The opinion of the court was delivered by: Rambo, District Judge.
Before the court are defendant's motions to dismiss Counts II
and IV of plaintiff's complaint pursuant to Fed.R.Civ.P.
12(b)(6) and 12(f) and to strike plaintiff's requests for
counsel fees and punitive damages. The facts alleged in the
complaint and plaintiff's brief are as follows. Defendant,
Commercial Union Insurance Company, ("Commercial Union") hired
plaintiff, Tami Keck ("Keck"), on July 3, 1979 as a file clerk,
later promoting her to the position of assembly clerk. Keck was
at all times an at-will employee. Keck was diagnosed as having
juvenile-onset diabetes mellitus in October, 1979. Between then
and January 11, 1989, when Keck was discharged from employment,
she was hospitalized and/or absent from work on a number of
occasions as a result of illness and childbirth complications
related to the disease.
Commercial Union moves to dismiss Count IV, a breach of
contract claim, on the theory that the allegations underlying
it are discrimination and wrongful discharge hence the count is
preempted by the PHRA. Commercial Union essentially argues that
the PHRA preempts any common law action that involves a
prohibited form of discrimination.
Keck counters that the
results in the preemption cases cited by Commercial Union were
based on the plaintiffs' failure to pursue their administrative
remedies first with the PHRC. Keck reasons that since she
properly pursued her remedies before the PHRC, her breach of
contract action is not preempted by the PHRA. Keck and
Commercial Union both oversimply, thus, misrepresent the law on
this issue. Nonetheless, under the facts of this case, the case
law supports a ruling that the breach of contract action is
The Sola court conceded that the argument had merit but went
on to examine the specific language of DeRamo, in which the
court stated that the Pennsylvania cases:
Sola, 804 F.2d at 44 (quoting DeRamo, 607 F. Supp. at 102). The
Sola court emphasized that DeRamo involved a contract claim in
which the breach was an act factually distinct from the
employee's discrimination claim. The claim before the Sola
court was that the act of discrimination itself was a breach in
violation of her employment
contract. Sola, 804 F.2d at 44. Having stated that much,
however, the Sola court declined to decide whether the PHRA
preempted the breach of contract claim before it. Instead, the
court ruled on the merits that the record showed no factual
support for the employee's claim of discrimination.
In Clay v. Advanced Computer Applications, 522 Pa. 86,
559 A.2d 917 (1989), the issue before the court was whether the
failure to seek a remedy through the PHRC precluded a common
law action for employment discrimination. Although the holding
goes primarily to the requirement to exhaust administrative
procedures, the decision also contains instructive language
regarding the viability of common law actions for employment
discrimination. The Clay court wrote:
[A]s a general rule, there is no common law cause
of action against an employer for termination of
an at-will employment relationship. . . .
Exceptions to this rule have been recognized in
only the most limited of circumstances, where
discharges of at-will employees would threaten
clear mandates of public policy. . . . [T]he PHRA
both bestows a right to be free from
discrimination . . . and prescribes procedures
whereby the right "shall" be vindicated. . . .
Clearly, too, the right in question is of purely
statutory origin, for, as discussed supra, common
law rights to be free from termination of at-will
employment are not generally recognized, and we
have never held that at-will employment
terminations arising from sex discrimination are
actionable at common law.
Clay, 522 Pa. at 89-90, 559 A.2d at 918-19 (citations omitted).
The plaintiff in Clay cited to Fye v. Central Trans. Inc.,
487 Pa. 137, 409 A.2d 2 (1979), to argue that the legislature
intended to preserve the right of aggrieved parties to seek
relief for illegal discrimination through common law tort
actions. Addressing the Fye decision, the Clay court wrote:
Contrary to the Superior Court's interpretation of
Fye, our reference to an aggrieved party's right to
pursue "other remedies that might be available" did
not infer that persons claiming to have been
wrongfully terminated from at-will employment were
given free rein to bring action in court alleging
tortious discrimination. . . . Rather, the "other
remedies" to which we referred were essentially
those existing under "provisions of any . . .
municipal ordinance, municipal charter or of any
law of this Commonwealth relating to discrimination
. . .," inasmuch as these were expressly saved by
the PHRA from being repealed or superseded. . . .
