Cohen v. Salick Health Care, Inc.

• Decision Date: 29 August 1991
• Docket Number: Civ. A. No. 89-9025.
• Citation: 772 F. Supp. 1521
• Parties: Daryl COHEN, Plaintiff, v. SALICK HEALTH CARE, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

772 F. Supp. 1521

Daryl COHEN, Plaintiff, v. SALICK HEALTH CARE, INC., Defendant.

Civ. A. No. 89-9025.

United States District Court, E.D. Pennsylvania.

August 29, 1991.

Sidney R. Gold, Lovitz and Gold, Philadelphia, Pa., for plaintiff.

Alan M. Lerner, Cohen, Shapiro, Polisher, Shiekman and Cohen, Philadelphia, Pa., for defendant.

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

The defendant, Salick Health Care, Inc. ("Salick"), moves the Court to grant summary judgment in this diversity action filed by the plaintiff, Daryl Cohen, formerly an employee of Salick. In her complaint, Ms. Cohen alleges that Salick wrongfully terminated her employment in retaliation for her protesting against and threatening to report wrongdoing on the part of Salick to Temple University ("Temple"), with whom Salick contracted to operate and manage a Comprehensive Cancer Center in North Philadelphia.

Ms. Cohen alleges in Count One of her complaint that her termination violated the Pennsylvania Whistleblower Law, 43 Pa. S.A. § 1421 et seq. She also alleges in Count One that her discharge violated a clear mandate of public policy, created by the Pennsylvania Whistleblower Law, which precludes an employer from discharging an employee for reporting the unlawful activities of her employers. In Count Two, Ms. Cohen alleges that her termination breached her oral contract of employment with Salick under which she could be terminated only for just cause, and, in Count Three, she alleges that Salick fraudulently induced her to leave her prior employment by misrepresenting to her that she would be eventually appointed as executive director of a Salick facility. Ms. Cohen subsequently dropped Count Three. (See Final Pre-trial Order, Part IV).

In its motion for summary judgment, Salick contends that it is entitled to summary judgment on the grounds that (1) the Pennsylvania Whistleblower Law is inapplicable to this case, (2) Ms. Cohen was an at-will employee and that the "public policy exception" to the employment at-will doctrine is not applicable to her, and (3) Salick terminated Ms. Cohen's employment for legally adequate reasons.

Summary judgment is proper only where the moving party demonstrates that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Williams v. Delta Truck Body Co., 892 F.2d 327 (3d Cir.1989). An issue is "genuine" only if the evidence is such that a reasonable jury could find for the non-moving party. Floyd v. Lykes Bros. S.S. Co., 844 F.2d 1044, 1045 (3d Cir.1988). In considering a defendant's motion for summary judgment, "the judge must ask ... not whether ... the evidence favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.... The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).

The material facts concerning which no genuine issues have been raised may be summarized as follows:

Salick Health Care, Inc., is a for-profit corporation existing under the laws of the State of California, with its principal place of business in Beverly Hills, California. Salick is in the business of operating and managing hospital-based out-patient cancer treatment centers throughout the nation. Its stock is publicly owned and traded. Salick maintains its own payroll and personnel policies, and makes its own hiring and firing decisions. (Affidavit of Robert Scanlon, Defendant's Ex. W).

On or about September 30, 1988, Temple University entered into a contract with Salick under which Salick contracted to operate and manage an out-patient Comprehensive Cancer Center at Temple University Hospital in North Philadelphia. In the Management Agreement with Temple University, the relationship between the parties is specifically characterized as "that of independent contractor and not partners or joint venturers." (Management Agreement, Plaintiff's Ex. P, p. 10).

Prior to Salick and Temple entering into the Management Agreement, Salick employees Nancy Bookbinder and Kathy Bowing, nationally recognized experts in oncological demographics and feasibility studies, prepared feasibility studies in connection with the creation of a cancer center at Temple University Hospital. The studies prepared by Ms. Bookbinder and Ms. Bowing contained patient load projections for the proposed cancer center over a five-year period. Once completed by Ms. Bookbinder and Ms. Bowing, the studies were forwarded to two other Salick employees, Anthony LaMacchia and Mike Fiore, who used the studies to prepare financial pro formas designed to reflect anticipated revenues from the cancer center. Apparently to make the cancer center a more attractive proposition to Temple, Mr. LaMacchia and Mr. Fiore tripled the optimal patient load projections prepared by Ms. Bookbinder and Ms. Bowing and then directed Ms. Bookbinder to approve the inflated figures. Ms. Bookbinder refused to do so, and sent a memorandum to various personnel at Salick in defense of her original, lower projections. Nevertheless, in June of 1987, the LaMacchia/Fiore figures were sent to Temple and formed a basis for the September 30, 1988 agreement between Salick and Temple regarding the Comprehensive Cancer Center.

