Whistleblower Protection for Employees under the Solid Waste Disposal Act

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1. Employees and Employers Covered

 The purpose of the Solid Waste Disposal Act (SWDA) is to safeguard the health, welfare, and physical property of people and to protect the environment by controlling the management of solid waste. As determined by the draftors of this Act, it is in the public interest to require hazardous waste to be stored, processed, and disposed of only at permitted hazardous industrial solid waste facilities. The SWDA protects employees from retaliation for reporting abuses of funding and assistance, violations of waste management requirements, or other violations of the Act.

This Act covers employees of agencies, Federal or State, with the authority and responsibility for planning or administration of solid wastes. Whistleblower protection is not offered to any employee, who acting without discretion from his employer deliberately violates any requirement of this chapter.

2. Protected Activities

Pursuant to the SWDA, no person shall fire or discriminate against any employee or authorized representative of employee due to the employee’s actions in providing information to the state or federal government regarding violations of environmental laws, or assisting in proceedings regarding the administration or enforcement of the provisions of this chapter.

3. Proving Your Case

A successful complainant must prove the following by a preponderance of the evidence:

1. The employee engaged in protected activity;

2. The employer knew of the employee’s reporting/protected activity;

3. The employer subjected the employee to unfavorable personnel action; and

4. The employee’s protected activity was a “contributing factor” to the employer’s decision to take unfavorable personnel action against the employee. Complaints are made to the Department of Labor, through the Occupational Safety and Health Administration (OSHA), and must be made within 30 days of the adverse employment action.

In order to avoid liability, the employer must demonstrate “clear and convincing evidence” that it would have taken the same unfavorable personnel action against the employee in the absence of the employee’s protected activity.

4. Available Remedies

If an employee’s whistleblower claim is successful, he or she may be entitled to reinstatement with previous seniority and benefits, back pay with interest, and other possible relief including attorneys’ feeds, compensatory and punitive damages.

5. Time to File: 30 days from alleged violation.

If you believe that you have a whistleblower claim under the SWDA, please contact an attorney at Sidkoff, Pincus & Green, located in Philadelphia, Pennsylvania. 

When Assent to a Contract is Obtained by Duress in Pennsylvania

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The formation of a valid contract requires the mutual assent of the contracting parties. Essner v. Shoemaker, 393 Pa. 422, 425, 143 A.2d 364, 366 (1958) (citation omitted). Mutual assent to a contract does not exist, however, when one of the contracting parties elicits the assent of the other contracting party by means of duress. Carrier v. William Penn Broadcasting Co., 426 Pa. 427, 431, 233 A.2d at 521 (1967). A contract obtained under duress is voidable but continues in operative effect until the injured party acts in opposition to the contract. Loizos v. Mutual of Omaha Ins. Co., 229 Pa. Super. 552, 326 A.2d 515 (1974) (citing Restatement of Contracts, s 495:”Where the duress of one party induces another to enter into a transaction, The nature of which he knows or has reason to know, and which he was under no duty to enter into, the transaction is voidable against the former and all who stand in no better position…”).

Duress has been defined as: [T]hat degree of restraint or danger, either actually inflicted or threatened and impending, which is sufficient in severity or apprehension to overcome the mind of a person of ordinary firmness…. The quality of firmness is assumed to exist in every person competent to contract, unless it appears that by reason of old age or other sufficient cause he is weak or infirm…. Where persons deal with each other on equal terms and at arm’s length, there is a presumption that the person alleging duress possesses ordinary firmness…. Moreover, in the absence of threats of actual bodily harm there can be no duress where the contracting party is free to consult with counsel….Carrier, 426 Pa. at 431 (citing Smith v. Lenchner, 204 Pa.Super. 500, 504, 205 A.2d 626, 628 (1964)). A party who has reasonable opportunity to consult with counsel before entering a contract cannot later invalidate it by claiming duress. Adams v. Adams, 2004 PA Super 130, 848 A.2d 991 (2004).

