DOJ Civil Division Refocuses Affirmative Enforcement Priorities
Key Takeaways from DOJ’s 2025 Civil Division Mandate
Expanded Use of the False Claims Act (FCA) 1The government is broadening its application of the FCA beyond traditional garden-variety fraud. As discussed in Polsinelli’s May 27 update, the expansion includes a focus on bringing actions against entities receiving federal funds that allegedly discriminate on the basis of race, sex or religion through unlawful or overbroad DEI programs. Similarly, the DOJ will pursue institutions that allow or fail to prevent antisemitism under a false certification theory of liability under the FCA.
Increased Risk for Healthcare ProvidersProviders offering gender-affirming care to minors may face FCA liability for billing practices, diagnosis coding and drug use, especially where services contravene the administration’s policy objectives.2
Litigation Against “Sanctuary” JurisdictionsThe government intends to bring affirmative preemption lawsuits against jurisdictions that have state and local laws that allegedly obstruct federal immigration enforcement.
Denaturalization as a Weapon of Civil EnforcementThe government has been tasked with expanding denaturalization actions beyond national security cases to include fraud, material omissions, or criminal conduct that would have rendered individuals ineligible for naturalization.
On June 11, 2025, Assistant Attorney General for the Civil Division, Brett A. Shumate issued a memorandum titled Civil Division Enforcement Priorities (Enforcement Memo) directing all Civil Division lawyers to prioritize investigations and enforcement actions advancing the following five priorities: (1) combating alleged discriminatory practices such as certain DEI initiatives; (2) addressing antisemitism; (3) investigating gender-related medical interventions performed on minors; (4) challenging the legal validity of sanctuary jurisdictions; and (5) prioritizing denaturalization proceedings. These enforcement priorities mark a significant realignment of the Civil Division’s focus and signal a more assertive and ideologically driven use of civil enforcement tools – particularly the FCA – to advance policy objectives tied to discrimination, immigration, gender-related healthcare and federal benefits programs.
While in recent years the FCA has largely been used to combat fraud in healthcare and government contracting, under the Enforcement Memo, any organization receiving federal funds – including educational institutions, healthcare providers and local governments – should expect heightened scrutiny over compliance with civil rights laws. Recipients of federal funds that use race- or sex-based preferences in ways the government views as discriminatory may now face FCA liability under the umbrella of “civil rights fraud.” Additionally, Civil Assistant United States Attorneys (AUSAs) are to prioritize cases against entities alleged to have permitted antisemitism, particularly in educational settings, and to focus on whether such conduct violates federal grant conditions or constitutes a false certification for FCA liability purposes.
The Enforcement Memo further directs Civil AUSAs to pursue FCA claims against healthcare providers and pharmaceutical companies that bill federal programs for “impermissible services” related to gender dysphoria, including puberty blockers, hormone therapies, surgical interventions and other treatments used in gender-affirming care.3 This includes scrutiny of diagnosis coding practices and potentially alleging violations of the Food, Drug, and Cosmetic Act.4 Additionally, billing for gender-affirming care provided to minors, particularly in jurisdictions with restrictive laws, may be construed as knowingly submitting a false claim.
The Enforcement Memo also articulates a robust denaturalization initiative, expanding denaturalization as a potential consequence for those who obtained citizenship through fraud or were later involved in terrorism, trafficking or other disqualifying conduct.5 While denaturalization has long existed as a legal remedy, using it as a central civil enforcement mechanism marks a profound shift in DOJ Civil Enforcement. The prioritization of denaturalization carries significant legal and operational implications for both individuals and institutions. This approach may lead to an increase in civil litigation initiated by the government, particularly in cases where criminal prosecution is not feasible or has already concluded. This structured approach underscores the DOJ’s intent to use denaturalization not only as a corrective measure but also as a deterrent and enforcement tool.
The DOJ’s new enforcement priorities reflect a strategic realignment of civil enforcement tools to advance specific policy objectives.
[1] 31 U.S.C. §§ 3729–3733 (2023).
[2] See, e.g.,Exec. Order No. 14,168, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, 90 Fed. Reg. 8615 (Jan. 30, 2025); Exec. Order No. 14,187, Protecting Children from Chemical and Surgical Mutilation, 90 Fed. Reg. 8771 (Feb. 3, 2025); Memorandum from Pamela Bondi, Att’y Gen., Preventing the Mutilation of American Children (Apr. 22, 2025).
[3] See id.
[4] 21 U.S.C. §§ 301–399i (2023).
[5] 8 U.S.C. § 1451(a) (2023).
Payroll Brass Tax: Payroll Tax Compliance for Multistate Employees [Podcast]
In the second installment of Ogletree Deakins’ new podcast series, Payroll Brass Tax, Mike Mahoney (shareholder, Morristown/New York) and Stephen Kenney (associate, Dallas) discuss multi-jurisdictional tax issues for hybrid and remote employees. Stephen explains the complexities employers face with varying state and local income tax withholding rules, unemployment insurance contributions, and state-specific benefit programs, emphasizing the importance of a state-by-state analysis. Mike and Stephen explore the nuances of non-resident income tax withholding, reciprocal income tax agreements, and the “convenience of the employer” rule. They also address the impact of multi-jurisdictional employees on state benefit contributions and the registration obligations for employers with remote workers in new jurisdictions.
