California SB 22 Becomes Effective, Raising Gift Card Cash-Out Threshold to Under $15

California law has long required that closed-loop gift cards (i.e., cards redeemable only for goods and services from a single merchant or affiliated group) be redeemable for cash when the remaining balance falls below a statutory minimum. The prior threshold of less than $10 has been in place since 2008. Under the amended law, if a gift card has a remaining balance of less than $15, the cardholder is entitled to cash redemption upon request. This requirement applies regardless of any contrary terms printed on the card or included in consumer-facing policies. The amended law also clarifies that “gift certificates” includes electronic or digital gift cards, extending the cash-out requirement to modern, app-based and emailed formats.

SEC/CFTC Issue Joint Interpretation on Crypto Assets

On March 17, 2026, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly issued an interpretive release addressing the classification of crypto assets and the application of federal securities laws to crypto asset transactions. In accompanying public statements, the SEC described the release as recognizing that “most crypto assets are not themselves securities,” reflecting a significant shift in emphasis toward distinguishing between the asset itself and the circumstances under which it may be offered or sold as part of an investment contract. Issued as part of the agencies’ coordination efforts under “Project Crypto,” the release is intended to provide a unified framework for analyzing when crypto assets and related activities involve the offer or sale of securities.

IRS Notice 2026-15 Provides Taxpayers with Additional Guidance on Material Assistance Under New Foreign Entity of Concern Rules

The IRS has issued Notice 2026-15, providing comprehensive interim guidance on the material assistance provisions under Section 7701(a)(52) of the Internal Revenue Code (IRC). In particular, Notice 2026-15 sets forth the methodology for calculating Material Assistance Cost Ratio (MACR) applicable to the IRC Section 45Y Clean Electricity Production Credit, the IRC Section 48E Clean Electricity Investment Credit and the Section 45X Advanced Manufacturing Production Credit. Enacted as part of the One, Big, Beautiful Bill Act (OBBBA), the material assistance provisions deny credit eligibility where a qualified facility, energy storage technology (EST) or “eligible component” includes material assistance from a Prohibited Foreign Entity (PFE). Notice 2026-15 also introduces interim computational and certification safe harbors and outlines documentation and reliance standards pending the issuance of proposed regulations.

California Court Tentatively Rejects “True Lender” Claim in Bank-Fintech Partnership Dispute

On February 24, 2026, the Los Angeles County Superior Court issued a tentative decision granting summary judgment to the fintech Opportunity Financial LLC (OppFi) in its litigation with the California Department of Financial Protection and Innovation (DFPI). The court rejected DFPI’s arguments that OppFi’s lending program with FinWise Bank should be treated as an unlawful “rent-a-bank” arrangement meant to evade California’s interest rate caps.

California Moves to Tighten PAGA Oversight

The Private Attorneys General Act (PAGA) allows an “aggrieved employee” to pursue civil penalties on behalf of the State of California for alleged Labor Code violations. In 2024, amendments to PAGA expanded administrative cure procedures, limited standing to violations personally suffered by the named plaintiff and increased agency oversight of PAGA litigation. On February 6, 2026, the California Labor and Workforce Development Agency (LWDA) issued proposed regulations concerning the interpretation of the PAGA. If adopted, these would be the first regulations in PAGA’s 20-year history, formally detailing how employers and employees must comply with both the original 2004 statute and the amendments enacted in 2024.

New California AI Laws Are Here: Is Your Business Ready?

Effective January 1, 2026, many of California’s newly enacted artificial intelligence (AI) regulations took effect. The more than 20 new AI laws signed by Governor Gavin Newsom regulate AI, data privacy, automated decision systems and generative AI across diverse sectors that include employment, health care, education, social media, among other sectors.

AI and Privilege: Lessons from U.S. v. Heppner and the Emerging UK Position

Courts in both the UK and the U.S. are increasingly encountering the implications of generative AI outputs in litigation, which raises a foundational question: When does an AI generated communication attract legal privilege, and when is it exposed to disclosure?