A Note on Mental Capacity and Assent

A signed document will give rise to the presumption that it accurately expresses the state of mind of the signing party. Shafer v. State Employes’ Retirement Bd., 548 Pa. 320, 696 A.2d 1186, 119 Ed. Law Rep. 1097 (1997); Estate of McGovern v. Com. State Employees’ Retirement Board, 512 Pa. 377, 517 A.2d 523 (1986), citing O’Farrell v. Steel City Piping Co., 266 Pa. Super. 219, 403 A.2d 1319 (1978); Forman v. Public School Employes’ Retirement Bd., 778 A.2d 778, 156 Ed. Law Rep. 650 (Pa. Commw. Ct. 2001). However, this presumption is rebutted where the challenger presents clear and convincing evidence of mental incompetence, and mental incompetence is established through evidence that the person was unable to understand the nature and consequences of the transaction at the very time he or she executed the instrument in question. Weir by Gasper v. Estate of Ciao, 521 Pa. 491, 556 A.2d 819 (1989); Estate of McGovern v. Com. State Employees’ Retirement Board, 512 Pa. 377, 517 A.2d 523 (1986); Sobel v. Sobel, 435 Pa. 80, 254 A.2d 649 (1969).

Enforcing a Broken Promise (The Doctrine of Promissory Estoppel)

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The doctrine of promissory estoppel allows a party to enforce a promise even though that promise is not supported by consideration. Crouse v. Cyclops Industries, 560 Pa. 394, 402, 745 A.2d 606, 610 (2000). To establish promissory estoppel, the plaintiff must prove that: (1) the promisor made a promise that would reasonably be expected to induce action or forbearance on the part of the promisee; (2) the promisee actually took action or refrained from taking action in reliance on the promise; and (3) injustice can be avoided by enforcing the promise. Id. at 403, 745 A.2d at 610 (emphasis added).

Unlike equitable estoppel, which is wholly a defensive doctrine, promissory estoppel can sustain an action brought to remedy the injustice that results from a promise not kept. Detrimental reliance is another name for promissory estoppel. Rinehimer v. Luzerne County Community College, 372 Pa. Superior Ct. 480, 539 A.2d 1298 (1988). Promissory estoppel is an outgrowth of equitable estoppel but, unlike equitable estoppel, promissory estoppel may serve as an independent cause of action. Paul v. Lankenau Hospital, 375 Pa. Superior Ct. 1, 543 A.2d 1148 (1988). Pennsylvania has long recognized promissory estoppel as a vehicle by which a promise may be enforced in order to remedy an injustice. See Fried v. Fisher, 328 Pa. 497, 196 A. 39 (1938).

Recovery on the theory of promissory estoppel, is ordinarily limited to recovery of amounts lost and expended in reliance on the promise, in order to place the plaintiff in the position he would have occupied had the promise never been made. Banas v. Matthews Int’l Corp., 348 Pa.Super. 464, 486 n. 12, 502 A.2d 637, 648 n. 12 (1985); see also, Restatement (Second) of Contracts S § 90(1) (remedy under promissory estoppel may be “limited as justice requires”).

Unjust Enrichment Claims in Pennsylvania

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Under Pennsylvania law, “when a person receives a benefit from another, and it would be unconscionable for the recipient to retain that benefit, the doctrine of unjust enrichment requires the recipient to make restitution…. This equitable doctrine imposes on the recipient an obligation in the nature of quasi contract.” Myers-Macomber Engineers v. M.L.W. Construction Corp., 271 Pa.Super. 484, 414 A.2d 357 (1979). As a previous blog post demonstrated, the doctrine of promissory estoppel can sometimes be used to enforce a promise that induced justifiable reliance even where there is not consideration.  Similarly, the concept of unjust enrichment serves the purpose of allowing for the enforcement of obligations that may not qualify as contractual.  However, restitution for unjust enrichment is not predicated on a promise but on the restoration of an unfair gain.  The cause of action of unjust enrichment arises where one party has obtained a benefit at the expense of another under circumstances that make it unfair for the recipient to retain the benefit without paying for it.

