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HomeMy WebLinkAbout2008-0368 Civil SHIPPENSBURG POLICE : IN THE COURT OF COMMON PLEAS OF ASSOCIATION, : CUMBERLAND COUNTY, PENNSYLVANIA APPELLEE : : V. : : BOROUGH OF SHIPPENSBURG, : APPELLANT : 08-0368 CIVIL TERM IN RE: PETITION TO VACATE AN ARBITRATION AWARD OPINION AND ORDER OF COURT Bayley, J., April 16, 2008:-- The Borough of Shippensburg and the Shippensburg Police Association are parties to a Collective Bargaining Agreement entered into in accordance with Act 111 of 1 1968. Pursuant to Article X of the Agreement, each bargaining unit member with more than twenty years of service is allotted the equivalent of twenty-five days pay each year for vacation. A member may accumulate up to one year’s vacation pay allotment for a maximum entitlement of fifty days pay at any given time. Article XIV incorporates the Police Pension Plan into the Collective Bargaining Agreement, and requires that “the pension plan shall provide for a computation base for calculating pensions based upon the prior three (3) years of service.” The Police Pension Plan referred to in the Collective Bargaining Agreement defines salary for pension calculation purposes as “the average of your pay for the latest 36 months of employment.” “Average pay” is further defined as: __________ 1 43 P.S. §§ 217.1-217.10. 08-0368 CIVIL TERM [T]otal earnings, except as modified in this definition, paid to an Employee by the Employer during any specified period. Earnings, as used in this definition includes salary, court pay, holiday pay, overtime pay and other remuneration. On December 7, 2006, Shippensburg Borough Police Officer David Lively, a bargaining unit member, declared in writing his intention to retire after his last scheduled workday on Sunday, January 14, 2007. He made a request for payment of his unused vacation leave, and that a 5% retirement contribution be deducted from the payment. On Wednesday, January 17, 2007, he was paid $9,163.68 for unused vacation time in a check that was separate from his last regular payroll check. No pension contribution was deducted from the payment. The payment was not included by the Borough in calculating Lively’s monthly pension benefit. Officer Lively initiated a Step 2 grievance. Thereafter, he initiated a Step 3 grievance which sought a recalculation of his monthly pension benefit to include the lump sum payment for his unused vacation time. The grievance was heard by an arbitrator on May 17, 2007. On December 16, 2007, the arbitrator sustained the grievance. The Borough of Shippensburg filed this appeal which was briefed and argued on April 4, 2008. The Borough of Shippensburg maintains that: (1) the arbitrator lacked jurisdiction to hear the grievance, (2) the arbitrator exceeded his powers by mandating an illegal act in alternating the definition of salary, and (3) the arbitrator exceeded his powers by mandating an illegal act by requiring a substantial modification -2- 08-0368 CIVIL TERM to the pension plan. As to the first issue, the Borough of Shippensburg maintains that the arbitrator lacked jurisdiction to hear the grievance because a valid and final judgment involving the parties that was entered in the Commonwealth Court of Pennsylvania is conclusive. The Collective Bargaining Agreement provides in Article A, III “this agreement is also subject to further enactments of the Commonwealth of Pennsylvania or judicial decisions which may specifically affect the provisions of this Agreement. . . .” The Pension Plan in Section 10.09 titled “Legal Actions,” which incorporated into the Collective Bargaining Agreement, provides: No person employed by the Employer; no Participant, former Participant nor their Beneficiaries; nor any other person having or claiming to have an interest in the Plan is entitled to any notice of A final judgment entered in any such action or proceeding process. shall be binding and conclusive on all persons having or claiming to have an interest in the plan. (Emphasis added.) Gerald Worthington and Terry Lee The Borough of Shippensburg relies on Kennedy, Sr. v. Borough of Shippensburg, 785 A.2d 180 (Pa. Commw. 2001). The facts set forth by the Commonwealth Court of Pennsylvania were as follows. Terry Kennedy and Gerald Worthington filed an action for a declaratory judgment in the Court 2 of Common Pleas of Cumberland County. Kennedy and Worthington had each served __________ 2 The caption was Gerald Worthington and Terry Lee Kennedy, Sr. v. Dennis W. McMaster, Mid- Cumberland Valley Regional Police Pension Plan, Mid-Cumberland Valley Police, and Mid- Cumberland Valley Regional Police Commission. Officer Lively was a member of the Mid- Cumberland Valley Regional Police Department at the time the Borough of Shippensburg assumed all liabilities of the Mid-Cumberland Valley Regional Police Department, including the -3- 08-0368 CIVIL TERM as police officers for more than twenty-five years as employees of the Borough of Shippensburg. In 1998, they each retired, Kennedy effective on April 1 and Worthington effective on November 1. As of the date of retirement, they each became entitled to pension benefits pursuant to the pension plan in effect. The Borough determined each retiree’s Average Compensation without including therein the lump sum payment for unused vacation and sick days that Kennedy received on April 8, 1998, and Worthington received on November 4, 1998. The Borough did not withhold the 5% employee pension contribution from these lump sum payments. Kennedy and Worthington filed a complaint for a declaratory judgment seeking a determination that, under the terms of Plan, the lump sum post-retirement payments must be included in their Average Compensation for the purpose of calculating the amount of their monthly pension benefit. This court, Spicer, J., sitting specially, granted the relief sought. The Kosey v. City of Commonwealth Court of Pennsylvania reversed. Relying on Washington Police Pension Board , 73 Pa. Commw. 