Category: Education

Do You Have a College Student? Important Healthcare, Financial, and Educational Documents That They (and You) Need

August is upon us and you may soon be sending children off to college. If your child is age 18 or older, you and your child will need to take some simple steps so that, in the event of an emergency, you will be able to make health care and financial decisions for your child and have access to your child’s medical information and financial accounts. The same is true if you are to have access to your child’s educational records.

Medical Information. Once your child reaches age 18, your child is deemed to be an adult by law and you no longer have a legal right to make health care decisions on behalf of your child or to access your child’s health care information. As a result, if you have an adult child, your child must execute certain legal documents naming you as his or her health care agent and permitting you to access his or her medical information:

  1. Your child must execute a “Health Care Proxy” naming you as his or her agent for health care decisions. In this document, your child authorizes you to make health care decisions on your child’s behalf if he or she becomes unable to make or communicate such decisions him or herself. The child may also share his or her own wishes regarding medical treatment.
  2. Your child must also sign a “HIPAA Authorization Form.” The Health Insurance Portability & Accountability Act of 1996 (generally known as “HIPAA”) protects the privacy of an individual’s medical information, and health care providers may require written consent from a patient to share information with family members, including parents of an adult child. Your child’s college or university may also have policies in place preventing it from sharing medical information without the student’s consent. This form will serve as written permission authorizing those providing health care services to your child to share medical information with you as your child’s health care agent.
  3. In addition, you should be in contact with the health services department of your child’s college or university. The institution may provide its own form for authorizing the release of medical information that can be kept on record with the institution’s health services department.

Financial Accounts. If you are to have the ability to act on behalf of your adult child with respect to financial matters, your child also needs to execute a “Durable Power of Attorney” naming you as your child’s agent with respect to the child’s assets and finances. If your child is attending college away from home, is studying abroad, or undergoes a medical emergency, it may be useful for you to access your child’s accounts on his or her behalf. This allows you to pay bills for a child out of their accounts, make deposits and open or close accounts. In addition, a durable power of attorney allows you to handle other financial tasks for the child, like filing tax returns or renewing a lease.

Educational Records. Finally, the Family Educational Rights and Privacy Act (FERPA) protects the educational records of a child who has turned 18 or is enrolled at a postsecondary institution from access by his or her parents. If the child’s parents claim the child as a dependent on their tax returns, the parents may still access the child’s education records without the child’s consent. However, institutions may be reluctant to allow access to education records for any child over the age of 18 without a “FERPA Waiver” signed by the child, regardless of their status as a dependent. If you would like to have access to your child’s educational records, you should contact the institution to request a FERPA Waiver form.

Article By John H. Ramsey and Kerry L. Spindler of Goulston & Storrs

For more public education and services legal news, click here to visit the National Law Review.

2022 Goulston & Storrs PC.

District Court Rules Most Plaintiffs in Case Do Not Have Standing to Block Florida Stop W.O.K.E. Act

There are two key cases pending before the U.S. District Court for the Northern District of Florida on Florida’s “Stop W.O.K.E. Act”: the Falls, et al. v. DeSantis, et al., matter (No. 4:22-cv-00166) and the Honeyfund.com, et al. v. DeSantis, et al., matter (No. 4:22-cv-00227). The Northern District of Florida has issued its first order on the Act, which went into effect on July 1, 2022.

In an Order Denying Preliminary Injunction, in Part, in the Falls matter, the court concluded that the K-12 teachers, the soon-to-be kindergartner, and the diversity and inclusion consultant who sued Governor Ron DeSantis and other officials to block the Stop W.O.K.E. Act did not have standing to pursue preliminary injunctive relief. The court reserved ruling pending additional briefing on the question of whether the college professor, who also sued, has standing.

Stop W.O.K.E. Act

The Stop W.O.K.E. Act expands an employer’s civil liability for discriminatory employment practices under the Florida Civil Rights Act if the employer endorses certain concepts in a “nonobjective manner” during training or other required activity that is a condition of employment.

Court Order

In the Falls case, a diverse group of plaintiffs claiming they were regulated by the Stop W.O.K.E. Act filed a lawsuit challenging the Act on the grounds that it violates their First and Fourteenth Amendment Rights to free expression, academic freedom, and to access information.

The court, however, did not reach the question of constitutionality. It also did not determine whether the case can move forward, an issue that will be decided when the court rules on the defendants’ pending motion to dismiss.

Instead, the court denied the plaintiffs’ request for a preliminary injunction on the threshold question of standing. It found the plaintiffs (other than the college professor) did not show they have suffered an injury-in-fact that is traceable to DeSantis or another defendant that can likely be redressed by a favorable ruling.

The court found the consultant is not an employer as defined by the Florida Civil Rights Act. Therefore, she could not assert standing on that basis. Instead, she argued she has third-party standing to assert the rights of the employers who would otherwise hire her, and she is harmed by the Act because employers will no longer hire her. The court rejected both theories, finding the consultant-employer relationship is not sufficiently “close” to create standing; employers are not hindered in raising their First Amendment rights on their own; and, based on the evidence presented, the court could not reasonably infer that the consultant has lost or will lose business because of the Act.

