Category: Business Law

Department of Labor Announces Much Anticipated Proposal on Overtime Pay

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In early March, the Department of Labor (DOL) released a proposal that would make it possible for more workers to collect overtime pay. According to the proposal, employees who earn an annual salary of $35,000 would be able to collect time-and-a-half for the number of hours they worked beyond the 40-hour work week.

Currently, employees who make $24,000 per year are eligible for overtime, so this proposal would expand the number of employees who could collect overtime pay.

Threshold Adjustments

This latest proposal is an increase from the current threshold, which entitles employees who make an annual salary of $24,000 to collect overtime. However, it is not as high as the proposal made by the Obama administration, which would have allowed workers making $47,000 per year to collect overtime once they surpassed 40 hours in a week.

The DOL’s latest proposal would allow more workers to collect time-and-a-half for their overtime work. The proposal made by the Obama administration also included periodic increases of the salary threshold, which this latest proposal does not have. Rather, the DOL is looking for comments from the public about whether they should update the overtime requirements every four years.

The Obama administration threshold was blocked by a judge in 2017 and is still subject to an ongoing appeals process. The judge had made this decision saying that the DOL was focused too heavily on the amount of money workers make, rather than their jobs.

Potential Legal Challenges

The last time the salary threshold was increased was in 2004. While the DOL hopes to avoid litigation by using the same economic methodology that was used by the George W. Bush administration in 2004, this latest proposal is likely to face legal challenges. Businesses will likely voice their concerns over the impact the proposal will have on their ability to meet rising payroll costs. Worker advocates will argue that the proposal falls short when it comes to expanding overtime pay.

Other legal issues may arise in response to the DOL’s decision against varying the salary threshold based on cost of living differences in different regions across the country. Large businesses and worker groups, in particular, oppose this decision.

Other critics of the proposal say that fewer employees are eligible for time-and-a-half pay due to the delay in modifying the requirements for overtime pay. According to an Economic Policy Institute Senior Economist, millions of workers who should have received overtime protections under the 2016 rule will not be covered by this new rule.

In addition, many believe that the standards are outdated and do not reflect the realities of the 2019 workplace. However, a DOL official said that the general overtime methodology has been proven to work, and the DOL is confident that it is appropriate for the purpose of updating the salary threshold.

Philadelphia Wage and Hour Lawyers at Sidkoff, Pincus & Green P.C. Secure Overtime Pay for Eligible Workers

If you have been denied overtime wages, the Philadelphia wage and hour lawyers at Sidkoff, Pincus & Green P.C. will work to secure the full compensation you deserve. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. We will continue to fight for you until we have your complete satisfaction. Our offices are conveniently located in Philadelphia, where we serve clients throughout South Jersey, Pennsylvania and New Jersey.

Third Circuit Reverses NLRB’s Determination In Favor of Union Workers

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The Third Circuit Court of Appeals recently ruled that an employer’s threat and subsequent call to the police regarding union organizers on both public and company property did not violate 29 U.S.C. § 157 Section 8(a)(1). National Labor Relations Board v. ImageFirst Uniform Rental Service., No. 17-3680, 2018 WL 6614237 (3d Cir. December 18, 2018). The case arose from an incident in which ImageFirst, a health care laundry service provider, called the police on union members who were distributing pro-union literature on and near their Columbia, PA facility. The manager called the police and requested the union workers be removed from company property and a grassy area which abutted the road. The union ultimately filed a complaint and alleged that ImageFirst unlawfully interfered with union activities under 29 U.S.C. § 157 Section 8(a)(1). An administrative judge decided the trespassing was too insignificant to warrant a removal of the union members. The NLRB affirmed the decision.

In reversing, the Third Circuit Court found that substantial evidence did not support the finding by the NLRB that ImageFirst’s threat to call the police and the company’s call to the police were motivated solely by a desire to remove the union representatives from the public right-of-way. Rather, the Court concluded that “no reasonable fact finder could have failed to find that ImageFirst’s conduct was motivated by broader concerns over its property interests, implicated by the union representative’s repeated and ongoing forays onto its private property.” Therefore, the company’s concern was reasonable and the Court denied enforcement of the NLRB findings.

