Business

Virginia Becomes 2nd State to Pass Comprehensive Data Privacy Law

Posted on by Gavin Law Offices

On March 2nd, Governor Ralph Northam signed into law the Consumer Data Protection Act (“CDPA”), making Virginia the second state to enact comprehensive data privacy legislation.  The new law, which will go into effect on January 1, 2023, combines concepts from the California Consumer Privacy Act (“CCPA”) and California Privacy Rights Act (“CPRA”), as well as Europe’s General Data Protection Regulation (“GDPR”).  The CDPA grants numerous rights to residents of the Commonwealth to provide them with greater control over their personal data, and places new obligations upon covered businesses.  Specifically, the law gives Virginia residents (“consumers”) the right to access, correct, delete, and obtain a copy of their personal data, as well as the right to opt out of the sale or processing of their personal data by covered businesses for purposes of “targeted advertising.”[1]  The CDPA broadly defines “personal data” as “any information that is linked or reasonably linkable to an identified or identifiable natural person,” and excludes de-identified data or publicly available information.  Virginia’s new law also creates a special sub-category for “sensitive data” that includes: “(1) personal data revealing racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, or citizenship or immigration status; (2) the processing of genetic or biometric data for the purpose of uniquely identifying a natural person; (3) the personal data collected from a known child; or (4) precise geolocation data.”

Who is Covered?

The CDPA applies to businesses, whether physically located in Virginia or not, that conduct business in or target residents of the Commonwealth, and that either: (1) control or process the personal data of at least 100,000 consumers, or (2) derive over 50 percent of their gross revenue from the sale of personal data and control or process the personal data of at least 25,000 consumers.  In addition to excluding small business from its scope, Virginia’s law includes several other exemptions and provisions making it generally more business-friendly than Europe’s and California’s laws.   For example, the CDPA excludes non-profit organizations and institutions of higher education, as well as businesses that meet the above thresholds but are already subject to federal privacy laws such as the Gramm-Leach-Bliley Act and HIPPA.[2]  The law also defines “consumer” as “a natural person who is a resident of the Commonwealth acting only in an individual or household context. It does not include a natural person acting in a commercial or employment context.”  While California passed temporary business-to-business (“B2B”) and employment-related exemptions to lessen the burden of businesses’ compliance with the CCPA, the Virginia law considers and includes built-in exceptions for these types of personal data.

Requirements for Covered Businesses

Businesses subject to the provisions of the CDPA will need to develop processes to allow consumers to exercise the above-mentioned rights.  Covered businesses should also prepare to comply with the following obligations under the new law:

  1. The requirement that covered businesses provide a reasonably accessible, clear, and meaningful privacy notice (often referred to as a “privacy policy”) that includes specific information as outlined by the law.
  2. The requirement that covered businesses considered “controllers” put contracts in place with third party “processors” of personal data containing specific provisions related to the handling of consumers’ personal data.[3] Thus, businesses subject to the CDPA should adopt standard contractual language to include in any agreements with vendors that will touch personal data.
  3. The requirement that covered businesses limit the collection of personal data to what is “adequate, relevant, and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer,” and that such businesses “establish, implement, and maintain reasonable administrative, technical, and physical data security practices to protect the confidentiality, integrity, and accessibility of personal data.”[4]
  4. The requirement that covered businesses conduct and document a formal “data protection assessment.” The assessment must include specific information related to businesses’ processing of personal data.  The Office of Attorney General may request a copy of a business’s data protection assessment under its investigative authority (which, for example, is likely to occur during its investigation into a covered business’s data breach).
  5. The requirement that covered businesses obtain affirmative consent from consumers before collecting and using “sensitive data.” Because affirmative consent is not currently required under California’s data privacy laws, many covered businesses will likely need to consider how they will obtain such consent and if/why they are processing sensitive data, specifically.

