USCIS Announces New Employment Authorization Procedures for Certain Hong Kong Residents Under Deferred Enforced Departure
The U.S. Citizenship and Immigration Services (USCIS) announced updated procedures for certain Hong Kong residents covered under Deferred Enforced Departure (DED) to apply for Employment Authorization Documents (EADs). These new procedures, detailed in a Federal Register notice posted for public inspection, enable eligible individuals to apply for EADs that will remain valid through Feb. 5, 2027.
Additionally, the notice automatically extends the validity of existing Hong Kong DED-related EADs that bear an expiration date of either Feb. 5, 2023, or Feb. 5, 2025, and include a Category Code of A11. These EADs are now valid through Feb. 5, 2027, and can be presented as proof of both identity and employment authorization when completing Form I-9, employment eligibility verification.
Background on Deferred Enforced Departure (DED) for Hong Kong Residents
Deferred enforced departure (DED) is a discretionary authority granted by the president of the United States as part of constitutional powers to conduct foreign relations. While DED is not a formal immigration status, it provides eligible individuals with protection from removal from the United States for a designated period.
On Jan. 15, 2025, a presidential memorandum extended DED protections for certain Hong Kong residents through Feb. 5, 2027. This extension applies to individuals who were present in the United States as of Jan. 15, 2025. Eligible individuals under DED are not subject to removal during the designated period and are authorized to work in the United States.
Applying for Employment Authorization
Eligible Hong Kong residents that DED covers may apply for an EAD by filing Form I-765, application for employment authorization. USCIS adjudicates each application on a case-by-case basis to ensure it meets all eligibility requirements and standards. As part of this process, USCIS conducts screening and vetting to identify any potential concerns related to fraud, public safety, or national security.
For individuals who may need to travel outside the United States and return, the Department of Homeland Security (DHS) may, at its discretion, grant travel authorization. To request this authorization, eligible individuals must file Form I-131, application for travel documents, parole documents, and arrival/departure records.
Considerations for Employers and Employees
Employers should be aware that individuals with automatically extended Hong Kong DED-related EADs can present an expired card as valid documentation for Form I-9 purposes. When an employee presents an EAD whose original “card expires” date has passed, employers should determine if it is a Hong Kong DED EAD that has been automatically extended and is, therefore, valid for Form I-9 purposes. To properly assess, employers must look at the “category” section on the expired EAD and identify the code “A11” to confirm the card is eligible for an automatic extension. The extended validity of these documents ensures continued employment authorization through Feb. 5, 2027. For additional information on eligibility and application procedures, visit the official USCIS website or consult the Federal Register notice outlining the DED-related policies for Hong Kong residents.
10 Important Insights for Procurement Fraud Whistleblowers in 2025
If you have information about procurement fraud, providing this information to the federal government could lead to the recovery of taxpayer funds and put a stop to any ongoing fraud. It could also entitle you to a financial reward. In addition to providing strong protections to procurement fraud whistleblowers, the False Claims Act entitles whistleblowers to financial compensation when the information they provide leads to a successful enforcement action.
Whether you are interested in seeking a financial reward or you are solely focused on ensuring integrity and accountability within the federal procurement process, if you have information about procurement fraud, it will be important to make informed decisions about your next steps. While protections and financial incentives are available, whistleblowers who wish to expose procurement fraud must meet various substantive and procedural requirements, and they must come forward before someone else beats them to it.
“Federal procurement fraud is a pervasive issue, and whistleblowers play a critical role in the government’s fight against fraudulent bidding, contracting, and billing practices. For those who are thinking about serving as procurement fraud whistleblowers, understanding the federal whistleblowing process is critical for making informed decisions about their next steps.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
So, what do you need to know if you are thinking about reporting procurement fraud to the federal government? Here are 10 important insights for whistleblowers in 2025:
1. Suspecting Procurement Fraud and Being Able to Prove Procurement Fraud Are Not the Same
Filing a whistleblower complaint for procurement fraud requires more than just suspicion of wrongdoing. To qualify as a federal whistleblower—and to become eligible for the protections and financial compensation that are available—you must be able to help the federal government prove that a contractor or subcontractor has violated the law, whether through false statements, bid rigging, overbilling, or other fraudulent actions.
As a result, if you just have general concerns about procurement fraud, these concerns—on their own—will generally be insufficient to substantiate a procurement fraud whistleblower complaint. However, if you have inside information about a specific form of procurement fraud, then this is a scenario in which filing a whistleblower complaint may be warranted.
2. You Don’t Need Conclusive Proof to Serve as a Procurement Fraud Whistleblower
To be clear, however, filing a whistleblower complaint does not require conclusive proof of government procurement fraud. Instead, to file a whistleblower complaint under the False Claims Act in federal court, you must be able to make allegations that “have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation.” As a result, you do not need any specific type or volume of evidence to serve as a procurement fraud whistleblower. If you have reason to believe that government contract fraud has been committed (or is in the process of being committed), this is generally all that is required.
With that said, the more evidence you have, the better—and you will want to work closely with an experienced procurement fraud whistleblower lawyer to determine whether you can meet the federal pleading requirements. If you need additional information, your lawyer can advise you regarding the information needed and how to collect it, as discussed in greater detail below.
