Minnesota Contractors’ Workforce Compliance Requirements, Part II: Equal Pay Certificates
The Minnesota Department of Human Rights (MDHR) recently updated several documents on its website for Minnesota government contractors. This is the second article in a series focused on the compliance responsibilities of Minnesota contractors holding workforce certificates that the MDHR issued. The first part in the series covered the workforce certificate application, affirmative action program template, annual compliance report (ACR), ACR instructions, and nondiscrimination poster. In part two, we discuss the Minnesota Equal Pay Certificate, the purpose of which is to ensure that contractors doing business with Minnesota government agencies pay men and women equal wages for equal work.
Quick Hits
Employers with contracts exceeding $500,000 with Minnesota state agencies and that have forty or more full-time employees in Minnesota or in the state of their primary place of business must obtain an equal pay certificate.
To apply for an equal pay certificate, contractors must hold a current MDHR workforce certificate, complete an online application, and pay a $250 fee.
The MDHR conducts compliance reviews of contractors holding equal pay certificates to ensure adherence to equal pay laws, with potential penalties for noncompliance including fines and revocation of the certificate.
Who Must Obtain an Equal Pay Certificate?
Employers with contracts for goods and services exceeding $500,000 with the State of Minnesota (including its departments, agencies, colleges, and universities), and various metropolitan agencies, with forty or more full-time employees in Minnesota or in the state of their primary place of business, must obtain an equal pay certificate.
In addition, employers (wherever located) with contracts exceeding $500,000 with the University of Minnesota for a capital project funded by a general obligations bond must likewise obtain an equal pay certificate, as must employers with contracts with Minnesota cities, counties, and other political subdivisions for a capital project funded by a general obligations bond exceeding $1 million.
Some businesses are exempt by statute based on the type of contract. For example, certain contracts for healthcare services, health insurance, investment options with the State Board of Investments, and others are exempt.
Minnesota vendors must hold a current equal pay certificate to bid on or obtain Minnesota state contracts exceeding $500,000. Equal pay certificates are tied to a company, not a contract, and are valid for four years.
How to Obtain an Equal Pay Certificate
Employers seeking an equal pay certificate must first register with the Office of the Minnesota Secretary of State and must already hold a current Minnesota Department of Human Rights (MDHR) workforce certificate.
To apply for or renew an equal pay certificate, Minnesota contractors must complete an online application and pay a $250 application fee. The application must be signed by the company’s highest-ranking official (e.g., president, CEO, or board chair).
The application must include basic company information, provide a company contact name and contact information, a description of the goods and/or services provided to the Minnesota government agency or agencies, and a list of facility addresses covered by the equal pay certificate.
The application contains an equal pay compliance statement wherein the highest-ranking company official must affirm the following:
compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Minnesota Human Rights Act, the Minnesota Fair Labor Standards Act, and the Minnesota Equal Pay for Equal Work Law;
the average compensation for women is not consistently below the average compensation for men, considering mitigating factors, as reported in each major EEO-1 report job category (i.e., Officials and Managers, Professionals, Technicians, Sales, Office/Clerical, Skilled Crafts, Operatives, Laborers, and Service Workers). Mitigating factors include, for example: length of service, requirements of specific jobs, experience, skill, effort, responsibility, and working conditions of the job;
how often the company evaluates wages and benefits for compliance with federal and state law;
the methodology used by the company to determine compensation: market pricing, internal pricing, performance pay system, state prevailing wage, union contract requirement, and/or other. If “other,” the contractor must provide a description of the methodology used; and
retention and promotion decisions are made without regard to gender and do not limit employees based on gender to certain job classifications.
The highest-ranking company official must also affirm that the employer will:
furnish pertinent compensation data, analyses, records, and audit responses to MDHR upon request;
promptly correct wage, benefits, and other compensation disparities; and
retain records of employees’ names, daily hours worked, and rate(s) of pay for at least three years.
The MDHR will issue an equal pay certificate or a letter explaining why the application was rejected within fifteen days of the MDHR receiving the contractor’s application.
MDHR Compliance Reviews
Minnesota contractors holding an equal pay certificate are subject to compliance reviews by the MDHR to evaluate compliance with equal pay laws. The MDHR has broad discretion to request documents to determine compliance. In an equal pay audit, the MDHR typically requests the following information for each major EEO-1 report job category:
Number of male employees
Number of female employees
Average annualized salaries paid to male employees and to female employees
Information on performance payments, benefits, and other elements of compensation
Average length of service for male and for female employees
If the MDHR determines that a contractor is not in compliance with the equal pay laws, the MDHR may issue a variety of remedial actions, such as:
requiring the contractor to revise its policies;
obtaining wages and benefits due to employees;
issuing fines of up to $5,000 per calendar year for each contract;
revoking or suspending the equal pay certificate; and/or
seeking modification or termination of the contract.
Refusal to provide data and information requested in a compliance review may also result in suspension or revocation of the equal pay certificate and the inability to bid for or obtain Minnesota state government contracts.
Contractors may challenge an action undertaken by the MDHR by filing an appeal with the Office of Administrative Hearings.
Data Privacy
Data and information submitted as part of the application and compliance review process are kept privileged and confidential. However, the MDHR commissioner’s decision to issue, not issue, revoke, or suspend an equal pay certificate is public data. The list of equal pay certificate holders is published on the MDHR’s website. The MDHR may share information with other government agencies such as the Minnesota Attorney General’s Office, the Minnesota Department of Labor and Industry, U.S. Department of Labor, U.S. Equal Employment Opportunity Commission, and Minnesota state and local government agencies to assist in compliance investigations.
Conclusion
To make the affirmations required in the equal pay certificate application, Minnesota government contractors may want to analyze the wages of their employees expected to perform work on Minnesota contracts by EEO-1 report job category for disparities based on sex. If they identify pay disparities based on sex that are not explained by mitigating factors, then they may want to take prompt corrective action. Contractors may want to conduct these analyses regularly throughout the four-year equal pay certificate certification period. Per the MDHR’s website, contractors holding an equal pay certificate should expect to be audited by the MDHR sometime during their four-year certification period.
The Intersection of Artificial Intelligence and Employment Law
The use of algorithmic software and automated decision systems (ADS) to make workforce decisions, including the most sophisticated type, artificial intelligence (AI), has surged in recent years. HR technology’s promise of increased productivity and efficiency, data-driven insights, and cost reduction is undeniably appealing to businesses striving to streamline operations such as hiring, promotions, performance evaluations, compensation reviews, or employment terminations. However, as companies increasingly rely on AI, algorithms, and automated decision-making tools (ADTs) to make high-stakes workforce decisions, they may unknowingly expose themselves to serious legal risks, particularly under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and numerous other federal, state, and local laws.
Quick Hits
Using automated technology to make workforce decisions presents significant legal risks under existing anti-discrimination laws, such as Title VII, the ADEA, and the ADA, because bias in algorithms can lead to allegations of discrimination.
