Nine PFAS Compounds Added to EPA TRI List
EPA has added nine additional per- and polyfluoroalkyl substances (PFAS) compounds to Toxic Release Inventory (TRI) reporting requirements for facilities that release the compounds into the environment. The TRI program requires companies that release quantities of toxic chemicals above the regulatory threshold amounts to report how much they release each year.
This program is part of the Environmental Protection Community Right-to-Know Act, which maintains a publicly accessible database of the companies that release the chemicals, how much of each chemical is released and the location of the facilities. The program was created in 1986 in response to the release of toxic methyl isocyanate gas in Bhopal, India in 1984, which killed thousands of people in what was one of the worst industrial disasters in history.
The newly added PFAS compounds were added for Reporting Year 2025 under the framework for the automatic addition of PFAS to TRI created by the Fiscal Year 2020 National Defense Authorization Act. These nine PFAS compounds are:
Ammonium perfluorodecanoate (PFDA NH4)
Sodium perfluorodecanoate (PFDA-Na)
Perfluoro-3-methoxypropanoic acid
6:2 Fluorotelomer sulfonate acid
6:2 Fluorotelomer sulfonate anion
6:2 Fluorotelomer sulfonate potassium salt
6:2 Fluorotelomer sulfonate ammonium salt
6:2 Fluorotelomer sulfonate sodium salt
Acetic acid
The new compounds join the 197 PFAS compounds previously listed by the EPA. According to the EPA, “As of Jan. 1, facilities that are subject to reporting requirements for these chemicals should begin tracking their activities involving these PFAS as required by Section 313 of [EPCRA]. Reporting forms will be due by July 1, 2026.”
New York State’s Fashion Workers Act Effective Summer 2025
Governor Hochul signed legislation titled the “New York State Fashion Workers Act” (the “Act”), which has a widespread impact on the modeling industry as it relates to compensation, contractual restrictions, and other workplace protections. The Act takes effect on June 19, 2025.
Applicability
The Act is geared towards protecting models, regardless of employee or independent contractor status. The Act aims to close any loopholes by placing affirmative requirements and restrictions on model management companies and their clients. Model management companies include those persons or entities engaged in the management, procurement, or counseling of models. The Act applies to clients of model management companies, including retail stores, manufacturers, clothing designers, advertising agencies, photographers, publishing companies or any other person or entity that receives modeling services.
Requirements and Prohibitions for Model Management Companies
All model management companies must register with the New York Department of Labor within one year of the effective date of the Act, by June 19, 2026. After the registration is complete, the model management company must post their certificate of registration in a conspicuous place within their physical office and on their website. Model management companies may file a request for exemption if it: 1) submits a properly executed request for exemption; 2) is domiciled outside of New York and is licensed or registered as a model management company in another state that has the same or greater requirements as the requirements under this Act; and 3) does not maintain an office in New York or solicit clients located or domiciled within New York. The registration and exemption status only lasts for a two-year period. Notably, if the management company employs more than five employees, then it must post a surety bond of $50,000.
The Act broadly imposes a fiduciary duty upon model management companies that is owed to their models. Acting in good faith, model management companies must, inter alia, conduct due diligence, procure opportunities, provide final agreements to models at least twenty-four hours prior to the start of modeling services, disclose any financial relationship with a client, and identify their registration number in any advertisement (including social media). The Act seeks to provide transparency to models’ compensation by requiring the management companies to clearly specify costs that the model must reimburse and providing the model with supporting documentation of those costs on a quarterly basis. The management companies must ensure that employment of a sexual nature or involving nudity complies with state civil rights law. The Act also considers the management company’s past and future use of images. For former models, the Act requires the management companies to send a written notification to the models informing them if the company continues to receive royalties. For future use of a model’s image, the management company must obtain a written consent separate from the representation agreement that details the creation, use, duration, scope and rate for that digital replica.
The Act also prohibits management companies from engaging in certain activities. Among prohibitions related to compensation and fees, the Act prohibits a contractual term greater than three years and prohibits the contract from automatically renewing without affirmative consent from the model. The model management companies are prohibited from taking more than twenty percent of a commission fee. Model management companies are prohibited from discrimination, harassment and retaliation. A new topic of interest is the Act’s prohibition on altering the model’s digital replica using artificial intelligence. Finally, the Act specifies that a management company cannot present a power of attorney agreement as a necessary condition to working with the management company.
