Election Law / Legislative News

New York Legislature’s Proposed Amendments Would Impact Employment Agreements

Two bills recently introduced in New York’s legislature could have a major impact on New York employers seeking to enter into employment-related agreements with employees.
Invalidating “Unconscionable” Contract Terms
On January 8, 2025, Assembly Bill No. 636 was introduced to amend the New York General Business Law (GBL). If passed, the bill would add a new section to the GBL that would invalidate certain terms in standard form contacts regarding dispute resolution on the grounds that such terms are substantively unconscionable. A “standard form contract” is defined in the bill as “any contract to which only one of the parties is an individual and that individual does not draft the contract.”
The bill outlines a rebuttable presumption that the following terms are substantively unconscionable, and therefore impermissible, when included in a standard form contract:

A requirement for the parties to resolve legal claims in an “inconvenient venue;”

For state claims, an “inconvenient venue” is defined as “a place other than the county where the individual resides or the contract was consummated;” and
For federal claims, an “inconvenient venue” is defined as “a place other than the federal judicial district where the individual resides or the contract was consummated.”

A waiver of an employee’s right to assert claims or seek remedies under state or federal law;
A waiver to seek punitive damages;
A requirement to bring an action prior to the expiration of the applicable statute of limitations; and
A requirement that an employee pay fees and costs to bring a legal claim that substantially exceeds the fees and costs to initiate a state or federal court action.

The bill states that these unconscionable terms “discourage valid claims” and further describes them as “unfair to the party that is forced to agree to these terms.” The bill also provides that standard form contracts must advise an individual of their right to consult with an attorney concerning the legal document, and give a reasonable time in which to review the contract with such attorney.
Under the bill, aggrieved employees would have a private right of action where they could seek statutory damages of $1,000 per violation. Additionally, an employer’s violation would be considered an “unfair and deceptive trade practice” that may be prosecuted by the Office of the New York State Attorney General.
If passed, the bill would take effect on the first of January next succeeding the date in which it becomes a law, and will apply to contracts entered into after such date. On February 14, 2025, an identical Senate Bill was also introduced.
Invalidating Waiver of Employment Rights
On February 4, 2025, Senate Bill No. 4424 was introduced that would amend the New York Labor Law (NYLL) and the New York State Human Rights Law (NYSHRL). If passed, the bill would add new sections to both laws and invalidate contractual provisions waiving or limiting “any employee’s substantive or procedural rights, remedies, or claim.”
Notably, the bill carves out significant exceptions for waivers mutually agreed to and included in “the settlement of any good faith bona fide dispute in which an employee raises a claim against their employer” or “an agreement entered upon or following the termination of an employee’s employment.” The bill clarifies that the provisions of this subdivision shall not apply where application of such provisions “would be preempted by federal law.”
If passed, the bill would take effect immediately. On February 13, 2025, an identical Assembly Bill was also introduced.
What Do Employers Need to Know?
These bills have not been signed into law, so employers are currently under no new obligations when entering into employment-related agreements with employees. However, the introduction of these bills signals an interest in the New York State Legislature to restrict certain terms in employment-related agreements.
Employers should keep an eye on these bills moving forward, and should review their employment agreements to ensure compliance if these bills are ultimately enacted.

Federal Judge Clarifies Scope of Preliminary Injunction Enjoining President Trump’s DEI-Related Executive Orders

On March 10, 2025, a federal judge in Maryland clarified the scope of the nationwide preliminary injunction that enjoins key portions of two of President Donald Trump’s diversity, equity, and inclusion (DEI)–related executive orders (EOs), stating that the injunction applies to all federal agencies.

Quick Hits

On February 21, 2025, a federal judge granted a nationwide preliminary injunction that enjoined key provisions of President Trump’s executive orders aimed at “illegal” DEI initiatives.
On March 3, 2025, the judge refused to halt the preliminary injunction, pending the government’s appeal to the Fourth Circuit Court of Appeals.
On March 10, 2025, the judge clarified that the preliminary injunction applies to all federal executive branch agencies, departments, and commissions, not just those that were specifically named in the complaint.

U.S. District Judge Adam B. Abelson clarified that the nationwide preliminary injunction enjoining the termination, certification, and enforcement provisions of EO 14151 and EO 14173 “applies to and binds Defendants other than the President, as well as all other federal executive branch agencies, departments, and commissions, and their heads, officers, agents, and subdivisions directed pursuant to” those executive orders.
The court’s February 21, 2025, preliminary injunction order defined the “Enjoined Parties” as “Defendants other than the President, and other persons who are in active concert or participation with Defendants.” The plaintiffs filed a motion to clarify the scope of the order. The government argued that the court lacked jurisdiction to rule on the motion, and that only the specific departments, agencies, and commissions named as additional defendants in the complaint were bound by the preliminary injunction. The complaint named the following defendants: the Office of Management and Budget, the U.S. Departments of Justice, Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, and Transportation, along with the heads of those agencies (in their official capacities), the National Science Foundation, and President Trump in his official capacity. The government argued that including other departments, agencies, and commissions as enjoined parties would be inconsistent with Federal Rule of Civil Procedure 65(d), Article III of the U.S. Constitution’s standing requirement, and traditional principles of equity and preliminary injunctive relief.
The court disagreed. First, according to the court, the plaintiffs have shown a likelihood of success on the merits that the termination, certification, and enforcement provisions are unconstitutional, so any agencies acting pursuant to those provisions “would be acting pursuant to an order that Plaintiffs have shown a strong likelihood of success in establishing is unconstitutional on its face.”
Second, the termination and certification provisions were directed to all agencies, the enforcement provision was directed to the U.S. Department of Justice, and the president was named as a defendant in the complaint; thus, the preliminary injunction (in both its original and clarified forms) “is tailored to the executive branch agencies, departments and commissions that were directed, and have acted or may act, pursuant to the President’s directives in the Challenged Provisions of” EO 14151 and EO 14173.
Third, only enjoining those agencies that were specifically named in the complaint, despite the fact that the president was named as a defendant, would provide incomplete relief to the plaintiffs because their speech is at risk of being chilled by non-named agencies as well. In addition, the court held that “[a]rtificially limiting the preliminary injunction in the way Defendants propose also would make the termination status of a federal grant, or the requirement to certify compliance by a federal contractor, turn on which federal executive agency the grantee or contractor relies on for current or future federal funding—even though the agencies would be acting pursuant to the exact same Challenged Provisions,” resulting in “‘inequitable treatment.’” Thus, the court granted the plaintiffs’ motion to clarify that the preliminary injunction applies to every agency in the executive branch.

