Navigating the Termination of CHNV Parole Programs: Insights on I-9 Reverification and INA Compliance for Employers
On March 25, 2025, the Department of Homeland Security (DHS) announced the termination of the parole processes for citizens or nationals of Cuba, Haiti, Nicaragua, and Venezuela (CHNV parole programs). This decision will affect employers who must navigate the employment eligibility of affected individuals while ensuring compliance with anti-discrimination provisions outlined in the Immigration and Nationality Act (INA). The termination of these programs means that any parole status and employment authorization derived through CHNV parole programs will end by April 24, 2025. Employers must take steps to manage the reverification of affected employees’ employment eligibility without engaging in discriminatory practices.
Understanding the Challenges
As part of the CHNV parole programs, employment authorization documents (EADs) issued to beneficiaries bear the category code (C)(11). However, this code is not exclusive to CHNV beneficiaries, making identification difficult. Additionally, some CHNV beneficiaries may have updated their Forms I-9 with EADs that have validity dates extending beyond April 24, 2025. Employers who wish to ensure compliance face a complex challenge: how to identify affected employees for reverification without inadvertently violating the INA’s anti-discrimination provisions.
Employers who complete and retain paper I-9 forms, do not keep copies of identity and employment authorization documents, and do not participate in E-Verify may find the process particularly challenging. Sorting and extracting Forms I-9 based on “Foreign Passport and Country of Issuance” in Section 1, or by identifying Forms I-9 listing EADs in Section 2, may result in List A displaying overly broad findings, as these methods may capture individuals who are not CHNV beneficiaries and who hold valid employment eligibility.
Legal Compliance Considerations
The INA’s anti-discrimination provisions, particularly 8 USC § 1324b(a)(1)(A) and (a)(6), prohibit employers from treating employees differently based on citizenship, immigration status, or national origin. Employers are also prohibited from requesting additional or different documentation from employees based on these factors. The Department of Justice’s Immigrant and Employee Rights (IER) Section, formerly the Office of Special Counsel (OSC), has emphasized that employers should avoid making employment decisions—including reverification processes—based on an employee’s citizenship, immigration status, or national origin.
In the meantime, employers should consider:
Maintaining thorough records of the reverification process to demonstrate compliance with federal requirements and anti-discrimination provisions.
Conducting internal audits to ensure that no employees are treated differently based on citizenship, immigration status, or national origin during the reverification process.
Providing training to HR personnel and compliance teams on how to handle reverification without violating INA provisions, emphasizing the importance of treating all employees consistently and fairly.
Tracking the expiration dates of employees whose employment eligibility needs to be reverified.
Notifying affected employees of their upcoming need to provide updated documentation, regardless of their citizenship or immigration status. Do not request specific documents or additional information beyond what is required.
Key Takeaways
This issue represents new territory which has not been thoroughly analyzed or reviewed to date by authorities. IER technical guidance may be forthcoming on what U.S. employers should do if a particular classification of employment eligibility is suddenly terminated by the government, but some beneficiaries in that classification have updated their Forms I-9 with employment authorization validity dates that go beyond the termination date (April 24, 2025).
Fifth Circuit Court of Appeals Negates Ruling on Federal Contractor Minimum Wage
On March 28, 2025, the Fifth Circuit Court of Appeals vacated its previous ruling that permitted a $15 per hour minimum wage for federal contractors, shortly after President Donald Trump revoked the Biden administration rule setting that wage rate.
Quick Hits
The Fifth Circuit vacated its decision to uphold a $15 per hour minimum wage for federal contractors.
The court acted shortly after President Trump rescinded a Biden administration rule raising the minimum wage for federal contractors to $15 per hour.
An Obama-era rule establishing a $13.30 per hour minimum wage for federal contractors still stands.
On the website for the U.S. Department of Labor, the agency said it is “no longer enforcing” the final rule that raised the minimum wage for federal contractors to $15 per hour with an annual increase depending on inflation.
As of January 1, 2025, the minimum wage for federal contractors was $17.75 per hour, but that rate is no longer in effect. Therefore, an Obama-era executive order setting the minimum wage for federal contractors at $13.30 per hour now remains in force.
Some federal contracts may be covered by prevailing wage laws, such as the Davis-Bacon Act or the McNamara-O’Hara Service Contract Act. Those prevailing wage laws are still applicable.
Many states have their own minimum wage, and those vary widely.
Background on the Case
In February 2022, Louisiana, Mississippi, and Texas sued the federal government to challenge the Biden-era Executive Order 14026, which directed federal agencies to pay federal contractors a minimum wage of $15 per hour. The states argued the executive order violated the Administrative Procedure Act (APA) and the Federal Property and Administrative Services Act of 1949 (FPASA) because it exceeded the president’s statutory authority. The states also claimed the executive order represented an “unconstitutional exercise of Congress’s spending power.”
On February 4, 2025, the Fifth Circuit Court of Appeals upheld the $15 per hour minimum wage for federal contractors. A three-judge panel ruled that this minimum wage rule was permissible under federal law.
