In Los Angeles County, it is not uncommon to see 100 lawsuits filed weekly against employers for alleged unlawful discrimination or retaliation, often both in the same complaint. One could say that unless a business knows and applies the important basics in preventing such expensive and time-consuming claims, it is only a matter of time before that company is hit with one.

Illegal discrimination is essentially an employment decision – for example, hiring, promotion, pay level, or termination -- based improperly on an individual’s physical, cultural or other personal characteristics that are or should be irrelevant to his or her ability to perform. For example, a person’s gender or religion should make no difference when he or she is able to competently perform a job position. See Accommodating Religion in the Workplace and Proving Workplace Discrimination is Now More Difficult in California.

Illegal retaliation is an employment decision – for example, lowering pay, demotion, termination – based improperly on an individual’s sincerely complaining about an allegedly improper workplace practice, including, for example, a safety, health, or discrimination issue. See Barbosa v. IMPCO – Terminating an Employee for Mistakenly Falsifying Time Card Violates Public Policy.

The critical battle line in such cases is very often whether the employer can demonstrate that it actually and sincerely made the adverse decision for a legitimate business reason, not the supposed discriminatory or retaliatory one. A recent California appeals court case illustrates the importance of employers fully documenting the valid reasons for such adverse decisions, lest they are drawn into prolonged, costly and distracting litigation for lack of clear, thorough paperwork. Cheal v. El Camino Hospital (2014) 223 California Appellate Reports, fourth series (Cal.App.4^th) 736

Plaintiff Carol Cheal had worked in El Camino Hospital’s Nutrition Services Department for over 20 years when the hospital fired her in October 2008 at age 61. Her jobs had been preparing menus for patient meals and making sure the correct foods reached the correct patients. Up to and including her performance evaluation in August 2007, plaintiff always received the highest ratings possible. Things changed when the hospital hired Kim Bandelier to supervise all “DietTechs,” including Cheal. Over the ensuing months, Bandelier accused Cheal of numerous errors, issuing two write-ups, including a “final warning” in June, 2008. After several more claimed incidents – none documented in writing – the hospital terminated her on October 10, 2008.

Cheal sued, claiming her performance was up to standards and that the actual reasons for the firing were her supervisor’s hostility towards her age and her complaining to management about alleged improper practices in the hospital. The hospital won an early dismissal of the case when it convinced a Superior Court judge that the hospital could have only fired Cheal for her misconduct. However, in a strong statement that employees must be given the chance to have a jury decide the case if the business’s documentation is not thorough, the Court of Appeal decided in Cheal’s favor and sent the case back for a trial.

The appeals court’s analysis of the hospital’s spotty documentation was extensive. One example underscored the trouble employers can create for themselves for incomplete recordkeeping on work performance. The hospital claimed it was justified in firing Cheal for her failures to enter the first names of patients and to mark dates of birth with a highlighter on progress charts. Cheal admitted she made some mistakes here but declared that she had personal knowledge that other diet staff more frequently failed to follow these procedures but were not warned, written-up or fired. Supervisor Bandelier in turn acknowledged that Cheal had commented on the pervasiveness of these errors by other workers, but asserted she told Cheal that it was up to Cheal to report these mistakes.

The Court of Appeal observed that Bandelier might be creating an “interesting discrepancy” by going out of her way to hunt down “Cheal's errors on her own initiative, while leaving the errors of younger workers to be discovered and reported, if at all, by others.” The court also pointed out that more importantly the hospital was obviously slack in tracking just what was the acceptable norm of performance for diet techs on filling out patient charts and thus could not present any sort of verified data base to show that Cheal was better or worse than any of her co-workers who were not disciplined for such infractions. 223 Cal.App.4^th at 748-749.

The irony is that a company’s asserted legitimate reasons for firing an employment just have to be sincere, they “need not necessarily have been wise or correct,” so long as they were not discriminatory. 223 Cal.App.4^th at 755. The problem – and second irony – sits with inadequate documentation. Since the hospital had not kept thorough records to show that Cheal was undoubtedly failing at her job relative to younger co-workers, this raised the possibility that the hospital was lying about the reasons it fired her. Thus, the appeals court gave Cheal the chance to present her whole case to a jury. 223 Cal.App.4^th at 754-755, 760-761. Any business that is willing to confidently confer upon an American jury the job of objectively evaluating conflicting evidence in a case such as this is courageous in the extreme.

