PLAINTIFFS PETITION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTIVE RELIEF

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1 By: Deborah R. Willig, Esquire Attorney I.D. No By: Ralph J. Teti, Esquire Attorney I.D. No By: Linda M. Martin, Esquire Attorney I.D. No By: John R. Bielski, Esquire Attorney I.D. No By: Lauren M. Hoye, Esquire Attorney I.D. No WILLIG, WILLIAMS & DAVIDSON Counsel for Plaintiffs 1845 Walnut Street, 24 th Floor Philadelphia, PA Office: (215) Facsimile: (215) PHILADELPHIA FEDERATION OF : PHILADELPHIA COUNTY TEACHERS, AFT, LOCAL 3, AFL-CIO, : COURT OF COMMON PLEAS and JERRY JORDAN, President and Trustee : Ad Litem of the PHILADELPHIA : October Term, 2014 FEDERATION OF TEACHERS : 1816 Chestnut Street : Philadelphia, PA 19103, : No. : Plaintiffs, : : v. : PETITION FOR TEMPORARY : RESTRAINING ORDER AND SCHOOL DISTRICT OF PHILADELPHIA : PRELIMINARY INJUNCTIVE 440 North Broad Street : RELIEF Philadelphia, PA 19130; : and : SCHOOL REFORM COMMISSION : 440 North Broad Street : Philadelphia, PA 19130; : CIVIL ACTION EQUITY and : WILLIAM J. GREEN, IV in his official capacity : as Chairman and a Member of the SCHOOL : REFORM COMMISSION; FEATHER : HOUSTOUN, FARA JIMENEZ, MARJORIE : NEFF, SYLVIA P. SIMMS, in their official : 1

2 capacities as Members of the SCHOOL : REFORM COMMISSION : 440 North Broad Street : Philadelphia, PA 19130; : and : WILLIAM R. HITE, JR., in his official capacity : as Superintendent of Schools, : Schools, School District of Philadelphia : 440 North Broad Street : Philadelphia, PA 19130, : : Defendants. : PLAINTIFFS PETITION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTIVE RELIEF Plaintiffs Philadelphia Federation of Teachers, Local 3, AFT, AFL-CIO ( Federation or Union ) and its President and Trustee Ad Litem, Jerry Jordan, by and through the undersigned counsel, petition the Court to issue a temporary restraining order and preliminary injunction against Defendants School District of Philadelphia ( School District ), the School Reform Commission ( SRC or Commission ) as well as its chairman and members, and Superintendent William R. Hite, Jr. enjoining Defendants from implementing or otherwise enforcing unilateral changes to certain benefits for bargaining unit employees and directing Defendants to participate in expedited arbitration to resolve this contractual dispute pursuant to the terms of the parties expired Collective Bargaining Agreement ( CBA or Agreement ) and allowing a hearing examiner of the Pennsylvania Labor Relations Board ( PLRB or Board ) to issue a decision on the Federation s unfair labor practice charge contesting these changes. In support of this Petition, Plaintiffs aver as follows: 2

3 1. Plaintiffs incorporate by reference the averments set forth in their Complaint and the exhibits attached thereto in their entirety as though set forth herein. 2. Plaintiffs incorporate by reference their Memorandum of Law in its entirety as though fully set forth herein. 3. A party moving for a preliminary injunction under Pa. R.C.P must show that: (1) the injunction is necessary to prevent immediate and irreparable harm which cannot be compensated by damages; (2) a greater injury would result from refusing the injunction than from granting it; (3) the injunction properly restores the parties to their positions status quo ante; and (4) the right to relief is clear. Philadelphia v. Dist. Council 33, 528 Pa. 355, 361; 598 A.2d 256, 259 (Pa. 1991). 4. Pa. R.C.P (a) permits a court to grant injunctive relief without notice or hearing where: [I]t appears to the satisfaction of the court that immediate and irreparable injury will be sustained before notice can be given or a hearing held,... the court may issue a preliminary or special injunction without hearing or without notice. In determining whether a preliminary or special injunction should be granted and whether notice or a hearing should be required, the court may act on the basis of the averments of the pleadings or petition and may consider affidavits of parties or third persons or any other proof which the court may require. Pa. R.C.P. 1531(a). Plaintiffs Right to Relief Is Clear 5. Article XIII of the expired CBA outlines the various benefits provisions contractually-guaranteed to bargaining unit employees. See Ex. 1, CBA, Article XIII, at pp These benefits in some form have existed in the CBA in every one of the 1 All references to exhibits in this Petition are to documents compiled in Plaintiffs Exhibits in Support of Their Complaint in Equity for Temporary Restraining Order and Preliminary Injunctive Relief. 3

