MARTIN et al v. GEORGE JUNIOR REPUBLIC IN PENNSYLVANIA et al
Filing
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OPINION and ORDER granting 6 partial Motion to Dismiss for Failure to State a Claim for the reasons set forth in the Opinion itself. Signed by Chief Magistrate Judge Maureen P. Kelly on 9/16/15. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
DOUGLAS A. MARTIN; BRENDA L.
MARTIN,
Plaintiffs,
vs.
GEORGE JUNIOR REPUBLIC IN
PENNSYLVANIA; GEORGE JUNIOR
REPUBLIC,
Defendants.
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Civil Action No. 15-471
Chief Magistrate Judge Maureen P. Kelly
Re: ECF No. 6
OPINION AND ORDER
KELLY, Chief Magistrate Judge
Plaintiffs Douglas A. Martin and Brenda L. Martin (collectively, “Plaintiffs”) have
brought this action against their former employers, Defendants George Junior Republic in
Pennsylvania and George Junior Republic (collectively, “Defendants”), alleging that Defendants
violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., by failing to pay
Plaintiffs a minimum wage and/or overtime pay which, amongst other things, led to Brenda
Martin resigning her position and Douglas Martin’s termination.
Presently before the Court is a partial Motion to Dismiss filed by Defendants. ECF No.
6. For the following reasons, the Motion to Dismiss will be granted.
I.
FACTUAL AND PROCEDURAL BACKGROUND
According to the Complaint, Defendants operate a private, not for profit residential
treatment facility for delinquent boys in Grove City, Mercer County, Pennsylvania. ECF No. 1,
¶ 5. Plaintiffs are a married couple who were hired by Defendants in January 2007 as counselor
parents. Id. at ¶¶ 4, 11. Plaintiffs’ primary duties were to supervise delinquent boys assigned to
the cottage in which Plaintiffs resided, at no cost to them, at Defendants’ facility. Id. at ¶¶ 12-13,
15.
It is undisputed that Plaintiffs were at-will employees who were paid an hourly wage.
Plaintiffs, however, complain that they were not paid for all the hours that they worked and were
not paid overtime for the hours that they worked over 40 hours per week. Id. at ¶¶ 25, 29, 43-45,
49-50, 57-59. Plaintiffs also allege that Defendants failed to comply with the Pennsylvania
Department of Human Services (“DHS”) regulations and/or the law governing secure care child
residential facilities relative to the ratio of supervisors to children which, in turn, created an
unsafe working environment. Id. at ¶¶ 25-30, 36-40. See id. at ¶¶ 6-9. Plaintiffs contend that
when they complained to Defendants about the unsafe working conditions and the wage and
overtime shortfalls, Defendants threatened Plaintiffs with demotions, loss of their free housing or
termination. Id. at ¶¶ 45-47, 52-54.
Plaintiffs subsequently filed a grievance in accordance with the policy set forth in the
employee handbook (“the Handbook”) and were told “not to push the [uncompensated pay]
issue.” Id. at ¶¶ 52, 54. Consequently, on October 23, 2014, Brenda Martin resigned her
position effective November 13, 2014, due to “Defendants’ non-compliance with its own
standard operations and procedures.” Id. at ¶ 55. Shortly thereafter, on October 30, 2014,
Defendants terminated Douglas Martin’s employment which was effective November 13, 2014,
as well. Id. at ¶ 56.
Plaintiffs filed the instant Complaint on April 7, 2015, bringing claims against
Defendants under the FLSA for failure to pay minimum wages and overtime (Count I), and for
retaliating against Douglas Martin (Count II). Plaintiffs have also brought state law claims for
breach of contract (Count III); violations of the Pennsylvania Wage Payment and Collection Law
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(“WPCL”), 43 P.S. § 260.1, et seq., and Pennsylvania Minimum Wage Act (“PMWA”), 43 P.S.
§ 333.101, et seq. (Count IV); unjust enrichment (Count V); and violations of the Pennsylvania
Whistleblower Law (“PWL”), 43 P.S. §§ 1421-1428 (Count VI).
Defendants filed the instant partial Motion to Dismiss on June 8, 2015, arguing that
Plaintiffs have failed to state a claim for breach of contract at Count III of the Complaint or a
claim for violating the PWL at Count VI. ECF No. 6. On June 22, 2015, Plaintiffs filed a
Response to the Motion and a Brief in Opposition to Defendants’ Motion to Dismiss, ECF Nos.
