OIG Says Medical Device Company’s Proposal to Pay for Exclusion Screening for Customers May Violate the Anti-Kickback Statute
On June 20, 2025, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued an unfavorable advisory opinion – OIG Advisory Opinion 25-04 (“AO 25-04”).
AO 25-04 discusses a proposal by a medical device company (the “Requestor”) to cover the costs for its customers—hospitals, health systems, and ambulatory surgery centers—to have a third-party company screen and monitor the Requestor for exclusion from federal healthcare programs. The OIG concluded that the proposed arrangement would potentially generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”).
According to the advisory opinion, some of the Requestor’s customers were either requesting or requiring, as a condition of doing business, that the Requestor pay a third-party company (the “Company”) to screen and monitor them for exclusion from federal healthcare programs. Under the proposed arrangement, the Company would charge the Requestor (and not its customers) an annual subscription fee for each customer receiving these screening and monitoring reports. The Requestor estimated this would amount to approximately $450,000 in annual fees, paid directly to the Company. The Requestor would not be a party to any agreements between its customers and the Company.
In reviewing the proposed arrangement in AO 25-04, the OIG determined that the Requestor’s proposed payment of the exclusion screening fees on behalf of its customers would implicate the AKS because the Requestor would be paying for the costs associated with a service—exclusion screening and monitoring—that its customers would otherwise incur. This payment constitutes remuneration to those customers. The OIG explained that by relieving customers of this financial burden, the proposed arrangement could induce them to purchase items or services from the Requestor that are reimbursable by a federal healthcare program. According to the OIG, the proposed arrangement “presents anti-competitive risks and risks of inappropriate steering.” Specifically, the OIG noted concern that paying the fees on a per-customer basis could improperly sway customers toward the Requestor, especially over competitors unwilling or unable to offer similar payments. In support of the unfavorable decision, the advisory opinion notes the OIG’s “longstanding and continuing concerns” about the provision of free items or services by individuals and entities, including device manufacturers, to referral sources.
While the OIG noted that a different fact pattern or structure to the arrangement might have resulted in a favorable opinion, here, with these facts – including the per-customer fee structure, the OIG cited its concern about the potential for the Company to act as a “gatekeeper” of referrals. Because customers have conditioned their business on the Requestor’s payment of the Company’s fees for exclusion screening and monitoring, the OIG noted the risk that the Requestor would pay the fees to gain access to those referrals.
We typically see hospitals and health systems as the entities performing the exclusion screening of potential vendors before entering into a contract with a vendor. In the proposed arrangement in AO 25-04, the script is flipped, with customers (i.e., hospitals, health systems, and ASCs) requiring that the medical device company from which they’re proposing to purchase items engage a third party to screen and monitor the medical device company for potential exclusion and submit reports to those customers regarding the results of such screening and monitoring.
While the OIG concedes in a footnote to AO 25-04 that there is no statutory or regulatory requirement to perform exclusion screening, the OIG’s position is that screening employees and contractors each month best minimizes potential overpayment and civil monetary penalty (“CMP”) liability. Historically, the OIG has cautioned against relying on a third party to determine whether an individual or entity is excluded and warned that a healthcare provider may still be responsible for overpayments and CMPs relating to items or services that have been ordered, prescribed, or furnished by excluded individuals or entities. However, the OIG also noted in the 2013 Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs that a healthcare provider may be able to “reduce or eliminate its CMP liability” in such situations if the healthcare provider “is able to demonstrate that it reasonably relied on the [other entity] to perform a check of the [OIG’s List of Excluded Individuals and Entities (“LEIE”)] and “exercised due diligence in ensuring that the [other entity] was meeting its contractual obligation.” One can only assume that it was the fact that customers were conditioning business on the medical device company paying the Company on a per-customer basis to do the exclusion screening and monitoring that tipped the scale to an unfavorable opinion here.
This advisory opinion serves as a reminder that any arrangement where a provider or supplier pays for services or costs that would otherwise be the responsibility of a referral source requires scrutiny under the AKS. If one purpose of the payment is to induce referrals or purchases of items and services reimbursable by federal healthcare programs, the arrangement may violate the AKS.
Best Practices When Taking Voluntary Compliance Steps Using Workforce Analytics
The Trump administration has decisively shifted its approach to enforcing employment discrimination laws, leaving employers grappling for clarity and stability to inform their efforts to prevent and manage legal risks stemming from harassment and discrimination. Workforce analytics, accompanied by privileged legal advice tethered to risk tolerance, can assist employers to identify and address potential workplace discrimination issues minimizing legal risk amid the administration’s shifting enforcement priorities.
Quick Hits
The Trump administration has sought to end both federal enforcement of antidiscrimination laws based on disparate impact theories and to eliminate employer DEI programs.
Even with these shifting priorities, it remains critically important for employers to collect and study applicant and employee demographic data to maintain compliance with equal opportunity and antidiscrimination laws, as well as to be prepared for scrutiny under the Trump administration’s shifting policies.