Requirements of Clients
The language of the Act establishes client responsibilities owed to models as it relates to compensation and safety. Clients should be aware that if a model works over eight hours in a twenty-four-hour period, they must receive overtime pay and they must receive at least one thirty-minute meal break. Clients must only offer opportunities that do not pose an unreasonable risk of danger, ensure that work opportunities of a sexual nature or involving nudity comply with civil rights law, and allow the model to be accompanied by a representative to any work opportunity.
Causes of Action and Penalties
Under the Act, models have a private right of action in addition to the enforcement authority of the commissioner and attorney general. The Act provides a six-year statute of limitations. The commissioner may impose penalties of $3,000 for the initial violation and $5,000 for subsequent violations. Before a court of competent jurisdiction, a plaintiff may obtain actual damages, reasonable attorneys’ fees and costs, and liquidated damages up to 100% for non-willful violations and up to 300% for willful violations.
Conclusion
In anticipation of the Act going into effect, model management companies should thoroughly review and update their policies and practices and prepare to register or seek an exemption. Likewise, businesses that hire models should review their practices and revise policies as necessary to ensure compliance with the Act.
Immigration Insights Episode 3 | The Intersection of Employment and Immigration Law in the Employee Hiring and Termination Process [Podcast]
In this episode of Greenberg Traurig’s Immigration Insights series, host Kate Kalmykov is joined by GT colleague and Labor & Employment Shareholder Galit Kierkut to discuss the intersection of employment and immigration law in the employee hiring and termination process. They discuss employment at will, interviewing, compensation, Form I-9 requirements & E-Verify, and terminations.
Immigration Insights Episode 4 | Bank Compliance and Investment Immigration: A Discussion with Metropolitan Commercial Bank [Podast]
In this episode of Greenberg Traurig’s Immigration Insights series, host Kate Kalmykov is joined by James Sozomenou, Co-Head of Metropolitan Commercial Bank’s EB-5 Private Client Group, to discuss an overview of EB-5 and new integrity measures in the RIA. Together, they highlight how the RIA impacts services banks offer to regional centers, working with fund administrators, compliance on behalf of investors, and ways foreign nationals work with banks.
ISS and Glass Lewis Announce Compensation-Related Updates For 2025 Proxy Season
Recently, Institutional Shareholder Services (“ISS”) released updates to its voting policies for 2025, including new and updated responses to its Compensation Policies FAQs and new Value-Adjusted Burn Rate Benchmarks (based on company size and industry) in its Equity Compensation Plans FAQs. These updates follow the off-cycle update that ISS announced for its Compensation Policies FAQs this past October, which we reported on here. Similarly, Glass Lewis (“GL”) also recently released its annual Benchmark Policy Guidelines for 2025. Consistent with the last few years, this year’s updates by ISS and GL reflect incremental, rather than transformational, changes to their respective policies relating to compensation practices.
ISS COMPENSATION POLICIES FAQ UPDATE
Evaluation of Performance-Vesting Equity Awards. Beginning with the 2025 proxy season, ISS will place greater scrutiny on the disclosure and design aspects of performance-vesting equity. In particular, this greater scrutiny will be applied to companies that exhibit a quantitative pay-for-performance misalignment. ISS also provided a non-exhaustive list of typical considerations it will take into account when reviewing the disclosure and design aspects of performance-vesting equity:
Non-disclosure of forward-looking goals (highlighting that retrospective disclosure of goals at the end of the performance period will carry less mitigating weight than it has in prior years);
Poor disclosure of the vesting results at the end of an applicable performance period;
Poor disclosure of the reasoning for metric changes, metric adjustments, or program design;
Unusually large pay opportunities;
Non-rigorous goals if they do not appear to strongly incentivize outperformance; and/or
Overly complex performance equity structures.
Incentive Program Metrics and Total Shareholder Return (“TSR”). Specifically, ISS clarified that it is agnostic to the use of TSR (or any other specific metric) but noted the importance of objective metrics that increase transparency in pay decisions. In evaluating the metrics of an incentive program, ISS may consider several factors, such as:
Whether the program emphasizes objective metrics linked to quantifiable goals;
The rationale for selecting metrics;
The rationale for atypical metrics or significant metric changes from the prior year; and/or
The clarity of disclosure around adjustments for non-GAAP metrics.
In-Progress Changes to Existing Incentive Programs. ISS outlined its generally negative view on mid-cycle changes (such as to metrics, performance targets, and/or measurement periods) to existing incentive programs and emphasized the importance of a clear and compelling rationale that explains how the mid-cycle changes do not circumvent applicable pay-for-performance outcomes.
