Blockading the Ports: U.S. Imposes 10% Global Tariff; Higher Reciprocal Tariff Rates by Country
On April 2, President Trump issued an Executive Order (EO) imposing global reciprocal tariffs (White House Fact Sheet). The EO drew enough parallels to the Smoot-Hawley Tariff Act that Trump mentioned it in his Rose Garden announcement. The EO imposes a 10% baseline tariff on all imports to the United States beginning April 3, 2025.
On top of that baseline, the EO also imposes country-by-country tariffs reciprocal tariffs represented in the chart below. Those amounts are based on what the United States Trade Representative (USTR) determined in its 2025 Foreign Trade Barriers report to be the current tariff rate imposed on U.S. goods for imports to that country. That rate includes official tariffs, as well currency manipulation and other “trade barriers.” The “kind” reciprocal tariffs for each country are roughly half of that amount.
Certain goods will not be subject to the reciprocal tariff. Those include the following:
Communications of no value, humanitarian donations, information materials and media, and personal luggage, subject to 50 USC 1702(b);
Steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs;
Copper, pharmaceuticals, semiconductors, and lumber articles;
All articles that are or become subject to future Section 232 tariffs (e.g., steel, aluminum, autos and auto parts);
Bullion; and
Energy and other certain minerals that are not available in the United States.
For Mexico and Canada the existing tariffs imposed in March remain in effect. USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will be subject to a 25% tariff, and non-USMCA compliant energy and potash will be subject to a 10% tariff. However, if the EO specific to Mexico and Canada were to be terminated, USMCA compliant goods would receive preferential treatment, and non-USMCA compliant goods would be subject to the 12% reciprocal tariff.
In addition to the universal tariff imposition, beginning on May 2, 2025, the 54% tariff rate on imports from China will also be applied to packages worth less than $800 coming to the United States from China or Hong Kong.
Because the new tariffs are imposed under the International Emergency Economic Powers Act (IEEPA), there does not appear to be a formal process for requesting a waiver to the tariffs or providing comments on their implementation. However, it is likely that actions will be filed in U.S. courts as well as before the World Trade Organization contesting the tariffs.
Additional Author: Marta Piñol Lindin
What Every Multinational Company Should Know About … The Global and Reciprocal Tariffs Announcement
On April 2, 2025, President Trump implemented the steepest American tariffs in over a century. The implications for numerous multinational companies — including importers, manufacturers, distributors, and retailers — will be immense. As an aid to the importing community, we are providing: (1) a summary of the April 2 “reciprocal tariff” and other trade-related proclamations, including how these tariffs fit within other tariff pronouncements and the prior Section 232 and 301 tariffs; (2) an overview of multinational companies that could be most impacted by the reciprocal tariffs; and (3) the implications for importers trying to manage these drastic changes to the cost of importing goods into the United States.
At its core, the reciprocal tariff announcement consists of a baseline 10% tariff on all exports to the United States, with significantly higher duties on approximately 60 nations. In essence, countries that maintain a trade surplus or roughly equal trade in manufactured goods were hit with a 10% tariff, while countries that maintain significant trade surpluses — including China, the European Union (EU), Japan, Cambodia, and Vietnam — face steep new levies. China, the primary target of Trump’s trade war, now faces tariffs exceeding 50% on nearly all goods, and tariffs approaching 89% for many imports. Moreover, the tariffs are almost as great on countries that generally have formed the “China +1” strategy of many multinational companies, such as Cambodia, Vietnam, and Malaysia. The net result is an average tariff rate that has climbed from a historic average of under 3% to around 23% — the highest level in over a century.
Details of the Reciprocal Tariff Plan
A statement from the U.S. Trade Representative confirmed that the Trump administration calculated tariffs primarily based on trade imbalances rather than an analysis of trade barriers, as was initially telegraphed by the administration. Countries with neutral trade patterns or even trade deficits with the United States face a minimum 10% duty (the global tariff), while all other major trading partners (with the exception of Canada and Mexico) will be subject to sharply higher rates (the reciprocal tariffs). Tariffs will be imposed using the following timetable:
Implementation Timeline: The 10% global tariff takes effect at 12:01 a.m. on April 5, 2025. The higher reciprocal tariffs will take effect at 12:01 a.m. on April 9, 2025. It is not clear if Customs is already equipped to handle collecting these special tariffs, which likely will require implementation in the Automated Commercial Environment (ACE) portal that Customs maintains for importers to submit import-related information and to pay tariffs.
Notable Exemptions: Prior Trump administration tariffs were carved out:
25% Steel and Aluminum Tariffs:The tariffs on steel and aluminum, and identified derivative products, remain undisturbed at 25%.
25% Canada and Mexico:Canada and Mexico also are exempt from this round of tariffs, although separate 25% tariffs imposed due to the Trump administration’s concerns regarding unauthorized immigration and fentanyl imports remain in place. These latter tariffs continue to be partially suspended for United States-Mexico-Canada Agreement (USMCA)-compliant goods.
25% Automotive Tariffs: The reciprocal tariffs also exclude all automobiles and automotive parts, subject to the additional 25% duties imposed in Proclamation 10908 (“Adjusting Imports of Automobiles and Automobile Parts into the United States”) on March 26, 2025. The automotive tariffs, which became effective on April 3, impose a 25% sectoral tariff on sedans, SUVs, crossovers, minivans, cargo vans, and light trucks up to 8,500 pounds, with a payload capacity up to 4,000 pounds. The tariffs also extend to automobile parts such as engines, transmissions, powertrain parts, and electrical components, beginning on May 3, 2025. Again, this tariff construct is left untouched.
Sector-Specific Exclusions: Certain products, such as copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products, are unaffected by the April 2 reciprocal announcement. It is expected that these products will be subject to future tariffs, thus making this an “exemption” to allow for future action, rather than indicating no tariff imposition.
Future Sectoral Tariffs: The proclamation states that it will not apply to any future special tariffs that might be imposed under Section 232.
U.S.-Origin Content: The proclamation states that “the ad valorem rates of duty set forth in this order shall apply only to the non-U.S. content of a subject article, provided at least 20 percent of the value of the subject article is U.S. originating.”
Finally, President Trump also announced the end of duty-free shipping for many small parcels using the “de minimis” exemption. This further tightens trade restrictions, particularly on goods from China, which most commonly used the exemption.
