Greenwashing Lawsuit Against Lululemon Dismissed by Federal Court
On February 18, 2025, Judge Bloom (S.D. Fla.) dismissed a lawsuit against Lululemon, the athleisure company, that centered upon allegations of greenwashing. Specifically, the plaintiffs here had contended “that Lululemon made a number of direct environmental claims about the company’s products and actions that are false, deceptive and/or misleading.” However, the judge found these allegations lacking and dismissed the case for lack of standing due to a failure to plead injury, since “Plaintiffs’ allegations fail to tie any aspect of Lululemon’s statements to the purported price premium that Plaintiffs paid for Lululemon’s products.”
This conclusion by the federal district court is highly significant and will likely impact the growing number of greenwashing actions filed in various courts. In particular, the court’s holding that, in the context of greenwashing, “blanket assertions are insufficient to constitute an economic injury, and therefore Plaintiffs lack Article III standing” may erect a significant barrier to the many greenwashing lawsuits that “fail[] to allege a factual connection between the value of [Company’s]products and [Company’s] representations.” In other words, a greenwashing lawsuit will not succeed based upon generalized allegations that a company is not upholding its environmental commitments or otherwise making improper claims of sustainability but rather will require a specific link between the alleged greenwashing and the economic injury suffered by plaintiffs. This will likely be harder to establish in many, if not most, cases, and so may enable defendants to dispose of greenwashing lawsuits at an early stage in the litigation–e.g., at the motion to dismiss stage, as occurred here.
Lululemon Athletica Inc. has escaped a proposed class action accusing it of misleading the public into thinking the company is environmentally friendly, after a Florida federal judge tossed the suit because the consumers couldn’t make a price-premium connection. [] Judge Beth Bloom granted Lululemon’s motion to dismiss, finding that the buyers lacked standing because they did not adequately link their claims of overhyped environmental statements to any kind of economic injury. The lawsuit “does not allege that there was any deceptive act or unfair practice regarding the products sold to plaintiffs,” Judge Bloom said. “Indeed, the ‘deception’ plaintiffs purportedly relied on amounts to nothing more than goals and promises contained in a press release or on Lululemon’s website. … Plaintiffs’ allegations fail to tie any aspect of Lululemon’s statements to the purported price premium that plaintiffs paid for Lululemon’s products.”
www.law360.com/…
Europe: ESMA and National Regulators Launch Coordinated Review of Fund Manager Compliance and Internal Audit Functions
On 14 February 2025, the EU’s securities and markets regulator, the European Securities and Markets Authority (ESMA), launched a Common Supervisory Action (CSA) with EU Member State National Competent Authorities (NCAs), in relation to compliance and internal audit functions of UCITS management companies and Alternative Investment Fund Managers (AIFMs) across the EU.
The CSA aims to assess to what extent UCITS management companies and AIFMs have established effective compliance and internal audit functions with adequate staffing, authority, knowledge, and expertise to perform their duties under the AIFM and UCITS Directives. The CSA is expected to be conducted through to the end of 2025.
UCITS management companies and AIFMs are required to have robust internal controls to protect investors and preserve financial stability. Their compliance and internal audit functions should accordingly be designed to ensure that internal control mechanisms to monitor, identify, measure, and mitigate any possible risks of non-compliance with relevant legal and regulatory obligations are in place.
A common assessment framework developed by ESMA sets out the scope, methodology, supervisory expectations, and timeline on how to carry out a comprehensive CSA in a convergent manner. It will be used to coordinate and compile the information required to complete the CSA.
Throughout 2025, it is expected that NCAs will share knowledge and experiences through ESMA in order to seek consistency as to how they supervise the compliance of UCITS management companies and AIFMs with the relevant rules in the area.
Next Steps
It is expected that ESMA will publish a final report with the results of the CSA in 2026.
25 Percent Tariffs on Imported Automobiles?
his week, President Donald Trump made remarks during a press conference indicating that he was planning to impose tariffs “in the neighborhood of 25 percent” on imported automobiles, perhaps as early as April 2. It was unclear whether the targeted automobile tariffs are related to the so-called “reciprocal tariffs” that are being studied by the government across all products from all countries.
During this week’s press conference, the president expressed his understanding that the European Union has already lowered its tariffs on imported automobiles from 10 percent to 2.5 percent. However, the EU has released an FAQ indicating that it has made no such concession, and pointing out that the U.S. imposes a 25 percent tariff on pickup trucks.
The auto tariff referenced in this week’s press conference is reminiscent of the findings of the Section 232 investigation of imported automobiles performed during President Trump’s first administration. Although that investigation concluded that imports of automobiles harmed U.S. national security, the recommended 25-35 percent tariff was never imposed.
