Trump Nominee to Take Reins at OSHA Proposes Strategies for Efficiency and Resource Management
Senate confirmation of David Keeling, President Donald Trump’s nominee to serve as the assistant secretary of labor for occupational safety and health, began on June 6, 2025. The testimony, given during the first week of his nomination process, focused on his qualifications, professional background, and vision for the role to which he was nominated.
He began by outlining his educational credentials and relevant work experience, emphasizing his expertise in his field and his commitment to public service. Keeling addressed key issues pertinent to the position, such as ethical standards, transparency, and the importance of upholding the law or regulations associated with the office.
Quick Hits
Senate confirmation hearings for David Keeling, President Trump’s nominee for assistant secretary of labor for occupational safety and health, began on June 6, 2025, focusing on his qualifications and vision for the role.
Keeling emphasized ethical standards, transparency, and regulatory compliance during his U.S. Senate testimony, proposing strategies to enhance efficiency and stakeholder engagement.
Keeling highlighted the potential of leveraging technology to streamline Occupational Safety and Health Administration (OSHA) operations, improve data management, and enhance service delivery amidst plans to downsize the agency.
Keeling responded to questions from senators regarding his past decisions, his approach to problem-solving, and how he would handle potential conflicts of interest. Keeling assured the committee of his impartiality and dedication to fairness. He also discussed specific policy areas or challenges relevant to the position, offering thoughtful insights and potential strategies for improvement.
Keeling addressed several policy areas and challenges relevant to the position for which he was nominated. These included:
Ethical standards and transparency: Keeling highlighted the ongoing challenge of maintaining high ethical standards within the office. He acknowledged the importance of transparency in decision-making processes and the need to build public trust.
Regulatory compliance: He discussed the complexities of ensuring compliance with existing laws and regulations, particularly in areas where regulations are evolving or subject to interpretation.
Resource allocation and efficiency: Keeling identified the challenge of managing limited resources while striving to maximize efficiency and effectiveness in the office’s operations.
Stakeholder engagement: He recognized the importance of engaging with a diverse range of stakeholders, including the public, industry representatives, and other government agencies, to ensure that policies are well-informed and balanced.
To address these challenges, Keeling proposed several strategies:
Strengthening internal oversight: He suggested implementing more robust internal review processes to ensure ethical standards are upheld and to identify potential conflicts of interest early.
Enhancing training and guidance: Keeling advocated for ongoing training for staff on regulatory requirements and ethical conduct, ensuring that everyone in the office is well-equipped to navigate complex situations.
Improving communication and transparency: He proposed regular public updates and open forums to keep stakeholders informed about the office’s activities and decisions, thereby fostering greater transparency.
Collaborative policy development: He emphasized the value of working collaboratively with the U.S. Congress, other agencies, and external experts to develop policies that are both effective and adaptable to changing circumstances.
Leveraging technology: Keeling mentioned the potential for using new technologies to streamline operations, improve data management, and enhance service delivery.
On this last point, Keeling suggested several ways in which technology could be harnessed to enhance the office’s operations and service delivery:
Streamlining internal processes: Keeling emphasized the adoption of digital tools and automated systems to reduce manual workloads, minimize errors, and accelerate routine administrative tasks. This would allow staff to focus more on complex and value-added activities.
Improving data management: He highlighted the importance of implementing advanced data management systems. These systems would facilitate better collection, storage, and analysis of information, enabling more informed decision-making and efficient tracking of cases or projects.
Enhancing communication: Keeling proposed using technology to improve both internal and external communication. This could include secure messaging platforms for staff collaboration and digital portals for stakeholders to access information, submit inquiries, or provide feedback.
Expanding access to services: By developing online service platforms, the office could make its services more accessible to the public and stakeholders, reducing the need for in-person visits and streamlining application or reporting processes.
Ensuring security and compliance: Keeling also recognized the need for robust cybersecurity measures to protect sensitive data and ensure compliance with privacy regulations as more operations move online.
Through these technological enhancements, Keeling said his aim is to increase efficiency, transparency, and accessibility, ultimately improving the quality and reliability of the office’s services.
Given Keeling’s testimony and the recent testimony of Secretary of Labor Lori Chavez-DeRemer, it is apparent the administration plans to downsize the agency but make up for a reduction in headcount with technology and smarter, more streamlined processes. Some of these efforts are already being seen, such as a recent change in the way area directors are drafting informal settlement agreements with employers that have received citations and the willingness to offer a greater discount off penalty payments if employers pay penalties through Pay.Gov, as opposed to mailing or otherwise submitting the payment for those penalties.
