Diana Uhimov, February 12, 2014.

After an eight-year battle, Google recently prevailed in a copyright infringement case brought against it by the Authors Guild, in Authors Guild v. Google. Second Circuit Court of Appeals Judge Denny Chin approved Google’s use of its digital book library, which is available to the general public for searching in an online database. Since 2004, Google has scanned more than 20 million books, making excerpts of text viewable online, under agreements with several research libraries to digitize their collections as part of its Google Books project. Authors Guild sued Google because it failed to obtain permission from the copyright holders. However, the court dismissed the case on the basis that Google’s use of the material was fair.

The U.S. Copyright Act grants copyright holders the exclusive right to reproduce, create new versions, distribute, perform, and digitally transmit performance of the work publicly. But these rights are not absolute. One limit on the exclusive rights of copyright holders is the fair use doctrine. This doctrine permits the fair use of copyrighted works in order to further the objective of copyright law of promoting science and the arts. Copyright protection extends to the creator’s original manner of expression, rather than the particular ideas or facts conveyed, in order to incentivize creation, while preserving important information for the public domain.

The fair use defense has gained traction with the rise of digital media. It was raised, without success, in file sharing cases such as A&M Records v. Napster and Metro-Goldwyn-Mayer Studios v. Grokster. File sharing occurs when software connects users to a network that enables them search for shared files on the computers of other users on the network. Desired files can then be downloaded by network members. Now, however, the defense has been strengthened for online content providers.  The Google ruling has effectively sanctioned other results that are displayed in a Google search, including images and news, and also invites competition to the market. According to James Grimmelmann, a University of Maryland intellectual property law professor, this opinion means that users are within the bounds of the law provided that they are not revealing to viewers all of the copyright-protected content, but merely show where to find content or state what you learn about it. This is also a win for libraries and scholars, who staunchly supported Google Books by intervening in the case on its behalf.

Nonetheless, it is important to note that whether or not an action constitutes fair use under copyright law remains a fact-specific inquiry. Several commonly mistaken beliefs about fair use can give rise to user liability, such as the idea that taking a particular number of words from copyrighted works, or that using the works without financial gain, constitutes fair use. In fact, courts always evaluate the following four factors to determine whether the use of a work is permissible under the fair use defense:

1. Purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2. Nature of the copyrighted work;

3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole;

4. Effect of the use upon the potential market for or value of the copyrighted work.

The first factor is considered to be central to the fair use inquiry. Key to Judge Chin’s finding that Google’s digital library constitutes fair use was that its digitization was “highly transformative,” meaning that it added something beneficial or used the works differently, by offering an efficient way to find books and making them accessible to a wider audience. Chin acknowledged that Google benefits commercially from its use of books by increasing traffic to its sites, but since it does not profit directly from the books, he found that the first factor weighed strongly in favor of fair use. Generally, the commercial use of copyrighted works tends to preclude a finding of fair use. But if a work is considered transformative, fair use has been found even where an alleged infringer profited from unlicensed use. Another recent Second Circuit case, Cariou v. Prince, found fair use despite commercialization of the work, when it held that 25 of 30 photographs the defendant modified were transformative, giving Cariou’s photos a new expression, and utilizing new aesthetics with distinct creative results.

The second factor, which is rarely determinative, favored a finding of fair use given that most of the books were non-fiction.  Use of non-factual, creative, or unpublished works weighs against a finding of fair use. The third factor weighed against fair use, but only slightly. Although Google scans the entirety of the books, it limits the portions it displays for each search by employing snippets and blank pages. Finally, the fourth factor supported fair use because, contrary to Authors Guild’s arguments that Google Books would be a “market replacement” for books, it would actually boost sales by providing a new way to discover them.

Hard line copyright advocates may disagree with this decision, but it has bolstered the principle of fair use. As a result, it makes it easier for the public to locate books, while simultaneously demonstrating respect for authors’ rights. The Authors Guild has filed a notice of appeal in this case.

