UC - voluntary quit - safety concerns - objective evidence

Morgan v. UCBR – Cmwlth. Court – May 29, 2020 – unreported* memorandum opinion

Claimant that it was necessary for him to quit his job out of fear for the safety of the children served by Employer and “concern” for his own professional reputation if he continued to work for Employer under circumstances involving alleged child neglect. 

. . . The Board and Employer7 argue that Claimant failed to meet his burden, because he did not sufficiently describe any reasons for his concerns or fears before the Referee but instead made nonspecific, conclusory statements that conditions were unacceptable. The Board also emphasizes Claimant’s admission that he spoke only to his friends—not to Employer—about his concerns, and that he did not discuss his concerns with anyone until the day before he voluntarily quit. 

We agree with the Board and Employer that Claimant failed to establish a necessitous and compelling reason to quit. Although safety concerns may give rise to such reasons, the claimant must “demonstrate[] by objective evidence” that the workplace is actually unsafe, and “‘fears’ alone do not constitute a compelling reason to resign.” Green Tree Sch. v. Unemployment Comp. Bd. of Review, 982 A.2d 573, 578 (Pa. Cmwlth. 2009). Here, Claimant offered no objective evidence that the conditions of his employment were unsafe, either for himself or for the children served by Employer. Accordingly, Claimant failed to demonstrate circumstances that exerted real and substantial pressure on him to terminate his employment. 

Whether a claimant had cause of a necessitous and compelling nature for leaving work is a question of law subject to this Court’s review. Brunswick Hotel & Conference Ctr., LLC v. Unemployment Comp. Bd. of Review, 906 A.2d 657, 661 (Pa. Cmwlth. 2006). A claimant who voluntarily terminates his employment “bears the burden of proving that necessitous and compelling reasons motivated that decision.” Fitzgerald v. Unemployment Comp. Bd. of Review, 714 A.2d 1126, 1129 (Pa. Cmwlth. 1998), appeal denied, 794 A.2d 364 (Pa. 1999). To establish cause of a necessitous and compelling nature, a claimant must establish: (1) circumstances existed that produced real and substantial pressure to terminate employment, (2) like circumstances would compel a reasonable person to act in the same manner, (3) the claimant acted with ordinary common sense, and (4) the claimant made a reasonable effort to preserve his employment. Procito v. Unemployment Comp. Bd. of Review, 945 A.2d 261, 264 (Pa. Cmwlth. 2008) (en banc). 

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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

evidence- digital evidence - Rule 901

Order – effective date 10-01-2020

http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-attach%20-%20104429584100888982.pdf?cb=1

Rule 901         http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-attach%20-%20104429584100888982.pdf?cb=1

Final report   http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-report%20-%20104429584100889049.pdf?cb=1

admin. law - legislative-rulemaking

http://www.pacourts.us/assets/opinions/Commonwealth/out/674MD16_5-12-20.pdf?cb=1

Hommrich v. PUC – May 12, 2020 – Cmwlth. Court – reported decision

This is a PUC case but has some issues of general relevance.

Legislative Rule-Making v. Interpretive Rule-Making

The Supreme Court of Pennsylvania “has long recognized the distinction in administrative agency law between the authority of a rule adopted pursuant to an agency’s legislative rule-making power and the authority of a rule adopted pursuant to interpretive rule-making power.” Popowsky v. Pennsylvania Public Utility Commission, 910 A.2d 38, 53 (Pa. 2006) (citations omitted).

“Legislative rule-making [emphasis added] is an exercise of legislative power by an administrative agency, pursuant to a grant of legislative power by the legislative body, and is valid and is as binding upon a court as a statute if it is: (a) within the granted power, (b) issued pursuant to proper procedure, and (c) reasonable.” Id.; accord Tire Jockey Service, Inc. v. Department of Environmental Protection, 915 A.2d 1165, 1186 (Pa. 2007). “Generally, a legislative regulation establishes ‘a substantive rule creating a controlling standard of conduct.’” Borough of Pottstown v. Pennsylvania Municipal Retirement Board, 712 A.2d 741, 743 (Pa. 1998) (quoting Slippery Rock Area School District v. Unemployment Compensation Board of Review, 983 A.2d 1231, 1236 (Pa. 2009)). 

“An interpretative rule [emphasis added] on the other hand depends for its validity not upon a law-making grant of power, but rather upon the willingness of a reviewing court to say that it in fact tracks the meaning of the statute it interprets.” Popowsky, 910 A.2d at 53. Legislative regulations are binding whereas interpretative regulations are merely entitled to deference. Slippery Rock, 983 A.2d at 1236.

