IN THE COMMONWEALTH COURT OF PENNSYLVANIA

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Jeffrey Kovach, Winona Kovach and : Debra Doriguzzi, : : Appellants : : v. : No. 1303 C.D. 2012 : Tri County Joint Municipal Authority : Submitted: April 16, 2013 BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE COHN JUBELIRER FILED: August 19, 2013 Jeffrey Kovach, Winona Kovach, and Debra Doriguzzi (collectively, Employees) appeal from the June 11, 2012 Order of the Court of Common Pleas of Washington County (trial court) that denied their appeal and affirmed the September 16, 2011 decision of the Tri County Joint Municipal Authority (Authority), which held that, for the entire period of Employees employment, their municipal pension multiplier was 1/80 and not 1/30. 1 For the following reasons, we reverse. 1 We have questions about whether this particular dispute between the Authority and Employees should have been resolved through adjudication before the Authority s Board of Directors with appellate review by the court of common pleas under the Local Agency Law, 2 Pa. C.S. 551 555, 751 754. In fact, when Employees first requested a hearing, the Authority refused the request. Thereafter, Employees apparently initiated an action in the trial court seeking relief that would compel Employer to conduct a hearing. The trial court, however,

I. Background Employees are non-union, salaried employees of the Authority: Mr. Kovach was hired as the Authority s general manager in 1996; Ms. Kovach, the office manager, was hired in 1987; and Ms. Doriguzzi, the billing clerk, was hired in 1988. The Authority also employs hourly employees, who are represented by the United Steelworkers of America (Union) and with whom the Authority maintains collective bargaining agreements (CBAs). Prior to his position as general manager, Mr. Kovach worked for the Authority as a Union worker beginning in 1975. (Authority Adjudication, Findings of Fact (FOF) 1-6.) Since at least 1978, the Authority has maintained a single pension plan for all of its employees with the Pennsylvania Municipal Retirement System (PMRS), which is governed by the Pennsylvania Municipal Retirement Law 2 (Law), as set granted the preliminary objection and dismissed Employees mandamus action. Kovach v. Tri- County Joint Municipal Authority, (Washington County, No. 2009-835, filed November 25, 2009). Employees appealed that ruling to this Court. Kovach v. Tri County Joint Municipal Authority, (Pa. Cmwlth., No. 2538 C.D. 2009). But before this Court could rule on that appeal, Employees filed a praecipe for discontinuance to terminate the appeal. It appears that they did so because Employer agreed to conduct the public hearing. Had that appeal continued, we likely would have addressed the question of whether the Authority s Board of Directors, rather than the trial court in its original jurisdiction, was the appropriate body to decide this dispute, which sounds in contract, in the first instance. Because the parties have not briefed this question in this appeal, in light of the time and resources invested by the parties, and in the interest of judicial economy, we choose not to raise this issue sua sponte. Instead, we will review this matter as it has been presented to us i.e., as an appeal of a local agency adjudication under the Local Agency Law. 2 Act of February 1, 1974, P.L. 34, as amended, 53 P.S. 881.101 881.501. The Authority operates a single pension plan for both its Union and salaried employees. That pension plan is maintained under Article IV of the Law, entitled Optional Retirement Plans, which allows municipal entities to enroll in PMRS and provide retirement benefits different from the Law s other pensions, which statutorily outline the specific contribution and benefit rates. Section 401 of the Law, 53 P.S. 881.401. If a municipality elects to join PMRS under Article 2