On March 14, 2025, President Trump rescinded the Biden-era executive order that established a $15 per hour minimum wage for federal contractors. In effect, that made the earlier court ruling moot, according to the Fifth Circuit.
Next Steps
Going forward, the Obama-era $13.30 minimum wage rate for federal contractors still stands. Federal contractors operating in multiple states may wish to review their policies and practices to ensure they comply with state minimum wage laws and federal prevailing wage laws. If they use a third-party payroll administrator, they may wish to communicate with the administrator to confirm legal compliance.
New Mexico Bills Would Expand Protections for Medical Marijuana and Allow Use of Medical Psilocybin
Lawmakers in New Mexico have advanced two bills that would expand protections for medical marijuana patients and permit the use of medical psilocybin.
Quick Hits
The New Mexico House of Representatives recently passed a bill to protect workers from penalties at work for off-duty use of medical marijuana.
The New Mexico Senate and House of Representatives both passed a bill to permit medical use of psilocybin.
The governor has until April 11, 2025, to sign or veto any bill that passes both chambers.
A bill (House Bill (HB) 230) in the New Mexico Legislature would protect employees from being disciplined at work for off-duty use of medical cannabis. HB 230 passed the state House of Representatives on March 12, 2025, and was sent to a Senate committee. It clarifies that an employee could not be considered impaired by cannabis at work solely because of the presence of THC metabolites or components of cannabis in the body. It would prohibit employers from conducting random drug testing for cannabis, if the employee is a qualified medical marijuana patient over the age of eighteen. Random drug testing would be permitted if the employer has a reasonable suspicion of marijuana consumption during work hours that resulted in an accident or property damage.
In 2021, New Mexico legalized the possession, consumption, and cultivation of recreational cannabis for adults twenty-one and older. The state legalized medical marijuana in 2007. The medical conditions that may qualify under the New Mexico Medical Marijuana Program include cancer, anxiety, post-traumatic stress disorder, insomnia, glaucoma, HIV/AIDS, hepatitis C, and multiple sclerosis, among others.
In a growing national trend, recreational marijuana is now legal in twenty-four states and Washington, D.C. Cannabis use and possession remain illegal on federal property under federal law.
Medical Psilocybin
Another bill, Senate Bill (SB) 219, recently passed the New Mexico legislature to approve medical use of psilocybin, sometimes called “magic mushrooms.” If signed by the governor, SB 219 would make it legal for patients to use psilocybin prescribed by a doctor for a qualifying medical condition, including major treatment-resistant depression, post-traumatic stress disorder, substance use disorder, and end-of-life care.
Next Steps
Governor Michelle Lujan Grisham has until April 11, 2025, to sign or veto bills that pass both chambers of the legislature.
In the meantime, employers in New Mexico may wish to review their drug testing policies and practices to ensure they comply with state law, particularly with respect to medical marijuana patients. Employers can discipline or fire workers who use marijuana while on duty or arrive at work intoxicated.
Why Reporting Accounting Fraud Will Lead to Future SEC Whistleblower Awards
A recent CNN documentary about the Enron accounting scandal is a stark reminder of the devastation that results when corporate officers cook the books – thousands of employees lost their jobs, individual investors and pension funds lost billions, and the stock market plummeted as investors lost confidence in the accuracy of public company accounting. Most employees that knew about the fraud failed to speak up due to fear of retaliation and a corporate culture characterized by greed and deception. If Enron employees had been protected against retaliation and incentivized to report accounting fraud to the SEC, the SEC may have learned about the fraudulent practices early enough to combat and remedy those practices.
Under the SEC Whistleblower Program, whistleblowers can submit tips anonymously to the SEC through an attorney and be eligible for an award for exposing any material violation of the federal securities laws. Since 2011, the SEC has issued more than $2.2 billion in awards to whistleblowers. The largest SEC whistleblower awards to date are:
$279 million (May 5, 2023)
$114 million (Oct. 22, 2020)
$110 million (Sept. 15, 2021)
This article discusses: 1) how whistleblowers can earn awards for reporting accounting fraud to the SEC; 2) the pervasiveness of accounting fraud at U.S. publicly traded companies; and 3) the SEC’s focus on accounting fraud which, in turn, will lead to future SEC whistleblower awards.
SEC Whistleblower Program
In response to the 2008 financial crisis, Congress passed the Dodd-Frank Act, which created the SEC Whistleblower Program. Under the program, the SEC is required to issue monetary awards to whistleblowers when they provide original information about violations of the federal securities laws (e.g., accounting fraud) that leads to successful SEC enforcement actions with monetary sanctions in excess of $1 million. Whistleblowers are eligible to receive an award of between 10% and 30% of the total monetary sanctions collected in a successful enforcement action. In certain circumstances, even officers, directors, auditors, and accountants may be eligible for awards under the program.