All regulations, whether legislative or interpretative, “must be consistent with the statute under which they were promulgated.” Popowsky, 910 A.2d at 53.

PUC’s Granted Power – does the regulation fall within Legislature’s grant of authority?

“To determine whether a regulation is adopted within an agency’s granted power, we look for statutory language authorizing the agency to promulgate the legislative rule and examine that language to determine whether the rule falls within the grant of authority.” Marcellus Shale Coalition v. Department of Environmental Protection, 216 A.3d 448, 459 (Pa. Cmwlth.), appeals quashed, 223 A.3d 655 (Pa. 2019) (citing Slippery Rock, 983 A.2d at 1239-41).

We consider “the purpose of the statute and its reasonable effect” and whether “the regulation is consistent with the enabling statute.” Id. “Clearly[,] the legislature would not authorize agencies to adopt binding regulations inconsistent with the applicable enabling statutes.” Slippery Rock, 983 A.2d at 1241.

When regulation conflicts with the statute

“When . . . a regulation presents ‘an actual conflict with the statute,’ we cannot reasonably understand the regulation to be within the agency’s ambit of authority, and the statute must prevail.” Marcellus Shale, 216 A.3d at 459 (quoting AMP Inc. v. Commonwealth, 814 A.2d 782, 786 (Pa. Cmwlth. 2002), aff’d, 852 A.2d 1161 (Pa. 2004)). Indeed, “a regulation that is at variance with a statute is ineffective to change the statute’s meaning.” Geisinger Health System v. Bureau of Workers’ Compensation Fee Review Hearing Office (SWIF), 138 A.3d 133, 139 (Pa. Cmwlth. 2016). 

“That is so because ‘the power of an administrative agency to prescribe rules and regulations under a statute is not the power to make law, but only the power to adopt regulations to carry into effect the will of the Legislature as expressed by the statute.’” Id. (quoting Volunteer Firemen’s Relief Association of the City of Reading v. Minehart, 227 A.2d 632, 635-36 (Pa. 1967)). “When an agency adopts regulations at variance with the statute, the regulations, and not the statute, fall by the wayside.” Id. (citing Union Electric Corporation v. Board of Property Assessment, Appeals and Review of Allegheny County, 721 A.2d 823 (Pa. Cmwlth. 1998), rev’d on other grounds, 746 A.2d 581 (Pa. 2000)).

Broad grant of power v. narrow grant of power to agency
Sometimes, the General Assembly confers broad power. For example, in Section 201(a) of the Unemployment Compensation Law,7 the General Assembly vested power in the Department of Labor and Industry (L&I) “to adopt, amend, and rescind such rules and regulations . . . as it deems necessary or suitable. Such rules and regulations shall not be inconsistent with the provisions of this act.” In Slippery Rock, our Supreme Court described this power as “broad” and one that encompassed L&I’s authority “to define by regulation terms otherwise undefined by the statute.” Slippery Rock, 983 A.2d 1239. In Pennsylvania Human Relations Commission v. Uniontown Area School District, 313 A.2d 156, 168-71 (Pa. 1973), the Supreme Court held that similar statutory language in Section 7(d) of the Pennsylvania Human Relations Act8 allowed the PHRC to promulgate a regulation that defined “de facto segregation” in such a way that it imposed strict desegregation standards and new accompanying duties on public schools.  In contrast, the powers the General Assembly conferred to the PUC under the AEPS Act are much narrower. Sunrise Energy, 148 A.3d at 901. . . .

We recognize the PUC’s broad authority in regulating public utilities under the Code. As this Court recently opined, “the General Assembly intended the PUC to occupy the field of public utility regulation, in the absence of an express grant of authority to the contrary.” Delaware Riverkeeper Network v. Sunoco Pipeline L.P., 179 A.3d 670, 692 (Pa. Cmwlth.), appeal denied, 192 A.3d 1106 (Pa. 2018). However, we are not dealing with “public utilities” here. See 66 Pa. C.S. §102 (definition of “public utility”). Rather, the AEPS Act applies to “customer-generators,” which by definition are not public utilities. See Section 2 of the AEPS Act, 73 P.S. §1648.2. 

We, therefore, conclude that the PUC’s authority in this matter derives solely from the AEPS Act, and not the Code. . . .Under the AEPS Act, the PUC’s authority is limited to developing “technical and net metering interconnection rules.” Section 5 of the AEPS Act, 73 P.S. §1648.5.

