Blog – National Consumers League

Science Should Drive Obesity Care

By Nancy Glick, Director of Food and Nutrition Policy

Today, over 100 million Americans, or 40.3 percent of adults, are living with obesity. This makes obesity the nation’s most widespread chronic condition, impacting many more people than diabetes, heart disease, stroke, certain cancers, chronic lung disease, and chronic kidney disease.

Yet, the sad fact is obesity still gets short shrift from health professionals and policymakers, even though it worsens the outcomes of more than 230 chronic diseases, is responsible for an estimated 400,000 premature deaths annually, and costs society an estimated $1.72 trillion a year. As a consequence, only 10 percent of people with obesity get help from medical professionals, meaning the disease remains largely undiagnosed and undertreated. This is occurring even though leading medical societies, including the American Medical Association (AMA), agree that obesity is a serious disease requiring comprehensive care.

It doesn’t have to be this way, which is why the National Consumers League worked with the National Council on Aging and leading obesity experts to issue the first Obesity Bill of Rights for the nation, which establishes eight essential rights so people with obesity will be screened, diagnosed, counseled, and treated according to medical guidelines. The goal is to put an end to the prejudice, incorrect beliefs about obesity, misinformation about treatment options, and outdated government policies that keep Americans from getting the same standard of care as those with other chronic diseases.

It will take time for the Obesity Bill of Rights to be incorporated into clinical practice, but specific rights already have significance. This is the case with new “blockbuster” injectable medicines called GPL-1 (glucagon-like peptide-1 receptor) agonists that work by mimicking a hormone produced in the small intestine to reduce appetite and slow digestion. Considered a game-changer in chronic obesity treatment, GPL-1s can help people lose up to 20 percent of their weight in 26 months. Thus, The Right to Coverage for Treatment reinforces calls from obesity specialists and medical societies for an end to exclusionary coverage policies by insurers and government agencies, so GPL-1 medications are a treatment option for adults at higher risk for living with weight-related diseases.

The major challenge has been the Medicare program, which excludes coverage for weight loss drugs due to past safety concerns that no longer exist today. But this could change. On November 26, 2024 the Centers for Medicare and Medicaid Services (CMS) published a proposed rule to allow seniors on Medicare and adults with Medicaid to have coverage for GPL-1s, thereby removing one of the biggest obstacles impeding access to quality obesity care in the country. If CMS’s proposal is finalized, the right to coverage for obesity treatment will become a reality for 7.4 million Americans – a good start in ensuring that people with obesity receive individualized quality care.

However, there is a lot of misinformation about GPL-1 medications, so The Right to Accurate, Clear, Trusted, and Accessible Information is also important, especially because disinformation is raising concerns among health professionals and the public. To date, the Food and Drug Administration (FDA) has approved four GPL-1 drugs based on evidence from large-scale clinical trials that these medicines are safe and achieve substantial weight loss. Yet, critics of these drugs assert these compounds cause severe side effects in all users, claim GLP-1 medications cause depression and suicidal thoughts, and allege the European Union (EU) is investigating this matter.

Responding to these allegations, experts in obesity treatment have assembled the facts from scientific journal articles and government reports. In furtherance of the right of the public to have this information, here is a summary of these findings:

Regarding the potential side effects of GPL-1s, several studies dispute the assertion that GPL-1 drugs cause severe adverse effects in all people. The consensus is that because these drugs slow stomach emptying, they can cause gastrointestinal problems that are usually mild to moderate and often go away within one to two months.
As to GPL-1s causing suicidal ideation, a recent commentary in JAMA Open Network concludes that large-scale studies do not show any increased risk of suicidal ideation while

a 2024 study by researchers at Case Western Reserve University School of Medicine found
that people taking a GPL-1 drug had a lower risk of suicidal thoughts compared to those taking a non-GPL-1 compound. Similarly, the FDA published a detailed report in January 2024 also finding no association. FDA reached this conclusion after analyzing information on adverse events from the FDA Adverse Event Reporting System (FAERS), reviewing a meta-analysis of GPL-1 clinical trials data, and analyzing post-marketing data in the FDA’s Sentinel System.

Concerning the investigation by the EU’s European Medicines Agency, EMA’s Pharmacovigilance Risk Assessment Committee conducted a review of health records and issued a finding that no causal association exists between GLP-1s and suicidal thoughts or self-injurious actions.

The Rand Corporation coined the term “truth decay” to call attention to the blurring of the line between opinion and fact. It is important that “truth decay” not become a new obstacle to Americans receiving quality obesity care.