Texas SB 1318: Major Changes to Healthcare Non-Compete Agreements
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (SB 1318), which amends Section 15.50 of the Texas Business and Commerce Code, commonly referred to as the “Texas Covenants Not to Compete Act.” SB 1318 significantly tightens restrictions on the permitted use of covenants not to compete for physicians and certain other healthcare practitioners, including dentists, nurses, and physician assistants (“Healthcare Practitioners”). The provisions of SB 1318 take effect and will apply to any non-compete entered into or renewed on or after September 1, 2025.
Below is a summary of key provisions of SB 1318 and resulting changes to the existing framework for physician and Healthcare Practitioner non-competes in Texas:
Key Provisions
1 Year Maximum Duration – Any non-compete clause seeking to limit or restrict the professional licensed practice of any physician or Healthcare Practitioner is now limited to a period of no more than one (1) year following termination.
5 Mile Geographic Cap – The geographic reach of a non-compete clause seeking to limit or restrict the professional licensed practice for any physician or Healthcare Practitioner is limited to a 5-mile radius from the practitioner’s primary workplace.
Mandatory Buyout Option – While healthcare employers have long been required to include a buyout option for physician non-competes, employers must now include buyout options in every non compete that seeks to limit or restrict the professional licensed practice of any physician and any Healthcare Practitioner, in each case, giving such practitioners the right to pay a buyout amount to eliminate an otherwise enforceable non-compete restriction. Further, no buyout amount may exceed a practitioner’s total annual salary and wages at the time of termination.
New “Void and Unenforceable” Provisions for Physician Non-Competes – SB 1318 expressly states that “a covenant not to compete relating to the practice of medicine is void and unenforceable against” a licensed physician “if the physician is involuntarily discharged . . . without good cause.” As such, unless there is a reasonable basis for discharge of a physician from contract or employment that is directly related to the physician’s conduct, a physician may not be subject to an otherwise enforceable non-compete if a physician is involuntarily discharged. Employers should address this aspect by paying close attention to how “cause” is defined in any agreements with physicians and other Healthcare Practitioners.
Impact of SB 1318
For Practitioners – SB 1318 significantly enhances mobility. Shorter duration and limited geographic restrictions ease professional transitions, and the use of consistent buyout calculations ensures professionals can voluntarily enter a restrictive period while keeping financial exposure in check.
For Employers – Healthcare employers will need to review and potentially revise existing provider agreements, adjusting clauses to align with the new limits. They must also anticipate an eventual buyout or risk having non-compliant clauses struck as unenforceable. Transparent communication of buyout terms will be essential, as will proactive efforts to ensure all agreements with any physicians and other Healthcare Practitioners align with the new law.
Policy Context – This new law aligns with a broader trend in Texas and nationally toward greater workforce mobility within the healthcare industry.
Practical Compliance Guidance
Before September 1, 2025 – Employers should audit existing contracts, flagging those set for renewal and contracts expected to be used for new hires. Template agreements expected to be entered into on or after September 1, 2025, should be updated to reflect the maximum one-year term, a 5-mile radius, and the required reasonable buyout clause.
Drafting Buyout Clauses – These must clearly specify how the buyout amount is calculated and ensure it does not exceed the practitioner’s annual compensation. Clear documentation minimizes future disputes.
Monitor Enforcement – Record contract dates, buyout transactions, and ensure practitioners understand their rights. Failure to comply risks rendering the entire non-compete unenforceable under Texas law.
Final Comments
SB 1318 marks a significant shift in Texas employment law by curtailing the reach and enforceability of non-compete provisions in the healthcare industry. Employers need to be mindful of the changed landscape and act promptly to revise contracts and processes to ensure timely and full compliance with the amendments brought about by SB 1318 by the deadline of September 1, 2025.
DHS Sending Termination Notices to CHNV Foreign Nationals
On June 12, 2025, the Department of Homeland Security (DHS) began sending termination notices to foreign nationals paroled into the United States under a parole program for Cubans, Haitians, Nicaraguans and Venezuelans (CHNV).
The terminations are legally allowed under a May 30, 2025, decision by the US Supreme Court lifting a federal district court injunction that had temporarily barred the federal government from implementing the revocations.
The termination notices inform the foreign nationals that both their parole is terminated, and their parole-based employment authorization is revoked – effective immediately.
Employer Obligations
The Immigration law provides that it is unlawful to continue to employ a foreign national in the U.S. knowing the foreign national is (or has become) an unauthorized alien with respect to such employment.
How will an employer know if an employee has lost work authorization?
For E-Verify users, E-Verify is in the process of notifying employers and employer agents that they need to log in to E-Verify and review the Case Alerts on the revocation of Employment Authorization Documents (EADs). The employer is then on notice that an employee has lost work authorization.