Reasonableness
In deciding whether a legislative regulation is reasonable. . . .a court may not substitute its own judgment for that of the agency. To demonstrate that the agency has exceeded its administrative authority, it is not enough that the prescribed system of accounts shall appear to be unwise or burdensome or inferior to another. Error or lack of wisdom in exercising agency power is not equivalent to abuse. What has been ordered must appear to be so entirely at odds with fundamental principles as to be the expression of a whim rather than an exercise of judgment. Tire Jockey, 915 A.2d at 1186 (internal quotations and citations omitted); accord Slippery Rock, 983 A.2d at 1242.

“[A]ppellate courts must accord deference to the agency and may only overturn an agency determination if the agency acted in bad faith or the regulations constituted a manifest or flagrant abuse of discretion or a purely arbitrary execution of the agency’s duties or functions.” Popowsky, 910 A.2d at 55; accord Tire Jockey, 915 A.2d at 1186.

However, when there is express, contradictory language in the statute conferring regulatory authority, a proposed regulation would be deemed “unreasonable.” See Keith v. Commonwealth, 151 A.3d 687, 695 (Pa. Cmwlth. 2016). Nevertheless, “where legislative rules are adopted within the agency’s granted power and issued pursuant to proper procedure, they enjoy a presumption of reasonableness.” Marcellus Shale, 216 A.3d at 460.

consumer - debt collection - FDCPA - oral v. written dispute of validity of debt

Riccio v. Sentry Credit – 3d Cir. – March 30, 2020

https://www2.ca3.uscourts.gov/opinarch/181463p.pdf

A panel of this Court previously concluded § 1692g(a)(3) requires that “any dispute, to be effective, must be in writing.” Graziano, 950 F.2d at 112. Yet reading the statutory text with fresh eyes—and more importantly, with the past three decades of Supreme Court statutory- interpretation caselaw—we think § 1692g(a)(3) permits oral disputes. The plain language and meaning § 1692g(a)(3) permits a debtor to dispute a debt orally. 

Other courts have reached the same conclusion. The Second, Fourth, and Ninth Circuits reject a writing requirement, openly splitting with Graziano. See Clark v. Absolute Collection Serv., Inc., 741 F.3d 487, 490-91 (4th Cir. 2014) (per curiam); Hooks v. Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282, 285-86 (2d Cir. 2013); Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078, 1080-81 (9th Cir. 2005). And without noting the split, the First, Fifth, Sixth, and Seventh Circuits have taken the same position. See Macy v. GC Servs. Ltd., 897 F.3d 747, 757- 58 (6th Cir. 2018); Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 347 n.6 (7th Cir. 2018); Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246, 249-50 (5th Cir. 2017); Brady v. Credit Recovery Co., 160 F.3d 64, 66- 67 (1st Cir. 1998). 

In sum, we no longer think § 1692g(a)(3) requires written disputes. Simply put, “Congress did not write the statute that way.” United States v. Naftalin, 441 U.S. 768, 773 (1979). Subsections (a)(4), (a)(5), and (b) command a written dispute; (a)(3) does not. “We would not presume to ascribe this difference to a simple mistake in draftsmanship.” Russello, 464 U.S. at 23. 

In short, we conclude that debt collection notices sent under § 1692g need not require that disputes be expressed in writing. In doing so, we overrule Graziano’s contrary holding. Because Sentry Credit’s notice perfectly tracked § 1692g’s text, we will affirm the judgment of the District Court. 

language access - LEP - criminal defendant - right to counsel

Cmnwlth. v. Diaz – Pa. Supreme Court – March 26, 2020 (5-2) 

http://www.pacourts.us/assets/opinions/Supreme/out/J-57-2019mo%20-%2010438223398893021.pdf?cb=1 - majority

In this discretionary appeal, the Commonwealth challenges the Superior Court’s application of United States v. Cronic, 466 U.S. 648 (1984), to find that trial counsel’s failure to secure a Spanish language interpreter for Miguel Diaz (“Diaz”) on the first day of his criminal trial constituted per se prejudice as Diaz was not a native English speaker and could not fully understand the proceedings. 

We conclude that where the absence of a needed interpreter at a critical stage of trial obstructs his ability to communicate with counsel, Cronic applies such that the defendant need not prove that he or she was prejudiced by a Sixth Amendment violation. Based on the record and the standard by which we review this case, we find that the Superior Court correctly concluded that Cronic was applicable and that no specific showing of prejudice was required because of the absence of an interpreter on the first day of trial during critical stages of the proceeding. 

