The EEOC Retires Guidance Protecting LGBTQ Workers and Others From Discrimination, Continuing the Rapid Remake of Federal Policy Through Presidential Action
As we have noted in recent days[1], upon returning to the Oval Office, the Trump Administration swiftly:
Sent the message that it will pursue an agenda of aggressive enforcement related to immigration and preventing undocumented workers from working in the U.S.;
Ordered federal employees to return to working physically from offices and froze all hiring for civilian employees, suggesting planned stripping of resources for federal agencies and other federal bodies (including those tasked with enforcing Equal Employment Opportunity-related rights (EEO));
Overturned a host of “harmful” executive orders passed during the Biden Administration, including executive orders seeking to protect workers against sexual orientation and gender identity or expression discrimination and to promote greater workplace safety requirements;
Overturned Executive Order 11246 and related amendments, ending a variety of federal policies and related requirements for federal government contractors that had been in place since the Lyndon Johnson Administration and now affirmatively prohibiting them from considering protected characteristics as part of employment decisions; and
Struck executive orders and presidential memoranda relating to equal employment opportunity, diversity, and inclusion efforts applicable to the federal government as an employer.
Notwithstanding the policies and potential future actions they portend, other than with respect to immigration enforcement, none of the foregoing changes summarized above apply to private employers that do not contract with the federal government — and with good reason. A presidential administration cannot on its own rewrite the equal employment opportunity statutory scheme woven through the federal fabric by laws like Title VII, the Americans with Disabilities Act, and the like. Changes to the basic scope of those laws can only come through legislative action (subject to presidential veto) and subsequent court interpretation.
But this certainly is not to say that the new administration is powerless to pursue the same policy bend portended by the changes mentioned above against private employers through its political and extra-statutory powers. And it would appear such indirect efforts to change the federal legal framework for EEO protections is underway.
In late January, the Equal Employment Opportunity Commission (EEOC) made several key removals of content from its online guidance resources — the website location where the EEOC publishes its views on what federal law should be interpreted to mean describing the federal government’s enforcement priorities under the framework of laws administered by the agency. The majority of these first guidance withdrawals pertain to LGTBQ worker protections, including the removal of several pages of resources relating to the United States Supreme Court’s 2020 decision in Bostock v. Clayton County, where the court recognized that Title VII protects employees from discrimination on the basis of sexual orientation and gender identity. While removal of this guidance does not change Bostock’s definitive statement that Title VII covers sexual orientation and gender identity, its withdrawal surely indicates that enforcing Bostock’s mandate will no longer be a priority for the EEOC and for the individuals who control how the agency uses its limited resources.
The new Administration has so far made no official announcement on these changes. Instead, while guidance and other pages on Bostock and protections for LGTBQ workers were still on the EEOC’s website at the end of the Trump Administration’s first week in office, they have subsequently been taken down from the website in an apparent silent retirement.
On the other hand, the administration has not been silent on its recent personnel changes; last week the President removed two Democratic Party-appointed members of the EEOC before the expiration of their five-year terms, along with terminating the services of the Commission’s General Counsel. The move came just hours after the President also fired National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo and removed a Democratic National Labor Relations Board member. Both the EEOC and the NLRB are now presently without a quorum of members, handcuffing the agencies’ ability to undertake certain high-level enforcement functions.
In another development similar to the silent removal of EEOC guidance regarding LGBTQ protections, previously available content on the EEOC website raising concerns about how Artificial Intelligence (AI) tools can result in unlawful employment discrimination have now been removed. This would seem to track with two other executive order actions taken by the Administration shortly after the inauguration (one striking a 2023 order seeking to create federal oversight of AI, another indicating the administration’s plan to take a hands-off approach to use of AI). Two weeks into this new administration have already brought in a sea change in the world of labor employment. It seems a certainty that more is to come — along with state law reaction, legal challenges, and the political and social backlashes that have become the norm in recent years. Foley and our team of counselors will continue monitoring and reporting on these developments while doing our utmost to help navigate these troubled and shifting waters with practical, business-focused advice.
[1] Foley’s robust, cross-disciplinary team has created a “100 Days and Beyond: A Presidential Transition Hub” which will be regularly and swiftly updated to keep you apprised of changes covering not just labor and employment, but also legal areas like Artificial Intelligence, Antitrust & Competition, Environmental, Government Enforcement, Finance, and Technology regulation.
Federal Grant Funding: A Thaw in the Freeze?
Last week was a roller coaster ride for health care providers and other recipients of federal grant funding. Here’s a quick recap of everything that’s happened since our last e-alert:
OMB Memo Rescinded – On January 29, the OMB issued a rescission of the memorandum (M-25-13) that contained the agency directive to review federal grant programs and the corresponding funding pause (the “OMB Memo”). Providers and other outside observers could be forgiven for making the assumption that this would be the end of the story for the time being.
The Story Continues – Shortly after the OMB rescinded the OMB Memo, communication from the White House, including posts on X from the Press Secretary, indicated that the rescission applied to the OMB Memo only and that the White House still intended to freeze federal funds and enforce the Executive Orders.
Normalcy? Returns– Thursday evening into Friday morning, Medicaid agencies reported irregularities in accessing funding portals and drawing down federal funds. We have heard from providers that access to their 330 PHS grant funds has been restored. At the same time, we have reports that some agencies (such as the National Science Foundation) are still reviewing grant programs for compliance with the Trump Administration’s Executive Orders. For now, however, the status quo for grant funding seems largely to have been preserved.
The Legal Battle Continues – A coalition of Democratic Attorneys General filed a lawsuit in Rhode Island earlier this week to oppose the OMB Memo and associated funding freeze.1 The judge in that case held a hearing to determine whether the legal challenge was moot, given the rescission of the OMB Memo. Citing communication from the press secretary, Judge McConnell indicated a willingness to still enter some kind of protective order related to the actions underlying the OMB Memo, even if the OMB Memo itself had been rescinded. Late afternoon on January 31, Judge McConnell issued a temporary restraining order in this case, which will last through a hearing and decision on the states’ motion for a preliminary injunction.2 On the morning of February 3, the DOJ responded with a notice of compliance outlining the Administration’s response to the TRO.
