Mary Siceloff

Are you telling new hires and those currently employed all that you are required to tell them?  Below is a link to the Department of Labor Standards Enforcement Notice to Employee form which employers may use to fulfill their obligations under Wage Theft Protection Act that passed several years ago.  Click here to view the form.

That section requires that the employer notify the employees in writing of any changes to the information set forth in the written notice within seven calendar days after the time of the change unless one of the following applies:  (a) all changes are reflected in a timely wage statement furnished in accordance with Labor Code section 226; or (b) notice of all changes is provided in another writing required by law within seven days of the changes.

North Jersey Media Group Inc. is the copyright owner of the iconic photograph of three firefighters raising an American flag at the ruins of the World Trade Center on September 11, 2001. On September 11, 2013, a Fox News producer posted a photograph that juxtaposed the 9/11 photograph with a World War II photograph of four U.S. Marines raising an American flag on Iwo Jima on the Facebook page for the Fox News’ television program Justice with Judge Jeanine. North Jersey Media Group sued Fox, claiming that the posting of the combined image infringed its copyright. Fox news argued that the use was protected “fair use” and moved for summary judgment. The court denied Fox’s motion and Fox is now appealing to the 2nd Circuit.

Fox’s appeal centers around the lower court’s analysis of the first fair use factor: the purpose and character of the use. The purpose of this factor is to test whether the allegedly infringing work is “transformative.” A work is transformative when it adds something new to the work allegedly infringed, with a further purpose or different character, altering the original work with new expression, meaning, or message. A work is transformative if it does something more than repackage or republish the original copyrighted work. A transformative work is one that serves a new and different function from the original work and is not a substitute for it. As the Supreme Court noted in Campbell v. Acuff-Rose Music, Inc., “the more transformative the new work, the less will be the significance of other factors, … that may weigh against a finding of fair use.”

Although acknowledging that Fox News did alter the image and message of the original work, the lower court noted that it did so “only minimally”. The lower court stated that it could not conclude as a matter of law that the physical alterations made to the original photograph transformed the new work sufficiently to merit protection as fair use.

Fox believes the lower court’s focus on physical alteration to the original image was incorrect and that the court should have considered the other aspects of Fox’s use. Namely, Fox contends that in analyzing the transformative nature of its use, the lower court should have considered the use of the photo as having been used “in an inherently transformative context: on social media.” Fox argues that “[e]xpression on social media, and on Facebook in particular, is inherently intertwined with “comment” and “criticism,” purposes that the Copyright Act sets forth as presumptively fair” since “[e]very post is an invitation for others to comment and criticize…”

Fox argues that the lower court failed to recognize the applicability Bill Graham Archives v. Dorling Kindersley Ltd. In that case the 2nd Circuit held that a publisher’s use of an old concert poster in a “coffee table” book documenting the history of the Grateful Dead was fair use. In finding the use to be “transformative,” the court focused on the context of the publishers use – use for a biographical purpose – as opposed to the concert promoter’s use, Fox contends that the lower court relied on case law such as Cariou v. Prince and Blanch v. Koons which based transformativeness on physical alterations of the original work. The apparent conflict between the Bill Graham and the Cariou modes of analysis, Fox argues, make appellate review appropriate.

Fox argues that a context-sensitive test for transformativeness must consider that “Facebook and other social media sites are by design used for purposes of “comment” and “criticism,” and such a test will inevitably favor uses on social media.” It seems that Fox is arguing that publication of a work on social media is transformative in and of itself. Does this argument go too far; this author thinks that it does. However, there is merit to Fox’s argument that the lower court focused solely on the physical alterations to the image and failed to consider whether the context of Fox’s use was transformative.

The United State Supreme Court issued its much anticipated decision in the case of Young v. UPS on March 24, 2015.  As of now, Young’s pregnancy discrimination claim remains alive and well.

Below is a summary of the court’s ruling:

Factual and Procedural Background.

