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The Death of Courtesy and Civility Under the National Labor Relations Act

Posted in Employment Law, Litigation

In 2012, the National Labor Relations Board (NLRB or the “Board”) found a “courtesy” policy unlawful. Since then, the NLRB has continued to create more and more tension between the National Labor Relations Act (NLRA or the “Act”) and employers’ legitimate interests in maintaining and enforcing workplace guidelines governing courtesy in a nondiscriminatory fashion.

This article focuses on the maintenance and enforcement of courtesy and civility rules. In these cases, the Board has taken extreme positions that increasingly ignore competing interests and obligations of employers. Among the obligations that can conflict with Section 7 in this context, employers must protect their employees from harassment, including on the basis of sex and race, by disciplining employees making harassing comments and engaging in harassing behavior and by maintaining civil workplaces that are not conducive to harassment. Employers also have a legitimate interest in maintaining a civil workplace simply to promote employee productivity and job satisfaction, as well as ensuring appropriate levels of customer service.

The Framework: Regulating Workplace Rules Under the NLRA

Employees have the right to engage in concerted activity under Section 7 of the NLRA. Concerted activity is activity undertaken for the employees’ mutual aid and protection, including, for example, discussing the terms and conditions of employment, such as wages, policies, and workplace treatment. Under Section 8(a)(1) of the Act, it is an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.”

Under the general framework of the Act, the National Labor Relations Board regulates employer maintenance and enforcement of generally applicable workplace rules in several ways.

First, an employer commits an unfair labor practice, under Section 8(a)(1), if it maintains a rule that would reasonably tend to chill employees in the exercise of their Section 7 rights. If it expressly restricts Section 7 activity, the rule is unlawful. Further, if it does not expressly restrict Section 7 activity, the rule is still unlawful under Lutheran Heritage Village if “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” In reading the rule, the Board should “refrain from reading particular phrases in isolation.” Similarly, the Board should not seek out “arguable ambiguity . . . through parsing the language of the rule, viewing [a] phrase . . . in isolation, and attributing to the [employer] an intent to interfere with employee rights.” Lafayette Park Hotel.

Second, employers may not discipline employees for engaging in protected activity. In the event that “the very conduct for which employees are disciplined is itself protected concerted activity,” then the discipline violates Section 8(a)(1) regardless of the employer’s motive or a showing of animus. Burnup & Sims, Inc. Similarly, if an employee violates a workplace rule and is disciplined, the discipline is unlawful if the employee “violated the rule by (1) engaging in protected conduct or (2) engaging in conduct that otherwise implicates the concerns underlying Section 7 of the Act.” Continental Group, Inc.

Workplace Conduct: Courtesy and Professionalism

The cases that likely demonstrate the biggest gap between the single-minded ideals espoused by the Board and the practicalities of managing a workforce are the Board’s decisions in the areas of civility and professionalism. In these cases, the Board would hamstring employers’ ability to govern basic workplace conduct, like requiring courtesy toward other employees or customers, or prohibiting or punishing profanity, threats, and abusive language. The cases create friction between the Act and employers’ need to maintain civility in the workplace—which in turn makes preventing harassment and ensuring employee satisfaction and productivity more difficult.

Drafting Courtesy Rules

The Board has invalidated a number of rules that are unquestionably implemented for the purpose of ensuring a well-managed, strife-free workplace. Importantly, it is not relevant in these cases whether the rule at issue was implemented for an improper purpose or even whether the rule has been applied to activity that is actually protected by the Act; the only question is whether an employee would read the rule as prohibiting protected conduct. Unfortunately, the Board has concluded that the aspirational language of courtesy rules is often vague and over broad—frequently noting the lack of definitions of vague terms—and therefore would be read by employees to prohibit protected conduct, such as being critical of their pay or other conditions of work, co-workers, or their employer.

