Labor and Employment Law Blog
Labor and Employment
Visa Uncertainty: The Presidential Proclamation on H-1Bs and a $100,000 for New Petitions
On September 19, 2025, the Trump administration issued a Presidential Proclamation “Restriction on Entry of Certain Nonimmigrant Workers,” effective at 12:01 a.m. September 21, 2025. The Presidential Proclamation specifically targets H-1B Visa Holders who are outside of the United States. Any H-1B visa holder attempting to enter the United States after the effective date must be accompanied by proof of payment of an additional $100,000 fee. This action created panic among large H-1B employers and employees as employees scrambled to return to the United States before the effective date and time. The Administration, through United States Citizenship and Immigration Services (USCIS), U.S. Customs and Border Protection (CBP), and the Press Secretary’s office, had to “clarify” that their rule was only effective for new H-1B petitions. USCIS Statement attempting to clarify the situation: This proclamation only applies prospectively to petitions that have not yet been filed. The proclamation does not apply to aliens who: are the beneficiaries of petitions that were filed prior to the effective date of the proclamation, are the beneficiaries of currently approved petitions, or are in possession of validly issued H-1B non-immigrant visas. All officers of the United States Citizenship and Immigration Services shall ensure that their decisions are consistent with this guidance. The proclamation does not impact the ability of any current visa holder to travel to or from the United States. Accordingly, individuals in H-1B status in the United States are unaffected. The vast majority of H-1B cases pending for this cap year will also not be affected. Individuals traveling outside of the country with valid H-1B visas or seeking to obtain renewal of an H-1B visa, will also be unaffected. Instead, the focus will be on certain key groups. The first major group will be the new H-1B cap applicants in 2026. These applicants will be required to demonstrate payment of a $100,000 fee before filing their petition with the USCIS. Also, the effective date of the order will directly impact cap-exempt employers looking to hire new workers in H-1B status. These employers tend to be in research, medical, academia, and related fields. It should be noted that there is currently no guidance on how to make the fee payment. Exemptions are also built into the order, but they are not specific. Currently, it appears that they may exist for an individual, a company, or potentially a whole industry, if DHS determines that it is in the national interest of the United States and does not pose a threat to the security or welfare of the United States. Crucially, the Proclamation does not address whether the fee and restriction apply to cap-exempt H-1B workers outside of the U.S., who are typically exempt from the majority of H-1B fees. What should employers do? We currently believe that international travel will not be affected for the vast majority of H-1B visa holders. We recommend all non-immigrant visa holders consult with counsel before international travel, given the current climate. Employers and individuals looking to apply in the 2026 H-1B lottery or seeking employment with a Cap Exempt H-1B employer should seek legal advice immediately. How long is this effective for? The Presidential Proclamation is effective for a period of 12 months. What Happens in the future? The proclamation is likely to face legal challenges as it directly contradicts the will of Congress in the issuance of the H-1B visa program and its implementing regulations, including the introduction of application fees without notice and comment. Entry of nonimmigrants, however, is controlled by the executive branch, so potentially a modified version of this proclamation will continue.
September 22, 2025
Labor and Employment
The FTC’s Noncompete Ban Is Dead – But Enforcement Is Alive and Well
The Federal Trade Commission has officially withdrawn its appeal in Ryan, LLC v. FTC, putting an end to its controversial attempt to ban noncompete agreements through agency rulemaking. That effort may be over, but the commission has made clear that employers are not free to impose noncompetes “willy-nilly.” As FTC Chair Ferguson recently cautioned, the failure of the Biden Administration’s sweeping ban does not mean the agency is abandoning the field. From Rulemaking to Case-by-Case Enforcement Rather than pursuing broad regulations, the FTC has pivoted toward an enforcement model. On September 4, the commission announced a complaint against Gateway Services, Inc. over its use of noncompete clauses. Alongside the complaint, Commissioners Ferguson and Holyoak issued a joint statement emphasizing a new philosophy – using targeted enforcement to signal to the market what the FTC views as unlawful practices. In their words, a “steady stream of enforcement actions” provides transparency and nudges employers toward compliance without sweeping rulemaking. This case-by-case strategy echoes traditional antitrust enforcement – send a clear warning through precedent, not regulation. Public Input Still Matters At the same time, the FTC issued a Request for Information (RFI) seeking data about how noncompetes are used, justified, and experienced across industries. While the agency insists this is not a return to rulemaking, the RFI will likely shape enforcement priorities, especially sector-specific initiatives. Employers with legitimate business interests in protecting trade secrets or client relationships should consider submitting comments before the November 3 deadline to ensure their perspective is not drowned out by opponents. Healthcare in the Crosshairs The FTC has already signaled special scrutiny of healthcare employers. On September 10, Chair Ferguson sent letters to large health systems and staffing firms urging them to review restrictive covenants in their employment agreements. The move is striking given that states already regulate healthcare noncompetes more aggressively than nearly any other sector – dozens of new bills have been proposed in the past year alone. Why the added federal attention? One explanation may be the flood of public comments targeting healthcare during last year’s failed rulemaking process. In other words, political pressure and anecdotal evidence may be driving the FTC’s focus more than labor market data – where healthcare remains one of the strongest employment sectors nationwide. How Employers Can Avoid the “Willy-Nilly” Label The Gateway Services complaint and other FTC actions provide insight into what will draw scrutiny. Employers should work closely with counsel to design noncompete and restrictive covenant programs that focus on legitimate interests rather than blanket employee control. Key considerations include: Legitimate purpose: Use restrictive covenants to prevent unfair competition and protect confidential information, not merely to retain employees or block mobility. Role-specific tailoring: Reserve noncompetes for positions where they are truly necessary (e.g., senior executives, client-facing sales roles). Apply different restrictions for different levels of employees. Narrower alternatives: Consider whether non-solicitation, confidentiality, or customer protection clauses can adequately protect the business. Reasonable scope: Draft restrictions that are proportionate in duration, geography, and covered activities. Agreements that prevent someone from working for a competitor “in any capacity” – say, even as a janitor – are likely to raise red flags. Compliance with state law: Many states have already tightened restrictions on noncompetes. Ignoring state law not only risks invalidation but may also invite FTC scrutiny. The Bottom Line While the federal ban is off the table, the FTC is not retreating. Employers should expect enforcement actions to continue, particularly in sectors like healthcare, and should take this moment to review their agreements. A thoughtful, legally sound approach to restrictive covenants will make it much harder for regulators to paint your practices as “willy-nilly.”
September 18, 2025
Labor and Employment
The Social Media Aftermath of the Charlie Kirk Assassination – Can An Employer Fire An Employee for Offensive Social Media Posts?
In an article in the September 16, 2025, edition of The Washington Post, the lead paragraph read as follows: “The wave of companies and other institutions firing or suspending employees over what they’ve said in reaction to last week’s killing of conservative influencer Charlie Kirk has expanded in recent days, as some of his supporters in and outside the government amp up a push against speech they say crosses lines.” Thus, the question that arises in the minds of both employees and employers related to the voluminous publicity surrounding the recent Kirk assassination is whether an employee’s social media post, which is deemed to be offensive, can justify the potential termination of such an employee. The short answer to this inquiry is that in the private sector, as opposed to the arena of public employment, where First Amendment protections may be applicable, employers have wide discretion to discipline and even fire employees for posts which are deemed to be unduly offensive, inflammatory, or violative of their cultural or internal policies. The caveat for private sector employers is that employees enjoy statutory protections under the National Labor Relations Act for speech of a political or social nature when such speech or posted comment is related to such employee’s workplace’s wages, hours or terms and conditions of employment. Furthermore, employees also enjoy protections under Title VII of the federal Civil Rights Act if, for instance, their social media posts protest discrimination in the workplace, when that alleged discrimination refers to any protected status, such as religion, national origin, race, disability, etc. Private employers would be well-advised in this incendiary political climate to analyze each situation based on the facts and circumstances of the post in question, and to evaluate whether such post is violative of its internal policies, is deemed to be overly inflammatory and/or offensive to a person(s), is disparaging or defamatory to the employer or its employees or customers, is damaging to the company’s reputation or cultivated image, or is deemed to be simply inconsistent with civilized and acceptable societal discourse. In any situation where termination may be predicated upon a social media post and where uncertainty may exist regarding potential legal exposure and/or a looming public relations crisis, it is always advisable for the employer to consult with competent employment counsel and/or a public relations crisis expert. Howard Kurman is a founder of Offit Kurman, a AmLaw 200 law firm. He is a principal in the firm’s labor/employment practice and regularly counsels employers on all facets of employment and labor relations law and practice. To contact Howard, he may be emailed at hkurman@offitkurman.com, or by phone at his office: 410-209-6417.
September 18, 2025
Labor and Employment
Getting Paid for Nothing? The Legal Risks of No-Show Jobs
From political scandals to organized crime cases, the phrase “no-show job” is often associated with something shady. Think HBO’s The Sopranos, where Tony Soprano’s crew collected paychecks on construction sites without having to lift a finger. The idea of being paid well for doing very little — or nothing at all — might sound like a dream job, but it often comes with strings attached. And now, with recent reporting about NBA star Kawhi Leonard’s alleged $28 million endorsement deal, the “no show job” is back in the headlines. What Exactly Is a “No-Show Job”? A “no-show job” is a position where someone collects a paycheck without actually doing meaningful work. In some cases, the person is officially listed on the payroll but may not be expected to report or perform the same duties as other employees or contractors. These arrangements can take many forms, but typically include symbolic titles, roles specifically created for family or friends, or mechanisms for shifting money outside traditional channels. No-Show Jobs in the Private Sector In the private sector, employers have greater latitude to structure compensation as they wish. Executive contracts, retainers, and consulting agreements may guarantee pay, regardless of performance. Still, such arrangements can become problematic if they involve misuse of company resources, breaches of fiduciary duty, or violations of payroll and tax laws. Public Sector and Organized Labor With taxpayer funds, the line is far clearer. “No-show jobs” funded with public money are often the target of federal investigation and have led to convictions for fraud, embezzlement, and corruption. In labor relations, the practice of “featherbedding” (requiring payment for unnecessary work) has been unlawful since the Taft-Hartley Act of 1947, which prohibits unions and employers from agreeing to pay for work not actually performed. Where Sports Money Gets Complicated In professional sports, the legal issues surrounding “no-show jobs” differ from those in ordinary employment. In the NBA, the primary concern is salary cap circumvention. The league’s Collective Bargaining Agreement (CBA) requires that all compensation related to a player’s services be disclosed and counted toward the salary cap, promoting competitive balance among teams. That’s why recent reports involving Kawhi Leonard are drawing attention. According to investigative reporting and bankruptcy filings brought to light by sports podcaster Pablo Torre, a now-bankrupt fintech company allegedly promised $28 million to a Leonard-managed entity in exchange for endorsement duties that Leonard never performed. That company was reportedly tied to Los Angeles Clippers owner Steve Ballmer, which prompts speculation about whether the deal was merely an off-the-books way to supplement Leonard’s NBA compensation with the Clippers. Notably, even if this would be considered a lawful private agreement under general contract law, a hidden “no-show job” arrangement of this kind could be interpreted as an attempt to skirt NBA salary rules. If proven to be the case, the league has the authority to impose penalties, including heavy fines or the loss of draft picks. For now, both Ballmer and the Clippers have denied any wrongdoing. The NBA launched a formal investigation on September 3, but NBA Commissioner Adam Silver recently said the league is not rushing to judgment. Still, the story highlights how compensation structures in sports or business alike can blur the line between creative deal-making and questionable circumvention. Lessons Beyond the NBA For businesses outside the world of professional sports, the Kawhi Leonard headlines offer a reminder that “no-show jobs” can trigger serious problems for employers. Shareholders may view it as misuse of company funds, regulators may question classification of workers, as well as payroll and tax compliance, and company reputation and trust may be at risk. The best practice for all employers is to have a clear record of what each employee on payroll is doing to earn their compensation.
September 11, 2025
Labor and Employment
Department of State Limits Nonimmigrant Visa Applications
On Saturday, September 6th, 2025, the Department of State announced that, effective immediately, all applicants for U.S. nonimmigrant visas (NIV) should schedule their visa interview appointments at the U.S. Embassy or Consulate in their country of nationality or residence. Individuals who currently have appointments booked are advised that their appointments “generally will not be cancelled” – however, no guarantee is made that their NIV will be issued. This policy changes the current guidance for so-called “third country nationals,” i.e., individuals who apply for a visa outside of their home country. It has been a long-standing policy that individuals can apply for an NIV anywhere in the world. Some embassies have pushed back on third-country nationals due to the overwhelming number of requests. Some examples include Canada, Mexico, and smaller consulates such as the Bahamas. This change drastically affects the visa options for individuals from countries with lengthy wait times and delays in visa processing. Indian nationals can no longer avail of interview waivers, and the current NIV wait times of two-three months are set to dramatically increase. This change underlines the importance of planning ahead for travel and understanding all potential risks. Individuals and employers should carefully consider the implications of travel if an individual would be required to travel to another country for an extended period. Finally, individuals with current visa appointments should consult with an immigration attorney to assess the risks of attending their visa interview. What is residency for NIV purposes? No further guidance is provided on what NIV applicants should provide to demonstrate residence in the country in which they are applying. Accordingly, applicants should carefully assess the totality of evidence that they can provide to an Embassy ahead of their appointment. It is advisable to have as much evidence as possible of residency at the interview to avoid any lengthy administrative processing. Exceptions to the rule? The current guidance states that “rare exceptions may also be made for humanitarian or medical emergencies or foreign policy reasons.” With no further guidance immediately available, it is safe to assume that exceptions will be very limited. Typically, humanitarian exceptions can include family unity reasons, as well as deaths or illness within a family, so applicants can potentially advocate for an exception on these grounds. The risks are substantial as the applicant may only be informed that their visa application is not eligible for processing at the interview. Accordingly, caution is advised when exploring exceptions in this area. But what if there is no US Embassy in my home country? Further guidance was provided for NIV applicants where NIV processing is suspended in their home country; they should make an appointment at their designated NIV consulate or embassy: NATIONAL OF DESIGNATED LOCATIONS(S) Afghanistan Islamabad Belarus Vilnius, Warsaw Chad Yaoundé Cuba Georgetown Haiti Nassau Iran Dubai Libya Tunis Niger Ouagadougou Russia Astana, Warsaw Somalia Nairobi South Sudan Nairobi Sudan Cairo Syria Amman Ukraine Krakow, Warsaw Venezuela Bogota Yemen Riyadh Zimbabwe Johannesburg
September 8, 2025
Labor and Employment
Evolving Standards for Religious Accommodations at Work
The legal framework surrounding religious accommodations in the workplace has evolved significantly, driven by recent court decisions, EEOC enforcement actions, and federal guidance. Employers must gain a clear understanding of these changes, to ensure compliance with Title VII of the Civil Rights Act of 1964. With heightened scrutiny on religious exemption requests, particularly in the wake of COVID-19 vaccine mandates, employers must stay informed to avoid costly litigation and foster inclusive workplaces. Key Court Rulings Clarify Religious Accommodation Standards Recent judicial decisions have reshaped how employers must evaluate religious accommodation requests under Title VII. Below are pivotal cases that highlight the courts’ focus on sincerity of belief and the elevated standard for denying accommodations. Second Circuit: Defining Sincerely Held Beliefs In Gardner-Alfred v. Federal Reserve Bank of New York, 143 F.4th 51 (2d Cir. 2025), the Second Circuit offered critical guidance on assessing “sincerely held” religious beliefs in the context of COVID-19 vaccine mandate exemptions. The Federal Reserve Bank of New York (FRBNY) terminated two employees after denying their religious exemption requests. The court’s ruling clarified: Low Threshold for Sincerity: Plaintiff Gardner-Alfred’s exemption request was dismissed due to its reliance on a generic “exemption package” lacking ties to specific religious practices. Employers can expect courts to require detailed, individualized expressions of belief. Inconsistency Does Not Disqualify: Co-plaintiff Diaz’s claim was revived despite inconsistent behavior (e.g., using medications potentially conflicting with her religious objections). The court emphasized that imperfect adherence does not negate sincerity. Misunderstandings Are Valid: Diaz’s objection to mRNA vaccines, based on a mistaken belief about fetal cell lines, was deemed genuine. Employers cannot dismiss requests due to factual inaccuracies. Other Landmark Cases Groff v. DeJoy, 143 S. Ct. 2279 (2023): The Supreme Court raised the bar for denying accommodations, requiring employers to show a “substantial increased cost” or operational burden. This decision significantly strengthens employee protections. Keene v. City and County of San Francisco, No. 22-16567 (9th Cir. 2024): The Ninth Circuit ruled that blanket denials of religious exemptions, without engaging in the interactive process, violate Title VII. Bube v. Aspirus Hospital, Inc., No. 22-cv-745 (W.D. Wis. 2024): A federal district court rejected a hospital’s denial of exemptions based on vague claims of workplace disruption, reinforcing the need for specific evidence of undue hardship. Employers must conduct individualized, respectful inquiries into the sincerity of religious beliefs and avoid denials based on assumptions or skepticism. EEOC’s Robust Enforcement of Religious Rights The Equal Employment Opportunity Commission (EEOC) has intensified its focus on religious accommodations, particularly in response to COVID-19 vaccine mandate disputes. Key developments include: Recent EEOC Appellate Decisions (August 4, 2025) The EEOC’s Office of Federal Operations issued three decisions clarifying accommodation standards: Department of Veterans Affairs: A physician requesting Friday afternoons off for prayer was offered reduced hours or an overly burdensome schedule. The EEOC ruled these options unreasonable, noting that accommodations causing employee disadvantage (e.g., reduced pay) are insufficient. Claims of “low morale” among staff were also deemed inadequate justification. Federal Reserve Board: A law enforcement officer’s exemption request was denied without exploring accommodations or documenting hardship. The EEOC applied the Groff standard retroactively, emphasizing the need for a thorough process. EEOC’s Enforcement Milestones (August 18, 2025) In its “200 Days of EEOC Action to Protect Religious Freedom at Work” press release, the EEOC reported: Over 10,000 charges related to religious accommodations for COVID-19 vaccine mandates More than $55 million recovered for workers, including a $1 million settlement with Mercyhealth Lawsuits against organizations like Silver Cross Hospital and the Mayo Clinic for improper denials of religious exemptions The EEOC is prioritizing robust enforcement, and employers face significant risks for cursory or unsubstantiated denials of religious accommodations. Federal Guidance Promotes Accommodation The Office of Personnel Management (OPM) issued memoranda on July 16 and July 28, 2025, urging federal agencies to adopt a pro-accommodation stance. Key points include: Emphasizing a good-faith interactive process with detailed documentation Encouraging low-cost solutions like telework or flexible scheduling, which require strong justification if denied While directed at federal agencies, these guidelines reflect broader expectations for all employers under Title VII. Practical Steps for Employers To navigate this high-scrutiny environment, employers should adopt the following strategies. Risk Area Actionable Steps Sincerity Challenges Conduct respectful interviews, focusing on the employee’s stated beliefs. Avoid demanding theological proof or overly intrusive inquiries. Undue Hardship Claims Provide specific, data-backed evidence of substantial costs or operational burdens. General claims like “staff discomfort” are insufficient. Manager Training Train supervisors on clear protocols for handling accommodation requests compassionately and escalating them appropriately. Policy Review Update accommodation policies to align with the Groff standard and EEOC’s enforcement priorities. Ensure procedures are transparent and consistent. Documentation Log every step of the interactive process to demonstrate compliance and build a defensible record. The Lasting Impact of COVID-Era Policies The legal and regulatory focus on religious accommodations, spurred by COVID-19 vaccine mandates, has created a lasting shift in employment law. From scheduling adjustments to exemption requests, religious considerations are now central to workplace compliance. Employers must stay proactive, ensuring policies and practices reflect the latest legal standards to avoid litigation and promote a respectful, inclusive workplace.