GLASS LEWIS POLICY GUIDELINES UPDATE
Discretionary Equity Award Vesting in the Context of a Change in Control. GL updated its discussion on the treatment of unvested equity awards following a change in control transaction to incorporate its view that companies that allow for committee discretion over such unvested awards should commit to providing a clear rationale for their ultimate decision with respect to how the awards are treated in connection with the change in control transaction.
General Approach to Analyzing Executive Pay Programs. GL emphasized that its approach to analyzing executive compensation programs was meant to be holistic, noting that there are few program features that alone would lead to an unfavorable recommendation on a say-on-pay proposal. When reviewing unfavorable factors, GL will generally consider (i) a company’s rationale for the factor, (ii) the executive compensation program’s overall structure, (iii) a company’s overall disclosure quality, (iv) the program’s ability to align executive pay with performance, and (v) the trajectory of the pay program resulting from changes introduced by the compensation committee.
LOOKING FORWARD
The ISS updates are effective for meetings held on or after February 1, 2025, and GL began applying its new guidelines on January 1, 2025. Proskauer’s Employee Benefits and Executive Compensation team regularly advises companies on best practices with respect to implementing executive compensation programs, including the potential impact of proxy advisor policies on a company. Please contact a member of the team to assess whether these changes impact your company, and, if they do, what, if anything, should be done to address the impact.
CJEU Orders the European Commission to Pay Damages for Data Transfers to the U.S.
On January 8, 2025, the General Court of the Court of Justice of the European Union (“CJEU”) issued its judgment in the case of Bindl v Commission (Case T-354/22), ruling that the European Commission (the “Commission”) must pay damages to a German citizen whose personal data was transferred to the U.S. without adequate safeguards.
Background
The case concerned the Commission’s website for the “Conference on the Future of Europe,” which offered users the ability to register for events by signing in using their Facebook account, among other sign-in options.
The claimant, a citizen living in Germany, alleged that selecting this option caused his personal data—including his IP address and browser details—to be transferred to U.S.-based Meta Platforms, Inc. In addition, the claimant asserted that his personal data had been transferred to Amazon Web Services via the Amazon CloudFront content delivery network used on the website. He argued that the transfer posed risks, as the U.S. did not ensure an adequate level of data protection under EU law and that the data could potentially be accessed by U.S. intelligence services. At the time of the transfer in March 2022, the Commission had not yet finalized a new adequacy decision regarding the U.S., following the invalidation of the EU-U.S. Privacy Shield Framework by the CJEU in the Schrems II case.
The claimant sought €400 in damages for the non-material harm he allegedly suffered due to the transfers and €800 for an alleged infringement of his right of access to information. He also sought a declaration that the Commission acted unlawfully in failing to respond to his request for information and annulment of the data transfers.
Anyone who believes the European Union (through one of its institutions) is responsible for non-contractual liability can file a claim for damages. For such liability to apply, three conditions must be met: (1) a serious violation of a law that gives rights to individuals; (2) actual damage; and (3) a direct connection between the unlawful actions and the harm caused.
The Findings
The General Court issued a mixed ruling in this case:
The General Court dismissed the claim regarding the transfer of data to Amazon Web Services, finding insufficient evidence that the transfer had occurred unlawfully. During one of the individual’s connections to the website in question, the General Court found that data was transferred to a server in Munich, Germany, rather than the U.S. In the case of another connection, the individual was responsible for redirecting the data via the Amazon CloudFront routing mechanism to servers in the U.S. Due to a technical adjustment, the individual appeared to be located in the U.S.
The General Court also rejected the claims related to the alleged infringement of the claimant’s right to access information, ruling that no harm had been demonstrated.
Further, the General Court dismissed the annulment application as inadmissible and found no need to adjudicate the claim of failure to act.
However, the General Court held the Commission responsible for enabling the transmission of the claimant’s personal data―specifically, the claimant’s IP address―to Meta Platforms, Inc. via the “Sign in with Facebook” The General Court found that the Commission had not implemented appropriate safeguards to legitimize such transfer and had therefore committed a sufficiently serious breach of a rule of law that is intended to confer rights on individuals. In this case, the claimant argued that he had suffered non-material damage due to uncertainty about how his personal data, especially his IP address, was being processed. The General Court found that there was a sufficiently direct causal link between the Commission’s violation and the harm sustained by the individual. As a result, the General Court granted the complainant damages and ordered the Commission to pay €400.
An appeal addressing only legal issues may be filed within two months and ten days of receiving the General Court’s decision.