Car plants are being canceled in other locations now because they want to build them here. And you read about a couple — not that I want to mention names or anything — but you read about a couple of big ones in Mexico just got canceled because they’re going to be building them in the United States. And that’s very simply because of what we’re doing with respect to taxes, tariffs, and incentives.
www.whitehouse.gov/…
U.S. Trade Representative Seeks Public Comment on Reciprocal Tariffs
In an as-yet unpublished Federal Register notice, the Office of the U.S. Trade Representative (USTR) has issued a Request for Comments to Assist in Reviewing and Identifying Unfair Trade Practices and Initiating All Necessary Actions to Investigate Harm from Non-Reciprocal Trade Arrangements. Comments must be filed by March 11, 2025.
President Donald Trump issued a Presidential Memorandum on Reciprocal Trade and Tariffs that directs the U.S. Department of Commerce and the USTR, in consultation with other agencies, to investigate the harm to the U.S. from such non-reciprocal trade practices by trading partners beginning after April 1.
In its request for comments, the USTR indicates that it is pursuing a review of all countries but is “particularly interested” in the unfair or non-reciprocal practices of the largest trading economies and those with the largest trade deficits in goods with the U.S. USTR specifically called out Argentina, Australia, Brazil, Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Switzerland, Taiwan, Thailand, Türkiye, United Kingdom, and Vietnam.
The USTR is requesting that commenting parties quantify in dollars the harm or cost – in actual cost or opportunities – to U.S. “workers, manufacturers, farmers, ranchers, entrepreneurs and businesses” as a result of the trade practices that are the subject of the comments. Moreover, comments should be filed on a country-by-country basis.
USTR is particularly interested in submissions related to the largest trading economies, such as G20 countries, as well as those economies that have the largest trade deficits in goods with the United States, including Argentina, Australia, Brazil, Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Switzerland, Taiwan, Thailand, Türkiye, United Kingdom, and Vietnam. These countries cover 88 percent of total goods trade with the United States.
ustr.gov/…
U.S. Export Controls On Software License Keys
With the many updates to U.S. export controls in the past few months, it would be easy to miss a recent update concerning software keys. The U.S. Commerce Department Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to add new Sec. 734.19 of the EAR, specifying how and when license requirements apply to:
Software license keys allowing a user the ability to use software or hardware; and
Software keys that renew existing software or hardware use licenses.
Sec. 734.19 specifies that such software keys are classified and controlled under the same Export Control Classification Numbers (ECCNs) as the corresponding software or hardware to which they provide access, imposing the same controls and authorization requirements. For hardware, BIS provided that “the software key would be classified under the corresponding ECCN in the software group (e.g., a software license key that allows the use of hardware classified under ECCN 5A992 would be classified under ECCN 5D992).”
As a result of this clarification, companies that provide software keys to their customers should review their export compliance programs to ensure they have appropriate controls not only around the provision of software, but also around corresponding license keys. For instance, companies should be aware that even if no authorization was required for the release of the initial software license key, renewal use licenses may be subject to authorization requirements to the extent circumstances changed (e.g., if the end user was added to the Entity List).
This change is particularly noteworthy given the EAR’s license requirement for the export, reexport, or transfer (in-country) to or within Russia or Belarus of many types of software, including certain EAR99 software.
Everything Changes April 11, 2025: You Have Just 45 Days Until The Biggest Tcpa Ruling Of The Year Takes Effect–are You Ready? [Video]
The FCC’s critical new TCPA revocation rule is set to go into effect on April 11, 2025– that’s just 45 days from now.
Yes, a consumer will be able to revoke by “any reasonable means” but that is already the case. And yes, a caller will only have ten business days to honor a revocation.
But those are tiny changes compared to the new scope of revocation rules–which is what EVERYBODY needs to be paying attention to right now.
Really the core of the new rule is found in paragraph 30 and 31 of the FCC’s ruling and it boils down to three key provisions:
“[W]hen a consumer revokes consent with regard to telemarketing robocalls or robotexts, the caller can continue to reach the consumer pursuant to an exempted informational call, which does not require consent, unless and until the consumer separately expresses an intent to opt out of these exempted calls”;
“If the revocation request is made directly in response to an exempted informational call or text, however, this constitutes an opt-out request from the consumer and all further non-emergency robocalls and robotexts must stop”; and
“[W]hen consent is revoked in any reasonable manner, that revocation extends to both robocalls and robotexts regardless of the medium used to communicate the revocation of consent.”
Taken together, the FCC’s new scope of consent rules require a “stop” or “do not call” request received in response to an informational or exempted call or text to require communications to stop across all channels for all purposes across the enterprise.
Insane right?
