Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

After working at the company for four months, Benes charged his employer with sex discrimination. The EEOC arranged for mediation in which, after an initial joint session, the parties separated and a go-between relayed offers. Upon receiving a settlement proposal that he thought too low, Benes stormed into the room used by his employer’s representatives and said loudly: “You can take your proposal and shove it up your ass and fire me and I’ll see you in court.” The firm fired him. He filed suit under the anti-retaliation provision of Title VII of the Civil Rights Act, 42 U.S.C. 2000e–3(a), abandoning his claim of sex discrimination. A magistrate judge granted the employer summary judgment, finding that Benes had been fired for misconduct during the mediation, not for making or supporting a charge of discrimination. The Seventh Circuit affirmed, stating that section 2000e–3(a) does not establish a privilege to misbehave in mediation, but only bans retaliation “because [a person] has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” View "Benes v. A.B. Data, Ltd." on Justia Law

Johnson Controls, a Wisconsin manufacturer of building management systems and HVAC equipment, and Edman Controls entered into an agreement giving Edman exclusive rights to distribute Johnson’s products in Panama. In 2009, Johnson breached the agreement by attempting to sell its products directly to Panamanian developers, circumventing Edman. Edman invoked the agreement’s arbitration clause. The arbitrator concluded that Johnson had breached the agreement and that Edman was entitled to damages. Johnson sought to vacate or modify the arbitral award, challenging the way in which the award took account of injuries to Edman’s subsidiaries and the arbitrator’s alleged refusal to follow Wisconsin law. The district court ruled in Edman’s favor. The Seventh Circuit affirmed and upheld the district court’s award of attorney fees. View "Johnson Controls, Inc. v. Edman Controls, Inc." on Justia Law

Sanchez sued her employer for sex discrimination, sexual harassment, and retaliation under Title VII of the Civil Rights Act. Before trial, Sanchez accepted an offer of judgment under Federal Rule of Civil Procedure 68, which permits a defendant to serve on an opposing party “an offer to allow judgment on specified terms, with the costs then accrued.” If the offer is rejected and the “judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The district court entered judgment in Sanchez’s favor but denied her request for attorney fees and costs in addition to the amount specified in theoffer. The employer’s offer said that it included “all of Plaintiff’s claims for relief” but made no specific mention of costs or attorney fees. The Seventh Circuit reversed; the Rule 68 offer was silent as to costs and fees, so costs and fees were not included. Offers of judgment under Rule 68 are different from contract offers; plaintiffs who receive Rule 68 offers are “at their peril whether they accept or reject a Rule 68 offer.” Therefore, any ambiguities are resolved against defendants. View "Sanchez v. Prudential Pizza, Inc." on Justia Law

The railroad fired a locomotive engineer, Narron. The union filed a grievance, which eventually came before the National Railroad Adjustment Board, which ordered the railroad to reinstate Narron with back pay but authorized the railroad to offset the back pay by any earnings that he had obtained between his firing and his reinstatement. The union filed a petition in the district court challenging that part of the award. The district judge remanded for determination of whether Narron had had any such earnings and ordered the earnings-offset provision vacated. The Seventh Circuit vacated the order, holding that the district court exceeded its authority. A district court may set aside a Board order only “for failure of the division to comply with the requirements of [the Railway Labor Act]” or “to conform, or confine itself, to matters within the scope of the division’s jurisdiction,” or “for fraud or corruption by a member of the division,” 45 U.S.C. 153. View "Bhd of Locomotive Eng'rs & Trainment v. Union Pac. R.R. Co." on Justia Law

Illini Concrete formally ceased doing business in October 2009 and sold certain of its assets, including delivery trucks, to Kienstra. The Teamsters Local Union, which represents concrete mixer drivers and others employed by Illini and then by Kienstra, alleged that Kienstra laid off 14employees, declined to make good on Illini’s unfunded liability to its employees’ union pension fund, subcontracted work to competitors to avoid hiring back union employees,and refused to hear grievances regarding the asset sale and its effect on the employees. The Union claimed that the asset sale was a ruse to allow Illini to evade obligations under its collective bargaining agreement and sought a declaration that Kienstra is Illini’s alter ego, bound by the CBA. The district court denied motions to compel arbitration. Kienstra and Illini Concrete filed an interlocutory appeal. The Seventh Circuit dismissed for lack of appellate jurisdiction, citing the Federal Arbitration Act, 9 U.S.C. 1, which states that “nothing [in the FAA] shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” View "Int'l Bhd. of Teamsters, Local Union No. 50 v. Kienstra Precast, LLC" on Justia Law