For attorney assistance on proper and necessary documentation of personnel management matters, please contact attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.

In Los Angeles County, it is not uncommon to see 100 lawsuits filed weekly against employers for alleged unlawful discrimination or retaliation, often both in the same complaint. One could say that unless a business knows and applies the important basics in preventing such expensive and time-consuming claims, it is only a matter of time before that company is hit with one.

Illegal discrimination is essentially an employment decision – for example, hiring, promotion, pay level, or termination — based improperly on an individual’s physical, cultural or other personal characteristics that are or should be irrelevant to his or her ability to perform. For example, a person’s gender or religion should make no difference when he or she is able to competently perform a job position. See, e.g.,Accommodating Religion in the Workplace and Proving Workplace Discrimination is Now More Difficult in California.

Illegal retaliation is an employment decision – for example, lowering pay, demotion, termination – based improperly on an individual’s sincerely complaining about an allegedly improper workplace practice, including, for example, a safety, health, or discrimination issue. See, e.g., Barbosa v. IMPCO – Terminating an Employee for Mistakenly Falsifying Time Card Violates Public Policy.

The critical battle line in such cases is very often whether the employer can demonstrate that it actually and sincerely made the adverse decision for a legitimate business reason, not the supposed discriminatory or retaliatory one. A recent California appeals court case illustrates the importance of employers fully documenting the valid reasons for such adverse decisions, lest they are drawn into prolonged, costly and distracting litigation for lack of clear, thorough paperwork. Cheal v. El Camino Hospital (2014) 223 California Appellate Reports, fourth series (Cal.App.4^th) 736

Plaintiff Carol Cheal had worked in El Camino Hospital’s Nutrition Services Department for over 20 years when the hospital fired her in October 2008 at age 61. Her jobs had been preparing menus for patient meals and making sure the correct foods reached the correct patients. Up to and including her performance evaluation in August 2007, plaintiff always received the highest ratings possible. Things changed when the hospital hired Kim Bandelier to supervise all “DietTechs,” including Cheal. Over the ensuing months, Bandelier accused Cheal of numerous errors, issuing two write-ups, including a “final warning” in June, 2008. After several more claimed incidents – none documented in writing – the hospital terminated her on October 10, 2008.

Cheal sued, claiming her performance was up to standards and that the actual reasons for the firing were her supervisor’s hostility towards her age and her complaining to management about alleged improper practices in the hospital. The hospital won an early dismissal of the case when it convinced a Superior Court judge that the hospital could have only fired Cheal for her misconduct. However, in a strong statement that employees must be given the chance to have a jury decide the case if the business’s documentation is not thorough, the Court of Appeal decided in Cheal’s favor and sent the case back for a trial.

The appeals court’s analysis of the hospital’s spotty documentation was extensive. One example underscored the trouble employers can create for themselves for incomplete recordkeeping on work performance. The hospital claimed it was justified in firing Cheal for her failures to enter the first names of patients and to mark dates of birth with a highlighter on progress charts. Cheal admitted she made some mistakes here but declared that she had personal knowledge that other diet staff more frequently failed to follow these procedures but were not warned, written-up or fired. Supervisor Bandelier in turn acknowledged that Cheal had commented on the pervasiveness of these errors by other workers, but asserted she told Cheal that it was up to Cheal to report these mistakes.

The Court of Appeal observed that Bandelier might be creating an “interesting discrepancy” by going out of her way to hunt down “Cheal’s errors on her own initiative, while leaving the errors of younger workers to be discovered and reported, if at all, by others.” The court also pointed out that more importantly the hospital was obviously slack in tracking just what was the acceptable norm of performance for diet techs on filling out patient charts and thus could not present any sort of verified data base to show that Cheal was better or worse than any of her co-workers who were not disciplined for such infractions. 223 Cal.App.4^th at 748-749.