August 25, 2025
Labor and Employment
Pregnancy and Lactation in the Workplace: Employer Duties Under Federal Law
August is the most popular birth month in the U.S., meaning many employees will return from parental leave this fall and winter with new postpartum needs. Two key federal laws – the PUMP Act and the Pregnant Workers Fairness Act (PWFA) – shape the legal obligations employers must provide to nursing employees and others with pregnancy-related conditions. Understanding these laws is essential for compliance and creating a supportive workplace for new parents. PUMP Act The Providing Urgent Maternal Protections for Nursing Mothers Act (“PUMP Act”), 29 U.S.C. § 218d, signed into law in December 2022, expands protections under the Fair Labor Standards Act (FLSA) for employees who need to express breast milk at work. The PUMP Act requires that employers provide reasonable break time, whenever needed, for an employee to express breast milk for her nursing child during the first year after birth and prohibits denying a covered employee a necessary pumping break. The law also requires employers to provide a space, other than a bathroom, that is shielded from view and free from intrusion by coworkers and the public. These protections apply to nearly all FLSA-covered employees; however, certain employees of airlines, railroads, and motorcoach carriers are exempt from the law, and employers with fewer than 50 employees are not subject to the break time and space requirements if compliance would impose an undue hardship. Even so, employees who are exempt under federal law may still be entitled to protections under state or local laws. The PWFA The Pregnant Workers Fairness Act, 42 U.S.C. §§ 2000gg to 2000gg-6, effective June 27, 2023, requires covered employers to provide reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions, unless doing so would cause undue hardship. Examples of reasonable accommodations under the PWFA include modified work schedules to allow for pumping, additional breaks beyond those required by the PUMP Act, and temporary changes in duties to reduce postpartum physical strain. The PWFA covers private and public sector employers with 15 or more employees, Congress, federal agencies, employment agencies, and labor organizations. 42 U.S.C. § 2000gg(2). Employers can take several proactive measures to comply with the PUMP Act and PWFA while supporting pregnant, nursing, and postpartum employees. Employers should start by reviewing and updating workplace policies to ensure they reflect the requirements of both laws, including clear procedures for requesting accommodations and designating appropriate lactation spaces that meet the PUMP Act standards for privacy and accessibility. Employers should also have processes in place to ensure that managers, supervisors, and HR personnel understand how to promptly respond when an employee raises a pregnancy- or postpartum-related need or accommodation request. Finally, maintaining open communication with employees returning from parental leave by proactively providing information on their rights and the resources available to them can help prevent misunderstandings, reduce legal risk, and foster a more supportive and inclusive workplace culture.
August 22, 2025
Labor and Employment
New DOJ Memo Addresses Legality of DEI Programs for Federal Funding Recipients
On July 30, 2025, the Department of Justice released a memo from Attorney General Pam Bondi offering guidance to federal agencies and recipients of federal funding regarding practices that the administration views as potentially unlawful under federal antidiscrimination laws. While the memo focuses heavily on institutions of higher education, its implications extend to all federal funding recipients, federal contractors, and employers subject to Title VII. The memo outlines the administration’s interpretation of federal law as it applies to diversity, equity, and inclusion (DEI) initiatives and similar programs. It provides examples of practices the DOJ considers unlawful or legally questionable, as well as "best practices" intended to help organizations avoid liability. Key Takeaways Applicability Beyond Higher Education: Although many examples concern colleges and universities, the guidance expressly encourages all entities subject to federal antidiscrimination laws, including public and private employers, state and local governments, and contractors, to review and evaluate their DEI programs. DOJ’s Interpretations Are Not Binding Law: The memo reflects the DOJ’s interpretation of existing law, not a change in the law itself. Courts remain the final arbiters of what federal statutes mean, and state laws may impose different or additional requirements, especially in areas such as transgender rights, where the administration’s views may conflict with both state law and judicial precedent. Examples of Practices the DOJ Views as Unlawful or Problematic Race-Based Scholarships or Opportunities: Programs that limit access to scholarships, internships, or leadership initiatives based on race (e.g., a “Black Excellence Scholarship”) violate federal law unless they meet the very high bar for race-conscious programs. Race-Exclusive Facilities or Resources: DEI initiatives that designate certain physical spaces (e.g., “BIPOC-only lounges”) or create identity-based access restrictions may amount to unlawful segregation or exclusion, even if intended to foster inclusion. Segregated Training or Affinity Groups: Programs that separate participants based on race (e.g., mandatory DEI sessions with race-exclusive breakouts) risk violating civil rights laws. Voluntary, open-to-all professional support networks may be permissible. Diverse Slate Hiring Requirements: Mandating racial or demographic composition in interview pools (e.g., requiring a minimum number of minority candidates per hiring slate) may violate the law if used to exclude otherwise qualified individuals based on race. Race- or Sex-Based Contracting Preferences: Automatically favoring minority- or women-owned businesses in procurement decisions, without narrowly tailoring those preferences to a compelling government interest, raises legal concerns. Note: The DOJ flags this area as particularly sensitive given that many entities, including government contractors, are required to establish utilization goals for disadvantaged businesses. The legality of these long-standing programs may now be in flux. Proxies for Race or Sex Consideration: Cultural Competence or “Lived Experience” Requirements: When tied to race or ethnicity, such criteria may unlawfully advantage candidates based on protected characteristics Diversity Statements or “Obstacle” Essays: Requiring narratives that implicitly reward racial or gender identity may function as indirect proxies for discrimination The memo sharply narrows the permissible interpretation of the Supreme Court’s language in Students for Fair Admissions v. Harvard, particularly Chief Justice Roberts’ explicit statement that applicants may discuss how race shaped their experiences, provided race itself is not the basis for decisions. Recommended “Best Practices” To reduce legal risk, the DOJ encourages organizations to: Eliminate Demographic-Driven Goals: Avoid designing policies or using facially neutral criteria (e.g., “first-generation student” or “underserved zip code”) to achieve demographic outcomes tied to protected characteristics Justify Criteria with Legitimate, Non-Discriminatory Rationales: Document how selection criteria are related to objective performance or institutional needs — not race, sex, or other protected traits Evaluate Potential Proxy Effects: Before implementing race-neutral policies, assess whether they function in practice as proxies for race, sex, or other protected statuses Abandon Diversity Quotas: Avoid policies that require representation of specific demographic groups in candidate pools, committees, or final hiring selections Include and Enforce Nondiscrimination Clauses in Contracts: Require third parties receiving federal funds to comply with nondiscrimination obligations. Monitor compliance and terminate funding where violations occur. Note on Scope of Coverage The DOJ memo applies to recipients of federal financial assistance, which includes grants, loans, subsidies, and insurance, not federal procurement contracts. However, many principles may be relevant to federal contractors, particularly where compliance with Title VII or similar statutes is at issue.
August 8, 2025
Labor and Employment
Sustaining LGBTQ+ Inclusivity: Legal and Workplace Strategies After Pride Month 2025
Pride Month 2025, commemorating the 1969 Stonewall Riots, celebrates the LGBTQ+ community’s contributions, but inclusivity must extend beyond June to foster workplaces where everyone feels valued. Navigating the complex legal landscape — shaped by the Supreme Court’s 2020 Bostock decision, Executive Order (EO) 14173, and the Department of Justice’s (DOJ) Civil Rights Fraud Initiative — requires strategic planning. Cultural dynamics, including employee activism and consumer expectations, further emphasize the need for year-round inclusivity. This blog provides actionable legal and practical strategies to ensure compliance with Title VII, mitigate False Claims Act (FCA) risks, and create psychologically safe workplaces where LGBTQ+ employees can thrive without hiding their identities. Understanding the Legal Framework The Supreme Court’s Bostock v. Clayton County (140 S. Ct. 1731, 2020) decision established that Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sexual orientation and gender identity for employers with 15 or more employees. The Equal Employment Opportunity Commission (EEOC) enforces Title VII, providing guidance on restroom access aligned with gender identity, harassment prevention, and protections against discrimination based on nonconformity to sex-based stereotypes (EEOC Guidance, 2021). However, a May 15, 2025, federal court ruling vacated parts of the EEOC’s harassment guidance, pending appeal. The Eleventh Circuit’s Lange v. Houston County decision underscored the importance of inclusive benefits, holding employers liable for excluding gender-affirming care from health plans. State and local anti-discrimination laws in 25 states, the District of Columbia, and many municipalities, may impose stricter standards or apply to smaller employers. Globally, over 60 countries criminalize same-sex relationships, creating risks for employees on international assignments. EO 14173, signed January 21, 2025, requires federal fund recipients to certify DEI program compliance with anti-discrimination laws, with violations risking FCA liability. The DOJ’s Civil Rights Fraud Initiative, launched May 19, 2025, targets false certifications in DEI programs, such as gender-identity-based restroom policies, using FCA’s treble damages and qui tam provisions. Addressing Workplace Challenges Post-Pride Month Beyond Pride Month, employers must address ongoing challenges to sustain inclusivity. Many LGBTQ+ employees feel pressured to “cover” (hiding aspects of their identity), such as avoiding mention of same-sex partners or gender identity to fit in, which can harm mental wellbeing and productivity. Despite Bostock, harassment over pronouns, dress codes, or benefits persists, risking Title VII claims. Employee activism, often heightened during Pride, may continue as resource groups push for robust inclusion policies. Missteps could lead to union organizing, lawsuits alleging discrimination, or consumer backlash from perceived over or under-support of LGBTQ+ issues. The DOJ’s focus on “unlawful DEI” may prompt some to scale back inclusivity efforts, while religious accommodation requests require careful balancing with Title VII obligations. FCA Defenses: Safeguarding Against DOJ Enforcement The DOJ’s Civil Rights Fraud Initiative frames false DEI compliance certifications as FCA violations, but employers can leverage robust defenses. In United States ex rel. Schutte v. SuperValu Inc. (143 S. Ct. 1391, 2023), the Supreme Court held that FCA liability requires subjective knowledge of noncompliance. Employers who reasonably believed their DEI programs complied with Title VI, Title IX, or Section 1557 — based on legal counsel or ambiguous regulations — can argue they lacked the “scienter” needed for liability. Documenting good-faith compliance efforts strengthens this defense. In Universal Health Services, Inc. v. United States ex rel. Escobar (136 S. Ct. 1989, 2016), the Court required that false certifications materially influence federal payment decisions. If the government knew of DEI practices through audits or continued funding despite disclosures, employers can argue immateriality. The Eleventh Circuit’s Honeyfund.com v. Florida (2023) decision, which invalidated anti-DEI restrictions as First Amendment violations, supports arguments that inclusivity initiatives, like employee resource groups or training, are protected speech. These defenses — good-faith compliance, lack of materiality, and free speech — help mitigate FCA risks when supported by legal counsel. Practical Strategies for Year-Round Inclusivity To sustain inclusivity post-Pride Month while complying with Title VII and mitigating FCA risks, employers can adopt the following strategies to create workplaces where employees feel safe and valued: Update Policies for Clarity and Compliance Revise anti-discrimination policies to explicitly cover sexual orientation and gender identity, aligning with EEOC guidance, state/local laws, and Title VI/IX/Section 1557. Ensure DEI programs avoid assigning benefits by protected characteristics. Support restroom and dress code access aligned with gender identity, offering gender-neutral facilities as a compliance option. Accurately reflect these practices in federal certifications to avoid FCA liability. Offer Voluntary, Inclusive Training Provide voluntary training on preferred pronouns, names, and Title VII compliance to reduce discrimination risks and foster inclusion. Training should be non-segregatory to avoid DOJ scrutiny. Equip HR with de-escalation training to handle identity-based conflicts, creating a psychologically safe environment where employees can be authentic, without fear of judgment. Implement Confidential Reporting Channels Establish confidential reporting mechanisms and thorough investigation processes to address discrimination promptly, preventing workplace hostility and Title VII claims. Swift responses to inappropriate comments, such as those about restroom access, demonstrate a commitment to inclusivity. Support Gender-Affirming Benefits and Accommodations Ensure health plans cover gender-affirming care, compliant with Lange and the Respect for Marriage Act (Pub. L. 117-228). Develop accommodation plans for transitioning employees, ensuring accurate federal certifications. For international assignments, assess destination laws and provide safety protocols for LGBTQ+ employees. Conduct Privileged DEI Reviews Perform privileged reviews of DEI programs and certifications under Title VI/IX/Section 1557, focusing on policies like restroom access that may attract DOJ scrutiny. Document compliance efforts to support Schutte defenses and track payment decisions for Escobar arguments. Foster Inclusive Cultural Observances Extend Pride Month’s spirit by integrating inclusivity into year-round observances, such as decorating contests with rainbow themes or inclusive swag like pens, to foster belonging. Apply consistent, objective criteria to cultural observances (e.g., Pride Month, Black History Month) aligned with company values to avoid FCA risks. Ensure events are voluntary and inclusive, with legal review for sponsorships or displays to address FCA and First Amendment implications. Balance Religious Accommodations Process religious accommodation requests for inclusivity initiatives compliantly, balancing with Title VII duties. Manage conflicts without compromising anti-discrimination policies to maintain a safe workplace for all. Encourage Mentorship and Allyship Promote mentorship programs to support LGBTQ+ employees, fostering career growth and a sense of belonging. Encourage allyship year-round by creating spaces where employees can be open about their identities, reducing the need to cover, and enhance wellbeing. Align Legal, HR, DEI, and PR Teams Coordinate across teams to ensure inclusivity initiatives reflect brand values and risk tolerance. Prepare communication strategies to address employee and consumer sentiment, leveraging Honeyfund arguments for expressive activities. Maintain records of compliance efforts to counter potential FCA claims. Sustaining Inclusivity Beyond Pride Month 2025 Hiding one’s identity to fit in can erode mental wellbeing and limit professional growth. With over 500 anti-LGBTQ+ bills pending and heightened DOJ scrutiny, employers must remain vigilant. By aligning with Title VII, leveraging FCA defenses (Schutte, Escobar, Honeyfund), and fostering psychologically safe environments, employers can create workplaces where authenticity thrives. Legal counsel is essential to navigate Title VII, FCA, and First Amendment complexities, ensuring sustained inclusivity for LGBTQ+ employees year-round.
