Legal Stuff

Amazon makes even temporary warehouse workers sign 18-month non-competes

30 March 2015

From The Verge:

Amazon is the country’s largest and most sophisticated online retailer, but it still runs largely on manual labor. Scattered around the country are massive warehouses staffed by workers who spend their days picking objects off shelves and putting them in boxes. During the holiday season, the company calls on a huge reserve army of temporary laborers.

The work is repetitive and physically demanding and can pay several dollars above minimum wage, yet Amazon is requiring these workers — even seasonal ones — to sign strict and far-reaching noncompete agreements. The Amazon contract, obtained by The Verge, requires employees to promise that they will not work at any company where they “directly or indirectly” support any good or service that competes with those they helped support at Amazon, for a year and a half after their brief stints at Amazon end. Of course, the company’s warehouses are the beating heart of Amazon’s online shopping empire, the extraordinary breadth of which has earned it the title of “the Everything Store,” so Amazon appears to be requiring temp workers to foreswear a sizable portion of the global economy in exchange for a several-months-long hourly warehouse gig.

. . . .

“Employee recognizes that the restrictions in this section 4 may significantly limit Employee’s future flexibility in many ways,” the agreement asserts, referencing the section containing the noncompete agreement and three other clauses. “Employee further recognizes that the geographic areas for many of Amazon’s products and services — and, by extension, the geographic areas applicable to certain restrictions in this Section 4 — are extremely broad and in many cases worldwide.”

The contract — which was obtained through applying and being accepted to a seasonal Amazon warehouse position — even includes a provision that requires employees who sign it to “disclose and provide a true and correct copy of this Agreement to any prospective new employer […] BEFORE accepting employment[…]”

. . . .

It’s unclear whether Amazon has attempted to enforce its noncompete contracts with hourly warehouse workers, and Amazon did not respond when asked about this by The Verge. But the company does have a history of aggressively pursuing such cases against white collar workers. Last year, after a former Amazon marketing manager took a job at Google, Amazon leveled a suit against him that was said to test the limits of noncompete law. The willingness of courts to validate such agreements can vary dramatically across states. But regardless of whether courts are willing to enforce them, noncompetes can still affect workers’ behavior.

. . . .

Courts are often reluctant to enforce noncompete agreements that cover the entire United States, let alone the whole world, according to Garden, who notes that the standard of “reasonableness” is the main legal test of the agreements. Yet different states have far different ideas of what counts as reasonable. (In an apparent nod to this, the Amazon contract stipulates that the signer consents that “each and every covenant and restraint in this Agreement is reasonable.”) California law bans the enforcement of noncompetes. Oregon, North Dakota, and Colorado have also enacted strict limits on noncompetes. “Then there are states like Texas and Florida and a bunch of others that are on the other end of the spectrum,” says Lobel, “that think of it as a simple contract issue, and if you sign the contract and you breach it then, well, you’ve breached the contract, and they’ll enforce it, and they’ll give injunctions quite easily.”

Link to the rest at The Verge and thanks to Jan for the tip.

PG says the story sounds a little weird and you can count him as skeptical.

In the first place, while the laws vary from state to state, most courts considering noncompete agreements tend to apply a reasonableness test when asked to enforce them.

It’s difficult for PG to envision very many judges enforcing an 18 month noncompete agreement against a temporary warehouse worker. It’s also difficult to believe that courts would enforce a noncompete agreement prohibiting a former low-level hourly employee from working for a competitor within a large geographical area for a low level worker. As a matter of public policy, most state governments aren’t trying to prevent their residents from being gainfully employed.

In one case PG remembers, Amazon sued in Washington to enforce a non-compete against one of its vice-presidents in the Amazon cloud business who went to work for Google’s cloud business. If PG’s recollection is correct, the court hearing the case reduced the time for the non-compete from 18 months to 3 months. If the vice-president had continued to work during the litigation, the three months would have almost certainly expired before the court handed down its decision.

As mentioned, non-compete agreements are illegal in California except in very narrow circumstances. If Google had moved the VP to California and he sued Amazon in California, it is almost certain a California court would have voided the non-compete agreement and barred Amazon from enforcing it.

Additionally, there’s the practical question involved in Amazon ever discovering that one of its former warehouse employees has started working for a competitor. If you’re an Amazon vice-president that starts working for a competitor, your profile is high enough so Amazon is likely to hear about the new job. If you move from an Amazon warehouse to a Wal-Mart warehouse, the chances of being discovered are minuscule.