Importantly, the court specifically held that it was not ruling on the legality of the Act, whether it was moral, or whether it constituted good policy.

Private Employer

The court highlighted that the sister case pending in the Northern District of Florida (Honeyfund.com) involves a private employer under the Florida Civil Rights Act. In that case, the plaintiffs allege the Stop W.O.K.E. Act violates their right to free speech by restricting training topics and their due process rights by being unconstitutionally vague. Honeyfund.com, Inc. and its co-plaintiffs request that the court enjoin enforcement of the law. The case has been transferred to District Court Judge Mark Walker. The Honeyfund.com case will likely have the largest effect on Florida employers and questions surrounding the enforceability of the Act as to diversity and inclusion training.

***

Since the Stop W.O.K.E. Act took effect, employers are understandably unclear how to proceed with training. Employers should continue to train their employees, but review their training programs on diversity, inclusion, bias, equal employment opportunity, and harassment prevention through the lens of the new law. Employers should also ensure they train the trainers who are conducting these important programs. Finally, employers should understand potential risks associated with disciplining or discharging employees who refuse to participate in mandatory training programs, even if employers do not consider the programs to violate the new law.

Article By Stephanie L. Adler-Paindiris, Samia M. Kirmani, Amanda Simpson, and Lindsay Dennis Swiger of Jackson Lewis P.C.

For more litigation legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Why ‘Don’t Say Gay’ Bills are Antithetical to an Equitable and Inclusive Education

According to a 2019 GLSEN national survey of LGBTQ+ students, nearly 60% of surveyed students reported they felt unsafe at school because of their sexual orientation and 43% because of their gender expression. Within the same survey, nearly all (98.8%) LGBTQ+ students reported hearing “gay” used in a negative way at school, 95% heard other homophobic remarks, and 87% heard transphobic remarks.

When I was an educator, it was essential to my practice that all my students felt safe. If I were to hear any negative remarks about a student or become aware one of my students felt unsafe due to their identity, it would be my ethical, and moral, obligation to do something to create a safer and more inclusive learning environment; a core part of my role as an educator was to teach empathy and compassion in my students. This could be as simple as having a classroom discussion about the choices of language and how using words such as “gay” with a negative connotation can be hurtful to their classmates. This could also mean sharing my own identity as a queer man so my LGBTQ+ students knew they had someone they could turn to for support, and to normalize queer identities for all my students and their families. Either of these actions would require I discuss the importance of accepting all sexual orientations and gender identities.

In other words, I would have to say “gay.” But in six states — as of now — I would not have been able to do this.

The state of Florida attracted national attention earlier this year with the adoption of H.B. 1557, the “Parental Rights in Education” bill, more commonly known as the “Don’t Say Gay” bill. The bill, which has since been signed into law, dictates classroom instruction by “school staff” on “sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age-appropriate or developmentally appropriate for students.” Five other states, according to the Movement Advancement Project, have similar laws enacted and several more have bills pending in their state legislatures. Some proponents of these bills argue the legislation is necessary to ensure parents have greater say when, if, and how LGBTQ+ issues are discussed with their children.

Yet these laws are designed to ensure only some parents have greater say, as the parents of LGBTQ+ children are certainly not reflected in these efforts.

At a time when youth mental health is reaching a crisis, state legislatures are advancing bills that would perpetuate, and arguably exacerbate, harmful school-based experiences for LGBTQ+ youth and worsen their well-being. A 2022 survey by the Trevor Project found 45% of LGBTQ+ youth seriously considered attempting suicide in the past year, and over half of transgender and nonbinary youth considered suicide. The 2019 GLSEN survey also found LGBTQ+ students who experienced forms of victimization based on their sexual orientation or gender identity (e.g., being bullied, hearing homophobic or transphobic remarks, etc.) had lower levels of self-esteem, higher levels of depression, and were less likely to say they belonged in school.

Some may argue “Don’t Say Gay” bills would not preclude educators from addressing instances of homophobia or transphobia in their classrooms and try to suggest that prohibitions on such actions are not the intent of the bills. However, regardless of intent, these bills often have the insidious impact to “chill” educators’ actions out of fear they may run afoul of the law and open themselves to reprimands, including being terminated.

All students deserve to have a safe, supportive, and affirming learning environment. All educators should be empowered to protect their students, and not feel afraid to step in when they notice a student being bullied because of their identity. And every parent should have the resources to be a partner in their child’s education. Unfortunately, state laws such as the “Don’t Say Gay” bills will only stand in way of these notions from becoming realities.

It is impossible to support all students when LGBTQ+ children continue to be targeted merely because of their identities.

Article By Sean A. Worley of Nelson Mullins

For more legislative legal news, click here to visit the National Law Review.

Copyright ©2022 Nelson Mullins Riley & Scarborough LLP

Web Accessibility Claims Put Institutions of Higher Learning at Risk

From kindergarten through law school, there was always something to stress me out. Homework, tests, in-school assignments – along with the pressure to do well and the need to complete a project in an allotted time – could be paralyzing. To individuals with disabilities, the stress is often worse. Not only do they have similar concerns, but the thought that the materials may not be accessible in the format in which they can best learn or be tested is frustrating, and can be terrifying. In response, lawyers have figured out a way to make educators and educational institutions aware of the issue – through the looming threat of a class action lawsuit.

