Odgers v. Com., Unemployment Compensation Bd. of Review

• Decision Date: 31 March 1987
• Citation: 525 A.2d 359,514 Pa. 378
• Court: Pennsylvania Supreme Court
• Parties: , 39 Ed. Law Rep. 177 Ernest ODGERS, et al, Arnold Nayowith, et al, Appellees, v. COMMONWEALTH of Pennsylvania, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellant. 54 E.D. 1986

Page 359

525 A.2d 359

514 Pa. 378, 39 Ed. Law Rep. 177

Ernest ODGERS, et al, Arnold Nayowith, et al, Appellees, v. COMMONWEALTH of Pennsylvania, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Appellant.

54 E.D. 1986

Supreme Court of Pennsylvania.

Argued Oct. 21, 1986.

Decided March 31, 1987.

Charles Hasson, Deputy Chief Counsel, James K. Bradley, Associate Counsel, Paul E. Baker, Acting Deputy Chief Counsel, Barry M. Hartman, for appellant.

Deborah R. Willig, Alaine S. Williams, for appellees.

Marvin Comisky, David F. Girard-diCarlo, Ronald H. Surkin, Sarah A. Kelly, for amicus--School Dist. of Philadelphia.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ.

OPINION OF THE COURT

HUTCHINSON, Justice.

Appellant, Commonwealth of Pennsylvania, Unemployment Compensation Board of Review (Board), appeals by allowance a Commonwealth Court order reversing orders entered by the Board. The Board had affirmed decisions of a Referee and the Office of Employment Security denying unemployment compensation benefits to appellees, teachers employed by the School District of Philadelphia (School District). ¹ The ultimate question presented by this appeal is whether the work stoppage in which appellees engaged from September 8, 1981, through October 27, 1981, was the result of a strike or a lock-out under the terms of Section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897, as amended, 43 P.S. § 802(d). We hold that it was a lock-out by the School District and thus affirm the order of Commonwealth Court.

I.

The Philadelphia Federation of Teachers (PFT) is the duly certified collective bargaining representative for approximately 22,000 School District employees, a majority of whom are teachers. The School District is managed by a Board of Education (School Board) appointed by the Mayor of Philadelphia. See the First Class City Public Education Home Rule Act, Act of August 9, 1963, P.L. 643, as amended, 53 P.S. §§ 13201-13223 (Supp.1986); 351 Pa.Code §§ 12.12-200 and 12.12-201.

In September, 1980, the School Board and the PFT executed a collective bargaining agreement (Agreement) for the period September 1, 1980, through August 31, 1982. ² Among the terms bargained for and agreed to were specific provisions for maximum class size and preparation time, a guarantee of adequate monies to fund the Agreement, ³ and a general provision that the School Board would solicit the PFT's views on long-range educational goals prior to School Board action. The Agreement also provided for "full and complete job security" for all employees. ⁴ All of the foregoing provisions applied to the complete term of the two-year agreement. In only one major respect did the two years of this agreement differ: there was no salary increase provided for the 1980-81 school year, but a ten percent increase in salary was provided for the 1981-82 school year. ⁵

In May, 1981, eight months after execution of the Agreement, the School Board informed the PFT that its proposed budget request had been rejected by City Council and it anticipated a budget deficit of approximately $102,000,000 during the 1981-82 school year if the express terms of the Agreement were honored. ⁶ The PFT refused the School Board's request to renegotiate the Agreement, but offered to assist its efforts to obtain sufficient city funding for the Agreement.

The School Board then adopted a shortfall budget for the 1981-82 school year, and announced several changes in its operations, effective September 1, 1982. These included layoff of approximately 3,500 members of the PFT and elimination of the ten percent wage increase. ⁷ In June, 1981, the School Board mailed 3,498 layoff notices to School District employees, informing them that there were no positions available for them during the 1981-82 school year.

These layoff notices became effective on September 1, 1981, and the 3,498 employees were laid off by the School Board. The other operational changes were also effected, including the increase in class size and the reduction in preparation time. On September 8, 1981, the first day of scheduled classes for the 1981-82 school year, members of the PFT began a work stoppage.

II.

In May, 1981, the PFT had filed suit in the Philadelphia Court of Common Pleas to enforce the existing collective bargaining agreement through August 31, 1982. On September 4, 1981, Common Pleas dismissed this complaint, holding the Agreement was subject to a condition precedent of sufficient city appropriation each year to fund it. The court held, however, that the terms of the Agreement would be in effect for the 1981-82 school year to the extent that they were funded by the City. Philadelphia Federation of Teachers v. Board of Education, 6 Phila. 222 (C.P.Pa.1981). ⁸

In mid-September, the School Board filed its complaint in equity in the Philadelphia Court of Common Pleas, asking that court to enjoin the work stoppage and order the teachers back to work. On October 7, 1981, Common Pleas did order the teachers back to work, now holding that the lack of funding effectively terminated the Agreement. Board of Education v. Philadelphia Federation of Teachers, (No. 1851 September Term 1981, filed October 7, 1981).