4 four negotiated Agreements between the Federation and the SRC since the latter s creation in At a special meeting of the SRC on October 6, 2014, Defendants unilaterally and illegally cancelled and announced their intention to modify existing employee benefits through passage of Resolution 1 ( SRC-1). Ex. 2, SRC A status quo temporary restraining order and preliminary injunctive relief are necessary as the Defendants are poised to eliminate or significantly diminish benefits that are contractually required. 8. Defendants are days away from starting the process to eliminate one of the current medical benefits plan options provided in the parties expired CBA and force employees into a lesser plan or pay a dramatic increase to have a more beneficial plan. Exs. 2, Defendants have announced a special open enrollment period for bargaining unit employees beginning this Monday, October 20, 2014 and ending November 14, 2014 to choose the lesser plan and pay a substantial employee contribution, ranging from 5% to 13% of the premium, for this plan. Id. 10. Effective December 15, 2014, Defendants will require employees pay $70 per biweekly paycheck if they elect to have their spouse, domestic partner, or other qualified family member covered under the School District s plan. Id. 11. Effective on July 1, 2015, they will unilaterally eliminate the provision that bargaining unit employees who opt out of medical benefits from the School District receive cash compensation for a portion of the cost of the plan. Id. 4

5 12. In addition, in just a few weeks, effective December 15, 2014, Defendants will cease making biweekly payments to the Philadelphia Federation of Teachers Health and Welfare Fund ( H&W Fund ), which provides dental, vision, and prescription coverage to bargaining unit employees and other participants. Id. 13. On July 1, 2015, Defendants will unilaterally end the H&W Fund s contractual role to provide dental, vision and prescription drug benefits. Instead, Defendants will have the School District of Philadelphia provide those benefits. Id. 14. Other contractually required benefits are also threatened in the near term. 15. The School District of Philadelphia refuses to make its next scheduled, biweekly payment to the Philadelphia Federation of Teachers Legal Services Trust Fund. ( Legal Services Fund ). Id. This payment is due on or about October 22, Furthermore, Defendants plan a special open enrollment period from October 20, 2014 through November 14, 2014 for a new, dramatically reduced wage continuation benefit. The new plan will cut the number of covered weeks from fifty-two (52) to twenty-six (26), effective December 15, Id. 17. In addition, Defendants plan to cease providing the contractually-required termination benefits for employees hired on or after December 15, 2014, but instead provide a substantially reduced benefit. Id. 18. Finally, Defendants have already imposed a single per diem wage rate on substitute teachers, whereby they ceased paying these employees three separate rates and instead imposed one rate, resulting in a reduction of the per diem wage rate for retired and certified, substitute teachers, and an increase for uncertified, substitute teachers. Id. 5

6 19. Article XV of the CBA provides for the arbitration of grievances arising from interpretation of the terms of the CBA. Id., CBA, Article XV. Pursuant to this provision, Plaintiffs filed a grievance and a demand for immediate arbitration challenging the Defendants unilateral cancellation and modification of benefits provided by the expired CBA. 20. The Public Employe Relations Act (Act of July 23, 1970, P.L. 563, No. 195, codified at 43 Pa.C.S , et seq.) ("PERA" or Act ) provides for the filing of unfair labor practice charges in the event that an employer violates the Act. Pursuant to this provision, Plaintiffs filed an unfair labor practice charge, challenging the Defendants unilateral and illegal cancellation and modification of benefits provided by the expired CBA. 21. Our Supreme Court ruled that parties to a collective bargaining agreement may seek an injunction to preserve the status quo during the pursuit of their remedies under the collective bargaining agreement. Mazzie v. Commonwealth of Pennsylvania, 495 Pa. 128, 136; 432 A.2d 985, 989 (1981). 22. This ruling is consistent with [t]he policy of this Commonwealth [that] not only favors but mandates the submission to arbitration of public employees grievances arising out of the interpretation of the provisions of a collective bargaining agreement. Neshaminy Fed n of Teachers v. Neshaminy Sch. Dist., 501 Pa. 534, 462 A.2d 629, 632 (1983). 23. The Federation s right to injunctive relief is clear as the CBA provides for the arbitration of contract interpretation disputes and nothing in the CBA gives the Defendants the right to cancel or modify benefits provisions set forth in the CBA. 6

