Blackhawk S.D. v. PSERB

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Blackhawk School District, :
Petitioner :
:
v. :
:
Public School Employees’ :
Retirement Board, : No. 388 C.D. 2021
Respondent : Argued: October 18, 2021
BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: November 19, 2021
Blackhawk School District (School District) petitions this Court for
review of the Public School Employees’ Retirement Board’s (Board) March 12,
2021 opinion and order1 that sustained the Public School Employees’ Retirement
System’s (PSERS)2 preliminary objection that the Board lacks subject matter
jurisdiction over the School District’s appeal (First Preliminary Objection), denied
the School District’s request to classify school psychologist Gary D. Koch, Ph.D.
(Dr. Koch) as an independent contractor for the 2010-11 through 2016-17 school
years, and dismissed the School District’s appeal. The School District presents three
issues for this Court’s review: (1) whether the Board erred by concluding that the
1
Although the Board’s opinion and order was dated March 5, 2021, it was mailed on March
12, 2021. See Amended Reproduced Record at 206a-207a, 219a.
2
“PSERS is an independent administrative board of the Commonwealth [of Pennsylvania
(Commonwealth)] that manages the pension retirement system for Pennsylvania’s public school
employees. The [Board] is the governing body of PSERS.” Pa. Sch. Bds. Ass’n, Inc. v. Pub. Sch.
Emps.’ Ret. Bd., 863 A.2d 432, 434 (Pa. 2004).
Public School Code of 1949 (School Code)3 requires school districts to employ
school psychologists rather than retaining them as independent contractors; (2)
whether the Board erred by concluding that the Public School Employees’
Retirement Code (Retirement Code) (also known as Act 63 of 2004, or Act 2004-
63),4 does not authorize the Board to determine whether a school psychologist is an
employee or an independent contractor; and (3) whether the facts before the Board
were sufficient to determine that Dr. Koch was an independent contractor for the
2010-11 through 2016-17 school years. After review, this Court vacates the Board’s
order and remands this matter to the Board for further proceedings in accordance
with this Opinion.
Background
Dr. Koch provided psychologist services to the School District from
2010 through the fall of the 2016-17 school year. See Amended Reproduced Record
(R.R.) at 34a, 111a. For each of the subject school years, the School District and Dr.
Koch entered into a Blackhawk School District Psychologist Employment Contract
(Prior Employment Contracts), wherein Dr. Koch agreed to provide services to the
School District on a per diem basis, on days the School District’s Superintendent
(Superintendent) designated. See R.R. at 17a-30a. Dr. Koch simultaneously
provided the same services for other school districts, including Western Beaver
School District. See R.R. at 3a.
On January 17, 2017, Dr. Koch executed an Employment Agreement
(2017 Agreement) under which Dr. Koch accepted employment as School
Psychologist with the School District from January 3, 2017 through June 30, 2020,
subject to the School District’s Board of Directors’ and the Superintendent’s
3
Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §§ 1-101 - 27-2702.
4
24 Pa.C.S. §§ 8101-8547.
2
authority and supervision, at a salary of $70,000.00 per year, plus annual increases
and insurance benefits. See R.R. at 13a-16a. The 2017 Agreement reflects the
parties’ meeting of the minds that Dr. Koch was a School District employee eligible
for service credit as of January 3, 2017. See R.R. at 34a, 111a.
In 2019, Dr. Koch requested that PSERS grant him service credit under
the Retirement Code as a School District employee for the 2010-11 through 2016-
17 school years. See R.R. at 7a. By January 7, 2020 letter, PSERS’ Executive
Director informed Dr. Koch that, at its November 26, 2019 meeting, PSERS’
Executive Staff Review Committee “granted [his] request based on the language of
the signed [Prior] [E]mployment [C]ontracts under which [he] provided paid
services to the [] School District.” R.R. at 7a.
On February 4, 2020, the School District appealed from PSERS’
decision to the Board and requested a hearing, arguing that “[t]he contracts under
which Dr. Koch operated for the . . . 2010-11 through 2016-17 [school years]
specified that he was considered an independent contractor,” R.R. at 2a, and, “[a]s
an independent contractor, [he] was not entitled to membership in[] PSERS[,] and
the [School] District does not owe any [] salary contribution.” R.R. at 3a. The
School District relied upon the factors adopted in Zimmerman v. Public School
Employes’ Retirement Board, 522 A.2d 43 (Pa. 1987) (Zimmerman Factors)5 to
5
The Zimmerman Factors include:
Control of manner work is to be done; responsibility for result only;
terms of agreement between the parties; the nature of the work or
occupation; skill required for performance; whether one is engaged
in a distinct occupation or business; which party supplied the tools;
whether payment is by the time or by the job; whether work is part
of the regular business of the employer, and also the right to
terminate the employment at any time.