Employers may want to consider proactive collection and analysis of workforce demographic data, barrier analyses, and enhanced training programs to ensure compliance with equal employment opportunity and antidiscrimination laws.
The administration—largely through the issuance of executive orders (EO)—has prioritized merit-based opportunity, sought to end usage of disparate impact theories of discrimination, rescinded federal contractor obligations to provide affirmative action and discrimination protections for women and minorities, sought to eliminate “illegal” diversity, equity, and inclusion (DEI) initiatives, and focused on stopping anti-American and anti-Christian bias and combating antisemitism. The Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor (DOL), and the U.S. Department of Justice (DOJ) have all taken actions to advance the Trump administration’s policy objectives, but questions remain.
In particular, the Trump administration’s focus on discouraging the collection of applicant data related to race, ethnicity, and sex, coupled with its messaging on unlawful race and sex discrimination in DEI programs, has many employers hesitant to collect, maintain, and analyze demographic information from their applicants and employees.
This legal landscape is especially confusing for federal contractors given the wind down of EO 11246 obligations, but the administration’s new focus impacts all employers. As a result, employers face challenges complying with legal obligations and effectively managing risks associated with workplace discrimination and harassment.
However, a close review of the EEOC’s Fiscal Year 2026 Congressional Budget Justification submitted to Congress in May 2025 reveals that EEOC investigations will continue to focus on employer data. According to the budget justification, the EEOC is committed to educating and informing its own staff to “combat systemic harassment, eliminate barriers in hiring and recruitment, recognize potential patterns of discrimination, and examine and analyze these often large or complex investigations effectively.” The agency said that in fiscal year (FY) FY2026, it plans to “conduct mid and advanced level training for field staff and assist with the development of class investigations, data requests, and data analysis for pattern and practice disparate treatment cases.” (emphasis added).
The EEOC’s characterization of budget funds sought for its litigation program is also instructive. As of March 31, 2025, 46 percent of the EEOC’s litigation docket involved systemic discrimination or class lawsuits. Citing efforts to enforce EO 14173, the Commission contemplates involving “expert witnesses” and “the discovery of large-scale selection data to prove the existence and extent of a pattern or practice of discrimination.” The Commission justifies its resource request “to remedy discrimination on prioritized issues,” and argues aggressive enforcement will result in “a strong incentive for voluntary compliance” by employers.
Shifting Enforcement Targets
Employers may see an increase in EEOC charges from charging parties and Commissioner’s as well as other enforcement activities that align with the current administration’s priorities, including enforcement regarding DEI programs, so-called anti-American bias, national origin discrimination, and anti-Semitism. As just one example, the EEOC recently settled a systemic investigation into national origin and anti-American bias for $1.4 million dollars.
EEOC Acting Chair Andrea Lucas has repeatedly warned employers that EEOC focus will be on intentional disparate treatment cases where there has been a “pattern or practice” of discrimination. Like disparate impact, “pattern or practice” claims are rooted in systemic issues and typically involve the use of statistical evidence related to allegedly aggrieved individuals.
The 2024 Supreme Court decision in Muldrow v. City of St. Louis (rejecting a heightened bar for alleging an employment decision or policy resulted in an adverse impact on terms and conditions of employment) and the 2025 decision in Ames v. Ohio Department of Youth Services (rejecting a higher evidentiary standard for employees from majority groups to prove employment discrimination), have made it easier for plaintiffs to plead and prove employment discrimination claims under Title VII. The decisions seemed to have widened the doorway for more claims from individuals from majority groups (so-called reverse discrimination claims) and potentially made it easier to evade summary judgment and reach a jury trial if litigation ensues.
Moreover, federal contractors, institutions relying on federal contracts or grants, and federal money recipients face additional concerns with False Claims Act (FCA) liability. President Trump’s EO 14173, which seeks to require entities to certify for purposes of the FCA that they do not maintain unlawful discriminatory policies, namely illegal DEI policies. The DOJ has launched an initiative to use the FCA to investigate civil rights violations committed by federal fund recipients, expanding legal exposure to such employers.
Proactive Steps
Given the current legal landscape, employers may want to take proactive steps to ensure compliance with equal employment opportunity and antidiscrimination laws. These steps may include:
Collect and Analyze Demographic Data: Collecting and analyzing demographic data can be crucial for identifying and addressing disparities within the workplace and for documenting and demonstrating reasons for employment decisions or policies. While there may be concerns about collecting demographic data, such concerns may be alleviated by keeping data confidential and analyzing it under attorney-client privilege.
Barrier Analysis: Barrier analysis involves identifying and addressing obstacles that may prevent equal employment opportunities. This can include reviewing hiring practices, promotion policies, and other employment decisions that cover all aspects of the employment life cycle to ensure they do not disproportionately impact certain groups. By conducting a thorough barrier analysis, employers can proactively address potential issues before they become legal problems and remove barriers.