Algorithmic HR software is uniquely risky because, unlike human judgment, it amplifies the scale of potential harm. A single biased algorithm can impact thousands of candidates or employees, exponentially increasing the liability risk compared to biased individual human decisions.
Proactive, privileged software audits are critical for mitigating legal risks and monitoring the effectiveness of AI in making workforce decisions.
What Are Automated Technology Tools and How Does AI Relate?
In the employment context, algorithmic or automated HR tools refer to software systems that utilize predefined rules to run data through algorithms to assist with various human resources functions. These tools can range from simple rule-based formula systems to more advanced generative AI-powered technologies. Unlike traditional algorithms, which operate based on fixed, explicit instructions to process data and make decisions, generative AI systems differ in that they can learn from data, adapt over time, and make autonomous adjustments without being limited to predefined rules.
Employers use these tools in numerous ways to automate and enhance HR functions. A few examples:
Applicant Tracking Systems (ATS) often use algorithms to score applicants compared to the position description or rank resumes by comparing the skills of the applicants to one another.
Skills-based search engines rely on algorithms to match job seekers with open positions based on their qualifications, experience, and keywords in their resumes.
AI-powered interview platforms assess candidate responses in video interviews, evaluating facial expressions, tone, and language to predict things like skills, fit, or likelihood of success.
Automated performance evaluation systems can analyze employee data such as productivity metrics and feedback to provide ratings of individual performance.
AI systems can listen in on phone calls to score employee and customer interactions, a feature often used in the customer service and sales industries.
AI systems can analyze background check information as part of the hiring process.
Automated technology can be incorporated into compensation processes to predict salaries, assess market fairness, or evaluate pay equity.
Automated systems can be utilized by employers or candidates in the hiring process for scheduling, note-taking, or other logistics.
AI models can analyze historical hiring and employee data to predict which candidates are most likely to succeed in a role or which new hires may be at risk of early turnover.
AI Liability Risks Under Current Laws
AI-driven workforce decisions are covered by a variety of employment laws, and employers are facing an increasing number of agency investigations and lawsuits related to their use of AI in employment. Some of the key legal frameworks include:
Title VII: Title VII prohibits discrimination on the basis of race, color, religion, sex, or national origin in employment practices. Under Title VII, employers can be held liable for facially neutral practices that have a disproportionate, adverse impact on members of a protected class. This includes decisions made by AI systems. Even if an AI system is designed to be neutral, if it has a discriminatory effect on a protected class, an employer can be held liable under the disparate impact theory. While the current administration has directed federal agencies to deprioritize disparate impact theory, it is still a viable legal theory under federal, state, and local anti-discrimination laws. Where AI systems are providing an assessment that is utilized as one of many factors by human decision-makers, they can also contribute to disparate treatment discrimination risks.
The ADA: If AI systems screen out individuals with disabilities, they may violate the Americans with Disabilities Act (ADA). It is also critical that AI-based systems are accessible and that employers provide reasonable accommodations as appropriate to avoid discrimination against individuals with disabilities.
The ADEA: The Age Discrimination in Employment Act (ADEA) prohibits discrimination against applicants and employees ages forty or older.
The Equal Pay Act: AI tools that factor in compensation and salary data can be prone to replicating past pay disparities. Employers using AI must ensure that their systems are not creating or perpetuating sex-based pay inequities, or they risk violating the Equal Pay Act.
The EU AI Act:This comprehensive legislation is designed to ensure the safe and ethical use of artificial intelligence across the European Union. It treats employers’ use of AI in the workplace as potentially high-risk and imposes obligations for continued use, as well as potential penalties for violations.
State and Local Laws: There is no federal AI legislation yet, but a number of states and localities have passed or proposed AI legislation and regulations, covering topics like video interviews, facial recognition software, bias audits of automated employment decision-making tools (AEDTs), and robust notice and disclosure requirements. While the Trump administration has reversed Biden-era guidance on AI and is emphasizing the need for minimal barriers to foster AI innovation, states may step in to fill the regulatory gap. In addition, existing state and local anti-discrimination laws also create liability risk for employers.
Data Privacy Laws: AI also implicates a number of other types of laws, including international, state, and local laws governing data privacy, which creates another potential risk area for employers.
The Challenge of Algorithmic Transparency and Accountability
One of the most significant challenges with the use of AI in workforce decisions is the lack of transparency in how algorithms make decisions. Unlike human decision-makers who can explain their reasoning, generative AI systems operate as “black boxes,” making it difficult, if not impossible, for employers to understand—or defend—how decisions are reached.
This opacity creates significant legal risks. Without a clear understanding of how an algorithm reaches its conclusions, it may be difficult to defend against discrimination claims. If a company cannot provide a clear rationale for why an AI system made a particular decision, it could face regulatory action or legal liability.
Algorithmic systems generally apply the same formula against all candidates, creating relative consistency in the comparisons. For generative AI systems, there is greater complexity because the judgments and standards change over time as the system absorbs more information. As a result, the decision-making applied to one candidate or employee will vary from the decisions made at a different point in time.
Mitigating the Legal Risks: AI Audits, Workforce Analytics, and Bias Detection
While the potential legal risks are significant, there are proactive steps employers may want to take to mitigate exposure to algorithmic bias and discrimination claims. These steps include:
Ensuring that there is a robust policy governing AI use and related issues, like transparency, nondiscrimination, and data privacy
Doing due diligence to vet AI vendors, and not utilizing any AI tools without a thorough understanding of their intended purpose and impact
Training HR, talent acquisition, and managers on the appropriate use of AI tools
Continuing to have human oversight over ultimate workforce decisions so that AI is not the decisionmaker
Ensuring compliance with all applicant and employee notice and disclosure requirements, as well as bias audit requirements
Providing reasonable accommodations
Regularly monitoring AI tools through privileged workforce analytics to ensure there is no disparate impact against any protected groups
Creating an ongoing monitoring program to ensure human oversight of impact, privacy, legal risks, etc.
Implementing routine and ongoing audits under legal privilege is one of the most critical steps to ensuring AI is being used in a legally defensible way. These audits may include monitoring algorithms for disparate impacts on protected groups. If a hiring algorithm disproportionately screens out individuals in a protected group, employers may want to take steps to correct these biases before they lead to discrimination charges or lawsuits. Given the risks associated with volume, and to ensure corrective action as quickly as possible, companies may want to undertake these privileged audits on a routine (monthly, quarterly, etc.) basis.
The AI landscape is rapidly evolving, so employers may want to continue to track changing laws and regulations in order to implement policies and procedures to ensure the safe, compliant, and nondiscriminatory use of AI in their workplace, and to reduce risk by engaging in privileged, proactive analyses to evaluate AI tools for bias.
On the Menu: Florida SB 606 Serves Up More Rigid Requirements for Restaurants to Disclose Operations Charges
Takeaways
Starting 07.01.26, new disclosure requirements go into effect for restaurants that impose “operations charges.”
“Operations charges” are defined in the new law and include gratuities.