The North Carolina General Assembly’s 2025 Session: Employment-Related Bills to Watch

The 2025 session of the North Carolina General Assembly is in full swing. Here is a list of proposed legislation that employers should pay attention to.

Quick Hits

The 2025 session of the North Carolina General Assembly is considering employment-related bills related to union organizing and collective bargaining, nondiscrimination in the workplace, noncompete and nonpoaching agreements, and DEI.
Senate Bill 120 / House Bill 207 aim to prohibit employers from restricting labor organizations and requiring employees to refrain from union membership as a condition of employment.
Senate Bill 154 / House Bill 168 seek to prevent hair-based discrimination in workplaces, schools, and public spaces by expanding the definition of race-based discrimination to include traits historically associated with race, such as natural hairstyles.
House Bill 269 would ban noncompete and nonpoaching agreements for employees earning less than $75,000 a year, effective July 1, 2025.

Remove Barriers to Labor Organizing (Senate Bill 120 and House Bill 207)
Senate Bill (SB) 120 and House Bill (HB) 207, short-titled, “Remove Barriers to Labor Organizing,” was referred to the North Carolina House of Representatives’ Rules, Calendar, and Operations of the House Committee and the North Carolina Senate’s Rules and Operations of the Senate Committee in late February. The legislation would prohibit employers from restricting labor organizations and associations from organizing within the state. This prohibition would restrict employers from requiring employees to refrain from union membership as a condition of employment or continued employment.
North Carolina CROWN Act (Senate Bill 154 and House Bill 168)
The North Carolina CROWN Act legislationwas reintroduced this session and echoes the bipartisan federal “Creating a Respectful and Open World for Natural Hair Act,” or “CROWN Act,” bill introduced in February 2025 by Senators Cory Booker (D-NJ) and Susan Collins (R-ME). The North Carolina CROWN Actwould protect individuals in the state from hair-based discrimination and retaliation in workplaces, schools, and public spaces. That includes preventing employers from enacting or enforcing policies on hair and grooming that would disproportionately affect people with “natural” or “cultural” hairstyles, including Bantu knots, braids, locks, and twists. It would also expand the definition of race-based discrimination to include “traits historically associated with race, including but not limited to, hair texture, hair type, and protective styles.” More than half of the states have enacted CROWN Act bills.
Equality in State Agencies/Prohibition on DEI (House Bill 171)
HB 171, short-titled, “Equality in State Agencies/Prohibition on DEI,” would apply to state employers and would prohibit any state agency from “promoting, supporting, funding, implementing, or maintaining workplace DEI programs, policies, or initiatives,” including in state government hiring and employment. The bill would eliminate all dedicated diversity, equity, and inclusion (DEI) staff positions and offices and end all DEI-related training. It would also prohibit any state agency or unit of local government from using public funds for DEI initiatives, including federal funds. All state agencies and local governmental units would be required to create annual public posts detailing their compliance. Further, the bill would make it a crime to act in any way deemed contrary to promote or support DEI in state and local government.
Workforce Freedom and Protection Act (House Bill 269)
HB 269, named the “Workforce Freedom and Protection Act,” was introduced in the House in March and would prohibit noncompete and nonpoaching agreements in the state. The prohibition against noncompete agreements would apply to employees making less than $75,000 a year and would disallow any agreements restricting the employee’s right to work for another employer for any period of time, work in a specific geographic area, or from engaging in work activities performed for the employer. These restrictions would be in effect as of July 1, 2025, and would ban employers from entering into noncompete agreements as of that date. The bill would also prohibit “non-poaching” agreements, which are agreements between employers that restricts one employer from soliciting, recruiting, or hiring employees from the other employer, or in any way prevents companies from competing against each other for employees.
Allow Public Employee Collective Bargaining (House Bill 256)
HB 256, introduced in the House in February, is the second bill introduced in this session to encourage union activity and collective bargaining. Currently, public employees are prohibited from collective bargaining, but this bill would repeal that law, paving the way for North Carolina government employees to engage in union activity.
Reduce Barriers to State Employment (Senate Bill 124 and House Bill 177)
Another pair of bills, SB 124 and HB 177, specifically directed at state employers, seeks to make state employment opportunities more accessible to individuals without four-year college degrees. Titled “An Act to Reduce Barriers to State Employment,” the legislation would direct the North Carolina State Human Resources Commission to assess the educational and experiential requirements for state positions and identify certain positions to remove the four-year college degree requirement, leaning toward other requirements including military service, apprenticeships, and trade schools where appropriate.

The Uncertainty Of Officer Appointments In California LLCs

The California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq., clearly authorizes the appointment of officers:
A written operating agreement may provide for the appointment of officers, including, but not limited to, a chairperson or a president, or both a chairperson and a president, a secretary, a chief financial officer, and any other officers with the titles, powers, and duties as shall be specified in the articles of organization or operating agreement or as determined by the managers or members. An officer may, but does not need to, be a member or manager of the limited liability company, and any number of offices may be held by the same person.

Cal. Corp. Code § 17704.07(u). The CARULLCA even makes provision for the method of the appointment of officers:
Officers, if any, shall be appointed in accordance with the written operating agreement or, if no such provision is made in the operating agreement, any officers shall be appointed by the managers and shall serve at the pleasure of the managers, subject to the rights, if any, of an officer under any contract of employment.

Cal. Corp. Code § 17704.07(v). The use of the plural “managers” suggests that an individual manager does not have the authority. But if an individual manager lacks the authority, what vote is required? The statute is conspicuously silent on this question. Notably, the statute does not use the defined term “majority of the managers”, which unless otherwise provided in the operating agreement, means more than 50% of the managers of the limited liability company. Cal. Corp. Code § 17701.02(l).
These questions can be easily avoided, by answering them in the operating agreement.

