Much has happened since last November when a home contractor filed a lawsuit for $750,000 against a former customer for defamation. If you read the headlines across the news agencies, you saw, “Contractor Files Lawsuit against Customer for Bad Review“. This is very misleading because it implies that the only reason the contractor filed suit was because the review was negative–suggesting that it had nothing to do with whether the comments were true or not. The judge granted a preliminary injunction requiring the homeowner to remove some of the most egregiously inaccurate (as alleged) statements from the Yelp review. However, the lawsuit, itself, caused some bad press for the contractor, compounding the harm of the original posting. What do you if you find an outright lie on Yelp? Certainly not what the contractor did, which was to post his own negative Yelp remarks, alleging that the homeowner had “stolen” his goods and services since she never paid him for the job. That move cost him his victory. In June, a jury found that although the homeowner had defamed the contractor, his later remarks also defamed her. Forget the $750,000. There was no award.
Statement of Fact
This is where an online reviewer can skirt some liability by making statements of opinions instead of facts. This has a fine line. A statement of fact implies a provably false factual assertion while a statement of opinion does not. The main purpose of this distinction is to walk to the line of where freedom of speech begins and ends; however, spreading false opinions that imply the allegation of undisclosed defamatory facts as their basis is beyond free speech. Also of great importance is the context of the speech, what the reader is likely to conclude from the statements. For example, saying that this plumber is a “thief” because he charges an arm and leg is probably more of an opinion because there is no fact to prove false since whether a plumber is expensive is subjective and an opinion; compare that to a review that says this plumber is a “thief” and so I called the cops on him–this implies he is an actual thief, a provable (or disprovable) fact.
If argued properly, an injured business could not only get an order requiring the slanderous review to be removed but also obtain damages for the harm to reputation and even specific lost business opportunities if proved accordingly.
The Actual Review on Yelp Being Sued For
Here is the review in full from AngelsList.com:
Overall: F Price: F Quality: F Responsiveness: F Punctuality: F Professionalism: F Description of Work: Dietz Development was to perform: painting, refinish floors, electrical, plumbing and handyman work. I was instead left with damage to my home and work that had to be reaccomplished for thousands more than originally estimated. Member comments: My home was damaged’ the “work” had to be re-accomplished; and Dietz tried to sue me for “monies due for his “work.” I won in summary judgement (meaning that his case had no merit). Despite his claims, Dietz was/is not licensed to perform work in the state of VA. Further, he invoiced me for work not even performed and also sued me for work not even performed. Today (six months later) he just showed up at my door and ‘”wanted to talk to me.” I said that I “didn’t want to talk to him,” closed the door , and called the police. (The police said his reason was that he had a “lien on my house”; however this “lien” was made null and void the day I won the case according to the court.) This is after filing my first ever police report when I found my jewelry missing and Dietz was the only one with a key. Bottom line do not put yourself through this nightmare of a contractor.
Not exactly a glowing review. Highlighted above are statements that may be considered “statements of fact” and if false could definitely lead to damages against the reviewer. Included in these highlighted statements are ones the judge ordered removed after hearing only a small amount of testimony in a preliminary injunction. Notice that a majority of the comments can be construed as fact because they could be proved otherwise and it’s not a matter of opinion. Compare that to the letter grades given of straight F’s which are complete opinion.
Do Not Pay People to Write Positive Online Reviews
First and foremost, posting false positive reviews and paying for it will be against the terms of service of the website. For example, back in October of this year, Yelp announced that it would start showing warnings to users when they have found businesses that have paid for reviews. A “Consumer Alert” will appear on those listings. Yelp has said they have caught people red-handed trying to buy reviews for their business and they wanted to do something about it because buying reviews not only hurts consumers, but also honest businesses who play by the rules. Second, this is like paying for false testimonials. There are a number of statutes and regulations that vary state to state regarding advertising, but FTC guidance controls on this issue, prohibiting “unfair and deceptive acts or practices in commerce.” There may be a fine line between giving incentives for any reviews versus paying for them as the FTC has expanded its regulation to include online reviews requiring the authors to disclose they are being paid to do so (which of course would defeat its purpose).
