By Thomas P. Donnelly, Esquire Reprinted with permission from the May 29, 2015 issue of The Legal Intelligencer. (c) 2015 ALM Media Properties. Further duplication without permission is prohibited.
Confidentiality agreements have become commonplace in commercial litigation. The purpose of a confidentiality agreement as the protection from disclosure of either private personal or sensitive business information which gives a party a competitive advantage is certainly a noble one and one which mandates an agreement against such disclosure in a wide variety of circumstances. Often, the parties seek the imprimatur of the court by requesting the court adopt the agreement of the parties as an order thereby incorporating the court’s power to impose sanctions in the event of breach. The entry of such an order, whether intentionally or as an unintended consequence, may change the nature of a third party, foreign to the dispute with respect to which the confidentiality order was entered, to obtain information produced in the prior litigation.
Federal law (Title VII of the Civil Rights Act of 1964) prohibits, among other matters, a covered employer, from discriminating against an employee because of such individual’s sex. Generally, a private employer with 15 or more employees, engaging in interstate commerce, is covered by Title VII. The Pregnancy Discrimination Act (PDA) passed in 1978, added discrimination based on “pregnancy, childbirth, or related medical conditions” to this prohibition.
The PDA also provides that employers are required to treat “women affected by pregnancy… the same for all employment-related purposes … as other persons not so affected but similar in their ability or inability to work” .
In the recent case of Young v. UPS, the Supreme Court, in interpreting the provision above, announced a new test for analyzing pregnancy discrimination claims. The relevant facts of the case are as follows:
Plaintiff Young worked as a part-time driver for defendant United Parcel Service (UPS). Her duties included pickup and delivery of packages. While employed by UPS she became pregnant and was told by her doctor that she should not lift more than 20 pounds during her first 20 weeks of pregnancy and no more than 10 pounds thereafter. Drivers in Young’s position were required to lift up to 70 pounds. UPS therefore advised Young that she could not work while under a lifting restriction. As a result Young remained home without pay during most of her pregnancy and ultimately lost her employee medical coverage.
By Patricia C. Collins, Esquire, Reprinted with permission from the March 23, 2015 issue of The Legal Intelligencer. (c) 2015 ALM Media Properties. Further duplication without permission is prohibited.
Recently, the United States District Court for the Eastern District of Pennsylvania, in Mathis v. Christian Heating and Air Conditioning, Inc., 13-3747 (March 12, 2015), examined the effect of factual findings in unemployment compensation proceedings in Pennsylvania on discrimination claims filed in federal court. The conclusion? The discrimination case is a “do over,” and nothing determined by the tribunal (including the Unemployment Compensation Board of Review and the Commonwealth Court) will collaterally estop either party, presumably, from taking a contrary position in the subsequent wrongful termination suit.
The facts are these: Mr. Mathis was employed at Christian Heating and Air Conditioning (“Christian Heating”) for nearly two years. During that time, Mr. Mathis had placed black tape over part of his identification badge. The objectionable part of the card professed the company’s mission statement to, inter alia, run the business in a way that was “pleasing to the lord [sic]….” Mr. Mathis’s supervisor and the owner of the business required him to remove the tape from the back of his badge. Mr. Mathis refused to do so, and contended that he was terminated as a result.
By Thomas P. Donnelly, Esquire, Reprinted with permission from the November 24, 2014 issue of The Legal Intelligencer. (c) 2014 ALM Media Properties. Further duplication without permission is prohibited.
I do not generally characterize myself as a fan of arbitration. While proponents argue arbitration is a superior form of dispute resolution and more efficient than litigation, my personal experience in the representation of privately held businesses and individuals is otherwise. In many situations, the sheer cost to initiate an arbitration proceeding may be prohibitive. For a claimant, even if that initial cost is not an effective deterrent, the budget of ongoing hourly fees required of a qualified arbitrator in addition to the parties’ own anticipated legal fees, can quickly impair the potential recovery. For a Respondent, many times the cost of proceeding was not considered at the time of execution of an agreement which compels arbitration; thus the obligation to make payment for a service technically rendered by the courts without cost comes as a surprise. In either case, the parties must realize that at arbitration each is compensating not only its own lawyer, but, at least partially, another lawyer and a private dispute resolution industry as well. While arguably profitable for the legal profession, the realities of proceeding can result in difficult client discussions.