At the Law Offices of Sidkoff, Pincus & Green, our experienced Pennsylvania and New Jersey attorneys handle many types of legal matters. 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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Termination One Month After Requesting FMLA Leave Creates Sufficient Casual Link

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In Ha Long v. Spalding Auto. Inc., the Eastern District Court of Pennsylvania—ruling on a motion to dismiss—determined that the plaintiff may proceed on his FMLA retaliation claim against his former employer because there were sufficient facts to establish a prima facie case for FMLA retaliation. No. CV 17-4865, 2018 WL 6244755, at *4 (E.D. Pa. Nov. 29, 2018). In Ha Long, the plaintiff sued his former employer alleging employment discrimination and retaliation. Plaintiff began his employment with Defendant in 2013 and was diagnosed with thoracic disease and disc disease in September 2015. Throughout his employment, Plaintiff periodically needed to request time off and needed accommodations due to his health conditions. Later, in March 2016, Plaintiff requested FMLA leave to attend to his daughter’s needs, as she was undergoing surgery. Initially, the FMLA request was not approved; however, the employer approved the FMLA leave after Plaintiff contacted his union representative, who contacted the chief operating officer. Then in June 2016, Plaintiff again had to request FMLA leave due to the pain he was experiencing as a result of his medical condition. On July 1, 2016, Defendant approved this request, conditioned upon Plaintiff sending appropriate FMLA documents within fifteen (15) days. Plaintiff allegedly complied with this request, but on August 1, 2016, Defendant terminated Plaintiff claiming the documentation was never received and citing attendance issues.

In order to state a viable claim for FMLA retaliation, the plaintiff here must be able to show that: (1) he engaged in protected employee activity; (2) he suffered an adverse employment action; and (3) the adverse action was causally related to the protected activity. Based on the facts at hand, the Court found that the plaintiff has alleged sufficient facts in order to defeat a motion to dismiss his FMLA retaliation claim. The Court recognized that the one-month gap between plaintiff requesting FMLA leave and his subsequent termination created a reasonable link that they may be related.

The statutes, regulations, and case law that govern the employer-employee relationship are constantly evolving. If you have questions about a legal situation, contact the Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. today to schedule a confidential consultation. We can be reached at 215-574-0600 or by submitting a convenient online contact form.

Third Circuit Rules in Favor of Employer in Wrongful Termination Case

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A former maintenance mechanic for East Penn Manufacturing Co. filed a lawsuit against the company, claiming that he was wrongfully terminated after allegedly damaging a laptop computer that belonged to the company. The employee attempted to establish a connection between his termination and a previous work-related injury, suggesting that he was discriminated against for the disabling injury. According to the U.S. Court of Appeals for the Third Circuit, there was insufficient evidence to establish a link between his termination and the injury.

After injuring his left knee in a work-related injury in 2012, the plaintiff underwent surgery to fix the problem. He was out of work and on disability leave for approximately eight months. He received Workers’ Compensation benefits during this time. He started to experience pain in the same knee in 2013, and submitted a claim for Workers’ Compensation benefits, but his claim was denied. After undergoing a second surgery in 2014, he was out of work again for several months. When he recovered, he was able to return to his position and collect the same salary.

According to the plaintiff, when he returned to work, he was disciplined for taking too much time off after the second surgery. A personnel director at East Penn scheduled a disciplinary meeting and explained the company’s policy regarding sick days and absences. Several months later, he was accused of throwing an object, which damaged a company-owned laptop. A personnel director confronted him about the incident, but he denied it. He was suspended pending an investigation, and ultimately fired.

The District Court ruled that no reasonable jury would find a link between the plaintiff’s firing and his workplace injury. However, the plaintiff argued that he presented enough evidence to support the claim that he was fired because of his injury, and that the district court set too high a standard for proving a prima facie case.

Earlier this month, the Third Circuit affirmed the lower court’s summary judgment. According to the Third Circuit, East Penn had a legitimate reason for terminating the plaintiff, who failed to provide sufficient evidence to support his claim. The company had a written statement from another East Penn employee who witnessed the plaintiff throw the object that damaged the laptop computer. The Court ruled that summary judgment, based on the lack of causal link, was appropriate.

Philadelphia Business Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Represent Clients in Wrongful Termination Cases

If you have been wrongfully terminated, or your employee rights have been violated, contact the Philadelphia business lawyers at the Law Office of Sidkoff, Pincus & Green P.C. We will protect your rights and secure the maximum financial compensation you deserve. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. Our offices are conveniently located in Philadelphia, where we serve clients throughout southeastern Pennsylvania and New Jersey.

Any Company Registered to Do Business in Pennsylvania Now Subject to Lawsuits

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The Pennsylvania Superior Court ruled in September that companies that are registered to conduct business in Pennsylvania may now be sued in the Pennsylvania state courts. Murray v. Am. LaFrance, LLC, 2018 Pa. Super. 267 (Pa. Super. 2018).  This includes foreign-based corporations who are registered to do business in Pennsylvania. Murray follows a June 28, 2018 Superior Court decision, Webb-Benjamin, LLC v. International Rug Group, LLC, which also granted personal jurisdiction over foreign-based businesses.

