USA Business Digest: March 2023

April 3, 2023 | Newsletters

Authored by Manny Schoenhuber

Welcome back to the sixth edition of USA Business Digest – A Legal Newsletter for European Companies and Investors in the United States. As the first quarter of 2023 comes to a close, it’s time to provide an update on the latest legal developments in the U.S.

This month, we will take a closer look at (1) a proposed U.S.-EU deal on critical mineral and battery supply chains; (2) the Department of Energy’s $6 billion funding for industrial decarbonization projects; and (3) the FTC’s proposed ban on noncompetes and restrictions on NDAs.

As always, this update is available in both English and German.


US and EU Take Steps Toward Deal on Critical Mineral and Battery Supply Chains

The U.S. and EU announced in a joint statement that they are committed to working together on diversifying critical mineral and battery supply chains in hopes of relieving tension over the Inflation Reduction Act. They also move toward a deal to have critical materials that were sourced or processed in the EU to be treated as if they were sourced in the U.S.

Per the joint statement, they specifically “begin negotiations on a targeted critical minerals agreement for the purposes of enabling relevant critical minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act.”

To prevent any additional future incentives disputes between the U.S. and EU, they also agreed on a transparency dialogue, so that both sides will stay informed on what incentives are offered to the cleantech industry and so that they can jointly support them.

Lastly, the joint statement includes a plan toward finalizing an “ambitious outcome” for trade arrangements in the steel and aluminum sectors by October to encourage low-carbon-intensity steel and aluminum production. ♦


Department of Energy Pledges $6 Billion for Industrial Decarbonization Projects

Under the Industrial Demonstrations Program, the U.S. Department of Energy announced it is pledging $6 billion for decarbonization projects in energy-intensive industries to reduce emissions, strengthen local manufacturing, and meet the goal of a net-zero economy by 2050.

The program will focus on the highest-emitting industries, including chemicals, aluminum, iron and steel, cement and concrete, and paper and pulp. To solicit applications for the initiative, the DOE said it expects to award up to 65 projects in high greenhouse gas-emitting industries.

Concept papers from interested applicants are due by April 21st, with full applications due by August 4th. ♦


FTC Proposed Outright Noncompete Ban and Restrictions on NDAs

The Federal Trade Commission recently proposed an outright ban on noncompete agreements, and the new rule would “provide that it is an unfair method of competition for an employer to enter into or attempt to enter into a non-compete clause with a worker; to maintain with a worker a non-compete clause; or, under certain circumstances, to represent to a worker that the worker is subject to a non-compete clause.” The proposed rule would act retroactively and require employers to actively rescind noncompete agreements.

Moreover, the proposed rule would also impact nondisclosure agreements. To be specific, NDAs that function as de facto noncompete agreements would also be retroactively banned, thereby potentially making it very problematic for industries that rely on trade secrets and other proprietary information to sustain their competitive advantage.

It is very likely that the proposed FTC rule will be promptly and vigorously challenged. ♦

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