Student Arbitration Agreements

By Edward Cramp and Jessica S. High

July 1 is quickly approaching for institutions that require students to sign pre-dispute arbitration agreements.  The new Borrower Defense to Repayment (BDR) regulation goes into effect on July 1. Among other things, it prohibits Title IV institutions from requiring students to sign mandatory pre-dispute arbitration agreements covering BDR claims.

Institutions can continue to use arbitration agreements for non-BDR claims. Institutions should review current arbitration agreements to ensure they comply with the new regulation.  Additionally, institutions must provide notice (with prescribed language) to students who previously signed a pre-dispute arbitration agreement that does not comply with the new regulations. The notice must be provided no later than exit counseling or the date on which the school files its initial response to a demand for arbitration or service of a complaint, whichever is earlier.

Compliant arbitration agreements and notices must be implemented by July 1. Some arbitration administrators, such as the American Arbitration Association, required consumer arbitration agreements to be registered with the agency.  Such administrators may decline to administer an arbitration if the college or business does not comply with the registration requirement. Institutions should review their arbitration administrator’s rules to see if this is required.

Finally, litigation is pending in the case of CCST v. Cardoza, which may impact whether the new BDR regulation goes into effect as scheduled.  Institutions should be on the watch for updates in the event that the court issues a ruling that impacts the implementation of the new rule.

If you have any questions about this blog post, please contact Edward Cramp, Jessica High, any of the attorneys in our Higher Education Group or the attorney in the firm with whom you are regularly in contact.

New Title IX NPRM

On April 6, 2023, the U.S. Deptartment of Education released a new Notice of Proposed Rulemaking (“NPRM”) on Title IX.  This NPRM focuses on the application of Title IX to gender in student sports.

The current Title IX rule (last amended in 2020 under the Trump Administration) does not expressly address the criteria a school should use to determine eligibility to participate on a male or female athletic team. This NPRM proposes to change that and “would establish that policies violate Title IX when they categorically ban transgender students from participating on sports teams consistent with their gender identity.” However, in the NPRM, the Department states that it recognizes that in some instances, “particularly in competitive high school and college athletic environments, some schools may adopt policies that limit transgender students’ participation.” Through the proposed rule, the Department is attempting to provide schools with a “framework for developing eligibility criteria to protect students from being denied equal athletic opportunity, while giving schools the flexibility to develop their own participation policies.” 

Under the proposed framework, a one-size-fits-all policy banning transgender students from participating in athletics consistent with their gender identity is prohibited. The proposed regulation would be in the Title IX regulations at section 106.41(b)(2): 

“If a recipient adopts or applies sex-related criteria that would limit or deny a student’s eligibility to participate on a male or female team consistent with their gender identity, such criteria must, for each sport, level of competition, and grade or education level: (i) be substantially related to the achievement of an important educational objective, and (ii) minimize harms to students whose opportunity to participate on a male or female team consistent with their gender identity would be limited or denied.”

This NPRM will be open for public comment for 30 days from publication in the Federal Register and we expect comments to be strongly divided. Once the comment period closes, the Department will review the comments received and will either proceed with the rule as proposed, issue a new modified proposal or withdraw the proposal. 

New CA Bill for Student Proctoring

Student Test Taker Privacy Protection Act (SB-1172), limits the collection of personal data by proctoring services. The pandemic created a surge of online-proctoring services which utilize various types of personal information, such as a driver’s license, other identification and/or biometric data, to verify a student’s identity during a proctored exam. SB-1172 seeks to establish data protections for the online test taker. The Act prohibits a proctoring service from collecting, retaining, using, or disclosing personal information except to the extent necessary to provide the proctoring services. 

Most higher education institutions use outside proctoring services (such as Proctorio, ProctorU, Exmanity and ExamSoft) to administer proctored online exams so the institutions would be directly responsible for regulating the information collected. However, higher education institutions should take steps to ensure that the proctoring services utilized adhere to the bill’s restrictions. Current proctoring service contracts should be analyzed and likely amended to at a minimum include that the service provider will not collect, retain, use or disclose student personal information except to the extent necessary to provide the proctoring services.   

FTC Postpones Compliance Deadline for Certain Safeguards Rule Provisions Applicable to Title IV Institutions of Higher Education

Last year, the Federal Trade Commission (FTC) amended the Safeguards Rule under the Gramm-Leach-Bliley Act (GLBA). The comprehensive amendment updated data security requirements for financial institutions, including all Title IV institutions of higher education. In response to reports of personnel shortages and supply chain issues, on November 15, 2022, the FTC announced that it has extended the compliance deadline by six months (to June 9, 2023) for provisions of the rule that were originally to become effective on December 9, 2022. 

The GLBA is a federal law enforced by the FTC. It governs financial institutions regarding their use and collection of customer personally identifiable information. The specific cybersecurity requirements of the GLBA are set forth in the Safeguards Rule. The U.S. Department of Educationvia the Program Participation Agreement, several Dear Colleague Letters, the FSA Handbook and the audit guidehas made it clear that Title IV schools are considered financial institutions and subject to the legal obligations to protect student information required under the GLBA. As such, Title IV schools must meet these strengthened security requirements to better protect consumer (student) financial information.

