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Employment Rights

July 23rd, 2019 by Rieders Travis in Employment Rights

FAIR LABOR STANDARDS ACT-BONUSES-THIRD PARTIES PROVIDING BONUSES

Secretary, United States Dept of Labor v. Bristol Excavating, et al., 2019 U.S. App. LEXIS 24767 (3d Cir. August 20, 2019) Jordan, C.J.  This case presents a matter of first impression: whether, within the meaning of the Fair Labor Standards Act (the “FLSA” or “Act”), 29 U.S.C. § 203 et. seq., an employer must treat bonuses provided by third parties as “remuneration for employment” when calculating employees’ overtime rate of pay.

Under the FLSA’s overtime provisions, id. § 207, employers must pay employees one-and-a-half times their “regular rate” of pay for all hours worked above a forty-hour work week. 29 U.S.C. § 207(a). “[R]egular rate” is defined as including “all remuneration for employment paid to, or on behalf of, the employee,” subject to eight enumerated exemptions. Id. § 207(e)(1)-(8). But “remuneration for employment” is not defined in the overtime provisions or elsewhere in the Act.

The Department of Labor, despite decades of enforcing the FLSA, has only recently discovered in that 80-year-old statute a basis for asserting that employers are bound to include bonuses from third parties in the regular rate of pay when calculating overtime pay, regardless of what the employer and employee may have agreed. This case thus asks us whether the expectations of employers and employees are made irrelevant by a novel statutory interpretation and a new enforcement strategy by the Department of Labor.

The District Court, agreeing with the position of the Department of Labor, concluded that the incentive bonuses at issue here must be included in the regular rate of pay because they are remuneration for employment and do not qualify for any of the statutory exemptions. We disagree that all incentive bonuses provided by third parties are necessarily “remuneration for employment” under the Act and therefore properly included in the regular rate of pay when calculating overtime pay. Instead, we hold that incentive bonuses provided by third parties may or may not be remuneration for employment, depending on the understanding of the employer and employee. In this case, the factual record does not support a finding that all of the incentive bonuses were necessarily remuneration for employment. We will therefore affirm in part, vacate in part, and remand in part for further proceedings.

WRONGFUL DISCHARGE-ILLEGAL RECORDING

Javitz v. County of Luzerne, No. 18-2389 (3d Cir. October 10, 2019) Restrepo, C.J.  Donna Davis-Javitz (“Javitz”) was hired as the Director of Human Resources for Luzerne County. Shortly into her tenure, she was allegedly the victim of an illegal recording by a public employee in her role as local union representative. After reporting this crime, Javitz’s relationship with her employer became rocky, and she was subsequently fired. She now alleges that her firing was unconstitutional under the First 3 Amendment and, alternatively, under the Fourteenth Amendment’s Due Process Clause. The District Court ruled against Javitz on both claims. For the reasons that follow, we will affirm the District Court’s due process ruling, but will reverse and remand its First Amendment ruling.

Our inquiry in this case has been a practical one. De Ritis, 861 F.3d at 453. Javitz found herself in a county role that placed her within reach of local authority figures. The position was accompanied with a County Ethics Code that encouraged reporting of wrongdoing. Javitz was allegedly the victim of a crime, which she reported. The crime, subsequent contact with local authority figures regarding that crime, and the lack of any formal duty to report that crime are evidence that she was not experiencing or acting within the primary functions of her employment. Thus, we hold that Javitz’s speech was that of a citizen speaking to a matter of public concern.

FAIR LABOR STANDARDS ACT-MINIMUM WAGE-DANCERS IN ADULT GENTLEMENS CLUB

FAIR LABOR STANDARDS ACT—MINIMUM WAGE—DANCERS IN ADULT GENTLEMENS CLUB – Verma v. 3001 Castor, Inc., Third Cir., No. 18-2462 (August 30, 2019).  AMBRO, Circuit Judge

A jury in the District Court awarded more than $4.5 million to a class of dancers at the Penthouse Club, an “adult gentleman’s club” in Philadelphia owned and operated by 3001 Castor, Inc., for unpaid minimum wages and unjust enrichment under Pennsylvania law. The Court denied the motion of Castor to set aside the verdict, and it appeals to us. We join our District Court colleague, Judge Brody, in concluding that, as a matter of “economic reality,” the dancers were employees of Castor, not its independent contractors, and we reject Castor’s novel argument that the federal Fair Labor Standards Act (“FLSA”) precludes the class’s claims for unjust enrichment. We also conclude that [*2]  Castor is not entitled to any credit or offset against the jury award for payments already received by the dancers. We thus affirm across the board and sustain the jury’s verdict.

WRONGFUL DISCHARGE-WHISTLEBLOWER-FEDERAL RAILWAY SAFETY ACT

WRONGFUL DISCHARGE—WHISTLEBLOWER—FEDERAL RAILWAY SAFETY ACT – Guerra v. Conrail, 3rd. Cir., No. 18-2471 (August 21, 2019). PORTER, Circuit Judge.

The Federal Railway Safety Act (“FRSA”) provides that railroad carriers may not retaliate against employees who blow the whistle on certain safety violations. If a carrier breaks this rule, the aggrieved employee may seek relief by filing a complaint with the Occupational Safety and Health Administration (“OSHA”) “not later than 180 days” after the alleged retaliation occurred. See 49 U.S.C. § 20109(d)(2)(A)(ii). The Secretary of Labor then has 210 days to issue a “final decision” on the matter. If the Secretary takes too long, “the employee may bring an original action … for de novo review in the appropriate district court of the United States.” Id. § 20109(d)(3).