While many institutions of higher education believe they are accommodating and inclusive, the barriers presented by non-accessible websites and materials pose significant risk to these institutions and concern for their leaders. Institutions for education are common targets for web accessibility claims and will remain so for the foreseeable future. The constantly rotating mix of students who apply to and attend school each year presents institutions with a bevy of new potential plaintiffs with different disabilities and unique experiences. As such, a school must continually monitor its compliance and strive to be accessible.

Agricultural scientist and inventor George Washington Carver said, “Education is the key that unlocks the golden door to freedom.” When the ability to obtain an education is hampered by barriers to access, the system fails and the students’ opportunities can be lost. In response, the government has instituted safeguards and laws to protect the rights of students in both the public and private sectors.

The Laws Protecting People with Disabilities

Former U.N. Secretary General Kofi Annan recognized that “Knowledge is power. Information is liberating. Education is the premise of progress in every society, in every family.” Similarly, decades ago, the United States government recognized the need to provide proper protections for people with disabilities from disability-based discrimination and to move toward a more inclusive society. Through the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, the federal government took steps to provide reasonable accommodations so that people with disabilities do not become the disenfranchised.

Title II of the Americans with Disabilities Act (ADA) provides in section 35.130 that:

(a) No qualified individual with a disability shall, on the basis of disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any public entity.

Similarly, in Title III of the ADA (section 36.201), the statute provides:

(a) Prohibition of discrimination. No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any private entity who owns, leases (or leases to), or operates a place of public accommodation.

By definition, a place of public accommodation “means a facility operated by a private entity whose operations affect commerce and fall within at least one of the following categories … (10) A nursery, elementary, secondary, undergraduate, or postgraduate private school, or other place of education.”

As such, regardless whether a school is a public or private institution, the ADA prohibits discrimination against an individual with a disability.

Individuals with disabilities also are protected against inaccessible school websites under sections 504 and 508 of the Rehabilitation Act of 1973. Section 504 (29 USC 794(a)) of the Act provides:

No otherwise qualified individual with a disability in the United States … shall, solely by reason of his or her disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency …

Further, section 508 of the Rehabilitation Act of 1973 (29 USC 794d) requires federal agencies and organizations receiving federal funds to make electronic information and information technology accessible for people with disabilities. Specifically, the law requires:

(1) Accessibility

(A) Development, procurement, maintenance, or use of electronic and information technology
When developing, procuring, maintaining, or using electronic and information technology, each Federal department or agency, including the United States Postal Service, shall ensure, unless an undue burden would be imposed on the department or agency, that the electronic and information technology allows, regardless of the type of medium of the technology,

(i) individuals with disabilities who are members of the public seeking information or services from a Federal department or agency to have access to and use of information and data that is comparable to the access to and use of the information and data by such members of the public who are not individuals with disabilities.

Institutions of learning, whether public or private, are therefore required to provide accommodations to people with disabilities when providing them with educational materials or other electronic information.

To ensure accessibility, the World Wide Web Consortium (W3C) has issued the Web Content Accessibility Guidelines (WCAG) international standard, including WCAG 2.0, WCAG 2.1 and WCAG 2.2, which explain how to make web content more accessible to people with disabilities. These are highly technical guidelines that might not be readily understood by risk managers or educators, but rather are routinely addressed by technology professionals. However, most complaints address a few major areas of concern, and website operators need to be cognizant of the following:

  • Alt Text for Images – alternative text that allows a vision-impaired individual the ability to understand the presence, function and content of images on a site
  • Link Text – text that allows a user to navigate a website and links to other webpages, documents and content
  • Form Labels – text that allows a user to understand forms on webpages
  • Keyboard Navigability – functionality that allows a user to navigate a website using a keyboard instead of a mouse
  • Captions – for all audio and video content
  • Proper Headers, Lists and Tables – functionality and formatting to allow a user to understand the ordering of content
  • No Flashing Graphics – graphics that flash have been known to inadvertently cause seizures in certain individuals.

Lack of Compliance Leads to Litigation

Despite the requirement that educational institutions comply with accessibility standards, most institutions do not comply. While schools have learned how to assist students with disabilities through physical and structural accommodations (such as ramps, automatic door openers and close parking spots), a lag in compliance with digital access still exists. Institutions of higher education often place the onus of communicating the necessary accommodations on students, and educational institutions often leave the communications with students to teachers and others who may not be as familiar with the accessibility rules as needed. With the growth in the importance of digital education, especially since COVID-19 pushed a greater proportion of learning online, the divide in digital compliance has become even deeper.

When COVID-19 first took hold and forced the migration of learning from an in-person classroom to an online experience, not everyone was prepared. A teacher who had accommodations set up in a classroom, might not know how to adjust them to the online environment. The use of vendors in assisting with the educational forum has taken on greater importance. With the outsourcing of certain aspects of learning comes a lack of control in ensuring that students with disabilities are provided with proper accommodations.