Read the judgment.
FDA Proposes Front-of-Pack Nutrition Label Rule
On January 14, 2025, FDA issued a pre-publication version of a proposed rule requiring a front-of-package (FOP) nutrition label on most packaged foods. The proposed FOP nutrition label would highlight the amount of saturated fat, sodium, and added sugars in a serving of food, as well as interpret the relative amounts of these nutrients, to help consumers quickly and easily identify how foods can be part of a healthy diet.
At a high level, the proposed rule would add 21 CFR 101.6, requiring the inclusion of a Nutrition Info box on the principal display panel of most foods that are required to display the Nutrition Facts label. In addition, the proposed rule would revise the requirements for the nutrient content claims “low sodium” and “low saturated fat.”
The proposed Nutrition Info box is intended to provide interpretive nutrition information in a convenient format. The Nutrition Info box format is similar in style to the Nutrition Facts Panel and would be required to be placed on the upper third of the principal display panel. The box would be required to include:
The title “Nutrition Info;”
A “Per serving” subheading and a statement of the serving size in household measure only;
A percent daily value subheading above the declaration of the quantitative percent daily value and the interpretive “Low,” “Med,” and “High” descriptions; and
Information on only saturated fat, sodium, and added sugars.
The interpretive descriptions are set at a proposed range of 5% daily value or less for “Low;” 6% to 19% daily value for “Med;” and 20% daily value or more for “High.” These ranges are based on longstanding consumer and nutrition education initiatives and existing regulatory definitions for nutrient content claims.
The proposed rule includes exemptions for foods exempt from nutrition labeling under 21 CFR 101.9(j). FDA also considered an exemption for products with insignificant amounts of saturated fat, sodium, and sugar, but ultimately declined to propose that exemption.
FDA is accepting comments on the proposed rule until May 16, 2025, at regulations.gov under docket number FDA-2024-N-2910.
Revitalizing Retail: What Saks Global Means for the Luxury Market and the Future of Department Stores
On December 23, 2024, Hudson’s Bay Company, the parent company of Saks Fifth Avenue, completed its acquisition of Neiman Marcus Group, the parent company of Neiman Marcus and Bergdorf Goodman, for $2.7 billion following years of on-and-off negotiations.
The acquisition combines the luxury retail brands under the newly formed Saks Global, with the goals of creating a US-luxury retail empire and reviving the department store model. Each retailer will continue to serve customers under their individual brands, with consolidation taking place at the executive level under a structure unlike anything else in the industry. The acquisition will impact both customers and vendors of each of the brands, improving the shopping experience and providing a much-needed cash infusion into the Saks brand.
Finally Making Good?
It’s no industry secret that Saks had mounting tensions with its vendors as a result of long delays in making payment and in some cases, no payment at all, to its vendors. Saks Global executives used the announcement of the merger to provide assurances that these vendors will finally be paid. The intent (and hope) is that the financial boost resulting from the merger will stabilize Saks’ cash flow and allow for timely payments to its vendors moving forward. In fact, Saks Global CEO Marc Metrick stated in an interview that the process of working through delayed payments will “begin the first week of January [2025].”
Location, Location, Location?
Under the terms of the merger, Saks Global will operate 38 Saks Fifth Avenue stores, 95 Saks OFF 5TH outlets, 36 Neiman Marcus stores, five Neiman Marcus Last Call stores, and two Bergdorf stores. Although plans for store closures have not been announced, a consolidation of retail space in markets where each brand operated individually pre-merger would not be surprising, as there will be opportunities to optimize store locations and reduce redundancies. As a whole, the fashion industry has witnessed the closure of many brick and mortar retail locations as the department store model has suffered due to high inflation and a shift in consumer shopping habits. Recently in 2023, Saks itself took advantage of certain real estate transactions to better its cash flow and pay back some of its vendors, so it is not out of the question that Saks Global may utilize similar strategies again.
One in the Same?
Industry experts are predicting that, as a result of the merger, Saks Fifth Avenue and Neiman Marcus will restructure their market visibility, relative to one another. With both brands sharing many of the same customers, as well as the same inventory of brands and goods, and with many of their current brick-and-mortar locations being walking distance from each other, there is an expectation that these two primary brands will eventually have to differentiate their positions in the luxury market.