However, many employers are not enrolled in E-Verify. Those employers may learn of a revocation when an employee presents the termination notice to the employer. Also, as the CHNV revocation is in the news, DHS may consider employers on notice, with an obligation to review the status of its employees to determine whether workers have lost authorization to work.
At this point, DHS has not provided guidance to employers on their obligations, but we recommend employers act cautiously and take reasonable steps to determine whether company employees are impacted. We encourage taking these steps:
Employers should review their I-9 records and supporting documents to determine if employees have employment authorization cards with the code C11, and that the country of citizenship on the card lists Cuba, Haiti, Nicaragua or Venezuela.
When an employer is notified or discovers that an employee’s C11 work authorization has been revoked, the employer should not immediately terminate the employee. Certain individuals, even from the impacted countries, may have C11 work authorization separate and apart from the CHNV program. These work authorizations remain valid.
When an employer is reasonably certain the employee’s C11 employment authorization has been terminated, the employer should ask the employee if they have other valid work authorization (which is common). If yes, the employer should then reverify the employee’s Form I-9 in Supplement B, with the employee presenting new employment authorization documentation.
If an employee is unable to provide new employment authorization documentation, the employer should consider terminating employment. In the event of an Immigration & Customs Enforcement investigation, knowingly to continue to employ a foreign national who is not authorized to work in the U.S. can result in a potential charge.
When an employer is uncertain regarding the correct course of action, we recommend speaking to Immigration counsel to review and determine the appropriate steps.
Minimum Wage Increases Coming Soon Across the Nation – Especially in California
Employers in many states and localities will see an increase in minimum wages starting July 1, 2025.
Many Changes Coming in California
As it often does, California leads the way with a patchwork of minimum wage increases across localities and industries scheduled for this summer.
Los Angeles Prepares for the Olympics with Proposed Wage Increases
Employers, workers, and advocates have been closely following headlines regarding Los Angeles’s so-called “Olympic Wage” initiative. The legislation in question, Ordinance 188610, requires higher minimum wages, minimum health benefits, and training standards for employees of large hotels and employers servicing the Los Angeles International Airport (“LAX”). This is not the first time these industries have been singled out; however, this proposal specifically contemplates the upcoming 2026 World Cup and 2028 Olympics.
Los Angeles’s City Council adopted the ordinance on May 23, Mayor Karen Bass signed it into law on May 27, and it was published on May 29. Opponents quickly submitted a petition for referendum, seeking to overturn the ordinance before it takes effect. In accordance with local rules, though the ordinance has been signed into law, if nearly 93,000 signatures are collected within 30 days after publication of the ordinance, it is suspended until it can be placed on a ballot for a general election in June 2026. This leaves the proposed minimum wage increases, and related measures, in flux through at least June 30, 2025.
If the ordinance is not overturned and the new provisions take effect, beginning on July 1, 2025, the minimum wage will increase to $22.50 for workers in hotels with at least 60 guest rooms and employees of employers servicing LAX. If employers servicing LAX do not provide health benefits to an employee, the ordinance stipulates a minimum wage of $30.15 for that employee.
If the referendum passes, and the ordinance does not take effect, the minimum wage for hotel workers will raised slightly to $21.01. Airport workers will be subject to existing minimum wage laws.
The City of Santa Monica matches the hourly wage for hotel workers set by Los Angeles. Santa Monica has already announced that it will apply the increased minimum wage for hotel workers. This means that the outcome of the referendum will impact hotel employers in both Los Angeles and Santa Monica.
We are keeping a close eye on these developments. Employers in the hospitality and tourism industries should be aware of the provisions in the ordinance and prepare for changes, if any, required by July 1, 2025.
First Scheduled Minimum Wage Increase for CA Health Care Workers
Following several amendments, on October 16, 2024, a new minimum wage scale for health care workers went into effect in California. The first scheduled increases start July 1, 2025. There are two tiers of increases effective July 1 depending on the facility.
Tier 1: minimum wage increases from $23 to $24
Large health systems and dialysis clinics
“Covered Health Care Facilities” run by large counties
Tier 2: minimum wage increases from $18 to $18.63 (a 3.5% increase)
“Safety Net Hospitals,” meaning hospitals with high populations of Medicare/Medicaid patients, rural health care facilities, and health care facilities owned, affiliated or operated by a county with a population of less than 250,000
“Covered Health Care Facilities” run by small counties
Employers should refer to the state’s Labor Commissioner FAQs or our previous post (published prior to amendments that postponed implementation) breaking down the covered facilities and employers for more information.
California Minimum Wage Rate Hikes by Industry
In addition to those detailed above, employers in hospitality-related industries will see increases in the minimum wage in several other California localities. All industry-specific minimum wage increases are detailed below. The minimum wage for fast food workers, which, at $20, is higher than the state’s general minimum wage rate, will not increase on July 1. Employers should keep in mind that these industry-specific minimum wage rates preempt the relevant jurisdiction’s general minimum wage rate.
