Category: Uncategorized

Consumer Perception is Key to Registration of Generic “.com” Marks

In an 8-1 decision, the Supreme Court held in U.S. Patent and Trademark Office v. Booking.com that “generic.com” marks may be registered trademarks or service marks when consumers do not perceive them as generic.

Booking.com is a travel company that provides hotel reservations and other services under the brand “Booking.com,” which is also the domain name of its website. Booking.com filed applications to register four marks in connection with travel-related services, each containing the term “Booking.com.”

A United States Patent and Trademark Office (USPTO) examining attorney and the USPTO’s Trademark Trial and Appeal Board (TTAB) both concluded that the term “Booking.com” is generic for the services at issue and is therefore unregistrable. According to the TTAB, “Booking” means making travel reservations and “.com” signifies a commercial website. The TTAB ruled that customers would understand the term “Booking.com” primarily to refer to an online reservation service for travel, tours, and lodging. Alternatively, the TTAB held that even if “Booking.com” is descriptive, it is unregistrable because it lacks secondary meaning.

Booking.com sought review in the US District Court for the Eastern District of Virginia. Relying in significant part on new evidence of consumer perception, the district court concluded that “Booking.com”—unlike “booking”—is not generic. The “consuming public,” the court found, “primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” The Court of Appeals for the Fourth Circuit affirmed the district court’s judgment.

During oral argument at the Supreme Court, the USPTO argued that the combination of a generic word and a “.com” must also be generic. The Court rejected this per se theory, ruling that whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel reservation services. According to the Court, if “Booking.com” were generic, one might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” Additionally, one might similarly expect that a consumer, searching for a trusted source of online hotel reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider. However, as noted even by the USPTO and the dissent, only one entity can occupy a particular Internet domain name at a time, so a “consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.”

The Court further opined that the USPTO’s fears that trademark protection for “Booking.com” could exclude or inhibit competitors from using the term “booking” or adopting domain names like “ebooking.com” or “hotel-booking.com” are unfounded. According to the Court, this is an issue for any descriptive mark and comes down to a likelihood of confusion analysis.

Justice Sotomayor’s Concurrence

In a concurring opinion, Justice Sotomayor agreed that there is no per se rule against trademark protection for a “generic.com” mark. However, she cautioned the use of surveys as they can have limited probative value depending on the survey design.

Justice Breyer’s Sole Dissent

Justice Stephen Breyer, the sole dissenting justice, argued that the majority disregarded important trademark principles and sound trademark policy. According to Justice Breyer, “[t]erms that merely convey the nature of the producer’s business should remain free for all to use.” Thus, under the majority’s approach, many businesses could obtain a trademark by adding “.com” to the generic names of their products, which Justice Breyer claimed could have widespread anticompetitive effects, and the majority’s reliance on the need to prove confusion and the statutory descriptive use privilege to protect competitors, underestimates the threat of costly litigation.

Implications

The decision in Booking.com expands trademark protection for seemingly generic marks simply by adding “.com” to the mark. A registrant need only rely on the consumer’s perception of the mark, which can be shown by the use of surveys. Thus, even with Justice Sotomayor’s caution against the use of surveys, surveys are likely to become more important during the registration process and in any subsequent litigation.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.

For more on the Booking.com case, see the National Law Review Intellectual Property Law section.

SCOTUS Favors Employers’ Religious Liberties Over Employee Rights

The Supreme Court of the United States (SCOTUS) issued two important decisions this week in cases reflecting the ongoing legal tensions between employers’ religious liberties and the right of employees to be free from discrimination; and in both cases, SCOTUS tipped the scales decidedly in favor of employers’ religious liberties.

First Amendment Supersedes Employment Discrimination Claims

The Supreme Court issued a decision in two similar cases – essentially dismissing the discrimination claims brought by two Catholic school teachers who were discharged from their instructional positions at two different Catholic schools in southern California. In Our Lady of Guadalupe School v. Morrissey-Berru (19-267), and St. James School v. Biel (19-348), the Supreme Court held by a 7-2 majority that the U.S. Constitution’s First Amendment Religion Clauses foreclose the teachers’ employment discrimination claims. In the OLG case, the former teacher sued for age discrimination; in the St. James case, the teacher was dismissed after she sought a leave of absence for cancer treatment. The teacher later passed away.

Relying on the “ministerial exception” outlined in the 2012 SCOTUS decision in Hosanna-Tabor Evangelical Lutheran Church v. EEOC, 565 U.S. 171 (2012), the majority opinion, authored by Justice Samuel Alito, noted that “religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.”

Justice Sonia Sotomayor, joined by Justice Ruth Bader Ginsburg in dissent, criticizes the majority for its distillation of the Hosanna-Tabor standard into “a single consideration: whether a church thinks its employees play an important religious role,” and observes that it “strips thousands of schoolteachers of their legal protections.”

Religious Exemptions From Birth Control Mandate Under the Affordable Care Act

In a similar but procedurally more complicated ruling, the Supreme Court upheld the federal government’s expansion of a federal rule that exempts employers with religious or moral objections from being required to provide employees with health insurance coverage for birth control under the Affordable Care Act (ACA).

In a 7-2 decision in Little Sisters of the Poor v. Pennsylvania (19-431), SCOTUS tackled the latest skirmish of the ACA’s birth-control mandate. The ACA mandate generally requires employers to provide female employees health insurance with access to contraception. Religious entities have repeatedly challenged the rules, as well as the opt-out accommodation process developed under the Obama administration for employers with religious or moral exemptions.  (The Trump administration had expanded those exemptions.)

With the majority opinion authored by Justice Clarence Thomas, SCOTUS held that the departments of Health and Human Services, Labor, and the Treasury had authority to issue rules for employers. In a concurring opinion, Justice Elena Kagan (joined by Justice Stephen Breyer) acknowledges the statutory authority of the federal agencies, but cautions, “that does not mean the Departments should prevail when these cases return to the lower courts. The States challenged the exemptions not only as outside the HRSA’s [Health Resources and Services Administration’s] statutory authority, but also as ‘arbitrary [and] capricious.’”

In her dissenting opinion, Justice Ginsburg (joined by Justice Sotomayor) notes, “Today, for the first time, the Court casts totally aside countervailing rights and interests in its zeal to secure religious rights to the nth degree.”

Takeaways for Discerning Employers

While these Supreme Court decisions, in tandem, may bolster employers’ confidence in their sincerely held beliefs and moral objections about certain employment-related decisions, it is also important to recognize its limitations.  Employers should strategize with their leadership and legal counsel to carefully weigh whether and to what extent these decisions should (or will) inform their own policies and practices, as well as any resulting reputational impact and workplace morale considerations.

© 2020 BARNES & THORNBURG LLP

For more recent SCOTUS employment decisions, see the National Law Review Labor & Employment law section.

IMS Insights Podcast: Episode 18-Tips From the “Hot Seat” for Remote Hearings and Court Events Amid the Pandemic

In this episode of the IMS Insights Podcast, we speak with trial presentation advisor Jeff Dahm about his perspective as a hot seat operator and his role during the COVID-19 pandemic.

Teresa Barber: So, Jeff, tell me, we’re in a really interesting time and you mentioned this just a couple of moments ago that so many people are in very new environments. We’re having very high stakes meetings and events but in a totally virtual environment and you were talking about other folks in the industry who have those hot seat trial presentation skills for attorneys, for clients, what should they be … I mean are there things that a traditional trial presentation consultant could do right now that can help attorneys feel a little more confident, a little more prepared when they’re going into those virtual meetings, virtual events?

