Justia Contracts Opinion Summaries

Judge had been principal of Oaklyn Elementary School for about three years when she was stopped by a Pennsylvania State Trooper for failing to signal. After acknowledging she had been drinking, Judge asked the trooper to release her because she was concerned about her job. The trooper took Judge to the barracks, where she was given a test, which showed that Judge’s blood alcohol content was .332, more than four times the legal limit. Three weeks later, Judge encountered Superintendent Kelley, who had been advised by school board members about the traffic stop. Kelley wrote: If you do choose to resign then I will offer a neutral reference in the future . . . . [I]n the alternative, if you decide not to resign and DUI charges are filed against you then I will be forced to issue a written statement of charges for dismissal. Judge did not contact a lawyer, although she had retained counsel after her arrest. The next day, Judge presented a letter of resignation, while stating she “was not even charged with DUI yet.” Kelley then handed Judge court documents indicating that she had been charged. Judge sued, asserting deprivations of procedural and substantive due process, violation of equal protection, and breach of contract, based on "constructive discharge." The Third Circuit affirmed the rejection of all her claims: Judge was presented with a reasonable alternative to immediate resignation and resigned voluntarily. View "Judge v. Shikellamy School District" on Justia Law

This appeal related to a purported agreement resolving a lawsuit between Kevin Seward and Musick Auction, LLC (“Musick”). Seward claimed that the parties entered into a binding oral settlement agreement and he moved to enforce the agreement. The district court granted Seward’s motion. Musick contended on appeal the district court erred in several respects when it held that the parties had entered into a binding settlement agreement. Finding no reversible error in the district court's judgment, the Idaho Supreme Court affirmed. View "Seward v. Musick Auction, LLC" on Justia Law

Local Union 3-G represents employees at Kellogg’s Battle Creek plant and is affiliated with the International Union, which represents employees at additional Kellogg’s plants. “Regular” employees and “non-regular” employees, including casual employees, make up the 3-G bargaining unit. There is a Master Agreement between Kellogg, the International Union, and local unions at four plants, which have Supplemental Agreements. A Memorandum of Agreement, appended to the Battle Creek Supplemental Agreement, states that the Supplemental and Master Agreements will not apply to casual employees and the Company may terminate casual employees without being subject to the grievance procedure. A 2015 Master Agreement “established wage rates, a signing ratification bonus for all employees, the establishment of a transitional employee classification to replace casual employees, and other changes" for all Battle Creek bargaining unit employees. After the ratification vote, Kellogg refused to pay a ratification bonus to casual employees, seasonal employees, and some regular employees. The parties went through the grievance procedure, but Kellogg refused to arbitrate, arguing that the arbitration provisions do not apply to casual employees. The Sixth Circuit previously held that arbitration provisions in the “Memphis Supplemental Agreement” did not cover casual employees. The district court determined that judicial estoppel did not apply to the Battle Creek action and granted the motion to compel arbitration. The Sixth Circuit affirmed, The Agreement has a broad arbitration clause, so the presumption of arbitrability is particularly applicable. View "Bakery, Confectionery, Tobacco Workers and Grain Millers International Union AFL-CIO v. Kellogg Co." on Justia Law

The Ninth Circuit reversed the district court's grant of summary judgment for Paramount in an action under section 301 of the Labor Management Relations Act. AFM filed suit alleging breach of Article 3 of the Basic Theatrical Motion Picture Agreement, a collective bargaining agreement, in connection with the motion picture, Same Kind of Different As Me, which was scored in Slovakia.The panel held that the district court misinterpreted Article 3 to apply only if a signatory producer employs the cast and crew shooting the picture; Article 3 functions as a work preservation provision that dictates when a signatory has to hire those musicians; and Article 3 applied when a signatory studio produces a motion picture and has authority over the hiring and employment of scoring musicians. The panel held that there was a disputed question of fact as to whether Paramount produced the movie and had sufficient authority over the hiring of scoring musicians such that Article 3 applied. Finally, the panel rejected Paramount's affirmative defense that Article 3 violated the National Labor Relations Act's "hot cargo" prohibition and reversed two of the district court's evidentiary rulings. View "American Federation of Musicians of the United States and Canada v. Paramount Pictures Corp." on Justia Law

