Eastern District of Pennsylvania Rules Against Plaintiff’s Tortious Interference in Prospective Contractual Relation Claim

By ,

SPG

In UniStrip Technologies, LLC v. LifeScan, Inc. and LifeScan Scotland, Ltd. the Eastern District of Pennsylvania determined that Plaintiff had not met its burden of proof for its claim of tortious interference with prospective contractual relation. 153 F.Supp.3d 728 (E.D. Pa. 2015). The necessary elements of a cause of action for tortious interference with prospective contractual relations are as follows: (1) The existence of a prospective between the complainant and a third party; (2) purposeful action on the part of the defendant to harm the existing relation, or to prevent a prospective relation from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual damage as a result of defendant’s conduct.

The Court found that UniStrip failed to establish the first prong of this four-factor test. The first requirement of there being a prospective contractual relationship can be satisfied by demonstration of “something more than mere hope” that a contract will be formed. UniStrip was unable to convince the Court that there was a reasonable probability that a contract would arise.  UniStrip’s claim rested on the argument that it would have engaged in contractual relations with numerous buyers but for LifeScan’s contracts with them threatening to revoke rebates and discounts if they purchased UniStrip products. UniStrip argued that LifeScan’s conduct was without any business justification and caused significant financial harm by discouraging potential buyers from doing business with UniStrip. The Court held that UniStrip could not identify a “specific business relationships suffering as a result of defendant’s interference” and thus dismissed UniStrip’s claim.

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

  Category: Business Law
  Comments: Comments Off on Eastern District of Pennsylvania Rules Against Plaintiff’s Tortious Interference in Prospective Contractual Relation Claim
  Other posts by

Third Circuit Splits from Other Circuit Courts in Age Discrimination Suit

By ,

SPG

On January 10, 2017, the Third Circuit ruled in favor of a group of fired employees (“Employees”) over age 50 in an age discrimination suit under the Age Discrimination in Employment Act (“ADEA”).  Karlo v. Pittsburgh Glass Works, LLC, 849 F.3d 61 (3d Cir. 2017). The Employees sued Pittsburgh Glass Works LLC (“Employer”) claiming that a layoff of 100 workers disproportionately affected employees who were 50 and over. The lower court refused to allow evidence from Employees relating to the disparate impact of a subgroup of those 50 and over because it did not establish any discriminatory effect on the entire class of workers, those 40 and over, and thus was counterproductive to a claim under the ADEA. The Third Circuit reversed the lower court’s ruling and found in favor of Employees thus splitting from other circuit courts, which have found that disparate treatment of employees within the protected class is not a viable claim under the ADEA.

The Third Circuit reversed the lower court’s decision because it viewed the practical implications of the case differently, and, more importantly, it had a different interpretation of the text of the ADEA. First, the Court interpreted the ADEA as prohibiting discrimination based on an employee’s age, not on the employee being a member of the protected class of people aged 40 or older. This finding is contrary to the other circuit courts which focused on the ADEA’s protection of a protected class of people aged 40 or older, not the protection of variably aged individuals within that protected class. Second, the Third Circuit found that preventing the protection of individuals within the protected class merely due to policy reasons, such as employer liability, is equivalent to trying to amend the ADEA. Further, the Court asserted that its opinion reflects the desires of Congress as clearly stated in the text of the ADEA to protect those aged 40 and older from age discrimination by employers.

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

Third Circuit Holds Computer Manufacturer Could Not Pierce Corporate Veil of Insolvent Corporate Buyer

By ,

SPG

In Clientron Corp. v. Devon IT, Inc., 2018 WL 3293212 (3rd Cir. 2018), the Third Circuit Court of Appeals found that Appellant failed to establish under Pennsylvania law that shareholders were alter ego of Appellee and thus Appellant was not entitled to pierce Appellee’s corporate veil as reparations for a business tort. In addition, the Court held that the corporate veil could not be pierced as a discovery sanction against one shareholder to hold him personally liable for part of the judgment.