Paula Lopez, February 5, 2014.

Employers in New York City and New Jersey are now required to provide reasonable accommodations to pregnant employees. While State and Federal laws prohibit employers from discriminating against pregnant employees, none of these laws require employers to provide reasonable accommodations. Instead, reasonable accommodations have only been required to the extent that they are available to similarly-situated non-pregnant employees.

Effective January 30, 2014, the New York City Human Rights Law was amended to prohibit discrimination based on pregnancy, childbirth or related medical conditions. And, on January 21, 2014, New Jersey’s Law Against Discrimination was amended to include pregnancy to the list of protected classes and to prohibit employers from treating pregnant employees less favorably than non-pregnant employees with similar work abilities.

The key significance of both laws is that they require employers to provide pregnant employees with reasonable accommodations if the employer knows or should have known of the condition and the reasonable accommodation does not cause the employer an undue hardship. Examples of reasonable accommodations required under the new laws include, among others: periodic breaks for rest, bathroom breaks, additional breaks to facilitate water intake, assistance with manual labor, job restructuring or modified work schedules, temporary transfers to less strenuous or hazardous work, and leave for a period of disability arising from childbirth.

In New York City, employers with four or more employees are covered under the law and independent contractors are counted as employees in determining the applicability of the law. In New Jersey all employers (except Federal employers), regardless of their size, are covered by the law.

In both New York City and New Jersey, if an employer demonstrates that a requested accommodation causes undue hardship on its business, the employer does not have to provide it. The employer bears the burden of proving the existence of an undue hardship.

The laws identify the following factors in determining whether the requested accommodation imposes an undue hardship:

  1. Nature and cost of accommodation;
  2. Overall financial resources of the employer’s particular facility(s) involved in providing the accommodation, taking into account the number of employees, the effect of expenses and resources and/or impact the accommodation will have on the particular facility;
  3. Overall financial resources of the covered employer (including the number of employees, and the number, type and location of its facilities);
  4. The type of operations the employer is engaged in (including composition, structure and functions of the workforce),
  5. The geographic separateness, administrative or fiscal relationship of the facility(s) involved in providing the accommodation and the overall operations of the covered employer; and
  6. The extent to which the requested accommodation would involve eliminating an essential job requirement.  New Jersey only.

In New York City, an employer can also avoid liability under the new law if it can demonstrate that, even with the reasonable accommodation, the employee cannot perform essential job functions.

The New York City amendment includes a notice provision that requires employers to provide employees with written notice of the law. The notice must be provided to new employees at the time of hire and to existing employees within 120 days of the law’s effective date (May 30, 2014). The New York City Commission on Human Rights has created posters in various languages advising pregnant employees of their rights and providing examples of the types of reasonable accommodations that can be requested from their employers. Employers can circulate these posters to satisfy the law’s notice requirement. It is also suggested that employers conspicuously post the notice in areas accessible to their employees. New Jersey’s amendment does not contain a similar notice requirement, but continues to require employers to conspicuously post the New Jersey Division of Civil Rights’ official employment discrimination poster[1] in the workplace.

The amendments to New Jersey and New York City’s ant-discrimination laws significantly expand the protections afforded to pregnant workers by expressly requiring employers to provide reasonable accommodations to all pregnant employees. Consequently, affected employers should review their policies and procedures to ensure compliance with the law.

[1] The poster currently available has not yet been updated to reflect the amendment.

Megan J. Muoio, January 29, 2014.

On January 21, 2014, the Supreme Court heard oral arguments in Harris v. Quinn, a case that could have an impact on the future of public employee unions.  The case involves home-care workers in Illinois who, ten years ago, were permitted to unionize and were classified by the Governor of Illinois as state employees for the purpose of representation by the union.  According to the Attorney General of Illinois, the goal of unionization of the home-care workers was to create a professional group of home-care workers with a uniform standard of training, qualifications, and supervision.  As a result of unionization, the home-care workers also received increased wages and health insurance.

