            IN THE COMMONWEALTH COURT OF PENNSYLVANIA


County of Allegheny, Pennsylvania, :
                        Appellant :
                                   :
             v.                    :
                                   :
Allegheny Court Association of     : No. 951 C.D. 2015
Professional Employees             : Argued: April 12, 2016


BEFORE:       HONORABLE MARY HANNAH LEAVITT, President Judge
              HONORABLE ROBERT SIMPSON, Judge
              HONORABLE DAN PELLEGRINI, Senior Judge


OPINION BY
SENIOR JUDGE PELLEGRINI                            FILED: May 2, 2016


              Allegheny County, Pennsylvania (County) appeals from an order of the
Allegheny County Court of Common Pleas (trial court) upholding an arbitration
award which found a grievance filed by the Allegheny Court Association of
Professional Employees (Association) timely under the parties’ collective bargaining
agreement and sustained the grievance on its merits. For the reasons that follow, we
affirm.


                                              I.
                                             A.
              The County and the Association1 entered into a collective bargaining
agreement (CBA) effective January 1, 2011, through December 31, 2013. Article
VIII of the CBA contained a “me too” provision that allowed the County to provide

       1
         The Association is comprised of between 331-340 probation officers who were appointed
by the Allegheny County Court system.
different health care coverage if 75% of the unionized and 100% of the non-
unionized employees were covered by the plan.           Section 3(H) of that Article
regarding “Cost Containment” provided that:

                It is specifically understood that during the term of this
                Agreement, the County shall have the right to institute,
                delete or modify the full range of wellness and all cost
                containment measures in hospitalization, surgical, major
                medical, and dental coverage. The program shall be at no
                additional cost to employees (other than the participation
                arrangements set forth herein) and benefits shall not be
                reduced. Effective January 1, 2011, each bargaining unit
                employee who receives hospitalization insurance shall
                contribute 2.0% of his or her base salary towards the
                premium. Longevity payments shall not be included in
                calculation of base salary for the purpose of premium
                contributions for hospitalization insurance. Contributions
                shall be made by paycheck deduction.


(Reproduced Record [R.R.] at 84a) (emphasis added).


                Article III, Section 3(A) of the CBA set forth a grievance procedure
requiring that:

                [a]ny alleged grievance shall be reduced to writing within
                seven (7) work days from the alleged occurrence of the
                grievance, or within seven (7) work days from the time the
                grievant reasonably should have known or been aware of
                the existence of the situation giving rise to the alleged
                grievance.


(Id. at 75a.) Section 4(A) also provided that the grievance “must be presented under
the procedures of this Article promptly and within the prescribed time limitations.”
(Id. at 76a.)

                                            2
             In attempting to negotiate a successor agreement, the parties reached an
impasse in July 2013 regarding the CBA to take effect January 1, 2014, and
proceeded to arbitration on the issue before Arbitrator Lewis R. Amis (Arbitrator
Amis).    Just before the record closed, Assistant County Solicitor Diego Correa
advised the Association via letter dated April 8, 2014, that the County intended to
implement a new healthcare plan under the provisions of the existing CBA on the
basis that 75% of unionized employees were transferred to the new healthcare
program. As per the letter, the new healthcare plan provided the following payroll
deductions: 2014—2.25%; 2015—2.25%; and 2016—2.5%. (Id. at 56a.) None of
those increases were authorized in the CBA.


             Arbitrator Amis issued an award dated May 6, 2014 (Award), effective
from January 1, 2014, through December 31, 2017. The Award continued the prior
CBA in large part, with certain changes to the applicable salary schedule,
compensation plan, longevity schedule, insurance benefits and cost containment
thereof, and sick leave. Significantly, with respect to insurance benefits, the Award
stated:

             Article VIII - Insurance Benefits

             Section 1.A. Change the requirement that the County may
             provide new or different health insurance coverage if, “75
             percent of all other County unionized…employees are
             covered under the new plan,” to “50 percent of all other
             County unionized employees….”

                                         ***

             Section 3.H. Cost Containment

             Continue 2 percent contribution of base salary towards
             premium for hospitalization insurance for the life of this

                                          3
             Agreement. Retain existing relevant conditions, rights, and
             restrictions contained in this section.


(Id. at 98a.) On June 20, 2014, after the successor CBA Award was handed down,
the County implemented the increased payroll deductions referenced in Assistant
County Solicitor Diego Correa’s April 8th letter.