The irony is that a company’s asserted legitimate reasons for firing an employee just have to be sincere, they “need not necessarily have been wise or correct,” so long as they were not discriminatory. 223 Cal.App.4^th at 755. The problem – and second irony – sits with inadequate documentation. Since the hospital had not kept thorough records to show that Cheal was undoubtedly failing at her job relative to younger co-workers, this raised the possibility that the hospital was lying about the reasons it fired her. Thus, the appeals court gave Cheal the chance to present her whole case to a jury. 223 Cal.App.4^th at 754-755, 760-761. Any business that is willing to confidently confer upon an American jury the job of objectively evaluating conflicting evidence in a case such as this is courageous in the extreme.

For attorney assistance on proper and necessary documentation of personnel management matters, please contact attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.

May 28, 2014

California’s controversial Assembly Bill (AB) 2416, the “Wage Theft Recovery Act” continues to make progress through the Legislature. Patterned on a unique Wisconsin law, the Act, if passed, would enable an employee to create a lien upon an employer’s real and personal property for the full amount of any unpaid wages, penalties and interest allegedly owed to that employee. The Assembly passed the bill on May 23, 2014. It was also recently approved, with various proposed revisions, by the Senate Judiciary and is now under consideration by other committees on that side.

Proponents of the bill cite a 2010 “wage theft” study from UCLA that estimated nearly 656,000 workers in Los Angeles County experience at least one pay-based violation of the law every week, supposedly totaling some $26,200,000 weekly. Characterizing even inadvertent underpayments of straight or overtime pay as “theft,” the study concludes the shortfall “robs local communities of … spending and ultimately limits economic growth.” Another 2013 UCLA study concludes that current government lines and procedures are ineffective, with only an estimated 17% of California workers successful in collecting on claims, thus leaving 83% of claimants unpaid (page number 16 of 32).

AB 2416’s sponsors point to Wisconsin’s reported example. The above 2013 UCLA study asserts that since implementing a lien procedure for workers alleging underpayment of wages, 80% of claimants have been paid in part or in full through the collection process. That UCLA study also notes that only a small number of liens are actually filed in Wisconsin every year (about 3,300), suggesting that merely the prospect of liens provides a deterrent to such wage underpayments there.

The opponents to AB 2416 – including the California Chamber of Commerce and at least 60 other state and local commercial associations – obviously do not condone violation of wage laws. They assert the proposal goes too far, harming business’s ability to operate (and thus provide jobs) as liens for alleged, but unproven, wages can cripple the ability to finance and thus grow an enterprise. The opponents also point out that AB 2416 allows wage liens against third party commercial property owners who had no actual control over the employee. They also claim the new law would place significant burdens on the court system and that there are already sufficient protections in place for failure to pay wages.

With the California Chamber taking the lead and terming it a “job killer,” an earlier version of the proposal, AB 1164, died in the Assembly for lack of support this past January. Now over to the Senate, AB 2416 obviously has greater momentum. Its provisions are detailed and of course subject to change as it moves along through committees. We will be tracking the measure along with advocates on both sides of the debate.

May 23, 2014

Thirty-three former minor league ball players seek to pull back the curtain on alleged system-wide violations of minimum wage or overtime. Their federal class action suit challenges Commissioner Bud Selig, the Office of the Commissioner, and, in effect, every baseball team in the country to remedy such practices. If the court agrees, the suit will include thousands of current and former minor league players. See, Senne v. Office of the Commissioner of Baseball, Case No. 3:14-cv-00608-JCS (United States District Court, Northern District of California, San Francisco Division); and “Most minor league ballplayers earn less than half as much money as fast-food workers” U.S.A. Today, March 6, 2014.

The federal Fair Labor Standards Act and the laws of every state require the payment of minimum wage and overtime to the vast majority of workers, including many professional athletes. According to these minor league plaintiffs, the Major League Baseball “cartel” has considered itself above such mundane requirements as employment laws for many years.

The players allege that in concert with the team owners the Commissioner establishes salary amounts that all teams pay their minor league players. Shocking if true, the players assert that while the unionized major leaguers earn a minimum of $500,000 per season (and some, of course, many times that amount), minor leaguers earn an average total of $3,000 to $7,500 for the entire five-month “championship season,” and nothing for spring and post-season training, while working 50-70 hours a week.

