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 Citing a growing and unsustainable backlog of cases as the basis, Cowen rescinded policy and guidance memoranda that were controversial when issued, specifically including (1) GC 23-08, concerning non-compete agreements in employment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Among the key rescinded memoranda for employers were GC 23-08 and 25-01.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.
Nevada Bill Would Expressly Allow Directors To Approve Documents In “Preliminary Form”
Almost one year ago, Chancellor Kathaleen St. J. McCormick ruled that a board of directors of a Delaware corporation must at a “bare minimum” approve an “essentially complete” version of the merger agreement. Sjunde AP-Fonden v. Activision Blizzard, Inc., 2024 WL 863290 (Del. Ch. Feb. 29, 2024). See What Exactly Must A Board Approve When It Approves A Merger?
Within months, the Delaware legislature responded by adding Section 147 to the Delaware General Corporation Law. That statute establishes a final or “substantially final” standard for board approval (emphasis added):
Whenever this chapter expressly requires the board of directors to approve or take other action with respect to any agreement, instrument or document, such agreement, instrument or document may be approved by the board of directors in final form or in substantially final form. If the board of directors shall have acted to approve or take other action with respect to an agreement, instrument or document that is required by this chapter to be filed with the Secretary of State or referenced in any certificate so filed, the board of directors may, at any time after providing such approval or taking such other action and prior to the effectiveness of such filing with the Secretary of State, adopt a resolution ratifying the agreement, instrument or document. A ratification under this section shall be deemed to be effective as of the time of the original approval or other action by the board of directors and to satisfy any requirement under this chapter that the board of directors approve or take other action with respect to such agreement, instrument or document in a specific manner or sequence. Ratification under this section shall not be deemed to be the exclusive means of ratifying an agreement, instrument or document approved by the board of directors pursuant to this section, but shall be in addition to any ratification or validation that may be available under §§ 204 and 205 of this title or under the common law.
Now, the Nevada legislature ins considering adoption of a seemingly looser standard (emphasis added):
Whenever this title expressly requires the board of directors to approve or take other action with respect to any agreement, instrument, certificate or other document, including, without limitation, any agreement, instrument, certificate or other document required to be filed with the Secretary of State, the directors may approve, adopt or otherwise act upon such agreement, instrument, certificate or other document in final form or such preliminary form as the directors deem appropriate in their business judgment.
AB 239. I have not found any Delaware cases that apply the “substantially final” standard. However, this standard would appear to require the court to compare the final form of a document with the form approved by the board. That comparison would identify any differences, but the court would still need to answer the question of whether those differences are “substantial”. This approach is consistent with Delaware’s general approach to corporate law as it invites litigation over the meaning of “substantially”. Invariably, the result will be a mountain of fact-specific and nuanced decisions from the courts.
Nevada’s standard in contrast would defer to the directors’ business judgment. Presumably, that would allow directors to approve a preliminary form of a document or agreement even when the final form differs substantially from the form approved by the directors. Nevada’s proposed standard is much less likely to foment litigation because plaintiffs will have to overcome the much more difficult hurdle of establishing that the approval of a preliminary form was not a proper exercise of the board’s business judgment.
Multiple States Propose Bans on Food Additives and “Ultra-Processed Foods”
Since the start of February, at least four states have introduced or advanced proposals to ban various food chemicals and address concerns over the use of ultra-processed foods (UPFs). New food chemical bans have surfaced in recent days in Florida, Arizona, and Utah, while lawmakers in Illinois advanced a food chemicals ban that has long raised concerns for industry stakeholders.
The Illinois chemicals ban (SB 93) would prohibit brominated vegetable oil, potassium bromate, propylparaben, and Red No. 3, effective in 2028.
Florida has been one of the latest states to introduce a food chemical ban. If passed, the bill (SB 560) would prohibit food companies from manufacturing, selling or distributing food that contains nine food chemicals, including potassium bromate, propylparaben, Blue No. 1, Yellow No. 5, benzidine, butylated hydroxyanisole (BHA) and butylated hydroxytoluene (BHT).
