Gustafson, P. v. American Fed. of State, Aplt.

[J-29-2025] [MO: Mundy, J.]

IN THE SUPREME COURT OF PENNSYLVANIA WESTERN DISTRICT

PENNY GUSTAFSON, : No. 24 WAP 2024 : Appellee : Appeal from the Order of the : Commonwealth Court entered : February 20, 2024, at No. 1298 CD v. : 2022, reversing and remanding the : Order of Cambria County Court of : Common Pleas entered February AMERICAN FEDERATION OF STATE, : 11, 2022, at No. 2021-3223.

COUNTY, AND MUNICIPAL EMPLOYEES, : COUNCIL 13; AMERICAN FEDERATION : ARGUED: April 10, 2025 OF STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, DISTRICT COUNCIL 83; : AND AMERICAN FEDERATION OF : STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, LOCAL 2047, : : Appellants :

DISSENTING OPINION

CHIEF JUSTICE TODD DECIDED: JANUARY 21, 2026 In reversing the decision of the Commonwealth Court, the majority concludes that, “when a public employee’s claim for a union’s breach of its duty of fair representation stems from the union’s alleged mishandling of a grievance, the claim constitutes a ‘dispute . . . arising out of the interpretation of the provisions of a collective bargaining agreement,’” such that “the employee’s remedy from the court is limited to an order directing the underlying grievance be arbitrated nunc pro tunc.” Majority Opinion at 20 (quoting 43 P.S. § 1101.903) (ellipses original; footnote omitted). Because I disagree with the conclusion that an employee’s claim for a union’s breach of the duty of fair representation arises out of a collective bargaining agreement (“CBA”) and that, therefore, under the Public Employe Relations Act (“PERA”),1 a public employee who sues their union for breach of the duty related to its handling of a grievance may receive nothing more than an order directing arbitration of the underlying grievance nunc pro tunc, I must, respectfully, dissent.

The United States Supreme Court first recognized in Steele v. Louisville & N.R. Co., 323 U.S. 192 (1944), that a union owes a duty of fair representation to all employees included in a bargaining unit to which it is the exclusive bargaining representative.

Therein, the high Court determined that, by enacting the Railway Labor Act,2 which authorized the creation of a labor union to serve as the exclusive bargaining representative of a class of railway employees, Congress “did not intend to confer plenary power upon the union to sacrifice, for the benefit of its members, rights of the minority of the craft, without imposing on it any duty to protect the minority.” Id. at 199. Indeed, the Court emphasized that “[t]he labor organization chosen to be the representative of the craft or class of employees is . . . chosen to represent all of its members, regardless of their union affiliations or want of them.” Id. at 200 (emphasis added). Thus, the Court reasoned that, via the language of the Railway Labor Act, Congress deliberately expressed the aim “to impose on the bargaining representative . . . the duty to exercise fairly the power conferred upon it in behalf of all those for whom it acts, without hostile discrimination against them.” Id. at 202-03 (emphasis added).

On the same day that it decided Steele, the Supreme Court seemingly extended the duty of fair representation to unions certified under the National Labor Relations Act (“NLRA”).3 See Wallace Corp. v. N.L.R.B., 323 U.S. 248, 255-56 (1944) (“The duties of

[J-29-2025] [MO: Mundy, J.] - 2 a bargaining agent selected under the terms of the [NLRA] extend beyond the mere representation of the interests of its own group members. By its selection as bargaining representative, it has become the agent of all the employees, charged with the responsibility of representing their interests fairly and impartially. Otherwise, employees who are not members of a selected union at the time it is chosen by the majority would be left without adequate representation.”). The high Court further expounded upon the duty owed by a bargaining unit representative under the NLRA in Ford Motor Co. v. Huffman, 345 U.S. 330 (1953), wherein it stated that the statutory obligation of a union to represent all members “requires [it] to make an honest effort to serve the interests of all of those members, without hostility to any.” Id. at 337 (citations omitted).

While the high Court’s initial consideration of the duty of fair representation pertained to a union’s obligation to members in the course of bargaining with an employer, the Court later clarified that the duty also extended to the union’s representation of employees during the grievance process. In the seminal case of Vaca v. Sipes, 386 U.S. 171 (1967), the Supreme Court opined that individual employees do not have the right to compel arbitration of grievances, even if meritorious in nature, as unions must be given considerable discretion to handle and settle employee grievances. Indeed, the Court reasoned that “the settlement machinery” provided by a CBA negotiated between a union and employer would otherwise be “substantially undermined,” thus “destroying the employer’s confidence in the union’s authority and returning the individual grievant to the vagaries of independent and unsystematic negotiation.” Id. at 191. The Court observed that this, in turn, would significantly increase “the cost of the grievance machinery,” while simultaneously overburdening the arbitration process in a manner which would “prevent it from functioning successfully.” Id. at 192. Nevertheless, the Court stressed that, “[i]n administering the grievance and arbitration machinery as statutory agent of the

[J-29-2025] [MO: Mundy, J.] - 3 employees, a union must, in good faith and in a nonarbitrary manner, make decisions as to the merits of particular grievances.” Id. at 194 (citing Humphrey v. Moore, 375 U.S. 335, 349-50 (1964); Huffman, 345 U.S. at 337-39). In essence, the high Court clarified that, to prove a union’s breach of its duty of fair representation, a dissatisfied employee of the bargaining unit must prove that their grievance was meritorious and that the union acted arbitrarily or in bad faith in processing the grievance. Id. at 193.

Of particular relevance to the instant case, the Vaca Court also concluded that “[t]he appropriate remedy for a breach of a union’s duty of fair representation must vary with the circumstances of the particular breach.” Id. at 195. Indeed, although the Court noted that “an order compelling arbitration should be viewed as one of the available remedies when a breach of the union’s duty is proved,” it declined to “inflexibly . . . require arbitration in all cases.” Id. at 196. The Court reasoned that such a limitation would be improper, given that, in some cases, “part of the employee’s damages may be attributable to the union’s breach of duty, and an arbitrator may have no power under the bargaining agreement to award such damages against the union.” Id. To that end, the Court opined that, in such cases, a court should remain “free to decide the contractual claim and to award the employee appropriate damages or equitable relief.” Id. However, the Court cautioned that, in apportioning liability between the employer and the union, the “governing principle” is that damages should be determined in accordance with the fault of each party. Id. at 197. In that vein, the Court explained that “damages attributable solely to the employer’s breach of contract should not be charged to the union,” while any increases to those initial damages which are the result of the union’s refusal to process the grievance “should not be charged to the employer.” Id. at 197-98.

While the Supreme Court was refining the duty of fair representation in the federal realm, this Court concurrently honed the contours of the duty in the context of

[J-29-2025] [MO: Mundy, J.] - 4 Pennsylvania law. Our Court first considered the duty in Falsetti v. Local Union No. 2026, United Mine Workers of America, 161 A.2d 882 (Pa. 1960), wherein an employee filed a complaint in equity against his former employer and union officials after he was laid off in violation of the seniority provisions contained in the parties’ CBA. The employee sought to be reinstated, with full seniority rights and damages. Following the initiation of his lawsuit, the employee was expelled from the union, prompting him to amend his complaint to join the union as a defendant, alleging wrongful severance of his union membership.

Initially, our Court determined that it was procedurally improper for the employee to allege two unrelated claims in a single complaint. Nevertheless, we proceeded to consider whether, on remand, assuming the claims were properly severed, the lower courts would have jurisdiction over either of the claims. With respect to the expulsion claim, we found that our courts would lack jurisdiction, given the employee’s failure to exhaust the internal union remedies of appealing his expulsion to the union’s executive board and then to the international union. Turning to the employee’s attempt to garner reinstatement under the parties’ CBA, we observed that nothing therein permitted an individual bargaining unit member to directly seek enforcement of the contractual terms.

To that end, we explained that the relevant CBA — and most labor agreements generally — are drafted in a manner which limits the enforcement of the contract to actions (i.e., grievances) brought and overseen by the union, as trustee for the individual employees of the bargaining unit, to prevent management from facing “the constant threat of attempted individual enforcement through litigation.” Id. at 894. We found, however, that an employee does not lack a remedy where the union wrongfully declines to pursue a meritorious grievance on their behalf, emphasizing that, because the union “has assumed the role of trustee for the rights of its members and other employees in the bargaining

[J-29-2025] [MO: Mundy, J.] - 5 unit” by entering into the CBA, “the [u]nion bears a heavy duty of fair representation to all those within the shelter of its protection.” Id. at 895 (citations omitted).

In light of this “heavy duty,” we stressed that, “[i]f the [u]nion, in processing an employee’s grievance, does not act in good faith, in a reasonable manner[,] and without fraud, it becomes liable in damages for breach of duty.” Id. (emphasis added). This, we reasoned, would both compensate the employee “for the harm he had suffered” and simultaneously preserve “the process of collective bargaining in the industry.” Id. at 896.

Despite finding that unions owe a broad duty to fairly represent all employees included in their bargaining units, we concluded that the employee’s suit could not proceed, as he brought it against his union representatives, rather than the union itself.

We next examined the duty of fair representation in Ziccardi v. Commonwealth, 456 A.2d 979 (Pa. 1982), wherein we clarified that an employee’s claim against their union for refusing to submit a grievance to arbitration “does not fall under any of the categories of unfair labor practices enumerated in Section 1201(b) of PERA.”4 Id. at 980 (citation and footnote omitted). In so doing, we reaffirmed our determination that “a public employee’s remedy for his bargaining agent’s refusal to submit a grievance to arbitration is an action against the union for damages for breach of its duty of fair representation.” Id. at 981 (emphasis added). We also highlighted that, in the context of an employee who sues a union for failing to process a grievance challenging their discharge from employment, “the issue of just cause does not determine liability” for the union’s breach of the duty of fair representation, but, instead, “becomes relevant on the issue of damages[] only after bad faith has been shown” on the part of the union. Id. Relatedly, we observed that “an employee has no right to sue his employer in equity and assumpsit for wrongful discharge where his union has refused to proceed to arbitration,” as

4 43 P.S. § 1101.1201(b)(1).

