Opinion
623 EDA 2019
09-15-2021
CARA SALSBERG Appellant v. DONNA MANN AND DREXEL UNIVERSITY
Appeal from the Order Entered January 17, 2019 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 170603584
BEFORE: PANELLA, P.J., BENDER, P.J.E., LAZARUS, J., STABILE, J., DUBOW, J., NICHOLS, J., MURRAY, J., McLAUGHLIN, J., and KING, J.
OPINION
PANELLA, P.J.:
Cara Salsberg appeals from the order entered in the Philadelphia County Court of Common Pleas, granting summary judgment in favor of Donna Mann and Drexel University. On appeal, Salsberg contends that the trial court erred in granting judgment as a matter of law on her claim for intentional interference with her at-will employment contract. We affirm.
Salsberg was hired by Drexel University as a tax accountant in the Office of Tax Compliance, where she worked under the supervision of Mann. During the course of her employment, Salsberg received mostly positive performance reviews from Mann. Salsberg's performance reviews often indicated that she either met or exceeded expectations. As a result, Salsberg was promoted to tax compliance manager.
Shortly thereafter, the professional relationship between Salsberg and Mann began to deteriorate. The parties dispute the reasons for, and the circumstances of, this deterioration. Mann claims that Salsberg failed to perform like a salary exempt manager, whereas Salsberg contends that Mann's erratic workplace behavior was responsible for the breakdown in their professional relationship.
In the end, Mann and Human Resources collectively decided that terminating Salsberg was the best course of action for the University. Mann and a representative from Human Resources summoned Salsberg to a meeting. At this meeting, Salsberg was notified of Drexel's decision to terminate her employment because of deficient job performance.
Following her discharge, Salsberg filed suit against Donna Mann and Drexel University asserting three claims: (1) Mann had intentionally interfered with her contractual relations with Drexel (2) Drexel had breached an implied employment contract by firing her; and (3) both Drexel and Mann had intentionally inflicted emotional distress on her through this process. Mann and Drexel University filed a motion for summary judgment seeking the dismissal of all counts. The trial court ultimately granted the motion in its entirety and dismissed Salsberg's complaint with prejudice. This timely appeal followed.
The trial court did not order Salsberg to file a Pa.R.A.P. 1925(b) statement, but did issue a Pa.R.A.P. 1925(a) opinion.
On appeal, Salsberg's only issue challenges the trial court's grant of summary judgment on her intentional interference claim. See Appellant's Brief at 5.
We review the grant of summary judgment to determine whether the court erred in concluding the record indicates the moving party is entitled to judgment as a matter of law:
In reviewing an order granting summary judgment, our scope of review is plenary, and our standard of review is the same as that applied by the trial court. Our Supreme Court has stated the applicable standard of review as follows: [A]n appellate court may reverse the entry of summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to a judgment as a matter of law. In making this assessment, we review the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. As our inquiry involves solely questions of law, our review is de novo.
[Therefore], our responsibility as an appellate court is to determine whether the record either establishes that the material facts are undisputed or contains insufficient evidence of facts to make out a prima facie cause of action, such that there is no issue to be decided by the fact-finder. If there is evidence that would allow a fact-finder to render a verdict in favor of the non-moving party, then summary judgment should be denied.Gerber v. Piergrossi, 142 A.3d 854, 858 (Pa. Super. 2016) (citation omitted).
As an initial matter, we note that Drexel University classified Salsberg as an at-will employee. Neither party disputes this fact. The parties, however, disagree as to whether Salsberg's status as an at-will employee provides her with a claim against Mann for intentional interference with Salsberg's employment contract with Drexel.
Salsberg argues an at-will employment relationship does not defeat a claim of intentional interference with that existing employment. See Appellant's Brief at 10. She contends that a claim of intentional interference is cognizable under Pennsylvania law, even though the contract in issue is terminable at the will of the parties. See id. To support her argument, Salsberg relies on the Restatement (Second) of Torts § 766 and federal district court decisions. Salsberg asserts that section 766 of the Restatement and federal case law permits an action for intentional interference with the performance of an at-will employment contract. See id., at 13-14.
