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

A new union of ARC blood collection specialists was elected in 2007 and certified in 2010. During the unionization process, ARC filed repeated objections, ultimately overruled by the National Labor Relations Board, delaying certification. During the delay, ARC made changes in its union-represented employees’ terms of employment without notice to or bargaining with the new union, including: suspending merit pay increases; discontinuing matching contributions to the employees’ 401(k) plan; closing its defined pension plan to new employees; changing health insurance benefits; promoting team leaders to team supervisors and having them continue to perform unit work; reassigning truck loading work outside the bargaining unit; decreasing the number of personal time-off hours an employee can carry over; and allowing non-unit employees to perform bargaining unit work. As a result, worker involvement in union activities declined. Some employees feared retaliation and some were discouraged by the union’s failure to prevent ARC’s changes. An ALJ held that ARC violated 29 U.S.C. 158(a)(5). The district court ordered rescission of ARC’s failure to grant scheduled merit pay increases and a temporary injunction prohibiting further unilateral changes. The Seventh Circuit affirmed in part, but remanded for entry of the additional injunctive relief sought by the NLRB. View "Harrell. v. Am. Red Cross, Heart of Am. Blood Servs. Region" on Justia Law

Retirement accounts are exempt from creditors’ claims in bankruptcy, 11 U.S.C. 22(b)(3)(C) and (d)(12). The debtor inherited, from her mother, a non-spousal individual retirement account worth about $300,000. The bankruptcy court held that the inherited IRA was not exempt from claims by the debtor’s creditors. The district court reversed. Noting a conflict with other circuits, the Seventh Circuit reversed, reinstating the bankruptcy court holding. The court noted that while it remains sheltered from taxation until the money is withdrawn, many of the account’s other attributes changed. No new contributions can be made, and the balance cannot be rolled over or merged with any other account. 26 U.S.C. 408(d)(3)(C); instead of being dedicated to the debtor/heir’s retirement years, the inherited IRA must begin distributing its assets within a year of the original owner’s death. 26 U.S.C. 402(c)(11)(A). View "Rameker v. Clark" on Justia Law

Central States is a multiemployer pension plan for members of the Teamsters union in the eastern half of the U.S. Ready Mix employed Teamsters labor and participated in the Central States plan. In 2007 Ready Mix ceased employing covered workers and incurred $3.6 million in withdrawal liability to fully fund its pension obligations. Two affiliated companies under common control by Nagy, the owner of Ready Mix, conceded liability for the shortfall under the Employee Retirement Income Security Act, as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. 1301(b)(1). The district court concluded that Nagy held and leased property to Ready Mix as a passive investment, not a trade or business, so the leasing activity did not trigger personal liability, but that Nagy’s work as a manager for a country club was as an independent contractor, not an employee, and this activity qualified as a trade or business under section 1301(b)(1), which was enough for personal liability. The Seventh Circuit affirmed, holding that Nagy’s leasing activity is categorically a trade or business for purposes of personal liability under 1301(b)(1). View "Cent. States SE & SW Areas Pension Fund v. Nagy" on Justia Law

In 2005 Smith was charged with impersonating a police officer and was detained in the Sangamon County Detention Facility pending trial. Because he had a parole hold and a history of problems during a prior detention, Smith was housed in a maximum-security cellblock. While there, he was severely beaten by another inmate who was awaiting trial on armed-robbery and aggravated-battery charges. Smith filed suit under 42 U.S.C. 1983 claiming that the Department’s approach to classifying inmates for cellblock placement ignores serious risks to inmate safety by failing to separate “nonviolent” from “violent” inmates with assaultive tendencies. A magistrate entered summary judgment for the Sheriff’s Department. The Seventh Circuit affirmed. To avoid summary judgment, Smith needed evidence that the jail’s security classification policy systematically fails to address obvious risks to inmate safety. He had no such evidence. View "Smith v. Sangamon Cnty. Sheriff's Dep't" on Justia Law

Plaintiffs filed a putative class action, claiming that fiduciaries for their retirement plans violated the Employee Retirement Income Security Act, 29 U.S.C. 1001, by continuing to offer employer stock as an investment option while the stock price dropped. The individual retirement account plan at issue allowed employees to choose among more than 20 investment funds with different risk profiles that had been selected by plan fiduciaries. ERISA imposes on the fiduciaries a duty to select only prudent investment options. One of the investment options in the Plan was the M&I Stock Fund, consisting of M&I stock, under an Employee Stock Ownership Plan. In 2008- 2009, M&I’s stock price dropped by approximately 54 percent. The district court applied a presumption of prudence, found that plaintiffs’ allegations could not overcome it, and dismissed without addressing class certification. The Seventh Circuit affirmed, stating that plaintiffs’ theory would require the employer and plan fiduciaries to violate the plan’s governing documents and “seems to be based often on the untenable premise that employers and plan fiduciaries have a fiduciary duty either to outsmart the stock market, which is groundless, or to use insider information for the benefit of employees, which would violate federal securities laws.” View "White v. Marshall & Ilsley Corp." on Justia Law