11, 12, and on July 6, 2015, Defendants filed a Reply Brief. ECF No. 14. As such, Defendants’
partial Motion to Dismiss is ripe for review.
II.
STANDARD OF REVIEW
In assessing the sufficiency of the complaint pursuant to a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all material allegations in
the complaint and all reasonable factual inferences must be viewed in the light most favorable to
the plaintiff. Odd v. Malone, 538 F.3d 202, 205 (3d Cir. 2008). The Court, however, need not
accept bald assertions or inferences drawn by the plaintiff if they are unsupported by the facts set
forth in the complaint. See California Pub. Employees’ Ret. Sys. v. The Chubb Corp., 394 F.3d
126, 143 (3d Cir. 2004), citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.
1997). Nor must the Court accept legal conclusions set forth as factual allegations. Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, “[f]actual allegations must be enough to
raise a right to relief above the speculative level.” Id., citing Papasan v. Allain, 478 U.S. 265,
286 (1986). Indeed, the United States Supreme Court has held that a complaint is properly
dismissed under Fed. R. Civ. P. 12(b)(6) where it does not allege “enough facts to state a claim
to relief that is plausible on its face,” id. at 570, or where the factual content does not allow the
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court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). See Phillips v. Cnty. of Allegheny, 515 F.3d 224,
231 (3d Cir. 2008) (finding that, under Twombly, “labels, conclusions, and a formulaic recitation
of the elements of a cause of action” do not suffice but, rather, the complaint “must allege facts
suggestive of [the proscribed] conduct” and that are sufficient “to raise a reasonable expectation
that discovery will reveal evidence of the necessary element[s] of his claim”).
III.
DISCUSSION
A.
Claim for Breach of Contract (Count III)
Under Pennsylvania law, in order to prevail on a breach of contract claim, “a plaintiff
must demonstrate (1) the existence of a contract, including its essential terms, (2) a breach of a
duty imposed by the contract, and (3) resultant damages.” Haywood v. Univ. of Pittsburgh, 976
F. Supp. 2d 606, 625 (W.D. Pa. 2013), citing Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d
Cir. 2003).
Here, Plaintiffs allege that an employment contract existed between them and Defendants
by virtue of the Handbook that was provided to them upon their hire. The Handbook, which sets
forth the terms of Plaintiffs’ employment, includes a whistleblower provision which states that
“there will be no retaliation, including but not limited to termination, compensation decreases,
poor work assignments, or threats of any kind, toward an employee who whistleblows . . . .”
ECF No. 7-1, p. 16. Plaintiffs contend that Defendants breached the whistleblower provision by
threatening Plaintiffs with lesser work assignments and by terminating Douglas Martin after
Plaintiffs complained about the alleged wage and overtime violations.
Defendants, however, argue that Plaintiffs’ breach of contract claim should be dismissed
because the Handbook contains a disclaimer that precludes a finding that the Handbook
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constitutes a contract between Plaintiffs and Defendants. Defendants therefore contend that
Plaintiffs were at-will employees who could be terminated at any time for any reason thereby
precluding a claim for breach of contract.
It is undisputed that under Pennsylvania law there is a presumption that an employee is
employed at-will and, “[a]bsent a statutory or contractual provision to the contrary,” may be
terminated at any time, “for any or no reason.” Keefer v. Durkos, 371 F. Supp. 2d 686, 698
(W.D. Pa. 2005), quoting Geary v. U.S. Steel Corp., 456 Pa. 171, 319 A.2d 174, 176 (Pa. 1974).
See Scully v. U.S. WATS, Inc., 238 F.3d 497, 505 (3d Cir. 2001). It is also undisputed that the
Handbook at issue in this case includes a disclaimer which provides:
The contents of this Employee Handbook summarize current George Junior
Republic programs, policies and procedures and are intended as guidelines
only. The employee should be aware that these policies and programs may
be amended at any time, and that depending on the particular circumstances
of a given situation, the organization's actions may vary from written policy.
As such, the contents of the handbook do not constitute the terms of a
contract of employment. Nothing contained in this handbook should be
construed as a guarantee of continued employment, but rather employment
with George Junior Republic is on an at-will basis. This means employment
may be terminated at any time by either the employee or George Junior
Republic for any reason not expressly prohibited by law.