[J-29-2025] [MO: Mundy, J.] - 6 giving the employee an unfettered right to sue the employer for the union’s bad faith[] . . . would relieve the wrongdoer of any effective sanction, make the plaintiff whole at the expense of an innocent party[,] and bind that innocent party by the action of the plaintiff’s agent, over whom it has no control.

Id. at 981-82 (emphasis added).

Two years after our decision in Ziccardi, we were tasked with determining whether a public employee is precluded from obtaining relief against his public employer for discharge in breach of a CBA “when the union has violated its duty of fair representation by failing in bad faith to pursue his grievance to impartial arbitration.” Martino v. Transp. Workers’ Union of Phila., Local 234, 480 A.2d 242, 243 (Pa. 1984). In Martino, the union filed a grievance on behalf of an employee who was discharged from his employment with the Southeastern Pennsylvania Transportation Authority (“SEPTA”); however, after the first three steps of the grievance procedure were resolved in SEPTA’s favor, the union declined to seek arbitration of the grievance. In turn, the employee filed a complaint against SEPTA, alleging that it discharged him in violation of the relevant CBA. The employee also sought relief from the union, arguing that it breached its duty of fair representation in declining to submit his grievance to arbitration.5 As a remedy, the employee sought an order compelling the union and SEPTA to participate in an arbitration proceeding nunc pro tunc.

On review, we concluded that an employee alleging that his union breached its duty of fair representation in handling his grievance may seek arbitration nunc pro tunc under state or federal law, stressing, however, that the employee is required to join his employer as a party to the lawsuit where “such joinder is necessary to afford him an adequate remedy.” Martino, 480 A.2d at 245. In that vein, we distinguished Ziccardi,

[J-29-2025] [MO: Mundy, J.] - 7 noting that, therein, “we did not consider nor did we preclude joining the employer where necessary to provide a just and effective remedy,” given that the employee in Ziccardi sought a contractual remedy directly against his employer, rather than seeking to arbitrate his grievance nunc pro tunc. Id. Nevertheless, cautioning that the union’s breach of its duty of fair representation “should not deprive the employer of all the procedural and substantive benefits of the bargained for grievance procedure” mandated under PERA, we concluded that an employee’s relief against his employer under PERA for discharge in violation of the relevant CBA “is limited to an order from the chancellor compelling arbitration of the underlying grievance.” Id. It is largely based upon the framework espoused in Martino that the majority in the case sub judice finds that the only remedy available to Appellee Penny Gustafson for the alleged breach of the duty of fair representation by her union, the American Federation of State, County, and Municipal Employees (“AFSCME”), is an order compelling AFSCME and Appellee’s employer, the Commonwealth Department of Human Services (“DHS”), to submit to arbitration nunc pro tunc, and therein consider the merits of the grievance previously filed regarding Appellee’s ostensible loss of overtime opportunities. Despite the inherent differences between this matter and Martino — namely, that, here, Appellee sued only the union for its breach of the duty of fair representation and did not seek an order compelling arbitration or any other remedy which would require her employer’s participation; whereas, in Martino, the employee sued his employer, as well as his union, and expressly and solely sought arbitration of the underlying grievance seeking his reinstatement to employment — the majority applies the same reasoning espoused in Martino, highlighting that Section 903 of PERA mandates the arbitration of “disputes or grievances arising out of the interpretation of the provisions of a [CBA].” 43 P.S. § 1101.903; see Majority Opinion at 18. In so doing, the majority concludes that Appellee’s

[J-29-2025] [MO: Mundy, J.] - 8 “dispute with AFSCME falls within Section 903’s arbitration mandate,” id. at 18, because, “[a]t the heart of [her] complaint is her assertion that the grievance resolution agreed to by AFSCME was inadequate and she was entitled to a more advantageous outcome under the [CBA],” id. at 19. Thus, in the majority’s view, Appellee’s complaint necessarily “aris[es] out of the interpretation of the provisions of a [CBA].” See 43 P.S. § 1101.903.

On top of this determination concerning Appellee’s complaint, the majority sweepingly pronounces that in all instances in which “a public employee’s claim for a union’s breach of its duty of fair representation stems from the union’s alleged mishandling of a grievance, the claim constitutes a ‘dispute . . . arising out of the interpretation of the provisions’” of a CBA. Majority Opinion at 20 (quoting 43 P.S. § 1101.903). I cannot subscribe to the majority’s findings in this regard.

As the majority explains, “public sector unions’ duty of fair representation is derived from their statutory authority as the exclusive representative of all members of the bargaining unit the union has been selected to represent.” Id. at 16 (citing 43 P.S. §§ 1101.602, 1101.606). While, indubitably, a public sector union in Pennsylvania would incur no duty of fair representation if it was not officially certified to represent a bargaining unit, PERA does not expressly bind public sector unions to adhere to the duty of fair representation. Indeed, as a result, our Court concluded that a claim raising a union’s breach of its duty did not constitute an unfair labor practice. See Ziccardi, 456 A.2d at 980 (“The union’s refusal to submit a grievance to arbitration does not fall under any of the categories of unfair labor practices enumerated in Section 1201(b) of PERA”). The distinct lack of express statutory language evinces that, although the duty of fair representation which is incumbent upon a public sector union is, in a sense, tethered to PERA, the duty is not derived solely therefrom nor governed entirely thereby.

[J-29-2025] [MO: Mundy, J.] - 9 Rather, despite the inherent connection to labor statutes, the duty of fair representation has “judicially evolved” as “an essential means of enforcing fully the important principle that ‘no individual union member may suffer invidious, hostile treatment at the hands of the majority of his coworkers.’” Breininger v. Sheet Metal Workers Int’l Ass’n Loc. Union No. 6, 493 U.S. 67, 79 (1989) (citations omitted); see Tech., Pro., & Officerworkers Ass’n of Mich. v. Renner, 15 N.W.3d 524, 533 (Mich. 2024) (observing that “the duty of fair representation under federal law [i]s a hybrid of statutory and common law because it was judicially crafted under the common law but derived from the NLRA” (citation omitted)). From my perspective, like the federal duty of fair representation, the duty in this Commonwealth is a hybrid creature of both statutory and common law origins which is akin to a fiduciary duty, paralleling “the duty a trustee owes to trust beneficiaries,” “the relationship between . . . attorney and client,” or “the responsibilities of corporate officers and directors toward shareholders.” Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 74-75 (1991) (citations omitted).

More significantly, notwithstanding the origins of the duty of fair representation imposed on public sector unions in our Commonwealth, contrary to the majority’s suggestion, the duty does not arise out of CBAs. The most obvious rebuke of the majority’s finding in this regard may be detected in the early Supreme Court cases adopting and defining the duty of fair representation, wherein the breaches of the duty arose in the context of contract negotiations. See Breininger, 493 U.S. at 80 (“Indeed, the earliest fair representation suits involved claims against unions for breach of the duty in negotiating a collective-bargaining agreement, a context in which no breach-of-contract action against an employer is possible.” (citing Ford, supra; Steele, supra) (emphasis original)); see also Air Line Pilots, 499 U.S. at 77 (observing that the duty applies in other contexts, “such as when the union operates a hiring hall” (citation omitted)). Plainly, if the

[J-29-2025] [MO: Mundy, J.] - 10 duty of fair representation is imposed on a union before the effectuation of a CBA, a claim for breach of that duty cannot be characterized as a “dispute[] or grievance[] arising out of the interpretation of the provisions of a [CBA],” 43 P.S. § 1101.903, which is subject to mandatory bargaining under Section 903 of PERA, as the majority purports.

Moreover, because a CBA is a contract between an employer and a union, it does not typically contemplate the specifics of the relationship between the union and the employees in the certified bargaining unit, much less internal union affairs. This is for good reason, as these matters do not involve employers; indeed, it would go against a union’s own interests to enter into negotiations with an employer over such matters.

Simply stated, it would be contrary to purpose of collective bargaining and the nature of CBAs to negotiate over such topics. In any event, given that, in the instant case, the relevant CBA between AFSCME and DHS is not included in the record before this Court, I find it vexing that the majority has deemed Appellee’s suit based on AFSCME’s breach of the duty of fair representation to be an issue which arises out of the interpretation of the CBA. Likewise, I am perplexed that the majority has declared that all suits for a union’s breach of the duty of fair representation stemming from alleged mishandling of a grievance arise from the interpretation of a CBA, without requiring individualized assessment of the contract in place between the parties involved in each particular case.

Here, without the relevant CBA, the nature of Appellee’s claim against AFSCME must be discerned solely from her complaint. The claim Appellee raises therein relates to nothing more than AFSCME’s alleged breach of its duty of fair representation in processing and settling the grievance filed on her behalf; Appellee does not allege wrongdoing on the part of DHS or seek to vindicate a right under the parties’ CBA, nor does she seek monetary damages related to the underlying grievance or the opportunity to arbitrate her grievance nunc pro tunc, as did the employee in Martino, supra. In light

[J-29-2025] [MO: Mundy, J.] - 11 of the limited nature of her complaint, particularly when coupled with the lack of contract language pertaining to the union’s duty of fair representation, I struggle to see how Appellee’s complaint against AFSCME “aris[es] out of the interpretation of the provisions of a [CBA],” 43 P.S. § 1101.903, such that her claim is subject to mandatory arbitration and her remedy for the union’s breach of its duty limited to an order compelling arbitration nunc pro tunc.

Relatedly, I find that Martino does not support the majority’s ultimate conclusion in that regard, given that the majority neglects to meaningfully acknowledge that the employee in Martino sought as his sole remedy arbitration of his grievance nunc pro tunc.

Although arbitration of grievances arising under the terms of a CBA is mandatory under Section 903 of PERA, arbitration clauses are regularly included in CBAs as the final step in the grievance procedure. By seeking an order directing the parties to arbitrate his grievance, the employee in Martino necessarily affixed his claim to the terms of the CBA, thus rendering his claim within the purview of the parties’ CBA. Appellee, conversely, seeks monetary damages which are not similarly contained within the terms of the applicable CBA, at least as far as I can discern from the record before our Court; consequently, Appellee should not be limited to arbitration of her underlying grievance nunc pro tunc based on Martino’s interpretation and application of Section 903.

