Opinion – Big Law’s DEI Crossroads: Resistance, Compromise, and the Trickle-Down Effect
In the wake of executive orders from the Trump administration targeting Diversity, Equity, and Inclusion (DEI) programs, Big Law is standing at a critical juncture. The legal industry, which has spent the last decade publicly embracing DEI as a moral and business imperative, is now navigating a politically charged environment where those same values have become liabilities.
While some top-tier firms are choosing to push back—defending their DEI commitments and pledging to continue inclusive hiring and leadership development—others are opting for compromise. Several firms have entered into quiet agreements with the administration, agreeing to either waive or significantly de-emphasize DEI requirements in their internal and external policies. In exchange, they’ve committed to invest between $40 million and $125 million in pro bono legal services, supporting causes mutually agreed upon by the White House and firm leadership.
These deals, while positioned as good-faith gestures, raise important questions about the future of DEI in law. Is the legal industry sacrificing long-term systemic change for short-term political appeasement? The good news for all of us is that President Trump has amassed a $600B war chest full of the best legal minds in America, which he says will work on the tariff and trade deals. I may question how that happened, but am happy they’ll have a seat at that table.
But the impact extends well beyond the firms themselves. It’s now trickled down to the legal recruiting space. According to Bloomberg Law and RollOnFriday, legal recruiting firm Major, Lindsey & Africa (MLA) “quietly removed all traces of DEI from its website—scrubbing internal employee groups and public statements without notifying staff”.
While financial settlements and pro bono commitments may offer a politically palatable alternative to outright resistance, they do not replace the transformative power of DEI initiatives that focus on equal access, representation, and inclusion. The real risk is that these behind-the-scenes compromises could set back years of progress, particularly in an industry already criticized for its lack of diversity at the top.
As legal employers and recruiters recalibrate, clients and candidates alike should be asking a difficult but necessary question: Are we witnessing the slow dismantling of DEI in law—or just a temporary detour on the road to progress at the intersection of Law, Politics, and Business?
The opinions expressed in this article are those of the author and do not necessarily reflect the views of The National Law Review.
Preparing for a “Common-Sense” FAR: What Federal Contractors Need to Know About the Trump Administration’s Plans to Streamline the Federal Acquisition Regulation
In a new Executive Order issued on April 15, 2025 titled, “Restoring Common Sense to Federal Procurement,” President Trump has directed his Administration to make major revisions to the Federal Acquisition Regulation (FAR)—the voluminous set of rules governing the U.S. Government’s acquisition of products and services—with the stated purpose of making the federal procurement process more “agile, effective, and efficient.” As with many recent executive actions, the instructions to government officials are to undertake dramatic reforms at a breakneck pace, with a significant impact on the rules of the road for companies doing business or seeking to do business with the federal government. In this alert, Foley’s Federal Government Contracts team provides a summary of the key takeaways for government contractors from this latest Executive Order and the Trump Administration’s initiative to produce a streamlined version of the FAR.
Background:
On January 31, 2025, President Trump issued Executive Order 14192, “Unleashing Prosperity Through Deregulation,” which announced his Administration’s policy of alleviating unnecessary regulatory burdens. This recent Executive Order issued on April 15, 2025 extends the Trump Administration’s deregulatory initiative to the government contracting sector by directing the most significant overhaul of the FAR in more than four decades.
This move represents a dramatic shift in federal procurement policy—one aimed at streamlining the acquisition process, reducing regulatory burdens, and encouraging broader participation in the federal marketplace.
Key Takeaways for Contractors:
A Mandate for FAR Simplification—Fast. The Order establishes an aggressive timetable for the proposed revisions to the FAR. As the Order notes, the FAR now fills more than 2,000 pages, and the Order directs the Office of Federal Procurement Policy (OFPP) Administrator, working with the FAR Council and agency heads, to amend the FAR within 180 days. The objective is to retain only provisions that are statutorilyrequired or “otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.”
Agency FAR Supplements Are Also Under Review. Each agency must designate a senior acquisition official within 15 days of the Order to work with the OFPP Administrator and FAR Council to provide recommendations regarding their agency-specific FAR supplements and identify FAR provisions that are inconsistent with the Order’s objective to streamline the FAR by removing unnecessary regulations.
Internal Guidance Issued to Agencies. Within 20 days of the Order, the Director of the Office of Management and Budget (OMB), with the OFPP Administrator, shall issue a memorandum that provides guidance regarding implementation of these reforms and proposes new agency supplemental regulations that are aligned with the new policy objectives. That guidance from OMB may provide important signals to contractors regarding the portions of the FAR and federal procurement policy most likely to change as part of this reform effort.