New York Health Data Requirements Potentially Ahead: Understanding the Newly Passed Health Information Privacy Act

New York lawmakers recently passed a wide-ranging health information privacy bill that would require entities to obtain consent to collect, use, or sell an individual’s health information except for designated purposes. Notably, the bill broadly defines both regulated entities and regulated health information, and it would potentially impact companies nationwide that may not otherwise consider themselves to be collecting individuals’ private health information.

Quick Hits

New York lawmakers passed a health information privacy bill that, among other obligations, would require entities to obtain authorization to collect, use, or sell an individual’s health information unless it is “strictly necessary” for certain purposes.
The bill broadly defines regulated health information to include data that goes beyond traditional protected health information (PHI) and broadly defines regulated entities to include New York entities and certain non-New York entities.
While there is no private right of action, the bill would empower the state attorney general to seek significant penalties for violations.
The governor must still sign the bill and it would take effect one year after becoming law.

On January 22, 2025, the New York State Legislature passed Senate Bill (S) 929, known as the New York Health Information Privacy Act (New York HIPA). The bill has not yet been sent to Governor Kathy Hochul’s desk for signature. If signed, New York HIPA would take effect one year after becoming law.
In general, New York HIPA would place strict requirements on the collection or “processing” of individual health information or “any information that is reasonably linkable” to an individual’s mental or physical health. It would require authorization to process regulated health information unless it is “strictly necessary” for a specific designated purpose. The bill would further give individuals a right to access and request deletion of their health information and require regulated entities to develop and maintain safeguards to protect health data.
New York HIPA is the latest of a series of state privacy laws being considered and passed in recent years, such as Washington State’s recently enacted My Health My Data Act (MHMDA), which imposes a host of requirements for businesses in Washington concerning the collection of “consumer health data.” That law is at the center of a recently filed and potentially precedent-setting class action alleging that advertising software attached to third-party mobile phone apps unlawfully harvested PHI in the form of location data from millions of users. Unlike Washington’s MHMDA, New York HIPA would not provide a private right of action for individuals to file suit, but New York HIPA would empower the attorney general to enforce the law and allow for the imposition of stiff monetary penalties for violations.
Here is a breakdown of some key New York HIPA bill provisions.
Processing Regulated Health Information
New York HIPA, if enacted, would make it generally unlawful for a regulated entity to sell an individual’s regulated health information to a third party or process such information without a valid authorization unless it is “strictly necessary” for specific purposes. The bill details the requirements for obtaining valid authorization and the permissible purposes for processing without authorization. New York HIPA broadly defines “processing” to include the collection, use, access, sharing, sale, monetization, analysis, and retention, among other actions, of an individual’s regulated health information.
Notably, New York HIPA defines “regulated health information” broadly as “any information reasonably linkable” to an individual or device that “is collected or processed in connection with an individual’s physical or mental health,” including “location or payment information that relates to an individual’s physical or mental health” or “any inference drawn or derived about an individual’s physical or mental health.” This expansive definition could include a wide range of data points or information about individuals that might not typically be considered PHI, such as location data and payment information related to trips to the doctor or the gym.
New York HIPA also includes a broad definition of regulated entities. A “regulated entity” would include both entities located in New York that control the processing of regulated health information, and non-New York entities that control the processing of regulated health information of New York residents or individuals who are “physically present in New York.”
Designated Purposes
New York HIPA also sets forth the designated purposes for collecting or processing an individual’s health information without specific authorization. The collection or processing would need to be “strictly necessary” for:

providing a product or service that the individual has requested;
conducting internal business operations, excluding marketing, advertising, research and development, or providing products or services to third parties;
protecting against fraud or illegal activity;
detecting and responding to security threats;
protecting the individual’s “vital interests”; or
investigating or defending a legal claim.

Requests for Authorization
Under the bill, an authorization request must be separate from any other transaction, and individuals must be allowed to withhold authorization separately for each kind of processing. A “valid authorization” must also include several specific disclosures, including “the nature of the processing activity” and “the specific purposes for such processing.”
Individual Rights
New York HIPA would further require regulated entities to provide an “easy-to-use mechanism” for individuals to request access to and delete their regulated health information. Regulated entities would be required to provide access to or delete health data within thirty days of a request. If using a service provider, regulated entities would be required to communicate the request to a service provider within thirty days “[u]nless it proves impossible or involves disproportionate effort.”
Exemptions
The bill exempts certain information from its provisions, including:

“information processed by local, state, and federal governments, and municipal corporations”;
PHI governed by federal regulations under the Health Insurance Portability and Accountability Act (HIPAA);
covered entities governed by HIPAA; and
certain information collected as part of clinical trials.

Notably, the bill does not exempt entities subject to the Gramm-Leach-Bliley Act. Further, the bill does not exempt “business associates” under HIPAA with respect to “regulated health information” that goes beyond traditional PHI.
Security Safeguards
Under New York HIPA, regulated entities would be required to develop and maintain reasonable safeguards to protect the security, confidentiality, and integrity of regulated health information. They would also be required to securely dispose of such information according to a publicly available retention schedule.
The bill does not address the obligations of a regulated entity in the event of a data breach. New York’s data breach notification law (General Business Law § 899-aa), however, was recently amended to expand the definition of “private information” to include medical information and health insurance information, and to impose a thirty-day deadline for businesses to notify New York residents impacted by a data breach.
Service Providers
The bill would require any processing of health information by service providers on behalf of regulated entities to be governed by a written agreement. That agreement would need to include specific obligations for the service provider, such as ensuring confidentiality, protecting the data, and complying with individual rights requests.
Contracts and Waivers
Any contractual provision or waiver inconsistent with New York HIPA would be declared void and unenforceable, meaning individuals would not be able to waive their rights under the law.
Enforcement
New York HIPA would empower the state attorney general to investigate alleged breaches of the privacy requirements and bring enforcement actions. Such actions could result in civil penalties of up to $15,000 per violation or up to 20 percent of the revenue obtained from New York consumers within the past fiscal year, whichever is greater. The bill would also give the attorney general the ability to enjoin violations, seek restitution, and obtain the disgorgement of profits “obtained directly or indirectly” by any violations. Unlike Washington State’s MHMDA, the bill does not include a private right of action for individuals to sue for violations.
Next Steps
New York HIPA underscores the state’s focus, and a broader focus of states across the country, on protecting the privacy of health information. Like Washington’s MHMDA, New York HIPA would broadly define regulated health information as any information reasonably tied to an individual or device and related to an individual’s physical or mental health, including location and payment information. The bill therefore seeks to protect a broader scope of health data than what has been historically viewed as PHI under HIPAA.
New York HIPA has potential far-reaching implications for businesses nationwide that collect or process data of New York residents or individuals located in New York. If the bill is signed into law, such businesses may wish to review and consider changes to their data processing practices, data handling policies, employee training programs, contractual agreements with service providers, and customer agreements. Additionally, they may want to review their websites with respect to collecting user information and providing consumers with opt-outs.
Notably, however, New York HIPA must still be delivered to and signed by Governor Hochul, who may seek to negotiate changes to the bill before signature or effectuate changes later through chapter amendments. The governor has shown a propensity to use such chapter amendments, which refer to changes by the governor that are approved by the legislature through subsequent legislation after the law has been signed. In addition, if enacted, the bill provides that the attorney general can promulgate rules and regulations to enforce the law.

