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Legal Report December 2010


The following is an overview of the major security-related legislation from the 111th Congress, excluding any activity that followed the general election, which would have occurred after Security Management went to press.

The new laws passed include those on border security, communications, cruise ship security, employment discrimination, and whistleblowers. Measures that did not become law in this session involve issues such as chemical facilities, disaster management, retail theft, food safety, data protection, and workplace safety.

The bills that have not been signed into law by the end of 2010 will die and must be reintroduced in the next legislative session if they are to become law. The 112th Congress convenes in January.

BORDER SECURITY. Included in a new law authorizing U.S. Coast Guard operations (P.L. 111-281) are the provisions of a bill (H.R. 1148) requiring the Department of Homeland Security to evaluate whether to expand a successful biometrics pilot program tested by the Coast Guard for border security purposes.

In the program, the Coast Guard obtained the fingerprints of illegal aliens attempting to enter Puerto Rico from the Dominican Republic by using a handheld fingerprint scanner; fingerprints were then uploaded via a satellite link and compared to the government terrorist database.

Over the course of the project—from November 2006 to March 2009—the Coast Guard scanned the fingerprints of 2,455 people. Of those, 600 were found to have outstanding warrants in the United States. Forty-five percent of these, approximately 270 people, were brought to the United States and successfully prosecuted.

Under the new law, the government will provide a report to Congress on the feasibility of expanding the project to other Coast Guard vessels.

COMMUNICATIONS. A new law (P.L. 111-225) will prohibit the use of cell phones by prisoners and will designate cell phones as contraband in prisons.

A similar bill (S. 251) that would have allowed corrections officials to petition the government to use wireless jamming devices in prisons was approved by the Senate but was not taken up by the House of Representatives. Currently, any interference with wireless services is illegal. In evaluating petitions, the bill would have required that the government consider whether the jamming device would interfere with the work of local first responders or other public-safety or emergency personnel.

CRUISE SHIP SECURITY. A recently enacted law (P.L. 111-207) will enhance security aboard cruise ships. It applies to cruise ships that embark or disembark at U.S. ports, are authorized to carry at least 250 passengers, and have sleeping facilities for each passenger.

The law requires that each stateroom on cruise ships be equipped with security latches and electronic keys that can provide entry dates and times. Ships are also required to install and maintain a video surveillance system and provide information from that surveillance to law enforcement upon request. Cruise ship owners are required to establish and enforce policies on crew-member access to passenger rooms.

The law requires that ships maintain rape kits and ensure that medical staff members be trained to administer such kits and treat assault victims. Designated crew must be trained to detect and preserve evidence from any crime that occurs on board the ship.

Ship owners are further required to track incidents of rape and other crimes reported on board and keep a log of those crimes. The log will be available to the FBI, the U.S. Coast Guard, and any law enforcement officer investigating a reported crime. If a serious crime—homicide, suspicious death, missing persons, kidnapping, or assault—occurs on board, ship operators are required to report the incident to the nearest FBI field office immediately. The government is required to keep statistics on crime aboard cruise ships, which will be available via a dedicated Web site.


A new law (P.L. 111-2) revises employment discrimination laws. Under the law, an employee may act on a discriminatory practice at the time it occurs and also each time the employee is affected by the application of the decision or practice, such as each time an employee is paid, for example. The measure would allow an employee to recover back pay for up to two years preceding the filing of a lawsuit in cases where the unlawful employment practices stated in the claim also occurred in the prior time period. The changes set out in the bill would also apply to the Americans with Disabilities Act as well as to discrimination law.

The bill is in response to a U.S. Supreme Court ruling, Ledbetter v. Goodyear Tire and Rubber Co. In the case, a lawsuit filed by a female employee claiming that she was paid less than her male employees was thrown out because it was filed more than 120 days after the act of discrimination—her hiring at reduced pay—occurred.

WHISTLEBLOWERS. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (P.L. 111-517) contains various provisions that offer incentives and strengthen protections for whistleblowers.

Under the law, whistleblowers are directed to report fraud cases directly to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). For original information that results in more than $1 million in sanctions, the whistleblower can receive from 10 to 30 percent of the amount obtained by the SEC or CFTC. The award amount depends on how vital the information was to the case and the degree of assistance provided by the whistleblower. Awards will not be given to a whistleblower who was convicted of a crime related to the fraud he or she reported.

To be considered “original” information, the reporting must result from the whistleblower’s knowledge or analysis and not from media sources or from government publications, hearings, or investigations. The information must be unknown to the SEC or CFTC.

Under the law, whistleblowers who suffer retaliation from their employers for providing information to the government may sue in federal court. The law defines retaliation as discharge, demotion, suspension, harassment, or discrimination. Remedies include reinstatement, back pay, and court fees.

The Dodd-Frank law also amends whistleblower provisions in The Sarbanes-Oxley Act of 2002. Under the new law, the statute of limitations under Sarbanes-Oxley is doubled from 90 days to 180 days. Also, Dodd-Frank states that those suing under Sarbanes-Oxley have a right to a jury trial rather than pursuing their claims through the Occupational Safety and Health Administration.

