What’s in Your Packaging? Prop 65 Applies to PVDC

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Can your product wrap subject you to Proposition 65 warning requirements?  You bet.  California has added vinylidene chloride to its long list of chemicals to which Proposition 65 applies, effective on December 29, 2017.  The Office of Environmental Health Hazard Assessment (OEHHA) has not established a safe harbor level for vinylidene chloride, although that remains under consideration.

Vinylidene chloride is used in the production of polyvinylidene chloride (PVDC) copolymers. PVDC was developed by Dow Chemical Company, and was at one point used in the production of the popular food wrap product, Saran Wrap. PVDC has characteristics ideal for food packaging because it has low permeabiltiy to water vapor and gasses. While use of PVDC in Saran Wrap was later phased out due to cost and environmental concerns, other copolymers of vinylidene chloride are still commonly used in food packaging, including box overwrap, vertical form fill seal, horizontal form fill seal, and pre-made bags. Vinylidene chloride is also extensively used in a variety of other packing materials, as flame retardant coating for fiber and carpet backing and in piping, coating for steel pipes, and adhesive applications. Other common consumer products that may contain vinylidene chloride include cleaning cloths, filters, screens, tape, shower curtains, garden furniture, artificial turf, doll hair, stuffed animals, fabrics, fishnet, and shoe insoles.

Manufacturers, distributors and retailers are required to provide Prop 65 warnings to workers and consumers who are exposed to vinylidene chloride.  Companies have one year from the listing date to comply with Prop 65.  Companies that have not reformulated their products to remove vinylidene chloride, or that fail to provide a Proposition 65 warning on products containing it, by December 29, 2018 are at risk of receiving a “Notice of Violation” from private enforcers seeking to gain thousands of dollars in penalties and attorneys’ fees.  A Notice of Violation typically precedes a lawsuit for violation of Proposition 65.

The listing of vinylidene chloride as a chemical known to cause cancer by OEHHA is a reminder that not only product contents, but also packaging materials, are included within Prop 65 compliance requirements.  As we previously reported, since December 2014, products sold in California that contain diisononyl phthalate (DINP) have required a Proposition 65 warning.  DINP is found is many soft plastic and vinyl products, and purported violations have been found in seemingly innocuous packaging, such as gift bags for cosmetic products.

Conkle, Kremer & Engel has many years of experience advising clients with respect to Proposition 65 and other regulatory compliance issues. CK&E attorneys help clients stay out of legal crosshairs by working with them to ensure their products continue to meet all legal requirements, and helping them plan for foreseeable changes in the law.

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Can Employers Ask, “So, What Did You Make?”

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A new law in California is squarely aimed at reducing historical wage disparity, particularly between male and female employees.  On January 1, 2018, a new law will take effect in California to prohibit employers from seeking “salary history information, including compensation and benefits, about an applicant for employment.”  The new law, Section 432.3 of the Labor Code, also requires employers to provide the pay scale of the position to the applicant upon reasonable request.

But even under this new law, employers can still access salary history information under certain circumstances.  Employers may review salary history information that is publicly available under federal or state law, including information that is obtainable under the California Public Records Act or the federal Freedom of Information Act.  Employers may also consider and rely on salary history information in determining the salary for that applicant, if the “applicant voluntarily and without prompting discloses salary history information to a prospective employer….”  But, even when employers can rely on voluntarily disclosed salary information to set a particular salary, job applicants are still protected by California’s Equal Pay Act.  Any prior salary information about the applicant still cannot be used as the sole justification for “any disparity in compensation” for employees of different sexes, races, or ethnicities for “substantially similar work.”

It seems likely there will be a challenge to the constitutionality of the new restriction, most likely on free speech grounds.  Other states and municipalities have passed similar laws restricting employers from inquiring about salary history.  Philadelphia has a similar ordinance passed earlier this year to prohibit employers from asking an applicant about prior salaries and from relying on salary information unless that information was voluntarily disclosed by the applicant.  The Chamber of Commerce for Greater Philadelphia filed a lawsuit, challenging the ordinance on several grounds, including “chilling” the protected speech of employers under the First Amendment, and violating the Due Process Clause of the Fourteenth Amendment because of the severe penalties employers risk incurring.  While this case is still pending, the Chamber of Commerce raises questions of constitutionality that could apply as well to California’s new law.

