Tax Transparency and Data Privacy — Which Wins?
As tax authorities embrace new digital technologies, the issue of safeguarding citizens’ data privacy rights steps to the fore. Since the implementation of the EU General Data Protection Regulation (GDPR) in 2018, there has been a greater focus on data privacy from both the public and organisations. At the same time, the cooperative international effort to combat offshore tax evasion has been steadily increasing. Several information-sharing regimes have been conceived to allow tax authorities to share information globally relating to financial accounts and investments under Automatic Exchange of Information Agreements.
In J Webster v HMRC [2024] EWHC 530 (KB), Ms. Webster, a US citizen, brought a case against His Majesty’s Revenue and Customs (HMRC) regarding information sharing under the Foreign Account Tax Compliance Act. At the centre of this case stands the question of which wins — tax transparency or data privacy?
Automatic Exchange of Information (AEOI)
The United Kingdom shares information with foreign tax authorities under two specific regimes:
1. Foreign Account Tax Compliance Act (FATCA): The FATCA regime is US-specific. Financial institutions outside of the United States are required to provide the US tax authorities with information relating to the foreign financial accounts of US individuals. Information includes, for example, the individual’s name and address, account balance and amount of interest accrued.
2. Common Reporting Standard (CRS): Nicknamed “global FATCA” by commentators at its inception, the CRS requires the automatic exchange of financial account information between tax authorities globally. The information shared is largely the same as that under FATCA, with the addition of the date and individuals’ places of birth (in some cases).
In practice, financial institutions in the United Kingdom supply the required data to HMRC, which then provides it to the relevant tax authorities on an annual and automatic basis.
The GDPR
Data privacy in the United Kingdom is regulated by the UK GDPR (the retained version of the EU GDPR) and the Data Protection Act 2018. Under Article 4(1) of the UK GDPR, personal data means any information relating to an identified or identifiable natural person. There are seven key principles for processing personal data (found in Article 5, UK GDPR). Broadly, these require that personal data is: (i) processed lawfully, fairly and transparently, (ii) collected for specified, explicit and legitimate purposes only, (iii) limited to what is necessary for the purposes (minimisation), (iv) accurate, (v) not stored longer than necessary, and (vi) processed in a manner that ensures appropriate security of the data. Finally, the data controller must be responsible for and able to demonstrate compliance with the preceding six principles.
Importantly, personal data must only be transferred outside of the United Kingdom if the receiving countries have adequate levels of protection for data subjects in place or appropriate safeguards for the transfer of personal data (Article 46, UK GDPR).
So, Which Wins?
Ms. Webster argued that information sharing between tax authorities under the FATCA regime breached her data privacy and human rights. In summary, she claimed that there were no appropriate safeguards in place for the transfers by HMRC and that US law failed to provide adequate levels of protection. Additionally, the data transfers allegedly fell foul of the principle of proportionality, as bulk processing did not account for Ms. Webster’s personal circumstances — specifically, that Ms. Webster had no US tax obligations (having modest income in the United Kingdom and owning no assets or income in the United States).
Unfortunately, the central question of “which wins?” remains unanswered. The judgment focused more on questions of procedure than substance — for example, as argued by HMRC, whether the claim should have been brought via judicial review and was, therefore, an abuse of process.
However, it is not difficult to see some merit in Ms. Webster’s claim. The aims of FATCA and the CRS are clearly worthy, and tax transparency is important. However, since personal data is processed automatically and whether an individual poses any real risk of tax evasion is immaterial to that processing, it is unconvincing that the principles of proportionality and data minimisation are comfortably being met.
Information-sharing regimes have been challenged in other countries as well. For example, the Belgian Data Protection Authority has argued (in a decision that has since been annulled) that data exchanges under FATCA violate the EU GDPR since more information than necessary is shared and the purposes for the data transfers are insufficiently defined. The Slovakian Data Protection Authority also challenged FATCA on the grounds that the AEOI Agreement under which data transfers took place did not contain the necessary safeguards to transfer personal data to third countries.
It is widely agreed that the GDPR is far more comprehensive than US privacy laws — some might remember the highly publicised “Schrems II” case from 20201 where the Court of Justice of the European Union declared that the US privacy laws fail to ensure an adequate level of protection. Recent news about the US Treasury being hacked also inevitably raises concerns about the security of the personal data transferred, and with President Donald Trump’s firing of Democratic members of the Privacy and Civil Liberties Oversight Board since the beginning of his second term, more widespread privacy concerns now linger.
