Amid a notable recent uptick in website accessibility cases, both threatened and filed, against financial services companies alleging violations under the Americans with Disabilities Act (ADA) and/or similar state and local laws, the US Department of Justice suggesting that all customer-facing websites may fall within the scope of the ADA, and the US Securities and Exchange Commission highlighting the need for funds to comply with accessibility requirements in connection with its now effective “tailored shareholder report” rules, financial services firms may want to review their websites and mobile applications in anticipation of continued scrutiny from both regulators and the plaintiffs’ bar.
The ADA[1] was signed into law by President George H.W. Bush on July 26, 1990, representing the nation’s first comprehensive civil rights statute prohibiting discrimination on the basis of disability. Title III of the ADA, which covers private sector businesses, prohibits discrimination (i) “on the basis of disability” (ii) “in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations” (iii) “of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.”[2]
Initially, Title III primarily covered the brick-and-mortar facilities of public-facing businesses (public accommodations), including the financial services industry, requiring that these public accommodations follow new construction standards or, for older buildings, make reasonable modifications to remove barriers to accessibility for customers with mobility, visual, hearing, or mental disabilities.
However, with consumers increasingly accessing financial and other services digitally, the scope of the ADA now may encompass online “places” including websites and mobile applications of public accommodation. Every federal court that has addressed this issue has found some legal obligation to provide accessible websites and mobile apps to customers with disabilities where there is also a tie to brick-and-mortar spaces open to the public. Whether the websites of businesses that operate exclusively online are covered by the ADA remains an open question.
Many states have also enacted their own accessibility laws, some of which allow for civil penalties and the recovery of monetary damages by plaintiffs. In California, the Unruh Act provides for $4,000 in damages per access violation, plus costs and attorney fees. Other states with similar laws authorizing individual damages include New York (state and New York City law), Colorado, Hawaii, Massachusetts, South Carolina, and Texas. Under each of these civil rights laws, the plaintiffs’ counsel is entitled to reasonable attorney fees in cases in which they prevail.
While no mandatory regulations currently exist regarding the accessibility of private sector digital technology, regulatory guidance suggests that (1) all public-facing websites, even those of entirely virtual enterprises, may be subject to Title III of the ADA and/or similar accessibility laws and (2) regulators, including the US Securities and Exchange Commission (SEC), are considering website accessibility in the context of broader rulemaking.
On March 18, 2022, the US Department of Justice (DOJ), the regulator responsible for adopting rules under the ADA and the related Rehabilitation Act of 1973, as amended, released guidance regarding the obligations of covered entities under the ADA, which suggested that all customer-facing websites are subject to Title III of the ADA and must be accessible to persons with disabilities.[3] The guidance highlights web accessibility as “a priority” for the agency and states that it is “committed to using its enforcement authority to ensure website accessibility.”
Similarly, the SEC addressed website accessibility deep in a 350-page adopting release for a rule that is only tangentially related to the online experience of investors. In October 2022, the SEC adopted rules and form amendments that require mutual funds and exchange-traded funds to provide shareholders with streamlined and visually engaging shareholder reports. The compliance date for these rules was July 24, 2024. These new tailored shareholder reports must be mailed to shareholders (if shareholders have not opted for e-delivery) and be posted to a fund’s website. Certain more detailed information is now provided on Form N-CSR and on a fund’s website.
The SEC highlighted in the final rule’s Adopting Release the importance of accessibility for investors and stated that funds are required to comply with “all applicable accessibility-related requirements under the ADA or otherwise.”[4] The Adopting Release provided no guidance as to what such compliance can or should look like.
The DOJ has thus far refrained from providing specific website accessibility standards under Title III of the ADA, instead permitting businesses to choose how they will ensure web accessibility.[5] The DOJ does, however, identify the Web Content Accessibility Guidelines (WCAG) created by the World Wide Web Consortium and the standards found in Section 508 of the Rehabilitation Act, the latter of which the federal government uses for its own websites, as “helpful guidance” for companies subject to Title III of the ADA.
WCAG Version 2.1, which the DOJ incorporated into rules adopted under Title II of the ADA, has become the prevailing global standard for website and mobile application accessibility. The WCAG provides three levels of compliance, with levels A and AA being considered mandatory on accessibility and AAA covering other “nice to have” elements that enhance usability. A new version, WCAG 2.2, was released in October 2023, introducing nine new success criteria focused on accessibility for web users with low vision, cognitive and learning disabilities, and motor disabilities, including access on touchscreen devices.
Many financial services companies have begun enlisting the help of consultants and web-development firms that specialize in providing audits and developing user interfaces that comply with the ADA, WCAG, and state regulatory requirements. At this time, most of these efforts are aimed at improving access for individuals with visual and hearing impairments; however, features that improve accessibility for mental disabilities such as ADHD are also being developed.
Examples include widgets that allow users to view websites in modes tailored to different disabilities, font size adjustment tools, text alternatives for images, synchronized video captions, compatibility with screen reading programs, and means for reporting accessibility issues.
Firms are also establishing policies and procedures related to web accessibility, adopting standards such as WCAG 2.1, Levels A and AA, and outlining periodic audits to ensure ongoing compliance.
For firms that receive a complaint alleging violations under the ADA and/or similar state and local laws, it is important to preserve relevant materials, compile all related compliance policies and reports, file claims with any insurance company that may provide coverage for the claim, and contact competent counsel with ADA public accessibility expertise.
Morgan Lewis’s more than 25-year-old national ADA practice has had a long track record of success, having handled hundreds of digital accessibility cases in numerous jurisdictions, including several putative class actions. Recently we have had several victories at trial and on appeal and a host of excellent resolutions for clients. Our team stands ready to discuss these resolutions with firms as well as potential exposure, how to prioritize remediation in a way to mitigate against the risk of litigation, and how to provide your firm with additional defenses.
Members of the Morgan Lewis team quite literally “wrote the book” on accessibility issues, having authored editions of Public Accommodations Under the Americans with Disabilities Act, Compliance and Litigation Manual, published by Thompson West.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:
[1] Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq.
[2] 42 U.S.C. § 12182(a).
[3] US Department of Justice, Guidance on Web Accessibility and the ADA (Mar. 18, 2022).
[4] Tailored Shareholder Reports for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, Rel. No. IC-34731, at 118 (Oct. 26, 2022).
[5] In a final rule announced on April 24, 2024, the DOJ adopted regulations under Title II of the ADA that clarified the obligations of state and local governments to make their websites and mobile applications accessible. The rules adopt WCAG Version 2.1, levels A and AA, and serve to outline requirements that may apply to the private sector under Title III of the ADA in the future.