Moreover, from my perspective, the majority’s reliance upon Martino to bar Appellee from seeking damages against AFSCME wholly disregards the general nature of the duty which a union owes to those employees under its charge and renders hollow our pronouncements in Falsetti and Ziccardi that an employee may recover damages against their union stemming from the union’s breach of its duty of fair representation.

See Falsetti, 161 A.2d at 895 (“If the Union, in processing an employee’s grievance, does not act in good faith, in a reasonable manner and without fraud, it becomes liable in

[J-29-2025] [MO: Mundy, J.] - 12 damages for breach of duty.” (emphasis added)); Ziccardi, 456 A.2d at 981 (“In Falsetti this Court held that a public employee’s remedy for his bargaining agent’s refusal to submit a grievance to arbitration is an action against the union for damages for breach of its duty of fair representation.” (emphasis added)). Hence, in my view, the only way to harmonize Falsetti, Ziccardi, and Martino is to find that the latter is limited to its facts: that an employee who sues their union for breaching its duty of fair representation in handling a grievance is limited to the remedy of arbitration nunc pro tunc only when that employee seeks reinstatement for being discharged without just cause under the relevant CBA and the union fails to process the related grievance. See, e.g., Maloney v. Valley Med.

Facilities, Inc., 984 A.2d 478, 485-86 (Pa. 2009) (“[T]he axiom that decisions are to be read against their facts prevents the wooden application of abstract principles to circumstances in which different considerations may pertain.” (internal citation omitted)); Tincher v. Omega Flex, Inc., 104 A.3d 328, 378 (Pa. 2014) (stressing that legal rules, especially broad ones, must be read “against their facts and the corollary that judicial pronouncements should employ due modesty”). Otherwise, the majority’s expansive interpretation of Martino, beyond its facts, will essentially overrule the holdings in Falsetti and Ziccardi that a union may be held liable for damages as a result of its breach of the duty of fair representation.

I also find that the majority’s limitation on an employee’s remedies in cases alleging that a union breached its duty of fair representation in handling a grievance could embolden unions to disparately treat bargaining unit employees who are not union members, as a union will face no meaningful consequences for engaging in such discriminatory behavior. Indeed, under the rule enunciated by the majority, a union’s only consequence for even the most egregious breach of its duty of fair representation will be to merely represent the aggrieved employee at arbitration as it should have in the first

[J-29-2025] [MO: Mundy, J.] - 13 place. A union could discriminate with near impunity, knowing that, if an employee sues, at most, it will be required to arbitrate the underlying grievance nunc pro tunc, rendering the union no worse off than if it had processed the grievance to arbitration in the first place. Meanwhile, the aggrieved employee must accept representation in that arbitration from the very entity (and representatives) that subjected them to discriminatory conduct, with nothing constraining the union representatives from subjecting the aggrieved employee to further hostile or invidious acts.6 Thus, there will be nothing to deter union representatives from engaging in discriminatory behavior against employees on the basis of their union membership status, or, indeed, based upon other protected attributes like race, sex, or religion. This would be ironic, as instances of racial discrimination spurred the creation and recognition of the duty of fair representation just short of a century ago.

See, e.g., Steele, supra. Not only will the majority’s decision render the common law duty of fair representation hollow in this way, it will also place an unfair burden upon employers such as DHS that have engaged in no wrongdoing — in a sense, requiring employers to subsidize union wrongdoing and depriving employers of the benefit of their bargain struck during the grievance settlement process. For example, here, DHS engaged in the grievance procedure with AFSCME in good faith, ultimately reaching what it believed to be a mutually-acceptable resolution of the grievance pertaining to Appellee’s overtime- related claims. Requiring DHS to submit to arbitration nunc pro tunc, despite the fact that Here, for example, the majority’s remedy forces Appellee to sit through an arbitration hearing while represented by the very union representatives whom she alleges called her a “free rider,” Complaint at 7 ¶ 51, and a “freeloader” who was “sponging” off the union, id. ¶ 53. Once again, the circumstances of this case diverge from those which were before us in Martino, as the employee in Martino expressly sought to have the union arbitrate his grievance, evidencing that he lacked any trepidation about receiving representation from the same entity and individuals he claimed breached the duty of fair representation. Moreover, his main allegations of wrongdoing were directed at his employer, rather than his union.

[J-29-2025] [MO: Mundy, J.] - 14 it was not involved in the union’s alleged wrongdoing, results in an innocent party suffering consequences through no fault of its own. Moreover, placing such a burden upon innocent employers will negatively impact the field of labor law as a whole by upending employers’ ability to rely upon settlements of grievances reached between themselves and the unions with which they are associated. See Bowen v. U.S. Postal Serv., 459 U.S. 212, 226 (1983) (“When the union, as the exclusive agent of the employee, waives arbitration or fails to seek review of an adverse decision, the employer should be in substantially the same position as if the employee had had the right to act on his own behalf and had done so. Indeed, if the employer could not rely on the union’s decision, the grievance procedure would not provide the uniform and exclusive method for the orderly settlement of employee grievances, which the Court has recognized is essential to the national labor policy.” (quotation marks, citations, and brackets omitted)). Plainly, as we observed in Ziccardi, the party that engaged in wrongdoing should be the party to suffer the consequences of its actions; we should not be placing those consequences on innocent parties. See Ziccardi, 456 A.2d at 982 (“By giving the employee an unfettered right to sue the employer for the union’s bad faith, we would relieve the wrongdoer of any effective sanction, make the plaintiff whole at the expense of an innocent party and bind that innocent party by the action of the plaintiff’s agent, over whom it has no control. This would be in total violation of the principles of the law of agency.”).

The majority attempts to rectify this inequity by pronouncing that, pursuant to Martino, the arbitrator will be required to apportion damages between the union and the employer during the ensuing nunc pro tunc arbitration. See Majority Opinion at 22. The majority is correct that the Martino Court asserted that an arbitrator would have the ability to apportion damages between the employer and the union in fashioning a remedy to make the aggrieved employee whole, finding that the Supreme Court’s decision in Bowen,

[J-29-2025] [MO: Mundy, J.] - 15 supra, laid the groundwork for such a premise. Critically, the sum of the Court’s reasoning to that effect is as follows: We are also persuaded by Bowen that [an arbitrator] must limit the employer’s liability for backpay to the period from the date of wrongful discharge to the date when arbitration would normally have commenced. In the absence of an apportionment providing meaningful sanctions against the union, incentives to comply with the grievance procedure would be diminished.

See Martino, 480 A.2d at 251. I am unconvinced that Martino’s scanty conclusion in this regard transcends the category of mere dicta,7 as the sole question before the Court in Martino distilled to whether the courts of common pleas had subject matter jurisdiction over the employee’s complaint against his employer and his union. See id. at 243 (“The sole question for our consideration is whether a public employee is totally precluded from obtaining any relief directly or indirectly, involving his public employer, for discharge in arguable breach of a collective bargaining agreement when the union has violated its duty of fair representation by failing in bad faith to pursue his grievance to impartial arbitration.” (emphasis added)).8 In any event, Martino does not justify the conclusion that, in this case, an arbitrator would have the authority to apportion damages in a nunc pro tunc arbitration. In my view, any precedential effect Martino might have with respect to the issue of apportionment is

[J-29-2025] [MO: Mundy, J.] - 16 limited to cases in which the employee’s claim against a union for breach of the duty of fair representation relates to the mishandling of a grievance challenging an alleged wrongful discharge. The Martino Court’s reliance upon Bowen in championing apportionment in the employee’s nunc pro tunc arbitration reveals as much. In Bowen, the high Court was confronted with the question of “whether a union may be held primarily liable for that part of a wrongfully discharged employee’s damages caused by his union’s breach of its duty of fair representation.” Bowen, 459 U.S. at 214. In resolving this issue, the high Court rejected the union’s contention that it could not be deemed liable for damages resulting from an employee’s wrongful discharge and that it was, instead, liable only for the employee’s litigation expenses arising in connection with the union’s breach of its duty of fair representation in handling the employee’s grievance. In the Court’s view, the union’s position in this regard skirted Vaca’s governing principle of apportionment of damages between an employer and a union, where the former wrongfully discharged an employee and the latter breached its duty of fair representation with respect to a grievance challenging that discharge. Ultimately, the Court concluded that apportionment was necessary “where the default of both parties contributes to the employee’s injury,” or else “incentives to comply with the grievance procedure will be diminished.” Id. at 227.

Consequently, the Court upheld the district court’s jury instruction indicating that the jurors were to apportion the compensatory damages owed to the employee by attributing damages arising before the hypothetical date of an arbitration decision to the employer and any damages arising after that date to the union. Notably, because the union challenged the district court’s instructions “only on the ground that no back wages at all could be assessed against it,” the Court declined to consider whether the district court’s instructions with respect to the manner in which to apportion damages between the employer and the union were proper. Id. at 230 n.19.

[J-29-2025] [MO: Mundy, J.] - 17 With this background, it is dubious that the reasoning espoused in Bowen can apply outside of the context of a duty of fair representation claim triggered by a bargaining unit employee’s wrongful discharge coupled with the union’s failure to properly handle a grievance challenging that discharge. While the holding in Bowen logically could have governed the outcome of Martino (if the apportionment issue had been before the Court), it strains credulity to extend the same reasoning to this case, given that Appellee was not discharged from her employment and does not seek back pay. Rather, because Appellee seeks only damages from the union for its breach of the duty of fair representation in handling her grievance, there would be nothing for an arbitrator to apportion. As noted, cases must be read against their facts, to avoid extending holdings beyond their proper context. Tincher, supra; Maloney, supra. Furthermore, and critically, Martino’s cursory foray into the issue of apportionment neglects to identify the basis of an arbitrator’s authority to apportion damages between an employer and a union, and the majority in this case offers no further insight into the matter. Indeed, after summarizing Martino’s conclusion regarding apportionment, the majority states only that: Consistent with our reasoning in Martino, if a court orders an employee’s underlying grievance to be arbitrated nunc pro tunc due to the union’s breach of its duty of fair representation, the arbitrator is required to determine the merits of the employee’s grievance and apportion damages, if any, between the employer and the union in accordance with their respective responsibility.

