Episode 452: The Legal Landscape in 2025: What to Expect with Big Government Changes

Podcast: Play in new window | Download | Embed

Subscribe Apple Podcasts | RSS | Subscribe:

Previously we covered what taxpayers should plan for in light of the recent United States presidential election and its results. Of course, there’s much more to consider than just taxes, so this week we are considering the legal landscape in 2025 and what various business owners should expect going into the new year.

The Biggest Takeaway is That the Regulatory Environment is Going to Ease in Most Areas

One of the Trump campaign’s overarching themes was reducing the regulatory reach of the federal government. So far, comments from the incoming Trump administration suggest that it will follow through with slashing federal regulations.

Some industries and segments of the economy will feel this impact more than others. In particular, the energy and consumer finance industries will be on the front of this regulatory pullback.

The Biden administration’s relationship with oil and gas companies (federal land leasing for oil drilling, in particular) was a subject of discussion the previous four years. The Trump administration will likely roll back some of the regulations concerning federal land leasing requirements, making it easier for these companies to expand their oil and gas drilling and extraction operations.

Consumer finance is another industry that will probably see some regulatory easing with the new president. The Consumer Financial Protection Bureau (CFPB) has recently developed and put in place various regulations aimed at banks and lending institutions. These regulations limit certain fees that banks can charge their customers. The CFPB has also created similar fee-limiting regulations at airlines, capping what airlines can charge for certain services. While it isn’t clear what will happen to the regulations already on the books, it is probable that the CFPB will have less influence in regulating industries.

Overturning the Chevron Doctrine Will Also Have Regulatory Impacts

In fact, a notable Supreme Court decision came down earlier in 2024 that will steer the regulatory direction further.

The Chevron Doctrine, in place for more than 40 years, was overturned in June. This legal concept required courts to accept a federal regulatory body’s “reasonable interpretation” of the regulations they pass. In other words, the Chevron Doctrine required courts to give preference to the federal regulator’s perspective when making legal judgements.

Now that the Chevron Doctrine has been overturned, courts now have the latitude to interpret regulatory language as it sees fit, which may be in contradiction to what federal regulators intended. In effect, federal regulators will have less power to enforce their actions through the courts.

One Example of Regulatory Changes is with Nondisclosure Agreements and Covenants

It’s still too early to make firm predictions on what the legal landscape will look like in 2025 and what regulatory bodies will be targeted by the Trump administration. However, there is one example of what these changes might look like for business owners – nondisclosure agreements and covenants.

Non-disclosure agreements are made between employers and employees – typically new hires. They restrict what the employee may do with the inside knowledge they gain by working with the business. This includes trade knowledge, customer lists and other important company assets.

Non-disclosure agreements and covenants are a matter of debate because they can either be too restrictive (which makes it difficult for employees to work in the same industry if they leave the business) or too lax (which exposes the employer to significant risk). While campaigning, the Biden administration stated that it would make employer-employee non-disclosure agreements difficult to enforce – coming down on the employee’s side in this regard.

The Trump administration will likely take a different approach. Currently, covenant agreements are enforced at the state level and are therefore enforced differently all over the country. If the Trump administration does differ from the democrats in this area, it may keep the existing state-level regulations in place for non-disclosure agreements. As such, it’s important for employers and employees to check with their state’s restrictions on covenant agreements before authoring or signing the document.

The Legal Landscape in 2025 will Bring Changes, but a Trusted Attorney Can Help You Be Prepared

With a new executive in place and control shifting in the legislature, 2025 will be a year of transition and change. Many of these changes will be aimed at drawing down the regulatory strength to the federal government, which will have impacts on industry and the economy.

If you own a business or are planning on making a major life change in 2025 – like switching jobs or retiring – an experienced attorney can advise you on how to proceed and what to consider so you won’t be caught off guard in the new year.

By Harold "Hap" May, P.C. on January 3, 2025   /   The Legal Play Podcast   /   Leave a comment