Do this site’s terms and conditions mean anything?

When you buy something online, do you read the site’s terms and conditions? Of course not, but why not? The answer to the second question makes a difference whether the site owner can hold you to them as a contract.

One of the big issues in internet law is when a website operator can enforce terms and conditions that no one really reads. Twice recently the Ninth Circuit Court of Appeals has refused to enforce particular ones. In the first case, Donovan Lee bought a background report from Intelius. A year later, he learned that he had unintentionally also subscribed to a “Family Safety Report” that, for $19.95 a month, would tell him if sex offenders moved into his neighborhood. (Washington, where Lee lived, like California, has a website where he could get the same information free). He also learned that not Intelius but Adaptive Marketing, a completely separate company, was charging his credit card every month. Lee responded with a class-action suit against both.

Adaptive Marketing claimed that Lee could not sue it because the terms and conditions on Intelius’s site said that he had to arbitrate.  But to get to the terms and conditions, Lee first would have to read the gray print next to the button he clicked, which would direct him to two long paragraphs, written in gray on a beige background. At the end of those paragraphs, he would find a link to a different page with the terms and conditions. Paragraph 10 of the terms and conditions had the part about arbitration. Nowhere did the website even mention Adaptive Marketing, only Intelius.

The court held that Adaptive Marketing was just not a party to the contract, so it could not enforce the arbitration agreement. What’s more, the entire website was so confusing that Lee could hardly have known he was agreeing to buy a Family Safety Report, much less that he was agreeing to arbitrate any dispute. As a result, the terms and conditions were not a contract.

Yesterday, in a second case, the court held that Barnes & Noble’s browsewrap agreement was not a contract. Kevin Nguyen ordered two HP TouchPads advertised at fire-sale prices from B&N. B&N confirmed the sale but, citing unexpected demand, canceled it the next day. Like Lee, Nguyen brought a class action suit, saying that he lost the opportunity to buy the tablets elsewhere. B&N, like Adaptive Marketing, said that its site’s terms and conditions prevented Nguyen from suing.

Wait a minute, you should say, how can Barnes & Noble cancel Nguyen’s purchase but still stick him with the contract? Because its terms of use say that they apply to anyone visiting its website, even to browse. The court disagreed. People browsing websites do not look at the terms of use without some reason to think that they are supposed to.

In both cases, the court suggested that the terms might be enforceable under other circumstances. It only lightly touched on the real problem with them. The whole point of a contract is to allow people signing it to know what to expect. If you don’t read it, it’s your fault if there’s something in it you don’t like. But no one can be expected put the time and energy into reading a website’s terms and conditions before making a small purchase.

A report from Intelius costs between $4.00 and $50.00. Its terms and conditions come to three pages, single spaced, in twelve-point type. No one would pay $4.00 to buy a pen or an ice cream cone from their local store if they first had to read and sign a three-page contract. The only reason that ecommerce companies can require these contracts is because they know their customers will ignore them.

Even more egregious are Barnes & Noble’s terms of use. (Warning: who knows what you’ve agreed to by clicking.) Again, printed in twelve-point type, it comes to over eleven pages. Add on the copyright and privacy policies, and it’s fourteen. Who would go into a store to browse if they first had to read and sign a fourteen-page agreement? A writing that one party cannot reasonably expect the other to read just should not be a contract.

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BYO? No, no.

According to a California court yesterday, employers may not require employees to use their own cell phones for work. Or at least not without paying them. That paying-them part may prove hard.

The California Labor Code requires an employer to reimburse its employees for any thing that they spend discharging their duties or following the employer’s orders. So for example, California employers cannot require employees to buy a uniform, and a mall retailer that makes its employee dress in the clothes it sells must pay for them. The idea is that being an employer means paying the costs of running the business.

Schwan’s Home Services, like many businesses, makes its employees use their own cell phones while working. It thought that it did not have to pay them for doing so because it was not making them buy the phones. The employees, after all, would have had the phones even if they did not have the job. The court pooh-poohed this argument: “Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee.”