July 31, 2025
Labor and Employment
Travel Bans Are Back – Are Exemptions Possible?
Travel bans are back, with an initial list of 19 countries, and that list may be expanded to include an additional 36 nations. This latest round of travel restrictions find their basis in Presidential Proclamation 10949 “Restricting the Entry of Foreign Nationals To Protect the United States From Foreign Terrorists and Other National Security and Public Safety Threats” which has put in place visa and entry restrictions on citizens of Afghanistan, Burma, Chad, Republic of Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen. The proclamation also adds additional suspension of citizens from Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela as visitors or students. Officials will consider additional restrictions for Egypt. Currently the administration is considering additional restrictions to a larger list of countries including: Angola, Antigua and Barbuda, Benin, Bhutan, Burkina Faso, Cabo Verde, Cambodia, Cameroon, Cote D'Ivoire, Democratic Republic of Congo, Djibouti, Dominica, Ethiopia, Egypt, Gabon, The Gambia, Ghana, Kyrgyzstan, Liberia, Malawi, Mauritania, Niger, Nigeria, Saint Kitts and Nevis, Saint Lucia, Sao Tome and Principe, Senegal, South Sudan, Syria, Tanzania, Tonga, Tuvalu, Uganda, Vanuatu, Zambia, and Zimbabwe. See Trump administration weighs adding 36 countries to travel ban, memo says | Reuters. History Repeating This is not the first set of travel restrictions that we have seen implemented. During the first term of the Trump administration, several travel bans were implemented for a variety of reasons, culminating with COVID-19 travel restrictions. What do the prior travel bans tell us about this latest proclamation? The administration has expanded its travel restrictions to include a broader set of countries, potentially including those that benefit from citizenship-by-investment programs, as well more than 20 African countries. The National Interest Exemption is Back Previous travel bans had allowed for travel in support of specific areas of national interest (NIE), which included crucial infrastructure. Authorities have reinstated the NIE as an option for obtaining an exemption from the travel restrictions. The wording of the current proclamation appears to severely limit NIEs in terms of requirements and processing. The “case by case” language suggests that NIEs will be significantly harder to obtain for individuals affected by the current restrictions. There is currently no procedure for advance application for NIEs; accordingly, they must be requested at an embassy appointment. Applicants must also qualify for the visa they are seeking before the NIE step, which raises the visa interview stakes. Accordingly, significant preparation is recommended for travelers affected by these bans, particularly in terms of visa qualification and NIE qualification. Finally, applicants must be prepared for significant administrative processing as NIEs are reviewed. Applicants seeking NIEs for visa issuance are recommended to consult immigration counsel to conduct an in-depth review of qualifications and supporting evidence. With the 2026 World Cup approaching, we can expect guidance on NIEs to evolve in the coming months.
July 18, 2025
Labor and Employment
H.R.1 Ends Taxes on Tips & Overtime: Employer Guide
On July 4, 2025, President Donald J. Trump signed H.R.1—the One Big Beautiful Bill Act—into law following its narrow passage in the House of Representatives just days earlier. Touted as the Trump administration’s marquee legislative victory ahead of the 2026 midterms, the Act makes headlines for many reasons. But for employers, two provisions demand immediate attention: A new above-the-line tax deduction for qualified tip income, and A new above-the-line tax deduction for qualified overtime compensation. Both provisions are now law and will take effect starting with the 2025 tax year, bringing new complexities to wage practices, payroll reporting, and compensation strategy. Below is a summary of the legal and practical considerations employers need to know. "No Tax on Tips:" Tax Deduction for Employees Receiving Qualified Tip Income Section 70201 of the Act allows certain employees to deduct up to $25,000 annually in qualifying tip income. The deduction is aimed at hospitality and service industry workers, but its implementation raises numerous legal and compliance considerations for employers. Key Requirements Eligibility Cap: Deduction phases out beginning at $150,000 in modified AGI ($300,000 for joint returns). Qualified tips must:be voluntarily paid by the customer (not mandatory service charges or auto-gratuities), be paid in cash, by card, or through valid tip-sharing arrangements, and be received in a qualifying occupation that customarily and regularly receives tips as of December 31, 2024.The Treasury must publish a definitive list of qualifying occupations within 90 days. Excluded Occupations: Employees in law, accounting, finance, consulting, performing arts, and similar professions are categorically excluded from eligibility. Reporting Requirements Employers must report:Total cash tips received by the employee on Form W-2. The employee’s qualifying occupation (2025 approximations allowed, subject to Treasury guidance). Employer Risks and Considerations Mischaracterization of wages as tips to secure a tax advantage may trigger IRS enforcement or wage-hour liability. Employers may consider changes to tip pooling or customer-facing tipping practices, but must:remain compliant with FLSA tip pool rules, including exclusion of managers and supervisors, avoid coercing tipping in non-traditional settings where it was not previously customary, ensure 100% tip reporting is enforced among employees. Until the Treasury issues regulations and the occupation list, employers should avoid restructuring wages to exploit this provision. "No Tax on Overtime:" Deduction for Federally Mandated Overtime Compensation Section 70202 of the Act allows employees to deduct up to $12,500 ($25,000 for joint filers) in FLSA-required overtime compensation. This deduction is limited in scope but may prompt employers to rethink how overtime is classified and compensated. Qualified Overtime Compensation Applies only to overtime required under Section 7 of the FLSA (i.e., 1.5x pay for hours over 40 per week). Does not apply to:Overtime required only by state law (e.g., California’s daily overtime rules). Overtime paid voluntarily under employer policy or collective bargaining agreements. Payments already claimed as qualified tips. Reporting Requirements Employers must separately report qualified overtime compensation on Form W-2.For 2025, approximations are permitted under a reasonable method (to be defined by the Treasury). Compliance Risks With this new deduction, employers may be tempted to reengineer pay practices. However, doing so carries significant legal exposure: Example 1: Reclassifying salaried exempt employees as nonexempt hourly employees, lowering base pay, and inflating overtime hours to maintain prior salary levels = FLSA violation if hours are not actually worked and accurately tracked. Example 2: Reducing regular hourly rates for nonexempt employees while creating artificial overtime (e.g., setting an internal 30-hour threshold or applying double-time bonuses) = disallowed, as only FLSA-mandated overtime premiums qualify for the deduction. The Treasury is authorized to issue regulations preventing abuse and wage reclassification. Employers who attempt to engineer “deductible overtime” without strict compliance will face regulatory scrutiny. Practical Employer Guidance The “no tax on tips” and “no tax on overtime” provisions will likely be popular with employees and heavily publicized during the 2025 W-2 season. But for employers, the changes bring regulatory complexity, legal risk, and potential downstream litigation. What Employers Should Do Now Do not alter compensation structures prematurely.Wait for Treasury regulations, especially the occupational list for tip eligibility. Ensure accurate wage and hour records.All overtime-eligible employees must have their hours and regular rates carefully documented. Audit tip pool arrangements and ensure FLSA compliance.Exclude ineligible participants, properly allocate tips, and enforce reporting discipline. Prepare to update payroll systems.New W-2 fields for tip and overtime breakdowns will require reconfiguration. Long-Term Strategy Employers considering reclassification of exempt employees, modification of pay rates, or introduction of creative incentive structures should engage qualified employment counsel. Wage-hour compliance and federal tax strategy must be aligned to avoid triggering enforcement by the IRS, DOL, or plaintiffs’ attorneys. Final Thoughts The tax benefits of H.R.1 may create new incentives for employees, but they also present a compliance minefield for employers. The risk of misclassification, improper reporting, or wage-hour violations is high, especially as employers rush to leverage perceived tax advantages. Employers seeking to responsibly explore compensation adjustments in light of the “no tax on tips” and “no tax on overtime” deductions should consult with legal counsel familiar with FLSA compliance, payroll tax reporting, and employee classification issues. Our labor and employment team is actively advising clients on how to navigate H.R.1's implementation. Contact us to schedule a strategy session or compliance audit.
July 10, 2025
Labor and Employment
SCOTUS Levels Title VII Standards in Reverse Discrimination Case
The U.S. Supreme Court unanimously ruled that so-called “reverse discrimination” claims—discrimination claims brought by members of a “majority” race, gender, or other protected characteristic—are not subject to heightened standards of proof. The June 5, 2025, decision in Ames v. Ohio Department of Youth Services clarifies the legal standards for such claims under Title VII of the Civil Rights Act of 1964, serving as a critical reminder for employers to ensure fairness in employment decisions as reverse-discrimination claims become more prevalent. Issue The core question before the court was whether majority-group plaintiffs must show additional “background circumstances” to support the claim that the employer discriminates against the majority, in addition to meeting the standard elements of an employment discrimination claim under Title VII. In discrimination law, a majority group refers to a group that is perceived as having numerical or social dominance in a specific context. For example, 78% of software engineers are men, making males the majority group in this case. The Ames ruling clarifies that members of majority groups—such as heterosexuals in Ames’s case—do not face a higher burden when alleging workplace discrimination, ensuring equal protection under Title VII for all individuals. Background Marlean Ames, a heterosexual woman, was employed by the Ohio Department of Youth Services since 2004. In 2019, under a new supervisor (a homosexual woman,) Ames received positive performance reviews but was passed over for a promotion to the Bureau Chief of Quality in favor of another homosexual woman. Four days later, Ames was demoted to a secretarial role, and a gay man was hired to fill her previous position. Ames filed a lawsuit against her employer, alleging discrimination based on her sex and sexual orientation under Title VII. The U.S. District Court for the District of Ohio granted summary judgment in favor of the Ohio Department of Youth Services, and the Sixth Circuit affirmed. The Sixth Circuit held that, as a heterosexual plaintiff, Ames was required to show “background circumstances” to support the suspicion that the employer was an unusual one that discriminated against the majority, including evidence that a member of the minority group made the employment decision or statistical evidence of a pattern of discrimination against the majority. Ames failed to meet this requirement, as her termination was decided by heterosexual directors, and she provided no evidence of a broader pattern of discrimination. Prior to the Supreme Court’s ruling, four circuit courts (Eighth, Seventh, D.C., and Tenth) had adopted the “background circumstances” requirement for majority-group plaintiffs, while two circuits (Third and Eleventh) had rejected it. Court’s Holding In a unanimous opinion authored by Justice Ketanji Brown Jackson, the Supreme Court held that majority-group plaintiffs bringing “reverse discrimination” claims under Title VII are not required to show “background circumstances” to prove discrimination. The court found that this requirement is inconsistent with the text of Title VII and Supreme Court precedent. The court emphasized that Title VII’s disparate-treatment provision does not distinguish between majority and minority-group plaintiffs, focusing instead on “individuals” rather than groups. The statute’s language, which establishes protections for every individual regardless of group membership, leaves no room for courts to impose special requirements on majority-group plaintiffs. The court further clarified that all Title VII discrimination claims should be evaluated under the burden-shifting framework established in McDonnell Douglas Corp. v. Green (1973,) without additional hurdles for majority-group plaintiffs. The “background circumstances” rule, the court noted, disregards the flexibility of the McDonnell Douglas framework, which was never intended to be “rigid, mechanized, or ritualistic” (Swierkiewicz v. Sorema N.A., 2002). By imposing a uniform, highly specific evidentiary standard on majority-group plaintiffs, the rule violated this principle. The court rejected the Ohio Department of Youth Services’ argument that the “background circumstances” requirement was merely a way to assess whether an employment decision suggested discrimination based on a protected characteristic. The Sixth Circuit’s application of the rule explicitly relied on Ames’s failure to meet a heightened evidentiary standard, which Title VII does not support. Consequently, the Supreme Court vacated the Sixth Circuit’s judgment and remanded the case for application of the proper prima facie standard. Concurrence Justice Clarence Thomas, joined by Justice Neil Gorsuch, concurred fully with the majority but wrote separately to highlight the problems with judicially created “atexual legal rules” like the “background circumstances” requirement. Justice Thomas pointed out the difficulty of defining the “majority” in contexts like gender (where women are a majority nationally but not in certain industries) or race (where categories are often imprecise). He also questioned the McDonnell Douglas framework’s utility, signaling openness to reconsidering it in future cases. Notably, Justice Thomas referenced diversity, equity, and inclusion (DEI) initiatives in a footnote, suggesting that such programs may lead to discrimination against perceived majority groups, a point likely to be cited in future challenges to DEI policies. Why This Matters This ruling ensures that all workers, regardless of their race, gender, or other protected characteristic, are subject to the same legal standards when bringing discrimination claims under Title VII. By eliminating the “background circumstances” requirement, the court has removed an unfair hurdle for majority-group plaintiffs, likely leading to an increase in reverse-discrimination claims. The decision aligns with recent Supreme Court rulings emphasizing equal treatment, such as those on affirmative action and job transfers. Takeaways for Employers Increased Scrutiny of Employment Decisions: With barriers lowered for majority-group plaintiffs, employers should expect a rise in reverse-discrimination claims. All employment decisions—hiring, promotions, terminations—must be supported by legitimate, well-documented business reasons, regardless of the employee’s protected class. Training and Compliance: Employers should train supervisors and HR personnel to recognize and prevent all forms of workplace discrimination, including those affecting majority groups. Litigation Strategy: While employers can still use evidence like the decision-makers’ characteristics or the experiences of other employees to rebut discrimination claims, the Supreme Court has confirmed that reverse-discrimination claims face no higher burden of proof than other Title VII claims. DEI Considerations: The decision, particularly Justice Thomas’s concurrence, signals potential judicial skepticism toward DEI initiatives. Employers should review DEI programs to ensure compliance with Title VII and prepare for possible legal challenges. This ruling underscores the importance of equitable treatment across all employee groups and reinforces the Supreme Court’s commitment to uniform application of Title VII’s protections.
June 19, 2025
Labor and Employment
Workplace Violence: Why Employers Can’t Afford to Ignore the Warning Signs
When employers think about workplace safety, the conversation often begins and ends with OSHA inspections or slip-and-fall prevention. But in today’s world, the most urgent threat to your workforce isn’t on the floor. It’s in the atmosphere: workplace violence. Violence doesn’t just mean active shooter scenarios. It includes verbal threats, stalking, physical intimidation, domestic abuse that spills into the workplace, and psychological harassment. These are not just personnel issues but legal liabilities waiting to explode. The Legal Landscape is Shifting and Employers Must Keep Up Under OSHA’s General Duty Clause, employers are legally required to provide a safe working environment free from recognized hazards, including the risk of workplace violence. Failing to act on known threats can result in citations, civil liability, and, in extreme cases, criminal exposure. Add to that claims for negligent hiring, negligent retention, workers’ comp exposure, ADA violations, and reputational ruin, and the stakes become even clearer. Laws are continuing to evolve. California’s 2024 mandate for Workplace Violence Prevention Programs (WVPPs) set a new national standard, and other states, including New York, are following suit. Employers must now demonstrate proactive measures, not reactive apologies when something goes wrong. The Red Flags are Rarely Subtle and Often Dismissed Nearly every workplace violence incident is preceded by clear indicators: escalating arguments, erratic behavior, hostile emails, or an employee voicing concern about a colleague’s conduct. What’s dangerous — and legally reckless — is waiting until someone crosses the line before acting. Employers are expected to prevent foreseeable harm, which means acting before tragedy strikes. Your First Line of Defense: a Written, Enforced Violence Prevention Policy Organizations of all sizes and industries must have a clear, written policy for workplace violence prevention. This is not just a formality. Your workplace violence prevention policy should: Define prohibited conduct with precision, including threats, intimidation, and harassment. Create safe, accessible, and anonymous reporting channels. Establish a transparent response protocol. Reinforce zero tolerance for retaliation. This is your legal and cultural foundation. Training is Not Optional! It is a Legal and Practical Imperative A policy that sits unread on a shelf offers zero protection. Managers, supervisors, and employees must be trained to recognize red flags, de-escalate conflict, and report concerns safely and effectively. Even a single hour of annual training has proven to materially reduce risk. Training must be specific, interactive, and mandatory. Where appropriate, combine it with harassment prevention or ADA accommodation training; do not treat it as a check-the-box exercise. High-Risk Moments Demand Heightened Vigilance Terminations, layoffs, and performance-based discipline are flashpoints for violence. Employers should: Plan separation meetings carefully. Consider having security present. Conduct high-risk terminations off-site or via video if needed. Offer Employee Assistance Programs (EAPs) where appropriate. The Right Team: Security, Legal, and Behavioral Health Professionals Working in Tandem Preventing and responding to workplace violence takes more than HR alone. You need a cross-functional team of: Security professionals who assess risk and implement physical safety protocols. Threat assessment experts (forensic psychologists, trained law enforcement) who evaluate risk and help strategize de-escalation. Employment counsel who understands the legal implications and can coordinate with law enforcement, courts, and insurers. Executive protection for high-profile or targeted employees. Each component must align under a single, integrated WVPP strategy. Real Estate and Isolated Work Environments Face Elevated Risk Industries like property management, real estate, and healthcare, where employees work alone, during off-hours, or interact frequently with the public, face unique and elevated exposure. Employers in these sectors must tailor policies, training, and security measures accordingly. Employer Liability is Real and Expensive Beyond OSHA citations, employers may face lawsuits alleging: Negligent hiring or retention. Failure to warn. ADA violations (e.g., mishandling mental health-related threats). Discrimination or retaliation for mishandled reporting. Employers cannot afford to be reactive. Workplace violence prevention is not about paranoia. It is about creating a culture of trust, accountability, and action. Employees are more likely to report threats when they believe the company will take them seriously. That alone can prevent tragedy. If your workplace violence prevention policy has not been reviewed in the last year or if your team has never been trained on recognizing or responding to threats, the time to act is now.
