Justia Contracts Opinion Summaries

Plaintiffs, a class of retirees and their union, filed suit against Constellium after the company unilaterally altered its retiree health benefits program. The district court granted summary judgment to Constellium. The court interpreted Article 15 of the collective bargaining agreement (CBA) using ordinary contract principles and concluded that the plain language of the CBA and summary plan description (SPD) clearly indicated that the retiree health benefits did not vest. The court rejected plaintiffs' assertion that the Cap Letters and other provisions of the CBA evince an intent to vest the retiree health benefits. The court also rejected plaintiffs' remaining claims and affirmed the judgment. View "Barton v. Constellium Rolled Products-Ravenwood, LLC" on Justia Law

A tour company hired an Ronald Burton ("employee") to work the tourist season as one of its representatives at a Fairbanks hotel where he had worked seasonally in the past. During training, hotel management recalled that the employee had been difficult to work with. They told the tour company they did not want him working at their hotel and, in explaining their decision, made several unfounded statements about him. When the tour company was unable to place the employee at a different hotel because of his limited transportation, it terminated his employment. The employee sued the hotel for defamation and for tortious interference with his prospective business relationship with his employer. Following a bench trial the superior court rejected the tortious interference claim based on lack of causation but found that several of the hotel’s statements were defamatory per se, justifying an award of general damages but not special or punitive damages. The court also denied the employee’s motion to amend his complaint to add a new defamation claim based on events that arose mid-trial. The employee appealed. After its review, the Alaska Supreme Court concluded: (1) the superior court did not abuse its discretion in denying the employee’s post-trial motion to amend his complaint; (2) the court did not clearly err in its application of a conditional business privilege or in its finding that the defamation did not cause the employee’s damages; and (3) the court did not clearly err in its award of damages. View "Burton v. Fountainhead Development, Inc." on Justia Law

APS is a broker for the purchase and sale of accounting practices, working through brokers who are treated as independent contractors and are assigned exclusive sales territories. Burford became an APS broker in 2003, under a contract with a “minimum yearly sales volume” requirement. Burford did not meet this requirement for four consecutive years. In 2010, APS’s owner, Holmes spoke with Burford about his poor performance. Burford failed to meet his minimum yearly sales volume requirements again in 2010 and 2011. In 2012, APS terminated Burford’s contract and reassigned his sales territory. Burford filed suit. The district court granted summary judgment in favor of the defendants, reasoning that Burford’s contract was terminable at will. On remand, a jury found for APS. The Seventh Circuit affirmed, rejecting arguments that the trial court erred by supposedly allowing APS to change the legal theory for its defense in violation of the “mend‐the‐hold” doctrine in Illinois law and abused its discretion by denying admission of an exhibit. The court also rejected an argument that the verdict was contrary to the weight of the evidence on whether APS waived its right to enforce the minimum sales requirement. View "Estate of Burford v. Accounting Practice Sales, Inc" on Justia Law

After a Machine Zone (MZ) employee posted a review on Glassdoor's website disclosing confidential information regarding MZ's RTPlatform technology, MZ filed suit against the employee for violation of a nondisclosure agreement signed by all MZ employees. When Glassdoor refused to identify the employee, MZ moved for an order compelling disclosure, which the trial court granted. Glassdoor petitioned for a writ directing the trial court to set aside its order. The court concluded that Glassdoor has standing to assert the employee's interest in maintaining his anonymity as against MZ's efforts to compel Glassdoor to identify him. The court concluded that MZ failed to make a prima facie showing that the employee's statements disclosed confidential information in violation of the nondisclosure agreement, and granted the requested relief. In this case, MZ denied the accuracy of the employee's report without identifying any real confidential information it might be understood to have disclosed. View "Glassdoor, Inc. v. Superior Court" on Justia Law

At issue in this case was the meaning and application of the stockholders’ agreement between Babcock Power Inc. and its former executive, Eric Balles. Babcock terminated Balles’ employment after discovering that he was engaged in an extramarital affair with a female subordinate. Concluding that Balles had been terminated “for cause” under the terms of his stockholders’ agreement with the company, the company’s board of directors “repurchased” Balles’ stock at a minimal price, withheld subsequent dividends, and refused to pay Balles any severance. Balles sought declaratory relief seeking that the stock be returned to him along with the withheld dividends. Balles prevailed at a jury-waived trial on his claim for declaratory relief but was unsuccessful in his request to receive severance pay. The Supreme Judicial Court affirmed, holding (1) the trial judge properly reviewed the board’s decision on a de novo basis; (2) the judge did not err in determining that Balles’ conduct did not constitute “cause” as defined in the stockholders’ agreement; and (3) Balles was not precluded from seeking relief pursuant to the terms of the stockholders’ agreement. View "Balles v. Babcock Power Inc." on Justia Law

