Pennsylvania Superior Court Rules Plaintiff Failed to Prove Special Harm Resulting From Defamatory Publication.

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The Superior Court of Pennsylvania denied a plaintiff’s claim for damages when he was unable to prove that the false statements caused actual injury. Shaffer v. Ambrosini, No. 653 WDA 2017, 2018 Pa. Super. (March 28, 2018). Pennsylvania law requires a plaintiff satisfy a seven-factor test to succeed in a defamation claim. This test includes: 1. The defamatory character of the communication; 2. Its publication by the defendant; 3. Its application to the plaintiff; 4. Understanding by the recipient of its defamatory meaning; 5. The understanding by the recipient of it as intended to be applied to the plaintiff; 6. Special harm resulting to the plaintiff from its publication; and 7. Abuse of a conditionally privileged occasion. In this matter, the plaintiff was unable to demonstrate any special harm resulting from the defamatory remark.

Under Pennsylvania law, “for purposes of a Pennsylvania defamation case, proof of actual injury to a private plaintiff’s reputation is a prerequisite to the recovery of damages for other actual injuries, including mental and emotional injuries.” Under this standard, the plaintiff must demonstrate how the statement harmed them, or how the statement “grievously fractured” their reputation in the community.  The court has been clear, it is not enough to be simply embarrassed or annoyed by these statements.

The plaintiff in this case was a part-time public defender who was originally suspended with pay following an incident at his workplace. Plaintiff was referred to an employee assistance program, but never enrolled in anger management courses. Once returning to work, plaintiff was involved in another incident. During the investigation regarding the second incident, the plaintiff’s employer stated that he believed plaintiff to be enrolled in anger management courses. Although this statement was false, the Court determined that the plaintiff had not suffered any harm that “grievously fractured” his standing in the community and affirmed the dismissal of his claim.

At the Law Offices of Sidkoff, Pincus & Green our experienced Philadelphia business lawyers handle many types of legal matters, including defamation claims.If you are interested in having a consultation with one of our Philadelphia business lawyers, please call us at 215-574-0600 or contact us online.

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Third Circuit Affirms Enforcement of Employer-Employee Arbitration Agreement

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On June 20, 2018, the United States Court of Appeals for the Third Circuit held than an arbitration agreement between an employer and employee was still enforceable regardless of whether the employee read the agreement. Ace Am. Ins. Co. v. Guerriero, 2018 WL 3057005 (3d Cir. 2018). In this case, the employee argued that the arbitration agreement was unenforceable because he never received the first two pages of his employer’s Employment Dispute Arbitration Policy. The Court ultimately found in favor of the employer and affirmed the lower court’s decision by finding that there was an agreement to arbitrate and that this dispute fell within the boundaries of that agreement.

Even considering the strong federal and state policies in favor of arbitration, the courts must find that there was a clear agreement between the parties with an intent to arbitrate. If there is an actual agreement to arbitrate, then the court will only find the agreement unenforceable if there is fraud or misconduct that would prevent mutual assent and failure to read the agreement is not a reason to find the agreement unenforceable. Here, the Third Circuit found that the agreement was enforceable because there was mutual assent and a lack of fraud that would excuse the employee from reading the agreement. The employee signed two separate documents showing his intent to arbitrate. Even if the employee’s assertion that he did not have the first two pages of the agreement was correct, the Court found this argument unpersuasive because the employee had access to the agreement through the employer’s website. The Court further stated that “even if there were any ambiguity or question over the scope of the Employment Dispute Arbitration Policy, we would apply the presumption in favor of arbitration.”

At the Law Offices of Sidkoff, Pincus & Green our experienced Philadelphia employment lawyers handle many types of legal matters, including arbitration agreements. If you are interested in having a consultation with one of our Philadelphia business lawyers, please call us at 215-574-0600 or contact us online.

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Pennsylvania Superior Court Upholds Non-Solicitation Agreement Despite Employees Change in Employment Status

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The Pennsylvania Superior court upheld non-solicitation agreements between an employer and employees after their employment agreements expired and the employees continued to work at-will. Metalico Pittsburgh, Inc. v. Newman, 160 A.3d 205 (Pa. Sup. Ct. 2017). Appellees Douglas Newman and Ray Medred (“Employees”) were employed by scrap metal company Metalico Pittsburgh, Inc. (“Employer”) from 2011 to 2015. The Employees signed a three-year employment agreement that included a non-solicitation agreement in part barring employment with any known affiliates or suppliers of the employer. After the three-year period, the Employees remained at the company at-will with some modifications to their jobs compared to the employment agreements. The Employees stayed with the Employer for one year before leaving to work for a competitor, and the Employer filed suit against the Employees and their new employer. The lower court found in favor of the Employees by finding that there was a lack of consideration for the non-solicitation considering there were material changes to the terms of the employment agreements when the Employees started working at-will.