The following chart summarizes coming industry-specific wage hikes:
Industry
Current Minimum Wage
Increased Minimum WageEffective July 1, 2025
Healthcare (Statewide)
$23 (large health systems and those run by large counties)
$18 (“safety net” facilities and those run by small counties)
*
$24 (large health systems and those run by large counties)
$18.63 (“safety net” facilities and those run by small counties)
*
Hotels with 60 or more Guest Rooms
(City of Los Angeles & City of Santa Monica)
$20.32
$22.50 or $21.01
pending resolution of referendum, see above
Employers Servicing LAX (City of Los Angeles)
$19.28 if the employer provides health benefits
or
$25.23 if the employer does not provide health benefits
$22.50 if the employer provides health benefits
or
$30.15 if the employer does not provide health benefits
pending resolution of referendum, see above
Hotels (City of West Hollywood)
$19.61
$20.22
Hotels (City of Long Beach)
$23.00
$25.00
Airport & Convention Center (City of Long Beach)
$17.97
$18.58
* other categories of facilities excluded from July 1, 2025, increases
California General Minimum Wage Rate Hikes by Jurisdiction
Several localities in California will also increase their general minimum wage on July 1, 2025. These cities and counties enforce a minimum wage above the state’s minimum of $16.50. Note that the City of Malibu, one of the localities with scheduled increases effective each July 1, has suspended its planned increase this year in light of the Palisades Fire. Employers should keep in mind that, where applicable, the industry-specific minimum wage rates detailed above preempt each jurisdiction’s general minimum wage rate.
Jurisdiction
Current Minimum Wage
Increased Minimum WageEffective July 1, 2025
City of Alameda
$17.00
$17.46
City of Berkeley
$18.67
$19.18
City of Emeryville
$19.36
$19.90
City of Fremont
$17.30
$17.75
City of Los Angeles
$17.28
$17.87
Unincorporated Los Angeles County
$17.27
$17.81
City of Milpitas
$17.70
$18.20
City of Pasadena
$17.50
$18.04
City & County of San Francisco
$18.67
$16.51 (government supported employees)
$19.18
$16.97 (government supported employees)
City of Santa Monica
$17.27
$17.81
Minimum Wage Increases Outside of California
Though California leads the way in mid-year minimum wage rate hikes, employers in several states and localities will also see increases soon. The following chart summarizes the coming changes, which are effective July 1, 2025, unless otherwise noted. Note that the chart only lists rates that are changing imminently.
Jurisdiction
Current Minimum Wage
Increased Minimum Wage
Alaska
$11.91
$13.00
District of Columbia
$17.50
$10.00 for tipped workers (total hourly rate must meet full minimum wage)
$17.95
$12.00 for tipped workers (total hourly rate must meet full minimum wage)
Florida
$13.00
$14.00
* effective Sept. 30, 2025
Chicago, Illinois
(employers with more than four employees)
$16.20
$11.02 for tipped workers (total hourly rate must meet full minimum wage)
rates for youth workers vary
$16.60
$12.62 for tipped workers (total hourly rate must meet full minimum wage)
rates for youth workers vary
Montgomery County, Maryland
$17.15 (employers with 51 or more employees)
$15.50 (employers with 11 to 50 employees)
$15.00 (employers with 10 or fewer employees)
$17.65 (employers with 51+ employees)
$16.00 (employers with 11 to 50 employees)
$15.50 (employers with 10 or fewer employees)
St. Paul, Minnesota
$14.00 (employers with six to 100 employees)
$12.25 (employers with five or fewer employees)
*
$15.00 (employers with six to 100 employees)
$13.25 (employers with five or fewer employees)
*
Oregon
$14.70 (standard)
$15.95 (employers within the Portland metropolitan boundary)
$13.70 (employers within a nonurban county)
$15.05 (standard)
$16.30 (employers within the Portland metropolitan boundary)
$14.05 (employers within a nonurban county)
Burien, Washington[1]
$16.66, the Washington State Minimum Wage (all employers with 21 to 499 full-time equivalent employees)
*
$20.16 (all employers with 21 to 499 full-time equivalent employees)
*
Everett, Washington
$16.66, the Washington State Minimum Wage
$20.24 (“large employers” of 500 + employees worldwide)
$18.24 (“covered employers” with 15+ employees worldwide or $2 million+ in annual gross revenue)
Renton, Washington
$18.90 (employers with 15 to 500 employees)
*
$19.90 (“mid-sized employers” of 15 to 500 employees or $2 million+ in local annual gross revenue)
*
Tukwila, Washington
$20.10 (employers of 15-500 employees worldwide or over $2 million of annual gross revenue in Tukwila)
*
$21.10 (“mid-sized employers” of 15-500 employees worldwide or $2 million+ in local annual gross revenue)
*
* Other categories of employers/employees excluded from July 1, 2025, increases
Maureen Maher-Patenaude, a Summer Associate (not admitted to practice) in Epstein Becker Green’s New York office, contributed to the preparation of this piece.
