Justia Contracts Opinion Summaries

Articles Posted in Labor & Employment Law
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The Supreme Court reversed the order of the district court denying Appellant's motion to compel arbitration, holding that where an arbitration agreement delegates the threshold question of arbitrability to the arbitrator, the district court must refer to the case to arbitration, even if the court concludes that the dispute is not subject to the arbitration agreement.Respondents filed a personal injury lawsuit against Uber after their Uber driver rear-ended another Uber driver. Uber moved to compel arbitration on the grounds that Respondents had agreed to arbitrate their claims. The district court denied the motion, concluding that the arbitration agreement did not plainly provide that the parties agreed to submit this particular dispute to arbitration. The Supreme Court reversed, holding that where the arbitration agreement's delegation clause expressly requires the arbitrator to determine threshold issues of arbitrability, the district court erred by denying Uber's motion to compel on the ground that the claims were not subject to the arbitration agreement. View "Uber Technologies, Inc. v. Royz" on Justia Law

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Plaintiff made contributions to a 401(k) plan during her employment at Honeywell International Inc. She originally designated her husband, Defendant, as the sole beneficiary in the event of her death. The parties later divorced and in the marital termination agreement (MTA), they agreed that Plaintiff will be awarded, free and clear of any claim on the part of Defendant’s, all of the parties’ right, title, and interest in and to the Honeywell 401(k) Savings and Ownership Plan. Plaintiff submitted a change-of-beneficiary form to Honeywell. She, however, did not comply with a requirement.   Plaintiff died in 2019 and Honeywell paid the benefits to Defendant. The personal representative of Plaintiff’s estate sued Honeywell for breach of fiduciary duty, and Defendant for breach of contract, unjust enrichment, conversion, and civil theft. The Eighth Circuit affirmed summary judgment for Honeywell and reversed summary judgment for Defendant on the breach of contract and unjust enrichment claims.   The court explained that even if the Plan gave the administrator discretion to accept Plaintiff’s defective Form, it is not an abuse of discretion to act in accordance with plan documents. ERISA directs administrators to “discharge [their] duties . . . in accordance with the documents and instruments governing the plan.” Thus, because Honeywell followed plan documents in rejecting Plaintiff’s defective change-of-beneficiary form and distributing benefits, the breach of fiduciary duty claim fails. Further, even if the MTA were ambiguous, a reasonable jury could find that Plaintiff and Defendant intended for the MTA to waive his beneficiary interest in the 401(k). View "Robert Gelschus v. Clifford Hogen" on Justia Law

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Crozer owns healthcare companies that operate as wholly owned subsidiaries: Prospect, employs professionals working at hospitals; CCMC, is a hospital and hired Abdurahman as an emergency medical resident. Abdurahman signed new-hire paperwork, including an at-will employment agreement with Crozer and an arbitration agreement with Prospect. Several weeks later, Abdurahman signed a residency agreement with CCMC. Dr. Jacobs was an employee of Prospect, working as CCMC’s Director of Toxicology and supervised Abdurahman. Abdurahman alleged that Jacobs sexually harassed her; Jacobs claimed the opposite and informed CCMC Human Resources that Abdurahman had assaulted her. The dispute escalated until Abdurahman was fired.Abdurahman filed a complaint with the Pennsylvania Human Relations Commission and the EEOC, alleging defamation and discrimination under Title VII, Title IX, 42 U.S.C. 1981, and the Pennsylvania Human Relations Act. She subsequently filed suit against CCMC and Jacobs. The district court denied a motion to compel arbitration. The Third Circuit affirmed. Abdurahman signed an arbitration agreement with Prospect, not CCMC. That agreement cannot stretch to govern Abdurahman’s employment with CCMC. The court noted that the corporations are sophisticated entities that drafted the forms. View "Abdurahman v. Prospect CCMC LLC" on Justia Law