Congress Must Protect Consumers from PBM Abuse

December 4, 2024/in Blog Blog Post, pbms /by sepidehk

By Sally Greenberg, Chief Executive Officer

The post-election lame duck session of Congress could be one of the most influential for consumers – if our elected officials are willing to act. As Americans struggle with high prescription drug costs, insurance middlemen pharmacy benefit managers (PBMs) siphon dollars from the drug pricing system into their own pockets. Two bills sitting in Congress aim to change this by increasing transparency, ensuring PBM rebates are passed directly to consumers, and disconnecting PBM profits from the price of medicines.

S. 3973: The Pharmacy Benefit Manager Transparency and Accountability Act, would require PBMs to pass on rebates from drug manufacturers directly to consumers, ensuring they benefit from cost savings at the point of sale. It also delinks PBM profits from drug prices, eliminating the incentive to drive up costs.

S. 3430: The Prescription Drug Price Relief and Consumer Protection Act establishes stronger regulations on PBMs, ensuring transparency in drug pricing and rebate negotiations, and making sure PBMs act in the best interests of consumers.

These bills will create a much fairer system, ensuring that savings reach consumers and medications are made more affordable. Congress must advance these bills this year to protect consumers from PBM exploitation now and lay the groundwork for additional healthcare reforms next session.

Although this session – and year – is coming to a close, meaningful healthcare reforms that directly benefit consumers can start now.

Medical debt, a growing crisis for Americans, and the Biden Administration’s bold moves to tackle it

October 30, 2024/in Blog, Blog, health, Health, Health policy, Healthcare coverage Blog Post your_health Blog Post /by sepidehk

By Sam Sears, Health Policy Associate, National Consumers League

Consumers, unfortunately, accrue debt quite often throughout their lives – be it a mortgage, a car loan, credit cards, or even student loans. However, there is one type of debt that consumers have no way of knowing when it will be incurred – medical debt.

At the National Consumers League (NCL), we have been fighting to protect consumers from the unfair burdens of medical debt, both as it relates to access to care and exposing the inadequacy of the 340B Drug Pricing program. However, medical debt as a whole has a moment in the spotlight this October as the Biden Administration tackles the issue.

As I’m sure consumers have noticed, the cost of everything has gone up– groceries, rent, and even healthcare. Many families are forced to make tough decisions between putting food on the table or paying their medical bills. For some, it means putting off medical care to avoid the cost of the visit.

Medical debt now plagues more than 100 million Americans across the nation. As KFF Health News found, 1 in 7 people with debt shared that they’ve been denied access to a hospital, doctor, or other healthcare provider, and two-thirds have put off care they or a family member needs because of the cost. Shockingly, nearly 50% of those Americans have medical debt reported on their credit report, and over 40 million people owe around $88 billion, which has been sent to collections. This makes medical debt the single largest source of debt in collections, outpacing auto loans and credit cards.

The harsh reality is medical debt doesn’t just linger on a credit report; it devastates lives and can have lasting consequences. NCL has previously covered how medical debt collection practices can leave consumers in a “never-ending spiral of debt.” Hospitals across the nation are suing patients over their medical debt, and patients may not know that they must go to court or have the resources to hire a lawyer to protect themselves. As a result, creditors may seek default judgements in which a court authorizes them to garnish a patient’s wages as part of a payment plan, or place a lien on their home, cars, or other property.

Over the past few weeks, the issue of medical debt has been highlighted in the national conversation. A new proposed rule from the Department of Defense would introduce a sliding-scale discount program for civilians who receive care at a military medical treatment facility (MFT). Health and Human Services Secretary Xavier Becerra also announced that the Center for Medicare and Medicaid Services (CMS) will be adding questions about medical debt to the Medicare Current Beneficiary Survey (MCBS), an annual survey of Medicaid beneficiaries used to understand their health needs. These new questions will allow CMS to further understand the impact of medical debt on the day-to-day lives of seniors and people with disabilities.

Recently, the White House held a pivotal event hosted by the Consumer Financial Protection Bureau (CFPB), where individuals directly impacted by medical debt shared their heartbreaking stories. In tandem, the White House released a fact sheet unveiling the Administration’s new actions to address and reduce medical debt for consumers. Following these actions, the CFPB has taken several steps to protect consumers experiencing medical debt.

In his remarks, CFPB Director Rohit Chopra stated that the agency “has been laser-focused on dealing with the growing burdens of medical debt.” NCL commends CFPB and Director Chopra for their ongoing efforts to address the impact of medical debt on patients. Back in June, CFPB issued a proposed rule that would ban unpaid medical bills from being included on credit reports, and prevent the repossession of medical devices. The public comment period for this proposed rule closed on August 12. During the White House event, Director Chopra stated that CFPB is “working to finalize our credit reporting rule now.” But, with nearly 75,000 comments, NCL anticipates that it may take the agency some time to issue a final rule.