South Carolina House and Senate Introduce Legislation on Diversity, Equity, and Inclusion

State legislators have introduced bills in the South Carolina House of Representatives and South Carolina Senate to amend Title 1, Chapter 1 of the South Carolina Code by adding sections addressing diversity, equity, and inclusion (DEI) for state offices or departments, including all political subdivisions, and institutions of higher learning and school districts.
House Bill 3927 (H. 3927), introduced on February 6, 2025, and Senate Bill 368 (S. 368), introduced on February 20, 2025, are both cited as the “Ending Illegal Discrimination and Restoring Merit-Based Opportunity Act” and use parallel language in seeking to amend the South Carolina Code.
Quick Hits

South Carolina state lawmakers introduced parallel bills in the state House and Senate that follow other recent executive and agency actions at the federal level and offer additional details not present in federal executive orders, such as definitions of “promoting DEI.”
Proposed amendments to the South Carolina Code would require certification of compliance to the General Assembly, as well as require the state auditor to conduct periodic compliance audits.
The bills include several carve-outs, including directly addressing First Amendment protections, which have been raised in several recent lawsuits challenging federal executive orders with similar content.

Defining DEI
On January 21, 2025, President Donald Trump signed Executive Order 14173 (EO 14173), with a nearly identical title as H. 3927 and S. 368—“Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Unlike EO 14173, H. 3927 and S. 368 offer a definition of DEI at proposed Section 1-1-1910(A). Specifically, “promoting diversity, equity, and inclusion” is identified as “any attempt or effort to”:
(1) influence hiring or employment practices with respect to race, sex, color, ethnicity, gender, or sexual orientation other than through the use of color‑blind and sex‑neutral hiring processes in accordance with any applicable state and federal antidiscrimination laws;
(2) promote differential treatment of or providing special benefits to individuals on the basis of race, sex, color, ethnicity, gender, or sexual orientation;
(3) promote policies or procedures designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation for any purpose other than ensuring compliance with any applicable court order or state or federal law; or
(4) conduct trainings, programs, or activities designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation, other than trainings, programs, or activities developed for the sole purpose of ensuring compliance with any applicable court order or state or federal law.

Notably, both the terms “sex” and “gender” are used, as well as sexual orientation, and the list of characteristics in the definition does not include all categories from Title VII of the Civil Rights Act of 1964, as amended, nor does it address all groups protected in other parts of the South Carolina Code of Laws—such as under the South Carolina Human Affairs Law in Section 1-13-20. Three of the four definitional prongs also reference “applicable state and federal antidiscrimination laws”—these references presumably appear to serve both as a marker of prohibited DEI activities and as the sole allowable purpose for certain activities.
Prohibitions
H. 3927 and S. 368 propose at Section 1-1-1910(B) that “every office, division, or other unit by any name of every office or department of this State, and all of its political subdivisions, including all institutions of higher learning and school districts” be prohibited from:
(1) establishing or maintaining an office or division or other unit by any name whose purpose, in whole or in part, is the promotion of diversity, equity, and inclusion;
(2) hiring or assigning an employee or contracting with a third party to promote diversity, equity, and inclusion;
(3) compelling, requiring, inducing, or soliciting any person to provide a diversity, equity, and inclusion statement or give preferential consideration to any person based on the provision of a diversity, equity, and inclusion statement;
(4) giving preference on the basis of race, sex, color, ethnicity, gender, or sexual orientation to an applicant for employment, an employee, or a participant in any function of the office or department; or
(5) requiring as a condition of enrolling at an institution or performing any institution function any person to participate in diversity, equity, and inclusion training, which:

(a) includes a training, program, or activity designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation; and
(b) does not include a training, program, or activity for the sole purpose of ensuring compliance with any applicable court order or state or federal law.

