Employers Can Now Use After-Acquired Evidence in Court to Show Employee Wasn’t Qualified For the Job

The Anthony decision provides welcome support for employers who find that a discrimination plaintiff has concealed a lack of basic credentials to hold a job.

In April 2020, the Ninth Circuit Court of Appeals ruled that an employer can defeat an Americans with Disabilities Act (ADA) claim with after-acquired evidence that the ex-employee lacked a required college degree. Anthony v. Trax International Corp., 955 F.3d 1123 (9th Cir. April 17, 2020).

Legal History

In 1995, the United States Supreme Court limited employers’ use of evidence of misconduct acquired after a plaintiff was terminated from a job. In an age discrimination case, McKennon v. Nashville Banner, 513 U.S. 852, 115 S. Ct. 879 (1995), the Court said that employers could not use after-acquired evidence to eliminate the employer’s liability to a discrimination plaintiff. The most that employers could do with after-acquired evidence was cut off an employee’s damage recovery as of the date of discovery of the misconduct.

McKennon did not address an employer’s ability to defeat an employee’s entire claim when the after-acquired evidence showed that the employee lacked the basic qualifications for the job, such as a degree or license.

The Facts of the Anthony Case

Anthony’s facts are simple. Trax employed Anthony as a technical writer. Trax required technical writers to have a bachelor’s degree from a four-year college. Anthony misrepresented that she had this degree in her job application. She later asked to work from home because of a disability. Trax refused the request and terminated Anthony.

Anthony sued, claiming discrimination under the ADA because the employer failed to offer her a reasonable accommodation for her disabilities. During the litigation, the employer became aware that Anthony had no degree. The degree was not just a prerequisite for Anthony’s job; the employer had billed the government a contract rate that assumed that Anthony had a degree.

The employer moved for summary judgment on the ground that Anthony was not a qualified individual entitled to the ADA’s protection against employment discrimination. The ADA prohibits discrimination against individuals who are “qualified to perform the essential functions of the job”.

In 2018, the Arizona United States District Court granted summary judgment to the employer and dismissed Anthony’s case. Anthony appealed to the Ninth Circuit.

The Ninth Circuit panel unanimously upheld the lower court’s ruling in favor of the employer.. The Ninth Circuit noted that the plaintiff had the burden of showing that she was a “qualified individual” as part of her prima facie disability case. Since the plaintiff could not show that she had the basic qualifications for the job, her case failed.

What does the ADA define as a “qualified individual”?

The ADA defines a “qualified individual” as someone who “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” The Court said that the Equal Employment Opportunity Commission (EEOC) had established a two-step inquiry on an individual’s qualifications. The first step was to ascertain whether the individual satisfies the prerequisites for the job- i.e., the “requisite skill, experience, education and other job-related requirements of the employment position such individual holds or desired.” The second step was the inquiry into the individual’s ability to perform the essential functions of the position, with or without reasonable accommodation.

The Court then held, “At no time did Anthony satisfy the prerequisites of the qualified individual element of an ADA prima facie case: it is undisputed that she never possessed the requisite bachelor’s degree and …[under] Trax’s government contract, the bachelor’s degree was an actual requirement of the … position that could not be satisfied by any functional equivalent.” The Court dismissed the EEOC’s contention that the employer could not use after-acquired evidence, discovered during the suit, to defeat Anthony’s prima facie case.

The Court also dismissed Anthony’s contention that McKennon v. Nashville Banner precluded the use of after-acquired evidence. The Court distinguished between the ADA, which protects only qualified individuals, and the Age Discrimination in Employment Act in McKennon, whose protections extend to any individual employee subjected to age discrimination.

Further, in McKennon, the employer sought to use the after-acquired evidence to show a legitimate non-discriminatory reason for the employee’s discharge. In Trax, the after-acquired evidence defeated the plaintiff’s claim at an earlier stage in the case- the stage where plaintiff had to show that she had the minimum qualifications for the job. The Court held that employers could look to the employee’s ability to satisfy the basic job prerequisites before addressing whether reasonable accommodation could enable the employee to perform essential job functions.

In Summary

The Ninth Circuit’s decision in Anthony v. Trax allows employers to look into an ex-employee’s ability to meet threshold job qualifications after the ex-employee makes an ADA discrimination claim. The decision is consistent with the relatively few decisions from other circuits on this issue. The decision is also consistent with logic. An employee lacking the basic credentials for a job cannot, by definition, have the qualifications to perform the job.

It is still open to question whether an employer can use after-acquired evidence to challenge an ex-employee’s qualifications where a statute does not state that an employee must be qualified to perform a job. But the requirement of qualification for a job position is not unique to the ADA; the requirement is one element of the test that an employee must satisfy to go forward with a prima facie case of discrimination. So the ability to use after-acquired evidence in this threshold area may arise again.

Business Owners in PA – Your Reopening Questions Answered

As PA counties move into the green phase of reopening and non-essential business commences, employers and business owners in PA have many questions. We have compiled and answered some the most important questions below.

by Employment Attorneys James B. Shrimp and Thomas D. Rees

1. My business has reopened and I have an employee that HAS tested positive for COVID-19. What are my options?

The legal answer to this question depends upon the size of your business. You should also look to CDC guidelines regarding additional cleaning of the workplace and any contact tracing and additional quarantine of employees that is recommended. The answers below can also apply to employees that have recently been exposed to another person who has the coronavirus.

