Justia Contracts Opinion Summaries

Employee was injured while working in Minnesota for Wisconsin-based Employer. Employee applied for Wisconsin and Minnesota workers' compensation benefits. Employer's insurance company, Travelers Insurance, covered the Wisconsin benefits but denied the claim for Minnesota benefits based on an exclusion of Minnesota coverage in Employee's policy. Employee then filed a claim for Minnesota benefits with the Minnesota Department of Labor and Industry. After settling the claim, the Department pursued a petition for reimbursement it had filed against Employer. A compensation judge found that Employer was not insured for Minnesota workers' compensation liability and ordered Employer to reimburse the Department. The Workers' Compensation Court of Appeals (WCCA) reversed, concluding that Employer was entitled to coverage from Travelers under the reasonable expectations doctrine. On review, the Supreme Court reversed and remanded for reconsideration in light of a recent Court decision clarifying that the doctrine should not be used to provide coverage in contravention of unambiguous policy terms. On remand, the WCCA again reversed the compensation judge. On review, the Supreme Court reversed, holding that the WCCA had no authority to declare unambiguous language of an insurance contract to be invalid and unenforceable because the exclusion conflicted with Wisconsin statutory provisions and public policy.

While Timothy Allen worked as a sales associate for respondent Burnet Realty, he executed agreements to participate in respondent's legal administration program (LA Program). Under the LA Program contracts, Allen and respondent agreed to an allocation of expenses should a dispute arise related to Allen's work for respondent. In litigation commenced after he stopped working for respondent, Allen claimed that respondent violated Minn. Stat. 60K.47 because the LA Program contracts were insurance, and, as a result, respondent was required to be, but was not, authorized to engage in the business of insurance in Minnesota. Allen also claimed other relief on the basis that the contracts were insurance. The district court granted summary judgment in favor of respondent, concluding that the contracts were not contracts of insurance. The court of appeals affirmed. The Supreme Court affirmed the grant of summary judgment to respondent, holding that the LA Program was not "insurance" under statutory definitions on statute or case law.

Petitioner Glenda Barron began working for Respondent Labor Finders of South Carolina in Respondent's Charleston office around 1990.  During petitioner's employment, Respondent planned to open a second office location in the Charleston area and informed Petitioner she would be promoted to regional sales manager for both Charleston locations.  In 2004, petitioner signed an agreement acknowledging her status as an at-will employee and setting her compensation as "straight commission" of 3% of customer payments deposited and posted by both Charleston offices each week, to be paid within ninety days of the invoice date. The second Charleston office opened in September 2004 and began earning income that November.  In January of the following year, Petitioner became concerned that respondent had not paid her the full amount of commissions she had earned. The supervisor contacted respondent's owner, who acknowledged that, due to an oversight, he forgot to pay Petitioner the commissions from the new Charleston location.  Petitioner never filed a written complaint with the Department of Labor, Licensing, and Regulation, as outlined by the Payment of Wages Act (Act). Respondent terminated Petitioner's employment the next day, stating it was forced to downsize in light of recent budget cuts.  Eight or nine days later, Respondent issued Petitioner a check in excess of the amount she was owed for commissions. Petitioner sued, alleging violations of the Act, breach of contract, breach of contract accompanied by a fraudulent act, and wrongful termination in violation of public policy.  The circuit court granted summary judgment in favor of Respondent as to all causes of action. Petitioner appealed the entry of summary judgment as to her wrongful termination claim.  The Court of Appeals affirmed. Petitioner argued on appeal that the Court of Appeals erred in holding she could not maintain a wrongful termination claim under the public policy exception to the at-will employment doctrine.  While the Supreme Court agreed the Court of Appeals erred in its analysis, the Court nonetheless affirmed the decision: "[a]lthough we agree. . . that there is no statutory remedy within the Act that would preclude an employee from maintaining a wrongful termination action, we nevertheless decline to address whether the public policy exception applies when an employee is terminated in retaliation for filing a wage complaint with the Department of Labor.  We find the Court of Appeals properly affirmed the circuit court's grant of summary judgment because there is simply no evidence the Act was ever implicated."  Petitioner never filed a complaint with the Department of Labor as required by the Act, nor did she ever indicate to respondent she had filed or intended to file a complaint.  "Thus, viewing the evidence in the light most favorable to petitioner, there is no genuine issue of material fact whether petitioner was terminated in retaliation for availing herself of the protections of the Act."

