Beneficial Changes to Tax-Advantaged ABLE Accounts for Individuals with Disabilities
Recently signed tax legislation includes several beneficial changes to Achieving a Better Life Experience (ABLE) accounts, a potentially useful and tax-efficient savings tool available through state-run programs for individuals with disabilities. We previously posted an overview of ABLE accounts. Below is a summary of four beneficial changes to ABLE accounts, which will become effective for the 2026 tax year:
Contribution Limit Inflation Adjustments: Each year an amount up to the annual per-donee gift tax exclusion may be contributed to an ABLE account, which is adjusted annually for inflation. The 2025 limit is $19,000. As a general rule, the gift tax exclusion is adjusted for inflation beginning in 1997 when the limit was $10,000, but for ABLE accounts the inflation adjustment uses a reference date of 1996, so the annual contribution limit is higher than what it would otherwise be under present law.
Higher Contribution Limit: Employed individuals who do not have contributions made to certain qualified retirement plans may contribute an additional amount to their ABLE accounts up to the lesser of the individual’s compensation for the tax year or the poverty line for a one-person household determined for the calendar year before the contribution year. The 2024 poverty line is $15,060 for residents of the 48 contiguous states and the District of Columbia, $18,810 for Alaska, and $17,310 for Hawaii. This provision was set to expire on December 31, 2025, but has now been made permanent with no sunset.
Saver’s Credit: An ABLE account holder may be eligible for a nonrefundable tax credit known as the Saver’s Credit for contributions made to an ABLE account from the 2018 tax year through the 2025 tax year. Credit eligibility has been made permanent for 2026 and future tax years with no sunset. The credit was up to 50 percent of the first $2,000 contributed—that is, up to a $1,000 tax credit—depending on an individual’s filing status and adjusted gross income during the applicable tax year. For 2026 and future tax years, the credit will increase to up to 50 percent of the first $2,100 contributed, for a maximum tax credit of $1050.
Rollovers from Qualified Tuition Programs: A temporary provision allowing nontaxable rollovers from qualified tuition programs to ABLE accounts has been made permanent with no sunset. To qualify, (i) the rollover must be completed within 60 days, (ii) the ABLE account beneficiary must be either the qualified tuition program beneficiary or a member of the ABLE account beneficiary’s family, and (iii) the rolled-over amount must not exceed the inflation-adjusted annual per-donee gift tax exclusion noted above when added to all other contributions to the ABLE account in the taxable year.
The State of Employment Law – More Than Half of States Protect Lactation Breaks
Over the past several years, both state and federal governments have enacted laws to protect nursing mothers’ rights to pump breast milk in the workplace. Under federal law, employers must provide nursing mothers break time to express breast milk and must provide a private space other than a restroom to do so. However, break time does not need to be paid.
Over half of all states, plus the District of Columbia, also have protections in place for nursing mothers. Arkansas, California, Colorado, Minnesota, Mississippi, New Hampshire, Oklahoma, South Carolina and Tennessee, for example, state that nursing mothers may pump during other regularly scheduled breaks. These state laws either specify that lactation breaks are unpaid or do not specify pay status, essentially leaving them unpaid.
A few states go further in their protections for nursing mothers. For example, Georgia and New York expressly provide paid lactation breaks. New York expressly provides additional time beyond existing breaks, as employees may take up to 30 minutes of paid break time each time they need to pump and may use existing break or meal time for lactation breaks that last longer than 30 minutes. Both Kentucky and Louisiana, while unpaid, provide that employees may take more frequent or longer breaks to pump than their regular break schedule allows. Illinois provides nursing mothers with more flexibility than many states, as lactation breaks need not run concurrently with existing break times.
Employers that have not already done so should consider investing in a dedicated lactation room that satisfies applicable law. To the extent a dedicated lactation room is prohibitively expensive for some employers, another private space with a lockable door that can serve part-time as a lactation room when needed will suffice. This space should be kept clean and may not be located in a restroom.
School May Prohibit “Let’s Go Brandon” Sweatshirt, Sixth Circuit Holds
Let’s Go Brandon” was the message on the sweatshirts two siblings wore to middle school. Everyone knows what that phrase means – including their teachers, so the school required the boys to change clothes. That left their mother unhappy; she sued the school for silencing her kids.
This week, a divided Sixth Circuit panel sided with the school. Judge Nalbandian had the majority opinion, which Judge Moore joined, and Judge Bush dissented. This decision marks an important contribution to the student-speech cases, at a time when like cases continue to arise.
