The federal government has been trying to reach a consensus on data privacy and thus far has failed to pass legislation. On June 3, 2022, a bipartisan draft bill, titled the American Data Privacy and Protection Act was released by the Committee on Energy and Commerce. The bill intends to provide comprehensive data privacy legislation, including the development of a uniform, national data privacy framework and robust set of consumer privacy rights.

A covered entity for purposes of the draft bill is defined as “any entity or person that collects, processes, or transfers covered data” and is subject to the Federal Trade Commission Act, is a common carrier under the Communications Act of 1934, or is an organization not organized to carry on business for their own profit or that of their members.

Per the draft, the new act would be carried out by a new bureau within the Federal Trade Commission (FTC). Interestingly, the proposed legislation would preempt similar state laws, though excludes the CCPA/CPRA in California and the BIPA and the GIPA in Illinois from that preemption.

The draft bill covers a wide swath of data consumer privacy issues from data collection to civil rights and algorithms. The following are some highlights of note:

Data Collection Requirements

The draft legislation imposes a duty on all covered entities not to unnecessarily collect or use covered data with covered data being defined broadly as “information that identifies or is linked or reasonably linkable to an individual or a device that identifies or is linked or reasonably linkable to 1 or more individuals, including derived data and unique identifiers”.  The FTC would be charged with issuing additional guidance regarding what is reasonably necessary, proportionate, and limited for purposes of collecting data.

Covered entities would have a duty to implement reasonable policies, practices, and procedures for collecting processing, and transferring covered data. Further, covered entities would be required to provide individuals with privacy policies detailing data processing, transfer, and security activities in a readily available and understandable manner. The policies would need to include contact information, the affiliates of the covered entity that it transfers covered data to, and the purposes of each category of covered data the entitled collects, processes, and transfers.

Covered entities would be prohibited from conditioning or effectively conditioning the provision or termination of services or products to individuals by having individuals waive any privacy rights established under the law.

There would be additional executive responsibility for large data holders, including requiring CEOs and privacy officers to annually certify that their company maintains reasonable internal controls and reporting structures for compliance with the statute.

Individual Rights Created

Individuals would be granted the right to access, correct, delete, and portability of, covered data that pertains to them. These are similar to many of the rights California residents have under the CCPA/CPRA.  The right of access would include obtaining covered data in a human-readable and downloadable format that individuals can understand without expertise, the names of any other entities the data was transferred to, the categories of sources used to collect any covered data and the purposes for transferring the data.

Sensitive covered data, which includes items such as an individual’s health diagnosis, financial account information, biometric information, and government identifiers such as social security information, among other items, is prohibited from data collection without the individual’s affirmative consent.

Civil Rights and Algorithms

Unsurprisingly, algorithms, which were recently addressed by the EEOC and DOJ in guidance are also addressed in this draft legislation. Under the proposed legislation, covered entities may not collect, process, or transfer data in a manner that discriminates based on race, color, religion, national origin, gender, sexual orientation, or disability. This section of the law would require those large data holders that use algorithms to assess their algorithms annually and submit annual impact assessments to the FTC.

While comprehensive national privacy legislation has previously faced difficulties being passed, Jackson Lewis will continue to track the status of this legislation as it moves through Congress. If you have questions about this proposed legislation or related issues please reach out to a member of our Privacy, Data, and Cybersecurity practice group.

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Photo of Jason C. Gavejian Jason C. Gavejian

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy…

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

As a Certified Information Privacy Professional (CIPP/US), Jason focuses on the matrix of laws governing privacy, security, and management of data. Jason is co-editor of, and a regular contributor to, the firm’s Workplace Privacy, Data Management & Security Report blog.

Jason’s work in the area of privacy and data security includes counseling international, national, and regional companies on the vast array of privacy and security mandates, preventive measures, policies, procedures, and best practices. This includes, but is not limited to, the privacy and security requirements under state, federal, and international law (e.g., HIPAA/HITECH, GDPR, California Consumer Privacy Act (CCPA), FTC Act, ECPA, SCA, GLBA etc.). Jason helps companies in all industries to assess information risk and security as part of the development and implementation of comprehensive data security safeguards including written information security programs (WISP). Additionally, Jason assists companies in analyzing issues related to: electronic communications, social media, electronic signatures (ESIGN/UETA), monitoring and recording (GPS, video, audio, etc.), biometrics, and bring your own device (BYOD) and company owned personally enabled device (COPE) programs, including policies and procedures to address same. He regularly advises clients on compliance issues under the Telephone Consumer Protection Act (TCPA) and has represented clients in suits, including class actions, brought in various jurisdictions throughout the country under the TCPA.

Jason represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. He negotiates vendor agreements and other data privacy and security agreements, including business associate agreements. His work in the area of privacy and data security includes counseling and coaching clients through the process of investigating and responding to breaches of the personally identifiable information (PII) or protected health information (PHI) they maintain about consumers, customers, employees, patients, and others, while also assisting clients in implementing policies, practices, and procedures to prevent future data incidents.

Jason represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination, and wage and hour claims in both federal and state courts. He regularly appears before administrative agencies, including the Equal Employment Opportunity Commission (EEOC), the Office for Civil Rights (OCR), the New Jersey Division of Civil Rights, and the New Jersey Department of Labor. Jason’s practice also focuses on advising/counseling employers regarding daily workplace issues.

Jason’s litigation experience, coupled with his privacy practice, provides him with a unique view of many workplace issues and the impact privacy, data security, and social media may play in actual or threatened lawsuits.

Jason regularly provides training to both executives and employees and regularly speaks on current privacy, data security, monitoring, recording, BYOD/COPE, biometrics (BIPA), social media, TCPA, and information management issues. His views on these topics have been discussed in multiple publications, including the Washington Post, Chicago Tribune, San Francisco Chronicle (SFGATE), National Law Review, Bloomberg BNA, Inc.com, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and HR.BLR.com.

Jason is the co-leader of Jackson Lewis’ Hispanic Attorney resource group, a group committed to increasing the firm’s visibility among Hispanic-American and other minority attorneys, as well as mentoring the firm’s attorneys to assist in their training and development. He also previously served on the National Leadership Committee of the Hispanic National Bar Association (HNBA) and regularly volunteers his time for pro bono matters.

Prior to joining Jackson Lewis, Jason served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Tampa, Florida, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the…

Joseph J. Lazzarotti is a principal in the Tampa, Florida, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Photo of Cecilie E. Read Cecilie E. Read

Cecilie E. Read is the knowledge management (“KM”) attorney for Jackson Lewis P.C.’s California practice and Privacy, Data and Cybersecurity group, and is based in the Los Angeles, California, office of Jackson Lewis P.C. She uses her expansive understanding of the complexities of…

Cecilie E. Read is the knowledge management (“KM”) attorney for Jackson Lewis P.C.’s California practice and Privacy, Data and Cybersecurity group, and is based in the Los Angeles, California, office of Jackson Lewis P.C. She uses her expansive understanding of the complexities of employment law to ensure all Jackson Lewis attorneys are consistently ahead of the curve and working efficiently to serve clients.