Opinion
No. 2057 C.D. 2014
07-24-2015
Pennsylvania State System of Higher Education, West Chester University, Petitioner v. Association of Pennsylvania State College and University Faculties, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE LEADBETTER
The Pennsylvania State System of Higher Education (PASSHE) petitions for review of the final arbitration award determining that West Chester University (WCU) violated the collective bargaining agreement (CBA) by failing to follow the past practice of compensating James Rudisill at the rate of 20% of gross revenues less refunds for operating the 2009-2013 swim camps. We affirm.
The Association of Pennsylvania State College and University Faculties (APSCUF/the Union) and PASSHE/WCU are parties to a series of CBAs. In each CBA, Article 7 addresses the duties, responsibilities and workload of athletic coaches, including the planning and management of camps. Each CBA contained the following provision:
2. Current practices regarding compensation for camps and clinics, including dual compensation, run by Regular full-time COACHES employed as of the effective date of this Agreement shall continue.CBA, Article 7.3.E.2; Reproduced Record (R.R.) at 938a, 1005a, and 1008a.
Rudisill is employed as the head swimming coach at WCU and he is also responsible for the operation of WCU's swimming camps. Between 2003 and 2013 the gross revenues generated from the swimming camps ranged from $471,052 to $826,733. R.R. at 428a-30a. From 1992 until 2005, WCU provided dual compensation to coaches who coordinated camps pursuant to the terms of a 1992 written summer camp policy (1992 Policy), which provided:
4. The camp director, usually the head coach of the varsity program, may earn 20% of the gross revenue up to a maximum as specified below.
| Number of Camps | 20% of Gross RevenueMaximum Earnings |
|---|---|
| 1 | $3,000 |
| 2 | $5,500 |
| 3 | $7,500 |
| 4 | $9,000 |
| 5 or more | Increases by $1000 per camp |
Summer camp salaries for head coach/camp director will be determined in the following manner: Camps will be prioritized, from highest to lowest in terms of revenue production. Twenty percent (20%) up to $3,000 will be applied to the highest revenue producing camp, twenty percent 20% up to $2,500 will be applied to the second highest revenue producing camp, and so on. Additionally, the amount earned from any one camp may not exceed $3,000.R.R. at 1010a. The 1992 Policy required that a "minimum of 50% of gross income generated from each weekly camp session will go into scholarships for that sport." R.R. at 1009a. The 1992 Policy permitted exceptions to the 50% figure with the approval of the vice president for student affairs and the athletic director. Id.
In 2004 and 2005, Union representatives and WCU met to revise the dual compensation policy. In April 2005, WCU issued a new dual compensation policy (2005 Policy), which removed the cap on earnings. The 2005 Policy stated that:
The goal is to generate at least 50% of gross income from each weekly camp session to support scholarships for that sport. Exceptions to this figure may be granted on a case by case basis by the Vice President for Student Affairs, in consultation with the Athletic Director. When exceptions are given, the Coach and Athletic Director will work on a multi-year plan designed to achieve the 50% goal of scholarship support.Id. at 1015a. The 2005 Policy further provided that a maximum of 50% of gross revenues may be used for salaries, fringe benefits and operating the camp. Room and food costs for overnight camps are considered fixed costs, and room and food costs are covered first, before scholarship balance and/or camp director payments are processed. Id.
From 2005 through 2007, Rudisill submitted bi-weekly dual compensation requests for 20% of the adjusted gross revenues. Id . at 1023a - 1037a. At the end of every class cycle, Rudisill totaled the number of hours, subtracted any refunds, and submitted all of the documentation along with a compensation request form. Rudisill's dual compensation paperwork was reviewed and approved by the summer camp coordinator, the athletic director, and Dr. Matthew J. Bricketto, vice president of student affairs.
