FTC and DOJ Direct Agency Heads to Identify Anticompetitive Regulations for Elimination—Including in Health Care
President Trump’s Executive Order No. 14267, “Reducing Anti-Competitive Regulatory Barriers” (“EO 14267”), requires agency heads to provide by June 18, 2025, a list of anticompetitive regulations to the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ) to facilitate the review and possible elimination of these regulations.
In furtherance of EO 14267, the DOJ recently launched an Anticompetitive Regulations Task Force, and the FTC issued a Request for Information inviting members of the public to identify regulations with anticompetitive effects.
On May 5, 2025, the FTC and DOJ sent a jointly prepared letter (“joint letter”) to various agency heads that further emphasized the requirements of EO 14267. The joint letter directs agency heads to identify regulations that:
“create or facilitate the creation of monopolies;
create unnecessary barriers to entry for new market participants;
limit competition or have the effect of limiting competition between competing entities;
create or facilitate licensure or accreditation requirements that unduly limit competition;
unnecessarily limit companies’ ability to compete for agency procurements; or
otherwise impose anticompetitive restraints or distortions on the operation of the free market.”
The joint letter goes on to state that anticompetitive regulations can be found across the federal government, pointing to several industries, including health care. In this regard, the joint letter states the following:
Federal regulations in the healthcare sector, especially those promulgated under the Affordable Care Act, may have the effect of pushing low-cost insurance plans out of the market and inducing vertical consolidation that raises prices, while burdensome pharmaceutical regulations may delay the introduction of new, more affordable medicines.
No specific regulations were identified, but it is reasonable to expect health care regulations generally to be targeted for potential elimination soon.
Foley Automotive Update- 15 May 2025
Trump Administration and Tariff Policies
The U.S. lowered the base level of duties on most Chinese goods to 30% from 145%, and China cut its levies on many U.S. products to 10% from 125% as part of a 90-day tariff pause scheduled between the nations that is to take effect this week.
A U.S.-UK trade deal announced May 8 would allow imports of 100,000 vehicles annually by UK car manufacturers under a 10% “reciprocal tariff,” with additional vehicles subject to 25% levies. The American Automotive Policy Council expressed disappointment that in certain instances, “it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts.”
A U.S. Customs and Border Protection guidance document for the auto parts tariffs that took effect May 3 indicated that US-Mexico-Canada Agreement (USMCA)-compliant parts have a “0 percent additional ad valorem rate of duty.” The duration of this exemption is unknown.
A pair of executive orders announced on April 29 will ease some of the impact of certain automotive import tariffs. One order will establish a complex system of temporary and partial reimbursements for certain tariffed auto parts, and another order indicates tariffed vehicles and auto parts will not “stack” on other levies, such as the 25% duty on steel and aluminum. One large supplier quoted in Automotive News indicated the orders were a positive step, while an unnamed major supplier stated the tariff revisions were “not cause for celebration” as the industry will still encounter significantly higher operational costs. An analyst from Wedbush described the revised tariffs as a “gut punch” for the auto industry.
May 16, 2025 is the deadline for submitting public comments regarding the Trump administration’s Section 232 investigation into imports of processed critical minerals and their derivative products.
Automotive Key Developments
Automotive News provided updates on suppliers’ concerns regarding the potential for lower production volumes this year as a result of automotive import tariffs, as well as the challenges of assessing USMCA-compliant content in vehicles.
GM estimated the Trump administration’s tariffs could increase its costs by up to $5 billion this year, and potentially reduce 2025 net profit by up to 25% year-over-year. The automaker expects to offset its projected tariff exposure by roughly 30% through spending reductions and shifting more supplies and manufacturing to the U.S. In 2024, GM imported more vehicles into the U.S. than any other automaker.
Japanese automakers could collectively experience a $19 billion impact from U.S. import tariffs, according to analysis from Bloomberg.
Toyota and Honda projected annual net profit declines of 35% and 70%, respectively, for fiscal year ending March 2026, if U.S. automotive import tariffs are maintained. Toyota estimated its tariff impact reached $1.3 billion within just two months, while Honda expects an annual tariff impact of up to $3 billion.
Ford projected a $2.5 billion impact from tariffs in 2025, but noted it plans to offset up to $1 billion of the costs.
Revised analysis from the Anderson Economic Group estimates the Trump administration’s current automotive tariff policies will raise vehicle costs from $2,000 to $15,000.
U.S. new light-vehicle inventory is down by an estimated 24% year-over-year, representing a 61 days’ supply, following robust sales in April.
Kelley Blue Book estimated the U.S. new light-vehicle average transaction price (ATP) rose 2.5% in April 2025 from March. New-vehicle sales incentives fell to 6.7% of ATP last month, down from 7% in March and compared to a pre-pandemic norm of roughly 10%.
The U.S. House Ways and Means Committee included a measure to eliminate consumer tax credits of up to $7,500 for a new EV and $4,000 for a used EV at the end of 2025 in the “Big, Beautiful” tax package introduced on May 12. The initial proposal would extend new EV tax credits until the end of 2026 for automakers that sold less than 200,000 EVs in the U.S. between 2010 and 2025.
California and 16 other states filed a lawsuit over the Trump administration’s suspension of the $5 billion National Electric Vehicle Infrastructure (NEVI) program created by the 2021 Bipartisan Infrastructure Law.
The U.S. House on May 1 passed the third of three Congressional Review Act resolutions to repeal Clean Air Act waivers issued by the Environmental Protection Agency for California’s vehicle emissions programs. A Senate vote related to the proposals has not yet been scheduled.
Federal Reserve Chair Jerome Powell cautioned the U.S. “may be entering a period of more frequent, and potentially more persistent, supply shocks” due to economic and trade policy uncertainty.
