City of Erie v. General Teamsters Local Union No. 397 (K. Kirsch)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Erie :
: No. 150 C.D. 2018
v. :
: Argued: May 14, 2020
General Teamsters Local Union :
No. 397 (Kelly Kirsch), :
Appellant :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge1
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: February 19, 2021
This matter is before the Court on remand from the Pennsylvania Supreme
Court for reconsideration on the basis of its decision in Millcreek Township School
District v. Millcreek Township, Educational Support Personnel Association, 210 A.3d
993 (Pa. 2019) (Millcreek II).
Facts and Procedural History
The following facts are garnered from the Court of Common Pleas of Erie
County’s (trial court) and arbitrator’s opinions in this matter. General Teamsters Local
1
This case was assigned to the opinion writer before Judge Brobson succeeded Judge Leavitt
as President Judge.
Union No. 397 (Union) is the collective bargaining agent representing certain Union
employees of the City of Erie (City). The City and the Union are parties to a collective
bargaining agreement (CBA), which provides for the arbitration of grievances relating
to that agreement. “Just cause” for termination is defined in Section 901 of the CBA,
(Dismissal, Layoff, Demotion, Promotion, Discipline). It provides in relevant part that
the City “may . . . dismiss the employee . . . at any time for just cause relating to
qualifications, performance, attitude, work habits or personal conduct.” (Reproduced
Record at 86a.)
Kelly Kirsch (Grievant) was employed as an operator at the City’s
wastewater treatment facility. (Arbitrator’s opinion at 2.) He began this employment
part time in April of 2004 and later became full time in September of 2009. Id.Grievant was initially terminated from his employment effective March
17, 2015, based on a poor attendance history, multiple warnings, and three days of
consecutive absences beginning on March 14, 2015. (Trial court op., March 16, 2018,
at 1-2.) These absences resulted from Grievant’s arrest and incarceration on charges
of driving under the influence and firearm possession. (Id. at 2.)
2015 Arbitration Opinion and Award
The Union thereafter filed a grievance on Grievant’s behalf. Id.Following an arbitration hearing on December 16, 2015, arbitrator Robert A. Creo
issued an opinion and award concluding that the City did not have just cause to
terminate Grievant and directing that he be reinstated to his former position with full
back pay. Id. The City filed a petition to vacate the arbitration award, but the trial
court denied the same by order dated October 14, 2016, and the City did not file a
further appeal. (Trial court op., March 16, 2018, at 2-3.)
2
2017 Arbitration Opinion and Award
On January 13, 2016, two days before the City had filed its petition to
vacate the 2015 arbitration award with the trial court, Grievant was arrested and
incarcerated on drug charges. (Trial court op., March 16, 2018, at 3.) He had not yet
returned to work at that time. Id. In February of 2016, the City made a position
available to Grievant. Id. By letter dated February 24, 2016, the City notified Grievant
that his continued absence from work and lack of an acceptable explanation for his
absence led to the City’s determination to commence another action to terminate his
employment. Id. The City afforded him the opportunity to respond and to offer any
information he believed might mitigate the situation or cause the City to reverse its
decision. Id. By correspondence dated March 9, 2016, the Union responded on
Grievant’s behalf, advised of his incarceration, and noted his inability to return to work
at that time, anticipating his release in the near future when he would then return to
work. Id.By letter dated March 21, 2016, authored by the Human Relations
Manager, Connie Cook (Cook), the City advised Grievant of his termination effective
that date, stating:
I am in receipt of the letter from the [] Union, dated March 9,
2016. This response from your representative is an
inadequate excuse, as is your reason for not reporting to work
or contacting your employer, that being your current
incarceration.
Therefore, your employment is terminated effective March
21, 2016. Any benefits to which you are entitled will be paid
out to you.
(Arbitrator’s op. at 6.) Two days later, on March 23, 2016, the Union filed a grievance
on Grievant’s behalf alleging that Grievant was unjustly terminated in accordance with
3
the just cause provisions of the parties’ CBA. Id. A new arbitrator, Marc A. Winters,
was appointed and a hearing was ultimately held on June 9, 2017.2 Id. at 2. The
arbitrator determined that the sole issue submitted for arbitration was whether the City
had “just cause” to terminate Grievant’s employment under the CBA.
At the hearing, the City presented the testimony of Cook, who testified
that the City could not hold a position open for Grievant. Id. at 6. Cook also indicated
that Grievant himself, not the Union, should have contacted the City and explained his
situation, namely his incarceration. Id. Cook stated that had Grievant contacted the
City himself, the City may have considered not terminating him and allowing him to
return to work. Id. at 7. Grievant testified on his own behalf, stating that he had never
taken, sold, or manufactured narcotics prior to the City’s filing of its petition to vacate
the 2015 arbitration award. Id. Grievant explained that subsequent to this filing, he
became depressed and felt that he had no alternative but to sell drugs to make money.