Notice requirements will affect many points of customer contact, including menus, bills, receipts, and more.
Amendments to Florida law on notification of automatic gratuity charges create more stringent requirements for how restaurants communicate operations charges to customers. Restaurant owners should review and update their policies and procedures to ensure full compliance with the new requirements.
On June 2, 2025, the governor signed Florida Senate Bill 606, making significant amendments to Section 509.214 of the Florida Statutes regarding “operations charges” in restaurants. SB 606 will go into effect on July 1, 2026.
As a restaurant owner or manager in Florida, understanding the changes to the law is crucial to ensure compliance. This article outlines key changes and what they mean for your business operations.
Background
Previous Florida law allowed restaurants to impose service charges that are not distributed to employees as tips, provided proper notice was given to customers. Early versions proposed in HB 535 would have allowed service charges only for parties of at least six, among other restrictions and requirements.
SB 606 has substantially modified those requirements, creating new obligations for restaurant owners regarding how operations charges are communicated and distributed, but it does not put in place a minimum on party size.
New Definition of “Operations Charge”
Under the amended law, an “operations charge” is defined as any additional fee or charge that a public food service establishment adds to the price of a meal that is not a government-imposed tax, including charges designated as a “service charge,” “gratuity charge,” “delivery fee,” or similar terminology.
Customer Disclosure Requirements
The amended statute requires restaurants to provide clear and conspicuous notice to customers about service charges in the following ways:
Menus, menu boards, contracts, and mobile applications or websites where orders are placed: A notice of the operations charge including the amount or percentage of the charge must appear in a font equal to or greater than the font used for menu item descriptions or contract provisions;
Signage by the register: If no menu or menu board, contract, or table service is provided, as in a fast-food establishment, the operations charge notice must be obvious and clear on a sign by the register;
Bills: A notice of operations charge with a clear statement of the percentage or amount of the charge must be present; and
Receipts: Operations charges must appear on customer receipts and must be on their own lines. Gratuities and sales tax must appear on separate lines. If the operations charge includes an automatic gratuity, this must be stated.
Compliance Steps
To ensure compliance with the updated statute, restaurant owners should:
Review current operations charge practices and determine how they are being communicated and distributed;
Update all affected materials to clearly indicate the existence of operations charges and the amount or percentage of such charges; and
Modify point-of-sale systems to ensure receipts properly itemize and explain operations charges.
The law does not create a private cause of action related to compliance.
Workplace Socializing May Change as Gen Z Employees Drink Less
Research shows that Gen Z employees, ages twenty-one to twenty-eight, are less likely to drink alcohol than previous generations, which may impact how they feel about work-related events that include drinking.
Quick Hits
Alcohol often plays a part in work-related socializing and networking.
Gen Z workers are less likely to drink alcohol than previous generations.
There are a number of possible strategies for employers to help nondrinkers feel included in social events.
Socializing with colleagues continues to be factor that boosts employee engagement, retention, and a sense of belonging. In many companies and industries, the work-related conferences, team bonding events, holiday celebrations, golf outings, and other meetings are often centered around alcohol. But for employees who don’t drink at all, or drink very rarely, it may feel awkward to attend sober when everyone else seems to be a little tipsy.
In a quick survey during a recent Ogletree Deakins webinar, 63 percent of participants said there can be drinking at social events for their employees, while 29 percent said alcohol can be there, but it is not provided by the employer.
Gen Z workers seem to be much less interested than previous generations in happy hour get-togethers with colleagues and other events with alcohol. Their reasons for not drinking may include the cost, wanting to prioritize health and wellness, concerns over driving, or aligning with what others in their age cohort are doing.
A Gallup poll showed that the proportion of young adults (ages eighteen to thirty-four) who said they drink alcohol fell from 72 percent in 2003 to 62 percent in 2023. Likewise, for young adults, the average number of alcoholic drinks consumed per week dropped from 5.2 in 2003 to 3.6 in 2023. With these generational changes in the workforce, employers may find that traditional happy hours for team bonding are not as well-attended or well-received as they used to be.
Next Steps
Employers can consider taking these steps to foster a welcoming and inclusive workplace for Gen Z workers who don’t drink:
When planning a work-related event or team-building activity, asking employees what they want to partake in.
If a work-related event has alcohol, providing nonalcoholic drink options.
Incorporating social activities, such as trivia contests or scavenger hunts, alongside events that have alcohol.
Is the One Big Beautiful Bill Act an Employee Benefits Crystal Ball?
Takeaways
Republicans in the U.S. House of Representatives attempt to deliver on President Trump’s campaign promises in the One Big Beautiful Bill Act (BBB or the Act), which passed the House by a razor-thin margin of 215 in favor and 214 opposed on May 22, 2025.
BBB shows favoritism of Health Savings Accounts and Health Reimbursement Account benefits, making changes to broaden their scope, increase utilization, and bolster savings.
The Act also provides a glimpse into legislative or regulatory changes that may be on the horizon for ERISA-governed plans, including standards for Pharmacy Benefit Manager compensation, contractual requirements, and disclosures applicable to government-subsidized plans.
The goal of the U.S. Senate is to pass One Big Beautiful Bill in a form on which Senators can agree, send it back to the U.S. House of Representatives, who then would have it on President Trump’s desk for signature by July 4, 2025. Time will tell whether this accelerated schedule is practical and what ultimately makes its way into federal law.
Without getting too far ahead of the legislative process and certainly staying out of the weeds of the 1,038 pages of legislative proposals, the BBB reveals fringe benefit, health and welfare benefit, and executive compensation priorities. The legislation also tips the hand of the Trump Administration, shining a light on areas in which we may see additional activity.
HSA, HRA Improvements
It is clear that House Republicans like Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA). There are pages of text aimed at expanding eligibility (including permitting Medicare-eligible enrollees to contribute to HSAs), increasing savings opportunities, allowing rollovers from other healthcare accounts, and permitting the reimbursement of qualified sports and fitness expenses. If the Act becomes law, employers offering HSA or HRA benefits will have some new bells and whistles to add to their programs.
Fringe Benefits That Make Education and Childcare More Affordable
With a focus on families and paying down student loan debt, BBB makes permanent an employer’s ability to make student loan debt repayments on a tax-favored basis under Section 127 of the tax code. BBB also enhances the employer-provided childcare tax credit, further incentivizing employers to provide childcare services to their employees. Whether the employer operates a childcare facility or pays amounts under a contract with a qualified childcare facility, BBB entices employers to add this much-needed employee benefit.
Executive Compensation Changes
The executive compensation changes baked into BBB are designed to help pay for some of the other changes. BBB expands the application of the excise tax on certain tax-exempt organizations paying compensation over $1 million (or excess parachute payments) to include former employees (think: severance). BBB also requires public companies to allocate the Internal Revenue Code Section 162(m) $1 million deduction limit among controlled group members relative to compensation when specified covered employees receive pay from those related employers.