If the few players who brought this suit can win court approval to include the many other minor leaguers potentially affected by unlawful labor practices, the teams may have to pay millions in unpaid minimum wage and overtime. For those teams employing players in California, it could be even worse with this state’s stringent laws for penalties and other damages arising from underpayment of wages. These include (but are not limited to):

• California Labor Code 203, providing for up to 30 days of wages as a penalty for not paying what is owed when the person leaves employment;
• Labor Code 210, providing for civil penalty of $100 for each initial failure to pay an employee on time and $200 for each subsequent violation;
• Labor Code 226(e), providing for civil penalty of $50 for each initial inaccurate or incomplete paystub violation and $100 for each subsequent violation, up to $4,000 per employee;
• Labor Code 558, providing for civil penalty of $50 for each initial violation of wage regulations and $100 for each subsequent violation;
• Labor Code 1194.2, providing for liquidated damages for failure to pay minimum wage;
• Labor Code 1197.1, for underpayment of wages, providing a penalty per employee for each pay period of $100 on an initial violation and $200 for each subsequent violation; and
• Labor Code 2698, permitting an aggrieved employee, as a “private attorney general,” to collect on behalf of all damaged workers civil penalties per employee for each pay period of $100 on an initial violation and $200 for subsequent violations.

This suit again points up the vital importance of employer attention to the details of timekeeping, pay and records maintenance practices. Significant, business-breaking consequences can be involved for a company’s alleged “little” errors that affect a large number of employees. See, The Devil Is In The Details: Employment Class Action Suits Can Hinge On A Court’s Choice of Definitions. There is even greater urgency for California employers with this state’s minimum wage increase to $9.00/hour on July 1, 2014. See, California Minimum Wage Increasing.

For further information and assistance on such critical matters, Please contact attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Thirty-three former minor league ball players seek to pull back the curtain on alleged system-wide violations of minimum wage or overtime. Their federal class action suit challenges Commissioner Bud Selig, the Office of the Commissioner, and, in effect, every baseball team in the country to remedy such practices. If the court agrees, the suit will include thousands of current and former minor league players. See, Senne v. Office of the Commissioner of Baseball, Case No. 3:14-cv-00608-JCS (United States District Court, Northern District of California, San Francisco Division); and “Most minor league ballplayers earn less than half as much money as fast-food workers” U.S.A. Today, March 6, 2014.

The federal Fair Labor Standards Act and the laws of every state require the payment of minimum wage and overtime to the vast majority of workers, including many professional athletes. According to these minor league plaintiffs, the Major League Baseball “cartel” has considered itself above such mundane requirements as employment laws for many years.

The players allege that in concert with the team owners the Commissioner establishes salary amounts that all teams pay their minor league players. Shocking if true, the players assert that while the unionized major leaguers earn a minimum of $500,000 per season (and some, of course, many times that amount), minor leaguers earn an average total of $3,000 to $7,500 for the entire five-month “championship season,” and nothing for spring and post-season training, while working 50-70 hours a week.

If the few players who brought this suit can win court approval to include the many other minor leaguers potentially affected by unlawful labor practices, the teams may have to pay millions in unpaid minimum wage and overtime. For those teams employing players in California, it could be even worse with this state’s stringent laws for penalties and other damages arising from underpayment of wages. These include (but are not limited to):

• California Labor Code 203, providing for up to 30 days of wages as a penalty for not paying what is owed when the person leaves employment;
• Labor Code 210, providing for civil penalty of $100 for each initial failure to pay an employee on time and $200 for each subsequent violation;
• Labor Code 226(e), providing for civil penalty of $50 for each initial inaccurate or incomplete paystub violation and $100 for each subsequent violation, up to $4,000 per employee;
• Labor Code 558, providing for civil penalty of $50 for each initial violation of wage regulations and $100 for each subsequent violation;
• Labor Code 1194.2, providing for liquidated damages for failure to pay minimum wage;
• Labor Code 1197.1, for underpayment of wages, providing a penalty per employee for each pay period of $100 on an initial violation and $200 for each subsequent violation; and
• Labor Code 2698, permitting an aggrieved employee, as a “private attorney general,” to collect on behalf of all damaged workers civil penalties per employee for each pay period of $100 on an initial violation and $200 for subsequent violations.