In Arizona, Republican Sen. Leo Biasiucci said he was inspired by the MAHA movement to introduce HB 2164, which would ban any food that contains eleven chemicals: potassium bromate, propylparaben, titanium dioxide, brominated vegetable oil, Yellow No. 5 and 6, Blue No. 1 and 2, Green No. 3, and Red No. 3 and 40. The bill would also ban UPFs in school meals – however, the definition for UPFs included in this bill categorizes these as foods that contain any of the eleven chemicals set to be banned by the proposal. This definition differs significantly from other approaches, by focusing more on specific additives, rather than the degree of processing.
Utah has followed a similar approach to Arizona with HB 402. If passed, this bill would ban certain ultra-processed foods from being served at schools. UPFs are defined here as foods containing one or more of the following ingredients: brominated vegetable oil, potassium bromate, propylparaben, titanium dioxide, Blue No.1 and 2, Green No. 3, Red No. 3 and 40, and Yellow No. 5 and 6.
Guangdong Higher People’s Court: 107 Million RMB Settlement in Pokémon Copyright and Unfair Competition Case
On February 21, 2025, Guangdong’s Higher People’s Court announced a settlement of 107 million RMB in favor of The Pokémon Company for copyright infringement and unfair competition. Pokémon had sued Guangzhou Mai Network Technology Co., Ltd., Huo Network Technology Co., Ltd. and others for copyright infringement and unfair competition disputes over the game “Pokémon: Remastered” in December 2021. Pokémon requested 500 million RMB and was awarded 107 million RMB in the first instance at the Shenzhen Intermediate People’s Court. The Guangdong High People’s Court then mediated an appeal to reach the current settlement.
The Shenzhen Intermediate People’s Court held in the first instance that the core elements of the Pokémon characters, game protagonists, maps, etc. in the accused game correspond one-to-one and are similar to the corresponding elements of the Pokémon Company’s games. The multiple element systems formed by the combination of game elements are highly similar or even completely consistent, and many numerical system designs are the same. Therefore, the specific story expressions of the accused game and the Pokémon Company’s games are substantially similar. The accused game infringes the copyright of the Pokémon Company’s games (including the reproduction rights, information network dissemination rights and adaptation rights stipulated in Article 10, paragraph 1, items 5, 12 and 14 of the Copyright Law).
In addition, the Court also determined that the operation and promotion of the game in question violated Article 2 and Article 8, Paragraph 1 of the Anti-Unfair Competition Law, and constituted unfair competition.
The Guangdong Higher People’s Court stated:
Under the current background of various industrial policies to help Chinese games go global and strengthen the export of Chinese culture, equal protection of the intellectual property rights of digital entertainment products of Chinese and foreign parties in accordance with the law is an important aspect of adhering to cultural self-confidence and self-reliance and promoting the construction of a strong country in intellectual property rights. This case involves the rights protection lawsuit of the world’s top game and animation IP “Pokemon”, which has a high level of social attention, a large amount of compensation in the first instance, and an open trial in the second instance, which has educational and guiding significance for the innovation and standardized development of related industries.
…
In addition, it is necessary to remind relevant industries and practitioners that copying other people’s game products to gain attraction and influence among relevant player groups, thereby obtaining undeserved commercial benefits, may infringe copyright and other intellectual property rights, and may also constitute unfair competition. Competition in the game product market cannot stop at “copying”, but must innovate and deeply empower elements such as game play, which can truly benefit the healthy and long-term development of the game industry.
The full text of announcement is available here (Chinese only).
State Department Updates Criteria for Nonimmigrant Visa Interview Waivers
On February 18, 2025, the U.S. Department of State updated visa interview waiver (“drop box”) eligibility criteria for individuals renewing their visa stamps, resulting in sudden drop box appointment cancellations and administrative processing for some who had already submitted documents. The update, which took effect immediately, limiting eligibility for visa interview waivers, supersedes the expanded criteria set forth on December 21, 2023.
Quick Hits
Updated interview waiver criteria limits eligibility to those seeking a visa renewal in the same category and only if their most recent visa expired within twelve months prior to the application.