Beginning with Tinker—the famous case of students wearing armbands to protest the Vietnam War—the court explained that students’ at-school speech rights are not equal to their extracurricular rights. For example, under Fraser, public schools can punish vulgarity to advance their pedagogical missions in ways that police officers in public cannot. The court asked first whether “Let’s Go Brandon” qualifies as “vulgar” and, second, whether schools may silence vulgar political speech.
All agreed that students have no right to use or display the F-word at school, but “Let’s Go Brandon” is not itself vulgar. Rather, the phrase is a euphemism standing in for a foul word. The majority decided that “a school may regulate speech that conveys an obscene or vulgar message even when the words used are not themselves obscene or vulgar.” The message, not the words, inform the inquiry – plus a dose of judicial “deference” to school administrators’ judgment. The euphemism, then, was vulgar enough to restrict.
But was it too political to restrict? After all, political discourse is the Free Speech Clause’s core concern. No, the majority answered, because the “vulgarity trumps the political aspect of speech at school.” And with that, the court concluded the school reasonably exercised its power to “categorically prohibit” vulgar speech.
Judge Bush disagreed: “The liberty to criticize the president is not a freedom that stops at the schoolhouse door.” “Let’s Go Brandon,” Judge Bush reasoned, is non-vulgar, “purely political speech,” a “cheekily expressed criticism” of the then-sitting president. Judge Bush characteristically reasoned from history, highlighting vignettes from the past such as President John Adams’ mocking nickname, “His Rotundity.”
It followed that the Tinker standard should apply, not Fraser’s vulgarity exception to that standard. And Tinker requires the school to show disruption to limit speech, a condition absent from this case. The majority and dissent squabbled over a doctrinal point of real-world import. If Fraser’s vulgarity exception erases Tinker’s disruption requirement, then “who decides” what’s vulgar? To the majority, deference to administrators is in order, provided they act in good-faith (i.e., viewpoint neutral); but in Judge Bush’s dissenting view, discretion tempts censorship, so political speech traditions require “exceptions to Tinker [to] be construed narrowly and applied cautiously.”
Bright-line principles elide difficult First Amendment cases like this. And Judge Bush highlighted intra- and inter-circuit tension in the precedents. These points raise the specter of en banc or Supreme Court review. But for now, the panel-majority’s word is last: vulgarity turns on message, not the words that convey it, and school officials, not courts, decide what’s vulgar. At Tri County Middle School in Howard City, Michigan, the meme phrase “Let’s Go Brandon” crosses the line.
NYC Council Approves Bills to Require Employer Pay Data Reporting
The New York City Council passed a pair of bills which, if enacted, would require large employers to report pay data by employee race and gender. The requirements would take effect immediately though, as described below, employers would not be required to submit information until the City creates the process for doing so.
The first bill (Int. 982A) requires that an agency be designated within one year of the law taking effect, at which point the designated agency would have one year to develop a standardized fillable form for covered employers to submit pay reports.
Within one year of the designated agency publishing the standardized form, and annually thereafter, employers with 200 or more employees (including full-time, part-time and temporary employees) would be required to submit to the designated agency a pay report that includes current information corresponding with the categories of information required by the Equal Employment Opportunity Commission in the EEO-1 component 2 reporting requirements for reporting years 2017 and 2018 – i.e., race, ethnicity and gender. However, the designated agency would be authorized to adopt modifications, including but not limited to inclusion of reporting options accounting for different gender identities.
In addition to submitting the pay report, covered employers would be required to separately submit to the designated agency a signed statement confirming the submission and accuracy of the pay report. While employers would have an option to submit the pay report anonymously, the signed statement must identity the employer.
The designated agency would publish annually on its website a list of covered employers that are not in compliance with the law, provided that employers would first receive notice of their noncompliance and be provided at least 30 days to comply. Violations of the law would subject employers to civil penalties, as follows:
For the first offense, a covered employer will be subject to a written warning if the employer provides, within 30 days of the service of summons, documentation indicating that such violation has been cured. If the employer fails to provide such documentation, they will be subject to a civil penalty of $1,000; and
For any subsequent offense, a covered employer will be subject to a civil penalty of $5,000.
Within one year after covered employers submit their pay reports, and annually thereafter, the second bill (Int. 984A) would require that the designated agency conduct a pay equity study and publish the data contained in the reports in the aggregate, and in a manner that does not reveal a covered employers’ or employee’s identifying information. The designated agency also would publish annually on its website a list of covered employers that fail to comply.
The bills passed with more than 80% support from the Council, enough to override a potential veto by Mayor Eric Adams. We will continue to track this potential new law and report on further developments.
