Tuesday, May 26, 2015
We have previously blogged about “sharing economy” short-term rental company Airbnb at various times here. Time for an update: The City of Santa Monica, California, just passed an ordinance that prohibits property owners and residents from renting out their places unless they remain on the property themselves. This is estimated to prohibit no less than 80% of Airbnb’s Santa Monica listings (1,400 would be banned).
The city plans to spend $410,000 in the first year to enforce the rule using three new full-time employees. Violators may be fined by up to $500. However, because Airbnb does not list addresses, staff will have to look at photos of the properties and drive around the city streets to try to identify the violators. Doing so sounds awfully invasive and awkward, but that is nonetheless the plan. Adds Assistant Planning Director Salvador Valles: “We can issue citations just based on the advertisement alone when we're using our business regulations.” Other major cities are also trying to crack down on short-term rentals.
But why, you ask? Good question. In times when, as I have blogged about before and as is common knowledge, medium- and low-income earners are falling behind higher-income earners to a somewhat alarming extent, you would think the government could let people earn some additional money on what is, after all, their own property. Cities, however, claim that short-term rentals drive up the rental prices by cutting into the number of residences that are available for long-term rentals. “Even a study commissioned by Airbnb itself earlier this year found that Airbnb increases the price of a one-bedroom apartment in San Francisco by an average of $19 a month.” Traffic concerns are also often mentioned in this context as are potential tax avoidance issues, although Airbnb has now started to deduct taxes from rental fees before transferring these to the landlords.
Airbnb’s end goal? To go IPO. The goal for at least some landlords? Eighty-year-old Arlene Rosenblatt, for example, rents out her home in Santa Monica whenever she and her husband leave town to visit their seven grandchildren. She charges anywhere from $115 to $220 a night for her home, listing it on Airbnb and other sites and thus earning as much as $20,000 a year. "I'm a retired schoolteacher," Rosenblatt says. "We don't get a lot of retirement income. My husband, all he has is his Social Security."
Time will tell what happens in this latest clash between private property and contractual rights and government regulations.
Wednesday, May 20, 2015
Should salary levels be regulated or mainly left to individual contractual negotiations between the employee and his/her employer? The former, according to the Los Angeles City Council and governance entities in several other cities and states.
On Tuesday, Los Angeles decided to increase the minimum salary to $15 an hour by 2020. Other cities such as San Francisco, Chicago, New York, and Seattle have passed similar measures. Liberal strongholds, you say? Think again. Republican-leading states like Alaska and South Dakota have also raised their state-level minimum wages by ballot initiative. Some companies such as Walmart and Facebook have raised their wages voluntarily.
But the effect is likely to be particularly strong here in Los Angeles, where around 50% of the work force earn less than $15 an hour. That’s right: in an urban area with super-rich movie studios, high-tech companies, hotels, restaurants, health companies and much more, half of “regular” employees barely earn a living salary. In New York state, around one third of workers make less than $15 an hour. Take into consideration that the cost of living in some cities such as Los Angeles and maybe even more so San Francisco and New York is very high. In fact, studies show that every single part of Los Angeles is unaffordable on only $15 an hour if a person spends only the recommended one third on housing.
“Assuming a person earning $15 an hour is also working 40 a week, which is rare for a minimum wage employee, and that they're not taking any days off, they'd be earning $31,200 a year. An Economic Policy Institute study released in March found that a single, childless person living in Los Angeles has to make $34,324 a year just to live in decent conditions (and that was using data from 2013).”
Opponents, however, say that initiatives such as the above will make some cities into “wage islands” with businesses moving to places where they can pay employees less. Others call the initiative a “social experiment that they would never do on their own employees” (they just did...) But “even economists who support increasing the minimum wage say there is not enough historical data to predict the effect of a $15 minimum wage, an unprecedented increase. A wage increase to $12 an hour over the next few years would achieve about the same purchasing power as the minimum wage in the late 1960s, the most recent peak.”
Time will tell if the sky falls from the above initiative or if the system in a rich urban area such as Los Angeles can cope. Said Gil Cedillo, a councilman who represents some of the poorest sections of the city and worries that some small businesses will shut down, “I would prefer that the cost of this was really burdened by those at the highest income levels. Instead, it’s going to be coming from people who are just a rung or two up the ladder here.”
This is, of course, not only an issue of the value of low-wage work and fending for yourself to not end up at the bottom of the salary chain. It is a matter of alleviating urban poverty and improving the nation’s overall economy for a sufficient amount of people to better get the economy back on track for more than the few.
