Wе consider whether Restatement (Second) of Torts § 772(a) applies in Pennsylvania to preclude an action for tortious interference with contractual relations where it is undisputed that the defendant’s interfering statements were truthful.
1
We
Appellant, Walnut Street Associates (“WSA”), provides insurance brokerage services and assists employers in obtaining health insurance for their employees. Since the 1980s, WSA was the broker of record for health insurance provided to employees of Procacci Brothers Sales Corporation (“Procacci”). Appellee, Brokerage Concepts, Inc. (“BCI”), is a third party administrator of employee benefit plans. In 1994, at the recommendation of WSA, Procacci retained BCI as administrator of its insurance plans, and BCI paid commissions to WSA based on premiums paid by Procacci.
In 2005, Procacci requested that BCI lower costs, but BCI would not meet Procacci’s proposal. Procacci then notified BCI that it would be moving its business to another third-party administrator. Shortly thereafter, BCI’s employee Kimberly Macrone wrote a letter to Procacci asking it to reconsider its decision, and in the process advising Procacci of the amount of compensation WSA had been receiving as broker of record. The amount was apparently higher than Procacci believed WSA had been earning, but there is no dispute that Macrone’s statements about WSA’s compensation were true. As a result of Macrone’s letter, Procacci terminated its longstanding contractual relationship with WSA.
WSA then filed this action against BCI and Macrone.
2
The complaint included four counts, three of which sought recovery of unpaid commissions, and were dismissed on summary judgment after BCI paid the disputed amounts. In the fourth count, WSA alleged that BCI had tortiously interfered with the WSA/Procacci contractual relationship by disclosing the amount of WSA’s compensation. In its answer and new matter, BCI alleged,
inter alia,
that it could not be held liable for tortious interference because the information it provided to Procacci was truthful, or otherwise justified and privileged, and not confidential. The parties went to trial on the tortious interference claim. At the charging conference, BCI requested a jury instruction on truthfulness as a defense pursuant to Section 772(a), but the court denied it. Instead, the court’s
instruction on tortious interference tracked two other Restatement provisions, Restatement (Second) of Torts §§ 766 and 767.
3
The jury,
The Superior Court reversed, holding that Macrone’s truthful statements to Procacci regarding WSA’s compensation could not support a claim for tortious interference with contractual relations.
Walnut St. Assocs., Inc. v. Brokerage Concepts, Inc.,
We granted allocatur in part, rephrasing the issue as follows:
Did the Superior Court err in adopting and applying Restatement (Second) of Torts § 772(a), and holding that truthful statements could not form the basis of a claim for tortious interference with contractual relations?
Walnut St. Assocs., Inc. v. Brokerage Concepts, Inc.,
Appellant WSA argues that the Superior Court’s decision adopting and applying Section 772(a) was erroneous. WSA insists that the trial court properly held that truth is not a defense to a claim for tortious interference with contractual relations. According to WSA, the court properly instructed the jury to consider the following factors in evaluating Ma-crone/BCI’s conduct: a) the nature of the actor’s conduct; b) the actor’s motive; c) the interest of the other with which the actor’s conduct interferes; d) the interests sought to be advanced by the actor; e) the social interest in protecting the freedom of action of the actor and the contractual interests of the other; and f) the relations between the parties.
See
Restatement (Second) of Torts § 767 (listing factors relevant to determining whether interference is improper);
Adler, Barish, Daniels, Levin & Creskoff v. Epstein,
Moreover, argues WSA, only this Court, and not the Superi- or Court, may adopt a section of the Restatement not previously applied in Pennsylvania. According to WSA, the Superi- or Court should have relied on this Court’s decision in Adler Barish. In that case, cеrtain associates of the Adler Barish law firm left that firm and opened a competing firm; the former associates sent letters to Adler Barish clients informing them that they could now choose to be represented by the new firm instead of Adler Barish, and included a form that the clients could complete and return to Adler Barish (in an enclosed, addressed and stamped envelope) severing their relationship with that firm. WSA argues that these client letters were “true,” and yet this Court nonetheless held that the communications were actionable. From these factual circumstances, WSA argues that Adler Barish stands for the proposition that truth is not a defense to its tortious interference claim against BCI in this case.
WSA further argues that the Superior Court erroneously concluded that this Court would adopt Restatement (Second) of Torts § 772(a), simply because we had relied upon “what is now” Section 772(b) to support a different proposition in
Menefee v. Columbia Broadcasting System Inc.,
WSA also relies on
Collincini v. Honeywell, Inc.,
Finally, WSA reiterates its view that only this Court has the authority to adopt Section 772(a), and that the Superior Court erred in applying a new rule retroactively here. According to WSA, this retroactive change in the law has led to an inequitable result by reversing a jury verdict, after years of litigation which proceeded on the basis that Section 767 — not Section 772 — was the law of the Commonwealth. WSA claims that because it was aware that at least portions of the BCI letter were true, WSA “would not have even brought its claim for tortious interference if [Section] 772(a) were the applicable law,” and thus “changing] the playing field” now is a great hardship to WSA. Appellant’s Brief at 23.