In 2007, WCU's swimming facilities were closed due to cryptosporidium contamination and WCU was required to issue a significant number of refunds. Following this closure, WCU reviewed the swim camps' fiscal operations and determined that Rudisill's claims for dual compensation in the amount of 20% of adjusted gross revenues were inconsistent with the 2005 Policy. In 2008, Dr. Bricketto informed Rudisill that WCU would be exercising significantly greater financial controls over the swim camps and would be strictly adhering to the 2005 Policy. Dr. Bricketto informed Rudisill that he could not simply request 20% of adjusted gross revenues as his dual compensation and that WCU would be deducting several charges against the gross revenues of the swimming camps before calculating Rudisill's compensation. As a result of these changes, Rudisill's dual compensation dropped from $130,454 in 2007 to $59,800 in 2008.
In 2009, WCU imposed the same financial controls on the remainder of its sports camps.
The Union filed a grievance on behalf of Rudisill challenging the change to his 2008 compensation. In November 2011, arbitrator Jay Nadelbach upheld Rudisill's grievance (Nadelbach Award). Nadelbach determined that, based on the parties' past practice, Rudisill was entitled to 20% of the swim camps' adjusted gross revenues, minus any refunds. In reaching his decision, Nadelbach noted that from 2005-2007, Rudisill's written compensation requests went through at least three layers of review and approval and that the payment method and approval route used were "fair and reasonable, open and notorious, and consistently followed by both parties." Nadelbach Award at 11. Nadelbach stated that Rudisill did not engage in "a sleight of hand or tricky maneuvering to get paid unwarranted monies." Id. Nadelbach found that although the payment process allowed different supervisory levels to examine the claims, WCU never questioned Rudisill's payment requests or suggested that the 2005 Policy was not being followed. Id. Further, WCU failed to examine whether the 50% scholarship goal was being fulfilled and failed to make the scholarship goal an integral part of Rudisill's compensation process. Id. at 12. Nadelbach concluded that the existence of a past practice regarding Rudisill's camp compensation had been proven and that therefore, WCU had violated Article 7.3.E of the CBA by unilaterally changing Rudisill's compensation. Id.
Nadelbach issued a restatement of the award on July 26, 2012.
The matter at hand concerns five grievances the Union filed on behalf of Rudisill challenging his dual compensation for the 2009-2013 swim camps, while the 2008 grievance was pending. Pursuant to the CBA, the parties selected an arbitrator, Mattye M. Gandel. Arbitrator Gandel held a grievance arbitration hearing on June 17, 2014 and issued an award on October 16, 2014. Gandel concluded that Rudisill had not received proper dual compensation for the 2009-2013 swim camps. Gandel further concluded that WCU violated Article 7.3.E of the CBA when it did not follow the past practice of compensating Rudisill at the rate of 20% of adjusted gross revenues. Gandel ordered that WCU make Rudisill whole by compensating him for the difference between the compensation he received for the five camp seasons and the amount he claimed he should have received. Additionally, Gandel directed WCU to apply the negotiated language of Article 7.3.E going forward as long as that language remains in effect.
