Wyoming Bans Most Non-Compete Agreements
Wyoming just banned most non-compete agreements (Wyo. Stat. § 1-23-108): starting July 1, 2025, most agreements that restrict workers from working in competitive jobs will be void, absent some exceptions for:
High-Level Employees: Non-compete agreements with “executive and management personnel” and “officers and employees who constitute professional staff to executive and management personnel” will still be enforceable. However, the statute does not define these terms, so employers should review those roles carefully.
Sale-of-Business: Sellers and buyers can agree to non-competes when selling or transferring a business.
Trade Secrets: Employers can protect trade secrets through narrowly tailored non-compete agreements that comply with the state’s definition of trade secrets, i.e. “the whole or a portion or phase of a formula, pattern, device, combination of devices or compilation of information which is for use, or is used in the operation of a business and which provides the business an advantage or an opportunity to obtain an advantage over those who do not know or use it.” Wyo. Stat. § 6-3-501(a)(xi).
Recovery of Relocation, Education, and Training Expenses: Employers can contract with employees to recoup training, education, and/or relocation expenses if an employee leaves within 4 years, with varying repayment percentages based on tenure:
Up to 100% if employment lasted less than two yearsUp to 66% if employment was between two and three years
Up to 33% if employment was between three and four years
Special Rules for Physicians
Non-compete agreements for physicians that restrict practice are prohibited. Further, doctors may notify patients with rare disorders about their new practice location and contact information. Notably, the statute clarifies that an agreement that contains an enforceable non-compete against a physician that is otherwise permitted by law will remain enforceable.
Looking Ahead
The statute applies only prospectively to contracts signed on or after July 1, 2025. Wyoming employers and business should consult legal counsel to update or implement restrictive covenant agreements in a timely manner.
The Third Time’s A Charm: Colorado Adds Nuclear Energy as a Clean Energy Resource
After considering similar legislation in two prior sessions, the Colorado General Assembly passed, and Gov. Jared Polis signed into law, House Bill 25-1040 which explicitly adds nuclear energy to the state’s statutory definitions of “clean energy” and “clean energy resource” for purposes of complying with Colorado’s carbon dioxide emission reduction requirements and applying for financial assistance under Colorado’s Rural Clean Energy Project Finance Program. In so doing, Colorado joins more than a dozen other states that consider nuclear power to be a clean energy resource under various state energy policies, and is consistent with the growing number of states taking legislative, regulatory, or policy steps to support or at least consider adding nuclear power to their energy mix.
Acknowledging Colorado’s projected growth in peak electricity demand and the potential energy supply, reliability, climate, and economic benefits of nuclear energy, including advanced reactors such as Small Modular Reactors (SMRs), the legislation expands the statutory definitions to include “nuclear energy, including nuclear energy projects awarded funding through the United States Department of Energy’s Advanced Nuclear Reactor Programs.”
Under Colorado’s carbon dioxide emission reduction statute, qualifying retail utilities in Colorado are required to submit to the Colorado Public Utilities Commission (CPUC) a plan detailing how they intend to reduce by 2030 carbon dioxide emissions associated with their electricity sales by 80 percent as compared to 2005 levels, and how they will seek to achieve 100% emission free electricity sales by 2050. For compliance purposes, the Statute incorporates the “eligible energy resources” that can be used to comply with Colorado’s separate Renewable Energy Standards (RES); these include recycled energy, renewable energy resources (wind, solar, geothermal, new small hydropower, and certain biomass), and renewable energy storage, however, nuclear energy is expressly excluded. Recognizing that not all clean energy resources may be considered renewable, the Statute also allows any other “electricity-generating technology that generates or stores electricity without emitting carbon dioxide into the atmosphere.” While this catch-all language arguably encompasses nuclear energy, HB25-1040 amends the statute to remove any doubt and emphasize the potential benefits of nuclear energy.
Colorado’s three largest electric utilities are in the process of implementing their respective CPUC-approved clean energy plan or electric resource plan that meets the state’s emission reduction requirements. While none of the plans presently include nuclear power, Colorado’s largest investor-owned electric utility, Public Service Company of Colorado (PSCo), has indicated it is open to considering nuclear energy resources in the future.
HB25-1040 also expands the types of energy that qualify for potential financial assistance through Colorado’s Rural Clean Energy Project Finance Program. The Program allows certain rural property owners to apply to their board of county commissioners for the issuance of tax-exempt private activity bonds to help finance the construction, expansion, or upgrade of a clean energy project having a capacity of no more than 50 MW and which is owned by and located on the property owner’s land. The electricity generated by such a project would be delivered to the cooperative electric association in whose service territory the project is located. Similar to Colorado’s RES, the Program defined “clean energy” to include only biomass, geothermal, solar, wind, and small hydropower resources as well as hydrogen derived from these resources. As such, only projects using these technologies were eligible for financial assistance under the Program. Now, small nuclear power projects are also eligible for financial assistance under the Program.
Colorado presently has no operating commercial nuclear power plants. From 1979 until 1989, Colorado was home to the Fort St. Vrain Nuclear Power Plant, a 330 MW(e) high temperature gas cooled reactor, owned and operated by PSCo. The plant was decommissioned in 1992 following a series of operational issues and portions of the plant were converted to a natural gas combustion turbine generating plant. The statutory amendments resulting from HB25-1040 do not mean that new nuclear power is coming to Colorado, but they do evidence a state policy environment more favorable to nuclear power and provide practical, incremental improvements that may incentivize utilities and landowners to consider developing nuclear power generating facilities in the state.
For example, PSCo has indicated that new nuclear generation is one possible option to replace the electricity and economic benefits of its Comanche-3 power plant located in Pueblo, Colorado and which is scheduled to retire by January 1, 2031. The ability to count nuclear energy toward PSCo’s carbon dioxide emission reduction obligations may be an additional consideration as PSCo evaluates this option. Furthermore, once advanced reactor designs progress from First-of-a-Kind to Nth-of-a-Kind, cost effective, deployable systems, some SMRs and microreactors could align well with Colorado’s Rural Clean Energy Project Finance Program and become viable power supply options for Colorado’s rural communities.