In Pennsylvania, where unjust enrichment is found, the law implies a contract, which requires the defendant to pay to the plaintiff the value of the benefit conferred. Schenck v. K.E. David, Ltd., 446 Pa.Super. 94, 666 A.2d 327 (1995). The elements necessary to prove unjust enrichment are:(1) benefits conferred on defendant by plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. Id.

The application of the doctrine of unjust enrichment depends on the particular factual circumstances of the case at issue. In determining if the doctrine applies, the court’s focus is not on the intention of the parties, but rather on whether the defendant has been unjustly enriched. Id., 666 A.2d at 328. Accord Torchia v. Torchia, 346 Pa.Super. 229, 499 A.2d 581, 582 (1985) (“[t]o sustain a claim of unjust enrichment, a claimant must show that the party against whom recovery is sought either ‘wrongfully secured or passively received a benefit that it would be unconscionable for her to retain.’ ”)

A Right to Cure Provision is not Bulletproof in Pennsylvania

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It is well established by the courts in Pennsylvania that a material breach of a contract relieves the non-breaching party from any continuing duty of performance thereunder. Berkowitz v. Mayflower Securities, 455 Pa. 531, 534–535, 317 A.2d 584, 586 (1974) (citing 6 Williston, A Treatise on The Law of Contracts, § 8[64] (3d. ed.1962)).  It is equally well established, that “[a] party also may not insist upon performance of the contract when he himself is guilty of a material breach of the contract.” Ott v. Buehler Lumber, 373 Pa.Super. 515, 541 A.2d 1143, 1145 (1988) (citing 17 Am.Jur.2d Contracts § 425; Murray, Contracts § 215 (2d. Rev Ed.1974)).  However, until the state Supreme Court handed down its decision in LJL Transp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 560, 962 A.2d 639, 648 (2009), there was not a clear rule as to how the courts should treat the following issue:  whether a party’s conduct in breaching a contract may justify its immediate termination, even if the contract includes an express provision granting the breaching party the opportunity to cure before the contract is terminated?

In LJL Transp., Inc, the appellants-the franchisee and its owners-argued that the terms of the agreement in issue gave the franchisee an unqualified right to cure a breach, pursuant to paragraph 23(c) of the contract in issue which provided a right to cure within 90 days of notice.  LJL Transp., 962 A.2d at 643. The franchisor, Pilot Air Freight Corp. (“Pilot”), argued that the cure provisions were not the exclusive means by which the agreement could be terminated and that the parties intended cumulative remedies. Pilot pointed to the provisions in paragraph 30 of the agreement which provided that “its electionto exercise any remedy available by law or contract shall not be deemed a waiver of nor preclude exercise of any other remedy. Id. at 647.  Therefore, the franchisor argued that when the two paragraphs of the franchise agreement were considered together, the cure provisions of paragraph 23(c) were merely a cumulative remedy and not an exclusive one.

The Court in LJL Transport looked to other jurisdictions, which appeared to be in accord that, unless the termination provisions of a franchise agreement are, by their terms, exclusive, a termination clause affording the right to notice and cure is, as Pilot suggested, merely a cumulative remedy which does not bar the non-breaching party from exercising other remedies available to it in the event of a breach by the other party going directly to the heart of the contract, and destroying the fundamental trust upon which the contractual relationship is built.  Furthermore, the Court in LJL Transport also recognized that courts in other jurisdictions have likewise concluded that, in the event of an incurable breach, the non-breaching party may immediately terminate the agreement without following its notice and cure provisions. Id. at 650-51 (citing Southland v. Mir, 748 F.Supp. 969 (E.D.N.Y.1990); In re Best Film and Video, 46 B.R. 861 (Bkrtcy.E.D.N.Y.1985); L.K. Comstock v. United Engineers, 880 F.2d 219 (9th. Cir.1989).

