Here’s the latest from CLR:
By: Ryan Vince
North Carolina is home to many famous inventions. The Wright Brothers and aviation may first come to mind, but others include Cheerwine, Pepsi-Cola (North Carolina enjoys its soda), Texas Pete, Putt-Putt, and Vicks VapoRub. All of these are highly prominent today, however, they first had to be originated, developed, and finalized by a single person or a group of people. You—the originator of the idea or the “inventor”—come up with an idea. Generally speaking, an inventor’s ultimate goal is to earn a profit from his or her “idea.” Nevertheless, most inventors will need to hire a professional to develop the “idea” because the cost of developing and/or manufacturing may be beyond the inventor’s financial capability. In order to do this, an inventor and a developer will engage in one of two types of agreements: (1) a patent assignment (i.e., one-time buyout); or (2) a license. Both of these agreements are used to transfer intellectual property rights, in whole or in part, from the inventor to the developer. While very few professional developers will attempt to swindle one of their customers, giving up rights to one of your ardent endeavors is something that needs to be handled prudently.
Although the above-listed inventions were all conceived before 1930 and not subject to current North Carolina law, more than half a century later, in 1989, the North Carolina General Assembly passed legislation concerning “Invention Development Services.” Today, these types of services are regulated by Article 29 (the “Article”) of Chapter 66 of the North Carolina General Statutes. The purpose of this blog post is to describe when the Article applies, the requirements that an Invention Developer must follow, and the protections afforded to you—the “inventor.”
Article 29 applies to Invention Developers doing business in North Carolina and mandates specific disclosures, certain contractual language, and other various requirements. According to N.C.G.S. § 66-209, an “Invention Developer” is “an individual, firm, partnership, or corporation, or an agent . . . of one of those entities, that offers to perform or performs invention development services for a customer.” However, expressly excluded from this definition are: federal, State, or local government departments or agencies; certain charitable, scientific, educational, or religious organizations; registered persons before the USPTO; licensed attorneys in North Carolina; or entities that do not charge a fee or receive reimbursement other than from part of the customer’s received income necessitated from the services. This Article provides broad coverage to the term “Invention,” which is defined as “any discovery, process, machine, design, formulation, composition of matter, product, concept, or idea, or any combination of these.”
Of great importance, the definition of an Invention Developer includes the terms “Customer” and “Invention Development Services.” Under N.C.G.S. § 66-209, “Customer” is defined as “any natural person who is solicited by, inquires about, seeks the services of, or enters into a contract with an invention developer for invention development services.” Secondly, “Invention Development Services” means “any act done by or for an invention developer for the procurement or attempted procurement by the invention developer of a licensee or buyer of an intellectual property right in an invention.” As you can see, when the Invention Developer renders its services, it will seek either to become a licensee in a license agreement or a purchaser of an intellectual property right. Thus, in order for this Article to apply, an entity that develops and/or manufactures Inventions must contract with a Customer (i.e., the inventor) for Invention Development Services.
Any Invention Developer doing business in North Carolina, according to N.C.G.S. § 66-214, is required to either “maintain a bond issued by a surety company authorized to do business in this State” or provide a cash deposit to the Secretary of State. In either case, this amount must be the greater of, five percent (5%) of the entity’s gross income during the last fiscal year or twenty-five thousand dollars ($25,000). Based on the numbers alone, these financial requirements provide Customers ample protection from “fraud, dishonesty, or failure to [be] provide[d] the services of the invention developer in performance of the contract.”
Invention Developers are required to make various disclosures before contracting with a Customer. As required by N.C.G.S. § 66-210, the disclosures are to be made when whichever is first to occur, “the first written communication from the invention developer to a specific customer, or at the first personal meeting between the invention developer and a customer.” The mandated disclosures are to be in writing and must include:
(1) The median fee charged to all of the invention developer’s customers who have signed contracts with the developer in the preceding six months, excluding customers who have signed in the preceding 30 days;
(2) A single statement setting forth (i) the total number of customers who have contracted with the invention developer, except that the number need not reflect those customers who have contracted within the preceding 30 days, and (ii) the number of customers who have received, by virtue of the invention developer’s performance of invention development services, an amount of money in excess of the amount of money paid by those customers to the invention developer pursuant to a contract for invention development services;
(3) The following statement: “Unless the invention developer is a lawyer or person registered before the United States Patent and Trademark Office, he is NOT permitted to give you legal advice concerning patent, copyright, trademark law, or the law of unfair competition or to advise you of whether your idea or invention may be patentable or may be protected under the patent, copyright, or trademark laws of the United States, or any other law. No patent, copyright, or trademark protection will be acquired for you by the invention developer. Your failure to inquire into the law governing patent, trademark, or copyright matters may jeopardize your rights in your idea or invention, both in the United States and in foreign countries. Your failure to identify and investigate existing patents, trademarks, or registered copyrights may place you in jeopardy of infringing the copyrights, patent, or trademark rights of other persons if you proceed to make, use, distribute, or sell your idea or invention.”
