Trump International Hotel Faces BIPA Class Action Lawsuit

Late last month, the Trump International Hotel in Chicago became the latest target hit with a class action lawsuit under the Illinois Biometric Information Privacy Act (BIPA).

Gianni Bartucci alleges he and other employees of the luxury downtown Chicago hotel were required to scan their handprints and/or fingerprints each time they clocked in and clock out of a work shift.  But according to Bartucci, the hotel violated BIPA by failing to provide prior written notice and obtain prior written release from employees before doing so.  Bartucci also alleges the hotel failed to have a publicly available retention schedule and destruction guidelines.

Trump International now faces alleged statutory damages of $1,000 for each negligent violation, and $5,000 for each willful/reckless violation.  This means alleged damages between $1,000 and $5,000 each time an employee scanned her or his handprints and/or fingerprints for two (2) to as much as five (5) years.

Takeaway: To help mitigate the risk of a BIPA lawsuit, employers should comply with the following BIPA notice requirements: provide prior written notice to employees that their biometric data is being collected and stored, and the purpose and duration for such uses.  Additionally, employers should obtain a written release from the employees that authorizes such uses, and make public a retention schedule and destruction guidelines that details the timeline (no less than three (3) years from the date of the employee’s last interaction with the company) for the eventual destruction of the employees’ biometric data.

Restarting advertising production? New U.S. Department of Labor’s “joint employer” rule shutdown by NY federal judge

As we head into fall 2020, many advertising companies are beginning – if they have not already done so – to restart media shoots. Just as they did before the pandemic hit, media shoots raise a broad swath of questions on the employment law front. One of the principal issues in this regard is the question of which entity(ies) is considered the talent’s employer.

This is a particularly important issue because of the so-called “joint employer” doctrine, which refers to a situation whereby a worker is deemed employed by more than one entity at the same time. If multiple entities are considered joint employers, they can then generally each be held jointly and severally liable for workplace violations (e.g., discrimination, harassment, retaliation, unpaid wages). The joint employer doctrine is often invoked in the advertising and media space, and can result in unforeseen corporate liability.

To that end, earlier this year, the U.S. Department of Labor (DOL) issued a rule updating its interpretation of the “joint employer” doctrine under federal wage and hour law. On September 8, 2020, however, a New York federal judge struck down a significant portion of the rule. Judge Gregory H. Woods’ 62-page decision delivers a significant blow to businesses that had relied on the business-friendly nature of the DOL’s new rule.

Reed Smith’s New York labor and employment team has prepared an article summarizing this decision and its impact on the business community. Click here to read the entire post on Employment Law Watch. If you have any questions about how this decision impacts your company – particularly as it relates to your use of talent on media shoots – please contact Mark Goldstein at mgoldstein@reedsmith.com or Stacy Marcus at smarcus@reedsmith.com.

Another NY Update: Legislators Pass Protection of Post-Mortem Right of Publicity

The New York State Legislature recently passed a bill that expands the State’s current laws to protect one’s right of publicity after death.  Under current privacy laws in NY, permission is required to use a living individual’s name, voice, or likeness for commercial purposes (i.e., in advertising materials).

While the bill – which awaits signature by Governor Andrew Cuomo – will not change the current law in relation to living individuals, it would create a new right of publicity for the deceased, whose publicity rights (e.g., name, likeness, photograph, voice, and signature) have commercial value at the time of their death or because of their death. Such right would be transferable and descendible.  For example, it could be exercised by the deceased individual’s estate or an individual who owns or has inherited 51% or more of such rights.  Subject to certain enumerated exceptions, the bill would also create liability for the use of “deep fakes” and deceptive use of a deceased performer’s “digital replica” if such use is likely to deceive the public into thinking the use was authorized by the deceased person or its successor (note this last element would only apply to “performers”, which is defined in the bill as a person who lived in NY at the time of death and who was regularly engaged in singing, acting, dancing, or playing a musical instrument). The bill would provide post-mortem rights for forty years after the person’s death.

In order to bring an action under the bill, the deceased must be domiciled in NY at the time of death and must have died at least one hundred and eighty days after the bill becomes law.  To file a lawsuit under the bill, the deceased’s estate must register with the Office of the NY Secretary of State.  Keep in mind that this right is not retroactive, and therefore, the risk of litigation is likely reduced.