Employment laws change constantly at federal, state and local levels.  In preparation for the new year, employers should review the documents they use in the hiring process, including job applications and new hire documents, and remove questions pertaining to salary history.  Employers should also instruct any employees who may be interviewing applicants not to ask about an applicant’s salary history.  And, for each open position, employers should ensure pay scales are readily available to disclose in response to an applicant’s request.

Conkle, Kremer & Engel attorneys are experienced at helping employers navigate the shifting maze of laws and regulations they face, and resolving employment issues as they arise.

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Counterfeits Can Take the Joy Out of the Holidays

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As the holiday shopping season reaches peak fervor and consumers seek out the best deals available on hot products, gift-givers are more at risk of purchasing counterfeit products of all kinds.  Recently, news articles have warned of counterfeit Fingerlings – the latest “it” toy – along with fake versions of popular electronics, clothing, personal care products, and many other types of goods.  Government bureaus like the U.S. Customs and Border Patrol regularly release holiday bulletins advising of the escalating volume of phony products entering the United States (for example, https://www.ice.gov/news/releases/buyer-beware-counterfeit-goods-and-holiday-shopping-season).  Counterfeits are far from harmless.  Not only are these counterfeit goods generally inferior to authentic products in both quality and safety, fake products are fraud, theft, and infringements of valuable trademarks and other intellectual property.  Sales of counterfeit products can even be criminal.

As a consumer, what can you do to help ensure you’re receiving the genuine article?  The most obvious method is to avoid unfamiliar sources and to buy directly from the manufacturer’s website or from an authorized retailer whenever possible.  If buying on websites like Amazon and eBay (where products are often actually sold by unrelated third parties), it helps to make sure that the seller of the product is the manufacturer or Amazon itself, not an unknown third party.  Often times, third party sellers do not have the ability or desire to properly perform checks on the goods they are selling, and in many cases the third party sellers never actually possess the products – when they receive your order they simply forward the product from a warehouse they have never even seen.  While outlets like Amazon and eBay have some anti-counterfeiting policies and procedures, experience has shown that not every fake product will be screened out.  Consumers should also check the price of the goods to ensure that it is not abnormally low, and examine the packaging and presentation of the product as depicted on the website to help determine whether the product might be fake or foreign-labeled goods.  Compare the look of the product offered with the same product on the manufacturer’s website – if it’s different, that’s a red flag.  Consumers should also not hesitate to contact the manufacturer if they suspect that they have received counterfeit or foreign-labeled goods – in addition to being the primary victims, consumers are often the first line of defense in the fight against counterfeiting.

As a manufacturer or trademark owner, what can you do when you discover your products being sold in an unauthorized channel, with risk of counterfeiting?  Conkle, Kremer & Engel has extensive experience helping manufacturers and distributors to investigate and, when necessary, litigate counterfeit and other trademark- and intellectual property-infringement claims.  CK&E attorneys are well-versed in the careful initial steps that should promptly be taken when sales of illicit products are suspected.  If the seller is cooperative, litigation can often be avoided.  But if the seller is not, that is a strong indicator that the seller has been selling, and will continue to sell, infringing products unless stopped through litigation.  Whatever you choose to do, consult experienced counsel and decide on your course of action promptly – unreasonable delays can seriously harm your ability to protect your rights.

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Sunscreen Ingredient Restrictions in Maui, Hawaii?

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Sunscreen manufacturers and distributors should take note:  Maui County in the state of Hawaii could become the first county in the United States to ban the sale and use of sunscreen products containing oxybenzone and octinoxate, two active ingredients approved by the U.S. Food and Drug Administration (FDA) for use in sunscreens.

In November, a Maui Hawaii County Council committee introduced and recommended for approval a bill for an ordinance that would prohibit the sale and use of sunscreen containing the ingredients oxybenzone and octinoxate. These ingredients are commonly used in commercial chemical sunscreens as protection against ultraviolet (UV) light radiation.  The county-level move came after Senate Bill 1150 – introduced in 2017 by Hawaii Senator Will Espero to ban the use and application of sunscreens containing oxybenzone throughout the state of Hawaii – stalled at the end of the legislative session.