Enforcement

The CDPA will be enforced by Virginia’s Office of the Attorney General, which will have investigative authority and may seek injunctions and/or impose civil penalties of up to $7,500 per infraction for covered businesses that violate the law.  Any penalties and fees collected will go into a “Consumer Privacy Fund” used to support the work of the Office of the Attorney General to enforce the provisions of the CDPA.  Like the CCPA, Virginia’s new law also provides for a 30-day cure period for violations.  However, quite notably and unlike the CCPA, the CDPA does not include any private right of action.  Further, while the Virginia law does not contain language regarding rulemaking authority or procedures, it creates a “work group” to review the CDPA and issues related to its implementation.[5]  The work group’s findings, best practices, and recommendations regarding the implementation of the CDPA shall be submitted to the Chairmen of the Senate Committee on General Laws and Technology and the House Committee on Communications, Technology and Innovation no later than November 1, 2021.

Generally, the CDPA avoids several areas of uncertainty that lawmakers and California’s Attorney General, as well as covered businesses seeking to comply, encountered during the rollout of the CCPA.  Thus, Virginia’s law may provide a clearer model for consumers and businesses to follow, as well as for other states and possibly the federal government when developing their own data privacy legislation.  Gavin Law Offices, PLC will continue to monitor updates regarding the CDPA and other U.S. data privacy laws.

(This blog post is not intended as legal advice.  Please contact us for more information and assistance regarding your particular situation.)

[1] “Targeted advertising” means displaying advertisements to a consumer where the advertisement is selected based on personal data obtained from that consumer’s activities over time and across nonaffiliated websites or online applications to predict such consumer’s preferences or interests.  “Targeted advertising” does not include: (1) Advertisements based on activities within a controller’s own websites or online applications; (2) Advertisements based on the context of a consumer’s current search query, visit to a website, or online application; (3) Advertisements directed to a consumer in response to the consumer’s request for information or feedback; or (4) Processing personal data processed solely for measuring or reporting advertising performance, reach, or frequency.

[2] This language is considerably more favorable for businesses than a similar exception under the CCPA, which applies to only “personal information” collected, processed, sold, or disclosed pursuant to a specified federal law such as GLBA or HIPPA, and does not exclude the entity as a whole like the new Virginia law.

[3] Under the CDPA, “controller” means the natural or legal person that, alone or jointly with others, determines the purpose and means of processing personal data.  Meanwhile, “processor” means a natural or legal entity that processes personal data on behalf of a controller.  Both terms will be familiar to those acquainted with data privacy legislation, as they are borrowed from the GDPR.

[4] This “reasonable” safeguard standard is also included in the CCPA/CPRA and the GDPR.  The CDPA also includes language that “such data security practices shall be appropriate to the volume and nature of the personal data at issue.”  Thus, like existing data privacy law, Virginia’s will allow businesses to determine their own “reasonable” security practices and does not obligate covered businesses to put in place any specific data security measures.

[5] Specifically, the “Chairman of the Joint Commission on Technology and Science shall create a work group composed of the Secretary of Commerce and Trade, the Secretary of Administration, the Attorney General, the Chairman of the Senate Committee on Transportation, representatives of businesses who control or process personal data of at least 100,000 persons, and consumer rights advocates.”  Interestingly, this does not include representatives of businesses who derive over 50 percent of their gross revenue from the sale of personal data and control or process the personal data of at least 25,000 consumers.

 

–  Courtney Reigel, Esq.

Clarifying Non-Compete Law in Virginia

Posted on by Gavin Law Offices

In 2020, Virginia passed legislation creating prohibitory rules regarding noncompete agreements. This statute follows several other states which have created similar laws. In Virginia, employers cannot enforce noncompete agreements against low-wage employees. To fully understand and know what next steps to take for you or your business, let’s take a closer look.

This statute prohibits any agreement that “restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer” (§ 40.1-28.7:8). This means there is potential to affect noncompete provisions in employment agreements, standalone restrictive covenants, and separation agreements. It does not prohibit confidentiality agreements and nondisclosure agreements.

What exactly is “low-wage”?