Consequently, with the law in other jurisdictions as a guide, the Pennsylvania Supreme Court held that when there is a breach of contract “going directly to the essence of the contract, which is so exceedingly grave as to irreparably damage the trust between the contracting parties, the non-breaching party may terminate the contract without notice, absent explicit contractual provisions to the contrary”. Id. at 652.

Philadelphia Business Lawyers: The Implied Covenant of Good Faith and Fair Dealing in Pennsylvania

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Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement. Restatement (Second) of Contracts § 205 (1985).  In Pennsylvania, the law is clear that “[i]n the absence of an express provision, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made and to refrain from doing anything that would destroy or injure the other party’s right to receive the fruits of the contract. Accordingly, a promise to do an act necessary to carry out the contract must be implied.” Daniel B. Van Campen Corp. v. Building & Construction Trades Council, 195 A.2d 134, 136-137 (Pa. Super. Ct. 1963).

The covenant of good faith and fair dealing, although implied in every contract, is used to interpret the contract and generally does not give rise to a separate cause of action, either in tort or contract. Therefore, an implied duty of good faith will be read into the performance of every agreement so that the court may evaluate whether the terms of an agreement have been breached.  However, if the court determines there was a breach, the consequence will be breach of contract rather than an independent breach of a duty of good faith and fair dealing.

Furthermore, Pennsylvania law does not recognize a claim for breach of covenant of good faith and fair dealing as an independent cause of action separate from the breach of contract claim since the actions forming the basis of the breach of contract claim are essentially the same as the actions forming the basis of the bad faith claim.  McHale v. NuEnergy Group, No. 01-4111, 2002 U.S. Dist. LEXIS 3307, at *23 (E.D.Pa. Feb. 27, 2002). For that reason, a claim based on breach of the covenant of good faith and fair dealing, when embedded within a complaint that also alleges breach of contract, will be regarded by the courts as nothing more than a carbon copy of the breach of contract claim.

A Provision in an Employee Handbook May Supplant the At-Will Rule in Pennsylvania

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A claim for wrongful discharge in Pennsylvania may only be asserted in very limited circumstances. An at-will employee who is terminated may claim wrongful discharge only when his termination is made with a specific intent to harm or is contrary to public policy. Tourville v. Inter–Ocean Ins. Co., 353 Pa.Super. 53, 55, 508 A.2d 1263, 1265 (1986); Engstrom v. John Nuveen and Company, 668 F.Supp. 953, 958 (E.D.Pa.1987); Geary v. U.S. Steel Corp., 456 Pa. 171, 178–83, 319 A.2d 174, 177–80 (1974).

In Pennsylvania, there is a very strong presumption of at-will employment relationships. The presumption may be overcome by express contract, implied in-fact contract (where the surrounding circumstances of the hiring indicate that the parties did not intend to be at-will), and additional consideration passing from the employer (if the employee bestows a legally sufficient benefit or incurs a sufficient detriment for the benefit of the employer beyond the services for which he was hired, a court may infer that the parties intended to overcome the at-will presumption).Scott v. Extracorporeal, Inc., 376 Pa.Super. 90, 95, 545 A.2d 334, 336 (1988).

Notwithstanding the level of proof required to supplant the at-will presumption, “[a] handbook is enforceable against an employer if a reasonable person in the employee’s position would interpret its provisions as evidencing the employer’s intent to supplant the at-will rule.” Scott v. Extracorporeal, Inc., supra, 376 Pa.Super. at 97, 545 A.2d at 337; DiBonaventura v. Consolidated Rail Corp., 372 Pa.Super. 420, 426, 539 A.2d 865, 868 (1988); Reilly v. Stroehmann Bros. Co., 367 Pa.Super. 411, 419–20, 532 A.2d 1212, 1215–16 (1987). In all of these cases the courts looked to the language of the handbook to determine whether a reasonable employee would understand the provisions to transform his at-will employment into a contractual employment relationship. “A handbook, to be construed as a contract, must contain unequivocal provisions that the employer intended to be bound by it and, in fact, renounced the principle of at-will employment.” Id. at 416, 532 A.2d at 1214.