PG says that blanket noncompete agreements for all employees are a really dumb idea in part because gaining a reputation for suing its former employees hurts a company when it is recruiting high-quality talent. Amazon usually doesn’t do dumb things, but maybe their employment lawyers are an exception.

Author Solutions’ Deceptive Practices

28 March 2015

The law firm that previously had filed a class-action suit against Penguin Random House subsidiary, Author Solutions, has announced that it has just filed a second class-action suit.

From Giskan Solotaroff Anderson & Stewart:

Giskan Solotaroff Anderson & Stewart has filed a class action suit against Author Solutions, a major self-publishing house owned by Penguin Random House. Unlike every other traditional publisher, Author Solutions seeks to make money FROM authors not FOR them.

Author Solutions preys upon the dreams of authors by selling them expensive services that sound exciting but do not actually sell any books. Their defense: They aren’t being deceptive because they aren’t trying to sell books. Of course, for nearly 200,000 authors who have paid thousands (if not tens of thousands) of dollars to buy expensive services that promised to promote their books, Author Solutions’s indifference to book sales comes as more than a bit of a surprise.

. . . .

Author Solutions also contracts with several traditional publishers (or “partners”) to create additional imprints, as listed below. This gives authors inflated hopes of being discovered by a traditional publisher, even though the services offered are the very same useless services performed by Author Solutions, only at a higher price. Many of the partners do not disclose Author Solutions’s participation in the partnership.

. . . .

Author Solutions deceptively markets its service in a number of ways. For instance, Authors Solutions has never analyzed whether these expensive “marketing services” help an author’s book sales. Second, it calls its team of telemarketers, largely based at a call center in the Philippines, “Publishing Consultants,” “Marketing Consultants,” or “Book Consultants” to give the impression that these employees have publishing or marketing experience and will guide the author through the process. In reality, these “consultants” are simply commissioned salespeople. None of this is disclosed to authors.

. . . .

To understand the actual value of these services it might be wise to look at the experience of someone who knows the system well. Author Solutions’s own Editorial Services Manager has published seven books with Author Solutions. Although he was certainly interested in book sales, he did not purchase a single marketing service from AS. Not a single one.

Link to the rest at Giskan Solotaroff Anderson & Stewart and thanks to Randall and many others for the tip.

Following is a copy of the Complaint filed in the second suit:

.


As Complaint (Text)

Conversations in Private Author Loops

27 March 2015

From author Courtney Milan via Smart Bitches, Trashy Books:

Courtney Milan says:

Look, there’s a reason I haven’t said much. I’m still untangling things. There are a lot of things that I need to untangle. I’m sorry that’s not convenient–I conveniently wish I could untangle this easily, too.

But here is one thread of about 45 tangled threads that I think I’m finally clear on: There is an intersection between Jane being on author loops and the lawsuit.

Everything that crosses Jane’s eye about Ellora’s Cave is discoverable by Tina Engler–someone who has allegedly inflated the 1099s of former editors who testified in the suit in retaliation for their testimony, an action that will cost them time and money to correct. A lot of authors–and I mean a LOT–are being very cautious about what they say because they don’t want to be retaliated against. I understand that worry and I’m not going to tell people to put their careers on the line when they’ve got a living to make.

Now we come to those private author loops. Because that’s where we do a lot of processing behind the scenes, including processing of the questions regarding the EC suit. On private author loops, authors have asked each other questions like this: Do I say something in public? Is it worth the risk? They still have six of my books, and they’re still paying me and I need that money to pay rent. Or, maybe the calculus goes, They haven’t paid me yet but I think they will and I can’t afford not to get it. I can’t speak up.

Ellora’s Cave is going to ask for discovery of any and all communications received by Jane in any form regarding Ellora’s Cave. If Jane was on any of those loops? That stuff is discoverable. Even if Jane as Jen didn’t respond or instigate the discussion. Even if she never used the information.

It is a huge risk to speak frankly in front of someone who may be compelled by court order to report your speech to the person you are talking about. There’s even the risk that, as a result of that speech, you may be compelled by subpoena to testify in court. These are risks that are vastly different in kind than the risks authors normally assume–and Jane spent six months on authors’ loops not disclosing that a court could compel her to put everything said in front of her about Ellora’s Cave in front of Tina Engler.

Link to the rest at Smart Bitches, Trashy Books and thanks to Phoenix and several others for the tip.

Here’s a link to Courtney Milan’s books

Sony fails to knock out 19’s Idol stars lawsuit

19 March 2015

From CMU:

Sony Music has failed to have a wide-ranging lawsuit filed by 19 Entertainment a year ago dismissed, though some elements of the case have been thrown out.

