefit was afforded to the surviving spouse statutorily and incorporated into the parties' collective bargaining agreement (CBA). For the reasons set forth below, we conclude such a dispute is arbitrable under the Policemen and Firemen Collective Bargaining Act ("Act 111"), 43 P.S. §§ 217.1-217.10, because the surviving spouse's pension benefit was incorporated into the CBA. Accordingly, we reverse the order of the Commonwealth Court.

         The facts of this case are not disputed. Pamela Cimino's husband, Thomas J. Cimino, was a police officer for the City of Arnold, Pennsylvania (City) from July 1, 1990 until April 4, 2002. On April 4, 2002, Officer Cimino died off-duty of natural causes. At the time of his death, Officer Cimino had completed 11.77 years of service and his average monthly compensation for 2002 was $3, 898.21.[1]

         On May 7, 2002, the City Controller notified Mrs. Cimino in writing that she was entitled to a monthly death/survivor pension benefit of $1, 949.11, which represented 50% of Officer Cimino's 2002 average monthly pay rate.[2] The City Controller confirmed this pension payment in a letter dated July 14, 2003. Pursuant to this calculation, the City issued Mrs. Cimino 142 consecutive monthly death benefit payments, from May 1, 2002 to February 1, 2014. However, in a 2014 compliance audit, the Commonwealth Auditor General's Office (Auditor General) determined that the City was incorrectly administering the death benefit. According to the Auditor General's compliance audit, the City had been paying Mrs. Cimino twice as much as it should have under its interpretation of Section 6.01(b) of the 1997 Ordinance. Based on the Auditor General's report, on February 17, 2014, the City notified Mrs. Cimino in writing that it had been incorrectly administering the surviving spouse death benefit to her. The City stated it had reinterpreted its police pension plan ordinance such that effective March 1, 2014, Mrs. Cimino would receive 50% of 50% of Officer Cimino's benefit, or $974.56 per month. Additionally, the City determined that it had overpaid Mrs. Cimino $138, 386.10 in the past 142 payments, and beginning June 1, 2014, the Police Pension Board would recover the overpayment by deducting $10.00 from Mrs. Cimino's further monthly pension payments.

         On March 5, 2014, the Wage Policy Committee of the City of Arnold Police Department (Union)[3] initiated a grievance on behalf of Mrs. Cimino to dispute the 50% reduction in her death benefit pension payments. The Union followed the grievance procedure contained in the CBA between the City and the Union. See CBA, 1/1/09 (2009 CBA), at 23, Art. XVIII (providing "[s]hould any dispute arise between the Municipality and the Policeman, the following grievance procedure shall be followed"); 1999 CBA, at 19, Art. XVIII (containing identical language). The Union submitted the grievance to the Chief of Police, who denied it. See 2009 CBA, at 23, Art. XVII § 1. On March 11, 2014, as the first step in the CBA's grievance process, the Union submitted the grievance to the Mayor, who denied it on March 19, 2014. See id. at § 2-3. On March 21, 2014, the Union proceeded to step two by submitting the grievance to City Council, which denied it on March 31, 2014. See id. at § 4-5. The third step of the grievance process, a meeting between the parties and their representatives, did not resolve the dispute, and the Union chose to pursue grievance arbitration, as was its right under the CBA. See id. at § 6-7.

         On February 13, 2015, the grievance arbitrator, Gregory Gleason, issued an opinion and award sustaining the Union's grievance and restoring Mrs. Cimino's death benefit to $1, 949.11 per month. Relevant to this appeal, Arbitrator Gleason determined the dispute between Mrs. Cimino and the City over the amount of her monthly death benefit was arbitrable. Arbitrator Gleason reasoned that Article XVII of the CBA broadly subjects to arbitration "any dispute" between the parties. He explained that Article XVII of the 2009 CBA states "[a]ll pension benefits not in conflict with any sections of this Article and adopted by ordinance and in existence at the time of the signing of this Agreement are incorporated herein by reference into this agreement including but not limited to . . . Ordinance No. 3 of 1987 . . . ." 2009 CBA, at 22-23, Art. XVII § 5. Therefore, because the parties agreed to submit any dispute to arbitration and expressly incorporated into the CBA all pension plans and benefits, including the survivor pension benefits provided by Ordinance No. 3 of 1987, Arbitrator Gleason concluded the dispute was arbitrable.

