New Restrictions on Non-Compete Agreements Coming to Colorado
Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025.
Current Law Overview
Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law.
Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers
The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the “highly compensated” threshold. This includes those who:
Practice medicine or dentistry
Engage in advanced practice registered nursing
Are certified midwives
Fall under additional categories listed in C.R.S. § 12-240-113
Liquidated Damages in Physician Contracts
Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that:
Agreements with unlawful restrictive covenants are unenforceable.
Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies.
It remains unclear whether competition-related liquidated damages are still enforceable under the new law.
Expanded Patient Communication Rights
Medical providers can no longer be restricted from informing patients about:
Their continued medical practice
New professional contact information
The patient’s right to choose their healthcare provider
Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge.
New Limitations on Business Sale Non-Competes
Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by:
Allowing non-competes only for owners of a business interest
Placing time limits on non-competes for minority owners or those who received ownership through equity compensation
For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years.
CMS Issues Request for Public Input on Hospital Pricing Transparency
Key Takeaways
1. Centers for Medicare & Medicaid Services (CMS) Aims to Strengthen EnforcementThe agency is evaluating how to better enforce hospital price transparency rules under the Executive Order.
2. Definitions and Data Quality Are Under ReviewCMS is considering how to define and ensure the accuracy and completeness of pricing data.
3. Stakeholder Input Will Shape PolicyHospitals, payors and others are invited to submit comments by July 21, 2025.
Earlier this year, President Donald Trump issued an Executive Order titled “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.” In the EO, President Trump ordered the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services to take action within 90 days to enforce the health care price transparency regulations currently in effect. Specifically, the Departments were required to take action which would: (a) require the disclosure of the actual prices of items and services, not estimates; (b) issue updated guidance or proposed regulatory action ensuring pricing information is standardized and easily comparable across hospitals and health plans; and (c) issue guidance or proposed regulatory action updating enforcement policies designed to ensure compliance with the transparent reporting of complete, accurate, and meaningful data.
On May 22, 2025, in what appears to be one of the first steps in complying with this White House’s February Order, CMS issued a Request for Information (RFI) seeking public input on how to boost hospital compliance and enforcement and ensure hospital price transparency (HPT) data is accurate and complete. In particular, CMS has posed six questions about which it would like public input:
Should CMS specifically define the terms “accuracy of data” and “completeness of data” in the context of HPT requirements, and, if yes, then how?
What are your concerns about the accuracy and completeness of the HPT MRF (Machine-Readable File) data? Please be as specific as possible.
Do concerns about the accuracy and completeness of the MRF data affect your ability to use hospital pricing information effectively? For example, are there additional data elements that could be added, or others modified, to improve your ability to use the data? Please provide examples.
Are there external sources of information that may be leveraged to evaluate the accuracy and completeness of the data in the MRF? If so, please identify those sources and how they can be used.
What specific suggestions do you have for improving the HPT compliance and enforcement processes to ensure that the hospital pricing data is accurate, complete, and meaningful? For example, are there any changes that CMS should consider making to the CMS validator tool, which is available to hospitals to help ensure they are complying with HPT requirements, so as to improve accuracy and completeness?
Do you have any other suggestions for CMS to help improve the overall quality of the MRF data?
More details on the RFI are available here, which includes the web-based form by which comments should be submitted. The deadline to submit comments is 11:59 p.m. Eastern Time on July 21, 2025.
This Week in 340B: June 17 – 23, 2025
Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: Contract Pharmacy; Rebate Model; HRSA Audit Process
In five cases challenging Tennessee, Hawaii and Utah state laws governing contract pharmacy arrangements:
Tennessee: In one case, amici filed an amicus curiae brief in opposition to plaintiff’s motion for preliminary injunction and in a second case, the plaintiff filed a motion for preliminary injunctive relief and the defendant filed a motion to dismiss.
Hawaii: In one case, the plaintiff filed a motion for preliminary injunction.
Utah: In three cases, the plaintiffs filed oppositions to the defendants’ motion to dismiss and replies in support of plaintiffs’ motions for preliminary injunctive relief.
In two appealed cases against the government related to rebate models, the court granted appellant’s motion to consolidate the cases with other similarly situated cases, and consolidated two additional cases as cross-appeals.
In three appealed cases against the government related to rebate models, the appellants filed opening briefs.
In two cases related to the HRSA audit process, the court granted defendants’ motion to dismiss.
In a case by a covered entity challenging the government’s decision to allow a manufacturer’s audit, the covered entity filed a memorandum in opposition to the drug manufacturer’s motion for leave to file an amicus brief in support of the government’s motion to dismiss.
DOJ Civil Division Refocuses Affirmative Enforcement Priorities
Key Takeaways from DOJ’s 2025 Civil Division Mandate
Expanded Use of the False Claims Act (FCA) 1The government is broadening its application of the FCA beyond traditional garden-variety fraud. As discussed in Polsinelli’s May 27 update, the expansion includes a focus on bringing actions against entities receiving federal funds that allegedly discriminate on the basis of race, sex or religion through unlawful or overbroad DEI programs. Similarly, the DOJ will pursue institutions that allow or fail to prevent antisemitism under a false certification theory of liability under the FCA.
Increased Risk for Healthcare ProvidersProviders offering gender-affirming care to minors may face FCA liability for billing practices, diagnosis coding and drug use, especially where services contravene the administration’s policy objectives.2
Litigation Against “Sanctuary” JurisdictionsThe government intends to bring affirmative preemption lawsuits against jurisdictions that have state and local laws that allegedly obstruct federal immigration enforcement.