Jeff Dahm: Sure, sure. Trial presentation consultants are quite familiar with the way the video conferencing software works. Call them up, have them assist you in the video conferencing platform. Have them help you make sure that everything works. Schedule a Zoom meeting with your trial presentation consultant to run through a program, make sure it looks good on the other end. Hire them, send them the PowerPoint, run the PowerPoint and you watch it click through, so you can see what the client … What the judge is going to see, what the other opposing counsel is going to see. Just like in a war room, you do run throughs, run throughs and run throughs but good attorneys that know what it’s about, practice because they look effortless in court because they practice and you should do the same thing with your consultant if you have an online hearing. Practice.

Dahm: I mean you would need to practice in person, you’re going to want to practice with an online hearing. It’s very important. So, they can help you with that. Make sure that if you want to show something in OnCue or Trial Director, make sure that the documents come up right. Make sure the video looks good. If you have to show video clips in your hearing, the trial presentation consultant can help you edit those clips, get them together, organize them. I mean there’s a lot of stuff that happens in trial that’s technical that doesn’t actually happen in the trial. It happens before the trial and you still have those things that are going to have to happen and the trial presentation consultant can help you with those.

Barber: Nice. Yeah, interesting. Yeah, and I would imagine, let’s say we’re in a virtual environment or a virtual hearing that stuff is very visible, right? If there’s a glitch in something.

Dahm: Yeah, you’ve got to be smooth. There’s little things like when you press … When you start the PowerPoint, that you don’t have the speaker view on the screen, you have to switch. I mean there’s a seamless operation that a good trial tech does in court and the same seamless operation can happen in the online hearing and it’s the same sort of method to keep things running smooth just like you do in a courtroom.

Barber: Yup, very interesting. So, without disclosing anything confidential, you’ve had a very lengthy career, Jeff, a lot of interesting trials, a lot of interesting moments. Without disclosing anything confidential, could you share maybe a moment where you would be especially proud of what you were able to contribute and the outcomes that you were able to bring?

Dahm: Sure, sure. So, I would say, I think about all of these years I’ve been doing this and the moments that stand out and for me, in a court … I mean I have some pretty dramatic, crazy things that have happened but the most effective and the most jaw dropping moments are when you impeach a witness on the stand and when you play a video clip that shows that they contradicted themself on the video, that is truly one of the most effective moments in a trial to win. You have an expert witness up there who’s very cocky, who thinks they know everything and thinks they read their deposition and has everything right and they put their story wrong together and as a trial presentation consultant, I have these video clips, impeachment clips lined up, ready to go and for me, it’s the most important part of my job and I instill this in all of my trial techs is that you need to make sure you bring up that impeachment clip fast in order for the effectiveness of it and it’s crucial.

Dahm: If a witness is on the stand and they say X and I have a video clip that says Y and my client asks for it, boom, it’s got to come up in seconds to get the effective … And if you do that, you really do have the best chance of discrediting a witness you really want to. I mean it’s not pleasant always, it’s a little uncomfortable at times but it’s the most effective moment in a trial, I believe.

Dahm: I also have a couple of random little stories of things that have happened to me.

Barber: Yeah, I was going to ask you, 23 years sitting in court, in trials, you’ve spent more time in courtrooms than most attorneys would have, and you’ve got to have some stories. Are there any moments that standout to you?

Dahm: There are a couple of them here. So, I was involved in this case in like 2001, 2002, early on in my career. It was a dog mauling in San Francisco, and there was a woman who was mauled. It was a terrible, terrible story and we worked with the district attorney’s office to help prosecute these people that have these dogs and so I was in the courtroom. The trial was on Court TV. It was like a big case and then the defense counsel gets up and she stands up and she gets on the floor and starts barking like a dog, in the middle of the courtroom, and the whole place is like going crazy barking like a dog. Okay, so I do my presentation and my mother was watching at home and I talked to her afterwards and she said, “Now, I finally understand what you do for a living.” She couldn’t get it before.

Dahm: I’m like, “Yeah, I go into court, help display evidence.” But she saw me on TV. She saw the attorney barking like a dog and she’s like, “Now, I kind of get what you do.”

Barber: Oh, my goodness.

Dahm: Another big moment for me was I did a trial for a Pueblo in New Mexico to try and get land back from the government under aboriginal Indian title. It was a truly amazing case and it was incredible and one of the witnesses was one of the medicine men from the Pueblo and he got up on the stand and he led the whole entire congregation in the courtroom in a prayer and they were all in a chanting prayer and it was so overwhelmingly amazing and beautiful and I couldn’t believe that I got to be a part of this, sitting in a federal courtroom. It was pretty amazing. And at the end of that trial, they gave me a piece of pottery that they make, the Pueblo makes this pottery, and it’s truly one of my most prized possessions. It was just a fantastic trial. I really enjoyed it.

Barber: Sounds like some moments definitely stay with you.Dahm: Yeah, yeah, but you get the big moments like you get to go to some event. I sat … You get court side at a game as like a thank you, like flying on a plane. You end up in these crazy moments in this job that you don’t even expect and you’re like oh my gosh, this is really happening. I’m just the trial tech but trial tech is a very important part of the whole process, so it’s just been a great 25 years for me. It’s been really good.

Barber: Yeah. It sounds really interesting and I have to say too, you’re working with really impressive attorneys too quite a bit and how clients certainly have to have shaped your mindset, your approach to everything. What role have clients played in how your career’s developed?

Dahm: Yeah, so I started early on in my career working with a firm, Keker, Van Nest & Peters, and they were … I got in on some cases early on and I started working with the whole firm and just there … Seeing their work ethic and their passion for their job and they were all just dynamic people who were so effective in a courtroom and fun people, fun people to be around and so great at their jobs and I saw this early on in my career and I was like I want to be like this.

Dahm: So, I sort of modeled my work ethic and my career path based on the way that this firm has done their work and it’s been a really, really great experience for me working with them and also just learning so much about just the law and being in court and working on a team and working effectively on a team. I mean these are some values that I learned from them that I really, really take that from every part of my life. It’s been really, really great for me. So, I thank them immensely for what they’ve done for me.

Barber: That kind of mindset too makes it a little more … I mean it makes it fun, right? You kind of get that back when you put it into your work.

Dahm: Yeah. It’s been fantastic, yeah.

Barber: We were talking a moment ago about nearly 25 years in the industry working in trials, working as a trial presentation consultant, you’ve seen a lot of trials and certainly, that truth makes it over to clients, to attorneys. Do you ever have clients who stop you during trial or kind of pull you to the side and want your opinion? How does that work?

Dahm: I find that the clients that ask my opinion and the clients that want to know what the trial tech thinks are the clients that tend to win. I mean you have this invaluable resource sitting right there in the courtroom that has sat through a lot of trials. I mean let’s say … I mean I’ve sat through hundreds of them because I’ve been doing this for 25 years but even somebody who’s only done it 10 years, five years, they still have more experience than most attorneys in a courtroom. I wrote an article a few years ago about view from the hot seat, showing what the hot seat operator, the five most important things that a hot seat operator can tell a client to win and I tell you, I stand by those.

Dahm: It’s just you get so much just from sitting in a courtroom and I pay attention. I mean I follow the cases. I mean you have to if you’re going to be helping bringing up evidence because when they turn around and say can you bring up the statute, they don’t always say exhibit 55, you have to know what the statute is. So and they do ask my opinion and I give my opinion quite candidly whenever I am asked because it doesn’t help anybody to not tell the truth in these situations so I just tell it like it is, say you’re not going to win that argument, you need to try this different and they really do appreciate it and then a few clients, it turns into like a half an hour session at the end of every single day of court, “Okay, Jeff, what about this client? What about this witness? What happened here? What do you think with this judge? What about this ruling?” And I give my opinion and trust me, I have them.