             On August 19, 2014, the Association’s President, Stephen Bechtold
(President Bechtold), advised William Graham, the Deputy Director of the Allegheny
County Department of Human Services, that the payroll deductions should be limited
to 2% for the life of the current CBA—that is, until December 31, 2017. The County
disagreed, responding through its counsel that “the language limiting payroll
deduction to 2% is subject to the ‘me too’ language providing that the County may
change health care benefits if 50% of other County employees change their
healthcare.” (Id. at 59a.) President Bechtold rejected this interpretation, explaining,
“[t]he fact that the Arbiter singled out this issue separate from the language
addressing changing the ‘me too’ language from 75% to 50% in the Award makes his
intentions clear.” (Id.) In an August 21, 2014 e-mail, he stated that the Association’s
counsel would be in contact with the County “not only [to] resolve this issue but to
also complete the incorporation of the Award language into the current contract for
printing and distribution.” (Id.)


             Counsel for the Association stated the following in an e-mail dated
September 16, 2014:

                    I am disappointed with the County’s position on this
             issue. Certainly the award provision is not just superfluous
             verbiage. Since the County has entered a definitive
             position, but this is a continuing matter, there would be no

                                           4
              time limitation on filing and prosecuting a grievance up
              through an arbitration award. It would seem to be an
              unnecessary process when we could submit the matter to
              the Arbitrator for his statement of intention. We could
              agree to abide by his statement as being final on the matter.
              Give me your thoughts on this approach. I will hold off
              contacting him to see if he would be willing to receive and
              respond to the question and will not do so without you
              joining in with the statement of the question. Perhaps a
              conference call would be suit [sic] the matter.


(Id. at 61a.)    Later that day, the Association’s counsel sent a second e-mail,
requesting that “either the County backs off its position or the matter is submitted to
this Arbitrator [Amis] for his intention which will resolve the matter.” (Id.)


              On September 25, 2014, following a conversation with counsel for the
Association, the County memorialized its position that its ability to increase the 2%
payroll deduction was not affected by the Award and affirmed its refusal to adjust the
payroll deductions downward. Likewise, the County refused to submit the issue to
Arbitrator Amis for clarification, but instead insisted that the Association file a new
grievance.


                                           B.
              Accordingly, on October 6, 2014, the Association filed a formal
grievance with respect to the increased payroll deductions, and the parties proceeded
to arbitration. Before Arbitrator Gerald Kobell, Esquire (Arbitrator Kobell), the
County argued that the grievance was untimely filed as per the CBA’s seven work
day-time limit. Arbitrator Kobell nonetheless entertained the grievance, finding it
timely because the seven days did not begin to accrue until September 25, 2014. He
noted that:


                                           5
                   There was no evidence introduced by the County, and
            I assume that none exists, for the County payroll department
            right after February 6, 2014, to notify the Probation Officers
            in the unit that as soon as the calculations could be
            completed, or perhaps until any appeal period expired, the
            County would commence withdrawing 2.25 percent instead
            of 2 percent from employees’ pay. Most likely, the
            difference amounted to only a few dollars, and amid other
            possible changes, it just was not readily noticeable. I think
            that the County, if it believed that the “me too” language
            trumped the Arbitrator’s award of 2 percent for the life of
            the Agreement, should have communicated that position to
            the Association and to the affected employees. It did
            neither. It was not until August 14, 2014, several pay
            periods later, that the increased deduction was called to the
            attention of the Association (or perhaps President Bechtold
            noticed it himself). This triggered President Bechtold’s
            voicemail message to the Allegheny County Department of
            Human Resources, pointing out that Arbitrator Amis, in the
            Association’s view, had mandated 2 rather than 2.5 percent
            for the life of the Agreement.

                                         ***

                    The e-mails exchanged on September 25 was [sic]
            the first time when the filing of a new grievance was
            mentioned by either Attorney Delaney, on behalf of
            Association, or Assistant County Solicitor Correa, on behalf
            of the County. Up until that date, counsel for the respective
            parties were discussing other issues and alternatives, but not
            the filing of a new grievance before a new arbitrator. Until
            then, in my view, they were engaged in traditional
            collective bargaining to resolve all of the remaining issues
            in dispute before them, including the 2–2.25 percent
            employee participation payment.


