Legal battles between Philly school district, teachers union a lesson in excess

The front-page story of the Philadelphia school district’s bitter fight with its teachers union has been couched in raucous rallies, caustic signs, and sideswiping comments at public meetings.

But there is another fight, a legal battle, between the two sides that shows just how bitter and expensive the clash between the district and the Philadelphia Federation of Teachers has become.

As the contract stalemate between the district of Philadelphia and its teachers union drags into year four, the sides find themselves locked in a host of pricey courtroom clashes.

The number of cases and the ferocity with which they are being fought surpass anything in recent memory. And these clashes come with a cost. In cases involving the union, the district has spent $1.2 million on outside attorneys, according to numbers released through a right-to-know request.

The tab could climb significantly higher if the district is forced to issue back pay in a number of cases still working their way through the system.

The most prominent of these disputes — over whether the district could unilaterally cancel the union’s contract — ended in August when the state Supreme Court ruled against the district. Still,  eight other class-action union grievances are pending, all in some stage of arbitration or working their way through state courts.

That number is unusually high, say union officials and labor experts.

It’s also uncommon, they said, for these fights to move from arbitration to the courts. For that to happen, one side must appeal an initial ruling from an independent arbitrator. Such appeals are rare, chiefly because there is a high legal bar appellants must clear in order for a court to overturn an arbitrator’s decision.

Yet, in recent years, the district has appealed four unfavorable arbitrator decisions to the courts. So far, one of these cases has been sent back to the arbitrator for further review; in other confrontations with the union, the district has come up short.

“I would speculate these appeals were filed more to make a political point and/or send a message to the union than they were with actual hopes of winning,” said Joseph Slater, a labor law expert at the University of Toledo, in an email. “But that would be just an informed guess.  And even if my guess is correct, it would still be highly unusual.”

Kate Bronfenbrenner, director of labor education research at Cornell University’s School of Industrial and Labor Relations, agreed.

“It is extremely odd,” said Bronfenbrenner. “The courts have been extremely hesitant to overturn arbitration decisions.”

The district did not make anyone available for interview, but spokesman Lee Whack did offer a written statement.

“The cases were worth appealing,” Whack wrote. “We disagreed with the decision of the arbitrator, and, when arbitrators make mistakes, the courts are there to correct them. The School District has been successful in the past in having decisions overturned, and we will do what we can when we see a decision that could hurt our students and our schools.”

A relationship on the brink

These increasingly aggressive legal tactics point to the deepening rift between the district and the union. For three years now, Philadelphia teachers have worked without a contract. The union said it hasn’t received an offer that acknowledges staff contributions. The district said it has put forth reasonable deals, but can only give so much in the face of a structural deficit. Unable to find common ground in negotiations, the sides have been reduced to a series of drawn-out legal conflicts that serve only to drain both sides of resources and good will.

“I’ve never seen a relationship — if you want to call it that — like this,” said Ralph Teti, a labor lawyer with the firm Willig, Williams, and Davidson. He has worked for the teachers union since the early 1990s and has a long history representing both government and union interests in public bargaining disputes.

“The relationship between the district and the federation has deteriorated to the point where it’s almost [that] arbitration is the first step to court,” said Teti.

The cost of those drawn-out fights will fall to taxpayers and dues-paying union members, with legal bills running into the millions. And that won’t be the only cost. If the courts and arbitrators rule against the district in a number of pending cases, the district may be forced to dole out millions in back pay to union members.

The district has admitted as much in court.

In early 2014, the district was facing a budget shortfall and sought emergency relief from the Pennsylvania Supreme Court. This case, which preceded the district’s cancellation of the contract, was designed to avoid such a dramatic imposition.

The district argued that its financial situation was so dire it needed to amend work rules that were preventing it from running as efficiently as possible. The district acknowledged, in fact, that it was already breaking or planning to break a number of rules embedded its contract with the union.

That included reducing the role of teacher seniority, easing “minimum staffing requirements” for positions such as guidance counselors, and hiring an outside company to provide substitute teachers.

The district said that if the Supreme Court didn’t affirm the legality of those maneuvers, the district would face a financial disaster. Its lawyers wrote in a brief:

“In the absence of a declaratory judgment from this Court, Petitioners will run the risk that if, several years from now, the PFT were ultimately to prevail in a challenge to the School District’s actions, the School District might have to pay large awards of back pay or other compensation — sums which it simply cannot afford, any more than it can afford to stand still and pretend that its financially distressed condition does not necessitate substantial changes in the work rules of the past.”

The court ruled against the district. That means the scenario described above — the one that would occur “several years from now” — may indeed happen in some form. Thanks to repeated appeals, the district has yet to receive its fiscal comeuppance. But that may simply be a stall tactic, said Teti.

“They’re just trying to put off the day of reckoning,” he said.

Eight unusual fights

The eight pending disputes all revolve around perceived violations of the union’s “status quo” agreement that it’s been operating under since its contract with the district expired in 2013.