A. Businesses with 500 or more employees

There are no enhanced paid leave benefits. Your HR department should apply its PTO and unpaid time off policies, with the understanding that CDC guidelines likely require a period of quarantine for the employee. It would not be advisable to terminate the employee during this period of quarantine.

B. Businesses with Under 500 employees

The employee may be entitled to two (2) weeks of paid sick leave.

The Families First Coronavirus Response Act (“Act”) was the first coronavirus related legislation passed by Congress. The Act seeks to address the impact of coronavirus in a number of areas – including certain employee benefits.

The Act applies to employers with under 500 employees. Employers with under 50 employees are entitled to seek an exemption from the Department of Labor, if providing the benefits provided by the Act would put the employer out of business.

The Act provides two new paid benefits which expire on December 31, 2020:

  • A two-week paid sick leave for coronavirus related illness; and
  • Up to 12 weeks of paid Family and Medical Leave for caring for a child whose school or child care provider has closed.

Who Can Take advantage of the two-week paid sick leave?

  1. This benefit is for employees who are unable to work (or telework) because the employee is subject to a governmentally mandated quarantine or isolation order;
  2. has been advised by a health care provider to self-quarantine;
  3. has symptoms of being infected with coronavirus and is seeking a medical diagnosis;
  4. is caring for an individual who is quarantined or self-quarantining;
  5. is caring for a son or daughter if the school or place of care has been closed.

If any of the circumstances above apply, the employee is eligible for two (2) weeks of full pay, based on his/her typically schedule. There is a maximum benefit of $511 per day.

If the employee has employer based sick time/PTO, the employer is required to apply the government emergency leave, before applying the employer based benefit.

The employer is reimbursed via a payroll tax credit, which will be provided by the Federal government within 3 months. If the employer pays more in paid benefits and health insurance premiums than the payroll tax, the government will send the employer an “overpayment” check for the difference.

C. Other Employees

The employer is entitled to screen employees for Covid related symptoms. See EEOC Guidance - “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” (April 23, 2020).

2. My business has re-opened and I have an employee that HAD COVID-19. What steps should I take?

You are entitled to require a return to work note from the employee’s physician. Once you receive the return to work note, that employee is permitted to return to work and should be treated like all other employees.

3. Due to Schools and Childcare Centers being closed, my employees cannot get into work. What are my options?

The answer to this question depends upon the size of your business.

A. 500 or more employees

There are no enhanced paid leave benefits. Your HR department should apply its PTO and unpaid time off policies. If the employee’s PTO has exhausted and there is no unpaid time off policy that would apply, the employee has no right to continued employment. Ensure that terminations made under these circumstances are done in a non-discriminatory fashion.

B. Under 500 employees

The employee may be entitled to twelve (12) weeks of Family and Medical Leave.

The Families First Coronavirus Response Act (“Act”) was the first coronavirus related legislation passed by Congress. The Act seeks to address the impact of coronavirus in a number of areas – including certain employee benefits.

The Act applies to employers with under 500 employees. Employers with under 50 employees are entitled to seek an exemption from the Department of Labor, if providing the benefits provided by the Act would put the employer out of business.

The Act provides two new paid benefits which expire on December 31, 2020:

  • A two-week paid sick leave for coronavirus related illness; and
  • Up to 12 weeks of paid Family and Medical Leave for caring for a child whose school or child care provider has closed.

Pertinent to the question posed is the twelve weeks of paid Family and Medical Leave.

This benefit is available for employees who are unable to work (or telework) because the employee must care for children (up to 18 years old) whose schools or child care facilities have closed because of the coronavirus.

The employee is eligible for up to 12 weeks of two-thirds pay, with health insurance. The maximum benefit is $200 per day and $10,000 total. The first two weeks of this leave may be unpaid (that gap is filled by the Paid Sick Leave benefit).

The employer is reimbursed via a payroll tax credit, which will be provided by the Federal government within 3 months. If the employer pays more in paid benefits and health insurance premiums than the payroll tax, the government will send the employer an “overpayment” check for the difference.

4. My business is ready to reopen but I several employees tell me that they have underlying health conditions; what are my options?

If the health condition qualifies as a disability under the Americans with Disabilities Act, you need to provide the employee with a reasonable accommodation to returning to work, so long as the accommodation does not create undue difficulty or cost for you.

The first step is to find out whether the employee’s condition interferes with the employee’s ability to perform major life activities (e.g., asthma impairs breathing). The next step is to discuss various accommodations, since the ADA requires employer and employee to engage in an interactive process. The type of accommodation depends on the nature of the employee’s job. Possible accommodations include continued work from home; work in a protected area (either a separate part of the office or work behind shielding); work when others are not present (staggered hours); or a reasonable modification of duties, including a possible exchange of duties with other employees.

Reasonable accommodation does not require an employer to fundamentally alter the basic qualifications for a job (minimum skills, licensure). Be sure to document all discussions with the employee and all steps taken to accommodate the employee.