In the first of a string of cases involving courtesy, the Board invalidated a “Courtesy” policy in Karl Knauz Motors, 358 NLRB No. 164 (2012) (likely to be treated as persuasive authority after Noel Canning). Although precedent dictates that the Board read the rule as a whole, the Board here tortuously parsed this rule to find that it violated the Act.

The full policy at issue provided as follows:

Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

The majority concluded that the Courtesy rule was unlawful because, notwithstanding the title or first two sentences of the rule, “employees would reasonably construe its broad prohibition against ‘disrespectful’ conduct and ‘language which injures the image or reputation of the Dealership’ as encompassing Section 7 activity.”

For similar reasons, the Board has invalidated rules that prohibit employees from being discourteous, even to guests. In First Transit, Inc., the Board invalidated a bus company’s rule that prohibits “[d]iscourteous or inappropriate attitude or behavior to passengers, other employees, or members of the public. Disorderly conduct during working hours.” The Board focused on the phrase relating to employees, and struck down the entire rule, finding it similar to a rule found unlawful in a previous Board decision prohibiting the “inability or unwillingness to work harmoniously with other employees.”

In another case brought by a former Hooters waitress, Hoot Wing, LLC & Ontario Wings, LLC, an administrative law judge (ALJ) of the NLRB invalidated two policies that including obligations to be respectful. Specifically, two rules prohibited the following disrespectful conduct:

Disrespect to our guests including discussing tips, profanity or negative comments or actions.

Insubordination to a manager or lack of respect and cooperation with fellow employees or guests

The ALJ concluded that both rules were vague and over broad. The portion of the rule prohibiting the discussion of tips violated the employees’ rights to discuss wages with non-employees. The remainder of the rule (“Disrespect to our guests including . . . profanity or negative comments or actions”) was “over broad and unqualified” in part because no examples of the prohibited conduct were included. The rule prohibiting insubordination was likewise over broad as it did not define “insubordination,” “lack of respect,” or “cooperation.”

Similarly, in Laurus Technical Institute, the Board also recently invalidated several rules that prohibited gossip and negativity. The first rule prohibited “gossip,” stated that gossip “is an activity that can drain, corrupt, distract and down-shift the company’s productivity, moral, and overall satisfaction,” and defined gossip as follows:

(1) Talking about a person’s personal life when they are not present

(2) Talking about a person’s professional life without his/her supervisor present

(3) Negative, or untrue, or disparaging comments or criticisms of another person or persons

(4) Creating, sharing, or repeating information that can injure a person’s credibility or reputation

(5) Creating, sharing, or repeating a rumor about another person

(6) Creating, sharing or repeating a rumor that is overheard or hearsay

The second company’s rule stated “We will not engage in or listen to negativity or gossip” and also had a rule that stated “We will represent Hills & Dales [General Hospital] in the community in a positive and professional manner in every opportunity.”

In both cases, the Board concluded that the quoted rules were over broad and could be interpreted by reasonable employees as infringing on their right to discuss the terms and conditions of employment. In the former case, an employee was reinstated with back pay after she was terminated for, among other things, violating the rule.

In slightly better news, this May, in First Transit, Inc., the Board has finally found a floor: Employers may, at least, prohibit employees from using “Profane or abusive language where the language is uncivil, insulting, contemptuous, vicious, or malicious.”

Enforcing Courtesy Rules

It is not just the maintenance of courtesy rules that can get employers into trouble. If a rule is over broad and an employee is terminated for violating that rule, the Board may order reinstatement of the employee with back pay. And a few cases demonstrate that the Board is equally aggressive in cases challenging enforcement of workplace rules as in maintenance cases. These cases clearly illustrate the tension between the NLRA and other workplace laws and interests that require a certain level of decorum be maintained in the workplace.

