This post was authored by Environmental, Energy + Telecommunications group partner Jonathan Schaefer and is being shared on our Environmental Law + blog. If you’re interested in getting updates on developments affecting environmental regulation, we invite you to subscribe to the blog.

It has been 50 days since the Trump administration took office, and there remains a tsunami of activity surrounding executive actions and announcements across the federal government. The Environmental Protection Agency (EPA) has not been spared from deep cuts, office and grant program closures, and a fair amount of confusion.

On March 11, 2025, EPA Administrator Lee Zeldin directed the agency to eliminate all offices focusing on environmental justice. The move comes in the wake of executive orders signed on inauguration day declaring the end to the “whole of government” approach and the “Justice40” initiative and directed all federal agencies to terminate all environmental justice offices and positions. The recent action ends over 30 years of environmental justice work at the EPA by closing the national environmental justice office, along with each of the ten regional environmental justice offices. For the foreseeable future, the environmental justice considerations in environmental permitting and regulations will be starkly absent at the federal level.

Meanwhile, as a result of the February 19, 2025, executive order, the EPA has until April 20, 2025, to review all of their regulations and identify regulations that, among other criteria, are unconstitutional, impose significant costs that outweigh public benefit, or harm the national interest. This comprehensive regulatory review will likely have broad implications for nearly all environmental regulatory programs. For example, just yesterday, Administrator Zeldin announced the EPA’s plan to eliminate 31 separate major environmental regulations. Among the regulations on the chopping block are the greenhouse gas emissions endangerment finding,  the “Good Neighbor Plan,” and several other climate-related standards. As for enforcement priorities, the same executive order instructed all federal agencies to “preserve their limited enforcement resources by generally deprioritizing” enforcement where such enforcement is not based on the “best reading of a statute,” or it goes “beyond the powers vested in the Federal Government by the Constitution.”

As for staffing, in February, the EPA had to correct a comment from the President that the EPA would be cutting 65% of its workforce; instead, it clarified that the figure was referencing spending cuts. Undoubtedly, much of those cuts will come from reductions to, or wholesale terminations, of many of the EPA’s traditionally successful and highly lauded grant programs. Just earlier this week the EPA announced its fourth round of cuts, including the cancellation of over 400 grants across nine programs. Then, the next day, the EPA announced it was canceling $20 billion in grants for climate and clean energy programs that had already been frozen. These broad cuts, which came with little or no notice, have left loan and grant applicants and recipients confused and concerned. While not tallied yet, there are sure to be thousands of potential brownfield, resiliency, and energy projects put on hold or terminated. It is anticipated that these cuts will also significantly impact on state and local government funding. It is too early to know whether and how much those gaps will be filled on a state or local level.

There is no sign that the pace of change will be slowing down anytime soon. With these changes, regulatory uncertainty will continue. More so than ever, keeping abreast of these developments and how they may impact operations, projects, or transactions is vitally important to businesses.

In putting together our thoughts on this post, it was hard not to think about the elephant in the room (see what I did there?). The change in administration has already brought significant changes in our nation’s environmental priorities. While time will show us all of the specific ways this will play out in 2025, we are already seeing some trends and can expect others to guide manufacturers as to what the Environmental, Health, and Safety (EHS) landscape might look like over the year.

  1. Rollback of Federal Environmental Regulation and Enforcement

As my partner, Jon Schaefer, reported earlier this month, even before Lee Zeldin was confirmed as the new Environmental Protection Agency (EPA) Administrator, the EPA had temporarily frozen its lawsuits, certain communications, and some final and pending regulations. Several freezes impact per- and polyfluoroalkyl substances (PFAS) regulations. For example, the EPA instituted a 60-day delay for certain imminent Toxics Release Inventory (TRI) PFAS reporting requirements “for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.” The EPA noted that it may further delay the effective date beyond 60 days. The EPA also put a stop to Clean Water Act rulemaking to develop effluent limitations for PFAS for the organic chemicals, plastics, and synthetic fibers point source category. Whether this trend will carry through to the many other rules, both adopted and contemplated, related to PFAS remains to be seen.

