Virginia State Law to GOP Delegates: “Vote Trump or You’re Fired.”

Donald Trump won the Virginia Republican presidential primary on March 1 with 34.7% of the vote, earning him 17 bound delegates of the state’s 49.  Carroll Correll, a Virginia delegate to this year’s Republican National Convention, has recently filed an action against the Virginia Attorney General challenging the constitutionality of Title 24.2 Section 545(D) of the Virginia Code requiring that “delegates and alternates shall be bound to vote on the first ballot at the national convention for the candidate receiving the most votes in the primary.” Although Donald Trump’s margin of victory in Virginia provided him with only 17 bound delegates under party rules, the state law requires all 49 delegates to march to Cleveland unified and cast their votes for Donald Trump on the first round. Any delegate who votes otherwise will be faced with a Class 1 misdemeanor, subjecting them to up to twelve months in prison, a fine up to $2,500, or both.

Correll anticipates on violating Section 545(D) at the Convention by not voting for Donald Trump on the first ballot, because he believes that a vote for Trump would violate his conscience and that a subsequent criminal prosecution would violate his First and Fourteenth Amendment rights.  Due to the time sensitivity of this issue, Correll has moved for the Court to issue a Temporary Restraining Order to prevent the imposition of criminal penalties on delegates at nation party convention who vote for a candidate other than the one who received the most votes in the Virginia presidential primary.  Correll hopes to show that Section 545(D) creates an impermissible constitutional burden on him because it does not serve a narrowly tailored state interest.  The Supreme Court has analyzed this issue in similar cases, tending to find that states have little to no interest in enforcing laws that attempt to bind the vote of delegates to parties’ national conventions.  Correll also appears to have a noticeable interest in freedom of political expression.

This case will likely reignite the debate concerning the constitutional rights afforded to national party delegates as individuals and to what limit they may be restricted under state law.  If delegates from states with provisions similar to Section 545(D) also start to successfully challenge the constitutionality of these sorts of restrictions, the 2016 presidential primary may conclude with a nomination process by delegates with a heightened level of voter-autonomy.  We will need to keep a close eye on how the Court handles the Temporary Restraining Order as an indicator for deciphering what direction this case may take moving forward.

Phil Abbruscato is a law clerk with Berenzweig Leonard and a J.D. candidate at the George Mason University School of Law.

Seth Berenzweig is the managing partner of  Berenzweig Leonard, LLP, a business law firm in the Washington, DC area. He can be reached sberenzweig@BerenzweigLaw.com.

Telecommuting Employees Can Pose Certain Legal Risks For Employers

United Excel Corporation, a Kansas company in the hospital construction business, employed a sales representative to solicit business from hospitals throughout the country.  At some point, the sales representative asked to work out of his home, which was located in Massachusetts.  During the three years that he worked from his Massachusetts home for United Excel, the sales representative never closed any business with hospitals in that state.

After closing a big deal for a hospital located in California, the sales representative got into a dispute over how much commission was owed to him by United Excel.  He sued United Excel in a Massachusetts state court, but the company sought to dismiss the case on the ground that the Massachusetts court had no jurisdiction over the Kansas-based United Excel for a dispute involving a project in California.  From the company’s perspective, the sales representative could well have worked from a home office in Timbuktu, as long as he closed business with hospitals around the United States.  The mere fact that the representative happened to live in a small town in Massachusetts shouldn’t mean that the company could be sued in that town’s courts, United Excel argued.

But a federal appeals court in Massachusetts recently decided that the home office where the sales representative worked was akin to a remote sales office for United Excel.  The court noted that United Excel provided equipment for the sales representative’s home office, and it placed phone calls and sent emails to the sales representative in Massachusetts during his employment tenure. The court said the fact that the sales representative never actually closed a deal for a project located in Massachusetts was not at all determinative, and that his actions in soliciting business all across the country (including Massachusetts) from his home office was enough for that state’s court to have jurisdiction over the employment case.

The key missing ingredient in this case was the fact that United Excel did not have a forum selection clause in its employment agreement with the sales representative dictating where a lawsuit must be filed.  If the agreement had said all disputes must be brought in Kansas where United Excel was headquartered, the Massachusetts case would likely have been dismissed.  All companies, and particularly those who allow employees to work remotely or who otherwise employ people out of state, should strongly consider having a forum selection clause as well as a choice of law provision.

