In addition to facing potential civil liability for invasion of privacy or trespassing, drone operators who record images and/or use drones in certain places in Texas also risk facing criminal charges.
The applicable Texas statute very broadly provides that “[a] person commits an offense if the person uses an unmanned aircraft to capture an image of an individual or privately owned real property in this state with the intent to conduct surveillance on the individual or property captured in the image.” Tex. Gov’t Code § 423.003(a). The statute, unhelpfully, fails to define “surveillance” or otherwise explain the nature of this “capture an image” criminal offense. Furthermore, whereas the “capture an image” crime is a Class C misdemeanor, the Texas legislature, emphasizing the serious of the issue in Texas, also made “use of an image” a separate Class B misdemeanor for each image a person uses. Tex. Gov’t Code § 423.004(b), (c). It is worth noting that drone operators may assert a defense to these offenses if they immediately destroy the image(s) and cease use upon becoming aware it/they were obtained in violation of the statute.
Separate and apart from recording images, drone operators in Texas must also be aware of geography and, in particular, the facilities over which they operate. The Texas legislature has made it a crime, too, to “operate an unmanned aircraft over a correctional facility, detention facility, or critical infrastructure facility and the unmanned aircraft is not higher than 400 feet above ground level.” Tex. Gov’t Code § 423.0045(b)(1). Importantly, “critical infrastructure facility” include things like refineries, electric power generating facilities, chemical manufacturing facility, water plants, telecommunications switching office, port, railroad switching yards, and truck terminals. Similarly, unless the drone operator meets specific exceptions, it is a criminal offense to operate a drone over a sports venue at less than 400 feet above ground level. Tex. Gov’t Code § 423.0046(b).
And, in addition to setting forth criminal penalties, the Texas legislature also specifically outlined a civil cause of action with statutory penalties relating to improper drone use. More specifically, a drone operator who has improperly acquired images of a person or property may be subject to a civil penalty of $5,000 for images captured during a single episode, $10,000 for use of such images, actual damages, and attorneys’ fees. This statutory liability, of course, is in addition to common law tort-based recovery under theories including invasion of privacy, nuisance, trespass, and the like. Tex. Gov’t Code § 423.006(a).
A number of open questions remain with respect to the precise parameters of these provisions, as well as how vigorously the criminal provisions will be enforced. Nonetheless, it is clear that Texas takes privacy and property rights seriously and, unlike many other states, is legislating proactively to protect those rights concomitantly with the increase personal and commercial use of drones. Those messages should inform drone operators’ decision-making, especially as it relates to potential liability exposure.
The advent of new technology brings with it new theories of liability and innovation of old liability theories in novel contexts for companies and individuals utilizing that new technology. The increasing use of unmanned aerial vehicles and unmanned aerial systems – collectively, drones – for personal and commercial uses exemplifies this concept. Manufacturers, individual private operators, and commercial enterprises alike face exposure to potentially significant liability relating to the manufacture, use, and operation of drones.
As drone technology has advanced so have the governmental, personal, and commercial applications for which drones are utilized. In addition to governmental use of drones for things like border security and military operations, individuals, for example, may also use drones for sport, photography or personal entertainment. And various companies increasingly rely and/or consider relying on drones for commercial activities like surveillance, infrastructure inspection and survey, product delivery, traffic/activity monitoring, remote site inspections, livestock maintenance, crop surveys, post-loss inspection (e.g., flood or fire damage inspections), and commercial photography. But each of these uses, and the many other innovative ways drones are employed, give rise to potential liability and novel legal issues. Further, perhaps not surprisingly, that potential liability and those novel legal issues may depend, at least in part, on the state in which drones are manufactured or operated; the laws applicable to drone use and associated liability may vary by state, requiring a more focused inquiry for those companies operating in multiple states.