We will have to wait and see how the tension between tax transparency and data privacy culminates. A judgment that focuses on the merits of Ms. Webster’s concerns would bring us some much-needed answers. However, what is clear is that there is pressure on tax authorities to address concerns relating to the data privacy of individuals, which are not subsiding.
1 Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems and intervening parties, Case C-311/18.
Georgia Griesbaum contributed to this article
Update: Federal Judge Reinstates National Labor Relations Board (NLRB) Member (US)
President Donald Trump’s removal of Gwynne Wilcox, a Biden-appointed NLRB Member (which we discussed in a prior post), has been reversed by a federal judge. On March 6, 2025, U.S. District Court Judge Beryl Howell held that the President does not have the authority to terminate NLRB Members at will, and thus President Trump’s removal of Member Wilcox violated the law. Member Wilcox’s removal had caused the NLRB to lose a quorum of three Members, meaning that since January 28, 2025, the NLRB had been without the authority to decide cases. With her status restored, that authority also has now been restored.
That said, Member Wilcox’s status as a Board member is likely far from decided. The Trump Administration is likely to appeal the decision and may request a stay. And the legal battle over presidential authority appears to be ultimately destined for the United States Supreme Court.
We expect and will track additional changes at the NLRB under the Trump Administration.
FROM CORN DOGS TO COURTROOMS: Sonic’s Texts Might Cost More Than a Combo Meal
Quick update here for you. Have you ever received a text about a fast food deal you never signed up for? Usually, I receive these texts because I signed up for some deal, like a free milkshake or a discount. That is the trade-off. You get a coupon; in return, you let them send you marketing you can opt out of. Well, Plaintiff in this newly filed class action lawsuit says he has, and he is taking Sonic Drive-In to court over it. The lawsuit, filed in the United States District Court for the Western District of Oklahoma, accuses Sonic of sending promotional texts to consumers who had placed their numbers on the National DNC Registry. See Brennan v. Sonic, Inc., No. 5:25-CV-00280 (W.D. Okla. filed Mar. 4, 2025).
According to the Complaint, Plaintiff added his number to the DNC Registry on February 3, 2024. That should have stopped unsolicited marketing texts, but by March 6, Sonic was already sending him offers for grilled cheese and 99-cent corn dogs. The Complaint details texts sent on March 6, March 11, March 13, March 15, and March 20. Plaintiff claims he never provided his phone number to Sonic, never had a business relationship with them, and never opted into any rewards program. So how did Sonic get his number? Interesting…
The lawsuit argues that Sonic’s “impersonal and generic” messages, their frequency, and the lack of consent all suggest that Sonic used an automatic telephone dialing system (“ATDS”).
This is where things make me ponder. This is not Plaintiff’s first TCPA lawsuit. He has previously filed complaints against Pizza Hut, DirecTV, Meyer Corporation, and Transfinancial Companies. That is a stacked lineup of big-name defendants. That track record raises some interesting questions. Is Plaintiff an unlucky mass marketing recipient or something else at play here? Is this about stopping unlawful texts, or is Plaintiff turning TCPA enforcement into a side hustle? Either way, it puts Sonic in a tough spot. This is where Troutman Amin always steps up to the plate for stellar legal work.
Beyond the Plaintiff’s individual claims, this lawsuit covers a broader group of consumers who allegedly received these messages. The Complaint defines two classes. The DNC Registry Class includes those on the registry but still got texts. Additionally, the Autodialed Text Class covers anyone who received automated marketing texts from Sonic without providing written consent.
If the Court sides with Plaintiff, Sonic might find itself in a legal pickle that no amount of tots and milkshakes can fix—no pun intended. We’ll be sure to keep you posted.
TIME OUT!: NFL Team Tampa Bay Buccaneers Hit With Latest in A Series of Time Restriction TCPA Class Action
So TCPAWorld has been reporting on the clear trend of TCPA class action suits against companies (primarily retailers) that deploy text clubs and particularly those arising out of timing limitations in the TCPA and state statutes.
Well, the NFL’s Tampa Bay Buccaneers are the latest to fall victim to this trend with a new TCPA class action filed in Florida against the team’s ownership today.