OEMs/Suppliers
First-quarter 2025 profitability dropped by 2.3% for Hyundai, 6.6% for GM, nearly 40% for Volkswagen, and over 60% for Ford.
Automakers that include Ford, Volvo, Stellantis and Mercedes recently suspended 2025 financial guidance due to tariff-related uncertainty.
Magna estimated its annual direct tariff costs will reach $250 million for 2025.
Nissan reported a net loss equivalent to $4.55 billion for its fiscal year ended March 31, 2025 due in part to restructuring charges. The automaker intends to cut 15% of its global workforce, and consolidate its global production base to 10 assembly plants from 17.
Ford plans to raise prices by as much as $2,000 on certain Mexico-produced models in response to U.S. import tariffs.
GM plans to eliminate a shift at its Oshawa Assembly plant in Ontario in response to “forecasted demand and the evolving trade environment.”
Aptiv plans to establish two new plants in China in the second half of this year that will produce high-voltage connectors and active safety products.
Stellantis plans to launch a lower-priced version of its U.S.-made Ram pickup truck later this year to boost sales and mitigate tariff exposure. The automaker previously shifted pickup truck production for certain models from Michigan to Mexico.
Market Trends and Regulatory
AlixPartners predicts Chinese brands will account for 30% of the global auto market by 2030, compared with 21% in 2024.
BYD has a goal to achieve 50% of its sales outside of China by 2030.
Congress voted to repeal an Environmental Protection Agency rule on National Emission Standards for Hazardous Air Pollutants related to rubber tire manufacturing.
According to a Gartner survey of 126 supply chain executives, 47% of respondents were renegotiating contracts with suppliers to mitigate the impact of tariffs.
Autonomous Technologies and Vehicle Software
Automotive News provided an overview of recent developments in autonomous driving.
Ford plans to cut 350 connected-vehicle software jobs in the U.S. and Canada, and the reductions account for roughly 5% of the total team, according to a report in The Detroit News.
Waymo will partner with Toyota to develop robotaxi technology for personally-owned vehicles. Waymo’s self-driving partnerships include Hyundai and China’s Geely.
Electric Vehicles and Low-Emissions Technology
U.S. EV sales declined by roughly 5% in April, amid a 10% YOY increase in overall new-vehicle sales. Global EV sales in April were up by an estimated 29% YOY, led by a 35% increase in China.
Honda will postpone a planned $11 billion investment in new EV factories in Ontario, Canada due to slowing demand in North America.
GM’s Orion Assembly Plant in Michigan may not operate as a fully electric vehicle factory as originally planned, according to unnamed sources in Crain’s Detroit.
The American and Chinese car markets are likely to diverge further due to differences in supply chain costs and consumer preferences, as well as the nations’ ongoing trade conflicts.
GM suspended a project with Piston Automotive to establish a $55 million hydrogen fuel cell plant in Detroit.
Stellantis delayed production of its first battery-electric Ram pickup truck until 2027.
Hyundai plans to launch a hydrogen production and dispensing facility for heavy-duty trucks in Georgia.
Toronto-based battery recycler Li-cycle is pursuing a sale of its business or assets.
Canadian electric truck and bus maker Lion Electric faces a “very high” likelihood of liquidation after the Quebec government decided not to support a public bailout.
In the Fight Against Noncompete Agreements, Florida Chooses Employers
The Florida Legislature passed the “Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act” last month to provide employers two new outlets for protecting confidential information and client relationships from departing employees. Notably, the CHOICE Act does not change or limit Florida’s existing restrictive covenant law but rather expands it to provide a covered garden leave agreement and a covered noncompete agreement. If signed by Gov. Ron DeSantis, the law will go into effect on July 1, 2025.
Key Highlights
The act creates a presumption that garden leave agreements and noncompete agreements adhering to its “covered” guidelines are enforceable and do not violate public policy.
The act requires courts to issue a preliminary injunction against employees who seek to violate a “covered” agreement.
To have the injunction dissolved or modified, the “covered” employee must establish either:
The employee will not perform similar work during the covered period or use the confidential information or customer relationships of the covered employer.
The employee will not engage in the same business or activity as the covered employer within the restricted area.
The employer has failed to pay the covered employee the compensation contemplated under the covered agreement and has had a reasonable amount of time to cure the deficiency.
Who Is Covered?
A “covered employee” is defined as an employee or individual who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of either: (1) the county in which the employer has its principal place of business or (2) if the employer’s principal place of business is not in Florida, the county in which the individual resides. However, the law will not apply to healthcare practitioners licensed under Florida law.
A “covered employer” is defined as an entity or individual who employs or engages a covered employee.
What Are the Requirements?
Covered Garden Leave Agreement
A garden leave agreement allows an employer to prevent a departing employee from engaging in other employment provided the employee is still being paid. The period between the employee’s resignation and dissolution from the employer’s payroll is known as the “notice period.” Under the CHOICE Act, a garden leave agreement is enforceable if:
The employee was provided the agreement seven days before the agreement or offer of employment expired and was advised in writing of their right to seek counsel.
The employee acknowledges in writing they will receive confidential information or customer relationships during their employment.
The agreement provides:
The employee cannot be required to provide services to their employer after the first 90 days of the notice period.
The employee may engage in nonwork activities at any time, including during normal business hours, during the remainder of the notice period.
The employee may work for another employer while still employed by the covered employer with the covered employer’s permission.
The employer will pay the employee their regular base salary plus benefits for the duration of the notice period.
The notice period will not extend beyond four years. However, an employer may choose to shorten the notice period at its discretion by providing the employee with 30 days advance written notice.
Covered Noncompete Agreements
Noncompete agreements prohibit an employee from providing services similar to the services provided to their employer for a period of time within a specific geographic region after the end of their employment. Under the CHOICE Act, a noncompete agreement is enforceable if:
The employee was provided the agreement seven days before the agreement or offer of employment expired and was advised in writing of their right to seek counsel.