Monday, May 11, 2015
According to Philadelphia Magazine, two men who paid to watch the Mayweather-Paaquiano fight on pay-per-view are suing on behalf of a class of viewers who did not get their money's worth because Paquino had an undisclosed shoulder injury. The suit claims damages for breach of contract, fraud conspiracy and violation of consumer protection laws. Viewers paid between $89 and $100 to watch the fight. The suit alleges that the fight should have been cancelled or postponed.
The LA Times reports that a group of students who contracted Leishmaniasis, a parasitic disease that causes painful skin ulcers, while on a trip to Israel are suing the trip's organizers for failing to take adequate precautions to protect the students. The illness is allegedly caused by sand fly bites. The suit names the North American Federation of Temple Youth and the Union for Reform Judaism as defendants. It alleges that the organizations failed to take precautions such as providing the students with insecticides or insect netting and that the organizations provided the students with bug-infested bedding.
The LA Times also reports on a new trend on the hot, new social media: suing your co-founder. The report suggests that combining handshake deals undertaken in college dormitories, coupled with youthful hasted makes for a dangerous mix. We are all familiar with the strife among the founders of Facebook, but it turns out that Snapchat, Tinder, Maker Studios and Beats Electronics have all also experienced co-founder difficulties sounding in allegations of breaches of founders' agreements.
Wednesday, May 6, 2015
This week, Los Angeles City Attorney Mike Feuer famously filed suit against Wells Fargo claiming that the bank's high-pressure sales culture set unrealistic quotas, spurring employees to engage in fraudulent conduct to keep their jobs and boost the company's profits.
Allegedly (and in my personal experience as I bank with Wells Fargo), the bank would open various bank accounts against its customer’s wills, charge fees for the related “services,” and refuse to close the accounts again for various official-sounding reasons, making it very cumbersome to deal with the bank. The bank’s practices often hurt its customers' credit rankings.
Employees have described “how staffers, fearing disciplinary action from managers, begged friends and family members to open ghost accounts. The employees said they also opened accounts they knew customers didn't want, forged signatures on account paperwork and falsified phone numbers of angry customers so they couldn't be reached for customer satisfaction surveys.”
The city's lawsuit alleges that the root of the problem is an unrealistic sales quota system enforced by constant monitoring of each employee — as much as four times a day. "Managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas," the lawsuit claims. Last year, 26% of the bank’s income came from fee income such as from fees from debit and credit cards accounts, trust and investment accounts. The banking industry is currently set up in such a way that around 85% of institutions would go bankrupt if they do not have fee income.
This comes only three years after Wells Fargo agreed to pay $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom and treated these borrowers in predatory ways.
All this in the name of “growth,” traditionally thought of as the sine qua non of industrialized economies, even in financially tough times where simply maintaining status quo – and not going out of business - would seem to be acceptable for now from at least a layman’s, logical standpoint.
In recent years, more and more economists have advanced the view that unbridled growth or even growth per se may simply not be attainable or desirable. After all, we live on a planet with limited resources – financial and environmental - and limited opportunities. This especially holds true in relation to the “1% problem.” Nonetheless, questioning growth has been said to be “like arguing against gasoline at a Formula One race.” So I’m making that argument here, although I acknowledge that I am not an economist: by setting our national (and personal) economies up for ever-continuing growth, we are playing with fire. There is only so much of a need for various things and services, as the above Wells Fargo suit so amply demonstrates. Granted, the global population is growing, but much of that growth is in developing nations where people frankly cannot afford to buy many of the products and services often so angrily pushed by modern companies worldwide. In the Global North, C-level managers are often rewarded via measurements of growth and if they cannot produce the expected growth results, they risk being fired. Sometimes, simply doing the right thing by customers and employees may actually be enough as long as the company would remain sound and in business. Of course, this requires a shift in thinking by shareholders who contribute greatly under our current investment models to the demand for never-ending growth. Overconsumption and waste is a vast ecological problem as well. It has been said that “we must reform economics to reflect ecological reality: nature is not, after all, just a pile of raw materials waiting to be transformed into products and then waste; rather, ecosystem integrity is a precondition for society's survival.”
Growth is, of course, good and desirable if possible. But if, as seems to be the case, it’s coming to a point where we destroy our own chances of healthy long-term survival and wreck the emotional and financial lives of employees and clients in the meantime, something is seriously wrong.
Friday, May 1, 2015
In March, while I was co-teaching a course called International Humanitarian Law in Israel and Palestine with Professor Yaël Ronen, I visited Bethlehem with my students. Among other things, we saw the image at left, attributed to Banksy, on a wall in Bethlehem.
