SubscribeAt a recent open Commission meeting, the Federal Trade Commission (FTC) voted unanimously to issue a Notice of Proposed Rulemaking to amend the Health Breach Notification Rule (HBNR). The FTC’s proposed amendment aims to codify the HBNR’s application to digital health and mobile technologies. However, several aspects of the proposed amendment lack clarity and are likely to cause confusion unless further clarified through the ongoing rulemaking process.
Federal Trade Commission
Washington State Legislature Passes My Health My Data Act
The My Health My Data Act in Washington State (the Act) is expected to be signed into law by Governor Jay Inslee this year, after being passed by both the Washington Senate and House in different versions. Unlike recent state privacy laws, the Act specifically targets consumer health data that is not covered by the Health Insurance Portability and Accountability Act (HIPAA). It includes provisions that apply to processors and third parties who may handle a broadly defined set of consumer health data, beyond healthcare-adjacent businesses. The Act could have a significant impact on various entities, including advertisers, mobile app providers, wearable device manufacturers, healthcare companies and their data processors who handle non-HIPAA-regulated health information.
The FTC’s Noncompete Plans Are Part of a Sea Change for Business
The Federal Trade Commission’s newly proposed rules that would prohibit most noncompete clauses in employment represent a seismic shift for business. In this Barron’s article, McDermott Partner Michael Peregrine says corporate leadership should “take very seriously” the threat that federal antitrust policy presents to business operations and strategic development.
“This government activity has risen to a level that demands serious board and executive attention as a possible corporate enterprise risk,” Peregrine writes.
FTC Proposes Rule Banning Noncompete Agreements
On January 5, 2023, the Federal Trade Commission (FTC) issued a proposed rule that would prohibit employers from using noncompete agreements with their employees or independent contractors. This proposal arises from a preliminary finding by the FTC that noncompetes constitute an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act (FTC Act). It comes on the heels of the FTC’s November policy statement asserting its intention to rigorously enforce and expand the scope of Section 5 of the FTC Act’s ban on unfair methods of competition.
If adopted, this rule would make it illegal for an employer to enter into a noncompete agreement with a worker, maintain a noncompete with a worker or represent to a worker that the worker is subject to a noncompete. Employers would also be required to rescind existing noncompetes and inform workers that they are no longer enforceable.
The 411 on Employment Background Checks in Stock and Asset Transactions
Employment background checks help employers hire individuals with integrity whom they can trust, and who do not present a risk to the business, other employees, or the customers and clients that the business serves. Buyers in transactions may view target businesses that run background checks as lower risk for employee performance and retention issues. Background checks also constitute an important area for employment diligence in transactions because an employer or background check vendor’s failure to follow the hypertechnical disclosure and authorization requirements of the Fair Credit Reporting Act (FCRA) and other applicable state and local laws risks potentially material class action exposure and $1,000 penalties per violation. This article explores mitigation strategies that buyers may use in due diligence to identify and valuate potential FCRA exposure.
Restrictive Covenants Evolve from Common Law to Statutory Regulation: The 2022 Watershed
Restrictive covenants were once the exclusive province of the courts in each state. That is no longer the case. Although case law still governs restrictive covenants, states also are enacting restrictive covenants statutes.
Today, 30 states (including Washington, DC) have laws affecting restrictive covenants. Unlike state statutes regulating trade secrets (which largely follow the Uniform Trade Secrets Act), the state statutes governing restrictive covenants run a wide gamut. These changes reflect an increasing hostility towards restrictive covenants. In this Westlaw Today article, McDermott’s Brian Mead and Aaron P. Sayers provide an overview of state statutes that became effective in late 2021 or are becoming effective in 2022.
FTC Issues Policy Statement Expanding Interpretation of Health Breach Notification Rule’s Scope
On September 15, 2021, the Federal Trade Commission (FTC) voted 3–2 along party lines (with Republican commissioners dissenting) to issue a policy statement announcing an expansive interpretation of the FTC’s Health Breach Notification Rule, 16 CFR Part 318 (the Rule). According to the policy statement, the Rule applies to health apps and connected devices that are not subject to the Health Insurance Portability and Accountability Act (HIPAA) but are capable of drawing information from multiple sources—for example, through a combination of consumer inputs and application programming interfaces (APIs).
Protecting the Telehealth Consumer: FTC and State-Based Considerations
Telemedicine in the United States is facing an important crossroads. While telehealth services have demonstrated their value as an integral part of care delivery, federal and state waivers instituted during the COVID-19 pandemic are likely to expire soon. As lawmakers and agency officials consider updated or expanded digital health rules, regulators are expected to intensify their scrutiny of providers.
In this webinar, McDermott partners Jiayan Chen and Brian J. Boyle explore consumer protections for telehealth consumers, including the following:
- Privacy considerations beyond the Health Insurance Portability and Accountability Act of 1996, including Federal Trade Commission requirements;
- How to prepare for the Health Breach Notification Rule;
- The ins and outs of advertising telehealth, including claims, endorsements and social media;
- Strategies for engaging with users in the digital environment; and
- Increased fraud enforcement.
Drug Prices Are Prime Target in Biden’s Competition Order
President Biden’s July 9, 2021, Executive Order—which seeks to increase competition throughout the American economy—takes aim at prescription drug prices. In this article, published in Law360, McDermott partner Emily Jane Cook says Biden’s focus on drug prices is unsurprising given the “significant public interest and frustration” with drug costs.
Digital Health Year in Review: 2017 Trends and Looking Ahead to 2018
Throughout 2017, the health care and life sciences industries experienced a widespread proliferation of digital health innovation that presents challenges to traditional notions of health care delivery and payment as well as product research, development and commercialization for both long-standing and new stakeholders. At the same time, lawmakers and regulators made meaningful progress toward modernizing the existing legal framework in a way that will both adequately protect patients and consumers and support and encourage continued innovation, but their efforts have not kept pace with what has become the light speed of innovation. As a result, some obstacles, misalignment and ambiguity remain.
We are pleased to bring you this review of key developments that shaped digital health in 2017, along with planning considerations and predictions for the digital health frontier in the year ahead.