ENDNOTES
[1] On February 25, 2025, the City of Burien filed a complaint seeking clarification of a voter-approved initiative regarding the city’s minimum wage. The case is pending in King County Superior Court. The scheduled minimum wage increase for “Level 2 employees” on July 1, 2025, is unaffected by the suit. Updates may be found on the city’s website.
Too Hot to Handle: Don’t Get Burned by Cal/OSHA’s Heat Rules
As summer temperatures rise across California, it’s a good time for employers to review their responsibilities under Cal/OSHA’s heat illness prevention standards. These rules apply to both outdoor and indoor workplaces and are designed to protect employees from heat-related illnesses and injury.
The outdoor heat illness prevention standards apply to all outdoor places of employment. For outdoor workplaces, employers must provide fresh drinking water, access to shade, and allow cool-down rest breaks when temperatures exceed 80°F, acclimatization procedures, and emergency response procedures. Additionally, high-heat procedures are required for specific industries including agriculture, construction, landscaping, oil and gas extraction, and transportation of certain products and materials. When the temperature reaches or exceeds 95°F, additional steps are required, such as closer monitoring and more frequent communication with employees. Training is also required for all outdoor employees and supervisors so that they can recognize the signs of heat illness and know how to respond.
Indoor workplaces are also covered under a newer regulation that took effect in 2024. If the temperature inside reaches 82°F or more, employers need to provide water, cool-down areas, acclimatization procedures, emergency response procedures, and supervisor and employee training. These regulations do not apply to incidental heat exposures where an employee is exposed to temperatures between 82-95°F for less than 15 minutes in any 60-minute period, with some exceptions. If the temperature or heat index hits 87°F, or if employees wear clothing that traps heat or work near a high radiant heat area and the temperature reaches or exceeds 82°F, monitoring and additional controls are required.
Finally, under both the outdoor and indoor standards, employers are required to establish a written Heat Illness Prevention Plan. This plan must contain the procedures implemented by the employer for the provision of water, shade, or cool-down areas, emergency response procedures, acclimatization procedures, and procedures for responding to high-heat work environments.
If a business includes both indoor and outdoor work, it’s important to evaluate each area separately and make sure the right protections are in place for each environment.
SJC Confirms Nonsolicitation Agreements Are Excluded by Scope of Massachusetts Noncompetition Agreement Act
On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) issued a decision in Miele v. Foundation Medicine, Inc., confirming that the Massachusetts Noncompetition Agreement Act does not apply to nonsolicitation agreements incorporated into a termination agreement even if the termination agreement includes a forfeiture provision.
Quick Hits
In 2018, the Massachusetts Noncompetition Agreement Act (MNAA), effective prospectively only for agreements entered into on or after October 1, 2018, was enacted.
The Massachusetts Supreme Judicial Court affirmatively held that nonsolicitation agreements are not subject to the MNAA.
The parties’ dispute centered on whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the MNAA when the violation of the nonsolicitation agreement triggers a forfeiture clause.
The SJC held that just because a nonsolicitation agreement is coupled with a forfeiture provision does not change the fact that nonsolicitation provisions are excluded from the MNAA.
Factual Summary
In 2017, Foundation Medicine, Inc. (FMI) hired Susan Miele. Miele signed a restrictive covenant agreement as a condition of her employment, which included a noncompetition, nonsolicitation, and confidentiality and assignment provisions. The nonsolicitation provision barred Miele, both during her employment and for one year after the end of her employment, from directly or indirectly soliciting any employees or consultants of FMI to leave FMI or facilitate their hire by her subsequent employer.
In 2020, Miele and FMI executed a transition agreement in connection with her separation from the company, and that transition agreement expressly incorporated the restrictive covenant provisions that Miele had signed upon her hire by FMI. The transition agreement included a forfeiture provision that provided that if Miele committed a breach of any agreement with FMI, Miele would forfeit any unpaid benefits under the transition agreement and would have to immediately repay any previously paid benefits. FMI ultimately paid Miele over $1 million in transition benefits.
In 2021, after Miele left her employment with FMI, she joined Gingko Bioworks. FMI alleges that during the one-year period after she left FMI, Miele recruited several FMI employees to work at Gingko. FMI then notified Miele that she had breached her transition agreement, and that pursuant to the forfeiture clause in that agreement, FMI ceased further payments to Miele and demanded that she repay all benefits already disbursed. Miele did not comply with that demand.
Procedural History and the Parties’ Arguments
Miele sued FMI in late 2021, alleging that FMI breached the transition agreement by withholding her transition benefits. FMI counter-claimed for breach of contract, stating that Miele violated both her transition agreement and her restrictive covenant agreement, and asked the court for judgment declaring it did not need to pay Miele any additional benefits under the transition agreement.
Miele moved for judgment on the pleadings, arguing that while the MNAA did not expressly apply to nonsolicitation agreements, it should apply here because the inclusion of the forfeiture clause made the non-solicitation agreement subject to the Massachussetts noncompetition agreement. FMI argued in response that the MNAA did not apply here, noting that it only governs “noncompetition agreements” and expressly excludes non-solicitation agreements.
