Justia Contracts Opinion Summaries

Plaintiff-appellant Jeffrey Huber brought this action against his former employer, Lightforce USA, Inc. (“LFUSA”), for breach of contract and failure to pay wages. Huber’s claims centered on two employment agreements: a Company Share Offer (“CSO”), and a Deed of Non-Disclosure, Non-Competition and Assignment (“NDA”). Huber claimed that upon his termination LFUSA was obligated to pay him the value of 30% of the goodwill of LFUSA under the CSO and twelve months’ pay under the NDA. The parties agreed that the CSO was a deferred compensation plan and was, therefore, governed by the Employee Retirement Income Security Act (“ERISA”). At a bench trial, Huber succeeded only on his breach of contract claim under the NDA. Huber timely appealed the district court’s rulings on summary judgment: (1) holding that the amount owed under the NDA was not wages under the Idaho Wage Claims Act, (2) dismissing his wrongful termination claim, and (3) holding that the CSO was a “top hat” plan under ERISA and, therefore, exempt from ERISA’s vesting and anti-forfeiture provisions. Huber also appealed the district court’s ruling at trial that Huber forfeited the benefit under the CSO, and the district court’s rulings on post-trial motions: (1) denying his claim for equitable relief, (2) calculating Huber’s award of prejudgment interest, and (3) awarding attorney fees and costs to LFUSA. The Supreme Court affirmed the district court in part and reversed in part, finding: (1) the CSO was a top hat plan under ERISA and that Huber forfeited the benefit under the CSO; (2) it was proper to deny Huber’s claim for equitable relief and denying Huber’s motion to amend his complaint to conform to the evidence; (3) the district court erred by ruling that the amount owed under the NDA was not "wages" under the Idaho Wage Claims Act; (4) the district court erred with respect to prejudgment interest and costs and fees to LFUSA. The case was remanded back to the district court to treble the $180,000 judgment. Post-judgment interest shall accrue on the trebled amount of $540,000 from December 10, 2013, the date of entry of the judgment. View "Huber v. Lightforce USA, Inc." on Justia Law

Adam Ray, a former employee of Granite Buick GMC, Inc., and Scott Hanna, a former employee of McKie Ford Lincoln, Inc., left their respect employment and started their own automobile dealership. Granite Buick and McKie Ford sought injunctions to enforce non-compete agreements Defendants signed during the course of their employment. After the Supreme Court reversed and remanded, the circuit court concluded that the non-compete agreements were valid but granted judgment in favor of Defendants on their affirmative defenses. The Supreme Court affirmed, holding that the circuit court properly determined (1) Ray’s covenant not to compete was fraudulently induced; and (2) McKie Ford waived its right to enforce Hanna’s covenant not to compete. View "Granite Buick GMC, Inc. v. Ray" on Justia Law

Plaintiff sued Defendant for breach of contract and for wrongfully discharging him in retaliation for filing a workers’ compensation claim in good faith. Plaintiff’s breach of contract claim related to Defendant’s failure to remit accrued vacation pay upon his termination. A jury found in Plaintiff’s favor. The trial court rendered judgment in favor of Plaintiff, awarding him past and future lost earnings, employee benefits, and other damages. Defendant appealed the portion of the judgment on the retaliation claim. The court of appeals affirmed. The Supreme Court reversed and rendered a take-nothing judgment in favor of Defendant on Plaintiff’s retaliation claim, holding that no evidence supported the jury’s verdict on that claim. View "Kingsaire, Inc. v. Melendez" on Justia Law

