Justia Contracts Opinion Summaries

A group of drivers sued their employer, Owl, Inc., for breach of contract and violations of the Fair Labor Standards Act (FLSA). They claimed they were not paid the correct hourly rate under their employment contract or overtime wages under the FLSA. The district court granted summary judgment for Owl on the breach of contract claim and limited the damages available to the drivers for the FLSA claim. The parties then settled the FLSA claim for $350,000, and the drivers appealed the district court’s rulings.The district court for the Middle District of Florida granted summary judgment on the breach of contract claim, reasoning that the drivers had agreed to a specific hourly rate, and enforcing a higher rate under the Service Contract Act (SCA) would create a private right of action under the SCA, which does not exist. The court also granted Owl’s motion in limine, limiting the FLSA damages to one-and-a-half times the rate the drivers were actually paid. The drivers settled the FLSA claim but reserved the right to appeal the district court’s rulings.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It held that it had jurisdiction under 28 U.S.C. § 1291 because the district court entered a final judgment on all claims. The court also held that the drivers had standing to challenge the district court’s rulings despite the settlement. On the merits, the Eleventh Circuit affirmed the district court’s summary judgment on the breach of contract claim, holding that the SCA wage was not incorporated into the employment contracts. However, it reversed the district court’s ruling on the FLSA claim, holding that the “regular rate” under the FLSA should include the prevailing wage required by the SCA. The case was remanded for further proceedings consistent with this opinion. View "Perez v. Owl, Inc." on Justia Law

Henry Searcy, Jr. sought certification as an agent under the NFLPA’s 2012 Regulations Governing Contract Advisors but failed the required exam twice. After an arbitrator sided with the NFLPA, Searcy sued the NFLPA, its Executive Director, Prometric LLC, and Prometric’s Vice President and General Counsel. He alleged breach of contract, negligence, negligent misrepresentation, intentional infliction of emotional distress, and tortious interference with a contractual relationship, and sought vacatur of the arbitration award under the FAA.The United States District Court for the District of Columbia dismissed the claims against Prometric Defendants for lack of subject matter jurisdiction and against the NFLPA Defendants for failure to state a claim. On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the dismissal of claims against Prometric Defendants and instructed the District Court to reconsider its dismissal of claims against the NFLPA Defendants, specifically examining whether Section 301 of the LMRA preempted Searcy’s state law claims.Upon further review, the District Court concluded it had jurisdiction and dismissed the claims under Rule 12(b)(6). Searcy appealed again. The United States Court of Appeals for the District of Columbia Circuit held that the District Court erred in finding subject matter jurisdiction over the claims against the NFLPA Defendants. The court determined that Section 301 of the LMRA does not completely preempt Searcy’s state law claims, as these claims do not require interpretation of the NFL-NFLPA Collective Bargaining Agreement. Consequently, the appellate court affirmed the dismissal on different grounds and remanded the case with instructions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). View "Searcy v. Smith" on Justia Law

The case involves a dispute between the law firm Abraham Watkins Nichols Agosto Aziz & Stogner and its former associate, Edward Festeryga. Abraham Watkins terminated Festeryga’s employment after discovering that he attempted to take clients and firm files to a new firm. Abraham Watkins sued Festeryga in Texas state court for conversion, breach of fiduciary duty, and tortious interference with contract. Festeryga moved to dismiss the suit under Texas’s anti-SLAPP statute, the Texas Citizens Participation Act (TCPA), which stayed the expedited discovery sought by Abraham Watkins. Despite agreeing to produce certain documents, Festeryga filed a notice of removal to federal court, claiming diversity jurisdiction as a Canadian citizen.The United States District Court for the Southern District of Texas remanded the case back to state court. The district court did not address whether Festeryga had shown diversity of citizenship but concluded that Festeryga waived his right to remove by participating in state court proceedings, specifically by filing a TCPA motion to dismiss. The district court found that this action demonstrated an intent to invoke the jurisdiction of the state court.The United States Court of Appeals for the Fifth Circuit reviewed the case to determine if it had appellate jurisdiction over the remand order. The court concluded that it did not have jurisdiction, citing its precedent in In re Weaver, which held that waiver-based remand orders are jurisdictional under 28 U.S.C. § 1447(c) and thus unappealable under § 1447(d). The court noted that although it disagreed with the reasoning in Weaver, it was bound by the rule of orderliness to follow the precedent. Consequently, the Fifth Circuit dismissed the appeal for lack of appellate jurisdiction. View "Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga" on Justia Law