The only upside is businesses will have a chance to send a one time “clarification” message to try to limit the damage caused by the consumer’s revocation effort. But if a consumer does not respond to the clarification message it is lights out–so crafting brilliantly-worded clarification messages will now be a massively important part of enterprise contact strategy .
Absolutely massive change. And the biggest headache imaginable for large companies.
We break down the massive consequences of the ruling here:
A ton of folks have been asking me whether this ruling is likely to be stayed or vacated like the one-to-one rule was. The truth is, probably not.
The reason is that no one seemed to be paying attention to this ruling before it came out. I have talked with numerous large companies recently that have asked why the trades didn’t do anything to challenge the rule and as far as I can tell nobody but R.E.A.C.H. and USHealth was really paying attention.
I predict there will be some last minute scrambling to try to get the rule stayed but a Hobbs Act appeal (like the one that killed the one-to-one rule) is out of the question as the time for such a challenge ran a couple months back.
R.E.A.C.H. is evaluating seeking a stay in light of Mr. Trump’s recent efforts to seize control over the FCC but we are hoping a different trade will take the lead here as this is less of a lead gen issue and more of an issue for large enterprises with multiple consumer touchpoints.
But with only 45 days to go until the rule becomes effective it is CRITICAL that you folks reach out to us ASAP so we can help before it is too late.
Per usual, however, I will give you some free tips to consider:
As noted, work on drafting brilliant clarification messages;
Consider moving toward non-regulated technology and human selection systems for your text and call outreach (Safe Select, Drips Initiate, Convoso CallCaltyst, etc.);
Identify and prioritize high value messaging while removing campaigns that tend to draw higher opt out rates from your campaign strategy;
For larger organization, assigning a point person to oversee contact strategy and evaluate enterprise needs in light of these new rules is critical;
Leverage vendors that offer solutions to identify free form text responses (merely obeying a handful of keywords will not be sufficient);
Collapse contacts to fewer outbound channels to make it easier to track and honor revocations and critical re-consents; and
Build out robust opportunities for consumers to provide new consents as you interact and provides services to existing customers.
Charting the Future of AI Regulation: Virginia Poised to Become Second State to Enact Law Governing High-Risk AI Systems
Virginia has taken a step closer to becoming the second state (after Colorado) to enact comprehensive legislation addressing discrimination stemming from the use of artificial intelligence (AI), with the states taking different approaches to this emerging regulatory challenge.
On February 12, 2025, the Virginia state senate passed the High-Risk Artificial Intelligence Developer and Deployer Act (H.B. 2094) which, if signed into law, will regulate the use of AI in various contexts, including when it is used to make decisions regarding “access to employment.” The legislation now heads to Governor Glenn Youngkin’s desk for signature. If signed, the law will come into force on July 1, 2026, and will establish new compliance obligations for businesses that deploy “high-risk” AI systems affecting Virginia “consumers,” including job applicants.
Quick Hits
If signed into law by Governor Youngkin, Virginia’s High-Risk Artificial Intelligence Developer and Deployer Act (H.B. 2094) will go into effect on July 1, 2026, giving affected businesses plenty of time to understand and prepare for its requirements.
The legislation applies to AI systems that autonomously make—or significantly influence—consequential decisions, such as lending, housing, education, and healthcare, and potentially job hiring as well.
Although H.B. 2094 excludes individuals acting in a commercial or employment context from the definition of “consumer,” the term “consequential decision” specifically includes decisions with a material legal or similar effect regarding “access to employment,” such that job applicants are ostensibly covered by the requirements and prohibitions under a strict reading of the text.
Overview
Virginia’s legislation establishes a duty of reasonable care for businesses employing automated decision-making systems in several regulated domains, including employment, financial services, healthcare, and other consequential sectors. The regulatory framework applies specifically to “high-risk artificial intelligence” systems that are “specifically intended to autonomously” render or be a substantial factor in rendering decisions—statutory language that significantly narrows the legislation’s scope compared to Colorado’s approach. A critical distinction in the Virginia legislation is the requirement that AI must constitute the “principal basis” for a decision to trigger the law’s anti-discrimination provisions. This threshold requirement creates a higher bar for establishing coverage than Colorado’s “substantial factor” standard.
Who Is a ‘Consumer’?
A central goal of this law is to safeguard “consumers” from algorithmic discrimination, especially where automated systems are used to make consequential decisions about individuals. The legislation defines a “consumer” as a natural person who is a resident of Virginia and who acts in an individual or household context. And, as with the Virginia Consumer Data Protection Act, H.B. 2094 contains a specific exclusion for individuals acting in a commercial or employment context.