To view details about what Safeguards Rule provisions are included in the extension, please see our Alert. 

These requirements are not policies and procedures that can be implemented overnight. Considering the shortage of qualified personnel to implement information security programs and the various supply chain issues, schools may need every bit of those six months to develop an information security program that meets the rule’s comprehensive requirements. Schools should work with legal counsel and an information security professional to draft or revise a comprehensive cybersecurity program to protect student records and ensure compliance with the updated Safeguards Rule.

U.S. Department of Education Releases Proposed Title IX Rewrite

On June 23, 2022, the 50th Anniversary of the Title IX statute, the U.S. Department of Education released the Notice of Proposed Rulemaking (“NPRM”) for the Title IX rule. The proposed rule is expected to be published in the Federal Register on June 27, 2022. Following publication, interested parties will have 60 days to submit public comment. 

First, the Department proposed to amend Title IX regulations to:
Require recipients to adopt grievance procedures that provide for the prompt and equitable resolution of complaints of sex discrimination and take other necessary steps to provide an educational environment free from sex discrimination;
Clarify the Department’s view of the scope of Title IX’s prohibition on sex discrimination, including related to a hostile environment under the recipient’s education program or activity, as well as discrimination on the basis of sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity; and
Clarify a recipient’s obligations to students and employees who are pregnant or experiencing pregnancy-related conditions.

With regard to sex-based harassment, the proposed regulations would:
Define sex-based harassment to include but not be limited to sexual harassment;
Provide and clarify, as appropriate, definitions of various terms related to a recipient’s obligations to address sex discrimination, including sex-based harassment;
Clarify how a recipient is required to take action to end any sex discrimination that has occurred in its education program or activity, prevent its recurrence, and remedy its effects; and
Clarify a recipient’s obligations related to the grievance procedures and other necessary steps when it receives a complaint of sex discrimination. 

With regard to discrimination against individuals who are pregnant or parenting, the proposed regulations would:
Define the term “pregnancy or related conditions” and the term “parental status,” and prohibit discrimination against students and applicants for admission or employment on the basis of current, potential, or past pregnancy or related conditions; and
Clarify a recipient’s obligations to students and employees who are pregnant or experiencing related conditions. 

In addition, the proposed regulations would:
Articulate the Department’s understanding that sex discrimination includes discrimination on the basis of sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity;
Clarify and streamline administrative requirements with respect to designating a Title IX Coordinator, disseminating a nondiscrimination notice, adopting grievance procedures, and recordkeeping;
Specify that a recipient must train a range of relevant persons on the recipient’s obligations under Title IX;
Clarify that, unless otherwise provided by Title IX or the regulations, a recipient must not carry out any otherwise permissible different treatment or separation on the basis of sex in a way that would cause more than de minimis harm, including by adopting a policy or engaging in a practice that prevents a person from participating in an education program or activity consistent with their gender identity; and
Clarify a recipient’s obligation to address retaliation.

Duane Morris is in the process of reviewing the proposed rule in detail and will prepare bullet points and a full summary in the coming days.

Court Ruling Impact on Title IX Regulations

On July 28, 2021, a federal district court in Massachusetts issued a decision in Victim Rights Law Center et al. v. Cardona, No. 1:20-cv-11104, 2021 WL 3185743 (D. Mass. July 28, 2021).  This case was brought by organizations and individuals challenging the 2020 amendments to the Title IX regulations.

Most of the amendments plaintiffs challenged were upheld by the Court. However, the Court determined that one part of 34 C.F.R. § 106.45(b)(6)(i) (live hearing requirement at postsecondary institutions) was arbitrary and capricious. Therefore, the Court vacated the part of the provision that prohibits a decision-maker from relying on statements not subject to cross-examination at the live hearing.

On August 24, 2021, the Department issued guidance stating that it would immediately cease enforcement of 34 C.F.R. § 106.45(b)(6)(i) regarding the prohibition against statements not subject to cross-examination.  The Department’s non-enforcement position allows for decision-makers at postsecondary institutions to now consider statements made by the parties and witnesses during the investigation regardless of whether they submit to cross-examination at the live hearing. Institutions may now consider emails or text exchanges between the parties leading up to the alleged sexual harassment and statements about the alleged sexual harassment that satisfy the regulation’s relevance rules without submitting to cross-examination. A decision-maker at a postsecondary institution may also consider police reports, Sexual Assault Nurse Examiner documents, medical reports, and other documents even if those documents contain statements of a party or witness who is not cross-examined at the live hearing.

The Department’s resources will be updated to reflect the Court’s decision.

New Title IX Guidance Released

On July 20, 2021, the Department of Education (through the Office of Civil Rights “OCR”), unveiled new guidance to help schools understand their obligations under the Betsy DeVos-era Title IX rule. The rule, which went into effect on August 14, 2020, is currently undergoing a comprehensive review based on the Executive Order issued by President Biden on April 6, 2021. 