This case asks whether FRSA’s 180-day limitations period is “jurisdictional.” That is, if an employee fails to file a timely complaint [*2]  with OSHA, does that divest a district court of subject matter jurisdiction? Or is the limitations period simply a claim-processing rule, the breach of which may defeat an employee’s claim, but not a district court’s jurisdiction to hear the case?

After considering the text, context, and history of the provision, and mindful of the Supreme Court’s decisions in this area, we hold that FRSA’s 180-day limitations period in 49 U.S.C. § 20109(d)(2)(A)(ii) is a nonjurisdictional claim-processing rule. The District Court assumed otherwise, but we will affirm the District Court’s decision on other grounds.

WHISTLEBLOWER LAW-REPORT TO PENNDOT-PRIMA FACIE CASE

Greco v. Myers Coach Lines, Inc., 2018 Pa. Super. 306 (November 15, 2018) Ott, J.  Myers Coach Lines appealed from the judgment of $2,400 in a wrongful discharge case pursuant to the Whistleblower Law.  43 P.S. §§ 1421-1428.  The court vacated the judgment and remanded for entry of JNOV in favor of Myers Coach.  The claim was that of a firing due to a safety report to PennDOT.  Also asserted was a common law claim of wrongful discharge.  The first question is, what is “wrongdoing” as defined by the law?  

In order to prove a violation of the Whistleblower Law, Greco must demonstrate she made a report of some action by her employer or its agent, which, if proven, would constitute a violation of a law or regulation.  Moreover, the report must be of an actual violation, not a potential or contemplated violation.  It is for that reason Greco’s Whistleblower Law claim fails.

Therefore, while her superiors expressed their dissatisfaction with the regulations, and their skepticism regarding her interpretation of those reguolations, such actions do not constitute a “wrongdoing.”

According to her own testimnony, Greco did not make a report of a “wrongdoing.”

Additionally, with regard to her superiors at Myers Coach, Greco failed to establish she reported a “wrongdoing” to them.  Grego never reported this contemplated “wrongdoing” by her employer to anyone.

Consequently, we are compelled to conclude Greco failed to establish a violation of the Whistleblower Law based on Myers Coach’s termination of her employment.  Although we agree with Greco that Myers Coach should have been grateful for her persistence in preventing one of its school bus drivers from taking the road when it may have been unsafe for him to do so, we find we are constrained by the language of the Law.  Indeed, while it seems reasonable that the Whistleblower Law should protect an employee who, as here, preemptively prevented its employer from committing a violation of the law, the judicial decisions applying the statute do not permit such an interpretation under the facts of this case.

We conclude Greco’s termination in the present case, assuming it was based solely on her inquiries to PennDOT concerning Berardinelli’s eligibility to return to work, does not violate any of the limited “public policy” exceptions to the at-will employment doctrine, which have been recognized by the courts of this Commonwealth.  Accordingly, while we may agree Greco’s employer acted vindictively, and exhibited poor business judgment, we find Greco is entitled to no relief with regard to her cause of action for common law wrongful discharge.

WAGE PAYMENT AND COLLECTION LAW-LAWYER-LIQUIDATED DAMAGES-GOOD FAITH DISPUTE OF SALARY CLAIM

Yablonski v. Keevican Weiss Bauerle & Hirsch LLC, 2018 Pa. Super. LEXIS 1125 (October 17, 2018) Strassburger, J.  This is a case of a lawyer who got fired from his job.  The court found that it was proper to award liquidated damages to the lawyer, along with interest, for breach in violation of the Wage Payment and Collection law.  The court, as liquidated damages, granted 25% of the amount owed.  The court found a contract existed between the parties and they credited the employee-lawyer’s testimony.  This was proper.  The amount was due and owing for more than 30 days.  The law is a vehicle for successful plaintiffs to be compensated for unpaid back wages based upon existing contractual claims.  The court has not previously defined “good faith,” but the trial court addressed the issue.  The court’s finding on credibility concerning good faith will be respected.  

WHISTLEBLOWER LAW-JUDICIAL OFFICERS

Scrip v Seneca, 2018, Pa. Cmwlth., LEXIS 342 (July 23, 2018) Brobson J. The question is whether Whistleblower Law permits action against judicial branch or whether that’s prohibited by sovereign immunity? We do agree with Scrip, however, that Judiciary employees who comply with the Code of Conduct and report wrongdoing are deserving of protection from retaliation. We can cite to well-publicized examples where individuals within the Judiciary have engaged in wrongdoing, sharking the public’s confidence in our legal system. In an effort to root out such wrongdoing, the Supreme Court adopted the Code of Conduct, which imposed on employees of the Judiciary a duty to report. The Supreme Court may, under its supervisory authority over the Judiciary and without violating the separation of powers, take remedial action when an employee rightfully reports misconduct and is subjected to retaliation. As discussed above, such authority, however, does not extend to effectively amending  a statute to create a cause of action under the Whistleblower Law or waiving sovereign immunity. The Supreme Court did not (and cannot) waive sovereign immunity and thereby authorize civil actions for wrongful termination of employment against the Commonwealth and its officials and employees acting within the scope of their duties. Such power lies exclusively within the Legislature. Scrip has cited to no law enacted by the General Assembly that waives sovereign immunity for such a claim. Cf. McNichols v Dep’t of Transp., 804 A.2d 1264, 1267 & n.1 (Pa. Cmwlth.) (holding sovereign immunity barred common law wrongful termination action against state agency), appeal denied, 572 Pa. 727, 814 A.2d 679 (Pa. 2002). We thus need not engage in a public policy analysis and will affirm common pleas’ dismissal of Count II of the Complaint. For the foregoing reasons, we hold that common pleas did not err in sustaining the preliminary objections and dismissing the remaining counts of Scrip’s Complaint with prejudice. Accordingly, we affirm common pleas’ June 1, 2017 Order.