CHEMICAL FACILITIES. A bill (H.R. 2868) intended to increase security at chemical facilities was approved by the House of Representatives and by a Senate committee but failed to come to a vote before the full Senate.

The Senate replaced H.R. 2868 with a new version of the bill. The version passed by the Senate committee was identical to the House version in some respects. It would have extended existing law and maintained current Department of Homeland Security (DHS) regulations on the subject by establishing standards and procedures for security vulnerability assessments and site security plans.

The Senate and House versions differed with regard to inherently safer technologies. Under existing law, chemical facilities may consider inherently safer technologies but DHS cannot approve or reject a site security plan based on whether the facility includes inherently safer technologies.

The House version of the bill would have encouraged the use of such technologies but would not allow DHS to mandate their use. Instead, before DHS could require such changes, it would have been required to notify Congress of the ramifications of making the switch. Such changes would have been prohibited in cases where using inherently safer technologies would have required the facility to cut production or fire employees. However, the Senate version of the bill would only have extended current law and did not encourage the use of inherently safer technologies.

DISASTER MANAGEMENT. A bill (S. 3249) that would have renewed a grant program designed to help state and local governments prepare for disasters was approved by the Senate Homeland Security and Governmental Affairs Committee but did not come to a vote in the full Senate. The competitive grant program would have provided grants to state and local governments for projects that mitigate damage from natural disasters such as hurricanes and floods. A Congressional study found that for every $1 spent on the program, the federal government saved $3.

RETAIL THEFT. Several bills under consideration in the last Congress would have established programs to combat organized retail theft. The one that received the most support, H.R. 5932, would have established a unit within the Department of Justice to investigate and prosecute organized retail theft. The unit would also be charged with assisting state and local law enforcement agencies and consulting with victims of organized retail theft. The bill was approved by the House of Representatives but was pending in the Senate Judiciary Committee at press time.

Another bill (S. 470) would have made organized retail theft a federal crime and would have required that owners of retail marketplaces or online sales outlets review and report suspicious vendors. A related bill (H.R. 1173) would have expanded the crime of fraud to include the use of gift cards, UPC codes, and RFID technology to illegally obtain goods or services. H.R. 1173 would have required that operators of online marketplaces and retailers who sell high-volume goods report their sales activities to the government. The measure would also have provided for civil forfeiture of any property used to commit or facilitate organized retail theft. Businesses whose goods or services were illegally sold online as a result of an organized retail theft operation would have been allowed to seek compensatory damages.

FOOD SAFETY. A bill (S. 510) that would have allowed the government to suspend the registration of a food production facility due to unsafe conditions and issue a recall of adulterated food was approved by the Senate Health, Education, Labor, and Pensions Committee. The Senate failed to vote on the measure.

The bill would have required food manufacturing companies to pay fees for the inspection and recall programs. It would have established a food safety verification program for foreign suppliers and would have provided for the inspection of foreign facilities registered to import food into the United States.

DATA PROTECTION. A bill (S. 139) that would have required that companies notify consumers if their personally identifiable information had been accessed was approved by the Senate Judiciary Committee but was not brought to a vote before the Senate. Under the bill, companies that possess such data would have been required to disclose any data breach.

Under the measure, a company would not have been required to disclose a breach if doing so would damage national security or jeopardize a law enforcement investigation. Companies would also be exempt from notification requirements if a risk assessment concluded that the unauthorized access caused no harm. The risk assessment would have to be sent to the U.S. Secret Service within 45 days of the breach.

Under the bill, a company could have presumed that no significant risk was caused by the theft of information that was encrypted or rendered harmless through redaction or other industry-recognized data-protection methods.

Companies would have been allowed to notify consumers via telephone, mail, or e-mail. The notice would have to contain information on what type of data was accessed, a toll-free number to contact the company, and toll-free numbers for the major credit reporting agencies.

Violations would have been punishable by fines of up to $1,000 per day for each individual whose information had been breached. Companies could have been charged a maximum of $1 million per violation.

WORKPLACE SAFETY. A bill (H.R. 5663) that would have revised federal workplace safety rules was approved by the House Judiciary Committee but did not come to a vote before the full House.

The bill addressed mine safety issues and contained general workplace safety measures. The bill would have increased the penalties for willful or repeat violations of workplace safety rules. Penalties for such violations would have risen from a minimum of $5,000 and a maximum of $70,000 to a minimum of $8,000 and a maximum of $250,000. These penalties would have increased if a violation caused or contributed to an employee’s death.

Under the measure, the government could have imposed criminal penalties against employers as well as any officer or director of a company when those individuals knowingly contributed to an employee’s death or serious bodily injury. The maximum fine for this violation would have been $500,000 and the sentence could have been up to 20 years in prison. H.R. 5663 would also have expanded whistleblower rights.

This column should not be construed as legal or legislative advice.