Petitioner sought review of three decisions of the National Labor Relations Board (NLRB) affirming in part and reversing in part the ALJ's findings with respect to allegations that AM Property Holding Corporation (AM) participated in a scheme with two successive cleaning contractors to avoid a bargaining obligation with petitioner after AM purchased a certain building. At issue was whether the NLRB erred by finding that: (1) AM was not a joint employer with either contractors; (2) the NLRB was precluded from determining whether one contractor was individually a successor employer to Clean-Right, the in-house cleaning division of the former owner of the building because the General Counsel had not litigated a violation based on that theory; and (3) petitioner was not entitled to additional remedies. The court rejected the first and third claims of error, but concluded that as to the second, the NLRB misunderstood its authority to determine whether one of the contractors was individually a successor employer to Clean-Right. Therefore, the court remanded so that the NLRB could reconsider this issue.

Defendant Four Rivers Packing Company operated an onion packing plant and hired Plaintiff Stuart Mackay as the company's "field man." Plaintiff had been in the onion business for decades and knew many onion farmers. Four Rivers through its general manager Randy Smith (Smith) offered Plaintiff a job that involved purchasing enough onions to keep Four Rivers' packing shed stocked at a price that Smith would set. Plaintiff contended that Smith offered him a long-term employment contract. From 2000 to 2002, financial and managerial setbacks made it difficult for Four Rivers to operate its business, and for Plaintiff to acquire onions at prices set by Smith in order to keep the sheds stocked. In 2003, Four Rivers laid Plaintiff off. Plaintiff filed suit in 2004 alleging breach of the employment contract. At trial following a remand, Four Rivers contended that the parties had not entered into an employment contract for any specified term. A jury would return a verdict in favor of Plaintiff. In a special verdict form, the jury found that the parties had entered into a long term contract of "up to ten years, or such time as the Plaintiff retired." Four Rivers timely appealed, challenging jury instructions given at trial and the sufficiency of the evidence. Upon review of the trial record, the Supreme Court found that the trial court properly instructed the jury and that the evidence presented was sufficient to support the verdict. The Court affirmed the trial court's judgment against Four Rivers.

The National Treasury Employees' Union (Union) sought review of an adverse ruling by the Federal Labor Relations Authority (Authority) where the Union filed a grievance alleging that the IRS was processing its members' dues revocation forms without following contractually-mandated procedures. After the parties filed exceptions to the arbitrator's award with the Authority, the Authority denied the parties' exceptions and confirmed the award in its entirety. The Union petitioned the court for review. The court held that because the Authority's decision upholding the arbitrator's award was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, the court had no warrant to disturb the Authority's decision.

Defendants engaged in discovery misconduct that was sufficiently egregious to cause the district court to enter an order of default against them. Although defendants subsequently challenged the default order as erroneous, defendants did not challenge the order of default by way of a Federal Rule of Civil Procedure 55(c) or 60(b). At issue was whether Judge Real, a district court judge, had the power to impose default as a sanction for discovery misconduct and assuming such power, whether Judge Real abused his discretion by imposing default rather than lesser sanctions. The court held that defendants' failures to comply with orders of the court provided Judge Real with the power under Rule 37(b) to impose sanctions sua sponte, up to and including default and that Judge Wilson appropriately revisited previous orders of the court when he replaced Judge Real after Judge Real recused himself. The court also held that the district court possessed the power to impose the sanction of default and that the district court did not abuse its discretion by doing so. Accordingly, the judgment was affirmed.

