Articles by Our Attorneys

March 2023 brought notable lawsuits that could impact employers in Pennsylvania, both in the areas of wage and hour laws and medical marijuana. Get the latest updates in below:

Class Action Lawsuit Filed Against Caesars for Policy Penalizing Early Clock-Outs in Pennsylvania

Casino operator Caesars Entertainment is facing a proposed class-action lawsuit filed in Pennsylvania federal court, which accuses the company of failing to pay workers at a Pennsylvania casino for all hours worked. The lawsuit alleges that the casino used a time clock that penalized its floor employees for clocking out after working for more than eight hours. Plaintiffs Christopher Cvijic and Spencer McLaughlin say that the policy is in violation of the federal Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, and the Pennsylvania Wage Payment and Collection Law. The plaintiffs allege that the policy forced many employees to perform duties without compensation, discouraged them from earning overtime and violated minimum wage laws.  The suit is being brought on behalf of employees who served as dual-rate supervisors, supervisors, and/or dual-rate assistant managers.

The case is Cvijic et al. v. Caesars Entertainment Inc., case number 5:23-cv-00816, in the U.S. District Court for the Eastern District of Pennsylvania.

3rd Circ. Holds that PTO Is Not “Pay” under the FLSA in First Impression Ruling

The Third Circuit has ruled that paid time off (PTO) is not considered an employee’s salary and therefore cannot be the basis for a Fair Labor Standards Act (FLSA) suit. In a precedential opinion, the court upheld the partial denial of class action claims against Bayada Home Health Care Inc. by a group of nurses who challenged the company’s use of a productivity point system that deducts PTO days to cover an employee’s point shortfall.

Upholding the district court’s decision, the Third Circuit panel stated that even if the nurses’ PTO allotment was reduced to zero, their salaries would remain unchanged. PTO is considered a fringe benefit, which has no effect on the employee’s salary or wages, and may be irregularly paid out, such as when an employee separates from a company. Therefore, the panel concluded that PTO is distinct from salary, and the term “salary” as used in the FLSA does not include fringe benefits like PTO.

The court also rejected the nurses’ argument that they were wage earners under the FLSA with respect to PTO being a wage. The key question when determining the legal classification of an employee for FLSA purposes is whether an employer made an actual deduction from an employee’s base pay.

This decision clarifies the legal definition of salary and emphasizes the importance of distinguishing between salary and fringe benefits such as PTO when it comes to FLSA claims. It also highlights the significance of accurately classifying employees for FLSA purposes to avoid potential legal disputes.

The case is Higgins v. Bayada Home Health Care Inc., case number 21-3286, in the U.S. U.S. Court of Appeals for the Third Circuit.

PA Medical Cannabis Patient Files Lawsuit Against Johnson Controls for Revoking Job Offer

A medical cannabis patient in Pennsylvania is suing Johnson Controls Inc., a building software and equipment company, for violating state law by rescinding his employment offer after he disclosed his medical cannabis use. Trey Cuthrell, the plaintiff, is a medical cannabis cardholder under Pennsylvania’s Medical Marijuana Act and uses cannabis as medication to help him sleep at night. Cuthrell informed the testing facility of his cardholder status and the test showed that he was taking medical cannabis to treat the symptoms of a disability.

The Medical Marijuana Act prohibits employers from refusing to hire or otherwise discriminating against an employee based on their status as a medical cannabis patient. Despite this, Johnson Controls revoked Cuthrell’s conditional offer of employment because of his medical cannabis use, causing him to lose earnings and benefits and suffer embarrassment, humiliation, and anxiety.

This case highlights the need for employers to understand the laws and regulations related to medical cannabis use and to ensure they are not discriminating against employees based on their medical condition. Medical cannabis is legal in many states, including Pennsylvania, and patients should not be penalized for using it as medication. Employers must make reasonable accommodations for medical cannabis patients, such as allowing them to use their medication outside of work hours, as long as it does not impair their ability to perform their job duties. It is important for both employers and employees to be aware of their rights and responsibilities when it comes to medical cannabis use in the workplace.

The case is Cuthrell v. Johnson Controls Inc., case number 1:23-cv-00465, in the U.S. District Court for the Middle District of Pennsylvania.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

February may be the shortest month, but it packed plenty of significant developments in the world of employment law, including a major worker-friendly change in severance agreements, another massive employment discrimination punitive damages award against a household-name business, and another difficult result for our hometown Philadelphia Eagles.  Get the latest details below.