Various law enforcement departments, for example, have used or considered using drones for surveillance of suspects and for property searches. One can readily imagine the utility of such aerial drone technology to search large properties for drug crops, missing persons, suspects or other indicia of criminal activity. But such use naturally generates questions as to the legality or constitutionality of drone use for law enforcement “searches.” Indeed, a number of states have specifically restricted the use of drones by law enforcement without a search warrant (AK, FL, ME, MT, ND, NV, OR, TN, TX, UT, VA, WI). And in the non-law enforcement context, individuals and companies using drones for similar purposes must be cognizant of potential liability for trespassing and invasion of privacy.
The importance of a state-by-state examination of permissible drone use cannot be overstated. Whereas a number of states prohibit the use of drones to capture images of persons or property within certain space limits and/or without the owners’ consent, North Dakota prohibits all private drone use. That is a significant distinction worthy of note. Similarly, some states, like Texas, restrict the use of drones within certain space limits of critical infrastructure facilities and for certain purposes. And many states have yet to adopt specific legislation governing the use of drones for private or commercial purposes.
Separate and apart from drone-specific state law, traditional tort law should also be considered by drone manufacturers and operators. Standard notions of products liability, strict liability, and negligence are all likely equally applicable to drones, creating fertile ground for plaintiffs’ attorneys to pursue litigation for personal injury and property damage proximately caused by drones. Crashes, especially given the complex technology involved and the ability to operate drones beyond line-of-sight of the operator, are, after all, arguably reasonably foreseeable and may proximately cause personal injury and/or property damage. And commercial enterprises operating drones may also have business interruption claims depending on the cause of drone failure or other accident.
Even under circumstances in which a drone operates as designed and does not cause personal injury or property damage, per se, drone operators may still be exposed to liability for potential claims of trespass, nuisance and/or for invasion of privacy. It is not uncommon, after all, for drones to incorporate photographic and/or video recording capabilities. Use of such drones where individuals have a reasonable expectation of privacy may open up additional bases for liability. But the parameters for such liability are not entirely clear (e.g., how many vertical feet above private property are included in the private property owner’s property or curtilage) and may vary by state. In Texas, for example, the Texas Privacy Act provides that an offense is committed when a person uses a drone “with the intent to conduct surveillance on the individual or property captured in the image.” Accordingly, it is important for drone operators to be cognizant of state laws that may be applicable to drones and that likely differ by and between different states.
As more and more individuals and companies incorporate drone technology into their operations, it is reasonable to expect a concomitant rise in litigation asserting claims against manufacturers and operators of drones for resulting damages caused by those drones. With that in mind, it becomes increasingly important for those manufacturers and operators to have a clear understanding of the legal landscape in which they operate.
In Hively v. Ivy Technical Community College, 853 F.3d 339 (7th Cir. 2017) the Seventh Circuit Court of Appeals recently became the first federal appellate court to rule that Title VII prohibits discrimination based on sexual orientation. With its en banc ruling from the full panel of Seventh Circuit judges, the Court has created a split with other federal appellate courts that may set up an ultimate showdown in the Supreme Court.
Ms. Hively, an adjunct professor at Ivy Technical Community College, sued the college under Title VII, asserting that she was denied a full-time professor position and her adjunct contract was not renewed because she is a lesbian. Initially, the federal district court dismissed her lawsuit, finding that she did not state a viable legal claim because sexual orientation is not a protected class under Title VII. On appeal, a 3-judge panel affirmed the district court’s determination, observing that although questions existed as to the viability of the claim, the panel was bound by prior Seventh Circuit precedent holding that discrimination on the basis of sexual orientation was not protected by Title VII.
Not content with the panel’s decision, Hively sought en banc consideration by all 11 judges of the Seventh Circuit. The Court agreed to en banc rehearing and rendered its 8-3 decision holding that discrimination on the basis of sexual orientation is a form of sex discrimination that is covered by Title VII. The majority acknowledged that it could not “amend” Title VII to add new protected classes, but found that discrimination on the basis of sexual orientation was a subset of discrimination on the basis of sex, which is specifically included in the statute. It did so, at least in part, by evaluating whether the college would have treated her differently if she were a man married to a woman rather than a woman married to or living with a woman. Further, the Court considered the college’s treatment of her based on her failure to conform to standard female stereotypes because she is not heterosexual, noting that sex stereotyping has previously been determined to be a form of sex discrimination.