Since the inception of the SEC Whistleblower Program, whistleblower tips have enabled the SEC to bring successful enforcement actions resulting in more than $6 billion in monetary sanctions. In Fiscal Year (FY) 2024 alone, the SEC Office of the Whistleblower awarded more than $255 million to whistleblowers, which included a $98 million award. Also in FY 2024, the SEC received nearly 25,000 whistleblower tips, of which 2,609 related to Corporate Disclosures and Financials. As detailed below, recent data suggest that whistleblower tips related to accounting frauds will likely increase in the coming years due to rampant accounting fraud, violations, and errors.
Whistleblowers Needed: Accounting Fraud is Widespread
In October 2023, a paper titled How Pervasive is Corporate Fraud? estimated that “on average 10% of large publicly traded firms are committing securities fraud every year.” According to the paper:
Accounting violations are widespread: in an average year, 41% of companies misrepresent their financial reports, even when we ignore simple clerical errors. Fortunately, securities fraud is less pervasive. In an average year, 10% of all large public corporations commit (alleged) securities fraud, with a 95% confidence interval between 7 and 14%.
The paper’s findings about the pervasiveness of accounting violations were echoed in a December 2024 Financial Times article titled Accounting errors force US companies to pull statements in record numbers. According to the article:
The number of US companies forced to withdraw financial statements because of accounting errors has surged to a nine-year high, raising questions about why mistakes are going unnoticed by auditors.
In the first 10 months of this year, 140 public companies told investors that previous financial statements were unreliable and had to reissue them with corrected figures, according to data from Ideagen Audit Analytics. That is up from 122 in the same period last year and more than double the figure four years ago. So-called reissuance restatements cover the most serious accounting errors, either because of the size of the mistake or because an issue is of particular concern to investors.
Fortunately for investors, officers, directors, auditors, and accountants can be eligible for awards under the SEC Whistleblower Program, and whistleblower tips – especially from individuals with actual knowledge of the fraud – enable the SEC to quickly detect and halt accounting schemes.
Accounting Fraud in SEC Crosshairs
SEC enforcement actions against accounting violations and improper disclosures often lead to significant penalties. Eligible whistleblowers may receive awards of between 10% and 30% of the monetary sanctions collected in successful enforcement actions. Since 2020, some of the SEC’s largest enforcement actions were brought against companies engaged in accounting violations:
In 2020, General Electric agreed to pay a $200 million penalty for misleading investors by understating losses in its power and insurance businesses.
In 2021, The Kraft Heinz Company agreed to a $62 million penalty to settle charges that it engaged in a long-running expense management scheme that resulted in the restatement of several years of financial reporting
In 2021, Luckin Coffee agreed to pay a $180 million penalty for defrauding investors by materially misstating the company’s revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates.
In 2022, accounting firm Ernst & Young agreed to pay a $100 million penalty due to some employees cheating on CPA ethics exams and for misleading SEC investigators.
In 2024, UPS agreed to pay a $45 million penalty for misrepresenting its earnings by improperly valuing its UPS Freight business unit.
Whistleblower tips concerning similar accounting violations have led to, and will continue to lead to, significant whistleblower awards. For more information about reporting accounting fraud to the SEC and earning a whistleblower award, see the following articles:
How to Report Accounting Fraud an Earn an SEC Whistleblower Award
5 Things Whistleblowers Should Know About Reporting Accounting Fraud to the SEC
Improper revenue recognition tops SEC fraud cases
DOL’s Office of Foreign Labor Certification Implements Program to Delete FLAG Cases Older Than Five Years
As of March 27, 2025, the U.S. Department of Labor’s (DOL) Office of Foreign Labor Certification (OFLC) has started deleting case records that are more than five years old from the Foreign Labor Access Gateway (FLAG) system.
Quick Hits
The National Archives and Records Administration (NARA) Records Schedule mandates that records classified as “temporary” be deleted after their retention period ends.
Case records older than five years from the date of final determination within the FLAG system will be deleted.
Deleted case records are permanently irretrievable from the FLAG system.
Only case records older than five years from the date of final determination within the FLAG system will be deleted and will include the following case types:
Prevailing Wage Determinations
Labor Certification Applications (H-2A, H-2B, CW-1 visas)
Labor Condition Applications (H-1B, H-1B1, and E-3 visas)
Pursuant to NARA requirements, OFLC gave notice on February 14, 2025, that it would start deleting records from the FLAG system that were more than five years old on March 20, 2025. OFLC later stated that it would delay the start of the deletion until March 27, 2025. In the notice, stakeholders were encouraged to download any impacted records before March 27 because deleted records will be permanently irretrievable from the FLAG system once deleted.
The deleted records from the FLAG system will likely have minimal impact on employers or current visa holders, as these documents are normally downloaded from the system for use in immigration petitions. The common threshold for employer immigration compliance audits is five years.
Split D.C. Circuit Panel Rules Trump Can Remove Wilcox from NLRB – NLRB to Stay Without a Quorum
A three-judge panel for the U.S. Court of Appeals issued a favorable ruling for President Trump, staying a recent district court decision that ruled his termination of National Labor Relations Board (“NLRB” or the “Board”) Member Gwynne Wilcox was unlawful. Thus, it appears that the Board again is left without statutory quorum, which under the National Labor Relations Act (“NLRA”) requires at least three members.