In contrast, Mann argues that Pennsylvania law does not recognize Salsberg's claim for intentional interference with contractual relations. See Appellee's Brief at 14. Salsberg had an existing at-will employment relationship with the University; therefore, Mann contends Salsberg's claim for intentional interference with a presently existing at-will relationship does not fit within the scope of this cause-of-action. See id., at 16. Furthermore, Mann asserts that Pennsylvania courts, as well as federal courts applying Pennsylvania law, routinely reject claims based on alleged interference with an existing at-will employment relationship. See id., at 19-20.
Our Supreme Court adopted the Restatement (Second) of Torts § 766 in Adler, Barish, Daniels, Levin and Creskoff v. Epstein, 393 A.2d 1175, 1182 (Pa. 1978). Section 766 of the Restatement defines the tort of intentional interference with existing contractual relations and provides:
One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.Rest. (2d) of Torts § 766.
To state a cause of action for intentional interference with contractual relations, a plaintiff must prove the following elements:
(1) the existence of a contractual relationship between the complainant and a third party;
(2)an intent on the part of the defendant to harm the plaintiff by interfering with that contractual relationship;
(3) the absence of privilege or justification on the part of the defendant; and
(4) the occasioning of actual damage as a result of defendant's conduct.Phillips v. Selig, 959 A.2d 420, 429 (Pa. Super. 2008) (quoting Rest. (2d) of Torts § 766).
Here, as noted above, Salsberg's argument relies primarily on § 766 of the Restatement. She claims that the Restatement "does not restrict its application to contracts of a certain kind, nor does it ever state that at-will contracts are excluded from the coverage of § 766." Appellant's Brief at 14. For that reason, Salsberg contends that there is no question that § 766 of the Restatement allows her to assert an action against Mann for intentional interference with her existing at-will employment contract. See id.
While we agree with Salsberg's assertions regarding the application of section 766 to at-will employment contracts, we also recognize that Salsberg overlooks the one crucial factor which goes to the heart of the instant appeal. That is, a section 766 claim under existing Pennsylvania law applies only to prospective at-will employment contracts, not existing ones.
This Court's decision in Hennessey v. Santiago, 708 A.2d 1269, 1279 (Pa. Super. 1998) has been recognized as the controlling precedent on the availability of a § 766 claim for an at-will employee. See Haun v. Cmty. Health Sys., 13 A.3d 120, 125 n.1 (Pa. Super. 2011). In Hennessy, a former at-will employee filed suit against her employer for wrongful discharge. The former employee's complaint also included a claim against a third-party for interfering with her at-will employment relationship. The Hennessy Court held that "an action for intentional interference with performance of a contract in the employment context applies only to interference with a prospective employment relationship whether at-will or not, not a presently existing at-will employment relationship." Id., at 1279.
Pennsylvania law distinguishes between claims for intentional interference with prospective contractual relationships and existing contractual relationships. As the respective names indicate, the primary distinction between these torts lies in the first element. In distinction from a claim for interference with an existing contract, a claim for interference with a prospective contractual relationship requires merely a showing of the probability of a future contractual relationship. See Thompson Coal Co. v. Pike Coal Co. 412 A.2d 466, 471 (Pa. 1979).
Defining a prospective contractual relationship, however, is admittedly problematic because the term has an evasive quality. See Phillips, 959 A.2d at 428. Unlike an existing contractual relationship, a prospective contractual relationship "is something less than a contractual right, something more than a mere hope." Thompson Coal Co., 412 A.2d at 471. "[A]nything that is prospective in nature is necessarily uncertain." Glenn v. Point Park College, 272 A.2d 895, 898-99 (Pa. 1971).
In this case, there was nothing prospective about Salsberg's employment relationship with Drexel. Salsberg had an existing at-will employment contract, limited by implied terms. Without much explanation, Hennessey held that this difference was critical; relief could be available for interference with a prospective at-will relationship, but not for interference with an existing at-will relationship.
Whatever the impact of our reasoning is, it is undoubtedly true that this appeal does not concern a claim of interference with prospective contractual relationships.
