Philadelphia Federation of Teachers, AFT, Local 3 v. School District of Philadelphia

[J-65-2016]
IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, JJ.
PHILADELPHIA FEDERATION OF : No. 31 EAP 2015
TEACHERS, AFT, LOCAL 3, AFL-CIO :
AND JERRY JORDAN, : Appeal from the Order of the
: Commonwealth Court entered on
Appellees : 1/22/15 at 1951 C.D. 2014, affirming the
: Final Injunction Order entered on
v. : 10/27/14 in the Court of Common Pleas,
: Philadelphia County, Civil Division at
: No. 01842, October Term, 2014
SCHOOL DISTRICT OF PHILADELPHIA, :
THE SCHOOL REFORM COMMISSION, :
WILLIAM J. GREEN, FEATHER : ARGUED: May 11, 2016
HOUSTOUN, FARA JIMENEZ, :
MARJORIE NEFF, AND SYLVIA SIMMS, :
IN THEIR OFFICIAL CAPACITIES AS :
MEMBERS OF THE SCHOOL REFORM :
COMMISSION, AND DR. WILLIAM R. :
HITE, JR., IN HIS OFFICIAL CAPACITY :
AS THE SUPERINTENDENT OF :
SCHOOLS, SCHOOL DISTRICT OF :
PHILADELPHIA, :
:
Appellants :
OPINION
CHIEF JUSTICE SAYLOR DECIDED: August 15, 2016
This appeal concerns whether power is invested in a school reform commission,
under a statutory regime designed to facilitate rehabilitation of financially distressed
school districts, to unilaterally alter terms and conditions of employment for teachers
whose interests are represented by a bargaining unit.
In 1959, the General Assembly enacted the Distressed School Law,1 amending
the Public School Code of 1949,2 and providing for special boards of control to govern
school districts deemed to be financially distressed. See 24 P.S. §§6-692 (repealed), 6-
693. Of particular relevance to the present appeal, Section 693 of the enactment
conferred upon on such boards the power to:
cancel or to renegotiate any contract other than teachers’
contracts to which the board or the school district is a party,
if such cancellation or renegotiation of contract will effect
needed economies in the operation of the district’s schools.
Id. §6-693(a)(1) (emphasis added).
In 1998, the Legislature implemented additional measures specific to distressed
school districts of the first class -- i.e., the School District of Philadelphia (the “District”) -
- by adding Section 696 to the School Code.3 Among other provisions that had the
effect of affording the Commonwealth an expanded role in the governance of financially-
distressed school districts of the first class, the legislation, as amended as of October
2001,4 provided for the establishment of a five-member school reform commission,
within 30 days after the issuance of a declaration of distress by the Secretary of
1
Act of Dec. 15, 1959, P.L. 1842, No. 675 (as amended 24 P.S. §§6-691 - 6-695).
2
Act of March 10, 1949, P.L. 30, No. 14 (as amended 24 P.S. §§1-101 – 27-2702) (the
“School Code”).
3
See Act of April 27, 1998, P.L. 270, No. 46 (“Act 46”) (implementing modifications
throughout the School Code, including, in Section 3, the addition of Section 696).
4
See Act of Oct. 30, 2001, P.L. 828, No. 83, §1 (“Act 83”).
[J-65-2016] - 2
Education, to assume the responsibility for the operation, management and educational
program of the district. See 24 P.S. §6-696(a), (e)(1).5
Of particular relevance here, Section 696(i) conferred upon a school reform
commission the powers afforded to special boards of control under Section 693(a)(1).
See id. §6-696(i). Thus, derivatively, a school reform commission has the ability, in
delineated circumstances, to “cancel or to renegotiate any contract other than teachers’
contracts to which the board or the school district is a party[.]” Id. §6-693(a)(1); see also
id. §6-696(i).
Within its subsection (k), Section 696 also imposed a number of requirements
and restrictions upon collective bargaining between the distressed district and employee
bargaining units, see id. §6-696(k), while repealing the Public Employe Relations Act,6
to the extent of any inconsistency. See Act 46, §28(a). Notably, as originally enacted in
1998, Section 696(k)(5) stated that nothing in subsection (k) “shall eliminate, supersede
or preempt any provision of an existing collective bargaining agreement until the
expiration of the agreement unless otherwise authorized by law.” 24 P.S. §6-696(k)(5)
(superseded). In the 2001 amendments, however, the Legislature added language
stating that such qualification pertained “[e]xcept as specifically provided in section
693.” Id. (as amended by Act 83). Via subsection (l), the General Assembly also
prohibited school employees from striking during the tenure of a school reform
commission. See id. §6-696(l).
5
Per the statute, four members of a school reform commission initially are appointed by
the Governor, and one member is appointed by the mayor of the city coterminous with
the distressed first-class school district. See 24 P.S. §6-696(a). After a period of three
years, the mayor assumes appointment authority over one of the positions initially filled
by the Governor. See id. §6-696(b)(iii).
6
Act of July 23, 1970, P.L. 563, No. 195 (as amended 43 P.S. §§1101.101 –
1101.2301) (“PERA”).
[J-65-2016] - 3
In December 2001, the Secretary of Education issued a declaration of financial
distress pertaining to the District, and a school reform commission (the “SRC” or the
“Commission”) was constituted and assumed responsibility for the District’s operations,
management, and educational program, per Section 696 of the School Code.
Throughout the ensuing years, the SRC and appellee, the Philadelphia Federation of
Teachers, AFT, Local 3, AFL-CIO (the “Union”),7 negotiated several collective
bargaining agreements, the most recent of which was effective from September 2009
through August 2012, and extended through August 2013. For some period thereafter,
the parties adhered to the terms of the expired agreement, consistent with the general,
labor-law protocol. See In re Appeal of Cumberland Valley Sch. Dist., 483 Pa. 134,
143, 394 A.2d 946, 951 (1978).
