Employment Law – Media Tech Law

Yet Again with the Unpaid Interns? Fox Searchlight, Hearst, Conde Nast … News from the Unpaid Internship Beat

Posted August 13, 2013 by Marisa Johnson 0

In June, a ruling from a Federal court in New York, (Glatt v. Fox Searchlight Pictures Inc., S.D.N.Y., No. 11-06784, 6/11/13), made headlines when it determined that unpaid interns were entitled to back pay for their services in connection with the production of various films, including “Black Swan” and “500 Days of Summer.” This case ignited conversation across many industries that have come to rely on unpaid internships, but the decision did not herald a change in the law so much as reiterate the US Department of Labor’s standards for internships, which the court said were essentially identical to New York State’s.

If nothing else, the Glatt case should serve as a reminder to businesses to take care in structuring internship programs. Using the free labor of non-student adults for regular employee functions is a particularly dangerous practice, as Fox Searchlight found out.

Employers Should Not Assume IP Assignments are Valid, and Employees Should Take Care to Protect Previously Created IP

Posted April 29, 2013 by Andrew Mirsky 0

An interesting IP assignment and employment case comes out of Wyoming. Yes, you heard that right, Wyoming. A nice summary of the issue was given by William Lenz and Jessica Rissman Cohen:

It is a common misconception that an employer automatically owns all rights to the patents invented by its employees. The general rule is that, in the absence of an agreement to the contrary, an invention and any patents covering that invention belong to the employee/inventor. (emphasis added)

And that’s why employers often require new employees to sign “Inventions Agreements”, or similar agreements under various names such as “Assignment of Intellectual Property” or “Proprietary Rights Ownership Agreement”, the purpose of all of which is the same: To remove any ambiguity as to ownership of intellectual property created during the employment relationship.

To be clear, this an intellectual property problem unique to patents. Copyrights, for example, are deemed automatically “work made for hire” when created under an employment relationship, even in the absence of an IP assignment agreement such as those mentioned above. Indeed, Section 101 of the Copyright Act expressly defines a “work made for hire” as “a work prepared by an employee within the scope of his or her employment. Although this being the law and lawyers being lawyers, there are cases challenging whether an employee is in fact an “employee”, and by extension challenging whether an individual’s work is a “work made for hire” in the absence of an assignment agreement. Community for Creative Non-Violence v. Reed, 490 U.S. 730 (1989).

Contract Offers: You Receive an Offer, and You Propose Changes to the Offer. What Then?

Posted April 3, 2013 by Andrew Mirsky 0

Here’s an interesting question (at least interesting to me): When does a response to an offer constitute a counteroffer? And if it does constitute a counteroffer, so what? Does that counteroffer make the agreement binding or is it simply a rejection of the original offer? In other words, is the counteroffer simply an offer for an entirely new contract?

This comes up frequently in employment situations, where for example a company might offer a severance package to an employee, and the employee might respond by asking for more money or other different terms. Obviously, if the employee outright rejects the employer’s offer, that’s an easy case where the offer is dead. But often that’s not what happens. Instead, what often happens is that the employer offers a month or so of severance compensation, and the employee responds by asking for health care coverage as well. Or asks for a letter of reference, or a mutual agreement of non-disparagement. Or, for another couple of months of pay.

Employee Wage Theft Protection, Notice, Employee Anti-Retaliation and NLRA

Posted April 16, 2012 by Andrew Mirsky 0

Last year, effective for 2012, New York State enacted the “Wage Theft Protection Act”, amending wage notice requirements and establishing penalties for failing to comply with the new rules. The Act expands on ways workers must be notified of wages through wage statements while creating additional protections for workers against retaliation for expressing concerns about working conditions.

Wage Notice Requirements

Starting with 2012, the Act requires that employees must be given a pay notice between January 1 and February 1 of each year or at any time a worker’s wages change. If an employee is hired after February 1, he or she must still be given notice upon hire as well as the annual notice with other employees.

Notices must provide the following information: An employee’s wage, including the rate of wage including the hour, shift, day, week, salary and frequency of payment. Additionally, the notice must include allowances and whether or not allowances are included in pay, for example tips, meals and other accommodations. Lastly, the employer’s name, address, telephone number and other reasonably appropriate information must be included in notices.