Senate Restores EEOC Quorum and Appoints New Wage and Hour Division Leader
On October 7, 2025, the Senate approved two key employment agency nominations, confirming Brittany Panuccio to the U.S. Equal Employment Opportunity Commission (“EEOC”) and Andrew Rogers to lead the Wage and Hour Division within the U.S. Department of Labor (“DOL”).
Panuccio’s appointment restores a Republican majority at the EEOC, while Rogers’s confirmation returns a former DOL senior adviser to lead the Wage and Hour Division.
EEOC: Restoration of Quorum and Decision-Making Authority
Panuccio’s confirmation restores the EEOC’s decision-making authority after months without a quorum and gives Republicans a 2–1 majority on the EEOC. The agency is now composed of Acting Chair Andrea Lucas and Brittany Panuccio, both Republicans, and Commissioner Kalpana Kotagal, a Democrat appointed by former President Biden.
The EEOC had been operating without a quorum since January, when President Trump dismissed its two Democratic commissioners. During that time, the EEOC continued processing charges and issuing informal guidance, but it lacked the authority to vote on formal rulemaking, adopt or rescind published guidance, or authorize litigation that departs from circuit precedent or the EEOC’s prior positions. With the quorum restored, the EEOC can again take formal votes on those matters, allowing it to resume conducting rulemaking, issuing or withdrawing of formal guidance, and authorizing significant litigation.
Department of Labor: New Leadership at the Wage and Hour Division
Andrew Rogers, who since October 2020 has been serving as acting general counsel at the EEOC, has been confirmed by the Senate to lead the DOL’s Wage and Hour Division (“WHD”). During the first Trump administration, Rogers served as a senior adviser at the WHD.
During his confirmation hearing before the Senate Committee on Health, Education, Labor and Pensions, Rogers stated that the WHD must both provide clear guidance to help employers comply with the law and rigorously enforce it when violations occur. He noted that while most employers make good-faith efforts to comply with wage and hour requirements, the agency has a responsibility to hold accountable those who do not and to ensure that workers receive the wages they have earned.
Rogers also highlighted ongoing efforts at the DOL to address unlawful child labor. He further affirmed his commitment to enforcing the Davis-Bacon Act, which requires contractors and subcontractors on federally funded or assisted construction projects to pay workers no less than locally prevailing wages and benefits for similar work in the area.
Takeaways As noted above, with the EEOC’s quorum restored, the agency will have the authority to resume rulemaking, issue or withdraw formal guidance, and authorize certain litigation. At the DOL, employers should expect continued enforcement attention on wage payment practices and child labor compliance under new leadership at the WHD. We will continue to monitor developments from these agencies.
Massachusetts Issues Guidance to Educational Institutions on Title VI and Massachusetts Law
Massachusetts institutions of higher education (“IHEs”) should note that on September 23, 2025, the Massachusetts Attorney General’s Office and the Executive Office of Education released joint guidance clarifying legal protections for students and staff in educational settings (the “Massachusetts guidance”). Issued in response to evolving court precedent and federal guidance around diversity, equity, inclusion, and accessibility, the Massachusetts guidance aims to clarify the current state of the law. Notably, the guidance differs from recent Title VI guidance from the federal government, stating that those communications “misconstrue case law, misinterpret federal statutes and Supreme Court precedent, and wrongly imply that it might be unlawful for schools to consider the impact of policies, practices, and programming on diversity, equity, inclusion, and accessibility.”
IHEs should remember that both federal and Massachusetts guidance are advisory—they provide recommendations, not binding rules. Public and private IHE’s in Massachusetts should review the Massachusetts guidance in comparison with Title VI guidance from the federal government, including the July 30, 2025 memo from the Department of Justice (the “DOJ memo”), which is the subject of this prior client alert. Working with legal counsel, institutions should assess risks, including potential compliance actions such as funding freezes or grant terminations, that may arise from various policies and practices.
This alert summarizes the Massachusetts guidance as it applies to IHE policies and practices, flags key areas of disagreement with the DOJ memo, and serves as a practical resource as institutions navigate changes in federal and state oversight.
1. Nondiscrimination laws and DEI
The Massachusetts guidance reaffirms that IHEs must comply with federal non-discrimination laws such as Title VI (race, color, national origin) and Title IX (sex), as well as state laws prohibiting discrimination based on race, sex, religion, gender identity, sexual orientation, disability, and national origin. The Massachusetts guidance states inclusive practices and programming “confer important educational and social benefits for all students” and are “essential to promoting fair treatment and eliminating stigmatization.”