ECF No. 7-1, p. 3.1
Plaintiffs do not dispute that they were at-will employees but argue that the Handbook
nevertheless constitutes a unilateral contract independent of, or collateral to, their at-will status,
and that Defendants therefore are bound by the policies set forth therein, including the
whistleblower provision. In so arguing, Plaintiffs rely on Braun v. Wal-Mart Stores, Inc., 2011
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Defendants have provided the Court with a copy of the Handbook in conjunction with its Motion to Dismiss. ECF
No. 7-1. In deciding a motion to dismiss, a court may consider any undisputably authentic document[s] that a
defendant attaches as an exhibit to a motion to dismiss if the plaintiff’s claims are based on the document.” Ickes v.
Flanagan, 2008 WL 859183, at *1 (W.D. Pa. Mar. 31, 2008), quoting Steinhardt Group Inc. v. Citicorp, 126 F.3d
144, 145 (3d. Cir 1997). Because Plaintiffs’ claims are clearly based on the Handbook, the Court may consider it
without converting the Motion to Dismiss to one for summary judgment.
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Pa. Super. 121, 24 A.3d 875 (Pa. Super. Ct. 2011), aff'd, 106 A.3d 656 (Pa. 2014) (“Braun”),
wherein the Superior Court of Pennsylvania quoted extensively from Caucci v. Prison Health
Servs., Inc., 153 F. Supp. 2d 605 (E.D. Pa. 2001) (“Caucci”), stating that:
“An employment handbook is enforceable against an employer if a
reasonable person in the employee's position would interpret its provisions
as evidencing the employer's intent to supplant the at-will rule and be bound
legally by its representations in the handbook. . . .
Notwithstanding this, provisions in a handbook or manual can
constitute a unilateral offer of employment which the employee accepts by
the continuing performance of his or her duties. A unilateral contract is a
contract wherein one party makes a promissory offer which calls for the
other party to accept by rendering a performance. In the employment
context, the communication to employees of certain rights, policies and
procedures may constitute an offer of an employment contract with those
terms. The employee signifies acceptance of the terms and conditions by
continuing to perform the duties of his or her job; no additional or special
consideration is required. Thus, the provisions comprising the unilateral
contract may be viewed as a contract incidental or collateral to at-will
employment. An employer who offers various rewards to employees who
achieve a particular result or work a certain amount of overtime, for
example, may be obligated to provide those awards to qualifying
employees, although retaining the right to terminate them for any or no
reason.”
Braun, 24 A.3d at 941, quoting Caucci, 153 F. Supp. 2d at 611. Plaintiffs argue that because the
Court in Braun found that the employer’s handbook in that case constituted a unilateral contract
despite the at-will disclaimer contained therein, the Handbook in this case constitutes a unilateral
contract as well notwithstanding the disclaimer set forth above. The Court disagrees.
First, in Braun, regardless of the disclaimer contained in the employee handbook, the
defendants conceded that the handbook contained promises of certain benefits including the
policies regarding rest and meal breaks which the plaintiffs claimed had been violated. Braun,
24 A.3d at 939, 944. Accordingly, the Court was able to conclude that the handbook constituted
a unilateral contract. Id. at 945. See id. at 941 (“[a] unilateral contract is a contract wherein one
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party makes a promissory offer which calls for the other party to accept by rendering a
performance”) (emphasis added).
Second, notably absent from Plaintiff’s recitation of the Braun Court’s quote from
Caucci, is the text following the first sentence which reads:
The handbook must contain a clear indication that the employer intended to
overcome the at-will presumption. The court may not presume that the
employer intended to be bound legally by distributing the handbook nor that
the employee believed that the handbook was a legally binding instrument.
Generally, explicit disclaimers of contract formation in an employee
handbook preclude a breach of contract claim.
Braun, 24 A.3d at 941, quoting Caucci, 153 F. Supp. 2d at 611 (citations and quotation marks
omitted in Braun). In this case, unlike in Braun or Caucci, there is not just one, but two explicit
disclaimers that speak directly to the policies set forth in the Handbook as well as the at-will
presumption. In addition to the disclaimer cited by Defendants set forth above, the Handbook
also has a provision that provides:
E. Employment Guidelines
This manual has been prepared to educate and guide employees
regarding the personnel policies of George Junior Republic. The policies
and procedures outlined in this manual do not constitute a contract with
any employee nor are they a promise by George Junior Republic that the
policies will be followed in every case. George Junior Republic may
change the policies at any time and may choose not to apply a policy or
policies in certain circumstances. Any oral statement or written agreement
to the contrary not signed by the Chief Executive Officer or his designee is
not valid and should not necessarily be believed to be true.