May 29, 2025
Labor and Employment
Non-Compete Ban for Maryland Healthcare Professionals Set to Take Effect July 1, 2025
Effective July 1, 2025, the second phase of Maryland’s restrictions on non-compete agreements and conflict of interest provisions for healthcare professionals will go into effect, targeting employers who provide direct patient care. This follows the earlier phase of the law, which banned non-competes for veterinary professionals beginning June 1, 2024. What Does This Mean for Healthcare Employers? Healthcare employers can continue enforcing non-compete provisions in agreements executed before July 1, 2025. However, starting July 1, any newly signed agreement that includes a non-compete or conflict of interest clause for a qualifying healthcare provider may be partially or wholly unenforceable, depending on compensation and job function. Key Provisions Under the Updated Maryland Statute Under the amended Md. Code Ann., Labor & Employment §3–716, Maryland continues to prohibit non-compete agreements for employees in any profession who earn 150% or less of the state’s minimum wage. The updated law expands these protections by banning non-competes for veterinary practitioners and veterinary technicians, as well as for licensed healthcare professionals who provide direct patient care and earn $350,000 or less annually. For healthcare professionals earning more than $350,000 annually, non-compete agreements are still permitted but now face strict limitations: they may last no longer than one year and must be limited to a geographic radius of 10 miles from the provider’s principal place of practice. The amended law also introduces a new obligation for employers: upon a patient’s request, they must disclose the new location of a former healthcare provider. Despite these expanded restrictions, the statute explicitly affirms that employers may still take steps to protect client lists and proprietary business information. Best Practices for Healthcare Employers In light of the upcoming change, employers should: Review and revise all employment agreements that will be signed on or after July 1, 2025 Ensure HR and recruiting teams are informed and using compliant templates Plan for patient communication procedures tied to provider transitions Use alternative protections—like confidentiality and non-solicitation agreements—to safeguard business interests. Even contracts signed before July 1 may still face scrutiny under Maryland’s reasonableness standard for restrictive covenants. Background on Non-Compete Reform The updated statute stems from House Bill 1388, passed in 2024 as part of Maryland’s growing effort to curtail restrictive employment practices in the healthcare and veterinary sectors. Nationally, the Federal Trade Commission’s (FTC) attempt to implement a broad non-compete ban across every industry remains in limbo after district court challenges blocked enforcement. In March, FTC attorneys filed motions requesting a 120-day stay of the agency’s appeals, citing the change of the presidential administration and a need to reassess its position under new leadership. It remains unclear whether non-competes will remain a policy priority at the federal level. As a result, state-level action, like Maryland’s, has become the primary driver of non-compete reform.
May 28, 2025
Labor and Employment
Virginia Expands Non-Compete Restrictions for Employers
Virginia Governor Glenn Youngkin has signed Senate Bill 1218 into law, amending the state’s non-compete statute. Effective July 1, 2025, the updated law will broaden restrictions on non-compete agreements in Virginia. Previously, the law only protected “low-wage employees,” or those earning less than the average weekly wage in Virginia. Under the new amendment, employers will also be prohibited from entering into non-compete agreements with “non-exempt employees.” These are workers who are entitled to overtime pay under the Fair Labor Standards Act. Under the new amendment, all non-exempt employees – regardless of their income level – will be covered by the Commonwealth’s prohibition on non-compete agreements. However, the amendment is not retroactive. Therefore, employers who have entered into non-compete agreements with non-exempt employees prior to July 1, 2025, will remain valid; any such agreements executed on or after July 1, 2025, will be prohibited by law. Moving forward, employers will need to ensure accurate classification of workers as either exempt or non-exempt under federal standards to avoid liability under the new amendment. Employers should review their policies on non-competes, particularly as applied to offer letters, severance agreements, and employee handbooks to ensure compliance with the amendment.
May 27, 2025
Labor and Employment
Weddings, Honeymoons, and Milestones: Employer Guidance for Time Off Requests
For HR leaders and business owners alike, the question is not whether employees will request time off for major life events, but when and how your organization will respond. Weddings, honeymoons, and personal milestones do not fall under FMLA or mandatory leave laws, but how you handle these moments speaks volumes about your culture, legal risk tolerance, and ability to retain top talent. There’s No Legal Right — But There Are Legal Risks It’s true: U.S. employers have no legal obligation under federal or state law to offer “wedding leave.” These events are not protected by the Family and Medical Leave Act (FMLA), paid sick leave laws, or any other statutory entitlement. But do not mistake a lack of mandate for a lack of risk. Employers who approve or deny time-off requests inconsistently, particularly in ways that appear to impact employees based on gender, race, religion, or other protected characteristics, may face claims under Title VII or state anti-discrimination laws. The U.S. Department of Labor (DOL) continues to emphasize enforcement around leave and accommodation policies that have a disparate impact. While “wedding leave” is not protected, your process must still comply with anti-discrimination and fair treatment standards. FMLA and Paid Leave Interaction: Be Clear on What Applies While weddings and honeymoons typically fall outside the scope of the FMLA, some related events might trigger protected leave. For example: Destination wedding involving a serious health condition (e.g., pre-surgical travel): FMLA may apply. Caring for a seriously ill spouse during or after a wedding or travel abroad: FMLA may apply. Employee illness or complications resulting in an inability to return to work: also potentially protected under FMLA. Moreover, the DOL recently clarified that when employees receive state or local paid family or medical leave benefits, employers cannot require them to simultaneously use accrued paid time off (PTO). This rule limits an employer’s ability to control how leave is structured when overlapping benefits are involved. Employers must understand the interplay between federal FMLA rights and state/local paid leave programs. Suppose an employee receives paid benefits through a government program (e.g., California PFL, DC Paid Family Leave). In that case, employers must designate FMLA leave when appropriate but may only allow PTO to be used as a supplement if mutually agreed, not mandated. Build Goodwill Without Losing Control Your policies should reflect both empathy and operational discipline. A wedding is not a frivolous request — it is a once-in-a-lifetime event that deeply matters to your employee. When employers respond with humanity and structure, it creates loyalty. That does not mean granting every request or disrupting workflow. It means having a clear, written policy that: Requires advance notice (e.g., 30–60 days). Reserves approval based on business needs. Clarifies whether PTO or unpaid leave may be used. Avoids any ambiguity about the consequences of overstaying approved leave. Consider including a “personal leave” clause in your employee handbook to address non-medical, non-FMLA, and non-emergency time off. Your language can be simple and clear: personal leave may be granted at management’s discretion, subject to operational needs. Watch Out for International Travel If the honeymoon involves international travel, extra scrutiny is warranted. Confirm the return-to-work date in writing before the employee departs, and clearly communicate that unapproved extensions may be treated as unexcused absences. Lingering COVID-era entry restrictions, visa issues, or logistical complications can cause delays, but those are not excuses for avoiding your leave policies. Where possible, plan backup support and document expectations in writing to avoid any disputes upon return. Small Gestures, Big Impact From a culture-building perspective, do not underestimate the power of a simple “Congratulations!” A card, a team mention, or a verbal note from leadership can make an employee feel valued. Some employers go a step further — offering a “wedding day off” or an extra PTO day. These gestures are optional, but impactful. Policy Consistency Is Your Best Defense If your leave policies are outdated, vague, or silent on personal time off, now is the time to revise them. Review and align them with current DOL guidance, FMLA regulations, and your state’s paid leave laws. Train your managers, document every request and response, and apply the same standards to every employee, regardless of role, relationship, or circumstance. Bottom Line for Employers Personal milestones matter to your employees and your business. They can create resentment, attrition, or even litigation when handled poorly. When handled well, they can build trust and reinforce culture. Be fair. Be clear. Be compliant. Be human. And most importantly, be consistent.
May 21, 2025
Labor and Employment
Under-Performing Pregnant or Disabled Employees: Balancing Performance Management with the ADA, FMLA, and Pregnant Workers Fairness Act
Performance conversations can quickly become legal minefields when an employee is pregnant, has a disability, or has requested protected leave. Too often, well-meaning employers delay intervention, mishandle documentation, or apply policies inconsistently, opening the door to claims under laws like the Americans with Disabilities Act (ADA), the Pregnant Workers Fairness Act (PWFA), and the Family and Medical Leave Act (FMLA). Employers navigating sensitive performance management matters should understand the laws at play and focus on the fundamentals: document thoroughly, communicate clearly, and take decisive action. Know the Landscape: ADA, PWFA, and FMLA in the Performance Context Americans with Disabilities Act (ADA) The ADA prohibits discrimination against qualified individuals with disabilities. It requires employers to provide reasonable accommodations that enable those individuals to perform the essential functions of their jobs—unless doing so would cause an undue hardship. Importantly, employees with disabilities must still meet legitimate performance and conduct standards. But before disciplining or terminating such an employee, an employer must consider whether: The performance issue is related to the disability. A reasonable accommodation could help the employee meet expectations. The employee was given a meaningful opportunity to improve. Pregnant Workers Fairness Act (PWFA) Effective June 27, 2023, the PWFA expands protections for pregnant workers by requiring employers to offer reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions—similar to the ADA framework. Key differences between the PWFA and ADA include: The PWFA applies even to temporary or moderate limitations (e.g., lifting restrictions, more frequent breaks, and part-time schedules). Employers cannot require a pregnant employee to take leave if another accommodation is available. The statute prohibits retaliation for requesting or using a pregnancy-related accommodation. Performance issues that arise in the context of pregnancy or a related condition should be handled carefully—especially if the employee has requested (or is entitled to) accommodation under the PWFA. Family and Medical Leave Act (FMLA) The FMLA entitles eligible employees to up to 12 weeks of unpaid, job-protected leave for serious health conditions (including pregnancy), family caregiving, and bonding with a new child. Employers must tread carefully if an employee is underperforming while on FMLA leave or shortly after returning. Disciplining or terminating an employee for conduct related to a protected leave period can easily be construed as interference or retaliation—even if the employer’s intent was neutral. Common Pitfalls When Performance and Protected Status Intersect Ignoring the Role of Accommodation Employers must explore accommodations under both the ADA and PWFA before taking adverse action. If an employee’s performance is suffering due to a medical condition or pregnancy-related limitation, your first step is not discipline—it’s engagement. Legal obligation: Initiate the interactive process to determine if a reasonable accommodation would enable the employee to meet expectations. Failing to engage in this process is a leading cause of liability under both laws. Accommodations may include modified duties, schedule changes, ergonomic supports, remote work or temporary reassignment. Inconsistent Application of Performance Standards If an employer holds a pregnant or disabled employee to a higher (or lower) standard than others, the result is rarely good. Legal risk: Disparate treatment claims under Title VII, the ADA, the PWFA, or state human rights laws. Ensure your expectations, metrics, and disciplinary procedures are applied consistently—particularly regarding attendance, deadlines, and work quality. Poor or Biased Documentation Vague or emotionally charged performance documentation (“She’s not committed anymore since becoming pregnant”) is both unhelpful and legally risky. Best practice: Stick to objective, quantifiable facts. Instead of “seems distracted,” document details, like: “missed three deadlines in March; quality of reports has declined, with five factual errors noted.” Good documentation provides a legitimate, non-discriminatory basis for action—and will support your decision if it’s challenged later. Disciplining During or After FMLA Leave Without a Clear Basis Courts closely scrutinize adverse actions taken during or shortly after FMLA leave. Even if you have valid concerns, timing matters. Tip: If an employee’s performance issues predate the leave, ensure you have clear records to show that the concerns existed—and were addressed—before the leave began. Avoid the appearance of retaliation by proceeding only when the documentation supports your decision. Practical Steps for Employers: How to Manage Performance Issues Lawfully and Effectively Train Managers to Spot Accommodation Triggers. Supervisors should loop in HR or legal before acting whenever an employee references a medical condition, pregnancy limitation, or medical leave. Engage Early and Document Diligently. Don’t delay performance conversations out of fear—address issues early, but do so thoughtfully. Document any meetings, expectations, improvement plans, and accommodations discussed or offered. Apply Policies Uniformly. Consistency is key, whether it’s an attendance policy, quality standard or progressive discipline process. Explore Accommodations Before Discipline. Particularly where medical or pregnancy-related limitations are at play, you must first assess whether the employee can meet expectations with reasonable support. Avoid “Gotcha” Terminations. Avoid abrupt disciplinary action if performance concerns haven’t been clearly documented and communicated. Courts frown on surprise terminations, especially after protected leave or accommodation requests. Consult Counsel Before Termination. Before terminating a pregnant or disabled employee—or one who recently returned from leave—have a legal review of the facts, documentation, and process. A brief consultation can prevent months of costly litigation. Pregnancy and disability do not shield employees from accountability, but they do change how employers must approach performance management. With the passage of the Pregnant Workers Fairness Act and the continued complexity of ADA and FMLA compliance, employers must proceed with care, compassion, and a clear understanding of their legal duties. Performance issues don’t go away on their own, but mishandling them can create far bigger problems. The key is to act early, engage meaningfully, and document everything.
April 30, 2025
Labor and Employment
Does Your Dress Code Discriminate? What Employers Need to Know
In the ever-evolving landscape of workplace discrimination laws, savvy employers are reexamining longstanding policies—including those that may not seem controversial at first glance. One of the most commonly overlooked (yet frequently litigated) areas? The company dress code. What was once a straightforward requirement—“business casual” or “jeans on Fridays”—has become a complex legal issue, especially as courts and administrative agencies scrutinize how dress and grooming policies intersect with anti-discrimination laws. From hairstyle protections to gender identity accommodations, the modern workplace dress code carries more legal weight than many employers realize. Here’s what you need to know to ensure your company’s dress code reflects both current legal standards and best practices. The Legal Foundation: Employers May Set Reasonable Standards As a general matter, employers are permitted to impose reasonable restrictions on workplace appearance. Courts have long recognized a company’s legitimate interest in maintaining a professional image—especially for employees who interact with clients, vendors, or the public—or in enforcing safety-based attire requirements depending on the nature of the work. However, dress codes must be implemented in a way that does not discriminate directly or indirectly. Your workplace dress code should not: Impose unequal burdens on certain groups Reinforce outdated gender stereotypes Fail to provide religious or medical accommodations Be applied inconsistently or selectively Gender-Specific Policies: Proceed with Caution Historically, some courts have permitted different grooming or dress requirements for male and female employees—as long as the policy is applied evenly and doesn’t impose a greater burden on one gender. However, employers relying on these traditional standards may be exposing themselves to risk. Courts have increasingly accepted Title VII claims based on gender stereotyping, where policies require employees to present in ways that conform to traditional gender roles—for instance, requiring women to wear skirts or prohibiting men from growing long hair. These requirements can give rise to claims when they compel employees to dress in a manner inconsistent with their gender identity or personal expression. Several states and municipalities have taken a more explicit approach. In California, for example, it is unlawful to require women to wear skirts. In Washington, DC, the law prohibits discrimination based on appearance, which includes dress and grooming. Employers operating in multiple jurisdictions should review policies with a careful eye toward state and local requirements, which may be more protective than federal law. Gender Identity and Expression: Aligning with Bostock and Beyond In the wake of the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, employers must recognize that Title VII prohibits discrimination based on gender identity and sexual orientation. As a result, enforcing gender-specific dress codes or grooming policies that conflict with an employee’s gender identity may constitute unlawful discrimination. Many jurisdictions have adopted laws that go even further, requiring employers to affirmatively allow employees to dress in accordance with their gender identity or expression. Employers should carefully assess whether their appearance standards respect these legal obligations and provide sufficient flexibility. The Rise of Hairstyle Discrimination Laws A growing number of states have passed legislation recognizing that grooming policies can serve as proxies for racial discrimination. Laws in Maryland, Virginia, California, New York, and others prohibit workplace restrictions that ban natural hairstyles or protective styles such as afros, braids, locks, and twists. These laws are often framed as extensions of race discrimination protections under Title VII. Employers should avoid policies that prohibit or limit hairstyles unless there is a demonstrable, legitimate business justification—such as a safety concern in an industrial setting—and even then, the policy must be narrowly tailored. Accommodations for Religious Beliefs and Medical Conditions Under Title VII, employers must reasonably accommodate sincerely held religious beliefs, including those that conflict with dress or grooming policies. This may include permitting head coverings, religious jewelry, or exceptions to attire norms due to modesty practices. Similarly, under the Americans with Disabilities Act, employers must accommodate qualified employees with disabilities. For instance, a blanket ban on facial hair may need to yield to an employee with a medical condition that makes shaving painful or harmful. Failure to consider these accommodations not only exposes employers to liability—it also undermines inclusivity and employee morale. Union Activity and Protected Expression Dress codes must also respect employees’ rights under the National Labor Relations Act (NLRA), which protects their ability to engage in concerted activity, including the right to wear union insignia or clothing expressing workplace concerns. A policy that broadly bans “derogatory” or “inappropriate” attire without a clear connection to legitimate business interests—like safety or security—may be deemed unlawfully overbroad by the National Labor Relations Board. Best Practices for Employers To ensure that dress codes meet legal standards and reflect modern workplace norms, employers should consider the following: Use Neutral Language: Policies should be gender-neutral, avoiding references to attire “expected” of men or women. Avoid Over-Specification: Instead of listing every acceptable or unacceptable item of clothing, opt for broader, flexible guidelines (e.g., “employees must present a clean and professional appearance appropriate to their role”). Be Consistent: Apply the policy uniformly across departments and roles, unless a legitimate business reason supports a distinction. Build in Flexibility: Include language acknowledging the need to accommodate religious practices, cultural expression, or medical conditions. Review Regularly: Revisit your dress code periodically in light of new legal developments and cultural trends. Final Thoughts While office dress codes may seem like a minor issue, they often sit at the intersection of major employment law concerns. A policy that is too rigid—or worse, discriminatory in application—can lead to reputational harm and costly litigation. The good news is that most companies can maintain professionalism without micromanaging wardrobe choices. A thoughtful, updated policy can reinforce your company’s values while keeping you compliant with the law. If you have questions about your company’s dress code or need assistance revising your policies, consult employment counsel familiar with the latest developments in federal, state, and local law. A well-drafted dress code can do more than keep the office looking sharp—it can help your company avoid some very real legal pitfalls.