The description of an assignment online in a PDF format, or through instructions given on a website or module provided by a software vendor, now requires thought as to whether the accommodations agreed to in a written plan with the school are being addressed. These and many other questions have arisen due to the rapid increase in online learning:

  • Do the contracts that the schools entered into with the vendors provide for ADA accommodations?
  • Do the vendors have the ability to deliver compliance?
  • Are the institutions indemnified?
  • Do the teachers/professors or their administrative aides have the understanding and skills to recognize and deliver the accommodations?

Many schools and universities have been subjected to ADA web accessibility claims. It has been reported that Marcie Lipsett, founder and co-chair of the Michigan Alliance for Special Education, filed more than 2,400 web accessibility complaints against schools and districts under Title II, with more than 1,000 resulting in resolution agreements with the Office of Civil Rights.

In November 2018, Jason Camacho, a blind resident of Brooklyn, New York, commenced suit against 50 colleges and universities over the lack of accessibility of their websites. Mr. Camacho had allegedly attended a career fair where these schools were present, and claimed that when he attempted to obtain more information online, accessibility barriers prevented access. Mr. Camacho claimed that when he attempted to use a screen reader, which allows visually impaired individuals to receive the text and description of images on the screen through audible messages or braille, he was unable to access the schools’ website information with the assistive device. Although at least one school challenged jurisdiction and lost; settlements followed quickly.

Even the hallowed Harvard University could not escape suit. In 2015, a class action lawsuit was filed against Harvard alleging that many of its videos and audio recordings lacked captions or used inaccurate captions, despite the fact that Harvard promoted its online resources as being available to “learners throughout the world.” Harvard reached a settlement that was followed by an announcement from the National Association of the Deaf that Harvard would institute a series of new guidelines to make the school’s website and online resources accessible to those who are deaf or hearing impaired.

These lawsuits continue. In July 2021, a prospective student filed suit against Syracuse University alleging that the site was inaccessible and that he, along with other individuals who are blind or vision-impaired, faced “significant barriers” in applying to the school.

These lawsuits will likely continue until schools and universities pay more attention to the issues confronting students with disabilities.

AAAtraq Releases Study Showing Continuing Problem

Despite the surge in lawsuits and the increasing awareness of the risk, most websites still fail to achieve the technological standards followed to judge accessibility. AAAtraq, a compliance identification and management system vendor, analyzed the home pages of more than 2,000 higher education institutions and found that 96 percent of them failed to be inclusive. The study looked at the three most often cited vulnerabilities of sites:

  • Missing, inadequate or incorrect alternative text (Alt text) used to interpret images on a webpage
  • Missing, inadequate or inaccurate link text (which is used to describe a link that allows one to navigate a website or connects to another webpage, document, video or other linked content
  • Missing, inadequate or improperly described form labels (form field labels allow a user with disabilities to understand the information being requested to be input).

AAAtraq found that 13 percent of the institutions of higher education had a very high risk of being targeted due to the extent of failures on their home page, with another 48 percent of the institutions being classified as high risk. While 4 percent of the institutions were classified as low risk, AAAtraq noted that the results were based on an audit of the homepage of the institution’s primary website. With a “more in-depth audit,” AAAtraq believes that “it’s highly likely that failures could be identified on every website.”

The time is now for schools and universities to pay attention and start the process of making their digital presence inclusive to reduce the potential for being sued and enhance the ability to muster a defense if sued. In addition it will make such institutions more inclusive to an important demographic. American broadcast journalist Walter Cronkite once said “Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation.” Similarly, while there is a cost of compliance, the cost of failing to comply is much greater.

© 2022 Wilson Elser

Article By Adam R. Bialek of Wilson Elser Moskowitz Edelman & Dicker LLP

For more articles on accessibility at higher education institutions, visit the NLR Public Education & Services section.

When Board Conflict Crosses the Line…

Elected officials are, naturally, sometimes at the center of conflict and division within their board.  Conflict is to be expected.  However, what happens when board members take action to freeze out a minority board member from information that he or she needs to do his or her respective job?  The use of information-control tactics against minority members on a board, impeding their ability to receive that information necessary to perform his or her duties is problematic – and it may be unconstitutional.\

Elected officials have duty to be informed. Palm v.Centre Tp., 415 A.2d 990, 992 (Pa. Commw. Ct. 1980):

It is the duty of a school board member, a commissioner, a councilman, or a supervisor to be informed. Supervisors are not restricted to information furnished at a public meeting. A supervisor has the right to study, investigate, discuss and argue problems and issues prior to the public meeting at which he may vote. Nor is a supervisor restricted to communicating with the people he represents. He is not a judge. He can talk with interested parties as does any legislator.

This responsibility extends beyond the contours of the public meeting and what is discussed at those meetings.

Elected officials have protections under the First Amendment. The Third Circuit has historically recognized that a public official’s right to free speech under the First Amendment will be violated when the retaliatory conduct of her peers interferes with her ability to adequately perform her elected duties. See Werkheiser v. Pocono Tp., 780 F.3d. 172, 182 (3d Cir. 2015); Monteiro v. City of Elizabeth, 436 F.3d 397, 404 (3d Cir. 2006).

