Thursday, January 27, 2011

"Marital Status" As A Protected Class Under the PA Human Relations Act? Maybe.

On January 26, 2011, Senate Bill 280 was introduced into the Pennsylvania General Assembly, which would amend the Pennsylvania Human Relations Act (PaHRA) to prohibit discrimination, including employment discrimination, on the basis of an individual's "marital status." The proposed bill defines "marital status" as referring to whether an individual is "single, married, divorced, separated or widowed."

If S.B. 280 is passed, all of the employment practices that the PaHRA currently prohibits with respect to race, color, religious creed, ancestry, age, sex, national origin, handicap or disability, would be extended to reach one's "marital status," as well. This would mean that an employer would be prohibited under the PaHRA from: (1) refusing to hire an individual because of his/her marital status; (2) firing an individual because of his/her marital status; (3) otherwise discriminating against an individual because of his/her marital status; (4) inquiring into an employee's, or prospective employee's, marital status; and (5) asking questions about an individual's marital status on any application for employment, just to name a few.

And, given the fact that the courts in Pennsylvania have traditionally employed identical analyses when interpreting the provisions of Title VII and the PaHRA, one wonders whether this proposed addition would also permit a claim for hostile work environment based upon one's marital status? So, as a "head's up" to any married men (or women) out there who work in an office full of bachelors (or bachelorettes) who are forced to listen to constant stories of wild singles parties, drunken weekend "conquests" and happy-hour strip-club campaigns, keep an eye on this legislative gem - you may actually find yourself being a member of a "protected class" before too long.

You can read the full version of S.B. 280 by going to the PA General Assembly website at by going to the PA General Assembly website at http://www.legis.state.pa.us/index.cfm

Wednesday, January 26, 2011

Bill To Raise State Minimum Wage Introduced in PA Senate

On January 24, 2011, Senate Bill 235 of 2011 was introduced in the PA State Senate, which calls for an annual cost-of-living increase in the state minimum wage beginning on January 1, 2012 and continuing every January 1 thereafter. The amount of the cost-of-living increase would be calculated by applying the percentage change in the Consumer Price Index for all Urban Consumers in Pennsylvania, New Jersey, Delaware and Maryland, using the most recent 12-month period figures that have been officially submitted to the U.S. Department of Labor, Bureau of Labor Statistics. S.B. 235 also provides that the Secretary of Labor and Industry would be responsible for setting the actual percentage increase and the minimum wage amounts each year.

Pennsylvania's Minimum Wage was last increased in 2009 and is currently $7.25 per hour, equivalent to the Federal Minimum Wage.

S.B. 235 was introduced by State Senator Christine Tartaglione (D-Philadelphia) and other sponsors. You can read the full text S.B. 235 by going to the PA General Assembly website at http://www.legis.state.pa.us/index.cfm

Tuesday, January 25, 2011

U.S. Supreme Court - Government Employers May Ask "Reasonable Questions" in Employment Background Investigations

On January 19, 2011, in the case of NASA v. Nelson, et al., the U.S. Supreme Court held that governmental employers are permitted to ask "reasonable questions," during employee background investigation checks without running afoul of employees' constitutional privacy rights.

This case concerned an employee background check process employed by NASA, consisting of two questionnaire forms. The first asked whether an employee had "used, possessed, supplied, or manufactured illegal drugs in the last year," and if so, then required the employee to describe the details of any "treatment or counseling received." Employees were also required to sign a release authorizing the Government to obtain personal information about employees from schools and past employers. The second form then asked open-ended questions about whether NASA had "any reason to question," an employee's "honesty or trustworthiness," or whether an employee had "adverse information," concerning an employee's "violations of the law," "financial integrity," "abuse of alcohol and/or other drugs," "mental or emotional stability," "general behavior or conduct," and "other matters." If an employee checks "yes" to any of those categories, the form required a further written explanation.