 

NLRB Limits Inclusion of Overly Broad Non-Disparagement and Confidentiality Clauses in Severance Agreements for Employees

The National Labor Relations Board (NLRB) has issued a decision that restricts the use of non-disparagement and confidentiality clauses in severance agreements, which could have ripple effects for employers nationwide. The NLRB held that employers cannot implement severance agreements that include overly broad non-disparagement or confidentiality provisions that restrict the employees’ exercise of their rights under Section 7 of the National Labor Relations Act (NLRA). The Board reasoned that an employer’s offer of a severance agreement with unlawfully broad provisions is itself an attempt to deter employees from exercising their statutory rights. The ruling applies to workers who have Section 7 rights, regardless of whether they are unionized. The decision overrules the Trump administration’s more employer-friendly standard.  As a result of the decision, employers will potentially need to reexamine their severance agreements with an eye towards compliance with the new NLRA standard.

The case is McLaren Macomb, 372 NLRB No. 58 (2023).

 

Another Enormous Punitive Damages Award in Employment Discrimination Action

In another in a series of recent enormous verdicts across the U.S. in cases of employment discrimination, a Texas federal judge has ordered FedEx to pay $366 million plus interest to ex-salesperson Jennifer Harris, who was allegedly fired for complaining about racial discrimination. The award included $365 million in punitive damages in addition to past and future compensatory damages awarded by a jury in October. In her May 2021 complaint, Harris asserted that she had been a successful sales representative at the company for more than ten years and had flourished in her role. However, she claimed that a manager requested she take a demotion, which she perceived as discriminatory. This request led to what she deemed a fraudulent investigation into her accusations, additional disciplinary action, and ultimately her termination. FedEx had asked for the jury’s decision to be erased, arguing that it had made good-faith efforts to comply with anti-retaliation laws. FedEx has filed a notice of appeal.  The case serves as a powerful reminder of the severe consequences that a company can face if it is found to have acted recklessly in violation of an employee’s civil rights.

The case is Harris v. FedEx, case number 4:21-cv-01651, in the U.S. District Court for the Southern District of Texas.

 

Commonwealth Court holds that Philadelphia Eagles cannot evade disability payments for Former Linebacker 

 

The Philadelphia Eagles have had a tough month.  In addition to their difficult loss in the Super Bowl, the Eagles were unsuccessful in a recent legal challenge regarding disability benefits for a former player.  The team must pay disability benefits to Emmanuel Acho, a former linebacker who broke his thumb in two separate incidents in 2015 and was unable to play at a professional level since, a Pennsylvania appellate court has ruled. The court ordered the team to pay total disability benefits from August through November 2015, and partial benefits from November 2015 through September 2019. The Eagles argued that other teams’ disinterest in Acho was not necessarily due to his injury, but the Commonwealth Court panel found that his success and ranking as a professional player was not meaningfully contested.

The case is Philadelphia Eagles Inc. v. Acho, case number 1060 CD 2021, in the Commonwealth Court of Pennsylvania.

 

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

On February 15, 2023, the Pennsylvania Supreme Court issued its decision in Erie Insurance Exchange v. Mione siding with an insurance company against a motorcycle rider after interpreting that a Household Exclusion precluded recovery of Underinsurance Benefits.

Facts of the Case

In 2018, Albert Mione was injured in a collision while operating his motorcycle that was insured by Progressive and did not include Underinsurance Coverage (UIM). UIM coverage is an optional benefit that you can purchase on your own insurance policy that provides extra compensation if you are injured in an accident caused by someone else who does not have enough coverage to pay for all of your damages.

Albert and his wife owned a car that was insured by Erie on a single-vehicle policy with “stacking.” Stacking permits an insured to combine UIM limits from multiple policies.

Mione’s adult daughter lived with them and had her own single vehicle policy with Erie which also included UIM benefits.

Both Erie policies contained identical Household Vehicle Exclusions stating: Coverage does not apply to damages sustained by anyone we protect while occupying or being struck by a motor vehicle owned or leased by you or a relative, but not insured for Uninsured or Underinsured Coverage under this Policy.

Mione recovered full policy limits from the driver responsible for causing the crash and then, because he did not have UIM coverage on his motorcycle policy with Progressive, he made UIM claims under both Erie Car Insurance Policies, his policy and his daughter’s policy.