Even though employers can at least theoretically maintain rules prohibiting profane speech (see above), they may not be able to terminate employees who violate the rule. Repeatedly the Board has sided with employees who use profane speech or improper gestures, when it concludes the employee was engaging in protected conduct at the time. (Remember: This Board takes a very broad view of what is protected.) Two recent decisions illustrate the issue:

First, on remand from the Second Circuit, the Board found that Starbucks unlawfully terminated an employee after he engaged in a heated dispute with his manager in which he used many expletives—in front of customers. Originally, the Board approved of the employee’s conduct, and Starbucks appealed. The Second Circuit remanded, noting “We think the analysis of [the Board] improperly disregarded the entirely legitimate concern of an employer not to tolerate employee outbursts containing obscenities in the presence of customers.” On remand, the Board did not take this admonishment to heart, and again sided with the employee.

Second, the Board likewise condoned an employee’s conduct in Plaza Auto Center, Inc. when he cursed at his supervisor, calling him a “f***ing mother f***er” and a “f***ing crook,” among other profanities. He also told the supervisor that if he was terminated, the supervisor “would regret it.” As a result of this meeting, the employee was terminated, and on review the Board concluded that the employer violated the Act in so doing. Although the supervisor stated he took the statement that he “would regret it” as a physical threat, the Board did not credit that testimony, since the employee did not display any physical signs of a threat. Ultimately, the Board concluded that the statements to the supervisor were not so egregious as to lose the protection of the Act. The dissent objected that the conduct was not protected, and noted “It is entirely reasonable, and to a great extent legally necessary, for many employers to insist that employees engage each other with civility rather than personally directed ‘f-bombs,’ even on matters where opinions differ sharply and emotions flare.”

In another surprising case, the Board condoned cursing and language that had female employees submitting written complaints. In Fresenius USA Manufacturing, Inc., 358 NLRB No. 138 (2012), an employee, Kevin “Dale” Grosso, anonymously wrote “vulgar, offensive, and, in isolation, possibly threatening statements on several union newsletters left in an employee break room” with the intent of encouraging union support in an upcoming decertification election. Specifically, Grosso wrote the following three notes on September 10, 2009:

“Dear Pussies, Please Read!”

“Hey cat food lovers, how’s your income doing?”

“Warehouse workers, RIP.”

Female employees complained about the statements. There were 12 employees in the warehouse unit, five of whom were female. Upon learning of the statements, several female warehouse employees complained on multiple occasions about the notes, claiming they were vulgar, offensive, and threatening. In response to the complaints, the company promised to investigate the statements and, in response to their safety concerns, the manager reminded female employees that the company maintained security cameras and he himself stayed late to ensure that they left safely. Ultimately, the female employees memorialized their complaints in written statements.

The company investigated under its anti-harassment policy, requiring management to investigate and respond to complaints of harassment and, if harassment has occurred, to administer corrective action. After ultimately concluding that he wrote the statements, Fresenius terminated Grosso’s employment.

The Board concluded that in writing those statements, Grosso was engaging in protected activity as he was seeking to encourage other employees to vote for the union. Accordingly, the termination violated the Act because he was terminated for engaging in protected concerted activity, notwithstanding the fact that he also violated the company’s nondiscriminatory policy and that female employees took offense and reported the conduct in written complaints.

One Board member dissented vigorously, expressing the view—likely shared by many employers—that the majority’s approach improperly insulates employees from discipline for misconduct:

I specifically dispute their implication that greater latitude must be accorded to misconduct occurring in the course of organizational activity than for other Section 7 activity, that profanity in the course of labor relations is the presumptive and permissible norm in any workplace, that remarks by one employee to another which would be unprotected on the shop floor should be protected if made in the breakroom, that comments which coworkers reasonably view as harassing and sexually insulting are not disruptive of productivity, and that threatening speech alone cannot warrant loss of statutory protection. Taken as a whole, these pronouncements confer on employees engaged in Section 7 activity a degree of insulation from discipline for misconduct that the Act neither requires nor warrants.

Employer Next Steps

It is likely that the Courts of Appeal will be reviewing some of these cases and issues, so the above may not be the final word on courtesy under the NLRA. And while the decisions remain in place, some competing interests in the workplace, like preventing sexual harassment, may continue to trump the Board’s interpretation. Accordingly, it may not be possible to fully harmonize the NLRA, as interpreted in the above cases, with other workplace obligations and interests. Should employers feel inclined, there are some steps to take to bring policies in closer alignment with the NLRA, while not ignoring other workplace obligations.