Appellee BCI argues that the Superior Court properly applied Section 772(a) here. BCI asserts that this Court has repeatedly looked to the Restatements of Torts in shaping the law of tortious interference, citing,
inter alia, Adler Barish, supra.
BCI accurately points out that at the time
Adler Barish
was decided, the Second Restatement of Torts had not yet been published and the Draft that existed did not include subsection (a) regarding truthful statements.
5
Therefore, BCI argues, WSA’s contention that the
Adler Barish
Court rejected Section 772(a) is unavailing. In any event, the truthful statement involved in
Adler Barish
— that the former associates had formed a new firm — was acknowledged by this Court to merit constitutional protection.
BCI also relies on this Court’s decision in
Menefee, supra,
noting that the Court there endorsed the “honest advice privilege” in Section 772 of the First Restatement, now Section 772(b) of the Second Restatement, and that it “is only a small step” to approve Section 772(a); both current subsections of Section 772 “protect speech that is truthful, regardless of the speaker’s intent.” Appellee’s Brief at 14. BCI draws a parallel between the truth defense in defamation claims,
e.g., Connor v. Archdiocese of Philadelphia,
BCI also argues that “the majority of courts in other states have concluded that truthful statements do not give rise to a tortious interference claim.” Appellee’s Brief at 18.
See also Walnut St,
BCI further asserts that the Superior Court properly predicted that this Court would adopt Section 772(a) when given the opportunity, and that the Superior Court does not lack the
authority to adopt a Restatement provision involving an issue not previously resolved by this Court. BCI rejects WSA’s claim that the Superior Court retroactively applied a new rule of law, because the rule had been applied earlier in
Yaindl
and
Geyer v. Steinbronn,
Finally, BCI argues that even if this Court declines to adopt Section 772(a), we should nonetheless affirm. According to BCI, this case involves the termination of an at-will contract as the result of a letter accurately describing WSA’s compensation, which information was not entitled to confidentiality or privacy, and where the disclosure did not violate industry customs or ethical standards. Moreover, BCI claims, the social utility of the disclosure is “obvious.” Even under comment f to Section 767, an “interference” designed to further one’s own economic interests “will normally prevail over a similar interest of the other if the actor does not use wrongful means.” 7 BCI argues that WSA’s loss in this case is not the kind the law should protect, as it resulted from the termination of a contract that did not involve a meeting of minds because Procacci believed it was paying a different amount to WSA. In response to these final arguments by BCI, WSA simply states that they are outside the scope of the question before us, and if we do not approve of the Superior Court’s adoption of Section 772(a), we should reverse.
The issue posed is a question of law. Because the relevant facts are not in dispute, our review of the lower courts’ conclusions of law is plenary and
de novo. See Vicari v. Spiegel,
In
Adler Barish, supra,
this Court acknowledged a well-established cause of action for intentional, improper interfer
ence with existing contractual relations.
The Adler Barish Court proceeded to quote then-Tentative Draft No. 23 of the Restatement (Second) of Torts § 766, which provided that “[o]ne who intentionally and improperly interferes with the performance of a contract” is subject to liability for pecuniary loss resulting from a failure to perform the contract. 8 The Court went on to consider whether the former Adler Barish associates’ intentional interference with client contracts was privileged and justified, or whether it was “improper.” Id. at 1183.
Ours is a free society where citizens may freely interact and exchange information. Tortious interference, as a basis for civil liability, does not operate to burden such interactions, but rather, to attach a reasonable consequence when the defendant’s intentional interference was “improper.”
9
In determining whether an actor’s conduct in intentionally interfering with an existing contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors:
(a) the nature of the actor’s conduct,
(b) the actor’s motive,
(c) the interests of the other with which the actor’s conduct interferes,
(d) the interests sought to be advanced by the actor,
(e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other,
(f) the proximity or remoteness of the actor’s conduct to the interference and
(g) the relations between the parties.
Together with Sections 766 and 767, Section 772 is now part of a larger scheme of Second Restatement provisions regarding tortious interference with contractual relations, and further defines the core concept of “improper” interference.
11
Indeed,
We do not view Section 772(a) as intending to alter the traditional understanding of the tort; as the Second Restatement makes clear, the elaborations are a product of experience and refinement. It is true that this Court has not yet expressly “adopted” Restatement (Second) of Torts § 772(a); nor have we rejected it.
12
However, the Court did rely on the
precursor to Section 772(b) to shield defendants from a tortious interference claim where they gave advice to their employer about another employee.
