Washington State Makes Key Changes to Amend Equal Pay and Opportunities Act

On April 22, 2025, the Washington State Senate passed Substitute Senate Bill 5408, as amended by the House on April 15, 2025 (“Amended SSB 5408”), making substantial changes to the Equal Pay and Opportunities Act related to pay and benefit information in job postings, a law that has resulted in hundreds of class action lawsuits since summer 2023.
Amended SSB 5408 makes significant changes to the law as it relates to procedures and potential damages, but it maintains the pay transparency in job posting requirements.
Quick Hits

Under SSB 55408, which amends the Equal Pay and Opportunities Act, Washington employers may now list a fixed pay amount instead of a wage range if only one amount is offered, including for internal transfers; postings that are replicated without employer consent are not considered official job postings.
Between the law’s effective date and July 27, 2027, employers have five business days to correct a noncompliant posting after receiving written notice and can avoid penalties if the posting is timely corrected.
The amended law further defines and clarifies two separate remedies, each of which is exclusive: administrative remedies (civil penalties up to $1,000 and statutory damages between $100 and $5,000 per violation) or remedies via private civil actions, including statutory damages between $100 and $5,000 per violation. Each permits statutory damages and considers factors such as willfulness and employer size.

Key Updates to RCW 49.58.110
The key updates to RCW 49.58.110 follow below.
Wage Scale or Salary Range
The wording of the previous statute appeared to require a “wage scale or salary range,” even if all individuals employed in that position had the same pay or the same starting pay. Amended SSB 5408 permits employers that offer only a fixed amount of pay to list only that fixed amount, and they are not required to provide a wage scale or salary range that does not really exist. This also applies for internal transfers where the employer only offers a fixed wage amount.
Definition of “Posting”
Amended SSB 5408 makes clear that a posting does not include a “solicitation for recruiting job applicants that is digitally replicated and published without an employer’s consent.”
Cure Period
For postings between the effective date of Amended SSB 5408 and July 27, 2027, employers must be given the opportunity to correct a job posting that does not meet the requirements of the law. Under the new law, any person may provide “written notice” to the employer that they believe a posting fails to comply with the job pay transparency requirements, and the employer has five (5) business days from the receipt of the written notice to correct the posting and notify any third-party posting entity to correct the posting. The cure opportunity must be provided before the individual may seek any remedy under the law, and if the posting is timely cured, no damages, penalties, or other relief may be assessed.
Damages/Relief
RCW 49.58.110 previously relied on damages sections that arose from the equal pay law as it existed prior to the job posting wage transparency laws. Amended SSB 5408 now further defines and clarifies two separate remedies, each of which is exclusive.

Administrative remedies. Amended SSB 5408 permits an investigation, encourages conference and conciliation, and, if that fails, permits the director to assess a civil penalty of $500 for a first violation and up to $1,000 for repeat violations, or up to ten percent of the damages. In addition to the civil penalty, costs, and other relief for the affected job applicant or employee, the department may “order the employer to pay each affected job applicant or employee statutory damages of no less than $100 and no more than $5,000 per violation.” Amended SSB 5408 provides factors to be considered when assessing the penalty, including the willfulness of the violation or whether it was a repeated violation; the employer’s size; the amount necessary to deter noncompliance; the purposes of the law; and other factors deemed appropriate.
Private civil action. Amended SSB 5408 leaves in place an affected job applicant or employee’s right to bring a private right of action. The new law, however, provides that an affected job applicant or employee may be “entitled to statutory damages of no less than $100 and no more than $5,000 per violation, plus reasonable attorneys’ fees and costs.” The court, in assessing statutory damages, may consider the same factors as the agency.

Mistake No. 10 of the Top 10 Horrible, No-Good Mistakes Construction Lawyers Make: Not Treating Your Arbitrator Like Santa

I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. I have made my share of mistakes and learned from my mistakes. I was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is the final No. 10 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.
Your and your client’s goal after a construction arbitration is to open the emailed award and be as happy as Ralphie, in the beloved movie A Christmas Story, when he opened up his Red Ryder BB gun Christmas morning. While he later almost “shot his eye out” while battling pirates in his backyard, the point is that he was a good boy all year, and it was up to Santa to review his behavior and decide if he deserved his desired BB gun. In any arbitration, your Santa is, of course, your arbitrator. While you may have presented the best case possible, there is no guaranty of your desired award/present under the tree. The mistake made by many lawyers is failing to treat the arbitrator like Santa to make it as easy as possible for that arbitrator to put you on the very nice award list. You need to – prior, during, and after the hearing – provide the best possible cookies and make it more likely for Santa to easily slide down the chimney to deliver that great award in your favor under the tree.              
Some of these suggestions below are equally applicable to trial judges, but never forget that most construction arbitrators are not full-time neutrals and are concurrently practicing as a lawyer representing clients. Yes, there are non-lawyers on many panel lists (like the AAA), but the use of any non-lawyer on a three-person arbitration panel is very rare these days. One of the most touted benefits of arbitration is that the experienced arbitrators are experts in construction and can sift through irrelevant evidence and arguments as opposed to a judge (or jury) who may have zero experience in construction.

Know your arbitrator’s likes and dislikes. Santa does not want fish sticks left by the tree; he wants milk, really good cookies and fresh carrots for his reindeer. All arbitrators have their own likes and dislikes, and doing something before, during or after a hearing that is a “dislike” is a bad idea. While you vetted potential arbitrators during the selection process, once chosen, you need to do so all over again. You should be able to get some good information since most of the better-known arbitrators are those that are chosen more often. Reach out within your firm as well as to your construction colleagues. What kind of scheduling order does she prefer? What about handling discovery disputes and dispositive motions? Any preferences for how exhibits are put together? What about “hot boxing” experts (testifying back to back)? Is a time clock used for witnesses (and to reign in long-winded lawyers)? More importantly, are there are any known tendencies on specific issues (like delay damages)? Is there an oft-used arbitrator who is unbelievably hard on parties in their presentation about meeting their burden of proof on damages, even with the informality of arbitration and where the rules of evidence may not be strictly enforced?
Wear the white hat in pre-hearing matters, and don’t be a jerk. Arbitrators hate discovery disputes and ego fights between lawyers just as much as judges. I have found that because as an arbitrator I am not an elected judge, and arbitration is informal, this brings out the jerk in some lawyers. Being a zealous advocate is not the same. Will being difficult help your client? You are building your credibility with the arbitrator in every pre-hearing filing and in-person or telephonic hearing.    
 Don’t forget that the arbitrator is a construction expert. You helped choose the arbitrator because of his or her expertise. This is not a trial judge who, as in the middle of a bench trial years ago where I was counsel, called the lawyers up and asked, “I keep on hearing about something called a ‘pay application.’ What is that?”  In a large multi-week arbitration where I served as chair, one of the lawyers during a direct examination went on for 30 minutes getting the witness to talk about certain construction processes as if the panel were a bunch of fifth graders. As nicely as I could, I interrupted the lawyer and said that he could move on and that the panel did not need to be educated on that topic. Did that impact his credibility? Yes, it did, but the panel did not penalize his client for such a stupid waste of time. Santa knows that time is money, and he has other houses to visit.
 Remember the arbitrator is drinking through a fire hose of facts and exhibits.  While you have been living with the case and know the thousands of pages of the project and the hundreds of exhibits, remember that the arbitrator is hearing testimony and reviewing exhibits for the first time when the hearing begins. Yes, there may have been dispositive motions and a pre-hearing brief, but when the hearings start, the arbitrator is listening to testimony, making notes, and juggling exhibit books. The lesson? Take your time with your examinations. Slow down. Make sure the arbitrator is caught up to where you are. Provide a brief summary before an examination of what areas you intend to go over, as well as what exhibit books you will use. Santa wants time to understand the house, the living room’s layout, and where best to put the presents. 
Create a joint set of exhibit books. The previous blog post, No. 9, emphasized the many benefits of working with the opposing counsel and creating a joint set of exhibit books. Most good arbitrators require such a process, and it stops the problems (delays and confusion) of each side showing up with its own 20 thick exhibit binders when 75% of the exhibits in each set of binders are the same.
Identify the exhibit books you will be using before an examination. Do not wait until you begin a witness examination (direct or cross) to specify which book you will be using. Tell the arbitrator (and counsel) before you start which books you will be using so everyone can pull out those books and better follow your examination. Again, this eliminates all sides going back and forth to find the applicable witness books.  
Consider creating witness exhibit books. This may seem counterintuitive if the goals is to limit the number of books, but if you have a witness with a small number of exhibits that are scattered among multiple books, consider putting together an exhibit book for that witness that has the exhibits already numbered (as well as what books they are in).  
Color code the exhibit books on the front and the spine. Most counsel use the same black exhibit books. While there may be a label on the front and sometimes the spine, especially if there are multiple books, there can be confusion and time wasted.  Using a different color code on the labels, or even different color binders, can help efficiency (“Please go to book 5, the red one”).
Make sure each page in each exhibit is numbered. While many of the exhibits will have their own numbers, confusion and delay occur when, for instance, there is an exhibit that has 20-60 pages, but the individual pages are not numbered. This happens with photos, long text streams, and multiple invoices. There is nothing more frustrating for an arbitrator (and a witness), and it disrupts an examination, for the lawyer to say: “Please turn to book 18, exhibit 135, and if you go about a fourth of the way in, you will see a picture that looks like…” And no one can find it. Worse, halfway through your “Perry Mason-like” cross examination about that picture, the arbitrator says, “Counsel, sorry, I must have been looking at the wrong picture. Can you orient me?” 
Make good decisions on what exhibits go into your books, and keep up with what exhibits have been used in the hearing. The arbitrator understands that since there is limited pre-hearing discovery in most arbitrations (sometimes no depositions), the tendency is to include every document or email. But be careful not to dump scores of exhibits into books that may not have even been used. This will impact your credibility. And pay close attention to what exhibits are used during the hearing. It may be (again, treat your arbitrator like Santa) that with everyone’s cooperation, there can be scores of exhibits removed from books, or even complete books can be withdrawn.