Plaintiff Andrew Leech claims he was texted by the Buccaneers at 9:24 pm his time– he claims to live in Palm Beach County, Florida so not sure what happened there.
Plaintiff seeks to represent a class consisting of:
All persons in the United States who from four years prior to thefiling of this action through the date of class certification (1)Defendant, or anyone on Defendant’s behalf, (2) placed more thanone marketing text message within any 12-month period; (3) wheresuch marketing text messages were initiated before the hour of 8a.m. or after 9 p.m. (local time at the called party’s location)
Notably the Plaintiff does not say whether he agreed to be texted by the Buccaneers to begin with. As I have previously reported the TCPA’s timing regulations likely do NOT apply to consented calls, but there is very little case law on the issue.
The case is brought by the Law Offices of Jibrael S. Hindi– the same firm behind a number of similar timing cases. (He is apparently a Dolphins fan…)
Again until this trend abates companies deploying SMS need to be EXTREMELY cautious to assure timing limitations are complied with!
Tariffs: Force Majeure and Surcharges — FAQs
As we navigate a turbulent tariff landscape for manufacturers, we want to help you with some of the most frequently asked questions we are encountering right now as they relate to force majeure and price increases:
1. What are the key doctrines to excuse performance under a contract?
There are three primary defenses to performance under a contract. Importantly, these defenses do not provide a direct mechanism for obtaining price increases. Rather, these defenses (if successful) excuse the invoking party from the obligation to perform under a contract. Nevertheless, these defenses can be used as leverage during negotiations.
Force Majeure
Force majeure is a defense to performance that is created by contract. As a result, each scenario must be analyzed on a case-by-case basis depending on the language of the applicable force majeure provision. Nevertheless, the basic structure generally remains the same: (a) a listed event occurs; (b) the event was not within the reasonable control of the party invoking force majeure; and (c) the event prevented performance.
Commercial impracticability (Goods)
For goods, commercial impracticability is codified under UCC § 2-615 (which governs the sale of goods and has been adopted in some form by almost every state). UCC § 2-615 excuses performance when: (a) delay in delivery or non-delivery was the result of the occurrence of a contingency, of which non-occurrence was a basic assumption of the contract; and (b) the party invoking commercial impracticability provided seasonable notice. Common law (applied to non-goods, e.g., services) has a similar concept known as the doctrine of impossibility or impracticability that has a higher bar to clear. Under the UCC and common law, the burden is quite high. Unprofitability or even serious economic loss is typically insufficient to prove impracticability, absent other factors.
Frustration of Purpose
Under common law, performance under a contract may be excused when there is a material change in circumstances that is so fundamental and essential to the contract that the parties would never have entered into the transaction if they had known such change would occur. To establish frustration of purpose, a party must prove: (a) the event or combination of events was unforeseeable at the time the contract was entered into; (b) the circumstances have created a fundamental and essential change, and (c) the parties would not have entered into the agreement under the current terms had they known the circumstance(s) would occur.
2. Can we rely on force majeure (including if the provision includes change in laws), commercial impracticability, or frustration of purpose to get out of performing under a contract?
In court, most likely not. These doctrines are meant to apply to circumstances that prevent performance. Also, courts typically view cost increases as foreseeable risks. Official comment of Section 2-615 on commercial impracticability under UCC Article 2, which governs the sale of goods in most states, says:
“Increased cost alone does not excuse performance unless the rise in cost is due to some unforeseen contingency which alters the essential nature of the performance. Neither is a rise or a collapse in the market in itself a justification, for that is exactly the type of business risk which business contracts made at fixed prices are intended to cover. But a severe shortage of raw materials or of supplies due to a contingency such as war, embargo, local crop failure, unforeseen shutdown of major sources of supply or the like, which either causes a marked increase in cost or altogether prevents the seller from securing supplies necessary to his performance, is within the contemplation of this section. (See Ford & Sons, Ltd., v. Henry Leetham & Sons, Ltd., 21 Com.Cas. 55 (1915, K.B.D.).)” (emphasis added).
That said, during COVID and Trump Tariffs 1.0, we did see companies use force majeure/commercial impracticability doctrines as a way to bring the other party to the negotiating table, to share costs.
3. May we increase price as a result of force majeure?
No, force majeure typically does not allow for price increases. Force majeure only applies in circumstances where performance is prevented by specified events. Force majeure is an excuse for performance, not a justification to pass along the burden of cost increases. Nevertheless, the assertion of force majeure can be used as leverage in negotiations.