3. You Must Be the First to Come Forward with Material Non-Public Information
Another requirement for serving as a procurement fraud whistleblower is that you must be privy to non-public information. In most cases, you also need to be the first to share this information with the federal government, though certain exceptions may apply.
With this in mind, while it is important to make an informed decision about whether to file a procurement fraud whistleblower complaint under the False Claims Act, it is also important to act promptly. A lawyer who has experience representing federal whistleblowers should understand that time is of the essence and should be able to assist you with making an informed decision as efficiently as possible.
4. While You Should Protect Any Evidence You Have, You Should Be Cautious About Collecting Additional Evidence
If you have collected or copied any evidence from your employer’s facilities or computer systems, you should protect this evidence to the best of your ability. Keep any hardcopy documents in a secure location and keep any electronic files on a secure storage device (and not in the cloud). This is important for your protection and for helping to ensure that you remain eligible to secure federal whistleblower status.
At the same time, if you are aware of additional evidence that you have not yet collected, you will need to be cautious about collecting this additional evidence. Even when you are taking steps to expose fraud, it is important to avoid violating employment policies or non-disclosure obligations–as doing so could put you at risk. While there are rules on when employers can (and can’t) enforce these types of restrictions to prevent whistleblowing, here too, you need to ensure that you are making informed decisions. An experienced procurement fraud whistleblower lawyer will be able to help.
5. If You Come Forward with Qualifying Information, the Government Will Have a Duty to Investigate Further
A key aspect of the procurement fraud whistleblower process is that the government has a duty to investigate allegations that warrant further inquiry. This is due, in part, to the nature of the qui tam procedures under the False Claims Act. The government isn’t necessarily required to pursue an enforcement action—this decision will be based on the outcome of its investigation—but it is generally required to determine if enforcement action is warranted.
With that said, not all substantiated allegations of government procurement fraud will necessarily warrant a federal investigation. If the amount at issue is small, the U.S. Department of Justice (DOJ) may be justified in deciding not to devote federal resources to a full-blown federal inquiry. A whistleblower lawyer who has significant experience in qui tam cases will be able to assess whether the DOJ is likely to determine that your allegations warrant an investigation.
6. Federal Authorities Will Expect to Be Able to Work With You During Their Procurement Fraud Investigation
If you file a procurement fraud whistleblower complaint and the government decides to open an investigation, you will be expected to work with the government during the investigative process. Whether, and to what extent, you remain involved is up to you–but it is important to understand that federal agents and prosecutors will be expecting you to assist to the extent that you can. Your lawyer can advise you here as well, and can communicate with federal authorities on your behalf if you so desire.
7. Procurement Fraud Whistleblowers Are Entitled to Protection Against Retaliation and May Be Entitled to Financial Rewards
If you qualify as a procurement fraud whistleblower under the False Claims Act, you will be entitled to protection against retaliation in your employment (if you are currently employed by the contractor or subcontractor that you are accusing of fraud). Your employer will be prohibited from taking adverse employment action against you based on your decision to blow the whistle; and, if it retaliates against you illegally, you will be entitled to clear remedies under federal law.
If the information you provide leads to a successful enforcement action, you may also be entitled to a financial reward. Subject to certain stipulations, under the False Claims Act, whistleblowers who help the government recover losses from procurement fraud are entitled to between 10% and 30% of the amount recovered.
8. Hiring an Experienced Whistleblower Lawyer is Important, and You Can Do So at No Out-of-Pocket Cost
While filing a procurement fraud whistleblower complaint is a complex process, you do not have to go through the process on your own. You can—and should—hire an experienced whistleblower lawyer to represent you at no out-of-pocket cost. An experienced lawyer will be able to advise you of your options every step of the way, answer all of your questions, and interface with the federal government on your behalf.
9. There Are Several Reasons to Consider Blowing the Whistle on Procurement Fraud
If you have information about government procurement fraud, there are several reasons to consider coming forward. While the prospect of a financial reward is appealing to many, blowing the whistle is also simply the right thing to do. Contractors that engage in procurement fraud deserve to be held accountable, and helping federal and state governments recover taxpayer funds—while also helping to mitigate the risk of future losses—is beneficial for everyone.
10. It Is Up to You to Decide Whether to Blow the Whistle on Procurement Fraud
Ultimately, however, whether you decide to serve as a procurement fraud whistleblower is up to you. While an experienced whistleblower lawyer will help you make sound decisions, your lawyer should not pressure you into coming forward. It is a big decision to make, and it is one that you need to make based on what you believe is the right thing to do under the circumstances at hand.
As we mentioned above, however, time can be of the essence in this scenario. With this in mind, if you believe that you may have inside information, you should not wait to report fraud to the government. Your first step is to schedule a free and confidential consultation with an experienced procurement fraud whistleblower lawyer—and this is a step that you should take as soon as possible.
Opposition to Renewed COPA Application in Indiana Reveals FTC Leadership’s Views on Hospital Merger Enforcement
The Federal Trade Commission (FTC) recently submitted comments in opposition to a renewed application for a certificate of public advantage (COPA) that would, if granted, allow two hospitals in Indiana to merge despite potential antitrust concerns.