The union alleges the district did not follow contractual language at Blaine and Kelly, two of the district’s transformation schools.
It claims the district violated the agreement when it contracted out per-diem substitute teacher services to a private company.
It says the district violated the contract language around assignment and transfer of teachers.
It asserts the district violated the contract by cutting the pay of certain special-education teachers.
It says the district violated the contract by laying off more senior career and technical education teachers before laying off less-experienced educators.
It alleges the district violated the contract when it denied sabbatical leave to a number of district employees.
It claims the district violated the contract when it laid off counselors and didn’t rehire them in terms of seniority.
It holds the district violated the contract when it laid off teachers whose employment dates back to the 1979-80 school year.

The majority of these cases have been handled by the district’s in-house counsel. The district hired outside counsel for three cases involving the union: the disputes over hiring counselors and special-education teachers, as well as the contract cancellation.

The smallest of these cases affects just a handful of teachers. Others combine hundreds of alleged violations.

The union’s recent victory over the district in Pennsylvania’s Supreme Court did not trigger a payout because the cancellation of the contract never took effect. The reverse is true in a number of the pending grievances.

Among the most financially and logistically costly cases could be the district’s decision to lay off all of its guidance counselors and then hire them back without observing seniority rules. The arbitrator ruled against the district, which then appealed to Common Pleas Court. After that court upheld the arbitrator’s decision in November, the district appealed to Commonwealth Court. Arguments are  expected to begin Monday.

Another case — involving the hiring and firing of special-education classroom assistants — could also result in a significant payout and is now before the city’s Common Pleas Court.

For the district to prevail in cases like this, it must convince the court that the arbitrator failed to draw his or her decision from “the essence of the contract.” That’s hard to prove, but the district has been able to do it once in the past.

In 2012, the district laid off two teachers who had been hired during or before the 1979-80 school year. The union contract protects such teachers from dismissal unless the district feels it must ax the teachers to account for declines in enrollment. The independent arbitrator found in favor of the union, and the Common Pleas Court upheld that decision.

The Commonwealth Court, however, reversed the lower court and said the arbitrator had more work to do to determine whether falling student enrollment might have justified the layoffs. Now the case is back before an independent arbitrator.  

District faces painful choices

The district is hoping for a similar result in its case involving the firing and rehiring of counselors not in order of seniority.

The counselor case, perhaps more than any other, illustrates the difficulty of the district’s position.

At the end of the 2012-13 school year, the district faced a $300 million to $400 million deficit. To help plug the gap, it laid off all school counselors despite contractual language that obligates the district to place a counselor in each school.

Emergency funds acquired over the summer allowed the district to rehire some of those counselors, but not all. Rather than give the most senior counselors their pick of where to return, the district assigned counselors in a way that would provide the best coverage for children. Part of that meant placing counselors back at their old schools so that they wouldn’t have to start from scratch with a new group of students.

The arbitrator ruled this maneuver illegal. But in this case — and others — the district had the tough choice of potentially breaching the union contract — with its litany of work rules — or providing substantially reduced services to school children.

If the union ultimately prevails in the counselor case, it could trigger payouts and cause disruption across the district. Counselors would have to be reassigned according to seniority, and dozens of schools could lose valued employees.

The school district has paid just over $250,000 to outside attorneys in its attempt to get the arbitrator’s decision overturned.

Big pay day coming?

Since many of these cases are still plodding through the arbitration and court system, it’s impossible to know just how much money the district might be forced to pay. There is, however, one case that has already exited the courts  and could serve as a benchmark.

In 2011-12, the district fired a handful of food service managers, employees who oversee district cafeterias serving 600 or more meals a day. Smaller cafeterias are typically run by food service workers, a lower-paid position that is not represented by the union.

When the food service manager positions were restored, the district filled them with food service workers rather than the managers. The district argued in court that the managerial positions were anachronistic — relics of a time when cafeterias did more cooking from scratch and needed separate positions for those who prepared the food and those who oversaw the work. It would have been a misuse of taxpayer money to abide by the inflexible, costly rules in the union contract, the district argued.

The union successfully argued in arbitration that the district erred in its rehiring process. The union prevailed upon appeal. The district was forced to issue back pay. The exact amount is hidden in a settlement agreement. However, Teti, the union’s lawyer, said the district had to hand over “close to $2 million.”

That case — unlike others still pending — involved a relatively small handful of low-wage workers. The union said roughly 18-20 workers were affected.

The district has rotated through a number of outside law firms in its union conflicts. They include lawyers from at least five private firms: Fox Rothschild LLP; Bazelon Less & Feldman, PC; Buchanan Ingersoll & Rooney, PC; Ballard Spahr LLP; and Hangley Aronchick Segal Pudlin & Schiller, PC.

The union has also spent money on outside lawyers, though union officials say they aren’t able to calculate the amount they’ve spent on legal fees in cases involving contract grievances. Unlike the district, the union is not subject to public right-to-know requests.

All this potentially puts the union in an awkward position. If it wins big in court — as appears likely — the fallout could harm district finances and, theoretically, hurt its members.

Union president Jerry Jordan said that prospect did not bother him.

“I don’t feel sorry at all for the district,” he said.

It is the union’s duty, Jordan said, to defend its members when contract violations occur. He also vowed to continue applying legal pressure — even if the district drags future cases through the court system.

“We will fight as long as we have to fight for our members,” he said. “And we’ll do whatever it takes.”