         Arbitrator Gleason provided the following reasoning for sustaining the grievance and restoring Mrs. Cimino's survivor pension benefit.

I conclude that the City's conduct [in] 2002 and 2003 was intended to provide the 50% benefit to [Mrs.] Cimino and the City at that time interpreted Ordinance 6 to provide that benefit. There was neither an error nor a mistake in 2002 nor 2003 nor in any subsequent inclusion of this interpretation in successive Act 2005[, 53 P.S. §§ 895.101-895.803, ] AVRs [("actuarial valuation reports")]. Regardless of the City's later reinterpretation, its conduct in 2002 and 2003and in submitting AVRs with the 50% benefit included (which distinguishes this case from Shippensburg [Police Ass'n v. Borough of Shippensburg, 968 A.2d 246 (Pa. Cmwlth. 2009)]), created a term or condition of employment covered by the CBA and the City cannot now unilaterally alter that term or condition of employment. The grievance is sustained.

         Opinion and Award of Arbitrator Gregory Gleason, 2/13/15, at 23.

         Following the arbitration award, the City filed in the Westmoreland County Court of Common Pleas a petition to vacate the arbitration award. The trial court, in an opinion by President Judge Richard E. McCormick, Jr., considered, among other things, the City's argument that the arbitrator did not have subject matter jurisdiction to issue an award regarding Mrs. Cimino's death benefit. The trial court concluded that the arbitrator had jurisdiction to resolve the dispute. The court reasoned that Act 111 gives arbitrators the authority to resolve grievances between police personnel and their employers. Trial Ct. Op., 7/22/15, at 4 (citing Pa. State Police v. Pa. State Troopers Ass'n (Betancourt), 656 A.2d 83 (Pa. 1995)). The trial court found there was a dispute concerning the interpretation of the CBA and the pension plan provisions based on the issues raised by the Union during arbitration. Therefore, the court held that the arbitrator had jurisdiction to interpret the CBA and pension plan provisions to resolve the dispute between the Union, representing Mrs. Cimino, and the City.

         The City appealed the trial court's order denying its motion to vacate the arbitration award to the Commonwealth Court, and a unanimous, three-judge panel of the Commonwealth Court reversed. The Commonwealth Court concluded that the arbitrator did not have subject matter jurisdiction to resolve the grievance between Mrs. Cimino, as the widow of a police officer, and the City. City of Arnold v. Wage Policy Comm. of City of Arnold Police Dep't, 138 A.3d 719, 726 (Pa. Cmwlth. 2016). The court reasoned that Mrs. Cimino's "right to a death/survivor benefit is not derivative of Decedent's rights under the CBA, but an independent right under the City's pension plan as implemented under the Third Class City Code and its Ordinances." Id. at 725 (citing In re Appeal of Stanton, 452 A.2d 496, 497-98 (Pa. 1982); City of Altoona Paid Firemen's Pension Fund Ass'n v. Dale-Dambeck, 83 A.3d 279, 282 (Pa. Cmwlth. 2014) (en banc)). The Commonwealth Court explained that the dispute between Mrs. Cimino and the City was not covered under the CBA because Mrs. Cimino, unlike her husband, was not an employee of the City. Id. Moreover, the court reasoned the grievance contested the Pension Board's decision, which was subject to Local Agency Law, and not covered by Act 111 or the CBA. Id. (citing Groman v. Officers' & Employees' Pension Bd. of City of Bethlehem, 451 A.2d 789, 790-91 (Pa. Cmwlth. 1982)). Therefore, the Commonwealth Court held the arbitrator did not have subject matter jurisdiction over the dispute.[4]

         We granted allocatur on the following issue, which we rephrased for clarity.

Is a dispute between a union and a municipality arising out of a surviving spouse's pension benefit arbitrable under [Act 111], where the benefit was afforded to the surviving spouse of a police officer or firefighter statutorily, and incorporated into the parties['] collective bargaining agreement?