(Id. at 26a, 31a.) With respect to the merits, Arbitrator Kobell agreed with the
Association’s argument that Arbitrator Amis’s Award disallowed the County’s
increase in member contributions above 2%. Arbitrator Kobell ordered the County to
reimburse the Association’s members for their healthcare participation payments in


                                          6
excess of this amount and to continue the 2% deduction for the life of the CBA
ending on December 31, 2017.


               The County filed a petition to vacate the Award (petition) with the trial
court, averring that the Award did not draw its essence from the CBA because it
ignored the CBA’s contractually established deadline for filing grievances.                       In
response, the Association filed preliminary objections, asserting that the issue of
timeliness is a final determination left to the Arbitrator and, therefore, the County’s
petition must be dismissed for legal insufficiency.2                Ultimately, the trial court
sustained the Association’s demurrer and dismissed the County’s petition with
prejudice “because the black letter law of Arbitration is that the Arbitrator decides
procedural issues—like filing deadlines,” and because the Award drew its essence
from the terms of the CBA. (8/17/15 Memorandum Order, at 1–2.) This appeal
followed.


                                                II.
               As we have previously stated, grievance awards under the Public
Employe Relations Act, Act of July 23, 1970, P.L. 563, as amended, 43 P.S.
§§1101.101–1101.2301, are reviewed pursuant to the deferential essence test, which
requires affirmance of an award 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.” Neshaminy School District v. Neshaminy Federation of Teachers, 122
A.3d 469, 474 (Pa. Cmwlth. 2015). Pursuant to this test, our review is “highly
circumscribed,” meaning that “[w]here it is determined that the subject matter of the

       2
          The Association also alleged improper original service of process; however, the trial court
did not render its decision based upon this ground, and it does not factor into our analysis.



                                                 7
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.” Leechburg Area
School District v. Dale, 424 A.2d 1309, 1312–13 (Pa. 1981).


                                         A.
            Initially, we must determine whether, as the Association contends, an
arbitrator’s procedural decision is final and not reviewable by the courts, even under
the circumscribed review of the essence test. In the seminal case of John Wiley &
Sons, Inc. v. Livingston, the United States Supreme Court addressed a split among the
United States Courts of Appeals regarding whether trial courts or arbitrators
determine if the procedural conditions to arbitration have been satisfied. 376 U.S.
543, 84 S. Ct. 909 (1964).


            In that case, a union argued that its members need not comply with the
grievance procedures where doing so was futile and where the employer engaged in
continuing violations of a CBA. In noting the difficulty in distinguishing procedural
and substantive aspects of a labor dispute, the Supreme Court reasoned:

                  We think that labor disputes of the kind involved here
            cannot be broken down so easily into their “substantive”
            and “procedural” aspects.       Questions concerning the
            procedural prerequisites to arbitration do not arise in a
            vacuum; they develop in the context of an actual dispute
            about the rights of the parties to the contract or those
            covered by it. . . .

                   Doubt whether grievance procedures or some part of
            them apply to a particular dispute, whether such procedures
            have been followed or excused, or whether the unexcused
            failure to follow them avoids the duty to arbitrate cannot
            ordinarily be answered without consideration of the merits
            of the dispute which is presented for arbitration. . . . It
            would be a curious rule which required that intertwined
                                          8
              issues of “substance” and “procedure” growing out of a
              single dispute and raising the same questions on the same
              facts had to be carved up between two different forums, one
              deciding after the other. Neither logic nor considerations of
              policy compel such a result.


Id. at 556–57, 84 S. Ct. at 918.


              In holding that procedural issues were not reserved for the courts, the
United States Supreme Court went on to hold that those issues should be considered
“as aspects of the dispute which called the grievance procedures into play,” and,
therefore, were subject to arbitration. Id. at 559, 84 S. Ct. at 918. “Once it is
determined, as we have, that the parties are obligated to submit the subject matter of a
dispute to arbitration, ‘procedural’ questions which grow out of the dispute and bear
on its final disposition should be left to the arbitrator.” Id. at 557, 84 S. Ct. at 918.
Importantly, the Supreme Court did not consider whether an arbitrator’s ruling on
“procedural” questions may be appealed or the appropriate standard to apply to such
questions on appeal.


              Consistent with Wiley & Sons and Third Circuit precedent,3
Pennsylvania courts adopted the federal standard regarding procedural arbitrability,
holding that procedural questions should be resolved by the arbitrator unless the
parties to a CBA limit the arbitrator’s jurisdiction by specifying in the CBA that the
arbitrator has no jurisdiction over procedural matters. See, e.g., Kardon v. Portare,
353 A.2d 368, 370 (Pa. 1976).