In its submission, the FTC suggested that it had no institutional bias against COPAs but routinely objects because of the price increases, declines in quality, and lower wages that the FTC argues result from most mergers subject to a COPA.
The FTC also said that it takes “failing-firm” defense arguments (i.e., the claim that one of the parties to the transaction will fail unless the merger is permitted) seriously and “never wants to see a valued hospital exit a community.” Furthermore, the FTC stated that it “has not challenged mergers with hospitals that are truly failing financially and cannot remain viable without the proposed acquisition.”
Nevertheless, the FTC noted the potential for cross-market harms as a reason to object to the Indiana hospitals’ COPA application. The FTC identified businesses with employees in counties not directly in the hospitals’ service areas who might be adversely affected by the transaction, the impact on the cost of health care for state employees, and the purported effect on patients insured by Medicare and Medicaid as reasons to object to the proposed application.
Cross-Border Catch-Up: Japan’s Expanded Childcare and Caregiver Leave [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Carlos Colón-Machargo (Atlanta) and Goli Rahimi (Chicago) delve into the upcoming amendments to Japan’s childcare and caregiver leave laws. Goli and Carlos discuss how these changes aim to promote flexible work arrangements and expand leave entitlements, as well as the implications of these expanded entitlements for employers.
Trump’s Pick for Chief Legal Officer May Signal More Changes for DOL
This week President Donald Trump nominated attorney Jonathan Berry to be the next solicitor of the Department of Labor (DOL). Berry worked in the department during the first Trump administration, and he was the sole author of Chapter 18 of Project 2025’s treatise Mandate for Leadership, which contained a set of policy recommendations for the DOL and related agencies (EEOC, NLRB, etc.). With his nomination, we thought it would be helpful to review Berry’s recommended policy changes for the DOL.
What does Chapter 18 say?
Much of Chapter 18 is dedicated to rolling back DEI initiatives, and the current administration has clearly made that a priority during the first three months of 2025. Other changes proposed by Berry include:
Overtime changes – Several proposals are focused on using the DOL to collect more data on the “state of the American family” (Mandate, p. 588) and refocus regulations to have an impact on family lives. Examples include allowing non-exempt workers to elect to receive paid time off instead of overtime, incentivizing on-site childcare, forcing employers to pay overtime rates for employees that have to work on Sunday (or Saturday depending on the particular religion), limiting overtime to employees who work remotely unless they work over 10 hours in a specific day, and removing home offices from OSHA regulations.
Worker independence – As we reported recently, the DOL will likely rescind the Biden administration’s 2024 independent contractor rule and return to the test from the first Trump administration in 2021. Berry’s proposals include that change as well as establishing a “bright-line test” that would determine employee or contractor status across all federal laws, and creating a safe harbor for businesses that provide certain benefits (such as healthcare or retirement programs) to independent contractors.
Protecting small businesses and entrepreneurship – Berry champions the franchise structure as “a proven business model” for small businesses and proposes that the DOL return to a definition of joint employment based on “direct and immediate control” rather than a variety of direct and indirect control factors. Other proposals include a lower salary threshold for exempt status in certain geographic regions, such as the Southeast, and giving employers the flexibility to calculate overtime over a longer period of time (so extra hours worked one week could be offset by lesser hours in a subsequent week without triggering overtime obligations).
Reducing hazard regulations – Berry proposes the relaxation of current regulations limiting teenage workers from certain inherently dangerous jobs so long as the teenager receives training and parental consent.
Prioritizing American workers – Another key focus of Chapter 18 is a series of immigration changes to increase the utilization of American citizens, including limitations on the H-2A visa program, giving employers the freedom to prefer to hire American workers over workers from other countries, and even mandating a minimum percentage of American workers on federal contracts (up to 95% over a 10-year period).
Wait and See
The Trump administration acted with lightning speed during the first three months of 2025 to implement many of the specific DEI recommendations in Chapter 18 of Project 2025’s treatise. Now that Berry has been appointed the chief legal officer for the DOL, it will be interesting to see how many of these other initiatives are implemented in the months and years to come.
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New EEOC Guidance Creates DEI Compliance Considerations for Employers
On March 19, 2025, the U.S. Equal Employment Opportunity Commission (“EEOC”), together with the U.S. Department of Justice (“DOJ”), issued a press release cautioning employers against discrimination arising from diversity, equity and inclusion (“DEI”) programs. More specifically, the EEOC and DOJ warned that such initiatives “may be unlawful if they involve an employer or other covered entity taking an employment action motivated – in whole or in part – by an employee’s or applicant’s race, sex, or another characteristic.” The press release incorporated new guidance from the EEOC regarding DEI-related discrimination in the workplace: (i) a one-page technical assistance document titled “What To Do If You Experience Discrimination Related to DEI at Work” (the “Guidance”); and (ii) a longer set of frequently asked questions titled “What You Should Know About DEI-Related Discrimination at Work” (the “FAQs”). Both documents demonstrate the Trump Administration’s commitment to cracking down on corporate DEI initiatives, and represent a sea change from Biden-era EEOC’s enforcement priorities. This article outlines the Guidance and the FAQs, and suggests compliance measures for employers to consider in light of their content.