2024 EEO-1 Final Countdown: Key Reporting Tips [Podcast]
In this podcast, Jay Patton (shareholder, Birmingham) and Kiosha Dickey (counsel, Columbia) provide an update on significant changes to EEO-1 filing obligations. Kiosha and Jay discuss the shorter EEO-1 filing window, which opened on May 20, 2025, and which will close on June 24, 2025. They also discuss the removal of the non-binary reporting option in alignment with Executive Order 14168 and discuss its implications for employers. Kiosha and Jay offer practical tips for reporting remote employees, emphasizing the importance of correctly assigning fully remote staff based on their supervisor’s location. They also cover the critical steps for reporting mergers, acquisitions, and spinoffs, highlighting the need for early preparation and accurate data collection.
OIG Green Lights MSO Model Arrangement for Telehealth Platforms in New Advisory Opinion
On June 11, 2025, the Department of Health and Human Services Office of Inspector General (OIG) published Advisory Opinion 25-03 (the Advisory Opinion), in which OIG approved of a proposed arrangement under which a management support organization and a physician-owned professional corporation (the Requestors) would enter into an arrangement involving the leasing of clinical employees and provision of certain administrative services related to payor contracting to support the delivery of telehealth services through online platforms. OIG determined that the proposal was protected by a safe harbor under the federal anti-kickback statute (AKS), and therefore the fees payable between the parties thereunder did not constitute prohibited remuneration under the AKS.
Background
Parties Involved
The Requestors include a management support organization that provides non-clinical support services (Requestor MSO), and a physician-owned professional corporation that maintains provider network participation contracts with commercial, Medicare Advantage, and Medicaid plans (Requestor PC) but does not otherwise employ or engage with clinical staff.
Proposed Telehealth Services Platform Arrangement
Under the proposal (Proposed Arrangement), the Requestors would contract with third-party online telehealth platforms – comprised of management services organizations that furnish management services to telehealth providers (Platform MSOs) and telehealth provider entities (Platform PCs) to lease clinicians from the Platform PCs and obtain certain administrative services from the Platform MSOs. According to the Advisory Opinion, the Proposed Arrangement is intended to expand access to in-network services for patients of the Platform PCs, many of whom are “negatively impacted by limited access to insurance-covered telehealth services furnished by Platform PCs” especially in underserved and rural areas. The Requestor PC would credential the clinicians leased from the Platform PCs, and such leased clinicians would furnish services to their patients under Requestor PC’s contracted plans. In conjunction with this clinical arrangement, the Platform MSOs would provide ancillary administrative services to Requestor PC, including accounting (which OIG characterizes as including the collection of patient cost-sharing amounts for services rendered), marketing, administrative support (e.g., support for scheduling of clinical visits), and IT services (e.g., provision of a HIPAA-compliant online platform for receipt of synchronous telehealth services). Requestor PC would pay hourly fees for the leased clinicians and an administrative fee for the non-clinical administrative services, which would be consistent with fair market value for the services rendered as determined by a third-party valuation consultant.
As part of their request for the Advisory Opinion, Requestor MSO and Requestor PC certified that the Proposed Arrangement would meet all conditions of the AKS safe harbor for personal services and management contracts and outcomes-based payment arrangements, including by noting that the methodology for determining the fees would be set in advance and not take into account volume/value of any referrals or other business generated between the parties. Additionally, the fees would be payable regardless of whether Requestor PC was reimbursed by a payor for the visit.
OIG Analysis
Federal Anti-Kickback Statute
The OIG explained that because the Requestor PC offers and pays remuneration to the Platform PC and/or Platform MSO for services rendered, the AKS is implicated whenever the Platform PC refers a patient to Requestor PC. The OIG therefore evaluated whether the Proposed Arrangement could violate the AKS, which prohibits offering, paying, accepting, or soliciting remuneration in exchange for referrals of items or services paid for by federal programs, or in exchange for the purchasing, leasing, ordering of, or arranging for the order of any good, facility, service, or item reimbursed under a federal health care program. Remuneration under the AKS can include anything of value, and violators of the AKS are subject to criminal and civil sanctions, including imprisonment, fines, civil monetary penalties, and exclusion from federal health care programs.
AKS Safe Harbor Requirements and Further Structural Safeguards
The broad scope of the AKS is subject to certain statutory and regulatory safe harbors, which establish protections from scrutiny thereunder for arrangements that meet all required criteria of a safe harbor. As OIG notes, safe harbor compliance “is voluntary” and “arrangements that do not comply with a safe harbor are evaluated on a case-by-case basis.”
In this Advisory Opinion, OIG affirmed that the Proposed Arrangement satisfies the requirements of the “personal services and management contracts and outcomes-based payment arrangements” safe harbor codified at 42 C.F.R. § 1001.952(d), after reviewing the key elements of the Proposed Arrangement and the criteria necessary to comply with such safe harbor.