Gandel rejected WCU's argument that the Nadelbach Award was neither prospective nor binding on the parties and that, with the issuance of the Nadelbach Award, any past practice regarding Rudisill's compensation ceased. Gandel Award at 7-8, 17-18. Gandel relied upon Article 4 of the CBA, which provides for a three-step grievance resolution procedure. Step Three of the procedure is binding arbitration. R.R. at 930a-31a. Article 4.12 of the CBA provides that any settlement, withdrawal or disposition of a grievance at Step One shall not constitute binding precedent for the settlement of similar grievance. R.R. at 933a. Gandel reasoned that if a grievance proceeded through Step Three, then the award would have a binding effect for similar future grievances. The 2009-2013 grievances were identical to the 2008 grievance and, therefore, the Nadelbach award was binding and precedential for purposes of resolving the 2009-2013 grievances. Gandel Award at 18. Gandel determined that the Nadelbach Award established that it was WCU's practice to compensate Rudisill with 20% of gross revenues, less refunds, and that Article 7.3.E of the CBA requires that "practices regarding compensation for camps and clinics . . . shall continue." R.R. at 938a. Gandel stated that the language of Article 7.3.E has remained unchanged since at least 2004 and that WCU did not seek to modify or remove the language when it was negotiating the 2011-2015 CBA, despite the pendency of Rudisill's grievances. Gandel stated that:
A contract provision, especially one that was clearly upheld by an arbitrator, cannot cease to exist simply because one party decides not to follow the negotiated language. Of course an employer has the right to establish policies, but those policies cannot contradict or change clearly negotiated language and would not have the same weight as negotiated language.Gandel Award at 10-11. Gandel concluded that no matter how clear the language was in the 2005 Policy, it could not override the negotiated language of Section 7.3.E of the CBA. Gandel also rejected WCU's argument that the past practice of 20% compensation ceased because Rudisill stopped requesting such compensation as of 2009. Gandel determined that Rudisill stopped requesting the 20% compensation because WCU informed him that he would not receive any compensation at all if he submitted such a request. Rudisill complied with WCU's directives regarding compensation requests, but filed a grievance in each year challenging his compensation, thus preserving the practice. This appeal followed.
The Public Employe Relations Act (PERA) governs the arbitration of grievances filed by the Union. Fraternal Order of Transit Police v. Se. Pa. Transp. Auth., 114 A.3d 893, 898 (Pa. Cmwlth. 2015); Slippery Rock Univ. of Pa. v. Ass'n of Pa. State College & Univ. Faculties, 71 A.3d 353, 358 (Pa. Cmwlth. 2013). Grievance awards under PERA are reviewed under the deferential essence test, which requires an award to be confirmed if: (1) the issue as properly defined is within the terms of the agreement, and (2) the award can be rationally derived from the agreement. Fraternal Order of Transit Police, 113 A.3d at 898. As long as the arbitrator has arguably construed or applied the CBA, an appellate court may not second-guess the arbitrator's fact-finding or interpretation. Id. See also State Sys. of Higher Educ. (Cheyney Univ.) v. State College & Univ. Prof'l Ass'n., 743 A.2d 405, 413 (Pa. 1999) (holding that a court may vacate an arbitrator's award under the essence test only "where the award indisputably and genuinely is without foundation in, or fails to logically flow from, the collective bargaining agreement").
Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§ 1101.101 - 1101.2301.
First, WCU argues that neither the Nadelbach Award nor the Gandel Award draws its essence from the CBA because the Nadelbach award was neither binding nor prospective, the arbitrators' determinations that a past practice of compensating Rudisill with 20% of adjusted gross revenues was not properly established, any past practice ended when Rudisill ceased submitting requests for 20% of adjusted gross revenues, and the arbitrators improperly decided that the 2005 Policy was a compensation policy rather than a managerial policy.
Arbitrator Gandel framed the issue to be arbitrated as follows:
Did the Grievant, James Rudisill, receive his proper dual compensation for the 2009, 2010, 2011, 2012, 2013 summer camp programs? If not, what shall be the remedy?Gandel Award at 1. Arbitrator Gandel determined that the issue of Rudisill's compensation was within the parameters of the CBA because Article 7.3.E. provides that the "current practices regarding compensation for camps and clinics, including dual compensation ... shall continue." Thus, the first prong of the essence test was satisfied.