Trump Initially Removes Wilcox
By way of background, on January 28, 2025, in one of his first moves in office, President Donald Trump removed Board Member Gwynne Wilcox. President Trump sent an email to Member Wilcox, who began her term in September 2023, stating that he had lost confidence in Wilcox’s ability to lead the Board and that there were no valid constitutional limits on the President’s ability to remove a Board member with or without cause. The email also stated the statutory limitations on removal power were unconstitutional because they are inconsistent with the vesting of the executive power in the President. Marvin Kaplan, who Trump tapped to replace Ms. Wilcox as Board Chair, instructed his direct report to begin Ms. Wilcox’s termination, cut off her access to her accounts, and have Ms. Wilcox clean out her office. Trump’s decision to remove the Democratic appointee left the Board with only two sitting members and without a quorum to hear cases.
D.C. District Judge Then Reinstates Wilcox
Ms. Wilcox then proceeded to challenge her removal and filed a lawsuit alleging Trump violated the NLRA. Under the NLRA, Board Members can only be removed before their term’s end for “malfeasance” or “neglect of duty,” and they also must be given “notice and a hearing.” Ms. Wilcox sought a ruling that her termination was unlawful and void, along with injunctive relief against Board Chair Kaplan so that she may resume her role as a Board member.
As we reported here, on March 6, 2025, U.S. District Judge Beryl A. Howell agreed with Wilcox and determined that she was illegally fired. Judge Howell ordered that Kaplan not prevent Wilcox from doing her job and completing her five-year term, which expires on August 27, 2028. In her decision, Judge Howell relied on Humphrey’s Executor v. U.S., 295 U.S. 602 (1935), a Supreme Court case that outlined the principle for Congress to establish independent, multimember commissions whose members are appointed by the President. In 1935, the Supreme Court in Humphrey’s Executor upheld restrictions on the President’s authority to remove officers of certain types of independent agencies—in that case, a commissioner of the Federal Trade Commission. Humphry’s Executor has historically been applied to the NLRA, limiting the President to only remove Board Members for cause. The district court held that Humphrey’s Executor is still good law, and in effect still allows Congress to insulate the heads of multi-member expert agencies from presidential removal.
D.C. Circuit Now Reverses Course, At Least for the Time Being
Trump immediately appealed the district court’s decision to the U.S. Court of Appeals for the District of Columbia. On March 28, 2025, a panel of the D.C. Circuit, in a 2-1 decision, paused the district court’s ruling and found that restrictions on the President’s power to remove officers of the executive branch are likely unconstitutional.
The two Republican-appointed judges, Judge Justin Walker and Judge Karen Henderson, agreed with Trump’s arguments granting him broader executive power. Judge Walker wrote, “The Supreme Court has said that Congress cannot restrict the President’s removal authority over agencies that ‘wield substantial executive power.’” Democratic-appointed Judge Patricia Millet dissented in a 53-page opinion, criticizing the panel for deciding to “rewrite controlling Supreme Court precedent” in a way that will end up “disabling agencies that Congress created.”
The panel’s decision is not a final decision on the merits, and only stays the district court’s ruling until a final decision on the merits is reached. The panel is scheduled to hear oral arguments on the merits on May16.
However, on April 1, Wilcox filed a petition for initial hearing en banc and for rehearing en banc with the full D.C. Circuit. In court filings, Wilcox told the full D.C. Circuit that the full court should hear her case because the special panel’s opinion rewrote U.S. Supreme Court precedent. According to Wilcox, this “is an extraordinary case justifying initial en banc review of the merits.”
What’s at Stake?
The ongoing legal between Trump and Wilcox raises several constitutional issues. President Trump conceded that his email termination issued to Wilcox violated statutory requirements under the NLRA for removing a Board member. Instead, Trump’s strategy has been to contend that the President’s removal power is fundamentally unrestricted, and therefore the NLRA’s good-cause requirement is unconstitutional. Article I of the Constitution vests all legislative powers in Congress (the Senate and House of Representatives). Article II vests the executive power in the President. Article III vests the judicial power in one Supreme Court and other inferior Courts established by Congress. The ongoing legal battle between President Trump and Wilcox presents a clash between the executive and legislative branches. By terminating Wilcox, President Trump wielded executive power to overcome the NLRA, a statute enacted by Congress. The executive and legislative branches now look to the courts (Article III) to interpret the Constitution, past practice, and judicial precedent to resolve the current conflict.
Takeaways
For now, Trump’s termination of Wilcox stands, leaving the Board without a quorum. But the decision may not last. On April 1, Wilcox asked the full D.C. Circuit to hear her case challenging her termination instead of having a three-judge panel of the court conduct the initial review on the merits.
We will continue to monitor future developments on our blog. Employers with questions about how the decision affects them should consult experienced labor counsel.
Virginia Expands Non-Compete Restrictions Beginning July 1, 2025
At the end of March, Governor Glenn Youngkin signed SB 1218, which amends Virginia’s non-compete ban for “low-wage” workers (the “Act”) to include non-exempt employees under the federal Fair Labor Standards Act (the “FLSA”).
