Election Law / Legislative News – Page 2

The State of Employment Law: Eight States Require Final Pay on the Termination Date

It’s time to terminate an employee. Perhaps they were a consistently poor performer, and you have known for months that this day would come. Or perhaps an employee committed gross misconduct today and the need for termination is sudden and unexpected. Either way, are you prepared to pay your terminated employee their final paycheck right away? In eight states, you need to be.
Most states allow employers a reasonable time to pay a terminated employee their final wages. The next regularly-scheduled payday is a common deadline, but even less-patient states tend to give employers at least several days to pay final wages. But California, Colorado, Hawaii, Massachusetts, Minnesota, Missouri, Montana, and Nevada all require employers to pay final wages to an employee on the date of their termination.
There are a few caveats to this rule. In Colorado and Hawaii, if an employer’s payroll unit is not operational on the termination date or there is some other circumstance that makes immediate payment impossible, the employer may have until the following business day to pay. In Massachusetts, employers in Boston may wait to pay until payrolls, bills, and accounts are certified. Otherwise, employers in these states need to be prepared to pay final wages on the termination date without exception.
This can put employers in a logistical bind. What do you do, for example, if an employee punches a coworker at 4:55 before you close for the day at 5:00 and your payroll staff is already gone for the day? In situations like this, you may need to wait until the following day to terminate your fighting employee.

Foley Automotive Update- 15 May 2025

Trump Administration and Tariff Policies

The U.S. lowered the base level of duties on most Chinese goods to 30% from 145%, and China cut its levies on many U.S. products to 10% from 125% as part of a 90-day tariff pause scheduled between the nations that is to take effect this week.
A U.S.-UK trade deal announced May 8 would allow imports of 100,000 vehicles annually by UK car manufacturers under a 10% “reciprocal tariff,” with additional vehicles subject to 25% levies. The American Automotive Policy Council expressed disappointment that in certain instances, “it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts.”
A U.S. Customs and Border Protection guidance document for the auto parts tariffs that took effect May 3 indicated that US-Mexico-Canada Agreement (USMCA)-compliant parts have a “0 percent additional ad valorem rate of duty.” The duration of this exemption is unknown.
A pair of executive orders announced on April 29 will ease some of the impact of certain automotive import tariffs. One order will establish a complex system of temporary and partial reimbursements for certain tariffed auto parts, and another order indicates tariffed vehicles and auto parts will not “stack” on other levies, such as the 25% duty on steel and aluminum. One large supplier quoted in Automotive News indicated the orders were a positive step, while an unnamed major supplier stated the tariff revisions were “not cause for celebration” as the industry will still encounter significantly higher operational costs. An analyst from Wedbush described the revised tariffs as a “gut punch” for the auto industry.
May 16, 2025 is the deadline for submitting public comments regarding the Trump administration’s Section 232 investigation into imports of processed critical minerals and their derivative products.

Automotive Key Developments

Automotive News provided updates on suppliers’ concerns regarding the potential for lower production volumes this year as a result of automotive import tariffs, as well as the challenges of assessing USMCA-compliant content in vehicles.
GM estimated the Trump administration’s tariffs could increase its costs by up to $5 billion this year, and potentially reduce 2025 net profit by up to 25% year-over-year. The automaker expects to offset its projected tariff exposure by roughly 30% through spending reductions and shifting more supplies and manufacturing to the U.S. In 2024, GM imported more vehicles into the U.S. than any other automaker.
Japanese automakers could collectively experience a $19 billion impact from U.S. import tariffs, according to analysis from Bloomberg.
Toyota and Honda projected annual net profit declines of 35% and 70%, respectively, for fiscal year ending March 2026, if U.S. automotive import tariffs are maintained. Toyota estimated its tariff impact reached $1.3 billion within just two months, while Honda expects an annual tariff impact of up to $3 billion.
Ford projected a $2.5 billion impact from tariffs in 2025, but noted it plans to offset up to $1 billion of the costs.
Revised analysis from the Anderson Economic Group estimates the Trump administration’s current automotive tariff policies will raise vehicle costs from $2,000 to $15,000.
U.S. new light-vehicle inventory is down by an estimated 24% year-over-year, representing a 61 days’ supply, following robust sales in April.
Kelley Blue Book estimated the U.S. new light-vehicle average transaction price (ATP) rose 2.5% in April 2025 from March. New-vehicle sales incentives fell to 6.7% of ATP last month, down from 7% in March and compared to a pre-pandemic norm of roughly 10%.
The U.S. House Ways and Means Committee included a measure to eliminate consumer tax credits of up to $7,500 for a new EV and $4,000 for a used EV at the end of 2025 in the “Big, Beautiful” tax package introduced on May 12. The initial proposal would extend new EV tax credits until the end of 2026 for automakers that sold less than 200,000 EVs in the U.S. between 2010 and 2025.
California and 16 other states filed a lawsuit over the Trump administration’s suspension of the $5 billion National Electric Vehicle Infrastructure (NEVI) program created by the 2021 Bipartisan Infrastructure Law.
The U.S. House on May 1 passed the third of three Congressional Review Act resolutions to repeal Clean Air Act waivers issued by the Environmental Protection Agency for California’s vehicle emissions programs. A Senate vote related to the proposals has not yet been scheduled.
Federal Reserve Chair Jerome Powell cautioned the U.S. “may be entering a period of more frequent, and potentially more persistent, supply shocks” due to economic and trade policy uncertainty.

