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Black Priority Housing: Safe Haven or Return to Separate but Equal?

With most Universities back in session, many college students are settling into their housing, but the months leading up to school may have been riddled with anxiety about student housing.

On-campus housing is offered at most four-year universities. Campus housing is student housing that is owned and controlled by the college campus. It offers several benefits, including an environment where students can meet and befriend one another, on-campus housing (often within walking distance to classes), and may be cheaper than living off-campus.

California State University, Los Angeles (“CSULA”) is the most recent university to offer priority on-campus housing to their African American students. The housing is in response to demands from the campus’ black students who say they experienced insensitive remarks and “macroaggressions” (daily verbal, behavioral, or environmental indignities such as racial slights or insults) from white classmates. University of Connecticut, UC Davis and UC Berkeley already offer similar housing to their black students. Dorm

Proponents of the housing believe students can draw on their common experiences to support one another in black housing. Non-black students are not barred from applying for the housing.

While it is certainly admirable to enact housing regulations in an attempt to make black students feel comfortable on their own campus, the housing can be said to segregate black students. Are CSULA’s good intentions unintentionally contributing to the underlying problem of racism?

History of Segregation

Without going into the details of the horrific way our country treated blacks historically, African Americans have experienced extreme mistreatment, oppression, and inequality based entirely on their race.

In 1896, the pivotal constitutional law case of Plessy v. Ferguson upheld a legal doctrine that would be known as “separate but equal.” Under this doctrine, accommodations for blacks and whites could be separate but were for all intents and purposes supposed to be “equal.” They were not. Blacks had inferior everything – bathrooms, water fountains, schooling, modes of transportation, etc. Things were labeled “blacks” versus “whites” to designate who could use what. It was not a proud time in our history.

It wasn’t until 1954 that the “separate but equal” doctrine was overturned by the Supreme Court case of Brown v. Board of Education. The Court concluded that state laws establishing separate public schools for black and white students was unconstitutional, thereby overturning Plessy v. Ferguson. The case was one of the first acts of the Civil Rights Movement.

We have made great strides since the days of “separate but equal,” going so far as to elect our first African American president in 2008, but we still have a ways to go. Nothing exemplifies the disparity in treatment more than the recent “Black Lives Matter” movement. The movement was created in 2012 in response to Trayvon Martin’s murderer, George Zimmerman, being acquitted for his crime. Since then, numerous African Americans have been killed at the hands of citizen and police who have not been held accountable for their actions.

Will the Housing Stay?

Given the historical context and how many years it took to achieve desegregation, does the CSULA housing revert back to the days of segregation?

Probably not. Themed housing or student communities focusing on cultural identity is not new to college campuses. On-campus housing is offered to students based on their gender. Further, some colleges have “Common Interest Communities,” which provide students the opportunity to live in a space around a common interest, such as a social group, specific major or charity. None of these on-campus housing initiatives have been deemed inappropriate or criticized as a way to foster a culture of segregation within the school.

It is also important to note that CSULA is not the first campus to create black housing for its black students. The housing does not discriminate against peers who are not black, but wish to live in the designated housing. Finally, the housing was a direct result of requests from CSULA’s black students, who felt that some of their white counterparts were acting aggressively toward them.

And we mustn’t forget the case of the freshman African American student, Donald Williams Jr., who was assigned a dormitory suite with seven other suitemates at San Jose State in California. Williams was targeted in a number of hijinks as the only black student in the suite, including his roommates sneaking up behind him to place a U-shaped bike lock around his neck, hanging a Confederate flag in the common room, writing racial slurs on the dry-erase board in the common room, and calling him names such as “three-fifths” and “fraction.” Three of the white roommates were found guilty of a misdemeanor against Williams for bullying, but not for a hate crime.

If CSULA’s housing can prevent bullying or the commission of a hate crime, then they should be welcome at all college campuses.

No Thank You: Trademarking Common Phrases

Thanking your customers seems like a pretty important business practice. After all, what business could exist without them? Citigroup Inc. may have a leg up on the competition, because, according to them, their trademark on the phrase “thankyou” prevents other from using “thank you” or even “thanks” in their marks.

Citibank has had the phrase “thankyou” protected through several different trademarks since 2004. It uses the marks as part of a loyalty and rewards program it offers its customers. On June 2, AT&T started using the term “AT&T thanks” as part of its own rewards program. In response, Citibank filed suit. They argue AT&T’s use will confuse Citibank consumers given how long they’ve been using the “thankyou” mark. They say this is especially true because AT&T and Citibank have credit cards that are branded by both companies.

