Justia Pennsylvania Supreme Court Opinion Summaries

Leola Restaurant maintained an umbrella commercial liability insurance policy with Appellant, Mutual Benefit Insurance Company, which contained an employer’s liability exclusion. Leola Restaurant conducted its business on a property leased from Appellees Christos Politsopoulos and Dionysios Mihalopoulos. During the policy period, Appellee Marina Denovitz, an employee of Leola Restaurant, fell from an outside set of stairs and suffered injuries. She brought a negligence action against the Property Owners in the common pleas court, asserting that they were negligent in maintaining the stairs in an unsafe and dangerous condition. The Property Owners sought defense and indemnification from Appellant, per the umbrella policy. The insurance company sought a declaratory judgment that an exclusion in the restaurant's umbrella policy applied to Appellee's case, and that it was not obligated to indemnify the restaurant. After review, the Supreme Court concluded the employer’s liability exclusion in the umbrella policy was ambiguous. "Application of governing principles of insurance policy construction yields the understanding that the ambiguous exclusionary language pertains only to claims asserted by employees of 'the insured' against whom the claim is directed, which understanding gains further support by reference to the policy’s separation-of-insureds provision. Since the Property Owners are not Ms. Denovitz’s employers, the employer’s liability exclusion is inapplicable." View "Mutual Ben. Ins. Co. v. Politsopoulos" on Justia Law

In 2009, George Lawrence, while employed by Schneider National Inc., suffered a work-related injury when he slipped and fell in a parking lot leased by Domtar Paper Company, and allegedly owned and maintained by Commercial Net Lease Realty Services, Inc., Commercial Net Lease Realty Trust, Commercial Net Lease Realty, Inc., National Retail Properties, Inc., and National Retail Properties Trust. As a result of this injury, Schneider's workers' compensation carrier, Liberty Mutual Insurance Company, paid Lawrence $33,929.23 in workers' compensation benefits. The issue this case presented for the Supreme Court's review centered on whether section 319 of the Pennsylvania Workers' Compensation Act (WCA) conferred on employers or their workers' compensation insurers a right to pursue a subrogation claim directly against a third-party tortfeasor when the injured employee took no action against the tortfeasor. Based on established precedent, the Superior Court held that Section 319 did not permit employers/insurers to commence an action directly against the third-party tortfeasor, and affirmed the trial court's grant of preliminary objections in favor of the tortfeasors. Agreeing with that reasoning, the Supreme Court affirmed. View "Liberty Mutual Ins. Co. v. Domtar Paper Co." on Justia Law

The issue this discretionary appeal presented for the Pennsylvania Supreme Court's review centered on whether a county was required to collectively bargain with a union representing county employees before a local workforce investment board could seek competitive bids for the provision of workforce development services previously provided by the same county employees. The issue reduced to whether the local board acted as the county's agent when it sought the bids and ultimately contracted with private entities for the services at issue. The appellant Union argued that the Local Board was to merely "advise and assist" the County in "setting policy to promote workforce investment programs," and that ultimately it was the County who needed to make the decision to bargain with the Union over seeking competitive bids. The Supreme Court found that substantial evidence supported the Pennsylvania Labor Relations Board's finding that the County lacked control over the Local Board's decision to contract for the services through a competitive bid process, and that the decision was well within the statutory authority granted to the Local Board. As such, the Commonwealth Court's decision to affirm the Labor Relations Board's decision was affirmed. View "AFSCME, Council 87 v. Labor Relations Board" on Justia Law

The issue this discretionary appeal presented for the Supreme Court's review centered on whether the class action proceedings in this case improperly subjected Appellants to a “trial by formula.” The trial court certified the class, a jury rendered a divided verdict, and the Superior Court affirmed in part and reversed in part. Appellees brought various class action claims against their former employers, Wal-Mart Stores, Inc., and Sam’s Club (collectively, “Wal-Mart”), based on policies and conduct pertaining to rest breaks and meal breaks. Appellees alleged Wal-Mart promised them paid rest and meal breaks, but then had forced them, in whole or in part, to miss breaks or work through breaks, and also to work “off-the-clock.” The trial court certified a class consisting of "all [then] current and former hourly employees of Wal-Mart in the Commonwealth of Pennsylvania from March 19, 1998 to the present December 27, 2005.” The class ultimately consisted of 187,979 members. Ultimately, the jury rendered a verdict in favor of Wal-Mart on all claims relating to meal breaks but in favor of Appellees on all claims relating to rest breaks and off-the-clock work. The amount of the judgment ultimately entered on the verdict was $187,648,589. After Wal-Mart appealed, the Superior Court affirmed in part and reversed in part in a published unanimous per curiam opinion, which corrected a patent mathematical error committed by the trial court, reversed the award of attorneys’ fees, and remanded to the trial court to recalculate the lodestar it had employed to determine the amount of attorneys’ fees. The issues Wall-Mart's appeal raised for the Supreme Court's review were: (1) whether Wal-Mart was subjected to a “trial by formula,” (suggesting that the class claims could only be properly proven by an individual examination of the 187,979 class members to determine their claims); and (2) whether Appellees were thereby improperly relieved of their burden to produce class-wide common evidence on key elements of their claims. The Supreme Court found there was a single, central, common issue of liability here: whether Wal-Mart failed to compensate its employees in accordance with its own written policies. On that question, both parties presented evidence. Wal-Mart’s liability was proven on a classwide basis. Damages were assessed based on a computation of the average rate of an employee’s pay (about eight dollars per hour) multiplied by the number of hours for which pay should have been received but was not. In the Court's view, "this was not a case of 'trial by formula' or of a class action 'run amok.'" Accordingly, the judgment of the Superior Court was affirmed. View "Hummel v. Walmart Stores, Inc" on Justia Law