forth in a resolution adopted by the Authority s Board of Directors (Board) on July 20, 1978 (1978 Resolution). (1978 Resolution, R.R. at 358a-59a.) Prior to passing the 1978 Resolution, the Authority received an actuarial cost study from PMRS setting forth the parameters of the pension request from the Authority to switch to an Article IV Optional Retirement Plan and stating that [t]he normal superannuation retirement benefit equals 1/80 times final average salary times years of service. (Letter from PMRS to the Authority (March 2, 1978) at 1, R.R. at 354a.) In 1994, 1997, 1998, and 1999, PMRS sent Employees Member Statements (Statements), which reflected that PMRS was applying a pension multiplier of 0.0125 (the decimal equivalent to 1/80) to calculate Employees benefits and indicated that, if there were any questions or concerns regarding the Statements, they should call PMRS. Employees received these Statements and did not contact PMRS. (FOF 7-8, 21-22.) In 1978, the Authority entered into a CBA with the Union that identified the pension formula as: each employee will receive 1/80th times the final 5 years average salary multiplied by the years of service. (1978 CBA art. 24, R.R. at 372a.) The 1980 CBA reflected this same formula for calculating employee pensions. (1980 CBA art. 24, R.R. at 394a.) The Authority and the Union negotiated a new CBA in 1982, which contained a different pension multiplier of IV, it negotiates a contract setting forth the specific details of the contribution rates and benefits with the PMRS Board. Section 402 of the Law, 53 P.S. 881.402. The municipality then passes an ordinance or resolution electing to join the system, and confirming the terms of the contract by reference thereto. Id. Section 403 outlines the requirements of the contract between PMRS and the municipal entity. 53 P.S. 881.403. Unlike other PMRS retirement plans, Article IV pension plans establish the member contributions rates, vesting terms, and disability retirement formulas in the agreement between the municipal entity and the PMRS Board. Sections 405, 410, and 411 of the Law, 53 P.S. 881.405, 881.410-11. 3

1/30. From 1982 until 1999 the CBAs between the Authority and the Union reflected the 1/30th multiplier. Additionally, in 1994 and 1999 the Authority presented Employees with a handbook titled Office Staff Policy (Handbooks), which, mirroring the CBA pension provisions, identified the Employees pension multiplier as 1/30. However, the Handbooks stated that: All of the terms and conditions of this policy are subject to change by the Board of Directors. This policy is not intended to be a contract or agreement between the parties and the parties do not intend to be legally bound by said policy. (FOF 9, 16-18.) The conflict in this matter began in 2004 when, during the 2004 CBA negotiations, Board member Lawrence McCusker questioned the use of the 1/30th multiplier. Mr. McCusker contacted Ms. Kovach, who handled the Authority s pension issues, and who, according to Mr. McCusker, advised him that the multiplier was 1/80. The Authority advised the Union of what it believed was the typographical error in the pension multiplier language, and the Union did not agree. The Union filed a grievance, the Authority denied the grievance, and the matter went before an arbitrator (Arbitrator). (FOF 23-28, 32.) Before the Arbitrator, the Union argued that, per the plain language of the CBAs beginning in 1982 and continuing through June 30, 2004, the applicable pension multiplier for the Authority s employees was 1/30, and the Authority was violating the CBAs by not funding the pension plan and providing its retirees with benefits at that level. The Union presented, inter alia, the testimony of a Union bargaining representative present at the 1982 negotiations, who stated that the change to the pension multiplier was negotiated in exchange for smaller wage 4

increases. The Authority asserted that the change in the pension multiplier was a mutual mistake resulting from a clerical error and, as such, the CBAs should be reformed to reflect the parties actual intention that the pension multiplier should be 1/80. The Authority offered, inter alia, the testimony of Mr. McCusker, who was not present during the 1982 negotiations, but who surmised that the change was the result of a clerical error because the Authority did not obtain a new actuarial study for the increased pension multiplier, Board meeting minutes contemporaneous to the 1982 negotiations did not mention a change in the pension multiplier, PMRS Statements sent to the Authority s employees identified the pension multiplier as 0.0125 (the decimal equivalent to 1/80), and the employees who had retired under these CBAs were receiving benefits based on a pension multiplier of 1/80. (Arbitrator Award at 3-8, R.R. at 322a-27a.) Citing the plain language of the 1982 CBA, the CBAs for 22 years thereafter, 3 and the Union s evidence, the Arbitrator held that the Union had established a prima facie case for its grievance, there was not a mutual mistake, and the Union reasonably relied on the plain language of the CBAs to believe that the Authority was maintaining and funding its pension plan in accordance with that contract language. (Arbitrator Award at 11-14, 17, R.R. at 330a-33a, 336a.) However, the Arbitrator rejected the Union s suggested remedy of calculating employee retirement benefits at the higher multiplier retroactive to 1982 because: the CBAs grievance provisions require the parties to resolve differences 3 The Arbitrator noted that the pension provision in these CBAs was unusual because, generally, such provisions do not set forth specific descriptions of how the employees pension benefits would be calculated, but simply state that a pension will be provided under the pension plan documents. (Arbitrator Award at 10-11, R.R. at 329a-30a.) 5