Although the Hively decision is only binding in federal courts in the Seventh Circuit (Illinois, Indiana, and Wisconsin), it does give rise to the prospect of Supreme Court consideration given that every federal court to have previously addressed the issue has held that Title VII does not protect against sexual orientation discrimination. And the decision may be indicative of a trend about which employers should be aware as they consider their employment decisions and workplace policies.
Unless and until the issue proceeds to the Supreme Court and is ultimately decided there, a split in legal interpretation exists that means the law may be somewhat different for employers depending on their geographic location. Nonetheless, it is clear in the Seventh Circuit “that discrimination on the basis of sexual orientation is a form of sex discrimination” that is prohibited by Title VII. And employers should be vigilant in monitoring legal developments and interpretations as they may impact employment decisions and policies.
Amidst loss and devastation, Hurricane Harvey triggers timely consideration of property damages claims from “forces of nature” under Texas insurance policies.
With the widespread devastation wrought by Hurricane Harvey through a large swathe of South Texas, insurance companies will undoubtedly be on the receiving end of numerous policy claims from property owners. Although it may initially seem too soon or too insensitive to turn to concerns over property claims while the storm still rages, an important change in Texas law demands timely consideration of the issue.
A new Texas law governing insurance claims, House Bill 1774, becomes effective this Friday, September 1, 2017. This statute adds Chapter 542A to the Texas Insurance Code, titled “Certain Consumer Actions Related to Claims for Property Damage.” The statute specifically applies to claims regarding property damage or loss caused in any part by “forces of nature.” Although the initial focus of the bill was on lawsuit abuse from hailstorm litigation, its broad scope includes weather events such as earthquakes, wildfires, floods, tornados, lightning, and, of timely interest, hurricanes.
Importantly, changes to Texas insurance law include the imposition of stricter pre-suit notice requirements, inspection requirements, and limitations on attorneys’ fees and interest. Further, the new law will reduce penalties against insurance companies that are determined to have failed to pay valid claims, paid less than amounts due, or failed to timely pay claims. With respect to potential litigation, the new law imposes stricter notice requirements for plaintiffs’ attorneys and, in the event the policyholder ultimately prevails, reduces the amount of penalty interest for failing to promptly pay a claim from 18% to about 10% (5% above prejudgment interest established under Finance Code).
Insurance companies, therefore, face somewhat less liability exposure under the new law and there are elevated hurdles for plaintiffs to overcome in pursuing litigation.
Consequently, the timing of policyholder claims is critical to the law applicable to the insurance companies’ processing of those claims. That is, for a policyholder to take advantage of existing Texas law, and the enhanced penalties contained therein, the policyholder must file a claim in writing and advise the insurance company of the facts relating to the claim by this Thursday, August 31, 2017. Otherwise, House Bill 1774 will likely govern such claims filed on or after September 1st.
To the extent litigation arises relating to claims for property damage or loss caused in any part by “forces of nature,” including Hurricane Harvey, the timing of the policyholder’s claim will be key to how litigation proceeds and the insurance company’s liability exposure.
In the Fifth Circuit, Attendance May be an Essential Function of Most Jobs and Telecommuting is Not Necessarily a Reasonable Accommodation
With the advent of an increasingly interconnected economy and advancement in technology permitting employees to, in many cases, work seamlessly from home, employers are increasingly facing requests from allegedly disabled employees to permit long-term and/or permanent telecommuting as a reasonable accommodation for their alleged disabilities. Under the ADA, of course, employers must generally engage in an interactive or collaborative process with the employee claiming to be disabled to accommodate the known limitations of an employee’s disability, if possible; assuming the employee can perform the essential functions of the job.
But in light of existing technology, is open-ended telecommuting a reasonable accommodation?
Probably not, at least in the Fifth Circuit.
