Pennsylvania State Lodge v. Com., Dept. of Labor and Industry

• Decision Date: 08 April 1997
• Parties: PENNSYLVANIA STATE LODGE, Fraternal Order of Police, a Pennsylvania nonprofit corporation, Petitioner, v. COMMONWEALTH of Pennsylvania, and Department of Labor and Industry, Respondents.
• Court: Pennsylvania Commonwealth Court

Page 609

692 A.2d 609

PENNSYLVANIA STATE LODGE, Fraternal Order of Police, a Pennsylvania nonprofit corporation, Petitioner, v. COMMONWEALTH of Pennsylvania, and Department of Labor and Industry, Respondents.

Commonwealth Court of Pennsylvania.

Argued Dec. 11, 1996.

Decided April 8, 1997.

James L. McAneny, Harrisburg, for petitioner.

J. Matthew Wolfe, Harrisburg, for respondent.

Before COLINS, President Judge, and DOYLE, PELLEGRINI, FRIEDMAN, KELLEY, FLAHERTY and LEADBETTER, JJ.

KELLEY, Judge.

Presently before this court for disposition are the preliminary objections of the Pennsylvania Department of Labor and Industry (department) to a petition for review in the nature of an action for declaratory judgment filed in our original jurisdiction by the Pennsylvania State Lodge, Fraternal Order of Police (FOP). ¹

On June 19, 1996, the Pennsylvania General Assembly passed Senate Bill No. 801 which substantially amended the Pennsylvania Workers' Compensation Act (Act). ² On June 24, 1996, Governor Ridge signed Senate Bill No. 801 into law as Act 57 of 1996.

On August 9, 1996, the FOP filed the instant petition for review challenging the constitutionality of the amendments to the Act as contained in sections 3 and 22 of Act 57 of 1996. ³ , ⁴ Thus, in the petition the FOP requested this court to declare the amendments contained in sections 3 and 22 of Act 57 of 1996 to be unconstitutional.

Section 204(a) of the Act formerly provided:

(a) No agreement, composition, or release of damages made before the date of any injury shall be valid or shall bar a claim for damages resulting therefrom; and any such agreement is declared to be against the public policy of this Commonwealth. The receipt of benefits from any association, society, or fund shall not bar the recovery of damages by action at law, nor the recovery of compensation under article three hereof; and any release executed in consideration of such benefits shall be void: Provided, however, That if the employe receives unemployment compensation benefits, such amount or amounts so received shall be credited as against the amount of the award made under the provisions of sections 108 and 306, except for benefits payable under section 306(c) or 307.

77 P.S. § 71(a).

In pertinent part, section 3 of Act 57 of 1996 amended section 204(a) of the Act by adding the following provision:

Fifty per centum of the benefits commonly characterized as "old age" benefits under the Social Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.) shall also be credited against the amount of the payments made under sections 108 and 306, except for benefits payable under section 306(c): Provided, however, That the Social Security offset shall not apply if old age Social Security benefits were received prior to the compensable injury. The severance benefits paid by the employer directly liable for the payment of compensation and the benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award made under sections 108 and 306, except for benefits payable under section 306(c). The employe shall provide the insurer with proper authorization to secure the amount which the employe is receiving under the Social Security Act.

Act 57 of 1996, § 3.

In its petition, the FOP alleges that the new offset provisions impact upon the statutory and contractual pension provisions which are now in effect for its officers. The FOP contends that these provisions would have an "adverse actuarial impact" on the pension plans of its officers. As a result, the FOP submits that foregoing amendment in section 3 of Act 57 of 1996 violates art. I, § 17 of the Pennsylvania Constitution.

In addition, section 22 of Act 57 of 1996 added the following section to the Act which provides, in pertinent part:

Section 450. (a) Any employer and the recognized or certified and exclusive representative of its employe may agree by collective bargaining to establish certain binding obligations and procedures relating to workers' compensation: Provided, however, That the scope of the agreement shall be limited to:

(1) benefits supplemental to those provided in sections 306 and 307;

(2) an alternative dispute resolution system which may include, but is not limited to, arbitration, mediation and conciliation;

(3) the use of a limited list of providers for medical treatment for any period of time agreed upon by the parties;

(4) the use of a limited list of impartial physicians;

(5) the creation of a light duty, modified job or return to work program;

(6) the adoption of twenty-four-hour medical coverage; and

(7) the establishment of safety committees; and

(8) a vocational rehabilitation or retraining program.

