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KECK v. COMMERCIAL UNION INS. CO.

February 14, 1991

TAMI KECK, PLAINTIFF,
v.
COMMERCIAL UNION INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Rambo, District Judge.

MEMORANDUM

FACTUAL BACKGROUND

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.

Keck filed a complaint with the Pennsylvania Human Relations Commission ("PHRC") on May 2, 1989. On November 7, 1989, the PHRC issued a letter informing Keck that her complaint had been dismissed for lack of probable cause to credit her allegations of unlawful discrimination. Thereafter, on October 10, 1990, Keck instituted suit in the Cumberland County Court of Common Pleas. Commercial Union removed the action to this court on October 30, 1990.

The complaint is in four counts. Count I alleges that Commercial Union discharged Keck because of a non-job related handicap, in violation of Section 5(a) of the Pennsylvania Human Relations Act, 43 Pa.Stat.Ann. §§ 951, et seq., 955(a) (Purdon 1964 and Supp. 1989) ("PHRA"). Counts II and III allege wrongful discharge and a violation of § 510 of the Employment Retirement Income Security Act of 1974, 29 U.S.C.A. §§ 1001 et seq., 1140 ("ERISA"), respectively, both based on the allegation that Commercial Union discharged Keck to avoid paying her pension benefits. Count IV is a common law breach of contract claim, again based on discharge due to physical handicap, which, Keck urges, is a violation of her employment contract.

DISCUSSION

A.  Motion to Dismiss the Wrongful Discharge Claim

Commercial Union's Reply Brief included a copy of a recent decision, Ingersoll Rand Co. v. McClendon, ___ U.S. ___, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), in which the United States Supreme Court held that ERISA preempts any state common law wrongful discharge claim based upon a discharge for the purpose of preventing attainment of pension benefits. In view of that decision, Keck notified this Court that she would not pursue Count II of her complaint. Commercial Union's motion to dismiss Count II is, therefore, moot and the count is deemed withdrawn.

B.  Motion to Dismiss the Breach of Contract Claim

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.*fn1 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 preempted.

The issue of the scope of the PHRA's preemption over common law causes of action has produced conflicting decisions from the Pennsylvania courts. Most of the decisions involved wrongful discharge actions based upon claims of discriminatory discharge. Here, it is a breach of contract claim at issue, which raises the issue of the PHRA's preemption of all common law actions when discrimination is involved, as opposed to wrongful discharge only.

In DeRamo v. Consolidated Rail Corp., 607 F. Supp. 100 (E.D.Pa. 1985), a discharged employee brought claims for breach of an implied employment contract and for age discrimination. The implied contract of employment arose, the plaintiff urged, from his relocation to a new city in reliance upon the employer's promise of continued employment and promotion. Id. at 101. The defendant argued that, even if the contract existed, the breach of contract claim was preempted because the plaintiff's sole remedy lay in state and federal statutory relief. Defendant relied on, inter alia, the wrongful discharge cases of Bonham v. Dresser Indus., 569 F.2d 187 (3d Cir. 1977) cert. denied, 439 U.S. 821, 99 S.Ct. 87, 58 L.Ed.2d 113 (1979), and Bruffet v. Warner Commun., 692 F.2d 910 (3d Cir. 1982).

The DeRamo court noted that in Bruffet and its predecessors and progeny, the courts declined to expand the public policy-based wrongful discharge tort when the cases involved discrimination. Discrimination, the DeRamo court emphasized, is a public policy matter already benefiting from statutory protection. DeRamo, 607 F. Supp. at 102. Thus, in those cases, the DeRamo court wrote:

  the common thread is that the plaintiffs were
  complaining of discrimination violative of state
  and federal anti-discrimination statutes. . . .
  [I]n contrast . . . Mr. DeRamo's allegations of
  age discrimination are independent of the
  allegations for his breach of contract claim. In
  other words, Mr. DeRamo is not asserting a
  violation of public policy as the sole source of
  both a tort exception and an implied-contract
  (sic) exception to the at-will, employment
  doctrine. To the contrary, Mr. DeRamo's breach of
  contract claim is based on his detrimental
  reliance upon representations made by defendants.
  . . . When viewed in this context, the
  "Bonham" cases are inapposite [sic] in that those
  cases deal only with the public policy tort
  exception. Similarly, unlike the plaintiffs in the
  Bonham line of cases, it is entirely possible for
  Mr. DeRamo to succeed on his breach of contract
  claim without proving discrimination. In short,
  plaintiff's age discrimination claim and his breach
  of contract claim are factually different. . . .

DeRamo, 607 F. Supp. at 102. On those facts the DeRamo court held that the plaintiff's breach of contract claim ...


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