Justia Labor & Employment Law Opinion Summaries

LKQ Corporation, a Delaware corporation in the auto salvage and recycled parts business, designated certain employees as "Key Persons" eligible for Restricted Stock Units (RSUs) through RSU Agreements. These agreements included non-competition clauses and provisions for forfeiture of RSUs and any stock issued if the employee competed with LKQ within nine months post-departure. Robert Rutledge, a plant manager at LKQ, signed these agreements and received stock under them. In April 2021, Rutledge resigned and joined a competitor shortly after.LKQ sued Rutledge in Illinois federal court for breach of contract and unjust enrichment, seeking to enjoin him from working for a competitor and to recover proceeds from the sale of LKQ stock. The district court dismissed the unjust enrichment claim and granted summary judgment for Rutledge on the contract claims, holding that the non-competition provisions were unreasonable restraints of trade under Illinois law and unenforceable under Delaware law, based on the Court of Chancery's decision in Ainslie v. Cantor Fitzgerald, L.P.The United States Court of Appeals for the Seventh Circuit affirmed the district court's dismissal of the unjust enrichment claim and the summary judgment ruling on the Restrictive Covenant Agreements. However, it was uncertain about the enforceability of the RSU Agreements' forfeiture-for-competition provisions under Delaware law, especially after the Delaware Supreme Court reversed the Court of Chancery's decision in Cantor Fitzgerald. The Seventh Circuit certified two questions to the Delaware Supreme Court regarding the applicability of Cantor Fitzgerald outside the limited partnership context.The Delaware Supreme Court held that the principles from Cantor Fitzgerald, which endorse the employee choice doctrine and prioritize freedom of contract, apply beyond the limited partnership context, including to RSU agreements. The court emphasized that forfeiture-for-competition provisions do not restrict competition or an employee's ability to work and should be treated as enforceable terms subject to ordinary breach of contract defenses. View "LKQ Corp. v. Rutledge" on Justia Law

The case involves Sunder Energy, LLC (Sunder), a solar sales dealer, and its former employee, Tyler Jackson, along with several other defendants. Sunder sought to enforce restrictive covenants against Jackson, who had joined a competitor, Solar Pros LLC, and allegedly recruited Sunder employees to the new company. The restrictive covenants were part of Sunder's operating agreement, which Jackson signed without negotiation or full understanding of its terms.The Court of Chancery of the State of Delaware denied Sunder's motion for a preliminary injunction to enforce the restrictive covenants. The court found the covenants unenforceable for two reasons: they originated from an egregious breach of fiduciary duty by Sunder's principals, and they were facially unreasonable. The court also declined to "blue pencil" the covenants to make them reasonable, citing the overbroad and oppressive nature of the restrictions. Additionally, the court ruled that Utah law governed Sunder's tortious interference claim against Jackson's new employers, which effectively dismissed that claim under Utah law.The Supreme Court of the State of Delaware reviewed the case and affirmed the Court of Chancery's decision in part and reversed it in part. The Supreme Court agreed that the Court of Chancery did not abuse its discretion in refusing to blue pencil the restrictive covenants, given the lack of negotiation, minimal consideration, and the overbroad nature of the covenants. The Supreme Court also upheld the application of Utah law to the tortious interference claim. However, the Supreme Court reversed the Court of Chancery's ruling that the operating agreement was unenforceable as a matter of law, stating that such a determination exceeded the scope of the preliminary injunction stage and should await a complete factual record. View "Sunder Energy, LLC v. Jackson" on Justia Law

The case involves Carl Fowler, an employee at Perdue, Inc., who contracted COVID-19 and sought compensation from his employer. Fowler worked at Perdue from January 2020 until late March 2020. In March 2020, Fowler developed COVID-19 symptoms and was later diagnosed with the virus. He was hospitalized for over two months and suffered severe health complications. Fowler claimed that he contracted the virus at work, specifically in the company's cafeteria, which he described as crowded and likened to a "sardine can."The Industrial Accident Board of the State of Delaware initially denied Fowler's claim, finding that he failed to present sufficient evidence that COVID-19 was a compensable occupational disease. The Superior Court affirmed this decision. Fowler then appealed to the Supreme Court of the State of Delaware.The Supreme Court affirmed the lower court's decision. The court found that while Fowler had established that the cafeteria at Perdue presented a hazard greater than that attending employment in general, he failed to show that the cafeteria was a hazard "distinct from" that attending employment in general. The court concluded that Fowler failed to establish the necessary relationship between his work environment at Perdue and COVID-19 as a "natural incident to" that employment. Therefore, the court held that Fowler's COVID-19 infection was not an occupational disease under these circumstances. View "Fowler v. Perdue, Inc." on Justia Law