This suit again points up the vital importance of employer attention to the details of timekeeping, pay and records maintenance practices. Significant, business-breaking consequences can be involved for a company’s alleged “little” errors that affect a large number of employees. See, The Devil Is In The Details: Employment Class Action Suits Can Hinge On A Court’s Choice of Definitions. There is even greater urgency for California employers with this state’s minimum wage increase to $9.00/hour on July 1, 2014. See, California Minimum Wage Increasing.

For further information and assistance on such critical matters, please contact attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

May 22, 2014

The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing the federal laws prohibiting discrimination in commerce, including the Civil Rights Act of 1964, nicknamed “Title VII.” In the wake of the September 11 attacks, the EEOC has fielded a dramatic increase in religious discrimination complaints, 3,721 in fiscal 2013, well more than double the 1,709 charges received in fiscal 1997. This increasing volume has recently prompted the agency to publish a guide to help employers understand their obligations under this law, “Religious Garb and Grooming in the Workplace: Rights and Responsibilities.”

The EEOC offers several examples of religious dress and grooming practices including “wearing religious clothing or articles (e.g., a Muslim hijab (headscarf), a Sikh turban, or a Christian cross); observing a religious prohibition against wearing certain garments (e.g., a Muslim, Pentecostal Christian, or Orthodox Jewish woman's practice of not wearing pants or short skirts), or adhering to shaving or hair length observances (e.g., Sikh uncut hair and beard, Rastafarian dreadlocks, or Jewish peyes (sidelocks)).”

Title VII defines religion very broadly, including “not only traditional, organized religions such as Christianity, Judaism, Islam, Hinduism, Buddhism, and Sikhism, but also religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or may seem illogical or unreasonable to others.” An employee's belief or practice can also be "religious" under Title VII “even if it is not followed by others in the same religious sect, denomination, or congregation, or even if the employee is unaffiliated with a formal religious organization.”

Title VII requires an employer, once it is aware that a religious accommodation is needed, to accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. Therefore, when an employer's dress and grooming policy or preference conflicts with an employee's known religious beliefs or practices, the employer must make an exception to allow the religious practice unless that would be an undue hardship on the operation of the employer's business.

It is not necessarily an employer’s discretion to determine just what sort of hardship is sufficient to absolve it from complying with the law. As has been the critical role of the Civil Rights Act since its creation 50 years ago, the EEOC emphasizes that customer preference – and the potential for loss of business out of customer prejudices against one religion or another – cannot amount to a business’s claimed undue hardship by definition. Just a company’s concern over public bigotry and backlash from employing a member of a racial minority is never justification for refusing to hire that person, similar concern over public reaction to particular religious garb is irrelevant.

The EEOC offers a striking example. “Adarsh, who wears a turban as part of his Sikh religion, is hired to work at the counter in a coffee shop. A few weeks after Adarsh begins working, the manager notices that the work crew from the construction site near the shop no longer comes in for coffee in the mornings. When the manager makes inquiries, the crew complains that Adarsh, whom they mistakenly believe is Muslim, makes them uncomfortable in light of the anniversary of the September 11th attacks. The manager tells Adarsh that he will be terminated because the coffee shop is losing the construction crew's business. The manager has subjected Adarsh to unlawful religious discrimination by taking an adverse action based on customer preference not to have a cashier of Adarsh's perceived religion. Adarsh's termination based on customer preference would violate Title VII regardless of whether he was correctly or incorrectly perceived as Muslim, Sikh, or any other religion.”

Thus Title VII – and its state counterparts, including California’s Fair Employment and Housing Act (FEHA) – in effect direct employers facing such adverse economic impact from customer prejudices to either educate its patrons sufficiently to overcome their fears or hatreds against any particular religion or to forego such customer business.

For more information on this subject, contact attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.