Appellant, a computer component manufacturer brought action against an insolvent Pennsylvania corporation seeking to enforce a $6.5 million arbitration award obtained in Taiwan pursuant to the Pennsylvania Uniform Foreign Money Judgment Recognition Act (“UFMJRA”). The District Court for the Eastern District of Pennsylvania declined to pierce the corporate veil to hold shareholders jointly liable thereby erasing the $6.5 million award obtained by manufacturer. The manufacturer appealed.

Although Pennsylvania law recognizes a strong presumption against piercing the corporate veil, factors weighing in favor include: “failure to observe corporate formalities, non-payment of dividends, insolvency of the debtor corporation at the time, siphoning of funds of the corporation by the dominant shareholder, non-functioning of other officers or directors, absence of corporate records, and the fact that the corporation is merely a façade for the operations of the dominant stockholder or stockholders.”

Appellant attempted to show that shareholders use of credit cards for personal use, loans from Appellee to individual shareholders, and money transfers to personal accounts of shareholders’ other companies amounted to a lack of adhering to corporate formalities. The Court found, however, that the evidence was insufficient because “lack of formalities in a closely-held corporation does not often have as much consequence as where other corporations are involved”. Therefore, the Court held that Appellants evidence was insufficient to overcome Pennsylvania’s strong presumption against piercing the corporate veil.

The Philadelphia business lawyers at The Law Offices of Sidkoff, Pincus & Green represent clients is all areas of business law. Contact us online or call us at 215-574-0600.

PA Court Denies Unemployment Compensation for Claimant who Engaged in Disqualifying Willful Misconduct

By ,

SPG

On July 12, 2018 the Commonwealth Court of Pennsylvania affirmed a decision by the Unemployment Compensation Board of Review (“Board”) denying benefits to a claimant who had been terminated from his job after engaging in hostile, abusive, and violent conduct towards a co-worker. Allen v. Unemployment Comp. Bd. of Review, No. 1460 C.D. 2017, 2018 WL 3383382, at *1 (Pa. Commw. Ct. July 12, 2018). Claimant had been terminated from his position as a quality control technician after he proceeded to instigate a confrontation with a supervisor, attempted to induce the supervisor into a physical altercation while mentioning a weapon, followed his supervisor in his vehicle, and directed highly derogatory and offensive language at his supervisor. The supervisor, who also used derogatory language toward Claimant, repeatedly sought to avoid a physical confrontation with Claimant. When the supervisor reported the incident to the human resources office of their employer, Claimant attending a meeting wherein he provided his account of the incident and was subsequently terminated. The supervisor was not terminated by the employer.

Claimant appealed from the denial of benefits by the Board arguing that his employer did not treat both parties uniformly and did not fairly investigate the incident. Disparate treatment of employees by an employer is an affirmative defense by which an employee may still be eligible for unemployment benefits. The Court found that there was substantial evidence in the form of voicemails and text messages from Claimant to his supervisor demonstrating hostility and attempts to engage in violent and threatening conduct. Further the Court affirmed the discretionary ability of the Board to identify the credibility of the accounts by the parties involved in an incident. The Court held that the employer did in fact treat both Claimant and supervisor equally in spite of the supervisor not being terminated. Although both parties engaged in abusive language towards one another, the Court found that the Board did not err in finding Claimant’s conduct threatening and indicative of an attempt to engage in physical violence. Precedent in Pennsylvania has established that simply because one party has been terminated for willful misconduct while other involved parties have not been terminated for the same or similar misconduct is not sufficient to establish disparate treatment. Therefore, Claimant’s conduct was found to have been willful misconduct which disqualified him from being eligible for unemployment compensation benefits.

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

  Category: Employment Law
  Comments: Comments Off on PA Court Denies Unemployment Compensation for Claimant who Engaged in Disqualifying Willful Misconduct
  Other posts by

Supreme Court of Pennsylvania Severs Flat Deduction from the Pennsylvania Revenue Code

By ,

SPG

In Nextel Commc’n of the Mid-Atl. Inc. v. Commonwealth, 171 A.3d 682 (Pa. 2017), the Supreme Court of Pennsylvania held that the Net-Loss-Carryover Provision (“NLC”) in the revenue code was prohibited as applied to corporate taxpayer by the Uniformity Clause but severing the $3 million dollar flat dedication from the provision was the appropriate consequence. In 2007, when the case began, the Pennsylvania Revenue Code provided that “a corporation could carry over losses as deductions equal to the greater of 12.5% of the corporations taxable income or $3 million. As a result, a business that had a net income less than $3 million was paying no corporate income tax while larger businesses were paying hefty corporate income taxes. Because the NLC was structured to assess a corporation’s tax liability on the basis of the value of a corporation’s taxable income, in operation, the NLC enabled the majority of corporations with taxable income (98.8% of eligible companies) to avoid paying any taxes at all in 2007.