In addition and subsequent to the required disclosures, an Invention Developer must attach to its “contract for invention development services . . . a conspicuous and legible cover sheet.” The cover sheet cannot include “anything in addition to the information required by subsection (a) of this section.” Subsection (a) of N.C.G.S. § 66-211 has two separate requirements. First, an Invention Developer’s cover sheet must include the Invention Developer’s name and its home, office, and local addresses. Second, an Invention Developer must properly fill in the blanks to the following notice, which shall be bold-faced and, at a minimum, in 10-point font size:
THIS CONTRACT BETWEEN YOU AND AN INVENTION DEVELOPER IS REGULATED BY ARTICLE 29 OF CHAPTER 66 OF THE GENERAL STATUTES OF THE STATE OF NORTH CAROLINA. YOU ARE NOT PERMITTED OR REQUIRED TO MAKE ANY PAYMENTS UNDER THIS CONTRACT UNTIL FOUR WORKING DAYS AFTER YOU SIGN THIS CONTRACT AND RECEIVE A COMPLETED COPY OF IT.
YOU CAN TERMINATE THIS CONTRACT AT ANY TIME BEFORE YOU MAKE PAYMENT. YOU CAN TERMINATE THIS CONTRACT SIMPLY BY NOT SUBMITTING PAYMENT.
IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE THE RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.
THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION DEVELOPER SINCE (year) IS (number) . THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS INVENTION DEVELOPER TO HAVE RECEIVED BY VIRTUE OF THIS INVENTION DEVELOPER’S PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION DEVELOPER IS (number) .
YOU ARE ENCOURAGED TO CONSULT WITH A QUALIFIED ATTORNEY BEFORE SIGNING THIS CONTRACT. BY PROCEEDING WITHOUT THE ADVICE OF A QUALIFIED ATTORNEY YOU COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR INVENTION.
After making the preliminary disclosures and properly drafting the cover sheet, the Invention Developer’s last requirement(s) is to comply with sections N.C.G.S. § 66-212 (Contracting Requirements) and N.C.G.S. § 66-213 (Mandatory Contract Terms).
Article 29 sets out numerous Contracting Requirements under N.C.G.S. § 66-212. First, the Invention Developer’s contract must be in writing. Second, the Invention Developer must also provide a copy of the contract to the Customer “at the time the customer signs the contract.” If the Invention Developer normally seeks to use more than one contract, then the Invention Developer must provide the Customer—at the time of signing—with a written statement of the practice and a written summary, if any, of subsequent contracts to be used. Third, unless the parties contract otherwise, the Invention Developer cannot require or receive payment from a Customer “before the fourth business day after the day on which the customer receives a copy of the contract . . . signed by the invention developer and the customer.” An important caveat to this section is that “delivery of a . . . negotiable instrument of any kind . . . irrespective of the date or dates appearing on that instrument is payment.” Nevertheless, until payment is made, both parties “have the option to terminate the contract.” The Customer may exercise this option by simply refraining to make the payment, whereas the Invention Developer must give the Customer written notice of termination, which becomes effective on the Customer’s receipt.
Contained in this Article are several Mandatory Contract Terms. Contrary to the previous requirements of N.C.G.S. § 66-212, the required information set forth in N.C.G.S. § 66-213 may be handwritten. However, if handwritten, it must at least be equivalent to a 10-point font size. In the contract itself, the Invention Developer must include:
- A full and detailed description of the acts or services that are being contracted;
- Terms and conditions of payment and the parties’ termination rights required by C.G.S. § 66-212(e);
- Whether the Invention Developer contracts to construct one or more prototypes of the Customer’s Invention, the number of prototypes to be constructed, and whether the Invention Developer contracts to sell or distribute such prototypes;
- An estimate and the data upon which it is based—if the Invention Developer makes an oral or written estimate of projected Customer sales, profits, earnings, and/or royalties;
- The expected date of completion, whether it is “time is of the essence,” and whether there are provisions related to a delay past the expected completion date;
- That the Invention Developer is required to maintain all records and correspondence related to its services for three (3) years after contract expiration (and that such records will be made available to the Customer upon a seven days’ written notice);
- The name of the entity contracting to perform the Invention Development Services, all names that the entity is doing or has done business for the previous 10 years, the names of all parent and subsidiary companies to the entity, and the names of all companies that have contractual obligations to the entity to perform Invention Development Services; and
- The Invention Developer’s principal business address and the name/address of its North Carolina agent authorized to receive service of process in this State.
The Remedies section of Article 29, N.C.G.S. § 66-215, provides Customers with certain protections. First, a contract for Invention Development Services is “voidable at the option of the customer” when it does not “substantially comply with this Article.” In addition to this overarching remedy, a contract is “voidable at the option of the customer” when it was entered into based on his or her reliance on “any false, fraudulent, or misleading information, representation, notice, or advertisement of the invention developer.” This section provides even further protection when it states, “any waiver by the customer of any provision of this act shall be deemed contrary to public policy and shall be void and unenforceable.” These stringent protections are available even when the Customer is not injured by the Invention Developer’s noncompliance. Nevertheless, when “[a]ny customer or person” has been injured by a violation of this Article ((a) fraudulent misrepresentation or omission; or (b) failure to make all required disclosures), the injured party may recover court costs, attorney’s fees, and actual damages from the Invention Developer.
Based on the statutory language alone, it is evident that you (the Customer) are afforded great protection from Invention Developers’ wrongful acts. In essence, Article 29 is the “iron fist” for assuring that persons or entities that perform Invention Development Services do so properly and according to law. While there is no current case law related to this Article, North Carolina’s history of inventions shows how prevalent and lucrative this business can be. Whether you are an everyday-inventor or someone with your “first great idea,” this Article remains fundamental. Not only is it important to protect the intellectual property rights in your invention, but also to protect yourself from others—Invention Developers—who can potentially appropriate your idea, and in turn, your rightful earnings.
