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News | Oct 10, 2019

Pennsylvania Wage Lawyer Practice Point: The Important Role of Employee Handbooks in Unpaid Wage Litigation

On September 24, 2019 Federal District Judge Robert Mariani (who sits in Scranton, PA) issued a thoughtful, 22-page opinion in a class action lawsuit handled by our firm.  The lawsuit is styled Knapp v. Susquehanna Village Facility Operations, LLC, 3:18-cv-01941 (M.D. Pa.), and the opinion can be found HERE.

In this lawsuit, the plaintiff worked at a Pennsylvania nursing home.  The nursing home published an employee handbook stating that employees would earn and accrue leave time with few restrictions or limitations.  Consistent with the handbook’s policy, plaintiff accrued over 1,000 hours of leave time over many years of employment.  This accumulated leave time appeared on each paystub, thereby reinforcing the handbook’s policy and leading the plaintiff to reasonably understand that her accumulated leave time would not be taken away.

Unfortunately for plaintiff and her coworkers, the company sold the nursing home to a new owner and, in the process, the employees’ accumulated leave time was erased.  So plaintiff filed a class action lawsuit seeking the monetary value of the erased leave time.  The lawsuit asserts claims for breach of contract, violation of the Pennsylvania Wage Payment and Collection Law (“PWPCL”), promissory estoppel, and unjust enrichment.

The company moved to dismiss plaintiff’s complaint.  The company emphasized that the employee handbook contained a disclaimer stating that it was not a contract and, therefore, could not form the basis for plaintiff’s breach of contract claim.  Judge Mariani denied the motion.  In a well-researched opinion, the Judge explained that, under Pennsylvania law, the existence of an implied contact must be evaluated based on the totality of evidence.  Thus, even though an employee handbook might not constitute a contract standing alone, the handbook may nonetheless serve as evidence of a binding agreement when viewed in combination with other facts demonstrating the parties’ reasonable understanding and course of dealing over a period of years.

Judge Mariani’s opinion gathers together some important court cases (from both federal and state courts) addressing the role of employee handbooks in breach of contract and PWPCL lawsuits.  The opinion is a good resource for employment lawyers and demonstrates the important role that employee handbooks and similar policy documents can play in unpaid wage litigation.

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