Family Law / Divorce / Custody

Selling Your Business? What to Do When Family Members Work There but Don’t Own a Piece

For many owners, the business isn’t just a business—it’s their personal legacy. That’s especially true when family members are involved. Maybe your son runs operations or your sister handles HR. They’re not owners, but for years they have been a part of the business’ day-to-day operations.
Now you’re thinking about selling and may wonder:
What happens to them? How do I handle this without creating friction—or derailing the deal?
Here’s what you need to know.
The Emotional vs. Business Balancing Act
Selling a business is one of the biggest financial decisions you’ll ever make. But family involvement can blur the lines between business judgment and personal loyalty.
You may feel a sense of responsibility for family members who’ve helped build the company. At the same time, the buyer is focused on operations, profitability, and risk—not family ties.
Striking the right balance early is key. Make decisions based on what’s best for the deal and the people involved. Waiting too long to address it often leads to conflict and confusion later.
How Buyers See Family Employees
Buyers tend to look closely at all key employees. This is especially true if key employees are related to the business owner.
Buyers may ask the following questions:

Are these family members critical to running the business?
Do family members have the right skills for their roles—or are they legacy hires?
Will they stay post-sale, or will they leave (voluntarily or otherwise)?
Is there any risk of disruption if they are not part of the future team?

The reality is that some buyers may view family employees as a risk. Others may see them as valuable team members with deep institutional knowledge. Either way, you need a plan for addressing these concerns.
Employment Isn’t Ownership
One of the biggest sources of misunderstanding is when family members working in the business assume they should have a say in the sale—or a share of the proceeds—because of their years of involvement.
Employment doesn’t automatically mean ownership.
If a family member isn’t holding a stock certificate or listed on the cap table, they’re not an owner. That can be a tough conversation, but it’s an essential one.
Plan Ahead for Roles Post-Sale
If your family members play significant roles in the company, their future may be part of the deal discussions. Some things to consider:

Are they staying with the business? If yes, will their roles remain the same? Will they need employment agreements with the buyer? Their interests may not necessarily align with yours and they will likely need separate legal counsel to review any employment agreement the buyer wants them to sign.
Are they transitioning out? If so, is there a need for severance, a consulting arrangement, or a smooth exit plan?
Will they be upset about the sale? Even if they aren’t staying on, you’ll want to manage their expectations to avoid souring the deal.

Clear, early communication is essential. Don’t wait for the buyer to ask about it—be proactive.
Legal Considerations You Can’t Ignore
If your family members are employees, they’re subject to the same rights and protections as any other employee. That means:

Documented job descriptions and responsibilities.
Where appropriate based on their role in the business, formal employment agreements (or understanding what happens if there aren’t any).
Consider whether severance or bonuses make sense as part of the sale or transition.

It’s also a good time to review whether any promises—formal or informal—were made. If there’s a perception of “you’ll get something someday,” now’s the time to clarify what that means (or doesn’t mean).
What About Succession? Protecting Family Relationships Through Transition
For many business owners, the plan was always to keep it in the family—until it wasn’t. Maybe the next generation isn’t interested. Maybe they’re not ready. Or maybe you’ve decided that a sale is the best move for your future and theirs. Whatever the reason, if your family members were expecting to take the reins, announcing a sale can feel like pulling the rug out from under them.
Have the Hard Conversations Early
If succession was ever on the table—even informally—you need to address it head-on. These conversations can be uncomfortable but delaying them only makes things harder.
Be honest about why you’re selling. Whether it’s the right time financially, the market conditions are ideal, or you’re ready for a new chapter, clarity can ease resentment.
The goal isn’t just to explain why you’re selling but to reinforce that this decision doesn’t diminish their contributions or your relationship.
Family First, Business Second
At the end of the day, most people sell their businesses to create better futures for themselves and their families. But the business is just one piece of that equation. Preserving personal relationships is often more important than maximizing the sale price.
Before you get deep into negotiations, ask yourself:

How will this impact my family dynamic?
Is there a way to involve them in the process that makes sense?
What legacy am I leaving—not just financially, but relationally?

Sometimes, offering family members clarity on their role post-sale, whether that’s continuing employment, a consulting opportunity, or even helping them start their next venture, can go a long way toward preserving goodwill.
Setting Expectations: Ownership vs. Opportunity
It’s common for non-owner family members to feel they have a stake in the outcome, especially if they’ve worked in the business for years. Be clear about what they can expect. If they’re not owners, they won’t share in the sale proceeds—unless you choose to provide a bonus or some other voluntary recognition for their contributions. That’s a personal decision but communicating early helps avoid hurt feelings.
On the other hand, if you’ve always intended to provide for family members in other ways—trusts, estate planning, or other assets—this is a good time to reinforce that they are still part of the bigger picture.
Don’t Let the Deal Damage What Matters Most
Even the cleanest deal can leave lasting personal fallout if the process damages family ties. M&A transactions are high-stress, emotional events for owners. It’s easy to get caught up in the deal and lose sight of the relationships that last long after the ink dries.
A few tips to protect family relationships:

Be transparent about your reasons and intentions.
Acknowledge the contributions of family members, even if they aren’t owners.
If possible, offer support for their next steps—whether in the business or elsewhere.
Separate business decisions from personal ones. Don’t let the negotiations define your relationships.

Bottom Line: Preserve the Family, Not Just the Deal
You’ve spent years building the business, but you’ve spent a lifetime building your family relationships. The sale of your business can be a positive milestone for everyone if handled with care, honesty, and respect.

