Illinois Federal Judge Blocks DOL From Enforcing Termination, Certification Provisions in Trump DEI-Related EOs
On March 27, 2025, a federal judge for the U.S. District Court for the Northern District of Illinois temporarily blocked the U.S. Department of Labor (DOL) from enforcing portions of two provisions in President Donald Trump’s diversity, equity, and inclusion (DEI)-related executive orders (EO).
Quick Hits
A federal judge in Illinois issued a temporary restraining order blocking the DOL from enforcing certain provisions in two executive orders aimed at eliminating “illegal” DEI programs.
The judge found certain provisions are coercive and undefined, likely violating the First Amendment.
The ruling comes amid multiple ongoing legal challenges related to DEI initiatives.
U.S. District Judge Matthew F. Kennelly issued a temporary restraining order (TRO) prohibiting the DOL from enforcing a “termination provision” that requires federal agencies to terminate grants or contracts with organizations that promote DEI and a “certification provision” that requires grant recipients to certify under the False Claims Act (FCA) that they do not have DEI or diversity, equity, inclusion, and accessibility (DEIA) programs.
The judge found that the termination and certification provisions in President Trump’s EO 14151 and EO 14173 are likely to violate the First Amendment of the U.S. Constitution and cause irreparable harm to the plaintiff, the Chicago Women in Trades (CWIT), a nonprofit group that helps prepare women to earn jobs in the trades.
Judge Kennelly said that the termination provision was “coercive” and could suppress disfavored speech because its vagueness created a chilling effect on CWIT’s activities.
“Here, the government is not selectively funding some programs, but not others; it is indicating an entire area of programming that is disfavored as ‘immoral’ (as well as illegal) and threatening the termination of funding unless grantees bring their conduct into line with the government’s policy agenda,” Judge Kennelly wrote in the decision.
The judge further found the certification provision, which requires grant recipients to certify they do not operate any DEI programs that “violate any applicable Federal antidiscrimination laws,” is problematic because the EO does not clearly define what constitutes “illegal” DEI activities and because its references to “programs promoting DEI” targets constitutionally protected speech there is a likely a First Amendment violation.
Notably, the court limited its ruling on the termination provision only to the plaintiff, CWIT, rather than issuing a nationwide injunction. However, the certification provision does apply nationwide but only to those being issued by the DOL and not all federal agencies.
The ruling comes just less than two weeks after the U.S. Court of Appeals for the Fourth Circuit, in a similar lawsuit, granted the government’s request to stay a nationwide preliminary injunction that had blocked the termination and certification provisions and a provision directing the attorney general to enforce civil rights laws against DEI programs in the private sector.
Following the Fourth Circuit’s stay of the nationwide preliminary injunction, CWIT sought an immediate TRO in its lawsuit. The group argued the stay created renewed urgency to stop the DOL from cutting its federal funding unless it “cease[s] all diversity, equity, inclusion and accessibility activities” and “scrub[s] all diversity, equity, and inclusion initiatives and related language from its programming.”
In addition to the CWIT case and the Maryland case, which is led by the National Association of Diversity Officers in Higher Education, civil rights groups led by the National Urban League have filed another legal challenge in the U.S. District Court for the District of Columbia. The groups are also seeking to block several provisions of EO 14151 and EO 14173, in addition to EO 14168, which defines sex as binary for purposes of federal policy. The D.C. court held a hearing on the group’s motion for preliminary injunction on March 19, 2025.
Next Steps
The TRO in the CWIT case is limited to the DOL, but its reasoning suggests that the judge may issue a broader preliminary injunction. The DEI-related EOs have created uncertainty for employers over what types of programs the government will consider to be “illegal” DEI programs and sparked several legal challenges. Inconsistent rulings in the federal courts have added to the uncertainty, and the possibility remains that the cases or issue of whether the DEI-related EOs are constitutional could ultimately land before the Supreme Court of the United States. The outcome of the cases will have far-reaching implications for employers and the promotion of programs meant to foster diversity in the workforce.
Virginia’s Governor Vetos AI Bill
On March 24, 2025, Virginia’s Governor vetoed House Bill (HB) 2094, known as the High-Risk Artificial Intelligence Developer and Deployer Act. This bill aimed to establish a regulatory framework for businesses developing or using “high-risk” AI systems.
The Governor’s veto message emphasized concerns that HB 2094’s stringent requirements would stifle innovation and economic growth, particularly for startups and small businesses. The bill would have imposed nearly $30 million in compliance costs on AI developers, a burden that could deter new businesses from investing in Virginia. The Governor argued that the bill’s rigid framework failed to account for the rapidly evolving nature of the AI industry and placed an onerous burden on smaller firms lacking large legal compliance departments.
The veto of HB 2094 in Virginia reflects a broader debate in AI legislation across the United States. As AI technology continues to advance, both federal and state governments are grappling with how to regulate its use effectively.
At the federal level, AI legislation has been marked by contrasting approaches between administrations. Former President Biden’s Executive Orders focused on ethical AI use and risk management, but many of these efforts were revoked by President Trump this year. Trump’s new Executive Order, titled “Removing Barriers to American Leadership in Artificial Intelligence,” aims to foster AI innovation by reducing regulatory constraints.
State governments are increasingly taking the lead in AI regulation. States like Colorado, Illinois, and California have introduced comprehensive AI governance laws. The Colorado AI Act of 2024, for example, uses a risk-based approach to regulate high-risk AI systems, emphasizing transparency and risk mitigation. While changes to the Colorado law are expected before its 2026 effective date, it may emerge as a prototype for others states to follow.