Dealing with A False Customer Review
Another recent Virginia case deals with the perplexing problem of anonymous Yelp reviews that may be phony. The legal fighting has not yet gotten to the issue of defamation. It remains about whether Yelp must disclose the identities of the individuals writing negative reviews. After it chose to stop advertising with Yelp, a carpet cleaning business suddenly began to rack up anonymous negative reviews. Many of the seven reviews in question used similar language and repeated similar themes about deceptive advertising and doubled prices. One was from a state in which the carpet cleaner conducts no business. The business claimed that it could not match these negative reviews with actual customers, and that the reviews were therefore in violation of Yelp’s Terms of Service which requires that users actually patronize a business before writing a review. In its defamation suit, the carpet cleaner further claimed that it cannot determine if the claims about price and advertising are false because it cannot tell who the customers are. There is, of course, some reason to believe that the claims about actual patronage are not true. Anonymous statements of opinion are protected under the First Amendment, and Yelp has fought fiercely against the subpoenas that would require it to disclose the identities of the negative reviewers, even to the extent of paying fines for being found in contempt of court. When the shoe was on the other foot, Yelp was successful in a lawsuit based on breach of contract, unfair competition and false advertising against authors of phony positive reviews. This could get interesting. The Virginia Supreme Court will hear the case in the near future. For some businesses, filing a lawsuit right away may sound good, but as we have seen it can backfire pretty quickly once people find out you are suing your former customers. As in all litigation matters, dealing with things before it is a problem is of utmost importance and when does become an issue, dealing it before it escalates is imperative. When you do get a bad review, see what you can do for the customer directly to address his or her concerns–in the long run it will make a significance difference. For some businesses, a few negative reviews here and there is the cost of doing business especially when you already have a bunch more positive reviews. For example, a restaurant bar and grill recorded their negative reviews and started playing them in their bathroom. One pizzeria owner reportedly reprints nasty Yelp reviews on employee t-shirts. As a general rule, litigation should be a last resort. Most do not realize the expense and toll that it can play on the wallet and mind.
Why Not Just Sue Yelp?
Yelp itself is protected by Section 230 of the Communications Decency Act and cannot be held liable for these kind of acts. Section 230 grants interactive online services of all types, including news websites, blogs, forums, and listservs, broad immunity from certain types of legal liability stemming from content created by others. This immunity covers defamation and privacy claims, as well as negligence and other tort claims associated with publication. Yelp or other review sites will not lose this immunity even if they edit the content, whether for accuracy or civility, so long as the edits do not materially alter the meaning of the original content.
Former Employee Spilling the Beans Online
Besides just negative reviews from customers, former employees of businesses may get into the mix. Notwithstanding a defamation claim as discussed, non-disparagement agreements with employees are generally enforceable, but the scope and in what circumstances may be severely restricted as to how the clause is drafted but most importantly by whistle-blower statutes and general rights of freedom of speech.
Anti-SLAPP Motion: A Scary Threat to Suing Your Customers for Defamation
SLAPP stands for strategic lawsuits against public participation. It is a tool in California and some other states that can be very useful for defendants in protecting freedom of speech; without an anti-SLAPP statute, a malicious business could inflict substantial expense and hardship upon someone in retaliation for their speech, even if their claim is without merit. If done properly, such a motion shifts the burden on the plaintiff to prove that they are likely to win their case based upon the evidence provided. Losing such a motion would not only stop the lawsuit on its track but also expose the plaintiff to attorney’s fees–a scary threat to any defamation lawsuit.
Yahoo CEO Marissa Mayer’s decision to order telecommuting employees back to the office has sparked a passionate debate over the increasingly common practice of working from home.
Criticism from many, especially those working parents, sees Yahoo taking a step backwards in dealing with the realities of the modern workforce and tech industry.
Moving a workforce to home is a great way to contribute to a great corporate culture, but there are some legal issues that do come up that are specific to telecommuting. TFL covered this issue on KOGO on February 25, 2013.
Just because employees are now at home, that does not meet all those legal guidelines dealing with employees go away. In that way, remember that nothing has really changed.
Meal Periods, Breaks and Overtime
Since meal times and overtime still apply, employers have to tweak their habits with communication and engagement. Because they work from home, it may be more tempting to take calls and respond to emails during after hours or during their breaks. Simple communication protocols and policies can prevent a labor law violation in this area. For example, having a check-in and check-out remote system can help promote breaks and restrict overtime.
For those businesses that require to keep some of their data confidential or if they have a trade secret that they require limited access, technology has had great advancements to allow secure data transfer and storage; however, there is a certain level of limited control you have to telecommuting employees and that’s the balance that an employer must address on a case by case basis. For example, access to confidential customer data should be limited so that it prohibits mass download of the data versus single record access.
Safe Work Environment
Employers must provide a safe work environment for their employees, whether at home or at the office. The legal implications to this rule has yet to be fully explored, but again there are some obvious precautions that can be done to prevent liability in this area.
Though there are some major advantages for employees with families in telecommuting, employers should be careful as to not discriminate against those that do not have a family or men as this can be seen as gender or family based discrimination. The criteria for who may work from home should be objective to the job purpose and description.