The term “low-wage employee” is a bit of a misnomer because it includes around half of VA employees. The statute defines low-wage employees as anyone who receives less than the average weekly wage per VA Employment Commission. This number will be updated quarterly and is subject to change but is currently approximately $59,124/year or $1,137/week. Low-wage employees also include “interns, students, apprentices, or trainees employed, with or without pay, at a trade or occupation in order to gain work or educational experience” (§ 40.1-28.7:8).

Another important aspect for employers is penalties for violation. A qualifying employee may sue an employer for violating or attempting to violate this law. The employee may receive “all appropriate relief” (§ 40.1-28.7:8) which may include:

  1. An injunction against the employer
  2. Liquidated damages
  3. Lost compensation
  4. Reasonable attorney’s fees and costs, including fees for expert witnesses

What employers can do:

Luckily, there are some measures that employers can take to avoid violation, provide a fair working environment, and still protect their professional interests. An easy first step is to post a copy or approved summary of the statute with other required employment notices. Employers must also take the time to review form non-compete agreements (and other restrictive covenants) to ensure compliance. Non-compete agreements for employees other than “low-wage employees” are enforceable if the employer can show that they are:

  1. Narrowly drafted to protect legitimate business interest
  2. Not unduly burdensome on the employee’s ability to earn a living
  3. Not against public policy

Due to other provisions of note not explored in this post, be sure to contact Gavin Law Offices for more information.  We continually monitor recent non-compete and trade secret legislation to better serve you and your business.

(This is not intended as legal advice. Contact a lawyer for assistance in your particular situation.)

 

U.S. Trademark Office to Increase Filing Fees for 2021

Posted on by Gavin Law Offices

The United States Trademark Office recently announced that it will increase a number of its filing fees on January 2, 2021.  The increases apply to a wide variety of filings, including the fees for initial trademark applications.  We have included the most noteworthy increases below:

  • TEAS Standard Trademark Application: $350 per class
    Up from $275 per class
  • TEAS Plus Trademark Application (pre-approved goods and services): $250 per class
    Up from $225 per class
  • Section 8 (filed with both 8 & 15 and Renewal filings): $225 per class
    Up from $125 per class 
  • Petition to cancel/Notice of opposition filed through ESTTA: $600 per class
    Up from $400 per class
  • Initial 90-day extension requests for filing a notice of opposition, or second 60-day extension requests for filing a notice of opposition, filed through ESTTA: $200 per application
    Up from $100 per application
  • Petition to the Director filed through TEAS: $250
    Up from $100 

For the full list of fee increases, please visit: https://www.uspto.gov/trademark/laws-regulations/updated-trademark-ttab-fees-processes.

The U.S. Trademark Office will also implement a new fee for deleting goods, services, and/or classes from a registration after submitting a Section 8 declaration, but before the declaration is accepted, at a rate of $250 per class.

In light of the increased filing costs, Gavin Law Offices will work with clients who wish to take advantage of the lower filing fees to complete filings before the end of the year.  If you are considering a new trademark application or have maintenance filings due in the next year, we can help you complete such filings before January 2, 2021.  Please reach out as early as possible to ensure that we have enough time to get preclearance and/or the necessary documentation completed before the increase date.

  • – Rina Van Orden, Esq.

U.S. Data Privacy Law – 2020 Update 

Posted on by Gavin Law Offices

By now, many of you have likely heard of the California Consumer Privacy Act (the “CCPA”).  The law, passed by California’s State Legislature in 2018, became effective on January 1, 2020.  The CCPA gives California residents more control over the personal information that businesses collect about them, granting residents the right to know how businesses use/share their personal information, the right to request that a business delete their collected personal information, and the right to opt-out of the sale of their personal information.  The CCPA borrows many of its provisions from the European Union’s General Data Protection Regulation (“GDPR”).  While many believed that the GDPR (adopted by the EU in 2016) would serve as a catalyst for the United States to enact a similar data privacy law, the U.S. has yet to pass, or even seriously consider, any comparably comprehensive data privacy legislation at the national level.  