5. My business is ready to reopen but have an employee who feels uncomfortable returning to the workplace because of COVID-19; what are my options?

It is wise to ask the employee the reasons for discomfort. A refusal to come to work just because someone feels uncomfortable is not a legitimate excuse. But the discomfort may have underlying causes that may constitute a disability under the Americans with Disabilities Act. You may ask the employee for medical reasons for the discomfort; this inquiry is job related and consistent with business necessity under the ADA. The inquiry may uncover a psychological reason for the employee’s concerns, such as generalized anxiety disorder or post traumatic stress syndrome. Or there may be a medical reason for the concern, such as an underlying condition that makes the employee susceptible to COVID-19. If the employee can document a condition that constitutes a disability, then you should try to work out a reasonable accommodation that allows the person to work with some degree of separation from the office. However, if the employee cannot document the condition, you may require the employee to come into work, and you may treat the refusal to come to work as a voluntary quit that precludes the employee’s receipt of unemployment compensation

6. We are ready to reopen but the nature of my business makes social distancing very difficult; what can I do?

Many businesses face this issue, particularly stores that have inventory in small spaces (drugstores, coffee shops, bookstores). The first step is of course to require the wearing of masks at all times. State governments have already imposed this requirement. The second step would be to take whatever steps can reasonably be taken to increase social distancing. These could include such steps as staggered hours; staggered breaks; setting up one-way corridors or spaces in the office; setting up zones in the office that specific individuals would cover; and having plenty of disinfecting wipes and hand sanitizers around. Some businesses may be able to transact customer business through a window opening onto the street or to use curbside delivery. You may need to be extra careful to require any employee with any illness to stay away from work. Each business has its own different needs. It will be wise to establish written guidelines to minimize close social contact and to post those guidelines for both employers and employees. Remember that you have the duty to have a safe workplace and written guidelines will help you show that you have fulfilled this duty.

7. I am re-opening my business - do I need to offer masks to my employees?

In Pennsylvania, employers are required to provide non-medical masks to employees and are required to ensure that customers wear masks as well.

8. Do I need to update my employee manuals with Covid (general pandemic) information before hiring new employees?

No. As an employer, you can update your employee manuals/policies at any time. Therefore, if you are re-opening and you need additional staff, do not slow hiring to get additional policies in place.

With that said, once your business is up and running at all cylinders, it is worth sitting down with your business lawyer to discuss what revisions and additions you might want to make to your employee manual.

9. My employee refuses to come back to work because they are receiving more money on unemployment compensation as a result of the $600 per week federal supplement. Can employees do this?

An employee “can” do this, but he/she will lose the entitlement to future unemployment benefits. The employee should know that the $600 per week federal supplement expires at the end of July and currently there is no appetite in the United States Senate to extend this supplement, for the very reasons stated in the question.

If an employee refuses to come back to work, you should advise the employee in writing that since he/she has refused to return to work, that he/she is being terminated for job abandonment. You should then notify the bureau of unemployment compensation that the employee refused to return to work and was terminated for job abandonment.

10. Employees have asked me whether the shelter in place order counts against my sick or vacation time; what should my response be?

A shelter in place order will almost never count against preexisting leave entitlements offered by an employer. A shelter in place order will qualify an employee for paid sick leave if the order prevents the employee from doing work that the employer has for the employee. This means that if the shelter in place order keeps an employee from being able to work or telework, and the you have work for the employee, the employee may get paid sick leave. If either of these requirements are not met, either because the employee can telework or you have no work for the employee, then the shutdown will not enable the employee to receive paid sick leave.

Paid sick leave is additional to whatever leave your employee has under your business’ leave policies. In rare situations, an employer and employee may agree to combine paid sick leave under the Emergency Paid Sick Leave Act and paid leave under the employer’s policies, where the addition will increase the employee’s compensation. The rules for family leave under the Emergency Family and Medical Leave Expansion Act give employers a little more flexibility. Employers may require employees to use up paid regular paid vacation and personal leave (but not sick or medical leave) concurrently with family leave; again, this helps to close the compensation gap between paid family leave (maxing out at $200 per day and $10,000 aggregate) and full paid leave under the employer’s plans.

If you are are a business owner and have more questions during the Pandemic, please reach out to the employment attorneys at High Swartz and call 610-275-0700 or fill out our contact form.

How the Families First Coronavirus Response Act Will Affect Local Business

The Act seeks to address the impact of coronavirus in a number of areas, but how will it affect employees, employers and their businesses in PA?

On the night of Tuesday, March 17th, 2020, the President signed the Families First Coronavirus Response Act. It was passed by Congress in hopes that it will assist Americans, especially in the areas of child nutrition and health. It will go into effect no later than April 2, 2020, and below is a brief summary of what it hopes to do for businesses.

What does the Act do for businesses and its employees?

The FFCR Act applies to employers with under 500 employees. Employers with under 50 employees are entitled to seek an exemption from the Department of Labor, if providing the benefits described herein would put the employer out of business.

The Act provides two new paid benefits which expire on December 31, 2020:

  1. A two-week paid sick leave for coronavirus related illness; and
  2. Up to 12 weeks of paid Family and Medical Leave for caring for a child whose school or child care provider has closed.

