SURRICK, District Judge.
Presently before the Court is Defendants' Amended Motion to Dismiss Plaintiff's Amended Complaint. (ECF No. 6.) For the following reasons, Defendants' Amended Motion will be granted in part and denied in part.
Defendant Encore Healthcare, a Maryland corporation, provides healthcare services to nursing homes, assisted-living facilities,
Plaintiff Roy Tanay, a Pennsylvania resident, began working for Defendants on July 10, 2006, as the administrator of Andorra Woods. As the nursing home administrator, Plaintiff was responsible for the overall management of the facility and ensuring the health care and safety of the residents. On October 19, 2009, Plaintiff wrote a letter to Matthew Auman, Encore's Chief Operating Officer, reporting an incident at Andorra Woods. The letter states as follows:
(Am. Compl. Ex. A, ECF No. 4.)
On November 2, 2009, Defendants terminated Plaintiff's employment. Plaintiff, who is Jewish, alleges that Defendants offered no legitimate business reason for his termination. On March 18, 2010, Plaintiff filed an Amended Complaint, which includes claims for Wrongful Discharge (Count One), violation of the Pennsylvania Whistleblower Law, 43 Pa. Stat. § 1421 et seq. (Count Two), and violation of 42 U.S.C. § 1981 (Count Three). On April 23, 2010, Defendants filed an Amended Motion to Dismiss.
Rule 8 of the Federal Rules of Civil Procedure provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Federal Rule of Civil Procedure 12(b)(6) provides that a complaint may be dismissed for "failure to state a claim upon which relief can be granted." "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A complaint that merely alleges entitlement to relief, without alleging facts that show entitlement, must be dismissed. See Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir.2009). This "`does not impose a probability requirement at the pleading stage,' but instead `simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary elements." Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955).
Plaintiff argues that he was wrongfully discharged from his employment, in violation of public policy. Generally, an employer may terminate an at-will employee for any reason, with or without cause. Shick v. Shirey, 552 Pa. 590, 716 A.2d 1231, 1233 (1998). An exception to this rule exists where the termination violates public policy. McLaughlin v. Gastrointestinal Specialists, Inc., 561 Pa. 307, 750 A.2d 283, 287 (2000). To state a cause of action under the public policy exception to the at-will employment doctrine, a plaintiff must point to a "clear public policy articulated in the constitution, in legislation, an administrative regulation, or a judicial decision." Hunger v. Grand Cent. Sanitation, 447 Pa.Super. 575, 670 A.2d 173, 175 (1996). Pennsylvania courts have not explicitly defined the boundaries of the
The Supreme Court of Pennsylvania has emphasized that the public policy exception is not to be liberally construed. McLaughlin, 750 A.2d at 287 ("An employee will be entitled to bring a cause of action for a termination of that relationship only in the most limited of circumstances where the termination implicates a clear mandate of public policy in this Commonwealth."). For example, Pennsylvania "will not recognize a wrongful discharge claim when an at-will employee's discharge is based on a disagreement with management about the legality of a proposed course of action unless the action the employer wants to take actually violates the law." Clark v. Modern Grp. Ltd., 9 F.3d 321, 328 (3d Cir.1993).
Plaintiff's wrongful discharge claim relies on the public policy found in the Nursing Home Administrators License Act, 63 Pa. Stat. § 1101 et seq., as implemented by 49 Pa.Code § 39.1 et seq., and the Health Care Facilities Act, 35 Pa. Stat. § 448.101 et seq., as implemented by 28 Pa.Code § 201.1 et seq. Plaintiff argues that Andorra Woods is a nursing home regulated by these statutes and their regulations. Pursuant to the Health Care Facilities Act, Defendants are required to adopt and enforce rules to ensure the health care and safety of the residents, and the protection of personal and property rights of the residents. 28 Pa.Code § 201.18(b)(1)-(2). Defendants are also required to "appoint a full-time administrator who is currently licensed and registered in this Commonwealth and who is responsible for the overall management of the facility." Id. § 201.18(e). The administrator's responsibilities include: (1) enforcing the regulations relative to the level of health care and safety of the residents and to the protection of their personal and property rights; and (2) maintaining an ongoing relationship with the governing body, medical and nursing staff and other professional and supervisory staff through meetings and periodic reports. Id. In addition, the Nursing Home Administrators License Act requires an administrator to:
49 Pa.Code § 39.91(1).
Plaintiff argues that consistent with his statutory and regulatory obligations, he sent the October 19, 2009 letter to Defendants' Chief Operating Officer reporting the incidents at Andorra Woods. Plaintiff's letter describes among other things the incident in which two boilers at Andorra Woods were intentionally sabotaged and leaking gas. The letter also advises that Andorra Woods recently experienced several instances of theft, vandalism and employee violence. Plaintiff's letter advises that he reported these events to his superiors and requested that Andorra Woods purchase a new security system. The letter expresses Plaintiff's concern for the safety of the nursing home residents and employees. Plaintiff's proposals were rejected. Two weeks after receiving the letter Defendants terminated Plaintiff's employment. Plaintiff argues that he was properly carrying out his statutory duties and was fired as a result, in violation of public policy. Defendants respond that Plaintiff's wrongful discharge claim fails because Plaintiff did not have any affirmative duty to report these incidents. Defendants cite several cases in support of their argument.