The above being said, there are situations where arbitration clauses can be of substantive, procedural and, consequently, financial benefit. In such cases, even a skeptic of arbitration must recognize the benefits of the bargained for exchange which is an arbitration agreement. Under the current state of the law, and given the trends in the enforcement of the right to contract, a carefully considered and artfully drafted arbitration agreement can be an essential aspect to certain business relationships and an important term of negotiation.
Employers should almost always include the broadest possible arbitration clause in any employment agreement and, generally, as a term of employment. In most cases, an action arising in an employment situation concerns a claim raised by an employee, or worse, a class of employees against the employer. The employer is generally a defendant. In such cases, arbitration clauses can serve several functions. First, an employee initiating the action must satisfy the initial fee if mandated by the prevailing agreement. As such fees are often determined by the amount at issue, the larger the claim, the higher the fee, and the greater deterrent toward commencement of the action. As of November 1, 2014, the filing fee for the commencement of an American Arbitration Association claim involving more than one million but less than ten million dollars was $7,000.00. Note there is no refund of the filing fee should the matter resolve. Certainly, the requisite fee is a deterrent to the filing of a border line claim, but could also be a deterrent to a claimant’s joinder of additional even less viable claims which include different damage components. Under any circumstances, the employee faces an early branch to the decision tree.
The flexibility of arbitration clauses within employment agreements may prove even more critical. With careful drafting, an employer can effectively insulate itself from certain employment related class actions. In Quillion v. Tenet HealthSystem Philadelphia, Inc. the United States Court of Appeals for the Third Circuit compelled arbitration of a Fair Labor Standards Act claim and, more importantly, declined to strike down a provision of an employment agreement requiring such claims be brought on an individual basis precluding proceedings as a class. The Quillion Court indicated that such a class action waiver was consistent with the Federal Arbitration Act and suggested in the strongest of terms that Pennsylvania’s preclusion of class action waiver in the employment context was preempted by Federal Law. Certainly, the equities of any such situation, including preservation of remedies and additional recovery of fees and costs are important to the court’s inquiry, but the current trend is to support the rights of the parties to contract, even to their own peril.
The flexibility of the arbitration agreement also allows for exclusions from the scope and reservation of certain matters for litigation. Matters of equity such as enforcement of restrictions against competition or solicitation can be reserved for the courts, thereby preserving immediate access to judicial process for enforcement of employer remedies. Interestingly, the reverse may not necessarily be true. The Montgomery County Court of Common Pleas recently dismissed a complaint for declaratory judgment seeking a judicial determination voiding certain restrictions against competition determining that such equity claim was within the scope of the arbitration agreement and, therefore, for the arbitrator to decide.
Arbitration also plays a vital role in the ever broadening world economy. In 2014, international business is the norm rather than the exception. The courts of the United States and the signatories to the New York Convention on Arbitration have routinely enforced arbitration clauses establishing the parameters of dispute resolution as consistent with the parties’ right to contract. Critically, the arbitration clause can protect a company operating in this country from the many pitfalls, incremental expenses and inconsistencies of litigating in a foreign country or even against a sovereign nation in its own judicial system by selecting a choice of law and a situs of the arbitration proceeding. Such forum selection also provides a certain substantive component not only as to applicable law, but also in the qualification of fact finders as the roles of qualified arbitrators available for commercial disputes continue to grow. Finally, arbitration may be preferable to litigation in the United States District Courts as the parties may be granted greater flexibility and input to the development of the schedule of proceedings rather than subject to the rule of the federal judge, who may or may not be familiar with often complex substantive issues. Finally, arbitration may also be preferable in any relationship where confidentiality is key. In some cases, the simple fact of a public filing is of concern. In many others, the factual allegations of a complaint, even if eventually proven unfounded, can be damaging. While an arbitration clause cannot prevent a claimant from filing an initial public complaint in court, an enforceable arbitration clause can bring an abrupt end to the public aspect of the dispute.
The courts remain the preferred forum for dispute resolution in many circumstances. However, with the growing trend of contract enforcement to the terms of arbitration agreements even a skeptic must admit that the inclusion of an arbitration clause in certain circumstances can provide a substantive advantage and dramatically impact the landscape of dispute resolution to your client’s benefit.