Review and Update Policies: Regular reviews of and updates to employers’ antidiscrimination and harassment policies can help ensure they align with current laws and the administration’s priorities, as well as employers’ values, goals, and objectives. Such reviews may include policies related to DEI, national origin discrimination, and anti-Semitism.
Provide Training: Implementing regular training programs for company leaders, managers, and employees on new antidiscrimination enforcement developments can help prevent discriminatory behavior and ensure that all employees understand their rights and responsibilities. Updating modules and examples to reflect changing priorities may help employers remain compliant. Likewise, covering a wide variety of scenarios and examples, including majority characteristics, can be important to review and include.
Next Steps
The shifting landscape of employment law presents both challenges and opportunities for employers. To be prepared, employers can stay informed on the latest actions and consider which proactive steps may be best to avoid potential liability and achieve their goals and objectives.
Big Sky State Makes Big Privacy Updates
Montana’s privacy law has received a refresh and updates will go into effect October 1, 2025 – exactly one year since the law took effect. The law was modified with SB 297, and changes include coverage, approach with minors, and more:
Broadening who is covered. Previously, Montana’s privacy law applied only to those controlling or processing the personal data of at least 50,000 Montanans. SB 297 cuts those numbers in half, bringing in any business handling the data of just 25,000 state residents or making substantial revenues off the personal data of at least 15,000 people.
Minors. As amended, businesses offering online services, products, or features to those under 18 must use reasonable care to avoid heightened risks of harm to minors. Data protection impact assessments -will also be needed if engaging in activities that might create a risk of harm to minors. As revised, companies will need to get consent from those 13-18, or from their parents if the minor is under 13, to process minors’ information for targeted advertising, certain profiling activities, or selling of personal data. There are also restrictions on geolocation information collection and using “system design feature[s]” to increase use of online services.
Narrowed exemptions. Montana has removed the broad GLBA entity-level exemption that exists in most states (joining California, Minnesota, and Oregon). There will still be an exemption for GLBA-covered information, but the only types of financial institutions that receive the entity-level exception are banks and credit unions. Montana’s law also previously exempted non-profits, but now narrows this to only non-profits that detect and prevent fraudulent acts in connection with insurance. Delaware and Oregon’s privacy laws contain similar carveouts for non-profits.
Privacy policy updates. Under the law’s revisions, privacy policies will need to explain what rights consumers have (not just that the consumer has rights) and the types of data and third parties to whom data is shared or sold. Like California, Colorado, Minnesota, and New Jersey, Montana businesses must also state the date the privacy notice was “last updated.” Privacy notice content will need to be accessible to individuals with disabilities and available in each language in which the business provides a product or service. Links to the notices must be conspicuously posted. Material changes must communicated to consumers for prospective data collection and they must be allowed to opt out of such changes.
AG and right to cure. Finally, as amended, businesses will no longer have a statutory cure period. Previously, when the AG issued a notice of violation, businesses were given 60 days to cure.
Putting it into Practice: Montana joins California, Colorado, and Virginia in making changes to its comprehensive privacy laws. Provisions to keep in mind include privacy policy content, approach with minors’ information, and who and what is covered under the law.
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SYSTEM REBOOT ON AUTODIALERS?: McLaughlin and the Future of TCPA Statutory Interpretation
Greetings TCPAWorld!
The Supreme Court dropped another surprise that’s about to turn everything upside down again. See McLaughlin Chiropractic Assocs. v. McKesson Corp., No. 23-1226, 2025 U.S. LEXIS 2385 (June 20, 2025). McLaughlin was not, in turn, about autodialers at all—it was about whether courts must consider FCC interpretations under the Hobbs Act. But what about the ripple effects for automatic telephone dialing systems (“ATDS”)? Absolutely, potentially massive.
For the past four years, we’ve all been living in the post-Facebook (Facebook, Inc. v. Duguid, 592 U.S. 395 (2021)) world where everyone pretty much agreed on what an automatic telephone dialing system actually means. The Supreme Court seemed to settle the matter: to qualify as an ATDS, your equipment must have the capacity to store or produce telephone numbers using a random or sequential number generator and then dial those numbers.
That narrow interpretation was huge for businesses that had been facing significant challenges from TCPA class actions. Before this clarification, plaintiff attorneys were arguing that any system capable of storing phone numbers and dialing them automatically—such as a smartphone, a basic CRM system, or even predictive dialers calling from customer lists—could qualify as an ATDS. The Supreme Court’s grammatical analysis put an end to that madness by concluding that “using a random or sequential number generator” modifies both “store” and “produce,” meaning you need the random generation component for either function.
But here’s where McLaughlin comes in and changes everything we think we already know. Justice Kavanaugh’s majority opinion established a principle that will reshape how every TCPA case is litigated: district courts must independently interpret statutes under ordinary principles of statutory construction, giving only “appropriate respect” to agency interpretations. This is not a minor shift at all, as it explicitly disclaims the view that district courts are bound by FCC interpretations in private TCPA actions. WOW!