immediately and does not permit the imposition of onerous liability on the Authority for an unintentional violation that went undiscovered for twenty years; there was no evidence of deceit; and the affected employees could have discovered the deficiencies with modest effort. Therefore, the Arbitrator directed the Authority to increase the pension of retirees who retired after June 1, 1985 to 1/30 beginning as of September 1, 2004, compensate the already-retired workers for the difference between the pensions they received using the 1/80th multiplier and what they should have received with the 1/30th multiplier beginning with September 1, 2004, and appropriately modify and fund its pension plan to reflect the 1/30th multiplier. (Arbitrator Award at 17-20, R.R. at 336a-39a.) In addition, the Arbitrator stated that the parties could continue to bargain on the subject of a proper multiplier to be included in their [CBA]. (Arbitrator Award at 20, R.R. at 339a.) Thereafter, the Authority and Union entered into a Settlement Agreement on September 5, 2007 resolving the Union s grievance and the Arbitrator s Award. Under that Settlement Agreement, Union members who had already retired were granted retirement benefits using the 1/30th multiplier and currently employed Union workers received a $10,000 bonus in exchange for their agreement that, irrespective of the Arbitration Award, their pensions would be calculated using the 1/80th multiplier at least until June 30, 2012. (Settlement Agreement 4-5, R.R. at 426a.) The Settlement Agreement specified that only members of the bargaining unit would obtain a benefit from the Settlement Agreement. Notwithstanding this statement, two already-retired Authority office employees, the former general manager and former office manager, had their pension benefits adjusted pursuant 6

to the Arbitrator s Award and Settlement Agreement. (Letter from PMRS to Frank C. Hoak (August 28, 2008), R.R. at 181a; Letter from PMRS to Edith Greskovich (August 28, 2008), R.R. at 183a; Hr g Tr. at 103-05, R.R. at 126a-28a.) The 1/80th multiplier set forth in the Settlement Agreement was incorporated into a new CBA entered into on September 5, 2007, effective from July 1, 2004 until June 30, 2012, and the Union and Authority agreed to negotiate what pension multiplier would apply after June 30, 2012. (Settlement Agreement 1, 3-4, 16, R.R. at 425a-27a; 2004 CBA, art. 24, R.R. at 442a.) The Authority adopted a new pension plan resolution on July 2, 2008 (2008 Resolution) to replace the 1978 Resolution, which provides for a pension multiplier of 1/80. (FOF 33-38.) While the Union s grievance was being resolved, the Authority presented Employees with letters in December 2004 (2004 Letters) identifying their annual salaries through 2007 and indicating that: Your retirement benefits (if applicable) shall be calculated according to the formula used and established by [PMRS]. You have agreed that the calculation used by [PMRS] is and has always been the correct calculation for your retirement benefits. (FOF 29-30.) Ms. Kovach and Ms. Doriguzzi signed the letters. (FOF 31.) Employees requested, via letters dated March 28, 2008 and July 11, 2008, that the Authority calculate their pensions using the 1/30th multiplier identified in the CBAs and Handbooks, and the Authority declined. Employees requested a hearing on this decision, and the Authority held a public hearing on April 11, 2011. 4 4 There was a three-year lapse between the time Employees sent their letter to the Authority and the hearing before the Authority because there was a dispute between the parties concerning whether the Authority was required to hold a hearing, which was resolved with a settlement agreement. 7