Although the legislature chose not to foreclose . .
. those other possible remedies, there is no basis
for belief that there was intended to be broad and
unrestricted access to civil actions, outside of
the PHRA, alleging discriminatory termination of
Clay, 522 Pa. at 95, 559 A.2d at 921.
In a recent unpublished opinion, Schweitzer v. Rockwell
Int'l, 586 A.2d 383 (1990), the Pennsylvania Superior Court
expanded upon Clay insofar as it touched upon the question of
the PHRA's preemption of common law tort claims for prohibited
discrimination. The Schweitzer case involved common law claims
arising out of uninvited sexual advances and molestation of the
plaintiff by her supervisor. In response to the plaintiff's
complaints, the defendant employer fired the supervisor and
transferred the plaintiff to another department. The plaintiff
instituted a court action for assault and intentional
infliction of emotional harm related to the sexual harassment,
and discrimination related to her transfer to another
department. The trial court granted summary judgment for the
defendant, reasoning that plaintiff had not exhausted the
exclusive administrative remedies under the PHRA prior to
institution of suit in court. Schweitzer, at 385.
The Superior Court upheld the trial court with regard to the
sexual discrimination claims, which arose exclusively under the
PHRA. In regard to the actions for assault and intentional
infliction of emotional distress, however, the Superior Court
reversed the trial court. The court explained that:
Section 962(c) of the Human Relations Act provides
the prerequisite to filing a suit based upon a
discrimination claim in the common pleas court. . .
. The issue is whether a complainant who filed a
claim for sexual discrimination with the Commission
may also bring a common-law tort action against her
employer in the common pleas court for assault and
intentional infliction of emotional distress based
upon the same underlying acts. . . . [W]e must
examine the scope of the statute and its remedies
to determine the intent of the legislature.
Id. (emphasis added) (citations omitted). The court observed
that Section 955 of the PHRA describes the actions that
constitute unlawful discriminatory practices, which, in the
case of employers, includes considering race, color, religious
creed, ancestry, age, sex, national origin, or non-job related
handicaps or disability, with respect to the conditions or
privileges of employment. The prohibited practices, such as
discriminatory hiring, firing, and promoting did not include
molestation, which was the underlying act for the plaintiff's
discrimination, assault, and intentional infliction of
emotional harm. Id. at 385-86. The court held that the PHRA's
preemption provision preempts:
civil actions based upon the same grievance
declared unlawful by § 955 of the Act. . . .
"[G]rievance" refers to the phrase "acts declared
unlawful by section 5 of this act," and can in no
way be construed to mean the "underlying acts"
themselves. We conclude that nothing in the intent
of the Legislature or in the language of the Act
forbids independent legal actions based upon the
underlying acts, in this case assault and
intentional infliction of emotional distress.
Schweitzer, at 388-89.
The interests implicated by the plaintiff's claims for
assault and intentional infliction of emotional distress were,
the Schweitzer court wrote, fundamentally different from those
she sought to protect by her claim for sexual discrimination
under the PHRA. Id. The court distinguished Fye and Clay, on
the grounds that Fye involved no independent common law tort
claims, while Clay only established that a wrongful discharge
claim based upon discrimination is preempted by the PHRA and
did not hold that a common law claim for intentional infliction
of emotional distress is barred generally by the PHRA. See
Schweitzer, at 387. Thus, the Schweitzer court ruled that the
plaintiff's tort claims were procedurally and functionally
independent of her sexual discrimination claims and, therefore,
were not preempted and need not be adjudicated within the
framework of the PHRA. Id. at 387. See also Mann v. J.E. Baker
Co., 733 F. Supp. 885 (M.D.Pa. 1990) (Caldwell, J.) (counts in
negligent evaluation of job performance, fraudulent
misrepresentation, wrongful discharge based on specific intent
to harm, and interference with existing contractual
relationships were neither based upon acts of sexual
discrimination nor actionable under PHRA and, therefore, were
not precluded under Clay and similar cases).