April 16, 2025
Labor and Employment
Key Trends in PAGA Arbitration Decisions: Insights for Employers and Legal Counsel
The proliferation of wage and hour litigation in California and recent significant changes to the law have created uncertainty for employers and their lawyers alike. Both recent PAGA (Private Attorneys General Act of 2004) reform legislation and critical court decisionsi have changed the landscape for employers seeking to prevent and defend these wage and hour claims. Generally speaking, PAGA allows employees who have suffered Labor Code violations (such as the failure to provide minimum wage, overtime, accurate wage statements, and proper meal and rest breaks) to sue their employers on behalf of the state for Labor Code violations—even for violations that affect other employees. In essence, the California Attorney General has deputized employees to pursue Labor Code violations on their behalf in an effort to enforce wage and hour laws. While most employers are familiar with the risk associated with wage and hour class actions, the companion PAGA claims are on the rise and being pursued by employees at a rapidly increasing rate. While recent PAGA reform law has arguably helped to limit aspects of the law, including requiring employees to suffer violations and have standing to do so, before bringing lawsuits, reducing certain repetitive damages, and allowing for the potential early cure or resolution of claims in some instances, ultimately the reforms have not slowed the momentum of these lawsuits against employers. More precisely, the reform has provided additional tools and defenses to employers to address the lawsuits. With this in mind, it becomes even more apparent that the goal of every employer should be to take steps to prevent or minimize the chances of large representative wage and hour lawsuits against their business. The drafting and implementing arbitration clauses and class action/PAGA waivers can accomplish this. Many employers seek to use arbitration agreements to keep these kinds of claims out of court. However, recent legal decisions threaten to make it much more difficult to use these measures to avoid legal claims unless the agreements are carefully drafted. More recently, California courts have been active in issuing decisions that clarify the effectiveness of arbitration provisions in subsequent lawsuits to force employees into less dangerous and less expensive individual arbitrations versus full-blown representative actions. Three very recent decisions issued in 2025 from California’s Second District Court of Appeal underscore the importance of well-crafted arbitration and class action and PAGA waivers.ii Key Legal Decisions Shaping Arbitration Agreements Ballesteros v. FormFactor, Inciii In a clear example of courts nitpicking imprecise arbitration clause language to allow employee representative claims to proceed to court, the Court of Appeal in Ballesteros interpreted the employer arbitration agreement, to exclude all PAGA claims from the scope of the arbitration agreement. The court based its decision on some imprecisely drafted language in an arbitration clause that failed to accurately list PAGA claims as claims pursued on behalf of the state of California. As a result, rather than the arbitration agreement being interpreted to send claims to arbitration, the Court found that the arbitration agreement specifically allowed representative PAGA claims to be pursued in court.iv The Court determined that the arbitration agreement excluded from arbitration PAGA “representative actions” without distinguishing between claims brought on an individual or nonindividual basis. This decision is instructive because the Court chose a very favorable interpretation of the arbitration clause for the employee and went to great lengths to justify its position. The decision serves as a warning that arbitration clauses must be regularly updated to avoid these types of consequences. Cusimano v. Brilliant Earth, LLCv In the Cusimano decision, the Court of Appeal ruled that the entire arbitration agreement was unenforceable because the agreement to arbitrate contained an unenforceable waiver of nonindividual PAGA claims. Initially, the Court concluded that the arbitration agreement was flawed because it improperly barred employees from bringing representative actions against their employers. The Court found that the arbitration agreement contained a nonseverability clause that tied the validity of the agreement as a whole to the validity of the defective waiver of nonindividual PAGA claims and found the full agreement to be invalid, directing the entire matter for resolution in court.vi Much of the Court’s decision was premised on the flawed and unenforceable draft language in the employer documents. The Court was even more assertive in Cusimano in declaring that imprecise drafting and defects will result in employers being forced to litigate class action and PAGA claims in court. Cusimano reinforces the trend of courts strictly scrutinizing employer-drafted arbitration clauses, allowing costly representative litigation to proceed for employees against their employers. Arzate v. ACE American Insurance Companyvii In Arzate, a costly appeal was won, at least in part due to effective (while imperfect) drafting of their arbitration language. The Court of Appeal’s analysis in Arzate centered on the interpretation of arbitration agreements and which party was required to initiate arbitration. The arbitration language at issue required that any party who sought to initiate arbitration must do so within thirty days. The Court determined that the only party who would seek to initiate a claim would be a party seeking relief or, in other words, an employee. As a result, the Court of Appeal found that the employer was not required to initiate arbitration and, as a result, did not breach the arbitration agreements or waive its right to arbitrate. Tellingly, the Court made clear that while the employer “arguably could have used different language in the arbitration rules and procedures to underscore this point, [] the document appear[ed] to be written with a minimal amount of legalese for the benefit of employees without legal training. Read in the context of the entire agreement, the colloquial language shows that the plaintiffs were the party that “want[ed] ... [a]rbitration,” and that they were required to file a demand to initiate the process given their agreement that they would “submit” their employment-related claims to arbitration.” While, ultimately, this decision favored the employer, the trend is clear: Employers must seek regular guidance from their attorneys who monitor these decisions and can provide cutting-edge advice to avoid these types of legal issues. Implications for Employers These cases illustrate a trend in Second District jurisprudence regarding the importance of precision in drafting arbitration provision language. While the law has an underlying strong public policy favoring arbitration, these decisions establish a recurring pattern of the refusal to enforce unclear arbitration provisions in a variety of contexts. Poorly drafted provisions can result in significant litigation, which likely would have been avoided if carefully considered language was utilized. These problems are clearly demonstrated through the various interpretations of the arbitration clauses invalidity and the Court’s unwillingness to enforce them in various scenarios. A carefully crafted arbitration provision and class action/PAGA waiver should be clearly worded, voluntary in nature, fair, and mutual, and include adequate notice to the employee. The provisions should also take into consideration recent decisions which, provide more specific guidance as to pitfalls that must be avoided. These recent decisions serve as a warning: employers who fail to seek regular review may find themselves embroiled in costly and unnecessary litigation without defenses that were otherwise available to them. Action Plan: Steps Employers Should Take Every employer should take this opportunity to seek a review of existing forms provided to their employees or put in place new forms that will ensure adequate protection and insulate them from costly wage and hour litigation in the future.
April 8, 2025
Labor and Employment
The Future of DEI in the Private Sector: Navigating a Changing Legal Landscape
The private sector's Diversity, Equity, and Inclusion (DEI) landscape is undergoing significant transformation in response to evolving federal policies and legal challenges. Two executive orders from President Donald Trump in early 2025—Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”—mark a clear shift in the federal government’s stance on DEI initiatives. These orders eliminate DEI programs within federal agencies, revoke affirmative action requirements for federal contractors, and impose new compliance obligations. As a result, private employers—especially federal contractors and grant recipients—should reassess their DEI strategies, considering increased scrutiny and potential legal risks. Executive Orders and Policy Shifts The Trump administration has ramped up its scrutiny of DEI initiatives across both the federal government and the private sector, treating employment practices that take protected characteristics into account as potentially unlawful. While the Administration has not explicitly defined "illegal DEI," public statements suggest that policies tying compensation to diversity targets, factoring protected characteristics into hiring, or requiring diverse interview slates are high-risk. However, initiatives such as open employee resource groups and broader candidate pools may face less scrutiny. Companies should align internal policies with disclosures and prepare for potential government investigations. Executive Order 14151, issued on January 20, 2025, mandates the termination of all federal DEI-related offices, grants, and programs, asserting that such initiatives violate civil rights laws. The following day, Executive Order 14173 rescinded affirmative action requirements for federal contractors, directing the Office of Federal Contract Compliance Program to halt diversity-related enforcement. Contractors must now certify compliance with anti-discrimination laws, with noncompliance potentially leading to False Claims Act liability. On February 5, 2025, the Department of Justice (DOJ) Civil Rights Division announced plans to investigate and penalize illegal DEI mandates in the private sector and federally funded institutions. Simultaneously, the Office of Personnel Management (OPM) instructed federal agencies to remove unlawful diversity requirements from hiring and selection processes, reinforcing a shift toward merit-based employment policies. Expanded Enforcement Landscape: What Employers Must Do Now—and Why Private businesses must take immediate and deliberate steps to evaluate their DEI policies and practices and craft a strategic response. That response may involve revising existing policies, reaffirming a commitment to DEI (whether amended or intact), or preparing to pause, pivot, or defend current practices. In today’s fast-moving and high-stakes enforcement environment, inaction is not a neutral stance. It is a strategic decision—one that could expose an organization to government scrutiny, private litigation, reputational backlash, internal tension, or all of the above. Executive Order 14173 signals a dramatic expansion in the federal government’s oversight of diversity-related initiatives, extending well beyond public institutions and federal contractors. The order explicitly instructs all agencies to investigate what it terms “illegal” DEI preferences in the private sector and to issue formal enforcement recommendations within 120 days. These directives apply not only to publicly traded corporations but also to large nonprofits, philanthropic foundations, professional associations, and major universities—broadening the scope of potential enforcement targets across virtually every major sector of the economy. The Equal Employment Opportunity Commission (EEOC) is taking active steps to implement the administration’s vision. EEOC Chair Andrea R. Lucas has publicly committed to rooting out what she describes as unlawful DEI-driven discrimination, particularly those policies based on race or sex. The agency has removed language related to gender identity from its internal and public-facing platforms and has emphasized a shift toward a strictly merit-based framework in alignment with the administration’s priorities. In parallel, other federal agencies have been tasked with developing litigation strategies and potential regulatory actions to deter identity-based preferences, creating an increasingly complex legal landscape for employers. What makes this moment particularly challenging is the legal ambiguity that now surrounds many DEI practices. Although Executive Order 14173 stops short of banning all DEI initiatives, it targets those that include quotas, demographic set-asides, or explicit preferences based on protected characteristics—practices the administration has signaled are incompatible with federal civil rights law. These categories of DEI programming now carry heightened legal risk, even if they were once considered industry best practices. This presents a difficult paradox for private employers. Continuing with DEI programs may trigger reverse discrimination lawsuits, internal employee complaints, or direct federal investigation. At the same time, rolling back or eliminating those programs altogether may lead to claims of disparate impact, undermine employee morale, damage recruitment and retention efforts, and erode hard-won reputational goodwill. In short, the stakes are high, and the risks exist on both sides of the equation. Employers cannot afford to take a passive or reactive posture. Whether your organization has a well-established DEI framework or is in the early stages of building one, now is the time to conduct a thorough review, understand your exposure, and make intentional decisions that balance legal compliance with business goals and organizational values. The key is to act—not out of fear but with clarity, strategy, and purpose. Judicial Challenges and the Ongoing Legal Debate These actions have triggered a wave of litigation, contributing to a rapidly evolving and uncertain legal landscape for private employers and institutions navigating DEI compliance. On February 3, 2025, several advocacy and academic organizations—including the National Association of Diversity Officers in Higher Education and the American Association of University Professors—filed suit in the U.S. District Court for the District of Maryland, seeking to block key provisions of Executive Orders 14151 and 14173. In National Association of Diversity Officers in Higher Education et al. v. Trump et al., the plaintiffs argued that the orders violated the First and Fifth Amendments by imposing vague and overbroad restrictions on speech and association, and by chilling lawful DEI-related activities. On February 21, 2025, Judge Adam B. Abelson issued a nationwide preliminary injunction enjoining federal agencies from enforcing the Termination, Certification, and Enforcement Threat Provisions of the executive orders. However, the court allowed federal investigations into alleged “illegal DEI discrimination” to proceed, emphasizing that while certain aspects of the orders could be constitutionally enforced, others lacked clarity and posed significant risks to protected constitutional rights. Judge Abelson denied the Trump administration’s motion for a stay of the injunction on March 3, 2025, finding that the plaintiffs had demonstrated a likelihood of irreparable harm and that the challenged provisions raised serious constitutional concerns. The court also declined to limit the relief to the named plaintiffs, citing the broad implications of the orders across multiple sectors and jurisdictions. On March 10, 2025, the court reaffirmed that the preliminary injunction applied nationwide to all federal executive agencies, departments, and officials—excluding only the President—underscoring that executive authority must still operate within constitutional boundaries. However, on March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit granted the government’s motion to stay the preliminary injunction, effectively restoring full enforcement of Executive Orders 14151 and 14173 pending appeal. The unanimous ruling by a three-judge panel was issued shortly after the district court addressed plaintiffs’ concerns that the Department of Justice had failed to comply with the earlier injunction. In a rare move, each judge on the Fourth Circuit panel issued a separate concurring opinion. Chief Judge Albert Diaz acknowledged the controversy surrounding DEI and expressed support for those working to advance such initiatives, while also noting that neither executive order defined the term “DEI” or its components. Judge Pamela Harris concurred in the stay based on the limited scope of the executive orders but cautioned that overbroad enforcement could still raise significant First Amendment and Due Process concerns. Judge Allison Jones Rushing, in her concurrence, questioned the breadth of the district court’s injunction and emphasized judicial impartiality, pushing back on the normative statements in support of DEI expressed by her colleagues. On March 17, 2025, the Fourth Circuit requested the parties to respond to a proposed briefing schedule by March 24, which could extend the briefing into late May. While the stay allows the executive orders to remain in effect during the appeal, the ultimate legality of the orders remains unresolved and may ultimately be determined by the U.S. Supreme Court. For now, private employers and institutions should stay closely attuned to these legal developments as the balance between regulatory enforcement and constitutional protections continues to shift. The evolving litigation landscape may significantly impact compliance obligations, enforcement risks, and the future of DEI-related initiatives nationwide. Business Consideration and Strategic Adjustments for Employers Despite increased federal scrutiny, businesses must carefully balance compliance with broader DEI objectives, ensuring alignment with legal requirements and inclusivity goals. Actions to consider include: Conducting a Comprehensive Legal and Risk Assessment - Employers should evaluate their DEI programs for compliance with federal anti-discrimination laws. Initiatives involving quotas or preferential treatment based on protected characteristics should be reviewed and, if necessary, modified. Refining DEI Messaging and Training Programs - Businesses should reassess their public statements and training programs to emphasize equal opportunity principles while avoiding language that could be construed as endorsing unlawful preferences. Monitoring Legislative and Judicial Developments - Employers should stay informed about regulatory changes that may impact DEI initiatives. Consulting with legal counsel and industry groups can help businesses navigate this uncertain environment. Adapting DEI Strategies to Align with Legal and Business Goals - Companies should continue fostering inclusive workplaces through legally compliant initiatives, such as mentorship programs, leadership development efforts, and workplace culture assessments. Businesses can maintain their DEI commitments while minimizing legal by focusing on equity and opportunity rather than preferential treatment. Conclusion The private sector must navigate a complex and evolving DEI landscape shaped by federal policies, legal challenges and shifting public expectations. While government-mandated DEI programs face heightened scrutiny, corporate diversity initiatives remain a key business strategy. However, evolving executive actions introduce ambiguity in compliance obligations, requiring companies to balance federal court interpretations of Title VII, state and local anti-discrimination laws, and international regulations. By proactively adapting to these changes, businesses can continue to promote inclusivity while ensuring compliance and mitigating legal risks.
