Ep 47: Paris Hilton Suit and Recording Your Employees

May 28, 2014

The guys discuss the most recent lawsuit involving Paris Hilton’s breach of contract and answer, “Is it legal to record audio of employees in the workplace without their consent?”

Full Podcast Transcript

NASIR: Welcome to Legally Sound Smart Business.
This is Nasir Pasha.

MATT: And this is Matt Staub.

NASIR: Welcome to our business legal podcast where we cover business in the news and add our legal twist and also answer some of your business legal questions that you, the listener, sends in to ask@legallysoundsmartbusiness.com. I almost forget the dot-com there.

MATT: That’s all right.

NASIR: I nailed it.

MATT: We bought all of them – all the domain extensions

NASIR: That’s right.
Actually, I looked into dot-pizza. Apparently, dot-pizza is not out yet. I was going to buy just the waiting list one but I wasn’t sure how that works. As soon as it comes out though.

MATT: I find it hard to believe that stuff is going to catch on, but who knows?

NASIR: Yeah, we’ll start it, for sure.
Well, I’m excited for this episode. I think it’s going to be our best episode ever because we’re covering your favorite celebrity.

MATT: Yeah, and I didn’t even know Paris Hilton was relevant. I don’t understand why she was even relevant in the first place it’s a lawsuit that involves Paris Hilton and I’m sure this isn’t the first lawsuit she’s been a part of but it basically deals with a breach of contract claim. They’re saying that she breached her licensing agreement. I guess she had a sponsorship deal with a shoe company, Antebi Footwear Group. She had some deal with them and basically got in trouble for promoting one of their big competitors on her social media which to me is not a surprise because she never came off as intelligent so I’m not really shocked by this.

NASIR: Yeah, some rival product called Parisian Parc Footwear. We are so out of touch. I have no idea what these two companies are and what they do. Well, I guess they sell footwear.
One of the reasons we’re bringing this up is they are saying that she breached the covenant of good faith and fair dealing. Now, this is an interesting concept because this covenant of good faith and fair dealing sometimes is just put in as a clause in the actual agreement but, a lot of times, this is just an implied term in every agreement. The point is that Paris Hilton may not have a term that says you can’t promote a competitor’s product on Twitter in a term and saying, “Okay, well, now I guess I can do that.” But this implied faith and good dealing covenant is actually considered a term in there and it could be a cause for breach.

MATT: Yeah, and the reason it’s in there is for examples just like this and so it’s not really surprising. I always think it’s interesting. You’ll see this in sports. An athlete will be contracted with one shoe company like Nike and then they’ll play for a team that’s sponsored by another company like Adidas and there’s always issues of conflict. “Well, I’ve got to wear my shoes – the company that I have a deal – but I’m playing for the US National team that has a deal with this other company. what am I supposed to do?” There’s probably outs in that situation but not for this where Paris Hilton just appears to be not the smartest.

NASIR: If you read between the lines, this is what happened it looks like this company sued Paris only in response because Paris Hilton filed a lawsuit saying that they having been paying royalties for about a million dollars or so. And so, what it looks like is she may have tweeted this or promoted this competing product and this other company stopped paying her. And so, she made the first move.
I’m just wondering if she sued first before she even promoted the competing product. It would definitely change the facts there if that’s the case.

MATT: That’s a good point, too. I’m kind of stuck on the fact that one of the few things I do know about Paris Hilton is she hates how big her feet are. I remember seeing that. This is true! I remember seeing this at one point just randomly so I don’t know why she would get in with a shoe company or a footwear company if she really hates her feet that much.

NASIR: There is your weekly celebrity fact of the week. I did not know that.

MATT: I don’t know why I know that but I remember hearing it at one point.

NASIR: It may not even be true. In fact, it sounds like you made it up just now. I’m not saying anything.

MATT: She is tall so it makes sense.

NASIR: Yeah, it does make sense.
Lesson to be learned is that, just because you have an agreement that may not specify a term that you can do certain things doesn’t mean that you still should because this covenant of good faith and fair dealing is kind of a catch-all.
To be fair, it’s not the best legal argument because, if you’re depending upon that term, that means that, really, you don’t have anything else to stand on. And so, it’s not looking good on that end because it’s still hard to prove but it’s just something to keep in mind when you are contracting with other people.

MATT: Yeah, definitely. I think you’re exactly right, and so was I.
In her 2006, autobiography, she confessed – and I don’t know, why is she writing an autobiography in 2006? First off, that’s weird.

NASIR: Well, that’s probably how you found out. You probably read it, right?

MATT: Yeah, I forgot that I did read it. She says, “Okay, I admit it. I desperately hate one thing about my body. I have size 11 feet.” There you go. Fact of the day.
[MUSIC]

NASIR: All right. Well, let’s get to our question of the day. That was a nice Paris Hilton break.

MATT: With a fact of the day followed right after the question of the day.

NASIR: Very good.

MATT: “Is it legal to record audio of employees in the workplace without their consent?”
They didn’t tell us where this question is from which actually is kind of important because it’s a state-by-state issue.

NASIR: First, let’s get the concept here. We have employers that are basically spying on their employees and it reminds me of how just the employer-employee relationship just has changed quite a bit, right? There’s no loyalty among employees anymore and employers are just so afraid of employment issues that they’re so distrustful of the employees that they’re scared of dealing with them. I wonder if this aspect of spying on your employees is becoming more prominent because of that but I have to mention this because you know how I said that there’s a covenant of good faith and fair dealing implied in almost every contract? There’s also a covenant of duty of loyalty amongst employees. And so, that kind of relates to this as well.
Anyway, to answer the question, maybe you should start talking because I went on a big tangent there.

