PASSHE v. APSCUF

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania State System of :
Higher Education, :
Petitioner :
:
v. : No. 154 C.D. 2023
: Argued: September 11, 2023
Association of Pennsylvania State :
College and University Faculties, :
Respondent :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE MARY HANNAH LEAVITT, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
PRESIDENT JUDGE COHN JUBELIRER FILED: September 29, 2023
Before the Court is the Petition for Review (Petition) of the January 23, 2023
Arbitration Opinion and Award (Award) filed by Petitioner Pennsylvania State
System of Higher Education (PASSHE), which: sustained the grievance filed by
Respondent Association of Pennsylvania State College and University Faculties
(APSCUF) on behalf of faculty members who had been retrenched (laid off) by
PASSHE universities at the end of the 2021 and 2022 academic years (AY) (the
Grievance); ordered the parties to engage in additional “meet and discuss” (meet and
discuss) pertaining to possible future retrenchments; and ordered reinstatement and
backpay for “improperly retrenched” faculty members. At issue before the
Arbitrator was whether PASSHE had violated Article 29 of the parties’ Collective
Bargaining Agreement (CBA) when it failed to meet and discuss in good faith prior
to and following PASSHE Chancellor Daniel Greenstein’s (Chancellor Greenstein)
issuance of a mandate to reduce the faculty workforce and, if so, what appropriate
remedy should be awarded. Presently, PASSHE contends that the portion of the
Award ordering reinstatement of retrenched faculty members should be reversed as
it is not rationally derived from the language of Subsection R of Article 29 (Article
29.R) of the CBA, which limits an arbitrator’s remedy upon finding a violation of
the CBA’s meet and discuss provisions to ordering additional meet and discuss
between the parties. Applying the applicable and deferential standard of review
related to arbitration awards, we conclude that portion of the Award finding that
PASSHE violated Article 29 of the CBA when it failed to meet and discuss in good
faith and ordering immediate additional meet and discuss to discuss future possible
retrenchments scheduled for the end the 2023 and 2024 school years and beyond,
draws its essence from the CBA. However, because we further find that portion of
the Award ordering reinstatement with full back pay, benefits, and seniority of those
faculty members who were retrenched at the end of the 2021 or 2022 school years
as a remedy for a meet and discuss violation does not draw its essence from the CBA,
we affirm in part, reverse in part, and remand for further proceedings.
2
I. BACKGROUND1
A. The CBA
PASSHE administers the Commonwealth-wide system of public universities,
and APSCUF is a labor union representing faculty at those universities. For decades,
APSCUF and PASSHE have been parties to CBAs pertaining to the faculty
employed at all State System universities. The parties’ CBA at issue here was
effective from July 1, 2019, through June 30, 2023. (Joint Exhibit 1, Reproduced
Record (R.R.) at 1294a-1495a.) The CBA recognizes that the decision to retrench,
or lay off, faculty is a managerial prerogative of PASSHE universities.
Article 10.B2 of the CBA incorporates the management rights provision of
Section 702 of the Pennsylvania Employe Relations Act (PERA), 43 P.S.
§ 1101.702,3 which excuses employers from bargaining over “matters of inherent
1
Because this is an appeal from an arbitration award under the Pennsylvania Employe
Relations Act (PERA), sometimes referred to as Act 195, Act of July 23, 1970, P.L. 563, No. 195,
43 P.S. §§ 1101.101-1101.2301, the facts are derived from the Award. Rose Tree Media
Secretaries & Educ. Support Pers. Ass’n v. Rose Tree Media Sch. Dist., 136 A.3d 1069, 1078-
1079 (Pa. Cmwlth. 2016).
2
Stating:
As provided by [PERA] (Section 702), matters of inherent managerial policy are
reserved exclusively to [PASSHE]. These “include but shall not be limited to such
areas of discretion or policy as the functions and programs of the public employer
[PASSHE], standards of services, its overall budget, utilization of technology, the
organizational structure[,] and selection and direction of personnel.”
(R.R. at 1319a.)
3
Entitled “Matters not subject to bargaining,” this provision states:
Public employers shall not be required to bargain over matters of inherent
managerial policy, which shall include but shall not be limited to such areas of
discretion or policy as the functions and programs of the public employer, standards
of services, its overall budget, utilization of technology the organizational structure
and selection and direction of personnel. Public employers, however, shall be
(Footnote continued on next page…)
3
managerial policy,” but requires management to meet and discuss regarding such
matters if they affect wages, hours, or conditions of employment. (R.R. at 1319a.)