FTC Finalizes Updates to Children’s Privacy Rule…Again

After a period of regulatory review under Chairman Andrew Ferguson, on Tuesday, April 22, 2025, the U.S. Federal Trade Commission (FTC) published amendments to the Children’s Online Privacy Protection Act (COPPA) Rule (COPPA Rule or the Rule), which was last updated in 2013. As we reported earlier this year, the FTC finalized its most recent updates to the COPPA Rule on January 16, 2025. However, that version of the amended Rule was not published before President Trump took office on January 20, 2025, and ordered a freeze on “publishing any rule to the Office of the Federal Register until a new agency head appointed or designated by the President reviews and approves the rule.” Accordingly, the FTC, now under Chairman Ferguson, once again reviewed and approved amendments to the COPPA Rule with minor changes to the version approved during the Biden administration. The amended Rule will go into effect on June 23, 2025, although most of the substantive requirements are effective April 22, 2026.
The amended Rule published on April 22, 2025, remains substantively the same as the January 16, 2025, pre-publication version. The key revisions to the Rule we previously highlighted are unchanged. They include new parental notification requirements related to data shared with third-party vendors, a new definition for “mixed audience,” the addition of biometric and government identifiers to the list of “personal information,” more robust “reasonable security” provisions, and a requirement that operators adopt and provide notice of a data retention policy. Additionally, the published Rule retains new requirements for COPPA Safe Harbor programs.
In a concurring opinion supporting the January 16 version of the amended Rule, Chairman (then Commissioner) Ferguson identified a few areas where he felt clarification in the amended Rule language would be helpful, but those changes were not implemented. Issues he identified include:

The meaning of a “material” change requiring new parental consent remains undefined. Both the 2013 version of the Rule and the amended version require that operators obtain fresh parental consent for all “material” changes to privacy terms; however, “material” remains an undefined term in the amended Rule. This may raise several different compliance obstacles, but Ferguson took specific issue with the fact that the amended Rule also requires operators to disclose to parents the identities of third-party recipients of children’s data when obtaining parental consent. With no elaboration on what is meant by “material,” he speculated that all additions or changes to the identities of third-party vendors could require an operator to request new parental consent. This mandate would increase the costs of switching third-party vendors and thus discourage the use of upstart competitors, undermining business competition.
The meaning of “retained indefinitely” remains undefined. The 2013 version of the Rule made clear that children’s data should be retained only for “as long as is reasonably necessary to fulfill the purpose for which the information was collected.” The amended Rule retains this language with minor modifications but also specifies that “[p]ersonal information collected online from a child may not be retained indefinitely.” However, no time period is set for retention. In Ferguson’s concurring opinion, he stated that “it is unclear how the requirement is any different than the existing requirement to keep the information no longer than necessary to fulfill the purpose for which it was collected.”
Collection of personal information for age verification continues to require parental consent. In his concurring opinion, Ferguson asserted that operators of mixed-audience websites or online services “wanting to use more accurate age verification techniques than self-declaration” would need information “such as photographs or copies of government-issued IDs.” Ferguson argued that the amended Rule contains “many exceptions to the general prohibition on the unconsented collection of children’s data, and these amendments should have added an exception for the collection of children’s personal information for the sole purpose of age verification, along with a requirement that such information be promptly deleted once that purpose is fulfilled.”

As of this writing, neither the Chairman nor the other sitting commissioners issued additional statements on the publication of the amended Rule. However, there are aspects of the Federal Register preamble and the Rule itself that appear to address the Chairman’s prior concerns. For example, the “material” change notification requirement is discussed in a footnote to the preamble to the Federal Register notice (and was also present in the January 16 pre-publication version), where the FTC explains that “the Commission is not likely to consider the addition of a new third-party to the already-disclosed category of third-party recipients to be a material change that requires new consent.” The amended Rule’s requirement for a written data retention policy requires reference to a time period, which appears to address Ferguson’s earlier concerns that the amended Rule does not adopt a specific temporal limit on data retention as long as data is not retained indefinitely. In addition, it appears that the Commission considered the option of allowing personal information, including photographs and biometric identifiers, to be used for age verification, but ultimately determined that the potential benefits of using this type of information for age verification were outweighed by the risks of this data being misused.
Given that this most recent round of amendments was initiated in 2019, it seems unlikely that any further amendments will be made in the near term absent further Congressional action to amend COPPA itself. However, children’s privacy continues to be an area of focus for the FTC, which will hold a workshop entitled “The Attention Economy: How Big Tech Firms Exploit Children and Hurt Families” at 9:00 a.m. ET on June 4, 2025. This workshop will cover a variety of topics, including strategies to protect children online, such as through age verification and parental consent requirements. Members of the public can register to attend in-person, and a link to the livestream will be posted to FTC.gov the morning of the event.

The Cost of Waiting – Why You Need a Life Care Plan Now

Long-term care planning is something many families put off—until a crisis hits. Without a Life Care Plan, seniors and their families may face rushed decisions, financial hardship, and fewer care options when the need for care arises.
A Life Care Plan is a proactive strategy that helps seniors stay independent, protect their assets, and ensure they receive the care they need before an emergency forces their hand. The reality is that waiting too long to put a Life Care Plan in place can lead to higher costs, reduced choices, and unnecessary stress for loved ones.
The Rising Costs of Long-Term Care and Why a Life Care Plan Matters
Without a Life Care Plan, many families are shocked by the cost of care when a loved one suddenly requires assistance. According to Genworth’s 2024 Cost of Care Survey, the average national costs are:

In-home care (40 hours/week): ~$6,500/month
Assisted living facility: $4,500–$6,500/month
Nursing home (private room): $9,000–$12,000/month

Total dedicated costs for any of these can range from $70,000 to $130,000 depending on the location, the type of care, and the services offered.
In New Jersey, New York, and Pennsylvania, costs can be substantially higher. Seniors without a Life Care Plan risk spending their entire life savings on care, leaving their spouse or loved ones financially vulnerable. Proper Life Care Planning helps avoid this risk by incorporating Medicaid planning, asset protection, and long-term care strategies.
What Happens If You Wait Too Long to Create a Life Care Plan?
1. You May Lose the Option to Age in Place
A Life Care Plan prioritizes aging in place, helping seniors stay in their homes safely for as long as possible. However, without a Life Care Plan, staying at home may not be an option due to lack of resources and planning.

