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GEARY v. UNITED STATES STEEL CORPORATION (03/25/74)

decided: March 25, 1974.

GEARY, APPELLANT,
v.
UNITED STATES STEEL CORPORATION



Appeal from order of Superior Court, April T., No. 513, affirming order of Court of Common Pleas, Civil Division, of Allegheny County, April T., 1971, No. 1920, in case of George B. Geary v. United States Steel Corporation.

COUNSEL

Paul H. Titus, with him Bernard D. Marcus, and Kaufman & Harris, for appellant.

Paul A. Manion, with him Thomas R. Wright, Vincent L. Matera, William L. White, Jr., and Reed, Smith, Shaw & McClay, for appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Pomeroy. Mr. Justice Nix dissents. Mr. Justice Manderino dissents. Dissenting Opinion by Mr. Justice Roberts.

Author: Pomeroy

[ 456 Pa. Page 173]

This appeal comes to us from an order of the trial court sustaining appellee's preliminary objections in the nature of a demurrer and dismissing with prejudice appellant's amended complaint in trespass. The Superior Court affirmed per curiam, without opinion, and we granted allocatur to consider the novel and farreaching arguments advanced by appellant in support of his alleged cause of action.*fn1

The complaint avers that appellant, George B. Geary, was continuously employed by appellee, United States Steel Corporation (hereinafter "company"), from 1953 until July 13, 1967, when he was dismissed from his position. Geary's duties involved the sale of tubular products to the oil and gas industry. His employment was at will. The dismissal is said to have stemmed from a disagreement concerning one of the company's new products, a tubular casing designed for use under high pressure. Geary alleges that he believed the product had not been adequately tested and constituted a serious danger to anyone who used it; that he voiced his misgivings to his superiors and was ordered to "follow directions", which he agreed to do; that he nevertheless continued to express his reservations, taking his case to a vice-president in charge of sale of the product; that as a result of his efforts the product was reevaluated and withdrawn from the

[ 456 Pa. Page 174]

    market; that he at all times performed his duties to the best of his ability and always acted with the best interests of the company and the general public in mind; and that because of these events he was summarily discharged without notice. Geary asserts that the company's conduct in so acting was "wrongful, malicious and abusive," resulting in injury to his reputation in the industry, mental anguish, and direct financial harm, for which he seeks both punitive and compensatory damages.*fn2

The case having been dismissed on a demurrer, all properly pleaded facts are taken as admitted for the purpose of testing the sufficiency of the complaint. Balsbaugh v. Rowland, 447 Pa. 423, 290 A.2d 85 (1972); Engel v. Parkway Co., 439 Pa. 559, 266 A.2d 685 (1970); Fawcett v. Monongahela R. Co., 391 Pa. 134, 137 A.2d 768 (1958).*fn3

Appellant candidly admits that he is beckoning us into uncharted territory. No court in this Commonwealth has ever recognized a non-statutory cause of action for an employer's termination of an at-will employment relationship. What scant authority there is on the subject points the other way. In Henry v. Pittsburgh & Lake Erie Railroad Co., 139 Pa. 289, 21 A. 157 (1891), a railroad employee was suspended because of alleged irregularities in his department. Although

[ 456 Pa. Page 175]

    cleared in a subsequent investigation, he was refused reinstatement. He sued his employer, alleging that he was discharged "maliciously and without probable cause". 139 Pa. at 290. Sustaining the entry of a compulsory non-suit, Chief Justice Paxson said for the Court: "The right [to discharge the plaintiff] was not, and could not well be disputed, without a greater shock to the relations of employer and employee than we are disposed to sanction. A railroad corporation, or an individual, may discharge an employee with or without cause, at pleasure, unless restrained by some contract; so that I do not see that the questions of malice and want of probable cause have anything to do with the case." 139 Pa. at 297. The principle of the Henry case was recently recognized in a federal court as the law of this Commonwealth. McKinney v. Armco Steel Corp., 270 F. Supp. 360 (W.D. Pa. 1967).

