Justia Contracts Opinion Summaries

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

The University of California Retirement Plan (UCRP) is a defined benefit plan. In 1999, the University’s President addressed the recruitment and retention impacts of federal tax law: for employees hired after a certain date, a “maximum compensation amount that can be used for retirement calculations”—then, $160,000—such that employees earning more than the maximum “cannot receive benefits based on the full compensation that UCRP would otherwise use for benefit calculations.” The President recommended that the University take advantage of recent amendments to the Internal Revenue Code making it possible for public institutions to “mitigate” the limitations. The Regents adopted the 1999 Resolution, establishing restoration plans. The President’s Office drafted a Plan amendment, Appendix E, to implement the Resolution. Appendix E provided for Regents’ unlimited right to amend or terminate Appendix E,. In 2007, following a moratorium, the IRS approved Appendix E. The University did not implement Appendix E.Retired employees sued on behalf of themselves and similarly situated Plan members who retired between January 1, 2000, and March 29, 2012, alleging impairment of contract, promissory estoppel, equitable estoppel, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith. The court of appeal affirmed the rejection of those claims. The 1999 Resolution expressly contemplated further review and action before any employee benefit was provided, and did not clearly evince an intent to create contractual rights. View "Broome v. Regents of the University of California" on Justia Law

The Supreme Court reversed the judgment of the circuit court against Northern Rental Corporation and Steve Willis in this action stemming from the alleged breach of a lease agreement, holding that the circuit court erred in determining damages.In 2019, Northern and Willis defaulted on their lease agreement with Peska Properties, Inc. Peska Properties subsequently entered into a lease with Mills Aftermarket Accessories, Inc. to fill Willis/Northern's remaining lease term plus an additional term. Thereafter, Peska Properties brought this action against Willis/Northern requesting unpaid rent, repayment of Northern's build-out loan, payment of Mills's build-out costs, and attorney fees. The circuit court determined that Willis/Northern owed Peska Properties $68,730. The Supreme Court reversed, holding that the circuit court's award was an error of law because it failed to meet the goal of a damage award. On remand, the court was directed to recalculate the build-out allowance damages. View "Peska Properties, Inc. v. Northern Rental Corp." on Justia Law

Plaintiff-appellant Jayen Patel, M.D. brought a tort claim for wrongful termination against defendant-appellee Tulsa Pain Consultants, Inc. (TPC). The trial court found Patel was not an at-will employee and entered a directed verdict in favor of TPC. Patel appealed, and the Court of Civil Appeals affirmed. TPC moved for appeal-related attorney fees, which the Court of Civil Appeals denied. The Oklahoma Supreme Court granted certiorari to determine whether TPC had a contractual right to recover attorney fees as the prevailing party in Patel's wrongful termination claim. After review, the Supreme Court found that the specific language in the parties' employment agreement authorized attorney fees in this case. View "Patel v. Tulsa Pain Consultants" on Justia Law

Plaintiff Sean Kelly appealed the grant of summary judgment to the University of Vermont Medical Center (UVMMC) on employment discrimination and breach-of-contract claims arising from UVMMC’s decision not to extend his one-year medical fellowship. UVMMC selected plaintiff for the 2017-18 fellowship. UVMMC was aware that plaintiff suffered from an adrenal deficiency that had delayed the completion of his residency. In the first five months of the fellowship, plaintiff missed nineteen full days and parts of nine more days for various reasons. By February 2018, after missing several more days and expressing that he felt “frustrated with [his] absences” and “overall inadequate as a fellow,” program personnel became concerned that plaintiff was falling behind in his training. In a March 30 meeting, the program director told plaintiff his performance had “deficiencies and these need[ed] to be addressed.” At some point during this period, the director also told plaintiff he “should plan on extending [his] fellowship due to [his] time out and some minor deficits through August.” Plaintiff emailed other program personnel expressing frustration at the prospect of staying through August to complete his training. On April 14, 2018, plaintiff suffered a stroke, and on April 19th he attempted suicide. He was hospitalized from April 14 through May 3 and was not cleared to return to work until June 1, 2018. In all, plaintiff missed approximately six more weeks of the fellowship. On or about May 31, the director called plaintiff and told him that while UVMMC had determined he needed six more months of training to finish the fellowship, it could not accommodate additional training for that length of time. UVMMC paid plaintiff his remaining salary. Plaintiff filed a grievance under the Graduate Medical Education rules; the grievance committee affirmed UVMMC's decision. Because the decision not to extend his fellowship was an academic decision, there was no employment action and consequently no adverse employment action. The Vermont Supreme Court did not find plaintiff's arguments on appeal persuasive, and affirmed the grant of summary judgment in UVMMC's favor. View "Kelly v. University of Vermont Medical Center" on Justia Law

James P. Key, Jr. appealed a circuit court order denying his motion to compel arbitration of his claims against Warren Averett, LLC, and Warren Averett Companies, LLC (collectively, "WA"). Key alleged that he was a certified public accountant who had been employed by WA for 25 years and had been a member of WA for 15 years; that he had executed a personal-services agreement ("PSA") with WA that included a noncompete clause; and that WA had sent him a letter terminating his employment. Key sought a judgment declaring "that the Non-Compete Clause and the financial penalty provision contained in the PSA is not applicable to Key and is an unlawful restraint of Key's ability to serve his clients as a professional." The Alabama Supreme Court found that whether Key's claims against WA had to be arbitrated was a threshold issue that should not have been decided by the circuit court; nor was it appropriate for the Supreme Court to settle the issue in this appeal. Accordingly, the circuit court's order was reversed, and the case was remanded for the circuit court to enter an order sending the case to arbitration for a determination of the threshold issue of arbitrability and staying proceedings in the circuit court during the pendency of the arbitration proceedings. View "Key v. Warren Averett, LLC, et al." on Justia Law

