Sunshine Laws

Sunshine laws are one of many pieces of legislation intended to hold government authorities and business entities accountable to the populations they serve. Most people are familiar with open meeting policies and the need to maintain public records for posterity, but fewer understand the origins of these laws or how they work to protect consumers from unethical practices.

What Are Sunshine Laws?

Sunshine laws (sometimes known as “open records laws”) are regulations that require government entities and businesses to maintain public transparency in their dealings. These laws mandate that many official actions undertaken by businesses or government entities must be made available for public observation, participation, or inspection.

Common actions covered under sunshine laws include meetings, votes, deliberations, records and more. Sunshine laws also require government organizations to provide sufficient notice before public meetings and hold those meetings in a convenient, accessible location.

The federal sunshine law mandate can be traced back to 1976’s Government in the Sunshine Act, driven in part by the recent Watergate political scandal and increased demand to hold the federal government accountable to its citizens. However, this wasn’t the first sunshine law on record – California’s state sunshine law (The Brown Act) actually predates the federal mandate, enacted in 1953.

Who Must Comply With Sunshine Laws?

Sunshine laws can be thought of as an “umbrella” of mandates that affect entities differently. Sunshine laws vary from state to state in terms of their specific mandates, but all 50 U.S. states have enacted some form of open meeting law for their local and state governing bodies.

For example, sunshine laws in government generally relate to open meeting policies and ensuring that information is put into the public record. On the other hand, sunshine laws for businesses more often relate to financial reporting to bodies like the U.S. Securities and Exchange Commission (SEC).

Sunshine laws apply to different organizations in different ways, such as sunshine laws in the medical field that require manufacturers to report on which items have been provided to institutions or physicians along with the value of those items. While the specific application of sunshine laws will vary across industries, most businesses will be subject to sunshine law reporting in some capacity.

Why Are Sunshine Laws Important?

Sunshine laws bring visibility to practices and help foster an open business environment built on trust. They prevent organizations from holding important referendums in secret and help hold entities accountable to the public – thereby fostering a greater sense of public trust and more accountability.

Additionally, the laws are meant to promote ethical practices among businesses and ensure that the public can view actions and hold companies to those standards.

For example, the U.S. Freedom of Information Act (FOIA) allows citizens to request certain information on themselves that has been collected by the federal government. Sunshine laws hold organizations accountable and ensure that adequate records are being kept to fulfill such requests.

Are There Exceptions to Sunshine Laws?

While the language of sunshine laws is meant to minimize exceptions, there are a few instances protected from sunshine laws. Most notably, sunshine law reporting may not apply in the following scenarios:

  • Active legal proceedings and certain aspects of law enforcement
  • Issues pertaining to national security
  • Certain commercial or financial trade secrets
  • Communications considered protected or “privileged”
  • Information that would lead to financial speculation or otherwise damage a company’s stability
  • Certain disciplinary actions that may violate personal privacy

Sunshine laws may not apply to specific entities. For example, entities with the authority to create binding laws are subject to sunshine laws, but other entities (such as simple advisory boards) may not be held to these standards.

The Bottom Line

Sunshine laws are a consumer protection mandate meant to hold entities to a higher standard of transparency, ethical practices, and accountability. For citizens, it’s a powerful protection. For businesses, it represents another compliance mandate that must be accounted for. If your company falls under a sunshine law mandate (and most healthcare companies, enterprises, and government entities do), it pays to work with vendors that can guarantee thorough and accurate data management across business communications.

Companies around the world trust LeapXpert for this very task, leveraging our secure platform to capture, archive, and access critical data points as part of a broader compliance strategy. If you’re struggling to get a handle on your compliance goals, book a demo of our platform and put our software to the test!