The Clay, Schweitzer, and Mann decisions confirm that if a
common law tort claim and a discrimination claim are brought in
the same lawsuit, the common law claim will not be preempted by
the PHRA if it is factually independent of the discrimination
claim. Thus, if an employer effected all the elements of
intentional infliction of emotional distress upon an employee,
and chose to do so because the employee was black, the employer
may be found liable for discrimination as well as intentional
infliction of emotional distress. DeRamo and Sola further flesh
out the preemption issue for breach of contract claims. The
factor critical to the result in DeRamo was that the
plaintiff alleged a set of facts (a promise, a move to a new
city in reliance on the promise, a failure to fulfill the
promise, and resultant damages) to support independently a
breach of implied contract claim regardless of the
discrimination claim. Similarly, the Sola court, while
declining to rule on the preemption issue, suggested that there
must be an act of breach separate from the act of
discrimination for a breach of contract claim to escape
preemption by the PHRA.
Thus, the general rule that has emerged, albeit tortuously,
is simply that if all or part of the facts that would give rise
to a discrimination claim would also independently support a
common law claim, the common law claim is not preempted by the
PHRA and need not be adjudicated within its framework. If,
however, the act that would support the common law claim is
only an act of discrimination, the claim is preempted by and
must be adjudicated within the framework of the PHRA. This rule
holds true for any otherwise viable common law claim, whether
in tort or contract. For a breach of contract claim, the breach
complained of must be something other than the discrimination
In the case at bar, the plaintiff claims that the act of
discrimination was a breach of her employment contract
(presumably an implied contract). There is no separate set of
facts that support either the existence of a contract or a
breach thereof that is outside of the act of discrimination.
Under the reasoning of the decisions discussed, the plaintiff's
breach of contract claim is preempted by the PHRA.*fn2
C. Motion to Strike the Request for Punitive Damages
Commercial Union asserts that Keck's request for punitive
damages under her PHRA claim must be stricken because the
statute does not specifically authorize punitive damages and
because of decisions disallowing punitive damages under Title
VII of the Federal Civil Rights Act, 42 U.S.C.A. 2000e et seq.
Commercial Union argues that since Pennsylvania courts have
been guided by Title VII in construing the PHRA and since in
Protos v. Volkswagen of America Inc., 797 F.2d 129, (3d Cir.
1986), cert. denied 479 U.S. 972, 107 S.Ct. 474, 93 L.Ed.2d 418
(1986), the Third Circuit ruled that punitive damages are not
available for Title VII violations, it follows that punitive
damages are not available under the PHRA. Those premises,
though true, do not lead to the conclusion advanced by
It is true that Title VII cases may provide guidance for
issues that arise under the PHRA. It is also true that Section
706(g) of Title VII expressly provides for awards of backpay or
"any other equitable relief," and that courts have held,
accordingly, that relief other than back pay and equitable
relief is not authorized under Title VII. The language of the
PHRA and that of several decisions, however, provides the basis
for distinguishing Title VII decisions on the issue of punitive
damages. In fact, Protos, the Title VII decision cited by
defendant to argue that punitive damages are not available
under the PHRA, contains language that soundly negates that
In Protos, the court held that Title VII's provision
authorizing the award of "any other equitable relief" the court
deems appropriate does not authorize an award of the value of
unemployment compensation benefits. Protos, 797 F.2d at 138.
The court reasoned that unemployment compensation benefits are
akin to compensatory damages, which like punitive damages are
considered legal relief. Id. Since the Third Circuit had held
previously that punitive damages are not available under Title
VII because they are viewed as a legal remedy, the Protos court
held that compensatory damages are unavailable as well. Id.
(citing Richerson v. Jones, 551 F.2d 918 (3d Cir. 1977)).
