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Philadelphia Business Lawyers: Whistleblower Protection for Employees under the Pipeline Transportation Safety Improvement Act

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1. Employees and Employers Covered

Under the Pipeline Safety Improvement Act (PSIA), employees of owners or operators of pipeline facilities and their contractors and subcontractors may file complaints with OSHA if they believe that they have experienced discrimination or retaliation for reporting alleged violations of federal law regarding pipeline safety or for refusing to violate such provisions.

2. Protected Activities

No employer, which is defined as a person owning or operating a pipeline facility, or a contractor or subcontractor of such a person, may discharge or otherwise discriminate against an employee who has provided information or is about to provide information regarding violations of Federal laws or provisions of this Act.

For instance, an employee is protected for providing information of violations regarding the following requirements of the Act which are designed to address safety concerns:

  • Requires strength-testing for previously untested natural gas transmission pipelines in high-population areas that operate at high pressure.
  • Requires pipeline operators to verify their records to confirm the pipelines’ physical and operational characteristics and their established maximum allowable operating pressure;
  • Authorizes additional pipeline inspectors and pipeline safety support employees through a phased-in increase over four years;
  • Requires pipeline operators to report all maximum allowable operating pressure exceedances to the Department of Transportation;
  • Increases the cap on civil penalties for violators of pipeline regulations and adds civil penalties for obstructing investigations;
  • Requires installation of automatic or remote-control shut-off valves on new pipelines

3. Proving Your Case

Any person who believes that he or she was discharged or otherwise discriminated against in violation of this section may file within 180 days after the date on which the violation occurs. After receiving the complaint, the Secretary of Labor shall notify, in writing, the person named in the complaint of the allegations contained in the complaint, of the substance of evidence supporting the complaint, and the opportunities to be afforded to such person.

The Secretary shall dismiss a complaint unless the complainant makes a prima facie showing that any of the protected behavior was a contributing factor in the unfavorable personnel action alleged in the complaint. The complainant must also demonstrate through clear and convincing evidence that the employer would not have acted otherwise but for retaliation for whistleblowing.

If the Secretary finds that a complaint is frivolous or brought in bad faith, up to $1000 may be awarded to the employer, paid by the complainant.

4. Available Remedies

Where OSHA finds a violation after investigating complaints under the other statutes listed above, it may issue a determination letter requiring the employer to pay back wages, reinstate the employee, reimburse the employee for attorney and expert witness fees, and take other steps to providenecessary relief. Complaints found not to have merit will be dismissed.

5. Time to File: Within 180 days of the incident.

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

Whistleblower Protection for Employees under the Surface Transportation Assistance Act

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1. Employees and Employers Covered

To be an employee covered under the Surface Transportation Assistance Act (STAA), one must be a driver of a commercial motor vehicle (including independent contractors), a mechanic, a freight handler, or an individual that is not an employer who is involved in activities directly affecting commercial motor vehicle safety or security. Employees of public transportation agencies or general railroads are not covered under this Act. Commercial motor vehicles are defined as “any self-propelled or towed vehicle used on the highway in commerce principally to transport cargo or passengers.” A vehicle covered under the Act must have a gross vehicle weight of at least 10,001 pounds, be designed to transport more than 10 passengers (including the driver), or be a placarded hazardous material vehicle. To be an employer under the Act one must be a “person engaged in a business affecting commerce that owns or leases a commercial motor vehicle in connection with that business, or assigns an employee to operate the vehicle in commerce.” The STAA does not cover the Government, a State, or a political subdivision of a State.

2. Protected Activities

A person may not discharge or discriminate against an employee, because the employee (or another person at the employee’s request) has filed a complaint, or begun a proceeding related to a violation of a commercial motor vehicle safety or security regulation, standard, or order. A person may not discharge or discriminate against an employee because (s)he refuses to operate a vehicle because the operation violates a regulation, standard, or order of the U.S. related to commercial motor vehicle safety, health, or security, or the employee has a reasonable apprehension of serious injury to the employee or the public because of the vehicle’s hazardous safety or security condition. A person may not discharge or discriminate against an employee because the employee cooperates, is about to cooperate with a safety or security investigation by the Secretary of Transportation, the Secretary of Homeland Security, or the National Transportation Safety Board. A person may not discharge or discriminate against an employee for furnishing information to the Secretary of Transportation, the Secretary of Homeland Security, or the National Transportation Safety Board about facts relating to an accident or incident resulting in injury or death to an individual or damage to property in connection with commercial motor vehicle transportation.

