Location Data Gathering Under Europe’s New Privacy Laws

Why are EU regulators particularly concerned about location data?

Location-specific data can reveal very specific and intimate details about a person, where they go, what establishments they frequent and what their habits or routines are. Some location-specific data garners heightened protections, such as where and how often a person obtains medical care or where a person attends religious services.

In the U.S., consumers typically agree to generalized privacy policies by clicking a box prior to purchase, download or use of a new product or service. But the new EU regulations may require more informed notice and consent be obtained for each individual use of the data that a company acquires. For example, a traffic app may collect location data to offer geographically-focused traffic reports and then also use that data to better target advertisements to the consumer, a so-called “secondary use” of the data.

The secondary use is what is concerning to EU regulators. They want to give citizens back control over their personal data, which means meaningfully and fully informing them of how and when it is used. For example, personal data can only be gathered for legitimate purposes, meaning companies should not continue to collect location data beyond what is necessary to support the functionality of their business model; also additional consent would need to be obtained each time the company wants to re-purpose or re-analyze the data they have collected. This puts an affirmative obligation on companies to know if, when and how their partners are using consumer data and to make sure such use has been consented to by the consumer.

What should a company do that collects location data in the EU? 

  1. Consumers should be clearly informed about what location information is being gathered and how it will be used, this does not just mean the primary use of the data, but any ancillary uses such as to target advertisements, etc.;

  2. Consumers should be given the opportunity to decline to have their data collected, or to be able to “opt-out” of any of the primary or secondary uses of their data;

  3. Companies need to put a mechanism in place to make consumers aware if the company’s data collection policies change, for example, a company may not have a secondary use for the data now, but in 2 years it plans on packaging and reselling that data to an aggregator; and

  4. Companies must have agreements in place with their partners in the “business ecosystem” to ensure their partners are adhering to the data collection permissions that the company has obtained.

© Polsinelli PC, Polsinelli LLP in California

OSHA Issues Special Zika Guidance to Employers

Zika VirusThe Occupational Safety and Health Administration has issued “interim guidance” to provide employers and workers information and advice on preventing occupational exposure to the mosquito-borne Zika virus.

The guidance’s recommended actions (Control & Prevention) for employers and general outdoor workers include the following:

  • Employers should inform workers about their risks of exposure.
  • Employers should provide workers insect repellants and encourage their use. Workers should use the repellants.
  • Employers should provide workers with clothing that covers their hands, arms, legs, and other exposed skin and encourage them to wear the clothing. They also should consider providing workers with hats with mosquito netting that covers the neck and face. Workers should wear the provided clothing, as well as socks that cover the ankles and lower legs.
  • In warm weather, employers should encourage workers to wear lightweight, loose-fitting clothing, which provides a barrier to mosquitos. Workers should wear this type of clothing.
  • Employers and workers should eliminate sources of standing water (e.g., tires, buckets, cans, bottles, and barrels), which are considered mosquito breeding areas. Employers should train workers to recognize the importance of getting rid of these breeding areas at worksites.
  • If requested, employers should consider reassigning to indoor tasks any female worker who indicates she is pregnant or may become pregnant, as well as any male worker who has a sexual partner who is pregnant or may become pregnant. Workers in these circumstances should talk to their supervisors about outdoor work assignments.
  • Workers should seek medical attention “promptly” if symptoms from infection develop.

Employers and workers in healthcare and laboratory settings are advised to follow good infection control and biosafety practices (including universal precautions) as appropriate and specific biosafety guidance from the Centers for Disease Control and Prevention for working with the Zika virus in the laboratory.

OSHA also noted that mosquito control workers may require additional precautions — more protective clothing and enhanced skin protection — beyond those recommended for general outdoor workers. Workers who mix, load, apply, or perform other tasks involving wide-area (or area) insecticides may need additional protection to prevent or reduce exposure to hazardous chemicals. When applying insecticides, these workers may require respirators, worn in accordance with OSHA’s respirator standard.