Id. at 45 (quoting Hammermill Paper Co. v. Rust Eng’g Co., 243 A.2d 389, 392 (Pa. 1968)). Under
the facts and circumstances in Zimmerman, the Pennsylvania Supreme Court held that a school
3
conclude that Dr. Koch was not a School District employee from 2010 through the
fall term of the 2016-17 school years.
On February 24, 2020, PSERS filed preliminary objections to the
School District’s appeal.6 See R.R. at 31a-106a. In its First Preliminary Objection,
PSERS declared that the School District’s appeal should be dismissed because
although the Board is authorized to interpret the Retirement Code, “[t]he Board does
not have [the] authority to grant the requested relief of altering [the] School District’s
and Dr. Koch’s relationship under the School Code, nor does it have the jurisdiction
to void or ignore provisions of the School Code.” R.R. at 37a; see also R.R. at 35a.
PSERS suggested: “The proper venue for [the] School District to challenge the
School Code’s requirement that it employ school psychologists and its employment
relationship with Dr. Koch is before a Court of Common Pleas or the Pennsylvania
Department of Education [(Department)].” R.R. at 37a. In its Second Preliminary
Objection, PSERS contended that the School District’s appeal was legally
insufficient because the School Code specifies that Dr. Koch is a School District
employee and, thus, “the School District has failed to plead any material facts that,
if proven to be true, would entitle [the] School District to relief that can be granted
by the Board.” R.R. at 38a. The School District opposed PSERS’ preliminary
objections. See R.R. at 110a-126a.
On March 11, 2020, Dr. Koch filed a petition to intervene, which the
Board granted on April 9, 2020. See R.R. at 127a-128a, 209a-210a. By May 19,
2020 order, the Board delegated its decision-making regarding PSERS’ preliminary
physician was an independent contractor rather than a school employee and, thus, he was not
eligible for PSERS membership. See id.6
Section 201.6(a) of the Board’s Regulations provides: “[PSERS] may, before filing an
answer, file preliminary objections directly with the Board. The preliminary objections will
conform to [Pennsylvania Rule of Civil Procedure (Rule)] 1028 (relating to preliminary
objections).” 22 Pa. Code § 201.6(a). Under Rule 1028(a), PSERS may object to the School
District’s appeal due to lack of subject matter jurisdiction, see Pa.R.Civ.P. 1028(a)(1), and lack of
legal sufficiency (demurrer), see Pa.R.Civ.P. 1028(a)(4).
4
objections to a hearing examiner.7 See Bd. Op. and Order at 2, 4 (R.R. at 208a,
210a). On June 15, 2020, the Board assigned a hearing examiner to issue a proposed
opinion and recommendation regarding PSERS’ preliminary objections. See R.R.
at 129a-130a. Because this matter was before the Board on preliminary objections,
no fact-finding took place. See Bd. Op. and Order at 3 (R.R. at 209a); see also Board
Br. at 8.
On August 13, 2020, the hearing examiner issued a Proposed Opinion
and Recommendation on Preliminary Objections, recommending that the Board
sustain PSERS’ First Preliminary Objection and dismiss the School District’s appeal
because “[t]he Board is without express statutory authority to change Dr. Koch’s
statutorily proscribed [sic] employment status to that of independent contractor[;
thus,] Dr. Koch is [] an employee for the school years in question[] and is subject to
mandatory [PSERS] enrollment.”8 R.R. at 142a; see also R.R. at 131a-145a.
Relevant to this appeal, the hearing examiner relied upon the following Conclusions
of Law:
5. The Board is a creature of statute which derives its
authority from the provisions of the Retirement Code,
thus, it is limited to applying and enforcing the Retirement
Code. Krill v. Pub. Sch. Emp[s.’] Ret. Bd., 713 A.2d 132,
134 (Pa. Cmwlth. 1998) . . . and Cosgrove v. State Emp[s.’]
Ret[.] B[d.], 665 A.2d 870 (Pa. Cmwlth. 1995).
6. The Board has exclusive and primary jurisdiction
regarding the interpretation of the Retirement Code and
7
Section 201.6(c) of the Board’s Regulations states: “The Board will rule directly on
preliminary objections . . . unless, by order, it delegates the matter to a hearing examiner to prepare
a proposed opinion and recommendation . . . .” 22 Pa. Code § 201.6(c).
8
Although the hearing examiner declared that sustaining the First Preliminary Objection
rendered the Second Preliminary Objection moot, he nevertheless addressed the latter, concluding
that, even if the Board had jurisdiction to overturn the statutorily prescribed nature of Dr. Koch’s
employment, the School District failed to plead material facts that, even if true, would entitle it to
the requested relief. See R.R. at 142a-143a.
5
the administration of member accounts. [See Section
8501(a) of the Retirement Code,] 24 Pa.C.S. § 8501(a).
