Salsberg v. Mann

310 A.3d 104

Cara SALSBERG, Appellant

v.Donna MANN and Drexel University, Appellees

No. 7 EAP 2022

Supreme Court of Pennsylvania.

Argued: March 7, 2023

Decided: February 21, 2024

Appeal from the Judgment of Superior Court entered on September 15, 2021, at No. 62S EDA 2019 affirming the Order entered on January 17, 2019, in the Court of Common Pleas, Philadelphia County, Civil Division at No. 170603584, Frederica A. Massiah-Jackson, Judge

Timothy M. Kolman, Esq., Kolman Law P.C, for Appellant.

Charlene Andree Barker, Esq., Joseph Juco Centeno, Esq., Buchanan, Ingersoll & Rooney, P.C., for Appellees.

TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, JJ.

OPINION

JUSTICE BROBSON

[1–3] This discretionary matter concerns a claim brought by Cara Salsberg (Salsberg), a former at-will employee of Drexel University (University), against her former supervisor, Donna Mann (Mann), asserting that Mann intentionally interfered with Salsberg’s contractual relationship with Drexel by taking actions that led to and included Salsberg’s firing. While recognizing that Pennsylvania law permits claims of intentional interference with the performance of contracts by third parties, the Court of Common Pleas of Philadelphia County (trial court) and our Pennsylvania Superior Court concluded that Mann was nonetheless entitled to summary judgment because governing law further dictates that, in the context of an existing at-will employment relationship, an employee has no contractual or legally enforceable right to continued employment with which a third party can interfere. Upon review, we hold that the lower courts erred in reaching that conclusion. We further hold, however, that an at-will employee cannot recover on a claim for intentional interference with an existing at-will employment relationship against her supervisor under the circumstances of this case, where Mann was acting within the scope of her employment with Drexel and, thus, was not a third party to the relationship as required to establish the tort in Pennsylvania. Accordingly, we affirm the Superior Court’s judgment, albeit on alternative grounds.¹

I. BACKGROUND

A. RELEVANT LAW

To provide better context for the current dispute, we set forth a brief summary of the relevant law. This Court has recognized claims for intentional interference with contractual relations as far back as the 1800s. See Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 482 Pa. 416, 393 A.2d 1175, 1182 n.12 (1978) (explaining that this Court "had long recognized a right of action for interference with existing contractual relations" and citing, inter alia, Vanarsdale v. Laverty, 69 Pa. 103 (1871), in support), appeal dismissed, 442 U.S. 907, 99 S.Ct. 2817, 61 L.Ed.2d 272 (1979). Our Court has done so in an array of factual scenarios, including those which involve: (1) the employment context as well as other unrelated contexts; (2) interference with existing contractual relations and interference with prospective contractual relations; and (3) various third-party entities as defendants.² Moreover, throughout the development of the law in this area, the Court has adopted or otherwise relied upon various iterations of the provisions and attendant commentary in the Restatement (Second) of Torts (Restatement) as to such claims, including Section 766 of the Restatement.³ More to this point, our Court cited to Section 766 of the Restatement (First) of Torts with approval in two cases⁴ before adopting that provision "and its definition of the right of action for intentional interference with existing contractual relations" in Birl v. Philadelphia Electric Company. Adler, 393 A.2d at 1181-82 & n.12. We explained in Birl:

At least since Lumley v. Gye, (1853) 2 Ell. & Bl. 216, 1 Eng.Rul.Cas. 706, the common law has recognized an action in tort for an intentional, unprivileged interference with contractual relations. It is generally recognized that one has the right to pursue his business relations or employment free from interference on the part of other persons except where such interference is justified or constitutes an exercise of an absolute right: Restatement, Torts, Section 766 ….

….

The elements of this tort of inducing breach of contract or refusal to deal, which must be averred in the complaint, are set forth in the Restatement, Torts, Section 766, which says, … [‘]one who, without a privilege to do so, induces or otherwise purposely causes a third person not to (a) perform a contract with another, or (b) enter into or continue a business relation with another is liable to the other for the harm caused thereby’. In other words, the actor must act (1) for the purpose of causing this specific type of harm to the plaintiff, (2) such act must be unprivileged, and (3) the harm must actually result. Furthermore, where the defendant is alleged to have induced another to discharge his employee by false statements, the substance of such statements should be set out in the complaint. Moran v. Dunphy, [177 Mass. 485, 59 N.E. 125 (1901)].