Proposed Section 1-1-1910(C) would require the adoption of policies and procedures to discipline or dismiss employees or contractors who violate the prohibitions above.
Limitations
H. 3927 and S. 368 specifically note that institutions of higher education or an employee of an institution of higher education are not limited or prohibited, “for purposes of applying for a grant or complying with the terms of accreditation by an accrediting agency,” from providing a statement that highlights the institutions’ work in supporting “first-generation college students,” “low-income students,” or “underserved student populations.” Institutions are also not prohibited from certifying compliance with state or federal anti-discrimination laws.
The bills further address exemptions for institutions of higher learning for academic course instruction, scholarly research or creative work, activities of recognized student organizations, guest speakers or performers on short-term engagements, activities enhancing student academic achievement or postgraduate outcomes not based on race, sex, color, ethnicity, gender, or sexual orientation, and data collection.
Section 4 of H. 3927 and S. 368 explain that lawful state and private-sector employment and contracting preferences are not prohibited for veterans of the U.S. Armed Forces or those protected by the Randolph-Sheppard Act, nor is there any intent to prevent First Amendment of the U.S. Constitution protected speech. The direct carve-out of not seeking to chill First Amendment protected speech is noteworthy as it appears to be designed to avoid First Amendment challenges, which has been included in current lawsuits challenging EO 14173, as well as being one of the bases on which a preliminary injunction of EO 14173 was granted on February 21, 2025.
Certification, Testimony, and Audits
H. 3927 and S. 368 also propose to require certifications, elicit testimony before the General Assembly of certifying officials, and have the state auditor conduct compliance audits.
Proposed Section 1-1-1910(F)(1) prohibits “spending any money appropriated or authorized to the office or department until the governing board or chief executive officers, as applicable, submits to the General Assembly a report certifying compliance with this section during the preceding fiscal year,” while the certifying official may be “required to testify at a public hearing of the committee regarding compliance” pursuant to proposed Section 1-1-1910(F)(2). If enacted, this provision would most certainly place greater pressure on certifying officials.
The state auditor would also be tasked under proposed Sections 1-1-1910(F)(3) and (4) with conducting periodic compliance audits “as to whether the money has been expended in violation of this section.” If violations are found, the audited department or office would have 180 days to cure the violation or risk the state auditor notifying the State Fiscal Accountability Authority—which could potentially lead to the state treasurer withholding future distributions until the alleged violations are cured.
Finally, before any agency, office, division, or other unit contracts with a subcontractor for a state-paid project, the applicable subcontractor or grant recipient would also be required to certify that it does not operate any prohibited DEI programs. This requirement in proposed Section 1-1-1920 has the potential to require certifications across the business community in South Carolina and beyond the state, including potentially having certifications connected to state payments applying to nongovernmental private employers.
Next Steps
Currently, both bills have been referred to committee—H. 3927 referred to the Committee on Education and Public Works on February 6, 2025, and S. 368 referred to the Committee on Judiciary on February 20, 2025. On March 5, 2025, the South Carolina Revenue and Fiscal Affairs Office issued a Statement of Estimated Fiscal Impact related to H. 3927 explaining the fiscal impact of the bill and resources and funds that may be needed to carry out the bill’s objectives.
Republicans hold supermajorities in both the South Carolina Senate and House of Representatives, and the South Carolina governor is also a Republican. This could have an impact on how the proposed bills move through the process and, if passed as written, could have important impacts on South Carolina employers and businesses involved with state work. These bills may also be important for employers in other states as they could further signal a more extensive wave of state-based legislation addressing diversity, equity, and inclusion programs.

New Hampshire’s New “Guns at Work” Law: What Employers Need to Know

New Hampshire has recently made headlines with its new statute allowing employees to bring firearms to work in certain circumstances, which became effective on January 1, 2025. The law, signed by Governor Chris Sununu, allows employees who have concealed carry permits to bring their firearms to work as long as the firearms are secured and stored out-of-sight in employees’ locked vehicles on company property. Note that the law does not require employers to allow guns in the workplace itself; however, it does extend protections to employees who wish to keep their firearms in their personal cars during working hours.
Key Provisions of the Law

Right to Keep Firearms in Vehicles: The law allows employees with valid concealed carry permits to store their firearms out-of-sight in their locked personal vehicles, even if their employer has a general policy prohibiting firearms on the company’s premises. Additionally, employers cannot require an employee to disclose whether they are storing a firearm or ammunition in their vehicle.
Employer Exceptions: The law also clarifies that certain businesses with specific restrictions against firearms on their premises, such as gun-free zones, are not required to alter their policies to accommodate employees who want to bring their guns to work. Additionally, all covered employers still have the right to prohibit employees from carrying firearms in areas other than their vehicles, including in the workplace itself.
Civil Liability: The law provides that an employer may not be held liable in any civil action for any damages for any economic loss, injury, or death resulting from or arising out of another person’s actions involving a firearm or ammunition stored pursuant to this statute.

What Does This Mean for Employers?
The law brings challenges and responsibilities for employers. Employers who are hesitant about firearms in the workplace will need to carefully assess their policies to ensure compliance with the new law and previously existing laws. For example, the federal Occupational Safety and Health (OSH) Act’s general duty clause requires employers to protect employees from foreseeable hazards, including incidents of workplace violence. Employers will need to think carefully about how they handle situations where employees store firearms in their vehicles, such as implementing additional security measures to ensure the safety of workers, property, and other visitors.
The introduction of the Guns at Work law is likely to have a mixed impact on workplace culture. In some industries, particularly those where employees work late hours or in remote locations, some workers may feel more secure with firearms nearby. For others, the presence of guns — even if only stored in locked vehicles — could lead to discomfort or fear among staff.
Conclusion
New Hampshire’s new Guns at Work law is a significant step in the state’s evolving gun culture, and it reflects a larger trend of expanding Second Amendment rights in the workplace. With specific provisions aimed at respecting personal rights, this law sets the stage for future debates on the role of firearms in the workplace and how best to balance security, safety, and individual rights.

New Tennessee Immigration Enforcement Law: Key Measures and Implications

While much attention has been given to the Trump Administration’s early federal policy objectives to increase immigration enforcement, clients should also be aware of similar increased enforcement policies at the state level.
Last month, Tennessee Governor Bill Lee signed into law a bill passed by the state legislature during a recent special legislative session. The new Tennessee law attempts to strengthen immigration enforcement in Tennessee with the following measures:

Creates a Centralized Immigration Enforcement Division at the state level, to be led by a Chief Immigration Enforcement Officer (“CIEO”) appointed by the Governor. The CIEO will coordinate directly with the Trump Administration on federal immigration policies and implementation.
Establishes a new driver’s license that distinguishes U.S. citizens from legal permanent residents.
As Tennessee law already prohibits sanctuary cities, the law now makes it a felony for local officials to adopt or maintain sanctuary city policies.
Through provision of grants, encourages local governments to participate in enforcing federal immigration policies by entering into agreements with federal authorities. The grants may be used for training, operational expenses, investment in law enforcement equipment to be used for enforcement of immigration laws or other activities and programs deemed appropriate by the CIEO. The law also establishes penalties for local officials who do not comply with enforcement mandates.

It is expected that the constitutionality of the new law will be quickly challenged. The new law took effect February 2025 so clients should be prepared for the implementation of these new measures in the coming weeks. It is also expected that other states may follow suit with similar enforcement measures.

Make America Healthy Again: New Executive Order Revisits Group Health Plan Price Transparency

Takeaways

Employers who sponsor group health plans should review and revise, as needed, their consumer-facing pricing information for any compliance issues under the Executive Orders and applicable regulations.