Tax Cuts and Jobs Act Extension
A priority of President Trump, who touted extending his tax cuts during the campaign trail, BBB extends and makes permanent the Tax Cuts and Jobs Act changes. For example, BBB permanently makes qualified moving expense reimbursements taxable.
Pharmacy Benefit Manager Regulation
BBB also includes a few surprise new twists related to Pharmacy Benefit Managers (PBM). Although the legislative reforms currently focus on Medicaid and prescription drug programs subsidized by the federal government (e.g., Medicare Part D plans, including Employer Group Waiver Plans for retirees absent a waiver), it is clear that the Trump Administration and Republicans in Congress seek transparent and fair pricing of prescription drugs. These initiatives eventually may spill over to apply to ERISA-governed plans, in furtherance of President Trump’s Executive Orders advancing Most-Favored Nation prescription drug pricing and directing increased transparency over PBM direct and indirect compensation. So, the changes are worthy of note by all employers that use PBMs.
For Medicaid, BBB prohibits the “spread pricing” model in favor of “transparent prescription drug pass-through pricing model,” which essentially is cost-plus pricing. No more than fair market value can be paid for PBM administrative services.
In the case of Medicare Part D plans, BBB imposes contractual requirements limiting PBM compensation to bona fide service fees. Rebates, incentives, and other price concessions all would need to be passed on to the plan sponsor. Further, the PBM would be required to define and apply in a fully transparent and consistent manner against pricing guarantees and performance measures terms such as “generic drug,” “brand name drug,” and “specialty drug.”
Transparency also is paramount. BBB requires PBMs not only to disclose their compensation, but also their costs and any contractual arrangements with drug manufacturers for rebates, among other details.
It certainly is possible these PBM reforms are coming to an ERISA plan near you. BBB provides a roadmap for the Department of Labor’s Employee Benefits Security Administration to issue ERISA fiduciary standards, best practices, or disclosure requirements.
Where Are We Now with the Use of AI in the Workplace?
As we previously reported here and here, employers must navigate a rapidly evolving legal landscape as artificial intelligence (AI) continues to transform the modern workplace. From federal rollbacks to aggressive state-level regulation, the use of AI in employment decisions—particularly in hiring, performance management, and surveillance—has become a focal point for lawmakers, regulators, and litigators alike. This article contains an overview of the shifting federal landscape on AI at work, the state level response, and offers recommendations for employers to mitigate risk.
Trump Administration Rolls Back Federal AI Oversight
The federal approach to AI in employment has undergone a dramatic shift in 2025. On his first day in office, President Trump rescinded Executive Order 14110, which directed federal agencies to address AI-related risks such as bias, privacy violations, and safety concerns. This was followed by the removal of key guidance documents from the U.S. Equal Employment Opportunity Commission (EEOC), including technical assistance on Title VII compliance and the Americans with Disabilities Act (ADA) as they relate to AI tools. The Department of Labor has also signaled that its prior guidance on AI best practices may no longer reflect current policy, leaving employers with less clarity at the federal level than ever.
Despite these reversals, employers remain liable under existing anti-discrimination laws for the outcomes of AI-driven employment decisions—even when those tools are developed by third-party vendors.
States, Especially California, Fill the Federal Void With AI Regulation
In the absence of clear federal guidance, states have begun regulating AI in the workplace. California, in particular, has emerged as a bellwether.
Earlier this year, California introduced several bills aimed at curbing the unchecked use of AI in employment decisions:
SB 7 – “No Robo Bosses Act”: This bill would require employers to provide 30 days’ notice before using any automated decision system (ADS) and mandates human oversight in employment decisions. It also bans AI tools that infer protected characteristics or retaliate against workers.
AB 1018 – Automated Decisions Safety Act: This legislation would impose broad compliance obligations on both employers and AI vendors, including bias audits, data retention policies, and impact assessments.
AB 1221 and AB 1331: These bills target AI-driven workplace surveillance, requiring transparency and limiting monitoring during off-duty hours or in private space.
Other states are following suit. For example, Illinois, Colorado, and New York City already have laws regulating AI in hiring, and over 25 states have introduced similar legislation in 2025.
Practical Implications for Employers
With limited federal guidance and state laws multiplying, inaction is risky and, indeed, reckless. Employers should therefore take proactive steps to mitigate legal exposure:
Audit AI Tools Regularly: Conduct bias audits and impact assessments to ensure compliance with anti-discrimination laws.
Review Vendor Agreements: Ensure contracts with AI vendors include provisions for transparency, data handling, and liability.
Train HR and Leadership: Equip decision-makers with the knowledge to use AI responsibly and in compliance with applicable laws.
Implement Human Oversight: Avoid fully automated employment decisions. Ensure a human reviews and approves critical outcomes.
Stay Informed: Monitor legislative developments in all jurisdictions where your business operates.
Looking Ahead: Balancing Innovation With Worker Protection
The use of AI in the workplace is not going away. In fact, it is accelerating. But with innovation comes responsibility. Employers should systematically document data collection from workplace technologies, update privacy-related polices, and ensure human oversight is integrated into any employment decisions that rely on algorithmic input.
Oregon Imposes Limitations on Restrictive Covenants in Agreements With Healthcare Practitioners
On June 9, 2025, Oregon Governor Tina Kotek signed into law Senate Bill (SB) 951, which, among other things, will impose significant new limitations on restrictive covenants with healthcare practitioners relating to noncompetition, nondisparagement, and nondisclosure. The limitations may soon be modified by separate legislation, House Bill (HB) 3410.
Quick Hits
With some exceptions, Oregon’s SB 951 renders “void and unenforceable” noncompetition agreements with “medical licensees,” i.e., Oregon-licensed physicians, nurse practitioners, physician associates, and practitioners of naturopathic medicine.
The law also renders “void and unenforceable” certain kinds of nondisparagement and nondisclosure agreements between medical licensees and management services organizations, hospitals, or hospital-affiliated entities.
The new limitations currently apply prospectively and void noncompliant agreements entered into or renewed on or after the law takes effect. HB 3410, if passed, will apply new limitations on noncompetition agreements retroactively.
The law provides anti-retaliation protections to medical licensees who violate otherwise valid nondisclosure or nondisparagement agreements or who disclose or report information that a licensee believes in good faith violates a law, rule, or regulation.
Limitations on Noncompetition Agreements With Medical Licensees
SB 951 renders void and unenforceable noncompetition agreements with medical licensees that are entered into on or after the passage of the law, with some exceptions. If HB 3410 becomes law, however, SB 951 will be given retroactive effect as to noncompetition agreements. The law will render void and unenforceable noncompetition agreements with medical licensees that are entered into before, on, or after the passage of the law.
A “medical licensee” includes an individual licensed in Oregon to practice medicine or naturopathic medicine, or an individual licensed as a nurse practitioner or physician associate.