OIG described the following structural safeguards of the Proposed Arrangement that are compliant with the safe harbor:
The Proposed Arrangement will be memorialized in a written agreement signed by the parties, will have a term of at least one year, and the agreement will clearly describe the duties of, and services provided by all parties involved;
The payments—both for the services of the leased clinicians from each Platform PC, and for the administrative services provided by Platform MSO—are fixed in advance and in line with fair market value, not determined based on volume or value of any referrals or other business generated between the parties, and are payable regardless of whether the Requestor PC is reimbursed by payors for services rendered; and
The Proposed Arrangement would be commercially reasonable even if no referrals resulted from the Proposed Arrangement, the services contracted for are reasonably necessary to accomplish the purpose of the Proposed Arrangement, and the parties are not involved in counseling or promoting any business activity that would violate federal or state law.
The OIG cautioned that this Advisory Opinion is limited to the Proposed Arrangement only, and does not cover additional arrangements or referrals outside of the Proposed Arrangement that may exist between the Platform PC, Platform MSO, Requestor PC and Requestor MSO. The OIG further cautioned that the Advisory Opinion is binding only on the Department of Health and Human Services and not on other government agencies (e.g., the Department of Justice).
Takeaways
The Advisory Opinion is notable for the complexity of the Proposed Arrangement and potentially broad scope of its impact given the reported scope of Platform PC’s payor contracting activities (exceeding 400 payor contracts that cover 80% of all commercially covered lives and 65% of Medicare Advantage covered lives). The Advisory Opinion also acknowledges the role played by management services and support organizations in connection with care delivery, and particularly telehealth services delivered in connection with the Proposed Arrangement. The Advisory Opinion’s conclusion is also noteworthy because OIG did not determine that the arrangement could result in prohibited remuneration, but OIG would exercise discretion not to pursue it due to safeguards present, as OIG often concludes in Advisory Opinions under the AKS. OIG instead went further and determined that there was no prohibited remuneration because it met the safe harbor. It accordingly may provide a potential model for other management services and care delivery organizations to consider for arrangements. We will continue to monitor any guidance or additional advisory opinions that OIG issues on these topics.
This article was co-authored by Ivy Miller
Loss of NIOSH Team May Jeopardize OSHA’s Effort to Create Heat Injury and Illness Prevention Standard
The hearing on the Occupational Safety and Health Administration’s (OSHA) proposed Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings Standard began on June 16, 2025. The hearing is the third step in what OSHA describes as a seven-step rulemaking process. It takes place against the backdrop of a major change within the National Institute for Occupational Safety and Health (NIOSH).
Quick Hits
NIOSH layoffs, including the entire team of heat experts, are expected to impact OSHA’s rulemaking process.
Without NIOSH’s heat experts, OSHA may struggle to defend the proposed heat safety standard against industry challenges.
The OSHA hearing on the proposed rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings began on June 16, 2025.
This spring, roughly two-thirds of NIOSH staff were laid off, including the entire team of heat experts. The loss of this team is expected to change the dynamics normally present during the rulemaking process. It will also impact enforcement of the heat national emphasis program (NEP) and the rule, depending on how long the layoffs last.
NIOSH, as the federal agency responsible for developing and establishing safety standard recommendations, has historically provided the scientific research, technical expertise, and data that underpin OSHA’s regulatory efforts. Their research related to heat injury and illness has been foundational, with OSHA citing NIOSH’s work more than 250 times in the draft heat rule, including on definitions, physiological impacts, and effective interventions. The NIOSH team of heat experts also provides expert testimony to support OSHA during litigation of General Duty Clause citations related to heat injury and illness under the NEP.
Without NIOSH’s heat experts, OSHA loses a critical, neutral resource for evaluating scientific evidence, responding to public comments, and defending the necessity and feasibility of the proposed standard. NIOSH experts have played a key role in clarifying information from industry and labor groups. It has also helped OSHA justify its rules as effective, practical, and appropriate. Its absence means OSHA may struggle to provide the robust, evidence-based justifications required by law, especially if the rule is challenged in court.
The layoffs have also halted NIOSH’s public communications on heat safety, including social media campaigns and employer presentations that previously raised awareness and educated stakeholders about heat hazards. This reduction in outreach could lead to less compliance and awareness among employers and workers, further hampering OSHA’s enforcement efforts. The reductions at NIOSH are not expected to render OSHA completely impotent as relates to employers that fail to engage in basic measures to protect employees from the dangers of heat.
As OSHA moves forward with public hearings on the proposed heat rule, the lack of NIOSH expert testimony removes a vital source of scientific input. This gap could make it more difficult for OSHA to counter industry arguments against the rule and to demonstrate that the proposed measures are based on the best available evidence.