Mid-Atlantic Systems of CPA, Inc. hired Appellee David Socko in March 2007 as a salesperson. Socko executed a two-year employment contract containing a covenant not to compete. In February 2009, Socko resigned from his employment with Mid-Atlantic, but the company rehired him four months later, in June 2009. At his time of rehire, Socko signed a new employment agreement containing another two-year covenant not to compete. While still employed by Mid-Atlantic, in 2010, Socko signed a third, more restrictive “Non-Competition Agreement,” which, by its terms, superseded all prior agreements. Pursuant to the Agreement (at issue in this appeal), Socko was not permitted to compete with Mid-Atlantic for two years after the termination of his employment in any of the locations Mid-Atlantic did business: Connecticut, the District of Columbia, Delaware, Maryland, New Jersey, Pennsylvania, New York, Virginia, and West Virginia. The Agreement also expressly provided for the application of Pennsylvania law, and stated that the parties intended to be “legally bound.” The issue this case presented for the Pennsylvania Supreme Court’s review was one of first impression: whether the enforcement of an employment agreement containing a restrictive covenant not to compete, entered into after the commencement of employment, could be challenged by an employee for a lack of consideration, where the agreement, by its express terms, stated that the parties “intend to be legally bound,” which language implicated the insulating effect of the Uniform Written Obligations Act (“UWOA”). After review, the Supreme Court concluded that an employee was not precluded from challenging such an agreement executed pursuant to the UWOA. View "Socko. v. Mid-Atantic Systems of CPA, Inc." on Justia Law

Prosperity entered into contracts with a number of F&M bankers that included covenants not to compete, not to solicit, and not to disclose confidential information obtained while working at Prosperity. Prosperity sought to enforce the restrictive covenants under Texas law, but the district court denied Prosperity's application for injunctive relief. Texas generally allows covenants not to compete so long as they are limited both geographically and temporally, Tex. Bus. & Com. Code Ann. 15.50(a). Oklahoma generally does not, Okla. Stat. tit. 15, 217. The court concluded that, with respect to the noncompetition covenants, the choice-of-law provision is likely unenforceable,and the agreement is unlikely to fall within Oklahoma’s goodwill exception to its ban on noncompetition agreements. Therefore, the court affirmed the denial of Prosperity’s request for an injunction seeking to enforce these clauses because Prosperity cannot meet the important “substantial likelihood of success” factor. The court concluded that, with respect to the nonsolicitation covenant, the choice-of-law provision is likely enforceable. Therefore, the court remanded to the district court to permit it to decide in the first instance whether the agreement is enforceable under Texas law as is, or pursuant to a modification, and whether the other equitable factors warrant a preliminary injunction. Finally, the court affirmed the district court's conclusion that the nondisclosure agreement was likely enforceable and denied the request for a preliminary injunction on the ground that Prosperity failed to establish likelihood of success or irreparable injury. View "Cardoni v. Prosperity Bank" on Justia Law

Slusher, an orthopedic surgeon and military reservist, worked at Heritage, a small hospital in Shelbyville, Tennessee, through a staffing service, on 30-day assignments beginning on July 20, 2010. Slusher was offered, but did not accept, a permanent position. He agreed to a one-year contract in January 2011, which could be terminated by either party for any reason upon 90 days’ notice or by Heritage, effective immediately, with 90 days’ pay instead of notice. It did not provide for renewal or extension. Heritage knew that he could be called up for deployment. On May 4, 2011, Slusher received orders. Before Slusher’s deployment, Heritage informed him that it had interviewed another physician for the orthopedic surgeon position. Heritage granted Slusher military leave. He reported for active duty on June 10. While he was in Iraq, Heritage informed Slusher that it was nearing a contract with Mosley. Slusher later signed a termination agreement, specifying that his employment would end on October 26. Slusher returned to Heritage, where Mosley had begun working, on October 3, and worked there until October 26, 2011. Slusher filed a complaint with the Veterans’ Employment and Training Service. After the Department of Labor closed its investigation, Slusher filed suit, claiming discrimination under and violation of the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301-35 and breach of contract. The Sixth Circuit affirmed summary judgment in favor of the defendants on each claim. View "Slusher v. Shelbyville Hosp. Corp." on Justia Law

In 2009, John Flynn joined the law firm of Daniel G. Lilley Law Office, P.A. (LLO). In 2011, Flynn left LLO to open his own practice. LLO and Daniel Lilley subsequently filed a complaint against Flynn seeking a judicial declaration that any contingency fees earned in cases that Flynn brought to LLO were the property of LLO to be distributed at Lilley’s sole discretion and seeking the return of such fees that Flynn had already received. Flynn counterclaimed. In 2012, the superior court denied LLO’s motion to consolidate this case with the closely-related cases at issue in Tucker v. Lilley. After a jury trial, the superior court entered judgment awarding Flynn unpaid salary from his tenure at LLO and apportioned attorney fees between the parties in cases that Flynn brought to LLO from his former law firm. The Supreme Court vacated the judgment, holding that the superior court abused its discretion in declining to consolidate this case with the cases at issue in Tucker v. Lilley, as this case was an integral member of the set of cases that “must be resolved in one consolidated action before a single fact-finder.” Remanded with instructions to grant LLO’s motion to consolidate. View "Daniel G. Lilley Law Office, P.A. v. Flynn" on Justia Law

