William T. Wilson, Esquire

All Pennsylvania employers are now subject to discrimination claims in court - regardless of their size

A recent decision of the Pennsylvania Superior Court significantly expands the potential liabilities of small employers in the Commonwealth. Businesses operating with less than four employees should take note of the Court's ruling to ensure compliance with all Federal and state employment-related laws.

As employers have known for decades, the Pennsylvania Human Relations Act makes it unlawful to discriminate against employees based on race, color, religious creed, ancestry, age, sex, national origin, or non-job related handicap or disability, as well as a few other considerations. The application of the Human Relations Act to private employers, however, is limited to those employing four or more persons within the Commonwealth. This offers employers no security from claims of racial discrimination, because the Civil Rights Act of 1866, a Federal statute, provides for claims of that nature and applies to all employment relationships, regardless of the size of the business. Federal statutes relating to gender, age, disability and some other kinds of discrimination have higher number of employee thresholds than the Human Relations Act. Although those kinds of discrimination are obviously not desirable employment practices, regardless of the size of the of the employer, smaller businesses had reason to feel that their decisions would not be subject to some kinds of "second-guessing" in court.

Since the Pennsylvania Supreme Court's 1974 decision in Geary v. U.S. Steel Corp, another theory of employer liability for terminations that violate a clearly defined public policy has been developing. The Human Relations Act states a rather clear public policy against all enumerated types of discrimination, but the Supreme Court decided in 1989 that the procedures under the Human Relations Act were the exclusive remedy, preempting all others, for the kinds of policy violations it covers. In that case, Clay v. Advanced Computer Applications, Inc., the Court emphasized that an aggrieved party was not deprived of access to the courts, but was required to file a complaint with the Pennsylvania Human Relations Commission and participate in its investigation of the prescribed period of time before seeking a remedy in court. Based upon Clay, it was widely believed that claims for wrongful discharge based on then kinds of discrimination covered by the Human Relations Act were limited to those that could be brought under that statute-namely, those against employers with four or more employees.

The New Rule
In October 2005, the Superior Court issued a decision upholding the right of an employee to pursue a claim for sexual harassment, a form of gender discrimination, as a violation of public policy even though the employer had fewer than four employees. Although this claim was not made under the Human Relations Act, it was still allowed because the plaintiff had filed a complaint with the Human Relations Commission. The act of filing this complaint was pointless for all other reasons, since the Commission has no jurisdiction to investigate employers with fewer than four employees and will inevitably dismiss the complaint, but it fulfills the Supreme Court's requirement for following the procedures of the Human Relations Act under the Superior Court's decision in Weaver v. Harpster & Shipman Financial Services.

This recent decision makes all Pennsylvania employers subject to claims in court for gender, age, religion, and disability discrimination - regardless of their size. It also has some impact on larger out-of-state employers who have small Pennsylvania workforces of fewer than four, because the Human Relations Act allows for remedies that cannot be obtained under the analogous Federal statutes. Until the Supreme Court decides otherwise, this decision has great significance to those employers with a total workforce of less than four employees.

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