Bye Bye Home Buyers? – Proposed Legislation Might Make Home Buyers’ Jobs Harder
One area that we have seen multiple times in TCPAWorld is complaints against parties offering to buy a consumers home.
Well, we have spotted an interesting trend in some state legislatures where bills are being introduced to rein those practices in.
In Tennessee, there is a bill which limits the number of times a developer or someone working on behalf of a developer can contact a homeowner.
In Pennsylvania, a similar bill has been introduced, but the unique factor in that bill is that the Secretary of the Commonwealth must designate a certain geographic region as a “homeowner cease and desist zone”. How long until all of Pennsylvania is a “homeowner cease and desist zone”?
Indiana’s bill is slightly different because it prohibits a telephone solicitor who is NOT a licensed real estate broker from making more than “one unsolicited home purchase inquiry to the same consumer in a single year.”
Typically, when you see multiple states addressing the same or similar issues, there is some model language being used and there are similarities between the states. However, this seems to be different bills and different use cases. Which suggests that these grew somewhat organically in the states.
The other interesting thing is some of the most active lobbyists in state politics are realtors and developers.
So, it will be very interesting to watch as the bills progress to see if there is any traction.
States Ramp Up Workplace Violence Prevention Efforts with New Legislation in 2025
Workplace violence continues to be a primary concern for employers and a challenge to maintaining workplace safety. Still, it is unclear whether there will be further movement on regulation at the federal level under the Trump administration.
States are expected to pick up the slack on this issue, and lawmakers in several states in 2025 are already mulling bills to address workplace safety or expand existing regulations, particularly in the healthcare industry.
Quick Hits
Numerous states are introducing or expanding workplace violence prevention laws, particularly in healthcare settings, to enhance employee safety amid rising concerns.
Specific legislative proposals, such as Alaska’s SB 49 and Massachusetts’s HD.1856, require employers to implement risk assessments, create violence prevention plans, and provide training to protect employees from workplace violence.
In recent years, workplace violence has garnered significant attention from lawmakers across the United States, particularly regarding healthcare settings, which are at a higher risk of violent incidents. California, Connecticut, Illinois, Louisiana, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Texas, and Washington all have laws or regulations that require healthcare employers to implement workplace violence prevention programs.
New workplace violence bills are popping up across the country that could create a host of new compliance obligations for employers, such as requiring employers to develop workplace violence prevention plans, conduct risk assessments, and track and report incidents of workplace violence.
Here is a breakdown of state workplace violence prevention bills being considered in statehouses across the United States this year.
Alaska
Senate Bill (SB) 49—Workplace violence protective orders.
SB 49 was prefiled in the Alaska Senate on January 17, 2025. The bill would enable employers in Alaska to file for workplace violence protective orders against individuals who have committed an act of violence against an employer or employee in a workplace or who made “a threat of violence against the employer or an employee that can reasonably be construed as a threat that may be carried out at the employer’s workplace.” The bill outlines the process for obtaining standard and ex parte protective orders, including the conditions under which they can be issued and the types of relief they can provide. It also would amend existing laws to include workplace violence protective orders and specify the responsibilities of district judges and magistrates in issuing these orders. The bill requires amendments to Alaska’s Rules of Civil Procedure and Rules of Administration It would take effect on January 1, 2026, if it receives the necessary two-thirds majority vote in each house.
Massachusetts
Bill HD.1856—Human service employers.
Massachusetts has several legislative proposals to address workplace safety. HD.1856 would mandate that human service employers in Massachusetts conduct annual risk assessments to identify factors that may put employees at risk of workplace violence and develop a program to minimize these dangers, including employee training and incident reporting systems. Employers would be required to create a written violence prevention plan, make it available to employees and labor organizations, and designate a senior manager to support an in-house crisis response team for employee victims of workplace violence. The bill would also authorize the commissioner of labor to adopt necessary rules and regulations and impose fines for noncompliance while protecting employees from retaliation for reporting workplace violence concerns.
Bill HD.3502 / Bill SD.1639—Healthcare facilities.
HD.3502 and SD.1639 would require healthcare employers in Massachusetts to conduct annual risk assessments to identify factors that may put employees at risk of workplace violence and develop a program to minimize these dangers, including employee training and incident reporting systems. Employers would be required to create a written violence prevention plan, make it available to employees and labor organizations, and designate a senior manager “responsible for the development and support of an in-house crisis response team for employee-victims of workplace violence.”
The bills would further require healthcare facilities to permit employees to take paid leave if they have been the victim of workplace violence and will use the leave to “obtain victim services or legal assistance.” Healthcare employers would also be required to report incidents of workplace violence annually. Additionally, the bills would direct the commissioner of public health to adopt rules and regulations within 180 days of enactment. The bill also includes provisions for improving data sharing and collaboration between healthcare facilities and public safety entities.
Bill HD.2124 / Bill SD.1307—Home healthcare workers.
Bill HD.2124 and SD.1307 would mandate that home healthcare employers in Massachusetts provide annual comprehensive workplace safety training and develop programs to minimize workplace violence risks for home healthcare workers. Employers would be required to conduct safety assessments of service settings, provide workers with communication devices and alarms, and allow workers to refuse service in dangerous situations without penalty. The bill would also require the designation of a senior manager to support an in-house crisis response team and mandate biannual reports on incidents of workplace violence. Additionally, the bill would entitle home healthcare workers to up to seven days of paid leave in a twelve-month period if they are victims of workplace violence and they use the leave to obtain victim services or legal assistance.
New York
Assembly Bill (A) 203—Hospital workplace violence prevention programs.
A203, introduced on January 8, 2025, would require all general hospitals in New York to establish violence prevention programs in accordance with the Centers for Medicare and Medicaid Services (CMS) conditions of participation and workplace violence standards of accrediting organizations. Hospitals in cities or counties with populations of 1 million or more would be required to always have at least one off-duty law enforcement officer or trained security personnel present in the emergency department. Hospitals in areas with populations less than 1 million would be required to have similar security personnel on premises with proximity to the emergency department a priority. The requirement would not apply to critical access hospitals, sole community hospitals, or rural emergency hospitals unless they experience increased rates of violence. The bill would take effect 280 days after becoming law.
J28—Memorializing Workplace Violence Prevention Month.
On January 14, 2025, the New York Senate adopted Senate Resolution No. 28, memorializing Governor Kathy Hochul’s proclamation, which designated April 2025 as Workplace Violence Prevention Month in the State of New York. April is already recognized as the National Workplace Violence Prevention Month on the federal level.
Senate Bill (S) 740 / Assembly Bill (A) 1678—Chapter Amendments to New York Retail Worker Safety Act.