Ultimately, taking advantage of HB25-1040’s incremental improvements will also require sound legal and regulatory advice related to nuclear matters as well as siting, permitting, environmental, and numerous other issues. If you have questions concerning this legislation or the opportunities it may create, please reach out to the author of this alert or the Womble Bond Dickinson attorney with whom you normally work.
Reorganize EPA? A Very Old Idea
Recent press reports tell of rumors of impactful (some fear catastrophic) budget cuts to the U.S. Environmental Protection Agency (EPA). Politically, priority on reducing EPA’s climate programs, along with budget and personnel cuts, are not surprising given the election results. Recent rumors include chatter that the EPA Office of Research and Development (ORD) might be eliminated and/or its staff redistributed, with a specific target on the back of ORD’s Integrated Risk Information System (IRIS).
In recent years, the IRIS program has skirted controversy particularly aimed at its underlying assessment methods and assumptions used in its reports about chemical exposures. In theory the program is an attempt to have a single hazard assessment act as a platform of sorts, for the individual media program offices across EPA (air, water, waste, and toxics) to then present an integrated approach to chemical risks. This singular assessment would then facilitate a cross-media, integrated approach that is easier to implement. Like so many ideas that are good on paper, fulfilling this goal has proven difficult over time (see the tortured history of the IRIS formaldehyde assessment).
Other forums have and will continue to discuss EPA science and assessment methods, both important issues for understanding and achieving EPA’s objectives. Yet what is also interesting is the long-standing, and much less noticed, discussion of EPA’s organizational structure and the ideas for changing the structure first created over five decades ago.
For the record, EPA was created by then-President Nixon in 1970. He had signed Reorganization Plan No. 3, calling for the establishment of EPA in July 1970. After conducting hearings that summer, the House and Senate approved the proposal. The Agency’s first Administrator, William Ruckelshaus, took the oath of office on December 2, 1970. Two days later, President Nixon issued EPA Order 1110.2 — Initial Organization of the EPA.
The original “organization” of EPA was a mix of existing programs, agencies, and departments — dispersed elements of the government working on environmental issues. A November 29, 1990, press release from EPA describes “EPA’s genesis” as “an executive order dealing with a pastiche of 15 programs from 5 agencies involving 5,800 employees and a $1.4 billion budget.
The organization of EPA, and how that organization impacts its effectiveness, has been an issue since its founding. From its earliest days, there have been proposals for making EPA a cabinet-level Department. During the H.W. Bush Administration, to knit together the programs and statures more coherently, the EPA policy office developed a comprehensive draft of possible ways to reorganize the underlying environmental legislation and a parallel EPA structure.
In August of 2006, the EPA Office of Inspector General (OIG) issued a report titled “Studies Addressing EPA’s Organizational Structure.” The objective of the report is to summarize 13 studies’ pertinent findings in a single, “informational document that provides perspectives on what has been problematic and what EPA may need to change regarding its organizational structure.” The OIG review includes research studies, articles, publications, and reports that address the EPA’s organizational structure and provide suggestions to improve performance. The report’s evaluation focuses especially on cross-media management, regional offices, “reliable information,” and “reliable science.”
Most recently, and perhaps most important given the current Administration’s efforts at government reform, the subject of “reorganizing” EPA is included as a chapter in the Project 2025 report. That chapter has led to fears from many that budget and personnel cuts are part of a larger plan to upend the Agency.
Recent press reports (like The Washington Post’s March 27, 2025, article, “Internal White House document details layoff plans across U.S. agencies”) indicate that the “plan” for EPA is to cut 10 percent of its workforce — which would seem less than some aggregated possibilities discussed in the Project 2025 chapter but could still include “firing up to 1,115 people” from ORD alone. Project 2025 suggests large cuts to regional offices, the elimination of the afore-mentioned IRIS program, a “reorganization” of the enforcement office and environmental justice programs, and other changes which would seem to add up to less than a 10 percent cut to the workforce. Attrition rates alone are estimated to be an average of 6 percent, and early retirements accelerated by, among other things, the fear of possible cuts, would likely add up to 10 percent or more.
Does this spell out some kind of preferential treatment for EPA? Unlikely, given the overall rhetoric of this Administration’s efforts. It may be that the larger target savings at EPA are the significant sums included for climate protection grant programs appropriated during the Biden Administration. Or it may be that the workforce cuts at EPA as a percentage contribute less to some unknown target of reducing the overall government payroll. While a 10 percent cut would result in a large impact on EPA capabilities, it is less than other programs eliminated altogether, or the announced 20 percent cut in staff at the Department of Health and Human Services (HHS) or 50 percent cut at the Department of Housing and Urban Development (HUD).
But the goal of reforming, reorganizing, or reducing the workforce is neither a new idea nor one lacking merit. EPA’s organizational structure has been under review since its inception. In the present moment, however, the lack of a cohesive or consistent approach leaves significant questions not only about the underlying motivation but also about the final impact of the effort. “Less bureaucracy” does not necessarily equate to reduced numbers of staff. And as some government functions will now contend with seemingly disorganized staff reductions, public resentment about “the bureaucracy” may only increase. Something to think about as we wait (and hope) to get our social security check or passport – or pesticide registration – on time
New Life for Nuclear Power: License Extensions and Recommissioning
Key Takeaways:
Secure Financial and Regulatory Support Early
Recommissioning projects (like Palisades and TMI Unit 1) demonstrate the importance of securing strong financial backing (government loans, state support) and long-term PPAs
Early engagement with USNRC is crucial given the complex regulatory process
Leverage Experienced Contractors and Learn from Precedents
Engage experienced regulatory counsel and third-party contractors to identify potential risks early
Study recommissioning cases (like Palisades and TMI Unit 1) as they establish regulatory precedents
Introduction
At its peak, the commercial nuclear power industry in the United States included 112 operating nuclear reactors. Many of those reactors entered operation in the 1970s and 1980s and were typically licensed to operate for 40 years. When some of these reactors reached the end of their operating life, they were decommissioned. Others were taken out of service for various reasons but not fully dismantled. Yet others received extensions of their operating licenses and continue to provide clean, reliable, baseload electricity. The Trump Administration’s recent Executive Order, “Unleashing American Energy,” counts nuclear energy among the resources for which regulatory burdens must be reviewed, and suggests uranium should be included in the US’ list of critical minerals. With the renewed interest in nuclear power, former and existing nuclear power plants will be critical among the opportunities to meet the growing demand for electricity to power a variety of energy intensive industries.