Article 29 of the CBA addresses retrenchment. Specifically, Article 29.A.2 of the
CBA provides, in relevant part:
[PASSHE] shall meet and discuss with APSCUF or its designee
regarding changes in finances, program curtailment, elimination of
courses, or the elimination of duties or services provided by FACULTY
whose basic responsibilities lie outside the classroom, which may lead
to retrenchment, and thereby impact wages, hours[,] and terms and
conditions of employment, as required by Section 702 of [PERA]. In
connection with such duty to meet and discuss, accurate information,
statistics[,] or financial data related to any such proposed change shall
be made available to both [s]tate and [l]ocal APSCUF as well as to the
affected University and [PASSHE], so that all parties are prepared to
engage in a discussion of the relevant issues.
(Id. at 1400a.) In addition, Article 29.N.1 states:
Nothing contained within this Article shall be construed as requiring a
University to retain more ACADEMIC FACULTY MEMBERS[4] in a
department or program than the President deems to be needed in that
department or unit.
required to meet and discuss on policy matters affecting wages, hours and terms
and conditions of employment as well as the impact thereon upon request by public
employe representatives.
43 P.S. § 1101.702.
4
The Preamble of the CBA defines “Academic Faculty” as
[t]he bargaining unit consisting of department chairpersons, full-time teaching
faculty including librarians with faculty status, part-time teaching faculty, librarians
without faculty status and faculty members whose basic responsibilities lie outside
of the classroom setting who have, by certification of the Pennsylvania Labor
Relations Board (PLRB), been designated as ACADEMIC FACULTY (PERA-R-
775-C).
(R.R. at 1298a.)
4
(Id. at 1405a.) At issue herein, Article 29.R of the CBA addresses the scope of an
arbitrator’s remedies and provides:
If an arbitrator should find that the meet and discuss requirements of
this Article have been violated by management, the arbitrator’s remedy
shall be limited to ordering additional meet and discuss between the
parties, and the arbitrator may not insert themself into that process. If
an arbitrator should find that a FACULTY MEMBER was improperly
retrenched, the arbitrator’s remedy shall be limited to determining
whether or not reinstatement is appropriate and whether or not full or
partial back pay, seniority[,] and fringe benefits should be awarded.
(Id. at 1406a.)
B. The Grievance
APSCUF filed the Grievance on September 8, 2020. (Id. at 1498a.) The
Grievance states that on April 13, 2020, for financial reasons and in an effort to
address the effects of the COVID-19 pandemic on system funding, Chancellor
Greenstein emailed officers at PASSHE universities and instructed them to
implement balanced operating budgets to reduce student/faculty ratios by the 2021-
22 AY to match the ratio for each university that existed in the 2010-11 AY. (Id. at
1500a.) APSCUF asserted, inter alia, that by directing this staffing reduction, which
would necessarily require retrenchment of faculty, PASSHE violated the meet and
discuss provision of Article 29 of the CBA. (Id.) As remedies, APSCUF sought
both additional meet and discuss and reinstatement with benefits for employees
affected by PASSHE’s failure to meet and discuss the retrenchment prior to ordering
the reduced ratios as required under Article 29. (Id.)
5
C. The Arbitrator’s Decision
The Arbitrator defined the issue to be decided as whether “[PASSHE]
violate[d] the [CBA], Article 29, when it failed to meet and discuss in good faith
before and after [] Chancellor [Greenstein] issued a mandate to reduce the faculty
workforce [and] [i]f so, what shall be the remedy[.]” (Award at 1.)
The Arbitrator held hearings over the course of 8 days which spanned 9
months, following which she issued the 39-page Award on January 23, 2023,
sustaining APSCUF’s Grievance. The Arbitrator summarized the history leading to
the retrenchment of faculty as follows. Prior to the COVID-19 pandemic in October
2019, during which time the parties had been engaged in labor negotiations over the
CBA, the Office of the Chancellor issued a memo seeking to “interpret and clarify
the policy on Financial Sustainability for State System Universities” but made no
mention of a plan to issue retrenchment letters. (Award at 15-16.) By November
2019, adverse financial health ratings had been assigned to approximately 10 of the
14 state universities. In December 2019, the parties executed the current version of
the CBA,5 at which time they discussed concerns about the system’s financial
stability, but they did not discuss or propose retrenchment to address the problem.
(Id. at 12-17.) Each university was directed to create a financial sustainability plan
by January 2020, and despite their knowledge of the severity of the financial
situation, none of the universities proposed retrenchment as a cost-saving measure
at that time. (Id. at 17-18.) Upon review of the universities’ respective plans,
Chancellor Greenstein issued a February 13, 2020 memorandum to PASSHE’s
5
The parties’ prior CBA had expired on June 30, 2018, and, after negotiating a one-year
extension, they executed the current CBA on December 11, 2019, which covered the period of
July 1, 2019, to June 30, 2023. (Award at 12.)