Given the complexities of medical bills, the CFPB has also been urging and requiring transparency from hospitals and debt collectors. New guidance was issued to crack down on deceptive medical billing practices, including the illegal collection of medical bills that are false, inflated, or not actually owed. CFPB has received several complaints from patients and consumers over medical debt collections, particularly for bills that the patient does not owe, were already paid by the consumer, insurance, or a government program (such as Medicare or Medicaid), or for debts that are covered by insurance, hospital assistance programs or other programs. More than ever, hospitals and healthcare providers are subcontracting medical billing and collection activities to third parties, who have legal obligations under the Fair Debt Collection Practices Act. CFPB has issued guidance to further clarify these legal obligations as they relate to medical debt and collection practices.

And let’s not forget the shameful practices of some nonprofit hospitals. As tax-exempt institutions, nonprofit hospitals are legally required to provide financial assistance to offset healthcare costs for low-income patients and consumers —yet many fall woefully short. In early October, CFPB published a comprehensive blog post drawing attention to billing and debt issues arising from nonprofit hospitals, many of which provide inadequate financial assistance. Often referred to as ‘charity care,’ federal regulations do not provide further guidance on the eligibility of patients or spending standards for hospitals. Thus, financial assistance policies are left to the hospitals themselves. While some states have intervened in an increasingly bipartisan manner, there are still too few regulations governing what financial assistance should look like or how it should be administered. NCL supports and recognizes the critical role hospitals, particularly nonprofit hospitals, play in their communities. However, the lack of transparency, as well as the predatory practices of some, need to change. NCL applauds CFPB for the spotlight they’ve put on these practices as a driver in the medical debt crisis.

CFPB has also taken steps to remove all medical collections under $500. This last step went into effect on April 11, 2023, and with this change, it’s estimated that roughly half of those with medical debt on their reports will have it removed from their credit history. If you find a medical collection under $500, a paid medical collection, a collection less than a year old, or errors on your report, you can dispute that information with the credit reporting company. One of the first steps you can take is to check your credit reports for any outstanding medical bills.

NCL stands in strong support of the efforts of the CFPB and the Biden Administration as they work to safeguard consumers and bring transparency to the healthcare and credit reporting systems. NCL shares CFPB’s concerns regarding how consumers accrue these inaccurate, undue bills in the first place. The Biden-Harris Administration continues to prioritize consumers’ access to healthcare and a commitment to protecting vulnerable populations from the unfair consequences that arise from an illness or medical emergency. NCL applauds Director Chopra, the Biden-Harris Administration, and federal agencies for their leadership in addressing the burden of medical debt.

We look forward to the CFPB’s final ruling on medical debt and credit reporting, which could be a game-changer for millions of Americans.

To learn more about your rights, and actions you can take, if you have medical debt on your credit report or need to dispute a medical bill, visit CFPB.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit nclnet.org.

As election looms, regulators can act now to help consumers save at the pharmacy counter

October 21, 2024/in Blog, Blog, health, Health Blog Post, health policy Blog Post /by sepidehk

By Sally Greenberg, Chief Executive Officer, National Consumers League

Now that we are a mere 15 days away from the election, all attention is unsurprisingly laser-focused on the outcome of the general election. Surprisingly, however, both candidates have made it clear that one of the leading healthcare issues on the ballot is the future of the Affordable Care Act (ACA). Ten years after its enactment, the ACA has become intertwined with the very fabric of the healthcare landscape in the US and thus requires federal agencies to regularly revisit the statutes to ensure it is fulfilling its original intent.

Now that the current administration has released proposed rulemaking on core provisions of the ACA, it has become more important than ever to add statutes to address a loophole in the essential health benefits (EHB) provision of the ACA. There is no better time for three federal agencies – the Department of Treasury, Department of Labor, and Department of Health and Human Services – to change language in the ACA that is constantly exploited by profit-seeking insurers, producing severe access and affordability barriers for patients and undermining the original intent of the ACA.

The loophole goes something like this: Essential health benefits are a central pillar of the ACA and provide affordability protections to Americans by ensuring that everyone in the individual and small group health insurance markets has access to coverage that actually covers the services they need. These essential health benefits fall into ten categories, one of which is prescription drugs.

If a patient pays out-of-pocket for their prescription (an essential health benefit), that dollar amount counts towards their out-of-pocket maximum. Once they hit the out-of-pocket cost maximum set by the ACA, insurance kicks in and covers the remainder of their out-of-pocket costs. However, insurers and pharmacy benefit managers (PBMs) are designating some specialty prescriptions to be “non-essential” – regardless of whether a patient needs them to stay alive. Once labeled “non-essential,” the patient is no longer protected by the out-of-pocket maximum set by the ACA.