By: Matthew Freeze
In early October 2016, fifteen employees at various McDonald’s franchises filed charges of sexual harassment with the Equal Employment Opportunity Commission (“EEOC”) alleging that individual supervisors at these McDonald’s outlets had sexually harassed the employees over a period of several years.[i] McDonald’s is structured, however, in such a way that 80% of the individual restaurant outlets are operated by individual franchisees.[ii] Under basic principles of agency, McDonald’s—as franchisor—will generally only be liable for acts of its franchisees if the franchisee’s actions are under the franchisor’s control and within the scope of the agreement between the two.[iii] To avoid liability for the above sexual harassment claims, McDonald’s will only need to demonstrate that its franchisees are truly independent contractors.[iv] Therefore, if the fifteen employee-claimants can demonstrate the individual franchisee supervisors were acting illegally and that McDonald’s exercised sufficient control over the actions of those franchisees and supervisors to warrant liability, then the employees may well succeed in bringing their sexual harassment claims against McDonald’s.
In 1986, the Supreme Court first noted that the creation of a hostile work environment qualified, under certain circumstances, as a valid claim under Title VII of the Civil Rights Act of 1964,[v] and the EEOC has defined sexual harassment as an unlawful means for creating such a hostile working environment.[vi] The purpose of this article is not, however, to examine the merits of the individual workers who have filed claims against McDonald’s. For one, such filings are confidential.[vii] At a minimum, for such harassment “to be actionable, it must be sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.’”[viii] It is arguable that the fifteen employees, assuming their allegations are true, would have suffered from such a difficult working environment at the hands of their supervisors. A recent national survey of non-managerial female fast food workers found that two in five women “have been subjected to sexual harassment on the job,” with many reporting “serious negative health and professional consequences.”[ix] Given this, it is tentative as to whether sexual harassment is occuring on a national scale. If the allegations of the fifteen employees[x] are indeed true, then those individual supervisors will face punishment individually and so will their individual franchises, under the principle of respondeat superior. It is also questionable that a successful claim will have wide-ranging impact on franchise operations of fast-food outlets nationwide. The question then becomes: what of McDonald’s’ involvement and liability in the matter?
This article, therefore, examines whether McDonald’s—a multi-national company in the business of offering franchise fast-food restaurants—can be vicariously liable for the conduct of its individual franchisees for sexual harassment of individual employees. Franchisors are caught in a delicate equilibrium where they must balance their interest in maintaining strict uniformity in what is produced by franchisees against minimizing control over their franchisees’ operations to limit their vicarious liability for things like sexual harassment.
In the oft-cited Patterson v. Domino’s Pizza, the California Supreme Court examined the same issue as it specifically applied to sexual harassment of an employee of a Domino’s franchise.[xi] The court held that a franchisor will likely become liable for franchisee actions “only if it has retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee’s employees.”[xii] Essentially, the court denied joint control over the franchise employee because the franchisee retained the traditional sense that it was an independent contractor.[xiii] Ultimately, the court did not hold Domino’s liable because Domino’s had no ability to exercise control over the individual franchise employee’s harasser.[xiv]
This trend in denying joint employer liability in franchisor-franchisee relationship appears to be eroding. The National Labor Relations Board (NLRB)—the federal agency tasked with safeguarding employee rights and preventing and remedying unfair labor practices[xv]—recently laid down a much more expansive view of this concept. The NLRB held that two companies will be considered joint employers of an individual employee if they “share or codetermine those matters governing the essential terms of conditions of employment.”[xvi] This joint employer status is crucial for determining whether a franchisor will maintain vicarious liability for the actions of the franchisee or its employees.
McDonald’s has been able to avoid corporate liability from the individual actions of franchisee employees on several occasions and on similar grounds.[xvii] In light of the new NLRB ruling[xviii], however, McDonald’s liability will hinge almost entirely on the degree of control it exercised over its individual franchisees such that it can be considered a joint employer.
In its franchise agreements, McDonald’s regularly outlines the specifications for the products, appearance, and personalities that the franchisees will be “selling” to the market.[xix] As noted above, these sorts of arrangements would be inculpable to the Patterson court because they fail to control the day-to-day operations of the individual franchisee.[xx] Specifically, the franchise agreement notes that franchisees are to be defined as independent contractors.[xxi] In addition, McDonald’s has made it clear to its actual employees and its franchisees that there is a zero-tolerance policy for harassment, sexual or otherwise.[xxii]
The NLRB’s rulings on joint employer liability should give McDonald’s pause. While McDonald’s may argue that their franchise agreements are structured in such a way as to remove their liability, the actual involvement of corporate management in the day-to-day “operational nitty-gritty” of things, like wages, has compelled the NLRB take a closer look at the franchisor-franchisee relationship in relation to McDonald’s claims.[xxiii] In the early 2016 fight for a $15 minimum wage, the NLRB represented workers appealing for an increase in their pay and argued that McDonald’s was regularly involved in the operational decisions of its franchisees.[xxiv] While this case is ongoing, if the NLRB Board assigns joint employer status to McDonald’s franchises, it will upend decades of how the American legal system has examined franchise agreements, specifically joint liability for sexual harassment by franchise employees.
