New Regulations Create Potential Privacy Risk in Corporate Transactions

Image by Magnus ManskeToday, the Department of Labor issued regulations to enforce Title I of the Genetic Information Non-Discrimination Act of 2008 (GINA). Title I regulates self-insured group health plans and health insurance issues, among others. Title I prohibits group health plans from "collecting" any "genetic information." "Collection" means requesting, requiring or purchasing. "Genetic information" includes a family medical history. Title II of GINA, which governs employment discrimination based on genetic information, has parallel provisions but the EEOC has not yet issued regulations. The anticipated regulations, however, likely will track those issued by the Department of Labor.

One of the examples in the Title I regulations states as follows:

Issuer A acquires Issuer B. Issuer A requests Issuer B's records and tells Issuer B that it does not want to receive any genetic information and that Issuer B should remove all genetic information from the production. Issuer B gathers the requested medical records and removes all medical information but inadvertently produces some family medical histories. Issuer A does not violate GINA's prohibition on collection because its receipt of the family medical histories falls within the incidental collection exception to the general prohibition.

The Key Point: This hypothetical suggests by negative implication that acquiring companies must make a point of telling the acquired company not to provide the acquiring company with any "genetic information" when the acquired company turns over personnel records to the acquiring company. If the acquiring company fails to do so and receives any family medical histories — for example, one given in connection with a health risk assessment, the acquiring company has "collected" genetic information, apparently in violation of GINA. Notably, GINA does not include an exception for collection with the consent of the individual, so it appears that obtaining the subject employee's authorization would not defeat potential liability.

The Labor Department’s regulations go into effect on December 7, 2009.

This entry was written by Philip L. Gordon.

For further information and analysis, see "Genetic Antidiscrimination Law Creates New Compliance Challenges for Employers" by Philip L. Gordon and Jennifer L. Mora and "Proposed Regulations Under Federal Genetic Information Nondiscrimination Act (GINA) Suggest Employer Action Now" by Margaret Hart Edwards.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.