The FDA currently approves of only 16 active ingredients for use in over-the-counter (OTC) sunscreens, generally recognizing them as safe and effective.  Among the ingredients are oxybenzone and octinoxate, which are commonly found in commercial sunscreen products, including from major sunscreen brands such as L’Oreal, Neutrogena and Supergoop.  The European Union already imposes strict limits on the use of oxybenzone in sunscreen products as well as warning requirements.

The Maui County proposal was prompted by environmental concerns and intended to promote the health and welfare of Maui’s coral reefs and marine life. The bill’s supporters claim that oxybenzone and octinoxate have a significant impact on the marine environment, noting that both ingredients have been detected in the ocean surrounding Maui at levels that well exceed the toxicity range for coral reefs.  Opponents of the ban, on the other hand, contend that the ingredients are safe for use, as they have been approved for use by the FDA.

The proposal to ban sunscreen products containing oxybenzone and oxtinoxate, other than prescription products, is now before the full Maui County Council. If approved, manufacturers, retailers and distributors of sunscreen products containing oxybenzone and oxtinoxate would have a year to ensure that their products no longer contain the banned ingredients. Businesses or persons found in violation of the law would be subject to civil penalties and administrative enforcement procedures. As of now, the bill does not contain a private right of action to allow consumers to bring actions for violations.  If passed, Maui’s outright ban could still face enforcement and legal challenges – including state preemption and federal Commerce Clause challenges.

While this is a unique development, local efforts to protect against health and environmental concerns are nothing new, but they do not always remain confined to their original purpose.  For example, California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65, was originally passed to protect the state’s drinking water sources from being contaminated with chemicals known to cause cancer or reproductive harm.  However, Proposition 65 does not act to ban the use of any chemicals; instead, it imposes warning requirements prior to consumer exposure to certain chemicals known to the state to cause cancer or reproductive harm.  The 2012 listing of benzophenone to the state’s list of regulated chemicals has already caused many sunscreen manufacturers using octocrylene, another FDA-approved active ingredient that may contain small amounts of benzophenone, to reformulate or use a more purified form of the ingredient.

Conkle, Kremer & Engel has many years of experience representing clients in the beauty and skin care industry address challenging regulatory compliance issues.  CK&E attorneys help clients stay out of legal crosshairs by working with them to ensure their products continue to meet all legal requirements, and helping them plan for foreseeable changes in the law.

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WARNING: Are Your Products and Websites Ready for the New Prop 65 Requirements?

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California’s Office of Health Hazard Assessment (OEHHA) has issued new Proposition 65 Warning Regulations that will go into effect on August 30, 2018. It is important for companies to understand the changed regulations and be proactive in adapting their product labels and even internet marketing to adapt to the new regulations.  The coming changes have introduced a variety of new concepts, imposing additional burdens on businesses selling their products in California, and making it easier for plaintiff Prop 65 attorneys and groups to bring costly private enforcement actions.

The OEHHA has made significant changes to the safe-harbor language requirements that govern the language, text, and format of such warnings. The new regulations introduce the concept of a “warning symbol,” which must be used on consumer products, though not on food products. The “warning symbol” must be printed in a size no smaller than the height of the word “WARNING,” and should be in black and yellow, but can be in black and white if the sign, label, or shelf tag for the product is not printed using the color yellow.

Warnings must now also specifically state at least one listed chemical found in the product and include a link to OEHHA’s new website www.P65Warnings.ca.gov.  These are examples of the new format for more specific warnings:

  • For exposure to carcinogens: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to both carcinogens and reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more listed chemicals], which is [are] known to the State of California to cause cancer, and [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”

Certain special categories of products, such as food and alcoholic beverages, have a specialized URL that must be used. For example, warnings on food products must display the URL www.P65Warnings.ca.gov/food.

Recognizing that many consumer products have limited space “on-product” to fit the long-form warnings, the OEHHA has enacted new regulations allowing abbreviated “on-product” warnings. This short warning is permissible only if printed on the immediate container, box or wrapper of the consumer product. An example of the required format for the abbreviated warnings is:

  • WARNING: Cancer and Reproductive Harm – www.P65Warnings.ca.gov

The new regulations also specifically address internet sales for the first time. Warnings must be provided with a clearly marked hyperlink on the product display page, or otherwise prominently displayed to the purchaser before completion of the transaction.  It will not be sufficient if the product sold on the internet bears the required label, but the internet point of purchase listing does not.