OEMs/Suppliers

First-quarter 2025 profitability dropped by 2.3% for Hyundai, 6.6% for GM, nearly 40% for Volkswagen, and over 60% for Ford.
Automakers that include Ford, Volvo, Stellantis and Mercedes recently suspended 2025 financial guidance due to tariff-related uncertainty.
Magna estimated its annual direct tariff costs will reach $250 million for 2025.
Nissan reported a net loss equivalent to $4.55 billion for its fiscal year ended March 31, 2025 due in part to restructuring charges. The automaker intends to cut 15% of its global workforce, and consolidate its global production base to 10 assembly plants from 17.
Ford plans to raise prices by as much as $2,000 on certain Mexico-produced models in response to U.S. import tariffs.
GM plans to eliminate a shift at its Oshawa Assembly plant in Ontario in response to “forecasted demand and the evolving trade environment.”
Aptiv plans to establish two new plants in China in the second half of this year that will produce high-voltage connectors and active safety products.
Stellantis plans to launch a lower-priced version of its U.S.-made Ram pickup truck later this year to boost sales and mitigate tariff exposure. The automaker previously shifted pickup truck production for certain models from Michigan to Mexico.

Market Trends and Regulatory

AlixPartners predicts Chinese brands will account for 30% of the global auto market by 2030, compared with 21% in 2024.
BYD has a goal to achieve 50% of its sales outside of China by 2030.
Congress voted to repeal an Environmental Protection Agency rule on National Emission Standards for Hazardous Air Pollutants related to rubber tire manufacturing.
According to a Gartner survey of 126 supply chain executives, 47% of respondents were renegotiating contracts with suppliers to mitigate the impact of tariffs.

Autonomous Technologies and Vehicle Software

Automotive News provided an overview of recent developments in autonomous driving.
Ford plans to cut 350 connected-vehicle software jobs in the U.S. and Canada, and the reductions account for roughly 5% of the total team, according to a report in The Detroit News.
Waymo will partner with Toyota to develop robotaxi technology for personally-owned vehicles. Waymo’s self-driving partnerships include Hyundai and China’s Geely.

Electric Vehicles and Low-Emissions Technology

U.S. EV sales declined by roughly 5% in April, amid a 10% YOY increase in overall new-vehicle sales. Global EV sales in April were up by an estimated 29% YOY, led by a 35% increase in China.
Honda will postpone a planned $11 billion investment in new EV factories in Ontario, Canada due to slowing demand in North America.
GM’s Orion Assembly Plant in Michigan may not operate as a fully electric vehicle factory as originally planned, according to unnamed sources in Crain’s Detroit.
The American and Chinese car markets are likely to diverge further due to differences in supply chain costs and consumer preferences, as well as the nations’ ongoing trade conflicts.
GM suspended a project with Piston Automotive to establish a $55 million hydrogen fuel cell plant in Detroit.
Stellantis delayed production of its first battery-electric Ram pickup truck until 2027.
Hyundai plans to launch a hydrogen production and dispensing facility for heavy-duty trucks in Georgia.
Toronto-based battery recycler Li-cycle is pursuing a sale of its business or assets.
Canadian electric truck and bus maker Lion Electric faces a “very high” likelihood of liquidation after the Quebec government decided not to support a public bailout.

Trump Administration Announces New Executive Order to Promote Domestic Production of Biopharmaceuticals

Key Takeaways

Regulatory Relief for U.S. Manufacturing: The EO streamlines FDA and EPA processes to encourage domestic pharmaceutical production.
Increased Scrutiny of Foreign Facilities: Foreign manufacturers face higher inspection standards and potential tariffs, raising supply chain risks.
Piece of the Puzzle: Manufacturing EO is paired with other executive orders on trade and bilateral trade agreements.
Uncertain Policy Landscape: Shifting regulations and trade policies create both opportunities and challenges for biopharma investment decisions.

On May 5, 2025, President Donald J. Trump signed an Executive Order (EO) titled “Regulatory Relief to Promote Domestic Production of Critical Medicines.” The order’s goal is to strengthen the U.S. pharmaceutical supply chain by streamlining regulatory processes, encouraging domestic manufacturing of pharmaceuticals and their inputs, and intensifying the inspection of pharmaceutical manufacturing facilities located outside of the United States.
The May 5 order is the carrot to accompany an expected tariff “stick” on pharmaceutical importations, which President Trump signaled would be forthcoming and appears to have materialized in the form of a just-announced most-favored-nation pharmaceutical pricing executive order. In addition, last month, the Trump Administration initiated a Section 232 investigation of pharmaceutical imports to determine whether imports of pharmaceuticals threaten to impair U.S. national security and therefore should be subject to tariffs or other measures. Taken together, the EO and proposed tariffs will make pharmaceuticals sourced outside the United States more expensive and, perhaps, subject to increased FDA-inspection scrutiny and potential supply disruptions.
The administration’s goal is to accelerate investment in U.S.-based manufacturing and thus onshore some of the manufacturing. This update provides a brief overview of the EO and discusses its potential short- and longer-term implications.
Key Provisions of the EO:
1. Streamlining FDA Regulations:

The EO tasks the United States Department of Health and Human Services (HHS) and U.S. Food and Drug Administration (FDA) with reviewing and eliminating duplicative or unnecessary regulations that hinder domestic pharmaceutical manufacturing.
The EO directs the FDA to maximize the timeliness and predictability of FDA review with the stated goal of accelerating the development of domestic pharmaceutical manufacturing of “pharmaceutical products, active pharmaceutical ingredients, key starting materials and associated raw materials.”
The EO instructs the FDA to work on expanding programs and guidance to provide early technical advice to domestic facilities before they are operational and to work to ensure domestic inspections “are prompt, efficient, and limited to what is necessary to ensure compliance with the Federal Food, Drug and Cosmetic Act (FDCA) and other Federal law.”