Citing “[l]ongstanding legal precedent” the Massachusetts guidance indicates that IHE’s may “foster diversity across numerous dimensions, including geography, socioeconomic status, race, sex, sexual orientation, and gender identity, among others” and provides “legally complaint ways that educational institutions can continue to meaningfully and successfully achieve the worthy goal of diverse and equitable student bodies[.]” Note that this view of diversity differs from with the DOJ memo, which identifies “demographic-driven criteria,” including those targeting based on geographic area as potentially illegal “proxies” for racial discrimination.
2. Impact of SFFA
Both the Massachusetts guidance and the DOJ memo specifically address the Supreme Court’s decision in Students for Fair Admission, Inc. vs. Presidents and Fellows of Harvard College (SFFA),[1] prohibiting the consideration of an applicant’s race as a factor in collegiate admissions. The Massachusetts guidance states that SFFA “has no direct application to programs outside of higher education admissions,” but “may extend to a school’s provision of a concrete benefit or opportunity to a particular individual based on that individual’s race.” The Massachusetts guidance indicates that under SFFA, IHEs may still include diversity as part of their missions, and may use factors other than race, such as “cultural competencies, income level, first generation to attend college, neighborhood or community circumstances, disadvantages overcome, and the impact of an applicant’s particular experiences on their academic achievement and on the perspectives they would bring to the school environment.” As the Massachusetts guidance noted, this view has been upheld in a recent First Circuit decision as it applied to public secondary schools,[2] and is consistent with the text of SFFA which indicates that universities may consider characteristics other than race, including “an applicant’s discussion of how race has affected his or her life[.]” The Massachusetts guidance also indicates that institutions may recruit or target outreach in a way that aligns with their diversity goals, and may collect and evaluate data on race and ethnicity for purposes other than providing an advantage to an individual applicant based on race.
In contrast, the DOJ memo identifies “‘cultural competence requirements,’” and “‘overcoming obstacles’ narratives,” as well as geographic preferences as “potentially unlawful proxies” for race-based discrimination. The DOJ memo also indicates that any “intent to influence demographic representation risks violating federal law” and that institutions should focus “solely on nondiscrimination performance metrics” when evaluating applicants.
3. Identity-based programming
The Massachusetts guidance states that IHEs can include course offerings addressing race, sex, sexual orientation, gender identity, disability, religion, or related topics, and can sponsor student affinity groups that are “open to all students while also allowing students of particular backgrounds or common experiences to feel valued and heard.” The Massachusetts guidance indicates that “groups and spaces that focus on common experiences of particular groups do not inherently create a hostile environment” but that such groups or spaces “should be open and welcoming of students from any background.”
The Massachusetts guidance does not indicate that exclusive programs or spaces would be permissible – rather, it states that programming or facilities must be open to all, even if they are focused on particular groups. The DOJ memo, however, states that giving any facilities or programs that are “technically open to all” an “identity-based focus creates a perception of segregation and may foster a hostile environment.” The only exceptions in the DOJ memo for division based on identity are single-sex facilities designed to “protect privacy or safety.” including “restrooms, showers, locker rooms, or lodging.”
Next Steps for Institutions of Higher Education
Massachusetts IHEs should closely review their state’s guidance alongside federal guidance and requirements and consult with legal counsel to ensure compliance and manage risk. Institutions should also update policies, train staff on nondiscrimination obligations, and develop clear protocols for investigating and addressing complaints.
Footnotes
[1] 600 U.S. 181 (2023)
[2] Bos. Parent Coal. For Acad. Excellence Corp. v. Sch. Comm. For Bity of Bos., 89 F.4th 46 (1st Cir. 2023), cert. denied, 145 S. Ct. 15 (2024)
Massachusetts Court Expands the Temporal Scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act
The US District Court for the District of Massachusetts in Monteiro v. RAC Acceptance East, LLC issued an early federal interpretation of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which became law in March 2022.
In Monteiro, the court held that the EFAA can render pre-dispute arbitration agreements and class or collective action waivers unenforceable in sexual assault and sexual harassment cases even where much of the alleged misconduct occurred before the EFAA became law, so long as the dispute or claim “arises or accrues” on or after that date. Although the statute is not retroactive by its terms, the court’s application gives it practical retroactive effect in many employment cases.
What Is the EFAA?
The EFAA, a response to the #MeToo movement, amended the Federal Arbitration Act (FAA) to prohibit the use of pre-dispute arbitration agreements and class or collective action waivers in disputes related to sexual assault and sexual harassment. By its terms, the statute applies to “any dispute or claim that arises or accrues on or after [March 3, 2022].”[1] In other words, if an employee signed a pre-dispute agreement requiring arbitration or waiving joint or class proceedings, that agreement will be void and unenforceable for sexual assault or sexual harassment claims after March 3, 2022.
