Welcome to spring, where the insights industry has been facing challenges in regulation and legislation, including state and federal data privacy (especially the finalized rules you need to know in California), the treatment of research subjects as independent contractors, and prohibitions on non-compete agreements. We also welcomed the new scathing conclusions of a federal investigation into the Census Bureau’s attempt to compete against the insights industry, and reviewed the players on Congressional committees that may matter most for the insights industry’s policy concerns in 2023-24.
Consumer privacy and data security
Our Privacy for America coalition, battling for a comprehensive federal privacy law, has been busy in our nation’s capital:
The Golden State always tries to shine brightest on privacy and data security issues, and with the final rules implementing the California Privacy Rights Act (CPRA) likely now to come into effect in time for the new law’s enforcement on July 1, 2023, insights professionals need to get acquainted with the regulations ASAP.
Yet even before the ink is dry on those regulations, the state privacy regulator sought input on even more CPRA rules, surrounding cybersecurity audits, risk assessments and automated decision-making.
Privacy legislation percolating at the state level this month included:
- The Washington My Health My Data Act, comprehensive privacy legislation, ostensibly focused on consumer health information, that would be enforced by the state Attorney General (AG) and private lawsuits;
- The Tennessee Information Protection Act, comprehensive privacy legislation based on the recent privacy laws in Virginia and Utah, that would be enforced exclusively by the Tennessee Attorney General;
- The Illinois Data Privacy and Protection Act, modeled on the comprehensive federal privacy legislation passed out of a Congressional committee in 2022, that would be enforced by private rights of action; and
- A bill in California that would add "citizenship or immigration status" to the definition of sensitive personal information in CPRA.
Research subjects = independent contractors
Two more federal approaches to determining independent contractor status have been introduced, but neither looks very good for the continued treatment of research subjects as independent contractors when they receive participant incentives:
- The Protecting the Right to Organize Act of 2023 would, among many provisions, potentially lead to research subjects who receive incentives being treated as employees of insights companies, and thus subject to being organized into a union.
- The Guaranteeing Independent Growth Act (GIG Act) would codify the Trump Administration’s labor rules on independent contractor status.
A federal watchdog criticized the Ask U.S. Panel project, concluding an investigation of the Census Bureau’s attempt to develop an online research panel to compete with the insights industry. The Commerce Department’s Inspector General noted that “the Bureau’s management and oversight of the cooperative agreement lacked transparency over key financial assistance award processes” and that the Bureau was providing significant taxpayer dollars to a private entity “without validating costs.” Most importantly, the IG found that the Census Bureau “did not document research or analysis conducted to determine whether the need for the Ask U.S. Panel could be met by existing commercial platforms or developed internally.”
As the IG finished its investigation, the Census Bureau disclosed that it would terminate the “cooperative agreement,” the contracting arrangement used to fund a private entity to build the online research panel. In the end, that panel “was not developed.”
The Insights Association concluded that, "[r]ather than throwing even more scarce federal resources at such an expensive effort by trying to insource the panel,” the Census Bureau should “save a ton of money by simply purchasing the service from one of the multiple existing insights providers.”
As hundreds of business groups appealed to Congress to help kill a sweeping proposed rule at the Federal Trade Commission (FTC) that would prohibit non-compete restrictions on workers, a pair of Senators accused them of hypocrisy in the matter, and the Freedom to Compete Act was introduced in Congress to prevent employers from using non-compete agreements in many employment contracts, while still allowing for non-disclosure agreements and trade secret protections.
Out in California, fresh legislation would prohibit all non-compete agreements in employment contracts. While current California law makes non-competes unenforceable, this legislation would make them outright illegal.
Spring Thaw Reveals New Challenges for the Insights Industry
As the March public policy winds pass, there is still only one organization fighting for the insights industry across the U.S., but the Insights Association will not be able to keep up that fight without the membership and support of insights industry leaders like you.
As always, feel free to reach out with any questions on these and other legislative/regulatory/legal issues. We are here for you.
This information is not intended and should not be construed as or substituted for legal advice. It is provided for informational purposes only. It is advisable to consult with private counsel on the precise scope and interpretation of any laws/regulation/legislation and their impact on your particular business.