On February 14, 2025, Governor Hochul signed Chapter Amendments (S740/A1678) into law amending the New York Retail Worker Safety Act, a comprehensive measure intended to increase worker safety and address workplace safety hazards in retail settings signed into law in September 2024. The recent amendments changed the requirement for “panic buttons” that would immediately alert law enforcement to a requirement for “silent response buttons” (SRBs) that alert internal staff (security officers, managers, or supervisors). Effective January 1, 2027, SRBs will be required for employers with 500 or more retail employees in New York, not nationwide. Also, employers with fewer than fifty retail employees now only need to provide workplace violence training to their retail employees upon hire, and then every other year rather than annually.
Ohio
House Bill (HB) 452—Hospital systems workplace violence policies.
On January 8, 2025, Ohio Governor Mike DeWine signed HB 452 into law, which is set to go into effect on April 9, 2025. The legislation will require hospitals and hospital systems to establish security plans to prevent workplace violence. The plans must be developed with input from a team that includes current or former patients and healthcare employees who provide direct patient care and be based on a security risk assessment that addresses high-risk areas such as emergency and psychiatric departments.
Hospitals will be required to ensure that security personnel receive training on de-escalation techniques and ensure that “at least one hospital employee trained in de-escalation practices [is] present at all times in the hospital’s emergency department and psychiatric department.” Additionally, hospitals will be required to establish a workplace violence incident reporting system and track such incidents. Hospitals will also be prohibited from discriminating or retaliating against employees who report incidents or participate in investigations.
Oregon
House Bill (HB) 2552—Healthcare entities workplace violence prevention.
HB 2552, introduced on January 13, 2025, would establish new workplace violence prevention requirements for healthcare entities in Oregon. The bill would mandate the development of safety committees, periodic safety assessments, and annual employee training. It would also require healthcare employers to compile and report data on workplace violence incidents to the Oregon Department of Consumer and Business Services.
It would further mandate the Oregon Health Authority to create a grant program to fund workplace violence prevention efforts. Additionally, the bill includes provisions for posting signage, implementing flagging systems for potential threats, and enhancing safety measures for home healthcare staff. The bill would take effect ninety-one days after the 2025 legislative session permanently adjourns, with full implementation by January 1, 2026.
Senate Bill (SB) 537—Healthcare entities workplace violence prevention.
Similarly to HB 2552, SB 537 would establish new workplace violence prevention requirements for healthcare entities in Oregon and contain some similar requirements. However, SB 537 would require the development of safety committees, periodic safety assessments, and annual employee training. The bill would also require healthcare employers to compile and report data on workplace violence incidents to the Oregon Department of Consumer and Business Services. The bill would also take effect ninety-one days after the 2025 legislative session, with full implementation by January 1, 2026.
Virginia
House Bill (HB) 1919—Workplace violence policies.
On March 7, 2025, the Virginia General Assembly passed HB 1919, and the bill is currently waiting for signature by Governor Glenn Youngkin. The bill would require that by January 1, 2027, Virginia employers with one hundred or more employees “develop, implement, and maintain” a workplace violence policy. The policy must include a “mechanism for employees to report workplace violence” and measures to protect workplace safety. The plan must also be “tailored and specific to conditions and hazards” at an employer’s workplace and include identifying individuals or teams responsible for implementing the policy. The bill would further make it unlawful for employers to discriminate or retaliate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities.
House Bill (HB) 1620—Work group to evaluate workplace violence.
HB 1620, which was prefiled in the state House of Delegates on January 3, 2025, would direct the Virginia Department of Labor and Industry to “convene a work group for the purpose of evaluating the prevalence of workplace violence” in the state. The workgroup would “develop recommendations related to (a) maintaining healthy, safe, and secure work environments; (b) educating employers and employees and communicating to them techniques to effectively handle conflicts in the workplace; and (c) employee support services designed to address workplace violence. The bill is currently tabled in committee.
Washington
Substitute House Bill (HB) 1162—Healthcare employer workplace violence prevention plans.
HB 1162 was one of two workplace violence prevention bills introduced in Washington in January 2025 along with a companion legislation, Senate Bill (SB) 5162. The bill would require healthcare employers to develop and implement a workplace violence prevention plan with input from safety or workplace violence committees. The plans would address security considerations, staffing, job design, emergency procedures, reporting of violent acts, employee training, and support for affected employees. Healthcare settings would also be required to conduct timely investigations of workplace violence incidents, review contributing factors, and submit summaries of findings and recommendations to the relevant committee. The bill would mandate annual reviews and updates of the prevention plans and take effect on January 1, 2026.
SB 5162—Healthcare employer workplace violence plans.
While SB 5162 contains similar provisions, it differs in the specifics of committee involvement, reporting requirements, and incident investigation details. The bill would also take effect on January 1, 2026
Wyoming
House Bill No. HB0155—Hospital workplace violence reporting.
HB0155 would require “[e]very hospital, health care clinic and long-term care facility that receives any state funds” to report incidents of workplace violence against health care providers to the Wyoming Department of Workforce Services on a monthly basis starting August 1, 2025. Such reports would be required to include details about the perpetrators, contributing risk factors, types of incidents, victims by job type, and locations of the incidents. The Department of Workforce Services would be required to compile this information and report it to the Joint Labor, Health, and Social Services Interim Committee by October 1, 2026. The bill would further mandate the creation of a standardized reporting form and require rulemaking to implement its provisions, with an effective date of July 1, 2025, for most sections.
Delaware’s Fight to Remain Preeminent Home for Corporations
Delaware is feeling the pressure of backlash from resident corporations over recent decisions by the Delaware Court of Chancery in stockholder litigation, as well as from significant competition from other states, like Texas and Nevada, which are making material changes to their respective corporate laws to attract corporations looking for a friendlier new home state. As Foley reported previously, Texas is vying hard to become the preferred jurisdiction for legal domestication. Senate Bill No. 29 and companion House Bill 15 were filed in the Texas Legislature on February 27, 2025. Those bills introduce a series of corporate reforms, the most significant of which include the codification of the so-called “business judgment rule” and the permission for Texas corporations to adopt an ownership threshold that must be met for derivative claims.
And that is only the most recent step by Texas. In September 2024, Texas opened a statewide business court judicial district modeled after Delaware’s Court of Chancery to accommodate the booming corporate community in Texas, which only continues to grow due to a number of geographic and economic factors. Texas Governor Greg Abbott also recently announced the creation of the Texas Stock Exchange, which will begin facilitating trades and listings in Dallas in 2026. Nevada also has a leg in this race. Its legislature introduced Assembly Bill 239 on February 17, 2025, which, among other things, introduces new processes for reorganizations and revises processes for which a board of directors approves a plan of merger, conversion, or exchange. Notably, that bill also proposes to amend Nevada’s codification of the business judgment rule to require directors to act on an “informed basis.”