II. Decisions Below At the hearing, Employees asserted that they had an enforceable contract right to the 1/30th multiplier based on the CBAs and/or the Handbooks. They further testified that, when they accepted their current positions, they were told that their benefits would be the same as the Union s benefits, including the 1/30th multiplier, and that they would not have left their prior jobs, which paid more, absent this representation. (Hr g Tr. at 21, 56-57, 63-64, R.R. at 44a, 79a-80a, 86a-87a.) The Authority contended, as it did before the Arbitrator, that the 1/30th multiplier established in the 1982 CBA, which continued through the CBAs until the 1999 CBA, was the result of a clerical error. In addition to the 1978 Resolution and actuarial study from PMRS, which used the 1/80th multiplier, the Authority provided a copy of its Board minutes from June 1982 when they negotiated the 1982 CBA, which did not reflect negotiations on the pension multiplier. Moreover, the Authority asserted that, per PMRS rules, it could not have changed the pension multiplier without obtaining an actuarial study, and the Authority did not request a new study using the 1/30th multiplier. Finally, the Authority noted that it had not increased its contributions to PMRS to reflect the 1/30th multiplier. (FOF 10-11, 13-15.) In its adjudication, the Authority rejected Employees arguments, concluding that they did not have any contractual rights under the Handbooks, they were notified on numerous occasions through clear and concise language of their pension benefits, and it has not changed or reduced the benefits that Employees 8

relied upon to accept their positions. (FOF 43-44, 49.) The Authority concluded that Employees receipt of the 1994, 1997, 1998 and 1999 Statements from PMRS, which reflected the 0.0125 rate, and their failure to contact PMRS to inquire about any potential discrepancy meant that they knew that their pensions were being calculated using the 1/80 multiplier. Moreover, the Authority held that Ms. Kovach and Ms. Doriguzzi specifically accepted the application of the 1/80th multiplier by signing the 2004 Letters outlining their salaries and pension benefits. The Authority further noted that Mr. McCusker credibly testified that Ms. Kovach told him in 2004 that the pension multiplier was 1/80. In addition, the Authority held that it is not bound by the Arbitrator s conclusions for these non-union employees and, therefore, Mr. Kovach was not entitled to the 1/30th multiplier to calculate the years he worked as a Union employee. Finally, the Authority found that, like the Arbitrator s Award, the terms of the Settlement Agreement did not apply to Employees. (FOF 36-37, 39(b), 39(c), 40(b), 41(a), 43-50.) Employees appealed to the trial court, which affirmed without taking additional evidence. 5 Employees now appeal to this Court. 6 5 Employees take issue with the trial court s consideration of their appeal from the Authority s decision, questioning whether the trial court judge, Judge Paul Pozonsky, had reviewed the record prior to issuing the June 11, 2012 Order affirming the Authority s decision. Employees requested reconsideration with the trial court s President Judge asserting that: at the outset of oral arguments, Judge Pozonsky admitted that he had not reviewed the parties briefs; media reports suggested that Judge Pozonsky was in Alaska during the time he was to be considering Employees appeal; the trip overlapped with the issuance of the June 11, 2012 Order; and Judge Pozonsky s abrupt resignation from the bench on June 30, 2012 led to questions regarding the Order. (Employees Br. at 5-6.) The President Judge declined to grant reconsideration. At the time of the appeal hearing, Judge Pozonsky was under investigation for various crimes and recently has been charged with, inter alia, crimes related to his alleged theft of evidence. http://www.post-gazette.com/stories/local/washington/former-washington-countyjudge-pozonsky-faces-theft-drug-charges-688829/, last visited on July 11, 2013. Although we are troubled by Employees allegations regarding the trial court s consideration of their appeal, because there was a complete record made before the Authority and the trial court did not take 9