In 2014, the SRC sought leave to file an original jurisdiction complaint in this
Court, seeking a declaration that it had the power to unilaterally modify work practices
and rules that, under Section 696(k)(2), lay outside the scope of mandatory bargaining.
The Court denied such request in June 2014. See SRC v. Phila. Fed’n of Teachers,
626 Pa. 115, 95 A.3d 269 (2014) (per curiam).8
Several months later, the SRC adopted “Resolution SRC-1,” entitled,
“Implementation of Modified Economic Terms with [the Union]; Cancellation of
Collective Bargaining Agreement.” The instrument explained that the District’s
longstanding and extreme financial crisis continued, despite “significant and historic
cost-reduction measures,” including dozens of school closures, thousands of employee
7
For convenience, and consistent with the parties’ submissions, our reference to the
term “the Union” generally encompasses its president and trustee ad litem, Jerry
Jordan, who also presently is an appellee.
8
Former Chief Justice Castille issued a dissenting statement, joined by Justice Baer.
See id. at 116-21, 95 A.3d at 269-72 (Castille, C.J., dissenting).
[J-65-2016] - 4
layoffs, a prolonged freeze on charter-school expansion, and substantial wage and
benefit concessions from employee organizations. Resolution SRC-1, at 1 (Oct. 6,
2014). According to the document, the District’s operating budget remained insufficient
to provide adequate funding for essential services.
The resolution further described an ongoing multi-year negotiations process,
referred to as a “marathon of collective bargaining,” between the District and the Union
with the assistance of mediators from the Pennsylvania State Bureau of Mediation,
which had yet to culminate in an agreement. Id. In the Commission’s judgment, it
related, curtailment of benefits for the employees, and modification of some other terms
and conditions of employment, was necessary to effect needed economies in school
operations. See id.
For these reasons, the SRC invoked Sections 693(a)(1) of the School Code, as
incorporated into Section 696(i), to “make specific limited changes and to implement . . .
modified economic terms and conditions for employees in the bargaining units
represented by the [Union], consistent with economic terms proposed in negotiations,
while maintaining all other existing terms and conditions to the extent required by
law[.]”9 Id. at 2. The Commission predicted that the changes would save about $44
9
The specific modifications included:
changes to medical benefits, including replacing the existing
medical plan administered by Independence Blue Cross with
a less expensive plan deemed by the School District to be
comparable in coverage, requiring employee contributions
toward medical premiums, imposing a surcharge for
coverage of spouses who have access to medical benefits
provided by their own employers, and eliminating opt-out
payments; instituting a new School District-administered
program providing for dental, optical, and prescription drug
benefits; eliminating contributions to the [Union] Health and
Welfare Fund and to the [Union] Legal Services Trust Fund;
(continuedM)
[J-65-2016] - 5
million in 2014 through 2015 and $198 million over four years. Ultimately, the resolution
purported to cancel the most recent collective bargaining agreement between the
District and the Union, to the extent that it continued to govern the parties’ relations.
Contemporaneous with the issuance of Resolution SRC-1, the Commission, the
District, and the Department of Education lodged a declaratory judgment action in the
Commonwealth Court. The plaintiffs asked that court to uphold the imposition of the
new economic terms and conditions as being authorized by applicable law.
The Union responded with a grievance protesting the SRC’s actions and seeking
arbitration, an unfair labor practice charge filed before the Pennsylvania Labor Relations
Board, and a complaint in equity for temporary restraining order and preliminary
injunctive relief. The complaint sought solely to preserve the status quo until the parties
concluded the anticipated labor arbitration of their dispute and attained resolution of the
unfair labor practice charge. Throughout its various submissions to the common pleas
court, the Union took the position that the restriction, within Section 693(a)(1), upon the
cancellation or renegotiation of “teachers’ contracts” plainly encompassed contracts that
govern teachers’ employment, such as a collective bargaining agreement establishing
the terms and conditions for such engagement. The Union also maintained that the
bargaining efforts between it and the District had not reached an impasse.
The SRC urged the common pleas court to stay the proceedings before it, so that
material legal issues could be adjudicated in the Commonwealth Court. Further, the
Commission took the position that the injunction requested by the Union, if granted,
(Mcontinued)
creating a uniform per diem rate for certified teachers;
changing wage continuation benefits; and modifying
termination pay benefits for new employees[.]
Id. at 2.
[J-65-2016] - 6
would cause irreparable harm by requiring the District to “stop restoring crucial funds to
the schools to pay for books, school supplies as basic as paper and art supplies, and
most importantly, much needed staff, such as counselors, reading specialists, and other
specialists and programs to be devoted to the District’s most at-risk students.”
Defendants’ Memorandum of Law in Opposition to Plaintiffs’ Petition for a Temporary
Restraining Order and Preliminary Injunctive Relief (“Defendants’ Memorandum”) in
Phila. Federation of Teachers, AFT, Local 3, AFL-CIO v. Sch. Dist. of Phila., No. 01842
Oct. Term 2014 (C.P. Phila), at 3.
On the merits, the SRC maintained that, since a collective bargaining agreement
is a contract, there could be no question that such an agreement was subject to
cancellation to facilitate needed economies in the operation of the District’s schools.
See 24 P.S. §6-693(a)(1). The need, the Commission contended, was also undeniable,
given a projected funding shortfall for the next fiscal year of $71 million, heralded in part
by the two major cost drivers of employee health care costs and state-mandated
contributions to employee pensions.
