Buy American and Buy European

The Buy American Act was originally passed by Congress in 1933 and has undergone numerous changes across several presidential administrations. While the core of the Act has essentially remained the same, requiring the U.S. government to purchase goods produced in the U.S. in certain circumstances, the domestic preference requirements have changed over the years. While the Buy American Act applies to direct government purchases, the separate (but similarly named) Buy America Act passed in 1982 imposes similar U.S. content requirements for certain federally funded infrastructure projects. Generally, the Buy American Act’s “produced in the U.S.” requirement ensures that federal government purchases of goods valued at more than $10,000 are 100% manufactured in the U.S. with a set percentage of the cost of components coming from the U.S. As of 2024, that set percentage has been increased to 65%. Therefore, the cost of domestic components must be at least 65% of the total cost of components to comply with the rule. Under the existing rules, the threshold will increase to 75% in 2029. These planned changes are consistent with the trend of increasing preferences for domestic goods over time (a trend that has continued across administrations from both sides of the political spectrum).

Unsurprisingly, protectionist policies favoring American production can produce similar protectionist measures enacted by foreign countries. The European Union’s (EU) European Green Deal Industrial Plan (sometimes referred to as the Buy European Act), which includes the Critical Raw Materials Act (CRMA) and the Net-Zero Industry Act (NZIA), were both formally adopted within the last few months. The NZIA, which was agreed upon in February, is aimed at the manufacture of clean technologies in Europe and sets two benchmarks for such manufacturing in the EU: (1) that 40% of the production needed to cover the EU will be domestic by 2030; and (2) that the EU’s production will account for at least 15% of the world’s production by 2040. The NZIA contains a list of net-zero technologies, including wind and heat pumps, battery and energy storage, hydropower, and solar technologies. The CRMA, adopted on March 18, sets forth objectives for the EU’s consumption of raw materials by 2030: that 10% come from local extractions; 40% to be processed in the EU; and 25% come from recycled materials. The CRMA also provides that “not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing from a single third country.”[1] While Europe’s new acts are perhaps more geared towards raw materials and clean technology, the U.S. and Europe’s concerted efforts to focus on domestic production will be something to watch for years to come. In particular, it is worth watching whether the recent EU measures generate a response from U.S. lawmakers. If so, it could accelerate the already increasing stringency of Buy American and Buy America requirements.

[1] https://www.consilium.europa.eu/en/policies/eu-industrial-policy/

by: Kevin P. Daly, Jeffrey J. White , Sabrina M. Galli of Robinson & Cole LLP

For more news on the Buy American Act and the European Green Deal Industrial Plan, visit the NLR Antitrust & Trade Regulation section.

A Guide for All Medicare Whistleblowers

Becoming a whistleblower and notifying federal authorities of Medicare fraud is a big public service and can even lead to a lucrative whistleblower award. Furthermore, the chief concern for interested whistleblowers is whether they could get reprimanded at their job for blowing the whistle on healthcare fraud or even fired, but any form of whistleblower retaliation is unlawful under the Whistleblower Protection Enhancement Act.

If you think that you have uncovered evidence of Medicare fraud and want to learn more about what could happen next, here are four things to know.

  1. There are Lots of Known Ways to Defraud Medicare

Medicare is an $800 billion federal program, but estimates are that tens of billions, if not nearly $100 billion of that is lost to fraud every year – and that estimate is widely regarded as a conservative one.

A lot of this type of health care fraud can be categorized into one of the following types of schemes, many of them having to do with fraudulent billing tactics:

  • Phantom billing, where medical goods or services are billed against Medicare even though they were never provided or the purported patient does not exist
  • Double billing for the same goods or services
  • Providing medically unnecessary healthcare
  • Buying prescription drugs with Medicare drug plan money and then reselling them
  • Upcoding, or providing a healthcare service to a patient, but then billing Medicare for a similar but more expensive one
  • Unbundling, or billing for each service independently even though they are normally charged in a discounted package because they are often performed together
  • Paying or taking financial kickbacks for referring patients to a certain healthcare provider, or to a provider that the referring party has a financial stake in

However, these are just the types of Medicare fraud that have been discovered. There are likely other ways of defrauding the program that have yet to be detected. Therefore, even if the evidence that you have uncovered does not fit squarely into one of these types of Medicare fraud does not necessarily mean that it is not a problem.

  1. What Happens After Deciding the Blow the Whistle on Medicare Fraud

Most people are not completely familiar with how other civil or criminal cases move forward in the justice system. Because whistleblower cases are different and even more nuanced and complex, even fewer people understand the process – and those that presume that they are just like other cases find themselves misinformed.