The Church’s Deacons recommended Lee as pastor under a 20-year agreement, subject to for-cause early termination. If the Church removed Lee without cause, it would be required to pay Lee salary and benefits for the unexpired term. The agreement specified that Lee could be terminated for cause if he “commits any serious moral or criminal offense” or if he became incapacitated; it allowed either party to terminate upon “material breach.” During a 2013 congregation meeting, Lee stated that “just cause” would occur if the Church was "not growing ... stagnant, ... not a better place,” and that “if [he did not] perform [his] duties well, [he would be] out.” Based on these statements, the congregation approved the agreement. In December 2014, Church leaders recommended voiding the employment contract, reporting that from 2013-14, there was a 39% decline in offerings, a 32% drop in Sunday worship attendance, a 61% decrease in registered members, a doubling of expenditures, and a decline in the quality of community outreach. Lee had scheduled but cancelled several meetings to discuss these issues. The congregation voted to terminate Lee’s employment. Lee sued, alleging breach of contract due to termination without cause, seeking $2,643,996.40 in damages. The Third Circuit affirmed rejection of the suit on summary judgment. Adjudication of Lee’s claim would impermissibly entangle the court in religious doctrine in violation of the First Amendment’s Establishment Clause. View "Lee v. Sixth Mount Zion Baptist Church of Pittsburgh" on Justia Law

Employees at Akers's manufacturing facility were union members, represented by USW under collective bargaining agreements (CBAs). In 2016, Akers was acquired by Ampco. Former Akers employees who had retired but were under age 65 (not eligible for Medicare) then paid $195 per month for their healthcare. Ampco planned to eliminate that benefit for those who had retired before March 2015. The new plan would require retirees to purchase health insurance on the private market and then be reimbursed up to $500 per month for individuals ($700 for families), for five years. Retirees cited a February 2015 memorandum of agreement (MOA), providing that “[c]urrent retirees will remain on their existing Plan ($195.00 monthly premium).” USW filed a grievance. Ampco rejected the grievance, claiming that the Union no longer represented the retirees. USW and Cup, who retired from the plant in 2014, on behalf of a class, filed a non-substantive claim compelling arbitration under the Labor Management Relations Act, 29 U.S.C. 185; a claim to enforce the CBA; and, alternatively, a claim under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). Having ruled in the Union’s favor on the arbitration count, the court dismissed the substantive counts. The Third Circuit stayed enforcement of the arbitration order, then concluded that the dispute is not subject to arbitration under the CBA because retiree health benefits are not covered by the CBA. Retiree health benefits are discussed in the MOA, which was never incorporated into the CBA; whether the omission was was intentional or inadvertent, the contracts must be enforced as written. View "Cup v. Ampco Pittsburgh Corp" on Justia Law

The Supreme Court affirmed the district court’s order granting summary judgment in favor of Taco John’s International, Inc. (TJI), concluding that TJI properly terminated Plaintiffs, two corporate executives, for violating their employment agreements.Plaintiffs brought this action asserting breach of the employment agreements and seeking damages in excess of $1 million each. The district court granted summary judgment for TJI. The Supreme Court affirmed, holding (1) the undisputed facts showed that Plaintiffs breached the employment agreements by forming a new company while still employed as senior executives at TJI and pursuing a franchise opportunity unrelated to TJI; (2) the employment agreements unambiguously prohibited Plaintiffs from forming a new company and seeking other franchise opportunities while employed by TJI, and therefore, TJI properly terminated Plaintiffs’ employment for cause; and (3) TJI’s president and chief executive officer did not have apparent authority to allow Plaintiffs’ participation in a business venture unrelated to TJI and contrary to the terms of their employment agreements. View "Eby v. Taco John's International, Inc." on Justia Law