U.S. Multinational Companies and Importers Hit Hardest Hit by the New Tariff Announcements
The new tariffs are likely to hit U.S. multinationals hardest in the following areas:
Companies that Import from China: China, which runs the largest trade surplus with the United States, continues to bear the brunt of duties. Goods from China now have to pay: (1) the normal Chapter 1-97 duties (generally 3%–6%); (2) the 20% additional duties imposed earlier this year by the Trump administration, related to Chinese government’s alleged failure to prevent fentanyl precursor exports; (3) a 34% reciprocal tariff rate; and (4) for about half of all Chinese imports, the 2018 Section 301 tariffs, which range from 7.5% to 25%. All of these tariffs stack, meaning that imports of Chinese-origin goods now face duties of 55%–60% and potentially up to 89%. There are no exceptions for goods produced by U.S.-owned subsidiaries.
Companies that Pivoted from China, Using a “China +1 Strategy”: In response to the tariffs imposed on China during the first Trump administration, many multinational companies — with the encouragement of both the Trump and the Biden administrations — pivoted to a “China +1” strategy. This involved generally moving production out of China and into other countries (the +1) to minimize tariffs and geopolitical risks and to reduce dependency on Chinese production. But the countries that most popularly used this strategy — Cambodia, Vietnam, Thailand, Malaysia, and India — now are facing high tariffs of their own, upending the benefits of the China +1 strategy.
Companies that Import from the EU: Companies importing goods from the European Union will be impacted more than anticipated by the reciprocal tariffs, with the Trump administration imposing a 20% duty on EU-origin products.
Automotive Companies: Automotive companies will be hit particularly hard in the new tariff environment, as they face increased costs on multiple fronts. Automobiles and automotive parts that fall under the specific automotive tariffs will see significant duty hikes, raising the cost of manufacturing and assembly. Additionally, reciprocal tariffs on all other imported components will further strain supply chains and profit margins.
Moreover, the following countries and sectors, while not a focus of the new tariffs, are at heightened risk for future tariff increases:
U.S. Importers Already Hit by High Reciprocal Tariffs: According to administration officials, the currently announced tariffs are the “ceiling” — unless other countries retaliate. To this end, many countries (and the European Union) have announced plans to develop retaliatory tariffs. The currently announced tariffs could thus increase even further if other countries implement their own retaliatory tariffs.
Canada and Mexico: Canada and Mexico were carved out from the April 2 tariffs, but this exemption is largely because of previously implemented tariffs on certain imports from these countries. For some importers, it may seem encouraging that USMCA-compliant products from Canada and Mexico remain duty-free. This relief, however, may be temporary. The USMCA is set to be reviewed by 2026, creating uncertainty about future trade terms.
Lumber, Pharmaceuticals, and Copper: While lumber, pharmaceuticals, and copper were excluded from the new reciprocal tariffs, this exemption is not expected to provide long-term relief for importers in these sectors. Instead, it is widely anticipated that these goods will be targeted by separate sector-specific tariffs in the coming months.
U.S. Companies Selling U.S.-Origin Goods into the EU, Canada, Japan, Korea, and Other Countries Hit by High U.S. Tariffs: While the Trump administration has cautioned countries from retaliating, all of the countries listed above are known to be preparing retaliatory tariffs, which potentially will be done on a joint basis.
Implications of the Tariff Announcements
The April 2 tariffs exceed initial expectations, both in scale and impact. The average U.S. tariff rate was just 2.7% at the outset of the first Trump administration, with earlier increases confined to one country and a couple of products. It now stands at 23% or higher, a nearly fourfold increase. The U.S. government is projected to collect $600–700 billion in tariffs annually, up from $95 billion per year — with importers of record (generally, U.S. companies) paying these tariffs. Further, unlike prior tariffs, the administration has signaled that few, if any, exemptions will be granted.
The April 2 tariffs also introduce significant compliance and cost-allocation challenges for U.S. importers. In this new trade environment, we expect CBP will increase its enforcement efforts considerably, focusing on high-tariff goods. Further, while previous tariffs generally were focused on one country (China), tariff-related risks are now spreading out to a large number of countries, especially those that once benefited from U.S. efforts to reduce reliance on China such as Cambodia, Vietnam, Thailand, and Malaysia.
Multinational companies thus should carefully and thoroughly reevaluate their import and customs programs in light of the new tariffs to ensure compliance and to mitigate potential financial risks. Below are several items that merit a special Customs and tariff compliance focus:
Country of Origin Determination: The level of tariffs is now most heavily influenced by the country of origin of imported goods, making accurate country of origin determinations a top (if not the highest) priority. Incorrect origin reporting could result in penalties, back duties, and potential legal consequences. To help prevent these outcomes, importers should focus on the following:
Importers should conduct thorough origin analysis by reviewing raw material/component sourcing, manufacturing processes, and assembly locations to ensure compliance with CBP transformation requirements.
Importers should consider working with customs compliance specialists or trade attorneys to assist with complex origin determinations and to avoid unexpected tariff liabilities.
Importers should prepare reasonable care memorandums to document the methodology and evidence used in determining the country of origin, providing a defensible position in case of an audit.
Importers should consider requesting advisory opinions regarding gray areas relating to the country of origin.
USMCA Compliance: USMCA-compliant goods may be exempt from many of the newly imposed tariffs, including the April 2 reciprocal tariffs. Accordingly, we expect Customs will focus heavily on ensuring all goods claiming preferential status under the USMCA in fact meet all requirements. Items for a probing compliance review in these areas include:
To take advantage of duty-free treatment under the USMCA, companies must have valid and complete USMCA certificates of origin at the time of entry. Post-entry certification is not permitted.
CBP is expected to closely scrutinize USMCA claims, so importers should immediately confirm all originating status claims are well documented. This includes conducting product-specific audits to verify that products meet regional value content (RVC) and tariff shift rules, ensuring eligibility before making a claim.
Anti-Dumping and Countervailing Duties (AD/CVD): In addition to reciprocal tariffs, we expect CBP to continue its strict enforcement of AD/CVD orders, particularly on imports from China and Southeast Asia. Importers should take steps to ensure compliance and minimize exposure to unexpected duty liabilities, including:
Importers should closely review Commerce Department scope determinations to confirm whether their products fall within the scope of existing AD/CVD orders.
Customs entry documentation (CF-7501) and supplier contracts should be carefully reviewed to ensure proper classification and duty payment. Importers should be prepared for enhanced CBP audits and verifications.