Case Background
The plaintiff in Monteiro, a former assistant sales manager at a rent-to-own retailer, alleged that a co-worker subjected her to repeated inappropriate and sexually suggestive remarks, physical contact, and explicit messages over the course of her employment. While many of the alleged incidents occurred prior to March 3, 2022, at least one incident and the plaintiff’s subsequent termination occurred after the EFAA’s enactment.
After reporting the harassment to management and subsequently being terminated, the plaintiff filed suit in state court alleging sexual harassment, sex discrimination, and retaliation. However, because the plaintiff had signed a mutual agreement to arbitrate claims as part of her onboarding process, the defendants removed the case to federal court and moved to compel arbitration pursuant to the pre-dispute arbitration agreement.
Court’s Analysis
Judge Indira Talwani denied the motion to compel arbitration, finding that the EFAA applied to the plaintiff’s claims. The court emphasized that under the EFAA, claims of sexual harassment or sexual assault that accrue on or after March 3, 2022, are not subject to mandatory arbitration, even if some alleged misconduct occurred prior to that date.
Applying the “continuing violation” doctrine, the court determined that the plaintiff’s hostile work environment claim fell under the protections of the EFAA because at least one act contributing to the claim occurred after the statute’s effective date. The court further noted that the retaliation claim, based on the plaintiff’s termination, constituted a discrete act that accrued after March 3, 2022, and was therefore also subject to the EFAA.
The court rejected the defendants’ argument that the “primary allegations” of harassment predated the EFAA, holding that hostile work environment claims may span a series of acts over time, and the statute of limitations resets with each new act of harassment. As a result, the arbitration agreement was deemed invalid and unenforceable at the plaintiff’s election.
Why Monteiro Matters
Before the EFAA, employers routinely compelled arbitration of sexual harassment claims, rendering the allegations and proceedings confidential. Monteiro underscores that the EFAA’s protections turn on when a claim “arises or accrues,” not when the alleged underlying conduct occurred. Therefore, Judge Talwani’s decision substantially narrows the circumstances in which employers can rely on pre-EFAA arbitration agreements for sexual harassment disputes.
Takeaways and Next Steps
Arbitration agreements may be valuable risk-management tools, but employers should take special care to ensure these agreements are enforceable and aligned with the EFAA. Employers should review their arbitration clauses, update acknowledgment forms and dispute resolution policies to reflect the EFAA carve-out, and ensure internal training, reporting, and investigation protocols are robust to mitigate exposure.
[1] 9 U.S.C. §§ 401- 402.
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Prove It: Department of Transportation’s DBE Program Ceases Presumption of Disadvantaged Status for Women- and Minority-Owned Businesses
The U.S. Department of Transportation (DOT) issued an Interim Final Rule (IFR) effective October 3, 2025, instituting an immediate and significant change for the qualification of women- and minority-owned businesses in the DOT’s Disadvantaged Business Enterprise (DBE) and Airport Concessions Disadvantaged Business Enterprise (ACDBE) Program. For purposes of the DBE/ACDBE program, women- and minority-owned businesses were historically presumed to be disadvantaged, automatically meeting one of the requirements for DBE status; this is no longer the case.
What is the DBE/ACDBE program? The purpose of this longstanding program is to level the playing field for small businesses in the highway construction, transit, and airport industries, owned by socially and economically disadvantaged individuals, seeking to participate in federally funded contracts. Congress enacted the first statutory DBE provision in 1983, setting a goal that at least 10% of project funds be issued to DBEs on highway and transit projects. In 1987, Congress expanded the program for airport projects and concessionaries. This legislatively-mandated program was intended to ensure nondiscrimination and remove barriers in the award of DOT-assisted contracts, and thus the DOT was entrusted with oversight of the program.
Specifically, the program requires state and local transportation agencies that receive DOT grants to develop their own aspirational DBE contracting goals based on the availability of DBEs in their local markets, to meet the program targets. Notably, grantees are generally prohibited from using quotas or set-aside contracts for DBEs. (49 CFR § 26.43). They have been required to use race- and gender-neutral means to meet their goals to the extent possible, without using criteria favoring DBEs over non-DBEs (49 CFR §§ 26.5, 26.51). Examples of such neutral means are unbundling of large contracts, informational programs on contracting opportunities, and offering business support services. Eligibility for DOT financial assistance depends on DOT approval of grantee DBE programs; however, as long as the program is administered in good faith, grantees cannot be penalized for noncompliance or failure to meet their set DBE contracting goals. (49 CFR §§ 26.21(c), 26.47).