One potential source of confusion is how “access to employment” can be a “consequential decision” under the law—while simultaneously excluding those in an employment context from the definition of “consumers.” The logical reading of these conflicting definitions is that job applicants do not act in an employment capacity on behalf of a business; instead, they are private individuals seeking employment for personal reasons. In other words, if Virginia residents are applying for a job and an AI-driven hiring or screening tool is used to evaluate their candidacy, a purely textual reading of the legislation suggests that they remain consumers under the statute because they are acting in a personal capacity.
Conversely, once an individual becomes an employee, the employee’s interactions with the business (including the business’s AI systems) are generally understood to reflect action undertaken within an employment context. Accordingly, if an employer uses a high-risk AI system for ongoing employee monitoring (e.g., measuring performance metrics, time tracking, or productivity scores), the employee might no longer be considered a “consumer” under H.B. 2094.
High-Risk AI Systems and Consequential Decisions
H.B. 2094 regulates only those artificial intelligence systems deemed “high-risk.” Such systems autonomously make—or are substantial factors in making—consequential decisions that affect core rights or opportunities, such as admissions to educational programs and other educational opportunities, approval for lending services, the provision or denial of housing or insurance, and, as highlighted above, access to employment. The legislature included these provisions to curb “algorithmic discrimination,” which is the illegal disparate treatment or unfair negative effects that occur on the basis of protected characteristics, such as race, sex, religion, or disability, and result from the use of automated decision-making tools. And, as we have seen with other, more narrowly focused laws in other jurisdictions, even if the developer or deployer does not intend to use an AI tool to engage in discriminatory practice, merely using an AI tool that produces such biased outcomes may trigger liability.
H.B. 2094 also includes a list of nineteen types of technologies that are specifically excluded from the definition of a “high-risk artificial intelligence system.” One notable carve-out is “anti-fraud technology that does not use facial recognition technology.” This is particularly relevant as the prevalence of fraudulent remote worker job applicants increases and more companies seek effective mechanisms to address such risks. Cybersecurity tools, anti-malware, and anti-virus technologies are likewise entirely excluded for obvious reasons. Among the other more granular exclusions, the legislation takes care to specify that spreadsheets and calculators are notconsidered high-risk artificial intelligence. Thus, those who harbor anxieties about the imminent destruction of pivot tables can breathe easy—spreadsheet formulas will not be subject to these heightened regulations.
Obligations for Developers
Developers—entities that create or substantially modify high-risk AI systems—are subject to a “reasonable duty of care” to protect consumers from known or reasonably foreseeable discriminatory harms. Before providing a high-risk AI system to a deployer—entities that use high-risk AI systems to make consequential decisions in Virginia—developers must disclose certain information (such as the system’s intended uses), known limitations, steps taken to mitigate algorithmic discrimination, and information intended to assist the deployer with performing its own ongoing monitoring of the high-risk AI system for algorithmic discrimination. Developers must update these disclosures within ninety days of making any intentional and substantial modifications that alter the system’s risks. Notably, developers are also required to either provide or, in some instances, make available extensive amounts of documentation relating to the high-risk AI tool they develop, including legally significant documents like impact assessments and risk management policies.
In addition, H.B. 2094 appears to take aim at “deep fakes” by mandating that if a developer uses a “generative AI” model to produce audio, video, or images (“synthetic content”), a detectable marking or other method that ensures consumers can identify the content as AI-generated will generally be required. The rules make room for creative works and artistic expressions so that the labeling requirements do not impair legitimate satire or fiction.
Obligations for Deployers
Like developers, deployers must also meet a “reasonable duty of care” to prevent algorithmic discrimination. H.B. 2094 requires deployers to devise and implement a risk management policy and program specific to the high-risk AI system they are using. Risk management policies and programs that are designed, implemented, and maintained pursuant to H.B. 2094, and which rely upon the standards and guidance articulated in frameworks like the National Institute of Standards and Technology’s AI Risk Management Framework (NIST AI RMF) or ISO/IEC 42001, presumptively demonstrate compliance.
Prior to putting a high-risk AI system into practice, deployers must complete an impact assessment that considers eight separate enumerated issues, including the system’s purpose, potential discriminatory risks, and the steps taken to mitigate bias. As with data protection assessments required by the Virginia Consumer Data Protection Act, a single impact assessment may be used to demonstrate compliance with respect to multiple comparable high-risk AI systems. Likewise, under H.B. 2094, an impact assessment used to demonstrate compliance with another similarly scoped law or regulation with similar effects, may be relied upon. In all cases, however, the impact assessment relied upon must be updated when the AI system undergoes a significant update and must be retained for at least three years.
Deployers also must clearly inform consumers when a high-risk AI system will be used to make a consequential decision about them. This notice must include information about:
(i) the purpose of such high-risk artificial intelligence system,
(ii) the nature of such system,
(iii) the nature of the consequential decision,
(iv) the contact information for the deployer, and
(v) a description of the artificial intelligence system in plain language of such system.