Chinese Parts and Components: We expect that the presence of Chinese-origin parts and components in finished goods will continue to be an area of particular CBP scrutiny. Consistent with the above point regarding country-of-origin determinations, the presence of Chinese-origin parts and components raises concerns about substantial transformation claims, which determine whether a product’s country of origin is considered China or another jurisdiction. Importers should consider putting reasonable care memorandums in place to document the analysis supporting substantial transformation claims, including descriptions of manufacturing processes and component alterations and supporting CBP advisory rulings.
Direct and Indirect Supply Chain Costs: Companies should take a holistic approach when evaluating the impact of tariffs, considering not just the direct cost but also indirect costs associated with supply chain adjustments, contract renegotiations, and compliance risks. Steps to consider include the following:
Importers should review supplier contracts to determine how tariff costs are allocated between buyers and sellers.
Importers should consider that supply chain disruptions due to increased tariffs may lead to delays in production and ordering, higher transportation costs, and the need to identify alternative sourcing options.
Companies should conduct cost-benefit analyses to evaluate whether shifting production to low-tariff jurisdictions or USMCA partners would provide long-term savings, despite short-term transition costs.
The message from Washington is clear: We are entering what will likely be an extended high-tariff, high-enforcement environment. The current trade landscape has vastly multiplied the need for multinational companies to understand the new importing rules and emphasize full compliance.
Privacy Tip #438 – FTC Chairman Shares Concerns Over 23andMe Data
In the ongoing saga of the 23andMe bankruptcy, Federal Trade Commission Chairman Andrew N. Ferguson recently sent a letter to the Trustee overseeing the 23andMe bankruptcy proceeding stating, “As Chairman of the Federal Trade Commission, I write to express the FTC’s interests and concerns relating to the potential sale or transfer of millions of American consumers’ sensitive personal information.”
The letter further outlined the promises 23andMe made to consumers about protecting the sensitive information it collected and maintained and that it had “made direct representations to its users about how it uses, discloses, and protects their personal information, including how personal information will be safeguarded in the event of bankruptcy.” It outlined additional promises 23andMe made to consumers and that “these types of promises to consumers must be kept.” Importantly, the letter states:
This means that any bankruptcy-related sale or transfer involving 23andMe users’ personal information and biological samples will be subject to the representations the Company has made to users about both privacy and data security, and which users relied upon in providing their sensitive data to the Company. Moreover, as promised by 23andMe, any purchaser should expressly agree to be bound by and adhere to the terms of 23andMe’s privacy policies and applicable law, including as to any changes it subsequently makes to those policies.
For 23andMe customers, now is the time to request the deletion of their data. Hopefully, the letter from the FTC will also escalate the concern over the potential sale of genetic information.
Opposition to Renewed COPA Application in Indiana Reveals FTC Leadership’s Views on Hospital Merger Enforcement
The Federal Trade Commission (FTC) recently submitted comments in opposition to a renewed application for a certificate of public advantage (COPA) that would, if granted, allow two hospitals in Indiana to merge despite potential antitrust concerns.
In its submission, the FTC suggested that it had no institutional bias against COPAs but routinely objects because of the price increases, declines in quality, and lower wages that the FTC argues result from most mergers subject to a COPA.
The FTC also said that it takes “failing-firm” defense arguments (i.e., the claim that one of the parties to the transaction will fail unless the merger is permitted) seriously and “never wants to see a valued hospital exit a community.” Furthermore, the FTC stated that it “has not challenged mergers with hospitals that are truly failing financially and cannot remain viable without the proposed acquisition.”
Nevertheless, the FTC noted the potential for cross-market harms as a reason to object to the Indiana hospitals’ COPA application. The FTC identified businesses with employees in counties not directly in the hospitals’ service areas who might be adversely affected by the transaction, the impact on the cost of health care for state employees, and the purported effect on patients insured by Medicare and Medicaid as reasons to object to the proposed application.
Trump Administration Announces “Reciprocal” Tariffs
On April 2, 2025, President Trump announced a minimum tariff of 10% on all imported goods, which take effect on April 5 at 12:01am EDT. He also announced “discounted reciprocal tariffs” higher than 10% for goods from several additional countries. In a separate order, the administration also announced the elimination of the de minimis exception to tariffs for goods coming from China.
Our Tariff Strategy team has distilled these latest orders into these important provisions:
Elimination of the de minimis exception – which exempts shipments of goods valued at less than $800 – for China unless sent through the international postal service. While de minimis was eliminated for China under a previous order, it was stayed due to challenges in its implementation. As this latest order is more specific regarding tariff collection mechanisms, it is more likely to be implemented on time. For those shipments through international postal services, de minimis will remain intact but other duties will come into effect, including 30% of shipment value OR $25 per item. Comes into effect May 2 and postal item duty escalates to $50 on June 1.
“Reciprocal tariffs” applicable to countries worldwide. These are the key provisions:
All countries: 10% tariff on all articles imported into the U.S. (not including services). Comes into effect at 12:01am EDT April 5, except goods loaded and in final mode of transit prior to 12:01am EDT on April 5.
Country-by-country: Country “reciprocal tariffs” – click here for the detailed list of countries. Comes into effect at 12:01 EDT on April 9.
Exemptions: These duties do NOT apply to a specific list of HTS codes, found here. This includes articles subject to the tariffs already imposed on steel, aluminum, copper, cars, and auto parts (those tariffs stand; these tariffs are not added on). Other exemptions include pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products. Any future tariffs pursuant to Section 232 will replace these tariffs.
USMCA: Other than those subject to exemptions OR goods originating from Canada and Mexico (as defined by USMCA), these duties are in addition to existing tariffs. If the goods are from Canada and Mexico but do NOT qualify as originating under USMCA, they are already subject to 25% tariffs except energy, energy resources, and potash from Canada, which are 10%.
Origin: These duty rates apply only to the “non U.S. content” of the article, if at least 20% of the content originates in the U.S.
De minimis exceptions remain available (except for China under the other order) for an indefinite period of time until Customs has processes in place to collect it; once those processes are in place de minimis will be eliminated for all countries.
It’s important to note that any tariffs on China — both in these orders and going forward — apply to Hong Kong and Macau as well. As it currently stands, all imports from China carry a MINIMUM tariff of 54%.