EMPLOYMENT LAW-WHISTLEBLOWER-EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT

Gillispie v. Regionalcare Hospital Partners, Inc., 2018 U.S. App. LEXIS 15741 (3d Cir. June 12, 2018) McKee, C.J.  We are asked to determine whether the District Court erred in dismissing a claim under the “whistleblower” protection provision of the Emergency Medical Treatment and Active Labor Act (“EMTALA”), 42 U.S.C. § 1395dd. The dispute here arises from Marie Gillispie’s allegations that the Southwest Regional Medical Center (the “Medical Center”) terminated her employment because she reported the Medical Center’s allegedly improper discharge of an unstable patient and because she reported its alleged substandard care of an admitted patient. 

The District Court granted summary judgment in favor of the Medical Center based upon its conclusion that Gillispie had not established a prima facie case for retaliation under EMTALA and because various common law claims that Gillispie included in her complaint were preempted by state statutes. For the reasons that follow, we will affirm.

Title VII’s anti-retaliation provision is once again illustrative. Unlike EMTALA, Title VII provides protection against retaliatory discharge of an employee who “opposed” a Title VII violation or “participated in any manner” in an investigation into a violation. We cannot ignore the difference between the breadth of that protection and the much narrower protection Congress provided under EMTALA for an employee who reports a violation. Congress had the benefit of hindsight when it drafted EMTALA, and its decision to exclude certain conduct that would be protected under Title VII suggests that EMTALA’s whistleblower protection is narrower than the analogous provision of Title VII. 

It is undisputed that Gillispie did not give anyone at the Medical Center any information about E.R.’s emergency room visit or discharge that they were not already aware of. Thus, Gillispie has failed to demonstrate that she engaged in activity protected by EMTALA’s whistleblower provision. She did not make a “report” and cannot establish a prima facie case for relief as a protected whistleblower under EMTALA.

Pennsylvania’s Whistleblower Law generally provides a civil cause of action for an employee whose public employer retaliates for reporting the employer’s “wrongdoing or waste.” As we have explained, Gillispie is alleging that she was terminated in retaliation for reporting the Medical Center’s discharge of E.R. (count II) and deficient care of L.S. (count V). Her claims fall squarely within the ambit of the MCARE Act if they involve either an “incident” or a “serious event.” Gillispie concedes that she is not alleging she reported a serious event. Accordingly, we need only determine if her claim involves an “incident” under Pennsylvania law

For the foregoing reasons, we will affirm the judgment of the District Court.

ARBITRATION-EMPLOYMENT

Epic System Corp. v. Lewis, No. 16-285, (S. Ct.  May 21, 2018), Gorsuch, J.

JUSTICE GORSUCH delivered the opinion of the Court. Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?

As a matter of policy these questions are surely debatable. But as a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings. Nor can we agree with the employees’ suggestion that the National Labor Relations Act (NLRA) offers a conflicting command. It is this Court’s duty to interpret Congress’s statutes as a harmonious whole rather than at war with one another. And abiding that duty here leads to an unmistakable conclusion. The NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum. This Court has never read a right to class actions into the NLRA—and for three quarters of a century neither did the National Labor Relations Board. Far from conflicting, the Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties’ agreements unlawful.   

ERISA-ANTI-ASSIGNMENT CLAUSE

American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield, No. 17-1663 (3d Cir. May 16, 2018) Krause, C.J.  With the evolution of managed healthcare and the advent of provider networks and other cost-control mechanisms, many insurers in recent years have incorporated into their health insurance plans clauses that purport to bar insureds from assigning their claims to any third party—even the healthcare provider that rendered the service. This appeal presents the question whether such “anti-assignment clauses” are enforceable, or whether, as argued by the healthcare provider in this case whose claim was dismissed for lack of standing, they are antithetical to the Employee Retirement Income Security Act (“ERISA”) and to public policy. For the reasons that follow, we conclude that anti-assignment clauses in ERISA-governed health insurance plans are enforceable, and we will therefore affirm the judgment of the District Court.

In sum, anti-assignment clauses in ERISA-governed health insurance plans are generally enforceable, the Insurers did not waive their objections to Appellant’s standing, and Appellant, having waived its argument for a remand to perfect the power of attorney, concedes that the power of attorney in this record is invalid under state law. For those reasons, the District Court correctly held that Appellant lacked standing to proceed in federal court, and we will affirm the District Court’s judgment of dismissal.

DAMAGES-NON-ECONOMIC-WHISTLEBLOWER LAW

Bailets v. Pennsylvania Turnpike Commission, et al, No. 126 MAP 2016 (Pa. S.Ct. March 27, 2018), Dougherty, J.

This is a direct appeal by defendant/appellant Pennsylvania Turnpike Commission (“PTC”) from the Commonwealth Court’s order entering judgment on a $3.2 million verdict in favor of plaintiff/appellee Ralph M. Bailets (“Bailets”) following a non-jury trial of his claims arising under the Whistleblower Law, 43 P.S. §§ 421-1428 (“Law”). The verdict included $1.6 million in non-economic damages. PTC presents a question of first impression in Pennsylvania: whether non-economic damages for items such as embarrassment, humiliation, loss of reputation and mental anguish are available to plaintiffs in actions brought under the Law. Additionally, if non-economic damages are authorized under the Law, PTC asks us to determine whether the verdict amount was excessive in this case. We conclude non-economic damages are available to successful plaintiffs under the Law and the trial court did not err or abuse its discretion in entering a verdict amount of $1.6 million. Accordingly, we affirm the judgment.