Home modifications like ramps, stairlifts, or bathroom upgrades require planning.
Many seniors assume Medicaid will cover in-home care, but Medicaid has strict eligibility requirements that must be planned for in advance.
Without a Life Care Plan, families may be forced to place a loved one in a nursing home or assisted living facility sooner than expected.

A well-structured Life Care Plan ensures seniors have the financial means and support systems in place to remain at home longer.
2. Lack of a Life Care Plan Could Lead to Financial Hardship
If you don’t put a Life Care Plan in place before you need care, you could be forced to pay for care out of pocket, depleting your assets much faster than anticipated. Some information to keep in mind:

Medicaid eligibility has strict financial rules. Without a Life Care Plan, seniors may be required to spend down their savings before qualifying.
Medicaid has a 5-year lookback period, meaning any asset transfers made within 5 years of applying could trigger penalties.
Nursing home care can cost over $200,000 per year—without a Life Care Plan, families often scramble to cover these costs at the last minute.

A Life Care Plan includes Medicaid planning, asset protection strategies, and trusts to legally preserve assets while ensuring affordable care options.
3. Without a Life Care Plan, Families Are Forced to Make Rushed Decisions
When families don’t have a Life Care Plan in place, they often find themselves in crisis mode when a loved one experiences a sudden health decline.

Without a Life Care Plan, families are left scrambling to find available care facilities which may not be the preferred choice.
Many nursing homes require a period of private pay before Medicaid kicks in, forcing families to spend down further if no planning has been done.
Families without a Life Care Plan may make costly mistakes, such as transferring assets or missing Medicaid eligibility requirements, leading to delayed care or financial penalties.

A Life Care Plan eliminates the stress of last-minute decision-making by mapping out care options, funding strategies, and legal protections ahead of time.
How a Life Care Plan Protects Your Future
A Life Care Plan is more than just a plan—it’s a roadmap to quality care, financial security, and peace of mind. By putting a Life Care Plan in place now, seniors can:

Remain independent longer – Planning allows for in-home care and modifications that support aging in place.
Avoid unnecessary financial loss – A Life Care Plan includes asset protection strategies to prevent Medicaid spend-downs.
Ensure loved ones aren’t burdened with decision-making – A Life Care Plan provides clear advice regarding legal, medical, and financial needs.
Qualify for Medicaid and VA benefits while protecting assets – Proper Life Care Planning ensures eligibility for government benefits without sacrificing financial security.

The Best Time to Create a Life Care Plan Is NOW
If you wait until a crisis occurs, your care choices will be limited, your expenses will be higher, and your family will be under unnecessary stress. The sooner you put a Life Care Plan in place, the more control you have over your care, your finances, and your future.

CAA Taps Julie Zorn to Build a Family Office Powerhouse

Why is one of the world’s most influential talent agencies expanding from managing fame to managing wealth?
Creative Artists Agency (CAA) is entering the Family Office space with a new advisory division focused on ultra-high-net-worth clients. This is more than a service expansion-It reflects a shift in how CAA supports individuals at the center of culture and capital.
With the launch of its Global Family Office Advisory division, led by veteran adviser Julie Zorn, CAA is becoming a partner in long-term planning, legacy building, and wealth strategy.
A Generational Wealth Transfer Creates a Timely Opening
Cerulli reports that $124 trillion will pass from one generation to the next by 2048. Much of that wealth belongs to individuals who built fortunes through entrepreneurship and entertainment.
These clients are not just seeking investment results. They are focused on structure, values, and impact. CAA already plays a key role in their public lives. Now, it is helping them build systems to preserve wealth across generations.
An Experienced Leader Behind the Strategy
Julie Zorn brings over two decades of experience advising families on establishing and managing Family Offices. Her background includes senior roles at Citi and BMO Harris, where she designed governance frameworks, recruited leadership, and built long-range plans.
Her work helps clients create systems aligned with their goals to support long-term wealth. This includes governance, operations, team development, and leadership planning.
A Strategic Path Toward a Multi-Family Office Model
Most celebrity clients are not looking to build a Family Office from scratch. It is costly and complex. Yet, they want privacy, control, and tailored advice. A shared platform offers those benefits without the burden.
CAA is positioned to deliver this. With a trusted network and strong client insight, the firm could build a multi-family office model that is both efficient and personal.
A Natural Evolution of CAA’s Role
If successful, CAA will move beyond representation to become a long-term partner in how clients approach legacy and continuity.
This expansion raises the bar for advisors who have struggled to serve public wealth creators. CAA understands the balance between visibility and privacy, and the mindset of clients navigating influence and affluence.
A Broader Shift in How Wealth Is Managed
This reflects a broader change in how modern wealth holders want to be supported. Today’s clients seek partners who understand their goals and offer integrated solutions.
CAA is entering a space that has long lacked clarity. If it succeeds, it may reshape how the next generation of wealth creators approaches legacy.
CAA is making a long-term investment in its clients’ futures. No longer just guiding careers, the firm now helps build structures that last. For those managing wealth and visibility, that may be the most valuable role of all.