What Now? – Whatever the final legal outcome from the Rhode Island case, it seems clear that the Executive Branch is intent on reviewing federal grant programs for compliance with its policy directives. We know, based on OMB’s rescinded Memo, the initial list of programs on the Administration’s radar. Subject to any final disposition in the AG suit, we expect additional action in the coming weeks and months with respect to these programs, and providers should be aware of the potential impact on their organizations up to and including the inability to access funds previously appropriated and awarded.
Attached to this e-alert is an Excel tool that identifies the grant programs identified in OMB’s rescinded Memo. Providers and other grant recipients should use this tool to inventory their current grant funding streams, assess organizational risk moving forward and make plans in the event of future disruption.
[1] A copy of the states’ request for a temporary restraining order is available here: https://ag.ny.gov/sites/default/files/court-filings/new-york-et-al-v-trump-et-al-complaint-2025.pdf.
[2] A copy of the preliminary injunction is available here: https://storage.courtlistener.com/recap/gov.uscourts.rid.58912/gov.uscourts.rid.58912.50.0_2.pdf.
Grant Review Tool
DOJ Compliance Notice
5th Circuit Rules Intent to Arbitrate Trumps Defunct Forum
The Fifth Circuit ruled that Baker Hughes Saudi Arabia and Dynamic Industries, Inc., could be compelled to arbitration in a forum that no longer exists. In doing so, the court ruled that the parties’ “dominant purpose was to arbitrate generally,” which mandated that the court compel arbitration, if at all possible.
The underlying dispute between Baker Hughes and Dynamic revolves around a subcontract in which Baker Hughes agreed to supply materials, products and services for an oil and gas project performed by Dynamic in Saudi Arabia. Baker Hughes says it has performed all its obligations, but Dynamic failed to pay the more than $1.3 million it owes to Baker for those services.
The subcontract contemplated arbitration in two ways: First was the way Dynamic had the unilateral right to elect for arbitration of any unresolved dispute in Saudi Arabia, and second was if the alternative course of arbitration allowed any claim to be arbitrated according to the Arbitration Rules of the Dubai International Financial Centre-London Court International Arbitration (DIFC-LCIA). In 2021, the administrating institution of the DIFC-LCIA rules, the DIFC Arbitration Institute (DAI), was abolished. The Dubai International Arbitration Centre (DIAC) was created as a replacement for the DAI.
The district court ruled that it was powerless to compel arbitration because the forum to which it would compel did not exist. The Fifth Circuit disagreed and reversed and remanded to the district court to consider “whether the DIFC-LCIA rules can be applied by any other forum that may be available — including the LCIA, DIAC, or a forum in Saudi Arabia — consistent with the parties’ objective intent.”
The court covered considerable ground in its opinion. First it considered whether the subcontract language allowing DIFC-LCIA arbitration was a forum-selection clause and determined it was not. Rather it was an election to arbitrate according to the DIFC-LCIA rules, not necessarily, in the forum of the now-non-existent DAI.
In doing so, the court departed from many of its sister circuits by declining to find that the invocation of the DIFC-LCIA rules constituted a manifest desire to arbitrate in the DAI forum. The court stated that it still had “lingering doubts” regarding that approach.
Next, the court considered whether a forum was really unavailable for purposes of arbitrating under the DIFC-LCIA rules. Stating it differently, the court framed this novel question as “whether a designated forum remains available where a functionally identical successor forum exists.” The court found that arguably the parties’ designated forum still exists because the new forum adopted nearly all the same rules as its predecessor.
However, the court declined to rule on this question and turned to its central ruling: Even if the arbitration provision is a forum-selection clause it is not integral to the parties’ agreement. The court found that ultimately the parties’ agreement evinced that “the parties’ primary intent was to arbitrate generally.” As such, the district court should have compelled arbitration in a different forum or appointed a substitute arbitrator consistent with that intent. While the court’s ruling lives in the unique circumstances presented by the restructuring of the DIFC-LCIA arbitration rules and fora, the court rested its decision on familiar ground. Namely that where the “parties’ dominant purpose” is to arbitrate, a court should do what is in its power to effectuate that purpose, even if that means compelling arbitration to a forum not expressly stated by the parties’ agreement.
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LOW INTEGRITY?: Integrity Marketing Stuck in TCPA Class Action After Declaration Fails to Move the Court
Always fascinating the arguments TCPA defendants make.
Consider Integrity Marketing’s effort in Newman v. Integrity, 2025 WL 358933 (N.D. Ill Jan. 31, 2025).
There Integrity argued it could not be liable for calls violating the TCPA made by its network of lead generators because it was just a middle man who was not actually licensed to sell insurance itself.
Huh?
Apparently Integrity believed that if it wasn’t selling anything itself it couldn’t be liable for telephone solicitations it was brokering. (This is similar to the argument Quote Wizard made and, yeah, it didn’t work out so well for them.)
Integrity also argued that it couldn’t be sued directly for calls made by third-parties unless the Plaintiff pierced the corporate veil.
Double huh?
That’s not even close to accurate. Vicarious liability principles apply when dealing with fault for third-party conduct, not corporate formality law. That argument doesn’t even make logical sense.
Regardless, the Court had little trouble determining Integrity was potentially liable for the calls.
On the corporate veil argument the Court quickly rejected the (totally wrong) alter ego approach and properly applied agency law. The Court determined the Complaint’s allegations Integrity hired a mob of of affiliates, insurance agents, and (sub)vendors to telemarket insurance and other products to consumers was sufficient to state a claim since Integrity allegedly “controlled” these entities. In the Court’s eye the ability to “dictate which telemarketing or lead-generating vendors may be used” was particularly damning.
On the “we don’t actually sell insurance” argument the Court rejected the Defendant’s declaration– you can’t submit evidence on a 12(b)(6) motion folks– but found that even if the evidence were accepted Integrity would still lose:
However, even if the Court were to take the declaration into account, it does not refute the inferences drawn that Defendant has a network of agents encouraging the purchase of insurance, that Defendant controls or facilitates the telemarketing calls Plaintiff received which encouraged Plaintiff to purchase insurance, or that the telemarketing calls were done on behalf of Defendant. In other words, even if it is not selling insurance directly, the complaint plausibly alleges Defendant is using its network of subsidiaries and agents to engage in telemarketing and to facilitate and control the purchase of insurance using impermissible means.