Unlike Title VII, however, the relief provision of the PHRA,
43 P.S. § 962(c) is quite broad and expressly authorizes action
including but not limited to back pay or "any other legal or
equitable relief as the
court deems appropriate." Further, despite the paucity of state
court decisions and several conflicting federal district court
decisions, there are decisions that persuade this court that
punitive damages are permissible under the PHRA. The
Pennsylvania Commonwealth Court has upheld the award of
punitive damages, expressly holding that the PHRA does not
contain the damages limitation expressed in Title VII.
Brown Transport Corp. v. Commonwealth of Pa., Pa. Hum. Rel.
Comm'n, 133 Pa.Com. 545, 578 A.2d 555, 562 (1990). Further,
other courts have recognized that relief under the PHRA is not
limited to that available under Title VII. See, e.g., Nestor v.
Quaker State Coca-Cola Bottling Co., 579 F. Supp. 289, 292
(W.D.Pa. 1984); Pennsylvania Human Rel. Comm'n v. Zamantakis,
478 Pa. 454, 459, 387 A.2d 70, 73 (1978) (under "legal or
equitable relief" provision, court could award damages for
humiliation and mental anguish).
As to the conflict in the federal courts, this court believes
the decisions in which punitive damages were allowed are more
persuasive and, perhaps, distinguishable from those in which
punitive damages were not allowed. In Cain v. Hyatt,
734 F. Supp. 671, 685 (E.D.Pa. 1990), the court predicted that the
Pennsylvania Supreme Court would allow the imposition of
punitive damages under the PHRA. The court relied on the
language of Zamantakis approving damages for humiliation and
mental anguish, the fact that punitive damages are considered a
form of legal relief, and the "sweeping remedial purpose and
language" of the PHRA. Id. In Welcker v. Smithkline Beckman,
746 F. Supp. 576, 579 (E.D. Pa. 1990), the court acknowledged
the conflict in the case law over this issue. The court,
however, provided a well-reasoned argument for its view that
punitive damages are available under the PHRA.
The Welcker court noted first, that the Pennsylvania Supreme
Court has found that the PHRA permits courts to award "`legal
or equitable' relief includ[ing] damages for humiliation and
mental anguish." Welcker, 746 F. Supp. at 579 (quoting
Zamantakis, 478 Pa. at 459, 387 A.2d at 73). The Welcker court
further relied upon the Commonwealth Court's Brown ruling
allowing an award of punitive damages. The Welcker court then
pointed out that a number of lower state courts and federal
district courts have awarded or upheld the award of
compensatory or punitive damages. See Welcker, 746 F. Supp. at
580. Finally, the Welcker court dismissed decisions that have
denied punitive damages because those decisions were based upon
the belief that the plaintiffs should have sought their damages
under claims of intentional infliction of emotional distress, a
position the Welcker court found untenable. Id. (citations
This court agrees with the Brown, Cain, and Welcker courts.
There is no question that punitive damages are considered a
form of legal relief and that the statute authorizes legal
relief in addition to equitable relief. The fact that Title VII
provides a framework for construing the PHRA does not mean that
the courts must flesh out that framework exactly as Title VII
has been. This is particularly true when a specific provision
of the PHRA diverges from the corollary provision in Title VII.
The statutory language, its divergence from that found in Title
VII's remedies provision, and the case law indicate that the
Pennsylvania Supreme Court would find the award of punitive
damages permissible under the PHRA. Accordingly, the court will
deny Commercial Union's motion to strike plaintiff's request
for punitive damages.
D. Motion to Strike the Request for Attorneys' Fees
Keck supports her request for attorney's fees under the PHRA
by arguing that attorney's fees, like compensatory or punitive
damages, may be awarded as "equitable or legal" relief.
Commercial Union argues, on the other hand, that attorneys'
fees are not available because the PHRA does not provide for
them expressly. According to Commercial Union, Consumers Motor
Mart v. Commonwealth of Pa., 108 Pa.Com. 59, 529 A.2d 571
(1987) "specifically held that such an award is not warranted
by the Act." Defendant's Brief, at 5. In fact, Consumers Motor
Mart held only that the Pennsylvania Human Relations Commission
has no authority to award counsel fees, id. at 67, 529 A.2d at
575-76, and this court fully agrees.