Now let’s not put the cart before the horse. That means the FCC no longer controls how district courts interpret the TCPA, although its guidance may still be considered persuasive.
This represents a gigantic shift from the old days, when FCC orders interpreting the TCPA were treated as binding under Hobbs Act jurisdictional preclusion. District courts previously could not disagree with FCC interpretations because challenges had to go to the courts of appeals. Now, following McLaughlin and last year’s Loper Bright decision, which eliminated Chevron deference entirely, federal judges must do the hard work of statutory interpretation themselves.
So what does this mean for ATDS? While Facebook settled the core definition at the Supreme Court level, there were still plenty of gray areas that the FCC had been filling in with guidance and interpretations. Now, district courts can look at those same issues with fresh eyes. See the challenge here? This will no doubt create new circuit splits and ALOT more unpredictability.
Post-McLaughlin, one district court might look at the statutory text and decide that “capacity” means what you can do right now, not what you could theoretically do with software modifications. Another court three states over might stick closer to the FCC’s broader interpretation. Yet another might split the difference and require some middle ground between current functionality and theoretical potential. Suddenly, we’re back to forum shopping and conflicting precedents across jurisdictions, with plaintiffs rushing to file in friendly districts while defendants attempt to relocate cases to more favorable venues.
Then there’s the question of human intervention. FCC guidance has generally stated that if a human must initiate every call, you’re probably not dealing with an ATDS. But how much human involvement is enough? What if a person loads the contact list, but the system dials automatically? What about click-to-call platforms where humans trigger each individual call? These cases, which seemed settled under FCC guidance, are now fair game for independent judicial interpretation.
The world of predictive dialing is an exciting one. Modern predictive dialers that operate from stored customer lists were largely exempted after Facebook, as they don’t use random generation. But there are still cases—systems that use algorithms to select numbers sequentially within targeted lists, or platforms that employ some mathematical progression that might arguably qualify as “sequential.” Without FCC deference, creative plaintiff attorneys can argue these distinctions to judges who might see things differently than the agency.
And don’t get me started on platform-specific technologies. Peer-to-peer texting systems, automated appointment scheduling, click-to-call functionality—all these technologies that the FCC has weighed in on over the years are now subject to fresh judicial analysis. A district judge unfamiliar with a specific platform may interpret the statutory language differently from an agency with telecommunications expertise.
The implications extend beyond federal courts as well. It’s only fitting that I talk about Florida, my home state. Florida’s Telephone Solicitation Act (“FTSA”) is likely the best example of how states have been attempting to fill the gap and narrow the federal interpretation. The FTSA initially defined prohibited technology as “an automated system for the selection or dialing of telephone numbers”—notice the “or” instead of “and,” and the complete absence of any random or sequential number generation requirement.
Florida amended the law in 2023 to require systems that both select and dial numbers; however, this still doesn’t incorporate the TCPA’s requirement for random or sequential number generation. You’ve got a peculiar situation where technology that’s perfectly legal under federal law may still be considered a violation of Florida state law. The McLaughlin principle doesn’t directly affect how state courts interpret state statutes. Still, it certainly signals a broader trend toward judicial skepticism of agency interpretations that extend beyond what the actual statutory text states.
Speaking of that trend, we just saw another example play out in real time. The Eleventh Circuit’s decision in Insurance Marketing Coalition v. FCC struck down the FCC’s one-to-one consent rule, essentially telling the agency that it had overstepped its authority. See Ins. Mktg. Coal. Ltd. v. FCC, 127 F.4th 303 (11th Cir. 2025). The reasoning there—that agencies can only “reasonably define” statutory provisions without altering them—sounds awfully similar to the McLaughlin approach.
So, how will this ultimately play out? I’m glad you asked. For defense attorneys, McLaughlin opens up a whole new playbook. Instead of having to work around FCC interpretations of ATDS scenarios, you can now argue directly from statutory text and context. Got a client using technology that stores numbers but doesn’t generate them randomly? Make the textual argument. Using a system with human intervention that the FCC once deemed “automated”? Point the court to the text. Using some algorithmic selection that doesn’t quite fit the random/sequential concept? Time to get creative with statutory interpretation.
The flip side is that plaintiff attorneys also gain new opportunities. They can argue for broader textual interpretations of ATDS without having to overcome existing FCC guidance. The whole question of what “capacity,” “production,” and “storage” mean in the context of modern technology is back on the table.
From a compliance perspective, this creates a much more complex landscape. It used to be that if you followed FCC guidance, you had a pretty good safe harbor. Now you’ve got to think about how different district courts in different jurisdictions might independently interpret the same statutory language. For instance, compliance that works perfectly in the Ninth Circuit might change drastically in the Fifth Circuit, not because the law changed, but because different judges reached different conclusions about what Congress meant when it wrote about ATDS.