Key Questions Remain Under DOJ’s New Department-Wide Corporate Enforcement Policy

On March 10, 2026, the U.S. Department of Justice (DOJ) announced its first-ever department-wide Corporate Enforcement Policy (CEP), describing the policy as “promoting uniformity, predictability, and fairness” in its resolution of white-collar cases. With one exception, for antitrust offenses, the new CEP applies to all criminal cases involving organizations and supersedes all component-specific or U.S. Attorney’s Office-specific corporate enforcement policies previously in effect.

Conflict Premium: Insurance and Supply Chains During the Iran War (Part 4)

War-risk losses are rarely “mysteries.” They’re usually fights about ordinary words— “detainment,” “loss,” “costs,” “restraint,” “constructive total loss”—and about which section of a program pays when war is in the causal chain.

FERC Moves to Streamline Hydropower Environmental Reviews

On February 19, 2026, the Federal Energy Regulatory Commission (FERC) issued two orders intended to streamline environmental reviews for certain actions related to hydropower facilities.

DEI Compliance Remains an Active Concern

In Students for Fair Admissions v. Harvard (SFFA), the Supreme Court held that the use of race-conscious decision-making in admissions violated federal law. The complex and often opaque nature of the admissions process, however, has made it difficult to determine whether schools were complying with SFFA’s mandate. In August 2025, the White House issued a memorandum directing the Secretary of Education to expand the scope of data schools are required to report to the Department of Education (ED) to provide greater transparency into admissions for the purpose of “exposing unlawful practices and ultimately ridding society of shameful, dangerous racial hierarchies.”

Conflict Premium: Insurance and Supply Chains During the Iran War (Part 3)

Some losses don’t look like “property damage” at all. They look like government action, loss of control, blocked payments or a legal inability to perform. That’s where political risk insurance (PRI)/political violence wording—and sanctions clauses—do the heavy lifting.

NRC Proposed Rule Seeks to Streamline and Accelerate Adjudicatory Proceedings

On March 3, 2026, the U.S. Nuclear Regulatory Commission (NRC) published a proposed rule, Streamlining Contested Adjudications in Licensing Proceedings, which proposes to revise its Rules of Practice in 10 C.F.R. Part 2 to increase efficiency and accelerate licensing adjudications in response to the requirements of the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act of 2024 (ADVANCE Act) and Executive Order 14300, Ordering the Reform of the Nuclear Regulatory Commission (EO 14300).

CARB Approves Proposed Climate Disclosure Regulations

On February 26, 2026, the California Air Resources Board (CARB) approved its initial implementing regulations for California’s corporate climate disclosure laws, the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261), during a public hearing. As we have discussed previously on this topic, the adopted regulations proposed on December 9, 2025 are narrow in scope and address only a limited set of threshold compliance issues. The approved regulations define key terms, establish the program fee structures, explain fee enforcement and set initial reporting timelines. A broader rulemaking addressing Scope 3 greenhouse gas (GHG) emissions, assurance requirements and ongoing reporting mechanics will follow later in 2026.

Conflict Premium: Insurance and Supply Chains During the Iran War (Part 2)

In the first installment of this series, we focused on the operational side of the Iran war: chokepoints, reroutes, airspace constraints and the pricing ripple effects. Here’s the insurance translation: Before you can measure the loss, you need to classify it.

Conflict Premium: Insurance and Supply Chains During the Iran War (Part 1)

Modern supply chains are engineered for efficiency—until the map changes. The current conflict involving Iran and the wider Middle East is a real‑time reminder that a single regional shock can cascade through shipping schedules, commodity pricing, aviation routes and contract performance.

Treasury and IRS Issue Proposed Regulations Under IRC Section 45Z Clean Fuel Production Credit

Recently, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released long-awaited proposed regulations (the Proposed Regulations) under Section 45Z of the Internal Revenue Code of 1986, as amended (IRC), providing comprehensive guidance on the clean fuel production credit (CFPC) enacted by the Inflation Reduction Act of 2022 and amended by the One, Big, Beautiful Bill Act of 2025 (OBBBA). The Proposed Regulations largely follow the approach taken in last year’s draft form of proposed regulations (Draft Regulations) that was included as part of IRS Notice 2025-10. As discussed below, however, the Proposed Regulations include several significant modifications from the Draft Regulations in response to comments submitted to Treasury and amendments to IRC Section 45Z made by the OBBBA.