Takeaway:  An advertiser should carefully consider the scope of consent it has to use an individual’s publicity rights, including when the individual is deceased.  Rights of publicity are protected under state and common law and some, but not all, states provide for a post-mortem right of publicity.  However, not every state applies its post-mortem publicity right the same way, so the analysis when determining whether permission is needed to use a deceased person’s publicity rights can be complex.  New York’s new bill, if signed by the Governor, would certainly raise new issues (and likely lawsuits) where brands fail to obtain the necessary consent from an estate to use a famous New York celebrity’s publicity rights in advertising where he or she passed away after the New York post-mortem right goes into effect.

Stay up to date on key advertising and marketing law issues and earn valuable CLE

To stay current on key advertising and marketing law issues and earn valuable CLE, we recommend registering for the ANA Law & Public Policy 1-Day Conference, taking place virtually on September 15, 2020 from 11:00 am to 4:00 pm.  If you’re an ANA member client-side marketer, there is no charge for you to attend.  If not, the fees are very reasonable.  That’s an offer you and your colleagues cannot refuse!

The agenda includes:

  • A keynote from FTC Commissioner Noah Joshua Phillips;
  • To Produce of Not to Produce – Production concerns post-COVID with Stacy Marcus of Reed Smith LLP & the Joint Policy Committee and Matt Miller of AICP;
  • Will Three Times Be the Charm? – A discussion of digital accountability with Keri Bruce of Reed Smith LLP and the meaning of the results in recent programmatic report issues by ISBA and PwC;
  • Music to Our Ears – risks in using music on online platforms with Rob Newman of Loeb & Loeb LLP;
  • What’s Happening at the ANA with Dan Jaffe;
  • An Introduction to the Partnership for Responsible Addressable Media (PRAM) with ANA’s Bill Tucker and Stu Ingis of Venable LLP; and
  • A series of 5 minute presentations on key issues with long form videos available on demand from top outside counsel including Amy Mudge, Nikki Bhargava, Hanna Taylor, and Tara Sugiyama Potashnik.

Please click here to view the full agenda and to register.

If you have any questions, please feel free to contact Dan Jaffe at 646.369.4886 or at djaffe@ana.net, Keri Bruce at 212.549.0220 or at kbruce@reedsmith.com, or Doug Wood at 212.549.0377 or at dwood@reedsmith.com.

New York Bill Gives Credit Card Holders 90 Days to Redeem Rewards

The New York Senate recently passed a bill that is expected to give New York residents a 90-day grace period to redeem credit card rewards after their account is changed, canceled, closed, or terminated. The bill will address issues where a cardholder’s account is closed without notice for inactivity, default, or delinquency – in such case, the cardholder may not have the opportunity to redeem his or her credit card rewards. While the bill has passed through the Senate, it is currently awaiting approval from the State’s Assembly.

Most credit card issuers that offer reward programs include terms and conditions regarding point/reward redemption when an account is closed or no longer active. For example, one bank states that points will not expire “as long as your account is open,” but the cardholder will lose all of his or her points if the account status changes or the account is closed for reasons that include delinquency. Under the bill, a notice must be sent to the cardholder within 15 days of the cancellation, closure, termination, or modification of the credit card account. The cardholder will have 90 days to redeem, exchange, or use the rewards.

Takeaway: This bill protects New York State residents from losing the rewards they earned through credit card purchases. Card issuers may be wise to start considering updates to its terms and conditions that give cardholders a grace period to redeem their rewards, otherwise more states may follow New York’s lead. For now, however, cardholders should redeem or transfer their rewards before cancelling or changing their credit card account.

The Latest Celebrity Lawsuits in the CBD and Cannabis Space

Two recent actions involving sellers and marketers of cannabidiol (CBD) and cannabis prove the “wellness” industry is not always so chill.

Clint Eastwood Sues CBD Companies over False Endorsements

In the first action, Clint Eastwood filed two lawsuits in federal court in Los Angeles against CBD companies and marketers, claiming the companies promoted false news articles about Eastwood and used his name and likeness to promote their CBD products. Eastwood seeks “millions of dollars” in damages, with claims including false endorsement, defamation, trademark infringement, and false light invasion of privacy.

The first lawsuit accuses several CBD makers of using fake quotes from Eastwood, claiming he was stepping away from the movie business to spend more time pursuing a career in wellness. Eastwood also claims the companies used false headlines for promotional purposes, including false statements that large pharmaceutical companies were “in outrage” over Eastwood’s CBD products.