The SRC depicted Section 696 as “redr[awing] the map for collective bargaining
between the School District and its unions, curtailing union rights and conferring
exceptional powers on the SRC and the School District to cope with the challenges
posed by fiscally distressed circumstances.” Defendants’ Memorandum in Phila.
Federation of Teachers, AFT, Local 3, AFL-CIO v. Sch. Dist. of Phila., No. 01842 Oct.
Term 2014 (C.P. Phila), at 5. To the degree that the Union would question the
Commission’s imposition of new terms and conditions, as contrasted with cancellation
as such, the SRC asserted that the power to cancel a collective bargaining agreement
“carries with it the power to implement new cost-saving terms and conditions.” Id. at 15.
[J-65-2016] - 7
The SRC also responded to the position that Section 693(a)(1)’s exception for
“teachers’ contracts” might encompass collective bargaining agreements involving
teachers. In this regard, the Commission took that position that the term has long had a
specific and definite meaning in Pennsylvania law, referring only to individual contracts
that each school district has with its teachers, as required by the Teachers’ Tenure Act
of 1937.10 See id. at 30.
After a hearing, the common pleas court granted the preliminary injunction, which
it later converted to a permanent one upon the parties’ stipulation. With regard to the
phrase “teachers’ contracts” as employed in Section 693(a)(1), the court found that
collective bargaining agreements had been referred to as such by courts in a long line
of cases.11 Accordingly, the court found that the right of cancellation under Sections
10
Act of April 6, 1937, P.L. 213, No. 52 (previously codified at 24 P.S. §1126)
(repealed).
Notably, by the time of the enactment of Section 693 of the Distressed School Law,
material provisions of the 1937 Teachers’ Tenure Act cited by the SRC had been
modified and ultimately repealed, inter alia, via the School Code. See, e.g., Act of
March 10, 1949, P.L. 30, art. XXVII, §2701. Presumably on this account, the
Commission has refined its arguments before this Court to focus on provisions of the
School Code. See Brief for Appellants at 32 (asserting that the term “teachers’
contracts” refers to “the individual teacher tenure contracts that each school district has
with its tenured teachers, as mandated by section 1121 of the School Code, 24 P.S.
§11-1121”).
11
In support, the court cited: Wyland v. PSERB, 669 A.2d 1098, 1100 (Pa. Cmwlth.
1996) (referring to “teachers’ contract negotiations” in connection with a discussion of a
labor dispute); Union City Area Sch. Dist. v. UCBR, 61 Pa. Cmwlth. 494, 497 n.2, 434
A.2d 239, 241 n.2 (1981) (specifying that the term “teacher contract” would be
employed as a convention signifying a collective bargaining agreement), rev’d on other
grounds sub nom. Union City Sch. Dist. v. UCBR, 499 Pa. 548, 454 A.2d 522 (1982);
Phila. Fed’n of Teachers, Local No. 3 v. Thomas, 62 Pa. Cmwlth. 286, 298, 436 A.2d
1228, 1234 (1981) (referring to labor disputes involving teachers’ unions as “teachers
contract disputes”); Bethel Park Sch. Dist. v. Bethel Park Fed’n of Teachers, Local
1607, Am. Fed’n of Teachers, AFL-CIO, 51 Pa. Cmwlth. 104, 106, 414 A.2d 145, 147
(continuedM)
[J-65-2016] - 8
693(a)(1) and 696(i) did not reach such agreements. The court also reasoned that – on
account of a prescription within Section 693 that “the special board of control shall have
power to require the board of directors within sixty (60) days” to implement measures
encompassing the cancellation power, 24 P.S. §6-693(a) -- the cancellation power could
only have been exercised within 60 days after the December 2001 declaration of
distress.
On the SRC’s appeal, the Commonwealth Court affirmed. See Phila. Fed’n of
Teachers, AFT, Local 3, AFL-CIO v. Sch. Dist. of Phila., 109 A.3d 298 (Pa. Cmwlth.
2015) (en banc). Initially, the court disagreed with the common pleas court’s
determination that the Commission’s Section 693 powers had to be exercised within 60
days after it assumed control of the District. See id. at 303 n.5 (noting the
impracticability of requiring school reform commissions to exercise all powers under
Section 693 within 60 days after their creation and indicating that “it appears that this
limitation applied to the time period within which a school district’s board of directors
must comply with the directives of a special board of control to revise a budget”).12
(Mcontinued)
(1980) (referring to “teacher contract disputes”); and Phila. Fed’n of Teachers, Local No.
3, AFT, AFL-CIO v. Bd. of Ed. of Sch. Dist. of Phila., 458 Pa. 342, 343-44, 327 A.2d 47,
48-49 (1974) (referencing a collective bargaining agreement involving teachers as a
contract). See also Hazleton Area Sch. Dist. v. Hazleton Area Educ. Ass’n, 47 Pa.
Cmwlth. 255, 257, 408 A.2d 544, 545 (1979) (characterizing a collective bargaining
agreement as a “teacher’s contract”).
12
Although the Union maintains its arguments along these lines in its present
submissions, it is apparent from the statute that the 60-day limitation does not directly
constrain the SRC’s actions, but rather, is directed to those of the subordinated school
board. In other words, the prescription that “the special board of control shall have
power to require the board of directors within sixty (60) days” to implement measures
encompassing the cancellation power, 24 P.S. §6-693(a), requires the board of
directors to proceed with a special board’s directives within the 60-day period.
(continuedM)
[J-65-2016] - 9
Nevertheless, in broad terms, the intermediate court credited the common pleas court’s
holding that Sections 693(a)(1) and 696(i) did not permit the Commission to cancel the
collective bargaining agreement or impose new terms and conditions of employment
upon teachers whose rights and interests were subjects of that agreement.