Regulatory Sunset for Non-Statutory FAR Clauses. The Order directs the OFPP Administrator and FAR Council to consider amending the FAR to include a regulatory sunset mechanism that would apply to any non-statutory FAR provision retained after this reform—or added in the future. As proposed in the Order, any non-statutory FAR provision would automatically expire after four years, unless renewed by the FAR Council. This sunset mechanism, if ultimately adopted in the revised FAR, would, at a minimum, require a significant amount of periodic review by the FAR Council of existing regulations, and it could introduce uncertainty regarding the long-term status of certain FAR provisions, complicating contractor compliance planning.
Interim Guidance and Deviations Expected. To avoid delays, the FAR Council is empowered to issue deviation and interim guidance as needed during the rulemaking process, suggesting that significant FAR changes could begin impacting procurements well before final rules are issued or the government contracting community is given the opportunity to weigh in on those revisions.
Implementation Uncertainty. While the policy objective of the Order is clear—to simplify the FAR by removing “unnecessary regulations”—it remains to be seen how the FAR Council will execute that objective. The Order allows for retention of some FAR provisions that cannot be tied back to a specific statutory basis, if such provisions are determined “necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.” Given these subjective considerations, it will bear monitoring to see how the Administrator and the FAR Council interpret those concepts in determining which FAR provisions to keep or cut.
What This Means for Federal Contractors:
This Executive Order has potentially far-reaching implications:
Reduced Complexity: Contractors may soon face fewer compliance hurdles, especially in acquisitions of commercial products or commercial services.
Opportunities for Commercial Vendors: By directing the elimination of regulatory burdens and requirements, the Order may lead to reduced barriers to entry for new commercial contractors looking to do business with the Federal Government.
Uncertainty During Transition: Contractors should prepare for a period of regulatory uncertainty, as interim guidance may vary across agencies.
Concrete Steps Contractors Can Take:
Monitor FAR-Related Rulemakings: Contractors should closely track upcoming Federal Register notices, and deviation and interim guidance for indications as to how the FAR Council is carrying out the Order’s instructions to streamline the FAR.
Engage in Public Comment Opportunities: When proposed FAR rule changes are released for public comment, consider submitting comments to influence the final rulemaking.
Be on the Lookout for Agency-Level Changes: Agency supplements to the FAR are also being reviewed. Contractors should monitor changes to agency-specific procurement regulations that may impact contracting opportunities with those agencies.
We will continue to monitor developments and provide updates as additional guidance is released and implementation proceeds.
New York State Proposes Bill to Ban Noncompetes Except for Highly Compensated Workers and in Sales of Businesses
New York State Senator Sean Ryan recently introduced Senate Bill 4641 (the “Bill”) that proposes to ban noncompete agreements for most New York employees.
If passed, the Bill would prospectively prohibit employers from enforcing noncompetes, except for highly compensated individuals who make an average of $500,000 or more per year and in the context of the sale of a business. The Bill would not apply retroactively, so if passed, existing noncompetes would remain enforceable consistent with New York common law.
The Bill follows Governor Hochul’s December 2023 veto of Senate Bill 3100-A, also sponsored by Senator Sean Ryan, that sought to broadly ban noncompetes for all employees regardless of income. As we reported in December 2023, Governor Hochul stated that she would not sign an outright noncompete ban, but instead preferred a “balance” with a compensation threshold and a carveout for noncompetes entered into in connection with the sale of a business. The new Bill does just that.
Who’s Covered?
If passed, employers would not be able to enter into noncompete agreements with any workers earning less than the highly compensated threshold or with certain health-related professionals, regardless of their annual income, such as physicians, physician assistants, chiropractors, dentists, perfusionists, veterinarians, physical therapists, pharmacists, nurses, podiatrists, optometrists, psychologists, occupational therapists, speech pathologists/audiologists, and mental health practitioners (collectively, “covered individuals”).
Employers would be able to enter into and/or seek to enforce noncompete agreements with “highly compensated” individuals who are not health-related professionals.
Highly compensated individuals, as defined in the Bill, are those making an average of $500,000 or more per year based on their three most recent W-2 or K-1 statements. If enacted the law will require individuals without three years of W-2 or K-1 statements to average the amounts listed on the statements for the period they have worked to determine their average compensation. Beginning in 2027, the $500,000 threshold will increase based on the Consumer Price Index.
The Bill would also allow noncompetes as a result of the sale of the goodwill of a business or sale of a majority ownership interest in a business for certain individuals or entities. To meet the sale of a business exception, the partner, member, or entity must either (1) own at least a 15% interest in the partnership or limited liability company or (2) own 15% or more of an interest in the business.
Prospective Effect and Notice Requirement
As presently drafted, the Bill would apply only on a prospective basis, meaning lawful noncompetes currently in place before the effective date of the Bill will remain enforceable, provided they meet the obligations of New York common law. The Bill’s restrictions will go into effect thirty days after the Governor signs the law.
The Bill also contains a notice requirement to inform employees of the new protections. Employers will be required to post a workplace notice developed by the New York State Department of Labor. Specific notice to individual employees would not be required.