The particular requirements for each specific product can vary, so manufacturers and resellers are well-advised to seek qualified counsel to review their situation before committing to potentially costly label and website changes that may not comply with the new requirements.  Conkle, Kremer & Engel attorneys stay up to date on important regulatory developments affecting their clients in the manufacturing and resale industries, and are ready to help clients navigate the changing regulatory landscape in California and elsewhere.

Although the new regulations take effect August 30, 2018, and the new warning labels are required for products manufactured after that date, companies can begin using the changed labels now. It is definitely not advisable to wait until August 2018 to begin making the required changes.

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Relationships Between Producers, Wholesalers, and Retailers: Beer Distribution and Franchise Laws in California (Part 2)

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In a recent blog post, we discussed beer self-distribution rules in California.  While the self-distribution laws in California are generally quite accommodating, and self-distribution works for a start-up craft brewery with limited funds, on a practical level it can only serve a relatively small geographical area.  As a brand increases in local popularity and the beer producer wants to expand its footprint and accelerate its competition with brands and beers outside its home region, usually the producer will choose to enter into a distribution agreement with an established third-party wholesaler.  When a beer producer chooses to contract with a distributor, then it is important to be aware of the applicable beer franchise laws (which also vary from state to state).  Beer franchise laws control the relationship between the brewer and the wholesaler and will generally trump contract terms that do not comport with such laws.

Beer franchise laws stem from a decades-old period when relatively few national-level breweries (like Budweiser and Miller) were able to exert significant power over the beer distribution industry, which at the time was chiefly comprised of numerous small mom-and-pop outlets.  As an example, the macrobreweries would impose stringent requirements for their distributors that necessitated significant investment (such as construction and maintenance of a sophisticated refrigerated warehouse), but there was nothing to protect the distributor when the macrobreweries decided to switch to a competitor, leaving the distributors with little recourse to recoup their investment.  To protect the distributors from this predicament, strong state franchise laws were enacted that made it difficult for the breweries to terminate contracts with distributors.

At their most draconian, beer franchise laws can marry a brewer to a distributor even if the brewer only sends a small initial amount of beer to the distributor for resale without any written agreement whatsoever.  In some cases distributors can even have the power to transfer the distribution rights to successors-in-interest without the brewer’s consent.  In many states, a brewer can only cancel a distribution contract for “good cause,” which may not include failure to reach sales quotas.  Further, many states require a brewer, in order to break a distribution contract, to pay the wholesaler Fair Market Value (“FMV”) for the lost business.  Of course, these rules have shifted a significant share of power to the distributors.

As the franchise laws weren’t enacted with the microbrewing phenomenon in mind, they can make distribution difficult for craft brewers that don’t have the clout of a national macrobrew and who don’t impose stringent requirements on their distributors.  In certain situations, a small brand may feel that a distributor is paying attention to other more established brands and that it is not getting the benefit of its bargain with the distributor.  However, many beer franchise laws have been softened over the past several years, allowing for more competition in the wholesale market and giving fledgling breweries more choice and control over the terms of their third-party distribution.  For example, some states exempt breweries that produce less than certain annual volumes from the franchise laws.  Of course, exemptions like this mean that brewers need to be conscious of their plans to grow and potentially exceed those volume limitations, and consider how it will affect their distribution agreements.

California’s beer franchise laws are some of the most accommodating in the country, because California allows the distribution agreement itself to control most of the important terms and dealings between the brewer and the wholesaler.  In California, a brewer must enter into exclusive written territorial agreements with distributors that are filed with the ABC (Cal. Bus. & Prof. Code § 25000.5).  California’s franchise laws do not restrict brewers to only “good cause” terminations (though the distributors themselves may very well fight for some type of good-cause requirement in contract negotiations).  Further, a brewer can terminate a distribution agreement if the wholesaler fails to meet a “commercially reasonable” sales goal or quota (Cal. Bus. & Prof. Code § 25000.7), and many beer distribution agreements call for the distributor itself to come up with an annual business plan that establishes sales goals based on certain data.  Except in certain situations, a brewer does not need to pay FMV to terminate the relationship (though again, a distributor may insist on a termination payment as a contract term).  While a brewer is not automatically bound by contract to a purchaser or transferee of its distributor, the brewer cannot unreasonably withhold consent or deny approval of such a transfer without incurring certain charges (Cal. Bus. & Prof. Code § 25000.9).