Dissent – Dougherty - http://www.pacourts.us/assets/opinions/Supreme/out/J-57-2019do%20-%2010438223398874590.pdf?cb=1

Dissent- Mundy - http://www.pacourts.us/assets/opinions/Supreme/out/J-57-2019do1%20-%2010438223398874557.pdf?cb=1

UC - Board erred in raising an issue not raised by claimant, employer, or Department

Quigley v. UCBR – Commonwealth Court – en banc – reported decision – January 28, 2020

Majority (5) & dissent (2) http://www.pacourts.us/assets/opinions/Commonwealth/out/1449CD17_1-28-20.pdf?cb=1

N.B. This case was litigated by Julia Simon-Mishel of PLA.

In a 5-2 en banc decision, the Court held that the UCBR erred when it addressed an issue (claimant’s alleged self-employment v. sideline activity) when neither the separating employer nor the Department had raised the issue.  

The case came before the UCBR when claimant appealed from UCSC and referee decisions finding her eligible for benefits but deducting what claimant believed to be an incorrect amount, based on her sideline earnings.  Also of note: claimant’s request for continuance of the referee hearing was denied, and she did not attend the hearing. 

On appeal to the Board, the UCBR reversed the referee, holding that claimant was not eligible for benefits in any amount, because she had not presented any evidence that she qualified for the sideline activity exception under sec. 402(h) of the UC Law, 43 P.S. sec. 802(h), which says that a person is not eligible to get UC when “engaged in self-employment” provided however, the such work is a sideline activity, that is – it is not the claimant’s “primary source of livelihood.”

Majority opinion

Specifically noting the remedial nature of the UC Law under sec. 3, 43 P.S. sec. 752, the court held that the Board exceeded its admittedly broad right of review of a referee decision, because “Claimant’s eligibility was never in dispute. Both the UC Service Center and the Referee held that she was eligible for unemployment benefits because her self-employment was limited to a sideline activity. Employer did not contest her eligibility, and neither did the Department. Rather than decide the controversy presented, which pertained to benefit calculation, the Board transformed the nature of the controversy to one of benefit eligibility. This was problematic because there was in fact no controversy over Claimant’s eligibility. Consequently, Claimant had no notice that the Board would review her eligibility, because it had not been contested by Employer or by the Department.”

due process – notice – opportunity to be heard -- The court decided that under the circumstances, claimant had been denied due process. “Although the regulation at 34 Pa. Code §101.87 authorizes a tribunal to consider all “issues expressly ruled upon” below, the appeal process must still comport with due process. Thus, there must be a controversy between at least two of the parties at every stage of the appeal. . . .” – not the case here, absent an appeal by either the employer or Department.

After denying the claimant’s request for continuance and in her absence, the UCBR “decided her appeal on the basis of the Department’s records. The Board reversed because Claimant did not appear at the Referee hearing to prove her eligibility, and then the Board refused to give Claimant an opportunity to explain her nonappearance. Fundamental due process requires notice and an opportunity to be heard, and this constitutional principle must inform the Department’s procedural rules for unemployment compensation appeals.”

The court was careful to note the precise circumstances of the case: “Our holding limited to the circumstances presented in the case sub judice, i.e., where the claimant, through no fault of her own, becomes unemployed; where the claimant is found to be eligible for unemployment benefits and no party challenges her eligibility; and where, on review of the claimant’s appeal of the computation of her unemployment benefit amount, the Board sua sponte raises the issue of her eligibility for benefits.”

Due process - commingling of functions – The court agreed with the claimant “the Board applied the Department regulations in a way that improperly commingled the Department’s prosecutorial and adjudicatory functions. This violates due process as our Supreme Court established in Lyness v. State Board of Medicine, 605 A.2d 1204, 1209-10 (Pa. 1992).”

The “UC Service Center determined that Claimant was entitled to benefits under Section 402(h) of the Law, subject to a weekly deduction for her sideline business income. Claimant appealed, challenging only the monetary amount of the deduction. Indeed, Claimant could not have appealed the issue of her eligibility for benefits under the sideline business provision of Section 402(h) of the Law because she was not aggrieved by that determination. The only portion of the UC Service Center determination, and later Referee decision, that Claimant could have appealed was the amount of prorated earnings that determined her weekly deduction. 

The Referee held a de novo hearing, in which the Department could have participated. It did not. Similarly, if the Department had an issue with the Referee’s decision to affirm the UC Service Center’s eligibility determination, it could have appealed to the Board. It did not. The Board reversed Claimant’s eligibility even though that issue could not have been raised by Claimant, but only by the Department or Employer. By doing so, the Board put itself in the role of the adversary, and in the case of self-employment, within the prosecutorial role of the Department. Such commingling of prosecutorial and adjudicatory functions is improper.”

