Fired worker's wrongful termination claims dismissed, defamation claim going back to state court

By Nicholas Malfitano | Jun 27, 2015

Thomas McGlaughlin  

PHILADELPHIA – A federal judge has dismissed wrongful termination claims against a recycling plant, while the plaintiff’s motion to remand the case’s remaining defamation claim to the Philadelphia County Court of Common Pleas will also be granted.

Judge Michael M. Baylson of the U.S. District Court for the Eastern District of Pennsylvania recently partially ruled in favor of EMR/SPC that the wrongful termination claims brought forward by Philadelphia resident Ronald Schultz will be dismissed with prejudice through pre-emption by the National Labor Relations Act (NLRA).

However, Baylson also decided Schultz’s second petition to remand the case to its point of origin, the Philadelphia County Court of Common Pleas, would be granted in part – since the federal court lacks subject matter jurisdiction to address Schultz’s state law defamation claim.

Schultz, a former mill operator at a South Philadelphia recycling plant, says the actions by his manager and former employer, EMR/SPC, constituted a breach of contract against his union, Local 676, and the reasons given for his termination in March 2014 defamed his reputation.

According to the suit, Schultz had a good working relationship with management at the South Philadelphia plant for the first two years of his employment, with excellent performance reviews.

In 2010, a new human resources director, Stephen D’Ottavi, joined the company and allegedly immediately began to target Schultz because of his vocal support of his union. The claim says that D’Ottavi singled Schultz out for numerous disciplinary write-ups for minor infractions, allegedly to create a paper record that would justify Schultz’s firing.

Schultz received notification in November 2013 that he had been terminated and requested a grievance hearing, under the advice of his union representation and per his collective bargaining agreement (CBA).

The complaint alleges that D’Ottavi approached Schultz and asked what it would take to not take the matter to a grievance procedure. Schultz says in the claim that he interpreted the question as an overture to a bribe. The plaintiff replied that nothing could be done and continued to file the grievance.

While waiting for the hearing to be scheduled, Schultz continued to work for EMR/SPC at the metal recycling facility in Camden, N.J. On March 5, 2014, the mill shut down at 6 p.m. from a backup of materials in the feeder. The claim says such incidents are common at a metal recycling plant when misshapen objects clog up the machinery.

Schultz, who was operating the crane that fed material to the recycling belt, spent the rest of his shift helping clear the blockage. When he returned the next day, he continued to help with clean-up when a co-worker accused Schultz of deliberately shutting down the mill. The plaintiff says he sarcastically replied, “Oh, yeah, I shut down the mill.”

The complaint says those comments were twisted into an admission of guilt by D’Ottavi, who terminated Schultz’s employment immediately. At an unemployment compensation hearing in June 2014, D’Ottavi admitted that he did not consult with the union business agent, as required by Local 676?s contract with EMR/SPC.

Schultz subsequently filed suit in the Philadelphia County Court of Common Pleas last September, and the case was transferred to the U.S. District Court for the Eastern District of Pennsylvania in October.

Baylson first said on the matter of the wrongful termination claims, “Plaintiff’s claims of wrongful termination are both predicated on the contention that plaintiff was unfairly targeted for the exercise of his union rights. Plaintiff contends defendants wrongfully terminated him for, among other reasons, attempting to enter a grievance procedure in November 2013 and for his complaints about overtime pay, defective working equipment, and unsafe working conditions.”

Baylson added Schultz’s “exercise of his union rights and his attempt to file a grievance under the CBA are protected activity under section 7 of the NLRA," while also ruling Schultz’s “exercise of his union rights, including the filing of complaints regarding overtime pay, defective equipment, and workplace safety, would be an ‘unfair labor practice’ under section 8 of the NLRA.”

“Accordingly, because plaintiff’s claims are arguably subject to sections 7 and 8 of the NLRA, they are pre-empted,” Baylson said. “Because the Court concludes plaintiff’s wrongful termination claims are pre-empted by the NLRA, amendment would be futile, so the Court will dismiss those claims with prejudice.”

On the subject of Schultz’s defamation claim, Baylson ruled the U.S. District Court for the Eastern District of Pennsylvania lacked the proper subject matter jurisdiction to rule on Schultz’s defamation claim.

“In this case, the Court determined that it had subject matter jurisdiction over plaintiff’s wrongful termination claims based on federal labor law. However, now that the Court has dismissed those claims as preempted by federal labor law, the only jurisdictional bases remaining for the Court to hear Plaintiff’s New Jersey state law defamation claim are diversity of citizenship and supplemental jurisdiction,” Baylson said.

“Complete diversity of citizenship is not met, however, because plaintiff and defendant SPC Corp. are both Pennsylvania citizens. The Court also declines to exercise supplemental jurisdiction over Plaintiff’s state law defamation claim because the Court has dismissed the wrongful termination claims over which it has original jurisdiction. Accordingly, because the Court lacks subject matter jurisdiction over plaintiff’s defamation claim, the Court will grant, in part, plaintiff’s second motion to remand and will remand plaintiff’s defamation claim to the Philadelphia County Court of Common Pleas,” Baylson concluded.

Schultz seeks declaratory and injunctive relief against D’Ottavi and EMR/SPC, including the reinstatement of his position at the plant. He also seeks compensatory damages for lost wages and benefits, plus punitive damages.

The plaintiff is represented by Thomas McGlaughlin of the McGlaughlin Law Group, in Philadelphia.

The defendants are represented by Amy L. Bashore and Denise M. Keyser of Ballard Spahr, in Cherry Hill, N.J.

U.S. District Court for the Eastern District of Pennsylvania case 2:14-cv-05683

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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