In California, the parties must be attuned to several important issues in creating the agreement, such as territory, term, change in ownership and transfer rights, termination rights, terms of sale, commercially reasonable sales goals, post-termination provisions, intellectual property licensing and advertising issues, dispute resolution, and other rights and duties of the parties.  Such contract terms are just as important for a brewer as finding a distribution team that is the right “fit” for a growing brand.

Overall, it is no surprise that the states with the most friendly self-distribution and franchise laws are the states with the most active and diverse beer business communities.  For example, California now has around 900 active breweries, far more than any other state, adding over 500 breweries in the last two years alone.

Conkle, Kremer & Engel has experience representing both breweries and distributors.  If you are launching a brewery in California, looking to expand your brand’s sales through self-distribution or with a third-party distributor, or have found yourself in a distribution-related dispute, contact Conkle, Kremer & Engel for assistance with those and other beer industry-related issues.

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California Employers’ Risks of PAGA Exposure

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If you’re a California employer, you may have heard people refer to “PAGA” and wondered what it’s all about.  PAGA is a legal device that employees can use to address Labor Code violations in a novel way, in which employee representatives are allowed to act as if they are government enforcement agents.

The California Labor and Workforce Development Agency (CLWDA) has authority to collect civil penalties against employers for Labor Code violations.  Seems simple enough.  But in an effort to relieve an agency with limited resources of the nearly impossible task of pursuing every possible Labor Code violation committed by employers, the California legislature passed the Private Attorney General Act of 2004 (“PAGA”).  PAGA grants aggrieved employees the right to bring a civil action and pursue civil penalties against their employers for Labor Code violations, acting on behalf of the State of California as if they were the CLWDA.  If the aggrieved employees prevail against the employer, the employees can collect 25% of the fines that the state of California would have collected if it had brought the action.

Penalties available for Labor Code violations can be steep – for some violations, the state of California can recover fines of $100 for an initial violation to $200 for subsequent violations, per aggrieved employee, per pay period.  These penalties can add up to serious money, especially if the aggrieved employee was with the company for some time.  But what makes PAGA particularly dangerous for employers is the ability of employees to bring a representative action (similar to a class action), in which they can pursue these penalties for violations of the Labor Code on behalf of not only themselves, but also all others similarly situated.  Under this scheme, an aggrieved employee can bring an action to pursue penalties on behalf of an entire class of current and former employees, thereby multiplying the penalties for which an employer can be on the hook and ballooning the risk of exposure.  That risk is further amplified because PAGA also permits plaintiff employment attorneys to recover their fees if their claim is successful.

There is an upward trend in use of PAGA against California employers.  A July 2017 California Supreme Court decision, Williams v. Superior Court, exacerbated the problem for employers:  The California Supreme Court decided that plaintiff employment attorneys can obtain from employer defendants the names and contact information of potentially affected current and former employees throughout the entire state of California.  This means the PAGA plaintiffs can initiate an action and then pursue discovery of all possible affected employees and former employees throughout California, which can greatly expand the pool of potential claimants and ratchet up the exposure risk for employers.

Employers in California need to be attuned to Labor Code requirements and careful in their manner of dealing with employees, so that they avoid exposure to PAGA liability to the extent possible.  Conkle, Kremer & Engel attorneys are familiar with the latest developments in employment liability and able to assist employers avoid trouble before it starts, or respond and defend themselves if problems have arisen.

 

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Producer, Wholesaler and Retailer Relationships: Beer Distribution and Franchise Laws in California (Part 1)

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For breweries and beer suppliers of any size, distribution is a significant issue, from the initial determination of whether to self-distribute or obtain third-party distribution to the decision to terminate a wholesaler.  As the beer industry is one of the most highly regulated in the United States and the laws on distribution procedures vary from state to state, there are many details and pitfalls that all parties engaged in beer distribution should be aware of when contemplating and doing business.  Two such sets of laws relate to self-distribution and what are called beer franchise laws (somewhat similar to but generally distinct from laws for franchises like McDonald’s restaurants or 7-Eleven convenience stores).  This blog entry will address the basics of brewery self-distribution in California, while a following entry will address California beer franchise laws.  (Future entries will discuss such issues in other jurisdictions and inter-jurisdictional issues.)