In the saga of the on-again, off-again Securities Exchange Commission (SEC) Climate Disclosure Rule, the SEC recently requested that the Eighth Circuit delay oral arguments in its case defending the rule. As we previously reported, this rule would require companies to report various climate-related information to the SEC. When it became final last year, it was immediately challenged, and the rule’s fate was placed in the hands of the Eighth Circuit Court of Appeals. While it was once moving forward to defend the rule, the SEC is now requesting additional time “to deliberate and determine the appropriate next steps in these cases.” This could be the first step in the ultimate demise of the rule, at least under the current administration.

We will continue to track developments at the federal level. Given the administration’s overall priorities, we expect to see further enforcement and regulation rollbacks on several EHS issues.

  1. Uptick in State Action

Many states are poised to pick up the slack in the face of decreasing federal action. With regard to climate disclosure laws, California has already passed several requiring climate-related disclosures for entities doing business in the state, with reporting requirements approaching next year. Other states are joining in, with New York and Colorado considering their own climate disclosure laws. And as many of us have already experienced, decision-making related to PFAS is dominated by state law. As the federal government steps back from regulation and enforcement, we can expect many states take up the mantle on various issues. The patchwork of state laws could create a compliance challenge for manufacturers operating in multiple locations around the country. It will be important for manufacturers to remain up-to-date on proposed and final state actions so they can be prepared for new requirements that could pop up in various jurisdictions.

  1. Citizen Suit Action

In addition to increased state activity, we expect an increase in citizen enforcement of federal environmental laws in 2025. Many federal environmental statutes have provisions allowing for citizen enforcement when the federal government fails to do so. These laws also allow citizens to pursue the government for failed enforcement and oversight. Under the first Trump administration, we saw an uptick in citizen enforcement of federal environmental laws, and we expect to see the same during Trump 2.0. These lawsuits could hit manufacturers on various topics, including enforcement related to clean water, clean air, and hazardous waste. Citizens may also target the federal government, which could ultimately cause the federal government to take action of its own, even when it was not planning to do so.

We expect 2025 to be a busy year in the EHS world. We will continue to track these updates and changes here on the blog.

This post was co-authored by Labor + Employment Group lawyer Madison C. Picard.

On January 21, President Trump signed an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Order), revoking Executive Order 11246, the long-standing order that required federal contractors to engage in affirmative action, including by annually developing Affirmative Action Plans (AAP’s) concerning women and minorities. The Order further mandates that the Office of Federal Contract Compliance (OFCCP) immediately cease promoting diversity, investigating federal contractors for affirmative action compliance, and allowing or encouraging federal contractors to engage in workforce balancing.

Below are several key points that manufacturers who are federal contractors need to know:

  • Federal contractors are no longer required to create an AAP about women and minorities. However, this Order does not impact the affirmative action obligations stemming from the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) for protected veterans or the obligations under Section 503 of the Rehabilitation Act of 1973 for individuals with disabilities. Further, this Order does not absolve contractors of any obligations they may have under state law if they are also state contractors or any other applicable legal obligations.
  • The Order prohibits federal contractors from considering “race, color, sex, sexual preference, religion, or national origin in their employment, procurement or contracting practices in ways that violate the [n]ation’s civil rights laws.” Additionally, the Order states that federal contract recipients will be required to certify that they do not operate diversity, equity, and inclusion (DEI) programs “that violate any applicable Federal anti-discrimination laws.” Importantly, this does not wholly prohibit employers from havingDEI-related policies and practices; rather, it prohibits only those that could be found to violate anti-discrimination laws, such as race-based quotas.
  • The Order provides contractors with a 90-day grace period during which they may continue to comply with the original regulations. Contractors should use that time to audit their policies and practices under attorney-client privilege to evaluate compliance with this order.

In addition, manufacturers that are not federal contractors may also be impacted by this Order. The Order scrutinizes DEI efforts in the private sector and requires federal agencies to, among other things, report a list of large corporations and organizations that should be subject to civil compliance investigations based on unlawful DEI programs. Accordingly, manufacturers may also want to consult with legal counsel about their DEI initiatives to ensure they are lawful.

This post was co-authored by Antitrust + Trade Regulation lawyer Jennifer Driscoll and Managed Care + ERISA Litigation lawyer Stephanie J. Oppenheim

On January 16, 2025, the Federal Trade Commission (FTC) and the U.S. Department of Justice, Antitrust Division (collectively, the Agencies) released the updated Antitrust Guidelines for Business Activities Affecting Workers (the Revised Guidelines). The Revised Guidelines, which passed the FTC in a 3-2 vote with dissents from current FTC Chairman Andrew N. Ferguson and fellow Republican Commissioner Melissa Holyoak, replaced the 2016 Antitrust Guidance for Human Resource Professionals.