The employee acknowledges in writing they will receive confidential information or customer relationships during their employment.
The noncompete period does not exceed four years.
The noncompete period is reduced for the duration of any non-working portion of the notice period of any applicable garden leave agreement between the covered employee and covered employer.
What Should Employers Do?
Review existing agreements for compliance with the act and consider revisions.
Remember these agreements may be introduced during the course of employment provided the employee still has seven days to consider signing the agreement before the offer expires.
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Drug Pricing: Trump Signs “Most Favored Nation” Executive Order
On May 12, 2025, President Trump signed the second drug pricing-related Executive Order (EO) of his current administration. While President Trump’s first drug pricing-related EO focused on lowering the cost of prescription drugs by continuing and modifying the negotiations initiated by the Inflation Reduction Act of 2022 and issuing directives for administrative agencies to initiate cost cuts, this EO focuses on global comparative pricing.
The EO states that while American citizens represent only 5% of the global population, they fund around 75% of global pharmaceutical profits, thus causing Americans to underwrite the lion’s share of drug research and development for the global population. The EO claims that this discrepancy is rooted in a global price discrimination “scheme” whereby Americans pay upward of three times the cost for pharmaceuticals when compared to other similarly situated nations. This practice is alleged to have arisen as the result of pharmaceutical companies fighting against the ability of both public and private payors to negotiate for better drug prices for American patients. The EO concludes that the current scheme offers foreign health systems a “free ride” at the cost of American’s “generosity.” In an effort to rebut this practice, the EO directs that Americans, as the largest consumer of pharmaceutical products, receive “most-favored nation” pricing for pharmaceuticals. Said differently, under the EO, Americans would receive the pharmaceutical pricing equivalent to the similarly situated country receiving the best pricing.
To address this discrepancy, the EO makes several directives including the following:
The Department of Health & Human Services (HHS) shall facilitate direct-to-consumer (rather than insurance-based) purchasing programs for pharmaceutical companies to sell their product at most-favored nation pricing.
United States Trade Representatives and the Secretary of Commerce shall ensure that foreign countries are not engaged in any unreasonably discriminatory drug-pricing practices or policies.
Within 30 days of the EO, the Secretary of HHS, Robert F. Kennedy, Jr., in combination with the Centers for Medicare & Medicaid Services shall establish “target prices” for pharmaceutical products in line with most-favored nation pricing.
Should pharmaceutical companies fail to make “significant progress” voluntarily bringing their prices to the most-favored nation target price, the Administration shall engage in rulemaking to enforce most-favored nation prices.
These rulemaking processes aimed at encouraging pharmaceutical companies to comply with offering the most favored nation pricing for their products to American consumers includes:
HHS certification that importation of prescription drugs from other countries pursuant to 804(j) of the Federal Food, Drug, and Cosmetic Act (FDCA) poses no additional risk to the health and safety of consumers as well as a clear pathway for importation of low-cost prescription drug alternatives from other similarly situated countries.
Secretary of Commerce pursuing enforcement of anticompetitive practices perpetuated by pharmaceutical companies.
Secretary of Commerce action regulating the export of drugs or precursor material for drug production.
Commissioner of Food and Drugs revoking approval for drugs that have been improperly marketed or deemed ineffective or unsafe.
Action by all agency heads to address “global freeloading and price discrimination against American patient.”
This is not the first time the Trump administration has addressed drug pricing relative to other similarly situated countries. In late 2020, the first Trump Administration proposed an Executive Order requiring Medicare Part B drug prices to align with most-favored nation pricing. This EO faced significant challenges in court and was ultimately dropped by the Biden Administration.
Though this current EO has received significant press, several questions remain unanswered including how target prices will be identified and the allowable timeframe for pharmaceutical companies to voluntarily make “significant progress.” PhRMA, a pharmaceutical industry lobby group, responded to the EO almost immediately, calling it a “bad deal for American patients.”
No Protectable Code: No Literal or Nonliteral Copying
The US Court of Appeals for the Eighth Circuit affirmed a district court’s ruling that a plaintiff failed to establish copyright protection for its software platforms, drawing a distinction between “literal” copying (direct duplication of source code) and “nonliteral” copying (reproduction of structure, sequence, or user interface). InfoDeli, LLC v. Western Robidoux, Inc., et al., Case No. 20-2146 (8th Cir. May 5, 2025) (Gruender, Kelly, Grasz, JJ.)
InfoDeli partnered with Western Robidoux, Inc. (WRI), a commercial printing and fulfillment firm co-owned by family members, in 2009 to form a joint venture. The agreement leveraged InfoDeli’s expertise in developing custom webstore platforms and WRI’s capacity for printing and fulfillment. Their collaboration served major clients such as Boehringer Ingelheim Vetmedica Inc. (BIVI) and CEVA Animal Health, LLC, both providers of animal health products. InfoDeli built webstores enabling the companies’ sales teams to order promotional materials, which WRI then fulfilled. InfoDeli developed the Vectra Rebate platform for CEVA, allowing marketing staff to issue customer coupons that were also fulfilled by WRI.
By early 2014, tensions emerged. Without informing InfoDeli, WRI hired a competitor, Engage Mobile Solutions, to replace InfoDeli’s platforms for CEVA and BIVI. Engage used open-source software, in contrast to InfoDeli’s proprietary systems. WRI also shared InfoDeli-developed content with Engage to aid the transition. Shortly thereafter, WRI abruptly terminated its joint venture with InfoDeli.
