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

> Supreme Court of Pennsylvania · January 21, 2026

URL: https://www.frixlaw.com/law-library/cases/11243930

## Case

- **Court:** Supreme Court of Pennsylvania
- **Decided:** January 21, 2026
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Mundy, Sallie
- **Judges:** Mundy, Sallie; Todd, Chief Justice Debra
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

[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

1 As discussed infra, the trial court granted AFSCME’s preliminary objections.
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.
2 Act of July 23, 1970, P.L. 563, No. 195, 43 P.S. §§ 1101.101, et seq.

3 For the purposes of PERA, Gustafson is a “public employe,” 43 P.S.§ 1101.301(2), and

the AFSCME Appellants are all “employe organizations,” 43 P.S. § 1101.301(3), that act
as Gustafson’s exclusive representative, 43 P.S. § 1101.606.

[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.

4 At Ebensburg Center, when employees are “taken off the floor” due to an investigation,

they are still considered to be working but do not have any interactions with residents.
5 When employees at Ebensburg Center are “taken off the floor” they are not eligible to

work overtime hours. Overtime priority is determined by an “equalization” process
whereby employees who more frequently accept overtime opportunities gain priority for
future overtime opportunities.

[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-

68 (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

7 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

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

43 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

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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

9 In Ziccardi, this Court appears to have misstated the relevant facts underlying Falsetti,

noting in that case, we “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.” 456 A.2d at 329-30. Falsetti, however, did not
involve a public employee but instead involved a former coal company employee who
sued his former union, Local No. 2026, United Mine Workers of America, and his former
private employer, Pittsburgh Consolidated Coal Company. Our determination of whether
PERA limits public employees’ relief for their unions’ breach of the duty of fair
representation, therefore, does not impact the continued applicability of Falsetti’s holding
in the private sector context. While Falsetti did not involve a public employee or employer,
we did apply the duty of fair representation in such a context in Ziccardi and courts of this
Commonwealth have subsequently continuously applied this same duty to unions
representing public-sector employees. Here, neither of the parties argue that public
sector unions do not have such a duty.

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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.”).

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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

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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

10 The dissent’s reliance on the fact that the employee in Martino sought nunc pro tunc

arbitration rather than monetary damages from the union is misplaced. Martino’s rejection
of Vaca’s more flexible approach did not rely on the remedy sought by the employee.
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.

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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

11 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.

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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

12 Our holding does not address scenarios where the union’s purported breach of its duty

of fair representation stems from circumstances other than its alleged mishandling of an
employee’s grievance or when the employee alleges conspiracy or collusion between the
union and the employer, as those are not the cases currently before us.
13 We are not unsympathetic to the dissent’s concern that our holding could embolden

unions to “engag[e] 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.” Dissenting Op. at 14. That concern, however, does not permit us to ignore
the plain language of Section 903’s arbitration mandate. To the extent our General
Assembly shares the dissent’s concerns, it is free to amend PERA to remove such claims
from arbitration.

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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,

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348 (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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11243930. Public record. Not legal advice.