## Facts

- Patricia A. Lyon worked as an at-will hourly bookkeeper for Whisman Associates, P.A., beginning in January 1988.
- At the end of 1988, the firm promised Lyon a bonus; a dispute arose over the timing and amount paid.
- Lyon alleged Whisman threatened to rescind or withhold the bonus if she left employment.
- After leaving, Lyon sued in federal court for (1) unpaid overtime under the Fair Labor Standards Act (FLSA), (2) breach of Delaware contract law concerning the bonus amount, and (3) a Delaware tort claim based on the alleged threat regarding the bonus.
- The district court exercised federal-question jurisdiction over the FLSA claim and exercised supplemental jurisdiction over the two state-law claims.
- A jury found for Lyon on all three claims.
- Whisman appealed the state tort judgment; the appellate court treated the appeal as permitting review of the related state contract judgment as well.

## Issues

1. Whether the district court had supplemental subject-matter jurisdiction over the Delaware contract and tort claims as part of the same Article III case as the FLSA overtime claim (i.e., whether the claims shared a common nucleus of operative fact).
2. Whether the court of appeals could review the state contract judgment even though the notice of appeal identified only the state tort judgment.

## Decision

- The Third Circuit vacated the judgments on the state-law tort and contract claims for lack of subject-matter jurisdiction.
- The court held the state-law bonus-related claims did not share a common nucleus of operative fact with the FLSA overtime claim.
- The FLSA overtime judgment was left undisturbed.
- The court determined it could reach the state contract judgment in reviewing the case’s jurisdictional basis.

## Legal Principles

- Supplemental jurisdiction over state-law claims requires that the federal and state claims derive from a common nucleus of operative fact such that they would ordinarily be tried together.
- A shared employment relationship and common parties, without overlapping operative facts, is insufficient to support supplemental jurisdiction.
- FLSA claims addressing statutory overtime and minimum labor protections do not automatically supply a federal forum for separate state-law disputes (such as bonus promises and related threats) lacking factual overlap.
- An appeal from a final judgment may permit appellate review necessary to resolve subject-matter jurisdiction, including review of related judgments not expressly targeted in the notice of appeal.

## Conclusion

Because Lyon’s bonus-related contract and tort claims turned on distinct facts from her FLSA overtime claim, the federal court lacked supplemental jurisdiction over the state-law claims, requiring vacatur of those judgments while leaving the FLSA verdict in place.


Lyon v. Whisman, 45 F.3d 758 (3d Cir. 1995)