United States District Court, Eastern District of Pennsylvania
MEMORANDUM RE: DEFENDANT’S MOTION TO DISMISS
Plaintiff Joseph Urban filed this diversity action against Defendant Walgreen Co. alleging wrongful termination based on his refusal to participate in illegal conduct violating the Pennsylvania Pharmacy Code, Medical Assistance regulations, and criminal laws. Urban seeks an injunction prohibiting Walgreen from continuing to discriminate against employees based on their refusal to participate in unlawful activity, compensatory and punitive damages, and costs and attorney’s fees. The Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Walgreen filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). For the following reasons, Walgreen’s motion will be denied.
II. Facts and Procedural History
Urban’s complaint asserts one court of wrongful termination in violation of Pennsylvania public policy against Walgreen. His claim rests on his refusal to participate in allegedly unlawful conduct in violation of the Pennsylvania Pharmacy Code, Medical Assistance regulations, and the statutory and common law. Urban, a former Walgreen pharmacist, claims that after losing a significant portion of its prescription drug business as a result of ending its relationship with Express Scripts Inc., the Walgreen store where he worked began receiving “large numbers” of calls from customers saying they had been notified that Walgreen had refilled their prescriptions without being asked to do so. Am. Compl. ¶¶ 13-16 (ECF 6). According to Urban, health insurance providers require that pharmacies reverse (i.e. cancel out) claims for prescriptions that are not picked up by patients within seven to ten days so that insurers do not pay for prescriptions that are unused or unrequested. Id. ¶¶ 17-20. Some prescriptions have co-pays, which require patients to take the “affirmative step of paying the co-pay” before they can be dispensed. Id. ¶ 21. But other prescriptions have zero co-pays and do not require any patient action before they are dispensed. Id. ¶ 22.
Urban alleges that in mid- to late-January 2012, contrary to the requirement that pharmacies reverse claims for both co-pay and zero co-pay prescriptions not picked up by patients, his manager instructed him to “segregate all zero co-pay prescriptions [that had not been picked up by patients], to not return them to stock nor reverse the claim, but instead to ring-up the zero co-pay prescriptions on the cash register, attest to consulting or offering to consult during the ring-up, falsely sign if needed for receipt of prescription by patient, attach the register receipt to the prescription bag, place it in a mailing envelope with the patient’s name and address on it, seal and leave in bin for mailing.” Id. ¶ 23. Urban refused to comply with his manager’s request, citing Pennsylvania Pharmacy Code and Medicaid Regulations that prohibit mailing prescriptions without patient request, dispensing prescriptions without offering counseling, and dispensing prescriptions without a patient signature. Id. ¶¶ 25-31. The following day, Urban’s manager told him she had spoken to a Walgreen’s Vice President named Natasha and a District Supervisor, Jim Reed, and confirmed the new policy was legal, but did not provide written confirmation of the new policy’s legality. Id. ¶ 32-33. Urban again refused to comply, and a few days later his manager instructed him to “merely segregate the zero co-pay prescriptions and place them in a separate bin” for other employees to handle. Id. ¶¶ 34-36. Urban complied and noted that upon returning to work the next day or the following week, the zero co-pay bin sometimes would be empty, presumably because those prescriptions were being mailed to patients. Id. ¶¶ 37-38. About six weeks later, Urban was informed that Walgreen had again changed its policy and was having staff call patients to get authorization before mailing prescriptions. Id. ¶ 40.
On about March 21, 2012, about six weeks after his manager initially directed him to comply with the new prescription policy, Urban was called into a meeting with District Supervisor Reed and the District Loss Prevention Manager, who told him that Walgreen was displeased with his practice of providing customers with cost adjustments. Id. ¶¶ 41-42. Urban responded that he had always been permitted to provide such adjustments, and that these were consistent with his training and left to his discretion as a pharmacist. Id. ¶¶ 43, 50. Urban told Reed in an e-mail that he believed he was being chastised for providing cost adjustments in retaliation for his earlier refusal to comply with the January policy regarding sending prescriptions by mail. Id. ¶ 45. Five days after their initial meeting, Urban met again with Reed and the Loss Prevention Manager and was terminated. Id. ¶¶ 46, 51.