Happy Elephant Child Care Center Abuse Lawsuits

Our Michigan child day care lawyers are investigating cases against Happy Elephant Child Care Center in Michigan. Parents of children who attended that daycare center have hired us to pursue civil damage claims against Happy Elephant for their children.
Happy Elephant Child Care Centers is an assumed name for Genesee Christian Day Care Services, Inc. Thomas Case is listed as the organization president. The corporation has several day care centers throughout the State of Michigan.
Rebecca Kenney, the director of the day care facility in Lansing, Michigan, was recently charged with child abuse by the Eaton County Prosecutor’s Office. Allegations include slapping a child and pulling the hair of another child at the facility. Other evidence may arise.
The original charge is Child Abuse-4th Degree, which is a misdemeanor criminal offense in Michigan. She was arraigned on August 2, 2024, and is free on bond.
Ms. Kenney was charged under Michigan Child Abuse Statute is MCL Section 750.136b. Under the statute, child abuse in the fourth degree is a crime punishable as follows:
(a) For a first offense, a misdemeanor punishable by imprisonment for not more than 1 year.
(b) For an offense following a prior conviction, a felony punishable by imprisonment for not more than 2 years.
She is presumed innocent until proven guilty. Her jury trial is set for May 30, 2025.
Local news outlets have reported that Rebecca Kenney was charged with two separate incidents of abuse, and as of April 18, 2025, she was still working at the daycare facility.
In addition to the criminal charges against Rebecca Kenney, a separate count for violations of MCL 722.112(6) was filed against the organization. This statute applies to Child Care Organizations and specifically defines “physical abuse” as causing harm to a child, including injury or death. The statute outlines the elements that must be proven to establish a violation, and each instance of a child being harmed in a way that meets those elements can be charged as a separate count. The results of a conviction can include licensure penalties, 90 days in jail, and potential fines.

U.S. Implements Federal Registration Requirement for Noncitizens

Federal registration requirement for noncitizens physically present in the U.S. is now in full effect.
All noncitizens must carefully comply with requirements, such as maintaining updated records and promptly reporting address changes.
Reminder: Noncitizens are required to carry evidence of valid immigration status on person at all times.
A newly effective federal registration requirement now requires noncitizens physically present in the U.S. to register with the U.S. government and carry evidence of their valid immigration status on their person at all times. As of Friday, April 11, noncitizens—other than those already deemed registered by virtue of their nonimmigrant and immigrant vista processes—must create an account with the U.S. Citizenship and Immigration Service (USCIS) and take certain steps, including attending a biometric appointment, to register as a noncitizen.
Affected noncitizens who must take action to comply with the registration requirements include:

Noncitizen children turning 14 while in the U.S., or those who have already turned 14 but have not previously registered;
Canadian visitors without a valid I-94 record who have stayed or intend to stay in the U.S. for more than 30 days;
Noncitizens without an Employment Authorization Document (also known as an “EAD” or work permit) or proof of registration, including applicants and recipients of Deferred Action for Childhood Arrivals (“DACA”), Temporary Protected Status (“TPS”), and other humanitarian forms of relief; and
Any noncitizen who entered the U.S. without inspection, admission, or parole, or otherwise lacks documentation.

Noncitizens who are already considered registered and do not need to take any action to comply with the registration requirements include:

Nonimmigrants with a valid I-94 record or admission stamp;
Permanent residents;
Nonimmigrants in possession of a valid EAD or work permit;
Adjustment of status applicants; and
Canadian and Mexican nationals in possession of a valid border crossing card.

Those required to register must create an account with USCIS through the myUSCIS portal and complete the following five steps:
1) Complete Form G-325R.
Through this online form accessible in the myUSCIS portal, noncitizens will provide select biographic information. There is no charge to complete Form G-325R.
2) Attend a biometrics appointment.
Following the receipt and processing of Form G-325R, USCIS will schedule an appointment for the registrant to submit fingerprints, photos, and signatures. Select noncitizens who are required to register may be exempt from fingerprinting, including Canadian visitors and children under the age of 14.
3) Print the registration certificate.
After the biometrics appointment, registrants will gain access to a registration certificate through the myUSCIS account. Registrants must download and print the “Proof of Alien Registration” document.
4) Retain proof of registration.
At all times, registrants over the age of 18 must carry the Proof of Alien Registration, together with any original Form I-94, permanent resident card, or EAD.
5) Maintain current address records.
Noncitizens must report changes of address to USCIS within 10 days of moving to ensure correspondence and benefits are received without delay. Form AR-11 may be filed via mail or within the myUSCIS account platform. This reporting requirement does not apply to A and G visa holders and visa waiver visitors.
6) Carry proof of status on person at all times.
Every noncitizen who is 18 years old and over is required to carry evidence of their immigration “registration documents” at all times. The term noncitizen includes green card holders and other nonimmigrants in the U.S. “Registration documents” if in reference to valid immigration documents. Documents that noncitizen employees should carry with them (if applicable) are as follows:

Permanent resident card (green card)
Employment Authorization Card (EAD)
Unexpired foreign passport with valid visa stamp
I-94 Arrival/Departure Record and unexpired I-797 nonimmigrant petition approval notices from USCIS
Other receipt notices from USCIS (Form DS-2019, Form I-20, I-485 receipt notices)

Barnes & Thornburg LLP anticipates most of its clients will experience minimal disruptions, if any, to international workforces as a result of the registration requirement. However, for affected employees, a failure to comply with the registration requirement may prompt individual fines, detention, and a risk of removal.

New Maryland Laws—Delay to Paid Family and Medical Leave, Expanded Military Protections, and Parental Leave Clarification

The Maryland General Assembly’s 2025 legislative session ended at 11:59 p.m. on Monday, April 7. Unlike previous years’ editions, this session ended up being a relatively positive one for employers.
Although many concerning bills were proposed (e.g., increased minimum wage, an increased salary level for overtime exemptions, expansion of the Workplace Fraud Act to include all employers, harassment reporting and training requirements, etc.), there were only three employment-related bills that passed: another delay to the forthcoming paid family and medical leave insurance (FAMLI) program, an expansion of protections for military service members and their families, and a clarification of the definition of “employer” under Maryland’s Parental Leave Act.

Quick Hits

The Maryland General Assembly passed legislation delaying the implementation of the paid family and medical leave insurance (FAMLI) program, with contributions starting on January 1, 2027, and benefits beginning by January 3, 2028.
The Employment and Insurance Equality for Service Members Act would expand employment protections to include all uniformed services and reserve components, effective October 1, 2025.
Legislation amending the Parental Leave Act to clarify that employers covered by the federal Family and Medical Leave Act are excluded from the definition of “employer,” effective October 1, 2025, passed the General Assembly.
Maryland Governor Wes Moore is not expected to veto the bills.