See Menefee, supra
(citing former Section 772, now 772(b)). And, even earlier, this Court recognized the countervailing propоsition that a “groundless” allegation or a “misrepresentation” would indeed support an action for interference with contractual relations.
See, e.g., Caskie v. Philadelphia Rapid Transit Co.,
The Superior Court, which by design hears and decides many issues that have not yet been resolved by this Court, had оccasion to consider Section 772(a), even before its application in this case. See, e.g., Geyer, supra (Section 772(a) considered but deemed inapplicable because defendant’s statements about plaintiff were not believed by jury to be true); Yaindl, supra (stating in dicta that if defendant’s statements were true, there would be no improper interference under Section 772). See also Kachmar, supra (truthfulness might be useful along with Section 767 factors in determining whether interference is actionable, but noting that Pennsylvania Supreme Court has not yet adopted Section 772). Now that Restatement (Second) of Torts § 772(a) is squarely before us, we hold that the Superior Court properly determined that Section 772(a) should apply, and that it controls under the facts of this case.
There is no dispute that BCI’s employee Macrone intentionally imparted information about WSA’s compensation to Procacci, when Procacci was seeking lower employee health insurance costs, and that the information was truthful. As a result of its learning that truth, Procacci fired WSA as insurance broker of record. The question is whether BCI’s intentional interference with the Procacci/WSA contract was improper, and thus actionable. The jury found that the interference was improper, but only after being instructed on the Section 767 factors. The parties do not dispute that, if the trial court had deemed Section 772(a) applicable as BCI advocated, BCI would have been entitled to judgment as a matter of law. In our view, the Superior Court properly determined that Section 772(a) — the more specific Restatement prоvision regarding truthful disclosures — was available to BCI, rather than the more general Section 767 factors, exclusively.
As we have noted, Section 772 addresses a particular, recurring subclass of cases involving the construction of what may be deemed to be “improper” (and hence actionable) interference with contractual relations. Section 772 provides that it is not improper interference if the defendant is merely giving the third person: “(a) truthful information, or (b) honest advice within the scope of a request for the advice.” The comments to Section 772 amplify the meaning of subsection (a):
a. This Section is a special application of the general test for determining whether an interference with an existing or prospective contractual relation is improper or not, as stated in §§ 766-766B and 767. Comments to those Sections may be relevant here.
b. Truthful information. There is of course no liability for interference with a contract or with a prospective contractual relation on the part of one who merely gives truthful information to another. The interference in this instance is clearly not improper. This is true even though the facts are marshaled in such a way that they speak for themselves and the person to whom the information is given immediately recognizes them as a reason for breaking his contract or refusing to deal with another. It is also true whether or not the information is requested. Compare § 581A, on the effect of truth in an action for defamation.
Restatement (Second) of Torts § 772, cmts. a-b (emphasis added).
Of course, thе fact that the Second Restatement contains this refinement, and explicitly provides that the conveyance of truthful information is not “improper” interference, is not reason alone for this
Furthermore, we reject WSA’s argument that the adoption of Section 772(a) in this case comprises an improper retroactive application thаt unfairly “change[s] the playing field.” Appellant’s Brief at 23. “While retroactive application of a new rule of law is a matter of judicial discretion usually exercised on a case-by-case basis, the general rule is that a decision announcing a new rule of law is applied retroactively so that a party whose case is pending on direct appeal is entitled to the benefit of changes in the law.”
Kituskie v. Corbman,
First of all, our holding does not amount to an adoption of an entirely new rule of law. The Restatement provision, which was first published in 1979, merely explicates the longstanding, existing rule concerning improper interference; the specific application follows logically from the general principle and nature of the tort. Our formal “adoption” of Section 772(a) as an accurate application of the general principle respecting whаt amounts to “improper” interference does not overrule any governing contrary precedent, and no existing “old rule” is impaired. Indeed, if anything, our agreement with, and adoption of Second Restatement Section 772(a), was foreshadowed by this Court’s citation to former Section 772 in Menefee, our reliance on related Sections 766 and 767 in Adler Barish, and the very fact that we have looked to the Restatement in our prior considerations of the tort.
Finally, we offer some guidance in light of WSA’s argument concerning the power of the Superior Court to adopt a provision of the Restatement. It is beyond peradventure that the Superior Court must follow this Court’s mandates, and it generally lacks the authority to determine that this Court’s decisions are no longer controlling.
Commonwealth v. Jones,
For the foregoing reasons, we hold that BCI’s truthful statements to Procacci were not actionable in this claim for tortious interference, and accordingly, we affirm the Superior Court’s decision.
Order affirmed.
Notes
. Section 772 provides:
One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the third person
(a) truthful information, or
(b) honest advice within the scope of a request for the advice.