To qualify as a DBE, an entity must be a for-profit small business that is at least 51% owned and controlled by socially and economically disadvantaged individuals who do not exceed certain net worth caps. To qualify as socially and economically disadvantaged, the owners must either demonstrate disadvantage by meeting specific conditions or be presumed disadvantaged. Since 1987, the DOT has presumed social and economic disadvantage for women- and minority-owned business owners. As of October 3, 2025, however, this presumption ceased; henceforth, these business owners must “prove it.”
What happens now? To remain in the program, all DBE/ACDBE certified businesses owners must be reevaluated for disadvantaged status. The IFR changes the definition of a “socially and economically disadvantaged individual,” to one “who a certifier finds to be socially and economically disadvantaged on a case-by-case basis. [This] determination … must not be based in whole or in part on race or sex.”
Business owners must submit both a Personal Narrative (PN) and a Personal Net Worth Statement to demonstrate eligibility. The PN should demonstrate the existence of a disadvantage based on individual proof of specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business. The PN must state how and to what extent these impediments caused the owner economic harm, including a description of the type and magnitude, and must establish the owner is economically disadvantaged relative to similarly situated individuals. The business owner must also attach and submit a Personal Net Worth Statement, and any other financial information they consider relevant.
Those submitting commercial and financial business information normally considered proprietary or confidential are cautioned to designate those submissions as “PROPIN.” If one fails to mark the confidential business information as “PROPIN,” under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, the information is placed in the public docket for rulemaking purposes. To avoid public dissemination of confidential businesses information, entities should make sure that employees tasked with the submission of this documentation understand the need for designation.
The existing regulations require states to establish Unified Certification Programs (UCP) to handle state-wide DBE-firm certification, including making certification decisions on behalf of all DOT grant recipients in the state and maintaining a state directory of certified DBE firms. Now, each UCP is required to identify currently certified DBEs, provide them with the opportunity and instructions to submit documentation demonstrating eligibility under the new standards, and then issue a written decision indicating whether each business has been recertified or is decertified “as quickly as practicable.” The IFR does not require the UCP’s written decision to explain the specific basis for recertification or decertification. Individual UCPs are expected to create their own timelines for firm submissions of new PNs and Personal Net Worth Statements, but the DOT has expressly reserved the right to review a UCP’s reevaluation process.
Until the UCP reevaluations are complete, goal setting and other DBE/ACDBE program elements are suspended. The current federal government shutdown of indeterminate duration will likely further slow the reevaluation process.
What prompted this IFR? On February 24, 2025, President Trump issued Executive Order 14219, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative, which ordered agencies to identify “unconstitutional regulations and regulations that raise serious constitutional difficulties” and to target them for repeal. On April 9, 2025, the President issued a presidential memorandum to the heads of all federal agencies, directing that this effort should prioritize regulations that conflict with certain U.S. Supreme Court decisions, including Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023), a landmark 2023 ruling that consideration of race in college admissions violates the Equal Protection Clause of the Fourteenth Amendment, essentially ending affirmative action.
In a pending case in the Eastern District of Kentucky, non-DBE entities who had lost bids on DOT-funded projects filed suit against the DOT, claiming that they cannot compete for DOT contracts on an equal footing with entities owned by women or racial minorities because of their presumptive qualification as DBEs. In September of 2024, the court granted a preliminary injunction, determining that the disadvantage presumption of the DBE program likely violates the Equal Protection Clause. Mid-America Milling Co. v. U.S. Dep’t of Transp., No. 3:23-cv-00072, 2024 WL 4267183 (Sept. 23, 2024). The preliminary injunction prohibits the DOT from mandating use of the presumptions with respect to the contracts on which the plaintiff entities had bid.
Shortly following the President’s February Executive Order and April memorandum, both the DOT and Department of Justice (DOJ) evaluated the DBE/ACDBE program as directed by the administration.
In May of 2025, the parties asked the court to enter a consent order resolving the constitutional challenge to the DBE program, where the DOT (represented by the DOJ in court) stipulated and agreed that the DBE program’s presumptions violate the Equal Protection Clause. The proposed consent order asks the court to declare the use of DBE contract goals to be unconstitutional nationwide and to hold that DOT cannot approve any DOT-funded projects with DBE contract goals where any DBE in the jurisdiction was determined eligible based on race- or sex-based presumptions. Notably, the consent order remains pending.