Majority Opinion at 22 (citing Martino, 480 A.2d at 252). However, it is well-established that an issue is “appropriately before the arbitrator” only if “the issue is embraced by the [CBA].” State Sys. of Higher Educ. (Cheyney Univ.) v. State Coll. Univ. Prof’l Ass’n (PSEA-NEA), 743 A.2d 405, 413 (Pa. 1999). An arbitrator lacks jurisdiction to issue an award that is not rationally derived from the terms of the CBA at issue. Millcreek Twp.

[J-29-2025] [MO: Mundy, J.] - 18 Sch. Dist. v. Millcreek Twp. Educ. Support Pers., 210 A.3d 993, 1002 (Pa. 2019) (citation omitted). Although Millcreek and Cheyney were decided in the context of the essence test — the deferential standard of review employed by courts assessing the validity of an arbitrator’s award on appeal — they nonetheless support the conclusion that an arbitrator lacks the authority to consider an issue that does not fall within the scope of the CBA which they are tasked with interpreting, nor may an arbitrator craft an award that exceeds that which is authorized under the CBA. See Vaca, 386 U.S. at 196 (observing that “an arbitrator may have no power under the bargaining agreement to award such damages against the union”). Here, there is no indication in the record that the CBA negotiated between AFSCME and DHS provides an arbitrator with the ability to craft an award entitling Appellee to monetary damages from AFSCME, so I presume that the parties did not include terms providing arbitrators with such a power.9 From my perspective, if Appellee were permitted to seek damages against the union in the trial court, the court would be able to craft a remedy specific to AFSCME’s alleged breach of its duty of fair representation, unlike an arbitrator who is bound by the terms of the CBA. In so doing, the trial court would not be acting as an arbitrator even though it would be required to examine the underlying grievance in assessing damages if Appellee were to successfully prove that AFSCME breached its duty in handling her grievance. Appellee analogizes the trial court’s role to the role a court undertakes in a legal malpractice case, reasoning that, “when a lawyer commits malpractice, it does not mean that the client may reopen the case that the lawyer mishandled,” but, instead, the Given my view that an arbitrator would lack the authority — unless specifically bargained for between AFSCME and DHS and included in the text of the CBA — to award damages against AFSCME, as well as the fact that Appellee does not seek damages from DHS or its participation in an arbitration, I see no reason why DHS would be an indispensable party to Appellee’s lawsuit. See Majority Opinion at 21-22. Indeed, in Martino, we merely observed that an employer is an indispensable party where “joinder is necessary to afford him an adequate remedy.” Martino, 480 A.2d at 245.

[J-29-2025] [MO: Mundy, J.] - 19 client may obtain damages from the lawyer to hold him or her accountable. Appellee’s Brief at 29. I find some merit to Appellee’s contention in this regard, as, here, the trial court need not decide the merits of the grievance, albeit it would assess the underlying claim in the context of determining the appropriate remedy for the union’s breach of its duty of fair representation in order to make Appellee whole for her losses. See, e.g., Ziccardi, 456 A.2d at 981 (noting that the merits of the underlying grievance in the context of the relevant language of the CBA “becomes relevant on the issue of damages[] only after bad faith has been shown”). This is similar to a legal malpractice case, in which the trial court examines the underlying case wherein the practitioner allegedly committed malpractice to determine damages, but stopping short of reopening or relitigating that underlying case.

Notably, under the standard delineated herein, an employee would still be required to overcome a high bar to prove that their union breached its duty of fair representation in handling a grievance, given that unions are afforded substantial leeway in pursuing and settling grievances. The grievance process “cannot be expected to be error-free,” Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 571 (1976), and an employee alleging a breach of the duty of fair representation “must prove that the union acted in bad faith” in mishandling a grievance, Martino, 480 A.2d at 252. This high bar insulates unions from exposure to vexatious and frivolous lawsuits. Additionally, in my view, even where an employee meets their burden of proving that the union acted in bad faith, the union would nonetheless have the opportunity to demonstrate that its settlement or refusal to pursue the underlying grievance was based on a legitimate, nondiscriminatory reason and that the employee would not have achieved a more favorable result in an arbitration.

For these reasons, and because “[t]he appropriate remedy for a breach of a union’s duty of fair representation must vary with the circumstances of the particular breach,”

[J-29-2025] [MO: Mundy, J.] - 20 Vaca, 386 U.S. at 195, I find the majority’s narrow rule — that the only remedy available to an employee who has been harmed by such a breach is arbitration of their underlying grievance nunc pro tunc — to be erroneous. I likewise disagree with the majority’s determination that the arbitrator in a nunc pro tunc arbitration arising in connection with a union’s alleged breach of the duty of fair representation would be authorized to apportion damages between an employer and a union in crafting an arbitration award. In my view, under our case law, Appellee may sue AFSCME, outside of the context of arbitration, and, if she is able to prove that it breached its duty of fair representation owed to her, be awarded damages.

Accordingly, for the foregoing reasons, I would affirm the Commonwealth Court’s order.

Justices Donohue and Brobson join this dissenting opinion.

[J-29-2025] [MO: Mundy, J.] - 21

[J-29-2025] [MO: Mundy, J.]

IN THE SUPREME COURT OF PENNSYLVANIA WESTERN DISTRICT

PENNY GUSTAFSON, : No. 24 WAP 2024 : Appellee : Appeal from the Order of the : Commonwealth Court entered : February 20, 2024, at No. 1298 CD v. : 2022, reversing and remanding the : Order of Cambria County Court of : Common Pleas entered February AMERICAN FEDERATION OF STATE, : 11, 2022, at No. 2021-3223.

COUNTY, AND MUNICIPAL EMPLOYEES, : COUNCIL 13; AMERICAN FEDERATION : ARGUED: April 10, 2025 OF STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, DISTRICT COUNCIL 83; : AND AMERICAN FEDERATION OF : STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, LOCAL 2047, : : Appellants :

CONCURRING OPINION

JUSTICE McCAFFERY DECIDED: JANUARY 21, 2026 I join the majority opinion because it faithfully applies our precedents and the Public Employe Relations Act (PERA).1 I write separately, however, to make one modest observation about Section 606 of PERA as it relates to the duty of fair representation.

Section 606 allows a union to be designated as the exclusive representative of employees in the collective bargaining process with an employer. See 43 P.S. § 1101.606 (“Representatives selected by public employes in a unit appropriate for collective bargaining purposes shall be the exclusive representative of all the employes in such unit to bargain on wages, hours, terms and conditions of employment[.]”). This status as 43 P.S. §§ 1101.101–1101.2301. exclusive representative gives rise to a union’s duty to fairly represent all employees during the grievance process with employers. See Falsetti v. Loc. Union No. 2026, United Mine Workers of Am., 161 A.2d 882, 895 n.21 (Pa. 1960).2 If a union were not subject to a duty to fairly represent all workers bound by the collective bargaining agreement, “constitutional questions [would] arise.” Steele v. Louisville & N.R. Co., 323 U.S. 192, 198 (1944).

There is, however, a qualification in Section 606: Employees retain the right to represent themselves during a grievance process with the employer. See 43 P.S. § 1101.606 (“[A]ny individual employe or a group of employes shall have the right at any time to present grievances to their employer and to have them adjusted without the intervention of the bargaining representative[.]”).3 Thus, while the union’s representative still must be “given an opportunity to be present” during the grievance process, 43 P.S. § 1101.606, PERA does not require workers to accept the union’s representation.

Here, Appellee was represented by the union. In other words, she did not exercise her right to represent herself in the grievance process. I nevertheless emphasize that, where an employee elects to represent herself and avoid the union’s representation during grievance procedures, the union’s duty of fair representation would not be implicated. With that observation, I am pleased to concur.

2 See also Janus v. Am. Fed’n of State, Cnty., & Mun. Emps., Council 31, 585 U.S. 878, 901 (2018) (The duty of fair representation “is a necessary concomitant of the authority that a union seeks when it chooses to serve as the exclusive representative of all the employees in a unit.”).

3 Federal law contains a similar proviso. See 5 U.S.C. § 7114(5)(A) (“The rights of an exclusive representative under the provisions of this subsection shall not be construed to preclude an employee from … being represented by an attorney or other representative, other than the exclusive representative, of the employee’s own choosing in any grievance or appeal action[.]”).

[J-29-2025] [MO: Mundy, J.] - 2

[J-29-2025] IN THE SUPREME COURT OF PENNSYLVANIA WESTERN DISTRICT TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, McCAFFERY, JJ.

PENNY GUSTAFSON, : No. 24 WAP 2024 : Appellee : Appeal from the Order of the : Commonwealth Court entered : February 20, 2024, at No. 1298 CD v. : 2022, reversing and remanding the : Order of Cambria County Court of : Common Pleas entered February AMERICAN FEDERATION OF STATE, : 11, 2022, at No. 2021-3223.

COUNTY, AND MUNICIPAL EMPLOYEES, : COUNCIL 13; AMERICAN FEDERATION : ARGUED: April 10, 2025 OF STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, DISTRICT COUNCIL 83; : AND AMERICAN FEDERATION OF : STATE, COUNTY, AND MUNICIPAL : EMPLOYEES, LOCAL 2047, : : Appellants :

OPINION

JUSTICE MUNDY DECIDED: JANUARY 21, 2026 A public employee sued the union representing her bargaining unit, alleging the union breached its duty of fair representation by discriminatorily mishandling her grievance against her public employer. In this appeal by allowance, we are tasked with discerning whether, under such circumstances, the employee may seek damages from the union for its breach or whether her remedy is limited to an order compelling the union to take the grievance to arbitration nunc pro tunc. After careful consideration, we determine, under the laws of this Commonwealth, that a public employee’s remedy under such circumstances is limited to an order directing arbitration and, therefore, reverse the order of the Commonwealth Court.