The Pendulum Swings Back: DOL Proposes to Restore 2021 Independent Contractor Framework

The Department of Labor (DOL) proposal marks the latest shift in a continuing cross-administration debate over how workers should be classified under federal law. In January 2021, at the end of the first Trump administration, the DOL adopted a rule that emphasized two “core” factors in the economic reality analysis—control over the work and opportunity for profit or loss. That rule sought to provide greater predictability by giving those factors more weight than the remaining considerations.

Robust Sourcing for Private Equity Acquisitions Five Key Considerations for Stand Up, Transition and Cost Optimization

Private equity (PE) firms increasingly recognize that value creation depends on disciplined procurement of business services, particularly technology, in addition to financial engineering and operational optimization. Whether establishing a standalone services environment, especially in the case of a carveout, replacing services provided under a transition services agreement (TSA), optimizing costs after deal closing, or reaping synergies presented by an acquisition, PE firms aim to “get it right once.” Engaging a robust sourcing team comprising specialized attorneys and experienced sourcing experts is essential to mitigate risk, control costs and enhance the enterprise value.

Office of the Comptroller of the Currency Proposes GENIUS Act Implementing Rules for Payment Stablecoins

On February 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a Notice of Proposed Rulemaking proposing regulations to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) for the issuance of payment stablecoins and certain related activities by entities subject to OCC jurisdiction.

NRC Issues Proposed Rule Establishing Licensing Framework for Fusion Machines

In late February 2026, the NRC issued a proposed rule titled Regulatory Framework for Fusion Machines, which regulates the possession, use and production of byproduct material associated with fusion machines under Part 30 rather than under the reactor licensing framework applicable to fission facilities. The proposal amends provisions across Parts 20, 30, 37, 50, 72, 110, 150, 170 and 171 to integrate fusion machines into the byproduct material structure.

The Fiscal Year 2026 National Defense Authorization Act Expands Defense Procurement Sourcing Restrictions Related to Critical Minerals and Advanced Batteries

The Fiscal Year 2026 National Defense Authorization Act (FY 2026 NDAA), signed into law on December 18, 2025 (Pub. L. 119-60), includes several provisions affecting critical mineral and materials sourcing for DoD procurements. Many of these changes will be implemented through updates to the Defense Federal Acquisition Regulation Supplement (DFARS), particularly restrictions under 10 U.S.C. § 4872 (covered materials) and related DFARS clauses. These include adding additional materials subject to sourcing restrictions from China, Russia, North Korea and Iran, and clarifying timelines for entry into effect of certain restrictions. The FY 2026 NDAA also provides for a new battery-related prohibition tied to foreign entities of concern (FEOCs) and for opportunities for stakeholder and private sector engagement to accelerate compliance with DFARS sourcing restrictions. These provisions have significant implications for contractors and sub-contracts (at all tiers) supplying material for or incorporated into DoD contracts including related to compliance with the restrictions and opportunities to supply DFARS-compliant material.

Ninth Circuit Rules That Federal Courts May Invalidate Arbitration Agreements Implemented to Subvert an Ongoing Class Action

The Ninth Circuit has ruled that the broad authority that FRCP 23(d) grants federal judges to oversee class actions includes the power to invalidate arbitration agreements where their rollout appears designed to prevent or discourage class member participation.

NIST Launches AI Agent Standards Initiative and Seeks Industry Input

In January and February 2026, the National Institute of Standards and Technology (NIST), through its Center for AI Standards and Innovation (CAISI), launched a new AI Agent Standards Initiative to support the development of interoperable and secure AI agent systems, issued a Request for Information (RFI) on securing AI agent systems, and announced a series of virtual listening sessions to identify barriers to artificial intelligence adoption, including in the financial sector.

