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

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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.

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

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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.

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

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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.

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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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