As previously reported, ‘American Idol’-owning 19 Entertainment, which also manages many of the finalists that appeared on the talent show franchise, last year sued Sony Music, which traditionally signed ‘Idol’ winners, claiming that it had found “systemically incorrect calculations” on two separate audits of royalty payments made by the major. It then added that the record company had failed to allow 19’s bean counters to access all the data they required to do a full audit.

. . . .

As previously noted, 19’s litigation includes one of the big fat debates of the moment in artist management circles, whether digital income should count as ‘licensing’ or ‘sales’ income with artist contracts that don’t specifically mention downloads and/or streams.

It’s an important distinction, because artists traditionally get a much bigger cut of the loot with licensing money that they do with sales income. Labels say that downloads and streams should be classified as sales for royalty purposes, but many heritage artists point out that what the labels negotiate with iTunes and Spotify are definitely ‘licensing deals’.

And this issue is one that will be allowed to proceed, potentially giving more court time to a dispute that has been subject to countless lawsuits and artist/label deals (some public, most under the radar), but which has generally had little judicial consideration, except in the famous FBT Productions case against Universal, which the majors have always insisted doesn’t set a precedent.

Among the other elements of the case also allowed to proceed is another favourite with artist managers and lawyers, the way labels sometimes confuse things when money moves between global subsidiaries, this time in relation to advertising spend. 19 accuses Sony of using “sleight of hand” tactics to reduce its royalty obligations to its artists.

Link to the rest at CMU

PG notes that since this case is in New York, it has the potential to provide some rulings that could impact a lot of tradpub publishing contracts.

Memphis Publisher Sues Salinger Estate

18 March 2015

From Publishers Weekly:

Memphis-based independent publisher The Devault-Graves Agency filed a lawsuit against the J.D. Salinger Literary Trust in a Tennessee court on March 16, claiming that the estate has, without legal basis, thwarted the press’s attempts to publish and distribute international editions of its collection of early Salinger short stories, Three Early Stories.

Devault-Graves released the U.S. edition of the title, which includes three stories from early in Salinger’s literary career which had fallen into the public domain, in July 2014. A culmination of what the publisher’s Tom Graves described to PW in July as an “exhaustive” and expensive process that involved a team of copyright lawyers, the book is, he said, the first legitimate Salinger book to be published in more than 50 years. Upon its release, the Salinger estate, after a brief investigation, confirmed it would not halt Devault-Graves’s publication in the U.S. But now, as the publisher attempts to sell the work abroad, Devault-Graves asserts the estate is “tortiously interfering with [its] contractual agreements with foreign publishers,” including those in the U.K. and Japan.

For its part, the Salinger estate contends that Devault-Graves is of the “erroneous view” that because the stories were in the public domain in the U.S., they would also exist in the public domain in countries where they were not previously published.

Link to the rest at Publishers Weekly and thanks to Ryan for the tip.

One apartment complex’s rule: You write a bad review, we fine you $10k

12 March 2015

From Ars Technica:

Trying to control customer opinions online is nearly always a losing game for a business, and there’s now a long line of cases where it has backfired on companies. We uncovered a new example this month, when a reader contacted Ars Technica to show us the “Social Media Addendum” that his Florida apartment complex, called Windermere Cay, included in his lease.

The Social Media Addendum, published here, is a triple-whammy. First, it explicitly bans all “negative commentary and reviews on Yelp! [sic], Apartment Ratings, Facebook, or any other website or Internet-based publication or blog.” It also says any “breach” of the Social Media Addendum will result in a $10,000 fine, to be paid within ten business days. Finally, it assigns the renters’ copyrights to the owner—not just the copyright on the negative review, but “any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments.” Snap a few shots of friends who come over for a dinner party? The photos are owned by your landlord.

. . . .

Not only is such a contract unenforceable, but it could expose anyone promulgating it to legal repercussions, Santa Clara University Law Professor Eric Goldman explained.

“It would be a terrible idea to enforce this in court. A judge is going to shred it,” Goldman said in an interview. “If a person posts an Instragram photo of them having a party in their apartment, the landlord is saying they own that as well. The overreach reinforces that this clause is bad news, and it may be actionable just to ask.”

. . . .

 It’s been clear that such contracts are legally questionable since at least 2003, when the New York v. Network Associates decision came out. In that case, a judge found that telling customers they couldn’t publish reviews of software “without prior consent” violated New York’s unfair competition law. In Goldman’s opinion, “no review” contracts like the one pushed by Windermere could also lead to legal trouble under federal law, since the FTC Act bars “unfair and deceptive” business practices.