A recurring issue employers must address is the enforceability of restrictive covenants entered into with an employee. These restrictive covenants are typically non-disclosure (confidentiality), non-solicitation, and/or non-competition agreements. The timing, form, and substance of these agreements will determine whether a court will find them valid. From a former employee’s perspective, the issue is basically the same but reversed: can the employee disregard a previously signed restrictive covenant without being liable for monetary damages to his former employer (and if newly employed at another company, keeping the second company out of litigation)?
Two cases recently decided by the Pennsylvania Superior Court provide guidance for employers and employees:
Fleisher v. Bergman, concerned an employee who was hired as a full-time employee. At the time of his hire, employee signed a restrictive covenant which was a confidentiality and non-competition agreement. The restrictive covenant provided that employee would not divulge any “Confidential Information” (e.g., customer lists, pricing policies, names of vendors) to other parties without the consent of employer; the Agreement further mandated that for a period of five years after termination of his employment, employee would not “. . . solicit or do business with any . . . entity . . . that was, within the three year period preceding the Employee’s termination, a Client or Prospect of Employer... ”
By William T. MacMinn, Esquire Reprinted with permission from the July 28, 2014 issue of The Legal Intelligencer. (c) 2014 ALM Media Properties. Further duplication without permission is prohibited.
As the world becomes increasingly globalized, lawyers are more than ever involved in litigating matters for or against people and organizations that are involved in disputes within the United States, but are located in foreign jurisdictions. In these circumstances, domestic practitioners likely will need to obtain evidence from sources located in foreign nations with which they have little prior professional experience. For those attorneys who seldom encounter an international issue, conducting discovery abroad can be both confusing and overwhelming, but a brief review of some of the sources governing the process can help alleviate any anxiety associated with pursuing an international claim.
Several methods exist to conduct discovery outside of the United States. In Pennsylvania the options include the following: 1) a deposition on notice before a person authorized to administer oaths in the place where a deposition is to be held either by local law or United States law (Pa.R.C.P. 4015(b)(1)); 2) a deposition before a person commissioned by the Pennsylvania Court to administer oaths (Pa.R.C.P. 4-15(b)(2)); or 3) a deposition after application to the Pennsylvania Court presiding over the litigation, pursuant to a letter rogatory under Pa.R.C.P. 4015(b)(3) and 42 Pa. C.S. § 5325, or a letter of request, in accordance with the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. If a witness will appear voluntarily the simplest way to conduct discovery, and specifically to depose a witness who is located abroad, is the notice or commission procedure outlined above. Where a party or witness refuses to participate, however, an attorney will need to resort to either a letter rogatory, where the Pennsylvania Court in which a matter is pending makes a formal request to the foreign country’s judicial authority, or a “letter of request” under the Hague Convention. This article focuses on this latter method of international discovery, which liberalizes and streamlines the international discovery process.
Deciding on an auto insurance plan, particularly after the rush of purchasing a new car, can be a deflating experience. There are many confusing choices to sort through the most significant of which is the option to select either full-tort or limited-tort coverage. While it’s certainly tempting to purchase the least costly option, savings at the front end can end up costing substantially more if you’re ever in an accident and hoping to recover more than your out-of-pocket medical costs.
The Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) is the statute that defines both full-tort and limited-tort coverage. Under the MVFRL, limited-tort coverage limits the rights of an insured to recover damages in a lawsuit. Unless a limited tort claimant suffers a “serious injury”, his or her recovery is quite limited and certainly not fully compensable for all of the consequences of an accident. “Serious injury” is as ambiguous as it sounds, and defined by the act as “death, serious impairment of bodily function, or permanent serious disfigurement.” 75 Pa.C.S. § 1702. While death and permanent serious disfigurement are relatively self-explanatory, whether the insured has suffered a “serious impairment of bodily function” is more often than not a question for the jury which is asked to evaluate the injuries suffered in terms of “the extent of the impairment, the length of time the impairment lasted, the treatment required to correct the impairment, and any other relevant factors.” Washington v. Baxter, 719 A.2d 733, 740 (Pa. 1988), Cadena v. Latch, 78 A.3d 636, 640 (Pa. Super. 2013). Unless the jury decides that the injuries sustained, using these criteria, are “a serious injury”, a limited tort claimant can only recover his or her unreimbursed out of pocket costs (referred to as “economic loss” in the statute). He or she will receive no compensation for pain and suffering, loss of life’s pleasures, or the “non-economic loss” which so often has the most significant impact on an accident victim.
