Pennsylvania Supreme Court Issues Ruling That May Increase Employment Related Litigation

June 5, 2024

By: Stephen B. Stern

     In Salsberg v. Mann, 310 A.3d 104 (Pa. 2024), the Supreme Court of Pennsylvania issued a ruling that may increase employment related lawsuits being filed.  In this regard, the court addressed whether an at-will employee can claim that a supervisor intentionally interfered with the at-will employment relationship between the employee and employer, and the court concluded that an employee could assert such a claim.

     In Salsberg, Cara Salsberg worked as an at-will employee for Drexel University under Donna Mann’s supervision from October 2011 until her employment was terminated in June 2017 based on Mann’s recommendation that Salsberg was not performing her job satisfactorily after several years of satisfactory performance.  Salsberg filed suit against Drexel and Mann after her termination from employment claiming intentional interference with her contractual relationship with Drexel.  Salsberg contended that Mann manufactured performance issues, including placing her on a performance improvement plan and then using the performance issues as a pretext to terminate her employment in retaliation for Salsberg going to Mann’s supervisor to discuss the souring of their relationship.  Drexel filed a motion for summary judgment, which the trial court granted, dismissing Salsberg’s complaint.  In addressing the motion for summary judgment, the trial court was asked to determine whether a contractual relationship existed between Salsberg and Drexel with which Mann could interfere in light of the at-will nature of the employment relationship and whether Mann, as Salsberg’s supervisor, was considered a third party to the contract or otherwise engaged in privileged or justified conduct.  The intermediary appellate court affirmed the trial court’s decision and Salsberg appealed to the Supreme Court of Pennsylvania, which agreed to review the case.  The specific issue on appeal was “[w]hether Pennsylvania should apply [Section 766 of the Restatement] to an [i]ntentional [i]nterference claim by an employee at will against a supervisor who acted against that employee, not as an agent on behalf of her employer, but ultra vires and pursuant to personal animus[.]”

     The Pennsylvania Supreme Court began its analysis by examining the nature of tortious interference claims and whether an at-will employment relationship can be interfered with under this doctrine.  The court concluded “that recognition of a claim for intentional interference with an existing at-will employment contract or relationship against a third party to the relationship not only is consistent with – and a logical application or extension of – ‘the very nature of the tort . . . and  . . . Pennsylvania law,’ but also ‘serves the interests of justice.’”  The court explained that although “at-will employment does not confer a contractual ‘right’ to continued employment as between the parties to the employment relationship, it does not follow that an employee has no protectable interest whatsoever in the continuance of that employment relationship vis-à-vis third parties[.]” (emphasis added by court).  Thus, the Supreme Court held it was an error for the trial court to bar categorically intentional interference claims relative to existing at-will employment relationships, and it recognized for the first time “a claim for intentional interference with an existing at-will employment relationship by a third party.”  

     Next, the court examined who qualifies as a third party that can give rise to the tortious interference claim, and it noted that, when the claim is made as a result of the conduct of a coworker, the analysis is not so clear.  In this regard, the court acknowledged that a corporation can only act through its officers, agents, and employees.  As a result, “a plaintiff cannot sue a coworker for the tort of intentional interference with contractual relations between the plaintiff and her employer unless the alleged misconduct of the coworker falls outside the scope of the coworker’s employment or authority.”  To this end, the court found it relevant to conduct a scope of employment analysis when analyzing such claims using the scope of employment factors found in Section 228 of the Restatement (Second) of Agency.  Applying those factors, conduct is deemed to be within the scope of employment if (a) it is the kind the employee is employed to perform, (b) it occurs substantially within the authorized time and space limits, (c) it is actuated, at least in part, by a purpose to serve the employer, and (d) if force is intentionally used by one employee against another, the use of force is not unexpected by the employer.  And the court concluded that it is consistent with Pennsylvania jurisprudence to allow a claim for tortious interference with contractual relations against a company for the actions of its officers, agents, or employees if they act wholly outside the scope of employment and through improper means or for an improper purpose.

     In applying these new standards to Salsberg’s claim, the Supreme Court of Pennsylvania held that Salsberg did not establish a genuine issue of material fact that Mann acted outside the scope of her employment such that Mann qualified as a third party to the employment relationship between Drexel and Salsberg.  As a result, the court concluded that the trial court did not err in granting the motion for summary judgment in favor Mann’s and Drexel’s favor, albeit on different grounds than what the trial court had relied on.  

     In reaching this conclusion, the court found that Mann’s duties included approving Salsberg’s schedule and work assignments, evaluating her job performance, and making recommendations about her employment, including recommendations about hiring, promoting, and firing.  The court noted a dispute between Mann and Salsberg arose regarding the need for some potential overtime work and Salsberg went to Mann’s supervisor to try to address the issue.  The court further found that the performance improvement plan ultimately did follow, as Mann had been expressing concerns about Salsberg’s performance.  Applying the scope of employment factors, the court found that Mann’s evaluation of Salsberg’s performance was consistent with her job responsibilities, it fell within the authorized time and space limits, and it was actuated at least in part by some purpose to serve their employer, Drexel.  

     The Pennsylvania Supreme Court’s decision in Salsberg is significant because it recognizes a cause of action that can increase employment related lawsuits – that being tortious interference claims brought by employees against their employers based on the conduct of their supervisors or other employees.  Such claims are not feasible in several jurisdictions because the conduct of a supervisor or co-worker generally is not considered to be the conduct of a third party that can give rise to a tortious interference claim or it is given protection under an applicable privilege.  Thus, the court’s decision in Salsberg has the potential to create more litigation in Pennsylvania whenever a supervisor or coworker reports any action that results in the termination of employment of an employee.  With that said, the Supreme Court of Pennsylvania’s scope of employment analysis in Salsberg may ultimately limit the viability of such claims, but this new standard invites claimants to challenge conduct that typically false within the scope of employment as being outside the scope of employment.  Companies that conduct business in Pennsylvania likely will want to undertake even greater diligence when receiving feedback from supervisors and other employees that ultimately results in an employee’s termination of employment in order to try to reduce the risk of tortious interference claims.