In this context, “foreign corporation” refers to a company that is registered to do business in a different jurisdiction or state than that which it is incorporated in.

The ruling followed a case involving a group of New York firefighters who had experienced hearing loss as a result of excessive occupational noise exposure from fire engine sirens. The firefighters sued Federal Signal Corporation, a foreign corporation registered in Pennsylvania.

In support of its ruling, the Superior Court examined Bors v. Johnson & Johnson, an Eastern District of Pennsylvania case which held that “consent remains a valid form of establishing personal jurisdiction under the Pennsylvania registration statute after Daimler.” Daimler was a 2014 Supreme Court case which held that a normally a foreign corporation must be “at home” in a state before the state court can exercise personal jurisdiction over it. However, the Supreme Court in Daimler did not address whether a business can consent to a state court’s jurisdiction based on the state’s business registration requirements.

The Bors court found that Pennsylvania’s statue informs the registrant about the jurisdictional effect of registering to do business in the state. As a result, by consenting to register, a corporation submits to jurisdiction for all purposes.

Unless and until Murray and Webb-Benjamin are appealed, and a higher court reverses the Superior Court’s rulings, foreign corporations registering to conduct business in Pennsylvania will considered consenting to personal jurisdiction.

Philadelphia Business Lawyers at the Law Office of Sidkoff, Pincus & Green P.C. Provide Legal Counsel to Pennsylvania Employees

If you intend to file a lawsuit against your employer, who is registered as a foreign corporation, you are urged to contact the Philadelphia business lawyers at the Law Office of Sidkoff, Pincus & Green P.C. To schedule a confidential consultation today, call us at 215-574-0600 or contact us online. Our office is conveniently located in Philadelphia where we represent clients in Pennsylvania and New Jersey.

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

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

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

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

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

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

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

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

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

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

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Supreme Court of Pennsylvania Holds That Disclosure of Truthful Information Does Not Qualify as Tortious Interference with Contractual Relations

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In Walnut Street Associates, Inc. v. Brokerage Concepts, Inc., the Supreme Court of Pennsylvania held that the disclosure of truthful information regarding an employee does not constitute tortious interference. 20 A.3d 468 (Pa. 2011). In this matter, Plaintiff, Walnut Street Associates (“WSA”), provided insurance brokerage services and provided clients with health insurance benefits for their employees. Defendants, Brokerage Concepts, Inc. (“BCI”), were the third-party administrator of the employee benefit plan of Plaintiff’s client, Procacci Brothers Sales Corp. (“Procacci”). The issue in question arose when Procacci requested that BCI lower their service costs. When BCI informed Procacci that they would not meet the requested cost, Procacci decided to leave BCI and to hire a new insurance administrator. Upon hearing the news of Procacci’s departure, BCI contacted Procacci and informed them that they could not lower the costs because BCI was required to pay WSA a certain percentage of the proceeds from Procacci. Procacci was not aware that WSA was receiving such a high percentage, and thus, terminated their contract with WSA. WSA brought suit against BCI for tortious interference with contractual relations for their disclosure of WSA compensation under the contract.

In Pennsylvania, in order to succeed on a claim for tortious interference, the plaintiff must establish that (1) a contract or a prospective contract existed between the plaintiff and a third-party; (2) purposeful action by the defendant with the intent to harm the relationship between the parties to the contract; (3) The defendant’s action was improper; and (4) actual damages resulted from defendant’s interference.

In this matter, the Court was faced with determining whether BCI’s actions constituted tortious interference. There was no dispute that there was a contractual relationship between WSA and Procacci, and BCI interfered with that relationship, but in order to satisfy the elements of the claim, WSA had to establish that BCI’s actions were improper.  In analyzing whether the actions by BCI were improper, the Supreme Court affirmed the Superior Court’s decision to adopt Section 772(a) of the Restatement (Second) of Torts, which provides that “there is of course no liability for interference with a contract or with a prospective contractual relation on the part of one who merely gives truthful information to another.” Furthermore, this disclosure of truthful information was not considered tortious even if the third-party requested the information or not. For this reason, the Supreme Court affirmed the Superior Court’s reasoning and ruled in favor of BCI.

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

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Third Circuit Court Affirms Grant of Summary Judgment in PMWA Statutory Construction Case

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In Livi v. Hyatt Hotels Corp., No. 17-3646, 2018 WL 4944823 (3d Cir. 2018) the Third Circuit Court of Appeals affirmed the grant of summary judgment in favor of Hyatt Hotels in a Pennsylvania Minimum Wage Act (“PMWA”) and Pennsylvania Wage Payment and Collection Law (“WPCL”) action. Plaintiff, a banquet server for Hyatt, filed a class action complaint on behalf of herself and similarly situated individuals alleging that she worked more than 40 hours but was not paid overtime and that she was entitled to contractual service charge which Hyatt retained.

