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Yesterday, we reported on a Commonwealth Court decision that basically concluded that an arbitrator’s award ordering the reinstatement of a discharged employee who is incapable of performing his job violates the “essence test.” We also noted that a subsequent decision of the court seems to be a bit in conflict with that holding. Let’s take a closer look at that decision.

The Commonwealth Court addressed (what appeared to be) a similar question in the context of a state trooper. The Trooper, a male, had a romantic relationship with a female, which ultimately failed. Thereafter, the female Trooper filed complaints that alleged the male Trooper was harassing her. The Pennsylvania State Police conducted an investigation and found the complaints unsubstantiated. Alleging the same behavior, the female Trooper filed for a Protection of Abuse order (PFA). A judge ultimately issued the PFA, which had a condition that the male Trooper could not carry a firearm. Because he could not carry a firearm, the male Trooper was placed on restrictive duty pending an additional internal investigation. Upon confirming that the PFA included a condition that barred him from carrying a firearm, the State Police terminated the male Trooper.

The Trooper filed a grievance and ultimately submitted the issue to arbitration. The arbitrator ordered that the Trooper be reinstated. The State Police appealed to the Commonwealth Court. Same result as the correctional officer, right? He cannot perform the essential duties of his position, so requiring his employment infringes managerial rights? Nope.

There are two key differences. First, unlike the correctional officer, whose collective bargaining rights are set out in the Public Employee Relations Act (PERA), the state trooper’s collective bargaining rights are established under Act 111. In reviewing arbitration awards under PERA the court uses the highly deferential essence test. However, in reviewing arbitration awards under Act 111, the court uses an even more deferential and narrow test. It is indeed narrow, justifying a vacation of an arbitrator’s award only if there is a lack of jurisdiction, irregularity of proceedings, excess in the exercise of powers, or deprivation of constitutional rights. The State Police argued that the Trooper’s reinstatement was in excess of the arbitrator’s powers. The court disagreed, finding that there is only an excess use of powers if the award requires an illegal act or performance of an act which cannot be done voluntarily. No such excess was present here.

The second difference is more fundamental: unlike the correctional officer, the State Police’s justification for the Trooper’s termination was not his inability to perform the essential functions of a police officer (carry a firearm), but it was the harassing conduct underlying the issuance of the PFA. According to the State Police, the underlying conduct violated department regulations for “unbecoming conduct” and “conformance of laws.” However, those regulations required physical abuse, commission of a felony or misdemeanor, or use of a firearm. None of the harassing conduct underlying the PFA involved any of this type of conduct. Thus, the court found the arbitrator did not exceed his authority in concluding that there was not just cause for the Trooper’s termination.

So, for our public employer subscribers, these cases serve as a reminder that arbitrator decisions are subject to great deference on appeal, making success during arbitration of critical importance. But more importantly, it makes clear that if you are planning on terminating an employee who has established that he or she is unable to perform the essential duties of his or her position, that must be the documented basis (or at least part) for the termination.

In November 2017, the Commonwealth Court of Pennsylvania issued an opinion concerning an arbitrator’s reinstatement of a state correctional officer (“CO”). The CO was responsible for monitoring inmates who worked on the prison’s loading dock. As far back as 2015, the CO’s supervisors noticed unauthorized food items in the dock area. Despite instruction to remove all unauthorized food from the dock, the CO continued to allow inmates to remove food from deliveries, and he personally took food for himself. Finding that he violated several orders, the CO was temporarily removed from his position and later reinstated. Shortly after his reinstatement, a routine search of the dock again found contraband food. This time he was discharged.

The CO filed a grievance and later submitted the issue to arbitration, claiming that the Department of Corrections violated the collective bargaining agreement by discharging him without just cause. The arbitrator agreed and reinstated the CO with a 30-day suspension. The arbitrator found that the CO was not irredeemable, just that “he should not be in a position which requires his supervision of inmates.” The arbitrator noted that the CO must have agreed with his inability to supervise inmates because he applied for, and was granted, a transfer to a guard tower position prior to his termination. Thus, the arbitrator found there was just cause to discipline the CO, but termination was not warranted.