Any such disclosures must be updated within thirty days of the deployer’s receipt of notice from the developer of the high-risk AI system that it has made intentional and significant updates to the AI system. Additionally, the deployer must “make available, in a manner that is clear and readily available, a statement summarizing how such deployer manages any reasonably foreseeable risk of algorithmic discrimination that may arise from the use or deployment of the high-risk artificial intelligence system.” In the case of an adverse decision—such as denying a loan or rejecting a job application—the deployer must disclose the principal reasons behind the decision, including whether the AI system was the determining factor, and give the individual an opportunity to correct inaccuracies in the data or appeal the decision.
Exemptions, Cure Periods, and Safe Harbors
Although H.B. 2094 applies broadly, it exempts businesses that operate in certain sectors or engage in regulated activities for which equivalent or more stringent regulations are already in place. For example, federal agencies and regulated financial institutions may be exempted if they adhere to their own AI risk standards. Similarly, H.B. 2094 provides partial exemptions for Health Insurance Portability and Accountability Act (HIPAA)–covered entities or telehealth providers in limited situations, including those where AI-driven systems generate healthcare recommendations but require a licensed healthcare provider to implement those recommendations or where an AI system for administrative, quality measurement, security, or internal cost or performance improvement functions.
H.B. 2094 also contains certain provisions that are broadly protective of businesses. For example, the legislation conspicuously does not require businesses to disclose trade secrets, confidential information, or privileged information. Moreover, entities that discover and cure a violation before the attorney general takes enforcement action may also avoid liability if they promptly remediate the issue and inform the attorney general. And, the legislation contains a limited “safe harbor” in the form of a (rebuttable) presumption that developers and deployers of high-risk AI systems have met their duty of care to consumers if they comply with the applicable operating standards outlined in the legislation.
Enforcement and Penalties
Under H.B. 2094, only the attorney general may enforce the requirements described in the legislation. Nevertheless, the potential enforcement envisioned could be very impactful, as violations can lead to civil investigative demands, injunctive relief, and civil penalties. Generally, non-willful violations of H.B. 2094 may incur up to $1,000 in fines plus attorneys’ fees, expenses, and costs, while willful violations can result in fines of up to $10,000 per instance along with attorneys’ fees, expenses, and costs. Notably, each violation is counted separately, so penalties can accumulate quickly if an AI system impacts many individuals.
Looking Forward
Even though the law would not take effect until July 1, 2026, if signed by the governor, organizations that develop or deploy high-risk AI systems may want to begin compliance planning. By aligning with widely accepted frameworks like the NIST AI RMF and ISO/IEC 42001, businesses may establish a presumption of compliance. And, from a practical perspective, this early adoption can help mitigate legal risks, enhance transparency, and build trust among consumers—which can be particularly beneficial with respect to sensitive issues like hiring decisions.
Final Thoughts
Virginia’s new High-Risk Artificial Intelligence Developer and Deployer Act signals a pivotal moment in the governance of artificial intelligence at the state level and is a likely sign of things to come. The law’s focus on transparent documentation, fairness, and consumer disclosures underscores the rising demand for responsible AI practices. Both developers and deployers must understand the scope of their responsibilities, document their AI processes and make sure consumers receive appropriate information about them, and stay proactive in risk management.
President Trump’s Artificial Intelligence (AI) Action Plan Takes Shape as NSF, OSTP Seek Comments
On January 23, 2025, as one of the first actions of his second term, President Trump signed Executive Order (EO) 14179, “Removing Barriers to American Leadership in Artificial Intelligence,” making good on a campaign promise to rescind Executive Order 14110 (known colloquially as the Biden AI EO).
It is not surprising that AI was at the top of the agenda for President Trump’s second term. In his first term, Trump was the first president to issue an EO on AI. On February 11, 2019, he issued Executive Order 13859, Maintaining American Leadership in Artificial Intelligence. This was a first-of-its-kind EO to specifically address AI, recognizing the importance of AI to the economic and national security of the United States. In it, the Trump Administration laid the foundation for investment in the future of AI by committing federal funds to double investment in AI research, establishing national AI research institutes, and issuing regulatory guidance for AI development in the private sector. The first Trump Administration later established guidance for federal agency adoption of AI within the government.
The current EO gives the Assistant to the President for Science and Technology, the Special Advisor for AI and Crypto, and the Assistant to the President for National Security Affairs, in coordination with agency heads they deem relevant, 180 days—until July 22, 2025—to prepare an AI Action Plan to replace the policies that have been rescinded from the Biden Administration.