For employers of workers with suspected or confirmed Zika virus, OSHA recommends “general guidance.” This includes making certain supervisors and potentially exposed workers know about Zika symptoms, training workers to receive immediate medical attention after suspected exposure, and considering options for providing sick leave during the infectious period.

Employers with workers who travel to or through Zika-affected areas, such as travel industry employees, airline crews, and cruise line workers, the agency recommends following certain “precautions” outlined by the CDC, including flexible travel and leave policies and delaying travel to Zika-affected areas.

Jackson Lewis P.C. © 2016

Brexit: Government Statement on EU Nationals in UK

UK EU nationals BrexitA small piece of employment-related Brexit news for you. The Cabinet Office, Home Office and Foreign & Commonwealth Office have published a webpage with a statement on the status of EU nationals in the UK. In it they state: “When we do leave the EU, we fully expect that the legal status of EU nationals living in the UK, and that of UK nationals in EU member states, will be properly protected. The government recognises and values the important contribution made by EU and other non-UK citizens who work, study and live in the UK”.

The webpage also contains questions and answers for those who may be affected, but the position is very much that there has been no change to the rights and status of EU nationals in the UK as a result of the referendum.

What Should Employers Do Next?

If any of your workforce are worried about their future in the UK, point them in the direction of the statement for reassurance.

ARTICLE BY Sarah Bull & Christopher Hitchins of Katten Muchin Rosenman LLP
©2016 Katten Muchin Rosenman LLP

Increased Penalties for Immigration-Related Violations

increased immigration penaltiesThe U.S. Department of Justice has issued a new rule increasing penalties against employers for various immigration-related violations. The new penalty structure applies to civil penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015.

Given the significant increase in penalties for immigration-related violations, employers should use particular care when dealing with I-9 form completion and other immigration-related employment processes and practices. We recommend that all employers perform an annual internal I-9 audit and consider periodic I-9 audits by third parties. Please refer to our prior alert as guidance when performing internal I-9 audits.

The penalty structure for first violations is set forth below. Increased penalties for repeat violations are also in effect.

New and Old Penalty Comparison

Type of Violation

Old Penalty Structure

New Penalty Structure

I-9 Verification Paperwork

$110 – $1,110

$216 – $2,156

Unlawful Employment of Unauthorized Workers

$375 – $3,200

$539 – $4,313

Unfair Employment Practices (Includes Discrimination)

$375 – $445

$3,200 – $3,563

Unfair Employment Practices (Document Abuse)

$110 – $1,100

$178 – $1,782

H-1B Violations (Includes Filing Fees Paid by Employee, LCA Public Access File Violations)

Maximum $1,000

Maximum $1,782

H-1B Violations (Includes Discrimination, Willful Failure Pertaining to Wages/Working Conditions)

Maximum $5,000

Maximum $7,251

H-1B Violations (Includes Certain Displacement of U.S. Workers)

Maximum $35,000

Maximum $50,758

H-2B Violations (Includes Failure to Pay Wages, Unlawful Termination)

Maximum $10,000

Maximum $11,940

© MICHAEL BEST & FRIEDRICH LLP

Join the National Association of Minority & Women Owned Law Firms for their 2016 Annual Meeting, September 14-16 in Houston, Texas

Join NAMWOLF at the 2016 Annual Meeting & Expo in Houston, Texas. The Annual Meeting is a great opportunity to increase your participation and relationships with NAMWOLF Law Firm Members. All attendees further benefit by attending CLE sessions specific to Law Firm Member practice areas, which provides greater insight into each Law Firm Member’s experience and capability to handle complex legal matters.