Whistleblower cases are nearly unique in that they have three parties to them:

  1. The whistleblower
  2. The government
  3. The defendant

After you have found evidence of Medicare fraud and abuse, decided to report suspected fraud and become a whistleblower, and hired a law firm well versed in federal laws to represent you, you will continue to gather evidence to support your allegations. This is a sensitive endeavor, as most whistleblowers only have access to the incriminating evidence through their employment, and their employer may be actively trying to cover up the fraudulent activity.

Being represented by an experienced whistleblower lawyer is essential for this stage of the process. They will have gone through it before and will see how to gather evidence to support your case without exposing yourself to the risk of being detected for reporting fraud.

Once you have a strong case, the next step is to present it to the law enforcement agency that would have jurisdiction over your case. Typically you would present information to the Health and Human Services Office or Office of the Inspector General (OIG) hotline. For Medicare fraud, reports are often made to the Centers for Medicare and Medicaid Services, or CMS. The goal is typically to persuade agents there to intervene in your case, conduct the investigation that you started, and prosecute the fraudsters.

If the agency declines to intervene, you can still pursue the case on the government’s behalf.

  1. You Can Receive a Financial Award

One of the main incentives for whistleblowers is the award that they can receive for bringing the evidence to the attention of federal law enforcement. That award can be substantial.

Because Medicare is a federal program, most claims of Medicare fraud advance under the False Claims Act (31 U.S.C. §§ 3729 et seq.). This federal law provides an avenue for whistleblowers who have evidence of fraud against the government.

Importantly, the False Claims Act offers quite generous whistleblower awards, even when compared to other whistleblower statutes. The amount that you receive depends on several factors, the most important of which is whether the government intervened in your case or not. If it did, you can receive between 15 and 25 percent of the proceeds of the case. If it did not and you prosecuted the case on behalf of the government, you can recover up to 30 percent of the case’s proceeds.

Other factors include:

  • Whether there are other whistleblowers who played a role in the case
  • How important the evidence was that you brought to the table
  • Whether you played a part in the Medicare fraud
  1. Your Job is Protected 

Because workplace retaliation is such a foreseeable outcome of becoming a whistleblower, and because the federal government relies so heavily on whistleblowers, it should come as no surprise that the False Claims Act and other whistleblower statutes provide legal protections in the workplace for those who engage in lawful whistleblower activities.

For Medicare fraud whistleblowers, the False Claims Act’s anti-retaliation provision, 31 U.S.C. § 3730(h), is particularly strong. Not only does it protect you from retaliatory conduct that falls short of termination, like workplace harassment and threats to fire you, it also entitles you to significant remedies if your employer breaks the law and commits an act of reprisal.

Oberheiden P.C. © 2024
For more news on Medicare fraud whistleblowers, visit the NLR Criminal Law / Business Crimes section.

Eleventh Circuit Affirms Dismissal of FCRA Claims Since Alleged Inaccurate Information Was Not Objectively and Readily Verifiable

In Holden v. Holiday Inn Club Vacations Inc., No. 22-11014, No. 22-11734, 2024 WL 1759143 (11th Cir. 2024), which was a consolidated appeal, the United States Court of Appeals for the Eleventh Circuit (“Eleventh Circuit” or “Court”) held that the purchasers of a timeshare did not have actionable FCRA claims since the alleged inaccurate information reported to one of the consumer reporting agencies (“CRAs”) was not objectively and readily verifiable. In doing so, the Eleventh Circuit affirmed two decisions issued by United States District Court for the Middle District of Florida (“District Court”) granting of summary judgment in favor of the timeshare company in the respective cases.

Summary of Facts and Background

Two consumers, Mark Mayer (“Mayer”) and Tanethia Holden (“Holden”), entered into two separate purchase agreements with Holiday Inn Club Vacations Incorporated (“Holiday”) to acquire timeshare interests in Cape Canaveral and Las Vegas, respectively. Holiday is a timeshare company that allows customers to purchase one or more of its vacation properties in weekly increments that can be used annually during the designated period. As part of the transaction, Holiday’s customers typically elect to finance their timeshare purchases through Holiday, which results in the execution of a promissory note and mortgage.

