## Facts

- HearBest, Inc. sought a temporary medical office administrator for its Mt. Lebanon, Pennsylvania office and contracted with Adecco USA/Adecco Employment Services, Inc. for staffing services.
- The written contract required Adecco to conduct a National Criminal Record File check for any assigned temporary worker (“Associate”) meeting HearBest’s requirements.
- The contract included (1) a general limitation-of-liability clause limiting liability to direct damages and (2) an “associate guarantee” stating Adecco would attempt replacement and credit up to the first eight hours if HearBest complained within eight hours; the guarantee was stated as HearBest’s “sole remedy” for dissatisfaction with an associate’s qualifications, performance, or conduct.
- Adecco assigned Evalyn McKinney to HearBest beginning October 3, 2011; HearBest hired her as a permanent employee on November 1, 2011 and paid Adecco a $6,750 separation fee.
- Adecco did not conduct the promised criminal-records check before assigning McKinney, and McKinney had a criminal record.
- After McKinney became a permanent HearBest employee, she embezzled approximately $16,000 from HearBest and certain customers between March and June 2012; HearBest terminated her after discovering the theft.
- HearBest sought damages including the embezzled funds, fees paid to Adecco, accounting/investigation costs, and alleged business and Medicare re-credentialing related losses.

## Issues

1. Whether the contract’s “associate guarantee” and other liability-limitation language barred HearBest’s contract damages for Adecco’s failure to perform the promised background check.
2. Whether HearBest’s fraud claim was actionable or barred by Pennsylvania’s economic loss doctrine because it duplicated the alleged contractual breach and sought purely economic damages.
3. Whether, and to what extent, HearBest could prove damages proximately caused by the failure to conduct the background check, including limits on consequential or speculative losses.

## Decision

- The court granted Adecco summary judgment on HearBest’s fraud claim.
- The court denied Adecco summary judgment on HearBest’s contract-based claims.
- The court sua sponte granted summary judgment to HearBest on liability for breach of contract because Adecco undisputedly failed to perform the promised criminal-records check.
- The court reserved for later proceedings the scope and amount of damages proximately resulting from the breach.

## Legal Principles

- A “sole remedy” clause tied to dissatisfaction with an employee’s qualifications, performance, or conduct does not necessarily bar recovery for breach of a separate, express contractual obligation (such as a promised background check).
- Contract provisions are construed in context; a party cannot avoid liability for failure to perform a specific undertaking by recharacterizing the claim as mere dissatisfaction with performance.
- Under Pennsylvania’s economic loss doctrine, a plaintiff generally may not recover in tort for purely economic losses that flow from a defendant’s failure to perform contractual duties; fraud must be based on a misrepresentation collateral to the contract, not merely a restated contractual promise.
- Even where breach is established, a plaintiff must prove damages proximately caused by the breach; limitation-of-liability language may affect recoverability of certain categories of loss (e.g., consequential or speculative damages).

## Conclusion

The court held Adecco breached its contract by failing to conduct the agreed criminal-records check and rejected Adecco’s attempt to limit exposure through an eight-hour “sole remedy” guarantee aimed at dissatisfaction with on-the-job performance, while dismissing HearBest’s fraud claim as barred by the economic loss doctrine and leaving causation and damages for later adjudication.


HearBest, Inc. v. Adecco USA, 2014 WL 7183478 (W.D. Pa. 2014)