Denaturalization as a Weapon of Civil EnforcementThe government has been tasked with expanding denaturalization actions beyond national security cases to include fraud, material omissions, or criminal conduct that would have rendered individuals ineligible for naturalization.
On June 11, 2025, Assistant Attorney General for the Civil Division, Brett A. Shumate issued a memorandum titled Civil Division Enforcement Priorities (Enforcement Memo) directing all Civil Division lawyers to prioritize investigations and enforcement actions advancing the following five priorities: (1) combating alleged discriminatory practices such as certain DEI initiatives; (2) addressing antisemitism; (3) investigating gender-related medical interventions performed on minors; (4) challenging the legal validity of sanctuary jurisdictions; and (5) prioritizing denaturalization proceedings. These enforcement priorities mark a significant realignment of the Civil Division’s focus and signal a more assertive and ideologically driven use of civil enforcement tools – particularly the FCA – to advance policy objectives tied to discrimination, immigration, gender-related healthcare and federal benefits programs.
While in recent years the FCA has largely been used to combat fraud in healthcare and government contracting, under the Enforcement Memo, any organization receiving federal funds – including educational institutions, healthcare providers and local governments – should expect heightened scrutiny over compliance with civil rights laws. Recipients of federal funds that use race- or sex-based preferences in ways the government views as discriminatory may now face FCA liability under the umbrella of “civil rights fraud.” Additionally, Civil Assistant United States Attorneys (AUSAs) are to prioritize cases against entities alleged to have permitted antisemitism, particularly in educational settings, and to focus on whether such conduct violates federal grant conditions or constitutes a false certification for FCA liability purposes.
The Enforcement Memo further directs Civil AUSAs to pursue FCA claims against healthcare providers and pharmaceutical companies that bill federal programs for “impermissible services” related to gender dysphoria, including puberty blockers, hormone therapies, surgical interventions and other treatments used in gender-affirming care.3 This includes scrutiny of diagnosis coding practices and potentially alleging violations of the Food, Drug, and Cosmetic Act.4 Additionally, billing for gender-affirming care provided to minors, particularly in jurisdictions with restrictive laws, may be construed as knowingly submitting a false claim.
The Enforcement Memo also articulates a robust denaturalization initiative, expanding denaturalization as a potential consequence for those who obtained citizenship through fraud or were later involved in terrorism, trafficking or other disqualifying conduct.5 While denaturalization has long existed as a legal remedy, using it as a central civil enforcement mechanism marks a profound shift in DOJ Civil Enforcement. The prioritization of denaturalization carries significant legal and operational implications for both individuals and institutions. This approach may lead to an increase in civil litigation initiated by the government, particularly in cases where criminal prosecution is not feasible or has already concluded. This structured approach underscores the DOJ’s intent to use denaturalization not only as a corrective measure but also as a deterrent and enforcement tool.
The DOJ’s new enforcement priorities reflect a strategic realignment of civil enforcement tools to advance specific policy objectives.
[1] 31 U.S.C. §§ 3729–3733 (2023).
[2] See, e.g.,Exec. Order No. 14,168, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, 90 Fed. Reg. 8615 (Jan. 30, 2025); Exec. Order No. 14,187, Protecting Children from Chemical and Surgical Mutilation, 90 Fed. Reg. 8771 (Feb. 3, 2025); Memorandum from Pamela Bondi, Att’y Gen., Preventing the Mutilation of American Children (Apr. 22, 2025).
[3] See id.
[4] 21 U.S.C. §§ 301–399i (2023).
[5] 8 U.S.C. § 1451(a) (2023).
Air District Asbestos Rule Will Affect Demolition Activities for Facilities Damaged by the Los Angeles Wildfires
Owners and operators of facilities damaged or destroyed by the recent Los Angeles-area wildfires should be aware of the risks posed by toxic contaminant releases during cleanup and, in particular, the regulatory requirements imposed by South Coast Air Quality Management District (Air District) Rule 1403 to protect the public from such releases. Owners and operators are ultimately responsible for compliance with Rule 1403, even when contractors perform most or all the work.
BACKGROUND
Generally, Rule 1403 imposes survey, notification, work practice, and recordkeeping requirements on owners and operators who engage in “demolition” and “renovation” activities to protect workers and the public from the potential release of airborne asbestos fibers. Rule 1403 is clear that “a facility destroyed by fire… remains subject to this rule’s provisions,” and debris cleanup activities may — and often do — qualify as the “renovation” or “demolition” of the facility.
Asbestos, which is a type of toxic contaminant covered by Rule 1403, is commonly found in facilities built or renovated prior to the early 1980s, particularly in roofing and flooring products, caulks, mastics, and insulation, and may also be found in facilities constructed or renovated after that time. When inhaled, asbestos is known to cause damage to the lungs and may result in long-term serious health problems. It has been classified by multiple federal agencies as a human carcinogen and can also cause asbestosis, a chronic lung disease characterized by shortness of breath, coughing, fatigue, and other serious symptoms. Due to these health hazards and its common use in construction and other industries, asbestos was one of the first hazardous air pollutants to be regulated under the Environmental Protection Agency’s National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations in the early 1970s.
COMPLIANCE
Again, owners and operators are ultimately responsible for compliance with Rule 1403, even when contractors perform most or all the work. The risks of noncompliance are substantial. In addition to the health and safety risks posed by improper handling and release of asbestos-containing materials, civil and even criminal penalties are possible. Civil penalties currently start at $5,000 per violation, per day for strict liability violations, and quickly rise to $25,000 for negligent violations, $75,000 for intentional violations, and up to $1 million for corporations that engage in intentional, willful, or reckless violations that cause great bodily injury or death.
