Justia Contracts Opinion Summaries

In this case concerning two restrictive clauses within a non-compete agreement the Supreme Court affirmed in part and reversed in part the entry of summary judgment in favor of Lorna Gagnon, a former employee of Prudential Locations, LLC (Locations), holding that summary judgment was improper as to one agent as to a non-solicitation clause.The non-compete agreement in this case restricted Gagnon from establishing her own brokerage firm in the state within one year after terminating her employment with Locations and from soliciting persons "employed by" or "affiliated with" Locations. The two restrictive clauses at issue were a non-compete clause and a non-solicitation clause. The Supreme Court vacated the judgments of the lower courts, holding (1) summary judgment was properly granted in favor of Gagnon as to the non-compete clause because the clause was not ancillary to a legitimate purpose; and (2) a genuine issue of material fact existed as to one agent with respect to the non-solicitation clause. View "Prudential Locations, LLC v. Gagnon" on Justia Law

In response to questions certified to it by the United States Court of Appeals for the Second Circuit, the Court of Appeals held that inferences of vesting of retiree health insurance rights when construing a collective bargaining agreement (CBA) are inconsistent with New York's established contract interpretation principles.In Kolbe v. Tibbetts, the Court of Appeals left open the question of whether a New York court should infer vesting of retiree health insurance rights when construing a collective bargaining agreement (CBA). The Supreme Court rejected such inferences as incompatible with ordinary contract principles under federal law, thus repudiating International Union, United Automobile, Aerospace, & Agriculture Implement Workers of America v. Yard-Man, Inc., 716 F2d 1476 (6th Cir 1983). In answering the questions certified to it in this case, the Court of Appeals (1) held that it maintains its traditional contract interpretation principles, including those set forth in Kolbe; but (2) clarified that New York's contract law does not recognize Yard-Man-type inferences. View "Donohue v. Cuomo" on Justia Law

The First Circuit reversed the judgment of the district court in this dispute between the International Brotherhood of Electrical Workers, Local 103 (the Union) and Johnson Controls Security Solutions, LLC over Johnson Controls' compliance with the terms of the parties' collective bargaining agreement (CBA), holding that the district court erred by failing to order arbitration as called for by a clause in the CBA.Johnson Controls' Norwood, Massachusetts facility entered into a CBA with the Union, a labor organization that represented employees of the company, that contained an arbitration clause. The Union filed a grievance concerning Johnson Controls' reduction in its matching contribution to the company's 401(k) plan, which Johnson Controls denied. When the Union filed a demand for arbitration Johnson Controls brought this lawsuit seeking a declaratory judgment that the dispute was not arbitrable under the CBA. The district court concluded that the dispute was not arbitrable. The First Circuit reversed, holding that nothing in the record showed that the parties intended to exclude this type of dispute from the scope of the arbitration clause. View "Johnson Controls Security Solutions, LLC v. Int'l Brotherhood of Electrical Workers, Local 103" on Justia Law

The Supreme Court reversed the judgment of the district court ruling that Western Wyoming Beverages, Inc. (WWB) would likely succeed on the merits of its claim that Jorge Malave, its employee, had breached his noncompete agreement that the WWB would suffer irreparable harm of Malave were not enjoined from continuing to work for WWB's competitor, holding that the district court erred.The district court concluded that there was a valid and reasonable noncompete agreement between the parties and that WWB would likely succeed on the merits of its claim that Malave had violated the agreement and would suffer possible irreparable injury if no injunction were entered. The Supreme Court reversed, holding that WWB did not meet its burden of proving probable success on the merits of the reasonableness of its noncompete agreement with Malave. View "Malave v. Western Wyoming Beverages, Inc." on Justia Law

The Supreme Court affirmed the judgment of the superior court in favor of Pascoag Fire District and Pascoag Fire and Rescue Association (the district) and International Association of Firefighters, Local 4908 (the union) (collectively, Defendants) in this action alleging breach of duty of fair representation and breach of contract, holding that there was no error.Plaintiff, a trained firefighter and emergency medical technician who worked for the district, brought this action after he was terminated based on his conduct and performance during a rescue run. Plaintiff began the grievance process between the district and the union, but the union informed Plaintiff that it had decided not to seek arbitration for his grievance. Plaintiff then brought this complaint. The trial court granted judgment in favor of Defendants. The Supreme Court affirmed, holding that there was no error in the trial justice's grant of summary judgment. View "Eddy v. Pascoag Fire District" on Justia Law

The Supreme Court vacated the judgment of the circuit court reversing the decision of the Board of Education of the Jefferson City Public School District to terminate Tammy Ferry's contract with the District, holding that the Board had the authority to terminate the contract.The Board decided to terminate Ferry's contract after she transferred confidential student information from the District's Google for Education account to her personal Google account. The circuit court vacated the Board's decision, finding that Ferry had not "disclosed" confidential student information, as that term is defined in the Family Educational Rights and Privacy Act of 1974 (FERA), 20 U.S.C. 1232g. The Supreme Court vacated the circuit court's judgment, holding (1) the Board's findings that Ferry violated the Board's policies and procedure and did so willfully were supported by competent and substantial evidence; and (2) the Teacher Tenure Act authorized the Board to terminate Ferry's indefinite contract with the District. View "Ferry v. Board of Education of Jefferson City Public School District" on Justia Law