The 67-page Q&A is divided into 17 sections and provides guidance on a variety of topics covered by the 2020 Title IX amendments, focusing on language within the preamble. The guidance also includes an appendix with sample language schools can utilize (but are not required to) in creating a Title IX policy.  Continue reading “New Title IX Guidance Released”

New California Supplemental Paid Sick Leave law

California state legislature passed SB 95, which creates a new and more expansive supplemental paid sick leave law for COVID-related leaves.  The bill applies retroactively to January 1, 2021, when the previous supplemental paid sick leave law expired. This is classified as emergency legislation, so it will go into effect 10 days after being signed by the governor, which he is expected to do.

There are some key differences between the new law and the prior law. The terms of the new law are summarized below; where they change from the prior law, they are noted.

  • The law applies to public or private employers with 25 or more employees.  (Prior law applied to those with 500 or more nationwide.)
  • Applies to both employees who cannot work or telework for one of the qualifying reasons.  (Prior law did not apply to remote employees or those who could telework.)
  • Applies for the following seven qualifying reasons:
    1. The worker is subject to a quarantine or isolation “period” related to COVID-19 as defined by an order or guidelines by the state, the CDC, or local public health authorities).  (Some of these quarantine/isolation periods conflict, so the law states that this applies to the shortest one in the event of such a conflict.)
    2. The worker is advised by a health care provider to self-quarantine or isolate due to concerns related to COVID-19;
    3. The employee is attending an appointment to receive a vaccine for protection against contracting COVID-19;
    4. The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work;
    5. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
    6. The employee is caring for a family member (minor or adult child, parent, spouse, domestic partner, grandparent, grandchild, or sibling) who is subject to a quarantine or isolation period, or who has been advised to self-quarantine; or
    7. The employee is caring for a child (regardless of age) whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
  • The law provides for 80 hours of paid sick leave for full time employees (a formula is available for calculating the amount of available leave for employees who work fewer hours or an irregular schedule) who take leave for one of the qualifying reasons above.  This is a new bank of leave, so if an employee took leave under the prior supplemental paid sick leave law, they have not exhausted it for purposes of this one—they get a full 80 hours.  
  • Employees must exhaust this leave first before using other paid leave, such as regular paid sick leave or PTO.  However, this leave may apply toward any paid leave provided by employers under the Cal/OSHA emergency temporary standards, which require pay continuation during a mandatory quarantine period following a workplace exposure.
  • Paid sick leave must be itemized on the employee’s pay stub, separate from the other paid sick leave bank that is already required to be included.
  • If an employer provided supplemental paid sick leave or paid leave for one of the qualified reasons above between January 1, 2021 and the date this law goes into effect (for example, paid employees to stay home during a quarantine period under the Cal/OSHA emergency temporary standards or under an employer’s own policy), that may be counted against this new bank of leave.  However, they may not do this if the employer required an employee to use their normal paid sick leave.
  • If an employee took leave for a qualifying reason between January 1, 20201 and now but was not paid, an employer must make a retroactive payment upon the oral or written request of an employee.
  • The Labor Commissioner will create and disseminate a model notice, which must be provided to employees.

The Bill expires on September 30, 2021, though employees who are on leave at the time of the expiration must be allowed to complete their paid leave.

Full language of the bill can be found here. 

Deadline Approaching: California Employers Must Report Compensation Data by March 31st

On September 30, 2020, California Governor, Gavin Newsom, signed SB 973 into law. By March 31, 2021, private California employers with 100 or more employees and who are subject to EEO-1 reporting must submit a “pay data report” to the California Department of Fair Employment and Housing (DFEH).

What Are Employers Required to Report?

The pay data report must include a breakdown of employees by sex, race and ethnicity in 10 job categories. Specifically, the categories include: executive or senior level officials or managers; first or mid-level officials and managers; professionals; technicians; sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers. The pay data report must also include a delineation of employee compensation in 11 identified pay bands ranging from “less than $19,239” to “more than $208,000” based on W-2 wages. The report must include the number of employees in each pay band, along with information on sex, race and ethnicity and total number of hours worked.

What Is California Going to Use the Data for?

The intent of the California Legislature is clear by its legislative findings—the Legislature believes a discriminatory pay gap persists despite other recent legislation and now requires additional attention from the state. DFEH will review the pay data reported to ferret out discrimination in pay and hold employers accountable for differences in pay that are not authorized by law.

Title IX Final Rule

On May 6, 2020, the U.S. Department of Education issued the Final Rule on Title IX of the Education Amendments of 1972 (“Title IX”) regulations. These are the first comprehensive regulations issued under Title IX since 1975.

The Final Rule goes into effect on Friday, August 14, 2020.  Its provisions will significantly impact K-12 school districts, colleges, and universities. The changes include: a definition for sexual harassment, requirement for publication of Title IX materials, triggers for an institution’s legal obligation to respond and investigate, and a requirement that institutions conduct courtroom-like hearings. Continue reading “Title IX Final Rule”

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

Proudly powered by WordPress