In Credeur v. State of Louisiana, the Fifth Circuit recently concluded that in most cases employers are not obligated to permit telecommuting as a reasonable accommodation. And, importantly, the Court reaffirmed the proposition that it is, in the first instance, within employers’ sound discretion to identify the “essential functions” of their jobs, which may include attendance. Those “essential functions” are critical to the analysis because to be “qualified” under the ADA, the employee must be able to perform the essential functions of the job with or without reasonable accommodation.
The Court’s determination arose in the context of a lawsuit brought by a litigation attorney in the State of Louisiana’s Office of the Attorney General who sued when her request for indefinite telecommuting was rejected. She argued that working in the office was not an essential function of the job and, following complications from a kidney transplant, working from home was necessary. The Fifth Circuit, however, noted that “regular work-site attendance is an essential function of most jobs” and particularly where the job is interactive and involves a significant degree of collaboration or teamwork. Further, the Court noted that it must give the greatest weight to the employer’s judgment as to the job’s essential functions. The employee’s subjective judgment does not create a genuine dispute of material fact sufficient to withstand the employer’s motion for summary judgment.
That is, it is not enough for the employee to merely proffer her opinion that it isn’t necessary to be in the office or that a particular employer requirement is unnecessary. Instead, the Court does not allow employees to define their jobs’ essential functions based solely on their own personal opinions, viewpoints, and experience.
“Construing the ADA to require employers to offer the option of unlimited telecommuting to a disabled employee would have a chilling effect. Rather than offer such benefits, companies would tighten their telecommuting policies to avoid liability. The ADA does not require an employer to ‘reallocate essential functions’ to accommodate an employee with a disability.”
Notwithstanding the favorable Fifth Circuit assessment of the issue, employers should approach such situations cautiously. In all likelihood, a court’s assessment will be a case-by-case determination predicated upon the specific job at issue, the tasks involved, and prior analysis of the issue by the employer. To that end, employers would be well advised to revisit their job descriptions and their policies with respect to telecommuting employees.
Credeur v. State of Louisiana, No. 16-30658 (5th Cir., June 23, 2017)
Sixth Circuit Determines Employer Cannot Be Held Liable Under Title VII for Sexual Harassment By Manager Who Lacked Actual Authority to Take Tangible Employment Action
In a sexual harassment lawsuit brought by the EEOC, the Sixth Circuit last week affirmed the lower court’s summary judgment for the employer, concluding that “[b]ecause [the manager] did not take any tangible employment action against his co-workers and indeed had no authority to do so, the manager was not a supervisor under Title VII and thus [the employer] cannot be liable for the conduct alleged.” EEOC v. AutoZone, Inc., No. 16-6387 (6th Cir. June 9, 2017).
The EEOC filed suit against AutoZone based on allegations that a store manager had sexually harassed several store employees. Importantly, neither the district court nor the court of appeals relied on the accused harasser’s job title – store manager – to impose vicarious liability on the company. Instead, the courts were persuaded by the store manager’s actual job duties and responsibilities, which did not include the authority to fire, demote, promote, transfer or otherwise impose adverse employment action against employees.
Whether the store manager was a supervisor is critical to an employer’s vicarious liability under Title VII. As the Sixth Circuit explained, employers are vicariously liable for a supervisor’s sexual harassment without any showing of employer negligence if the agency relationship (e.g., status as supervisor) aided the harassment. If the alleged harasser is not a supervisor, however, the employer may be held liable if it was negligent in controlling working conditions (i.e., knew or should have known of the harassment but failed to take prompt and appropriate corrective action). And the Court noted that an employee is a “supervisor” for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.
In this case, the Sixth Circuit reviewed the evidence of the store manager’s authority and found that he was not a supervisor for purposes of Title VII liability. He did not have authority to take tangible employment action against the victims. AutoZone did not, for example, empower the store manager to fire, demote, promote, or transfer any employees. Although the store manager could initiate the disciplinary process and recommend demotion or promotion, his recommendations were not binding, and his ability to influence the district manager did not suffice to turn him into his victims’ supervisor. Nor did his ability to direct the victims’ work at the store or his title as “store manager” make him the victims’ supervisor for purposes of Title VII.