Employer Tries to Enforce Noncompete, Virginia Says “No Way”!

Posted February 27, 2012 by Andrew Mirsky 0

This past November, the Virginia Supreme Court overruled a 1989 opinion on the wording of non-compete clauses. In Home Paramount Pest Control v. Shaffer, the court held Home Paramount’s non-compete clause to be too broad, thus reversing a 22-year old decision in which the same court had upheld the same employer’s almost identical language.

Justin Shaffer, the defendant in Home Paramount Pest Control, signed an employment agreement in connection with his hiring by the pest control company in January 2009. The agreement contained a non-competition clause forbidding Shaffer for two years from engaging in a pest control business in any area that he had worked as an employee of Home Paramount, specifically:

The employee will not engage directly or indirectly or concern himself/herself in any manner whatsoever in the carrying on or conducting the business of exterminating, pest control, termite control and/or fumigation services … in any city, cities, county or counties in the state(s) in which the Employee works and/or in which the employee was assigned during the two (2) years from and after the date upon which he/she shall cease for any reason whatsoever to be an employee of [Home Paramount].

Shaffer resigned from Home Paramount in July 2009, and soon thereafter began work at a competing pest control business. Home Paramount then filed a complaint against Shaffer claiming he had violated his non-compete clause. Shaffer responded by filing a plea contending that the provision was legally overbroad and therefore unenforceable. The circuit court of Fairfax County ruled in favor of Shaffer, holding that the provision was indeed overbroad and therefore unenforceable. On appeal, the Virginia Supreme Court affirmed.

Does Demand Media Really “Suck”? Fair Use and Freedom to Bash Your Boss

Posted August 3, 2011 by Kate Tummarello 0

Kate Tummarello is a Research and Social Media Intern with Mirsky & Company and a reporter at Roll Call/Congressional Quarterly. Follow Kate on Twitter @ktummarello. Andrew Mirsky of Mirsky & Company contributed to this post.

Gone are the days of bashing your boss in the breakroom. Now, colleagues gather online to anonymously air their grievances. A group of disgruntled Demand Media, Inc. employees did just that with their website DemandStudiosSucks.com. Then Demand Media struck back.

Late last month, attorneys for Demand Media, a content production company whose properties include eHow, LIVESTRONG.com, Cracked.com, typeF.com, Trails.com and GolfLink, sent a letter to DemandStudiosSucks.com asking it to remove content that had been copyrighted by Demand Media.

The media company accused the people behind this censorious website of creating and maintaining “a forum in which users can, and do, post and misuse Demand Media’s trademark, copyrighted material, including confidential and proprietary copy editing tests.” The letter also referenced “an internal presentation regarding the company’s business plans”, published without permission on DemandStudiosSucks.com.

Immediately, of course, the letter was posted on DemandStudiosSucks.com.

The next day, a user named “Partick O’Doare,” who has posted the majority of the content on the site, published an open letter addressing the claims made by Demand Media’s attorneys. Although the website removed the content addressed in the letter, O’Doare explained that the site’s creators had not acknowledged any infringement in removing the content.

Instead, those behind the website claimed that their use of the Demand Media content fell under fair use guidelines, specifically protections for commentary and criticism. “Let’s be honest,” the open letter says, “if ever there was a case of unequivocal fair use, this would be it.” A statement which should raise flags to anyone who previously felt similarly.

Fair use is a defense to a claim of copyright infringement, but not other claims. A fair use argument cannot simply succeed on its merits where other legal rights are violated. Context matters. So, for example, as seen in some Facebook “suck site” cases, fair use will not protect against a claim of defamation. Employees who publish company trade secrets and other proprietary information cannot rely on fair use to defend against claims of violations of corporate and employment law.

O’Daire’s letter proudly boasts that the voices behind DemandStudiosSucks.com were fully prepared to defend themselves, citing the fair use cases Lenz v. Universal Music Corp. and Online Policy Group v. Diebold, Inc.

Innovation is Collaborative: What about Noncompetes?