The Department appealed the arbitrator’s award to the Commonwealth Court. The Court reviewed the award using the well-established “essence test,” which is a highly deferential standard. The essence test requires the court to affirm an arbitrator’s award so long as it can be rationally derived from the collective bargaining agreement. The Department argued that the award was not rationally derived from the CBA. It asserted that the award required it to employ a CO who could not perform the functions of the job, i.e. the care, custody and control of inmates. The Commonwealth Court agreed.

The court held that since the arbitrator found that the CO should not be in a position which requires supervision of inmates, the CO could not perform the statutorily-defined duties of a correctional officer. Thus, reinstatement would force the Department to employ an officer with limitations on his ability to interact with inmates. The court found this was in direct contradiction to the managerial rights enumerated in the CBA, which provided the Department had authority to direct its workforce to satisfy its operational needs. Accordingly, the court found arbitrator’s award was not rationally derived from the CBA.

For many public employers in Pennsylvania, the court’s decision is a welcomed limitation on the seemingly limitless power of arbitrators. It just makes sense that an arbitrator should not be permitted to reinstate an employee who the arbitrator himself has determined is incapable of performing his job.

However, a subsequent decision of the Commonwealth Court, analyzing a similar issue, has left some public employers scratching their heads. We will cover the subsequent decision in a post tomorrow.

Every year, Pennsylvania’s appellate courts seem to issue a handful of decisions addressing the enforceability of non-compete agreements. However, there are relatively few court decisions addressing non-solicitation agreements. A non-solicitation agreement is the less restrictive cousin of the non-compete. Under a non-solicitation agreement, a former employee is permitted to work anywhere, including competitors of his or her former employer. A non-solicitation agreement merely prohibits a former employee from soliciting (or perhaps even contacting) the former employer’s customers, prospective customers and/or employees. In Metalico Pittsburgh, Inc. v. Newman, the Superior Court of Pennsylvania recently addressed some fundamental points regarding enforcement of these less restrictive agreements.

In Metalico, two executives of a scrap metal broker left their employer (“Metalico”) to join a competitor, Allegheny Raw Materials, Inc. (“ARM”). Upon joining Metalico, they had both signed employment agreements which included non-solicitation provisions that prevented them from soliciting any of Metalico’s suppliers for up to two years after their employment ended. Their employment agreements were each for three year terms and, once these terms expired, the agreements were not renewed. Both executives continued to work for Metalico for a period of time as “at will” employees; i.e. their salaries and bonuses were no longer contractually guaranteed.

After leaving Metalico, both executives began soliciting Metalico’s suppliers for their new employer. Metalico sued to enforce the non-solicitation provisions in the expired employment agreements. The trial court ruled for the executives and refused to enforce the non-solicitation restrictions, holding, once the employment agreements expired, they “were replaced with at-will relationships that did not include non-solicitation provisions.”

On appeal, the Superior Court of Pennsylvania reversed the trial court and enforced the non-solicitation restrictions. The Court began with the basic premise that both executives received adequate consideration for their non-solicitation covenant when they signed [their agreements] “as part of their initial employment relationship.” Citing several earlier decisions, the Court then observed that “it is possible for a non-solicitation covenant to survive the end of a term of an employment contract, when the employee stays on as an at-will employee” if the written agreement provides for this. Looking to the terms of each executive’s employment agreement, the Court then noted that the non-solicitation provision was clearly intended to be in effect during three relevant time periods: (a) during the three-year term of the employment agreement; (b) during any period of continued employment after the employment agreement expired; and (c) up to two years after the executives left Metalico’s employment.

Since the non-solicitation restrictions were supported by adequate consideration (i.e. initial employment) and were never mutually disavowed by the parties, the Superior Court held that the restrictions remained enforceable – notwithstanding the expiration of the agreements in which they appeared.

It is not uncommon for employees to continue working for a company after their written employment agreements expire. The Metalico case serves as a good lesson as to how to draft restrictive covenants that will survive the expiration of the agreement in which they appear. Another approach taken by many employers is to have employees sign two separate agreements – an employment agreement with a fixed term, and a separate restrictive covenant agreement that remains in effect for the duration of employment and for a fixed period afterward. Regardless of which approach is taken, the Metalico case demonstrates that careful drafting is the key to ensure enforceability.

Most employers take proactive steps to prevent and eliminate workplace harassment. Until recently, courts recognized and rewarded the proactive approach.  Businesses in Pennsylvania, New Jersey and Delaware could avoid liability for hostile work environment claims if they rooted out the problem before it became “severe and pervasive.”