What remains to be seen is how the employers will pay for the employee’s phones. Will they require the employees seeking reimbursement to turn in their cell-phone records every month? Those employers will then pay their employees the proportionate cost of using the phone for work rather than for private matters. They can also see just how much time their employees are making personal calls when they should be working.

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Caregivers to get overtime

Big changes are under way for caregivers and their employers. Up until now, caregivers in disabled people’s homes have been exempt form overtime under California and federal law so long as they spend the bulk of their time actually giving care. On September 23, Governor Brown signed Assembly Bill 241, under which, starting January 1, 2014, most in California working more than 9 hours in a day or 45 in a week will get time and a half. That’s still one more hour at regular pay every day than everyone else, who get overtime after eight. And caregivers paid by government agencies, including those paid by In Home Support Services, will still be exempt.

But not for long. But not for long. A year later, even bigger changes kick in under federal law. Caregivers will get overtime after forty hours from an agency that employs them. Most caregivers are considered employed by both the person and by an agency, and only the agency will owe overtime to these jointly employed caregivers.

The new federal rules will not make a family employing a caregiver pay overtime. But they will limit what the family can have the caregiver do. A too-helpful caregiver who washes everyone’s dishes or changes the disabled person’s bandages gets overtime.

Under the new rules, exempt caregivers will have to spend most their time “elder sitting”: talking, playing games, reading out loud, going on drives or walks, or just being there in case something happens. Caregivers can also spend up to twenty percent of their time doing things like cooking for their charges, cleaning, washing their clothes, and bathing them.

Any one doing much more than that gets overtime. They cook, clean, or do laundry for the rest of the family, and they get time and a half.

Many caregivers do little things that ordinarily a nurse does. They might dress wounds, take blood pressure, check insulin levels, give medications, even give shots. Under the new rules, a caregiver doing anything like that is a regular employee.

Anyone hiring a caregiver for a disabled relative should talk to an attorney about what they can ask the caregiver to do without having to pay overtime. A good rule of thumb is that if a housekeeper or if nursing-home staff would do it, the caregiver can’t. Housekeepers and nursing-home staff get overtime, and a caregiver doing the same work should, too.

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The courts finally side with homeowners against banks

For a while, homeowners having trouble with their mortgages were not faring well in the courts. A couple of years ago, one even held that homeowners who had received a formal foreclosure notice could not challenge the bank’s authority to sell their house. They could not make the bank show that it owed the mortgage or that they owed as much money as it said they did. They had to choose either to pay up or to risk losing their home.

At least in one area, the tide seems to be turning. Every lawyer working with homeowners has heard stories of banks promising to offer mortgage modifications but not following through. The bank would give the homeowners a trial payment period and tell them that if they paid on time for four months or so, it would offer them a loan mod. The homeowners paid right on time, but upon asking the bank about the modification, they got nothing back. Instead, the next they heard, the bank was selling the house.

For a while, homeowners challenging these foreclosures in court did not do well. The banks argued, and the courts agreed, that the bank’s promises were not an enforceable contract. The homeowners promised to do nothing but pay their mortgage, which they were already supposed to do. Also, the banks promised to do no more than make an offer.

In any other cases, the banks’ arguments would be perfectly sound. Every contract requires both parties to give something up and get something back, and the homeowners weren’t giving up anything they hadn’t already promised. And the courts only enforce what the parties have agreed to; they can’t force the parties to agree. An agreement to agree, or to make an offer, is no agreement at all.

But now the banks are losing. By accepting money under the Troubled Asset Relief Program (or TARP), they subject themselves to HAMP, the Home Affordable Modification Prorgrams. And HAMP requires them to make a good faith offer.

Any homeowner who has lost a home, or is threatened with foreclosure, after the bank offered a loan mod should see an attorney right away.

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Landlords and medical marijuana

Do tenants with a pot card have the right to grow or use marijuana at their homes? The smell left by second-hand smoke may be the least of the landlord’s worries. Tenants with a grow, even one the Compassionate Use Act allows, may attract attention from people that landlords would rather not come to the house. More than one holder of a pot card has tried to use it to shield a commercial grow. Some of those may have consulted with a medical professional specifically to further their agricultural ambitions, but others simply could not resist the temptation to grow a little more than they needed.