In response to the damage caused by the recent Los Angeles-area wildfires, Governor Newsom recently issued executive orders waiving or suspending certain regulatory requirements that may impede rapid response and rebuilding efforts. Rule 1403 has not been the subject of any such order and may not be included in any future orders because it addresses a serious health risk for the public, relief workers, and contractors, and it implements the federal NESHAP regulations, which are not waivable by the state. In recently issued guidance for cleaning up fire-damaged debris, see here, the Air District confirmed that owners and operators that opt out of the “no-cost-to-residents” debris cleanup being conducted by the U.S. Army Corps of Engineers must comply with Rule 1403.
RULE 1403 REQUIREMENTS
Pre-Activity Survey and Notification
Before any demolition or renovation activity may begin, the owner/operator must contract with a Cal/OSHA certified inspector to survey the facility for the presence of asbestos-containing materials (ACM). If the survey identifies any suspected ACM, a sample of that material must be taken and analyzed in a qualified laboratory according to specified procedures. Analysis of suspected ACM is not required if the owner/operator elects to treat it as ACM. If the asbestos survey identifies ACM that will be disturbed by the renovation or demolition work (or the owner/operator elects to treat building materials as ACM), the owner/operator must contract with a Cal/OSHA registered Abatement Contractor to properly address the ACM. The Abatement Contractor must be from a different entity than the certified inspector.
Notification requirements depend on whether the work is categorized as a demolition (the “wrecking or taking out of any load-supporting structural member”) or renovation (any other alteration of a facility). The Air District must be notified prior to the start of any demolition activities whether the survey identified ACM or not. For non-exempt renovation activities, the Air District must be notified only if the initial survey identified ACM that will be removed. Notification is required no later than 10 working days before any work begins, though shorter notification periods may be available for emergency demolition or renovation operations.
Renovation and Demolition Procedures
Rule 1403 contains specified procedures that Abatement Contractors must implement when removing ACM. Generally, Abatement Contractors are free to choose among these procedures, but where ACM has been damaged in a fire, or an owner/operator elects to treat building materials as ACM without a survey or laboratory analysis, they must use “Procedure 5–Approved Alternative.” Procedure 5 requires an Abatement Contractor to develop a customized plan for the removal of ACM from a facility and, importantly, obtain Air District approval prior to the start of any related renovation or demolition activities. The Air District has affirmatively stated that the review and approval of Procedure 5 plans is required even in emergencies and specifically for the cleanup of wildfire debris. To date, the Air District has not released any approved standardized “Procedure 5” plan for wildfire debris cleanup, which means individual plan development and approval is required.
Once renovation or demolition activities have begun, the Abatement Contractor must follow specific requirements for the removal, handling, and disposal of ACM. The owner or operator of the facility being demolished or renovated must keep certain records for at least three years, including copies of survey-related documents, notifications to the Air District, waste shipment records, and Abatement Contractor qualifications.
Key Exemptions
Owner–occupants of residential single-unit dwellings that personally conduct a renovation are exempt from the Rule 1403 requirements.
Renovations of single-unit dwellings where less than 100 square feet of ACM will be removed or stripped are exempt from the survey requirements of 1403.
Renovations where less than 100 square feet of ACM will be removed or stripped are exempt from the notification requirements of Rule 1403.
Texas SB 1318: Major Changes to Healthcare Non-Compete Agreements
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (SB 1318), which amends Section 15.50 of the Texas Business and Commerce Code, commonly referred to as the “Texas Covenants Not to Compete Act.” SB 1318 significantly tightens restrictions on the permitted use of covenants not to compete for physicians and certain other healthcare practitioners, including dentists, nurses, and physician assistants (“Healthcare Practitioners”). The provisions of SB 1318 take effect and will apply to any non-compete entered into or renewed on or after September 1, 2025.
Below is a summary of key provisions of SB 1318 and resulting changes to the existing framework for physician and Healthcare Practitioner non-competes in Texas:
Key Provisions
1 Year Maximum Duration – Any non-compete clause seeking to limit or restrict the professional licensed practice of any physician or Healthcare Practitioner is now limited to a period of no more than one (1) year following termination.
5 Mile Geographic Cap – The geographic reach of a non-compete clause seeking to limit or restrict the professional licensed practice for any physician or Healthcare Practitioner is limited to a 5-mile radius from the practitioner’s primary workplace.
Mandatory Buyout Option – While healthcare employers have long been required to include a buyout option for physician non-competes, employers must now include buyout options in every non compete that seeks to limit or restrict the professional licensed practice of any physician and any Healthcare Practitioner, in each case, giving such practitioners the right to pay a buyout amount to eliminate an otherwise enforceable non-compete restriction. Further, no buyout amount may exceed a practitioner’s total annual salary and wages at the time of termination.
New “Void and Unenforceable” Provisions for Physician Non-Competes – SB 1318 expressly states that “a covenant not to compete relating to the practice of medicine is void and unenforceable against” a licensed physician “if the physician is involuntarily discharged . . . without good cause.” As such, unless there is a reasonable basis for discharge of a physician from contract or employment that is directly related to the physician’s conduct, a physician may not be subject to an otherwise enforceable non-compete if a physician is involuntarily discharged. Employers should address this aspect by paying close attention to how “cause” is defined in any agreements with physicians and other Healthcare Practitioners.
Impact of SB 1318
For Practitioners – SB 1318 significantly enhances mobility. Shorter duration and limited geographic restrictions ease professional transitions, and the use of consistent buyout calculations ensures professionals can voluntarily enter a restrictive period while keeping financial exposure in check.
