What’s New In Employment Law?

1. In the absence of (a) a contract of employment for a definite term or (b) a statute that creates employee tenure or restricts a municipal employer's power to discharge an employee, a municipal employee in Pennsylvania is employed at will and may be terminated at any time, for any reason, or for no reason. Ballas v. City of Reading, 2001 WL 73737, *3 (E.D. Pa.); Short v. Borough of Lawrenceville, 548 Pa. 265, 696 A.2d 1158 (1997); Pipkin v. Pennsylvania State Police, 548 Pa. 1, 4, 693 A.2d 190, 191 (1997); see also Werner v. Office of Admin., 701 A.2d 796 (Pa. Cmwlth. 1997).

2. Municipal employees typically are at-will employees and lack tenure protection in a contract or statute. Therefore, a typical municipal employee does not have a property right in continued employment. Nearhood v. City of Altoona, 705 A.2d 1363, appeal denied, 555 Pa. 748, 725 A.2d 1224 (1998) (Pa. Cmwlth. 1998). See also Gallagher v. Borough of Downingtown, 2000 WL 419974 (E.D. Pa. 2000) ("removal for cause" provisions in BOCA Code do not override Pennsylvania’s statewide employment at will rule). Among the statutes that provide rights to continued employment are state and local civil service laws.

3. Without a "property right" in continued employment, an employee does not have the right to procedural due process – i.e., notice and a hearing prior to dismissal or the right to appeal a dismissal to court. This is so because the decision to dismiss the employee is not an "adjudication" under the Local Agency Law. 2 Pa. C.S. §§ 551-555, 751-754. Poteat v. Harrisburg School Dist., 33 F.Supp.2d 384 (M.D. Pa. 1999); Short v. Borough of Lawrenceville, 548 Pa. 265, 696 A.2d 1158 (1997); Nearhood v. City of Altoona, 705 A.2d 1363, appeal denied, 555 Pa. 748, 725 A.2d 1224 (1998) (Pa. Cmwlth. 1998). A decision not to re-employ an employee at the end of the employee’s contract term does not, by itself, constitute a due process violation. Garrett v. Kutztown Area School Dist., 1998 WL 513001, *1 (E.D. Pa. 1998).

4. Tenured public employment is not a fundamental property interest entitled to substantive due process protection. Nicholas v. Pennsylvania State Univ., 227 F.3d 133 (3rd Cir. 2000).

5. An employee with statutory or contractual rights to employment may also have certain rights to engage in off-duty employment that rise to the level of a property right. See McKenna v. North Strabane Tp., 700 A.2d 577 (Pa. Cmwlth. 1997) (Police officer has property right to off-duty employment, but cannot appeal denial of off-duty employment under Local Agency Law, because this right is arbitrable under the collective bargaining agreement.).

All contracts, and all contractual terms and conditions, are subject to constitutional restrictions on municipal power.

1. In a case of first impression (Denbow v. Borough of Leetsdale, 556 Pa. 567, 729 A.2d 1113 (1999), affirming, 699 A.2d 838 (Pa. Cmwlth. 1997)), the Pennsylvania Supreme Court prohibited municipalities from giving extra compensation to public officers or employees for services already rendered after a contract had already been made. The prohibition is contained in Article III, § 26 of the Pennsylvania Constitution, which regulates actions of the Pennsylvania General Assembly. The court reasoned that Article III, § 26 applied equally to municipalities. See also Pa. Const., Article 6, § 7 (civil officers removable at the pleasure of the appointing power).
2. Article III, § 27 has been interpreted to prohibit the de facto reduction of a public officer’s compensation without a formal resolution in a case dealing with the withdrawal of a tax collector’s rent-free office space. Knight v. Elizabeth Forward School District, 764 A.2d 108 (Pa. Cmwlth. 2000).