Young was a part-time driver for UPS. When she became pregnant, her doctor advised her that she should not lift more than 20 pounds. UPS, however, re­quired drivers like Young to be able to lift up to 70 pounds. UPS told Young that she could not work while under a lifting restriction. Young subsequently filed a lawsuit under the federal Pregnancy Discrimination Act (the “Act”), claiming that UPS act­ed unlawfully in refusing to accommodate her pregnancy-related lift­ing restriction. She brought only a disparate-treatment (intentional) claim of dis­crimination, which a plaintiff can prove either by direct evidence that a workplace policy, practice, or decision relies expressly on a protect­ed characteristic, or by using the burden-shifting framework set forth in the case of McDonnell Douglas Corp. v. Green. Under the McDonnell Douglas framework, the plaintiff has “the initial burden” of “establishing a prima facie case” of discrimination.  If she carries her burden, the employer must have an opportunity “to articulate some legitimate, non-discriminatory reason[s] for” the difference in treatment.  If the employer articulates such reasons, the burden shifts back to the plaintiff who has “an opportunity to prove by a preponderance of the evidence that the reasons . . . were a pretext for discrimination.” (cites omitted)

UPS filed a summary judgment motion in the District Court. In reply, Young presented several favorable facts that she believed she could prove. In particular, she pointed to UPS policies that accommodated work­ers who had lifting restrictions similar to hers because they were either injured on the job or had disabilities covered by the Amer­icans with Disabilities Act   (ADA).  UPS policies also accommodated employees who couldn’t drive at all because they had lost Department of Transportation (DOT) certifications. Young argued that these policies showed that UPS discriminated against its pregnant employees because it had a light-duty-for-injury policy for numerous “other persons,” but not for pregnant workers. UPS responded that, since Young did not fall within the on-the-job injury, ADA, or DOT categories, it had not discriminated against Young on the basis of pregnancy, but had treated her just as it treated all “other relevant persons.”

The District Court granted UPS summary judgment, concluding, inter alia, that Young could not make out a prima facie case of dis­crimination under McDonnell Douglas. The court found that those with whom Young had compared herself—those falling within the on-the-job, DOT, or ADA categories—were too different to qualify as “similarly situated comparator[s].” The Fourth Circuit affirmed the District Court’s ruling and upheld summary judgment for UPS.

Supreme Court’s Review and Decision.

Young claimed that under the Act, as long as “an employer accommodates only a subset of workers with disabling conditions,” “pregnant work­ers who are similar in the ability to work [must] receive the same treatment even if still other non-pregnant workers do not receive accommodations.” The Fourth Circuit disagreed and said that it doubts that Congress intended to grant pregnant workers an unconditional “most-favored-nation” status, such that employers who provide one or two workers with an accommodation must provide similar accommodations to all pregnant workers, irre­spective of any other criteria. According to the Fourth Circuit, the second clause of the Act, when referring to non-pregnant persons with similar disabilities, uses the open-ended term “other persons.” It does not say that the em­ployer must treat pregnant employees the “same” as “any other per­sons” who are similar in their ability or inability to work, nor does it specify the particular “other persons” Congress had in mind as ap­propriate comparators for pregnant workers. Moreover, the Fourth Circuit said that disparate-treatment law normally allows an employer to implement policies that are not intended to harm members of a protected class, even if their implementation sometimes harms those members, as long as the employer has a legitimate, nondiscriminatory, non pretextual rea­son for doing so and there is no reason to think Congress intended its language in the Act to deviate from that approach.

UPS claimed that the Act’s second clause simply defines sex discrimination to include pregnancy discrimination.  But according to the U.S. Supreme Court that cannot be right, as the first clause of the Act accomplishes that objective. Reading the Act’s second clause as UPS proposed would render the first clause superfluous. According to the high Court, an individual pregnant worker who seeks to show disparate treatment may make out a prima facie case under the McDonnell Douglas framework by showing that she belongs to the protected class, that she sought accommodation, that the employer did not ac­commodate her, and that the employer did accommodate others “sim­ilar in their ability or inability to work.” The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying accommodation.  That reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those whom the employer accommodates. If the employer offers a “legitimate, nondiscriminatory” reason, the plaintiff may show that it is in fact pretextual. The plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “le­gitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the bur­den imposed—give rise to an inference of intentional discrimination.  The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of non-pregnant workers while fail­ing to accommodate a large percentage of pregnant workers.  According to the Supreme Court, this approach is consistent with the longstanding rule that a plaintiff can use circumstantial proof to rebut an employer’s apparently legiti­mate, nondiscriminatory reasons.