6
Executive Leadership Group (ELG).6 In the memorandum, Chancellor Greenstein
indicated that “challenges were already severe” and “unprecedented measures”
would need to be taken. (Id. at 19.). He suggested “several immediate actions” to
avoid the need for retrenchment and encouraged universities to consult with unions
to develop further financial plans. (Id. at 18, 20.) However, Chancellor Greenstein
failed to share the decisions, discussions, or recommendations related to these
adverse financial ratings with APSCUF. (Id. at 22, 23.)
In his March 27, 2020 memorandum to the ELG, after the onset of the
COVID-19 pandemic exacerbated the already difficult financial situation,
Chancellor Greenstein urged “unprecedented measures” to rapidly align university
expenditures with enrollments. (Id. at 19-20.) As a result, on April 13, 2020, without
any previous explicit discussion of retrenchment, Chancellor Greenstein issued a
directive to university presidents that all system universities must reduce
student/faculty ratios to past (2010-11 AY) levels by the 2021-22 AY. (Id. at 24-
26.) PASSHE did not expressly raise the prospect of retrenchment with APSCUF
until April 24, 2020, when a meet and discuss agenda included discussion of
retrenchment. (Id. at 24.) Chancellor Greenstein’s April 13, 2020 directive was the
first time in which any university had been told to reach a student/faculty ratio as
part of the budgeting procedure, which would require retrenchment, (id. at 24-25),
and the fact that this was the only means mentioned to achieve financial health
hampered the meet and discuss process required by Article 29, (id. at 35-36).
In determining the requirements of the CBA’s meet and discuss provisions,
which the Arbitrator viewed as “a problem-solving mechanism” the objective of
which “is to share information” regarding potential alternative solutions to
6
The ELG is comprised of system university presidents and PASSHE’s Chancellor.
(Award at 14 n.5.)
7
retrenching, the Arbitrator looked to previous arbitrators’ interpretations of the term
as it has been used in past CBAs, which this Court has held are appropriately
considered during arbitration.7 (Id. at 10-11.) Reviewing those prior decisions, the
Arbitrator noted three general imperatives arose therefrom: “1. meet and discuss is
a problem-solving mechanism; 2. early notification of possible retrenchment before
retrenchment is final is key to success[;] and 3. meaningful dialogue including an
exchange of ideas, not to be ignored.” (Id. at 12.) The Arbitrator was aware that
while meet and discuss requires meaningful, pre-decision dialogue, it does not mean
the parties will agree on a decision to the problem. (Id.) Informed by the parties’
history and testimony presented at the hearings, the Arbitrator determined that
PASSHE had not provided early notification that retrenchment of faculty was being
considered, even though it was clearly aware of the need for “unprecedented”
reforms, possibly including retrenchment, as early as the fall of 2019, months before
the COVID-19 pandemic began. (Id. at 19, 21, 36.) The Arbitrator opined that if
the parties had begun to meet and discuss in the fall of 2019, although not required
to do so under the CBA, some of the conflicts which followed may have been
obviated. (Id. at 23-24).
The Arbitrator stated that “[m]eet and discuss has to mean something. It had
to be included [in the CBA] for a reason. Parties do not include meaningless
language in a contract.” (Id. at 35.) The Arbitrator characterized the April 13, 2020,
retrenchment directive as a “decide and then meet” rather than a meet and discuss,
because the testimony established “the student/faculty ratio was [PASSHE’s]
singular goal.” (Id. at 32, 36.) According to the Arbitrator, the dialogue prior to
retrenchment
7
See Sch. Dist. of Phila. v. Phila. Fed’n of Tchrs., 651 A.2d 1152, 1156 (Pa. Cmwlth.
1994).
8
was not constructive. Synonyms of constructive are productive,
helpful, useful, beneficial, practical, effective, valuable[,] and positive.
However, the record of the hearing established that none of the dialogue
could be characterized by any of these synonyms. Not that the parties
had to come to an agreement but at least there had to have been
constructive conversation and discussion before decisions were made
to issue letters of retrenchment.
(Id. at 31.)
Acknowledging that nothing prohibited PASSHE from utilizing the
student/faculty ratio as a means to attain financial stability, the Arbitrator found that
because PASSHE had decided that reducing the faculty/student ratio as the only
cost-saving measure prior to any discussion of retrenchment, any later discussion
was not meaningful because it occurred after a final decision and directive were
issued. (Id. at 34, 37.) The Arbitrator concluded this violated Article 29 of the CBA
and the meet and discuss requirement in Section 702 of PERA. (Id. at 38.)
Having found that PASSHE’s conduct violated Article 29, the Arbitrator
considered what remedy to award. The Arbitrator recognized that her power under
Article 29.R of the CBA is “very limited.” She imposed two remedies, as follows:
2. Additional meet and discuss shall be held immediately to discuss
possible retrenchments scheduled for the end of the upcoming school
years of 2023, 2024[,] and beyond.