The court held that the “ ‘prosecutorial’ actor in all unemployment compensation matters is the Department, and it may challenge any determination on eligibility for benefits. Although it is the employer that typically opposes a claimant’s eligibility, we cannot just ignore the Department’s statutory prosecutorial role, as do the dissenting judges. The Board’s function is solely adjudicatory. It must not take on the Department’s prosecutorial function by revisiting the referee’s holding on benefit eligibility unless the Department raises that challenge.” In UC cases, the “Board’s function is solely adjudicatory.”

The majority thus concluded that

Claimant, through no fault of her own, became unemployed; was ruled eligible for unemployment benefits; and no party challenged her eligibility. On review, the Board sua sponte raised the eligibility issue and prevented Claimant from presenting evidence. Simply, the Board denied Claimant a fair hearing. Further, the Board erred by assuming the prosecutorial role of the Department when it raised the issue of Claimant’s eligibility for benefits and held that she was ineligible. In commingling the prosecutorial and adjudicatory functions, the Board created an appearance of impropriety and bias. The Board’s actions have contravened the remedial purpose of the Law, due process and fundamental fairness. 

For these reasons, we vacate the Board’s order and remand the matter to the Board to remand to a referee to conduct a hearing to determine whether the deduction from Claimant’s weekly benefit amount for her sideline business income was properly calculated. 

Dissent of Judge Cohn Jubilerer

The judge felt that the majority “examined this matter sympathetically rather than legally, as reflected in its deviation from the Law, the regulations, and longstanding precedent. . . .”

Section 3 “remedial purpose” language “may not, in ‘the pretext of pursuing its spirit,’ disregard the Law’s clear and unambiguous language. Thus, in addition to excluding those who are unemployed due to their own fault, whether by voluntarily quitting without cause of a necessitous, compelling nature or engaging in willful misconduct connected with their work, the General Assembly excluded those who are engaged in self-employment.. . . . It has long been held that the Law is not intended to protect those who are engaged in business for themselves or who are failed entrepreneurs. . . . Although there is an exception to this exclusion, the sideline business exception, which is at issue here, that exception requires the claimant to establish that the sideline business was not the claimant’s primary livelihood. [editor’s note – there should have been some specific discussion about burden of proof].

The Board has a duty to consider all issues in the case.  There is “nothing in the regulations indicate that the Board’s obligation to review those issues expressly ruled upon is subject to the approval of the parties. 43 P.S. § 824; 34 Pa. Code §§ 101.87, 101.107(b). The Court should also be guided by the long established principle that, in addition to the Board’s fact finding role set forth in Section 504 and the regulations, the Board “has a duty to protect the [UC] fund from ineligible claimants and to investigate all the facts in a given case.” 

A “determination regarding the rate of compensation in self- employment cases by its very nature encompasses the question of eligibility for those benefits under Section 402(h) of the Law. Section 402(h) provides that an employee is ineligible for benefits if the employee engages in self-employment. 43 P.S. § 802(h). The exception to this ineligibility, also found in Section 402(h), is the sideline business exception – which is the exception Claimant relies upon to claim she is not ineligible for UC benefits. 

To qualify for this exception, Claimant had to establish that: (1) the self-employment began prior to the termination of the full- time employment; (2) the self-employment continued without substantial change after the employee’s termination; (3) the employee remained available for full-time employment; and “(4) the self-employment was not the primary source of [her] livelihood.”. . . .Under this standard, the Section 402(h) inquiry considers a claimant’s self-employment income for purposes of both eligibility (that it was not the primary source of the claimant’s livelihood) and the weekly rate of compensation (by how much the claimant’s UC benefits should be reduced) should the exception be established. Therefore, an appeal as to the rate of compensation, which requires a review of the claimant’s self-employment income, necessarily implicates questions of eligibility and vice versa. An appeal as to one is an appeal to both. 

Second, and more importantly, the Board was required to review the question of Claimant’s eligibility under the Law, the regulations, and longstanding precedent because that issue had been ruled upon by both the local service center and the Referee. The Referee specifically held that Claimant was “NOT DISQUALIFIED from receiving compensation under [Section 402(h)].” . . . .As discussed, under Section 504 of the Law the Board is the ultimate fact finder that determines a claimant’s eligibility for benefits based on its de novo review. Per that section, “[t]he [B]oard shall have power . . . on appeal . . . [to] review any claim . . . decided by[] a [R]eferee . . . .” 43 P.S. § 824. . . The Department’s regulations similarly reflect that issues expressly ruled upon by either a local service center or a Referee are subject to the Board’s ultimate review. 