So, yeah.
Motion to dismiss denied. Integrity stuck in the case.
Loper Bright Strikes Again: Eleventh Circuit Hangs Up on FCC’s One-to-One Consent Rule, Calling the Validity of Other TCPA Rules Into Question
The Eleventh Circuit Court of Appeals recently vacated the Federal Communications Commission’s 2023 “one-to-one consent rule” under the Telephone Consumer Protection Act (TCPA). In Insurance Marketing Coalition, Ltd. v. Federal Communications Commission,1 the Court struck down the order that (1) would have limited businesses’ ability to obtain prior express consent from consumers to a single entity at a time, and (2) would have restricted the scope of such calls to subjects logically and topically related to “interaction that prompted the consent.”2 In particular, the Court held that the FCC exceeded its authority under the plain language of the statute.3 In the wake of the IMC decision, other TCPA regulations may well face the chopping block.
The FCC’s order sought to curtail the practice of “lead generation,” which offers consumers a “one-stop means of comparing [for example] options for health insurance, auto loans, home repairs, and other services.”4 In its ruling, the Court looked to the authority Congress had extended to the FCC through the TCPA. In general, the TCPA prohibits calls made “using any automatic telephone dialing system or an artificial or prerecorded voice” without “the prior express consent of the called party.”5 The statute does not define “prior express consent.”6 Congress gave the FCC authority to “prescribe regulations to implement” the TCPA, and to exempt certain calls from the TCPA’s prohibitions.7 In its 2023 order, the FCC sought to restrict telemarketing calls by imposing the one-to-one consent restriction and the logically-and-topically related restriction.8
Applying the Supreme Court’s decision in Loper Bright Enters. v. Raimondo,9 the Eleventh Circuit ruled that in promulgating the 2023 order, the FCC exceeded its statutory authority. The Court found that the plain meaning of the term “prior express consent” nowhere suggests that a consumer can only give consent to one entity at a time and only for calls that are “logically and topically related” to the consent. Rather, the Court ruled, in the absence of a statutory definition, the common law provides that the elements of “prior express consent” are “permission that is clearly and unmistakably granted by actions or words, oral or written,” given before the challenged call occurs.10 Nothing under the common law restricts businesses from obtaining consent from consumers to receive calls from a variety of entities regarding a variety of subjects in which they are interested.
In the wake of the IMC decision, other TCPA regulations may be ripe for challenge, including the FCC’s 2012 determination that calls introducing telemarketing or solicitations require prior express written consent. For example, in IMC, the Court held that the FCC cannot create requirements for obtaining prior express consent beyond what the plain language of that term will support. And the Court delineated the common law elements of prior express consent, which the Court found can be “granted by actions or words, oral or written.”11 Under this reasoning, the Court held that “the TCPA requires only ‘prior express consent’—not ‘prior express consent’ plus.”12 This reasoning may well support a challenge to the prior express written consent rules. After all, nothing in the plain meaning of the term “prior express consent” requires a writing versus oral consent, and the common law does not appear to support such a distinction. Rather, the requirement of written consent clearly adds to the statutory requirement and for that reason, appears to exceed the FCC’s authority.
Notwithstanding the fact that the FCC imposed the prior express written consent rule more than 10 years ago, another recent decision from the Supreme Court suggests that new entrants to the lead-generation industry have standing to file a challenge. In Corner Post, Inc. v. Board of Governors of Federal Reserve System,13 the Supreme Court ruled that new market entrants impacted by federal rules have standing to challenge those rules within the statutory period that runs from the date of market entry. The firm will continue to follow challenges to the FCC’s rulemaking authority, including any challenges to the prior express written consent rule.
Footnotes
1 No. 24-10277, — F. 4th —, 2025 WL 289152 (11th Cir. Jan. 24, 2025) (IMC decision).
2 See Second Report and Order, In the Matter of Targeting and Eliminating Unlawful Text Messages, Rules and Regs. Implementing the Tel. Consumer Prot. Act of 1991, Advanced Methods to Target and Eliminate Unlawful Robocalls, 38 FCC Rcd. 12247 (2023).
3 FCC orders have perennially exceeded the agency’s authority under the TCPA. For instance, beginning in 2003, the FCC took the position that a predictive dialer––a common tool used by business customer service centers––was an “automatic telephone dialing system,” even if the technology in question did not have the characteristics described in the statutory definition, namely the “the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C. § 227(a)(1). The United States Supreme Court threw out the FCC’s flawed rulings in Facebook, Inc. v. Duguid, 592 U.S. 395 (2021).
4 IMC, 2025 WL 289152, at *2.
5 47 U.S.C. § 227(b)(1)(A), (B).
6 See id.
7 47 U.S.C. § 227(b)(2)(B) and (C).
8 The Court observed that since 2012, the FCC has distinguished non-telemarketing calls for which the FCC has required prior express consent from calls that introduce telemarketing or solicitations for which the FCC has required prior express written consent. 47 C.F.R. § 64.1200(a)(2), (3); see also In re Rules and Regs. Implementing the Tel. Consumer Prot. Act of 1991, 27 FCC Rcd. 1830, 1838 (2012). The regulations define “prior express written consent” as an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered. 47 C.F.R. § 64.1200(f)(9). The written agreement must “include a clear and conspicuous disclosure informing” the signing party that he consents to telemarketing or advertising robocalls and robotexts. 47 C.F.R. § 64.1200(f)(9)(i)(A).
9 603 U.S. 369, 391–92 n.4, 413 (2024).
10 IMC, 2025 WL 289152, at *6.
11 Id.
12 Id.
13 603 U.S. 799 (2024).
Federal Court Applies Antitrust Standard of Per Se Illegality to “Algorithmic Pricing” Case
A federal district court in Seattle recently issued an important antitrust decision on “algorithmic pricing.” Algorithmic pricing refers to the practice in which companies use software to help set prices for their products or services. Sometimes this software will incorporate pricing information shared by companies that may compete in some way. In recent years, both private plaintiffs and the government have filed lawsuits against multifamily property owners, hotel operators, and others, claiming their use of such software to set prices for rentals and rooms is an illegal conspiracy under the antitrust laws. The plaintiffs argue that, even without directly communicating with each other, these companies are essentially engaging in price-fixing by sharing pricing information with the algorithm and knowing that others are doing the same, which allegedly has led to higher prices for consumers. So far, these cases have had mixed outcomes, with at least two being dismissed by courts.