Who is eligible for paid sick leave under the Families First Coronavirus Response Act?

This benefit is for employees who are unable to work (or telework) because the employee:

  1. is subject to a governmentally-mandated quarantine or isolation order
  2. has been advised by a health care provider to self-quarantine
  3. has symptoms of being infected with coronavirus and is seeking a medical diagnosis
  4. is caring for an individual who is quarantined or self-quarantining
  5. is caring for a son or daughter if the school or place of care has been closed

If any of the circumstances above apply, the employee is eligible for two (2) weeks of full pay, based on his/her typical schedule. There is a maximum benefit of $511 per day.

What if the employee still has unused sick time or paid-time-off (PTO)?

If the employee has employer-based sick time/PTO, the employer is required to apply the government emergency leave, before applying the employer based benefit.

Who is eligible for paid family and medical leave?

This benefit is available for employees who are unable to work (or telework) because the employee must care for children (up to 18 years old) whose schools or child care facilities have closed because of the coronavirus.

The employee is eligible for up to 12 weeks of two-thirds pay, with health insurance. The maximum benefit is $200 per day and $10,000 total. The first two weeks of this leave may be unpaid (that gap is filled by the Paid Sick Leave benefit).

How Does an Employer get reimbursed under the Family First Coronavirus Response Act?

Both paid leaves are reimbursable to the employer via a payroll tax credit, which will be provided by the Federal government within 3 months. If the employer pays more in paid benefits and health insurance premiums than the payroll tax, the government will send the employer an “overpayment” check for the difference.

The coronavirus pandemic means news and information is constantly-changing and evolving every minute. The business lawyers at High Swartz know how important it is to keep everyone informed with current and valid information during these trying times. If you have questions about the Family First Coronavirus Response Act, or any pandemic-related query relating to your job or business, please contact our employment law attorneys at 610-275-0700 or email jshrimp@highswartz.com.

We know how hard hit our areas have been hit during this pandemic. Our local law offices in Montgomery County and Bucks County Pennsylvania can help guide those most affected by offering guidance at any time.

Can I Collect Unemployment Compensation During the Coronavirus Pandemic?

If you meet one of the following employment statuses, you may be eligible for unemployment compensation in Pennsylvania.

Both employees and employers are trying to navigate the unprecedented measures being implemented by the government to attempt to slow the spread of the COVID-19 virus (Coronavirus). With many businesses being forced to close or alter operations, employers are struggling with deciding how to adjust operations and whether to furlough or even lay off employees. At the same time, employees need to be proactive and look ahead to their options. Below are unemployment compensation eligibility statuses that may effect many employees in Pennsylvania.

Unemployment compensation eligibility statuses for employees

Employees in Pennsylvania are likely eligible for unemployment compensation if:

  • their employer has closed
  • the employee is furloughed (a temporary leave of employees due to the outstanding needs of the employer)
  • laid off
  • forced to work at home (if it results in a reduction of hours)

What if and employee is under quarantine for coronavirus?

If the employee is quarantined, they may also be eligible for unemployment compensation benefits, but the employee must first exhaust all sick leave/paid time off benefits.

The Pennsylvania Unemployment Compensation Bureau (“UCB”) has made some important changes to its typical operations/requirements in this unprecedented COVID-19 and coronavirus outbreak in 2020. Most importantly, UCB has temporarily:

  • eliminated the one week waiting period for receipt of unemployment benefits
  • eliminated the requirement to search for work while receiving unemployment benefits

This is in light of the fact that, at least for now, many of the requests for benefits will be for furloughed workers. Employers that close as a result of COVID-19 impacts will be granted relief from charges and the employers’ unemployment tax rate will not increase.

On March 18, 2020, the president signed the Families First Coronavirus Response Act. Click here to see if you as an employee or employer is affected. (Link to JBS Blog on FFCRA)

Our advice here at High Swartz is that if you meet any of the above criteria, consider filing a unemployment compensation claim as soon as possible. If you have filed for UC before, you may enter your PIN (Personal Identification Number) that will pull up your past information. If you are new to the process, there are a few things that are necessary for you to have before you get started.

  • Your Social Security Number
  • Your Home address or mailing address
  • The best phone number to reach you
  • The best email address to reach you. This must be a valid address
  • Direct Deposit information (optional) – bank name, address and routing number

If you need help or advice during these trying times, High Swartz’s attorneys are here to help. Please contact Employment Attorney, Jim Shrimp at jshrimp@highswartz.com or call 610.275.0700.

What is a "Joint Employer?" The U.S. Department of Labor Clarifies

Being designated as a joint employer can have far-reaching ramifications per the FLSA.

If you are the owner of a business or franchise that:

  • has multiple locations
  • utilizes contract labor
  • shares employees with another related employer

This matters to you, namely, multiple employers can be liable for one employee under the Fair Labor Standards Act (FLSA). The Department of Labor will use this new interpretation to determine whether violations of the FLSA have occurred and whether legal actions should be commenced.

The interpretation highlights a concept that has been the law for quite some time, but was never emphasized or utilized as much as it is by the current Department of Labor.  Namely, that multiple employers can be liable to one employee under the FLSA.