2. Enhancing Inspection of Foreign Manufacturing Facilities:

The EO directs the FDA to “develop and advance improvements to the risk-based inspection regime that ensures routine reviews of overseas manufacturing facilities involved in the supply of United States medicines.” The EO states that the increased inspections should be funded by increased fees on foreign manufacturing facilities.
The EO also directs the FDA to negotiate with countries to increase site inspections and increase the number of unannounced inspections of foreign manufacturing facilities that make pharmaceuticals or inputs to pharmaceuticals.

3. Environmental and Construction Permitting:

The EO instructs the Environmental Protection Agency (EPA) and the Army Corps of Engineers to review and streamline requirements and guidance documents related to permitting and building domestic manufacturing facilities, including by accelerating siting and permitting approvals.

Implications for Biopharma Leaders and Their Advisors
Go… But Ready and Steady? For leaders and lawyers considering investment in domestic manufacturing capabilities, the EO presents an opportunity, particularly if it offers a smoother, faster and more predictable route from investment to operation for domestic biopharmaceutical manufacturing facilities. However, even if the EO shortens the timeline from investment to commissioning of pharmaceutical manufacturing capacity, the timeline for developing and launching manufacturing facilities measures in years, not months. The Trump Administration’s policy framework, the EO and tariffs, have the benefit of quick implementation, but the drawback that they could be modified or undone by a stroke of the pen by this or another administration during the long lead time necessary to permit, build, inspect and commission new manufacturing facilities.
Good News for Biotech Investors Amidst Broader Uncertainty for Biopharmaceutical Investments. As our Polsinelli colleagues have noted, the HHS in general and the FDA in particular have been transformed in the first 100 days of the Trump Administration. The FDA has seen a reduction of approximately 3,500 employees to accompany a significant change in leadership and priorities. While the changes may create some new opportunities, there is a concern that the changes will bring delays in review and approval of new biopharmaceuticals, increase uncertainty and perhaps lead to executive oversight and prioritization that differs markedly from the past for certain types of therapies (e.g., vaccines). Some observers have correlated the policy changes to a decrease in venture-based funding to the biotech industry. This new EO may create incentives towards investment in manufacturing, but biotech companies and investors will be making decisions on manufacturing amidst broader uncertainty about whether new therapies that could be manufactured in new U.S. facilities will be approved on a timely basis.
Potential for Supply Chain Disruptions. The global supply chain for biopharmaceuticals is exceedingly complicated. Particularly for biologic medicines, the drug substance (i.e., Active Pharmaceutical Ingredients, or API) for any given drug might be made in a bioreactor in Country A. The drug product (i.e., excipients) might be made at a facility in Country B. Syringes or subcutaneous injection devices might be manufactured in Country C. Filling and finishing the drug into vials, syringes, or subcutaneous injection devices might occur in Country D. Moreover, due to the limited tight supply of manufacturing capacity and the limited shelf life of pharmaceuticals, biotech companies may schedule slots in third-party manufacturing facilities over a year in advance. If, as the EO contemplates, the FDA increases the frequency and intensity of manufacturing facility inspections outside the United States, there is a real chance for supply chain disruptions that could lead to stock-outs of pharmaceuticals. For instance, data from the Association for Accessible Medicines (AAM) suggests that only 13% of API is manufactured in the U.S., meaning that the U.S. is heavily reliant on ex-U.S. suppliers. For instance, 40% of finished doses are made in the U.S., including from APIs produced outside the U.S. See AAM Testimony on the Generic Global Supply Chain. Biotech executives and their counsel will do well to fortify their supply chains and seek reassurance from manufacturing partners that their foreign facilities are ready for enhanced FDA inspection.
Which Nations Find Favor? As we prepared this update on manufacturing, the Trump Administration announced a most-favored nation executive order on pharmaceutical pricing on May 12, 2025. “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (MFN EO). The MFN EO authorizes the HHS to communicate price targets to pharmaceutical manufacturers within 30 days, to facilitate programs to allow U.S. patients to purchase medications directly from manufacturers, and to expand drug reimportation programs. Industry reactions have been swift, with Pharmaceutical Research and Manufacturers of America (PhRMA) CEO Stephen J. Ubl stating that “Importing foreign prices from socialist countries would be a bad deal for American patients and workers.” It is reasonable to expect that the MFN EO will be subject to litigation.
The MFN EO appears to be another layer in a multi-layered approach to tariffs on pharmaceuticals and biologics. On May 8, the Trump Administration announced a bilateral trade agreement with Great Britain. The ink is barely dry, but the White House’s fact sheet states that the agreement will “create a secure supply chain for pharmaceutical products.” May 8, 2025, White House Fact Sheet. In contrast, tariffs on Chinese imports remain high, and passage of the BIOSECURE Act, a bill pending in Congress, remains possible. The BIOSECURE Act would erect further barriers to biopharmaceuticals manufactured in China. In short, the Trump Administration’s policy on ex-U.S. foreign pharmaceutical manufacturing may become more complicated still, with certain countries granted more favorable tariff treatment and others disfavored or barred entirely.
Future Outlook and Industry Response
This EO intends to promote U.S.-based pharmaceutical manufacturing in the name of improving public health and protecting national security. The policy presents an opportunity for the U.S. biopharmaceutical industry over the medium and long term, but its implementation and effects, particularly amidst other policy changes, are hard to discern today. Change has been a constant in the Trump Administration. In the short term, stakeholders in the pharmaceutical industry should closely monitor regulatory developments and assess their supply chains to ensure that they are well-positioned to continuously meet the needs of patients and healthcare providers.