McDermott+ Check-Up: March 7, 2025

THIS WEEK’S DOSE

Government Funding Deadline, Healthcare Program Expirations Approach. Congress has until March 14, 2025, to address government funding, and may also address healthcare extenders.
Senate Finance, HELP Committee Ranking Members Hotline Bipartisan December 2024 Health Package. They seek to pass the bicameral, bipartisan health package negotiated in December 2024 via unanimous consent.
Nomination Hearings Continue. Senate committees held hearings for President Trump’s nominees for Office of Management and Budget deputy director, US Food and Drug Administration commissioner, and National Institutes of Health director.
President Trump Gives Joint Address to Congress. Healthcare was not a focus, but he mentioned Make America Healthy Again initiatives and gender-affirming care.
DOJ Drops Idaho EMTALA Case. After the US Department of Justice (DOJ) dropped out of litigation related to the Emergency Medical Treatment and Active Labor Act (EMTALA), an Idaho health system that had also challenged the state law secured a temporary restraining order to prevent Idaho’s abortion ban from taking effect.

CONGRESS

Government Funding Deadline, Healthcare Program Expirations Approach. Following recent House and Senate passage of their competing budget resolutions, Congress’ attention has now turned to the March 14, 2025, government funding deadline. The most likely course of action is for Congress to pass another continuing resolution (CR), likely through the end of the fiscal year, September 30, 2025. While Republican and Democratic appropriators have been negotiating on final spending bills for 2025, matters have been complicated by the intense political climate that has marked the first months of the new Trump Administration. As a result, House Republicans are likely to bring the next CR to the floor without a formal agreement from Democrats, which may require Speaker Johnson to pass the bill with minimal (if any) Democratic support in the House. In the Senate, where Republicans hold a 53 – 47 majority, Democratic support will be necessary to clear the 60-vote threshold to overcome a filibuster. This situation is fluid, and a government shutdown of some duration cannot be ruled out, although neither party wants to appear responsible for such a shutdown.
The most recent CR also extended several healthcare programs, such as extending Medicare telehealth flexibilities, avoiding cuts to Medicaid disproportionate share hospital payments, and maintaining community health center funding, which are set to expire on March 31, 2025. Other programs expired at the end of 2024. The forthcoming CR is the most likely opportunity for Congress to temporarily extend or reinstate these programs, although the extension would likely be for a short period of time only, as most pay-fors are being saved for use in the budget reconciliation process.
Senate Finance, HELP Committee Ranking Members Hotline Health Package. In related news, Senate Finance Committee Ranking Member Wyden (D-OR) and Senate Health, Education, Labor, and Pensions (HELP) Committee Ranking Member Sanders (I-VT) introduced the bipartisan, bicameral health package negotiated in December 2024 (S. 891, the Bipartisan Health Care Act) and hotlined the bill (i.e., move via unanimous consent unless an objection is noted). This comprehensive package not only addresses the aforementioned health extenders, but also includes pharmacy benefit manager reforms, patent reforms, a limited Medicare site neutral policy, a five-year extension of the hospital at home program, Medicaid home- and community-based services policies, and an offset to the scheduled Medicare physician fee schedule reduction. The package was ultimately left out of the December 2024 CR because of Republican pushback about the overall bill’s size.
Nomination Hearings Continue. The Senate HELP Committee held its nomination hearing for National Institutes of Health (NIH) director nominee Jayanta Bhattacharya, MD, PhD. During the hearing, Democrats focused on how Bhattacharya would approach grant funding cuts, and Republicans’ conversation honed in on the culture at NIH. Bhattacharya emphasized the importance of transparency and NIH’s role in regaining the public’s trust. Chair Cassidy (R-LA) also facilitated discussion about the extent to which the government should encourage focus on research topics that have been extensively studied already, such as the link between vaccines and autism.
The Senate HELP Committee also held a hearing for US Food and Drug Administration (FDA) commissioner nominee Martin Makary, at which members underscored the importance of transparency in FDA processes and the need to rebuild public trust in health and science agencies. Democrats expressed concerns about the cancellation of the annual vaccine advisory committee meeting and emphasized the safety of mifepristone. Republicans stated their disagreement with the FDA’s decision to no longer enforce in-person dispensing for mifepristone. They also stressed the importance of addressing the impact of preservatives and chemicals in food on children’s health.
The Senate Budget Committee held the second nomination hearing for Dan Bishop to serve as deputy director of the Office of Management and Budget. Discussion predominately focused on the Impoundment Control Act, federal workforce cuts, and balancing the budget. Health-related topics included fraudulent payments and Medicaid cuts.
ADMINISTRATION

President Trump Gives Joint Address to Congress. Healthcare was not a focus of the speech; however, President Trump highlighted US Department of Health and Human Services (HHS) Secretary Kennedy’s efforts related to chronic conditions and called on him to determine the cause of the rise in autism cases. President Trump also discussed his executive order on limiting federal funding to institutions that provide gender-affirming care for individuals under 19 years of age and called on Congress to pass a bill criminalizing gender-affirming surgery for minors.
COURTS

DOJ Drops Idaho EMTALA Case. The DOJ announced that it will drop litigation first brought by former President Biden’s DOJ against Idaho’s abortion ban. The Biden administration argued that the ban violated EMTALA because it did not adequately protect the right to an abortion in a medical emergency. However, an Idaho-based health system that had also challenged the ban stepped up in DOJ’s place and secured a temporary restraining order barring the prosecution of providers who provide abortions in medical emergencies in Idaho.
QUICK HITS