NAMWOLF Annual Meeting

The NAMWOLF Annual Meeting & Law Firm Expo is a three-day conference providing unique opportunities to connect corporate counsel from Fortune 1000 companies and minority and women owned law firms. The conference features NAMWOLF’s signature event, the Law Firm Expo, which provides an opportunity for In-House Counsel to meet with the Nation’s top minority and women owned law firms in a relaxed networking environment. We provide top notch continuing legal education and networking.

FOR MORE INFORMATION

Visit www.namwolfmeetings.org  for the conference schedule, room block information, and registration information.

Immigration Through Investment: A Comparison of the U.S. EB-5 Program vs. the Quebec Immigrant Investor Program

There are currently many different investment immigration programs offered by countries around the world, all of which offer their own unique benefits. Two popular programs are the EB-5 Program in the United States and the Quebec Investment Immigration Program (QIIP) offered in Canada. The following comparison provides an in-depth look at the parameters of the two largest investor immigration programs in North America.

USA CANADA foreign investment comparision

Minimum Investment Amount

For the U.S. EB-5 Program, the minimum capital investment amount is USD 500,000 for an investment into a Targeted Employment Area (TEA), which is a rural area or area of high unemployment. For all other investments, a minimum of USD 1,000,000 is required. However, it is anticipated that these minimum investment amounts may increase in the near future. Applicants to the QIIP must agree to invest CAD 800,000 risk free, which will be returned after 5 years. This investment is fully guaranteed by the Quebec government.

Minimum Net Worth

While there is no minimum net worth requirement for the EB-5 program, QIIP applicants must demonstrate net worth of at least CAD 1.6 million obtained through lawful means, either alone or together with their accompanying spouse/partner. Net worth includes assets such as property, bank accounts, stocks and bonds, investments, and pension funds, among others.

Type of Investment

EB-5 investors must make an at-risk investment into a new commercial enterprise, meaning any for-profit activity formed for the ongoing conduct of lawful business; this does not include non-commercial activity such as ownership of a private residence. On the contrary, investments under the QIIP are risk free and guaranteed by the Quebec government. The minimum investment amount will either be returned in full after 5 years or can be financed by a Canadian financial institution.

Job Creation Requirement

As mentioned above, there is no job creation requirement for the QIIP. However, each EB-5 investment must create at least 10 full-time jobs for qualifying U.S. workers within two years of the investor’s admission to the U.S. as a Conditional Permanent Resident. This can be either direct job creation for 10 identifiable W-2 employees at the commercial enterprise where the investor directly made his capital investment, or it can be indirect job creation, in which jobs are shown to be created collaterally or due to investor’s capital investment into a commercial enterprise affiliated with a regional center.

Switching Consumer Device to Ad-Supported Environment Is Not Deceptive under New York Law

Slingbox AdvertisingIf your company sells a smart device to a consumer, can it later turn the device into a paid advertising platform? Can it do so without advanced disclosure?  A recent court ruling suggests the answer is “yes,” at least in New York.

In In re Sling Media Slingbox Advertising Litig., No. 15-05388 (S.D.N.Y. Aug. 12, 2016), consumers who purchased a “Slingbox” claimed they bought the device solely to “sling” their cable television service from one place (their home) to another device located anywhere (e.g., a vacation rental, office, etc.) over the Internet, but the manufacturer began adding its own advertising to the internet transmission.  The consumers claimed that, in addition to the ads already included in the feed pre-slinging, Sling Media inserted ads that played before (or alongside) the post-slinging feed in the form of banner advertisements that appeared on the edge of the screen (and which, purportedly, would disappear if the user viewed the streamed content in full screen mode or purchased a certain app for an ad-free experience).   Plaintiffs portrayed Sling Media’s imposition of ads as the beginning of a parade of horribles in which various “smart” devices—from cars to dishwashers—suddenly begin “forc[ing]” drivers, passengers, etc. to watch “unwanted” ads.  The consumers asserted the alleged unilateral insertion of ads violated the consumer protection laws of forty-eight states, including New York General Business Law (GBL) § 349.