We view the immunity waiver aspect of the Law as supportive of its primary purpose — to protect whistleblowers who come forth with good faith reports of wrongdoing. Our conclusion in this regard is buttressed by the fact the Law is not strictly limited to public employers, but also protects employees fired in retaliation for exposing wrongdoing by private employers that receive public funds. Accordingly, we determine the Law’s provisions must be liberally construed to effect its salutary remedial object. O’Rourke, 778 A.2d at 1203.

Next, we observe our jurisprudence has long recognized non-economic losses are actual losses. See Singer v. Sheppard, 346 A.2d 897, 901 n.9 (Pa. 1975) (“Pennsylvania law clearly indicates that non-economic losses are actual losses.”), citing Laurelli v. Shapiro, 206 A.2d 308 (Pa. 1965), and Corcoran v. McNeal, 161 A.2d 367 (Pa. 1960). Indeed, PTC does not submit, nor could it, that losses for categories of injury such as humiliation, mental anguish, and loss of reputation are not “actual.” PTC’s argument, instead, is that the General Assembly intended “actual damages” under the Law to include recovery for economic injury only.

In sum, we hold the General Assembly’s use of the phrase “actual damages” expressed its intention that a successful plaintiff/claimant in a whistleblower action may recover damages for non-economic losses such as humiliation, embarrassment, loss of reputation and mental anguish in addition to any other remedies available under the Law.

Here, we cannot say the verdict amount was excessive, or that it shocks the conscience, or that it was clearly based on partiality, prejudice or passion.

A legitimate inference from the evidence presented at trial was the amount of Bailets’s non-economic losses in the form of mental anguish (evidenced by worry, fear, guilt, insomnia, and weeping), embarrassment, humiliation, and loss of reputation were commensurate with and equal to the economic damages he suffered. We reiterate we have affirmed the Commonwealth Court’s verdict with respect to the amount of economic damages awarded. Bailets v. Pa. Turnpike Comm’n., 168 A.3d 172 (Pa. 2017). As we determine there was no error or abuse of discretion in the court’s denial of remittitur, or judgment n.o.v. as to non-economic damages, we now affirm its non-economic damages verdict as well.

EMPLOYMENT LAW-MERIT SYSTEMS PROTECTION BOARD-SERIOUS ADVERSE EMPLOYMENT ACTION

Perry v. Merit System Protection Board, 2017 U.S. LEXIS 4044 (June 23, 2017) Ginsburg, J.  This case concerns the proper forum for judicial review when a federal employee complains of a serious adverse employment action taken against him, one falling within the compass of the Civil Service Reform Act of 1978 (CSRA), 5 U. S. C. §1101 et seq., and attributes the action, in whole or in part, to bias based on race, gender, age, or disability, in violation of federal antidiscrimination laws. We refer to complaints of that order, descriptively, as “mixed cases.” In the CSRA, Congress created the Merit Systems Protection Board (MSPB or Board) to review certain serious personnel actions against federal employees. If an employee asserts rights under the CSRA only, MSPB decisions, all agree, are subject to judicial review exclusively in the Federal Circuit. §7703(b)(1). If the employee asserts no civil-service rights, invoking only federal antidiscrimination law, the proper forum for judicial review, again all agree, is a federal district court, see Kloeckner v. Solis, 568 U. S. 41, 46 (2012); the Federal Circuit, while empowered to review MSPB decisions on civil-service claims, §7703(b)(1)(A), lacks authority over claims arising under antidiscrimination laws, see §7703(c). When a complaint presents a mixed case, and the MSPB dismisses it, must the employee resort to the Federal Circuit for review of any civil-service issue, reserving claims under federal antidiscrimination law for discrete district court adjudication? If the MSPB dismisses a mixed case on the merits, the parties agree, review authority lies in district court, not in the Federal Circuit. In Kloeckner, 568 U. S., at 50, 56, we held, the proper review forum is also the district court when the MSPB dismisses a mixed case on procedural grounds, in Kloeckner itself, failure to meet a deadline for Board review set by the MSPB. We hold today that the review route remains the same when the MSPB types its dismissal of a mixed case as “jurisdictional.” As in Kloeckner, we are mindful that review rights should be read not to protract proceedings, increase costs, and stymie employees,1 but to secure expeditious resolution of the claims employees present. See Elgin v. Department of Treasury, 567 U. S. 1, 15 (2012) (emphasizing need for “clear guidance about the proper forum for [an] employee’s [CSRA] claims”). Cf. Fed. Rule Civ. Proc. l.

WORKERS’ COMPENSATION-SUBROGATION-WAIVER

Kalmanowicz v. Workers’ Compensation Appeal Board, 2017 Pa. Commw. LEXIS 433 (July 7, 2017) Brobson, J.  In the instant case, we discern no evidence that could support a conclusion that Employer acted in bad faith or failed to exercise due diligence in enforcing its subrogation rights, and we decline to expand our definition of conduct by which an employer may implicitly waive its absolute right to subrogation.  See Thompson, 781 A.2d at 1151.  Thus, Employer did not waive its right to subrogation pursuant to Section 319 of the Act by contesting Claimant’s claim petition.  Accordingly, the October 5, 2016 order of the Board, affirming the May 13, 2016 order of the WCJ, is affirmed.