Takeaways for Business Owners
Stay Informed: Keep abreast of both federal and state-level AI legislation. Understanding the regulatory landscape will help businesses anticipate and adapt to new requirements.
Proactive Compliance: Develop robust AI governance frameworks to ensure compliance with existing and future regulations. This includes conducting risk assessments, implementing transparency measures, and maintaining proper documentation.
Innovate Responsibly: While fostering innovation is crucial, businesses must also prioritize ethical AI practices. This includes preventing algorithmic discrimination and ensuring the responsible use of AI in decision-making processes.
USCIS Begins Announcing H-1B Registration Selections for FY 2026
U.S. Citizenship and Immigration Services (USCIS) has begun notifying petitioners of selected registrations for this year’s H-1B cap lottery. This marks a pivotal step in the FY 2026 H-1B visa process, as registrants who have been selected are now eligible to proceed with filing their H-1B cap-subject petitions on April 1 (earliest date).
The H-1B program remains one of the most sought-after avenues for U.S. employers to hire highly skilled foreign professionals in specialized fields such as technology, engineering, health care, and others. This year’s process follows the electronic registration system implemented by USCIS, which streamlines the initial stage of the H-1B lottery by allowing employers to submit registrations electronically for a chance to be considered in the cap selection.
For those whose registrations have been selected, the next step is to prepare and submit a complete H-1B petition to USCIS within the designated filing period. Petitioners are encouraged to ensure that all required documentation is accurate and submitted in a timely manner to avoid delays or denials.
For those whose registrations were not selected, USCIS may hold additional lotteries if the agency determines that it has not received enough petitions to meet the annual H-1B cap. Petitioners should monitor updates from USCIS in the coming months.
Employers and registrants may review their accounts on the USCIS online portal to check the status of their registrations. Notifications of selection are being issued electronically, and selected registrants will see their status updated to “Selected.” Those who have not been selected will see a status of “Not Selected” once the selection period has concluded.
The H-1B visa process is an opportunity for U.S. employers to address skills gaps and access global talent, but it is also a highly competitive process. Those with questions about preparing a petition or navigating next steps should consider consulting with an experienced immigration attorney or advisor to ensure compliance and maximize their chances of success.
For more information about the H-1B program and updates from USCIS, visit the official USCIS H-1B Cap Season webpage.
McDermott+ Check-Up: March 28, 2025
THIS WEEK’S DOSE
Senate Confirms FDA, NIH Nominations, Advances CMS Nomination. The Senate confirmed US Food and Drug Administration (FDA) Commissioner Martin Makary and National Institutes of Health (NIH) Director Jayanta Bhattacharya, and the Senate Finance Committee advanced Mehmet Oz’s nomination as Centers for Medicare & Medicaid Services (CMS) administrator to the full Senate.
House Oversight Committee Discusses Government Reform Legislation. The committee advanced three bills related to government reorganization, the Federal Employees Health Benefits Program, and pandemic response.
CBO Projects US Will Reach Debt Limit in August or September 2025. The Congressional Budget Office (CBO) estimate will factor into the timing of a budget reconciliation package, as Republican leaders appear to be in agreement to include a debt limit increase in that forthcoming package.
HHS Announces Reorganization. The US Department of Health and Human Services (HHS) plans to eliminate 10,000 employees and consolidate multiple agencies.
President Trump Makes Additional Healthcare Nominations. Nominated positions include CDC director, HHS inspector general, HHS assistant secretary for health, and HHS assistant secretary for the Administration for Children and Families.
CONGRESS
Senate Confirms FDA, NIH Nominations, Advances CMS Nomination. On March 25, 2025, the Senate confirmed Martin Makary, MD, as the next FDA commissioner by a 56 – 44 vote. Sens. Durbin (D-IL), Hassan (D-NH), and Shaheen (D-NH) were the sole Democrats to vote yes, along with all Republicans. Jayanta Bhattacharya, MD, was also confirmed as the next NIH director by a 53 – 47 party line vote. The Senate Finance Committee advanced the nomination of Mehmet Oz, MD, to be CMS administrator by a 14 – 13 party line vote. Oz’s full Senate confirmation vote could be as early as next week, and he is expected to be confirmed.
House Oversight Committee Discusses Government Reform Legislation. The markup included discussion of nine bills, three of which pertained to healthcare and the federal workforce and advanced out of the committee:
H.R. 1295, the Reorganizing Government Act of 2025, would renew and extend through December 2026 the president’s authority to propose a government reorganization plan that Congress must consider via an up or down vote on a joint resolution of approval within 90 calendar days.
Passed 23 – 20 along party lines, with Republicans voting in support.
H.R. 2193, the FEHB Protection Act of 2025, would require federal agencies to verify that an employee is eligible to add a family member to their Federal Employees Health Benefits (FEHB) Program plan.
Passed 29 – 15, with support from Republicans as well as Reps. Connolly (D-VA), Lynch (D-MA), Brown (D-OH), Min (D-CA), Norton (D-DC), and Subramanyam (D-VA).
H.R. 2277, the Federal Accountability Committee for Transparency Act of 2025, would extend the Pandemic Response Accountability Committee through December 2026 and rename it the Fraud Prevention and Accountability Committee.
Passed unanimously, 44 – 0.
Links to all bills discussed during the markup can be found here.
