Justia Contracts Opinion Summaries

A Mississippi trial court denied Watercolor Salon LLC’s motion for a temporary restraining order and preliminary injunction filed against Watercolor’s former employee Nealie Hixon. The motion was based on an employment, confidentiality, and noncompetition agreement. Because Nealie was twenty years old and thus legally a minor when she entered the agreement, the trial court held the agreement was unenforceable. On appeal, Watercolor argues its employment agreement meets the statutory exception that permits minors eighteen years or older to enter into enforceable contracts “affecting personal property.” The Mississippi Supreme Court found Watercolor's logic was flawed and stretched the statutory minor disability exception too far. "Just because an employment contract restricts an employee from taking intellectual property or covers what happens upon breach or termination does not completely change the fundamental nature of the contract. And here the fundamental nature of the contract was a noncompetition agreement that Nealie would give up her ability to work in a certain geographical area for a fixed time in exchange for continued employment at a higher hourly wage. So this employment contract was simply a contract affecting Nealie’s right to work, not her personal property. Thus, the statutory exception does not apply. And because Nealie disaffirmed the contract, it is unenforceable against her." The Court affirmed the denial of Watercolor's motion for injunctive relief, which was based solely on the unenforceable agreement. Whether Watercolor had any remaining claims against Nealie that were not based on the contract, such as the taking of trade secrets, remained to be determined on remand. View "Watercolor Salon, LLC v. Hixon" on Justia Law

The Supreme Court reversed the judgment of the district court granting Defendant's motion to dismiss this lawsuit brought by Plaintiff under the Utah Sales Representative Commission Payment Act for allegedly failing to pay commissions it owed to her, holding that the Act's writing requirement is not a precondition for recovery.In her complaint, Plaintiff claimed that Defendant violated the Act by failing to pay commissions for sales that she made while working as a commissioned sales agent for the company. Defendant filed a motion to dismiss, arguing that because there was no signed writing there could be no recovery under the Act. The district court granted the motion. The Supreme Court reversed, holding (1) under the plain text of the Act, the writing requirement is not a prerequisite for a sales representative to sue a principal under the Act; and (2) therefore, the district court erred in granting Defendant's motion to dismiss. View "Williamson v. MGS By Design, Inc." on Justia Law

International Brotherhood of Electrical Workers, AFL-CIO 20 (“Local Union 97”), a union primarily of electrical workers, executed a memorandum of agreement (“2003 MOA”) detailing a two-pronged approach to providing retiree life insurance benefits. Local Union 97 brought a complaint seeking to compel arbitration of a grievance they submitted alleging that NRG violated the terms of the CBAs by changing the life insurance benefit for the Pre-2019 Retirees to a lump sum of $10,000. The district court held that: 1) the grievance is not arbitrable under the 2019-2023 CBA, 2) the 2003 MOA is not arbitrable, and 3) the grievance is not arbitrable under any of the CBAs covering 2003-2019.   The Second Circuit reversed and remanded and held the grievance is arbitrable under the 2019-2023 CBA because the broad arbitration provision creates a presumption in favor of arbitrability that NRG failed to overcome. The court also held that the parties’ dispute was arbitrable under the Prior CBAs because the 2003 MOA was a supplemental agreement that arguably vested the life insurance benefit for life. View "Local Union 97 v. NRG Energy, Inc." on Justia Law

Neurosurgeon Donald Blaskiewicz, M.D. went to work for the Spine Institute of Idaho (the “Spine Institute” or the “Institute”) in 2018. The Spine Institute entered into a Professional Services Agreement (the PSA) with Blaskiewicz containing a non-compete clause, contractually proscribing Blaskiewicz from practicing medicine within fifty miles of the Spine Institute’s office (with an explicit exception for Caldwell) for a period of eighteen months, should his employment with the Spine Institute be terminated for any reason. Pursuant to the PSA, Blaskiewicz had two ways to avoid the non-compete clause: he could either get permission from the Spine Institute to practice medicine within the proscribed area, or he could pay the Spine Institute $350,000 in “liquidated damages.” The PSA also required any disputes to be resolved by arbitration. Less than a year and a half after hiring Blaskiewicz, the Spine Institute terminated his employment. Blaskiewicz filed suit in district court, seeking a declaratory judgment that the non-compete clause was unenforceable. The district court concluded that the non-compete clause was against public policy and void as a matter of law, and granted summary judgment in favor of Blaskiewicz. The Idaho Supreme Court reversed, finding the district court did not cite or analyze the statutes governing non-compete agreements in Idaho. The Court concluded there were genuine issues of material fact such that summary judgment was inappropriate as to whether the non-compete provision was void as a matter of public policy or otherwise enforceable. View "Blaskiewicz v. Spine Institute of Idaho" on Justia Law

Alicia Cochran appealed a circuit court order that granted her former employer, CIS Financial Services' motion for a preliminary injunction. CIS was engaged in the mortgage-origination business and employed Cochran as a branch loan originator. In June 2021, Cochran's supervisor at CIS, Randy Lowery, left his employment at CIS to accept a position with Movement Mortgage, LLC ("Movement"). Another CIS employee, Geremy Reese, also left CIS to work for Movement. CIS thereafter filed suit against Lowery and Reese. Among other things, CIS requested in its complaint injunctive relief against Lowery and Reese. Additionally, CIS filed that same day a motion for a preliminary injunction against Lowery and Reese. On August 31, 2021, Cochran resigned her position with CIS. CIS then amended its complaint to include Cochran and Movement as defendants. The only specific count that CIS asserted against Cochran in the amended complaint was one alleging breach of contract. Then CIS moved for the preliminary injunction against Cochran at issue here. On appeal, Cochran challenged the propriety of the circuit court's order granting CIS's motion for a preliminary injunction, arguing that the respective restraining provisions of her compensation agreement and nonsolicitation agreement were not enforceable against her. However, CIS moved to dismiss Cochran's appeal as moot, noting that, by its terms, the preliminary injunction expired after August 31, 2022. CIS argued that this appeal no longer presented a justiciable controversy and that the Alabama Supreme Court, therefore, lacked jurisdiction over the appeal. The Supreme Court found the preliminary injunction challenged in Cochran's appeal expired by its own terms. Consequently, the Supreme Court lacked the power to grant Cochran relief from the preliminary injunction; therefore, this appeal was no longer justiciable and has become moot. The appeal was therefore dismissed. View "Cochran v. CIS Financial Services, Inc." on Justia Law

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

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

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

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

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