Pennsylvania Supreme Court Upholds Non-Economic Damages for Whistleblower Claims

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Recently, the Pennsylvania Supreme Court held that wrongfully terminated whistleblowers can recover non-economic damages. Bailets v. Pa. Tpk. Comm’n., 2018 Pa. LEXIS 1498 (2018). Bailets centered around a whistleblower claim made by a manager of the Pennsylvania Turnpike Commission (PTC) alleging that they fired him in retaliation for reporting wrongdoings and waste to his supervisors. The lower court found in Plaintiff’s favor and awarded economic and noneconomic damages totaling over $3 million. The Pennsylvania Supreme Court affirmed the lower court’s decision and award of economic and non-economic damages.

This issue centered on whether the term “actual damages” in Section 125 of the Whistleblower Law should be narrowly or broadly interpreted to include non-economic damages. PTC argued that actual damages refer solely to economic damages because allowance of non-economic damages would be analogous to punitive damages. PTC also argued that exceptions to the Commonwealth’s immunity should be narrowly interpreted and thus non-economic damages should not be read into “actual damages.” The employee argued that actual damages include non-economic damages because the law’s purpose is remedial and serves to compel government compliance to the law. In addition, the employee argued that there is a long precedent in Pennsylvania that actual damages are equivalent to economic and non-economic damages. Furthermore, the employee argues that not awarding non-economic damages “would undermine the very purpose of the law to protect and encourage employee reporters of waste and wrongdoing.”

The Court approached this as an issue of statutory interpretation and held that the law must be liberally construed to allow non-economic damages, thus fulfilling the remedial purpose of the Whistleblower Law. Furthermore, the Court found that reading “actual damages” as solely economic damages would be superfluous considering the statute’s inclusion of different types of economic damages under the allowed types of recovery. The Court agreed with the employee that Pennsylvania’s precedence historically supports the finding that actual damages includes non-economic damages. The Court stressed that the state must allow recovery for non-economic harms such as humiliation, embarrassment, and mental anguish in order to make Plaintiff whole.. Going forward, Bailets is significant in that it will open the door for more claims under the Whistleblower Law and allow for a greater recovery for successful claimants.

For more information, please call our Philadelphia whistleblower lawyers at the Law Offices of Sidkoff Pincus & Green at 215-574-0600 or submit an online inquiry.

Former Manager Fails to Show That Her Former Employer’s Reasons for Termination Were Based on Any Discriminatory Motive

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The Superior Court of Pennsylvania in Ferraro v. Temple University held that Plaintiff failed to show that the legitimate reasons for employee’s termination were pretext for any discriminatory motive. 185 A.3d 396 (Pa. Super. 2018). Plaintiff worked as a manager of patient accounting and was fired at the age of sixty-two for violating another, much younger, employee’s FMLA rights and issuing the same employee an improper citation.

In order to succeed under a claim for age discrimination, Plaintiff had to establish: (1) she belonged to a protected class (at least 40 years old); (2) was qualified for the position; (3) was dismissed despite being qualified; and (4) suffered dismissal under circumstances giving rise to an inference of discrimination. Plaintiff argues that the younger employee was given preferential treatment and that she was terminated because of her age. The Court agreed that Plaintiff had established the four elements for age discrimination, but nonetheless ruled in favor of Temple because Plaintiff failed to establish that Temple had terminated her due to her age and not for any other legitimate reason such as her leaving work early to care for her young child. Plaintiff, although the trial court did not find Temple’s reasons credible, did not prove the termination was done in a discriminatory manner.

For more information, call our employment lawyers in Philadelphia at 215-574-0600 or contact us online. The legal team at the Law Offices of Sidkoff, Pincus & Green represents clients in Pennsylvania and New Jersey.

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Third Circuit Affirms Dismissal of Plaintiff’s Fraud Claim Based on Gist of the Action Doctrine

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In Downs v. Andrews, The Third Circuit held that the gist of the action doctrine barred plaintiff from bringing a fraud claim. 639 Fed.Appx. 816 (2016).  Plaintiffs brought suit for fraud in connection with Defendants’ failure to deliver mortgage notes to Plaintiff. Plaintiff purchased $740,000 of mortgage notes from Defendants. Upon payment, Defendant only delivered a portion of the mortgage notes totaling $399,000. Subsequently, Plaintiff brought suit alleging that the Defendants acted fraudulently because they believe that Defendant never owned the purchased mortgages.