Virginia Will Add to Patchwork of Laws Governing Social Media and Children (For Now?)

Virginia’s governor recently signed into law a bill that amends the Virginia Consumer Data Protection Act. As revised, the law will include specific provisions impacting children’s use of social media. Unless contested, the changes will take effect January 1, 2026. Courts have struck down similar laws in other states (see our posts about those in Arkansas, California, and Utah) and thus opposition seems likely here as well. Of note, the social media laws that have been struck down in other states attempted to require parental consent before minors could use social media platforms. This law is different, as it allows account creation without parental consent. Instead, it places restrictions on account use for both minors and social media platforms.
As amended, the Virginia law will require social media companies to use “commercially reasonable” means to determine if a user is under 16. An example given in the law is a neutral age gate. The age verification is similar to those proposed other states’ social media laws. (And it was that requirement that was central to the court’s decision when striking down Arkansas’ law.) Use of social media by under-16s will default to one hour per day, per app. Parents can increase or decrease these time limits. That said, the bill expressly states that there is no obligation for social media companies to give those parents who give their consent “additional or special access” or control over their children’s accounts or data.
The law will limit use of age verification information to only that purpose. An exception is if the social media company is using the information to provide “age-appropriate experiences” – thought the bill does not explain what such experiences entail. Finally of note, even though these provisions may increase costs on companies, the bill specifically prohibits increasing costs or decreasing services for minor accounts.
Putting it Into Practice: We will be monitoring this law to see if the Virginia legislature has success in regulating children’s use of social media. This modification reflects not only a focus on children’s use of social media, but also continued changes to US State “comprehensive” privacy laws.
James O’Reilly contributed to this article

In the Fight Against Noncompete Agreements, Florida Chooses Employers

The Florida Legislature passed the “Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act” last month to provide employers two new outlets for protecting confidential information and client relationships from departing employees. Notably, the CHOICE Act does not change or limit Florida’s existing restrictive covenant law but rather expands it to provide a covered garden leave agreement and a covered noncompete agreement. If signed by Gov. Ron DeSantis, the law will go into effect on July 1, 2025.
Key Highlights

The act creates a presumption that garden leave agreements and noncompete agreements adhering to its “covered” guidelines are enforceable and do not violate public policy.
The act requires courts to issue a preliminary injunction against employees who seek to violate a “covered” agreement.
To have the injunction dissolved or modified, the “covered” employee must establish either:

The employee will not perform similar work during the covered period or use the confidential information or customer relationships of the covered employer.
The employee will not engage in the same business or activity as the covered employer within the restricted area.
The employer has failed to pay the covered employee the compensation contemplated under the covered agreement and has had a reasonable amount of time to cure the deficiency.

Who Is Covered?
A “covered employee” is defined as an employee or individual who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of either: (1) the county in which the employer has its principal place of business or (2) if the employer’s principal place of business is not in Florida, the county in which the individual resides. However, the law will not apply to healthcare practitioners licensed under Florida law.
A “covered employer” is defined as an entity or individual who employs or engages a covered employee.
What Are the Requirements?
Covered Garden Leave Agreement
A garden leave agreement allows an employer to prevent a departing employee from engaging in other employment provided the employee is still being paid. The period between the employee’s resignation and dissolution from the employer’s payroll is known as the “notice period.” Under the CHOICE Act, a garden leave agreement is enforceable if:

The employee cannot be required to provide services to their employer after the first 90 days of the notice period.
The employee may engage in nonwork activities at any time, including during normal business hours, during the remainder of the notice period.
The employee may work for another employer while still employed by the covered employer with the covered employer’s permission.
The employer will pay the employee their regular base salary plus benefits for the duration of the notice period.
The notice period will not extend beyond four years. However, an employer may choose to shorten the notice period at its discretion by providing the employee with 30 days advance written notice.

Covered Noncompete Agreements
Noncompete agreements prohibit an employee from providing services similar to the services provided to their employer for a period of time within a specific geographic region after the end of their employment. Under the CHOICE Act, a noncompete agreement is enforceable if:

The employee was provided the agreement seven days before the agreement or offer of employment expired and was advised in writing of their right to seek counsel.
The employee acknowledges in writing they will receive confidential information or customer relationships during their employment.
The noncompete period does not exceed four years.
The noncompete period is reduced for the duration of any non-working portion of the notice period of any applicable garden leave agreement between the covered employee and covered employer.

What Should Employers Do?

Review existing agreements for compliance with the act and consider revisions.
Remember these agreements may be introduced during the course of employment provided the employee still has seven days to consider signing the agreement before the offer expires.