  1. Mayer’s Purchase, Default, and Dispute

On September 15, 2014, Mayer entered into his purchase agreement with Holiday, which contained a title and closing provision stating the transaction would not close until Mayer made the first three monthly payments, and Holiday recorded a deed in Mayer’s name. The purchase agreement also included a purchaser’s default provision stating that upon Mayer’s default or breach of any of the terms or conditions of the agreement, all sums paid by Mayer would be retained by Holiday as liquidated damages and the parties to the purchase agreement would be relieved from all obligations thereunder. Further, the purchase agreement provided that any payments made under a related promissory note prior to the closing would be subject to the purchaser’s default provision. On the same day, Mayer executed a promissory note to finance his timeshare purchase, which was for a term of 120 months. On July 13, 2015, Holiday recorded a deed in Mayer’s name, and he proceeded to tender timely monthly payments until May 2017. As a result of Mayer’s failure to tender subsequent payments, Holiday reported Mayer’s delinquency to the CRA.

Approximately two years later, Mayer obtained a copy of his credit report and discovered Holiday had reported a past-due balance. Thereafter, Mayer sent multiple letters to the CRA disputing the debt, as he believed the purchase agreement was terminated under the purchaser’s default provision. Each dispute was communicated to Holiday, who in turn certified that the information was accurately reported. Mayer sued Holiday for an alleged violation of 15 U.S.C. § 1681s-2(b) of the FCRA based on the furnishing of inaccurate information and failure to “fully and properly re-investigate” the disputes. Holiday eventually moved for partial summary judgment, which the District Court granted. The District Court reasoned that the underlying issue of whether the default provision excused Mayer’s obligation to keep paying was a legal dispute rather than a factual inaccuracy and, in turn, made Mayer’s claim not actionable under the FCRA. Mayer timely appealed to the Eleventh Circuit.

  1. Holden’s Purchase, Default, and Dispute

On June 25, 2016, Holden entered into her purchase agreement with Holiday, which contained a nearly identical title and closing provision to that of Mayer’s purchase agreement. Additionally, Holden’s purchase agreement incorporated a similar purchaser’s default provision. Similarly, Holden executed a promissory note to finance her timeshare purchase, which was for a term of 120 months, and entered into a mortgage to secure the payments under the note. After making her third payment, Holden defaulted and hired an attorney to cancel the purchase agreement pursuant to the closing and title provision and purchaser’s default provision. However, Holiday disputed the purchase agreement was canceled and, on June 19, 2017, recorded a timeshare deed in Holden’s name. More importantly, Holiday reported Holden’s delinquent debt to the CRA.

In response, Holden’s attorney sent three dispute letters to Holiday, which resulted in Holiday investigating the dispute and determining the reporting was accurate since Holden was still obligated under the note. Eventually, Holden sued Holiday for various violations of Florida State law and the FCRA. Holden claimed Holiday reported inaccurate information to the CRA, failed to conduct an appropriate investigation, and failed to correct the inaccuracies. The parties filed competing motions for partial summary judgment, which ended with the District Court granting Holiday’s motion and denying Holden’s motion. Specifically, the District Court held that Holden’s FCRA claim failed because contract disputes regarding whether Holden still owed the underlying debt are legal disputes and not factual inaccuracies. Holden timely appealed to the Eleventh Circuit.

The Fair Credit Reporting Act

As the Eleventh Circuit reiterated in Holden, when a furnisher is notified of a consumer’s dispute, the furnisher must undertake the following three actions: (1) conduct an investigation surrounding the disputed information; (2) review all relevant information provided by the CRA; and (3) report the results of the investigation to the CRA. When a furnisher determines an item of information disputed by a consumer is incomplete, inaccurate, or cannot be verified, the furnisher is required to modify, delete, or permanently block reporting of the disputed information. See 15 U.S.C. § 1681s-2(b)(1)(E). Additionally, any disputed information that a furnisher determines is inaccurate or incomplete must be reported to all other CRAs. See 15 U.S.C. § 1681s-2(b)(1)(D). Despite the foregoing, consumers have no private right of action against furnishers merely for reporting inaccurate information to the CRAs. The only private right of action a consumer may assert against a furnisher is for a violation of 15 U.S.C. § 1681s-2(b) for failure to conduct a reasonable investigation upon receiving notice of a dispute from a CRA. See 15 U.S.C. § 1681s-2(c)(1)).

To successfully prove an FCRA claim, the consumer must demonstrate the following: (1) the consumer identified inaccurate or incomplete information that the furnisher provided to the CRA; and (2) the ensuing investigation was unreasonable based on some facts the furnisher could have uncovered that establish the reported information was inaccurate or incomplete.