The absence of NIOSH’s heat experts makes the proposed standard, already expected to face significant opposition from industry groups, more vulnerable to legal and political challenges. The administration may further weaken the proposed rule without NIOSH being able to counter the lack of effectiveness of proposed modifications to the rule. Without NIOSH’s authoritative support, OSHA’s ability to defend the rule’s scientific basis and necessity is diminished.
The termination of NIOSH’s team of heat experts has weakened OSHA’s capacity to enforce existing heat safety measures and to finalize and defend the proposed national heat standard. The loss of scientific expertise, diminished public outreach, and lack of neutral testimony arguably combine to make the rulemaking process more difficult and the proposed standard more susceptible to being delayed, diluted, or abandoned.
New York Releases FAQS and Guidance on the New York State Fashion Workers Act
In advance of June 19, 2025, the effective date of the New York State Fashion Workers Act, the New York State Department of Labor (NYSDOL) recently issued frequently asked questions (FAQs) and guidance that provide clarity and otherwise reiterate the legal obligations that model management companies, their clients, and hiring parties have under the law.
Quick Hits
The New York State Department of Labor recently published FAQs and guidance to help employers comply with the New York State Fashion Workers Act.
The FAQs and guidance provide clarity and otherwise reiterate the legal obligations that model management companies, their clients, and hiring parties have under the law.
The law will take effect on June 19, 2025.
As we previously reported, the New York State Fashion Workers Act regulates model management companies and their clients, including retail stores, fashion designers, advertising agencies, photographers, and publishing companies, and provides enhanced protections for fashion models. The FAQs and guidance provide clarification on several areas of the law, which we highlight below.
Deadline for Model Management Companies to Register Their Business
While the law states that model management companies must register their businesses with the NYSDOL within one year of the effective date of the law (i.e., June 19, 2026), the guidance provides that model management companies that conduct business, represent models, or are based in New York State must register starting December 21, 2025.
Social Media and Influencer Agencies; Influencers and Content Creators
Given the continued popularity and prevalence of social media and influencers, the FAQs address whether social media and influencer agencies could be considered model management companies. The law defines “model management company” as “any person or entity, other than a person or entity licensed as an employment agency under article eleven of the general business law” that:
is in the business of managing models participating in entertainment, exhibitions, or performances;
procures or attempts to procure, for a fee, employment or engagements for persons seeking employment or engagements as models; or
renders vocational guidance or counseling services to models for a fee.
While the FAQs provide some examples of when an agency could be considered a model management company, for example, “if a social media agency represents a brand and hires or connects the brand with a model or influencer to promote that brand’s product on social media,” the application of the law to these agencies will be fact-specific.
Similarly, whether a social media influencer or content creator is a “model” or a person who performs “modeling services” requires a fact-specific analysis. The FAQs provide that a “model” is a person, either an employee or independent contractor, “who performs modeling services as part of their trade, occupation, or profession.”
“Modeling services” include “performing in photoshoots or in a runway, live, filmed, or taped appearance, including on social media.” Performing modeling services “requires a model to pose, provide an example or standard or artistic expression, or represent something or someplace for purposes of display or advertisement.”
Discrimination, Harassment and Retaliation Complaints and Policy Requirements
While models can lodge complaints against model management companies, their clients, and hiring parties regarding discrimination, harassment, retaliation, or abuse with the NYSDOL, the FAQs remind individuals that they also can file a complaint with the New York State Division of Human Rights or call the statewide sexual harassment hotline to receive free legal counsel about workplace harassment at 1-800-HARASS-3.
The guidance also provides that model management companies, clients, and hiring parties must establish a company policy that addresses abuse, harassment, and any other inappropriate behavior toward models, and the policy must be shared in writing or electronically with all models. Further, the FAQs refer to the existing requirements that every employer in New York State must adopt a sexual harassment prevention policy.
Power of Attorney Agreements
The FAQs clarify that “[a]ny pre-existing power of attorney agreements related to modeling services” that are mandatory or otherwise do not meet the requirements under the law will be deemed “void as a matter of public policy” as of June 19, 2025.
Next Steps
With the effective date approaching, model management companies, their clients, and hiring parties based in or conducting business in New York State may wish to assess whether they are covered under the law, and if so, evaluate the potential impact on their businesses and familiarize themselves with the law’s requirements. This includes registration requirements for model management companies, policy requirements, pay practices, and compliance with contract requirements.