Since 1981, this Court has consistently held that these provisions give the Board jurisdiction to consider any issue expressly ruled upon in the determination being appealed even though the appealing party “did not intend to reopen the inquiry into . . . issue[s that] had been resolved in [the party’s] favor.” . . .  In.Black Lick Trucking, Inc. v. Unemployment Comp. Bd. of Review, 667 A.2d 454, 457 (Pa. Cmwlth. 1995) we explained that these provisions “mean that whatever issues the [local service] center addressed the [R]eferee should likewise address, and the Board in turn should decide all of the issues the [R]eferee considered, regardless of whether a party specifically raised the issue on appeal.” 667 A.2d at 457. 

admin. law - federal ALJs - appointments clause - ED Pa. case

Sanchez v. Commissioner – ED Pa. – January 29, 2020

https://www.paed.uscourts.gov/documents/opinions/20D0078P.pdf

Ana Luz Sanchez (“Plaintiff”) seeks judicial review, pursuant to 42 U.S.C. § 405(g), of the final decision of the Commissioner of the Social Security Administration (“the Commissioner”) denying her claim for Disability Insurance Benefits (“DIB”) and Supplemental Security Income (“SSI”) under Titles II and XVI of the Social Security Act.

In her request for review, Plaintiff raises four claims, one which is premised on Lucia v. Securities and Exchange Commission, 138 S. Ct. 2044 (2018), that the administrative law judge (“ALJ”) who decided her case was not appointed in compliance with the Appointments Clause of the U.S. Constitution.....The Defendant argues that Plaintiff forfeited this claim by not challenging the ALJ’s appointment in the agency proceeding....

After careful review and following the Third Circuit decision on January 23, 2020 in Cirko v. Comm’r of Soc. Sec. and Bizarre v. Comm’r of Soc. Sec., ___ F.3d ___, 2020 WL 370832 (3d Cir. Jan. 23, 2020), and for the reasons set forth below, the Court finds that the ALJ was improperly appointed under the Constitution and Plaintiff did not forfeit her Appointments Clause claim. Therefore, Plaintiff’s request for review is granted, and this matter will be remanded to the Commissioner for further proceedings in accordance with the following memorandum.

wages - FLSA - settlement - confidentiality agreement, general release - sever ability

Solkoff v. Penn State University -  ED Pa. January 23, 2020

The parties’ settlement of plaintiff’s Fair Labor Standards Act case was approved by the court, except for the confidentiality agreement and plaintiff’s general release, which the court held could be severed from the rest of the agreement.

Frustration of FLSA

The confidentiality clause and release clause frustrate the FLSA’s purpose. The central purpose of the FLSA was to provide a remedy for the consequences resulting from “the unequal bargaining power as between employer and employee.” Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945). One of the main consequences of unequal bargaining power was substandard wages, thus the FLSA sought “to secure for the lowest paid segment of the nation's workers a subsistence wage.” Kraus v. PA Fit II, LLC, 155 F. Supp. 3d 516, 525 (E.D. Pa. 2016) (citing D.A. Schulte v. Gangi, 328 U.S. 108, 114 (1946)). In accordance with this central purpose, the general releases and confidentiality clauses in FLSA settlement agreements will be rejected. 

Confidentiality clause

Generally, confidentiality clauses in FLSA settlement agreements frustrate the purpose of the FLSA by facilitating information asymmetry that hinders FLSA enforcement. 

The defendant’s employees, as well as the public at large, have an interest in ensuring fair wages and thus an interest in information about the defendant’s settlement of claims alleging a failure to provide fair wages. . . And by preventing plaintiffs from discussing their cases with other potentially harmed employees, approval of “confidentiality clauses would create new imbalances of information between Defendants and their employees.” . . . In creating this information asymmetry, confidentiality clauses stifle the robustness of FLSA enforcement by creating an obstacle to detecting FLSA violations and to vindicating FLSA rights. 

Under certain circumstances, a confidentiality clause may be approved if it is limited to prevent its undermining the purpose of the FLSA. In certain cases, the purpose of the FLSA may not be frustrated by a confidentiality clause that does not create information asymmetry between the defendant and his employees, namely by allowing the plaintiff to discuss the case and settlement with other employees, but not the media. The purpose of the FLSA is frustrated when alleged FLSA violations by an employer are concealed from its employees and the public. Therefore, contractually binding Plaintiff to make reasonable efforts to maintain confidentiality regarding this settlement will be disapproved. 

General release

The broad release of claims that includes unrelated claims and claims unknown to the plaintiff frustrates the purpose of the FLSA by allowing employers to use their superior bargaining power to disadvantage FLSA claimants. Overbroad release provisions in FLSA settlement agreements subvert the goal of remedying the consequences of unequal bargaining power. 