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Costco’s Internal Investigation Confidentiality Restrictions Deemed Unlawful

On May 5, 2025, an Administrative Law Judge (“ALJ”) for the National Labor Relations Board (“NLRB” or the “Board”) ruled that retailer Costco Wholesale Corp. (“Costco”) violated the National Labor Relations Act (“NLRA” or the “Act”) when it asked employees involved in an internal investigation regarding sexual harassment allegations to sign a confidentiality agreement prohibiting them from discussing details concerning the investigation. The ALJ’s decision highlights considerations employers ought to take into account when balancing their interests in maintaining the integrity of internal investigations and complying with the NLRA.
A female employee at Costco’s Winston-Salem, North Carolina location submitted an internal complaint in August 2022, accusing a male coworker of sexual harassment. The employee spoke with several of the store’s managers about her complaint, one of whom presented the employee with a copy of Costco’s Acknowledgement of Confidentiality for Investigations form (the “Acknowledgment”) to sign. The Acknowledgment included a provision stating that the employee agreed “to maintain the confidentiality regarding this ongoing investigation.” The Acknowledgment also contained a provision requiring the employee to represent that she did not record any part of the investigation interview, as well as a provision stating that any violation of the terms of the Acknowledgment by the employee “may result in disciplinary action up to and including termination.”
Costco investigated the employee’s complaints in the following weeks and presented each employee interviewed with an identical copy of the Acknowledgment to sign. Costco concluded its investigation in March 2023, at which time a Costco Vice President sent the employee who submitted the complaint a letter advising her of the results of the investigation, including that the employee accused of harassment was no longer employed, and requesting that the employee treat the information in the letter as confidential.
The General Counsel for the NLRB alleged that the provisions in the Acknowledgment requiring the employees to maintain confidentiality of the investigation and refrain from recording any part of the investigation interviews, as well as the Costco Vice President’s confidentiality request in his March 2023 letter, violated Section 8(a)(1) of the NLRA by interfering with, restraining, and/or coercing employees in the exercise of their rights under Section 7 of the Act. The ALJ agreed with the General Counsel, holding in a May 5, 2025, decision that the complained-of provisions in the Acknowledgment were overly broad and that the Costco Vice President’s instructions in his letter impermissibly prevented the employee from disclosing or discussing matters affecting her and/or other employees’ terms and conditions of employment, both in violation of the Act.
The ALJ applied the Board’s Stericycle standard to the confidentiality provision in the Acknowledgment. Under the Stericycle standard, there is no presumption that an employer’s interest in maintaining the confidentiality of its internal investigations outweigh the impact a policy or work rule may have on employees’ exercise of Section 7 rights. Rather, the General Counsel must “prove that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights.” If the General Counsel carries this burden, the rule is presumptively unlawful, and the employer may only avoid a finding that it violated the act if it shows that the rule “advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.”
Applying the Stericycle standard, the ALJ concluded that the confidentiality provision in the Acknowledgment had a reasonable tendency to chill employees in the exercise of their Section 7 rights, highlighting that the Acknowledgment contained a blanket prohibition regarding employee communications about the ongoing investigation and warned employees of disciplinary consequences for failing to comply with the confidentiality restrictions. The ALJ also rejected Costco’s argument that the confidentiality provision was necessary to protect the integrity of its investigation, reasoning that its terms were (1) unlawfully overbroad because they required the employees to maintain confidentiality regarding information beyond the scope of what they learned or provided to Costco during the investigation process, and (2) not appropriately limited in time, as they could reasonably be interpreted as extending confidentiality restrictions beyond the conclusion of the investigation.
The ALJ similarly held that the Vice President’s instructions in his March 2023 letter violated the Act because they required the employee who submitted the harassment complaint to keep information about the investigation confidential after its conclusion. Further, the ALJ explained that the no-recording provision of the Acknowledgement violated the Act because it was broad enough to prohibit not only recording of the investigation interviews, but also any other conversations between employees and management, subject to the threat of discipline.
This decision adds to the recent scrutiny of employers’ confidentiality practices and raises additional considerations employers must balance in their efforts to protect the integrity of internal investigations while complying with federal labor law. Employers should examine their practices regarding employee obligations in connection with internal investigations to determine whether they are appropriate and reasonable in scope and time.
Employers should also continue monitoring for developments to Board law on this topic, as it is not yet clear how the Board’s approach to employers’ confidentiality practices will shift under the new administration. Though the Board currently applies the Stericycle standard to determine the legality of workplace rules, the new administration will likely overturn the Biden-era Stericycle decision, which was issued in 2023, and revert to the more employer-friendly Boeing standard that was established in 2017, during the first Trump Administration.
Under Boeing, the Board assesses whether work rules are lawful to maintain by analyzing the nature and extent of the rule’s potential impact on employees’ rights and the employer’s legitimate business justifications for the rule. Based on this analysis, the Board uses the Boeing standard to place rules in one of three categories—Category 1, 2, or 3—depending on whether they are always lawful to maintain, require case-by-case analysis, or are always unlawful to maintain. Unlike under Stericycle, the Board does not presume that a work rule is unlawful if the General Counsel proves that the rule has a reasonable tendency to chill employees from exercising their Section 7 rights when applying the Boeing standard. Employers favor the Boeing standard because it provides them with predictability and certainty when drafting work rules and gives greater weight to employers’ interests in maintaining workplace order through those rules.
While the Board’s reinstatement of the Boeing standard would be a welcome change for employers, it would not eliminate the concerns raised by the Costco decision entirely. Regardless of the standard in place governing the legality of work rules, employers will need to carefully consider how to appropriately balance promoting legitimate confidentiality interests and employees’ rights under the NLRA in order to avoid infringing upon those rights.