Shawn Slezak, a mechanic for Lancaster County, Nebraska, filed a grievance after his performance evaluation for 2021 was completed late and by higher-level supervisors rather than his direct supervisor. The evaluation, which was below the threshold for a merit increase, was delayed due to discrepancies between numerical ratings and written comments. Slezak argued that the late evaluation violated the collective bargaining agreement (CBA) and sought a merit increase.The Lancaster County Personnel Policy Board found that the late evaluation constituted a breach of contract and awarded Slezak a retroactive merit increase. The County challenged this decision, arguing that the remedy was improper since Slezak's evaluation score did not warrant a merit increase. The District Court for Lancaster County agreed with the County, reversing the Board's decision on the grounds that the remedy made Slezak "more than whole" and was inconsistent with the objective of a damages award in a breach of contract case.The Nebraska Supreme Court reviewed the case and affirmed the District Court's decision. The Court held that the Board's remedy was inappropriate because it exceeded the scope of a damages award in a breach of contract case. The Court emphasized that the objective of such an award is to make the injured party whole, not to provide a benefit they would not have received if the contract had been performed. The Court also noted that Slezak's score on the late evaluation was below the threshold required for a merit increase, and thus, the delay in the evaluation did not cause his injury. The Court concluded that the District Court did not err in reversing the Board's decision and affirmed the order. View "Lancaster County v. Slezak" on Justia Law

Dr. Anthony Tufaro, a former Chief of Plastic & Reconstructive Surgery and Professor of Medicine at the University of Oklahoma (OU), filed a lawsuit against OU and three of its doctors after his contract was not renewed. Tufaro alleged that his contract was not renewed because he had exposed various discrepancies and misconduct within OU’s Medical and Dental Colleges. His claims included wrongful termination, First Amendment retaliation, Fourteenth Amendment deprivation of property and liberty, breach of contract, and violation of the Oklahoma Constitution.The case was initially filed in state court but was later removed to federal court. In the federal court, the defendants filed a motion to dismiss, which the court granted in part and denied in part. The court dismissed all the § 1983 claims against OU and the individual defendants in their official capacities, as they were not considered "persons" under § 1983. The court also dismissed the breach of contract claim against OU, as it found that OU had followed the procedures outlined in the Faculty Handbook. However, Tufaro's Burk tort claim against OU survived the motion to dismiss.After discovery, the defendants filed a motion for summary judgment, which the court granted. The court ruled that Tufaro's complaints fell outside the scope of the First Amendment because they were made during his employment as part of his official duties. The court also held that Tufaro failed to demonstrate he was an "at-will" employee, an essential element of the Burk tort claim. Following the entry of summary judgment on all remaining claims, the district court entered final judgment, ending Tufaro’s case. Tufaro appealed several of the district court's rulings. View "Tufaro v. Board of Regents of the University of Oklahoma" on Justia Law

A group of medical providers sued a former employee for breach of an employment agreement. The employee counterclaimed, alleging he was owed unpaid wages and bonuses. The providers initially raised "failure to state a claim" as their sole affirmative defense. However, after nearly four years of litigation, they attempted to argue for the first time that the contract was illegal and therefore void. The lower court found that the providers had waived this affirmative defense and issued a judgment in favor of the employee. The providers appealed, and the Court of Civil Appeals reversed, concluding that the lower court had abused its discretion by refusing to consider the providers' claim of illegality.The Supreme Court of the State of Oklahoma disagreed with the Court of Civil Appeals. It held that the trial judge did not abuse her discretion in striking the providers' last-minute effort to raise a new affirmative defense. The court noted that the providers had failed to raise the illegality defense in their initial responsive pleading and did not seek to amend their answer in a timely manner. Furthermore, the providers did not raise the illegality defense until after the trial court had already awarded summary judgment to the employee on the issue of breach of contract, more than ten months after the close of discovery, more than nine months after the lower court's deadline for filing dispositive motions, and almost four years after the original lawsuit was filed. The court concluded that the record was sufficient to support a finding that the providers' delay was unjustified and prejudicial. The court vacated the opinion of the Court of Civil Appeals, affirmed the trial court's order striking the illegality affirmative defense, and remanded the case to the Court of Civil Appeals to resolve any remaining undecided issues raised in the appeal. View "Tulsa Ambulatory Procedure Center v. Olmstead" on Justia Law

The case involves Bristol SL Holdings, Inc., the successor-in-interest to Sure Haven, Inc., a defunct drug rehabilitation and mental health treatment center, and Cigna Health and Life Insurance Company and Cigna Behavioral Health, Inc. Bristol alleged that Sure Haven's calls to Cigna verifying out-of-network coverage and seeking authorization to provide health services created independent contractual obligations. Cigna, however, denied payment based on fee-forgiving, a practice prohibited by the health plans. Bristol brought state law claims for breach of contract and promissory estoppel against Cigna.The district court initially dismissed Bristol’s claims, but the Ninth Circuit Court of Appeals reversed the dismissal, holding that Bristol had derivative standing to sue for unpaid benefits as Sure Haven’s successor-in-interest. On remand, the district court granted Cigna’s motion for summary judgment, ruling that the Employee Retirement Income Security Act of 1974 (ERISA) preempted Bristol’s state law claims.On appeal, the Ninth Circuit Court of Appeals affirmed the district court's decision. The court held that Bristol’s state law claims were preempted by ERISA because they had both a “reference to” and an “impermissible connection with” the ERISA plans that Cigna administered. The court reasoned that Bristol’s claims were not independent of an ERISA plan because they concerned the denial of reimbursement to patients who were covered under such plans. The court also held that allowing liability on Bristol’s state law claims would interfere with nationally uniform plan administration, a central matter of plan administration. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law