3. Those faculty members, who were improperly retrenched at the end
of the 2021 or 2022 school years due to the violation of Article 29, shall
be reinstated and made whole for lost wages, seniority[,] and fringe
benefits.
(Id. at 39.)
9
D. PASSHE’s Appeal
By letter of February 13, 2023, PASSHE requested that the Arbitrator rescind
the reinstatement requirement or, alternatively, stay that remedy pending appeal.
(R.R. at 2704a-07a.) The Arbitrator denied PASSHE’s request on February 16,
2023, noting that Article 5.D of the CBA states that an arbitrator’s decision is final
and binding. (Id. at 1305a.) PASSHE timely filed the instant Petition on February
21, 2023, challenging the Award. On March 6, 2023, PASSHE filed an Application
for Stay Pending Petition for Review (Application for Stay), and APSCUF filed an
Answer thereto. This Court heard oral argument on the Application for Stay in April
2023, and in a May 9, 2023, Opinion and Order, the Court granted PASSHE’s
Application for Stay, entered a supersedeas as to the implementation of paragraph 3
of the Award pertaining to reinstatement of backpay for retrenched faculty, which
was necessary to preserve the Court’s ability to decide the issues on appeal, and
ordered expedited consideration of PASSHE’s appeal. Pa. State Sys. of Higher
Educ. v. Ass’n of Pa. State Coll. & Univ. Facs. (Pa. Cmwlth., No. 154 C.D. 2023,
filed May 9, 2023) (Cohn Jubelirer, P.J., single judge op.).8 The Court observed that
a supersedeas was necessary at that juncture to prevent irreparable harm to PASSHE,
which would have been “deprived of appellate review of an adverse determination,”
for “the CBA’s retrenchment provisions create a scenario where, once the Award is
effectuated, appellate review of the Award becomes impossible [and a]ny decision
on appeal would be merely advisory.” (Id. at 12.) The Court further determined
that, because “the public interest favors effective appellate review of arbitrators’
awards,” a stay pending appeal on the merits furthered that public interest, but the
8
On June 7, 2023, APSCUF filed an Application for Review of Commonwealth Court
Supersedeas Order Dated May 9, 2023, with the Pennsylvania Supreme Court. To date, no action
has been taken on that application.
10
denial of a stay entirely foreclosed such review and, therefore, would be detrimental
to the public interest. Id. Oral argument was held on the Petition on September 11,
2023, and the matter is now ripe for our review.
II. DISCUSSION
On appeal, PASSHE argues that the portion of the Award granting
reinstatement and backpay to retrenched faculty must be vacated as it does not meet
the second prong of the “essence test,” which requires that an award be rationally
derived from the CBA, because the first sentence of Article 29.R limited the
Arbitrator’s remedy after finding a violation of the CBA’s meet and discuss
provisions to “ordering additional meet and discuss between the parties.” (R.R. at
1406a.) Therefore, according to PASSHE, paragraph 3 of the Award, which orders
global reinstatement of all retrenched faculty, lacks foundation in the CBA,
impermissibly ignores its plain terms, and adds terms and provisions thereto.
PASSHE further asserts that the reinstatement paragraph of the Award must be
vacated because it violates established public policy expressed in Section 702 of
PERA in that it infringes on PASSHE’s managerial authority over decisions
pertaining to its workforce. (PASSHE’s Br. at 5.)
A. The Essence Test
This Court’s scope and standard of review of a grievance arbitration award
arising under PERA are limited, for in reviewing an arbitration award, we must apply
the highly deferential two-prong “essence test.” Chambersburg Area Sch. Dist. v.
Chambersburg Educ. Ass’n (Pro.), 120 A.3d 407, 412 (Pa. Cmwlth. 2015). In
Westmoreland Intermediate Unit #7 v. Westmoreland Intermediate Unit #7
Classroom Assistants Educational Support Personnel Association, PSEA/NEA, 939
11
A.2d 855 (Pa. 2007), the Pennsylvania Supreme Court explained the history of and
defined the essence test as follows:
Acknowledging the value of limited judicial review and the potential
injurious nature of a broad scope of judicial review which would
undermine the arbitration process, shortly after PERA’s enactment, our
Court in Community College of Beaver County v. Community College
of Beaver County, Society of Faculty (PSEA/NEA), . . . 375 A.2d 1267([Pa.] 1977), addressed the proper standard of review by which to
review a grievance arbitrator’s award. The standard is one
characterized by great deference. The arbitrator’s award must be
“respected by the judiciary if ‘the interpretation can in any rational way
be derived from the agreement, viewed in light of its language, its
context, and any other indicia of the parties’ intention. . . .’” Id. at 1275
(quoting Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d
Cir. 1969)).
In articulating the proper standard of review under PERA, our Court
determined that the standard of review by the judiciary of a grievance
arbitrator’s award was consistent with federal case law addressing the
same issue. As stated by the United States Supreme Court in United
Steelworkers v. Enterprise Wheel and Car Corp., 363 U.S. 593 . . .