Barber: Like a debrief?

Dahm: Yeah, that’s exactly. You sit in court 25 years, you have an opinion on everything that happens in that courtroom and it tends to run … Cases tend to run similar, even though the details are different but the cases generally run at the same flow so I could help with that. I help with the flow. I help with the cadence. I help with the message and making sure they’re getting a clean, simple, effective message to the jury and that’s how you win.

Barber: Right, which yeah, great way to boil it down to the fundamentals too. That’s an interesting segue here because there are attorneys who feel that they’ve kind of got the bases covered. That they have a paralegal who’s really talented who may be able to be the hot seat operator at their trial. Is that an effective strategy most of the time from what you’ve seen?

Dahm: So, no. Well, I shouldn’t say no overall because if you have a case that has 50 exhibits, small case, not much going on in the case, two or three day case and you don’t have any depo, I don’t see any reason why a good paralegal that you trust could run the show. Those are not the cases for trial presentation consultants as much. You have a big case, you have a heavy load, you have a lot of video depositions, you have multiple things to handle, then you’re going to want to have a trial presentation consultant in there because your paralegal’s going to have a lot to do too in a heavy evidence case. They’re going to have a lot of copying, a lot of binders, a lot of things to submit to the court, I mean filings. I mean there’s just so much for the paralegal to do and you can also …

Dahm: The trial presentation consultant becomes a part of your team, so there’s another person that goes in the whole collective group and if the case can afford it, you should always do it because you will find at the end of it that you were like wow, that was amazing because you have this sort of … This like nirvana that happens in court when you call out exhibits and they come on the screen. I’ve heard clients talk about this nirvana and they say it’s like you’re reading my mind but that’s just a good trial tech doing the good job in the courtroom and the paralegal is focused on being a paralegal. All we’re focused on is bringing the stuff up in court and bringing it up fast and effectively and that is hard to do. It may seem easy but it’s not.

Barber: Yeah, and I was going to say it sounds like there’s a level of kind of perspective and expertise that comes to that. You cannot put that kind of responsibility on a paralegal to bring all of that depth of experience of being in … Like you said, you’ve had hundreds of trials, that perspective adds a level of what should really build confidence in the client to be able to trust, to be able to say, “Okay, I’m going to focus on the strategy. I’m going to focus on telling that story and then lean on the expertise and the perspective of Jeff or my trial presentation consultant who’s here with me.”

Dahm: Yeah, it is a luxury. I mean it can be a luxury if you don’t have the means but if you do have the means, it’s a necessity because it makes your case run smoother and you … Everything that gets on that screen, I mean just think about this, every single thing you put on the screen is so important. It is so important to the end result of the case, what goes on that screen and someone who has the experience to put it on the screen in an effective manner is going to make you win your case. I mean it’s just that simple. I mean not always but it definitely helps. If jurors can see the way it looks and it looks pretty and it looks good and it’s easy to adopt, they’re going to adopt it.

Barber: Mm-hmm (affirmative).

Dahm: So, it’s interesting.

Barber: What I want to ask you too, we’re starting to see some courts reopening but even … And businesses reopening and some restrictions kind of easing related to the pandemic but even with a lot of restrictions lifting and some courts starting to move forward with physical schedules, we’re going to have people who aren’t able to travel. So, when we think about witnesses, we’re going to see witnesses unable to travel. How do you think courts are going to handle that and what advice would you have for attorneys right now?

Dahm: Sure. So, I’ve dealt with this issue for years. I’ve dealt with it at least a few times a year for years and so what happens is you have a witness that can’t travel and they want to remotely testify and so they call me and they say how can we have a witness testify remote? So, I go through the whole thing, explaining how we can put … Have a camera where they’re at, you have a camera in the courtroom … You put the signal into a projector in the courtroom. You can display the person live and you can put documents next to it. So, I have figured out logistics to get this done and then almost every single time, when they propose it to the judge, the judge says no, they have to testify, they have to come or you play a deposition. That’s going to change.

Dahm: So, now, all this preparation that I have done over the years to figure out how to get a live feed in the courtroom and how to show exhibits while it’s going on the screen, all that work is done. I have it ready to go. So, if a client calls me and they need to have a witness testify remote, we are ready to go.

Barber: Yeah, definitely interesting. It certainly makes you wonder how much of the historical cultural hesitance we’ve had about virtual versus in-person that I think COVID, if nothing else, may be wearing some of that down.

Dahm: And with all the testing I’ve done, with all the software, I’ve tested OnCue, I’ve tested Trial Director, I’ve tested PowerPoint. I’ve tested anything you would want to just use to display in a courtroom and it all works online. It all works in the virtual hearing and you should be using it because the case is just as important even though you’re not there. We could have a witness testifying remote. I mean there’s really no limits, I don’t think, at this point. With all of our years of using video conferencing software in my industry and then now we have to apply it to trial tech and trial presentation, bring it on because we are ready to go.

Barber: Yeah, very interesting, Jeff.

Dahm: It’s exciting too. It’s really exciting for me too because it’s like I have such a passion for trial presentation and then to be able to do it in a new method, in a new platform, in a new way is just so exciting because it’s like I feel very comfortable online and I know my techs do too, feel very comfortable in the Zoom meeting or a Skype call. I can share screens, switch back and forth, I mean it’s not hard for me because that’s what I’ve done in the courtroom for 25 years. So, I’m really excited to be able to do all of this stuff and I’m sitting at home now. It’s just, it’s great for me. So just got to have people realize that it is as important as it was.

Barber: Yeah, and reach out for help, right? Because I think not everyone shares your sense of comfort with it and I think that it’s just kind of interesting to make those connections that I think there are attorneys who could use some help right now just to get that confidence in this weird new normal of the remote world.

Barber: So, Jeff, it’s been really interesting having you on today. Wonderful to hear your really interesting perspective about the current situation and also just learn as little bit more about what you’re bringing to the table and your background.

Dahm: Great, yeah. Thanks for having me, Teresa. Yeah, this has been really fascinating. I just love explaining how trial presentation works and what we can do and it’s just … As I said, it’s my passion and I just enjoy talking about it, so I could talk about it with you for another couple of hours. It’s just …

Barber: Well, we may take you up on that, Jeff. So, we’ll have you back sometime soon. So thank you. I really appreciate it. Thanks, Jeff.

Dahm: Thanks, Teresa.

© Copyright 2002-2020 IMS ExpertServices, All Rights Reserved.
ARTICLE BY IMS ExpertServices.
For more on trials amid the pandemic, see the National Law Review Litigation / Trial Practice section.

Former JUUL Employee Seeks Injunction Against Pre-Employment NDA

On June 4, 2020, a former employee of electronic cigarette maker JUUL Labs, Inc., filed a complaint in California District Court seeking to enjoin JUUL’s enforcement of a non-disclosure agreement (“NDA”) she was required to sign as a condition of her employment. The former employee, Marcie Hamilton, alleges in her complaint that JUUL required her to sign an NDA prohibiting her from disclosing “essentially, everything related to JUUL” (emphasis in original) prior to beginning her employment. She further alleges that the “terrorizing effect” of the NDA, which JUUL requires all of its employees to sign prior to beginning their employment, unlawfully precludes employees from “blowing the whistle” to government or law enforcement agencies about suspected illegal activity, in violation of California law.

As alleged in the complaint, the JUUL NDA requires employees to “hold in strictest confidence” and not disclose, among other things, JUUL’s customers, products, markets, and any “information disclosed by the Company to [the employee] and information developed or learned by [the employee] during the course of employment.”  Employees are prohibited from disclosing such information to “any person, firm, or corporation, without written authorization from the Company’s Board of Directors.”  Having no temporal limit, the prohibition “lasts forever.”  According to the complaint, JUUL relies on these NDAs to prevent employees from providing relevant information in ongoing government investigations, as well as administrative and judicial actions, into the use of JUUL’s products by minors and the health dangers of its products, more broadly.