This article explores the challenges and opportunities associated with nuclear power plants at or near the end of their planned operating life.
…there is a growing interest in nuclear power as a non-greenhouse gas emitting source of baseload electricity.
Old Plants, New Licenses : Nuclear Power’s Extended Stay
The average age of currently operating commercial nuclear reactors in the US is more than 40 years.1 Under current regulations,2 the US Nuclear Regulatory Commission (USNRC) may grant a 20-year extension of the plant’s original operating license, and potentially a subsequent 20-year license extension for a total of 80 operating years. Given the economic and regulatory pressures that have driven the retirement of coal-fired baseload generating power plants in recent years, there is a growing interest in nuclear power as a non-greenhouse gas emitting source of baseload electricity. This interest is driving some utilities to consider whether it is appropriate to pursue operating license extensions for nuclear power plants that would otherwise be considered for decommissioning.
A recent example of the confluence of these factors is Pacific Gas & Electric’s two-reactor Diablo Canyon Power Plant – California’s largest power plant. In 2023, driven by concerns related to statewide electricity reliability and climate change, California Senate Bill No. 846 became law and directed PG&E to pursue an extension of Diablo Canyon’s operating license to 2030. Following the conclusion of litigation that sought to prevent the license extension, PG&E’s application is currently under review by USNRC while both reactors continue to operate. Since 2000, USNRC has issued operating license extensions for more than 90 nuclear reactors. 3
The Long Goodbye: Navigating Nuclear Plant Decommissioning
Despite opportunities for life extension, some nuclear plant owners choose decommissioning for financial or operational reasons. In such cases, plant owners must first notify the USNRC of their planned shutdown, then work with the USNRC to coordinate all post-shutdown decommissioning activities including developing and implementing a License Termination Plan. Once these steps are complete, the owner must finish the full decommissioning process within 60 years of terminating plant operations. The final goal is to have the reactor site approved by the USNRC for future use which may be subject to specific restrictions. 4 Navigating this highly regulated process can be challenging in the best of circumstances and, in some instances, may be the subject of litigation, including with respect to disposal of spent reactor fuel. There are currently 20 US commercial nuclear reactors in various stages of the regulated decommissioning process. 5
These risks tend to become more apparent as the DECON phase progresses and the true scope of the necessary decontamination becomes apparent.
Full scale decommissioning and dismantling to obtain release of the USNRC license is a multi-year and costly process fraught with risks. This process includes: 6
Removing the spent nuclear fuel from the reactor.
Storing the spent nuclear fuel, typically in dry storage containers, either on-site or at licensed off-site locations.
Dismantling radioactive systems and equipment; and
Cleaning up contaminated material (e.g., contaminated soil, groundwater, etc.) and packaging and transporting it to a disposal facility.
Nuclear plants can be decommissioned and dismantled in either one or two phases. The first is safe storage (SAFSTOR), where the facility is placed in protective storage for an extended period. During this time, radioactivity naturally decreases in key components like the reactor vessel, fuel pools, and turbines. Spent fuel is removed from the reactor vessel and placed in secure storage, and the plant remains under USNRC oversight throughout this period.
The second phase is decontamination (DECON) during which contaminated equipment and materials are removed from the site. Plant owners with sufficient decommissioning funds may choose to skip SAFSTOR and proceed directly to DECON. However, those needing to accumulate additional funds may opt for SAFSTOR, in part to allow their decommissioning fund to grow over time. As part of DECON, the nuclear plant owner decontaminates and removes contaminated equipment and material. The DECON process can take up to five years, if not longer. 7
Given the number of US commercial nuclear reactors that have been decommissioned or are in the process of decommissioning, a number of third-party contractors have gained vital experience that can help nuclear plant owners better understand the risks inherent in decommissioning. These risks tend to become more apparent as the DECON phase progresses and the true scope of the necessary decontamination becomes apparent. For example, while it is expected that components in close contact with radioactive material will need to be decontaminated, other debris from the dismantling effort may be more contaminated than initially expected, requiring special techniques for removal and disposal. The scope, duration, and expense of decommissioning will further expand, sometimes significantly, if surrounding soil and ground water is also contaminated and requires treatment and removal. These risks cannot be eliminated entirely, but an experienced contractor and knowledgeable regulatory counsel can help the nuclear plant owner identify the potential issues early and develop the most cost-effective and regulatorily efficient solution.
…USNRC has taken a number of regulatory actions to oversee what it describes as a “first of a kind effort to restart a shuttered plant.”
Recommissioning: Back from the Brink
As noted above, some nuclear power plants have been decommissioned but not fully dismantled. For many of the same reasons some plant owners are seeking operating license extensions for existing reactors, other plant owners are seeking to restart reactors that have begun the decommissioning process.
The Palisades Nuclear Plant (PNP) ceased operations in 2022, and Entergy transferred the plant’s operating license to Holtec Decommissioning International for purposes of decommissioning the facility. In 2023, however, citing the need for safe, reliable, carbon-free electricity, Holtec announced plans to seek USNRC approval to restart PNP. Holtec’s plans have received financial assistance from the State of Michigan, a $1.52 billion loan from the US Department of Energy, and the company has entered into a long-term power purchase agreement (PPA). In response to Holtec’s plans, USNRC has taken a number of regulatory actions to oversee what it describes as a “first of a kind effort to restart a shuttered plant.”8 In addition to restarting the plant’s 800 MW reactor by late-2025, Holtec has also announced its intent to explore siting small modular reactors (SMRs) at the facility to make the plant a major clean energy hub for the region.
Similarly, in 2023, Constellation Energy announced its plans to restart operations at Three Mile Island (TMI) Unit 1, the companion to TMI Unit 2 which experienced a partial core meltdown in 1979. TMI Unit 1 ceased operations in 2019 and, like PNP, its license status was changed to SAFSTOR (Safe Storage) to facilitate later decommissioning efforts. Constellation estimates the cost to bring TMI-1 back to operating status at $1.6 billion. The project is supported by a 20-year PPA with Microsoft to purchase all power from the plant to supply its regional data center operations with carbon-free electricity. Assuming all regulatory approvals are obtained, TMI Unit 1, which is to be renamed the Crane Clean Energy Center, is projected to resume operations in 2028.
