Webster’s Wisdom 

Tariffs and Antitrust

With tariffs potentially significantly impacting many industries, they are a natural subject of discussion among association members, including at association events and association online forums. Because one possible result of tariffs, depending on the industry, could be higher prices, it is important to be careful that these conversations do not become a mechanism for competitors to discuss their future pricing plans. This is the warning the new Chairman of the Federal Trade Commission Andrew Ferguson recently gave in a message on X:

“President Trump is reorienting our nation’s economy to put Americans first. As we adjust to the new economic order, the FTC will be watching closely to make sure American companies are vigorously competing on prices. These necessary tariffs should not be interpreted as a green light for price fixing or any other unlawful behavior.”

 Status of the federal Corporate Transparency Act

The Financial Crimes Enforcement Network (FinCEN), on March 26, adopted an Interim Rule that exempts all US entities from the registration and reporting requirements of the Corporate Transparency Act (CTA), including providing the beneficial ownership information (BOI). All domestic entities created in the United States, and their beneficial owners, are exempt from the requirement to file initial BOI reports, or to update or correct previously filed BOI reports. This includes companies previously known as “domestic reporting companies.” As a result, the only entities required to report BOI under the CTA will be foreign entities registered to do business in the United States.

The CTA has been controversial from its enactment. The original rule, which would have required most US small businesses to register with FinCEN, has been the subject of several lawsuits and injunctions. This latest development appears to achieve a resolution, at least for the next several years.

 EEOC Issues Guidance on Illegal DEI in the Workplace

 On March 19, the US Equal Employment Opportunity Commission (EEOC), as a follow up to the Presidential Executive Orders on DEI, released a question-and-answer technical assistance document, “What You Should Know About DEI-Related Discrimination at Work.” This document addresses unlawful discrimination related to “diversity, equity, and inclusion” in the workplace. Under Title VII of the Civil Rights Act of 1964 - which prohibits employment discrimination based on protected characteristics such as race and sex - DEI initiatives, policies, programs, or practices may be unlawful if they involve an employer taking an employment action motivated—in whole or in part—by an employee’s or applicant’s race, sex, or another protected characteristic.

 One question addressed in this new EEOC guidance is whether an employer can justify taking an employment action based on race, sex, or another protected characteristic if the employer believes more “diversity” in its workforce is a business necessity. The EEOC answers this question as follows: “No. Employers violate Title VII if they take an employment action motivated—in whole or in part—by race, sex, or another protected characteristic. Title VII explicitly provides that a demonstration that an employment practice is required by business necessity may not be used as a defense against a claim of intentional discrimination.”

 DOJ Gets First “Wage Fixing” Criminal Conviction

So-called “wage fixing,” in which competitors agree on compensation levels for certain types of employees, has been a priority of the Antitrust Division of the US Department of Justice for several years. The purpose, and often the result, of these kinds of agreements is to suppress competition among the conspirators for these workers. DOJ has brought several criminal cases against various firms and executives, but has yet to secure a conviction, until now. In mid-April, a jury in Las Vegas, Nevada convicted the owner of a home health agency of conspiring to artificially cap the wages of home healthcare nurses in the Las Vegas area between March 2016 and May 2019, affecting the wages of hundreds of Las Vegas registered nurses and licensed practical nurses who provide care to patients in their homes.

Certification Liability

Is an association that operates a certification program liable for harm caused by the negligent conduct of a person who holds that certification? In most situations, the answer is “no.” The handful of courts that have considered this question have held that a certifying association has no legal duty to persons who may be harmed by a certificant, either because certification is not a guarantee of competent performance, or because there are so many intervening causes that any fault of the certifying association is too attenuated. There are exceptions, but that is the general landscape.

However, there are still attempts to impose liability. The most recent is a lawsuit arising out of severe injuries suffered by an individual in connection an amusement park ride. The individual and her family have sued several parties, including the owner of amusement park and the manufacturer of the ride. Also sued is the National Association of Amusement Ride Safety Officials (NAARSO), a nonprofit association that, among other things, offers certifications for safety professionals who inspect amusement rides. According to the complaint, the employee of the amusement park who was in charge of the safety of the rides had participated in NAARSO safety and training courses, including a certificate program, and was considered at least a candidate for certification. The allegation against NAARSO is that its training, education, courses, certificates, etc. were deficient and did not adequately prepare this particular inspector. This lawsuit has only recently been filed, but it bears watching as it progresses.

Ziner v Knoebels Amusement Resort, et al. (Pa. 2025).

Association’s Scholarship Program May Violate Federal Civil Rights Law.

The National Association of Emergency Medical Technicians (NAEMT) is a 501(c)(6) national membership association comprised of emergency medical responders, such as paramedics, emergency medical technicians, and other medical professionals who provide urgent medical care. NAEMT offers a scholarship program for its student members who have demonstrated a “commitment to entering the EMS profession, financial need, service to the community, and ability to serve as a positive ambassador for the EMS profession.” Only “students of color” are eligible to receive a scholarship under this program. A member of NAEMT sued NAEMT, arguing that this race restriction violates 42 U.S.C. §1981, which is a federal civil rights statute that prohibits race discrimination in contracts. NAEMT argued that the plaintiff is eligible for other scholarships offered by NAEMT and therefore has not suffered any harm by being excluded from this particular scholarship. The court disagreed, saying if the plaintiff in fact “was denied the opportunity to compete on equal footing with applicants of color because of her race, … [then] NAEMT’s diversity scholarship would pose a race-based barrier to [the plaintiff] that may violate §1981.”