Birl, 167 A.2d at 474.

Almost two decades later, in recognition of the American Law Institutes’ "continuing effort to provide the judicial system orderly and accurate restatements of the common law," and given that the "Court constantly seeks to harmonize common law rules, principles, and doctrines with modern perceptions of societal needs and responsibilities," the Court in Adler chose to examine the case before it in light of the most current version of Section 766 available at the time. Adler, 393 A.2d at 1183. This version, then contained in Tentative Draft Number 23 of Section 766 of the Restatement, is virtually the same as the version currently set forth in the Restatement, which provides:

Intentional Interference with Performance of Contract by Third Person

One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.

Section 766 of the Restatement.⁵

Notwithstanding the above, there is a dearth of case law from this Court explicit- ly addressing the precise scenario here— i.e., where an at-will employee claims that a supervisor intentionally interfered with the at-will employment relationship between the employee and employer—or the question of whether our common law recognizes such claims pursuant to Section 766 of the Restatement or otherwise. It appears that the only case from this Court that touches upon this discrete question is Menefee v. Columbia Broadcasting System, Inc., 458 Pa. 46, 329 A.2d 216 (1974), where this Court summarily concluded that certain higher-level employees who had exercised an employer’s contract right to terminate an employee on thirteen weeks’ notice could not be found liable for conspiracy to interfere with an employee’s contractual relationship with the employer because they had a "privilege" to advise the employer on, handling its employees and cause the termination of the employee. Menefee, 329 A.2d at 217, 221.

In contrast, the Superior Court has addressed this scenario on multiple occasions. Most relevant here, in Curran v. Children’s Service Center, 396 Pa.Super. 29, 578 A.2d 8 (1990), appeal denied, 585 A.2d 468 (Pa. 1991), the Superior Court considered whether a psychologist who worked for an organization as an at-will employee could assert against the clinical director who terminated him a claim for intentionally interfering with his contractual relationship with the organization, Curran, 578 A.2d at 9. In answering the question, the Superior Court observed that "[a] cause of action for intentional interference with a contractual relationship may be sustained even though the employment relationship is at-will." Id. at 13. Notably, in support, the Curran Court cited to Yaindl v. Ingersoll-Rand Co. Standard Pump-Aldrich Division, 281 Pa.Super. 560, 422 A.2d 611 (1980) (abrogation on other grounds as recognized in Yetter v. Ward Trucking Corp., 401 Pa.Super. 467,585 A.2d 1022 (1991)), which in turn relied on Comment g of Section 766 of the Restatement⁶ for the proposition that "an action for intentional interference with the performance of a contract lies even though the contract interfered with is terminable at the will of the parties." Yaindl, 422 A.2d at 618 n.6.⁷ The Superior Court in Curran nonetheless concluded that the psychologist was unable to state a cognizable claim for intentional interference "on account of the termination of his employment." Curran, 578 A.2d at 13. The Superior Court explained that, because "a corporation can act only through its agents" and the psychologist identified the clinical director who terminated his employment as an agent of organization-employer in the complaint, there was "no third party against whom an action for intentional interference with a contractual relationship [could] lie." Id. As a result, the Superior Court affirmed the trial court’s order granting summary judgment in favor of the clinical director and organization.

Following Curran, the Superior Court decided Hennessy v. Santiago, 708 A.2d 1269 (Pa. Super. 1998), and Haun v. Community Health Systems, Inc., 14 A.3d 120 (Pa. Super. 2011), both of which restricted the application of Section 766 of the Restatement to prospective at-will contracts, seemingly in the face of the Superior Court’s prior decision in Curran. In Hennessy, a doctor employed at-will a habilita-five counselor to counsel clients at (he doctor’s individual practice and at a corporation that the doctor controlled in part and which provided community living arrangements for county residents pursuant to county contracts. Hennessy, 708 A.2d at 1272. The doctor fired the counselor after the counselor, upon receiving a report of a rape that occurred at the...