Ralphie deserved his BB gun, but not the destruction of his family’s turkey by the next- door neighbor’s coon hounds. By thinking about and implanting the many ways to make your arbitrator’s decision-making more efficient, you create credibility for yourself and your client and will increase the likelihood of an excellent Christmas morning.   
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NO LINK, NO LIABILITY: Court Dismisses Vicarious Liability Allegations.

Hey TCPAWorld!
Vicarious liability demands more than a loose business association between entities.
In Gonzalez v. Savings Bank Mutual Life Ins. Co. of Mass., No. EP-24-CV-00289-DB, 2025 WL 1145266 (W.D. Tex. Apr. 15, 2025), Yazmin Gonzalez’s (“Plaintiff”) claims of vicarious liability under the TCPA were dismissed due to insufficient factual allegations linking Savings Bank Mutual Life Insurance Company of Massachusetts (“SBLI”) to Elsworth Rawlings or American Benefits, its alleged subagents.
Background
According to Plaintiff’s First Amended Complaint (“FAC”), in early 2024, Plaintiff began receiving a series of telemarketing calls to their phone number ending in 1859, which was listed on the National Do-Not-Call Registry (“DNCR”). Id. at 1.  Plaintiff claims to have received eight calls, each featuring the following prerecorded message:
“Hi, this is Stephanie, I’m calling you from American Benefits… “

Id.  Plaintiff alleged that she informed the agent that she was not interested and requested the calls to stop on the fourth call. The calls continued.
On the eighth call, Plaintiff impersonated her mother to identify the company behind the calls. Plaintiff received a call from a number ending in 2986, allegedly the same agent she connected with earlier. The agent then supposedly connected her to “Elsworth Rawlings,” who did not identify the company he worked for, asked qualifying questions, and then informed her that he would be transferring her to an SBLI agent. Plaintiff was transferred to another agent that allegedly introduced themselves as Bell and completed Plaintiff’s insurance application. After the application was approved, she was transferred back to Rawlings. Plaintiff later received an insurance policy bearing Rawlings’ signature. According to Plaintiff, the call line was one long chain which did not disconnect at any point.
Plaintiff’s Allegations
In her FAC, Plaintiff alleges that:

Rawlings is a licensed insurance agent who was appointed by SBLI to market, solicit, and sell insurance on [their] behalf… on February 20, 2024;

SBLI and Rawlings set up a phone system that allowed them to coordinate applications and transfer applicants back and forth between them; and

SBLI appointed Rawlings with the knowledge and expectation that Rawlings would make phone calls to solicit SBLI’s products and services.

Id. at 2.
The Agreement
Under the Agreement executed between SBLI and Rawlings, SBLI authorized Rawlings to solicit and transmit life insurance applications, but expressly prohibited him from presenting himself as an SBLI employee or agent beyond what was contractually permitted. Additionally, Rawlings was required to protect SBLI’s reputation and comply with applicable laws and regulations. Plaintiff further alleged that American Benefits was acting as Rawlings’ agent—and therefore as SBLI’s subagent.
Legal Standard
SBLI moved to dismiss under Rule 12(b)(6), arguing that the complaint failed to plead sufficient facts to state a plausible claim for relief.
The TCPA provides a private right of action under 47 U.S.C. § 227(b), which regulates autodialed or prerecorded calls to cell phones, and 47 U.S.C. § 227(c), which protects those on the DNCR. Plaintiff can establish vicarious liability through common law agency principles by showing the caller acted on behalf of Defendant.
Court’s Analysis
Plaintiff’s FAC raises two causes of action against SBLI:

Eight (8) violations under Section 227(b)(1)(A) by making non-emergency telemarketing robocalls to Plaintiff’s cellular telephone numbers without her prior express written consent, and

Violations under Section 227(c) and 47 C.F.R. § 64.1200(c) for making eight (8) unsolicited calls to Plaintiff’s line, which was registered on the DNCR, without Plaintiff’s consent.

Id. at 3.  In its Motion to Dismiss, SBLI argued Plaintiff failed to plead any facts linking the calls to SBLI under Sections 227(b) or 227(c). Because the Agreement executed between SBLI and Rawlings was attached to SBLI’s Motion to Dismiss, the Court treated it as part of the pleadings when evaluating the plausibility of the allegations.
The Court found that Plaintiff failed to plead sufficient facts under 227(b) to establish direct liability against SBLI, as SBLI neither made the calls nor controlled the party that made the calls. Instead, each call was initiated by “American Benefits,” as indicated by the prerecorded message cited in Plaintiff’s Complaint. As a result, the Court held that SBLI cannot be held directly liable for any of the telemarketing calls.
The Court also rejected Plaintiff’s theory of vicarious liability under the TCPA, finding she failed to allege sufficient facts to establish an agency relationship between SBLI and Rawlings. To support vicarious liability, a plaintiff must show actual authority, apparent authority, or ratification. The court emphasized that merely identifying Rawlings as a “subagent” was not sufficient without factual support showing SBLI’s control or acceptance of the calls. Id. at 4.
No Actual Authority
According to the Court, actual authority exists when the principal expressly or implicitly grants the agent authority to perform a particular act. Here, there was no actual authority because Plaintiff did not allege facts showing SBLI controlled the manner and means of the telemarketing campaign or granted Rawlings the power to hire American Benefits. Plaintiff also failed to allege SBLI’s control over Rawlings’s day-to-day operations or any direct connection to the American Benefits telemarketer.
No Apparent Authority
“[A]n agent has apparent authority to bind a principal if a third party reasonably believes the agent has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.” Id. at 5. (Citations omitted). Plaintiff failed to demonstrate apparent authority as there is no evidence that SBLI held out Rawlings or the telemarketer as having authority to act on its behalf. Although Plaintiff alleged SBLI gave Rawlings instructions and coordinated systems for processing applications, she did not plead facts showing SBLI’s conduct led her to reasonably believe the caller was acting for SBLI. As a result, the Court held that Plaintiff did not plausibly allege apparent authority.
No Ratification
Lastly, Plaintiff’s ratification theory fails because she did not allege that SBLI had knowledge of any unlawful calls made by Rawlings or American Benefits. To support ratification, the principal must be aware of the conduct and either accept the benefits or fail to repudiate it. The court found no factual basis showing SBLI affirmed or accepted any TCPA-violating conduct, and thus ratification could not establish vicarious liability.
The Court concluded that neither American Benefits nor Rawlings acted as SBLI’s agent under any agency theory, thus, SBLI could not be held liable under Section 227(b). The Court also dismissed Plaintiff’s Section 227(c) claim, since Plaintiff could not attribute a single call to SBLI. As a result, both TCPA claims were dismissed.
Vicarious liability under the TCPA demands more than just an ordinary business association. It requires well-pled facts that establish a clear agency relationship, showing that the defendant exercised control over the caller’s conduct, granted the caller to make the calls, or knowingly accepted the benefits of those calls while being thoroughly aware they violated the law.