The Commonwealth Court proceeded to offer a general discussion of the
collective bargaining process in the public employment setting, under PERA,
encompassing the employees’ right to strike in the event of an impasse. See id. at 303-
04 (citing Curley v. Bd. of Sch. Dirs. of Greater Johnstown Sch. Dist., 163 Pa. Cmwlth.
648, 659, 641 A.2d 719, 724-25 (1994)). The intermediate court observed that PERA
establishes mandatory subjects of bargaining, encompassing wages, hours, and other
terms and conditions of employment, see 43 P.S. §1101.701, and delineates matters
that are not subject to bargaining, including matters of inherent managerial policy, see
id. §1101.702. In this regard, the court highlighted, from the outset, that Act 46
repealed PERA only to the extent of inconsistencies with the revised provisions of the
School Code. See Act 46, §28(a).
The Commonwealth Court then reviewed the various relevant amendments to
the School Code, and in particular, the addition of Section 696 via Act 46. See Phila.
Fed’n of Teachers, 109 A.3d at 306-08. In this respect, the intermediate court
emphasized that Section 696(k) “clearly conveys that distressed first-class school
districts shall engage in collective bargaining,” subject to defined exceptions, but “does
(Mcontinued)
This conclusion is consistent with the natural phrasing of the controlling passage and
the last-antecedent rule of statutory construction. See Rendell v. Pa. State Ethics
Comm’n, 603 Pa. 292, 304, 983 A.2d 708, 715 (2009). Moreover, as the
Commonwealth Court observed, such reading accounts for the extraordinary learning
and planning curves facing a newly-constituted special board charged with assuming
control of the affairs of, and operating, a school district until a sound financial structure
is reestablished. See 24 P.S. §6-693.
[J-65-2016] - 10
not give the SRC the right to cancel a [collective bargaining agreement] or unilaterally
impose new terms.” Id. at 308. Furthermore, the court highlighted the 2001 repeal of
Section 696(k)(1), which had stated a rule contrary to the ordinary labor-law protocol
requiring parties to maintain the status quo after the expiration of a collective bargaining
agreement. See 24 P.S. §6-696(k)(1) (repealed) (“Whether or not a declaration of
distress has been made under section 691(c), a collective bargaining agreement in
effect on the effective date of this section shall not be extended and shall have no force
or effect beyond the existing term of the contract notwithstanding any other law to the
contrary.”). From this repealer, the intermediate court discerned a “clear intent by the
legislature not to alter the status quo requirement.” Phila. Fed’n of Teachers, 109 A.3d
at 309.
The analysis then segued into a discussion of employers’ options upon a
bargaining impasse, including, according to the Commonwealth Court at least, the
unilateral imposition of new terms and conditions of engagement for employees. See
id. at 309-11.13 In any event, however, the intermediate court explained that the parties
were in agreement that an impasse had not been declared or reached in the present
circumstances. See id. at 311 n.19.
With regard to the impact of the Distressed School Law, and Section 693(a)(1) in
particular, the Commonwealth Court declined to focus on the central question presented
to it concerning whether the term “teachers’ contracts,” as used in Section 693(a)(1),
13
This analysis has provoked extensive criticism from the Union’s amici, the American
Federation of State, County and Municipal Employees (“AFSCME”) District Council 33,
Service Employees International Union Local 32BJ, AFSCME District Council 47, and
Gas Works Employees Union Local 686, Utility Workers Union of America (collectively
“Amici”). See Brief for Amici at 20-41. We find that a resolution of this difference is
unnecessary to the disposition of the present appeal; thus, our opinion should in no way
be read as an endorsement of the Commonwealth Court’s position on the subject of
employer options upon an impasse.
[J-65-2016] - 11
subsumes collective bargaining agreements. See, e.g., id. at 314 (discussing the
parties’ arguments on the point and indicating that, “[i]n any event, section 693(a)(1) is
not controlling as it does not specifically address [collective bargaining agreements],
override the relevant provisions of PERA, or empower the SRC to unilaterally impose
new economic terms and conditions of employment.”). Rather, adopting a broader
frame of reference, the intermediate court appeared to take the position that collective
bargaining agreements simply are not “contracts” at all for purposes of Section
693(a)(1), given that the Legislature had “reference[d] [collective bargaining agreements
and contracts] individually in . . . sections 693 and 696.” Id. at 312.14
According to the intermediate court, the legislative history of the various relevant
amendments to the School Code also lent no support to the SRC’s position that it had
the authority to cancel collective bargaining agreements. See id. at 316. While the
14
This rationale is undeveloped and unclear, since it contains no contextual references
concerning the specific use of the terms in the relevant sections.
Notably, for example, as the Commonwealth Court otherwise highlighted, Section 693
contains no internal reference to collective bargaining agreements. Plainly, therefore,
Section 693 itself does not specifically differentiate between “contracts” and “collective
bargaining agreements.” Moreover, in Section 696(k)(4), immediately after having
delineated -- in subsections (k)(2) and (3) -- a series of requirements and restrictions
relative to collective bargaining agreements, the Legislature specified that “[a] provision
in any contract in effect on the date of the declaration of distress under this subsection
that is in conflict with this subsection shall be discontinued in any new or renewed
contract.” 24 P.S. §6-696(k)(4) (emphases added). By its location and effect, such
provision pertaining to “any contract” seems rather overtly to be intended not to
distinguish -- but to embody -- collective bargaining agreements.