The Court determined that the NLC was unconstitutional as written because of its inclusion of the $3 million flat deduction, the Court saw three available options: “(1) sever the flat $3 million deduction from the remainder of the NLC; (2) sever both the $3 million and 12.5% deduction caps and allow corporations to claim an unlimited net loss—the remedy chosen by the Commonwealth Court majority; or (3) strike down the entire NLC and, thus, disallow any net loss carryover.” Out of the three options available, the Court determined that severing the $3 million flat deduction from the NLC was the best option. Therefore, small corporations will not be able to deduct carried-forward operating losses from their taxable income.

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

  Category: Business Law
  Comments: Comments Off on Supreme Court of Pennsylvania Severs Flat Deduction from the Pennsylvania Revenue Code
  Other posts by

Eastern District of PA Reinforces Elements of Racial Discrimination Claim against Employer

By ,

SPG

The Eastern District of Pennsylvania maintained and emphasized the requisite elements to sustain a claim for racial discrimination by an employee against their former employer. Jordan v. Staffing Plus, Inc., No. CV 17-4020, 2018 WL 3046612, at *1 (E.D. Pa. June 20, 2018). Plaintiff Dominique Jordan (“Jordan”) brought a claim for racial discrimination under 42 U.S.C. § 1981 after he was terminated by his former employer Staffing Plus, Inc. At some point while still an employee of Staffing Plus, Jordan was arrested and faced charges that were later dropped. However after being arrested, several local news media outlets began reporting on the arrest. Jordan alleged that Staffing Plus made no investigation into the veracity of the allegations and proceeded to terminate his employment based on the news coverage. In his statement, Jordan claimed that he would not have been fired under similar circumstances if he were “pale skinned or Caucasi[a]n” and was terminated because he was “black.”

Staffing Plus filed a Motion for Summary Judgment. To sustain a claim for racial discrimination a party must plead facts to support the elements that (1) the plaintiff is a member of a racial minority (2) there was intent to discriminate on the basis of race by the defendant and (3) discrimination concerning one or more of the activities enumerated in the statute, which includes the right to make and enforce contracts. The Court granted Staffing Plus’s Motion for Summary Judgment because Jordan alleged no facts to support the second and third elements of a racial discrimination claim. The Court pointed to the complete lack of factual allegations regarding any pattern of racial derogatory statements or discriminatory comments made by Staffing Plus. Jordan did not allege that any other contractors of different races were treated more favorably after being arrested or being subjected to negative media coverage. The Court found that Jordan relied “solely on his own bare assertions” and courts have consistently held that “such bare assertions of subjective belief are insufficient to establish an inference of discrimination.” In civil rights cases a court is required to give a party an opportunity to amend their claim after dismissal, but because Plaintiff’s claim had already been dismissed and amended, the Court did not grant further leave to amend.

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

  Category: Discrimination, Employment Law
  Comments: Comments Off on Eastern District of PA Reinforces Elements of Racial Discrimination Claim against Employer
  Other posts by

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

By ,

SPG

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.

  Category: Business Law
  Comments: Comments Off on Pennsylvania Superior Court Rules Plaintiff Failed to Prove Special Harm Resulting From Defamatory Publication.
  Other posts by

Third Circuit Affirms Enforcement of Employer-Employee Arbitration Agreement

By ,

SPG

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.

  Category: Business Law
  Comments: Comments Off on Third Circuit Affirms Enforcement of Employer-Employee Arbitration Agreement
  Other posts by

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

By ,

SPG

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

By ,

SPG

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.

  Category: FLSA
  Comments: Comments Off on Pennsylvania District Court Holds PMWA and FLSA Claims Analyzed Under the Same Basic Framework
  Other posts by