As an initial matter, employers should take some time to look over their policies to determine whether their workplace rules can be revised to minimize friction with the National Labor Relations Act, while still maintaining rules that are necessary for a courteous and lawful workplace. Importantly, the Board’s focus recently is on terms that it considers vague and ambiguous, so carefully crafted rules that define possibly ambiguous terms to give examples of prohibited conduct and to exclude protected conduct are more likely to pass muster.

In addition, there is now some authority that “savings clauses”—that state that the rule is not intended to interfere with Section 7 rights—can help. These clauses should be drafted with a lay person in mind, meaning that a reference to the National Labor Relations Act will not be sufficient. Instead, the savings clause should describe the concerted activity that is implicated by the rule but that is not intended to be prohibited.

Finally, before enforcing one of these rules, take a another look at the underlying conduct to determine whether it is likely to be considered protected under the Act, even if it clearly violates the workplace rule. Unfortunately, that may not end the matter as other laws, including discrimination and harassment laws, should be considered before taking action before applying the NLRA.

Status Updates

Posted in Status Updates
  • Where are the CEOs? According to a new study, fully two-thirds of the CEOs of the Fortune 500 have no personal social media presence at all. And of the ones who do participate in social media, two-thirds use only one of the major networks, usually LinkedIn.  Just 42 of the senior executives have Twitter accounts, and many of those are pretty inactive. The same number of the Fortune 500 CEOs use Facebook – still not very many at all. In an age in which virtually every company wants to brand itself on social media, it’s a bit surprising that so many of the top people have no personal experience with it.
  • Facebook lawsuit can proceed. A New York state appeals panel has permitted a lawsuit by Facebook against the Manhattan District Attorney’s office to proceed.  Facebook had sued the D.A.’s office over search warrants issued to 381 users of the network by the prosecutors in a fraud investigation. The appeals panel rejected prosecutors’ motion to dismiss Facebook’s challenge to the warrants and also gave several technology companies — among them Google, LinkedIn and Twitter — permission to file briefs supporting Facebook’s position. A full appellate hearing will occur in December. The closely watched case pits Fourth Amendment protection against prosecutors’ need for data stored by social media companies.
  • Hanging on the Vine. Vine, which began as a network in which people could share bare-bones six-second videos, has become an important venue for pop singers, actors and other entertainers who appeal to younger viewers. One observer said Vine has “an intensive burst perfect for the increasingly short attention span of Generation Z.” Vine is less than two years old but already seems to have found a niche, as top “Viners” have millions of followers on the site.

FTC Warns Advertisers to Check the Fine Print in “Operation Full Disclosure”; Shot Across the Bow Could Signal Law Enforcement Actions to Come

Posted in FTC

The Federal Trade Commission (FTC) announced this week that it sent warning letters to more than 60 national advertisers regarding the inadequacy of disclosures in their television and print ads. The letters are part of an initiative named “Operation Full Disclosure,” which the FTC implemented to review fine print disclosures and other disclosures that it believed were difficult to read or easy for consumers to overlook, yet included critical information that consumers would need to avoid being misled.

What Does it Mean for a Disclosure to be “Clear and Conspicuous”

Disclosures may be necessary to clarify a claim or to ensure that the full terms of an offer are adequately disclosed, in order to avoid a charge of deception by material omission. In FTC jurisprudence, disclosures must be “clear and conspicuous,” and while they may modify claims in the text of an ad itself, they may not contradict any such claims. The most recent pronouncement on how to make effective disclosures (this one was focused on online disclosures, but the general principles are the same) was issued in March 2013. The key is that if a disclosure is necessary to make an ad truthful and not misleading, it must be clear and conspicuous; otherwise, it is as though the disclosure was not made at all.