Requirements of Common Law Reasonableness and Payment During Noncompete Period
Section 7 of the Bill provides that any noncompete that is permissible or enforceable under Section 1 of the Bill (i.e., for highly compensated individuals and, apparently, in the sale of business context) must:
still comply with New York common law, including the following factors: (i) it is reasonable in time, geography, and scope (and as to time, the Bill provides that a noncompete shall not contain a term greater than one year), (ii) it does not impose an undue burden on the employee, (iii) it does not harm the public, and (iv) its restrictions are no greater than necessary to protect the legitimate business interests of the employer; and
provide for the payment of salary during the period of enforcement of the noncompete.
Enforcement and Remedies
Pursuant to the Bill, covered individuals would be able to bring a civil action for injunctive relief and damages against employers or other persons who seek, require, demand, or accept a prohibited noncompete.
Employers cannot attempt to avoid the Bill’s requirements by maintaining a non-New York choice-of-law provision within the noncompete. Section 8 of the Bill states that “[n]o choice of law provision or choice of venue provision that would have the effect of avoiding or limiting the requirements of this section shall be enforceable if the covered individual is and has been, for at least thirty days immediately preceding the covered individual’s cessation of employment, a resident of New York or employed in New York, including individuals who work remotely in another state but who report to a New York worksite or office or who report to a New York-based supervisor.”
If a court were to find that the noncompete was prohibited under the Bill, the court would have the ability to void the agreement, enjoin the employer’s conduct, and award lost compensation, liquidated and compensatory damages, and reasonable attorney’s fees and costs. The Bill also states the court “shall award liquidated damages” of no more than $10,000 for covered individuals affected by a noncompete that violates the Bill.
Takeaways
The Bill would limit the number of employees with whom employers can enter into noncompetes, so employers with employees in New York are advised to consider taking steps to prepare, in case the Bill is passed. First, employers who are considering entering into noncompete agreements with current employees should do so before the effective date of the Bill. For future hires made after the effective date of the Bill, employers will need to rely on agreements containing non-solicitation and confidentiality restrictive covenants, rather than noncompetes. As we reported after the FTC introduced its Noncompete Rule, employers also should consider working with outside counsel to conduct a trade secret assessment to ensure that their confidential information is protected as robustly as possible.
This Bill is the second New York bill introduced in 2025 that seeks to restrict noncompetes. As we reported, in January 2025 the New York State Assembly introduced another bill that would mandate new requirements for lawful restrictive covenants. That bill remains pending in the Assembly’s Labor Committee.
Currently, the Senate Bill 4641 has been referred to the Senate Labor Committee for further discussion. As Senate Bill 4641 and Assembly Bill A01361 progress through the legislative process, we will be sure to update you.
To AI or Not to AI? The Use of AI in Employment Decisions
Even just a few years ago, the concept of using artificial intelligence (AI) in everyday life was a novel, if somewhat intimidating, concept. But from Google’s AI overview to Microsoft’s Copilot, many of us use AI daily to help increase efficiency and streamline certain processes. If you are an employer using AI to sort through job applications and resumes, to make decisions based on background check information, or to sort through criteria for promotion or termination decisions, you need to consider the legal ramifications, which increasingly involve federal and state laws.
The State and Local Legal Landscape
Some state legislatures and local governments, in attempting to get ahead of any issues, have started considering or issuing guidance or legislation aimed at preventing employment discrimination resulting from the use of AI tools. For example, New Jersey has issued guidance indicating that the use of AI in employment decisions will be subject to the same antidiscrimination laws as non-AI decisions and that employers will be liable for discrimination caused by AI tools they did not design. Both Colorado and Illinois have passed laws, effective in 2026, prohibiting employers from using AI in a discriminatory manner and requiring certain disclosures when using AI in certain employment decisions. New York City passed a local law, effective July 2023, that regulates the use of AI in employment decisions. Maryland and California have proposed but have not yet passed AI legislation, and even more states are in the early stages of considering laws regulating employer use of AI in employment decisions.
Where Is the Federal Government on This Issue?
It is currently unlikely that federal legislation is forthcoming, although that could change in the years to come. In 2023 and 2024, the Equal Employment Opportunity Commission and the Department of Labor issued guidance on the use of AI in employment decisions. That guidance was rescinded following President Trump’s January 2025 executive order revoking policies and directives acting as “barriers” to “AI innovation.”
Now What?
While this is an evolving area, employers, especially those with remote employees across the United States, must keep up to date on state or local laws on the use of AI in employment decisions. As a general rule, make sure that any AI you are using complies with federal anti-discrimination laws. Other best practices include:
Have a policy on if and how you are going to use AI;
Vet your AI vendors and make sure they have considered the potential adverse impact of their products;
Notify employees or prospective employees that you are using AI in employment decision- making;
Regularly audit AI results to see if protected groups are being disproportionately impacted;
Ensure employees responsible for implementing AI tools have the proper training and are using such tools appropriately; and
Consult with subject matter experts and legal counsel as necessary.