The expanded restrictions take effect July 1, 2025.
What’s New?
As we discussed in more detail here, since July 2020, the Act has prohibited Virginia employers from entering into, or enforcing, non-competes with low-wage employees. Prior to the amendment, the Act defined “low-wage employees” as workers whose average weekly earnings were less than the average weekly wage of Virginia, which fluctuates annually and is determined by the Virginia Employment Commission. In 2025, Virginia’s average weekly wage is $1,463.10 per week, or approximately $76,081 annually. “Low-wage employees” also include interns, students, apprentices, trainees, and independent contractors compensated at an hourly rate that is less than Virginia’s median hourly wage for all occupations for the preceding year, as reported by the U.S. Bureau of Labor Statistics. However, employees whose compensation is derived “in whole or in predominant part” from sales commissions, incentives or bonuses are not covered by the law.
Effective July 1, 2025, “low-wage employees” will also include employees who are entitled to overtime pay under the FLSA for any hours worked in excess of 40 hours in any one workweek (“non-exempt employees”), regardless of their average weekly earnings. In other words, the amendment will extend Virginia’s non-compete restrictions to a significantly larger portion of the Commonwealth’s workforce.
A Few Reminders
The amendment does not significantly alter the other requirements under the Act regarding non-competes, including the general notice requirements and ability for a low-wage employee to institute a civil action. Although Virginia employers are not required to give specific notice of a noncompete to individual employees as some other states require, they must display a general notice that includes a copy of the Act in their workplaces. Failing to post a copy of the law or a summary approved by the Virginia Department of Labor and Industry (no such summary has been issued) can result in fines up to $1,000. Therefore, Virginia employers should update their posters to reflect the amended Act by July 1, 2025.
Employees are also still able to bring a civil action against employers or any other person that attempts to enforce an unlawful non-compete. Low-wage employees seeking relief are required to bring an action within two years of (i) the non-competes execution, (ii) the date the employee learned of the noncompete provision, (iii) the employee’s resignation or termination, or (iv) the employer’s action aiming to enforce the non-compete. Upon a successful employee action, courts may void unlawful non-compete agreements, order an injunction, and award lost compensation, liquidated damages, and reasonable attorneys’ fees and costs, along with a $10,000 civil penalty for each violation.
While the law creates steep penalties for non-competes, nothing within the legislation prevents an employer from requiring low-wage employees to enter into non-disclosure or confidentiality agreements.
Takeaways
The amendment emphasizes the importance for Virginia employers to correctly classify their employees as exempt or non-exempt under the FLSA. Additionally, the amendment does not apply retroactively, so it will not affect any non-competes with non-exempt employees that are entered into or renewed prior to July 1, 2025. Nevertheless, enforcing non-compete agreements with non-exempt employees may be more challenging after this summer, so Virginia employers may wish to consider renewing such agreements without non-compete provisions to ensure other provisions can be properly enforced.
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.
For At Least One Employer, Reliance on an Outdated Arbitration Agreement Proved to be a Losing Gamble
As we have reported time and again, California courts have applied extra scrutiny to employee arbitration agreements in recent years, and have not hesitated to deny arbitration where there is a reasonable basis for doing so. This trend demands that employers be vigilant and update arbitration agreements when developments in the law implicate them. In the recent case of Ford v. The Silver F, Inc., Cal. Ct. App. 3rd Dist., No. C099133, a casino operator learned the hard way the consequence of rolling the dice with an outdated agreement.
In the wake of Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022), which ruled that employers may compel the “individual” component of a Private Attorneys General Act (PAGA) claim to arbitration under the Federal Arbitration Act, it has become commonplace for trial courts to compel individual PAGA claims to arbitration and stay the non-individual PAGA claims in the meantime. That was precisely what the employer, Parkwest, attempted to do in Ford. Unfortunately for Parkwest, the relevant arbitration agreement was clearly written in a pre-Viking River world and did not contemplate how the law might develop.
Specifically, the Parkwest arbitration agreement stated that it “does not apply” to “claims for workers’ compensation or unemployment compensation, specified administrative complaints, Employment Retirement Income Security Act (ERISA) claims, or, as relevant here, “representative claims under [PAGA].”
The Court of Appeal affirmed the trial court’s denial of Parkwest’s motion to compel arbitration. It rejected Parkwest’s argument that the agreement should be read as excluding only “non-individual” PAGA claims, holding the carveout for “representative claims under [PAGA]” plainly referred to all PAGA claims—especially considering that the case law distinguishing between “individual” and “non-individual” claims actions did not develop until after the agreement was drafted.
While this decision is unpublished and noncitable, it serves as a critical reminder to employers to be vigilant about keeping their arbitration agreements up to date. If we’ve said it once, we’ve said it a thousand times: an arbitration agreement is not something to be gambled with.