The order makes clear that the U.S. is open to negotiation. The responses of U.S. primary trade partners have varied, from threats of retaliatory tariffs to indications they will enter into negotiations with the administration to see if they can reduce them or exempt particular goods. Some countries are considering “countermeasures” that might go beyond tariffs.
The Senate has signaled its discomfort with tariffs against Canada, passing a bill (including Republican support) to undo the Canada tariffs by invalidating the “national emergency” that was used as the presidential authority to impose the tariffs. While the vote is symbolic, as the House has already committed to maintaining the national emergency and the White House has said it would veto the bill in any event, the bill may signal that tariffs on Canadian goods will be eased.
Our Tariff Strategy team suggests that companies should:
Check your contracts: whether the buyer or the seller ultimately pays the tariffs usually hinges on contract language rather than statutory or administrative law, and multiple clauses might be applicable depending on how tariffs and duties are defined.
Revisit shipping terms: different INCOTERMS can shift responsibility for payment, so companies may want to consider whether they want to adjust their shipping terms.
Check the HTS code under which you import to see if your product is exempt, and review products to determine if they may qualify for a tariff reduction if they contain U.S. origin components.
Consider standing by and delaying high-value imports for the moment if possible, as some countries will negotiate with the U.S., so their tariffs may be delayed or reduced.
Productively Pursuing and Maximizing Insurance Claims
Maximizing insurance claims starts with locating and notifying all potentially responsive coverages when facing a loss or claim. This article offers a 101 about what types of maritime-, transportation-, and shipping-related events insurance may cover and how to go about productively pursuing an insurance recovery when disaster strikes—even if your insurance company says “no.”
Two Overarching Types of Insurance
Without getting too far into the weeds of the many different types of insurance coverage available to policyholders, think about them as falling into one of these two broad buckets: (1) first-party insurance coverage, and (2) third-party insurance coverage.
First-party insurance describes coverages that respond to a policyholder’s losses, which do not involve any claim asserted against the policyholder (e.g., you, your business, your employer). First-party property policies such as marine property insurance and bumbershoot property insurance, for example, typically insure against loss of, or damage to, the policyholder’s property (e.g., structures, terminals (including piers, breasting dolphins, storage tanks, etc.), electronic equipment), as well as coverage for lost business revenue. These first-party property policies frequently are “all risk” policies, meaning they cover the policyholder’s losses unless caused by an expressly excluded peril that the insurer can prove (e.g., ordinary wear and tear). Property policies often include business interruption coverage and coverage for inventory or goods lost or damaged in transit. Other types of first-party policies relevant to the maritime industry include:
Inland Marine Insurance that protects movable business property for policyholders that aren’t on the seas, including trucking and construction companies, property developers, and contractors, for example;
Marine Hull and Machinery Insurance that protects from physical damage to ships, vessels, and their machinery on the water, at the dock, and under construction for most sizes of commercial vessels including tugs, barges, dredges, and passenger vessels;
Marine Cargo Insurance that protects goods while in transit, across various modes of transportation, and while in storage; and
Political Risk Insurance that protects against losses caused by “political” events in a foreign country.
Third-party insurance coverage sometimes is called liability insurance. That’s because it includes policies that provide insurance for the policyholder’s liability to third parties alleging damages. Perhaps the most well-known form of third-party insurance for policyholders in the maritime industry is maritime general liability insurance (and excess bumbershoot liability insurance), which provides broad coverage for allegations asserted against the policyholder for bodily injury, property damage, and product and completed operation for marine risks. Other types of potentially relevant third-party policies include:
Cargo Owner’s Liability Insurance to protect against the risks for property damage, bodily injury to third parties, and as a result of pollution from a cargo event in ocean transit;
Shipowners’ Liability (“SOL”) Insurance for a shipowner’s exposure arising from an alleged breach of a contract of carriage and certain liabilities that fall outside of the Protection and Indemnity (“P&I”) Club’s standard P&I rules;
Directors and Officers (“D&O”) Insurance that protects companies and their corporate officers and directors against claims alleging wrongful acts and may cover legal fees for responding to subpoenas and search warrants; and
Pollution Liability Insurance to supplement or bolster pollution coverage that may exist in other marine liability (and property) insurance; some policyholders have standalone pollution liability insurance to broadly cover allegations of property damage from an actual or threatened pollution incident (spill) including fines, penalties, criminal defense, and more.
A single event can implicate several types of coverage found in multiple different insurance policies. For example, a vessel colliding with a terminal may involve loss to:
the terminal’s structures and equipment covered by a marine property insurance policy;
the terminal owner’s profits covered by business interruption insurance (and other time element coverages);
claims by third parties (adjacent property owners or the government, for example) alleging property damage from pollutants released from the vessel or terminal’s structures that are covered by marine general liability insurance and pollution liability insurance;
claims by shareholders alleging malfeasance in allowing the collision to happen (depending on which entity was responsible for the tugs, for example) that are covered by D&O insurance; and
this does not begin to untangle the myriad insurance implications when analyzing claims against the vessel and potential subrogation claims.
It’s important to look for responsive coverage from a company’s entire insurance portfolio when facing a loss or claim.
Three Things to Keep in Mind When Pursuing Insurance
Many policyholders don’t productively or efficiently pursue all of the insurance that is provided by their insurance policies. Here are three considerations when filing claims:
Be prompt. One of the most important first steps in pursuing insurance is to make sure that notice of a loss, claim, or occurrence is prompt and otherwise meets the requirements of the insurance policy.
Be thorough. It is important to look at all potentially responsive coverages that may be located in several different insurance policies with varying notice provisions. The general rule is that notices should be given under all possible policies that might be triggered—regardless of type, year, or layer. The old adage “better safe than sorry” never rings more true than when it comes to a company giving notice to its insurers.
Be diligent. As already stressed, the notice provisions in insurance policies also may specify how, and in what form, notice should be given. The policies typically identify to whom notice should be addressed, and request a statement regarding all the particulars of the underlying claims.
After a loss or claim has occurred, the policyholder should present its claim to the insurer in a way that will maximize coverage. Many legal issues, such as trigger of coverage, number of occurrences, and allocation, can significantly affect the existence or amount of an insurance recovery. Moreover, certain causes of loss or liability may be excluded from coverage, while others are not. These are complex issues that vary by state law and require a high level of legal sophistication to be understood and applied to the facts of a particular case.