Under the Supreme Court’s 1977 decision in Abood v. Detroit Board of Education, the Supreme Court held that public sector employees may be represented by a single union and that all workers in that sector – whether they chose to join the union or not – would have to pay their fair share of dues to support the union’s collective-bargaining activities regarding benefits and working conditions.  The Abood decision also made clear that, although the non-union members can be compelled to pay dues attributable to collective-bargaining activities, non-union members cannot be compelled to pay dues to support a union’s political or ideological activities.

In Harris, eight home-care workers who object to representation by the Service Employees International Union brought a class action, objecting to the requirement that they pay dues to the union.  The union currently represents more than 20,000 home-care workers in Illinois.  The dues paid by the workers are used by the union in negotiations with the state Medicaid program regarding reimbursement rates and wages paid to the workers.  The home-care workers in Harris argue that the union’s negotiations with the state Medicaid program on their behalf are an attempt to petition the government on a matter of public concern – the wages paid to government employees.  The workers claim that this in a violation of their rights of free association and free speech. The workers are urging the Supreme Court to overrule Abood and eliminate the exclusive representation union for public sector employees.

The State of Illinois rejects the workers’ claim that the union’s negotiations for higher wages or reimbursement amounts from the state Medicaid program are a political act.  Instead, the State urges the Court to find that the union’s activities in this case fall squarely within the purview of the Abood case because the union’s negotiations are related to benefits, working conditions and wages for the workers.  The federal government joined the case in support of the State of Illinois and in defense of Abood.

This is an important case because it is very possible that the Supreme Court will overrule Abood entirely, given the Supreme Court’s prior statements.  The Supreme Court recently indicated its hostility to mandatory dues paid to public sector unions by non-members in Knox v. SEIU in 2010.  In that case, the union sought to impose special dues assessments and dues increases on all workers and argued that Abood required members and non-members alike to pay for these additional amounts .  The Supreme Court disagreed and held that non-members were not required to pay additional amounts to the union absent an affirmative vote by the non-members.  The Knox decision was widely considered to be a substantial blow to the power of public sector unions.  If Abood is overruled in Harris, public sector unions will be further – and perhaps fatally – weakened.

A decision is expected by the end of the term.

Nicholas Fortuna, January 22, 2014.

Arbitration Favored Over Class/Collective Action

Mandatory arbitration agreements in the employment setting gathered steam this year. The U.S. Supreme Court’s decision in American Express Co. v. Italian Colors Restaurant held that mandatory arbitration agreements with explicit waivers of the right to bring a class or collective action are enforceable notwithstanding federal common law and federal statutes to the contrary (i.e. National Labor Relations Act). The Courts of Appeals have universally upheld the waivers and enforced employment arbitration agreements. This is true even when Fair Labor Standards Act or Title VII pattern-or-practice claims are asserted. The ruling in American Express Co. is consistent with the general theme of the Supreme Court’s recent employment law rulings, which in effect limit the number of employment law cases that can be brought in federal courts.

However, 2014 may bring new changes in the battle to push employment claims out of the courts. Amendments are being offered to the Federal Arbitration Act that would prohibit mandatory arbitration provisions in an employment agreement. In California, the state courts are using the doctrine of unconscionability to challenge mandatory arbitration provisions. The approach is that it is unconscionable to force employees to sign an agreement containing a mandatory arbitration provision as a condition of employment. So far this has not been used to great effect. In most cases, the Federal Arbitration Act preempts state law.

Employment Law Class Actions May be at an End After Supreme Court’s Follow-up to Wal-Mart in 2013

The Supreme Court revisited the analysis it used in 2011 Wal-Mart v. Dukes, in which it stated that only those workers who truly have a common legal claim might sue as a group and required rigorous proof showing every single worker suffered from exactly the same bias. The suit involved potentially millions of different employment decisions, which prevented class certification because the claims were not truly common under the Supreme Court’s new stricter standard.