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The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Family Medicine Associates (FMA) and one of its members (together, Defendants) and dismissing this lawsuit alleging breach of contract, breach of the implied covenant of good faith and nonpayment of wages, holding that Plaintiff's claims on appeal were unavailing.Plaintiff, a licensed physician, brought this lawsuit against his former employer nearly three years after his employment relationship was terminated. In his complaint, Plaintiff alleged that Defendants' breached their oral promise of a partnership that was never committed to writing. The district court granted summary judgment in favor of Defendants on all counts. The First Circuit affirmed, holding that Plaintiff failed to put forth sufficient evidence to survive summary judgment. View "Guldseth v. Family Medicine Associates LLC" on Justia Law

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The First Circuit affirmed the order of the district court granting summary judgment in favor of Defendants and dismissing Plaintiffs' hybrid breach of contract and fair representation claim, their Takings Clause claim, and their claim for declaratory relief, holding that there was no error or abuse of discretion.Plaintiffs, five sergeants in the City of Cranston Police Department, brought this lawsuit against the City of Cranston, the International Brotherhood of Police Officers, Local 301 (the Union), and Matthew Josefson. Plaintiffs were promoted to the rank of sergeant during the time period between Josefson's demotion and reinstatement and then, after Josefson's reinstatement, moved down one position in sergeant rank seniority. Plaintiffs brought suit, alleging several claims. The district court granted summary judgment for Defendants on all claims. The First Circuit affirmed, holding that Plaintiffs' claims failed. View "Barth v. City of Cranston" on Justia Law

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The Sixth Circuit reversed the judgment of the district court dismissing this ERISA action for lack of jurisdiction on the grounds that no contract bound the parties, holding that the presence of a live contract goes to the merits of this action, not the district court's jurisdiction to hear it.A group of employee benefits funds sued Defendant in a federal district court alleging breach of contract for late contributions under the Employee Retirement Income Security Act (ERISA). Defendant responded that no contract existed and that the presence of a live contract was a jurisdictional prerequisite to Plaintiffs' ERISA suit, meaning that the claim should have been brought under the National Labor Relations Act and that the National Labor Relations Board had exclusive jurisdiction to hear Plaintiffs' grievances. The district court dismissed the suit without prejudice, holding that it lacked jurisdiction to hear Plaintiffs' claim. The Sixth Circuit reversed, holding that the presence of a live contract is not an essential jurisdictional fact in an action brought under section 515 of ERISA. Rather, the presence of a live contract goes to the merits of Plaintiffs' ERISA claim. View "Operating Engineers' Local 324 Fringe Benefits Funds v. Rieth-Riley Construction Co." on Justia Law

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The Sixth Circuit vacated the judgment of the district court vacating an arbitration award to the extent that it applied to Greenhouse Holdings, LLC (Greenhouse), holding that it was disputed whether Greenhouse consented to arbitrate, and therefore, the evidence should be weighed by the district court in the first instance.At issue was whether an arbitrator has the authority to bind someone who hasn't signed the underlying arbitration agreement to an arbitration award. A Union filed a grievance against "Clearview Glass," alleging that it violated the parties' collective bargaining agreement. An arbitrator concluded that Greenhouse was bound by an in violation of the CBA. The district court vacated the award to the extent it applied to Greenhouse because it was unclear whether Greenhouse ever assented to the CBA. The Sixth Circuit vacated the judgment, holding that remand was required for the district court to first decide whether Greenhouse consented to arbitrate the threshold arbitrability question. View "Greenhouse Holdings, LLC v. International Union of Painters" on Justia Law

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The Board of Trustees of the Sheet Metal Workers’ National Pension Fund (“the Fund”) sought to recover a delinquent exit contribution from Four-C-Aire, Inc., a former participating employer, under Section 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”). 29 U.S.C. Section 1145. The Fund claims Four-C-Aire’s obligation arose under a collective-bargaining agreement (“the CBA”) between the Sheet Metal Workers’ International Association Local Union No. 58 and the Central New York Sheet Metal Contractors Association, a multiemployer bargaining unit. According to the Fund, Four C-Aire signed on to this preexisting agreement while it was a member of the Contractors Association.   The Fourth Circuit affirmed, finding that Four-C-Aire adopted the agreement by its conduct. The court held that even if Four-C-Aire had preserved the issue, it’s meritless. The record contains several iterations of the written trust documents, including those imposing the exit-contribution requirement. And the Fund’s Director of Operations verified each version of the document in a declaration to the district court. Further, the court wrote there is no evidence the trust documents are invalid. In sum, Four-C-Aire offers no reason why the court shouldn’t enforce the plain terms of the agreement and trust documents, as ERISA requires. View "Board of Trustees v. Four-C-Aire, Inc." on Justia Law

