Justia Alabama Supreme Court Opinion Summaries

Articles Posted in Labor & Employment Law
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Cobbs, Allen & Hall, Inc. ("Cobbs Allen"), and CAH Holdings, Inc. ("CAH Holdings") (collectively,"CAH"), appealed the grant of summary judgment entered in favor of EPIC Holdings, Inc. ("EPIC"), and EPIC employee Crawford E. McInnis, with respect to CAH's claims of breach of contract and tortious interference with a prospective employment relationship. Cobbs Allen was a regional insurance and risk-management firm specializing in traditional commercial insurance, surety services, employee-benefits services, personal-insurance services, and alternative-risk financing services. CAH Holdings was a family-run business. The families, the Rices and the Densons, controlled the majority, but pertinent here, owned less than 75% of the stock in CAH Holdings. Employees who were "producers" for CAH had the opportunity to own stock in CAH Holdings, provided they met certain sales thresholds; for CAH Holdings, the equity arrangement in the company was dictated by a "Restated Restrictive Stock Transfer Agreement." For several years, McInnis and other individuals who ended up being defendants in the first lawsuit in this case, were producers for CAH, and McInnis was also a shareholder in CAH Holdings. In the fall of 2014, a dispute arose between CAH and McInnis and those other producers concerning the management of CAH. CAH alleged that McInnis and the other producers had violated restrictive covenants in their employment agreements with the aim of helping EPIC. Because of the dispute, CAH fired McInnis, allegedly "for cause," and in November 2014 McInnis went to work for EPIC, becoming the local branch manager at EPIC's Birmingham office. After review, the Alabama Supreme Court affirmed the circuit court's judgment finding CAH's breach-of-contract claim against McInnis and EPIC failed because no duty not to disparage parties existed in the settlement agreement. EPIC was not vicariously liable for McInnis's alleged tortious interference because McInnis's conduct was not within the line and scope of his employment with EPIC. EPIC also was not directly liable for McInnis's alleged tortious interference because it did not ratify McInnis's conduct as it did not know about the conduct until well after it occurred. However, the Supreme Court disagreed with the circuit court's conclusion that McInnis demonstrated that he was justified as a matter of law in interfering with CAH's prospective employment relationship with Michael Mercer. Based upon the admissible evidence, an issue of fact existed as to whether McInnis gave Mercer honest advice. Therefore, the judgment of the circuit court was affirmed in part, reversed in part, and the matter remanded for further proceedings. View "Cobbs, Allen & Hall, Inc., and CAH Holdings, Inc. v. EPIC Holdings, Inc., and McInnis." on Justia Law

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Mark Caton appealed the grant of summary judgment entered in favor of the City of Pelham ("the City"), in his action alleging retaliatory discharge against the City. In approximately 2001, he was hired as a police officer by the City. In 2004, while he was still a police officer, Caton injured his neck when he was wrestling with a suspect. Caton did not receive treatment for his neck at the time, but the pain from the injury gradually increased. In April 2006, Caton transferred from the Police Department to the Pelham Fire Department. In 2012, Caton had a vertebrae-fusion surgery. In 2015 and 2016, Caton would have periods of excruciating pain leading to unexcused absences from work. He received reprimands and suspensions. Caton would consult with multiple doctors and pain specialists for rehabilitation therapy and pain management each time he was reinjured as a result of his work. In 2016, Caton was referred to Dr. Michelle Turnley, a physiatrist at the Workplace Occupational Health Clinic located on the campus of the University of Alabama at Birmingham ("UAB"). Dr. Turnley and Caton tell differing stories of an encounter at the UAB clinic September 2016. Caton testified that he asked Dr. Turnley for pain medication for the next time his pain became too intense, but Dr. Turnley reminded Caton that on his first visit he had not signed a pain contract and he had refused to provide a urine sample, so she declined to give him pain medication. Caton denied the doctor's account, but Dr. Turnley's clinical notes described her encounter with Caton as him being "fairly aggressive requesting pain medication... he was fairly loud and refused to leave the clinic and UAB police were called. ... He did not appear to have any functional deficits. Additionally, someone in the waiting room saw him sling the door open like he was about to 'pull it off the hinges'; therefore, obviously he has no strength deficits." In October, Dr. Turnley sent Caton a letter dropping him as a patient. By November, the City terminated Caton's employment, citing in part, the visit to Dr. Turnley's office. His unemployment application was denied because of his discharge from the City for misconduct. Caton sued, alleging procedural issues with the unemployment compensation hearing, adding a retaliatory-discharge claim. The trial court entered summary judgment in favor of the City, finding Caton had a full opportunity to litigate his retaliatory-discharge claim at the unemployment hearing, thus he was barred from raising it again by collateral estoppel. The Alabama Supreme Court determined application of collateral estoppel did not violate Caton's right to a trial by jury, and concurred estoppel barred his retaliatory-discharge claim against the City. "Caton does not present any other reason why the trial court's judgment should be reversed. Therefore, we affirm summary judgment in favor of the City." View "Caton v. City of Pelham" on Justia Law