Courts had long held that a single slur, even if highly offensive, was not pervasive and therefore could not trigger employer liability.  The United States District Court for the Middle District of Pennsylvania upheld that standard in Castleberry v. STI Group, a 2015 case involving African American workers who were subjected to a racial slur and threatened with termination in a single incident.  The District Court dismissed the claim.

On appeal, the Third Circuit overturned the District’s ruling.  In doing so, the Court noted that the “plaintiffs alleged that their supervisor used a racially charged slur in front of them and their non-African-American co-workers…Within the same breath, the use of this word was accompanied by threats of termination (which ultimately occurred).”  Under these facts, the Third Circuit held that a single, isolated slur constitutes severe conduct that could create a hostile work environment.

Castleberry is now the law of the land for all Pennsylvania employers (and those in New Jersey and Delaware) who are subject to federal anti-discrimination laws. And it is certainly bad news for employers.  The ruling makes it much easier for a hostile work environment plaintiff to survive summary judgment, leading to increased defense costs and greater potential for a costly verdict.

In light of the Third Circuit’s holding, employers would be wise to take inventory of its anti-discrimination and anti-harassment policies to ensure that they are up to date and prohibit all occurrences of discriminatory harassment. Supervisors and managers should also be made aware that even a single, isolated racial slur can now lead to liability.

We will continue to monitor Third Circuit cases that develop under Castleberry and any updates will be reported here on our blog.

The Pennsylvania Personnel Files Act (also known as the Inspection of Employment Records Law), grants employees in Pennsylvania, or their designated agents, the right to inspect certain portions of their personnel records. The Act requires employers, upon an employee’s request, to permit the employee to inspect the portions of his or her personnel file used to determine qualifications for employment, promotion, additional compensation, termination or disciplinary action.  Employers must make the records available during regular business hours and may require employees to submit a written request form.

Until recently, the right to inspect records even extended to former employees within 30 days following their date of discharge pursuant to a rule adopted by the Pennsylvania Department of Labor and Industry.  However, in Thomas Jefferson University Hospitals, Inc. v. Pa. Department of Labor & Industry, the Pennsylvania Supreme Court held that former employees do not have the right to inspect their personnel records.

Allowing discharged employees and their attorneys to access personnel files prior to litigation afforded them great insight into potential legal claims. This type of access to information was often used in developing a strategy for negotiations, future litigation or deciding which claims to assert.  The discharged employees and their attorneys could weigh how the employer’s articulated reason for termination lined up with (or in some cases did not line up with) what the employer documented in the personnel file.

Now, because of the Supreme Court’s decision, employers can safely refuse to grant discharged employees access to their personnel files.  The background behind the Supreme Court’s decision in Thomas Jefferson University Hospitals is explained below.

At the outset, a former employee filed a request, through her attorney, to view her personnel file just one week after she was discharged. The employer denied this request on the basis that the former employee was no longer employed.  The former employee filed a complaint with the Department of Labor and Industry claiming that the employer wrongfully denied her request for access to her personnel file. Ultimately, the Department granted the former employee’s request to inspect her personnel file.  The employer appealed to the Commonwealth Court.  On January 6, 2016, the Pennsylvania Commonwealth Court issued its decision in Thomas Jefferson University Hospitals, Inc. v. Pa. Department of Labor & Industry, finding a recently discharged employee, was still an “employee” under the Personnel Files Act.

While the definition of employee under the Act (any person currently employed, laid off with reemployment rights or on a leave of absence) appears straightforward, the Commonwealth Court found that the definition did not prohibit a recently terminated individual from obtaining his or her personnel file.  The Court did note that the request must be made contemporaneously with termination or within a reasonable time immediately following termination.  This rationale was based on the 1996 Commonwealth Court decision in Beitman v. Department of Labor & Industry.  In that case, an employee requested access to her personnel file 2 years after her employment was terminated.  The majority of the Commonwealth Court found that the former employee was not permitted to access her file under the Personnel Files Act 2 years after her termination from employment.  However, the Court left open the possibility that discharged employees could access their personnel file when they requested access within a reasonable time following their termination from employment.

Following the Beitman case, the Pennsylvania Department of Labor & Industry adopted a policy that provided former employees access to their personnel files so long as they made the request within a reasonable time after termination from employment, which they determined to be approximately 30 days.  Because of this policy, employers were often required to provide former employees with access to their personnel files even after their termination from employment.