Id.
By opinion and award dated June 16, 2017, the arbitrator granted the
grievance. Addressing Cook’s testimony that the City could not hold the position for
Grievant, the arbitrator noted that the City “did not provide any evidence that would
indicate any type of burden or hardship to the City for holding his position until
Grievant’s release from jail.” Id. at 8. Turning to the actual reason for Grievant’s
termination, the arbitrator found:
2
Grievant was released from his confinement on January 23, 2017. (Arbitrator’s op. at 4.)
By that time, the trial court had denied the City’s petition to vacate the 2015 arbitration award
reinstating Grievant as said award had been confirmed and finalized. Id. On February 9, 2017, the
Union filed an unfair labor practice charge with the Pennsylvania Labor Relations Board based upon
the City’s failure to return Grievant to work or pay him back pay in accordance with the 2015
arbitration award. Id. The Union and the City later reached a settlement of this charge whereby the
City agreed to pay Grievant his back pay consistent with the 2015 award. Id.
4
The City’s entire case . . . rest[ed] on the fact that [] Grievant,
himself, did not contact the City with a plea and an
explanation but relayed the fact that he was incarcerated
through his Union, who has represented him throughout his
first termination and the arbitration case that would have him
reinstated including the City’s petition to vacate the Award.
The City wanted a response from [] Grievant, not the Union,
telling why he couldn’t come to work. In return[,] the City
would have been willing to consider his return to work after
hearing his explanation and circumstances.
Additionally, there is no language in the parties’ [CBA]
which would preclude an employee, who is incarcerated,
from having their union representative speak for them while
incarcerated. Likewise, no Employer work rule or City
ordinance was presented that would prohibit such from
occurring.
Id. at 8.
The arbitrator concluded that “the evidence presented at the hearing in
support of the charges [was] not sufficient to prove conduct which would satisfy the
elements of just cause and justify termination.” Id. at 9.
Trial Court Opinion
The City thereafter filed a petition to vacate the arbitrator’s award with
the trial court, arguing that the arbitrator misapprehended the reason for Grievant’s
termination as his failure to offer an explanation himself for his absence, rather than its
stated reason of unexcused absence from work. The City also argued, inter alia, that
the arbitrator erred in finding a right to reinstatement after incarceration; placing a
burden on it to offer evidence or justification as to why it could not hold Grievant’s
position open for 13 months; and finding that an open-ended incarceration is a valid
excuse for absence from work.
5
By opinion and order dated January 19, 2018, the trial court granted the
City’s petition to vacate and reinstated Grievant’s termination. The trial court
concluded that the City “reasonably terminated [Grievant’s] employment on March 21,
2016. The City, further, was not obligated to hold Grievant’s position open for an
extended, indefinite, open-ended period of time.” (Trial court op., January 19, 2018,
at 3.) The trial court noted that the arbitrator’s finding of no just cause for Grievant’s
termination was not supported by the record, emphasizing that Grievant’s incarceration
and the City’s inability to keep the position open indefinitely were “adequate excuses
and do satisfy the requirements of the CBA.” Id. at 4. The trial court further explained
that “Grievant’s self-imposed problems are directly within the scope and context of
Section 901 and relate to an employee’s qualifications, performance, attitude, work
habits or personal conduct. In this regard, the arbitrator failed to apply the ‘just cause’
definition as contained in the CBA.” Id.
The Union thereafter filed a notice of appeal with the trial court. In
compliance with an order from the trial court dated January 31, 2018, the Union filed
a statement of errors complained of on appeal pursuant to Rule 1925(b) of the
Pennsylvania Rules of Appellate Procedure, Pa.R.A.P. 1925(b). The Union alleged,
inter alia, that the trial court misapplied the “essence test” in reviewing the arbitrator’s
award, substituted its judgment for that of the arbitrator, ignored critical facts, and erred
in concluding that the arbitrator’s finding of an absence of just cause was unsupported
by the record. In its Pa.R.A.P. 1925(a) opinion, the trial court stated that these issues
were addressed in its January 19, 2018 opinion and did not need to be addressed further.
This Court’s Underlying Decision
By opinion and order dated January 3, 2019, this Court concluded that the
trial court did not err in granting the City’s petition to vacate the arbitrator’s award.
6
City of Erie v. General Teamsters Local Union No. 397 (Kelly Kirsch), 200 A.3d 1061(Pa. Cmwlth.), vacated and remanded, 218 A.3d 1201 (Pa. 2019).