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The Jefferson County, Alabama Board of Education ("the Board") and several of its employees sought to avoid the application of an occupational tax imposed by the City of Irondale ("City"). The Board and its employees argued that public-school employees were exempt from the occupational tax because, they contended they provided an essential government service. "But the importance of a state employee's role, even a role as important as a public-school employee, does not remove that employee's obligation to pay a duly owed occupational tax." The Alabama Supreme Court affirmed the trial court's judgment in favor of the City. View "Blankenship et al. v. City of Irondale" on Justia Law

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Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

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Cynthia Anthony, former interim president of Shelton State Community College; William Ashley, then-president of Shelton State; and Jimmy Baker, chancellor of the Alabama Community College System ("the ACCS") (collectively, "the college defendants"), appealed a circuit court judgment entered in favor of Khristy Large and Robert Pressley, current instructors at Shelton State, and Scheree Datcher, a former instructor at Shelton State (collectively, "the instructor plaintiffs"). Large and Pressley were instructors in the Office Administration Department ("OAD") at Shelton State; Datcher was an OAD instructor, now retired. Under college policy, an instructor was placed into one of three groups based on the instructor's "teaching area": Group A, Group B, or Group C. After an instructor was placed into a group, the instructor was ranked within the group for salary purposes according to criteria listed in the policy. The primary issue in this case was whether the instructor plaintiffs should be placed in Group A or Group B. In 2013, Joan Davis, then-interim president of Shelton State, concluded that Datcher and Pressley should have been reclassified from Group A to Group B, contrary to their credentialing document. Datcher and Pressley received higher salaries by being reclassified to Group B. When Large was hired to be an OAD instructor in 2013, she was also placed in Group B. In 2016, Chancellor Heinrich directed Anthony, then interim president, to review instructors' classifications to make sure they were properly classified. Anthony determined the instructor plaintiffs should have been classified as Group A, in accordance with the credentialing document. Thus, she reclassified the instructor plaintiffs to Group A, which resulted in decreased salaries. The trial court entered a judgment in favor of the instructor plaintiffs, concluding that they are properly classified in Group B under the policy and ordering that the instructor plaintiffs be placed in Group B. The trial court also awarded the instructor plaintiffs backpay for the period following Anthony's reclassification, during which they were classified as Group A instead of Group B. The Alabama Supreme Court determined the placement of OAD instructors in Group A was "plainly incorrect." Because the college defendants lacked discretion to classify the instructor plaintiffs as Group A, the claims for backpay against them in their official capacities were not barred by the doctrine of State immunity. When Anthony left her position as interim president, her successor was automatically substituted for her with respect to the official-capacity claims alleged against her; judgment should not have been entered against her. Therefore, judgment was reversed insofar as it was entered against Anthony. The judgment was affirmed in all other respects. View "Anthony et al. v. Datcher, et al." on Justia Law