To avoid entering the territory of this kind of interference, everyone can play a role in ensuring the government functions adequately and that Board members’ rights, duties, and privileges are protected.  Board division, when gone too far, can cross constitutional lines.  To avoid walking that line, there are things that everyone can do to make for a well-functioning Board or meeting:

  • Managers can stay neutral and ensure that every board member is kept up to date on significant municipal operations and projects.
  • Solicitors can host a meeting with the board to educate the board on laws pertaining to their position, such as a municipal code and the Pennsylvania Sunshine Act.
  • Board members can foster respect for fellow board members and learn how to communicate so that each board member can participate in healthy debate on contentious issues.  Enacting policies related to meeting decorum can be helpful, but they need to be enforced evenhandedly.

For more tips for handling divisiveness among a board, see the December 2021 article on “Tips for Handling Board Conflicts” in the Pa Township News.

©2022 Strassburger McKenna Gutnick & Gefsky
          

Is Your School District Ready for the Next Round of Cyber Attacks?

It isn’t if, but when, the next round of cyber-attacks will happen. One common type of cyber-attack that schools face is ransomware, where a hacker takes over a school district’s computer systems and holds the systems “hostage” until the district pays a ransom or can restore the system on its own. Restoration for some districts can be nearly impossible.

Like any other multi-million-dollar organization with sensitive data, schools are unfortunately natural targets for cyber-attacks. Per one leading anti-malware provider, in 2021 alone, 62 school districts and 26 colleges and universities were impacted by ransomware. These attacks disrupted learning at 1,043 individual schools. The recovery costs following an attack can be very significant. For example, Baltimore County Public Schools spent more than $8.1 million on recovery after an attack at the end of 2019.

And it isn’t just the ransom amounts that can be frightening. Public concern over compromised data security, feelings of invasion of privacy, and negative public perception can also pose real and significant consequences for school districts. Imagine the response of a guardian or parent who receives notice that his or her student’s personal information has been compromised. The inability to access necessary computer or network systems may also require schools to close and disrupt both short- and long-term operations. In 2021, on average, a school in the United States experienced seven days of downtime following a cyber-attack before resuming educational operations, and significant additional time was required to fully recover from the attack.

Why Are Schools Attractive Targets?

School districts are appealing targets for two main reasons: (1) school districts often have one of the largest budgets in the community, making them an appealing financial target; and (2) the data school districts store includes highly-sensitive student and employee personal information, including Social Security numbers, health information, and other pupil data. This information can be a gold mine to cyber criminals who are interested in identify theft or simply extorting money from a school district.

What Should School Districts Do?

School district administration should embrace cybersecurity best practices to protect their schools from cyber-attacks. This requires administrators to review current practices and thereafter remain vigilant in conducting an ongoing review of such practices. Here are a few things school districts can do to help protect themselves:

  • Develop a communication plan. Time is critical when a cyber-attack occurs. It is essential that you are ready to address guardians and parents, the media, and the community, and to work with your insurers and law enforcement immediately when an attack happens. Different laws require notice to individuals affected by privacy breaches. Your district should pre-emptively develop a communication plan so it is immediately ready to address required stakeholders. This communication plan should be routinely discussed with relevant administrators and employees.
  • Update Systems. Network users should apply software patches and updates as soon as possible. Hackers often exploit systems that don’t timely install patches and updates.
  • Create a strong password policy. Password policies must require users to update in regular intervals and integrate best practices, including passphrases, sequences and having different passwords for multiple accounts.
  • Purge outdated technology. Schools may hang on to older devices due to budget constraints. However, older devices may not be as secure as newer systems.
  • Implement multi-factor authentication to protect network access.

Some tips to help districts recover more quickly include:

  • Back up essential data frequently. The ability to restore data is a significant factor in determining whether a school district should pay a ransom.
  • Train employees. Train staff to recognize phishing emails and other types of cyber-attacks.
  • Develop a cyber-attack response plan. Schools should work with their IT staff, IT providers and legal counsel to pre-emptively develop a plan to handle varying cyber-attacks and return to normal operations.
  • Evaluate cyber liability insurance coverage. Based on publicly available information, ransom demands vary dramatically: as low as $10,000 to millions of dollars.
  • Stay in close contact with experienced legal counsel. To the extent protected personal information was accessed or taken, notification to the victims and, in some states, notification to data protection authorities may be required. Legal counsel familiar with these situations help coordinate communication with law enforcement and communication with staff, students, and the public. Legal counsel also communicates with the threat actors, coordinates with your insurance company, and assists with records requests that may come in post-attack.

Most importantly, school districts should engage with their insurance agent, legal counsel and IT staff now to develop and gain a mutual understanding of the process that will be followed at the time of a cyber-attack, as well as best practices that are to currently be utilized by district employees and officials. These pre-emptive, relationship-building opportunities may expose vulnerabilities and will best prepare your district for a cyber-attack. A proactive approach may also help your district avoid an attack altogether or, at a minimum, reduce the damage.

©2022 von Briesen & Roper, s.c
For more about education, visit the NLR Public Education & Services section.