Leah J. Shepherd contributed to this article
Workplace Strategies Watercooler 2025: A Ransomware Incident Response Simulation, Part 1 [Podcast]
In part one of our Cybersecurity installment of our Workplace Strategies Watercooler 2025 podcast series, Ben Perry (shareholder, Nashville) and Justin Tarka (partner, London) discuss key factors employers should consider when facing ransomware incidents. The speakers begin by simulating an incident response and outlining the necessary steps to take after a security breach occurs. Justin and Ben, who is co-chair of the firm’s Cybersecurity and Privacy Practice Group, discuss best practices when investigating a ransomware incident, assessing the impact of the incident, containing the situation, communicating with stakeholders, fulfilling notification requirements, and adhering to reporting obligations. The speakers also address considerations when responding to ransom requests, including performing a cost-benefit analysis regarding payment, reviewing insurance coverage, identifying potential litigation risks, fulfilling ongoing notification obligations, addressing privacy concerns, and more.
Supreme Court Rules DOGE Can Access Social Security Data and Avoid FOIA—for Now
On June 6, 2025, the Supreme Court of the United States released two decisions on its emergency docket with serious implications for federal agencies, companies that do business with the government, and the data of millions of Americans.
First, in Social Security Administration v. American Federation of State, County, and Municipal Employees, the Court struck down an en banc Fourth Circuit Court of Appeals ruling that had enjoined the Social Security Administration (SSA) from granting Department of Government Efficiency (DOGE) personnel access to certain personally identifiable information unless they met certain security criteria while the underlying dispute played out.
Second, in U.S. DOGE Service v. Citizens for Responsibility and Ethics in Washington, the Court exempted DOGE from responding to a nonprofit’s Freedom of Information Act (FOIA) request for information regarding its recommendations to the president, as well as whether those recommendations were followed.
Quick Hits
The Privacy Act of 1974 and FOIA govern how, when, and why public records may be collected, stored, and disclosed.
Over objections from the Supreme Court’s three liberal justices, the Court granted DOGE unlimited access to Social Security Administration data. In a separate case, the Court also cautioned against overly broad discovery of internal executive branch communications.
This combination of decisions illustrates the careful balance federal agencies and their private-sector partners must strike when handling public records that potentially contain personally identifiable information.
On January 20, 2025, President Donald Trump signed an executive order requiring agency heads to establish DOGE teams and share “full and prompt access to all unclassified agency records, software systems, and IT systems” with those teams to “maximize governmental efficiency and productivity.” A flurry of lawsuits regarding DOGE teams’ access to agency records ensued. In both orders handed down last week, the government sought stays of lower court orders that either prohibited or compelled the disclosure of certain records.
Social Security Administration v. American Federation of State, County, and Municipal Employees
In February 2025, two labor unions and a nonprofit organization sued SSA, alleging that opening SSA’s data systems to DOGE would violate the Privacy Act and the Administrative Procedure Act. To protect against privacy risks that the government’s handling of Americans’ information creates, the Privacy Act of 1974 prohibits agencies from disclosing any record which is contained in a system of records to any person, or to another agency, unless certain criteria are met. Agencies often require contractors to comply with the Privacy Act.
On April 17, 2025, the U.S. District Court for the District of Maryland preliminarily enjoined SSA from granting DOGE access to its records, in part because members of the unions and the nonprofit would suffer irreparable injury from the disclosure of their personal information—including Social Security numbers, dates of birth, addresses, bank account numbers, medical records, and more—to DOGE staffers. The en banc Fourth Circuit rejected DOGE’s request to stay the preliminary injunction. The government’s principal argument was that they were likely to succeed on the merits under the Privacy Act’s exception, which permits disclosure “to those officers and employees of the agency … who have a need for the record in the performance of their duties.”
In an unsigned, two-page order on its emergency docket, the Supreme Court stayed the injunction, granting DOGE access to the SSA data during the pendency of the case. When considering whether to grant a stay, the Court looks to four factors: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.” The Court wrote only: “We conclude that, under the present circumstances, SSA may proceed to afford members of the SSA DOGE Team access to the agency records in question in order for those members to do their work.”
Justice Ketanji Brown Jackson dissented from the grant of the application for stay, which Justice Sonia Sotomayor joined. The dissent criticized the Court for “allow[ing] the [SSA] to hand DOGE staffers the highly sensitive data of millions of Americans,” specifically, because the data contained “personal, non-anonymized information” that DOGE would handle “before the courts have time to assess whether DOGE’s access is lawful.” According to Justice Jackson, the mere inability of the government to wait for litigation to unfold before accessing the data is insufficient to show irreparable injury. She emphasized that record evidence showed “DOGE received far broader data access than the SSA customarily affords for fraud, waste, and abuse reviews,” and stressed that the district court’s injunction, which allowed DOGE staffers to have access to redacted or anonymized records, so long as DOGE staffers met training, background check, and other requirements, was “minimally burdensome” for the government.
