Spierling v. First American Home Health Services, Inc.

• Decision Date: 01 September 1999
• Citation: 737 A.2d 1250
• Parties: Leslie SPIERLING, Appellant, v. FIRST AMERICAN HOME HEALTH SERVICES, INC., and Integrated Health Services, Inc., Appellees.
• Court: Pennsylvania Superior Court

737 A.2d 1250

Leslie SPIERLING, Appellant, v. FIRST AMERICAN HOME HEALTH SERVICES, INC., and Integrated Health Services, Inc., Appellees.

Superior Court of Pennsylvania.

Argued April 21, 1999.

Filed September 1, 1999.

Reargument Dismissed September 24, 1999.

John E. Stember, Pittsburgh, for appellant.

Michael Torchia, Jenkintown, for appellees.

Before EAKIN, SCHILLER and BROSKY, JJ.

BROSKY, J.

¶ 1 Leslie Spierling ("Spierling") appeals from the July 13, 1998 trial court order granting Defendant-Appellees First American Home Health Services, Incorporated ("First American") and Integrated Health Services, Incorporated's ("Integrated Health")¹ preliminary objections and dismissing Spierling's complaint.

¶ 2 On May 13, 1998 Spierling filed a two-count complaint against First American and Integrated Health in the Court of Common Pleas of Allegheny County. In Count I she alleged that she was wrongfully terminated after she reported suspected evidence of Medicare fraud, and at Count II she alleged that her wrongful termination constituted age discrimination under the Pennsylvania Human Relations Act.² Spierling sought damages in excess of $25,000 for lost wages, loss of professional status and reputation, and emotional distress.

¶ 3 In November 1991 Spierling was hired as a registered staff nurse by First American and three months later she was promoted to Supervisor of Staff Nurses. In 1993 she became an administrator at one of First American's offices, and held that position until her termination on June 28, 1996. In January 1996 First American filed for Chapter 11 Bankruptcy in the Southern District of Georgia and, as a result of the bankruptcy, Integrated Health became the successor corporation to First American and assumed all of its debts and liabilities.

¶ 4 During the course of Spierling's employment, the federal government conducted an investigation of First American regarding Medicare fraud.³ The federal investigators notified Spierling and other First American employees that an "800" number fraud hotline existed and the employees were told by the investigators to utilize it to report suspected Medicare fraud. Spierling reviewed "old and discarded" files in First American's Shadyside Office (located in Pittsburgh) and found evidence of what she believed to be past Medicare fraud. Spierling's Complaint at p. 2, par. 7. She notified her supervisor, Joan Russo, who in turn reported it to Regional Vice President Karen Ferrari; Ms. Russo also provided the information to the fraud hotline.

¶ 5 Three days after the information was forwarded to the hotline, Ms. Ferrari traveled to Pittsburgh and terminated the employment of Spierling and Russo. Spierling also averred in her complaint that relevant records were shredded in the week following her termination. Spierling also alleged in her discrimination complaint filed with the Pennsylvania Human Relations Commission ("PHRC"), which was considered by the trial court before it ruled on Appellee's preliminary objections to both counts of Spierling's complaint, that Defendant-Appellees had no legitimate reason to fire her and that they refused to provide any explanation regarding why she was terminated. She also alleged in the PHRC complaint that she was told that if she did not dispute the termination, then future prospective employers of Spierling would be informed that she was terminated from First American because of "downsizing".

¶ 6 Spierling's complaint also states that, "Both State and Federal Governments have a strong policy protecting individuals who report Federal Fraud." Spierling's Complaint at p. 2, par. 12.

¶ 7 In July 1996 Spierling, immediately after her termination, retained counsel. She subsequently obtained an Equal Employment Opportunity Commission ("EEOC") preliminary form entitled General Intake Questionnaire; she dated the form as of December 25, 1996 and filed the form on January 3, 1997. On March 27, 1997 Spierling filed a formal charge of discrimination with the EEOC but never filed a claim with the PHRC for a state age discrimination claim; the EEOC cross-filed the claim with the PHRC.

¶ 8 The trial court also considered the EEOC Intake Questionnaire before it ruled on both counts of Spierling's complaint. In the Questionnaire Spierling averred that: prior to her termination she had been given excellent evaluations by her supervisor; Defendant-Appellees' termination of her employment deviated from normal company procedures, which entailed notice, counseling, retraining and probation; three other supervisors were also terminated after they reported suspected evidence of Medicare fraud; Spierling was told that if she did not contest her termination then prospective future employers would not be given negative references; and, that she was told by supervisory personnel at First American to report any evidence of fraud, utilizing the hotline. EEOC General Intake Questionnaire, 12/25/96.

