Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—E.D. Pa.: Arbitrator’s award reimbursing employee for doctor’s note thrown out, (Jul 25, 2025)

By Ursula Furi-Perry, J.D.

The arbitrator imposed a new contractual obligation not present in the collective bargaining agreement, which had explicitly prohibited arbitrators from adding to or modifying its terms.

A lineman working for a Pennsylvania electric provider requested reimbursement for a doctor’s note and was denied, prompting his union to file a grievance. An arbitrator interpreted the collective bargaining agreement as incorporating a Pennsylvania statute and ruled that the employer violated the agreement by not reimbursing the lineman. A federal court in Pennsylvania vacated the award and ordered summary judgment for the employer, holding that the arbitrator imposed a new contractual obligation not present in the collective bargaining agreement, which had explicitly prohibited arbitrators from adding to or modifying its terms (PPL Electric Utilities v. IBEW Local 1600, No. 24-0072 (E.D. Pa. July 21, 2025)).

Doctor’s note. The lineman who worked for a Pennsylvania electric provider called out sick, and was told to return with a doctor’s note or face being sent home, due to a spike in absences. He obtained the note a few days later and paid $50 out-of-pocket, then returned to work. The lineman’s request for reimbursement was denied by the employer, and the union then filed a grievance on the lineman’s behalf, seeking reimbursement and a cease-and-desist order.

The matter proceeded to arbitration, and the arbitrator addressed whether the employer violated the collective bargaining agreement by not reimbursing the lineman for the cost of obtaining the medical certification. The union argued that Article II, Section 3(A) of the CBA—requiring compliance with governmental regulation—effectively incorporated the Pennsylvania Medical Pay Law Act of 1961 (MPL), which prohibits employers from requiring employees to pay for medical documentation if they work at least one week.

Arbitrator’s award. As the Department of Labor and Industry (DOLI) enforces the MPL, the union argued this statute was binding through the CBA. The arbitrator agreed with the union, finding that the phrase “condition of employment” in the MPL encompassed requirements like sick pay verification. He interpreted the CBA as incorporating this statute and ruled that the employer violated the agreement by not reimbursing the lineman, awarded him $50, and ordered the employer to cease further violations of the MPL.

The employer filed suit, asking the court to vacate the arbitration award as the arbitrator exceeded his authority by interpreting statutory law rather than merely applying the CBA. The union counterclaimed, seeking to enforce the award and compel the employer to pay the reimbursement and abide by the MPL in the future. Both parties filed for summary judgment.

The court first emphasized that while arbitration awards receive extreme deference, arbitrators are also bound by the CBA and are not authorized to interpret statutory law unless expressly empowered by the parties. Here, although the arbitrator claimed to interpret Article II, Section 3(A) of the CBA—relating to compliance with governmental regulation—the court found that he went further and improperly engaged in statutory interpretation of the MPL. This was evidenced by his explicit construction of the phrase “condition of employment” as used in the MPL, and his reliance on a 1976 memorandum from the Pennsylvania Attorney General. The court reasoned that the arbitrator was not merely enforcing the CBA but was determining what the MPL required, something he lacked authority to do.

Second, the court held that by interpreting the MPL and requiring the employer to reimburse the employee, the arbitrator imposed a new contractual obligation not present in the CBA, which had explicitly prohibited arbitrators from adding to or modifying its terms. There was no contractual language obligating reimbursement for doctor’s notes, and the employer had historically not reimbursed such costs.

The arbitrator’s ruling effectively created a new term based on his view of statutory requirements, thereby overstepping his authority and violating the limits set forth in the agreement. The court rejected the union’s argument that because the employer was subject to government regulations, the MPL was effectively incorporated into the CBA—even if the statute applied, the arbitrator was not permitted to interpret its provisions. The arbitrator’s references to being “mandated by the MPL” confirmed he relied on statutory grounds, not merely the agreement itself.

The district court granted the employer’s motion for summary judgment and denied the union’s motion.

The case is No. 24-0072.

Judge: Henry, C.

Attorneys: Emily Byrne (Morgan, Lewis & Bockius) for PPL Electric Utilities. John B. Dougherty (Law Offices of Ira H. Weinstock) for IBEW Local 1600.

Companies: PPL Electric Utilities; IBEW Local 1600

Cases: Arbitration Labor RemediesDamages PennsylvaniaNews