That was not a misprint. Under the FLSA an employee can have more than one employer; the concept is settled law. The scope of the joint employment concept is the subject of the interpretation, which notes that “the concepts of employment and joint employment under the FLSA … is notably broader than the common law concepts of employment and joint employment, which look to the amount of control that an employer exercises over an employee.”

In determining whether an employee has more than one employer, the interpretation provides that the Department of Labor will look to see if the employment relationship fits into one or two employment relationships – Horizontal Joint Employment and/or Vertical Joint Employment.  In a horizontal joint employment situation, the relationship between the two employers is relevant; whereas, in a vertical joint employment situation the economic realities of the relationships between the employee and the employers, and how dependent the employee is on each employer, is analyzed.

Horizontal Joint Employment

Horizontal joint employment exists when two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee.  Examples of horizontal joint employment may include “separate restaurants that share economic ties and have the same managers controlling both restaurants, or home health care providers that share staff and have common management.”

Factors that are relevant in determining whether there is horizontal joint employment are:

  • Who owns the joint employers (i.e., is there common ownership);
  • Do the potential joint employers have any overlapping management;
  • Do the potential joint employers share control over operations;
  • Are the potential joint employers’ operations inter-mingled
  • Do the potential joint employers treat the employees as a pool of employees;
  • Do the potential joint employers share clients or customers; and
  • Are there any agreements between the joint employers

The interpretation’s examples of horizontal joint employment are focused on the restaurant industry.  For instance, if a waitress or cook works at two different restaurant locations, with both restaurants being owned by the same company, the waitress’ or cook’s time likely needs to be aggregated for purposes of overtime.  For instance, if the cook worked 25 hours at restaurant 1 and 20 hours at restaurant 2, the effect of horizontal joint employment would be the aggregation of these hours and the payment of 5 hours of overtime to the cook.

Vertical Joint Employment

Vertical joint employment exists when an employee of one employer is economically dependent on another employer.  An example might be a construction worker that works for a subcontractor, also is jointly employed by the general contractor, or a hotel that contracts for housekeeping services.

According to the interpretation, the threshold question is whether the intermediary employer (who may simply be an individual responsible for providing labor) is actually an employee of the potential joint employer.  In that case, all employees of the intermediary employer are employees of the potential joint employer.

If the intermediary employer is not an employee of the potential joint employer, then an analysis of the economic realities of the employee and potential joint employer is performed.  The economic realities are analyzed primarily via seven factors:

  • Does the potential joint employer direct, control or supervise the work performed beyond a reasonable degree of contract performance oversight;
  • Does the potential joint employer control employment conditions, e.g., can it hire, fire, discipline the employee or control the employee’s pay;
  • Does the employee have a indefinite, permanent or full-time relationship with the potential joint employer;
  • Is the work performed repetitive, unskilled or require little training;
  • Is the employee’s work an integral part of the potential joint employer;
  • Is the employee’s work performed on the potential joint employer’s premises;
  • Does the potential joint employer perform administrative functions for the employee, e.g., payroll, insurance, providing safety equipment, housing or transportation.

The interpretation provides examples of vertical joint employer in the construction and farm labor industries.

Conclusions

Employers can expect that the Department of Labor will continue to expand its enforcement reach over at least the coming year.  This latest interpretation regarding joint employer follows the National Labor Relations Board’s decision regarding joint employer last fall.  Whether it continues beyond January of 2017, depends upon what happens in the Presidential election this November.  Until we know for sure, however, employers need to take note of this new interpretation and self-audit their operations.

For employers with common ownership that operate multiple locations (including franchisees), if you share employees between those locations, you are likely a horizontal joint employer under this interpretation.  As a result, you must aggregate the hours that an employee works among all of your locations for overtime purposes.

For employers that utilize staffing agencies, labor providers or other intermediary employers, you are possibly a vertical joint employer.  As a result, you need to review and analyze your relationship with the staffing agency, labor provider and the employees to ensure that you are not a joint employer, who is jointly and severally responsible for minimum wage and overtime liabilities.

Also, there is something that bears monitoring beyond horizontal and vertical joint employment.  Several times in the interpretation, the Department of Labor references the “suffer or permit work” standard that is set forth in the FLSA (and child labor laws) to “prevent employers from using ‘middlemen’ to evade the laws’ requirements.”  The repeated reference to this phrase might be used in the future to justify further expansion of joint employer or other wage and hour provisions.

Franchisors who might have been expecting clarity from this interpretation did not get it, as the interpretation does not specifically address franchising.  Franchisors and franchisees must continue to monitor the actions of the Department of Labor in its application of joint employer related to the FLSA, NLRA, Title VII and OSHA.

For more information, feel free to contact James B. Shrimp via email jshrimp@highswartz.com

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

11 High Swartz Attorneys named to PA Super Lawyers and Rising Stars lists

High Swartz is pleased to announce that 11 of its attorneys have been named among Pennsylvania’s 2019 Super Lawyers and Rising Stars. Among the highlights are two inclusions on the 50 Top Female Lawyers in Pennsylvania list going to Melissa M. Boyd and Mary Cushing Doherty of the High Swartz Domestic Relations practice.