The future of America’s nuclear power plants stands at a critical crossroads.
In July 2024, NextEra announced that it was considering a possible restart of the 45-year-old Duane Arnold nuclear plant in Palo, Iowa which ceased operations in August 2020. In a clear response to growing electricity demand, on January 23, 2025, NextEra filed with the USNRC a proposed regulatory path for the potential reauthorization of operations at the Duane Arnold power plant.
While there are likely a limited number of nuclear plants that could be considered for recommissioning, recent statements by the Trump Administration suggesting that nuclear energy will be viewed as a priority resource to meet future energy demand may bode well for the regulatory path forward for nuclear plant restarts.
Conclusion
The future of America’s nuclear power plants stands at a critical crossroads. The growing demand for reliable, baseload power, coupled with concerns about climate change and energy security, has sparked renewed interest in preserving and expanding nuclear capacity. As a result, while some nuclear plants may face decommissioning, others are finding new life through license extensions and recommissioning efforts.
Early indications are the Trump Administration intends to “unleash commercial nuclear power in the United States” through the development and deployment of next-generation nuclear technology.9 It is possible that the Administration’s support for nuclear power will extend to optimizing the use of the nation’s existing and former nuclear plants. Similarly, the Administration’s concurrent interest in streamlining regulatory processes may provide more regulatory certainty for existing and former nuclear plants being considered for operating license extensions or for recommissioning.
The story of America’s nuclear plants is thus not simply one of sunset versus second life, but rather one of evolution and adaptation to meet the changing energy needs of the 21st century.
1https://www.eia.gov/tools/faqs/faq.php?id=228&t=3 210 CFR § 543https://www.nrc.gov/reactors/operating/licensing/renewal/applications.html#completed 410 CFR § 20 and §§ 50.75, 50.82, 51.53, and 51.955https://www.nrc.gov/info-finder/decommissioning/power-reactor/index.html 6https://www.nei.org/advocacy/make-regulations-smarter/decommissioning 7https:// www.nei.org/resources/fact-sheets/decommissioning-nuclear-power-plants8https://www.nrc.gov/info-finder/reactors/pali.html 9Secretary Wright Acts to “Unleash Golden Era of American Energy Dominance” | Department of Energy
Fifth Circuit Court of Appeals Negates Ruling on Federal Contractor Minimum Wage
On March 28, 2025, the Fifth Circuit Court of Appeals vacated its previous ruling that permitted a $15 per hour minimum wage for federal contractors, shortly after President Donald Trump revoked the Biden administration rule setting that wage rate.
Quick Hits
The Fifth Circuit vacated its decision to uphold a $15 per hour minimum wage for federal contractors.
The court acted shortly after President Trump rescinded a Biden administration rule raising the minimum wage for federal contractors to $15 per hour.
An Obama-era rule establishing a $13.30 per hour minimum wage for federal contractors still stands.
On the website for the U.S. Department of Labor, the agency said it is “no longer enforcing” the final rule that raised the minimum wage for federal contractors to $15 per hour with an annual increase depending on inflation.
As of January 1, 2025, the minimum wage for federal contractors was $17.75 per hour, but that rate is no longer in effect. Therefore, an Obama-era executive order setting the minimum wage for federal contractors at $13.30 per hour now remains in force.
Some federal contracts may be covered by prevailing wage laws, such as the Davis-Bacon Act or the McNamara-O’Hara Service Contract Act. Those prevailing wage laws are still applicable.
Many states have their own minimum wage, and those vary widely.
Background on the Case
In February 2022, Louisiana, Mississippi, and Texas sued the federal government to challenge the Biden-era Executive Order 14026, which directed federal agencies to pay federal contractors a minimum wage of $15 per hour. The states argued the executive order violated the Administrative Procedure Act (APA) and the Federal Property and Administrative Services Act of 1949 (FPASA) because it exceeded the president’s statutory authority. The states also claimed the executive order represented an “unconstitutional exercise of Congress’s spending power.”
On February 4, 2025, the Fifth Circuit Court of Appeals upheld the $15 per hour minimum wage for federal contractors. A three-judge panel ruled that this minimum wage rule was permissible under federal law.
On March 14, 2025, President Trump rescinded the Biden-era executive order that established a $15 per hour minimum wage for federal contractors. In effect, that made the earlier court ruling moot, according to the Fifth Circuit.
Next Steps
Going forward, the Obama-era $13.30 minimum wage rate for federal contractors still stands. Federal contractors operating in multiple states may wish to review their policies and practices to ensure they comply with state minimum wage laws and federal prevailing wage laws. If they use a third-party payroll administrator, they may wish to communicate with the administrator to confirm legal compliance.
New Mexico Bills Would Expand Protections for Medical Marijuana and Allow Use of Medical Psilocybin
Lawmakers in New Mexico have advanced two bills that would expand protections for medical marijuana patients and permit the use of medical psilocybin.
Quick Hits
The New Mexico House of Representatives recently passed a bill to protect workers from penalties at work for off-duty use of medical marijuana.
The New Mexico Senate and House of Representatives both passed a bill to permit medical use of psilocybin.
The governor has until April 11, 2025, to sign or veto any bill that passes both chambers.
A bill (House Bill (HB) 230) in the New Mexico Legislature would protect employees from being disciplined at work for off-duty use of medical cannabis. HB 230 passed the state House of Representatives on March 12, 2025, and was sent to a Senate committee. It clarifies that an employee could not be considered impaired by cannabis at work solely because of the presence of THC metabolites or components of cannabis in the body. It would prohibit employers from conducting random drug testing for cannabis, if the employee is a qualified medical marijuana patient over the age of eighteen. Random drug testing would be permitted if the employer has a reasonable suspicion of marijuana consumption during work hours that resulted in an accident or property damage.
In 2021, New Mexico legalized the possession, consumption, and cultivation of recreational cannabis for adults twenty-one and older. The state legalized medical marijuana in 2007. The medical conditions that may qualify under the New Mexico Medical Marijuana Program include cancer, anxiety, post-traumatic stress disorder, insomnia, glaucoma, HIV/AIDS, hepatitis C, and multiple sclerosis, among others.