The prediction is that Neiman Marcus will maintain its role as a top tier luxury destination, while Saks will evolve towards a more accessible luxury destination aimed at a younger demographic, which would give Saks Global substantial influence over luxury consumers’ tastes, options, and brand acceptance at various levels of the luxury market, which may lead to a better overall shopping experience for the luxury consumer. But, while consumers may be for the better, the same may not be said for brands that sell to Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, as they may see pressure to reduce their prices on products sold to the now combined brand and provide longer credit terms. As a combined entity, Saks Global’s greater negotiating power could lead to pressure on vendors to meet its supply and demand requirements, especially smaller vendors that rely on wholesaling to Saks and Neiman Marcus. Brands will also now have fewer buyers, as those who formally sold to both Saks and Neiman Marcus individually will now sell to Saks Global.
Conclusion
Now that the merger is complete and Saks Global has been formed, brands that sell to Saks Fifth Avenue and Neiman Marcus may be impacted in several ways depending on the size of the brand and whether it previously sold to both Saks and Neiman Marcus pre-merger. And with Saks Global’s greater negotiating power, brands will need to look at other avenues to protect their interests and bottom lines, such as shop-in-shops, exclusive collaborations, and other strategies to even the playing field. One expected benefit of the merger is that Saks’ vendors can finally expect to be paid, and if what Saks Global executives say comes to fruition, the department store model could be revitalized.
Listen to this article
French Insider Episode 38: Securing the Future: Cybersecurity & Data Privacy in the Trump Era with Jonathan Meyer, Liisa Thomas and Carolyn Metnick of Sheppard Mullin [Podcast]
In this episode of French Insider, Sheppard Mullin partners Jonathan Meyer, Liisa Thomas and Carolyn Metnick join host and French Desk Co-Chair, Valérie Demont, to explore the evolving landscape of cybersecurity and privacy under a new Trump administration.
What We Discussed in This Episode:
What is CISA and what is its role in cybersecurity?
What can we expect from the Trump administration regarding cybersecurity?
Could we see less regulation but greater enforcement?
Might there be more stringent regulation with respect to cyber attacks and private ransomware?
Where does the United States currently stand in terms of privacy law?
What is the current status of state and federal privacy laws in relation to the healthcare industry?
In terms of privacy, where could enforcement be headed under the incoming administration?
How do the various state attorneys general and federal agencies coordinate on enforcement?
What enforcement trends should businesses be aware of, and what do they need to focus on?
What specific enforcement trends are we seeing in the healthcare space?
Generally speaking, what types of penalties could result from enforcement actions?
Could a company’s officers and directors face personal liability, either criminal or civil?
How might class action litigation originate from a cybersecurity or privacy incident?
What should businesses prioritize in terms of cybersecurity and privacy compliance?
Significant Increases to 2025 HSR Act Merger Thresholds and Filings Fees
Go-To Guide:
FTC raises merger notification thresholds, with initial reporting starting at $126.4 million, up from $119.5 million.
The updates also adjust the six-tier filing fee system, with fees ranging from $30,000-$2,390,000 based on deal size.
FTC also updates limits on interlocking directorates.
On Jan. 10, 2025, The Federal Trade Commission announced that it will publish revised thresholds and fees for premerger notifications under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). These changes include updated size-of-transaction thresholds for mergers and acquisitions, as well as increased filing fee tiers and fees for larger transactions, as required by the Merger Filing Fee Modernization Act of 2022 (Fee Modernization Act).
Congress first amended the HSR Act in 2000 to require annual adjustments of notification thresholds based on the change in gross national product (GNP). The Fee Modernization Act replaced the prior three-tier filing fee system with corresponding transaction size thresholds with a six-tier filing fee system based on transaction value. The tiers set forth below are also adjusted annually based on GNP change. The fees within each tier increase annually based on the percentage change in the consumer price index, comparing the most recent fiscal year ending in September to the previous fiscal year.
The FTC also published revisions to the thresholds that trigger, under Section 8 of the Clayton Act, a prohibition preventing companies from having interlocking memberships on their corporate boards of directors. These revisions represent the annual adjustment of thresholds based on GNP changes.
Revised HSR Act Thresholds
The initial threshold for a HSR Act notification increases from $119.5 million to $126.4 million. For transactions valued between $126.4 million and $505.8 million (increased from $478 million), the size of the person test continues to apply. That test makes the transaction reportable only where one party has sales or assets of at least $252.9 million (increased from $239 million), and the other party has sales or assets of at least $25.3 million (increased from $23.9 million). All transactions valued more than $505.8 million are reportable without regard to party size.
The new thresholds apply to transactions closing 30 days or more after the official Federal Register publication date. Official publication is expected in the next few business days.