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Ethylene Oxide Case Starts Trial In Georgia
Ethylene Oxide (EtO) is an industrial solvent widely used as a sterilizing agent for medical and other equipment that cannot otherwise be sterilized by heat/steam. EtO may also be used as a component for producing other chemicals, including glycol and polyglycol ethers, emulsifiers, detergents, and solvents. Allegations that exposure to EtO increases the risk of certain cancers has led to governmental regulation as well as private tort actions against companies that operate sterilization facilities that utilize EtO. The most recent example of the latter is a trial that started this week in Georgia.
Ethylene Oxide Trial History
The first ethylene oxide case to go to trial was the Kamuda matter, in which an Illinois jury awarded $263 million in September of 2022 against Sterigenics for ethylene oxide exposure from that company’s Willowbrook facility. A subsequent trial in the same jurisdiction against the same defendant resulted in a defense verdict. Ultimately, Sterigenics resolved its pending claims involving the Willowbrook plant in the amount of $408 million. In December of 2024, a Philadelphia Court of Common Pleas jury found the defendant B. Braun Manufacturing Inc. not liable on all counts. The plaintiff had alleged that her husband developed leukemia as a result of working at the defendant’s sterilization plant in Allentown, Pennsylvania for seven years. Notably, unlike the Illinois trials, the Philadelphia trial involved an employee at the sterilization facility as opposed to the Illinois plaintiffs who did not work at the Willowbrook plant but resided nearby.
Last month, a Colorado jury rendered a verdict in favor of defendant Terumo BCT Inc. (Isaacks et al. v. Terumo BCT Sterilization Services Inc. et al. in the First Judicial District of Colorado (docket number 2022CV031124). This was a bellwether trial that lasted six weeks, and involved four female plaintiffs. The jury determined that the defendant was not negligent in its handling of emissions from its Lakewood plant. The plaintiffs had sought $217 million in damages for their alleged physical impairment and also $7.5 million for past and future medical expenses as well as punitive damages. In light of the fact that the six person jury found the defendant Terumo not negligent, it did not need to consider damages or causation. Notably, there remain hundreds more pending claims against Terumo in Colorado. In fact, plaintiffs’ counsel filed almost 25 more cases while the trial was in progress. All of the plaintiffs alleged that they had developed cancer as a result of ethylene oxide emissions from the Terumo facility. One plaintiff alleged breast cancer as a result of 23 years of exposure from the plant, while another alleged breast cancer after almost 35 years of exposure (these two plaintiffs were neighbors). Another plaintiff alleged multiple myeloma while the fourth plaintiff alleged Hodgkin’s lymphoma.
Georgia Trial Starts
Earlier this week, an EtO trial commenced against CR. Bard in Georgia. At issue is the company’s medical equipment sterilization plant in Covington, Georgia. The plaintiff, who had been a truck driver, alleges that he would make pickups at the plant on a regular basis, and, coupled with the fact that he resided one and half miles from the plant, was exposed to EtO and developed non-Hodgkin lymphoma. The plaintiff alleges that the company failed to take appropriate steps to protect he and the community from EtO. According to plaintiff’s allegations, the Covington facility emitted 9.8 million pounds of EtO from 1970 to 2017, that there were no controls until 1990, and that there were multiple instances of unintended EtO releases. Further, there are claims that Union Carbide, which had suppled EtO to the plant, had warned the company. Until 1990 there was nothing at all interfering with the release of the gas outside the plant, he said, claiming to the jury that any controls the plant put in place were done because the company was “forced” to, and that there were numerous “unintended” release incidents over the years. Even Bard’s EtO supplier, Union Carbide, had warned Bard, Daniel said.
For its part, Bard and Becton Dickinson (Bard’s parent company), maintain that the plant has always been a good corporate citizen and that the plaintiff’s cancer was not caused by EtO but rather by a random DNA mutation. Plaintiff counsel told the jury that the Food and Drug Administration has noted the critical role that EtO plays in the country’s healthcare system and that over 50% of medical products are sterilized with EtO.
Analysis
Recently, we’ve seen increased trial activity with respect to EtO trials. As set out above, there have now been cases taken to verdict in Illinois, Pennsylvania, and Colorado. And now a case has started trial in Georgia. There is also EtO litigation activity in California, though those cases are still in the discovery phase. As noted in previous postings, we expect that plaintiff firms will recruit new clients who allege some type of cancer as a result of residing in the vicinity of an ethylene oxide plant, particularly if the Georgia trial results in a plaintiff verdict. How long will it be until we see television advertisements run by plaintiff firms seeking new plaintiffs? We’ve seen this in asbestos, talc, contaminated water, firefighting foam, defective earplugs, and other types of litigation. It is not out of the realm of possibility to think that we will see this with ethylene oxide litigation at some point in the near future.