Cal/OSHA Proposes Inspection “Walkaround Rule”

As previously alerted, federal OSHA’s May 2024 walkaround rule clarified that employees, like employers, have the right to designate a non-employee third party to be their representative during worksite inspections. If federal OSHA establishes a new standard, state-plan states such as California must adopt their own standard that is at least as effective as the new federal standard within six months. (See 29 CFR 1953.5(a)(1).) Although late, in February 2026, Cal/OSHA published a Notice of Proposed Rulemaking seeking to add a section to the California Code of Regulations titled, “Regulating the Process for Representatives of Employers and Authorized Representatives of Employees to Accompany the Division During Workplace Inspections.” The proposed new 8 C.C.R. section 331.8 consists of four subsections, which are summarized below.

Enforcement Landscape Heightens Risk Around Surveillance Pricing in California and at the Federal Level

California has entered 2026 with an aggressive enforcement posture toward surveillance pricing—the practice of using consumer personal information to set individualized prices for goods or services. The California Attorney General (AG) has explicitly linked this practice to potential violations of the California Consumer Privacy Act, as amended, (CCPA) and has begun formal investigative sweeps targeting businesses across retail, grocery and hospitality sectors. Meanwhile, California’s parallel antitrust reforms (AB 325) targeting algorithmic pricing deepen legal exposure for companies that use shared or data‑driven pricing systems.

DOJ’s First Antitrust Whistleblower Award: The New “Race to Report” and What Companies Should Do Now

On January 29, 2026, the U.S. Department of Justice (DOJ) announced the first whistleblower reward payment under the Antitrust Division’s Whistleblower Rewards Program. DOJ reported that it paid $1 million to an individual whose information contributed to criminal charges and a deferred prosecution agreement (DPA) with EBLOCK Corporation, under which EBLOCK agreed to pay a $3.28 million criminal penalty. DOJ’s program guidance contemplates potentially significant awards for eligible whistleblowers, subject to eligibility requirements and DOJ discretion.

A Sea Change in California Antitrust Law? CLRC Single-Firm Proposal Raises the Stakes for Algorithmic Pricing

On January 20, 2026, California Law Revision Commission (CLRC) staff circulated a draft final recommendation addressing single-firm conduct. The proposal recommends amending the Cartwright Act, California’s antitrust statute, by creating new prohibitions against single-firm conduct, which would add new Sections 16729–16731 to the Business and Professional Code. “Single-firm” (or “unilateral”) conduct simply refers to conduct that a company engages in on its own, as opposed to through agreements or coordination with other unrelated parties (i.e., other companies, associations or individuals who are not under common control). The CLRC’s recommendations do not change the law unless and until the California Legislature enacts them.

Treasury Issues Request for Information on CFIUS Known Investor Program

On February 6, 2026, the U.S. Department of the Treasury (Treasury) issued a Request for Information (RFI) seeking public input on CFIUS Known Investor Program (KIP). The RFI signals Treasury’s intent to formalize and begin implementation of the KIP announced in May 2025.

Fourth Circuit Holds That Anti-DEI Executive Orders Are Likely Not Facially Unconstitutional

On February 6, 2026, the U.S. Court of Appeals for the Fourth Circuit issued a final Order in the case NADOHE v. Trump, permanently vacating a district court’s preliminary injunction against several provisions of Executive Order (EO) 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (as discussed in a previous client alert, the Fourth Circuit temporarily stayed the injunction in March 2025). The EOs sought to deter diversity, equity, and inclusion (DEI) initiatives. The plaintiffs challenged the provisions that directed federal agencies to terminate all “equity-related” grants and contracts, to require all federal funding recipients to certify that they do not “promot[e] DEI” that violates antidiscrimination laws, and to identify targets for civil investigations into “illegal DEI.” The plaintiffs—an association of diversity officers in higher education, an association of university professors, and the City of Baltimore—argued that these provisions were facially unconstitutional under the First Amendment and Fifth Amendment. While the Fourth Circuit held that the “plain text” of the EOs alone did not provide enough of a foundation for an injunction that relied on a facial challenge, the court’s decision did not rule out future challenges to the Trump administration’s interpretation and application of the EO provisions.