Ms. Hamilton alleges that the NDA’s prohibition on disclosing seemingly any information about JUUL whatsoever to any entity whatsoever violates California Labor Code § 1102.5(a). Section 1102.5(a) prohibits employers from making, adopting, or enforcing a rule, regulation, or policy that “prevent[s] an employee from disclosing information to a government or law enforcement agency,” or to “any public body conducting an investigation, hearing, or inquiry,” if the employee reasonably believes the information discloses a violation of law. Ms. Hamilton also alleges that the NDA violates California Government Code § 12964.5. Section 12964.5 was enacted in response to the #MeToo movement and prohibits employers from requiring employees to sign any document that “purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.”  Ms. Hamilton alleges that in violating these and other California statutes, the NDA has caused “ongoing and irreparable public harm.”  In her lawsuit, she seeks a finding that the NDA is unenforceable and an order enjoining JUUL from attempting to enforce it against her, as well as other forms of relief.

Employers’ Use of NDAs to Intimidate and Muzzle Employees

Unfortunately, NDAs like the one JUUL requires employees to sign as conditions of their employment are not uncommon. To the contrary: large corporations – and powerful individuals – often require employees to sign similar NDAs as conditions of their employment in an effort to stymy competition, insulate themselves from prosecution, and even protect themselves from public embarrassment. As Ms. Hamilton points out in her complaint, former Hollywood producer and convicted rapist Harvey Weinstein used similar pre-employment NDAs to prevent victims of his sexual abuse from reporting it to law enforcement. See Edward Helmore, “Harvey Weinstein lawsuit: attorney general says ‘we have never seen anything as despicable,’” (February 12, 2018).

Disgraced restauranteur Mike Isabella likewise used draconian NDAs to prevent his employees from reporting sexual harassment in his restaurants, including by prohibiting employees from disclosing any “details of the personal and business lives of Mike Isabella, his family member, friends, business associates and dealings” – seemingly without any employment-related purpose whatsoever. In that case, an employee’s breach of the NDA carried with it an unconscionably high penalty of $500,000 per breach, plus attorneys’ fees expended by the company as a result of the breach. See Maura Judkis and Time Carman, “Mike Isabella’s restaurants used nondisclosure agreements to silence sexual harassment accounts, lawsuit alleges.” (April 3, 2018).

Not all states have statues like California’s, which expressly prohibit employers from restricting employees’ ability to disclose information about suspected violations of law to government or law enforcement agencies. But many states nevertheless uphold a clear public policy against doing so. If you signed an NDA as a condition of your employment and want to blow the whistle about any type of illegal conduct by your employer, consider consulting with an employment attorney to determine whether the agreement prohibits you from providing information about violations of law to government or law enforcement agencies and, if so, whether it may be unenforceable.

©Katz, Marshall & Banks, LLP

For more on non-disclosure agreements, see the National Law Review Labor & Employment law section.

June 2020 New Jersey State Regulatory Developments

Here are the most recent health care related regulatory developments as published in the New Jersey Register in June 2020:

  • On June 1, 2020, at 52 N.J.R. 1150(a), the Department of Health Commissioner issued a notice of rule waiver/modification/suspension pursuant to Executive Order No. 103 (2020) related to the qualifications an administrator of an assisted living residence or comprehensive personal care home.  This waiver was issued to ensure that a sufficient number of qualified administrators are available to staff New Jersey’s assisted living facilities and comprehensive personal care homes so that the facilities can effectively address the increasing number of both staff and residents being diagnosed with or suspected of having COVID-19.  Section 8:36-3.2 has been temporarily amended to permit individuals whose Assisted Living Administration certification had become inactive within the past three years (April 1, 2017-April 1, 2020) to restore their licenses provided that they have not been disqualified, is not under an investigation by the ALA panel or other state licensing authority, does not have a suspended, revoked or restricted certification and no failed a criminal background check.  If these bars have been cleared, then the applicant must complete a 10 hour Temporary Living Administrator Program sponsored by Longtree & Associates, LLC; successfully pass a criminal background check pursuant to N.J.A.C. 8:43I-4; and pay the current Assisted Living Administrator certification fee.

This temporary rule waiver/modification, as well as any provisional certifications issued thereunder, will expire 45 days after the end of the Public Health Emergency declared by Governor Philip D. Murphy in Executive Order No. 103 (2020). After the provisional certifications issued under this subsection have expired, individuals whose Assisted Living Administrator certifications have expired will no longer be permitted to function as certified assisted living administrators. Individuals wishing to obtain full certification as an assisted living administrator will be required to successfully complete all the requirements for restoration of such certifications set forth in this section (excluding the new subsection).

  • On June 1, 2020, at 52 N.J.R. 1151(a), the Department of Health Commissioner issued a notice of rule wavier modification/suspension pursuant to Executive Order No. 103 (2020) related to the time period within which a certified medication aide candidate must sit for the medication aide exam after completing his or her medication aide training course. Pursuant to this rule waiver/modification, if a candidate’s deadline to sit for the standardized examination falls between March 1, 2020 and May 31, 2020, then the candidate shall have an additional six (6) months from the original deadline to sit for the examination. For example, if a candidate was required to sit for the examination by March 1, 2020, the deadline will be extended to August 31, 2020. The remaining provisions set forth in N.J.A.C. 8:36-9.2 shall remain in effect.

N.J.A.C. 8:36-9.2(c) requires a certified medication aide candidate to sit for the Department of Health approved standardized examination within six (6) months of successfully completing an approved medication administration training course. The standardized examinations are administered by PSI Testing Centers. In an effort to protect the community from the spread of COVID-19, PSI Testing Centers are closed and no longer administering standardized examinations. As a result, medication aide candidates that successfully completed the approved training course are not able to sit for the standardized examination within the specified time frame. Accordingly, an extension of the time period that certified medication aide candidates have to sit for the exam is warranted so that the candidates do not have to unnecessarily retake the training course to qualify for the exam and gain certification after the public health emergency concludes.

  • On June 1, 2020, at 52 N.J.R. 1151(b) the Department of Health Commissioner issued a notice of rule wavier modification/suspension pursuant to Executive Order No. 103 (2020) regarding nurse aid competency.  N.J.A.C. 8:39-43.1 sets forth certain criteria for an individual to qualify to work as a Certified Nurse Aide (CNA) in a licensed long-term care facility in New Jersey. In order to increase the number of direct care staff available to work at long-term care facilities, the Department is modifying the requirements of N.J.A.C. 8:39-43.1. Pursuant to this rule waiver/modification, Personal Care Assistants (PCA) and Certified Medical Assistants (CMA) are temporarily permitted to function in the role of a CNA in licensed long-term care facilities within New Jersey so long as the PCA or CMA meet the following conditions: (1) the CMA or PCA must complete the Temporary Nurse Aide training course at  http://educate.ahcancal.org/products/temporary-nurse-aide  prior to functioning as a CNA; (2) the facility shall provide staff a basic orientation addressing fire safety, infection control, and abuse prevention prior to allowing them to perform any duties in the facility; and (3) the facility shall maintain relevant supervision requirements for CMAs and PCAs functioning as CNAs. The remaining provisions set forth in N.J.A.C. 8:39-43.1 shall remain in effect.