The gist of the action doctrine prevents plaintiffs from recovering damages twice for the same actions. The gist of the action doctrine bars tort claims “based on a party’s actions undertaken in the course of carrying out a contractual agreement.” Further, the gist of the action requires the court to determine if the duty breached is one based in contract or one established by “larger societal policies embodied in the law of torts.”

In this matter, the Court found that the duty breached was one established by contract. The Court narrowly interpreted the duty as the obligation to deliver the purchased notes in accordance with the contract. Therefore, the Court affirmed the lower court’s dismissal of Plaintiffs’ fraud claim.

For more information, call Philadelphia business lawyers at the Law Office of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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Employee Loses Prima Facie Case of Retaliation But May Continue His Defamation Case Against Former Employer

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On March 20, 2018, Plaintiff Haabiyl Mims filed a Complaint alleging retaliatory discharge under the Fair Labor Standards Act of 1938 (FLSA § 15 (a)(3)), Defamation and Defamation Per Se, and Wrongful Termination by Defendants New Age Protection Inc. and Tamisha Thorogood Haabiyl Mims v. New Age Protection, Inc., Civ. Action No. 18-CV-1185, 2018 WL 5829340 (E.D. Pa. 2018). After 5 years working at his former employer, Defendant New Age Protection, Inc., a security corporation, Mims was terminated in March 2017. The given reason was that it appeared as if Mims falsified his timesheet to get paid for time he did not work. This termination was made 8 months after Mims received thousands of dollars in back taxes when New Age was investigated by the Department of Labor. Mims then brought suit, alleging retaliation by his former company.

The Court reviewed the Fair Labor Standards Act (FLSA) to see if Mim’s termination was lawful. In Pennsylvania, courts looks at three necessary elements to establish a prima facie case of retaliation under the FLSA, “(1) the plaintiff engaged in protected activity, (2) the employer took an adverse employment action against him, and (3) there was a causal link between the plaintiff’s protected action and the employer’s adverse action.” Scholly v. JMK Plastering, Inc., No. 07–4998, 2008 WL 2579729, at *3 (E.D. Pa. June 25, 2008) (citing Preobrazhenskaya v. Mercy Hall Infirmary, 2003 WL 21877711 (3d Cir. 2003) (citation omitted)). Mims insisted that his former manager and employer knew of his participation in the DOL investigation and fired him because of it. The Court looked at the Mims’ Complaint and saw that he had no proof that his company or manager knew he took part in the investigation. The Court pointed out that even if his employer knew the eight month gap is too far between to establish a clear connection timewise. The Court also focused on the two promotions that Mims received during his time at the company so they concluded there was no animosity at all. Thus, the Court found that Mims termination did not violate the FLSA.

The Court then moved onto Mims’ allegation of defamation. In Pennsylvania, a A plaintiff must establish: (1) The defamatory character of the communication. (2) Its publication by the defendant. (3) Its application to the plaintiff. (4) The understanding by the recipient of its defamatory meaning. (5) The understanding by the recipient of it as intended to be applied to the plaintiff. A statement is defamatory “if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from association or dealing with him.”

The Court looked at one of the emails that seemed to impute that Mims engaged in criminal and/or improper conduct punishable by either imprisonment or judicial sanction to all employees of the company. The company tried to defend itself by asserting that the email was sent out to only certain privileged people at the company who needed to know that Mims was terminated and why. The Court ruled that the issue was too contentious to decide without further evidence and allowed Mims to amend his Complaint regarding the defamation claim.

At the Law Office of Sidkoff, Pincus & Green, our Pennsylvania and New Jersey attorneys are knowledgeable in all matters related to employment discrimination. To schedule a consultation with a Philadelphia employment lawyer, call 215-574-0600 today or contact us online.

Supreme Court Ruling States That ADEA Applies to Public Employers with Less Than 20 Employees

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A new unanimous ruling by the United States Supreme Court in Mount Lemmon Fire District v. Guido states that all public employers in every state must now comply with the Age Discrimination in Employment Act (ADEA), regardless of how many or how few individuals the organization employs.