The Commission is, of course, an administrative agency
created by statute. As such, it is an "extra judicial"
tribunal, which, the Pennsylvania Supreme Court advises, must
exercise its power and authority within the strict and exact
limits of the statutory provisions under which it operates.
Process Gas Consumers Group v. Pennsylvania Public Utility
Commission, 511 Pa. 88, 511 A.2d 1315 (1986). The Consumers
Motor Mart holding is merely consistent with this established
limitation upon the powers of extra judicial tribunals. The
holding can not be construed as a restriction upon a court's
equitable and legal powers. The Zamantakis court attested to
that when it held that the Commission had no power to award
damages for humiliation and mental anguish, but observed that
after the legislature amended the PHRA to permit courts to
fashion "any other legal or equitable relief as the court deems
appropriate," a court could award such damages. Zamantakis, 478
Pa. at 459, 387 A.2d at 73.
Nevertheless, the court does not view the "equitable or legal
relief" provision of the PHRA as a basis for awarding counsel
fees outside the confines of the American Rule, which compels
each party in a lawsuit to bear its own attorneys' fees. There
are exceptions to the rule, including the statutory and
contractual allowances for attorneys' fees noted by Commercial
Union. The court agrees that neither of those exceptions
applies to the instant case. There is, however, another
exception which allows federal courts to exercise their
equitable powers and award attorney fees to the prevailing
party when the party's opponent has acted "`in bad faith,
vexatiously, wantonly, or for oppressive reasons.'" Ford v.
Temple Hosp., 790 F.2d 342, 346 (3d Cir. 1986); Hall v. Cole,
412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973). In
Pennsylvania, the bad faith exception has been bolstered by a
statutory exception, which provides reasonable attorneys' fees
when "the conduct of another party in commencing the matter or
otherwise was arbitrary, vexatious or in bad faith." 42
Pa.Cons.Stat.Ann. § 2503(9).
The bad faith exception is punitive in nature. Hall, 412 U.S.
at 5, 93 S.Ct. at 1946. Although it is applied most commonly to
conduct during the pursuit of litigation, the exception is also
applicable to the conduct that forms the basis of an action.
Id. at 15, 93 S.Ct. at 1951; Straub v. Vaisman & Co.,
540 F.2d 591, 598 (3d Cir. 1976). In keeping with its punitive nature,
however, an award of attorneys fees under this exception is
warranted only when the conduct reflects a "`willful and
persistent defiance of the law.'" Straub, 540 F.2d at 598
(quoting Kahan v. Rosenstiel, 424 F.2d 161, 167 (3d Cir. 1970)
cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290
(1970)). Thus, the standard for applying counsel fees under the
bad faith exception is quite stringent, unlike the standard for
award of attorneys fees under Title VII, 42 U.S.C. § 2000e-5(k).
See Rosenfeld v. Southern Pacific Co., 519 F.2d 527 (1975)
(under Title VII, award of attorneys' fees is considered award
of "costs," which is the usual practice in American court
system and not considered "punishment").
In light of the broad equitable and legal power afforded the
court under the PHRA's remedies provision, the bad faith
exception to the American Rule, and Pennsylvania's statutory
bad faith exception, this court believes that an award of
counsel fees is possible under the PHRA. Such an award would be
the exception rather than the rule. The court cautions
plaintiff that counsel fees for conduct related to the basis of
the action would not be awarded if punitive damages were denied
and moreover, would not necessarily be awarded simply because
punitive damages were awarded. Whether the plaintiff can
overcome the American Rule remains to be seen. For the present,
however, the court will deny Commercial Union's motion to
strike the request for attorneys' fees. The court will enter an
order in accordance with this memorandum.
In accordance with the accompanying memorandum, IT IS HEREBY
1) Count II of this action is deemed withdrawn;
2) Defendant's motion to dismiss Count IV is granted;
3) Defendant's motion to strike plaintiff's request for
punitive damages is denied;
4) Defendant's motion to strike plaintiff's request for
attorney's fees is denied.