AFFILIATE TRACKING CLASS ACTION: Texts with Links to HasOffers (Tune?) Website Lands Interest Media in Deep TCPA Trouble

Really interesting one for the affiliate world today.
So repeat TCPA litigator ZACHARY FRIDLINE just scored a big victory over Interest Media following text messages allegedly sent to his phone without consent.
As the Court tells it:
“The text messages led to internet properties either owned by Interest Media or an affiliate offer promoted on Interest Media’s platform.” 17 To reach this conclusion, Fridline “track[ed] the tracking links in the text messages” 18 and “capture[d]” a tracking link. 19 This link directed recipients to “imtrk.go2cloud.org,” which is owned by Interest Media. 20
“The Go2Cloud domain is owned by HasOffers, which is an affiliate tracking platform.” 21 “The website imtrk.hasoffers.com is … Interest Media’s account on the HasOffers platform.” 22 These messages “were sent to solicit the purchase of various property, goods, and services offered by advertisers who paid Interest Media to drive traffic to their websites.” 23 “By way of example, some of the advertisers included gift card ‘giveaway’ scams, lead generation websites for sweepstakes, offers for televisions, and offers for iPhones.” 2
The only part of this that doesn’t make sense to me is that I thought HasOffers changes its name to Tune like 10 years ago.
Regardless, in Fridline v. Interest Media, 2025 WL 1162492 (M.D. Pa April 21, 2025) the Court held these allegations were sufficient to state a claim against Interest Media.
Unlike the caselaw Interest Media has relied upon, Plaintiff does not merely “believe[ ] the identified phone number[s]” are “owned by defendant.”29 Instead, Plaintiff described how Defendant’s business model is predicated on solicitation and explained how the tracking links directed recipients to “internet properties either owned by Interest Media or an affiliate offer promoted on Interest Media’s platform.”30 He then identified an example tracking link that he traced to a website owned by Interest Media found on a known affiliate tracking platform domain that Defendant maintains an account with. 31 These allegations provide the requisite factual support “to justify that a call came from” Defendant. 32 Nor can it be said that these allegations are unclear or conclusory. Plaintiff has articulated a detailed narrative based on clear factual allegations.
So there you go.
Probably didn’t help Interest Media’s big law counsel argued the messages were sent without an ATDS but that isn’t even a requirement under the TCPA’ DNC provisions. Indeed the argument was so bad the Court simply said it would “set aside” that argument, which is code for “I am not even going to waste my time with this.”
Yikes.
Crazy that people pay big law lawyers to make arguments that are absolutely meritless. But what are you going to do? (I mean, other than hire better lawyers.)
Regardless another big win for a litigator and bad loss for a lead generator using big law to defend it.

Second Circuit Reinstates Discrimination Lawsuit of Employee Fired for Unauthorized Removal of Cash From Register

The U.S. Court of Appeals for the Second Circuit recently reinstated a former laundromat employee’s discrimination lawsuit against her employer, even though her employment had been terminated for taking cash from the cash register.
The decision in Knox v. CRC Management Co., LLC, No. 23-121 (2d Cir. 2025), underscores the importance of promptly addressing employee complaints, providing training to supervisors, and ensuring policies are reduced to writing and enforced consistently in the workplace.

Quick Hits

The Second Circuit Court of Appeals reversed a district court’s entry of summary judgment that had been granted in favor of a defendant employer and reinstated the plaintiff’s employment discrimination lawsuit, finding that genuine disputes of material fact existed as to each of the plaintiff’s claims and that the plaintiff was entitled to present the claims to a jury.
The plaintiff, a former laundromat employee whose employer had discharged her for removing cash from the register and refusing to return it, filed a lawsuit in federal court alleging discriminatory and retaliatory termination, hostile work environment, refusal to accommodate a disability, and unpaid wages.
The case highlights for employers the value of carefully addressing employee complaints of discrimination and harassment, enforcing workplace policies consistently, and providing training for supervisors.

Background
Natasha Knox, a Black woman of Jamaican descent, was employed as a customer service attendant at three Clean Rite Center laundromats in the Bronx from December 2018 until her employment was terminated in April 2019. During her employment, Knox allegedly experienced derogatory comments from her supervisor. The supervisor allegedly criticized Knox for being “too hood” and “ghetto” to work at Clean Rite. Knox reported these comments to her district lead, who allegedly took no action.
In late January or early February 2019, Knox sustained a broken thumb in a car accident, and in early March, she was instructed by her doctor not to lift more than twenty-five pounds. Knox’s subsequent requests for accommodation in conformance with her doctor’s instruction were allegedly dismissed. One supervisor reportedly told Knox that she “shouldn’t have this job” if she required an accommodation, and her new district lead also made derogatory comments, including that Knox “looked like Aunt Jemima” and “talk[ed] Jamaican” when she became “upset.” Knox further alleged that she was not compensated for extra shifts that she worked at other Clean Rite locations and that she had filed a formal complaint with the new district lead, who did not follow up on her claims.
On April 14, 2019, after taking a taxi to work, Knox took $15 from the cash register to reimburse herself for the taxi fare and placed her taxi receipt in the register, believing she had permission to do so. She was later confronted by her new supervisor, who asked her to return the money—a request Knox refused. Following this incident, the district lead terminated Knox’s employment, citing her removal of cash from the register and her refusal to return it as the reason for the termination.
The Second Circuit Revives Knox’s Claims
Knox filed a lawsuit in the U.S. District Court for the Southern District of New York against Clean Rite and her supervisors. She alleged racial discrimination, failure to accommodate her disability, retaliation, and unpaid wages.
The district court granted summary judgment in favor of the defendants. The district court concluded that Knox had not provided sufficient evidence beyond her own testimony to demonstrate that Clean Rite’s reason for terminating her employment—specifically, her alleged theft of money—was discriminatory. Additionally, the district court determined that Knox’s testimony and sworn affidavit alone were inadequate to establish factual disputes regarding her claims, including those related to unpaid wages.
On April 9, 2025, the U.S. Court of Appeals for the Second Circuit issued a decision reviving the case, holding that Knox had presented sufficient evidence to survive summary judgment on all her claims. In doing so, the court emphasized that Knox had presented evidence of discriminatory comments near in time to her employment termination that could reasonably support an inference of unlawful discrimination. The court also pointed out that Knox’s supervisors had not taken any action in response to her internal complaints of workplace discrimination, which were protected conduct under Title VII of the Civil Rights Act of 1964.
Importantly, the Second Circuit reasoned that Knox had testified in her deposition that other employees had been permitted to take cash from the register to pay for their taxi fares, so long as they left receipts. This, according to the Second Circuit, was sufficient to create an issue of fact concerning whether the reasons provided by Clean Rite were a pretext for unlawful discrimination.
As for the disability discrimination claims, the Second Circuit focused on Knox’s disclosure of her injury and lifting restrictions and the fact that her accommodation request had been denied, even though arguably she could perform other essential functions of the job.
Finally, the Second Circuit held that Knox’s affidavit stating she had been subjected to daily harassment from her supervisor and had worked hours for which she was not paid was sufficient to create an issue of fact relating to her hostile-work-environment and unpaid-wages claims.
Guidance for Employers
The Knox decision provides a helpful reminder to employers of the importance of ensuring that all complaints of discrimination, harassment, and retaliation are taken seriously and investigated promptly. Knox’s complaints to supervisors about racial harassment and failure to accommodate her disability were allegedly ignored, contributing to the Second Circuit’s decision to reinstate her claims.
The Second Circuit’s decision does not alter the “sham affidavit” rule, which prevents a party from creating a genuine issue of material fact by submitting an affidavit that contradicts prior deposition testimony. In Knox’s case, the court found that her affidavit was consistent with her deposition testimony and other evidence presented. This underscores the importance of maintaining consistent and truthful documentation throughout all legal proceedings.
Employers should consider providing regular training to supervisors and managers on antidiscrimination laws, reasonable accommodations, and the proper handling of employee complaints. In Knox’s case, alleged derogatory comments and inconsistent treatment by supervisors played a significant role in the appellate court’s decision. Training can help prevent such behavior and ensure consistency in a respectful workplace.
Finally, employers may want to regularly review and update their antidiscrimination, harassment, and accommodation policies to ensure they comply with current laws and best practices. Clear policies and procedures can help guide employees and managers in handling complaints and accommodation requests appropriately. Relatedly, clear, written policies and procedures concerning items such as expense reimbursement may help reduce or eliminate allegations of selective enforcement, such as those at issue in the Knox case.

NO INDEMNITY: ReNu Solar Loses Effort to Obtain Default Judgment Against TechMedia Group and It Highlights the Issue With Indemnity Agreements

So here’s one you haven’t heard before.
Company buys lead, makes calls, gets sued under the TCPA.
Ok ok you’ve heard THAT one before.
But then company sues lead seller for indemnity and lead seller doesn’t show up in court. Company seeks default judgment against lead seller.
What result?
Well in Jackson v. Renu, 2025 WL 1162491 (M.D. Pa. April 21, 2025) the Court held no judgment against the seller is possible until the underlying TCPA defendant actually tasted defeat in the TCPA case.
In Jackson the contractual agreement between ReNu and TechMedia called upon TechMedia to comply with the TCPA and indemnify ReNu for any judgment that was entered against it. But since no judgment has yet been entered against ReNu the Court found TechMedia did not yet owe ReNu indemnity.
Ouch.
Notably the judgment probably could have (should have) asked for recovery of attorneys fees but apparently ReNu’s lawyers didn’t advise the court of whether ReNu had chose its own lawyers to defend it or those chosen by TechMedia. So NO award was entered at all.
My goodness.
Setting aside the potential screw up here, Jackson underscores a huge problem with indemnity agreements in lead generation. Lead buyers often assume such agreements make them bullet proof against suit.
Ridiculous.
The lead buyer that made the call is always the first one to be sued and a mere indemnity agreement does not mean the buyer will be out of the case. AT BEST it means the lead buyer will recover money against the leas seller one day. But as Jackson points out that “one day” is usually after the lead buyer has already faced a potentially massive judgment.
Not good.
Relying on indemnity agreements in lead gen contracts is NOT a smart path folks. Yes, you still need to include those terms in your contracts but VETTING your vendors and working with QUALITY PARTNERS you can trust (preferably those that abide by the R.E.A.C.H. standards) is essential.