WCU's contention that the Nadelbach Award was neither binding nor prospective is without merit. The Nadelbach Award only addressed Rudisill's 2008 compensation because Article 4.6 of the CBA requires that an arbitrator confine himself to the precise issue the parties agreed to submit for arbitration. Arbitrator Nadelbach could only resolve the issue of Rudisill's 2008 compensation as that was the only issue properly before him. The Nadelbach Award concluded that a past practice of Rudisill receiving 20% of adjusted gross revenues as dual compensation existed from 2005-2007 and that Article 7.3.E of the CBA required that such past practice continue. The 2009-2013 grievances involved the same practice and the same CBA provision as the 2008 grievance. Accordingly, the determination that a past practice existed regarding Rudisill's compensation, is binding upon all similar grievances until the language of Article 7.3.E is renegotiated. Sch. Dist. of Phila. v. Phila. Fed'n of Teachers, Local 3, 651 A.2d 1152, 1156 (Pa. Cmwlth. 1994) (holding that "[a]lthough prior arbitration awards do not have the precedential value of judicial decisions, when the prior decision involves the interpretation of the identical contract provision(s) between the same parties, stability in collective bargaining relations requires acceptance by an arbitrator of the previous interpretation") (citations omitted).
WCU's argument that the arbitrator improperly determined that a past practice regarding Rudisill's compensation existed and that Rudisill's requests for compensation were an attempt to obtain by arbitration what he could not obtain through negotiation is also without merit. Noting that the coaches attempted to set compensation at 20% of adjusted gross revenues during negotiations, but that this term was rejected, WCU argues that it is only obligated to compensate the coaches as provided by the 2005 policy.
Evidence of "past practices" can be used in arbitrations "to implement contract language which sets forth only a general rule" or "to create or prove a separate enforceable condition of employment which cannot be derived from the express language of the agreement." Penns Manor Area Sch. Dist. v. Penns Manor Area Educ. Support Pers. Ass'n, 953 A.2d 614, 617 (Pa. Cmwlth. 2008). "Past practice" has been defined as follows:
It must be shown to be the accepted course of conduct characteristically repeated in response to the given set of underlying circumstances. This is not to say that the course of conduct must be accepted in the sense of both parties having agreed to it, but rather that it must be accepted in the sense of being regarded by the [parties] involved as the normal and proper response to the underlying circumstances presented.Id. at 618 [quoting County of Allegheny v. Allegheny Cty. Prison Employees Independent Union, 381 A.2d 849, 852 n.12 (Pa. 1977)] (emphasis in original). A determination that a past practice exists does not require that both parties have agreed to the term or condition, merely a demonstration that there was an accepted course of conduct. Penns Manor, 953 A.2d at 618. While 20% of adjusted gross revenues was not included in the 2005 Policy, the 2005 Policy does not prohibit coaches from receiving 20% of adjusted gross revenues as dual compensation, nor does it substitute any other formula for computing coaches' compensation. It is simply silent on the issue so the continuation provision in the CBA directs that the 20% figure was not affected. Moreover, the Nadelbach Award concluded that a past practice existed because of the course of conduct from 2005-2007, which included Rudisill's written compensation requests receiving at least three layers of review and approval, and because the payment method and approval route used were "fair and reasonable, open and notorious, and consistently followed by both parties." Nadelbach Award at 11.
WCU's assertion that Rudisill voluntarily abandoned the past practice when he ceased submitting dual compensation requests for 20% of adjusted gross revenues in 2009 is meritless. The Gandel Award determined that Rudisill did not abandon the past practice. Rather, in response to WCU's threat to withhold all dual compensation, Rudisill submitted his requests for compensation as directed by WCU. However, Rudisill filed a grievance for each year disputing WCU's dual compensation policy and asserting his right to 20% of adjusted gross revenues thus, demonstrating that he did not voluntarily abandon the established past practice. Gandel Award at 17.
We also reject WCU's contention that the arbitrator improperly determined that the 2005 Policy was a compensation policy, rather than a managerial policy. Section 701 of PERA, 43 P.S §§ 1101.701, requires that employers meet with unions to negotiate wages, hours and other terms and conditions of employment. Section 301 of PERA, 43 P.S. § 1101.301, defines "wages" as hourly rates of pay, salaries or other forms of compensation for services rendered. Section 702 of PERA, 43 P.S. § 1101.702, provides that employers are not required to bargain over matters of inherent managerial policy, including 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. While dual compensation may affect WCU's overall budget, policies regarding dual compensation specifically relate to wages, which are subject to mandatory bargaining, rather than being a matter of inherent managerial policy. Canon-McMillan Sch. Bd. v. Com., 316 A.2d 114, 116 (Pa. Cmwlth. 1974) (holding that school board's decision to provide after school programs was a policy matter, but compensation for supervising after school programs was an issue of wages and subject to mandatory bargaining).