The insurer may respond to its policyholder’s notice letter with a request for information. Such requests may seek to have the policyholder characterize its claim in a way that will limit coverage. Before the policyholder engages in any such communications with its insurance company, the policyholder should know what legal issues are likely to arise, and how best to describe its claim to maximize coverage.
It’s important to get the little things right from the beginning to avoid being blindsided and enhance the likelihood of succeeding at the finish line.
Cleo AI Agrees to $17 Million Settlement with FTC
Sometimes, deals are too good to be true. That was the case for Cleo AI, an online cash advance company that promised consumers fast, up-front cash payments. According to the Federal Trade Commission (FTC), Cleo AI offered consumers a mobile personal finance application that “promises consumers instant or same-day cash advances of hundreds of dollars.” When a consumer requests a cash advance, Cleo AI offers two subscription models, Cleo Plus and Cleo Builder. Once the consumer picks a subscription, they must provide a payment method that Cleo AI can use to obtain a cash advance repayment and subscription and other fees.
According to the FTC’s Complaint filed against Cleo AI, the company limits the cash advances promised to consumers below the advertised amounts. In addition, Cleo AI “falsely promises that consumers can obtain cash advances ‘today’ or instantly,” while it actually takes several days. Cleo AI required consumers to pay an extra fee to obtain the cash advance the same day or the next.
After much dissatisfaction, many consumers attempted to cancel their subscriptions. However, Cleo AI made it difficult to cancel their subscriptions and stop the recurring fees.
The FTC alleges that Cleo AI violated Section 5 of the FTC Act because it made material misrepresentations or deceptive omissions of material fact to consumers that constitute deceptive acts or practices. It also alleges violations of the Restore Online Shoppers’ Confidence Act.
Cleo AI has agreed to pay $17 million to settle the allegations against it.
This settlement reinforces that the FTC will not tolerate companies making misrepresentations to consumers. It also teaches consumers to: a) beware of advertisements that are too good to be true, and b) be wary of providing payment information for a subscription. Once they have your payment information, it is difficult to end the subscription.
New “Reciprocal” Tariffs Announced, Effective Starting April 5 for Nearly All Countries and Sectors
On April 2, President Trump announced new tariffs impacting a wide array of imported products from nearly all countries. Additional tariffs range from 10% to nearly 50% and become effective starting April 5. Concurrently, the President took action to again terminate the eligibility of Chinese-origin items for low-value shipment benefits, including duty-free treatment.
President Trump’s actions are intended to address “a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits.” Invoking for a second time the International Emergency Economic Powers Act of 1977 (IEEPA), President Trump’s “Reciprocal Tariff” executive order imposes:
A 10% additional tariff on the vast majority of countries effective April 5, 2025, at 12:01 a.m. ET. Excluded from these duties are goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET on April 5, 2025.
Higher individualized tariffs on countries with which the US has the largest trade deficits, as set out in Annex I. This higher rate will replace the 10% additional tariff for the identified countries effective April 9, 2025, at 12:01 a.m. EDT. Excluded from these duties are goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET on April 9, 2025.
Countries subject to Column 2 rates (such as Russia and Belarus) remain the same.
A list of all country-specific tariff rates can also be found here. These country-specific ad valorem rates of duty shall apply to all goods, including articles imported pursuant to the terms of all existing U.S. trade agreements, except as provided below.
The following are excluded from any of the above tariffs regardless of country of origin:
Donations intended to relieve human suffering, informational materials, importations ordinarily incident to travel to or from any country (such as personal luggage), and any other articles subject to 50 USC 1702(b);
steel and aluminum articles and autos and auto parts already subject to Section 232 tariffs;
all articles that may become subject to future Section 232 tariffs; and
copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals and energy and energy products, as set out in Annex II.
For goods of Canada and Mexico, the existing February/March IEEPA orders and exclusions are unaffected by these announcements. This means that USMCA eligible goods will continue to enter free of the newly announced reciprocal tariffs, and non-USMCA eligible goods will be subject to the same 25% IEEPA tariff as has been in place since March 4, 2025, (other than Canadian energy and potash which will continue to be subject to a 10% IEEPA tariff which has been in place since March 4, 2025).
If at least 20% of the value of any article imported into the U.S. is U.S.-originating, and that value is substantiated by the importer, then the newly announced reciprocal duties will be collected only on the non-U.S. content of the imported article.
Finally, concurrent with today’s actions imposing new tariffs as discussed above, President Trump also took further action to eliminate the ability of articles of country-of-origin China to utilize de minimis duty-free treatment. Generally, shipments valued at $800 or less have been eligible for duty-free entry under provisions allowing smoother entry for low-value shipments. However, concurrent with the Reciprocal Tariff Executive Order President Trump signed an executive order amending the prior China-related IEEPA executive orders to decree that effective 12:01 am ET on May 2, 2025, shipments of Chinese-origin items, including international postal packages sent to the United States through the international postal network from the PRC or Hong Kong, will be ineligible for de minimis treatment and duties will be collected
For all other items subject to the reciprocal tariff announcements, de minimis will be terminated as soon as Commerce notifies the President that systems are in place to collect duties on those shipments.
Navigating Emission Control Areas: Operational, Legal, and U.S. Enforcement Risks of MARPOL Annex VI’s Low Sulphur Fuel Requirements
The North American Emissions Control Area (“ECA”), which has been in force well over a decade, is one of four existing ECAs around the world. Effective May 1, 2025, the Mediterranean Sea ECA will become the fifth. In March 2026, pursuant to MARPOL Annex VI, Regulation 13, the Canadian Arctic and Norwegian Sea will also be designated as ECAs, increasing the global total to seven. These two ECAs will become enforceable on March 1, 2027. In addition to these ECAs, other port States around the world have separately implemented domestic emissions control regulations in their territorial seas, with China being a prominent example.
The establishment of these new ECAs and similar emissions control regimes throughout the world will result in an increasing number of vessels crossing ECA boundaries—sometimes multiple times on a single voyage—and on a more frequent basis. The use of different fuel types has in more and more cases led to operational and safety challenges, which has inevitably translated into heightened legal and enforcement risks. Given this expansion of ECAs worldwide, and the growing patchwork of other related port State emissions requirements, it is more important than ever to revisit the various legal and operational risks that have emerged over time, particularly those in the United States, to ensure compliance and mitigate potential risks.