Goldman has written about some of the most notable attempts by businesses to squelch customer reviews, although he said the Windermere Cay Social Media Addendum is the first time he has seen such an attempt in the landlord-tenant context.

Link to the rest at Ars Technica

PG hadn’t heard about New York’s Unfair Competition law, so he did a little research (a little research can be a dangerous thing for a lawyer assisting a client, not so much for a blogger).

From The New York Litigation Guide:

We have long recognized two theories of common-law unfair competition: palming off and misappropriation.” ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 476 (2007).

  1. Defendant misappropriated the fruits of Plaintiff’s labor by obtaining access to plaintiff’s ideas through fraud or deception, or the abuse of a fiduciary or confidential relationship; and
  2. “(1) that the defendant’s activities have caused confusion with, or have been mistaken for, the plaintiff’s activities in the mind of the public, or are likely to cause such confusion or mistake; or (2) that the defendant has acted unfairly in some manner.”

KG2, LLC v. Weller, 105 A.D.3d 1414, 1415 (4th Dep’t 2013).

. . . .

Misappropriation is “[t]he principle that one may not misappropriate the results of the skill, expenditures and labors of a competitor has . . . often been implemented in [New York] courts.” ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 477 (2007).

“‘While [t]here is no complete list of the activities which constitute unfair competition, [t]he general principle . . . is that commercial unfairness will be restrained when it appears that there has been a misappropriation, for the commercial advantage of one person, of a benefit or property right belonging to another.’” IDG USA, LLC v. Schupp, No. 10-CV-76S(F), 2012 U.S. Dist. LEXIS 151554, at *31-32 (W.D.N.Y. Oct. 21, 2012).

Link to the rest at The New York Litigation Guide

PG did a little research because he immediately thought about the non-compete clauses included in the contracts of every large New York publisher. Basically, these clauses say something like “author shall not publish any book that might compete with (the books subject to the contract).” These same contracts also specify that New York law will apply to them.

Since the non-compete clauses are included in contracts that last for the full term of the copyright – the rest of the author’s life plus 70 years in the US – PG wonders if such non-compete clauses represent “a misappropriation, for the commercial advantage of one person, of a benefit or property right belonging to another” or that the publishers have “acted unfairly” under the relevant law and cases.

PG will warn all and sundry visitors that this isn’t a legal opinion or even a legal speculation, just a blog post.

Harper Lee’s Condition Debated by Friends, Fans and Now State of Alabama

12 March 2015

From The New York Times:

The doubts arose almost immediately when HarperCollins announced last month that it would release a rediscovered book by Harper Lee: Did Ms. Lee — 88, publicity-shy and famously resistant to producing a follow-up to her masterpiece, “To Kill a Mockingbird” — really want to publish a second novel that she wrote and set aside more than a half-century ago?

Weeks later, that question remains a matter of passionate debate. Despite reassurances from her publisher, lawyer and literary agent that Ms. Lee has enthusiastically endorsed the publication, the controversy over the new book, “Go Set a Watchman,” has divided some residents of her hometown here, as well as longtime friends who live elsewhere. One faction argues that Ms. Lee’s mental health is too shaky for her to have knowingly authorized the new book, while the other just as vigorously affirms her competence.

Now the State of Alabama has been drawn into the debate. Responding to at least one complaint of potential elder abuse related to the publication of “Watchman,” investigators interviewed Ms. Lee last month at the assisted living facility where she resides. They have also interviewed employees at the facility, called the Meadows, as well as several friends and acquaintances.

It remains unclear what, if anything, will come out of the investigation, now more than a month old. One person informed of the substance of the interviews, who did not want to speak for attribution because the inquiry was ongoing, said Ms. Lee appeared capable of understanding questions and provided cogent answers to investigators.

The fact that the state has undertaken an inquiry highlights the scrutiny that Ms. Lee’s publisher and lawyer are facing as they prepare to release one of the most hotly anticipated titles in decades. And the spectacle of a very public debate about Ms. Lee’s mental condition and true intentions has added an operatic blemish to what should have been a triumphant moment for HarperCollins and the millions of fans who have clamored for decades for Ms. Lee to produce another book.

Link to the rest at The New York Times and thanks to Tom for the tip.

PG says the topic of what happens if an individual with significant business or financial interests becomes incompetent or is suspected of being incompetent is one that sometimes is omitted from estate plans, which may focus solely upon what happens after an individual dies.