For Employers – Healthcare employers will need to review and potentially revise existing provider agreements, adjusting clauses to align with the new limits. They must also anticipate an eventual buyout or risk having non-compliant clauses struck as unenforceable. Transparent communication of buyout terms will be essential, as will proactive efforts to ensure all agreements with any physicians and other Healthcare Practitioners align with the new law.
Policy Context – This new law aligns with a broader trend in Texas and nationally toward greater workforce mobility within the healthcare industry.
Practical Compliance Guidance
Before September 1, 2025 – Employers should audit existing contracts, flagging those set for renewal and contracts expected to be used for new hires. Template agreements expected to be entered into on or after September 1, 2025, should be updated to reflect the maximum one-year term, a 5-mile radius, and the required reasonable buyout clause.
Drafting Buyout Clauses – These must clearly specify how the buyout amount is calculated and ensure it does not exceed the practitioner’s annual compensation. Clear documentation minimizes future disputes.
Monitor Enforcement – Record contract dates, buyout transactions, and ensure practitioners understand their rights. Failure to comply risks rendering the entire non-compete unenforceable under Texas law.
Final Comments
SB 1318 marks a significant shift in Texas employment law by curtailing the reach and enforceability of non-compete provisions in the healthcare industry. Employers need to be mindful of the changed landscape and act promptly to revise contracts and processes to ensure timely and full compliance with the amendments brought about by SB 1318 by the deadline of September 1, 2025.
Minimum Wage Increases Coming Soon Across the Nation – Especially in California
Employers in many states and localities will see an increase in minimum wages starting July 1, 2025.
Many Changes Coming in California
As it often does, California leads the way with a patchwork of minimum wage increases across localities and industries scheduled for this summer.
Los Angeles Prepares for the Olympics with Proposed Wage Increases
Employers, workers, and advocates have been closely following headlines regarding Los Angeles’s so-called “Olympic Wage” initiative. The legislation in question, Ordinance 188610, requires higher minimum wages, minimum health benefits, and training standards for employees of large hotels and employers servicing the Los Angeles International Airport (“LAX”). This is not the first time these industries have been singled out; however, this proposal specifically contemplates the upcoming 2026 World Cup and 2028 Olympics.
Los Angeles’s City Council adopted the ordinance on May 23, Mayor Karen Bass signed it into law on May 27, and it was published on May 29. Opponents quickly submitted a petition for referendum, seeking to overturn the ordinance before it takes effect. In accordance with local rules, though the ordinance has been signed into law, if nearly 93,000 signatures are collected within 30 days after publication of the ordinance, it is suspended until it can be placed on a ballot for a general election in June 2026. This leaves the proposed minimum wage increases, and related measures, in flux through at least June 30, 2025.
If the ordinance is not overturned and the new provisions take effect, beginning on July 1, 2025, the minimum wage will increase to $22.50 for workers in hotels with at least 60 guest rooms and employees of employers servicing LAX. If employers servicing LAX do not provide health benefits to an employee, the ordinance stipulates a minimum wage of $30.15 for that employee.
If the referendum passes, and the ordinance does not take effect, the minimum wage for hotel workers will raised slightly to $21.01. Airport workers will be subject to existing minimum wage laws.
The City of Santa Monica matches the hourly wage for hotel workers set by Los Angeles. Santa Monica has already announced that it will apply the increased minimum wage for hotel workers. This means that the outcome of the referendum will impact hotel employers in both Los Angeles and Santa Monica.
We are keeping a close eye on these developments. Employers in the hospitality and tourism industries should be aware of the provisions in the ordinance and prepare for changes, if any, required by July 1, 2025.
First Scheduled Minimum Wage Increase for CA Health Care Workers
Following several amendments, on October 16, 2024, a new minimum wage scale for health care workers went into effect in California. The first scheduled increases start July 1, 2025. There are two tiers of increases effective July 1 depending on the facility.
Tier 1: minimum wage increases from $23 to $24
Large health systems and dialysis clinics
“Covered Health Care Facilities” run by large counties
Tier 2: minimum wage increases from $18 to $18.63 (a 3.5% increase)
“Safety Net Hospitals,” meaning hospitals with high populations of Medicare/Medicaid patients, rural health care facilities, and health care facilities owned, affiliated or operated by a county with a population of less than 250,000
“Covered Health Care Facilities” run by small counties
Employers should refer to the state’s Labor Commissioner FAQs or our previous post (published prior to amendments that postponed implementation) breaking down the covered facilities and employers for more information.
California Minimum Wage Rate Hikes by Industry
In addition to those detailed above, employers in hospitality-related industries will see increases in the minimum wage in several other California localities. All industry-specific minimum wage increases are detailed below. The minimum wage for fast food workers, which, at $20, is higher than the state’s general minimum wage rate, will not increase on July 1. Employers should keep in mind that these industry-specific minimum wage rates preempt the relevant jurisdiction’s general minimum wage rate.