AT&T has responded to this lawsuit, saying “This may come as a surprise to Citigroup, but the law does not allow one company to own the word ‘thanks’ …we’re going to continue to say thanks to our customers.” This statement is a bit ironic, considering that AT&T recently got a trademark on their “Thanks” and “AT&T Thanks” marketing campaigns. However, understanding how trademarks work may clarify their statements a bit.

Trademarking Miss Manners?

Citibank’s lawsuit claims that the AT&T mark infringes their own “thankyou” mark. They are asking the court to put a stop to AT&T’s marketing campaign and order AT&T to pay them an unspecified amount of damages. At first glance, this looks patently ridiculous. The idea of one company controlling the use of something as basic as saying “thank you” seems impossible. However, the legal realities of the situation may surprise you. Thank You 2

Trademarks provide protection to marks and logos with the goal of preventing others from freeriding on the good will you build around a brand. They can be a word, phrase, symbol, or design that identifies the source of goods or services.

To be clear, trademark doesn’t prevent you from using these phrases in your day to day life. Having a trademark on a word or phrase also doesn’t necessarily lock everybody else out of the mark. A trademark is specific to the genre of product you actually make and the places you actually sell or may sell it.  For instance, there are six different companies that have a trademark on the word “trademark.” However, registering a trademark is not the same as having an enforceable trademark. It’s fairly common for trademarks to be taken to court only to be rendered invalid.

Where a competitor uses an exact replica of your mark, there is a pretty open and shut case of trademark infringement so long as you have registered a valid trademark. On the other hand, when two marks are similar, the trademark infringement analysis gets a bit more complicated. The focus becomes how likely it is that people who would buy your products might confuse the alleged infringer’s products for your own. The more similar the marks are in appearance, and the more similar the products the marks are on, the easier it is to establish confusion.

Another important element in a trademark infringement case is the strength and nature of the infringed mark.   The strength of the mark, how well known the mark is, changes how easily somebody might be confused. In analyzing the nature of a mark, the courts look to how creative it is. A mark that is arbitrarily related to the product it is associated with, or has a totally made up name, would receive the strongest level of protection. A mark that suggests the product would receive a lower level of protection, while a mark that describes the product could only receive protection after the public begins associating the mark with the public. Finally, a mark that actual defines the product gets no protection whatsoever.

Common phrases are not outright barred from receiving protection. In fact, they receive the same analysis that any other mark might—looking at whether they are arbitrary, fanciful, descriptive, or generic in relation to the product they are associated with. This being said, after the Boston Marathon bombing in 2014, the USPTO refused to give trademarks to the phrase “Boston Strong.” The thought process behind this was that it was so commonly used in day to day speech, from so many different sources, that the public couldn’t identify the phrase with one business.

Citibank’s Case

In a rewards program, with the goal of thanking customers, “thankyou” is likely descriptive at best. What’s more, while Citibank has used thank you for many years, it seems unlikely that they are what the average consumer associates with the phrase. What’s more, if the phrase “Boston Strong” was so integrated into the public consciousness as to be ineligible for trademark, then the phrase thank you would almost certainly raise the same issues.

Even if the trademark can receive protection, proving confusion seems extremely difficult here. A large part of a trademark infringement claim is establishing that consumers will confused as to the source of goods. The AT&T mark has “AT&T” right in the name, it seems unlikely somebody would think it’s coming out of Citimark.

However, this is not an open and shut case—despite how ridiculous it seems. The fact that Citigroup’s marks are registered gives them a presumption of validity. In other words, it will be AT&T who needs to prove that the “thankyou” marks are invalid. What’s more, the fact that AT&T and Citigroup have done business together—combining their branding on credit cards—could contribute to a consumer being confused.

Frankly, this case is a silly one. However, the fact that the U.S. Trademark and Patent Office has granted Citimark’s trademarks—and that they have used them for so long—makes this more of an uphill battle for AT&T then you would expect. As this case progresses, it has a chance to create case law redefining how trademark deals with especially common phrases.

ITT Tech’s Sudden Shutdown Brings New Legal Woes

ITT Technical Institute became a household name for many people who remember seeing the commercials on daytime tv during soap operas and daytime talk shows. However, ITT Tech is now becoming known for a business move that is as shocking as anything on the television programs that it once advertised. That move was to abruptly close its educational centers without much, if any, warning.