District Court Declines to Dismiss 401(k) Fee Litigation Case in First Decision Post-Hughes

In the first decision since the Supreme Court’s ruling in Hughes v. Northwestern Univ., No. 19-1401, 595 U.S. ___ (U.S. Jan. 24, 2022) (discussed further here), a Georgia federal district court held in favor of plaintiffs and declined to dismiss allegations that defendant’s 401(k) plan included costly and underperforming funds and charged excessive recordkeeping fees. Specifically, plaintiffs alleged that defendants breached ERISA’s fiduciary duty of prudence by: (1) offering retail share class mutual funds despite the availability of identical lower-cost institutional share classes of these same funds; (2) including actively managed mutual funds which were more expensive than available passively managed funds; (3) selecting and maintaining underperforming funds; and (4) overpaying for recordkeeping services.

In declining to dismiss plaintiffs’ investment management fee claims, the district court relied heavily on Hughes. The court expressed its view that Hughes “suggested” that a defined contribution plan participant may state a prudence claim by merely alleging that the plan offered higher priced retail class mutual funds instead of available identical lower-cost institutional class funds. The district court also rejected defendant’s argument that plaintiffs’ claims should be dismissed in part because the plan offered a variety of investment options that participants could select, including lower-cost passive investment options. The district court explained that Hughes rejected this exact argument in holding that a fiduciary’s decisions are not insulated merely by giving participants choice over their investments and that fiduciaries have a continuing duty to monitor plan investments.

The court declined to dismiss plaintiffs’ recordkeeping claims because plaintiffs plausibly alleged that the plan paid nearly double the fees charged by similarly sized plans and that defendant failed to monitor those costs. In regards to plaintiffs’ underperformance claims, the court held that the existence and extent of the alleged underperformance was better left for summary judgment given the parties’ differing views on the issue.

Proskauer’s Perspective

While plaintiffs seemingly scored a victory in the first decision since Hughes, the decision does not indicate that this will (or should be) the trend. First, the district court issued its decision one day after Hughes was decided without the benefit of additional briefing, which would have likely included briefing on the Supreme Court’s direction that district courts give “due regard” to the reasons why a fiduciary made the challenged decisions. Second, the district court appears to have, at a minimum, over-emphasized the Supreme Court’s holding as to the plausibility of mutual fund retail share class claims; the Supreme Court did not hold directly or in dicta that a plaintiff may survive dismissal merely by alleging the availability of identical lower-cost mutual fund share classes.

The case is Goodman v. Columbus Reg’l Healthcare Sys., 2022 U.S. Dist. LEXIS 13489 (M.D. Ga. Jan. 25, 2022).

© 2022 Proskauer Rose LLP.
For more articles about 401(k) plans, visit the NLR Labor & Employment section.

CFPB to Examine College Lending Practices

On January 20, the CFPB announced that it would begin examining the operations of post-secondary schools that offer private loans directly to students and update its exam procedures to include a new section on institutional student loans.  The CFPB highlights its concern about the student borrower experience in light of alleged past abuses at schools that were previously sued by the CFPB for unfair and abusive practices in connection with their in-house private loan programs.

When examining institutions offering private education loans, in addition to looking at general lending issues, CFPB examiners will be looking at the following areas:

  • Placing enrollment or attendance restrictions on students with loan delinquencies;
  • Withholding transcripts;
  • Accelerating payments;
  • Failing to issue refunds; and
  • Maintaining improper lending relationships

This announcement was accompanied by a brief remark from CFPB Director Chopra:  “Schools that offer students loans to attend their classes have a lot of power over their students’ education and financial future.  It’s time to open up the books on institutional student lending to ensure all students with private student loans are not harmed by illegal practices.”

Putting it Into Practice:  The CFPB’s concern with the experience of student borrowers is in line with a number of enforcement actions pursued by the Bureau against post-secondary schools.  The education loan exam procedures manual is intended for use by Bureau examiners, and is available as a resource to those subject to its exams. These procedures will be incorporated into the Bureau’s general supervision and examination manual.

Article By Moorari Shah, A.J. S. Dhaliwal, and Pouneh Almasi of Sheppard, Mullin, Richter & Hampton LLP

For more financial legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

Conviction of Harvard Researcher for Chinese Ties Serves as Caution to Universities

Charles Lieber, former chair of the chemistry and chemical biology department at Harvard University, was convicted on December 21st by a jury on two counts of making false statements to federal authorities, two counts of making a false income tax return, and two counts of failing to file reports of foreign bank and financial accounts with the IRS due to his relationships with China’s Thousand Talents Program (TTP) and the Wuhan University of Technology (WUT). He received cash and living expenses from TTP and more than $1.5 million to establish a WUT research lab. Lieber opened an account at a Chinese bank into which WUT made salary deposits, but he did not report the existence of the account as required by U.S. law.

In a statement released by the U.S. Attorney’s Office for the District of Massachusetts following the verdict, Lieber was said to have assumed the role of “Strategic Scientist” for WUT, a position that he did not disclose, and served as a TTP contractor from at least 2012 through 2015. As the Department of Justice described TTP, “China’s Thousand Talents Plan is one of the most prominent Chinese talent recruitment plans designed to attract, recruit, and cultivate high-level scientific talent in furtherance of China’s scientific development, economic prosperity, and national security.”

