Tuesday, January 25, 2011

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In the non-precedential decision of Haun v. Community Health Systems, Inc., et al., No.: 2350 EDA 2009 (PA Super. 12/20/2010), the Pennsylvania Superior Court affirmed a ruling by the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.