Erie denied UIM coverage and filed suit against Mione so that the PA courts could interpret the Household Vehicle Exclusion.

What Did Each Side Argue?

Erie asserted that the Household Vehicle Exclusions were unambiguous and clearly precluded recovery. Mione was hurt while riding a motorcycle that he owned and insured with Progressive, not Erie. Accordingly, the Household Vehicle Exclusion precluded coverage from Erie.

Mione’s lawyer argued that Stacking of UIM benefits is something allowed by PA law and that if a stacking waiver is not signed, Stacking is mandatory so an insurance company cannot deny UIM coverage.

Erie countered Mione by stating that since he did not have UIM on his motorcycle policy, nothing was being stacked. Instead, Mione was seeking UIM coverage in the first instance from the Erie policies. So, the mandatory nature of stacking was not a factor in this case.

The Supreme Court Decision

Ultimately, the PA Supreme Court sided with Erie and found that the Household Vehicle Exclusion was enforceable. It held that each case must be analyzed based upon its own facts and that since Mione did not carry UIM benefits on his motorcycle, the mandatory nature of UIM benefits absent a stacking waiver was not implicated.

Further, the Court found that part of the intent behind PA Car Insurance Law was to try to stop spiraling cost of car insurance in Pennsylvania. The Court stated that if Mione’s position was accepted, it would allow an entire family living in a single household to obtain UIM coverage through a single insurance policy which would increase costs. The Court further reasoned that its decision was fair because it held Mione to “his voluntary choice of not purchasing UIM coverage on his Progressive Motorcycle Policy.”

Long Term Impact of the Erie v. Mione Decision

In practical terms, this Decision settles this fact pattern but does not provide comprehensive guidance on the tension between UIM Stacking and insurance policy exclusions. The Court’s Decision specifically states that each of these cases must be decided based upon its own unique facts. So, stay tuned because the Court will continue to decide these cases….

Bonus Advice – Purchase UIM on Your Motorcycle Policy

The result of the Mione case makes it even more important that Motorcycle riders purchase Uninsured/Underinsured coverage on their Motorcycle Policies.

Motorcycle Accidents often result in serious, if not catastrophic, injuries or death for the motorcycle rider.

In addition, it’s a sad fact that many car drivers have no liability insurance or state minimum $15,000 liability policies. If a motorcycle rider is hurt in an accident cause by an Uninsured or Underinsured driver, the only way to make sure that his/her damages will be fully covered is to purchase large amounts of Uninsured/Underinsured coverage. Such coverage allows you to look to your own insurance company for compensation above and beyond the limits of the responsible driver.

Please make sure that you have at least $100,000 of UM/UIM coverage on your motorcycle insurance policy and preferably $250,000, $500,000, $1 Million or more. You and your family deserve to be fully protected!

 

Tim Rayne is a Car, Truck and Motorcycle Accident lawyer who practices with the full-service Pennsylvania and Delaware law firm MacElree Harvey. Contact Tim with any questions or for a Free Consultation regarding your Accident Case at 610-840-0124 or [email protected] or visit his website www.TimRayneLaw.com.

As medical marijuana becomes legal in an increasing number of states, employers are facing new challenges when it comes to managing the use of medical marijuana by employees in safety-sensitive job roles. In Pennsylvania, employers may be particularly impacted by this issue as the state has legalized medical marijuana use. As a lawyer who works with employers in Pennsylvania, I have seen the complexities that can arise when medical marijuana is used by employees in safety-sensitive positions.

Under Pennsylvania law, employers are not required to accommodate medical marijuana use in the workplace. However, employers must be careful when conducting drug tests and when disciplining employees for marijuana use. Significantly, medical marijuana users are protected under the Pennsylvania Medical Marijuana Act (MMA) against discrimination and retaliation by their employers.

The biggest challenge facing employers is how to balance the needs of employees who use medical marijuana with the need to maintain a safe workplace. While medical marijuana may be legal and prescribed by a doctor, it can impair a person’s ability to perform certain job duties. This is particularly true for employees in safety-sensitive job roles, such as those in transportation, healthcare, and law enforcement.

To address this issue, employers should develop policies that balance the rights of employees to use medical marijuana with the need to maintain a safe workplace. Employers should consider implementing drug testing policies that account for medical marijuana use, and they should also provide training to managers and supervisors on how to identify impairment and respond appropriately.  