The following chart summarizes coming industry-specific wage hikes:
Industry
Current Minimum Wage
Increased Minimum WageEffective July 1, 2025
Healthcare (Statewide)
$23 (large health systems and those run by large counties)
$18 (“safety net” facilities and those run by small counties)
*
$24 (large health systems and those run by large counties)
$18.63 (“safety net” facilities and those run by small counties)
*
Hotels with 60 or more Guest Rooms
(City of Los Angeles & City of Santa Monica)
$20.32
$22.50 or $21.01
pending resolution of referendum, see above
Employers Servicing LAX (City of Los Angeles)
$19.28 if the employer provides health benefits
or
$25.23 if the employer does not provide health benefits
$22.50 if the employer provides health benefits
or
$30.15 if the employer does not provide health benefits
pending resolution of referendum, see above
Hotels (City of West Hollywood)
$19.61
$20.22
Hotels (City of Long Beach)
$23.00
$25.00
Airport & Convention Center (City of Long Beach)
$17.97
$18.58
* other categories of facilities excluded from July 1, 2025, increases
California General Minimum Wage Rate Hikes by Jurisdiction
Several localities in California will also increase their general minimum wage on July 1, 2025. These cities and counties enforce a minimum wage above the state’s minimum of $16.50. Note that the City of Malibu, one of the localities with scheduled increases effective each July 1, has suspended its planned increase this year in light of the Palisades Fire. Employers should keep in mind that, where applicable, the industry-specific minimum wage rates detailed above preempt each jurisdiction’s general minimum wage rate.
Jurisdiction
Current Minimum Wage
Increased Minimum WageEffective July 1, 2025
City of Alameda
$17.00
$17.46
City of Berkeley
$18.67
$19.18
City of Emeryville
$19.36
$19.90
City of Fremont
$17.30
$17.75
City of Los Angeles
$17.28
$17.87
Unincorporated Los Angeles County
$17.27
$17.81
City of Milpitas
$17.70
$18.20
City of Pasadena
$17.50
$18.04
City & County of San Francisco
$18.67
$16.51 (government supported employees)
$19.18
$16.97 (government supported employees)
City of Santa Monica
$17.27
$17.81
Minimum Wage Increases Outside of California
Though California leads the way in mid-year minimum wage rate hikes, employers in several states and localities will also see increases soon. The following chart summarizes the coming changes, which are effective July 1, 2025, unless otherwise noted. Note that the chart only lists rates that are changing imminently.
Jurisdiction
Current Minimum Wage
Increased Minimum Wage
Alaska
$11.91
$13.00
District of Columbia
$17.50
$10.00 for tipped workers (total hourly rate must meet full minimum wage)
$17.95
$12.00 for tipped workers (total hourly rate must meet full minimum wage)
Florida
$13.00
$14.00
* effective Sept. 30, 2025
Chicago, Illinois
(employers with more than four employees)
$16.20
$11.02 for tipped workers (total hourly rate must meet full minimum wage)
rates for youth workers vary
$16.60
$12.62 for tipped workers (total hourly rate must meet full minimum wage)
rates for youth workers vary
Montgomery County, Maryland
$17.15 (employers with 51 or more employees)
$15.50 (employers with 11 to 50 employees)
$15.00 (employers with 10 or fewer employees)
$17.65 (employers with 51+ employees)
$16.00 (employers with 11 to 50 employees)
$15.50 (employers with 10 or fewer employees)
St. Paul, Minnesota
$14.00 (employers with six to 100 employees)
$12.25 (employers with five or fewer employees)
*
$15.00 (employers with six to 100 employees)
$13.25 (employers with five or fewer employees)
*
Oregon
$14.70 (standard)
$15.95 (employers within the Portland metropolitan boundary)
$13.70 (employers within a nonurban county)
$15.05 (standard)
$16.30 (employers within the Portland metropolitan boundary)
$14.05 (employers within a nonurban county)
Burien, Washington[1]
$16.66, the Washington State Minimum Wage (all employers with 21 to 499 full-time equivalent employees)
*
$20.16 (all employers with 21 to 499 full-time equivalent employees)
*
Everett, Washington
$16.66, the Washington State Minimum Wage
$20.24 (“large employers” of 500 + employees worldwide)
$18.24 (“covered employers” with 15+ employees worldwide or $2 million+ in annual gross revenue)
Renton, Washington
$18.90 (employers with 15 to 500 employees)
*
$19.90 (“mid-sized employers” of 15 to 500 employees or $2 million+ in local annual gross revenue)
*
Tukwila, Washington
$20.10 (employers of 15-500 employees worldwide or over $2 million of annual gross revenue in Tukwila)
*
$21.10 (“mid-sized employers” of 15-500 employees worldwide or $2 million+ in local annual gross revenue)
*
* Other categories of employers/employees excluded from July 1, 2025, increases
Maureen Maher-Patenaude, a Summer Associate (not admitted to practice) in Epstein Becker Green’s New York office, contributed to the preparation of this piece.
ENDNOTES
[1] On February 25, 2025, the City of Burien filed a complaint seeking clarification of a voter-approved initiative regarding the city’s minimum wage. The case is pending in King County Superior Court. The scheduled minimum wage increase for “Level 2 employees” on July 1, 2025, is unaffected by the suit. Updates may be found on the city’s website.
5 Things to Know About Senate Bill 1318: Navigating New Non-Compete Restrictions for Healthcare Practitioners in Texas
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (“SB 1318”), which amends Texas Business & Commerce Code Section 15.50(b) to impose new limitations on physician non-competes. SB 1318 also adds a new Section 15.501, which restricts non-competes for dentists, nurses, and physician assistants. SB 1318 goes into effect September 1, 2025, and applies to agreements entered into or renewed on and after that day. Here are the five key things to know about the new law:
1. The “Reasonable Price” Buyout Standard Has Changed
Previously, Texas law required that physician non-compete agreements include a buyout provision at a “reasonable price,” often leading to disputes and uncertainty over what constituted “reasonable.” SB 1318 replaces this standard with a clear cap. Now, the buyout amount cannot exceed the physician’s total annual salary and wages at the time of termination. This change eliminates the prior option to arbitrate the buyout price.