Texas Joins List of Legislatures Seeking to Ban Noncompete Agreements
After the nationwide injunction barring the Federal Trade Commission (FTC) Noncompete ban, we reported our anticipation that state legislatures would likely introduce legislation restricting the use of noncompetes.
As expected New York, Washington, Virginia, Ohio, and Wyoming have all introduced—or enacted—legislation in 2025 aimed at limiting noncompetes and other restrictive covenants. On March 7, 2025, Texas joined this growing list of states when the Texas legislature introduced Texas House Bill 4067 (the “Bill”). If enacted, the Bill would amend Texas’s Business & Commerce Code by adding sections 15.501, 15.502, and 15.503 to broadly prohibit noncompetes against all “workers” and would prohibit noncompetes with “senior executives” after September 1, 2025. If passed, the law would take effect on September 1, 2025.
The Bill prohibits a person (an undefined term under the Bill) from entering into or enforcing a noncompete with a “worker,” regardless of when such covenants were entered into. The Bill broadly defines a “worker” as “an individual who works or previously worked, without regard to whether the individual was paid, to the worker’s title, or to the worker’s status under any other state or federal laws, including whether the worker is an employee, independent contractor, extern, intern, volunteer, apprentice, or sole proprietor who provides a service to a person.”
The Bill provides a limited exception to allow for certain noncompetes with “senior executives.” A “senior executive” is defined as someone in a “policy-making position” who earned at least $151,164 in total annual compensation in the previous year. The Bill defines “policy-making position” to include CEOs or presidents, other officers with authority to make significant policy decisions, and certain officers of subsidiaries or affiliates with similar authority. Agreements made with senior executives before September 1, 2025, will remain enforceable. However, if enacted, the Bill will prohibit employers from entering into or enforcing noncompete agreements with senior executives after September 1, 2025.
The Bill is strikingly similar to the proposed FTC Noncompete Rule issued in April 2024 in which the FTC attempted to ban all existing and new noncompetes, with a few limited exceptions, including for existing noncompetes with senior executives and noncompetes entered into in connection with the sale of a business. Under the proposed FTC Noncompete Rule, “senior executive” was similarly defined as a “worker who was in a policy-making position” and who received total annual compensation of more than $151,164.
In addition to the exception for noncompetes with senior executives entered into before September 1, 2025, the Bill does not apply to noncompetes entered into by a person under a bona fide sale of: (1) a business entity; (2) the person’s ownership interest in a business entity; or (3) all or substantially all of the business entity’s operating assets.
If the Bill becomes law, employers will be required to notify affected workers by January 1, 2026 that their noncompete agreement is no longer enforceable. The notice must be “clear and conspicuous” and must identify the parties subject to the agreement and be delivered by hand, mail, e-mail, or text message to the worker.
As we reported with the FTC Noncompete Rule, we do not think that the Bill will gain much traction in Texas, a traditionally employer-friendly state. Even if it does pass, there is a strong likelihood that Governor Abbott will veto the Bill. While there may not be a strong likelihood of the Bill becoming law, the introduction of the Bill in Texas highlights that states are likely to continue to introduce legislation aimed at restricting or limiting the use of noncompetes. We will continue to monitor the Bill and provide updates.
Stay tuned for other state bills relating to employer noncompetes, including another bill pending in the State of New York.
Gianna Dano, a Law Clerk in Epstein Becker & Green’s Newark Office (not admitted to practice), contributed to the preparation of this piece.
Cross-Border Catch-Up: The Growing Global Trend of the Right to Disconnect [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Lina Fernandez (Boston) and Kate Thompson (New York/Boston) discuss the growing trend of “right to disconnect” laws that permit employees to disengage from work-related communications and activities during non-working hours. Kate and Lina explore how right-to-disconnect legislation is being implemented in various countries, including Spain, Peru, Colombia, Thailand, and Canada. Lina and Kate also highlight the importance for global employers to stay informed and compliant with these evolving regulations.
Six Questions Flowing From President Trump’s Recent Suite of Energy-Focused Actions
President Trump’s energy-focused ambitions will generate work for regulators at all levels of the government.
In the first two weeks of April, the president issued several orders and a related memorandum that could potentially turn energy regulation on its head by overturning nearly a century of precedent on regulation of the electric industry, including challenging the so-called Insull regulatory compact and the role of each state in regulating the electric industry’s operations within its borders.
The Trump Administration seeks to promote “baseload” energy development by limiting states’ ability to adopt climate mitigation strategies (including cap and trade and renewable portfolio standards) and by taking new authority to permit development of reserves of fossil fuels and other minerals critical to the energy space. In combination, these actions affect nearly all aspects of the energy space and potentially portend radical changes to the balance between state and federal energy regulation if carried through.
Below, we will summarize each of these actions, outline how they fit into the context of President Trump’s broader agenda, and outline issues for the regulated community to watch.