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Status Updates

Posted in Status Updates

Hooray for Hollywood. According to a new study by KPMG, television and movie viewers have never had it better. A report by the consulting company found that the overwhelming majority of well-known movies and television shows are available legally to U.S. viewers through online services such as Amazon Prime, Netflix and Hulu. The study found that fully 94 percent of popular titles were legally available through one channel or another. The study also pointed out that these legal services provide high-quality viewing, which is generally not true of illegal services. Maybe it is possible to compete with free? After all, sellers of bottled water have done well vis-à-vis tap water by offering products that are high-quality, reasonably priced, convenient and ubiquitous.

There’s an app for that too. Entertainers, celebrities and others who are popular with the teen-age and young-adult demographics are increasingly choosing to promote themselves on mobile app-based social networks, or so-called “chat apps,” rather than through Facebook or Twitter, where it can be hard to stand out amidst the sheer volume of posts. These new chat apps, including Line, Kik, Snapchat, WeChat and Viber, allow for more direct engagement with followers. For example, when Paul McCartney and his band recently headed to Japan, he used Line to interact with fans, personally responding to inquiries and offering a free pack of stickers featuring cartooned images of himself.

Hipster’s paradise. Here at Socially Aware, we’ve taken a keen interest in Ello, the incredibly hip new social media platform that is generating a big buzz in the tech community. Indeed, some have dubbed Ello the “anti-Facebook,” because it does not sell ads based on user data, does not require users to use their real names and has a business model that relies on users to pay for premium features that they select. It is also invitation-only, further sparking interest in the new platform. Ello’s founders say they are aiming the network at artists, designers and programmers – not at the whole universe.  They also report that Ello is doubling in size every three or four days. Will Ello become the next big thing? Will consumer concerns regarding online privacy fuel the growth of alternative platforms such as Ello and, in the search space, DuckDuckGo, services that purport to provide greater privacy protections for users?

Status Updates

Posted in Status Updates
  • Status check.  In the recently released Corporate Directors Survey from PricewaterhouseCoopers, 41% of corporate board members reported that their companies monitor social media for adverse publicity.  That’s up from 32% in 2012.  One commentator suggests that a company’s entire board of directors—not just the members of its audit or risk committees—should be charged with social media oversight, given the reputational risk social media chatter poses and the medium’s potential as an effective investor relations tool.
  • Fightin’ words?  An Indonesian law student landed in a police detention cell for criticizing a historic city online because police in that country suspected her of running afoul of the 2008 Law on Information and Electronic Transactions, Indonesian legislation that provides prison time for anyone convicted of using electronic media—including social media networks—“to intimidate or defame others.”  Many criticize the law as being inconsistent with Indonesia’s successful transition from an authoritarian state to a robust democracy.
  • The wrong number.  Twitter users sometimes give the social media company their cell phone numbers in order to be able to view tweets as text messages. But when a cell phone number that has been submitted to Twitter for that purpose is reassigned to a new user, do Twitter’s text messages to that number violate the Telephone Consumer Protection Act? Beverly Nunes claims they do. In a suit she filed in the U.S. District Court for the Northern District of California, Nunes is seeking class certification, and at least $500 in damages for each unsolicited Twitter text she received.  In a Sept. 16 motion to dismiss Nunes’s complaint, Twitter contends that the texts do not violate the TCPA because, among other things, they were not sent using an “automatic telephone dialing system or an artificial or prerecorded voice,” as the statute requires.