(1960):
[A]n arbitrator is confined to interpretation and application
of the collective bargaining agreement; he does not sit to
dispense his own brand of industrial justice. He may, of
course, look for guidance from many sources, yet his award
is legitimate only so long as it draws its essence from the
collective bargaining agreement.
Id. at 596 . . . .
Westmoreland Intermediate Unit #7, 939 A.2d at 862-63 (emphasis in original).
In applying the essence test, “[f]irst, we decide whether the issue is
encompassed by the collective bargaining agreement. Second, if the arbitrator’s
interpretation can rationally be derived from the collective bargaining agreement, it
will be sustained.” Slippery Rock Univ. of Pa. v. Ass’n of Pa. State Coll. & Univ.
12
Fac., 241 A.3d 1278, 1284 (Pa. Cmwlth. 2020). The first prong of the essence test
“requires a determination as to whether the terms of the agreement encompass the
subject matter of the dispute” and where a determination is made “that the subject
matter of the dispute is encompassed within the terms of the agreement, the validity
of the arbitrator’s interpretation is not a matter of concern to the court.” York Cnty.
Prison v. Teamsters Loc. Union No. 776, 245 A.3d 399, 405 (Pa. Cmwlth. 2021)
(citations omitted), appeal denied, 278 A.3d 856 (Pa. 2022). Thus, the essence test
does not permit us “to vacate an arbitrator’s award even if we disagree with the
arbitrator’s interpretation of the [collective bargaining agreement].” Am. Fed. of
State, Cnty., & Mun. Emps., Dist. Council 87 v. County of Lackawanna, 102 A.3d
1285, 1290 (Pa. Cmwlth. 2014). The Pennsylvania Supreme Court has deemed this
high degree of deference to be appropriate with regard to collective bargaining
agreements, for “if an arbitrator’s interpretation is contrary to one party’s
understanding of the agreement . . . the agreement can be renegotiated to reflect the
‘true’ intention of the party the next time the parties negotiate their [collective
bargaining agreement].” Millcreck Twp. Sch. Dist. v. Millcreek Twp. Educ. Support
Personnel Ass’n, 210 A.3d 993, 1007 (Pa. 2019) (citation omitted).
1. Parties’ Arguments
PASSHE states that Section 702 of PERA does not require parties to bargain
over the implementation of policies designed to address a managerial matter like the
size of the workforce or whether faculty retrenchment is necessary, but rather
requires them to meet and discuss on topics which could affect wages, terms, and
conditions of employment. (PASSHE’s Br. at 23-25.) PASSHE does not dispute
the Arbitrator’s ability under Article 29.R of the CBA to order the parties to engage
in additional meet and discuss for future years as a remedy for the Grievance. (Id.
13
at 30.) Instead, PASSHE argues that paragraph 3 of the Award, ordering
reinstatement for all retrenched faculty with backpay, as a group, fails under the
second prong of the “essence test” because Article 29.R expressly limits the
Arbitrator’s remedial authority for a meet and discuss violation. According to
PASSHE, the Arbitrator made no findings as to how any faculty member was
improperly retrenched and the Grievance did not involve any individual faculty
member’s grievance. (Id. at 21-22, 30-32.) The only finding by the Arbitrator was
the violation of the meet and discuss provision. However, the CBA provides that
the remedy for a meet and discuss violation is limited to ordering additional meet
and discuss. PASSHE cites Association of Pennsylvania State College and
University Faculties v. State System of Higher Education (Edinboro University), 35
PPER 41, (Pa. Lab. Rels. Bd., filed April 9, 2004), 2004 WL 6017685, for the
proposition that the CBA’s limitation on the Arbitrator’s remedial authority is
consistent with the remedy the Pennsylvania Labor Relations Board (PLRB) will
provide upon finding management violated the meet and discuss provisions of
Section 702 of PERA.
According to PASSHE, no issue could have been presented to the Arbitrator
for decision, and the fact that APSCUF later filed separate grievances to challenge
the retrenchment of individual faculty members at various universities illustrates that
the Grievance herein pertained to the meet and discuss violation alone, which limited
the remedy available to the Arbitrator to the first sentence of Article 29.R.
(PASSHE’s Br. at 32-34.) PASSHE posits that, in ordering the reinstatement of
retrenched faculty, the Arbitrator exceeded her remedial authority and “rendered the
first sentence of Article 29[.]R completely meaningless.” (Id. at 36.) According to
PASSHE, this Court’s decision in School District of the City of Erie v. Erie
14
Education Association, 873 A.2d 73 (Pa. Cmwlth. 2005), is dispositive herein, and
it urges this Court to find that paragraph 3 of the Award did not draw its essence
from the CBA’s language and, therefore, vacate that portion of the Award ordering
reinstatement with benefits. (PASSHE’s Br. at 36-38.)