Additionally, it is worth noting at this juncture that neither any party nor any amicus
supports the position that a collective bargaining agreement is not, in the first instance,
a contract for purposes of Section 693(a)(1). See generally Kozura v. Tulpehocken
Area Sch. Dist., 568 Pa. 64, 71, 791 A.2d 1169, 1174 (2002) (referencing the
“fundamental principle that a collective bargaining agreement constitutes a contract”).
[J-65-2016] - 12
intermediate court did not say so directly, its specific treatment of the remarks of various
legislators suggested that they appeared to understand the restraint upon cancellation
powers relative to “teachers’ contracts,” in Section 693(a)(1), as creating a distinction
between a school reform commission’s ability to cancel collective bargaining
agreements as to teachers, versus cancellation relative to other employees.15
The Commonwealth Court further emphasized the absence, in Section 693, of
any specific reference to collective bargaining, any terms overriding relevant provisions
of PERA, or any language empowering a special board of control unilaterally to impose
new economic terms and conditions of employment. See, e.g., id. at 314. The court
also suggested that the approach of replacing a selected number of the provisions of a
collective bargaining agreement, while retaining the remainder, simply was not
tantamount to cancellation in any event. See id. at 316.
Next, the Commonwealth Court considered an argument by the SRC that, via
2012 amendments to the School Code,16 the General Assembly solidified the position
15
See id. at 315 n.25 (reflecting the remark of then-Representative Michael Veon that,
under Act 46, “you could in fact negate existing contracts for janitors, bus drivers,
cafeteria workers” (quoting H. Legis. Journal, Oct. 23, 2001, at 1899)); see also id.
(referencing the remarks of then-Representative H. William DeWeese, as follows: “If
you vote to concur tonight, you are voting to lacerate the jobs of many hundreds of bus
drivers and cafeteria workers,” but “the teachers will probably be protected” (quoting H.
Legis. Journal, Oct. 23, 2001, at 1904)); cf. id. (highlighting then-Senator Vincent
Fumo’s comment, associated with the 2001 amendments to the School Code: “Thank
God, you protected the contracts of the teachers[.]” (quoting Senate Legis. Journal, Oct.
23, 2001, at 1013)); id. at 315 n.26 (reflecting an assurance by Act 46’s primary
sponsor, then-Majority Leader John Perzel when asked in discussions of the Act 46
amendments about the bill’s effect “on existing union contracts,” that “this does not
abrogate the existing union contract whatsoever” (quoting House Legislative Journal,
April 21, 1998, at 917)).
16
See Act of July 12, 2012, P.L. 1142, No. 141 (supplementing and amending various
provisions of the School Code, including, relevantly, the addition of Section 602-A).
[J-65-2016] - 13
that the term “teachers’ contracts” excludes collective bargaining agreements. These
amendments, pertaining to certain school districts other than those of the first class, see
24 P.S. §6-602-A, conferred a contract cancellation power upon such districts, subject
to the express proviso that “[c]ollective bargaining agreements are specifically exempt.”
Id. §6-642-A(a)(3). The intermediate court, however, declined to infer, from this specific
exemption in connection with a cancellation power, that the General Assembly must
have intended collective bargaining agreements to be subsumed within a school reform
commission’s cancellation power under Sections 696(i) and 693(a)(1). See Phila. Fed’n
of Teachers, 109 A.3d at 317. In this regard and otherwise, the court emphasized that,
since the time when Section 693 was promulgated in 1959, no party or court ever had
asserted that collective bargaining agreements were subject to the cancellation power
under the statute. See id.17
We allowed the SRC’s appeal to consider whether the Legislature conferred
upon the entity the power to cancel collective bargaining agreements. Our review of the
matter of statutory construction is plenary. Oliver v. City of Pittsburgh, 608 Pa. 386,
393, 11 A.3d 960, 964 (2011).
Preliminarily, we observe that the litigants offer many lines of argumentation in
their briefs. The dispositive issue, we find, lies in the construction of the term “teachers’
contracts” in Section 693(a)(1) of the School Code, upon which our treatment, below,
focuses.
17
The Commonwealth Court also drew a supportive inference on this point from the
dissenting statement, authored by former Chief Justice Castille and joined by Justice
Baer, which was issued in connection with this Court’s denial in 2014 of the SRC’s
application for leave to file an original jurisdiction complaint. See supra note 8.
Although certainly such statement stands as a developed explication of the position
taken by two Justices, we do not find the exercise of deriving inferences from an
expression by a Court minority to be a useful one.
[J-65-2016] - 14
Presently, the SRC maintains that collective bargaining agreements are
“contracts” subject to the general cancellation power under Section 693(a)(1), and that
the exception for “teachers’ contracts” does not apply. 24 P.S. §6-693(a)(1). In support
of this proposition, the Commission explains that the Distressed School Law predated
PERA’s authorization of collective bargaining for public employees by some 11 years.
Accordingly, in the time period in which the Distressed School Law was promulgated,
the term “teacher’s contract” generally was employed, in judicial decisions and
otherwise, to refer to the individual contracts for professional employees required under
Section 1121 of the School Code, 24 P.S. §11-1121.18
For this reason, the SRC portrays the pivotal phrase as a term of art, the
meaning of which should be confined closely according to such limited and fixed
understanding. See 1 Pa.C.S. §1903(a) (“[T]echnical words and phrases and such
others as have acquired a peculiar and appropriate meaning . . . shall be construed
according to such peculiar and appropriate meaning[.]”). Furthermore, because a
collective bargaining agreement is a contract with a union, the Commission claims that it
cannot be a “teachers’ contract.” 24 P.S. §6-693(a)(1) (emphasis added). It is the
SRC’s position that, given the importance of teacher tenure contracts as reflected in the
various statutory protections against arbitrary termination and otherwise, see, e.g., id.
