Polsinelli Insights from Supreme Court Oral Arguments Yesterday Concerning FOIA Disclosure Obligations

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By: Connie N. Bertram and Jack Blum

On April 22, 2019, the U.S. Supreme Court heard argument in Food Marketing Institute v. Argus Leader Media.  Polsinelli attended the oral arguments to provide insight concerning the potential implications for federal government contractors that submit data to OFCCP.

In that case, a grocery store trade association challenged lower court decisions requiring the disclosure through Freedom of Information Act (FOIA) of data concerning food stamp purchases at the individual store level.  Although the case does not involve disclosures by OFCCP, a victory for the challenger would enhance the ability of contractors to protect confidential workforce data submitted to OFCCP from FOIA disclosure.

Contractors facing OFCCP audits are required to provide sensitive employment-related data, including compensation data.  To prevent this data from being disclosed to competitors or others pursuant to a FOIA request, contractors and their counsel typically rely on FOIA’s Exemption 4, which prevents the disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 

In the Food Marketing Institute case, the trade association is challenging lower courts’ rulings concerning Exemption 4, which require that a party resisting the disclosure of confidential information under it show that the disclosure would cause “substantial competitive harm.”  If the Supreme Court rules that such a showing is not required, a contractor submitting data to OFCCP would only be required to show that it takes steps to protect its compensation and other workforce data from disclosure to fall within the exemption. 

Although it is difficult to forecast the Supreme Court’s ultimate decision based on the justices’ questions and comments, several justices appeared skeptical of the “substantial competitive harm” requirement, noting that it lacks support in Exemption 4’s text.  The questioning also suggested that several of the justices believe that Exemption 4 requires the information holder to take affirmative steps to maintain confidentiality, rather than simply deeming or labeling it as confidential without more.

Polsinelli will continue to monitor the case in anticipation of the Supreme Court’s decision.  In the meantime, contractors should consult with experienced counsel to ensure that they are implementing best practices to safeguard sensitive data and support a claim of confidentiality under Exemption 4.