Week in Review

IN THE NEWS

• President Biden signed a bill into law that requires the Chinese company Bytedance to divest from TikTok within nine months. Under the law, Bytedance must give up its control of the social media app, the app will be banned from U.S. app stores. The Chief Executive Office of TikTok, Shou Chew, stated that the company will be challenging the constitutionality of the law. In the same statement, Chew also explained that the ban was “ironic” because “the freedom of expression on TikTok reflects the same American values that make the United States a beacon of freedom.”
• The Federal Trade Commission (FTC) issued a final rule banning noncompete clauses—provisions in employment contracts that restrict certain post-employment competitive activities. The rule prevents employers from entering into any new noncompete agreements and prohibits employers from enforcing existing noncompete agreements, except for employees who are senior executives—workers in a “policy-making position” who earn over $151,164 annually. FTC Chair Lina M. Khan expressed her support for this ban, stating that these clauses “keep wages low, suppress new ideas, and rob the American economy of dynamism.” In response, the U.S. Chamber of Commerce filed a lawsuit against the FTC in Texas, claiming that the FTC overstepped its power by creating this rule.
• The U.S. Department of Education finalized revised Title IX regulations, providing protections for LGBTQ+ students and enhancing safeguards for campus sexual assault survivors. The rule clarifies that Title IX prohibits discrimination based on sexual orientation and gender identity. The rule will replace the “objectively offensive” clause with “severe or pervasive” when defining sexual harassment, as the former pushed some misconduct outside the purview of Title IX. The rule will also remove mandatory live hearings and replace them with optional hearings that carry new limits, as mandatory hearings were criticized for deterring reporting and forcing survivors to confront alleged perpetrators. Protections for transgender athletes, however, were omitted, which commentators attributed to political pressure in an election year.
• The U.S. Supreme Court agreed to hear a challenge to a regulation expanding the definition of “firearm” to include “ghost guns,” which are self-assembled firearms built from kits. In a 2022 regulation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives imposed requirements on manufacturers and sellers of ghost guns, including adding serial numbers, keeping records, and conducting background checks. Last year, the U.S. Court of Appeals for the Fifth Circuit said weapon parts kits are not firearms under the Gun Control Act of 1968. In the petition for certiorari, U.S. Solicitor General Elizabeth B. Prelogar argued that the Fifth Circuit’s interpretation emphasized the danger a “flood of untraceable ghost guns” would pose to the public.
• The U.S. Department of Labor issued a rule extending the entitlement to overtime pay to salaried employees working over 40 hours per week and earning less than $43,888 per year. That threshold salary will increase every three years in line with then-current salary data. The Trump Administration last set the threshold at $35,568 per year. An estimated four million workers will benefit from the rule by January 1. The rule, which goes into effect July 1, is not without controversy, however, as the Labor Department received about 33,000 comments on the rule, with some arguing that the mandatory increase in compensation will harm employees and businesses.
• The U.S. Department of Health and Human Services issued the HIPAA Privacy Rule to Support Reproductive Health Care Privacy, which will limit the disclosure of patients’ reproductive health information by healthcare providers. The regulation is part of an effort to preserve the reproductive rights of women in the aftermath of the overturning of Roe v. Wade. Under the new rule, women traveling across states for reproductive health care will be protected from disclosure of their medical records even if the particular health care they received is banned in their home state.
• The Centers for Medicare and Medicaid Services (CMS) announced a final rule that creates minimum nurse staffing requirements for long-term care (LTC) facilities that receive Medicare and Medicaid funding. The rule requires facilities to provide nearly 3.5 hours of staffing per resident each day and to have at least one registered nurse onsite 24 hours a day, seven days a week. CMS stated that these requirements will “reduce the risk of unsafe and low-quality care for residents across all LTC facilities.” The rule will be introduced in phases, with accommodations for facilities in rural areas and exceptions during workforce shortages.
• Maine Governor Janet Mills signed a bill to protect abortion and gender-affirming health care providers and their out-of-state patients from legal action initiated by other states. In response to the law, attorney generals from 16 other states have threatened Maine with litigation. Opponents of the law cite concerns about children seeking treatment in Maine without parents’ approval. Supporters, however, view the decision as a positive step toward reproductive freedom. Lisa Margulies, the vice president of public affairs at Planned Parenthood Maine Action Fund remarked that “Maine remains a safe harbor for reproductive health care, for providers and the patients they serve.”
• The U.S. Federal Aviation Administration (FAA) announced that air traffic controllers will be required to take at least a 10-hour break between shifts and at least a 12-hour break before overnight shifts, an increase from the previous eight-hour minimum. These guidelines were recommended by an independent panel of experts who studied the risks created by fatigue after hundreds of air traffic controllers complained of staff shortages and overburdened schedules. Although the panel noted that even optimal staffing cannot eliminate the risks created by fatigue, the FAA stated that this scheduling update will enhance both aviation safety and the well-being of air traffic controllers.
• The U.S. Environmental Protection Agency (EPA) announced a final rule that designates two widely used chemicals, perfluorooctanoic acid and perfluorooctanesulfonic acid, as hazardous substances. These chemicals are linked to various health concerns, including birth defects, developmental damage in children, and cancers. EPA designated these chemicals under their Superfund authority, which allows EPA to clean up contaminated sites and to require polluters responsible for the contamination to either perform cleanups or fund EPA-led cleanups. The rule also mandates that entities “immediately report releases” of these chemicals totaling one pound or more within 24 hours and notify buyers of land where these substances have been stored or processed.