Applying the highly deferential two-prong “essence test” to grievance
arbitration awards, Westmoreland Intermediate Unit # 7 v. Westmoreland Intermediate
Unit # 7 Classroom Assistants Educational Support Personnel Association,
PSEA/NEA, 939 A.2d 855, 863 (Pa. 2007), we first concluded that the issue of just
cause for Grievant’s termination was within the terms of the CBA executed by the City
and the Union. Addressing next whether the arbitrator’s award was rationally derived
from the CBA, we agreed with the trial court that the arbitrator’s award was not
rationally derived from the CBA because the arbitrator added a new, non-negotiated
provision into the parties’ CBA, i.e., requiring the City to hold open for an indefinite
period of time the position of a Union employee. We reasoned that an arbitrator’s
award cannot be said to draw its essence from a CBA, and consequently does not meet
the essence test, where the award changes the language therein or adds new and
additional provisions. For that proposition, we drew from our decisions in American
Federation of State, County & Municipal Employees, District Council 84 v. City of
Beaver Falls, 459 A.2d 863, 865 (Pa. Cmwlth. 1983),3 and Millcreek Township School
District v. Millcreek Township Educational Support Personnel Association, 179 A.3d
3In City of Beaver Falls, the arbitrator concluded that an employee’s discharge was not for
just cause because the notice of discipline issued by the employer was untimely as it was sent 42 days
after the incident that led to the employee’s discharge. 459 A.2d at 864. Because the CBA did not
contain any provision regarding timely notification of discipline, the common pleas court set aside
the arbitrator’s award. This Court affirmed the common pleas court’s decision noting that the
arbitrator improperly added a new time provision to the parties’ CBA. We held: “We are aware that
we must sustain the arbitrator’s award if it is based on anything that can be gleaned as the ‘essence’
of the bargaining agreement, but this does not include changing the language of the contract or adding
new and additional provisions.” Id. at 865.
7
1167, 1173 (Pa. Cmwlth. 2018) (Millcreek I), reversed, Millcreek II. We concluded
that
in sustaining the grievance and directing that Grievant be
reinstated to his former position with all attendant rights and
privileges, the [a]rbitrator relied heavily on the fact that
“[t]here was no evidence or justification given as to why the
City could not hold [] Grievant’s position.” (Arbitrator’s op.
at 9.) However, there is no provision in the parties’ CBA
obligating the City to hold a position open and allow a Union
employee to return to his position after a lengthy and
indefinite absence due to incarceration. As the City states in
its brief, “The [a]rbitrator essentially added to the CBA a
right possessed by a union employee to reinstatement despite
the employee’s indefinite unavailability.” (City’s Brief at 9.)
In other words, the [a]rbitrator went outside the terms of the
CBA to find that an open-ended period of incarceration
constituted a valid excuse for an employee’s absence.
Similar to [this Court’s decision in [Millcreek I] and City of
Beaver Falls, the [a]rbitrator added a new provision to the
CBA, one that was not bargained for or agreed to by the
parties. Hence, the [a]rbitrator’s award directing Grievant’s
reinstatement was neither rationally derived from, nor drew
its essence from, the CBA. Thus, the trial court did not err
in granting the City’s petition to vacate this award.
Accordingly, the trial court’s order is affirmed.
City of Erie, 200 A.3d at 1067.
Remand
On January 17, 2019, the Union petitioned the Supreme Court for
allowance of appeal, arguing that we usurped the role of the arbitrator, ignored the
termination letter, and determined that a reason for Grievant’s discharge, which was
not originally stated for his discharge, justified the termination of his employment. On
July 17, 2019, the Supreme Court reversed our decision in Millcreek I. By order dated
8
October 29, 2019, the Supreme Court vacated our January 3, 2019 order and remanded
for consideration of its decision in Millcreek II.
Analysis
Because we have been directed to reconsider our decision in the instant
case in light of the Supreme Court’s decision in Millcreek II, we begin with an analysis
of that case.
In Millcreek II, a school district was party to a CBA with a union
representing a bargaining unit consisting solely of custodians for the school district’s
properties. The CBA provided that “[n]o work of the bargaining unit shall be
subcontracted for the life of the CBA.” Millcreek II, 210 A.3d at 996. During
negotiations for a successor agreement, the school district submitted a proposal that
included the elimination of the existing “no subcontracting” provision. Id. The union
rejected the proposal. Id. A month later, while negotiations were still ongoing, the
school district issued a request for proposals (RFP) for the provision of custodial
services. Id.
Upon learning that the school district had issued an RFP to subcontract
the bargaining unit’s work, the union filed a grievance contesting the RFP. Id. at 997.