Sixth Circuit Upholds Pay Differential in Equal Pay Act Case: Budget Constraints and Market Forces at Play

The U.S. Court of Appeals for the Sixth Circuit recently upheld a jury verdict against a school psychologist who alleged she was paid less than a male colleague in violation of the Equal Pay Act. Notably, the court found that budget constraints and the market forces of supply and demand each provided an independent basis to uphold the jury’s verdict.

Quick Hits

The Sixth Circuit upheld a jury verdict against a school psychologist who alleged Equal Pay Act violations after she was offered a lower salary than the salary paid to a male psychologist two years earlier.
The court upheld the jury verdict, determining that a reasonable juror could conclude, based on the evidence of budget constraints and market forces, that the pay differential was based on a legitimate business reason other than sex.
The case highlights the fine line between legitimate business reasons and discriminatory practices in setting new hire compensation.

On April 2, 2025, a Sixth Circuit panel issued a decision in Debity v. Monroe County Board of Education. The court upheld a magistrate judge’s decision to deny a female school psychologist’s motion for a judgment as a matter of law as to whether the board successfully established its affirmative defense that the pay differential was based on a reason other than sex. The Sixth Circuit further affirmed a magistrate judge’s decision to throw out the jury’s $195,000 damages award for the plaintiff as it was inconsistent with the jury’s finding on liability.
Much of the Sixth Circuit’s decision focused on whether the magistrate judge had properly handled an inconsistent jury verdict in which the appellate court agreed with the magistrate judge’s ultimate conclusion to throw out the damages award.
But the Sixth Circuit additionally found that “a reasonable juror could find that the Board offered” the female school psychologist “a lower salary … for a reason other than sex,” providing an example of how, in some circumstances, budget constraints and market pressures can appropriately influence compensation decisions.
Background
Marina Debity applied for a school psychologist position with Monroe County schools in Tennessee after completing an internship with the district. She alleged she was offered a lower salary than the salary paid to a male psychologist hired two years earlier, who negotiated for his pay. She alleged that when she requested equal pay, the county board of education withdrew her job offer. Debity then brought claims for sex discrimination and retaliation in violation of the Equal Pay Act (EPA), Title VII of the Civil Rights Act of 1964, and the Tennessee Human Rights Act.
Supply and Demand
The Sixth Circuit upheld the jury’s determination that market forces of supply and demand could constitute a legitimate, non-sex-based reason for the pay disparity, an affirmative defense under the EPA. The court’s analysis focused on the testimony of a school district administrator, who testified that when the school hired the previous male school psychologist in 2019, the board was in a “desperate” situation where one of the district’s four psychologists was retiring and another was moving to part-time. This urgency, combined with the lack of applicants, led the board to offer a higher salary. In contrast, Ferguson testified that when Debity applied in 2021, the school already had four full-time psychologists and had not previously employed five.
“It would be reasonable for a juror to conclude that Monroe County had a low demand for psychologists in 2021 with the same supply, one person, to fill the opening,” the Sixth Circuit said. “Therefore, a reasonable juror could believe that market forces of supply and demand caused Debity’s lower offer, not her sex.”
While the Sixth Circuit noted employers “may not use supply and demand as an excuse to discriminate generally by sex just because there are more people from a certain sex applying for a given job,” the school district administrator’s testimony showed there was not this type of “generalized discrimination.” The court said the question of whether Ferguson would have treated a woman applying in 2019 the same as the male psychologist, who was offered more money, was a matter for the jury.
Budget Constraints
The Sixth Circuit further said that an employer’s desire for cost savings can be a legitimate business justification for a pay differential. The school administrator’s testimony showed that the board was “genuinely concerned about the budget.” According to the decision, the administrator “testified that he tried to find enough room in the budget to hire Debity … but could not” because it was a higher priority to hire a full-time teacher at the elementary school.
The court rejected Debity’s arguments that the board could have shifted unused funds from elsewhere, stating that it is not the court’s role to second-guess the board’s budget decisions. “It is irrelevant whether the Board’s budgeting decision was wise or even based on a correct understanding of the facts,” the Sixth Circuit said. “The EPA does not outlaw incompetence—it prohibits discrimination by sex.”
Next Steps
The Debity case highlights the fine line between legitimate business reasons and discriminatory practices in setting new hire compensation. Budget constraints and market forces may, in some situations, be legitimate, nondiscriminatory business reasons that justify certain pay disparities between males and females. In the Debity case, the Sixth Circuit focused on testimony about the low supply of applicants and the immediate need to hire a school psychologist when it hired the male psychologist two years earlier as evidence as to why the male comparator was offered higher pay.
While the Debity decision is a favorable one for employers, employers facing similar market forces and budget limitations when making compensation decisions may still wish to proceed with caution. Employers may want to avoid overreliance on budget constraints and market pressures as vague, general justifications for compensation decisions. Instead, if a pay differential is necessary, despite the employer’s efforts to avoid one, employers may want to keep detailed records of budgetary decisions and the specific circumstances at play.

Litigating Trade Secret Cases: A Strategic Guide for In-House Counsel

When faced with trade secret misappropriation, swift and strategic action is crucial.
For in-house counsel, understanding the litigation process and available remedies can mean the difference between protecting valuable intellectual property and watching it lose its protected status.
This guide focuses on key litigation strategies and the critical role of injunctive relief in trade secret cases.
The Race to the Courthouse
Trade secret cases often begin with a race to secure immediate court intervention.
Unlike other intellectual property disputes that might benefit from lengthy pre-litigation investigation, trade secret cases frequently require immediate action to prevent irreparable harm. The first 48 to 72 hours after discovering potential misappropriation are critical.
Immediate Action Items
Before or contemporaneous with filing suit, in-house counsel should immediately:

Implement a litigation hold and preserve all relevant evidence
Engage digital forensics experts (internal or external) to document unauthorized access or downloads
Review all relevant agreements (NDAs, employment contracts, etc.)
Document the specific trade secrets at issue and their value
Gather evidence of protection measures in place
Consider whether to engage criminal authorities
Identify key witnesses to provide affidavits supporting injunction filings
Draft preservation letters to all potential parties and witnesses

Remember, courts will scrutinize your company’s response time. Delays in seeking protection can undermine claims of irreparable harm and make obtaining injunctive relief more difficult.
Choosing Your Forum
Trade secret cases generally can be filed in either federal or state court, as the federal Defend Trade Secrets Act (DTSA) does not preempt state law claims. This choice requires careful strategic consideration.
Federal courts may offer advantages in cases involving interstate commerce or international parties, while state courts might provide faster injunctive relief or more favorable precedent.
For cases in North Carolina, the North Carolina Business Court has developed substantial trade secret jurisprudence and can be an attractive venue. It provides some of the features of a federal court, such as a single judge assigned to hear all aspects of the case, expedited discovery, dispute resolution, formal briefing for most substantive motions, along with an overall case management order.
Trade secret cases in state court with amounts in controversy over $5 million must be designated to the Business Court, while those under $5 million may be designated there by either party.
Securing Injunctive Relief
Temporary restraining orders (TROs) and preliminary injunctions are crucial tools in trade secret litigation. However, obtaining them requires careful preparation and specific evidence. Courts typically won’t grant injunctive relief based on mere suspicion or generalized allegations of misappropriation.
Elements of a Strong Injunction Motion
Your motion should clearly establish:

The specific trade secrets at issue
How the trade secret derives value from being secret
The reasonable measures taken to maintain secrecy
Clear evidence of misappropriation
Threat of immediate and irreparable harm
Why monetary damages are inadequate
Balance of hardships favoring an injunction
Public interest considerations

Most importantly, be specific about what relief you’re seeking.
Courts are increasingly rejecting vague injunction requests that simply reference “confidential information” or “trade secrets” without more detail.
Crafting Effective Injunctive Relief
Consider requesting specific provisions such as:

Orders to isolate and sequester devices containing trade secret information
Prohibition on accessing or deleting potentially misappropriated information
Required submission of devices for forensic examination
Certification of compliance with injunctions by counsel
Restrictions on specific work activities by former employees that could lead to disclosure
Prohibition on product distribution incorporating trade secrets
Requirements for return or destruction of trade secret information