To preserve its position as the premier “home” to American corporations, the Delaware legislature is likewise proposing changes to Delaware corporate law. On February 17, 2025, it introduced Senate Bill 21. Among other things, that bill would establish:
New safe harbor protections for directors, officers, or controlling stockholders or control groups, shielding such individuals or groups of individuals from liability if they have interests rendering them “not independent” regarding transactions or other actions taken, and terms for deeming directors and stockholders independent (see proposed revisions and amendments to § 144 of Title 8 of the Delaware Code);
An amendment to stockholder books and records inspection rights to limit by definition the materials a stockholder may demand to inspect and to impose conditions upon bringing a demand to inspect a corporation’s books and records (see proposed revisions and amendments to § 220 of Title 8 of the Delaware Code); and
That controlling stockholders and control groups cannot be held liable for monetary damages for breach of the duty of care (see proposed revisions and amendments to § 144(c) of Title 8 of the Delaware Code).
Among other things, these proposed changes to Delaware’s corporate law seek to ease the volume of stockholder litigation brought in the state, as well as class attorney fees resulting from any successful stockholder action. However, these proposed changes are facing substantial pushback within the state, only a few weeks after the bill’s introduction. Part of that pushback stems from the source of the bill itself — reportedly, it was quickly developed by a working group convened by Delaware’s recently elected Governor Matt Meyer, who specifically cited concern with corporate rumblings of charters moving to other states, like Texas.
Only in its infancy, Delaware’s Senate Bill 21 has already had practical effects, with a stockholder complaint filed in the Court of Chancery on February 26, 2025, alleging that the defendant corporation has strategically (but improperly) avoided direct demands for inspection of books and records in reliance on Senate Bill 21, anticipating its passage will avoid liability as to the corporation. See Assad v. Altair Engineering Inc., No. 2025-0217 (Del. Ch. Ct.).
As the discord between stockholders or other plaintiff classes affected by corporate law and corporations continues to grow within Delaware and its Chancery Court, in the midst of immense competition from Texas, Nevada, and other states, it is yet to be seen whether Delaware can maintain its position as the preeminent home for America’s corporations and, consequently, where and with what success stockholders can file and maintain actions against the corporations in which they own interests.
HHS Secretary Kennedy Directs FDA to Consider Eliminating Self-GRAS Determinations
Is this the start of RFK, Jr., making good on his promise to transform the food industry?
Newly appointed Secretary of Health and Human Services (HHS), Robert F. Kennedy, Jr., directed the U.S. Food and Drug Administration (FDA) to “take steps to explore potential rulemaking to revise its Substances Generally Recognized as Safe (GRAS) Final Rule and related guidance to eliminate the self-affirmed GRAS pathway [1],” on March 10, 2025.
The stated rationale for directing FDA to explore the potential elimination of self-GRAS determinations is to “bring transparency to American consumers” about what ingredients are in the nation’s food supply and to close a “loophole that has allowed new ingredients and chemicals, often with unknown safety data, to be introduced into the U.S. food supply without notification to the FDA or the public,” according to Secretary Kennedy.
Authorization clearing the use of GRAS substances in food stems from the 1958 Food Additive Amendments, which amended the Federal Food, Drug, and Cosmetic Act (FFDCA) to require premarket clearance by FDA for “food additives.” In defining the term “food additive,” Congress specifically excluded from that definition substances that are “generally recognized as safe.” By so doing, Congress exempted GRAS substances from the Food and Drug Administration’s premarket review authority over food additives. (GRAS substances are defined under Section 201(s) in the Act as substances that are “generally recognized, among experts qualified by scientific training and experience to evaluate [their] safety . . . under the conditions of [their] intended use [2].”)
The GRAS Final Rule that the Secretary directed FDA to revise was published in August 2016 and has been effective since October of that year [3]. The rule formally established a voluntary notification process that allowed FDA to consider and comment on, as needed, the GRAS determinations made by industry. In practice, though, FDA began accepting these GRAS notifications in 1997. The GRAS submissions with accompanying data are linked to an FDA Inventory, along with comments made by the Agency on the submissions. Currently, there are 1219 GRAS submissions listed on the Inventory. FDA evaluates an estimated 75 a year. (Prior to 1997, companies were free to petition FDA to affirm by regulation a determination that a substance was GRAS for its intended use. See 21 C.F.R. Part 184.)
Given the personnel cuts and budget shortages being faced by FDA, it remains to be seen whether FDA will have the resources to effectively undertake the regulatory review in any timely way.
There is also a significant question as to what, if any, authority FDA has “to eliminate the self-affirmed GRAS pathway” as described in the press release, without amendment of the Food, Drug, and Cosmetic Act. Right now, the law provides FDA with jurisdiction to authorize only food additives, as defined in the Act, to be used in food. Since the definition of food additive excludes, among other things, GRAS substances, FDA does not have much room, if any, to regulate these substances beyond the way they already have.
Until the day that FDA completes its task of exploring regulatory pathways to end self-GRAS determinations, or Congress intervenes in the meantime to act on the matter, the Secretary’s announcement has no legal effect on the status of ingredients currently marketed.
[1] HHS Secretary Kennedy Directs FDA to Explore Rulemaking to Eliminate Pathway for Companies to Self-Affirm Food Ingredients Are Safe | HHS.gov
[2] See the Food Additives Amendment Act of 1958, signed into law on September 6, 1958, and amending the Federal Food, Drug, and Cosmetic Act of 1938, 21 U.S.C. § 301 et seq.
[3] Federal Register :: Substances Generally Recognized as Safe
U.S. Consumer Privacy Laws Taking Effect in 2025 and Ensuing Compliance Complexities
The United States continues to operate without a comprehensive federal consumer privacy law as the American Privacy Rights Act remains subject to further amendments and uncertainty. Consequently, nineteen states enacted comprehensive consumer privacy legislation, of which eight are becoming or have become effective in 2025, and some existing state privacy laws have been amended since their enactment. This fragmented approach creates compliance complexities and operational considerations for organizations operating at state and national levels.
Comprehensive consumer privacy laws taking effect in 2025
Effective date
State comprehensive consumer privacy laws
January 1, 2025
• Delaware Personal Data Privacy Act• Iowa Consumer Data Protection Act• Nebraska Data Privacy Act• New Hampshire Senate Bill 255
July 1, 2025
• Tennessee Information Protection Act
July 31, 2025
• Minnesota Consumer Data Privacy Act
October 1, 2025
• Maryland Online Data Privacy Act
General requirements across each law
Each state law mandates distinct, jurisdiction-specific obligations on regulated organizations, which generally include the following:
Consumer rights: Each state law grants consumers certain privacy rights. While consumers’ privacy rights vary from state to state, consumers may be granted the right, subject to certain exceptions, to: (1) access, correct and delete data that an organization collects from or about them; (2) opt-out of further data processing; (3) the right to data portability and to direct the transfer of their personal information; and (4) the right to restrict and limit the use and disclosure of sensitive personal information.