The Guidance
The Guidance outlines the EEOC’s perspective on employer DEI programs and ways in which they may run afoul of Title VII of the Civil Rights Act of 1964 (“Title VII”), which protects “employees, potential and actual applicants, interns, and training program participants.” While the Guidance acknowledges that the term “DEI” is undefined, it cautions that DEI initiatives “may be unlawful if they involve an employer or other covered entity taking an employment action motivated – in whole or in part – by an employee’s race, sex, or other protected characteristic.” The Guidance then provides a non-exhaustive list of actions that may constitute “DEI-related discrimination,” including, but not limited to:
Implementing “quotas” or “otherwise ‘balancing’ a workforce by race, sex, or other protected traits;”
Excluding individuals from training, fellowships, mentoring or sponsorship programs on the basis of their protected characteristics;
Selecting candidates for interviews, including placement on candidate slates, based on their protected characteristics;
Limiting membership in workplace groups, such as employee resource groups (“ERGs”) to certain protected groups; and
Separating employees into groups based on protected characteristics when “administering DEI or other trainings, or other privileges of employment, even if the separate groups receive the same programming content or amount of employer resources.”
The Guidance further states that “DEI training” may constitute “a colorable hostile work environment claim,” and advises employers that “[r]easonable opposition to a DEI training” may constitute protected activity giving rise to a retaliation claim so long as “the employee provides a fact-specific basis for his or her belief that the training violates Title VII.”
The FAQs
Like the Guidance, the FAQs are aimed at shedding light on what may constitute “DEI-related discrimination” in the workforce. Initially, the FAQs confirm that Title VII protects all workers, not just those who are “part of a minority group,” and instructs readers on how they may file a charge of discrimination to oppose DEI-related discrimination. The FAQs further clarify that the EEOC will not require a higher showing of proof for so-called “reverse discrimination” claims, or claims that an employer has discriminated against a majority group; indeed, the FAQs go on to state that, in the EEOC’s view, “there is no such thing as ‘reverse’ discrimination, there is only discrimination.”
The FAQs, like the Guidance, fail to define “DEI,” but provide examples of “DEI initiatives, policies, programs or practices” that may be unlawful under Title VII. Such actions include disparate treatment in: (i) hiring, firing, promotion, demotion, compensation, fringe benefits, job duties, and/or work assignments; (ii) access to or exclusion from training, including training characterized as leadership development programs; (iii) access to mentoring, sponsorship, or workplace networking; (iv) internships, including those labeled as “fellowships” or “summer associate” programs; and (v) selection for interviews, including placement or exclusion from a candidate “slate” or pool. According to the FAQs, actions that limit, segregate or classify employees based on their protected characteristics – such as limiting membership in ERGs, business resource groups, or employee affinity groups to certain protected groups – may also violate Title VII. The FAQs state that employers may not legally justify any of the foregoing actions (or other forms of DEI-related discrimination) based on business necessity, “an interest in diversity,” or client, customer, or co-worker preference.
Last, the FAQs address employer DEI training, which the EEOC states may constitute workplace harassment when it is “discriminatory in content, application, or context.” To the extent that such training is discriminatory in “design, content, or execution,” it may give rise to a hostile work environment claim. While the FAQs do not provide concrete examples of DEI training content that may violate Title VII, they state in a footnote that “unconscious bias training” may be problematic. Finally, the FAQs echo the Guidance’s confirmation that opposing unlawful DEI training (or other DEI-related discrimination) may constitute protected activity that gives rise to a claim for retaliation.
What Should Employers Do Now?
The Guidance and FAQs represent a dramatic shift from past EEOC priorities, and create new compliance concerns for employers. While both documents leave many questions unanswered (such as the meaning of “DEI” and precise actions that may violate Title VII), their meaning is clear: the EEOC will no longer tolerate most employer efforts to promote DEI in the workplace. Employers who wish to comply with the EEOC’s new approach should thoroughly examine their current programs, trainings, and employee group policies and make necessary changes to ensure that they do not run afoul of the EEOC’s directives. Such efforts may include, but not be limited to: (i) opening programs, fellowships, mentorship arrangements, and/or networks to all employees or applicants, without regard to their protected characteristics; (ii) eliminating diversity requirements for interview slates or roles; (iii) ensuring that ERGs or similar groups are open to all workers; and/or (iv) ensuring that DEI training does not contain “unconscious bias” principles. We will continue to monitor the EEOC’s enforcement priorities and scrutiny of DEI-related initiatives as they develop.
Safety Perspectives from the Dallas Region: Staying Safe During Texas Wildfire Season [Podcast]
In this episode of our Safety Perspectives From the Dallas Region podcast series, shareholders John Surma (Houston) and Frank Davis (Dallas) discuss the critical topic of workplace safety during wildfire season. With Texas currently facing significant wildfires, Frank and John discuss essential OSHA guidelines, preparedness steps, and emergency action plans to ensure the safety of employees in affected areas.