All of these bills have been sent to Governor Wes Moore, and he can sign them into law, veto them, or allow them to become law without his signature. Vetoes are not expected on any of these bills, however.
FAMLI Program—Revisions, House Bill (HB) 102
As most employers in Maryland know, in 2022, the General Assembly passed a law, over then-Governor Larry Hogan’s veto, that set up a paid family and medical leave insurance program (FAMLI). The program will apply to all employers with employees in Maryland. It will provide eligible employees with twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave (for a possible total of twenty-four weeks of paid leave). We discussed the detailed requirements of the law in our article, Maryland’s FAMLI Program, Part I: An Overview of the Law.
This $2 billion program will be administered by the state and funded by contributions from employers and employees. Contributions were originally set to begin October 1, 2023, with benefits starting January 1, 2025. The Maryland Department of Labor (MDOL) was directed to issue regulations to implement the provisions of the law.
Setting up the FAMLI program has been challenging, and the General Assembly passed legislation to delay implementation, first in 2023, then again in 2024, and yet again this year. Under the most recent delay, contributions from employers and employees to fund the program will begin January 1, 2027, and benefits will begin at some point thereafter, but no later than (and most likely) January 3, 2028.
Other important dates were also changed. The initial contribution rate will now be set by the secretary of labor on or before May 1, 2026. Thereafter, the secretary will set the rate by November 1 each year, to take effect on the following January 1.
The legislation also proposes a new definition: “Anchor Date,” meaning the earlier of when an application for benefits is complete or when FAMLI leave begins. The wage rate for the employee will then be based on the highest of the previous four calendar quarters immediately preceding the anchor date.
Finally, the legislation also provides for a possible annual increase in the weekly benefit amount tied to the Consumer Price Index.
One additional note: The MDOL has engaged in an extensive regulatory process over the past several years, and it finally released proposed regulations in parts last fall and earlier this year. We reviewed the proposed regulations in our articles, “Maryland’s FAMLI Program, Part II: The Proposed Regulations” and “Maryland’s FAMLI Program, Part III: Claims and Dispute Resolution Proposed Regulations.” However, those regulations have now been removed from their website in light of the implementation delay. It is unclear what the MDOL is planning to do with the proposed regulations.
Once signed by the governor or approved without his signature, the law will take effect on June 1, 2025.
Employment and Insurance Equality for Service Members Act, HB 895/Senate Bill (SB) 279
Among other things, this legislation expands employment protections for military members from just the U.S. Armed Forces and National Guard and Reserve to include all uniformed services and reserve components. This means that, in addition to the Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard, the employment protections under Maryland law now also apply to the National Oceanic and Atmospheric Administration and the Public Health Service.
The affected employment protections under Maryland law are the following:

Permissible hiring preferences for eligible veterans (meaning one who received an honorable discharge or certificate of satisfactory completion of uniformed service), as well as the spouse of an eligible veteran who has a service-connected disability, the surviving spouse of a deceased eligible veteran, and the spouse of a full-time active member of the uniformed services.
Leave on the day that the employee’s spouse, (step)parent, (step)child, or sibling is leaving for, or returning from, active duty outside the United States as a member of the uniformed services. Notably, employees are only eligible for this leave right if they have a year of service with the employer and have worked 1,250 hours in the twelve-month period prior to the leave.
Once FAMLI finally takes effect, employees will (eventually) be able to receive FAMLI leave for certain family military leave reasons: to care for an injured or ill member of the uniformed services who is next of kin, or for certain qualifying exigency reasons related to the active duty of a member of the uniformed services.

When enacted, this law will take effect on October 1, 2025.
Parental Leave Act—Definition of ‘Employer,’ SB 785
Under the Parental Leave Act, employers with fifteen to forty-nine employees in Maryland must provide up to six weeks of unpaid leave for purposes of childbirth, adoption, or foster care placement. In order to be eligible for this leave, the employee must have been employed with the employer for at least twelve months and have worked at least 1,250 hours in the twelve-month period looking back from the date that leave is requested. This legislation clarifies that the definition of “employer” does not include those who are covered by the federal Family and Medical Leave Act (which applies to employers with fifty or more employees anywhere) in the current year.
This amendment will take effect on October 1, 2025.

New Dates Announced for Maryland’s Delayed FAMLI Program

Takeaway

Payroll deductions will begin 01.01.27, with leave benefits availability slated for 01.03.28.

Old North State Report – April 7, 2025

UPCOMING EVENTS
April 8, 2025
NC Chamber Spring Member Roundtable – Raleigh
April 14, 2025
Raleigh Chamber Business After Hours – Raleigh
April 16, 2025
Federalist Society Housing Policy and Regulation in NC – Raleigh
April 17, 2025
Raleigh Chamber Young Professionals Network Social – Raleigh
NC Chamber Building NC – Durham
April 22, 2025
NC Chamber Spring Member Roundtable – Asheville
April 24, 2025
RTAC – Association of Corporate Counsel Spring Reception – (Raleigh)
April 28, 2025
Thinkers Lunch: Rob Christensen
LEGISLATIVE NEWS
PHARMACY BENEFIT MANAGERS LEGISLATION ADVANCES
A bill advancing in the North Carolina legislature, House Bill 163, could change prescription costs for consumers, but opinions differ on its impact. Pharmacists believe the bill would limit profits for pharmacy benefit managers (PBMs), while PBMs argue that restrictions would raise drug prices for patients. Critics claim PBMs are motivated to keep prices high, with only three companies managing 80% of U. S. prescriptions.
PBMs play a significant role in healthcare by negotiating drug prices and determining costs for insurers and pharmacies, often lacking transparency. They can also require patients to use specific pharmacy chains, hurting competition.
The bill would mandate PBMs to pay pharmacies at least the national average drug cost and a $10 dispensing fee, allow patient choice of pharmacies, and share drug rebates with consumers. It passed the House Health Committee, following a similar bill from last session that did not progress in the Senate.
Read more by WRAL NEWS
CON LEGISLATION ADVANCES TO RULES COMMITTEE
State lawmakers in North Carolina are once again looking to change the certificate-of-need rules, which regulate the approval of new healthcare equipment or facilities. On Wednesday, the Senate Health Committee discussed Senate Bill 370, which aims to repeal these rules, and recommended it for further consideration by the Senate Rules Committee.
The North Carolina Healthcare Association supports keeping the rules, stating they help ensure access to care for underserved populations and prevent excess supply, which can raise costs. Opponents argue that the rules limit competition
While the legislature has made minor adjustments to these laws recently, broad repeal efforts have faced strong opposition from the hospital industry. Additionally, a recent ruling from the North Carolina Supreme Court could challenge the rules’ constitutionality. During the committee meeting, various health groups voiced differing opinions on the proposed changes.
Read more by WRAL News
FOSTER CARE LEGISLATION INTRODUCED
House Bill 612, a bill seeking to improve the state’s child welfare system by helping move children from foster care to permanent homes and preventing them from staying in unsafe environments, was introduced on Monday. The bipartisan bill has almost 70 co-sponsors in the House.
Representative Allen Chesser (R-Nash), the bill’s lead sponsor, emphasized that the focus is on achieving better life outcomes for children, promoting an environment that supports permanency and reunification. The Department of Health and Human Services sets policies, but counties implement them, leading to inconsistent practices.
Key points of the bill include:

County social services directors must update reporters of child abuse or neglect within five days about investigations.
Parental rights will not be lost due to inability to pay for care.
Lawyers for county agencies need six hours of yearly training.
Open adoptions are allowed with parental consent and end at age 18.
Foster parents and relatives caring for children over a year can meet judges before placement changes.
The DHHS can review cases and require remedies for rule violations.

The bill has been referred to the House Health Committee.
Read more by NC Newsline
Read more by WUNC
BILL TO EXPAND TREATMENT BY PHARMACISTS
A bill making its way through the Senate, Senate Bill 335, aims to expand pharmacists’ roles in testing and treating influenza and strep throat during a serious flu season. This season, 484 people have died from the flu, including five children, prompting the need for quicker access to treatment.
The bill, whose primary sponsor is Senator Benton Sawrey (R-Johnston), seeks to reduce the time it takes for patients to receive medication. Supported by the North Carolina Board of Pharmacy and the North Carolina Association of Pharmacists, it allows pharmacists to use accurate CLIA-Waived tests to provide rapid results.
The legislation outlines protocols for pharmacists, with some patients still needing referrals to a primary care doctor. Additionally, it mandates insurers to cover care similarly to visits to doctors or urgent care. The bill has passed the Senate Health Committee unanimously and may soon be voted on in the Senate.
Read more by WRAL NEWS
NC SENATE ELECTS NEW MAJORITY LEADER
The Senate Republican Caucus has selected Senator Michael Lee as its new Majority Leader. Lee, serving his fifth term, represents New Hanover County. The position became available after Paul Newton resigned unexpectedly and was appointed general counsel at UNC-Chapel Hill.
Lee was elected by acclamation, as he was the sole candidate. The Majority Leader is the third-highest ranking Senate leader, following Senator Phil Berger (R-Rockingham) and Deputy President Pro Tempore Ralph Hise (R-Alleghany). The Majority Leader leads caucus meetings, where members discuss policies and votes. Before becoming Majority Leader, Lee chaired the Senate Appropriations/Base Budget and Education/Higher Education committees.
Read more by WUNC
WHAT WE’RE LISTENING TO

Under the Dome Podcast
Do Politics Better Podcast
WUNC Politics Podcast
Carolina Newsmakers Podcast
NC Capitol Wrap Podcast

WHAT WE’RE READING

Asheville Citizen Times
Carolina Journal
Charlotte Observer
Fayetteville Observer
Greensboro News & Record
NC Insider
New Bern Sun Journal
News & Observer
North State Journal
Our State Magazine
Triangle Business Journal
Under the Dome
Wilmington Star News
Winston-Salem Journal
WRAL

Reproductive Health Under Trump: What’s New and What’s Next

Overview

Over the past two months, the second Trump administration has shifted federal policies and priorities regarding abortion, in vitro fertilization (IVF), contraception, and other reproductive-health-related matters – and it is expected to continue to do so. In addition to the federal policy agenda, many developments related to reproductive health likely will continue to occur at the state level. The Dobbs decision shifted policymaking in these areas toward the states, and lawmakers and advocates have expressed their intentions to either adhere to or protect against the new administration’s policies and agenda items. This article discusses some of the major recent trends in women’s health and reproductive health, and what is likely to come next under the new administration.