New Executive Order Seeks to Limit Stock Buy Backs and Executive Compensation for Underperforming Defense Contractors (Part 2)

(This is the second of two alerts examining this issue.)
In Part 1 of this client alert, we briefed the substance of President Trump’s January 7, 2025, Executive Order (EO) titled “Prioritizing the Warfighter in Defense Contracting” and provided preliminary observations. As we detailed, the EO gives broad discretion to the U.S. Secretary of War to designate underperforming contractors and directs the Secretary, within 30 days of the EO’s issuance and on an ongoing basis thereafter, to notify defense contractors of such designations. The 30-day deadline for the Secretary to designate underperforming contracts is February 6, 2026. Contractors receiving a notice of underperformance on February 6 will only have until Saturday, February 21 to submit to the Secretary a remediation plan that has the approval of their Board of Directors. While the EO directs the Secretary to allow fifteen days for contractors to submit a Board-approved remediation plan, the EO also allows the Secretary to initiate immediate action if the contractor and Secretary reach an impasse during the 15-day negotiation window. Part 1 of this Client Alert advised defense contractors to identify issues related to delivery, quality, schedule and cost of their existing defense contracts. This second part expounds upon how organizations can best prepare to react to underperformance notices from the Secretary.

Congressional Investigations to Take Center Stage in 2026

With a narrow Republican majority in the House, a crowded election-year calendar and the midterm elections already looming, congressional leaders are leaning heavily on oversight and investigations as their tool of choice. Passing major legislation will be difficult. Investigations, by contrast, can be fast, flexible and highly visible—and they allow lawmakers to shape policy debates, apply pressure and generate headlines without moving a bill.

New Executive Order Seeks to Limit Stock Buy Backs and Executive Compensation for Underperforming Defense Contractors

On January 7, 2026, President Donald Trump issued the “Prioritizing the Warfighter in Defense Contracting” Executive Order (EO). The EO directs the U.S. Secretary of War (Secretary) to establish a process for reviewing defense contractors for critical weapons, supplies and equipment that, as determined by the Secretary, are underperforming on their contracts; have not invested sufficient capital in necessary production capacity; have not sufficiently prioritized U.S. government contracts; or maintain insufficient production speed. The EO does not provide guidance as to any specific criteria to be used in determining what constitutes underperformance, granting full discretion to the Secretary.

Early EU and UK Responses to President Trump’s Announcement of Tariffs Linked to Greenland and Potential Paths Forward

On January 17, President Trump posted on social media that the United States would impose a 10% tariff effective February 1 on eight European countries (France, Germany, UK, Netherlands, Denmark, Norway, Sweden and Finland) until those countries accept his demand that the Danish Realm sell Greenland to the United States. The social media post indicated that the tariff rate would rise to 25% on June 1, 2026, if no “deal is reached for the Complete and Total Purchase of Greenland.” As of publication of this alert, the Trump administration has yet to publish any Executive Order or other formal announcement, and circumstances on the ground could change rapidly with contemporaneous political discussions over Greenland in Davos.

Revenge of the Lawn: The Fifth Circuit Supports Fund Manager Social Security Tax Planning in Sirius Solutions

In Richard Brautigan’s 1971 novella Revenge of the Lawn, an ordinary, inanimate bit of outdoor space strikes back in unforeseen and disruptive ways when mistreated. (The scenes with the geese are priceless.) A powerful analogy can be drawn from this story about the revenge of little things to the mass challenges made by the Internal Revenue Service (IRS) to limited partnership (LP) structures employed by private fund managers to mitigate the impact of 3.8% social security taxes. The LP structures were popular until the 2023 Tax Court decision in Soroban Capital Partners v. Commissioner upended such planning. While a 2024 Tax Court case supported the IRS’s challenges to LP tax planning, on January 16, 2026, in Sirius Solutions, I, LLP v. Comm’r, the Fifth Circuit Court of Appeals held that these strategies work to prevent the imposition of self-employment taxes.