In a growing national trend, recreational marijuana is now legal in twenty-four states and Washington, D.C. Cannabis use and possession remain illegal on federal property under federal law.
Medical Psilocybin
Another bill, Senate Bill (SB) 219, recently passed the New Mexico legislature to approve medical use of psilocybin, sometimes called “magic mushrooms.” If signed by the governor, SB 219 would make it legal for patients to use psilocybin prescribed by a doctor for a qualifying medical condition, including major treatment-resistant depression, post-traumatic stress disorder, substance use disorder, and end-of-life care.
Next Steps
Governor Michelle Lujan Grisham has until April 11, 2025, to sign or veto bills that pass both chambers of the legislature.
In the meantime, employers in New Mexico may wish to review their drug testing policies and practices to ensure they comply with state law, particularly with respect to medical marijuana patients. Employers can discipline or fire workers who use marijuana while on duty or arrive at work intoxicated.
Delaware Enacts Sweeping Changes to the Delaware General Corporation Law
On March 25, 2025, the governor of Delaware signed into law Senate Bill 21, over much opposition from the plaintiffs’ bar and some academics. The bill, which amends Sections 144 and Section 220 of the Delaware General Corporation Law, 8 Del. C. (the “DGCL”), seeks to provide clarity for transactional planners in conflicted and controller transactions, and seeks to limit the reach of Section 220 books and records demands. These amendments significantly alter the controller transaction and books and records landscape.
Background
Senate Bill 21 comes in the backdrop of heightened anxiety over whether Delaware will retain its dominance in the corporate law franchise. Businesses have cited a seemingly increased litigious environment in Delaware, and when coupled with a handful of high-profile companies redomesticating or considering redomesticating to other jurisdictions (see our blog article about the Tripadvisor redomestication here), other states such as Texas and Nevada making a strong push to accommodate for new incorporations and redomestications, and a series of opinions out of the Delaware Court of Chancery that were unpopular in certain circles, concern was growing of Delaware falling from its position as the leading jurisdiction for corporate law.
This is not the first time the Delaware legislature has acted to re-instill confidence in Delaware corporate law to the market. Senate Bill 21 also comes less than a year after Senate Bill 313 was signed into law. Senate Bill 313, coined the “market practice” amendments, sought to address the decisions in West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, 311 A.3d 809 (Del. Ch. 2024), Sjunde AP-Fonden v. Activision Blizzard, 124 A.3d 1025 (Del. Ch. 2024), and Crispo v. Musk, 304 A.3d 567 (Del. Ch. 2023), which many found surprising. And perhaps most famously, Section 102(b)(7), the director exculpation clause (now the director and officer exculpation clause following an amendment in 2022), was enacted in the wake of the Delaware Supreme Court’s decision in Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985), which caused shockwaves throughout the corporate law community as well as the director and officer insurance market.
Senate Bill 21 Amendments
Section 144. Section 144 of the DGCL was revamped entirely from being a provision speaking on the voidability of conflicted transactions, into a statutory safe harbor for conflicted and controller transactions. The essence of the new Section 144 is defining what a controlling stockholder is, and providing different safe-harbor frameworks for conflicted transactions, controlling stockholder transactions, and controlling stockholder “go private” transactions for public companies.
Controllers are now statutorily designated as those persons (together with affiliates and associates) that (1) has majority control in voting power, (2) has the right to nominate and elect a majority of the board, or (3) possess the functional equivalent of majority control by having both control of at least one-third in voting power of the outstanding stock entitled to vote generally in the election of directors and the power to exercise managerial authority. The last category will likely be the subject of much litigation in the future, but the defined boundaries will limit a plaintiff’s ability to cast a person as a controller.
Under the new Section 144, controllers (and directors or officers of a controlled company) can shield themselves from a fiduciary claim in a conflicted transaction if (1) a committee of 2 or more disinterested directors that has been empowered to negotiate and reject the transaction, on a fully-informed basis, approve or recommend to approve (by majority approval) the transaction, or (2) it is approved by a fully-informed, uncoerced, affirmative vote of a majority of the votes cast by the disinterested stockholder. And in a “go private” transaction, both (1) and (2) above need to be accomplished. Such actions will grant the transaction “business judgment rule” deference. This is a significant change from recent Delaware Supreme Court precedent under Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) (“MFW”), and its progeny holding that a controller transaction providing a non-ratable benefit to the controller will be reviewed under the discerning “entire fairness” standard unless the transaction is conditioned “ab initio” (i.e., at the outset) on the approval of a majority of fully-informed disinterested director and fully-informed, disinterested and uncoerced stockholders. The legislature has spoken that the spirit and structure of MFW will only apply to “go private” transactions, whereas in a non-“go private” transaction the controller needs to meet just one of the MFW prongs, and a disinterested director cleansing does not have to be “ab initio.” Note also that Section 144 provides that controllers are not liable for monetary damages for breaches of the duty of care.
New Section 144 also creates a new presumption that directors of public corporations that are deemed independent to the company under exchange rules are disinterested directors under Delaware law (and, if the director meets such independence criteria with respect to a controller, the director is presumed disinterested from such controller). To overcome this presumption, there must be “substantial and particularized facts” of a material interest or a material relationship with a person with a material interest in the act or transaction. Note that NYSE and NASDAQ independence is a somewhat different inquiry from director disinterestedness under Delaware corporate law. To qualify as independent for exchange purposes, directors cannot hold management positions at the company, its parents or subsidiaries, and former executives are not considered independent for three years after their departures. See Nasdaq Rule 5605 and NYSE Listed Company Manual 303A.02. A director also does not qualify as independent if the director or their families received more than $120,000 in compensation from the company in any 12-month period in the prior three years. In contrast, disinterestedness of a director under Delaware law has been historically a much more fact-and-circumstances inquiry, where judges have looked to things like co-owning an airplane, personal friendships and other “soft” factors.