Franchisors, therefore, will be paying close attention to how both the NLRB and EEOC decisions will affect their relationships with their franchisees. At a minimum, the EEOC claims may bring redress to the individual women who were harmed by the egregious conduct of their supervisors, even if it is through a settlement process. On a broader scale, however, one would hope that these claims would push McDonald’s to truly enforce their zero-tolerance policy towards harassment (sexual and otherwise) and effect a system-wide change to bring justice to any individuals who have suffered. If the NLRB Board decides to find joint employer liability in the McDonald’s wage cases, the EEOC claims for sexual harassment will likely become that much stronger and a systematic change will likely result.
[i] Samantha Bomkamp, McDonald’s workers file sexual harassment charges with EEOC, Chicago Tribune (October 5, 2016, 1:14 PM), http://www.chicagotribune.com/business/ct-mcdonalds-sexual-harassment-1006-biz-20161005-story.html.
[ii] Company Profile, McDonald’s, http://corporate.mcdonalds.com/content/mcd/investors/company-overview/.
company-overview-segment-information.html (last visited Nov. 13, 2016).
[iii] Restatement (Second) of Agency §219-220 (Am. Law. Inst. 1958).
[v] See Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 73 (1986); 42 U.S.C. §2000e (2016).
[vi] 29 C.F.R. §1604.11.
[vii] Confidentiality, U.S. Equal Emp. Opportunity Comm., https://www.eeoc.gov/employees/confidentiality.cfm (last visited Nov. 13, 2016).
[viii] Vinson, 477 U.S. at 67.
[ix] Key Findings from a Survey of Women Fast Food Workers, Hart Research Associates (October 5, 2016), http://hartresearch.com/wp-content/uploads/2016/10/Fast-Food-Worker-Survey-Memo-10-5-16.pdf.
[x] Supra note 1.
[xi] Dana Kravetz, “Indirect Control”—New NLRB Joint Employer Rule Headed for Appeal, M&R Blog (April 28, 2015), http://www.mrllp.com/blog-indirect-control-new-nlrb-joint-employer-rule-headed-for-appeal.
[xii] Patterson v. Domino’s Pizza, 333 P.3d 723, 738-39 (Cal. 2014).
[xiii] Id. at 740.
[xv] What We Do, Nat’l. Lab. Rel. Bd., https://www.nlrb.gov/what-we-do (last visited Nov. 13, 2016).
[xvi] Browning-Ferris Industries of Cal., Inc., 362 N.L.R.B. No. 186 (Aug. 27, 2015).
[xvii] See Evans v. McDonald’s Corp., 936 F.2d 1087 (10th Cir. 1991) (holding that McDonald’s Corporation could not be defined as the plaintiff’s employer due to franchise agreements separating McDonald’s Corporation from plaintiff’s actual employer); Dotson v. McDonald’s Corp., 1998 U.S. Dist. LEXIS 4646 (N.D. Ill. 1998) (holding McDonald’s Corporation could not be liable under a theory of apparent agency because plaintiff provided no authority to support the theory).
[xviii] Supra note 16.
[xix] Franchise Disclosure Document, 6-8, McDonald’s, available at: http://www.bluemaumau.org/sites/default/files/.
MCD%202013%20FDD.pdf (last visited Nov. 13, 2016).
[xx] Supra note 14.
[xxi] Franchise Disclosure Document, 10.
[xxii] Standards of Business Conduct, 18, McDonald’s, available at https://www.mcdonalds.com/dam/About.
McDonalds/Investors/9497_SBC_International_EN-US%20v2%20final%20061311.pdf (last visited Nov. 13, 2016).
[xxiii] Alexia Elejalde-Ruiz, Why should McDonald’s be a joint employer? NLRB starts to provide answers, Chicago Tribune (Mar. 10, 2016, 7:23 PM), http://www.chicagotribune.com/business/ct-mcdonalds-labor-case-0311-biz-20160310-story.html.
By: Kiersten Call
The validity of current overtime rules came into question back on March 13, 2014 when President Obama signed a presidential memorandum directing the Department of Labor to modernize overtime protections. Specifically, this memorandum stressed that millions of Americans lack the protections of overtime and even the right to the minimum wage. “Under current law, a salaried worker making as little as $23,660 a year can legally be asked to work more than 40 hours a week with no additional pay. The Obama administration says this violates the intent of the Fair Labor Standards Act.” The Department of Labor has responded with new standards that will become effective on December 1, 2016. However, these standards have not gone without opposition from both businesses and States alike.
The main component to the final rule is that it will raise the salary threshold from $23,660 to $47,476 a year in order to be ineligible for overtime pay. It is estimated that this will give 4.2 million workers overtime protections to which they were not entitled to previously. Additionally, this salary threshold will be evaluated every three years to ensure that it reflects the 40th percentile of weekly earnings of salaried workers. These changes were published on May 23, 2016, which gives businesses six months to become compliant with the new final rule. It is clear that this rule was designed to benefit the average worker by either giving them more free time from working fewer hours or compensating them for the hours they actually work. However, there are limited options for businesses in order to avoid paying employees overtime: 1) businesses can raise the salaries of their workers to comply with the new threshold, or 2) businesses can cut the hours of their employees to be below 40 hours weekly. Not only could this have the adverse effect of businesses returning their salaried employees back to the status of hourly employees, but this also places additional stress on already strained business budgets, as they now need to either hire more employees or pay more for the individuals they currently employ. Overall, the Department of Labor estimates that employers will need spend around $592.7 million to comply with these new regulations.