7 24. Arbitration is appropriate because Plaintiffs and Defendants have previously arbitrated disputes regarding the SRC s previous attempts to cancel or modify existing terms and conditions of employment. 25. A hearing before a hearing examiner of the PLRB is appropriate because the PLRB has jurisdiction to resolve disputes concerning violations of the Act, including unilateral change to wages, hours of work, or other terms and conditions of employment. 26. An injunction to preserve the Federation s rights under the expired CBA and PERA is appropriate because this Court has previously enjoined other alleged violations of the CBA by the SRC in order to allow a labor arbitrator to hear the matter and issue a decision. Injunctive Relief Is Necessary to Prevent Immediate and Irreparable Harm Which Cannot Be Compensated By Damages 27. Through four separate negotiations between the SRC and the Federation, the parties have agreed to a panoply of benefits for bargaining unit employees. Id., CBA, Article XIII. 28. Nothing in the CBA gives the SRC the authority to cancel or modify these benefits, which the SRC negotiated and agreed to provide. 29. Nothing in Act 46 gives the SRC the authority to cancel or modify these benefits. In fact, attempts by the SRC to have the Pennsylvania courts recognize such authority failed. So did an attempt to amend Act 46 to give the SRC such authority. 30. Notwithstanding the clear provisions of the CBA, and the School District s obligation to maintain the status quo following its expiration, Defendants unilaterally and illegally cancelled and modified some of the benefits outlined in the CBA. 7

8 31. If the Federation is denied injunctive relief until the legality of the SRC s action is determined by a labor arbitrator or the PLRB, the Federation s members will doubt its power and ability to enforce the CBA and will lose faith in the Federation itself. 32. Our Supreme Court ruled that a unilateral change by an employer that undermines a union s power to enforce the existing collective bargaining agreement constitutes irreparable and immediate harm to a union because neither current nor future union members would have any use for a union powerless to enforce its current collective bargaining agreement. City of Philadelphia v. District Council 33, 528 Pa. 355, 364; 598 A.2d 256, 260 (Pa. 1991). 33. Absent injunctive relief, the Federation s ability to protect its members contractual interests and the members faith and confidence in the Federation will be irretrievably lost a loss which our courts hold constitutes immediate and irreparable harm. 34. Furthermore, it is well established in Pennsylvania that a public employer has neither the statutory nor the contractual rights to reduce or eliminate medical benefits during the pendency of negotiations. 35. Absent an injunction to maintain the status quo and to preclude Defendants from reducing or eliminating employee benefits, the Federation members employed by the School District will suffer immediate and irreparable harm that cannot be remedied by monetary damages. 36. Unless enjoined, the unilateral and illegal cancellation or modification of these contractually-guaranteed benefits will cause chaos as the School District conducts enrollment periods for bargaining unit employees who are now unsure of the 8

9 nature of the benefits that they actually possess or will possess. Without the imposition of an injunction by this Court to allow a labor arbitrator and a hearing examiner of the PLRB to render decisions on the Federation s grievance and unfair labor practice charge, there undoubtedly will be delays, a waste of tax payer money and other resources for both the School District and the Federation, and confusion and chaos among bargaining unit employees in the event a labor arbitrator and/or a hearing examiner of the PLRB agree with the legal position of the Federation. 37. The School District is imposing premium coinsurance of 5% of medical premiums for employees earning up to $25,000; 10% of medical premiums for employees earning $25,000 up to $55,000; and 13% of medical premiums for employees earning $55,000 and over. In addition, in order to add a spouse who may have coverage under his or her own plan, the employee will have to pay an additional $70 per paycheck, regardless of the cost or quality of the spouse s health coverage. (Individuals may also pay a significant fee to buy up to retain the current coverage.) 38. For many individuals, the additional premium costs and costs of deductible and copayments under the modified Personal Choice 320 Plan pose insurmountable barriers to care, even for those using IBC network providers. For example, for drug or alcohol rehabilitation, an individual seeking in-patient treatment faces up to $6350 in individual out-of-pocket costs, putting such treatment even when medically necessary beyond the reach of the patient. Similarly, a patient for whom a colonoscopy has been prescribed because of suspicious polyps faces many thousands of out of pockets costs and may be forced to forego this test until cancer or other serious conditions develop. It 9

