Archive for the 'Business' Category

Woman Fired From Job For Giving Trump the Middle Finger

Juli Briskman was riding her bicycle on Lowes Island Boulevard mid-afternoon on Oct. 28 when she found herself in the same lane as the motorcade of President Trump, which was leaving the Trump National Golf Course in Sterling, Va. Ms. Briskman made a spontaneous gesture – she pointed her middle finger at the motorcade. News cameras captured the scene and the picture spread across the internet like wildfire.

Briskman had been working for Akima, a federal contractor, as a marketing and communications specialist, for six months. Although few could tell it was her in the picture, Briskman alerted Human Resources to the internet scandal. Her supervisors summoned her to a meeting, where they terminated her. Akima has a company policy against posting lewd and obscene things on social media pages; such postings could harm the company’s reputation as a government contractor.

Briskman’s social media pages do not mention her employer and the incident happened when she on her personal time. Briskman claims another employee had written a profane on Facebook, but was merely reprimanded and forced to delete the post, but allowed to keep his job.

trumpBriskman Doesn’t Have a Case for Sex Discrimination

Virginia, like most states, has “at will” employment laws. At will employment means private-sector employers can fire people for any reason, except for illegal reasons, such as illegal discrimination or breach of contract. If an employer doesn’t approve of a social media posting, the employer has the power to terminate that employee, regardless of how “fair” it is.Briskman could allege that there was illegal sex discrimination here, since her male co-worker was reprimanded for his crude internet posting while Briskman was outright fired. If the employer was biased against women, these incidents would be one manifestation of that bias.

Although Briskman was punished more harshly than her male co-worker, the employer may be within their right to do so as long as the employer has a reasonable explanation. The employer may believe that a personal insult directed at unknown persons is less damaging than insults thrown at public figures, especially since the public figure is famously thin-skinned. The employer might believe giving the middle finger to the President would harm their chances of obtaining a government contract whereas insulting random internet nobodies would not have the same adverse effect. Or the employer might be pro-Trump. The employer doesn’t need a good reason to terminate a worker, only a reasonable alternative to sex discrimination.

Can Employees Use Social Media Without Employers Watching?

So what can employees do if they don’t want their employers to monitor their Facebook or Twitter use? Currently, the law offers very little recourse for employees or potential employees. Remember, default employment law in the U.S. is “at-will.” If an employer doesn’t like Facebook pictures of their employees smoking marijuana, they can terminate an employee for that.

As stated earlier though, there is a line. Employers cannot violate employment laws or their own contracts with employees. Some people use marijuana to alleviate a disability. If a disabled employee asks an employer for a reasonable accommodation, the Americans with Disabilities Act requires the employer to honor it (it’s questionable whether using marijuana would be a reasonable accommodation under the ADA since marijuana is still illegal under federal law).

The second exception is that employers cannot violate their own contracts. Courts have recognized some employer policies as binding contracts between the employer and the employee. If an employer enacts a process of review for social media usage, the employer should follow that process. For example, Akima requires its employees not to post any obscene materials on their social media accounts. However, if Akima social media policy had required that all first time violations result in a warning, then Briskman might have a breach of contract claim. This of course depends on the policy, and how much each party relies on the policy.

Of course, the best revenge is success. After Akima fired Briskman, she received over $30,000 in donations from GoFundMe and 453,678 job offers. One of the biggest benefits of a free-market system is that if an employer is a real dummy about social media use, other employers will be more than happy to scoop up talented workers.

Failure to Pay Rent on Your Furniture Could Mean Jail Time

In Texas and Florida, you might go to jail for failing to pay for your furniture. Rental companies in the state had successfully lobbied for a little-known law that allows rental companies to press criminal charges up to felony theft for failure to pay for a rental property. A dispute over a $3000 bed set can turn into six months of jail time for the debtor. The Texas Tribune and NerdWallet found rent-to-own companies have pressed charges against thousands of customers in Texas and in other states.

