Justia Contracts Opinion Summaries

The Supreme Court reversed the judgment of the district court granting a preliminary injunction sought by Best Home Health & Hospice, LLC (Best Home) to prohibit three registered nurses (collectively, the Nurses) who left Best Home's employ and began working for a competing company, from working for Best Home's competitor, holding that the district court abused its discretion.The Nurses in this case quit working for Best Home and went to work for one of Best Home's competitors. Best Home sued them for breach of the non-compete provision in their employment contracts and requested a preliminary injunction to prohibit them from working for its competitors. The district court enjoined the Nurses from working for Best Home's competitors. The Supreme Court reversed, holding (1) Best Home did not show it was likely to succeed in establishing that the non-compete provision was consistent with public policy, and therefore, the district court abused its discretion by enjoining the Nurses from working for Best Home's competitors; and (2) the district court abused its discretion in refusing to allow the Nurses to present evidence on how enforcement of the non-compete provision would harm the public interest. View "Brown v. Best Home Health & Hospice, LLC" on Justia Law

Boykin, a 73-year-old African-American veteran, worked in managerial roles for Family Dollar Stores. On July 8, 2018, Boykin had a dispute with a customer. Family Dollar fired Boykin weeks later. Boykin sued, alleging age and race discrimination. Family Dollar moved to compel arbitration, introducing a declaration that Family Dollar employees must take online training sessions, including a session about arbitration. When taking online courses, employees use their own unique ID and password. During the arbitration session, they must review and accept Family Dollar’s arbitration agreement. According to Family Dollar, Boykin completed the session on July 15, 2013. Boykin replied under oath that he did not consent to or acknowledge an arbitration agreement at any time, that he had no recollection of taking the arbitration session, and that no one ever told him that arbitration was a condition of his employment. Boykin requested his personnel file, which did not include an arbitration agreement. The district court granted Family Dollar’s motion.The Sixth Circuit reversed. Although the Federal Arbitration Act requires a court to summarily compel arbitration upon a party’s request, the court may do so only if the opposing side has not put the making of the arbitration contract “in issue.” 9 U.S.C. 4. Boykin’s evidence created a genuine issue of fact over whether he electronically accepted the contract or otherwise learned of Family Dollar’s arbitration policy. View "Boykin v. Family Dollar Stores of Michigan, LLC" on Justia Law

Pittsburgh Logistics Systems, Inc. (“PLS”) was a third-party logistics provider that arranged the shipping of its customers’ freight with selected trucking companies. Beemac Trucking (“Beemac”) was a shipping company that conducted non-exclusive business with PLS. In 2010, PLS and Beemac entered into a one-year Motor Carriage Services Contract (“the Contract”), which automatically renewed on a year to year basis until either party terminated it. The Contract contained both a non-solicitation provision and the no-hire provision. In this appeal, the Pennsylvania Supreme Court considered whether no-hire, or “no poach,” provisions that were ancillary to a services contract between business entities, were enforceable under the laws of the Commonwealth. While the Contract was in force, Beemac hired four PLS employees. PLS sued Beemac, alleging breach of contract, tortious interference with contract, and a violation of the Pennsylvania Uniform Trade Secrets Act. PLS also sued the four former employees, alleging they had breached the non-competition and non-solicitation provisions of their employment contracts. The trial court held the worldwide non-compete clauses in the employees' contracts were “unduly oppressive and cannot be subject to equitable modification.” With respect to the contract between the companies, the trial court held the pertinent no-poach clause was void against public policy. “If additional restrictions to the agreement between employer and employee are rendered unenforceable by a lack of additional consideration, PLS should not be entitled to circumvent that outcome through an agreement with a third party.” Finding no reversible error in the trial court's judgments, the Supreme Court affirmed. View "Pgh. Logistics Systems, Inc. v. Beemac Trucking, et al." on Justia Law

This case presented an issue of first impression for the Alabama Supreme Court: whether a noncompetition agreement executed ancillary to the sale of a business terminates upon the death of the individual subject to the covenant not to compete. The Court found that based the specific facts of this case, the noncompetition agreement here did not impose any affirmative obligations on the decedent, and was executed separately from the other agreements relating to the sale of the business. Accordingly, the Court held the noncompetition agreement did not terminate. View "Boyd v. Mills" on Justia Law

The Supreme Court reversed in part and affirmed in part the order of the circuit court granting summary judgment in favor of the West Virginia University Board of Governors (WVU BOG) on Plaintiff's claims alleging that the West Virginia University Institute of Technology (WVUIT) breached its agreement to pay him a supplementary salary for serving as director of a research center, holding that summary judgment was improper on Plaintiff's claim brought under the West Virginia Wage Payment Collection Act (WPCA), W. Va. Code 21-5-1 through 18.Plaintiff, a professor at WVUIT, brought this action against WVU BOG, which manages the educational operations of WVUIT, bringing a common law claim for breach of contract, alternative equitable claims of quantum merit and unjust enrichment, and a statutory cause of action under WPCA. WVU BOG, a state agency, moved for summary judgment, invoking the doctrine of sovereign immunity. The circuit court granted summary judgment on all of Plaintiff's claims. The Supreme Court reversed in part, holding (1) sovereign immunity did not bar Plaintiff's claims under the WPCA, and genuine issues of disputed fact existed as to whether WVU BOG violated the WPCA; and (2) summary judgment was properly granted on the remaining claims. View "Davari v. West Virginia University Board of Governors" on Justia Law