In 2006, plaintiff was a citizen of California and agreed to relocate to Illinois to work for defendant. When he quit about five months after moving, his family was still in California. He filed suit in state court, seeking relocation benefits the company allegedly promised. The company, which has its principal place of business in California removed to federal court, asserting that plaintiff was a citizen of Massachusetts. Plaintiff had a home in Massachusetts when the case was removed, was registered to vote there, and had a Massachusetts driver's license. The district court ordered arbitration under one of the contracts between the parties. The Seventh Circuit affirmed dismissal and denied sanctions. Relocation benefits are "employment related" and subject to arbitration under the agreement. The court noted that the company also failed to follow the rules. The company "should be able to tell the difference between residence and domicile, and should not have any difficulty complying with Rule 38."

Plaintiff entered into a two-year wireless service agreement with First Cellular in 2005. The company was acquired by defendant, which began dismantling and reorganizing. Plaintiff initially agreed to defendant's terms, but later filed a class action, claiming breach of contract for rendering his phone and equipment useless and refusing to honor the features and prices of the First Cellular Agreement. He also claimed deceptive rade practices under Illinois law and civil conspiracy. The district court denied defendant's motion to compel arbitration. The Seventh Circuit reversed, finding that defendant's arbitration clause applies because part of the claims are based on services and products received under defendant's contract. Defendant's contract unambiguously covers any dispute "arising out of" or "relating to the services and equipment." If a contract provides for arbitration of some issues, any doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as a matter of federal law, 9 U.S.C. 2.

Defendant is a captive insurer owned by plaintiff plans across the nation. In 2003 healthcare providers filed class action suits in Florida against all of those plans. Twelve plans, which had errors-and-omissions insurance from defendant, asked it to assume the defense and indemnify. Defendant declined, and the plans demanded arbitration. Acting under the Federal Arbitration Act, 9 U.S.C. 5, the district court held that the arbitrators could determine whether arbitration of a class action or consolidated arbitration were authorized by contract and appointed a third arbitrator. The court dismissed the appeal of the court's first ruling for lack of jurisdiction and affirmed the appointment. If defendant wanted a judge to decide whether the plans' demands should be arbitrated jointly or separately, it should have refused to appoint an arbitrator. Both sides appointed arbitrators, however, and the proceeding got under way. Nothing in the Federal Arbitration Act authorizes anticipatory review of the arbitrators' anticipated decisions on procedural questions.

The parties, involved in patent infringement cases, agreed to a settlement that required dismissal of their lawsuits and included an arbitration provision and request that a bank subordinate its interests in defendant's patents to the settlement. Defendant stated that the bank had agreed; the parties executed the agreement and dismissed their suits. When plaintiff became aware that the bank would not cooperate, defendant demanded arbitration, but plaintiff went to court to vacate dismissal of its claims and seek compliance with the agreement. The court dismissed for lack of subject matter jurisdiction. Before the Federal Circuit ruled on an appeal, the parties participated in mediation. Plaintiff took a voluntary dismissal, then filed new claims, including claims against defendant's bank and attorneys, claiming that defendant and its attorneys lied or the bank reneged on its commitment. The district court held that defendant had waived its right to arbitrate and that the bank and attorneys, not parties to the settlement, could not be compelled to arbitrate. The Seventh Circuit reversed in part, holding that defendant's participation in earlier litigation did not amount to waiver under the Federal Arbitration Act. 9 U.S.C. 1, and vacated with respect to the bank and attorneys. Plaintiff may want to arbitrate with those parties if it must arbitrate with defendant.

In 1992 two companies began a joint venture to develop peptide compounds. The agreement provides that inventions created by joint efforts are jointly owned, but inventions attributable to a single party are owned by that party and that disputes will be arbitrated. In court-ordered arbitration, a panel decided that a certain group of patents are jointly owned, but that another group is owned by defendant. The district court confirmed those rulings, but vacated a ruling in defendant's favor on foreign patents. Holding that appeal is authorized by 9 U.S.C. 16(a)(1)(E), and that the dispute does not concern patent law, but is a contract issue, the Seventh Circuit reversed. The Federal Arbitration Act authorizes a court to vacate an award for any of four reasons, 9 U.S.C. 10(a); a conclusion that the arbitrators disregarded the law by failing to discuss the foreign patents separately from the domestic patents did not justify vacating the award. The judge mistakenly inferred from silence that the arbitrators must have had an extra-contractual ground; the arbitrators had no reason to discuss the foreign patents separately from the domestic patents.