2019 High Swartz Super Lawyers Melissa Boyd David Brooman Mary Cushing Doherty Mark Fischer Gilbert High, Thomas Panzer Thomas Rees Joel Rosen
2019 High Swartz attorneys added to the Super Lawyers List

What is Super Lawyers?

The Super Lawyers list recognizes no more than 5 percent of attorneys in each state. The Super Lawyers Rising Stars list recognizes no more than 2.5 percent of attorneys in each state. To be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger, or in practice for 10 years or less. High Swartz 2019 Super Lawyers and Rising Stars are listed below in alphabetical order.

Melissa M. Boyd: Has been nominated to her 5th consecutive Super lawyer list preceded by 6 Rising Star distinctions. On top of her streak, Missy has been nominated to 3 Super Lawyers Top Lists in Pennsylvania. Those accolades are 100 Top Lawyers in Pennsylvania, 100 Top Lawyers in Philadelphia and 50 Top Female Attorneys in Pennsylvania. Missy is a partner and family law attorney with High Swartz and advocates in various areas including divorce, prenuptial and postnuptial agreements, child custody and child support, equitable distribution, alimony, adoptions, protection from abuse and juvenile law.

David J. Brooman: 2019 marks the return to the Super Lawyers list for David. This is his 10th selection. As a land development and litigation attorney, David J. Brooman has more than three decades experience in zoning and land use development, as well as environmental law.

Mary Cushing Doherty: This will be Mary’s 16th consecutive selection to the Super Lawyers list. Along with her distinction, she’ll join the 50 Top Female Lawyers in Pennsylvania list. With a distinguished record of professional and community service, Mary Cushing Doherty has more than 35 years of legal experience as a family law lawyer. She concentrates her practice on all aspects of marital dissolution and family law issues including divorce, child support, custody, spousal support and alimony, premarital agreement asset protection, complex property division, and is the chair of High Swartz’s Family Law practice.

Mark R. Fischer: Mark has been nominated to his second consecutive Super Lawyer designation. He focuses his practice primarily on representing businesses in breach of contract, payment collection, construction defect, and consumer protection disputes throughout Pennsylvania and New Jersey.

Gilbert P. High, Jr.: This will be Gil’s 14 section in a row. Gil’s impressive career is devoted primarily to the practice of municipal and Real Estate and Land Use Law. He regularly speaks on issues pertaining to municipal liability, particularly regarding the maintenance of the Urban Forest, a subject on which he has lectured nationally.

Thomas E. Panzer: This is Tom’s first and much-deserved selection to the Super Lawyers’ list. Thomas E. Panzer, a workers’ compensation attorney, joined High Swartz in 2016 as a result of a merger with McNamara, Bolla & Panzer, Attorneys at Law, a firm for which he served as Managing Partner. Mr. Panzer is active in his community and is currently the Bucks County, Pennsylvania Treasurer.

Thomas D. Rees: Elected to his 14th Super Lawyers list, Tom heads the firm’s Litigation and Employment Practice. He focuses his practice primarily on employment law and private education law. In the education area, Tom represents a number of independent schools in the Philadelphia area, handling employment, student discipline, contract, and governance matters.

Joel D. Rosen: As High Swartz’s Managing partner, Joel has been a Super Lawyer since 2017. With more than 30 years of legal experience as a corporate law attorney, Joel Rosen’s areas of practice include franchise law, business and commercial law, employment law, trademark/copyright law and commercial leasing.

list of 2019 high swartz super lawyers rising stars
2019 Rising Stars attorneys from High Swartz

Kevin Cornish: Recently elected as a partner at High Swartz, Kevin receives his 8th Super Lawyers Rising Star selection. Kevin focuses his practice on commercial, civil, and contract & multi-state litigation support. His clients include individuals as well as local, regional, and national businesses up and down the east coast.

Elizabeth Early: has been nominated to her third consecutive Rising Star selection. Her areas of specialization include divorce, custody, support, equitable distribution, pre and post-nuptial agreements, parenting coordination and abuse matters. Liz also serves as court-appointed counsel and guardian for minor children.

Brittany M. Yurchyk: High Swartz congratulates Brittany’s first nomination to the Super Lawyers’ list as a Rising Star. Specializing in alternative dispute resolution, Brittany concentrates her family law practice on equitable distribution, child custody, child and spousal support, abuse and domestic relations.

How were the High Swartz Super Lawyers selected to the list?

Super Lawyers nominates the best attorneys using a unique selection process. Peer evaluations and nominations are combined with independent research. Nominees are evaluated on 12 indicators from professional achievement through peer nominations. Nominations are made on an annual, state-by-state basis. The Super Lawyers objective is to create a credible, comprehensive and diverse listing of outstanding attorneys on a national level that can be used as a resource for attorneys and consumers searching for legal counsel. As an aid to those selecting a lawyer, Super Lawyers only selects outstanding local lawyers who are able to be retained by the public.

Stolen Employee Data: Pennsylvania Supreme Court Decision Breaks New Ground

In late 2018, the Pennsylvania Supreme Court decided that employees may sue employers for the release of stolen confidential employee data. The Court’s decision in the Dittman vs. University of Pittsburgh Medical Center, allowed University of Pittsburgh Medical Center (“UPMC”) employees to bring a class action for negligence after a data breach from UPMC’s computer systems.

