(CN) - The operator of a Head Start program in Detroit is entitled to recover attorney fees and legal costs after employees unsuccessfully sued for more healthcare benefits, the 6th Circuit ruled.
In 2003, Matrix Human Services reduced the length of its Head Start program from 12 months to 10 months, notifying the teachers' union that it would only provide employee benefits for 10 months.
The union got a temporary restraining order barring Matrix from discontinuing benefits for two months, but that order was dissolved due to the union's failure to show irreparable harm.
Matrix sought to recover about $28,000 in legal fees.
Under the Norris-LaGuardia Act, a defendant who successfully dissolves an injunction can only recover legal costs against an injunction bond. But in Matrix's case, the state court had issued the restraining order without requiring the union to post an injunction bond.
The Cincinnati-based appeals court said a bond should have been required, as it serves two purposes: it deters plaintiffs from filing rash interlocutory injunctions and it provides a fund to compensate defendants harmed by an incorrect injunction.
"In sum, we find that both of the dual policies underlying the imposition of injunction bonds counsel in favor of remanding to allow the court to determine an appropriate bond amount that Matrix may recover from the union," Judge Boyce F. Martin Jr. concluded.
The ruling reverses the district court's denial of fees and costs.