The Eleventh Circuit’s Decision

In affirming the District Court’s decisions granting summary judgment and dismissing the FCRA claims, the Eleventh Circuit clarified that whether the alleged inaccuracy was factual or legal was “beside the point. Instead, what matters is whether the alleged inaccuracy was objectively and readily verifiable.” Specifically, the Eleventh Circuit cited to Erickson v. First Advantage Background Servs. Corp., 981 F. 3d 1246, 1251-52 (11th Cir. 2020), which defined “accuracy” as “freedom from mistake or error.” The Eleventh Circuit continued by reiterating that “when evaluating whether a report is accurate under the [FCRA], we look to the objectively reasonable interpretations of the report.” As such, “a report must be factually incorrect, objectively likely to mislead its intended user, or both to violate the maximal accuracy standards of the [FCRA].”

Based on this standard, the Eleventh Circuit held that the alleged inaccurate information on which Mayer and Holden based their FCRA claims was not objectively and readily verifiable since the information stemmed from contractual disputes without simple answers. As such, the Eleventh Circuit found that Holiday took appropriate action upon receiving Mayer and Holden’s disputes by assessing the issues and determining whether the respective debts were due and/or collectible, which thereby satisfied its obligation under the FCRA. While Mayer and Holden argued to the contrary, the Eleventh Circuit held that the resolutions of these contract disputes were not straightforward applications of the law to facts. In support of its decision, the Eleventh Circuit cited to the fact that Florida State courts have reviewed similar timeshare purchase agreements and reached conflicting conclusions about whether the default provisions excused a consumer’s obligation to pay the underlying debt.

Conclusion

Holden is a limited victory for furnishers, as the Eleventh Circuit declined to impose a bright-line rule that only purely factual or transcription errors are actionable under the FCRA and held a court must determine whether the alleged inaccurate information is “objectively and readily verifiable.” Accordingly, there are situations when furnishers are required by the FCRA to accurately report information derived from the readily verifiable and straightforward application of the law to facts. One example of such a situation is misreporting the clear effect of a bankruptcy discharge order on certain types of debt. Thus, furnishers should revisit their investigation and verification procedures so they do not run afoul of the FCRA. Furnishers should also continue to monitor for developing case law as other circuit courts confront these issues.

© 2024 Blank Rome LLP
For more news on Fair Credit Reporting Act Litigation, visit the NLR Litigation / Trial Practice section.

A Closer Look at the FTC’s Final Non-Compete Rule

On April 23, 2024, the Federal Trade Commission (FTC) issued its Final Non-Compete Agreement Rule (Final Rule), banning non-compete agreements between employers and their workers. The Final Rule will go into effect 120 days after being published in the Federal Register. This Final Rule will impact most US businesses, specifically those that utilize non-compete agreements to protect their trade secrets, confidential business information, goodwill, and other important intangible assets.

The Final Rule prohibits employers from entering or attempting to enter into a non-compete agreement with “workers” (employees and independent contractors). Employers are also prohibited from even representing that a worker is subject to such a clause. The Final Rule provides that it is an unfair method of competition for employers to enter into non-compete agreements with workers and is therefore a violation of Section 5 of the FTC Act.

There are few exceptions under the Final Rule. For senior executives, existing non-compete agreements can remain in force. However, employers are barred from entering or attempting to enter into a non-compete agreement with a senior executive after the effective date of the Final Rule. The Final Rule defines “senior executive” as a worker who is both (1) earning more than $151,164 annually and (2) in a “policy-making position” for the business. For workers who are not senior executives, existing non-competes are not enforceable after the effective date. If not invalidated all together, the Final Rule will likely have extensive litigation related to “policy-making position.” According to the current commentary on the Final Rule, the FTC will likely take the position that “senior executive” is a very limited definition.

Further, the Final Rule does not apply to non-competes entered into pursuant to a “bona fide sale of a business entity, of the person’s ownership interest in [a] business entity, or of all or substantially all of a business entity’s operating assets.” As a result, parties entering into transactions can continue to use non-compete agreements in the sale of a business. But transactional lawyers should note that any non-compete in a subsequent employment agreement with a seller will likely be subject to the Final Rule. The Final Rule also does not prohibit employers from enforcing non-compete clauses where the cause of action related to the non-compete clause occurred prior to the effective date of the Final Rule.

The Final Rule also states that agreements that “penalize” or “function to prevent” an employee from working for a competitor are banned and unlawful. For example, a non-disclosure agreement may be viewed as a non-compete when it is so broad that it functions to prevent workers from seeking or accepting other work or starting a business after they leave their job. Similarly, non-solicitation agreements may also be banned under the new rule “where they function to prevent a worker from seeking or accepting other work or starting a business after their employment ends.” The commentary makes clear that the enforceability and legality of these types of agreements will need to be analyzed on a case-by-case basis.

Under the Final Rule, employers are required to provide clear and conspicuous notice to workers who are subject to a prohibited non-compete. This notice must be sent in an individualized communication (text message, hand delivery, mailed to last known address, etc.) and indicate that the worker’s non-compete clause will not be enforced.