Lieber will face maximum jail terms of up to three to five years for each of the counts for which he was convicted, as well as fines of up to $250,000 for each count. Lieber’s sentencing hearing has not yet been scheduled.

Lieber’s activities serve as just the most recent example of unlawful foreign involvement which negatively impacts U.S. higher education institutions and their personnel, research scientists, and affiliated research and fund-raising organizations. While Lieber’s actions appear to have been clearly intentional, government authorities have also voiced concern regarding the potential for inadvertent disclosures of valuable intellectual property to foreign agents by institutional researchers.

Higher education institutions will need to be prepared for enhanced federal scrutiny of their international relationships if the US Innovation and Competition Act (Senate) and the EAGLE Act (House) are adopted by Congress as appears possible next year. As a footnote, Reuters and The Guardian reported in November that China’s embassy in Washington, D.C. sent letters to executives urging them to oppose the Acts.

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NLRB, Labor Laws and the Impact on NCAA Athletes

Can—and should—college athletes be classified as employees? The answer to that question may be in flux. In a recent episode of the In-House Roundhouse Podcast, Womble Bond Dickinson attorney and host Mark Henriques welcomed Womble Bond Dickinson attorney Mike Ingersoll and University of North Carolina School of Law Professor Barbara Osborne to discuss the latest developments. Both guests were scholarship student-athletes themselves during their college days, adding to their perspective on the many issues pertaining to college athletes as employees. This article is derived from that conversation and is the latest installment in Womble Bond Dickinson’s Opportunity Economy series.

Just when you think you have all the answers about college athletes as employees, the National Labor Relations Board changes the questions.

NLRB General Counsel Jennifer Abruzzo’s September 2021 memorandum states that her office will consider some college athletes to be employees moving forward. But a number of significant questions—including whether Abruzzo’s memo has the full support of the NLRB—remain unanswered.

The NLRB Memo: What it Says

Ingersoll explained that Abruzzo’s memo dovetailing off of the NLRB’s 2015 Northwestern University decision—which really was a non-decision. In that case, the NLRB failed to render a decision as to whether or not Northwestern University’s scholarship football players were university employees under the National Labor Relations Act. That non-decision created a gray area of the law that Abruzzo’s memo seeks to fill.

“Essentially, she has decided her office will prosecute disputes brought by students under the NLR Act as if they are employees,” Ingersoll said. “She said any mischaracterization of players as ‘student-athletes’ – which is a nomenclature that has been used for decades – will itself be consider a violation of the NLRA as far as her office is concerned.”

The NLRB hasn’t adopted this as its official position, though, and the memo appears to be limited only to private colleges and universities, because the NLRA only applies to private schools.

“The memo itself raises more questions than it answers,” Osborne said. “I think it invites student-athletes to file claims that they deserve to be paid as employees, and that opens a whole new can of worms.”

“The memo itself raises more questions than it answers. I think it invites student-athletes to file claims that they deserve to be paid as employees, and that opens a whole new can of worms.”

BARBARA OSBORNE, PROFESSOR AT UNIVERSITY OF NORTH CAROLINA SCHOOL OF LAW

So should the term “student-athlete” be scrubbed from the college sports lexicon?

Ingersoll believes colleges and universities should avoid using it, at least in the short term, if they believe they are at risk of having to defend employment claims in front of the NLRB.

“I always thought of myself as a student-athlete and was proud of that,” Osborne said. “I don’t necessarily know that using that term misidentifies, but you need to classify those people as employees.”

Unanswered Questions in the NLRB Memo

However, as Osborne notes, this raises the first of many serious unanswered questions. The NLRB memo would require at least some college athletes to be classified as employees. However, this is at odds with NCAA rules, which prohibit athletes from being institutional employees.

“So we have a conundrum,” she said.

Another question: Which athletes are covered by the memo? Ingersoll said that is unclear.

“The memo distinguishes ‘Certain Players’ as a capitalized term – but it doesn’t actually define the term,” he said. The NLRB only has jurisdiction over private colleges and universities, not state-supported schools.  The Northwestern University case applied only and explicitly to scholarship football players at Northwestern. It provided no opinion on other players in any other sport or at any other university, Ingersoll noted.

So to which students and sports does the memo apply? Only scholarship players or all varsity athletes? Both men’s and women’s athletics? Only so-called “revenue sports” or any officially sanctioned sport? To date, college officials and athletes don’t have any answers to these questions.

“Wait and see how it gets enforced,” Ingersoll said. “My assumption would be that it is intended to apply as broadly as the GC’s office can make it apply.”

Osborne said, “The ‘Certain Players’ term is very unclear. The only sport she mentions is football, but it’s hard to say if it’s just about football. But if the memo only applies to scholarship football players, you are leaving everybody else vulnerable.”

She explained that the NLRA is all about the ability to unionize and engage in activities related to exploring unionization, with the employer being prohibited from interfering.