The Decision’s Impact

The Court’s decision will have a far-reaching impact. First, the decision will require employers to use reasonable care to protect employees’ personal and financial information. Second, the decision allows negligence lawsuits even where the plaintiffs’ losses were purely economic and no physical injury or tangible property damage occurred. As such, the decision limits the “economic loss doctrine” that courts had used to dismiss such lawsuits.

The Back Story

The cyber attack took place in 2014. The data breach led to the theft of 62,000 employees’ names, addresses, birth dates, social security numbers, salaries, or tax and bank information. The hackers taking the information then used the stolen data to file fraudulent tax returns and steal employees’ tax refunds.

The Lawsuit

Right after the breach, a group of employees sued UPMC for negligence and breach of implied contract. The employees contended that UPMC had a duty to use reasonable care to protect employees’ personal and financial information from being compromised, lost, stolen, misused, and /or disclosed to unauthorized parties. The employees claimed that UPMC had breached this duty. Specifically, UPMC had (1) failed to undertake adequate security measures, (2) failed to monitor network security, (3) allowed unauthorized access to information, and (4) failed to recognize that information had been compromised. The employees alleged that UPMC failed to meet current standards for encryption, firewalls, and authentication.

UPMC filed preliminary objections seeking immediate dismissal of the complaint. UPMC argued that no duty of care existed to protect against data breaches, and that the economic loss doctrine barred negligence claims.

The Lower Courts Dismiss the Case

The Allegheny County Court of Common Pleas agreed with UPMC and dismissed the employees’ suit. The Court both relied on the economic loss doctrine and held that courts should not create a new affirmative duty of care to protect against data breaches. The Court had concerns that this new duty of care would flood the court system with lawsuits. The Court also said that data breach liability was a policy issue to be addressed by the legislative branch.

The employees appealed to the Superior Court, where a three judge panel upheld the lower court in a 2-1 decision. One dissenting judge stated that employers have a duty of care to protect against data breaches.

The PA Supreme Court Allows Employees to Sue for Data Breach

After accepting the case for appeal, the Pennsylvania Supreme Court overturned the two lower court decisions on both the duty of care and the economic loss issues. The Supreme Court held that UPMC had the duty to protect employee information since UPMC had taken the affirmative step to require employees to provide certain information. The Court said that this duty existed despite the intervening third party theft, because theft was foreseeable without proper data protection.

On the economic loss issue, the Court allowed a negligence claim for economic loss where a duty existed outside the parties’ contractual relationship. The Court found that the employees alleged that UPMC had a duty, outside any contract, to act with reasonable care in collecting and storing personal and financial information on computer systems. The Court’s decision is a setback for efforts to invoke the economic loss doctrine in defending against business-related tort claims.

Practical Implications: Employers Need to Use Reasonable Care to Protect Employee Data

What are the practical implications of the UPMC ruling? Employers will have to take additional steps to lock down confidential employee information. The decision will affect every employer, since all employers collect confidential data in the course of setting up basic transactions like direct deposit and tax and social security withholding. Legislative action may also provide more specific guidance on data protection. The decision will have a continuing effect in the workplace and in development of new data protection policies.

High Swartz named among 2019 ‘Best Law Firms’ by U.S. News – Best Lawyers

Full-service law firm in Bucks and Montgomery counties recognized for prowess in Family Law, Municipal Law, Real Estate Law and Litigation - Real Estate, Land Use and Zoning

High Swartz LLP, a full-service law firm with offices in Norristown and Doylestown, Pennsylvania, is pleased to announce that it has been named a “Best Law Firm” for 2019 by U.S. News – Best Lawyers®, achieving a Tier 1 ranking in the Philadelphia Metropolitan area in the practice areas of Family Law, Municipal Law, Real Estate Law and Litigation - Real Estate, Land Use and Zoning and National Tier 2 ranking for Land Use and Zoning Law.

To be eligible for a Best Law Firm ranking, a firm must have at least one lawyer included in The Best Lawyers in America©. Attorneys are neither required nor allowed to pay a fee to be listed. For 2019, 9 High Swartz attorneys were named among Best Lawyers:

Best Law Firm rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field and review of additional information provided by law firms as part of the formal submission process.

The highest honor, a Tier 1 ranking, is based on a firm's overall evaluation, which is derived from a combination of its clients' impressive feedback, the regard that lawyers in other firms in the same practice areas have for the firm, and information that the firm provided to Best Lawyers via a survey.

What is garden leave?

What is garden leave (also known as 'gardening leave')?

The term sounds pastoral, but its use is practical. Very simply, it is an agreed-upon period when an employer pays a departing key employee not to work before the employee joins a competitor.

Originating in England, it means that the employee is to stay “in the garden” for the term of the leave.

Garden leave is similar, but not identical, to other contracts where an ex-employee is paid in lieu of working for a competitor. On occasion, an employer agrees to a “safety net” or “bench pay” and pays the ex-employee’s salary  for the length of a non-compete. The ex-employee must first show that the noncompete prevents them from obtaining suitable work. Garden leave, by contrast, is unconditional. Also, in garden leave, the employee remains on the payroll; in a “bench pay” situation, the employee has already left.