Remember that courts generally do not prohibit a former employee from working for a competitor solely based on a non-disclosure agreement.
Instead, focus on preventing the use of specific trade secrets while allowing the employee to use their general skills and knowledge.
Discovery Strategies
Trade secret litigation demands a sophisticated approach to discovery, particularly given the complex electronic evidence often involved. A critical threshold issue is the pre-discovery identification of trade secrets.
Many courts require plaintiffs to identify their trade secrets with particularity before obtaining discovery of defendants’ confidential information. This requirement serves to balance the protection of legitimate trade secrets against the risk of plaintiffs using discovery as a fishing expedition to learn competitors’ secrets.
The identification process requires careful consideration of competing interests. You must be specific enough to support your claims and meet court requirements while avoiding public disclosures that could jeopardize trade secret status. Working with outside counsel to obtain entry of an appropriate protective order that allows you to file sensitive information under seal often provides the best solution to this challenge.
The time-sensitive nature of trade secret cases frequently necessitates expedited discovery, particularly in conjunction with temporary restraining orders or preliminary injunction proceedings.
To secure expedited discovery, you must demonstrate why standard discovery timelines would prove inadequate, specifically identify crucial early-stage discovery needs, and explain how the requested discovery relates to preventing irreparable harm. Courts will weigh these factors against the burden expedited discovery would impose on defendants.
When electronic evidence plays a central role, as it often does in trade secret cases, establishing a proper forensic examination protocol becomes essential.
An effective protocol should address the selection and compensation of neutral forensic experts, define the scope of examination, establish procedures for handling privileged and confidential information, and set clear timelines and reporting requirements.
The protocol should anticipate potential disputes and provide mechanisms for their resolution.
Criminal Implications and Parallel Proceedings
The criminal implications of trade secret misappropriation add another layer of complexity to civil litigation strategy.
While potential criminal liability under federal and state law can provide significant leverage, it requires thoughtful handling to avoid ethical pitfalls. Timing of criminal referrals can impact civil discovery and may lead to stays of civil proceedings. Individual defendants may invoke Fifth Amendment protections, complicating both discovery and settlement discussions.
In-house counsel must work closely with outside counsel to navigate these parallel proceedings effectively.
Protective Orders in Trade Secret Cases
Trade secret litigation requires particularly robust protective orders that go beyond standard confidentiality provisions.
Effective orders typically establish multiple tiers of confidentiality, including “attorney’s eyes only” designations for the most sensitive information. They should carefully define access restrictions for individual defendants and establish concrete requirements for information storage and transmission.
The order should anticipate the entire lifecycle of confidential information, from initial disclosure through post-litigation destruction or return.
The Role of Expert Witnesses
Expert testimony plays a pivotal role in trade secret litigation, with three types of experts proving particularly valuable.
Digital forensics experts provide analysis of electronic evidence and documentation of misappropriation patterns. Their work often proves decisive in preliminary injunction proceedings and shapes the overall trajectory of the case.
Damages experts help quantify losses and establish both trade secret value and the improper benefit gained by a defendant.
Industry experts provide essential context about technical aspects, the value of information, and help courts value and distinguish between protected trade secrets and general industry knowledge.
The timing of expert engagement can significantly impact case outcomes. Early involvement of experts, particularly forensic specialists, often proves crucial in preliminary injunction proceedings and shapes the development of the overall case strategy.
These experts can help identify key evidence, develop preservation protocols, and guide discovery requests.
Looking Ahead
The complexity of trade secret litigation demands a balanced approach that combines urgency with strategic planning. While immediate action remains critical, hasty or poorly planned litigation can prove counterproductive.
Success requires gathering key evidence and developing a coherent strategy while moving quickly enough to prevent irreparable harm and preserve available remedies.

State Privacy Enforcement Updates: CPPA Extracts Civil Penalties in Landmark Case; State Regulators Form Consortium for Privacy Enforcement Collaboration

Companies in all industries take note: regulators are scrutinizing how companies offer and manage privacy rights requests and looking into the nature of vendor processing in connection with application of those requests. This includes applying the proper verification standards and how cookies are managed. Last month, the California Privacy Protection Agency (“CPPA” or “Agency”) provided yet another example of this regulatory focus in a March 2025 Stipulated Final Order (“Order”) against a global vehicle manufacturer (referred to throughout this blog as “the Company”). We discuss this case in further detail, and provide practical takeaways from the case, further below.
On the heels of the CPPA’s landmark case against the Company, various state AGs and the CPPA announced a formal agreement to promote collaboration and information sharing in the bipartisan effort to safeguard the privacy rights of consumers. The announcement Attorney General Bonta of California can be found here. The consortium includes the CPPA and State Attorneys General from California, Colorado, Connecticut, Delaware, Indiana, New Jersey and Oregon. According to an announcement by the CPPA, the participating regulators established the consortium to share expertise and resources and coordinate in investigating potential violations of their respective privacy laws. With the establishment of a formal enforcement consortium, we can expect cross-jurisdictional collaboration on privacy enforcement by the participating states’ regulators. On the plus side, perhaps we will see the promotion of consistent interpretation of these seven states’ various laws that make up almost a third of the current patchwork of U.S. privacy legislation.
CPPA Case – Detailed Summary
In the case against the Company, the CPPA alleged that it violated the California Consumer Privacy Act (“CCPA”) by:

requiring Californians to verify themselves where verification is not required or permitted (the right to opt-out of sale/sharing and the right to limit) and provide excessive personal information to exercise privacy rights subject to verification (know, delete, correct);
using an online cookie management tool (often known as a CMP) that failed to offer Californians their privacy choices in a symmetrical or equal way and was confusing;
requiring Californians to verify that they gave their agents authority to make opt-out of sale/sharing and right to limit requests on their behalf; and
sharing consumers’ personal information with vendors, including ad tech companies, without having in place contracts that contain the necessary terms to protect privacy in connection with their role as either a service provider, contractor or third party.

This Order illustrates the potential fines and financial risks associated with non-compliance with the state privacy laws. Of the $632,500 administrative fine lodged against the company, the Agency clearly spelled out that $382,500 of the fine accounts for 153 violations – $2,500 per violation – that are alleged to have occurred with respect to the Company’s consumer privacy rights processing between July 1 and September 23, 2023. It is worth emphasizing that the Agency lodged the maximum administrative fine – “up to two thousand five hundred ($2,500)” – that is available to it for non-intentional violations for each of the incidents where consumer opt-out/limit rights were wrongly applying verification standards. It Is unclear to what the remaining $250,000 in fines were attributed, but they are presumably for the other violations alleged in the order, such as disclosing PI to third parties without having contracts with the necessary terms, confusing cookie and other consumer privacy requests methods and requiring excessive personal data to make a request. It is unclear the number of incidents that involved those infractions but based on likely web traffic and vendor data processing, the fines reflect only a fraction of the personal information processed in a manner alleged to be non-compliant.
The Agency and Office of the Attorney General of California (which enforces the CCPA alongside the Agency) have yet to seek truly jaw-dropping fines in amounts that have become common under the UK/EU General Data Protection Regulation (“GDPR”). However, this Order demonstrates California regulators’ willingness to demand more than remediation. It is also significant that the Agency requires the maximum administrative penalty on a per-consumer basis for the clearest violations that resulted in denial of specific consumers’ rights. This was a relatively modest number of consumers:

“119 Consumers who were required to provide more information than necessary to submit their Requests to Opt-out of Sale/Sharing and Requests to Limit;
20 Consumers who had their Requests to Opt-out of Sale/Sharing and Requests to Limit denied because the Company required the Consumer to Verify themselves before processing the request and;
14 Consumers who were required to confirm with the Company directly that they had given their Authorized Agents permission to submit the Request to Opt-out of Sale/Sharing and Request to Limit on their behalf.”

The fines would have likely been greater if applied to all Consumers who accessed the cookie CMP, or that made requests to know, delete or correct. Further, it is worth noting that many companies receive thousands of consumer requests per year (or even per month), and the statute of limitations for the Agency is five years; applying the per-consumer maximum fine could therefore result in astronomical fines for some companies.
Let us also not forget that regulators also have injunctive relief at their disposal. Although, the injunctive relief in this Order was effectively limited to fixing alleged deficiencies, it included “fencing in” requirements such as use of a UX designer to evaluate consumer request “methods – including identifying target user groups and performing testing activities, such as A/B testing, to access user behavior” – and reporting of consumer request metrics for five years. More drastic relief, such as disgorgement or prohibiting certain data or business practices, are also available. For instance, in a recent data broker case brought by the Agency, the business was barred from engaging in business as a data broker in California for three years.
We dive into each of the allegations in the present case further below and provide practical takeaways for in-house legal and privacy teams to consider.
Requiring consumers to provide more info than necessary to exercise verifiable requests and requiring verification of CCPA sale/share opt-out and sensitive PI limitation requests
The Order alleges two main issues with the Company’s rights request webform:

The Company’s webform required too many data points from consumers (e.g., first name, last name, address, city, state, zip code, email, phone number). The Agency contends that requiring all of this information necessitates that consumers provide more information than necessarily needed to exercise their verifiable rights considering that the Agency alleged that the Company “generally needs only two data points from the Consumer to identify the Consumer within its database.” The CPPA and its regulations allow a business to seek additional personal information if necessary to verify to the requisite degree of certainty required under the law (which varies depending on the nature of the request and the sensitivity of the data and potential harm of disclosure, deletion or change), or to reject the request and provide alternative rights responses that require lesser verification (e.g., treat a request of a copy of personal information as a right to know categories of person information). However, the regulations prohibit requiring more personal data than is necessary under the particular circumstances of a specific request. Proposed amendments the Section 7060 of the CCPA regulations also demonstrate the Agency’s concern about requiring more information than is necessary to verify the consumer.
The Company required consumers to verify their Requests to Opt-Out of Sale/Sharing and Requests to Limit, which the CCPA prohibits.