Various NASA employees sued, claiming that NASA's subjecting them to this employment background check process violated their constitutional right to "informational privacy." The District Court refused the employees' request for a preliminary injunction, but the Ninth Circuit Court of Appeals reversed, holding that with respect to the first form, NASA's requirement that an employee disclose drug treatment and counseling furthered no legitimate government interest and was thus likely unconstitutional. With respect to the second form, the Ninth Circuit determined that the open-ended questions asked by NASA were not narrowly tailored to meet the government's interests in verifying the employees' identities, and thus, likely violated the employees' constitutional rights.

In granting certiorari, the U.S. Supreme Court had the opportunity, for the second time in two years, to address the available breadth of privacy rights that may, or may not, be held by individuals who are employed in the public sector. One year ago, the Supreme Court had a similar opportunity in City of Ontario v. Quon, 130 S. Ct. 2619 (2010), which concerned whether a SWAT officer had a reasonable expectation of privacy in the content of text messages he had sent over a city-issued pager. In Quon, however, the Supreme Court specifically avoided any issues concerning employee privacy rights under the Fourth Amendment, but instead opted to resolve the case by holding that any search of the officer's text messages conducted by the City was reasonable, and thus, could not be a violation of the Fourth Amendment. For a thorough analysis of this case, see my earlier post entitled "U.S. Supreme Court Side-Steps Questions of Employee Privacy in Electronic Communications," from June 18, 2010..

In Nelson, however, the Supreme Court took the same tack as it did in Quon and once again avoided discussion concerning the thorny issues involving the privacy rights of public employees in the workplace. Instead, the Court stated that "we will assume for present purposes that the Government's challenged inquiries implicate a privacy interest of constitutional significance." That being said, however, the Court then proceeded to overrule the decision of the Ninth Circuit, and held that "whatever the scope of this [privacy] interest, it does not prevent the Government from asking reasonable questions of the sort included on the [NASA forms] in an employment background investigation that is subject to the [federal] Privacy Act's safeguards against public disclosure."

In so holding, the Supreme Court reaffirmed the long-standing tenet that "the Government has a much freer hand in dealing with citizen employees than it does when it brings its sovereign power to bear on citizens at large." The Court also recognized that the types of questions being challenged in this case were "part of a standard employment background check of the sort used by millions of private employers," that "the Government itself has been conducting employment investigations since the earliest days of the Republic," and that "[s]tandard background investigations similar to those at issue here became mandatory for all candidates for the federal civil service in 1953." As such, the Court recognized that the federal government has an interest in performing background checks on its employees and that "[r]easonable investigations of applicants and employees aid the Government in ensuring the security of its facilities and in employing a competent, reliable work-force."

The Court rejected out of hand the employees' claims that the Government's broad authority in regulating and managing its affairs should not apply with as great a force to them, as they were "contract employees," not civil servants. The Court found this argument placed form over substance, holding that "the Government's interest as 'proprietor' in managing its operations . . . does not turn on such formalities," and noting that on the record before it, there was no relevant distinctions between the duties performed by NASA's civil servants and its contract employees.

Against this back-drop, the Court held that the questions asked by NASA on the two employment background check forms were "reasonable, employment-related inquiries that further the Government's interests in managing its internal operations." Specifically, the Court noted that the Government has a "good reason to ask employees about their recent illegal-drug use," namely, to ensure that it will have its "projects staffed by reliable, law-abiding persons who will efficiently and effectively discharge their duties." With this legitimate purpose, the Court determined that the form's follow-up questions concerning any treatment or counseling for illegal-drug use was also a reasonable method by which the Government could separate out those individuals who have taken steps to address and overcome their illegal drug problems, and use this as a mitigating factor in making employment decisions. In the Court's words, this "is a reasonable, and indeed humane, approach. . ."

The Supreme Court also rejected outright the employees' argument that the Government "when it requests job-related personal information in an employment background-check, has a constitutional burden to demonstrate that its questions are necessary or the least restrictive means of furthering its efforts."

The Court also held that the open-ended questions that so troubled the Ninth Circuit Court of Appeals, were in fact "reasonably aimed at identifying capable employees who will faithfully conduct the Government's business," and similar in type and scope to employment background questions frequently used by employers in the private sector.