III. Arguments and Analysis Employees argue, inter alia, that their pension benefits are governed by the terms of the CBAs between the Union and the Authority, as well as the Handbooks Employees received from the Authority, all of which set forth their pension multiplier at 1/30. Employees assert, for various reasons, that their interpretation of the terms of these documents is correct and supported by the Arbitrator s Award. Thus, according to Employees, they should be entitled to a pension multiplier of 1/30 for the entirety of their careers with the Authority as salaried employees. In response, the Authority argues that the CBAs and Arbitrator s Award have no applicability to the non-union Employees and that the Handbooks were not contracts on which Employees could rely upon for setting forth the terms of their Authority-funded pension. The Authority maintains that its determination is supported by substantial evidence and must be affirmed on appeal. The goal of contract interpretation is to ascertain and effectuate the intent of the parties to the contract. TruServ Corp. v. Morgan s Tool & Supply Co., Inc., 614 Pa. 549, 561, 39 A.3d 253, 260 (2012). [T]he interpretation of the terms of a contract is a question of law for which our standard of review is de novo, and our additional evidence, this Court is not reviewing the trial court s Order on appeal, but the Authority s decision. In re Rainmaker Capital of Chestnuthill, LLC, 23 A.3d 1117, 1122 (Pa. Cmwlth. 2011.) 6 This Court s review of local agency adjudications where, as here, a complete record is made before the agency, is to hear the appeal on the record supplied, and [this Court] shall affirm the local agency s adjudication unless it violates constitutional rights, is not in accordance with law, violates the statutory provisions governing practice and procedure before local agencies, or contains necessary findings that are not supported by substantial evidence. In re Rainmaker, 23 A.3d at 1122. 10

scope of review is plenary. McMullen v. Kutz, 603 Pa. 602, 609, 985 A.2d 769, 773 (2009). Reduced to their essence, the intention and understanding of the Authority, Employees, and Union is that the Authority will maintain, via PMRS, one pension plan for all of its employees. This intention requires that both Union and non- Union employees who are eligible for the pension receive the same benefits once they retire. Although the Authority asserts that the CBAs do not apply to Employees, the pension provision of those documents must, by necessity, set the pension terms for Employees. It was not until 1994, more than six years after the Authority hired Ms. Doriguzzi and Ms. Kovach, that the Authority provided them with a written document, other than the Union CBAs, that explained the Authority s pension benefits. In fact, when the Authority finally provided Employees with the Handbooks, the substantive language in the Handbooks and CBAs concerning the pension plan was identical. (1994 CBA, art. 24, R.R. at 295a-96a; 1994 Handbook, art. 7, R.R. at 141a; 1999 CBA, art. 24, R.R. at 315a- 16a; 1999 Handbook, art. 7, R.R. at 167a.) 7 The 1994 and 1999 Handbooks were 7 The 1994 and 1999 CBAs state: It is understood and agreed that the Authority is a member of the State Municipal Employees Retirement System and it is agreed that the pension plan now in effect for the employees of the Authority under that System shall continue during the length of this Agreement subject to the following terms: The Authority shall, during the term of this Agreement, provide benefits in accordance with Article IV of the [Retirement Law]. As a result, each employee will receive 1/30 times the final five (5) years average salary multiplied by the years of service. The Authority hereby agrees to pay the estimated costs thereof, less employee contribution of 3.5% of the annual salary. The Authority agrees to pay for prior unfunded service liability. 11