1. The power to confer employment tenure must be expressly and specifically set forth in enabling legislation. In the absence of enabling legislation, a contract for tenured employment is invalid and unenforceable. Ballas v. City of Reading, 2001 WL 73737 (E.D. Pa.). As a general rule, the relevant enabling statutes for counties and municipalities do not allow the political subdivisions to contract away the right of summary dismissal. Demko v. Luzerne County Community College, 113 F.Supp.2d 722 (M.D. Pa. 2000).
2. In order to ascertain whether a municipality has legislative authority to contract, it is necessary to consult the appropriate Municipal Code and/or the municipality's Home Rule Charter. Statewide legislation of general applicability will take precedence over a Home Rule Charter on procedural matters such as the filling of vacancies in a public office. See In re District Attorney, 756 A.2d 711 (Pa. Cmwlth. 2000).
3. Assuming an affirmative answer on the municipality's authority to contract, it is necessary to ask if the authorized individual or entity has approved and entered into the contract.

1. The contract must contain the municipality's explicit agreement (i) to employ the individual for a definite period of time or (ii) to limit the municipality’s ability to discharge the employee at will.
2. An agreement that establishes rates of compensation, employee benefits, vacation leave, sick leave, and paid holidays, but does not contain the elements in Section 3a., does not alter the employment-at-will presumption.

The contract must be approved in the manner provided by statute and ordinances. The contract must also be signed by the municipality. See Perry v. Tioga County, 694 A.2d 1176 (Pa. Cmwlth. 1997).

Where a statute limits the power of a governmental body to remove an official, the official may successfully challenge an attempted removal. See Sasinoski v. Cannon, 696 A.2d 267 (Pa. Cmwlth. 1997) (county public defender could not be placed on administrative leave by a county manager; statute requires removal by power that appointed defender).

Dismissal of a township roadmaster by private action by two of three members of board of supervisors was void; the action, taken outside a public meeting and without notice to the third supervisor, violated the Sunshine Act and the Second Class Township Code. Thomas v. Township of Cherry, Butler County, 722 A.2d 1150 (Pa. Cmwlth. 1999) (Sunshine Act challenge untimely; no time limit exists to challenge action under the Second Class Township Code).

Unless an employer and employee both understand that a handbook constitutes a contract for employment tenure, or the employer states a clear intent to be bound by the tenure provisions of the handbook, the handbook does not establish rights to employment tenure and does not override the employment-at-will presumption.

Statements in a handbook may give rise to a contractual obligation to provide wages and benefits even when employment tenure is at will. Bauer v. Pottsville Area Emergency Medical Services, Inc., 758 A.2d 1265 (Pa. Super 2000).

1. Oral assurances against political interference and promises of continued employment are insufficient to override the employment-at-will presumption. See Gallas v. Supreme Court of Pennsylvania, 1998 WL 22081 (E.D. Pa. 1998), aff’d, 211 F.3d 760 (3rd Cir. 2000).

1. An implied in fact contract is an actual contract which arises when parties agree upon the obligation to be incurred, but their intention is not expressed in words and is, instead, inferred from their actions in light of surrounding circumstances. Halstead v. Motorcycle Safety Foundation, Inc., 71 F.Supp.2d 455, 459 (E.D. Pa. 1999) (finding no implied in fact employment contract).
2. It remains the law that relocation at an employer’s request does not lead to an implied in fact employment contract preventing termination. Sharp v. BW/IP International, Inc., 991 F.Supp. 451 (E.D. Pa. 1998).

Risks inherent in the job taken by the employee do not constitute "sufficient additional consideration" to override the employment at will rule. Rapagnani v. Judas Co., 736 A.2d 666 (Pa. Super. 1999).

A contract implied in law, or quasi contract, is designed to cure unjust enrichment where the employer has secured or passively received a benefit that would be unconscionable to retain without compensating the provider. A quasi contract is a duty imposed by law upon a person who has obtained property or services where reason, common sense, and justice dictate that payment should be made therefor. Such an obligation is created by law for reasons of justice, and may be found absent any expression of assent by the party to be charged and even in spite of the party’s contrary intention. Halstead v. Motorcycle Safety Foundation, Inc., 71 F.Supp.2d 455, 459 (E.D. Pa. 1999) (finding no quasi contract of employment).

