Category: Employment Law

Pennsylvania District Court Rules Employer Could Not Credit Purported Premiums Included in Its Lump Sums Towards Overtime Compensation as Required by the FLSA and DOL Rules.

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In Hickman v. TL Transportation, LLC, 318 F. Supp. 3d 718 (E.D. Pa. 2018), former employees brought a class action lawsuit alleging their former employer failed to properly compensate them for overtime hours worked under the federal Fair Labor Standards Act (“FLSA”), the Pennsylvania Minimum Wage Act (“PMWA”), and the Maryland Wage and Hour Law (“MWHL”).

Plaintiffs claimed that although they often worked in excess of eight hours each shift, Defendant would only pay them $160 for each day worked, regardless of how many hours they actually worked. Defendant argued that under the FLSA, the lump sum paid to employees should be credited to any amount owed to Plaintiffs because the payment included a premium for overtime hours, which is recognized under the FLSA. The employer explained they determined the $160 lump sum payment based on the expectation that each employee would work ten hours a day, providing compensation for eight hours plus two hours of overtime compensation. However, the Court ultimately rejected Defendant’s argument, explaining a lump sum premium to employees must still take into account the amount of hours actually worked by the employee. Evidence showed that the employees often worked in excess of ten hours most work days.

The Court noted Defendants’ pay policy failed to provide an incentive to reduce employee hours—contrary to the goal of Congress in passing the FLSA to reduce overtime hours and create more employment opportunities. Therefore, the lump sum to employees could only be considered a “day rate” and the employer could not credit the alleged “premium” towards overtime compensation owed to the employees for any week they worked in excess of 40 hours.

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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Superior Court of Pennsylvania Upholds Employer’s Non-Compete Agreement That was Incidental to Employment and Reasonable in Time and Scope

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In Tyco Fire Products, L.P. v. Fuchs, the Superior Court of Pennsylvania held that Tyco Fire Products, L.P.’s (“Tyco”) non-compete agreement was enforceable against its former employee (“Fuchs”). 2017, WL 5509889 (Pa. Super. 2017). Tyco designs, manufactures, and distributes fire protection products such as chemical water and other fire preventative measures.  Fuchs worked as a senior sales manager for Tyco for approximately ten years. During his time at Tyco, Fuchs signed a Confidentially Agreement and a Non-Competition Agreement (the non-compete agreement). This non-compete agreement stated that Fuchs may not “employ, engage, or enter into employment” with any competing business in the Northeast (including 11 states) for a period of 12 months.  After his resignation in 2016, Fuchs began work at Reliable Automatic Sprinkler Company, Inc. which engages in the same type of business as Tyco. While employed at Reliable, Fuchs contacted former Tyco customers and engaged in business inside of the restricted zone of the non-compete.

When analyzing a non-compete agreement, the court will determine if the agreement is “incident to an employment relationship between the parties; the restrictions imposed by the covenant are reasonably necessary for the protection of the employer; and the restrictions imposed are reasonably limited in duration and geographic extent.”  Fuchs argued that Tyco’s non-compete agreement was unreasonably broad in both duration and geographic location.

The Court rejected Fuchs’ argument and found that the Tyco Agreement was enforceable under the required analysis. The Court ruled that the agreement was incidental to an employment relationship because of his actual employment as a sales manager for Tyco. Secondly, the Court ruled that Tyco’s agreement was reasonably necessary to protect Tyco’s legitimate business interests. In ruling on this issue, the Court looked to the fact that Reliable was in the same business as Tyco and Fuchs’ contact with the Tyco customers during his time at Reliable clearly show that there was a need to protect legitimate business interests. Lastly, and most importantly, the Court found that the 12-month (1 year) limitation was well within the reasonable limitations period and the 11-state geographic restriction was reasonable because Fuchs’ had conducted business in all restricted states during his time at Tyco. Thus, the Court ruled in favor of Tyco and affirmed the trial court’s decision.

Philadelphia non-compete lawyers at Sidkoff, Pincus & Green P.C. protect employees’ right to work. For assistance in any type of employment law matter, call 215-574-0600 to schedule a consultation in our Philadelphia office, where we represent clients in Pennsylvania and New Jersey, or contact us online.

PA District Court Invalidates Non-Compete for Lack of Adequate Consideration and Enforces Original Agreement

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In Allied Orthopedic Assoc. v. Leonetti, Civil Action No. 18-01566, 2018 WL 4051801 (E.D. Pa. August 24, 2018), Plaintiff successfully enjoined Defendant from violating a non-compete agreement the two parties previously entered into. Plaintiff in this case is a manufacturer’s representative that sells medical equipment. Defendant was hired by Plaintiff in 2008 as a sales associate and executed a non-competition, non-solicitation and confidentiality agreement. Among other things, the non-compete stated that “[e]mployee agrees that he/she will not, directly or indirectly, at any time while employed by [Plaintiff] and within eighteen months (18) months after termination with Plaintiff, with or without cause, make any independent use of, or disclosure to any person other than an employee at [Plaintiff’s company].” In 2010, Defendant signed another series of non-competition, non-solicitation and confidentiality agreements and was “essentially promoted”. Defendant resigned in 2018 and began working for a local competitor of the Plaintiff. Plaintiff brought suit alleging breach of contract, tortious interference with contractual relations, tortious interference with business relations and violation of Pennsylvania’s Uniform Trade Secrets Act and civil conspiracy.