10 is not possible to assess the cost or risk of foregone care and these barriers to care could affect thousands of employees. 39. Under the current plan, assisted reproductive care is covered 100%. Under the modified Personal Choice 320 Plan, these services are not covered. For individuals currently undergoing this course of treatment, the timing and completion of the course of treatment is crucial. Termination of this benefit may result in an inability to conceive when a continuation of the course of treatment would otherwise have made it possible. 40. Although the premium copayments described in paragraph 71 are payable in pre-tax dollars, the deductibles and coinsurance are, except for those individuals whose medical expenses are high enough to meet the threshold for deductibility, paid in post-tax dollars. In the event that it is ultimately determined that School District must return to the current plan of benefits, it will be a nearly impossible administrative task for School District to repay each individual employee for each out-of-pocket cost that the employees incurred. Therefore, it is most unlikely that employees could be made whole for amounts they would be forced to pay under the Personal Choice 320 Plan. 41. In the event that the School District must return to the current plan, it will be a Herculean task to make individuals whole for the premium copayments made for the modified Personal Choice 320 Plan, assuming that School District is able to remit these reimbursements at all. a. The premium copayments will be paid by employees on a pre-tax basis. In the event that these amounts must all be returned to employees, the monies will have to be added back into the individual s wages and then remitted to the 10

11 employees as post-tax dollars. This task would require an enormous and costly effort on the part of the School District. b. Given the financial straits of the School District, once the money is taken from employees, there can be no assurance that School District will be able to remit the money if the current plan is restored. The School District self-insures the medical benefits, meaning that the money paid over to IBC is, in turn, paid over to providers for services that the providers have rendered. Once paid to providers for services actually rendered, the School District has no recourse to recover these funds. Given that millions of dollars are potentially at stake, and the School District has no funds from which to draw for these monies, the employees could be left without recourse to recover their monies. 42. Absent injunctive relief maintaining the status quo pending resolution of the Federation s grievance and its unfair labor practice charge the School District s teachers will be irreparably harmed. A Greater Injury Would Result From Refusing The Preliminary Injunction than From Granting It 43. If the relief sought by Plaintiffs is granted, Defendants will be required to comply with the benefits provisions of Article XIII which have been a part of the CBA between the Federation and the SRC for many years and historically followed without exception. 44. Without injunctive relief, the Federation and its members will lose bargained for rights and the Federation will be deprived of its ability to effectively advocate for and represent its members. 11

12 45. No injury will befall the Defendants should the Court grant Plaintiffs injunctive relief as Defendants would be required simply to comply with the benefit provisions of the CBA to which they agreed. Conversely, absent injunctive relief Plaintiffs will lose bargained for rights, the ability to effectively enforce the CBA and the confidence and faith of their members. The Injunction Properly Restores the Parties To Their Positions Status Quo Ante 46. The temporary restraining order and preliminary injunction will prohibit the Defendants from cancelling and/or modifying hard-won benefits agreed to by the parties at the negotiation table and will require them to comply with those benefits until rulings are issued on the Federation s grievance and unfair labor practice charge. 47. Accordingly, a temporary restraining order and preliminary injunction will properly restore the parties to their status quo ante. WHEREFORE, Plaintiffs respectfully request the Court issue an order directing Defendants to participate in an expedited arbitration before an arbitrator mutually selected by the parties pursuant to the CBA and enjoining Defendants from cancelling or modifying existing employee benefits until such times as an arbitrator resolves the parties contractual dispute and the PLRB resolves the Federation s unfair labor practice charge. 12

13 Respectfully submitted, WILLIG, WILLIAMS & DAVIDSON BY: /s/ John R. Bielski DEBORAH R. WILLIG, ESQUIRE RALPH J. TETI, ESQUIRE LINDA M. MARTIN, ESQUIRE JOHN R. BIELSKI, ESQUIRE LAUREN M. HOYE, ESQUIRE Counsel for Plaintiffs Dated: October 16,

14 PHILADELPHIA FEDERATION OF : PHILADELPHIA COUNTY TEACHERS, AFT, LOCAL 3, AFL-CIO, et al., : COURT OF COMMON PLEAS : Plaintiffs, : October Term, 2014 : v. : : No. SCHOOL DISTRICT OF PHILADELPHIA, : et al., : : CIVIL ACTION EQUITY Defendants. : CERTIFICATE OF SERVICE I, John R. Bielski, hereby certify that I served a copy of the Complaint, Motion for Temporary Restraining Order and Preliminary Injunctive Relief, proposed orders, supporting Memorandum of Law, and Plaintiffs Appendices of Exhibits in Support of Their Complaint, Volumes I and II, upon the following by on October 16, 2014 and hand delivery on October 17, 2014: Michael Davis, Esquire General Counsel The School District of Philadelphia Third Floor, Portal C, Suite North Broad Street Philadelphia, PA (215) Ronak Chokshi, Esquire Assistant General Counsel The School District of Philadelphia Third Floor, Portal C, Suite North Broad Street Philadelphia, Pennsylvania (215)

15 Talib Ellison, Esquire The School District of Philadelphia Third Floor, Portal C, Suite North Broad Street Philadelphia, Pennsylvania (215) /s/ JOHN R. BIELSKI DATED: October 16,