Justia Contracts Opinion Summaries

Phillip Khalil was employed with Front, Inc. for approximately seven years. Khalil later informed Front that he intended to resign to take a position with Eckersley O’Callaghan Structural Design (EOC), one of Front’s competitors. Front, however, terminated Khalil’s employment upon discovering that he worked on several side projects for Front’s competitors, including EOC, in violation of the terms of his employment contract. Front retained Meister Seelig & Fein LLP (MSF), whose attorney sent a letter to Khalil making certain demands. The attorey then sent a letter to EOC making demands nearly identical to those made in the letter to Khalil. Khalil and EOC failed to comply with Front’s demands. Front subsequently commenced an action against Khalil and EOC alleging, inter alia, civil conspiracy and misappropriation of trade secrets. Khalil commenced a third-party action against MSF and its attorney (collectively, MSF), asserting a cause of action for libel per se based upon statements made by MSF in its letter to Khalil. Supreme Court determined that the letter to Khalil was absolutely privileged and dismissed the third-party action against MSF. The Appellate Division affirmed. The Court of Appeals affirmed, holding that because the letters were written in the preliminary stages of an anticipated action, they were properly subject to a qualified privilege. View "Front, Inc. v. Khalil" on Justia Law

In 1999, Allstate reorganized its business and terminated the at-will employment contracts of about 6,200 sales agents, offering them conversion to independent contractor status; $5,000 and an economic interest in their accounts, to be sold to buyers approved by Allstate; severance pay equal to one year’s salary; or severance pay of 13 weeks’ pay. Employees who chose independent contractor status received a bonus of at least $5,000, were not required to repay any office-expense advances, and acquired transferable interests in their business two years after converting. All employees who chose not to convert and left the company were bound by noncompetition covenants in their original contracts. As a condition of becoming independent contractors, agents were required to sign a release waiving existing legal claims against Allstate. The Equal Employment Opportunity Commission sued, claiming that the company violated federal anti-retaliation laws. The district court reversed. The Third Circuit affirmed, noting the settled rule that employers can exchange consideration for releases of claims and that EEOC established neither protected activity nor an adverse action. View "Equal Emp't Opportunity Comm'n v. Allstate Ins. Co" on Justia Law

A Milwaukee County General Ordinance prospectively eliminated Medicare Part B premium reimbursement upon retirement for employees who did not retire before retirement dates established by Milwaukee County. Plaintiffs were of retirement age, had fifteen years of credited service to the County, but did not retire by the dates established in the ordinance. Plaintiffs claimed that the ordinance impaired their vested contract right to reimbursement of Medicare Part B premiums when they retire. The court of appeals granted summary judgment to Milwaukee County. The Supreme Court affirmed, holding (1) the County did not abrogate a vested contract right when it prospectively modified a health insurance benefit it offered for employees who had not yet retired; (2) County employees have a vested contract right to Medicare Part B premium reimbursement when they fulfill all three criteria for its payment, including actual retirement; and (3) because Plaintiffs did not meet all three criteria in this case, they did not fulfill the requirements necessary to establish a vested contract right to reimbursement. View "Wis. Fed’n of Nurses and Health Prof’ls v. Milwaukee County" on Justia Law

NanoMech, researcher and developer of nanotechnologies, filed suit against defendant, a former employee, for breach of a noncompete agreement. On appeal, NanoMech challenged the district court's judgment on the pleadings for defendant. The court affirmed the district court's finding that the noncompete agreement was unenforceable under Arkansas law where any error in the district court's decision to convert defendant's motion to dismiss into a Rule 12(c) motion for judgment on the pleadings was harmless; under Arkansas law, a noncompete agreement must be valid as written; and a blanket prohibition on defendant's ability to seek employment of any kind with an employer in the nanotechnology industry anywhere in the world is overbroad, unreasonable, and therefore unenforceable. View "NanoMech, Inc. v. Suresh" on Justia Law

Before it was acquired by DirecTV, 180 Connect entered into an employment arbitration agreement with Marenco, which prohibited filing a class or collective action, or a representative or private attorney general action. After acquiring 180 Connect, DirecTV retained employees, including Marenco. Marenco later filed suit, alleging that DirecTV had issued debit cards in payment of wages to a putative class of employees. Plaintiffs who used their cards to withdraw cash at ATM machines were required to pay an activation fee and a cash withdrawal fee, resulting in DirecTV’s failure to pay plaintiffs’ full wages in violation of the Unfair Competition Law and Labor Code 212. DirecTV moved to compel arbitration of Marenco’s individual claims, and stay the class claims. Marenco argued that DirecTV lacked standing to enforce the agreement and that the agreement was unconscionable and unenforceable under California law. The U.S. Supreme Court then issued its 2011 decision, AT&T Mobility v. Concepcion, holding that the Federal Arbitration Act preempts the California rule of unconscionability. The trial court ordered arbitration of Marenco’s individual claims, holding that DirecTV had standing; the class action waiver is not unconscionable; and prohibition of representative actions does not violate the National Labor Relations Act (29 U.S.C. 157). The court of appeal affirmed. View "Marenco v. DirecTV, LLC" on Justia Law