CBO Projects US Will Reach Debt Limit in August or September 2025. The CBO “X date” projection is that the United States will default on its debt in August or September 2025 if the debt limit remains unchanged. If the government’s borrowing needs are greater than CBO projections, the debt limit could be reached as early as May or June 2025. Republicans aim to raise the debt limit as part of the reconciliation process in the coming months, but if a reconciliation package is not enacted by the X date, separate legislation may be required to raise the debt limit. Legislation outside the reconciliation process would require support from Democrats to pass. The US Department of the Treasury is expected to release its own X date estimate in May 2025.
ADMINISTRATION
HHS Announces Reorganization. In response to the executive order on the Department of Government Efficiency (DOGE) Workforce Optimization Initiative, HHS announced a “dramatic restructuring” that includes the elimination of 10,000 employees. This follows the voluntary departure of 10,000 employees that has already occurred. Taken together, these two workforce reductions will shrink HHS by 25% to 62,000 employees. The agency projects that the reorganization will save $1.8 billion and make the agency more efficient.
Major actions of the restructuring plan include:
Consolidating 28 divisions into 15, eliminating five of the 10 regional offices, and centralizing core administrative functions.
Eliminating 10,000 workers, including 3,500 employees from the FDA; 2,400 employees from the Centers for Disease Control and Prevention (CDC); 1,200 employees from the NIH; and 300 employees from CMS.
Creating a new Administration for a Healthy America subdivision, which will combine the Office of the Assistant Secretary for Health, the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration (SAMHSA), the Agency for Toxic Substances and Disease Registry, and the National Institute for Occupational Safety and Health.
Moving programs for older adults from the Administration for Community Living to other agencies, including CMS, the Assistant Secretary for Planning and Evaluation, and the Administration for Children and Families (ACF).
Read the press release here, and the fact sheet here.
President Trump Makes Additional Healthcare Nominations. After the White House abruptly withdrew Dave Weldon’s nomination for CDC director, President Trump nominated acting CDC director Susan Monarez, PhD, to be the permanent director. She previously worked as deputy director of the Advanced Research Projects Agency for Health. Additional HHS nominations include:
HHS inspector general: Thomas March Bell, general counsel for House Republicans.
HHS assistant secretary for health: Brian Christine, MD, urologist.
HHS assistant secretary for ACF: Alex Adams, director of the Idaho Department of Health and Welfare.
QUICK HITS
Senate Finance Democrats Release Report on MA Marketing Tactics. The report found that Medicare Advantage (MA) plans are increasingly using marketing strategies to enroll beneficiaries, and includes eight recommendations to increase oversight of these actions.
Senate Democrats Hold Forum on NIH Research Cuts. The forum, hosted by Sens. Baldwin (D-WI) and Welch (D-VT), featured a panel of researchers, patients, and former NIH Director Monica Bertagnolli, MD. Discussion focused on how cuts or delays of NIH research could harm cancer and Alzheimer’s research.
HHS Cancels $12 Billion in State Infectious Disease, Substance Use Grants. Congress appropriated the now-cancelled CDC and SAMHSA state grants through September 2025 during the COVID-19 pandemic. The grants focused on infectious disease tracking, mental health services, and substance use disorder treatment. House Appropriations Committee Ranking Member DeLauro (D-CT) criticized the cancellations.
Department of Justice Launches Anticompetitive Regulations Task Force. As part of the president’s deregulatory initiative, the task force aims to eliminate anticompetitive state and federal laws and regulations, including in the healthcare sector. Public comments to support the task force’s efforts are due May 26, 2025.
BIPARTISAN LEGISLATION SPOTLIGHT
The Bipartisan Senate 340B Working Group announced the addition of Sens. Kaine (D-VA), Mullin (R-OK), and Hickenlooper (D-CO). They join Sens. Moran (R-KS), Baldwin (D-WI), and Capito (R-WV). The new additions replace former Sens. Stabenow (D-MI) and Cardin (D-MD), who retired, and Sen. Thune (R-SD), who stepped back from the working group when he became Senate majority leader. Last Congress, the working group released a conceptual discussion draft and request for information on proposed changes to the 340B program. It is now completing its review of stakeholder feedback with the intention of releasing a formal legislative draft.
NEXT WEEK’S DIAGNOSIS
The House and Senate are both in session next week. Republicans will continue conversations on a reconciliation strategy, as they aim to strike a deal on a unified budget resolution before the Easter recess in mid-April. A Senate vote on a unified budget resolution could occur as early as next week, and Senate nomination hearings and confirmation votes are expected to continue. The Senate Judiciary Committee will discuss drug patent legislation. The House Energy and Commerce Committee has a busy week with a Health Subcommittee hearing on over-the-counter monograph drugs, an Oversight and Investigations Subcommittee hearing on cybersecurity vulnerabilities in legacy medical devices, and an expected full committee markup. Both the Inpatient Prospective Payment System (IPPS) proposed rule and the final rate notice for MA and Part D plans are expected in early April 2025. Read our previews for the IPPS proposed rule here and the final rate notice here.
EU Platform on Sustainable Finance Focuses on Usefulness of Taxonomy in Response to European Commission Proposal
On the 26 March 2025, the EU Platform on Sustainable Finance (“Platform”) responded to the European Commission’s call for evidence on the draft delegated regulation amending the Taxonomy Delegated Acts[1] (the “Taxonomy”).
The Platform welcomes many of the proposed amendments and notes that several of the Platform’s recommendations from their February 2025 report on the simplification of Taxonomy reporting has been taken into consideration. However, despite this positivity, the Platform has also flagged some serious concerns with respect to the European Commission’s proposed changes to reduce the scope of Taxonomy reporting, as set out in its “Omnibus” proposals to streamline the Corporate Sustainability Reporting Directive (“CSRD”).