Urban filed his first amended complaint against Walgreen on July 1, 2014 (ECF 6). Walgreen moved to dismiss the complaint for failure to state a claim on July 14, 2014 (ECF 7). Urban filed his opposition to the motion on August 1, 2014 (ECF 9), and Walgreen filed its reply on August 8, 2014 (ECF 10).
III. The Parties’ Contentions
In his amended complaint, Urban alleges one count of wrongful termination in violation of public policy enacted by the Pennsylvania Pharmacy Code, Medical Assistance Code,  and both civil and criminal law prohibiting fraud and theft by deception. Am. Compl. ¶¶ 53-81 (ECF 6). He claims that by complying with Walgreen’s new prescription policy, he would have “aided and abetted Defendant in committing fraud and theft-by-deception against the patients’ insurance companies, ” as these companies would be paying for prescriptions that were never actually requested or picked up by patients. Id. ¶¶ 72, 80. Additionally, Urban argues that he had a statutory duty to comply with various Pennsylvania pharmacy and Medical Assistance regulations as a licensed pharmacist. Id. ¶¶ 70-71, 73-74. Therefore, he claims, Walgreen’s conduct falls under the exceptions to the at-will employment doctrine that prohibit an employer from terminating an employee because the employee refused to commit a crime or because the employee complied with a legal obligation. Id. ¶¶ 54-58, 79-80.
Walgreen argues that the Pharmacy Code and Medical Assistance regulations do not implicate a clear mandate of public policy applicable to Urban and are insufficient legal bases for his allegations that he was required to commit a crime. Def.’s Memo. of Law at 9-14 (ECF 7-1). It further claims that Urban was never required to commit a crime, as (1) he was permitted to merely segregate zero co-pay prescriptions instead of mailing them and (2) three out of the four Medical Assistance regulations that Urban cites apply to the Department of Public Welfare, not to pharmacists. Id. at 12. According to Walgreen, the final Medical Assistance regulation cited by Urban prohibits enrolled providers from knowingly presenting for payment fraudulent or medically unnecessary claims and is inapplicable in this case because Urban was merely asked to package prescriptions, did not present them for payment, and does not allege he was an “enrolled provider” within the meaning of the statute. Id. at 12-13. Furthermore, Walgreen argues that there is no evidence that any of the prescriptions in question actually belonged to Medical Assistance patients or that Urban was required to submit fraudulent claims to Medical Assistance for medically unnecessary refills. Id. at 13-14. Finally, Walgreen argues that even if Urban had a statutory duty to report this conduct, assuming it violates the law he cites, that statutory duty was not satisfied, as Urban complained only to his manager and not to any higher authority. Id. at 15-16.
Urban counters by arguing that Walgreen mischaracterizes his complaint as one based on retaliation for reporting illegal activity, while the complaint is actually based on retaliation for a refusal to comply with an unlawful directive and violate the law. Pl.’s Memo. of Law at 1, 5 (ECF 9). He contends that his allegations of a statutorily-imposed duty, Walgreen’s order to go against this duty, and his refusal to comply are sufficient to fall within an exception to at-will employment doctrine. Id. at 10-12. Urban also argues that the Pharmacy Act and Medical Assistance code, as measures enacted in the interest of public health and safety, are well within the ambit of regulations announcing a clear mandate of Pennsylvania public policy and are therefore “sufficient to support a wrongful termination claim.” Id. at 13-20. And he reiterates his claims that Walgreen directed him to participate in committing fraud and theft-by-deception. Id. at 20-22. Urban concedes that he did not plead facts regarding whether any of the zero co-pay prescriptions he was asked to package actually belonged to Medical Assistance patients. Id. at 24. However, he argues that the court may reasonably infer from the location of the Walgreen pharmacy where he was employed, Allentown, in which nearly nineteen percent of citizens live below the poverty line, that at least some of these prescriptions likely belonged to Medical Assistance patients. Id.
In its reply, Walgreen argues that Urban’s discussion of the Pharmacy Act is a straw man and that the provisions of the Pennsylvania Pharmacy Code cited in Urban’s complaint are “nothing but guidelines containing no penalty whatsoever for violation.” Def.’s Reply Memo. at 2-4 (ECF 10). It also reiterates that several of the Medical Assistance Code provisions cited in Urban’s complaint “plainly do not regulate the conduct of Pharmacists” and that Urban has not alleged sufficient facts to make the remaining provision applicable to him. Id. ...