The Supreme Judicial Court vacated the portion of the trial court's judgment denying Plaintiff's claim under Mass. Gen. Laws ch. 93A, 11 and affirmed the remainder of the judgment, holding that the judge erred in instructing the jury under section 11.The attorney defendants in this case misappropriated propriety materials from their employer during their employment and subsequently used those materials to compete with their former employer. A jury found Defendants liable on claims for conversion, conspiracy, and breach of the duty of loyalty. The jury denied relief on the plaintiff employer's claims for unfair or deceptive trade practices, in violation of section 11. The Supreme Judicial Court vacated the judgment in part, holding that Defendants may be liable for unfair or deceptive trade practices, and the judge erred in instructing the jury that Defendants' conduct before leaving their employer was not relevant to Plaintiff's claim under section 11. View "Governo Law Firm LLC v. Bergeron" on Justia Law

In this appeal arising from a contract action, the First Circuit affirmed the judgment of the district court denying Appellants' post-trial request for a declaratory judgment, holding that the district court did not abuse its discretion.Appellants, Covidien LP and Covidien Holding Inc. (collectively Covidien), brought this action against Brady Esche, a former employee, who assigned medical device patent rights to a company he subsequently founded, seeking declaratory judgment to the effect that Esch assign his rights, title, and interest in the patent applications to Covidien. Covidien also alleged that Esch breached his obligations under employment and/or separation agreements he signed. The jury found that Esch breached confidential information and awarded Covidien damages. Covidien subsequently moved for a declaratory judgment asking that Esch be required to assign to Covidien the inventions he subsequently made. The district court denied the request. The First Circuit affirmed, holding that the district court did not abuse its discretion in denying Appellants' post-trial declaratory judgment request. View "Covidien LP v. Esch" on Justia Law

The First Circuit reversed the decision of the district court refusing to enforce arbitration clauses in the employment agreement between New York Life Insurance Company and Ketler Bosse, which expressly required that any disputes about arbitrability be referred to the arbitrator, holding that the district court abused its discretion.After New York Life terminated its business relationship with him Bosse brought this action alleging race discrimination in violation of 42 U.S.C. 1981 and 1985 and other state law claims. New York Life asked the court to compel arbitration and stay or dismiss the lawsuit, but the district court refused. The First Circuit reversed, holding (1) the district court's analysis contravened the Supreme Court's holdings in Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019), First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) and other cases; and (2) the arbitration clause was clear, unmistakable, and unambiguous and should have been enforced on those terms. View "Bosse v. New York Life Insurance Co." on Justia Law

Cobbs, Allen & Hall, Inc. ("Cobbs Allen"), and CAH Holdings, Inc. ("CAH Holdings") (collectively,"CAH"), appealed the grant of summary judgment entered in favor of EPIC Holdings, Inc. ("EPIC"), and EPIC employee Crawford E. McInnis, with respect to CAH's claims of breach of contract and tortious interference with a prospective employment relationship. Cobbs Allen was a regional insurance and risk-management firm specializing in traditional commercial insurance, surety services, employee-benefits services, personal-insurance services, and alternative-risk financing services. CAH Holdings was a family-run business. The families, the Rices and the Densons, controlled the majority, but pertinent here, owned less than 75% of the stock in CAH Holdings. Employees who were "producers" for CAH had the opportunity to own stock in CAH Holdings, provided they met certain sales thresholds; for CAH Holdings, the equity arrangement in the company was dictated by a "Restated Restrictive Stock Transfer Agreement." For several years, McInnis and other individuals who ended up being defendants in the first lawsuit in this case, were producers for CAH, and McInnis was also a shareholder in CAH Holdings. In the fall of 2014, a dispute arose between CAH and McInnis and those other producers concerning the management of CAH. CAH alleged that McInnis and the other producers had violated restrictive covenants in their employment agreements with the aim of helping EPIC. Because of the dispute, CAH fired McInnis, allegedly "for cause," and in November 2014 McInnis went to work for EPIC, becoming the local branch manager at EPIC's Birmingham office. After review, the Alabama Supreme Court affirmed the circuit court's judgment finding CAH's breach-of-contract claim against McInnis and EPIC failed because no duty not to disparage parties existed in the settlement agreement. EPIC was not vicariously liable for McInnis's alleged tortious interference because McInnis's conduct was not within the line and scope of his employment with EPIC. EPIC also was not directly liable for McInnis's alleged tortious interference because it did not ratify McInnis's conduct as it did not know about the conduct until well after it occurred. However, the Supreme Court disagreed with the circuit court's conclusion that McInnis demonstrated that he was justified as a matter of law in interfering with CAH's prospective employment relationship with Michael Mercer. Based upon the admissible evidence, an issue of fact existed as to whether McInnis gave Mercer honest advice. Therefore, the judgment of the circuit court was affirmed in part, reversed in part, and the matter remanded for further proceedings. View "Cobbs, Allen & Hall, Inc., and CAH Holdings, Inc. v. EPIC Holdings, Inc., and McInnis." on Justia Law

The First Circuit affirmed the judgment of the district court granting Handy Technologies, Inc.'s motion to dismiss this putative class action and to compel individual arbitration, holding that the district court did not err in dismissing Maisha Emmanuel's suit.Emmanuel, who worked as a cleaner for Handy Technologies, Inc., brought this complaint on behalf of individuals who had worked for Handy as cleaners, alleging that Handy had misclassified the putative class members as independent contractors rather than employees, in violation of the Fair Labor Standards Act and Mass. Gen. Laws ch. 151, 1. Handy moved to dismiss and compel arbitration, arguing that the Independent Contractor Agreement that Emmanuel signed required arbitration of the claims at issue. The district court granted Handy's motion to compel arbitration and dismissed Emmanuel's putative class action claim. The First Circuit affirmed, holding (1) the district court did not err in ruling that, under Massachusetts law, Emmanuel had entered into an agreement to arbitrate; and (2) Emmanuel's unconscionability-based challenged to the ruling below failed. View "Emmanuel v. Handy Technologies, Inc." on Justia Law