It is very difficult to properly classify a personnel as an independent contractor when working on the employer’s premises, so it is common for independent contractors to telecommute; however, be careful, as just because your employees are working from home, this does not mean they are automatically classified independent contractors.
There is a misconception in California that you can only fire or discriminate if its for work performance; but generally “appearance” discrimination is generally permissible. There is no blanket legal protection in California for those overweight as there are for gender or race. In fact, there was only one state that we could find that had this kind of protection–that is the great State of Michigan. There has been such advocacy for this kind of protection that even the cities of San Francisco and Santa Cruz of California have passed similar ordinances.
Even though there is no blanket protection, for those individuals that are obese, they may have claims under the American Disabilities Act as there may be some underlying disorder (diabetes, hypothyroidism etc.). In fact, the Equal Employment Opportunity Commission (EEOC) has actually considered obesity to be an impairment under the ADA. California is a little more broad in its interpretation as to the definition of disabled under FEHA.
Can You Ask Your Employee to Lose Weight?
If you can not discriminate, can you ask your employees to lose weight? I would question the boss or supervisor that asks their employees to lose weight so directly due to the risk of creating a hostile work environment, but companies in the past have implemented programs to promote weight gain such as providing healthy food choices, gym membership and other wellness programs.
There is a rationale, whether right or wrong, for discriminating the overweight. Healthier employees may bring insurance premiums down, increase productivity and even help create a company image that the employer is seeking.
Bona Fide Occupational Qualification
There are always exceptions to discrimination and many companies have used the Bona Fide Occupational Qualification (BFOQ) to justify such discrimination. One example of BFOQs are mandatory retirement ages for bus drivers and airline pilots, for safety reasons. Further, in advertising, a manufacturer of men’s clothing may lawfully advertise for male models. Religious belief may also be considered a BFOQ; for example, a religious school may lawfully require that members of its faculty be members of that denomination, and may lawfully bar from employment anyone who is not a member.
Valentine’s Day means different things to each person. For some, a mere valentine can be given to a friend or colleague as it was during school days; however, Valentine’s Day is a holiday associated with love and relationships and an innocent gift of flowers or a card can be easily misconstrued.
Managing risks of harassment related litigation has a lot to do with the type of environment you create in the workplace. There are some that feel comfortable with celebrations and decorations associated with Valentine’s Day or other holidays, but that is not necessarily the case for everyone. In some cases, there may even be religious reasons associated with this sensitivity.
Many may think that the law prohibits any kind of non-work activity in the office; the reality is that the law itself does have protections, but when the lines are crossed are blurry. This leads to attorneys and HR reps erring on the safe side. There is a way to balance celebrating Valentine’s day without being intrusive or crossing the line by not integrating any holidays within the actual work environment.
Some attorney’s may suggest to not every even say “happy Valentine’s Day” to anyone as that may be misconstrued; this may seem over the top, but there’s actual wisdom behind this. The criteria that is applied to sexual harassment is whether the person being allegedly harassed subjectively considered the actions unwelcome. That means it is irrelevant whether a reasonable person would find the acts unwelcome, but whether the actual person as a matter of fact considered the acts unwelcome. There is much more to this topic of unwelcomeness, but the point of the matter is that it can be difficult to know where to draw this line.
Office romances are quite common but are a huge liability risk if and when things go sour. One party can claim harassment especially if they can show unwelcome advances after the relationship is over. Outright bands are usually to be avoided when it comes workplace relationships because this will often lead to the relationships being concealed. Especially where a relationship is between a supervisor and the subordinate, an employer must make precautions.
This weekend’s Super Bowl ad from Samsung demonstrates the well known media taboo of using “Super Bowl” in your ads without the permission of the NFL. Here is the commercial:
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As the actor Bob Odenkirk, attorney actor from Breaking Bad, suggests, “Super Bowl” is a trademarked term; however, there is a lot of confusion on this issue. It is not that you can not use the term at all, but even news broadcasters get away from using the term. Listen to the radio segment I discussed with Merrill on the topic.
Power of Trademarks
By the NFL establishing the Super Bowl as a trademark (see what is a trademark?), it has restricted the right or power for others to use the mark for their own commercial benefit (with some exceptions). The NFL is known to have exercised this power to such an extent, even where the term is allowed to be used, some uninformed parties avoid saying the term altogether as satirically illustrated in the Samsung commercial. For example, instead of saying Super Bowl, news broadcasters in small markets will use the term “the big game” as a pseudonym for Super Sunday (also trademarked). When using the term in a form of satire, comparison, or in this case descriptive or informative reporting, you are utilizing an exception called fair use.