Posted by Declan Leonard, Managing Partner of Berenzweig Leonard, LLP, DLeonard@BerenzweigLaw.com

Under Armour’s Enforcement Tactics: Heavy-Handed or Right on the Money?

Under Armour recently filed a complaint against Armor & Glory, a Christian sportswear company in the District Court of Maryland for trademark infringement. The alleged infringement? Use of the word “Armor” in Armor & Glory’s name. 

Trademark infringement claims are based on the alleged unauthorized use of a unique identifier in connection with goods.  The identifier could be a word, a logo, or even a fictional character like Batman or Mickey Mouse.  In order for an infringement claim to succeed, the claimant has to show that the alleged infringer is using the identifier in a manner likely to confuse the public as to the source of the goods.  In considering the merit of such claims, courts weigh factors like degree of similarity and relatedness of the goods at issue.

In this case, Under Armour’s claim is that the use of “Armor” in Armor & Glory’s name would likely cause “confusion, mistake, and deception” and would “dilute the distinctiveness and further damage and irreparably injure” Under Armor’s brand. Under Armour is calling for Armor & Glory to destroy all products, hand over its domain name and profits, and pay Under Armour’s attorney’s fees and damages of $100,000 or more. Under Armour’s former trademark attorney guarantees that it will be “an expensive and time-consuming legal battle.” 

Over the last year, Under Armor has been taking aggressive aim at a series of companies who include the work “Armor” in their marketing. So far, they’ve sued Body Armor (a sports drink company), Salt Armor (a Florida fishing apparel company), and Ass Armor (a company that produces shock-absorbing snowboarding shorts). Armor & Glory is the latest target.

There are two ways to view Under Amour’s aggressive litigation strategy. One is as a David and Goliath battle between a sportswear empire and a small niche business.  One of the key components in a trademark infringement case is consideration of whether consumers would be so confused that they would conflate the two different companies together. In this case, Armor & Glory specifically markets to a religious audience. They sell shirts with slogans like “Be spiritually attractive” and “Put on God’s armor and receive His glory.” It’s therefore perhaps a bit of a stretch to think that consumers will suddenly believe that Under Armour has added a religious line to its product catalog.

On the other hand, there is the view that Under Armour is simply exercising its rights – and its duties – to protect its intellectual property assets. As attorney Anna Isaacs notes in a recent article, Under Armour is trying to create space for its brand and send a message to would-be freeloaders that if their products tread too close to the line, Under Armour is not afraid to pursue litigation as a means of protecting itself. Furthermore, Under Armour is hardly the only sports apparel company that uses such litigation tactics; Under Armour has itself been sued by Nike and Adidas in the past as part of those companies’ IP protection campaigns. As Ms. Isaacs notes, overprotectiveness is common in the world of sports apparel. A lot of money and research goes into creating product and building reputation. Thus, while going after smaller companies like Armor & Glory may seem heavy-handed and, potentially, dilatory from a financial standpoint, Under Armour’s strategy of aggressively protecting its marks shows that it isn’t afraid stave off those who get too close to its brand.

This litigation-reliant strategy does raise the question of whether there is a better way to protect Under Armour’s intellectual property rights without subjecting smaller companies to the high costs of defense. While it makes sense to litigate against larger companies like Nike and Adidas, a win against a little company like Armor and Glory could be a pyrrhic victory for Under Armour. Such companies are small and sell to such a specialized niche that battling them is unlikely to yield much gain. Yet a willingness to go after even the small fry of the sportswear world certainly demonstrates that Under Armour is not afraid to hold its own, and may make other companies think twice before choosing names and branding campaigns that stray too close to Under Armour’s marks.

Doan Phan is a law clerk with Berenzweig Leonard and a J.D. candidate at the George Mason School of Law.

Hadeed Carpet’s Subpeona Against Yelp Gets Swept Under the Rug

The Virginia Supreme Court made it harder for businesses stung by anonymous social media postings to fight back and get information identifying the people who post online comments.  In Yelp v. Hadeed Carpet Cleaning, the court threw out a Virginia Subpoena and Contempt Order against Yelp after the social media giant refused to turn over documents identifying people who anonymously posted negative social media comments about Hadeed.