The Revised Guidelines reflect the Agencies’ focus on fair competition in labor markets during the Biden administration. (For more information, see our client alert) However, given Chair Ferguson’s dissent and the Trump administration’s efforts to reshape the federal government, it is not clear that the Revised Guidelines will remain intact. Despite—or because of—this uncertainty, it is critical that businesses take an inventory of their employment policies and educate employees about how well-settled principles of antitrust law apply to the workforce.    

Key Changes and Clarifications

The Revised Guidelines set forth the following non-binding guidance: 

  • Focus on Worker Competition: Antitrust law protects workers from anticompetitive misconduct just as much as they protect consumers of goods and services. Practices that harm this competition in the labor market, such as suppressing wages or limiting job opportunities, may be investigated and prosecuted by the Agencies. 
  • Specific Prohibited Practices: Certain business practices may violate antitrust laws, including:
    • Wage-fixing: Agreements between companies to set or coordinate wages.
    • No-poach and similar agreements: Agreements between companies not to hire each other’s employees.
    • Exchange of sensitive information: Exchanging competitively sensitive information, such as compensation details, among competing employers.
    • Non-compete clauses: Agreements that restrict workers from leaving their jobs or starting competing businesses.
    • Other restrictive, exclusionary, or predatory employment conditions: Overly broad non-disclosure agreements (NDAs), training repayment agreement provisions, non-solicitation agreements, and exit fee or liquidated damages provisions.
    • False earnings claims: Making misleading statements about potential earnings to attract workers.
  • Criminal and Civil Liability: Certain agreements are per se illegal and trigger criminal liability, including agreements between companies to fix wages or not to recruit, solicit, or hire workers.
  • Scope of the HR Guidelines: The Revised Guidelines apply to employees, independent contractors, and franchisees.   
  • Reporting Violations: The Revised Guidelines provide clear steps on how to report potential violations to the FTC and DOJ and the information to include in a complaint.

The FTC Dissent
Now-Chairman Ferguson, joined by Commissioner Holyoak, issued a strongly worded dissent that focused on the timing and future implications of the Revised Guidelines. Although Chairman Ferguson concurred that antitrust law applies to unlawful restraints in labor markets—and that the Agencies should “promote[] important transparency and predictability”—he denounced the Revised Guidelines as a “senseless waste of Commission resources” by “the lame-duck Biden-Harris FTC.”[1] In a separate statement, Commissioner Holyoak agreed that it was “wholly improper for this lame-duck Commission to expedite law enforcement matters, issue notices and advance notices of proposed rulemakings, [and] release new enforcement policy statements and guidance” rather than facilitate “an orderly transition to the Trump-Vance administration.”[2]

What Does this Revised Guidance Mean for Businesses?
Despite the objections to timing, most of the Revised Guidelines are consistent with well-established antitrust principles. Employers should review the Revised Guidelines carefully and then take practical measures to safeguard proprietary information and business interests.

  • Take an Inventory of HR policies: Review all agreements and practices affecting worker compensation, recruitment, and mobility for potential antitrust violations.
  • Protect competitively sensitive information: Determine whether restrictive covenants such as NDAs are sufficient to protect legitimate business interests such as intellectual property rights.  Restrictive covenants should also be narrowly tailored and proportionate to the risk of disclosure to be enforceable and comply with antitrust law.
  • Train executives and employees: Invest in training for human resources executives and employees, who may not understand how certain business practices may violate antitrust law—or the ensuing severe penalties. 
  • Seek legal counsel: Consult with counsel to analyze specific situations and ensure compliance with antitrust law.

[1] Dissenting Statement of Commissioner Andrew N. Ferguson Joined by Commissioner Melissa Holyoak Regarding the Antitrust Guidelines for Business at https://www.ftc.gov/system/files/ftc_gov/pdf/at-guidelines-for-business-activities-affecting-workers-ferguson-holyoak-dissent.pdf.

[2] Dissenting Statement of Commissioner Melissa Holyoak Regarding Closed Commission Meeting Held on January 16, 2025 at https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/dissenting-statement-commissioner-melissa-holyoak-regarding-closed-commission-meeting-held-january.   