18
In this respect, the Commission references, inter alia: Wilchenski v. Sch. Dist. of
Borough of Throop, 383 Pa. 394, 396, 119 A.2d 510, 512 (1956) (employing the term
“teacher’s contract” to refer to an individual employment agreement between a school
district and a teacher); Appeal of Watson, 377 Pa. 495, 500, 105 A.2d 576, 579 (1954)
(same); and McCandless Twp. v. Wylie, 375 Pa. 378, 384, 100 A.2d 590, 593 (1953)
(same). See Brief for Appellants at 33 (citing these and other cases).
Parenthetically, the term “professional employe,” as employed in Section 1121,
encompasses a range of professionals in addition to teachers. See 24 P.S. §11-
1101(1).
[J-65-2016] - 15
§11-1127 (establishing procedures governing dismissal of tenured professional
employees), it should be clear that the General Assembly merely wished to prevent
such contracts from being cancelled absent the specified procedural protections.
To the degree there is any ambiguity, the SRC invokes additional principles of
statutory construction. See generally Oliver, 608 Pa. at 394, 11 A.3d at 965 (explaining
that, in determining the meaning of ambiguous statutory language, courts may resort to
the tools of statutory construction). In terms of such considerations, the Commission
asserts that the factors concerning the “occasion and necessity for the statute,” the
“object to be obtained,” and the “former law, if any,” 1 Pa.C.S. §1921(c)(1), (4), (5), all
support its position, given that public school teachers in Pennsylvania lacked collective
bargaining rights when the Distressed School Law was promulgated.
Citing Smith v. School District of Township of Darby, 388 Pa. 301, 130 A.2d 661(1957), the SRC also asserts that the “teachers’ contract” exception to its cancellation
prerogative should be construed narrowly in its favor. See id. at 314, 130 A.2d at 668-
69 (“School authorities must be given broad discretionary powers to ensure a better
education for the children of this Commonwealth and any restrictions on the exercise of
these powers must be strictly construed on the basis that the public interest
predominates and private interests are subordinate thereto.”). Furthermore, the
Commission references the presumption, in statutory construction, that, “when a court
of last resort has construed the language used in a statute, the General Assembly in
subsequent statutes on the same subject matter intends the same construction to be
placed upon such language.” 1 Pa.C.S. §1922(4).
Additionally, the SRC contends that the Legislature, via various amendments to
the School Code, has reaffirmed its power to cancel a collective bargaining agreement
several times. In this regard, the Commission references: Act 46’s repeal of PERA
[J-65-2016] - 16
insofar as it was inconsistent with Section 693(a)(1) and 696(i), see Act 46, §28; the
2001 exemption of the SRC’s Section 693 powers from 696(k)(5)’s ban on negating
collective bargaining agreements, see 24 P.S. §6-696(k)(5); and the 2012 amendments’
focus on non-first-class school districts in curtailing the cancellation power relative to
collective bargaining agreements, see 24 P.S. §6-642-A(a)(3).
In the broadest frame, the SRC maintains that its actions have been eminently
reasonable in view of the District’s financial plight. See, e.g., Brief for Appellants at 51
(“The ability to hire enough staff, to keep the schools clean and safe, to buy books and
other school supplies and offer sports, art, music and other essential programs . . . must
take precedence over the private interests of unions and their members in retaining a
health benefits package so generous that it has become all but extinct in the
marketplace.”). Furthermore, the Commission portrays the curtailment of benefits that it
has attempted to implement as modest. Finally, the Commission reiterates that the right
to a public education is rooted in this Commonwealth’s Constitution, see Sch. Dist. of
Wilkinsburg v. Wilkinsburg Educ. Ass’n, 542 Pa. 335, 343, 667 A.2d 5, 9 (1995)
(observing that “public education in Pennsylvania is a fundamental right” (citing PA.
CONST. art. III, §14)), while stressing that “any interpretation of legislative
pronouncements relating to the public educational system must be reviewed in context
with the General Assembly’s responsibility to provide for a ‘thorough and efficient
system’ for the benefit of our youth.” Sch. Dist. of Phila. v. Twer, 498 Pa. 429, 435, 447
A.2d 222, 225 (1982) (quoting PA. CONST. art. III, §14).
The Union and its amici, for their part, acknowledge that the interests of students
are of paramount concern, but they differ with the SRC’s perspective that the
impairment of the collective bargaining process best serves such interests. See, e.g.,
Brief for Amici at 10 n.6 (characterizing collective bargaining agreements as “important
[J-65-2016] - 17
to preserve ongoing relationships and, in the case of teachers, to preserve the long-
term relationships and livelihoods of persons who are the life-blood of the principal
service public schools are meant to provide – educating students”). Throughout their
submissions, they also emphasize that the conferral of a cancellation power relative to
collective bargaining renders ensuing contracts illusory and restores the potential for
substantial unrest. See, e.g., Brief for Appellees at 52 (“The conclusion necessitated by
the SRC’s interpretation would destroy any semblance of collective bargaining, as no
agreement arrived at the negotiation table would have any enforceability.”); Brief for
Amici at 23-24 (explaining that PERA was enacted to foster stability in the public labor
relations arena). According to the Union, moreover, it already has offered substantial
concessions at the bargaining table in recognition of the District’s financial
circumstances.