OSTP/NSF RFI
To develop an AI Action Plan within that deadline, the National Science Foundation’s Networking and Information Technology Research and Development (NITRD) National Coordination Office (NCO)—on behalf of the Office of Science and Technology Policy (OSTP)—has issued a Request for Information (RFI) on the Development of an Artificial Intelligence (AI) Action Plan. Comments are due by March 15, 2025.
This is a unique opportunity to provide the second Trump Administration with important real-world, on-the-ground feedback. As the RFI states, this administration intends to use these comments to “define the priority policy actions needed to sustain and enhance America’s AI dominance, and to ensure that unnecessarily burdensome requirements do not hamper private sector AI innovation.
Epstein Becker Green and its Artificial Intelligence practice group, along with its health care, employment, and regulatory teams, are closely monitoring how the administration will address the regulation of health care AI and workplace AI in this plan. During President Trump’s first term, the administration focused its AI policy primarily around national security. Given the great expansion of the types and uses of AI tools since President Trump’s first term, we anticipate the Trump Administration will broaden its regulatory reach during this term—with the aim of “enhancing America’s global AI dominance.”
We have seen an explosion of AI tools adopted by our clients within health care—both clinical and administrative—as well as for employment decision-making. We work closely with clients to manage enterprise risk and drive strategic edge through AI innovation and look forward to helping shape the current administration’s AI policies through this and other opportunities for engagement with federal policymakers.
Submission Guidelines
OSTP seeks input on the highest priority policy actions that should be in the new AI Action Plan. Responses can address any relevant AI policy topic, including but not limited to: hardware and chips, data centers, energy consumption and efficiency, model development, open source development, application and use (either in the private sector or by government), explainability and assurance of AI model outputs, cybersecurity, data privacy and security throughout the lifecycle of AI system development and deployment (to include security against AI model attacks), risks, regulation and governance, technical and safety standards, national security and defense, research and development, education and workforce, innovation and competition, intellectual property, procurement, international collaboration, and export controls.
OSTP encourages respondents to suggest concrete AI policy actions needed to address the topics raised. Comments may be submitted by email to [email protected] or by mail at the address on page 2 of the RFI. Email submissions should be machine-readable, not copy-protected, and include “AI Action Plan” in the subject heading. Additional guidelines, including font and page limits, appear on page 2.
NLRB’s Acting General Counsel Rescinds Biden-Era Labor Policies
On February 14, 2025, William Cowen (“Cowen”), the Acting General Counsel for the National Labor Relations Board (the “NLRB” or the “Board”) issued a memorandum rescinding more than a dozen policy memoranda issued by his predecessor, Jennifer Abruzzo (“Abruzzo”), who served as the NLRB’s General Counsel during the Biden administration until President Trump terminated her from the position on January 27, 2025. Citing a growing and unsustainable backlog of cases as the basis, Cowen rescinded policy and guidance memoranda that were controversial when issued, specifically including (1) GC 23-08, concerning non-compete agreements in employment contracts and severance agreements, and (2) GC 25-01, concerning “stay-or-pay” agreements requiring employees to pay back certain benefits provided by employers when employees separated from employment prior to the expiration of a defined period.
Background: General Counsel Memoranda
General Counsel memoranda are nonbinding policy guidance issued directly by the NLRB’s General Counsel or, as in this case, Acting General Counsel. The memoranda are generally directed to the NLRB’s regional field offices, and they are used as a tool to instruct the Board’s field staff about the General Counsel’s policy and enforcement goals.
During Abruzzo’s tenure as General Counsel, she issued numerous such memoranda that were seen as expanding previous interpretations of federal labor law to effectuate Abruzzo’s pro-union policy goals. The guidance contained in these memoranda, for example, limited employers’ abilities to lawfully communicate with employees, endorsed a more expansive definition of protected, concerted activity, and called for more aggressive enforcement of the National Labor Relations Act (the “NLRA”) against employers.
Cowen’s GC Memorandum 25-05
The memorandum Cowen issued on February 14, 2025—GC 25-05—explained that the Board has “seen [its] backlog of cases grow to the point where it is no longer sustainable.” In light of this unsustainable backlog of cases, Cowen conducted a review of active General Counsel memoranda and determined that numerous rescissions were warranted.
Among the key rescinded memoranda for employers were GC 23-08 and 25-01. GC 23-08 declared that “[e]xcept in limited circumstances . . . the proffer, maintenance, and enforcement” of non-compete agreements in both employment contracts and severance agreements violate the NLRA because such agreements unlawfully interfere with employees’ exercise of Section 7 rights. GC 25-01 similarly declared that “stay-or-pay” provisions—agreements where employees are asked to repay their employer certain funds if they separate from employment prior to the expiration of a designated stay period—“infringe on employees’ Section 7 rights in many of the same ways that non-compete agreements do and . . . therefore also violate Section 8(a)(1) of the Act unless narrowly tailored to minimize that infringement.”