The Platform considers that reducing the scope of the current CSRD requirements not only results in the loss of specific Taxonomy data, but also reduces the effectiveness of the Taxonomy generally in the market. As a result, the Platform has proposed a number of updates in relation to the draft regulation, including:
introducing a regime for all companies to report partial Taxonomy-alignment;
clarifying the materiality threshold to ensure that it applies to cumulative exposure and not individual economic activities;
reporting for non-SME companies below the 1,000-employee threshold should be focused on the most essential standards (including Taxonomy-alignment); and
postponing trading books, fees and commission as key performance indicators for banks to 2027.
Additionally, the Platform has also recommended that additional guidance could be issued to support simplifying the Taxonomy’s implementation and process.
Finally, the Platform recommends some form of mechanism to be introduced to allow for responses to Taxonomy-related queries to be dealt with in real time.
[1] The regulation proposed by the Commission contains amendments the Taxonomy Disclosures Delegated Act ((EU) 2021/2178), the Taxonomy Climate Delegated Act ((EU) 2021/2139) and the Taxonomy Environmental Delegated Act ((EU) 2023/2486).
Europe – Pay Transparency Directive: Preparing for the Great Unknown?
Over the last few months, we have done a lot of sessions with clients on the Pay Transparency Directive. Chief among the questions that inevitably comes up is implementation of the Directive in the different Member States. Clients wonder if and how they can prepare for June 2026 when – as per usual – most Member States are nowhere near presenting even draft legislation to translate the Directive into national legislation.
Our response to this entirely sensible question is always the same: while we will of course track local developments and keep you updated, please do not wait until there is more clarity from national legislators to take action on this topic. You don’t have to know about every nut and bolt of the finished product to know enough to start your preparation, especially as the Directive does set out very clear pointers on the likely direction of travel.
One of the main principles of the Directive is that Member States should take the necessary measures to ensure that “employers have pay structures ensuring equal pay for equal work or work of equal value”. These pay structures should be based on a job evaluation scheme which considers skills, effort, responsibility and working conditions (and, if appropriate, any other factors which are relevant to the specific job or position). There is no chance that those key indicators will be altered materially pre-implementation – while it is possible that some states may add further considerations, that will almost certainly be by way of illustration or expansion of those criteria, not variation of them. Making sure that the organisation has the right structures and schemes in place and determining the pay gaps in the organisation on this basis is a project that will likely take a couple of months, which does not leave an awful lot of time to remedy any gaps above 5% that would come out of the analysis.
And yes, the Directive does look to Member States to take the necessary measures to ensure that “analytical tools or methodologies are made available to support and guide the assessment and comparison of the value of work in accordance with the [above] criteria”. But in the current political climate, where even European Commission president Ursula von der Leyen has announced a drive for de-regulation, we do not expect that the Member States will be demonstrating excessive zeal when implementing this provision. Rather we expect that those which are already quite advanced on this topic – e.g. Spain, which has a public on-line job evaluation tool – will maintain what’s already in place, whereas those less prepared Member States (which is the large majority) will likely leave it at the level of the principles set out by the Directive, without much more.
The first Member States that have issued draft legislation seem to confirm this prediction:
Sweden’s existing legislation is already in line with the Directive’s requirements, requiring employers to conduct annual reviews of equal jobs and jobs of equal value. Under the existing legislation, companies with 10 or more employees must document the salary review in writing, including specific measures to address any identified pay gap issues, while companies with 25 or more employees must also produce annual equality plans. The draft legislation to transpose the Directive is in fact a set of amendments to existing legislation:
As per the Directive, employers must provide information to job applicants about the initial salary or range for the position. Sweden adds the obligation to offer information on any relevant collective bargaining agreement provisions on salary. Answering a question we also get quite often, the Swedish draft Bill specifies that this information does not need to be included in the job postings but should be provided in reasonable time to allow for an informed negotiation on pay. In line with the Directive, employers cannot ask prior salary history.
Employers must inform employees about the “standards and practices” for wages, to help employees understand the annual equal pay salary reviews being conducted.
Also in line with the Directive, employees must have rights to information on their individual pay level and average pay levels for workers performing equal work, broken down by gender.
Employers with 100 or more employees must report gender pay gaps during the calendar year for the overall workforce to the Equality Ombudsman, who will publish this information. Employers must also report to the Ombudsman pay gaps by groupings of employees performing equal work, explaining differences of 5% or more with objective reasons or actions to be taken.
Finally, the annual equal pay salary analysis must also include a comparison between women’s and men’s pay progression in connection with parental leave and pay progression for employees who perform equal work or work of equal value, compared to employees who have not taken a corresponding period of leave. This provision goes beyond Directive requirements, which only ask that family leaves be considered as part of a joint pay assessment (the further analysis imposed if the annual pay gap report shows a pay gap of 5% upwards in any given category).
Ireland’s draft bill is less ambitious (though all credit to them for at least having started) as it only entails a partial implementation of the Directive. The draft Bill has a wider scope than the transposition of the Directive and includes two provisions relating to pay transparency:
It requires employers to provide information about salary levels or ranges in the job advertisement. This requirement is slightly more restrictive than the Directive, which does not state that this information must be published (already) in the job advert. It is not clear in this stage exactly how detailed the information on pay range will need to be.
In line with the Directive, the second measure prohibits employers from asking job applicants about their own pay history or their current rate of pay.