SB 951 defines a “noncompetition agreement” as “a written agreement between a medical licensee and another person under which the medical licensee agrees that the medical licensee, either alone or as an employee, associate or affiliate of a third person, will not compete with the other person in providing products, processes or services that are similar to the other person’s products, processes or services for a period of time or within a specified geographic area after termination of employment or termination of a contract under which the medical licensee supplied goods to or performed services for the other person.”
The limitation on noncompetition agreements broadly applies to agreements between medical licensees and any person, management services organization, hospital, or hospital-affiliated clinics.
A “management services organization” in this context is defined as “an entity that under a written agreement, and in return for monetary compensation” provides “management services”—i.e., “ services for or on behalf of a professional medical entity”—including payroll, human resources, employment screening, employee relations, or any other administrative or business services that support or enable the entity’s medical purpose but that do not constitute the practice of medicine; the enabling of physicians, physician associates, and nurse practitioners to jointly render professional healthcare services; or the practice of naturopathic medicine.
The law provides exceptions to the prohibition on noncompetition agreements with medical licensees. In all cases, a noncompetition agreement must comply with Oregon’s general limitations on such agreements between employers and employees set out in ORS 653.295. The exceptions may be revised if HB 3410 passes the legislature and the bill is signed into law by the governor.
In both SB 951 and HB 3410, noncompetition agreements with medical licensees will be permitted where the medical licensee has a minimum ownership or membership interest in the other party to the agreement; where “the medical licensee does not engage directly in providing medical services, health care services or clinical care”; or where the professional medical entity provides the medical licensee with documentation of a “protectable interest” (SB 951) or a “recruitment investment” (HB 3410), defined as costs to the professional medical entity equivalent to at least 20 percent of the annual salary of the medical licensee that are incurred for (a) “marketing to and recruiting the licensee”; (b) “providing the licensee with a sign-on or relocation bonus”; (c) “educating or training the licensee in the entity’s procedures”; (d) providing the licensee with “support staff, technology acquisitions or upgrades and license fees related to the employee’s employment”; or (e) “similar or related items.” In some circumstances, both measures place limits on the length of time a noncompetition agreement can remain in effect.
Limitations on Nondisclosure and Nondisparagement Agreements With Medical Licensees
In addition to its limitations on noncompetition agreements, SB 951 also limits nondisclosure and nondisparagement agreements between medical licensees and management services organizations, or between medical licensees and hospitals or hospital-affiliated entities, if the licensee is an employee of the hospital or hospital-affiliated entity. These limitations apply to agreements entered into on or after the date of the law’s passage. There are also some important exceptions.
Nondisclosure Agreements
SB 951 defines a “nondisclosure agreement” as any written agreement that restricts a medical licensee from disclosing (a) a policy or practice that the licensee was required to use in patient care other than individually identifiable health information protected from disclosure under the Health Insurance Portability and Accountability Act of 1996 (HIPAA); (b) a policy, practice, or other information about or associated with the licensee’s employment, conditions of employment, or rate or amount of pay or other compensation; or (c) any other information the licensee possesses or to which the licensee has access by reason of the licensee’s employment by, or provision of services for or on behalf of, the other party to the agreement.
Nondisparagement Agreements
SB 951 defines a “nondisparagement agreement” as any written agreement that requires a medical licensee to “refrain from making to a third party a statement about another party to the agreement or about another person specified in the agreement as a third-party beneficiary of the agreement, the effect of which causes or threatens to cause harm to the other party’s or person’s reputation, business relations or other economic interests.”
Exceptions to the Limitations on Nondisclosure and Nondisparagement Agreements
The limitations on nondisclosure and nondisparagement agreements expressly do not apply to information subject to protection by applicable trade secret law or to information that is proprietary to the other party or other third-party beneficiary of the agreement. The limitations also do not apply to statements by medical licensees that constitute actionable libel, slander, tortious interference with contractual relations, or other established tort, so long as a claim against the medical licensee does not depend upon or derive from a breach or violation of the agreement.
The new law also permits a nondisclosure or nondisparagement agreement with a medical licensee under the following two circumstances:
The medical licensee’s employment with the other party has terminated, voluntarily or involuntarily, and the licensee is not restricted from making a good faith report of information that the licensee believes is evidence of a violation of a law, rule, or regulation to a hospital, hospital-affiliated clinic, or state or federal authority.
The nondisclosure or nondisparagement agreement is part of a negotiated settlement between the medical licensee and the other party.
Antiretaliation Protections
The new law prohibits a management services organization or a professional medical entity from taking an “adverse action” against a medical licensee in retaliation for, or as a consequence of, the licensee’s violation of a nondisclosure or nondisparagement agreement or because the licensee in good faith disclosed or reported information that the licensee believed was a violation of law, rule, or regulation to the management services organization, a hospital, a hospital-affiliated clinic, or a state or federal authority.
An “adverse action” is broadly defined to include “discipline, discrimination, dismissal, demotion, transfer, reassignment, supervisory reprimand, warning of possible dismissal or withholding of work, even if the action does not affect or will not affect a medical licensee’s compensation.”
Next Steps
With SB 951, Oregon joins other states, such as Colorado, Wyoming, Pennsylvania, Louisiana, Maryland, and Connecticut, that are considering or have taken steps to significantly limit or prohibit restrictive covenants with healthcare practitioners.
In light of the changes, employers of healthcare practitioners in Oregon may want to consider reviewing and revising their employment contracts and evaluating alternative strategies for protecting their business interests.
Be Aware of Liability for Prevailing Wage Requirements, Which Can be Significant!
A recent case filed in the United States District Court for the Eastern District of Pennsylvania, Lipinski and Taboola v. North-East Deck & Steel Supply, Civ Action No. 5:25-cv-1467, should remind all contractors and sub-contractors working on public works projects funded by federal or state funds of the potential for significant liability for failing to pay required prevailing wages and improperly handling wage and hour issues. The plaintiffs, two crane operators, filed suit on behalf of themselves and a class of employees against their employer, claiming that the employer misclassified workers to avoid paying premium wage rates. They also claimed that their employer paid the fringe benefit portion of their wages as though they were independent contractors, thereby avoiding paying the employer’s portion of payroll taxes. The complaint alleges as well that employees were not compensated for time spent performing pre-shift safety inspections in violation of the Fair Labor Standards Act, 29 USC §201 et seq.
Many public works contracts are funded, in whole or in part, by federal, state, or local funds. These projects could be subject to federal of state prevailing wage laws, such as the federal Davis-Bacon Act or, as in the case noted above, a state statute like the Pennsylvania Prevailing Wage Act, 43 P.S. § 165-1, et seq. These prevailing wage statutes generally require employers to properly classify employees according to the actual work they are performing and to pay the prevailing wage rates and fringe benefits for those classifications.
Some state statutes, like the Pennsylvania Prevailing Wage Act, provide for the aggrieved employee or group of employees to file their own lawsuits to seek redress for underpayments. They can seek liquidated damages, as well as attorneys’ fees and interest, using class action complaints. Also, while the federal Davis Bacon Act does not provide a similar direct right to institute a lawsuit, employees can file claims with the Department of Labor, or employees can bring claims under the False Claims Act for an employer’s falsification of certified payroll reports in some cases. Creative plaintiffs have also asserted claims for breach of contract or failure to pay all wages due under a state wage and hour law.
