Justia Contracts Opinion Summaries

The Supreme Court affirmed the judgment of the district court denying West Corporation's motion for judgment notwithstanding the verdict and motion for a new trial after the jury found that West breached contracts with a former employee, Kenneth Marr, holding that there was no reversible error on the part of the district court.A few months after his resignation from West, Marr brought this action alleging that he was contractually entitled to compensation that West had refused to pay. The jury entered a verdict in favor of Marr, finding West liable for damages in the amount of $400,540. The Supreme Court affirmed, holding that there was no prejudicial error in the district court's evidentiary rulings and that the district court did not err in denying West's motions for judgment notwithstanding the verdict and for a new trial. View "Marr v. West Corp." on Justia Law

In 2013, Bullock, a civilian employed by the Army, received a formal letter of reprimand from her supervisor. Bullock filed an EEO claim alleging sex discrimination and retaliation. In proceedings before the EEOC’s mediation program, Bullock was represented by her attorney, Elliott; the Army was represented by its management official Shipley, and attorney Lynch. According to Bullock, the parties reached agreement as to seven non-monetary demands on July 29 and reached an oral agreement regarding her monetary demands on August 27, 2015. The mediating administrative judge sent an email to the parties asking for the “agency’s understanding of the provisions of the settlement agreement” and noting that, “[o]nce we confirm that the parties are in complete agreement, the agency can begin work on the written settlement agreement.”. No written settlement agreement was executed. In September, the Army “rescinded its settlement offer.” Bullock continued to press her claims before the EEOC for a year, then filed a breach of contract claim regarding an oral settlement agreement.The Federal Circuit reversed the dismissal of the complaint, rejecting an argument that EEOC and Army regulations, requiring that settlement agreements be in writing, preclude enforcement of oral settlement agreements. The court remanded for a determination of whether the representative of the Army had the authority to enter a settlement agreement and whether the parties actually reached an agreement. View "Bullock v. United States" on Justia Law

After plaintiff left her employment at HKFS, she filed suit seeking a declaratory judgment that the restrictive covenants in her various employment contracts were unenforceable. HFKS brought counterclaims against plaintiff and a third-party complaint against plaintiff's new employer, Mariner.The Eighth Circuit reversed the district court's order preliminarily enjoining plaintiff from breaching the non-compete and nonsolicitation provisions in her employment contracts. The court agreed with plaintiff and Mariner that the non-compete provision did not survive her termination of the Employment Agreement. Because HKFS is not likely to prevail on the merits of its breach of contract claim with respect to the non-compete provision, the district court erred in enjoining plaintiff from violating that provision. In regard to the non-solicitation provision in plaintiff's contract, the court concluded that South Dakota law applies under the agreement's choice-of-law provision, and such provisions cannot prevent a former employee from accepting unsolicited business. Therefore, the non-solicitation agreement, in part, violates South Dakota law and public policy and it is at least in part unenforceable. The court remanded for further proceedings. View "Miller v. Honkamp Krueger Financial Services, Inc." on Justia Law

Lim, formerly a TForce California delivery driver, alleged that TForce employs delivery drivers and misclassifies them as independent contractors in violation of California law. The drivers sign an Independent Contractor Operating Agreement, providing that the agreement is governed by the laws of Texas, that “any legal proceedings … shall be filed and/or maintained in Dallas, Texas,” that all disputes “arising under, out of, or relating to this Agreement … including any claims or disputes arising under any state or federal laws, statutes or regulations, … including the arbitrability of disputes … shall be fully resolved by arbitration," that any arbitration will be governed by the Commercial Arbitration Rules of the American Arbitration Association, that class actions are prohibited, and that the parties shall share the costs except in the case of substantial financial hardship--the prevailing party is entitled to recover its attorney’s fees and costs.The Ninth Circuit affirmed the denial of a motion to compel arbitration, referring to the Agreement as an adhesion contract. Based on the cost-splitting, fee-shifting, and Texas venue provisions, the district court correctly concluded the delegation clause, which requires the arbitrator to determine the gateway issue of arbitrability, the agreement was substantively unconscionable as to Lim. View "Lim v. TForce Logistics, LLC" on Justia Law

CRST filed suit alleging that Swift wrongfully recruited and hired long-haul truck drivers who were "under contract" with CRST. Ruling on post-verdict motions, the district court upheld the intentional interference with contracts award, vacated the unjust enrichment award because it was predicated on a theory of damages rejected in the court's summary judgment rulings, and remitted the punitive damages to $3 million.The Eighth Circuit reversed the district court's post-verdict order upholding the intentional interference verdict because it relied upon CRST's theory of liability that the court rejected in CRST Expedited, Inc. v. TransAm Trucking, Inc., 960 F.3d 499 (8th Cir. 2020). The court explained that the proper focus is on intentionally and improperly causing the employee to violate his or her covenant not to compete, not merely on the hiring of a competitor's at-will employee to further the actor's legitimate competitive interests. After careful review of the record, the court concluded that it must reverse with instructions to dismiss because, for multiple reasons, CRST failed to prove its interference with contract claim and therefore its claim for unjust enrichment as well. The court affirmed the amended judgment in favor of Swift on CRST's unjust enrichment claim. View "CRST Expedited, Inc. v. Swift Transportation Co." on Justia Law

The Union and AT&T entered into a contract governing certification of the Union to represent non-management employees and the relationship between the parties, requiring the parties to arbitrate disputes over “the description of an appropriate unit for bargaining” and the definition of “nonmanagement” employees. All other disputes arising under the contract “shall not be subject to arbitration.” Disputes that are subject to arbitration must “be submitted to arbitration administered by, and in accordance with, the rules of the American Arbitration Association (AAA).” The AAA’s Labor Arbitration Rules provide that the arbitrator shall have the power to rule on his own jurisdiction, “including any objections with respect to the existence, scope, or validity of the arbitration agreement.” After AT&T acquired Time Warner, the Union initiated discussions about “appropriate potential bargaining units in the newly acquired company.” The parties could not reach an agreement. The Union sought to compel arbitration. The district court dismissed, finding the dispute did not lie within the categories of arbitrable disputes, and that it (as opposed to the arbitrator) could make that threshold determination.The D.C. Circuit vacated. The agreement delegates threshold questions of arbitrability to an arbitrator. The question of whether the parties’ dispute falls within the contract’s arbitration clause, then, is for an arbitrator, not a court, to decide. The district court lacked jurisdiction to determine whether the dispute must be submitted to arbitration. View "Communications Workers of America, AFL-CIO v. AT&T Inc." on Justia Law

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