RiverStone operates quarries in three midwestern states. Under a collective bargaining agreement (CBA), RiverStone contributed to the Fringe Benefit Funds for certain employees, based on hours worked by the members of the bargaining unit. The CBA expired in May 2016. Nothing in the agreement imposes on RiverStone an obligation to make contributions after the agreement. RiverStone sought a declaratory judgment that it had no obligation to make contributions to the employees’ pension fund on behalf of individuals hired after the CBA expired. The Funds filed a counterclaim.The district court granted RiverStone summary judgment, holding that RiverStone did not have a contractual duty to contribute to the Funds on behalf of the new employees and that it lacked jurisdiction to evaluate noncontractual sources of liability, such as the National Labor Relations Act (NLRA) so the dispute fell within the exclusive jurisdiction of the National Labor Relations Board. The Seventh Circuit affirmed. The dispute is over an obligation that does not arise under any contract. Once a CBA has expired, the Employee Retirement Income Security Act, 29 U.S.C. 1145, does not confer jurisdiction on the district court to determine whether the employer’s failure to make post-contract contributions violated the NLRA. View "RiverStone Group, Inc v. Midwest Operating Engineers Fringe Benefit Funds" on Justia Law

The defendant hired the plaintiff as a gardener and required him to sign an employment agreement (“Agreement”), which mandates arbitration of “all disputes between Employee and Company relating, in any manner whatsoever, to the employment or termination” of the employee. Plaintiff sued his employer, and the employer demanded arbitration. Plaintiff argued that the defendant waived the right to arbitrate, that he did not sign the Agreement or signed without informed consent, and the Agreement is unconscionable.On appeal, the court reasoned that arbitration agreements are “valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” Code Civ. Proc., Sec. 1281. To declare an agreement unenforceable, a court must find procedural and substantive unconscionability. Here, the court found that defendant had superior bargaining power over the plaintiff. Further, the employer drafted the Agreement and presented it to the plaintiff as a condition of employment on a take-it-or-leave basis. The plaintiff claimed he had no opportunity to review the Agreement and was told the English-language Agreement involved a company change, not that it waived his right to a jury trial. The plaintiff was instructed to sign the Agreement or be fired.The court found that the employer presented the plaintiff with an agreement in a language he cannot read, misrepresented the nature of the document, denied him an opportunity to review it, included unfair and onerous provisions, and chilled his ability to claim civil rights violations. Thus, the court denied the defendant’s motion to compel arbitration. View "Nunez v. Cycad Management LLC" on Justia Law

Cromer, formerly a “managing loan officer” for Union Home Mortgage, agreed to several restrictive covenants, including that he would “not become employed in the same or similar capacity” with a competitive entity. Cromer left Union and started working for Homeside Financial as a “non-producing” branch manager. Union sought a preliminary injunction to enforce Cromer’s restrictive covenants, citing the 2016 Defend Trade Secrets Act, 18 U.S.C. 1836; the Ohio Uniform Trade Secrets Act; the non-compete, confidentiality, and nonsolicitation covenants; the contractual duty of loyalty; and the common law duty of loyalty. Against Homeside, Union alleged tortious interference with business relationships and with contracts.The district court issued an injunction—without any time limitation—prohibiting Cromer, and anyone acting in concert, from “competing with Union Home.” The Sixth Circuit vacated. The injunction failed to satisfy the specificity requirements of FRCP 65(d)(1), was overbroad, and was otherwise improperly granted under the standard for preliminary injunctions. The broad prohibition covers any form of competition, irrespective of Cromer’s employer, job title, or duties, and created an inherent risk that the scope of the injunction exceeds the Agreement that the parties signed. The district court also failed to consider whether the non-compete covenant is reasonable and thus enforceable. View "Union Home Mortgage Corp. v. Cromer" on Justia Law

In this case concerning the enforceability of a non-compete agreement the Supreme Court vacated the intermediate court of appeals' judgment on appeal and the circuit court's final order in favor of Lorna Gagnon with respect to her alleged breach of a non-solicitation clause as to one real estate agent but otherwise affirmed, holding that a genuine issue of material fact precluded summary judgment as to this issue.A non-compete agreement restricted Gagnon, a former employee of Prudential Locations, LLC, from establishing her own brokerage firm in Hawaii within one year after terminating her employment with Locations and from soliciting persons employed or affiliated with Locations. The Supreme Court held (1) the ICA erroneously failed to address whether the non-compete and non-solicitation clauses were ancillary to a legitimate purpose not violative of Haw. Rev. Stat. Chapter 480; (2) restricting competition is not a legitimate ancillary purpose; (3) to establish a violation of a non-solicitation clause, there must be evidence that the person subjective to the clause actively initiated contact; and (4) as to the non-compete clause, summary judgment was proper, but as to the non-solicitation clause, a genuine issue of material fact existed regarding whether Gagnon actively initiated contact. View "Prudential Locations, LLC v. Gagnon " on Justia Law