The lower court granted Miele’s motion in part, arguing that FMI could not enforce the forfeiture provision of the transition agreement, but also holding that FMI could still assert Miele’s breach of the restrictive covenant agreement as a defense to her breach of contract claim or from seeking damages for that alleged breach. In its holding, the lower court rejected FMI’s position that all non-solicitation agreements fall outside of the noncompetition act, and instead held that nonsolicitation agreements are only excluded if they do not impose a forfeiture provision for breach of the agreement.
FMI moved for an interlocutory ruling to the appeals court, and the SJC then allowed FMI’s application for direct appellate review.
The SJC’s Holding
The SJC framed the parties’ dispute as follows: whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the Massachusetts Noncompetition Agreement Act when the violation of the nonsolicitation agreement triggers a forfeiture clause.
In reaching its holding, the SJC looked to legislative history and the plain language of the Massachusetts Noncompetition Agreement Act, noting that noncompetition agreements do not include nonsolicitation agreements, and forfeiture for competition agreements are a subset of noncompetition agreements. The court found that it then necessarily followed that forfeiture for competition agreements also exclude nonsolicitation agreements, and that to conclude otherwise would contradict the statute’s express exclusion of nonsolicitation agreements from the broader category of noncompetition agreements.
The SJC found that the inclusion of a forfeiture clause in Miele’s transition agreement did not alter this analysis, reasoning that there was no justification for treating a nonsolicitation agreement differently simply because it includes a forfeiture provision. In support of its decision, the SJC pointed out that the critical flaw in Miele’s position was that her reading of the statute would expand the scope of forfeiture for competition agreements to include nonsolicitation provisions even though the statute clearly excluded them from the definition of noncompetition agreements. The SJC further explained that “solicitation cannot be reintroduced through a back door without rendering the statute internally contradictory.”
The SJC remanded the matter to the lower court with instructions to reverse the order partially granting Miele’s motion for judgment on the pleadings.
Key Takeaways
This decision clarifies the scope of the MNAA and provides further guidance to employers regarding remedies they can pursue or enforce for potential breaches of nonsolicitation agreements. Employers may want to review their current agreements to consider the implications of the Miele decision for their existing or future agreements.
5 Things to Know About Senate Bill 1318: Navigating New Non-Compete Restrictions for Healthcare Practitioners in Texas
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (“SB 1318”), which amends Texas Business & Commerce Code Section 15.50(b) to impose new limitations on physician non-competes. SB 1318 also adds a new Section 15.501, which restricts non-competes for dentists, nurses, and physician assistants. SB 1318 goes into effect September 1, 2025, and applies to agreements entered into or renewed on and after that day. Here are the five key things to know about the new law:
1. The “Reasonable Price” Buyout Standard Has Changed
Previously, Texas law required that physician non-compete agreements include a buyout provision at a “reasonable price,” often leading to disputes and uncertainty over what constituted “reasonable.” SB 1318 replaces this standard with a clear cap. Now, the buyout amount cannot exceed the physician’s total annual salary and wages at the time of termination. This change eliminates the prior option to arbitrate the buyout price.
2. New Time and Geographic Limitations
SB 1318 imposes limits on the duration and geographic scope of non-compete agreements for physicians. Non-competes may not exceed a period of one year following the end of the employment or contract, and the restricted area cannot exceed a five-mile radius from the location where the practitioner primarily practiced. These limitations apply to non-competes related to employment agreements, independent contractor agreements, or ownership documents. The limitations do not apply to physician ownership interests in a hospital or ambulatory surgery center (i.e., Section 15.50(c) remains unchanged). Additionally, SB 1318 requires that all terms and conditions of the non-compete be clearly and conspicuously stated in writing.
3. Non-Competes Are Void If Physician Terminated Without Good Cause
Physician non-compete agreements are now void and unenforceable if the physician is involuntarily discharged without “good cause.” SB 1318 defines “good cause” as a reasonable basis for discharge directly related to the physician’s conduct, job performance, or employment record. This means that if a physician is let go for reasons unrelated to their performance or conduct (i.e., without good cause), their non-compete will not be enforceable.
4. Non-Compete Restrictions Do Not Apply to Administrative Services.
SB 1318 does not create any restrictions for non-competes related to managing or directing medical services in an administrative capacity for medical practices or other healthcare providers. So, SB 1318 should not affect a majority of medical director agreements, which are purely for administrative services.
5. Expansion of Non-Compete Restrictions to Dentists, Nurses, and Physician Assistants
For the first time, SB 1318 extends non-compete restrictions to other healthcare practitioners, including dentists, professional and vocational nurses, and physician assistants. It is important to note that professional and vocational nurses include RNs, LPNs, CRNAs, nurse midwives, clinical nurse specialists, APRNs and others licensed under Chapter 301 of the Texas Occupations Code. The same requirements that apply to physicians—buyout cap, one-year duration, five-mile geographic limit, and clear written terms—now apply to these practitioners as well. Unlike physician non-competes, SB 1318 does not state that a non-compete for dentists, nurses, or physician assistants is void if the practitioner is terminated without good cause. Similarly, SB1318 does not require that these practitioners be permitted to continue treating former patients experiencing acute illness, receive a list of patients they treated during the year preceding the end of employment, or obtain access to medical records for patients if authorized.
