Vermont Governor Vetoes the Vermont Data Privacy Bill

What happened?

On June 13, 2024, Governor Phil Scott vetoed HB 121, known as the Vermont Data Privacy Act (VDPA).

What are the details?

Key Bites:

• On May 10, the Vermont General Assembly passed a data privacy bill that would have initially created new data privacy obligations and restrictions for any covered entity. For our previous update:
  • Vermont Data Privacy Act Coming Soon (VensureHR)

• Governor Scott cited the “unnecessary and avoidable level of risk” that the VDPA’s enactment would have created, and noted that the bill would make “Vermont a national outlier, and more hostile than any other state to many businesses.” 

• The veto of the VDPA is significant because it would have been the 20th comprehensive privacy law in the U.S. and one to include a private right of action.

• The governor identified 3 areas of risk:
  • The bill’s “private right of action” could make Vermont hostile to many businesses and non-profits, negatively impacting mid-sized employers and causing concern among small businesses.
  • The “Kids Code” provision, while important, mirrors legislation in California that has been halted due to likely First Amendment violations. The author suggests waiting for the decision in that case before proceeding with a similar policy.
  • The bill’s complexity and unique definitions create burdens and competitive disadvantages for small and mid-sized businesses, which are already facing new pressures from recent legislation.

• The governor concludes that the bill accumulates too much risk (due to the motives expressed above). However, they suggest that if the goals are consumer data privacy and child protection, Vermont should adopt Connecticut’s data privacy law, as New Hampshire has done, for regional consistency. This would be beneficial for both consumers and the economy.

Business Considerations

• All covered entities should monitor any new law like the VDPA since the governor left the door open for a similar law to be implemented in Connecticut: this means that the legislators would probably enact a copy/paste or a similar version in the future.

Source References

• Governor Phil Scott Vetoes

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