¶ 9 As mentioned, supra, the instant lawsuit was filed on May 13, 1998. On June 18, 1998 Defendant-Appellees filed preliminary objections in the nature of a demurrer. In regard to Count I, they stated that it should be dismissed since Pennsylvania does not have a "Whistleblowers Law" for private sector employees nor a public policy exception for at-will employees such as Spierling. Regarding Count II, they alleged that it should be dismissed since Spierling failed to timely file her administrative complaint under the PHRA.

¶ 10 All parties filed briefs and oral argument was held. On July 13, 1998 the Honorable Ronald W. Folino granted Defendant-Appellees' preliminary objections and dismissed Spierling's complaint. Spierling then filed the instant appeal.⁴

¶ 11 Spierling's statement of question presented is as follows:

Did the lower court err in granting Defendants' demurrer and dismissing Plaintiff's public policy wrongful discharge count where Plaintiff, a nurse-administrator, alleged that she had been terminated for reporting evidence of Medicare fraud to her immediate supervisor, where Plaintiff had an obligation to report such evidence under state and federal law, and where she had been instructed to look for such evidence by her employer?

Spierling's Brief at 2.

¶ 12 Our Supreme Court stated in Shick v. Shirey, 552 Pa. 590, 716 A.2d 1231 (1998),

For purposes of reviewing the dismissal of a complaint based upon preliminary objections in the nature of a demurrer, the averments of the complaint must be taken as true, except to the extent that they constitute conclusions of law. Willet v. Pennsylvania Medical Catastrophe Loss Fund, 549 Pa. 613, 702 A.2d 850 (1997).

Since sustaining the demurrer results in a denial of the pleader's claim or dismissal of his suit, a preliminary objection in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted.... If the facts as pleaded state a claim for which relief may be granted under any theory of law then there is sufficient doubt to require the preliminary objection in the nature of a demurrer to be rejected. County of Allegheny v. Commonwealth of Pennsylvania, 507 Pa. 360, 372, 490 A.2d 402, 408 (1985).

Id. at 594, 716 A.2d at 1233.

¶ 13 Hence, we must accept as true the averments in Spierling's complaint that she uncovered evidence of past Medicare fraud on the part of Appellees and was fired for reporting the alleged fraud. Id.

¶ 14 Our Court stated in Hennessy v. Santiago, 708 A.2d 1269 (Pa.Super.1998),

It is well established that Pennsylvania recognizes the at-will employment doctrine. As this Court has noted, however, there are a few, narrow public policy exceptions to the at-will employment doctrine:

These exceptions fall into three categories: an employer (1) cannot require an employee to commit a crime, (2) cannot prevent an employee from complying with a statutorily imposed duty, and (3) cannot discharge an employee when specifically prohibited from doing so by statute. [Citation omitted.]

Id. at 1273.

¶ 15 Our Supreme Court also stated in Shick v. Shirey, supra,

Pennsylvania law recognizes the doctrine of at-will employment so that, as a general rule, no cause of action exists based upon an employer's termination of an at-will employment relationship.

....

Generally, an employer "may discharge an employee with or without cause, at pleasure, unless restrained by some contract." Henry v. Pittsburgh & Lake Erie Railroad Company, 139 Pa. 289, 297, 21 A. 157 (1891). "Absent a statutory or contractual provision to the contrary, the law has taken for granted the power of either party to terminate an employment relationship for any or no reason." Geary v. U.S. Steel Corporation, 456 Pa. 171, 175, 319 A.2d 174, 176 (1974). The employer's privilege to dismiss an employee with or without cause is not absolute, however, and may be qualified by the dictates of public policy.

....

[There are] exceptions to the general rule that there is no common law cause of action against an employer for dismissal of an at-will employee where the dismissal would threaten clear mandates of public policy. It may be granted that there are areas of an employee's life in which his employer has no legitimate interest. An intrusion into one of those areas by virtue of the employer's power of discharge might plausibly give rise to a cause of action, particularly where some recognized facet of public policy is threatened. The notion that substantive due process elevates an employer's privilege of hiring and discharging his employees to an absolute constitutional right has long since been discredited.... [W]here the complaint itself discloses a plausible and legitimate reason for terminating an at-will employment relationship and no clear mandate of public is violated thereby, an employee at will has no right of action against his employer for wrongful discharge. Geary, 456 Pa. at 184, 319 A.2d at 180 (footnote omitted).

....

We

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