In addition to these memoranda, Cowen’s memorandum also rescinded Abruzzo’s guidance in GC 23-05, concerning the interpretation of the Board’s decision in McLaren Macomb, 372 NLRB No. 58 (2023). As previously reported, Abruzzo’s GC 23-05 endorsed an expansive interpretation of McLaren Macomb to broadly prohibit non-disparagement and confidentiality provisions presented to employees in severance agreements. Cowen’s memorandum also rescinds Abruzzo’s guidance regarding whether college athletes should be considered employees, universities’ disclosure obligations under the NLRA, mandatory work meetings to discuss labor issues, and remedies available for violations of the NLRA, amongst other topics.
Practical Impact and Takeaways
Cowen’s memorandum is not binding law, and it does not reverse the current application of the recent decisions, such as McLaren Macomb, that it calls into question. If formal reversal of these decisions were to occur, it would likely take some time, particularly considering that the NLRB currently lacks a quorum following President Trump’s termination of Board Member Wilcox.
However, GC 25-05 is further evidence the new Administration intends to effect significant policy changes for the NLRB, including a shift in prosecutorial action away from certain of the Abruzzo-led NLRB’s targets over the last four years. These signaled policy changes may inform employers in analyzing the risk associated with the use of previously scrutinized provisions in employment contracts and severance agreements. Further, employers currently involved in matters pending before regional offices of the NLRB may see increased efforts to resolve the matters, including offers of settlement involving less onerous terms than those previously sought by the Board.
Employers should be cognizant and monitor closely for further updates in the near future, including other actions that signal the agency’s enforcement goals and priorities.
How to Summarize Government Work in Five Easy Bullets
It was reported this weekend that all federal employees received an e-mail from the Office of Personnel Management (OPM) telling employees to report “five bullets about what you did last week.” The e-mail also states that failure to do so would be interpreted to mean that the employee is offering their resignation. This is reported as part of the drive to shake up or reform, review, or rebuke the federal workforce. Whatever one speculates about motivation, this will likely be taken by many as a threat, but the e-mail reportedly does not have details about how any of the five points will be evaluated.
With this context, I would politely offer some suggested “bullets” as a former federal employee. My own career included different jobs over time at the U.S. Environmental Protection Agency’s (EPA) Office of Prevention, Pesticides, and Toxic Substances (OPPTS) — now known as the Office of Chemical Safety and Pollution Prevention (OCSPP). I started my federal career as a GS-4 summer intern in the pesticide program and had different positions, eventually leaving government service as a Schedule C political appointee as Assistant Administrator of OPPTS. I left government service in 2001.
With that range of positions in the Office, from a low-level employee in the organization to a much higher one, I offer some suggestions, in bullet form, describing generally the EPA work in words I believe would be applicable to what is “done” by employees in most every position in that Office. Most bullets are probably applicable across other federal programs and offices.
I have pondered how a federal employee can summarize the past or any week in simple bullet form. Since the reported e-mail does not include details about how granular the report should be, the following bullets describe the work of employees in OCSPP, applicable generally from my first job there in 1975 until the present time.
Suggestions for “five bullets”:
I complied fully and faithfully with my oath of office. (“I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”)
I performed tasks and assignments to implement the laws and regulations that govern the official duties of my program and agency.
I performed the duties outlined and required by my job classification in my position of record.
I followed the law and regulations regarding confidentiality of data and information sharing with outside parties that are part of my work.
I performed these assignments during work hours at my duty station as outlined in my personnel records (Standard Form 50 — Notification of Personnel Action).
If all those involved in the current attempt to “shake up” the civil service can credibly claim to have “done” these five things in the past week, the entire effort would not only be less controversial but also more successful.
PFAS Lawsuit Against Industrial Users of PFAS Highlights Risks
We have written numerous times over the past several years regarding the risks posed to current and historical corporate users of PFAS (whether knowingly or unknowingly), even as the stagelight focused most brightly for some time on risks from federal regulatory actions with respect PFAS. A PFAS lawsuit against industrial users of PFAS filed this month, though, provides further support for the notion that the greatest risks to corporations from PFAS lies in lawsuits likely to be filed against them in coming years for environmental pollution and personal injury. The City of Savannah, Georgia took legal action against numerous companies for contamination of its water systems. While some of the defendants include PFAS manufacturers, several defendants are alleged to be prior users of PFAS that discharged PFAS-contaminated effluent into waterways. This case should be at the forefront of corporate concern for PFAS risks as risk assessment and diligence programs are conducted in earnest.