7. Under the Retirement Code, “school employees” are
mandatory members of PSERS and, therefore, must be
enrolled and reported to PSERS. [See Sections 8102 and
8301 of the Retirement Code,] 24 Pa.C.S. §§ 8102, 8301.
8. The School Code requires that school districts, e.g., [the
School District], employ professional employees. [See
Section 1106 of the School Code,] 24 P.S. § 11-1106.
9. A “school psychologist” falls within the category of
“school counselor[,]” which is a “professional employee”
under Section 1101(1) of the School Code, 24 P.S. § 11-
1101(1). McCoy v. Lincoln Intermediate Unit No. 12, 391
A.2d 1119, 1122 n.5 (Pa. Cmwlth. 1978) . . . .
10. The Board is bound by the requirements of the
Retirement Code and [the] School Code; the Board has no
jurisdiction to hear and determine whether Dr. Koch is an
independent contractor when the Retirement Code and
[the] School Code mandate that he be classified as an
employee: 24 Pa.C.S. §§ 8102, 8301; 24 P.S. § 11-1106;
24 P.S. § 11-1101(1).
Proposed Opinion and Recommendation at 5-6 (R.R. at 137a-138a). The parties
were given 30 days to file briefs on exceptions to the hearing examiner’s proposed
opinion and recommendation. See R.R. at 131a.
On September 11, 2020, the School District filed a Brief on Exceptions
to the Proposed Opinion and Recommendation as to Preliminary Objections and
Proposed Findings of Fact and Conclusions of Law (Exceptions). See R.R. at 146a-
201a. The School District specifically excepted to the hearing examiner’s Proposed
Conclusions of Law 8, 9, and 10. The School District argued that Proposed
Conclusion of Law 8 was irrelevant because “it is the [School] District’s position
that Dr. Koch is not a ‘professional employee’ and[,] therefore, Section 1106 of the
School Code is not appropriately relied upon.” Exceptions at 5 (R.R. at 151a). The
School District excepted to Proposed Conclusion of Law 9 on the basis that “[t]he
6
School Code does not require that ‘school psychologists’ be considered ‘professional
employees’ for purposes of Section 1106 of the School Code.” Id. The School
District excepted to Proposed Conclusion of Law 10, stating that “[b]ecause there is
no requirement under the School Code or the Retirement Code that ‘school
psychologists’ be considered ‘professional employees[],[’] the Board has the
authority to determine whether Dr. Koch is an independent contractor[,]” id., and
did so in Disston v. Public School Employees’ Retirement Board (Pa. Cmwlth. No.
25 C.D. 2008, filed Jan. 8, 2009), by applying the Zimmerman Factors. See id. at 9
(R.R. at 155a). On October 1, 2020, PSERS filed a letter brief in lieu of a formal
brief opposing the School District’s Exceptions. See R.R. at 202a-205a.
On March 12, 2021, the Board sustained PSERS’ First Preliminary
Objection, denied PSERS’ request to have Dr. Koch classified as an independent
contractor for the 2010-11 through 2016-17 school years, and dismissed the School
District’s appeal. See R.R. at 206a-219a. The Board’s decision was based on the
following Conclusions of Law:
4. Subject matter jurisdiction is the competency of a
tribunal to hear and determine controversies of the nature
of the matter involved, and venue is the right of a party to
have an action brought in a particular location. See
McGinley v. Scott, 164 A.2d 424, 427-28 (Pa. 1960).
....
8. The Board has exclusive and primary jurisdiction
regarding the interpretation and application of the
Retirement Code and the administration of member
accounts, subject to appellate judicial review. See 24
Pa.C.S. § 8501(a); see also 22 Pa. Code § 201.4a.
9. The Board is a creature of statute that derives its
authority from the provisions of the Retirement Code and,
thus, it is limited to applying and enforcing the Retirement
Code. See Krill . . . and Cosgrove . . . .
7
10. The Board has no authority (equitable or otherwise) to
provide a right that the Retirement Code does not bestow.
See, e.g., Marinucci v. State Emp[s.’] Ret. Sys., 863 A.2d
43, 47 (Pa. Cmwlth. 2004).[9]
11. Statutes must be construed according to their plain
meaning and in such a manner as to give effect to all
provisions. [See Section 1921(a) of the Statutory
Construction Act of 1972 (Statutory Construction Act),] 1
Pa.C.S. § 1921(a).
12. Pursuant to the Retirement Code, membership in
PSERS is mandatory for all “school employees” with a
few, narrow exceptions. See 24 Pa.C.S. §§ 8102 (def.
“school employee”), 8301.
13. A “school employee” is a person “engaged in work
relating to a public school for any governmental entity and
for which work he is receiving regular remuneration as . . .
employee excluding, however, any independent
contractor[.]” 24 Pa.C.S. § 8102.