564 (1983), the Court held that: “The unused vacation and sick time paid for after retirement simply falls outside of the relevant thirty-six month period.” While vacation or sick time that was used and paid for before the date of retirement was properly included in Average Compensation, “Retirees did not become entitled to the lump sum payments at issue in the present Pension Plan and the Collective Bargaining Agreement. The Borough, therefore, became a sub judice defendant in the litigation. In the case , Officer Lively and the Borough of Shippensburg have stipulated that the Pension Plan is the same Pension Plan that was in place Worthington. at the time the Commonwealth Court made its decision in -4- 08-0368 CIVIL TERM case until after retirement, and thus these payments necessarily fell outside the time period specified for calculating Average Compensation. Common pleas erred in 3 concluding otherwise.” Office of Disciplinary Counsel v. Kiesewetter, In 889 A.2d 47 (Pa. 2005), the Supreme Court of Pennsylvania stated: The doctrine of collateral estoppel precludes relitigation of an issue determined in a previous action if: (1) the issue decided in the prior case is identical to the one presented in the later action; (2) there was a final adjudication on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party in the prior case; (4) the party or person privy to the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding; and (5) the determination in the prior proceeding was essential to the judgment. Duffield, 644 A.2d at 1189. Collateral estoppel relieves parties of the cost and vexation of multiple lawsuits, conserves judicial resources, and, by preventing inconsistent decisions, encourages reliance on adjudication. Shaffer v. Smith, 543 Pa. 526, 673 A.2d 872, 875 (1996), citing Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980). Worthington Officer Lively argues in his brief that the decision in does not invoke the doctrine of collateral estoppel as the first requirement is not met because: Here, as found by the arbitrator, the issue is fundamentally different. As clearly delineated by the Arbitrator and unlike the situation prevailing in Worthington, payment for accumulated but unused leave here was made with the grievance’s final pay, and therefore within the 36 month averaging period. We have read and re-read the “Discussion” section of the arbitrator’s opinion and nowhere does he make such a finding. Nor did he make a finding that the __________ 3 The Commonwealth Court issued a memorandum opinion. It may be cited here because it is relevant under the doctrine of the law of the case and collateral estoppel. Section 67.55 of the Internal Operating Procedures of the Commonwealth Court. -5- 08-0368 CIVIL TERM $9,163.68 -6- 08-0368 CIVIL TERM 4 for unused vacation time was paid before Officer Lively retired. The best that can be said is that despite the uncontroverted evidence the $9,163.68 was paid on January 17, 2007, by a check that was separate from Lively’s last regular payroll check, and that no pension contribution was deducted from the payment, and that Officer Lively retired as of his last scheduled workday on January 14, 2007, the arbitrator, by implication, concluded that the $9,163.68 was paid within the time limit for calculating Average Compensation for purpose of determining a pension payment. It appears that the arbitrator accepted the position of the police association which was set forth in his opinion as: “in dealing with the issue [collateral estoppel] on its merits, the prior Court decision does not apply since the payment for unused leave was not made in conjunction with final pay. Here, by specific request, it was.” However, as in Worthington, where a payment was made to Kennedy seven days after he retired, and to Worthington three days after he retired, the payment for unused vacation time was made to Officer Lively three days after he retired. Thus, the issue in this case was Worthington identical to the issue decided in because unused vacation paid for after retirement falls outside the time limited for calculating Average Compensation for 5 purposes of determining the police officer’s pension payments. Worthington The issue in this case is identical to the issue decided in . All five __________ 4 All the arbitrator said was that he “understands a clear difference between payments for unused leave before retirement as opposed to the Court decision concerning payment for unused leave after retirement.” 