This week’s post includes insight shared for the article “How will potential tariffs impact CT manufacturers/supply chains? It’s a key issue in 2025,” published in the Hartford Business Journal’s Economic Forecast issue on January 13, 2025.

In late 2012, we created the Manufacturing Law Blog with the goal of providing our manufacturing clients with a holistic approach to the unique issues they face in their global operations. Starting in 2016, we began a tradition of dedicating our first three posts of the year to a yearly outlook from our different vantage points.

Here are corporate compliance and litigation issues that manufacturers might expect to face in 2022:

1.   Everyone wants to talk about the “T” word – Tariffs.  We will be monitoring these developments closely, including on the raw material side. Do not lose sight of the impact of tariffs on foreign companies who already have operations in the United States. Several of our clients who have subsidiaries based in the United States are discussing whether to expand their manufacturing operations. The potential expansion is related to tariffs, but also to maintain flexibility in their operations throughout the world. 

2.  The transformational trilateral trade agreement between the United States, Australia, and the United Kingdom (AUKUS) is a hot topic heading into 2025. A lot of commentators are trying to predict whether the Trump Administration will walk away from the deal or re-negotiate it.  Significantly, Secretary of State Marco Rubio made positive comments about AUKUS during his confirmation hearing. Connecticut and its manufacturing industrial base have invested a lot of time and effort promoting AUKUS and developing the infrastructure for companies to do business here. We have seen a significant uptick of activity from Australian companies in Connecticut as one example. Whether this momentum continues in 2025 will be something I will be watching carefully.

3.  Collaboration remains key amongst manufacturers. Several manufacturers are “teaming” together to develop products, including as part of government contracting bids (both in the United States and abroad). There are pros and cons to such collaborative efforts and we have been advising clients how to avoid the major pitfalls with sharing your intellectual property with other companies, including competitors. In 2025, I expect these collaborative efforts to continue.

This post was co-authored by Labor + Employment Group lawyers Britt-Marie Cole-Johnson and Christopher A. Costain.

As we look ahead to 2025, several important labor and employment law changes, planned and potential, are on the horizon. With President Trump set to return to the Oval Office on January 20, 2025, labor and employment law priorities at the federal level are expected to change significantly. Meanwhile, state legislatures remain active in enacting new laws that will impact the labor and employment law landscape for manufacturers. Below are a few key issues likely to impact manufacturers in 2025.

Minimum Wage for Non-Exempt Employees and Salary Threshold for Exempt Employees

While President Biden called for an increase to the federal minimum wage (currently $7.25 per hour) to $15 per hour during his presidency—that did not occur; rather, the minimum wage rate has remained unchanged since 2009. During President-elect Trump’s recent campaign, he signaled an openness to raising the federal minimum wage. However, any forthcoming increase will likely be substantially less than the Biden administration’s goal. Similarly, it is unlikely that the incoming administration will seek to revive the Biden administration’s increased “white collar” overtime exemption salary threshold, which a federal judge recently struck down. Nonetheless, manufacturers should remain current on federal and state minimum wage rates and salary thresholds.

Independent Contractor v. Employee Classification Enforcement

It is possible that the incoming administration may undo the Biden administration’s efforts to make it more difficult for manufacturers to classify workers as independent contractors, thereby simplifying wage and hour compliance for manufacturers under the Fair Labor Standards Act (FLSA). Further, the Trump administration may not prioritize this issue from an enforcement perspective. Regardless, manufacturers should continue to ensure compliance with more stringent state and local laws and guidance regarding worker classification.

Status of Equal Employment Opportunity and Diversity, Equity, Inclusion, & Belonging (DEIB) Programs and Policies

As seen during Trump’s first presidency, the Equal Employment Opportunity Commission (EEOC) under the incoming administration may aim at governmental and corporate diversity, equity, inclusion, and belonging (DEIB) initiatives in employment, focusing on equality compared to equity. Some entities are preemptively rolling back their DEIB programs and practices regarding recruiting, hiring, promotions, and similar efforts in anticipation of the new administration’s position. The Trump administration may also change protections for LGBTQ+ workers. At the state and local levels, it is expected that there will be a continued expansion of protected statutes. Manufacturers should be aware of these developments and ensure that their handbooks and policies comply with the state and local laws where their employees are working.

