What's New In Employment Law?

Significant Recent Developments In The Law Of Employment At Will, Wrongful Discharge And Collateral Torts

1. Employment Tenure Issues

1. Employment-At-Will Rule And Its Limitations

   1. In the absence of (a) a contract of employment for a definite term or (b) a statute that creates employee tenure or restricts a municipal employer's power to discharge an employee, a municipal employee in Pennsylvania is employed at will and may be terminated at any time, for any reason, or for no reason. Ballas v. City of Reading, 2001 WL 73737, *3 (E.D. Pa.); Short v. Borough of Lawrenceville, 548 Pa. 265, 696 A.2d 1158 (1997); Pipkin v. Pennsylvania State Police, 548 Pa. 1, 4, 693 A.2d 190, 191 (1997); see also Werner v. Office of Admin., 701 A.2d 796 (Pa. Cmwlth. 1997).

      2. Municipal employees typically are at-will employees and lack tenure protection in a contract or statute. Therefore, a typical municipal employee does not have a property right in continued employment. Nearhood v. City of Altoona, 705 A.2d 1363, appeal denied, 555 Pa. 748, 725 A.2d 1224 (1998) (Pa. Cmwlth. 1998). See also Gallagher v. Borough of Downingtown, 2000 WL 419974 (E.D. Pa. 2000) ("removal for cause" provisions in BOCA Code do not override Pennsylvania's statewide employment at will rule). Among the statutes that provide rights to continued employment are state and local civil service laws.

      3. Without a "property right" in continued employment, an employee does not have the right to procedural due process - i.e., notice and a hearing prior to dismissal or the right to appeal a dismissal to court. This is so because the decision to dismiss the employee is not an "adjudication" under the Local Agency Law. 2 Pa. C.S. ßß 551-555, 751-754. Poteat v. Harrisburg School Dist., 33 F.Supp.2d 384 (M.D. Pa. 1999); Short v. Borough of Lawrenceville, 548 Pa. 265, 696 A.2d 1158 (1997); Nearhood v. City of Altoona, 705 A.2d 1363, appeal denied, 555 Pa. 748, 725 A.2d 1224 (1998) (Pa. Cmwlth. 1998). A decision not to re-employ an employee at the end of the employee's contract term does not, by itself, constitute a due process violation. Garrett v. Kutztown Area School Dist., 1998 WL 513001, *1 (E.D. Pa. 1998).

      4. Tenured public employment is not a fundamental property interest entitled to substantive due process protection. Nicholas v. Pennsylvania State Univ., 227 F.3d 133 (3rd Cir. 2000).

      5. An employee with statutory or contractual rights to employment may also have certain rights to engage in off-duty employment that rise to the level of a property right. See McKenna v. North Strabane Tp., 700 A.2d 577 (Pa. Cmwlth. 1997) (Police officer has property right to off-duty employment, but cannot appeal denial of off-duty employment under Local Agency Law, because this right is arbitrable under the collective bargaining agreement.).

      B. Requisites Of Valid Express Contract

   1. Constitutional Authority

      All contracts, and all contractual terms and conditions, are subject to constitutional restrictions on municipal power.

      In a case of first impression (Denbow v. Borough of Leetsdale, 556 Pa. 567, 729 A.2d 1113 (1999), affirming, 699 A.2d 838 (Pa. Cmwlth. 1997)), the Pennsylvania Supreme Court prohibited municipalities from giving extra compensation to public officers or employees for services already rendered after a contract had already been made. The prohibition is contained in Article III, ß 26 of the Pennsylvania Constitution, which regulates actions of the Pennsylvania General Assembly. The court reasoned that Article III, ß 26 applied equally to municipalities. See also Pa. Const., Article 6, ß 7 (civil officers removable at the pleasure of the appointing power).

      Article III, ß 27 has been interpreted to prohibit the de facto reduction of a public officer's compensation without a formal resolution in a case dealing with the withdrawal of a tax collector's rent-free office space. Knight v. Elizabeth Forward School District, 764 A.2d 108 (Pa. Cmwlth. 2000).

      2. Legislative authority

      The power to confer employment tenure must be expressly and specifically set forth in enabling legislation. In the absence of enabling legislation, a contract for tenured employment is invalid and unenforceable. Ballas v. City of Reading, 2001 WL 73737 (E.D. Pa.). As a general rule, the relevant enabling statutes for counties and municipalities do not allow the political subdivisions to contract away the right of summary dismissal. Demko v. Luzerne County Community College, 113 F.Supp.2d 722 (M.D. Pa. 2000).

      In order to ascertain whether a municipality has legislative authority to contract, it is necessary to consult the appropriate Municipal Code and/or the municipality's Home Rule Charter. Statewide legislation of general applicability will take precedence over a Home Rule Charter on procedural matters such as the filling of vacancies in a public office. See In re District Attorney, 756 A.2d 711 (Pa. Cmwlth. 2000).

      Assuming an affirmative answer on the municipality's authority to contract, it is necessary to ask if the authorized individual or entity has approved and entered into the contract.

      3.Terms Of The Contract

      The contract must contain the municipality's explicit agreement (i) to employ the individual for a definite period of time or (ii) to limit the municipality's ability to discharge the employee at will.

      An agreement that establishes rates of compensation, employee benefits, vacation leave, sick leave, and paid holidays, but does not contain the elements in Section 3a., does not alter the employment-at-will presumption.

      4. Procedural Requirements

      The contract must be approved in the manner provided by statute and ordinances. The contract must also be signed by the municipality. See Perry v. Tioga County, 694 A.2d 1176 (Pa. Cmwlth. 1997).

      C. Possible Grounds For Challenging Removal

   1. Lack Of Statutory Authority

      Where a statute limits the power of a governmental body to remove an official, the official may successfully challenge an attempted removal. See Sasinoski v. Cannon, 696 A.2d 267 (Pa. Cmwlth. 1997) (county public defender could not be placed on administrative leave by a county manager; statute requires removal by power that appointed defender).

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