The Sixth Circuit recently followed a line of precedent (and other more recent decisions from the Sixth Circuit) and reversed a 2017 Northern District of Ohio decision finding certain collective bargaining agreements vested plaintiffs with lifetime healthcare benefits, reports Seyfarth Shaw in its ERISA & Employee Benefits Litigation Blog.

The court found that the CBAs covering the retirees lacked clear, affirmative language that Whirlpool had an obligation to fund their health benefits after the expiration of the agreements’ general durational clause.

The court ruled that “either a CBA says clearly and affirmatively — that is unambiguously — that its general durational clause doesn’t control the termination of healthcare benefits, or the clause controls.”

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In a post for Above the Law, Tom Kulik of Dallas-based Scheef & Stone discusses what happens when a bankruptcy debtor exercises its statutory right to reject a contract.

The U.S. Supreme Court recently heard oral arguments in Mission Product Holdings Inc. v. Tempnology, LLC to address this question that has plagued the intersection of intellectual property and bankruptcy law for decades.

He writes that the supreme Court’s ruling on the issue “may draw a clear line for trademark licensors and licensees in the event of bankruptcy (a good thing), or leave a blot on the issue by finding that the issue is moot (a bad thing).”

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The U.S. Court of Appeals for the Seventh Circuit held that merely requiring extrinsic evidence to interpret a provision of a form contract does not render class certification improper, and that absent a more thorough explanation of its reasoning from the trial court, it could not uphold the trial court’s ruling decertifying the class.

As a result, explains Jeffrey Karek in the Maurice Wutscher’s Consumer Financial Services Blog, the Seventh Circuit vacated the decision of the trial court and remanded for further proceedings.

His article gives the facts in Red Barn Motors, Inc. v. NextGear Capital, Inc. and traces the litigation through the courts.

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The Supreme Court of Texas is considering whether to grant a petition for review to establish whether an indemnity provision covers only third-party claims, not first-party claims, unless the provision unequiv­oc­al­ly states otherwise, writes D.C. Toedt III in the On Contracts blog.

He describes the case of Claybar v. Samson Exploration LLC, in which a property owner sued Samson for alleged damage to the property during oil and gas drilling. Claybar settled with Samson’s contractor but still claimed Samson was con­tract­ually required to indemnify Claybar for the attorney’s fees and costs that Claybar had incurred in pursuing his negligence claim.

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A recent ruling in an Alabama federal court illustrates how having a valid independent contractor agreement is not necessarily an impenetrable magic shield automatically rendering misclassification claims null and void, according to Fisher Phillips’ Gig Employer Blog.

Partner Richard Meneghello describes the case in which a company’s former worker claimed that he faced discrimination on account of his race, gender, and age during his three months on the job. The company, however, countered that the plaintiff had been an independent contractor and did not have legal standing to bring employment discrimination claims under Title VII or the ADEA.

The company also citied an independent contractor agreement, confirming that the worker was a contractor and had no employment rights. The plaintiff cited work requirements that would have been appropriate for an employee.

“When the two were compared—the world contained in the contractor agreement against the reality as alleged by Nemo’s complaint and evidence—the court found inconsistencies that led it to rule in [the plaintiff’s] favor,” Meneghello writes.

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An indemnity is a powerful risk allocation tool that deserves careful attention and a critical eye, both in terms of subject matter and administration, writes Kathleen Wergzyn for Foley & Lardner’s Manufacturing Industry Advisor.

She explains that a warranty and an indemnity are two different tools serving two different purposes.

The article discusses the breadth, duty to defend, and remedies related to indemnification and warranty.

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A website post by Jesse P. Elison of Fox Rothschild attempts to place in context negotiation processes by highlighting the significance of parties’ intentions to contracts.

“[H]ow often do parties, even sophisticated parties represented by counsel, intend all the terms of a contract? The answer partially depends upon whether intention and agreement are equivalents. If they are, the answer is most of the time, but if they are not, the task becomes one chiefly of interpretation—a topic for another day.”

His article explains that developing skills that get the best representation of your intentions into an agreement can yield long-term benefits.

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In a post on the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo website, Gilbert A. Samberg discusses the question: What if a contracting party fails to appear to seek enforcement of an enforcement clause?

“At least two New York State trial courts tell us that your unexcused default in responding to a summons and complaint can be deemed a waiver of a contractual right to arbitrate,” he writes.

Courts in those cases granted default judgments on contract claims in such circumstances notwithstanding that the contracts in question contained arbitration clauses.

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A client alert from Neal, Gerber & Eisenberg offers some advice on negotiating a demolition contract. Such contracts can arise when a big box retailer or a shopping center needs to be demolished to make room for a building more suited to a new use.

The article’s advice covers 12 topics, including the selection of the demolition contractor, dates of commencement and completion of the work, contract documents, the contract sum, payments, dispute resolution, insurance and bonds, indemnification, termination rights, the contractor’s warranty, safety compliance, and disposal of debris.

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When drafting executive agreements, it is easy to focus almost exclusively on benefits and wages, the popular areas, without properly addressing some of the legal concerns that have grown over the last several years, warns Jo Ellen Whitney in a post on the Davis Brown Employment and Labor Blog.

In the article, she cautions against using outdated templates for contracts. She points out that “a template for C Suite positions is not the same as the template or agreements that you might use for front line employees.”

She also discusses determining benefits, termination, disability, bonuses, renewal, and restrictive covenants.

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While the rule denying the award of “punitive” or “exemplary” damages for breach of contract is subject to certain limited exceptions, it appears to enjoy wide-spread acceptance in most states and in virtually all common-law countries, according to Glenn West, writing in Weil, Gotshal & Manges’ Global Private Equity Watch.