14. School districts are employers, school entities, and
public schools under the Retirement Code. See 24 Pa.C.S.
§ 8102.
15. PSERS credits a member with service credit for
periods when the member is a “school employee” and
making contributions to PSERS. 24 Pa.C.S. §§ 8102
(“credited service,” “school employee,” and “school
service”), 8302.
16. The School Code mandates that school districts
employ “professional employees.” See 24 P.S. § 11-1106.
17. A “school psychologist” is a “professional employe”
under the School Code. See 24 P.S. §§ 11-1106, 11-
1101(1)[; see also former Section 1123(o)(6) of the School
Code, formerly, 24 P.S. §] 11-1123(o)(6),[10] [and Section
9
“[C]ases interpreting provisions of the State Employees’ Retirement Code, 71 Pa.C.S. §§
5101-5956, are equally applicable in deciding issues arising under similar . . . provisions of the
[Retirement] Code.” Krill, 713 A.2d at 134 n.3.
10
Former Section 1123 of the School Code expired on June 20, 2021, pursuant to Section
1 of the Act of March 27, 2020, P.L. 62. However, it was still in effect when PSERS’ Executive
Staff Review Committee and the Board rendered their decisions.
8
1142 of the School Code, 24 P.S. §] 11-1142; [Section
49.1 of the Department’s Regulations,] 22 Pa. Code §
49.1; see McCoy . . . (citing Charleroi Area Sch. Dist. v.
Sec[’]y of Educ[.], 334 A.2d 785, 786 (Pa. Cmwlth.
1975)); see generally Cherry v. Pa. Higher Educ.
Assistance Agency, 642 A.2d 463, 466 ([Pa.] 1994).
18. “Professional employes,” pursuant to the School Code,
are “school employees” under the Retirement Code. See
24 P.S. §§ 11-1101, 11-1106; 24 Pa.C.S. § 8102 (“school
employee”).
19. The Board does not have subject matter jurisdiction to
determine whether Dr. Koch is an independent contractor,
because the School Code mandates that he be classified as
a[] “professional employee.” See 24 Pa.C.S. §§ 8102,
8301; 24 P.S. §[§] 11-1106, 11-1101(1), 11-1123(o)(6),
11-1142; 22 Pa. Code § 49.1; see also McCoy[;] . . .
Charleroi Area Sch. Dist. . . . ; see generally Cherry . . . .
Bd. Op. and Order at 4-7 (R.R. at 210a-213a). The Board reasoned that, since the
School Code dictates that school psychologists are school employees and the Board
lacks authority under the Retirement Code to redefine that relationship using the
Zimmerman Factors, Dr. Koch rendered his services to the School District as a
school employee for the 2010-11 through 2016-17 school years and, thus, was
eligible for PSERS credit. See Bd. Op. and Order at 12 (R.R. at 218a). The School
District appealed to this Court.11 Dr. Koch filed a notice of intervention.
11
This Court’s appellate review of the Board’s order sustaining preliminary objections and
dismissing an appeal “is limited to determining whether the [Board] abused its discretion or
committed an error of law.” Podolak v. Tobyhanna Twp. Bd. of Supervisors, 37 A.3d 1283, 1286-
87 (Pa. Cmwlth. 2012); see also Allen v. Pub. Sch. Emps.’ Ret. Bd., 848 A.2d 1031 (Pa. Cmwlth.
2004), as amended (May 5, 2004). Moreover,
[i]n reviewing preliminary objections, all well[-]pleaded relevant
and material facts are to be considered as true, and preliminary
objections shall only be sustained when they are free and clear from
doubt. Such review raises a question of law; thus, our standard of
review is de novo and our scope of review is plenary.
Podolak, 37 A.3d at 1287; see also Baillie v. Pub. Sch. Emps.’ Ret. Bd., 993 A.2d 944 (Pa.
Cmwlth. 2010).
9
Discussion
Initially, this appeal requires interpretation of the Retirement Code and
the School Code; thus, this Court’s analysis is guided by the Statutory Construction
Act. Pursuant to Section 1921(a) of the Statutory Construction Act, this Court’s
objective “is to ascertain and effectuate the intention of the General Assembly.” 1
Pa.C.S. § 1921(a). The best indicator of the General Assembly’s intent is a statute’s
plain language. Commonwealth v. Chesapeake Energy Corp., 247 A.3d 934 (Pa.
2021). “Only if the statute is ambiguous, and not explicit, do we resort to other
means of discerning legislative intent.” Matter of Private Sale of Prop. by Millcreek
Twp. Sch. Dist., 185 A.3d 282, 291 (Pa. 2018). However,
[i]f statutory language is “clear and free from all
ambiguity, the letter of it is not to be disregarded under the
pretext of pursuing its spirit.” [1 Pa.C.S.] § 1921(b).