Visa appointment wait times are likely to increase.
Consulate action such as scheduling interviews for those already issued drop box appointments who may now be ineligible remains unclear.
The State Department updates followed the recent changes to U.S. Mission India’s nonimmigrant visa processing, which included application of the February 18, 2025, visa interview waiver criteria.
Eligible visa applicants under the new interview waiver criteria include those:
applying for visa classifications under A-1, A-2, C-3 (except attendants, servants, or personal employees of accredited officials), G-1, G-2, G-3, G-4, NATO-1 through NATO-6, or TECRO E-1;
applying for diplomatic- or official-type visas; or
applying for a visa in the same category as a previously held visa that expired less than twelve months prior to the new application.
In addition to falling under the above-listed categories, applicants must also:
apply in their country of nationality or residence;
have never been refused a visa (unless such refusal was overcome or waived); and
have no apparent or potential ineligibility.
The latest guidance also removes interview waiver eligibility for first-time H-2 visa applicants.
The State Department’s February 18, 2025, interview waiver eligibility criteria supersedes the interview waiver criteria published on December 21, 2023. Notably, the December 2023 criteria considered eligible for interview waivers those applying for a visa who were previously issued a visa in any category (except for a B-1 or B-2 visa) that expired less than forty-eight months prior to the new application.
The sudden change in eligibility has led to drop box appointment cancellations and administrative processing for some applicants who had submitted documents under the previous policy. The Bureau of Consular Affairs has not issued formal clarification on how these appointments and submissions will be treated, and each consulate may operate differently.
Key Takeaways
Stakeholders can expect longer visa appointment wait times due to the increased demand for visa interview appointments. Visa applicants may consider scheduling appointments and planning international travel well in advance. For employers, longer appointment wait times may mean a longer lead time during international new-hire onboarding, renewal processes, and business travel planning. Finally, stakeholders may want to consider cost-reduction measures, such as purchasing refundable plane tickets and other travel accommodations.
Québec’s Bold Proposal: Empowering Authorities to Safeguard Public Welfare During Work Stoppages
On February 19, 2025, Québec Minister of Labour Jean Boulet introduced Bill 89, which would amend the Québec Labour Code and related provisions to safeguard the well-being of the population by maintaining necessary services during strikes or lock-outs. According to the bill, the goal is to prevent “disproportionat[e]” impacts on “social, economic or environmental security,” especially for vulnerable populations.
The legislative changes would apply to all employers and unions under provincial jurisdiction in Québec, with the exception of the health and public service sectors, which already have specific provisions to maintain a wide range of services.
Quick Hits
On February 19, 2025, Québec Minister of Labour Jean Boulet introduced legislation that would ensure necessary services are maintained during strikes or lock-outs to protect public well-being.
The bill would empower the government and the Administrative Labour Tribunal to ensure necessary services are maintained during work stoppages, balancing the right to strike with public welfare.
The bill would allow the minister of labour to refer disputes to arbitration if mediation has failed and a strike or lock-out poses or threatens serious harm to the population.
In recent years, work stoppages have significantly affected Québec citizens. Consequently, Bill 89 proposes solutions to balance the needs of the public with the respect to the right to strike or lock out.
Proposed Legislative Changes
The proposed changes would empower the government to “designate, by order, a certified association and an employer [for whom] the Administrative Labour Tribunal may determine whether services ensuring the well-being of the population must be maintained in the event of a strike or lock-out.” The order would remain valid “until the filing of a collective agreement or [a] document in lieu thereof” (e.g., an arbitration award).
Once designated by the government, and at the request of one of the parties (i.e., the employer or the union), the Tribunal would have the authority to determine whether necessary services must be maintained during a work stoppage. The parties would have the opportunity to submit their respective positions before the Tribunal makes a decision.
If the Tribunal renders a decision requiring that services be maintained, the designated parties would be required to negotiate which services would be maintained within fifteen days of receiving notification. The Tribunal would then assess whether the agreement was sufficient to protect the well-being of the population. In the event the parties cannot reach an agreement, the Tribunal would have the authority to determine which services are necessary.