U.S. DOGE Service v. Citizens for Responsibility and Ethics in Washington
Meanwhile, shortly after DOGE was created, the nonprofit watchdog organization Citizens for Responsibility and Ethics in Washington (CREW) submitted a FOIA request seeking information about DOGE’s structure and operations. Among other things, CREW sought the details of intra-executive branch DOGE recommendations to the president. FOIA is a federal law that gives the public the right to request access to records from any federal agency, including records from contractors or grant recipients that are maintained by an agency.
When DOGE refused to fulfill the request, CREW filed suit in the U.S. District Court for the District of Columbia seeking to compel the disclosures and to expedite discovery to determine whether DOGE was a federal “agency” that must comply with FOIA. The district court ordered DOGE to provide most of the requested information. The D.C. Circuit Court denied the government’s request for a stay of the disclosures, characterizing the discovery requests as “modest.” In response, the government filed an emergency application with the Supreme Court seeking to stay the discovery orders pending review.
The Supreme Court granted the government’s request to stay the portions of the discovery order that would have required the government to disclose internal recommendations and whether those recommendations were followed, stating that the order was overly broad and instructing the D.C. Circuit to narrow the order accordingly. Importantly, with regard to whether DOGE was an “agency” for FOIA purposes, the Court wrote:
Any inquiry into whether an entity is an agency for the purposes of the Freedom of Information Act cannot turn on the entity’s ability to persuade. Furthermore, separation of powers concerns counsel judicial deference and restraint in the context of discovery regarding internal Executive Branch communications.
DOGE is not a cabinet-level department but has been central to President Trump’s efforts to overhaul the federal government. The Court’s three liberal justices would have denied the government’s request.
Conclusion
For entities potentially subject to the Privacy Act and FOIA—including federal agencies and companies that may need to comply with public records mandates by virtue of their doing business with federal agencies—or that have submitted information to the government—these decisions provide a glimpse not only into how the Court approaches injunctions, but also how it views privacy harms associated with public records. First, it is notable that the Court apparently found the government’s argument regarding employees who “need” to access the data under the Privacy Act persuasive. This understanding of the Privacy Act’s exemption may give agencies greater leeway to make operational decisions. At the same time, these entities may want to note the risks of exposing pre-decisional, deliberative, and privileged information, including recommendations about personnel and agency operations. Overbroad or expedited discovery can force recordkeepers to choose between transparency and information security, risking inadvertent disclosure of protected data or system vulnerabilities. And changes in agency policy or increased scrutiny of internal communications could affect contract terms, compliance obligations, and risk management strategies.
The Tax Court in Soroban Holds that Limited Partners Were Too Active To Be Treated As “Limited Partners” and are Subject to Self-Employment Tax
On May 28, 2025, in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban II”), the Tax Court held the active role of limited partners in a fund manager caused them to fail to qualify as “limited partners” for purposes of section 1402(a)(13) and, therefore, the limited partners were subject to self-employment tax.[1] This is the second Soroban Tax Court case. Previously, in Soroban Capital Partners LP v. Commissioner (161 T.C. No. 12) (“Soroban I”), the Tax Court held that a functional analysis is necessary to determine whether a limited partner is a “limited partner, as such” for purposes of section 1402(a)(13). In the recent case, the Tax Court held that Soroban’s partners were not functionally acting as limited partners because the limited partners “were limited partners in name only.” Two Tax Court cases that reached similar conclusions to Soroban I and Soroban II are being appealed to Courts of Appeals.[2]
Section 1402(a)(13) excludes from self-employment tax the distributive share of income or loss from any trade or business of a partnership carried on by “limited partners, as such.” To determine whether a partner qualifies as a limited partner for these purposes, in the first Soroban case, the Tax Court determined that a functional analysis of a limited partner’s roles and responsibilities was necessary.
In the recent Soroban case, the Tax Court stressed that the test of whether a partner is a limited partner for these purposes is not based on a set number of factors, but it takes into account all relevant facts and circumstances. The Tax Court applied this test and looked to the limited partners’ role in generating Soroban’s income, their role in managing Soroban’s operations, the amount of time they devoted to Soroban, the way Soroban marketed the partners’ expertise and role in the business and the significance of the partners’ capital contributions compared to the fees Soroban charged for its services. The Tax Court concluded that Soroban’s limited partners were essential to generating the business’ income, oversaw day-to-day fund management, devoted their full time to the fund, were held out to the public as essential to the business and contributed insignificant capital relative to fees charged. These factors indicated that the partners’ capital contributions were not investment related.