Gross v. Nova Chems. Servs., 2017 Pa. Super. LEXIS 290

Chief pilot claims constructive discharge.  People who are forced to fly together did not communicate which a company thought was a safety situation.  In order to comply with duties under the FAA, including to have final authority over operation of the aircraft, the employee’s employment was terminated.  It was claimed that the employer refused to address unsafe flight conditions.  The lower court granted preliminary objections and the Superior Court agreed.  Statutorily created public policy pertained to aviation may drive only from the promulgated rules and regulations of this Commonwealth, not the FAA.  Precedent confines the scope of “public policy” of the Commonwealth in this context to our Constitution, court decisions and statutes promulgated by our legislature.  The federal duty expressed in 14 CFR 913(a) does not reflect the rule or regulation promulgated by the Department of Transportation, nor has our general assembly enacted a law requiring the Department of Transportation to promulgate a discreet rule or regulation that requires conformity with 14 CFR 913(a).  Accordingly, Superior Court discerned no public policy of the Commonwealth within the FAA statutory duty.  The case was therefore dismissed and no public policy was violated of Pennsylvania.

WRONGFUL DISCHARGE-SUMMARY JUDGMENT

Metalico Pittsburgh v. Newman, 2017 Pa. Super. LEXIS 266 (April 19, 2017) Solano, J.  Appellant Metalico Pittsburgh, Inc. appeals from the order granting partial summary judgment in favor of Appellee Allegheny Raw Materials, Inc. (“ARM”) and its current employees, Appellees Douglas Newman and Ray Medred (together “Employees”).  We reverse.

In sum, we hold that the trial court erred in finding that the non-solicitation provisions were not applicable because there was a failure of consideration with respect to them.  We therefore reverse the trial court’s order granting summary judgment in favor of ARM and the Employees.

FAMILY MEDICAL LEAVE ACT-CAUSATION

A jury found that plaintiff was not the victim of discrimination or retaliation.  It was claimed that the court should have given a mixed-mode of jury instruction in connection with the FMLA claim.  There must be evidence, direct or circumstantial, permitting a reasonable juror to conclude that the plaintiff’s use of FMLA leave was a negative factor in the employer’s adverse employment decision.  Because the District Court erred in requiring the employee to provide direct evidence of retaliation, the FMLA verdict will be vacated and the case remanded on that claim.  With respect to the ADA claim, the court acted within its discretion in including the testimony of a co-worker but did not commit reversible error here.  Egan v. Delaware River Port Authority, No. 16-1471 (3rd Cir. March 21, 2017) Shwartz, C.J.

WRONGFUL DISCHARGE-FILING OF A COMPLAINT

Kegerise v. Delgrande, 147 A.3d 930 (Pa. Cmwlth. 2016).  The School Board argued that Dr. Kegerise’s filing of her federal complaint constituted a resignation.  According to the School Board, Dr. Kegerise’s verified federal complaint alleging constructive discharge inherently constitutes a resignation because resignation is a necessary prerequisite of the cause of action.  On its face, the constructive discharge standard contemplates termination without a plaintiff’s actual resignation, as long as a reasonable person would have felt compelled to resign, even if the plaintiff did not actually resign.  The test is whether a hypothetical, reasonable employee would have resigned, not the employee alleging constructive discharge.  Therefore, because Dr. Kegerise has a clear legal right to perform her duties as superintendent under the School Code and the School Board has a corresponding duty to reinstate her, the trial court’s issuance of mandamus was proper.  We discern no error in the trial court’s consideration of the procedures that culminated in the School Board’s vote to accept Dr. Kegerise’s alleged resignation. The School Board’s argument that Dr. Kegerise’s filing of the federal complaint constituted a resignation because resignation is a necessary predicate of the cause of action is unpersuasive. Additionally, the School Board’s assertion that mandamus is improper because Dr. Kegerise failed to establish a clear right to relief and a corresponding duty in the School Board to reinstate her must fail. Moreover, we discern no error in the trial court’s consideration of the novel, but lawful, procedures the School Board used in voting on Dr. Kegerise’s alleged resignation and its conclusion that, because she did not resign, a hearing pursuant to section 1080 of the School Code would be proper if the School Board chooses to remove her as superintendent.

WHISTLEBLOWER LAW

The case is remanded by the Commonwealth Court to the trial court for the trial court to make independent findings of fact in conclusion on the police officer’s whistleblower claim or to hold a new bench trial.  There was no statutory right to a jury trial pursuant to the whistleblower law.  There had been a trial, even though there should not have been.  Therefore the case goes back to the trial court to make its own findings or for a bench trial.  Zenak v. Police Athletic League, 132 A.3d 541 (Pa. Cmwlth. 2016).

Davis v. Workers’ Compensation Appeal Board, 131 A.3d 537 (Pa. Commw. 2015)

Workers’ Comp Appeal Board and the Commonwealth Court affirmed the decision of a workers’ compensation judge to grant the petition to review compensation benefits offset (offset petition) filed by PA Social Services Union (employer) and its insurance carrier.  Claimant settled her uninsured motorist claim.  The employer and their insurance company asserted a lien which was the total amount paid to claimant for medical and wage-loss benefits.  The court found that the insurance company was entitled to subrogate against claimant’s settlement proceeds from the underinsured carrier.  The claimant took the position that the employer should have the right to subrogation only where it has paid for the uninsured/underinsured motorist coverage.  However this court has already concluded that an employer has a right to subrogation not only where the employer paid for the policy, but also where a third party, such as a customer or a coworker, paid for the policy.  Because claimant’s co-employee paid for the uninsured motorist insurance policy, employer was entitled to subrogate against claimant’s settlement proceeds.

