State System of Higher Education (Cheyney University) v. State College University Professional Association (PSEA-NEA)

In State System of Higher Education (Cheyney University) v. State College University Professional Association (PSEA-NEA), 560 Pa. 135, 743 A.2d 405 (1999), our Supreme Court noted that a reviewing court should not inquire into whether the arbitrator's decision is reasonable or even manifestly unreasonable, but whether the award may, in any way, be rationally derived from the agreement between the parties, "viewed in light of its language, its context, and any other indicia of the parties' intention." Id. In Cheyney University the Supreme Court articulated a precise two-part analysis for judicial review of arbitration awards, called the essence test: first, courts must determine if the issue as properly defined is within terms of the collective bargaining agreement; and, second, if the issue is so embraced by the agreement and thereby properly before the arbitrator, then the arbitrator's award is to be upheld if his/her interpretation can rationally be derived from the agreement. In other words, a court will vacate an arbitration award only when it "indisputably and genuinely" lacks foundation in or fails to logically flow from the parties' agreement. Id. at 150, 743 A.2d at 413. The Court held: We believe that the role for a court reviewing a challenge to a labor arbitration award under Act 195 is one of deference. We hold that in light of the many benefits of arbitration, there is a strong presumption that the Legislature and the parties intended for an arbitrator to be the judge of disputes under a collective bargaining agreement. That being the case, courts must accord great deference to the award of the arbitrator chosen by the parties. A fortiori, in the vast majority of cases, the decision of the arbitrator shall be final and binding upon the parties. However, there exists an exception to this finality doctrine. The arbitrator's award must draw its essence from the collective bargaining agreement. Pursuant to the essence test as stated today, a reviewing court will conduct a two-prong analysis. First, the court shall determine if the issue as properly defined is within the terms of the collective bargaining agreement. Second, if the issue is embraced by the agreement, and thus, appropriately before the arbitrator, the arbitrator's award will be upheld if the arbitrator's interpretation can rationally be derived from the collective bargaining agreement. That is to say, a court will only vacate an arbitrator's award where the award indisputably and genuinely is without foundation in, or fails to logically flow from, the collective bargaining agreement. Id. at 149-150, 743 A.2d at 413. The Court went on to explain that the essence test is one of rationality, not reasonableness, and that a rationality test is even more deferential than a reasonableness test. We acknowledge that the terms "rational" and "reasonable" have often been used interchangeably as part of the standard of review. Indeed, in common parlance, the two words have similar meanings. However, we find that in the context of review of an Act 195 labor arbitration award, determining an award to rationally be derived from a collective bargaining agreement connotes a more deferential view of the award than the inquiry into whether the award is reasonable. An analysis of the "reasonableness" of an award too easily invites a reviewing court to ignore its deferential standard of review and substitute its own interpretation of the contract language for that of the arbitrator. Thus, we find that in this very limited context, a review of the "reasonableness" of an award is not the proper focus. Id. at 150 n. 8, 743 A.2d at 413 n. 8.