A new test for determining Employee v. Independent Contractor Status?

A recent DC Appellate Circuit Court decision may create a new twist on the factors used to determine whether or not an individual is an employee or an independent contractor.  The DC Circuit Court of Appeals recently focused on the degree to which FedEx delivery drivers had the “opportunity and functioned as an entrepreneur”, instead of the traditional focus on the “right to control.” 

Although this decision involved classification of individuals for purposes of determining their rights to bargain as a Union with FedEx, the test and factors discussed are the common law factors used by courts to determine the employment status of an individual. 

The new standard resulted in FedEx delivery drivers being classified as independent contractors.  The DC court also focused on the following: 1) the drivers had their own vehicles; 2) the drivers could use the vehicles for personal or other commercial purposes; 3) the drivers were not subject to disciplinary actions; 4) the drivers signed independent contractor agreements; and 5) the drivers were responsible for the costs of operating and maintaining their vehicles. 

Of course, it is not clear if IL courts will follow this line of reasoning, but it does provide another way for business owners, entrepreneurs and companies to structure relationships with individuals and justify the classification.  Also, individuals need to be aware of the ruling to recognize the potential for greater enforceability of such an independent contractor agreement; otherwise, individuals may be unable to get out of such an arrangement.    

See. FedEx Home Delivery v. NLRB, 07-1931 (D.C. Cir. Apr. 21, 2009). 

The Safe Harbor for ISPs. What is it?

The safe harbor is not a tranquil body of water, but a section in the Digital Millennium Copyright Act (DMCA) that protects Internet Service Providers (ISPs).  The ISP is an entity offering transmission, routing or providing connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.  512 (A)

Or, an ISP is a provider of online services or network access or the operator of such facilities. 512 (B).  The ISP is immune from liability for monetary, injunctive or equitable relief for copyright infringement for storage of such material at direction of user on its systems.  512 (c).  However, the ISP must meet the following elements to acquire such immunity:

1) not have actual knowledge that the material or an activity using the material on the network is infringing;

2) is not aware of circumstances or facts from which the infringing activity is apparent; or

3) upon acquiring such knowledge or awareness, removes or disables access to the material;

4) does not receive a financial benefit directly attributable to the infringing activity, where the ISP has the right and ability to control such activity; and

5)    upon notice of claimed infringement responds expeditiously to remove or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

Website Immunity for Defamation under the CDA!

The Communications Decency Act (CDA) of 1996, is still alive and protects many internet service providers (ISPs) and website hosts from liability for statements and actions made by others using their services.  The goal is to promote the free exchange of information and ideas over the internet.

Many individuals have received information or posts from individuals that defame or paint them in a bad light.  Sometimes there is false or misleading information that is posted on a website are the basis of tort, contract and intellectual property claims against the ISP or website host. 

The CDA shields these individuals from liability, because they are not considered the speaker.  Moreover, they are shielded from liability if they act in good faith and restrict access to false or misleading information.   Most of the cases dealing with these issues have been in the defamation context, but there is some crossover with contract and intellectual property matters. 

The ISP and the website host is immune as long as they are not the author or creator of the post or statement.  In other words, they are just a means of commnication.  It remains to be seen how the CDA, particularly, section 230, will be interpreted in the context of an breach of contract or violation of intellectual property rights claims.

On-line Auction Sites and Trademark Infringement!

On-line auction sites have become a popular method for selling, buying or bidding for many consumer items.  This raises questions about the sale of counterfeit or infringing goods being provided by anonymous sellers via on-line auction sites.  Often the on-line auction site is sued for direct and contributory trademark infringement. 

However, this raises concerns about shutting down an entire on-line auction site due to a few bad actors or anonymous sellers.  In Tiffany v. E-bay, the court dealt with this scenario and found that E-bay was not liable to Tiffany on its claims of direct trademark infringement, contributory trademark infringement, dilution, unfair competition or false advertising. 

The Court focused on E-bay’s extensive policies for investigating, reporting and removal of infringing or counterfeit goods from its sites.  The Court also went to on to find that the sale of actual Tiffany goods was protected under the nominative fair use defense.  Thus, on-line auctions sites were protected assuming they met their affirmative duty to police the sale of infringing and counterfeit goods. 

This ruling will provide for an increase in the number of on-line auction sites and allow for numerous resell opportunities.  Whether you are the trademark owner, a consumer or an on-line auctioneer, understanding trademark law and how it impacts your business practices or purchasing behavior is crucial to avoiding liability for trademark infringement. 

If you have any concerns or questions regarding these matters, then please feel free to contact us.