Justia Contracts Opinion Summaries

This case arose when plaintiff, a Massachusetts resident, entered into an executive employment contract with defendant. A forum selection clause dictated that all disputes arising out of the contract or the employment relationship were to be resolved in courts situated in Erie County, New York, defendant's principal place of business. The court concluded that a forum selection clause operated as a special contract only when three conditions were met: the employer's claim was covered by the Massachusetts Wage Act, G.L.c. 149, sections 148, 150; the court of the forum state, applying its choice-of-law principles, would choose a law other than that of Massachusetts to govern the dispute; and application of the foreign law would deprive the employee of a substantive right guaranteed by the Wage Act. Under modern choice-of-law doctrines, these conditions rarely coincided. On the facts alleged in the case, a New York court, applying New York's choice-of-law doctrine, would certainly apply the Wage Act to this dispute. Therefore, the court held that because enforcement of the forum selection clause would not deprive plaintiff of the protections of the Wage Act, dismissal of the action was affirmed.

Plaintiffs appealed the dismissal of their complaint challenging a number of agreements entered into by the City of New York with respect to labor conditions on certain City construction projects. Plaintiffs argued that the agreements regulated the labor market and were therefore preempted by the National Labor Relations Act, 29 U.S.C. 151-169. The court found the project labor agreements in this case materially indistinguishable from agreements the Supreme Court found permissible under the market participation exception to preemption in Building and Construction Trades Council of Metropolitan District v. Associated Builders and Contractors of Massachusetts/Rhode Island Inc. Because the City acted as a market participant and not a regulator in entering the agreements, its actions fell outside the scope of NLRA preemption. Therefore, the court affirmed the judgment of the district court.

HOP Energy appealed from the district court's confirmation of an arbitration award in favor of Local 553 Pension Fund. The district court held that HOP Energy was not exempt from withdrawal liability under the Multi-Employer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381-1461, because the purchaser of HOP Energy's New York City operating division lacked an obligation to contribute "substantially the same number of contribution base units" to the pension fund post-sale by HOP Energy had contributed pre-sale. The court agreed and held that the "contribution base units" were hours of employee pay. Although the purchaser of HOP Energy's New York City operating division had an obligation to contribute to the pension fund at the same contribution base unit rate, it had no obligation to contribute substantially the same number of hours of employee pay. Therefore, HOP was not exempt from withdrawal liability.

This case arose when a real estate developer hired HOD to act as general contractor for the construction of two multi-family residences. HOD entered into a subcontract with Well Built for the masonry work. At issue was whether a general contractor acted as a joint employer of masonry workers, who were employed by one of its subcontractors, thereby owing unpaid wages to the subcontractor's workforce. The court held that the Board erred as a matter of law in relying on the federal six-factor test in Zheng v. Liberty Apparel Co., Inc. in reaching its determination of joint employment. Because the Board's factual findings indicated nothing more than that the usual contractor/subcontractor relationship existed between HOD and Well Built during the three-month period that Well Built's principal, Martin Bruten, was on the job, the court need not resort to federal precedent to resolve the issue. In any event, even if the court were to apply the Zheng test, the court would hold that HOD was not a joint employer of Well Built's employees. Accordingly, the judgment of the Appellate Division should be reversed and the matter remitted with directions to remand to the Board for further proceedings.

Oliver Arlington was employed by Miller's Trucking as a log truck driver and loader operator pursuant to an oral employment agreement. For his work, Miller's paid Arlington twenty-five percent of the "load rate" as calculated by Miller's. Arlington, however, asserted that according to the parties' oral agreement, he should have been paid a salary in the form of annual wages. Arlington filed a wage claim, seeking the pay he alleged he was owed in regular and overtime wages. The Department of Labor and Industry's bureau dismissed Arlington's claim for lack of merit and lack of sufficient evidence. On appeal, a bureau hearing officer dismissed Arlington's claim. The district court affirmed. The Supreme Court reversed, holding (1) the hearing officer acted arbitrarily and capriciously in failing to require Miller's to produce material requested by Arlington and in refusing to admit tendered evidence, prejudicing the substantial rights of Arlington, and the district court erred in affirming the hearing officer's judgment; and (2) the hearing officer and district court incorrectly determined that Arlington engaged in activities of a character directly affecting the safety of the operation of motor vehicles in interstate commerce and thus was exempt from overtime requirements. Remanded.