Ultimately, the Supreme Court held that the record shows that Young created a genuine dispute as to whether UPS provided more favorable treatment to at least some employees whose situation cannot reasonably be distin­guished from hers, and found that it is left to the Fourth Circuit to determine on remand whether Young also created a genuine issue of material fact as to whether UPS’ reasons for having treated Young less favorably than these other non-pregnant employees were pretext for pregnancy discrimination.

Takeaway:  Employers should review their accommodation and light-duty policies to ensure that they do not discriminate against employees based on a protected class, including pregnancy.

Since his death in 1981, reggae superstar Bob Marley and his “image” continue to be broadly popular and command millions of dollars each year in merchandising revenue. His children own an entity called Fifth Six Hope Road, Music, Ltd. which was formed to acquire and exploit the assets, rights and commercial interests of their late father. In 1999, Hope Road granted Zion Rootswear, LLC, an exclusive license with regard to the use of Bob Marley’s image on various clothing and other merchandise.

After discovering that several companies had been selling t-shirts and other merchandise with the image of Bob Marley on them, Hope Road and Zion brought a lawsuit against them and included a claim for “false endorsement” under 15 USC §1125(a). (This article does not address the other claims pursued in this lawsuit.)

After trial, a jury found that the Defendants were liable under a false endorsement theory and awarded Plaintiffs almost $800,000 in damages plus their attorney’s fees of approximately $1.5 million. The Defendants appealed the decision to the Ninth Circuit arguing that there was not sufficient evidence to support a finding against them and that Plaintiffs’ use of the false endorsement claim under 15 USC §1125 effectively created a federal “right of privacy,” which Congress had not intended.

The primary issue facing the Ninth Circuit in the case Fifty Six Hope Road, Ltd., et al. v. A.V.E.A., Inc., et al. was “when does the use of the celebrity’s likeness or persona in connection with a product constitute false endorsement that is actionable under the Lanham Act.” The Court began by looking at the text of section 1125(a) which provides in relevant part, “any person who, on or in connection with any goods … uses in commerce any … name, symbol or device or any combination thereof … which … is likely to cause confusion or to cause mistake or to deceive as to … the origin, sponsorship or approval of his or her goods … by another person … shall be liable in a civil action by any person” who has been damaged.

The Defendants first argued that a celebrity’s “persona” was too “amorphous” to constitute a “name, symbol or device” under section 1125(a) to allege a Lanham Act violation. The Ninth Circuit rejected this and found that it had long been recognized that “a celebrity whose endorsement of a product is implied through the imitation of a distinctive attribute of the celebrity’s identity” can sue for such a violation. Given that the Defendants were appealing post-verdict, the Ninth Circuit was bound to construe the evidence in a light most favorable to plaintiffs given that they had won at trial.

The Ninth Circuit began by focusing on the “likelihood of confusion” inquiry which asks “whether a reasonably prudent consumer in the marketplace is likely to be confused” with regard to the goods bearing the marks at issue. In a celebrity case such as this one, the Court ordinarily uses an eight factor test to determine the likelihood of confusion: (1) the celebrity’s level of recognition in the intended market; (2) the link between the celebrity’s fame or success and the defendant’s product; (3) the similarity of the likeness used by defendant’s product to the celebrity; (4) evidence of actual confusion; (5) the marketing channels used by plaintiffs and defendants; (6) the degree of care exercised by the likely purchaser; (7) the intent by defendant to use the celebrity’s likeness; and (8) the likelihood of expansion of product lines. Given that the lawsuit was not brought by Bob Marley, the Court must also consider an additional factor concerning the strength of association of the mark and the Plaintiff. In analyzing these factors, the Ninth Circuit found that it could not conclude as a matter of law that the jury erred in finding a Lanham Act violation for false endorsement.