MATT: You didn’t even come close to actually answering the question. You have your own…

NASIR: I made up my own question and then I answered it.

MATT: Did you write this question? You just wanted a platform to speak your opinions?

NASIR: Actually, I don’t ever really read the questions. I just answer the questions that I feel like answering in my head.

MATT: So, let’s see… Is it legal to record audio of employees in the workplace without their consent? I’m going to say no. this seems like a pretty clear-cut no. If you do it without their consent, I would think even with their consent, you might run into some issues but at least you have a much better argument that you’re allowed to do it and you can do it for quality control reasons like that. I would think, in those instances, you’d be able to get by. But, without their consent, yeah, I don’t see that working out for you as the employer.

NASIR: Yeah. In fact, both federally and state, there’s pretty strict wiretapping laws and this would be considered wiretapping – basically listening in to someone’s conversation without their knowledge or consent. Without their consent, I would assume it’s without their knowledge, too. I’m trying to figure out, is there a way to record audio of your employees and there may be a way but, even then, it’s really risky because, in most states, only one party of the conversation needs to have consent. But, if there’s a third party listening like an employer listening to an employee and a customer and only the employee consents, that’s basically wiretapping and that’s not allowed.
But what if it’s in a work environment where it’s just employees and all the employees know that their audio was being recorded and listened to? Then, I suppose, if it’s very clear and the consent is clear, then maybe. But then, the question is what if someone else walks in the room and their voice is recorded and they don’t know about the recording? Then, it’s whole other issue.

MATT: Yeah, that’s a good point. It seems pretty risky. I mean, even if you do have it in your employee policies, it just seems like you’ll run into some issues. Like you said, too, the whole I guess we will circle back to the point you were making in the beginning with loyalty issues. There’s just a lot of things that are going to come up if you try to do this – negative things.

NASIR: Just to specify, there are a few states like California and there’s probably a few other that I can’t think of that require both parties to consent to the recording. What that means is that, if Matt and I are recording right now, we both have knowledge that it’s recording. But, if someone else is recording us and we don’t know, then that’s a problem.

MATT: Yeah, I think that’s it. I think we got it. We were able to let you voice your opinions and then also answer the question. That’s a good job.

NASIR: And now I’m getting paranoid that someone might be recording our conversation right now.

MATT: All right. Well, I think that’s it. We told people where to send their questions in.

NASIR: Thanks for joining us!

MATT: Keep it sound and keep it smart!

Legally Sound | Smart Business

By

The Podcast Where Nasir Pasha and Matt Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to info@legallysoundsmartbusiness.com.

Get Business Legal Updates

Please provide your full name.
Please provide a valid email address.
We respect your privacy, and we will never share your information. Unsubscribe at any time.
Legally Sound Smart Business cover art

Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
Apple Podcast badge
Google Podcast badge
Spotify Podcast badge

Latest Episodes

July 14, 2021

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

June 23, 2016

Nasir and Matt discuss the criminal charges facing FedExinvolving the alleged transportation of illegal drugs. They also talk about how business owners should address working with customers that may be breaking the law.

June 15, 2016

The guys return after a long break to discuss why Yahoo is auctioning off over 3,000 patents and how this decision will affect the longevity of the company.

May 25, 2016

Nasir and Matt discuss the increase in the salary thresholdfor exempt employees and how employerscan try to avoid paying overtime as a result.

May 18, 2016

Nasir and Matt discuss the Baltimore law that makes it very difficult to operate food trucks in the city. They also discuss all the legal restrictions tohaving a food truck.

May 11, 2016

Matt listens to Nasir recap the developing battle in his hometown of Vandalia, Ohio over whether a Dunkin Donuts can move into a location in close proximity to a local favorite donut shop. They then discusswhether the issue is more legal or personal.

May 9, 2016

The guys kick off the week by discussing a Nevada employee who is claiming she was fired for not supporting the Scientology beliefs of her employer.

April 27, 2016

The guys discuss the massive floods in Houston,how employers responded, and why one meteorologist became a local hero. They also discuss the steps businesses should take in preparing for storms outside the workplace.

April 20, 2016

The guys discuss the boycott of Amazon over the products of an unnamed presidential candidate. They also talkabout how a business should handle a boycott and whether it’s possible to exit one unscathed.

April 13, 2016

Click here to read HubSpot’s response on this topic. Nasir and Matt discuss the trend in startups to compensate programmers and other early employees with stock options and how the company culture at HubSpot isn’t what it seems.

April 6, 2016

Nasir and Matt discuss various lawsuits against social media platforms in which users are accused of artificially inflating their social currency.

We represent businesses.
That’s all we do.

Oh, and we love it.

We love our work. We love reviewing that lease for your new location. We thrive on closing that acquisition that nearly fell through. We’re fulfilled when we structure a business to grow, raise capital, and be legally protected.

We focus on developing close relationships with our clients by being like business partners. A partner who provides essential, personalized, proactive legal support.

We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

Our team is made up of attorneys and staff that share these values and we are retained by clients who want the same.

Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

Meet Our Team

Fractional General Counsel Services

Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

Learn More