The bill further specifies that if a strike or lock-out is in progress, despite a decision from the Tribunal ordering the maintenance of services, the strike or lock-out may continue unless otherwise ordered by the Tribunal.
Additionally, if a strike or lock-out causes or threatens to cause serious or irreparable harm to the population and mediation efforts fail, the minister of labour can refer the dispute to arbitration, effectively ending the ongoing strike or lock-out and establishing arbitration procedures.
Practical Considerations
The legal implications of Bill 89 are significant. The bill would enhance the roles of the government and the Tribunal in managing labour disputes, ensuring that necessary services are maintained to prevent “disproportionat[e]” impacts on “social, economic or environmental security.” The legislation seeks to balance the right to strike with the need to protect public welfare, particularly for vulnerable populations. The labour minister’s authority to refer disputes to arbitration emphasizes the importance of resolving disputes without prolonged strikes or lock-outs.
It is important to note that Bill 89 does not define the term “disproportionate impacts on social, economic, or environmental security.” This language can be interpreted broadly, which could have far-reaching implications. Unions are likely to oppose Bill 89 and will likely participate in consultation periods before the National Assembly.
The proposed changes also include the addition of penal provisions to ensure compliance with necessary service agreements and Tribunal decisions in Article 146.2 of the Québec Labour Code.
Bill 89 deserves close attention, as it may affect future negotiations. If adopted, it is anticipated that unions may challenge the constitutionality of the law on the grounds of freedom of association.
President Trump Takes Additional Actions on Reciprocal Tariffs, Shipping, and Digital Services Taxes
On 21 February 2025, President Trump ordered three additional steps to implement the America First Trade Policy announced on 20 January 2025:
Establish a notice and comment process for the US Trade Representative (USTR) to collect input from interested parties on the proposed “reciprocal tariffs” announced 13 February.
Initiate a process for USTR to collect input on potential trade actions to address what USTR under the prior administration found to be China’s “targeting” of the maritime, logistics, and shipbuilding sectors in the United States and globally.
Direct the Treasury Secretary, working with USTR, Commerce, and the White House advisor to the President on trade and manufacturing, to formulate and impose tariffs and other measures to respond to other countries’ access barriers to and taxes on American digital services.
Each of these three steps launches parallel administrative proceedings before the relevant agencies that will culminate in recommendations to the President to impose tariffs or other trade measures. Companies and investors with interests impacted by the above topics should carefully review these announcements and the schedules for submitting comments and consider whether and how best to participate.
Notice and Comment Process Regarding Reciprocal Tariffs
USTR is requesting comments by 11 March 2025 regarding any unfair trade practices maintained by other countries and what steps USTR should take to address these practices. Comments should include the foreign country or economy concerned, the practice or trade arrangement of concern, a brief explanation of the operation of the practice or trade arrangement, and an explanation of the impact or effect of the practice or trade arrangement on the interested party or on US interests generally.
Of particular interest are comments on the trading practices and other tariff and non-tariff barriers and practices of 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. According to USTR, these countries cover 88 percent of total goods trade with the United States.
Submissions should quantify the harm or cost (including actual cost or opportunity cost) to American workers, manufacturers, farmers, ranchers, entrepreneurs and businesses from the practice or trade arrangement of concern – ideally ascribing a dollar amount to the harm or cost and describing the underlying methodology. Information that is business confidential can be submitted in confidence to USTR and separate from this specific process, USTR is also interested in ongoing engagement with and information from interested parties regarding unfair foreign trade practices of US trading partners.
Comments on Proposed Trade Remedies to Address China’s Maritime, Logistics, and Shipbuilding Practices
Separately, USTR is seeking comments from interested parties on how it should implement the findings of the Biden Administration pursuant to Section 301 of the Trade Act of 1974 that China was engaged in practices that targeted the maritime, logistics, and shipbuilding sectors in pursuit of what USTR found to be goals to dominate those sectors. Written comments are due by 24 March 2025. USTR will also hold a hearing on this matter on 24 March–requests to appear at the hearing are due by 10 March 2025. Additional written comments in rebuttal can be submitted no later than seven calendar days after the last day of hearings.