Because, unlike the confidentiality provision, the release provision is explicitly not severable, the Court will not approve the settlement agreement. 

certified legal interns - bar admission rules

Rule    http://www.pacourts.us/assets/opinions/Supreme/out/attach%20-%2010429709292301783.pdf?cb=1

Order http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered%20-%2010429709292301277.pdf?cb=1

employment - professional license - past criminal convictions - no relation to profession

Haveman and Spillane v. State Board of Cosmetology – Cmwlth. Court – 12-9-19 – unreported memorandum opinion**

Held: Petitioners have standing to challenge of the good-moral-character requirement of sec. 5 of the Beauty Culture Law.  Their claims are adequately developed and are ripe for consideration. Because Petitioners seek declaratory and injunctive relief on a facial constitutional challenge and are not appealing the Board’s denial of their license applications, the claims are not barred by a failure to exhaust administrative remedies, collateral estoppel, or res judicata and the Petition is not untimely. Finally, Petitioners seek declaratory relief and not damages; thus, their claims are not barred by the two-year statute of limitations. 

Petitioners had prior criminal convictions which, they say, involve conduct unrelated to the cosmetology profession. Petitioners allege a violation of their state substantive due process rights under article I, section 1 of the Pennsylvania Constitution,4 which protects Petitioners’ rights to pursue their chosen occupations free from “arbitrary and irrational legislation.” 

Petitioners assert that the good moral character requirement is facially unconstitutional under article I, section 1 because it lacks a substantial relationship to a legitimate government interest and is unduly oppressive. Petitioners also allege that the good moral character requirement is facially unconstitutional under Pennsylvania’s equal protection guarantee. 

Because Petitioners were treated differently from similarly situated individuals, such as prospective barber licensees, due to the good moral character requirement, Petitioners aver that the requirement is unduly oppressive. Petitioners assert that the good moral character requirement has no substantial or rational relationship to a legitimate government interest to justify this different treatment between similar individuals. 

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**An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

custody - medical marijuana

H.R. and C.A.R. v. C.P. and J.M. – Pa. Superior – reported, precedential – December 18, 2019

http://www.pacourts.us/assets/opinions/Superior/out/J-S54013-19o%20-%2010426343990129499.pdf?cb=1

Held:  The Medical Marijuana Act does not preclude the trial court from making relevant findings concerning the effect of marijuana use, whether medical or recreational, on a parent’s ability to care for his or her child. Indeed, contrary to Father’s assertion, the Medical Marijuana Act expressly reaffirms § 5328(a) as the controlling mechanism for determining a child’s best interest. See 35 P.S. § 10231.2103(c) (“In determining the best interest of a child with respect to custody, the provisions of 23 Pa.C.S. Ch. 53 (relating to child custody) shall apply.”). 

That statutory framework explicitly requires the fact-finder to consider not only a parent’s history of drug and alcohol use but also their mental health and physical conditions. Thus, rather than requiring the court to ignore Father’s marijuana use, the Medical Marijuana Act obligated the trial court to contemplate Father’s physical condition, i.e. the nerve pain he complains of in his right wrist, and his reliance upon medication to subdue that pain. 

By way of comparison, OxyContin®, Vicodin®, codeine, and morphine are legal substances when prescribed by a physician; however, it is beyond cavil that, prior to making a custody determination, § 5328(a) (14) and (15) mandates that a trial court consider how a parent’s legal use of any of these substances impacts his or her child’s best interest. That is precisely the analysis that the trial court performed in the case at bar. 

child abuse - expungement - substantial pain - duration of bruise

J.S v. Departmnt of Human Services – Cmwlth. Court – reported, precedential – November 15, 2019

The ALJ’s determinations that Father disregarded a substantial and unjustifiable risk and caused Child substantial pain are both inconsistent with case law and unsupported by the record.  P.R. v. Department of Public Welfare, 801 A.2d 478 (Pa. 2002)11; W.S. v. Department of Public Welfare, 882 A.2d 541 (Pa. Cmwlth. 2005); Allegheny County Office of Children, Youth & Families v. Department of Human Services, 202 A.3d 155 (Pa. Cmwlth. 2018). 

“Without substantial proof” that Child’s pain “was more than the regrettable result of corporal punishment,” we will not rely on such result “to presuppose the element of unjustifiable risk” that would support a finding of criminal negligence. P.R., 801 A.2d at 487.  To the extent the ALJ assumed a correlation between the duration of a bruise and a degree of pain, the ALJ erred. 