2. New Time and Geographic Limitations
SB 1318 imposes limits on the duration and geographic scope of non-compete agreements for physicians. Non-competes may not exceed a period of one year following the end of the employment or contract, and the restricted area cannot exceed a five-mile radius from the location where the practitioner primarily practiced. These limitations apply to non-competes related to employment agreements, independent contractor agreements, or ownership documents. The limitations do not apply to physician ownership interests in a hospital or ambulatory surgery center (i.e., Section 15.50(c) remains unchanged). Additionally, SB 1318 requires that all terms and conditions of the non-compete be clearly and conspicuously stated in writing.
3. Non-Competes Are Void If Physician Terminated Without Good Cause
Physician non-compete agreements are now void and unenforceable if the physician is involuntarily discharged without “good cause.” SB 1318 defines “good cause” as a reasonable basis for discharge directly related to the physician’s conduct, job performance, or employment record. This means that if a physician is let go for reasons unrelated to their performance or conduct (i.e., without good cause), their non-compete will not be enforceable.
4. Non-Compete Restrictions Do Not Apply to Administrative Services.
SB 1318 does not create any restrictions for non-competes related to managing or directing medical services in an administrative capacity for medical practices or other healthcare providers. So, SB 1318 should not affect a majority of medical director agreements, which are purely for administrative services.
5. Expansion of Non-Compete Restrictions to Dentists, Nurses, and Physician Assistants
For the first time, SB 1318 extends non-compete restrictions to other healthcare practitioners, including dentists, professional and vocational nurses, and physician assistants. It is important to note that professional and vocational nurses include RNs, LPNs, CRNAs, nurse midwives, clinical nurse specialists, APRNs and others licensed under Chapter 301 of the Texas Occupations Code. The same requirements that apply to physicians—buyout cap, one-year duration, five-mile geographic limit, and clear written terms—now apply to these practitioners as well. Unlike physician non-competes, SB 1318 does not state that a non-compete for dentists, nurses, or physician assistants is void if the practitioner is terminated without good cause. Similarly, SB1318 does not require that these practitioners be permitted to continue treating former patients experiencing acute illness, receive a list of patients they treated during the year preceding the end of employment, or obtain access to medical records for patients if authorized.
SB 1318 represents a substantial change to Texas’s approach to non-compete agreements in the healthcare sector. By capping buyout amounts, limiting the scope and duration of restrictions, voiding non-competes for terminations without good cause, and expanding protections to additional practitioners, the law creates a more defined framework for restrictive covenants in the healthcare sector. In the meantime, both employers and practitioners should review their contracts and prepare for compliance with the new requirements.
Upcoming OSHA and U.N. Meetings May Trigger Changes in U.S. Hazard Communication Standards
On June 24, 2025, the Occupational Safety and Health Administration (OSHA) will conduct a virtual public meeting to discuss the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The primary focus of this meeting is to gather stakeholder input and prepare for the upcoming forty-eighth session of the United Nations Economic and Social Council’s Sub-Committee of Experts on the GHS, which will take place in Geneva, Switzerland, from July 7 to July 9, 2025.
OSHA is expected to provide updates on recent regulatory activities, discuss potential changes to the Hazard Communication Standard (HCS) to align with the latest GHS revisions, and solicit feedback from industry representatives, labor organizations, and other interested parties. Key topics will include hazard classification, labelling requirements, safety data sheets, and the impact of GHS updates on U.S. regulations and workplace safety.
Quick Hits
On June 24, 2025, OSHA will hold a virtual public meeting to discuss updates to the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and gather stakeholder input.
The upcoming meeting of the United Nations’ Sub-Committee on the GHS will be a key forum for discussing and adopting revisions to the GHS, which OSHA will later evaluate and incorporate into U.S. regulations.
OSHA aims to improve chemical hazard communication and facilitate international trade by aligning U.S. regulations with the latest GHS updates, ensuring clarity and consistency for workers and emergency responders.
OSHA’s Hazard Communication Standard is explicitly designed to align with the GHS, which is an internationally agreed-upon system for classifying and labelling chemicals. The GHS is periodically revised and updated by the U.N. Sub-Committee based on new scientific information, stakeholder input, and evolving best practices. The July 7–9, 2025, Geneva, Switzerland, meeting is one of the key forums where such revisions are discussed and adopted by consensus among participating countries, including the United States.
When the Sub-Committee adopts new or revised criteria, label elements, or safety data sheet (SDS) requirements, OSHA reviews these changes to determine how best to incorporate them into U.S. regulations. This process ensures that U.S. chemical safety standards remain harmonized with those of major trading partners and reflect the latest scientific and technical knowledge.
Following the Geneva meeting, OSHA is expected to evaluate the adopted GHS revisions and initiate the rulemaking process to update the HCS as necessary. This may include:
revising hazard classification criteria for physical, health, or environmental hazards;
updating required label elements, such as signal words, pictograms, hazard statements, and precautionary statements;
modifying the format and content requirements for safety data sheets and
addressing new or emerging hazards identified at the international level.
For example, OSHA’s most recent update to the HCS (finalized in 2024) was based on the seventh revised edition of the GHS, with select elements from the eighth edition. This update was informed by previous UN GHS sub-committee meetings and reflects the ongoing process of international harmonization.
After the Geneva meeting, OSHA is expected to engage with U.S. stakeholders—including industry representatives, labor organizations, and safety professionals—to gather input on how the new GHS provisions should be implemented domestically. OSHA relies on the stakeholders’ input to update regulations that are designed to be practical, effective, and tailored to the needs of U.S. workplaces.
OSHA also provides transition periods for compliance, allowing chemical manufacturers, importers, distributors, and employers time to update their hazard communication programs, labels, and SDSs in accordance with the new requirements.