Sukenik v. Township of Elizabeth, 131 A.3d 550 (Pa. Commw. 2016)

Summary judgment had been granted in favor of the township.  The Commonwealth Court affirmed.  Sukenik alleged that he was terminated for reporting wrongdoing and waste in violation of the Pennsylvania Whistleblower Law.  The law that the employer violated must specifically define some prohibited conduct or it cannot be violated in a way that constitutes a “wrongdoing.”  The ordinance at issue did not specifically define any prohibited conduct.  The ordinance does not prohibit an individual commissioner from excluding the Township Manager from attendance at the Board’s executive sessions.  The court also found that Sukenik failed to establish the essential elements of a whistleblower claim because he did not report a “wrongdoing” or “waste” as defined by law.

CIVIL RIGHTS-SEX DISCRIMINATION-EMPLOYMENT DISCRIMINATION

CIVIL RIGHTS – TITLE VII – TEMP EMPLOYEES

Faush v. Tuesday Morning, Inc., 808 F.3d 208 (3d Cir. 2015).  Matthew Faush is an African-American employee of Labor Ready, a staffing firm.  He was a temporary worker assigned to Tuesday Morning’s stores.  He was subject to racial slurs and racially motivated accusations.  Eventually he was terminated.  A rational jury could find that Faush was Tuesday Morning’s employee for purposes of Title VII and the Human Relations Act.  Therefore the court vacated in part summary judgment and sent the case back to the trial court.  The parties obviously disputed the appropriate test for an employment relationship.  Two entities may be “co-employers” or “joint employers” of one employee for purposes of Title VII.  The question of whether Tuesday Morning was Faush’s employer must be left to the jury unless reasonable minds cannot differ.  The court then went through all of the evidence.  Although Faush was paid and dispatched by Labor Ready, he worked under the direct supervision and control of Tuesday Morning managers who instructed the Labor Ready employees on the details of the work they were doing.  Moreover Labor Ready disclaimed responsibility for supervising the temporary employee’s work, and on the rare occasions that a Labor Ready supervisor visited the Tuesday Morning store, she acted as a mere conduit for instructions from the Tuesday Morning manager.

WHISTLEBLOWER LAW-JUDICIARY

Russo v. Allegheny County, 125 A.3d 113 (Pa. Cmwlth. 2015).  The remedies set forth in the Whistleblower Law requiring the reinstatement of a fired employee or the reinstatement of seniority rights would interfere with the exclusive right of courts to supervise their employees and therefore would be unconstitutional as applied against court employers. The rules of statutory construction require that we presume that the General Assembly does not intend “a result that is absurd, impossible of execution or unreasonable” or that would “violate the Constitution of ․ this Commonwealth.” 1 Pa.C.S. § 1922(1), (3). Because the Whistleblower Law would infringe on separation of powers and would only be partly enforceable against judicial employers, we conclude that the General Assembly did not intend the judiciary to be included within the definition of an employer subject to the Whistleblower Law. Accordingly, we grant CCP’s preliminary objection seeking dismissal of Russo’s claim under the Whistleblower Law.

C.A.B. (Derry Area School Dist.), 2016 WL 56261, ___ A.3d ___ (2016)

Mary Ann Protz (claimant) petitioned for review of an order of the Workers’ Compensation Appeal Board (Board) affirming the decision of the Workers’ Compensation Judge (WCJ) which awarded Derry Area School District (Employer) and PSBA/Old Republic Insurance Company (Insurer) subrogation of a third party medical malpractice award Claimant received with respect to medical treatment she underwent following her accepted workplace injury.

 

Regarding subrogation, the Board explained that under Section 319 of the Act, the right of subrogation is automatic and absolute.  77 P.S. § 671.  Because the plain language of Section 508 of the MCARE Act expressly eliminated subrogation rights with respect to past medical bills and past lost earnings but was silent on the issue of future payments of expenses and lost earnings, the Board concluded that it did not preclude the subrogation sought in this case and affirmed the WCJ’s order.  40 P.S. § 1303.508.

 

This plain-meaning interpretation is consistent with the purpose of subrogation insofar as it prevents Claimant from enjoying a double recovery for the same injury, namely, workers’ compensation benefits and medical malpractice proceeds which both compensate her for her complex regional pain syndrome, a complication she would not have experienced but for the alleged medical malpractice.  Moreover, it furthers the goal of ensuring that Employer and Insurer are not compelled to compensate Claimant for injuries caused by the negligence of a third party – that is, the medical malpractice Defendants.

 

Accordingly, we affirm the Board’s order awarding Employer and Insurer subrogation of Claimant’s third party medical malpractice recovery with respect to the award for her future medical expenses and wage loss.