The Mt. Lebanon Police Officer's Pension Plan provided for cost-of-living adjustments ("COLAs") to augment pension benefits for retirees. For the Plan years 2000-03 ("2000 Plan") by the United Police Society of Mt. Lebanon ("Union") and the Municipality of Mt. Lebanon, retired plan participants were eligible for yearly COLAs of 2% of the participant's final average monthly compensation until such time as the participant's benefits reached 90% of his or her final average monthly compensation. This provision did not differentiate between regular retiree participants and early retiree participants. In 2004, the COLA was changed for some early retirees (specifically those with fewer than 20 years of service), to reduce the benefit from 2% of the retiree's final average monthly compensation to 2% of the actual early retirement benefits ("2004 Plan"). No adjustment was made in the Plan with respect to the COLA cap of 90% of the participant's final average monthly compensation for any participant. The issue this case presented for the Supreme Court's review centered on the change from the 2000 Plan to the 2004 Plan. The municipality submitted to an actuary making the statutorily-mandated cost study (required by Act 205 - The Municipal Pension Plan Funding Standard and Recovery Act) incomplete and/or inaccurate information (although the municipality disputed this characterization). Thereafter, the municipality administered the plan term along the lines of the incomplete or inaccurate assessment that resulted, in effect unilaterally modifying both the plan and the CBA. The Commonwealth Court here ultimately determined that because Act 205 has statutory primacy over any CBA, the plan must be administered as understood by the actuary when it made its Act 205 cost study, even if this effectively altered a bargained-for term of the parties. The Supreme Court reversed and remanded: Section 305(a) of Act 205 required a municipality to obtain a complete and accurate cost estimate before the municipality adopted any benefit plan modification so as to have accurate information with respect to the plan's solvency. At the same time, a municipal employer's unilateral change of a mandatory subject of bargaining, without first negotiating with the union, interferes with the employees' collective bargaining rights, and thus constitutes an unfair labor practice. Accordingly, the Court held that it was error to impose a unilateral change to the Plan at odds with its plain language based on the results of an incomplete and inaccurate Act 205 cost study. The Commonwealth Court was reversed and the case remanded to effectuate a complete and accurate Section 305 cost study. View "United Police Society of Mt. Lebanon v. Mt Lebanon Commission" on Justia Law

In 2013, the Department of Health (DOH) announced that, pursuant to an extensive reorganization of public health services referenced in Governor Tom Corbett’s 2013-2014 budget, twenty-six State Health Centers would be closed and approximately twenty-six nurse consultants would be furloughed. In response, a lawsuit was filed in Commonwealth Court’s original jurisdiction by Appellants SEIU Healthcare Pennsylvania, an unincorporated labor organization, five nurses employed by the Centers and represented by SEIU, and five Pennsylvania state legislators (collectively referred to as “SEIU”), seeking injunctive and declaratory relief. Specifically, SEIU sought to prevent Appellees, the Commonwealth of Pennsylvania, Governor Corbett, the DOH, and DOH Secretary, Michael Wolf, from closing the Centers and furloughing the nurse consultants. The Commonwealth Court denied the union's request. Upon review of the matter, the Supreme Court found no reasonable ground for the denial of injunctive relief, and, accordingly, reversed the order of the Commonwealth Court. View "SEIU Healthcare, et al v. Pennsylvania" on Justia Law

The issue this case presented for the Supreme Court's review centered on the proper allocation of the burden of proof between an employer and a workers' compensation claimant regarding the injured employee's legal eligibility under federal immigration law to obtain suitable employment whenever the employer seeks to suspend workers' compensation disability benefits. The Court held that in this case, the Commonwealth Court correctly determined that Appellant, Kennett Square Specialties bore the burden to prove that the loss of earning power of its employee, David Cruz, was due to his lack of United States citizenship or other legal work authorization in order to obtain a suspension of his workers' compensation disability benefits. Furthermore, the Court held that Claimant's invocation of his Fifth Amendment right against self-incrimination when questioned at the hearing before the Workers' Compensation Judge did not constitute substantial evidence of his alleged lack of legal authorization to be employed in the United States, and thus could not, standing alone, furnish sufficient evidence for the WCJ to suspend Claimant's benefits. View "Cruz v. Workers' Compensation Appeal Board" on Justia Law