In Poland, quite interestingly, Members of Parliament presented in December 2024 their own draft Bill, not waiting for the results from the governmental working group tasked with preparation for the implementing law. In February, the Polish Parliament (by a scarce majority of votes of 229 to 201 and against the majority of Ministries and institutions which commented upon on the draft Bill) decided to proceed with this draft while the other is in the early preparatory stages. The current draft focuses on implementing only parts of the Directive focused on:
pay transparency: salaries and salary levels will not be confidential (no exceptions), and employees will have the right to request information on their individual salary levels and average salary levels; employer will not be able to prohibit or prevent an employee from disclosing information about their salary (not even if such disclosure may hurt business interest and is not necessarily focused on ensuring equal pay),
pay transparency in recruitment: the employer, publishing information on an open job position, shall identify the proposed level of salary, indicating its minimum and maximum amount; similarly to Ireland, the employer is required to publish salary proposals in the “information on possibility to hire an employee on a specific job position” (which we understand to mean the job advertisement), and there is no flexibility as to how and when this information is to be provided to the candidate.
pay progression information: employer shall provide the employee with access to the criteria used to determine employee salary and pay progression; such criteria must be objective and gender-neutral; the draft Bill suggests that employers with fewer than 50 employees “may be released from this obligation”. It is not, however, clear by whom.
new penalties will be imposed on employers in Poland for not informing employees of their salary level when requested, for not publishing information on salary in job advertisements and for employing an employee at a salary lower than stipulated in the job posting. This raises a number of questions, e.g. what if the salary is lower because the parties agreed to proceed with a part-time employment or to a reduction in scope of responsibilities? Will this still be a punishable offence?
The draft Bill is rather short and it does not touch upon sensitive topics such as job evaluation, objective or gender-neutral criteria for differentiation of salaries, or gender pay gap reporting. These matters are expected to be comprehensively regulated only in the governmental Bill, which is still a “work in progress” and not expected any time soon. It is fair to say that no guidance may be taken from the draft Bill as proposed, and at places it is actually quite confusing.
Finally, in Germany, the interim Minister for Family, Senior Citizens, Women and Youth, Lisa Paus, has apparently announced in a private meeting a couple of months ago that Germany will likely go for continued flexibility in setting categories of workers without imposed pay evaluation systems. Germany will also focus heavily on the Right to Information, which already exists but will be strengthened in the framework of the transposition process. This information is however not yet confirmed on the interim Minister’s website. At the moment, it is unclear whether this approach will be continued because the Green Party, of the which the interim Minister is a member, will no longer form part of the new government. It is uncertain what the priorities of the new government will be when implementing the Directive. We will keep you updated.
In summary, only four Member States have allowed us a view into their thinking on Pay Transparency Directive implementation, but in none of the four cases is the output of such a nature that it should prevent companies from making a start on the biggest chunk of the work, around fair job evaluation and the assessment and analysis of the gaps as they present themselves on the basis of such job evaluation. The time is now, more than ever.
Wyoming’s New Non-Compete Law Starts in July: Employers Need to Look at Their Agreements Now
Takeaways
Effective 07.01.25, Wyoming law significantly restricts how and when employers can use covenants not to compete and renders most new non-compete agreements unenforceable.
The law allows exceptions for the sale or purchase of a business, trade secret protection, the recovery of training and relocation expenses, and executives and key professional staff.
The law voids non-compete provisions for physicians, giving them full rights to communicate their new practice location and information to patients with rare disorders without risk of litigation.
Article
On Mar. 19, 2025, Wyoming Governor Mark Gordon signed Senate Bill 107 into law, fundamentally reshaping the landscape for non-compete agreements in a major legislative move that will impact employers across Wyoming. Effective July 1, 2025, the new law significantly restricts how and when employers can use covenants not to compete and makes most traditional non-compete agreements executed on or after the effective date unenforceable.
What Has Changed?
Previously, Wyoming allowed employers considerable flexibility in drafting non-compete agreements. Under the new statute, non-compete agreements that restrict an employee’s ability to earn a living, either in skilled or unskilled labor, are generally void.
Important Exceptions
While the general rule is clear — non-competes are mostly unenforceable — there are important exceptions employers must understand:
1. Sale or Purchase of a Business: Non-competes remain valid when they accompany the sale or transfer of a business or its assets. This preserves protections for buyers and sellers in significant business transactions.
2. Trade Secrets Protection: Wyoming businesses can still protect legitimate trade secrets through narrowly tailored non-compete agreements. Importantly, these agreements must strictly adhere to statute. Wyo. Stat. § 6‑3‑501(a)(xi) defines “trade secret” as “the whole or a portion or phase of a formula, pattern, device, combination of devices or compilation of information which is for use, or is used in the operation of a business and which provides the business an advantage or an opportunity to obtain an advantage over those who do not know or use it.” Employers should carefully draft language reflecting this precise statutory definition.
3. Recovery of Training and Relocation Expenses: Employers can recover expenses incurred from training, education, or relocating employees, provided clear terms are outlined:
Up to 100% if employment lasted less than two years
Up to 66% if employment was between two and three years
Up to 33% if employment was between three and four years
4. Executives and Key Professional Staff: Non-compete agreements can remain valid for “[e]xecutive and management personnel and officers and employees who constitute professional staff to executive and management personnel.” This phrase is not defined in the statute. Employers should carefully consider which roles legitimately fit within this category and craft agreements accordingly.
Special Rules for Physicians
Wyoming’s legislature gave special attention to non-compete agreements involving physicians. Any provision that restricts a physician’s practice after their employment termination is now void. Although all other provisions of their agreements remain enforceable, the new law gives physicians full rights to communicate their new practice location and information to patients with rare disorders (as defined by the National Organization for Rare Disorders) without risk of litigation. This specific patient-focused exception reflects public policy prioritizing patient care continuity over contractual restrictions.