What does this look like in practice? A patient may spend money on lifesaving medications that don’t count toward their out-of-pocket maximum. All year, a patient could pay out-of-pocket for prescriptions but never reach their maximum and see their insurance kick in. This saves a few bucks for insurers and PBMs but imposes massive financial burdens for patients who would otherwise be protected under the ACA. The EHB loophole forces patients to pay more out-of-pocket, a situation that circumvents the original intent of the law — which, as a reminder, is to keep drug costs affordable for consumers.

How can we close this loophole? The Department of Treasury, Department of Labor, and Department of Health and Human Services could act now. The tri-agencies can integrate language to close the EHB loophole into the Notice of Benefit and Payment Parameters (NBPP) to clarify that any service covered by a health plan is defined as an EHB.

Both of the frontrunners of the 2024 presidential election have signaled their intent to find solutions that lower prescription drug costs for Americans. While the country braces for the ripple effects of a new administration regardless of the results, regulators should close the EHB loophole to protect consumer access to treatments in line with the original intent of the ACA – affordable and accessible care for patients.

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About the National Consumers League (NCL)

The Obesity Bill of Rights: Priorities for government action

September 20, 2024/in Blog, Blog, health, Diseases and treatment, Health, Health policy Blog Post, fda, health, Health – Diseases and treatment, health care, health insurance, health policy, healthcare, obesity Blog Post /by sepidehk

By Nancy Glick, Director of Food and Nutrition Policy

Americans need and now have an Obesity Bill of Rights for a reason: People with obesity do not receive the same concern, level of attention, and quality care as those with any other serious chronic disease.

Put into real-life terms: Though the adult obesity rate now exceeds 42 percent – the highest level ever recorded – obesity is still viewed as a problem of lack of willpower; too many health professionals act in discriminatory ways based on people’s size; and those seeking obesity care often face exclusions in insurance plans, restrictive practices that delay or deny treatment, or are not factored into decisions regarding medicine use.

The consequence is that only 10 percent of people with obesity get help from medical professionals and only 2 percent of those eligible for treatment with Food and Drug Administration (FDA)-approved anti-obesity medicines (AOMs) have been prescribed these drugs, meaning the disease remains undiagnosed and undertreated. Compounding the impact, untreated obesity worsens the outcomes of more than 230 other chronic diseases, which is why obesity is responsible for as many as 400,000 Americans dying from obesity annually and costs the nation $1.72 trillion a year in direct and indirect health expenditures – more than what Social Security paid in retirement benefits in 2022.

It does not have to be this way.

And this is where the Obesity Bill of Rights enters the picture. Developed by the National Consumers League (NCL) and the National Council on Aging, in consultation with leading obesity specialists, the bill of rights establishes eight essential rights with the core requirements so adults will receive the same person-centered, quality care for obesity as those with other chronic conditions. As such, the bill of rights serves as a blueprint for necessary changes in medical practice and government policy, starting with actions that can happen now.

One immediate action item is pressing Congress to pass the Treat and Reduce Obesity Act (TROA), an important legislation that will allow more seniors to be treated with FDA-approved anti-obesity medications under the Medicare program. This matter is a high priority because obesity rates have nearly doubled among older adults to include two in every five Americans ages 65 and older.

Another priority is ensuring that health professionals have the prescribing information to effectively treat people with obesity when they are taking drugs for other conditions, such as depression, schizophrenia, infections, and cancer. The simple fact is that certain drugs work differently in people with obesity and the consequences can be underdosing, a delay in response time, or the drug remaining in the body too long, potentially causing side effects. For example, studies show the drug brexpiprazole (Rexulti®), which treats depression and schizophrenia, takes significantly longer to reach effective levels in people with obesity – and some patients never reach these levels. Fortunately, the same research provides an improved dosing regimen so all patients with obesity can achieve efficacy.

A different challenge involves drugs like posaconazole (Noxafil®), an antifungal often prescribed by oncologists to prevent infections. Two separate clinical trials show that obesity significantly increases posaconazole’s “half-life” – a term reflecting the amount of time it takes to rid the drug from the body. Half-life is an issue with posaconazole because many oncology medications must be delayed until the drug is out of the body’s system. Thus, if the package insert does not flag this matter when patients have obesity, doctors prescribing posaconazole may not know about the increase in half-life and start using oncology medicines too soon.

These problems are not rare, but drug labels to guide safe and effective prescribing are dismissing people with obesity. For this reason, the Obesity Bill of Rights includes language to make accurate prescribing a requirement for receiving person-centered obesity care. Moreover, because increasing research validates the consequences of “flying blind” when drugs behave differently in the bodies of people with obesity, the obesity community is raising alarm bells, supported by a position statement from the American College of Clinical Pharmacology (ACCP), which urges FDA to close gaps in the testing and approval process for new drugs intended for use by people with obesity.