Long- term care facilities that take action under the terms of this waiver/modification must also provide a written report to the Department regarding the facility’s implementation. This waiver is effective only during the period of Public Health Emergency declared by Governor Philip D. Murphy in Executive Order Nos. 103 and 119. Within 45 days after the Public Health Emergency has ended, PCAs and CMAs will no longer be permitted to function in the role of a CNA and anyone wishing to act as a CNA will be required to satisfy the competency requirements set forth in N.J.A.C. 8:39-43.1. Long- term care facilities will also be required to resume operating in accordance with all licensure standards within 45 days after the Public Health Emergency has ended.

  • On June 1, 2020 at 52 NJ.R. 1154(a) the Department of Health Commissioner issued a notice of rule wavier modification/suspension pursuant to Executive Order No. 103 (2020) related to recertification of EMTs whose certifications have expired. Pursuant to this rule waiver and modification, individuals whose EMT certification expired within the past five years (April 1, 2015 to April 1, 2020) are eligible for “COVID-19 EMT re-entry” so long as: (1) the applicant is not currently under investigation by any State EMT licensing authority; (2) the applicant does not have a proposed or final enforcement action pending or entered against him or her by any State EMT licensing authority; (3) the applicant is not excluded from acting as an EMT pursuant to a settlement reached with any State EMT licensing authority; (4) the applicant has not been cited for impersonating an EMT and/or Paramedic; (5) the applicant does not have a criminal history or pending criminal charges referenced in N.J.A.C. 8:40A-10.2; and (6) the applicant successfully completed all continuing education audits conducted by the Department while certified as an EMT. If an applicant does not fall into one of these disqualification categories, the applicant may proceed with the “COVID-19 EMT re-entry” process that is outlined in the regulations.  Upon successful completion of these requirements, the Department will issue the applicant a 6-month provisional EMT certification. To obtain full certification as an EMT, the applicant must successfully complete a New Jersey approved refresher program and achieve a passing score on the National Registry EMT-Basic Certification Examination, as set forth in N.J.A.C. 8:40A-7.6, by the end of the provisional period.  Individuals issued provisional certifications under this waiver shall only provide services as an EMT in a limited capacity as specified in the regulations.
  • On June 1, 2020, at 52 N.J.R. 1156(a) the Department of Health Commissioner issued a notice of rule wavier modification/suspension of N.J.A.C. 8:41A-4.3, which set forth the requirements necessary for individuals to restore their paramedic certifications from inactive status to active status, pursuant to Executive Order No. 103 (2020).  Pursuant to this rule waiver and modification, individuals whose EMT-Paramedic certification was placed into inactive status within the past five years (April 15, 2015 to April 15, 2020) are eligible for the “COVID-19 EMT-Paramedic Re-Entry” so long as: (1) the applicant is not currently under investigation by any State EMT-Paramedic licensing authority; (2) the applicant does not have a proposed or final enforcement action pending or entered against him or her by any State EMT-Paramedic licensing authority; (3) the applicant is not excluded from acting as an EMT-Paramedic pursuant to a settlement reached with any State EMT-Paramedic licensing authority; (4) the applicant has not been cited for impersonating an EMT and/or EMT-Paramedic; (5) the applicant does not have a criminal history or pending criminal charges referenced in N.J.A.C. 8:41A-5.2; and (6) the applicant successfully completed all continuing education audits conducted by the Department’s Office of Emergency Medical Services (OEMS) while certified as an EMT-Paramedic and/or EMT. If an applicant does not fall into one of these disqualifying categories, then the applicant may proceed with the “COVID-19 EMT-Paramedic Re-Entry” process.  In a 2 person crew of a Mobile Intensive Care Unit, only 1 of the 2 people may possess a 6 month provisional/modified status.
  • On June 15, 2020 at 52 N.J.R. 1240(a), the Office of the Governor issued Executive Order 145 (2020) allowing elective surgeries and invasive procedures to resume on May 26, 2020.
  • On June 15, 2020 at 52 N.J.R. 1251(a), the Department of Health Commissioner issued a notice of rule wavier modification/suspension of N.J.A.C. 8:43G-31.11 regarding the maintenance of respiratory care equipment in hospitals, pursuant to Executive Order No. 103 (2020).  The waiver is effective during the period of the Public Health Emergency declared in Executive Order No. 103 and expires forty-five (45) days after the Public Health Emergency has ended.

Pursuant to this temporary rule waiver/modification, hospitals shall perform a mechanical and electrical function test on a ventilator released from State storage or from the federal stockpile prior to placing it into service and using it for the first time. The ventilator mechanical and electrical equipment function test shall consist of the following: performance of standard preoperational checks as recommended by the manufacturer; performance of a power-on self-test; and running the ventilator for a minimum of 15 minutes. Upon successful completion of the test, the hospital shall affix a sticker indicating the date that the ventilator passed the test. Hospitals shall create and maintain records showing that each State storage or federal stockpile ventilator placed into service met these requirements prior to being placed into service.

Hospitals that take action under the terms of this waiver must also provide a written report to the Department detailing the number of ventilators placed into service and any adverse outcomes attributable to these actions.  Upon the expiration of this temporary rule waiver/modification, hospitals will be required to resume operating in accordance with all licensure standards and perform the required equipment checks and maintenance. The remaining provisions set forth in N.J.A.C. 8:43G-31.11 shall remain in effect.

  • On June 15, 2020, at 52 N.J.R. 1251(b) the Department of Health Commissioner issued a notice of rule wavier modification/suspension of N.J.A.C. 10:161B-11.10, which would permit individuals receiving opioid treatment services to receive medication that they can take at home, pursuant to Executive Order No. 103 (2020).  In order to ensure the clients of OTPs have access to needed medications, the Department is waiving the requirements of N.J.A.C. 10:161B-11.10 and permitting facilities to provide medication to clients at locations other than the location listed on their OTP facility license, in accordance with the guidance issued by the Drug Enforcement Agency (DEA078) on April 7, 2020. The intent of the guidance is to provide OTPs greater flexibility in the delivery of take-home doses of methadone to their patients. OTPs must still adhere to certain standards. Specifically, before using the unregistered off-site location, the OTP must first contact its State Opioid Treatment Authority (SOTA) and receive the SOTA’s approval to use the offsite location. Additionally, the OTP must receive approval from the local DEA field office. Once the SOTA approves the location, it should contact the local DEA field office. If the SOTA does not contact the DEA field office, the OTP must contact the field office itself. The facility must submit the approvals received from the SOTA and the DEA field office to the Department. Each day, the facility may only transport those take-home methadone doses to the off-site location that the facility reasonably anticipates will be delivered to clients that day. The facility cannot transport a reserve of methadone to the off-site location. Any methadone not delivered to clients at the off-site location must be returned to the facility’s DEA-registered location the same day. No methadone may be stored at the off-site location when a facility staff member is not present

All OTPs that take action under the terms of N.J.A.C. 10:161B-11.10 shall provide a written report to the Department detailing the extent to which the facility implemented the terms of this waiver/modification and any adverse outcomes attributable to such implementation. OTPs may operate under the terms of this waiver/modification as necessary until the conclusion of the public health emergency declared by Governor Philip D. Murphy in Executive Order Nos. 103. Upon the conclusion of the public health emergency, OTP facilities will be required to resume determining eligibility for take-home medication under the criteria set forth in N.J.A.C. 10:161B-11.10(a).