This all fits into the constraining of administrative power and the return of interpretive authority to the judiciary. Following Loper Bright’s elimination of Chevron deference and McLaughlin’s limitation of Hobbs Act preclusion, we’re witnessing a fundamental rebalancing toward judicial supremacy in statutory interpretation. Bottom line for anyone in the TCPA space, this means possibly less predictability in the short term, but potentially more sophisticated, text-based analysis over time. Exciting stuff!
New Jersey BPU Launches Multi-Phase Energy Storage Incentive Program
Key Takeaways:
PJM-ready projects are a must. Eligible projects must (1) be transmission-connected (PJM bulk power system) and located in a New Jersey transmission zone; (2) have PJM interconnection approval (or capacity interconnection rights (CIRs) from a deactivating facility); and (3) commit to a commercial operation date (COD) within 30 months of application period close (plus a 150-day grace period). To reach a COD, the project must be fully constructed and interconnected to the PJM transmission network.
Site control and permitting matter as developers must demonstrate they are ready to secure all required approvals.
Brownfield redevelopment, community benefits and environmental attributes may be favored over lower bid levels.
The New Jersey Board of Public Utilities (BPU) approved Phase 1 of the Garden State Energy Storage Program (GSESP) after two years of stakeholder engagement. Rules related to the GSESP were also approved for publishing in a future New Jersey Register. Phase 1 is the first of a new, multi-phase incentive program to support the development of 2,000 megawatts (MW) of energy storage by 2030, as required under the Clean Energy Act of 2018 (P.L. 2018, c.17). This is a significant milestone in New Jersey’s energy policy, allowing the integration of intermittent renewable energy sources and a critical opportunity for energy storage developers to secure long-term, fixed-price incentives.
Phase 1 targets transmission-scale, front-of-the-meter energy storage systems. Distributed storage incentives will follow in Phase 2 (expected in 2026). Below is a comprehensive breakdown of what developers need to know.
Phase 1: Transmission-Scale Storage Solicitation
To align with the pending New Jersey Assembly Bill A-5267 that would require the BPU to establish a transmission-scale energy storage procurement and incentive program, the BPU limited Phase 1 incentives to transmission-scale energy storage systems, directly interconnected to the bulk transmission system. Both standalone storage and storage additions to existing solar, solar-plus-storage and other Class I renewable energy resources (solar, geothermal electric generation, landfill gas, biogas, etc.) are eligible provided they are not already receiving incentives from the Competitive Solar Program. Despite a call for increased utility involvement and ownership of energy storage systems, the BPU will limit Phase 1 incentives to private (non-EDC) and governmental entities.
Additional components of Phase 1 include:
Final awards will determine eligible projects and the size of each project’s incentive award.
Payments will be made annually over a 15-year term.
“Pay-as-bid” model bidding process where developers propose a fixed annual incentive (e.g., $/MW/year) for providing energy storage capacity. The projects awarded funding are those that offer the lowest incentive cost per MW, promoting cost-effectiveness.
Initial solicitation (“Tranche 1”) aims to procure 350–750 MW.
Total Phase 1 goal is 1,000 MW of transmission-scale storage.
The prequalification review for deficiencies for Phase 1 applications opens on June 25, 2025, with a deadline for guaranteed review of July 23, 2025. Final bids are due by August 20, 2025. The BPU will announce awards in October 2025.
Phase 2: Distributed Storage Coming in 2026
Developers with behind-the-meter or distribution-level assets should prepare for Phase 2 in 2026. Expected features include distributed fixed incentives (capacity-based), distributed performance incentives (likely grid-service or dispatch-based), participation from distributed energy resource aggregators and systems co-located with rooftop solar and EVs, and prioritization of projects that serve overburdened communities or improve distribution system resilience.
Trade Secret Law Evolution Podcast Episode 78: When Are Misappropriators Dangerous Enough to be Enjoined? [Podcast]
In this episode, Jordan discusses a recent case from the Southern District of New York where an injunction was partially granted on a breach of contract claim but not on the trade secret claim. The Court found the plaintiffs didn’t make a sufficient showing on irreparable harm, based on a lack of “danger” that the misappropriator would disclose the trade secrets to someone else.
Ohio Leads the Way Allowing Employers to Post Digital Labor and Employment Notices
On July 20, 2025, Ohio will officially become one of the first states to allow employers to provide digital—rather than physical—copies of certain labor law notices required under Ohio law.
Specifically, under changes imposed by Senate Bill 33 (SB 33), Ohio will soon allow employers and businesses to post the following Ohio notices digitally:
Minor Labor Laws
Minimum Fair Wage Standards Law
Civil Rights Law
Prevailing Wage Law
Workers’ Compensation Law
Public Employment Risk Reduction Program Law
Employers who choose to adopt a digital format must do so in a way that is accessible to all employees, such as posting the notices to an intranet site, an employee portal, or an employee accessible webpage (in each case, ensuring accessibility for employees with disabilities). Importantly, if an employer elects to provide digital notices, SB 33 requires an employer to also post the Ohio Civil Rights Law notice on the internet “in a manner that is accessible to the public.”