CSRD and CSDDD Officially Delayed, With Huge Majority of MEPs in Support
On 3 April 2025, the European Parliament voted to postpone the implementation dates for corporate sustainability due diligence and reporting requirements, as the first step in the European Commission’s “Omnibus” simplification package to reduce administrative requirements of companies and aimed to bolster the competitiveness of the European Union. With 531 votes for, 69 against and 17 abstentions, Members of the European Parliament overwhelmingly supported the European Commission proposal.
Key Aspects of the Postponement:
Corporate Sustainability Reporting Directive (“CSRD”):
The application of CSRD has been delayed by two years for certain companies.
“Large companies”, as defined in CSRD, are now required to report on financial year of 2027, to be published in 2028.
Listed small and medium-sized enterprises (SMEs) will commence reporting one year later on their 2028 financial year, to be published in 2029.
The second stage of the Omnibus is proposed to alter these thresholds, to significantly reduce the scope of companies needing to report, which we covered in our alert here.
Corporate Sustainability Due Diligence Directive (“CSDDD”):
Member States now have until 26 July 2027 to transpose the due diligence directive into national law, extending the deadline by one year.
Large EU companies with over 5,000 employees and a net turnover exceeding €1.5 billion, as well as non-EU companies meeting the same turnover threshold within the EU, are required to comply with the rules starting in 2028.
Similarly, EU companies with more than 3,000 employees and a net turnover above €900 million, along with equivalent non-EU companies, will also need to adhere to these regulations from 2028.
To expedite the adoption of these postponement measures, the European Parliament agreed on 1 April 2025 to handle the proposals under its urgent procedure. The draft law now awaits formal approval by the Council of the European Union, which endorsed the same text on 26 March 2025.
Whilst the updates to the reporting standards and exact scope of companies required to report remains under development as part of the second stage of the Omnibus, as we reported on here, there is at least certainty for businesses on a delay.
Court Sides with RICO Complainant Who Received Tainted Medical Marijuana and with FDA on Regulating E-Cigarettes – SCOTUS Today
The Racketeer Influenced and Corrupt Organizations Act (RICO) allows any person “injured in his business or property by reason of” racketeering activity to bring a civil suit for damages. 18 U. S. C. §1964(c). However, the statute forbids suits based on “personal injuries.” But are economic harms resulting from personal injuries “injuries to ‘business or property?’”
Yesterday, in Medical Marijuana, Inc. v. Horn, the U.S. Supreme Court, in a 5–4 opinion written by Justice Barrett and joined by Justices Kagan, Sotomayor, Gorsuch, and Jackson, answered that question in the affirmative. Justices Thomas and Kavanaugh wrote dissenting opinions, the latter joined by the Chief Justice and Justice Alito.
Attempting to alleviate his chronic pain, Douglas Horn purchased and began taking “Dixie X,” advertised as a tetrahydrocannabinol-free (“THC-free”), non-psychoactive cannabidiol tincture produced by Medical Marijuana, Inc. However, when his employer later subjected him to a random drug test, Horn tested positive for THC. When Horn refused to participate in a substance abuse program, he was fired. Horn then brought his RICO suit.
The U.S. Court of Appeals for the Second Circuit, reversing the U.S. District Court for the Western District of New York, held that Horn had been “injured in his business” when he lost his job and rejecting the “antecedent-personal-injury bar,” which several circuits had adopted to exclude business or property losses that derive from a personal injury. Affirming the Second Circuit, the Supreme Court held that the civil RICO statute did not categorically bar that form of recovery.
Interestingly (and the subject of the dissents, particularly that of Justice Thomas, who asserted that cert. had been improvidently granted), the Court did not address issues deemed outside of the question presented, including whether Horn suffered a personal injury when he consumed THC, whether the term “business” encompasses all aspects of “employment,” and what “injured in his . . . property” means for purposes of §1964(c). Thus, the majority opinion encompasses several assumptions, the verification of which will be the subject of the Court’s ultimate remand to the Second Circuit.
The essence of the opinion is derived from the dictionary, and a debate over how its definitions should be read informs the split among the Justices. Justice Barrett’s majority opinion starts with the American Heritage Dictionary and the “ordinary meaning of ‘injure’”: to “cause harm or damage to” or to “hurt.” While the statute precludes recovery for injury to the person, its business or property requirement operates with respect to the kinds of harm for which the plaintiff can recover, not the cause of the harm for which he seeks relief. For example, a gas station owner beaten in a robbery cannot recover for his pain and suffering. But if injuries from the robbery force him to shut his doors, he can recover for the loss of his business. A plaintiff can seek damages for business or property loss, in other words, regardless of whether the loss resulted from a personal injury.
Rejecting Medical Marijuana’s (and the dissenters’) view of what “business or property” should mean under RICO, Justice Barrett, in a delightfully written paragraph, remarks that:
Medical Marijuana tries valiantly to engineer a rule that yields its preferred outcomes. (Civil RICO should permit suit against Tony Soprano, but not against an ordinary tortfeasor.) But its textual hook—the word “injured”—does not give it enough to go on. When all is said and done, Medical Marijuana is left fighting the most natural interpretation of the text—that “injured” means “harmed”—with no plausible alternative in hand. That is a battle it cannot win.