I. Background Appellee Penny Gustafson (“Gustafson”) is employed by the Pennsylvania Department of Human Services (“the Commonwealth”) as a Residential Services Aid at Ebensburg Center, a licensed facility that provides support to people with intellectual disabilities. As part of her employment, she is a member of a bargaining unit represented by Appellants American Federation of State, County, and Municipal Employees (“AFSCME”) Council 13 (“Council 13”), AFSCME District Council 83 (“District Council 83”), and AFSCME Local 2047 (“Local 2047”) (collectively “AFSCME” or “the Unions”).1 Gustafson was previously an AFSCME member but resigned her membership in June 2019. Even though she is no longer a member of AFSCME, AFSCME remains Gustafson’s exclusive representative for purposes of the Public Employe Relations Act (“PERA”)2, and Gustafson continues to be subject to the provisions of a collective bargaining agreement between AFSCME and the Commonwealth, which governs the terms and conditions of her employment.3

Therefore, we must “accept as true all well-pleaded, material, and relevant facts alleged in [Gustafson’s] complaint and every inference that is fairly deducible from those facts.”

Raynor v. D’Annunzio, 243 A.3d 41, 52 (Pa. 2020). Accordingly, we deduce the relevant factual background from Gustafson’s complaint.

[J-29-2025] - 2 In October 2019, Gustafson was “taken off the floor,”4 purportedly for an investigation. No investigation, however, was conducted and Gustafson was returned to her normal duties. During her three weeks “off the floor,” Gustafson lost the opportunity to work overtime hours and overtime equalization due to her inability to accept such opportunities.5 On or about October 30, 2019, Gustafson requested AFSCME file a grievance related to her time “off the floor” and the lack of investigation, which Local 2047 shop steward Doug Myers (“Myers”) filed on her behalf. After the grievance was filed, Gustafson inquired with Myers on its status at least once a month, but he failed to provide her any information other than to state the grievance process was delayed due to the coronavirus pandemic and would take a while to resolve.

Then, in June 2020, Gustafson called District Council 83 to inquire on the status of her grievance. Within five days of this phone call, Myers provided Gustafson with a grievance resolution letter, dated March 3, 2020, which set forth, in relevant part, the following: “[The] Department offers the following in final resolution of the above case: Grievant was equalized.” Complaint, 9/22/2021, Exhibit A; R.R. at 19a. The time period for Gustafson to appeal the grievance resolution letter or otherwise challenge the resolution of her grievance had passed by the time the letter was provided to her by Myers. Gustafson was displeased with the resolution of her grievance because, in her opinion, the resolution did not restore or repay her lost overtime hours or properly calculate her equalization.

[J-29-2025] - 3 In light of these events, Gustafson contacted District Council 83 director Dominic Sgro (“Sgro”) to discuss the handling of her grievance on or about July 7, 2020. During this conversation, Sgro called Gustafson a “free rider” when he became aware she was not a member of AFSCME. He then stated that he would look into her case and get back to her. Complaint at ¶ 51; R.R. at 12a. After not hearing from Sgro for several months, Gustafson called him on or about October 15, 2020, at which time Sgro told Gustafson she was “sponging” off the union, that he “knows what happened,” and that Gustafson received “minimal” or “limited” representation because she is a “freeloader.” Id. at ¶ 53, R.R. at 12a.

Based on the way it handled her grievance, Gustafson believed AFSCME “discriminated against, punished, or otherwise retaliated against [her] because of her decision to be or status as a nonmember of AFSCME.” Id. at ¶ 58; R.R. at 13a.

Accordingly, on September 22, 2021, Gustafson filed a complaint against AFSCME, raising a single cause of action for breach of the duty of fair representation. Gustafson did not raise any claims against the Commonwealth, her employer. In her prayer for relief, Gustafson requested, inter alia, compensatory and punitive damages, reasonable attorneys’ fees, and requested a trial by jury. Importantly, Gustafson did not request an order directing AFSCME to bring her grievance to arbitration nunc pro tunc.

In response, AFSCME filed preliminary objections averring, inter alia: (1) demurrer, raising insufficient specificity and legal insufficiency to the claim for damages on duty of fair representation claim; (2) demurrer, raising legal insufficiency to the claim for punitive damages as improper in a duty of fair representation case; and (3) demurrer, raising legal insufficiency to the claim for attorneys’ fees and costs as improper in a duty of fair representation case. The trial court granted AFSCME’s aforementioned objections,

[J-29-2025] - 4 dismissed their remaining preliminary objections as moot, and dismissed Gustafson’s complaint with prejudice.

Gustafson appealed, challenging the trial court’s grant of AFSCME’s preliminary objection related to her claim for damages on her duty of fair representation claim and dismissal of her complaint. Before the Commonwealth Court, Gustafson argued that she set forth a legally cognizable claim for damages arising out of AFSCME’s breach of its duty of fair representation and that the entitlement to relief for such a breach is not limited to a request for nunc pro tunc arbitration.

A unanimous, en banc panel reversed in a published opinion. Gustafson v. Am. Fed’n of State, Cty., and Mun. Emp., Council 13, 310 A.3d 1267 (Pa. Cmwlth. 2024). The Commonwealth Court began by setting forth the relevant law regarding breach of duty of fair representation claims in this Commonwealth. According to the panel, this Court first recognized a cause of action for breach of duty of fair representation in Falsetti v. Local Union No. 2026, United Mine Workers of America, 161 A.2d 882 (Pa. 1960), where we stated “[i]f the [u]nion, in processing an employee’s grievance, does not act in good faith, in a reasonable manner[,] and without fraud, it becomes liable in damages for breach of duty.” Gustafson, 310 A.3d at 1270 (quoting Falsetti, 161 A.2d at 896). As for the remedy for such a breach, the lower court quoted the Supreme Court of the United States’ opinion in Vaca v. Sipes, 386 U.S. 171 (1967), where the High Court concluded that “an order compelling arbitration should be viewed as one of the available remedies when a breach of the union’s duty is proved. But we see no reason inflexibly to require arbitration in all cases.” Gustafson, 310 A.3d at 1271 (quoting Vaca, 386 U.S. at 196) (emphasis provided by Commonwealth Court removed).

The en banc panel proceeded to discuss this Court’s application of the breach of duty of fair representation in the PERA context. In doing so, the court first quoted our

[J-29-2025] - 5 opinion in Ziccardi v. Department of General Services, 456 A.2d 979 (Pa. 1982), where we held that a “union’s refusal to submit a grievance to arbitration does not fall under any of the categories of unfair labor practice enumerated in … PERA” and that “[u]nder Falsetti, a member of a bargaining unit has a right to sue his union for failure to proceed to arbitration when the complaint alleges bad faith.” Gustafson, 310 A.3d at 1271 (quoting Ziccardi, 456 A.2d at 980-81) (emphasis provided by Commonwealth Court removed).

The appellate court then block quoted our opinion in Martino v. Transport Workers’ Union of Philadelphia, Local 234, 480 A.2d 242 (Pa. 1984), emphasizing in that case, this Court observed that the complainant “s[ought] to order arbitration,” and that “in cases governed by state labor law[,] [the court’s] power is limited to that remedy[,]” and that an order to arbitrate “the underlying grievance nunc pro tunc provides the employee with a complete and adequate legal remedy.” Gustafson, 310 A.3d at 1272 (quoting Martino, 480 A.2d at 251). The en banc panel further highlighted that in Martino, we discussed the Vaca Court’s refusal to mandate arbitration in breach of fair representation cases, noting that an employee may be seeking damages against the union that “an arbitrator may have no power under the bargaining agreement to award” and that, while issues eligible for arbitration may be resolved through litigation of the breach of fair duty claim “[i]t does not follow … that the court should proceed to decide the merits.” Id. at 1273 (quoting Martino, 480 A.2d at 252).

Applying the above legal principles to the facts as pled in Gustafson’s complaint, the Commonwealth Court rejected AFSCME’s argument that Martino demanded affirmance of the trial court’s dismissal. According to the court, unlike the claimant in Martino, Gustafson did not seek an order directing AFSCME to take her grievance to arbitration nunc pro tunc, nor did she ask the court to decide the merits of her underlying grievance. Id. Additionally, the court determined Gustafson was not alleging wrongdoing

[J-29-2025] - 6 on the part of the Commonwealth, her employer, but, rather, her claim rested solely on AFSCME’s alleged failure “to fairly represent her during a workplace investigation and subsequent grievance proceeding.” Id. As such, the court determined Gustafson’s claim was not an unfair labor practices claim under PERA and thus, it was not free and clear from doubt whether she could proceed on a claim for damages against AFSCME.

Accordingly, the appellate court reversed the trial court’s order and remanded the matter for further proceedings.

II. Issues and Standard of Review We granted AFSCME’s petition for allowance of appeal to address the following issues: (1) Whether the Commonwealth Court’s decision below is contrary to this Court’s ruling in Martino v. Transport Workers’ Union, 480 A.2d 242 (Pa. 1984)?

(2) Whether in a duty of fair representation claim, Section 1101.903 of PERA requires arbitration when plaintiff-employee received relief through the grievance process and the action for damages against the union requires the trial court to evaluate what the employee is entitled to under the collective bargaining agreement?

(3) Whether, in a duty of fair representation claim, a public sector employer is an indispensable party when the employee’s requested remedy requires the trial court to evaluate what the employee is entitled to under the collective bargaining agreement?

Gustafson v. Am. Fed’n of State, Cty., and Mun. Emp., Council 13, 323 A.3d 1267, 1267- (Pa. 2024) (per curiam order).