Each of Soroban’s limited partners were founders and portfolio managers, made hiring decisions, managed employees and worked full time. However, only one was a “key man” and contributed capital. One did not contribute capital and was entitled to only 6.32% of profits. Nevertheless, the Tax Court held that the activities of all of Soroban’s limited partners (including the 6.32% partner) constituted more than mere passive investment for section 1402(a)(13) purposes and, thus, the partners’ income distributions were subject to self-employment tax.[3] The recent Soroban case applies the functional analysis of the first Soroban case and concludes that the limited partners were too active to be treated as limited partners for purposes of section 1402(a)(13). Unless reversed on appeal, Soroban II presents a substantial risk for active fund managers, as the Tax Court’s particular application of the functional analysis test would seem to cast substantially all active managers as ineligible for “limited partner” treatment.
[1] References to sections are to the Internal Revenue Code of 1986, as amended.
[2] Denham Capital Management LP v. Commissioner (T.C. Memo 2024-114) is being appealed in the U.S. Court of Appeals for the First Circuit; Sirius Solutions LLLP v. Commissioner (Docket No. 30118-21) is being appealed in the U.S. Court of Appeals for the Fifth Circuit.
[3] All three of Soroban’s limited partners were principals. It is possible that lower-level employees might be respected as limited partners, although the Tax Court did not provide any guidance on this point.
Jamiel E. Poindexter, Stuart Rosow & Rita N. Halabi also contributed to this article.
Cross-Border Catch-Up: Understanding International Anti-Harassment Training Laws [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Maya Barba (San Francisco) and Kate Thompson (New York, Boston) discuss the intricacies of mandatory anti-harassment training and policies across various countries. Kate and Maya provide an overview of the requirements in Australia, China, South Korea, India, Romania, and Peru, among other countries. The speakers review which employees need to be trained, the duration and frequency of required training programs, and the types of harassment, including sexual harassment, discrimination, and bullying, that these trainings must cover.
California Senate Passes Nation’s First Bill for Accessibility Violation Cure Period
The California Senate recently passed legislation (Senate Bill No. 84) that would require a plaintiff to give a qualified business notice and 120 days to cure an accessibility violation before filing a lawsuit seeking statutory damages and attorneys’ fees. The bill would create the nation’s first true safe harbor for businesses with fifty or fewer employees who are willing and able to address any barriers to access in 120 days. The bill now heads to the California Assembly.
Quick Hits
The California Senate has passed SB 84, which mandates a 120-day notice and cure period for accessibility violations before a plaintiff can file a lawsuit seeking statutory damages and attorneys’ fees.
SB 84 aims to create a safe harbor for businesses with fewer than fifty employees, allowing them to address accessibility barriers within 120 days to avoid statutory damages and legal fees.
If enacted, SB 84 would provide a “fix-it-first” pathway for small California businesses, potentially influencing similar federal protections in the future.
Landscape of Disability Access in California
California has long occupied center stage in the national conversation on accessibility litigation. High statutory penalties, no-fault liability, and liberal fee-shifting rules have turned the Golden State into a magnet for plaintiffs’ lawyers who focus on “construction-related accessibility claims” under both the federal Americans with Disabilities Act (ADA) and parallel state statutes, such as the Unruh Civil Rights Act (Unruh). Senate Bill 84 (SB 84) represents Sacramento’s most consequential attempt in nearly a decade to recalibrate that landscape.
California Civil Code §§ 52 and 54.3 authorize minimum statutory damages of $4,000 per visit for accessibility violations—subject to trebling—plus mandatory attorney’s fees. Those generous remedies, combined with federal ADA claims, led to a wave of high-frequency lawsuits in California, many filed by professional plaintiffs. Small businesses frequently complained that a single missed sign or faded parking stripe could trigger five-figure settlements. Prior reforms tried to soften the blow, but largely preserved strict liability and allowed litigation to multiply. By 2024, legislators faced mounting pressure to extend genuine “fix-it first” opportunities and curb perceived litigation abuse. SB 84 is the legislature’s answer.
SB 84’s New Requirements, Protections, and Limitations
Under SB 84, a party intending to seek statutory damages would be required to first serve a detailed letter “specifying each alleged violation” on the defendant. A lawsuit for statutory damages may not be filed unless—or until—those alleged violations remain unremedied 120 days after service. If the business corrects every cited violation within the 120-day window, it owes no statutory damages, plaintiff’s attorney’s fees, or costs for those items. This is a true safe harbor, rather than the mere possibility of damages reduction under certain existing circumstances.
It is important to note that SB 84 would only apply to defendants that have fifty or fewer employees overall. Businesses with more employees would remain subject to pre-existing rules. SB 84 also does not limit an individual’s right to sue for an injunction and does not disturb a court’s equitable powers.