ECF No. 7-1, p. 8. This disclaimer, coupled with that cited by Defendants, go far beyond
reiterating the applicability of the at-will doctrine or simply stating that the Handbook does not
constitute a contract as was the case in Braun.2 Rather, the instant disclaimers specifically
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The disclaimer in Braun simply stated that “the policies and benefits presented in this handbook are for your
information only and so not constitute terms and conditions of employment . . . . This handbook is not a contract.”
Id. at 883.
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disclaim that the policies contained in the Handbook are promises and explicitly state that
Defendants may vary from the written policies and/or decline to apply them at all. Under these
circumstances, the Court is hard pressed to find that the Handbook was a promissory offer or that
Plaintiffs had any reasonable expectation that the Handbook constituted a unilateral contract that
would bind Defendants to the policies set forth therein. See Braun, 24 A.3d at 941, quoting
Caucci, 153 F. Supp. 2d at 661 (“[a]n employment handbook is enforceable against an employer
if a reasonable person in the employee's position would interpret its provisions as evidencing the
employer's intent to . . . be bound legally by its representations in the handbook”).
Indeed, in Baron v. Quad Three Grp., Inc., 2013 WL 3822134 (Pa. Super. Ct. Jan. 22,
2013), the Pennsylvania Superior Court declined to find that an employee handbook created a
unilateral contract where it contained a disclaimer similar to that at issue in this case. The
disclaimer in Baron provided that:
II. DISCLAIMER—PLEASE READ CAREFULLY
The policies, procedures and benefits stated in this manual may be changed
at any time at the sole discretion of Quad3. Quad3 reserves the right to
modify this manual, amend or eliminate any of these policies, procedures or
employee benefit programs at any time without advance notice to
employees. This manual is not all inclusive, and is only a set of guidelines.
Your employment relationship with Quad3 is considered to be “at will.” At
will employment means either you the employee or Quad3 have equal right
to sever the employment relationship at will, with or without cause, or
without notice.
These policies and guidelines are not intended and do not create a
contractual relationship between Quad3 and any of its employees.
Id., at *6-7 (emphasis in original). Applying the principles set forth in Braun and Caucci, the
Baron Court found that it was evident from the disclaimer that the defendant “expressly
disavowed any intent to contract with its employees pursuant to this employee handbook.” Id. at
*7. Because it is apparent from the disclaimers in this case, like that in Baron, that Defendants
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expressly disavowed any intent to contract with Plaintiffs, no reasonable person could conclude
that a contract existed or that Defendants otherwise intended to be bound by the provisions in the
Handbook. See Braun, 24 A.3d at 943, quoting Martin v. Capital Cities Media, Inc., 354 Pa.
Super. 199, 511 A.2d 830, 839 (Pa. Super. Ct. 1986) (citation omitted) (“it is the intention of the
parties which is the ultimate guide. . . ”). See also Engle v. Milton Hershey School, 2007 WL
1365916, at *8-9 (M.D. Pa. Jan. 19, 2007) (finding that the plaintiff’s failed to state a breach of
contract claim where the facts alleged failed to support a finding that the handbook included a
promissory offer necessary for a unilateral contract). Cf. Randler v. Kountry Kraft Kitchens,
2012 WL 6561510, at *13 (M.D. Pa. Dec. 17, 2012) (finding no evidence of a unilateral contract
where the handbook explicitly stated that the “[p]olicies set forth in this handbook are not
intended to create a contract, nor are they to be construed to constitute contractual obligations of
any kind or a contract of employment between Kountry Kraft and any of its employees,” and the
plaintiff acknowledged that “the information, policies, and benefits described here are
necessarily subject to change”); McCloud v. United Parcel Service, Inc., 543 F. Supp. 2d 391,
403 (E.D. Pa. 2008), aff’d 328 F. App’x 777 (3d Cir. 2009) (finding that the plaintiff had no
contractual rights based on the employee handbook in light of specific disclaimer that “[t]his
particular code or policy handbook is not an expressed or implied contract of employment and
does not create any contractual rights of any kind between UPS and its employees”). Therefore,
Plaintiffs in the instant case have failed to state a claim for breach of contract and Count III of
the Complaint is properly dismissed.
B.