The Final Rule has already been challenged in at least two lawsuits, both filed in the state of Texas. The US Chamber of Commerce filed suit in the US District Court for the Eastern District of Texas seeking a declaratory judgment and an injunction to prevent the enactment of the Final Rule. A second suit, filed by Ryan, LLC, a tax services firm, was filed in the US District Court for the Northern District of Texas. Both suits raise similar arguments: (1) the FTC lacks authority to enact the rule due to the major questions doctrine; (2) the Final Rule is inconsistent with the FTC Act; (3) the retroactive nature of the Final Rule exceeds the FTC’s authority and raises Fifth Amendment concerns; and (4) the Final Rule is arbitrary and capricious. The US Chamber of Commerce has also filed a motion to stay the effective date of the Final Rule pending resolution of the lawsuit.

The very nature of how business entities protect their intangible assets is at risk, and the Final Rule will change the contractual dynamic of the employer-employee relationship.

© 2024 Jones Walker LLP
For more on the FTC Non-Compete Rule, visit the NLR Labor & Employment section.

A New Day for “Natural” Claims?

On May 2, the Second Circuit upheld summary judgment in favor of KIND in a nine year old lawsuit challenging “All Natural” claims. In Re KIND LLC, No. 22-2684-cv (2d Cir. May 2, 2024). Although only time will tell, this Circuit decision, in favor of the defense, may finally change plaintiffs’ appetite for “natural” cases.

Over the many years of litigation, the lawsuit consolidated several class action filings from New York, Florida, and California into a single, multi-district litigation with several, different lead plaintiffs. All plaintiffs alleged that “All Natural” claims for 39 KIND granola bars and other snacks were deceptive. Id. at 3. Plaintiff had alleged that the following ingredients rendered the KIND bars not natural: soy lecithin, soy protein isolate, citrus pectin, glucose syrup/”non-GMO” glucose, vegetable glycerine, palm kernel oil, canola oil, ascorbic acid, vitamin A acetate, d-alpha tocopheryl acetate/vitamin E, and annatto.

The Second Circuit found that, in such cases, the relevant state laws followed a “reasonable consumer standard” of deception. Id. at 10. Further, according to the Second Circuit, the “Ninth Circuit has helpfully explained” that the reasonable consumer standard requires “‘more than a mere possibility that the label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.’” Id. (quoting McGinity v. Procter & Gamble Co., 69 F.4th 1093, 1097 (9th Cir. 2023)). Rather, there must be “‘a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.’” Id. To defeat summary judgement, the plaintiffs would need to present admissible evidence showing how “All Natural” tends to mislead under this standard.

The Second Circuit agreed with the lower court that plaintiffs’ deposition testimony failed to provide such evidence where it failed to “establish an objective definition” representing reasonable consumer understanding of “All Natural.” Id. at 28. While one plaintiff believed the claim meant “not synthetic,” another thought it meant “made from whole grains, nuts, and fruit,” while yet another believed it meant “literally plucked from the ground.” Id. The court observed that plaintiffs “fail[ed] to explain how a trier of fact could apply these shifting definitions.” Id. The court next rejected as useful evidence a dictionary definition of “natural,” which stated, “existing or caused by nature; not made or caused by humankind.” Id. at 29. The court reasoned that the dictionary definition was “not useful when applied to a mass-produced snack bar wrapped in plastic” – something “clearly made by humans.” Id.

The court, finally, upheld the lower court’s decision to exclude two other pieces of evidence the plaintiffs offered. First, the Second Circuit agreed that a consumer survey was subject to exclusion where leading questions biased the results. Id. at 21-22. The Second Circuit also agreed that an expert report by a chemist lacked relevance where it assessed “typical” sourcing of ingredients, not necessarily how KIND’s ingredients were manufactured or sourced. Id. at 22-24.

© 2024 Keller and Heckman LLP
by: Food and Drug Law at Keller and Heckman of Keller and Heckman LLP

For more news on Food Advertising Litigation, visit the NLR Biotech, Food, Drug section.

My Safe Florida Condo Pilot Program: Frequently Asked Questions

On April 24, 2024, Florida Governor Ron DeSantis signed House Bill 1029 into law, marking a pivotal moment in bolstering condominium resilience against hurricane damage. This significant milestone is important for Florida’s condominium owners’ associations to recognize in furtherance of efforts to protect Florida’s infrastructure.

House Bill 1029, also known as the My Safe Florida Condominium Pilot Program, aims to provide condominium associations with a mechanism similar to the My Safe Florida Home Program that was previously made available to single family homes. This initiative establishes the My Safe Florida Condominium Pilot Program, enabling eligible condominiums to apply for various grants to fortify their buildings and minimize the impact of hurricanes.

