Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—Pa. Cmmw.: Arbitrator’s award reducing employee’s termination to suspension upheld on appeal, (Apr 15, 2025)

By Ronald Miller, J.D.

In light of the employee’s clean disciplinary record over the course of five years, the arbitrator concluded that terminating his employment for a first offense was unjust.

An arbitration award decision in favor of a union that a transit system lacked just cause to terminate a bus driver for alleged harassment of a female security guard was affirmed by a Pennsylvania Commonwealth Court. On appeal, the employer had contended that the arbitrator’s decision contravened public policy against sexual harassment. However, the employer’s anti-harassment policy simply required it to conduct an investigation and undertake a course of action aimed at preventing further harassment. The arbitrator’s award drew its essence from a CBA because the anti-harassment policy explicitly contemplated a range of disciplinary measures for harassment offenses (Lehigh and Northhampton Transportation Authority v. Amalgamated Transit Union, Local 956, No. 49 C.D. 2024 (Pa. Cmmw. Apr. 11, 2025)).

As part of its transit operations, the employer operates a transit center in Allentown, Pennsylvania. Drivers used the breakroom maintained at the transit center.

A security guard worked at the transit center. Prior to starting work with the employer, the security guard suffered a knee injury while serving in the military. She had limited mobility because she wore a knee brace and used crutches and was restricted to working in the breakroom.

• The security guard first encountered the employee in May 2022. Thereafter, he questioned the guard about her personal life, whether she was single, and asked to take her out. The guard began going to the bathroom to avoid dealing with the employee. His presence made her uncomfortable and interfered with her ability to perform her job.

On July 25, 2022, the employee was driving a bus on which the guard was a passenger. He drove the bus fast and aggressively, including driving over curbs and making multiple sharp turns.

Anti-harassment policy. The employer maintains an anti-harassment policy. The employee was aware of the employer’s policy prohibiting harassment in the workplace. The anti-harassment policy outlined the procedure for handling sexual harassment complaints. Employees who are determined to have engaged in sexual harassment risk discipline “up to and including discharge.”

At the encouragement of her supervisor and a coworker, the guard filed a complaint against the employee. A subsequent investigation included video footage of the employee making derogatory comments about the guard as she exited the bus following the July 25 incident.

By letter on August 17, 2022, the employer informed the employee he was being discharged for harassment.

Arbitrator’s findings. Because of the employee’s comments towards the guard, and his attempt to grab her cane, the arbitrator found that he had harassed her in violation of the anti-harassment policy. The arbitrator likewise acknowledged that the anti-harassment policy had “a zero tolerance policy for discrimination in any form.” However, the arbitrator did not understand the employer’s zero-tolerance anti-harassment policy to necessitate the termination of the employee.

Specifically, the arbitrator observed that the procedure for the policy only required the employer to conduct a thorough investigation to determine if harassment had occurred and, if so, to “[t]ake appropriate action to end the harassment.” The arbitrator found that although the anti-harassment policy explicitly permitted termination for an offense, it did not in fact require, but merely permitted, termination.

Suspension. In light of the employee’s clean disciplinary record over the course of five years, the arbitrator concluded that terminating his employment for a first offense was unjust. The arbitrator determined a ten-day suspension to be the appropriate discipline for the employee’s first harassment case.

On appeal, the trial court upheld the arbitrator’s award. The trial court determined that the arbitrator’s award satisfied the essence test, reasoning that the CBA expressly contemplated the issue as described by the arbitrator and that his award was rationally derived therefrom because of the policy’s explicit reference to a continuum of discipline for harassment.

As to the public policy exception, the trial court found that “the crucial inquiry [was] whether, given the factual findings of the Arbitrator, a ten-day suspension in lieu of termination compel[led] LANTA to violate the public policy against sexual harassment.” In upholding the arbitrator’s award, the trial court agreed with the arbitrator that the employee’s conduct was highly inappropriate, but not egregious. This appeal followed.

Issues on appeal. Before the appellate court, the employer presented two issues: (1) whether the trial court erred by concluding that the arbitrator’s award satisfied the essence test; and (2) whether the trial court erred by holding that compliance with the arbitrator’s award comported with the public policy against sexual harassment.

Essence test. Pursuant to the “essence test,” an award should be upheld if: (1) the issue as properly defined is within the terms of the [CBA]; and (2) the arbitrator’s award can be rationally derived from the [CBA]. Even where the court disagrees with an arbitrator’s findings of fact, it may not second-guess or otherwise reject the finding. An arbitrator’s award may draw its essence from the [CBA] if the arbitrator’s “interpretation can in any rational way be derived from the agreement, viewed in light of its language, its context, and any other indicia of the parties’ intention.”

The employer argued that the Pennsylvania Supreme Court’s decision in Philadelphia Housing Authority v. American Federation of State, County and Municipal Employees, 52 A.3d 1117, 1127-28 (Pa. 2012), required an arbitrator to uphold discipline after making a finding of harassment—or risk violating “the spirit and intent of employer’s policy and public policy.” It further argued that the CBA expressly contemplates a zero-tolerance policy with respect to weapons, and, as such, “[t]he Arbitrator’s Award fails this point because the disciplinary steps involving harassment mandates termination for the first offense... [and] by ignoring the zero tolerance aspect of the rules, the Arbitrator did not abide by the essence of the [CBA].”

However, the appellate court agreed with the union that the employer was attempting to evade the court’s inevitable deference to the arbitrator’s findings of fact and interpretation of the CBA by suggesting that the arbitrator misapplied the terms of the zero-tolerance anti-harassment policy. Employing the essence test here, the employer did not dispute that the CBA encompassed the issue contemplated by the arbitrator. As to the second prong of the essence test, the arbitrator’s award drew its essence from and was rationally derived from the CBA because the anti-harassment policy explicitly contemplated a range of disciplinary measures for harassment offenses. The employer was simply required to conduct an investigation and undertake a course of action aimed at preventing further harassment.

Public policy exception. The employer further argued that the arbitrator’s award violated the public policy exception to the essence test. The union countered that the narrow public policy exception to the essence test did not apply here. It argued that the employee was subjected to a “significant disciplinary penalty.”

Neither party disputed that the conduct of the employee constituted harassment of the security guard. Although the anti-harassment policy differentiates between harassment and sexual harassment, the arbitrator concluded that the employee’s conduct only amounted to harassment. Thus, it was not clear that the well-defined, dominant public policy against sexual harassment was implicated in this matter.

Consequently, the arbitrator’s award did not undermine the state’s public policy against sexual harassment or the employer’s duty to the public.

The case is No. 49 C.D. 2024.

Judge: Wojcik, M.

Attorneys: Jill E. Nagy (Summers Nagy Law Offices) for Lehigh and Northampton Transportation Authority. Amy Louise Rosenberger (Willig, Williams & Davidson) for Amalgamated Transit Union Local 956.

Companies: Lehigh and Northhampton Transportation Authority; Amalgamated Transit Union, Local 956

Cases: Labor Arbitration ContractClaims Discrimination SexualHarassment StateLawClaims PennsylvaniaNews