5 The parties stipulated that, “Over the last twenty-five years the lump sum payment for vacation -7- 08-0368 CIVIL TERM requirements of the doctrine of collateral estoppel have been met. The question still remains whether that removed jurisdiction from the arbitrator to hear the grievance. Pennsylvania State Police v. Pennsylvania State Troopers’ Association In , 656 A.2d 83 (Pa. 1995), the Supreme Court of Pennsylvania stated that a “grievance arbitration” is the arbitration which occurs when the parties disagree as to the interpretation of an existing collective bargaining agreement. “Interest arbitration” is the arbitration which occurs when the employer and employee are unable to agree to the terms of a collective bargaining agreement. The Court held that the scope of review applicable to an Act 111 grievance arbitration is the same as to an Act 111 interest arbitration. This plenary narrow certiorari scope of review limits a reviewing court to questions regarding: (1) the jurisdiction of the arbitrator; (2) the regularity of the proceedings; (3) an excess of the arbitrator’s powers; and (4) the deprivation of constitutional rights. However, if the issue is whether the arbitrator had jurisdiction, a Town of McCandless v. McCandless Police “dual standard” should be applied. Officers Association, Borough of 901 A.2d 991 (Pa. 2006). As set forth in Jenkintown v. Hall, 930 A.2d 618 (Pa. Commw. 2007): Under this “dual standard,” a court’s review of a pure question of law is plenary. On the other hand, where resolution of the issue of jurisdiction requires fact-finding or contract interpretation, the court’s review of the 6 arbitrator’s decision should be one of extreme deference. time has never been part of the pension payment calculation.” 6 Pennsylvania State Police, In the Supreme Court stated that “The essence test permits a court to vacate an arbitrator’s award if the court finds that arbitrator’s award did not draw its essence from the collective bargaining agreement; in other words, the essence test allows a court to question whether the arbitrator’s award represents a reasonable interpretation of the -8- 08-0368 CIVIL TERM * * * Thus, McCandless teaches that although there is “no reason in law or logic” to defer to the arbitrator on the question of jurisdiction, there is a “noted caveat” to this principle. This caveat provides that if resolving the question of jurisdiction “depended to some extent upon arbitral fact- finding or a construction of the relevant CBA,” then the Court’s review is not plenary. Id. (emphasis added). sub judice, In the case Article V of the Collective Bargaining Agreement provides that all grievances are subject to binding arbitration and: The term “grievance” means a difference between an individual Police Officer of the Shippensburg Police Association and the Borough with respect to the interpretation, application, claims of breach or violation of any provisions of the Agreement, or as the term “grievance” may be otherwise intended by Act 111 of June 24, 1968. Grievances are limited to matters involving interpretation of the agreement. Worthington While the final judgment in was conclusive on all persons having an interest in the Police Pension Plan, which includes Officer Lively, that did not remove jurisdiction from the arbitrator to determine whether the decision is applicable to the facts in this case. The question of jurisdiction did not require fact-finding. Our review is plenary. While the arbitrator decided the case incorrectly the merits of his decision is not subject to review in his appeal. The Borough of Shippensburg maintains that the arbitrator mandated an illegal act by including post-retirement lump sum payment for unused vacation time made to Officer Lively within the scope of salary, even though there was no past practice of such inclusion or any agreement to include such a payment in the pension calculation, collective bargaining agreement.” -9- 08-0368 CIVIL TERM which mandate is in contravention of the requirements of Act 600. Additionally, the Borough maintains that the arbitrator mandated an illegal act by requiring a modification of the pension plan without receiving a cost estimate of the effect of the proposed pension plan which guarantees the actuarial soundness of the plan, which 7 mandate is in contravention of Act 205. Neither of these positions have merit because the arbitrator’s decision, although wrongly decided, can only be interpreted as allowing the $9,163.68 to be utilized in a calculation for pension purposes because it was accumulated in Officer Lively’s last thirty-six months of employment paid to him during that period. That is not an illegal act. For the foregoing reasons, the following order is entered. ORDER OF COURT AND NOW, this day of April, 2008, the petition of the Borough of IS DENIED. Shippensburg to vacate an arbitration award, By the Court, Edgar B. Bayley, J. Anthony M. Caputo, Esquire Sean T. Welby, Esquire For Shippensburg Police Association G. Bryan Salzmann, Esquire Samuel E. Wiser, Jr., Esquire __________ 7 et seq. 53 P.S. §§ 895.101 -10- 08-0368 CIVIL TERM For the Borough of Shippensburg :sal -11- SHIPPENSBURG POLICE : IN THE COURT OF COMMON PLEAS OF ASSOCIATION, : CUMBERLAND COUNTY, PENNSYLVANIA APPELLEE : : V. : : BOROUGH OF SHIPPENSBURG, : APPELLANT : 08-0368 CIVIL TERM IN RE: PETITION TO VACATE AN ARBITRATION AWARD ORDER OF COURT AND NOW, this day of April, 2008, the petition of the Borough of IS DENIED. Shippensburg to vacate an arbitration award, By the Court, Edgar B. Bayley, J. Anthony M. Caputo, Esquire Sean T. Welby, Esquire For Shippensburg Police Association G. Bryan Salzmann, Esquire Samuel E. Wiser, Jr., Esquire For the Borough of Shippensburg :sal