Not Just for Big Business
Trademarks are not just for big businesses like the NFL. Imagine spending thousands of dollars on a brand that gets diminished or diluted by a competitor. Even though trademarking your brands, products, and services are important, the law only becomes useful if the owner is willing to defend the trademark. This makes the most sense where the trademark has actual value. At the same time, trademark protection planning usually occurs where the mark has little to no value.
Trademarks and Infringement Basics
A trademark is a symbol or words used to represent a company or product. This trademark may be established either by its use in the marketplace or its use plus registration with the USPTO. Once a trademark has been established it weighs itself with great power. The Super Bowl is a well established and registered trademark that the NFL has enjoyed with great liberty in defending against infringement.
What actually is considered trademark infringement is generally where an authorized party uses a symbol or words that creates a likelihood of confusion that goods or services are endorsed or are being represented by the trademark. The line gets more and more fuzzy in some cases, but generally the use of Super Bowl in commercial settings is likely not proper unless it is a form of satire, comparison, descriptive or informative reporting.
The NFL is very aggressive in defending its mark; some say too aggressive. Last year, the NFL pressured an Indiana man to give up his filing to trademark “Harbowl.” He had registered the trademark last year in anticipating the Harbaugh brothers (coaches of the San Francisco 49ers and Baltimore Ravens) going at it in the super bowl, but his hope did not come into fruition until this year in 2013; however, before it could ever happen, the NFL pushed him into dropping this quest at the threat of litigation. Even though this Indiana man may have been able to use his registration, he did not have the funds to defend. It is important lesson that your mark is only good if you actually enforce it.
Expanding your mark to other related terms is common and sometimes strategically beneficial. Believe it or not, the NFL in 2007 attempted to trademark “the big game” but withdrew its filing after facing a PR backlash as well as considering their filing would likely be opposed to others that have used “the big game” for their own use. The NFL did not stop though with the Super Bowl. Super Sunday is also a trademarked term of the NFL.
The first question you should ask before initiating a lawsuit is what is your objective? Seau’s family answered that question today by saying “we know this lawsuit will not bring back Junior, but it will send a message that the NFL needs to care for its former players, acknowledge its decades of deception on the issue of head injuries and player safety, and make the game safer for future generations.”
Much of the press has focused on the wrongful death aspect of this case, but the most important part of this lawsuit, if true, is very damning against the NFL. The lawsuit really focuses on the allegation that the NFL not only studied and found a link between traumatic head impacts and brain injury, including CTE, but hid the research and falsified it.
Junior Seau is not alone, as approximately 3,800 other cases, including a class action alleging very similar facts. Most of these cases have been consolidated to Federal Court in Pennsylvania and it is expected the NFL will attempt to do the same with the Seau case.
Wrongful death may be a difficult cause of action to prove (if even that’s the objective), but it will be interesting to see how the attorneys in this matter will link the NFL and the helmet manufacturers to CTE and show that CTE caused Seau to commit suicide.
The future of the NFL is no doubt in question as much of the negotiations with the NFL Players Association included issues of pensions and the welfare of NFL players after they retire. NFL plans should play close attention as the game may be changing.
Lance Armstrong has apologized and admitted to doping during his cycling events. He must be given credit that by making this admission in coordination with his legal team he may face legal repercussion which is many expect possible perjury and doping criminal charges will be reduced or dropped in exchange of a deal that has already been made. What about the possible civil lawsuits he may receive dealing with whistle blowing statutes, previous lawsuits for defamation, and annoyed sponsors.
The tragedies associated with gun violence in 2012 has employers rethinking how they deal with possible violence in the workplace. Keeping a safe work environment should be a priority for every employer.
Regulating Guns at Work
At least 9 states have prohibited all-out bans to guns in the workplace; not surprisingly, California is not one of them. In effect, California effectively allows you to have your own privatized gun control at the workplace. Whether it is prohibiting guns on company property or restricting them in the office, California law allows quite a bit of discretion. Compare this to the State of Kentucky that has upheld an employee’s right to be able to keep your firearm in your vehicle at work. A court even held that an employer would be held liable for wrongful termination for taking adverse action against employee who exercised this right.
Employee Injury from Workplace Violence
The Workers’ Compensation Exclusivity rule generally bars lawsuits against an employer for employee injury on the job, even if it is a result of gun violence from a third party or co-employee. There are some exceptions to this rule, including a circumstance where the employer is grossly negligent.
Third Party Injury from Workplace Violence
Employers may be held vicariously liable for the acts of its employees within the scope of employment. Where employers allow their employees to have firearms or other weapons, they should take heed to taking specific precautions in creating a gun policy.