It didn’t.
With respect to the remand, Justice Barrett noted that RICO’s “direct relationship” requirement is a constraint on civil RICO claims and, given the complications in the factual underpinnings of the case, that requirement might prove to be an insurmountable barrier to Horn’s succeeding. Horn himself “concedes that he faces ‘a heavy burden on remand.'”
The second case decided yesterday shows that if the Court is indeed going to be unanimous, it will not be succinct. Justice Alito’s 46-page discourse on behalf of a unanimous Court in Food and Drug Administration v. Wages and White Lion Investments, L.L.C. proves that point. I shall argue that Justice Alito’s lengthy opinion indirectly provides much useful guidance to patients, providers, and payers with respect to likely challenges to administrative actions, especially in the health care space, in the current Trump administration.
The issue in the case concerned whether the FDA lawfully denied respondents authorization to market certain electronic nicotine-delivery system products, known as electronic cigarettes, “e-cigarettes,” or “vapes.” These products come in a variety of flavors that particularly appeal to young people, and they pose unique risks. While the FDA has always had authority to determine whether a manufacturer could market a new drug, the FDA gained particular jurisdiction to regulate tobacco products under the Family Smoking Prevention and Tobacco Control Act of 2009 (TCA). The TCA barred the FDA from banning all regulated tobacco products outright, but it blocked marketing any “new tobacco product” without FDA authorization. The TCA requires the FDA to deny such an application unless an applicant shows that its product “would be appropriate for the protection of the public health.” To determine this, the FDA must consider, among other things, “the risks and benefits to the population as a whole.”
The respondents in the case had petitioned for judicial review of the FDA’s denial orders under the Administrative Procedure Act (APA). The Fifth Circuit, sitting en banc, held that the “FDA had acted arbitrarily and capriciously by applying application standards different from those articulated in its predecisional guidance documents regarding scientific evidence, cross-flavor comparisons, and device type. The court expressed particular concern about the FDA’s failure to review marketing plans it previously deemed critical. It also rejected the FDA’s argument that any errors were harmless.”
Reversing the Fifth Circuit, the Supreme Court first declined to reach the argument that the FDA erred in evaluating the respondents’ applications under standards developed in adjudication rather than standards promulgated in notice-and-comment rulemaking. Instead, the Court concluded that the denial orders were sufficiently consistent with the FDA’s predecisional guidance—as to scientific evidence, comparative efficacy, and device type—and thus did not run afoul of the so-called “change-in-position doctrine,” which provides that “[a]gencies are free to change their existing policies as long as they provide a reasoned explanation for the change,” “display awareness that [they are] changing position,” and consider “serious reliance interests.”
This doctrine asks whether an agency changed existing policy and, if so, whether it displayed awareness of the change and offered good reasons for it. Here, the new policy that led to the rejection of the respondents’ applications was “sufficiently consistent” with the agency’s predecisional guidance regarding scientific evidence. It was also consistent with the TCA’s provision that “well-controlled investigations” or other “valid scientific evidence,” if found “sufficient,” may support a finding that a new tobacco product is “appropriate for the public health.”
However, there was still a “harmless error” issue for the Court to decide. And that related to the Fifth Circuit’s rejection of the FDA’s claim of harmless error regarding the agency’s change of position on marketing plans. The FDA did not dispute that despite assuring manufacturers that marketing plans would be “critical” to their applications, it ultimately did not consider the respondents’ marketing plans. The FDA argued that this was harmless because it had issued denials to manufacturers other than the respondents that were based upon marketing plans indistinguishable from those of the respondents. While the Fifth Circuit applied an incorrect standard of review under governing precedents, doing it correctly “presents a difficult problem, requiring reconciliation of the so-called remand rule developed in SEC v. Chenery Corp., 318 U. S. 80, 88, 93–95, with the APA’s instruction that reviewing courts must take ‘due account’ of ‘the rule of prejudicial error’ that ‘ordinarily appl[ies] in civil cases,’ Shinseki v. Sanders, 556 U. S. 396, 406 (quoting 5 U. S. C. §706).”
The Court continues, “The most natural interpretation of the APA’s language is that reviewing courts should adapt the ‘rule of prejudicial error’ applicable in ordinary civil litigation (also known as the harmless-error rule) to the administrative-law context, which, of course, includes the remand rule.” However, the Court has acknowledged that a remand may be unwarranted in certain cases when an agency’s decision “is supported by a plethora of factual findings, only one of which is unsound, because a remand would be pointless.” Given the fact that both the FDA and the Fifth Circuit might have been in error with respect to the harmless error question, and that the FDA has not asked the Court to decide the harmless error question at this point in the case, the Supreme Court vacated the Fifth Circuit’s holding and remanded the case to it so that the Circuit Court “can decide the question afresh” under the correct reading of the caselaw requirements described by the Supreme Court.”