Background
Among other requirements, vessels subject to the International Convention for the Prevention of Pollution from Ships (“MARPOL”) must comply with low sulphur requirements set forth in Regulation 14 of Annex VI. These requirements mandate that ships use fuel with a sulphur content of no more than 0.5 percent when operating outside an ECA, and no more than 0.1 percent when operating inside an ECA. Alternatively, ships can install approved exhaust gas cleaning systems (“EGCS” or “scrubbers”) to meet these standards. EGCS remove sulphur from engine exhaust, achieving an equivalent reduction in sulphur emissions as required by the regulations.
Fuel Switching While Underway
Some estimates suggest approximately 10-15 percent of existing vessels subject to MARPOL are equipped with scrubbers, though that percentage is rising as many newbuild orders include installation of these systems.
Vessels not fitted with scrubbers may not carry onboard high sulphur fuel oil or other bunkers with a sulphur content exceeding the global cap of 0.5 percent. If a vessel transits through an ECA, it must consume ultra-low sulphur fuel oil, marine gas oil, or other fuel with a sulphur content no more than 0.1 percent. Vessels equipped with scrubbers may consume any combination of fuels, so long as the EGCS is fully operational and reduces the sulphur content to a level at or below applicable limits.
Whether or not a vessel is fitted with scrubbers, fuel oil changeover procedures are required by MARPOL Annex VI for vessels entering an ECA. The fuel oil changeover procedure must allow sufficient time for the fuel oil service system to be fully purged of all fuel oil exceeding the applicable sulphur limit before entering an ECA. Outside of ECAs, most ships that do not have scrubbers fitted primarily operate on very low sulphur fuel oil to meet the 0.50 percent global sulphur requirement. Upon approaching a designated ECA, such vessels undergo fuel switching to meet the more stringent emission requirements within the ECA of 0.1 percent sulphur content. Upon leaving the ECA, this process is essentially reversed.
Vessels fitted with scrubbers must also comply with local port State discharge prohibitions or other requirements for scrubber washwater, such as the U.S. Environmental Protection Agency’s Vessel General Permit or other state discharge regulations in the United States, such as California, where the use of scrubbers is not permitted.
Operational Risks—ECA Transits
The process of switching from higher sulphur fuels to lower sulphur fuels, and vice versa, must be undertaken with meticulous attention to detail by crew, following clear, standardized procedures to avoid operational failures.
Fuel changeovers, while necessary for regulatory compliance, pose safety considerations. The process typically involves a series of operations, including adjusting fuel systems, purging lines, and ensuring compatibility between the fuels. These challenges are well known, including the potential for fuel contamination, failure to properly control the temperature and viscosity of the marine fuel during transition, potential EGCS malfunction, and human error, among others. Experience has shown that these challenges can, under some circumstances, lead to loss of propulsion, loss of electrical power, engine damage, and other operational disruptions and mishaps.
Legal Risks Under U.S. Law—Reporting and Compliance
When these challenges materialize into operational disruptions or other incidents, this inevitably triggers a variety of potential reporting requirements, particularly in the United States, and the attendant significant legal risks of not reporting when required by law to do so. In addition, any non-compliance with low sulphur fuel standards—and failure to maintain accurate records in connection with these and related emissions requirements—can also result in civil or criminal penalties under applicable U.S. law.
Key reporting requirements for owners and operators of vessels, and their crews, when calling on U.S. ports include:
Marine Casualty Reporting: Depending on the facts and circumstances, failure of or damage to ship’s equipment, loss of propulsion, loss of electrical power, or other similar occurrence associated with fuel changeovers and ECA compliance may be considered a reportable “marine casualty” under 46 CFR § 4.05-1.
Hazardous Condition Reporting: Apart from the marine casualty reporting requirement, depending on the facts and circumstances, such incidents and occurrences could also potentially be considered a reportable “hazardous condition” under the Ports and Waterways Safety Act (“PWSA”). A “hazardous condition” is defined in 33 CFR § 160.2020 as “any condition that may adversely affect the safety of any vessel, bridge, structure, or shore area or the environmental quality of any port, harbor, or navigable waterway of the United States. It may, but need not, involve collision, allision, fire, explosion, grounding, leaking, damage, injury or illness of a person aboard, or manning-shortage.”
Determining whether a particular incident qualifies as a reportable “marine casualty” and/or “hazardous condition” under U.S. law is a fact-specific determination. This evaluation is influenced by the nature and severity of the incident, its location, the conditions, the circumstances surrounding it, and various other relevant factors. The U.S. Coast Guard issued guidance on marine casualty and other reporting requirements in Navigation and Vessel Inspection Circular 01-15. Since these reports must generally be made “immediately,” it is often prudent to report the incident right away, along with any necessary response actions being undertaken by the vessel to address the situation. Penalties can be significant for failure to report in a timely manner.
Failure to report a “marine casualty” can result in civil penalties for both individuals and corporate vessel owners and operators. Failure to report a “hazardous condition” under PWSA regulations can result in both civil and criminal penalties.
Submitting a prompt written or verbal report to the U.S. Coast Guard when an occurrence happens typically fulfills both regulatory requirements. In the event of a reportable “marine casualty,” the regulation also mandates the submission of CG Form 2692 within five days. This form serves as the method to report to the U.S. Coast Guard the specifics of what occurred.
Conclusion
The implementation of the Mediterranean Sea ECA and the upcoming designations of the Canadian Arctic and Norwegian Sea as ECAs underscore the continued global commitment to reducing vessel emissions. However, using low sulphur fuels in ECAs may present operational challenges, safety concerns, and legal risks, especially in the United States. As the decarbonization of shipping evolves, the use of alternative fuels and changes to vessel design may exacerbate these risks over time.
To mitigate legal and enforcement risks, vessel owners and operators should review their Safety Management Systems and operational procedures to ensure they align well with U.S. reporting and other regulatory requirements and policies cited above.
Crafting Composition Claims: Federal Circuit Reverses ITC on Diamond Polycrystalline Diamond Compact Patent Eligibility
The U.S. Court of Appeals for the Federal Circuit recently reversed an International Trade Commission decision that found certain composition claims for a polycrystalline diamond compact patent ineligible
This ruling provides valuable insights for companies drafting composition of matter claims in materials science, particularly when the claims involve measurable properties that reflect material structure
Companies drafting composition of matter claims should define a specific, non-natural material with measurable parameters, provide detailed specification support for enablement, and link measurable properties to structural features
In a significant decision for the materials science and patent law communities, the U.S. Court of Appeals for the Federal Circuit has overturned a ruling by the International Trade Commission (ITC) that found certain claims of a polycrystalline diamond compact (PDC) patent ineligible under U.S. patent laws. The case, US Synthetic Corp. v. International Trade Commission, decided on Feb. 13, 2025, offers important guidance on the patentability of composition of matter claims involving measurements of natural properties.