After James Walsh’s (Plaintiff) employment with Zurich American Insurance Company (Defendant) was terminated, he filed a complaint against Defendant, alleging breach of contract, willful violation of New Hampshire’s wage and hour law, and other claims based on Defendant’s substantial reduction of his incentive pay for a lucrative deal and failure to pay incentive on another deal. A jury found that Defendant willfully and without good cause withheld the compensation owed to Plaintiff and awarded him double damages and attorney’s fees. The First Circuit vacated the district court’s judgment insofar as it incorporated the jury’s verdict on one deal (the Great American Insurance Company, or GAIC, deal) and affirmed the judgment with respect to the other deal (the Automobile Protection Corp., or APCO, deal), holding (1) Defendant was not entitled to judgment as a matter of law on the breach of contract and wage claims; (2) the jury’s breach and willfulness findings stemming from Defendant’s withholding of incentive compensation for a deal made with GAIC were not in error; but (3) the district court erred in concluding that, if Plaintiff had an enforceable incentive plan when the deal was struck with APCO, Defendant lacked discretion as a matter of law to change Plaintiff’s incentive formula for that deal. Remanded. View "Walsh v. Zurich American Insurance Co." on Justia Law

Plaintiff filed a putative class action against Wet Seal, alleging that the company violated the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. Plaintiff's claim also included a representative claim under the Private Attorneys General Act (PAGA), Lab. Code, § 2699. On appeal, Wet Seal challenges the denial of its motion to compel arbitration, and the grant of plaintiff's motion to compel discovery responses. The court concluded that Wet Seal's motion to compel arbitration was properly denied where the trial court declared the entire arbitration agreement was void and unenforceable based on its determination that the PAGA waiver was invalid, and applied the arbitration agreement's nonseverability provision. Wet Seal also asserts that the trial court should not have reached the merits of the discovery motion while its motion to compel arbitration was undetermined. The court concluded that there is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. Because there is no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, the court dismissed this portion of the appeal. The court affirmed in all other respects. View "Montano v. Wet Seal Retail, Inc." on Justia Law

Before 2013, the surviving spouse of a member of Chattanooga’s Fire and Police Pension Fund could receive benefits after the member died without incurring a proportional reduction in the member’s lifetime benefits. In 2012, the city removed this “default death benefit” for members who were not eligible to retire as of January 1, 2013. Dodd was not eligible to retire on that date and opted for a five-percent reduction in current, lifetime benefits so that his wife could receive an additional benefit upon his death. Dodd sued, asserting claims under the federal Contract Clause, Due Process Clause, and Takings Clause, and Tennessee’s Law of the Land Clause. Dodd also argued that the 2012 amendment was not validly enacted under local law. The district court granted the city summary judgment on all claims. The Sixth Circuit affirmed. Because Dodd does not have a contract or property right to the default death benefit, his constitutional claims fail. Although Dodd’s interest in some future benefits vested after 10 years of service, but Dodd did not become entitled to the default death benefit when he hit 10 years. Dodd’s challenge to the validity of the amendment’s enactment is also without merit. View "Dodd v. City of Chattanooga" on Justia Law

Wilson was an admissions representative, recruiting students to CEC’s culinary arts college. Wilson earned a bonus for each student that he recruited above a threshold who either completed a full course or a year of study. If a representative was terminated, he was entitled only to bonuses already earned, not including students “in the pipeline.” CEC reserved the right to “terminate or amend” the contract at any time, for any reason, in its sole discretion. The Education Department released regulations, to become effective in July 2011, prohibiting institutions participating in Title IV student financial aid programs from providing bonuses based on securing enrollment. CEC decided to pay bonuses that were earned as of February 28, 2011, depriving Wilson of bonuses that were in the pipeline. CEC raised the base salary by at least the total of 3% plus 75% of each representative’s previous two years’ bonuses. Wilson sued. The Seventh Circuit remanded, holding that Wilson must prove that CEC exercised its discretion in a manner contrary to the parties' reasonable expectations. On remand, the district court rejected an argument that cost savings, not compliance with the regulations, drove CEC’s decision. There were no cost savings to CEC. The Seventh Circuit affirmed. Even accepting Wilson’s characterization, the evidence is insufficient to allow a jury to reasonably conclude that CEC breached the implied covenant of good faith and fair dealing. View "Wilson v. Career Education Corp." on Justia Law

RiverStone had collective bargaining agreements (CBAs) with the union, requiring RiverStone to contribute a specified dollar amount to specified welfare and pension funds “for each hour for which an employee receives wages under the terms of this Agreement.” RiverStone’s employees voted to decertify the union. RiverStone stopped contributing to the funds, which filed suit under 29 U.S.C. 1145, the Multiemployer Pension Plan Amendments Act of 1980, seeking payment of the contributions that would have been due under the last CBA until its 2015 expiration. The Seventh Circuit affirmed summary judgment in favor of the funds. The CBA made the company’s obligations to the fund survive decertification, and a union is not the only party with standing to enforce an employer’s obligation to contribute to an employee welfare plan. Once multiemployer plans promise benefits to employees, they must pay even if the contributions they expected do not materialize, so “if some employers do not pay, others must make up the difference.” Nothing in the Employee Retirement Income Security Act (ERISA) makes the obligation to contribute depend on the existence of a valid CBA. The CBA became unenforceable by the union when the union was decertified, but the agreement did not cease to exist until its term ended. View "Midwest Operating Engineers Welfare Fund v. Cleveland Quarry" on Justia Law