An important takeaway from this opinion for employers is the prospect of focusing courts on the actual authority of management-level personnel, or, more precisely, the lack of such authority, as a legal defense to vicarious liability under Title VII. Whether, regardless of job title, the accused harasser has actual authority to take tangible employment action against his victims may be critical to the employer’s legal defense.
Last Monday, the Colorado Supreme Court, affirming the lower court’s ruling, issued a decision essentially upholding condominium developers’ right to require arbitration of construction-defect disputes. See Vallagio at Inverness Residential Condo. Ass’n v. Metro. Homes, Inc., et al., Case No. 15SC508 (CO Sup. Ct.) (June 5, 2017). The Court’s 5-2 decision last week, combined with recent state legislation (House Bill 1279) requiring approval by a majority of condominium owners to pursue legal action against condominium developers, may reinvigorate what has been a dormant market for the better part of a decade.
The dispute presented to the Colorado Supreme Court concerned a so-called “right to consent” in which the condominium developer attempted to contractually retain a perpetual right to consent to any subsequent homeowners association’s proposed amendments to the community’s declarations regarding arbitration for construction-defects claims. In short, the condominium developer included contract language preventing homeowners associations from subsequently removing arbitration requirements without its consent (i.e., the original declaration required binding arbitration of construction-defect claims and prohibited any amendment to the binding arbitration provision without the developer’s consent).
The underlying litigation was the product of construction defect claims asserted by unit owners. Unable to resolve their claims informally, the unit owners voted to amend the property declaration to remove the arbitration provision and the homeowners association then filed a lawsuit against the developer. In response, the developer moved to compel arbitration, arguing that the arbitration provision deprived the district court of jurisdiction and that the unit owners’ attempt to amend the provision was invalid because they failed to secure its consent. The homeowners association asserted that the right to consent was invalid under the Colorado Consumer Protection Act (CCPA) and the Colorado Common Interest Ownership Act (CCIOA), the latter of which governs rules between developers and property owners in communities with shared walls.
The Colorado Supreme Court, however, concluded that developers can, in fact, retain a perpetual right to consent. In arriving at its decision, the Court reviewed the language of the CCPA and the CCIOA, as well as the legislative intent underlying each statute. The majority determined that although the CCIOA bars developers from requiring thresholds higher than 67 percent of residents to make changes to contracted declarations, nothing in either law prohibits a developer from including a provision perpetually requiring its consent for particular amendments. Indeed, according to the majority opinion, such an outcome is consistent with the CCIO language and Colorado public policy favoring alternative dispute resolution, including arbitration.
Consequently, according to the Court, the developer is entitled to binding arbitration of construction-defect claims arising from the development and the homeowners cannot modify or amend the associated provisions without the developer’s consent.
As with non-compete agreements, employers are increasingly relying on non-disclosure agreements (“NDAs”) to protect their valuable, confidential information. Because of the importance of the underlying issues at stake in attempting to enforce NDAs (e.g., trade secrets and other competitively valuable information), it is important for employers to evaluate enforceability up front and appropriately invest time and money in proactively considering collateral issues that often arise in the NDA context. Some of those collateral issues include the following:
- Definition of confidential information. Rather than relying exclusively on general or nebulous terminology in the NDA, employers should, to the extent possible, attempt to set forth the type and/or categories of information subject to the NDA with some measure of particularity. Obviously it is best not to include what purports to be a comprehensive list, but some effort toward specificity in the type of information subject to the NDA will go a long way towards improving the chances of enforceability.
- Scope of confidential information. Employers should craft their NDAs to only encompass legitimately confidential or trade secret information. Overly broad NDAs that expansively encompass public or non-confidential information are less likely to be judicially enforced should litigation arise.