Action Against Foreign Countries’ Digital Services Taxes
In a 21 February 2025 memorandum, President Trump has separately directed the US Treasury Department, working with Commerce, USTR, and White House stakeholders, to formulate tariff and other responses to digital services taxes and related practices imposed by other countries. According to the memorandum, such practices are hindering the success of American digital services companies and investors in other markets and imposing unfair costs, barriers and risks on American companies, data, and jobs. Reports and recommendations on these issues are due to the president by 1 April 2025.Among the actions contemplated by the memorandum are:
Renewal of Section 301 trade actions from 2019 and 2020 against the digital services taxes of Austria, France, Italy, Spain, Turkey and the UK;
Consideration of dispute settlement against Canada and Mexico pursuant to the US-Mexico-Canada Agreement;
Recommended tariffs against US imported goods and services from countries imposing such taxes and other measures;
Actions to address mandates by other countries with regard to the content or content monitoring of US social media and other digital platforms and services;
A determination of whether to impose tariffs of up to 50% in response to tax measures that discriminate against US citizens and companies;
A moratorium on the levying of customs duties by other countries on electronic transmissions; and
A mechanism for American businesses to report to USTR on the foreign tax and regulatory practices of other nations that are believed to harm US companies.
Maryland Extends Lender Licensure Enforcement Deadline Amid Industry Pushback
On February 18, 2025, the Maryland Office of Financial Regulation (OFR) extended its temporary moratorium on the enforcement of mortgage lender licensure guidance and emergency regulations it issued on January 10, 2025. In that guidance and regulations, the OFR for the first time applied the State’s mortgage lender licensure requirements to acquirers and assignees (including passive trusts) of residential mortgage loans on Maryland properties. The temporary moratorium will expire making the new compliance deadline July 6, 2025. Please read our earlier discussion of these emergency regulations in our legal update Even Passive Trusts?!? Maryland Extends Mortgage Lender Licensure Requirements to Holders of Residential Mortgage Loans.
Following broad pushback from industry stakeholders, including some who suspended all mortgage operations in Maryland, Senator Pamela Beidle and Delegate Pam Queen sponsored the Maryland Secondary Market Stability Act of 2025 before both chambers of the Maryland General Assembly. As proposed, the emergency bill would provide an exemption from Maryland’s mortgage lender and installment loan licensure requirements for entities under certain circumstances that acquire or are assigned certain mortgage loan and/or installment loans but who do not originate, service, or collect payments on these loans on their own behalf. In their February 18th release, the OFR indicated they “strongly support[] the passage of this bill to ensure the continued availability of mortgage loans for Maryland consumers.”
Finally, through its announcement, the OFR “clarifie[d] that commercial lenders making loans exclusively for business purposes under Maryland’s installment loan statutes . . . are not subject to OFR’s licensing requirements under mortgage lending and installment licensing provisions.”
Hunton will continue to monitor developments from the Maryland legislature and the OFR regarding these assignee licensure requirements and provide periodic updates to clients.
Trump Administration: TPS for Haiti Will Terminate Aug. 3, 2025
On Feb. 20, 2025, DHS Secretary Kristi Noem partially vacated a July 1, 2024, decision by former DHS Secretary Alejandro Mayorkas to extend the Temporary Protected Status (TPS) designation for Haiti for 18 months.
Secretary Noem has limited the extension to 12 months, expiring Aug. 3, 2025, instead of Feb. 3, 2026. Work authorization documents based upon Haitian TPS are auto-extended to Aug. 3, 2025, rather than Feb. 3, 2026.
If no decision is made to extend Haitian TPS beyond Aug. 3, 2025, the expiration will become final.
Two lawsuits were recently filed in response to Secretary Noem’s decision to terminate Venezuelan TPS. Similar legal challenges may be made to the decision to terminate Haitian TPS.