So today's New York Times story about Banksy's other creations in Gaza caught my eye. The heart of the story, for the purposes of this blog, is that Banksy apparently painted an image of a weeping Greek goddess an the iron door of a destroyed home in Gaza. An enterprising Gazan artist bought the door for less than $200, saying he wanted to protect the goddess. The owner of the door was unaware that the painting could be worth hundreds of thousands of dollars.
According to the Times, the local authorities, Hamas, have confiscated the door, and its ownership and value are to be determined by a court. I'm not sure what law the courts in Gaza would apply to such a dispute. Does anybody think the buyer of the door has a duty to disclose its possible worth to the vendor?
Tuesday, April 28, 2015
I began this series with the question: Why Is the Legal Academy Incapable of Standing Up for Itself? Paul Campos thinks we are doing far too much of that, going so far as to compare those of us who think legal education is worth defending with Holocaust deniers. Fortunately for us, I suppose, this blog isn't on anybody's radar, but in any case I think it bears noting that I value the contributions of people who have shed critical light on legal education, although I don't agree that it is anything approaching a scam. I have gained valuable insights from the work of Law School Transparency, Brian Tamanaha, Deborah Merritt, and Bill Henderson on our sister blog, The Legal Whiteboard, among others.
That said, there is another side of the story. Legal education is constantly re-forming itself in fundamental ways. Clinical education has only been with us since the 70s; legal writing programs took off in a major way in the 80s and 90s. Both represent fundamental shifts in pedagogy in response to perceived deficits in the legal education model. Those programs continue to develop and expand, now supplemented with robust ASP programs. All of these things jack up the costs of legal education and all in the name of better preparing students for the profession. Nobody is fiddling while our students burn. In fact, at this point, it is clear that everybody in the debate passionately believes that they have the best interests of our students at heart, and I do not doubt their sincerity.
Meanwhile, just when you thought it was safe to read what the New York Times has to say about legal education, we get another one-sided piece based on a few anecdotes and one piece of scholarship. I thought I had a lot to say in response, but others have beaten me to it, so I will just provide the links:
Links to Related Posts:
The Current Series
VIII: Myanna Dellinger, Caveat Emptor and Law School Transparency
VII: Myanna Dellinger, On Issue-Spotting and Hiding the Ball
VI: Issue Spotting: A Response to a Comment
V: Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?
IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?
III: My Advice to Law School Transparency: Declare Victory and Move On
II: SLOs and Why I Hide the Ball (and Why You Don't Have To)
I: Why Is the Legal Academy Incapable of Standing Up for Itself?
Related Posts form 2012:
Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice
Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom
Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy
Thoughts On Curricular Reform III: The Costs of Change
Thoughts on Curricular Reform II: Teaching Materials
Thoughts on Curricular Reform I: The Problem
Monday, April 27, 2015
In yet another government outsourcing scheme gone wrong, KOLO TV news is reporting that Nevada is alleging breach of contract against the companies it hired to administer Common Core testing in the state's schools. Apparently, when thousands of students attempted to log on so that they could take their exams, they received an error message and could not proceed. Educators across the state are aggrieved, but students across the state are generally fine with it.
Nonprofit Quarterly reports that three students, three parents and three alumnae are alleging breach of contract and seeking an injunction to keep open Sweet Briar College in Lynchburg, VA. They allege that they had entered into express and implied agreements with the College that they would not only have the benefit of a four-year degree from the College but would also enjoy the benefits of being alumnae or of having children who were alumnae.
According to the Des Moines Register, in 2011, an 87-year-old grandmother was playing the slots, when the screen told her that she had a "bonus award" of $41797550.16. Last week, Iowa's Supreme Court ruled unanimously that she had won $1.85. They rejected claims of breach of an implied contract and found that the "bonus award" was just the product of a computer glitch.
April is the finest month for a Chicago Cubs fan, because even the Cubs are within a few games of first place in April.
And hope springs anew with each Spring Training This year Cubs fans have extra reason to hope because of young prospect, Kris Bryant. There was only one catch. Bryant did not start the year playing for the Cubs. As reported here in Business Journalism, despite hitting nine home runs in 40 at bats and earning a .425 batting average, Bryant was demoted to the Cubs' Triple-A affiliate for the start of the season. Cubs GM, Theo Epstein, gave Bryant's need to develop his defensive skills as the reason for the demotion, but many believe that the purpose is to delay Bryant's eligibility for arbitration and free-agency. Bryant's ability to avail himself of these mechanisms would kick in 2017 and 2020 respectively if Bryant was on the Cubs' roster to start the season, but they will kick in a year later if Bryant misses the season's first ten games.