One recognizes the importance of the FDA’s consideration of marketing a tobacco product directed at young people. But perhaps more importantly, I suggest that the Court’s decision offers grounds for useful observations about the many changes in regulatory position and various rulemaking determinations (or lack thereof) being made by various administrative agencies during the current administration. Many of these events are occurring in the food and drug and health care coverage and reimbursement spaces. The length and depth of this unanimous opinion with respect to the FDA’s responsibilities when it has changed position or otherwise might be challenged under the APA for having acted arbitrarily or capriciously suggests the intensity and precision of what federal courts will require in administrative law challenges. In this decision, the agency largely prevailed, though the facts of the case occurred during the previous administration. The court challenges in the current administration are just beginning to take shape as the regulatory environment is radically changing.
Even during the Supreme Court’s current term, at the beginning of a new presidential term, we shall see—and many of my readers will bring—regulatory challenges that will be guided by what the Court held yesterday.
Supreme Court Rules Lost Wages May Be Recoverable Under RICO For False Advertising After Drug Test Dismissal
On April 2, 2025, the Supreme Court of the United States ruled that a truck driver who lost his job after testing positive for marijuana may pursue claims for lost wages under the Racketeer Influenced and Corrupt Organizations Act (RICO) against the sellers of an allegedly fraudulently marketed pain relief product.
Quick Hits
The Supreme Court allowed a truck driver to pursue civil RICO claims for lost wages after he failed an employer drug test after ingesting an allegedly falsely marketed pain relief product.
The Court ruled that a plaintiff may pursue treble damages under RICO for lost business or property that followed a personal injury.
The decision raises questions about the scope of RICO, particularly whether lost wages and economic harms related to personal injuries can be considered recoverable.
The 5–4 ruling in Medical Marijuana, Inc. v. Horn held that a plaintiff may seek treble damages under RICO, a law initially designed to combat organized crime, for lost business or property, even if the damages resulted from an antecedent personal injury.
The ruling allowed a truck driver to pursue civil RICO claims seeking recovery for lost wages against the sellers of a pain relief product after he was discharged for failing a random drug test when he tested positive result for tetrahydrocannabinol (THC), the psychoactive component of marijuana or cannabis. He alleged the sellers falsely marketed their pain relief product as not containing THC, only the non-psychoactive chemical cannabidiol, more commonly known as CBD.
The product sellers argued that the damages resulted from a personal injury and that RICO’s “business or property” injury limitation precludes recovery for economic harms stemming from personal injuries. Specifically, RICO allows an individual to bring civil claims for damages to “business or property by reason of” racketeering and other activities prohibited by the act and recover treble damages.
“The phrase ‘injured in his business or property’ does not preclude recovery for all economic harms that result from personal injuries,” Justice Amy Coney Barrett wrote in the Court’s opinion, which was joined by four other justices. “We therefore affirm the Second Circuit’s judgment and remand the case for further proceedings consistent with this opinion.”
Notably, the Supreme Court expressly did not address whether the truck driver had suffered a personal injury when he consumed THC or whether the term “business” encompasses all aspects of “employment.” The Court also did not provide further explanation on what types of injuries to “property” are covered by RICO.
The Second Circuit had found that the truck driver was “‘injured in his business’” when he lost his job and that there is no bar to recovery under RICO if the economic harm is preceded by or a result of a personal injury.
The CBD product sellers argued that the Second Circuit’s approach would effectively destroy RICO’s “business or property” limitation and transform traditional personal injury suits into federal suits under RICO, which allows for recovery of treble damages.
However, the Supreme Court majority rejected the sellers’ arguments. In the Court’s opinion by Justice Barrett, the Court clarified the plain interpretation of the RICO text, stating that “‘injured’ means ‘harmed’ − with no plausible alternative in hand.” (Justice Ketanji Brown Jackson wrote a short concurring opinion to note that Congress has instructed that RICO be “liberally construed.”)
The Court further explained that while “civil RICO has undeniably evolved,” RICO claims are still limited in that they require a direct relationship between the injury and the alleged injurious conduct, and a “plaintiff must first establish a pattern of racketeering activity.” The Court also noted that the terms “business” and “property” in RICO still limit the types of claims that are recoverable.
“As we noted at the outset, ‘business’ may not encompass every aspect of employment, and ‘property’ may not include every penny in the plaintiff ’s pocketbook,” the Court said. “Accordingly, not every monetary harm—be it lost wages, medical expenses, or otherwise—necessarily implicates RICO.”
“If the breadth of the statute ‘leads to the undue proliferation of RICO suits, the ‘correction must lie with Congress,’” the Court added.
In a dissenting opinion joined by Chief Justice John Roberts and Justice Samuel Alito, Justice Brett Kavanaugh argued that RICO categorically excludes personal injury claims, stating that “the fundamental question here is whether business or property losses from a personal injury transform a traditional personal-injury suit into a business-injury or property-injury suit that can be brought in federal court for treble damages under RICO.”
Justice Kavanaugh further argued that the majority’s opinion “leaves substantial confusion in its wake” because it did not explain “whether lost wages and medical expenses are recoverable losses of business or property in those RICO suits.”
Justice Clarence Thomas dissented, arguing that the case was “improvidently granted” because the parties dispute whether the truck driver even “suffered a personal injury in the first place” and that there has been inadequate briefing on the meaning of the “business or property” injury requirement in RICO.