In a previous action between these parties, the Delaware Supreme Court addressed whether the exclusive-remedies provision in the workers’ compensation act precluded an injured employee from pursuing recovery from an uninsured motorist policy. After the Court held that the exclusive-remedies provision did not apply, the employer and its workers’ compensation carrier sought a declaratory judgment that they were permitted to assert a lien against any recovery the employee might obtain for injuries already compensated under the workers’ compensation act. The employee and the uninsured motorist insurer contended that any such lien was barred by statute, relying on the Court’s decision in Simendinger v. National Union Fire Insurance Co., 74 A.3d 609 (Del. 2013). The superior court followed that binding precedent as it was required to do and dismissed the declaratory judgment claim. After review however, the Delaware Supreme Court concluded Simendinger was decided in error. The Court therefore reversed the superior court’s decision and held that the workers’ compensation act expressly allowed the employer and its workers’ compensation carrier to assert a subrogation lien against benefits paid to the employee under the employer’s uninsured motorist policy. View "Horizon Services, Inc. v. Henry" on Justia Law

The statute at issue in this appeal, 19 Del. C. § 2322F, provided a mechanism for employers and their workers’ compensation carriers to challenge proposed or provided health care services relating to compensable work injuries. An employer sought review of a superior court opinion reversing a decision by the Industrial Accident Board (the “IAB” or “Board”) regarding the reasonableness of a prescribed course of treatment. The IAB initially dismissed this case as moot, but the superior court reversed and remanded that decision in 2019. On remand, the IAB held that the claimant-employee’s ongoing narcotics treatment after June 2017 was unreasonable, unnecessary, and therefore not compensable under the Workers’ Compensation Act. The superior court then reversed the IAB again, holding there was no justiciable issue before the Board because the claimant employee had not submitted any medical claims to his employer for ongoing treatment. The employer argued the superior court erred as a matter of law in concluding that the IAB could not consider the compensability of an employee’s ongoing narcotics treatment until the employee submitted invoices for payment to the employer and the employer disputed those invoices in the statutory review process. Because the superior court incorrectly interpreted 19 Del. C. § 2322F with respect to the justiciability of the employer’s petition, the Delaware Supreme Court reversed the superior court’s decision, vacated the attorneys’ fees award, and reinstated the IAB’s determination. View "This and That Services Co. Inc. v. Nieves" on Justia Law

A Delaware superior court affirmed an Industrial Accident Board (the “IAB” or “Board”) decision denying Appellant Joseph Wilson’s (“Wilson”) petition seeking payment for a cervical spine surgery. The parties agreed the treatment Wilson received was reasonable and necessary. Wilson was injured in a work-related accident on August 1, 2002 while working for Appellee Gingerich Concrete and Masonry (“Employer”). Sometime after the accident, Wilson started treatment with Dr. Bikash Bose (“Dr. Bose”), a certified Delaware workers’ compensation healthcare provider. Wilson’s injury necessitated two related cervical surgeries. The first surgery was performed while Dr. Bose was certified under the Delaware workers’ compensation system (the “Delaware Certification”) according to the requirements set forth in the Act. Employer’s carrier paid the bills related to Wilson’s first surgery. But Wilson’s first surgery proved unsuccessful, and Dr. Bose recommended a second surgery. During the time between Wilson’s first surgery and his second surgery, Dr. Bose’s Delaware Certification lapsed, and he did not seek re-certification for nineteen months. The issue presented was whether the second surgery was compensable given that the treating physician’s certification under the Delaware Workers’ Compensation Act (the “Act”) had lapsed by the time of treatment. If the treatment was not compensable, as the IAB and superior court held, then Wilson asked the Delaware Supreme Court to anticipatorily resolve the question of whether he could be liable for the bill even though no one asserted such a claim. The Supreme Court concluded Dr. Bose’s lapse rendered him uncertified, and, thus, the disputed bills were not compensable under 19 Del. C. § 2322D. View "Wilson v. Gingerich Concrete & Masonry" on Justia Law

The issue this case presented for the Delaware Supreme Court's review centered on whether the First Amendment barred claims for defamation and tortious interference with contract against a defendant who, in an email to a law firm, described as “shockingly racist” a lawsuit filed by one of the firm’s partners in his personal capacity. The suit aimed to preserve a nearby high school’s “Indian” mascot. The partner, who claimed to have lost his position with the law firm because of the email, sued his detractor, contending that the characterization of his lawsuit was demonstrably false and pled four causes of action, including defamation and tortious interference with contract. The partner’s detractor, in response, contended her statements about the partner were opinions protected by the First Amendment’s Free Speech Clause. The Superior Court agreed with the detractor and dismissed the partner’s tort action. The Supreme Court agreed with the trial court: the statements at issue did not on their face contain demonstrably false statements of fact, nor did they imply defamatory and provably false facts. "As statements concerning an issue of public concern, moreover, they are entitled to heightened First Amendment protection and cannot form the predicate of the plaintiff’s tort claims." View "Cousins v. Goodier" on Justia Law