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At issue in this appeal was whether a cross-complaint filed by Connor Callanan against Charles Menken, Steven Menken, and Grizzly Designs, LLC, dba Brotherly Love (collectively “the Menkens”) was a SLAPP suit subject to a special motion to strike under Code of Civil Procedure section 425.16 (known as the anti-SLAPP statute). The Menkens were “engaged in the research and development of various cannabis based products intended for marketing in the burgeoning cannabis market space.” Marino and Callanan owned and operated a business called UHSE Media LLC that provided media, marketing, and consulting services to the cannabis industry. In May 2019, the Menkens entered into an “oral agreement” with Marino and Callanan for such consulting services and agreed to pay them $30,000 each. The Menkens claimed that Marino and Callanan were independent contractors rather than employees. Marino and Callanan were “permitted” to live at the Menkens’ “business location” “as they deemed necessary” in order to do their consulting work, but they “were at all times free to come and go as they determined necessary and for their own purposes.” They began living and working at the Menkens’ business location in late May 2019. The Menkens contended “the substantial majority” of the work Marino and Callanan did on the farm was related to their independent media and consulting business, but that by November 2019, Marino and Callanan were failing to perform media and consulting services and were instead spending most of their time harvesting and processing cannabis. Marino and Callanan also began demanding sums of money “they believed they were entitled to under California’s wage and hour laws.” At this point, the parties’ relationship “became openly hostile” and Marino and Callanan (allegedly) set fire to a building that was used as an office and sleeping quarters, causing over $100,000 in damages. The Menkens contended Callanan’s cross-complaint was a SLAPP suit because it was filed in retaliation for a cross-complaint they filed against Callanan, and they filed a motion under section 425.16 seeking to strike it. The trial court granted the motion, and Callanan appealed. After review, the Court of Appeal concluded Callanan’s cross-complaint was not a SLAPP suit because none of his claims arose from the filing of the Menkens’ cross-complaint. View "Callanan v. Grizzly Designs, LLC" on Justia Law

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After plaintiff filed this class-action complaint against defendants, defendants filed a motion to compel arbitration. The trial court granted the motion. Plaintiff appealed, and the Court of Appeals affirmed. The Oregon Supreme Court granted review of the matter, finding that plaintiff and defendants executed a contract—the “Driver Services Agreement” (DSA)—for plaintiff to provide delivery services for defendants. The DSA stated that drivers are independent contractors. The DSA includes a section on dispute resolution. That section provides that any party “may propose mediation as appropriate” as a means for resolving a dispute arising out of or relating to the DSA. It then provided that, if the parties did not pursue mediation or mediation failed, “any dispute, claim or controversy” arising out of or relating to the DSA—including disputes about “the existence, scope, or validity” of the DSA itself—would be resolved through binding arbitration conducted by a panel of three arbitrators. The DSA also included a savings clause, which allowed for the severance of any invalid or unenforceable term or provision of the DSA. On review, plaintiff argued, inter alia, that the arbitration agreement within the DSA was unconscionable because it required him to arbitrate his wage and hour claims but prohibited the arbitrators from granting him relief on those claims. Plaintiff based his argument on a provision of the arbitration agreement that stated that the arbitrators could not “alter, amend or modify” the terms and conditions of the DSA. The Court of Appeals agreed with defendant’s reading of the DSA, as did the Supreme Court: read in the context of the DSA as a whole, the provision that the arbitrators may not “alter, amend or modify” the terms and conditions of the DSA “is not plausibly read as a restriction on their authority to determine what terms are enforceable or what law is controlling.” View "Gist v. Zoan Management, Inc." on Justia Law