Organizational compliance obligations: Each state law also imposes certain obligations on regulated entities acting as a data controller (i.e., an entity that controls the purpose and means of processing personal data) and data processors (i.e., third parties that process data under the direction and control of data controllers, such as service providers or vendors). Regulated organizations acting as data controllers may be obligated to, among other things, respond to consumer privacy requests, implement reasonable technical and organizational security measures, provide consumers with a notice of privacy practices and a mechanism through which consumers may opt out of data processing.
Key compliance considerations
In light of the complexities highlighted above, organizations should reflect on the following compliance considerations:
Whether your organization’s corporate policies are compliant with new privacy legislation.
With several new legislative updates, organizational corporate policies, such as privacy policies and privacy notices, may become dated and/or noncompliant with the most recent and looming updates. It is recommended practice for organizations to routinely evaluate their corporate policies to ensure compliance with any updated regulatory requirements and implement changes to the extent necessary.
Whether your organization is equipped to respond to consumer privacy requests.
Responding to consumer privacy requests may be problematic for organizations operating across multiple states due to variance among consumer privacy rights, related nuances and exceptions. Organizations should evaluate the various privacy rights and exceptions, if any, in states in which they operate and establish a playbook to implement an efficient and effective response.
Whether your organization is exempt from compliance.
Some privacy laws provide for entity-level and data-level exemptions, subject to certain nuances. An entity-level exemption generally exempts an organization based on the type of entity. For example, some states include an entity-level exemption for not for profit corporations or entities regulated by certain federal laws, such as the Health Insurance Portability and Accountability Act (HIPAA). A data-level exemption exempts certain data that is subject to regulation under certain federal laws, such as HIPAA and the Gramm-Leach-Bliley Act.
In addition, some states have an operational threshold that an organization must meet or exceed to be subject to the relevant act. For example, in Delaware, an organization must (1) do organization in the state or produce products or services that are targeted to Delaware residents, and (2) one of the following must apply: (i) control or process personal data of 35,000 or more consumers, excluding personal data controlled or processed solely for the purpose of completing a payment transaction or (ii) (a) control or process personal data of 10,000 or more consumer and (b) derive more than 20% of its gross revenue from the sale of personal data.
Organizations should evaluate whether they may be exempt from certain state laws and, if so exempt, how that might impact their corporate policies and go-to-market strategies.
Limits on Physician Noncompete Agreements: Navigating New State Laws and Legislation
As anticipated, following the end of the Federal Trade Commission’s proposed rule prohibiting employer noncompetes, states have ramped up their efforts toward limiting noncompete agreements, including some states that have specifically focused on health care noncompetes.
We previously reported in 2024 that Pennsylvania passed The Fair Contracting for Health Care Practitioners Act that prohibited the enforcement of certain noncompete covenants entered into by health care practitioners and employers. Now, Louisiana, Maryland, and Indiana join the list of states limiting, or attempting to limit, the use of noncompete agreements in the health care industry.
Louisiana
On January 1, 2025, Act No. 273 (f/k/a Senate Bill 165) (the “Act”) became effective following Governor Jeff Landry’s approval. The Act enacts three subsections to Section 23:921, M, N, and O, which, as discussed further below, generally limit the timeframe and geographical scope of noncompetes for primary care and specialty physicians.
Subsection (M) of the Act prohibits agreements that restrain a primary care physician—defined as “a physician who predominantly practices general family medicine, general internal medicine, general pediatrics, general obstetrics, or general gynecology”—from practicing medicine for more than three years from the effective date of the initial contract or agreement. A subsequent agreement between the employer and primary care physician after the three-year term cannot include a noncompete. Should a primary care physician terminate the agreement prior to the three-year term, the primary care physician can be prohibited, for no more than two years from termination of employment, from “carrying on or engaging in a business similar to that of the employer in the parish[1] [defined in employer agreement] in which the primary care physician’s principal place of practice is located and no more than two contiguous parishes in which the employer carries on a like business.”
Subsection (N) applies to “any physician other than a primary care physician,” generally defined as a “specialty physician.” Subsection (N) prohibits a contract or agreement that restrains a specialty physician from practicing medicine for more than five years from the effective date of the initial contract or agreement, and a subsequent agreement after five years cannot include a noncompete. Should a specialty physician terminate the agreement prior to the five-year term, the same limiting provision as subsection (M) applies.
Lastly, subsection (O) of the Act exempts from the Act’s prohibitions (1) a “physician who is employed by or under contract with a rural hospital as provided for in the Rural Hospital Preservation Act,” and (2) a “physician who is employed by or under contract with a federally qualified healthcare center[.]”
The Act applies to any contract or agreement entered into on or after January 1, 2025. For any contract or agreement prior to the effective date, the initial three-or-five-year term and geographical limitation listed in the Act will begin on January 1, 2025.
Maryland
Maryland also joins the list of states limiting physician noncompetes. Maryland House Bill 1388 (HB 1388), will become effective July 1, 2025, and amends Maryland’s Annotated Code Labor and Employment Section 3-716(a) to ban certain veterinary and health care noncompete agreements and conflict of interest provisions “that restrict the ability of an employee to enter into employment with a new employer or to become self-employed in the same or similar business.”
HB 1388 prohibits noncompetes and conflict of interest provisions between an employer and employee who (1) “earns equal to or less than 150% of the State minimum wage . . . ,” (2) is required to be licensed under Maryland’s Health Occupations Article or is employed in a position that “provides direct patient care,” and earns equal to or less than $350,000 per year, or (3) is a licensed veterinary practitioner or technician under Maryland’s Agriculture Article.
For an employee who is required to be licensed under Maryland’s Health Occupations Article or “provides direct patient care,” and earns more than $350,000 per year, a noncompete agreement or conflict of interest provision is permitted only for one year from the last day of employment and cannot exceed ten miles from the primary place of employment. If a patient requests the new location of the former employee, an employer must provide the requested information.
Indiana
As recent as January 13, 2025, Indiana’s Senate introduced Senate Bill 45 (SB 45) which, if enacted, would, among other things unrelated to noncompetes, ban physicians and employers from entering into any noncompete. SB 45 would not apply to any physician noncompete entered into before the effective date, but rather, only apply proactively. SB 45 does not contain any other exceptions.
These three states are just the recent developments in legislation across the country which demonstrate a growing trend toward limiting or banning noncompete agreements, particularly in healthcare industries. It is likely other states will follow. We will continue to monitor SB 45 and provide further updates on this topic.
Gianna Dano, a Law Clerk in Epstein Becker & Green’s Newark Office (not admitted to practice), contributed to the preparation of this piece.