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Synergies3 Tec Services, LLC ("Synergies3"), and DIRECTV, LLC ("DIRECTV"), appealed a circuit court judgment in favor of Lisa Corvo and Thomas Bonds and against Synergies3 and DIRECTV based on the doctrine of respondeat superior and a claim alleging negligent hiring, training, and supervision. Corvo and her fiance Bonds sued Daniel McLaughlin, Raymond Castro, and DIRECTV in the trial court, asserting claims of conversion and theft as to a diamond that had been removed from an engagement ring and $160 cash that, they alleged, had been taken from the master bedroom of Corvo's house on Ono Island when McLaughlin and Castro, employees of Synergies3, installed DIRECTV equipment in Corvo's house. Corvo and Bonds asserted the conversion and theft claims against DIRECTV under the doctrine of respondeat superior and, in addition, asserted claims against DIRECTV of negligent and wanton hiring, training, and supervision. They also sought damages for mental anguish and punitive damages. While the Alabama Supreme Court found the trial court did not err in denying Synergies3 and DIRECTV's motion for a judgment as a matter of law as to Corvo and Bonds's claim of negligent hiring, training, and supervision of Castro, but that punitive damages were improperly awarded. Judgment was reversed insofar as it held Synergies3 and DIRECTV vicariously or directly liable on the claims of theft and conversion, and insofar as it awarded punitive damages. The judgment was affirmed insofar as it held Synergies3 and DIRECTV liable for the negligent hiring, training, and supervision of Castro and awarded compensatory and mental-anguish damages. View "Synergies3 Tec Services, LLC, et al. v. Corvo" on Justia Law

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Joshua Rogers appealed a preliminary injunction preventing Rogers from soliciting any employees or clients of Burch Corporation, his former employer, as contractually agreed to under restrictive covenants in an employment agreement. The Alabama Supreme Court determined there was nothing justiciable concerning the preliminary injunction because the nonsolicitation clause in the employment agreement expired, at the latest, on December 6, 2019. Therefore, the case was moot and the Court dismissed the appeal. View "Rogers v. Burch Corporation" on Justia Law

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Justin Craft and Jason Craft appealed the grant of summary judgment entered in favor of members of the Lee County Board of Education ("the Board") and the Superintendent of the Lee County Schools, Dr. James McCoy. During July, August, and September 2016, the Board hired S&A Landscaping to perform three projects of overdue lawn maintenance at Lee County schools. S&A Landscaping was owned by an aunt by marriage of Marcus Fuller, the Assistant Superintendent of the Lee County Schools. The Crafts, who were employed as HVAC technicians by the Board, questioned the propriety of hiring S&A Landscaping for those projects. The Crafts expressed their concerns with various current and former Board members and individuals at the State Ethics Commission ("the Commission") and at the Alabama Department of Examiners of Public Accounts. Although an individual at the Commission instructed Jason Craft on how to file a complaint with the Commission, neither of the Crafts did so. During this time, McCoy, Fuller, and others suspected various maintenance employees, including the Crafts, of misusing their Board-owned vehicles and misrepresenting their work hours. To investigate their suspicions, the Board had GPS data-tracking devices installed in Board-owned vehicles being used by employees to monitor their use and the employees' activities. A review of the GPS data indicated that certain employees, including the Crafts, had violated Board policy by inappropriately using the Board-owned vehicles and by inaccurately reporting their work time. McCoy sent letters to the Crafts and two other employees, advising them that he had recommended to the Board the termination of their employment. The letters detailed dates, times, and locations of specific incidents of alleged misconduct. The Crafts were placed on administrative leave, then returned to work to custodial positions that did not require them to use Board-owned vehicles. The Crafts appealed their job transfers, arguing they had not been afforded due process. An administrative law judge determined the Students First Act did not provide an opportunity for a hearing before the imposition of a job transfer. The Crafts thereafter sued the Board members and McCoy, seeking declaratory relief based on alleged violations of the anti-retaliation provision of section 36-25-24, Ala. Code 1975, arguing that they were punished for contacting the Commission. The Alabama Supreme Court determined the anti-retaliation protection was triggered only when an employee filed a complaint with the Commission. Because it was undisputed the Crafts did not file a complaint, they were not entitled to those statutory protections. Therefore, summary judgment in favor of the Board and McCoy was affirmed. View "Craft v. McCoy et al." on Justia Law