  • On June 15, 2020, at 52 N.J.R. 1253(a) the Department of Human Services Commissioner issued a notice of rule waiver modification/suspension of certain rules at N.J.A.C. 10:51-1.25(j)(3), N.J.A.C.10:167A-1.27(j)(4) and N.J.A.C. 10:167C-1.25(j)(3), which require signatures by Medicaid/NJ FamilyCare, Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold beneficiaries at the time a prescription is dispensed or delivered. During the public health emergency, beneficiaries of these programs will no longer be required to provide signatures at the time a prescription is dispensed or delivered. The pharmacist must document in the patient’s profile the date the beneficiary received the prescription.
  • On June 15, 2020, at 52 N.J.R. 1287(a), the Department of Health Commissioner issued a public notice announcing the cancellation of the call for certificate of need (CN) applications for new home health agencies in accordance with the provisions of N.J.A.C. 8:42 and N.J.S.A. 26:2H-1 et seq. In accordance with N.J.A.C. 8:33-4.1(a), the next scheduled call for new home agencies will be July 1, 2022. The Department will continue to monitor the utilization and availability of home health services and, should the need arise, issue a future call for these services prior to July 1, 2022.
  • On June 15, 2020, at 52 N.J.R. 1287(b), the Department of Health Commissioner issued a public notice of postponement of  the certificate of need call for applications for home health care services in accordance with the provisions of N.J.A.C. 8:33 and N.J.S.A. 26:2H-1 et seq., scheduled for July 1, 2019, is hereby postponed.  The Department is in the process of gathering and evaluating data to determine whether there is currently a need for home health care services. Accordingly, it is necessary to delay the call for home health care services to allow the Department sufficient time to complete its evaluation of need, and to provide potential applicants and affected parties sufficient time to respond appropriately to a certificate of need call notice in the event the Department determines that a call is appropriate. If the Department proceeds with the call, then a call for home health care services will be published in an upcoming publication of the New Jersey Register, providing the necessary time for both potential applicants and interested parties to respond to the call notice. In the alternative, if the determination is made to cancel the call, then the Department will publish a cancellation notice in the New Jersey Register.
  • On June 15, 2020, at 52 N.J.R. 1247(a), the Department of Law and Public Safety, Division of Consumer Affairs, New Jersey Board of Nursing published a notice of administrative correction to the text of N.J.A.C. 13:37-7.2, pertaining to the education requirements for certification. Effective April 20, 2020, the Board deleted then-existing N.J.A.C. 13:37-7.2(b) and recodified then-existing subsections (c) and (d) as (b) and (c). (See 51 N.J.R. 922(a); 52 N.J.R. 896(a).) As part of the April 20, 2020 rulemaking, the Board inadvertently did not update the cross-reference at subsection (c) to account for the recodifications in this section. The Board is correcting that oversight to change the cross-reference at now-codified subsection (c) to refer to the “requirements of (a) and (b) above.”
© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved

Travelers Take Note: City of Chicago Issues Emergency Travel Order

If you, your colleagues, your employees, or your clients have travel plans to or from a COVID-19 hotspot, the City of Chicago is requiring a two-week quarantine. On July 2, 2020, the City of Chicago issued an Emergency Travel Order directing travelers either coming into Chicago or returning to Chicago from a state experiencing a surge in COVID-19 cases to quarantine for 14 days. The emergency order took effect on July 6, 2020, at 12:01 a.m. To date, this emergency order only applies to individuals arriving in Chicago. The State of Illinois has not taken similar action.

The emergency order applies to states that have had a case rate of COVID-19 greater than 15 new cases per 100,000 residents, per day, on a seven-day rolling average. The emergency order applies only if the traveler has spent 24 hours in the designated states. Therefore, if an individual simply drove through a designated state or had a connecting flight in a designated state, they are not subject to the restriction. In addition, the emergency order does not apply currently to international travel.

As of the date the emergency order was issued, the following states were subject to this quarantine restriction:

  • Alabama
  • Arkansas
  • Arizona
  • California
  • Florida
  • Georgia
  • Idaho
  • Louisiana
  • Mississippi
  • North Carolina
  • Nevada
  • South Carolina
  • Tennessee
  • Texas
  • Utah

This list is subject to change and is scheduled to be amended every Tuesday starting on July 14, 2020, with the changes to take effect three days thereafter, or the next Friday. For the latest information on the states subject to the travel ban, you can visit the City of Chicago’s website.

Importantly, an individual can be fined if found to be in violation of the emergency order. The fines range from $100 to $500 per day, up to a maximum $7,000. There are exemptions for “essential workers,” as designated by the Cybersecurity and Infrastructure Security Agency, such as individuals employed in emergency services, government facilities, and information technology. However, the definition of “essential workers” can be technical and the emergency order adds requirements for these professionals, including that the travel be for a work purpose and that any nonessential activities be avoided until the quarantine period has ended.

© 2020 Much Shelist, P.C.

For more COVID-19 travel restrictions, see the National Law Review Coronavirus News section.

Virginia Employees Protected From Retaliation for Raising Concerns About COVID-19 Workplace Safety Issues

On June 29, 2020, the Virginia Safety and Health Codes Board moved forward with an emergency workplace standard to curb the spread of COVID-19. These standards would apply to all Virginia employers and places of employment under the jurisdiction of the Virginia Occupational Health and Safety Administration.

Pursuant to 16 VAC 25-220, Emergency Temporary Standard, employers would be required to:

  • Mandate physical distancing on the job, i.e., “keeping space between yourself and other persons while conducting work-related activities inside and outside of the physical establishment by staying at least 6 feet from other persons. Physical separation of an employee from other employees or persons by a permanent, solid floor to ceiling wall constitutes physical distancing from an employee or other person stationed on the other side of the wall.”
  • Clean and disinfect all common spaces, including bathrooms, frequently touched surfaces, and doors at the end of each shift, and where feasible, disinfect shared tools, equipment, and vehicles prior to transfer from one employee to another.
  • Provide personal protective equipment to employees and ensure its proper use in accordance with VOSH laws, standards, and regulations applicable to personal protective equipment, including respiratory protection equipment when engineering, work practice, and administrative controls are not feasible or do not provide sufficient protection.
  • Assess the workplace for hazards and job tasks that could potentially expose employees to SARS-CoV-2/COVID-19 and ensure compliance with the applicable standards for “very high,” “high,” “medium,” or “lower” risk levels of exposure.
  • Inform employees of methods of self-monitoring and encourage employees to self-monitor for signs and symptoms of COVID-19 if they suspect possible exposure or are experiencing signs of forthcoming illness.
  • Notify their own employees who were at a worksite with an employee who subsequently tested positive for active COVID-19, other employers whose employees were also present, and the building/facility owner of the affected site within 24 hours of discovery of possible exposure.
  • Develop and implement policies and procedures for employees to report positive results from antibody testing, and while an employee who has tested positive for SARS-CoV-2 antibodies may return to work, employers are not required to allow an employee who has received such a test to return.

In addition, the emergency workplace standard prohibits employers from:

  • Discriminating against or discharging an employee because that employee voluntarily provides and wears their own personal protective equipment, if such equipment is not provided by the employer, as long as that equipment does not create an increased hazard for the employee or other employees.
  • Discriminating against or discharging an employee who has raised a reasonable concern about SARS-CoV-2/COVID-19 infection control to the employer, the employer’s agent, other employees, or a government agency, or to the public through print, online, social, or any other media.

These workplace safety standards are set to go into effect on July 15, 2020, and employers could be fined up to $13,000 for failing to comply.

The United States Department of Labor Occupational Safety and Health Administration (OSHA) has issued guidance to employers to protect workers but has not adopted a binding rule. OSHA provided guidance to employers on preventing worker exposure to SARS-CoV-2/COVID-19 in March 2020, and in June 2020 it released guidance on returning to work. The guidance on returning to work states that employers should continue to be flexible and allow employees to work remotely when possible, use alternative business operations such as curbside pickup to serve customers if feasible, implement strategies for basic hygiene and disinfection at work, encourage social distancing, apply procedures for identification and isolation of sick employees, and provide employee training on the various phases of reopening and necessary precautions. Further, employers should not retaliate against employees for adhering to OSHA’s safety guidelines or raising workplace health and safety concerns. Though these guidelines are not binding, employers are bound by the General Duty Clause of the Occupational Safety and Health Act of 1970, which requires that they provide a safe workplace free from serious hazards.