In Spierling, cited by Defendants, a registered nurse was terminated after she reported suspected Medicare fraud to federal investigators. 737 A.2d at 1250-51. The Pennsylvania Superior Court rejected the plaintiff's wrongful discharge claim because the Professional Nursing Law
In Brennan v. Cephalon, Inc., 298 Fed. Appx. 147, 148 (3d Cir.2008), also cited by Defendants, the plaintiff, who was assigned to audit the defendant's compliance with FDA requirements, prepared a report to the FDA disclosing the defendant's noncompliance. After discussing the report with his employer at several meetings, the plaintiff was terminated. The Third Circuit found that the statutes which the plaintiff relied upon
In addition, Defendants cite Diberardinis-Mason v. Super Fresh, Inc., in which the plaintiff pharmacist was terminated after she reported "`irregularities' in the dispensing of controlled substances" to the store director and manager. 94 F.Supp.2d 626, 629 (E.D.Pa.2000). The plaintiff cited the Pharmacy Act, 63 Pa. Stat. § 390-1 et seq., which provides general guidelines for pharmacists' conduct, as the basis of her wrongful termination claim. Id. The court held that no public policy emanated from this statute that required the plaintiff to
Finally, Defendants cite cases that support the proposition that submitting internal reports to an employer, rather than to a federal or state agency, is generally not protected under the public policy exception. See Geary v. U.S. Steel Corp., 456 Pa. 171, 319 A.2d 174, 175 (1974); McLaughlin, 750 A.2d at 287-89; Diberardinis-Mason, 94 F.Supp.2d at 630. In Geary, a salesman was fired after he complained to his employer about the safety of a new product. 319 A.2d at 175. The Pennsylvania Supreme Court refused to extend the plaintiff a non-statutory cause of action, in part, because there was "no suggestion that he possessed any expert qualifications, or that his duties extended to making judgments in matters of product safety." Id. at 181.
Relying on Geary, the court in McLaughlin rejected the plaintiff's wrongful discharge claim where the plaintiff, without her employer's knowledge, obtained a sample of a chemical, gluteraldehyde, which her employer stored on the premises, and sent it to a testing laboratory for a toxicity report. 750 A.2d at 284-289. The laboratory concluded that the gluteraldehyde level was higher than OSHA's maximum exposure limit. Id. at 285. The plaintiff complained to her superiors on several occasions and was subsequently terminated. The Pennsylvania Supreme Court rejected her wrongful discharge claim, which was premised on federal OSHA violations. Id. at 287-89. The court noted that the plaintiff "has not shown any policy of this Commonwealth that is violated, and has not established how a private report to an employer would undermine the workings of any Commonwealth agency or any statutory mechanism within the Commonwealth." Id. at 288. Specifically, the court determined that:
Id. at 289 (emphasis in original).
Recognizing Pennsylvania's strong adherence to the employment-at-will doctrine, the instant case can nevertheless be distinguished from the cases cited by Defendants. Andorra Woods is statutorily required to hire a licensed, registered administrator who is responsible for the overall management of the facility. 28 Pa.Code § 201.18(e). Plaintiff, as the administrator, was required to develop policies that provide a high level of resident care in a safe environment, Plaintiff was required to evaluate the quality of resident care, identify strengths and weaknesses, and institute appropriate follow-up activities. 49 Pa.Code § 39.91(1). Plaintiff was also required to maintain open lines of communication with the governing body to assure that resources are properly allocated and that resident care is maintained at a high level. Id.
Plaintiff transmitted his October 19, 2009 letter to management pursuant to the statutory obligations which placed on him the responsibility of ensuring the safety of Andorra Woods' residents and employees. Plaintiff expressed his concerns for a series of incidents that presented a significant danger to Andorra Woods, its residents and its employees. He evaluated the
Unlike the instant case where Plaintiff was responsible for the overall management and safety of Andorra Woods, the cases cited by Defendants involved plaintiffs who had no similar statutory obligations. In Spierling and Diberardinis-Mason, the plaintiffs cited statutes that simply provided guidelines for their respective professions' conduct. In Geary, the plaintiff salesman had no duty, statutory or otherwise, to make judgements in matters of product safety. In McLaughlin, the plaintiff office manager took it upon herself to test chemical levels and then complain to her superiors. The Pennsylvania Supreme Court found that an internal complaint to an employer citing violations of federal regulations, rather than Commonwealth policy, could not support the plaintiff's wrongful discharge claim.