This was the background leading up to the Supreme Court’s decision.   The Supreme Court’s full opinion can be found here.

In contrast to the Commonwealth Court, the Supreme Court took a plain language approach in interpreting the definition of “employee.”  In doing so, the Supreme Court concluded that former employees who were not laid off with re-employment rights and who were not on a leave of absence, have no right to access their personnel file under the Act, regardless of how soon after termination the employee made the request.  The Supreme Court also specifically overruled the Beitman decision stating that the Commonwealth Court’s holding was dicta and not controlling.

While the Supreme Court’s decision is favorable to employers, this a good time to remember the importance of including proper documentation in personnel files. A well-documented personnel file that persuasively demonstrates that an employee was discharged for legitimate, nondiscriminatory reasons will go a long way in supporting an employer’s defenses to a former employee’s legal claims.  After all, while a former employee may not be able to review his or her record pursuant to the Act, he or she may be able to obtain a copy pursuant to a subpoena or discovery request in litigation.

In the Third Circuit, an employer’s honest belief that an employee committed misconduct can now serve as a defense to a retaliation claim under the FMLA.  With the recent decision in Capps v. Mondelez Global, LLC (found here) the Third Circuit joins the Seventh, Eighth and Tenth Circuits in providing such a defense.

In the Capps case, Mondelez (the employer) fired Fredrick Capps (a longtime employee) for what Mondelez believed to be dishonest use of intermittent FMLA leave.  During the time of his employment, Capps suffered from a medical condition that required him to undergo bilateral hip replacement in 2003.  Thereafter, he experienced flare-ups that caused him severe pain, which sometimes lasted for days or weeks at a time. As a result of his condition, Capps requested intermittent FMLA leave to cover his periodic time off work.  Because of his ongoing condition, Capps was recertified for intermittent FMLA leave every six months from 2003 to the end of his employment.

On February 14, 2013, Capps reported that he would not be in to work because he was experiencing pain caused by a flare-up of his condition.  Later that same day, Capps drove to a local pub, where he got something to eat and also had a few beers and shots of alcohol with his friends.  About three hours later, Capps attempted to drive home, but was arrested for Driving Under the Influence of Alcohol (“DUI”) and spent the night in jail.  After being released from jail the next morning, Capps again called off work using intermittent FMLA leave because he said he was experiencing leg pain from his condition.

When Capps returned to work, he did not report his DUI arrest.  However, over the next several months he called off work numerous times and requested intermittent FMLA leave for his condition.  Interestingly enough, during this same time period, Capps was required to attend court hearings and other appointments related to his DUI charge.

On August 7, 2013, Capps pled guilty to the DUI charge and immediately served 72 hours in jail.  When the employer became aware of Capps’ conviction early in 2014, an investigation commenced looking into Capps’ attendance from the time of his DUI arrest to his guilty plea.  This investigation uncovered that Capps’ arrest date and several subsequent court dates corresponded with days that Capps had also used intermittent FMLA leave.  After further investigation, including discussions with Capps himself, it became clear that the documentation Capps submitted did not support his need for FMLA leave on the days that he also appeared in court.

Subsequently, Capps was discharged based on his violation of the company’s Dishonest Acts Policy and misuse of FMLA leave. The termination letter sent to Capps stated: “You claimed to be out due to [ ] FMLA related issues on multiple dates. The documentation you produced does not support your claim of [ ] FMLA related absences.”  After his termination, Capps filed suit claiming, among other things, that the employer retaliated against him for exercising his rights under the FMLA.

After having his FMLA retaliation claim dismissed on summary judgment, Capps’ argued on appeal that the District Court improperly dismissed his claim because the employer was mistaken in its belief that Capps misused his FMLA leave or was otherwise dishonest. However, the Third Circuit affirmed the dismissal of Capp’s FMLA retaliation claim emphasizing that an FMLA retaliation claim requires proof of an employer’s retaliatory intent.  In other words, Capps could not show that the employer’s reasonable belief that he was dishonest and misused his FMLA leave was a pretext for retaliation.