For example, there is a current case at trial where a security guard carried a knife against company handbook procedures and ended up using it, possibly in the scope of his employment, to carve up a couple of customers. A sticky point is that the employers knew he carried a knife and one of the issues will be whether he acted within the scope of his security position.
Making a Gun Policy
It is common to see work policies that include an absolute ban on any weapons at work; however, the general objective of an employer should be to keep its employees safe and they should take into account the type of work environment For example, an owner of a 24 hour operation that has been robbed more than one should probably think twice when banning firearms at the workplace. Stressful work environments where tempers may run high should take the precautions to not have a permissive gun policy.
Safe Work Environment Violence
Violence is not random or unpredictable. A small effort in prevention can go a long way. Certain policies of prevent should be implemented, such as having an open door policy and conflict resolution program to prevent small concerns from growing into major disputes. Training employees is important so that the workplace can be responsive to suspicious behavior or overly stressed co-workers.
Of course less subtle ways to do deal with violence is to conduct thorough background checks and call upon experts to help in prevention policies.
As every year passes, there is a flurry of new laws passed that effect California employers. Here is an overview of some of the important ones.
Private Social Media Accounts Protected from Employers
Employers already can monitor internet activity with the proper notice, but this new law prohibits specifically employers who want to pry into their employee’s private social media accounts.
Sales Commission Now Requires a Contract
The common game of continuously changing commission structure for sale’s teams just got a little harder with this new law. These commission structure details now need to be in writing.
Religious Accommodation Now Applies to Religious Observance
This new law is more a clarification on existing law than an invention of something new. Religious discrimination has always been prohibited, but now it expands this right a little to religious practices including dress and grooming practices. Reasonable accomodation as defined by FEHA still apply; which means, if the accomodation results in undue hardship (and other exceptions) the employer is off the hook.
Have you ever actually calculated the MPG of your car? Is it just me or does it never seem to match that sticker on the window when you purchased it? Earlier this month, Richard Pitkin of Roseville, California felt the same way and actually took the next step of filing a lawsuit against Ford, accusing it of false advertising for possibly “inflating” the advertised MPG. Ford went as far as to call its C-Max Hybrid, “America’s most fuel efficient and affordable hybrid utility vehicle.”
Consumer Reports found the new C-Max and Fusion hybrids were around 20 percent short of MPG figures promised in marketing campaigns. Consumer Reports said the Fusion hybrid ended up producing a 39 MPG versus the 47 MPG advertised by Ford and the C-Max scored a 37 MPG versus the 47 MPG advertised. Just to bust the contention that MPG varies quite a bit depending on driving styles and conditions, Consumer Reports is usually within 2 miles of reported MPG for other vehicles it tests.
From the complaint, “in advertisements and press releases, FORD stated that the C-MAX Hybrid ‘delivers EPA-certified 47 mpg city, highway and combined, up to 7 mpg better than the Prius v.’ and claimed that customers would pay less at the dealership and less at the pump for a C-MAX versus a Prius v.” Ford, trying to leverage its MPG is EPA-certified is in itself misleading to the uninformed consumer. According to FuelEconomy.org, the EPA reports MPG by having the manufacturers test their own vehicles—usually pre-production prototypes—and report the results to EPA. EPA reviews the results and confirms about 10-15 percent of them through their own tests at the National Vehicles and Fuel Emissions Laboratory. The EPA is reviewing Consumer Reports’ findings, but the complaint further complains that the EPA doesn’t even test the cars on the road but indoors in laboratory conditions, uses more efficient fuel, and does not properly replicate actual driving conditions.
Fine Print Matters
However, there is a relevant case here where an Internet service provider (ISP) was found to have not engaged in fraudulent or unfair business act or practice under California’s Unfair Competition Law, even though it stated that consumers would receive maximum internet speed of “up to” three megabits per second (Mbps) under its service, and customer’s actual internet speed was only 1.792 Mbps. It was the ISP’s qualifier of “up to” three megabits per that provided an explanation that each consumer’s maximum speed would vary.
In the auto industry, the EPA requires disclosure stickers of the MPG for the vehicle that is usually displayed as a sticker on the window of the car. In the fine print of those stickers, you will find a disclaimer that states that “your mileage will vary.” This fine print is huge and may make the difference of liability for Ford.
Unfair Competition Law
California’s unfair competition law is pretty powerful and it’s one statute that covers false advertising. The law provides for injunctive relief, restitution, and disgorgement of profits for violations. California’s Unfair Competition Law , False Advertising Law, and Consumer Legal Remedies Act prohibit not only advertising which is false, but also advertising which, although true, is either misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.