Second, WCU argues that the Gandel Award improperly prevents it from exercising its managerial prerogatives to implement operational and financial controls over the summer athletic camps. WCU contends that Article 6 of the CBA provides that state universities "at their sound discretion, possess the right ... to manage all operations and University sports including the direction of Coaches and the right to plan, direct and control the operations of all facilities ... except as modified by this Agreement." R.R. at 934a. WCU further asserts that Paragraph 25 of Rudisill's employment contract states that the primary purpose of the swim camps is public relations and fundraising for scholarships, while additional compensation for Rudisill is a minor factor. Id. at 404a. Thus, by ignoring Article 6 of the CBA and the provisions of Rudisill's employment contract in favor of the 20% past practice, the arbitrators have interfered with WCU's managerial rights.
WCU's argument that the Gandel Award improperly prevents it from exercising its managerial prerogatives to implement operational and financial controls over the summer athletic camps is without merit. Even if dual compensation were a matter of inherent managerial policy, WCU's rights regarding dual compensation are modified and governed by Article 7.3.E of the CBA. WCU is still able to assert operational and financial control over the swim camps and its scholarship revenue goals; it simply must operate with the knowledge that Rudisill will be receiving 20% of adjusted gross revenues, less refunds.
With regard to WCU's argument regarding Rudisill's contract, we note that the contract provides that "[i]n the event of a conflict between this Contract and the CBA, the terms of the CBA shall be controlling." R.R. at 402a, 405a.
WCU further argues that to the extent a past practice was established pursuant to the Nadelbach Award, that practice was discontinued when it instituted more extensive operational oversight and financial controls in accordance with the 2005 Policy following the cryptosporidium contamination. It maintains that the contamination resulted in a significant drop in revenues for that year, which constituted a change in economic conditions, allowing for an elimination of the past practice as demonstrated by WCU's enhanced oversight of the summer camps.
We do not find any merit in WCU's assertion that it was permitted to unilaterally discontinue the dual compensation past practice because of the changed economic circumstances caused by the cryptosporidium contamination. Article 7.3.E makes past practices regarding dual compensation an issue covered by the CBA. WCU cannot unilaterally change or abandon a past practice through policy interpretation or enforcement. Thus, WCU is required to negotiate with the Union regarding past dual compensation practices before making changes that affect dual compensation.
In the alternative, WCU argues that it effectively repudiated the past practice for purposes of the 2011 CBA. WCU contends that all changes in operational oversight of the sports camps were fully and openly in effect, and were fully and openly known to the Union and the coaches both before and during negotiations for the 2011-2015 CBA. WCU asserts that it repudiated the past practice when it advised the Union, prior to negotiations, that it intended to cease paying Rudisill 20% of gross revenues. In addition, WCU argues that because the Union did not negotiate language guaranteeing Rudisill 20% of gross revenues for the 2011-2015 CBA the past practice was repudiated.
We conclude that WCU failed to effectively repudiate the dual compensation practice for purposes of the 2011-2015 CBA. Merely informing the Union that it would refuse to pay dual compensation based on past practice is not sufficient to repudiate the past practice, particularly where the Union has consistently disputed WCU's right to do so by filing grievances. Article 7.3.E of the CBA is the only instance in which the parties addressed dual compensation. Article 7.3.E has existed in each applicable CBA. WCU either failed to successfully negotiate the removal of Article 7.3.E from the CBA or did not make an attempt to eliminate the provision. Accordingly, WCU is obligated to continue to pay dual compensation based upon Article 7.3.E and the past practice established by the credited evidence. Phila. Fed'n of Teachers, 651 A.2d at 1156 (holding that "the authoritative force of an arbitrator's interpretation of a provision is strengthened when the contract is renegotiated without modification of the relevant provision").