An employee’s apprehension of serious injury is reasonable only if a reasonable individual in the circumstances then confronting the employee would conclude that the hazardous safety or security condition establishes a real danger of accident, injury or serious impairment to health. To qualify for protection, the employee must have sought correction of the hazardous condition from the employer, and have been unable to obtain such correction.

3. Proving Your Case

Any employee alleging a violation under this Act may file a complaint with the Secretary of Labort through the Occupational Safety and Health Administration (OSHA), no later than 180 days after the alleged violation occurred. An employee must establish that (s)he engaged in a protected activity, which was a contributing factor of the unfavorable action taken by the employer. If a plaintiff successfully establishes his/her claim, an employer may avoid liability by demonstrating by clear and convincing evidence that it would have taken the same unfavorable action in absence of the employee’s protected activity.

4. Available Remedies

If an employee’s whistleblower claim under the STAA is successful, an employee may be entitled to remedies that include reinstatement with previous seniority and benefits, back pay with interest, compensatory damages, including compensation for special damages, expert witness fees, and reasonable attorneys’ fees, punitive damages in certain cases, but not to exceed $250,000.

5. Time to File: 180 days

If you believe you have a whistleblower case under the STAA, please contact an attorney at Sidkoff, Pincus and Green, located in Philadelphia, Pennsylvania.

Whistleblower Protection for Employees under the Toxic Substances Control Act

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1. Employees and Employers Covered

The Toxic Substances Control Act (TSCA) regulates the industrial chemicals produced or imported into the U.S. The Act imposes guidelines for the EPA’s testing, inspection, and tracking of industrial chemicals, and allows the EPA to ban the manufacture of any chemicals considered to pose an unreasonably high risk. The Act protects all employees, public and private, from retaliation for reporting potential violations of TSCA or in any way assisting in proceedings or investigations of such violations. All employers are subject to the Act, including small businesses, associations, municipalities, any interstate body, and any department or agency of the Federal Government. This section does not apply to any employee, who acting without discretion from his employer deliberately violates any requirement of this chapter.

2. Protected Activities

An employer may not discharge or otherwise discriminate against an employee for reporting potential violations of TSCA to his/her employer or to the government, or for assisting in a proceeding arising under the Act.

3. Proving Your Case

Any employee who believes he has been discharged or otherwise discriminated against by any person in violation with this provision may file, within 30 days after such violation occurs, a complaint with the Department of Labor, through the Occupational Safety and Health Administration (OSHA).

In order to make a successful claim under TSCA, the employee must have engaged in some protected activity, the employer must know of the employee’s protected activity, and the employee must have suffered some unfavorable action motivated at least in part by his/her protected activity.  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 relief including attorney’s fees and compensatory damages.

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

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

Whistleblower Protection for Employees under the Energy Reorganization Act

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1. Employees and Employers Covered

Under the Energy Reorganization Act (ERA), certain employees in the nuclear power and nuclear medicine industries may file complaints to the Department of Labor, through the Occupational Safety and Health Administration (OSHA), if they believe that they have experienced discrimination or retaliation for reporting alleged violations of nuclear safety laws or regulations. Under the ERA, the definition of an employee refers to anyone who is employed by a licensee of the Nuclear Regulatory Commission, the Department of Energy, and their contractors and subcontractors. Independent contractors may also be protected, depending on the extent of control the employer exercised over a worker. Former employees are protected where the employer’s post-employment actions arise out of his/her former employment.

These protections do not apply to any employee who acts without direction from his or her employer, and thereby deliberately causes a violation of any requirement of this chapter or of the Atomic Energy Act.

2. Protected Activity

An employee is protected from retaliation in situations where he/she is reporting internally, to regulators, or to media, issues of nuclear safety. These actions are protected only when the reported practices are that which he or she reasonably believes to implicate nuclear safety. The employee must reasonably believe the employer is engaged in the conduct, but does not need to be right in the belief as long as the belief is reasonable.

3. Proving Your Case

Any employee who believes that (s)he has been discharged or otherwise discriminated against for engaging in such protected activity may file a complaint with the Secretary of Labor, through OSHA, within 180 of the alleged incident.

The Secretary shall dismiss the complaint unless the complainant has made a prima facie showing that any of the behaviors prohibited in the Act was a contributing factor in the unfavorable personnel action alleged in the complaint. Relief may not be ordered if the employer demonstrates by clear and convincing evidence that it would have taken the same unfavorable personnel action in the absence of such behavior.

4. Available Remedies

If an employee’s whistleblower claim under the ERA is successful, he/she is entitled to reinstatement, and may be entitled to back pay and benefits, lost wages, compensatory damages for pain and suffering, and attorneys’ fees.

5. Time to File: 180 days after alleged violation.

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

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.