Court Rules SRC Can’t Void Teachers’ Contract

Huge victory for teachers means district must find another way to save $54 million.

Protestors in October demonstrate against the school district's sudden decision to cancel teachers and others contract and force them to pay health care premiums. The Commonwealth Court just ruled the SRC lacks the power to void the teacher contract.

Protestors in October demonstrate against the school district’s sudden decision to cancel teachers and others contract and force them to pay health care premiums. The Commonwealth Court just ruled the SRC lacks the power to void the teacher contract.

[Update, 3:25 p.m.] SRC Chairman Bill Green says his board hasn’t yet decided if it will appeal the ruling. “I’m obviously very disappointed, but I’m not sure I understand the reasoning of the court,” Green said.

He’s not sure what happens next. “We said in the beginning we hope to resolve this through negotiation and not litigation, but that has not been possible and still appears not to be possible,” Green said.

He said the district had hoped to end this fiscal year on relatively stable financial footing, and be able to ask the state and city for new school funds that would be used not just to plug deficits, but to invest in improving city schools. “If this stands, it would put us in the place of asking for money to avoid cuts, instead of asking for money to allow (Superintendent) Bill Hite and his team to be proactive and transform our schools.”

Green estimates the deficit next year will be about $80 million if the ruling is not appealed and new city or state funds are not allocated for the schools. “The problem is, there’s very few places to go (for cuts) except class size,” Green said.

[Original, 12:11 p.m.] In a unanimous decision, a five-judge panel of the Commonwealth Court ruled this morning that the School Reform Commission lacks the power to void its contract with the teacher’s union and impose new terms, as the SRC did on October 6, of last year.

The decision is emphatic, and it represents a huge victory for the Philadelphia Federation of Teachers and a major setback for the SRC and its plan to improve the district’s dismal financial condition in part by requiring teachers to pay 10-13 percent of the costs of their health care coverage. Under the contract the SRC voided, teachers paid nothing into their health care plans.

It’s not clear yet if the School District will appeal. If it does not, and the ruling stands, the implications are profound.

  • The district will likely be forced to adopt extreme measures this year, and potentially next, to make up the dollars it had hoped to gain by making teachers pay into their health care plan. By imposing terms, the district expected to save $54 million this fiscal year and as much as $70 million in future years. Now that money has to come from somewhere else. Further spending cuts seem inevitable.
  • This development is also certain to increase the district’s “ask” of both the city and the state. That could well mean tax hikes, potentially steep ones, especially at the local level.
  • For labor, the ruling is a vindication that contracts and collective bargaining cannot be easily abrogated, even when there is language in state law that appears to give management (the SRC) an upper hand.
  • The ruling may put pressure on state lawmakers to open the pocketbook for city schools a bit more. After all, the SRC deployed its “nuclear option” by voiding the contract, only to see the bomb defused by Commonwealth Court. The district can now plausibly say to lawmakers: “What would you have us do now?”

The court’s ruling was not unsympathetic to the SRC’s motives and the school district’s financial struggles. The decision reads:

This Court is cognizant of the dire financial situation which the District currently faces and the SRC’s extensive efforts to achieve the overall goal of properly and adequately meeting the educational needs of the students. There have been numerous difficult decisions that the SRC has been forced to make in an effort to overcome these economic hurdles, including a one-third reduction in staff and the closing of 31 schools in recent years. We are also cognizant of, and commend, the efforts of both the District and its employees to reach amicable resolutions in the past, as evidenced by multiple CBAs and one-year extensions since the SRC assumed control, as well as extensive negotiations with PFT over the past 21 months towards a new CBA. We also recognize that the SRC’s actions have been aimed at effecting needed economies in the District’s schools to provide the necessary education to its students.

But the court concluded that the SRC simply lacks the legal authority to void the contract and impose terms.

We cannot find that the legislature has provided the means expressly required to pursue the current path chosen by the SRC, i.e., unilaterally imposing upon the PFT new economic terms and conditions of employment…


To effectuate its desired means, the SRC must look to the General Assembly to enact legislation providing it with the authority to proceed with unilateral modifications that alter an expired CBA (or the status quo) in the absence of an impasse.


Commonwealth Court Ruling on PFT Contract