       3
         See Radio Corporation of America v. Association of Professional Engineering Personnel,
291 F. 2d 105 (3d Cir. 1961).



                                              9
             In School District of City of Duquesne v. Duquesne Education
Association, a case upon which the County relies, a teacher filed a grievance after the
mandated 15-day deadline. 359 A.2d 850, 851 (Pa. Cmwlth. 1976), rev’d, 380 A.2d
353 (Pa. 1977). Nonetheless, his grievance proceeded through the first three levels of
the enumerated grievance procedure, during which the school district failed to raise
the timeliness issue. 359 A.2d at 852. As such, the arbitrator concluded that the
school district waived this issue and sustained the grievance on its merits. Id. On
appeal to this Court, we reversed, finding that because the CBA did not specifically
provide for the procedural question involved (waiver), the arbitrator’s decision
finding that waiver occurred prior to arbitration was erroneous. Id. As such, we
dismissed the grievance as untimely filed.


             On further appeal, our Supreme Court reasoned that, as per Kardon, an
arbitrator’s jurisdiction may be limited but in the CBA at issue, there was no
limitation prohibiting the arbitrator from deciding procedural issues. School District
of City of Duquesne v. Duquesne Education Association, 380 A.2d 353, 356 (Pa.
1977). As such, it held that under Wiley & Sons, the issue of waiver was properly
before the arbitrator. Id. Specifically, the Court explained:

                    In the instant case, as in Kardon, we can find no
             limitation in the collective bargaining agreement which
             would prohibit an arbitrator from deciding procedural
             issues. As the final determination of the procedural issue is
             to be left to the arbitrator, we believe that Commonwealth
             Court erred in reversing the arbitrator.


Id. That case, however, did not hold that an arbitrator’s procedural determination was
insulated from review.


                                          10
              In fact, in State System of Higher Education v. United Plant Guard
Workers of America, Local Union No. 509, 612 A.2d 645 (Pa. Cmwlth.), appeal
denied, 618 A.2d 403 (Pa. 1992), we reviewed the same issue the Association
suggests we are precluded from reviewing here:               whether an arbitrator’s
determination that a grievance was timely filed – when the subject CBA provided
specific terms regarding timelines for filing grievances – violated the essence test.
There, the CBA specified that grievances must be filed within 15 working days of the
event giving rise to the grievance, but the arbitrator found timely a grievance filed
five years after the fact. Id. at 647. On review, we held:

              [t]he agreement explicitly provided for a fifteen day limit,
              and the arbitrator’s decision to allow the late filing
              essentially ignored the language limiting the filing of
              grievances to fifteen days from the date of the occurrence
              giving rise to the grievance. As such, the decision of the
              arbitrator did not draw its essence from that agreement.


Id. at 647.


              Wiley & Sons and its progeny stand for the proposition that, unless
expressly precluded from resolving procedural issues in the CBA, questions of
procedure, like substantive issues, are within an arbitrator’s purview. Contrary to the
Association’s suggestion, this line of cases does not render final and unreviewable an
arbitrator’s resolution of a procedural issue. To hold otherwise would require the
courts to parse out the differences between questions of procedure and substance,
simply to determine which issues are reviewable by a trial court. The Supreme Court
of the United States expressly disavowed this position. See Wiley & Sons, 376 U.S.
at 557, 84 S. Ct. at 918 (“Neither logic nor considerations of policy compel such a
result.”).

                                          11
                                         B.
            Having found that Arbitrator Kobell’s procedural determination is
subject to review, we will proceed to apply the essence test. The County does not
dispute that the timeliness issue was within the terms of the parties’ CBA, only that
the Award was not rationally derived from the agreement under the second prong of
the essence test. In this respect, we “will not second-guess the arbitrator’s fact-
finding or interpretation as long as the arbitrator has arguably construed or applied
the CBA.” Neshaminy Sch. Dist., 122 A.3d at 474.


            Specifically, the County maintains that the Award does not draw its
essence from the CBA because it disregards the contractual time limits it contains.
The gravamen of the County’s argument is that the October 6, 2014 grievance was
filed 98 work days after the County notified the Association by letter dated April 8,
2014, of its intent to implement the new deductions, and 75 work days after the new
deductions were actually implemented. Because the CBA requires a grievance to be
filed within seven work days of an event giving rise to a grievance or within seven
work days from the date on which the Association or its members reasonably should
have discovered such an event, the County contends that the Award, finding the
grievance timely filed, does not draw its essence from the CBA.