Prior to 1974, the ADEA only applied to private employers, which meant that employees of public entities were not protected by law against age discrimination. In 1974, Congress amended the ADEA to include a wider range of employers. Specifically, Congress modified the definition of “employer” to include public employers that had twenty or more employees. However, since the amendment was made, courts interpreted the definition in ways that prevented certain states and political subdivisions from being subject to the ADEA.

In Mount Lemmon, two seasoned fire fighters from Mount Lemmon, Arizona were terminated after budget cuts. The two firefighters claimed that they were discriminated against due to their age, and that the fire department was in violation of the ADEA.  The Equal Employment Opportunity Commission (EEOC) agreed, but the federal district court found in favor of the fire department, because it was a public employer with fewer than 20 employees.

The 9th Circuit Court of Appeals reversed the ruling, stating that the language of the ADEA created a distinction between a “person” employer, who must have at least twenty employees, and a public employer, to whom the 20 employee threshold does not apply. Other circuit courts likewise found the language ambiguous. The Supreme Court granted a review of the case due to the circuit split.

The key issue in the case had to do with the phrase “also means” in the definition clause, and whether it added new categories of employers, or simply clarified the employees mentioned in the clause. The firefighters argued that the wording added new categories of employees, while the Fire District claimed that the language clarified the term “person” to include any organized group of persons, which includes state and local employers.

The Supreme Court found that the phrase, “also means” is additive in nature. As a result, state and political subdivisions are considered an additional category of employers, and thus do not need to satisfy the 20 employee threshold.

Philadelphia Employment Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Represent Clients in Age Discrimination Cases

Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. protect employees who have been discriminated against due to their age. To set up a confidential consultation, call us today at 215-574-0600 or contact us online. Our offices are located in Philadelphia, where we represent clients in Pennsylvania and New Jersey.

9th Circuit Panel Rules in Favor of Uber and Forces Plaintiffs to File Individually in Arbitration

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In effort to have their employment status reclassified from independent contractor to employee, a group of Uber drivers filed a class action lawsuit against the ride sharing company. The drivers claimed they were misclassified based on their job requirements. Ultimately, the Ninth Circuit panel overruled a lower court’s decision and decertified the class, meaning any Uber drivers who wish to continue to pursue legal action will be required to do so individually through arbitration.

All Uber drivers are hired as independent contractors. As a result, they are not reimbursed for items such as gasoline or vehicle maintenance, and they do not receive benefits or overtime pay. Uber’s employment agreement includes an arbitration clause, which states that the driver must pursue any legal claims against the employer through arbitration, as opposed to filing a lawsuit. Very few drivers attempt to contest the arbitration clause because they do not want to lose their job, or jeopardize their chances of being hired. However, a growing number of Uber drivers feel that the independent contractor classification is unfair and that they should be reclassified as employees.

Due to the number of Uber drivers who were pursuing legal action against the ride sharing company, they decided to consolidate their efforts and pursue a class action lawsuit. Ideally, this would save each driver time and money, while resulting in the best possible outcome for each driver. The class action was certified by the lower court and it proceeded in the court system. However, Uber appealed the ruling because they were aware of another case that was pending in the United States Supreme Court that could overturn the Ninth Circuit’s ruling. In Epic Systems Corp. v. Lewis, the Supreme Court ruled in favor of the company by upholding individual arbitration clauses, which in this case meant that ride sharing companies could require workers to waive their right to class actions and pursue arbitration instead. After the Superior Court’s ruling, the Ninth Circuit had no choice but to decertify the class action brought by the Uber drivers and send it to arbitration.

Philadelphia Employment Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Assist Clients with Employment Classification Issues

If you are an independent contractor, and you believe that you should be classified as an employee, you are urged to contact the Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. We represent clients in employment disputes across Pennsylvania and South Jersey.

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Google Sued for Age Discrimination

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More than 200 Google employees have filed a class action lawsuit against the tech giant. They claim the company violated the Age Discrimination in Employment Act by hiring younger candidates over older, equally qualified individuals. Each of the plaintiffs involved in the lawsuit is 40 years of age or older, which they claim was the reason why they were not hired. Google agreed to pay an undisclosed amount to each of the plaintiffs, but the parties have not yet settled on the non-monetary component of the settlement.