Thus, when the words of a statute have a plain and
unambiguous meaning, it is this meaning which is the
paramount indicator of legislative intent.
McKelvey v. Pa. Dep’t of Health, 255 A.3d 385, 398 (Pa. 2021). The Statutory
Construction Act “applies to statutes and regulations alike.” Marcellus Shale Coal.
v. Dep’t of Env’t Prot., 193 A.3d 447, 471 (Pa. Cmwlth. 2018).
Relative to the instant appeal, Section 8327(a) of the Retirement Code
mandates that each school district make payments to the Public School Employees’
Retirement Fund for its employees who are PSERS members. See 24 Pa.C.S. §
8327(a). PSERS members also receive credit toward retirement for periods when
On July 6, 2021, the Pennsylvania School Boards Association filed an amicus curiae brief
in support of the School District’s position. On September 7, 2021, the Pennsylvania State
Education Association (PSEA) filed an application for leave to file an amicus curiae brief nunc
pro tunc, which this Court granted on October 6, 2021. The PSEA represents that it “files this
brief in support of neither party, to offer its perspective on why this administrative appeal is an
unsuitable vehicle for the Court to interpret the statutory mandate that public [] school districts
employ their professional employees.” PSEA Amicus Curiae Br. at 1-2.
10
the member is a “school employee” and contributing to PSERS. See 24 Pa.C.S. §§
8102, 8302. Section 8301 of the Retirement Code provides, in relevant part:
(a) Mandatory membership.--Membership in [PSERS]
shall be mandatory as of the effective date of
employment for all school employees except the
following:
....
(2) Any school employee who is not a member
of [PSERS] and who is employed on a per diem
or hourly basis for less than 80 full-day sessions
or 500 hours in any fiscal year or annuitant who
returns to school service under the provisions of
[S]ection 8346(b) [of the Retirement Code, 24
Pa.C.S. § 8346(b)] (relating to termination of
annuities).
....
(b) Prohibited membership.--The school employees
categorized in subsection . . . (2) shall not have the right to
elect membership in the system and shall not be eligible to
participate in the plan.
24 Pa.C.S. § 8301 (text emphasis added). Section 213.1(a) of the Board’s
Regulations12 adds:
Membership shall be mandatory, as of the effective date
of school employment, for all school employees, except
the following categories:
....
(2) A person employed on a per diem or hourly
basis for less than 80 full-day sessions or 500
hours in a fiscal year. In all cases, a school district
shall report to the Board whether a school
employee annually qualifies under this [S]ection
12
Section 8502(h) of the Retirement Code authorizes the Board to “adopt and promulgate
rules and regulations for the uniform administration of [PSERS].” 24 Pa.C.S. § 8502(h).
11
based on the service rendered during a school year.
A per diem or hourly school employee employed
for less than the minimum eligibility requirements
established in this paragraph will not be eligible
for membership for that fiscal year period, but
shall, if the employee exceeds the minimums
stated in this paragraph, be a mandatory
member for that fiscal year period only.
22 Pa. Code § 213.1(a) (emphasis added). Thus, Dr. Koch was a PSERS member
entitled to service credit if he: (1) was a School District employee; and (2) worked
at least 80 days during each of the subject years.
The School District argues that, because the School Code does not
expressly include school psychologists among the necessary qualified professional
employees Section 1106 of the School Code directs that it shall employ, the Board
erroneously concluded that it lacked the authority to analyze whether Dr. Koch was
an independent contractor for the 2010-11 through 2016-17 school years.13
Section 8102 of the Retirement Code defines school employee as
“[a]ny person engaged in work relating to a public school[14] . . . and for which
work he is receiving regular remuneration[15] as an . . . employee excluding,
13
This Court has combined the School District’s first two issues for analysis purposes.
14
The School District in this case is a public school, employer, and school entity under the
Retirement Code. See 24 Pa.C.S. § 8102. The Retirement Code defines employer, in relevant part,
as “[a]ny governmental entity directly responsible for the employment and payment of the school
employee and charged with the responsibility of providing public education within this
Commonwealth[.]” Id. Public school is defined therein, in pertinent part, as “[a]ny or all classes
or schools within this Commonwealth conducted under the order and superintendence of the
[Department.]” Id. School entity is defined as “[a] school district of any class, intermediate unit
or an area vocational-technical school, as provided for under the [School Code].” Id.