APSCUF “does not dispute that Article 29 designates [PASSHE] and the
universities as the decision-makers. Nor does APSCUF dispute that the Award
references the managerial prerogative and/or the difference between an obligation to
meet and discuss an obligation to bargain.” (APSCUF’s Br. at 23.) However,
APSCUF argues that the plain language of Article 29.R authorizes an arbitrator to
reinstate faculty members where, as here, the arbitrator finds that they were
improperly retrenched before the parties had engaged, as negotiated, in a
constructive process to find alternatives, in violation of the meet and discuss
provision of the CBA. (Id. at 11-12, 23-24, 30.) APSCUF maintains the Arbitrator
clearly demonstrated an awareness of the contractual language by acknowledging
her discretion to impose a remedy for a violation of the meet and discuss provision
was limited, and by imposing only those remedies authorized in Article 29.R upon
finding both that PASSHE failed to meet and discuss in good faith and that faculty
had been improperly retrenched. (Id. at 16, 18-19.) Thus, APSCUF argues, the
Award, and paragraph 3 in particular, has its essence in the CBA’s language.
APSCUF also asserts that Chancellor Greenstein’s directive on April 13,
2020, requiring PASSHE universities to achieve a student/faculty ratio akin to that
of 2010-11 AY was done without regard to the need to explore other alternatives
with the goal of avoiding retrenchment, as is required under the terms of Article 29
of the CBA. Thus, APSCUF maintains the Arbitrator was within her authority to
find that PASSHE violated its obligation to meet and discuss the possible
15
retrenchment, for “PASSHE is not free to decide to retrench first, then me[e]t and
discuss later.” (Id. at 20-22.)
2. Application of the Essence Test
The first prong of the essence test is whether the terms of the CBA encompass
the subject matter of the dispute. It is undisputed that the subject matter of the
dispute, as defined by the Arbitrator as whether PASSHE violated Article 29 of the
CBA when it failed to meet and discuss in good faith and if so, what the remedy
should be, is encompassed by the CBA. Because Article 29 pertains to meet and
discuss, the first prong of the essence test is met, and we next turn to the second
prong. York Cnty., 245 A.3d at 405.
It is the second prong of the essence test that is at issue here. This prong
requires that we “ask whether the award itself can rationally be derived from the
[collective bargaining agreement]” and, in doing so, remain mindful that “the parties
to a [collective bargaining agreement] have agreed to allow the arbitrator to give
meaning to their agreement and fashion appropriate remedies for ‘unforeseeable
contingencies.’” Millcreek, 210 A.3d at 1006 (citation omitted).
Accordingly, even though an arbitrator is not permitted to ignore the
[collective bargaining agreement’s] plain language in fashioning an
award, the arbitrator’s understanding of the plain language must
prevail. A reviewing court should not reject an award on the ground
that the arbitrator misread the contract. The law is clear that an
arbitrator’s award must draw its essence from the [collective bargaining
agreement]. It need not [] reflect the narrowest possible reading of the
[collective bargaining agreement’s] plain language. . . . Even if a
court’s interpretation of the [collective bargaining agreement] is
entirely different than the arbitrator’s, the award must be upheld so long
as it rationally derives from the [collective bargaining agreement]. . . .
Id. (citations and internal quotation marks omitted).
16
When analyzing the second prong of the essence test, we are mindful that the
Award contains two, distinct remedies for PASSHE’s violation of the meet and
discuss requirements of Article 29. The Arbitrator ordered immediate additional
meet and discuss by the parties, a remedy about which the parties do not disagree.
It is the second remedy which is disputed: the order for PASSHE to reinstate all
improperly retrenched faculty members and to make them whole with salary and
benefits.
Article 29.R. reads:
If an arbitrator should find that the meet and discuss requirements of
this Article have been violated by management, the arbitrator’s remedy
shall be limited to ordering additional meet and discuss between the
parties, and the arbitrator may not insert themselves into that process.
If an arbitrator should find that a FACULTY MEMBER was
improperly retrenched, the arbitrator’s remedy shall be limited to
determining whether or not reinstatement is appropriate and whether or
not full or partial back pay, seniority[,] and fringe benefits should be
awarded.
(R.R. at 1406a.)
In the opening sentences of the “Opinion” portion of her analysis, the
Arbitrator acknowledged “[t]here is no doubt that management has the right to
decide the size of its workforce[,]” and “public employers are not required to bargain
over matters of inherent managerial policy.” (Award at 7-8.) The Arbitrator stated
that “[i]f this arbitration were solely about management rights to operate the business
and the direction of the faculty, there would be no issue to address, as these rights
are reserved.” (Id. at 8.) However, the Arbitrator saw the instant case as concerning
the meet and discuss requirement, not bargaining over personnel. (Id. at 8.) Quoting
prior arbitrators’ decisions submitted by the parties, the Arbitrator stressed that these
parties have arbitrated the issue of meet and discuss numerous times in the past and
17
were aware that it functions as a “problem-solving mechanism” requiring “early
notification of retrenchment [to] allow[] the parties to begin to engage in meaningful
dialogue.” (Id. at 10.)