Applicability of the New Law
The statute applies only prospectively and only covers contracts executed on or after July 1, 2025. Existing non-compete agreements, and all those signed before July 1, 2025, will remain unaffected and enforceable according to their original terms.
Recommended Employer Action
Given this significant legislative shift, employers must carefully review and update employment agreements to comply with Wyoming’s new legal landscape. It is critical for businesses to:
Review and Revise: Carefully audit your existing employment agreement templates and policies to ensure compliance with the new law before July 2025.
Identify Exceptions: Evaluate which roles within your company may legitimately fall under permitted exceptions and update specific contract language accordingly.
Collaborate with Employment Counsel: Seek strategic advice from experienced employment counsel to mitigate risks, ensure full compliance, and protect your company’s interests.
Are the Days of OSHA’s Rulemaking and Reliance on Consensus Standards Numbered?
Since Representative Andy Biggs (R-AZ) first introduced the “Nullify the Occupational Safety and Health Administration Act” or “NOSHA Act” (H.R. 86), there has been immense speculation about the future of the Occupational Safety and Health Administration (OSHA). The inauguration of President Donald Trump served to increase scrutiny of the agency, and actions by the Department of Government Efficiency (DOGE) have caused speculation to run rampant.
The focus on the NOSHA Act, what the administration might do, and how DOGE might impact OSHA may be distractions from a bigger threat facing OSHA and the way it regulates workplace health and safety.
Quick Hits
The introduction of the “Nullify the Occupational Safety and Health Administration Act” bill by Representative Biggs (R-AZ) has sparked significant speculation about the future of OSHA, especially under the Trump administration.
Justice Thomas’s dissent to the denial of certiorari in Allstates Refractory Contractors, LLC hinted at a potential Supreme Court shift regarding the constitutionality of delegations of rulemaking authority.
On March 26, 2025, the Supreme Court heard arguments in consolidated cases challenging the Telecommunications Act of 1996’s delegation of authority to the FCC and USAC that could have broader implications for how administrative agencies such as OSHA operate.
Justice Clarence Thomas’s dissent to the denial of certiorari in Allstates Refractory Contractors, LLC, v. Su at the end of the 2023–2024 term of the Supreme Court of the United States portended a potential change to the manner that the delegation of rulemaking authority might be addressed by the Court. Specifically, Justice Thomas was concerned about whether this broad grant of rulemaking authority violated Article I, Section 1 of the U.S. Constitution, which states:
All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
This term, the Court has taken up a pair of cases relating to the Telecommunications Act of 1996, the Universal Service Fund (USF), and the Universal Service Administrative Company (USAC), which is focused on whether the legislation violates Article I, Section 1 of the Constitution.
The Telecommunications Act of 1996 was the first substantive revision of the Communications Act of 1934 post–deregulation and modernization of American telecommunications markets and technologies. Local markets were opened to competition, and though there always had been funding for universal services, it developed a new system for funding those universal services. The revisions, per the Federal Communications Commission (FCC), set forth five principles:
“Promote the availability of quality services at just, reasonable and affordable rates for all consumers”
“Increase nationwide access to advanced telecommunications services”
“Advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in urban areas”
“Increase access to telecommunications and advanced services in schools, libraries and rural health care facilities”
“Provide equitable and non-discriminatory contributions from all providers of telecommunications services for the fund supporting universal service programs”
In addition, the Telecommunications Act of 1996 directed the FCC to formalize what services must be provided to receive support from the USF, expanded the number of companies required to pay into the fund, and created USAC. USAC is described by the FCC as “an independent, not-for-profit corporation designated as the administrator of the federal Universal Service Fund by the FCC.”
The Supreme Court, on March 26, 2025, heard argument in Federal Communications Commission v. Consumers’ Research, No. 24-354, and Schools, Health & Libraries Broadband Coalition v. Consumers’ Research, No. 24-422. Both cases relate to the Fifth Circuit Court of Appeals’ en banc decision in Consumers’ Research v. Federal Communications Commission that “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to USAC violates the [Constitution].”
More specifically, the Fifth Circuit Court of Appeals stated:
American telecommunications consumers are subject to a multibillion-dollar tax nobody voted for. The size of that tax is de facto determined by a trade group staffed by industry insiders with no semblance of accountability to the public. And the trade group in turn relies on projections made by its private, for-profit constituent companies, all of which stand to profit from every single tax increase. This combination of delegations, subdelegations, and obfuscations of the USF Tax mechanism offends Article I, § 1 of the Constitution.
While Justice Thomas, in Allstates Refractory, certainly suggested that a majority of the Court was of a like mind with respect to the delegation of rulemaking authority granted to administrative agencies, like OSHA, he did not address the delegation of rulemaking to “nonprofits,” such as the American National Standards Institute (ANSI), the American Society of Mechanical Engineers (ASME), and other organizations that publish the consensus standards cited by OSHA in its regulations and when applying the Occupational Safety and Health (OSH) Act’s “General Duty Clause.”
Given his description of the rulemaking authority contained within the OSH Act as being among the broadest to any administrative agency, it is conceivable that a ruling that confirms the Fifth Circuit’s decision in Federal Communications Commission v. Consumers’ Research, would compel Congress to act and actually legislate the workplace health and safety regulations OSHA would enforce. Arguably, reliance on “national standards,” which is built into the OSH Act, would have to be replaced with rules contained within legislation, thereby compelling Congress to have a much more active role with respect to workplace health and safety.