Duffy v. Yardi Systems, Inc.
Previously, courts handling these cases have applied, at the pleadings stage, the “rule-of-reason” standard for reviewing the competitive effects of algorithmic pricing. Under the rule-of-reason standard, a court will examine the algorithm’s actual effects before determining whether the use of the algorithm unreasonably restrains competition. In December, however, the U.S. District Court for the Western District of Washington in Duffy v. Yardi Systems, Inc., No. 2:23-cv-01391-RSL (W.D. Wash.) held that antitrust claims premised on algorithmic pricing should be reviewed under the standard of per seillegality, meaning the practice is assumed to harm competition as a matter of law. Under the per sestandard, an antitrust plaintiff need only prove an unlawful agreement and the court will presume that the arrangement harmed competition. This ruling is significant because it departs from prior cases and could ease the burden on plaintiffs in future disputes.
In Yardi, the plaintiffs sued several large, multifamily property owners and their management company, Yardi Systems, Inc., claiming these defendants conspired to share sensitive pricing information and adopt the higher rental prices suggested by Yardi’s software. The court refused to dismiss the case, finding the plaintiffs had plausibly shown an agreement based on the defendants’ alleged “acceptance” of Yardi’s “invitation” to trade sensitive information for the ability to charge increased rents. See Yardi, No. 2:23-cv-01391-RSL, 2024 WL 4980771, at *4 (W.D. Wash. Dec. 4, 2024). The court also found the defendants’ parallel conduct in contracting with Yardi, together with certain “plus factors,” were enough to allege a conspiracy. The key “plus factor” was defendants’ alleged exchange of nonpublic information. The court noted the defendants’ behavior — sharing sensitive data with Yardi — was unusual and suggested they were acting together for mutual benefit.
The court decided the stricter per serule should apply to algorithmic pricing cases, rather than the rule-of-reason. The court emphasized that “[w]hen a conspiracy consists of a horizontal price-fixing agreement, no further testing or study is needed.” Id. at *8. This decision diverged from an earlier case against a different rental-software company, where the court thought more analysis was needed because the use of algorithms is a “novel” business practice and thus not one that could be condemned as per seillegal without more judicial experience about the practice’s competitive effect. The Yardi case also stands apart from others that have been dismissed, like a prior case involving hotel operators, where there was no claim that the companies pooled their confidential information in the dataset the algorithm used to suggest prices. The court in that case decided that simply using pricing software, without sharing confidential data, did not necessarily mean there was illegal collusion. Future cases may thus depend in part on whether the software uses competitors’ confidential data to set or suggest prices.
It is unclear if other courts will adopt the same strict approach as the Yardi case when dealing with claims involving algorithmic pricing. It is clear, however, that more cases are on the horizon, likely spanning a variety of industries using pricing software.
Regulatory Efforts
Beyond private lawsuits, government agencies and lawmakers also are paying close attention to algorithmic pricing. Last year, for example, the U.S. Department of Justice (DOJ) and a number of state attorneys general sued a different rental-software company. The DOJ also has weighed in on several ongoing cases. Meanwhile Congress, along with various states and cities, has introduced laws to regulate algorithmic pricing, with San Francisco and Philadelphia banning the use of algorithms in setting rents. And just last month, the DOJ and Federal Trade Commission raised concerns about algorithmic pricing in a different context — exchanges of information about employee compensation — in the agencies’ new Antitrust Guidelines for Business Activities Affecting Workers. The new guidelines note that “[i]nformation exchanges facilitated by or through a third party (including through an algorithm or other software) that are used to generate wage or other benefit recommendations can be unlawful even if the exchange does not require businesses to strictly adhere to those recommendations.” Expect more legal and legislative action on this front in 2025 and beyond.
(UK) Revolution Bars: When is a Meeting Really a Meeting?
In his judgment to sanction the restructuring plan (“RP”) of Revolution Bars[1], Justice Richards proceeded on the basis that the Class B1 Landlords and the General Property and Business Rate Creditors were dissenting classes, notwithstanding that they approved the Plan by the statutory majority. This is because they did not approve the Plan at “meetings”, since only one person was physically present at each “meeting” even though the chair held proxies from other creditors.
Pursuant to Part 26A of the Companies Act 2006, to agree a RP, at least 75% in value of a class of creditors, present and voting either in person or by proxy at the meeting, must vote in favour (section 901F). This is repeated when considering the cross-class cram down (“CCCD”), which can be applied “if the compromise or arrangement is not agreed by a number representing at least 75% in value of a class of creditors… present and voting either in person or by proxy at the meeting” (section 901G).
Applying various case law on the subject, we now have the following guidance in relation to a “meeting” for the purposes of RPs:
The ordinary legal meaning of a meeting requires there to be two or more persons assembling or coming together[2];
If there is only one shareholder, creditor or member of a relevant class, that would constitute a “meeting” by necessity, but a meeting in this instance would be considered an exception to the ordinary legal meaning[3];
An inquorate and invalid “meeting” does not preclude the court from exercising its discretion to apply a CCCD to those “dissenting” classes[4].
To ensure a proper “meeting”, there must be two or more creditors physically present (where two or more creditors exist in a class). The physical presence of only one person voting in two capacities – as creditor and as proxy for another – will not suffice, nor will it suffice if the chair holds proxies and there is only one creditor in attendance. Only in cases where there is one creditor in a class, will a meeting of one be valid. If there is no valid meeting, the creditors of that class will be treated as dissenting, and potentially subject to CCCD (assuming the RP has also met the relevant voting threshold and CCCD is engaged).
It does beg the question – if the circumstance were to arise where there were no valid meetings, then what? It seems likely that the RP would fall at the first hurdle.
In this case, the judge sanctioned the CCCD of all “dissenting” classes, and the RP.