Subsequently, in March of 1989, Ms. Cohen was hired by Salick as Operations Manager for the Comprehensive Cancer Center. No written employment contract existed between Salick and Ms. Cohen; however, in discussions with Mr. Robert Scanlon, Salick's Vice-President of the Mid-Atlantic Region, Mr. Scanlon inter alia stated that:

all things considered, unless there was any cause for dismissal, unless there was a problem with her job performance, that she would be with Salick and she would be a success.

and that:

it absolutely a secure position, unless for some reason, for cause, there's no other reason.

(Cohen depo., Plaintiff's Ex. L & M). During her employment, Ms. Cohen was under the immediate supervision of Mr. Scanlon.

Shortly after being hired, Ms. Cohen was approached by Temple personnel with inquiries as to how Salick intended to reach the projections contained in the feasibility and financial studies. Ms. Cohen contacted Mr. Scanlon regarding Temple's inquiries and its requests for more information on feasibility and financial projections. Mr. Scanlon instructed Ms. Cohen that he would "handle the situation" and that she should not turn over additional information to Temple or its representatives.

Ms. Cohen eventually learned from Ms. Bookbinder that the studies given to Temple did not contain Ms. Bookbinder's projections, but rather the inflated projections of Mr. LaMacchia and Mr. Fiore. Ms. Cohen approached Mr. Scanlon and voiced concern over the figures presented to Temple. Scanlon advised her that he did not want her to have anything more to do with the feasibility studies and that if she continued to put pressure on him regarding those studies her employment with Salick could be in jeopardy.

In July of 1989, however, Ms. Cohen again approached Mr. Scanlon and informed him that she was adamantly opposed to concealing or withholding the "real numbers" from Temple and would not take part in it. She told him it was her intention to advise Temple that the figures supplied to it by Salick had been inflated if he did not release the original studies. Scanlon again advised her that if she did so her employment would be in jeopardy.

That same month, Ms. Cohen took it upon herself to inform Mr. Jacobs, a Temple representative, of the inflations in the feasibility studies presented to Temple. Concerned about her future with Salick, she requested Mr. Jacobs to take no action and told him she would attempt to resolve the situation herself. Ms. Cohen then contacted Salick's Director of Human Resources, Ms. Barbara Blanchard, as well as Dr. Bernard Salick, the President of Salick, and explained her concerns regarding the feasibility studies. Neither Dr. Salick nor Ms. Blanchard intervened on Ms. Cohen's behalf, and on September 1, 1989, she was discharged from her employment with Salick.

The Court's jurisdiction in this case is by virtue of diversity of citizenship between the parties. The parties contend and the Court agrees that Pennsylvania substantive law is applicable. When confronted with issues not yet addressed by the Supreme Court of Pennsylvania, this Court is "required to `predict the position which that court would take in resolving this dispute.'" Smith v. Calgon Carbon Corporation, 917 F.2d 1338, 1341 (3d Cir.1990), cert. den., ___ U.S. ___, 111 S.Ct. 1597, 113 L.Ed.2d 660, quoting Robertson v. Allied Signal, Inc., 914 F.2d 360 (3d Cir. 1990).

I. Pennsylvania Whistleblower Law

The first issue presented by Salick's motion for summary judgment is whether the facts concerning which there are no genuine issues come within the ambit of the Pennsylvania Whistleblower Law. Specifically, Salick contends (1) that it is not an "employer" and Ms. Cohen is not an "employee" as defined by the statute, on the ground that Salick is not a "public body" under the statute and is not "funded in any amount by or through the Commonwealth or political subdivision authority", and (2) that there was no agency relationship between Temple and Salick that would make the Whistleblower Law applicable to Salick.

On the other hand, Ms. Cohen contends (1) that Salick is an "employer" by virtue of an agency relationship with the Temple, and (2) Ms. Cohen is an "employee" as defined by the statute on the ground that Salick is a "public body" in that it is "funded in any amount by or through the Commonwealth or political subdivision authority" by virtue of its receipt of...