WCU also asserts that the CBA's integration clause, found in Article 20 of the CBA, eliminates all past practices. WCU relies upon Allegheny County Prison. In that case, the union filed a grievance under the provisions of a collective bargaining agreement and demanded that an officers' lounge for guards be guarded during mealtime and that the guards be able to select any food available from the jail kitchen. An arbitrator sustained the union's grievance based upon past practice. The Pennsylvania Supreme Court vacated the award, holding that because the agreement included a broad integration clause to the effect that the agreement as written was the complete agreement between the parties, and the agreement did not make any mention of the past practices that were the basis of the award, the award lacked a rational basis.
Article 20 of the CBA, in relevant part, states:
The parties acknowledge that this Agreement represents the results of collective negotiations between said parties conducted . . . and constitutes the entire Agreement between the parties for the term of this Agreement or any extensions thereof.
WCU's reliance upon Allegheny County Prison is misplaced. Unlike the agreement at issue in Allegheny County Prison, the CBA in this case does address past practices and specifically states that "[c]urrent practices regarding compensation ... shall continue." R.R. at 938a, 1005a, 1008a. We conclude that the CBA's integration clause found in Article 20 does not eliminate all past practices, but rather incorporates specific past practices with regard to dual compensation.
Finally, WCU asserts the Gandel Award violates the well-defined, dominant public policy of the Commonwealth for several reasons. WCU argues that the Gandel Awards allows Rudisill to enrich himself in violation of the State System of Higher Education Act (Act 188), which requires that the state system of higher education provide high quality education at the lowest possible cost to students. WCU also contends that the Gandel Award rewards behavior that borders on theft and fraud because Rudisill knew that his requests for compensation were not in accordance with the 2005 Policy. WCU further asserts that the award violates PERA, which requires the creation of orderly and constructive relations between employers and employees, because the award applies only to Rudisill's compensation.
Section 2002-A of the Public School Code of 1949, Act of March 10, 1949, P.L. 30, as amended, added by Section 2 of the Act of November 12, 1982, P.L. 660, as amended, 24 P.S. §§ 20-2001-A to 20-2017-A. Act 188 is the enabling act for PASSHE. --------
To establish the public policy exception to the essence test, it must be shown that the public policy is "well-defined, dominant and ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests." Westmoreland Intermediate Unit #7 v. Westmoreland Intermediate Unit # 7 Classroom Assistants Educ. Support Pers. Assoc., PSEA/NEA, 939 A.2d 855, 866 (Pa. 2007). Further, an arbitrator's award will violate public policy if it "poses an unacceptable risk that it will undermine the implicated policy and cause the public employer to breach its lawful obligations or public duty, given the particular circumstances at hand and the factual findings of the arbitrator." City of Bradford v. Teamsters Local Union No. 110, 25 A.3d 408, 414 (Pa. Cmwlth. 2011).
WCU's contention that Rudisill is enriching himself at the expense of students and that his behavior bordered upon theft is baseless. There is nothing in state law that prohibits athletic coaches from making large sums of money from their state employment, particularly when sanctioned or permitted under a negotiated CBA in compensation for their operation of revenue producing programs. Further, PERA does not require that all employees make the same amount of money or be compensated by the same method as other employees in similar positions.
Having reviewed the Gandel Award and rejected all of WCU's arguments, we conclude that based upon the language of Article 7.3.E of the CBA, the award of dual compensation in the form of 20% of gross revenues less refunds is rationally derived from the CBA and does not violate public policy.
Accordingly, we affirm.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge ORDER
AND NOW, this 24th day of July, 2015, the arbitrator's award of October 16, 2014, is hereby CONFIRMED pursuant to Section 7314(d) of the Uniform Arbitration Act, 42 Pa. C.S. § 7314(d).
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge
R.R. at 968a.