[1] “Parish” refers to a local government subdivision in Louisiana, which is analogous to a county in other states.
New York Legislature’s Proposed Amendments Would Impact Employment Agreements
Two bills recently introduced in New York’s legislature could have a major impact on New York employers seeking to enter into employment-related agreements with employees.
Invalidating “Unconscionable” Contract Terms
On January 8, 2025, Assembly Bill No. 636 was introduced to amend the New York General Business Law (GBL). If passed, the bill would add a new section to the GBL that would invalidate certain terms in standard form contacts regarding dispute resolution on the grounds that such terms are substantively unconscionable. A “standard form contract” is defined in the bill as “any contract to which only one of the parties is an individual and that individual does not draft the contract.”
The bill outlines a rebuttable presumption that the following terms are substantively unconscionable, and therefore impermissible, when included in a standard form contract:
A requirement for the parties to resolve legal claims in an “inconvenient venue;”
For state claims, an “inconvenient venue” is defined as “a place other than the county where the individual resides or the contract was consummated;” and
For federal claims, an “inconvenient venue” is defined as “a place other than the federal judicial district where the individual resides or the contract was consummated.”
A waiver of an employee’s right to assert claims or seek remedies under state or federal law;
A waiver to seek punitive damages;
A requirement to bring an action prior to the expiration of the applicable statute of limitations; and
A requirement that an employee pay fees and costs to bring a legal claim that substantially exceeds the fees and costs to initiate a state or federal court action.
The bill states that these unconscionable terms “discourage valid claims” and further describes them as “unfair to the party that is forced to agree to these terms.” The bill also provides that standard form contracts must advise an individual of their right to consult with an attorney concerning the legal document, and give a reasonable time in which to review the contract with such attorney.
Under the bill, aggrieved employees would have a private right of action where they could seek statutory damages of $1,000 per violation. Additionally, an employer’s violation would be considered an “unfair and deceptive trade practice” that may be prosecuted by the Office of the New York State Attorney General.
If passed, the bill would take effect on the first of January next succeeding the date in which it becomes a law, and will apply to contracts entered into after such date. On February 14, 2025, an identical Senate Bill was also introduced.
Invalidating Waiver of Employment Rights
On February 4, 2025, Senate Bill No. 4424 was introduced that would amend the New York Labor Law (NYLL) and the New York State Human Rights Law (NYSHRL). If passed, the bill would add new sections to both laws and invalidate contractual provisions waiving or limiting “any employee’s substantive or procedural rights, remedies, or claim.”
Notably, the bill carves out significant exceptions for waivers mutually agreed to and included in “the settlement of any good faith bona fide dispute in which an employee raises a claim against their employer” or “an agreement entered upon or following the termination of an employee’s employment.” The bill clarifies that the provisions of this subdivision shall not apply where application of such provisions “would be preempted by federal law.”
If passed, the bill would take effect immediately. On February 13, 2025, an identical Assembly Bill was also introduced.
What Do Employers Need to Know?
These bills have not been signed into law, so employers are currently under no new obligations when entering into employment-related agreements with employees. However, the introduction of these bills signals an interest in the New York State Legislature to restrict certain terms in employment-related agreements.
Employers should keep an eye on these bills moving forward, and should review their employment agreements to ensure compliance if these bills are ultimately enacted.
Federal Judge Clarifies Scope of Preliminary Injunction Enjoining President Trump’s DEI-Related Executive Orders
On March 10, 2025, a federal judge in Maryland clarified the scope of the nationwide preliminary injunction that enjoins key portions of two of President Donald Trump’s diversity, equity, and inclusion (DEI)–related executive orders (EOs), stating that the injunction applies to all federal agencies.
Quick Hits
On February 21, 2025, a federal judge granted a nationwide preliminary injunction that enjoined key provisions of President Trump’s executive orders aimed at “illegal” DEI initiatives.
On March 3, 2025, the judge refused to halt the preliminary injunction, pending the government’s appeal to the Fourth Circuit Court of Appeals.
On March 10, 2025, the judge clarified that the preliminary injunction applies to all federal executive branch agencies, departments, and commissions, not just those that were specifically named in the complaint.
U.S. District Judge Adam B. Abelson clarified that the nationwide preliminary injunction enjoining the termination, certification, and enforcement provisions of EO 14151 and EO 14173 “applies to and binds Defendants other than the President, as well as all other federal executive branch agencies, departments, and commissions, and their heads, officers, agents, and subdivisions directed pursuant to” those executive orders.
The court’s February 21, 2025, preliminary injunction order defined the “Enjoined Parties” as “Defendants other than the President, and other persons who are in active concert or participation with Defendants.” The plaintiffs filed a motion to clarify the scope of the order. The government argued that the court lacked jurisdiction to rule on the motion, and that only the specific departments, agencies, and commissions named as additional defendants in the complaint were bound by the preliminary injunction. The complaint named the following defendants: the Office of Management and Budget, the U.S. Departments of Justice, Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, and Transportation, along with the heads of those agencies (in their official capacities), the National Science Foundation, and President Trump in his official capacity. The government argued that including other departments, agencies, and commissions as enjoined parties would be inconsistent with Federal Rule of Civil Procedure 65(d), Article III of the U.S. Constitution’s standing requirement, and traditional principles of equity and preliminary injunctive relief.
The court disagreed. First, according to the court, the plaintiffs have shown a likelihood of success on the merits that the termination, certification, and enforcement provisions are unconstitutional, so any agencies acting pursuant to those provisions “would be acting pursuant to an order that Plaintiffs have shown a strong likelihood of success in establishing is unconstitutional on its face.”
Second, the termination and certification provisions were directed to all agencies, the enforcement provision was directed to the U.S. Department of Justice, and the president was named as a defendant in the complaint; thus, the preliminary injunction (in both its original and clarified forms) “is tailored to the executive branch agencies, departments and commissions that were directed, and have acted or may act, pursuant to the President’s directives in the Challenged Provisions of” EO 14151 and EO 14173.
Third, only enjoining those agencies that were specifically named in the complaint, despite the fact that the president was named as a defendant, would provide incomplete relief to the plaintiffs because their speech is at risk of being chilled by non-named agencies as well. In addition, the court held that “[a]rtificially limiting the preliminary injunction in the way Defendants propose also would make the termination status of a federal grant, or the requirement to certify compliance by a federal contractor, turn on which federal executive agency the grantee or contractor relies on for current or future federal funding—even though the agencies would be acting pursuant to the exact same Challenged Provisions,” resulting in “‘inequitable treatment.’” Thus, the court granted the plaintiffs’ motion to clarify that the preliminary injunction applies to every agency in the executive branch.
The North Carolina General Assembly’s 2025 Session: Employment-Related Bills to Watch
The 2025 session of the North Carolina General Assembly is in full swing. Here is a list of proposed legislation that employers should pay attention to.