Lastly, the Court recognized that any privacy interests held by the employees here were further protected by the fact that the NASA forms were governed by the federal Privacy Act, which allows the Government to maintain records about an employee "only to the extent the records are relevant and necessary to accomplish a purpose authorized by law," and requires "written consent before the Government may disclose records pertaining to any individual."

Therefore, in light of the Privacy Act's nondisclosure requirements, coupled with the fact that the questions posed on the two NASA forms "consist of reasonable inquiries in an employment background check," the Court held that NASA's background process did not violate any "constitutional right to informational privacy."

In a notable concurring opinion, Justice Scalia (joined by Justice Thomas), stated that he would have decided the case "on simpler grounds." Specifically, that "[a] federal constitutional right to 'informational privacy' does not exist." This concurrence may be a gloomy portent of how the Supreme Court may examine the issue of public-employee privacy rights in electronic communications when, and if, the Court ever decides to take it up.

You can read the full version of the Court's opinion here: http://www.supremecourt.gov/opinions/10pdf/09-530.pdf

U.S. Supreme Court Recognizes Third-Party Retaliation Claims Under Title VII

On January 24, 2011, the U.S. Supreme Court held, in the closely-watched case of Thompson v. North American Stainless, LP that Title VII's anti-retaliation provision permits "third-party retaliation claims."

Prior to 2003, Eric Thompson and his fiance, Miriam Regalado were employees of North American Stainless (NAS). In February of 2003, NAS was notified by the EEOC that Regalado had filed a charge alleging sex discrimination. Three weeks later, Thompson was fired by NAS.

Thompson then filed his own charge with the EEOC, claiming that NAS had terminated him in order to retaliate against Regalado for her filing a sex discrimination charge with the EEOC. The district court dismissed Thompson's claim, holding that Title VII did not permit third-party retaliation claims. The Sixth Circuit, after a rehearing en banc, affirmed the dismissal of Thompson's claim, holding that he had not engaged in any statutorily protected conduct under Title VII.

On appeal, the Supreme Court reversed, and held that Thompson has a viable retaliation claim under Title VII. First, the Court noted that "we have little difficulty concluding that if the facts alleged by Thompson are true, then NAS's firing of Thompson violated Title VII." The Court reaffirmed that "Title VII's antiretaliation provision must be construed to cover a broad range of employer conduct," and that this provision "prohibits any employer action that might well have dissuaded a reasonable worker from making or supporting a charge of discrimination." Given this basis, the Court stated that "[w]e think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired."

While recognizing that third parties are protected from retaliation under Title VII, the Court refused "to identify a fixed class of relationships for which third-party reprisals are unlawful," but re-emphasized that the standard for judging harm under the anti-retaliation provision "must be objective."

The more difficult question facing the Court was whether Thompson had standing to sue NAS within Title VII's category of a "person claiming to be aggrieved." First, the Court specifically rejected the argument that Title VII's "person claiming to be aggrieved," language automatically grants any individual who suffers harm under Title VII Article III standing in every instance. But, the Court also rejected NAS's opposite argument that Title VII's "person claiming to be aggrieved," language refers only to the employee who is engaged in the protected activity. As such, the Court settled on a middle-ground approach and adopted the "zone of interests" test that has been applied to determine whether a person "adversely affected or aggrieved," has Article III standing to sue under the Administrative Procedure Act. This test states that a plaintiff may not sue unless he/she "falls within the zone of interests sought to be protected by the statutory provision whose violations forms the legal basis for his complaint." The Court described this test as prohibiting Article III standing "if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit."

Applying this test to Thompson, the Court had little trouble concluding that Thompson fell within the "zone of interests" protected by Title VII. Specifically, Thompson was an employee of NAS and Title VII is meant to protect employees from employer's unlawful actions. The Court also noted that Thompson was not "an accidental victim of retaliation - collateral damage, so to speak, of the employer's unlawful act. To the contary, injuring him was the employer's intended means of harming Regalado. Hurting him was the unlawful act by which the employer punished her." As such, the Court found that Thompson was "well within the zone of interests sought to be protected by Title VII," and permitted his claim to proceed.