As to the relevant matter of statutory construction, from the point of view of the
Union and Amici, the “teachers’ contracts” exception in Section 693(a)(1) plainly
subsumes collective bargaining agreements, which are contracts governing teachers’
employment with a school district. See Brief for Appellees at 35; accord Brief for Amici
at 10 (referring to a teachers’ contract as “a contract of some kind that covers the
employment of teachers”). Indeed, they view it as common parlance -- amidst the
general public as well as in judicial opinions -- to refer to a teachers’ collective
bargaining agreement as a teachers’ contract. See supra note 11. Furthermore, the
Union and Amici highlight Section 696(k)(4)’s apparent reference to a collective
bargaining agreement as a “contract.” See supra note 14.
Responding to the SRC’s position that the term “teachers’ contract” refers only to
individual teacher tenure contracts, the Union explains that the relevant statutes
themselves do not contain such specific term. Moreover, the Union and Amici regard it
[J-65-2016] - 18
as tangential at best that various courts may have used what they regard as an
umbrella phrase to refer to discrete examples of individual teacher’s contracts. See,
e.g., Brief for Appellees at 32 (“The mere fact that these courts used this phrase when
interpreting the Teachers’ Tenure Act and discussing individual teacher tenure contracts
has no relevance to Section 6-693(a)(1) -- an entirely different provision in the Public
School Code, enacted decades after the Teachers’ Tenure Act.”).
On this point, Amici offer the following elaboration:
Amici tend to agree with the SRC’s point (as far as it goes)
that it is unlikely that the General Assembly, when it enacted
that portion of the School Code giving distressed Districts
the ability to reject “teachers’ contracts” in 1959, thought that
term (which is more descriptive than it is a term of art)
applied to collective bargaining agreements. But that is not
because of any significant difference between teachers’
employment contracts and collective bargaining agreements
involving teachers units. Lack of conscious association of
teachers with [collective bargaining agreements] would have
stemmed simply from the scarcity, at that time, of [collective
bargaining agreements] covering teachers’ units. It would
take another 11 years before public school teachers were
granted in PERA an effective right to organize and engage in
collective bargaining. But, since that time, with teacher
[collective bargaining agreements] having become quite
prevalent, it is far more apt to associate the nontechnical
label “teachers’ contracts” with collective bargaining
agreements, as it was unlikely [that it was] the particular
form of the agreement that mattered to legislators in 1959;
rather, it would be the purpose of the agreement – any sort
of contract governing the terms and conditions of
employment of public school teachers – that would have
concerned the General Assembly in excepting this type of
contract from the ability of Districts under supervision to
“cancel contracts.”
Brief for Amici at 7-9 (footnotes omitted); accord id. at 10 (“The evil addressed by
[Section 693(a)(1)] was the need to protect teachers’ contractual employment conditions
[J-65-2016] - 19
from the broad power distressed school districts were afforded to cancel burdensome
contracts.”).
According to the Union and its amici, the SRC’s position is further undermined by
a line of judicial decisions determining that, through PERA’s conferral of collective
bargaining rights, individual employment contracts have been subsumed within and
negated by existing collective bargaining agreements to the extent there may be
inconsistencies. See Leechburg Area Sch. Dist. v. Leechburg Educ. Ass’n, 475 Pa.
413, 420, 380 A.2d 1203, 1206 (1977) (plurality); Tunkhannock Area Sch. Dist. v.
Tunkhannock Area Educ. Ass’n, 992 A.2d 956, 960 (Pa. Cmwlth. 2010). They also
maintain that Act 46 specifically restated the collective bargaining obligations of the
District and the Union, see, e.g., 24 P.S. §6-696(k) (specifying that “[c]ollective
bargaining between employes and the school district of the first class shall be
conducted in accordance with this subsection”), albeit while imposing additional
regulation upon the process, see id. See generally Brief for Amici at 14 (“Having
already set forth an extensive list of procedures and rights attaching to collective
bargaining in Subsection (k), it is unlikely the legislature would have remained silent,
had it wanted to confer this power, about the most significant right the SRC claims to
possess – to cancel the contract it had already negotiated.”). Furthermore, the Union
and its amici stress, there is nothing on the face of Act 46 that is inconsistent with
PERA’s grant of authority to public school employees to “organize, form, join or assist in
employe organizations or to engage in lawful concerted activities for the purpose of
collective bargaining or other mutual aid and protection or to bargain collectively through
representatives of their own free choice . . . .” 43 P.S. §1101.401.
The Union and Amici believe that the legislative history of relevant amendments
to the Public School Code support their position. See, e.g., Brief for Appellees at 59-60
[J-65-2016] - 20
(“The clear import of [an] exchange [on the floor of the House of Representatives] is that
Pennsylvania legislators were concerned that the [2001] amendment preserved only
teachers’ collective bargaining agreements in the District, but not collective bargaining
agreements of non-professional employees such as janitors, bus drivers and food-
service workers.”); see also supra note 15.
In terms of the 2012 amendments to the School Code, the Union and Amici urge
that there was no cause or incentive for the Legislature to alter Section 693(a)(1), since
there was no evidence that the statute had been misunderstood as pertaining to
collective bargaining agreements in the first instance. See Brief for Appellees at 38
(“[B]etween 1959, when Section 6-693(a)(1) was added to the Public School Code, and
2012, when the Legislature passed Act 141, no party had taken the position, nor had
any court ruled, that ‘teachers’ contracts’ were not ‘teachers’ collective bargaining
agreements.’”).