Notably, in Re Dobbies Garden Centre Limited[5] the Scottish court took a different approach. Here, only one creditor attended the meeting of the only “in the money” class which approved the plan. If the court had adopted the approach in Revolution Bars, that meeting would be considered invalid, the class categorised as dissenting and the plan would not have been sanctioned.
Focusing on the words “either in proxy or by person” as a qualifier to being “present and voting”, the Scottish court found that a meeting may be quorate where two or more creditors were in attendance or represented in person, or by proxy, or by a combination, and one person can act in two capacities; therefore the meeting was valid.
[1] [2024] EWHC 2949 (Ch)
[2] Sharp v Dawes (1876) 2 Q.B.D. 26
[3] East v Bennett Bros Ltd [1911] 1 Ch. 163; Re Altitude Scaffolding [2006] BCC 904
[4] Revolution Bars
[5] [2024] CSOH 11
Legal Precedents Offer Novel Ways for Federal Employee Whistleblowers to Fight Retaliation
The system of anti-retaliation protections for federal employees who blow the whistle or speak out about their agency’s conduct is infamously weak. Under the Whistleblower Protection Act (WPA) and other laws, federal employees seeking relief for an adverse action taken against them for whistleblowing must rely on the Merit Systems Protection Board (MSPB). This quasi-judicial entity is plagued by delays and threatened by politicization.
However, there are several potentially effective but under-utilized legal precedents that can permit federal employees facing retaliation to obtain relief in federal court and not solely rely on the WPA for relief. These precedents have been established by the U.S. Courts of Appeal for the District of Columbia and Fourth Circuits, and offer novel ways to have cases heard in federal court or otherwise bolster retaliation complaints. By utilizing these methods, federal employees can feel more confident and in control, knowing they have better chances of gaining meaningful relief if they face retaliation for whistleblowing, oppose discrimination, prevent the violation of their privacy, and enforce their rights to engage in outside First Amendment protected speech.
First Amendment Rights for Federal Employees
The landmark 1995 case Sanjour v. EPA upheld the First Amendment rights of federal employees to criticize the government in activities outside their employment. This created a legal precedent that provides a strong shield for federal employees to make First Amendment challenges to agency regulations stifling whistleblowing when made outside of work. The case permits federal employees at the GS-15 level or below (higher level federal workers were not discussed in the decision, as the applicant for relief was at the GS-15 level) to seek pre-enforcement injunctive relief if a rule or regulation (which would include an Executive Order) has an improper chilling effect on First Amendment protected speech of an employee’s outside speaking or writing.
William Sanjour was the branch chief of the Hazardous Waste Management Division within the EPA who challenged rules written by the Federal Office of Government Ethics that restricted EPA workers’ rights to speak to environmental community groups.
Because the EPA had warned Sanjour that his acceptance of a cost reimbursement for travelling to North Carolina to give a speech critical of EPA policies concerning waste incineration was in violation of a regulation and could result in adverse action, Sanjour could challenge the “chilling effect” on speech of the government’s rule. The D.C. Circuit upheld the constitutional challenge to a regulation that had a chilling effect on First Amendment protected speech.
If he had waited until he was subjected to retaliation he would have been required to use the WPA to remedy the adverse action. But because Sanjour was challenging an unconstitutional chilling effect of a government regulation, he could obtain injunctive relief directly in federal court and avoid the long delays and other problems when pursuing a case before the presidentially appointed MSPB.
The key precedent established in Sanjour v. EPA, by the U.S. Court of Appeals for the District of Columbia Circuit, was that the Court could issue a nationwide injunction preventing the implementation of the regulation because of its chilling effect on the First Amendment right of employees to criticize the federal government. The court recognized that federal employee speech to the public on matters of “public concern” was protected under the First Amendment, and served a critical role in alerting the public to vital issues:
“The regulations challenged here throttle a great deal of speech in the name of curbing government employees’ improper enrichment from their public office. Upon careful review, however, we do not think that the government has carried its burden to demonstrate that the regulations advance that interest in a manner justifying the significant burden imposed on First Amendment rights.”
The precedent in Sanjour v. EPA means that federal employees who plan on making public statements (outside speaking or writing on matters of public concern) can seek a federal court injunction preventing future retaliation based on their First Amendment rights, if they have a reasonable basis to believe that their government employer would take adverse action against them if they made the public disclosures or violated the regulation. Significantly, First Amendment protected speech should cover criticisms of government policy. Policy disagreements alone may not even be covered under the WPA.
The Sanjour case covers outside speaking and writing, not workplace activities. It affirms a federal employee’s right to engage in conduct such as TV interviews, writing op-eds, and speaking before public interest groups, even if the speech engaged in is highly critical of the government or their government-employer. However, employees would have to give a disclaimer making sure that the public understood they were speaking in their private capacity, and the employee could not release confidential information.
Mixed Cases Combining Title VII Discrimination with Whistleblower Retaliation
Precedent established by two landmark federal employee whistleblower retaliation cases holds that federal employees may have their WPA retaliation case heard in federal court in instances where it is a “mixed case” that also involves discrimination or retaliation under Title VII of the Civil Rights Act. The scope of retaliation covered under Title VII is broader than the coverage under the WPA, and by combining both claims a federal employee can significantly increase both their procedural and substantive rights.
Specifically, when an employee is a member of a protected class (Title VII covers race, religion, sex, national origin, among other classes) it is often hard to distinguish whether retaliation originates from their membership in a protected class, their filing complaints of retaliation under Title VII, or their filing complaints of retaliation covered by the WPA. There is often significant overlap in these types of cases.
While federal employees’ retaliation cases under the WPA are forced to remain with the MSPB, under the Civil Service Reform Act, discrimination cases (and cases of retaliation based on protected activities or whistleblowing covered under Title VII) may be removed to federal court if the MSPB does not issue a final ruling within 120 days.
Dr. Duane Bonds was a top researcher at the National Institutes of Health on sickle cell disease who blew the whistle on the unauthorized cloning of participants’ cells. Dr. Bonds faced retaliation for blowing the whistle, including sex discrimination, harassment in the workplace, and eventual termination.
In 2011, the United States Court of Appeals for the Fourth Circuit ruled in Bonds v. Leavitt that Dr. Bonds’ retaliation and discrimination complaint must be considered a “mixed case” and heard together. Under the Civil Service Reform Act, the court allowed Dr. Bonds to pursue her mixed discrimination and retaliation case before a federal court, and she was not required to continue to pursue her WPA case before the MSPB.