Utah Enacts AI Amendments Targeted at Mental Health Chatbots and Generative AI

Utah is one of a handful of states that has been a leader in its regulation of AI. Utah’s Artificial Intelligence Policy Act[i] (“UAIPA”) was enacted in 2024 and requires disclosures relating to consumer interaction with generative AI with heightened requirements on regulated professions, including licensed healthcare professionals.
Utah recently passed three AI laws (HB 452, SB 226 and SB 332), all of which became effective on May 7, 2025, and either amend or expand the scope of the UAIPA. The laws govern the use of mental health chatbots, revise disclosure requirements for the deployment of generative AI in connection with a consumer transaction or provision of regulated services, and extend the repeal date of the UAIPA.
HB 452
HB 452 creates disclosure requirements, advertising restrictions, and privacy protections for the use of mental health chatbots. [ii] “Mental health chatbots” refer to AI technology that (1) uses generative AI to engage in conversations with a user of the mental health chatbot, similar to communications one would have with a licensed therapist, and (2) a supplier represents, or a reasonable person would believe, can provide mental health therapy or help manage or treat mental health conditions. “Mental health chatbots” do not include AI-technology that only provides scripted output (such as guided meditations or mindfulness exercises).
Disclosure Requirements
A mental health chatbot must clearly and conspicuously disclose that the mental health chatbot is an AI technology and not human. The disclosure must be made (1) before the user accesses features of the mental health chatbot, (2) at the beginning of any interaction with the user, if the user has not accessed the mental health chatbot within the previous 7 days, and (3) if asked or prompted by the user whether AI is being used.
Personal Information Protections
Mental health chatbot suppliers may not sell or share with any third party the individually identifiable health information (“IIHI”) or user input of a user. The prohibition does not apply to IIHI that (1) a health care provider requests with the user’s consent, (2) is provided to a health plan upon the request of the user, or (3) is shared by the supplier as a covered entity to a business associate to ensure effective functionality of the mental health chatbot and in compliance with the HIPAA Privacy and Security Rules.
Advertising Restrictions
A mental health chatbot cannot be used to advertise a specific product or service to a user in a conversation between the user and the mental health chatbot, unless the mental health chatbot clearly and conspicuously (1) identifies the advertisement as an advertisement and (2) discloses any sponsorship, business affiliation or agreement with a third party to promote or advertise the product or service. Suppliers of mental health chatbots may not use a user’s input to (1) determine whether to display advertisements to the user unless the advertisement is for the mental health chatbot itself, (2) customize how advertisements are presented, or (3) determine a product, service or category to advertise to the user.
Affirmative Defense
HB 452 establishes an affirmative defense to violations of the law which requires, among other items, creating, maintaining and implementing a policy for the mental health chatbot that meets specific requirements outlined in the law and filing such policy with the Utah Division of Consumer Protection.
Penalties
Violation of the law may result in administrative fines up to $2,500 per violation and court action by the Utah Division of Consumer Protection.
SB 226
SB 226 pares back UAIPA’s disclosure requirements applicable to a supplier that uses generative AI in a consumer transaction to when (1) there is a “clear and unambiguous” request from an individual to determine whether an interaction is with AI, rather than any request, and (2) an individual interacts with generative AI in the course of receiving regulated services that constitute a “high-risk” AI interaction, instead of any generative AI interaction in the provision of regulated services.[iii]
Disclosure Requirements
If an individual asks or prompts a supplier about whether AI is being used, a supplier that uses generative AI to interact with an individual in connection with a consumer transaction must disclose that the individual is interacting with generative AI and not a human. While this requirement also existed under the UAIPA, SB 226 clarifies that disclosure is only required when the individual’s prompt or question is a “clear and unambiguous request” to determine whether an interaction is with a human or AI.
The UAIPA also requires persons who provide services of a regulated occupation to prominently disclose when a person is interacting with generative AI in the provision of regulated services, regardless of whether the person inquires if they are interacting with generative AI. Under SB 226, such disclosure is only required if the use of generative AI constitutes a “high-risk artificial intelligence interaction.” The disclosure must be provided verbally at the start of a verbal conversation and in writing before the start of a written interaction. “Regulated occupation” means an occupation that is regulated by the Utah Department of Commerce and requires a license or state certification to practice the occupation, such as nursing, medicine, and pharmacy. “High-risk AI interaction” includes an interaction with generative AI that involves (1) the collection of sensitive personal information, such as health or biometric data and (2) the provision of personalized recommendations, advice, or information that could reasonably be relied upon to make significant personal decisions, including the provision of medical or mental health advice or services.
Safe Harbor
A person is not subject to an enforcement action for violation of the required disclosure requirements if the person’s generative AI clearly and conspicuously discloses at the outset of and throughout an interaction in connection with a consumer transaction or the provision of regulated services that it is (1) generative AI, (2) not human, or (3) an AI assistant.
Penalties
Violation of the law may result in administrative fines up to $2,500 per violation and a court action by the Utah Division of Consumer Protection.
SB 332
SB 332 extended the repeal date of the UAIPA from May 1, 2025 to July 1, 2027.[iv]
Looking Forward
Companies that offer mental health chatbots or generative AI in interactions with individuals in Utah should evaluate their products and processes to ensure compliance with the law. Furthermore, the AI regulatory landscape at the state level is rapidly changing as states attempt to govern the use of AI in an increasingly deregulatory federal environment. Healthcare companies developing and deploying AI should monitor state developments.
FOOTNOTES
[i] S.B. 149 (“Utah Artificial Intelligence Policy Act”), 65th Leg., 2024 Gen. Session (Utah 2024), available here.
[ii] H.B. 452, 66th Leg., 2025 Gen. Session (Utah 2025), available here.
[iii] S.B. 226, 66th Leg., 2025 Gen. Session (Utah 2025), available here.
[iv] S.B. 332, 66th Leg., 2025 Gen. Session (Utah 2025), available here.
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Todd Snyder Fined for Technical CCPA Violations