Here, Plaintiff had an affirmative statutory duty to ensure the safety of the residents and employees of the nursing home. His lawsuit is predicated on a regulatory scheme created by the Commonwealth of Pennsylvania that sets forth state, not federal policy. Moreover, Plaintiff had a duty to communicate with management and resolve issues concerning resident care. Plaintiff complied with his duties by transmitting the October 19 letter and he alleges that he was fired as a result. While an internal complaint to an employer generally will not suffice for a wrongful discharge claim, we are satisfied that under the circumstances present here, where an individual has a statutory duty to ensure the safety of others, it would contravene the public policy of this Commonwealth to deny Plaintiff the right to pursue his claim for wrongful discharge.
We therefore find that Plaintiff has sufficiently alleged that Defendants wrongfully terminated his employment under the public policy exception. Accordingly, we will deny Defendants' Motion to dismiss Plaintiff's wrongful termination claim.
Plaintiff argues that his termination violated the Pennsylvania Whistleblower Law, 43 Pa. Stat. § 1421 et seq. Defendants argue that (1) Plaintiff may not invoke the Whistleblower Law because Defendants are not public bodies, and (2) Plaintiff fails to allege that he made a good-faith report of waste or wrongdoing.
The Whistleblower Law makes it unlawful for an employer to:
Id. § 1423(a). An "employer" is defined as a "person supervising one or more employees, including the employee in question; a superior of that supervisor; or an agent of a public body." Id. § 1422. An "employee" is defined as a "person who performs a service for wages or other remuneration under a contract of hire, written or oral, express or implied, for a public body." Id. A "public body" includes a "body which is created by Commonwealth or political subdivision authority or which is funded in any amount by or through Commonwealth or political subdivision authority or a member or employee of that body." Id.
Plaintiff and Defendants point us to conflicting authorities. Plaintiff cites Cohen v. Salick Health Care, Inc., 772 F.Supp. 1521 (E.D.Pa.1991). Defendants cite Denton v. Silver Stream Nursing & Rehabilitation Center, 739 A.2d 571 (Pa.Super.Ct.1999), and Langoussis v. Easton Hospital, No. 00-1456, ___ Pa.Cmwlth. ___, ___ A.2d ___, 2002 WL 32140636 (Pa.Com.Pl.2002). In Cohen, the late Judge Raymond Broderick of this court, sitting in diversity, predicted that the Pennsylvania Supreme Court would find that the receipt of Medicaid reimbursements is not sufficient to make an entity a "public body" under the Whistleblower Law. 772 F.Supp. at 1526. The Whistleblower Law defines public bodies as those which are "funded in any amount by or through Commonwealth or political subdivision authority or a member or employee of that body." 43 Pa. Stat., § 1422. The Cohen court began its analysis with the understanding that the legislature, through this provision, intended to make the law applicable to bodies that receive even one dollar of state funding. 772 F.Supp. at 1526. The court observed, however, that the statutory language and the legislative history of the Act failed to define the word "funded." Id. The court went on to discuss the nature of Medicaid. Title XIX of the Social Security Act established the Medicaid program in which the federal government reimburses states for a percentage of the cost of providing medical care to certain persons. 42 U.S.C. § 1396 et seq. (1988); Pennsylvania v. U.S. Dep't of Health & Human Servs., 928 F.2d 1378, 1381 (3d Cir.1991). Specifically, Medicaid authorizes:
42 C.F.R. § 430.0.
The Cohen court found that the "legislature did not intend that the mere receipt of monies from a state source for services rendered should bring the recipient within the Whistleblower Law." 772 F.Supp. at 1527. It found that such an interpretation would "extend the reach of the Whistleblower Law to every hospital, nursing home, institution for the mentally retarded, institution for the mentally ill, home health care provider, physician, chiropractor, podiatrist, ambulance company, dentist, and optometrist that treats patients whose medical expenses are reimbursed by Medicaid." Id. at 1526. The intended beneficiaries of Medicaid are patients, not healthcare providers. Id. (citing Geriatrics, Inc. v. Harris, 640 F.2d 262, 265 (10th Cir.1981)). Interpreting the provision's text as part of the broader statutory scheme, the court determined that:
Id. Based on the court's interpretation of the word "funded," the plaintiff in Cohen did not state a cause of action against the defendant employer under the Whistleblower Law.