Attention Department of Labor Contractors and Grantees: A Federal Court Hits Pause on Executive Orders Related to Diversity, Equity, and Inclusion
Federal courts continue to grapple with challenges to President Trump’s executive orders (“EOs”) related to diversity, equity, and inclusion (“DEI”), particularly EO 14151, Ending Radical And Wasteful Government DEI Programs And Preferencing, and EO 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. As we’ve noted in our coverage of the litigation first filed in the District Court of Maryland, there has been a sense of whiplash among the courts, with the District Court initially issuing a nationwide injunction that was then stayed by the Fourth Circuit Court of Appeals. Now a second federal court has weighed in, issuing a new, nationwide temporary restraining order (“TRO”). This new TRO is more limited than the prior preliminary injunction issued by the District Court of Maryland, in that the new TRO only applies to Department of Labor (“DOL”) contractors and grantees. Nevertheless, the Court’s reasoning could be helpful to the contractors and grantees of other agencies facing renewed demands to execute the DEI Certification.
Case Background
The case is Chicago Women in Trades v. Trump et al., 1:25-cv-02005. It was filed on February 26, 2025, in the U.S. District Court for the Northern District of Illinois by Chicago Women in Trades (“CWIT”), an Illinois-based non-profit and DOL grantee whose mission is to prepare women to enter and remain in high-wage skilled trades, such as carpentry, electrical work, welding, and plumbing.
On March 18, 2025, CWIT filed a Motion for a TRO broadly seeking to preclude “any and all federal agencies” from taking action adverse to a federally funded contract, grant, or other implementing vehicle, where that action is animated by either EO 14151 or EO 14173. Alternatively, CWIT sought an injunction prohibiting only DOL from (1) taking any adverse action animated by EO 14151 or EO 14173 on any of the federal grants by which CWIT receives funding, as either a grant recipient, sub-recipient, or subcontractor; and (2) directing any other grant recipient or contractor under which CWIT operates as a sub-recipient or subcontractor from taking any adverse action on any of those grants on the basis of the anti-diversity EOs. Thus, the Plaintiff essentially offered the Court a choice of whether to fashion broad relief, or narrow relief.
The Executive Orders
We have previously written extensively about the two EOs at issue. The EO provisions that are relevant to the CWIT litigation include (1) the Termination Provision of EO 14151 (requiring the termination of “equity-related” contracts and grants), (2) the Certification Provision of EO 14173 (requiring contractors and grantees to execute a certification that they do not operate DEI programs that run afoul of applicable antidiscrimination laws and stating that compliance with antidiscrimination laws is material to the government’s payment decisions under the False Claims Act (“FCA”)), and (3) the Enforcement Provision of EO 14173 (requiring the Attorney General to prepare a report identifying potential targets for investigation and enforcement related to DEI).
Scope and Effect of the March 27, 2025, TRO
The Termination Provision: Per the terms of the TRO, DOL “shall not pause, freeze, impede, block, cancel, or terminate any awards, contracts or obligations” or “change the terms of” current agreements “with CWIT” on the basis of the Termination Provision in EO 14151. Note that this part of the TRO does not apply to agencies other than DOL or to contractors or grantees other than CWIT.
The Certification Provision: The Court ordered that DOL “shall not require any grantee or contractor to make any ‘certification’ or other representation pursuant to” the Certification Provision of EO 14173. Note that this applies not only to CWIT, but to any and all DOL contractors and grantees. The Court found that a TRO precluding “any enforcement” of the Certification Provision is warranted in order to ensure that CWIT has complete relief, given that CWIT works in conjunction with other organizations that may be deemed to provide DEI-related programming, and because other similarly situated organizations would not need to show different facts to obtain the relief sought by CWIT.
The Enforcement Provision: The Court ordered that the Government shall not initiate any False Claims Act enforcement “against CWIT” pursuant to the Certification Provision of EO 14173.
The main takeaway for the federal contracting and grant community is that DOL cannot ask any of its contractors and grantees to sign the DEI Certification of EO 14173. The rest of the TRO is limited to CWIT. The Northern District of Illinois may have limited the relief available under the TRO due to the Fourth Circuit’s March 14, 2025, ruling to stay a much broader preliminary injunction that was issued by the District Court of Maryland. (According to Judge Rushing of the Fourth Circuit, “[t]he scope of the preliminary injunction alone should raise red flags: the district court purported to enjoin nondefendants from taking action against nonplaintiffs.”)
Conclusion
Although Judge Kennelly of the Northern District of Illinois issued a TRO that applies only to DOL contractors and grantees, his reasoning can serve as a roadmap for the contractors and grantees of other agencies who may receive the EO 14173 DEI Certification. Judge Kennelly expressed concern that the EOs likely violate the First and Fifth Amendments of the Constitution, as well as the Spending Clause and the Separation of Powers. As such, the Northern District of Illinois is now the second federal court to call out both the vagueness of the challenged EOs and the government’s unwillingness to define the EOs’ key concepts, such as “DEI” and “illegal DEI”. Accordingly, contractors and grantees faced with the DEI Certification should increasingly feel that it is reasonable to respond by bringing the ambiguities in the certification language to the attention of the Contracting Officer, while, as we have previously suggested, contemporaneously memorializing the basis for the contractor’s reasonable interpretation of the ambiguous certification, in order to assist in the defense of any potential FCA claim.