“What she’s saying is that if these athletes want to unionize, we’re going to support that and (the colleges) can’t interfere. Again, though, that opens up so many more questions than there are answers,” Osborne said. For example, which athletes may organize? Can only private school athletes organize? And what exactly are “revenue sports?” This may vary from school to school. For example, the University of Georgia’s Gymnastics program is a profitable operation, while many schools actually lose money on football.

Another key question is that if athletes can organize, may they then collectively bargain with the NCAA about its rules and requirements. Ingersoll said all of this is unprecedented territory for college sports.

“From a legal standpoint, there’s been no union activities among college sports that I’m aware of,” he said. “As an athlete, it’s made clear to you early on that when you participate on a team, you are part of a dictatorship, not a democracy. There is no forcing the coaching staff or administration to do something they don’t want to do.”

Osborne said, “I absolutely agree that it’s not something athletes think about doing – they’ve got too much personally at stake…. The flip side is that we do see student-athletes, through the free speech aspect, uniting for causes. I see that as a more hospitable way to open up a dialogue as to what could be done to make things better, but I don’t see that in union terms.”

“From a legal standpoint, there’s been no union activities among college sports that I’m aware of. As an athlete, it’s made clear to you early on that when you participate on a team, you are part of a dictatorship, not a democracy.”

MIKE INGERSOLL

As an example, Ingersoll noted the 2020 college football season, in which a number of teams influenced their conferences to hold the season amid COVID-19 concerns.

What’s Next for Athletes as Employees?

The NLRB memo isn’t the only significant development related to the employment status of college athletes.

An Eastern District of Pennsylvania case brought by college athletes alleges employment status under FLSA demanding wages. The claim survived a motion to dismiss and is now up on appeal. This is quite different from the Seventh Circuit precedent in Berger, which the Appeals Court dismissed because it decided college athletes weren’t employees and, thus, aren’t subject to the FLSA.

“We’ll see what ends up happening at the appellate level in light of these decisions,” Ingersoll said. “At the time of the Berger decision (in 2016), the landscape was significantly different than it is now.”

Also, the NLRB hasn’t adopted the Abruzzo memo as its official position and is limited in scope. But Ingersoll said the memo may “bleed into” state and federal litigation—litigation he expects to increase in volume.

One factor driving increased litigation surrounding college athletes-as-employees is Supreme Court Justice Brett Kavanaugh’s concurrence in this year’s NCAA v. Alston decision. The case opened the door for college athletes to use their name, image and likeness for commercial purposes

“At the point where you get favorable state and federal decisions in court, you get some teeth behind this notion of athletes as employees,” he said.

“At the point where you get favorable state and federal decisions in court, you get some teeth behind this notion of athletes as employees.”

MIKE INGERSOLL

Osborne pointed out that there may be many unintended consequences if student-athletes are reclassified as university employees. For example, scholarships would be considered taxable income, and athletes may even be owed wages. Employment status also may impact Pell Grants or need-based financial aid eligibility. For student-athletes who are dependents on families, how would family taxes be impacted? “There are all sorts of tax implications,” Osborne said.

Such a change in status also could require colleges and universities to provide Worker’s Compensation coverage for student-athletes who are hurt on the job.

And then there is the NLRB memo itself. Is it effective without board adoption? And what would happen if the board does (or does not) adopt it?

“The memo essentially means that Abruzzo and her office will investigate and prosecute claims with the assumption that the athlete is a university employee,” Ingersoll said. However, he said the full board ultimately will have to make a decision on the memo and stake out a position.

“If the board were to reject Abruzzo’s position, that essentially kills it—Abruzzo is bound by the board. The board is going to have to stake out an official position. If the board adopts it, that will be the NLRB’s position and as long as the athlete meets the criteria, then the case will have to proceed under the assumption the athlete is an employee under the NLRA.”

“If the board were to reject Abruzzo’s position, that essentially kills it—Abruzzo is bound by the board. The board is going to have to stake out an official position.”

MIKE INGERSOLL

But the NLRB’s position certainly could change later under a different administration. “The real teeth are in state and federal litigation decisions. That’s when you will see a bit of a sea change,” he said.

“The thing that stops that wave of litigation would be if we have federal legislation—which we’ve had a lot of lobbying for,” Osborne said. Proposals on the table run the gamut from supporting everything the NCAA has done in the past to the proposed College Athlete Bill of Rights, which would provide compensation and revenue sharing for student-athletes. Osborne wonders if the uncertainty created by the memo might force some form of Congressional action.

In addition, she notes that 37 court cases decided that state student-athletes are not employees and do not have rights associated with employment. “We have to reconcile those precedents,” she said.

So the path forward remains uncertain, with many questions still left to be decided.

Ingersoll said, “Justice Kavanaugh did provide a road map for these challenges to move forward. But right now, the NLRB memo is limited in its scope and impact. There should be no rush to judgment until we have some binding case law.”

Also, click here to read “Alston Aftermath: NLRB General Counsel Memo Confirms Employment Status for Certain College Football Players Under the National Labor Relations Act and Declares an End to the ‘Student-Athlete’” by Mike Ingersoll.

Copyright © 2021 Womble Bond Dickinson (US) LLP All Rights Reserved.
For more articles on employment law, visit the NLR Labor & Employment section.