Although Salsberg does not explicitly challenge this Court's holding in Hennessy, her argument, in essence, asks us to overturn that panel's decision. In implicitly arguing for overruling Hennessy, Salsberg contends that the plain language of § 766 envisioned the type of claim at issue in this appeal. See Appellant's Brief at 17.
"It is well settled that this Court, sitting en banc, may overrule the decision of a three-judge panel of this Court." In re Adoption of K.M.G., 219 A.3d 662, 666 n.1 (Pa. Super. 2019) (citation omitted).
The problem with Salsberg's argument, however, is that any expectation of continued at-will employment is nothing more than a mere hope: "In Pennsylvania, absent a statutory or contractual provision to the contrary, either party may terminate an employment relationship for any or no reason." Mikhail v. Pa. Org. for Women in Early Recovery, 63 A.3d 313, 316 (Pa. Super. 2013) (citation omitted).
Salsberg was an at-will employee in Drexel's Office of Tax Compliance. Because an at-will employee may be discharged at any time, for any reason, or for no reason, Salsberg did not have any reasonable expectation of continued employment guaranteed by contract. See Deal v. Children's Hospital of Philadelphia, 223 A.3d 705, 712 (Pa. Super. 2019) (observing that an at-will employee may be fired at any time even for no reason). Our Supreme Court has stated: "[There is] no common law cause of action against an employer for termination of an at-will employment relationship." McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283, 287 (Pa. 2000). However, the Supreme Court noted that there are exceptions to this general rule but in "only the most limited of circumstances, where discharges of at-will employees would threaten clear mandates of public policy." Weaver v. Harpster, 975 A.2d 555, 562-63 (Pa. 2009), citing Clay v. Advanced Computer Applications, Inc., 559 A.2d 917, 918 (Pa. 1989). Clearly, the Supreme Court wishes to limit the impact of tort law on at-will employment.
While Pennsylvania law provides a remedy for interference with expectations that are "something less than a contractual right," it does not provide a remedy where those expectations are a "mere hope." Thompson Coal Co., 412 A.2d at 471. Therefore, while we recognize the tension in Hennessy's explicit reasoning, we nevertheless conclude that Salsberg failed to state a cognizable claim for intentional interference with existing contractual relations.
As a result, we decline to overturn Hennessey as it is consistent with current Supreme Court decisions and affirm the trial court's order dismissing Salsberg's complaint with prejudice.
Order affirmed.
Judges Bender, P. J. E., Lazarus, Nichols, Murray, and McLaughlin join the opinion.
Judge Stabile files a dissenting opinion in which Judges Dubow and King join.
Judgment Entered.
DISSENTING OPINION
STABILE, J.:
I respectfully dissent, as I would conclude that Pennsylvania law recognizes an action for intentional interference with an at-will employment contract and that a genuine issue of material fact exists as to that cause of action in this matter.
In Adler, Barish, Daniels, Levin and Creskoff v. Epstein, 393 A.2d 1175, 1183 (Pa. 1978), our Supreme Court adopted in its entirety § 766 of the Restatement (Second) of Torts. That section, titled "Intentional Interference with Performance of Contract by Third Person", provides:
One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.Restatement (Second) of Torts § 766 (1979). Section 766 expressly and unambiguously applies to contracts terminable at-will:
Contracts terminable at-will. A similar situation exists with a contract that, by its terms or otherwise, permits the third person to terminate the agreement at-will. Until he has so terminated it, the contract is valid and subsisting, and the defendant may not improperly interfere with it. The fact that the contract is terminable at-will, however, is to be taken into account in determining the damages that the plaintiff has suffered by reason of its breach.Restatement (Second) of Torts § 766, cmt. g (1979).