All of this means that employers who work on publicly funded projects must pay particular attention to employee classification and pay issues. Given that an employer can potentially be liable for significant damages, including backpay, penalties, pre-judgment interest, reasonable attorneys’ fees and costs, it is critical to properly classify workers to ensure that they are paid required prevailing wages under federal or state law. In addition, any employer classifying workers as independent contractors should closely examine the nature of the work performed. Finally, employers must be careful to timely pay employees for all compensable work they perform on the project and to submit accurate certified payroll reports reflecting such payments.
Indiana Adds More Restrictions on Physician Noncompete Agreements
Last month we reported on physician and healthcare noncompete laws enacted in 2025. Shortly after the article was posted, another state joined the ranks: Indiana.
Indiana recently enacted Senate Enrolled Act No. 475 (the “Act”), which amended Indiana’s preexisting physician noncompete statute. The amendment prohibits certain physicians from entering noncompete agreements with hospitals, parent companies of hospitals, affiliated managers of hospitals, or hospital systems. The Act is Indiana’s third law restricting physician noncompetes, building upon existing legislation passed in 2020 and 2023.
Backdrop: Indiana’s 2020 and 2023 Physician Noncompete Restrictions
In 2020, Indiana took its first step toward restricting physician noncompete agreements with the passage of Indiana Code section 25-22.5-5.5. Under the 2020 law, a physician noncompete agreement is only enforceable if it satisfies certain requirements, such as ensuring patient notification of the physician’s contact information, ensuring the physicians’ access to medical records, and giving the physician the option to purchase a release from the terms of the noncompete covenant at a “reasonable price.”
In May 2023, Indiana took a second step toward restricting physician noncompete agreements with the passage of Senate Enrolled Act No. 7 (“SEA 7”). Most notably, SEA 7 prohibits noncompete agreements between an employer and a primary care physician. SEA 7 also renders noncompete agreements with all other types of physicians unenforceable where (1) the employer terminates the physician’s employment without cause, (2) the physician terminates their employment for cause, or (3) the physician’s employment contract expires, and the physician and employer have fulfilled their obligations under the employment contract. SEA 7 also clarified the “reasonable price” buyout provision in the 2020 law by specifying a process for negotiating a reasonable buyout price.
Senate Enrolled Act No. 475
This year, on May 6, 2025, Governor Mike Braun signed into law Senate Enrolled Act No. 475. Effective July 1, 2025, the Act prohibits noncompete agreements between a physician and a hospital, parent company of a hospital, affiliated manager of a hospital, or hospital system. The Act does not repeal, replace, or reduce any aspect of the 2020 or 2023 laws. It only applies to agreements entered into on or after July 1, 2025.
The Act defines a “noncompete” as any contract or contractual provision that restricts or penalizes a physician’s ability to practice medicine in any geographic area for any period of time after a physician’s employment ends. The Act provides further illustration: the definition explicitly includes restrictive covenants that impose financial penalties or repayment obligations pursuant to practicing medicine with a new employer, provisions requiring employer consent to practice medicine with a new employer, and provisions that impose indirect restrictions that limit or deter a physician from practicing medicine with a new employer.
The Act does not apply to:
Agreements in the sale-of-business context where the physician owns more than 50% of the business entity at the time of sale;
Nondisclosure agreements protecting confidential business information and trade secrets; or
Non-solicitation agreements, so long as the non-solicitation agreement only lasts for a one-year term post-employment and does not restrict patient interactions, patient referrals, clinical collaboration, or a physician’s professional relationships.
Importantly, the Act’s definition of “hospital” does not include freestanding health facilities, rural emergency hospitals, and institutions specifically intended to diagnose and treat mental illness and developmental disabilities.
In light of these new restrictions, employers expecting to enter noncompete agreements with physicians in Indiana should work with counsel to make sure their agreements meet these new standards.
Safety Perspectives From the Dallas Region: Challenging OSHA’s Judicial Process [Podcast]
In this episode of our Safety Perspectives from the Dallas Region podcast series, shareholders John Surma (Houston) and Frank Davis (Dallas) discuss pending litigation regarding the constitutionality of the Occupational Safety and Health Review Commission (OSHRC) administrative law judges (ALJs). Frank and John review the arguments supporting the claim that the current system for handling workplace safety disputes is unconstitutional. They specifically highlight issues such as the absence of the right to a jury trial, improper appointments of judges, restrictions on the president’s authority to remove judges, and an insufficient number of OSHRC members to adequately review cases.
Energy & Sustainability Washington Update — June 2025
In a pivotal month for energy and fiscal policy, House Republicans advanced their sweeping reconciliation package, narrowly passing the bill on May 22 by a 215-214 vote. The legislation aims to make permanent the expiring tax provisions of the 2017 Tax Cuts and Jobs Act while rolling back key elements of the Inflation Reduction Act (IRA), with clean energy tax credits taking a bigger hit than many had anticipated. Despite early signs of potential bipartisan concern — most notably a letter from 21 House Republicans expressing reservations about undermining energy incentives — support for clean energy did not materialize when it counted. The House action comes amid a flurry of activity across the executive branch, with President Trump issuing a series of executive orders to bolster the US nuclear sector and federal agency leaders laying out plans to reshape energy and environmental programs. As the bill moves to the Senate, where internal GOP divisions are already surfacing, it’s unclear whether the more aggressive provisions will stick if the Senate opts for a more moderate path, leaving the broader Republican energy and budget agenda facing a critical political test.
Reconciliation Package Passes Through the House
On May 22, the House narrowly passed its reconciliation bill in a 215-214 vote, with one member abstaining. The legislation seeks to make permanent the lower tax rates established by the Republicans’ 2017 Tax Cuts and Jobs Act, which are set to expire at the end of this year. What advanced was an amended package consolidating 11 separate bills previously approved by their respective committees. Notably, the measure includes significant revisions to tax provisions tied to the Inflation Reduction Act.
Clean Electricity ITC and PTC: For those wishing to utilize the clean electricity production tax credit (45Y) and investment tax credit (48E), projects must begin construction within 60 days of the legislation’s enactment. Additionally, to maintain eligibility to receive the tax credits, the projects must be operational by December 31, 2028. This is an accelerated timeline from the one originally proposed by the House Ways and Means Committee version of the bill, which had set a 2031 deadline. Projects failing to meet these requirements would no longer be eligible for the credits.
Foreign Entities of Concern (FEOC) Restrictions are now applied to these credits. After enactment of the legislation, the credit user cannot be a specified foreign entity. One year after enactment, facilities that begin construction cannot receive material assistance from a prohibited foreign entity. Two years after enactment, the credit user cannot be a foreign-influenced entity or make an applicable payment to a prohibited foreign entity.