In its ruling in Bonds v. Leavitt, the Fourth Circuit cited an earlier D.C. Circuit ruling in Ikossi v. Department of Navy, which similarly allowed a female whistleblower to pursue a “mixed case” alleging both retaliation and discrimination in federal court. Kiki Ikossi was retaliated against after filing complaints to the Navy Research Lab HR Office for workplace gender discrimination in the early 2000s.
The Bonds and Ikossi decisions are controlling precedent in both the District of Columbia and Fourth Circuit judicial circuits. Thus, these precedents would be binding of federal courts in the District of Columbia, Maryland, and Virginia.
The precedents in Bonds v. Leavitt and Ikossi v. Department of Navy mean that federal employees who face discrimination in addition to retaliation may combine their complaints and pursue their case in federal court if the MSPB delays a ruling (which is the norm given its backlog of cases). However, the rules permitting a mixed case are complex, and require employees to identify their invocation of that right when filing an initial complaint. By carefully following the complex timing and filing requirements mandated under both the WPA and Title VII an employee can have his or her whistleblower case can be heard in federal court, and avoid many of the problems associated with cases pending before the MSPB.
Privacy Act Rights for Federal Employees
Linda Tripp is most famous for her role in the impeachment of President Clinton. However, her retaliation case established a strong precedent protecting federal employees under the Privacy Act. Tripp successfully challenged the Department of Defense when it illegally released confidential information from her security clearance file.
The illegally released file was an act of retaliation for her role in presidential impeachment proceedings. However, Tripp did not seek relief under the WPA. Instead, she was able to bring a Privacy Act complaint before a federal court. The Privacy Act covers requests for information concerning yourself, and federal employees are covered under the law with the same rights as other non-government employees. The Privacy Act prevents federal agencies from collecting or maintaining information based on an individual’s First Amendment activities, it prevents the improper disclosure of information to various persons, including any personal information a government employee or manager may provide to individuals outside of the federal government.
The Privacy Act requires the federal government to provide applicants access to all government records related to the applicant that are not restricted from access under very specific exemptions. Once obtaining the documents a the requestor can request correction of any inaccurate information, or inclusion into a file of the requestor’s statement as to why the documents are not accurate. It requires agencies to maintain a record of who they share information with. The law prohibits improper leaks of information. Moreover, of particular interest to whistleblowers, the law prohibits the government from maintaining records related to any person’s First Amendment protected activities.
The law provides all persons, including federal employees, the right to file a lawsuit in federal court to obtain access to their files and seek damages for the actual harm caused by any leaks or violations of the law. A court can also order an agency to correct information in government files that are inaccurate and prevent agencies from maintaining information in violation of law. Persons who filed successful Privacy Act complaints are entitled to attorney fees and costs related to their lawsuit.
Thus, the Privacy Act offers numerous potential avenues for a whistleblower to use those provisions to obtain protection, information, and relief. For example, as in the Tripp case, when the federal government leaked information covered under the Privacy Act to discredit her, Tripp successfully pursued a Privacy Act for damages and fees. She could attack the illegal retaliation caused by the leak of information through the Privacy Act, and avoid the many limitations of the WPA.
Conclusion
For decades, attempts to reform the WPA and give federal employees the right to have whistleblower retaliation cases heard in federal courts have stalled. Over the years, however, legal challenges to retaliation that avoid the limits of the WPA have produced strong precedents allowing specific federal employees to pursue cases in federal courts as long as they strictly follow the correct technical procedures required under each of the specific law or Constitutional provision.
Federal employee whistleblowers are essential to rooting out fraud, abuse, and misconduct throughout the government. Leveraging these strong legal precedents, which can supplement remedies offered under the WPA, can offer critical avenues to protect federal employees from retaliation and ensure they receive the proper relief when it occurs.
Useful Resources
Government Webpages:
Overview Of Federal Sector EEO Complaint Process
U.S. Office of Special Counsel
U.S. Merit Systems Protection Board
Privacy Act of 1974
U.S. Department of Education Confirms That It Will Enforce 2020 Title IX Rule
On January 31, 2025, the U.S. Department of Education’s Office for Civil Rights (OCR) issued a “Dear Colleague Letter” (DCL) announcing that it would enforce Title IX of the Education Amendments of 1972 under the provisions of the 2020 Title IX Rule, rather than the recently invalidated 2024 Title IX Final Rule.
The DCL and Executive Order 14168 (“Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”) have significant implications for schools, colleges, universities, and other recipients of federal financial assistance that are subject to Title IX. These institutions will likely need to review and revise their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and the executive order and to prepare for potential enforcement action by OCR or the U.S. Department of Justice.
Quick Hits
OCR will enforce Title IX protections under the 2020 Title IX Rule, not the 2024 Title IX Final Rule.
The 2020 Title IX Rule provides procedural protections for complainants and respondents and requires supportive measures.
The 2024 Title IX Final Rule, which was criticized for impermissibly expanding the definition of “sex” to include gender identity and other categories, has been invalidated by federal courts.
OCR’s new course for enforcement aligns with Executive Order 14168. The 2020 Title IX Rule, issued by the first Trump administration in May 2020, defines “sexual harassment,” provides procedural protections for complainants and respondents, requires the provision of supportive measures to complainants, and clarifies school-level reporting processes. The 2024 Title IX Final Rule, issued by the Biden administration in April 2024, expanded the definition of “on the basis of sex” to include gender identity, sex stereotypes, sex characteristics, and sexual orientation, and mandated that schools allow students and employees to access facilities, programs, and activities consistent with their self-identified gender.
The DCL follows a series of federal court decisions that vacated or enjoined the 2024 Title IX Final Rule, finding that it violated the plain text and original meaning of Title IX, which prohibits discrimination on the basis of sex in federally funded education programs and activities. The most recent decision, issued by the U.S. District Court for the Eastern District of Kentucky on January 9, 2025, stated that the 2024 Title IX Final Rule “turn[ed] Title IX on its head” by allowing males to identify as and thus become women and vice versa, and by requiring schools to treat such claims as valid. The court also noted that “every court presented with a challenge to the [2024 Title IX] Final Rule has indicated that it is unlawful.” On this note, the DCL states that OCR’s enforcement measures will interpret the word “sex” to mean “the objective, immutable characteristic of being born male or female.”