Quick Hits
The 2025 session of the North Carolina General Assembly is considering employment-related bills related to union organizing and collective bargaining, nondiscrimination in the workplace, noncompete and nonpoaching agreements, and DEI.
Senate Bill 120 / House Bill 207 aim to prohibit employers from restricting labor organizations and requiring employees to refrain from union membership as a condition of employment.
Senate Bill 154 / House Bill 168 seek to prevent hair-based discrimination in workplaces, schools, and public spaces by expanding the definition of race-based discrimination to include traits historically associated with race, such as natural hairstyles.
House Bill 269 would ban noncompete and nonpoaching agreements for employees earning less than $75,000 a year, effective July 1, 2025.
Remove Barriers to Labor Organizing (Senate Bill 120 and House Bill 207)
Senate Bill (SB) 120 and House Bill (HB) 207, short-titled, “Remove Barriers to Labor Organizing,” was referred to the North Carolina House of Representatives’ Rules, Calendar, and Operations of the House Committee and the North Carolina Senate’s Rules and Operations of the Senate Committee in late February. The legislation would prohibit employers from restricting labor organizations and associations from organizing within the state. This prohibition would restrict employers from requiring employees to refrain from union membership as a condition of employment or continued employment.
North Carolina CROWN Act (Senate Bill 154 and House Bill 168)
The North Carolina CROWN Act legislationwas reintroduced this session and echoes the bipartisan federal “Creating a Respectful and Open World for Natural Hair Act,” or “CROWN Act,” bill introduced in February 2025 by Senators Cory Booker (D-NJ) and Susan Collins (R-ME). The North Carolina CROWN Actwould protect individuals in the state from hair-based discrimination and retaliation in workplaces, schools, and public spaces. That includes preventing employers from enacting or enforcing policies on hair and grooming that would disproportionately affect people with “natural” or “cultural” hairstyles, including Bantu knots, braids, locks, and twists. It would also expand the definition of race-based discrimination to include “traits historically associated with race, including but not limited to, hair texture, hair type, and protective styles.” More than half of the states have enacted CROWN Act bills.
Equality in State Agencies/Prohibition on DEI (House Bill 171)
HB 171, short-titled, “Equality in State Agencies/Prohibition on DEI,” would apply to state employers and would prohibit any state agency from “promoting, supporting, funding, implementing, or maintaining workplace DEI programs, policies, or initiatives,” including in state government hiring and employment. The bill would eliminate all dedicated diversity, equity, and inclusion (DEI) staff positions and offices and end all DEI-related training. It would also prohibit any state agency or unit of local government from using public funds for DEI initiatives, including federal funds. All state agencies and local governmental units would be required to create annual public posts detailing their compliance. Further, the bill would make it a crime to act in any way deemed contrary to promote or support DEI in state and local government.
Workforce Freedom and Protection Act (House Bill 269)
HB 269, named the “Workforce Freedom and Protection Act,” was introduced in the House in March and would prohibit noncompete and nonpoaching agreements in the state. The prohibition against noncompete agreements would apply to employees making less than $75,000 a year and would disallow any agreements restricting the employee’s right to work for another employer for any period of time, work in a specific geographic area, or from engaging in work activities performed for the employer. These restrictions would be in effect as of July 1, 2025, and would ban employers from entering into noncompete agreements as of that date. The bill would also prohibit “non-poaching” agreements, which are agreements between employers that restricts one employer from soliciting, recruiting, or hiring employees from the other employer, or in any way prevents companies from competing against each other for employees.
Allow Public Employee Collective Bargaining (House Bill 256)
HB 256, introduced in the House in February, is the second bill introduced in this session to encourage union activity and collective bargaining. Currently, public employees are prohibited from collective bargaining, but this bill would repeal that law, paving the way for North Carolina government employees to engage in union activity.
Reduce Barriers to State Employment (Senate Bill 124 and House Bill 177)
Another pair of bills, SB 124 and HB 177, specifically directed at state employers, seeks to make state employment opportunities more accessible to individuals without four-year college degrees. Titled “An Act to Reduce Barriers to State Employment,” the legislation would direct the North Carolina State Human Resources Commission to assess the educational and experiential requirements for state positions and identify certain positions to remove the four-year college degree requirement, leaning toward other requirements including military service, apprenticeships, and trade schools where appropriate.
The Uncertainty Of Officer Appointments In California LLCs
The California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq., clearly authorizes the appointment of officers:
A written operating agreement may provide for the appointment of officers, including, but not limited to, a chairperson or a president, or both a chairperson and a president, a secretary, a chief financial officer, and any other officers with the titles, powers, and duties as shall be specified in the articles of organization or operating agreement or as determined by the managers or members. An officer may, but does not need to, be a member or manager of the limited liability company, and any number of offices may be held by the same person.
Cal. Corp. Code § 17704.07(u). The CARULLCA even makes provision for the method of the appointment of officers:
Officers, if any, shall be appointed in accordance with the written operating agreement or, if no such provision is made in the operating agreement, any officers shall be appointed by the managers and shall serve at the pleasure of the managers, subject to the rights, if any, of an officer under any contract of employment.
Cal. Corp. Code § 17704.07(v). The use of the plural “managers” suggests that an individual manager does not have the authority. But if an individual manager lacks the authority, what vote is required? The statute is conspicuously silent on this question. Notably, the statute does not use the defined term “majority of the managers”, which unless otherwise provided in the operating agreement, means more than 50% of the managers of the limited liability company. Cal. Corp. Code § 17701.02(l).
These questions can be easily avoided, by answering them in the operating agreement.
New York Health Data Requirements Potentially Ahead: Understanding the Newly Passed Health Information Privacy Act
New York lawmakers recently passed a wide-ranging health information privacy bill that would require entities to obtain consent to collect, use, or sell an individual’s health information except for designated purposes. Notably, the bill broadly defines both regulated entities and regulated health information, and it would potentially impact companies nationwide that may not otherwise consider themselves to be collecting individuals’ private health information.
Quick Hits
New York lawmakers passed a health information privacy bill that, among other obligations, would require entities to obtain authorization to collect, use, or sell an individual’s health information unless it is “strictly necessary” for certain purposes.
The bill broadly defines regulated health information to include data that goes beyond traditional protected health information (PHI) and broadly defines regulated entities to include New York entities and certain non-New York entities.
While there is no private right of action, the bill would empower the state attorney general to seek significant penalties for violations.
The governor must still sign the bill and it would take effect one year after becoming law.
On January 22, 2025, the New York State Legislature passed Senate Bill (S) 929, known as the New York Health Information Privacy Act (New York HIPA). The bill has not yet been sent to Governor Kathy Hochul’s desk for signature. If signed, New York HIPA would take effect one year after becoming law.