March 28, 2025
Labor and Employment
Adjusting Job Descriptions for Business Needs – What You Need to Know
Changing an employee's job description during business restructuring can be tricky, especially when balancing business needs with legal requirements. Can human resource managers change an employee’s job description to align with new business needs without the employee’s consent? From a legal perspective, the general answer is yes; in some cases, you can make these changes. Business Necessity and Employment At-Will Unless there is a specific clause in an employment contract or a collective bargaining agreement that dictates otherwise, employers generally have the right to adjust an employee’s job duties, schedule, or work location based on business needs. This flexibility is part of the principle of “at-will” employment, which allows employers to make changes to terms and conditions of employment as long as those changes don’t violate any specific laws or agreements. However, it’s important to note that some local and state regulations may impose additional requirements. For example, certain states and cities have predictive scheduling laws that require businesses to provide workers with advance notice of schedule changes. If the company fails to do so, it could face penalties. Additionally, in some places, if an employee’s scheduled hours are cut upon arrival to work, they may be entitled to what’s known as "reporting pay" or "show-up pay" — a set minimum amount for showing up, even if they aren’t needed to work their full shift. Considerations Under the FMLA If your employee is on Family and Medical Leave Act (FMLA) leave, you must proceed with caution. The FMLA protects employees from having their job duties, schedules, or work locations changed in a way that negatively impacts their ability to take leave. For example, an employer cannot reduce the employee’s hours to avoid their eligibility for FMLA or transfer the employee to a position that discourages the use of leave. Moreover, when the employee returns from FMLA leave, they must be reinstated to their same job or an equivalent one. An "equivalent" position is one that is virtually identical in terms of pay, benefits, working conditions, and responsibilities. While you can offer the employee a different shift, schedule, or position after they return from leave, you cannot pressure them to accept it if it is against their wishes. Retaliation and Discrimination Protections It’s also important to remember that changing an employee’s job duties or schedule in retaliation for exercising their legal rights can result in legal violations. For example, retaliating against an employee for filing a workers' compensation claim, taking FMLA leave, or engaging in other protected activities is illegal. Similarly, making changes based on discriminatory reasons (e.g., reducing hours or authority for only certain groups of employees, such as women) is also prohibited. Key Takeaways for HR Managers Check your company’s policies: Ensure there are no employment contracts or collective bargaining agreements that limit your ability to change the employee’s job description. Know the laws in your state and locality: Be mindful of predictive scheduling laws and reporting pay regulations that may impact your ability to make changes. FMLA considerations: If the employee is on FMLA leave, be careful not to make changes that interfere with their rights to take leave or return to a similar position. Avoid retaliation or discrimination: Ensure that any changes are not made in retaliation for an employee’s legal rights or based on unlawful discrimination. When changing an employee’s job description, balance business needs with legal compliance and clear communication. While you may have the authority to adjust roles, keep employees informed, consider their concerns, and comply with relevant laws to help prevent potential disputes. Thoughtful planning and transparency can go a long way in maintaining a positive workplace during change.
March 20, 2025
Labor and Employment
EEOC Investigates 20 Private Law Firms Questioning Their DEI-Related Employment Practices
On March 17, EEOC Acting Chair Andrea Lucas sent letters to 20 large law firms requesting information about their diversity, equity and inclusion (DEI) related employment practices. The letters express the EEOC’s suspicions that the firms’ employment practices, including those labeled or framed as DEI, are, in fact, discriminatory based on race, sex, or other protected characteristics, in violation of Title VII of the Civil Rights Act of 1964 (Title VII). The suggestion is that the firms are treating various groups in different ways regarding the terms, conditions, and privileges of employment, or that they may be limiting, segregating, and classifying employees according to a protected characteristic. Lucas wrote: “The EEOC is prepared to root out discrimination anywhere it may rear its head, including in our nation’s elite law firms.” Lucas continued, “No one is above the law—and certainly not the private bar.” You can read the letters here. Moreover, the EEOC has established an email where whistleblowers can submit information to the EEOC about potentially unlawful DEI practices at law firms: lawfirmDEI@eeoc.gov. Private employers should carefully re-examine their employment practices, including hiring practices, determining if they are allocating more resources to promote one group of employees, whether all employees are welcome to participate in all programming (for example, a women employees’ support group), and whether pay practices are consistently equal pay for equal work.
March 18, 2025
Labor and Employment
Office Romance: Navigating Workplace Relationships and Managing Legal Risks
Dear Sarah, Two of my employees have started dating, and I’m worried it might affect their work or lead to complaints from others. Should we have a formal policy on workplace relationships? Are we even allowed to have such a policy? Yours in keeping it professional this Valentine’s Day (and beyond), The HR Cupid The HR Cupid, I can understand your concern. Office relationships, while not uncommon, can quickly become a tricky issue for employers to manage. Whether it's gossip, a drop in productivity, or potential legal claims, workplace romances can create significant risks for both employees and the company. The good news is, with a clear policy and proactive approach, you can mitigate these risks while still allowing employees to navigate their personal lives in a professional manner. Can You Have a Policy on Workplace Relationships? Yes, you absolutely can have a policy on workplace romances. In fact, it’s strongly recommended that employers do so. While outright banning office relationships is typically unreasonable (and likely unenforceable), a policy that establishes clear expectations for conduct can help mitigate potential risks. The reality is that office romances can open the door to several issues, including sexual harassment, retaliation, favoritism, and even workplace violence in extreme cases. These risks can lead to significant legal liabilities if not managed carefully. A thoughtful, well-drafted policy can go a long way in helping you prevent problems before they arise. What Are the Risks of Office Relationships? There are a number of risks to consider when office romance enters the picture: Sexual Harassment Claims: One of the most common legal risks of office romances is sexual harassment. These claims often arise when one employee feels their personal space or boundaries are violated by a romantic advance, particularly in relationships between supervisors and subordinates. Even consensual relationships can lead to claims if other employees perceive favoritism or if the relationship sours. Public displays of affection, or a sudden shift in the dynamics between employees, can also create uncomfortable work environments and lead to hostile work environment claims. Retaliation: If an employee rebuffs unwanted advances or ends a relationship, retaliation can become a concern. For example, an employee might claim that they were treated unfairly or passed over for promotions as a result of rejecting or ending a romantic relationship. Retaliation claims are often rooted in employees feeling that they were punished for not engaging in or maintaining a relationship. Favoritism and Conflicts of Interest: Relationships between supervisors and subordinates carry the risk of favoritism claims. Employees may feel that the romantic couple is receiving special treatment, whether in terms of assignments, promotions, or performance reviews. Even if favoritism is not actually occurring, the perception of bias can cause significant issues with morale and productivity. Workplace Violence: While rare, workplace violence stemming from a failed romance or unrequited affection is a very real possibility. Employers are responsible for maintaining a safe work environment, and if a situation involving a breakup or unreturned advances escalates into violence, the company could be held liable if they failed to manage the risks. How Can Employers Minimize Risk? There are several steps employers can take to reduce the risks associated with office relationships: Bar Romance Between Supervisors and Subordinates: Relationships between supervisors and subordinates are among the riskiest for sexual harassment claims and can lead to serious conflicts of interest. Many employers choose to prohibit these types of relationships or require the employee in the supervisory role to disclose the relationship so that any necessary adjustments can be made. A direct reporting relationship between a supervisor and their partner could create significant problems, and it’s often best to ensure that there is no overlap in their work responsibilities. Implement a “Love Contract”: A “love contract” is an agreement between two employees in a romantic relationship that affirms their relationship is consensual and not a form of sexual harassment. It can also include a reminder that the employees are expected to maintain a professional demeanor while at work. While not a guaranteed shield against legal action, it can provide a level of transparency and reduce the risk of future claims. Ensure Access to Sexual Harassment Training and Reporting Channels: One of the most effective ways to minimize the risk of sexual harassment claims is to provide ongoing sexual harassment training for all employees. This training should clearly define inappropriate behaviors, outline reporting procedures, and reassure employees that complaints will be taken seriously. Additionally, offering multiple, accessible reporting channels (such as anonymous hotlines or online forms) can help ensure that employees feel safe reporting any issues before they escalate. Communication and Monitoring Policies: In today’s digital age, communication often takes place via email, company chat systems, or even social media. Employers should make it clear that digital communications within the workplace are monitored and that harassment can take place through these channels as well. Having a policy that outlines acceptable use of company technology can act as a deterrent and ensure employees understand the expectations for professional conduct online. What Should Employers Do When Things Go Wrong? If a workplace romance goes sour, the situation can quickly escalate. The best defense for an employer is to ensure that all preventative measures—policies, training, and monitoring—are in place and adhered to. Courts will look at whether an employer has taken reasonable steps to address potential issues and mitigate risks. If a claim is filed, employers who have documented their policies, communicated expectations clearly, and enforced those policies will be in a better position to defend themselves. Additionally, any documentation related to the relationship (such as the disclosure of the relationship or a signed love contract) can be useful in protecting the company’s interests. Final Thoughts: Office Romance, Yes—But With Caution While you can’t stop love from blooming in the workplace, you can take steps to ensure that it doesn’t create legal or professional problems. By implementing a clear policy on workplace relationships, providing sexual harassment training, and setting expectations around professional behavior, you can manage the risks and allow your employees to balance their personal and professional lives effectively.
February 14, 2025
Labor and Employment
Sports Betting in the Workplace: Ensuring the Super Bowl and March Madness Don't Cause Legal Madness and Super Problems
Dear Sarah, My employees want to do a fantasy football league. I don’t really care as long as it doesn’t mess with their work. Is there any reason I need to worry about this, or can I just let them go at it? – Janet "I’m Not the HR Police" from Accounting It’s the season for sports betting excitement, with the Super Bowl upon us and March Madness just around the corner. Your employees are likely buzzing with talk of squares, brackets, and maybe even some secret side bets. While these friendly competitions can boost morale and foster camaraderie (especially for remote or hybrid teams), there are some legal considerations to keep in mind. Because as much fun as a bracket challenge can be, sports betting could land you in a legal bind if you're not careful. Is Workplace Sports Betting Legal? Thirty-eight states and Washington D.C. have legalized sports betting in some form since the U.S. Supreme Court struck down the federal ban in 2018. But here’s the kicker: the regulations vary widely. Some states have specific exceptions that allow for “social gambling,” meaning office pools can be permissible if they meet certain conditions, like ensuring no one running the pool profits. The rules on what qualifies as a “social” game and what constitutes “illegal” gambling can be murky, and those rules are still evolving. For instance, New York introduced a bill in 2023 to specifically legalize Super Bowl squares. Gambling and unlicensed sports betting, including office pools, are prohibited in many states and under the Interstate Wire Act of 1961 (IWA) and the Uniform Internet Gambling Enforcement Act of 2006 (UIGEA). The IWA makes it illegal for anyone in the U.S. to place or receive wagers on any sporting event or contest that involves interstate or foreign commerce. The UIGEA criminalizes the act of accepting funds for unlawful internet gambling, specifically by those "engaged in the business of betting or wagering." With the rise of remote and hybrid work setups, there's an increased risk that office pools could cross state lines, triggering the laws of multiple states and federal gambling regulations., So while you might think it’s just a friendly office competition, the law might say otherwise in certain jurisdictions. Understanding Which State Laws Apply Modern companies are no longer limited to hiring people from the state in which they are based, and remote-first businesses often have employees spread across multiple states with differing legal stances on sports betting. In most cases, the laws that govern sports betting are determined by where employees are physically located. If an employee is based in a state where sports betting is illegal, they may be restricted from participating in sports betting activities, regardless of whether the company itself operates in a jurisdiction where betting is legal. Companies with large, distributed teams need to have systems in place to track the physical location of employees and assess legal requirements accordingly. This is where working with a payroll provider, human resources tools, or compliance experts can be incredibly valuable in staying informed about location-based regulations. The rise of fully remote and hybrid work models has made this issue even more complex. For companies with employees working remotely from different states, where the employee is physically working from at any given time becomes key. For example, if an employee works from a state where sports betting is illegal, they may not be permitted to place bets, even if they are working for a company based in a state where the activity is allowed. If a company is headquartered in a state where sports betting is legal, but some employees are working remotely from states where it’s banned, the company may need to consider how to handle internal policies and even provide guidance about prohibited activities. Consider Non-Monetary Alternatives: Prizes Don’t Have to Be Cash The risk of violating gambling laws can be reduced significantly when the pool doesn’t involve money. You could opt for fun, non-cash prizes like extra time off, a team lunch, or even just bragging rights. These types of prizes keep things light and engaging without the potential legal risks associated with monetary rewards Maintain Productivity Amidst the Madness Between filling out brackets and selecting squares, productivity could take a hit. If employees are sneaking off to check scores, make sure you set expectations about what’s acceptable during work hours. Some companies have implemented policies where pools and betting activities are restricted to non-work hours, or at least during designated breaks. This helps mitigate the negative impact on productivity and keeps employees engaged without the legal headaches. Mitigate Common Risks with Written Policies A well-drafted company policy on sports betting can help minimize legal risk and clarify the boundaries for employees. A “no betting” policy or a policy that outlines clear, specific rules for office pools is a great start. An effective company policy on sports betting should touch on: Participation: Restrict participation to employees in states where it’s legal and clarify eligibility criteria. Emphasize that participation should always be voluntary to respect those who choose to opt out for personal, religious, or addiction-related reasons. Profits and Prizes: To avoid crossing into illegal territory, ensure that the person running the pool isn’t taking a cut of the money. This is a common rule in states that allow office pools: the organizer must not profit in any way. Be sure to also comply with any local laws that limit or restrict prize money. If your pool will offer non-monetary prizes, outline them in your policy. Procedures and Expectations: Prohibit employees from using work devices or company time to organize or manage pools. Encourage participation during breaks or outside of work hours. You should also establish procedures to address any potential complaints or violations that may arise to ensure fairness and transparency. Takeaway Where legal, office sports betting pools can be a great way to build morale and camaraderie, but they require careful planning to comply with the law. With the proper planning and compliance with the relevant laws, you can foster a fun and compliant workplace environment that avoids unnecessary risks.