Virginia’s recently-enacted whistleblower protection law, which became effective July 1, 2020, will protect workers that disclose violations of the emergency workplace standard. In particular, the new Virginia whistleblower protection law provides a private right of action for an employee who suffers retaliation for “in good faith report[ing] a violation of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official.” Va. Code § 40.1-27.3(A)(1).

The statute proscribes a broad range of retaliatory acts, including discharging, disciplining, threatening, discriminating against, or penalizing an employee or taking other retaliatory action regarding an employee’s compensation, terms, conditions, location, or privileges of employment because of the employee’s protected conduct. Id. at § 40.1-27.3(A).

A prevailing whistleblower under Virginia’s whistleblower protection law can obtain various remedies, including:

  • An injunction to restrain a continuing violation;
  • Reinstatement to the same or an equivalent position held before the employer took the retaliatory action; and/or
  • Compensation for lost wages, benefits, and other remuneration, together with interest, as well as reasonable attorneys’ fees and costs. at § 40.1-27.3(C).

© 2020 Zuckerman Law

For more anti-retaliation legislation, see the National Law Review Labor & Employment law section.

There’s a Fake News Pandemic. Could COVID-19 and Trademarks be the Cure?

As political divides widen, accusations of differing viewpoints being “fake news” have become almost commonplace.  But during the COVID-19 pandemic, fake news has taken a more dangerous and sometimes deadly turn.

Fake news stories with fabricated COVID-19 data, sensational origin stories (it was NOT predicted by Nostradamus or created in a lab in China as a biological weapon), and baseless advice on how to protect against the illness are spreading almost as fast as the virus itself.

Fake news around COVID-19 has been directly linked to higher rates of infection, a rise in hate crimes and discrimination, increased anxiety, and further economic devastation, all of which exacerbate the current pandemic.  Even more troubling, information learned from fake news is more persistent and longer-lasting in a reader’s mind than genuine news sources because of its often sensational nature.

Fake news is a pandemic, and thus far, there is no cure.

Fake News: A brief history

Fake news is defined as “fabricated information that mimics news media content in form but not in organizational process or intent.” Although real news outlets may sometimes print opinion pieces that are more conjecture than fact, or even occasionally erroneously report particular facts amounting to poor reporting, their intent is to report noteworthy information, especially about recent or important events. Fake news, on the other hand, disguises itself as real news in an attempt to “cloak itself in legitimacy and to be easily shareable on social media” without any genuine intent to inform the public or attempt to be truthful.  Rather, it is intended to get clicks (e.g., readers) so as to increase advertisement sales.

Fake news isn’t new.  Its roots can be traced back to at least as early as the sixth century A.D.40 when Procopius, a Byzantine historian, disseminated false information, “known as Anecdota [to] smear the reputation of the Emperor Justinian.” Social media and online advertisement sales, however, have turned it into a seemingly unstoppable beast.

With social media, it is easier than ever to rapidly spread information without verification of the contents or source. Approximately seven-in-ten Americans (of all ages) currently use social media to connect with others and engage with news content, and approximately 43% of adults get their news from Facebook.

With the mere click of a button, a completely fabricated story can be instantly shared with hundreds of people, who in turn can share the story with hundreds more, and so on and so on.  The more click-baitey (i.e., catchy) the title, the quicker the story spreads and the more advertising money the author generates.

Unfortunately, in today’s climate, sensationalism is often more rewarding than the truth.

Legal Avenues are Ineffective to Combat Fake News

Fake news generally takes one of three forms:

  • Type 1-Spoofing: A content provider spoofs a legitimate news source to confuse consumers as to the source of the information (e.g., a fake FORBES Webpage circulating fake articles);

  • Type 2-Poaching: A content provider creates a publication that is intentionally confusingly similar to a recognized news source (e.g., registration of washingtonpost.com.co with a home page that mimics the WASHINTON POST) so as to poach consumers intending to visit a legitimate news source; or

  • Type 3-Original Sensationalism: A content provider creates an original publication under which to provide content, but relies on the sensational nature of the publication to disseminate the content via social media platforms.

Spoofing and poaching, as described above, typically violate several trademark laws.  The creation of a Webpage that spoofs a legitimate news outlet or appears confusingly similar to the news outlet’s brand is likely direct infringement of the news outlet’s trademarks.  Similar arguments could be made under the Lanham Act’s unfair competition and dilution frameworks (if a mark is famous enough to be spoofed, it is likely famous enough to be diluted).  Fair use defenses would also likely be unsuccessful (fair use for parody and satire does not apply where the intent is not to parody or satirize, but rather merely to confuse the relevant public and profit off of the goodwill of the mark).

Website owners, however, can sometimes be difficult to identify (they are often in foreign countries) and new sites can be created faster than infringing sites can be identified and shut down.  News outlets can thus wind up incurring large legal fees to shut down infringing sites in a proverbial game of whack-a-mole with little to no chance of recouping their costs from the bad actors themselves who live to infringe another day.

Several spoofing and poaching Websites owned by Disinformedia, a Web-based fake news content provider, have been shut down (see washingtonpost.com.co, nationalreport.net, and usatoday.com.co) as infringing the trademarks of major news outlets, but fake news is still on the rise.  This is because original sensationalism (type 3 above) is the most common form of fake news and it is nearly impossible to halt through legal action.

Fake news content providers have long relied upon free speech protections.  As long as fake news sources do not pretend to be other news outlets or to confuse readers as to the source of their content (i.e., spoofing and poaching), there is little that the legal system can do to stop the spread of information they may publish, no matter how false.  In very exceptional cases of falsehood, defamation suits may succeed, but these are rarely raised and even harder to prove.

Although legal avenues may not be effective at halting the spread of fake news, trademarks may still ultimately hold the key to stopping the fake news pandemic.

How Fake News is Hurting Facebook’s Brand

Social media platform owners have long held that social networks should not be the arbiters of speech. Mark Zuckerberg, CEO of Facebook, has repeatedly argued that Facebook and similar social media platforms were designed to give everyone a voice and bring them together and that to curtail such speech, no matter how false or offensive, would be to stifle free speech.

This has been a hard line for Mr. Zuckerberg and other social media giants like him.  Even after evidence came to light that foreign powers weaponized fake news to affect the 2016 election, Facebook’s official position on this point did not shift.

However, after months of Facebook failing to remove fake news stories surrounding COVID-19 from its platform, nonprofit groups began to label Facebook an “epicenter of coronavirus misinformation” and advertisers began to boycott the social media platform until it reformed its stance on known fake news stories.

Facebook soon released an official statement that it would finally be taking steps to “connect people to accurate information from health experts and keep harmful misinformation about COVID-19 from spreading”.  During the month of April alone, Facebook placed fake news warning labels on about 50 million pieces of content related to COVID-19 and redirected over “2 billion people to resources from the WHO and other health authorities” via an integrated COVID-19 information box and pop-up warnings notifying users that they had engaged with a fake news article relating to COVID-19.

Facebook’s response to COVID-19 misinformation has proven that it can prevent the spread of fake news without sacrificing its commitment to free speech.  If free speech is no longer an impediment to stopping misinformation, then it is time for Facebook to address the prevalence of fake news on its platform.

Seven-in-ten Americans use Facebook, yet over 60 percent of all Americans now believe the news that they see on social media is fake.  Fake news is ultimately hurting its brand.