In contrast to a similar law enacted by New York State in 2022, SB 33 does not require Ohio employers to use digital notices; instead, employers may still choose to post physical copies of the notices in high traffic areas such as break rooms or on bulletin boards. Additionally, SB 33 does not change any requirements under federal law to physically post certain employment-related notices.
In determining whether to provide digital notices, employers should consider:
how the employer intends to communicate any changes to its workforce. For instance, employers may want to incorporate the notices and directions on how to access the notices in their onboarding materials;
whether the employer’s digital platform is reliable; employers should avoid using systems that frequently render the notices inaccessible or unavailable; and
whether the employer needs to maintain physical postings to comply with other state or federal laws.
Reminder: California Healthcare Minimum Wage Increase Effective July 1, 2025
Employers in the healthcare industry in California are subject to a separate minimum wage from other employers.
Effective July 1, 2025, certain healthcare facilities will see an increase in their minimum wage rates. The following is a summary of the increases based on the type of employer.
Type of Healthcare Employer
Current Rate
Increased Rate
Hospitals or Integrated Health Systems with 10,000 or more full-time employees, including skilled nursing facilities operated by these employers
$23
$24
Dialysis Clinics
$23
$24
Covered Health Care Facilities run by large counties with more than five million people as of January 1, 2023
$23
$24
Hospitals with 90% or more of their patients paid for by Medicare or Medi-Cal
$18
$18.63
Independent Hospitals with 75% or more of their patients paid for by Medicare or Medi-Cal
$18
$18.63
Rural Independent Covered Health Care Facilities
$18
$18.63
Covered Health Care Facilities run by small counties with fewer than 250,000 people
$18
$18.63
While several categories of healthcare employees will receive a minimum wage increase in July 2025. The following categories of healthcare employers will not have a minimum wage increase until July 2026:
Intermittent clinics, community clinics, rural health clinics, or urgent care clinics associated with community or rural health clinics
Covered Health Care Facilities run by Medium Sized Counties (250,000 to five million people as of 1/1/23)
Skilled Nursing facilities not owned, operated, or controlled by a hospital, integrated health care delivery system, or health care system
All other covered health care facilities not listed in the other categories and not run by Counties
Who is Covered?
The definition of “health care employee” is broad, encompassing a wide range of roles within healthcare facilities. This includes employees who provide patient care, health care services, or services supporting the provision of health care. Examples of covered roles include:
Nurses
Physicians
Caregivers
Medical residents, interns, or fellows
Patient care technicians
Janitors
Housekeeping staff
Groundskeepers
Guards
Clerical workers
Non-managerial administrative workers
Food service workers
Gift shop workers
Technical and ancillary services workers
Medical coding and billing personnel
Schedulers
Call center and warehouse workers
Laundry workers.
DOJ Civil Division Prioritizes Denaturalization in New Enforcement Memo
On June 11, 2025, the U.S. Department of Justice (DOJ) Civil Division issued an internal memorandum outlining its latest enforcement priorities. The memo, signed by Assistant Attorney General Brett Shumate, directs DOJ attorneys to advance the administration’s goals through targeted civil enforcement. One of the priorities highlighted in the memo is denaturalization, or the process of revoking U.S. citizenship acquired through naturalization.
The memo outlines several areas of civil enforcement the DOJ plans to prioritize, including litigation involving alleged violations of federal civil rights laws by recipients of federal funds, enforcement actions related to antisemitism, investigations into gender-related health care practices, and challenges to state or local policies that conflict with federal immigration law (sanctuary jurisdictions). Denaturalization is identified as a key area of focus for enforcement.
What Is Denaturalization?
Denaturalization is a civil action used to revoke U.S. citizenship from individuals who obtained it unlawfully. Under federal law (8 U.S.C. § 1451), the government may initiate proceedings in federal court when it believes someone was ineligible for naturalization or obtained citizenship by concealing or misrepresenting key facts. The individual has the right to legal representation, and the government carries the burden of proof. If successful, denaturalization may result in the loss of citizenship and eventual removal from the United States.
Although this legal tool has existed for decades, it has traditionally been used sparingly and reserved for exceptional cases—typically involving individuals linked to war crimes, terrorism, or major immigration fraud.
Renewed Enforcement Emphasis
Over the past several years, denaturalization has received increased attention as an enforcement tool. During the first Trump administration, the DOJ expanded its focus on identifying cases in which naturalization may have been obtained through fraud or serious misconduct, and a dedicated Denaturalization Section was established in 2020 to pursue a broader range of denaturalization actions.
The June 2025 memo continues that trajectory, directing Civil Division attorneys to “prioritize and maximally pursue denaturalization proceedings in all cases permitted by law and supported by the evidence.”