15
Although the phrase regular remuneration is not defined in the Retirement Code or the
Board’s Regulations, Section 213.2(a)(3) of the Board’s Regulations intended that even employees
paid on a per diem basis are entitled to PSERS service credit. See 22 Pa. Code § 213.2(a)(3); see
also Section 215.6(a)(2) of the Board’s Regulations, 22 Pa. Code § 215.6(a)(2) (relating to
employer duty to determine per diem employee membership eligibility). Section 213.2(a) of the
Board’s Regulations states, in pertinent part:
12
however, any independent contractor or a person compensated on a fee basis.”16
24 Pa.C.S. § 8102 (emphasis added); see also Section 211.2 of the Board’s
Regulations, 22 Pa. Code § 211.2.17 The Retirement Code does not further define
school employee. Therefore, to determine whether Dr. Koch was a school employee
Computation. For the purposes of computing credited school
service, the following conditions apply:
....
(3) A per diem employee, having achieved eligibility by virtue of
being employed for at least 80 full-day sessions during the fiscal
year, shall receive a portion of credited service based on the
relationship of actual full-day sessions worked as it relates to the
180 full-day [employment] session limitation.
22 Pa. Code § 213.2(a).
16
Section 541.605(a) of the Code of Federal Regulations explains:
Administrative and professional employees may be paid on a fee
basis, rather than on a salary basis. An employee will be considered
to be paid on a “fee basis” within the meaning of these regulations
if the employee is paid an agreed sum for a single job regardless of
the time required for its completion. These payments resemble
piecework payments with the important distinction that generally a
“fee” is paid for the kind of job that is unique rather than for a series
of jobs repeated an indefinite number of times and for which
payment on an identical basis is made over and over again.
Payments based on the number of hours or days worked and not on
the accomplishment of a given single task are not considered
payments on a fee basis.
29 C.F.R. § 541.605(a). The School District paid Dr. Koch on a per diem rather than fee basis.
17
Section 211.2 of the Board’s Regulations similarly defines school employee as:
(i) A person engaged in work relating to a public school for any
governmental entity and for which work the person is receiving
regular remuneration as an officer, administrator or employee
excluding, however, any independent contractor or a person
compensated on a fee basis.
(ii) The term does not include a person who is rendering services to
the school district on a commission or fee basis, whether an elected
official or not.
22 Pa. Code § 211.2.
13
entitled to PSERS benefits, as opposed to an independent contractor who was not,
the Board looked to Section 1106 of the School Code, which states, in relevant part,
that a school district “shall employ the necessary qualified professional employes,
. . . to keep the public schools open in their respective districts[.]” 24 P.S. § 11-1106
(bold and italic emphasis added).
Although the Retirement Code does not define the term professional
employees, in Section 211.2(b) of the Board’s Regulations, the Board expressly
adopted and thereby incorporated the definition thereof in Section 1101(1) of the
School Code. See 22 Pa. Code § 211.2(b) (“The following . . . terms[] . . . have . . .
the following meanings[:] . . . “Professional employees,” as defined in [S]ection
1101 of the [School Code.]”). Section 1101(1) of the School Code defines
professional employees to “include . . . school counselors . . . .” 24 P.S. § 11-
1101(1) (bold and italic emphasis added).
The Board further reviewed caselaw in which this Court concluded that
school counselors encompass school psychologists. Specifically, in Charleroi Area
School District, wherein this Court upheld the Department’s conclusion that a school
psychologist was a professional employee, this Court observed:
Section 2(h) of the Act of August 13, 1963, P.L. 689, 24
P.S. § 1225(h) (Supp. 1974-75), amending the Act of May
29, 1931, P.L. 210, authorizes the [Department] to
prescribe the professional titles used in the public school
system. [Section 49.13(b)(2) of t]he regulations of the
State Board of Education provide that the Department []
has the responsibility for ‘[d]esignation of professional
titles for personnel[.]’[] 22 Pa. Code § 49.13(b)(2).
Pursuant to this authority, the Department has
designated three professional titles for positions that
would fall within the category of [s]chool
[c]ounselor:[18]
18
Although school guidance counselors and school psychologists have differing functions,
to the extent the School District claims that the General Assembly did not intend that school
14
Elementary School Guidance Counselor;
Secondary School Guidance Counselor; School
Psychologist.
See Policies, Proc[s.] [&] Standards for Certification of
Pro[.] Sch[.] Pers[.], P[a.] Dep[’]t of Educ[.] (1970).
Charleroi Area Sch. Dist., 334 A.2d at 786-87 (bold and italic emphasis added). In
McCoy, this Court relied on Charleroi Area School District to conclude that “a
‘[s]chool [p]sychologist’ falls within the category of ‘school counselor’ which is
a ‘professional employee’ under Section 1101(1) [of the School Code], 24 P.S. § 11-
110[1](1).”19 McCoy, 391 A.2d at 1122 n.5 (emphasis added). Significantly, the
School Code’s definition has not changed since Charleroi Area School District and
McCoy were decided, and both cases remain good law.