            The County argues that the Association should have filed a grievance by
April 17, 2014, despite the fact that the arbitration was ongoing and Arbitrator Amis
had not yet decided whether to raise the 2% base salary contribution as proposed by
the County. It was not until the Award was issued in May 2014 that the Association
learned that the 2% contribution remained in effect for the life of the agreement,
despite the fact that the County had proposed an increased contribution. Thus, as of


                                         12
April 17, 2014, the Association had no knowledge of whether the County’s proposed
actions would violate the new CBA.


            Accordingly, by e-mail dated August 19, 2014, the Association advised
Deputy Director Graham of this issue. In subsequent e-mails, the parties attempted to
resolve the issue by reference to Arbitrator Amis’s Award. By September 22, 2014,
Arbitrator Kobell found it still unclear whether the County intended to proceed with
its position, and the Association expressly inquired that day whether the County
intended to “back[ ] off its position” or to submit the matter to arbitration. (R.R. at
61a.) On September 25, 2014, the County confirmed that it maintained its position,
and within seven business days, the Association filed its formal grievance.


            The CBA allows an arbitrator to decide when an event giving rise to a
grievance occurred or when a grievant discovered or reasonably should have
discovered the occurrence. In this context, Arbitrator Kobell rejected the County’s
argument that the Association was put on notice of the increased premiums as of its
April 8, 2014 letter or, alternatively, as of its June 20, 2014 deductions, noting that
the former was issued before Arbitrator Amis’s Award and the latter amounted to
only a few dollars’ difference, which was likely insufficient to put the grievants on
notice. Instead, he found that the seven work day period did not begin to accrue until
September 25, 2014:

            The e-mails exchanged on September 25 was the first time
            when the filing of a new grievance was mentioned by either
            Attorney Delaney, on behalf of the Association, or Assistant
            County Solicitor Correa, on behalf of the County. Up until
            that date, counsel for the respective parties were discussing
            other issues and alternatives, but not the filing of a new
            grievance before a new arbitrator. Until then, in my view,
            they were engaged in traditional collective bargaining to

                                          13
              resolve all of the remaining issues in dispute before them,
              including the 2–2.25 percent employee participation
              payment.


(R.R. at 31a.) We are not free to render our own factual findings, and because
Arbitrator Kobell’s Award arguably construed and applied the CBA within the scope
of his authority, his decision satisfies the essence test. See Neshaminy Sch. Dist., 122
A.3d at 474. We, therefore, affirm the trial court’s order sustaining the Association’s
preliminary objections to the County’s petition upholding the Award.4




                                           DAN PELLEGRINI, Senior Judge



Judges McCullough and Wojcik did not participate in the decision in this case.




       4
          In arguing that Arbitrator Kobell’s Award does not flow from and is not based in the CBA
because it did not apply the CBA’s strict, seven work day deadline, the County fails to recognize
that as per the CBA, the deadline did not begin to run until the grievant reasonably should have
discovered the violation. This is a factual inquiry which turns upon the specific circumstances of
the case, see Fine v. Checcio, 870 A.2d 850, 859 (Pa. 2005) (discussing the analogous discovery
rule, which tolls the statute of limitations until a party knows or reasonably should know of his
injury and its cause), and background concerning the parties’ ongoing negotiations is germane to
this issue. Contrary to the County’s argument, Arbitrator Kobell did not consider this background
in determining whether an otherwise strict deadline was tolled by settlement negotiations.
Additionally, in no way was Arbitrator Kobell’s Award premised upon a finding that each day
constituted a new, ongoing violation of the CBA, giving rise to a new filing deadline. The County
has mischaracterized Arbitrator Kobell’s Award in these respects, and we find its arguments
unavailing.


                                               14
           IN THE COMMONWEALTH COURT OF PENNSYLVANIA


County of Allegheny, Pennsylvania, :
                        Appellant :
                                   :
             v.                    :
                                   :
Allegheny Court Association of     :
Professional Employees             : No. 951 C.D. 2015




                                 ORDER


             AND NOW, this 2nd day of May, 2016, the order of the Court of
Common Pleas of Allegheny County dated May 15, 2015, in the above-referenced
case is affirmed.




                                  DAN PELLEGRINI, Senior Judge