First, any discussion of beer distribution in the United States must begin with the repeal of prohibition and the states’ implementation of the “three-tier” system, which was discussed in a previous post.  The three-tier system generally requires beer producers to sell to wholesalers who in turn sell to retailers (comprised of both on-sale establishments like pubs and off-sale establishments like bottle shops).  The chief purpose of this layered approach is to limit beer producers’ control over and promotion of the retail sale of their products.  While this structure has its roots in the temperance movement, the three-tier system has had the effect in recent decades of allowing smaller craft breweries to flourish due to its inherent checks on monopolization.  However, as the number of beer brands proliferates, wholesalers and retailers cannot realistically be expected to carry all such brands, and self-distribution for many brands is the only effective way to bring product to market.

Fortunately, within the three-tier system, the states are permitted their own sets of rules.  While many states require the manufacturer, the wholesale, and the retailer to be completely independent of one another with no common ownership (and therefore permit no self-distribution), other states blur the three-tier system by allowing for retailers to buy beer directly from manufacturers, and some states allow for a beer manufacturer to own its own legally-distinct distribution company.  About half of states currently set an upper threshold on self-distribution (i.e. up to a certain annual barrel production level), with a smaller number allowing self-distribution regardless of capacity.

California is currently one of the more generous self-distribution states, allowing licensed California retailers to purchase alcoholic beverages for resale from licensed California beer wholesalers or manufacturers regardless of the production level.  (See, e.g., Cal. Bus. & Prof. Code §§ 23357, 23402, 23388.)  The California rules also permit the brewer (with the appropriate licenses and permits) to sell packaged beer from the brewery premises (including growler fills), to operate taprooms and brewpubs (with certain production requirements), and/or to sell at farmers markets (again, with several restrictions).  While these rules have their nuances, they allow breweries in California to establish their brand(s) and get their business off the ground without having to rely on third-party involvement.

Conkle, Kremer & Engel attorneys have experience representing both breweries and distributors.  If you are launching a brewery in California, looking to expand your brand’s sales through self-distribution or with a third-party distributor, or in a distribution-related dispute, contact Conkle, Kremer & Engel for assistance with those and other beer industry-related issues.

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Fire Your Employee for His Noxious Memo? Not So Fast.

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Is an employer free to fire an employee who circulates to co-employees a memo expressing ideas that are noxious to the employer’s efforts to avoid prohibited discrimination?  Perhaps surprisingly, the answer can be, “No.”

A good example is the recent event in which Google fired James Damore, an engineer, for circulating a memo, or “manifesto,” explaining a basis for gender bias among computer engineers.  His memo, entitled, “Google’s Ideological Echo Chamber – How bias clouds our thinking about diversity and inclusion,” purported to be a personal response to what he viewed as the shaming and silence of those in his field who have differing views about gender in the workplace, and whose views are inconsistent with Google’s “dominant ideology.”  In the memo, Damore provided what he called “biological” explanations for why there is a gender gap in technology, such as: women are more neurotic and thus tend to pick less stressful jobs; women are more “directed towards feelings and aesthetics rather than ideas;” and men have a higher drive for status.  Damore posted this screed to Google’s internal messaging board.  It was a message to his co-workers, and hostile to his employer’s position.

As Damore acknowledged, engineering at Google requires collaboration and teamwork.  Damore’s statement put Google’s management in a difficult place – how can Damore continue to work on any team that involves women? Further, Google’s employee review process emphasizes peer reviews, particularly by high-level engineers such as Damore.  Damore’s expressed biases could cause questions as to the fairness of his reviews, and his position as a supervisor could be argued to create a hostile work environment for the female minority with whom he works.  It is not surprising, then, that Google employees reacted by demanding Damore be disciplined or terminated.  Google agreed, and Damore was terminated.

But Damore seems to have anticipated that reaction, and took steps to protect his own interests.  As quoted by the New York Times, Damore included in his memo an unusually lawyerly statement:  “I have a legal right to express my concerns about the terms and conditions of my working environment and to bring up potentially illegal behavior, which is what my document does.”  After the termination, Damore submitted a complaint to the National Labor Relations Board (NLRB) claiming that Google’s upper management was “misrepresenting and shaming me in order to silence my complaints,” and reminding Google that it is “illegal to retaliate” against an NLRB charge.