There has been great controversy over the Department of Labor’s final rule. Numerous businesses have stated that they feel that the drastic change in the salary threshold will only serve to harm businesses that rely on the work of their employees. In response to this, 21 states are planning to sue the Department of Labor to block the final rule claiming it is a clear government overreach. Additionally, there is a bill currently moving through Congress that would stall the overtime changes. The bill—H.R.6094—was introduced, passed by the House of Representatives, and is currently in the Senate awaiting review. This bill would serve to postpone the effective date of the final rule from December 1, 2016 to June 1, 2017. However, despite opposition and current efforts made, the final rule is still set to become effective on December 1, 2016.
By: Shaun David Malone
In the wake of recent events surrounding the shooting of Keith L. Scott in Charlotte, NC, much of the public’s attention has been on the release or access to police camera recordings, whether it be body camera or dash-cam video. On July 11, 2016, prior to Scott’s death, the Governor of North Carolina approved HB972, which became effective on October 1, 2016 as North Carolina General Statute § 132-1.4A. The Statute states that recordings by law enforcement personnel are not public record. Further, the Statute prohibits the release of the recording without a court order. The question becomes why the North Carolina General Assembly would pass a law to require a court order to release police recordings. Other portions of the Statute suggest that the General Assembly was attempting to limit access to police recordings to persons having a specific interest such as those who have legal standing for a claim, like police misconduct, or defense against a criminal charge. For clarity, access to recordings for defense in a criminal matter will be discussed first.
In Brady v. Maryland, the Supreme Court held that it is a violation of due process for the prosecution to suppress evidence favorable to the defendant upon request, where the evidence is material to the defendant’s guilt or punishment. Under § 132-1.4A(f), the new Statute prohibits the release of police recordings without a court order, but also sets out factors to consider when the court determines whether to order the recording’s release. The Statute provides that one of the factors is whether “the person requesting the release is seeking to obtain evidence to determine legal issues in a current or potential court proceeding.” While the Statute affords some discretion to the courts, it is still superseded by the protections afforded in Brady. Therefore, criminal defendants retain the right to access the recording, when that recording contains evidence which is favorable to the defendant and is material to the defendant’s guilt or punishment.
Now for the main point of inquiry, access to the recording in pursuit of claims for police misconduct. As much as §132-1.4A considers obtaining evidence for current or potential legal matters, it also applies to the pursuit of a claim against law enforcement. However, there is one major difference. Since Brady is only applicable in criminal matters, a claimant in North Carolina cannot rely on Brady to obtain access to a recording when pursuing a civil claim against law enforcement officers for misconduct. Therefore, in a civil matter, North Carolina courts have greater discretion in relying on the other factors enumerated in §132-1.4A(g).
By giving a court discretion as to whether to release the recordings under the factors identified under §132-1.4A(g), the General Assembly created the means by which to balance the policy concerns discussed in the legislative history. The concern identified in the legislative history is the balancing of public confidence and trust in law enforcement with transparency, against the rights to privacy of law enforcement and private citizens who may appear in the recordings. The General Assembly furthered its goal in balancing the competing interests by limiting access to the recordings to persons whose image or voice is in the recording and his or her personal representatives as noted in § 132-1.4A(c).
It is the General Assembly’s restriction for recording access, a person whose image or voice appears in the recordings and his or her personal representative, which constitutes a limitation to those with standing. To establish standing, a claimant must demonstrate an actual or imminent invasion of a legally protected interest, which is fairly traceable to the defendant’s actions, and a favorable decision will likely redress the injury. North Carolina courts have also referred to standing as the issue of whether a party has a sufficient stake in the adjudication of a matter. It is important to note that § 132-1.4A(c) does not guarantee standing for a particular claim. However, without appearing in the recording or having a special relationship to a person in the recording, it would be difficult for a claimant to have a sufficient stake in the adjudication of a claim involving the events in a recording.
Therefore, by limiting access to police recordings, it appears that the North Carolina General Assembly is balancing transparency with the privacy rights of persons appearing in the recording. Any access to police recordings is statutorily limited to persons most likely to have a stake in the outcome of a claim arising out of the recording (i.e., persons with standing).
N.C. Gen. Stat. Ann. § 132-1.4A (West 2016)
Brady v. Maryland, 373 U.S. 83, 85-89 (1963)
H.B. 972, 1st. ed., Gen. Assemb., Sess. 2015 (N.C. 2016)
Neuse River Foundation, Inc. v. Smithfield Foods, Inc., 754 S.E.2d 48, 52 (N.C. Ct. App. 2006)
Lee Ray Bergman Real Estate Rentals v. North Carolina Fair Housing Center, 568 S.E.2d 883, 886 (N.C. Ct. App. 2002)
By: Matthew Freeze
Pokémon GO is a game for mobile devices developed by Niantic, Inc. and released across most of the globe in early July, 2016. It is a location-based, augmented-reality video game, which means that it uses the various sensors in a smartphone—specifically the camera and GPS—to display virtual creatures on the phone’s screen.[i] While the game largely centers around this virtual component of catching and training these virtual creatures, there is a real-world component. The game centers on physical activity and requires players to go out into the real world and find physical locations where the virtual creatures are hiding, waiting to be caught by the player. As a result, physical trespass is a latent concern with this and other similar augmented-reality games.[ii]
For perspective, the game was downloaded over 130 million times in the first month after release, which means there are an immense number of people playing this game across the world.[iii] As noted above, the game requires players to go out to real-world locations, which have been pre-populated with these virtual creatures. Typically, the virtual locations coincide with landmarks that are listed in Google Maps.[iv] Random creature sightings, however, can occur in any location that the game’s software identifies. It is these latter locations combined with the vast number of people using the game that present such a thorny issue since so many people are out physically moving about on public and private property.