Who is eligible?

Condominium associations that meet specified criteria can apply for mitigation grants under the program.

What are the voting requirements for Condominium Associations?

Associations must obtain approval through a majority vote of the board of directors or a majority vote of the total voting interests of the association to apply for an inspection. Additionally, a unanimous vote of all unit owners within the structure or building subject to the grant is required prior to apply for a grant.

What information needs to be disclosed?

Prior to conducting the vote of unit owners, associations are required to provide clear disclosure of the program using a form that will be created by the Florida Department of Financial Services. The president and treasurer of the board of directors must sign the disclosure form, which will be kept as part of the association’s official records.

Do Condominium Associations need to provide notice?

Yes, condominium associations are required to provide written notice within 14 days of an affirmative vote to participate in the Program to all unit owners, in accordance with the statutory requirements of Section 718.112(2)(d), Florida Statutes.

How much can a Condominium Association apply for in grants?

The grant is capped at $175,000 per condominium association and can be utilized for various improvements, including opening protection, reinforcing roof-to-wall connections, enhancing roof-deck attachments, and implementing secondary water resistance for the roof.

Can individual units participate?

Mitigation grants are awarded to condominium associations collectively, and individual unit owners may not participate in the Program.

House Bill 1029 creates Section 215.5587, Florida Statutes, further solidifying its significance in the state’s efforts to bolster the tens of thousands of condominiums throughout the state. These legislative enhancements are anticipated to enhance community associations in safeguarding their properties and residents against natural disasters.

© 2024 Varnum LLP
For more news on efforts to protect Florida’s infrastructure, visit the NLR Real Estate section.

Bidding Farewell, For Now: Google’s Ad Auction Class Certification Victory

A federal judge in the Northern District of California delivered a blow to a potential class action lawsuit against Google over its ad auction practices. The lawsuit, which allegedly involved tens of millions of Google account holders, claimed Google’s practices in its real-time bidding (RTB) auctions violated users’ privacy rights. But U.S. District Judge Yvonne Gonzalez Rogers declined to certify the class of consumers, pointing to deficiencies in the plaintiffs’ proposed class definition.

According to plaintiffs, Google’s RTB auctions share highly specific personal information about individuals with auction participants, including device identifiers, location data, IP addresses, and unique demographic and biometric data, including age and gender. This, the plaintiffs argued, directly contradicted Google’s promises to protect users’ data. The plaintiffs therefore proposed a class definition that included all Google account holders subject to the company’s U.S. terms of service whose personal information was allegedly sold or shared by Google in its ad auctions after June 28, 2016.

But Google challenged this definition on the basis that it “embed[ded] the concept of personal information” and therefore subsumed a dispositive issue on the merits, i.e., whether Google actually shared account holders’ personal information. Google argued that the definition amounted to a fail-safe class since it would include even uninjured members. The Court agreed. As noted by Judge Gonzalez Rogers, Plaintiffs’ broad class definition included a significant number of potentially uninjured class members, thus warranting the denial of their certification motion.

Google further argued that merely striking the reference to “personal information,” as proposed by plaintiffs, would not fix this problem. While the Court acknowledged this point, it concluded that it did not yet have enough information to make that determination. Because the Court denied plaintiffs’ certification motion with leave to amend, it encouraged the parties to address these concerns in any subsequent rounds of briefing.

In addition, Judge Gonzalez raised that plaintiffs would need to demonstrate that the RTB data produced in the matter thus far was representative of the class as a whole. While the Court agreed with plaintiffs’ argument and supporting evidence that Google “share[d] so much information about named plaintiffs that its RTB data constitute[d] ‘personal information,” Judge Gonzalez was not persuaded by their assertion that the collected RTB data would necessarily also provide common evidence for the rest of the class. The Court thus determined that plaintiffs needed to affirmatively demonstrate through additional evidence that the RTB data was representative of all putative class members, and noted for Google that it could not refuse to provide such and assert that plaintiffs had not met their burden as a result.

This decision underscores the growing complexity of litigating privacy issues in the digital age, and previews new challenges plaintiffs may face in demonstrating commonality and typicality among a proposed class in privacy litigation. The decision is also instructive for modern companies that amass various kinds of data insofar as it demonstrates that seemingly harmless pieces of that data may, in the aggregate, still be traceable to specific persons and thus qualify as personally identifying information mandating compliance with the patchwork of privacy laws throughout the U.S.