WHISTLEBLOWER-CAUSATION- Bailets v. Pennsylvania Turnpike Commission, 123 A.2d 300 (Pa. 2015)

Commonwealth Court granted summary judgment and denied relief under the Whistleblower Law.  Pennsylvania Supreme Court reversed and remanded from further proceedings.  The records show that Ralph Bailets was employed by the Pennsylvania Turnpike Commission from 1998 to 2008.  He had very high ratings.  The employee frequently complained of improprieties and wasteful practices.  The employee’s job and responsibilities were changed in June 2008 and he was removed from an additional position around the same time.  Ultimately his position was terminated in November 2008.  The employee contended that evidence concerning his complaints and the continued hiring of unqualified patronage employees undermines the “pretextual” position that he was fired for budgetary reasons.  The Whistleblower Law is intended to protect employees of public employers who report a violation or suspected violation of state law.  The Whistleblower Law protects employees from retaliation.  Viewed in the light most favorable to the employee, there is sufficient record evidence that superiors admonished the employee not to report his observations or his job would be in jeopardy.  The record also indicates the employee made reports of wrongdoing, which is defined to include a violation of the state or federal statute or regulation.  The case should not have been thrown out by the Commonwealth Court, and there are genuine issues of material fact.

CIVIL RIGHTS-SUSPENSION WITH PAY-ADVERSE EMPLOYMENT ACTION-TITLE VII

Jones v. Southeastern PA Transportation Authority, 796 F.3d 323 (3rd Cir. 2015).  The Third Circuit properly found case dismissed by the trial court where an employee suffered a suspension with pay.  This is not considered an “adverse employment action” under the substantive discrimination provision of Title VII.  A Title VII plaintiff must prove that she suffered an adverse employment action in order to satisfy Step 1 of McDonnell Douglas.  Any adverse actions that the employee suffered were not sufficiently linked to any alleged misconduct to support a claim of discrimination or retaliation.

EMPLOYMENT LAW-WHISTLEBLOWER LAW-PUBLIC POLICY

Appeal taken to order of the Monroe Court of Common Pleas dismissing whistleblower complaint against a township and others.  It was claimed that the dismissal was only because of negative reports on a construction project in the township and that the former employee refused to issue a certificate of compliance on the project upon its completion.  The lower court found that this was not the type of report of wrongdoing that is protected by the Pennsylvania Whistleblower Law.  The trial court also concluded that the employee was an at-will employee and lacked grounds to challenge discharge.  In conclusion, the Commonwealth Court held that the employee stated a valid claim under the Whistleblower Law but not under the public policy exception to at-will employment.  Consequently, the case was sent back in connection with the Whistleblower Law components.  Rohner v. Atkinson, 118 A.3d 486 (Pa. Cmwlth. 2015).

Estate of Denmark ex rel. Hurst v. Williams, 117 A.3d 300 (Pa. Super. 2015)

The Superior Court remanded this case to the trial court so that Hurst might proceed on his amended complaint against Mercy entities on his claims of vicarious liability and corporate negligence.  The lower court had dismissed claims of vicarious liability and corporate negligence against the Mercy Healthcare System as a result of what the appellate court characterized a “procedural morass.”  The court noted that in Sokolski v. Eidelman, 93 A.3d 858 (Pa. Super. 2014), it was concluded that it is not necessary for a plaintiff to establish a right to recover on a claim for vicarious liability based upon the negligence of a specific named employee.  At 117 A.3d 306.  The amended complaint set forth material allegations of negligence upon which claims for vicarious liability against Mercy entities were based, including the patient’s fall causing dislocation of a catheter and other consequences.  Hurst did not identify doctors or nurses allegedly responsible, except for two doctors.  The allegations referenced the nursing staff, attending physicians and other attending personnel and agents, servants or employees.  None of this was lacking in specificity and it did not represent the failure to plead a cause of action against the Mercy entities for vicarious liability.  The lower court also erred in dismissing the corporate counts.  The claims addressed death from septic shock as a result of negligence which occurred at the hospital.  These facts successfully allege violations of duties owed by the hospital to the patient under a corporate theory.  The Mercy entities had actual constructive knowledge of the defect as well.

FAMILY MEDICAL LEAVE ACT OF 1993-CURE OF DEFICIENCIES IN MEDICAL CERTIFICATION

By Cliff Rieders of Rieders, Travis, Humphrey, Waters & Dohrmann posted in Employment Rights on Tuesday, September 1, 2015.

Hansler v. Lehigh Valley Hospital Network, 790 F.3d 499 (3d Cir. 2015).  Deborah Hansler requested intermittent leave from her former employer, Lehigh Valley Health Network (“Lehigh Valley”), under the Family Medical Leave Act of 1993 (“FMLA” or the “Act”), 29 U.S.C. § 2601, et seq.  Hansler submitted a medical certification requesting leave for two days a week for approximately one month.  The medical certification refers to the length of her requested leave but not the nature or duration of her condition.  A few weeks later, after she took several days off work, Lehigh Valley terminated Hansler’s employment without seeking any clarification about her medical certification.  Lehigh Valley cited excessive absences and informed her that the request for leave had been denied.  Hansler sued Lehigh Valley for violations of the Medical Leave Act, and the district Court dismissed the complaint on the basis that the medical certification supporting Hansler’s request for leave was “invalid.”

Liberty Mutual Insurance Company v. Domtar Paper Company, 113 A.3d 1230 (Pa. 2015)

Stewart v. Fed Ex Exp., 114 A.3d 424 (Pa. Super. 2015)

Rothstein v. Unemployment Compensation Board of Review, 114 A.3d 6 (Pa. Cmwlth. 2015)

WORKERS’ COMPENSATION-SUBROGATION-DIRECT THIRD PARTY ACTION

Section 319 of the Workers’ Compensation Act does not permit an employer or their insurance company to commence an action directly against a third-party tortfeasor.  Section 671 of the Workers’ Compensation Act confers on employers or their workers’ compensation insurers a right to pursue a subrogation claim but not directly against a third-party tortfeasor.  This is a situation where the compensated employee has taken no action against the tortfeasor.  The insurance company for the employer cannot take action on their own.  Liberty Mutual Insurance Company v. Domtar Paper Company, 113 A.3d 1230 (Pa. 2015).