FCC Announces Seminal Enforcement Action for Violating Team Telecom Commitments

On January 8, 2026, the U.S. Federal Communications Commission (FCC) announced the resolution of a first-of-its-kind enforcement action targeting Marlink Inc. (Marlink) for violations of its international section 214 and earth station authorizations (Authorizations), which had been conditioned on compliance with commitments and undertakings in a 2022 Letter of Agreement (LOA) with the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Service Sector (Team Telecom). Following a referral from the U.S. Department of Justice (DOJ), the FCC Enforcement Bureau uncovered a continuing failure to comply with commitments to restrict foreign employee access to U.S. customer information and communications infrastructure (U.S. Records), absent prior approval from the DOJ. The FCC and Marlink entered into a consent decree, including monetary forfeiture, compliance plan, and revision of internal controls, to resolve the violation of FCC rules.

FTC Announces HSR Threshold and Filing Fee Increases for 2026 Transactions

As a result of the increase in the U.S. Gross National Product (GNP) for 2025, the Federal Trade Commission (FTC) has announced an increase in the jurisdictional filing thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR). The minimum size of transaction threshold will increase by $7.5 million, a 5.9% increase, to $133.9 million. The thresholds determine whether parties involved in proposed mergers, consolidations, or other acquisitions of voting securities, assets, or unincorporated interests must notify the FTC and the Antitrust Division of the U.S. Department of Justice of a proposed transaction and comply with a mandatory waiting period before the transaction may be consummated. The revised thresholds will take effect on February 17, 2026. Until then, the current $126.4 million threshold is still in effect.

New Year, New Benefits: Trump Accounts Offer a New Opportunity for Employer-Sponsored Benefits

On July 4, 2025, President Trump signed into law the One, Big, Beautiful Bill Act (OBBBA), which, among many other provisions, created a new type of tax-favored account for children known as a “Trump Account.” On December 29, 2025, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2025-68, outlining their intent to issue regulations under newly enacted Section 530A of the Internal Revenue Code (IRC) and providing extensive interim guidance.

President Trump Signs Holding Foreign Insiders Accountable Act into Law

On December 18, 2025, President Trump signed the 2026 National Defense Authorization Act, which includes the Holding Foreign Insiders Accountable Act (the HFIAA), expanding the scope of beneficial ownership reporting obligations to the directors and officers of foreign private issuers (FPIs), effective on March 18, 2026. The HFIAA amends Section 16(a) of the Securities Exchange Act of 1934 (the Exchange Act) such that securities issued by FPIs will no longer be exempt from Section 16(a)’s disclosure requirements with respect to such FPI’s officers and directors.

Data Center Development at Brownfields Sites

Due to an unprecedented surge in data creation and consumption driven primarily by the rapid rise of artificial intelligence (AI) and cloud services, demand for computing power is increasing and data center development has become necessary to meet consumer, commercial and governmental needs.

Lessons from a Major Software Sunsetting: Contractual and Post-Contractual Best Practices

Imagine this: You receive a cheerful “product evolution” email from the vendor providing a critical technology that you rely on to run your business. It says that critical system is being sunset. Your sales rep calls you and assures you that a replacement platform will of course be offered … for a price. The cheery emails and promises of something better mask a stark reality: a business-critical tool is going away on someone else’s timetable. Your operations depending on that system now face disruption, unplanned costs and compressed migration timelines.

FY 2026 NDAA Includes New Statutory Framework for Outbound Investment Restrictions

The Fiscal Year 2026 National Defense Authorization Act (NDAA), which was signed into law on December 18, 2025, includes the Comprehensive Outbound Investment National Security Act of 2025 (“COINS Act” or the “Act”), which establishes a statutory framework to prohibit or require notification of certain outbound investments by U.S. persons in technology sectors deemed sensitive to U.S. national security. The COINS Act largely builds on the outbound investment regime implemented towards the end of the Biden administration under Executive Order (EO) 14105 and the U.S. Department of the Treasury’s existing regulations at 31 CFR Part 850 (the “Outbound Investment Regulations”), which went into force on January 2, 2025. (Our previous coverage on the Outbound Investment Regulations implemented under EO 14105 is available here.)