InfoDeli sued WRI, CEVA, BIVI, and Engage for copyright infringement, tortious interference, and violations of the Missouri Computer Tampering Act related to certain webstores. The defendants counterclaimed conversion and tortious interference. The district court ruled in favor of the defendants on the copyright claims and denied InfoDeli’s motion on the counterclaims. After a jury sided with the defendants, InfoDeli filed motions for judgment and a new trial, both of which were denied. InfoDeli appealed.
The Eighth Circuit found that InfoDeli failed to prove its platforms were protected by copyright. The Court distinguished between “literal” and “nonliteral” copying, explaining that literal copying referred to direct duplication of original source code while nonliteral copying involved reproducing the overall structure or user interface. The district court had already determined that the nonliteral elements of InfoDeli’s platforms were not copyrightable. On appeal, InfoDeli did not challenge this determination regarding the individual elements. Instead, InfoDeli argued that the platforms should be protected “as a whole,” claiming that the interrelationship of elements made them protectable. However, the Eighth Circuit found that InfoDeli did not explain how the elements’ arrangement exhibited the required creativity for copyright protection.
InfoDeli further argued that the district court erred in not considering the verbatim copying of its source code. However, since InfoDeli’s complaint only alleged infringement of nonliteral elements, the Eighth Circuit found that the district court properly focused on those claims.
InfoDeli also argued that the district court erred by relying on InfoDeli’s expert’s list of protectable elements for the BIVI platform. However, the Court rejected this claim, pointing to precedent holding that when a plaintiff identifies specific elements as protectable, it effectively concedes that the remaining elements are not.
FDA Announces Expanded Use of Unannounced Inspections at Foreign Manufacturing Facilities
On May 6, 2025, the U.S. Food and Drug Administration (FDA) announced its intend to expand the use of unannounced inspections at foreign manufacturing facilities that produce food, as well as essential medicines and other medical products intended for American consumers. This builds upon FDA’s Office of Inspection and Investigations Foreign Unannounced Inspection Pilot program in India and China and aims to ensure that foreign companies will receive the same level of regulatory oversight and scrutiny as domestic companies.
FDA stated that it will also evaluate the agency’s policies and practices for improvements to the foreign inspection program, which will include clarifying policies for FDA investigators to refuse travel accommodations from regulated industry, including lodging and transportation arrangements.
FDA conducts approximately 12,000 domestic inspections and 3,000 foreign inspections each year in more than 90 countries, according to the FDA press release. While US manufacturers undergo frequent, unannounced inspections, foreign firms have often had weeks to prepare, though FDA supposedly found deficiencies more than twice as often than during domestic inspections.
Despite this announcement, anonymous FDA officials noted that the recent staffing cuts in FDA have made it harder for the inspections teams to keep up with demands.
FDA Assistant Commissioner for Inspections and Investigations Michael Rogers stated that, “FDA’s rigorous, science-based global inspections of manufacturing facilities ensure that the food and drug products that enter the US marketplace, and the homes of American consumers, are safe, trusted, and accessible. These inspections provide real-time evidence and insights that are essential for making fact-based regulatory decisions to protect public health.” Michael Rogers will be retiring from FDA on May 14, 2025.
BIS Issues Four Key Updates on Advanced Computing and AI Export Controls
On May 13, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced four significant policy developments under the Export Administration Regulations (“EAR”), affecting exports, reexports, and in-country transfers of certain advanced integrated circuits (“ICs”) and related computing items with artificial intelligence (“AI”) applications. These actions reflect the Trump administration’s first moves to address national security risks associated with exports of emerging technologies, and to prevent use of such items in a manner contrary to U.S. policy. Below is a summary of each development and its practical implications.
1. Initiation of Rescission of the “AI Diffusion Rule”
As explained in a press release, BIS has begun the process to rescind the so-called “AI Diffusion Rule,” issued in the closing days of the Biden administration and slated to go into effect on May 15. That rule would have imposed sweeping worldwide controls on specified ICs and set up a three-tiered system for access to such items by countries around the world. The rescission is intended to streamline U.S. export controls and avoid “burdensome new regulatory requirements” and strain on U.S. diplomatic relations.
It will be important to monitor developments for BIS’s anticipated issuance of the formal rescission and for the control regime that BIS will likely implement in its place. In the meantime, all IC-related controls preceding the AI Diffusion Rule remain in effect.
2. New End-Use Controls for Advanced Computing Items
BIS has issued a policy statement informing the public of new end-use controls targeting the training of large AI models. Specifically, the statement provides that the EAR may impose restrictions on the export, reexport, and in-country transfer of certain advanced ICs and computing items when there is knowledge or reason to know that the items will be used for training AI models for or on behalf of weapons of mass destruction or military-intelligence end-uses in or end-users headquartered in China and other countries in BIS Country Group D:5. Furthermore, U.S. persons are prohibited from knowingly supporting such activity.
This development underscores the importance of robust due diligence and end-use screening for companies involved in exports, re-exports, and transfers of such items, especially to Infrastructure as a Service providers.
3. Guidance to Prevent Diversion: Newly Specified Red Flags
To assist industry in preventing unauthorized diversion of controlled items to prohibited end-users or end-uses, BIS has published updated guidance identifying new “red flags” that may indicate a risk of such diversion. The guidance provides practical examples and scenarios, such as unusual purchasing patterns, requests for atypical technical specifications, or inconsistencies in end-user information. Companies are encouraged to review and update their compliance programs to incorporate these new red flags and to ensure that employees are trained to recognize and respond to potential diversion risks.
4. Prohibition of Transactions Involving Certain Huawei “Ascend” Chips Under “General Prohibition Ten”
BIS has released guidance regarding the use of and transactions in certain Huawei “Ascend” chips meeting the parameters for control under Export Control Classification Number (“ECCN”) 3A090, clarifying the application to such activities of “General Prohibition Ten” under the EAR. This prohibition restricts all persons worldwide from engaging in a broad range of dealings in, and use of, specified Ascend chips that BIS alleges were produced in violation of the EAR.