4. Is a tariff a tax?
Yes, a tariff is a tax.
5. Is a surcharge a price increase?
Yes, a surcharge is a price increase. If you have a fixed-price contract, applying a surcharge is a breach of the agreement.
That said, during COVID and Trump Tariffs 1.0, we saw many companies do it anyway. Customers typically paid the surcharges under protest. We expected a big wave of litigation by those customers afterward, but we never saw it, suggesting either the disputes were resolved commercially or the customers just ate the surcharges and moved on.
6. Can I pass along the cost of the tariffs to the customer?
To determine if you can pass on the cost, the analysis needs to be conducted on a contract-by-contract basis.
7. If you increase the price without a contractual justification, what are customers’ options?
The customer has five primary options:
1. Accept the price increase:
An unequivocal acceptance of the price increase is rare but the best outcome from the seller’s perspective.
2. Accept the price increase under protest (reservation of rights):
The customer will agree to make payments under protest and with a reservation of rights. This allows the customer to seek to recover the excess amount paid at a later date. Ideally, the parties continue to conduct business and the customer never seeks recovery prior to the expiration of the statute of limitations (typically six years, depending on the governing law).
3. Reject the price increase:
The customer will reject the price increase. Note that customers may initially reject the price increase but agree to pay after further discussion. In the event a customer stands firm on rejecting the price increase, the supplier can then decide whether it wants to take more aggressive action (e.g., threaten to stop shipping) after carefully weighing the potential damages against the benefits.
4. Seek a declaratory judgment and/or injunction:
The customer can seek a declaratory judgment and/or injunction requiring the seller to ship/perform at the current price.
5. Terminate the contract:
The customer may terminate part or all of the contract, depending on contractual terms
For additional information, here is a comprehensive white paper we have written on the tariffs.
DISA Global Faces Class Action After Cyber-Attack
Last week, two separate class actions were filed in the federal district court for the Southern District of Texas against DISA Global Solutions (DISA), a third-party employment screening services provider, related to an April 2024 cyber-attack.
DISA provides drug and alcohol testing and background checks for employers. DISA reportedly faced a cyber-attack from February to April 2024, which resulted in unauthorized third-party access to over 3.3 million individuals’ personal information. According to DISA, the information may have contained individuals’ names, Social Security numbers, driver’s license numbers, and financial account information.
DISA sent notification letters to individuals around February 24, 2025. The lead plaintiffs in both actions claim that they were required to provide their personal information to DISA as part of a job application or to obtain certain employment-related benefits.
Data breach class actions can help inform entities’ risk management strategies. We will consider some key considerations from the class action complaints against DISA.
Reasonable Safeguards
One plaintiff alleges that DISA had a duty to exercise reasonable care in securing data, but that DISA breached that duty by “neglect[ing] to adequately invest in security measures.” The complaint lists numerous commonly accepted security standards, including:
Maintaining a secure firewall configuration;
Monitoring for suspicious credentials used to access servers; and
Monitoring for suspicious or irregular server requests.
The other plaintiff similarly alleges that DISA failed to adequately implement measures. This complaint also enumerates common measures, including:
Scanning all incoming and outgoing emails;
Configuring access controls; and
Applying the principle of least-privilege.
Such claims of inadequate security and privacy measures are common in data breach class action litigation. Organizations should evaluate their security standards and ensure they are aligned with current best practices.
Notification Timeframe
DISA’s notification letter to affected individuals states that the unauthorized access occurred between February and April 2024. DISA sent notification letters in February 2025. One plaintiff alleges that the “unreasonable delay in notification” heightened the foreseeability that affected individuals’ personal information has been or will be used maliciously by cybercriminals.
It can take months to investigate a cyber incident and determine the nature and extent of information involved. Still, organizations who experience such incidents should be mindful of the ways in which plaintiffs can use the notification timeframe in their litigation.
Heightened Sensitivity of Social Security Numbers
One plaintiff includes in their complaint that Social Security numbers are “invaluable commodities and a frequent target of hackers.” This plaintiff alleges that, given the type of information DISA maintains and the frequency of other “high profile” data breaches, DISA should have foreseen and been aware of the risk of a cyber-attack.
The other plaintiff states that various courts have referred to Social Security numbers as the “gold standard” for identity theft and that their involvement is “significantly more valuable than the loss of” other types of personal information.