In general, New York HIPA would place strict requirements on the collection or “processing” of individual health information or “any information that is reasonably linkable” to an individual’s mental or physical health. It would require authorization to process regulated health information unless it is “strictly necessary” for a specific designated purpose. The bill would further give individuals a right to access and request deletion of their health information and require regulated entities to develop and maintain safeguards to protect health data.
New York HIPA is the latest of a series of state privacy laws being considered and passed in recent years, such as Washington State’s recently enacted My Health My Data Act (MHMDA), which imposes a host of requirements for businesses in Washington concerning the collection of “consumer health data.” That law is at the center of a recently filed and potentially precedent-setting class action alleging that advertising software attached to third-party mobile phone apps unlawfully harvested PHI in the form of location data from millions of users. Unlike Washington’s MHMDA, New York HIPA would not provide a private right of action for individuals to file suit, but New York HIPA would empower the attorney general to enforce the law and allow for the imposition of stiff monetary penalties for violations.
Here is a breakdown of some key New York HIPA bill provisions.
Processing Regulated Health Information
New York HIPA, if enacted, would make it generally unlawful for a regulated entity to sell an individual’s regulated health information to a third party or process such information without a valid authorization unless it is “strictly necessary” for specific purposes. The bill details the requirements for obtaining valid authorization and the permissible purposes for processing without authorization. New York HIPA broadly defines “processing” to include the collection, use, access, sharing, sale, monetization, analysis, and retention, among other actions, of an individual’s regulated health information.
Notably, New York HIPA defines “regulated health information” broadly as “any information reasonably linkable” to an individual or device that “is collected or processed in connection with an individual’s physical or mental health,” including “location or payment information that relates to an individual’s physical or mental health” or “any inference drawn or derived about an individual’s physical or mental health.” This expansive definition could include a wide range of data points or information about individuals that might not typically be considered PHI, such as location data and payment information related to trips to the doctor or the gym.
New York HIPA also includes a broad definition of regulated entities. A “regulated entity” would include both entities located in New York that control the processing of regulated health information, and non-New York entities that control the processing of regulated health information of New York residents or individuals who are “physically present in New York.”
Designated Purposes
New York HIPA also sets forth the designated purposes for collecting or processing an individual’s health information without specific authorization. The collection or processing would need to be “strictly necessary” for:
providing a product or service that the individual has requested;
conducting internal business operations, excluding marketing, advertising, research and development, or providing products or services to third parties;
protecting against fraud or illegal activity;
detecting and responding to security threats;
protecting the individual’s “vital interests”; or
investigating or defending a legal claim.
Requests for Authorization
Under the bill, an authorization request must be separate from any other transaction, and individuals must be allowed to withhold authorization separately for each kind of processing. A “valid authorization” must also include several specific disclosures, including “the nature of the processing activity” and “the specific purposes for such processing.”
Individual Rights
New York HIPA would further require regulated entities to provide an “easy-to-use mechanism” for individuals to request access to and delete their regulated health information. Regulated entities would be required to provide access to or delete health data within thirty days of a request. If using a service provider, regulated entities would be required to communicate the request to a service provider within thirty days “[u]nless it proves impossible or involves disproportionate effort.”
Exemptions
The bill exempts certain information from its provisions, including:
“information processed by local, state, and federal governments, and municipal corporations”;
PHI governed by federal regulations under the Health Insurance Portability and Accountability Act (HIPAA);
covered entities governed by HIPAA; and
certain information collected as part of clinical trials.
Notably, the bill does not exempt entities subject to the Gramm-Leach-Bliley Act. Further, the bill does not exempt “business associates” under HIPAA with respect to “regulated health information” that goes beyond traditional PHI.
Security Safeguards
Under New York HIPA, regulated entities would be required to develop and maintain reasonable safeguards to protect the security, confidentiality, and integrity of regulated health information. They would also be required to securely dispose of such information according to a publicly available retention schedule.
The bill does not address the obligations of a regulated entity in the event of a data breach. New York’s data breach notification law (General Business Law § 899-aa), however, was recently amended to expand the definition of “private information” to include medical information and health insurance information, and to impose a thirty-day deadline for businesses to notify New York residents impacted by a data breach.
Service Providers
The bill would require any processing of health information by service providers on behalf of regulated entities to be governed by a written agreement. That agreement would need to include specific obligations for the service provider, such as ensuring confidentiality, protecting the data, and complying with individual rights requests.
Contracts and Waivers
Any contractual provision or waiver inconsistent with New York HIPA would be declared void and unenforceable, meaning individuals would not be able to waive their rights under the law.
Enforcement
New York HIPA would empower the state attorney general to investigate alleged breaches of the privacy requirements and bring enforcement actions. Such actions could result in civil penalties of up to $15,000 per violation or up to 20 percent of the revenue obtained from New York consumers within the past fiscal year, whichever is greater. The bill would also give the attorney general the ability to enjoin violations, seek restitution, and obtain the disgorgement of profits “obtained directly or indirectly” by any violations. Unlike Washington State’s MHMDA, the bill does not include a private right of action for individuals to sue for violations.
Next Steps
New York HIPA underscores the state’s focus, and a broader focus of states across the country, on protecting the privacy of health information. Like Washington’s MHMDA, New York HIPA would broadly define regulated health information as any information reasonably tied to an individual or device and related to an individual’s physical or mental health, including location and payment information. The bill therefore seeks to protect a broader scope of health data than what has been historically viewed as PHI under HIPAA.
New York HIPA has potential far-reaching implications for businesses nationwide that collect or process data of New York residents or individuals located in New York. If the bill is signed into law, such businesses may wish to review and consider changes to their data processing practices, data handling policies, employee training programs, contractual agreements with service providers, and customer agreements. Additionally, they may want to review their websites with respect to collecting user information and providing consumers with opt-outs.
Notably, however, New York HIPA must still be delivered to and signed by Governor Hochul, who may seek to negotiate changes to the bill before signature or effectuate changes later through chapter amendments. The governor has shown a propensity to use such chapter amendments, which refer to changes by the governor that are approved by the legislature through subsequent legislation after the law has been signed. In addition, if enacted, the bill provides that the attorney general can promulgate rules and regulations to enforce the law.
South Carolina House and Senate Introduce Legislation on Diversity, Equity, and Inclusion
State legislators have introduced bills in the South Carolina House of Representatives and South Carolina Senate to amend Title 1, Chapter 1 of the South Carolina Code by adding sections addressing diversity, equity, and inclusion (DEI) for state offices or departments, including all political subdivisions, and institutions of higher learning and school districts.
