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In a case raising an issue of first impression in Pennsylvania, a judge on the Montgomery County Court of Common Pleas in Norristown, Pa., has upheld the court’s decision to vacate an arbitration award because the arbitrator exceeded the scope of his authority and based his decision on faulty logic. In Montgomery County Intermediate Unit v. Montgomery County Intermediate Unit Education Association, Judge William J. Furber Jr. found that the arbitrator’s determination — that the dismissal of two professional employees was arbitrable — was wrong. Furber said the arbitrator, Joseph B. Bloom, based his decision not on the language of the collective-bargaining agreements but on a combination of implied contractual “just cause” and the inclusion of the Pennsylvania School Code into every collective-bargaining agreement. Essentially, this combination lends due process rights to terminated employees despite that the contracts did not provide for it. The Montgomery County Intermediate Unit and the Perkiomen Valley School District both terminated professional employees pursuant to the Pennsylvania School Code. The schools’ teacher unions, Montgomery County Intermediate Unit Education Association and Perkiomen Valley Education Association, charged that the terminations were subject to grievance provisions of their respective collective-bargaining agreements. The schools maintained they were not. The issue of whether the terminations were arbitrable came before Bloom, who determined they were. The Common Pleas Court vacated his decision on July 18. The unions appealed the order before Furber. Furber found that the collective-bargaining agreements did not provide arbitration for terminated employees’ grievances. In particular, the court examined three sections of the Pennsylvania School Code that outlined when a school or a district could terminate a professional employee, the procedures for doing so and how terminated employees could seek relief. The code provides two options for relief, filing a grievance under the agreement or requesting a hearing, which can be included in a union’s collective-bargaining agreement. Typically, unions have added one of the remedies by including a “just cause” or a “statutory savings” provision to the agreement so that an employee’s termination can be arbitrated. “Although Section 11-1133 of the … School Code provides a right of election between statutory and contractual remedies, it is not an ‘absolute and automatic right to grieve/arbitrate the matter of termination for cause,’” wrote Furber, citing Phoenixville Area School District v. Phoenixville Area Education Association. Furber elaborated: Professional employees are given the right to grieve and arbitrate terminations only if the collective-bargaining agreement provides that right. Both Bloom and Furber concurred that the agreements did not contain a provision for grievance or arbitration for terminated professional employees. But Bloom found that “because the definitions of a ‘grievance’ in each agreement did not specifically state that the employers retained the right to discipline or discharge professional employees without restriction,” it is “logical to conclude that each collective-bargaining agreement, without a clear proviso to the contrary, implies a just cause limitation” that finds that the “employers are contractually obligated in matters of disciplinary actions to act with just cause.” Bloom further adopted an analysis, which the court labeled erroneous, of Footnote 5 from the 1999 Pennsylvania Supreme Court ruling in Mifflinburg Area Education Association v. Mifflinburg Area School District. The footnote summarizes the 1990 Commonwealth Court decision in Centennial School District v. Centennial Education Association. Furber said this passage is in question: “Therefore, express language in the agreement incorporating the provisions of the School Code is not necessary because such provisions are incorporated, by operation of law.” Contrary to Bloom’s interpretation, Furber said, the passage refers only to the Centennial agreement and not to all collective-bargaining agreements. In the first analysis of Footnote 5 of Mifflinburg, Furber wrote, “We reason that the Mifflinburg panel would not have chosen a footnote as the vehicle by which it would substantively change either statutory law or the contractual collective-bargaining rights of teachers and their school districts.” Mifflinburg, wrote Furber, actually held that “the presence of the statutory savings clause in this collective-bargaining agreement, and the prior practices of the parties in previously submitting teacher terminations to arbitration, formed a sufficient basis for the arbitrator to find that the parties intended to allow arbitration of the instant matter.” Furber continued, “The agreements at issue here do not contain a statutory savings clause nor was there any evidence presented that prior professional employee terminations had been evidenced by the absence of the statutory savings clause.” The footnote, he said, requires neither that every provision of the School Code nor that the potential to arbitrate every grievance be incorporated into every collective-bargaining agreement. Furber found that further analysis would be inconsistent with the Statutory Construction Act and Section 11-1133 of the School Code. Furthermore, the associations, he said, did not complain that any provision of their collective-bargaining agreements violated the School Code. The court said Bloom’s decision to base the award on an issue that was not raised and one as tenuous as an implied provision, makes “as little logical sense, and lacks as much legal justification, as implying a ‘statutory savings clause.’” Furber found that Bloom’s decision failed both parts of the “essence test” in State System of Higher Education (Cheyney University) v. State College University Professional Association, which determines whether a court can vacate an arbitration award. Cheyney’s two-prong test shall determine if the issue as properly defined is within the terms of the collective-bargaining agreement and if the issue is embraced by the agreement. The arbitrator’s award will be upheld, it states, if his interpretation can rationally be derived from the collective-bargaining agreement. Bloom’s award failed the first prong because he based his decision on implied language rather than explicit language. Bloom applied the Commonwealth Court’s decision in North East Education Association v. North East School District that “a party’s grievance regarding a teacher’s discipline, when the collective-bargaining agreement contains no provision relating to discipline, may be deemed arbitrable based upon the theory of implied just cause” to an employee termination. The court explained, however, that North East extended due process or arbitration rights to a teacher’s suspension, not termination. “This court concludes that arbitrator Bloom’s analysis lacks any foundation, because the issue of whether the grievances were arbitrable, as defined by the parties, was not within the terms of their collective-bargaining agreements and fails, therefore, to satisfy the first prong of the ‘essence’ test as articulated in Cheney University,” wrote Furber. “An arbitrator exceeds the scope of his authority when the language of the agreements, or lack of language in the agreements, represents the very antithesis of his conclusion.” Furber also found that the award should be vacated because the “conclusion that the issue of termination grievances was arbitrable is not rationally derived from the collective-bargaining agreements” failed the second prong of Cheyney. “The clear language of these collective-bargaining agreements, therefore, does not satisfy the requirements of Section 11-1133 of the School Code,” wrote Furber. He dismissed the unions’ petition for appeal and affirmed the order that the award be vacated.

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