Immediate Elimination of these credits for solar or wind residential or rural leases.
Nuclear Carveout: Eligible advanced nuclear facilities and expanded nuclear facilities are exempted from the 60-day beginning-of-construction requirements and instead must only comply with the placed-in-service deadline on December 31, 2028.
Nuclear Power Production Credit: For 45U, the credit expires at the end of 2031.
Advanced Manufacturing Tax Credit: For 45X, production occurring after 2031 will now no longer qualify — one year earlier than current law. In addition, under the legislation, wind-energy components cease to be eligible after 2027 — five years earlier than the IRA intended.
Clean Fuel Production Credit: For 45Z, the credit’s life is extended from 2028 to 2031. Under the legislation, feedstock must be sourced exclusively from the United States, Canada, or Mexico. Credits are denied if the producer becomes a prohibited foreign entity or foreign-influenced entity.
Carbon Sequestrating Credit: For 45Q, the credit is maintained as originally written in the IRA, remaining until 2032.
Clean Hydrogen Production Tax Credit: 45V is eliminated for new projects beginning after December 31, 2025.
Electric Vehicles Credits: The Clean Vehicle Credit (30D), Used Clean Vehicle Credit (25E), Alternative Fuel Vehicle Refueling Property Credit (30C), and Qualified Commercial Clean Vehicle Credit (45W) are all eliminated for new projects beginning after December 31, 2025.
Energy Efficiency Credits: The Energy Efficient Home Improvement Tax Credit (25C), Residential Clean Energy Property Credit (25D), and Energy Efficient New Homes Tax Credit for Home Builders (45L) are all eliminated for new projects beginning after December 31, 2025.
For all the credits listed above — except the Clean Electricity ITC and PTC, which have their own, more-stringent requirements — the following FOEC restrictions now apply: After enactment, the credit user cannot be a specified foreign entity. Two years after enactment, the credit user also cannot be a foreign-influenced entity — defined by if, during the taxable year, a specified foreign entity has the authority to appoint a board member, executive officer, or similar individual; if a single specified foreign entity owns at least 10% of the entity; if multiple specified foreign entities collectively own 25% or more of the entity; or if they together hold 25% or more of its debt. Furthermore, an entity will also be considered foreign-influenced if, during the prior taxable year, it knowingly, or should have known it, made payments — such as dividends, interest, compensation for services, rents, royalties, guarantees, or other fixed and periodic payments — either amounting to 10% or more of such payments to a single specified foreign entity or 25% or more in total to multiple specified foreign entities.
Beyond tax measures, the bill claws back unobligated IRA funds from both the Department of Energy (DOE) and the Environmental Protection Agency (EPA). Specifically, the bill eliminates unused IRA credit subsidy funding, which is a key source of funding for the Loan Programs Office (LPO). While the bill preserves existing loan authority, the rescission of the credit subsidy could have significant implications for the LPO’s ability to administer its programs. It also removes a previously included — and controversial — provision that would have allowed the sale of small public land tracts in Utah and Nevada for development.
The legislation now heads to the Senate, where significant changes are expected. Republican leaders aim to pass the bill before the July 4 recess, though procedural and political hurdles could delay action beyond the mid-August deadline, which is tied to the recent $4 trillion increase in the federal debt ceiling.
With a 53-47 majority, Senate Republicans need at least 51 votes to pass the measure. However, several GOP senators have already expressed concerns. Senators Thom Tillis (R-NC), Lisa Murkowski (R-Alaska), John Curtis (R-Utah), and Jerry Moran (R-Kan.) have criticized the House bill’s rollback of IRA tax credits as too aggressive. Others, including Senators Josh Hawley (R-Mo.) and Susan Collins (R-Maine), oppose the bill’s proposed Medicaid cuts and have publicly stated they have “Medicaid red lines” they won’t cross. On the opposite end, Senators Ron Johnson (R-Wis.), Rick Scott (R-Fla.), Mike Lee (R-Utah), and Rand Paul (R-Ky.) argue the bill doesn’t go far enough in addressing deficit reduction, signaling that Senate Republicans must navigate divisions from both moderates and fiscal hardliners.
Trump’s Executive Orders on Nuclear
On May 23, President Trump announced four Executive Orders (EOs) aimed at boosting the nuclear industry:
“Deploying Advanced Nuclear Reactor Technologies for National Security” mandates the acceleration of development and use of advanced nuclear technologies by the federal government, including establishing a program for the use of nuclear energy at military installations and directing the DOE to designate sites for deploying these reactors.
“Reforming Nuclear Reactor Testing at the Department of Energy” mandates the DOE to expedite the testing and deployment of advanced reactors through streamlined processes at National Laboratories and a new pilot program outside of them, with a focus on reaching operational status for qualified test reactors and at least three pilot program reactors within specific deadlines. Furthermore, the order requires the DOE to reform its environmental review procedures under the National Environmental Policy Act (NEPA) to remove barriers to reactor development.
“Reinvigorating the Nuclear Industrial Base” emphasizes the critical need to address challenges like foreign dominance in nuclear reactor designs and a reliance on external sources for nuclear fuel. The order directs the Secretary of Energy to use the authority provided by the Defense Production Act (DPA) to seek voluntary agreements with domestic nuclear energy companies. These agreements are intended to facilitate cooperative procurement of LEU and HALEU and allow consultation to enhance spent nuclear fuel management (including recycling and reprocessing), ensure the availability of the nuclear fuel supply chain capacity, and expand the nuclear energy workforce.
“Ordering the Reform of the Nuclear Regulatory Commission” directs the Nuclear Regulatory Commission to reorganize to “promote the expeditious processing of license applications and the adoption of innovative technology.” A dedicated team of at least 20 officials will be created to draft new regulations.
Not all of this will ultimately prove realistic. For instance, the Trump administration called for 20 new Section 123 Agreements for Peaceful Nuclear Cooperation by 2028 when only 25 have been signed since 1954. The administration also set a goal of 10 new large reactors with complete designs under construction by 2030, when only two have been done in the last 40 years. Still these four EOs clearly shine a light on the administration’s goals for nuclear and the potential for revitalizing this industry.
Agency Updates
Trump’s recent executive actions align with statements made by Secretary of Energy Chris Wright during a DOE budget oversight hearing. Wright emphasized his strong support for using the DOE’s Loan Programs Office to accelerate the deployment of nuclear energy projects. He also highlighted his top priorities, which include advancing US artificial intelligence capabilities, supporting the emerging geothermal industry, and streamlining the approval process for oil, gas, and coal projects. However, on May 15, the DOE announced that it would be reviewing 179 individual awards totaling over $15 billion, starting with those at the LPO, an initiative that may run counter to Secretary Wright’s comments about using the LPO for nuclear.
