October 2017 Case Notes & Comments

"Even if you are on the right track, you'll get run over if you just stand there!." ~ Will Rogers

MONTHLY QUIZ: Two female Plaintiffs-Members of a Health Club are secretly videotaped by a third party while in the tanning rooms. Members file complaints against Franchisor and Gym, a franchisee, alleging that the negligent failure to ensure Members' privacy in the tanning rooms caused severe emotional distress. Specifically, Members allege that Gym and Franchisor are liable in negligence for the criminal or tortious acts committed by a third party (e.g. inspecting for, training employees and creating policies to prevent hidden cameras), and that (2) Gym and Franchisor failed to exercise reasonable care in violation of section 2 of the Premises Liability Act (740 ILCS 130/2 (West 2014)). Gym and Franchisor move to dismiss, arguing that Members' claims should be dismissed because Members were not physically harmed. Under these facts, is physical harm to Members required to sustain Members' negligence and premises liability claims? You be the judge. (Answer below).

"RIGHT TO YELP" LAW PASSES IN ILLINOISWith the rise of social platforms such as Yelp, Facebook, Twitter, etc., some retailers have taken to including non-disparagement clauses in the "terms and conditions" language of contracts in order to dissuade customers from posting critical reviews, upon threat of fees if they do. (A notable example is a Texas pet-sitting company that sued for $1 million after a customer posted a one-star review on Yelp.)  In August, a new law was enacted in Illinois which prohibits businesses from including or enforcing non-disparagement clauses in contracts for sale or lease of consumer goods or services, and provides for a private right of action (for damages and attorney's fees) in the event a company threatens or seeks to enforce the clause. This law is similar to laws that have been enacted in California and Maryland. The federal Consumer Review Freedom Act, enacted in 2016, was enacted for similar purposes, but is only enforceable by the Federal Trade Commission, rather than consumers. The bill passed unanimously in the Illinois House and Senate, and was not opposed by the major business lobbying groups. Notwithstanding the protections of this new law, companies can still sue for defamation if a consumer's review is untrue.  (P.A. 100-0240; Effective 1/1/2018.).

NON-COMPETE AGREEMENTS - LINKEDIN REQUESTS: Company filed suit against a former Employee alleging that Employee's post-separation activity on LinkedIn breached a non-compete agreement prohibiting, inter alia, inducing or attempting to induce Company's employees from leaving its employment.  After Employee left his employment with Company, invitations to connect via LinkedIn were sent from Employee's LinkedIn account through generic emails that invited recipients to form a 'professional connection'.  Company asserted that recipients (including current employees) accepting the request would be taken to Employee's public LinkedIn profile page on which was posted a job listing for Employee's new employer.  Explaining that the content and substance of the communications was determinative, the First District Appellate Court contrasted these facts with other cases involving social media platforms.  The Court ultimately concluded that the emails did not contain any discussion of Employee's old or new employers, did not suggest the recipients view the job description, and did not contain a solicitation that recipients leave their place of employment.  Moreover, recipients had the option of responding to the requests to connect and had the option to access the job posting on Employee's public LinkedIn page. As such, the LinkedIn activity was found not to constitute an inducement or solicitation in violation of the non-compete agreement. Bankers Life and Casualty Co. v. American Senior Benefits, LLC, et al., 2017  IL App (1st) 160687 (August 7, 2017).

UM/UIM COVERAGE - FIRST DISTRICT UPHOLDS PHYSICAL CONTACT POLICY REQUIREMENT FOLLOWING HIT-AND-RUN ACCIDENT: Pedestrian-Father is crossing the street with his family when his Wife and Daughter are struck and seriously injured by a hit-and-run Driver. Father was not struck by the car and does not suffer physical injury. At the time, Wife and Daughter have an automobile policy in place with Insurer, which includes uninsured motorist ("UM") coverage. Wife files a UM claim with Insurer, which pays her the policy limit. Father also files a claim under the policy for PTSD (including physical symptoms), which he experiences after the accident. Insurer files a declaratory action arguing that Father is not entitled to UM benefits because he was not physically contacted. Father argued that because a physical impact between the uninsured vehicle and the insured was not required under the Illinois Insurance Code, any such policy requirement was against public policy. The appellate court disagreed, holding that while Illinois law did not require actual physical contact for a UM recovery, it is permissible to include such a requirement in an insurance policy. Since Father's claim was barred by the physical contact requirement of the policy, the court did not address Father's contention that his physical and emotional injuries after the accident amounted to "bodily injury" under the policy. Allstate Fire & Cas. Ins. Co. v. Bochenek, 2017 IL App (1st) 170277 (filed September 29, 2017).

ANSWER TO QUIZ: Members lose - claims dismissed. In Illinois, a possessor of land does not generally have a duty to protect invitees from the criminal acts committed by a 3rd party.Despite the general rule that a possessor of land does not have a duty to protect invitees from the criminal acts committed by a 3rd party, there is an exception if there is a special relationship between the parties, such as between a business and an invitee. A business is subject to liability to members of the public while they are upon the land for business purposes for physical harm caused by accidental, negligent, or intentionally harmful acts of 3rd persons or animals caused by the failure of the possessor to exercise reasonable care to: 1) discover that such acts are being done or are likely to be done; or 2) giving adequate warning to the invitee to avoid the harm. Illinois courts, however, have imposed a physical-harm limitation, noting that even when a special relationship exists "the landowner may only be held liable for physical harm caused by acts of 3rd persons." Here, though Members have established that Gym and Franchisor arguably owed them a duty, Members sought damages solely for emotional distress and therefore, had no redressible injuries. Members' premises liability claims were likewise dismissed because Illinois law imposes a physical-harm limitation and Members only allege emotional distress damages. C.H. v. Pla-Fit Franchise, LLC ,2017 IL App (3d) 160378 (Aug. 23, 2017).   

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