In one example from the complaint, Eastwood purported that the companies spread a false article with the headline “Breaking News: Clint Eastwood Exposes Shocking Secret Today.” The article included links to purchase “Eastwood’s CBD Products” and fake quotes from an interview Eastwood gave on the “Today” show where Eastwood stated that he was leaving the film business because he wanted to do “something bigger than the movies.” According to Eastwood’s attorney, no such interview ever took place. Below are examples from the complaint of the fabricated articles:

In his second lawsuit, Eastwood alleges that online marketers and CBD companies used Eastwood’s name in metatags to drive search traffic and manipulate consumers into thinking he supported the products being sold, while making it easier for consumers to find the defendants’ products online.

Takeaway:  As with any other advertiser, CBD companies must obtain an individual’s consent to use his or her name and likeness to promote its product.  However, even with such consent, in no event should any advertiser use fake quotes or fabricated stories to sell its product or service.

Master P Settles Over Failed Pot Deal

Master P and Privateer Holdings, a cannabis private equity firm, recently settled a lawsuit over claims that Privateer breached its oral agreement to support Master P’s cannabis brand, “Master P’s Trees.”

Under the agreement, the parties would split profits from the distribution of Master P’s Trees, but Privateer would front the cost of the initial batch and cover all marketing costs.  The parties agreed to a July 3, 2017 deadline to launch the product, which would coincide with a music festival performance by Master P.  Privateer failed to meet the deadline and despite the parties’ decision to delay the launch, Privateer pulled out of the agreement later that month.

According to Master P’s 2017 complaint, the failed deal cost him millions in expected profits.  Nearly three years later, the parties have agreed to settle the dispute, and the case was dismissed earlier this month.  Under the settlement, Master P would drop his lawsuit, and Privateer would drop its bid for thousands of dollars in sanctions against Master P for skipping two depositions and using an unauthorized videographer for another one.  There is no large settlement number though.  Instead, neither party will admit fault, and both parties will pay their own attorneys’ fees.

Takeaway:  Not all partnerships are meant to be, but a written agreement governing a potential fallout is always best.  When it comes to partnerships to promote and produce a product within a specified timeframe, not only are key deadlines necessary, but the agreement should indicate remedies in the event the party fails to meet such deadlines.

More resources: Cannabis entities, like all businesses, require sound and strategic legal advice. Reed Smith assisted Drake in the launch of the Cannabis Wellness Company and continues to provide counsel related to all facets of the industry and the law affecting it. Visit our website for more relevant articles and information on our cannabis experience.

A Not-So-American Style: Williams-Sonoma to pay $1M to FTC Over Deceptive “Made in USA” Claims

The FTC recently approved a final consent order against home product and kitchen ware company, Williams-Sonoma, Inc. Under the order (available here), Williams-Sonoma is required to pay $1 million to the FTC in connection with charges that it made false, misleading, or unsubstantiated “Made in USA” claims.

The FTC first announced its compliant in March 2020, alleging Williams-Sonoma made deceptive claims in advertisements that all of its Goldtouch Bakeware products, certain Rejuvanation-branded products, and Pottery Barn Kids and Pottery Barn Teen-branded furniture is all or virtually all made in America. Below are examples from the FTC’s complaint:

Despite Williams-Sonoma’s unqualified claims, the FTC found that such products are wholly imported from outside the US or contain significant imported materials or components.  Therefore, the FTC alleged that such false or unsubstantiated claims about the products’ origin deceived consumers in violation of Section 5 of the FTC Act.

Under the final order, Williams-Sonoma is prohibited from making false or misleading Made in USA claims unless:

  • For unqualified Made in USA claims, Williams-Sonoma must show that (i) the product’s final assembly or processing, as well as all significant processing, takes place in US, and (ii) all or virtually all of each product’s components are made and sourced in the US.
  • For qualified claims, Williams-Sonoma must include disclosures about the extent to which the products contain foreign parts, components, or processing.
  • For claims that a product was assembled in the US, Williams-Sonoma must prove such product was last substantially transformed in the US, its principal assembly takes place in the US, and its US assembly operations are substantial.

Takeaway: While the FTC continues to monitor claims about a product’s US origins, advertisers should note that the FTC recently proposed updates to its “Made in USA” rule. In the future, FTC enforcement actions relating to such Made in USA claims might look a bit different, including the possibility of civil penalties for rule violations.

