Friday, September 20, 2013

branding via employee appearance isn't commercial speech

U.S. Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc., No. 11-cv-03162 (N.D. Cal. Sept. 3, 2013)

I’m blogging this case because it has interesting TM/branding implications.  The EEOC sued A&F for firing Khan (also a plaintiff) because she wanted to wear a headscarf as part of her religious observance.  The court granted summary judgment on liability to Khan and the EEOC and rejected A&F’s undue hardship and First Amendment defenses, both based on its claimed need to use its employees as part of the “brand.”

A&F employees who work in the stock room and on the sales floor to restock merchandise are called “Impact” or “Part Time Impact” employees.  “Models” work on the sales floor.  A&F has a “Look Policy” regulating employees’ appearance.  Employees have to wear clothes similar to those sold in A&F stores, but they aren’t required to wear A&F clothing.  The Look Policy banned headgear at the relevant time.  It also requires employees to wear specific types of shoes—flip-flops, Converse sneakers, or Vans sneakers—and bans facial hair and clothing with obvious logos from non-A&F stores.  (Just for the record: were the court to accept A&F’s claims that employees’ appearance is part of the store branding, it would seem that Converse and Vans would have potential trademark/false endorsement claims.  As an exercise for the reader: how should such claims be resolved?)

A&F’s marketing strategy “seeks to create an ‘in-store experience’ for customers that conveys the principal elements and personality of each Abercrombie brand.”  This in-store experience is the “primary vehicle for communicating the spirit of each brand.” “[S]ales associates . . . reinforce the aspirational lifestyles represented by the brands” and “are a central element in creating the atmosphere of the stores.”

Khan initially wore her headscarf for several months without a problem, but when a higher-level employee inspected the store, she was fired.  (A&F later offered to reinstate her and accommodate her by allowing her to wear it.)  A&F didn’t dispute that the plaintiffs established a prima facie case of a violation of Title VII, but argued that it couldn’t reasonably accommodate Khan without undue hardship.

Undue hardship requires something more than a de minimis cost—it’s not just any hardship. “Hypothetical or merely conceivable hardships cannot support a claim of undue hardship.”  Employers shouldn’t make assumptions about untried accommodations; undue hardship requires proof of actual imposition or disruption. 

Taking a page from branding theory generally, A&F argued that it didn’t need to show economic harm or offer proof with specificity or exactitude.  Instead, it sought to rely on testimony from numerous employees, who testified that, based on their “personal experiences,” compliance with the Look Policy is key to Abercrombie’s success and/or that deviations from the policy “detract from the in-store experience and negatively affect [the] brand.”  A&F argued that the Look Policy was at the heart of its business model, so any accommodation requiring a deviation from the policy threatened its success.

The court was unimpressed.  “[T]he evidence fails to show: (i) that Khan’s wearing of a hijab during her four months of employment had a negative effect on sales, the brand, or any customer’s experience; nor (ii) any tracking or correlation between Look Policy deviations, including wearing a hijab, and a negative impact on sales.”  A&F’s offer of reinstatement was also inconsistent with a claim of hardship.  Plus, A&F had granted almost 80 Look Policy exceptions since 2005, including (i) allowing male employees to grow facial hair or wear a yarmulke or baseball cap; (ii) allowing female employees to wear visible jewelry (including a cross) or a long skirt that was inconsistent with the store’s look; and (iii) granting more than 16 exceptions for headscarves since 2006. 

A&F offered only “unsubstantiated opinion testimony of its own employees” to support its claim of undue hardship.  The witnesses’ personal beliefs weren’t linked to any credible evidence.  Khan had been at A&F for four months before she was thrown out, and A&F failed to offer any evidence showing a decline in sales at that store, customer complaints or confusion, or brand damage linked to the hijab.  The employee who fired her testified that the hijab violated the Look Policy regardless of how much or little time Khan spent on the sales floor and regardless of whether it distracted customers. 

The court was also not persuaded by A&F’s argument that accommodation would threaten the “core” of its business model.  A&F’s witnesses testified that they believed that deviations from the Look Policy harmed sales or customer experiences, but couldn’t provide concrete reasons such as reports, surveys, or complaints.  Two sales executives testified that A&F doesn’t specifically examine the effect of the Look Policy on sales.  (Maybe because it’s actually creepy ideology rather than reality-based?)  Specific instances referenced by employees were speculative and purely subjective.  One person testified that the Palo Alto store had “Look Policy issues,” but that with training on the policy, “sales increased dramatically over time.”  But the Look Policy was only one of many problems.  The same was true of other stores identified as having Look Policy problems.  This testimony provided “only a tenuous, potential connection” between the Look Policy and undue hardship, as “other” store issues contributed to declining sales, rather than the required “actual imposition or disruption.”  “Abercrombie must provide more than generalized subjective beliefs or assumptions that deviations from the Look Policy negatively affect the sales or the brand.”  Here, A&F didn’t raise a triable issue of hardship, much less undue hardship, from allowing Khan to wear her previously unobjectionable hijab.

A&F recast its defense in the language of the First Amendment: its Look Policy was part of its branding, and thus constituted commercial speech.  The court turned to the usual tests for commercial speech, but they’re really red herrings—designed to separate commercial speech from noncommercial speech.  The real question here, as the court ultimately recognized, is whether the Look Policy is speech at all.  As many theorists, notably Fred Schauer and Robert Post, have pointed out, there are plenty of communicative activities (including some involving words) that we never think rise to the level of speech at all.

The court didn’t buy that A&F employees were “living advertisements” for the brand and therefore their appearance was commercial speech.   Plaintiffs responded that, first, PTI employees were essentially stockroom employees, not “living advertisements.”  Second, A&F wasn’t advertising a particular product: employees weren’t required to wear A&F.  The court agreed.  “‘[R]epresenting the brand’ does not equate to being a ‘living advertisement,’ particularly where the employees’ responsibilities consist of ensuring shipments are complete, folding clothing, and placing/replacing clothing on the floor.”  Thus, a PTI employee’s appearance didn’t promote a particular product, nor did it propose a commercial transaction.  (The court did not opine on the use of this defense as to Models, aka “impact” employees who stay out on the sales floor and who are required to be handsome and good-looking.)

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