President Trump’s Executive Orders and Memoranda
Promoting Coal and Fossil Fuels
In an Executive Order titled “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241,” the Trump Administration reaffirmed its position that “coal is essential to our national and economic security” and detailed a number of policies designed to expand and encourage coal-fired electricity generation:
Encouraging Domestic Coal Mining:The Order calls for a report on coal reserves on federal land and the termination of an Obama-era moratorium on leases for coal extraction on federal land. The Order also directs the recently created Energy Dominance Council to designate coal as a “mineral” pursuant to a March Executive Order on Immediate Measures to Increase American Mineral Production.
Encouraging Coal-Fired Electricity Generation: The Order directs federal agencies to review existing federal rules, policies, and guidance aimed at transitioning away from coal-fired generation and to revise or rescind those policies where possible. The Order also directs agencies to identify and promote opportunities for the export of American coal, and to research and provide funding or other support for the use of coal-fired energy to power artificial intelligence data centers or for the development and improvement of coal-related technologies.
Limiting Administrative Requirements:The Order directs agencies to identify types of coal-related activities that could be categorically excluded from environmental impact reviews under the National Environmental Policy Act. The Order further calls for investigation into whether coal may be considered a “critical material” for the production of domestic steel.
A second related Executive Order titled “Regulatory Relief for Certain Stationary Sources to Promote American Energy” granted a two-year extension for coal-fired power plants to comply with federal Mercury and Air Toxics Standards emissions limitations.
Finally, a third Executive Order titled “Strengthening the Reliability and Security of the United States Electric Grid” authorized the use of emergency powers to require existing fossil fuel-fired power plants to stay online. Citing its earlier declaration of a “National Energy Emergency,” the Administration preemptively invoked Section 202 of the Federal Power Act, which allows the Federal Energy Regulatory Commission (FERC) to require specific energy generation or facility interconnection to meet energy demands in times of war or emergency. The Order directs FERC to identify regions where federal intervention may be necessary and specifically directs the agency to prevent certain large energy generation resources “from leaving the bulk-power system or converting the source of fuel” if the conversion would reduce total energy generation.
Limiting State Influence on Energy Regulations
A separate Executive Order, “Protecting American Energy From State Overreach,” seeks to limit state climate change laws that the Trump Administration claims are harming domestic energy production. Specifically calling out New York and Vermont laws imposing liability for greenhouse gas emissions as well as California’s carbon emission cap-and-trade system, the Order directs the Attorney General to identify and “take all appropriate action to stop the enforcement of” state laws that burden the “identification, development, siting, production, or use of domestic energy resources.” While we do not know what state laws the Attorney General will identify and presumably seek to preempt through litigation, likely suspects would include state decarbonization requirements and environmental justice programs. Federal agencies have already sought to curtail funding for many of these programs.
Rolling Back Federal Regulatory Hurdles
President Trump signed an Executive Order entitled “Zero-Based Regulatory Budgeting to Unleash American Energy” seeking to require reexamination of regulations which have the potential to sit on the books unexamined for long periods of time. For agencies touching upon energy issues (e.g., US Environmental Protection Agency, the US Army Corps of Engineers, and the US Department of Energy), agencies must include a “sunset rule” rendering regulations invalid no more than five years in the future unless the Director of the White House Office of Management and Budget determines that the new regulation or amendment “has a net deregulatory effect.”
Additionally, President Trump issued a memorandum to the heads of Executive Departments, “Directing the Repeal of Unlawful Regulations.” The memorandum notes that several recent US Supreme Court decisions have placed limits on the power of federal agencies, including Loper Bright Enterprises v. Raimondo (reducing deference given to agency interpretations of statutes), West Virginia v. EPA (preventing agencies from resolving “major” economic or political questions), and Sackett v. EPA (narrowing the definition of water bodies subject to federal Clean Water Act regulation). The memorandum suggests that many regulations, arguably in conflict with those decisions, remain on the books and directs the heads of federal agencies to identify any “potentially unlawful regulations” and to “immediately take steps to effectuate the repeal” of those regulations in whole or in part. The memorandum directs agency heads to, where possible, invoke the “good cause” exception of the Administrative Procedure Act to repeal regulations without the usual public notice and comment, arguing that notice and comment is “unnecessary” where the existing regulations are inconsistent with a Supreme Court ruling.
The Orders in Context
These orders collectively reorient the US energy space. Pointing to the nation’s large reserves of coal, oil, natural gas, and critical minerals as well as the capacity for nuclear, hydropower, biofuel, and geothermal energy production, the Trump Administration has repeatedly promised the development of a “Golden Era” of US energy dominance.