Appellant, Cara Salsberg, alleges that Appellee Donna Mann intentionally and improperly interfered with Appellant's at-will employment contract with Appellee Drexel University. In affiming the trial court's ruling that Appellant has no viable cause of action under § 766, the Majority cites Haun v. Community Health Sys., Inc., 14 A.3d 120 (Pa. Super. 2011), and Hennessy v. Santiago, 708 A.2d 1269 (Pa. Super. 1996). In both cases, this Court held that Pennsylvania recognizes intentional interference under § 766 with respect to prospective, but not existing, at-will employment relationships. As then-Judge Mundy noted in her dissent in Haun, both Haun and Hennessy are in tension with this Court's earlier opinion in Curran v. Children's Serv. Ctr. of Wyoming Cty., Inc., 578 A.2d 8, 13 (Pa. Super. 1990), in which we held that "a cause of action for intentional interference with a contractual relationship may be sustained even though the employment relationship is at-will." Haun, 14 A.3d at 126 (Mundy, J. dissenting).
The Curran Court affirmed summary judgment in favor of the defendant because the plaintiff failed to identify a third party against whom the § 766 action could lie. Curran, 578 A.2d at 13.
Because this Court's prior jurisprudence is inconsistent, I believe this en banc panel should revisit Haun and Hennessy. And because Haun and Hennessy are inconsistent with the language of § 766, as adopted by our Supreme Court in Adler, I would overrule both. "[T]his Court is obligated to follow the precedent set down by our Supreme Court. It is not the prerogative of [this Court] to enunciate new precepts of law[.]" Lance v. Wyeth, 4 A.3d 160, 169 (Pa. Super. 2010) (citing Moses v. TNT Red Star Express, 725 A.2d 792, 801 (Pa. Super. 1999), appeal denied, 739 A.2d 1058 (Pa. 1999)), reversed in part on other grounds, 85 A.3d 434 (Pa. 2014); Haun, 14 A.3d at 127 (Mundy, J. dissenting). In restricting the application of § 766 to prospective at-will employment contracts, the Haun and Hennessy Courts adopt a precept of law with no support in the language of § 766 and contrary to that of comment g. The Majority also adopts an approach contrary to the weight of authority from the United States Supreme Court and many other states.
The United States Supreme Court addressed this issue more than a century ago:
It is said that the bill does not show employment for a term, and that under an employment at-will the complainant could be discharged at any time, for any reason or for no reason, the motive of the employer being immaterial. The conclusion, however, that is sought to be drawn is too broad. The fact that the employment is at the will of the parties, respectively, does not make it one at the will of others. The employee has manifest interest in the freedom of the employer to exercise his judgment without illegal interference or compulsion and, by the weight of authority, the unjustified interference of third persons is actionable although the employment is at-will.Truax v. Reich, 239 U.S. 33, 38 (1915).
Appellant has alleged unjustified interference of a third person with her existing at-will employment contract-in this case Mann acting outside the scope of her employment-and the weight of authority remains in favor of allowing a cause of action in these circumstances. E.g., Hall v. Integon Life Ins. Co., 454 So.2d 1338, 1344 (Ala. 1984); Wagenseller v. Scottsdale Mem'l Hosp., 710 P.2d 1025, 1041-44 (Ariz. 1985) (superseded in part by statute on other grounds as stated in Galati v. America West Airlines, Inc., 69 P.3d 1011, 1013 (Ariz.Ct.App. 2003)); Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 580 (Cal. 2020); Unistar Corp. v. Child, 415 So.2d 733, 734 (Fla. Dist. Ct. App. 1982); Guinn v. Applied Composites Eng'g, Inc., 994 N.E.2d 1256, 1267 (Ind. 2013); RTL Dist., Inc. v. Double S Batteries, Inc., 545 N.W.2d 587, 590 (Iowa Ct. App. 1996) Health Call of Detroit v. Atrium Home & Health Care Servs., Inc., 706 N.W.2d 843, 849-50 (Mich. Ct. App. 2005) (quoting Feaheny, v. Caldwell, 437 N.W.2d 358, 363-64 (Mich. Ct. App. 1989)); Nordling v. Northern States Power Co., 478 N.W.2d 498, 505 (Minn. 1991); Levens v. Campbell, 733 So.2d 753, 760 (Miss. 1999); Topper v. Midwest Div., Inc., 306 S.W.3d 117, 125-26 (Mo.Ct.App. 2010); Bloch v. The Paul Revere Life Ins. Co., 547 S.E.2d 51, 59 (N.C. Ct. App. 2001), review denied, 553 S.E.2d 35 (N.C. 2001); Jenkins v. Region Nine Housing Corp., 703 A.2d 664, 667 ( N.J.Super.Ct.App.Div. 1997), certification denied, 709 A.2d 798 (N.J. 1998); McNickle v. Phillips Petroleum Co., 23 P.3d 949, 951 (Okla.Civ.App. 1999); Lewis v. Oregon Beauty Supply Co., 733 P.2d 430, 433 (Or. 1987); Forrester v. Stockstill, 869 S.W.2d 328, 330 (Tenn. 1994); Trepanier v. Getting Organized, Inc., 583 A.2d 583, 589 (Vt. 1990); Charolais Breeding Ranches, Ltd. v. FPC Sec. Corp., 279 N.W.2d 493, 496 (Wis. Ct. App. 1979).