February 5, 2025
Labor and Employment
It Ends with Us, But Continues in Court: Blake Lively and Justin Baldoni's Legal Battle
The film “It Ends With Us” was a massive hit in 2024, grossing $350 million globally. Yet, the drama surrounding the film has shifted from the big screen to the courtroom, with a series of legal battles between its stars, Blake Lively and Justin Baldoni, that have captivated both the public and legal observers alike. In the ongoing legal battle between actors Blake Lively and Justin Baldoni, a federal judge has stepped in to try and quell the increasingly public war of words. At a hearing in Manhattan on February 3, 2025, Judge Lewis J. Liman ordered both legal teams to limit their out-of-court commentary, citing a New York rule (Rule 3.8) designed to prevent public statements that could prejudice legal proceedings. This intervention comes as the public has been parsing footage of a scene at issue in Lively’s lawsuit, recently released alongside a statement from Baldoni’s attorney. Baldoni’s team has also launched a website where users can access court documents related to the film's production. The lawsuits present conflicting accounts of events on the set of "It Ends With Us," an adaptation of a novel about domestic abuse, in which Lively plays the heroine and Baldoni her abusive partner. Lively’s suit accuses Baldoni and Wayfarer Studios CEO Jamey Heath of sexual harassment, including entering her trailer uninvited while she was undressed or breastfeeding, improvising unwanted kisses, and discussing his “previous pornography addiction.” She claims that after raising objections, Wayfarer launched a “retaliation campaign” against her. Baldoni’s suit denies these accusations, claiming all trailer entries were consensual, kissing scenes were not improvised, and the discussion of his past addiction was contextualized. He accuses Lively, her husband Ryan Reynolds, and her publicist of defamation and extortion, claiming she sought to “extract concessions and creative control” of the movie. He further alleges that he was the victim of her attempts to damage his reputation. The hearing was the first court appearance by the lawyers since Lively filed her initial complaint in California in December, followed by a New York Times report on her accusations. Baldoni has since sued the Times for libel, claiming the article omitted key information. The Times has stated they will vigorously defend their reporting. Judge Liman, acknowledging the extensive public record of the accusations, emphasized that the court proceedings, not public pronouncements, will ultimately determine the facts of the case. Neither Lively nor Baldoni was present at the hearing. Initial Allegations On December 20, 2024, Blake Lively filed a formal complaint with the California Civil Rights Department, accusing director and co-star Justin Baldoni, producer Jamey Heath, and Wayfarer Studios of sexual harassment and creating a toxic work environment. It seems that behind the movie magic was a not-so-glamorous reality. Lively’s complaint lays out a series of troubling incidents, including Baldoni allegedly ignoring intimacy protocols, improvising unapproved physical contact (like, biting Lively’s lower lip during a scene), and inserting controversial sexual content into the film without consent. Meanwhile, producer Heath is accused of showing Lively an unsolicited nude video of his wife giving birth. From a legal standpoint, these allegations—if proven true—could present serious violations under California’s Fair Employment and Housing Act (FEHA). FEHA protects workers from discrimination, harassment, and retaliation, and sexual harassment is a particularly serious violation that could expose the production company and individuals involved to significant liability. In Lively’s case, the allegations regarding unsolicited physical contact and the lack of consent for intimate scenes could amount to unlawful sexual harassment in the workplace. These types of cases are taken very seriously in California, where the state’s strict sexual harassment laws are designed to prevent such behavior and ensure that victims have legal recourse. The real complexity in these claims lies in proving the behavior was pervasive and unwelcome. Given that these events allegedly took place during production and involved multiple key players—director Baldoni and producer Heath—it will be important for Lively to provide evidence of the repeated and pervasive nature of the harassment to make her case. The New York Times published an article about the allegations the very next day, also hinting at deeper tensions, including a campaign allegedly aimed at destroying Lively’s reputation. Baldoni Fires Back with Defamation by Implication Claim Ten days later, Baldoni fired back and sued the New York Times for defamation on December 31, 2024[i]. Baldoni claims the publication’s story about the sexual harassment allegations against him was part of a broader “smear campaign” orchestrated to undermine him. This counters Lively’s claims; Baldoni accuses Lively of damaging his reputation through false reporting. Baldoni’s lawsuit presents an interesting legal angle, focusing on defamation by implication. According to his complaint, the New York Times article contained damaging content that painted him in a false light. While the article never directly accused him of sexual harassment, Baldoni contends that the context and tone of the reporting led readers to infer his guilt. Defamation by implication occurs when the publication or communication indirectly suggests false information that harms a person’s reputation. Baldoni argues that the story—by highlighting Lively’s allegations without providing his side—implicitly presented him as the perpetrator. Moreover, Baldoni also seeks to address the “damage to his career” caused by these articles, which is a standard claim in defamation suits (i.e., the plaintiff is claiming that the defamatory statements harmed their reputation and resulted in professional or financial loss). He’s not just asking for retraction or correction; he’s pursuing actual damages (compensation for the real losses suffered as a result of the defamation) and possibly punitive damages (additional financial penalties aimed at punishing the defendant if the reporting was done with reckless disregard for the truth or malicious intent). Baldoni has also claimed that Lively was actively working against him throughout production, asserting that she "berated" him on set and attempted to undermine his creative control. The lawsuit further alleges that Lively edited the film’s final cut without his approval and attempted to block him from attending the premiere. Baldoni claims that Lively’s actions amounted to a "pattern of vindictiveness" designed to ruin his professional standing. This part of Baldoni’s claim—focused on the editing of the film and his exclusion from the premiere—could potentially lead to a breach of contract or tortious interference claim. A breach of contract claim would suggest that terms agreed upon in a legal agreement were violated, while tortious interference occurs when someone intentionally disrupts the relationship or contractual agreement between parties, potentially leading to significant financial damages and reputational harm. Film directors often have the final say on creative decisions, so Lively’s interference could be viewed as overstepping and damaging to Baldoni’s reputation in the film industry. Additionally, Baldoni claims that Lively, along with her husband Ryan Reynolds, leveraged their Hollywood clout to push for his removal from the film's production, including allegedly pressuring William Morris Entertainment to drop him as a client. If true, this could form the basis for a tortious interference claim. In such a claim, one party would argue that another intentionally interfered with their contractual relationships or business dealings. This can be tricky to prove, as it requires showing that the interference was unjustified and intentional. Lively Escalates Her Complaint into a Federal Lawsuit On the same day as Baldoni filed his lawsuit against the New York Times in Los Angeles, Lively formalized her California Civil Rights Department complaint into a federal lawsuit[ii] in New York. According to Lively’s lawsuit, Baldoni, Heath, and a crisis PR expert named Melissa Nathan tried to bury Lively’s reputation by manipulating social media, planting negative stories, and leveraging crisis communications to protect Baldoni’s public image. Lively claims that this campaign included texts from Nathan and Baldoni discussing how to “bury” people and target women in the public eye. The lawsuit alleges that even the big money folks at Wayfarer Studios, including co-founder Steve Sarowitz, were involved in the plot. From a legal perspective, if Lively’s claims about the smear campaign are proven, this could be a strong case for defamation and tortious interference. Defamation requires showing that false statements were made about a person, which harmed their reputation. In this case, the alleged "burying" of Lively through negative media manipulation would likely involve defamatory statements, whether directly or indirectly implied. Tortious interference claims, on the other hand, focus on one party intentionally damaging another’s business or reputation by improper means. If Lively can demonstrate that Baldoni and his team used these tactics intentionally to damage her career, there could be significant legal repercussions for all involved. However, the challenge for Lively will be proving that these negative media tactics were both intentional and defamatory, rather than part of a broader public relations strategy designed to mitigate the fallout from the initial complaints. PR teams are often hired to clean up a reputation, but if they cross the line into deceptive practices or actively seek to harm someone's reputation, they may have legal exposure. The decision to file the lawsuit in New York—despite the initial complaint being lodged in California—appears to be a strategic move regarding forum selection. California might offer more protections under its state laws, but New York law allows for quicker and more direct access to the courts, enabling Lively and her legal team to bypass some procedural hurdles and go straight to litigation. Additionally, the New York venue may offer a broader legal framework by incorporating both federal and state claims, and it could potentially provide a more favorable jurisdiction for Lively's case, particularly considering that much of the case's events occurred in New York. Lively’s complaint included demands for a jury trial. Baldoni Also Sues Lively in the Southern District of New York Adding another layer to the legal battle, Baldoni and Wayfarer Studios filed a lawsuit[iii] against Lively, Reynolds, and publicist Leslie Sloane on January 16, 2025, seeking a staggering $400 million in damages. This suit, filed in the federal District Court for the Southern District of New York, expands upon the existing claims, alleging civil extortion, defamation, and a series of contract-related violations. This lawsuit reinforces the argument that the conflict originated from a creative struggle. It alleges that Lively gradually increased her influence, demanding creative control beyond the typical scope of an actor's role. This included taking over wardrobe decisions, rewriting scenes, creating her own film cut, and ultimately demanding Baldoni's exclusion from promotional activities. The lawsuit vehemently denies any sexual harassment or inappropriate behavior by Baldoni, Heath, or any member of the production team. Instead, it accuses Lively and Reynolds of engaging in "extortionate threats" to damage Baldoni's reputation. Baldoni amended his complaint on January 31, 2025, just days before the scheduled initial pretrial conference. In the amended filing, which now includes the New York Times as a defendant, Baldoni alleges that metadata on the New York Times' website reveals the paper had access to Lively's civil rights complaint at least 11 days prior to their bombshell December 21st report. That report, titled "'We Can Bury Anyone': Inside a Hollywood Smear Machine," accused Baldoni and his publicists of orchestrating a campaign to damage Lively's reputation, seemingly in retaliation for her complaints of sexual harassment on set. This new information regarding the Times' prior knowledge of the complaint raises questions about the timing and context of their reporting. Furthermore, the amended lawsuit includes new claims regarding Ryan Reynolds' portrayal of the character Nicepool in "Deadpool & Wolverine," with Baldoni accusing Reynolds of using the character to mock and bully him. The amended filing includes claims for civil extortion, defamation, false light invasion of privacy, breach of implied covenant of good faith and fair dealing, intentional interference with contractual relations, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, promissory fraud, and breach of implied-in-fact contract. Leaked Footage, Gag Order Request, and Website Launch On January 21, 2025, Justin Baldoni's legal team dropped a bombshell: a 10-minute video from the "It Ends With Us" set. This move, intended to counter Blake Lively's sexual harassment allegations, captures intimate moments, including a rehearsal of a romantic dance with Lively. While Baldoni claims the footage exonerates him, Lively's team argues it actually supports her claims, pointing to specific scenes as evidence of inappropriate behavior. In a dramatic escalation, Lively and Reynolds filed a motion for a gag order against Baldoni's lawyer, Bryan Freedman. They accuse Freedman of a relentless media campaign, including inflammatory statements and potential leaks, aimed at swaying public opinion and prejudicing the jury pool. This, they allege, is a continuation of the alleged retaliation orchestrated by Baldoni and his team since Lively first spoke out. Additionally, a day after amending his New York complaint on January 31, 2025, Baldoni’s legal team launched a website, featuring the amended complaint and a detailed timeline of events. Given the proximity of the launch to the pre-trial conference, this may have been a preemptive move by Baldoni to circumvent any potential gag order. By publishing the information online, Baldoni may be attempting to solidify his narrative in the public eye and potentially undermine the basis for a gag order. Case Consolidation and Trial Date Set In a major update from New York, federal judge Lewis J. Liman has scheduled a trial date for March 9, 2026, marking the next chapter in this high-profile legal battle. The trial, which will address the complex claims of sexual harassment, defamation, and contract violations, is now set to proceed after Liman moved the initial conference from mid-February to next week. The court is also preparing for discussions on pretrial publicity and attorney conduct, with both sides expected to present concerns over the impact of public statements and potential jury bias. This adjustment follows a filing by Lively’s legal team, which alleges that Baldoni’s attorney is attempting to influence potential jurors. Specifically, Lively’s lawyers claim that Baldoni’s legal team has been actively working to harm Lively’s career by launching a website that selectively releases documents and communications between the two stars. According to Lively’s legal representatives, the goal of this strategy is to sway public opinion and turn prospective jurors against her before the trial even begins. As the New York case gains momentum, another legal front has emerged in Texas. Lively has filed a request in a Texas court to depose a man she claims played a central role in turning online sentiment against her during the film’s release and promotion. This new legal move adds further complexity to the already tangled web of lawsuits, as Lively seeks to identify and address those responsible for the negative publicity she alleges was orchestrated to damage her public image during the film's promotional campaign. As the legal battle intensifies on both coasts, all eyes will be on the actions of the court and the legal strategies of both Lively and Baldoni as they prepare for what promises to be a protracted and high-profile trial. The Legal Implications Moving Forward Judge Liman's January 27th decision to consolidate the Lively and Baldoni cases in the Southern District of New York marks a new, and potentially decisive, phase in their legal battle. This procedural move streamlines the trial process, focusing the complex factual and legal issues into a single proceeding, while simultaneously raising the stakes considerably for both parties. Consolidation not only avoids duplicative litigation but also presents a unified narrative to the court, forcing both sides to confront the totality of the allegations and defenses. While it remains to be seen whether Judge Liman will also consolidate Baldoni's separate, and arguably related, suit against the New York Times, the fact that the Times is now a defendant in the consolidated case suggests this is highly probable. This joinder could significantly broaden the scope of discovery and potentially introduce thorny First Amendment issues regarding journalistic privilege and fair report. The outcome of these lawsuits carries significant implications for the entertainment industry, potentially shaping the landscape of workplace conduct and media scrutiny. If Lively's claims of sexual harassment and retaliation are substantiated, particularly given the high-profile nature of the case, it could establish a crucial precedent for worker protections in Hollywood, especially for women navigating the pervasive power imbalances. This could embolden others to come forward and trigger a wave of policy changes regarding reporting and investigating harassment claims. Conversely, Baldoni's claims of defamation and tortious interference, if successful, could raise important questions about the often blurry line between personal and professional conduct on set, potentially chilling the willingness of individuals to report misconduct for fear of legal reprisal. This aspect of the litigation touches upon the delicate balance between free speech and reputational harm, an area of law ripe for development in the context of the #MeToo era. As the litigation unfolds, the entertainment industry will be watching closely. It will be interesting to see how the courts navigate these complex issues of proof and credibility, particularly regarding allegations of harassment and retaliation, which often rely on circumstantial evidence. The case also presents a fascinating interplay between traditional defamation law and the evolving standards for media reporting on sensitive matters, particularly in the context of ongoing investigations and public accusations. Furthermore, the potential long-term effects on industry dynamics, including the power of public opinion and social media pressure, are significant. Regardless of the outcome, this litigation is likely to leave a lasting mark on Hollywood and beyond. [i] Wayfarer Studios LLC v. New York Times, 24STCV34662 (Ca. Sup. Ct. Dec. 31, 2024) [ii] Lively v. Wayfarer Studios LLC, 1:24-cv-10049, (S.D.N.Y.) [iii] Wayfarer Studios LLC v. Lively, 1:25-cv-00449, (S.D.N.Y.)
February 4, 2025
Labor and Employment
Better Call Sarah: Political Speech in the Workplace
Dear Sarah, Help! After this last election, it seems everyone at the office has something to say about politics, and I’m caught between my mission to keep the peace and the very real risk of stifling free speech. Is there a way I can manage these heated political discussions without turning our office into a debate club or accidentally infringing on anyone's rights? Sincerely, Politically Puzzled in HR Dear Politically Puzzled in HR, Political discussions at work intersect with various labor and employment laws, including anti-discrimination regulations, the National Labor Relations Act (NLRA), state laws on mandatory meetings[1], and voting leave policies. Political conversations can also give rise to claims of discrimination, harassment, or retaliation under federal, state, and local anti-discrimination laws. By being mindful of both your right as an employer to set boundaries on political expression and employees’ rights in this area, you can comply with the law and maintain a positive workplace culture. Misconceptions About Free Speech in Private Workplaces Many people assume that the First Amendment guarantees unlimited free speech rights in all workplaces, but it actually applies mainly to government regulation, not to private employers. This means that, generally, private companies have broad discretion to manage political speech at work. However, federal laws like the National Labor Relations Act (NLRA) and anti-discrimination statutes create important limits on this authority. Protected Activities Under the National Labor Relations Act (NLRA) The NLRA, for instance, protects employees—even in non-union settings—when they engage in “concerted activities” related to workplace conditions, such as discussions about pay or safety. If political discussions are directly related to these issues, they may also fall under protected activity. Employers should take care in addressing such conversations, especially as recent guidance from the National Labor Relations Board (NLRB) suggests that protected discussions may now include social justice or other political topics related to employee rights. Risks of Political Speech Leading to Discrimination Claims Even though political views themselves are generally not protected under anti-discrimination laws, discussions that touch on protected characteristics (e.g., race, gender, national origin) may lead to complaints of harassment or discrimination. For example, political debates on topics like immigration or reproductive rights could be seen as targeting certain groups, creating a hostile work environment. Employers should handle any related issues consistently and fairly to prevent claims of biased or discriminatory treatment. State and Local Laws Offering Additional Protections Additionally, some states have laws that prevent employers from disciplining or restricting employees based on their political affiliations, views, or party associations. In some cases, state protections extend beyond traditional political speech to cover social justice advocacy and other issues. Employers must also be aware that state and local laws often provide greater protections for employees than federal laws. For example, some states offer protections similar to First Amendment rights for private employees. Employers should also be familiar with the differences between federal EEO laws and state-level EEO regulations to ensure compliance. Developing Clear and Inclusive Policies Employers should develop clear, effective policies that align with legitimate business interests while minimizing ambiguity around what political activities and expressions are allowed. The policy must consider activities and communications protected under the NLRA as well as relevant state and local laws. To reduce the risk of discrimination, harassment, or bullying claims, employers may want to discourage supervisors from engaging in political discussions with subordinates, as supervisors are not protected by the NLRA. However, these policies must also be carefully crafted to comply with state-specific laws. Additionally, employers should consider implementing a social media policy to set clear expectations for online behavior. Political statements—especially on social media or in public spaces—can have a direct impact on your company’s reputation. Public backlash can arise if an employee, visibly linked to the organization, expresses controversial views. In today’s digital landscape, social media posts are just as influential as in-person comments, so it’s essential to handle online expression carefully. Many states protect employees’ privacy, meaning employers generally cannot demand access to personal social media accounts. If disciplinary action is needed, verify that any content was publicly accessible and relevant to workplace conduct to avoid legal risks. A policy on social media use, drafted in line with state and federal regulations, can help clarify expectations for how employees express their views online. Managing Off-Duty Conduct Employers should be mindful of employees’ rights to engage in political expression outside of work. In California, Colorado, New York, and North Dakota, laws protect employees from adverse actions based on lawful political activities conducted outside of work hours. Employers should exercise caution when considering disciplinary actions for off-duty conduct to avoid violating state-specific protections. Fostering a Respectful and Inclusive Workplace Culture Addressing political speech in the workplace requires a careful balance. A comprehensive, consistently applied policy that values respect and inclusivity can help maintain a positive work environment while respecting employees’ rights. By fostering a respectful culture, employers can reduce potential conflicts and support a productive, harmonious workplace. In the current polarized climate, taking proactive steps to handle political speech thoughtfully can strengthen workplace morale and protect the company from legal risks, ensuring a fair, respectful environment for all. [1]Mandatory employer-sponsored or so-called “captive audience” meetings are those an employer convenes during working hours to educate employees on certain topics, particularly the employer’s views on unionization. Although the NLRB has yet to issue a formal ruling on this issue, it is anticipated that the agency may take a strong stance against these types of meetings.