As Harvard Business School professor David Yoffie explains, social media platforms such as Facebook have developed goodwill (i.e., trust) in their brands over time.  That goodwill is borrowed by every shared news story, whether real or fake.  When Facebook users see articles generated from an unknown source, they believe the article is factual because it is shared by real people on Facebook and subconsciously or consciously assume that Facebook approves the content.

If the majority of Facebook users now believe that the news they see on social media is fake, then they have lost trust in Facebook itself, thus diluting Facebook’s brand.  As fake news continues to dilute the Facebook brand and associated trademarks, Facebook is at risk of further losing goodwill, users, and, perhaps most importantly to Facebook, advertising dollars.

Few would argue that Facebook has an altruistic interest in the spread of fake news on its platform, but the Facebook brand will continue to be diluted if it does nothing to stop the spread of fake news.  Facebook has taken the first steps to identify and target fake news on its platform brand as it relates to COVID-19, but only time will tell if Facebook will expand these measures to apply to other types of fake news stories.

It took COVID-19 to force Facebook to take steps to protect its trademark (i.e., brand) and confront fake news.  Perhaps it takes a pandemic to face a pandemic.

Copyright 2020 Summa PLLC All Rights Reserved

For more on COVID-19 see the National Law Review Coronavirus News page.

Accounting and Auditing Enforcement Activity Declines Slightly in 2019

Los Angeles—The U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) publicly disclosed a combined 81 accounting and auditing enforcement actions during 2019, down slightly from the previous year, according to a Cornerstone Research report released today. Monetary settlements totaled approximately $628 million, $626 million of which was imposed by the SEC.

Cornerstone Research’s report, Accounting and Auditing Enforcement Activity—2019 Review and Analysis, examines publicly disclosed SEC and PCAOB enforcement actions that involve accounting and auditing. The most common allegations in 2019 SEC actions involved financial reporting issues, with revenue recognition violations comprising the largest share. The percentage of PCAOB actions involving revenue recognition increased in 2019.

The SEC and PCAOB have highlighted revenue recognition as one of the areas that may present challenges as a result of the economic impact of COVID-19.

Enforcement actions involving announcements of restatements or internal control weaknesses increased by 65%. The percentage of 2019 SEC actions involving announced restatements and/or material weaknesses in internal controls (42%) was nearly double the 2018 percentage (23%).

Highlights

  • In 2019, the SEC initiated 57 enforcement actions involving accounting and auditing allegations, an 11% decline from the 64 actions in 2018, but near the 2014–2018 average. The SEC brought only 5% of accounting and auditing actions as civil actions, the lowest percentage since 2016.

  • The PCAOB publicly disclosed 24 auditing-related enforcement actions in 2019, up 26% compared to 2018, the year in which the PCAOB disclosed its lowest number of actions since 2014.

  • The percentage of SEC and PCAOB actions involving non-U.S. respondents declined, but remained above the 2014–2018 average.

  • At 115, the total number of respondents in 2019 SEC and PCAOB actions was 23% below the 2014–2018 average.

  • The SEC and PCAOB imposed monetary penalties against 84% of firms and 63% of individual respondents. The median penalty the SEC imposed on firms in 2019 was $4.1 million, nearly three times greater than the 2018 median.

 Read Accounting and Auditing Enforcement Activity—2019 Review and Analysis.

Copyright ©2020 Cornerstone Research

For more SEC enforcement actions see the National Law Review Securities Law & SEC news section.

COVID Quarantine + Surge in eCommerce = … ADA Discrimination Claims?!

While much about COVID-19 and its long-term impact on businesses and the economy is unknown, its effect of a worldwide increase in a reliance on digital means to engage in business transactions is undeniable and unlikely to decrease as we move forward.

This means all organizations – commercial businesses, nonprofits, educational institutions, healthcare entities, and professional organizations – need to consider whether this new reliance on digital means of consumer interactions creates previously unconsidered risks and liabilities to their operations.

What?! – Website Discrimination Regulations?

The Americans with Disabilities Act (ADA), which was enacted to prevent discrimination against people with disabilities in locations generally open to the public, applies to websites and other digital communication means, such as mobile sites and mobile applications.

Organizations, institutions, businesses, and other establishments with websites, mobile sites, and mobile applications that are subject to the ADA must provide accommodations to people with disabilities so that they can have the same level of access to the online digital content and services as everyone else.

Which Businesses are Subject to ADA?

Organizations, institutions, businesses, and other establishments that have either (i) 15 or more employees (Title I Employers) or (ii) offer public accommodations (regardless of the number of employees) to consumers (Title III Public Accommodations) must maintain ADA compliant websites (traditional and mobile) and mobile applications.

Many businesses with more than 15 employees are aware of the requirement to be ADA compliant in its spaces of brick and mortar public accommodations, but are unaware of the requirement and risk of not having an ADA compliant digital presence.  If an organization has more than 15 employees (public accommodations offered or not), it must have an ADA compliant website.

It is Title III – Public Accommodations – that often ensnares smaller businesses such as healthcare providers, law offices, and small or start-up businesses that have fewer than 15 employees and do not offer the traditional public accommodations (such as retail space) yet have other public accommodations such as offices or conference meeting areas.  If an organization maintains a public accommodation for its patrons (regardless of the number of employees), it must have an ADA compliant website.

What Does Compliance Require?

There is no legislation that directly sets out the technical requirements of website accessibility.  There are, however, the WCAG private industry standards, developed by technology and accessibility experts, which have been widely adopted, including by federal agencies. The current guidelines are the WCAG 2.1 Guidelines, and it contains three levels of accessibility –A, AA, and AAA accessibility.  Federal websites are required to meet level AA accessibility.

There are four Principles to WCAG accessibility for those with disabilities (e.g., hearing impairment, seeing impairment, cognitive impairment, mobility issues, etc.):

  1. Perceivable: Information and user interface components must be presented in a way that allows a user to perceive the content (e.g., recognize photos).

  2. Operable: User interface components and navigation must be operable (e.g., dropdowns identifiable).

  3. Understandable: Information and the operation of the user interface must be understandable (e.g., form completion).

  4. Robust: Content must be robust enough that it can be interpreted by a variety of user agents (e.g., assistive technologies)

It is worth noting that it is not the use or inclusion of specific technologies, such as those that amplify words or offer audible versions of content, which is required for compliance.  The requirement for compliance is that businesses offer websites and other digital platforms that are robust enough to provide equally perceivable, operable, and understandable access to all consumers through the consumer’s use of these technologies (i.e., digital platforms that will interact with these specific technologies as provided and used by the consumer).

Is Compliance Enforced?

ADA website compliance litigation is a regular occurrence and is expected to rise as all consumers become more and more reliant on websites and mobile applications to conduct business.  These cases of enforcement span a number of industries – Real Estate (Zillow), Retail (Banana Republic), Entertainers (Beyoncé), and Restaurants (Domino’s Pizza) to name a few recognizable, well-defended defendants – and many resulted in federal fines and compulsory ADA compliance.

Most recently, a case against Domino’s Pizza made clear:

  • ADA applies to websites and mobile applications as public accommodations.
  • Businesses have been “on notice” since 1996 that their websites must be in ADA compliance and effectively communicate with people with disabilities.
  • The lack of specific requirements does not absolve a business from its obligations.

What are the Best Ways to Mitigate Risk?

When building a website, or assessing an existing one for compliance, use the WCAG 2.1 Guidelines and its four principles.  Many marketing professionals and website hosting platforms can provide templates that will assist with ADA compliance.  There are also companies that specialize in accessibility compliance that can review and test the website, mobile site, and application.  Businesses should regularly assess their website for compliance as it is updated, and content and features are added.

© 2020 Ward and Smith, P.A.. All Rights Reserved.

For more on website ADA compliance, see the National Law Review Communications, Media & Internet law section.