Having considered the respective positions presented, we agree with the Union
and its amici that the exception to the SRC’s statutory contract-cancellation power
pertaining to “teachers’ contracts” subsumes collective bargaining agreements at least
insofar as they pertain to teachers. See 24 P.S. §6-693(a)(1). Such association should
come as no surprise, since these agreements serve, essentially, as master contracts
governing the terms and conditions for such professionals’ engagement. See generally
Skeim v. Indep. Sch. Dist. No. 115, 234 N.W.2d 806, 810 (Minn. 1975) (referring to a
collective bargaining agreement as a “master teachers’ contract”); 20 W ILLISTON ON
CONTRACTS § 55:19 (4th ed. 2010) (depicting collective bargaining agreements as a
form of master contract). This broader connotation of the phrase “teachers’ contract” is
[J-65-2016] - 21
reflected both in common parlance,19 as well as in numerous judicial decisions, see,
e.g., supra note 11.20
Certainly, as the parties and Amici have discussed at length, members of the
General Assembly may not have focused upon collective bargaining agreements at the
time the Distressed School Law was enacted, given that there was no right at that time
to collective bargaining in the public sector. Nevertheless, the clear intent was to
protect the core relationship establishing terms and conditions for teachers’
employment, as was then memorialized via teacher tenure contracts. Accordingly, upon
the advent of public-sector collective bargaining, it is entirely fitting that the term
“teachers’ contract” has been otherwise applied to collective bargaining agreements –
which now embody the essential professional relationship. In the circumstances, we do
not view our task, in interpreting broad statutory language, as “the hopeless one of
ascertaining what the legislators who passed the law would have decided had they
reconvened to consider [this] particular case[].” Beecham v. United States, 511 U.S.
19For example, with great frequency the news media refers to collective bargaining
agreements involving teachers as “teachers’ contracts” (with and without the possessive
punctuation). See, e.g., Dustin Luca, Salem Teachers’ Contract Has New Perks, SALEM
NEWS, July 4, 2016; David Mekeel, I-LEAD Releases Information on Budget, Teachers
Contract, READING EAGLE, June 24, 2016; Denise M. Bonilla, Lindenhurst School Board
Approves Teachers Contract, NEWSDAY, May 26, 2016; Robert McCoppin, Debate
Intensifies Over 10-Year Teachers Contract in Palatine, CHI. TRIB., May 17, 2016.
20
In this respect, we reject the SRC’s position that the presumption pertaining to
previously-construed terms applies. See 1 Pa.C.S. §1922(4). This Court did not
“construe” the term “teachers’ contracts” in any of the cases cited by the Commission.
See supra note 18. Rather, the language was employed, without specific focus or
definition, as a straightforward reference to the subject matter at hand. See, e.g.,
Wilchenski, 383 Pa. at 396, 119 A.2d at 512. No attempt was made to delineate
whether or not the language might have had broader connotations.
[J-65-2016] - 22
368, 374, 114 S. Ct. 1669, 1672 (1994). Rather, we take the more practicable approach
of adhering to the ordinary meaning of the enacted text. See id.In terms of the policy considerations involved, we agree with the Commission
that the remedial nature of Sections 693 and 696 of the School Code is very important,
but we also find there to be a countervailing policy, in that PERA was enacted to
mitigate the impingements on government operations caused by labor strife. See
generally PLRB v. State College Area Sch. Dist., 461 Pa. 494, 502, 337 A.2d 262, 266
(1975) (explaining that the pre-PERA circumstances -- in which public employees were
prohibited from striking and lacked the right to bargain collectively -- fostered a “chaotic
climate that resulted from this obviously intolerable situation” and heralded the creation
of a government commission which found a “need for collective bargaining to restore
harmony in the public sector and to eliminate the numerous illegal strikes and the
widespread labor unrest”). Indeed, the Union and Amici aptly explain that investiture in
the SRC of a unilateral right of cancellation, particularly while depriving employees of
the right to strike, see 24 P.S. §6-696(l), so diminishes the Union’s position that the term
“bargaining” would no longer seem to be a fair depiction of ensuing discussions
between the parties.21
Nothing else in the SRC’s presentation persuades us that we should depart from
the interpretation of “teachers’ contracts” as subsuming collective bargaining
agreements involving teachers. See generally Karoly v. Mancuso, 619 Pa. 486, 510-11,
65 A.3d 301, 316 (2013) (“As a general rule, the best indication of the General
21
Along these lines, we also agree with the Union and Amici that a unilateral
cancellation right is in tension with Section 696(k)’s specific prescription for collective
bargaining. In this regard and otherwise, we do realize that Section 693(a)(1)’s focus
on “teachers’” contracts, as opposed to contracts involving school employees at large,
fosters somewhat of a disconnect.
[J-65-2016] - 23
Assembly’s intent in enacting a statute may be found in its plain language.” (citation
omitted)). Along these lines, we agree with the Union and Amici that the repeal of
PERA in the present context was a limited one that did not extend to the present
circumstances on account of the teachers’-contracts exception to cancellation powers,
see Act 46, §28; the 2001 exemption of the SRC’s Section 693 powers from Section
696(k)(5)’s ban on negating collective bargaining agreements appears to pertain to
other aspects of Section 693;22 and the withholding of cancellation power for collective
bargaining agreements from non-first-class school districts in the 2012 amendments is
not mutually exclusive with the understanding that such power already had been
withheld from special boards of control relative to teachers per Section 693(a)(1) of the
School Code and, derivatively, school reform commissions under Section 696(i).
We hold, at least insofar as teachers are concerned, that collective bargaining
agreements are “teachers’ contracts” which are excepted from a school reform
commission’s cancellation powers.
The order of the Commonwealth Court is affirmed, albeit on different grounds.
Justices Baer, Todd, Donohue, Dougherty and Wecht join the opinion.
22
For example, Section 693(a)(5) empowers a school reform commission to dispense
with the services of such nonprofessional employees as are unnecessary for the
economic operation of the school system. See 24 P.S. §6-693(a)(5).
[J-65-2016] - 24