Plaintiffs, 64 former employees of DuPont who worked at the company's manufacturing facility in La Porte, Texas, filed suit against DuPont alleging that they were fraudulently induced to terminate their employment with DuPont and accept employment with a wholly owned subsidiary. The district court granted summary judgment dismissing the claims and entered a take-nothing final judgment in favor of DuPont. The court deferred to the Texas appellate courts and concluded that the 60 day termination clause at issue rendered the covered employees' employment with DuPont at-will for the purpose of Texas law. Accordingly, they could not bring fraud claims against DuPont for loss of their employment and therefore, the court affirmed the judgment.

Plaintiffs, seeking to represent a class, alleged failure to compensate them for work performed during their meal break and before and after shifts, and for time spent attending training sessions, in violation of the Fair Labor Standards Act, 29 U.S.C. 206-207; the Employee Retirement Income Security Act, 29 U.S.C. 1059(a)(1), 1104(a)(1); and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962, 1964(c). The district court held that the FLSA claim was deficiently pled, and that this was fatal to the complaint because the ERISA and RICO claims were derivative of the FLSA claim. The court found the allegation of under-compensation insufficient, given the lack of any information on plaintiffs' approximate weekly wages and hours worked, or even an allegation that they had worked in excess of 40 hours in any workweek. The First Circuit vacated. The allegations were insufficient under the FLSA, but plaintiffs should be permitted to amend.

Penske provided transportation services for a newspaper, its only customer, 1999 to 2009, but lost the bid for the contract and informed the union that it would cease operations. The collective bargaining agreement expired two days after operations shut down. Penske and the union engaged in "effects bargaining." Penske agreed to give workers extended recall rights, preferential treatment should they apply for employment at other firms within the Penske group, pay for unused vacation time, severance pay of one week's wages, and assistance in preparing resumes and securing letters of recommendation. Employees filed claims they characterized as a "hybrid" breach of contract and Labor-Management Relations Act, 29 U.S.C. 185 suit. The Seventh Circuit agreed with the district court that the suit was "doomed" because the plaintiffs did not even contend that Penske failed to implement the collective bargaining agreement. The court also dismissed a claim that the union did not bargain hard enough.

In a consolidated appeal, plaintiffs contended that the district court erred in denying their motions to remand and in dismissing their workplace safety claims as time-barred. Plaintiffs claimed, inter alia, that Dresser failed to properly monitor and mitigate exposure to loud noise at Dresser's industrial facility and that these failures led to long-term hearing loss. The court concluded that Dresser owed plaintiffs duties under the collective bargaining agreement (CBA) and simultaneously owed non-negotiable, independent duties under Louisiana tort law. These duties formed the bases for two distinct types of claims - contract and tort - either of which plaintiffs could have brought before the district court. Plaintiffs chose to sue in tort, without reference to the CBA, and their claims could be adjudicated by sole resort to Louisiana tort law. Applying the Supreme Court's construction of section 301 of the Labor Management Relations Act, 29 U.S.C. 185(a), the district court was without jurisdiction and therefore erred in denying the motions to remand and in granting the motions to dismiss. Accordingly, the judgment was reversed and remanded.

Plaintiff sued his former employer alleging causes of action for failure to pay wages in violation of Labor Law 190-198 and breach of contract. The employer subsequently appealed the Appellate Division's order, arguing that there was insufficient evidence to support the jury's verdict because statements in the employment application and employee handbook negated plaintiff's alleged expectation of, or entitlement to, a guarantee or non-discretionary bonus and that the oral agreements respecting the bonus, if, in fact, entered into by the parties, were unenforceable. The court concluded that plaintiff's bonus was "expressly link[ed]" to his "labor or services personally rendered." Further, plaintiff's bonus had been earned and was vested before he left his job; its payment was guaranteed and non-discretionary as a term and condition of his employment. Since plaintiff's bonus therefore constituted "wages" within the meaning of Labor Law 190, the employer's neglect to pay him the bonus violated Labor Law 193, and entitled plaintiff to an award of attorney's fees under Labor Law 198(a-1). The court considered the employer's remaining arguments and found them to be without merit. Accordingly, the order of the Appellate Division was affirmed.