On June 25, 2025, Solicitor General D. John Sauer of the DOJ advised Speaker of the House Mike Johnson that DOJ concluded the DBE program’s race- and sex-based presumptions are unconstitutional, and that DOJ would no longer defend those presumptions in court—consistent with the proposed consent order in the pending Mid-America Milling case. Soon thereafter, on October 3, 2025, DOT issued the present IFR.
How can the DOT issue an immediately-effective rule like this IFR? The Administrative Procedures Act (APA), 5 U.S.C. §§ 551-559, mandates that federal administrative agencies follow certain procedural steps before enacting a rule. Typically, an agency must publish notice of the proposed rule in the Federal Register, citing its authority to make the rule and including the proposed terms. Then, the public must be given the opportunity to comment on the proposed rule. After considering comments and making any revisions to the rule based thereon, the agency must provide a general statement of the basis and purpose of the rule and generally must publish the final rule no less than 30 days prior to the effective date. However, an agency may skip the aforementioned procedure and issue a rule without the notice, comment, and minimum 30-day effectiveness delay if it finds good cause that the process is “impracticable, unnecessary or contrary to public interest.” 5 U.S.C. § 553(b)(B). Here, the DOT determined that the presumption of disadvantage under the DBE/ACDBE program is unconstitutional, so enforcing those presumptions would be contrary to public interest and providing an advance notice-and-comment period would be impracticable and unnecessary. While this IFR is effective immediately, the public can currently comment on the IFR for a 30-day period, and the DOT may amend the rule pursuant to submitted comments.
DOJ Launches New Civil Enforcement Branch with Implications for Regulated Industries
Key Takeaways
New DOJ Civil Division Branch Established: The Department of Justice (DOJ) announced last month the creation of a new office within the Civil Division focusing on matters under the consumer protection and public health statutes.
Two Sections, Distinct Missions: The Enforcement Section will pursue cases under consumer protection and public health statutes, while the Affirmative Litigation Section will bring suits against states, municipalities, and private actors that are alleged to have obstructed federal policies. The reorganization does not create new statutory powers but consolidates DOJ’s affirmative litigation functions.
Immediate Relevance for Regulated Industries: The Branch’s early priorities signal increased scrutiny in areas where health care, consumer product practices and federal funding intersect with political or policy-driven enforcement. Companies operating in these sectors should evaluate compliance protocols and be prepared for a more active civil enforcement environment.
The U.S. Department of Justice has created a new civil litigation office aimed at ramping up proactive enforcement, with early priorities that signal direct implications for health care, pharmaceutical and consumer-products companies. On September 25, 2025, the DOJ announced the creation of the Enforcement & Affirmative Litigation Branch, a new office within the Civil Division. While the new office’s scope is broad, its initial focus includes areas highly relevant to regulated industries — including health care providers, drug and device marketing, and consumer product labeling. The development reflects the DOJ’s continued use of civil enforcement as a policy tool and may foreshadow more litigation activity with both regulatory and constitutional dimensions.
As described in DOJ’s announcement, the Branch consists of two sections: the Enforcement Section — which will bring affirmative cases under statutes such as the Federal Food, Drug, and Cosmetic Act, Consumer Product Safety Act, and Federal Trade Commission Act — and the Affirmative Litigation Section, which will represent the United States in lawsuits against states, municipalities and private actors that allegedly obstruct or undermine the administration’s policies.
What This Means for Regulated Industries
This restructuring signals DOJ’s commitment to dedicate more resources to proactive civil enforcement, potentially leading to an uptick in high-impact litigation affecting public health, consumer protection, and federal policy implementation. The Branch’s creation also reflects the DOJ’s continuing use of civil enforcement as a policy tool to advance administration priorities — complementing criminal investigations and amplifying oversight across regulated sectors.
For companies in the health care, pharmaceutical, and consumer-products industries, this development stresses the importance of ensuring marketing, labeling, and promotional practices comply with existing federal standards. The Branch’s initial focus areas suggest increased scrutiny in these spaces, particularly where product communications intersect with public health or political attention. This focus also follows the administration’s broader expansion of False Claims Act (FCA) enforcement as it relates to gender-affirming care. The administration has signaled that such cases will be a priority area for civil enforcement, aligning with its early-established White House initiatives on protecting minors and regulating federally funded medical practices.