The California Consumer Privacy Protection Agency (CPPA) Board issued a stipulated final order against Todd Snyder, Inc., a clothing retailer based in New York, requiring the company to pay a $345,178 fine and update its privacy program to settle allegations that it violated the California Consumer Privacy Act (CCPA). Specifically, Todd Snyder must update its methods for submitting and fulfilling privacy requests and provide training to its staff about CCPA requirements. Todd Snyder is also required to maintain a contract management and tracking process so that required CCPA contractual terms are included in contracts with third parties with access to or receipt of personal information.
The CPPA alleged that Todd Snyder violated the CCPA as follows:

Its consumer privacy rights request process collected much more information than necessary to fulfill privacy requests. Specifically, the privacy portal on Todd Snyder’s website used by consumers to submit privacy rights requests required consumers to provide their first and last name, email, country of residence, and a photograph of the consumer holding the consumer’s “identity document” (such as a driver’s license or passport which is considered “sensitive information” under the CCPA), regardless of the type of privacy request. The sensitive information is unnecessary to exercise a request to opt-out of the sale and/or sharing of personal information.
It failed to oversee and properly configure its third-party consumer privacy request portal for 40 days. The Todd Snyder website utilizes third-party tracking technologies, including cookies, pixels, and other trackers that automatically send data about consumers’ online behavior to third-party companies for analytics and behavioral advertising. The CPPA alleges that the opt-out mechanism on the website was not properly configured for a 40-day period. During that period, if the consumer clicked on the cookie preferences link on the website, a pop-up appeared, but then immediately disappeared, making it impossible for the consumer to opt-out of the sale or sharing of their personal information.

The lesson here is that a company cannot pass on its privacy compliance obligations to a third-party privacy management platform; the company itself is responsible for the functionality of such platforms. Michael Macko, head of the CPPA’s Enforcement Division, stated in a press release, “Using a consent management platform doesn’t get you off the hook for compliance [. . .] the buck stops with the businesses.” Your company cannot rely on its third-party privacy management platform for compliance and expect no accountability in the event of non-compliance; you must conduct due diligence and validate that the operation is functioning and compliant with CCPA requirements.
This is likely only the start of the CPPA’s enforcement sweep. The time is now—assess your CCPA compliance program and processes, and ensure they are up to par.

Updated New York Retail Worker Safety Act Takes Effect Soon

As we explained in a previous blog post, last fall, Governor Kathy Hochul signed the New York Retail Worker Safety Act (NYRWSA) into law, obligating employers to provide certain safety measures for retail workers by early March of this year.
But just a few months later, a temporary reprieve came, when lawmakers introduced a bill (“S740” or “the Amendments”) to modify specific details of the original NYRWSA. Just weeks before the original version was to take effect, Governor Hochul signed off on the Amendments, which not only changed some of the law’s original requirements, but also delayed mandatory policy, training, and notice requirements until June 2, 2025.
While portions of our blog post from October 2024 remain accurate, some details have changed. New York retail employers should read on to learn what NYRWSA requires of them, and by when.
Which Obligations Still Stand?
As we detailed, the NYRWSA requires covered employers to:

implement a written workplace violence prevention policy;
conduct trainings on the policy; and
provide written notice about the policy in English and other applicable languages.

What did the Amendments Change?
Training Requirements Eased for Smaller Employers
The NYRWSA generally covers any employer with at least ten “retail employees,” defined as employees working at a retail store. Among the law’s requirements is a workplace violence prevention training program that employers must provide to all employees upon hiring and annually thereafter.
The Amendments permit employers with fewer than fifty retail employees to provide workplace violence prevention training just once every two years, instead of annually, after the initial training for new hires.
No Panic Buttons
The Amendments also change requirements for large employers: specifically, they eliminate the need for panic buttons and reduce the number of businesses that will need to comply with an obligation to provide a safety communications tool for retail workers.
The original law required employers with 500 or more retail employees nationwide to install “panic buttons” throughout workplaces or provide employees with wearable mobile phone-based panic buttons.
Under the Amendments, only employers with 500 or more retail employees statewide will need to provide a “silent response button” for all retail employees.
A silent response button must allow employees to request immediate assistance from a security officer, manager, or supervisor while the employee is on duty. Employers may provide the button in the form of an easily accessible device installed within the workplace, or via a wearable item like a mobile phone.
Unchanged are NYRWSA’s requirements that employers may only install alert buttons through employer-provided equipment and may not use any wearable or mobile phone devices to track employee locations, unless triggered by the button during an emergency.
New Modified Written Notice Requirements
Also unchanged are NYRWSA’s requirements that all covered employers provide retail employees with a written notice of their retail workplace violence prevention policy, both in English and in the language identified by each employee as their primary language. Employers must provide these written notices to covered employees upon hire and at each annual or bi-annual training.
As of this post, the New York State Department of Labor (NYSDOL) has not published a model workplace violence prevention policy, model training materials, or any other guidance in any language.
Conclusion
We recommend that employers take necessary steps to comply with these obligations by the upcoming June 2, 2025 effective date. We will continue monitoring NYSDOL and advise further if the agency provides more guidance and materials.