The question becomes: who will be liable for such trespass?
The clearest answer is that the individuals who commit the actual, physical trespass by entering onto private property will be liable. But what of the landowners themselves? A question remains as to whether they will be liable in those states that recognize the principle of attractive nuisance. This doctrine holds that landowners may be liable for harm suffered by those who are lured onto the property, but who do not have the capacity to appreciate the latent dangers on that property.[v] This largely applies to young children. Technically, a child must be 13 years old to accept the terms and services agreement that accompanies the game, but this simple click does not stop many children under that age from signing up and hitting the streets.[vi] The question may become what role the landowner plays in mitigating the presence of these virtual creatures on their property that can be seen as an enticement to younger children who will seek them out.
The largest and most potentially lucrative question for a claimant will be whether Niantic, the game’s developer, will retain any liability for placing the creatures on private property, albeit in a virtual manner, and thereby generating a nuisance. Niantic has already had its first brush with the courts on this. Jeffrey Marder, a New Jersey resident, filed a class action suit in U.S. District Court for the Northern District of California (where Niantic is headquartered) in late August 2016. Mr. Marder alleged that Niantic generated a nuisance on his New Jersey property by placing virtual creatures at GPS locations within his property lines and enticing game users to come access his property to catch the virtual creatures.[vii] Niantic will likely counter by stating that it is insulated from liability since the Terms of Service agreement and several popups within the game alert the player to not trespass during the use of the game.[viii] Of course, the question of the validity of these “clickwrap” agreements will come into play in any of Niantic’s attempts to shield itself from liability.[ix]
Since Pokémon GO and other augmented-reality games are in their infancy, none of these issues have been fully fleshed out. Given the relative success of Pokémon GO, however, it does not seem as if this style of game is soon to disappear; the issues surrounding these “generated” instances of trespass and nuisance will continue to plague their relative successes.
[i] The Legal Issues Surrounding Pokémon Go, Lawyer 2 Lawyer (Aug. 12, 2016), http://www.lawsitesblog.com/2016/08/podcast-legal-issues-surrounding-pokemon-go.html.
[ii] Denise Johnson, Poking Around Legal Issues Surrounding Pokémon Go, Claims Journal (Jul. 18, 2016), http://www.claimsjournal.com/news/national/2016/07/18/272200.htm.
[iii] Rachel Swatman, Pokémon Go catches five new world records, Guinness World Records (Aug. 10, 2016), http://www.guinnessworldrecords.com/news/2016/8/pokemon-go-catches-five-world-records-439327.
[iv] Sam Prell, Why your church, art, and water towers are Pokemon Go gyms and Pokestops, Games Radar (Jul. 11, 2016), http://www.gamesradar.com/why-your-local-church-and-water-towers-are-pokemon-go-gyms-and-pokestops.
[v] Attractive-Nuisance Doctrine, Black’s Law Dictionary (10th ed. 2014).
[vi] Niantic Labs, Pokémon GO Terms of Service, https://www.nianticlabs.com/terms/pokemongo/en (last visited Sept. 28, 2016).
[vii] Complaint at 1-14, Marder v. Niantic, Inc., No. 4:16-cv-04300 (N.D. Cal. Jul. 29, 2016), http://www.plainsite.org/dockets/3087pyqwy/california-northern-district-court/marderv-niantic-inc–et-al.
[viii] Niantic Labs, supra n6.
[ix] Alison S. Brehm & Cathy D. Lee, “Click Here to Accept the Terms of Service”, 31-WTR Comm. Law. 1, http://www.americanbar.org/publications/communications_lawyer/2015/january/click_here.html.
By: Kiersten Call
The principle of net neutrality embraces the concept that everyone should have access to a free and open internet. Specifically, net neutrality emphasizes that individuals should be able to access all internet content equally and without the threat of Internet service providers discriminating against certain websites or services. This issue is crucial because without net neutrality, there is potential for broadband providers, such as AT&T, Verizon, and Comcast, to prioritize certain Internet traffic. This would impose more fees and poor service for certain online content such as Netflix. The potential issues include higher costs being pushed out to the average internet consumer and less business innovation due to fees making it more expensive to launch new services. The Federal Communications Commission has been a major advocate of upholding net neutrality principles and avoiding these potential issues. However, they have been met with much opposition from broadband providers.
The issue of net neutrality is not a new one to be argued in front of a court. In fact, on June 14, 2016, the United States Court of Appeals for the District of Columbia Circuit upheld the FCC’s Open Internet Rules. However, this was the first real victory for net neutrality among a history of two previous failures. The Federal Communications Commission first attempted to compel broadband providers to adhere to certain open internet practices in Comcast Corp. v. FCC. However, the court decided that there was no authority that authorized these attempted regulations. After this failure, the Federal Communications Commission introduced net neutrality protections in May 2010, which stated that internet service providers could not impose limits on users or block websites. These protections, which were finalized in December 2010, were the first-ever rules adopted to regulate Internet access and promote net neutrality. Weeks after the adoption of these regulations, Verizon Communications filed a federal lawsuit which would ultimately overturn the 2010 regulations. In Verizon v. FCC, the United States Court of Appeals for the District of Columbia Circuit decided that while section 706 of the Telecommunications Act of 1996 did allow for the Commission to enact rules for net neutrality, the classification of broadband services as an information service did not allow for regulations in this instance. In response, the Federal Communications Commission adopted the FCC’s Open Internet rules on February 26, 2015.
