STATE SYS. OF HIGHER ED. v. STATE COLLEGE

• Decision Date: 22 December 1999
• Citation: 560 Pa. 135,743 A.2d 405
• Parties: STATE SYSTEM OF HIGHER EDUCATION, (CHEYNEY UNIVERSITY), Appellee, v. STATE COLLEGE UNIVERSITY PROFESSIONAL ASSOCIATION (PSEA-NEA), Appellant.
• Court: Pennsylvania Supreme Court

743 A.2d 405

560 Pa. 135

STATE SYSTEM OF HIGHER EDUCATION, (CHEYNEY UNIVERSITY), Appellee, v. STATE COLLEGE UNIVERSITY PROFESSIONAL ASSOCIATION (PSEA-NEA), Appellant.

Supreme Court of Pennsylvania.

Argued November 17, 1998.

Decided December 22, 1999.

Thomas W. Scott, for State College Univ. Proffessional Association.

Peter J. Ennis, State System of Higher Education.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN AND SAYLOR, JJ.

OPINION

CAPPY, Justice.

The court granted allocatur to determine whether the Commonwealth Court erred in vacating a labor arbitrator's award. Because this court has stated differing iterations of the appropriate standard of review, in undertaking this inquiry, we are required to reconsider the proper role of an appellate court when reviewing a labor arbitration award under the Pennsylvania Public Employe Relations Act (Act 195).¹ For the reasons stated below, we reverse the decision of the Commonwealth Court as violative of the appropriate standard of review and reinstate the award of the arbitrator.

The facts of the case are not in dispute. Cheyney University of the State System of Higher Education (the University) hired Frank Mitchell for employment in its Admissions Office on March 28, 1994. Mr. Mitchell was hired as a State University Administrator 2, Admissions Counselor/Recruiter, and was responsible for the University's "outreach activities." Pursuant to the collective bargaining agreement between the University and the State College University Professional Association (the Union), newly hired employees are considered probationary employees during their first twelve months of employment.

On November 8, 1994, while still a probationary employee, the Baltimore Harbor Tunnel Police arrested Mr. Mitchell for speeding when returning from a recruiting trip to Washington D.C. When Mitchell was not able to produce a valid driver's license, the police impounded his state-owned car. Mr. Mitchell remained with the vehicle while at the police barracks.

The next day, Mr. Mitchell and the towing service each independently notified the University of the events of the prior evening. Mr. Mitchell attempted to contact his superior, Sharon L. Cannon, Director of Admissions. Unable to reach Ms. Cannon directly, Mr. Mitchell left a message that he was unable to attend work for personal reasons. Mr. Mitchell did speak with Steve Hilton of the University Motor Pool and informed him that he planned to call a friend to come to the police barracks to drive the vehicle back to the University. However, the University's Director of Facilities became aware of the situation and dispatched two University employees to retrieve the automobile.

That same day, without any further confirmation or verification of the allegations and before hearing Mr. Mitchell's version of the events, Ms. Cannon recommended to the Vice President of Student Affairs that Mr. Mitchell's employment with the University be terminated. When he returned to his office, Mr. Mitchell was informed of his superior's recommendation and he was reassigned to administrative duties. Although Mr. Mitchell informed the University that he had recently moved from state to state causing confusion with respect to the status of his license, the University did not consider this information in taking action against Mr. Mitchell.

On January 19, 1995, Mr. Mitchell was terminated, effective in 90 days, i.e., April 21, 1995, pursuant to the collective bargaining agreement.

On February 22, 1995, the Union filed a grievance on behalf of Mr. Mitchell challenging his discharge. The parties were unable to resolve the grievance at the preliminary steps of the grievance procedure, and thus, the grievance proceeded to arbitration before Edward A. Pereles, Esq. Before Arbitrator Pereles, the University argued that because Mr. Mitchell was a probationary employee at the time of his termination, the dispute was not arbitrable and the arbitrator had no jurisdiction. Article 13, Section 2.C of the collective bargaining agreement provided for a bifurcated hearing when the jurisdiction of an arbitrator is challenged. Thus, the first day of hearing with respect to the jurisdiction of the arbitrator was heard on May 15, 1996.