Section 220. Under Section 220, a stockholder is entitled to examine a corporation’s “books and records” in furtherance of a “proper purpose” reasonably related to the person’s status as a stockholder. The use of this potent tool has proliferated through the years, with stockholders of Delaware corporations becoming increasingly savvy, sophisticated and demanding with their books and records demands to investigate potential corporate wrongdoings before filing suit. Delaware courts have encouraged the use of Section 220, in many cases urging stockholders to use the “tools at hand” ahead of filing suit, presumably with the hope of curtailing bad claims clogging up the docket.
The amended Section 220 limits the universe of what a stockholder may demand under Section 220. Prior to the amendments, a stockholder could pursue materials, even if not “formal board materials,” if they make particularized allegations of the existence of such materials and a showing that an investigation of the suspected wrongdoing was “necessary and essential.” The statute, as amended, limits the ability for stockholders to pursue materials such as personal director or officer emails that may have relevant information, which could be allowed under the prior regime. Under the amended Section 220, if what the stockholder seeks is not part of the nine types of “books and records” spelled out in the statute, the stockholder cannot have access to it in a Section 220 books and records demand.
Questions Going Forward
The amendments to Sections 144 and 220 collide with or directly overturn several Delaware caselaw precedents. The landscape has changed, and we will see how Delaware corporations and its constituents respond. From a transactional planning perspective, the safe-harbors of Section 144 provide much-needed guidance, but with limited caselaw overlay interpreting the boundaries of the safe-harbors, the structuring is not without risk.
Turning back to the backdrop of Senate Bill 21: does this fix the “DExit” concern? Perhaps. But these amendments undoubtedly swing the pendulum to the corporation, controller and management. Whether it is swinging back toward the center is up for debate, but what is not debatable is that preserving the Delaware corporate law franchise depends upon balance. Through the legislative process there were some institutional investors that opposed Senate Bill 21. We will see what kinds of moves, if any, investors of Delaware corporations will make going forward.
Finally, is Section 144 an “opt out” provision? The DGCL is a regime of mandatory statutes, enabling statutes, and default statutes one can opt in or out of. Returning to Section 102(b)(7), this exculpation provision is a well-known example of an opt-in, where a corporation has the option to add that exculpation clause to the company’s certificate of incorporation. Section 203, on the other hand, is an “opt out” statute where a corporation can choose not to have certain restrictions on business combinations with interested stockholders. In the legislative process, several prominent corporate law professors sought to have Senate Bill 21 revised such that it would be a charter “opt-in,” meaning that the default is the status quo, and companies (with stockholder approval) can adopt the controller transaction safe-harbor and books and records limitations in the new Sections 144 and 220. This proposal was ultimately not accepted, but there has been some mention that the text of the new Section 144 suggests it is actually an “opt out” statute. If that is the case, and investors do feel strongly about the Senate Bill 21 amendments, we may see stockholder proposals in the coming years for amendments to the corporate charter to opt out of the new Sections 144 and 220. We will watch the SEC Rule 14a-8 proposals in upcoming proxy cycles to see if this is the case.
FDA Can’t Stop, Won’t Stop – Navigating the New Administration [Podcast]
In this episode of Food & Chemicals Unpacked, we dive into the current adjustments experienced at the U.S. Food and Drug Administration (FDA) so far under the Trump administration. Keller and Heckman Partner George Misko joins us to discuss the future of food safety regulations, including the downsizing of HHS under Secretary Robert F. Kennedy Jr., potential changes to the GRAS process, and FDA’s ongoing post-market review program.
Staying Compliant in a Changing Landscape: I-9 Audit Best Practices for Employers
Ensuring compliance with Form I-9 requirements has never been more critical. With shifting immigration policies, heightened enforcement priorities, and the introduction of new executive orders, employers face increasing challenges in verifying employment eligibility accurately and lawfully. Mistakes in completing or maintaining I-9 forms can result in hefty fines, legal penalties, and reputational damage.
Employers should take swift action now to conduct I-9 audits given the Trump Administration’s immediate actions to change or influence U.S. immigration policies, to remove undocumented aliens from the U.S., and recent efforts to change programs governing who has authorization to remain or work in the U.S. Several of the Day One Executive Orders remind employers and immigrants that faithful execution of immigration laws of the U.S. is of utmost importance to the administration.
Also, the far-reaching Protecting The American People Against Invasion Executive Order revokes Biden-era immigration enforcement priorities, announces the obligation that anyone without immigration status registers with the U.S. government, and seeks to limit the use of parole and temporary protected status, among other immigration initiatives.
From an employer’s perspective, an individual lacking U.S. work authorization may include an individual who:
Crossed the border undetected and did not present documents at the time of hire,
Was asked for proof of identity and employment verification documentation and subsequently presented fake documents to secure employment, or
Initially entered lawfully or changed status lawfully, but overstayed their lawful status and work authorization lapsed, or
Was admitted to the U.S. under a lawful program or status administered under the previous administration, but that program was terminated, and work authorization has lapsed, but they have continued working.
Another Day One Executive Order Securing Our Borders – The White House indicates in Section 2 that the Trump administration will remove promptly all aliens who enter or remain in violation of Federal law, and Section 2(e) indicates the administration will pursue criminal charges against illegal aliens who violate the immigration laws; and against those who facilitate their unlawful presence. The executive order also instructs the Secretary of Homeland Security to take all appropriate action to terminate categorical parole programs including the parole program for Cubans, Haitians, Nicaraguans, and Venezuelans.
Based on a notice published in the Federal Register on March 25, 2025, the above-referenced temporary parolees whose parole has not already expired by April 24, 2025, will have status (and therefore work authorization) terminated as of that date. Similarly, those who have previously been granted Temporary Protected Status through the 2023 TPS designation for Venezuela are now in limbo following publication on February 5, 2025, of a Federal Register Notice ending the 2023 TPS designation for Venezuela. Although this action is being challenged in federal court, the employment authorization documents issued under that designation are set to expire on April 2, 2025.
With programs ending, enforcement priorities changing, and lawsuits determining the future of certain work authorization, it’s increasingly difficult for the most well-meaning employer to know whether their I-9s have been completed correctly.