Employers also should be mindful of their potential obligations to provide reasonable accommodations for employees who use medical marijuana under the Americans with Disabilities Act and state disability laws. This may include allowing employees to use medical marijuana outside of work hours or transferring the employee to a non-safety-sensitive position if one is available. However, employers are not required to make accommodations that would pose an undue hardship on the business or would compromise safety.

Finally, employers should be aware of the specific legal protections afforded to medical marijuana users under the Pennsylvania MMA. Employers should avoid taking adverse employment actions against employees based solely on their status as medical marijuana users. Instead, employers should focus on job performance and take appropriate action if an employee’s use of medical marijuana interferes with their ability to perform their job safely and effectively.

In conclusion, employers in Pennsylvania are facing new challenges when it comes to managing medical marijuana use by employees in safety-sensitive job roles. By developing clear policies, providing training to managers, and making reasonable accommodations, employers can balance the needs of employees with the need to maintain a safe workplace. Employers should to stay up to date on the latest legal developments in this area and to seek legal guidance when necessary.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

What is the state of the employment world as we transition from 2022 to 2023?  Looking back, a study showed that employment discrimination class-action settlements soared in 2022.  Meanwhile, COVID-related litigation shows us that the impact of the pandemic will continue in the courts with vigor in 2023.  Read all about it below.

Workplace Bias Class-Actions Soared in 2022, according to Report

According to a report just issued by Duane Morris, LLP, the value of employment discrimination class-action lawsuits soared in 2022, nearly doubling the total from 2021.  The findings of the report show that 2022’s figure of $597 million in total discrimination class-action settlements dramatically outpaced previous years, with the last five years’ figures being: 

2017 – $294 million;

2018 – $216 million;

2019 – $139 million;

2020 – $423 million; and,

2021 – $323 million.  

The report looked at class-action settlements across three employment class areas – discrimination, wage and hour, and Employment Retirement Income Security Act (ERISA) claims.  Wage and hour and ERISA class-action settlements were down from 2021, but otherwise fairly consistent with the preceding years.  The results of the report can certainly serve as a signal to employers to take a close look at workplace policies – and particularly Equal Employment Opportunity (EEO) compliance – to ensure they do not find themselves part of this trend in 2023.

Workers Compensation Award issued against SEPTA for COVID death may be Harbinger for Future Successful Claims

The family of a former Southeastern Pennsylvania Transportation Authority (SEPTA) mechanic who died of COVID was recently awarded workers’ compensation benefits by a Philadelphia Judge, Todd Seelig.  To prevail on such a claim, the worker needs convincing proof that an injury or illness occurred in the course of their job.  That proof has been considered elusive given the pervasive nature of COVID.  However, this judge was convinced after the worker’s family was able to present evidence that the worker had exposures to multiple infected employees in close quarters, and SEPTA that did not permit masking and failed to perform contact tracing.  While the decision of the judge is only persuasive precedent and therefore not binding on other cases, the case may serve as a roadmap for future workers compensation claims as well as personal injury litigation.  

Philadelphia District Attorney’s Office survives COVID Religious Liberty Suit

The Philadelphia District Attorney was successful in requesting a federal court to dismiss a former prosecutor Rachel Spivak’s lawsuit alleging that she was fired for failure to receive a COVID-19 vaccine based upon her religious objections.  At the time of the exemption request, the DA’s office permitted exemptions to its mandatory vaccination policy based only upon health and safety concerns over vaccination, however the office offered no exemption on religious grounds.  The prosecutor sought an exemption based upon religious beliefs surrounding injecting undisclosed ingredients into her body.  Significantly, notwithstanding the lack of a religious exemption policy, the DA’s office had offered the prosecutor the option of working remotely if she was unwilling to be vaccinated, however she refused that opportunity.  Ultimately, the judge concluded that “[t]here is absolutely nothing in the record suggesting that anti-religious bias figured into [the DA’s] decisions.  To the contrary, Ms. Spivak refused the DAO’s offer of an accommodation, which would have allowed her to keep her job and remain unvaccinated (in accordance with her religious beliefs).”  The case is Rachel Spivack v. City of Philadelphia, et al., case number 2:22-cv-01438, in the U.S. District Court for the Eastern District of Pennsylvania.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.