Was Google’s action defensible?  The National Labor Relations Act Sections 7 & 8(a)(1) (29 U.S.C. Section 157 & 158(a)(1)) makes unlawful violating employees’ rights to engage in “protected concerted activities.” “Concerted activities” are broadly defined to include “the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection….” Most often, “concerted activities” are associated with union activity, but the NLRB protects activity that is not specifically union oriented.  This can include communicating with coworkers regarding wages and working conditions, and expressing preferences for political candidates who support favorable labor issues such as higher wages for hourly workers.  In doing so, employees are permitted to use company bulletin boards, both electronic and physical, and company email, on non-working time.

The effect of this protection is that, if Damore challenges his termination, he will likely argue that Google’s decision to terminate him curtailed his rights to discuss his political beliefs and to engage like-minded employees about his view that the hiring and promotions practices at Google are unfair to men.

Because Damore works in California, there are additional considerations under state law.  California Labor Code §1101 provides that “No employer shall make, adopt, or enforce any rule, regulation, or policy: (a) Forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office; or (b) Controlling or directing, or tending to control or direct the political activities or affiliations of employees.”  While this may not control an adverse employment decision by an employer against a single individual, once coworkers learn that an employee was fired based on his speech or political activities, those coworkers may perceive that action as a threat or policy.  As the Supreme Court has recognized, employees’ economic dependence on the employer can reasonably lead them to pick up even subtle signals when their jobs are at stake.  NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969).  Here, Damore’s like-minded coworkers could interpret his firing as a threat to their employment should they express views similar to his.

The unfortunate upshot for Google is that Damore’s termination seems like a retaliation claim ripe for filing.  Though many may personally disagree with Damore’s views on gender in the workplace, and he may have absolutely no factual or evidentiary basis for his position, he could argue in an action against Google that he was attempting to organize a group of like-minded workers to oppose what he believes are Google’s gender biases or an unfair reverse discrimination policy. His “manifesto” appears to structured for this very argument.

It is ironic that the policies of the NLRB and California Labor Code, which protect political organization and prohibit retaliation, are what may ultimately force Google to suffer legal liability for Damore’s termination for expressing disagreement with Google’s anti-discrimination policies.

As these events demonstrate, the application of employment law and policies in real world situations can be challenging.  Protection of one worthwhile policy can seemingly conflict with others, and well-meaning employers can find themselves having to make very difficult choices.  Employers should consult counsel experienced in the sometimes complex issues that can arise in many different employment circumstances.

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The Conkle Firm and Social Media Influencers at Beautycon LA 2017

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On August 13, 2017, Conkle, Kremer & Engel attorneys Amanda Washton, Desiree Ho, Aleen Tomassian, Heather Laird and paralegal Chelsea Clark attended Beautycon in Los Angeles, both to assist clients and to observe first-hand the latest trends in the beauty industry. In addition to the thousands of youthful fans and future beauty marketing gurus in attendance, more than 100 brands and over 70 “creators” were featured at the two-day festival.

An annual gathering, Beautycon serves as a space for beauty industry participants to interact with young fans. As the popular beauty ideal moves away from the conventional toward one that is more inclusive and identity based, with the help of a talented team of influencers Beautycon advocated for authenticity – a sentiment to which all attendees could relate.

Beautycon heavily emphasized the growing trend of using social media influencers and celebrity endorsements to connect with consumers.  In exchange for a prized “like” on Instagram, many vendors gifted product samples or even full product lines.  Beautycon exemplified the partnerships that are possible between beauty businesses and social media influencers.  There were plenty of celebrities, “exclusives” and photo-ready backdrops on hand for influencers’ selfies and videos.  There were a number of forward-thinking panels on social media topics, including using beauty-oriented social media platforms to deliver positive self-esteem and diversity messages.  Beautycon demonstrated that connecting brands with social media influencers is rapidly becoming vital to the success of emerging beauty businesses.

For businesses, working with social media influencers involves a host of practical and legal issues and considerations.  Areas of concern can include contracts, copyrights, trademarks, privacy, rights of publicity, false advertising claims, regulatory issues and even trade libel and defamation, among other issues.  With continually evolving social media platforms and issues, it is essential that cosmetics and personal care products companies fully consider the implications of both their social media activities and those of the influencers they seek to help them promote their brands.  CK&E attorneys are excited to participate in dynamic events like Beautycon to help their beauty industry clients meet their needs in the shifting landscape of social media.  (And as the photos show, it doesn’t hurt to partake in a little of the fun, either.)

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