Thirteen days into the season, the Cubs brought Bryant up from the minors. Mike Olt and his lifetime .158 batting average kept third base occupied while Bryant was improving his defensive skills.
Thursday, April 23, 2015
As for the series on law school instruction and law schools in general that Jeremy started here recently: count me in!
I agree with Jeremy’s views that issue-spotting is very important in helping students develop their “practical skills,” as the industry now so extensively calls for. As Jeremy and Professor Bruckner do, I also never give up trying to have the students correctly issue spot, which in my book not only means spotting what the issues are, but also omitting from their tests and in-class analyses what I call “misfires” (non-issues). In my opinion, the latter is very necessary not only for bar taking purposes, but also in “real life” where attorneys often face not only strict time limits, but also word limits.
But I’ll honestly admit that my students very often fail my expectation on final tests. Some cannot correctly spot the issues at all. Many have a hard time focusing on those aspects of the issues that are crucial and instead treat all issues and elements under a “checklist” approach overwriting the minor issues and treating major issues conclusorily. Yet others seem to cram in as many issues as they can think of “just in case” they were on the test (yes, I have thought about imposing a word limit on the tests, but worry about doing so for fear of giving any misleading indication of how many words they “should” write, even if indirectly so on my part).
Maybe all this is my fault … but maybe it isn’t (this too will hopefully add to Professor Bruckner’s probably rhetorical question on how to teach issue-spotting skills). Every semester, I post approximately a dozen or so take-home problems with highly detailed answer rubrics. I only use textbooks that have numerous practice problems long and short. I review these in class. I also review, in class, numerous other problems that I created myself. I give the students numerous hints to use commercial essay and other test practice sources. Yes, all this on top of teaching the doctrinal material. All this is certainly not “hiding the ball.” Frankly, I don’t really know what more a law professor can realistically do (other than, of course, trying different practice methods, where relevant, to challenge both oneself and the students and to see what may work better as expectations and the student body change).
So what seems to be the problem? As I see it, it doesn’t help that at least private law schools at the bottom half of the ranking system have to accept students with lower indicia of success than earlier. But even that hardly explains the problem (who knows what really does). Some law schools have to offer remedial writing classes and various other types of extensive academic support to students in their first semesters and beyond. Some of the problem, in my opinion, clearly stems from the undergraduate-level education our students receive. In large part, this makes extensive use of multiple-choice questions for assessments and not, as future lawyers would benefit from, paper or essay-writing tests or exercises. Thus, undergraduate-level schools neither teach students how to spot "issues" from "scratch" nor do they teach them how to write about these. Numerous time have my students told me that they have not really written anything major before arriving in law school.
Why is that, then? Isn’t that problem one of time and resources; in other words, the fact that not just law professors, but probably most university professors, are required to research and write extensively in addition to teaching and providing service to their institutions? For example, see Jeremy’s comments on his busy work schedule here. Something has to give in some contexts. At the undergraduate level, maybe it’s creating and grading essays and instead resorting to machine-graded multiple-choice questions and not challenging students sufficiently to consider what the crux of a given academic problem is. Just a thought. I am, of course, not saying that we should not conduct research. I am saying, though, that I find it frustrating that lower-level educations, even renowned ones, cannot seem to figure out how to use whatever resources they do, after all, have to train their students in something as seemingly simple as how to write and how to think critically.
At the law school level, some “handholding” and various types of practical assistance is, of course, acceptable. But to me, the general trend in legal education seems to be moving towards a large extent of explaining, demonstrating, giving examples, setting forth goals, assessments, and so forth. I agree with what Jeremy said in an earlier post that we should at some point worry about converting the law school education process into one that resembles undergraduate-style (or high school style!) education.
Recall that the United States is not an island unto itself. Many studies show that our educational system is falling behind international trends. Where in many other nations in the world (developed and developing), students are expected to come up with, for example, quite advanced research and writing projects for their degrees, we are - at least in some law schools - teaching students just how to write, and what to write about. This is a sad slippery slope. Until the American educational sector as such improves, I agree that we should do what we can to motivate and help our students. But I also increasingly wish that our “millennial” students would take matters into their own hands more and take true ownership of learning what they need to learn for a given project or class with less handholding, albeit of course still some guidance. Nothing less than that will be expected from them in practice.
