Pennsylvania Employment Lawyer Alert: “At-Will” Employees Are Not Necessarily Prevented from Asserting Breach of Contract or PWPCL Claims Seeking Unpaid Wages or Benefits

Almost every employer knows that “at-will employees have no contractual entitlement to their jobs. But, sometimes, corporate lawyers try to stretch “at-will” principles too far. For example, in a case our firm is handling now, an “at-will” employees contends that she had a “contractual” entitlement to over 1,000 hours of accumulated and unused leave. Applying well-established principles, the employee argues that her contractual right to the leave time stems from written promises in an employee guidebook as well as other course of conduct evidence. This is not unusual. Judges often find that contractual agreements can be based on “implied” or even “oral” contracts.

The employer has moved to dismiss the lawsuit, arguing that our client’s “at-will” status prevents her from seeking the leave time. In response, we were able to find some cases that make the between wrongful termination claims (where an employee’s “at-will” status is generally fatal to the claim) and claims for wages or benefits earned during the court of the employment (where an employee’s “at-will” status is a bit of a red herring). Here is our write-up:

Consulate’s “at-will” argument misses the mark. “Employment at-will” is employment that “may be terminated at any time, by either the employer or the employee, without cause.” Black’s Law Dictionary, 9th Ed. (West 2009). But that does not mean an “at-will” employee cannot also enjoy contractual rights to wages and benefits accrued during the course of her employment.

The above principle is demonstrated by many decisions in which courts permit “at-will” employees to sue for wages and benefits under Pennsylvania contract law. Here are a few examples:

In Bertolino v. Controls Link, Inc., 2014 U.S. Dist. LEXIS 145983 (W.D. Pa. Oct 14, 2014), an employee, who was issued an Employee Handbook designating him as an “at-will” employee, asserted breach of contract and PWPCL claims when the employer failed to pay him for all of hours worked. See id. at *1-6. Judge Lenihan explained that the employee’s “at-will” status was irrelevant to the claim for unpaid wages: “while an employer may permissibly discharge an at-will employee at any time, the at-will doctrine does not relieve the employer of its contractual obligation to provide the compensation promised in return for the employee’s services.” Id. at *12 (citing Braun v. Wal-Mart Stores, Inc., 24 A.3d 875 (Pa. Super. 2011)).

In Kotlinski v. Mortgage America, Inc., 40 F. Supp. 2d 298 (W.D. Pa. 1998), an “at-will” employee alleged that she was owed certain commission payments pursuant to an “oral employment agreement” with her employer. Id. at 307. Judge Ambrose explained that the claim for unpaid commissions “is not inconsistent with” the employee’s “at-will” status because the notion of “at-will” employment “does not address issues of compensation for work completed prior to an employee’s termination.” Id.

In Pilkington v. CGU Insurance Co., 2001 U.S. Dist. LEXIS 3668 (E.D. Pa. Feb. 12, 2001), an “at-will” employee asserted a contractual right to “accrued bonus monies.” Id. at *20. The employer responded “that as an at-will employee who could be fired for any reason at any time, plaintiff cannot maintain a breach of contract claim.” Id. Judge Waldman rejected this argument, explaining that nothing prevents “at-will” employees from accruing implied contractual rights that are “incidental or collateral to at-will employment.” Id. at *22.

Finally, in Miller v. Cerebian Biotech Corp., 2016 U.S. Dist. LEXIS 154597 (E.D. Pa. Nov. 8, 2016), an ‘at-will” employee claimed she had an implied contractual right to be paid a specific salary for her work. See id. at *1-4. Judge O’Neill explained that the employee’s “at-will” status did not prevent her from pursuing breach of contract and WPCL claims: “While a contract of employment is presumed to be terminable at will by either party absent a specification of definite duration, . . . the existence of an at-will contract does not negate a finding of an employment agreement for purposes of the WPCL.” Id. at *18.

We hope the above research helps Pennsylvania employment rights faced with an overly-expansive use of the “at-will” employment defense.

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