However, because more immediate action is needed, five leading obesity organizations – American Society for Metabolic and Bariatric Surgery, the Obesity Action Coalition, the Obesity Medicine Association, the STOP Obesity Alliance, and The Obesity Society – issued a joint statement calling on drug manufacturers to update their labeling immediately to provide correct usage instructions for people with obesity when there should be a difference in dosing.

NCL stands with the obesity community in calling for this sensible action and urges FDA to be a catalyst in ensuring that health professionals have the prescribing information needed for their patients with obesity to take important therapeutics safely and achieve the maximum benefit. For more information, visit right2obesitycare.org.

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About the National Consumers League (NCL)

Getting a ticket to the U.S. Open: My story

September 6, 2024/in Blog, Consumer Protection consumer, FTC, junk fees, Sally Greenberg, ticketing Blog Post /by sepidehk

By Sally Greenberg, CEO of the National Consumers League

Each year, I look forward to the end of summer because I take an annual pilgrimage to the U.S. Open tennis tournament in Queens, NY. What I don’t look forward to is the process of trying to get a ticket to this event. Like millions of other fans, it always feels to me like I’m playing a rigged game designed to wring every dime of profit out of me.

In the olden days, I could stand in line at the window of the tennis center an hour before the gates opened and buy a face-value ticket with no fees attached. In those halcyon days of yore, the tickets were typically priced around $120 – 160, getting me a grounds pass and entry into the show courts, where the best matches are played.

So much for the good old days; today, there are no face-value tickets to be had. The business of selling and scalping tickets has become a corporate enterprise, with private equity firms getting in on the game as tickets get sold for sky-high prices with exorbitant junk fees tacked on for good measure.

In sum, my chances of getting a face-value ticket to the U.S. Open are about the same as my chances of seeing a dodo bird.

My effort to get tickets to the U.S. Open was as frustrating as it is familiar for millions of fans. On August 15, I searched the Ticketmaster site to see about getting a ticket to the Open on Friday, August 30. Being a good consumer, I comparison shopped by googling “U.S. Open Tickets” and up came results from SeatGeek, StubHub, and Vivid. On the official Ticketmaster site for the tournament, I could find no face-value tickets for games on the Arthur Ashe court during an in-demand weekend, just “Verified Resale” tickets.

Why were there no tickets available? This is where the lack of transparency in the ticket marketplace comes into play. Were those tickets scooped up by ticket brokers looking to turn a quick buck? Did they have special “deals” with corporate sponsors, the U.S. Open itself, or other connected insiders? Or did the brokers get their tickets with the help of illegal ticket-buying “bot” software? No one knows though FTC enforcement against several brokers in 2021 suggests this may be the case more often than not.

In the end, I knuckled under and bought two tickets from a resale site—$249.00 + $47.67 in fees each, for two tickets in the top row of a huge stadium. Even then, my ordeal was not over. I received a confusing “Good News” email telling me that the seller had transferred the tickets to me and to check the U.S. Tennis Association app, which I did. No tickets.

I checked the U.S. Open app. No tickets.

I checked the Ticketmaster app. No tickets.

I continued to check all week to no avail.

I tried reaching out to the reseller via their customer service email address and received no response. I looked for a customer service phone number to call to no avail. The event was getting close, and I began to panic.

While my story did end happily (I got my tickets), it required me to move heaven and earth (and get in touch with the company’s lobbyist) to find a resolution. This is not an option for most consumers who too often have to put up with lousy customer service to get simple problems resolved.

There are no angels in this industry. Whether buying from a reseller, Ticketmaster, or directly from the box office, consumers find themselves feeling gouged, forced to pay junk fees thanks to drip pricing, and having to put up with bad customer service operations. Just ask the millions of Oasis fans who suddenly learned what “dynamic pricing” can do to the price of a ticket.

It does not have to be this way.

The National Consumers League has long been a voice for consumers fed up with having to navigate what feels like a Rube Goldberg-esque scheme simply to get a simple ticket to a concert, theater, or sporting event.

So, what are our policy recommendations?

America needs a national all-in ticket pricing law to end hidden junk fees. The House of Representatives overwhelmingly passed the TICKET Act earlier this year, which would do just that. The Senate should follow suit.
The FTC should investigate how tickets end up on the resale marketplace. While much attention gets paid to the eye-watering price of tickets on the resale market, shockingly, little has been paid to how they get there in the first place.
Primary ticket sellers should be required to disclose how many tickets will be made available to the general public and how many are being “held back” for connected insiders.
Ticket sellers should be required to maintain 24/7 customer service phone lines to assist consumers who need help navigating the overly complicated processes for actually accessing tickets.

All of the stakeholders in the success of live events should get behind these recommendations. If fans continue to be mistreated by the industry, they’ll stop going to events, and that will be a loss for more than just this tennis fan.