Employers likely are familiar with the I-9 requirements, but based on the increased emphasis on enforcement, it’s worth reminding employers that by signing the I-9, employers are attesting under penalty of perjury the following:
That they have examined the documentation presented by the employee, and
The documentation appears to be genuine and to relate to the employee named,
To the best of their knowledge, the employee is authorized to work in the United States,
That the information they enter in Section 2 is complete, true, and correct to the best of their knowledge, and
That they are aware that they may face civil or criminal penalties provided by law and may be subject to criminal prosecution for knowingly and willfully making false statements or knowingly accepting false documentation when completing Form I-9.
Current instructions for the I-9 may be accessed here: Instructions for Form I-9, Employment Eligibility Verification.
As a reminder, it is unlawful for an employer to hire, recruit, or refer for a fee a foreign national knowing they are unauthorized to work in the U.S., and it is unlawful for a person or company to continue to employ a foreign national in the U.S. knowing they are(or have become) unauthorized to work in the U.S. Audits of I-9 Forms are one way for employers to see how well their teams are tracking expiration dates and maintaining records. Note that penalties for I-9 violations have been adjusted for inflation. Here is a representative selection of penalties:
Penalty
Legal Reference
New penalty as adjusted by the final rule
Civil Penalties for I-9 paperwork violations
8 CFR 274a.10(b)(2)
$288-$2,861
Civil penalties for knowingly hiring, recruiting, referral, or retention of unauthorized aliens—Penalty for first offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(A)
$716–$5,724 (first order)
Penalty for second offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(B)
$5,724–$14,308
Penalty for third or subsequent offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(C)
$8,586-$28,619
Document fraud (first offense)
8 CFR 270.3(b)(1)(ii)(A)
$590-$4730
Immediately Minimize Risk Through Preventative Measures.
Employers may minimize risk and fines or penalties by regularly conducting I-9 audits. Please see specific recommendations below.
Conduct Regular Self-Audits. Establish a cadence for scheduled self-audits either by the company or outside counsel.
Doing so ensures that employers are aware of any risk lurking within their I-9s in case the government were to issue a Notice of Inspection
A self-audit increases an employer’s odds of identifying and mitigating mistakes before they become an issue.
Remember, it is unlawful to continue to employ a foreign worker in the United States knowing they are (or have become) an unauthorized alien with respect to employment.
Monitor Updates. Prior to each self-audit, familiarize yourself with any updates to the Handbook for Employers M-274. For example, on March 26, 2025, USCIS announced that Section 7.4.2 of the M-274 Handbook was updated to reflect a DHS final rule automatically extending the duration of status and any employment authorization granted under 8 CFR C.F.R. 274a.12(c)(3)(i)(B) or (C) for an F-1 student who is the beneficiary of an H-1B petition requesting a change of status.
Does the person who conducts your I-9 inspections, know of this change? How do the appropriate resources on your team find out about changes to ensure compliance?
Does your team have the tools needed to perform their job? Do they have access to outside counsel?
Attend Training. USCIS offers Employment Eligibility Webinars. Take advantage of same. See Employment Eligibility Webinars | USCIS. If you have outside Counsel, have them conduct a training for your team whenever you have a change in your team who handles I-9s.
Roster of Employees. Ensure you have a complete and updated roster of employees, including former employees who left less than 1 year ago.
Retention Schedule. Ensure you are not maintaining I-9s for any longer than needed- once an employee leaves, calculate when you may stop retaining the I-9. It must be maintained for three years after the date of hire, or one year after the date employment ends, whichever is later.
Remain Diligent. Ensure signatures aren’t missed and sections aren’t blank. Do not back date documents. Know who to go to if you have questions.
Involved With a Delaware Corporation? Three Major Changes to Know
On March 25, 2025, Delaware Governor Matt Meyer signed Senate Bill 21 into law, effecting significant changes to the General Corporation Law of the State of Delaware (DGCL), the statutory law governing Delaware corporations. With over two-thirds of Fortune 500 companies domiciled in Delaware, it continues to be the preferred state of incorporation for businesses drawn to its modern statutory law, renowned Court of Chancery, and developed case law.
Consequently, below are three major takeaways for businesses incorporated in Delaware or individuals involved with a Delaware corporation—as a director, officer, or stockholder—here are three major takeaways:
1. Procedural Safe Harbor Cleansing Related Party Transactions
Under Delaware corporate law, related party transactions involving a fiduciary, such as where a director of a corporation stands on both sides of a transaction, are potentially subject to the entire fairness standard of review. This onerous standard of reviewing a fiduciary’s actions in certain conflicted transactions places the burden on the fiduciary to prove that the self-dealing transaction was fair—both in terms of the process (fair dealing) and substantive (fair price)—given corporate law theory that the fiduciary’s interests may not be aligned with maximizing stockholder value.
Senate Bill 21 establishes a safe harbor pursuant to Section 144 of DGCL for these conflicted transactions (other than take-private transactions) if the transaction is approved by either:
A majority of the disinterested members of the board or
A majority of the votes are cast by the disinterested stockholders—in each case, subject to certain additional requirements. Consequently, if transactional planners and corporations follow the new procedural safe harbor when entering certain related party transactions, they greatly minimize the likelihood of a successful challenge of any breach of fiduciary duty claim against the corporation’s board.
2. Limiting Who Qualifies as a Controlling Stockholder
Prior to the enactment of Senate Bill 21, whether a stockholder was a “controlling stockholder” and was therefore subject to certain rules under Delaware corporate law, was not set forth in DGCL. Rather, Delaware case law helped transactional planners to determine if a stockholder would be treated as such.
Senate Bill 21 codifies the definition of this term in Section 144 of DGCL. Under the revised Section 144, a “controlling stockholder” is a stockholder who:
Controls a majority in voting power of the outstanding stock entitled to vote generally in the election of directors;
Has the right to control the election of directors who control the board; or
Has the functional equivalent of majority control by possessing at least one-third in stockholder voting power and power to exercise managerial authority over the business of the corporation. This update provides transactional planners and corporations with clear guidelines over who qualifies as a controlling stockholder.
3. Narrowing Stockholder Information Rights
Over the past years, many Delaware corporations have been subject to an increasing number of “Section 220 demands” and related litigation that is often expensive for corporations to handle. Section 220 of DGCL provides stockholders with a statutory right to inspect a corporation’s books and records if the stockholder satisfies certain requirements.