The district court dismissed the claims, finding that New York law governed and that the allegations did not describe any misleading or deceptive conduct or actual injury.

The court first found that there were no viable claims of fraud or deceit. For example, there was no allegation that Sling Media actually stated the slinging functions would be “ad free.”  Likewise, the court observed that the lead plaintiffs failed to allege whether they bought their devices after Sling Media allegedly formed its intent to insert ads and before Sling Media launched the new feature (thereby disclosing the intent).

Critically, the court rejected the assertion that it is necessarily deceptive to sell a consumer a device meant to do one thing—transmit programming separately purchased by a consumer from his or her cable operator—and then use it for an additional function—transmitting advertising for which Sling Media was being paid. The court found that there was no allegation that the lead plaintiffs themselves subjectively expected an “ad-free experience” when they purchased a Slingbox, let alone plausible allegations that objectively reasonable consumers care about the insertion of ads by Sling Media such that the company’s alleged failure to disclose a future plan to disseminate advertisements was a “material” deception.

The court also found that the consumers failed to allege “injury.” The plaintiffs implied that Sling Media’s “use” of the plaintiffs’ property was itself an injury (like a private version of a “takings” claim).  But the court ruled that, to allege injury, the plaintiffs would have to plead facts showing that Sling Media’s ad insertions somehow prevented consumers from using the device to watch television or made it more expensive to do so.  Ultimately, the court ruled that the complaint was devoid of any allegations regarding how the insertion of ads, “which may be beneficial, detrimental or of no consequence based on consumers’ personal tastes, likes, or dislikes, constituted or caused Plaintiffs’ the type of harm that might qualify as an ‘actual injury’ within the meaning of GBL § 349.”  The court also underscored that, in New York, alleged “deception” itself is not “injury.” (See Op. at 11, n. 15 (citing Small v. Lorillard Tobacco Co., Inc., 94 N.Y.2d 43, 56 (1999) (consumers who buy a product that they would not have purchased absent deceptive conduct, without more, have not suffered injury)).

Lastly, and importantly for the “smart” device industry, the court noted that plaintiffs could not establish that ad insertion impaired any “legal right established by contract.”  The software needed to use the Slingbox was only licensed to consumers and the license did not reference advertising one way or the other.  Moreover, the license allowed Sling Media to modify the software (for example, to insert additional advertisements).

The impact of the Sling Media decision is tempered by the fact that it was a decision on a motion to dismiss (and allowed plaintiffs to move for leave to amend).  And it was decided under New York’s consumer fraud statute, not California’s potentially more liberal laws.  That said, the decision stakes out several key points to consider in switching a consumer device (or paid service) from an ad-free to an ad-supported environment:

  • Have affirmative representations been made about ads one way or the other?

  • Is there evidence about whether consumers view the addition of ads as a benefit? Or whether they care at all?

  • Does the addition of ads interfere with any core functions of the device or service?

  • Does the addition of ads actually make it more costly to use the device or service?

Finally, as always, consider whether you have an effective dispute resolution provision covering the device and/or any service or software, including class action waivers (to the extent permitted by law).

© 2016 Proskauer Rose LLP.

Ninth Circuit Weighs In: Nevada “Superpriority” Law for HOA Superliens Violates Due Process

HOA superliensIn a 2-1 decision, the United States Court of Appeals for the Ninth Circuit overruled the 2014 decision from the Nevada Supreme Court about which we previously wrote. In Bourne Valley Court Trust v. Wells Fargo Bank, N.A., (August 12, 2016), the federal appellate court holds that the non-judicial foreclosure of Nevada HOA superliens cannot constitutionally extinguish a mortgage lender’s security interest.

In 2014, the Nevada Supreme Court held that, as a matter of lien priority, the foreclosure of a superlien for HOA assessments can extinguish a first mortgage. However, the Nevada Supreme Court did not address whether the provisions of Nevada state law governing notice to purported junior lienholders, including mortgagees, were constitutional.