This case stemmed from the collective bargaining activities of the International Longshore and Warehouse Union, Local 142 (Union) and the Pacific Beach Hotel (Hotel) where the Union filed numerous unfair labor practice charges with the Regional Director of Region 20 of the Board (Director). At issue was an injunction issued pursuant to section 10(j), 29 U.S.C. 160(j), of the National Labor Relations Act (Act), 29 U.S.C. 151 et seq. The court must determine whether the injunction should be affirmed on its merits and whether the district court had the power to issue the injunction in the first place. As a preliminary matter, the court held that the appeal was not moot because its resolution was crucial to a pending claim for retrospective monetary relief sought by the National Labor Relations Board (Board) against the Hotel in a civil contempt proceeding. The court held that the text of the Act, reinforced by the Board's longstanding practice under section 10(e), allowed the Board to assign the General Counsel final authority in deciding when to petition for injunctive relief under section 10(j) in particular unfair labor practice cases pending before the Board. The three other circuits that have addressed this question agreed that the district court could entertain section 10(j) petitions approved by the General Counsel pursuant to the authority granted him by the Board in December 2007. Although the court's reasoning differed somewhat from that in those cases, the court's conclusion with regard to the validity of the Board's 2007 delegation of litigation authority under section 10(j) was identical. With respect to the Board's power to file petitions under section 10(j), it was sufficient that a quorum of the Board in 2007 decided to assign decisions as to individual petitions to the General Counsel. Under the distinction explained in New Process Steel, L.P. v. NLRB, nothing in the Board's quorum requirement would cause the General Counsel's ability to file section 10(j) petitions to lapse after the Board's membership fell below a quorum. As for the merits of the injunction, the court concurred with the district court's assessment that the Board was likely to determine, and be affirmed by the court in so determining, that the Hotel engaged in violations of section 8(a)(1), (3), and (5) of the Act by refusing to bargain in good faith and excluding five union activists from the workforce. The district court likewise did not abuse its discretion in concluding that the other requisites for section 10(j) relief were met. Accordingly, the court affirmed the injunction.

Former employees of defendants participated in the Capital Accumulation Plan, under which they received portions of their earned commissions in the form of Citigroup stock, received at a 25% discount and on a tax-deferred basis. The stock was subject to a two-year vesting period during which transfer was restricted and rights would be forfeited if the employee resigned. Plaintiffs alleged that the CAP forfeiture provision violated the Colorado Wage Claim Act, Colo. Rev. Stat. 8-4-103 and Louisiana's labor statute, La. Rev. Stat. 23:631(A)(1)(a), 23:634(A) and breach of employment contracts, breach of the CAP contract, conversion, and unjust enrichment. The district court dismissed, based on a previous decision involving similarly-situated plaintiffs. The First Circuit affirmed. The Colorado law applies only to compensation that is "earned, vested, and determinable." The Louisiana law does not apply because the stock was not "then due" when the plaintiffs resigned. There was no breach of contract, hence no conversion; the claims of unjust enrichment failed because of the existence of a contract.

This case stemmed from a Mutual Strike Assistance Agreement (MSAA) that was entered into by defendants (grocers) where the MSAA included a revenue-sharing provision (RSP), providing that in the event of a strike/lockout, any grocer that earned revenues above its historical share relative to the other chains during the strike period would pay 15% of those excess revenues as reimbursement to the other grocers to restore their pre-strike shares. At issue was whether the MSAA was exempt from the antitrust laws under the non-statutory labor exemption, and if not, whether the MSAA should be condemned as a per se violation of the antitrust laws or on a truncated "quick look," or whether more detailed scrutiny was required. The court held that the MSAA between the grocers to share revenues for the duration of the strike period was not exempt from scrutiny under antitrust laws and that more than a "quick look" was required to ascertain its impact on competition in the Southern California grocery market. Given the limited judicial experience with revenue sharing for several months pending a labor dispute, the court could not say that the restraint's anti-competitive effects were "obvious" under a per se or "quick look" approach. Although the court concluded that summary condemnation was improper, the court expressed no opinion on the legality of the arrangement under the rule of reason. Accordingly, the judgment was affirmed.