Regarding due diligence in this context, BIS has provided the following guidance:
If a party intends to take any action with respect to a PRC 3A090 IC for which it has not received authorization from BIS, that party should confirm with its supplier, prior to performing any of the activities identified in GP10 to ensure compliance with the EAR, that authorization exists for the export, reexport, transfer (in-country), or export from abroad of (1) the production technology for that PRC 3A090 IC from its designer to its fabricator, and (2) the PRC 3A090 IC itself from the fabricator to its designer or other supplier.
Key Takeaways for Industry
It is important to keep in mind that the BIS actions focus on dealings in ICs and advanced computing items meeting the control parameters of ECCN 3A090 and related ECCNs. With that in mind, the following steps are recommended:
Review and update compliance programs: Impacted companies should promptly assess their export control policies and procedures in light of these developments, with particular attention to end-use and end-user screening.
Monitor regulatory changes: The rescission of the AI Diffusion Rule and the introduction of new end-use and General Prohibition Ten controls may require adjustments to licensing strategies.
Enhance employee training: Incorporate the newly specified red flags and guidance into training materials for relevant personnel.
BIS’s latest actions reflect a dynamic regulatory environment for national security regulation of advanced computing and AI technologies. Companies operating in these sectors should remain vigilant and proactive in managing compliance risks, as there are likely to be more developments in this area in the months ahead.
Florida’s Proposed Choice Act to Add Significant Teeth to Enforcement of Non-Compete Agreements
Recently, the Florida legislature passed the “Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act.” For certain employees earning higher salaries, the CHOICE Act will make it much easier to enforce non-compete agreements in Florida and allow companies to enforce longer non-compete periods. It is expected that Governor DeSantis will sign the legislation soon, and the new law will take effect on July 1, 2025.
HIGHLIGHTS OF THE NEW LAW
It applies to “Covered Employees” which includes employees and independent contractors who either:
Work primarily in Florida; or
Work for an employer whose principal place of business is in Florida and their agreement is expressly governed by the Florida law.
A “Covered Employee” must also earn or be reasonably expected to earn a salary greater than twice the annual mean wage of the county in this state in which the covered employer has its principal place of business, or the county in this state in which the employee resides if the covered employer’s principal place of business is not in this state. Notably, “salary” includes the annualized base wage, salary, professional fees, and “other compensation for personal services” as well as “the fair market value of any benefit other than cash.” But “salary” does not include things such as health care benefits, severance pay, retirement benefits, expense reimbursement, discretionary incentives/awards, “distribution of earnings and profits not included as compensation for personal services,” or anticipated but indeterminable compensation such as tips, bonuses, or commissions.
”Health care practitioners” are exempted, but remain subject to current law, section 542.335.
The Act permits non-compete agreements up to four years in length. In contrast, under Florida’s current non-compete statute, employee-based non-competes lasting longer than 2 years are presumed to be unreasonable and unenforceable.
To fit under the Choice Act:
The employee must be advised in writing of the right to seek counsel before signing;
The employee must acknowledge in writing that the employee will receive confidential information or customer relationships during their employment;
If the employee has a garden-leave agreement, the non-compete period is reduced day-for-day “by any non-working portion of the notice period”; and
The employer must provide at least 7 days’ notice of the non-compete before an offer of employment expires or 7 days’ notice before the date that an offer to enter into a “covered non-compete agreement” expires.
The CHOICE Act also addresses Covered Garden Leave Agreements, which require employers to keep paying an existing employee for a certain period of time (up to 4 years) even though the employee is not required to perform any work. Garden Leave Agreements are common in sales and other customer relationship-based jobs as a way for employers to solidify and secure a departing employee’s client relationships before he or she starts a new job. Similar to Covered Non-compete Agreements, the Covered Garden Leave Agreements also require a seven-day notice period prior to signing, notice that advises the employee of the right to seek counsel, and an acknowledgment that the employee will receive access to confidential information or customer relationships.
For those covered, the CHOICE Act requires strict enforcement and makes it much easier for employers to obtain injunctions. Courts are required to preliminarily enjoin a Covered Employee from providing competing services to any business, entity, or individual during the non-compete period. Covered Employees can only modify or dissolve the injunction if they prove by clear and convincing evidence that (1) they are not in a competing role or will not use the employer’s confidential information or customer relationships, (2) the employer failed to pay or provide the consideration provided in the non-compete agreement following a reasonable opportunity to cure, or (3) the new employer seeking to hire the covered employee is not engaged in and is not planning or preparing to engage in business activity similar to the enforcing employer in the geographic area specified in the non-compete agreement.
The statute also requires courts to enjoin the new business or individual employing the employee subject to a non-compete or garden leave agreement, at which point the burden shifts to the new employer in the same manner as it shifts to the employee (although the new employer may not be allowed to claim “failure to pay” – i.e., the second defense noted above). Thus, businesses that are not parties to the non-compete agreement can still be subject to lawsuits and injunctive relief.
Notably, the Choice Act does not modify existing law, including Florida’s current non-compete law in section 542.335. Employees who are not “Covered Employees” under the CHOICE Act or who otherwise have not signed a non-compete that complies with the new Act can still have enforceable restrictive covenants under existing Florida law. But because section 542.335 places a significantly higher barrier on enforcing restrictive covenants, employers relying on non-compete agreements should obtain legal advice to determine whether to modify their agreements to take advantage of this new law.
NEXT STEPS FOR EMPLOYERS
Anyone with employees in Florida or with non-compete agreements that choose Florida law should contact an attorney to determine whether existing agreements should be revised in light of the CHOICE Act, and whether new agreements should take advantage of its provisions. It is likely that current agreements do not have certain language or meet the new notice requirements required under the Act.