The lawsuit, which was originally filed in 2015, alleged that if an older worker applied for the same position as a similarly qualified younger worker, Google was less likely to hire the older worker based on age. In fact, one plaintiff claimed that she was told to include her graduation date on her resume so that the Google recruiter could determine her approximate age. This is a violation of federal law. According to Google employees, there is also a widely known internal code word, known as “Googleyness,” that is used to describe young employees. Google agreed that the term exists, but that it refers to other factors, like the ability to accept constructive feedback and the ability to be a team player.

Google went on to defend itself by saying that its company handbook addresses age discrimination and the fact that it is against the law to withhold employment to an individual based on age. However, the Court case was more interested in the company’s employment track record than what is written in Google’s handbook.

In addition, the Department of Labor found incidences of “extreme” age discrimination at Google after it conducted its own investigation. This may have been a factor in Google’s decision to settle.

Any employee who feels that he or she has been discriminated against based on age, gender, religion, sexual orientation, or any other protected class is urged to contact a reputable employment lawyer. The law protects victims of age discrimination and all other forms of employment discrimination.

Philadelphia Employment Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Represent Clients in Age Discrimination Cases

If you or someone you know has been discriminated against at work because of your age, you are urged to contact the Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. To schedule a consultation, call us at 215-574-0600 or contact us online today. Our offices are conveniently located in Philadelphia, where we serve clients throughout Southeastern Pennsylvania and South Jersey.

EDPA Finds No Breach of Contract or Bad Faith by Company that Raised Monthly Electricity Rates Following First Month “Teaser” Rate

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In Silvis v. Ambit Energy L.P, the Court held that Plaintiff failed to rebut Defendant’s showing that there was no genuine dispute as to any material fact and awarded summary judgment in favor of Defendant. Silvis v. Ambit Energy L.P, 170 F.Supp.3d 754, 759 (E.D. Pa. 2016). Plaintiff contracted with Defendant to supply electricity based on variable rate plan under which she paid a “teaser” rate for the first month and thereon, the rate fluctuated. Plaintiff asserted that Defendant enticed her to switch her supplier. Plaintiff became quickly disappointed after the “teaser” rate expired because her bill would swell during certain months. Ultimately, Plaintiff field a class action alleging breach of contract. Specifically, that Defendant breached its agreements with Plaintiff and the Proposed Class members by charging rates that did not meet contractual obligations.

Under Pennsylvania law, a breach of contract claim includes the following elements: “(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” Because there was no express provision in the contract requiring Defendant to provide a competitive rate, Plaintiff failed to allege a breach of an express contractual provision. Plaintiff also contended that Defendant breached the implied covenant of good faith and fair dealing by exercising its rate-adjusting discretion in bad faith. The Court explained that, while there is no separate cause of action for breach of the implied covenant of good faith and fair dealing, the Courts instead utilize the good faith duty as an interpretive tool to determine the expectations in the context of a breach of contract claim. Plaintiff did not prevail on this claim because she did not proffer any legitimate evidence of bad faith and in order to survive a motion for summary judgment, Plaintiff must show there is a genuine dispute as to a material fact. Thus, Defendant was awarded summary judgment.

Philadelphia contract lawyers at the Law Office of Sidkoff, Pincus & Green P.C. protect employees’ right to work. For assistance in any type of employment law matter, call 215-574-0600 to schedule a consultation in our Philadelphia office, where we represent clients in Pennsylvania and New Jersey, or contact us online.

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Pennsylvania Superior Court Refuses to Pierce the Corporate Veil to Hold Beneficiary of Estate Personally Liable for Corporation’s Debts

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In Mark Hershey Farms, Inc. v. Robinson, the Superior Court reversed the trial court’s ruling to pierce the corporate veil and hold the executor of an estate personally liable for the debts of the company he was operating on behalf of the estate. 171 .3d 810 (Pa. Super. Ct. 2017).  Robinson was the beneficiary of his father’s estate and after his father’s passing, Robinson operated his fathers’ businesses as the executor of his father’s will. Mark Hersey Farms, Inc. (“Mark Hershey”), a creditor of one of Robinson’s father’s businesses, brought suit for the debt. The trial court pierced the corporate veil and found Robinson, along with the business and estate, personally liable for the debts incurred.