CMS Rescinds Guidance on Health Equity. The Centers for Medicare & Medicaid Services (CMS) released a short informational bulletin rescinding previous guidance on health-related social needs. The bulletin stated that CMS will continue to consider states’ applications to cover these services on a case-by-case basis.
HHS Secretary Kennedy Writes Op-Ed on Measles. The op-ed encouraged parents to consult with their providers about the MMR vaccine and touted vitamin A as a treatment to reduce mortality. This comes as a measles outbreak sweeps through Texas and New Mexico, with 198 confirmed cases and two fatalities so far.
CCSQ Releases Memo on Gender-Affirming Care. To further implement the sections of President Trump’s gender-affirming care executive order that remain in effect, the Center for Clinical Standards and Quality (CCSQ) released a memo alerting providers that CCSQ “may begin taking steps in the future to align policy . . . to protect children from harmful, often irreversible mutilation, including sterilization practices.”
HRSA Memo on Gender-Affirming Care. The Health Resources and Services Administration (HRSA) sent a memo similar to the one from CCSQ to “Hospital Administrators, Colleagues and Grant Recipients” that specifically notes review of the Children’s Hospitals Graduate Medical Education Program funding.
CBO Outlines Mandatory Spending, Excluding Medicare, in Energy & Commerce Committee Jurisdiction. In response to a Democratic inquiry, the Congressional Budget Office (CBO) issued a letter highlighting the predominance of Medicaid as a potential source of savings in reconciliation. While the inquiry specifically requested that CBO exclude Medicare from the analysis, the committee has jurisdiction over Medicare, and nothing prevents the committee from considering Medicare savings, including site neutral policies. That said, it makes the point that $880 billion in savings from the committee would most certainly include Medicaid cuts.
Senators Send Letter to CMS About Agency Layoffs. Sens. Wyden (D-OR) and King (I-ME) requested that CMS Acting Administrator Carlton respond with information related to the job functions of laid-off workers.
NIH Issues News Release on Grant Review Process Proposal. The release announces plans to centralize peer review of all applications for grants, cooperative agreements, and research and development contracts within the agency’s Center for Scientific Review. The proposal is now under review with implementation pending external review, which includes review by HHS and OMB, providing Congress with a 15-day notification period, and issuing a Federal Register notice.
HRSA Opens Applications for OPTN Board of Directors. As part of the Organ Procurement and Transplantation Network (OPTN) modernization initiative, HRSA released the application for new members to join the OPTN Board of Directors. Applications are due April 4, 2025.
JCT Clarifies Tax Scoring. There is an ongoing discussion among Congressional Republicans about using a “current policy baseline” for scoring tax cuts in reconciliation, which would mean that extending the 2017 Trump tax cuts would have no score. In a response to an inquiry from Sens. Warren (D-MA), Cortez Masto (D-NV), Warner (D-VA), Bennet (D-CO), and Welch (D-VT), the Joint Committee on Taxation (JCT) clarified that, if Congress utilizes this approach to bring down the score of extending the 2017 tax cuts to $0, then the cost of extending the Affordable Care Act’s advanced premium tax credits would be $0 as well.
MedPAC Hosts March Public Meeting. The Medicare Payment Advisory Commission (MedPAC) agenda included sessions on physician fee schedule updates, beneficiary cost-sharing for outpatient services at critical access hospitals, Medicare insurance agents, Medigap, payment for ground ambulance services, Medicare Advantage utilization, and institutional special needs plans.

NEXT WEEK’S DIAGNOSIS

The House and Senate will be in session next week, and most of their attention will be on a government funding bill ahead of the March 14 deadline. The Senate will continue to advance President Trump’s nominees, including HELP Committee votes on the NIH and FDA nominees, and a HELP Committee hearing for Centers for Disease Control and Prevention director nominee Dave Weldon, MD. Several committees will hold other healthcare hearings, including a House Oversight and Government Reform Government Operations Subcommittee hearing on improper payments and fraud, a Senate Special Committee on Aging hearing on senior loneliness, and a House Ways and Means Health Subcommittee hearing on post-acute care.

Virginia General Assembly Passes Workplace Violence Prevention Requirements

On March 7, 2025, Virginia’s General Assembly passed House Bill (HB) 1919, requiring by January 1, 2027, any Virginia employer of one hundred or more employees to develop, implement, and maintain a workplace violence policy. The bill is currently awaiting Governor Glenn Youngkin’s signature.

Quick Hits

Virginia’s General Assembly passed a workplace violence bill that would require any workplace violence policy to include a “mechanism for employees to report workplace violence” and measures to protect workplace safety.
The bill, if signed, would require employers to make these plans “tailored and specific to conditions and hazards” at the employer’s workplace and would make it unlawful for employers to discriminate or retaliate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities.
The bill is now on the governor’s desk.

If passed, HB 1919 would require any such workplace violence policy to include a “mechanism for employees to report workplace violence” in addition to measures to protect workplace safety. If signed by the governor, the new law would require covered employers to make their workplace violence plans “tailored and specific to conditions and hazards” at the employer’s workplace.
If enacted, the law would require employers in Virginia to explicitly include several layers of implementation controls in their workplace violence policies. Specifically, any policy needs to outline the “procedures and methods for identifying” the individuals responsible for the policy’s implementation. Any policy must also detail how employers will respond to incidents immediately and post-incident investigation procedures.
The largest consideration for employers is the requirement to assess risks of workplace violence and hazards to employees. The bill does not define what this assessment looks like but does require that it be completed to support the specifics of each employer’s jobsite.
Retaliation
If signed, the bill would make it unlawful for employers to discriminate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities. Beyond traditional prohibitions on retaliation, HB1919 would explicitly prevent employers from taking any disciplinary actions against employees who report workplace violence incidents “under a policy developed pursuant to § 40.1-51.4:6 or otherwise.”
Documentation and Reporting
If enacted, employers would be required to document all reports of workplace violence incidents, including the responses, investigations, and any corrective measures taken. Under the bill, any documentation would be required to detail the violent incident, including the date, time, and location, as well as the names and job titles of the employees involved. Additionally, it would be required to describe the nature and extent of any injuries and, if applicable, how the incident was resolved. As far as retention, the law would require employers to keep these documents for a minimum of five years and make them available upon request to employees (with personal identifying information omitted) and law enforcement.
Enforcement: Civil Penalties
In the event that employers are found to be noncompliant after the July 1, 2027, deadline, they could potentially be subject to a civil penalty of up to $1,000 per violation.
Beyond the workplace violence requirements in HB1919, employers may also want to be aware of House Bill (HB) 1620, whichwould direct the Virginia Department of Labor and Industry to “convene a work group for the purpose of evaluating the prevalence of workplace violence” in the state. The work group would develop recommendations related to (a) maintaining healthy, safe, and secure work environments; (b) educating employers and employees and communicating to them techniques to effectively handle conflicts in the workplace; and (c) employee support services designed to address workplace violence. Unlike HB1919, this bill is currently tabled in committee but can change the scene about how enforcement might look going forward.
Employers in Virginia will have roughly two years to come into compliance if the bill is signed into law. It may be prudent for employers to start considering abusive conduct and bullying as factors in their workplace evaluations.
Key Takeaways
In 2025, many employers are starting to consider workplace violence incidents in their efforts to maintain workplace safety. Currently, there are no federal requirements related to workplace violence, and several states (including California and Virginia) are leading the charge in creating state-specific requirements. With Virginia’s newly proposed requirements, employers with one hundred or more employees may want to consider planning for a workplace violence plan, including what the program will entail and what workplace-specific hazards they need to consider.