But one of the well-recognized exceptions that can sometimes threaten to swallow the rule is that which permits punitive or exemplary damages anytime ‘the conduct constituting the breach is also a tort for which punitive damages are recoverable.’ And a ‘dog’s breakfast of tort-based fraud claims can frequently accompany a breach of contract claim.” West writes.

He discusses the case of Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, in which the Texas Supreme Court upheld the liability-limiting provisions waiving punitive damages, even for fraud.

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International lawyers are often pushed by clients from common law countries (even more often by their in-house lawyers) to include common broilerplate contract provisions even in countries where they make no sense, writes Dan Harris for Harris Bricken’s China Law Blog.

He explains: “These people/lawyers are simply uncomfortable with contracts that do not include such terms. When we tell them that such provisions are not needed, their response is often, ‘well, it can’t hurt.’ But it can hurt.”

He discusses such Western-style contract staples as representations and warranties, effective date, counterparts, complete agreement, no oral modifications, good faith, headings and titles, third-party beneficiaries, and severability.

The article explains the potential drawbacks of using these clauses in contracts outside common law countries.

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Addressing a bench trial decision concerning a former employee’s retention of confidential information and violation of a non-compete provision, the U.S. Court of Appeals for the Fourth Circuit found no abandonment of the employer’s breach claims, and concluded that while certain flowcharts contained protectable trade secrets, there was no breach of the non-compete.

In an article for McDermott Will & Emery, posted at JDSupra.com, Mary Hallerman describes the case of an employee who was subject to an employment agreement requiring him to return to his employer all work documents upon leaving the company. The former employee breached his agreement by retaining these documents after he left the company and misappropriated trade secrets, the plaintiff company alleged.

The Fourth Circuit found that the ex-employee had not breached the non-compete clause because his role at his new employer was not sufficiently similar to constitute a breach.

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Hogan Lovells has published a guide to joint development and collaboration agreements and posted in on the firm’s website.

Protecting intellectual property is a challenge, especially when entering into a joint development agreement, cautions the guide.

When two or more organizations want to work together to develop or enhance their products, combine or integrate their technologies, or jointly commercialize a new product, they have many choices for documenting their relationship.

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Bloomberg Law is reporting that a former Winston & Strawn LLP intellectual property attorney can litigate—and can’t be forced to arbitrate—her pay, bias, and retaliation claims.

The California Supreme Court declined to review an appellate ruling that the arbitration agreement Constance Ramos signed as an income partner contained unfair provisions that couldn’t be separated from the rest of the agreement, according to Bloomberg’s Joyce Cutler.

Under those provisions, Ramos would have been required to pay half the costs, and she would be subject to secrecy clauses that would have prevented her from interviewing potential witnesses.

Read the Bloomberg Law article.

A recent decision from the Third Circuit addresses a grant of preliminary injunction against an employee who signed multiple agreements with restrictive covenants, and violated them immediately upon beginning employment with a direct competitor, reports Genova Burns.

Authors Dina M. Mastellone and James W. Sukharev discuss the case of Heartland Payment Sys., LLC v. Volrath.

In that case, a former employee of Heartland breached a manager agreement by sending confidential information to his former employer’s competitors.

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When leveraging automation software as part of an outsourcing relationship, it is important to document what specific benefits will be realized and the impact on the overall transaction, and to consider the appropriate mechanisms to ensure that implementation, intellectual property, and exit rights are mitigated, advises Morgan, Lewis & Bockius in a web post.

Authors Barbara Murphy Melby and Sarah Bryan cover the license, implementation, intellectual property rights, total cost of ownership, and liability.

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David Tollen of Tech Contracts Academy has some advice on using fault-triggered indemnities: Avoid them where possible and recognize that a fault-triggered indemnity might not do its job, which is to provide rules for dispute-free cooperation between the parties.

These fault-triggered indemnities create two problems — both related to the indemnitor’s obligation to defend the case, he explains. Those two problems are refusal to defend, and conflict of interest.

“[I]n a fault-triggered indemnity, the parties have opposing interests. The indemnitor wants to show that it did nothing wrong so it can escape responsibility. The indemnified party wants to establish the indemnitor’s fault, to keep it in the case. That makes cooperation difficult,” according to Tollen.

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Although it is tempting to focus only on state laws when evaluating how a service contract is regulated, the federal Magnuson-Moss Warranty Act (MMWA) provides an important reminder that federal law may be equally as significant, point out Brian T. Casey and Jon L. Gillum of Locke Lord in an article for Warranty Week.

“Although service contracts mirror many of the features of traditional insurance products, most states expressly exclude them from the statutory definition of insurance, and the majority of states go one step further by establishing formal licensing and financial security requirements that govern the sale of service contracts to consumers by service contract provider or obligors,” they explain.

But such contracts also are potentially subject to the MMWA.

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Gregory J. Reigel asks and answers the question: Can you really limit your liability simply by including certain language in your agreements?

He finds the answer in a recent Texas Supreme Court ruling in Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC.  In that case, plaintiff aircraft purchasers sued Bombardier, alleging that the engines installed on the plane they bought were not new equipment. A jury found in favor of the plaintiffs and awarded $2.7 million in actual damages and $5.4 million in punitives.

On appeal, Bombardier relied on a limitation of liability clause in the purchase agreement. The state Supreme Court ruling shows that “where sophisticated parties have bargained for a limitation of liability clause in an arms-length transaction, courts are likely going to enforce that clause to limit the damages that may be recovered,” Reigel writes.

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