Florida federal courts have held, without citing state court precedent, that at-will employment cannot be the basis for intentional interference with a contract. Scelta v. Delicatessen Support Serv., Inc., 57 F.Supp.2d 1327, 1356 (M.D. Fla. 1999) (citing Weld v. Southeaster Cos., Inc., 10 F.Supp.2d 1318, 1322 n.8 (M.D.Fla 1998)).
These courts continue to employ a rationale like that expressed by the United States Supreme Court in Truax. "A third party's interference with contracts terminable at-will is actionable, because, until one of the contracting parties terminates the contract, the parties are in a subsisting relation that presumably will continue and is of value to the plaintiff." Topper, 306 S.W.3d at 125. Similarly, in Bochnowski, the Indiana Supreme Court reasoned, "[a]n employee with an at-will employment contract must be able to expect that his continued employment depends on the will of his employer and not upon the whim of a third party interferer." Bochnowski, 571 N.E.2d at 285. Minnesota employs the same rationale: "The at-will employment subsists at the will of the employer and employee, not at the will of a third party meddler who wrongfully interferes with the contractual relations of others." Nordling, 478 N.W.2d at 505. This approach is consistent with comment g of § 766 as adopted in full by the Pennsylvania Supreme Court. Haun and Hennessy, without explanation, declined to follow § 766 and adopted the minority approach to this issue.
Some jurisdictions have conflicting authority on point. Compare Bible Way Church of Our Lord Jesus Christ of Apostolic Faith of Washington, D.C. v. Beards, 680 A.2d 419, 433 (D.C. 1996) (finding no basis for a tortious interference with contract claim arising from at-will employment); with Sorrells v. Garfinckel's, 565 A.2d 285, 288-91 (D.C. 1989) (allowing a cause of action for intentional interference with contract where the defendant, acting within the scope of her employment but with malice, caused the at-will plaintiff's termination); compare Champion v. Wright, 740 S.W.2d 848, 854 (Tex. App. 1987) (finding no reason to disallow actions for interference with at-will employment) with Cote v. Rivera, 894 S.W.2d 536, 542 (Tex. Ct. App. 1995) (holding that tortious interference with a contract depends on the existence of a valid contract, and that he at-will employee plaintiff had no contract); compare Champion v. Wright, 740 S.W.2d 848, 854 (Tex. App. 1987) (holding that employment at-will can be subject to tortious interference claims) with Salazar v. Amigos Del Valle, Inc., 754 S.W.2d 410, 414 (Tex. Ct. App. 1988) (holding that a third party's effort to induce an at-will employee to leave his employer does not constitute tortious interference). Virginia employs a somewhat stricter test, requiring the third-party defendant to employ "improper methods," such as "violence, threats or intimidation, bribery, unfounded litigation, fraud, misrepresentation or deceit, defamation, duress, undue influence, misuse of inside or confidential information, or breach of a fiduciary relationship." Duggin v. Adams, 360 S.E.2d 832, 836 (Va. 1987). Illinois holds that an at-will employee may allege a cause of action for interference with a prospective economic advantage, but not a cause of action for intentional interference with a contractual relationship. Canel and Hale, Ltd. v. Tobin, 710 N.E.2d 861, 871 (Ill. Ct. App. 1999), appeal denied, 720 N.E.2d 1090 (Ill. 1999). For a thorough collection of case law on this issue, see 2 Callman on Unfair Competition, Trademarks and Monopolies, (4th ed., June 2021 update) § 9:12. Some jurisdictions forbid a cause of action for tortious interference with at-will employment. E.g. Thornton v. Kaplan, 937 F.Supp. 1441, 1458 (D. Colo. 1996); Dorricot v. Fairhill Ctr. for Aging, 2 F.Supp.2d 982, 991 (N.D. Ohio 1998); Matter of Williams v. Cty. of Genesee, 762 N.Y.S.2d 724 (N.Y.App.Div. 2003); Mendonca v. Tidewater, Inc., 933 So.2d 233, 235 (La. Ct. App. 933 2006), writ denied, 939 So.2d 1280 (La. 2006), cert. denied 549 U.S. 1309 (2007); Evergreen Moneysource Mortg. Co. v. Shannon, 2874 P.3d 375, 383 (Wash. App. 2012); Anderson v. South Lincoln Special Cemetery Dist., 972 P.2d 136, 141 (Wyo. 1999).