As the Arbitrator repeatedly acknowledged, PASSHE did not bargain away
its right to make decisions of inherent managerial policy, like those related to
maintaining a certain student/faculty ratio. The CBA also does not prohibit
PASSHE from deciding when it is necessary to retrench faculty, but rather, Article
29.B.2 empowers it to do so “[w]hen in the opinion of [PASSHE] retrenchment
becomes necessary and it cannot be accomplished totally by attrition, APSCUF and
the affected FACULTY MEMBERS shall be notified prior to implementation . .
. and retrenchment shall be made as circumstances require. . . .” (R.R. at 1400a
(emphasis added, capitalization in original).) Moreover, Article 29.N.1 states that
“[n]othing contained within this Article shall be construed as requiring a
University to retain more ACADEMIC FACULTY MEMBERS in a
department or program than the President deems to be needed in that
department or unit.” (Id. at 1405a (emphasis added, capitalization in original).)
As the Arbitrator stated, “[w]hile [APSCUF] was clearly frustrated, it was
management’s right in the final analysis to make the ultimate decision regarding
retrenchment. Agreement was not the standard in Article 29, and not the standard
set forth in Section 702 of [PERA].” (Award at 33 (emphasis added).)
It appears that, in ordering a blanket reinstatement of faculty in the PASSHE
university system, the Arbitrator exceeded her authority by essentially requiring
those universities to retain more academic faculty than their respective presidents
deem to be needed and requiring the parties to negotiate and agree about
retrenchment. Moreover, we note that, although in the context of its public policy
18
argument, APSCUF recognizes that “reinstatement was not a remedy for the ‘meet
and discuss’ violation [but] [r]ather, the Arbitrator awarded reinstatement to
remedy the improper retrenchment of faculty.” (APSCUF’s Br. at 27 (emphasis
added).) This further clarifies that the reinstatement award was not for the meet and
discuss violation; yet, per the Arbitrator’s statement of the issue, that was the only
challenge and violation before her.
In this regard, we agree with PASSHE that the Proposed Decision and Order
in Edinboro University is instructive herein. There, in ordering only additional meet
and discuss upon finding a meet and discuss violation, the PLRB hearing examiner
explained that Section 702 of PERA requires public employers to meet and discuss
“managerial policy matters affecting wages, hours[,] and terms and conditions of
employment” when requested by the exclusive representative. Edinboro Univ., 35
PPER 41, 2004 WL 6017685, at “Meaning” Section. The issue therein pertained to
the elimination of sports programs without any effort to meet and discuss. Because
this elimination resulted in the loss of jobs, a decision affecting wages, hours, and
conditions, the hearing examiner found the meet and discuss requirement applied.
In doing so, the hearing examiner defined the issue as “not whether [the State System
of Higher Education (SSHE)] must negotiate over the wage, hour[,] and working
condition impact of a managerial decision to eliminate sports programs, but whether
SSHE must meet and discuss with APSCUF over the managerial decision itself.”
Id. at “Discussion” Section. The hearing examiner went on to observe that “[t]he
cited provision in the [collective bargaining agreement] does not even arguably
address APSCUF’s statutory right to meet and discuss [the] proposed elimination of
sports programs. Therefore, this provision does not support SSHE’s claim of a
contractual waiver of APSCUF’s statutory rights.” Id. The hearing examiner
19
ordered PASSHE to issue a written offer to meet and discuss with APSCUF, “its
usual and customary remedy for a failure to engage in meet and discuss.” Id. at
Order ¶ 3.(a) (emphasis added).
Herein, the Arbitrator repeatedly identified the issue to be decided as whether
PASSHE violated Article 29’s meet and discuss requirements prior to the
retrenchment of faculty. After she found such a violation, Article 29.R. clearly
authorized the Arbitrator to order, as she did, PASSHE and APSCUF to engage in
additional meet and discuss without inserting herself into the process. (Award at 39
¶ 2.1.) However, insofar as the Award next ordered the reinstatement of all
retrenched faculty with full benefits, that portion of the Award does not draw its
essence from the CBA. Where the language of a CBA is “clear and unambiguous
as a matter of law, a contrary ‘interpretation’ of its terms cannot be said to rationally
or logically be derived from the CBA.” Greater Nanticoke Area Sch. Dist. v.