© 2024 Proskauer Rose LLP.
For more news on Google Ad Litigation, visit the NLR Litigation / Trial Practice section.

Top Five Labor Law Developments for April 2024

  1. Volkswagen employees at a Chattanooga, Tennessee, facility voted to join the United Auto Workers (UAW). The workers voted 2,628 to 985 to join the UAW. The union has been focusing its organizing efforts at foreign automakers with U.S. facilities following successes with the “Big Three” automakers last year. The UAW won record-breaking pay increases for those workers. Those successes likely increased momentum at Volkswagen. According to a UAW press release, the Volkswagen workers are the first Southern autoworkers outside the Big Three to win a union election. The UAW plans to continue its push to organize at other non-union car manufacturers across the country.
  2. The National Labor Relations Board’s General Counsel (GC) Jennifer Abruzzo issued a memorandum instructing Board Regional Offices to seek enhanced remedies for unlawful work rules or contract terms. Memorandum GC 24-04 (Apr. 8, 2024). While the GC noted progress in achieving make-whole relief relating to back pay for employees “discharged for engaging in union or other protected concerted activity,” she stated such relief must be expanded to include all employees harmed as a result of an unlawful work rule or contract term — such as in an employment or severance agreement — “regardless of whether those employees are identified during the course of the unfair labor practice investigation.” The GC asserted that “mere rescission” of the rule or term does not provide adequate relief. Rather, discipline must be expunged or retracted to make impacted employees whole. Accordingly, Regions should seek settlements for make-whole relief where the discipline or legal enforcement action stemming from an unlawful rule or term “targets employee conduct that ‘touches the concerns animating Section 7,’ unless the employer can show that the conduct actually interfered with the employer’s operations and it was that interference, and not reliance on the unlawful rule or term, that led to the employer’s action.” Regions should seek and obtain information from employers regarding which employees were impacted with discipline or legal enforcement action..
  3. The Board reported significant increases in union election petitions and unfair labor practice charges. According to a Board press release, union activity is still on the rise, with both unfair labor practice charges and election petitions increasing at the highest levels in decades. In the first six months of fiscal year (FY) 2024 (which began Oct. 1, 2023), the Board noted a 7% increase in unfair labor practice charges compared to the same period last year. Union election petitions increased 35%, from 1,199 in the first six months of FY2023 to 1,618 during the same period in FY2024. RM petitions by employers have particularly skyrocketed — accounting for 281 of filed petitions — due to the Board’s new framework for when an employer needs to file an RM petition after receiving a demand for union recognition..
  4. The Department of Labor’s final rule for Occupational Safety and Health Administration (OSHA) inspections raises unionization concerns for employers. The rule aims to clarify (but it instead expands) the rights of employees to authorize third-party representatives to accompany an OSHA compliance safety and health officer during a workplace inspection. As a result, however, the rule seemingly allows a third-party union representative during an organizing campaign to report a safety concern to OSHA and then gain direct access to an employer’s workplace during the inspection that follows. This would give union organizers unprecedented access and broaden unions’ access rights to employer property. The rule is scheduled to take effect on May 31, 2024.
  5. Law360 reported that the College Basketball Players Association filed an unfair labor practice charge against the University of Notre Dame regarding classification of college athletes. University of Notre Dame, 25-CA-340413 (Apr. 18, 2024). The charge alleges Notre Dame violated the National Labor Relations Act “by classifying college athletes as ‘student-athletes.’” The charge follows the Board GC’s 2021 memorandum, Memorandum GC 21-08, in which she stated her position that student-athletes at private universities are “employees” under the Act because they perform services for their colleges and the National Collegiate Athletic Association in return for compensation and are subject to their respective college’s control. The Board has yet to rule on the issue.
Jackson Lewis P.C. © 2024
by: Jonathan J. Spitz, Richard F. Vitarelli, Nicholas A. Scotto, Lorien E. Schoenstedt of Jackson Lewis P.C.
For more news on Labor Law Developments in April 2024, visit the NLR Labor & Employment section.

Five Compliance Best Practices for … Conducting a Risk Assessment

As an accompaniment to our biweekly series on “What Every Multinational Should Know About” various international trade, enforcement, and compliance topics, we are introducing a second series of quick-hit pieces on compliance best practices. Give us two minutes, and we will give you five suggested compliance best practices that will benefit your international regulatory compliance program.

Conducting an international risk assessment is crucial for identifying and mitigating potential risks associated with conducting business operations in foreign countries and complying with the expansive application of U.S. law. Because compliance is essentially an exercise in identifying, mitigating, and managing risk, the starting point for any international compliance program is to conduct a risk assessment. If your company has not done one within the last two years, then your organization probably should be putting one in motion.