Customers faced with these charges are allegedly that they were misled. Their understanding was that the rental agreements were installment payments to purchase the furniture. An agreement to pay $8,000 for a $5,000 piece of furniture, only to return the furniture to the company, is absurd. The companies claim they only want their property back under the terms of the lease.

rental companies21st Century Debtor Prisons?

One of the biggest concerns with public policies like these is whether the agreement is an adhesion contract. Adhesion contracts are standardized agreements that are on a “take it or leave it” basis. Adhesion contracts are often scrutinized because their standardized nature causes people to read them less carefully than other agreements. Rental contracts are often adhesion agreements when it comes to criminal charges. Nobody expects to get arrested because they signed an agreement to rent a chair.  If customers don’t read the agreement and fully understand what it is they are agreeing to, they may find themselves blindsided when the police show up.

The use of criminal charges to collect rental property is unnecessary because all states have civil procedures for debt collection. Civil laws provide a wide array of tools for creditors to get their money back. Lienswage garnishment, and civil suits are available to those who are owed money. Pressing criminal charges is a means of avoiding the usual due process of debt collection.

However, anyone who’s had to collect debt knows that it can be a long and expensive process. To obtain legal remedies like wage garnishment, the creditor must initiate a lawsuit and then convince a judge of one’s position. Calling the police would seem like a cheap and quick solution in comparison.

What is the Future of These Types of Contracts?

On one hand, it’s extreme and abusive to pursue criminal charges just because someone signed a piece of paper. On the other hand, the rental companies do have a right to recover their property and threats of criminal action are probably more effective than the use of liens. One possible solution would be to require rental companies to explicitly inform the customer that they may be subject to criminal charges in the event they fail to pay or return the rental property.

Customers would have notice that these clauses are in their contracts and could decide whether they wanted to do business with a company that would press criminal charges for missing a thousand dollars of property.  If rental companies are forced to disclose potential criminal liability in their agreements, it might increase competition between companies that use the police and those that do not. This would be a win for both customers and the free market.

Bank Regulations are Being Rolled Back, How Will It Impact You?

Have you ever been abused by a major bank? It’s happened to many people. Sometimes, Wells Fargo opens an account you never authorized and charges you fees for it. Other times, Bank of America promises an underwater homeowner it will negotiate with them, only to foreclose on the homeowner behind his back. After the collapse of the housing market in 2007, the new Obama administration introduced a series of regulations to keep banks from engaging in such underhanded practices again. Those regulations are now being reversed.

What Happened?

Last Tuesday night, Congress and Vice President Mike Pence voted to overturn a rule limiting arbitration clauses in contracts between banks and consumers. The 45th President is expected to sign it. Congress has the power to review and overturn any rules made by the Consumer Financial Protection Bureau within 60 days of the Bureau’s creation of a new rule. The Treasury Department recommended overturning the CFPB rule because it would generate 3,000 in class action suits over the next five years, requiring those banks to spend up to $500 million in legal defense. The Treasury Department warned these suits would result in windfalls for plaintiff’s attorneys, but “zero relief” for the consumers who bring these suits.

regulationsThe CFPB’s rule banned the use of arbitration in contracts between banks and customers. Arbitration is favored by most industries because it is cheaper and less time-consuming than going to the court. However, arbitrators have often been accused of being biased, especially when the contract allows the business to decide who the arbitrator will be. Plaintiffs can hardly expect a fair hearing if the arbitrator was chosen by the business they were suing. Parties would not trust a judge handpicked by the very people they were suing, and yet it is somehow okay for this to occur in arbitration. Even worse, arbitration is often binding in these kinds of contracts – in other words, it is next to impossible to appeal a decision made by an arbitrator.

This is not to say that all arbitrations are like this. If two business partners agree to resolve their disputes through arbitration and they each agree on an arbitrator, arbitration would probably be fair and just in that case. However, when arbitration occurs because of an adhesion contract, such as those commonly found between banks and consumers, arbitration looks less like a cheaper option to trial and more like a kangaroo court.

Will This Even Work?