The case revolves around a dispute between a real estate salesperson, James Kennedy II, and a real estate broker, Weichert Co. Kennedy worked for Weichert from 2012 to 2018 under two written agreements that identified him as an independent contractor. After his affiliation with Weichert ended, Kennedy filed a class action lawsuit alleging that Weichert violated the Wage Payment Law (WPL) by misclassifying him and other real estate salespersons as independent contractors and unlawfully deducting fees and expenses from their commissions.The trial court denied Weichert's motion to dismiss Kennedy's complaint, ruling that the question of Kennedy's status was not determined by the parties' agreement, but by the legal standard that generally governs employee classification issues under the WPL, known as the "ABC" test. The Appellate Division affirmed this decision, but noted that the 2018 amendments to the New Jersey Real Estate License Act, or the Brokers Act, authorized real estate brokers and salespersons to enter into independent contractor relationships. However, it held that these amendments applied prospectively and thus governed only a brief portion of Kennedy's claim.The Supreme Court of New Jersey reversed the lower courts' decisions. It held that the parties' agreement to enter into an independent contractor business affiliation is enforceable under N.J.S.A. 45:15-3.2, and Kennedy, as an independent contractor, was not subject to the WPL pursuant to N.J.S.A. 34:11-4.1(b). Therefore, the trial court erred when it denied Weichert’s motion to dismiss the complaint. The case was remanded for the dismissal of Kennedy’s complaint. View "Kennedy v. Weichert Co." on Justia Law

The case involves Songie Adebiyi, a former Vice President of Student Services at South Suburban College in Illinois, who was terminated in 2019 due to alleged performance issues. Adebiyi claimed that her termination was in retaliation for filing a charge with the United States Equal Employment Opportunity Commission and the Illinois Department of Human Rights. She sued the college and its president, alleging racial discrimination and retaliation under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, as well as breach of contract.The United States District Court for the Northern District of Illinois granted summary judgment to the college and its president, ruling that Adebiyi failed to show a causal link between her charge of discrimination and her termination. The court found that the evidence did not support Adebiyi’s retaliation claim. Adebiyi appealed the decision, arguing that the district court erred in dismissing her Title VII retaliation claim and abused its discretion when it denied her motion to amend the complaint and seek more discovery.The United States Court of Appeals for the Seventh Circuit affirmed the judgment of the district court. The appellate court agreed with the lower court's finding that Adebiyi failed to demonstrate a causal link between her protected activity and the adverse employment action. The court found no evidence of pretext in the college's reasons for termination or suspicious timing between Adebiyi's filing of her EEOC and IDHR charge and her termination. The court also found no abuse of discretion in the district court's denial of Adebiyi's motion to file an amended complaint and take additional discovery. View "Adebiyi v. South Suburban College" on Justia Law

The United States Court of Appeals for the Seventh Circuit heard an appeal from Bulk Transport Corp. against Teamsters Union No. 142 Pension Fund and its Trustees. The dispute originated from two collective-bargaining agreements between Bulk Transport and Teamsters Local 142, active from 2003 to 2006. The Union insisted that Bulk Transport apply one such agreement, the Steel Mill Addendum, to non-steel mill work (LISCO work), which Bulk Transport initially did, subsequently making pension contributions on behalf of the LISCO workers. However, when Bulk Transport lost the LISCO contract, they ceased these contributions, leading to the Pension Fund assessing a withdrawal liability of about $2 million under the Multiemployer Pension Plan Amendments Act (MPPAA).After arbitration, Bulk Transport paid but demanded a review of the decision. The district court agreed with the arbitrator's ruling that Bulk Transport had adopted the Addendum by conduct, and thus the Pension Fund was entitled to the withdrawal liability. The district court also denied Bulk Transport's request for a refund.The Seventh Circuit, however, reversed the district court's decision. It held that the written agreement, not the practice or conduct, should dictate the terms of pension contributions to multi-employer plans. The written agreement in this case did not cover the LISCO work, and the court rejected the argument that Bulk Transport's conduct altered the substantive terms of the agreement. The court held that the writings were conclusive and that employers and unions could not opt-out of the requirements orally or through their course of conduct. The court affirmed the district court's denial of attorney's fees for the Pension Fund and remanded the case with instructions to order the Pension Fund to repay the withdrawal liability it collected from Bulk Transport. View "Bulk Transport, Corp. v. Teamsters Union Local 142" on Justia Law