While employers should always proceed with caution before terminating an employee around the time he or she requests, takes, or returns from FMLA leave; the Third Circuit’s adoption of the honest belief defense provides a significant means for employers to defend against FMLA retaliation claims. More specifically, employers that discharge an employee based upon an honest belief that the employee is abusing FMLA leave may now be more likely to prevail on a motion for summary judgement.

To be clear, this case is not a get out of jail free card for employers.  Before the decision is made to terminate, employers must be sure that there is supporting evidence of the employer’s honest belief. In the Capps case, this took the form of a thorough investigation of the employee’s absences along with an opportunity for the employee to explain and support his actions.  Yet, when an employer has supporting evidence and reasonably believes that an employee abused FMLA leave or was otherwise dishonest about the need for such leave, this honest belief will serve as the employer’s defense to a FMLA retaliation claim.

This post was contributed by Erica Townes, a McNees Summer Associate. Ms. Townes is a rising third year law student at the Widener University Commonwealth Law School and is expected to earn her J.D. in May of 2017.

Recently you’ve noticed that an employee takes FMLA-covered leave the same week every year or always seems to have a medical emergency between Thanksgiving and January 1. Similarly, another employee regularly calls out of work requesting FMLA-covered, coincidentally on Fridays during football season. How can employers prevent this type of FMLA leave abuse? Several courts have addressed this issue.

Generally, employers are free to enforce company policies even with respect to employees on FMLA leave, provided that such policies are consistent with the FMLA.  Specifically, company policies cannot conflict with or diminish rights guaranteed under the FMLA.  Accordingly, the Third Circuit, the court of appeals that covers Pennsylvania, has routinely held that employers do not have to forego enforcement their call-in policies simply because an employee is FLMA eligible.

The Third Circuit has upheld an employer’s right to terminate employees for violating other policies while the employee was out on FMLA leave.  While employees may view these call-in policies as burdensome or intrusive, courts have expressly held that, despite the fact that employees have the right to take FMLA leave, employees do not have the right to be left alone when out on leave.

For example, one employer implemented a policy that required employees out on paid sick leave to stay home unless the employee was tending to a personal matter related to the reason they were on sick leave.  The employer further required employees to notify a hotline upon leaving and returning to their home, and if necessary, a sick leave investigator could call or visit the employee while he or she was out on leave.  In that case, the court held that the policy could be applied to an employee who was using FMLA-covered leave concurrently with paid sick leave, and that such application of the policy did not run afoul of the FMLA because nothing in the FMLA prevents employers from ensuring that employees are not abusing their leave.

In another case, an employee took FMLA and paid sick leave concurrently to have an operation done.  Only a few weeks after the operation, the employer learned that the employee had gone on a trip to Cancun, Mexico with friends, and as a result, the employee was terminated.  The employee brought a claim challenging her discharge under the FMLA.  Ultimately, the court held that the employee was bound by the employer’s sick leave and absenteeism policies, emphasizing that the FMLA, in no way, restricted the employer from preventing FMLA fraud.  As such, the discharge was upheld.

The Third Circuit has also held that an employer may enforce a written policy prohibiting moonlighting, or working part-time for a different employer, while the employee is out on FMLA leave.

The lesson learned from these cases is that employers have the right to safeguard against FMLA leave fraud and abuse.  To that end, employers may implement policies to reduce the fraudulent use of FMLA, so long as such policies do not abrogate rights guaranteed to the employee under the Act.

Practice Pointers

In addition to the policies mentioned above, consider the below practice pointers.

  • Consistency.  When handling FMLA leave, consistency is critical.  Providing an exception to the rule out of sympathy may hurt the employer in the long run as a disgruntled employee will use such exceptions against the employer in the future.  As the old adage goes, no good deed goes unpunished.
  • Records.  Maintain accurate records of FMLA leave so that (1) an employee’s FMLA eligibility can be accurately determined and (2) to identify suspicious patterns of absence.
  • Paid Leave.  Consider requiring employees to use paid leave concurrently with, or even before, FMLA leave. An employee will be less inclined to abuse FMLA leave if he or she has to exhaust their on time.
  • Abuse.  Immediately address employees who violate your policies.  Without doing so, employees may later argue that the employer excused the violation.
  • Seek Advice.  If you are still unsure whether you can enforce a particular policy, seek advice from legal counsel.