In a decision that sidestepped free speech issues presented by going after negative social media commentary, the court concluded that in order to force Yelp to fork over the identifying documents that were stored in San Francisco, Hadeed had to go to a San Francisco court and get a subpoena there to get the documents.  This decision yields a convoluted result, since such a business trying to unmask an anonymous social media purveyor of defamatory online statements needs to go ‘coast to coast’ in order to get a Virginia court to obtain documents in California.  This is not an efficient use of company resources already suffering from false online commentary.  Also, as the dissenting justices pointed out, this result is clearly outdated since companies like Yelp probably have documents electronically available all over the country, and treating these materials like they are sitting in a 1950’s file cabinet seems absurd.

Businesses and executives need to be aware of this decision, and the fact that they can still go after anonymous online social media postings that are false and defamatory.  They just need to go through an extra hoop to get a subpoena that is issued from the jurisdiction where such information is located to get the information identifying who posted false online information.  Companies can still get their day in court to fight false online social media postings, but will have to do so more methodically as they fight back to maintain their online reputations.

Seth Berenzweig is managing and founding partner of Berenzweig Leonard, LLP, and often appears in the national media to discuss breaking business news.

Major Supreme Court Decision Clarifies Compensation for Security Screening

A recent decision from the U.S. Supreme Court could dramatically change the employment landscape on employee compensation for time spent going through security screening and could likely extend to other pre- and post-shift employee activities. The case of Integrity Staffing Solution, Inc., v. Busk involved warehouse employees working at storage and order-filling facilities for Amazon. A number of the company’s hourly paid workers sued Integrity under the Fair Labor Standards Act in response to the company requiring workers to go through security screening before leaving the premises at the end of their shift - a policy designed to deter employee theft of merchandise. The workers claimed that they had to wait sometimes up to twenty-five minutes after their shift to go through the screening. The workers argued that this procedure was a required part of their job, imposed by the company, and that they should therefore be entitled to be paid for time spent going through the screening.

The trial court dismissed the lawsuit for failure to state a claim; however, the 9th Circuit reversed concluding that Integrity had to pay overtime for the screening because this after-work procedure was a job requirement and was for the company’s benefit. The Supreme Court took up the case and in a 9-0 decision reversed the 9th Circuit declaring that such screening procedures were not an “integral” part of the job.

Justice Thomas delivered the opinion and held that for workers to be paid, the activity must be "an intrinsic element" of the job and "one with which the employee cannot dispense if he is to perform his principal activities.” Applying the rule to this case, the Supreme Court ruled that the workers were not hired to go through security screening, but rather to take products off the shelves and package them for shipment for Amazon. In reaching this conclusion, the Court relied on a federal law which exempted employers from liability under the FLSA for "activities which are preliminary to or postliminary to [the] principal activity or activities" employees are required to perform as a condition of employment. Here, and unlike the pre-shift donning of protective gear, Integrity could have eliminated the screenings without in any way affecting the safety or ability of the worker’s to complete their normal tasks.

There are a couple big takeaways employers can glean from this ruling: First, the Supreme Court explicitly held that an activity is not compensable simply because it is required by the employer. Rather, a court’s focus is on whether the activity in question is related to the employee’s principal duties he or she is employed to perform. Also, the Court held that an activity is not compensable simply because it is for the benefit of the employer. Instead, the activity must be “integral and indispensable” to the employee’s productive work. Furthermore, as security concerns in the workplace continue to grow, this decision may have the practical effect of more employers beginning to conduct security screenings at the end of the workday. This decision may also very well extend to other preliminary and postliminary employment activities such as time spent on bag checks, logging into the company network, changing clothes, or locking up the office as long as the employer can show that the activity is not an “integral and indespensible” activity and one “with which the employee cannot dispense if he is to perform his principal activities.” Ultimately, this decision is a major victory for employers that provides much needed clarity to the issue of whether security screening is compensable at a time when such procedures are becoming more and more prevalent in the workplace in an effort to promote security and cut down on employee theft.

Nick Johnson is an attorney with Washington, DC business law firm, Berenzweig Leonard. He can be reached at njohnson@BerenzweigLaw.com. 

Sandwich Secrets “They” Don’t Want You to Know About: Have Non-Competes Gone Too Far?