approved by the Board after the effective dates of the 1994 and 1999 CBAs. (Board Meeting Minutes, October 26, 1994 at 4, R.R. at 149a; Board Meeting Minutes, October 27, 1999 at 2-3, R.R. at 173a-74a.) Hence, it appears that the Authority simply took the CBA pension provision, inserted it into the Handbook and, therefore, intended that the pension plan the Authority provided to its Union employees be extended to its non-union employees. Because the pension terms of the CBAs and Handbooks were intended, by necessity, to be the same for both Union and non-union employees and the Arbitrator has already interpreted those terms for the purposes of the CBA, we must look to the Arbitrator s Award and the parties subsequent conduct for guidance in this matter. To do otherwise would create two distinct classes of retirees and would frustrate the parties intent to provide a single pension plan for all of the Authority s employees. The Arbitrator concluded that the terms of the Authority s pension plan, set forth in the CBAs, established a pension multiplier of 1/30 beginning with the (1994 CBA, art. 24, R.R. at 295a-96a; 1999 CBA, art. 24, R.R. at 315a-16a.) The 1994 and 1999 Handbooks provide: The Authority is a member of the State Municipal Employees Retirement System and it is agreed that the pension plan now in effect for the employees of the Authority under that System shall continue till further action by the [B]oard subject to the following terms: The Authority shall, till further action by the [B]oard, provide benefits in accordance with Article IV of the [Retirement Law]. As a result, each employee will receive 1/30 times the final five (5) years average salary multiplied by the years of service. The Authority will... pay the estimated costs thereof, less employee contribution of 3.5% of the annual salary. The Authority will pay for prior unfunded service liability. (1994 CBA, art. 7, R.R. at 141a; 1999 CBA, art. 7, R.R. at 167a.) 12

1982 CBA. However, for various reasons, the Arbitrator directed that his Award, i.e., the increased pension benefit, would commence September 1, 2004 and that future pension terms would be subject to collective bargaining. Following the Arbitrator s Award, a settlement was reached whereby: already-retired Authority employees would receive the higher pension multiplier based on the Arbitrator s Award; the Authority s Union employees were not entitled to a pension multiplier of 1/30 prior to June 30, 2012, and the pension multiplier to be applied after that date would be negotiated; and active union members, who would otherwise have had their pension benefits calculated at the 1/30th multiplier beginning on September 1, 2004 per the Arbitrator s Award, would receive a $10,000 bonus for giving up their rights to those higher benefits. (Settlement Agreement, Fourth Whereas Clause & 3-5, R.R. at 425a-26a.) On the same day the Authority and Union signed the Settlement Agreement, September 5, 2007, the Union and the Authority entered into a new CBA, effective July 1, 2004 through June 30, 2012. This new CBA reflected the new pension terms outlined in the Settlement Agreement and changed the pension multiplier to 1/80. 8 (2004 CBA, art. 24, R.R. at 442a.) 8 Article 24 of the 2004 CBA states: It is understood and agreed that the Authority is a member of the State Municipal Employees Retirement System and it is agreed that the pension now in effect for the employees of the Authority under that System[] shall continue during the length of this Agreement, subject to the following terms: The Authority shall, during the term of this Agreement, provide benefits in accordance with Article IV of the [Retirement Law]. As a result, each employee will receive 1/80 or (1.25%) times the final five (5) years average salary, multiplied by the years of service. The Authority hereby agrees to pay the estimated costs thereof, less employee contribution of 3.5% of the annual salary. The Authority agrees to pay for prior unfunded service liability. 13