House Bill 3927 (H. 3927), introduced on February 6, 2025, and Senate Bill 368 (S. 368), introduced on February 20, 2025, are both cited as the “Ending Illegal Discrimination and Restoring Merit-Based Opportunity Act” and use parallel language in seeking to amend the South Carolina Code.
Quick Hits
South Carolina state lawmakers introduced parallel bills in the state House and Senate that follow other recent executive and agency actions at the federal level and offer additional details not present in federal executive orders, such as definitions of “promoting DEI.”
Proposed amendments to the South Carolina Code would require certification of compliance to the General Assembly, as well as require the state auditor to conduct periodic compliance audits.
The bills include several carve-outs, including directly addressing First Amendment protections, which have been raised in several recent lawsuits challenging federal executive orders with similar content.
Defining DEI
On January 21, 2025, President Donald Trump signed Executive Order 14173 (EO 14173), with a nearly identical title as H. 3927 and S. 368—“Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Unlike EO 14173, H. 3927 and S. 368 offer a definition of DEI at proposed Section 1-1-1910(A). Specifically, “promoting diversity, equity, and inclusion” is identified as “any attempt or effort to”:
(1) influence hiring or employment practices with respect to race, sex, color, ethnicity, gender, or sexual orientation other than through the use of color‑blind and sex‑neutral hiring processes in accordance with any applicable state and federal antidiscrimination laws;
(2) promote differential treatment of or providing special benefits to individuals on the basis of race, sex, color, ethnicity, gender, or sexual orientation;
(3) promote policies or procedures designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation for any purpose other than ensuring compliance with any applicable court order or state or federal law; or
(4) conduct trainings, programs, or activities designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation, other than trainings, programs, or activities developed for the sole purpose of ensuring compliance with any applicable court order or state or federal law.
Notably, both the terms “sex” and “gender” are used, as well as sexual orientation, and the list of characteristics in the definition does not include all categories from Title VII of the Civil Rights Act of 1964, as amended, nor does it address all groups protected in other parts of the South Carolina Code of Laws—such as under the South Carolina Human Affairs Law in Section 1-13-20. Three of the four definitional prongs also reference “applicable state and federal antidiscrimination laws”—these references presumably appear to serve both as a marker of prohibited DEI activities and as the sole allowable purpose for certain activities.
Prohibitions
H. 3927 and S. 368 propose at Section 1-1-1910(B) that “every office, division, or other unit by any name of every office or department of this State, and all of its political subdivisions, including all institutions of higher learning and school districts” be prohibited from:
(1) establishing or maintaining an office or division or other unit by any name whose purpose, in whole or in part, is the promotion of diversity, equity, and inclusion;
(2) hiring or assigning an employee or contracting with a third party to promote diversity, equity, and inclusion;
(3) compelling, requiring, inducing, or soliciting any person to provide a diversity, equity, and inclusion statement or give preferential consideration to any person based on the provision of a diversity, equity, and inclusion statement;
(4) giving preference on the basis of race, sex, color, ethnicity, gender, or sexual orientation to an applicant for employment, an employee, or a participant in any function of the office or department; or
(5) requiring as a condition of enrolling at an institution or performing any institution function any person to participate in diversity, equity, and inclusion training, which:
(a) includes a training, program, or activity designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation; and
(b) does not include a training, program, or activity for the sole purpose of ensuring compliance with any applicable court order or state or federal law.
Proposed Section 1-1-1910(C) would require the adoption of policies and procedures to discipline or dismiss employees or contractors who violate the prohibitions above.
Limitations
H. 3927 and S. 368 specifically note that institutions of higher education or an employee of an institution of higher education are not limited or prohibited, “for purposes of applying for a grant or complying with the terms of accreditation by an accrediting agency,” from providing a statement that highlights the institutions’ work in supporting “first-generation college students,” “low-income students,” or “underserved student populations.” Institutions are also not prohibited from certifying compliance with state or federal anti-discrimination laws.
The bills further address exemptions for institutions of higher learning for academic course instruction, scholarly research or creative work, activities of recognized student organizations, guest speakers or performers on short-term engagements, activities enhancing student academic achievement or postgraduate outcomes not based on race, sex, color, ethnicity, gender, or sexual orientation, and data collection.
Section 4 of H. 3927 and S. 368 explain that lawful state and private-sector employment and contracting preferences are not prohibited for veterans of the U.S. Armed Forces or those protected by the Randolph-Sheppard Act, nor is there any intent to prevent First Amendment of the U.S. Constitution protected speech. The direct carve-out of not seeking to chill First Amendment protected speech is noteworthy as it appears to be designed to avoid First Amendment challenges, which has been included in current lawsuits challenging EO 14173, as well as being one of the bases on which a preliminary injunction of EO 14173 was granted on February 21, 2025.
Certification, Testimony, and Audits
H. 3927 and S. 368 also propose to require certifications, elicit testimony before the General Assembly of certifying officials, and have the state auditor conduct compliance audits.
Proposed Section 1-1-1910(F)(1) prohibits “spending any money appropriated or authorized to the office or department until the governing board or chief executive officers, as applicable, submits to the General Assembly a report certifying compliance with this section during the preceding fiscal year,” while the certifying official may be “required to testify at a public hearing of the committee regarding compliance” pursuant to proposed Section 1-1-1910(F)(2). If enacted, this provision would most certainly place greater pressure on certifying officials.
The state auditor would also be tasked under proposed Sections 1-1-1910(F)(3) and (4) with conducting periodic compliance audits “as to whether the money has been expended in violation of this section.” If violations are found, the audited department or office would have 180 days to cure the violation or risk the state auditor notifying the State Fiscal Accountability Authority—which could potentially lead to the state treasurer withholding future distributions until the alleged violations are cured.
Finally, before any agency, office, division, or other unit contracts with a subcontractor for a state-paid project, the applicable subcontractor or grant recipient would also be required to certify that it does not operate any prohibited DEI programs. This requirement in proposed Section 1-1-1920 has the potential to require certifications across the business community in South Carolina and beyond the state, including potentially having certifications connected to state payments applying to nongovernmental private employers.
Next Steps
Currently, both bills have been referred to committee—H. 3927 referred to the Committee on Education and Public Works on February 6, 2025, and S. 368 referred to the Committee on Judiciary on February 20, 2025. On March 5, 2025, the South Carolina Revenue and Fiscal Affairs Office issued a Statement of Estimated Fiscal Impact related to H. 3927 explaining the fiscal impact of the bill and resources and funds that may be needed to carry out the bill’s objectives.
Republicans hold supermajorities in both the South Carolina Senate and House of Representatives, and the South Carolina governor is also a Republican. This could have an impact on how the proposed bills move through the process and, if passed as written, could have important impacts on South Carolina employers and businesses involved with state work. These bills may also be important for employers in other states as they could further signal a more extensive wave of state-based legislation addressing diversity, equity, and inclusion programs.