Justia Contracts Opinion Summaries

In 2014, Lend Lease, the construction manager of the Chicago River Point Tower Project, hired Cives as a subcontractor. Cives hired Midwest Steel. Midwest had, years before, hired AES to supply Midwest with additional workers, who were co‐employed by Midwest and AES. Lend Lease entered into a “contractor-controlled insurance program” with Starr Liability with a $500,000 deductible. All subcontractors were to join in the policy. AES had, several years earlier, obtained workers’ compensation for its workers from TIC, so that injured AES‐Midwest workers could obtain workers’ compensation from either Starr (or Lend Lease under the deductible) or TIC. Four ironworkers, jointly employed by Midwest and AES and performing work for Midwest were injured on the job and sought workers’ compensation. The claims exceeded $500,000, so Lend Lease had to pay its full deductible. Starr paid the remaining claims. Lend Lease filed suit against TIC, AES’s insurer, and AES, seeking reimbursement of the $500,000. The district court dismissed. The Seventh Circuit affirmed. Lend Lease made a deal with Starr and is bound by it. The court rejected an argument that AES has been unjustly enriched; AES was not obligated to purchase an insurance policy that would cover Lend Lease's deductible. View "Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc." on Justia Law

Before accepting a transfer to a Bridgestone facility in North Carolina, Deschamps expressed concern about losing pension credit for his 10 years of employment with Bridgestone in Canada. After receiving assurances from Bridgestone’s management team that he would keep his pension credit, Deschamps accepted the position. For several years, Deschamps received written materials confirming that his date of service for pension purposes would be August 1983. He turned down employment with a competitor at a higher salary because of the purportedly higher pension benefits he would receive at Bridgestone. In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1993, the date he began working at the American plant. After failed attempts to appeal this change through Bridgestone’s internal procedures, Deschamps filed suit, alleging equitable estoppel, breach of fiduciary duty, and an anti-cutback violation of ERISA, 29 U.S.C. 1054(g). The Sixth Circuit affirmed summary judgment for Deschamps on all three claims. The text of the plan “is at worst ambiguous, but at best, favors Deschamps’s argument that he was a covered employee in 1983” and, as a result of the change in the interpretation of this provision that excluded foreign employees from being classified as covered employees, Deschamps’s benefits were decreased. View "Deschamps v. Bridgestone Americas, Inc." on Justia Law

After Lisa Warrington accepted an offer of employment with Great Falls Clinic (the Clinic), she signed a written employment contract. On Warrington’s last day at her former job, the Clinic informed her it would not employ her after all. Warrington filed an action against the Clinic, asserting breach of contract, promissory estoppel, and breach of the covenant of good faith and fair dealing. The district court granted summary judgment on the breach of contract claim and found that the Wrongful Discharge From Employment Act (the Act) did not apply. The Clinic petitioned the Supreme Court for a writ of supervisory control, arguing that the district court made a mistake of law by concluding that the Act did not apply to the relationship between Warrington and the Clinic. The Supreme Court accepted the petition for supervisory control, affirmed the district court’s determination that the Act does not apply to the relationship between the parties, and affirmed the district court’s order granting summary judgment to Warrington on the breach of contract claim. View "Great Falls Clinic LLP v. Eighth Judicial Dist. Court" on Justia Law

Plaintiff, who suffers from epilepsy, was fired from his cardiology practice after a series of stress-related seizures. Plaintiff filed suit against HCA, alleging claims arising out of his alleged wrongful termination. The district court ordered arbitration of his claims based on equitable estoppel. In this case, the viability of plaintiff's claim depends on reference to the Physician Employment Agreement. The court concluded that, as the district court correctly recognized, an at-will employment relationship may exist even if the parties have entered into an employment contract, such as the Agreement. The court concluded that HCA’s liability depends on the Agreement and the district court did not abuse its discretion in applying direct benefits estoppel to Hays’s tortious interference claim. In making an Erie guess, the court held that the Texas Supreme Court would recognize intertwined claims estoppel and that plaintiff's remaining claims are subject to arbitration under that theory. Accordingly, the court affirmed the judgment. View "Hays v. HCA Holdings, Inc." on Justia Law

Mark Juelich and Steven Thoemke, former employees of Toyota-Lift of Minnesota, Inc. (TLM), claimed that TLM failed to pay them commissions they earned under their employment agreements with TLM. Juelich and Thoemke sought penalties under Minn. Stat. 181.14. The district court determined that TLM owed additional commissions to Juelich and Thoemke totaling $104,000 and that TLM was entitled to recover $815,000 from American Warehouse Systems, LLC (AWS) due to AWS’s breach of an asset purchase agreement entered into by AWS and TLM and its unjust retention of customer payments owed to TLM. The district court denied the request of Juelich and Thoemke for penalties under section 181.14, reasoning that the $814,000 judgment owed to TLM from AWS offset the unpaid commissions owed to Juelich and Thoemke. The court of appeals reversed, concluding that TLM was liable for statutory penalties under section 181.14. The Supreme Court affirmed, holding that when a court determines whether an employer is liable to an employee for the statutory penalty for nonpayment of wages under section 181.14, the court may not consider offsetting liabilities owed by the employee to the employer. View "Toyota-Lift of Minnesota, Inc. v. American Warehouse Sys., LLC" on Justia Law

