Second Circuit Court of Appeals Adopts “Primary Beneficiary Test” and Provides Guidance on the Unpaid Intern Question

On July 2, 2015, the Second Circuit Court of Appeals issued significant pro-employer decisions in Glatt v. Fox Searchlight Pictures (Nos. 13-4478-cv, 13-4481-cv) (“Fox”) and Wang v. Hearst Corp. (No. 13-4480-cv) (“Hearst”) that served as a setback for the plaintiffs in both cases.  In both cases, the plaintiffs – unpaid interns who had spent time at Fox Searchlight and Hearst magazines, respectively – alleged that they should have been classified as employees and paid for their time.  As a result, they brought claims for, among other things, unpaid wages on a class-wide basis.  The district court decisions were split.  In Fox, the judge granted summary judgment on the issue that interns were employees and permitted the plaintiffs to proceed on a class and collective basis.  To the contrary, in Hearst, the judge denied summary judgment on the same issue and denied the plaintiffs’ motion to proceed as a class.  On appeal in both cases, the Second Circuit adopted a balancing standard called the “primary beneficiary test” and held that district courts should use this test when analyzing whether an individual should have been classified as an intern or an employee.  The Second Circuit also held that the proposed classes of interns in both cases failed to satisfy the requisite standards in order to proceed on a class-wide basis. Continue Reading

Supreme Court Sides with EEOC in Abercrombie & Fitch Hijab Case

On Monday, June 1, 2015, the United States Supreme Court reversed a judgment of the United States Court of Appeals for the Tenth Circuit which had granted Abercrombie & Fitch (“Abercrombie”) summary judgment in a religious accommodation case brought by a job applicant who wore a headscarf (a hijab) to an interview, but did not mention her religion or request an exception to Abercrombie’s dress code.  The Court’s 8-1 decision in Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc. rejected the Tenth Circuit’s holding that, to prove discrimination under Title VII of the Civil Rights Act (“Title VII”), it is an applicant’s burden to advise an employer of a religious practice necessitating accommodation.  Instead, the Court found that a job applicant need only demonstrate that a prospective employer’s desire to avoid providing a religious accommodation was a motivating factor in its decision not to hire, not that the employer actually knew of the need for an accommodation.    Continue Reading

Will The FTC Issue Native Advertising Guidelines in 2015?

As we previously reported last year, native advertisements represent an increasingly popular and effective means of promotion for marketers that also presents a major challenge for the Federal Trade Commission (“FTC”), an organization whose primary duty is to protect consumers from false and misleading advertising.  Native advertising, also known as corporate content or branded journalism, features marketing material that is designed to mimic the look and feel of the host website.  While the look of native advertisements differs depending on the host website, the underlying goal for marketers is the same — to make the advertisement look and feel like editorial content.  Continue Reading

There’s No Such Thing As a Free Sample

Social media allows users to effortlessly communicate globally with nothing more than a few keystrokes.  Advertisers have harnessed the power of social media bloggers and incorporated it as a key component of their advertising campaigns.  This practice is known as “consumer-to-consumer” marketing or “consumer-generated media” marketing.  While consumer-to-consumer marketing is a prevalent practice, especially in the fashion industry, the use of bloggers to promote fashion products to consumers necessitates compliance issues under the Federal Trade Commission Act. Continue Reading

Facing a Blizzard of Legal Challenges as In-House Counsel

Spring 2015 New York Fashion Week
February 17, 2015

Fashion Insider Interview: A Behind-the-Scenes Perspective from Bruce Weber’s and Nan Bush’s Little Bear

  • Robert Darwell, Sheppard, Mullin, Richter & Hampton LLP
  • Producer Jeannette Shaheen, Little Bear, Inc.

A Fashionista’s Guide to Competition and Cartel Laws

  • Daniel Brown, Sheppard, Mullin, Richter & Hampton LLP

Practical Approaches from the US and EC to International Conundrums of Confidentiality: What You Need to Know About Cross-Border Attorney-Client and Work Product Privileges and E-Discovery

  • Theodore Max, Sheppard, Mullin, Richter & Hampton LLP
  • Bryony Cain, Bird & Bird LLP

Continue Reading

U.S. Supreme Court Rules that Security Screening Time is Non-Compensable Under Federal Law and The Portal-to-Portal Act

In a decision issued on Tuesday, December 9, 2014, the United States Supreme Court ruled that employees are not entitled to compensation under the federal Fair Labor Standards Act (“FLSA”) for the time they spend waiting to undergo, and actually do undergo, security screenings.  The Court’s unanimous decision in Integrity Staffing Solutions, Inc. v. Busk, et al., reverses a judgment of the United States Court of Appeal for the Ninth Circuit which found that Integrity Staffing employees could state an unpaid wages claim under the FLSA for undergoing a daily security screening because the screenings were required by, and for the benefit of, their employer.

Continue Reading

FTC Takes Action Against Unsubstantiated Caffeine-Infused Shapewear Weight-Loss Claims

Wacoal America and Norm Thompson, both manufacturers of women’s shapewear, recently entered into consent orders to pay sums of $230,000 and $1.3 million, respectively, and agree to  not make any false and misleading future claims that their products cause weight loss, fat loss or eliminate cellulite as the result of FTC enforcement action as the result of making unsubstantiated weight-loss claims.  This is yet another reminder that any claims made in advertisements or marketing materials as to weight-loss, fat-loss or cellulite elimination must be substantiated by a scientific study or the manufacturer may face an FTC action and potentially substantial fines.

Continue Reading

Out of Africa: Business Summit Focuses On Renewal of AGOA

The United States government in conjunction with the Bloomberg Philanthropies held the first ever US-Africa Business Summit on August 4–6, 2014 to discuss trade opportunities in Africa. A primary focus of discussion at the summit was the Africa Growth and Opportunity Act (AGOA), a regulation passed in 2000 to implement trade benefit provisions for sub-Saharan Africa. A major benefit of AGOA is allowing duty-free import of textile and apparel materials from beneficiary countries in Africa to the United States. This provision is currently set to expire on September 30, 2015 however, stakeholders in the textile and apparel industry, both in the US and Africa, are now advocating for its extension.

Continue Reading

How to Protect Your Brand

Brands that create a credible emotional connection with the consumer demand higher consideration and establish and build brand loyalty. This program will discuss new legal strategies to apply and pitfalls to avoid in light of the key branding trends in the New Millennium with an update on recent developments in 2014.

Please join Sheppard Mullin for our monthly Third Thursday Emerging Company Webinar Series educating entrepreneurs and emerging companies on the key legal issues they face during the growth of their companies. These complimentary 1-hour webinars are held through WebEx on the third Thursday of the month at noon. They will have both an audio and PowerPoint component.

Continue Reading

LexBlog