Here are five compliance checks that are important to consider when conducting a risk assessment:

  1. Understand Business Operations: A good starting point is to gain a thorough understanding of the organization’s business operations, including products, services, markets, supply chains, distribution channels, and key stakeholders. You should pay special attention to new risk areas, including newly acquired companies and divisions, expansions into new countries, and new distribution patterns. Identifying the business profile of the organization, and how it raises systemic risks, is the starting point of developing the risk profile of the company.
  2. Conduct Country- and Industry-Specific Risk Factors: Analyze the political, economic, legal, and regulatory landscape of each country where the organization operates or plans to operate. Consider factors such as political stability, corruption levels, regulatory environment, and cultural differences. You should also understand which countries also raise indirect risks, such as for the transshipment of goods to sanctioned countries. You also should evaluate industry-specific risks and trends that may impact your company’s risk profile, such as the history of recent enforcement actions.
  3. Gather Risk-Related Data and Information: You should gather relevant data and information from internal and external sources to inform the risk-assessment process. Relevant examples include internal documentation, industry publications, reports of recent enforcement actions, and areas where government regulators are stressing compliance, such as the recent focus on supply chain factors. Use risk-assessment tools and methodologies to systematically evaluate and prioritize risks, such as risk matrices, risk heat maps, scenario analysis, and probability-impact assessments. (The Foley anticorruption, economic sanctions, and forced labor heat maps are found here.)
  4. Engage Stakeholders: Engage key stakeholders throughout the risk-assessment process to gather insights, perspectives, and feedback. Consult with local employees and business partners to gain feedback on compliance issues that are likely to arise while also seeking their aid in disseminating the eventual compliance dictates, internal controls, and other compliance measures that your organization ends up implementing or updating.
  5. Document Findings and Develop Risk-Mitigation Strategies: Document the findings of the risk assessment, including identified risks, their potential impact and likelihood, and recommended mitigation strategies. Ensure that documentation is clear, concise, and actionable. Use the documented findings to develop risk-mitigation strategies and action plans to address identified risks effectively while prioritizing mitigation efforts based on risk severity, urgency, and feasibility of implementation.

Most importantly, you should recognize that assessing and addressing risk is an ongoing process. You should ensure your organization has established processes for the ongoing monitoring and review of risks to track changes in the risk landscape and evaluate the effectiveness of mitigation measures. Further, at least once every two years, most multinational organizations should be updating their risk assessment periodically to reflect evolving risks and business conditions as well as changing regulations and regulator enforcement priorities.

© 2024 Foley & Lardner LLP
For more on Risk Assessments, visit the NRL Corporate & Business Organizations section.

European Union | Latest Immigration Updates

The adopted revision to the 2011 single-permit directive has been published in the Official Journal of the European Union, and the EU Council has temporarily suspended certain elements of EU law that regulate visa issuance to Ethiopian nationals.

Key Points:

  • The single-permit directive enters into force on May 21, 2024, and EU member states have until May 21, 2026, to implement the terms of the directive domestically.
    •  Member states will maintain the ability to decide which and how many third-country workers to admit to their labor market.
  • For Ethiopian nationals, the standard visa-processing period has been changed to 45 calendar days instead of 15. In addition, EU member states will no longer be able to waive certain requirements when issuing visas to Ethiopian nationals, including evidence that must be submitted to issue multiple-entry visas and visa fees for holders of diplomatic and service passports.

Background: As BAL previously reported, the directive currently in place was designed to attract additional skills and talent to the EU to address shortcomings within the legal migration system, provide an application process for EU countries to issue a single permit and establish common rights for workers from third countries. The revised law shortens the application procedure for a permit to reside for the purpose of work in a member state’s territory and aims to strengthen the rights of third-country workers by allowing a change of employer and a limited period of unemployment. The new agreement is part of the “skills and talent” package, which addresses shortcomings in legal migration policy and aims to attract greater foreign skilled talent.

The decision to tighten visa guidelines for Ethiopia is in response to an assessment by the EU Commission, which found that Ethiopian authorities have not fully cooperated with officials regarding readmission requests and difficulties persist in issuing emergency travel documents. The commission cited the organization of both voluntary and non-voluntary return operations as a determining factor in altering Ethiopia’s visa privileges within the European Union.

BAL Analysis: The single-permit directive is directed at non-EU nationals working in the EU and aims to create an environment where these individuals are treated equally regarding their working conditions, social security and tax benefits, and recognizing their unique qualifications.

©2024 Berry Appleman & Leiden. All Rights Reserved.
For more news on Immigration Updates for the EU, visit the NLR Immigration section.