Dismissal by Accident – the Serious Point in a Comedy of Errors (UK)
In 2020, Ms Korpysa was told that because of the COVID lockdown, her workplace would be closing. She thought that meant that she was being dismissed, and asked her employer, Impact Recruitment Services Limited, for details of her contract, accrued holiday pay entitlement and (said Impact) her P45. Impact took that as meaning that she was resigning, and based on that belief it processed steps to take her off the payroll and send her the P45 it said she had requested. She in turn took that as confirmation of her assumed dismissal, even though that was not Impact’s intention, and started unfair dismissal proceedings.
In what must have been one of those is-one-coffee-enough mornings, the Employment Tribunal was therefore faced with deciding the rights and wrongs of a termination of Korpysa’s employment caused by neither party giving notice but each believing that the other had.
Having determined that Korpysa had not in fact asked for her P45, the ET concluded relatively quickly that Impact’s sending it to her did constitute a dismissal effective from that date. The next step in assessing the statutory fairness of that dismissal was then to look at the reason for it. Was it one of the permitted reasons in section 98 Employment Rights Act 1996, because if not, Impact was surely sunk. Korpysa argued that her employer could not possibly rely on any of those statutory reasons because logically you could not claim to have had a reason for something you did not think you were doing.
The ET agreed with that reasoning and upheld Korpysa’s unfair dismissal claim. On Impact’s appeal, however, the EAT was less sure. To construe “reason” as requiring a positive thought-process on the part of the employer went too far, it thought. The proper question was what had led to the termination of the employment, i.e. the factual causation of the dismissal, regardless of whether the employer had had any conscious role in it.
What had caused the employer here to act in a way constituting a dismissal of Korpysa was its genuine belief that she had quit. If she had, its conduct would have been entirely understandable and unobjectionable. Given that she had not, however, two further questions arose under ordinary unfair dismissal principles – first, did that belief fall within one of those permitted reasons in section 98 and second, if it did, had Impact acted reasonably in treating those circumstances as justifying that conduct?
The EAT accepted without too much debate that Impact’s genuine belief could in principle fall within the “some other substantial reason” category in section 98, so that was its first hurdle cleared relatively easily. But the next one was less obvious – had it acted reasonably?
Usually that means some sort of prior process, some warnings or at least a moment’s consultation with the employee, but strictly those are not steps required by black and white statute. They are just the moss or barnacles grown on to the statute by decades of case law and guidance. Even the bare bones of the Acas Code of Practice on disciplinary and grievance procedures are not mandatory. It is only an unreasonable failure to follow them which will generally be fatal to an employer’s defence. In the very rare circumstances where it is reasonable not to follow them (perhaps not least because nothing was further from your mind than a dismissal), then the employer may fight on.
What would an employer’s acting reasonably look like in these particular circumstances? The EAT sent that question back to the ET to look at again, so we cannot yet report here on whether Korpysa’s accidental dismissal was fair. At the same time, it offered the ET some thoughts of its own to chew on. Given that it was not alleged by Impact that Korpysa had said expressly that she was leaving, had it failed to take the steps that any reasonable employer would have taken in those circumstances to verify its understanding of Korpysa’s intentions? Might that have led to its being able to correct her own mistaken view that she had been dismissed at the time of the site closure?
These are obviously very unusual facts – an employee who thought she had been dismissed on the site closure when she hadn’t plus an employer which believed that she had resigned when she hadn’t, together leading to an actual dismissal on the date of issue of the P45 which neither party thought had happened at all. Nonetheless, there is a lesson to be taken by employers out of this mess – before rushing to take your employee off the payroll and issuing P45s etc., do just check. This is exactly the same caution as applies in any case where the employee’s intentions are not crystal clear. That is not just because they don’t make express reference to quitting or exactly what you can do with your job, as here, but also if they do use such terms but in circumstances where that might reasonably be suspected as not their true intention – in temper, under provocation or pressure, or just off their wheels through alcohol or significant mental ill-health. Sayings about gift-horses come very readily to mind, but it is best to resist that temptation. If in any doubt, ask.
New Bill Strengthens Protections for Federal Whistleblowers who Make Disclosures to Congress
On March 26, Senator Richard Blumenthal (D-CT) introduced the Congressional Whistleblower Protection Act of 2025. The bill strengthens protections for federal employee whistleblowers who make disclosures to Congress, expanding the types of whistleblowers covered and granting them the right to have their case heard in federal court if there are delays in administrative proceedings.
“This law is a significant step forward for federal employees,” said Stephen M. Kohn, founding partner of Kohn, Kohn & Colapinto and Chairman of the National Whistleblower Center. “Retaliation against whistleblowers who testify before Congress is unacceptable. This law is highly significant and should be passed quickly. It is absolutely necessary if Congress is serious about engaging in meaningful oversight.”
The bill ensures that whistleblowers are able to file an administrative complaint if their right to share information with Congress has been interfered with or denied. It expands the definition of qualified whistleblowers to include former employees, contractors, and job applicants.
Furthermore, the bill allows for whistleblowers to seek relief in federal court if corrective action is not reached within 180 days of filing a complaint.
Senator Blumenthal previously introduced the Congressional Whistleblower Protection Act during the last session of Congress.
“Whistleblowers must be protected against retaliation when they bravely reveal waste, fraud, and abuse,” Blumenthal stated when introducing the previous version. “This measure will strengthen safeguards for anyone reporting government misconduct and empower them to seek relief if they face retaliation. Congressional whistleblowers are essential to our democracy, and they deserve vigorous protection.”