US Synthetic Corp. (USS) filed a complaint with the ITC alleging violations of customs laws known as Section 337 based on the importation and sale of products infringing its U.S. Patent No. 10,508,502 (‘502 patent), titled “Polycrystalline Diamond Compact.”
A PDC includes a polycrystalline diamond table bonded to a substrate, typically made from a cemented hard metal composite like cobalt-cemented tungsten carbide. PDCs are manufactured using high-pressure, high-temperature (HPHT) conditions. The process involves placing a substrate into a container with diamond particles positioned adjacent to it. Under HPHT conditions and in the presence of a catalyst (often a metal-solvent catalyst like cobalt), the diamond particles bond together to form a matrix of bonded diamond grains, creating the diamond table that bonds to the substrate.
The ‘502 patent describes several key properties of the PDC. It exhibits a high degree of diamond-to-diamond bonding and a reduced amount of metal catalyst without requiring leaching. The PDC’s magnetic properties reflect its composition, including coercivity, specific magnetic saturation, and permeability.
The patent discloses that USS developed a manufacturing method using heightened sintering pressure (at least about 7.8 GPa) and temperature (about 1400°C) to achieve these properties without resorting to leaching, which can be time-consuming and may decrease the mechanical strength of the diamond table.
ITC’s Initial Determination
The ITC initially found the asserted claims infringed and not invalid under Sections 102, 103, or 112 of U.S. patent laws. However, it determined they were patent ineligible under Section 101, preventing a finding of a Section 337 violation. Specifically, the ITC concluded the asserted claims were directed to the “abstract idea of PDCs that achieve . . . desired magnetic . . . results, which the specifications posit may be derived from enhanced diamond-to-diamond bonding,” and that the magnetic properties are merely side effects of the unclaimed manufacturing process.
Federal Circuit’s Analysis
The Federal Circuit focused its analysis on claim 1 and 2 of the ‘502 patent. Claim 1 recited, “a polycrystalline diamond table, at least an unleached portion of the polycrystalline diamond table including: a plurality of diamond grains bonded together via diamond-to-diamond bonding … a catalyst including cobalt … wherein the unleached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 250 Oe; wherein the unleached portion of the polycrystalline diamond table exhibits a specific permeability less than about 0.10 G∙cm3/g∙Oe.” Claim 2, depending from claim 1, further recited, “wherein the unleached portion of the polycrystalline diamond table exhibits a specific magnetic saturation of about 15 G∙cm3/g or less.”
The court emphasized that the claims were directed to a composition of matter, not a method of manufacture. It noted that USS had developed a way to produce PDCs with high diamond-to-diamond bonding and reduced metal catalyst content without leaching, addressing known issues in the field.
The Federal Circuit delved deeper into the relationship between the claimed magnetic properties and the structure of the PDC. The court recognized that coercivity, specific magnetic saturation, and specific permeability provide information about the quantity of metal catalyst present and the extent of diamond-to-diamond bonding, which were key features of the inventive PDC. As the court summarized, “Each of these magnetic properties provides information about the quantity of metal catalyst present in the diamond table and/or the extent of diamond-to-diamond bonding.”
The court also highlighted the importance of the specification’s disclosure, which included comparative data between the claimed PDCs and conventional PDCs. This data demonstrated that the claimed PDCs exhibited significantly less cobalt content and a lower mean free path between diamond grains than prior art examples. The court recognized that the prior art examples “exhibit a lower coercivity indicative of a greater mean free path between diamond grains and thus may indicate relatively less diamond-to-diamond bonding between the diamond grains.”
The Federal Circuit engaged in the two-step analysis established by Alice Corp. v. CLS Bank International. Applying Alice step No. 1, the court determined that the claims were directed to a specific composition of matter having particular characteristics, rather than being directed to an abstract idea and did not reach Alice step No. 2. The court found that, in view of the recitation of “a polycrystalline diamond table, at least an unleached portion of the polycrystalline diamond table,” a “plurality of diamond grains,” a “catalyst including cobalt,” and the limitations of magnetic properties, dimensional parameters, and the interface topography between the polycrystalline diamond table and substrate, the claims are plainly directed to matter.
In so holding, the court found the ITC erred when it concluded that the asserted claims are directed to the “abstract idea of PDCs that achieve . . . desired magnetic . . . results, which the specifications posit may be derived from enhanced diamond-to-diamond bonding.” The court also disagreed with the commission’s apparent expectations for precision between the claimed properties and structural details of the claimed composition. As the court noted, a perfect proxy is not required between the recited material properties and the PDC structure.
The court also affirmed the ITC’s finding that the claims were enabled under Section 112, indicating that the specification provided sufficient information for a person of ordinary skill to make and use the invention without undue experimentation. This determination was based on the detailed manufacturing methods and examples provided in the patent specification.
Takeaways
This decision provides valuable guidance for patent practitioners in the materials science field and reinforces the importance of carefully crafting claims and specifications to withstand Section 101 challenges. Composition of matter claims can remain patent-eligible under Section 101 even when they involve measuring natural properties, as long as they claim a non-naturally occurring composition.
When drafting claims for materials science inventions, practitioners should consider including specific, measurable parameters that distinguish the invention from naturally occurring substances or prior art.
The decision also highlights the importance of providing detailed descriptions in the specifications of how to measure claimed properties and how they relate to the composition’s structure or function.
Using International Arbitration to Resolve Retaliatory Tariff Disputes in Global Supply Chains
As trade tensions rise, retaliatory tariffs are disrupting global supply chains—particularly in the automotive industry and other manufacturing sectors. These unexpected costs are sparking disputes over who should bear the financial burden under cross-border contracts. International arbitration is increasingly seen as the forum of choice for resolving these conflicts.