The for-profit educational juggernaut is now finding itself in legal trouble after suddenly shutting the company doors. Three employees have filed lawsuits against ITT Educational Services, Inc., the company in charge of the ITT Tech educational centers, over the fact that the company failed to provide an adequate warning to its employees before closing.

Under the Worker Adjustment and Retraining Notification (WARN) Act, companies with 100 or more employees are required to provide 60 days notice to their employees in the event of a plant closing that results in a mass layoff. A mass layoff is defined as a layoff of 50 or more employees. ITT

When the details of the WARN Act are applied to the facts of the ITT Tech situation, it does appear that ITT Educational Services, Inc. did owe its laid-off employees a warning. The mass closings of the ITT Tech educational facilities occurring all at once can equivocate to a major plant closing despite occurring at different locations instead of a singular location.

Also, the aggregate number of employees working at the various shuttered educational facilities was around 4100 employees, which means that the shutting down of the ITT Tech facilities did lead to a mass layoff if viewed as a singular action.

ITT’s Defense

However, there are two arguments that ITT Educational Services, Inc. may be able to use to successfully defend itself. First, the company could argue that the closures cannot be treated as a singular closure that triggered a mass layoff because the facilities are located all across the country with many facilities employing less than 50 employees.

Closing several smaller offices rather than one large office has a different impact on a community than if a single location employing several people in that community shuts down without warning. The court can choose to look at each facility closure as a single instance instead of choosing to aggregate all of the closures and employee numbers into a single event. If the court does choose to look at the different closures as unique events, then the number of employees lost at each educational facility may not be enough for the employment loss to count as a mass layoff.

In the event that the court does choose to look at the closures as a single event, ITT Educational Services, Inc. may still be free to argue that it should be exempt  because the closures were a result of an unforeseeable business circumstance. Under the WARN Act, a company is not required to provide a 60-day notice to its employees if an unforeseeable business circumstance is what caused the plant closing.

In the case of an unforeseeable business circumstance, the company only needs to provide as much warning as is reasonably possible. ITT Educational Services, Inc. could potentially argue that the imposition of sanctions by the federal government was an unforeseeable circumstance that made it impossible to continue operations. On its website, ITT Educational Services, Inc. claims that it had no intention of closing the ITT Tech educational services until the sanctions prohibiting it from accepting federal loans were imposed.

Danger Was Foreseeable

However, the company had been evaluated and monitored by the federal government with the threat of sanctions if certain changes were not implemented by a certain date. Also, Corinthian Colleges, a for-profit education company similar to ITT Educational Services, Inc., shut down operations just over a year ago after going through the same evaluation process and being given the same sanctions as ITT Educational Services, Inc. Thus, it could be argued that ITT Educational Services, Inc. should have been able to foresee that they may be put into a position of having to shut down operations shortly after the deadline provided by the government, and should have provided its employees with a warning of a probable closure.

Even with the availability of two possible defenses, it does appear that ITT Educational Services, Inc. may have owed its former employees a 60-day warning for the educational facility closures. If the court does find that the employees were owed a warning, then ITT Educational Services, Inc. will owe its laid-off employees wages and benefits for the amount of time in which they were owed a warning, which would be 60 days in this case. ITT Educational Services, Inc. may owe even more money beyond the wages and benefits if the court determines that the company should have also provided notice  to local governments of the intention to close its educational facilities.

Mass layoff and plant closures have a seriously negative economic impact on local communities when they happen. If a large employer such as ITT Educational Services, Inc. fails to provide an adequate warning about a mass layoff, then the economic impact cannot be mitigated by the former employees finding new employment to replace their former employment with little to no gap between periods of employment.

Thus, it is important to enforce laws such as the WARN Act. If you have recently been laid off suddenly without warning, you may be entitled to back wages under the WARN Act or another federal law.  To find out if you are entitled to such compensation, contact an employment lawyer today.

Government Property Seizures Continue in New Mexico Despite Laws Designed to Prevent Seizures

A recent police seizure in the City of Albuquerque has brought national attention to New Mexico’s law restricting civil asset forfeiture. Last summer, New Mexico enacted legislation restricting civil asset forfeiture to post-convictions only. Nevertheless, it appears local police departments may be slow in implementing the new legislation.

What is Civil Asset Forfeiture?