Cleveland’s Pay Transparency and Compensation History Law: Breaking Down the New Employer Requirements

Takeaways

The new law goes into effect on 10.27.25. It requires employers to include salary ranges and scales when advertising job openings and bars them from inquiring about applicants’ compensation history.
The law applies to private employers that employ at least 15 people within the city.
Employers should review their practices and start preparing for the new requirements now.

DOJ’s Updated Enforcement Policy: A Game-Changer for Corporate America?

On May 12, 2025, the U.S. Department of Justice (DOJ) announced a major overhaul of its corporate enforcement policy, aiming to incentivize companies to voluntarily self-disclose misconduct. Titled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime,” the revised policy was introduced by DOJ Criminal Division Chief Matthew R. Galeotti and promises a “clear path to declination” for qualifying companies. This marks a strategic shift that could significantly alter how corporate entities approach disclosures, investigations, and compliance moving forward.
The policy outlines 10 priority areas that Galeotti identified as critical threats to U.S. interests. These include healthcare fraud, trade and customs violations, misuse of digital assets, and misconduct posing national security risks. Schemes such as Ponzi operations, tariff evasion, and fraud involving Variable Interest Entities (VIEs) are called out specifically for undermining market integrity and harming U.S. investors.
At the core of the revised Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) is a strengthened framework to promote corporate transparency. The new policy addresses longstanding concerns about balancing the incentives for disclosure with the need for fairness in enforcement. Under the updated approach, companies may avoid criminal resolutions entirely if they:

Voluntarily self-disclose misconduct before it becomes public or is discovered by the government;
Fully cooperate with DOJ investigations;
Timely remediate the misconduct to prevent recurrence; and
Have no aggravating factors, such as repeat offenses or involvement by senior leadership.

Galeotti urged companies to disclose early and openly, noting that “timing and transparency in disclosure will tilt the scales towards leniency.” Even in cases involving aggravating circumstances, the DOJ may still offer a declination. This will depend on the severity of those factors and the company’s cooperation and remediation efforts.
Companies that report misconduct in good faith—without knowing whether DOJ is already aware—can still receive substantial benefits, including:

Shorter resolution periods, with agreements potentially lasting less than three years;
Significant fine reductions, based on cooperation, remediation, and the strength of a company’s compliance program; and
Reduced reliance on corporate monitors, with narrower criteria for when monitorships are imposed.

This reflects a meaningful departure from prior policies, which often conditioned benefits on stricter timelines or broader disclosures.
Another notable shift is the DOJ’s recalibrated approach to corporate monitorships. Described by Galeotti as “narrowed in scope to focus on practicality,” the updated policy introduces more discretion in imposing or terminating monitorships. Key considerations include the seriousness of the misconduct, the likelihood of recurrence, the robustness of a company’s compliance program, and alternative oversight mechanisms such as regulatory audits.
For companies currently under DOJ monitorships, the revised guidelines could offer relief. Depending on a review of risk and compliance strength, existing monitorships may be shortened or scaled back. Organizations should assess their compliance infrastructure and explore whether they meet the revised standards for a reduction or termination of oversight.
The DOJ’s updated policy signals a new era—one that emphasizes fairness and efficiency while continuing to aggressively pursue high-priority white-collar crimes. The message to corporate America is clear: proactive transparency and strong compliance are not only encouraged—they may be the key to avoiding criminal liability altogether.
For companies operating in enforcement-priority sectors, the takeaway is urgent. Strengthen your compliance programs, prepare for timely and honest disclosures, and act decisively in the face of potential misconduct. The incentives for doing so have never been greater.

Complaint Need Not Allege Fraud, Misrepresentation, Or Deceit To Be “Based Upon” A Corporation’s “Fraud, Misrepresentation or Deceit”

In 2002, the California Legislature created the Victims of Corporate Fraud Compensation Fund as part of the Corporate Disclosure Act. See Victims of Corporate Fraud Fund. There are a number of conditions that must be met to receive a payout from the fund. One of these conditions is that the victim secure “a final judgment in a court of competent jurisdiction against a corporation based upon the corporation’s fraud, misrepresentation, or deceit”. Cal. Corp. Code § 2282. In a recently published decision a California Court of Appeal decided that this condition was met even though the victims had not actually alleged “fraud, misrepresentation, or deceit”.
In Alves v. Weber, 2025 WL 1379121, the plaintiffs were defrauded by a corporation that promised, but failed to provide, long-term health care and estate planning services. The plaintiffs successfully obtained a judgment from the bankruptcy court that expressly adjudged plaintiffs to be “the victims of misrepresentation that satisfies all the essential elements of the California tort of intentional misrepresentation” and awarded specific monetary damages against the corporation”. The plaintiffs then sought recompense from the Fund, but the Secretary of State denied their claims, stating:

The Applications have been denied because the Default Judgment issued by the United States Bankruptcy Court for the Eastern District of California . . . does not appear to be a qualifying judgment for corporate fraud for purposes of the [Fund]. Further, none of the three claims for relief alleged in the Complaint to Determine Non-Dischargeability of Debt (11 USC 523 & 727), upon which the Default Judgment was based, are a ‘cause of action . . . for fraud . . . ’. See California Corporations Code sections 2281(g) and 2288(b)(2).

The Court of Appeal disagreed, holding that the plaintiffs had indeed obtained a final judgment based upon the corporation’s fraud even though they had not specifically alleged fraud. In this regard, the Court noted that “[a]lthough styled as a request to determine nondischargeability of debt, petitioners’ complaint also sought ‘a judgment determining that the . . . essential elements of the California tort of intentional misrepresentation have been satisfied’”.