Categories of Focus
To guide enforcement efforts, the memo outlines 10 categories of individuals whose cases should be prioritized. These include:
Individuals who pose a threat to national security, including those connected to terrorism, espionage, or unlawful export of sensitive U.S. technologies;
Human rights violators, such as individuals involved in war crimes or torture;
Affiliates of transnational criminal organizations, gangs, or drug cartels;
Individuals who committed serious criminal offenses that were not disclosed during the naturalization process;
Those convicted of human trafficking, sex offenses, or violent crimes;
Individuals who engaged in fraud involving U.S. government programs (e.g., Paycheck Protection Program or Medicaid/Medicare fraud);
Individuals who committed large-scale financial fraud against private entities;
Cases involving citizenship obtained through bribery, misrepresentation, or other corruption;
Cases referred by U.S. Attorney’s Offices in connection with other criminal charges; and,
Any other case the Civil Division determines sufficiently important to pursue.
The list is not exhaustive. The memo makes clear that the DOJ retains discretion to pursue denaturalization in other cases where it deems enforcement appropriate.
Takeaways
While the legal standard for denaturalization remains high, the memo makes clear that the Civil Division plans to take a more proactive approach in cases involving suspected fraud or misconduct. For those who have already naturalized—or for lawful permanent residents preparing to apply—it reinforces the importance of ensuring the process is completed accurately and with care.
Although denaturalization actions remain relatively uncommon, they appear to be a more visible part of federal civil enforcement. For individuals navigating the naturalization process, or revisiting concerns about past filings, this development highlights the importance of accuracy and full compliance. Working with experienced immigration counsel may help ensure the process is completed properly and may reduce the risk of issues arising later.
6 Tips for Government Contractors to Avoid, Neutralize, and Mitigate Organizational Conflicts of Interest
Organizational conflicts of interest (OCIs) continue to be a critical compliance risk in the federal contracting landscape. The Federal Acquisition Regulation (FAR) mandates that contracting officers “avoid, neutralize, or mitigate” OCIs to ensure that government decisions are made objectively and without improper influence. For contractors — especially those engaged in professional services, systems engineering, or technical support — the presence (or even the appearance) of an OCI can lead to lost contract awards, contract terminations, or bid protest challenges. Below are six key tips to help contractors proactively address OCI risks throughout the procurement lifecycle.
1. Understand the Three Core Types of OCIs
Before you can avoid or mitigate an OCI, you need to know what you’re dealing with. The FAR and related case law recognize three primary categories of OCIs:
Biased Ground Rules – Occurs when a contractor helps draft or otherwise shape the requirements for a solicitation, potentially skewing the competition
Impaired Objectivity – Arises when a contractor’s judgment in evaluating products or services could be compromised due to other business interests
Unequal Access to Information – Happens when a contractor gains non-public, competitively useful information through prior or existing work, giving it an unfair advantage
Being able to spot which type may be implicated is essential for crafting an effective compliance strategy.
2. Conduct an Internal OCI Assessment Early
OCI issues often surface during proposal development or after award — both high-risk times for your business. Thus, contractors should instead conduct a pre-proposal OCI screening for each opportunity, reviewing:
Prior or current contracts that may overlap in scope or subject matter
Involvement in drafting the solicitation or advising the agency
Subcontractor or teaming partner relationships that may raise OCI concerns
This due diligence should be documented and updated regularly, especially if organizational changes occur.
3. Develop and Maintain an OCI Compliance Plan
An effective OCI mitigation or avoidance strategy often hinges on a written, proactive plan. Key components should include:
Firewalls – Clearly separate personnel and systems to prevent the flow of non-public or sensitive information
Screening Procedures – Pre-assignment reviews to ensure staff are not conflicted
Non-Disclosure Agreements (NDAs) – Ensure employees, subcontractors, and teaming partners sign NDAs specific to each project
Training – Regular OCI training for staff involved in proposal development, contract performance, and business development
The existence of a documented and credible plan can also be persuasive in responding to agency inquiries or protest allegations.
4. Engage with the Contracting Officer Early
If there’s any ambiguity about a potential OCI, it’s usually best to disclose the issue to the agency up front. FAR Subpart 9.5 requires that contracting officers identify and resolve OCIs. Voluntary disclosure shows good faith and allows you to shape the narrative and propose your own mitigation approach, rather than waiting for the agency or a protester to define the issue for you.
5. Tailor Mitigation Strategies to the Specific Conflict
Not all OCIs are created equal — and not all can be mitigated. But where mitigation is appropriate, it is important to be specific. Generic assertions of “firewalls” or “screening” will not suffice. Instead, provide information such as:
Named individuals responsible for OCI compliance
Details of data segregation procedures
Timing and documentation of mitigation efforts
Evidence that mitigation measures are in place and effective
Tailored mitigation is often the difference between staying in the competition and being eliminated.