The Congressional Whistleblower Protection Act is cosponsored by Senators Mazi Hirono (D-HI), Amy Klobuchar (D-MN), Edward Markey (D-MA), Bernie Sanders (I-VT), Adam Schiff (D-CA), Chris Van Hollen (D-MD), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).
Pennsylvania Teacher’s Union Faces Class Action over Data Breach
The Pennsylvania State Education Association (PSEA) faces a class action resulting from a July 2024 data breach. The proposed class consists of current and former members of the union as well as PSEA employees and their family members. The lawsuit alleges that the union was negligent and breached its fiduciary duty when it suffered a data breach that affected Social Security numbers and medical information. The complaint further alleges that the PSEA failed to implement and maintain appropriate safeguards to protect and secure the plaintiffs’ data.
The union sent notification letters in February 2025 informing members that the data acquired by the unauthorized actor contained some personal information within the network files. The letter also stated, “We took steps, to the best of our ability and knowledge, to ensure that the data taken by the unauthorized actor was deleted [. . .] We want to make the impacted individuals aware of the incident and provide them with steps they can take to further protect their information.” The union also informed affected individuals that they did not have any indication that the information was used fraudulently.
The complaint alleges “actual damages” suffered by the plaintiff related to monitoring financial accounts and an increased risk of fraud and identity theft. Further, the complaint states that “the breach of security was reasonably foreseeable given the known high frequency of cyberattacks and data breaches involving health information.”
In addition to a claim of negligence, the class alleges that the breach violates the Federal Trade Commission Act and the Health Insurance Portability and Accountability Act. The class is demanding 10 years of credit monitoring services, punitive, actual, compensatory, and statutory damages, as well as attorneys’ fees.
Parole Programs for Cuban, Haitian, Nicaraguan, and Venezuelan Nationals Terminated by DHS
On March 25, 2025, the U.S. Department of Homeland Security (DHS) published a notice in the Federal Register announcing the immediate termination of the Cuba, Haiti, Nicaragua, and Venezuela (CHNV) parole programs. As a result, approximately 532,000 individuals in the United States who were paroled under these programs will lose their parole authorizations and any associated benefits, including work authorizations, within thirty days of the date of publication of the notice, or by April 24, 2025.
Quick Hits
On March 25, 2025, the U.S. Department of Homeland Security (DHS) announced the immediate termination of the Cuba, Haiti, Nicaragua, and Venezuela (CHNV) parole programs, affecting approximately 532,000 individuals who will lose their parole and associated benefits by April 24, 2025.
The Trump administration has decided to end these programs, citing a lack of significant public benefit and inconsistency with foreign policy goals.
Because CHNV beneficiaries will lose ancillary benefits such as employment authorization, employers will need to reverify the work authorization of affected employees by the April 24, 2025, deadline.
Background
Parole allows noncitizens who may otherwise be inadmissible to enter the United States for a temporary period and for a specific purpose. Section 212(d)(5)(A) of the Immigration and Nationality Act authorizes the secretary of homeland security, at the secretary’s discretion, to “parole into the United States temporarily under such conditions as [the secretary] may prescribe only on a case-by-case basis for urgent humanitarian reasons or significant public benefit any alien applying for admission to the United States.”
The Biden administration implemented a temporary parole program for Venezuelan nationals in October 2022 to discourage irregular border crossings and later expanded the parole programs to include Cuban, Haitian, and Nicaraguan nationals in January 2023. The CHNV parole programs permitted up to 30,000 individuals per month from Cuba, Haiti, Nicaragua, and Venezuela to enter the United States for a period of up to two years. Until January 22, 2025, approximately 532,000 individuals arrived in the United States by air under the CHNV parole programs.
The Biden administration announced in October 2024 that it would not extend legal status for individuals permitted to enter the United States under the CHNV parole programs but encouraged CHNV beneficiaries to seek alternative immigration options. On January 20, 2025, President Donald Trump announced his intention to terminate the parole programs in Executive Order 14165, “Securing Our Borders.” Consistent with that executive order and the secretary of homeland security’s discretionary authority, Secretary Kristi Noem is now terminating the CHNV parole programs, having found the programs no longer “serve a significant public benefit, are not necessary to reduce levels of illegal immigration, … and are inconsistent with the Administration’s foreign policy goals.”
What This Means for Employers
According to the notice, any employment authorization derived through the CHNV parole programs will terminate on April 24, 2025. This will impact persons with Employment Authorization Documents (EADs) in the (c)(11) category. Individuals without a valid alternative basis to remain in the United States are expected to depart the country upon the termination of their paroles on April 24, 2025.
CHNV beneficiaries may have already updated their Form I-9s with EAD cards with a validity date beyond April 24, 2025. Employers are expected to reverify affected employees’ work authorizations by April 24, 2025, to ensure continued compliance with Form I-9 employment eligibility verification rules. However, identifying which employees are impacted by this change prior to the April 24, 2025, expiration date may be challenging, since the public interest parolee EAD category code (c)(11) is typically not entered in the I-9 form or other personnel records.
In the Federal Register notice, DHS indicated it may use the expedited removal (deportation) process for any CHNV beneficiaries who do not depart the United States or obtain another lawful status by April 24, 2025. Under sections 235(b)(1) and 212(a)(9)(A)(i) of the Immigration and Nationality Act, expedited removal orders may not be appealed, and those removed through such means are subject to a five-year bar on reentry to the United States.
A lawsuit challenging the termination of CHNV parole has been filed.