By incorporating the outcomes of the Geneva meeting into U.S. regulations, OSHA aims to:
improve the clarity, consistency, and effectiveness of chemical hazard communication for workers and emergency responders;
reduce confusion and compliance burdens for companies operating in multiple countries; and
facilitate international trade by ensuring that U.S. chemical products meet global labelling and classification standards.
Employers that work with materials that fall under GHS probably will not see dramatic changes in the regulations they must abide by. Instead, those changes will likely be incremental and will first be seen by those that bear the responsibility for labelling chemicals.
Does HIPAA Apply To My Business?
Varnum Viewpoints:
HIPAA applies outside of healthcare providers. If you offer employee health benefits, especially through a self-funded plan, HIPAA applies to your health plan.
You may be a covered entity or business associate. Health plans, providers, and vendors handling health data are subject to HIPAA, often to differing extents.
HIPAA has specific compliance duties. Requirements include privacy notices, policies, risk assessments, and business associate agreements.
The Health Insurance Portability and Accountability Act (HIPAA) applies far more often than many realize, including when a company outside of the healthcare sector provides certain types of health benefits to its own employees. While HIPAA compliance quickly gets complex, determining if it applies to your business does not need to be. This advisory includes helpful definitions of key terms, including Protected Health Information (PHI), the Privacy Rule, and the Security Rule.
What Is a HIPAA Covered Entity?
HIPAA applies only to covered entities, including health care providers and health plans, and their business associates. Many covered entities already know they are subject to HIPAA. This includes those in the healthcare sector, such as doctors, hospitals, pharmacies, and insurance companies, for whom HIPAA compliance should be an integral part of daily business.
Does My Employee Health Plan Make My Company a Covered Entity?
Employer-sponsored health plans are also covered entities. The design of that health plan will impact how HIPAA applies, but the Privacy Rule and the Security Rule make it clear: if employees receive health benefits, HIPAA will apply to the health plan, even if it does not apply to the company in its role as an employer generally. If an employer maintains a fully-insured plan and the insurer is handling most or all of the administration of the coverage, the employer may not receive much PHI, if any. However, as more plans move toward self-funding and self-administration, HIPAA will apply to more functions carried out by the employer.
Who Is a HIPAA Business Associate?
A business associate is any entity that creates, receives, or transmits PHI in relation to a covered entity. Business associates are subject to the same HIPAA compliance rules as covered entities, and the same penalties apply for violation of these rules. In addition, covered entities and their business associates must enter into “business associate agreements” which explicitly require the business associate to comply with HIPAA and may set forth other terms such as notification and indemnification provisions.
As with covered entities in the healthcare sector, most business associates will know that their work is subjecting their business to HIPAA. However, any business that provides products and services that are or could be used to provide healthcare should carefully assess whether and to what extent HIPAA applies to their business. For example, SAAS providers and app developers may have access to PHI, making them a business associate that must comply with HIPAA. Some covered entities will push their vendors to enter into business associate agreements, even if it does not directly apply.
What Is PHI?
Protected health information is any individually identifiable health information that is created, received, stored, or transmitted by a covered entity, an entity subject to HIPAA, such as a health care provider, insurance company, or employer health plan, or their business associates, those entities who access PHI on behalf of the covered entity.
What Is the HIPAA Privacy Rule?
The Privacy Rule is the part of HIPAA that protects PHI through limiting who can access it, how it is used, and providing individuals with rights relating to their PHI.
What Is the HIPAA Security Rule?
The Security Rule is the part of HIPAA that covers how electronic creation, storage, use, and disclosure of PHI must be done to ensure the privacy of PHI.
What Are My HIPAA Compliance Requirements?
When HIPAA applies, the entity is expected to comply with HIPAA’s broad range of requirements. Key compliance requirements include providing a notice of privacy practices, naming a compliance officer responsible for complying with HIPAA, establishing policies and procedures, conducting a risk assessment, and entering into necessary agreements, such as business associate agreements. See our detailed explanation, HIPAA and Employee Benefits: The Basics of Compliance.
AI Contracts in Health Care: Avoiding the Data Dumpster Fire
For AI companies in the health care space, data is everything. It fuels model performance, drives product differentiation, and can make or break scalability. Yet too often, data rights are vaguely defined or completely overlooked in commercial agreements. That is a critical mistake.
Whether you are contracting with a health system, integrating into a digital health platform, or partnering with an enterprise vendor, your data strategy needs to be reflected clearly and precisely in your contracts. If it is not, you may find yourself locked out of the very assets you need to grow — or worse, liable for regulatory violations you never anticipated.
This article outlines three areas where we see health AI companies exposed to the most risk: training rights, revocation and retention terms, and shared liability. These are not just technical contract points. They are foundational to your valuation, your compliance posture, and your long-term defensibility.
1. Training Rights: Define Them with Precision
Most health AI vendors want some right to use client data to improve or train their models. That is expected. The problem is that many agreements use imprecise language like “improving services” or “analytics purposes” to describe what the vendor can actually do with the data. In the health care context, this can be legally problematic.
Under HIPAA, a use of protected health information (PHI) for purposes beyond patient treatment by a covered entity, payment, or health care operations, generally requires patient authorization. As a result, use cases like model training or product improvement require a strong case that the activity qualifies as the covered entity’s health care operations — otherwise it will require patient authorization. Even so-called “anonymized” or “de-identified” data is not always safe if it has not been properly and fully de-identified under the HIPAA standard for de-identification.