Under Pennsylvania law, service establishments (including hotels) are not required to pay overtime to employees working more than 40 hours per week if they are exempt from the overtime requirement under 34 Pa. Code § 231.43(f). An employer may be exempt if the “regular rate of pay of the employee is in excess of 1 ½ times the minimum hourly rate applicable” or “more than half of the employee’s compensation for a representative period, not less than 1 month, represents commissions on goods or services.” Plaintiff fell within both exemptions because the Court found her regular rate of pay at Hyatt was more than 1 ½ times the minimum wage and the service charges Hyatt paid her comprised more than half her compensation.

However, Plaintiff argued that Hyatt was not exempt from the overtime requirement because the service charges do not “represent commissions on goods or services” under the Pa. Code. The Court reasoned that although the relevant Pennsylvania statutes do not define “commission” and the Pennsylvania Supreme Court had no guidance on the issue, it was appropriate for the Court to look to Pennsylvania’s intermediate appellate court for assistance. The Court then explained that Pennsylvania’s Commonwealth Court instructed that “when the PMWA substantially parallels the federal Fair Labor Standards Act (“FLSA”), Pennsylvania courts look to federal courts’ interpretation of the parallel FLSA provision for guidance. Looking then to the FLSA’s overtime exemption, the Court agreed with the District Court that banquet service charges represent commissions. Therefore, the District Court appropriately awarded summary judgment to Hyatt.

If you have been denied overtime wages, the experienced Philadelphia employment lawyers at the Law Office Of Sidkoff, Pincus & Green will fight to get you the compensation you deserve. To schedule a consultation, call us at 215-574-0600 or contact us online today. With offices conveniently located in Philadelphia, we serve clients throughout Southeastern Pennsylvania and South Jersey.

Pennsylvania’s Dragonetti Act

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Although the cause of actions of abuse of process and wrongful use of civil proceedings may seem to be one in the same, there are significant differences between them. The common law cause of action for abuse of process is defined as the use of legal process against another “‘primarily to accomplish a purpose for which it is not designed.’” Rosen v. American Bank of Rolla, 627, 426 Pa. Super. 376, 627 A.2d 190, 192 (Pa. Super. 1993). Wrongful use of civil proceedings (or more commonly known as the “Dragonetti Act”) covers a different tort. Its provisions are:

  • Elements of action. A person who takes part in the procurement, initiation or continuation of civil proceedings against another is subject to liability to the other for wrongful use of civil proceedings:
  • he acts in a grossly negligent manner or without probable cause and primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based; and
  • the proceedings have terminated in favor of the person against whom they are brought.

42 Pa.C.S. § 8351 et. seq.

Under the Dragonetti Act, the parties liable include the lawyer, the law firm prosecuting the case, the law firm’s client, and if applicable, the owner of a corporate client. The Dragonetti Act, including its provisions that allows actions to be brought against lawyers who file suits or prolong proceedings in violation of the Act was recently found to be valid by the Pennsylvania Supreme Court. See Villani v. Seibert, 639 Pa. 58, 83, 159 A.3d 478, 492 (2017).

The difference between the Dragonetti Act and abuse of process causes of action are well known in Pennsylvania jurisprudence. An action for abuse of process differs from a Dragonetti action (i.e., abuse of process is that the gist of an action for the improper use of process after it has been issued, that is, a perversion of it. Malicious use of civil process has to do with the wrongful initiation of such process.” Rosen, supra., 627 A.2d at 192. When civil proceedings are filed or prosecuted with a malicious motive and lacking probable cause, 42 Pa.C.S.A. § 8351(a)(1)-(2) is violated. A successful cause of action under the Dragonetti Act has three elements: (1) the proceedings were decided in favor of the defendant; (2) the lawyer, the law firm, and the client caused those proceedings to be instituted against the defendant without probable cause; and 3) the proceedings were instituted primarily for an improper cause. See Di Loreto v. Costigan, 600 F. Supp. 2d 671 (E.D. Pa. 2009) (Discussing cases).

The Dragonetti Act provides that a plaintiff is entitled to recover for (1) the harm normally resulting from any dispossession or interference with the advantageous use of his land, chattels or other things, suffered by him during the course of the proceedings; (2) the expense, including any reasonable attorney’s fees, that he has reasonably incurred in defending himself against the proceedings; (3) any specific pecuniary loss that has resulted from the proceedings; and (4) punitive damages according to law in appropriate cases.

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

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