Defendant initially contended that the agreements entered into in 2010 controlled rather than the original non-compete signed in 2008. The Court found the 2010 non-competition agreements were “not supported by adequate consideration” and thus not valid. In Pennsylvania, in order for a non-competition covenant to be enforceable, it must related to a contract for employment, be supported by adequate consideration and be reasonably limited in both time and territory.  Since the consideration, which was the “promotion”, was not contemplated in the agreement, the 2010 agreement was not valid and the 2008 agreements controlled. As to the validity of the 2010 non-compete agreements, the Defendant did not dispute that the non-compete was incident to the employment relationship with Plaintiff or that the eighteen-month duration of the non-competition provision was excessive. Rather, Defendant attempted to argue that the territorial limit of the non-competition agreement was overreaching and unfair. The Court concluded that the recent downsize of Plaintiff’s company, which shrunk their commercial activity to Delaware, Philadelphia and the Philadelphia suburbs, limits the restrictions in the non-compete agreement to those specific areas. Therefore, since Defendant was working within the Philadelphia area, he was in breach of the non-competition agreement.

Philadelphia non-compete lawyers at Sidkoff, Pincus & Green P.C. protect employees’ right to work. For assistance in any type of employment law matter, call 215-574-0600 to schedule a consultation in our Philadelphia office, where we represent clients in Pennsylvania and New Jersey, or contact us online.

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PA District Court Holds that Employer Had Legitimate Nondiscriminatory Reason for Termination in Age Discrimination Case

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In Terrell v. Main Line Health, Inc., Civil Action No. 17-3102, 2018 WL 2462005 (E.D. Pa. June 1, 2018) Plaintiff, an employee at Defendant’s Hospital for thirty-five years, was terminated from her position as operating room secretary. Plaintiff alleges that her employer terminated her because of her age. Defendant countered and argued that Plaintiff was terminated for a legitimate, nondiscriminatory reason. Specifically, Defendant alleged that Plaintiff accessed information regarding a co-worker in violation of Defendant’s polices relating to patient privacy and in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Plaintiff filed a complaint against Defendants with the Equal Opportunity Employment Commission (“EEOC”) and the Pennsylvania Human Rights Commission (“PHRC”). Defendants ultimately moved for summary judgment.

To succeed on an age discrimination claim based on disparate impact, a plaintiff must demonstrate that age “was the ‘but-for’ cause of the employer’s adverse decision.” In age discrimination cases, it is not sufficient to simply show that age was “a motivating factor” in the adverse employment action. Rather, a plaintiff must demonstrate that age was a determinative factor or “the ‘but for’ cause of the employers adverse decision.” Age discrimination may be established by direct or indirect evidence. Regardless of the method of proof, “the plaintiff retains the burden of persuasion to establish that age was the ‘but-for’ cause of the employer’s adverse actions. To establish a prima facie case of discrimination in ADEA cases, the plaintiff must show (1) that the plaintiff was forty years of age or older; (2) that the defendant took an adverse employment action against the plaintiff; (3) that the plaintiff was qualified for the position in question; and (4) that the plaintiff was ultimately replaced by another employee who was sufficiently younger to support an inference of discriminatory animus. Plaintiff successfully established a prima facie case of age discrimination.

Accordingly, the burden shifted to Defendant to produce a legitimate nondiscriminatory reason for termination. Defendant then produced the evidence that Plaintiff twice accessed information regarding a co-worker in violation of Defendant’s polices relating to patient privacy and in violation of the HIPAA. Therefore, the burden went back to Plaintiff to establish the proffered reason was merely pretext.

Plaintiff did not challenge the allegation that she accessed information regarding co-workers. Rather, she argued that a factfinder could disbelieve Defendants’ articulated legitimate reason for terminating her because her “two business-related data accesses absolutely do not fall into the categories of conduct required for termination.” The Court ultimately ruled that Plaintiff failed to raise a triable issue of fact as to whether the proffered reason for her termination were pre-textual and that Defendants were entitled to summary judgment.

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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Third Circuit Splits from Other Circuit Courts in Age Discrimination Suit

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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.

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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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 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.

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

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

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

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

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

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PA Court Continues Trend of Expanding the Definition of Work Premises

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On February 22, 2018 the Commonwealth Court of Pennsylvania affirmed the growing practice of expanding the boundaries of work premises in order to protect employees injured on the job. US Airways, Inc. v. Workers’ Comp. Appeal Bd. (Bockelman), 179 A.3d 1177, 1183 (Pa. Commw. Ct. 2018), reargument denied (Mar. 28, 2018). A Philadelphia flight attendant working for US Airways, Inc. suffered significant knee and leg injuries while attempting to move her suitcase onto the luggage racks of the shuttle bus that transports employees from a separate parking facility to the workplace of her employer. US Airways did not own, rent, or lease the shuttle buses, and did not require use of the shuttle or provide any directive at all to employees as to how employees should commute to work. The attendant brought a claim seeking compensation to cover the medical expenses for her injuries. The Workers’ Compensation Judge (WCJ) found that the employee was injured in the course and scope of her employment, US Airways appealed.

On appeal US Airways challenged the argument that the shuttle was part of the protected premises for employees. The Court emphasized that the term “premises” in the scope of the workplace was not limited solely to property actually owned or leased by the employer. The Court relied on precedent to establish that “premises includes reasonable means of access to the workplace” and that “means of access customarily used by employees” may be considered within the scope of employer’s premises. US Airways understood that employees who drove to work would almost always be required to park in the separate parking facility and use the shuttle system. The court found that the use of the shuttle system was “a necessary part of her employment.” Even if US Airways did not explicitly require its employees to use the shuttle, it was so integral, connected, and expected for employment that the WCJ did not err in concluding that the shuttle was required by nature of the employment. The Workers’ Compensation Appeal Board’s order was affirmed, and rearguement was denied on March 28, 2018.

For more information, call our Philadelphia employment lawyers in Pennsylvania and New Jersey at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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