INSIDE COMPLIANCE – Page 6 – Loyola University Chicago School of Law

Legal Outcomes of the Attempted Ban on Non-Compete Agreements

October 14, 2024Noncompetes

In April of 2024, The Federal Trade Commission (FTC) issued their final rule banning non-competes across the nation in an effort to promote competition. A non-compete contract is an agreement between an employee and an employer where the employee agrees not to work for competitors or start a competing business for a certain period after leaving the company. Non-competes are meant to protect the employer’s business secrets, customers, or sensitive information from being used by rivals. The FTC’s proposed rule aimed to eliminate nearly all non-compete clauses and declare them an “unfair method of competition” under the rule. The rule would affect existing agreements, except for certain senior executives, and require employers to notify affected workers of its enforcement. It also sought to prohibit employers from entering into nearly all new non-compete agreements after the effective date of September 4th. Since the original publishing of the rule and leadup to the effective date, there have been many new developments in reaction to the final rule. This included some precedent-setting legal decisions as well as actions taken by various state governments. With these developments, the current status has been altered, which could lead to a number of possible short-term outcomes.

competitionFTC ActJudicial Interpretation

FTC has Health Apps and Wearable Tech Vendors in its Sight with its Amended Health Breach Notification Rule

October 11, 2024FTC

The Federal Trade Commission (“FTC”) is intensifying its already rigorous oversight of how health apps, such as fitness apps, menstrual cycle trackers, sleep trackers, etc., utilize and disseminate sensitive personal information. However, unresolved questions regarding the extent of the agency’s authority are likely to precipitate challenges that could significantly curtail these efforts.

data privacyFTCHealth Breach Notification Rule

Bringing FERPA Up to Grade

October 11, 2024Education, Privacy & Security

The Family Educational Rights and Privacy Act (FERPA) was enacted in 1974 to protect the privacy of student education records. While FERPA provides essential privacy safeguards, it also includes provisions that allow certain student information to be shared with third parties, particularly under the guise of “directory information.” With the increasing concerns surrounding personal data in the digital age, many argue that FERPA’s exceptions undermine its original intent. In an era where other U.S. privacy laws are tightening restrictions on the sharing of personal information, FERPA’s provisions are lagging, leaving students vulnerable to privacy breaches that would be impermissible in other contexts.

Consent in Educationdata breachData MinimizationData Protectiondata securityDigital Age PrivacyDirectory InformationEducational RecordsFERPAprivacy lawsStudent PrivacyThird-Party VendorsU.S. Privacy Law

The ACC’s Anti-Competition Contracts: Why Schools Continue to Fight the Conference’s Exit Regulations

October 10, 2024Contracts, Sports

In December 2023, Florida State University’s Board of Trustees filed suit against the Atlantic Coast Conference (ACC) challenging the ACC’s grant of rights and “draconian” exit penalties. About three months later in March 2024, Clemson University filed a complaint against the conference challenging those same exit penalties and grant of rights issues. In response, the ACC filed legal challenges against both schools, arguing they agreed to the contract terms and were not allowed to leave the conference or challenge those agreements. Courts will have to look to the ACC’s grant of rights agreement, Article 2 of the Uniform Commercial Code, and State antitrust laws in determining who will succeed in this lawsuit. Several other schools have gotten around their conference’s grant of rights agreements in the Big 10, and Pac-12. However, unlike those conferences’ grants of rights agreements expiring in 2024 and 2025, the ACC’s agreement lasts until June 2036. Regardless, it is going to be difficult for these schools to succeed in challenging the agreements in court.

ACCAtlantic Coast ConferenceClemsonFlorida StateNCAASports

Congress Needs to Pass a Nationwide NIL Law

October 10, 2024Sports

Matthew Sluka, starting quarterback for the then-undefeated University of Nevada, Las Vegas (UNLV) football team, elected to use his redshirt designation and sit out for the rest of the 2024-25 football season, claiming that he was not paid the entirety of the $100,000 NIL deal he was recruited on. Sluka is now the first player to sit out in-season because of NIL disputes. However, it is very likely he will not be the last. Sluka claims that he was promised the $100,000 by the offensive coordinator. The school and team dispute the claims by Sluka, saying they had never promised him any money and the $3,000 he had received was for honoring a separate NIL engagement that summer. UNLV is claiming that Sluka and his representation’s financial demands to keep playing are against NCAA rules and Nevada state law. NCAA rules and Nevada law stipulate that a player cannot receive NIL just to play for or attend a school, there must be quid pro quo, (sign autographs, meet and greets, etc.) in order to profit from their name, image or likeness. Regardless of the underlying truth, Sluka’s situation has highlighted exactly why the NCAA cannot regulate NIL anymore.