I believe Haun and Hennessy were erroneous, as at-will employment clearly is contractual. That is, the employee continues to work and is entitled to be compensated for work performed until termination of the employment. Under § 766, the at-will employee is to be free of third-party interference with his or her employment.
The gravamen of the tort is interference with the employment contract irrespective of the term of that contract. [Comment g of § 766] also maintains that a contract terminable at will is nonetheless a valid and subsisting contract for purposes of an interference with contract tort cause of action; and thus one cannot improperly interfere with it.Frank J. Cavico, Tortious Interference With Contract in the At-Will Employment Context, 79 U. Det. Mercy L. Rev. 503, 511 (2002) (emphasis added; footnotes and internal quotation marks omitted). Given the plain teaching of § 766 on the issue before us, I believe the Majority's continued adherence to Haun and Hennessy is misguided.
Further the Majority's reliance on Weaver v. Harpster, 975 A.2d 555 (Pa. 2009) and McLaughlin v. Gastrointestinal Spec., 750 A.2d 283 (Pa. 2000) for the proposition that our Supreme Court "wishes to limit the impact of tort law on at-will employment," is misguided. Majority Opinion, at 9. McLaughlin and Weaver were wrongful discharge cases. Both cases concern the significant limitations on the ability of at-will employees to sue their former employers for wrongful termination. Those concerns do not apply here. A cause of action under § 766 does not arise against the plaintiff's former employer, but against a third party who allegedly interfered with the plaintiff's at-will employment. The third party is either a stranger to the employment contract or, as here, another employee who allegedly acted outside the scope of his or her employment in interfering with the plaintiff's at-will employment. The reason for the approach in § 766 and in many states is that "the contract, even if at-will, is nonetheless a subsisting, protectable relationship, of value to the parties thereto, and presumed to continue in effect until properly terminated." Cavico, supra, at 512.
Salsberg argues that her actions in this case were privileged, as she was acting within the scope of her employment as Appellant's superior. The trial court did not address that issue, instead finding that a cause of action under § 766 was not available to Appellant as an at-will employee. I would reverse the trial court as to the availability of a cause of action under § 766 and remand for the court to address the privilege issue in the first instance.
At-will employees possess a reasonable, though unenforceable, expectation of continued employment at an employer's firm absent tortious interference with that employment by another individual, business, or entity. The true issue […] is not whether a plaintiff is attempting to evade the at-will doctrine, but rather whether a plaintiff properly is seeking to hold an interfering defendant liable for infecting a healthy employment relationship. The result of such reasoning […] is that for those employees who toil without the benefits and burdens of an employment contract, tortious interference … provides a means whereby the court will treat the at-will relationship as something akin to property.Id. (footnotes and internal quotation marks omitted).
In summary, I believe a cause of action under § 766 protects the Appellant's existing employment relationship (as opposed to a prospective relationships, as per Haun and Hennessy) from third-party interference. I would therefore overrule Haun and Hennessy, reverse the order entering summary judgment, and remand for further proceedings.
I respectfully dissent.
Judge Dubow and Judge King join the Dissenting Opinion.