6. Stay Vigilant Post-Award
OCI compliance doesn’t end when the contract is awarded. Performance-related conflicts may arise if your company acquires a new business, hires former government officials, or is awarded additional work. Regular internal reviews, coupled with clear communication with the contracting officer, are essential to staying on the right side of FAR 9.5.
Conclusion
OCIs are a complex and evolving area of government contracts law — but they’re not insurmountable. With proactive planning, robust internal controls, and open communication with the government, contractors can avoid or mitigate even complex OCI scenarios. Failing to do so, however, can result in costly bid protests, reputational damage, and lost opportunities.
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SEC’s New Concept Release on Foreign Private Issuer Standards
On June 4, the US Securities and Exchange Commission (SEC) published a concept release soliciting public comment on potential amendments to the definition of foreign private issuer (FPI) under US securities laws.
This marks the SEC’s first comprehensive review of the FPI regulatory framework since 2008 and comes in response to shifts in the composition and overseas regulatory oversight of foreign issuers accessing US capital markets.
View concept release here.
Overview
The FPI regime was originally designed to accommodate foreign companies subject to meaningful home country regulation and whose securities were primarily traded in non-US markets. In recent years, however, the SEC has observed a marked increase in FPIs that are incorporated in jurisdictions with limited regulatory oversight with most of their equity trading occurring exclusively on US exchanges. According to the concept release, approximately 55% of Exchange Act reporting FPIs had little or no trading of their equity securities outside the United States.
The SEC is concerned that the current FPI definition may no longer ensure that only those issuers subject to robust foreign regulation and oversight benefit from the significant accommodations and exemptions available to FPIs, potentially disadvantaging US domestic issuers and reducing investor protections.
Proposals Under Consideration
The concept release seeks public input on possible approaches to revising the definition of an FPI. For example, the SEC is considering revising the existing two-prong test by lowering the US ownership threshold or tightening business contact requirements. Proposed updates also include introducing a minimum foreign trading volume requirement, mandating that FPIs maintain a listing on a major foreign exchange, and limiting FPI status to issuers from jurisdictions with robust regulatory frameworks and local disclosure requirements. Additional measures under consideration involve expanding mutual recognition systems to more countries with comparable standards and requiring that an FPI’s home country securities regulator participate in international cooperation arrangements to enhance cross-border enforcement.
Key Takeaways
If adopted, these changes could have far-reaching consequences for both existing and prospective FPIs.
A substantial number of current FPIs, especially those incorporated in the Cayman Islands, the British Virgin Islands or headquartered in China, may lose their FPI status and become subject to the more rigorous reporting, governance, and disclosure requirements applicable to US domestic issuers.
Affected issuers would need to comply with quarterly reporting requirements, US proxy rules, Regulation FD, Section 16 insider reporting, and to present financial statements in accordance with US generally accepted accounting principles.
The transition could create significant compliance and operational challenges, particularly for issuers with limited experience in US domestic reporting.
The SEC is also seeking input on appropriate transition periods and the potential market and investor impacts of any changes.
Additional Author: Jai Williams
SCOTUS Says District Courts Are Not Bound by FCC Orders Interpreting the TCPA
On June 20, 2025, the U.S. Supreme Court delivered an opinion that could dramatically change the landscape of class actions under the Telephone Consumer Protection Act (TCPA).
In the case—McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation—the Court held that the Hobbs Act does not bind district courts in civil enforcement proceedings to accept an agency’s interpretation of statutes such as the TCPA. The Court emphasized that district courts “instead must determine the meaning of the law under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation.” More directly, the FCC’s word is not the last in determining the TCPA’s definitional and liability standards.
The underlying case involved a dispute as to whether the district court was bound to follow an FCC order that “an online fax service is not a ‘telephone facsimile machine’” actionable under the TCPA. The district court ultimately decided that the FCC’s ruling was “a final, binding order” dictating how the law must be applied. The Ninth Circuit affirmed that decision.
A 6-3 Supreme Court majority, however, held that both lower courts got it wrong. District courts are not barred from independently assessing whether the FCC’s interpretation of the statute is correct and, in fact, categorically refusing to interpret the statute is error.
Suddenly with the Court’s decision, decades of FCC orders—as well as years of judicial precedent adopting the FCC’s interpretation of the law—are called into question. New battlegrounds are sure to arise as litigants seek to redefine “correct” interpretations of the TCPA’s requirements, including with respect to definitional language in the statute, its applicability to text message communications, and the scope of consent and opt-out compliance requirements under the law.
A three-justice dissent, led by Justice Kagan, notably raises concern with the majority’s holding, finding that the decision will lead to regulatory uncertainty, undermine the stability of administrative programs, and cause parties to disregard pre-enforcement agency orders.
Whatever the end result may be, there should be no dispute that McLaughlin will change how parties previously litigated TCPA class actions, and it opens opportunities for defense attorneys to make new arguments protecting clients against massive TCPA liability risks moving forward.