As this case comes before us on appeal from the trial court’s grant of AFSCME’s preliminary objections in the nature of a demurrer, our standard of review is de novo, and our scope of review is plenary. See Ladd v. Real Estate Commission, 230 A.3d 1096, 1103 (Pa. 2020), citing Mazur v. Trinity Area Sch. Dist., 961 A.2d 96, 101 (Pa. 2008). “We recognize a demurrer is a preliminary objection to the legal sufficiency of a pleading and raises questions of law; we must therefore ‘accept as true all well-pleaded,

[J-29-2025] - 7 material, and relevant facts alleged in the complaint and every inference that is fairly deducible from those facts.’ A preliminary objection in the nature of a demurrer ‘should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted.’” Id. (internal citations omitted), quoting Yocum v. Commonwealth, Pennsylvania.

Gaming Control Bd., 161 A.3d 228, 234 (Pa. 2017).

Raynor v. D’Annunzio, 243 A.3d 41, 52 (Pa. 2020).

III. Arguments of the Parties In AFSCME’s view, the Commonwealth Court’s decision contravenes both PERA and our prior decisions addressing duty of fair representation claims in the public employee context, namely Martino. The Unions observe that, pursuant to Section 903 of PERA, “[a]rbitration of disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement is mandatory.” AFSCME’s Brief at 15 (quoting 43 P.S.

§ 1101.903). AFSCME asserts Gustafson’s duty of fair representation claim arises out of the interpretation of the collective bargaining agreement between AFSCME and the Commonwealth, thus limiting her remedy to requiring AFSCME to arbitrate her grievance nunc pro tunc rather than monetary damages. In support of its position that Section 903 controls, AFSCME asserts that its duty of fair representation to Gustafson arises out of the Unions’ status as exclusive representative of the employees in the bargaining unit, which it argues exists solely by virtue of Sections 602 and 606 of PERA. Id. at 30-31 (citing 43 P.S. §§ 1101.602; 606).

Reinforcing this latter point, Amicus Pennsylvania State Education Association (“PSEA”) argues Gustafson incorrectly contends her breach of duty of fair representation claim arises out of the common law. Instead, amicus asserts a duty of fair representation claim “arises always and only in the context of exclusive representation authority that is provided by statute.” PSEA Amicus Brief at 3 (citing Vaca, 386 U.S. at 177; Case v.

[J-29-2025] - 8 Hazelton Area Educ. Support Personnel Ass’n, 928 A.2d 1154 (Pa. Cmwlth. 2007); Felice v. Sever, 985 F.2d 1221, 1227-28 (3d Cir. 1993)).6 Additionally, AFSCME contends Gustafson’s claim is based on her assertion that she was entitled to a more advantageous resolution of her grievance under the collective bargaining agreement. Resolution of that claim, and the determination of whether AFSCME’s actions actually caused Gustafson any harm, necessarily requires resolution of a dispute arising under the collective bargaining agreement. As such, AFSCME asserts PERA bars Gustafson’s claim for damages and limits the remedy for her duty of fair representation claim to an order directing the Unions to arbitrate her grievance nunc pro tunc. Additionally, AFSCME emphasizes that since Gustafson’s claim is based on her assertion that the Union mishandled her grievance and she was entitled to a more advantageous outcome under the collective bargaining agreement, her claim is based on the Commonwealth’s violation of the collective bargaining agreement, requiring it be arbitrated pursuant to Section 903. AFSCME’s Reply Brief at 21.

A proper reading of our decision in Martino, AFSCME insists, supports its position.

AFSCME asserts Martino rejected the remedial scheme that developed in the private sector under the federal Labor Management Relations Act (“LMRA”), 29 U.S.C. §§ 141, et seq., and instead held that in a public employee’s duty of fair representation claim “the employee’s relief under PERA is limited to an order from the chancellor compelling arbitration of the underlying grievance.” AFSCME’s Brief at 16 (quoting Martino, 480 A.2d 6 In addition to PSEA, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC, the American Federation of Teachers, the Service Employees International Union, and the United Food and Commercial Workers International Union, the Pennsylvania State Corrections Officers Association, Pennsylvania State Lodge, Fraternal Order of Police, International Association of Fire Fighters, Local Union Nos. 22, 319 and 627, Lackawanna and Lehigh County Deputy Sheriffs Associations, Fraternal Order of Transit Police and Temple University Police Association, and the Association of Pennsylvania State College and University Faculty filed amici briefs in support of AFSCME.

[J-29-2025] - 9 at 245). According to AFSCME, if the arbitrator finds a violation of the collective bargaining agreement during the subsequent arbitration, Martino directs that the arbitrator shall apportion any damages remedy between the union and the employer. In this vein, AFSCME criticizes the Commonwealth Court’s reliance on Vaca for the proposition that an employee’s remedy in a duty of fair representation claim is not limited to arbitration of the underlying grievance. Per AFSCME, Martino explicitly rejected Vaca’s reasoning for duty of fair representation claims arising under PERA. Id. at 23 (citing Martino, 480 A.2d at 248). In fact, AFSCME contends Martino unequivocally “held that an order compelling arbitration of the grievance nunc pro tunc awarded to a successful duty of fair representation plaintiff ‘provides the employee with a complete and adequate legal remedy.’” Id. at 24 (quoting Martino, 480 A.2d at 248 n.10). AFSCME insists that this remedial framework for a proven breach of the duty of fair representation is designed to provide the bargaining unit employee “precisely the treatment all the employees in the [bargaining] unit are entitled to under the collective bargaining agreement.” AFSCME’s Reply Brief at 7 (quoting Martino, 480 A. 2d at 252).7 In light of its position that the sole remedy for a public employee’s duty of fair representation claim under PERA is arbitration, AFSCME contends that the public employer is an indispensable party in any such action. AFSCME contends “a party is indispensable when he has such an interest that a final decree cannot be made without affecting it, or leaving the controversy in such a condition that the final determination may be wholly inconsistent with equity and good conscience.” Id. at 41 (quoting Van Buskirk According to AFSCME, the only exception to this rule is when the employee alleges, and ultimately proves, that “the employer actively participated with the union in its bad faith deprivation of the employee’s right to protection under the collective bargaining agreement[.]” AFSCME’s Brief at 16 (quoting Martino, 480 A.2d at 251 n.16). Under those circumstances, AFSCME asserts “the court may determine that a damages remedy is appropriate and ‘can direct different appropriate apportionment to the backpay liability.’” Id. (quoting Martino, 480 A.2d at 251 n.16).

[J-29-2025] - 10 v. Van Buskirk, 590 A.2d 4, 7 (Pa. 1991). AFSCME further highlights that in Martino, this Court explained that “in a duty of fair representation case where the remedy is an order compelling arbitration, ‘the employer approaches the status of an indispensable party to the litigation in the sense that the dispute cannot be finally resolved with equity and good conscience without his participation.’” Id. at 42 (quoting Martino, 480 A.2d at 245). In AFSCME’s view, that the employer is an indispensable party is an unavoidable conclusion since an order compelling arbitration of the underlying grievance would be utterly meaningless if it was directed solely to the union. Only if the employer is a party to the duty of fair representation case can the court order it to participate in arbitration and only if it participates in arbitration can the arbitrator direct it to remedy any contractual violation it is found to have committed. Thus, AFSCME asserts, the public employer’s participation is necessary to enable the employee to obtain the only relief permitted under PERA and to resolve the case with equity and good conscience, making it indispensable.

Gustafson retorts that Section 903 does not constrain her remedy to an order directing AFSCME to proceed to arbitration on her underlying grievance nunc pro tunc because her duty of fair representation claim arises out of the common law rather than the collective bargaining agreement. As such, Gustafson argues PERA does not apply. She contends our appellate courts have confirmed that PERA does not apply to such actions because they do not constitute an unfair labor practice. Gustafson’s Brief at 25 (citing Case v. Hazelton Area Educ. Support Pers. Ass’n, 928 A.2d 1154, 1161 (Pa. Cmwlth.

2007)). In Gustafson’s view, PERA applies only when arbitration is at issue and not in a tort claim for damages for the union’s breach of the duty of fair representation when reinstatement is not involved. According to Gustafson, this Court recognized the duty of fair dealing as a common law cause of action for which a union can be held liable for damages in Falsetti when we held “[if] the [u]nion, in processing an employee’s grievance,

[J-29-2025] - 11 does not act in good faith, in a reasonable manner and without fraud, it becomes liable in damages for breach of duty.” Id. at 21 (quoting Falsetti¸ 161 A.2d at 895 (emphasis provided by Gustafson removed)).

While Gustafson argues her duty of fair representation claim arises out of AFSCME’s discriminatory mishandling of her grievance due to her nonmember status, she acknowledges that a court may be required to analyze the underlying grievance during the damages phase of her case. Nevertheless, she asserts that we previously recognized the merits of an underlying grievance pertain only to damages when we noted that “[w]hether there was just cause becomes relevant on the issue of damages, only after bad faith has been shown.” Id. at 29 (quoting Ziccardi, 456 A.2d at 981). Therefore, Gustafson posits that the necessity to analyze the merits of the underlying grievance does not require the court to reopen the grievance by sending it back to arbitration nunc pro tunc. Gustafson analogizes her duty of fair representation claim to a legal malpractice claim where courts must analyze the merits of the client’s underlying case without reopening the matter.

Gustafson further argues that to hold otherwise would require the court to alter the terms of the collective bargaining agreement’s arbitration limitations period, for which courts lack the authority.

Her position, Gustafson asserts, is in line with Martino, which she insists provides for arbitration when it is the requested remedy and is necessary to make the plaintiff whole but does not alter the common law paradigm when an employee opts to seek a damages remedy from the union. In Martino, Gustafson contends, PERA was implicated since the statute applied to the plaintiff’s suit in equity against his employer for wrongful discharge.

In Gustafson’s view, the remedy of nunc pro tunc arbitration is appropriate when damages and other court-ordered relief cannot make the employee whole and the only type of remedy that could make the employee whole is one that, under PERA, can be awarded

[J-29-2025] - 12 only through the arbitration process. She insists that this is not the case here, because she is not seeking reinstatement or other equitable relief but, rather, is seeking to be made whole via damages from AFSCME for breach of its duty. In response, AFSCME asserts the relief sought by an employee is not determinative of the relief to which the employee is entitled. In its view, a duty of fair representation plaintiff does not get to decide whether and when arbitration of a dispute is mandatory pursuant to Section 903 merely through the relief sought. Section 903, AFSCME stresses, makes arbitration mandatory even if the employee attempts to seek different relief. AFSCME’s Reply Brief at 21.