When it comes to information, not all data elements present the same level of risk if subject to unauthorized access. Organizations should track the types of information they maintain and understand that certain information may present higher risk if exposed, potentially requiring heightened security standards to protect it. The suits against DISA highlight that organizations should implement robust measures to not only minimize risk of cyber-attacks but also to minimize litigation risk in the often-inevitable class actions that follow.
Roma Patel also contributed to this article.
Federal Circuit Broadens ITC Economic Prong
In the recent decision of Lashify, Inc. v. International Trade Commission, the United States Court of Appeals for the Federal Circuit rejected the long-standing approach concerning the interpretation of the domestic-industry requirement under Section 337 of the Tariff Act of 1930. The complainant, an American company importing eyelash extensions from international manufacturers, which alleged that certain other importers were infringing on its patents.
The central legal issue in this case revolved around the interpretation of the “economic prong” of the domestic-industry requirement under 19 U.S.C. § 1337(a)(3)(B). Specifically, the panel examined whether significant employment of labor or capital related to sales, marketing, warehousing, quality control, and distribution could satisfy the economic prong, even in the absence of domestic manufacturing.
The Federal Circuit vacated the Commission’s split decision regarding the economic prong, finding that the Commission’s interpretation was contrary to the statutory text. Notably, the Court cited the Loper Bright Supreme Court decision that allows the Court to “exercise [] ‘independent judgment’ about the correctness of [the Commission’s] interpretation.”
The Court ultimately held that significant employment of labor or capital should be considered sufficient to satisfy the economic prong, regardless of whether the labor or capital is used for sales, marketing, warehousing, quality control, or distribution. The Court emphasized that the statutory language does not impose a domestic-manufacturing requirement or limit the economic prong to technical development. Rather the panel held that so long as the human activity is related to “aspects of providing [patented] goods or services,” the cost of that investment in human capital should be accounted for. This decision has significant implications for future cases involving the domestic-industry requirement under Section 337. The Federal Circuit’s interpretation broadens the scope of what can be considered significant employment of labor or capital, potentially allowing more companies to satisfy the economic prong without engaging in domestic manufacturing. This could lead to increased access to Section 337 relief for companies that focus on sales, marketing, and distribution activities within the United States.
Warby Parker Settles Data Breach Case with OCR for $1.5M
Eyeglass manufacturer and retailer Warby Parker recently settled a 2018 data breach investigation by the Office for Civil Rights (OCR) for $1.5 million. According to OCR’s press release, Warby Parker self-reported that between September and November of 2018, unauthorized third parties had access to customer accounts following a credential stuffing attack. The names, mailing and email addresses, payment card information, and prescription information of 197,986 patients was compromised.
Following the OCR’s investigation, it alleged three violations of the HIPAA Security Rule, “including a failure to conduct an accurate and thorough risk analysis to identify the potential risks and vulnerabilities to ePHI in Warby Parker’s systems, a failure to implement security measures sufficient to reduce the risks and vulnerabilities to ePHI to a reasonable and appropriate level, and a failure to implement procedures to regularly review records of information system activity.” The settlement reiterates the importance of conducting an annual security risk assessment and implementing a risk management program.
Blocked DOL Overtime Rule Set for Review in the Fifth Circuit (US)
On February 28, 2025, the US Department of Labor (DOL) appealed a December 2024 Texas federal trial court’s decision that blocked a Biden-era overtime rule promulgated by the DOL. This is the DOL’s second appeal following an appeal in November by the then Biden-led DOL of another Texas district court’s ruling that similarly vacated and set aside the overtime rule nationwide. Both cases were appealed to the Fifth Circuit Court of Appeals.
The DOL’s revised overtime rule went into effect in July 2024 and expanded overtime eligibility for employees by raising the salary threshold required for an employee to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA). To be exempt from overtime requirements under the FLSA (time-and-one-half the regular rate of pay for hours worked in excess of 40 hours in a work week), employees must primarily perform certain job duties, be paid on a salary, not hourly, basis, and earn at least a minimum threshold salary.