Collins fled police officers by car and then by foot after he was stopped for speeding. An officer kicked Collins repeatedly and dosed him with pepper spray, but Collins did not stop resisting until another officer deployed his Taser. Afterward, the officers discovered a bag containing crack and powder cocaine that Collins had discarded during the foot chase, and a wad of cash in his pocket. The district court denied a motion to suppress, reasoning that use of excessive force during an arrest is not a basis for suppressing evidence and that the drugs and money were not seized as a result of the alleged use of excessive force. The Seventh Circuit affirmed. View "United States v. Collins" on Justia Law

Majors worked at GE’s Bloomington plant for 32 years. In 2000, she suffered a work-related injury to her right shoulder that left her limited to lifting no more than 20 pounds and precluded her from work above shoulder level with her right arm. The restrictions were considered temporary at first, but according to her medical file maintained by GE, the restrictions later were determined to be permanent. After GE denied her temporary and permanent positions to which she was otherwise entitled under the seniority-based bidding procedure, Majors sued under Americans with Disabilities Act, 42 U.S.C. 12101 and Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, claiming retaliation for filing EEOC charges after being denied hours, and that GE constructively discharged her when she elected to retire. The district court granted GE summary judgment. The Seventh Circuit affirmed. Majors couldn’t perform an essential function of the position she sought without an accommodation that was not reasonable and presented insufficient evidence of retaliation. View "Majors v. Gen. Elec. Co." on Justia Law

Lees was sexually assaulted in her Carthage dorm room by men she believed to be Carthage students. She brought a negligence action against the college, seeking to introduce the opinion testimony of Dr. Kennedy, a premises-security expert, as evidence of the standard of care for campus safety. Kennedy was to testify that there were numerous security deficiencies at Carthage and at Lees’s residence hall, that there was history of sexual assault at the school, and that Carthage fell short of recommended practices in campus security. The district court excluded Kennedy’s testimony, finding that the industry standards were only aspirational and failed to account for variation between different academic environments and that recent sexual assaults at Carthage involved acquaintance rape, while the Lees attack was stranger rape; the court entered summary judgment for Carthage. The Seventh Circuit vacated, finding proposed testimony about standards published by the International Association of Campus Law Enforcement Administrators admissible under Rule 702 and not unreliable merely because the standards are aspirational; the standards represent an authoritative statement by premises-security professionals regarding recommended practices. Testimony about the absence of a “prop alarm” on the dorm’s basement door also reflects application of reliable principles and methods to the specific facts of the case. View "Lees v. Carthage Coll." on Justia Law

The 401(k) services industry engages in “revenue sharing,” an arrangement allowing mutual funds to share a portion of the fees that they collect from investors with entities that provide services to the mutual funds, the investors, or both. Until recently the practice was opaque to individual investors and many 401(k) plan sponsors. As the existence and extent of revenue sharing has become more widely known, lawsuits were filed, alleging that the practice violates the Employee Retirement Income Security Act of 1974 (ERISA). The district court awarded summary judgment to AUL, an Indiana-based insurance company that offers investment, record-keeping, and other administrative services to 401(k) plans. The court ruled that AUL was not a fiduciary of the Leimkuehler Profit Sharing Plan with respect to AUL’s revenue-sharing practices. The Seventh Circuit affirmed. Although “very little about the mutual fund industry or the management of 401(k) plans can plausibly be described as transparent,” AUL is not acting as a fiduciary for purposes of 29 U.S.C. 1002(21)(A) when it makes decisions about, or engages in, revenue sharing. View "Leimkuehler v. Am. United Life Ins. Co." on Justia Law

Days after a widely-publicized threat by a Florida pastor to burn 200 copies of the Quran on the 2010 anniversary of the September 11 terrorist attacks, Conaway posted on Facebook his plans to burn the “holy quaran” and invited people to witness the event at his home address. Conaway then began making phone calls to an imam and government officials, repeating his threats to burn the Quran and threatening other violent acts. These calls culminated in a standoff at Conaway’s home, with response by more than 12 agencies and evacuation of the street. His threats, including a promise blow up the entire block, were bogus; a device strapped to his chest held squares of putty, not explosive C-4. He was sentenced to concurrent sentences of 60 months’ imprisonment after pleading guilty to making false threats to detonate an explosive device, 18 U.S.C. 1038(a)(1), and influencing a federal official by threat, 18 U.S.C. 115(a)(1)(B). The Seventh Circuit affirmed. The trial court “simply concluded that it was appropriate to assign more weight to the extraordinary nature of the crime and the need to protect the public” from Conaway’s escalating pattern of menacing behavior than to Conway’s claims of mental illness. View "United States v. Conaway" on Justia Law