Senate Bill 21 amends Section 220 of DGCL by narrowing what books and records of a corporation the stockholder is generally entitled to review after satisfying certain requirements. Specifically, the term “books and records,” as defined in Section 220 of DGCL, is now limited to certain organizational and financial documents of the corporation, including its annual financial statements for the preceding three years, board minutes, stockholder communication, and other formal corporate documents. Additionally, a stockholder’s demand must describe with “reasonable particularity” its purpose and requested books and records, and such books and records must be “specifically related” to the proper purpose.
In summary, Senate Bill 21’s amendments to DGCL give transactional planners and corporations additional clarity over cleansing conflicted transactions, who qualifies as a controlling stockholder, and the books and records a stockholder may access under Section 220.
“No Robo Bosses Act” Proposed in California to Limit Use of AI Systems in Employment Decisions
A new bill in California, SB 7, proposed by State Senator Jerry McNerney, seeks to limit and regulate the use of artificial intelligence (AI) decision making in hiring, promotion, discipline, or termination decisions. Also known as the “No Robo Bosses Act,” SB 7 applies a broad definition of “automated decision system,” or “ADS,” as: any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues simplified output, including a score, classification, or recommendation, that is used to assist or replace human discretionary decision making and materially impacts natural persons. An automated decision system does not include a spam email filter, firewall, antivirus, software, identity and access management tools, calculator, database, dataset, or other compilation of data.
Specifically, SB 7 would:
Require employers to provide a plain-language, standalone notice to employees, contractors, and applicants that the employer is using ADS in employment-related decisions at least 30 days before the introduction of the ADS (or by February 1, 2026, if the ADS is already in use).
Require employers to maintain a list of all ADS in use and include that list in the notice to employees, contractors, and applicants.
Prohibit employers from relying primarily on ADS for hiring, promotion, discipline, or termination decisions.
Prohibit employers from using ADS that prevents compliance with or violates the law or regulations, obtains or infers a protected status, conducts predictive behavior analysis, predicts or takes action against a worker for exercising legal rights, or uses individualized worker data to inform compensation.
Allow workers to access the data collected and correct errors.
Allow workers to appeal an employment-related decision for which ADS was used, and require an employer to have a human reviewer.
Create enforcement provisions against discharging, discriminating, or retaliating against workers for exercising their rights under SB 7.
Similar to SB 7, the California Civil Rights Council has proposed regulations that would protect employees from discrimination, harassment, and retaliation related to an employer’s use of ADS. The Civil Rights Council identifies several examples, such as predictive assessments that measure skills or personality trainings and tools that screen resumes or direct advertising, that may discriminate against employees, contractors, or applicants based on a protected class. The proposed rule and SB 7 would work in tandem, if both are passed through their respective government bodies.
The bill is still in the beginning stages. It is set for its first committee hearing — Senate Labor, Public employment, and Retirement Committee — on April 9, 2025. How the bill may transform before (and if) it becomes law is still unknown, but because of the potential reach of this bill and the possibility other states may emulate it, SB 7 is one to watch.
Federal Agencies Cracking Down on DEI/DEIA
In the first two months of President Trump’s second term, his administration has engaged in a full-throated repudiation of “illegal” diversity, equity, and inclusion (“DEI”) and diversity, equity, inclusion, and accessibility (“DEIA”) programs.1
The Trump Administration issued a January 21, 2025 executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (“EO 14173” – click here to read our recent client alert on this executive order). Since then, the Attorney General issued a memo titled “Ending Illegal DEI and DEIA Discrimination and Preferences”, the Office of Personnel Management issued a memo titled “Further Guidance Regarding Ending DEIA Offices, Programs and Initiatives ”(the OPM memo”), and the Equal Employment Opportunity Commission and Department of Justice jointly issued a set of FAQs titled “What You Should Know About DEI-Related Discrimination at Work”.
Executive orders are directives to federal agencies and officials that must be followed but are not binding on those outside the government without legislative action. Inter-governmental memos and FAQs are also not binding on those outside the federal government. Nevertheless, the EOs and related documents give us insight into the direction the administration intends to take.
But what is an “illegal” DEI program? To date, this Administration has provided no guidance regarding what makes a DEI program illegal or even what constitutes a “DEI program.” Despite the lack of clarity, however, the law relating to DEI programs has not changed—if a DEI program was lawful under federal antidiscrimination laws on January 19, 2025, it remains lawful today.
Nevertheless, the lack of guidance, paired with the clear language this administration has used to vilify DEI programs in general, has caused fear, confusion, and uncertainty within organizations, leading some to eliminate DEI programs and/or scrub their websites of all references to DEI programs. Doing so, however, could subject an employer to employee backlash, including claims of discrimination, as well as public calls for boycott. Before deciding whether to eliminate, maintain, or enhance your diversity and inclusion programs, we recommend the following:
Assess your risk tolerance.
Understand the laws in your state. Although this administration has signaled it expects compliance with its directives regardless of state law, the states may not agree.
Document the lawful purpose behind diversity and inclusion programs.
Document employment decisions carefully, setting forth the legitimate business reasons behind the decisions and showing that decisions are based on merit without regard to any protected characteristics.
Review your diversity and inclusion policies, programs, and training materials, including all public-facing DEI-related communications and disclosures. Consider whether to conduct this review under the umbrella of attorney-client privilege.
Review your investigation protocols, to encompass complaints and concerns about DEI programs and “DEI-related discrimination.”
Develop internal and external communications strategies, to mitigate legal risks while staying true to your culture and values.
Closely monitor legal developments.
Some DEI programs may contain elements that could be challenged under the law that existed on January 19, 2025, before President Trump’s second term began. Consider immediately eliminating those elements, which may include the following,
Employee resource groups/affinity groups that are only open or provide benefits to employees based on specific protected characteristics.
Scholarship, fellowship, internship, mentoring, and other professional development opportunities that are limited to or targeted at members of specific protected characteristics.
Goals, targets, or quotas based on protected characteristics.
Compensation targets based on the achievement of DEI objectives or goals.
Our team will continue to track and analyze significant directives and policy changes as they are announced. For further information, contact the authors of this alert or your WBD attorney.
1 For purposes of this Alert, both DEI and DEIA programs will be used interchangeably.