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About the National Consumers League (NCL)

Labor Day’s dark reality: The alarming rise in child labor in America (Op-ed by NCL CEO Sally Greenberg was first published in USA Today, Sep 2, 2024)

September 1, 2024/in Blog, Child labor, Labor, Labor policy, Workers' Rights, Workplace safety Blog Post, child labor, Sally Greenberg Blog Post /by sepidehk

By Sally Greenberg, CEO of the National Consumers League and Chair of the Child Labor Coalition

It may seem counterintuitive to suggest that, on Labor Day, we devote our attention to a subset of the American population who should not be working, or at least not working in jobs that are entirely inappropriate for them.

According to the Department of Labor, the number of minors involved in documented child labor violations (not including the ones that are never reported) increased a mind-boggling 472 % between 2015 and 2023, with teenagers working late night shifts, too many hours, and working in hazardous environments. It can be speculated that, as labor shortages have worsened in this country, employers are turning to those under 18 to fill those gaps.

It’s not supposed to be this way.

Back in the early 20th-century industrialization era, children made up a large portion of the labor force in factories and mines. This led to inhumane abuses and demands by groups like the National Consumers League to institute legal protections. Congress responded by passing the Fair Labor Standards Act (FLSA) of 1938, which, among other provisions, limited the number of hours a minor could work, reduced their exposure to unsafe jobs, and ensured they didn’t have to work during the hours they should be in school.

This was a historic achievement for the National Consumers League, now celebrating its 125th anniversary. However, it’s a bitter reality that the organization is once again having to make child labor reforms an urgent priority.

Despite the safeguards of the FLSA, recent news reports highlight the alarming rise of child labor violations across the U.S., accompanied by a predominantly Republican and industry-led effort to attack state labor laws with the goal of weakening the FLSA. Over the past three years, twenty-eight states have introduced legislation undermining crucial protections for child laborers.

What is incomprehensible is that, instead of trying to correct a situation that is so obviously wrong, efforts have been made to weaken restrictions on hazardous work for teenagers and to extend the number of hours they can be called upon to work. Instead of trying to protect children, lawmakers are answering the calls of industry to make it easier for them to be exploited.

Children fall asleep in school today because they’ve come straight to class from working graveyard shifts. Teachers have contacted authorities when they found chemical burns on students’ limbs. A teenager had to have both legs amputated after an industrial accident while working for a construction company. And, most recently, a 16-year-old was electrocuted while working a roofing job.

We implore lawmakers to toughen existing penalties for employers who choose to ignore the law and exploit and endanger children.

On this Labor Day, it is right and necessary to ask our policymakers to renew their commitment to the health, safety, and well-being of all our children and recognize their value as a part of this country’s future instead of as a cheap source of labor.

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About the National Consumers League (NCL)

Guest blog: NCL encourages FTC to propose new rule regarding protections for franchisees in response to exclusion from the agency’s non-compete covenants

July 29, 2024/in Blog Blog Post, FTC Blog Post /by sepidehk

By Tesa Hargis, NCL summer intern

On April 24, 2024, the Federal Trade Commission (FTC) announced its final rule on non-compete covenants (the “Rule”).

Fifteen months earlier, on January 19, 2023, the FTC posted the notice of proposed rulemaking (NPRM) for the Non-Compete Clause Rule. The public comments on the proposed rule sought to answer the question of “whether the proposed rule should also apply to noncompete clauses between franchisors and franchisees.”

The Non-Compete Clause Rule comment period closed on April 19, 2023, after being extended from the original deadline of March 20, 2023. The FTC received 26,813 comments and posted 20,697 comments to the rulemaking docket.

A year after the notice and comment period for the Non-Compete Clause Rule lapsed, the FTC’s Final Non-Compete Rule was issued. The Rule bans non-compete agreements at the national level except for those between franchisors and franchisees. The Rule does, however, apply to non-competes between the employees of a franchisee.

Within the supplemental information of the Rule, the FTC explained that franchisees were excluded from the definition of “worker” within the rule because “the relationship between a franchisor and franchisee may be more analogous to the relationship between two businesses than the relationship between an employer and a worker.” However, many comments argued that franchisor-franchisee relationships are similar to employer-employee relationships because, like employees, franchisees generally lack bargaining power, and their interests are not generally protected “because franchisors generally do not entrust franchisees with trade secrets or details about their broader commercial strategy.”

The final rule ultimately does not apply to franchisor-franchisee non-competes, and those covenants remain subject to State common law and Federal and State antitrust laws.

Franchisor business practices and franchise agreements

Parallel to the comment period for the Non-Compete Clause Rule, in March of 2023, the FTC announced a separate request for public comment on franchisor business practices and franchise agreements in an effort to inform policy and enforcement efforts by hearing from a broad range of stakeholders and ensure a fair marketplace and halt unfair and deceptive franchise practices.