In 2013, the U.S. Soccer Team Players Association disapproved the US Soccer Federation’s proposed tequila poster advertisement, which contained player images. The Federation issued a notice, declaring that the collective bargaining agreement/uniform player agreement (CBA/UPA) did not require Players Association approval for use of player likenesses for six or more players in print creative advertisements by sponsors. The Players Association filed a grievance and demanded arbitration, arguing that the CBA/UPA did require approval, based on the past practice of the parties. The arbitrator issued an award in favor of the Players Association. The district court confirmed the award. The Seventh Circuit reversed. The contractual provisions are clear and unambiguous, establishing that the parties contemplated and anticipated the use of player likenesses for six players or more and agreed only to “request, but not require” a sponsor contribution to the applicable player pool for advertisements of the type at issue. No other terms that contradict this “request, but not require” condition. View "United States Soccer Fed'n Inc. v. United States Nat'l Soccer Ass'n" on Justia Law

Jani-King, the world’s largest commercial cleaning franchisor, classifies its franchisees as independent contractors. Its cleaning contracts are between Jani-King and the customer; the franchisee is not a party, but may elect to provide or not provide services under a contract. Jani-King exercises a significant amount of control over how franchisees operate and controls billing and accounting. Two Jani-King franchisees assert that they are misclassified and should be treated as employees. On behalf of a class of Jani-King franchisees in the Philadelphia area (approximately 300 franchisees), they sought unpaid wages under the Pennsylvania Wage Payment and Collection Law (WPCL), 43 Pa. Stat. 260.1–260.12. The Third Circuit affirmed certification of the class under Federal Rule of Civil Procedure 23(f). The misclassification claim can be made on a class-wide basis through common evidence, primarily the franchise agreement and manuals. Under Pennsylvania law, no special treatment is accorded to the franchise relationship. A franchisee may be an employee or an independent contractor depending on the nature of the franchise system controls. View "Williams v. Jani-King of Philadelphia Inc" on Justia Law

The Michigan office of Alix, an international company, administers payroll and benefits for U.S. employees and is directly involved in U.S. hiring. In 2013, Alix hired Brewington, a Texas resident, for its Dallas Corporate Services team. The employment agreement provides that it “will be construed and interpreted in accordance with the laws of the State of Michigan” and states, “any dispute arising out of or in connection with any aspect of this Agreement and/or any termination of employment . . ., shall be exclusively subject to binding arbitration under the . . . American Arbitration Association . . . decision of the arbitrator shall be final and binding as to both parties.” In 2014, Brewington was terminated. He filed a demand for arbitration, asserting claims under Title VII, 42 U.S.C. 2000e, on behalf of himself and a purported nationwide class of current, former, and potential Alix employees. The Michigan district court ruled that Brewington was precluded from pursuing arbitration claims on behalf of any purported class. The Sixth Circuit affirmed that court’s refusal to dismiss, finding that Brewington had sufficient contacts with Michigan to establish personal jurisdiction, and upheld summary judgment in favor of Alix. An agreement must expressly include the possibility of classwide arbitration to indicate that the parties agreed to it. This clause is silent on the issue and is limited to claims concerning “this Agreement,” as opposed to other agreements. It refers to “both parties.” View "AlixPartners, LLP v. Brewington" on Justia Law

Plaintiffs are trust funds and employee benefit plans for construction industry employees. MRS constructs commercial buildings. In 1997, MRS signed “me-too agreements” binding it to collective bargaining agreements (CBAs) bestowing rights on Plaintiffs. Under the agreement, MRS agreed to be bound by the 1997-2001 CBA in force between a multiemployer association and the union. According to Plaintiffs, MRS also agreed to be bound by later CBAs because the 1997 agreement contains an “evergreen clause” and MRS never gave the notice required to terminate the clause. MRS conceded that it never gave notice, but denied that the letter continuously granted bargaining rights. Under each CBA, employers had to make specified contributions to various Plaintiff funds and permit audits of records relevant to those obligations. Plaintiffs sent MRS requests for audits, believing that MRS had failed to make contributions required by the 2012-2015 CBA. When MRS did not comply, Plaintiffs sought post-audit relief under 29 U.S.C. 1145 for unpaid ERISA contributions and injunctive relief compelling MRS to comply with the 2012-2015 and subsequent CBAs. The Third Circuit reversed dismissal, rejecting an argument that all me-too agreements must satisfy two criteria in order to bind non-signatories to future CBAs. Absent that requirement, the plausibility of the complaint should be assessed under contract law principles and states a plausible claim for relief. View "Carpenters Health & Welfare Fund v. Mgmt. Res. Sys., Inc." on Justia Law

Stevens worked for Baker from 1989 until 1996. When his employment ended, Stevens signed a contract in which he promised to maintain the confidentiality of Baker’s trade secrets. In 1999, Stevens sued, alleging failure to fully pay the compensation due him during his employment. The parties eventually settled; Baker paid Stevens $10,000. Around that time, Stevens formed S&S Chemical to produce polyethylene products. Baker suspected that S&S was improperly using Baker’s EP Processes and sent Stevens a letter in 2002 reminding Stevens of his Termination Agreement. Stevens responded that he had independently developed the processes used to manufacture S&S’s chemicals. Baker later confirmed that S&S was not then using Baker’s confidential information. Baker again became suspicious and, in 2014, sued Stevens. The Sixth Circuit affirmed judgment in favor of Stevens. Petrolite unquestionably knew of and approved each step that gave rise to the settlement contract at issue, the Release Provision of which unambiguously released Stevens from the obligations of the Termination Agreement. View "Baker Hughes Inc. v. S&S Chemical, LLC" on Justia Law