How Companies Can Prepare Now
As DOJ shifts resources toward affirmative civil enforcement, companies should take practical steps to stay ahead of potential risk. Here’s what organizations can do now:
Review existing marketing, labeling and promotional protocols for alignment with federal law
Monitor DOJ enforcement trends — particularly in politically sensitive or policy-adjacent areas
Reassess compliance infrastructure to ensure it’s responsive, well-documented and audit-ready
Consult counsel proactively when risk areas emerge
In this environment, it is critical for organizations to maintain robust compliance protocols, monitor evolving enforcement priorities, and consider proactive engagement with counsel if potential issues are identified.
OCR Reaches HIPAA Settlement with Cadia Healthcare Facilities Over Alleged HIPAA Privacy and Breach Notification Rule Violations
On September 30, 2025, the U.S. Department of Health and Human Services’ (“HHS”) Office for Civil Rights (“OCR”) announced a settlement with five affiliated health care providers collectively known as Cadia Healthcare Facilities (“Cadia”) for potential violations of the HIPAA Privacy and Breach Notification Rules.
The OCR investigation followed a complaint that Cadia had impermissibly disclosed a patient’s protected health information (“PHI”), including the individual’s name, photograph, and details about their treatment and recovery, by posting the information as part of a “success story” on its website.
The investigation confirmed that Cadia published the patient’s PHI without a valid, written HIPAA authorization and had similarly disclosed the PHI of approximately 150 patients through other “success story” posts. OCR determined that Cadia violated the Privacy Rule by impermissibly disclosing PHI and failing to implement adequate safeguards, and the Breach Notification Rule by not notifying affected individuals.
To resolve the matter, Cadia agreed to pay $182,000 and implement a two-year corrective action plan monitored by OCR. The plan requires the facilities to:
Review and update HIPAA policies and procedures.
Provide workforce training, including for marketing staff.
Notify all affected individuals whose PHI was posted online or in marketing materials without valid authorization.
This case demonstrates that OCR remains active in enforcing HIPAA requirements, including the Privacy, Security and Breach Notification Rules.
First Law in Country to Explicitly Include Menopause as Protected Condition
In a landmark move, Rhode Island has become the first state in the United States to mandate workplace accommodations for employees and applicants experiencing menopause and related medical conditions. The law became effective on June 24, 2025, amending the Rhode Island Fair Employment Practices Act, to explicitly include menopause as a protected condition. This requires employers to provide reasonable accommodations for menopause, joining pregnancy, childbirth, and related medical conditions.
What the Law Requires
The new law applies to employers with four or more employees, and requires such employers to engage in a timely, interactive process to identify reasonable accommodations for individuals experiencing menopause or related conditions, such as vasomotor symptoms, commonly referred to as hot flashes and night sweats. Under the law, employers are prohibited from: (1) denying employment opportunities based on the need for menopause-related accommodations; and (2) requiring employees to take leave if another reasonable accommodation can be provided.
While the law does not yet define specific accommodations for menopause, it builds on the existing framework for pregnancy-related accommodations, which may include flexible scheduling, modified work environments, or additional breaks.
Notice and Posting Obligations
Employers subject to this new law must update their workplace postings and written notices to reflect these new rights. Specifically, they are required to:
Post a notice in a conspicuous location accessible to employees;
Provide written notice to new hires at the start of employment;
Notify existing employees by October 22, 2025, by providing the notice referenced below; and
Provide notice within 10 days of an employee reporting menopause symptoms.
The Rhode Island Commission of Human Rights has posted the updated notice requirement on their website which can be accessed here.
Implications for Employers
For manufacturers, where physical demands and environmental conditions can exacerbate menopause symptoms, this law presents both a compliance obligation and an opportunity to lead on workplace inclusivity. In the wake of this new law, Rhode Island employers should review and revise their current accommodation policies and procedures. They should also prepare to engage in individualized assessments of accommodation requests, particularly in roles involving heat exposure, shift work, or physically strenuous tasks.
This legislation reflects a growing recognition that menopause is not merely a personal health issue but a workplace equity issue. Other legislatures around the country are considering similar laws so there may be a flurry of similar state laws. Employers should review their current policies and procedures to ensure that they are in compliance with this new law.
This post was co-authored by Labor + Employment Group lawyer Bryce Simmons.
MAGA Civil War: Marjorie Taylor Greene Turns on Trump Over Immigration Crackdown
MAGA Civil War: Marjorie Taylor Greene Turns on Trump Over Immigration Crackdown A Shocking Rift Inside MAGA In a stunning break from the man who helped make her a national figure, Representative Marjorie Taylor Greene has turned on Donald Trump’s immigration policy, calling his aggressive ICE raids “unsustainable” and “disconnected from economic reality.” Speaking on […]