In 1997 Seagate recruited Dr. Shukh, a native of Belarus, to move to the U.S. Shukh executed Seagate’s standard Employment Agreement, assigning to Seagate all “right, title, and interest in and to any inventions” made while at Seagate. Seagate prohibited employees from filing patent applications for their inventions. During his employment, Shukh was named as an inventor on 17 patents. Shukh’s time at Seagate was tumultuous. His performance evaluations indicated that he did not work well with others due to his confrontational style. In 2009, Seagate terminated Shukh and 178 others. Shukh has not yet secured employment and claims that he was told that he would never find employment at certain companies with his reputation. Shukh alleges that Seagate wrongfully omitted him as an inventor from several patents relating to semiconductor technologies; that Seagate discriminated against and terminated him based national origin and in retaliation for complaining about discrimination. He sought correction of inventorship of the disputed patents under 35 U.S.C. 256. The district court held that Shukh had no interest in the patents based on the assignment; dismissed claims for rescission of his Employment Agreement, breach of contract, breach of fiduciary duty, and unjust enrichment; and rejected claims of reputational harm, retaliation, fraud, and discrimination on summary judgment. The Federal Circuit vacated with respect to correction of inventorship, but otherwise affirmed. There is a genuine dispute of material fact as to whether Shukh’s negative reputation is traceable to Seagate’s omission of Shukh as an inventor from disputed patents. View "Shukh v. Seagate Tech., LLC" on Justia Law

Irish Oil & Gas, Inc. was an oil and gas exploration, production, and brokerage company. Border Resources, LLC provided landman services to clients, including acquiring leases, performing due diligence, and providing title curative work. This case involved Border's claim against Irish Oil for breach of contract for landman services Border provided to Irish Oil and Irish Oil's counterclaim against Border for breach of fiduciary duty in performing those services. Irish Oil appealed the judgment entered after a bench trial, that awarded Border damages and prejudgment interest and dismissed Irish Oil's counterclaim for breach of fiduciary duty. After review, the Supreme Court concluded the district court did not clearly err in finding Border did not breach its fiduciary duty while providing professional landman services to Irish Oil and in finding leases Border acquired for Irish Oil were sold for $1,100 per net mineral acre. Furthermore, the Court concluded the trial court did not abuse its discretion in denying Irish Oil's motion to amend its counterclaim to add individual landmen as counterclaim defendants. View "Border Resources, LLC v. Irish Oil & Gas, Inc." on Justia Law

Michels is a member of the Pipe Line Contractors Association (PLCA), a trade association that negotiates collective bargaining agreements (CBAs) on behalf of its employer members with unions. In 2006, the PLCA and the Union entered into a CBA in “effect until January 31, 2011, and thereafter from year to year unless terminated at the option of either party after sixty (60) days’ notice.” The CBA required contributions to the Central States multiemployer pension plan, 29 U.S.C. 1000(2), (3), (37). In August 2010, the PLCA informed the Union that it intended to terminate the 2006 CBA on January 31, 2011, and begin negotiations for a new agreement; the parties signed eight extensions, the last ending November 15, 2011. Michels contributed to the pension plan throughout those extensions. The parties agreed that the employers would cease making contributions to the plan as of November 15, 2011; that they would make comparable payments to an escrow fund until a “mutually acceptable” fund was designated; and that they would otherwise extend the terms of the 2006 CBA until December 31, 2011. The fund claimed that the obligation to make contributions had not ended. The Seventh Circuit reversed the district court holding that this was not sufficient to end the duty to contribute. View "Michels Corp. v. Cent. States, SE & SW Areas Pension Fund" on Justia Law