It is important to keep in mind that there is no presumption that the distribution of a handbook by an employer shows that the employer intends to alter the existing employer-employee relationship.  Mudd v. Hoffman Homes for Youth, Inc., 374 Pa. Super. 522, 543 A.2d 1092 (1988); Martin v. Capital Cities Media, Inc., 354 Pa. Super. 199, 511 A.2d 830 (1986).  As shown above, however, an employee may reasonably regard a handbook as legally binding when the handbook, or an employer’s oral representation about the handbook, unequivocally states that it is to have this effect.

The First Sale Doctrine

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Copyright law provides copyright owners several exclusive rights, including the right to distribute copies of their works. See, 17 U.S.C. §106 (2006) (granting copyright owners the exclusive rights to reproduce their works, prepare derivative works, distribute copies, to perform their works publicly, and to display the copyrighted works publicly). However, a copyright owner’s exclusive right to distribution is limited by a provision that authorizes the owner of a particular copy of a work to sell or otherwise dispose of that copy without having to seek the permission of the copyright owner. 17 U.S.C. § 109(a).  In other words, a copyright holder who sells or gives away a copy of his or her work no longer retains an exclusive right over that particular copy.  The new owner of that copy can then sell it, donate it, rent it or otherwise dispose of it, with certain exceptions for leasing/renting related to software and phonorecords. See, 17 U.S.C. § 109(b).

The statutory provision at hand, Section 109 of the Copyright Act, is a codification of the “first sale doctrine” and an extension of the principle stated in 17 U.S.C.A. § 202 that ownership of the material object is distinct from ownership of the copyright in the material. Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984). The “first sale doctrine,” which was developed under prior law, provided that the copyright owner’s exclusive right to distribute copies of the copyrighted work extended only to the first sale of that copy. Platt & Munk Co. v. Republic Graphics, Inc., 315 F.2d 847 (2d Cir. 1963); Independent News Co. v. Williams, 293 F.2d 510 (3d Cir. 1961); U.S. v. Powell, 701 F.2d 70 (8th Cir. 1983); U.S. v. Wise, 550 F.2d 1180 (9th Cir. 1977); C. M. Paula Co. v. Logan, 355 F. Supp. 189 (N.D. Tex. 1973). After the first sale of a copy, the copyright owner had no further control over future sales of that copy.

Although Section 109 of the Copyright Act has many clear benefits to the public, including the discounted secondary sales market for products (such as Ebay, Craigslist, yard sales and used book stores), the large shift towards digital consumption of works (via websites such as Itunes and Amazon’s digital store, and for products such as ipods, ipads, kindles and nooks) constrains the benefits of the first sale doctrine.  Since the Copyright Act does not allow consumers to purchase digital products, copy them, and resell them on the secondary market, the applicability of Section 109 to digital purchases would seem extremely limited, if not eliminated.  Accordingly, as consumers move from physical copies to digital works, many of the benefits of first sale doctrine will be lost

The Pennsylvania Commissioned Sales Representative Act

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The Pennsylvania Commissioned Sales Representative Act (“PCSRA”) provides that a “principal shall pay a sales representative all commissions due at the time of termination within 14 days after termination” and “all commissions that become due after termination within 14 days of the date such commissions become due.” 43 Pa. Stat. §§ 1473–74.  If a principal “willfully” violates these provisions, then the sales representative may bring a civil action to collect all unpaid commissions plus exemplary damages in an amount not to exceed two times the commissions due to the sales representative, and costs of suit and attorneys’ fees. Id. § 1475.