On April 29, 2014 an evenly divided Supreme Court let stand a Superior Court opinion which effectively creates a blanket prohibition on discovery of communications between an attorney and his or her expert. On November 23, 2011 the Superior Court handed down its opinion in Barrick vs. Holy Spirit Hospital, (32 A.3d 800). In that case, Carl Barrick brought suit against the hospital and its catering company, Sodexho, for injuries suffered when chair on which he was sitting collapsed beneath him in hospital cafeteria. Sodexho sought discovery directly from one of Mr. Barrick’s treating physicians, Dr. Greene, who was also designated as an expert witness to testify at trial. The medial records were produced, but Dr. Greene refused to produce “Certain records of this office that pertain to Mr. Barrick but were not created for treatment purposes….” These records included communication between Dr. Greene and Mr. Barrick’s attorney. Sodexho moved to enforce the subpoena which was granted by the trial court. An interlocutory appeal followed.
The Superior Court reversed. Its analysis focused on Pa.R.C.P. 4003.3 which protects from discovery counsel’s work product and 4003.5 which limits expert discovery. Discussing Rule 4003.5, the Superior Court reiterated the Supreme Courts’ interpretation of the rule in a prior case which held that, in Pennsylvania, expert discovery absent cause shown, is limited to the interrogatories described in Pa.R.C.P. 4003.5(a)(1) .
The Superior Court went on to hold that written communication between counsel and an expert witness retained by counsel is not discoverable as it is protected under the work-product doctrine of Pa.R.C.P. 4003.3. The only exception to this blanket prohibition arises where the party propounding the discovery can show that the communication itself is relevant.
Lis pendens is a powerful tool which can be utilized in civil litigation pertaining to a claim against title to real estate. The filing of a lis pendens and recording that lis pendens against a parcel of property puts the world on notice that the owner may not have clear title, and thus, may be unable to convey same. A lis pendens effectively precludes transfer of the real property as any buyer must take subject to the cloud on title. Of course, a lis pendens must be supported by a writ of summons or a civil action complaint relating to real property.
Curiously, a lis pendens is not an available tool in an Orphans’ Court proceeding. Accordingly, a lis pendens cannot be utilized to place the world on notice of a claim against an administrator or executor where a transfer of property is made in connection with estate administration. Nor can it be used to place the world on notice of the claim relating to that transfer or a defect in their authority to effectuate same. Thus, the lis pendens is not an effective tool to preclude further transfer or encumbrance by mortgage or other debt instrument.
Although lis pendens is not available, the same purpose can be accomplished under the Orphans’ Court rules, provided a Petition for Citation has been filed with respect to the administrator’s activity. Pursuant to 20 Pa. Cons. Stat. §3359, any pleading in Orphans’ Court may be recorded in the Recorder of Deeds Office with reference to the property in question. While little case law is available to address the impact of such filing, the practical effect of providing notice of any existing claim to title may be satisfied.
Antheil Maslow and MacMinn is experienced in matters of estate administration and litigation pertaining to estate matters.
By Thomas P. Donnelly, Esquire, Reprinted with permission from the March 27, 2014 issue of The Legal Intelligencer. (c)
2014 ALM Media Properties. Further duplication without permission is prohibited.
It happens all the time. A potential or existing client calls and advises they have been stiffed by a customer on a commercial contract. Often times, your client has provided goods or services to a client business only to be advised their client, the other named party to agreements in place, has ceased business operations. [As filing under Chapter 7 of the Bankruptcy Code does not result in a discharge of corporate obligations, a bankruptcy filing is generally not forthcoming.] There is no event which gives the client finality as to their loss. The client is left with only their suspicions that operations have commenced under a new corporate umbrella and whatever assets remained have simply been transferred out of the client’s reach.
While certainly not in an advantageous position, your client’s claims may not be dead. Under the right factual circumstance, recovery may still be had. Claims against successors, affiliated business entities, and corporate principals are fact specific and often necessitate pre complaint development through available public information or, potentially, through the issuance of a writ of summons. If sufficient information can be mined, causes of action for violation of the Uniform Fraudulent Transfers Act, successor liability under the de facto merger doctrine, unjust enrichment, and claims for piercing the corporate veil may have merit and be successfully pursued.