Finally, as she insists a public employee is not limited to seeking the equitable relief of nunc pro tunc arbitration for a union’s breach of its duty of fair representation, Gustafson maintains that a public employer is not necessarily an indispensable party to such a claim. According to Gustafson, “[i]f the employee is not seeking reinstatement or arbitration, and is only seeking damages from the union for an alleged breach of its duty of fair representation, then the employer does not approach the status of an indispensable party.” Id. at 15-16 (quoting Pa. Soc. Servs. Union v. Lynn, 677 A.2d 371, 374 (Pa. Cmwlth. 1996)). In her view, if a public employee seeks to be made whole via damages from the union, the public employer is not required to be joined as a party in order for the employee to obtain relief. In other words, Gustafson argues a public employer’s involvement in an employee’s duty of fair representation claim against a union is dependent on the relief the employee is seeking. If the employee is seeking arbitration or reinstatement the employer may be an indispensable party, but if, as is the case here, the employee is merely seeking damages from the union, then the employer is not indispensable.8 Gustafson rejects AFSCME’s contention that a public employee can only seek damages in a duty of fair representation claim if the employee alleges, and ultimately proves, collusion between the employer and the union. In her view, allegations of collusion (continued…) [J-29-2025] - 13 IV. Discussion The Supreme Court of the United States first recognized individual employees’ right to equitable relief against their union for breaches of the duty of fair representation in Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192 (1944). Martino 480 A.2d at 246 n.9. Then, in Falsetti, this Court held that “[i]f the [u]nion, in processing an employee’s grievance, does not act in good faith, in a reasonable manner and without fraud, it becomes liable in damages for breach of duty.” 161 A.2d at 895 (footnote omitted).

Subsequent to Falsetti, the Supreme Court in Vaca observed that “it is now well established that, as the exclusive bargaining representative of the employees in [employee’s] bargaining unit, the [u]nion had a statutory duty fairly to represent all of those employees, both in its collective bargaining with [the employer] … and in its enforcement of the resulting collective bargaining agreement.” 386 U.S. at 77 (citing, inter alia, Ford Motor Co. v. Huffman, 345 U.S. 330 (1953); Humphrey v. Moore, 375 U.S. 335 (1964)).

We further explained that a union owes this duty of fair representation to all members of the bargaining unit it is certified to serve, union members and non-members alike. See Falsetti. at 895 n.21 (a union breaches its duty if it “refuse[s] to press a justifiable grievance either because of laziness, prejudice or unwillingness to spend money on behalf of employees who [are] not members of the union.” (internal quotations and citation omitted; emphasis added)).

Also, in Falsetti, we noted that “[a] union’s duty of fair representation is founded upon the … relationship between the union and its members, as well as the duty imposed upon the union by state and federal labor statutes.” 161 A.2d at 895 n.21. According to Vaca, a union’s “statutory authority to represent all members of a designated unit includes between the union and the employer are necessary only if the employee is seeking damages from the employer. Gustafson’s Brief at 42 (citing Speer v. Philadelphia Housing Authority, 533 A.2d 504, 506 (Pa. Cmwlth. 1987)).

[J-29-2025] - 14 a statutory obligation to serve the interest of all members without hostility or discrimination towards any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.” Vaca, 386 U.S at 177. Further, when an employee alleges a union breached its duty of fair representation by failing to arbitrate the employee’s grievance “the employee’s action is based on the employer’s alleged breach of [the collective bargaining agreement] plus the union’s alleged wrongful failure to afford him his contractual remedy of arbitration.” Vaca, 386 U.S at 196. As to an employee’s remedy for a union’s breach of its duty of fair representation, the Vaca Court stated “an order compelling arbitration should be viewed as one of the available remedies when a breach of the union’s duty is proved. But we see no reason inflexibly to require arbitration in all cases.” Id.; see also Falsetti, 161 A.2d at 895 (“[i]f the [u]nion, in processing an employee’s grievance, does not act in good faith, in a reasonable manner and without fraud, it becomes liable in damages for breach of duty.” (emphasis added) (footnote omitted).

The aforementioned cases, in addition to other federal matters which discussed a union’s duty of fair representation and an employee’s corresponding remedy for said breach, arose under federal labor law, specifically the LMRA. See Martino, 480 A.2d at 245-46. Public employees in the Commonwealth, however, are not governed by the LMRA. See 29 U.S.C. §§ 142(3); 152(2), (3). Rather, PERA is the pertinent statute. See P.S. §§ 1101.301(1), (2). As such, cases discussing a union’s duty of fair representation and an employee’s right to sue for breach of that duty under federal labor law “are instructive, [but] they are not authoritative” in Pennsylvania cases involving public employees, unions representing those public employees, and public employers, which are not controlled by federal labor law. Id. at 249.

That said, in Ziccardi, we held that a public employee union’s refusal to submit a grievance to arbitration was not an unfair labor practice under PERA and applied Falsetti’s

[J-29-2025] - 15 holding that “a member of a bargaining unit has a right to sue his union for failure to proceed to arbitration when the complaint alleges bad faith” in the PERA context. Ziccardi, 456 A.2d at 330.9 Similar to their federally regulated counterparts, public sector unions’ duty of fair representation is derived from their statutory authority as the exclusive representative of all members of the bargaining unit the unions have been selected to represent. See 43 P.S. §§ 1101.602; 606. Therefore, even though PERA does not specifically mention a claim for breach of the duty of fair representation, such a claim certainly arises out of PERA in the public employee context. Contrary to the assertions made in the dissent, we are not suggesting that a public employee union’s duty of fair representation arises out of the collective bargaining agreement. See Dissenting Op. at 10. The duty itself “is founded upon the … relationship between the union and its members, as well as the duty imposed upon the union by” PERA. Falsetti, 161 A.2d at 895 n.21. It is the breach of that duty, as the High Court explained in Vaca, that arises, at least partially, out of the collective bargaining agreement when the breach is based on the union’s failure to arbitrate the employee’s grievance. See Vaca, 386 U.S. at 196.

Additionally, unions representing public employees’ duty of fair representation extends

[J-29-2025] - 16 equally to union and non-union members alike. Pa. Labor Rels. Bd. v. Eastern Lancaster Cnty. Educ. Ass’n, 427 A.2d 305, 307 (Pa. Cmwlth. 1981).

While we have adopted the federally recognized duty of fair representation and corresponding cause of action for the breach of such duty in the public employee context in Pennsylvania, we have departed from the federal approach to an employee’s remedy for a union’s breach of its duty. As discussed above, the Supreme Court in Vaca stated that “an order compelling arbitration should be viewed as one of the available remedies when a breach of the union’s duty is proved. But we see no reason inflexibly to require arbitration in all cases.” 386 U.S at 196. In explaining its reasoning, the High Court continued: [i]n some cases, for example, at least part of the employee’s damages may be attributable to the union’s breach of duty, and an arbitrator may have no power under the bargaining agreement to award such damages against the union. In other cases, the arbitrable issues may be substantially resolved in the course of trying the fair representation controversy. In such situations, the court should be free to decide the contractual claim and to award the employee appropriate damages or equitable relief. Id. Notably, this Court did not find this reasoning persuasive and explicitly rejected it in Martino because it “would entrust resolution of the merits of the underlying grievance to the court rather than the arbitrator[.]” 480 A.2d at 248. The reason for our rejection of the analysis articulated in Vaca was based primarily on the disparate ways in which the LMRA and PERA approach arbitration of labor disputes. Under the LMRA, arbitration of labor disputes is permitted, and federal case law encourages it. Id. at 248 n.10. PERA, on the other hand, does not just encourage arbitration of labor disputes but affirmatively mandates it pursuant to Section 903. 43. P.S. §1101.903 (“Arbitration of disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement is mandatory.”).

[J-29-2025] - 17 Along these same lines, we have previously recognized the distinction between the statutes’ different approaches, explaining PERA’s arbitration policy “is even stronger than that embodied in federal labor policy. Federal policy merely favors the submission of disputes to arbitration, while the PERA requires it.” Bd. of Educ. v. Phila. Fed. Of Teachers, 346 A.2d 35, 39 (Pa. 1975) (internal citations omitted). With this distinction and PERA’s arbitration mandate in mind, we concluded in Martino that if a public employee proves the union breached its duty of fair representation, the court of common pleas, sitting in equity, “may, under proper circumstances, order the union and employer to arbitrate the aggrieved employee’s grievance” nunc pro tunc and that such an outcome “provides the employee with a complete and adequate remedy.” 480 A.2d at 251. We further concluded that in cases governed by PERA, nunc pro tunc arbitration is the only available remedy for the court of common pleas in cases where a union breaches its duty of fair representation. Id. at 252. In rejecting our interpretation of Martino and adopting Vaca’s position that “[t]he appropriate remedy for a breach of a union’s duty of fair representation must vary with the circumstances of the particular breach[,]” Dissenting Op. at 21 (quoting Vaca, 386 U.S. at 195), the dissent fails to address the significant difference in the approaches to arbitration taken by PERA and its federal counterparts and Martino’s express rejection of the reasoning in Vaca.

Turning to the matter at issue, we find that there are significant differences between Martino and the present case. Importantly, unlike the employee in Martino, Gustafson filed her present complaint solely against AFSCME and not the Commonwealth, her employer. Additionally, Gustafson does not seek equitable relief of reinstatement or arbitration of her underlying grievance, but, rather, seeks to be made whole exclusively through money damages from AFSCME. That said, these differences do not alter the

[J-29-2025] - 18 application of our reasoning in Martino.10 Under the plain language of PERA, whether arbitration is mandatory is not based on the party the employee files suit against or the relief the employee seeks. Specifically, per Section 903, “[a]rbitration of disputes or grievances arising out of the interpretation of the provisions of a collective bargaining agreement is mandatory.” 43 P.S. § 1101.903. Thus, the requirement of arbitration is based on whether the dispute arises out of the interpretation of the collective bargaining agreement between the union and the employer and not, as Gustafson and the dissent contend, on the remedy sought by the employee.