You can read the full version of the Supreme Court's opinion here: http://www.supremecourt.gov/opinions/10pdf/09-291.pdf

Superior Court Decision Reveals Legal Discord Over Claims of Intentional Inference With Contractual Relations By At-Will Employees

In the non-precedential decision of Haun v. Community Health Systems, Inc., et al., No.: 2350 EDA 2009 (PA Super. 12/20/2010), the Pennsylvania Superior Court affirmed a ruling by the trial court, which dismissed an at-will employee's claims for intentional interference with contractual relations. The dissenting opinion, however, shows that this area of Pennsylvania law is still arguably unsettled.

By way of backgroun, Richard Haun served as the Chief Financial Officer at Phoenixville Hospital from June, 2007 until November 12, 2008. Haun was an at-will employee in his position as CFO.

On August 23, 2007, Haun's wife gave birth to premature twins at Phoenixville Hospital. The twins were taken to the Neonatal Intensive Care Unit at Phoenixville Hospital, and while in the Unit, one of the twins became disconnected from an IV line. This caused extensive blood loss to the baby, which in turn, resulted in severe and irreversible injury to the baby's central nervous system.

Shortly thereafter, Haun and his wife filed a medical malpractice suit against Phoenixville Hospital, its corporate parents and a number of the doctors and nurses of Phoenixville Hospital.

Five days after being served with the suit, the Interim President for the corporate hospital defendants sent an email to the CEO of Phoenixville Hospital, instructing the CEO to have a discussion with the Chief Counsel for the corporate hospital defendants about the possibility of terminating Haun's employment. On November 12, 2008, the CEO of Phoenixville Hospital and the Phoenixville Hospital Human Resources Director met with Haun and informed him that he was being fired from the hospital because he was "an adversary of the company and it's too much risk." Haun was then immediately escorted from the building and was denied the opportunity to collect his personal effects.

After being fired from Phoenixville Hospital, Haun filed a second suit against the Hospital and its corporate parents, alleging, among other claims, wrongful termination in violation of public policy and intentional inference with contractual relations. The corporate defendants filed objections seeking dismissal of his intentional interference claim, arguing that Pennsylvania law does not recognize such a cause of action for a current at-will employee. (The defendants also filed an objection seeking to dismiss Haun's wrongful termination claim, which was denied by the trial court and affirmed on appeal. For a full discussion of this claim, see my previous post).

The trial court dismissed Haun's claim, and on appeal, this decision was affirmed by the Superior Court.

Specifically, the Superior Court looked to its previous panel decision in Hennessy v. Santiago, 708 A.2d 1269 (Pa. Super. 1998), which held that an at-will employee may not sue a third-party for intentional interference with an existing at-will employment contract. Rather, the Hennessy Court held that a cause of action for intentional interfence exists only with respect to prospective at-will employment relationships, not with presently existing at-will employment relationships. Therefore, relying upon the Hennessy decision, the Superior Court in this case upheld the dismissal of Haun's claim, noting that he was clearly a current at-will employee at the time of his termination.

The dissenting opinion, however, raises a compelling argument that the Hennessy decision was wrongly decided, as being in conflict with previous Superior Court decision. First, the dissent noted that in the prior case of Curran v. Children's Service Center, 578 A.2d 8 (Pa. Super. 1990), another panel of the Superior Court unequivocally held that "a cause of action for intentional interference with a contractual relationship may be sustained even though the employment relationship is at-will." And, having been decided before Hennessy, the dissent reasoned that Curran was the correct statement of the law and should be followed.

Additionally, the dissent notes that the decision in Curran relied upon Comment g of Section 766 of the Restatement (Second) of Torts, which explicitly addresses contracts that are terminable at-will. Moreover, the Pennsylvania Supreme Court expressly adopted Section 766 in Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466 (Pa. 1979). Comment g states that an at-will employee has an interest in future relations between the employee and the employer, but has no legal assurance of them. For that reason, an interference in that interest would be closely analogous to interference with prospective contractual relations - a cause of action that has already been recognized and sanctioned for at-will employment in Pennsylvania. The dissent noted that the Hennessy Court failed to address either Section 766, Comment g, or the Curran decision, and as such, its reasoning should be viewed circumspectly.