This is one area where a properly-drafted trust naming a reliable trustee can be valuable. (No, PG doesn’t do trusts any more, but competent estate planning attorneys are not difficult to locate.)

A Kobo contract’s great … if you’re based in Canada

10 March 2015

From The Guardian:

In recent columns, I’ve praised Tesco’s Blinkbox Books service for honouring its commitment to customers by transferring its libraries to Kobo, a competing e-reading service of long standing. Blinkbox also distinguished itself by putting the source code for almost its entire system online, free, meaning someone could build a whole new service based on its work. So far, so classy.

However, a couple of former Blinkbox customers have been in touch to voice some disquiet at the process. As they point out, unlike Blinkbooks, Kobo is based abroad, in Canada, and so a different set of laws apply when it comes to its management of customer data.

For example, while businesses and government departments in the UK must comply with the Data Protection Act, the Canadian parliament is currently debating a new piece of legislation, the Information Sharing Act, which will allow all departments of government to share information in ways that are not currently permitted in the UK.

While it’s highly unlikely that any Kobo users will end up on a Canadian watchlist, the point remains: ship your data abroad, and it falls into other jurisdictions and other legal systems that you don’t necessarily vote for or understand. It’s a long way from the local library.

Link to the rest at The Guardian

Update: Lawsuit Against Author Solutions

9 March 2015

From Writer Beware:

A February 26 filing in New York’s Southern District Court by Kelvin James, Jodi Foster, and Mary Simmons (added to the suit after Terry Hardy dropped out in the fall of 2013) asks Judge Denise Cote for certification of the class, covering 170,000 or more authors “who, during the period 2007 through the present, purchased a publishing package or service from Author Solutions.”

The plaintiffs say their lawsuit is “a case about a publishing company that makes money from authors, not for them.” They allege again that ASI “operates more like a telemarketing company, not a publisher, that employs a large, commissioned sales force to sell books and services to its target audience: the Authors themselves, not the general public.” The filing quotes an Author Solutions executive saying in a deposition that the company “has no idea whether the services help authors sell books,” which the plaintiffs call “struthious” and a pretense.

The plaintiffs believe the “evidence common to all class members will prove that Author Solutions deceptively sold Publishing Packages and other Services by making false, untrue, or misleading statements, and by concealing critical information from the Plaintiffs and Class” — namely that its “consultants” are in fact telemarketers who do not need to have experience in publishing matters; that it lies about being “invested in Authors’ success”; that its “Rising Star” program with Barnes & Noble is a fiction; that the company “does not know whether Authors succeed in the retail channel and makes no effort to find out”; and that services “are not reasonably designed to help Authors sell books or to accomplish their stated goal and are effectively worthless.”

Link to the rest at Writer Beware and thanks to James for the tip.

Shropshire internet troll left counting cost over £100,000 legal bill

8 March 2015

From the Shropshire Star:

Jason ‘Jay’ Page, from Telford, reaped a legal whirlwind when he posted a wounding review on Colorado-based Timothy Bussey’s Google Maps profile. The anonymous post described the US lawyer as “a scumbag” and accused him of paying for his firm’s positive reviews on the web.

Mr Bussey was left fuming by the anonymous post, which seemed to be from a dissatisfied client and stated to the world that “he loses 80 per cent of his cases”.

The post remained live on the web for about a year and Mr Bussey and his firm, The Bussey Law Firm, suffered severe damage to their reputation.

Mr Bussey was not willing to let the matter rest and, at huge expense, employed a Californian law firm to subpoena Google’s records to find out who was responsible.

That led him to the door of Mr Page, aged in his 20s, who was living with his parents in Sutton Hill, Telford, and yesterday ended up on the receiving end of a full-scale High Court libel case – around £100,000.

. . . .

The judge added: “Why Mr Page should himself choose to attack Mr Bussey and his firm is unclear, but the most likely explanation would appear to be a purely financial one.”

Taking into account the “grapevine effect” on the internet, the judge had no doubt that the post had caused serious damage to Mr Bussey and his firm’s good name. He ordered Mr Page to pay £50,000 damages, along with Mr Bussey’s legal costs. He must pay £50,000 of those on account, pending final assessment of the costs bill.

. . . .

“Now there is a verdict and huge costs and damages awarded to the plaintiff. Jason Page is either going to have to pay or find the means to appeal. That’s a tremendous cost for what were probably unnecessary and ill-considered words that did their damage with a simple press of the ‘enter’ key.

Link to the rest at the Shropshire Star and thanks to Mia for the tip.

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