With these actions, the Trump Administration fleshes out how it intends to assert “energy dominance.” Below are six open questions:
1. Are fuel choices driven by regulation or by practical concerns (like technology or cost)?
The current set of executive orders implicitly assume that regulatory burden alone has compelled the transition toward renewable energy. But the truth is more complicated. While the United States historically relied on a substantial fleet of coal-burning power plants, recent years have seen many states actively encouraging energy producers to move away from fossil fuels for power generation, in favor of renewable sources of energy like wind and solar. A combination of factors have caused coal generation capacity to fall over 50% from 302 GW/year in 2013 to 181 GW/year in 2023. This switch does not necessarily fall along “red state vs. blue state” lines, with states including Texas, Idaho, and South Dakota toward the top of the nation in terms of renewable energy development. It remains to be seen whether the removal of federal limitations will reverse that trend.
2. Will this regulatory shakeup spur long-term energy development?
Large-scale energy production is a long-term investment that needs to be cost effective over decades. The combination of these orders reenforcing supports for “baseload” power may result in a situation where a project’s long-term viability is more certain. However, state renewable portfolio standard requirements or state programs encouraging renewable development may present headwinds.
3. Will future federal actions undercut state energy programs?
Energy planning seeks to balance considerations including energy security (i.e., that energy is always available), affordability, sustainability, and resilience (i.e., that energy facilities are sited in such a manner that they will be available for their expected lifespan). While the Trump Administration is clearly focused on overall affordability of energy, the recent suite of orders may undercut state-level balancing efforts, particularly those focused on “energy justice” in terms of grid planning. (For more, see here.) We will continue to watch whether this will occur.
4. How much litigation will result from the executive orders?
As we have discussed, executive orders alone cannot displace regulations or federal statutes. The mechanics of how these orders work — through processes like limiting public participation requirements — are likely to result in allegations that statutory rights to public participation are violated. Finally, states including California, Colorado, Illinois, Maryland, Minnesota, North Carolina, Oregon, and Rhode Island have passed broad-state specific legislation seeking to reduce emissions.
5. Will US Congress need to weigh in to preempt state laws?
One of the executive orders directs the Attorney General to review state programs to find issues preempted by federal law. We have discussed the drift between federal environmental policy and the policy in some states. (See here, here, and here.) Recent Supreme Court decisions in the preemption space have limited preemption to areas where Congress has spoken directly. (See here and here.)
6. How will these orders impact future renewable energy project development?
Many renewable energy projects currently in development are moving forward through this period of uncertainty based on utility planning for compliance with state regulatory requirements, such as renewable portfolio standards. If the effort to “limit state overreach” results in the weakening or elimination of state compliance standards, one of the most effective demand-pulls for renewable energy could effectively be shut down.
New Proposed Bill in Louisiana Targets Synthetic Dyes and Food Additives
On March 18, 2025, Louisiana introduced Senate Bill 14, a bill that would require products containing artificial dyes, chemical additives, and other ingredients to include a warning label on the product where the substances are banned or not authorized in other countries. The bill lists 51 different ingredients that would require the warning, including several synthetic dyes, synthetic or artificial vanillin, propylparaben, potassium bromate, melatonin, bleached flour, and others. Any food items containing any of the listed ingredients would be required to bear the following warning label, “WARNING: This product contains an artificial color, chemical, or food additive that is banned in Australia, Canada, the European Union, or the United Kingdom.”
Additionally, SB 14 would prohibit public schools and non-public schools receiving state funds from serving ultra-processed foods. The bill defines ultra-processed food as any food or beverage that contains the following: Blue dye 1, Blue dye 2, Green dye 3, Red dye 3, Red dye 40, Yellow dye 5, Yellow dye 6, azodicarbonamide, Butylated hydroxyanisole (BHA), Butylated hydroxytoluene (BHT), Potassium bromate, propylparaben, and titanium dioxide.
Some additional provisions of the bill would also require any food service establishment that cooks or prepares food using seed oil to display a disclaimer on the menu or other clearly visible location, prohibit soft drinks from SNAP eligibility, and require physicians and physician assistants to complete continuing education on nutrition and metabolic health.
This bill mirrors Texas SB 25, as we’ve previously blogged about, which would also require warning labels on packaged food products containing artificial colors, chemicals, or food additives that do not have a regulatory clearance in other countries.
LA SB 14 is the latest in a host of newly proposed bills this legislative cycle targeting synthetic dyes and various other food additives, which, if adopted, will create a divided and complicated regulatory scheme across the country.
Keller and Heckman will continue to monitor developments related to state legislative efforts to prohibit food additives.
Trump Issues Executive Order on “Restoring America’s Maritime Dominance”
Last week, President Trump issued an Executive Order (EO) titled “Restoring America’s Maritime Dominance,” emphasizing the urgent need to revitalize the domestic maritime industry.
The EO acknowledges the decline of the U.S. flag fleet and the nation’s minimal role in global commercial shipbuilding.To address this, the EO calls for a Maritime Action Plan (MAP), developed by the National Security Advisor and other officials, with the goal of strengthening shipbuilding capabilities, enhancing maritime workforce training, and ensuring adequate commercial vessel capacity for national security. The EO also outlines legislative proposals, funding mechanisms, and deregulatory initiatives to support these objectives, including tariffs on Chinese-built ships, financial incentives for U.S. shipyards, and expanded mariner training programs.