Next Steps
The Supreme Court’s ruling expands the reach of RICO’s civil component by finding that personal injury claims that have damages to “business or property” are not necessarily excluded. The CBD sellers in the case and business groups have argued that such an approach could increase federal RICO liability for businesses for product liability claims. However, the Court noted that it is up to Congress to limit the claims, if necessary.
Further, while the ruling comes in the context of an employee suing for lost wages after losing his job, the ruling leaves open questions over the extent to which lost wages or other adverse employment actions that lead to lost wages or economic losses for employees may implicate RICO. The Second Circuit had interpreted injury in “business” under RICO as encompassing “employment.” Still, the Supreme Court expressly did not decide that issue, noting the Second Circuit’s “interpretation may or may not be right.”
Whether the truck driver’s RICO suit will ultimately be successful after remand level is highly questionable. However, the concerns raised in the dissent remain—the inclusion of economic harms that stem from personal injuries as recoverable under RICO is likely to lead some crafty attorneys to attempt to further expand the applicability of the civil RICO statute.
Wyoming Bans Most Non-Compete Agreements
Wyoming just banned most non-compete agreements (Wyo. Stat. § 1-23-108): starting July 1, 2025, most agreements that restrict workers from working in competitive jobs will be void, absent some exceptions for:
High-Level Employees: Non-compete agreements with “executive and management personnel” and “officers and employees who constitute professional staff to executive and management personnel” will still be enforceable. However, the statute does not define these terms, so employers should review those roles carefully.
Sale-of-Business: Sellers and buyers can agree to non-competes when selling or transferring a business.
Trade Secrets: Employers can protect trade secrets through narrowly tailored non-compete agreements that comply with the state’s definition of trade secrets, i.e. “the whole or a portion or phase of a formula, pattern, device, combination of devices or compilation of information which is for use, or is used in the operation of a business and which provides the business an advantage or an opportunity to obtain an advantage over those who do not know or use it.” Wyo. Stat. § 6-3-501(a)(xi).
Recovery of Relocation, Education, and Training Expenses: Employers can contract with employees to recoup training, education, and/or relocation expenses if an employee leaves within 4 years, with varying repayment percentages based on tenure:
Up to 100% if employment lasted less than two yearsUp to 66% if employment was between two and three years
Up to 33% if employment was between three and four years
Special Rules for Physicians
Non-compete agreements for physicians that restrict practice are prohibited. Further, doctors may notify patients with rare disorders about their new practice location and contact information. Notably, the statute clarifies that an agreement that contains an enforceable non-compete against a physician that is otherwise permitted by law will remain enforceable.
Looking Ahead
The statute applies only prospectively to contracts signed on or after July 1, 2025. Wyoming employers and business should consult legal counsel to update or implement restrictive covenant agreements in a timely manner.
USCIS Announces Initial FY 2026 H-1B Cap Selection: What Employers Need to Do Next
Takeaways
The initial drawing includes registrants under both the 65,000 regular cap and the 20,000 master’s cap.
Employers and attorneys have been notified of selection results through their myUSCIS accounts.
H-1B petitions must be filed between 04.01.25 and 06.30.25 to use the cap selection.
USCIS announced on Mar. 31, 2025, that it has completed the initial selection process for H-1B visa cap-subject petitions for fiscal year 2026. The statutory cap is 65,000 H-1B visas (regular cap), with an additional 20,000 visas for foreign professionals with an advanced degree from a U.S. academic institution (master’s cap).
What This Means for Employers
Registrations marked “Selected” in the myUSCIS account may move forward to H-1B petition filing.
Only the petitioning employer may file an H-1B petition on behalf of a selected registrant. The filing window is open from April 1, 2025, through June 30, 2025, for H-1B employment beginning Oct. 1, 2025, the start of the government’s new fiscal year.
USCIS typically prioritizes adjudication of cap-subject H-1B petitions during the summer, so early and complete filing is strongly encouraged to ensure timely processing.
Next Steps
Only the employer or authorized attorney of record can view selection results by checking their myUSCIS account.
Work with a Jackson Lewis attorney to prepare and file H-1B petitions for selected individuals.
Assess the organization’s foreign national workforce:
For selected individuals in the United States, ensure foreign nationals take proper steps to “bridge the gap,” where needed, to maintain continuity of work authorization until H-1B status begins.
See our blog on updates to cap-gap for F-1 students.
For selected individuals outside the United States, review the Department of State’s Visa Appointment Wait Times and procedures to make sure the individual begins planning for their visa stamping appointment.
For non-selected individuals, explore alternative options, including:
O-1 visas for those with extraordinary ability
L-1 intracompany transfers
STEM OPT or F-1 cap-gap extensions
J-1 visas for scholars and specialists
Concurrent H-1B employment with a cap-exempt institution
Looking Ahead
Lottery selection is just the first step. Completed H-1B petitions must be filed for USCIS review and adjudication. As in previous years, all H-1B Cap Registrations remain in consideration until the H-1B annual statutory cap is reached. If USCIS does not receive enough H-1B petitions to fulfill their annual cap, it may conduct a second selection round, likely in August.