These Open Internet rules had three main components. First, they reclassified broadband services as a telecommunications service, subject to carrier regulations under Title II of the Communications Act. Secondly, these rules forbid any regulations that were not necessary to protect consumers. Finally, bright line rules were established banning blocking, throttling, and paid prioritization. In a 2-to-1 decision from a three-judge panel at the United States Court of Appeals for the District of Columbia Circuit, these rules were upheld. While a potential appeal may still be granted, as of now, this decision limits the ability of broadband providers to become gatekeepers of internet users and ensures access to an open internet.
United States Telecom Ass’n v. Fed. Commc’ns Comm’n, 825 F.3d 674, 696 (D.C. Cir. 2016)
By Jennifer Stevens
House Bill 2 (HB2) has been a topic of controversy for weeks in North Carolina. HB2 has been criticized as the “most anti-LGBT bill in the country.” So, what is the big deal about the bill?
First, the bill outraged citizens because it mandated that people use public bathrooms based on the biological sex stated on their birth certificates. Thus, transgender people are now being forced to use restrooms corresponding with the gender they were born, not the gender to which they identify. The only solution for a transgender person is to have the sex listed on their birth certificate to be changed to which they wish to identify. Governor McCory of North Carolina stands behind this bill because he believes that it provides North Carolina citizens new protections. Many people are still asking what “new protections” this bill has brought forward.
Many people are only aware of this LGBT provision of the bill, but there is a much more troubling provision that needs to be brought to everyone’s attention. There is a single sentence in the bill that completely strips the rights of North Carolina workers to pursue a remedy in state court if the worker believed they were fired based on race, gender, religion, or age. The exact language is this, “This Article does not create, and shall not be construed to create or support, a statutory or common law private right of action, and no person may bring any civil action based upon the public policy expressed herein.” As such, any of these claims CANNOT be taken to state court, putting a huge burden on any North Carolina worker. Under federal law, a worker bringing a claim has only 180 days to file a discrimination claim, whereas in state courts, there is a three- year window to file a claim. Also, federal claims are harder to bring and often bring less reward than that of state courts.
This single sentence has taken away a thirty-year practice given by the North Carolina Equal Employment Practices Act. This act applies to businesses with fifteen or more employees and stated that it is against the state’s public policy to discriminate based on “race, religion, color, national origin, age, sex, or handicap.” Traditionally, people who successfully proved discrimination could recover damages under common law.
Whether you agree with the LGBT provision of the bill, it is hard to fathom the rationale behind the discrimination provision. As people are becoming aware of the discrimination provision, protests are slowly coming to light. Recently, Bruce Springsteen cancelled his show in North Carolina because of HB2’s discriminatory provision. Clearly, this is not who North Carolina is, and people need to fight back for the rights of our citizens.
Congress can require pimps to pay restitution to overseas sex-trafficking victims, 11th Circuit says
By William G. Hodge
The Atlanta-based 11th U.S. Circuit Court of Appeals has recently ruled that Congress has the power to require international sex traffickers to pay restitution to their victims for sex-trafficking that occurs overseas.
On March 24th, the federal appeals court convicted pimp Damion St. Patrick Baston when he forced a woman to perform prostitution work for him in Australia, the Daily Business Review reported. Baston was required to pay the woman $400,000 for her work in Australia and $78,000 for her work in the United States.
Baston initially entered the United States illegally with a stolen identity and traveled the world forcing women to prostitute for him. Using advice that he obtained from a book called Pimpology, Baston recruited women that had been sexually abused as children and took any money they earned. Baston also subjected his victims to violence by choking, slapping, and threatening to kill them if they defied him.
During his case, Baston argued that requiring him to pay restitution to his victims exceeds the power granted to Congress through the Foreign Commerce Clause and Due Process Clause. The 11th Circuit Court disagreed. Baston also challenged the sufficiency of evidence regarding whether his conduct was “in or affecting” interstate commerce. However, Baston failed to raise the challenge at the district court level. The court noted that even if the challenge had been made at the district court level and Baston trafficked his victims only in Florida, Baston’s use of cell phones, the Internet, hotels, and buses to facilitate his trafficking was “in commerce.”
Essentially, the court ruled that Congress had a “rational basis” that sex-trafficking by force overseas is part of an economic class of activities that has a substantial effect on commerce between the U.S. and other countries, which expands Congress’ power under the Foreign Commerce Clause.
By: Audrey Henderson
Judge Merrick Garland, age 63, was born in Chicago, Illinois, to parents Cyril and Shirley Garland. Before graduating from high school as valedictorian, he became a member of the Presidential Scholars Program and a National Merit Scholar. After high school, Garland attended Harvard College on scholarship, rising to the top of his class and graduating summa cum laude with bachelor’s degree in Social Studies. He then went on to attend Harvard Law, where he became the editor for the Harvard Law Review. After graduating magna cum laude from Harvard Law, Garland served as a clerk for the well-known Second Circuit Judge Henry Friendly and then subsequently Supreme Court Justice William Brennan. Garland then went into private practice at Arnold & Porter in Washington, D.C. and was named partner after four years in 1985, but moved on to serve as the assistant U.S. attorney for the District of Columbia under President George H.W. Bush. Garland’s service to that office was described by Attorney Jay Stephen, a Republican appointee, as having “dedication, sound judgment, excellent legal ability, a balanced temperament, and the highest ethical and professional standards.”