In Depth

THE TRUMP ADMINISTRATION WILL CONTINUE TO WEAKEN BIDEN-ERA POLICIES THAT PROTECT REPRODUCTIVE HEALTH
The Hyde Amendment
During its first month, the second Trump administration signed several executive orders (EOs) and otherwise signaled its approach to certain reproductive health measures that were previously in place. For instance, in the first week of his presidency, US President Donald Trump signed an EO entitled “Enforcing the Hyde Amendment,” which called for an end to federal funding for elective abortions and revoked two previous EOs that permitted such funding. The EO charged the Office of Management and Budget with providing guidance around implementing the mandate. While the EO was not a surprise, it referred to the Hyde Amendment and “similar laws,” leaving some ambiguity in its scope and the way in which it will be implemented in practice (e.g., it could be used to target federal funds for abortion and perhaps related services by other federal agencies, such as the US Departments of Defense, Justice, and State). In response to this EO, federal agencies could revoke Biden-era policies and reinstate or expand upon Trump administrative policies. Such efforts may include recission of Biden-era regulations that authorized travel for reproductive-health-related needs for servicemembers and their families and permitted abortion services through the US Department of Veterans Affairs.
The Comstock Act
Although we have not seen activity in this respect to date, the new administration will likely rescind the Comstock Act Memo, which was published by the US Department of Justice (DOJ) Office of Legal Counsel. This memo was issued in December 2022 by the Biden administration following the Dobbs decision. The Comstock Act is a federal criminal statute enacted in 1873 that prohibits interstate mailing of obscene writings and any “article or thing designed, adapted, or intended for producing abortion.” Violations of the Comstock Act are subject to fines or imprisonment. The Comstock Act Memo sets forth the opinion of the DOJ Office of Legal Counsel that the Comstock Act does not prohibit mailing abortion-inducing medication unless the sender explicitly intends for it to be used unlawfully. If the new administration revokes this memo or attempts to apply the Comstock Act to the mailing of abortion-inducing medication (and, perhaps, any abortion-inducing implements, which could have even wider-reaching implications) regardless of intent, it could become very difficult for patients to obtain abortion-inducing medication. Such actions also could lead to complications related to the provision of such medications via the mail (and potentially in person, depending on the attempted interpretation). At the time of publication, the DOJ website still included the Comstock Act Memo, noting that 18 U.S.C. § 1461 does not prohibit the mailing of abortion-inducing medication when the sender does not intend for the recipient to use the drugs unlawfully.
The 2024 HIPAA Final Rule on Access to Reproductive Health Records and Related State Activity
In 2024, the US Department of Health and Human Services Office for Civil Rights (OCR) published a Health Insurance Portability and Accountability Act (HIPAA) final rule to support reproductive healthcare privacy (2024 final rule). The 2024 final rule prohibits a covered entity or business associate from disclosing protected health information (PHI) for conducting an investigation into or imposing liability on any person for seeking, obtaining, providing, or facilitating reproductive healthcare where the reproductive healthcare is lawful. The 2024 final rule also prohibits disclosure of PHI to identify any person for the purpose of conducting an investigation or imposing liability. The enforcement mechanism of the 2024 final rule includes an attestation component under which a requesting party must certify that the use of the PHI is not prohibited when requested for health oversight activities, judicial or administrative proceedings, law enforcement purposes, or disclosures to coroners and medical examiners under 42 C.F.R. § 164.512. The Trump administration likely will not enforce (and may reverse) protections around reproductive health data under the 2024 final rule, which would leave a bigger gap for the states to potentially fill, as evidenced by the EO regarding enforcement of the Hyde Amendment and rollback of other Biden-era reproductive health protections.
In response to increased scrutiny of reproductive healthcare, several states have enacted laws protecting healthcare providers, patients, and others involved in providing or receiving reproductive healthcare. Although these laws vary from state to state, they generally prohibit disclosure of data and other information related to reproductive healthcare that was lawfully obtained by a patient and provided by a healthcare provider. These laws can provide a certain level of comfort to providers that provide care to patients who travel across state lines to receive care that may be unavailable to them in their home state but is accessible and lawfully provided in another state. States that do not have such laws may seek to enact similar protections under the new administration as federal protections become less certain, particularly if the layer of protection afforded by the 2024 final rule is revoked or otherwise diminished.
ABORTION POLICY WILL CONTINUE TO BE LARGELY DICTATED BY STATES AND MAY EXPAND INTO NEW AREAS OF FOCUS
Following the Dobbs decision, many states quickly took action to enshrine abortion protections in their laws and constitutions. Some states, such as Michigan, moved to overturn old, unenforced abortion bans on their books. Michigan further implemented laws, executive actions, and eventually a ballot measure to amend its state constitution. This trend has continued; in the November 2024 presidential election, seven states passed ballot measures to protect abortion access. However, the 2024 election also marked the first three abortion protection ballot referendums that failed to pass. Voters in South Dakota and Nebraska rejected proposed constitutional amendments, and a measure in Florida received only 57% of the vote where a 60% majority was required.
In the years since Dobbs, new laws and court cases have largely sorted the states into two categories: states that are more protective and states that are more restrictive regarding abortion. However, the law remains unsettled in a few states, such as Georgia and Wisconsin, where pending court cases, legislative action, and gubernatorial executive action may result in different outcomes. In the 2024 election, Missouri voters passed a ballot initiative to overturn the state’s strict ban on abortion and enshrine reproductive rights in the state constitution, effectively switching the state from more restrictive to more protective. More constitutional ballot measures could come in states such as Pennsylvania, New Mexico, Virginia, and New Hampshire, where abortion rights are currently supported under state law but not enshrined in state constitutions. Abortion advocates may also focus on Iowa, South Carolina, and Florida, where recent court decisions have largely settled the law, but further litigation is possible. Restrictive states also continue to legislate additional restrictions on access to abortion.
The majority of states can be expected to continue on their current trajectory: more protective states may continue to enact abortion protections, and more restrictive states may continue to enforce existing bans and expand prohibitions. In 2025, the focus of both protective and restrictive laws likely will continue to expand. The initial wave of post-Dobbs policymaking primarily focused on a healthcare provider’s ability to perform an abortion and a patient’s right to receive an abortion. New laws and proposals now focus on topics such as assisting others in obtaining an abortion, telehealth prescribing of abortion medications, abortion funding, abortion rights of minors, and patient data privacy.
Trump administration policies and initiatives may impact more protective states’ abilities to provide abortion services. For instance, if the Comstock Act Memo is revoked, abortion-inducing medication may become scarce or difficult to obtain through the mail, even from a provider in a protective state to a patient in another protective state. If interpreted even more broadly by the administration, the Comstock Act could serve as a catalyst for a national abortion ban, which would almost certainly face legal challenges. While the Trump administration has not yet asked Congress for a national abortion ban, the EO that Trump signed recognizing two sexes includes personhood language regarding life beginning “at conception,” signaling that additional changes may be proposed at both the federal and state policy levels regarding fetal personhood and attendant rights. Such changes would likely result in legal challenges in federal and state courts.
IVF SERVICES WILL CONTINUE TO EXPAND BUT MAY FACE FRICTION WITH ABORTION PROHIBITIONS AND CERTAIN TRUMP ADMINISTRATION PRIORITIES
State abortion laws have somewhat solidified following Dobbs, but many laws remain unclear as to their impact on IVF providers. Many states have abortion prohibitions that predate IVF, some of which define “unborn child” from the moment of fertilization or conception. Other laws are ambiguous but contain language that arguably protects a fetus at any stage of development. Since Dobbs, state attorneys general in Arkansas, Oklahoma, Wisconsin, and other states have indicated that they will not pursue IVF providers using state abortion bans, and the Trump administration has issued an EO calling for expanded access to IVF. However, the state-level laws remain ambiguous, and there is a risk that courts may interpret such laws to apply to embryos or otherwise impact IVF access. Moreover, the EO raising the issue of fetal personhood may create friction for efforts to expand access to IVF.
In February 2024, the Alabama Supreme Court became the first state supreme court to definitively rule that “unborn children” includes cryogenically frozen IVF embryos. The court held an IVF clinic liable under the state’s wrongful death statute after an incident in which frozen IVF embryos were destroyed. The decision initially caused several IVF providers in the state to pause services until two weeks later, when the legislature passed a specific exception to the statute for IVF providers. Even though the status quo was quickly restored, both providers and patients were significantly impacted by the period of uncertainty. In 2025 and beyond, other states could face similar test cases. In response to public support for reproductive technology, some restrictive states have proposed legislation to address, for example, the use of assistive reproductive technology and selective reduction.
At the same time, insurance coverage for IVF and other fertility treatments has expanded and will likely continue to do so in 2025. Approximately 22 states now mandate that insurance plans provide some combination of fertility benefits, fertility preservation, and coverage for a number of IVF cycles. After July 1, 2025, all large employers in California must provide insurance coverage for fertility treatments, including coverage for unlimited embryo transfers and up to three retrievals. 2025 will also bring expanded IVF coverage options for federal employee insurance plans.
THE RIGHT TO CONTRACEPTION WILL REMAIN VULNERABLE TO STATE LAWMAKING AND COURT CHALLENGES
Although the Dobbs majority opinion states that the “decision concerns the constitutional right to abortion and no other right,” and that “nothing in [the Dobbs] opinion should be understood to cast doubt on precedents that do not concern abortion,” doubt remains as to other women’s health rights. In his concurrence in Dobbs, Justice Clarence Thomas expressed interest in revisiting prior Supreme Court of the United States decisions upholding rights other than the right to abortion, such as the right to contraception upheld in Griswold v. Connecticut.
In response to the Thomas concurrence, the federal Right to Contraception Act was introduced. The act would have enshrined a person’s statutory right to contraception and a healthcare provider’s right to provide contraception. The act passed the US House of Representatives, but the US Senate version was unable to overcome a filibuster in June 2024. Federal efforts to protect the right to contraception are unlikely to pass in the new Congress.
Although federal action is unlikely, certain states have already protected the right to contraception under state law. Approximately 15 states and the District of Columbia currently have some form of protection for the right to contraception either by statute or under the respective state’s constitution. Under the new administration, state legislative action likely will increase with respect to the right to access contraception. Certain states with restrictive abortion policies, such as South Carolina, have proposed modifications to their abortion restrictions to explicitly protect the use of contraceptives.
WHAT STEPS SHOULD STAKEHOLDER CONSIDER TAKING?
Any company whose services touch on reproductive health or women’s health should engage in a risk assessment of their business and the ways in which the Trump administration may affect their ability to operate without complications. Although the first two months of EOs and other actions from the administration have not drastically altered the landscape for reproductive health across the country, access to reproductive and women’s health is likely to evolve over the next four years. We are closely monitoring these developments and will continue to forecast the ways in which this could impact stakeholders in the industry.

