OSHA • Retaliatory Discharge • Choice of Law

Holloway v. Fres-Co Sys. USA, Inc., PICS Case No. 14-0392 (E.D. Pa. Feb. 28, 2014) Ditter, J. (9 pages).

Holloway sued her employer and two company employees alleging retaliatory discharge in violation of Iowa public policy based on her reporting an unsafe work environment and filing OSHA and EPA complaints and wrongful termination based on her reporting a workplace injury and filing a workers compensation report. Defendants moved to dismiss the retaliatory discharge claim arguing that choice of law rules require the application of Pennsylvania law rather than Iowa law. Denied.

Holloway, a Nebraska citizen was employed by Fres-Co as a human resources manager in its Iowa location. Fres-Co has its principal place of business in Pennsylvania and the company employees also sued are residents of Pennsylvania. Holloway fell ill within days of starting her employment on Oct. 10, 2011, suffering from respiratory issues, headaches and lethargy. On Oct. 24, 2011 she felt ill and left work after two hours and subsequently saw two chiropractors who suggested chemical exposure as the source of her illness. She did not physically return to work after Oct. 24, but continued to work from home until she was terminated. Holloway alleged that she noticed a strong chemical odor present in the plant and she alleged that on Oct. 20, 2011, she informed the plant manager of an OSHA violation in the plant. The day after her chiropractor suggested chemical exposure as the source of her illness, she contacted the co-director of human resources to express her concern about her illness and chemical exposure and asked Fres-Co to install an air purification system in her office. She alleged the co-director told her the company was conducting air quality and mold tests. On Oct. 27, she contacted OSHA and on Oct. 30, the EPA to report her concerns about air quality at the plant. Around Oct. 31, she told the co-director of Human Resources that she had filed a notice of claim with the workers compensation carrier. OSHA completed an inspection and audit of the plant on Nov. 1, 2011. Holloway was terminated on Nov. 2, 2011.

Holloway signed a confidentiality and noncompetition agreement when she started work that provided that she was “employed at will,” that the laws of Pennsylvania governed the interpretation of the agreement, and a forum selection clause required all legal action between the parties to be brought in Pennsylvania. Holloway originally filed her complaint in Iowa state court which dismissed the complaint and she subsequently filed her suit in Pennsylvania.

The defendants argued that Holloway’s claim of retaliatory discharge for reporting an unsafe work environment in violation of Iowa public policy had to be analyzed under Pennsylvania law, as chosen by the parties in the agreement, and that Pennsylvania law does not provide the protection afforded by OSHA regulations. A plain reading of the agreement showed that the parties agreed that Pennsylvania law applied to any issues concerning the agreement, but was not intended to encompass all possible disputes between the parties. Thus, Holloway’s suit was not controlled by the agreement and the choice of law provision in the agreement did not govern this dispute.

Pennsylvania law did not apply here because the agreement between the parties did not cover employment discrimination and thus, the agreement’s choice of law provision was not applicable. A choice of law analysis compelled the application of Iowa law.