The PFT appealed both decisions to Commonwealth Court. The cases were consolidated and decided in Philadelphia Federation of Teachers v. Thomas, 62 Pa.Commonwealth Ct. 286, 436 A.2d 1228 (1981). Commonwealth Court held that the Agreement was a severable contract with each year subject to a condition precedent, funding by "the independent legislative bodies over which neither party had any actual control." Thomas, 62 Pa.Commonwealth Ct. at 296, 436 A.2d at 1233. That posited condition had been fulfilled with respect to the 1980-81 school year, but not for 1981-82. Thus, Commonwealth Court concluded, the PFT and the School Board had no binding agreement for 1981-82. Id. Neither the PFT nor the School Board appealed this decision.

During the work stoppage, appellees herein (claimants) submitted claims for unemployment compensation benefits for the weeks ending September 19 and September 26, 1981. On October 8, 1981, the Office of Employment Security issued its determination denying their claims. Claimants appealed this decision to a Referee, who affirmed the denial in July, 1982. Claimants then appealed to the Unemployment Compensation Board of Review (Board). In April, 1983, it affirmed the Referee's decision, finding that the work stoppage was a strike rather than a lock-out. Claimants appealed this decision to Commonwealth Court, which reversed the Board, holding that the work stoppage was a lock-out. Odgers v. Unemployment Compensation Board of Review, 89 Pa.Commonwealth Ct. 439, 492 A.2d 808 (1985) (en banc ). We granted the Board leave to appeal the order of Commonwealth Court in April, 1986.

III.

We are called upon to determine whether the work stoppage in which appellees engaged from September 8, 1981, through October 27, 1981, was a strike or a lock-out under the terms of Section 402(d) of the Pennsylvania Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897, as amended, 43 P.S. § 802(d). Section 402(d) of the Act provides, in pertinent part:

An employe shall be ineligible for compensation for any week--

(d) In which his unemployment is due to a stoppage of work, which exists because of a labor dispute (other than a lock-out) at the factory, establishment or other premises at which he is or was last employed....

43 P.S. § 802(d).

Before reaching that issue, however, we must first determine whether to give preclusive effect here to Commonwealth Court's classification of this work stoppage as a strike in its decision ordering appellees and other members of the PFT back to work in the suit to enjoin the stoppage. See Philadelphia Federation of Teachers v. Thomas, 62 Pa.Commonwealth Ct. 286, 436 A.2d 1228 (1981). Appellant contends that Commonwealth Court's order directing mediation and a return to work "clearly points to" a binding determination that the work stoppage was an illegal strike. ⁹

Two issues were determined in Thomas: the status (enforceability) of the Agreement between the PFT and the School Board and the legality of the work stoppage by members of the PFT. To resolve the latter issue, Commonwealth Court had to determine whether the failure to fully fund the second year terminated the Agreement and properly opened the matter to collective bargaining negotiations. ¹⁰ If so, it also had to find an impasse existed between the School Board and the PFT under the terms of the Public Employe Relations Act (PERA), Act of July 23, 1970, P.L. 563, No. 195, as amended, 43 P.S. §§ 1101.101-1101.2301 (Supp.1986). Section 1002 of PERA prohibits strikes "during the pendency of collective bargaining procedures." It states:

Strikes by public employes during the pendency of collective bargaining procedures set forth in sections 801 and 802 of Article VIII are prohibited. In the event of a strike during this period the public employer shall forthwith initiate an action for the same relief and utilizing the same procedures required for prohibited strikes under section 1001.

43 P.S. § 1101.1002. ¹¹ Because it determined that the Agreement constituted a severable contract, the second year of which was not binding upon the parties due to the unavailability of sufficient funding, Commonwealth Court held that, as of the date of its order, the School Board and the PFT were at impasse and the strike by the PFT was prohibited under Section 1002 of PERA. Thomas, 62 Pa.Commonwealth Ct. at 298-99, 436 A.2d at 1234.

The members of the PFT, including appellees, returned to work on October 28, 1981, the day after Commonwealth Court issued its opinion in Thomas. Because Commonwealth Court expressly held the strike illegal (i.e., in contravention of the terms of PERA) only from the date of its...