Related articles:
:

• “New CA Labor Laws 2013: Religious Dress and Grooming and Employers’ Increased Duties to Accommodate”
  
• “Prayer Meetings in the Workplace”
  
• “Accommodating Religion in the Workplace”
  
• “What’s God Got to Do With It?”
  
• “Religion in the Workplace, Have Faith in the Law”
  
• “Reverse Discrimination”

The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing the federal laws prohibiting discrimination in commerce, including the Civil Rights Act of 1964, nicknamed “Title VII.” In the wake of the September 11 attacks, the EEOC has fielded a dramatic increase in religious discrimination complaints, 3,721 in fiscal 2013, well more than double the 1,709 charges received in fiscal 1997. This increasing volume has recently prompted the agency to publish a guide to help employers understand their obligations under this law, “Religious Garb and Grooming in the Workplace: Rights and Responsibilities.”

The EEOC offers several examples of religious dress and grooming practices including “wearing religious clothing or articles (e.g., a Muslim hijab (headscarf), a Sikh turban, or a Christian cross); observing a religious prohibition against wearing certain garments (e.g., a Muslim, Pentecostal Christian, or Orthodox Jewish woman’s practice of not wearing pants or short skirts), or adhering to shaving or hair length observances (e.g., Sikh uncut hair and beard, Rastafarian dreadlocks, or Jewish peyes (sidelocks)).”

Title VII defines religion very broadly, including “not only traditional, organized religions such as Christianity, Judaism, Islam, Hinduism, Buddhism, and Sikhism, but also religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or may seem illogical or unreasonable to others.” An employee’s belief or practice can also be “religious” under Title VII “even if it is not followed by others in the same religious sect, denomination, or congregation, or even if the employee is unaffiliated with a formal religious organization.”

Title VII requires an employer, once it is aware that a religious accommodation is needed, to accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. Therefore, when an employer’s dress and grooming policy or preference conflicts with an employee’s known religious beliefs or practices, the employer must make an exception to allow the religious practice unless that would be an undue hardship on the operation of the employer’s business.

It is not necessarily an employer’s discretion to determine just what sort of hardship is sufficient to absolve it from complying with the law. As has been the critical role of the Civil Rights Act since its creation 50 years ago, the EEOC emphasizes that customer preference – and the potential for loss of business out of customer prejudices against one religion or another – cannot amount to a business’s claimed undue hardship by definition. Just a company’s concern over public bigotry and backlash from employing a member of a racial minority is never justification for refusing to hire that person, similar concern over public reaction to particular religious garb is irrelevant.

The EEOC offers a striking example. “Adarsh, who wears a turban as part of his Sikh religion, is hired to work at the counter in a coffee shop. A few weeks after Adarsh begins working, the manager notices that the work crew from the construction site near the shop no longer comes in for coffee in the mornings. When the manager makes inquiries, the crew complains that Adarsh, whom they mistakenly believe is Muslim, makes them uncomfortable in light of the anniversary of the September 11th attacks. The manager tells Adarsh that he will be terminated because the coffee shop is losing the construction crew’s business. The manager has subjected Adarsh to unlawful religious discrimination by taking an adverse action based on customer preference not to have a cashier of Adarsh’s perceived religion. Adarsh’s termination based on customer preference would violate Title VII regardless of whether he was correctly or incorrectly perceived as Muslim, Sikh, or any other religion.”

Thus Title VII – and its state counterparts, including California’s Fair Employment and Housing Act (FEHA) – in effect direct employers facing such adverse economic impact from customer prejudices to either educate its patrons sufficiently to overcome their fears or hatreds against any particular religion or to forego such customer business.

For more information on this subject, contact attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.

