The Commonwealth Court has ruled that union employees of Temple University Health System and Temple University Hospital were eligible to continue receiving unemployment compensation benefits during a work stoppage caused by a labor dispute because the stoppage constituted a lockout rather than a strike.

In Temple University Health System v. Unemployment Compensation Board of Review, a three-judge panel unanimously affirmed a decision by the state Unemployment Compensation Review Board, which found that Temple employees were not ineligible for benefits under Section 402(d) of the Unemployment Compensation Law during a work stoppage precipitated by a dispute over Temple’s decision to discontinue tuition reimbursement for part-time employees and the dependents of full-time employees.

According to President Judge Dan Pellegrini, who penned the opinion, the Pennsylvania Labor Relations Board found that Temple’s unilateral decision to do away with those tuition reimbursements was an unfair labor practice and ordered the employer to immediately reinstate the reimbursements.

Temple’s failure to comply with this order even after the union gave it 10 days’ notice of the work stoppage constituted a disruption of the status quo, making the work stoppage a lockout rather than a strike, Pellegrini said.

"Claimants waited for the PLRB to consider and dispose of the pending unfair labor practice charge and gave employer the opportunity to restore the status quo before instituting the work stoppage on March 31, 2010," Pellegrini said. "Such a course of conduct does not preclude finding that the work stoppage was a lockout because, as outlined above, employer unilaterally caused the disruption and was required to restore the status quo in order to avoid the lockout and claimants could properly condition their return to work on the restoration of the status quo."

Pellegrini was joined by Judges Renee Cohn Jubelirer and Robert Simpson.

In Temple, according to Pellegrini, Temple revised its tuition reimbursement policy in March 2009, restricting reimbursement to full-time employees only and discontinuing reimbursements to part-time employees and dependents of full-time employees, which had been provided for in the collective bargaining agreements from 2006.

That same month, the union, which represented the Temple University Hospital Nurses Association and the Temple University Hospital Allied Professionals, notified the employer that it opposed the policy revision and filed an unfair labor practice charge with the PLRB, according to Pellegrini.

In January 2010, the PLRB found that Temple’s March 2009 policy changes violated Section 1201(a)(1) and (5) of the Public Employe Relations Act and directed Temple to immediately reinstate the previous tuition reimbursements and to immediately make whole any employees who were adversely affected by the policy changes, Pellegrini said.

Temple appealed the PLRB’s final order to the Commonwealth Court and, in March 2010, the PLRB rejected Temple’s request to stay the order, according to Pellegrini.

In March 2010, Pellegrini said, the union gave Temple 10 days’ notice of its intent to initiate work stoppage if an agreement was not reached.

The union told Temple that the PLRB’s order to restore tuition reimbursements was a restoration of the status quo ante of the terms and conditions of employment, but Temple argued that it did not violate the status quo, according to Pellegrini.

The union initiated its work stoppage on March 31, 2010, and it lasted until April 29, 2010, when the parties reached a settlement, according to Pellegrini.

But the Unemployment Compensation Service Center found that the union employees were eligible to receive benefits under Section 402(d) and Temple appealed the decision, Pellegrini said.

A referee affirmed the center’s decision, finding that the work stoppage had been a lockout, and the board agreed, noting that the employees met their burden under the status quo test first established by the state Supreme Court in the 1960 case Erie Forge & Steel v. Unemployment Compensation Board of Review (Vrotney), according to Pellegrini.

The Vrotney test, according to Pellegrini, determined whether a work stoppage was a lockout or strike based on whether the employee refused to so extend the expiring contract and maintain the status quo.

The Supreme Court, in its 1982 decision in Fairview School District v. Unemployment Compensation Board of Review, defined the status quo as "’the last actual, peaceable and lawful non-contested status which preceded the controversy,’" according to Pellegrini.

On appeal to the Commonwealth Court, according to Pellegrini, Temple argued that the work stoppage constituted a strike because it disrupted the status quo, which must be deemed to be the period after the 2006 CBAs expired and after the tuition reimbursement policy had been modified.

But Pellegrini said this argument was "based upon the faulty premise that the status quo, i.e., the last actual, peaceable and lawful non-contested status between the parties, was in effect at the expiration of the 2006 CBAs which includes its unlawful change to the tuition reimbursement program."

Pellegrini said the Supreme Court refined the Vrotney test in the 1968 case Philco v. Unemployment Compensation Board of Review, finding that the determination of whether a work stoppage was a lockout or a strike came down to "’which side, union or management, first refused to continue operations under the status quo after the contract had technically expired, but while negotiations were continuing.’"

"In this case, the last actual, peaceable and lawful non-contested status between the parties was that which existed prior to employer’s unilateral discontinuance of the tuition reimbursement program for part-time employees and the dependents of full-time employees in March 2009 in violation of the express terms of the 2006 CBAs, and the board properly determined that employer breached the status quo," Pellegrini said.

Counsel for Temple, John B. Langel at Ballard Spahr in Philadelphia, said the hospital at all times believed it was acting within the scope of its policy when it modified its tuition benefits.

Counsel for the union, Jonathan K. Walters of Markowitz & Richman in Philadelphia, declined comment.

Zack Needles can be contacted at 215-557-2493 or zneedles@alm.com. Follow him on Twitter @ZNeedlesTLI. •

(Copies of the 15-page opinion in Temple University Health System v. Unemployment Compensation Board of Review, PICS No. 13-1246, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •