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The Federal Trade Commission is asking the Second Circuit federal appeals court to uphold a finding that 1-800 Contacts violated antitrust law by preventing rivals from using its trademarked name in search ads. Meanwhile, 1-800 Contacts is also defending against a class-action lawsuit brought on behalf of consumers centering on the same conduct, but also naming additional retailers as defendants, including National Vision, Vision Direct, Luxxotica and Walgreens. Luxxotica recently agreed to pay $5.9 million to settle the claims against it in the lawsuit and National Vision settled for $7 million in 2017.

The dispute centers on 1-800 Contacts’s business practices dating back to 2004, when it brought or threatened legal action against numerous rivals accusing them of infringing its trademarks by purchasing search ads using the phrase “1-800 Contacts” to trigger a pay-per-click search ad. From 2004 through 2013, the company sued or threatened to sue at least 13 competitors over alleged trademark infringement on various search engines. 1-800 Contacts asserted that the act of purchasing ad words using its registered mark violated its trademark. In most cases, the rival companies responded to these threats or lawsuits by agreeing to enter agreements requiring them to cease bidding on search engine ad words using the 1-800 Contacts mark. Only Lens.com fought back and largely prevailed in the suit. Continue reading ›

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As we enter the final quarter of 2019, employers must begin to look ahead and begin preparing for a number of new employment laws that will take effect January 1, 2020. Even though employers have nearly 100 days to review and revise their employment policies, they should start familiarizing themselves now with the new requirements, training management in compliance, and preparing to implement any new procedures come the start of 2020. Continue reading ›

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A retailer’s plan for calculating commissions for its sales associates did not violate the Illinois Wage Payment and Collection Act because the relevant portion of the statute concerned only deductions from an employee’s wages, and not the method used to calculate the employee’s gross pay prior to deductions.

The Tile Shop, LLC sells tile and related materials and accessories. It operates 128 retail stores across 31 states. Each store employs a manager, one or two assistant managers, and a staff of sales associates. Sales associates and assistant managers are primarily responsible for sales. The Tile Shop pays its sales associates and assistant managers pursuant to a “Sales Associate Pay Plan.” The company gives prospective employees a copy of the plan with its offer letter. The plan explains how the company compensates its sales staff, primarily through commissions but also with bonuses on sales of certain products and periodic incentives. The Shop pays employees on a semimonthly basis. Continue reading ›

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Online dating sites are an increasingly common way people seek to find romance. But, according to the Federal Trade Commission, these sites could also be a source of scams or a haven for scammers. The FTC recently filed a lawsuit against the company that owns popular dating sites and apps such as Match.com, Tinder, OKCupid, and PlentyOfFish, alleging that the company used fake advertisements designed to trick consumers into believing someone had shown interest in them and purchase a paid subscriptions on Match.com.

According to the FTC’s complaint, many consumers received emails or instant messages containing attention-grabbing text such as: “He just emailed you! You caught his eye and now he’s expressed interest in you… Could he be the one?” (referred to as “You caught his eye”-type notices in the complaint) Although Match allows consumers to create free accounts, to actually read these messages Match required consumers to upgrade to paid subscriptions. For many consumers hoping to find that special someone, the representation that specific suitors were already eager to meet them proved impossible to pass up. Many consumers responded to these emails and messages, often paying more than $100 for a subscription in the hope of connecting with these people who had already “expressed interest” in them. Continue reading ›

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Business owners and consumers alike know that contracts are an everyday part of life. Equally common though are modifications or amendments to those contracts. Some modifications are memorialized in writing. Many more, however, are made orally and even worse some are implied through a party’s conduct. As we have discussed previously, Illinois law permits the parties to a contract to orally modify their contracts, even if the contract provides that all amendments must be in writing. However, certain contracts are subject to specific statutory provisions that prohibit oral modifications.

One such statutory prohibition against oral modifications is Section 2-209 of the Illinois Commercial Code, 810 ILCS 5/2-209(2). Section 2-209 of the Illinois UCC governs modification, rescission, and waiver of contracts for the sale of goods. Specifically, Section 2-209(2) bars oral modifications but only when the prior written contract includes a provision that “excludes modification or rescission except by a signed writing.” Business owners must be aware though that Section 2-209 does not apply to all contracts. It is limited to transactions in goods and may be extended only to contracts that are predominantly for the sale of goods. Business owners must be aware of the requirements for Section 2-209 to apply.  Continue reading ›

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When two people purchased an RV that was later found to have a defect that substantially impaired its value, the purchasers were not required to give the seller of the RV time to cure the defect before being able to revoke their acceptance and receive a refund of their purchase price. The Illinois Supreme Court held that Illinois’ statute only required allowing the seller time to cure a defect if the purchaser had accepted a commercial unit with knowledge of a defect and an agreement with the seller which contemplated the seller repairing the defect.

In April 2014, Kimberly Accettura and Adam Wozniak purchased a new 2014 Palomino RV from Vacationland, Inc. for $26,000.25. They took possession of the RV a week later. That June, they discovered water leaking into the RV from the emergency exit window. The plaintiffs then brought the RV back to Vacationland for repair, which Vacationland performed without charge.

In July 2014, the plaintiffs took the RV to Michigan. During a rainstorm, the RV continued to leak extensively into the dinette area, damaging the walls and causing electrical failure. The plaintiffs towed the RV back to Vacationland for repair later that month. Vacationland was unable to repair the defect itself, so one of its employees told the plaintiffs that it would have to send the RV to the manufacturer for repair. Neither Vacationland’s employees or the manufacturer could give the plaintiffs an estimate for how long a repair would take. On Aug. 2, before the manufacturer picked up the RV, the plaintiffs called Vacationland and verbally revoked acceptance of the RV. Despite this, the manufacturer still picked up and repaired the RV. When the RV was returned to Vacationland at the end of September, Vacationland called the plaintiffs and told them that the RV was ready for pick up. At this point, the plaintiffs’ attorney sent a letter to Vacationland confirming the earlier revocation of acceptance of the RV. Continue reading ›

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To combat the increasing restrictions in non-compete agreements, legislators throughout the United States have been passing laws to limit what restrictions employers can put in their non-compete agreements with their workers, or even whether they can use non-compete agreements at all. California has refused to recognize any non-compete agreements, and other states have followed suit. A federal law limiting or banning non-compete agreements does not exist, though bills on the issue have been proposed.

The latest tactic used by employers to get around the restrictions placed on non-compete agreements has been something called “garden leave”. Garden leave is when an employee gives notice of the termination of their employment with that business and spends some or all of their notice period away from the office, but remains on the company’s payroll. Continue reading ›

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After two companies got into a dispute about the timeframe for payment of invoices, the 7th Circuit Court of Appeals found that the district court had erred in not considering the parties’ course of dealings to determine what a fair time to pay would have been.

In 1999, Valley Drive Systems, Inc. began manufacturing parts for Arctic Cat, Inc. In 2002, Driveline assumed control of Valley Drive Systems, Inc.’s assets. In June of that year, Driveline and Arctic Cat entered into a contract where Driveline would provide specifically-manufactured hubs, axels/half-shafts, outer and inner tie rods, shift shafts, and steering stops. The contract made Driveline a “just-in-time supplier” for Arctic Cat. Driveline provided its goods and filled orders daily with regular deliveries to Arctic Cat. Continue reading ›

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Online review sites such as Yelp have been the bane of companies’ existence ever since they first started popping up on the internet. While businesses work hard to provide each of their customers with the best experience possible, one can never please everyone, and the displeased will inevitably turn to the internet to vent their frustration for all potential clients to see. As problematic as that is for any business (especially small businesses), is suing customers who leave a bad review really the answer?

Lisa Agostino, of Macomb County, Michigan, is being sued by North Wind Heating and Cooling for leaving a bad review of the company on Yelp.

In her review, Agostino said she was overcharged for the air conditioner capacitator the company installed for her. Continue reading ›

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After two companies got into dispute over fallout from jointly hosted party during Indianapolis 500, the appellate court affirmed the district court’s view that the plaintiff had no non-speculative evidence of damages, and that the plaintiff had committed a breach of contract by not promoting the event across the social media channels that it agreed to use.

The Indianapolis Motor Speedway, LLC sponsors the annual Indianapolis 500 race and associated race-weekend events, which include musical acts and other festivities. In 2015, Karma International became a licensee of Maxim, a men’s magazine. Karma has hosted Maxim-branded entertainment at large sporting events, including a party prior to the 2016 Super Bowl in San Francisco.

In early 2016 Karma began negotiations with the Speedway to host a Maxim-branded event at that year’s 100th-running of the race. The parties eventually agreed on terms in a March 2016 agreement. The agreement required each party to cross-promote the event across their social media channels. The Speedway complied with its obligations under the agreement, but Karma never ran the banner ad it promised to show on Maxim.com. It also did not use Maxim’s social-media channels to promote race-weekend events. Continue reading ›

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