In addition to these two main issues, the Agency also alluded to (but did not directly state) that the consumer rights processes amounted to dark patterns. The CPPA cited the policy reasons behind differential requirements as to Opt-Out of Sale/Sharing and Right to Limit; i.e., so that consumers can exercise Opt-Out of Sale/Sharing and Right to Limit requests without undue burden, in particular because there is minimal or nonexistent potential harm to consumers if such requests are not verified.
In the Order, the CPPA goes on to require the Company to ensure that its personnel handling CCPA requests are trained on the CCPA’s requirements for rights requests, which is an express obligation under the law, and confirming to the Agency that it has provided such training within 90 days of the Order’s effective date.
Practical Takeaways

Configure consumer rights processes, such as rights request webforms, to only require a consumer to provide the minimum information needed to initiate and verify (if permitted) the specific type of request. This may be difficult for companies that have developed their own webforms, but most privacy tech vendors that offer webforms and other consumer rights-specific products allow for customizability. If customizability is not possible, companies may have to implement processes to collect minimum information to initiate the request and follow up to seek additional personal information if necessary to meet CCPA verification standards as may be applicable to the specific consumer and the nature of the request.
Do not require verification of do not sell/share and sensitive PI limitation requests (note, there are narrow fraud prevention exceptions here, though, that companies can and should consider in respect of processing Opt-Out of Sale/Sharing and Right to Limit requests).
Train personnel handling CCPA requests (including those responsible for configuring rights request “channels”) to properly intake and respond to them.
Include instructions on how to make the various types of requests that are clear and understandable, and that track the what the law permits and requires.

Requiring consumers to directly confirm with the Company that they had given permission to their authorized agent to submit opt-out of sale/sharing sensitive PI limitation requests
The CPPA’s Order also outlines that the Company allegedly required consumers to directly confirm with the Company that they gave permission to an authorized agent to submit Opt-Out of Sale/Sharing and Right to Limit requests on their behalf. The Agency took issue with this because under the CCPA, such direct confirmation with the consumer regarding authority of an agent is only permitted as to requests to delete, correct and know.
Practical Takeaways

When processing authorized agent requests to Opt-Out of Sale/Sharing or Right to Limit, avoid directly confirming with the consumer or verifying the identity of the authorized agent (the latter is also permitted in respect of requests to delete, correct and know). Keep in mind that what agents may request, and agent authorization and verification standards, differ from state-to-state.

Failure to provide “symmetry in choice” in its cookie management tool
The Order alleges that, for a consumer to turn off advertising cookies on the Company’s website (cookies which track consumer activity across different websites for cross-context behavioral advertising and therefore require an Opt-out of Sale/Sharing), consumers must complete two steps: (1) click the toggle button to the right of Advertising Cookies and (2) click the “Confirm My Choices” button.

The Order compares this opt-out process to that for opting back into advertising cookies following a prior opt-out. There, the Agency alleged that if consumers return to the cookie management tool (also known as a consent management platform or “CMP”) after turning “off” advertising cookies, an “Allow All” choice appears. This is likely a standard configuration of the CMP that can be modified to match the toggle and confirm approach used for opt-out. Thus, the CPPA alleged, consumers need only take one step to opt back into advertising cookies when two steps are needed to opt-out, in violation of and express requirement of the CCPA to have no more steps to opt-in than was required to opt-out.

The Agency took issue with this because the CCPA requires businesses to implement request methods that provide symmetry in choice, meaning the more privacy-protective option (e.g., opting-out) cannot be longer, more difficult or more time consuming than the less privacy protective option (e.g., opting-in).
The Agency also addressed the need for symmetrical choice in the context of “website banners,” also known as cookie banners, pointing to an example cited as insufficient symmetry in choice from the CCPA regulations – i.e., using “’Accept All’ and ‘More Information,’ or ‘Accept All’ and ‘Preferences’ – is not equal or symmetrical” because it suggests that the company is seeking and relying on consent (rather than opt-out) to cookies, and where consent is sought acceptance and acceptance must be equally as easy to choose. The CCPA further explained that “[a]n equal or symmetrical choice” in the context of a website banner seeking consent for cookies “could be between “Accept All” and “Decline All.”” Of course, under CCPA consent to even cookies that involve a Share/Sale is not required, but the Agency is making clear that where consent is sought there must be symmetry in acceptance and denial of consent.
The CPPA’s Order also details other methods by which the company should modify its CCPA requests procedures including:

separating the methods for submitting sale/share opt-out requests and sensitive PI limitation requests from verifiable consumer requests (e.g., requests to know, delete, and correct);
including the link to manage cookie preferences within the Company’s Privacy Policy, Privacy Center and website footer; and
applying global privacy control (“GPC”) preference signals for opt-outs to known consumers consistent with CCPA requirements.

Practical Takeaways

It is unclear whether the company configured the cookie management tool in this manner deliberately or if the choice of the “Allow All” button in the preference center was simply a matter of using a default configuration of the CMP, a common issue with CMPs that are built off of a (UK/EU) GDPR consent model. Companies should pay close attention to the configuration of their cookie management tools, including in both the cookie banner (or first layer), if used, and the preference center, and avoid using default settings and configurations provided by providers that are inconsistent with state privacy laws. Doing so will help mitigate the risk of choice asymmetry presented in this case, and the risks discussed in the following three bullets.
State privacy laws like the CCPA are not the only reason to pay close attention and engage in meticulous legal review of cookie banner and preference center language, and proper functionality and configuration of cookie management tools.
Given the onslaught of demands and lawsuits from plaintiffs’ firms under the California Invasion of Privacy Act and similar laws – based on cookies, pixels and other tracking technologies – many companies turn to cookie banner and preference center language to establish an argument for a consent defense and therefore mitigate litigation risk. In doing so it is important to bear in mind the symmetry of choice requirements of state consumer privacy laws. One approach is to make it clear that acceptance is of the site terms and privacy practices, which include use of tracking by the operator and third parties, subject to the ability to opt-out of some types of cookies. This can help establish consent to use of cookies by using the site after notice of cookie practices, while not suggesting that cookies are opt-in, and having lack of symmetry in choice.
In addition, improper wording and configuration of cookie tools – such as providing an indication of an opt-in approach (“Accept Cookies”) when cookies in fact already fired upon the user’s site visit, or that “Reject All” opts the user out of all, including functional and necessary cookies that remain “on” after rejection – present risks under state unfair and deceptive acts and practices (UDAAP) and unfair competition laws, and make the cookie banner notice defense to CIPA claims potentially vulnerable since the cookies fire before the notice is given.
Address CCPA requirements for GPC, linking to the business’s cookie preference center, and separating methods for exercising verifiable vs. non-verifiable requests. Where the business can tie a GPC signal to other consumer data (e.g., the account of a logged in user), it must also apply the opt-out to all linkable personal information.
Strive for clear and understandable language that explains what options are available and the limitations of those options, including cross-linking between the CMP for cookie opt-outs and the main privacy rights request intake for non-cookie privacy rights, and explain and link to both in the privacy policy or notice.
Make sure that the “Your Privacy Choices” or “Do Not Sell or Share My Personal Information” link gets the consumer to both methods. Also make sure the opt-out process is designed so that the required number of steps to make those opt-outs is not more than to opt-back in. For example, linking first to the CMP, which then links the consumer rights form or portal, rather than the other way around, is more likely to avoid the issue with additional steps just discussed.