Pennsylvania law does not allow an employee to maintain a claim for breach of an implied covenant of good faith and fair dealing independent of a breach of contract claim; therefore, an at-will employee does not have such an implied contract claim arising from termination of employment. See, e.g., McDaniel v. American Red Cross, Johnstown Region, 58 F.Supp.2d. 628, 633-634 (W.D. Pa. 1999); Donahue v. Federal Express Corp., 753 A.2d 238 (Pa. Super. 2000).

The Eleventh Amendment to the United States Constitution bars suits in federal court against a state by either citizens of the state or citizens of another state. This immunity exists unless Congress explicitly abrogates the immunity. The Eleventh Amendment’s immunity extends to the Commonwealth and to Commonwealth instrumentalities such as the unified judicial system. Kilvitis v. County of Luzerne, 52 F.Supp.2d 403 (M.D. Pa. 1999). The United States Supreme Court and lower courts have recently held that the Eleventh Amendment bars suits against states for violations of the Americans with Disabilities Act (Board of Trustees of the University of Alabama v. Garrett, 531 U.S. ____, 121 S.Ct. _____, 2000 WL 3317981 (2/21/01)); the Age Discrimination in Employment Act (Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S. Ct. 631 (2000)); and the Family and Medical Leave Act (Kilvitis v. County of Luzerne, supra).

Eleventh Amendment immunity is not enjoyed by political subdivisions such as municipalities (Flint v. City of Philadelphia, 2000 WL 288114, *4 n.2 (E.D. Pa.)); counties (Rainey v. County of Delaware, 2000 WL 1056456, *3 n.4 (E.D. Pa.)); and school districts (Narin v. Lower Merion School Dist., 206 F.3d 323, 331 (3rd Cir. 2000)).

An at-will employee stated a claim for damages under the civil rights conspiracy statute by alleging that his employer and two of the employer’s officers conspired to have the employee fired in retaliation for obeying a grand jury subpoena and to deter employee from testifying at federal criminal trial. Haddle v. Garrison, 525 U.S. 121, 119 S. Ct. 489 (1998).

An employer may not discharge an at-will employee for engaging in conduct that public policy encourages, or for refusing to engage in conduct that public policy discourages. If an employer discharges an employee in violation of this rule, the employee may bring a tort action against the employer for wrongful discharge. This "public policy" exception to the at-will rule is very narrow, applying only to discharges that strike at the heart of an employee's social rights, duties, and responsibilities. Recently, Pennsylvania state courts have broadened the number of circumstances in which employees may challenge dismissals on public policy grounds, but the exception is still narrow.

1. An employee discharged for complaining to an employer about the employer's violations of federal law does not state a public policy claim. McLaughlin v. Gastrointestinal Specialists, Inc., 561 Pa. 307, 750 A.2d 283 (2000), affirming 696 A.2d 173 (Pa. Super. 1997). The Pennsylvania Supreme Court held in McLaughlin that an employee making a public policy claim had to show a violation of the public policy of the Commonwealth, rather than federal law. The public policy of the Commonwealth includes the state constitution, court decisions, and statutes.
2. A public policy claim arises only where an employee exercises a right or performs a statutory duty. Where an employee is not under a duty to act, no public policy claim arises on a discharge. Thus, in Dibernardinis–Mason v. Super Fresh, 94 F. Supp.2d 626 (E.D. Pa. 2000), the court rejected a pharmacist’s claim for wrongful discharge for reporting other pharmacists’ irregularities. The Court held that the pharmacist had no affirmative reporting duty. In Spierling v. First American Home Care Services, 753 A.2d 1250 (Pa. Super. 1999), the Superior Court rejected a wrongful discharge claim brought by a nurse terminated after reporting suspected evidence of Medicare fraud. The Court noted that the nurse had no duty to check for or to report the fraud.
3. No public policy claim arises where an employee is discharged for failure to report an incident of sexual harassment even though the alleged victim did not want the incident reported. McDaniel v. American Red Cross, Johnstown Region, 58 F.Supp.2d 628 (W.D. Pa. 1999).