During budget oversight hearings before both the House and Senate, EPA Administrator Lee Zeldin faced sharp questioning from lawmakers. Following President Trump’s “skinny budget request,” Zeldin announced plans to eliminate the EPA’s Office of Atmospheric Protection — which oversees the Energy Star program — as well as the Office of Air Quality Planning and Standards. In their place, the agency will establish two new offices within the Office of Air and Radiation: the Office of Clean Air Programs and the Office of State Air Partnerships. When pressed about the future of Energy Star, Zeldin stated he is in discussions with several private entities to take over the program, arguing that since it is not mandated by Congress, the EPA has the authority to transfer its management. However, the privatization of the Energy Star program would still likely require congressional authorization.
Meanwhile, the confirmation process for key positions across federal agencies continues to progress. In May, several appointments were finalized.
At the DOE, the following were advanced out of the Senate committees: Jonathan Brightbill to be General Counsel, Tina Pierce to be Chief Financial Officer, Wells Griffith to be Undersecretary, Brandon Williams to be Undersecretary for Nuclear Security / Administrator for Nuclear Security, Dario Gil to be Undersecretary for Science, Kyle Haustveit to be Assistant Secretary for Fossil Energy and Carbon Management, Ted Garrish to be Assistant Secretary for Nuclear Energy, Tristan Abbey to be Administrator of the US Energy Information Administration, Matthew Napoli to be Deputy Administrator for Defense Nuclear Nonproliferation, Scott Pappano to be Principal Deputy Administrator of the National Nuclear Security Administration, Conner Prochaska to be Director of the Advanced Research Projects Agency – Energy, and Catherine Jereza to be Assistant Secretary of Electricity. Timothy Walsh has been nominated for Assistant Secretary of Environmental Management and Audrey Robertson has been nominated for Assistant Secretary for Energy Efficiency and Renewable Energy. A full chart reflecting everything we know about staffing within the DOE can be found here. The chart will continue to be updated as more information becomes available.
At the EPA, Jeffrey Hall was nominated to be Assistant Administrator for Enforcement and Compliance Assurance, and John Busterud to be Assistant Administrator, Office of Solid Waste.
For Interior, nominations for Ned Mamula to be Director, US Geological Survey, Brian Nesvik to be Director, US Fish and Wildlife Service, Andrea Travnicek to be Assistant Secretary for Water and Science, Leslie Beyer to be Assistant Secretary for Land and Minerals Management, and William L. Doffermyre to be Solicitor were all advanced out of the Senate committees.
Antitrust Under Trump: June 2025 Updates
As the Trump administration’s antitrust landscape continues to develop, companies should stay alert to key changes in merger filing requirements, remedy expectations, agency personnel, and more. The Federal Trade Commission (FTC) is considering further staff cuts and has criticized the use of innovation as a justification for proposed mergers. Additionally, the FTC and Department of Justice (DOJ) continue to seek ways to expedite the merger review process for unproblematic deals, including divestiture consent decrees.
Below is a high-level review of recent developments that could impact business strategy, dealmaking, and compliance.
In Depth
The Return of Structural Remedies
The FTC and DOJ have made good on their promise to accept structural remedies to address antitrust concerns, and they have announced consent decrees involving requirements to divest specific product lines to experienced divestiture buyers in two transactions in the technology industry. The agencies emphasized the importance of “clean” divestitures and strong divestiture buyers in discussing the settlements.
The two consent decrees stand in contrast to the Biden administration (which had not accepted a prelitigation divestiture since 2022) and its policies disfavoring antitrust remedies.
Agencies Support Resolution of Merger Concerns Through Transparent Settlements
A representative from the DOJ emphasized the agency’s preference for settlements under the Tunney Act at a conference on June 4. Such settlements involve the agency filing a public complaint and a statement of how the proposed remedy would resolve anticompetitive issues.
The DOJ representative went on to explain that the transparency involved in Tunney Act settlements is beneficial to the public and that proposed fix-it-first settlements also should be approached with transparency to allow the public to comment on the deal and to provide clear guideposts for parties. The representative emphasized the DOJ’s interest in encouraging transparency in all parts of the merger review process and criticized Biden-era procedures under which the agency allowed parties to resolve matters with divestitures outside of the formal consent order process.
An FTC representative at the same conference laid out the principles the Trump administration will apply in examining divestiture proposals, explaining that the agency prefers divestiture of standalone businesses.
Commissioner Holyoak Is Skeptical of Lackluster Merger Remedy Proposals
Despite statements from the antitrust agencies that strong divestiture proposals would be well-received, FTC Commissioner Melissa Holyoak emphasized in a speech that the FTC will not hesitate to litigate against the fix when a proposal is inadequate.
Holyoak pointed to recent divestiture remedies to explain that the FTC would be taking its time to evaluate proposed merger remedies and would add additional requirements to ensure the ultimate remedy is effective.
Holyoak also discussed the important aspects the FTC may consider when determining whether a divestiture buyer is suitable, including experience with the industry, financial soundness, existing relationships with customers of the divestiture assets, and a track record of successful acquisitions.
DOJ Intends to Provide Clarification for the 2023 Merger Guidelines
Principal Deputy Assistant Attorney General of the DOJ Antitrust Division Roger Alford has stated that there is a need for clarity on the 2023 Merger Guidelines, pointing out the uncertainty of how the guidelines would be applied by the courts and whether the administration could enforce them.
Speaking at a May 21 event, Alford explained that providing more clarity regarding market thresholds that trigger a presumption of merger illegality is one of the provisions that may require further explanation. These thresholds of concern were lowered in the 2023 Merger Guidelines, which substantially lowered the threshold for transactions being deemed presumptively unlawful.
Commissioner Meader Is Skeptical of Innovation as a Defense for Tech Deals
FTC Commissioner Mark Meador expressed apprehension over antitrust defenses typically presented by merging parties to justify their proposed transactions at a recent antitrust conference.
Meador criticized the use of “innovation” as a broad-strokes argument to justify vertical mergers that present anticompetitive concerns, claiming that innovation is “a floating abstraction” and a “kitchen sink ‘innovation defense’” that helps merging parties avoid scrutiny.
Meador went on to emphasize the importance of the antitrust agencies taking the time to distinguish genuine product improvements through innovation from conduct that excludes rivals or forecloses competition.
DOJ Continues to Promote Reaching Merger Decisions Quickly
Assistant Attorney General Gail Slater highlighted the early responses to the Trump administration, including 36 early terminations since March 1, at the International Competition Network Annual Conference.
Slater also mentioned that the DOJ has been looking for additional ways to speed up the merger review process outside of the reintroduction of early termination, and she restated the new administration’s openness to approving robust settlements that include structural remedies.
FTC Plans to Cut Workforce Again
FTC Chair Andrew Ferguson told the House Appropriations Committee on May 15 that FTC staff need to be cut further to bring the total staff down to around 1,100 employees, pointing to the fact that the agency had been paying employee salaries using carryover funds.
These cuts would return the FTC workforce to the same number of workers it had before the Biden administration and would represent a 15% reduction in employees.
Ferguson also discussed the FTC’s planned cost-saving cuts to non-staff-related expenditures, including real estate and facilities.