Status Updates

Posted in Status Updates
  • Pin Money. Brands of all sizes have long used the virtual pin board/social media site Pinterest to promote their wares and drive traffic to their web sites. Beginning in October 2014, companies will be able to purchase paid advertisements on the site as well. Pinterest announced plans to make “Promoted Pins” available to more than just the handful of big brands that have been helping the company to test its ad product since last fall. The company expects to ultimately offer advertisers pay-per-click arrangements like the ones available to purchasers of Google’s sponsored search results, and is amending its privacy policy to state, among other things, that Pinterest may collect information about its users from its advertisers and in connection with its advertisers’ websites and apps.
  • Benched judge. Michael Maggio, a state trial judge in Arkansas, was removed from the bench by the state’s highest court after he acknowledged posting confidential details about court cases in social media outlets. The judge was handling a closed adoption involving actress Charlize Theron, and he admitted posting private facts about the case. After a report by a state judicial-discipline commission, he was removed from the bench and prohibited from handling any judicial office in the future. He was found to have violated at least 23 strictures that apply to sitting judges.
  • Sweet tweets. According to a study conducted by Twitter, the Twitter accounts of members of casts of television shows get a 228 percent increase in followers if the actors live-tweet their shows. This follows other studies that indicate that TV ratings can go up as a result of live-tweeting. Grey’s Anatomy and Scandal, both originated by Shonda Rhimes, are among the shows that have gotten major boosts from the social network.

To Click or Not to Click? Ninth Circuit Rejects Browsewrap Arbitration Clause

Posted in Litigation, Terms of Use

In Kevin Khoa Nguyen v. Barnes & Noble Inc., 2014 U.S. App. LEXIS 15868 (9th Cir. 2014), decided on August 18, 2014, the Ninth Circuit rejected an attempt to bind a consumer to an arbitration clause found in an online terms of use agreement not affirmatively “click accepted” by the consumer but readily accessible through a hyperlink at the bottom left of each page on the subject website.

The case arose from a “fire sale” by defendant Barnes & Noble of certain discontinued Hewlett Packard TouchPads. Plaintiff Nguyen had ordered two of the TouchPads, but received a notice from Barnes & Noble the following day that his order had been cancelled due to unexpectedly high demand. Nguyen sued Barnes & Noble in California Superior Court on behalf of himself and a putative class, arguing that he was forced to buy a more expensive tablet instead.

Barnes & Noble, after removing the suit to federal court, moved to compel arbitration under the Federal Arbitration Act, arguing that, by using the Barnes & Noble website, Nguyen had agreed to an arbitration clause contained in Barnes & Noble’s Terms of Use. Nguyen responded that he could not be bound to the arbitration clause because he had no notice of and did not consent to the Terms of Use. Barnes & Noble countered that the placement of the Terms of Use hyperlink on its website had given Nguyen constructive notice of the arbitration clause.

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Status Updates

Posted in Status Updates
  • Time out. New FTC rules will generally require Internet retailers to give consumers the option of a full refund for an online purchase that the retailer failed to ship within the time period promised in the retailer’s solicitation for the purchased item. If such solicitation doesn’t specify a time period, the online seller may be required to ship the merchandise within 30 days of purchase to avoid having to secure the consumer’s consent to proceed with the delivery instead of making a refund. Internet retailers have until December 8th of this year to get into compliance.
  • Breaking news. In an effort to ensure its users’ news feeds feature more of the stories they actually want to see, Facebook is updating its news feed algorithm to push timely stories to the top. While the number of “likes” and comments a story received always affected where it showed up in users’ news feeds, the new algorithm will also take into account when a story elicited those responses. Facebook’s refreshed news feed formula will also favor stories that concern topics that are currently trending on the social media site.
  • Back to school. The NYPD’s top brass has so far taken four classes designed to teach them how to send appropriate tweets from the department’s more than 40 Twitter accounts. The goal: To get every New York City precinct, public housing patrol unit and transit commander tweeting by year’s end as effectively as Boston police did when they used Twitter successfully refute false reports and announce an arrest in connection with the 2013 Boston Marathon bombings. Until January of this year, New York’s Finest had only a single account, @NYPDnews, which was run by the department’s media relations team.