Wednesday, April 22, 2015
On Monday, a California Appellate Court declared the tiered water payment system used by the city of San Juan Capistrano unconstitutional under Proposition 218 to the California Constitution. The California Supreme Court had previously interpreted Prop. 218’s requirement that “no fees may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question” to mean that water rates must reflect the “cost of service attributable” to a particular parcel.
At least two-thirds of California water suppliers use some type of tiered structure depending on water usage. For example, San Juan Capistrano had charged $2.47 per “unit” of water (748 gallons) for users in the first tier, but as much as $9.05 per unit in the fourth. The Court did not declare tiered systems unconstitutional per se, but any tiering must be tied to the costs of providing the water. Thus, water utilities do not have to discontinue all use of tiered systems, but they must at least do a better job of explaining just how such tiers correspond to the cost of providing the actual service at issue. This could, for example, be done if heavy water users cause a water provider to incur additional costs, wrote the justices.
The problem here is that at the same time, California Governor Jerry Brown has issued an executive order requiring urban communities to cut water use by 25% over the next year… that’s a lot, and soon! Tiered systems are used as an incentive to save water much needed by, for example, farmers. The California drought is getting increasingly severe, and with the above conflict between constitutional/contracting law and executive orders, it remains to be seen which other sticks and carrots such as education and tax benefits for lawn removals California cities can think of to meet the Governor’s order. Happy Earth Day!
Monday, April 20, 2015
The Texas Lawyer reports that Texas has amended a statute that allows plaintiffs to recover attorneys' fees in breach of contract claims. The statute originally allowed for recovery from an individual or a corporation. The amendment permits recovery from any non-government entity. As law Prof. Doug Moll (pictured) explains, the purpose of the policy is to encourage settlement and permit parties that could not pay their own attorneys' fees to sue for breach. "There is not a policy justification I can see for distinguishing between business forms in an attorney fee-shifting statute," Moll noted in defending the amendment. The bill faced some opposition from groups that would not want to exempt state entities and from others who wanted the law to allow either side, not just plaintiffs, to collect attorneys' fees. But lawmakers did not want to mess with Texas law.
From the Philadelphia Business Journal, we get yet another classic municipal contracting case. City meets company, city hires company to do some fancy, technical thing it can't do itself, city and company exchange allegations of breach of contract, and the parties settled for $4.8 million. In this case, the city is Baltimore and the company is Unisys.
As reported here in USA Today, one bi-product of the new nuclear deal with Iran is that Russia now feels free to send Iran S-300 missiles for use in its air-defense system. The missile deal has been suspended since 2010, and Iran had sued Russia in Geneva, alleging breach of contract and seeking $4 billion in damages. Iran now says that it will drop the case if Russia delivers the missiles.
Thursday, April 16, 2015
A potential class-action lawsuit against SeaWorld was filed in Florida on April 8 just two weeks after the company was sued over its killer whale care in San Diego in another purported class action suit. The Florida lawsuit alleges unjust enrichment and fraud, among other issues. The lawsuit claims that if members of the public knew about SeaWorld’s mistreatment of the orcas, they would not visit the theme parks. Plaintiffs asks the court to require SeaWorld to reimburse ticket prices to all the people who purchased tickets to the Orlando park in the past four years. Visitors to the park pay much as $235 per person. The complaint states that more than five million people attended the Florida theme park in the years 2010 through 2012.
SeaWorld finds itself in a lot of trouble these days over its treatment of its killer whales. The park was, for example, subjected to heavy criticism in the CNN documentary “Blackfish” and in a book written by one of its former orca trainers. Perhaps as a result, its shares have been tanking recently…
SeaWorld, in turn, claims that the criticism and in particular the most recent lawsuit “appears to be an attempt by animal [rights] extremists to use the courts to advance an anti-zoo agenda. The suit is baseless, filled with inaccuracies, and SeaWorld intends to defend itself against these inaccurate claims.” It also claims that it is a leader in orca care. SeaWorld’s parks are regularly inspected by the U.S. government and two organizations. The accreditations of the California and Florida parks expire in 2020.
As part of the experience park visitors purchase, they unquestionably expect to see relatively healthy and happy whales kept under standards of good animal husbandry. But in reality, according to the lawsuits and other statements about the park, SeaWorld does not live up to this end of the bargain. Frequent allegations have been made that SeaWorld’s orcas have a shorter lifespan than wild orcas (usually, animals in captivity live longer than their wild counterparts), are kept in chemical-filled and way too small pools, are drugged with antipsychotic medicines, are not provided with sufficient shade, and are subjected to forced breeding.