The CFPB’s proposed rule might have been imperfect, but at least it attempted to deter big banks from abusive practices. Although class actions might not be the best vehicle, at least they are a vehicle which consumers had. The CFPB’s report shows that consumers obtain 1,000 times more money from class action suits by plaintiff’s attorneys than through arbitration. Preventing consumer attorneys from representing classes of attorneys might protect banks from such lawsuits, but the individual consumers would be harmed even more if forced into arbitration.

This was evident in the mortgage crisis and recession ten years ago, when the major banks were caught forging documents and engaging in other shady practices to recover from losses in the housing industry. Repealing the CFPB’s rule looks even worse given that the Wells Fargo Account Scandal occurred only last yearand the Equifax scandal came out this summer. When it is obvious that the large banks and private financial institutions have not learned from the mistakes that triggered the worst recession since the Great Depression, repealing financial regulations now is not only foolhardy, but outright dangerous.

Holding Equifax Accountable: Lawsuits and Actions Against Equifax

The Equifax breach has, rightly so, been a heat magnet for the credit reporting giant in the media. It’s also been a lawsuit magnet as the company has faced a tremendous number of suits against it in the last several weeks.

A few days ago, we discussed the common causes of action that may be available to you for holding Equifax legally accountable if you’ve been affected by the recent hacks stealing a tremendous amount of private consumer information–everything from social security numbers to credit card numbers and more. It would hardly be surprising if you can count yourself among this unfortunate number as the hack impacted nearly half the population of the United States.

With this many affected, it’s no surprise that there have been a veritable landslide of lawsuits and actions brought against Equifax recently. From class actions to more specific cases to government action against the credit behemoth–let’s look at the many ways people are trying to hold Equifax accountable for this breach.

equifaxWhat is a Class Action Lawsuit?

Class action lawsuits are common when many would-be plaintiffs have damages which are individually too small to justify the costs of a lawsuit. They are not always easy to bring, having several requirements such as similarly situated plaintiffs before they can be approved. However, with half the nation affected by Equifax’s breach there are a heck of a lot of people with smaller claims. This has led to over 50 different class action lawsuits being leveled against Equifax, some of these lawsuits seek as much as $70B.

These lawsuits primarily deal with the two causes of action we discussed earlier this week–Federal Credit Reporting Act (FCRA) violations and negligence. This is because these can take the individually small claims–especially when it comes to FCRA violations–and combine to make a lawsuit that can support its costs.

However, not all of these class actions deal with FCRA and negligence issues. For instance, one of the lawsuits seeking to be certified as a class action is made up entirely of banks and financial institutions. The lawsuit argues that the breach is forcing these banks to pay for canceling and reissuing credit cards and costing them profits as customers are prevented from or become wary of using credit cards after Equifax’s breach.

What about Private Lawsuits Against Equifax?

Lawsuits brought against Equifax by individuals have covered even more types of legal claims than their class action counterparts.

A lawsuit out of San Jose has targeted Equifax’s offer of a year of free credit monitoring, arguing that the move is designed to transition into paid services. Another lawsuit out of Atlanta is accusing Equifax of securities fraud for knowingly misleading shareholders as to their ability to protect the privacy of consumer data.

Carson Block–best known for alleging fraudulent activity on the part of companies then profiting off short-selling that company as their stock collapses–was himself a victim of the Equifax breach. With his data and social security number stolen, he has sued for $500,000 over negligence and the “stress, nuisance, and annoyance” of dealing with his lost data.

Private persons are not alone in their actions against Equifax. Lawsuits have been brought over the breach by the city of San Francisco and the State of Massachusetts.  These lawsuits seek millions of dollars in civil penalties and restitution for consumers out of the city and state.

The FTC, SEC, and More Taking Official Action

While Massachusetts and San Francisco are bringing lawsuits against Equifax, the Federal Trade Commission (FTC), the Securities and Exchange Commission, the FBI, Congress, the Consumer Federal Protection Bureau, and the Attorney Generals for over 40 states have begun investigations into Equifax and the Equifax breach.