Greater Nanticoke Area Educ. Ass’n, 760 A.2d 1214, 1220 (Pa. Cmwlth. 2000). By
its plain terms, the second sentence of Article 29.R. is triggered when APSCUF files
a grievance on behalf of an individual “faculty member” claiming that individual
had been “improperly retrenched.” This sentence states that “[i]f an arbitrator
should find that a FACULTY MEMBER was improperly retrenched, the
arbitrator’s remedy shall be limited to determining whether or not reinstatement is
appropriate and whether or not full or partial back pay, seniority[,] and fringe
benefits should be awarded.” (R.R. at 1406a (emphasis added, capitalization in
original).) The Grievance pertained only to PASSHE’s failure to meet and discuss
with APSCUF and did not concern any individual grievances arising from
retrenchment of individual faculty members at the end of the 2020-21 AY, which
were later filed by APSCUF. Thus, although the Arbitrator had the authority to order
20
additional meet and discuss, she lacked the authority to award reinstatement of all
faculty for a meet and discuss violation.
In Edinboro University of Pennsylvania, State System of Higher Education v.
Association of Pennsylvania State College and University Faculties, 128 A.3d 322(Pa. Cmwlth. 2015), this Court considered an arbitration award that sustained an
assistant professor’s grievance challenging the denial of her tenure and directed the
university to retroactively grant the assistant professor tenure. On appeal, the
university did not dispute that the terms of the collective bargaining agreement had
been violated or challenge the arbitrator’s authority to review the university
president’s tenure decision and allow a grievant to reapply for tenure if the correct
criterial were not applied; it essentially challenged the award of tenure as not being
within an arbitrator’s authority under the collective bargaining agreement. 128 A.3d
at 327, 329. Applying the essence test and relevant authority, we concluded that the
arbitrator had not exceeded her authority in reviewing the denial of tenure and in
concluding that the correct criterion for granting tenure had not been applied, but the
arbitrator’s actual award of tenure outright was not rationally derived from the
collective bargaining agreement. Id. at 329-330. We held that “after concluding that
the [collective bargaining agreement] had been violated, the [a]rbitrator was
permitted only to reinstate [the assistant professor] to probationary faculty member
status and allow her to reapply for tenure.” Id. at 330.
We reach a result here similar to that reached in Edinboro University of
Pennsylvania, and in School District of City of Erie. In Erie, this Court held that an
arbitration award directing the school district to pay teachers for additional work
assigned to them after a physical education position had been eliminated was
rationally derived from the parties’ collective bargaining agreement and, therefore,
21
was enforceable. 873 A.2d at 81. However, we rejected the part of the award that
directed the school district to reinstate and refill the eliminated position because the
school district’s creation of positions and the assignment of job duties associated
with them were not subject to bargaining, as the school district never bargained away
its right to exercise managerial discretion and the parties’ agreement did not mandate
things like overall faculty size or particular types of instructors needed in various
schools. Id. at 79. We held that “[i]nsofar as the arbitrator’s award ordered the
[d]istrict to reinstate and refill the eliminated position, it was not rationally derived
from the [collective bargaining agreement]; indeed, it conflicted with Article II(C)
[(involving the preservation of management rights)] of the [collective bargaining
agreement].” Id. at 79.
Because the Arbitrator’s award of reinstatement of faculty with lost wages,
seniority, and fringe benefits was not rationally derived from the CBA, we find the
second prong of the essence test is not satisfied with regard to that portion of the
Award. Millcreek, 210 A.3d at 1002.9
III. CONCLUSION
Applying the applicable, highly deferential standard of review to grievance
awards, we hold that paragraph 2 of the Award providing for additional meet and
discuss draws its essence from the CBA, while paragraph 3 directing reinstatement
of faculty with benefits does not draw its essence from the CBA. Therefore, we
affirm that portion of the Award ordering additional meet and discuss and reverse
that portion of the Award ordering reinstatement of faculty retrenched at the end of
9
Because we find that the second prong of the essence test is not satisfied with regard to
the Arbitrator ordering reinstatement of retrenched faculty as a remedy for a meet and discuss
violation, we need not resolve PASSHE’s argument that this remedy also violates the public policy
exception.
22
the 2021 or 2022 AY with benefits due to the violation of Article 29. The matter is
remanded for further proceedings.
__________________________________________
RENÉE COHN JUBELIRER, President Judge
23
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania State System of :
Higher Education, :
Petitioner :
:
v. : No. 154 C.D. 2023
:
Association of Pennsylvania State :
College and University Faculties, :
Respondent :
ORDER
NOW, September 29, 2023, the Arbitration Opinion and Award of January
23, 2023, entered in the above-captioned matter, is AFFIRMED IN PART and
REVERSED IN PART. The matter is REMANDED for further proceedings.
Jurisdiction is relinquished.
__________________________________________
RENÉE COHN JUBELIRER, President Judge