 

For government employers, disciplining and terminating employees can be especially difficult. Not only does the public employer face the same challenges in complying with the standard alphabet soup of employment laws that private employers do, including the ADA, ADEA, FMLA, Title VII, etc., they also have the complicated task of considering the application of an employee’s Constitutional rights in making employment decisions. Unfortunately, the protections provided by the constitution to government employees don’t rely on the kinds of “immutable” traits often in issue in the alphabet soup context, which means that determining when constitutional rights could be violated is particularly troublesome.

Recently, in Heffernan v. City of Paterson, the United States Supreme Court brought the analysis applicable to First Amendment retaliation claims closer to your typical alphabet soup case in one small way – focusing on the employer’s intent. In a typical discrimination context, the employer’s intent is key when examining the reason given for the action and the circumstantial evidence that may call that stated reason into question. In short, the question is: was it the employer’s intent to discriminate in disciplining an employee, or was it really the employee’s violation of an employer policy?

In the First Amendment context, employer intent is usually irrelevant or assumed; the focus instead is on whether the speech or activity is personal or on a matter of public interest, whether the employee acted as a citizen or an employee, and how the speech or activity could harm the government’s interests. Heffernan, however, presented the unique situation where the employee contended he didn’t intend to speak or act at all, but the employer punished him for its perception that he had. The Court therefore faced the following question: whose intent is more significant in the constitutional rights context? The Heffernan Court found that it is the employer’s intentions that are critical to determining whether there has been a violation of the employee’s rights.

In reaching this decision, the Court considered the following facts: Jeffrey Heffernan was employed as a police officer for the City of Paterson in 2005 under Chief of Police James Wittig. Both the Chief and Heffernan’s direct supervisor had  been appointed to their positions by the Mayor, who was running for reelection. During the campaign, Heffernan’s colleagues spotted him at campaign headquarters talking with campaign workers and holding a campaign sign for the Mayor’s opponent, who was a known friend of Heffernan. When word reached his supervisors, Heffernan was demoted from a detective position to a patrol officer position, and given an undesirable patrol post, allegedly to punish his involvement in the opposition’s campaign.  Heffernan denied being involved in the campaign, and denied supporting the candidate, stating that he was only picking the sign up for his mother, who was bedridden and could not do it for herself.

In response to his demotion, Heffernan filed a lawsuit against the City contending that he had been demoted because the City believed he engaged in conduct that constituted protected activity, even though he denied that he had intended to speak or act.

Prior case law is very clear that government employers are prohibited from making an employment decision because an employee supports a particular political candidate. However, Heffernan was contending that he didn’t actually support the oppositional candidate, but the City mistakenly believed he did. The City’s position in the litigation was that, since he hadn’t intended to engage in protected activity, his activity wasn’t protected…and its demotion decision could therefore only violate his rights if in fact he actively supported the candidate.

Ultimately, the Court concluded that “the government’s reason for demoting Heffernan is what counts…When an employer demotes an employee out of a desire to prevent the employee from engaging in political activity that the First Amendment protects (even if the employee did not intend to engage in that activity), the employee is entitled to challenge that unlawful action under the First Amendment…” Whether the employer has correctly or incorrectly deduced the employee’s motives in engaging in particular behavior, the Court opined that the same constitutional harm would result – an employee would be demoted or terminated for appearing to engage in protected activity, thereby discouraging other employees from engaging in what should be protected activity. Because the harm would result regardless of the accuracy of the employer’s belief, the employer’s reason for the employment action must govern in determining if a First Amendment cause of action and violation exists.

Unfortunately for Heffernan, his fight with the City will continue on, as the Supreme Court did not reach the ultimate question of whether his rights had been violated. To the contrary, the Court’s decision remanded the case back to the trial court to determine whether or not Heffernan’s demotion occurred pursuant to an existing neutral policy prohibiting police officers from overt involvement in any political campaign, and whether such a policy complies with constitutional standards generally.

The immediate take-away for government employers and elected officials (and the HR personnel who love them), in light of the Heffernan decision should be on the reinforcement of what we know already from other employment discrimination cases: we must examine the reason for an employment decision before it is made to ensure there is  no protected classification or protected activity motivating the decision. Even if the employer is  wrong about what the employee intended by his actions, a decision motivated by an intent to punish what would otherwise be protected activity could violate the constitution.