Retaliatory Tariffs Disrupting Global Supply Chains
Retaliatory tariffs—duties imposed by one country in response to another’s tariffs—have lately become a harsh reality. These tit-for-tat measures are upending global supply chains, especially in the manufacturing sector. Companies suddenly face higher import costs, squeezed profit margins, and unpredictable regulations as countries strike back with their own duties. The automotive industry is particularly exposed, as tariffs on steel, aluminum, or automotive parts drive up production costs and disrupt just-in-time supply lines. In short, retaliatory duties are injecting uncertainty at every tier of global manufacturing.
This uncertainty is not just an economic nuisance—it’s a legal flashpoint. Contracts that once made financial sense can become unprofitable or impossible to perform when an unexpected tariff hits. Common points of contention include:
Who pays for newly imposed tariffs—supplier or buyer?
Can pricing be adjusted when costs spike?
Is non-performance excused under force majeure or hardship clauses?
We’ve already seen cases of suppliers threatening to halt deliveries or buyers refusing shipments because a new tariff tipped a deal into the red. Such scenarios often trigger formal disputes. Many companies are discovering too late that their agreements didn’t fully account for politically driven tariff shocks. In this turbulent landscape, businesses need a robust way to resolve disputes fairly and efficiently—and so they are increasingly considering international arbitration.
Why International Arbitration Works
International arbitration offers a neutral, enforceable, efficient, confidential, and competence-driven way to resolve these disputes:
Neutrality. Unlike court litigation, where you might end up suing or being sued by a foreign partner in an unfamiliar legal system, arbitration provides a neutral forum agreed upon by both parties. Companies can avoid the “home court” advantage that one side would have in its local courts. In arbitration, the dispute is heard by an independent tribunal, often with arbitrators of neutral nationalities. This level playing field is crucial when a tariff dispute pits businesses from different countries against each other.
Enforceability. Another major advantage is enforceability. An arbitration award (the final decision of the arbitrators) can be enforced almost anywhere in the world, thanks to a treaty called the New York Convention. Over 170 countries—including the U.S., EU nations, China, Mexico, and many others—are signatories to the New York Convention, which obligates their courts to recognize and enforce foreign arbitral awards. This means if a manufacturer wins an arbitration against an overseas supplier, the award can be taken to the supplier’s home country and converted into a local court judgment for payment. Such global reach is not guaranteed with a normal court judgment, which might not be enforceable abroad. For businesses facing losses from a tariff dispute, knowing that any resolution will hold up internationally can be a huge relief.
Efficiency: International arbitration is also typically faster and more flexible than litigating through court systems in multiple countries. Procedural rules can be streamlined in arbitration, which can significantly speed things along. There is only a limited right to appeal. Many arbitral institutions have expedited rules, and some allow the parties to resolve their disputes remotely via Teams or Zoom.
Expertise: The fact that parties can select arbitrators with industry experience can also help to resolve disputes more quickly than in court. An arbitrator who understands customs duties, supply chains, manufacturing timelines, the auto industry, and standard international commercial terms will grasp the issues more quickly than most judges and juries. Arbitrators with relevant expertise can expeditiously determine whether a dispute can be resolved with money damages, or whether it instead should be resolved with emergency interim relief such as a temporary restraining order or preliminary injunction, both of which arbitrators typically have the power to award.
Confidentiality: Unlike litigation in court, arbitration proceedings are private and confidential by default, which helps companies manage sensitive commercial issues outside the spotlight.
Practical Steps for Companies to Protect Themselves
In the short term, you should consider adding an arbitration clause to your agreements or updating the one you already have. Alternatively, if you’re already in the midst of a dispute, and you don’t have an arbitration clause in your supply agreement, you and your counterparty can nevertheless agree to arbitrate your dispute. Ask your lawyer to help you select the arbitration rules and institution—such as the International Chamber of Commerce, International Centre for Dispute Resolution, or Singapore International Arbitration Centre, among others—that best fit your needs.
Select the governing law carefully. The governing law is the national law that will be used to interpret the contract. This is important if, for instance, you want a legal system that recognizes sudden tariffs as a valid reason to adjust obligations, or, conversely, one that enforces contracts strictly.
Select the seat of arbitration (legal place of the arbitration) carefully. The seat determines the procedural framework, and which courts have limited oversight of the arbitration. Choose a seat in a neutral, arbitration-friendly jurisdiction such as New York, London, Singapore, or Geneva.
Retaliatory tariffs are likely to remain a feature of international trade for the foreseeable future, and global manufacturers—especially in industries like automotive, where supply chains cross many borders – will continue to feel the effects. International arbitration has emerged as a critical tool for resolving the disputes that inevitably arise from these trade frictions. It offers a neutral, enforceable, and effective way to get parties back on track when a deal is derailed by retaliatory tariffs. Businesses should see international arbitration not as a last resort, but as a built-in safety valve that can give all sides confidence to continue trading despite an uncertain tariff environment.
Wyoming Bans Most Non-Compete Agreements
Wyoming just banned most non-compete agreements (Wyo. Stat. § 1-23-108): starting July 1, 2025, most agreements that restrict workers from working in competitive jobs will be void, absent some exceptions for:
High-Level Employees: Non-compete agreements with “executive and management personnel” and “officers and employees who constitute professional staff to executive and management personnel” will still be enforceable. However, the statute does not define these terms, so employers should review those roles carefully.
Sale-of-Business: Sellers and buyers can agree to non-competes when selling or transferring a business.
Trade Secrets: Employers can protect trade secrets through narrowly tailored non-compete agreements that comply with the state’s definition of trade secrets, i.e. “the whole or a portion or phase of a formula, pattern, device, combination of devices or compilation of information which is for use, or is used in the operation of a business and which provides the business an advantage or an opportunity to obtain an advantage over those who do not know or use it.” Wyo. Stat. § 6-3-501(a)(xi).
Recovery of Relocation, Education, and Training Expenses: Employers can contract with employees to recoup training, education, and/or relocation expenses if an employee leaves within 4 years, with varying repayment percentages based on tenure:
Up to 100% if employment lasted less than two yearsUp to 66% if employment was between two and three years
Up to 33% if employment was between three and four years
Special Rules for Physicians
Non-compete agreements for physicians that restrict practice are prohibited. Further, doctors may notify patients with rare disorders about their new practice location and contact information. Notably, the statute clarifies that an agreement that contains an enforceable non-compete against a physician that is otherwise permitted by law will remain enforceable.
Looking Ahead
The statute applies only prospectively to contracts signed on or after July 1, 2025. Wyoming employers and business should consult legal counsel to update or implement restrictive covenant agreements in a timely manner.