Workers’ Right to Organize and the National Labor Relations Board (NLRB)

Under the incoming Trump administration, the National Labor Relations Board (NLRB) may revert to more employer-friendly policies aimed at ensuring companies have rights regarding union organizing and similar activities, as seen during the first Trump administration. We also anticipate that the incoming General Counsel of the NLRB will rescind the memoranda issued by the current NLRB General Counsel, which implemented a pro-labor policy by expanding the scope of available remedies for unfair labor practices and restricting permissible non-compete agreements, among other key efforts to support union-organizing activity. The new NLRB may return to using more balanced standards and rulings when analyzing employer policies and confidentiality and non-disparagement provisions. Whether unionized or union-free, manufacturers may be impacted by these changes at the NLRB and beyond and should be aware of these developments.

Artificial Intelligence (AI)

While manufacturers continue to turn towards artificial intelligence (AI) and algorithm-based technologies for recruiting, hiring, and other employment needs, there may be developments in legislation at the state and federal levels. At the federal level, it is possible that the incoming administration could approach the issue of AI from a self-governance perspective, meaning refraining from legislating around the use of AI in employment and, instead, relying on employers to monitor their use of AI in recruiting, hiring, etc. AI tools could be a key focus for state and local legislatures in 2025. Manufacturers should ensure that their deployment and use of AI tools in employment comply with federal, state, and local laws.

Non-Compete Legislation

The Federal Trade Commission’s (FTC) final rule banning non-compete agreements did not go into effect as planned in 2024, and the FTC will likely abandon its efforts to revive the final rule once the incoming administration takes office. We do not anticipate further legislative or regulatory efforts at the federal level during the second Trump administration. However, at the state level, we expect to see more states and localities enact laws banning or restricting the scope of non-compete agreements, including based on position and salary, thereby challenging manufacturer efforts to protect their business interests and proprietary information and defend against unfair competition.

This post was co-authored by Labor + Employment Group lawyer Christopher A. Costain.

As most manufacturers know, the Connecticut Legislature passed significant amendments to the Connecticut Paid Sick Leave (PSL) law, which are set to go into effect on January 1, 2025, and pertains to employers with 25 or more employees. Just in time, the Connecticut Department of Labor (DOL) has published important guidance (Guidance) regarding these wide-ranging changes, which manufacturers may find helpful as they revise policies and procedures to ensure compliance with these significant amendments. Below are some of the most essential parts of the DOL’s guidance that may impact manufacturers:

  1. Two Different “120-Day” Rules in the Amended Law

The amended PSL law provides that covered employees are entitled to use accrued paid sick leave on or after 120 calendar days of employment, meaning they have been “on payroll” for three months. The Guidance clarifies that the 120 calendar days begin on the employee’s hire date and that employees who meet the 120-day threshold as of January 1, 2025, do not need to wait to use accrued paid sick leave. Similarly, employees who began their employment prior to January 1, 2025, but have not yet worked 120 days must wait until their 120th day of employment before using accrued paid sick leave.

Also, under the amended law, “seasonal employees,” defined as employees who work 120 or fewer days in a year, are not covered by the new law. The critical distinction between the new hire waiting period and the seasonal employee workday threshold is that new hires must wait 120 calendar days before using accrued paid sick leave. In contrast, seasonal employees are not eligible for paid sick leave until they have worked 121 or more days in a year.

The Guidance clarifies that if a seasonal employee remains employed and works 121 or more days in a year, they will become eligible for accrued paid sick leave. Importantly, in such an instance, a formerly “seasonal” employee would be entitled to use accrued paid sick leave beginning on workday 121 and thereafter, based on the hours worked in their first 120 days.

  1. Documentation and Notice Prohibited

Under the amended PSL law, employers cannot require documentation of paid sick leave use from employees. Instead, employers can only ask employees if they are taking time off pursuant to the PSL law but cannot gather specific details or documentation to support the request. The Guidance states that if an employee refuses to provide enough information for an employer to determine that the absence is covered under the PSL law, the employer should not apply the employee’s accrued paid leave to the absence.

The Guidance also clarifies that if an employee uses paid sick leave concurrently with a law that permits return-to-work or fitness-for-duty certifications, such as the federal or state Family and Medical Leave Act or the Americans with Disabilities Act, an employer may request such documentation. However, if such documentation is requested, it may not be used to deny an employee’s use of paid sick leave.