Under the DOL’s 2024 rule, the annual salary threshold initially increased from $35,568 to $43,888 on July 1, 2024, and was set to increase again on January 1, 2025 to $58,656 prior to the decision by the US District Court for the Eastern District of Texas to vacate the rule in November. The rule also provided for a mechanism to increase the threshold level every three years, beginning on July 1, 2027. In November, District Court Judge Sean D. Jordan granted summary judgment, thereby blocking the rule nationwide, stating that the DOL’s “changes to the minimum salary level in the 2024 Rule exceed its statutory jurisdiction.” By setting the minimum salary threshold so high, Judge Jordan wrote, the 2024 rule “effectively eliminates” the other considerations required under the FLSA, like job duties, “in favor of what amounts to a salary-only test.”
The decision by the Trump Administration to appeal the most recent District Court decision came as a surprise to some, as it is believed by many that the Trump Administration will look to review the 2024 overtime rule and possibly get rid of it all together. However, the decision by the Trump Administration to appeal allows the DOL to defend its longstanding practice to set a salary threshold for overtime eligibility, although it appears likely the Trump DOL would set the threshold minimum much lower—closer to the $35,500 threshold minimum set by the DOL during the first Trump Administration.
We expect and will continue to monitor changes to the overtime rule as it moves through the courts under the new Trump Administration.
Supreme Court Says EPA Has No Authority to Impose “End-Result” Requirements in Clean Water Act Permits
On Tuesday, March 4, 2025, the Supreme Court issued an opinion in City and County of San Francisco, California v. Environmental Protection Agency, U.S. No. 23-753 in which the City and County of San Francisco (San Francisco) challenged certain provisions in the Clean Water Act (CWA) National Pollution Discharge Elimination System (NPDES) permit for its Oceanside wastewater treatment plant (WWTP) that conditioned compliance on whether the receiving water body met certain water quality standards. Among other requirements and restrictions, the NPDES permit at issue prohibited the WWTP from 1) making any discharge that “contribute[s] to a violation of any applicable water quality standard,” and 2) performing any treatment or making any discharge that “create[s] pollution, contamination, or nuisance as defined by California Water Code section 13050.”
According to San Francisco, these permit requirements created significant uncertainty for the compliance status of its Oceanside WWTP by holding petitioner responsible for a condition it could not directly control—the quality of the oceanwater into which the WWTP discharges. The EPA, on the other hand, argued that it needs the authority to impose these “end-result” permit requirements when the regulated entity does not provide the agency with adequate information to craft more specific requirements that will be adequately protective of receiving water quality.
Justice Samuel Alito delivered the opinion of the Court, which held in a 5-4 opinion that the CWA provisions authorizing the EPA to impose “effluent limitations” (33 U.S.C. § 1311) in NPDES permits do not authorize such “end-result” requirements that “condition [permittees’] compliance on whether receiving waters meet applicable water quality standards.” In other words, the EPA cannot impose requirements that “simply tell[] a permittee that a particular end result must be achieved and that it is up to the permittee to figure out what it should do.” Justice Amy Coney Barrett, joined by three justices (Sotomayor, Kagan and Jackson), argued in dissent that there is nothing in the “straightforward statutory language” of the CWA that distinguishes “end-result” permit requirements from other requirements the majority found to be acceptable.
A driving concern for the majority was the potential hole that “end-result” requirements could create in CWA Section 1342(k), which deems a permittee to be in compliance with the CWA if it is in compliance with its permit. This “permit shield” provision offers certain legal assurances to permittees that would otherwise be exposed to harsh civil and even criminal penalties for violations of the CWA that are ultimately outside of their control. The Court found that “end-result” permit requirements, by “making the permittee responsible for any drop in water quality below the acceptable standard,” would potentially swallow the protections offered by Section 1342(k) and result in significant civil and criminal exposure for permittees, even when they comply with all the other terms of their permits.
A second key issue for the Court was the lack of any mechanism in the CWA for apportioning liability where multiple permittees, each with “end-result” permit requirements, discharge into the same water body. In such a case, the EPA would have to “unscramble the polluted eggs after the fact” to determine which permittee was liable. According to the Court, it was exactly this backwards-looking convoluted enforcement scheme that Congress sought to abandon when it amended the Water Pollution Control Act in 1972 to create the modern Clean Water Act.
Notably, the Court upheld “narrative” permit terms, such as requirements to implement best management practices without specifying the exact practices to implement in every given situation. In doing so, the Court rejected San Francisco’s argument that “all limitations” imposed under CWA Section 1311 must qualify as “effluent limitations” and upheld conditions that “do not directly restrict the quantities, rates, or concentration” of pollutants that a permittee may discharge.