Obviously, each of these investigations will take their own path and most are remaining tight lipped about the actual investigations. For instance, the FTC mentioned that–while it usually does not comment on ongoing investigations whatsoever–it would confirm the existence of an investigation considering the sheer number of people in the U.S. that were impacted by the breach. The FTC investigation will be focusing on Equifax’s security measures and their handling of customer service once the breach was announced.

How Will This Resolve?

With so many lawsuits with so many different fact patterns, it’s obviously extremely hard to predict results. However, at least for class action lawsuits on this sort of issue, there is an unfortunate trend of settling for extremely small individual payouts for members of a class action lawsuit–often settling for free credit monitoring services and nothing more.

Some have predicted that this case will be a bit different. Judges have become more hesitant to sign off on settlements that only provide free credit monitoring–especially since there is a trend for the free credit monitoring provided to transition into proposals for paid services. What’s more, as mentioned in the article earlier this week there has been a move towards courts recognizing a breach itself as a recognizable harm as opposed to requiring that breach to result in actual financial damages. This opens the doors to a sea of new potential plaintiffs.

This is all true, however, we will likely be waiting at least a few years before we see any actual resolution on these cases–especially the class actions. These class action cases need to go through a lot of initial steps which will substantially slow the process. What’s more, given the sheer number of people effected, it will take a truly monumental payout for individual members of a class action to see a substantial recovery. With half the U.S. affected, if Equifax settled for $5B the average harmed consumer could expect to see around $35 if everybody took their share.

Regardless of the end results, it is crucial that we hold companies such as Equifax–companies who hold information capable of ruining somebody financially–accountable for their data security. This can be done by lawsuits targeting their pocket book. However, it needs to also be done at a regulatory level in Congress. Congress actions just days ago, shooting down laws making it harder for companies to insulate against class action lawsuits, have not fit this bill. For now, we can only hope more regulations will be put forward and this time Congress will be more receptive.

Holding Equifax Accountable: Your Potential Causes of Action After the Breach

The Equifax breach has released personal information of nearly half of the population of the United States. 143 million people out of 323 million total have had their personal or financial data exposed. The full repercussions of this breach likely have not been realized and will not be for years to come. This information could lead to identity theft and credit fraud over a decade down the line, a situation one would struggle to link to the original breach.

The breach itself has been all over the news, so many are likely already familiar with the details. However, for those who are not, the Equifax hack has seen the potential theft of social security numbers, addresses, driver’s license numbers, birth dates, and more. Over 200,000 credit card numbers and nearly 200,000 credit dispute details have also been absconded with.

The scale of this breach, accompanied by how dangerous the information that was accessed could be when it comes to identity theft or credit fraud has naturally led to many expressing outrage and fear over the situation. This is only made worse by the fact that it can be very hard to know whether you are among those whose information was accessed or even if you’ve been the victim of fraud using your information. To add to this, Equifax will not necessarily be warning you if you are among those targeted. While they will be notifying the approximately 200,000 whose credit cards were targeted and the 200,000 whose credit dispute documents were accessed, you otherwise are unlikely to be hearing from them.

Some initial steps you can take to protect yourself can include requesting a free credit report (you’re allowed one free request from each of the big three credit reporting companies every year), setting up a credit freeze or fraud alert systems.

However, with so many harmed, many want to know how they can hold Equifax responsible and recover from any harm. Data breach is complicated topic of law that can see substantial variations from state to state. However, there are causes of action which could be available to you based on Equifax’s actions. There are also an enormous number of existing lawsuits and investigations brought to bear of the credit reporting giant. This week we’re going to have two articles looking at how Equifax Equifaxcan and is being held accountable. These articles will deal with both the most common causes of action that you could bring against Equifax–as well as the strengths and weaknesses of those causes of action–and the lawsuits and investigations Equifax is already facing. Today we’ll start with the causes of action you may bring against Equifax, starting with your ability to bring a lawsuit against Equifax in the first place.

Does an Arbitration Clause Prevent Me From Suing?