Civil asset forfeiture is government seizure of property that is connected to a crime. For instance, the federal government or a state government may take a vehicle connected to a DWI or money related to a bank robbery.

Civil forfeiture should not be confused with criminal forfeiture. Under criminal forfeiture laws, property may only be seized after a criminal conviction. In other words, the government must prove the crime charged beyond a reasonable doubt before taking property connected to that crime. Civil forfeiture, on the other hand, does not require a criminal conviction prior to the government’s seizure.  The government need only have a reasonable belief that the property has been used in association with criminal activity. Civil Asset

It is the property that is on trial in civil asset forfeiture cases, not the individual who committed the crime. As such, the property’s owner might not be the person who engaged criminal conduct. In civil forfeiture cases, the property’s owner has the burden of proving that the property was not connected to the underlying crime. Civil forfeiture laws present constitutional problems since property may be seized and held until the property’s owners can prove innocence. Some states have provided protections for innocent third-party owners, but many states have not. States like New Mexico have begun enacting laws prohibiting forfeitures until after criminal convictions.

The Martinez Family’s Story

The Martinez’s story demonstrates the effects of forfeiture laws on innocent third-party property owners. In this case, Ashley Martinez had a mechanic friend test drive her family’s car to diagnose a transmission issue. Unbeknown to Ms. Martinez, her friend’s license had been revoked for a DWI. The two were pulled over by the Albuquerque police and the car was seized under a local civil asset forfeiture ordinance.

Since civil asset forfeiture was banned by New Mexico, it appears that there have been several instances of government seizure under a local DWI ordinance. In November 2015, the Institute for Justice challenged the City of Albuquerque’s continued seizure of vehicles.  The Institute for Justice brought suit in district court on behalf of State Senator Lisa Torraco, an outspoken opponent of civil forfeiture. In May 2016, the court dismissed the case based on standing,a technicality that the Senator was not the proper party to sue. The Institute for Justice is considering appealing the decision and is also exploring other methods to enforce the new forfeiture law.

Will the Institute for Justice be Successful in their Challenge?

Vehicle forfeitures, specifically in the case of DWIs, may be difficult to challenge. The City of Albuquerque argues that the new law does not apply to the local DWI forfeiture ordinance. Albuquerque’s city attorney Jessica Hernandez stated that the “program is a narrowly-tailored nuisance abatement law to protect the public from dangerous, repeat DWI offenders and the vehicles they use.”  Since the law is specifically designed for public safety, the court might allow the DWI ordinance to remain.

Continued Enforcement Problems

As the anti-civil forfeiture trend continues, local governments across the United States will likely face similar enforcement issues. Many local governments rely heavily on revenues from civil forfeitures. Local law enforcement agencies generate hundreds of millions of dollars each year from civil forfeitures. The City of Albuquerque alone has generated over $8.3 million from forfeited assets since 2010. The money provides much-needed revenue for underfunded police programs across the country. As in the case of Albuquerque, local governments would likely find legal loopholes to protect this revenue stream.

Lyft’s Lawsuit: Settling Ride-Share App Employment Status

The ride-share company Lyft has settled a lawsuit which sought to determine whether its drivers were employees or independent contractors to the tune of $27M.  This is double the amount Lyft had initially agreed to after the judge in charge of the case called the initial settlement offer far short of fair compensation. It’s not surprising that Lyft would want to nip this one in the bud as a ruling calling their drivers employees could put them out of business.

Ride-share companies, and on-demand services in general, have taken the world by storm. Companies like Lyft and Uber, while relatively new businesses, are already valued at tens of billions of dollars.  Their success hinges in great part on their business model—a business model that only works if their drivers are independent contractors. The settlement has three important effects for Lyft.

First, they obviously have to pay out a lump sum to the drivers who sued them. Second, the drivers who use the Lyft mobile app agree, under the settlement agreement, to continue to act as independent contractors.  Finally, and possibly most importantly for Lyft, a court will not make a final ruling on the issue of Lyft driver employment status.  To understand why, it’s important to explain both the difference between independent contractors and employees and how it impacts the business model of on-demand apps like Lyft.