The Superior Court reversed and held that there was adequate consideration and thus enforced the non-solicitation agreements in favor of the Employer. Under Pennsylvania law, there is adequate consideration when a restrictive covenant, such as a non-solicitation agreement, is signed at the beginning of an employment contract. Although the Employees argued that the non-solicitation agreement had expired when they changed to at-will status, this Court found that the explicit terms of the agreements contradicted this assertion. The non-solicitation agreements applied for the full term of the employment, regardless of whether it was under the contract or at-will. Moreover, the contract specifically stated that the non-solicitation provisions survived termination of the contract. The agreements also stated that consideration for the agreements was fulfilled by the payment of compensation and benefits to the Employees. Ultimately, the Superior Court found that the lower court erred and that the non-solicitation agreements were in effect when the Employees resigned and that the agreements were supported by consideration even though the employment agreements had expired, and the Employees were at-will.

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

Pennsylvania District Court Holds PMWA and FLSA Claims Analyzed Under the Same Basic Framework

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In Rummel v. Highmark, Inc., 2013 WL 6055082 (W.D. Pa.), Plaintiff, an employee at Defendant Highmark, Inc., alleged that Defendant failed to pay overtime wages in violation of the Pennsylvania Minimum Wage Act (“PMWA”) and the Fair Labor Standards Act (“FLSA”). Under both the PMWA and the FLSA, an employer is required to pay overtime to employees for hours worked over forty in a workweek. To state a claim under the FLSA, a plaintiff must allege that: “(1) the defendant was “engaged in commerce” as that phrase is defined by the FLSA; (2) the plaintiff was an ‘employee’ as defined by the FLSA; and (3) the plaintiff worked more than forty hours in a week but was not paid overtime compensation for the hours worked in excess of forty.”

The Court held that “because the PMWA parallels the FLSA in requiring employers to compensate employees for overtime hours worked and has identical standards of liability as the FLSA in overtime violation claims,” courts will analyze PMWA claims and FLSA claims under the same basic framework.

For more information, call our Philadelphia employment lawyers for Fair Labor Standards Act in Philadelphia and South Jersey at the Law Office of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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The District Court for the Middle District of Pennsylvania Holds Two-Year Statute of Limitations Applicable to Plaintiff’s FLSA Claim for Unpaid Overtime

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Plaintiff’s claims stemmed from unpaid overtime wages she allegedly was entitled to during her employment at Troy Construction (Troy) in 2013. Stone v. Troy Constr., LLC, No. 3:14cv306 2018 U.S. LEXIS 50232 (M.D. Pa. 2018). The critical question was whether a two-year or three-year statute of limitation would apply. The statute of limitations provides a set amount of time for the injured party to commence an action to recover damages for the alleged injury. The Fair Labor and Standards Act (FLSA) provides the plaintiff with two possible statute of limitations. The usual statute limitations for FLSA claims is two-years, but if the plaintiff sufficiently pleads a willful violation of the FLSA, the statute of limitation can be extended to three years. A plaintiff can sufficiently plead a willful violation if they provide facts and evidence to allow a factfinder to reasonably conclude that the employer “knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” The willful violation standard is not an easy standard to meet. Employers have found not to be acting willfully when they act reasonably in determining its legal obligation. For example, a court has found that an employer did not willfully violate the FLSA when, based on an incorrect interpretation of the FLSA, it instructed its employees not to fill out time cards for more than 40 hours.

In this matter, the Court determined that the plaintiff’s complaint did not offer facts to support her claim that Troy willfully violated the FLSA. Without sufficient facts to support her willful allegation, the two-year stature of limitations applied to Plaintiff’s claim. As the last cause of action that could give rise to a FLSA violation occurred outside of the two-year limitations period, the plaintiff’s FLSA claim was dismissed.