Failure to produce contracts with advertising technology companies
The Agency’s Order goes on to allege that the Company did not produce contracts with advertising technology companies despite collecting and selling/sharing PI via cookies on its website to/with these third parties. The CPPA took issue with this because the CCPA requires a written contract meeting certain requirements to be in place between a business and PI recipients that are a CCPA service provider, contractor or third party in relation to the business. We have seen regulators request copies of contracts with all data recipients in other enforcement inquiries.
Practical Takeaways

Vendor and contract management are a growing priority of privacy regulators, in California and beyond, and should be a priority for all companies. Be prepared to show that you have properly categorized all personal data recipients and have implemented and maintain processes to ensure proper contracting practices with vendors, partners and other data recipients, which should include a diligence and assessment process to ensure that the proper contractual language is in place with the data recipient based on the recipient’s data processing role. To state it another way, it may not be proper as to certain vendors to simply put in place a data processing agreement or addendum with service provider/processor language. For instance, vendors that process for cross-context behavioral advertising cannot qualify as a service provider/contractor. In order to correctly categorize cookie and other vendors as subject to opt-out or not, this determination is necessary.
Attention to contracting is important under the CCPA in particular because different language is required depending on whether the data recipient constitutes a “third party,” “service provider” or a “contractor,” the CCPA requires different contracting terms be included in the agreements with each of those three types of personal information recipients. Further, in California, the failure to have all of the required service provider/contractor contract terms will convert the recipient to a third party and the disclosure into a sale.

Conclusion
This case demonstrates the need for businesses to review their privacy policies and notices, and audit their privacy rights methods and procedures to ensure that they are in compliance with applicable state privacy laws, which have some material differences from state-to-state. We are aware of enforcement actions in progress not only in California, but other states including Oregon, Texas and Connecticut, and these states are looking for clarity as to what specific rights their residents have and how to exercise them. Further, it can be expected that regulators will start, potentially in multi-state actions that have become common in other consumer protection matters, looking beyond obvious notice and rights request program errors to data knowledge and management, risk assessment, minimization and purpose and retention limitation obligations. Compliance with those requirements requires going beyond “check the box” compliance as to public facing privacy program elements and to the need to have a mature, comprehensive and meaningful information governance program.

Supreme Court Establishes Lower Pleading Standard for Prohibited Transaction Claims

In a unanimous decision, the U.S. Supreme Court ruled in Cunningham v. Cornell University that plaintiffs can satisfy the requirements for pleading prohibited party-in interest transactions under ERISA section 406(a) without alleging facts disproving the availability of a statutory exemption for such transactions, such as where no more than reasonable compensation is paid for necessary services. No. 23-1007 (U.S. Apr. 17, 2025). As a result, plaintiffs may be able to withstand motions to dismiss such claims even where the underlying pleadings are found insufficient to sustain a fiduciary breach claim based on the same conduct. Recognizing the risks posed by potentially frivolous claims proceeding into discovery, the Supreme Court coupled its ruling with specific advice as to how district courts can mitigate these risks.
Lower Court Proceedings
As explained in a previous post, the case was brought by participants in two Cornell University retirement plans, who alleged that plan fiduciaries breached their fiduciary duties of prudence and loyalty and caused the plans to engage in prohibited transactions by: (i) offering certain investment products in the plans; (ii) failing to monitor and offer appropriate investment options; and, relevant here, (iii) failing to monitor and control recordkeeping fees paid to a third-party service provider. Plaintiffs’ prohibited transaction claim regarding recordkeeping fees was brought under section 406(a) of ERISA, which provides that a fiduciary may not cause a plan to enter into certain transactions with a party in interest if he knows or should know that the transaction constitutes a furnishing of goods or services. Section 408 of ERISA contains various exemptions for otherwise prohibited transactions, including one in subsection (b)(2) permitting contracts between plans and service providers for necessary services for no more than reasonable compensation.
The district court dismissed or granted summary judgment to defendants on all but one of plaintiffs’ claims, which the parties later resolved through a settlement. The Second Circuit affirmed. With respect to the prohibited transaction claim based on the plans’ recordkeeping fees, the Second Circuit held that to survive a motion to dismiss, plaintiffs must plead that a transaction “was unnecessary or involved unreasonable compensation” such that it was not exempt under ERISA section 408(b)(2). In so holding, the Second Circuit took a position like that of the Third, Seventh, and Tenth Circuits, which all have required plaintiffs to plead something more than the bare elements of a prohibited transaction claim, such as allegations of self-dealing. Its ruling conflicted, however, with a ruling in the Eighth Circuit that the availability of a statutory exemption is an affirmative defense not properly considered at the pleading stage.
The Supreme Court’s Opinion
The Supreme Court, in a unanimous opinion written by Justice Sotomayor, reversed and remanded the Second Circuit’s decision. The Court resolved the existing circuit split by holding that plaintiffs need only plausibly allege the basic elements of a prohibited transaction claim to overcome a motion to dismiss. The Court held that section 406(a)(1)(C)’s prohibition on a furnishing of services between a plan and a party in interest is “categorical,” and does not carve out transactions that are necessary or for reasonable compensation. Relying primarily on ERISA’s structure, the Court found that the statutory exemptions are affirmative defenses for which defendants bear the burden of proof, and thus do not impose any additional pleading requirements. Accordingly, the Court rejected Cornell’s argument (embraced by the Second Circuit) that the exemptions are incorporated into section 406.
In so ruling, the Court took note of the “serious concerns” that requiring plaintiffs to plead merely that the plan contracted with a service provider would lead to “an avalanche of meritless litigation” and subject defendants to costly discovery in every case. But the Court concluded that these concerns could not overcome ERISA’s text and structure, which provide the exemptions in the “orthodox format of an affirmative defense.” The Court stated these concerns could be mitigated by other procedural safeguards, such as: Article III’s injury-in-fact requirement; the district court’s ability to require plaintiffs to reply to an answer under Federal Rule of Civil Procedure 7; and the district court’s ability to impose attorneys’ fees or sanctions. In a concurring opinion joined by Justices Thomas and Kavanaugh, Justice Alito recognized that “untoward practical results” were likely to flow from the Court’s decision, and suggested that the potential requirement of replies to answers under Rule 7 was “[p]erhaps the most promising” of the alternative safeguards available.
Proskauer’s Perspective
As both the Supreme Court’s opinion and the concurrence acknowledged, the pleading bar set in Cunningham gives rise to increased risks of litigation and higher settlement costs to any plan that outsources plan management services to a third-party provider. And, as Justice Alito recognized, it “remains to be seen” whether the Court’s suggested procedural safeguards will “adequately address” these concerns. Until now, Rule 7 has not been commonly invoked in ERISA cases, but the Court’s invitation will likely prompt an increased resort to that procedural device. In the face of this lower pleading standard, courts must be prepared to more aggressively manage litigation so that the ability to plead a bare-boned prohibited transaction claim does not become a cudgel to extract unwarranted settlement payments.
District courts might also wish to consider permitting early, targeted discovery on the reasonableness of the fees paid to service providers, as a means of facilitating early motions for summary judgment. Conceivably, a trend in this direction could work to the advantage of plan sponsors and fiduciaries, in that it could lead to surgical discovery approaches to address other discrete factual issues, such as whether the plaintiffs have satisfied Article III’s injury-in-fact requirement; or whether, notwithstanding any procedural imprudence alleged, there was no basis for a claim because the challenged decisions were objectively prudent.