A thorough review of Gustafson’s complaint evinces that her dispute with AFSCME falls within Section 903’s arbitration mandate. Gustafson alleges AFSCME violated its duty of fair representation “by failing to fairly represent her during the investigation and processing of her grievance[.]” Complaint at ¶ 54; R.R. at 12a. Specifically, Gustafson accuses AFSCME of “failing to try to help [her] or otherwise represent her in connection with the workplace investigation[,]” “failing to adequately pursue or protect her interest in

Instead, we focused on the fact that “PERA makes arbitration of all disputes arising under public sector collective bargaining agreements the exclusive remedy for unresolved grievances[.]” Martino, 480 A.2d at 249. Likewise, the dissent’s position that Martino should be limited to the principle “that an employee who sues their union for breaching its duty of fair representation in handling a grievance is limited to the remedy of arbitration nunc pro tunc only when that employee seeks reinstatement for being discharged without just cause under the relevant [collective bargaining agreement] and the union fails to process the related grievance[,]” Dissenting Op. at 13, is not supported by Martino’s holding. Martino held that “[o]nce it has been determined that the union breached its duty of fair representation, the Court of Common Pleas sitting in equity ma[]y order the completion of the arbitration procedure and, in cases governed by state labor law its power is limited to that remedy.” 480 A.2d at 252. (emphasis added). By its own language, Martino applies to all cases governed by state labor law, i.e. PERA, and is clearly not limited in the manner proposed by the dissent.

[J-29-2025] - 19 the processing or resolution of her grievance[,]” “failing to communicate with [her] regarding the grievance or to consult with or otherwise inform her of its status and on its resolution[,]” and “preventing [her] from appealing or otherwise challenging the grievance resolution.” Id. at ¶¶ 64-67; R.R. at 13a-14a. At the heart of Gustafson’s complaint is her assertion that the grievance resolution agreed to by AFSCME was inadequate and she was entitled to a more advantageous outcome under the collective bargaining agreement.

See id. at ¶¶ 42-46; R.R. at 11a.

Gustafson acknowledges that the trial court may be required to analyze the merits of her underlying grievance but insists that analysis would only relate to what damages she is entitled to from AFSCME. Gustafson’s Brief at 23 (“[A]lthough the merits of the underlying grievance might have to be examined by the trial court, they would be considered only through the lens of damages.”); id. at 29 (“[T]he merits of the grievance may need to be examined, but only to assess the value of the claim.”). The dissent similarly acknowledges that under its paradigm the trial court “would be required to examine the underlying grievance in assessing damages if [Gustafson] were to successfully prove that AFSCME breached its duty in handling her grievance.” Dissenting Op. at 19-20. The fact that the court would only be required to analyze the merits of the underlying grievance in determining damages is of no moment. The necessity to analyze the merits of the underlying grievance at any stage of the proceedings would “entrust resolution of the merits of the underlying grievance to the court rather than the arbitrator[.]”11 Martino, 480 A.2d at 248. Assumption of this role by the court is impermissible pursuant to Section 903’s arbitration mandate. Gustafson’s claim “is based Section 903’s arbitration mandate also makes Gustafson’s and the dissent’s legal malpractice analogy inapt. There is no statutory corollary to Section 903 that mandates that a client’s case precipitating the filing of a malpractice action be arbitrated. The fact that courts may regularly analyze the merits of an underlying case in the legal malpractice arena does not nullify Section 903’s arbitration mandate in the public employee context.

[J-29-2025] - 20 on [the Commonwealth’s] alleged breach of [the collective bargaining agreement] plus [AFSCME’s] alleged wrongful failure to afford [Gustafson her] contractual remedy of arbitration.” Vaca, 386 U.S. at 198. See also Waklet-Riker v. Sayre Area Educ. Ass’n, 656 A.2d 138, 140 (Pa. Super. 1995) (Finding the essence of the employee’s claim was the terms and conditions of the collective bargaining agreement and the failure by the employer and the union to follow those terms. Thus, the court determined the dispute arose out of the interpretation of the collective bargaining agreement and PERA controlled what relief was available). We therefore conclude that when a public employee’s claim for a union’s breach of its duty of fair representation stems from the union’s alleged mishandling of a grievance, the claim constitutes a “dispute … arising out of the interpretation of the provisions of a collective bargaining agreement” and the employee’s remedy from the court is limited to an order directing the underlying grievance be arbitrated nunc pro tunc. 43 P.S. § 1101.903.12,13 Finally, in directing our attention to AFSCME’s third issue, we note that it is well- established that an employee does not have a right to bring an equity action against an employer for breach of a collective bargaining agreement or for a union’s failure to take a grievance to arbitration. Ziccardi, 456 A.2d at 981; Martino, 480 A.2d at 243. Instead, as explained above, the employee’s avenue to relief is to file an equity action against the

[J-29-2025] - 21 union for breach of its duty of fair representation, as Gustafson did here. Falsetti, 161 A.2d at 896; Ziccardi, 456 A.2d at 981; Martino, 480 A.2d at 243-44. In light of this, and our conclusion that PERA limits a public employee’s relief to an order compelling nunc pro tunc arbitration of the underlying grievance, we must now determine whether the public employer is a necessary and indispensable party to the employee’s claim against the union.

We have previously stated that a party is indispensable “when his or her rights are so connected with the claims of the litigants that no decree can be made without impairing those rights.” City of Philadelphia v. Commonwealth, 838 A.2d 566, 581 (Pa. 2003) (quoting Sprague v. Casey, 550 A.2d 184, 189 (Pa. 1988)). A party is further indispensable when it “has such an interest that a final decree cannot be made without affecting it, or leaving the controversy in such a condition that the final determination may be wholly inconsistent with equity and good conscience.” Van Buskirk v. Van Buskirk, 590 A.2d 4, 7 (Pa. 1991) (quoting Hartley v. Langkamp and Elder, 90 A. 402, 403 (Pa. 1914)).

In Martino, we stated that in cases where a public employee seeks arbitration of an underlying grievance, “the public employer approaches the status of an indispensable party to the litigation in the sense that the dispute cannot be finally resolved with equity and good conscience without his participation.” 480 A.2d at 245. Subsequent to Martino, our courts have retained public employers as an indispensable party in employees’ breach of duty of fair representation cases against their unions after dismissing the direct claims against the employer “so that the remedy of arbitration, if warranted, may be completely and adequately enforced.” Casner v. Am. Fed’n of State, Cnty., and Mun. Emp., 658 A.2d 865, 867 (Pa. Cmwlth. 1995); see also, e.g., Garzella v. Borough of Dunmore, 62 A.3d 486, 493 (Pa. Cmwlth. 2013), Reisinger v. Commonwealth, Dept. of Corrections, 568 A.2d 1357, 1361 (Pa. Cmwlth. 1990), Krenselak v. Canon-McMillan School Dist., 866 A.2d 346,

[J-29-2025] - 22 (Pa. Cmwlth. 1989); but see Lynn, 677 A.2d 371 (finding the public employer was not an indispensable party in an employee’s breach of duty of fair representation action against the union where the employee alleged collusion between the union and the employee, did not seek arbitration or reinstatement, and merely sought money damages from the union).

In Reisinger, the public employer agreed it could be joined in an employee’s breach of duty of fair representation claim against the union “solely for the purpose of implementing an order granting relief by way of compelling arbitration.” 568 A.2d at 1361.

We concur that a public employer’s presence is necessary when an employee’s remedy is limited to an order compelling arbitration of the underlying grievance nunc pro tunc as an order directing arbitration solely against a union would be toothless, as a union cannot arbitrate the grievance against itself. In this regard, the public employer’s participation is essential in ensuring that the dispute between the employee and the union is resolved with equity and good conscience. Thus, in such cases, the public employer not only approaches the position of an indispensable party but becomes an indispensable party.

Moreover, contrary to Gustafson’s insistence, limiting a public employee’s remedy to nunc pro tunc arbitration does not immunize the union for its breach. While we rejected Vaca’s remedy analysis for public employee claims for breach of duty of fair representation under PERA in Martino, supra, we were persuaded by the Supreme Court’s analysis in Bowen v. U.S. Postal Service, 459 U.S. 212 (1983), that “an employer who wrongfully discharges an employee protected by a collective bargaining agreement containing an arbitration clause, is only responsible for backpay that accrues prior to the hypothetical date upon which an arbitrator would have issued an award had the employee’s union taken the matter to arbitration.” Martino, 480 A.2d at 248-49. When the union wrongly failed to proceed to arbitration, according to Martino, Bowen held that the union was responsible

[J-29-2025] - 23 for the backpay owed to the employee subsequent to that hypothetical date. Id. We concluded that, “[i]n the absence of an apportionment providing meaningful sanctions against the union, incentive to comply with the grievance procedure would be diminished.” Id. at 251. Consistent with our reasoning in Martino, and contrary to the dissent’s attempt to dismiss Martino’s discussion of apportionment as mere dicta, if a court orders an employee’s underlying grievance to be arbitrated nunc pro tunc due to the union’s breach of its duty of fair representation, the arbitrator is required to determine the merits of the employee’s grievance and apportion damages, if any, between the employer and the union in accordance with their respective responsibility. See Martino, 480 A.2d at 252.

V. Conclusion Gustafson’s claim against AFSCME for the union’s breach of its duty of fair representation stems from AFSCME’s alleged mishandling of Gustafson’s grievance against the Commonwealth. As such, under PERA, her remedy is limited to an order from the court compelling AFSCME and the Commonwealth to arbitrate her grievance nunc pro tunc. In order to facilitate this relief, if warranted, the Commonwealth, as Gustafson’s employer, is an indispensable party to her action. The order of the Commonwealth Court is thus reversed.

Justices Dougherty, Wecht and McCaffery join the opinion.

Justice McCaffery files a concurring opinion.

Chief Justice Todd files a dissenting opinion in which Justices Donohue and Brobson join.

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