Claim Brought Pursuant to the PWL (Count VI)
As recently stated by this Court:
Under the Pennsylvania Whistleblower Law,
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No employer may discharge, threaten, or otherwise discriminate or retaliate
against an employee regarding the employee's compensation, terms,
conditions, locations or privileges of employment because the employee or
a person acting on behalf of the employee makes a good faith report or is
about to report, verbally or in writing, to the employer or appropriate
authority an instance of wrongdoing or waste.
43 Pa. Cons. Stat. Ann. § 1423(a). “Wrongdoing” is defined as “[a]
violation which is not of a merely technical or minimal nature of a Federal
or State statute or regulation, of a political subdivision ordinance or
regulation or of a code of conduct or ethics designed to protect the interest
of the public or the employer.” 43 Pa. Cons. Stat. Ann. § 1422. See
Golaschevsky v. Dep't of Environmental Protection, 554 Pa. 157, 720 A.2d
757, 759 (Pa. 1998). “Good faith report,” in turn, is defined as “[a] report of
conduct defined in this act as wrongdoing or waste which is made without
malice or consideration of personal benefit and which the person making
the report has reasonable cause to believe is true.” Id.
DeForte v. Borough of Worthington, 2013 WL 6710355, at *7 (W.D. Pa. Dec. 18, 2013). See
Albright v. City of Philadelphia, 399 F. Supp. 2d 575, 595-96 (E.D. Pa. 2005).
Defendants argue that Plaintiffs’ claim brought pursuant to the PWL should be dismissed
because Plaintiffs have failed to allege the requisite wrongdoing by Defendants and because
Plaintiffs’ reports of wrongdoing were not made without consideration of personal benefit and
thus were not made in good faith. Because it is clear from the allegations in the Complaint that
Plaintiffs’ reports of alleged wrongdoing were not made in good faith, Plaintiffs’ PWL claim will
be dismissed.
Although not dispositive of the issue, Plaintiff has not specifically alleged in the
Complaint that the reports of alleged wrongdoing were made in good faith or without the
consideration of personal benefit. More importantly, however, it is clear from what Plaintiffs
have alleged in the Complaint that the contrary is true. Indeed, without exception, Plaintiffs’
assertions in the Complaint relative to Defendants alleged wrongdoing speak only to Plaintiffs’
responsibilities; Plaintiffs’ schedule; the boys in Plaintiffs’ care; the 5 hour breaks that Plaintiffs
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were required to take without compensation; Plaintiffs’ consequent inability to fulfill Plaintiffs’
respective workday obligations; the impact that the increase in the number of boys at
Defendants’ facility had on Plaintiffs, Plaintiffs’ safety and that of their minor son; the effect that
Defendants’ allegedly unfair policies had on Plaintiffs; and Defendants’ refusal to pay Plaintiffs
for the work that Plaintiffs performed. See ECF No. 1, ¶¶ 14, 18, 25-30, 33, 36-39, 42-43, 45,
48, 50, 52, 57-59. Although Plaintiffs presently argue in their Brief in Opposition to Defendants’
Motion to Dismiss that their “complaint to the employer benefited all similarly situated GJR
employees who were not paid their lawful wages,” ECF No. 12, p. 8, Plaintiffs do not mention
other employees anywhere in the Complaint. See Commonwealth of Pa. ex. rel. Zimmerman v.
Pepsico, Inc., 836 F.2d 173, 181 (3d Cir. 1988) (“[i]t is well established that a plaintiff may not
amend the Complaint through the brief filed in opposition to a motion to dismiss”). Moreover,
regardless of whether Plaintiffs’ reports of misconduct benefited other employees, it does not
negate the fact that Plaintiffs reports were made for their own benefit as well as evidenced by the
allegations in the Complaint. As such, Plaintiffs reports of alleged wrongdoing were not made in
good faith as that term is defined under the statute. Plaintiffs therefore have failed to state a
claim under the PWL and Count VI of the Complaint is properly dismissed.
IV.
CONCLUSION
For the foregoing reasons, Defendants’ partial Motion to Dismiss will be granted.
Accordingly, the following Order is entered:
ORDER
AND NOW, this 16th day of September, 2015, upon consideration of Defendants’ partial
Motion to Dismiss, Plaintiffs’ Brief in Opposition to Defendants’ Motion to Dismiss and
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Defendants’ Reply Brief, IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss, ECF
No. 6, is GRANTED and Counts III and VI of the Complaint are dismissed.
BY THE COURT:
/s/ Maureen P. Kelly
MAUREEN P. KELLY
CHIEF UNITED STATES MAGISTRATE JUDGE
cc:
All Counsel of Record Via CM-ECF
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