What Is “Illegal DEI?” Key Takeaways for Employers in Light of Litigation and Guidance Issued by the Federal and State Governments

This alert will explore what the federal government may consider to be “illegal DEI” in light of legal challenges to President Trump’s multiple executive orders (EO’s) pertaining to diversity, equity, inclusion, and accessibility (DEI)1 and provide employers with some best practices with respect to DEI initiatives.
Legal Challenges to the DEI EOs
The enforceability and constitutionality of the DEI EO’s have been challenged in numerous federal lawsuits, including Nat’l Assoc. of Diversity Officers in Higher Ed., et al. v. Donald J. Trump, et al.2 On 21 February 2025, the United States District Court for the District of Maryland (the Court) issued a nationwide preliminary injunction (Order) enjoining the following directives in the DEI EO’s (1) canceling or freezing any awards, contracts, or obligations for government contractors engaging in illegal DEI; (2) requiring contractors to make certifications with respect to illegal DEI; and (3) bringing False Claims Act enforcement actions against federal contractors based on such certifications. The Court found that the DEI EOs failed to define “operative terms” such as “DEI,” “illegal DEI,” “illegal DEI policies,” or “illegal discrimination or preferences.”3 The Court also noted that the government was unable to clarify what type of actions constituted “illegal DEI” when asked direct questions and presented with hypotheticals during the hearing.4
Notably, the Order did not enjoin the US Attorney General from preparing a report containing recommendations for enforcing federal civil-rights laws, “encouraging the private sector to end illegal discrimination and preferences,” including DEI, and identifying up to nine potential civil compliance investigations per federal agency of publicly traded corporations, large nonprofit corporations or associations, or foundations with assets of US$500 million or more. Also, the Order did not apply to a number of agencies, including the Equal Employment Opportunity Commission (EEOC).
As anti-DEI efforts are a top enforcement priority for the Trump administration, the administration has appealed the Order to the Fourth Circuit Court of Appeals (Fourth Circuit) and filed a motion to stay the Order pending appeal, which was denied by the Court.
Valuable Resources for Defining Illegal DEI
In light of the federal government failing to define “illegal DEI” in the DEI EOs or related legal challenges, employers’ approaches to current DEI initiatives should be informed by current federal antidiscrimination law, communications from federal agencies thus far on this topic, and applicable state law guidance. While awaiting more tailored guidance from the federal government, private employers can glean some do’s and don’ts of DEI from the following resources, explained in more detail herein.

The memorandum issued by the US Office of Personnel Management (OPM) regarding the future of federal agencies’ DEI programs (Memo);5 and
Multi-state guidance issued by the Attorneys General of 15 states6 addressing DEI employment initiatives (the Multi-State Guidance).

The OPM Memo identifies certain DEI initiatives and practices that are no longer permitted in the federal agencies and in some cases, are considered illegal. For example, “diverse slate” hiring7 is included as an example of an “unlawful diversity requirement” that considers an applicant’s protected characteristic as part of the hiring process.8 The OPM Memo also directs agencies to reorganize and eliminate “Special Emphasis Programs” (SEPs) that promote DEI based on protected characteristics. SEPs were established to remove barriers to equal employment opportunity for traditionally underrepresented groups in the workforce,9 not unlike diversity internships and career development programs in the private sector. Further, the OPM Memo directs all agencies to disband employee resource groups (ERGs) that “advance employment opportunities based on protected characteristics,” and to ensure membership in ERGs is not restricted based on any protected characteristic.
The Multi-State Guidance takes the position that the DEI EOs do not prohibit lawful practices and policies that promote DEI in the private sector. As such, the Multi-State Guidance recommends that employers continue lawful DEI practices, including: prioritizing widescale recruitment efforts to attract a larger pool of applicants; setting standardized evaluation criteria to reduce the impact of biases on the interview process; ensuring equal access to all aspects of professional development; conducting training on topics such as unconscious bias, inclusive leadership, and disability awareness; and establishing working groups to participate in creating strategies that support more inclusive behaviors and practices.
Key Takeaways for Employers
The OPM Memo and Multi-State Guidance provide helpful guidance to private employers as they prepare for increased scrutiny and potential government investigations. Specifically, private employers should consider:

Suspending “diverse slate” hiring practices and focusing instead on widescale recruiting to attract a large pool of applicants.
Reviewing the purpose and impact of any employer-recognized ERGs and ensuring that such groups are inclusive and open to everyone.
Reorganizing or ending DEI internship and career development programs based on protected characteristics.
Conducting internal audits of DEI policies and procedures, especially as to recruitment and hiring.
Providing trainings on topics like unconscious bias and disability awareness.

Conclusion
As evidenced by the ever-changing DEI landscape, employers should keep in mind that various state law requirements and enforcement priorities under anti-discrimination laws may be in tension with the federal directives in the DEI EOs and US Department of Justice and EEOC enforcement priorities, which will increase uncertainty surrounding compliance. Employers should work with counsel to ensure hiring and retention practices and equal employment opportunity policies comply with applicable law in light of the updated enforcement guidance provided by the federal government to reduce the risk of government investigation while maintaining compliance with applicable law.

Footnotes

1 Specifically, the Trump Administration issued Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferences and Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (collectively, the DEI EOs).
2 Case No. 1:25-cv-00333-ABA (D. Md. Filed Feb. 3, 2025).
3Id. at *2.
4 Id. at *46.
5 Dated 5 February 2025, with the subject, “Further Guidance Regarding Ending DEIA Offices, Programs and Initiatives.”
6 Arizona, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, and Vermont
7 As defined in the OPM Memo, “diverse slate” hiring is a hiring process through which diversity requirements are imposed on the composition of hiring panels, the composition of candidate pools, or both.
8 In doing so, the OPM Memo clarified that “to be unlawful, a protected characteristic does not need to be the sole or exclusive reason for an agency’s action.”
9 Special Emphasis Programs | U.S. Department of Commerce.