Piercing the corporate veil allows the court to disregard the liability insulation provided by the corporate form and find the shareholders personally liable. In Pennsylvania, there is a strong presumption against not piercing the veil, and courts have only found it necessary when it is clear that the corporate form is merely a pretense to hide the shareholders’ wrongdoing. When deciding whether to pierce the corporate veil, courts are concerned with how the corporate records are kept, how the shareholders, other than the dominate shareholder actually function, and whether the dominant shareholder has used assets of the corporation as if they were his own. Appellee’s argued that Appellant gained personal benefit from the business with the company, and as a result, was unjustly enriched. In order to succeed under unjust enrichment, a plaintiff must establish that (1) a benefit was conferred on the defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under the circumstances would be inequitable.

The Court rejected Mark Hershey’s argument because it was not convinced that Robinson received a personal benefit and found that piercing the corporate veil would be without basis. The Court was clear that unjust enrichment does not apply simply because the defendant has received a benefit, and that to succeed on such a claim, Mark Hershey was required to establish that it would be unconscionable for Robinson to retain such benefit.

For more information, call Philadelphia business lawyers at the Law Offices of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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EDPA Grants Summary Judgment Against Medical Laboratory Company Alleging Tortious Interference by Independence Blue Cross

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In Medical Diagnostic Laboratories, LLC. v. Independence Blue Cross, Medical Diagnostic Laboratories, LLC, (“MDL”) alleged that Independence Blue Cross (“IBC”) violated antitrust laws and was engaging in unfair competition by tortuously interfering its existing and proposed business relationships. WL 4899441 *1 (E.D. Pa. October 9, 2018). IBC filed a Motion to Dismiss that alleged MDL failed to state a claim. The Eastern District of Pennsylvania denied the motion and allowed MDL to proceed to discovery. After discovery, IBC filed a Motion for Summary Judgment which was granted. In its suit, MDL alleged that IBC had threatened doctors within its network to stop using MDL. MDL further alleged that several doctors that preferred using MDL’s laboratory to perform testing no longer did so after they received threats from IBC.

In Pennsylvania, to state a claim for tortious interference with a prospective contractual relationship, the plaintiff must prove: “(1) a prospective contract between the plaintiff and a third party; (2) a purposeful act by the defendant taken with the specific intent to harm the existing relation or prevent a prospective relation from occurring; (3) the absence of privilege or justification on the part of the defendant; (4) actual legal damage because of the defendant’s conduct and (5) reasonable likelihood that the relationship would have occurred but for the defendant’s interference.” Medical Diagnostic Laboratories, LLC., WL4899441 at *3; Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 530 (3d Cir. 1998); Ira G. Steffy & Son, Inc. v. Citizens Bank of Pa., 7 A.3d 278, 288–89 (Pa. Super. Ct. 2010).

The Court found no evidence in the record that MDL established prospective contractual relations with any of the providers it identified, nor any evidence that IBC specifically threatened any of these providers. Since MDL failed to establish the requisite prospective contractual relationships with any of the doctors which it alleged IBC threatened, MDL could not prove all the elements of its tortious interference claim. Upon failing to prove all the elements necessary to show that IBC was tortuously interfering with MDL’s prospective business relationships, with doctors in IBC’s coverage plan, MDL asserted that IBC’s tortious interference was really aimed towards prospective clients, not the doctors. The Court noted that for tortious interference to be present in this situation, the prospective contract needed to involve physician relationships not prospective clients. Therefore the Court granted IBC’s Motion for Summary Judgment since MDL failed to prove the requisite elements under their tortious interference claim.

Our office is conveniently located in Center City Philadelphia, allowing us to represent clients throughout the region, including Philadelphia County, Delaware County, and Montgomery County. To discuss your case with one of our highly skilled and experienced Philadelphia business lawyers at the Law Offices of Sidkoff, Pincus & Green call 215-574-0600 today or contact us online to schedule your confidential consultation.

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