Garland was later selected as the Deputy Assistant Attorney General for the Criminal Division at the Department of Justice (“DOJ”), and later as the Principal Associate at the DOJ. In these two roles, he oversaw some of the most important federal criminal cases brought by the DOJ. The two most notable and well-known are Garland’s supervision of the prosecution of the Oklahoma City bombing case, as well as the Unabomber case. At the time, Oklahoma Governor Frank Keating, a Republican, stated that Garland “distinguished himself in a situation where he had to lead a highly complicated investigation and make quick decisions during critical times.”
After these 1990s prosecutions, he was nominated to the U.S. Court of Appeals for the District of Columbia in 1995 and was confirmed to the D.C. Circuit with a 76-23 vote by a majority support from both Republicans and Democrats in 1997. He continues to serve on the U.S. Court of Appeals and has been the Chief Judge for over three years now.
Subsequent to the death of Justice Antonin Scalia, President Obama nominated Garland to the Supreme Court of the United States. Garland has built a reputation for himself that speaks wonders. He is known for “playing it straight, and deciding every case based on what the law requires.” Garland has personally stated, “[t]he role of the court is to apply the law to the facts of the case before it – not to legislate, not to arrogate to itself the executive power, not to hand down advisory opinions on the issues of the day.” However, some may describe Garland as “a moderate-to-liberal Justice” and with that comes the possibility that the Supreme Court “would tip to the left on several key issues, like abortion, affirmative action, the death penalty, gun control, campaign spending, immigration ad environmental protection.” This statement, however, may be considered skeptical because only time will tell if Judge Garland is confirmed to the bench, and will even hear these types of cases.
With elections right around the corner, many people were split on whether President Obama should have even made a nomination. Republicans tend to argue that the next President should be the one to make the nomination, while Democrats argue the opposite. However, since President Obama has made a nomination under his constitutional authority, the next issue is whether the Senate should vote to confirm Garland. Given the historical context of the Constitution, more people are likely to think that the Senate should vote now. As stated before, with elections right around the corner, a minority believe that the current Senate should not vote on the nomination no matter how the November elections turn out.
By Ryan Vince
Regardless of whether you support or oppose an increase in the federal minimum wage, human beings need jobs to survive. One factor that already does and will continue to affect the job marketplace is the fast-paced development of artificial intelligence (AI) and robotics. This rapid increase in robotic creation could threaten people’s jobs by eliminating the need to pay wages or a salary: welcome to the “fourth industrial revolution.”
According to several studies, robots could replace nearly half of all jobs that are currently performed by humans in the next ten to fifteen years. One report even suggested that, with today’s technology, it was feasible to replace 45% of jobs right now. While robots cannot wipe out every job performed by humans (yet), advances in automation are rapidly increasing that plausibility. Supposedly, people who occupy positions involving complex human interaction should feel strongly about his or her job security. These jobs include teachers, police officers, or employees in management roles. However, low-skilled and/or low-wage employees who engage in repeated tasks have the highest risk of replacement. Examples of these include cashiers, servers, or assembly line workers. Because a machine can easily replicate these skills, companies may pursue this alternative if there is a financial benefit in doing so.
Companies have already made technological advances in the way they serve customers and patrons. McDonald’s and Panera Bread Co., for example, both use self-service kiosks where customers can make food orders. While both companies continue to employ human cashiers, customers are given the opportunity to place an order without ever seeing a face. Additionally, Hilton Hotels added a robot named, “Connie,” to its workforce. Connie is a 2.5-foot tall robot that assists guests like that of a typical human concierge. Likewise, the CEO of Carl’s Jr. and Hardees, Andy Puzder, has expressed interested in opening up an employee-free restaurant similar to that of the restaurant Eatsa. Mr. Pudzer criticizes the government’s demand for an increase in labor costs and says that he will hire fewer workers if necessary. Despite the CEO’s underlying reason for shifting to a robotic labor force, the shift is nonetheless inevitable.
Low-skilled positions are not the only ones threatened by the increase in technology. According the 46th World Economic Forum (WEF), about 70% of today’s children studying in lower schools will be working in jobs that do not yet exist. Common sense leads one to assume that these “nonexistent” future jobs consist of machine operators and machine technicians. The authors of the WEF study said, “Developments in genetics, artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology . . . are all building on and amplifying one another. This will lay the foundation for a revolution more comprehensive and all-encompassing than anything we have ever seen.” The extent to which employment is to be consumed by technology is definitively unknown. One thing we do know is that machines are already “on the job” in various industries. After reading about the student who 3-D printed his own braces, I would not disagree with the proposition that all jobs could be in jeopardy.
Humans’ collective infatuation with social and digital media plays right into the hands of “job-seeking” robots. People increasingly rely on social networking sites to keep up with friends, family, and colleagues. As these electronic relationships continue to build, so does the disinterest to engage in face-to-face interaction. Based on this logic, today’s consumers are becoming less interested in similar interactions. When continuous interaction with technology becomes a normality, it may also become a preference. The human race is losing its human-to-human interaction, and consequently, our dependence on technology could threaten the way humans making a living.