The Pennsylvania Supreme Court has not yet rendered a decision addressing whether an at-will employee may maintain a claim for intentional interference with contractual relations against a third-party. But, the dissent in Haun sets forth a compelling argument that emphasizes the apparent lack of decisional consistency and clarity from the Superior Court on this issue. In such cases, it is usually only a matter of time before the Supreme Court recognizes the need to step in and settle the law. Hopefully, we will see a decision by the Supreme Court on this issue sooner rather than later.

Superior Court Allows Claim For Wrongful Discharge By Former Hospital Executive

In the non-precedential decision of Haun v. Community Health Systems, Inc., et al., No.: 2350 EDA 2009 (PA Super. 12/20/2010), the Pennsylvania Superior Court affirmed and adopted the decision of the trial court, which refused to dismiss a wrongful discharge claim filed by a former hospital executive.

Richard Haun served as the Chief Financial Officer at Phoenixville Hospital from June, 2007 until November 12, 2008. Haun was an at-will employee in his position as CFO.

On August 23, 2007, Haun's wife gave birth to premature twins at Phoenixville Hospital. The twins were taken to the Neonatal Intensive Care Unit at Phoenixville Hospital, and while in the Unit, one of the twins became disconnected from an IV line. This caused extensive blood loss to the baby, which in turn, resulted in severe and irreversible injury to the baby's central nervous system.

Shortly thereafter, Haun and his wife filed a medical malpractice suit against Phoenixville Hospital, its corporate parents and a number of the doctors and nurses at Phoenixville Hospital.

Five days after being served with the suit, the Interim President for the corporate hospital defendants sent an email to the CEO of Phoenixville Hospital, instructing him to have a discussion with the Chief Counsel for the corporate hospital defendants about the possibility of terminating Haun's employment. On November 12, 2008, the CEO of Phoenixville Hospital and the Phoenixville Hospital Human Resources Director met with Haun and informed him that he was being fired from the hospital because he was "an adversary of the company and it's too much risk." Haun was then immediately escorted from the building and was denied the opportunity to collect his personal effects.

After being fired from Phoenixville Hospital, Haun filed a second suit against the Hospital and its corporate parents, alleging, among other claims, wrongful termination in violation of public policy. The corporate defendants filed objections seeking dismissal of this claim, arguing that Haun had failed to plead any recognized public policy exception to Pennsylvania's employee at-will doctrine.

The trial court overruled this objection, holding that Haun had established a good-faith argument that his dismissal violated public policy. Specifically, the trial court found that the public policy of Pennsylvania favors allowing the victims of medical malpractice to seek adequate compensation and also favors parents asserting legal claims on behalf of their children. The trial court held that these precepts supported Haun's allegations that his termination for assisting his child in seeking compensation for alleged medical malpractice violated a clear mandate of public policy.

On appeal, the Superior Court agreed with the reasoning and analysis of the trial court, and adopted the trial court's discussion of this issue as its own.

Wednesday, January 12, 2011

Haverford Township Anti-Discrimination Law Passes First Procedural Hurdle

On Monday, January 10, the Board of Commissioners of Haverford Township, Delaware County, PA narrowly approved a first reading of a controversial anti-discrimination ordinance, which if passed, would prevent employment discrimination (as well as discrimination in housing, public accommodation and commercial property) within the Township based not only upon race, color, religion, sex, nationality and disabilities, but also upon sexual orientation. Employment discrimination on the basis of sexual orientation is currently not protected under either the Pennsylvania Human Relations Act or Title VII. The ordinance would also establish a local human relations commission of volunteer citizens, which would be authorized to mediate claims and the power to impose fines up to $10,000.00 and award attorneys fees.

Read the full story from the Delaware County Daily Times here: http://www.delcotimes.com/articles/2011/01/12/news/doc4d2d20d058351959102883.txt?viewmode=default