Parties contemplating corporate transactions involving Florida businesses or Florida employees that include restrictive covenants may now wish to rely on a Florida choice-of-law provision (if applicable) rather than the law of a foreign jurisdiction, such as Delaware, which would not be affected by the CHOICE Act.
Companies should carefully review their current confidentiality policies and procedures to ensure that they are properly documenting employees’ receipt of and agreements to protect company confidential information and customer relationships.
Companies should review employee compensation to ensure that the employees whom the company desires to be subject to non-competes under the new law meet the “salary” threshold.
DOE Set to Eliminate Presidential Permit Requirement for Cross-Border Transmission Facilities and Streamline Electricity Export Authorizations
On May 12, 2025, the U.S. Department of Energy (DOE) announced a proposal to streamline the application process for authorizations to transmit electricity from the United States to other countries (e.g., Canada and Mexico).[1] At the same time, DOE issued a “direct final rule” rescinding its regulations regarding applications for presidential permits “authorizing construction, connection, operation, and maintenance of facilities for transmission of electric energy at international boundaries.”[2] Taken together, these actions, if implemented as proposed, likely will make it faster, easier, and less expensive for companies to access cross-border markets and reduce their attendant regulatory obligations, including reporting requirements. Comments on the Proposed Rule will be due on or about July 15, 2025 (60 days from expected publication in the Federal Register). The Final Rule will take effect on the same date unless DOE receives “significant adverse comments”[3] within 30 days of publication.
These actions comprise part of what DOE calls its “largest deregulatory effort in history, proposing the elimination or reduction of 47 regulations that are driving up costs and lowering quality of life for the American people.”[4] DOE claims that, overall, the changes “will save the American people an estimated $11 billion and cut more than 125,000 words from the Code of Federal Regulations.”[5] Indeed, the Proposed Rule would reduce the relevant regulations from approximately 1,300 words spanning nine sections to just one 85-word section that would empower applicants to include only such information in their filings that they “deem[] relevant” to the requested authorization under the Federal Power Act (FPA), with DOE exercising a “strong policy in favor of approving applications, and doing so quickly and expeditiously.”[6]
Citing President Trump’s Executive Order (EO) 14154 (Unleashing American Energy) and EO 14192 (Unleashing Prosperity Through Deregulation), DOE states that it is rescinding the cross-border facility regulations and proposing to amend the export authorization regulations because they “impose economic, administrative and procedural burdens” that “impede private enterprise and entrepreneurship and run contrary to the President’s goal of unleashing American energy.”[7]
The export authorization regulations flow from Section 202(e) of the FPA, which provides that “no person shall transmit any electric energy from the United States to a foreign country without first having secured an order of [DOE] authorizing it to do so.”[8] It continues that DOE “shall issue” such approval orders “upon application unless, after opportunity for hearing, it finds that the proposed transmission would impair the sufficiency of electric supply within the United States or would impede or tend to impede the coordination in the public interest of facilities” subject to its jurisdiction.[9]
DOE proposes to amend those regulations “to reduce burden and remove out of date requirements while simultaneously bolstering American energy dominance by increasing [electricity] exports and subsequently the reliance of foreign nations on American energy.”[10] The amended regulations “will simply allow applicants to include information the applicant deems relevant to such an authorization for consideration by the DOE” under the FPA.[11] Specifically, 10 C.F.R. § 205.300 would be amended to read, in full: “To obtain authorization to transmit any electric energy from the United States to a foreign country, an electric utility or other entity subject to DOE jurisdiction under part II of the Federal Power Act must submit an application or be a party to an application submitted by another entity. The application shall include information the applicant deems relevant to DOE’s determination under section 202(e) in the Federal Power Act. DOE has a strong policy in favor of approving applications, and doing so quickly and expeditiously.”[12]
In the Final Rule, DOE states that because the authority for presidential permits for cross-border transmission facilities “rests in Executive Order, it is at the discretion of the Executive branch as to how the order is applied.”[13] Accordingly, DOE states, it is rescinding the relevant regulations for the same reasons—namely, to reduce burdens, remove outdated requirements, bolster American energy dominance by reducing barriers to constructing cross-border facilities, and increase exports and foreign reliance on American energy.[14]
DOE seeks comment from interested parties on “all aspects” of both issuances, including on the prior rules’ “consistency with statutory authority and the Constitution [and] national security, whether the prior rules are out of date, the prior [rules’] costs and benefits, and the prior [rules’] effect[s] on small business, entrepreneurship and private enterprise.”[15]
While DOE regularly grants export authorizations, the streamlined application and authorization process, if adopted as proposed, would make obtaining such authorizations easier and less expensive and could provide sellers seeking broader market opportunities greater access to markets in Canada and Mexico. Moreover, elimination of the presidential permit requirement for cross-border transmission facilities, if finalized as proposed, will reduce the administrative burden on entities seeking to develop such facilities, further enhancing access to foreign markets. The energy regulatory team at Foley will continue to monitor developments in this area. Please feel free to contact us with any questions.
[1] Application for Authorization to Transmit Electric Energy to a Foreign Country, 90 Fed. Reg. _____ (unpublished version dated May 12, 2025) (to be codified at 10 C.F.R. pt. 205) (the “Proposed Rule”).
[2] Application for Presidential Permit Authorizing the Construction, Connection, Operation, and Maintenance of Facilities for Transmission of Electric Energy at International Boundaries, 90 Fed. Reg. _____ (unpublished version dated May 12, 2025) (to be codified at 10 C.F.R. pt. 205) (the “Final Rule”).