If you suspect that you have been wrongfully denied overtime pay, you may have a valid claim. Schedule a consultation with a Philadelphia overtime dispute lawyer at the Law Office of Sidkoff, Pincus & Green P.C. by calling 215-574-0600 to discuss your legal options or contact us online today.

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Eastern District of PA Prevents Credit Reporting Agencies from Venue Transfer

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On June 20, 2018 the Eastern District of Pennsylvania prevented a consumer credit reporting agency, Equifax, from transferring a case from Pennsylvania to Georgia. Edwards v. Equifax Info. Servs., LLC, No. CV 18-1077, 2018 WL 3046603, at *1 (E.D. Pa. June 20, 2018). Consumer credit reporting agencies gather consumers’ personal information about their credit history, credit worthiness, mode of living, and other personal characteristics which they then analyze and sell. Credit reporting agencies like Equifax gather this information independently and not at the request of the person whose credit is being reported on. Consumers must therefore react to the actions of credit agencies in this unilateral relationship. To properly maintain this unusual relationship Congress passed the Fair Credit Reporting Act (FCRA) to create a “national standard for regulating the relationship between credit reporting agencies and consumers.”

In this case the plaintiff brought a claim alleging that Equifax violated the FCRA by failing to provide contact information for entities that accessed his credit information. After the case was removed to the Eastern District Court, Equifax then sought to have the venue changed and moved to the Northern District of Georgia. Equifax is headquartered in Atlanta and claimed that “all documents, data, and witnesses pertinent to the claim are also located there” which made it a far more suitable location to litigate the dispute. The Court however rejected the change in venue due to the concern that any FCRA claim would force all plaintiffs to bring claims in districts far from where they live, “a burden that would inevitably undermine enforcement of federal consumer protection laws under the system of private litigation that Congress sought to incentivize.” The Court predicated their belief on the fact that in the e-commerce era credit reporting agencies operate nationwide and impact the lives of people hundreds or thousands of miles from the agencies’ headquarters and do so not at the behest of the person who is being reported on. After analyzing the procedural rules for changes in venue pursuant to the Federal Rules of Civil Procedure, the Court articulated that Congress has repeatedly amended the FCRA to promote private enforcement and to allow all credit agencies to force plaintiffs to litigate elsewhere would stop private enforcement. Further the balance of convenience strongly favored and required maintaining venue in the Eastern District of Pennsylvania where the plaintiff resides.

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

Third Circuit Affirms District Court in EMTALA Whistleblower Appeal

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On June 12, 2018 the United States Court of Appeals for the Third Circuit found that a fired nurse was not protected under the Emergency Treatment and Active Labor Act (“EMTALA”) whistleblower provision because she did not actually “report” a violation. Gillispie v. Regionalcare Hospital Partners, Inc., No.16-4307 (3rd Cir. 2018). The appellant in the case was the nurse on duty when a pregnant patient reported to the emergency room with complaints of vaginal bleeding and discomfort. After examining the distressed woman the hospital personnel discharged her to go directly to a gynecologist. The hospital did not transport the distressed woman nor were they able to contact the gynecologist to confirm she arrived. The hospital organized several conference calls and meetings to discuss whether the distressed woman’s discharge violated the EMTALA.

The EMTALA requires hospitals to first examine each patient to determine whether an emergency medical condition exits. If the examination reveals the patient is suffering from an emergency medical condition, the hospital usually must stabilize the patient before getting into the business of trying to discharge or transfer him or her elsewhere. A hospital that either (1) fails to properly screen a patient or (2) releases a patient without first stabilizing his or her emergency medical condition thereby violates EMTALA. Moreover, EMTALA’s whistleblower provision protects only employees who have “reported a violation” of one of the statutes provisions.

The appellant contends that during the meetings regarding the possible EMTALA violation, she insisted that the hospital report the circumstances surrounding the distressed woman’s discharge to the PA Department of Health or PA Patient Safety Authority. According to appellant, everyone in the meeting agreed that the hospital’s discharge failed to comply with EMTALA. Nevertheless, over the objections by appellant, no one at the hospital reported the discharge to any regulatory authority or agency.