- Preserve confidentiality of the information. In addition to defining the information as confidential in the NDA, the employer must separately take steps to safeguard the confidentiality of that information. If the employer does not, it becomes increasingly likely that a court may conclude that the information is not really confidential or competitively sensitive and is not entitled to protection under the NDA.
- Protect trade secrets. Oftentimes, the definition of “confidential information” subject to a valid, enforceable NDA will differ in some respects from the scope of “trade secrets” protected by state and/or federal law. Employers should consider those differences, if any, in drafting their NDAs and in considering whether additional agreements are necessary to ensure legal protection of their trade secrets.
- Varying levels of protection may be necessary. Depending on the industry and type of information at issue, the NDA may need to be more specifically tailored to account for heightened levels of protection required for certain types of confidential information (g., health records, consumer date, personal identifying information). In such cases, the NDA should address the heightened protection and include contingencies for return and/or destruction of all data at the conclusion of employment, as well as data security and breach notification.
- Social media implications. Employers and employees alike should be aware of the impact of NDAs on social media accounts. In one recent case, for example, a former employee of a global recruiting and staffing firm was required to remove thousands of her LinkedIn contacts based on her former employer’s argument that those contacts actually belonged to the employer and not to the employee individually.
In preparing their NDAs, employers should consider these issues to ensure that the resulting agreement adequately addresses their concerns and does so in a manner most likely to be enforceable should litigation arise.
Harassment and discrimination complaints in the workplace have become increasingly common in recent years. As such, most employers will face such a complaint by one of their employee at some point during the operation of their business. How the employer responds may be critical to the potential imposition of liability (and to the employer’s legal defense).
Almost invariably, the employer will be best served by taking the complaint seriously and conducting an objective, thorough investigation into the allegations. Although the specific allegations at issue will dictate the precise nature of the ensuing investigation, employers would be well served following some general guidance for workplace investigations:
- Respond promptly. Rather than allowing the complaint to languish or delaying the response, employers should initiate an investigation promptly after receiving the complaint, and inform the complainant that it is doing so. A timely response suggests the employer takes the complaint seriously and keeping the complainant informed of the process may build better good will or minimize animosity toward the company itself.
- Confidentiality. To the extent possible, the employer should keep the allegations and the investigation confidential. Undoubtedly, word will spread that something is going on, but the employer should do its best to keep a lid on the investigation, its subject matter, and material learned.
- Objectivity. The employer should conduct an objective, unbiased investigation. To that end, consideration should be given to retaining a neutral third-party like a lawyer or HR consultant to conduct the investigation rather than another employee. Otherwise, the employer may face criticism that the investigation was a sham with a desired outcome already in mind or that it was necessarily unfair because of the investigator’s connection to the company and/or employees involved.
- No-Conflicts Authority. The investigator should have the authority to fully investigate the complaint and report accordingly on his/her findings and be free from conflicts of interest with respect to the complainant and/or others involved in the complaint. The employer should not, for example, have an investigator investigating claims against his/her supervisor or someone in his/her direct line of supervision.
- Competence. The employer should ensure that the investigation is conducted by a competent investigator. Whether the person has been formally trained in workplace investigations or HR practices, the investigator should be experienced in the field and have the skills and ability to conduct a meaningful, informed investigation.
- Thorough. The investigation should be thorough in exploring the validity (or lack thereof) of the complaint. This means, at a minimum, interviewing key people (complainant, alleged harasser, witnesses) and reviewing relevant documentation. In many instances, for example, it is not enough to simply interview the complainant and alleged harasser, and leave it at that. The employer must ensure that a real investigation is conducted that actually attempts to determine the merit, if any, to the complaint.
- Follow Policy. Oftentimes, employers have written policies with respect to discrimination, harassment, complaints, and appropriate responses. In conducting the investigation, the employer should ensure that the investigator follows and applies company policy.
Although a diligent, prompt investigation may not absolutely prevent the filing of a formal charge of discrimination or lawsuit, it may ultimately provide an affirmative defense curtailing liability.