The comment period for the Franchise Agreements and Franchisor Business Practices closed on June 8, 2023, after being extended from the original deadline of May 9, 2023, with 5,291 comments received and 2,216 posted. A rule on Franchise Agreements and Franchisor Business Practices has yet to be proposed in response to the comment period which closed thirteen months ago.

Stakeholder comments

Franchisees such as William Kyle, who owns 14 McDonald’s franchises, have highlighted the restrictive nature of non-compete clauses in their agreements. Kyle describes his situation as a “take it or leave it” scenario, with a non-negotiable contract that includes an 18-month non-compete clause preventing him from starting a similar business within a ten-mile radius after his franchise term ends. This severely limits his ability to use his industry experience to support his family if McDonald’s denies him a contract renewal.

Similarly, Melissa Catalano, a Wellbiz Brands franchisee for over ten years, has expressed concerns about being trapped by franchisors who exploit their position. She detailed issues such as arbitrary fees, forced purchases of overpriced supplies, and restrictive policies that leave franchisees financially vulnerable and powerless.

Mark Liston, with over 40 years in the franchise sector, argues that the franchise model provides significant opportunities for business owners and should not be subjected to broad, sweeping regulations. He emphasizes that strong franchisor-franchisee relationships are mutually beneficial and that the franchise model has helped many achieve the American dream.

FTC developments

In response to the March 2023 request for public comment on franchisor business practices, the FTC released several significant statements on July 12, 2024. These include a Policy Statement asserting that certain contract provisions, such as non-disparagement and confidentiality clauses, are unlawful if they restrict franchisees’ communications with regulators. Additionally, the FTC issued Staff Guidance emphasizing that any new or increased fees not disclosed in the Franchise Disclosure Documents are likely violations of the FTC Act. The FTC also published an Issue Spotlight highlighting the top complaints from franchisees, including issues like unilateral changes to operating manuals and high default rates on SBA loans. Lastly, the FTC reopened the comment period until October 10, 2024, reflecting an ongoing commitment to addressing franchisee concerns.

Furthermore, on July 17, 2024, the FTC published an analysis detailing its stance against undisclosed “junk fees” imposed by franchisors, stating that such practices violate the Franchise Rule and Section 5 of the FTC Act. This analysis explicitly targets undisclosed fees related to marketing, training, property improvement, and other franchisor-mandated products or services. While this is a step in the right direction, the ongoing process must ensure these guidelines are actionable and that franchisors do not continue to use their size and influence to bully franchise owners.

NCL’s position

NCL strongly urges the FTC to revise its current approach by proposing new rules to better protect franchisees. The exclusion of franchisor-franchisee agreements from the Non-Compete Rule, coupled with the delay in addressing franchisor business practices, has left significant gaps in protection for franchisees. The prolonged inaction following the comment period undermines the urgency to tackle pervasive and often exploitative practices in the franchising industry.

The FTC’s recent developments, including the stance against undisclosed “junk fees” and other contract provisions that restrict franchisees, are commendable but only a starting point. NCL calls for the FTC to prioritize robust and actionable regulations that ensure fair treatment of franchisees, promote transparency, and foster a competitive marketplace. It is crucial that the FTC heeds the thousands of stakeholder comments and implements comprehensive protections to address the power imbalances and unfair practices currently faced by franchisees.

NCL recently wrote a letter to FTC Chair Lina Khan on this issue, in which we highlighted that some of the largest franchisors control their franchisees to such an extent that they are effectively operating as the owners and operators of these individual locations while leveraging the legal benefits of being a franchisor. This creates a system where they enjoy the benefits of ownership without any of the risks – which they transfer to their franchisees. We are concerned that private equity firms take advantage of U.S. franchise law, and their heavy-handed control, if left unchecked, threatens to destroy the franchise model and even ruin the American Dream for so many hardworking franchisees.

Sources

Press Release

Non-Compete Clause Rule

Non-Compete Clause Rule Rulemaking Docket

Solicitation for Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices

Solicitation for Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices Rulemaking Docket

Financial Times

TroutmanPepper

The National Law Review

Melissa Catalano Document (FTC-2023-0026-0001)

William Kyle (FTC-2023-0026-0001)

Mark Liston Document (FTC-2023-0026-0001)

The National Law Review: FTC Issues Statements Signaling Major Changes to its Oversight of Franchise Relationships and Franchise Disclosure Requirements

Lathrop GPM: FTC Takes Action Impacting the Franchise Relationship

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About the National Consumers League (NCL)

Guest blog: My background in farmwork

July 23, 2024/in Blog, Child labor, Labor Blog Post, child labor, farmworkers Blog Post /by sepidehk

By Luz Vazquez Hernandez, NCL Child Labor Coalition Summer Intern

Coming from a background of farmwork, I know the struggle against heat. At 14 years old, I began picking blueberries in Michigan during the summer, and from there on I learned to pick a variety of crops all over Michigan and my home base in Florida. I spent my weekends and any school days off – including summers – picking strawberries, squash, pickles, peppers, and jalapeños.