Either somebody is not telling the truth here or people’s expectations of what constitutes good ethics in relation to keeping and displaying orcas as well as other show and zoo animals, for that matter. Does this matter under the law? Of course, the general public has a purely legal right to buy tickets to see various performance and exhibit animals as long as no state or federal law is violated as regards how the animals are treated. Ethics are a different story. But misrepresentation is actionable under contracts law. If the above allegations made by TV producers, former trainers, and numerous consumers are correct, SeaWorld has indeed not lived up to the wholesome, animal-friendly image it portrays of itself in order to sell tickets. Its alleged questionable conduct has been going on for years. It’s been almost twenty since a friend of mine (otherwise not very interested in animals) visited SeaWorld San Diego and went on a backstage tour. He told me about the deplorably small pools in which the animals were kept after their performances. In this area, ethics and contracts law interface and have finally come head-to-head. The eventual outcome may be that SeaWorld will not be able to continue making money off its orca shows as it has in the past. Ringling Bros. is voluntarily phasing out its use of elephants after similar protests about their treatment. This may not be a bad thing from a public policy point of view. Time has come to consider how we treat animals in many contexts, and certainly so for mere entertainment and profit-making motives.
See the Florida complaint here: http://ia902707.us.archive.org/24/items/gov.uscourts.flmd.309289/gov.uscourts.flmd.309289.1.0.pdf
Monday, April 13, 2015
A few weeks ago, 17-year old Siobhan O’Dell became known online for her bold and unusual rejection of Duke University’s rejection of her college application. She wrote:
"Thank you for your rejection letter of March 26, 2015. After careful consideration, I regret to inform you that I am unable to accept your refusal to offer me admission into the Fall 2015 freshman class at Duke. This year I have been fortunate enough to receive rejection letters from the best and brightest universities in the country. With a pool of letters so diverse and accomplished I was unable to accept reject letters I would have been able to only several years ago."
Alas, applying for college does not work like that. Accordingly, Duke’s response was simply that Ms. O’Dell’s only option is to appeal the decision, but that her chances of a reversal are not good: “If you choose to appeal, we welcome your request, but I do not wish to raise unreasonable expectations on your part," the university representative writes.
Nice try, though! It sounds like Ms. O’Dell would do well in a Contracts Law class.
Monday, April 6, 2015
We saw this report over on the Faculty Lounge. This is fallout from the proposed merger of Hamline University School of Law and the William Mitchell College of Law (William Mitchell). Two William Mitchell faculty members are claiming that the merger, which will necessitate the elimination of two tenured faculty lines, is a a breach of contract.
The Complaint alleges that law schools must comply with ABA Standard 405(b) by maintaining policies for academic freedom and tenure. William Mitchell has a faculty handbook that incorporates the AAUP's 1940 Statement on Academic Freedom, which regards tenure as indispensable to such freedom. Under William Mitchell's Tenure Code, tenured professors may only be dismissed for adequate cause or in cases of "bona fide financial exigency."
In February, when the merger of the two law schools was proposed, William Mitchell announced that is was considering amendments to its Tenure Code to permit termination of tenure based on a merger. Plaintiffs allege that William Mitchell now intends to amend its Tenure Code to permit termination of tenure even if the merger does not go through, to permit termination of tenure without cause and without declaring the existence of a financial exigency.
Plaintiffs seek a judgment declaring that the proposed amendment to William Mitchell's Tenure Code would constitute a breach of contract.
Wednesday, April 1, 2015
Indiana Governor Mike Pence (pictured) is in a tough spot. As reported here, Indiana is facing protests, threats of boycotts and possible losses of business opportunities as a result of its version of the state Religious Freedom Restoration Act. As illustrated in the Indy Star here, Indiana's law makes it easier for individuals and business entities to rely on the statute as a defense to allegations of discriminatory treatment. Even Pence's predecessor, Mitch Daniels, in his current capacity as a university president, has distanced himself from the law.
Pence is in a tough spot because he signed the law to show his conservative bona fides, perhaps because he has aspirations to national executive office. But he may have overreached, as the backlash against the new law may hurt his chances to appeal to a national electorate. Pence's position is made more difficult by the fact that he now wants the Indiana legislature to "clarify" the law so that it doesn't look like it was designed to discriminate. But the Indiana legislators may well have exactly the clarity they wanted, and they do not share Pence's national aspirations.
