Justia Contracts Opinion Summaries

Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

The Supreme Court affirmed the ruling of the district court dismissing an employee's gross negligence claim against a coemployee, holding that settlement documents submitted to and approved by the workers' compensation commissioner extinguished the employee's gross negligence claim.Plaintiff, an employee of Lutheran Services in Iowa (LSI) was attacked by one of LSI's clients, causing injuries. Plaintiff filed a workers' compensation claim against LSI and its workers' compensation carrier. The parties settled, and the two settlement documents were approved by the Iowa Workers' Compensation Commissioner. Plaintiff subsequently filed a petition in district court seeking to recover damages from Defendant, Plaintiff's supervisor when he worked at LSI, on a theory of gross negligence. Defendant moved to dismiss the action, relying on release language in the settlement documents. The district court granted summary judgment for Defendant on both contract and statutory grounds. The court of appeals reversed, concluding that a settlement with the commissioner did not release a common law claim of gross negligence against a coemployee. The Supreme Court vacated the court of appeals' judgment and affirmed the district court's summary judgment, holding that the district court properly ruled that, as a matter of contract, the language in the terms of settlement extinguished Plaintiff's gross negligence claim. View "Terry v. Dorothy" on Justia Law

A federal whistleblower statute, 41 U.S.C. 4712, does not render unenforceable an arbitration agreement between plaintiff and his former employer, Intratek. The Fifth Circuit held that the district court correctly enforced the arbitration agreement between plaintiff and Intratek. However, the court held that the district court erred in compelling arbitration of claims not covered by that agreement. Finally, the court held that the district court did not abuse its discretion by denying plaintiff's motion to amend the complaint. Therefore, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Robertson v. Intratek Computer, Inc." on Justia Law

Jenny Craig, Inc. hired Marilyn Flanzman to work as a weight maintenance counselor in 1991. In May 2011, Flanzman signed a document entitled “Arbitration Agreement” in connection with her employment. In February 2017, when the dispute that led to this appeal arose, Flanzman was eighty-two years old. Flanzman’s managers informed her that her hours would be reduced from thirty-five to nineteen hours per week. In April 2017, Flanzman’s managers further reduced her hours to approximately thirteen hours per week. In June 2017, they reduced her hours to three hours per week, at which point she left her employment. Flanzman brought suit, asserting claims for age discrimination, constructive discharge, discriminatory discharge, and harassment. Relying on the Agreement, defendants moved to dismiss the complaint and to compel arbitration. Defendants contended that California law governed the Agreement and that the Agreement was enforceable. The trial court granted the motion to dismiss and ordered the parties to arbitrate Flanzman’s claims. It held that California law governed the arbitration and that the proper forum was assumed to be California. Finding no reversible error, the New Jersey Supreme Court affirmed the trial court's judgment. View "Flanzman v. Jenny Craig, Inc." on Justia Law

William Crenshaw, a tenured professor of English at Erskine College, filed suit claiming he was wrongfully fired. A jury found in favor of Dr. Crenshaw and awarded him $600,000. However, after review of the College's appeal, the South Carolina Supreme Court determined the trial court properly granted Erskine's motion for judgment notwithstanding the verdict because, as a matter of law, Erskine did not breach its contract with Dr. Crenshaw. View "Crenshaw v. Erskine College" on Justia Law

In 2019, Perficient filed suit against its former employee and his new employer, Spaulding, alleging claims including breach of contract and violations of the Defend Trade Secrets Act, and the Missouri Uniform Trade Secrets Act. The district court ruled in favor of Perficient, concluding that the employee violated the covenant-not-to-compete provision in his employment contract. The district court then granted permanent injunctive relief of short duration. The employee and Spaulding timely filed this interlocutory appeal but did not seek a stay of the district court’s order pending appeal. The injunction expired in May 2020 on its own, with the appeal pending and further proceedings stayed in the district court. The Eighth Circuit held that the district court's injunction has become moot and remanded to the district court for further proceedings. Furthermore, none of the traditional exceptions to mootness apply. Accordingly, the court dismissed the appeal. View "Perficient, Inc. v. Munley" on Justia Law

Jarboe was hired by DKD. Shortly after he began working, Jarboe was transferred to Leehan. Following his termination at Leehan, Jarboe brought this wage and hour action individually and on behalf of a putative class against the Hanlees Auto Group, its 12 affiliated dealerships (each us a separate corporate entity), including DKD and Leehan, and three individuals. The defendants moved to compel arbitration based on an employment agreement between Jarboe and DKD. The trial court granted the motion as to 11 of the 12 causes of action against DKD but denied the motion as to the other defendants. The trial court allowed Jarboe’s claim under the Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698, to proceed in court against all defendants. The trial court refused to stay the litigation pending arbitration of Jarboe’s claims against DKD. The court of appeal affirmed, rejecting an argument that the other defendants are entitled to enforce the arbitration agreement between Jarboe and DKD as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel. View "Jarboe v. Hanlees Auto Group" on Justia Law

Travelex filed suit against defendant to enforce an alleged agreement restricting her ability to compete with Travelex by soliciting business from certain customers. The district court granted partial summary judgment in favor of defendant, determining that the purported agreement was unenforceable.The Eighth Circuit reversed and remanded, holding that summary judgment was not warranted. In this case, the district court concluded that the agreement was unenforceable because the 2008 agreement became a nullity when Travelex was acquired by Cover-More and defendant refused to sign a new agreement as a condition of continued employment and was terminated. The court held that defendant's refusal to sign the new agreement nullified the prior agreement. The court also held that defendant's alternative argument, that under New York law restrictive covenants may not be enforced when an employee is dismissed without cause, does not apply because the non-solicitation agreement is not unreasonable as a matter of law. View "Travelex Insurance Services, Inc. v. Barty" on Justia Law

FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive. View "Farmers Edge Inc. v. Farmobile, LLC" on Justia Law

JDC sought a preliminary injunction against its former employee for breach of a non-compete agreement. The district court denied the motion for a preliminary injunction in all its parts and with no concessions.The Fifth Circuit held that the district court, after acknowledging the agreement to be overbroad, erred in declining to adjudicate reformation of the agreement. In this case, the district court should have considered reformation of the agreement in the process of deciding the preliminary injunction motion. Accordingly, the court vacated and remanded to the district court to allow relevant evidence and argument from the parties concerning reformation. Furthermore, the court noted that the district court should then decide what reformation, if any, would be reasonable under Texas law, and proceed to adjudicate the preliminary injunction motion in the light of its findings on reformation. View "Calhoun v. Jack Doheny Companies, Inc." on Justia Law