Posted February 25, 2011 by Andrew Mirsky 0

In a recent podcast, Neal Seth and I discussed protection of ideas, focusing particularly on the problem where someone has a business plan, a concept, a script, or really just an idea for doing something. They want to pursue it somehow, but they’re worried that sharing it with anybody will open them up to all sorts of problems.

What’s the solution? There’s always the most traditional and perhaps the most primitive solution: Lock up the idea. Meaning: Do everything you can to make sure that anything that anyone does for you as a developer, contractor, employee, business partner, vendor or whatever is owned by you or your new company.

UMissouri Claims Rights to Student’s iPhone App – then Doesn’t

Posted January 25, 2011 by Andrew Mirsky 0

The Associated Press reported yesterday about a University of Missouri student who invented an iPhone app in a class, then was successful in generating more than 250,000 downloads of the app, and finally was contacted by lawyers for the University demanding a 25% royalty on all earnings from the app.

According to the AP, the student, Tony Brown, was also given the celebrity treatment by Apple and wooed for technology jobs by Google and other companies.

Ultimately, Missouri backed down, but not before overhauling the University’s technology transfer policies, at least as they relate to student development and ownership of intellectual property. In this case, “Inventions” and copyrights that might be considered “work-for-hire”.

Social Media Policies Violate Federal Labor Law?

Posted December 22, 2010 by Andrew Mirsky 0

A Connecticut company suspended and then fired an employee for making disparaging comments on Facebook about the company and about her supervisor.

Not in dispute is that the employee’s actions violated the company’s social media and other personnel policies, which (among other things) prohibited depicting the company ‘in any way’ on Facebook or other social media sites or from “disparaging” or “discriminatory” “comments when discussing the company or the employee’s superiors” and “co-workers.”

In dispute is whether that social media policy – and the company’s actions in enforcing the policy – violated public policy, in particular Federal labor law. This came into fast relief when the National Labor Relations Board (NLRB) subsequently filed a complaint against the company, charging the company with violations of the employee’s rights under the National Labor Relations Act (NLRA).

Do Teachers Own the Copyright to Course Materials?

Posted February 18, 2010 by Andrew Mirsky 0

Can college and university teachers take their course materials, presentations, notes, slides, PowerPoints, syllabi and other teaching resources with them when they leave their current positions? Can they sell or license these materials to online universities or market them through Amazon?

For a group that tends to dispute everything even a position that would presumably only side in their own interest, academics too must concede the legal ambiguity of the copyright law’s “work for hire” doctrine when applied to the academic setting. What is probably not in dispute is, as one commentator describes it, that “Traditionally, it was presumed that educators owned copyrights to academic work they have authored or created.”

LLCs vs S corps: Income and Tax Differences

Posted January 9, 2010 by Andrew Mirsky 0

LLCs vs S corps: Income and Tax Differences: These income and tax questions are frequently asked when individuals and partners contemplate forming a new company. Basically, am I better off with an S-corp or an LLC? There are several non-financial benefits (which I lean toward) in favor of the LLC over the S-corp, particularly the LLCs structural flexibility. Many articles and blogs have been written about that subject and I will link to some of the good ones later. For now, I wanted to address some of the more ambiguous questions about the two legal entities impacting the entity decision, namely whether the choice makes a basic tax difference for the principal owners.

Earnouts in Sales of Businesses: Risks and Strategies.

Posted January 4, 2010 by Andrew Mirsky 0

You sell your business for cash plus an amount to be determined based on earnings or other performance measurements of the business over the next 1, 2 or several years after the sale. This is an “earnout” and can be a very lucrative upside to a seller. It can also be attractive to a purchaser unable (or unwilling) to fully calculate the value of the business being purchased at the time of sale.

It also has obvious risks, particularly to a seller. Commonly, the earnout involves a seller who will continue to participate in the business after the sale under some sort of employment or consulting arrangement with the new owners. This theoretically gives a seller an ability to have some control over the post-closing success of the business, while giving the purchaser a way to incentivize (and control) the seller’s employment or consulting performance.

MediaTech Law

By MIRSKY & COMPANY, PLLC