Early on, as the initial news of the breach broke, it nearly simultaneously broke that signing up for Equifax credit protection services could bar you from suing due to an arbitration clause–a clause requiring legal action against Equifax to be resolved through arbitration as opposed to in the courts. There were also concerns that the Equifax terms of service could prevent class action lawsuits against them altogether. This is no longer an issue.

Equifax itself has said, in the face of extreme criticism, that these terms will not bar lawsuits. The terms have been removed altogether at this point and company has made it clear that the terms do not apply to actions stemming from their data breach. The issue has also led to the Consumer Financial Protection Bureau announcing that it would take steps to prevent arbitration clauses such as these, but Congress has killed these efforts. The vote was finalized just days ago in a very close vote, the deciding vote to break a 50-50 split was cast by Vice-President Pence.

With the ability to bring a real lawsuit available to you, let’s look at the most common causes of action the breach might make available to you–violations of the Federal Credit Reporting Act (FCRA) and negligence.

What is the Federal Credit Reporting Act?

Credit reporting agencies such as Equifax handle an enormous amount of sensitive data. This is why the FCRA was passed in order to require these companies to ensure the accuracy of the data they keep, make that data available to those it relates to, and–most importantly here–keep that data private. A credit reporting agency must only make your information available to those who have a legitimate business purpose for accessing it, such as an employer considering whether to hire somebody or a bank considering whether to offer a loan. They also must correct any inaccuracies in their information if you notify them of an issue. The FCRA further requires that reporting agencies use reasonable procedures (basically industry standard) to protect private information.

Where a company like Equifax fails to do this and you are harmed by their failure, you can generally sue for FCRA violations. Exactly how this is handled can vary from state to state, so your rights may vary depending on where you live. One important trend is in exactly what constitutes a harm under the FCRA. For a long time, you needed to show identity theft caused by a data breach to sue. However, more and more, courts are treating the data breach itself as a harm allowing you to sue. This is not always the case, but is a trend in favor of those hoping to sue Equifax.

These claims can provide up to $1,000 per willful violation of the FCRA and are likely the best course for those who have not experienced–or would have trouble proving–actual fraud or identity theft due to the breach.

Can Be Found Equifax Negligent?

Negligence is, without getting into too deep of an explanation, the breach of a duty where that breach is the actual cause of a harm. There is a duty of reasonable care, the care a reasonable person would take, which everybody owes to everybody under the law. However, certain situations can create additional duties. Equifax certainly had a duty, created by statute, to protect the data of consumers. They knew in July that that there was an issue, but simply allowed consumers to continue accessing and using their website before finally notifying the public of the issue in September. Equifax did not even patch the vulnerability in their website framework for months after it was discovered.

While not a 100% slam dunk, this certainly looks like a breached duty. This means that much of any negligence action against Equifax would boil down to a discussion of causation and damages. Were you actually financially harmed and was the cause of this harm the Equifax breach. For instance, if you could prove that your credit card information was stolen in the breach and then used for rampant credit card fraud you’d likely have a strong case for negligence.

However, that sort of causation and damages can be very tricky to prove. The breach is extremely recent and the sort of information that was stolen could be sold years from now, making it extremely hard to link to Equifax’s breach. What’s more, compared to the sheer number of people affected by the breach, the number who have suffered financial damages due to loss of information is relatively small.

Equifax Breach Has Already Led to an Enormous Number of Lawsuits

As we’ll see later this week, these two causes of action are tip of the iceberg when it comes to Equifax’s problems. While these are the most common causes of action, Equifax’s headaches already range from securities fraud to Federal Trade Commission investigations.

We’ll discuss these lawsuits in the next article. However, they have one important thing in common. They all are holding Equifax accountable for protecting consumer privacy and personal data. If you’ve suspect you’ve been impacted by the breach, it is worth consulting a lawyer to know whether you have a viable cause of action against Equifax. While Congress has refused to prevent companies from limiting their liability in situations such as this in the future, in the immediate present it is worth pursuing a case if you have been harmed by Equifax’s handling of your information. If you have a smaller claim, there are also–as we’ll see later this week–a tremendous number of ongoing class action lawsuits against Equifax which you may wish to join.