(b) Nothing contained in this section shall in any manner affect the rights of an employer or its employes in the event that the parties to a collective bargaining agreement refuse or fail to reach agreement concerning the matters referred to in clause (a). In the event a municipality and its police or fire employes fail to agree by collective bargaining concerning matters referred to in clause (a), nothing in this section shall be binding upon the municipality or its police or fire employes as a result of an arbitration ruling or award.

Act 57 of 1996, § 22.

In its petition, the FOP submits that these provisions limit existing collective bargaining rights which are guaranteed by what is commonly called the Collective Bargaining by Policemen or Firemen Act (Act 111). ⁵ The FOP alleges that this amendment identifies certain issues which were previously mandatory subjects of bargaining under Act 111 and, under section 22(b) of Act 57, precludes their resolution through mandatory arbitration. However, section 22(b) does not preclude other public or private employees, including those employees who are covered under the Public Employe Relations Act (Act 195), ⁶ from submitting these bargaining issues to binding arbitration. The FOP claims that this provision is unconstitutional as there is no rational basis for limiting the collective bargaining rights of Act 111 employees and not those of other public and private employees.

In its petition, the FOP also asserts that the provisions relating to police employees in section 22(b) were added to Act 57 of 1996 on the day it was passed in retaliation for its opposition to the passage of Senate Bill No. 801. As a result, the FOP claims that this provision violates its free speech rights as guaranteed by art. I, § 1 of the Pennsylvania Constitution.

The FOP next claims that the restriction on collective bargaining contained in section 22(b) constitutes a special law regulating labor. As a result, the FOP submits that Act 57 of 1996 violates art. III, § 32 of the Pennsylvania Constitution.

Finally, the FOP contends that Act 57 of 1996 contains provisions relating to collective bargaining and pension benefits, not merely to workers' compensation. Because this legislation contains more than one subject, the FOP alleges that it was passed in violation of art. III, § 3 of the Pennsylvania Constitution. Based on the foregoing, the FOP asked this court to declare the provisions of Act 57 of 1996 to be unconstitutional.

In response to the FOP's petition for review, on September 11, 1996, the department filed the instant preliminary objections. ⁷ The department first submits that under the Declaratory Judgments Act, the FOP must plead facts which establish a direct, immediate and substantial injury and must demonstrate the existence of an actual controversy related to the invasion or threatened invasion of its legal rights. The department contends that the FOP's claims relating to the constitutionality of Act 57 of 1996 as it relates to the mandatory offset of benefits and collective bargaining fail to allege facts constituting actual harm or an actual controversy. As a result, the department alleges that declaratory judgment may not be employed to determine the parties' respective rights in anticipation of events which may never occur.

The department next submits that the FOP's claim relating to a violation of its free speech rights presents a nonjusticiable claim. The department alleges, inter alia, that this court is precluded from reviewing the legislature's motivation for amending the provisions of Act 57 of 1996 prior to its passage as it would require our review of legitimate legislative activities which is barred by the Speech or Debate Clause of art. II, § 15 of the Pennsylvania Constitution.

The department next submits that the FOP has failed to allege any facts which demonstrate that Act 57 of 1996 is a special law regulating labor. Thus, the department claims that the FOP has failed to demonstrate that it violates of art. III, § 32 of the Pennsylvania Constitution.

The department next contends both section 3 and 22 of Act 57 of 1996 directly pertain to the general subject of workers' compensation. Thus, the department alleges that its passage does not violate art. III, § 3 of the Pennsylvania Constitution which prohibits the passage of bills containing more than one subject.

Based on the foregoing, the department requests that the FOP's petition for review requesting declaratory relief be dismissed. On October 3, 1996, the FOP filed an answer to the department's preliminary objections.

Initially, we note that in ruling on preliminary objections, this court must accept as true all well-pleaded material allegations in the petition for review, as well as all inferences reasonably deduced therefrom. Envirotest Partners v. Department of Transportation, 664 A.2d 208 (Pa.Cmwlth.1995). This court need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion. Id. In order to sustain preliminary objections, it must appear with certainty that the law will not...