The DCL also aligns with President Trump’s Executive Order 14168, issued on January 20, 2025, after the president was sworn in for his second term of office. The executive order declares that “[i]t is the policy of the United States to recognize two sexes, male and female” that are “not changeable and are grounded in fundamental and incontrovertible reality.” It directs all executive agencies and departments to “enforce all sex-protective laws to promote this reality,” to use “clear and accurate language and policies that recognize women are biologically female, and men are biologically male,” and to refrain from using federal funds to “promote gender ideology,” a concept that the executive order defines as including a “spectrum of genders that are disconnected from one’s sex.”
The executive order also rescinds several previous executive orders, presidential memoranda, and agency guidance documents issued by the Biden administration that addressed sexual orientation and gender identity issues. The order instructs the attorney general to issue guidance to agencies to “correct” what it describes as the “misapplication of the Supreme Court’s decision in Bostock v. Clayton County, Georgia (2020) to sex-based distinctions in agency activities.” (In Bostock, the Supreme Court of the United States held that Title VII of the Civil Rights Act of 1964’s prohibition against unlawful sex discrimination encompassed discrimination based on sexual orientation or gender identity.)
The executive order authorizes agency action to “ensure that intimate spaces [such as prisons, shelters, and bathrooms] designated for women, girls, or females (or for men, boys, or males) are designated by sex and not identity.” It also prohibits the use of federal funds “for any medical procedure, treatment, or drug for the purpose of conforming an inmate’s appearance to that of the opposite sex.”
Next Steps
In light of OCR’s “Dear Colleague Letter” and President Trump’s Executive Order 14168, schools, colleges, universities, and other recipients of federal financial assistance may want to consider:
reviewing and revising their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and executive order; and
providing training and education to staff, faculty, and students on the new requirements and changes related to Title IX enforcement.
FCC Delays Implementation of New Text Message Consent Rules
On January 24, the FCC issued an order postponing the effective date of its one-to-one consent rule. The rule, which would have required companies to obtain individual consent for each marketing partner before sharing customer data, was originally slated to go into effect on January 27, 2025. However, the FCC’s order has put the rule on hold until at least January 26, 2026, unless a court ruling dictates an earlier implementation date.
The delay stems from a legal challenge filed in the Eleventh Circuit Court of Appeals. (previously discussed here). The lawsuit argues that the FCC exceeded its statutory authority by requiring individual consent, and that this interpretation conflicts with established understandings of “prior express consent.” The challenge also alleges that the FCC did not adequately consider the economic impact of the rule. Additionally, plaintiffs argued that the rule would “significantly increase the cost of compliance” and “disrupt the insurance marketplace.”
The FCC’s one-to-one consent rule is intended to protect consumers from unwanted telemarketing calls. However, industry critics assert that the rule is unnecessary and would place undue burden on businesses. The Eleventh Circuit Court of Appeals is expected to rule on this challenge in the coming months.
Putting It Into Practice: This delay, as well as the upcoming Eleventh Circuit decision, could significantly impact how financial institutions that rely on telemarketing and data sharing for marketing purposes obtain and manage customer consent. We will continue to monitor this and other one-to-one consent rule litigation for further developments.
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Fifth Circuit Strikes Down FTC’s ‘Junk Fee’ Rule for Auto Dealers
On January 24, 2025, the Fifth Circuit Court of Appeals struck down an FTC rule aimed at curbing deceptive advertising and sales practices in the auto industry. The rule, which sought to prohibit certain “junk fees” and misleading pricing tactics, was challenged by industry groups who argued that the FTC had exceeded its authority.
The FTC’s Combating Auto Retail Scams (CARS) rule (previously discussed here) required auto dealers to provide consumers with a clear and conspicuous “Offering Price” that included all required charges, with limited exceptions. It also would have prohibited several practices, including:
Bait-and-switch Advertising. Advertising a vehicle at a certain price and then not having that vehicle available when a consumer attempts to purchase it.
Failing to Disclose Key Terms in Advertisements. Key terms for which the rule required a disclosure included the total price of the vehicle, including the enumeration of all additional all fees and charges.
Charging Consumers for Add-on Products without Consent. Such add-on products included items like extended warranties, gap insurance, and paint protection.
The Fifth Circuit sided with the industry groups, vacating the FTC’s rule. The court found that the CARS rule exceeded the FTC’s authority to address “unfair or deceptive acts or practices” by regulating pricing practices that were not inherently deceptive. Additionally, the court determined that the FTC failed to provide adequate notice of the proposed rulemaking, violating procedural rules.
Putting It Into Practice: The decision to strike down the rule marks the latest development in state and federal efforts war on “junk fees” in the financial sector. While the Fifth Circuit Court determined the FTC overstepped its regulatory authority in this instance, federal and state agencies have clearly prioritized combatting “junk fees” (a trend we previously discussed here, here, and here). Companies should closely monitor this development to see if other federal circuit courts follow suit.
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California Supreme Court Rejects Non-Disclosure Theory for ER Evaluation and Management Fees, Holding that Hospitals owe no Additional Duty Outside Regulatory Pricing Disclosure Regime
Hospitals charge a standard evaluation and management services fee (“EMS”) for patients seen in the emergency room, in one of five amounts, depending upon the severity of the visit. This EMS fee is listed in the hospital’s public “chargemaster,” a comprehensive price list required by law. But does the hospital also have a duty to inform individual ER patients, before they receive services, about the EMS fee?
In a recent opinion, the California Supreme Court unanimously answered: No. A hospital’s duty is to comply with the existing state and federal pricing disclosure laws that already require public disclosure of all of a hospital’s fees, including its EMS fees. The Court’s opinion, in Capito v. San Jose Healthcare System, LP, resolves a split of authority in the Court of Appeal regarding whether a hospital can be liable under state consumer protection laws for not individually informing ER patients about EMS fees before treatment.