Status Updates

Posted in Status Updates
  • Is Tumblr trendier? A survey released by Tumblr says the users of that social media platform have higher average incomes than users of Facebook, Twitter, or Pinterest, and a report from Adobe says that this translates into cash: The average revenue per visit from a Tumblr referral is $2.57 on tablets and 67 cents on smartphones. Both figures are higher than the numbers for Facebook, Twitter, or Pinterest.  According to an Adobe digital analyst, “the fact that [Tumblr] produces the highest revenue per visit from mobile devices is likely due to its user base, which is skewed to young, trendy and well-educated urbanites with a greater affinity for online purchases and the disposable income to spend more.”
  • Come together. At a tech conference in San Francisco on September 15, Facebook announced that it, along with Google, Twitter, Square Inc., and other companies, is launching an initiative to jointly develop software programs that can be shared for free. This move has a great deal in common with Facebook’s strategy of offering its technology, including hardware technology, to other companies in an effort to reduce the costs of development and broaden Internet use. Facebook’s Open Compute concept, unveiled in 2011, already permits it to share the designs for more efficient products such as servers and network switches.
  • Expert needed? How esoteric are forensic methods of technologically linking a person to an online video in a criminal case? A New Jersey man was on trial for invading his ex-girlfriend’s privacy by posting nude pictures of her on Twitvid.com, a video-sharing service. Through several steps, a police detective was allegedly able to tie the uploading of the photos to a particular IP address that was linked to the defendant. The defense objected on the grounds that these technical aspects were not fully understandable to the average juror and required an expert witness to present them. The trial judge, as well as a New Jersey state appeals panel, agreed that a hearing was necessary to consider the nature and extent of the detective’s evidence and whether she was qualified to testify about it or whether an expert was needed.

She Liked It. She Really, Really Liked It: Federal District Court Holds Facebook Fan Page Manager Doesn’t Own “Likes”

Posted in Litigation

A federal district court broke new social media law ground in August 2014 when it held in favor of the cable network Black Entertainment Television (BET) in a suit brought by the founder of an unofficial Facebook fan page for one of the network’s television shows. In holding that BET acted lawfully when it asked Facebook to transfer the fan-created page’s “likes” to a BET-sponsored page, the U.S. District Court for the Southern District of Florida established important precedent: The only individual who can possibly claim to own a “like” on a Facebook page is the individual user responsible for it.

Background

Insurance agent Stacey Mattocks was so devoted to the television series The Game that she created an unofficial Facebook fan page for the show in 2008. By the time BET acquired the rights to The Game from the CW Network in 2009, Mattocks’ fan page had garnered a huge following, and BET—reportedly having failed to attract similar support for the show’s official fan page—wanted to capitalize on the social media audience that Mattocks had amassed.

Thus began a series of negotiations between Mattocks and BET, with Mattocks at one point managing the page for the Viacom-owned cable channel for $30 an hour. During Mattocks’ tenure in that part-time position, BET provided her with exclusive content to post on the Facebook page and began displaying its trademark and logos on it. The page’s following grew from two million to more than six million fans.

At this point, in early 2011, Mattocks and BET entered into a letter agreement granting BET administrative access to the Facebook page and the right to post content on it in exchange for the network’s promise not to change Mattocks’ administrative rights to the page. But Mattocks broke the agreement in 2012 when, after refusing a reported $85,000 annual salary offer from BET, she cut off the network’s control of the Facebook page and informed BET that she would maintain that restriction until the parties reached “an amicable and mutually beneficial resolution” concerning her employment.

BET reacted to being cut off by asking Facebook to “migrate” the page’s fans to a BET-sponsored page. After determining that the BET-sponsored page officially represented The Game’s brand owner, Facebook complied. Twitter also complied with BET’s separate request to disable The Game Twitter account that Mattocks maintained.

Mattocks filed suit in the U.S. District Court for the Southern District of Florida, alleging that BET tortiously interfered with Mattocks’ contractual relationships with Facebook and Twitter; breached its letter agreement with Mattocks; breached a duty of good faith and fair dealing with Mattocks; and converted a business interest that Mattocks had in the page. In late August 2014, the court held that BET was entitled to summary judgment on all of Mattocks’ claims.

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