In 2013 the Supreme Court moved forward in its application of commonality to class actions in the antitrust case Comcast Corp. v. Behend. Here, the Court concluded that the class had been improperly certified because the plaintiffs’ expert’s damages model could not establish damages directly linked to the antitrust injury through common proof.  Questions of individual damage calculations will inevitably overwhelm questions common to the class.

Title VII Retaliation Claims

The Supreme Court held in University of Texas, Southwest Medical Center v. Nassar that Title VII retaliation claims must be proven by the stricter standard of but-for the retaliation, the employee would not have been fired. The Court stated that the less restrictive cause standard of mixed motives does not apply. The mixed motive standard is where one of the motives for firing the employee was retaliation, but that was not the only reason. Such an approach, the Court ruled, cannot be used in Title VII cases.

Sexual Harassment

The Supreme Court took on the question of who qualifies as an agent of the employer in an action claiming workplace harassment in the case of Vance v. Ball State University. The Court held that harassment of a nominal supervisor; one that merely oversees the employee’s day-to-day duties cannot subject the employer to liability of acts of harassment.  Unless the supervisor was vested with the authority to hire, fire, promote, or cause a significant change in benefits, he or she would not subject the employer to liability as its agent.

Paula Lopez, January 2, 2014.

After cautiously avoiding a ruling on the issue of the legality of state bans on same-sex marriage it is increasingly likely that the U.S. Supreme Court will be forced to decide this issue.  In Windsor v. United States, decided in June 2013, the Supreme Court struck down a provision of the Defense of Marriage Act (DOMA) barring federal marital benefits to same-sex couples who had been married in states where same-sex marriages are legal. In its ruling, the Court expressly limited its holding to the issue before it and made it clear that the authority of a state to define who can get married was not an issue before the court.

Decided by the Supreme Court at the same time was Hollingsworth v. Perry, which involved an appeal of a federal court’s decision finding California’s “Proposition 8”, a voter-approved initiative banning same-sex marriages, to be unconstitutional.  Rather than address the merits of the federal court’s decision, the Supreme Court found that the proponents of Proposition 8 did not have standing to appeal the federal court’s decision when California officials refused to defend the law.   The practical effect of the ruling was to permit same-sex marriages to resume in California without having to address the state’s authority to define who can marry.

Just before Christmas, in Kitchen v. Herbert, District Court judge Robert J. Shelby struck down Utah’s state constitutional amendment forbidding same-sex marriage as violating the plaintiffs’ Fourteenth Amendment due process rights.  The 14th amendment prohibits any state from making or enforcing laws that infringe on the fundamental rights of its citizens, of which marriage is one.

Judge Shelby’s decision held that the plaintiffs have a fundamental right to marry that extends to their choice of a same-sex spouse.  Given such a right, any state laws passed affecting that right must be narrowly tailored to serve a compelling state interest.   In analyzing the constitutionality of  Utah’s ban on same-sex marriage, Judge Shelby held that the State of Utah’s proffered legitimate government interests of fostering responsible procreation and optimal child-rearing environments, its right to proceed with caution in deciding to extend marriage rights to same-sex couples and to preserve the traditional definition of marriage, are not rationally related to Utah’s prohibition of same-sex marriage.

Following the decision in Kitchen, a record breaking number of same-sex marriages have taken place in Utah.  The State of Utah’s requests for a stay of the district court’s decision pending appeal were denied by Judge Shelby and also by the U.S. Court of Appeals for the 10th Circuit.  Now, the State of Utah has filed a petition with the Supreme Court requesting a stay of Judge Shelby’s ruling. The granting of a stay would permit Utah to stop issuing marriage licenses to same-sex couples until the appeal is decided by the Tenth Circuit.  It is believed by some that by seeking a stay from the Supreme Court, the State of Utah anticipates that the case will ultimately be heard by the Court.  The Supreme Court’s apparent reticence in addressing this issue may be short-lived.