This initial phase of the arbitration presented a question of contract interpretation. The parties each offered differing interpretations of the contract language found in Article 14, Section 3, which is entitled "Discharge, Demotion, Suspension and Discipline":

During a professional employees [sic] initial twelve (12) months of employment, the provisions of this Article shall not apply. If at any point during a professional employee's initial probationary period, the President or their [sic] designee(s) determine that the professional employee will not be retained, the professional employee will be given 90 days notice prior to termination, which may include paid or unpaid periods of time. The parties hereto recognize that for some serious offenses, progressive discipline is inappropriate and that immediate removal may be warranted and such 90 days [sic] notice period referred to in this section shall not be applicable.

Collective Bargaining Agreement Article 14, Section 3, p. 7 (emphasis supplied).

The University focused on the first sentence of Article 14, Section 3. The University argued that the language completely prohibited a probationary employee from filing any grievance to challenge his termination. University witnesses offered that the disputed language was to deny probationary employees all access to the grievance procedure in the event of termination. Additionally, the University contended that as Article 14, Section 1 of the agreement prevented any adverse employment action against an employee without "just cause," probationary employees were not entitled to the protection of this standard.

The Union focused on the last sentence of Article 14, Section 3. Union witnesses testified that the language from the first sentence of Article 14, Section 3 relied upon by the University was only intended to deprive probationary employees of the application of a "just cause" standard to a termination. However, the Union offered that the last sentence of the section implicitly recognized that although probationary employees do not have access to a just cause standard, they do have the right to progressive discipline in all but the most serious cases. Therefore, the Union took the position that a probationary employee may have the right to file a grievance if a right to progressive discipline has been violated.

After reviewing the evidence, including conflicting testimony as to the negotiating history and proper application of Article 14, Section 3, the arbitrator agreed with the University and concluded that a probationary employee is not entitled to "just cause" protection. However, the arbitrator continued:

[T]he language of Section 3 appears on its face, in a negative way, to create an expectation that for at least some "serious" (and all lesser infractions as well), progressive discipline is available for probationary employees.

Interim Arbitration Award, June 26, 1996 at 10-11.

The Arbitrator also found as a fact that, while the collective bargaining agreement does not explicitly set forth a separate standard for judging the actions of probationary employees, the parties had seemingly agreed "that if there is a standard it is that the University may not be `arbitrary and capricious' in meting out discipline." Interim Arbitration Award, June 26, 1996 at 10-11. The arbitrator further reasoned that even if the parties had not agreed that the arbitrary and capricious standard was applicable, he would have drawn the same conclusion from the negative inference emerging from Section 3 that "some minimum procedural due process standard applies." Interim Arbitration Award, June 26, 1996 at 11. Thus, Arbitrator Pereles initially determined that he had jurisdiction and that the grievance was arbitrable.

On August 21, 1996, a second day of hearing was held regarding the substance of the grievance. On October 14, 1996, a final award and opinion was rendered. Arbitrator Pereles sustained the grievance finding that, at a minimum, the University was required to provide Mr. Mitchell with an investigation and a statement of the reasons why he was being terminated. The arbitrator found that the situation was pre-judged and that Mr. Mitchell was terminated before there was any verification of the police report or the status of Mr. Mitchell's driver's license. Thus, according to the arbitrator, Mr. Mitchell had not been terminated for a contractually permissible reason. Arbitrator Pereles ordered that the termination be withdrawn and that Mr. Mitchell be reinstated with full back pay and benefits.

The University refused to comply with the award. Instead, it filed a petition for review with the Commonwealth Court. On September 3, 1997, a three-judge panel of that court vacated the arbitrator's award and reinstated Mr. Mitchell's termination. Specifically, the Commonwealth Court found that the plain meaning of the first sentence of Article 14, Section 3 precluded arbitration and that since no standard of due process was stated in the agreement, the arbitrator impermissibly determined whether the University's actions were arbitrary and capricious. Thereafter, we granted the Union's petition for allowance of appeal.

The ultimate issue raised by the Union is whether the Commonwealth Court erred in vacating the arbitrator's award. However, before addressing that issue, we must consider a threshold matter: what is the proper role of a court in reviewing an arbitrator's interpretation of the terms of a collective bargaining agreement?

Our court has spoken to this issue on numerous occasions. However, based upon the number of challenges to arbitration awards, this court's standard of review has seemingly become a boilerplate...