[3] According to DOE, “significant adverse comments” are those that “oppose the rule and raise, alone or in combination, a serious enough issue related to each of the independent grounds for the rule that a substantive response is required. If significant adverse comments are received, notice will be published in the Federal Register before the effective date either withdrawing the rule or issuing a new final rule which responds to significant adverse comments.” Final Rule at 1.
[4] U.S. Dept. of Energy, Energy Department Slashes 47 Burdensome and Costly Regulations, Delivering First Milestone in America’s Biggest Deregulatory Effort, https://www.energy.gov/articles/energy-department-slashes-47-burdensome-and-costly-regulations-delivering-first-milestone (May 12, 2025) (“DOE Press Release”).
[5] Id.
[6] Proposed Rule at 10.
[7] Final Rule at 2.
[8] 16 U.S.C. § 824a(e) (2018). This authority moved to DOE from the Federal Energy Regulatory Commission under Sections 301(b) and 402(f) of the DOE Organization Act, 42 U.S.C. §§ 7151(b) and 7172(f).
[9] 16 U.S.C. § 824a(e).
[10] Proposed Rule at 3.
[11] Id.
[12] Id. at 10.
[13] Final Rule at 3.
[14] Id.
[15] Proposed Rule at 3; Final Rule at 3.
New Executive Order and Proposed Legislation on Reporting Foreign Gifts and Contracts in Higher Education
On April 23, 2025, the Administration issued an Executive Order entitled “Transparency Regarding Foreign Influence at American Universities” along with an accompanying fact sheet. The Executive Order instructs the Secretary of Education to employ robust enforcement of Section 117 of the Higher Education Act of 1965, through both the reversal and rescindment of certain actions taken by the prior administration and through audits and investigations into institutions of higher education. Additionally, the Secretary of Education is tasked with ensuring timely and complete disclosures of foreign funding by institutions of higher education. The Executive Order represents a continuation of the Administration’s focus on higher education and, in particular, its focus on foreign influence, national security, and academic integrity.
The Executive Order does not change the relevant law—Section 117 of the Higher Education Act. Section 117 requires, among other things, that institutions of higher education receiving federal financial assistance report gifts received from, or contracts entered into with, foreign sources, where the value of those gifts or contracts, when considered alone or in combination with all other gifts from or contracts with the foreign source during a particular calendar year, is $250,000 or more. Additional disclosure requirements are imposed for restricted or conditional gifts or contracts. The ultimate penalty for failing to comply with Section 117 is that colleges and universities can lose their access to federal student aid dollars for their students.
The teeth of the Executive Order are in its third section, in which the Secretary of Education and heads of other agencies are instructed not to provide federal grant funds to institutions of higher education found to be non-compliant with the strictures of Section 117 and other applicable foreign funding disclosure requirements. However, Section 117 specifically enumerates its own methods of enforcement. The Attorney General, at the request of the Secretary of Education, may bring a civil action to request that a court compel the institution to comply with the requirements of Section 117. And where the institution knowingly or willfully does not comply with Section 117, it is required to pay to the Treasury of the United States the full costs of obtaining compliance, including those relating to investigation and/or enforcement. Nothing in the text of Section 117 allows the Secretary of Education, or another agency head, to suspend or eliminate federal funding.
In response to the Executive Order, the Secretary of Education, Linda McMahon, announced on April 25 that the U.S. Department of Education’s Office of General Counsel would re-assume enforcement of Section 117, replacing the Office of Federal Student Aid. In addition, the U.S. Department of Education initiated a Notice of Investigation and Records Request into the University of California, Berkeley’s compliance with Section 117. The investigation appears to stem from a 2023 media report that Berkeley failed to properly disclose hundreds of millions of dollars in funding from a foreign government. The Department of Education stated that “Berkeley’s responses revealed a fundamental misunderstanding” regarding its reporting obligations. The U.S. Department of Education has also initiated an investigation into Harvard University’s compliance with Section 117.
This Executive Order is not the only effort being taken by the federal government on foreign financial contributions to educational institutions. On March 27, 2025, the House of Representatives passed the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act (the “DETERRENT Act”) by a vote of 241-169, with bipartisan support. The DETERRENT Act would, among things, lower the present reporting trigger of Section 117 from $250,000 to $50,000. Additionally, the Act would require institutions of higher education to disclose gifts of any amount received from a foreign country or entity of concern, where foreign country of concern means, for present purposes, China, Russia, Iran, and North Korea. And the Act would prohibit institutions of higher education from entering into contracts with foreign countries or entities of concern, absent a waiver.
While it is unclear whether the Administration has the power to withhold federal funding from institutions that fail to comply with the reporting obligations of Section 117, the DETERRENT Act would allow for the imposition of substantial fines. Specifically, the DETERRENT Act calls for mandatory fines against institutions against whom a civil action has been brought and who have been compelled to comply with the requirements of Section 117. These fines vary depending on whether an institution is a first-time offender, the severity of the violation, and which provision has been violated. For instance, a first-time, knowing or willful violation of the newly-proposed Section 117—largely mirroring the current statutory framework—would result in a fine, the greater of $50,000 or the monetary value of the gift or contract that is the subject of the institution’s failure to comply. A first-time violation of the newly-proposed Section 117A—prohibiting institutions from entering into contracts with foreign countries or entities of concern without a waiver—would result in a fine in an amount that is not less than 5% and not more than 10% of the total amount of federal funds received by the institution under the Higher Education Act for the most recent fiscal year. These fines could amount to millions of dollars, a far cry from current penalties for non-compliance.
Institutions of higher education should keep apprised of the DETERRENT Act’s progress through the Senate and the Department of Education’s Section 117 investigations into Berkeley and Harvard.