Lambda Legal is among the many organizations that have objected to the law as a license to discriminate against LGBT groups, especially in the context of same-sex marriages. Now Lambba is offering Pence a way out. In a draft contract that the parties have shared with this blog (and only with this blog as far as we know), Pence and Lambda have agreed that Pence will hire LGBT applicants for at least 30% of staff associated with his current position as Governor of Indiana and as part of his election staff leadership for all political campaigns through 2020. "I may lead a red state," Pence told our correspondent, "but I expect to be flying the rainbow flag over the White House in a few years." A Lambda spokesperson said that details of the agreement are still being negotiated but that "all us us are Lambda are looking forward to a faaabulous Inaugural Ball."
Clearly this a win-win.
Tuesday, March 31, 2015
My friend Ken Ford is enjoying his fifteen minutes of fame, courtesy of the Department of Energy (D0E), which is displeased with his memoir, Building the H-Bomb: A Personal History. According to this report in the New York Times, DoE officials told Dr. Ford to make cuts to his book that would have eliminated 10% of the text. DoE personnel flagged 60 separate passages in the book for editing.
This demand (and the DoE made clear that it was making demands not requests) came as a surprise to Dr. Ford, who had submitted the book for DoE review expecting the process to be a mere formality. In Dr. Ford's view, the book contains no secrets, as the information that he included in his book relating to the history of the hydrogen bomb either had been previously disclosed or was released to him through FOIA requests. The DoE sees things differently, but the agency is unlikely to respond to the publication of Dr. Ford's book, in large part because any action it takes would only draw attention to the information whose disclosure it regards as improper.
The Times articles covers the story well and provides some examples of material that the DoE regards as classified but Dr. Ford regards as public. We would like to focus on a couple of contractual issues. First, the Times references Ken's alleged contractual obligation arising from a non-disclosure agreement he signed in the 50s. Dr. Ford does not recall what that agreement said, but he provided this blog with a copy of a similar agreement dated from September 2014. The DoE asked Dr. Ford to sign this new non-disclosure agreement in connection with its review of his manuscript. That document provides the government with multiple remedies should Dr. Ford reveal any classified information, including:
- termination of security clearances and government employment;
- recovery of royalties and other benefits that might result from any sort of disclosure of classified information; and
- criminal prosecution under Titles 18 and 50 of the U.S. Code and the Intelligence Identities Protection Act of 1982.
Given this non-disclosure agreement, one would expect that Dr. Ford's publisher would be reluctant to publish the book, fearing that it too might become a target of government scrutiny. In order to protect his publisher against liability, Dr. Ford agreed to amend his publication agreement to expand the usual indemnification clause. The additional language in the contract provides that Dr. Ford will indemnify his publisher "against any suit, demand, claim or recovery, finally sustained, by reason of . . . any material whose dissemination is judged by the United States Government to have violated the Author's obligations regarding the handling of sensitive information."
Steven Aftergood provides further information on the Federation of American Science Secrecy blog here.
Dr. Ford provides an overview of the story that his book tells, as well as links to about a score of documents, eight of which are annotated with Dr. Ford's comments, on George Washington University's National Security Archives.
Monday, March 30, 2015
Earlier this month, Los Angeles-area media reported a somewhat humorous of a valet service that gave away a relatively expensive new car to a random guy claiming that he had "lost the [valet] ticket." Yup, the valet service actually just gave the car to the man who was sporting an Ohio state tattoo. (Of course, this story is not funny for the frustrated car owner).
But wait, the story gets weirder than that (it is, after all, LA, where we worry a lot about our cars...): the valet service sent the responsible employee home and referred the customer to his insurance company. Initial reports indicated that the insurance company did not want to pay for this loss as no theft had occurred... as is always the case, however, the media did not follow up on the end of this story, to the best of my knowledge.
Another valet contract that you must read and that was shared today on the AALS listserv for Contract Professors reminded me of this story. Hat tip to Professor Davis!
Valet companies may have to brush up on their contract writing skills soon...
Writing for Forbes.com, Santa Clara Law Prof Eric Goldman (pictured) reports on a recent SDNY case, Galland v. Johnston. The case is similar to others about which we have blogged recently. Plaintiffs rent out their apartment in Paris through a website. The rental agreement associated with the property provides that defendants would “not to use blogs or websites for complaints, anonymously or not." Notwithstanding this clause, defendants posted reviews of the apartment that were not entirely positive. In one case, plaintiffs offered a defendant $300 to remove a three-star review from a website. The defendant refused and complained to the website. Plaintiff then sued defendants for, among other things, breach of contract, extortion and defamation.
The magistrate judge dismissed all of the claims except the breach of contract claim. Plaintiffs objected to this disposition. Defendants did not, which may be a good reason why the District Court let the breach of contract claim stand while upholding the Magistrate's dismissal of the remaining claims. Indeed, the District Court's opinion did not address the breach of contract claim.