The following is a summary chart of the threshold adjustments:
PRIOR THRESHOLD
REVISED THRESHOLD
Size of the transaction test
more than $119.5 million
more than $126.4 million
Size of the person test
$23.9 million/$239 million
$25.3 million/$252.9 million
Transaction value above which size of the person test is inapplicable
$478 million
$505.8 million
The amendments will adjust all notification thresholds as follows:
NOTIFICATION LEVELS
more than $50 million
more than $126.4 million
$100 million
$252.9 million
$500 million
$1,264 million
25% of total outstanding shares worth
more than $1 billion
25% of total outstanding shares worth
more than $2,529 million
50% of total outstanding shares worth
more than $50 million
50% of total outstanding shares worth
more than $126.4 million
These notification threshold adjustments also adjust upward thresholds applicable to certain exemptions, such as those involving the acquisition of foreign assets or voting securities of foreign issuers.
Revised HSR Filing Fee Thresholds
Below is the new filing fee schedule, which applies to transactions closing 30 days or more after Federal Register publication. Official publication is expected in the next few business days.
NEW FILING FEE LEVELS
Size-of-Transaction*
Fee**
more than $126.4 but less than $179.4 million
$30,000
$179.4 million or greater, but less than $555.5 million
$105,000
$555.5 million or greater, but less than $1.111 billion
$265,000
$1.111 billion or greater, but less than $2.222 billion
$425,000
$2.222 billion or greater, but less than $5.555 billion
$850,000
$5.555 billion or greater
$2,390,000
* Adjusted annually based on GNP.
** Adjusted annually when the CPI increases by more than 1% compared to the baseline CPI from Sept. 30, 2023.
Revised Section 8 Thresholds
The FTC also published revisions to the thresholds that trigger a prohibition preventing companies from having interlocking memberships on their corporate boards of directors under Section 8 of the Clayton Act. These revised thresholds are effective 30 days after official publication in the Federal Register. Official publication is expected in the next few business days.
Section 8 prohibits a “person,” which can include a corporation and its representatives, from serving as a director or officer of two “competing” corporations, unless one of the following exemptions applies:
either corporation has capital, surplus, and undivided profits of less than $51,380,000 (increased from $48,559,000);
the competitive sales of either corporation are less than $5,138,000 (increased from $4,855,900);
the competitive sales of either corporation amount to less than 2% of that corporation’s total sales; or
the competitive sales of each corporation amount to less than 4% of each corporation’s total sales.
“Competitive sales” means “the gross revenues for all products and services sold by one corporation in competition with the other, determined on the basis of annual gross revenues for such products and services in that corporation’s last completed fiscal year.” “Total sales” means “the gross revenues for all products and services sold by one corporation over that corporation’s last completed fiscal year.”
Massachusetts: New Year, New Law — Governor Signs “An Act enhancing the market review process” (House Bill No. 5159)
On January 8, 2025, Governor Maura Healey signed into law H.B. 5159, “an Act enhancing the market review process.” This new law promises sweeping reform to reshape how health care businesses operate and grow. With stricter oversight, expanded reporting obligations, and new licensing requirements, the legislation signals an uptick in regulatory oversight of health care transactions and operations in Massachusetts. These changes have wide-ranging implications for stakeholders across the health care space. Many provisions of the new law will become effective once the applicable agencies issue implementing regulations. This is an expansive set of statutory changes, and this blog highlights only a few of the material provisions. Foley will provide several issue-specific analyses in the coming weeks, including implications for investors.
Here is what stakeholders need to know — and how to prepare.
Key Changes at a Glance
Increased Oversight of Health Care Transactions: The Massachusetts Attorney General, the Health Policy Commission (HPC), and the Center for Health Information and Analysis (CHIA), have greater authority to scrutinize mergers, acquisitions, and other significant market changes. The HPC will now have oversight over a number of other actors and activities in the local market, including private equity players, sale/leaseback transactions.
New Licensing Categories: Office-based surgical centers and urgent care centers face stricter licensing requirements. Implementing regulations must be issued by October 1, 2025.
Massachusetts False Claims Act: Imposes liability on owners and investors that know about and fail to disclose violations of the Massachusetts False Claims Act.
Required Assessments from Health Care Entities: Non-hospital provider organizations, pharmaceutical manufacturing companies and pharmacy benefit managers are now required to pay estimated expenses of the HPC (in addition to acute hospitals and ambulatory surgical centers).