Do No Harm v. National Association of Emergency Medical Technicians (S.D. Miss. 2025).

Comment: This ruling is not a final ruling by the court, but it is a strong indication of the court’s view of this NAEMT scholarship program. Legal challenges to scholarships and similar offerings by associations that have a racial component continue to be filed. Among associations recently sued are the American Chemical Society and the American Bar Association.

Nonprofit Ratings Organization Cannot Dismiss Lawsuit

The Monterey Bay Aquarium Foundation is a nonprofit corporation that operates Seafood Watch, a program that issues consumer- and business-facing ratings and recommendations for seafood sources, which are purportedly based on assessments of environmental sustainability and supported by scientific data. Seafood Watch seeks and secures commitments from major seafood industry buyers to follow its recommendations and purchase only products that the Foundation has deemed environmentally sustainable. In arriving at its recommendations, the Foundation claims to review “all available scientific data” and follow a “rigorous, transparent, science-based process to evaluate the current environmental performance of a fishery.” The Foundation assigns the seafood being reviewed a color-coded “overall recommendation.” Seafood given a “red” rating, for example, “comes from sources that don’t align with [the Foundation’s] guiding principles,” and therefore the Foundation advises against buying that seafood. In 2022, Seafood Watch assigned Maine lobster a “red” rating.

Several lobster companies and associations sued the Foundation for trade defamation based on the “red” rating and several statements by the Foundation about seafood that receives such a rating. The plaintiffs argued that the rating and the statements falsely malign American lobster. The Foundation sought to dismiss the lawsuit on various grounds, but the court rejected them all at this stage in the litigation, saying: “Taking all plausibly alleged facts as true for the purposes of evaluating this motion to dismiss, Plaintiffs have alleged sufficient specific facts to allow the Court to make a reasonable inference that the Foundation ignored information as in conflict to their desired conclusion and, in doing so, acted with reckless disregard for the truth.”

Bean Maine Lobster, et al. v. Monterey Bay Aquarium Foundation (Me. 2025).

AI Authored Material Not Subject to Copyright Registration

In 2019, Dr. Stephen Thaler submitted a copyright registration application to  the  US Copyright  Office  for  an  artwork  created entirely by artificial intelligence software. The  Copyright  Office  denied  Dr.  Thaler’s  application because “a human being did not create the work” and therefore the work lacks “sufficient creative input or intervention from a human author.” Dr. Thaler appealed this ruling to federal court, arguing that “the  Human  Authorship  Requirement  is  unconstitutional  and  unsupported  by  either  statute  or  case  law” and, further, that “judicial opinions ‘from the Gilded Age’ could not settle the question of whether computer generated works are copyrightable today.”

Dr. Thaler has lost in every court, culminating in his most recent, and probably final, loss in a federal court of appeals. The appeals court affirmed the position of the Copyright Office, saying: “The current Copyright Act’s text, taken as a whole, is best read as making humanity a necessary condition for authorship under the Copyright Act.”

Thaler v. Perlmutter (D.C. Cir. 2025).

Nonprofit Director Owed Fiduciary Duty to the Association, Not its Members

A member of the Board of Directors of a nonprofit association was sued for violating his fiduciary duty based on actions that were unfavorable to a particular member company. That member company sued the director, alleging that he owed the association membership a fiduciary obligation to act in their best interests, not solely the interests of the association. The court disagreed:

“Case law supports the proposition that [a nonprofit director’s fiduciary duty] is limited to the entity and does not extend to the entity’s members….None of the facts that Plaintiff alleged about the nature of the relationship between [directors] and [members] specifically demonstrates a special relationship of trust or confidence that would give rise to a fiduciary duty.”

Sports Enterprses, Inc. v. Goldklang (N.J. 2025).

New Database of Antitrust Fugitives

The US Department of Justice Antitrust Division and the FBI recently jointly announced the launch of a new online portal for information on international fugitives who have been charged with antitrust offenses and other crimes affecting the competitive process, https://www.justice.gov/opa/pr/justice-departments-antitrust-division-and-fbi-launch-online-portal-enhance-departments.

Sports Organization Sued Over Its Hotel Policy

The US Junior Nationals is a for-profit organization that is the leading national organizer and host of tournaments for youth basketball clubs. Its tournaments attract agents and college and pro scouts. In fact, according to a recently filed class action lawsuit against US Junior Nationals, “in many instances, participants have no meaningful choice but to play in a tournament run by USJN because, as a result of its incredible market power, there are no other basketball tournaments available that are practicable to attend, and no readily available substitutes.”

Because most of these tournaments are not local to the participants, securing lodging is often a necessary aspect of any tournament trip for the teams and their families that participate. According to the complaint, US Junior Nationals requires players and their families to stay at specific designated hotels. In fact, doing so is a condition of playing in the tournament. This so-called “Stay to Play” rule is the focus of the lawsuit and is alleged to be anti-competitive. The core allegations are these:

“Through the implementation of Defendant’s ‘Stay to Play’ policy as described herein, Defendant uses its control over high school sports tournaments to exclude competition among accommodation providers or to gain control over the market for tournament-related hotel bookings. Instead, Defendant is attempting to create, and has in fact created, a monopoly in the market for accommodations for its tournament participants. Rather than permitting participants to select accommodations that meet their specific needs, Defendant requires every participant to stay at the limited collection of hotels that financially benefit it. Defendant’s Agreements as described herein constitute an attempt to monopolize trade or commerce in the travel market for tournament participants in as those terms are used in the Sherman Act.”

Martinez v. US Junior Nationals, Inc. (E.D. Pa. 2025).