The Court’s holding impacts NPDES permits throughout California and across the country. “End-result” permit requirements in the form of receiving water limitations are commonly found in general NPDES permits, including California’s Construction General Permit and Industrial General Permit, as well as site-specific NPDES permits. The Court’s holding also may impact pending regulatory and citizen-suit enforcement actions, at least to the extent such actions are based on “end-result” permit requirements similar to the ones rejected by the Supreme Court.
While FTC Non-Compete Appeals Linger, Ohio Poses Ban on Non-Competes, Forum Selection, and Other Restrictive Covenants
The Federal Trade Commission (FTC) implemented its 2024 rule banning non-compete agreements on April 23, 2024. The rule gained some life at first as a U.S. District Court in Pennsylvania ruled in its favor and denied a request to implement a permanent injunction. Since then, however, employers have won multiple arguments supporting the enforcement of non-compete agreements in front of the National Labor Relations Board and U.S. District Courts in Texas and Florida. The rule was vacated by a permanent injunction from the court in Texas on Aug. 20, 2024.
While the FTC rule goes through the appeals process, non-compete agreements remain a state law issue. To date, 33 states have implemented restrictions requiring the agreements to be reasonable in relation to the time, scope, and geographical area of the restriction. In January 2025, New York’s legislature reintroduced a bill that would make it the 34th state to restrict non-compete agreements.
Ohio introduced a bill in February 2025 that would make it the fifth state to ban non-compete agreements. Currently, California, Oklahoma, Minnesota, and North Dakota have outright bans on non-compete agreements. That said, Ohio’s proposed legislation would go beyond non-compete agreements for all employees, volunteers, and independent contractors.
Specifically, the Ohio law would prohibit any agreement that contains a forum selection clause requiring an Ohio employee to litigate a claim outside the state. The potential law would also prohibit an “agreement that imposes a fee or cost” on an employee “for terminating the work relationship” for various scenarios. Further, it would prohibit any agreement requiring “a worker who terminates the work relationship to reimburse the employer for an expense incurred” during the relationship for “training, orientation, evaluation, or other service intended to provide the worker with skills to perform the work or to improve performance.” Finally, the law would give courts the option to award punitive damages when an employer violates the law.
While state law determines whether agreements with restrictive covenants are enforceable, the laws are constantly changing. Based on this, employers should consider reviewing agreements with counsel to ensure they comply with various state laws.
Fast Track to a First Contract: Senator Proposes Faster Labor Contracts Act
U.S. Sen. Josh Hawley (R-Mo.) looks to speed up collective bargaining negotiations for a first contract between private employers and unions via new legislation. On March 4, Sen. Hawley introduced the Faster Labor Contracts Act. The bill proposes an amendment to Section 8(d) of the National Labor Relations Act (NLRA) that would, it says:
Amend the NLRA to require that after workers have voted to form a union, employers must begin negotiating with the new union within 10 days
Provide that if no agreement is reached within 90 days, the dispute will be referred to mediation
Stipulate that if mediation fails within 30 days, or additional periods agreed upon by the parties, the dispute will be referred to binding arbitration to secure an initial contract
Commission a Government Accountability Office report on average workplace time-to-contract one year after enactment.
Section 8(d) of the NLRA requires the employer and the union to bargain in good faith over employees’ wages, hours, and other terms and conditions of employment, and states “but such obligation does not compel either party to agree to a proposal or require the making of a concession.” The NLRA does not impose a time limit for the parties to reach an agreement. According to Bloomberg Law’s statistics, it takes the parties on average 458 days to bargain a first contract.
If passed, the Faster Labor Contracts Act will affect employers and unions alike. Most notably, the bill ignores both the union’s and the employer’s rights to object to the results of an election, test certification of a unit, and have the opportunity to litigate those issues. It is not clear how those rights – also provided by the NLRA – would stand in light of the proposed 10-day start time. By setting a negotiation timeline, the bill may also force both parties to concede to unfavorable terms, placing limits on the parties’ rights to freely contract without outside intervention.
The bill is bipartisan and cosponsored by Sens. Cory Booker (D-N.J.), Gary Peters (D-Mich.), Bernie Moreno (R-Ohio), and Jeff Merkley (D-Ore.). The bill is also backed by the International Brotherhood of Teamsters.