City of Arnold v. Wage Policy Comm. of the City of Arnold Police Dep't, 2016 WL 6269529, at *1 (Pa. 2016). As this question arises in the context of review of an Act 111 grievance arbitration award, [5] our scope of review is that of narrow certiorari. Specifically, our review of a grievance arbitration award is limited to four areas: (1) the arbitrator's jurisdiction; (2) the regularity of the proceedings; (3) an excess of the arbitrator's power; and (4) the deprivation of a constitutional right. Betancourt, 656 A.2d at 89-90. The only question presented here is whether the arbitrator had subject matter jurisdiction to resolve the dispute over the interpretation and application of Mrs. Cimino's survivor benefit. See Int'l Ass'n of Firefighters, Local 22, 999 A.2d at 564 (Pa. 2010).

         To decide whether an arbitrator has jurisdiction, a court must determine whether the law empowers an arbitrator to adjudicate the general class of controversies, to which the subject of the dispute belongs. See id. Pennsylvania's Constitution and statutory provisions provide the sources of an arbitrator's jurisdiction. See id. (citation omitted). Article 3, Section 31 of the Pennsylvania Constitution grants the General Assembly the authority to "enact laws which provide that the findings of panels or commissions, selected and acting in accordance with law for the adjustment or settlement of grievances or disputes or for collective bargaining between policemen and firemen and their public employers shall be binding on all parties . . . ." Pa. Const. art. III, § 31.

         The General Assembly, pursuant to this constitutional authorization, enacted Act 111. Section 1 of Act 111 states "[p]olicemen 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. Further, Section 4 of Act 111 provides, in part, that disputes may be resolved by arbitration "[i]f in any case of a dispute between a public employer and its policemen or firemen employes the collective bargaining process reaches an impasse and stalemate . . . ." 43 P.S. § 217.4(a). In International Association of Firefighters, this Court analyzed the history and development of Act 111 and concluded "it is apparent that the General Assembly intended that the scope of collective bargaining set forth in Section 1 [of Act 111] be viewed broadly, to encompass any subject that is rationally related to the 'terms and conditions of employment, ' including employee 'compensation, hours, working conditions, pensions, retirement and other benefits.'" Int'l Ass'n of Firefighters, 999 A.2d at 569 (citing 43 P.S. § 217.1; Borough of Ellwood City v. PLRB, 998 A.2d 589 (Pa. 2010)).[6] Accordingly, an arbitrator has jurisdiction to adjudicate the class of disputes arising out of a CBA between a public employer and its firefighters or police employees, rationally related to the terms and conditions of their employment. See Int'l Ass'n of Firefighters, 999 A.2d at 564. An argument, such as the City raised in this case, that an arbitrator mediated a dispute that is not of this general type presents a question of jurisdiction. See id. As explained above, the Commonwealth Court concluded the arbitrator did not have jurisdiction because the Act 111 grievance arbitration process was invoked by a third-party, Mrs. Cimino, who was not an employee of the City. City of Arnold, 138 A.3d at 725.

         Recognizing the scope of an arbitrator's jurisdiction over grievance arbitration under Act 111, we now set forth the relevant provisions of the City's pension plan and the CBA that apply to this dispute. Preliminarily, we note that Section 4303(f) of the Third Class City Code, 11 Pa.C.S. §§ 10101-14702, authorizes the payment of a pension benefit to a police officer who dies or becomes totally disabled while not in the line of duty. 11 Pa.C.S. § 14303(f) (effective January 25, 2016, previously codified at 53 P.S. § 39303(f)). The amount of the pension benefit "[f]or death or injuries received after 10 years of service, [] may be 50% of the police officer's annual compensation." Id. Pursuant to the Third Class City Code, the City implemented the following pension death benefit in Section 5 of Ordinance No. 3 of 1987, as follows:

If a Member who has completed more than ten (10) Years of Continuous Service with the Employer dies, whether or not in the line of duty, and regardless of the number of Years of Continuous Service with the Employer, his spouse or if no spouse survives or if a spouse survives and subsequently dies or remarries then his child or children under the age of eighteen (18), shall be entitled to receive a death benefit in the amount of fifty-percent (50%) of the Member's annual Compensation prior to his death or retirement whichever is applicable.

1987 Ordinance ยง 5. In Ordinance No. 6 of 1997, the City amended the pension death benefit to decrease the amount of the benefit for officers ...


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