While the employee is on garden leave, the previous employer has the opportunity to contact the departing employee’s customers in an attempt to retain them. The departing employee has what amounts to a paid vacation and must not work for a competitor during this period. Once this period ends and the employee starts with the new firm, it is open season: both the departing employee and the old employer may solicit and pursue business freely.

How long does it last?

Garden leave can range from several months through a year. During the leave period, the employee does no work for either the old employer or the prospective employer. The employee defers the start date with the new employer until the end of the leave period.

Who uses it?

Garden leave is used most often in the investment banking and financial service sectors. In effect, it takes the place of non-competition and non-solicitation agreements. Many of the firms using garden leave are in the Northeast and Mid-Atlantic regions. During the past ten years, courts in these areas have begun to deal with garden leave provisions. This trend is likely to continue.

What are some of the advantages and disadvantages of garden leave?

The employer gains a brief period when only the employer can contact the departing employee’s clients without fear of competition from the employee. However, this period is far shorter than the periods that courts have found to be reasonable in enforcing non-competes.

The employee bears the burden of separation from customers and the possible stigma of not being active in the industry for a brief period. In exchange, the employee knows that, after expiration of a much shorter restrictive period, the former employer’s customers are fair game.

The employee must realize that the no-contact rule during garden leave is very important. Because the employee is still on payroll, any attempt by the employee to divert business to a new firm would violate multiple obligations, including the garden leave contract itself; the duty of loyalty that employees owe to employers; and possibly the obligations to preserve confidential employer information and trade secrets.

Why do employers use garden leave?

Garden leave has the benefit of being a less costly, more certain way to sever ties with an employee who poses a competitive threat.

Its use depends on an ex-employers motivation to pursue and secure business that might otherwise migrate with the departing employee. The goal for the employer becomes how to retain this business. This is a more positive focus than the that of non-compete litigation, where the goal is to keep the departing employee from retaining customers or entering into competition.

If you are in need of legal advice related to garden leave or any other employment law matter, please contact Thomas D. Rees at 610-275-0700 or trees@highswartz.com. Our employment lawyers at our Norristown and Doylestown law firm are here to help.

You Must be a Current Employee to Review your Personnel File!

July 18, 2018

By Thomas D. Rees, Esquire

Personnel File

Last year, the Pennsylvania Supreme Court held that only current employees have the right to review their personnel files under the Pennsylvania Personnel Files Act.  This decision in Thomas Jefferson University Hospitals, Inc. v. Pennsylvania Department of Labor and Industry, 162 A.3d 384 (Pa. 2017), does not seem surprising.  After all, the statute defines “employee” as a person “currently employed” or someone on layoff with rights to return to work or on leave of absence.

Pennsylvania’s Personnel Files Act gives employees the right to review their own employer-maintained personnel files to determine the employee’s own qualification for employment, promotion, compensation, or termination.  The Department of Labor and Industry has the power to enforce the Act.  By not allowing ex-employees the right to review personnel files, Pennsylvania’s statute differs from the majority of state statutes that provide for access to personnel files.  However, many states do not have any statute permitting employees to review their personnel files.

The Jefferson Hospital decision resolved 20 years of uncertainty in the law.  The uncertainty stems from both vague drafting of the statute and the Commonwealth Court’s 1996 decision in Beitman v. Department of Labor and Industry, 675 A.2d 1300 (Pa. Cmwlth. 1996).  The Beitman decision refused to allow a terminated employee to inspect her own personnel file two years after termination.  But the Court stated that an employee could inspect a personnel file within a reasonable time after termination in order to ascertain the reason for termination.  This statement about a “reasonable time” was dictum- a fancy legal term for a statement that was not essential to the Court’s ruling.

The Beitman decision became known more for this dictum on what an employee might be able to do (review a personnel file reasonably soon after termination) than its denial of review to the plaintiff employee.  And so terminated employees started asking to review their files.  The Bar and the Department of Labor and Industry then had to figure out when after termination it was too late to inspect a file.  Was one week too late?  One month?  Six months?  Labor and Industry decided that 30 days after termination was a logical cutoff date.

In 2013, a terminated Jefferson Hospital employee asked to inspect her file a week after termination.  The hospital rejected her request.  Labor and Industry ruled in favor of the employee and the hospital appealed to the Commonwealth Court, which upheld her right to review the file.

The Supreme Court reversed the Commonwealth Court unanimously.  The Supreme Court held  that “current employee” means an individual who is presently employed.  The Court overruled the statements in Beitman allowing ex-employee review to the extent that these statements were more than dictum. 

The Supreme Court’s decision helps to restore certainty to the law.  In effect, the Court has held that the Act means what it says and means what most readers initially thought it meant.  There is always the chance for future disputes, however, over when one ceases to be an employee.  For example, can a terminated employee with two weeks of accrued vacation review a personnel file as a current employee during the two weeks after termination?  Stay tuned.

If you have any questions, please contact Thomas D. Rees at 610-275-0700 or via email at trees@highswartz.com. The High Swartz employment law attorneys provide businesses and nonprofit organizations throughout the Pennsylvania region, including Bucks County, Montgomery County, Delaware County, Philadelphia and Chester County with sound advice and excellent representation.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.