In a recent opinion, the Pennsylvania Superior Court upheld a judgment in favor of a healthcare employee that alleged wrongful termination of employment following her repeated refusal to work mandatory overtime. The judgment included damages of $121,869.93 and an order reinstating the employee to her former position. The Court’s opinion focused on the question of whether an employer’s violation of Act 102 can form the basis of a wrongful termination action. The Court answered that question affirmatively in the case of Roman v. McGuire Memorial.

Pennsylvania’s Act 102, the Prohibition of Excessive Overtime in Healthcare Act, generally provides that a covered health care facility may not require an employee to work in excess of a predetermined and regularly scheduled work shift. This prohibition is aimed at limiting situations where employees of covered health care facilities are “mandated” to work overtime with little or no advance notice. Health care facilities covered by Act 102 include most hospitals and long-term care facilities.

In this case, the employee alleged that she was terminated after her fourth refusal to work overtime mandated by her employer, a covered healthcare facility. The employer had a policy in place requiring direct care workers to work mandatory overtime. The employee claimed that she informed her employer that she could not accept mandatory overtime due to child care responsibilities. She also claimed that she informed her employer that the policy of mandating overtime was in violation of Act 102. After she was terminated, the employee filed a lawsuit claiming wrongful termination in violation of Act 102’s prohibition on mandatory overtime.

Although Act 102 generally prohibits retaliation against an employee for refusal to accept overtime mandated in violation of it, the law does not provide for a specific right to file a lawsuit. Instead, Act 102 contemplates administrative penalties to be enforced by the Pennsylvania Department of Labor and Industry.

The employer argued that because the statute had defined how the act would be enforced it could not also form the basis of  a private cause of action for wrongful termination. The Pennsylvania Superior disagreed, holding instead that Act 102 could form the basis of a wrongful termination claim because it did not specifically provide for an exclusive remedy.

At the core of the Court’s decision is the ever evolving concept of at-will employment and the recognized exceptions to it. Although an employee at-will, the employee successfully argued that her termination was wrongful because it violated a clear public policy of the Commonwealth prohibiting excessive mandatory overtime as set forth in Act 102. Pennsylvania employers should recognize that while the doctrine of “at-will” employment is still alive and well, the exceptions to it are many and growing. Termination of an employee that asserts a right protected by law is often enough to support a claim of wrongful termination.

According to a recent announcement by the Office of UC Service Centers, employers in Pennsylvania can expect that telephone calls will now be part of the state’s fact-finding process in connection with initial eligibility determinations for unemployment compensation benefits.

In the past, when a former employee filed a claim for UC benefits, the employer received a written form questionnaire issued by the local Service Center seeking the information needed to make an initial eligibility determination (such as the nature of and reasons for the claimant’s separation from employment).  According to the announcement, Service Center claims examiners will now call employers to request this information over the phone. It appears, however, that an employer still may elect to provide most of the information relevant to the initial eligibility determination in writing.  An employer who chooses not to participate in telephone fact-finding will be expected to inform the examiner of the nature of the separation and provide an email or fax number to which written fact-finding requests can be sent.  In addition, it is the employer’s responsibility to ensure that its response is complete and provided in a timely manner.

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Separately, it is important to keep in mind that whether the response is provided by phone or in writing, by law an employer’s UC reserve account will be charged for claimant overpayments resulting from a failure to respond or an inadequate or untimely response.  An employer’s response to a request for information in connection with a UC claim will be considered untimely if not provided within the response time allotted (14 days) and inadequate if “the response misrepresents or omits facts that, if represented accurately or disclosed” would have been the basis for denying benefits.

Other than the announcement itself, there does not appear to be any additional information available at this time concerning the intention of state UC authorities to move toward telephone and away from paper based fact-finding at the initial stage of the process. Even so, at the very least employers should expect to receive telephone calls from local UC Service Centers requesting employment and separation information in connection with UC claims. While it should go without saying that truthfulness and cooperation are always recommended when providing information to the state in response to UC claims, the exercise of caution is also warranted when the circumstances involve former employees/separations that are complex, adversarial, or otherwise problematic. In these cases, it is best that the employer ask for the opportunity to provide a written response. Providing a prepared written response versus an immediate/on-the-spot verbal response is likely to reduce the margin for error and enhance the effectiveness of the response.

Contact any of the attorneys in the McNees Labor & Employment Practice Group if you have a question about this post or need assistance with evaluating, responding to, or contesting UC claims.