Virginia Governor Vetoes AI Bill As States Struggle to Approve Regulations
Virginia Governor Glenn Youngkin vetoed an artificial intelligence (“AI”) bill on March 24 that would have regulated how employers used automation in the hiring process. While the veto relieves employers of a new layer of regulation, the bill represented one of several state-level efforts to prevent potential harmful uses of AI in the employment context.
The Virginia General Assembly passed the “High-Risk Artificial Intelligence Developer and Deployer Act” during the 2025 legislative session. The bill would have regulated both creators and users of AI technology across multiple use cases, including employment. It defined “high-risk artificial intelligence” to cover any AI systems intended to make autonomous consequential decisions, or serve as a substantial factor in making consequential decisions. As relevant to the employment context, “consequential decisions,” included decisions about “access to employment.”
The law would have required Virginia employers to implement safeguards to prevent potential harm from “high-risk” AI, including adopting a risk management policy and conducting an impact assessment for the use of the technology. It also would have required users of covered AI systems to disclose their use to affected consumers, including employment applicants. The bill called for enforcement by the Virginia Attorney General only, with designated civil penalties for violations and no private right of action. But it also specified that each violation would be treated separately, so it created the potential for significant penalties if, for example, an employer failed to disclose its use of AI to a large group of applicants, resulting in a $1,000 penalty for every applicant impacted.
Youngkin said he vetoed the bill because he feared it would undermine Virginia’s progress in attracting AI innovators to the Commonwealth, including thousands of new tech startups. He also said existing laws related to discrimination, privacy and data use already provided necessary consumer protections related to AI. Had the bill avoided the governor’s veto pen, Virginia would have joined Colorado as the first two states to approve comprehensive statutes specifically governing the use of AI in the employment context. The Colorado law, passed in 2024, will become effective on February 1, 2026 and has many similarities to the bill Youngkin vetoed, including requirements that users of high-risk AI technology exercise reasonable care to prevent algorithmic discrimination.
Other states have laws that touch on AI-related topics, but lack the level of detail and specificity contained in the Colorado law. In several more states, attempts to regulate the use of AI in the employment context are meeting similar fates to Virginia’s law. For example, Texas legislators recently abandoned efforts to pass an AI bill modelled after the Colorado legislation. Similar bills have failed or appear likely to fail in Georgia, Hawaii, Maryland, New Mexico and Vermont. And even in states with more employment-related regulations like Connecticut, Democratic Governor Ned Lamont has resisted efforts by lawmakers to push through AI regulations. The exception to the trend may be California, where legislators are continuing to pursue legislation – A.B. 1018 – that closely resembles both the Colorado and Virginia bills with even steeper penalties.
In all, states remain interested in regulation of emerging AI tools, but have yet to align on the best way to handle such regulation in the employment context. Still, employers should use caution when using automated tools or outsourcing decision-making to third parties that use such technology. Existing laws, including the Fair Credit Reporting Act and Title VII of the Civil Rights Act, still apply to these new technologies. And while momentum for new state-level AI regulation seems stalled, employers should monitor state level developments as similar proposed laws proceed through state legislatures.
SEC Whistleblower Reform Act Reintroduced in Congress
Last Wednesday, March 26, 2025, Senator Grassley (R-IA) and Senator Warren (D-MA) reintroduced the SEC Whistleblower Reform Act. First introduced in 2023, this bipartisan bill aims to restore anti-retaliation protections to whistleblowers who report their concerns within their companies. As upheavals at government agencies dominate the news cycle, whistleblowers might feel discouraged and hesitant about the risks of coming forward to report violations of federal law. This SEC Whistleblower Reform Act would expand protections for these individuals who speak up, and it would implement other changes to bolster the resoundingly successful SEC Whistleblower Program.
The SEC Whistleblower Incentive Program
The SEC Whistleblower Incentive Program (the “Program”) went into effect on July 21, 2010, with the adoption of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The Program has since become an essential tool in the enforcement of securities laws. The program benefits the government, which collects fines from the companies found in violation of federal securities laws; consumers, who benefit from the improvements companies must make to ensure they refrain from, and stop, violating federal law; and the whistleblowers themselves, who can receive awards for the information and assistance they provide. Since its inception, the SEC Whistleblower Program has recouped over $6.3 billion in sanctions, and it has awarded $2.2 billion to 444 individual whistleblowers. In FY 2024 alone, the Commission awarded over $255 million to forty-seven individual whistleblowers.
Under the Program, an individual who voluntarily provides information to the SEC regarding violations of any securities laws that leads to a successful civil enforcement action that results in over $1 million in monetary sanctions is eligible to receive an award of 10–30% of the fines collected. Since the SEC started accepting tips under its whistleblower incentive program in 2010, apart from a dip in 2019, the number of tips submitted to the SEC has steadily increased. In Fiscal Year 2024, the SEC received more than 24,000 whistleblower tips, the most ever received in one year.