May 21, 2014

Related articles:

• “New CA Labor Laws 2013: Religious Dress and Grooming and Employers’ Increased Duties to Accommodate”
• “Prayer Meetings in the Workplace”
• “Accommodating Religion in the Workplace”
• “What’s God Got to Do With It?”
• “Religion in the Workplace, Have Faith in the Law”
• “Reverse Discrimination”

In a 1990 copyright decision over a sci-fi flick featuring alien frozen yogurt enslaving the human race (yes, that is correct), federal Ninth Circuit Court of Appeals Judge Alex Kozinski noted that the producer defendant -- a “low-budget horror movie mogul” – justified his attempt to use another’s special effects footage without written permission because “[m]oviemakers do lunch, not contracts.” Rejecting the position, Judge Kozinski helpfully observed: “Common sense tells us that agreements should routinely be put in writing. This simple practice prevents misunderstandings by spelling out the terms of a deal in black and white, forces parties to clarify their thinking and consider problems that could potentially arise, and encourages them to take their promises seriously because it's harder to backtrack on a written contract than on an oral one.” Effects Associates, Inc. v. Larry Cohen, et al., (1990) 908 F.2d 555.

Judge Kozinski earlier this year issued a highly controversial decision in another copyright case – this time over an actor’s attempt to have footage removed from YouTube, a Google company. Garcia v. Google, (2014) 743 F.3d 1258. Once again, the lack of a written contract played a part in the decision.

The film this time was the anti-Islamic Innocence of Muslims, which our government had initially claimed was the impetus for the fatal September, 2012 attack on the U.S. consulate in Benghazi, Libya. While this allegation was later shown to be untrue, Innocence of Muslims did prompt death threats against all involved in its production because it posed the profane question, “Is your Mohammed a child molester?” Actor Cindy Lee Garcia, who had played the character who supposedly uttered that line, was one of those targeted.

Garcia, who had spent three days on set and was paid $500, claimed she actually never said those words and had no idea she was going to be in an incendiary film that could easily lead to riots and death threats. Garcia contended the producer lied, claiming she was performing in “Desert Warrior” -- an adventure film purportedly set in ancient Arabia. She asserted the script did not contain the offensive words but were later dubbed in without her permission or knowledge for the final film.

After the death threats forced her to move her home and business and engage in other security measures to protect her safety, Garcia attempted eight times to get Google to remove the film from YouTube to no avail. She then filed for an injunction in federal court, claiming she owned the copyright in her own performance and that Google was required on her demand to take the video down. Although the trial court judge disagreed, on appeal Judge Kozinski, now Chief Judge of the Ninth Circuit, awarded Garcia that injunction.

While Judge Kozinski’s decision will almost certainly not be the last word, it is potentially monumental, the first time a court has ruled that an individual actor with a minor film role has a copyright in her own performance. This in turn gave Garcia the power to require any alleged copyright infringers – in this case Google and YouTube -- to refrain from showing that film.

Typically, when a movie is made, the producer has all actors, and certainly the minor ones, sign a contract to ensure that they give up any rights they might possibly claim to ownership of any copyright connected with the production. In the usual industry practice, producers hire the actors as employees, in which case their contributions to the film are deemed “works made for hire” under U.S. Copyright law. If, on the other hand, a production hires actors as independent contractors, they will typically sign away (assign to the production company) any rights they may have in their performance. Here the court found that the producer did not obtain any such written agreement. Although Google submitted an agreement that Garcia had supposedly signed, Garcia claimed it was a forgery.

An authentic, adequately worded written agreement taking all such copyright rights away from Garcia would have almost certainly left the producers, as well as Google and YouTube, with the discretion of showing the Innocence of Muslims film however and whenever they chose. Yet, for moviemakers inattentive enough to mistakenly presume a handshake over lunch is just as good as a written contract, the potential ramifications of that decision are virtually limitless, turning discretion over to the actors to impose their control over a film’s content, distribution and marketing.

A producer’s or director’s artistic vision can play a critical role – for better or worse – in the collective cultural life of our world, but only if the legal details are confirmed in writing. Maintaining that role requires contracts with each participant in a film that acknowledges who owns all copyrights, whether as a work made for hire, by assignment, or, ideally both. Such agreements should also always ensure that assignment includes all moral rights, or “droit moral” – rights to control the artistic use of a creative contribution. It should also go without saying that such agreements should honestly portray the production to which the actors are contributing.

For more information on this subject, contact the firm’s Of Counsel attorney, Helena Kobrin.

