PHILADELPHIA (CBS) - The Philadelphia School District and the Philadelphia Federation of Teachers have agreed to go to arbitration to settle their dispute over nearly 350 teachers listed for layoffs.

In the meantime, some 1,200 other teachers who got pink slips earlier this month will lose their jobs on July 1st.

The two sides came to an agreement before a scheduled hearing was to begin this morning in Philadelphia Common Pleas Court (see related story).

The union has taken issue with the school district’s decision to exempt 174 “Promise Academy” teachers who were subject to layoff according to the teachers’ contract’s seniority clause.  The district instead handed pink slips to 174 other teachers with more seniority (another related story).

The school district has designated  some of its worst-performing schools — which it is trying to improve with the promise of additional resources — as “promise academies.”

PFT attorney Ralph Teti (above) says an arbitrator will now sort out the layoff dispute.

“The Promise Academy teachers who would otherwise have been laid off if inverse seniority was used will retain their jobs until the completion of the arbitration process,” he told KYW Newsradio. “The 174 non-Promise Academy teachers who received layoff notices — that we maintain should not have received because they had more seniority — will have those layoff notices rescinded.”

Teti is hoping the arbitration process will move along quickly and the entire matter will be settled before school begins in September.

Reported by Paul Kurtz, KYW Newsradio 1060