Restatement (Second) of Torts § 772 (1979).
. Kimberly Macrone was dismissed on voluntary nonsuit after trial, and is not a party to this appeal.
. N.T. 6/29/07, 13-14. The court instructed the jury as follows:
[Hjere are the things that plaintiff has to prove to you. One, the existence of a contractual or prospective contractual relation between the complainant and a third party ... Two[:] Purposeful action on the part of the defendant specifically intended to harm the existing relation or to prevеnt a prospective relation from occurring. Three, the absence of privilege or justification on the part of the defendant. And four, actual legal damages resulting from the defendant's conduct. Here are some of the factors that you should consider in determining whether interference was improper. Consideration should be given to the nature of the defendant's conduct; the defendant's motive; the interests of the defendant; the interests of all the parties that the conduct supposedly interfered with; the interests sought to be advanced by the defendant; the social interests in protecting the freedom of action of the defendant; and the contractual interests of the plaintiff; the proximity or remoteness of the defendant's conduct to the interferеnce; and the relationship between and among all the parties. A defendant’s conduct is privileged when it acts as a competitor seeking to advance its own competitive interests if it does not employ improper or wrongful means. A defendant’s conduct is privileged when it employs proper means to protect or advance its own business interests, even if the conduct invades another’s interest in freedom from interference with its own contractual relations.
Id. at 14-16. See Restatement (Second) of Torts §§ 766 (intentional interference with contract by third person) and 767 (factors in determining whether interference is improper). The court denied the requested instruction on Section 772(a), but BCI raised truthfulness as a defense in its Answer and New Matter, its motion for directed verdict, its post-triаl motion for judgment n.o.v. or a new trial, its Pa.R.A.P. 1925(b) statement of errors complained of on appeal, and its appeal to the Superior Court.
. As discussed infra at footnote 12, the Collincini court's statement to this effect was dicta.
. Tentative Draft No. 23 of Section 772 provided only that “honest advice within the scope of a request for advice from the third person does not interfere improperly with the other’s contractual relation.” We note, however, that the Draft did include a "comment c” which, like current comment b, stated: "There is of course no liability for interference with a contract ... on the part of one who merely gives truthful information to another. The interference in this instance is clearly not improper____” Tentative Draft No. 23 of Restatement of Torts (Second) § 772 (1977).
. We note that the contingent constitutional question so identified by BCI is not befоre this Court in this appeal. Nevertheless, the point, even if not preserved as a separate basis for relief, obviously may be relevant to our assessment of the discrete issue we have accepted.
. In reply, WSA reiterates that the jury, charged on the law of tortious interference as set forth in Restatement Sections 766 and 767, still found in its favor.
. In its current form, Section 766 still provides: "One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.” Rеstatement (Second) of Torts § 766.
. It is notable that, historically, the term "malicious” was used to define the kind of intentional interference with contractual relations that was actionable. See Restatement (Second) of Torts Div. 9, Ch. 37 Introductory Note (1979) (citing Lumley v. Gye (1853) 2 E. & Bl. 216, 118 Eng.Rep. 749). This Court has recognized that "what is meant is not malice in the sense of ill will but merely purposeful interference without justification.” Adler Barish, supra at 1182 (quoting from Birl, supra at 474). The Restatement commentary indicates that its drafters settled on the term "improper” as a "single word that will indicate for this tort the balancing process expressed by the two terms ‘culpable and not justified.' " Introductory Note, supra. "Section 767 specifies and analyzes the factors to be taken into consideration in determining whether the interference is improper, and must therefore be read and applied to each of the earlier sections.... Sections 768-773 state specific applications of the factors set out in § 767 to certain types of factual patterns.” Id.
. The
Adler Barish
Court did acknowledge that under
Bates v. State Bar of Arizona,
. The Second Restatement prоvides a detailed framework for analyzing claims of tortious interference with contractual relations, including provisions describing "improper” conduct. See generally Restatement (Second) of Torts §§ 766 (intentional interference with performance of contract by third person); 766A (intentional interference with another’s performance of his own contract); 766B (prospective contractual relations); 766C (negligent interference); 767 (factors in determining whether interference is improper); 768 (competition); 769 (actor having financial interest in business of person induced); 770 (actor respon sible for welfare of another); 771 (inducement to influence another’s business policy); 772 (advice as proper or improper interference); 773 (asserting a bona fide claim); 774 (agreement illegal or contrary to public policy); 774A (damages).
. In its brief, WSA makes much of the Superior Court panel’s statement in
Collincini, supra,
that truth "is
not
a defense to intentional interference with contractual relations.”
. As stated by the Superior Court in its opinion, and by BCI in its brief, courts in a majority of states have held that an action for tortious interference may not be based on truthful statements.
See Walnut St.,