Professor Goldman expresses surprise that the Magistrate allowed the breach of contract claim to stand. Other New York courts have found that contracts clauses that prohibit customer reviews are a deceptive business violate New York's consumer protection laws. Professor Goldman also points out that they violate public policy regardless of New York law.
Thursday, March 26, 2015
Today's New York Times reports that Microsoft will require the companies with which it partners, its contractors and vendors who employ more than 50 workers, to provide their employees who do work for Microsoft with 15 days of annual paid sick leave and vacation time. Microsoft expects that it will have to increase its pay to these partners to help them with the added expense of the policy.
As the Times points out, it is a very American approach to the protection of workers' rights. Congress will not act and only a few state legislatures have done so. Microsoft, like other large technology companies, can afford to provide decent wages and benefits to its workers. However, companies increasingly prefer to contract work out to small companies that do not treat their workers nearly as well.
The Times notes that the gap is not only between skilled computer programmers and unskilled or semi-skilled janitors or groundskeepers but also between whites and African Americans and Latinos. While the latter, traditionally-underrepresented minorities account for our 3-4% of tech workers, they account for 75% of janitorial and maintenance workers. Eschewing Google's and Facebook's approaches of replacing contract workers with its own employees, entitled to company benefits, Microsoft has explained its move in a manner also consistent with the great American tradition of enlightened self interest. Microsoft general counsel explained that: 1) happy workers are more productive; and 2) sick workers who come to work can infect others.
This move can have a big impact, especially if other major companies follow Microsoft's lead, but I'm not sure that the effects will all be good for workers. If a contractor has some workers that work for Microsoft and some that don't, the Microsoft jobs suddenly become highly sought-after. A company may try to stay below the 50-employee threshold to avoid the private regulation. Or it may divide Microsoft work among its staff (in the interests of internal morale), which might dilute the effects of the regulation. If you do only 20% of your work for Microsoft, do you only qualify for three days of vacation/sick leave? It may take a few years (and a few contracts disputes) to work out the kinks.
Monday, March 23, 2015
As reported here in Onward State, Former Penn State University President Graham Spanier (left) is now suing his former employer for breach of contract, while also naming the University and former FBI Director Louis Freeh in a defamation claim. The allegations stem from the Freeh Report, which Mr. Freeh undertook as a private consultant hired to look into allegations of sexual misconduct within the Penn State athletics program. The complaint alleges that the University breached its separation agreement with him by publicizing the Freeh Report and through other statements. Mr. Spanier has set up a website purporting to refute the findings of the Freeh Report.
In a potentially very interesting, bizarre and short(!) opinion, the Delaware Supreme Court weighed in on a hypothetical case not before it in Friedman v. Khosrowshahi, No. 442,2014 (March 6, 2015). The Court said that if a stockholder brings suit alleging breach of a stockholder approved plan as a contract, and she seeks recovery under contract law, such a plaintiff would not have to make demand on the board before proceeding in a derivative action because "directors arguably have no discretion to violate the terms of a stockholder adopted compensation plan whose terms cannot be amended without the stockholders’ approval."
MarketWired.com reports that Canadian purchasers of Lenovo computers are seeking $10 million in breach of contract damages for Lenovo's violation of their privacy rights by installing Superfish on their personal computers. Superfish allegedly makes it possible for third parties to use wireless networks to steal private information off of Lenovo computers. The Statement of Claim (Canadian, we assume for Complaint) can be found here.
And, as Spring training is underway and Opening Day is only a fortnight away, we should mention the ongoing contract dispute between the Chicago Cubs and the parties with whom the team entered into a revenue-sharing agreement relating to rooftop seating across the street from Wrigley Field. The Cubs want to put up a video board that the Sheffield Avenue property owners claim will block views in violation of the terms of the revenue-sharing agreement. The latest news on the subject matter can be found on Crain's Chicago Business here. The Cubs' opposition to plaintiffs' motion for an injunction is here. As a life-long Cubs fan, I stand by my view that not having to watch the Cubs play actually enhances the value of the seats, but hope springs eternal.
As reported here in the Cranston Patch, a teachers' union is suing a school district for breach of contract and violations of civil and religious rights. The school district decided to hold classes on religious holidays, including Good Friday, but to permit teachers two days of religious leave each year. The school district then denied leave to teachers who sought to use their leave on Good Friday. The community is predominantly Catholic, and it is likely that the school district had not plan for replacing the 200 teachers who applied for leave on Good Friday. Heavy snows and the large number of snow days this year might also have played a role.