PFAS Lawsuit Against Industrial Users
The lawsuit was filed by the City of Savannah against several PFAS manufacturers, as well as PFAS users, for discharge of PFAS into local waterways. Notably, the defendants from the “PFAS Users” group include coating resins, polymerization, paper, packaging, fabric coating, metal finishing, surfactants, textiles, roofing, insulation, and radiator manufacturing companies, among others. The defendants are alleged to have caused or contributed to the discharge of PFAS chemicals found in the city’s drinking water. Savannah is seeking compensatory damages from the defendants to pay for filtration and associated remediation technology. Savannah is also seeking punitive damages in the complaint.
Significance of Lawsuit for All Manufacturers
The lawsuit is notable for several reasons, one if which is that the defendants may not have used PFAS intentionally in its products or processes, yet the companies may still be liable for pollution damages from an unintentional and perhaps unknowing use of PFAS. A common refrain from companies assessing PFAS risks is that “we do not and did not use PFAS, so these risks do not apply to us.” The Savannah lawsuit shows otherwise, as even unknowing use of PFAS (or PFAS that gets into manufacturing processes as a contaminant) may be liable for class action lawsuit damages.
Further, while discovery has not yet begun, it is likely that many of the named defendants were historically permitted to discharge effluent into the waterways now alleged to be contaminated with PFAS. Of course, prior to the past couple of years, no regulatory entity set PFAS effluent discharge levels, nor was testing for PFAS prior to discharge required in many circumstances. Nevertheless, despite the legality of the discharges under permitting strictures, the companies nevertheless find themselves embroiled in PFAS litigation for pollution.
The lawsuit highlights the risks that we have predicted for several years to companies that have not manufactured PFAS, but rather have used PFAS in their manufacturing process or have used chemical mixtures that may have been contaminated with PFAS. The historical nature of such uses will not shield companies from litigation, and it is critical that manufacturing and industrial companies examine current and historical uses, assess legacy insurance policies, and conduct a full risk assessment to understand the business disruption potential that PFAS might have on their company.
Eighth Circuit Rules States May Challenge PWFA’s Inclusion of Abortion as a ‘Related Medical Condition’
Seventeen Republican-led states can continue their lawsuit challenging parts of the federal Pregnant Workers Fairness Act (PWFA) after the U.S. Court of Appeals for the Eighth Circuit recently ruled the states have standing to sue and remanded the case back to the lower court.
Quick Hits
The U.S. Equal Employment Opportunity Commission (EEOC) published a final rule for implementing the PWFA , which took effect on June 18, 2024. Several legal challenges to the rule’s inclusion of abortion as a “related medical condition” have been filed.
The Eighth Circuit recently revived a case that seventeen states brought to challenge provisions in the PWFA regarding accommodations for employees seeking an abortion after the district court found the states lacked standing.
The case will proceed at the district court level.
Changes in federal policy under the new presidential administration may impact the trajectory of the case.
On February 20, 2025, the U.S. Court of Appeals for the Eighth Circuit ruled that seventeen states—Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, and West Virginia—had standing to challenge parts of the PWFA related to reasonable accommodations for employees seeking an abortion.
The PWFA requires employers to provide reasonable accommodations for employees with pregnancy-related health conditions, which include miscarriage, stillbirth, and abortion under the final rule. In the lawsuit, the states argued that the EEOC exceeded its authority in how it defined “pregnancy-related health definitions.” The states claimed the PWFA regulations would hinder their ability to regulate abortions and their interests in maintaining a pro-life message in dealing with state employees. The states also argued the PWFA regulations would subject them to economic harm because of compliance costs.
On June 14, 2024, the U.S. District Court for the Eastern District of Arkansas denied the states’ request for a preliminary injunction. It ruled that the states lacked standing because they did not show a likelihood of irreparable harm from the PWFA regulations. The risk of enforcement is speculative because “unlike in situations involving private employers, the EEOC cannot bring enforcement actions against state employers,” the district court stated.
The Eighth Circuit disagreed and found the states are employers under the PWFA and the final rule. They would be required to provide accommodations, change employment practices and policies, and refrain from messaging that would be arguably prohibited under the rule. The court went on to find that the imposition of a regulatory burden action alone causes injury. Therefore, the states had standing.
Next Steps
This case was remanded to the U.S. District Court for the Eastern District of Arkansas. President Donald Trump recently removed two commissioners from the EEOC, and the agency has signaled a change in enforcement policies, and plans to do so when the Commission has a quorum. The agency could issue new regulations for the PWFA or change how it is approaching this case.
In the meantime, private and public employers may wish to review their policies and practices around reasonable accommodations for pregnancy-related conditions, so they continue to adhere to state and federal laws.