While several other states have passed data privacy and protection laws since 2018, arguably none have enacted laws as extensive as the CCPA.  However, due to revisions California’s legislature made to the original text of the CCPA, as well as certain language included in the Final CCPA Regulations published by California’s Office of the Attorney General (OAG) earlier this year, many Californians and consumer advocacy groups do not believe the CCPA goes far enough to protect consumers’ personal information.  Thus, on election day this year, California voters approved ballot initiative “Proposition 24” – the California Privacy Rights Act of 2020 (the “CPRA”).  The CPRA gives additional rights to California residents and further limits businesses ability to use/sell/share personal information, amending and expanding upon the CCPA.   

Most of the CPRA’s substantive provisions will not become effective until January 1, 2023.  However, businesses may begin preparing for compliance with the CPRA by familiarizing themselves with the following highlights of the new law: 
  1. Applicability – Just because the CCPA was or was not applicable to your business does not mean the same for the CPRA.  For example, the CPRA will cover businesses that buy, sell, or share over 100,000 consumers’ personal information (up from 50,000 under the CCPA), reducing the applicability of the law to small and midsize businesses. 
  1. Enforcement – The CCPA is currently enforced by California’s Office of the Attorney General (OAG).  However, the CPRA establishes the California Privacy Protection Agency, which will have investigative, enforcement, and rulemaking powers instead of the OAG.  The CPRA also removes the 30-day cure period businesses have under the CCPA and increases maximum penalties for violations concerning minors. 
  1. New category of “sensitive personal information” – The CPRA will keep the existing categories of personal information defined in the CCPA, but will add a new category for “sensitive personal information.”  Californians will have increased rights when their sensitive personal information is involved.  
  1. Expanded contractual requirements – The CPRA limits the use of personal information by service providers and contractors and adds contractual requirements regarding relationships between businesses and such third parties.   
  1. Modifying/adding new consumer rights – New rights include the CPRA’s expansion of an individuals’ private right of action for certain types of data breaches and requires that covered businesses provide consumers with two or more methods for submitting requests to correct inaccurate personal information.  
  1. Regulates “sharing” in addition to “selling” personal information, to include cross-context behavioral advertising – The CPRA expands upon the CCPA’s limitations on businesses’ “sale” of consumers’ personal information to cover the “sharing” of consumers’ personal information even if such information is not being sold for monetary value.  Specifically, this will regulate “cross-context behavioral advertising,” defined by the CPRA as “the targeting of advertising to a consumer based on the consumer’s personal information obtained from the consumer’s activity across businesses, distinctly branded websites, applications, or services, other than the business, distinctly-branded website, application, or service with which the consumer intentionally interacts.”  Businesses that share personal information, including in the cross-context behavioral advertising context, will need to provide an opt-out choice for consumers, such as “Do Not Sell/Do Not Share My Personal Information for Cross-Context Behavioral Advertising.”    

The above highlights, as well as the other provisions of the CPRA, bring California’s data privacy laws closer to resembling the GDPR.  It will be interesting to see whether other states follow suit in 2021.  While Virginia established a task force to study data privacy issues last General Assembly session, it has not yet passed any data privacy law as comprehensive as the CCPA/CPRA.  The Commonwealth, as well as numerous other states, will likely consider data privacy legislation next year. 

In the meantime, while the effective date of the CPRA may seem far away, California’s OAG continues to publish updates to the CCPA Regulations and to enforce existing law.  For example, while the Final Text of the CCPA Regulations was published in August, the OAG released a fourth set of modifications to the Regulations on December 10, 2020.  The latest modifications include further clarifications on the CCPA, including much-awaited guidance on the “Do Not Sell My Personal Information ‘Button.’”  Thus, businesses still need to regularly review their CCPA compliance while they prepare for the CPRA.  You can find more information on the CCPA, including updates, here: https://www.oag.ca.gov/privacy/ccpa.  Gavin Law Offices will continue to track data privacy-related issues in California, Virginia, and across the U.S. and abroad, and are here to help you navigate this complex field of law. 

– Courtney Reigel, Esq.

 

For more information on our data privacy experience and services, click here.