Under the PCSRA, a “principal” is defined as any person who does all of the following: (1) engages in the business of manufacturing, producing, importing or distributing a product for sale to customers who purchase such products for resale; (2) (2) Utilizes sales representatives to solicit orders for such product; and (3) Compensates sales representatives, in whole or in part, by commission. Id. § 1471.

Furthermore, the PCRA defines a “sales representative” as “[a] person who contracts with a principal to solicit wholesale orders from retailers rather than consumers and who is compensated, in whole or in part, by commission.” Id.   A sales representative, as that term is defined in the PCRA, explicitly excludes “one who places orders or purchases for his own account for resale or one who is an employee of a principal.” Id.

Although the PCRA is an important and beneficial statute for sales representatives, it is important to keep in mind that it does not provide protection to all sales agents who work on commission. Not only does the precise language of the PCRA limit its coverage to the types of sales representatives described above, but the courts have often strictly construed the terms “retailers” and “consumers” to further limit the applicability of the PCRA, despite the fact that those terms are not defined in the statute. See, Kamco Indus Sales Inc. v. Lovejoy Inc., 779 F. Supp. 2d 416 (E.D.Pa.2011); Total Control, Inc. v. Danaher Corp., No. 02–668, 2004 WL 1878238, *3 (E.D.Pa.2004); United Products Corp. v. Admiral Tool and Manufacturing Co., 122 F.Supp.2d 560, 564 (E.D.Pa.2000).

Philadelphia Business Lawyers: The Doctrine of Equitable Estoppel in Pennsylvania

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Equitable estoppel is thought of as a shield, not a sword.  It does not itself create a cause of action, but is used to prevent an unjust result and to preserve rights that are already acquired.  As defined by the courts in Pennsylvania, the doctrine of equitable estoppel applies when one person, by his or her acts, representations, or admissions or by his or her silence when he or she ought to speak out, intentionally or through culpable negligence induces another person to believe certain facts to exist and such other person rightfully relies and acts on such belief, so that he or she will be prejudiced if the former is permitted to deny the existence of such facts. Price v. Chevrolet Motor Div. of General Motors Corp., 2000 PA Super 410, 765 A.2d 800, 43 U.C.C. Rep. Serv. 2d 593 (2000); Zitelli v. Dermatology Educ. and Research Foundation, 534 Pa. 360, 633 A.2d 134, 87 Ed. Law Rep. 157 (1993).

The two essential elements of equitable estoppel are inducement and justifiable reliance on that inducement. The inducement may be words or conduct and the acts that are induced may be by commission or forbearance provided that a change in condition results causing disadvantage to the one induced. Novelty Knitting Mills, Inc. v. Siskind, 500 Pa. 432, 436, 457 A.2d 502, 503-04 (1983) (citing Funds for Business Growth, Inc. v. Woodland Marble and Tile Company, 443 Pa. 281, 278 A.2d 922 (1971); Ham v. Gouge, 214 Pa.Super. 423, 257 A.2d 650 (1969)).  There will be no equitable estoppel where the complainant’s act appears to be the result of his or her own will or judgment rather than the product of what the defendant did or represented.  Some courts view this issue – whether the complainant knew or should have known about the facts (duty of inquiry) – as the third element of equitable estoppel. Chester Extended Care Center v. Com., Dept. of Public Welfare, 526 Pa. 350, 586 A.2d 379 (1991); Appeal of Heim, 151 Pa. Commw. 438, 617 A.2d 74 (1992).

Generally stated, equitable estoppel applies to prevent a party from assuming a position or asserting a right to another’s disadvantage inconsistent with a position previously taken. The person inducing the belief in the existence of a certain state of facts is estopped to deny that the state of facts does in truth exist, over a different or contrary state of facts as existing at the same time, or deny or repudiate his acts, conduct or statements.  Novelty Knitting Mills, Inc. v. Siskind, 500 Pa. 432, 436, 457 A.2d 502, 503-04 (1983). (internal citations omitted).  The burden of proof rests on the party asserting the estoppel to establish such estoppel by clear, precise and unequivocal evidence. Id.