Expanded Reporting Obligations: Requirements to include additional information regarding private equity (PE) investors, management services organizations (MSOs) relationships, and real estate leaseback arrangements in 2025 Provider Organization Registration Program renewals and registrations to enhance market transparency throughout the Commonwealth.
Office for Health Resource Planning: A new office will be established within the HPC to develop a state health resource plan. The office will be tasked with studying many aspects of the sector, including “health care resources”, which are expansively defined to include “any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions, which usually are the result of, or result in, disease, injury, deformity or pain; provided, however, that the term “treatment”, as used in this definition, shall include custodial and rehabilitative care incident to infirmity, developmental disability or old age.”
Expanding Studies on Health Care: Establishes a primary care task force to address access, provider, and payment issues in the primary care setting that shall issue its first report to legislature by September 15, 2025, and expands the scope of CHIA’s functions.
Prohibitions on Hospitals Leasing its Main Campus from a real estate investment trust (“REIT”). This exempts hospitals that had a main campus/REIT arrangement prior to April 1, 2024.
These sections reflect the legislature’s efforts to balance the changing landscape of health care and consumer protection, but they also create challenges for businesses navigating this complex regulatory environment.
HPC’s Expanded Role in Oversight Measures
For the past decade, the HPC has overseen health care transactions in the Commonwealth through the Notice of Material Change process. “Providers” or “Provider Organizations” (including organizations in the business of health care management) that plan to undergo “Material Changes” to their operations or governance structure must submit notice to the HPC 60 days prior to closing. “Material Changes” include:
A Provider or Provider Organization entering into a merger or affiliation, or acquisition of, by, or with a carrier or involving a hospital or hospital system;
Any other acquisition, merger, or affiliation of, by, or with another Provider or Provider Organization that would result in:
an increase in annual Net Patient Services Revenue of the Provider or Provider Organization of US$10 million dollars or more, or
the Provider or Provider Organization having a near-majority of market share in a given service or region.
A clinical affiliation between two or more Providers or Provider Organizations that each had annual Net Patient Service Revenue of US$25 million or more in the preceding fiscal year; or
Creating an organization to administer contracts with carriers or third-party administrators or perform current or future contracting on behalf of one or more Providers or Provider Organizations.
Upon receipt of a completed notice to the HPC, the HPC is required, within 30 days, to conduct a preliminary review to ascertain whether the Material Change may result in a “significant impact” on the Commonwealth’s health care cost growth benchmark goals, or on the competitive market. If the HPC determines that there will be a significant impact by the Material Change on the health care cost growth benchmark, or on the market, the HPC may initiate a cost and market impact review.
The new law expands the scope of regulated transaction by revising “Materials Changes” to also include:
Significant expansions in provider or provider organization’s capacity;
Transactions that involve a significant equity investor, which result in a change of ownership or control of a Provider or Provider Organization;
Significant acquisitions, sales, or transfers of assets including, but not limited to, real estate sale lease-back arrangements; and
Conversion of a Provider or Provider Organization from a non-profit entity to a for-profit entity.
While the new law has not set thresholds for these new categories, we expect additional clarity in forthcoming guidance and regulations.
The HPC will be also seeking far more intrusive access to the financial and operational conditions of significant equity investors, including but not limited to “information regarding the significant equity investor’s capital structure, general financial condition, ownership and management structure and audited financial statements.”
Notably, the statute exempts from the definition of “significant equity investor” venture capital firms “exclusively funding startups or other early-stage businesses,” which terms are not defined.
The role of the HPC is expanding well-beyond the state legislature’s initial intent. Rather than just being an advisory review body that looks at initial material change transactions, it will now have ongoing oversight for a period of five years following the completion of a material change, including the right to request additional documentation “to assess the post-transaction impacts of a material change.” Cost and market impact reviews are also being tasked to ask deeper questions than before including quality of care and patient experience as well as referral patterns. Similarly, the statute empowers CHIA to require registered provider organizations to provide additional annual internal and financial and operational information to the HPC.
Massachusetts False Claims Act Liability of Owners and Investors
In a broad statutory challenge to the historic protections of the corporate veil that insulates shareholders from underlying liability, the new law imposes liability under the state false claims act on shareholders with an ownership or investment interest in a violating entity, who knows about the violation, and fail to disclose the violation to the Commonwealth within 60 days of identifying the violation. This change is directly related to a high-profile case brought by the Office of the Attorney General resulting in $25MM settlement paid by investors in a behavioral health company in Massachusetts in 2021. Investors will now have a more direct risk of liability for the activities of their portfolio companies.