VC Firms Face New California Reporting Mandate

This alert expands upon Pillsbury’s earlier overview of California’s diversity disclosure legislation, “California Bill Designed to Support Underrepresented Entrepreneurs Signed into Law.” Since the law’s passage, the California Department of Financial Protection and Innovation (DFPI) has assumed oversight of the Venture Capital Diversity Reporting Program from the Civil Rights Department and is now developing the survey and reporting process that venture and private investment fund managers must follow under Senate Bill 54 (SB 54), as amended by Senate Bill 164 (SB 164).

California’s AB 692 Significantly Restricts “Stay-or-Pay” and Repayment Provisions in Employment Agreements

California Assembly Bill 692 (AB 692) adds new restrictions on employment contract repayment clauses, commonly referred to as “stay-or-pay” provisions. Effective January 1, 2026, the law broadly prohibits employers from requiring employees to repay sign-on bonuses, training expenses or other employment-related benefits upon separation, except in limited circumstances.

FCC Implements Categorical Prohibition on All Foreign-Produced UAS and UAS Critical Components

On December 22, 2025, the U.S. Federal Communications Commission (FCC) Public Safety and Homeland Security Bureau (PSHSB) issued a Public Notice announcing the addition of nearly all “uncrewed aircraft systems (UAS) and UAS critical components produced in a foreign country” to the Covered List. The action effectively prohibits any foreign-made, including U.S.-owned but produced abroad, UAS and critical components from being imported, marketed, or sold in the United States, regardless of specific country of origin or whether the UAS is intended for commercial, military, or personal use. The action also broadly defines UAS critical components using a non-exhaustive list that includes sensors, cameras, communications devices, motors, and batteries, as well as all associated software, capturing nearly all the major components of a UAS. This marks the first time the Covered List has been employed to restrict an entire product category.

NYS LLC Transparency Act Becomes Effective

New York State is the only state to have enacted a beneficial ownership disclosure law modeled on the federal Corporate Transparency Act (the “CTA”). This law, named the “LLC Transparency Act” (the “LLC TA”), becomes effective on January 1, 2026.

Cannabis Rescheduling Creates Tax Opportunities and Challenges

On December 18, 2025, President Trump ordered the Attorney General to reschedule cannabis from being classified as a Schedule I controlled substance to a Schedule III controlled substance. This change will reduce federal income tax burdens on cannabis companies. Under current law, such tax burdens frequently approach 70%. But one unanswered question is when the change will take effect. In the linked White Paper, Mark Leeds and Christine Tsai, both members of the Pillsbury Tax Department, explore tax planning opportunities for cannabis companies to address the possibility of delayed implementation of tax relief.

FCPA Enforcement After the Pause: What Early Cases Reveal

The U.S. Department of Justice (DOJ) has now spent several months enforcing the Foreign Corrupt Practices Act (FCPA) under the revised framework adopted after the February 10, 2025, pause mandated by Executive Order 14209. In the period following the pause, DOJ has begun to translate that framework into concrete enforcement activity, with the Smartmatic corporate indictment and the Comcel/Millicom deferred prosecution agreement (DPA) emerging as the two most significant post-pause actions to date. Post-pause directives have seemed to refocus DOJ’s attention on corporate actors, particularly those operating in sectors that intersect with national security and critical infrastructure priorities, and where companies are now expected to identify and self-disclose potential issues far earlier to receive meaningful consideration under the Department’s evolving enforcement policies. For companies, these developments show that DOJ’s new approach has immediate consequences, so it is important to reevaluate FCPA risks now and make sure compliance programs meet the Department’s changing expectations.

Government Accountability Office Publishes Fiscal Year 2025 Bid Protest Statistics

On December 12, 2025, the Government Accountability Office (GAO) published its Bid Protest Annual Report to Congress for Fiscal Year 2025. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for FY 2025 bid protest activity. The report also includes a chart providing similar bid protest statistics for fiscal years 2021–2025. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

DOJ–DHS Trade Fraud Task Force Debuts with Sweeping China-Related Enforcement Actions

On December 18, the U.S. Department of Justice (DOJ) and U.S. Department of Homeland Security (DHS) announced the first set of enforcement actions involving the newly formed DOJ–DHS Trade Fraud Task Force. Collectively, the settlements underscore the Task Force’s early focus on alleged customs, tariff and trade fraud involving imports from China.