Restoring Protections for Internal Whistleblowers
While the SEC Whistleblower Program has been successful by any measure, in 2018, the Supreme Court significantly weakened the Program’s whistleblower protections in Digital Realty Trust v. Somers, 583 U.S. 149 (2018). The Court ruled in Digital Realty that the Dodd-Frank Act’s anti-retaliation protections do not apply to whistleblowers who only report their concerns about securities violations internally, but not directly to the SEC. The decision nullified one of the rules the SEC had adopted in implementing the Program. Because many whistleblowers first report their concerns to supervisors or through internal compliance reporting programs, this has been immensely consequential. The decision has denied a large swath of whistleblowers the protections and remedies of the Dodd-Frank Act, including double backpay, a six-year statute of limitations, and the ability to proceed directly to court.
The bipartisan SEC Whistleblower Reform Act, reintroduced by Senators Grassley and Warren on March 26, 2025, restores the Dodd-Frank Act’s anti-retaliation protections for internal whistleblowers. In particular, the Act expands the definition of “whistleblower” to include:
[A]ny individual who takes, or 2 or more individuals acting jointly who take, an action described . . . , that the individual or 2 or more individuals reasonably believe relates to a violation of any law, rule, or regulation subject to the jurisdiction of the Commission . . . .
. . .
(iv) in providing information regarding any conduct that the whistleblower reasonably believes constitutes a violation of any law, rule, or regulation subject to the jurisdiction of the Commission to—
(I) a person with supervisory authority over the whistleblower at the employer of the whistleblower, if that employer is an entity registered with, or required to be registered with, or otherwise subject to the jurisdiction of, the Commission . . . ; or
(II) another individual working for the employer described in subclause (I) who the whistleblower reasonably believes has the authority to—
(aa) investigate, discover, or terminate the misconduct; or
(bb) take any other action to address the misconduct.
With these changes to the definition of a “whistleblower,” the Act would codify the Program’s anti-retaliation protections for an employee who blows the whistle by reporting only to their employer, and not also to the SEC. Notably, the Act would apply not only to claims filed after the date of enactment, but also to all claims pending in any judicial or administrative forum as of the date of the enactment.
Ending Pre-Dispute Arbitration Agreements for Dodd-Frank Retaliation Claims
Additionally, the SEC Whistleblower Reform Act would render unenforceable any pre-dispute arbitration agreement or any other agreement or condition of employment that waives any rights or remedies provided by the Act and clarifies that claims under the Act are not arbitrable. In other words, retaliation claims under the Dodd-Frank Act must be brought before a court of law and may not be arbitrated, even if an employee signed an arbitration agreement. This would bring Dodd-Frank Act claims into alignment with the Sarbanes-Oxley Act of 2002 (“SOX”), another anti-retaliation protection often applicable to corporate whistleblowers. While the Dodd-Frank Act eliminated pre-dispute arbitration agreements for SOX claims, it included no such arbitration ban for Dodd-Frank claims. As a result, two claims arising from the same underlying conduct often need to be brought in separate forums—arbitration for Dodd-Frank and court for SOX—or an employee must choose between the two remedies.
Reducing Delays in the Program
The SEC Whistleblower Reform Act would also benefit whistleblowers by addressing the long delays that have plagued the Program, which firm partners Debra Katz and Michael Filoromo have urged the SEC to remedy and have written publicly on to raise awareness on this topic In particular, the Act sets deadlines by which the Commission must take certain steps in the whistleblowing process. The Act provides that:
(A)(i) . . . the Commission shall make an initial disposition with respect to a claim submitted by a whistleblower for an award under this section . . . not later than the later of—
(I) the date that is 1 year after the deadline established by the Commission, by rule, for the whistleblower to file the award claim; or
(II) the date that is 1 year after the final resolution of all litigation, including any appeals, concerning the covered action or related action.
These changes are important because SEC whistleblowers currently might expect to wait several years for an initial disposition by the SEC after submitting an award application, and years more for any appeals of the SEC’s decision to conclude. The Act’s amendments set clearer deadlines and expectations for the Commission and would speed up its disposition timeline—and the provision of awards to deserving whistleblowers.
While the Act does provide for exceptions to the new deadline requirements, including detailing the circumstances under which the Commission may extend the deadlines, the Act specifies that the initial extension may only be for 180 days. Any further extension beyond 180 days must meet specified requirements: the Director of the Division of Enforcement of the Commission must determine that “good cause exists” such that the Commission cannot reasonably meet the deadlines, and only then may the Director extend the deadline by one or more additional successive 180-day periods, “only after providing notice to and receiving approval from the Commission.” If such extensions are sought and received, the Act provides that the Director must provide the whistleblower written notification of such extensions.
Conclusion
The SEC Whistleblower Reform Act, which would reinstate anti-retaliation protections for whistleblowers and ensure that the Program runs more efficiently, would be a significant step forward for the enforcement of federal securities laws and for the whistleblowers who play a vital role in those efforts. The bipartisan introduction of the Act is a testament to the crucial nature of the Program.