Wednesday, May 17, 2006

contracts - integration clause

Glassmere Fuel Service, Inc. v. Clear - Superior Court - May 15, 2006

Plaintiff sued Defendant for its failure to comply with an agreement that would have turned D's convenience store into a BP gas station. Plaintiff alleged the Defendant "failed to obtain financing in violation of an 'implied term' of the agreement. Defendant noted that the agreement did not expressly require it to obtain financing and that the agreement's integration clause barred Plaintiff's action.

Held, integration clause barred inconsistent parol evidence of alleged prior representations, unless the representations were omitted because of fraud, accident or mistake. Where contract terms are clear and unambiguous, there is no need to consider other evidence to aid in interpretation.

The doctrine of necessary implication does not apply unless it is "necessary to prevent injustice and it is abundantly clear that the parties intended to be bound by" the alleged missing term, which was not found to be the case here. Plaintiff had other remedies for Defendant's failure to fulfill the contract.

UC- willful misconduct - drug test

Turner v. UCBR - Commonwealth Court - May 16, 2006

In a 4-3 decision, claimant (CL) was held to have violated the drug disqualification section of the UC Law, 43 PS 802(e.1), where his unemployment was "due to discharge....from work due to failure to submit and/or pass a drug test conducted pursuant to an employer's established substance abuse policy."

The UC Service Center had ruled on the basis of sec. 801(e.1), but the referee and Board ruled on the basis on 402(e), the general willful misconduct section. The Court ultimately ruled CL ineligible in the basis of sec. 801(e.1), pursuant to a series of cases holding that it can affirm an agency decision on other grounds, where those grounds appear on the record of the case.

CL argued that the ER's policy only prohibited drug use while he was on duty, and that there was no proof of that. The court rejected that argument, noting that "while a literal reading of one portion of employer's policy supports claimant's argument...., viewing the entire policy in context belies this claim....'Claimant's submission to the condition of random drug testing is sufficient to infer Claimant's understanding that he had to abstain from any drug use....' Szostek v. UCBR, 541 A2d 48, 50 (Pa. Cmwlth. 1988).' The random testing provision....enforces the requirement that employees not only refrain from on-duty drug use but also be free from drugs remaining in employee's systems while on-duty. Otherwise the test would serve no purpose, because a positive test would be meaningless, or at least could result in no consequences absent independent direct proof of on-duty use. Thus, we conclude that claimant's positive test for marijuana constituted a violation of employer's substance abuse policy."

The court also held that the "testimony of the supervisor of those persons who are actually performing the drug testing of a urine specimen is sufficient to establish the reliability and trustworthiness of the evidence under" the business records as evidence act, 42 Pa. C.S. 6108(b), citing Artis v. UCBR, 699 A.2d 849, 852 (Pa. Cmwlth. 1997). The court said that the testimony of the vice-president and director of toxicology of the lab that did the drug test "provided very detailed and sufficient information relating to the preparation of claimant's drug test result and justified not only a presumption about the trustworthiness of this record but its admission."

Judges Colins and Pelligrini dissented "[b]ecause of cross-examination, the toxicologist admitted the he could not tell from the test results whether the claimant used marijuana or was under the influence of marijuana while on duty," stating that without that evidence "there is not substantial evidence to support the conclusion that claimant violated the employer's drug policy."

Judge Friedman concurred and dissented, citing the same testimony of the toxicologist. She said that the record was "devoid of evidence establishing that Claimant used drugs while on duty, as prohibited by" the ER's policy, and that the Board thus erred in affirming the referee's decision based on 401(e). She "strongly object[ed] to the majority's analysis insofar as it eschews a literal reading of Employer's rules in favor of a broad interpretation of Employer's policy as a whole," noting the a rule violation must be knowing and deliberate. "[k]nowledge of the work rule or policy is a prerequisite to a knowing and deliberation [sic] violation of the same....I believe that this court violates long-standing principles of law when it engages in any 'interpretation' of an employer's rule or policy." However, she "reluctantly" concurred because the Court has the power to affirm on other grounds, i.e., sec. 402(e.1), which appear on the record.

This decision seem consistent with the Court's recent apparent willingness to bend the usual rules in drug cases. See, e.g., UGI Utilities, 851 A.2d 240 (Pa. Cmwlth. 2004) and Ruiz v. UCBR - Commonwealth Court - November 30, 2005,