When In Doubt, Choose Contracts Over Lunch

In a 1990 copyright decision over a sci-fi flick featuring alien frozen yogurt enslaving the human race (yes, that is correct), federal Ninth Circuit Court of Appeals Judge Alex Kozinski noted that the producer defendant — a “low-budget horror movie mogul” – justified his attempt to use another’s special effects footage without written permission because “moviemakers do lunch, not contracts.” Rejecting the position, Judge Kozinski helpfully observed: “Common sense tells us that agreements should routinely be put in writing. This simple practice prevents misunderstandings by spelling out the terms of a deal in black and white, forces parties to clarify their thinking and consider problems that could potentially arise, and encourages them to take their promises seriously because it’s harder to backtrack on a written contract than on an oral one.” Effects Associates, Inc. v. Larry Cohen, et al., (1990) 908 F.2d 555.

Judge Kozinski earlier this year issued a highly controversial decision in another copyright case – this time over an actor’s attempt to have footage removed from YouTube, a Google company. Garcia v. Google, (2014) 743 F.3d 1258. Once again, the lack of a written contract played a part in the decision.

The film this time was the anti-Islamic Innocence of Muslims, which our government had initially claimed was the impetus for the fatal September, 2012 attack on the U.S. consulate in Benghazi, Libya. While this allegation was later shown to be untrue, Innocence of Muslims did prompt death threats against all involved in its production because it posed the profane question, “Is your Mohammed a child molester?” Actor Cindy Lee Garcia, who had played the character who supposedly uttered that line, was one of those targeted.

Garcia, who had spent three days on set and was paid $500, claimed she actually never said those words and had no idea she was going to be in an incendiary film that could easily lead to riots and death threats. Garcia contended the producer lied, claiming she was performing in “Desert Warrior” — an adventure film purportedly set in ancient Arabia. She asserted the script did not contain the offensive words but were later dubbed in without her permission or knowledge for the final film.

After the death threats forced her to move her home and business and engage in other security measures to protect her safety, Garcia attempted eight times to get Google to remove the film from YouTube to no avail. She then filed for an injunction in federal court, claiming she owned the copyright in her own performance and that Google was required on her demand to take the video down. Although the trial court judge disagreed, on appeal Judge Kozinski, now Chief Judge of the Ninth Circuit, awarded Garcia that injunction.

While Judge Kozinski’s decision will almost certainly not be the last word, it is potentially monumental, the first time a court has ruled that an individual actor with a minor film role has a copyright in her own performance. This in turn gave Garcia the power to require any alleged copyright infringers – in this case Google and YouTube — to refrain from showing that film.

Typically, when a movie is made, the producer has all actors, and certainly the minor ones, sign a contract to ensure that they give up any rights they might possibly claim to ownership of any copyright connected with the production. In the usual industry practice, producers hire the actors as employees, in which case their contributions to the film are deemed “works made for hire” under U.S. Copyright law. If, on the other hand, a production hires actors as independent contractors, they will typically sign away (assign to the production company) any rights they may have in their performance. Here the court found that the producer did not obtain any such written agreement. Although Google submitted an agreement that Garcia had supposedly signed, Garcia claimed it was a forgery.

An authentic, adequately worded written agreement taking all such copyright rights away from Garcia would have almost certainly left the producers, as well as Google and YouTube, with the discretion of showing the Innocence of Muslims film however and whenever they chose. Yet, for moviemakers inattentive enough to mistakenly presume a handshake over lunch is just as good as a written contract, the potential ramifications of that decision are virtually limitless, turning discretion over to the actors to impose their control over a film’s content, distribution and marketing.

A producer’s or director’s artistic vision can play a critical role – for better or worse – in the collective cultural life of our world, but only if the legal details are confirmed in writing. Maintaining that role requires contracts with each participant in a film that acknowledges who owns all copyrights, whether as a work made for hire, by assignment, or, ideally both. Such agreements should also always ensure that assignment includes all moral rights, or “droit moral” – rights to control the artistic use of a creative contribution. It should also go without saying that such agreements should honestly portray the production to which the actors are contributing.

For more information on this subject, contact the firm’s Of Counsel attorney, Helena Kobrin.

May 14, 2014