Although the Authority asserts that the Settlement Agreement and Arbitration Award apply only to bargaining unit members, the record suggests otherwise. The parties course of conduct is always relevant in interpreting a writing, Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 376 n.6, 390 A.2d 736, 741 n.6 (1978), and is often the strongest indication of the intention of the parties to the contract, Sun Co., Inc. (R&M) v. Pennsylvania Turnpike Commission, 708 A.2d 875, 880 (Pa. Cmwlth. 1998). Following the Arbitrator s Award and Settlement Agreement awarding the 1/30th pension multiplier to those Authority employees who had already retired, PMRS sent letters to Frank Hoak and Edith Greskovich informing them that, as a result of the Settlement Agreement and Arbitrator s Award, their pension benefits were being increased as of September 1, 2004. (Letter from PMRS to Frank C. Hoak (August 28, 2008), R.R. at 181a; Letter from PMRS to Edith Greskovich (August 28, 2008), R.R. at 183a.) Mr. Hoak was the Authority s general manager, and Ms. Greskovich was the Authority s office manager; both are non-union positions. (Hr g Tr. at 103-05, R.R. at 126a-28a.) There is no indication in the record that the Authority objected to PMRS altering Mr. Hoak s and Ms. Greskovich s benefits in accordance with the Arbitrator s Award and Settlement Agreement and, although it was pointed out during the hearing that Mr. Hoak and Ms. Greskovich received benefits using the 1/30th multiplier, the Authority did not explain the non-union employees receipt of increased pension benefits. (Hr g Tr. at 103-05, R.R. at 126a-28a.) If, as the Retirement benefit is computed as follows: 1. Average of the last five (5) years of salary 2. Multiplied by 1.25% 3. Multiplied by years of service = Annual Retirement Benefit (2004 CBA, art. 24, R.R. at 442a.) 14

Authority asserts, neither the Arbitrator s Award nor the Settlement Agreement were to apply to those outside the bargaining unit or, if the Authority s non-union employees pension benefits were to be different from the Union s pension benefits, then neither of these non-union employees would have had their pension benefits recalculated to reflect the 1/30th multiplier. Considering this course of conduct, in addition to the language of the CBAs and Handbooks, PMRS studies, PMRS contracts, and various resolutions passed by the Authority, we conclude that the parties intention has always been to maintain a single pension plan for both Union and non-union employees and that all of the Authority s employees are entitled to the same benefits. Employees claim that they should receive what the Union employees receive because there is only one pension plan. We, for the foregoing reasons, agree. Here, despite the Arbitrator s Award, the most recent CBA drafted pursuant to the Settlement Agreement, set the pension multiplier at 1/80 from July 1, 2004 through June 30, 2012 and their non-union employee pension benefits accrued at that level during that time. Thus, like their Union-employee counterparts, Employees pension multiplier was 1/80 and remained at that level until June 30, 2012. Unlike their Union employee counterparts, however, Employees were not compensated for giving up their rights to the higher pension benefits they were entitled to following the Arbitrator s Award. Because we conclude that it is the parties intent that all of the Authority s employees are to be treated the same with regard to their pension benefits, and the record shows that the Settlement Agreement and Arbitrator s Award were applied to non-union employees, we hold that Employees must be compensated for the elimination of their rights to the 1/30th pension multiplier 15

from September 1, 2004 through September 5, 2007. The Settlement Agreement sets that compensation at $10,000 per employee and that provision of the Settlement Agreement, like the other provisions, should apply to Employees in the same way it applied to the Authority s Union employees. Our holding is consistent with the parties intent and conduct that, for the purposes of the Authority s pension plan, all of its employees should be treated identically. IV. Conclusion For the foregoing reasons, we reverse the trial court s Order affirming the Authority s decision in which it did not recognize that the pension benefits for Employees must be the same as those for the Union employees. The terms of the Settlement Agreement must be applied to Employees based on the parties course of conduct, and Employees are entitled to the compensation of $10,000.00 as set forth in the Settlement Agreement for the elimination of their rights to the 1/30th pension multiplier from September 1, 2004 through September 5, 2007. RENÉE COHN JUBELIRER, Judge 16

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Jeffrey Kovach, Winona Kovach and : Debra Doriguzzi, : : Appellants : : v. : No. 1303 C.D. 2012 : Tri County Joint Municipal Authority : O R D E R NOW, August 19, 2013, the Order of the Court of Common Pleas of Washington County in the above-captioned matter is hereby REVERSED in accordance with the foregoing opinion. RENÉE COHN JUBELIRER, Judge