Let the Shakedowns Begin: Tax False Claims Legislation in California

Legislators in Sacramento, California, are mulling over one of the most (if not the most) troubling state and local tax bills of the past decade.
Senate Bill (SB) 799, introduced earlier this year and recently amended, would expand the California False Claims Act (CFCA) by removing the “tax bar,” a prohibition that exists in the federal False Claims Act (FCA) and the vast majority of states with similar laws.
If enacted, SB 799 will open the floodgates for a cottage industry of financially driven plaintiffs’ lawyers to act as bounty hunters in the state and local tax arena. California taxpayers would be forced to defend themselves in high-stakes civil investigations and/or litigation – even when the California Attorney General’s Office declines to intervene. As seen in other states, this racket leads to abusive practices and undermines the goal of voluntary compliance in tax administration.
While the CFCA is intended to promote the discovery and prosecution of fraudulent behavior, Senator Ben Allen introduced the bill specifically to “protect public dollars and combat fraud.” The enumerated list of acts that lead to a CFCA violation does not require a finding of civil fraud. In fact, a taxpayer who “knowingly and improperly avoids, or decreases an obligation to pay or transmit money or property to the state or to any political subdivision” would be in violation of the CFCA (See Cal. Gov’t Code § 12651(a)(7)).
This standard is particularly inappropriate in the tax context and is tantamount to allowing vague accusations of noncompliance with the law, leading to taxpayers being hauled into court. Once there, taxpayers would be held hostage between an expensive legal battle and paying an extortion fee to settle. The CFCA is extremely punitive: Violators would be subject to (1) treble damages (i.e., three times the amount of the underreported tax, interest, and penalties), (2) an additional civil penalty of $5,500 to $11,000 for each violation, plus (3) the costs of the civil action to recover the damages and penalties (attorneys’ fees).
To the extent the action was raised by a private plaintiff (or relator) in a qui tam action, the recovered damages or settlement proceeds would be divided between the state and the relator, with the relator permitted to recover up to 50% of the proceeds (Cal. Gov’t Code § 12652(g)(3)). If the state attorney general or a local government attorney initiates the investigation or suit, a fixed 33% of the damages or settlement proceeds would be allotted to their office to support the ongoing investigation and prosecution of false claims (Cal. Gov’t Code § 12652(g)(1)).
Adding further insult to injury, the CFCA has its own statute of limitations independent of the tax laws. Specifically, the CFCA allows claims to be pursued for up to 10 years after the date the violation was committed (Cal. Gov’t Code § 12654(a)). A qui tam bounty hunter’s claim would supersede the tax statutes of limitations.
Next, the elements of a CFCA violation must only be shown “by a preponderance of the evidence” (Cal. Gov’t Code § 12654(c)). The common law burden of proof for fraud is by “clear and convincing evidence,” a much higher bar.
Absent amendments, SB 799 would put every significant California taxpayer in jeopardy when the taxpayer takes a legitimate tax return position on a gray area of the state or local tax law, even when the position was resolved through the California Department of Tax and Fee Administration, the California State Board of Equalization, the California Franchise Tax Board, or a local government. Settlement agreements, voluntary disclosure agreements, and audit closing agreements all would be disrupted if the attorney general or a plaintiff’s lawyer believes the underlying tax dispute or uncertainty is worth pursuing under the CFCA.
In countless cases in Illinois and New York, we have seen companies face False Claims Act shakedowns after the company already had been audited, had entered into a settlement with the state, or when the tax statute of limitations had long closed. SB 799 would bring the horrors experienced in Illinois and New York to taxpayers doing business in California.
Fundamentally, SB 799 threatens to open the litigation floodgates and undermine the authority of California tax administrators, putting tax administration in the hands of profit-seeking “whistleblower” bounty hunters. The goal of motivating whistleblowers and addressing tax fraud can be accomplished by simply adopting (and funding) a tax whistleblower program similar to the very successful programs offered by the Internal Revenue Service and many other states.
Ideally, SB 799 will be rejected in full or deferred for further consideration by an interim/study committee. With this in mind, the following amendments are essential to prevent the most severe abuses that stem from the CFCA’s application to tax.

Bring qui tam suits without government involvement. Eliminating the ability of private plaintiffs to bring qui tam suits without the involvement of the attorney general would significantly reduce the number of frivolous claims and give the state its sovereign right to decide whether a claim should be pursued under the CFCA. If this amendment is not accepted, companies that introduce new technology and innovative products will be at the greatest risk of being targeted for qui tam It is always the case that tax law does not keep up with technological advances. Thus, the gray areas of tax law will be most present for high-tech taxpayers.
Protect reasonable, good-faith tax positions. Companies should not be liable under the CFCA merely for taking a reasonable return position or otherwise attempting to comply with a reasonable interpretation of law. CFCA exposure should be limited to cases of specific intent to evade tax, proven by clear and convincing evidence. Tax law is notoriously murky, and good-faith disputes are what keep lawyers and accountants employed worldwide.
Defer to existing tax statutes. The CFCA should not override the California Revenue and Taxation Code provisions governing statutes of limitation or burden of proof.
Apply prospectively only. The CFCA should be limited in application to prospective matters (i.e., claims for taxable years beginning on or after January 1, 2026) to avoid retroactive liability and constitutional risk.

Additionally, there is an emerging body of caselaw involving the federal FCA, holding it violates the separation of powers under the US Constitution. Justice Thomas, in a dissent, suggested that the federal FCA might be unconstitutional because it transfers executive power to the private sector. A district court in Florida recently dismissed a qui tam action brought under the federal FCA on similar grounds. The California Constitution is structured like the US Constitution in this regard, with executive power vested in the governor and the attorney general serving as the chief law enforcement officer (See Cal. Const. art. V, §§ 1, 13). The qui tam provisions of the existing CFCA transfer these powers to private actors with no political accountability. It is likely these qui tam provisions of the CFCA similarly violate the California Constitution.

Compliance with Labor and Wage Laws Critical to Avoid Crippling Fines and Statutory Penalties by the New York State Department of Labor

Running a profitable small business in New York State is no easy task. Juggling finances, employee relations, and the day-to-day operations has become increasingly difficult in a turbulent, uncertain economy. And that is why being conscious of New York State’s labor and wage laws, which are often nuanced and confusing, is critical. A failure, even if unintentional, to abide by the state’s labor and wage laws could result in an unanticipated audit by the New York State Department of Labor (NYSDOL), and the fines that may follow from that audit could be described as shocking and crippling.
These failures, which are subject to a NYSDOL audit, could be unintentional, but in some instances, the NYSDOL will treat genuine mistakes much like it will treat intentional errors. For instance, if a business mistakenly pays an employee the incorrect overtime rate or neglects to meet the weekly salary threshold for overtime-exempt employees per state law, then the business may be subject to an audit from the NYSDOL. An honest mistake like this could be dangerously costly – well beyond what it would take to make the employee “whole.”
Penalties under the NYSDOL Audit
Under Labor Law §219, the NYSDOL has the ability to direct payment for interest on all wages owed, which is currently set to 16 percent via Banking Law §14-a. That, unfortunately, is just the tip of the iceberg.
Should the NYSDOL audit uncover that an employer owed wages to employees, it will seek to assess liquidated damages pursuant to Labor Law §218. These amounts could be devastating depending on the circumstances. The statute allows for damages of up to 100 percent of the unpaid wages “plus the appropriate civil penalty.” Labor Law §§198 (1-a) and 662 (2) provide that liquidated damages shall be assessed unless the employer provides a good faith basis for believing that the underpayment was in compliance with the law. The civil penalty can be just us much as the wages owed – or, in the worst cases, up to 200 percent of the wages owed.
The NYSDOL is technically supposed to consider statutory factors pursuant to Labor Law §218 (1) before assessing civil penalties, including “size of the employer’s business, the good faith basis of the employer to believe that its conduct was in compliance with the law, the gravity of the violation, the history of previous violations and, in the case of wages, benefits or supplements violations, the failure to comply with record-keeping or other non-wage requirements.” 
Example Cases
But what does this look like in practice? Let’s take as an example In the Matter of Port Café, a New York State Industrial Board of Appeals (IBA) decision from December 2024. In that case, the NYSDOL found that Port Café owed $174,757.91 in unpaid wages. On top of those wages, the NYSDOL assessed 100 percent of liquidated damages – so another $174,757.91 – along with a civil penalty in the amount of another $174,757.91, increasing the total amount owed to approximately $690,500. Luckily (if you can say that) for the business in Port Café, the IBA affirmed the liquidated damages but revoked the civil penalties due to the company’s “size … good faith of the employer, gravity and type of monetary violations.” Port Café is a cautionary tale.
Once you are subject to a NYSDOL audit, there is a real cause for concern that the NYSDOL will assess damages and penalties that far exceed the amount of unpaid wages – sometimes up to 200 percent more. As hard as it is to believe, much of a NYSDOL decision to assess these extreme penalties is discretionary. The NYSDOL advises that it will give consideration to the size of a business, the good faith of the employer, and other factors, but some businesses still end up better off than others. The business in Port Café resorted to challenging the 200 percent of civil penalties with the IBA, which ultimately agreed that these penalties were excessive, but other times the IBA has affirmed these penalties. 
In In the Matter of the Petition of Lookman Afolayan and Buka NY Corp, a June 2021 IBA decision, the business was subject to a NYSDOL audit that found unpaid wages amounting to $27,851.75. Even with the considerations as discussed above (e.g., size of business), the NYSDOL assessed 100 percent liquidated damages and 100 percent civil penalties – raising the amount owed to an astonishing $116,138.77. What was once a somewhat manageable amount to be owed by this business had snowballed into devastating fines and penalties.
Takeaways
With all of that said – and with the “bad news” aside – what should a business do if it is subject to a NYSDOL audit? An attorney can help guide the next steps, including gathering documentation that is responsive to the NYSDOL audit and ensuring “good faith” compliance so that the business has a stronger likelihood of avoiding the fullest extent of statutory liquidated damages and civil penalties. If penalties have already been assessed, having an attorney evaluate the totality of the audit and how the discretionary factors were applied by the NYSDOL, if at all, is critical to potentially reducing the damages owed on appeal.
Being subject to a NYSDOL audit and the potential statutory penalties is undoubtedly an uncomfortable and costly scenario, and the best way to dodge this situation is to comply with the relevant New York State wage and labor laws. Small miscalculations and errors could result in harsh penalties – and the one true way to avoid it altogether is to properly follow each applicable labor and wage law in New York State. This includes the overtime laws, the exemption laws, and the child labor laws, to name a few. An attorney can assist with assessing the applicability of these laws to a business to confirm compliance, and while that may appear painstaking, it is a way to safeguard compliance with the law to avoid an unexpected NYSDOL audit and the excruciating penalties that may follow.