In Bourne Valley, the home in question had a mortgage loan for $174,000 from Plaza Home Mortgage. The beneficial interest in the noted and deed was subsequently assigned to Wells Fargo, N.A. in 2011.  After the homeowner fell behind on her HOA payments, the HOA recorded a notice of delinquent assessment lien for $1,298.57 in August 2011.  In October 2011, the HOA recorded a notice of default and election to sell the home. Then, on April 9, 2012, the HOA recorded a notice of trustee/foreclosure sale against the property.  The Horse Pointe Avenue Trust then paid $4,145 for the home at a foreclosure sale, before conveying its interest in the property to the Bourne Valley Court Trust, which then filed an action to quiet title and extinguish any other junior liens.

In Bourne Valley, the Ninth Circuit panel notes that Nevada state law requires a purported junior lienholder to “opt in” before receiving notice of an HOA foreclosure sale, which the Court calls a “peculiar scheme” for providing mortgage lenders with information about when an HOA intended to foreclose on a property.  “Even though such foreclosure forever extinguished the mortgage lenders’ property rights, the [Nevada] statute contained “opt in” provisions requiring that notice be given only when it had already been requested,” the Court noted.  “Thus, despite that only the homeowners’ association knew when and to what extent a homeowner had defaulted on her dues, the burden was on the mortgage lender to ask the homeowners’ association to please keep it in the loop regarding the homeowners’ association’s foreclosure plans,” the Court continued. “How the mortgage lender, which likely had no relationship with the homeowners’ association, should have known to ask is anybody’s guess.”

Therefore, the Court concludes, Nevada’s laws violate the Due Process Clause of the U.S. Constitution.  From the Court’s decision:

Nevada Revised Statutes section 116.3116 et seq. strips a mortgage lender of its first deed of trust when a homeowners’ association forecloses on the property based on delinquent HOA dues. Before it was amended, it did so without regard for whether the first deed of trust was recorded before the HOA dues became delinquent, and critically, without requiring actual notice to the lender that the homeowners’ association intends to foreclose.

We hold that the Statute’s “opt-in” notice scheme, which required a homeowners’ association to alert a mortgage lender that it intended to foreclose only if the lender had affirmatively requested notice, facially violated the lender’s constitutional due process rights under the Fourteenth Amendment to the Federal Constitution. We therefore vacate the district court’s judgment and remand for proceedings consistent with this opinion.

The Court gets specific:

But that the foreclosure sale itself is a private action is irrelevant to Wells Fargo’s due process argument. Rather than complaining about the foreclosure specifically, Wells Fargo contends—and we agree—that the enactment of the statute unconstitutionally degraded its interest in the property. Absent operation of the statute, Wells Fargo would have had a fully secured interest in the property. A foreclosure by a homeowners’ association would not have extinguished Wells Fargo’s interest. But with the statute in place, Wells Fargo’s interest was not secured. Instead, if a homeowners’ association foreclosed on a lien for unpaid dues, Wells Fargo would forfeit all of its rights in the property.

For now, the Bourne Valley opinion is binding on all Nevada federal courts. It will also serve as strong persuasive authority (at the very least) in actions pending in Nevada state court, as well as throughout the U.S. in states with similar paradigms.

Delta, Boarding Line

“HOA liens, the elderly, and those with military service may now board.”

Copyright © 2016 Womble Carlyle Sandridge & Rice, PLLC. All Rights Reserved.

Warning: Don’t Use Trademarked Olympic Hashtags, Images

Olympic hashtagsWith all of the hype and public attention paid to the Olympics, you and your employees should be aware of the rules that govern the use of hashtags and images related to the Olympic games. The U.S. Olympic Committee (USOC) and the International Olympic Committee (IOC) have historically been very aggressive in policing any use of the Olympic trademarks, images, and hashtags. This year’s games are no exception.