In 2008, Midwest hired Plaintiff. In 2015, Plaintiff informed Midwest that she was pregnant. Plaintiff claims her supervisor made negative comments and was annoyed by Plaintiff’s absences for pre-natal appointments. About three months later, Plaintiff was terminated “[d]espite … no record of discipline.” Plaintiff testified that Midwest’s president presented Plaintiff with an agreement and said that she “needed to sign then if [she] wanted any severance,” that she felt bullied and signed the agreement, which provided that Plaintiff would waive “any and all past, current and future claims” against Midwest. Plaintiff later stated that she assumed that "claims" referred to unpaid wages or benefits. Midwest paid and Plaintiff accepted $4,000.Plaintiff filed a charge with the EEOC, then filed suit, alleging that Midwest terminated her because of her pregnancy, that Midwest has a sex-segregated workforce, and discrimination in compensation, citing Title VII, 42 U.S.C. 2000e; the Pregnancy Discrimination Act, 42 U.S.C. 2000e(k); 42 U.S.C. 1981a; Michigan's Elliot-Larsen Civil Rights Act; and the Equal Pay Act, 29 U.S.C. 206(d). After filing, Plaintiff returned the $4,00, saying that she was “rescinding the severance agreement.” The Sixth Circuit reversed summary judgment entered in favor of the Defendant. Under the tender-back doctrine, contracts tainted by mistake, duress, or even fraud are voidable at the option of the innocent party if the innocent party first tenders back any benefits received; if she fails to do so within a reasonable time after learning of her rights, she ratifies the contract. The doctrine does not apply to claims under Title VII and the Equal Pay Act. View "McClellan v. Midwest Machining, Inc." on Justia Law

Lacagnina worked for Comprehend as vice president of business development, 2012-2013, when he was “abruptly” terminated. Lacgnina claims that he was fraudulently induced to enter into an employment agreement with Comprehend by false representations made to him by its founders, Morrison and Gardner. A jury awarded Lacagnina a total of $556,446 in damages, including $226,446 in damages for fraud and $75,000 for emotional distress. The court granted the defendants judgment notwithstanding the verdict on the fraud claim on the ground that Lacagnina was not damaged by the alleged fraud, and entered an amended judgment of $255,000. The court of appeal reversed in part. An employer who induces an employee to enter into an employment contract by intentionally promising compensation terms the employer never intended to honor may not avoid tort liability for fraudulent inducement of contract based on the contract’s inclusion of an “at-will’ provision that allows the employer to fire the employee at any time for any reason. The court rejected Lacagnina’s contention that an employee who recovers a judgment against an employee for lost compensation has suffered a “theft” of “labor” for which he is entitled to recover treble damages and attorneys’ fees under Penal Code Section 496(c). View "Lacagnina v. Comprehend Systems, Inc." on Justia Law

In this dispute over a noncompete agreement (NCA) the Supreme Court reaffirmed its previous holdings that an NCA must be limited to the geographical areas in which an employer has particular business interests and emphasized that this precedent remains applicable in instances where the NCA imposes a nationwide restriction on the former employee. The Court further clarified that an employer seeking a preliminary injunction enforcing an NCA bears the burden of making a prima facie showing of the NCA’s reasonableness.In this dispute over an NCA, the Supreme Court reversed the district court’s grant of the motion for a preliminary injunction filed by Respondent, an employer, seeking to enforce the terms of a noncompete agreement (NCA) against Appellant, a former employee, holding that Respondent failed to make a prima facie showing that the NCA was reasonable by showing its restrictions did not extend beyond date geographical areas in which Respondent conducted business. View "Shores v. Global Experience Specialists, Inc." on Justia Law