Hydrojet Services v. Reading Area Water Authority – Cmwlth. Court – November 14, 2019 – reported precedential opinion

The court affirmed a trial court ruling in favor of the enforcement of a settlement agreement concerning a large past-due water bill, relying primarily on Mastroni-Mucker v. Allstate Insurance Co., 976 A.2d 510 (Pa. Super. 2009), which held that the verbal agreement reached by the parties constituted a binding agreement and any delay in executing a written agreement memorializing the agreed- upon terms does not defeat that agreement

From the opinion:

The law of this Commonwealth establishes that an agreement to settle legal disputes between parties is favored. Compu Forms Control Inc. v. Altus Group Inc., 574 A.2d 618, 624 (Pa. Super. 1990). There is a strong judicial policy in favor of voluntarily settling lawsuits because it reduces the burden on the courts and expedites the transfer of money into the hands of a complainant. Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943, 946 (Pa. Super. 2004). If courts were called on to re-evaluate settlement agreements, the judicial policies favoring settlements would be deemed useless. Greentree Cinemas Inc. v. Hakim, 432 A.2d 1039, 1041 (Pa. Super. 1981). 

Settlement agreements are enforced according to principles of contract law. Pulcinello v. Consolidated Rail Corp., 784 A.2d 122, 124, (Pa. Super. 2001), appeal denied, 796 A.2d 984 (Pa. 2002). “There is an offer (the settlement figure), acceptance, and consideration (in exchange for the plaintiff terminating his lawsuit, the defendant will pay the plaintiff the agreed upon sum).” Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 587 A.2d 1346, 1349 (Pa. 1990), cert. denied, 502 U.S. 867 (1991). 

Where a settlement agreement contains all of the requisites for a valid contract, a court must enforce the terms of the agreement. McDonnell v. Ford Motor Co., 643 A.2d 1102, 1105 (Pa. Super.), appeal denied, 652 A.2d 1324 (Pa. 1994). This is true even if the terms of the agreement are not yet formalized in writing. Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999); see Commerce Bank/Pennsylvania v. First Union Nat. Bank, 911 A.2d 133, 147 (Pa. Super. 2006) (stating “an agreement is binding if the parties come to a meeting of the minds on all essential terms, even if they expect the agreement to be reduced to writing but that formality does not take place.”). 

Pursuant to well-settled Pennsylvania law, oral agreements to settle are enforceable without a writing. Pulcinello, (citing Kazanjian v. New England Petroleum Corp., 480 A.2d 1153, 1157 (Pa. Super. 1984)). An offeree’s power to accept is terminated by (1) a counter-offer by the offeree; (2) a lapse of time; (3) a revocation by the offeror; or (4) death or incapacity of either party. See First Home Savings Bank, FSB v. Nernberg, 648 A.2d 9, 15 (Pa. Super. 1994) (citing Restatement (Second) of Contracts §36 ([Am. Law Inst.] 1981)), appeal denied, 657 A.2d 491 (Pa. 1995). However, “[o]nce the offeree has exercised his power to create a contract by accepting the offer, a purported revocation is ineffective as such.” Restatement (Second) of Contracts §42, Comment c. ([Am. Law Inst.] 1981). 

Mastroni-Mucker, 976 A.2d at 518.

Where a settlement agreement contains all of the requirements for a valid contract, a court must enforce the terms of the agreement even if they were never formalized in writing. See also Shovel Transfer & Storage, Inc. v. Pennsylvania Liquor Control Board, 739 A.2d 133, 136 (Pa. 1999) (holding that “[i]f the parties agree upon essential terms and intend them to be binding, a contract is formed even though they intend to adopt a formal document with additional terms at a later date”). Section 27 of the Restatement (Second) of Contracts includes similar language, stating that: 

Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations. 

RESTATEMENT (SECOND) OF CONTRACTS §27 (Am. Law Inst. 1981).

In this case, RAWA does not dispute that the parties reached a verbal agreement with respect to Hydrojet’s unpaid water and sewage bills at the meeting between the parties on December 5, 2017. This verbal agreement called for Hydrojet to make installment payments until these unpaid bills were fully satisfied. As can be seen in the subsequent written settlement agreement, the parties agreed that Hydrojet owed RAWA a total of $133,298.00 for past water service and that Hydrojet would make 98 monthly payments of $1,020.00 along with a lump sum payment of $33,329.50 to satisfy these outstanding charges, upon which RAWA would release Hydrojet from any claims relating to its past water usage. Hence, the necessary prerequisites for a valid contract were established at the December 5, 2017 meeting, i.e., offer, acceptance, and consideration, and the trial court did not err in concluding that the verbal agreement was a sufficient basis upon which to rely in granting Hydrojet’s enforcement petition.