In the last few weeks, the USOC has sent a number of letters to companies that sponsor athletes (who now happen to be Olympians) but have no sponsorship relationship with the USOC or the IOC warning them not to discuss the games on their corporate social media accounts. Companies have specifically been told that they cannot use the trademarked hashtags “#Rio2016” or “#TeamUSA” in any of their postings. The letters also warn companies not to reference Olympic results or to repost or share anything from the official Olympic social media accounts, this includes use of any Olympic photos, logos, or even congratulatory posts to Olympic athletes. While media companies are largely exempt, all other commercial entities should carefully monitor their social media accounts for any Olympic commentary.

Olympic trademarks are the subject of intense legal protections around the world and the IOC and USOC will pursue alleged offenders regardless of their size. In fact, previous enforcement actions have ranged from trademark suits against small restaurants with the word “Olympic” in their names to issuing cease and desist letters to companies that used trademark hashtags such as #Sochi2014 during past games. Guidelines about Olympic brand usage can be found by clicking here.

© Copyright 2016 Armstrong Teasdale LLP. All rights reserved

Federal Election Commission to Reconsider Political Involvement by U.S. Subsidiaries of Foreign Corporations on Tuesday

Feederal Election CommissionForeign nationals, both individuals and corporations, have long been barred from making contributions in federal, state or local elections in the United States. The statutory prohibition includes contributions made “directly” or “indirectly,” bars the solicitation as well as the making of contributions, and since 2002, includes a ban on expenditures, independent expenditures, or electioneering communications by foreign nationals.  Penalties are stiff, including incarceration for a criminal violation.

But how should the law treat U.S. corporations that are subsidiaries of a foreign corporate parent? Are they “American” if run by U.S. citizens, incorporated in the United States, and U.S. citizens make all funding and spending decisions?  The Federal Election Commission first answered this question in a  1978 advisory opinion and, in essence concluded that if U.S. citizens control the decisions about contributions and the operation of the PAC, using corporate funds raised from U.S. operations, and the PAC contains only funds from lawful U.S. donors, the ban on “indirect” contributions by a foreign national does not apply, even if the U.S. subsidiary is wholly owned by a foreign parent company.

This view has always had its dissenters, but for decades this has been the view of a majority at the FEC. However, since 2012, at least three FEC Commissioners have argued that this view of the law is incorrect, and that the issues should be reconsidered and/or reversed so that U.S. subsidiaries of foreign corporations would be barred from making contributions or expenditures in federal, state or local elections, including being barred from operating a corporate PAC.  This has generated 3-3 deadlocks in a number of advisory  opinions. The FEC will revisit the issue Tuesday, as Commissioner Ravel has placed the issue on the agenda for the FEC’s next meeting, seeking to remove the exemption for U.S. subsidiaries run by U.S. nationals.

There seem to be three principal arguments in favor of a change.

  • The tools presently available to enforce the law are too weak to address the threat, and only an outright ban is sufficient to stop foreign involvement.

  • Even when foreign nationals have no direct role in contribution decisions, the foreign ownership alters the thinking of the Americans who run the U.S. subsidiary, and their loyalties cannot help but shift to the interests of their foreign owners, and only a total ban can prevent this indirect influence.

  • Citizens United led to an unwarranted expansion of corporate political power, and this is one way to reign it in.

In a statement released in advance of the meeting, Commissioner Ravel seems to be advancing the first of these arguments, citing a recent and successful Justice Department prosecution of a foreign national who funneled contributions into a state election, and a recent news report alleging that foreign nationals directly controlled a U.S. corporation’s decision to give to a super PAC. Some will take this as a sign the current regime is working, with violations being uncovered and prosecuted.

The issue is unlikely to be resolved at the FEC on Tuesday, but will remain a hot button topic in campaign finance, and should be on everyone’s radar screen if Congress takes up the issue of campaign finance reform in the next Congress.

© 2016 Covington & Burling LLP