Navigating Employee Grief: Bereavement Law in California

In 2022, California passed Assembly Bill (AB) 1949 which amended the California Family Rights Act (CFRA) to provide for bereavement leave. The law took effect in January 2023, but here are some reminders for employers about bereavement leave requirements.
Under the law, employers with five or more employees must allow eligible employees to take up to five unpaid days of bereavement leave for certain family members. Consistent with the CFRA’s broad definition, a “family member” means a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Employers may voluntarily allow bereavement leave for a person not defined as a family member under the law. Although bereavement leave is unpaid, employers must allow employees to use any accrued paid sick days or personal days to receive pay during their bereavement leave.
Employees are required to follow the employer’s bereavement leave policy pertaining to notice. Employees are not required to take the five days consecutively but must complete all leave during the three months after the death of the family member. And, although the CFRA provides for bereavement leave, leave taken for bereavement does not affect the amount of time available for CFRA leave.
Employers may require documentation of the death of a family member. This may include a death certificate, obituary, or written verification of death, burial, or memorial service from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

Virginia Governor Recommends Amendments to Strengthen Children’s Social Media Bill

On March 24, 2025, Virginia Governor Glenn Youngkin asked the Virginia state legislature to strengthen the protections provided in a bill (S.B. 854) passed by the legislature earlier this month that imposes significant restrictions on minors’ social media use.
The bill would amend the Virginia Consumer Data Protection Act (“VCDPA”) to require social media platform operators to (1) use commercially reasonable methods (such as a neutral age screen) to determine whether a user is a minor under the age of 16; and (2) limit a minor’s use of the social media platform to one hour per day, unless a parent consents to increase the limit. The bill would prohibit social media platform operators from altering the quality or price of any social media service due to the law’s time use restrictions.
The Governor declined to sign the bill and recommended that the legislature make the following amendments to enhance the protections in the bill: (1) raise the covered user age from 16 to 18; and (2) require social media platform operators to, in addition to the time use limitations, also disable (a) infinite scroll features (other than music or video the user has prompted to play) and (b) auto-playing videos (i.e., where videos automatically begin playing when a user navigates to or scrolls through a social media platform), absent verifiable parental consent.