Key Takeaways
If passed, SB 84 would provide a genuine “fix-it-first” pathway for California businesses with fifty or fewer employees, rendering them immune from statutory damages and fees if they repair cited violations within 120 days.
SB 84 would only benefit businesses with fifty or fewer employees, although plaintiffs’ lawyers may provide notice to other businesses not knowing how many employees they have.
Consider designating a compliance officer (in-house or external) to triage any notice letter so they are not missed. A handful of plaintiffs already provide “pre-litigation” notice of alleged violations and clients overwhelmingly report never receiving the notice.
Under SB 84, the clock on the time to cure the alleged violations starts ticking from the date of service, not the date the recipient opens the mail.
Businesses may want to take swift action in response to a notice letter, because 120 days passes quickly. Some architectural violations can be resolved quickly, such as adding accessible parking signage or adjusting the toilet paper dispenser location. However, many violations take time to assess and correct, such as adding ramps or correcting excessive sloping. This is especially where landlord/tenant buy-in or permitting is required.
“Notice and cure” bills requiring advanced notice under the ADA are regularly introduced in the U.S. Congress. Passage of SB 84 in California could clear the way to there being some chance that federal protections may follow.
The Employment Strategists Episode 14 – Reverse Discrimination [Podcast]
The Supreme Court’s recent unanimous ruling in AIMS v. Ohio Dept. of Youth Services significantly changes how Title VII discrimination cases are evaluated—removing the additional burden previously applied to “reverse discrimination” claims.
The Employment Strategists—David T. Harmon and Mariya Gonor—break down what this means for both employers and employees.
They cover:
– What the Court’s decision says and why it matters
– How employers should adjust DEI programs, training, and handbooks
– What employees should document when facing potential bias
NYC’s Enhanced ESSTA Rules for Prenatal Leave Create Policy, Posting + Paystub Requirements for Employers
Takeaways
Changes to NYC’s paid prenatal leave requirement take effect 07.02.25.
They incorporate and enhance NYS prenatal leave protections that went into effect at the beginning of this year.
NYC employers should understand their obligations and implement the changes to policies, notices, and recordkeeping.
Consistent with the expanding attention afforded to prenatal health and workplace protections nationally, New York State implemented a new paid prenatal leave requirement as an amendment to the state sick leave law, which went into effect Jan. 1, 2025. New York City recently amended its rules related to the Earned Safe and Sick Time Act (ESSTA) to incorporate the state prenatal leave protections and add enhanced requirements.
NYS Paid Prenatal Leave Rights
Since Jan. 1, 2025, all private-sector employers in New York have been required to provide up to 20 hours of paid prenatal leave in a 52-week period to eligible employees, regardless of company size. The 52-week leave period starts on the first day the prenatal leave is used.
The prenatal leave entitlement is in addition to the statutory sick leave entitlement and other paid time off benefits provided by company policy or applicable law, and it applies only to employees receiving prenatal healthcare services, such as medical exams, fertility treatments, and end-of-pregnancy appointments. Spouses, partners, or support persons are not eligible to use prenatal leave.
Employers cannot force employees to use other leave first or demand medical records or confidential health information to approve prenatal leave requests. (See NYS Paid Prenatal Leave: Employers Must Manage a New Entitlement in the New Year.)
NYC ESSTA Rules Incorporating Prenatal Leave
The New York City Department of Consumer and Worker Protection issued amended rules on May 30, 2025, formally incorporating the state prenatal leave requirement into ESSTA. Changes and obligations related to prenatal leave, which are effective July 2, 2025, include:
Policy Requirements
The obligation to promulgate and distribute a policy related to ESSTA is expanded to require that such policy address paid prenatal leave entitlements. Under the rules, employers must distribute their written safe and sick time and paid prenatal leave policies to employees personally upon hire and within 14 days of the effective date of any policy changes and upon an employee’s request.
In essence, all NYC employers have an obligation to modify their current policy and reissue the revised policy to current employees.
Employee Notice of Rights, Posting
The Department also issued an updated Notice of Employee Rights that includes paid prenatal leave. The updated notice must be provided to new hires and to current employees when rights change (which is the case here), and employers must maintain a record of receipt by the employee. The notice also must be posted.
All NYC employers have an obligation to modify the notice required for new hires and reissue the notice to current employees.
Paystub Requirement
For each pay period in which an employee uses prenatal leave, the following information must be clearly documented on pay stubs or other documentation provided to the employee, such as a pay statement:
The amount of paid prenatal leave used during the pay period; and
Total balance of remaining paid prenatal leave available for use in the 52-week period.
Under updated agency FAQs, this information can be provided by an electronic system in certain instances. This requirement is similar to the existing requirement for notice of paid sick and safe time.
NYC employers should understand their obligations and implement these changes to policies, notices, and recordkeeping.