Appellant Nicholas Kroll appealed the Court of Chancery’s dismissal of his complaint. Kroll was terminated from his position as a police officer for the City of Wilmington (the “City”) on the ground that he failed to comply with a departmental requirement that he reside in the City. A second ground was that he violated a departmental regulation regarding dishonesty by giving a false or inaccurate address on annual, required residency affidavits. After his dismissal, he filed suit seeking a declaratory judgment that the City, its police department, and its mayor, in his official capacity, breached the police Collective Bargaining Agreement (the “CBA”) and his right to due process by modifying the definition of the term “residence” in October 2017, and applying the modified definition to him without giving the Fraternal Order of Police an opportunity to bargain the new definition on behalf of its members. The modification, Kroll argued, was material to the decision to terminate his employment. He also sought an injunction reinstating him as a City police officer with back pay. Appellees moved to dismiss, arguing the Court of Chancery lacked jurisdiction over the complaint’s subject matter. The Appellees argued, in part, that Kroll had an adequate remedy at law in the form of a petition for a writ of certiorari, which was within the jurisdiction of the Superior Court. Appellees had not argued that Kroll’s complaint fell within the CBA grievance procedure (that issue was raised sua sponte by the Court of Chancery in its ruling). The parties agreed the disciplinary action taken against Kroll was not subject to the grievance procedure set forth in the CBA. Appellees agreed the Court of Chancery committed legal error by basing its decision on the CBA’s grievance procedure. They urged the Delaware Supreme Court, however, to affirm on the alternative grounds for dismissal that were asserted in the Court of Chancery. Finding the Court of Chancery did not address Appellees' arguments, the Supreme Court reversed judgment and remanded for further proceedings. View "Kroll v. City of Wilmington" on Justia Law

Claimant Christina Zayas, a paratransit bus driver, sued her employer, DART/State of Delaware (“Employer”), for injuries she sustained in a 2016 work incident where a passenger physically assaulted her (the “Incident”). In 2019, Zayas underwent left shoulder arthroscopic surgery performed by Dr. Evan Crain (“Dr. Crain”). After the surgery, Zayas was placed on total disability from May 2019 through October 2019. Zayas filed Petitions to Determine Additional Compensation Due relating to the Incident. Specifically, she sought payment of medical expenses, total disability benefits, and acknowledgement of the compensability of the surgery Dr. Crain performed in 2019. Zayas’ hearing was scheduled for November 2019. Prior to the Hearing, the parties stipulated that the limited issue in dispute was whether the May 2019 surgery was causally related to the Incident. The Board held that Zayas failed to meet her burden of proof that the surgery in 2019 was causally related to the Incident. Notably, although the Board had excluded them, the Board stated in its Decision that Medical Records by Zayas' physician were admissible. A review of the record indicated the Medical Records were never admitted into evidence; and the Superior Court did not consider this inconsistency, or the issues Zayas had raised regarding the medical testimony and records. Nevertheless, the Superior Court affirmed the Board’s decision and found that substantial evidence existed to support the Board’s legal conclusions. On appeal, Zayas again argued the Board erred by not admitting her Medical Records and that it abused its discretion by admitting the Employer's expert's deposition testimony during the Hearing. The Delaware Supreme Court concluded that because Dr. Tadduni, the Employer's expert, refused to answer relevant questions, Zayas was deprived of the opportunity to elicit relevant information. "In essence, Dr. Tadduni unilaterally determined that he would not answer questions concerning Dr. Cary’s treatment of Zayas. In admitting Dr. Tadduni’s testimony, and simultaneously excluding the Medical Records, the Board’s actions prevented Zayas from adequately presenting her case, violated fundamental notions of fairness, and thereby abused its discretion." As a result, the Supreme Court reversed and remanded the Superior Court's judgment, and remanded for further proceedings. View "Zayas v. Delaware" on Justia Law

Plaintiffs-Appellants worked on banana plantations in Costa Rica, Ecuador, and Panama. They sued the plantations in Delaware in 2012, claiming that while working on the plantations they suffered personal injuries from a pesticide known as 1, 2, Dibromo 3, Chloropropane (“DBCP”). Defendants-Appellees were numerous companies alleged to have caused the Plaintiffs’ exposure to DBCP and their resulting injuries. In 2013 the Superior Court dismissed the Plaintiffs’ complaint under what was sometimes referred to as Delaware’s McWane doctrine (the “Dismissal Order”). On December 31, 2018 Plaintiffs moved to vacate the Dismissal Order under Superior Court Civil Rule 60(b)(6). The Superior Court denied the Plaintiffs’ motion, finding that the motion was untimely and Plaintiffs failed to show extraordinary circumstances for vacating the judgment. Plaintiffs have appealed that order to the Delaware Supreme Court. Finding no reversible error, however, the Supreme Court affirmed the district court. View "Chaverri et al. v. Dole Food Company, et al." on Justia Law