January 17, 2025
Labor and Employment
New Employment Laws Become Effective on January 1, 2025
The following is a summary of new employment laws which become effective on January 1, 2025. All States Minimum Wage Increases Employers should check their state statutes and local ordinances to determine whether the minimum wage has been increased. Failure to do so could lead in underpayment to employees and potential fines and penalties. State minimum wage increases, effective January 1, 2025: California: $16.50/hour Delaware: $15/hour New Jersey: $14.53–$15.49/hour$15.49 (employers with six or more employees) $14.53 (seasonal employers and employers with fewer than six employees) New York: $15.50–$16.50/hour$16.50 per hour (New York City, Long Island and Westchester County) $15.50 per hour (rest of the state) Also, in some states, like California, the salary test for exempt employees is dependent on the state’s minimum wage. Failure to increase an exempt employee’s salary would result in breaking the exemption and entitling exempt employees to overtime and other requirements for non-exempt employees. California Seven new employment laws in California took effect on January 1, 2025. Changes to the Fair Employment and Housing Act The Fair Employment and Housing Act was amended as follows: Government Codes § 12920 was amended to state that employers may not discriminate against employees based upon any combination of characteristics protected under the Fair Employment and Housing Act. Government Code § 12926 is amended to define “race” as including traits associated with race (rather than historically associated with race), such as hair texture and protective hairstyles. Any city, city and county, county, or other political subdivision of the state will be able to enforce local law prohibiting discrimination in employment against classes of persons covered by the Fair Employment and Housing Act if certain requirements are met, including a requirement that local enforcement is pursuant to a local law that is at least as protective as the act. The Civil Rights Department will promulgate regulations governing local enforcement pursuant to those provisions. Changes to Leave Laws There are two amendments to statutes related to employee leaves of absence: Paid Sick Leave – Employers must provide sick leave to agricultural employees to avoid smoke, heat or flooding conditions created by a state of local emergency. Paid Family Leave – Employers can no longer require that employees take up to two weeks of earned vacation leave prior to using paid family leave. California Worker Freedom from Employer Intimidation Act The California Worker Freedom from Employer Intimidation Act prohibits employers from retaliating against employees who decline to attend employer sponsored meetings or to listen to employer communications that have the purpose of communicating the employer’s religious or political opinions. Workplace Violence Law Employers may seek a temporary restraining order against an individual who has harassed employees or engaged in workplace violence or threats of violence against employees. Worker’s Compensation Notices Employers will be required to include the following in the notice to employees: The employee has the right to consult with an attorney The attorney’s fees will be paid in most cases This is a good reminder to update your employment posters effective January 1st of every year. Prohibition on Requiring Employees to Provide Driver’s License Employers cannot require applicants to have a driver’s license unless the employer reasonably expects driving to be one of the job functions and an alternative form of transportation would not be comparable in travel time or cost to the employer. Freelance Worker Protection Act This Act requires the following for contracts with a freelance worker, defined as a person, that is hired or retained as a bona fide independent contractor by a hiring party to provide professional services in exchange for an amount equal to or greater than $250: Contracts between a hiring party and a freelance worker be in writing and the new law requires a hiring party to retain the contract for no less than 4 years. A hiring party to pay a freelance worker the compensation specified by a contract for professional services on or before the date specified by the contract or, if the contract does not specify a date, no later than 30 days after completion of the freelance worker’s services. The law prohibits a hiring party from discriminating or taking adverse action against a freelance worker for taking specified actions relating to the enforcement of these provisions. The law authorizes an aggrieved freelance worker or a public prosecutor to bring a civil action to enforce these provisions. Delaware Healthy Delaware Families Act The Healthy Delaware Families Act requires that employers with ten or more employees must enroll in the paid leave program and begin paying the following contributions: The contribution rate for medical leave benefits as a percentage of wages is 0.4%. The 2025 contribution rate for family caregiving benefits as a percentage of wages is 0.08%. The contribution rate for parental leave benefits as a percentage of wages is 0.32%. Employers may deduct up to 50% of premiums from employees’ wages. New York Equal Protection The New York Constitution, and specifically Article 1, § 11 (the equal protection law) is amended to also prohibit discrimination based upon: Ethnicity National origin Age Disability Sex, including:Sexual orientation Gender identity Gender expression Pregnancy Pregnancy outcomes Reproductive healthcare and autonomy Paid Prenatal Leave Private sector employers must provide pregnant employees with twenty (20) hours of paid prenatal leave per year. The twenty hours must be made available upon hire. Pregnant employees can use this leave for healthcare services received by the employee during the employee’s pregnancy or related to such pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussing with the employee’s health care provider related to the employee’s pregnancy. Prenatal leave may be taken in one-hour increments. Prenatal leave is not paid out when an employee leaves their employment. Pennsylvania Fair Contracting for Health Care Practitioners Act The Fair Contracting for Health Care Practitioners Act prohibits non-compete agreements exceeding one year for doctors, Certified Registered Nurse Anesthetists (CRNAs), Certified Registered Nurse Practitioners (CRNPs), and Physician Assistants (PAs). Disclaimer: This list is not intended to provide a comprehensive overview of all employment laws effective January 1, 2025, across the United States. Instead, it highlights significant employment law updates in jurisdictions where Offit Kurman serves clients. This content is for informational purposes only and does not constitute legal advice. For personalized guidance, please consult with an attorney.
December 31, 2024
Labor and Employment
Better Call Sarah: Inappropriate Behavior at Office Parties - What You Need to Know
Mistletoe and Missteps: Ensuring a Safe and Fun Holiday Party Dear Sarah, I’m looking to keep our company’s annual holiday party lighthearted and fun and make sure it doesn't turn into a legal disaster (nobody wants a sexual harassment lawsuit under the mistletoe, right?). So, what's the best way to ensure our holiday festivities stay friendly and fun, without crossing any lines? And, just in case things do get out of hand, how should we handle any complaints or potential allegations of misconduct that may arise after the party? Cheers to no awkward lawsuits, The Mistletoe Monitor Inappropriate Behavior at Office Parties: What You Need to Know Dear Mistletoe Monitor, As much as the holiday party is a time for celebration, it's also a time when employer liability can become a concern. When alcohol is involved, workplace boundaries can become blurred, increasing the risk of inappropriate behavior—whether under the mistletoe or at the office party in general—which could lead to serious legal consequences. So, what should you do if something goes awry? Here are a few steps to mitigate liability and protect your business if an issue arises. 1. Respond Promptly to the Complainant. If an employee comes forward with a complaint, act quickly. Start by talking to the employee and assuring them that the complaint will be investigated thoroughly. Document all conversations and begin your investigation right away. This demonstrates that you take such matters seriously and are committed to creating a safe workplace. 2. Consider Having an Attorney Direct the Investigation. One option is to bring in legal counsel—either in-house or external—to guide the investigation. Having an attorney involved ensures that the process is handled appropriately and can help protect communications under attorney-client privilege. This is particularly important when dealing with sensitive situations that could lead to legal exposure. If you're unsure about the process or legal ramifications, consulting with an attorney early on is always a good idea. 3. Consider Protective Measures Pending the Investigation. Depending on the nature of the complaint and the circumstances, you may need to take interim actions. This could include modifying work assignments, adjusting schedules, or even placing the alleged harasser on leave. The goal is to maintain a safe environment while the investigation is ongoing. For example, if the situation involves two employees from different departments, you could temporarily change their work assignments to prevent further interaction until the investigation is completed. 4. Tailor the Response to the Situation. Remember that each case is unique, and your response should be proportional to the situation at hand. For serious allegations, you may need to take more immediate action, including suspensions or temporary leave for the accused party. Always consult with legal counsel to determine the most appropriate course of action based on the facts. 5. Keep the Event Safe and Enjoyable. Of course, the goal is to prevent these situations from occurring in the first place. You can minimize the risk of harassment claims by being proactive, setting clear expectations, and monitoring the party. Have policies in place to promote respectful behavior and remind employees that although they are at a social event, they still represent the company. If someone gets out of hand, don't hesitate to step in to prevent further issues. Your office holiday party should be a time for celebration, but it’s important to be prepared in case something goes wrong. By following these best practices, setting clear expectations, and consulting legal counsel, when necessary, you can reduce the chances of a party mishap turning into a legal nightmare. Happy holidays (with boundaries!).
December 17, 2024
Labor and Employment
Better Call Sarah: Reducing Liability While Hosting a Holiday Event
Dear Sarah, Planning our holiday party and I’m a little ‘shaken’ with concern—what are my liabilities if employees overindulge? Am I responsible if someone gets hurt, causes a scene, or drinks and drives? Should I be worried about potential legal fallout, or is it on them to know when to stop? How can I keep the fun flowing without the liability risk? Cheers (responsibly), HR in a Holidaze Dear HR in a Holidaze, While employees are generally responsible for their own actions, as an employer, you still have a duty to provide a safe environment and take reasonable steps to manage risks. Even without alcohol, social gatherings can lead to issues such as bullying, sexual harassment, other misconduct, and accidents and injuries. If alcohol is provided at your holiday party, however, you could be held liable if an employee’s intoxication leads to injury, damage, or misconduct, particularly if it occurs during or shortly after the event. For example, an impaired employee causing a workplace accident or an incident of harassment could result in legal exposure for the company. Additionally, employers need to be aware that providing alcohol brings with it legal liability—similar to what your local tavern owner faces. Courts have frequently held event sponsors responsible for tragedies involving impaired individuals, particularly when those individuals are involved in accidents. The entity providing the alcohol takes on some risk for the individual’s actions while intoxicated, including the possibility that alcohol may end up in the hands of minors. While it’s impossible to eliminate all risk, there are best practices employers can follow to reduce liability at holiday events. These aren’t meant to be a buzzkill but are steps to ensure that your event is safe and fun while limiting legal exposure. Consider Not Providing Alcohol at All: One viable risk management option is to simply avoid alcohol at company functions. While some employees might miss out on the drinks, offering gifts or prizes instead can offset this. Especially in events where children are present, excluding alcohol can prevent minors from gaining access and create a more relaxed, enjoyable atmosphere for everyone. Provide Plenty of Non-Alcoholic Options: straightforward and effective way to manage risk is by providing a variety of non-alcoholic beverages. Avoid putting your employees in a situation where their only options are alcoholic drinks. Offer a selection of sodas, iced tea, lemonade, sparkling water, and even a signature mocktail to encourage moderation and create an inclusive atmosphere for everyone. Use a Professional Caterer or Bartender: For more formal or elaborate events, consider using a third-party vendor to manage alcohol service. Professional servers are trained to identify intoxicated individuals and can limit consumption. If you go this route, make sure to carefully review the vendor contract, request liability insurance, and consider a “hold harmless” agreement to protect your business. Plan for Safe Transportation: One of the most important considerations is ensuring safe transportation home for employees who may overindulge. Consider arranging taxis, ride-sharing, or designated drivers to help those who may not be in condition to drive. It’s also helpful to have key members of management refrain from drinking and monitor the event to spot potential problems early. Set Clear Expectations for Behavior: Let employees know that, although alcohol is provided, they’re expected to act professionally. Remind everyone that they are still representatives of the company at the event, and inappropriate behavior won’t be tolerated. Make it clear that if someone’s actions put others at risk (such as driving while intoxicated), the company will take steps to ensure their safety—including potentially involving law enforcement if necessary. Limit Alcohol Consumption: Consider implementing a drink ticket system to limit the amount of alcohol each attendee can consume. A couple of drinks per person are generally sufficient for a fun evening. This can help prevent overindulgence and manage the alcohol flow in a controlled manner. By implementing these precautions, you can significantly reduce the chances of liability while hosting a fun and safe holiday event. Consulting with legal counsel to ensure your event policies are solid and well-documented is also a smart move. Ultimately, the goal is to create an enjoyable and memorable event without putting the company at risk. So, to answer your question: yes, employers can be held responsible for incidents that occur during or as a result of company-sponsored events. However, with proper planning, clear communication, and safety measures in place, HR can minimize the risks while still fostering a festive and inclusive environment.
December 10, 2024
Labor and Employment
State of the Union – Artificial Intelligence
On June 28, 2024, the Supreme Court issued its decision in Loper Bright v. Raimondo, overruling the Chevron doctrine[1] which required courts to observe regulatory agency interpretation of statutory law. In Loper Bright, the Court ruled that judges cannot defer to an agency’s interpretation of the law merely because it is deemed “reasonable.” The decision cautioned courts against relying on agencies' claims of authority based on their “subject matter expertise” or their role in political “policymaking.” Instead, federal judges are required to exercise “independent judgment” and interpret statutes based on their "best meaning." This standard makes judges more skeptical of agency interpretations, particularly when those interpretations are inconsistent. While judges may consider agency guidance if it is persuasive, longstanding, and consistent, such guidance is not legally binding. In the dissent of Loper Bright, Justice Elena Kagan noted that artificial intelligence (AI) is likely to be “the next big piece of legislation on the horizon.” She emphasized the challenges Congress faces in regulating the technical area of AI, stating that “Congress can hardly see a week in the future with respect to this subject, let alone a year or a decade.” As Congress endeavors to legislate AI in the wake of Loper Bright, it will have to be specific in what power will belong to agencies to regulate AI. In turn, agencies will have less flexibility in creating and enforcing AI regulations unless power is specifically delegated to them in AI legislation. The rapidly expanding landscape of federal and state legislation and regulation in the AI space is already creating compliance challenges for employers. Given the fast-paced evolution of AI technology, regulatory flexibility is essential. In the wake of Loper Bright, while legal compliance remains a priority, employers will find it easier to challenge agency rules—especially if those rules deviate from the statutory text or shift unpredictably with changes in administration. Akin to the recent legislation passed by the state of Colorado,[2] before Congress enacts comprehensive AI federal legislation, local and state governments will have the opportunity to pass AI regulation specific to for their constituents. However, without a greater federal regulatory scheme expressing a goal of uniformity, this could lead to divergent AI judicial decisions. In recent years, and in the absence of congressional legislation on artificial intelligence (AI) in the workplace, the U.S. Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB), and the U.S. Department of Labor (DOL) have announced various initiatives to restrict the use of AI in the workplace. The possibility of differing interpretations between state and federal courts raises significant concerns about the future of AI regulation in the United States. Employers operating across multiple states may encounter conflicting requirements, adding complexity to an already challenging compliance landscape. Additionally, employers could face varying legal standards when individuals seek redress for alleged AI-related harms, depending on whether the case is heard in state or federal court. Consequently, the legal landscape for AI is poised to become fragmented and complex. The wheels of justice may also turn too slow to keep up with AI’s fast evolving pace. Greater reliance on courts to determine the appropriate usage of AI could place users of AI at an increased risk for litigation. To minimize potential liability, AI users should implement an AI governance system. Such a system will determine how the AI used, its limitations, risks and provide guidance on best practices. Having advanced knowledge of an AI system's potential pitfalls will provide a business with a tactical advantage to avoid unnecessary litigation while still leveraging the benefits of the AI technology. Legal strategies will need to be tailored to the specific jurisdiction in question, and companies may need to implement more robust compliance measures to account for the varying standards that will emerge. [1] Chevron established a two-step analysis for judicial review of statutory interpretation. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc, 467 U.S. 837 (1984). Under Chevron, if a court concluded that a statute was silent or ambiguous, it had to defer to an agency’s permissible construction of the statute. The Loper Bright decision is premised on what the majority believes is a plain text reading of the Administrative Procedure Act (APA), which governs judicial challenges to agency actions. The Court specifically determined that the APA, which was not considered in Chevron, reflects the traditional understanding of the judiciary's role. This role requires courts to independently interpret the meaning of laws. [2] Colorado’s newly enacted AI law aims to establish comprehensive regulations governing AI use, with a focus on transparency, accountability, and fairness. The law requires companies to conduct impact assessments and implement safeguards to mitigate bias and discrimination in AI systems, with compliance required by February 1, 2026.
November 22, 2024