CongressNCAA

Navigating the Genetic Frontier: 23andMe and the Challenges of Data Security

October 9, 2024HIPAA & Health Information, Privacy & Security

A recent situation involving millions of 23andMe users has raised significant concerns about data privacy and regulatory oversight. After sending a small tube of saliva to uncover ancestral roots, many individuals discovered that their genetic data had been compromised. 23andMe has transformed genetic testing by offering accessible health and ancestry information to consumers from the comfort of their homes. Since its inception, the company has faced regulatory challenges and became the first direct-to-consumer genetic genealogy test to receive FDA approval. While the company has largely avoided legal trouble over the years, recent data breaches have sparked legal action and underscored gaps in consumer protection.

class action suitcyber-securitydata privacyFDAFDA complianceGeneticshackinghippaLegislationLitigation

Navigating the Flood: How Rising Insurance Costs Threaten Communities Amid Climate Change

October 4, 2024Environmental

The Federal Emergency Management Agency (FEMA)’s Risk Rating 2.0 program, implemented in October 2021, represents a significant overhaul of the National Flood Insurance Program’s (NFIP) pricing methodology. While the new system aims to more accurately align flood insurance premiums with individual property risks, it has sparked both praise and controversy. The State of Louisiana filed suit against FEMA arguing that it has not provided sufficient transparency regarding the new rating system. Louisiana’s political leadership, including the governor and congressional representatives from both parties, have been advocating for FEMA to reconsider its flood risk assessments in vulnerable regions. They argue that the current Risk Rating 2.0 system fails to adequately account for the significant investmentsmade in flood protection and storm resilience infrastructure since major disasters like Hurricanes Katrina and Rita in 2005 and the severe flooding that impacted the Baton Rouge area in 2016. These leaders contend that these substantial improvements in flood mitigation should be reflected in FEMA’s risk calculations. The lawsuit demands more information about the risk model, which they claim relies on “undisclosed, hypothetical, and abstract possibilities.” The lack of comprehensive information provided directly to policyholders has also been identified as a significant issue.

FEMAInsurance

CFPB Proposed New Rules to Expedite Mortgage Assistance

October 4, 2024Bankruptcy

Earlier this year, the Consumer Financial Protection Bureau (CFPB) announced proposed rule changes to provide additional relief for homeowners struggling to make mortgage payments. The changes aim to amend the 2013 regulations governing mortgage servicing, ensuring that borrowers can more easily access mortgage assistance and therefore reduce the risk of unnecessary foreclosures. This comes at a time when economic uncertainties and evolving market conditions make it critical for homeowners to have quick access to resources to avoid foreclosures. The new proposal, if finalized, is designed to simplify the process for borrowers seeking mortgage assistance, improve communication between borrowers and servicers, and add safeguards to protect homeowners.

administrative lawbankruptcyCFPBConsumer Financial Protection BureauForeclosurehomeownerHousingMortgagemortgage assistanceSam Paler-Ponce

Caffeine Can Cause a Scene: Why the FDA Should Require Disclosure of Caffeine Content

October 3, 2024FDA, Food and Drug Law

On May 7, 2024, Panera Bread removed its popular line of ‘charged’ lemonade beverages from its menu following multiple lawsuits alleging that the caffeine content of the drink led to death or serious health problems of customers. One such death occurred in September 2022 when a 21-year-old woman unknowingly consumed 390 milligrams of caffeine in one charged lemonade drink which aggravated her heart condition and led to cardiac arrest. These lawsuits highlight the dangerous reality of caffeine consumption which likely could have been avoided if Panera Bread had clearly displayed the caffeine content of its drinks. However, Panera Bread was under no regulatory obligation to display the caffeine content due to a major gap in the current beverage labeling regulation from the Food and Drug Administration (FDA) which does not require any disclosure of caffeine quantity. This regulatory gap poses a growing risk to consumers as new energy drink brands continue to enter the market and push competition by increasing the amount of caffeine packed into each product. In order to fulfill its obligation to public safety, the FDA must introduce regulations to standardize the disclosure of caffeine content to allow consumers to make informed decisions about the products they are choosing.

Caffeineconsumer safetyDisclosuresEnergy DrinksFDANew RegulationNutrition Labelspublic health

EPA Issued First Emergency Ban of Pesticide in 40 Years –But Why Has It Taken So Long?

October 2, 2024EPA

On August 6, 2024, the Environmental Protection Agency (EPA) resurrected its emergency authority for the first time in more than 40 years to prohibit the use of a common herbicide, dimethyl tetrachloroterephthalate (DCPA, or Dacthal) under the Federal Insecticide, Fungicide and Rodenticide Act (FIRFA) because of the chemical’s danger to human health. The last time the EPA exercised this power was in 1979, when the EPA banned the chemical weed killer Agent Orange which was known to cause serious birth defects and used by the United States military in the Vietnam War. The EPA has since remained reluctant to classify any other herbicide chemical as an imminent risk to the public health, until last month.

EPAPesticides