The grievance eventually proceeded to arbitration, where an arbitrator determined the
school district violated the parties’ CBA. Id. at 998. Noting that the school district had
not entered into a subcontract with the successful bidder, the arbitrator determined that
the question of whether the school district’s actions constituted subcontracting fell
within the confines of the CBA. Id. at 999. Relying on witness testimony and the
parties’ bargaining history to inform his interpretation of the CBA, the arbitrator
concluded subcontracting began when the school district decided to pursue outside
contracting options, and that the school district’s actions violated the CBA. Id. The
9
school district filed a motion to vacate the award, which was rejected by the trial court.
Id. However, this Court reversed the trial court’s decision, prompting an appeal.
In reversing our decision in Millcreek I, the Supreme Court concluded that
we erred in substituting our judgment for that of the arbitrator, who was authorized to
make findings of fact and interpret undefined terms in the CBA. Millcreek II, 210 A.3d
at 1006. The arbitrator had found that the district issued an RFP on subcontracting
custodial services as a bargaining tactic in its effort to eliminate the parties’ no
subcontracting provision. Id. at 1006. The Supreme Court explained that, when
reviewing the propriety of the award, a court is required to rely on the arbitrator’s
findings of fact, including his determination that the parties’ no contracting provision
was intended to prohibit the process of subcontracting. Id. at 1006, 1014. The Supreme
Court further explained that the arbitrator’s interpretation and resulting award reflected
a reading of the CBA “that was informed by his understanding of the parties’ history
and the context.” Id. at 1006. Accordingly, the Supreme Court concluded the award
was rationally derived from the parties’ CBA, and found that this Court had
erred in substituting its own interpretation of the contract for
the arbitrator’s interpretation where the latter rationally
derived from the [CBA]. It erred further in concluding that
the arbitrator’s award violated a dominant public policy.
Under the highly deferential essence test and its
exceptionally narrow public policy exception, when
reviewing the propriety of the arbitration award, the
Commonwealth Court was required to rely on the arbitrator’s
Findings of Fact, including his view that the parties intended
to prohibit the process of subcontracting. Because the
Commonwealth Court did not adhere to this standard, we
reverse.
Id. at 1013.
10
While Millcreek II did not alter the highly deferential essence test in any
significant way, an important takeaway for purposes of this appeal is the Supreme
Court’s emphasis of our obligation to rely on the arbitrator’s findings of fact, including
the meaning of the CBA that was informed by his understanding of the parties’ history
and the context.
In our original opinion, relying on the language in Millcreek I and City of
Beaver Falls, we noted that an arbitration award must be within the ambit of the CBA,
and because the arbitrator’s decision to require the City to hold Grievant’s position
open while he served time in jail for a drug conviction was not a term of the CBA, we
held the arbitrator added a non-negotiated provision to the CBA. However, the
Supreme Court made clear in Millcreek II that reliance must be given to the arbitrator’s
findings of fact. Here, the arbitrator found the City had an obligation under the CBA
to hold Grievant’s job open until he was released from jail, and concluded that Grievant
was fired because he failed to personally call off of work. The City’s unwillingness
to keep Grievant’s job open while he was incarcerated was not identified in the March
21, 2016 termination letter as a reason for Grievant’s discharge. Consequently, it was
not considered by the arbitrator in his “just cause” analysis. Rather, it was a remark
made by the City’s witness to rationalize, in hindsight, Grievant’s termination.
Although the arbitrator briefly addressed this testimony, he did not find just cause
lacking based on the City’s failure to justify why it could not hold Grievant’s position
open.
Instead, the arbitrator found that Grievant was discharged because of his
inadequate response to the return to work notice. The arbitrator found that the reason
the City discharged Grievant was because he failed to personally call off work while
he was incarcerated, and instead had his Union representative report off for him. The
11
arbitrator gleaned this from the City’s March 21, 2016 termination letter, and Cook’s
testimony. The only question before the arbitrator was whether Grievant’s failure to
personally call off work constituted “just cause” under the CBA. Based upon the
evidence submitted, the arbitrator found that it was not. Specifically, the arbitrator
found that there was no language in the parties’ CBA that precludes an employee, who
is incarcerated, from having his union representative speak for him while incarcerated.
He concluded the parties did not intend that City employees could be discharged if they
do not personally report off work.
With our focus redirected to the factual findings of the arbitrator as to the
reasons for Grievant’s termination, and his interpretation of the CBA, we conclude that
the arbitrator’s award was rationally derived from the CBA.
Accordingly, the January 19, 2018 order of the trial court is reversed.
________________________________
PATRICIA A. McCULLOUGH, Judge
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Erie :
: No. 150 C.D. 2018
v. :
:
General Teamsters Local Union :
No. 397 (Kelly Kirsch), :
Appellant :
ORDER
AND NOW, this 19th day of February, 2021, the January 19, 2018 order
of the Court of Common Pleas of Erie County is hereby REVERSED.
________________________________
PATRICIA A. McCULLOUGH, Judge