The Board also cited to other School Code provisions and Department
Regulations that support the Charleroi Area School District and McCoy Courts’
conclusions. Section 1142(b) of the School Code includes school psychologists
among the professional employees entitled to minimum salaries and regular
counselors included school psychologists, this Court refers to Merriam-Webster’s Dictionary,
which defines counselor as “a person who gives advice or counseling.” www.merriam-
webster.com/dictionary/counselor (last visited Nov. 15, 2021). Counseling is defined therein
to include college or career counseling, such as would be provided by school guidance
counselors, as well as “guidance of the individual by utilizing psychological methods especially
in collecting case history data, using various techniques of the personal interview, and testing
interests and aptitudes[,]” as would be used by a school psychologist. www.merriam -
webster.com/dictionary/counseling (last visited Nov. 15, 2021). Accordingly, it is reasonable
to conclude that the term school counselor could include both school guidance counselors and
school psychologists.
19
Although the McCoy Court made this pronouncement in a footnote, the conclusion was
nevertheless properly based in law, and it directly applied to McCoy, who was disputing the
method of his demotion from intermediate unit director of special education to school psychologist
in reliance on his rights as a professional employee. This Court observed in the footnote that
McCoy remained a professional employee regardless of his demotion. Accordingly, the School
District’s claim that this Court’s pronouncement was merely dicta and has no precedential value
here lacks merit. Rather, as the Board concluded, the McCoy Court’s statement “embrace[d] the
conclusion that school psychologists . . . are professional employees and, consequently, entitled to
the rights and protections provided by the School Code.” Bd. Op. and Order at 10 (R.R. at 216a).
15
incremental pay increases. See 24 P.S. § 11-1142(b). Former Section 1123(o)(6) of
the School Code, previously specified that education specialists were professional
employees. See former 24 P.S. § 11-1123(o)(6). Section 49.1 of the Department’s
Regulations defines education specialists as “[p]rofessional certified personnel
whose primary responsibility is to render professional service other than classroom
teaching, such as . . . school psychologist[s].” 22 Pa. Code § 49.1 (emphasis added).
Moreover, the Department’s Certification Staffing Policy Guidelines
(CSPGs) No. 81 currently references under the Educational Specialist Certification
heading:
A person employed in the position of school
psychologist must hold a valid Pennsylvania certificate as
a [s]chool [p]sychologist and is qualified to serve in grades
PK-12.
....
A person employed in a position as a school
psychologist is qualified to perform the following duties
and functions:
....
When a school district employs an individual in the job
title “school psychologist,” this person must be a certified
school psychologist.
Counseling performed by school psychologists shall be
primarily of a behavioral modification or psychological
nature. A certified school psychologist may not provide
services that are specifically reserved for a certified school
counselor.
R.R. at 198a-199a (emphasis added).20
20
See also
www.education.pa.gov/Educators/Certification/Staffing%20Guidelines/Pages/CSPG81.aspx (last
visited Nov. 18, 2021).
16
Finally, in Section 215.5(d)(3) of its Regulations, the Board declares:
In cases of doubt, the Board will determine whether
any person is a school employee within the meaning of
the Retirement Code. The Board will also determine
whether a person is an independent contractor or a person
compensated on a fee basis upon review of all the
circumstances surrounding the employment of the person
seeking membership in the program.
22 Pa. Code § 215.5(d)(3) (emphasis added). Despite that the Board itself enacted
Section 215.5(d)(3) of its Regulations, and it appears self-serving in this instance, in
order to have the force and effect of law, it had to be properly promulgated in
accordance “with the requirements set forth in the Commonwealth Documents
Law,[21] the Commonwealth Attorneys Act[22] and the Regulatory Review Act.[23]”
Germantown Cab Co. v. Phila. Parking Auth., 993 A.2d 933, 937 (Pa. Cmwlth.
2010), aff’d, 36 A.3d 105 (Pa. 2012). “The process by which regulations are
promulgated provides an important safeguard against the unwise or improper
exercise of discretionary administrative power and includes public notice of a
proposed rule, request for written comments, consideration of such comments, and
hearings as appropriate.”24 Marcellus Shale Coal., 193 A.3d at 476 (quoting Dep’t
21
Act of July 31, 1968, P.L. 769, as amended, 45 P.S. §§ 1102-1602,
and 45 Pa.C.S. §§ 501-907, which, collectively, are known as the
“Commonwealth Documents Law.” This was the official short title
of the 1968 enactment. See Section 101 of the Act of July 31, 1968,
P.L. 769.
Germantown Cab Co. v. Phila. Parking Auth., 993 A.2d 933, 934 n.1 (Pa. Cmwlth. 2010), aff’d,
36 A.3d 105 (Pa. 2012).
22
Act of October 15, 1980, P.L. 950, as amended, 71 P.S. §§ 732-101 - 732-506.
23
Act of June 25, 1982, P.L. 633, as amended, 71 P.S. §§ 745.1 - 745.14.