Licensing Changes
The law also established two new license types: Office-Based Surgical Centers and Urgent Care Centers. The law has delegated broad discretion to the Massachusetts Department of Public Health (DPH) to create and implement specific licensure requirements for each of the new categories. Many medical practices historically offered urgent care under the historic exception to licensure for physician practices. This new law will require physician-based urgent care centers to submit to DPH regulatory and licensure oversight. Once regulations are drafted and implemented, any person or entity that “advertises, announces, establishes, or maintains an office-based surgical center [or urgent care center] without a license” will be subject to a fine of up to US$10,000.
(1) Office-Based Surgical Centers, which provide:
“ambulatory surgical or other invasive procedure requiring: (i) general anesthesia; (ii) moderate sedation; or (iii) deep sedation and any liposuction procedure, excluding minor procedures and procedures requiring minimal sedation, where such surgical or other invasive procedure or liposuction is performed by a practitioner at an office- based surgical center.”
This category is distinct from ambulatory surgical centers, which are already subject to clinic licensure by DPH and follow the federal definition.[1] Licensed hospitals are also exempt from obtaining an office-based surgical center license, though their affiliated physician organizations may need to be exempted through rulemaking.
(2) Urgent Care Centers, which are clinics not affiliated with a licensed hospital that provide urgent care services:
“a model of episodic care for the diagnosis, treatment, management or monitoring of acute and chronic disease or injury that is: (i) for the treatment of illness or injury that is immediate in nature but does not require emergency services; (ii) provided on a walk-in basis without a prior appointment; (iii) available to the general public during times of the day, weekends or holidays when primary care provider offices are not customarily open; and (iv) is not intended and should not be used for preventative or routine services.”
Licensed hospitals (and entities “corporately affiliated with hospitals”), clinics, limited service clinics, and community health centers receiving federal grants are exempt from obtaining an urgent care center license. In other words, this new oversight is directed to urgent care centers offered in a freestanding physician office and “friendly PC” environment.
Other Notable Provisions and Exclusions
It appears that the New Year brought about a spirit of compromise, as some of the changes previewed this summer in S.B. 2881, “an Act enhancing the market review process” discussed in our prior blog, “Massachusetts Health Care Act Dies at the End of Legislative Session But Previews Sweeping Changes for the Health Care Industry,” were excluded from the new law. Most notably, restrictions on (i) who can employ registered practicing clinicians (physicians, advanced practice providers, psychiatric nurse mental health clinical specialists, nurse anesthetists, nurse-midwives, psychologists, and licensed clinical social workers) and (ii) the corporate practice of medicine were excluded from the enacted version of the law.
While the emphasis of the law expands the scope and scale of what stakeholders are subject to state oversight, the law also establishes and expands the Commonwealth’s ability to monitor and study primary care services, access, delivery, cost, and payment, to name a few.
What Happens Next?
Stakeholders should apprise themselves of these new requirements and be on the lookout for forthcoming regulations as increased governmental scrutiny has come to the Commonwealth.
[1] 42 CFR 416.2 “Ambulatory surgical center or ASC means any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission. The entity must have an agreement with CMS to participate in Medicare as an ASC, and must meet the conditions set forth in subparts B and C of this part.”
So How Much Do I Have to Pay My EAP Employees in 2025?
Executive, administrative and professional (EAP) employees are exempt from overtime pay if they perform certain duties and earn at least a certain salary. Under federal law, an executive employee must primarily perform management and supervisory duties and have input into the hiring, advancement or termination of employees; an administrative employee must primarily perform office or non-manual work related to the general business operations and be able to exercise discretion on important matters; and a professional employee must primarily perform work requiring advanced knowledge in a field of science or learning customarily acquired by intellectual instruction.
From 2019 through 2024, the requisite salary threshold for all EAP employees was $684 per week ($35,568 annually).
On April 26, 2024, the U.S. Department of Labor (DOL) published a rule that increased the salary threshold to $844 per week ($43,888 annually), effective July 1, 2024; $1,128 per week ($58,656 annually), effective Jan. 1, 2025; and automatic increases beginning July 1, 2027, and every three years thereafter. However, a recent U.S. District Court for the Eastern District of Texas decision struck down the regulation. The court ruled that by focusing predominantly on salary levels, the rule effectively displaced the duties test, which the DOL lacked authority to do.
Thus, the court held the DOL also exceeded its authority in applying automatic increases.
So what does this mean for employers? Now, under federal law, employers only have to pay employees at least $684 per week ($35,568 annually) to satisfy the EAP exemption.