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Drury Hotels Company, LLC ("Drury"), petitioned the Alabama Supreme Court for a writ of mandamus to direct the Montgomery Circuit Court to dismiss Maritza Diaz's tort claims against Drury. Diaz worked as a housekeeper at Drury's hotel in Montgomery. In her complaint, Diaz alleged that she was working at the hotel when she was attacked by an unknown assailant. Diaz alleged that the assailant "sexually assaulted and robbed [her] by placing a knife to her throat, threatening to harm [her], attempting to force [her to] have sexual intercourse and taking approximately $200 in property from [her]." Diaz further claimed that the assault caused her serious bodily injuries, emotional distress, and mental anguish. In December 2018, Diaz sued Drury, alleging claims of negligence and wantonness based on allegations that Drury had failed to provide a secure workplace. Diaz also alleged a claim of negligence based on the theory of premises liability, and she alleged claims against fictitiously named parties. As an alternative to her tort claims, Diaz also alleged a claim for workers' compensation benefits under the Act if her injuries are in fact covered under the Act. Given the procedural posture of this case and the arguments presented, the Supreme Court concluded Drury did not establish a clear legal right to mandamus relief. Thus, Drury's petition for a writ of mandamus was denied. The Court made no conclusion regarding whether Drury could ultimately be entitled to immunity under the exclusive-remedy provisions of the Act. View "Ex parte Drury Hotels Company, LLC." on Justia Law

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William DeVos, M.D., and Donald Simmons, M.D. (collectively, "the doctors"), appealed a preliminary injunction entered in an action filed against them by The Cunningham Group, LLC, and Cunningham Pathology, LLC. The doctors separately appealed the trial court's order denying their request to increase the amount of the surety bond for the imposition of the injunction. According to the complaint, the doctors had been employed by The Cunningham Group from April 30, 2007, until August 31, 2018, when the doctors terminated their employment without prior notice. The Cunningham Group, also identified in the complaint, other pleadings, and documents in the record as "Services LLC," provided pathology and cytology services through an agreement with Cunningham Pathology. The doctors entered into employment agreements with Services LLC in 2007, in which they agreed that, if they provided Services LLC less than 12 months' notice of their termination of their employment, they would pay Services LLC an amount equal to one year's annual salary. The doctors also agreed that, for a period of two years after the termination of employment, they would not directly or indirectly solicit any of Cunningham/Services' clients or referral sources without prior consent of Cunningham/Services. Cunningham asserted that Cunningham Pathology was an express third-party beneficiary of the doctors' employment agreements with Services LLC, and asserted claims of breach of contract and breach of fiduciary duty and sought to enforce the restrictive covenants contained in the employment agreements. Cunningham also filed a motion seeking a preliminary injunction to prohibit the doctors from violating the nonsolicitation provisions of the employment agreements. The Alabama Supreme Court found that the doctors would still be required to prove their actual damages should it later be determined that they were wrongfully enjoined. "[A]t this stage the trial court should be concerned only with setting an injunction bond amount that would adequately cover the doctors' prospective costs, damages, and attorney fees if it is later determined that the doctors were wrongfully enjoined." The Supreme Court found that based on the evidence presented to the trial court, a $25,000 injunction bond was "simply inadequate to compensate two physicians for damages and attorney fees in the event it is determined that they were wrongfully enjoined from soliciting and continuing to serve Brookwood through their new pathology business." The trial court's order denying the doctors' request to increase the amount of the injunction bond was reversed, and the case remanded for the trial court to increase the injunction-bond amount. View "DeVos v. Cunningham Group, LLC" on Justia Law