In 1975, the Pennsylvania Labor Relations Board certified Intervenor, AFSCME, District Council 89 ("Union") as the exclusive representative of a unit for purposes of collective bargaining which included, inter alia, prison security guards, special guards, and transportation, maintenance, and supply employees. Since the unit certification, Appellee Lancaster County and the Union have been parties to several collective bargaining agreements. However, notwithstanding the Board's certification of maintenance employees in the bargaining unit, the parties have not negotiated over the wages, hours, and conditions of employment for the Maintenance Mechanic I and Maintenance Mechanic II positions. In 2009, the County Commissioners adopted a reorganization plan that placed all County maintenance and custodial employees under the centralized Facilities Management Department. Two days later, the Union filed with the Board a petition for bargaining unit clarification which sought to include the positions of Maintenance Mechanic I and Maintenance Mechanic II in the unit of prison guards. The issue on appeal to the Supreme Court was whether county prison maintenance employees who supervise inmates constituted "guards at prisons" for purposes of collective bargaining unit placement under the Pennsylvania Employe Relations Act. After review, the Court held that the Commonwealth Court did not apply the proper level of deference in its appellate review of the decision of the Labor Relations Board which concluded that supervisory maintenance employees at issue were “guards at prisons” for purposes of collective bargaining. Thus, the Court reversed the decision of the Commonwealth Court and reinstated the Board’s determination. View "Lancaster Cty v. PA Labor Relations Bd." on Justia Law

The issue before the Supreme Court in this case was whether the Mechanics' Lien Law of 1963 authorized a union employee benefit trust to file a lien on behalf of union members who performed work for a construction contractor. Developer raised a preliminary objection in the nature of a demurrer as to each complaint, alleging that the Trustees lacked standing to assert a mechanics' lien claim on behalf of the unionized workers because such workers were employees of Contractor and, as such, were neither "contractors" nor "subcontractors." The Supreme Court concluded that the union workers were not subcontractors, and the Trustees, by corollary in their representative capacity, were not entitled file a lien claim on the workers' behalf. Although the 1963 Act was intended to protect subcontractors who suffer harm occasioned by the primary contractor’s failure to meet its obligations, we have determined that the Legislature did not intend the term "subcontractor" to subsume employees of the primary contractor. Furthermore, the Superior Court erred in overturning the demurrers based on an implied-in-fact contract theory. The order of the Superior Court was reversed, and the case is remanded for reinstatement of the county court’s order. View "Bricklayers of Western PA v. Scott's" on Justia Law

In this case, the trial and intermediate courts determined that a general contractor was not a statutory employer relative to an employee of its subcontractor. The issue before the Supreme Court centered on the tension between such rulings and the Supreme Court’s longstanding jurisprudence that conventional subcontract scenarios serve as paradigm instances in which the statutory-employment concept applies. Appellant Worthington Associates, Inc., was hired as the general contractor for an addition to a Levittown church. Worthington, in turn, entered into a standard-form subcontract with Patton Construction, Inc., of which Appellee Earl Patton was the sole shareholder and an employee, to perform carpentry. While working at the construction site, Mr. Patton fell and sustained injuries to his back. Subsequently, the Pattons commenced a civil action against Worthington contending that the company failed to maintain safe conditions at the jobsite. Worthington moved for summary judgment on the basis that it was Mr. Patton’s statutory employer and, accordingly, was immune from suit. After the motion was denied, trial proceeded during which Worthington reasserted its claim to immunity in unsuccessful motions for a nonsuit and a directed verdict. "Having set up an errant dichotomy for the jurors, the [trial] court proceeded to instruct them concerning the differences between independent contractors and employees at common law. In doing so, the trial court compounded the underlying conceptual difficulties it had engendered, because [the Supreme] Court has long held that, for the salient purposes under Sections 203 and 302(b) of the WCA, the term 'independent contractor' carries a narrower meaning than it does at common law." The jury returned a verdict in favor of the Pattons in the amount of $1.5 million in the aggregate. Post-trial motions were denied, and Worthington appealed. A Superior Court panel affirmed. The Supreme Court reversed, finding that Mr. Patton’s relationship with the owner here was undeniably a derivative one, arising per a conventional subcontract with a general contractor (Worthington). "[U]nder longstanding precedent, neither Patton Construction, Inc., nor Mr. Patton was an 'independent contractor' relative to Worthington." View "Patton v. Worthington Associates" on Justia Law