September 09, 2025|Articles/Op-eds
September 9, 2025 | U.S. District Court for the Eastern District of Pennsylvania | Unpublished Opinion
Executive Summary
In an unpublished memorandum, Judge Gerald J. Pappert of the Eastern District of Pennsylvania addressed claims brought by Anastasiya Tysh, a 51-year-old Ukrainian IT Project Manager, against Razor Technology, LLC and Elemica, Inc. Tysh alleged discrimination under the ADEA, 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, the Pennsylvania Human Relations Act (PHRA), and the Pennsylvania Whistleblower Law. Elemica moved to dismiss all claims, arguing she lacked standing. The court granted the motion in part, allowing her ADEA claim to proceed under a joint employer theory while dismissing without prejudice her § 1981, Title VII, PHRA, and Whistleblower Law claims.
Relevant Background
Tysh worked for Elemica from 2004 until 2019, when her role was restructured to make her a “1099 employee” of Razor Technology. Despite the change in payroll, she alleged Elemica continued to control her job duties, reporting structure, and performance management, while Razor’s role was limited to billing and processing her timesheets. Between 2022 and 2023, she claimed to have raised concerns about deficiencies in Elemica’s products and asserted that her supervisor began favoring a younger, less experienced employee, Elena Jimenez. In April 2023, she was told that all Razor contractors with Elemica would be terminated, but she later learned she was the only one let go. Shortly thereafter, she lost access to Elemica’s systems and never received formal notice from Razor or Elemica regarding her termination.
Decision
Judge Pappert first examined the ADEA and PHRA claims. The court held that Tysh had plausibly alleged age discrimination under the ADEA, noting her allegations that she was over forty, qualified for her role, terminated, and replaced by someone younger (Compl. ¶¶ 46, 49). The court emphasized that although her employment was structured through Razor as a 1099 contractor, the complaint alleged sufficient facts to support a joint employer theory. Elemica was said to have controlled her daily work, indirectly paid her, and communicated her termination through its own manager, suggesting significant control over her employment. Citing Covington v. Int’l Ass’n of Approved Basketball Offs., 710 F.3d 114, 119 (3d Cir. 2013), the court reasoned that whether she was an employee or independent contractor was a fact-intensive issue that could not be resolved on a motion to dismiss. By contrast, the PHRA claim failed because the statute protects only Pennsylvania residents or individuals working in the Commonwealth. The complaint alleged only that Tysh had “resided” in Pennsylvania in the past, while conceding that she had relocated overseas and worked remotely. The court therefore found she did not fall within the statute’s reach, relying on Blackman v. Lincoln Nat’l Corp., No. 10-6946, 2012 WL 6151732, at *5–6 (E.D. Pa. Dec. 10, 2012).
The court next considered the race and sex discrimination claims under § 1981, Title VII, and the PHRA. These were dismissed because the complaint lacked factual allegations connecting her termination to race or sex. The court rejected conclusory assertions that she was replaced by someone of a different race or treated differently because of her sex, explaining that such allegations, without supporting facts, do not state a plausible claim under Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Turning to the Pennsylvania Whistleblower Law, the court held that the claim failed because Elemica is a private company and not a “public body” within the meaning of the statute. Citing Lomaskin v. Siemens Med. Sols. USA, Inc., 820 F. App’x 138, 141 (3d Cir. 2020), the court explained that merely receiving state funds through contracts does not transform a private company into a public body.
Finally, the court granted leave to amend the dismissed claims, noting the liberal standard under Federal Rule of Civil Procedure 15(a)(2). It invited Tysh to re-plead her claims if she could allege sufficient facts to support them.
Looking Forward
The court’s ruling underscores three important lessons for franchisors, employers, and businesses that use contractor models:
- Joint Employer Risks at the Pleading Stage. The court’s decision illustrates that allegations of control over hiring, firing, and daily work may be sufficient to establish joint employer liability at the motion-to-dismiss stage. Even if a worker is paid through an intermediary, an entity exercising day-to-day control may still face liability.
- Geographic Scope of State Employment Laws. The dismissal of the PHRA claim reaffirms that state anti-discrimination statutes typically apply only to residents or those working within the state. Remote or relocated workers may fall outside their protections.
- Specificity in Discrimination Allegations. The dismissal of Tysh’s race and sex claims highlights that conclusory assertions are insufficient. Courts expect plaintiffs to plead specific facts showing discriminatory treatment or intent.
Taken together, these lessons reinforce the importance of carefully managing contractor relationships, understanding the limits of state statutes, and documenting employment decisions in ways that can withstand scrutiny in discrimination litigation.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
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