24
“A properly promulgated regulation ‘is valid and binding upon courts as a statute so long
as it is (a) adopted within the agency’s granted power, (b) issued pursuant to proper procedure,
and (c) reasonable.’” Marcellus Shale Coal., 193 A.3d at 462 (Pa. Cmwlth. 2018) (quoting Tire
Jockey Serv., Inc. v. Dep’t of Env’t Prot., 915 A.2d 1165, 1186 (Pa. 2007)). The Board’s
Regulations were adopted pursuant to the Board’s enabling act and issued pursuant to the proper
procedure. “Moreover, properly promulgated regulations[, like those in this case,] are generally
17
of Transp. v. Colonial Nissan, Inc., 691 A.2d 1005, 1009 (Pa. Cmwlth. 1997)).
Because Section 215.5(d)(3) of the Board’s Regulations was properly promulgated,
it has the force and effect of law.
Ultimately, “[t]he Board is charged with the execution and application
of the Retirement Code, and the Board’s interpretation should not be overturned
unless it is clear that such construction is erroneous.” Whalen v. Pub. Sch. Emps.’
Ret. Bd., 241 A.3d 1242, 1247 (Pa. Cmwlth. 2020), appeal granted, 253 A.3d 215(Pa. 2021) (quoting Mento v. Pub. Sch. Emps.’ Ret. Sys., 72 A.3d 809, 813 (Pa.
Cmwlth. 2013)).
Here, the Retirement Code defines professional employees to include
school counselors, see 22 Pa. Code § 211.2(b); see also 24 P.S. § 11-1101(1), and
the Board properly relied on Charleroi Area School District, McCoy, Section
1142(b) of the School Code, former Section 1123(o)(6) of the School Code, Section
49.1 of the Department’s Regulations, and Department CSPG No. 81, to conclude
that school counselors include school psychologists. Based on the foregoing
reasoning and this Court’s precedent, we agree with the Board that school
psychologists are among the professional employees referenced in Section 1106
of the School Code.
The Board went further and extrapolated that, because the School Code
states that the School District “shall employ the necessary qualified professional
employes [(i.e., school psychologists)],” 24 P.S. § 11-1106 (emphasis added), the
Board lacked the jurisdiction or authority to apply the Zimmerman Factors to assess
whether Dr. Koch was an independent contractor for the subject school years. We
disagree. This Court acknowledges that “the Board was without authority to grant
presumed to be reasonable.” Bucks Cnty. Servs., Inc. v. Phila. Parking Auth., 195 A.3d 218, 237
(Pa. 2018).
18
rights beyond those specifically set forth in the [Retirement] Code.” Allen v. Pub.
Sch. Emps.’ Ret. Bd., 848 A.2d 1031, 1033 (Pa. Cmwlth. 2004), as amended (May
5, 2004). However, the Board has not established that the School Code superseded
or otherwise limited the Board’s jurisdiction or authority under the Retirement Code
to determine whether Dr. Koch was a school employee entitled to PSERS service
credit.
Moreover, this Court is not convinced that Section 1106 of the School
Code precludes a school district from retaining a school psychologist as an
independent contractor.25 Notwithstanding, we need not reach that conclusion in
this case. Rather, this Court holds that the Board had the authority under the
Retirement Code to determine whether Dr. Koch rendered his services to the School
District for the 2010-11 through 2016-17 school years as a PSERS-eligible school
employee or an independent contractor. Accordingly, the Board erred by sustaining
PSERS’ First Preliminary Objection and dismissing the School District’s appeal.
Conclusion
Having determined that the Board had the authority under the
Retirement Code to determine whether Dr. Koch was a PSERS-eligible School
District employee under the Retirement Code for the 2010-11 through 2016-17
25
See, e.g., Disston (wherein this Court upheld the Board’s decision denying a school
counselor’s request to purchase service credit for years that she worked for an intermediate unit as
an independent contractor, despite that the General Assembly expressly declared that a school
guidance counselor is among the “necessary qualified professional employes” the [s]chool
[d]istrict “shall employ” in accordance with Section 1106 of the School Code, 24 P.S. § 11-1106).
19
school years, or an independent contractor, this Court vacates the Board’s order and
remands the matter to the Board with instructions to conduct a hearing thereon.
_________________________________
ANNE E. COVEY, Judge
20
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Blackhawk School District, :
Petitioner :
:
v. :
:
Public School Employees’ :
Retirement Board, : No. 388 C.D. 2021
Respondent :
ORDER
AND NOW, this 19th day of November, 2021, the Public School
Employees’ Retirement Board’s (Board) March 12, 2021 Order is VACATED, and
the matter is REMANDED to the Board to conduct further proceedings consistent
with this Opinion.
Jurisdiction is relinquished.
_________________________________
ANNE E. COVEY, Judge