1. The Pennsylvania Wage Payment and Collection Law, 43 P.S. § 260.1 et seq. ("WPCL"), provides a vehicle for employees to enforce payment of wages and compensation held by employers. The WPCL does not create an employee’s substantive right to compensation, but merely establishes a right to enforce payment of wages and compensation to which an employee is otherwise entitled by the terms of an agreement. Hartman v. Baker, 2000 WL 527891 (Pa. Super. 2000), appeal denied, ___ Pa. ____, 764 A.2d 1070 (2000). The WPCL allows recovery not only from the employer but also from the employer’s agents and officers.
2. The term "wages" includes all earnings of an employee, whether determined on time, task, piece, commission, or other method of calculation. The term "wages" also includes fringe benefits or wage supplements. "Fringe benefits or wage supplements" include payments under benefit plans; separation, vacation, holiday, or guaranteed pay; reimbursement for expenses; and any other amount paid pursuant to an agreement to the employee. 43 P.S. § 260.2a. The WPCL is to be liberally construed.
3. The award of attorney’s fees to a prevailing employee in a WPCL action is mandatory. Oberneder v. Link Computer Corp., 548 Pa. 201, 696 A.2d 148 (1997), affirming 449 Pa. Super. 528, 674 A.2d 720 (1995).

1. In Christensen v. Harris County, 529 U.S. 576, 120 S.Ct. 1655 (2000), the United States Supreme Court held that the Fair Labor Standards Act ("FLSA") did not prohibit a county government from forcing employees to use accrued compensatory time.
2. In Harris v. Mercy Health Corp., 2000 WL 1130098 (E.D. Pa. 2000), the United States District Court refused to dismiss a claim for overtime under the FLSA arising from the claims of a manager of a hospital’s addictive services unit; the worker was required to be "on call" and received up to 50 pages per week. The Court held that the worker could receive overtime compensation if a jury found that the duties were a "significant interference" with his personal life.

B. Independent Contractors - Wage Payment Claims

A corporation organized to provide engineering services as an independent contractor was not an employee. Therefore, the corporation could not bring an action under the Wage Payment and Collection Law. Frank Burns, Inc. v. Interdigital Communications Corp., 704 A.2d 678 (Pa. Super. 1997), appeal denied, 555 Pa. 719, 724 A.2d 935 (1998).

A conflict exists between two federal courts in Pennsylvania on the validity of federal FMLA regulations that prohibit an employer from counting employee leave toward an employee’s 12-week FMLA allowance for the period before the employer notifies the employee that the leave will count toward the FMLA allotment. The Eastern District held that this regulation is invalid in Twyman v. Dilks, 2000 WL 1277917 (E.D. Pa.) holding that the U.S. Department of Labor had no authority to extend FMLA leave beyond 12 weeks. The Middle District upheld the regulation in Gadzinski v. Shamokin Area Community Hospital, 116 F.Supp.2d 586 (M.D. Pa. 2000).

In Audenreid v. Circuit City Stores, Inc., 97 F.Supp.2d 660 (E.D. Pa. 2000), the Eastern District held that an employer’s use of a video system (with no audio features) to survey an employee’s management of a store and control loss-prevention did not violate electronic surveillance control acts.

In Wilcher v. City of Wilmington, 139 F.3d 366 (3rd Cir. 1998), the Third Circuit upheld a drug testing policy requiring firefighters to give urine specimens under direct supervision of a monitor. The case can be distinguished from Borse v. Piece Goods Shop, Inc., 963 F.2d 611 (3rd Cir. 1992), because of the public importance of firefighters.

It remains the case that the First Amendment does not apply to private employees. In Halstead v. Motorcycle Safety Foundation, Inc., 71 F.Supp.2d 464 (E.D. Pa. 1999), the Eastern District of Pennsylvania held that a private citizen cannot state a First Amendment claim on the basis of a private company’s failure to offer the individual a

position based on the fact that three PennDOT employees

objected to an interview that the plaintiff gave to a publication.

A communication is defamatory if it tends so to harm the reputation of another as to lower him in the estimation of the community or deter third persons from associating or dealing with him. To be defamatory, the statement must concern the plaintiff’s abilities to perform his job and harm the plaintiff’s trade or ability to become employed elsewhere. A communication is defamatory if it ascribes to another conduct, character or a condition that would adversely affect his fitness for the proper conduct of his proper business, trade or profession.