Independent Contractors vs. Employees

Independent contractors make contracts with a business to perform a specific type of work, usually for a limited period of time. Employees work under the direct control of an employer, with the employer controlling the terms, conditions, and tasks of the employee.  Independent contractors are not protected by most employment laws—including minimum wage, workers’ compensation, collective bargaining (read unionization) requirements and overtime laws. Employers are also not required to give independent contractors meal breaks, rest periods, or reimbursement for necessary business expenses. Lyft

The tests to determine whether somebody is an employee or independent contractor vary substantially throughout the country and sometimes have as many as 21 different factors to consider. However, the tests all boil down to the same thing—the level of control the potential employer has over the would-be worker.  The tests look to who decides how, when and where a person does their work.

In California, establishing employee status is a two-part process. First, the plaintiff employees must show they provide services for the benefit of their alleged employer.  Once this is shown, they are presumptively employees and the would-be employer must refute their claim by showing, through a 12 factor balancing test, that the person suing is properly treated as an independent contractor.

In support of their being employees, Lyft drivers point to the fact that Lyft can terminate their ability to act as a driver at any time without notice, dictates their pay, driving routes, and even how they behave with the people they pick up. Lyft counters that the employees provide their own cars and materials, make their own hours, and choose which rides to accept (although they are required to accept a certain portion of rides).

The evidence could be considered to lean either way, although Lyft does seem to control a great deal of how their drivers work—if not where or when. However, ambiguity in the facts puts the case in a jury’s hands, as facts need to be clear cut to have a case decided by a judge. This is a terrifying prospect for companies like Lyft, so terrifying that it almost forced a settlement.

The Lyft Settlement

Lyft’s settlement only applies to drivers within California and doesn’t close the door on future lawsuits with a final ruling. California doesn’t even apply the strictest test in the nation in determining independent contractor status, so Lyft may have even more trying litigation in its future.  However, paying out this enormous sum has probably saved Lyft’s business.  It has given them the opportunity to update their employment policies to make their drivers look more like independent contractors—an opportunity that their attorneys have publicly said that Lyft fully intends to take advantage of.

The settlement requires Lyft to remove their ability to deactivate a drivers’ account “for any reason.” Instead, they must have reasons and give notice before deactivating an account. However, this change is just the tip of the iceberg.  Lyft will almost certainly make much more drastic changes to avoid lawsuits like this in the future.  These policies will likely roll out nationwide soon.  What’s more, the policy changes agreed to as part of the settlement are nationwide changes despite the case being restricted to California.

How bad could a ruling that Lyft drivers are employees really be, you ask? Surely not worth $27 million. The answer is in how Lyft’s business model works.  The current ride-share business model that apps like Uber and Lyft use is pretty sweet deal for the companies.  They are responsible for none of the expenses of the drivers and simply need to pay to maintain the employees at their San Francisco headquarters while taking a 20-30% cut of every ride.  Their business isn’t the rides themselves but making the connection between driver and rider.  This is an incredibly innovative business model, but also the most successful example of a business shifting costs to its employees in decades.  Were ride-share businesses to have to start treating their drivers like employees, economists believe that their costs would increase by nearly a third.

What’s more, as independent contractors, most of the potential liability for anything that might go wrong rests on the drivers. If the drivers are employees, Lyft or Uber take on that liability, forcing them to be prepared to deal with many more lawsuits and purchase expensive insurance.  They’d essentially lose much of the advantage they have over conventional taxi services.

Ride-Share Lawsuits Going Forward

Lyft is not alone in its struggles. Less than a month ago, the judge in charge of a nearly identical case against Uber rejected a whopping $100 million settlement agreement as unfairly low—arguing that it was less than 10% of what the plaintiff asked for. The settlement included similar changes to policy that the Lyft settlement agreed to enact.  Then, about a week ago, that same judge sent the parties to arbitration to figure out a more equitable settlement.

Uber has previously seen a lawsuit in California which ruled that one specific driver was an employee and not an independent contractor. Uber has appealed the decision. The appeal has yet to be determined, but could lead to actual binding precedent one way or another—either affirming or destroying the rideshare business model.  Florida has similarly ruled a single ex-Uber driver to be an employee.  Five states have concluded that ride-share drivers are independent contractors.  Federal lawsuits are ongoing as to the employment status of ride-share.

On-demand businesses are becoming more common, providing everything from delivering groceries and food to butlers and maids. All of these companies could be in hot water once a final case ruling comes out on the issue of on-demand employee status.  It’s unlikely these companies will be able to settle away a decision on employee status forever.  Eventually, and probably soon, on-demand apps will either be in the clear or scrambling to find a new business model.