New Florida Law Gives College Athletes Right to Profit from their Name, Image and Likeness

Last month, Florida Governor Ran DeSantis signed a new bill into law allowing college athletes to be paid for use of their names, images and likenesses. The new law is set to take effect on July 1, 2021 with the hopes that not only will other states follow Florida’s lead, but such state legislation will apply more pressure on the National Collegiate Athletic Association (“NCAA”) to move forward with its proposed changes to allow college athletes to take advantage of these rights.

The new law, SB 646, will allow college athletes to earn compensation for the use of their name, image or likeness “commensurate with market value” by a third party unaffiliated with the athlete’s school. The law also prevents the athlete’s school from restricting the athlete’s right from obtaining agent or attorney representation to negotiate such deals and from revoking or reducing an athlete’s school scholarship as a result of earning compensation or obtaining representation.

The law also contains such provisions as: (i) the athlete’s deal cannot conflict with their school’s own sponsorship contracts, (ii) the athlete must disclose the deal to their school, (iii) the duration of the contract cannot extend beyond the athlete’s participation in the athletic program at their school, and (iv) schools are to conduct a “life skills workshop for a minimum of 5 hours” at the beginning of the athlete’s first and third academic years, covering such information as financial aid, debt management, recommended budget, and time skills management.

Governor DeSantis’ action makes Florida the third state to pass such legislation, with similar laws passed in California and Colorado. However, Florida’s legislation is scheduled to go into effect eighteen months sooner than the others – which are scheduled to take effect January 1, 2023.

Takeaway: As we previously wrote about here, the NCAA Board of Governors announced it would take steps toward allowing college athletes the “opportunity to benefit from the use of their name, image and likeness in a manner consistent with the collegiate model.” In April, the Board of Governors approved rule changes with certain “guardrails” on the new system designed to maintain a clear distinction between college sports and professional leagues. However, the specific rules are not expected to be adopted until January 2021. Florida’s new law signifies the growing unwillingness of many states to wait for the NCAA’s slow moving bureaucracy to make changes in modernizing its decades-old policies by taking matters into their own hands.

Reese Witherspoon and her fashion line Draper James face a privacy class action and breach of contract over ‘free dress’ giveaway

Hollywood movie star Reese Witherspoon and her clothing line, Draper James, LLC, have found themselves the subjects of a public relations debacle, and now, a class action after running a promotion for teachers that has gone horribly wrong.

To read more about the implications of advertising and promotion rules and the impact of the California Consumer Privacy Act, please click here.

Self-Serve TikTok for Small Businesses, Too

In the wake of COVID-19, businesses of all sizes continue to take stock of their spending practices, losses, ongoing threats, and opportunities for revival and growth.  Investment in marketing is ripe for such an evaluation, including advertising mix, production expenses, and return.  In June, 2020, the Interactive Advertising Bureau (IAB) reported that while overall spending on advertising is in decline, digital ad spending continues to grow. These increases were particularly noticeable in social media and digital video.  From an efficiency perspective, this is no surprise.  Digital ads tend to be less expensive to produce, generally cost less to traffic, and are highly targeted.  In many cases, digital ads also meet consumers at their point-of-purchase, i.e. their smart phones.

Digital platforms are quickly responding to the shifting needs and budgets of their advertiser constituents.  In a press release issued on July 8, TikTok announced its launch of an advertising solution geared towards small and mid-size businesses.  The solution begins with a “suite of creative tools,” that allow the ads to reflect the inventive themes and style of the TikTok community.  Presumably, these creative tools will allow advertisements to appear more native to the platform and to interact naturally with user generated content.  Such tools may also help advertisers continue to save on production costs.

Another benefit of the solution is an advertiser’s ability to target new prospective customers.  TikTok allows its advertisers to target its audience using “gender, location, age, interests, and other unique variables” as well as “Custom” and “Lookalike” audiences.  Further, small and mid-size advertisers will be supported with analytical tools and flexible spending options to allow them to understand and respond to their new viewers.

The platform also introduced a global “Back-to-Business” program designed to help small and midsize businesses begin rebuilding in the wake of the global pandemic.  Thus far, TikTok has committed USD $100 Million in ad credits to the program worldwide.  To participate in the program, small and midsize businesses must apply through the platform’s website.  Those accepted can redeem a one-time ad credit of USD $300 that must be used by December 31 of this year.  Participating businesses will also receive a one-to-one ad credit match for additional spending up to USD $2,000.

For advertisers looking for a change, TikTok is meeting small and midsize businesses with open arms and few hurdles.

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