A promotional package taken as a whole may give rise to a defamatory implication even though the individual documents in the package are true and are not defamatory. Fanelle v. Lojack Corp., 2000 WL 1801270 (E.D. Pa. 2000) (denying motion for summary judgment); Fanelle v. Lojack Corp., 79 F. Supp.2d 558 (E.D. Pa. 2000) (denying motion to dismiss).

A statement that a competitor was going out of business is capable of defamatory meaning. Pennfield Precision, Inc. v. EF Precision, Inc., 2000 WL 1201381 (E.D. Pa. 2000).

1. Hyperbole and name calling Referring to representations of a nursing home chain as "criminals", "union busters", and anti-Semitic are not defamatory. Beverly Enterprises, Inc. v. Trump, 182 F.3d 183 (3rd Cir. 1999), affirming 1 F.Supp.2d 489 (W.D. Pa. 1998).
2. Accusation of misconduct Statement that corporate official walked out of a federal job and knocked on corporate employer’s door was not defamatory. Beverly Enterprises, Inc. v. Trump, 182 F.3d 183 (3rd Cir. 1999), affirming 1 F.Supp.2d 489 (W.D. Pa. 1998).
3. Statements about actual job performance are not capable of defamatory meaning; in order to be capable of defamatory meaning, the statement must concern the individual’s ability or fitness to perform a job. Sheehan v. Anderson, 2000 WL 288116 (E.D. Pa.).
4. Satirical references in a corporate skit were not defamatory. Karl v. Donaldson, Lufkin & Jenrette Securities Corp., 78 F.Supp.2d 393 (E.D. Pa. 1999).

The judicial privilege attaches to publication of materials within judicial or quasi-judicial proceedings. Giusto v. Ashland Chemical Co., 994 F.Supp. 587 (E.D. Pa. 1998). This privilege is an absolute privilege, and covers statements made to state administrative boards and, presumably, to local boards as well. See Fetters v. First Hosp. Corp., 34 Pa. D. & C.4th 366 (Centre Co. 1997), aff’d, 736 A.2d 687 (Pa. Super. 1999).

Statements made during a campaign are matters of public debate that are privileged. Satterfield v. Borough of Schuylkill Haven, 12 F.Supp.2d 423, 443 (E.D. Pa. 1998); Beverly Enterprises, Inc. v. Trump, 1 F. Supp.2d 489 (W.D. Pa. 1998), aff’d, 182 F.3d 183 (3rd Cir. 1999).

In Urban v. Dollar Bank, 725 A.2d 815 (Pa. Super. 1999), appeal granted, 560 Pa. 674, 742 A.2d 172 (1999), the Pennsylvania Supreme Court held that defamation and malicious abuse of process claims were not barred by the exclusivity provisions of the Workers’ Compensation Act.

A terminated newspaper reporter’s defamation claim is not pre-empted by federal labor-management law, because the claim does not require reference to the collective bargaining agreement. Cipriano v. Philadelphia Newspapers, Inc., 1999 WL 135111 (E.D. Pa. 1999).

A claim of general damages (damage to reputation or personal humiliation) is necessary in all defamation cases involving libel or slander per se. Synygy, Inc. v. Scott-Levin, Inc., 151 F.Supp.2d 570 (E.D. Pa. 1999), aff’d, 229 F.3d 1139 (3rd Cir. 2000).

Surveillance in a public place does not provide grounds for an action for invasion of privacy. Smith v. Borough of Pottstown, 1997 WL 597909, *8 (E.D. Pa. 1997).

Distribution of a promotional package that created the impression that an individual was a car thief gives rise to an action for false light invasion of privacy. See Fanelle v. Lojack Corp., 2000 WL 1801270, *9 (E.D. Pa. 2000).

See Fanelle v. Lojack Corp., supra.

Where an employee joins tort claims as pendent claims to discrimination claims, statute of limitations on pendent claims is not tolled while administrative discrimination claims are pending. Mincin v. Shaw Packing Co., 989 F. Supp. 710 (W.D. Pa. 1997).

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