WHAT WE’RE READING THIS WEEK

• In an article in the Duke Journal of Constitutional Law & Public Policy, Jolynn Dellinger, a Senior Lecturing Fellow at Duke Law, and Stephanie K. Pell, a fellow in Governance Studies at Brookings, analyzed how current state laws place women at risk of prosecution for having an abortion. For instance, in Georgia, a woman who has an abortion may be prosecuted for murder, since the state recognizes unborn children as human beings, argued Dellinger and Pell. They also explained how prosecutors may use technology to surveil and prosecute women for having abortions. For example, prosecutors could use data from women’s cell phones, such as communications with family and friends, internet searches, and purchases made, as evidence. Dellinger and Pell urged states to clarify their abortion laws and implement “data shield laws” to protect women’s privacy by preventing companies from sharing data with investigators in states prevent companies from turning over data to investigators in states probing abortion-related crimes.
• In an article in the Yale Journal on Regulation, Peter Molk, a Professor of Law at The University of Florida Levin College of Law, and Adriana Z. Robertson, a Professor of Business Law at the University of Chicago, discussed “passive” index funds. Molk and Robertson explained that these passive funds—which follow the investments of market indexes, like the Dow Jones Industrial Average—are expected to follow these indexes. Molk and Robertson then summarized the current regulations that passive indexes face in their investment decisions, and the two argued that these laws have leeway for making investments that are different from the index funds. In fact, as Molk and Robertson demonstrated, many funds do deviate from their target index, even if many investors are unaware of it, and suggested policies to remedy this knowledge gap.
• In an article in the Saint Louis University Law Journal, University of Texas School of Law Professor Elizabeth Sepper outlined the recent change in court rulings on the interactions of the First Amendment and equality regulations, such as anti-discrimination laws. Sepper explained how the U.S. Supreme Court recognized the Boy Scouts of America’s First Amendment right to exclude gay men from membership—defining it as the right of “expressive association”—in the case Boy Scouts of America v. Dale in 2000. For over a decade, courts narrowly interpreted this ruling, but Sepper identified a trend toward expanding the decision’s impact. For example, Sepper noted that, in 2018, a federal court upheld a right of expressive association in employment decisions for the first time. Sepper argued that this trend of expanding the right of expressive association, if left unchecked, could weaken anti-discrimination laws.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Herbert Hovenkamp, the James G. Dinan University Professor at the University of Pennsylvania Carey Law School, used an antitrust framework to evaluate the noncompete ban that the Federal Trade Commission (FTC) proposed in January 2023. At present, Professor Hovenkamp explains, noncompete agreements are analyzed under the “rule of reason” test, which requires proof that the conduct in question actually had an anticompetitive effect, but the FTC would prefer a per se rule, which would not require proof of market power. Through the rule of reason, Professor Hovenkamp argues, “unjustified” noncompetes that apply to lower-wage employees typically withstand antitrust scrutiny. An overly broad per se rule, however, could invalidate even more justifiable noncompetes that apply to employees who hold specialized knowledge and training that could benefit a competitor. Professor Hovenkamp suggests that the FTC propose a rule that distinguishes between different types of noncompetes.