SB 1318 represents a substantial change to Texas’s approach to non-compete agreements in the healthcare sector. By capping buyout amounts, limiting the scope and duration of restrictions, voiding non-competes for terminations without good cause, and expanding protections to additional practitioners, the law creates a more defined framework for restrictive covenants in the healthcare sector. In the meantime, both employers and practitioners should review their contracts and prepare for compliance with the new requirements.
Upcoming OSHA and U.N. Meetings May Trigger Changes in U.S. Hazard Communication Standards
On June 24, 2025, the Occupational Safety and Health Administration (OSHA) will conduct a virtual public meeting to discuss the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The primary focus of this meeting is to gather stakeholder input and prepare for the upcoming forty-eighth session of the United Nations Economic and Social Council’s Sub-Committee of Experts on the GHS, which will take place in Geneva, Switzerland, from July 7 to July 9, 2025.
OSHA is expected to provide updates on recent regulatory activities, discuss potential changes to the Hazard Communication Standard (HCS) to align with the latest GHS revisions, and solicit feedback from industry representatives, labor organizations, and other interested parties. Key topics will include hazard classification, labelling requirements, safety data sheets, and the impact of GHS updates on U.S. regulations and workplace safety.
Quick Hits
On June 24, 2025, OSHA will hold a virtual public meeting to discuss updates to the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and gather stakeholder input.
The upcoming meeting of the United Nations’ Sub-Committee on the GHS will be a key forum for discussing and adopting revisions to the GHS, which OSHA will later evaluate and incorporate into U.S. regulations.
OSHA aims to improve chemical hazard communication and facilitate international trade by aligning U.S. regulations with the latest GHS updates, ensuring clarity and consistency for workers and emergency responders.
OSHA’s Hazard Communication Standard is explicitly designed to align with the GHS, which is an internationally agreed-upon system for classifying and labelling chemicals. The GHS is periodically revised and updated by the U.N. Sub-Committee based on new scientific information, stakeholder input, and evolving best practices. The July 7–9, 2025, Geneva, Switzerland, meeting is one of the key forums where such revisions are discussed and adopted by consensus among participating countries, including the United States.
When the Sub-Committee adopts new or revised criteria, label elements, or safety data sheet (SDS) requirements, OSHA reviews these changes to determine how best to incorporate them into U.S. regulations. This process ensures that U.S. chemical safety standards remain harmonized with those of major trading partners and reflect the latest scientific and technical knowledge.
Following the Geneva meeting, OSHA is expected to evaluate the adopted GHS revisions and initiate the rulemaking process to update the HCS as necessary. This may include:
revising hazard classification criteria for physical, health, or environmental hazards;
updating required label elements, such as signal words, pictograms, hazard statements, and precautionary statements;
modifying the format and content requirements for safety data sheets and
addressing new or emerging hazards identified at the international level.
For example, OSHA’s most recent update to the HCS (finalized in 2024) was based on the seventh revised edition of the GHS, with select elements from the eighth edition. This update was informed by previous UN GHS sub-committee meetings and reflects the ongoing process of international harmonization.
After the Geneva meeting, OSHA is expected to engage with U.S. stakeholders—including industry representatives, labor organizations, and safety professionals—to gather input on how the new GHS provisions should be implemented domestically. OSHA relies on the stakeholders’ input to update regulations that are designed to be practical, effective, and tailored to the needs of U.S. workplaces.
OSHA also provides transition periods for compliance, allowing chemical manufacturers, importers, distributors, and employers time to update their hazard communication programs, labels, and SDSs in accordance with the new requirements.
By incorporating the outcomes of the Geneva meeting into U.S. regulations, OSHA aims to:
improve the clarity, consistency, and effectiveness of chemical hazard communication for workers and emergency responders;
reduce confusion and compliance burdens for companies operating in multiple countries; and
facilitate international trade by ensuring that U.S. chemical products meet global labelling and classification standards.
Employers that work with materials that fall under GHS probably will not see dramatic changes in the regulations they must abide by. Instead, those changes will likely be incremental and will first be seen by those that bear the responsibility for labelling chemicals.
Does HIPAA Apply To My Business?
Varnum Viewpoints:
HIPAA applies outside of healthcare providers. If you offer employee health benefits, especially through a self-funded plan, HIPAA applies to your health plan.
You may be a covered entity or business associate. Health plans, providers, and vendors handling health data are subject to HIPAA, often to differing extents.
HIPAA has specific compliance duties. Requirements include privacy notices, policies, risk assessments, and business associate agreements.