WRONGFUL DISCHARGE-WHISTLEBLOWERS-DODD-FRANK-PREDISPUTE ARBITRATION AGREEMENTS

A financial services professional and former employee of Ameritrade executed an employment agreement in which the employees agreed to arbitrate all disputes arising out of the employment.  The employee found out that his employer’s products were priced in a manner that did not comply with securities regulations and he reported this to his supervisor.  He was ultimately fired, and filed a retaliation claim under the Dodd-Frank Act.  The Dodd-Frank Act did not merely create a new cause of action for whistleblowers, it also appended the anti-arbitration provision to the Sarbanes-Oxley cause of action.  In addition to adding the anti-arbitration provision to the Sarbanes-Oxley cause of action, Dodd-Frank also inserted an anti-arbitration provision with identical language into the whistleblower protections of the Commodity Exchange Act.  No predispute arbitration agreement shall be valid or enforceable.  The court, in a very confusing analysis, found that no provision expressly restricts the arbitration of Dodd-Frank retaliation claims.  The fact that congress did not append an anti-arbitration provision to the Dodd-Frank cause of action while contemporaneously adding such provisions elsewhere suggested the omission was deliberate.  Although Congress conferred on whistleblowers the right to resist the arbitration of certain types of retaliation claims, that right does not extend to Dodd-Frank claims arising under 15 U.S.C. § 78u-6(h).  This statutory section is not a whistleblower statute that prohibits the use of predispute arbitration agreements, notwithstanding provisions in other sections of similar laws that do ban predispute arbitration agreements.  Khazin v. TD Ameritrade Holding Corp., 773 F.3d 488 (3d Cir. 2014).

Howard v. A.W. Chesterton Company, 78 A.3d 605 (Pa. 2013)

The theory that each and every exposure to asbestos no matter how small is substantially causative of disease may not be relied upon as a basis to establish substantial-factor causation for diseases that are dose responsive.  In cases involving dose-responsive diseases, expert witnesses may not ignore or refuse to consider dose as a factor in their opinions.  Bare proof of some de minimus exposure to a defendant’s product is insufficient to establish substantial-factor causation for dose responsive diseases.  Relative to the testimony of an expert witness addressing substantial factor causation in a dose responsive disease case, some recent individualized assessment of a plaintiff or decedent’s exposure history is necessary.  Summary judgment is an available vehicle in cases in which only bare de minimus exposure can be demonstrated and where the basis for the expert’s testimony concerning substantial factor causation is the any-exposure theory.

Doherty v. School District of Philadelphia, 772 F.3d 979 (3rd Cir. 2014) – Case Summary

A former employee with the School District of Philadelphia was terminated after publicly disclosing the alleged misconduct of the school district superintendent in steering a prime contract to a minority-owned business.  Doherty filed suit, and the court refused to dismiss the case. The claim alleged First Amendment retaliation and violations of Pennsylvania Whistleblower Law.  Qualified immunity shields government officials from civil damages liability unless the official violated a statutory or constitutional right that was clearly established at the time of the challenged conduct.  The court agreed that Doherty did not speak pursuant to his official duties when he disclosed details of the alleged misconduct in the award of the prime contract.  Doherty’s claim is not foreclosed merely because the subject matter of the speech concerns or relates to his duties.  Doherty’s report to the Philadelphia Inquirer exposing the alleged misconduct is the archetype of speech deserving the highest run of First Amendment protection.  A reasonable jury could conclude that Doherty’s speech would only have been minimally disruptive of the school district work.  Summary judgment was properly denied by the trial court.  Further, the court determined that the law was clearly established and therefore the defendants were not entitled to qualified immunity.  Doherty v. School District of Philadelphia, 772 F.3d 979 (3rd Cir. 2014).

CIVIL RIGHTS-IMMUNITY-QUALIFIED IMMUNITY-FIRST AMENDMENT-RETALIATION

A former employee with the School District of Philadelphia was terminated after publicly disclosing the alleged misconduct of the school district superintendent in steering a prime contract to a minority-owned business.  Doherty filed suit, and the court refused to dismiss the case. The claim alleged First Amendment retaliation and violations of Pennsylvania Whistleblower Law.  Qualified immunity shields government officials from civil damages liability unless the official violated a statutory or constitutional right that was clearly established at the time of the challenged conduct.  The court agreed that Doherty did not speak pursuant to his official duties when he disclosed details of the alleged misconduct in the award of the prime contract.  Doherty’s claim is not foreclosed merely because the subject matter of the speech concerns or relates to his duties.  Doherty’s report to the Philadelphia Inquirer exposing the alleged misconduct is the archetype of speech deserving the highest run of First Amendment protection.  A reasonable jury could conclude that Doherty’s speech would only have been minimally disruptive of the school district work.  Summary judgment was properly denied by the trial court.  Further, the court determined that the law was clearly established and therefore the defendants were not entitled to qualified immunity.  Doherty v. School District of Philadelphia, 772 F.3d 979 (3rd Cir. 2014).

FIDUCIARY DUTY-INVESTMENTS

John Hancock, which provided investment opportunities, was not a fiduciary under ERISA with respect to the actions of John Handcock that participants challenged.  What they challenged are the fees charged by John Hancock.  John Hancock Trust v. John Hancock Life Insurance

Company, 768 F.3d 284 (3rd Cir. 2014).