The Supreme Court’s decision relies heavily on the “extensive scheme of state and federal law” that “obligates hospitals to make specific disclosures about the prices of medical services.” Capito v. San Jose Healthcare Sys. LP, Case No. S280018 (Dec. 23, 2024). These laws require every hospital to publish a copy of its chargemaster—a lengthy document describing the base charge for each of its procedures and services. Cal. Health & Saf. § 1339.51(b)(1); 42 U.S.C. § 300gg-18(e); 45 C.F.R. § 180.20. The charges billed to patients is usually significantly lower than the base charges in the chargemaster due to reductions for insurance, discounts, charitable care or other reasons.
The California state agency governing health information access publishes chargemasters for free download on its website, along with other pricing disclosures. Hospitals must also publish a copy on their websites or at the hospital. Cal. Health & Saf. § 1339.51; see also 42 U.S.C. § 300gg-18(e) (similar federal law). In addition, hospitals must file with the state agency a form identifying its “top 25” most common charges—a short list typically including EMS fees. Cal. Health & Saf. § 1339.56(c).
These pricing disclosure laws reflect the Legislature’s desire to ensure consumers have access to pricing information regarding healthcare. But these are not the only policy goals expressed by the Legislature. As the Court explained, “emergency medical care is a vital public service that is necessary for the protection of the health and safety of all.” Capito at 2 (quoting in part Stats. 1987, ch. 1240, § 1, p. 4406). To protect public health, state and federal law require hospital with public emergency rooms to provide care to any person who needs life-saving treatment or has a serious injury or illness. Cal. Health & Saf. § 1317(a); 42 U.S.C. § 1395dd (EMTALA). Emergency care must be provided regardless of the patient’s ability to pay. H&S § 1317(b); see 42 U.S.C. § 1395dd(h); 42 C.F.R. § 489.24(a)(1). This means the hospital may not question the patient about payment until after the patient is stabilized. Id. Federal law also forbids hospitals from “unduly discourag[ing]” patients from getting treatment through its registration procedures. 42 C.F.R. § 489.24(d)(4)(iv).
California law also requires hospitals to provide ER patients with a written agreement requiring the patient to pay for services after receiving treatment. Cal. Health & Saf. § 1317(d).
The plaintiff in Capito visited the ER at San Jose Regional Medical Center twice, each time signing the hospital’s admissions agreement, in which she agreed to financial responsibility. She was billed for a “Level 4” EMS fee after each visit. There was no dispute that the hospital’s EMS fees were included on its chargemaster, which was properly submitted to the state regulator and published on its website. Nonetheless, Capito argued on behalf of a putative class of ER patients that the hospital owed a duty under California’s Unfair Competition Law (“UCL”) and the Consumer Legal Remedies Act (“CLRA”) to specifically inform her about the EMS fee when she arrived at the ER, before receiving treatment.
Capito’s allegation is virtually identical to a string of other putative class actions filed against hospitals throughout California. Most courts rejected plaintiffs’ non-disclosure theory regarding EMS fees. As the cases percolated through the court system, published and unpublished cases emerged rejecting the theory—mostly based on the extensive statutory disclosure laws. See Gray v. Dignity Health, 70 Cal. App. 5th 225 (1st Dist. 2021); Saini v. Sutter Health, 80 Cal. App. 5th 1054 (1st Dist. 2022); Moran v. Prime Healthcare Management, 94 Cal. App. 5th 166, 169-70 (4th Dist. 2023) (review granted); Yebba v. Ahmc Healthcare, 2021 Cal. App. Unpub. LEXIS 4237 (4th Dist. 2021). But a few courts agreed the patients could state a claim based on non-disclosure of an EMS fee. See Naranjo v. Doctors Medical Center of Modesto, Inc., 90 Cal. App. 5th 1193 (5th Dist. 2023); Torres v. Adventist Health System/West, 77 Cal. App. 5th 500 (5th Dist. 2022).
The Supreme Court’s Capito decision resolves this conflict in favor of hospitals—holding that neither the UCL nor the CLRA requires an additional disclosure of EMS fees beyond what the regulatory scheme already demands. Requiring additional disclosures would “alter the careful balance of competing interests” already reflected in the “multifaceted scheme developed by state and federal authorities.” Capito, __ Cal. __ at 2. The Court also noted that California law requires hospitals to provide price estimates for uninsured patients in some circumstances, but the law specifically exempts emergency rooms from this requirement—further evidencing deliberative Legislative balancing.
The Supreme Court also rejected Capito’s key argument for liability under the CLRA—that the hospital had “exclusive knowledge” the EMS fees. Capito argued disclosure of EMS fees on the chargemaster was insufficient because the chargemaster is “tens of thousands” of lines long and uses various abbreviations and codes. Again, the Court disagreed. It viewed the disclosure of EMS fees in the chargemaster as sufficiently clear. The Court also found it “notable” that the EMS fees were listed on the shorter “top 25” list of most common procedures.
The Supreme Court’s Capito decision puts a significant damper on the string of class actions based on ER fees or similar pricing issues. While the Capito decision focuses on UCL and CLRA claims based on a non-disclosure theory, the Court’s decision may also limit contract-related theories raised by plaintiffs in similar cases. The contract theory posits that EMS fees are intended to cover hospital administrative costs and overhead, and are not actually “services rendered” to the patient, so the hospital supposedly cannot lawfully bill them under the admissions agreement with the patient. See Salami v. Los Robles Reg’l Med. Ctr., 324 Cal. Rptr. 3d 45 (2024). The Capito decision debunks this theory in dicta by explaining that EMS fees reflect medical services, such as reviewing tests, ordering medications, conferring with staff and other medical decision-making.
Capito will leave a large mark on pricing lawsuits in the healthcare field. Its limitations on non-disclosure and contract theories may motivate class action plaintiffs to re-focus on unconscionability theories. But unconscionability raises difficult-to-overcome problems for plaintiffs at the class certification stage, given each patient’s unique medical and financial circumstances. The Court’s decision in Capito that hospitals have no extra duty to inform patients of ER fees will presumably also resolve two related EMS fee cases where the Court had granted review pending resolution of Capito. See Moran, 94 Cal. App. 5th 166 (2023); Naranjo v. Doctors Med. Ctr. of Modesto, 90 Cal. App. 5th 1193 (2023).