I learned to push my body and to handle extreme weather conditions. I suffered pains and aches that my parents felt every day. Complaining to my parents was not an option, and my body adapted.

Working in the fields during intense heat were the worst moments. Covered in layers from head to toe, with pants, a long-sleeve shirt, a hoodie, and a bandana was my daily attire. Covering most of my face, the bandana made it hard for me to breathe in extreme heat; at times, I felt my body, head, and eyes just shutting off. I felt I could not go any longer, but seeing my parents endure the heat and hold it in, I tried to do the same and distract myself from my thoughts.

It was common to see workers faint, as taking breaks in the shade and drinking water were not enough. I witnessed my mom, dad, and brother faint more than twice in 100-plus-degree weather, which always made me scared; somehow, we all managed to continue our 12 to 13-hour shifts because our paycheck depended on how many crops we picked.

We could not afford to take long lunch breaks – we often had a bite or two of lunch and a Gatorade, and then immediately went back into the fields. Before I turned 19, I stopped working as a harvester because I knew that I had greater opportunities than my parents and that farmwork was not the only job I could have. I have made it a goal of mine to share my story and continue my education so that I can help create the changes that my community needs.

I am now a rising senior at Michigan State University, and I am interning with the National Consumers League (NCL) and the Child Labor Coalition (CLC). I am grateful because I get to work closely on policies affecting my community and interests. However, knowing that I get to work inside an office with air-conditioning makes me feel guilty because I know that my parents and younger siblings are in Michigan picking crops in this summer heat, sweating, thirsty, and hoping for a cloud to bring shade to them.

As a nation, the United States needs to take immediate action to protect farmworkers from extreme heat exposure. As temperatures rise, farmworkers’ suffering is increasing. Farmworkers feed America and deserve protection.

A current legislative effort addressing heat protection is the Asunción Valdivia Heat Illness and Fatality Prevention Act, which sets standards needed to protect workers from heat, such as having drinking water accessible, requiring rest breaks, and providing access to shade. The bill would require employers to educate and train workers to recognize and prevent heat illness and mandate emergency protocols.

In a separate initiative, the Biden administration recently proposed a set of regulations to protect workers in extreme heat. The rules focus on including heat safety regulations at work, and they direct the Occupational Safety and Health Administration to help establish a nationwide protection standard. These two initiatives are vital if we want to protect farmworkers from heat illness.

After years of seeing my parents toil in the fields and working beside them, I feel the need to be an advocate for my community. Interning with the NCL and CLC, I have become acquainted with numerous congressional bills, but the Asunción Valdivia Heat Illness and Fatality Prevention Act is one that would affect me and fellow farmworkers. The work of the National Consumers League and Child Labor Coalition and groups like the National Heat Network, organized by Public Citizen, gives me hope that soon farmworkers and other outdoor workers who work in extreme heat will have safer working conditions.

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About the National Consumers League (NCL)

Understanding the transformative potential of the Juneteenth holiday

July 12, 2024/in Blog Blog Post, Sally Greenberg Blog Post /by sepidehk

By Sally Greenberg, Chief Executive Officer, NCL

As I sat in my home study and contemplated the meaning of the Juneteenth holiday last month – with all the division in the country, with states banning discussions about racial and other forms of discrimination in schools, 8 States Debat[ing] Bills to Restrict How Teachers Discuss Racism, Sexism, and a Supreme Court decision banning schools from considering affirmative action in admissions – I could be just sad. But, unexpectedly, the Washington Post brought some encouraging news.

Science Should Drive Obesity Care

Congress Must Protect Consumers from PBM Abuse

Medical debt, a growing crisis for Americans, and the Biden Administration’s bold moves to tackle it

As election looms, regulators can act now to help consumers save at the pharmacy counter

The Obesity Bill of Rights: Priorities for government action

Getting a ticket to the U.S. Open: My story

Labor Day’s dark reality: The alarming rise in child labor in America (Op-ed by NCL CEO Sally Greenberg was first published in USA Today, Sep 2, 2024)

Guest blog: NCL encourages FTC to propose new rule regarding protections for franchisees in response to exclusion from the agency’s non-compete covenants

Guest blog: My background in farmwork

Our Impact

Preventing yet another victim

Building a stronger generation

Script Your Future saved my life

For a safer workplace

Our Impact

Preventing yet another victim

Building a stronger generation

Script Your Future saved my life

For a safer workplace

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About NCL

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National Consumers League