The Court first pointed out that “in the absence of direct evidence of retaliation, courts have applied the McDonnell Douglas burden –shifting framework to whistleblower claims under EMTALA . . . Although [the Court] has not yet specifically decided if we should apply that framework to resolve EMTALA claims, we found that if a statute does not provide for a burden shifting scheme, McDonnell Douglas applies.” Therefore, the court set forth that the McDonnell Douglas burden shifting scheme will be utilized when analyzing EMTALA claims. Accordingly, Appellant had the burden to establish that (1) she engaged in conduct that is protected by EMTALA (2) her employer subsequently took an adverse employment action against her and (3) the employer did so because she engaged in protected activity.

The Court found that Appellant had not established a prima facie case because she had not “made a report” as that term is considered under EMTALA. Report was defined as “something that gives information” or “a notification”. The Court said that “it is clear that [Appellant] failed to establish that she actually provided any information of an alleged EMTALA violation to anyone”. Rather, Appellants own deposition shows that her efforts occurred after the CEO of the hospital and other attendees concluded the discharge was a violation. That testimony was “fatal” to her attempt to claim protection under the whistleblower provision because she did not “make a report” under EMTALA.

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

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Third Circuit Adopts McCarthy Test for Distributor-Manufacturer Trademark Disputes

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On April 18, 2017, the Third Circuit held that the McCarthy Test should be applied in trademark disputes between distributors and manufacturers when there is no written contract. Covertech Fabricating, Inc. v. TVM Bldg. Prod., Inc., 855 F.3d 163 (3d Cir. 2017). Plaintiff Covertech Fabricating, Inc., headquartered in Canada, manufactures protective packaging and reflective insulation. In 1998, Plaintiff entered into an informal agreement with Defendant TVM Building Products, Inc. which designated Defendant as the exclusive marketer and distributor of Plaintiff’s rFOIL insulation products in the United States. After disputes regarding payment and Defendant’s purchase of competitor insulation products, Plaintiff terminated its informal agreement with Defendant and trademarked the rFOIL product in Canada. In response, Defendant petitioned to register rFOIL as a trademark in the United States. Plaintiff sued Defendant to assert its ownership over the trademark. The lower court granted Plaintiff’s claims. The Third Circuit affirmed the decision but found that the lower court’s use of the first use test was legal error.

The Third Circuit held that the McCarthy Test should be applied in distributor-manufacturer disputes rather than the First Use Test due to the unique attributes of a relationship between an exclusive and noncompetitive distributor and manufacturer. The First Use Test is generally appropriate for unregistered trademark disputes as it favors the entity that used the trademark first thus rewarding the party with actual and continuous use of the mark. The Third Circuit held that the McCarthy test is more appropriate under these circumstances because it would unjustly benefit the distributor in the majority of cases simply due to the distributor making the first sale of the goods solely at the manufacturer’s request. The McCarthy tests states that “the manufacturer is the presumptive trademark owner unless the distributor rebuts that presumption using a multi-factor balancing test.” The factors of the balancing test are:

(1) which party invented or created the mark”; (2) which party first affixed the mark to goods sold; (3) which party’s name appeared on packaging and promotional materials in conjunction with the mark; (4) which party exercised control over the nature and quality of goods on which the mark appeared; (5) to which party did customers look as standing behind the goods, e.g., which party received complaints for defects and made appropriate replacement or refund; and (6) which party paid for advertising and promotion of the trademarked product.

The Third Circuit ruled that Plaintiff was the proper owner of the trademark given a balancing of the McCarthy factors. Even though the balancing clearly favored Plaintiff in this case, the Court asserted that ownership generally goes to the manufacturer if the factors are equal given the presumption of ownership for the manufacturer. The Court also dismissed Defendant’s challenges regarding Plaintiff’s successful fraud and acquiescence claims.

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

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Third Circuit Affirms District Court Ruling Poor Performance is Not Severe Enough to Circumvent Right-to-Cure Provision in Employment Contract

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In Milton Reg’l Sewer Auth. v. Travelers Cas. & Sur. Co. of Am., 648 Fed.Appx. 215 (3rd Cir. 2016) the Third Circuit Court of Appeals found that Pennsylvania contract law requires a more severe breach before contracting parties may violate a right-to-cure provision in a contract. Appellant Milton Regional Sewer Authority (“Milton”), a municipal authority, entered into a contract with Appellee Travelers Casualty and Surety Company of America (“Travelers”), a construction company, for a public works project. The contract contained a right-to-cure provision that states “[Travelers’] services will not be terminated if [Travelers] begins within seven days of receipt of notice of intent to terminate to correct its failure to perform and proceeds diligently to cure such failure within no more than 30 days of receipt of said notice.” In other words, before Milton could terminate the contract, it was required to give Travelers 30 days to fix whatever problem had arisen.