Litigation over non-compete provisions continues to make up a large segment of the lawsuits arising out of the employer-employee relationship, and that trend does not appear to be reversing itself any time soon. Some companies are relentless in their quest to gain an edge over the competition, and many are doing so in the name of protecting legitimate business interests by requiring all new employees—in some instances, even lower-level workers making the minimum wage—to sign non-compete agreements.

Jimmy John’s, the popular sandwich shop chain with over 2,000 locations, now requires all employees to sign non-compete agreements that prohibits them from taking a large number of jobs during and for a period of two years following their employment. Typically reserved for executives, managers, and other high-level employees possessing sensitive business information, non-compete provisions are designed to prevent employees of one company from jumping to an industry competitor and divulging their insider information. At Jimmy John’s however, the non-compete agreements extend to low-wage sandwich makers and delivery drivers as well—employees who are several steps removed from the corporate decision-making process and are unlikely to have any sensitive business information that would be of value to an industry competitor.

The extremely broad non-compete by Jimmy John’s would prevent employees from working for “any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located within three (3) miles of either [the Jimmy John’s location they are working at] or any such other Jimmy John’s Sandwich Shop.” Because Jimmy John’s operates over 2,000 locations in 44 states and the District of Columbia, the blackout area in which a former Jimmy John’s employee would be prohibited from working for any business that sells sandwiches covers over 6,000 square miles in many of the country’s largest metropolitan areas—even if that employee did nothing but make sandwiches while working there.

Individual Jimmy John’s franchisees do have the option of not requiring their own employees to sign the non-compete agreement, and it remains to be seen whether Jimmy John’s will seek to enforce the provision against former employees. The non-compete does not appear to have been challenged yet, but would probably not be enforceable in Virginia courts. Compared to existing Virginia non-compete law, the Jimmy John’s non-compete is arguably overbroad in terms of timing (2 years), geographic scope (within 3 miles of any Jimmy John’s nationwide), in its definition of a “competitor” (any business deriving 10% of its revenue from selling sandwiches), and in its applicability to all company employees (regardless of whether they have legitimate business information to protect). While the provision would likely be struck down in Virginia courts, the very fact of its existence suggests that we won’t be seeing a downturn in non-compete litigation any time soon.

Although prospective Jimmy John’s employees may be put off by the overbreadth of these non-competes, we expect that some courts, especially those in Virginia, will find these provisions equally hard to swallow.

Frank Gulino is an associate attorney at Berenzweig Leonard.  He can be reached at FGulino@BerenzweigLaw.com.

Courts Embrace the Use of GPS Evidence

We’ve all used GPS technology to make life easier. Whether in our cars or on our phones, Global Positioning System technology allows us to pinpoint our location on a map and track where we’ve been. Now, in addition to having already replaced maps, GPS may be replacing expert witnesses in some circumstances.

In cases where a disputed fact concerns the location of a person or vehicle at a particular time, expert testimony was necessary. Now, however, the U.S. Court of Appeals for the Eighth Circuit has ruled that because of GPS technology’s intrinsic accuracy, satellite data can be used to determine location in litigation. In the case before that Court, a bank teller placed a GPS tracking device in the stack of bills demanded by a bank robber. Following the tracking device, police apprehended a man fitting the robber’s description, located the cash that had been stolen from the bank, found items of clothing resembling those worn during the robbery, and located the vehicle that the robber had used to flee the bank. Despite the defendant’s objection to the admission of GPS tracking data into evidence, the trial court not only admitted the data, but took judicial notice of its reliability and accuracy. The Eighth Circuit affirmed the trial court’s decision.

Because judicial notice allows a court to accept as a true a fact that is so well-known or authoritatively tested that it cannot reasonably be doubted, the fact that federal courts have begun to take judicial notice of the accuracy of GPS tracking data is an important step for plaintiffs and alarming for defendants. While some critics of this decision point to the fact that GPS signals can be lost in buildings or tunnels, and individual tracking devices may be unreliable, others assert that even where a tracking device is reliable, it may pose serious constitutional concerns, raising Fourth Amendment questions.

Parties litigating cases that involve GPS evidence shouldn’t simply rely on the fact that it will be admissible no matter what, however. Especially in bigger cases, where the parties have the resources to do a thorough job, parties should be prepared to address not only the accuracy of GPS in general, but the accuracy of the particular device used in the situation.

Frank Gulino is an associate attorney at Berenzweig Leonard.  He can be reached at fgulino@berenzweiglaw.com.