The Health Insurance Portability and Accountability Act (HIPAA) applies far more often than many realize, including when a company outside of the healthcare sector provides certain types of health benefits to its own employees. While HIPAA compliance quickly gets complex, determining if it applies to your business does not need to be. This advisory includes helpful definitions of key terms, including Protected Health Information (PHI), the Privacy Rule, and the Security Rule.
What Is a HIPAA Covered Entity?
HIPAA applies only to covered entities, including health care providers and health plans, and their business associates. Many covered entities already know they are subject to HIPAA. This includes those in the healthcare sector, such as doctors, hospitals, pharmacies, and insurance companies, for whom HIPAA compliance should be an integral part of daily business.
Does My Employee Health Plan Make My Company a Covered Entity?
Employer-sponsored health plans are also covered entities. The design of that health plan will impact how HIPAA applies, but the Privacy Rule and the Security Rule make it clear: if employees receive health benefits, HIPAA will apply to the health plan, even if it does not apply to the company in its role as an employer generally. If an employer maintains a fully-insured plan and the insurer is handling most or all of the administration of the coverage, the employer may not receive much PHI, if any. However, as more plans move toward self-funding and self-administration, HIPAA will apply to more functions carried out by the employer.
Who Is a HIPAA Business Associate?
A business associate is any entity that creates, receives, or transmits PHI in relation to a covered entity. Business associates are subject to the same HIPAA compliance rules as covered entities, and the same penalties apply for violation of these rules. In addition, covered entities and their business associates must enter into “business associate agreements” which explicitly require the business associate to comply with HIPAA and may set forth other terms such as notification and indemnification provisions.
As with covered entities in the healthcare sector, most business associates will know that their work is subjecting their business to HIPAA. However, any business that provides products and services that are or could be used to provide healthcare should carefully assess whether and to what extent HIPAA applies to their business. For example, SAAS providers and app developers may have access to PHI, making them a business associate that must comply with HIPAA. Some covered entities will push their vendors to enter into business associate agreements, even if it does not directly apply.
What Is PHI?
Protected health information is any individually identifiable health information that is created, received, stored, or transmitted by a covered entity, an entity subject to HIPAA, such as a health care provider, insurance company, or employer health plan, or their business associates, those entities who access PHI on behalf of the covered entity.
What Is the HIPAA Privacy Rule?
The Privacy Rule is the part of HIPAA that protects PHI through limiting who can access it, how it is used, and providing individuals with rights relating to their PHI.
What Is the HIPAA Security Rule?
The Security Rule is the part of HIPAA that covers how electronic creation, storage, use, and disclosure of PHI must be done to ensure the privacy of PHI.
What Are My HIPAA Compliance Requirements?
When HIPAA applies, the entity is expected to comply with HIPAA’s broad range of requirements. Key compliance requirements include providing a notice of privacy practices, naming a compliance officer responsible for complying with HIPAA, establishing policies and procedures, conducting a risk assessment, and entering into necessary agreements, such as business associate agreements. See our detailed explanation, HIPAA and Employee Benefits: The Basics of Compliance.
Spilling Secrets: Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk [Podcast, Video]
This week, on our Spilling Secrets podcast series, our panelists discuss the current status of non-compete agreements across the nation.
Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk
Non-compete legislation is evolving rapidly at the state level, with new laws taking effect soon in Arkansas, Kansas, Virginia, and Wyoming. Looking ahead, pending bills in over a dozen states could reshape how employers approach restrictive covenants.
In this episode, Epstein Becker Green attorneys Peter A. Steinmeyer, Daniel R. Levy, David J. Clark, and Carolyn O. Boucek discuss the new and proposed state non-compete laws and their implications for employers, as well as alternative tools that can be used to address these restrictions. From expanded protections for low-wage workers in Virginia to Kansas’s focus on non-solicit provisions, this episode offers actionable takeaways to help employers stay compliant.
Listen to Our Full-Length Podcast
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Employer Health Plans Must Report Number of Covered Children in New Mexico
Employers will be required to report, by July 1, 2025, the number of children in New Mexico covered by their employer-sponsored group health plans. The reporting requirement comes from regulations under the state’s Vaccine Purchasing Act, one of a handful of state laws that put surcharges on health insurers, group health plans, third-party administrators, or some combination, to fund states’ purchases of vaccinations for children in the relevant state.
Quick Hits
New Mexico’s Vaccine Purchasing Act requires employers that sponsor plans and health insurers to report the total number of children covered during the past year.
The purpose of the reporting is to help the state determine the quantity of vaccines to purchase.
The deadline to report the information is July 1, 2025.
Employers and health insurers must report to the New Mexico Office of the Superintendent of Insurance the total number of children in New Mexico who were enrolled in the plan during any part of the previous year and were under the age of nineteen as of the previous December 31. Not included are any children who are not residents of New Mexico, children who are members of a Native American tribe, and children who are enrolled in Medicaid or another medical assistance program administered by the state.
Each year, the state will estimate the amount of money needed to purchase, store, and distribute vaccines to all insured children in the state, including a reserve of 10 percent of the amount estimated.