The Pennsylvania law is in accordance with the weight of authority elsewhere. 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.*fn4 This power of termination is explicitly recognized in the Restatement of Torts, § 762, Privilege of Selecting Persons for Business Relations: "One who causes intended or unintended harm to another merely by refusing to enter into a business relation with the other or to continue

[ 456 Pa. Page 176]

    a business relation terminable at his will is not liable for that harm if the refusal is not (a) a breach of the actor's duty to the other arising from the nature of the actor's business or from a legislative enactment, or (b) a means of accomplishing an illegal effect on competition, or (c) part of a concerted refusal by a combination of persons of which he is a member."*fn5

We recognize that economic conditions have changed radically since the time of Henry v. Pittsburgh & Lake Erie Railroad Co., supra. The huge corporate enterprises which have emerged in this century wield an awesome power over their employees. It has been aptly remarked that "[w]e have become a nation of employees. We are dependent upon others for our means of livelihood, and most of our people have become completely dependent upon wages. If they lose their jobs they lose every resource, except for the relief supplied by the various forms of social security. Such dependence of the mass of the people upon others for all of their income is something new in the world. For our generation, the substance of life is in another man's hands."*fn6

[ 456 Pa. Page 177]

Against the background of these changes, the broad question to which appellant invites our attention is whether the time has come to impose judicial restrictions on an employer's power of discharge.

Appellant points first to the long-established tort of unjustified interference with prospective advantage. See Restatement of Torts, § 766 (1939) and Restatement (Second) of Torts, §§ 766A and 766B (Tentative Draft No. 14, 1969). He argues that the expectancies which the law protects from interference by outsiders should also be protected against the parties to the relationship. The courts of this Commonwealth have held that both employers and employees are entitled to freedom from meddling by third parties, even where the employment is at will. Dorrington v. Manning, 135 Pa. Superior Ct. 194, 4 A.2d 886 (1939); Padden v. Local 90 United Ass'n of Journeymen Plumbers, 168 Pa. Superior Ct. 611, 82 A.2d 327 (1951). But we do not think that the cases imposing liability on strangers to the protected relationship are apposite to the instant situation. A predicate to liability in such a case is "the absence of privilege or justification on the part of the actor. . . ." Glenn v. Point Park College, 441 Pa. 474, 480, 272 A.2d 895, 898 (1971). Here, as in the Glenn case, the complaint does not negate the existence of a privilege, hitherto regarded as virtually absolute, insulating the company's termination of Geary's employment. Instead, we are asked to impose limitations on this privilege for reasons of policy. The cases involving interference by third parties, turning as they do on the presence or absence of privileges of a different sort, do not seem particularly helpful in evaluating this proposal.

As an operational principle for restricting an employer's power of discharge, appellant suggests the

[ 456 Pa. Page 178]

    rationale of cases imposing liability on the actor on the basis of his motive. While this theory is "on the frontier of the law of tort,"*fn7 it received recognition in Pennsylvania at an early date. See, e.g., Sommer v. Wilt, 4 S. & R. 19 (1818) (abuse of process); Wheatley v. Baugh, 25 Pa. 528 (1855) (dicta; deprivation of water rights). The conduct recognized as tortious in cases of this sort necessarily involves an element of specific intent to cause harm or accomplish an ulterior purpose. Thus in American Bank & Trust Co. v. Federal Reserve Bank, 256 U.S. 350, 65 L.Ed. 983 (1921), a case relied on by appellant, independent banks were held to have a cause of action against a federal reserve bank which accumulated checks drawn against the plaintiffs for the purpose of forcing them to join the federal reserve system. The right of a holder to present checks for payment was not questioned, but the exercise of that right in a particular manner and for a particular end was held to be impermissible. By the same token, the novel theory of recovery which appellant advances must surely involve specific intent on the part of the company to harm Geary or achieve some other proscribed goal. If a general intent, in the sense that an employer knew or should ...


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