M&G purchased the Point Pleasant Polyester Plant in 2000 and entered a collective bargaining agreement and a related Pension, Insurance, and Service Award Agreement with the union, providing that certain retirees, surviving spouses, and dependents, would “receive a full Company contribution towards the cost of [health care] benefits”; that such benefits would be provided “for the duration of [the] Agreement”; and that the Agreement would be subject to renegotiation in three years. After the expiration, M&G announced that it would require retirees to contribute to the cost of their health care benefits. Retirees sued, alleging that the 2000 Agreement created a vested right to lifetime contribution-free health care benefits. On remand, the district court ruled in favor of the retirees; the Sixth Circuit affirmed. The Supreme Court vacated and remanded, noting that welfare benefits plans are exempt from the Employee Retirement Income Security Act, 29 U.S.C. 1051(1), 1053, 1081(a)(2), 1083, and applying ordinary principles of contract law. The Court stated that Sixth Circuit precedent distorts ordinary principles of contract law, which attempt to ascertain the intention of the parties, “by placing a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements.” The Sixth Circuit did not consider the rules that courts should not construe ambiguous writings to create lifetime promises and that “contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement.” View "M&G Polymers USA, LLC v. Tackett" on Justia Law

Plaintiff, a young lawyer associate, filed a complaint against Defendants, his former Virginia-based law firm employer and its principal, claiming a violation of the Maryland Wage Payment and Collection Law (“MWPCL”) and seeking $1,974 in unpaid wages, treble damages, and attorney’s fees and costs. The trial judge concluded that the employment contract was a “Virginia” contract, and therefore, Plaintiff could not bring a suit in Maryland under the MWPCL. The circuit court reversed the dismissal of Plaintiff’s MWPCL claim. Defendants appealed. The Court of Appeals affirmed, holding that the mere fact that the parties in this case entered into a “Virginia” employment contract did not prohibit maintenance of Plaintiff’s claims under the MWPCL. Remanded. View "Cunningham v. Feinberg" on Justia Law

Plaintiff filed a breach of contract claim against Zenith after Santana Morales, Jr. was crushed to death by a palm tree while working as a landscaper for Lawns. The Florida Supreme Court answered the following certified questions in the affirmative: (1) Does the estate have standing to bring its breach of contract claim against Zenith under the employer liability policy? (2) If so, does the provision in the employer liability policy which excludes from coverage "any obligation imposed by workers' compensation... law" operate to exclude coverage of the estate's claim against Zenith for the tort judgment? and (3) If the estate's claim is not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgment? The court concluded that, given the Florida Supreme Court's resolution of the certified issues, the district court correctly determined that the workers' compensation exclusion in Part II of the policy barred Zenith's coverage of the tort judgment against Lawns. The court affirmed the district court's grant of summary judgment in favor of Zenith. View "Morales v. Zenith Ins. Co." on Justia Law

North American Rescue Products, Inc. (NARP) brought a declaratory judgment action to determine whether P. J. Richardson had the right to purchase 7.5% of NARP's stock at a discount despite the fact that he had been terminated, the agreement to which purported to end the parties' relationship. A jury's verdict allowed Richardson to purchase the stock, but both parties appealed. The Supreme Court granted review of the appellate court's decision affirming the jury's verdict. After that review, the Supreme Court concluded the termination agreement unambiguously ended any right Richardson had to purchase the stock. The appellate court was reversed and the case remanded for entry of judgment in favor of NARP. View "North American Rescue Products v. Richardson" on Justia Law

In 2012, the governing board of Avera Marshall Regional Medical Center notified the hospital’s medical staff that it had approved the repeal of the medical staff bylaws and replaced them with revised bylaws. Avera Marshall’s Medical Staff, Chief of Staff, and Chief of Staff-elect commenced an action seeking a declaration that the Medical Staff had standing to sue Avera Marshall and that the former medical staff bylaws constituted a contract between Avera Marshall and the Medical Staff. The district court granted judgment for Avera Marshall and dismissed the case, concluding that the Medical Staff lacked the capacity to sue under Minnesota law and that the medical staff bylaws did not constitute an enforceable contract between Avera Marshall and the Medical Staff. The court of appeals affirmed. The Supreme Court reversed, holding (1) the Medical Staff has the capacity to sue and be sued under Minnesota law; and (2) the medical staff bylaws constitute an enforceable contract between Avera Marshall and the individual members of the Medical Staff. Remanded. View "Medical Staff of Avera Marshall Reg’l Med. Ctr. v. Avera Marshall" on Justia Law