Eight years later, in a matter of first impression, the Superior Court of Pennsylvania expressly rejected the Cohen analysis. Denton, 739 A.2d at 575-76. The Denton Court relied, in part, on the decision of an en banc panel of the Superior Court that had addressed the question of whether a private medical provider may be a "public body" within the Whistleblower Law, based on the receipt of public money. Id. at 576 (citing Riggio v. Burns, 711 A.2d 497, 499-500 (Pa.Super.Ct.1999) (en banc)). In Riggio, the court noted that the state legislature annually appropriated money for defendant Medical College of Pennsylvania (MCP).
Denton directly addressed the Medicaid issue. Denton found that the "plain meaning of the language of the statute makes it clear that it was intended to apply to all agencies that receive public monies under the administration of the Commonwealth." 739 A.2d at 576. The court extended the holding in Riggio, and rejected the statutory interpretation in Cohen:
Id. Denton held that a recipient of Medicaid funding is a "public body" under the Whistleblower Law.
While we accord significant weight to the Superior Court's analysis, we agree with Cohen that the receipt of Medicaid reimbursements is insufficient to make an otherwise private entity, a public body subject to Whistleblower Law liability. The words "funded in any amount by or through" are naturally read to denote money that is specifically appropriated by a governmental unit. Such appropriations may come in the form of periodic or onetime payments, but they are not controlled
This reading is supported by the statutory scheme. Healthcare providers are not the intended beneficiaries of the Medicaid program. Geriatrics, 640 F.2d at 265. Medicaid does confer financial benefits upon healthcare providers insofar as it expands the number of patients paying for medical services. However, a governmental assistance program, which directly benefits eligible participants and indirectly benefits private bodies, does not qualify as funding by the Commonwealth. A contrary ruling could justify the conclusion that other assistance programs, such as food stamps, similarly transform private entities into public bodies. The legislature could not have intended to create a cause of action under the Whistleblower Law for a former employee of a local grocery store that accepted food stamps. If we accept Plaintiff's argument as to the definition of "funded," the scope of the Whistleblower Law could be expanded to include any private business that accepted payment from a recipient of government assistance. We are satisfied that this is not what the Legislature intended.
We are not persuaded by the analysis in Denton. The court there relied on Riggio, a case which was factually distinguishable. See Denton, 739 A.2d at 576 ("Our own subsequent and binding state case law directs us to a different conclusion."). The defendant in Riggio conceded that it received annual appropriations from the legislature. 711 A.2d at 499. Nevertheless, the defendant medical college argued that it was not funded by the Commonwealth because that would lead to an absurd result. Id. at 500. The court rejected this argument based upon the plain language of the statute. Id. In Denton, as here, the plaintiff did not contend that the defendant received any appropriated money from the state. The question is whether the receipt of Medicaid payments alone exposes an otherwise private employer to whistleblower liability. Riggio is of little assistance in determining the meaning of the word "funded" in this context.
Finally, we reject the conclusion of the Denton court that by definition all "pass through" funds from the state have the effect of creating a "public body." See 739 A.2d at 576 ("The statutory language differentiates between appropriated and `pass-through' funds and extends the law to cover both types: `[a]ny other body which is ... funded in any amount by or through Commonwealth ....'"). As Judge Broderick observed:
Cohen, 772 F.Supp. at 1527.
We predict that the Pennsylvania Supreme Court will not interpret the Whistleblower Law to bring Defendants within the definition of "public bod[ies]." Accordingly, we will grant Defendants' Motion to dismiss Plaintiff's Whistleblower Law claim.
Section 1981 prohibits racial discrimination in the making and enforcing of contracts. 42 U.S.C. § 1981(a).
Plaintiff has the burden of presenting a prima facie case of discrimination. Plaintiff must demonstrate: (1) that he belongs to a protected group; (2) that he was qualified for the job; (3) that, despite his qualifications, he was terminated; and (4) that the circumstances of his termination would lead to an inference of unlawful discrimination. See McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. 1817; Stewart v. Rutgers Univ., 120 F.3d 426, 432 (3d Cir. 1997).
Defendants do not dispute that Plaintiff states three of the four elements of a prima facie case.
Plaintiff's Complaint does not specifically allege that Plaintiff was qualified for his position. However, the McDonnell Douglas framework was "never intended to be rigid, mechanized, or ritualistic." Furnco Const. Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978). Plaintiff, a licensed and registered nursing home administrator, worked as the administrator of Andorra Woods without incident for more than three years. He was terminated within weeks of sending the October 19, 2010 letter. There is noting in the record to indicate that his job performance was unsatisfactory. We are satisfied that at this juncture it is reasonable to infer that Plaintiff was qualified for his position, based upon his credentials and his threeyear tenure.
Accordingly, Plaintiff articulates a prima facie case of discrimination. We therefore deny Defendants' Motion to dismiss Plaintiff's § 1981 claim.
For all of these reasons, Defendants' Amended Motion will be granted in part and denied in part.
An appropriate Order follows.