Despite Proposition 215, a landlord may evict a tenant growing marijuana on the premises. The law only exempts card holders from prosecution under California law. It does not give them rights against anyone else. Tenants cannot grow against their landlord’s wishes.

Growing marijuana is still a crime under federal law, and a landlord may evict a tenant who uses the premises for an unlawful purpose.  Landlords knowing of, or turning a blind eye to, tenants’ marijuana cultivation are also committing a federal crime for which they face up to twenty years in prison. (Attorney General Eric Holder has announced that the Justice Department would generally not prosecute marijuana users complying with state law. Nonetheless, attorney’s ethical rules prohibit me from forecasting the likelihood of either prosecution or sentence.)

What about tenants who merely use or possess marijuana, whether medically or recreationally? After all, possession of any amount of marijuana is itself a federal crime. Whether the landlord may evict depends on how much the tenant is smoking: how continuous it is and whether it threatens some interest the landlord has in the property. So occasional use of marijuana would not be grounds for eviction. More extensive use, which could damage to the building or give it a reputation as drug house, is a different matter.

Laws against  marijuana may well be stupid. But we have to live under the laws we have, not the ones we think would be better.

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Some internet reviews do cross the line

A while back, I pointed out that a court had rejected a defamation claim based on an angry Ripoff Report posting. The court said that those sites tend to attract angry people so most readers know to take anything posted in them with several grains of salt.

But, another court chimed in, sometimes there’s just not enough salt in the shaker. A San Francisco man named Andreas Papaliolios posted in a Yelp review that his former landlords’ obnoxious behavior had likely caused the deaths of three people in the building, had caused several long-term residents to move out shortly after buying it, and had tried to evict several others. The landlords had evidence that none of this was true; instead, two of the three tenants who had supposedly died were still alive and the only person they had tried to evict was Mr. Papaliolios. All of those statements, the court held, could be defamatory. (But calling one new owner a “sociopathic narcissist” was okay.)

How to distinguish acceptable exaggerated criticism from unacceptable libel? The court pointed out that Yelp, unlike sites Ripoff Report or Craigslist’s Rants and Raves, invites more nuanced reviews. It also noted that Mr. Papaliolios had vouched for the accuracy of his statements in his review.

Fairness to Mr. Papaliolios requires pointing out that no court or jury has said that he indeed had defamed his landlords. Instead, this court held only that a jury could find that he defamed them if it believed them and not him.

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What about sales staff stocking shelves?

A while back, I posted about a recent California court ruling about auto repair shops paying its mechanics by the job. The court said that the shops also had to pay the mechanics minimum wage for all the time that they were on the job but not actually working on a car. Because the employer required them there, it had to pay them for the time they spent training, cleaning up, or just waiting for a customer.

I wondered if the same rule applied to sales people paid on commission. Do the stores have to pay them for the time spent not actually selling?

A federal judge in San Diego has said that they sure do (mostly). Nordstroms requires its sales staff to spend up to 3o minutes each work day stocking shelves. It also requires them to be at the store at least 40 minutes before opening or at least 40 minutes after closing. The employees brought a class-action lawsuit, saying that Nordstroms also had to pay them for the time they are at work but not engaged in sales.

Nordstroms pointed out that it made sure that the employees always made at least minimum wage over the course of the day. It also argued that everything that, even though the sales staff wasn’t directly selling, it was at least engaged in activity that promoted sales.

No matter, said the judge. California employees have to be paid for every hour on the job. If they are paid on commission or by the piece, they get minimum wage for all the time when they can’t earn a commission or the piece rate. (Evidently the issue was not very difficult: the Court of Appeals thought Nordstrom’s request to overturn the judge’s ruling was frivolous.)

But no one has answered the question: what about the time that that the staff has to be at the store, but there are no customers to whom to sell? That’s probably never an issue at Nordstroms. In any store where it is an issue, the sales staff should probably be thinking about moving on.

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