Factors 1-3. The Ninth Circuit found that evidence on these first three factors was essentially undisputed. Bob Marley’s image had a high level of recognition in the target market and had long been associated with clothing merchandise. In fact, while he was alive Bob Marley sold his own merchandise bearing his image and his heirs continued to do so following his passing. Furthermore, it was undisputed that Defendants were using photos of him on their merchandise.

Factor No. 4. Defendants’ primary argument was on the fourth factor that there was insufficient evidence of actual confusion. In proving their case, Plaintiffs provided data from a survey of interviews they conducted with two groups of people, those who were shown Defendants’ merchandise bearing Bob Marley’s image and a control group who were shown a t-shirt bearing the image of an unknown African American man with dreadlocks. Almost twice as many people in the first group responded that Bob Marley (or his heirs) had granted permission for the t-shirt to be sold as compared to the other group. The Ninth Circuit found that this bore some evidence of actual confusion. To the extent the Defendants contended that there were problems with the data or the survey process, this would have gone the survey’s probative value. Furthermore, the Ninth Circuit noted that while evidence of actual confusion is relevant to likelihood of confusion, it is not required in a false endorsement claim.

Factor No. 5. Plaintiffs produced evidence at trial that showed that Defendants had marketed their products in the same retail stores as Plaintiffs’ and their licensees.

Factor No. 6. The Court again found that Plaintiffs had produced sufficient evidence as to the low degree of purchaser care. In fact, Defendants’ representatives testified that given the cost of their merchandise between $7 and $15, the products were not generally expensive and were typically “a good value” and “an impulse purchase.” Defendants could not dispute the well standing legal principle “that low prices imply correspondingly low consumer care” when purchasing a certain product.

Factor No. 7. Here, the Ninth Circuit clarified that Plaintiffs were not required to prove that the Defendants knew that their actions were unlawful but only that “they intended to `confuse’ consumers concerning the endorsement of their products”. To satisfy this burden, Plaintiffs offered evidence that demonstrated that Defendants’ t-shirts contained a nearly identical photograph of Bob Marley with similar Rastifarian green, yellow and red stripes on a black t-shirt. The Court held that a reasonable jury could “infer that [Defendants] sought to associate their product with Plaintiffs by intentionally creating similar merchandise.”

None of the parties addressed the eight factor of likelihood of expanding product line and so the Court turned to the additional factor as to the association between Bob Marley and the Plaintiffs. The Court found that there was sufficient link here because Bob Marley himself sold merchandise bearing his image during his lifetime and his successors had continued to do so after his passing. Furthermore, over the years, Plaintiffs have actively prosecuted similar claims of improper uses of Bob Marley’s likeness and there was testimony offered that even Defendants were aware that Hope Road and Zion held the license to Bob Marley’s image based on “market knowledge.” Thus, the Ninth Circuit concluded that the jury properly found that there was a likelihood of confusion as to Bob Marley’s “endorsement” of Defendants’ products.

Defendants also argued that the claim for a false endorsement should fail because Bob Marley’s image had not been used to endorse some other product. The Court rejected this argument and held that the use of Bob Marley’s image on Defendants’ product itself was sufficient to state a claim under the Lanham Act since it had been “used directly on the Defendants’ goods,” as required by section 1125(a).

Finally, the Defendants argued that allowing Plaintiffs to prevail on their false endorsement claim under 15 USC §1125(a) would essentially create a “federal right of publicity.” The Ninth Circuit rejected this argument as well, recognizing that a claim under the Lanham Act for false endorsement was different than a state right of publicity claim because it added the additional element of likelihood of confusion. The Court found that the inclusion of this additional factor, coupled with the assumption as to Congress’ intent, led to the conclusion that a false endorsement claim under the Lanham Act was sufficiently different from and did not create a federal right of privacy claim.

One issue that permeates the Ninth Circuit’s opinion appears to be the fact that Defendants chose to waive or not pursue certain defenses as to Plaintiffs’ false endorsement claim. These included the aesthetic functionality defense as well as a defense under the Copyright Act that were not developed in the lower court. As a result, the Ninth Circuit was precluded from considering them and thus it is uncertain whether the assertion of these defenses would have led to a different result.