The Guidance also clarified employers may require employees to provide notice “as soon as practicable” of the need to use paid sick leave as it relates to notice that employees must provide in advance of using paid sick leave, , so long as employees are not disciplined for failing to follow the employer’s requirements regarding the timing of the notice.

  1. Ensuring Compliance with Existing PTO Policies

Concerning manufacturers who may have a Paid Time Off (PTO) policy, the Guidance clarifies that employees who use all of their accrued PTO by taking a family vacation will be deemed to have exhausted their 40 hours of paid sick leave. For future absences in the same year that would have otherwise qualified as a paid sick leave-related absence, the employer would be permitted to require advance notice and documentation, and the other requirements of the PSL law would not need to be satisfied.

However, the DOL cautions that an employee’s absences related to paid sick leave should not be treated as an “occurrence” under the employer’s attendance policy. That being said, employers may have a policy about using sick time as illustrated above and beyond the 40 hours required by law (and presumably, could discipline for various reasons when time is used above the 40-hour threshold).

  1. Carrying Over or Paying Out

The amended PSL law provides that employees may carry over up to 40 hours of unused accrued paid sick leave per year unless the employer frontloads the time, in which case, carry over is not required. The Guidance further clarifies that an employer may also offer to pay out an employee’s unused accrued paid sick leave in lieu of carrying over to the following year, but only if an employer and employee agree. Employers that do not frontload paid sick leave may want to consider offering employees a payout option to better manage workforce and staffing levels at the beginning of the following year before paid sick leave accruals grow.

There is likely to be additional forthcoming guidance from the DOL as the amended PSL law goes into effect beginning in January. In addition to carefully reviewing the amended PSL law and the DOL’s guidance, employers should consult competent employment counsel.

As the Biden-Harris administration draws to a close, EPA has issued its third annual report touting the progress made under the PFAS Strategic Roadmap.

In the report, EPA notes the major legal, technical, and policy developments it has enacted since the PFAS Strategic Roadmap was adopted in 2021. Those developments include the following:

  • Designation of PFOA and PFOS as CERCLA Hazardous Substances. This final rule will allow EPA and others to pursue potentially responsible parties under CERCLA for PFAS contamination. According to EPA, this designation will ensure that polluters, and not taxpayers, will pay for PFAS cleanups.
  • Creation of Drinking Water Standards for Certain PFAS. This final rule established enforceable drinking water standards for 5 individual PFAS and mixtures of any 2 or more of 4 individual PFAS. These drinking water standards are as low as 4 parts per trillion for PFOA and PFOS.
  • Chemical and Product Regulation. EPA has enacted or proposed a number of regulations under the Toxic Substances Control Act (TSCA) to eliminate and reduce PFAS in commerce. It also is requiring manufacturers and importers of PFAS (including PFAS-containing items) to report PFAS-related information to EPA by (in most cases) January 11, 2026.
  • Issuance of PFAS Enforcement Strategy. EPA issued a PFAS Enforcement Discretion and Settlement Policy Under CERCLA, detailing its priorities and plans when it comes to PFAS enforcement. In the policy, EPA makes it clear that it intends to pursue enforcement against manufacturing and industrial entities, and not public entities that operate water and wastewater systems, airports, or fire stations.
  • PFAS-Related Investments. The Biden-Harris administration committed to investing significant funds to address PFAS contamination, including $10 billion to assist communities and water systems impacted by PFAS and other emerging contaminants.
  • Advancing the Science on PFAS. EPA has engaged in a number of initiatives to gather more data about the presence of PFAS in the environment and in products, analyze appropriate test methods, and study potential human health risks associated with a variety of PFAS compounds.

EPA also announced future priorities, which include developing effluent limitations guidelines for the PFAS manufacturing sector. If adopted, these guidelines would restrict PFAS in discharges from potentially a number of industrial entities, including metal finishers and landfills. EPA also continues to invest in collecting data from a variety of sources, including wastewater treatment facilities, to further understand where PFAS are being found so it can develop effective ways to address them.

Of course, with the impending change in administrations could come a change in EPA’s priorities related to PFAS. The change could also impact initiatives and regulations that are already in place or in the works. We will continue to monitor PFAS developments as we head into 2025.