EBEWC, a beauty salon, was charged with violating 29 U.S.C. 158(a)(1) and (3), by implying that employees would be discharged if they engaged in union or protected concerted activity, soliciting employee assistance in ascertaining union support, issuing a handbook rule subjecting employees to discipline for gossiping or complaining about EBEWC’s rules or procedures, and discharging an employee for engaging in concerted employee activities. EBEWC signed a settlement agreement. The National Labor Relations Board concluded EBEWC violated that agreement by failing to “fully comply” with a provision requiring EBEWC to text the requisite notice to its employees. Pursuant to the settlement agreement, the Board then found the complaint's allegations true, made factual findings and conclusions of law consistent with those allegations, and granted a “full remedy” for the violations.The Third Circuit granted EBEWC’s petition for review and denied the Board’s application for enforcement. The Board took drastic action although EBEWC purportedly “defaulted” merely by sending the requisite notice to its employees by e-mail instead of by text message. The settlement agreement explicitly provided for notice by text but there is no indication that texting, as opposed to some other method of electronic communication, had any real significance to EBEWC, its employees, or the Board. EBEWC otherwise fully complied with the agreement. The Board overreached and acted punitively. View "East Brunswick European Wax Center, LLC v. National Labor Relations Board" on Justia Law

Defendants Pinnacle Property Management Services, LLC (Pinnacle) and Jennifer Stewart (Stewart) appealed a trial court’s order denying their motion to compel arbitration. The court denied the motion because it determined the arbitration agreement was procedurally and substantively unconscionable. As to the former, the court noted the agreement was unconscionable because plaintiff Anthony De Leon was required to sign the arbitration agreement as a precondition to his employment. As to the latter, the court found the agreement was substantively unconscionable because of its limits on discovery and because it shortened the statute of limitations to one year on all claims. On appeal, defendants contended the arbitration agreement had low procedural unconscionability and contained only one substantively unconscionable provision: the statute of limitations provision. They alternatively claimed the court erred by failing to sever any unconscionable provisions. After careful consideration of the agreement at issue, the Court of Appeal agreed with the court’s unconscionability findings. Further, the Court held the trial court also did not abuse its discretion by refusing to sever any portion of the arbitration agreement. View "De Leon v. Pinnacle Property Management Services, LLC" on Justia Law

The South Carolina Supreme Court accepted three certified questions from the United States District Court for the District of South Carolina. In this case, Curt Hall sued UBS Financial Services Inc. (UBS) (his former employer) and Mary Reid, a former co-worker, seeking to hold them liable for damages he allegedly incurred when he was fired by UBS. Hall's claims against UBS included one for breach of the implied covenant of good faith and fair dealing, and Hall's claims against Reid included one for tortious interference with contractual relations. The certified questions concerned the nature of Hall's at-will employment and the viability of Hall's causes of action in the employment at-will context. Hall did not concede he was an at-will employee. The Supreme Court held: (1) terminable at-will employment relationships are contractual in nature as a matter of law; (2a) the implied covenant of good faith and fair dealing may arise in the context of terminable-at-will employment relationships; (2b) an employer's termination of an at-will employee does not constitute a breach of the relationship such that it may give rise to a claim by the former employee against the employer for breach of the implied covenant of good faith and fair dealing; (3) potential liability extends to third parties who are not fellow employees of the terminated employee. The Court issued a caveat to its responses to the district court's questions: it answered all questions under the assumption that no exception to the doctrine of at-will employment applies "our answers to these questions do not alter the established rule that, as long as an exception does not apply, an employer may terminate an at-will employee for any reason without incurring liability." View "Hall v. UBS Financial Services Inc." on Justia Law

Elation sued Fenn and Shi for breach of a nondisclosure agreement (NDA) (against Shi only) entered during the course of Shi’s prior employment with Elation and breach of a confidential settlement agreement and mutual release (Settlement Agreement) (against both defendants) entered to resolve a prior action between the parties. The defendants filed a cross-complaint, alleging Elation’s breach of the Settlement Agreement. Elation admitted to liability and stipulated to $10,000 in liquidated damages on the cross-claim for breach of the Settlement Agreement. A jury found that Shi had breached the NDA and harmed Elation, and awarded Elation $10,000 in damages. The court entered judgment notwithstanding the verdict (JNOV), denied Elation’s motion for injunctive relief, and awarded defendants $700,000 in attorney fees.The court of appeal reversed in part. The trial court should have awarded Elation nominal damages on its NDA claim, as defendants’ JNOV motion did not challenge the jury’s finding that Shi breached the NDA. Substantial evidence did not support the jury’s finding in Elation’s favor on its Settlement Agreement claim. The court affirmed the order granting JNOV as to Elation’s Settlement Agreement claim and vacated the award of attorney fees. View "Elation Systems, Inc. v. Fenn Bridge LLC" on Justia Law