My colleagues recently co-authored an article outlining the more than 20 actions included in the EO. Please refer to the article (or reach out directly) for more detailed guidance on implementation and compliance requirements.
It is the policy of the United States to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity.
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California Bill Proposes a Vacancy Tax on Commercial Real Property
On Feb. 21, 2025, California State Sen. Menjivar introduced Senate Bill 789 (SB-789), proposing a vacancy tax aimed at commercial real property (property) to address prolonged vacancies, incentivize property activation, and generate revenue to support first-time home buyers through the California Dream for All Program. SB-789 is scheduled to become effective on July 1, 2028, with initial annual tax obligations due in 2029.
Summary of SB-789 Changes
Vacancy Tax on Commercial Real Property
SB-789 imposes an annual vacancy tax of $5 per square foot on properties remaining vacant for 182 or more days, whether consecutive or nonconsecutive, within a calendar year. The tax explicitly excludes residential spaces within mixed-use properties. Revenues collected would be directed exclusively to the California Dream for All Fund, aiding first-time home buyers.
Exemptions
The proposed tax would not apply under the following conditions:
1.
Active renovation: Properties undergoing construction or repair pursuant to an approved building permit, with work ongoing for at least 90 consecutive days.
2.
Legal or regulatory barriers: Properties subject to litigation, environmental reviews, or permitting delays that prevent occupancy.
3.
Natural disasters: Properties affected by natural disasters, including properties state or local authorities deem uninhabitable.
Compliance and Reporting Requirements
Property owners subject to the proposed tax must:
Register with the California Department of Tax and Fee Administration (CDTFA).
Electronically file annual returns by March 15 of each year, reporting the prior calendar year’s vacancy status, property square footage, and applicable exemptions. Supporting documentation, including lease agreements and utility records, may be required.
Penalties for Non-Compliance
Owners intentionally misstating information or making fraudulent claims would face civil penalties of up to 75% of the total tax liability.
Public Outreach and Reporting
The CDTFA would conduct public outreach to educate property owners on compliance and would publish
Annual reports that detail revenue, exemptions, and program outcomes.
Economic evaluations every five years, starting in 2033, that tracks the tax’s impact, its effectiveness, and compliance costs.
Potential Constitutional Conflict
The implementation of SB-789 faces potential constitutional challenges arising from pending litigation. Specifically, in Debbane v. City and County of San Francisco (Appeal No. A172067), property owners successfully challenged a San Francisco vacancy tax, arguing that it violated the Takings Clause of the U.S. Constitution. The city of San Francisco’s appeal of the trial court decision creates legal uncertainty about the constitutionality of vacancy taxes. If the First District Court of Appeal upholds the trial court’s ruling, it may set a precedent that prevents SB-789’s enactment.
Takeaway
SB-789 represents a shift in California’s approach to addressing vacant commercial properties. By imposing a vacancy tax, the bill seeks to revitalize local economies, reduce neighborhood deterioration, and generate funding for housing affordability initiatives. Property owners should familiarize themselves with the new requirements and consult with legal advisors to enhance compliance and understand the potential financial implications.
Bree Burdick and Samuel Weinstein Astorga also contributed to this article.
Mobile Workforce/Remote Worker Legislation Could Impact Your Business
Well-respected House Ways & Means-Education Committee Chair Danny Garrett (R-Trussville) has introduced HB 379, a bill designed to provide guidelines and a safe harbor for employers who have traveling employees or remote workers. The current version of the bill is based in part on the Council on State Taxation (COST)/AICPA model legislation (more on this below). COST is advocating passage of the uniform law across the country and six to seven states so far have enacted it in whole or in large part. Sen. John Thune (R-South Dakota) recently introduced federal legislation to the same end.
In short, if your traveling or remote employee is working in a state with this model act for less than 30 days in a calendar year, you (the employer) aren’t required to register with that state’s taxing authorities or withhold and remit that state’s income tax from the employee’s wages. However, if the employee works more than the safe harbor number of days, he or she is subject to income tax withholding in that state retroactively to the first day of his or her presence in that state.
Alabama is one of several states that asserts tax jurisdiction over a nonresident employer and its employees if they work in this state more than one day in a year.
We understand that Rep. Garrett has agreed to amend his bill to more closely conform with the COST/AICPA model act – and to add an exemption for employers with employees who enter this or another state to conduct disaster relief efforts. Thankfully, the Alabama Department of Revenue is working with Chairman Garrett and, like the authors, is now reviewing a proposed amendment to that end. If your business has traveling or remote workers, this bill should be important to you. Organizations supporting the bill, as amended, include the Alabama Society of CPAs, Manufacture Alabama, COST, and the AICPA.
Chairman Garrett predicts that the bill will come up for a vote in his Committee this week.
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