This post was co-authored by Labor + Employment Group lawyer Madison C. Picard.

Last week, the United States District Court for the Eastern District of Texas vacated and set aside the United States Department of Labor’s (DOL) final rule raising the minimum salary threshold for the Fair Labor Standards Act’s (FLSA) white-collar overtime exemption.

Recently, we discussed parts of this rule that have already taken effect. Specifically, as of July 1, 2024, the minimum salary threshold for executive, administrative, and professional (EAP) employees was raised from $684 per week ($35,558 per year) to $844 per week ($43,888 per year), and the salary threshold for the highly compensated employee (HCE) exemption was raised from $107,432 to $132,964. The salary thresholds were scheduled to rise again on January 1, 2025, with the EAP exemption salary threshold rising to $1,128 per week ($58,656 per year) and the HCE exemption rising to $151,164 annually.

The court concluded that the rule exceeded the DOL’s statutory authority under the FLSA. Previously, the court enjoined enforcement of the rule for the state of Texas as an employer; however, this time, the court struck down the rule as it applies to all employers nationwide. The court’s ruling also entirely vacated the DOL’s rule, meaning the July 1, 2024, increases are now nullified. Consequently, the salary thresholds will revert to what they were under the DOL’s 2019 rule, with the EAP salary threshold at $684 per week ($35,558 annually) and the HCE threshold at $107,432 annually.

The DOL may appeal the decision to the Fifth Circuit; however, with the incoming administration, it is possible that the DOL will decline to appeal or will repeal the rule entirely. Therefore, manufacturers should operate as though the January 1, 2025, increases will not take effect. Manufacturers who adjusted salaries or exemption statuses because of the July 1, 2024, increases should consult with counsel on how to proceed.

What are you hearing? What do the “multiples” look like in my [insert sub-industry] in manufacturing? 

These are two common questions that I get asked a lot by owners and executives at manufacturing companies. Granted, we are involved in many M&A transactions – particularly in the lower middle market. We represent buyers and sellers, and over the past five years, we have been involved in a lot of transactions. 

For buyers, our clients tend to be “strategics” or “corporates” that are looking to acquire other manufacturing companies for a various reasons. Sometimes, strategics are looking to diversify their product lines or expand their customer base. In the past few years, sometimes it is simply to obtain “talent” at both the executive and non-executive levels. A number of companies were flush with cash on their balance sheets after COVID-19 and are looking to deploy capital. 

We also have clients that are “financial sponsors,” including private equity firms. There is no shortage of PEs that are looking to acquire (typically at least a majority interest) of manufacturers in certain industries. The hottest industry for PEs typically is aerospace and defense although be careful not to generalize that interest as PEs focus on certain sub-sectors of A&D companies to acquire based on the market.

For sellers, we typically represent small to mid-size privately held manufacturers – many of which are family-owned and operated. Sometimes, the sellers hire investment bankers to aid in that process – sometimes not. Sometimes, there are “auctions” where several potential suitors are brought in to bid and other times there are so-called “proprietary” transactions where one lucky buyer has exclusive rights to negotiate with the seller. 

One theme throughout all of these transactions is the never-ending search for a proper business valuation. The short-hand way that many companies get there is through a “multiple” that compares the total value of a company’s operations relative to its earnings before interest, taxes, depreciation, and amortization. There are a number of people out there who write countless articles about whether EBIDTA multiples make sense or not. This is not the point of this post.

Rather, when manufacturers call me to ask what other companies in their sector are getting for “multiples’ they likely want to just multiple that “X” (e.g., 5X, 8X, 12X) times their EBIDTA (typically over the trailing twelve months, as may be adjusted) to get a sense of the enterprise value if they were to sell.  Oftentimes, they may not want to sell. Sometimes they do. 

As one of my CEO clients tells me, “multiples are NOT a random force on value. There are many factors driving it.” As an example, the ultimate transaction price is often driven by customer contracts, margins, a track record, sound management, etc. And, it is not coincidence that higher multiples come down the pike when a company’s EBIDTA is higher. 

What is my main message when I get those calls? Just be careful not to distill your business down to one number. A manufacturing business is a complex, living, breathing organism and there are lot of factors that go into valuation. We can help with the legal aspects of the acquisition or sales process obviously – just go into it with an open mind about the potential outcomes.