After the contract was finalized, Travelers began working on the project. Milton quickly became unsatisfied with the work being done and proceeded to send a letter to Travelers ordering it to suspend work. Travelers offered to correct the work in their response but Milton rejected and terminated the contract without giving Travelers an opportunity to fix its allegedly defective work. Following the termination of the contract, Milton hired another construction company to complete the project. Milton filed a complaint for additional costs incurred as a result of the termination.

The Court of Appeals for the Third Circuit began their analysis by stating “Pennsylvania follows the general rule of contract law that ‘a material breach of a contract relieves the non-breaching party from any continuing duty of performance thereunder.’” Such a contract may only be terminated without providing an opportunity to cure when there is a material breach of the contract so serious it goes directly to the heart and essence of the contract, rendering the breach incurable. The breach must be so severe that requiring notice before termination would be a useless gesture. The Court said a “typical example of a breach that goes directly to the essence of a contract is fraud.” Milton in this case alleged various deficiencies in the work performed by Travelers which, taken together, amount to an allegation that Travelers performed poorly. The Court found that “unlike fraud, poor performance is not incurable” and Travelers was eager to cure its deficiencies if given the chance. Lastly, the Court points out that “Pennsylvania contract law, therefore, requires a more severe breach before contracting parties may violate right to cure provisions.” Thus, Milton’s conduct in terminating Travelers amounted to wrongful termination and an ineffective exercise of contract rights.

At the Law Offices of Sidkoff, Pincus & Green P.C. our experienced Pennsylvania and New Jersey attorneys handle many types of legal matters, including contract law. If you are interested in having a consultation with one of our attorneys, please call us at 215-574-0600 or contact us online.

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PA Court Maintains Limited “Coming and Going” Rule in Workers Compensation Claims

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On May 17, 2018 the Commonwealth Court of Pennsylvania declined to extend the “coming and going” rule to cover an electrical worker who sustained substantial injuries in a car accident while driving from home to a job site, despite sporadically receiving compensation for travel expenses. Kush v. Workers’ Comp. Appeal Bd. (Power Contracting Co.), No. 1688 C.D. 2017, 2018 WL 2246523, at *1 (Pa. Commw. Ct. May 17, 2018). The Claimant was employed by two separate corporations doing electrical work, and routinely traveled to different jobs for both employers on the same day. The truck Claimant drove was owned by one of his employer’s, Vantage, but the present claim was against the other employer Power Contracting Company (PCC). Claimant had been working almost exclusively on the same PCC job site for the month preceding the accident.

Claimant sought compensation for medical expenses from PCC for injuries suffered while driving to the same job site after he lost control when driving over an ice patch. The Workers’ Compensation Judge dismissed his claims on the grounds that the “coming and going” rule did not apply to Claimant as he was commuting to a fixed job location. The “coming and going” rule states that injuries sustained by an employee while traveling to and from their place of employment are outside the scope of employment and are generally not compensable. On appeal, Claimant argued that he fell under two exceptions to the “coming and going” rule: he had no fixed place of employment, and his employment agreement included time spent for transportation to and/or from work. On appeal both arguments were rejected by the Court.

The Court emphasized that exceptions for the “coming and going” rule have been narrowly construed and have been fact specific holdings. The Court said that while Claimant may have traveled to different job sites for PCC, for the weeks preceding the accident he had been working at the same site and he anticipated only working at the one site on the day of the accident. The court then found that travel was not included in Claimant’s contract with PCC as his other employer, Vantage, actually owned and provided the truck. PCC did not own or control the Claimant’s means of commute, and while PCC would pay for the gas used to travel to its sites, his wages did not include pay for travel. He was only paid for time spent traveling to pick up equipment for the job by PCC if the pick-up took place on the way to the job. Claimant was not paid for time spent driving home at the end of the day and there were no provisions in his contract covering travel. The Court affirmed the Workers’ Compensation Board’s finding and dismissed Claimant’s petition.

he experienced Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. are available to answer questions about your case. To learn more about how we can help, call us today at 215-574-0600 or contact us online. Our offices are centrally located in Philadelphia, and we serve clients throughout Pennsylvania and New Jersey.

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