If your business model relies on using client data for generalized model training, you need to be explicit about that in your contract. This includes clarifying whether the data is identifiable or de-identified, what de-identification method is being used, and whether the outputs of that training are limited to the specific client’s model or can be used across your entire platform.
On the flip side, if you are offering a model-as-a-service that is customized to each client and does not rely on pooled training data, you should say that clearly and ensure the contract supports that structure. Otherwise, you risk a dispute down the road about how data can be used or whether outputs were improperly shared across clients.
It is also critical to align this provision with your business associate agreement (BAA) if you are processing PHI. A mismatch between the commercial terms and the BAA can raise compliance issues and raise red flags, especially during diligence. Remember, in most cases, if your commercial agreement states that you may de-identify data, but your BAA says that de-identification is prohibited, the BAA likely governs as a result of the typical conflict language in the BAA favoring the BAA when PHI is at issue.
2. Revocation and Retention: Address What Happens When the Contract Ends
Too many AI contracts are silent on what happens to data, models, and outputs after a contract is terminated. That silence creates risk on both sides.
From a client’s perspective, allowing a vendor to continue using the client’s data after termination to train future models can be problematic under HIPAA and even feel like a breach of trust. From the vendor’s perspective, losing rights to previously accessed data or trained outputs can disrupt product continuity or future sales.
The key is to define whether rights to use data or model outputs survive termination, and under what conditions. If you want to retain the ability to use data or trained models post-termination, that should be an express, bargained-for right. If not, you must be prepared to unwind that access, destroy any retained data, and potentially retrain models from scratch.
This is particularly important when derivative models are involved. A common trap is allowing the vendor to claim that once data is used to train a model, the model is no longer tied to the underlying data. Courts and regulators may not agree if that model continues to reflect sensitive patient information.
At minimum, your agreement should answer three questions:
Can the vendor retain and continue to use data accessed during the contract?
Do any rights to trained models or outputs survive termination?
Is there an obligation to destroy, de-identify, or return data after the relationship ends?
For higher-value relationships, consider negotiating a license that survives termination, coupled with appropriate compensation and confidentiality obligations. In the health care context, this post-termination license will generally involve only de-identified data. Otherwise, build in a data return or destruction clause that outlines how and when data must be returned or destroyed.
3. Shared Liability: Clarify Responsibility for Downstream Harms
One of the most overlooked issues in health AI contracting is liability allocation. AI-generated recommendations can influence medical decisions, billing practices, and patient communications. When something goes wrong, the question becomes: who is responsible?
AI vendors typically position themselves as only a tool for health care providers and try to disclaim liability for any downstream use. Health care providers, on the other hand, increasingly expect vendors to stand behind their products. This is especially true if those products generate clinical notes, diagnostic suggestions, or other regulated outputs.
The reality is that both sides carry risk, and your contract needs to reflect that. Disclaimers are important, but they do not replace a thoughtful risk allocation strategy.
First, vendors should require that their clients include representations that the client has the appropriate authorizations or consents under applicable laws, including HIPAA, the FTC Act, and state privacy laws, for all processing of data by the vendor contemplated by the agreement. The use of client data for training and processing, or otherwise, should be clearly articulated in the agreement. This helps protect you if a client later claims they were not aware of how their data was used or that it was used improperly.
Second, consider indemnity provisions tied to misuse of third-party intellectual property, violation of patient privacy, or regulatory enforcement actions. For example, if your model relies on PHI that was not properly authorized or de-identified under HIPAA, and that triggers an investigation by the Office for Civil Rights, you may be on the hook.
Third, be thoughtful about limitations on liability. Many Software as a Service (SaaS) agreements use a standard cap tied to fees paid in the prior 12 months. That may be insufficient in the health AI context, especially if the model is being used in a clinical setting. A tiered cap based on use case (e.g., documentation vs. clinical decision support) may be more appropriate.
The Takeaway
Data terms are not boilerplate in health AI contracts. They are a core part of your business model, your compliance posture, and your defensibility in the market. If you do not define your rights around training, revocation, and liability, someone else will, typically in a lawsuit or regulatory action.
For AI vendors, the goal should be to build trust through transparency. That means clear language, reasonable limitations, and defensible use cases. The companies that succeed in this space will not just build good models, but they will also build good contracts around them.
If you are looking to operationalize this strategy, audit your top five contracts this quarter. Flag any vague data rights, mismatched BAAs, or termination gaps. And if needed, renegotiate before your model performance, client trust, or legal exposure gets tested.
Employer Health Plans Must Report Number of Covered Children in New Mexico
Employers will be required to report, by July 1, 2025, the number of children in New Mexico covered by their employer-sponsored group health plans. The reporting requirement comes from regulations under the state’s Vaccine Purchasing Act, one of a handful of state laws that put surcharges on health insurers, group health plans, third-party administrators, or some combination, to fund states’ purchases of vaccinations for children in the relevant state.
Quick Hits
New Mexico’s Vaccine Purchasing Act requires employers that sponsor plans and health insurers to report the total number of children covered during the past year.
The purpose of the reporting is to help the state determine the quantity of vaccines to purchase.
The deadline to report the information is July 1, 2025.
Employers and health insurers must report to the New Mexico Office of the Superintendent of Insurance the total number of children in New Mexico who were enrolled in the plan during any part of the previous year and were under the age of nineteen as of the previous December 31. Not included are any children who are not residents of New Mexico, children who are members of a Native American tribe, and children who are enrolled in Medicaid or another medical assistance program administered by the state.
Each year, the state will estimate the amount of money needed to purchase, store, and distribute vaccines to all insured children in the state, including a reserve of 10 percent of the amount estimated.