United States and China Announce Temporary 115 Percent Reduction in Tariffs While Trade Discussions Continue
After negotiations over the weekend in Geneva, Switzerland, the United States and China reached a new trade deal on Monday, May 12, 2025, to temporarily slash tariffs on each country’s goods by 115 percent for the next 90 days. President Trump issued an executive order the same day reflecting this modification, reducing the 125% “reciprocal” tariff levied on Chinese imports on April 10, 2025, to ten percent. In turn, China will remove the retaliatory tariffs imposed on U.S. imports since April 4, 2025, but will retain a ten percent tariff. The revision to the “reciprocal” tariff will be effective on or after 12:01 a.m. Eastern Daylight Time on May 14, 2025, as the United States and China continue discussions on economic and trade relations.
All other duties imposed on China by the Trump Administration remain in effect, including:
Tariffs ranging from 7.5 to 25 percent imposed on certain categories of imports from China pursuant to Section 301 of the Tariff Act of 1974 (Section 301);
25 percent tariffs on imports of aluminum, steel and cars and car parts implemented pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232); and
20 percent tariffs on all imports from China imposed under the International Emergency Economic Powers Act (IEEPA) in response to the fentanyl national emergency.
The U.S. and China trade deal follows on the heels of a recent “Economic Prosperity Deal” reached between the United States and the United Kingdom last Thursday, May 8, 2025, which addressed, amongst other things, removal of barriers to make it easier for American and British businesses to operate, invest and trade in both countries. In particular, the United States agreed to exclude UK steel and aluminum from the Section 232 25% duties on imports of steel and aluminum and cut Section 232 tariffs on UK cars and car parts coming into the United States from 25% to 10% for the first 100,000 UK cars.
These trade deals work to address the Trump Administration’s concern over trade imbalances and to deliver, according to the White House, “real, lasting benefits to American workers, farmers and businesses.”
Compelling Rationale for Producing Proprietary Products in U.S. Found in USTR’s Special 301 Report on IP Protection and Enforcement Abroad (Part I)
While the current Trump Administration has based its global trade war on trade imbalances stemming from unfair trade practices of foreign countries, its weapon of choice—increased tariffs—is designed to encourage businesses to relocate manufacturing operations to the U.S., thereby boosting American employment and industrial capacity. The U.S. Trade Representative’s 2025 Special 301 Report, issued on April 29, provides an independent justification for onshoring or reshoring manufacturing, namely the failure of certain trading partners to adequately protect and enforce intellectual property (IP) rights of U.S. IP holders within their borders.
The Special 301 Report is an annual report that evaluates the adequacy and effectiveness of IP protection and enforcement among U.S. trading partners. USTR requested written submissions from the public through a notice published in the Federal Register on December 6, 2024. USTR later conducted a public hearing that provided the opportunity for interested persons to testify before the interagency Special 301 Subcommittee of the Trade Policy Staff Committee (TPSC) about issues relevant to the review. The hearing featured testimony from many witnesses, including representatives of foreign governments, industry, and non-governmental organizations.
USTR reviewed more than 100 trading partners for this year’s Special 301 Report and placed 26 of them on the Priority Watch List or Watch List. The countries on these watch lists are the “countries that have the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on relevant U.S. products.” In this year’s report, trading partners on the Priority Watch List present the most significant concerns regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection. Eight countries are on the Priority Watch List: Argentina, Chile, China, India, Indonesia, Mexico, Russia, and Venezuela. According to the report, these countries will be the subject of “particularly intense bilateral engagement during the coming year.” For those failing to address U.S. concerns, the report warns, “USTR will take appropriate actions, which may include enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organization (WTO) or other trade agreement dispute settlement procedures.”
The 2025 Special 301 report further notes that an important part of the mission of USTR is to support and implement the Administration’s commitment to protect American jobs and workers and to advance the economic interests of the United States. “Fostering innovation and creativity is essential to U.S. economic growth, competitiveness, and the estimated 63 million American jobs that directly or indirectly rely on intellectual property (IP)-intensive industries.” These include manufacturers, technology developers, apparel makers, software publishers, agricultural producers, and producers of creative and cultural works. “Together, these industries generate 41% of the U.S. gross domestic product (GDP). The 47.2 million workers that are directly employed in IP-intensive industries also enjoy pay that is, on average, 60% higher than workers in non-IP-intensive industries.”
According to the report, a common problem with those countries on the Priority Watch List is IP infringement:
IP infringement, including patent infringement, trademark counterfeiting, copyright piracy, and trade secret theft, causes significant financial losses for right holders and legitimate businesses. IP infringement can undermine U.S. competitive advantages in innovation and creativity, to the detriment of American workers and businesses. In its most pernicious forms, IP infringement endangers the public, including through exposure to health and safety risks from counterfeit products, such as semiconductors, automobile parts, apparel, footwear, toys, and medicines. In addition, trade in counterfeit and pirated products often fuels cross-border organized criminal networks, increases the vulnerability of workers to exploitative labor practices, and hinders sustainable economic development in many countries.
Inadequate and ineffective IP protection and enforcement is hardly a new complaint by the U.S. government regarding trading partners such as China—it is a chronic problem. Still, the USTR Special 301 Report should serve as a warning to U.S. IP holders that these IP threats are real and not going away, at least anytime soon. While sourcing innovative products from lower cost countries with less regulatory burdens supports short-term profitability objectives, it can come at a steep long-term cost as many companies have learned. The loss or diminution of IP rights due to substandard IP protection and enforcement regimes abroad can cause significant damage to enterprise value, including enabling competition by infringers to rise up. This constant threat in the new “America First” era in which higher tariffs are the norm, however, may cause IP-intensive businesses to rethink their sourcing strategy and decide to onshore or reshore the production of proprietary products or components. Though the U.S. IP laws are imperfect, they are still considered the gold standard by many, including the U.S. Chamber of Commerce, and thus provide a better support system for long-term protection and enforcement of IP and financial success.