## Facts

- Brion O. Donahue worked for Federal Express Corporation (FedEx) from 1979 to 1997 and served as a Commercial MX Service Administrator.
- Donahue questioned invoice and repair-order discrepancies and raised concerns about other internal business practices, including alleged favoritism in vendor selection.
- Donahue alleged his supervisor, Robert W. Marshall, retaliated by accusing him of gross misconduct, including making a racial remark and disparaging Marshall to others.
- Donahue alleged FedEx management denied clerical help, added duties, and instructed him to falsify data to meet administrative requirements.
- FedEx terminated Donahue for violating its Acceptable Conduct Policy.
- Donahue challenged the termination through FedEx’s internal Guaranteed Fair Treatment Procedure (GFTP), a three-step review process, but the termination was upheld at each step.
- The GFTP materials contained language disclaiming any intent to create contractual rights.

## Issues

1. Whether Pennsylvania law implies a covenant of good faith and fair dealing that limits termination of a pure at-will employee.
2. Whether internal employer policies and grievance procedures (including GFTP) can create enforceable contractual duties restricting discharge or requiring specific process.
3. Whether termination allegedly in retaliation for internal whistleblowing states a wrongful discharge claim under Pennsylvania’s public-policy exception to at-will employment.
4. Whether allegations of long service and strong performance constitute “additional consideration” sufficient to convert at-will employment into a for-cause relationship.

## Decision

- The Superior Court of Pennsylvania affirmed the trial court’s order sustaining preliminary objections in the nature of a demurrer and entering judgment for FedEx and Marshall.
- The court held Donahue, as an at-will employee, did not state a claim based on an implied covenant of good faith and fair dealing limiting FedEx’s right to terminate.
- The court held FedEx’s policies and GFTP did not form a contract and did not create enforceable obligations, particularly given the express disclaimers.
- The court held Donahue’s allegations did not fit Pennsylvania’s narrow public-policy exception because they did not involve a statutory duty, refusal to commit an illegal act, or discharge barred by statute.
- The court held Donahue did not plead facts showing “additional consideration” beyond ordinary employment services.

## Legal Principles

- In Pennsylvania, a “pure” at-will employee generally may be discharged with or without cause, and the implied covenant of good faith and fair dealing does not independently restrict termination absent an established exception.
- Employer handbooks, policies, and internal grievance procedures do not create contractual rights unless clearly incorporated into an employment contract; express disclaimers weigh strongly against contract formation.
- Pennsylvania recognizes a narrow wrongful-discharge public-policy exception typically limited to situations involving (a) refusal to commit a crime, (b) interference with compliance with a statutorily imposed duty, or (c) discharge prohibited by statute.
- Internal whistleblowing, without a legal obligation to report or a statutory protection against discharge, generally does not state a public-policy wrongful-discharge claim.
- “Additional consideration” sufficient to alter at-will status requires substantial consideration beyond ordinary performance of job duties; generalized claims of loyalty, longevity, or superior work are insufficient.

## Conclusion

The court dismissed the employee’s claims because he remained an at-will employee, the employer’s internal grievance procedure did not create contractual protections, the alleged retaliation for internal reporting did not satisfy Pennsylvania’s narrow public-policy exception, and the pleadings did not show additional consideration converting the relationship into for-cause employment.


Donahue v. Federal Express Corp., 753 A.2d 238 (Pa. Super. Ct. 2000)